Exhibit 99.13
AIG CENTRE CAPITAL GROUP, INC.,
Purchaser,
CHASE MANHATTAN MORTGAGE CORPORATION,
Seller and Servicer
MORTGAGE LOAN PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of August 1, 2002
Whole Loan Series 2002 WL-K
TABLE OF CONTENTS
ARTICLE I
Section 1.01 Defined Terms................................................1
ARTICLE II
Section 2.01 Agreement to Purchase........................................15
Section 2.02 Purchase Price...............................................15
Section 2.03 Servicing of Mortgage Loans..................................16
Section 2.04 Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files...............................16
Section 2.05 Books and Records............................................17
Section 2.06 Transfer of Mortgage Loans...................................18
Section 2.07 Delivery of Mortgage Loan Documents..........................18
Section 2.08 Quality Control Procedures...................................20
ARTICLE III
Section 3.01 Representations and Warranties of
the Seller...................................................21
Section 3.02 Representations and Warranties as to
Individual Mortgage Loans....................................24
Section 3.03 Repurchase; Substitution.....................................35
ARTICLE IV
Section 4.01 Seller to Act as Servicer....................................38
Section 4.02 Collection of Mortgage Loan Payments.........................41
Section 4.03 Realization Upon Defaulted Mortgage Loans....................41
Section 4.04 Establishment of Custodial Accounts;
Deposits in Custodial Accounts...............................43
Section 4.05 Permitted Withdrawals from the
Custodial Account............................................44
Section 4.06 Establishment of Escrow Accounts;
Deposits in Escrow Accounts..................................45
Section 4.07 Permitted Withdrawals From Escrow Account....................46
Section 4.08 Payment of Taxes, Insurance and Other
Charges; Maintenance of Primary Mortgage
Insurance Policies; Collections Thereunder...................47
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Section 4.09 Transfer of Accounts.........................................48
Section 4.10 Maintenance of Hazard Insurance..............................48
Section 4.11 Maintenance of Mortgage Impairment
Insurance Policy.............................................49
Section 4.12 Fidelity Bond, Errors and Omissions
Insurance....................................................50
Section 4.13 Title, Management and Disposition of REO
Property.....................................................51
Section 4.14 Notification of Maturity Date................................53
ARTICLE V
Section 5.01 Distributions................................................54
Section 5.02 Statements to the Purchaser..................................55
Section 5.03 Monthly Advances by the Seller...............................56
Section 5.04 Liquidation Reports..........................................57
ARTICLE VI
Section 6.01 Assumption Agreements........................................58
Section 6.02 Satisfaction of Mortgages and Release
of Mortgage Files............................................59
Section 6.03 Servicing Compensation.......................................60
Section 6.04 Annual Statement as to Compliance............................61
Section 6.05 Annual Independent Certified Public
Accountants' Servicing Report................................61
Section 6.06 Purchaser's Right to Examine Seller Records..................61
Section 6.07 Annual Officers Certificate..................................61
ARTICLE VII
Section 7.01 Seller Shall Provide Information as Reasonably
Required.....................................................63
ARTICLE VIII
Section 8.01 Indemnification; Third Party Claims..........................64
Section 8.02 Merger or Consolidation of the Seller........................64
Section 8.03 Limitation on Liability of the Seller
and Others...................................................65
Section 8.04 Seller Not to Assign or Resign...............................66
Section 8.05 No Transfer of Servicing.....................................66
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ARTICLE IX
Section 9.01 Events of Default............................................67
Section 9.02 Waiver of Defaults...........................................69
ARTICLE X
Section 10.01 Termination.................................................70
Section 10.02 Termination Without Cause...................................70
ARTICLE XI
Section 11.01 Reconstruction of Mortgage Loans...........................71
ARTICLE XII
Section 12.01 Successor to the Seller.....................................73
Section 12.02 Amendment...................................................74
Section 12.03 Recordation of Agreement....................................74
Section 12.04 Governing Law...............................................74
Section 12.05 Notices.....................................................74
Section 12.06 Severability of Provisions..................................75
Section 12.07 Exhibits....................................................76
Section 12.08 General Interpretive Principles.............................76
Section 12.09 Reproduction of Documents...................................76
Section 12.10 Confidentiality of Information..............................77
Section 12.11 Recordation of Assignments of Mortgage......................77
Section 12.12 Assignment by Purchaser.....................................77
Section 12.13 No Partnership..............................................78
Section 12.14 Execution; Successors and Assigns..........................78
Section 12.15 Entire Agreement............................................78
Section 12.16 No Solicitation.............................................78
Section 12.17 Closing.....................................................79
Section 12.18 Intended Third Party Beneficiaries..........................80
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EXHIBITS
A Contents of Mortgage File
B Custodial Account Letter Agreement
C Escrow Account Letter Agreement
D Form of Assignment and Assumption
E Form of Trial Balance
F Mortgage Loan Schedule
G Request for Release of Documents and Receipt
H Pool Statistics
I Underwriting Guidelines
SCHEDULES
A Purchase Price and Terms
Letter dated August 7, 2002
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This is a Mortgage Loan Purchase, Warranties and Servicing Agreement,
dated as of August 1, 2002, and is executed between AIG Centre Capital Group,
Inc., as Purchaser (the "Purchaser"), and Chase Manhattan Mortgage Corporation
(the "Seller"), as seller and servicer.
W I T N E S S E T H :
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, exclusive of the servicing rights associated with such Mortgage Loans,
pursuant to the terms of a letter agreement dated as of August 7, 2002 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 lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule,
which is annexed hereto as Exhibit F; and
WHEREAS, the Purchaser and the Seller wish to prescribe the
representations and warranties of the Seller with respect to itself and the
Mortgage Loans and the management, servicing, transfer and control of the
Mortgage Loans;
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 meanings 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 FNMA servicing practices and
procedures, for MBS pool mortgages, as defined in the FNMA Guides including
future updates.
Agreement: This Mortgage Loan Purchase, Warranties and Servicing Agreement
including all exhibits hereto, amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Applicable Requirements: Shall mean and include with respect to the
Mortgage Loans: (i) all contractual obligations of Seller, and the Originator
and any Prior Servicers including, without limitation, those contractual
obligations contained in this Agreement, in any agreement with any insurer or in
the Mortgage Loan Documents, (ii) all applicable federal, state and local legal
and regulatory requirements (including statutes, rules, regulations and
ordinances) binding upon Seller, the Originator and any Prior Servicer; (iii)
all other applicable requirements and guidelines of each governmental agency,
board, commission, instrumentality and other governmental body or office having
jurisdiction, including without limitation those of any insurer; (iv) all other
applicable judicial and administrative judgments, orders, stipulations, awards,
writs and injunctions; and (v) Accepted Servicing Practices.
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 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.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale or transfer of the Mortgage Loan.
Assignment and Assumption: An assignment and assumption agreement in the
form of Exhibit D hereto.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than: (i) a Saturday or Sunday, or (ii) a
legal holiday in the State of New York, or (iii) a day on which banks in the
State of New York are authorized or obligated by law or executive order to be
closed.
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Closing Date: August 28, 2002, or such other date as shall be mutually
agreed upon by the parties hereto.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Co-op 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.
Custodial Account: Each separate demand account or accounts created and
maintained pursuant to Section 4.04 which shall be entitled "Chase Manhattan
Mortgage Corporation, in trust for the [Purchaser], Owner of Whole Loan Series
2002 WL-K" and shall be established in an Eligible Account, in the name of the
Person that is the Purchaser with respect to the related Mortgage Loans.
Cut-off Date: August 1, 2002.
Determination Date: The 15th day (or if such 15th day is not a Business
Day, the Business Day immediately preceding such 15th day) of the month of the
related Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any 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.
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 Baa3, and a short term debt rating of P3, from Xxxxx'x
Investors Services 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
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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 and (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 each 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.
Equity Take-Out Refinanced Mortgage Loan: A Refinanced Mortgage Loan the
proceeds of which were in excess of the outstanding principal balance of the
existing mortgage loan.
Escrow Account: Each separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "Chase Manhattan
Mortgage Corporation, in trust for the [Purchaser], Owner of Whole Loan Series
2002 WL-K, and various Mortgagors" and shall be established in 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 required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 9.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
FHLMC Guide: The FHLMC Single Family Seller/Servicer Guide and all
amendments or additions thereto.
Fidelity Bond: A fidelity bond to be maintained by the Seller pursuant to
Section 4.12.
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FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act
of 1989.
First Remittance Date: September 18, 2002, or if such day is not a
Business Day, the first Business Day immediately succeeding such date.
FNMA: The Federal National Mortgage Association, or any successor thereto.
FNMA Guides: The FNMA Sellers' Guide and the FNMA Servicers' Guide and all
amendments or additions thereto.
GAAP: Generally accepted accounting procedures, consistently applied.
HUD: The United States Department of Housing and Urban Development or any
successor.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio
of the original outstanding principal amount of the Mortgage Loan, to (i) the
Appraised Value of the Mortgaged Property at origination with respect to a
Refinanced Mortgage Loan, and (ii) the lesser of the Appraised Value of the
Mortgaged Property at origination or the purchase price of the Mortgaged
Property with respect to all other Mortgage Loans.
Monthly Advance: The aggregate of the advances made by the Seller on any
Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan which is payable by a Mortgagor under the related Mortgage
Note.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan, the
mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a first lien on an unsubordinated estate in fee simple in real property
securing the Mortgage Note;
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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 lien upon a leasehold estate of the
Mortgagor.
Mortgage File: The mortgage documents pertaining to a particular Mortgage
Loan which are specified in Exhibit A hereto and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as required by Section 4.11.
Mortgage Interest Rate: The annual rate at which interest accrues on any
Mortgage Loan in accordance with the provisions of 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 Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan, excluding
replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents listed in Exhibit A.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans annexed hereto as
Exhibit F, such schedule 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 Mortgaged Property is owner-occupied, a
second home, or an investment property;
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(5) the type of residential property constituting the Mortgaged Property;
(6) the original months to maturity and the remaining months to maturity
from the 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;
(7) the Loan-to-Value Ratio at origination;
(8) the Mortgage Interest Rate;
(9) the stated maturity date;
(10) the amount of the Monthly Payment as of the Cut-off Date;
(11) the original principal amount of the Mortgage Loan;
(12) the principal balance of the Mortgage Loan as of the opening of
business on the Cut-off Date, after deduction of payments of principal due on or
before the Cut-off Date whether or not collected;
(13) a code indicating the purpose of the Mortgage Loan (i.e., purchase,
rate and term refinance, equity take-out refinance);
(14) a code indicating the documentation style (i.e. full, alternative or
reduced);
(15) the number of times during the twelve (12) month period preceding the
Closing Date that any Monthly Payment has been received more than thirty (30)
days after its Due Date;
(16) the date on which the first payment is or was due; and
(17) a code indicating whether or not the Mortgage Loan is the subject of
Primary Mortgage Insurance and, if so, the name of the primary mortgage insurer
and the coverage percentage.
