Exhibit 99.4
EXECUTION
RECONSTITUTED SERVICING AGREEMENT
THIS RECONSTITUTED SERVICING AGREEMENT (this "Agreement"), entered into as
of the 1st day of May, 2001, by and between XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and
OCWEN FEDERAL BANK FSB, a federal savings bank (the "Servicer"), recites and
provides as follows:
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans as
identified on Schedule I hereto (the "Serviced Mortgage Loans") to Structured
Asset Securities Corporation, a Delaware special purpose corporation ("SASCO"),
which in turn has conveyed the Serviced Mortgage Loans to Bank One, National
Association, a national banking association, as trustee (the "Trustee"), under
a trust agreement dated as of May 1, 2001 (the "Trust Agreement"), among the
Trustee, Xxxxx Fargo Bank Minnesota, National Association, as master servicer
("WFBM" and, together with any successor Master Servicer appointed pursuant to
the provisions of the Trust Agreement, the "Master Servicer"), SASCO, as
depositor, and The Murrayhill Company, as loss mitigation advisor (the "Loss
Mitigation Advisor") under a Loss Mitigation Advisory Agreement dated as of May
1, 2001 between the Loss Mitigation Advisor and the Servicer (the "Loss
Mitigation Advisory Agreement").
WHEREAS, multiple classes of certificates (the "Certificates") will be
issued on the Closing Date pursuant to the Trust Agreement, including the Class
X Certificate.
WHEREAS, the Serviced Mortgage Loans are currently being serviced by
the Servicer for Xxxxxx Capital pursuant to the Residential Flow Servicing and
Sale of Servicing Rights Agreement dated August 1, 1999, between the Servicer,
AMRESCO Residential Mortgage Corporation and Finance America, LLC (the "Finance
America Agreement", which agreement was assigned to Xxxxxx Capital).
WHEREAS, Xxxxxx Capital and the Servicer desire to transfer the
servicing of the Serviced Mortgage Loans from the Finance America Agreement to
the Residential Flow Servicing Agreement dated August 1, 1999 between the
Servicer and Xxxxxx Capital (for Performing and Non-Performing Residential
Mortgage Loans and REO Properties) (hereinafter, the "Flow Servicing
Agreement") solely for purposes of this reconstitution.
WHEREAS, Xxxxxx Capital desires that the Servicer continue to service
the Serviced Mortgage Loans, and the Servicer has agreed to do so, subject to
the rights of the Master Servicer and the Class X Certificateholder to
terminate the rights and obligations of the Servicer hereunder as set forth
herein and to the other conditions set forth herein.
WHEREAS, Xxxxxx Capital and the Servicer agree that the provisions of
the Flow Servicing Agreement shall apply to the Serviced Mortgage Loans, but
only to the extent provided herein and that this Agreement shall constitute a
Reconstitution Agreement (as defined in the Flow Servicing Agreement) which
shall govern the Serviced Mortgage Loans for so long as such Serviced Mortgage
Loans remain subject to the provisions of the Trust Agreement.
WHEREAS, the Master Servicer and any successor master servicer shall
be obligated, among other things, to supervise the servicing of the Serviced
Mortgage Loans on behalf of the Trustee, and shall have the right, under
certain circumstances, to terminate the rights and obligations of the Servicer
under this Agreement.
WHEREAS, Xxxxxx Capital and the Servicer intend that each of the
Master Servicer and the Trustee is an intended third party beneficiary of this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxxx Capital and the Servicer
hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this Agreement,
including Exhibit A hereto and any provisions of the Flow Servicing Agreement
incorporated by reference herein, shall have the meanings (regardless if such
terms are defined in the Flow Servicing Agreement, except for the term
"Collection Account") ascribed to such terms in the Trust Agreement attached as
Exhibit B hereto.
2. Transfer. For administrative convenience, the Servicer and Xxxxxx
Capital hereby agree that the servicing of the Serviced Mortgage Loans
currently being serviced under the Finance America Agreement shall be deemed
transferred for servicing under the Flow Servicing Agreement as reconstituted
by this Agreement.
3. Servicing. The Servicer agrees, with respect to the Serviced Mortgage
Loans, to perform and observe the duties, responsibilities and obligations that
are to be performed and observed under the provisions of the Flow Servicing
Agreement, except as otherwise provided herein and on Exhibit A hereto, and
that the provisions of the Flow Servicing Agreement, as so modified, are and
shall be a part of this Agreement to the same extent as if set forth herein in
full.
4. Master Servicing; Termination of Servicer. The Servicer, including any
successor servicer hereunder, shall be subject to the supervision of the Master
Servicer, which Master Servicer shall be obligated to ensure that the Servicer
services the Serviced Mortgage Loans in accordance with the provisions of this
Agreement. The Master Servicer, acting on behalf of the Trustee and the trust
fund created pursuant to the Trust Agreement (the "Trust Fund"), shall have the
same rights as Xxxxxx Capital under the Flow Servicing Agreement to enforce the
obligations of the Servicer under the Flow Servicing Agreement and the term
"Owner" as used in the Flow Servicing Agreement in connection with any rights
of the Owner shall refer to the Master Servicer except as otherwise specified
in Exhibit A hereto. The Master Servicer shall be entitled to terminate the
rights and obligations of the Servicer under this Agreement upon the failure of
the Servicer to perform any of its obligations under this Agreement, which
failure results in a Servicer Event of Default, as provided in Article IX of
the Flow Servicing Agreement. Notwithstanding anything herein to the contrary,
in no event shall the Master Servicer assume any of the obligations of Xxxxxx
Capital hereunder; and in connection with the performance of the Master
Servicer's duties hereunder the parties and other signatories hereto agree that
the Master Servicer shall be entitled to all of the rights, protections and
limitations of liability afforded to the Master Servicer under the Trust
Agreement.
5. No Representations. Neither the Servicer nor the Master Servicer shall
be obligated or required to make any representations and warranties regarding
the characteristics of the Serviced Mortgage Loans in connection with the
transactions contemplated by the Trust Agreement and issuance of the
Certificates issued pursuant thereto.
6. Notices. All notices and communications between or among the parties
hereto (including any third party beneficiary thereof) shall be in writing and
shall be deemed received or given when mailed first-class mail, postage
prepaid, addressed to each other party at its address specified below or, if
sent by facsimile or electronic mail, when facsimile or electronic confirmation
of receipt by the recipient is received by the sender of such notice. Each
party may designate to the other parties in writing, from time to time, other
addresses to which notices and communications hereunder shall be sent.