With respect to the Mortgage Loans in the aggregate, the Mortgage Loan
Schedule shall set forth the following information, as of the Cut-off Date:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage
Loans;
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(3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and
(4) the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to a Mortgage Loan that is not a Co-op
Loan, the underlying real property securing repayment of a Mortgage Note,
consisting of a single parcel of real estate considered to be real estate under
the laws of the State in which such real property is located, which may include
condominium units and planned unit developments, improved by a residential
dwelling; 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, a leasehold estate of the Mortgagor, the term of which
is equal to or longer than the term of the Mortgage.
Mortgagor: The obligor on a Mortgage Note.
Negative Amortization: A gradual increase in the mortgage debt that occurs
when the monthly fixed installment is not sufficient for full application to
both principal and interest. The interest shortage is added to the unpaid
principal balance to create "negative" amortization.
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 an opinion of counsel who (i) is in fact independent of the
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Servicer of the Mortgage Loans or in an
affiliate of either and (iii) is not connected with the Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
The cost of the preparation and delivery of any such opinion requested by the
Trustee shall be an expense of the Trust
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Fund unless Purchaser decides, in its own discretion, to bear such expense for
the Trust Fund, in which case any such cost will be borne by Purchaser.
Originator: Means, with respect to any Mortgage Loan, the entity(ies) that
(i) took the Mortgagor's loan application (ii) processed the Mortgagor's loan
application, or (iii) closed and/or funded the Mortgagor's Mortgage Loan.
OTS: Office of Thrift Supervision, its successors and assigns.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Prepayment Interest Shortfall Amount: With respect to any Mortgage Loan
that was subject to a Principal Prepayment in full or in part during any
Principal Prepayment Period, which Principal Prepayment was applied to such
Mortgage Loan during such Principal Prepayment Period, the amount of interest at
the Mortgage Loan Remittance Rate that would have accrued on the amount of such
Principal Prepayment during the period commencing on the date as of which such
Principal Prepayment was applied to such Mortgage Loan and ending on the day
immediately preceding the Due Date, inclusive.
Primary Mortgage Insurance Policy: Each primary policy of mortgage
insurance represented to be in effect pursuant to the Mortgage Loan Schedule, or
any replacement policy therefor obtained by the Seller pursuant to Section 4.08
in each case, in a form acceptable to FNMA or FHLMC and issued by a Qualified
Insurer.
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 payment or other recovery of principal on a
Mortgage Loan full or partial which is received in advance of its scheduled Due
Date, including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Principal Prepayment Period: With respect to any Remittance Date, the
calendar month immediately preceding the month in which the related Remittance
Date occurs.
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Prior Servicer: Any Person that was a servicer of any Mortgage Loan before
Seller became the Servicer of the Mortgage Loan, if applicable.
Purchase Price: As defined in Section 2.02.
Purchase Price and Terms Letter: As defined in the Recitals to this
Agreement.
Purchaser: AIG Centre Capital Group, Inc., its successors in interest and
assigns.
Qualified Appraiser: 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 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, approved as an insurer by FNMA and
FHLMC.
Rating Agencies: Standard & Poor's Ratings Services, Xxxxx'x Investors
Service 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.
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.
Regulation X: HUD regulations implementing RESPA.
REMIC: A "real estate mortgage investment conduit," as such term is
defined in the Internal Revenue Code of 1986, as amended.
Remittance Date: The 18th day of any month, beginning with the First
Remittance Date, or if such 18th day is not a Business Day, the first Business
Day immediately succeeding such 18th day.
REO Disposition: The final sale by the Seller of any REO Property.
REO Disposition Proceeds: Amounts received by the Seller in connection
with a related REO Disposition.
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REO Property: A Mortgaged Property acquired by the Seller on behalf of the
Purchaser as described in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan, a price equal to (i)
the outstanding principal balance of the Mortgage Loan, plus (ii) interest on
such outstanding principal balance at the Mortgage Loan Remittance Rate from the
last date through which interest has been paid and distributed to the Purchaser
to the date of repurchase, plus, (iii) other unreimbursed advances recoverable
pursuant to Applicable Requirements, and third-party expenses incurred in
connection with the transfer of the Mortgage Loan being repurchased; less
amounts received or advanced in respect of such repurchased Mortgage Loan which
are being held in the Custodial Account for distribution in the month of
repurchase.
RESPA: Real Estate Settlement Procedure Act, as amended.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
Seller's Officer's Certificate: A certificate signed by the Chairman of
the Board, President, any Vice President or Treasurer of Seller stating the date
by which Seller expects to receive any missing documents sent for recording from
the applicable recording office.
Servicer: Chase Manhattan Mortgage Corporation, its successors and
assigns.
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 the 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 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 the Mortgaged Property if the Mortgaged Property is acquired in
full or partial satisfaction of the
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Mortgage, (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, as servicer, 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 a period of
one full month, be equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the outstanding 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. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 4.05) of such Monthly Payment collected by the
Seller, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The Servicing Fee Rate shall be a rate per annum equal
to 25 basis points (0.25%).
Servicing File: With respect to each Mortgage Loan, the file retained by
the Seller consisting of originals of all documents in the Mortgage File which
are not delivered to the Purchaser and copies of the Mortgage Loan Documents
listed in Exhibit A, the originals of which are delivered to the Purchaser or
its designee pursuant to Section 2.04.
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.
Servicing Rights: Means the obligations to collect the payments for the
reduction of principal and application of interest, pay taxes and insurance,
remit collected payments, provide foreclosure services, provide full escrow
administration and otherwise administer the Mortgage Loans in accordance with
Applicable Requirements, together with the right to receive the servicing fee
income and any ancillary income arising from or connected to the Mortgage Loans.
Servicing Rights shall include retention of the related custodial, escrow or
impound accounts created and maintained by Seller with respect to the Mortgage
Loans for the deposit and retention of interest and principal,
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taxes, assessments or grounds rents, hazard and mortgage insurance and other
related escrow or custodial items.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of such Mortgage Loan at the 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.
Subservicer: Any subservicer which is subservicing the Mortgage Loans
pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 4.01.
Subservicing Agreement: An agreement between the Seller and a Subservicer
for the servicing of the Mortgage Loans.
Trust: Any trust identified by Purchaser into which Mortgage Loans have
been placed as part of a reconstitution.
Trust Agreement: The agreement pursuant to which the Trust is created.
Trustee: Any trustee identified by Purchaser in connection with any Trust.
Trust Fund: Any trust fund identified by the Trustee with respect to a
Trust.
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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 the Mortgage
Loans, exclusive of the servicing rights associated therewith, having an
aggregate principal balance on the Cut-off Date in an amount as set forth in the
Mortgage Loan Schedule. The Seller shall deliver the Mortgage Loan Schedule for
the Mortgage Loans to be purchased on the Closing Date to the Purchaser at least
two (2) Business Days prior to the Closing Date.
Section 2.02 Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of par
as stated in the Purchase Price and Terms Letter (subject to adjustment as
provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans listed on the attached Mortgage Loan
Schedule, after application of scheduled payments of principal due on or before
the Cut-off Date whether or not collected. The initial principal amount of the
Mortgage Loans shall be the aggregate principal balance of the Mortgage Loans,
so computed as of the Cut-off Date.
In addition to the Purchase Price as described above, the Purchaser shall
pay to the Seller, at closing, accrued interest on the current principal amount
of the Mortgage Loans as of the Cut-off Date at the weighted average Mortgage
Loan Remittance Rate of the Mortgage Loans.
The Purchase Price plus accrued interest as set forth in the preceding
paragraph shall be paid on the Closing Date by wire transfer of immediately
available funds.
The Purchaser shall be entitled to (1) all scheduled principal due after
the Cut-off Date, (2) all other recoveries of principal collected on or after
the Cut-off Date (provided, however, that all scheduled payments of principal
due on or before the Cut-off Date and collected by the Seller or any successor
servicer after the Cut-off Date shall belong to the Seller), and (3) all
payments of interest on the Mortgage Loans net of applicable Servicing Fees
(minus that portion of any such payment which is allocable to the period prior
to the Cut-off
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Date). The outstanding principal balance of each Mortgage Loan as of the Cut-off
Date is determined after application of payments of principal due on or before
the Cut-off Date whether or not collected, together with any unscheduled
Principal Prepayments collected prior to the Cut-off Date; provided, however,
that payments of scheduled principal and interest prepaid for a Due Date beyond
the Cut-off Date shall not be applied to the principal balance as of the Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
If, subsequent to the Closing Date, the amount on which the Purchase Price
with respect to a Mortgage Loan was based is found to be in error, or if, for
any other reason, the Purchase Price or such other amounts are found to be in
error, within ten (10) Business Days of the receipt of information sufficient to
provide notice that payment is due the party benefiting from the error shall pay
an amount sufficient to correct and reconcile the Purchase Price plus interest
thereon at an agreed upon market rate or such other amounts and shall provide a
reconciliation statement and such other documentation sufficient reasonably to
satisfy the other party concerning the accuracy of such reconciliation.
Section 2.03 Servicing of Mortgage Loans.
Simultaneously with the execution and delivery of this Agreement, the
Seller does hereby agree to service the Mortgage Loans listed on the Mortgage
Loan Schedule subject to the terms of 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 the Closing Date, the Seller sold, transferred, assigned, set over
and conveyed to the Purchaser, without recourse, and the Seller hereby
acknowledges that the Purchaser has, subject to the terms of this Agreement, all
the right, title and interest of the Seller in and to the Mortgage Loans. The
delivery of the Mortgage Files was on the Closing Date at the expense of the
Seller. Seller shall maintain a Servicing File consisting of a copy of the
contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the Purchaser. The Servicing File shall contain
all documents necessary to service the Mortgage Loans. The possession of each
Servicing File by the Seller is at the will of
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the Purchaser, for the sole purpose of servicing the related Mortgage Loan, and
such retention and possession by the Seller is in a custodial capacity only.
From the Closing Date, the ownership of each 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. The Seller shall release its custody of the contents of the Mortgage
Files only in accordance with written instructions of the Purchaser, except when
such release is required as incidental to the Seller's servicing of the Mortgage
Loans or is in connection with a repurchase of any Mortgage Loan or Loans with
respect thereto pursuant to this Agreement, such written instructions shall not
be required.
Section 2.05 Books and Records.
The sale of each Mortgage Loan has been reflected on the Seller's balance
sheet and other financial statements as a sale of assets by the Seller. The
Seller shall be responsible for maintaining, and shall maintain, a complete set
of books and records for the Mortgage Loans which shall be appropriately
identified in the Seller's computer system to clearly reflect the ownership of
the Mortgage Loan 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 FNMA
or FHLMC, 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 FNMA Guides.
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The Seller shall maintain with respect to each Mortgage Loan and shall
make available for inspection by any Purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of a Mortgage
Loan and thereafter in accordance with applicable laws and regulations.
In addition to the foregoing, Seller shall provide to any supervisory
agents or examiners that regulate Purchaser, including but not limited to, the
OTS, the FDIC and other similar entities, access, during normal business hours,
upon reasonable advance notice to Seller and without charge to Purchaser or such
supervisory agents or examiners, to any documentation regarding the Mortgage
Loans that may be required by any applicable regulator. It is anticipated that
Purchaser will reimburse Seller for its out-of-pocket expenses incurred in
complying with this requirement.
Section 2.06 Transfer of Mortgage Loans.
The Seller shall keep at its servicing 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 hereof. 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 notice of the
transfer of such Mortgage Loan has been delivered to the Seller in accordance
with this Section 2.06 and the books and records of the Seller show such person
as the owner of the Mortgage Loan. The Purchaser may, subject to the terms of
this Agreement, sell and transfer one or more of the Mortgage Loans, provided,
however, that (i) the transferee will not be deemed to be a Purchaser hereunder
binding upon the Seller unless such transferee shall agree in writing to be
bound by the terms of this Agreement and an original counterpart of the
instrument of transfer and an Assignment and Assumption of this Agreement in
substantially the form of Exhibit D hereto executed by the transferee shall have
been delivered to the Seller, and (ii) in no event shall there be more than
three(3) Persons at any given time having the status of "Purchaser" under each
of the reconstitution agreements, as more particularly described in Sections
11.01 and 12.12 hereunder, and (iii) if the Seller is to service pursuant to a
reconstitution agreement, such agreement will not contain any greater
obligations on the part of the Seller than are contained in this Agreement. The
Purchaser also shall advise the Seller of the transfer. Upon receipt of notice
of the transfer, the Seller shall xxxx its books and records to reflect the
ownership of the Mortgage Loans of such assignee, and the previous Purchaser
shall be released from its obligations hereunder with respect to the Mortgage
Loans sold or transferred.
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Section 2.07 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Purchaser or its designee,
_______________, the Mortgage Loan Documents. The documents enumerated as items
(1), (2), (3), (4), (5), (6), (7), (8), and (16) in Exhibit A hereto shall be
delivered by the Seller to the Purchaser or its designee,
_____________________________, no later than four (4) Business Days prior to the
Closing Date pursuant to a bailee letter agreement. All other documents in
Exhibit A hereto, together with all other documents executed in connection with
the Mortgage Loan that Seller may have in its possession, shall be retained by
the Servicer in trust for the Purchaser. If the Seller cannot deliver the
original recorded Mortgage Loan Documents or the original policy of title
insurance, including riders and endorsements thereto, on the Closing Date, the
Seller shall, promptly upon receipt thereof and in any case not later than 180
days from the Closing Date, deliver such original documents, including 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 Closing Date solely due to delays in making
such delivery by reason of the fact that such documents shall not have been
returned by the appropriate recording office, Seller shall deliver such document
to Purchaser, or its designee, within such time period as specified in a
Seller's Officer's Certificate. In the event that documents have not been
received by the date specified in the Seller's Officer's Certificate, a
subsequent Seller's Officer's Certificate shall be delivered by such date
specified in the prior Seller's Officer's Certificate, stating a revised date
for receipt of documentation. The procedure shall be repeated until the
documents have been received and delivered. The Seller shall continue to use
commercially reasonable best efforts to effect delivery within 270 days of the
Closing Date.
The Seller shall pay all initial recording fees, for the Assignments of
Mortgage and any other fees in connection with the transfer of all original
documents to the Purchaser or its designee. Seller shall prepare, in recordable
form, all Assignments of Mortgage necessary to assign the Mortgage Loans to
Purchaser, or its designee. Seller shall be responsible for recording the
Assignments of Mortgage.
Seller shall provide a copy of the title insurance policy to Purchaser or
its designee within ninety (90) days of the receipt of the recorded documents
(required for issuance of such policy) from the applicable recording office.
Any review by the Purchaser, or its designee, of the Mortgage Files shall
in no way alter or reduce the Seller's obligations hereunder.
If the Purchaser or its designee discovers any defect with respect to a
Mortgage File, the Purchaser shall, or shall cause its designee to, give written
specification of such defect to the Seller in the exception report or the
certification delivered
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pursuant to this Section 2.07, and the Seller shall cure or repurchase such
Mortgage Loan in accordance with Section 3.03.
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 Section 4.01 or 6.01 within
one week of their execution; provided, however, that the Seller shall provide
the Purchaser, or its designee, with a certified true copy of any such document
submitted for recordation within one week of its execution, and shall provide
the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be a true and
complete copy of the original within sixty (60) days of its submission for
recordation.
From time to time, in order to fulfill its obligations hereunder, the
Seller may have a need for Mortgage Loan Documents to be released from
Purchaser, or its designee. Purchaser shall, or shall cause its designee, upon
the written request of the Seller, within ten (10) Business Days, deliver to the
Seller, any requested documentation previously delivered to Purchaser as part of
the Mortgage File, provided that such documentation is promptly returned to
Purchaser, or its designee, when the Seller no longer requires possession of the
document, and provided that during the time that any such documentation is held
by the Seller, such possession is in trust for the benefit of Purchaser. Seller
shall indemnify Purchaser, and its designee, from and against any and all
losses, claims, damages, penalties, fines, forfeitures, costs and expenses
(including court costs and reasonable attorney's fees) resulting from or related
to the loss, damage, or misplacement of any documentation delivered to Seller
pursuant to this paragraph.
Any and all documents required to be delivered pursuant to this Section
2.07 other than those Mortgage Loan Documents required to be delivered within
four (4) Business Days prior to the Closing Date pursuant to a bailee letter
agreement shall be delivered to the following addressee:
__________________________.
Section 2.08 Quality Control Procedures.
The Seller must 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.
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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
the 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 State of New Jersey 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 such Seller by any such
state, and in any event such 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;
(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 and to conduct its business as presently
conducted, has duly authorized the execution, delivery and performance of this
Agreement and any agreements contemplated hereby, has duly executed and
delivered this Agreement, and any agreements contemplated hereby, and this
Agreement and each Assignment of Mortgage to the Purchaser and any agreements
contemplated hereby, constitutes a legal, valid and binding obligation of the
Seller, enforceable against it in accordance with its terms, and all requisite
corporate action has been taken by the Seller to make this Agreement and all
agreements contemplated hereby valid and binding upon the Seller in accordance
with their terms;
(c) None of the execution and delivery of this Agreement, the origination
of the Mortgage Loans by the Seller, 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
will conflict with any of the terms, conditions or provisions of the
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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 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 or
impair the ability of the Purchaser to realize on the Mortgage Loans or impair
the value of the Mortgage Loans;;
(d) Each Mortgage Note, each Mortgage, each Assignment of Mortgage and any
other documents required pursuant to this Agreement to be delivered to the
Purchaser or its designee, or its assignee for each Mortgage Loan, have been, on
or before the Closing Date, delivered to the Purchaser or its designee, or its
assignee;
(e) There is no litigation, suit, proceeding or investigation pending or
threatened, or any order or decree outstanding, with respect to the Seller
which, either in one instance or in the aggregate, is reasonably likely to have
a material adverse effect on the sale or servicing of the Mortgage Loans, the
execution, delivery, performance or enforceability of this Agreement, or which
is reasonably likely to have a material adverse effect on the financial
condition of the Seller.
(f) 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, or
the sale of the Mortgage Loans and delivery of the Mortgage Files to the
Purchaser or the consummation of the transactions contemplated by this
Agreement, except for consents, approvals, authorizations and orders which have
been obtained;
(g) The consummation of the transactions contemplated by this Agreement is
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 are not subject to bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(h) The origination, collection and servicing practices used by the
Seller, any Originator and Prior Servicers, 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
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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 in full compliance with 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;
(i) The Seller used no adverse selection procedures in selecting from
among the outstanding first lien residential mortgage loans owned by it which
were available for inclusion in the sale to Purchaser;
(j) 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;
(k) Seller is an approved seller/servicer of residential mortgage loans
for FNMA/FHLMC 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, if applicable, meets the minimum capital
requirements set forth by the OCC, and is in good standing to sell mortgage
loans to and service mortgage loans for FNMA/FHLMC and no event has occurred
which would make Seller unable to comply with eligibility requirements or which
would require notification to either FNMA or FHLMC;
(l) 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. 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;
(m) No statement, tape, diskette, form, report or other document prepared
by, or on behalf of, Seller pursuant to this Agreement or in connection with the
transactions contemplated hereby, contains or will contain any statement that is
or will be inaccurate or misleading in any material respect;
(n) 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
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the servicing and administration of the Mortgage Loans pursuant to this
Agreement; in the opinion of Seller, the consideration received by Seller upon
the sale of the Mortgage Loans to Purchaser under this Agreement constitutes
fair consideration for the Mortgage Loans under current market conditions.
(o) If requested by the Purchaser, the Seller has delivered to the
Purchaser financial statements as to its last two complete fiscal years. 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 generally accepted accounting principals
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 obligations under this Agreement; and
(p) 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.
Section 3.02 Representations and Warranties as to
Individual Mortgage Loans.
References in this Section to percentages of Mortgage Loans refer in each
case to the percentage of the aggregate principal balance of the Mortgage Loans
as of the Cut-off Date, based on the aggregate outstanding balances of the
Mortgage Loans as of the Cut-off Date, and giving effect to scheduled Monthly
Payments due on or prior to the Cut-off Date, whether or not received.
References to percentages of Mortgaged Properties refer, in each case, to the
percentages of expected aggregate principal balances of the related Mortgage
Loans (determined as described in the preceding sentence). The Seller hereby
represents and warrants to the Purchaser, as to each Mortgage Loan, as of the
Closing Date, unless another date is specified in the body of the representation
and warranty, as follows:
(a) The information set forth in the Mortgage Loan Schedule is complete,
true and correct in all material respects as of the Cut-Off Date;
(b) With respect to each Mortgage Loan, the Mortgage creates a valid,
subsisting and enforceable first lien or a first priority ownership interest in
an estate in fee simple in real property securing the related Mortgage Note,
except that with respect to real property located in jurisdictions in which the
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use of leasehold estates for residential properties is a widely-accepted
practice, the Mortgage may secure and create a first lien upon a leasehold
estate of the Mortgagor. No Mortgage is a Co-Op Loan.