All notices required to be delivered to the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Xxxxx Fargo Bank Minnesota,
National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Master Servicing
Department ARC 2001-BC3
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All remittances required to be made to the Master Servicer under this
Agreement shall be made on a scheduled/scheduled basis to the following wire
account:
Xxxxx Fargo Bank Minnesota
National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: Collection Account No. 00000000
(ARC 2001-BC3)
All notices required to be delivered to the Trustee hereunder shall be
delivered to the Trustee at the following address:
Bank One, National Association
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Corporate Trust Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All notices required to be delivered to Xxxxxx Capital hereunder shall be
delivered to Xxxxxx Capital at the following address:
Xxxxxx Capital, a Division of Xxxxxx
Brothers Holdings Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Mortgage Backed Finance Department (ARC 2001-BC3)
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
All notices required to be delivered to the Servicer shall be delivered to
the address of its office as set forth in the Flow Servicing Agreement.
7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING NEW YORK OR
OTHER CHOICE OF LAW RULES TO THE CONTRARY.
8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all of which counterparts shall together constitute but one and the same
instrument.
9. Reconstitution. Xxxxxx Capital and the Servicer agree that this
Agreement is a "Reconstitution Agreement" and that the date hereof is the
"Reconstitution Date", each as defined in the Flow Servicing Agreement.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
OCWEN FEDERAL BANK FSB
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
Acknowledged By:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ Xxx Xxxxx
-----------------------------------
Name: Xxx Xxxxx
Title: Assistant Vice President
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: First Vice President
EXHIBIT A
Modifications to the Flow Servicing Agreement
1. Unless otherwise specified herein, any provisions of the Flow
Servicing Agreement, including definitions, relating to (i)
representations and warranties of the Owner, (ii) Agency Transfers,
Pass-Through Transfers, whole loan transfers, reconstitution and
securitization, (iii) the sale and purchase of the Serviced Mortgage
Loans and Setup Expenses, (iv) Transfer Dates, (v) Non-Performing
Loans, and (vi) Preliminary Servicing Period, shall be disregarded.
The exhibits to the Flow Servicing Agreement and all references to
such exhibits shall also be disregarded.
2. For reporting purposes, a Serviced Mortgage Loan is "delinquent" when
any payment contractually due thereon has not been made by the close
of business on the Due Date therefor. Such Serviced Mortgage Loan is
"30 days Delinquent" if such payment has not been received by the
close of business on the corresponding day of the month immediately
succeeding the month in which such payment was first due, or, if there
is no such corresponding day (e.g., as when a 30-day month follows a
31-day month in which a payment was due on the 31st day of such
month), then on the last day of such immediately succeeding month.
Similarly for "60 days Delinquent" and the second immediately
succeeding month and "90 days Delinquent" and the third immediately
succeeding month.
3. The definition of "Accepted Servicing Practices" is hereby deleted and
replaced by the following:
With respect to any Serviced Mortgage Loan, those mortgage
servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such
Serviced Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located.
4. The definition of "Ancillary Income" in Article I is hereby amended by
adding the words "as additional compensation" to the end of the last
sentence.
5. A new definition of "Adverse REMIC Event" is hereby added to Article I
to read as follows:
"Adverse REMIC Event": As defined in Article X of the
Trust Agreement.
6. The definition of Business Day in Article I is hereby amended by
adding ", Illinois, Minnesota and Maryland" immediately following the
word "New York" in the definition thereof.
7. The definition of "Collection Account" in Article I is hereby amended
by deleting the words "in trust for Xxxxxx Capital, a Division of
Xxxxxx Brothers Holdings Inc. and its successors and assigns" and
substituting the following words: "in trust for Xxxxx Fargo Bank
Minnesota, National Association, as Master Servicer for the ARC
2001-BC3 Trust."
8. The definition of "Collection Period" in Article I is hereby amended
in its entirety to read as follows:
"Collection Period" means with respect to each Distribution
Date, the period commencing on the second day of the month
immediately preceding the month of the related Distribution
Date and ending on the first day of the month of such
Distribution Date.
9. The definition of "Current Servicer" in Article I shall be deleted in
its entirety.
10. A new definition of "Custodial Agreement" is added to Article I
immediately following the definition of "Current Servicer" to read as
follows:
"Custodial Agreement" means the custodial agreement relating
to the custody of the Serviced Mortgage Loans between Bankers
Trust Company of California, N.A., as custodian, and Bank
One, National Association, as trustee.
11. The definition of "Custodian" in Article I is hereby amended in its
entirety to read as follows:
"Custodian" means Bankers Trust Company of California, N.A.,
any successor in interest or any successor custodian
appointed pursuant to the Custodial Agreement.
12. The definition of "Distribution Date" in Article I is hereby amended
in its entirety to read as follows:
"Distribution Date" means the 18th day (or if such 18th day
is not a Business Day, the first Business Day immediately
following) of any month.
13. The definition of "Eligible Account" in Article I is hereby amended in
its entirety to read as follows:
"Eligible Account" means a segregated account maintained by
either (i) a depository institution the accounts of which are
insured by the FDIC and the short-term debt obligations of
which (or in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured
debt obligations of such holding company) are rated "A-1" or
better by S&P or "Prime-1" or better by Xxxxx'x (or a
comparable rating, if another rating agency is specified by
the Master Servicer by written notice to the Servicer) or
(ii) the corporate trust department of any bank the debt
obligations of which are rated at least AA or its equivalent
by either of S&P or Xxxxx'x.
14. The definition of "Escrow Accounts" in Article I is hereby amended by
deleting the words "for Xxxxxx Capital, a Division of Xxxxxx Brothers
Holdings Inc. and its successors and assigns, and various mortgagors"
and replacing them with the following words: "for Xxxxx Fargo Bank
Minnesota, National Association, as Master Servicer for the ARC
2001-BC3 Trust".
15. The definition of "Fitch" in Article I is hereby amended to read as
follows:
"Fitch" means Fitch, Inc. and its successors and assigns.
16. A new definition of "Monthly Advance" is added to Article I
immediately following the definition of "Missing Document Report" to
read as follows:
"Monthly Advance" means with respect to each Distribution
Date and each Loan, an amount equal to the Monthly Payment
(with the interest portion of such Monthly Payment adjusted
to the Serviced Mortgage Loan Remittance Rate) that was due
on the Serviced Mortgage Loan, and that was delinquent at the
close of business on the first day of the month in which such
Distribution Date occurs, but only to the extent that such
amount is expected, in the reasonable judgment of the
Servicer, to be recoverable from collections or other
recoveries in respect of such Serviced Mortgage Loan. To the
extent that the Servicer determines that any such amount is
not recoverable from collections or other recoveries in
respect of such Serviced Mortgage Loan, such determination
shall be evidenced by a certificate of a Servicing Officer
delivered to the Master Servicer setting forth such
determination and the procedures and considerations of the
Servicer forming the basis of such determination, which shall
include a copy of any broker's price opinion and any other
information or reports obtained by the Servicer which may
support such determination.
17. The definition of "Non-Recoverable Advance" in Article I is hereby
amended by replacing the reference to "Section 2.3(b)" with "Section
2.3(c)".
18. The definition of "Opinion of Counsel" is hereby amended and restated
as follows:
"Opinion of Counsel" A written opinion of counsel, who may be
an employee of the Servicer, that is reasonably acceptable to
the Trustee and the Master Servicer provided that any Opinion
of Counsel relating to (a) qualification of the Serviced
Mortgage Loans in a REMIC or (b) compliance with the REMIC
Provisions, must be an opinion of counsel reasonably
acceptable to the Trustee, the Master Servicer and Xxxxxx
Capital, who (i) is in fact independent of any Seller, the
Servicer and any Master Servicer of the Serviced Mortgage
Loans, (ii) does not have any material direct or indirect
financial interest in the Servicer or any Master Servicer of
the Serviced Mortgage Loans or in an affiliate of any such
entity and (iii) is not connected with any Seller, the
Servicer or any Master Servicer of the Serviced Mortgage
Loans as an officer, employee, director or person performing
similar functions.
19. The definition of "Prepayment Interest Shortfall Amount" in Article I
is hereby amended by inserting the words (i) "voluntary (not including
discounted payoffs)" between the words "a" and "principal" in the
second line thereof, (ii) "or in part" between the words "full" and
"during" in the second line thereof and (iii) "for Prepayments in full
only" at the end of the parenthetical.
20. A new definition of "Prime Rate" is added to Article I immediately
following the definition of "Prepayment Interest Shortfall Amount" to
read as follows:
"Prime Rate" means the prime rate published from time to
time, as published as the average rate in The Wall Street
Journal Northeast Edition.
21. The definition of "Property Protection Expenses" in Article I is
hereby amended by adding the word "reasonable" at the beginning of
clauses (h) and (i).
22. The definition of "REO Property" in Article I is hereby amended by
replacing the word "Owner" with "the Trustee on behalf of the Trust
Fund".
23. The definition of "Servicing Advances" in Article I is hereby amended
in its entirety to read as follows:
"Servicing Advances" means all customary, reasonable and
necessary "out-of-pocket" costs and expenses (including
reasonable attorneys' fees and disbursements) incurred by the
Servicer in the performance by the Servicer of its servicing
obligations hereunder, including, but not limited to, (a)
Property Protection Expenses, Escrow Payments, and Property
Improvement Expenses, and (b) any enforcement or
administrative or judicial proceedings, including
foreclosures.
24. The definition of "Servicing Fee" in Article I is hereby amended in
its entirety to read as follows:
"Servicing Fee" means an amount equal to one-twelfth the
product of (a) a rate per annum equal to 0.50% and (b) the
outstanding principal balance of the Serviced Serviced
Mortgage Loan. The Servicing Fee is payable solely from the
interest portion (including recoveries with respect to
interest from Liquidation Proceeds) of such Monthly Payment
collected by the Servicer or as otherwise provided under this
Agreement. In the event servicing is transferred to a
successor servicer, clause (a) of the Servicing Fee may not
exceed 0.50% per annum.
25. The definition of "Servicing File" in Article I is hereby replaced
with the following:
"Servicing File" means with respect to each Loan, the file
retained by the Servicer.
26. The parties hereto acknowledge that Section 2.1 (Transfer of Servicing
Files to Servicer) of the Flow Servicing Agreement shall be
inapplicable to this Agreement.
27. The parties hereto acknowledge that the provisions of Section 2.2
(Release of Loan Documents) are superceded by the provisions of the
Custodial Agreement.
28. Section 2.3(a) is hereby amended by replacing the word "Owner" in the
first, second and eighteenth lines thereof with the words "Trustee and
the Trust Fund" and by adding "if the accounts of the Servicer are
FDIC insured" after the first use of the word "Servicer" in the
seventh line thereof.
29. Section 2.3(b) is hereby amended by deleting the word "and" at the end
of clause (iv), deleting the period at the end of clause (v) and
replacing it with a semi-colon followed by the word "and", and by
adding a new clause (vi) to read as follows:
(vi) any Prepayment Interest Shortfall Amount.
30. Section 2.3(e) is hereby amended by replacing the reference to "Owner"
in the third line thereof with "Trustee and Trust Fund".
31. Section 2.3(i) is hereby amended by adding ", the Trustee" after the
word "Obligor" in the second line thereof.
32. Section 2.5 (Servicing Compensation) is hereby amended by deleting the
first two sentences thereof and by replacing the final sentence with
the following:
In the event that the Servicer deposits into the Collection
Account any Ancillary Income, the Servicer may withdraw such
amount pursuant to Section 6.2(c).
33. Section 3.1 (Default Management Responsibilities) is hereby amended by
(a) replacing the references to "Owner" with "Trustee and Trust Fund"
in each instance, and by adding as the last sentence thereof the
following:
"Notwithstanding anything to the contrary in this
Agreement, the Servicer shall not, (except in the case where
a default by the related Mortgagor has occurred or is, in the
reasonable judgment of the Servicer, imminent), knowingly
permit any modification, waiver or amendment of any material
term of any Serviced Mortgage Loan (including but not limited
to the interest rate, the principal balance, the amortization
schedule, or any other term affecting the amount or timing of
payments on the Serviced Mortgage Loan or the collateral
therefor) unless the Servicer shall have provided to the
Master Servicer and the Trustee an Opinion of Counsel in
writing to the effect that such modification, waiver or
amendment would not cause an Adverse REMIC Event. The cost of
such Opinion of Counsel shall be reimbursable pursuant to
Section 6.2(d)." The Servicer shall notify the Loss
Mitigation Advisor of any modification made to a Serviced
Mortgage Loan if the result of such modification is to
increase the current loan-to-value ratio in excess of 100%.
and (b) adding the following paragraph as the second paragraph thereof:
The Servicer or any designee of the Servicer shall not waive
any prepayment charge or fee with respect to any Serviced
Mortgage Loan which contains a prepayment charge and which
prepays during the term of the penalty. If the Servicer or
its designee fails to collect the prepayment charge upon any
prepayment of any Serviced Mortgage Loan which contains a
prepayment charge, the Servicer shall deposit into the
Collection Account an amount equal to the prepayment charge
which was not collected. Notwithstanding the above, the
Servicer or its designee may waive a prepayment charge
without remitting the amount of the foregone prepayment
charge to the Collection Account if the prepayment is not a
result of a refinancing by the Servicer or any of its
affiliates and (i) the Serviced Mortgage Loan is in default
or foreseeable default and such waiver would, in the
reasonable judgment of the Servicer, maximize recovery of
total proceeds taking into account the value of such
prepayment charge and the related Serviced Mortgage Loan or
(ii) the collection of the prepayment charge would be in
violation of applicable laws.