(c) All payments due prior to the Cut-off Date for such Mortgage Loan have
been made and credited as of the Closing Date, the Mortgage Loan is not
delinquent in payment more than 30 days 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 Mortgagor, directly or indirectly, for the payment
of any amount required by the Mortgage Loan; and there has been no more than one
delinquency during the preceding twelve-month period, and such delinquency did
not last more than 30 days;
(d) There are no defaults by Seller in complying with the terms of the
Mortgage, and 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;
(e) 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, 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;
(f) 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; and the Mortgagor was not a debtor in any
state or federal bankruptcy or insolvency proceeding at the time the Mortgage
Loan was originated;
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(g) All buildings or other customarily insured improvements upon the
Mortgaged Property are insured by an insurer acceptable under the FNMA Guides,
against loss by fire, hazards of extended coverage and such other hazards as are
provided for in the FNMA Guides or by FHLMC, 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 mortgagee 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 FNMA and FHLMC
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 FNMA or
FHLMC guidelines. The Mortgage obligates the Mortgagor thereunder to maintain
all such insurance at the Mortgagor's cost and expense, and on 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. 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 or any Originator's or Prior
Servicer'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;
(h) Any and all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, RESPA, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the Mortgage Loan have
been complied with in all material respects; the Seller has maintained, and as
servicer shall continue to maintain, evidence of such compliance as required by
applicable law or regulation and shall make such evidence available for
inspection at Seller's office during normal business hours upon reasonable
advance notice;
(i) 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
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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;
(j) The Mortgage is a valid, subsisting, enforceable and perfected first
lien on the Mortgaged Property, including 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 lien of the Mortgage
subject only to (1) the lien of non-delinquent current real property taxes and
assessments not yet due and payable, (2) 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 in either the Originator's title insurance
policy (to the extent short form policies are not utilized) and 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 (3) other matters to which like properties are commonly subject
which do not, individually or in the aggregate, materially interfere with the
benefits of the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein, and the Seller has the full right to
sell and assign the same to the Purchaser.
(k) 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 subject to bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors and the Seller has taken all action necessary to transfer such rights
of enforceability to the Purchaser. All parties to the Mortgage Note and the
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the
Mortgage have been duly and properly executed by such parties. No fraud, error,
omission,
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misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of Seller or the Mortgagor, or, to the best of
Seller's knowledge, on the part of 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 satisfied. All
costs, fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid or are in the process of being paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;
(l) Immediately prior to the transfer and assignment to the Purchaser on
the Closing Date, the Seller is the sole owner of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note, and the Seller (or the Seller's
designee, Mortgage Electronic Registration System, Inc. ("MERS"), is the holder
of the Mortgage, and Seller or the Seller's designee MERS is the holder of
record of the Mortgage, except for the Assignments of Mortgage which have not
yet been sent for recording or recorded, and upon recordation (but prior to the
recordation of the Assignment of Mortgage to Purchaser) the Seller (or its
designee, MERS) will be the holder of record of each Mortgage and upon the sale
of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage
Files or any part thereof with respect thereto not delivered to the Purchaser or
the Purchaser's designee, in trust, only for the purpose of servicing and
supervising the servicing of each Mortgage Loan. Immediately prior to the
transfer and assignment to the Purchaser on the Closing Date, the Mortgage Loan,
including the Mortgage Note and the Mortgage, were not subject to an assignment
(other than the assignments by Seller of record title to, but not of any
beneficial interest in the Mortgage to Seller's designee, MERS, if applicable),
sale 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 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
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Mortgage Loan, except as provided in this Agreement, or as otherwise agreed to
by the Seller and the Purchaser;
(m) Each Mortgage Loan is covered by an ALTA lender's title insurance
policy or other generally acceptable form of policy or insurance acceptable to
FNMA or FHLMC, issued by a title insurer acceptable to FNMA or FHLMC and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained in (j)(1), (2) and (3)
above) the Seller, its successors and assigns, as to the first priority lien of
the Mortgage in the original principal amount of the Mortgage Loan. Where
required by 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 and/or the assignment to the Purchaser of the Seller's interest
therein does not require 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. 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;
(n) 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 any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;
(o) 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;
(p) 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 (m) above
and all improvements on the Mortgaged Property comply with all applicable zoning
and subdivision laws and ordinances;
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(q) The Mortgage Loan was originated by or for the Seller. The Mortgage
Loan complies with all the terms, conditions and requirements of the Seller's
103 LTV product underwriting standards (see Exhibit I) in effect at the time of
origination of such Mortgage Loan. Copies of the underwriting guidelines for the
mortgage products, which correspond to the mortgage loans to be purchased by the
Purchaser, have been provided to Purchaser. The Mortgage Notes and Mortgages are
on forms generally acceptable to the industry. The Mortgage Loan bears interest
at a fixed rate as set forth in the 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 for the acceleration of
the payment of the unpaid principal amount of the Mortgage Loan if the related
Mortgaged Property is sold or transferred without the prior consent of the
mortgagee thereunder. At the time the Mortgage Loan was originated, the
Originator was either a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act or a
savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a Federal or State
authority, or is appropriately licensed in the applicable jurisdiction for the
origination activities performed.
(r) The Mortgaged Property is not subject to any material damage by waste,
fire, earthquake, windstorm, flood or other casualty. At origination of the
Mortgage Loan there was, there has not been, and there currently is, no
proceeding pending, or to the actual knowledge of Seller threatened, for the
total or partial condemnation of the Mortgaged Property. To the best of Seller's
knowledge, there are no such proceedings scheduled to commence at a future date;
(s) 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, including, (1) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. 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;
(t) 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
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trust, except in connection with a trustee's sale or attempted sale after
default by the Mortgagor;
(u) The Mortgage File contains an appraisal of the related Mortgaged
Property signed prior to the final approval of the mortgage loan application by
a Qualified Appraiser, approved 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 the appraisal and appraiser both satisfy the requirements of
FNMA or FHLMC and Title XI of the Federal Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated. The appraisal is in a form
acceptable to FNMA or FHLMC and was made by a Qualified Appraiser;
(v) 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;
(w) 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
above and such collateral does not serve as security for any other obligation;
(x) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;
(y) The Mortgage Loan does not contain "graduated payment", "contingent
interest" or "shared appreciation" features; to the extent any Mortgage Loan
contains any buydown provision, such buydown funds have been maintained and
administered in accordance with, and such Mortgage Loan otherwise complies with,
FNMA/FHLMC requirements relating to buydown loans;
(z) The Mortgagor was not in bankruptcy on the date of origination of the
Mortgage Loan and, to the best of the Seller's knowledge, as of the Cut-Off
Date, the Mortgagor is not insolvent or in bankruptcy and the Seller has no
knowledge of any circumstances or condition with respect to the Mortgage, the
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Mortgaged Property, the Mortgagor or the Mortgagor's credit standing that could
reasonably be expected to cause investors to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
materially adversely affect the value or marketability of the Mortgage Loan;
(aa) The Mortgage Loans are fixed rate mortgage loans. The Mortgage Loans
have an original term to maturity of not more than 30 years, with interest
payable in arrears on the first day of each month. Each Mortgage Note requires
equal monthly payments which are sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate. No Mortgage Loan contains terms or provisions
which would result in negative amortization.
(bb) See Exhibit attached.
(cc) See Exhibit attached.
(dd) See Exhibit attached.
(ee) Intentionally omitted.
(ff) Intentionally omitted.
(gg) Intentionally omitted.
(hh) In the event the Mortgage Loan had an LTV greater than 80.0% at
origination, (i) the excess of the principal balance of the Mortgage Loan over
75.0% of the Appraised Value of the Mortgaged Property with respect to a
Refinanced Mortgage Loan, or (ii) the lesser of the Appraised Value or the
purchase price of the Mortgaged Property with respect to a purchase money
Mortgage Loan, was insured as to payment defaults by a Primary Mortgage
Insurance Policy issued by a Qualified Insurer; except that where either (i) or
(ii) was impermissible at origination under applicable law, such Mortgage Loan
was originated in compliance with applicable law. Unless the Primary Mortgage
Insurance Policy for a Mortgage Loan was either cancelled upon borrower request
or terminated, in either case in accordance with applicable law or the
requirements of FNMA, 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 Mortgage Loan requires
payment of such premiums, in whole or in part by the Purchaser. 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
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therewith. The Mortgage Interest Rate for the Mortgage Loan as set forth on the
Mortgage Loan Schedule is net of any such insurance premium.
(ii) 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;
(jj) As to Mortgage Loans that are not secured by an interest in a
leasehold estate, the Mortgaged Property is located in the state identified in
the Mortgage Loan Schedule and consists of a single parcel of real property with
a detached single family residence erected thereon, or an individual condominium
unit in a condominium project, or an individual unit in a planned unit
development, provided, however, that no residence or dwelling is a single parcel
of real property with a cooperative housing corporation erected thereon, or a
mobile home. As of the date of origination, no portion of the Mortgaged Property
is used for commercial purposes, and since the date or origination, to the best
of the Seller's knowledge, no portion of the Mortgaged Property is used for
commercial purposes;
(kk) Principal payments on the Mortgage Loan commenced no more than sixty
(60) days after the funds were disbursed in connection with the Mortgage Loan.
The Mortgage Note is payable on the first day of each month in equal monthly
installments of principal and interest with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from commencement of
amortization;
(ll) As of the date of origination of the Mortgage Loan, the Mortgage
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;
(mm) If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimis planned unit development), such
condominium, or planned unit development project meets Seller's eligibility
requirements as set forth in Seller's underwriting guidelines;
(nn) To the best of Seller's knowledge, 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; to the best of Seller's
knowledge, there is no violation of any environmental law, rule or regulation
with
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respect to the Mortgaged Property, and Seller has not received notice of any
such violation; and 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;
(oo) The Mortgagor has not notified the Seller, and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940;
(pp) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange
of a Mortgaged Property;
(qq) No action has been taken or failed to be taken by Seller, on or prior
to the 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;
(rr) Each Mortgage Loan has been serviced in all material respects in
compliance with Applicable Requirements;
(ss) 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;
(tt) With respect to any ground lease to which a Mortgaged Property may be
subject: (i) 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; (iii) all
rent, additional rent and other charges reserved therein have been fully paid to
the extent payable as of the 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
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observed or performed; (vii) the lessor under such ground lease has satisfied
any repair or construction obligations due as of the Closing Date pursuant to
the terms of such ground lease; and (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;
(uu) Each Mortgage Note, each Mortgage, each Assignment of Mortgage and
any other documents required pursuant to this Agreement to be delivered to the
Purchaser or its designee, or its assignee for each Mortgage Loan, have been, on
or before the Closing Date, delivered to the Purchaser or its designee, or its
assignee;
(vv) All taxes, governmental assessments, insurance premiums, water, sewer
and municipal charges, leasehold payments, ground rents relating to the Mortgage
Loans have been paid by Seller to the extent such items are required to be paid
by Seller pursuant to Applicable Requirements and as herein provided;
(ww) Each Mortgage Loan shall have a tax service contract and flood
insurance monitoring contract which shall have a term of the life of the
Mortgage Loan; and
(xx) The Pool Statistics for the Mortgage Loans are as reflected on
Exhibit __ attached hereto, which statistics are accurate as of the Cut-Off
Date.
(yy) No Mortgage Loan is subject to the Home Ownership and Equity
Protection Act of 1994 or any comparable state law; and
(zz) No proceeds of any Mortgage Loan were used to finance single-premium
credit insurance policies; and
(aaa) No Mortgage Loan will impose a prepayment penalty for a term in
excess of five (5) years.
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,
delivery of the Mortgage Loan Documents 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 of Mortgage or the
examination, or lack of examination, of any Mortgage File. Upon discovery by
either the Seller or the
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Purchaser of a breach of any of the foregoing representations and warranties
which materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest of the Purchaser in any Mortgage Loan or all of
the Mortgage Loans, the party discovering such breach shall give prompt written
notice to the other. The Seller shall have a period of sixty days from the
earlier of its discovery or its receipt of notice of any such breach within
which to correct or cure such breach. The Seller hereby covenants and agrees
that if any such breach is not corrected or cured within such sixty day period,
the Seller shall, at the Purchaser's option and not later than ninety days of
its discovery or its receipt of notice of such breach, repurchase such Mortgage
Loan at the Repurchase Price or, with the Purchaser's prior consent, which
consent shall not be unreasonably withheld, substitute a 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 sixty days of the earlier of either discovery by or notice to the
Seller of such breach, all 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, after deducting therefrom any amounts received in respect of
such repurchased Mortgage Loan and being held in the Custodial Account for
future distribution.
If the Seller is required to repurchase any Mortgage Loan pursuant to this
Section 3.03, the Seller may, with the Purchaser's prior consent, which consent
shall not be unreasonably withheld, within 120 days from the 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) be, in the reasonable determination of the Purchaser, of the same type,
quality and character (including location of the Mortgaged Property) as the
removed Mortgage Loan as if the breach had not occurred, (e) have a
Loan-to-Value Ratio at origination no greater than that of the removed Mortgage
Loan, (f) be, in the reasonable determination of the Purchaser, in
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material compliance with the representations and warranties contained in this
Agreement and described in Section 3.02 as of the date of substitution, and (g)
not have been more than 60 days delinquent since its Origination Date.
The Seller shall amend the 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. In the event of such a substitution, accrued interest on the
substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Purchaser and accrued interest for such month on the Mortgage Loan for which
the substitution is made and any Principal Prepayments made thereon during such
month shall be the property of the Seller. The principal 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 principal payment on the Mortgage Loan for which
the substitution is made due on such date shall be the property of the
Purchaser.
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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 8.01, 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 8.01, 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 remedies available in this Agreement as a result thereof. No
provision of this paragraph shall affect the rights of the Purchaser to
terminate this Agreement for cause, as set forth in Sections 10.01 and 11.01.
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 elect not
to require repurchase or permit substitution pursuant to Subsection 3.03 after
the applicable REMIC's "start up day" (as defined in Section 860G(a) (9) of the
Code), unless the Seller has obtained 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.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 4.01 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 Applicable
Requirements, and shall have full power and authority, acting alone, 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 Applicable Requirements and exercise
the same care that it customarily employs for its own account. Except as set
forth in this Agreement, the Seller shall service the Mortgage Loans in strict
compliance with the servicing provisions of the FNMA Guides, which include, but
are not limited to, provisions regarding the liquidation of Mortgage Loans, the
collection of Mortgage Loan payments, the payment of taxes, insurance and other
charges, the maintenance of hazard insurance 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 and disposition 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 FNMA Guides, the provisions of this Agreement
shall control and be binding upon the Purchaser and the Seller.
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 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 change the Mortgage Interest Rate, forgive the payment of principal or
interest, reduce or increase the outstanding principal balance (except for
actual payments of principal) or change the final maturity date on such Mortgage
Loan. In the event of any such modification which has been agreed to in writing
by the Purchaser
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and which 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) such month's principal and one
month's interest at the Mortgage Loan Remittance Rate on the unpaid principal
balance of such Mortgage Loan and (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, 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. 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. Any such agreement shall be approved by any applicable
holder of a Primary Mortgage Insurance Policy, if required.
In servicing and administering the Mortgage Loans, the Seller shall employ
Applicable Requirements, giving due consideration to the Purchaser's reliance on
the Seller. Unless a different time period is stated in this Agreement,
Purchaser shall be deemed to have given consent in connection with a particular
matter if Purchaser does not affirmatively grant or deny consent within 5
Business Days from the date Purchaser receives a second written request for
consent for such matter from Seller as servicer.
The Mortgage Loans may be subserviced by the Subservicer on behalf of the
Seller provided that the Subservicer is an entity that engages in the business
of originating, acquiring or servicing loans, and in either case shall be
authorized to transact business, and licensed to service mortgage loans, in the
state or states where the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, and in either case shall be a FHLMC or FNMA approved mortgage
servicer in good standing, and no event has occurred, including but not limited
to a change in insurance coverage, which would make it unable to comply with the
eligibility requirements for lenders imposed by FNMA or for seller/servicers
imposed by FHLMC, or which would require notification to FNMA or FHLMC. In
addition, each Subservicer will obtain and preserve its qualifications to do
business as a foreign corporation and its licenses to service mortgage loans, in
each jurisdiction in which such qualifications
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and/or licenses are or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform or
cause to be performed its duties under the related Subservicing Agreement. The
Seller may perform any of its servicing responsibilities hereunder or may cause
the Subservicer to perform any such servicing responsibilities on its behalf,
but the use by the Seller of the Subservicer shall not release the Seller from
any of its obligations hereunder and the Seller shall remain responsible
hereunder for all acts and omissions of the Subservicer as fully as if such acts
and omissions were those of the Seller. The Seller shall pay all fees and
expenses of the Subservicer from its own funds, and the Subservicer's fee shall
not exceed the Servicing Fee. Seller shall notify Purchaser promptly in writing
upon the appointment of any Subservicer.
At the cost and expense of the Seller, without any right of reimbursement
from the Custodial Account, the Seller shall be entitled to terminate the rights
and responsibilities of the Subservicer and arrange for any servicing
responsibilities to be performed by a successor subservicer meeting the
requirements in the preceding paragraph, provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Seller, at the
Seller's option, from electing to service the related Mortgage Loans itself. In
the event that the Seller's responsibilities and duties under this Agreement are
terminated pursuant to Section 4.13, 8.04, 9.01, 10.01 or 10.02 and if requested
to do so by the Purchaser, the Seller shall at its own cost and expense
terminate the rights and responsibilities of the Subservicer effective as of the
date of termination of the Seller. The Seller shall pay all fees, expenses or
penalties necessary in order to terminate the rights and responsibilities of the
Subservicer from the Seller's own funds without reimbursement from the
Purchaser.
Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Seller and the Subservicer or any
reference herein to actions taken through the Subservicer or otherwise, the
Seller shall not be relieved of its obligations to the Purchaser and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Seller shall be
entitled to enter into an agreement with the Subservicer for indemnification of
the Seller by the Subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification. The Seller will indemnify and
hold Purchaser harmless from any loss, liability or expense arising out of its
use of a Subservicer to perform any of its servicing duties, responsibilities
and obligations hereunder.
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Any Subservicing Agreement and any other transactions or services relating
to the Mortgage Loans involving the Subservicer shall be deemed to be between
the Subservicer and Seller alone, and the Purchaser shall have no obligations,
duties or liabilities with respect to the Subservicer including no obligation,
duty or liability of Purchaser to pay the Subservicer's fees and expenses. For
purposes of distributions and advances by the Seller pursuant to this Agreement,
the Seller shall be deemed to have received a payment on a Mortgage Loan when
the Subservicer has received such payment.
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, Applicable Requirements, 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 its best efforts, consistent with the procedures that
the Seller would use in servicing loans for its own account, consistent with
Applicable Requirements, any Primary Mortgage Insurance Policies 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 within one hundred twenty (120) days
of default for Mortgaged Properties for which no satisfactory arrangements can
be made for collection of delinquent payments. The Seller shall use commercially
reasonable 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 Mortgaged
Property shall
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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. Seller shall obtain prior approval of
Purchaser as to restoration expenses in excess of ten thousand dollars
($10,000). The Seller shall notify the Purchaser in writing of the commencement
of foreclosure proceedings and prior to the acceptance or rejection of any offer
of reinstatement. 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, with respect to any Mortgage Loan as to which the Purchaser has received
actual notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the related Mortgaged Property, the Purchaser may
instruct Seller not to take title or possession of the Mortgaged Property or any
other action reasonable under the circumstances. In the event that Seller as
servicer receives notice that the Mortgage Property is contaminated by any toxic
or hazardous substance, Seller shall so notify Purchaser.
In the event that a Mortgage Loan becomes part of a REMIC, and becomes REO
Property, such property shall be disposed of by Seller, with the consent of
Purchaser as required pursuant to this Agreement, within two years after
becoming an REO Property, unless Seller provides to the trustee under such REMIC
an opinion of counsel to the effect that the holding of such REO Property
subsequent to two 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. 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 860F(a)(2)(E) 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 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, Seller shall perform the tax withholding and reporting
related to Sections 1445 and 6050J of the Code, if required by the REMIC.
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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.
The Custodial Account shall be an Eligible Account. Funds deposited in the
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 Closing Date, and upon the request of any
subsequent purchaser.
The Seller shall deposit in the Custodial Account on a daily basis, 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;
(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 Applicable
Requirements;
(vi) all Condemnation Proceeds affecting any Mortgaged Property which are
not released to the Mortgagor in accordance with Applicable Requirements;
(vii)any Monthly Advances;
(viii)all proceeds of any Mortgage Loan repurchased in accordance with
Section 3.03 and Section 3.04;
(ix) any amounts required to be deposited by the Seller pursuant to
Section 4.10 in connection with the deductible clause in any blanket hazard
insurance policy, such deposit shall be
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made from the Seller's own funds, without reimbursement therefor;
(x) any amounts required to be deposited in the Custodial Account pursuant
to Section 4.01, 4.13 or 6.02;
(xi) any Prepayment Interest Shortfall Amount;
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 and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Seller in the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Seller and the Seller shall be entitled to retain and withdraw such interest
from the Custodial Account pursuant to Section 4.05 (iv).
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 or Section 3.04, 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 and Insurance Proceeds
in accordance with the relevant provisions of the FNMA Guides or as otherwise
set forth in this Agreement, it being understood that for those Mortgage Loans
in foreclosure, the Purchaser shall reimburse the Seller for Servicing Advances
and Servicing Fees through the completion of foreclosure and
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disposition of the REO Property; such reimbursement shall be monthly after
completion of foreclosure or deed-in-lieu proceedings;
(iv) to pay to itself as part of its servicing compensation: (a) any
interest earned on funds in the Custodial Account (all such interest to be
withdrawn monthly not later than each Remittance Date), and (b) 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 or Section 3.04 all amounts received
thereon and not distributed as of the date on which the related repurchase price
is determined,
(vi) to transfer funds to another Eligible Account in accordance with
Section 4.09 hereof;
(vii) to remove funds inadvertently placed in the Custodial Account by the
Seller; and
(vi) to clear and terminate the Custodial Account upon the termination of
this Agreement.
Section 4.06 Establishment of Escrow Accounts;
Deposits in Escrow 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. The 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 Closing Date,
and upon request to any subsequent purchaser.
The Seller shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
(i) .all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any such items as required under the
terms of this Agreement;
(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
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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 the 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 the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by 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;
(ii) to reimburse Seller for any Servicing Advance made by Seller with
respect to a related Mortgage Loan but only from amounts received on 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. As part of its servicing duties, the Seller shall pay to the
Mortgagors interest on funds in the Escrow Account, to the extent required by
law, and to the extent that interest earned on funds in the Escrow Account is
insufficient, shall pay such interest from its own funds, without any
reimbursement therefor; and
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(viii) to the extent permitted by this Agreement, to pay to the
Mortgagors or other parties Insurance Proceeds deposited in accordance with
Section 4.06.