34. Section 3.2 (Foreclosure) is hereby amended by (i) replacing the first
sentence thereof with the following:
In the event that any payment due under any Serviced
Mortgage Loan remains delinquent for a period of 65 days or
any other default continues for a period of 65 days beyond
the expiration of any grace or cure period, the Servicer
shall commence foreclosure proceedings and provide notice
thereof to the Master Servicer and the Trustee in writing.
The Servicer shall retain an attorney and supervise the
conduct of the foreclosure proceeding.
; (ii) by replacing the word "Owner" in the sixth line
thereof with "the Trust Fund"; (iii) replacing the word "Owner" in the
tenth through thirteenth lines thereof with "Master Servicer" and (iv)
replacing the words "five (5)" with "thirty (30)".
35. Section 3.3 (Deed in Lieu) is hereby amended by replacing the word
"Owner" in the fourth and seventh lines thereof with "Trustee and
Trust Fund", by replacing the word "Owner" in the tenth through the
thirteenth lines thereof with "Master Servicer" by replacing the words
"five (5)" with "thirty (30)".
36. Section 3.4 (Priority; Insurance Claims) is hereby amended by
replacing the word "Owner" with "Trust Fund".
37. Section 3.5 (Bankruptcy of Obligor) is hereby amended by replacing the
word "Owner" with "Trust Fund".
38. Section 3.6 (Discounted Payoffs) is hereby amended by replacing the
word "three" with "five" and replacing the word "Owner" with "Master
Servicer".
39. Section 4.1 (Property Management and Disposition Services) is hereby
amended by adding the following paragraphs after the first paragraph
thereto:
In the event that the Trust Fund acquires any REO Property in
connection with a default or imminent default on a Serviced Mortgage
Loan, the Servicer shall dispose of such REO Property not later than
the end of the third taxable year after the year of its acquisition by
the Trust Fund unless the Servicer has applied for and received a
grant of extension from the Internal Revenue Service to the effect
that, under the REMIC Provisions and any relevant proposed legislation
and under applicable state law, the applicable Trust REMIC may hold
REO Property for a longer period without adversely affecting the REMIC
status of such REMIC or causing the imposition of a federal or state
tax upon such REMIC. If the Servicer has received such an extension,
then the Servicer shall continue to attempt to sell the REO Property
for its fair market value for such period longer than three years as
such extension permits (the "Extended Period"). If the Servicer has
not received such an extension and the Servicer is unable to sell the
REO Property within the period ending 3 months before the end of such
third taxable year after its acquisition by the Trust Fund or if the
Servicer has received such an extension, and the Servicer is unable to
sell the REO Property within the period ending three months before the
close of the Extended Period, the Servicer shall, before the end of
the three year period or the Extended Period, as applicable, (i)
purchase such REO Property at a price equal to the REO Property's fair
market value or (ii) auction the REO Property to the highest bidder
(which may be the Servicer) in an auction reasonably designed to
produce a fair price prior to the expiration of the three-year period
or the Extended Period, as the case may be. The Trustee shall sign any
document or take any other action reasonably requested by the Servicer
which would enable the Servicer, on behalf of the Trust Fund, to
request such grant of extension.
Notwithstanding any other provisions of this Agreement, no
REO Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would: (i) cause
such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code; or (ii) subject any
Trust REMIC to the imposition of any federal income taxes on the
income earned from such REO Property, including any taxes imposed by
reason of Sections 860F or 860G(c) of the Code, unless the Servicer
has agreed to indemnify and hold harmless the Trust Fund with respect
to the imposition of any such taxes.
40. Section 4.2 is hereby amended by replacing each reference to the word
"Owner" with "Master Servicer", changing the words "five (5)" to
"thirty (30)" and changing the reference to "Section 11.3" to "Section
12.3".
41. Section 5.4 (Annual Audit) is hereby amended by changing the reference
to "April 30, 2000" in the second line thereof to "April 30, 2002" and
by changing the reference to "Owner" in the fourth line thereof to
"the Master Servicer".
42. A new Section 5.5 is added to the Flow Servicing Agreement to read as
follows:
Section 5.5 Annual Officer's Certificate.
----------------------------
On or before April 30 of each year, beginning with
April 30, 2002, the Servicer, at its own expense, will
deliver to the Master Servicer and the Depositor 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 officers and the nature and status
thereof including the steps being taken by the Servicer to
remedy such default.
43. Section 6.2 (Remittances and Monthly Report) is hereby amended as
follows:
(1) the first sentence shall be deleted in its entirety;
(2) replacing the words "in the following priority" in the
second sentence of the first paragraph with "as
follows";
(3) paragraph (b) shall be deleted in its entirety and
replaced with the following new paragraph (b):
(b) to make payments to the Master Servicer in the
amounts and in the manner provided by Section 6.6.
(4) by replacing the words "then Servicer may seek
reimbursement from Owner (as set forth in Section 6.4
below), it being understood that, in the case of such
reimbursement from the Collection Account, Servicer's
right thereto shall be prior to the rights of Owner" in
paragraph (d) with "then the Servicer may reimburse
itself from amounts on deposit in the Collection
Account, it being understood that the Servicer's right
to such amounts from the Collection Account shall be
prior to the rights of the Trust Fund."
(5) new paragraphs (e) and (f) after paragraph (d) shall be
added to read as follows:
(e) to reimburse the Servicer for Monthly Advances of
the Servicer's funds made pursuant to Section 6.8.
The Servicer's right to reimburse itself pursuant
to this subclause (e) with respect to any Serviced
Mortgage Loan shall be limited to amounts received
on the related Serviced Mortgage Loan which
represent late payments of principal and/or
interest respecting which any such advance was
made, it being understood that, in the case of any
such reimbursement, the Servicer's right to such
reimbursement shall be prior to the rights of the
Trust Fund; provided, however, that in the event
that the Servicer determines in good faith that any
unreimbursed Monthly Advances will not be
recoverable from amounts representing late
recoveries of payments of principal or interest
respecting the particular Serviced Mortgage Loan as
to which such Monthly Advance was made or from
Liquidation Proceeds or Insurance Proceeds with
respect to such Serviced Mortgage Loan, the
Servicer may reimburse itself for such amounts from
the Collection Account, it being understood, in the
case of any such reimbursement, that the Servicer's
right thereto shall be prior to the rights of the
Trust Fund;
(f) to reimburse the Servicer for any amounts owed
pursuant to Section 8.3(a).
(6) and by deleting the last paragraph.
44. Section 6.3 (Remittance Upon Termination) is hereby amended by
restating paragraph (b) and paragraph (c) of such Section as follows:
(b) to make payments to the Master Servicer in the
amounts and in the manner provided by Section 6.6;
and
(c) to reimburse itself for all unpaid Servicing Fees,
Monthly Advances and Servicing Advances, it being
understood that the Servicer's rights to such
reimbursement shall be prior to the rights of the
Trust Fund.
45. The parties hereto acknowledge that Section 6.4 (Billing) shall be
inapplicable to this Reconstitution Agreement.
46. The parties hereto acknowledge that Section 6.5 (Missing Document
Report) shall be superseded by the provisions of the Custodial
Agreement.
47. New Sections 6.6, 6.7, 6.8 and 6.9 are hereby added to the Flow
Servicing Agreement to read as follows:
Section 6.6. Remittances.
-----------
On each Distribution Date the Servicer shall remit
on a scheduled/scheduled basis by wire transfer of
immediately available funds to the Master Servicer (a) all
amounts deposited in the Collection Account as of the close
of business on the last day of the related Collection Period
(net of charges against or withdrawals from the Collection
Account pursuant to Section 6.2) (other than payments of
principal due on or before April 1, 2001), plus (b) all
Monthly Advances, if any, which the Servicer is obligated to
make pursuant to Section 6.8, minus (c) any amounts
attributable to Principal Prepayments, Liquidation Proceeds,
insurance proceeds, condemnation proceeds or REO Property
disposition proceeds received after the applicable Collection
Period, which amounts shall be remitted on the following
Distribution Date, plus (d) any additional interest required
to be deposited in the Collection Account in connection with
a Prepayment Interest Shortfall Amount in accordance with
Section 2.3(b)(vi), and minus (e) any amounts attributable to
Monthly Payments collected but due on a due date or dates
subsequent to the first day of the month in which such
Distribution Date occurs, which amounts shall be remitted on
the Distribution Date or Dates next succeeding the Collection
Period for such amounts.
With respect to any remittance received by the
Master Servicer after the Business Day on which such payment
was due, the Servicer shall pay to the Master Servicer
interest on any such late payment at an annual rate equal to
the Prime Rate, adjusted as of the date of each change, plus
three percentage points, but in no event greater than the
maximum amount permitted by applicable law. Such interest
shall be deposited in the Collection Account by the Servicer
on the date such late payment is made and shall cover the
period commencing with the day following such Business Day
and ending with the Business Day on which such payment is
made, both inclusive. Such interest shall be remitted along
with the distribution payable on the next succeeding
Distribution Date. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment
or a waiver of any Event of Default by the Servicer.
Section 6.7 Statements to Master Servicer.
-----------------------------
Not later than the tenth calendar day (or if such
tenth calendar day is not a Business Day, the immediately
preceding Business Day) of each month, the Servicer shall
furnish to the Master Servicer (a) a monthly remittance
advice containing such information and in such format
mutually acceptable to the Servicer and the Master Servicer
as to the accompanying remittance and the period ending on
the preceding Determination Date and (b) all such information
required pursuant to clause (a) above on a magnetic tape or
other similar media reasonably acceptable to the Master
Servicer.
Such monthly remittance advice shall also include on
a cumulative basis the amount of any (i) claims filed, (ii)
claim payments made, (iii) claims denied and (iv) policies
cancelled with respect to those Serviced Mortgage Loans
covered by loan-level primary mortgage insurance policies
provided by MGIC or any other provider of primary mortgage
insurance purchased by the Trust as specified in Schedule I
hereto.
The Servicer shall provide the Master Servicer with
such information available to it concerning the Serviced
Mortgage Loans as is necessary for the Master Servicer to
prepare the Trust Fund's federal income tax return as the
Master Servicer may reasonably request from time to time.
Section 6.8 Monthly Advances by Servicer.
----------------------------
On the Business Day immediately preceding each
Distribution Date, the Servicer shall deposit in the
Collection Account from its own funds or from amounts held
for future distribution an amount equal to all Monthly
Payments which were due on the Serviced Mortgage Loans during
the applicable Collection Period and which were delinquent at
the close of business on the immediately preceding
Determination Date. Any amounts held for future distribution
and so used shall be replaced by the Servicer by deposit in
the Collection Account on or before any future Distribution
Date if funds in the Collection Account on such Distribution
Date shall be less than remittances to the Master Servicer
required to be made on such Distribution Date. In no event
shall the preceding sentence be construed as limiting the
Servicer's right to (i) pass through late collections on the
related Serviced Mortgage Loans in lieu of making Monthly
Advances or (ii) reimburse itself for such Monthly Advances
from late collections on the related Serviced Mortgage Loans.
The Servicer shall make Monthly Advances through the
Distribution Date immediately preceding the distribution of
all Liquidation Proceeds and other payments or recoveries
(including insurance proceeds and condemnation proceeds) with
respect to the related Serviced Mortgage Loans.
Section 6.9 Compensating Interest.
---------------------
The Servicer shall deposit in the Collection Account
on a daily basis, and retain therein with respect to each
Principal Prepayment, the Prepayment Interest Shortfall
Amount, if any, for the month of such distribution. Such
deposit shall be made from the Servicer's own funds, without
reimbursement therefor up to a maximum amount per month of
the Servicing Fee actually received for such month for the
Serviced Mortgage Loans.
48. Section 7.1(e) (Litigation) is hereby amended by adding "in any one
instance or in the aggregate," after "if adversely determined,".
49. A new paragraph is hereby added at the end of Section 7.1
(Representations and Warranties) to read as follows:
It is understood and agreed that the representations
and warranties set forth in Section 7.1 shall survive the
engagement of the Servicer to perform the servicing
responsibilities hereunder and the delivery of the Servicing
Files to the Servicer and shall inure to the benefit of the
Trustee and the Trust Fund. Upon discovery by either the
Servicer, the Master Servicer or the Trustee of a breach of
any of the foregoing representations and warranties which
materially and adversely affects the ability of the Servicer
to perform its duties and obligations under this Agreement or
otherwise materially and adversely affects the value of the
Serviced Mortgage Loans, the Mortgaged Property or the
priority of the security interest on such Mortgaged Property
or the interest of the Trustee or the Trust Fund, the party
discovering such breach shall give prompt written notice to
the other.
Within 60 days of the earlier of either discovery by
or notice to the Servicer of any breach of a representation
or warranty set forth in Section 7.1 which materially and
adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise
materially and adversely affects the value of the Serviced
Mortgage Loans, the Mortgaged Property or the priority of the
security interest on such Mortgaged Property, the Servicer
shall use its best efforts promptly to cure such breach in
all material respects and, if such breach cannot be cured,
the Servicer shall, at the Trustee's option, assign the
Servicer's rights and obligations under this Agreement (or
respecting the affected Loans) to a successor Servicer
selected by the Trustee with the prior consent and approval
of the Master Servicer. Such assignment shall be made in
accordance with Section 10.4.