Section 4.08 Payment of Taxes, Insurance and Other
Charges; Maintenance of Primary Mortgage
Insurance Policies; 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 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 such bills 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.
The Seller will maintain in full force and effect Primary Mortgage
Insurance Policies issued by a Qualified Insurer with respect to each 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 80% or less in the case of a Mortgage Loan having a Loan-to-Value Ratio at
origination in excess of 80%; provided, however, that for purposes hereof, the
Loan-to-Value Ratio shall be determined in accordance with applicable law if
such determination is different from the definition of Loan-to-Value Ratio
provided in this Agreement. The Seller will not cancel or refuse to renew any
Primary Mortgage Insurance Policy in effect on the Closing Date that is required
to be kept in force under this Agreement unless a replacement Primary Mortgage
Insurance Policy for such canceled or nonrenewed 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
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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 Private 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 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 the Custodial Account or the Escrow Account to a
different Eligible Account from time to time. Such transfer shall be made only
upon obtaining the prior written consent of the Purchaser, which consent will
not be unreasonably withheld.
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 FNMA and FHLMC 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 or (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 the current guidelines of the Federal Insurance
Administration in effect with an insurance carrier acceptable to FNMA and/or
FHLMC, 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
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Mortgage Loan or (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 FNMA 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 said 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. 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 Applicable Requirements, 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 the Mortgagor or maintained on property acquired in respect of the
Mortgage Loan, other than pursuant to this Agreement, the FNMA 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 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 shall obtain and maintain a blanket policy
issued by an insurer acceptable to FNMA and/or FHLMC 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
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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 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 best efforts to obtain a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without thirty days' prior written notice to
the Purchaser.
Section 4.12 Fidelity Bond, 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 the
Mortgage Banker's Blanket Bond and shall protect and insure the Seller against
losses, including those arising out of 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 amounts deemed acceptable to FNMA or FHLMC. 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 days' prior written notice to the Purchaser. The Seller shall
notify the Purchaser within
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five business days of receipt of notice that such Fidelity Bond or insurance
policy will be, or has been, materially modified or terminated. The Purchaser
(or any party having the status of Purchaser hereunder) and any subsidiary
thereof and their successors or assigns as their interests may appear must be
named as loss payees on the Fidelity Bond and as additional insured on the
errors and omissions policy. Upon request by Purchaser, Seller shall provide
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 or by deed in lieu of foreclosure, 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 from an attorney duly licensed to practice law in the state where the REO
Property is located (the "Owners"). 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.
The Seller shall notify the Purchaser in accordance with the FNMA Guides
of each acquisition of REO Property upon such acquisition, together with a copy
of the drive by appraisal or brokers price opinion of the Mortgaged Property
obtained in connection with such acquisition, and thereafter assume the
responsibility for marketing such REO property in accordance with Applicable
Requirements. 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 fee for such administrative services shall be $1,500 to be paid upon
liquidation of the REO Property. No Servicing Fee shall be assessed on any REO
Property from and after the date on which it becomes an REO Property.
The Seller shall, either itself or through an agent selected by the
Seller, and in accordance with the FNMA 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
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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 monthly thereafter or more frequently as required by the circumstances.
The Seller shall make or cause the Seller to be made a written report of each
such inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Seller to the Purchaser.
The Seller shall use commercially reasonable best efforts to dispose of
the REO Property as soon as possible and shall sell such REO Property in any
event within two (2) 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 one (1) year 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. No REO Property shall be marketed for less than the Appraised
Value, without the prior consent of Purchaser. No REO Property shall be sold for
less than ninety five percent (95%) of its appraised value, without the prior
consent of Purchaser. If as of the date title to any REO Property was acquired
by or on behalf of the Purchaser 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. All requests for reimbursement of Servicing Advances shall
be in accordance with the FNMA Guides. 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. Seller shall
provide monthly reports to Purchaser in reference to the status of the marketing
of the REO Properties.
Notwithstanding anything to the contrary contained herein, the Purchaser
may, at the Purchaser's sole option, terminate the Seller as servicer of any
such REO Property without payment of any termination fee with respect thereto,
provided that the Seller shall on the date said termination takes effect be
reimbursed by withdrawal from the Custodial Account for any unreimbursed
advances of the Seller's funds made pursuant to Section 5.03 and any
unreimbursed Servicing Advances in each case relating to the Mortgage Loan
underlying such REO Property notwithstanding anything to the contrary set forth
in Section 4.05. In the event of any such termination, the provisions of Section
11.01 hereof shall apply to said termination and the transfer of servicing
responsibilities with respect to such REO Property to the Purchaser or its
designee.
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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.
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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) any Prepayment Interest Shortfall Amount, provided
that the Servicer's obligation as to payment of such amount shall be limited to
the Servicing Fee earned during the month of the distribution less (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. It is
understood that, by operation of Section 4.04, the remittance on the first
Remittance Date is to include principal collected after the Cut-off Date through
the preceding Determination Date plus interest, at the Mortgage Loan Remittance
Rate collected through such Determination Date exclusive of any portion thereof
allocable to the period prior to the Cut-off Date, with the adjustments
specified in clauses (ii), (iii) and (iv) above.
With respect to any remittance received by the Purchaser after 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 three percentage points, but
in no event greater than the maximum amount permitted by applicable law. Such
interest shall be deposited in the Custodial Account by the Seller on the date
such late payment is made and shall cover the period commencing with the day
following the 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 out of Seller's funds 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.
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The wiring instructions for remittances for the Purchaser are as follows:
The names, addresses and phone numbers of four employees of Purchaser, two of
whom Servicer could contact to confirm receipt of the first remittance are:
Section 5.02 Statements to the Purchaser
The Seller shall furnish to Purchaser an individual loan accounting
report, as of the close of business on 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 Business Day of the corresponding Remittance
Date on a disk or tape or other computer-readable format in such format as may
be mutually agreed upon by both Purchaser and Seller, and no later than the
seventh Business Day of the month of the corresponding Remittance Date in hard
copy, which report, in hard copy, and 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 distribution period;
(iv) the aggregate Stated Principal Balance of the Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the Seller as servicer
during the prior distribution period pursuant to Section 4.05; and
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(vi) The number and aggregate outstanding principal balances of Mortgage
Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 days or more;
(b) as to which foreclosure has commenced; and (c) as to which REO Property has
been acquired.
The Seller shall also provide a trial balance, sorted in Purchaser's
assigned loan number order, 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 Purchaser pursuant to any applicable law with respect to the Mortgage Loans
and the transactions contemplated hereby. In addition, the Seller shall provide
Purchaser with such information concerning the Mortgage Loans as is necessary
for Purchaser to prepare its federal income tax return as Purchaser may
reasonably request from time to time.
In addition, not more than 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 payments not previously advanced by the Seller, whether or not
deferred pursuant to Section 4.01, of principal (due after the Cut-off Date) and
interest not allocable to the period prior to the Cut-off Date, at the Mortgage
Loan Remittance Rate, which were due on a Mortgage Loan 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 last Monthly Payment due prior to the payment in
full of the Mortgage Loan, or through the Remittance Date prior to the date on
which the Mortgaged Property is liquidated (including Insurance Proceeds, REO
Disposition Proceeds or Condemnation Proceeds) with respect to the Mortgage
Loan, unless the Seller deems such advance to be nonrecoverable. 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 Mortgage
File and has made the reasonable determination that any additional advances are
nonrecoverable.
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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 Purchaser may reasonably require.
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ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Assumption Agreements.
The Seller will, 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, with the approval of the
Purchaser (such approval not to be unreasonably withheld), 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. Where an assumption is allowed
pursuant to this Section 6.01, the Seller, with the prior consent of the
Purchaser and 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.
Purchaser shall be deemed to have consented to any assumption for which
Purchaser was given notification and requested to consent, but for which neither
a consent nor an objection was given by Purchaser within two Business Days of
such notification.
In connection with any such assumption or substitution of liability, the
Seller shall follow the underwriting practices and procedures of the FNMA
Guides. With respect to an assumption or substitution of liability, the Mortgage
Interest Rate borne by the related Mortgage Note, the amount of the Monthly
Payment and the maturity date 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
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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.
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 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 of a Servicing Officer, 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, and shall
request delivery to it of the portion of the Mortgage File held by the
Purchaser. The Purchaser shall no later than five 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 and execute the
requisite satisfaction or release. No later than three 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. No expense incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account.
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
instruments, the Seller, upon written demand, shall remit within two Business
Days
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to the Purchaser the then outstanding principal balance of the related Mortgage
Loan by deposit thereof in the Custodial Account. The Seller shall maintain the
Fidelity Bond and errors and omissions insurance insuring the Seller against any
loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
From time to time and as appropriate for the servicing or foreclosure of
the Mortgage Loan, including for the purpose of collection under any Primary
Mortgage Insurance Policy, the Purchaser or its designee shall, upon request of
the Seller and delivery to the Purchaser or its designee of a servicing receipt
signed by a Servicing Officer, release the portion of the Mortgage File held by
the Purchaser or its designee to the Seller. Such servicing receipt shall
obligate the Seller to return the related Mortgage Loan Documents to the
Purchaser or its designee 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 or such document 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 or such document
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.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Seller shall be entitled
to withdraw from the Custodial Account (to the extent of interest payments
collected on the Mortgage Loans) or to retain from interest payments on the
Mortgage Loans the amounts provided for as the Seller's Servicing Fee, subject
to payment of compensating interest on Principal Prepayments as capped by the
Servicing Fee pursuant to Section 5.01 (iii). Additional servicing compensation
in the form of income and other benefits derived from escrow and custodial
accounts assumption fees, as provided in Section 6.01, late payment charges and
other similar ancillary fees or otherwise 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.
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Section 6.04 Annual Statement as to Compliance.
The Seller will deliver to the Purchaser as of April 30 of each year,
beginning with 2003, 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. 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.
Within one hundred twenty (120) days of Seller's fiscal year end (December
31 of each year beginning December 31, 2002) 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 mortgage loans of the same type as
the Mortgage Loans pursuant to servicing agreements substantially similar to
this Agreement, which agreements may include this Agreement, and that, on the
basis of such an examination, conducted substantially accordance with in 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 the
agreements examined pursuant to this Section 6.05, 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. Copies of such statement
shall be provided by the Seller to the Purchaser. In addition, on an annual
basis, upon Purchaser's request, Seller shall provide Purchaser with copies of
its audited financial statements upon execution by Purchaser of an agreement to
keep confidential the contents of such financial statements.
Section 6.06 Purchaser's Right to Examine Seller Records.
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.
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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 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, FDIC, OTS, or any other similar
regulations.
Section 6.07 Annual Officer's Certificate.