In addition, the Servicer shall indemnify (from its
own funds) the Trustee, the Trust Fund and the Master
Servicer and hold each of them harmless against any costs
resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of the
Servicer's representations and warranties contained in this
Agreement. It is understood and agreed that the remedies set
forth in this Section 7.1 constitute the sole remedies of the
Master Servicer, the Trust Fund and the Trustee respecting a
breach of the foregoing representations and warranties.
Any cause of action against the Servicer relating to
or arising out of the breach of any representations and
warranties made in Section 7.1 shall accrue upon (i)
discovery of such breach by the Servicer or notice thereof by
the Trustee or Master Servicer to the Servicer, (ii) failure
by the Servicer to cure such breach within the applicable
cure period, and (iii) demand upon the Servicer by the
Trustee or the Master Servicer for compliance with this
Agreement.
50. Section 8.2 (Servicer's Indemnity of Owner) is hereby amended by
changing the word "Owner" in the second, fifth and ninth lines thereof
to "Master Servicer, Trustee and the Trust Fund".
51. Section 8.3 (Owner's Indemnity of Servicer; Limitation on Liability of
Servicer) is hereby amended by (i) replacing Section 8.3(a) with the
following:
The Servicer and any director or officer or employee or agent
of the Servicer shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection
with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense incurred by reason of its
willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of its reckless disregard of obligations
and duties hereunder.
, (ii) deleting the fifth and sixth sentences of Section 8.3(d), (iii)
changing the word "Owner" in Section 8.3(b) to "Master Servicer,
Trustee or the Trust Fund", (iv) deleting "and the Servicing Fees
contained herein" from the second sentence of Section 8.3(d) and (v)
adding to the third sentence of Section 8.3(d) ", except that the
Master Servicer may disclose to the Loss Mitigation Advisor any
information that appears in the remittance report, or any other
information, required to be provided to the Loss Mitigation Advisor".
52. The parties hereto acknowledge that the remedies set forth in Section
10.1(b) may be exercised by either the Master Servicer or Trustee on
behalf of the Trust Fund.
53. A new paragraph is hereby added as the final paragraph of Section
10.1(b) to read as follows:
By a written notice, the Trustee and the Master
Servicer may waive any default by the Servicer in the
performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default
shall cease to exist, and any Event of Default under Section
9.1 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.
54. Section 10.1(c) is hereby amended in its entirety to read as follows:
(c) The Class X Certificateholder may terminate the
rights and obligations of the Servicer under this Agreement
without cause. Any such termination shall be with 30 days'
prior notice, in writing and delivered to the Trustee, the
Master Servicer and the Servicer by registered mail. The
Servicer shall comply with the termination procedures set
forth in Section 10.4 hereof. The Master Servicer or the
Trustee shall have no right to terminate the Servicer
pursuant to this Section 10.1(c). In the event of a
termination pursuant to this Section 10.1(c), the Class X
Certificateholder shall (i) appoint a successor servicer
pursuant to Section 10.4 and (ii) pay to the Servicer a sum,
as liquidated damages, from its own funds without
reimbursement, equal to the product of (a) two, (b) the
annual servicing fee rate, and (c) the aggregate unpaid
principal balance of the Serviced Mortgage Loans for which
this Agreement is going to be terminated as of the last day
of the month following receipt of such notice of termination.
In connection with any such termination by Xxxxxx Capital
pursuant to this Section 10.1(c), Xxxxxx Capital will be
responsible for reimbursing the Servicer for all unreimbursed
Servicing Advances, Servicing Fees and Monthly Advances
within fifteen days following the date of such termination
without any right of reimbursement from the Trust Fund.
55. Section 10.1(d) is hereby deleted in its entirety.
56. Section 10.2 is hereby amended by changing the word "Owner" to "Master
Servicer, the Trustee and the Depositor".
57. Section 10.3 (Servicer Not to Resign) is hereby amended by changing
the word "Owner" to the "Master Servicer and the Trustee", except in
the last sentence thereof where the word "Owner" shall be replaced by
the word "Master Servicer".
58. The following new paragraphs are hereby added to Section 10.4
immediately preceding the existing paragraph of Section 10.4, to read
as follows:
Within 90 days of the termination of the Servicer's
responsibilities and duties under this Agreement (a) pursuant
to Sections 10.1(b) or 10.3 (except 10.3(ii)), the Master
Servicer shall, in accordance with the provisions of the
Trust Agreement, (i) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor meeting the
eligibility requirements of this Agreement and which shall
succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Servicer under this Agreement;
or (b) pursuant to Section 10.1(c),the Class X
Certificateholder shall appoint a successor which shall
succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Servicer under this Agreement
simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this
Agreement; provided, however, the obligation of the Master
Servicer or the successor servicer to make Monthly Advances
not made by the defaulting Servicer shall be effective
immediately upon the termination of the defaulting Servicer.
Any successor to the Servicer shall be subject to the
approval of the Master Servicer, the Depositor and each
Rating Agency (as such term is defined in the Trust
Agreement). Each Rating Agency must deliver to the Trustee a
letter to the effect that such transfer of servicing will not
result in a qualification, withdrawal or downgrade of the
then-current rating of any of the Certificates. In addition,
with respect to any FHA Loans serviced hereunder, the
Servicer shall provide notice of such change in servicers to
HUD on HUD Form 92080 or such other form as prescribed by
HUD, at least 10 days after such transfer of servicing. In
connection with such appointment and assumption, the Master
Servicer or the Depositor, as applicable, may make such
arrangements for the compensation of such successor out of
payments on Serviced Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation
shall be in excess of that permitted the Servicer under this
Agreement. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the
Servicer shall discharge such duties and responsibilities
during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to
exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or
financial condition of its successor. The resignation or
removal of the Servicer pursuant to the aforementioned
sections shall not become effective until a successor shall
be appointed pursuant to this Section 10.4 and shall in no
event relieve the Servicer of the representations and
warranties made pursuant to Sections 7.1 and the remedies
available to the Trustee under Section 7.1, it being
understood and agreed that the provisions of such Section 7.1
shall be applicable to the Servicer notwithstanding any such
resignation or termination of the Servicer, or the
termination of this Agreement.
Within a reasonable period of time, but in no event
longer than within 30 days of the appointment of a successor
entity, the Servicer shall prepare, execute and deliver to
the successor entity any and all documents and other
instruments, place in such successor's possession all
Servicing Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of
such notice of termination. The Servicer shall cooperate with
the Trustee and the Master Servicer, as applicable, and such
successor in effecting the termination of the Servicer's
responsibilities and rights hereunder and the transfer of
servicing responsibilities to the successor Servicer,
including without limitation, the transfer to such successor
for administration by it of all cash amounts which shall at
the time be credited by the Servicer to the Collection
Account or any Escrow Account or thereafter received with
respect to the Loans. In the event the Servicer is terminated
pursuant to Section 10.1(c), the Class X Certificateholder
shall be responsible for payment from its own funds without
reimbursement of any out-of-pocket costs incurred by the
Servicer and the Master Servicer in connection with the
transfer of the Serviced Mortgage Loans to a successor
servicer.
Any successor appointed as provided herein shall
execute, acknowledge and deliver to the Trustee, the Servicer
and the Master Servicer an instrument (i) accepting such
appointment, wherein the successor shall make the
representations and warranties set forth in Section 7.1 and
(ii) an assumption of the due and punctual performance and
observance of each covenant and condition to be performed and
observed by the Servicer under this Agreement, whereupon such
successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities
of the Servicer, with like effect as if originally named as a
party to this Agreement. Any termination or resignation of
the Servicer or termination of this Agreement pursuant to
Sections 10.1 or 10.3 shall not affect any claims that the
Master Servicer or the Trustee may have against the Servicer
arising out of the Servicer's actions or failure to act prior
to any such termination or resignation.
The Servicer shall deliver within three (3) Business
Days to the successor Servicer the funds in the Collection
Account and Escrow Account and all Loan Documents and related
documents and statements held by it hereunder and the
Servicer shall account for all funds and shall execute and
deliver such instruments and do such other things as may
reasonably be required to more fully and definitively vest in
the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the
Servicer.
Upon a successor's acceptance of appointment as
such, the Servicer shall notify the Trustee and Master
Servicer of such appointment in accordance with the notice
procedures set forth herein.
Except as otherwise provided in this Agreement, all
reasonable costs and expenses incurred in connection with any
transfer of servicing hereunder (whether as a result of
termination or removal of the Servicer or resignation of the
Servicer or otherwise), including, without limitation, the
costs and expenses of the Master Servicer or any other Person
in appointing a successor servicer, or of the Master Servicer
in assuming the responsibilities of the Servicer hereunder,
or of transferring the Servicing Files and the other
necessary data, to the successor servicer shall be paid by
the terminated, removed or resigning Servicer from its own
funds without reimbursement.
59. Section 12.2 (Choice of Law) shall be deleted in its entirety.
60. The provisions of Article XI (Reconstitution) are superceded by this
Agreement.
61. Section 12.4 (Entire Agreement; Amendments; Waivers) is hereby amended
by replacing "the party against whom such amendment is sought to be
enforced" with "the Servicer and Xxxxxx Capital, with the written
consent of the Master Servicer and the Trustee", and by deleting the
third sentence thereof and replacing it with "The Master Servicer,
may, by written notice to the Servicer, extend the time for or waive
the performance of any of the obligations of the Servicer hereunder."
62. Section 12.5 (No Joint Venture; Limited Agency) is hereby amended by
replacing the word "Owner" with "the Trustee, the Trust Fund, the
Master Servicer or Xxxxxx Capital" in each instance.
63. New Sections 12.10 (Intended Third Party Beneficiaries), is added to
the Flow Servicing Agreement to read as follows:
Section 12.10 Intended Third Party Beneficiaries.
----------------------------------
Notwithstanding any provision herein to the
contrary, the parties to this Agreement agree that it is
appropriate, in furtherance of the intent of such parties as
set forth herein, that the Master Servicer and the Trustee
receive the benefit of the provisions of this Agreement as
intended third party beneficiaries of this Agreement to the
extent of such provisions. The Servicer shall have the same
obligations to the Master Servicer and the Trustee as if they
were parties to this Agreement, and the Master Servicer and
the Trustee shall have the same rights and remedies to
enforce the provisions of this Agreement as if they were
parties to this Agreement. The Servicer shall only take
direction from the Master Servicer (if direction by the
Master Servicer is required under this Agreement) unless
otherwise directed by this Agreement or the Loss Mitigation
Advisory Agreement. Notwithstanding the foregoing, all rights
and obligations of the Master Servicer and the Trustee
hereunder (other than the right to indemnification) shall
terminate upon termination of the Trust Agreement and of the
Trust Fund pursuant to the Trust Agreement.
Exhibit B
Trust Agreement for ARC 2001-BC3
Schedule I
Schedule of Serviced Serviced Mortgage Loans
Schedule II
Schedule of Serviced Mortgage Loans
covered by MGIC PMI Policy
----------------------------------------------------------------------------
RESIDENTIAL FLOW SERVICING AGREEMENT
BETWEEN
OCWEN FEDERAL BANK FSB,
SERVICER
AND
XXXXXX CAPITAL, A DIVISION OF XXXXXX BROTHERS HOLDINGS INC.,
OWNER
DATED AUGUST 1, 1999
PERFORMING AND NON-PERFORMING
RESIDENTIAL MORTGAGE LOANS AND REO PROPERTIES
---------------------------------------------------------------------------
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.............................................1
Section 1.2. Interpretation of Agreement............................11
ARTICLE II
TRANSFER OF SERVICING, SERVICING RESPONSIBILITIES AND SERVICING COMPENSATION
Section 2.1. Transfer of Servicing Files to Servicer................11
Section 2.2. Release of Loan Documents..............................13
Section 2.3. Servicing Responsibilities.............................13
Section 2.4. Collection and Resolution Activities...................18
Section 2.5. Servicing Compensation.................................18
ARTICLE III
DEFAULT MANAGEMENT SERVICES
Section 3.1. Default Management Responsibilities....................19
Section 3.2. Foreclosure............................................19
Section 3.3. Deed in Lieu...........................................19
Section 3.4. Priority; Insurance Claims.............................20
Section 3.5. Bankruptcy of Obligor..................................20
Section 3.6. Discounted Payoffs.....................................20
ARTICLE IV
PROPERTY MANAGEMENT AND DISPOSITION SERVICES
Section 4.1. Property Management and Disposition Responsibilities...20
Section 4.2. Environmental Problems.................................21
ARTICLE V
STANDARDS FOR CONDUCT
Section 5.1. Standards of Care and Delegation of Duties.............21
Section 5.2. Transactions with Related Persons......................22
Section 5.3. Access to Records......................................22
Section 5.4. Annual Audit...........................................22
ARTICLE VI
BILLING OF AND REPORTS TO OWNER
Section 6.1. Property Protection Expenses and Property
Improvement Expenses...................................23
Section 6.2. Remittances and Monthly Report.........................23
Section 6.3. Remittance Upon Termination............................24
Section 6.4. Billing................................................24
Section 6.5. Missing Document Report................................25
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of Servicer.............25
Section 7.2. Representations and Warranties of Owner................26
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Liabilities to Obligors................................28
Section 8.2. Servicer's Indemnity of Owner..........................28
Section 8.3. Owner's Indemnity of Servicer; Limitation on
Liability of Servicer..................................28