On or before April 30 of each year, beginning with April 30, 2003, the
Servicer, at its own expense, will deliver to the Purchaser or its designee a
Servicing Officer's certificate stating, as to each signer thereof, that (i) a
review of the activities of the Servicer during such preceding fiscal 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 Servicer has fulfilled all its obligations under this Agreement for
such year, or, if there has been a default in the fulfillment of all such
obligations, specifying each such default known to such officer and the nature
and status thereof including the steps being taken by the Servicer to remedy
such default.
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ARTICLE VII
Section 7.01 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, whether or not provided for herein, as shall be necessary,
reasonable or appropriate in respect to the Purchaser, or otherwise 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 all such reports or information to be as 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.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective purchaser audited financial statements of the Seller
for the most recently completed two (2) fiscal years for which such statements
are available, as well as a Consolidated Statement of Condition at the end of
the last two (2) fiscal years covered by any Consolidated Statement of
Operations. If it has not already done so, upon request, the Seller shall
furnish promptly to the Purchaser or a prospective purchaser copies of the
statements specified above; provided, however, that prior to furnishing such
statements or information to any prospective purchaser, the Seller may require
such prospective purchaser to execute a confidentiality agreement in a form
satisfactory to the Seller.
The Seller 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.
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ARTICLE VIII
THE SELLER
Section 8.01 Indemnification; Third Party Claims.
The Seller agrees to indemnify the Purchaser and hold it harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Purchaser may sustain in any way related to the failure of the Seller to observe
and perform its duties, obligations, covenants, and agreements to service the
Mortgage Loans in strict compliance with the terms of this Agreement. The Seller
agrees to indemnify the Purchaser and hold it harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Purchaser may
sustain in any way related to the breach of a representation or warranty set
forth in Sections 3.01 or 3.02 of this Agreement. The Seller shall immediately
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the consent of the Purchaser) 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 Mortgages in strict compliance with the terms of 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 Seller. The
provisions of this Section 8.01 shall survive termination of this Agreement.
Section 8.02 Merger or Consolidation of the Seller.
The Seller will 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 will 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.
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Any Person into which the Seller may be merged or consolidated, 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
whether or not related to loan servicing, 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 (i) having a GAAP net worth of not less than $25,000,000, (ii)
the deposits of which are insured by the FDIC, SAIF and/or BIF, or which is a
HUD-approved mortgagee whose primary business is in origination and servicing of
first lien mortgage loans, and (iii) who is a FNMA or FHLMC approved
seller/service in good standing.
Section 8.03 Limitation on Liability of the Seller and Others.
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 strict 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; provided, however, that the
Seller may, with the consent of the Purchaser, undertake any such action which
it may deem necessary or desirable in respect to this Agreement and the rights
and duties of the parties hereto. In such event, the reasonable legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities for which the Purchaser will be liable, and the
Seller shall be entitled to be reimbursed therefor from the Purchaser upon
written demand.
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Section 8.04 Seller Not to Assign or Resign.
The Seller shall not assign this Agreement or 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 8.05 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, the Seller shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Purchaser.
Without in any way limiting the generality of this Section 8.05, in the
event that the Seller either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof without (i) satisfying the requirements set forth herein or (ii) the
prior written consent of the Purchaser, then the Purchaser shall have the right
to terminate this Agreement as set forth in Section 10.02, without any payment
of any penalty or damages and without any liability whatsoever to the Seller
(other than with respect to accrued but unpaid Servicing Advances remaining
unpaid) or any third party.
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ARTICLE IX
DEFAULT
Section 9.01 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 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 the date upon which such non-payment is discovered by
Seller; 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 which continues unremedied for a period of
thirty days (except that such number of days shall be fifteen in the case of a
failure to pay any premium for any insurance policy required to be maintained
under this Agreement) 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 days; or
(iv) the Seller shall consent to the appointment of a conservator or
receiver or liquidation 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) Seller ceases to be approved by both FNMA and FHLMC as a mortgage
loan seller and servicer for more than thirty days; or
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(vii) the Seller attempts to assign its right to servicing compensation
hereunder or the Seller attempts, without the consent of the Purchaser, to sell
or otherwise dispose of all or substantially all of its property or assets or to
assign this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof; or
(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; or
(ix) the Seller fails to meet the eligibility criteria set forth in the
last sentence of Section 8.02.
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 8.01
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, 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 11.01. 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 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 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.
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Section 9.02 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.
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ARTICLE X
TERMINATION
Section 10.01 Termination.
The respective obligations and responsibilities of the Seller shall
terminate upon: (i) the later of the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan or the disposition of
all REO Property and the remittance of all funds due hereunder; or (ii) by
mutual consent of the Seller and the Purchaser in writing; or (iii) termination
with or without cause under the terms of this Agreement.
Section 10.02 Termination Without Cause.
The Purchaser may, at its sole option, terminate any rights the Seller may
have hereunder, without cause, upon written notice. Any such notice of
termination shall be in writing and delivered to the Seller as provided in
Section 11.05 of this Agreement. In the event of such termination, the Purchaser
agrees to pay as liquidated damages, a sum equal to a percentage of the
aggregate unpaid principal balance of the Mortgage Loans, as follows: two and
one half percent (2.5%) for any Mortgage Loans having Mortgaged Property in the
states of New York, New Jersey or Connecticut; two percent (2.0%) for all
remaining Mortgage Loans. Notwithstanding the foregoing, there shall be no fee
or liquidated damages for termination pursuant to this Section with respect to
any Mortgage Loans ninety (90) days or more delinquent.
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ARTICLE XI
RECONSTITUTION OF MORTGAGE LOANS
Section 11.01 Reconstitution of Mortgage Loans.
(a) The Seller acknowledges and the Purchaser agrees that with respect to
some or all of the Mortgage Loans, the Purchaser may effect either:
(i) one or more sales of the Mortgage Loans as whole loan transfers
(each, a "Whole Loan Transfer"); and/or
(ii) one or more sales of the Mortgage Loans as pass-through
transfers (each, a "Pass-Through Transfer"); and/or
(iii) one or more sales of the Mortgage Loans as agency transfers
(each, an "Agency Transfer").
(b) With respect to each Whole Loan Transfer, Agency Transfer or
Pass-Through Transfer, as the case may be, the Seller agrees:
(i) to cooperate fully with the Purchaser and any prospective
purchaser with respect to all reasonable requests and reasonable due diligence
procedures including participating in meetings with rating agencies, bond
insurers and such other parties as the Purchaser shall designate and
participating in meetings with prospective purchasers of the Mortgage Loans or
interests therein and providing information reasonably requested by such
purchasers;
(ii) to execute all agreements required to be executed by the Seller
in connection with such Whole Loan Transfer, Agency Transfer or Pass-Through
Transfer provided that such agreements will not contain any greater obligations
on the part of Seller as are contained in this Agreement and Seller is given an
opportunity to review and reasonably negotiate in good faith the content of such
documents;
(iii) to deliver to the Purchaser and to any Person designated by
the Purchaser for inclusion in any prospectus or other offering material such
publicly available information regarding the Seller, its financial condition and
its mortgage loan delinquency, foreclosure experience and any additional
information reasonably requested by the Purchaser, and to indemnify the
Purchaser and its affiliates for material misstatements contained in such
information, and to deliver such statements and audit letters of reputable,
certified public accountants pertaining to information provided by the Seller as
shall be reasonably requested by the Purchaser;
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(iv) to deliver to the Purchaser, and to any Person designated by
the Purchaser, such in-house opinions of counsel in a form reasonably acceptable
to the Purchaser as are customarily delivered by servicers and reasonably
determined by the Purchaser to be necessary in connection with Whole Loan
Transfers, Agency Transfers or Pass-Through Transfers.
(v) the third party costs incurred by Seller in connection with
compliance with this Section 11.01, including but not limited to the costs of
opinions of outside special counsel that may be required for a Whole Loan
Transfer, Agency Transfer or Pass-Through Transfer, shall be the responsibility
of the Purchaser.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to the Seller.
Prior to termination of Seller's responsibilities and duties under this
Agreement pursuant to Sections 4.13, 8.04, 9.01, 10.01 or 10.02, 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 8.02 hereof and which shall succeed to
all rights and assume all of the responsibilities, duties and liabilities of the
Seller under this Agreement prior to the termination of Seller's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Purchaser may make such arrangements
for the compensation of such successor out of payments on Mortgage Loans as 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 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, 3.02 and 3.03 and the remedies available to the Purchaser
thereunder and under Section 8.01, it being understood and agreed that the
provisions of such Sections 3.01, 3.02, 3.03 and 8.01 shall be applicable to the
Seller notwithstanding any such resignation or termination of the Seller, or the
termination of this Agreement.
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 4.13, 8.04, 9.01, 10.01, or 10.02 shall not affect any claims that the
Purchaser may have against the Seller arising prior to any such termination or
resignation.
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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. The successor shall make arrangements
as it may deem appropriate to reimburse the Seller for unrecovered Servicing
Advances which the successor retains hereunder and which would otherwise have
been recovered by the Seller pursuant to this Agreement but for the appointment
of the successor servicer.
Upon a successor's acceptance of appointment as such, the Seller shall
notify by mail the Purchaser of such appointment.
Section 12.02 Amendment.
This Agreement may be amended from time to time by the Seller and the
Purchaser by written agreement signed by the Seller and the Purchaser.
Section 12.03 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
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 accompanied by an
opinion of counsel to the effect that such recordation materially and
beneficially affects the interest of the Purchaser or is necessary for the
administration or servicing of the Mortgage Loans.
Section 12.04 Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York except to the extent preempted by federal law,
without giving effect to choice of law principles. The obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
Section 12.05 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
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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:
Chase Manhattan Mortgage Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
With copy to: General Counsel
(ii) if to the Purchaser:
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 12.06 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 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.
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Section 12.07 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 12.08 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 generally accepted accounting principles;
(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 12.09 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, 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
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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 12.10 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 party agrees to keep all
non-public information regarding the other party strictly confidential, and to
use all such information solely in order to effectuate the purpose of the
Agreement, provided that each party may provide confidential information to its
employees, agents and affiliates who have a need to know such information in
order to effectuate the transaction, provided further that such information is
identified as confidential non-public information. In addition, confidential
information may be provided to a regulatory authority with supervisory power
over Purchaser, provided such information is identified as confidential
non-public information.
Section 12.11 Recordation of Assignments of Mortgage.
Each of the Assignments of Mortgage shall be recorded in the appropriate
public offices for real property records in the counties or other comparable
jurisdictions in which the Mortgaged Property is situated, and in any other
applicable appropriate public recording office, such recordation to be effected
at the Seller's expense.
Section 12.12 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Seller
hereof, to assign, in whole or in part, its interest under this Agreement with
respect to some or all of the Mortgage Loans, and designate any person to
exercise any rights of the Purchaser hereunder, by executing an Assignment and
Assumption 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. In no event shall Purchaser sell
a partial interest in any Mortgage Loan without the written consent of Seller,
which consent shall not be unreasonably denied. All references to the Purchaser
in this Agreement shall be deemed to include its assignee or designee. However,
in no event shall there be more than three (3) Persons under the Reconstitution
Agreements (i.e., Pass-Through Transfer, Agency Transfer and Whole Loan
Transfer) at any given time having the status of "Purchaser" under such
agreements.
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Section 12.13 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 12.14 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 8.04, this Agreement
shall inure to the benefit of and be binding upon the Seller and the Purchaser
and their respective successors and assigns.
Section 12.15 Entire Agreement.
The Seller acknowledges that no representations, agreements or promises
were made to the Seller by the Purchaser or any of its employees other than
those representations, agreements or promises specifically contained herein.
This Agreement sets forth the entire understanding between the parties hereto
and shall be binding upon all successors of both parties. In the event of any
inconsistency between the Purchase Price and Terms Letter and this Agreement,
this Agreement shall control.
Section 12.16 No Solicitation.
From and after the Closing Date, 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, to
personally, by telephone or mail, 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. Notwithstanding the foregoing, it is
understood and agreed that promotions undertaken by the Seller or any affiliate
of the Seller which are directed to the general public at large, or segments
thereof, provided that no segment shall consist primarily of the Mortgage Loans,
including, without limitation, mass mailing based on commercially acquired
mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section 12.16. This Section 12.16 shall not
be deemed to preclude the Seller or any of its affiliates from soliciting any
Mortgagor for any other financial products or services. In addition, Seller
shall use its commercially reasonable best efforts to prevent the sale of the
name of any Mortgagor to any Person who is not an affiliate of Seller and who
Seller knows will solicit the Mortgagor for refinance.
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Section 12.17 Closing.
The closing for the purchase and sale of the Mortgage Loans shall take
place on the 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 Closing Date
shall be subject to each of the following conditions:
(a) at least two (2) Business Days prior to the Closing Date, the Seller
shall deliver to the Purchaser a magnetic diskette, or transmit by modem, 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 materially true and correct as of the Closing Date and no
event shall have occurred which, with notice or the passage of time, would
constitute a material default under this Agreement;
(c) the Purchaser shall have received, or the Purchaser's attorneys shall
have received in escrow, all closing documents more particularly described in
the Purchase Price and Terms Letter, 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 delivered and released to the Purchaser (or its
designee) on or prior to the Closing Date all documents required pursuant to the
terms of this Agreement; and
(e) all other terms and conditions of this Agreement and the Purchase
Price and Terms Letter shall have been materially complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the Seller
on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 2.02 of this Agreement, by wire transfer of immediately available funds
to the account designated by the Seller.
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Section 12.18 Costs. The Purchaser shall pay any commissions due its
salesmen and the legal fees and expenses of its attorneys. The Seller shall pay
for the physical delivery of the Mortgage Loan Documents to a location
designated by the Purchaser, and all the costs and expenses incurred in
connection with the transfer and delivery of the Mortgage Loans, including fees
for title policy endorsements and continuations, if required.
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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.
AIG CENTRE CAPITAL GROUP, INC.
Purchaser
By:________________________
Name:
Title:
Taxpayer ID #: ______________
CHASE MANHATTAN MORTGAGE CORPORATION
Seller and Servicer
By: _______________________
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President
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EXHIBIT A
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 Mortgage Loan 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]". In the
event that the original Mortgage Note is lost, a lost note affidavit may be
provided.
2. 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 Seller, 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.
3. The original or certified to be true copy, certified by the Seller, of
the Primary Mortgage Insurance Policy, if required.
4. The original Assignment, from the Seller to _______________________, or
its designee, MERS, or in accordance with Purchaser's instructions, which
assignment shall, but for any blanks requested by Purchaser, be in form and
substance acceptable for recording, or a copy certified by Seller as a true and
correct copy of the original Assignment which has been sent for recordation. If
the Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment must be by "[Seller] formerly known as
[previous name]".
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5. 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.
6. 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 Seller of the original Assignment together
with a certificate of the Seller 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.
7. 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 Seller, of such
original document together with a certificate of Seller certifying that 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.
8. 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.
9. Intentionally Deleted
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10. Mortgage Loan closing statement (Form HUD-1) and any other
truth-in-lending or real estate settlement procedure forms required by law.
11. Residential loan application.
12. Uniform underwriter and transmittal summary (FNMA Form 1008) or
reasonable equivalent.
13. Credit report on the mortgagor.
14. Business credit report, if applicable.
15. Residential appraisal report and attachments thereto.
16. The original of any guarantee executed in connection with the Mortgage
Note.
17. Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program, all in accordance with
Seller's underwriting guidelines.
18. Verification of acceptable evidence of source and amount of down
payment, in accordance with Seller's underwriting guidelines.
19. Photograph of the Mortgaged Property (may be part of appraisal).
20. Survey of the Mortgaged Property, if any.
21. Sales contract, if applicable.
22. If available, termite report, structural engineer's report, water
portability and septic certification.
23. Any original security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
24. The original of any guarantee executed in connection with the Mortgage
Note.
25. Original hazard insurance policy and, if required by law, flood
insurance policy.
Notwithstanding anything to the contrary herein, Seller may provide one
certificate for all of the Mortgage Loans indicating that the documents were
delivered for recording.
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EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
______________, 2002
To: JPMorgan Chase Bank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(the "Depository")
As "Seller" under the Mortgage Loan Purchase, Warranties and Servicing
Agreement, dated as of August 1, 2002, Whole Loan Series 2002 WL-K (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
"Chase Manhattan Mortgage Corporation, in trust for the Purchaser, Owner of
Whole Loan Series 2002 WL-K" 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.
CHASE MANHATTAN MORTGAGE CORPORATION
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.
JPMORGAN CHASE BANK
By:____________________________
Name:__________________________
Title:_________________________
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EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
_______________, 2002
To: JPMorgan Chase Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(the "Depository")
As "Seller" under the Mortgage Loan Purchase, Warranties and Servicing
Agreement, dated as of August 1, 2002, Whole Loan Series 2002 WL-K (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
"Chase Manhattan Mortgage Corporation, in trust for the Purchaser, Owner of
Whole Loan Series 2002 WL-K, 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.
CHASE MANHATTAN MORTGAGE CORPORATION
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.
JPMORGAN CHASE BANK
By:____________________________
Name:__________________________
Title:_________________________
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EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated
___________________,between__________________,a
_____________________corporation("Assignor"),and_____________________, a
__________________ corporation ("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
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) that certain Purchase, Warranties and Servicing Agreement, Whole
Loan Series 2002 WL-K (the "Purchase, Warranties and Servicing Agreement"),
dated as of August 1, 2002, by and between AIG Centre Capital Group, Inc.,
Purchaser and Chase Manhattan Mortgage Corporation, Seller and Servicer, with
respect to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the Assignee
hereunder any and all right, title and interest in, to and under and all
obligations of the Assignor with respect to any mortgage loans subject to the
Purchase, Warranties and Servicing Agreement which are not the Mortgage Loans
set forth on Exhibit A attached hereto and are not the subject of this
Assignment and Assumption Agreement.
2. The assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice or, and has no knowledge of,
any offsets, counterclaims or other defenses available to the Seller or the
Servicer with respect to the Purchase, Warranties and Servicing Agreement or the
Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Purchase, Warranties and
Servicing Agreement or the Mortgage Loans, including without limitation the
transfer of the servicing
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obligations under the Purchase, Warranties and Servicing Agreement. 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, Warranties and Servicing Agreement, or
the Mortgage Loans; and
d. Neither the Assignor nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner, or made by general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Mortgage Loans under the Securities Act of 1933
(the "1933 Act") or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 1933 Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the
Assignor, the Seller and the Servicer 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 and Assumption Agreement, and to
consummate the transactions set forth herein. The execution, delivery and
performance of the Assignee of this Assignment and Assumption 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
and Assumption 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;
c. To the best of Assignee's knowledge, 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 and Assumption Agreement, or the consummation by it of the
transactions contemplated hereby;
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d. The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Purchase, Warranties and Servicing
Agreement and the Mortgage Loans, and from and after the date hereof, the
Assignee assumes for the benefit of each of the Seller, the Servicer and the
Assignor all of the Assignor's obligations as Purchaser thereunder, with respect
to the Mortgage Loans;
e. The Assignee understands that the Mortgage Loans have not been
registered under the 1933 Act or the securities laws of any state;
f. The purchase price being paid by the Assignee for the Mortgage
Loans is in excess of $250,000 and will be paid by cash remittance of the full
purchase price within sixty (60) days of the sale;
g. The Assignee is acquiring the Mortgage Loans for investment for
its own account only and not for any other person;
h. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and financial and business matters
that it is capable of evaluating the merits and the risks of investment in the
Mortgage Loans;
i. The Assignee has been furnished with all information regarding
the Mortgage Loans that it has requested from the Assignor, the Seller or the
Servicer;
j. Neither the Assignee nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, an
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Mortgage Loans under the 1933 Act or which
would render the disposition of the Mortgage Loans a violation of Section 5 of
the 1933 Act or require registration pursuant thereto, nor will it act, nor has
it authorized or will it authorize any person to act, in such manner with
respect to the Mortgage Loans; and
k. Either: (1) the Assignee is not an employee benefit plan ("Plan")
within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or a
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plan (also "Plan") within the meaning of section 4975(e)(1) of the Internal
Revenue Code of 1986 ("Code"), and the Assignee is not directly or indirectly
purchasing the Mortgage Loans on behalf of, investment manager of, as named
fiduciary of, as trustee of, or with assets of, a Plan; or (2) the Assignee's
purchase of the Mortgage Loans will not result in a prohibited transaction under
section 406 of ERISA or section 4975 of the Code.
Distributions shall be made by wire transfer of immediately
available funds to _____________________________ for the account of
_________________________________________ account number
___________________________________________________. Applicable statements
should be mailed to __________________________________________________.
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The Assignor's address for purposes for all notices and correspondence related
to the Mortgage Loans and this Agreement is:
_________________________________________
_________________________________________
Attention: ______________________________
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption to be executed by their duly authorized officers as of the date first
above written.
_________________________________ ______________________________
Assignor Assignee
By:______________________ By:___________________________
Its:_____________________ Its:__________________________
Taxpayer Identification Taxpayer Identification
Number:__________________ Number:_______________________
Acknowledged:
Chase Manhattan Mortgage Corporation
By:___________________________
Its:__________________________
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EXHIBIT A to Assignment and Assumption Agreement
MORTGAGE LOAN PURCHASE, WARRANTIES AND SERVICING AGREEMENT
[INTENTIONALLY OMITTED]
EXHIBIT B to Assignment and Assumption Agreement
THE MORTGAGE LOANS
[INTENTIONALLY OMITTED]
1
EXHIBIT E
POOL STATISTICS
[INTENTIONALLY OMITTED]
2
EXHIBIT F
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
3
EXHIBIT G
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
RE: Mortgage Loan #________________________________________
BORROWER:__________________________________________________
PROPERTY: _________________________________________________
Pursuant to a Mortgage Loan 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 that 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
ofAgreement. 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.
4
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:
_____________________________________________
_____________________________________________
_____________________________________________
Acknowledgement:
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
5