Section 8.4. Indemnification Procedures.............................30
Section 8.5. Operation of Indemnities...............................31
ARTICLE IX
DEFAULT
Section 9.1. Events of Default......................................31
Section 9.2. Effect of Transfer.....................................32
ARTICLE X
TERM
Section 10.1. Term of Agreement.....................................32
Section 10.2. Transfers of Servicing................................33
Section 10.3. Servicer Not to Resign................................33
Section 10.4. Successor Servicer....................................33
ARTICLE XI
RECONSTITUTION
Section 11.1. Reconstitution........................................34
ARTICLE XII
MISCELLANEOUS
Section 12.1. Successors and Assigns: No Third Beneficiaries........36
Section 12.2. Choice of Law.........................................36
Section 12.3. Notices...............................................36
Section 12.4. Entire Agreement; Amendments; Waivers.................37
Section 12.5. No Joint Venture; Limited A&M.........................37
Section 12.6. Severabilily; Interpretation..........................37
Section 12.7. Counterparts..........................................37
Section 12.8. Waiver of Jury Trial..................................37
Section 12.9. Limitation of Damages.................................38
EXHIBITS
The following exhibits are incorporated into this Agreement:
EXHIBIT A......... Monthly Report
EXHIBIT B......... Servicing File
EXHIBIT C......... Acknowledgment Agreement
EXHIBIT D......... Form of Opinion of Counsel
EXHIBIT E......... Form of Officer's Certificate
RESIDENTIAL FLOW SERVICING AGREEMENT
This Residential Flow Servicing Agreement (this "Agreement") dated
effective as of August 1, 1199, by and between Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings Inc., a New York corporation ("Owner") and Ocwen
Federal Bank FSB, a federal savings bank (the "Servicer").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Owner (i) owns certain loans secured by mortgages and/or
deeds of trust ("Loans") and "red estate owned" properties ("REO Properties")
and (ii) may from time to time originate or buy additional Loans and REO
Properties for its own account;
WHEREAS, Owner and Servicer desire to set forth the terms and
conditions on which Servicer will service and provide management and
disposition services for such mortgage loans and "real estate owned"
properties;
NOW, THEREFORE, in consideration for the mutual benefits and
obligations as hereinafter set forth, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Capitalized terms used in this Agreement and
not otherwise defined shall have the meanings given to them in this Section
1.1.
"Accepted Servicing Practices" means, with respect to any Loan or REO
Property, those servicing, collection, resolution or disposition practices that
are undertaken with the same care, skill, prudence and diligence with which
Servicer services and administers mortgage loans or properties hold for other
portfolios similar to the Loan or REO Property, as the case may be, but without
regard to:
1. any relationship that Servicer, any sub-servicer or any affiliate
of Servicer or any sub-servicer may have with the related
Obligor, or
2. Servicer's or any sub-servicer's right to receive compensation
for its services hereunder or with respect to any particular
transaction; or
3. the ownership, or servicing or management for others, by Servicer
or any sub-servicer, of any other mortgage loans or property;
provided, however, that such services are performed in compliance with the
terms of this Agreement.
"Acknowledgment Agreement" means the document, substantially in the
form of Exhibit C, to be executed by Owner and Servicer on or prior to each
Transfer Date.
"Agency Transfer" means the sale or transfer by Owner of some or all
of the Loans to FNMA under its Cash Purchase Program or its MBS Swap Program
(Special Servicing Option) or to FHLMC under its Xxxxxxx Xxx Xxxx Program or
Gold PC Program, retaining Servicer as "servicer thereunder."
"Agreement" means this Servicing Agreement as amended, modified or
supplemented from time to time, including all exhibits and schedules hereto.
"Ancillary Income" means all income (other than interest and
prepayment penalties) from the Loans and REO Properties to which Servicer is
entitled (exclusive of the Servicing Fee), including, without limitation, late
charges, insufficient fund fees, assumption fees, modification fees, fees
associated with any repayment plan or forbearance agreement, fees associated
with any discounted payoff, interest on the Collection Account and Escrow
Accounts (but only to the extent that applicable Requirements or the Loan
Documents do not require that such interest be paid to the applicable Obligor)
and all other incidental fees. Servicer shall be entitled to retain all
Ancillary Income.
"Association" means any homeowners' association or condominium
association.
"Balloon Mortgage Loan" means any Loan that by its original terms or
by virtue of any modification provides for an amortization schedule extending
beyond its originally scheduled Maturity Date.
"Balloon Payment" means, with respect to a Balloon Mortgage Loan as of
any date of determination, the amount outstanding on the Maturity Date of such
Balloon Mortgage Loan in excess of the related Monthly Payment.
"Bankruptcy Code" means 11 U.S.C. 101 et. seq., as the same may be
amended, modified or supplemented from time to time.
"Business Day" means any day other than (a) a Saturday or Sunday or
(b) a day on which banking and savings and loan institutions in the States of
Florida, New York or New Jersey are authorized or obligated by law or executive
order to be closed.
"Collection Account" means the separate account(s) created pursuant to
Section 2.3(a) of this Agreement, which shall be entitled "Ocwen Federal Bank
FSB, as Servicer, in trust for Xxxxxx Capital, A Division of Xxxxxx Brothers
Holdings Inc. and its successors and assigns."
"Collection Period" means with respect to each Distribution Date, the
calendar month prior to the month of the Distribution Date.
"Current Servicer" means Owner or any other servicer, sub-servicer,
document custodian, owner, holder, originator or other Person who, as of the
date of this Agreement, has possession of any document or information
constituting a part of the Servicing File and who was servicing the Loans and
REO Properties prior to the Transfer Date.
"Custodian" means the custodian appointed by the Owner to hold the
Loan Documents.
"Determination Date" means the last day (or if such day is not a
Business Day, the Business Day immediately preceding such day) of the
Collection Period.
"Disposition" means any (a) taking of Mortgaged Property by eminent
domain or condemnation or sale in lieu thereof, (b) the liquidation of a
defaulted Loan through a foreclosure sale, trustee's sale, deed-in-lieu of
foreclosure or otherwise, (c) a sale or assignment of a Loan or REO Property in
accordance with the terms hereof, and/or (d) any other disposition of the Loan
or REO Property whether through a discounted payoff, prepayment, Balloon
Payment or any other similar disposition.
"Distribution Date" means, prior to any Reconstitution, the tenth day
of each month, or if such day is not a Business Day, the next succeeding
Business Day.
"Duff & Xxxxxx" means Duff & Xxxxxx Credit Rating Co.
"Eligible Account": An account maintained with a depository
institution, (i) whose accounts are insured by the FDIC and (ii) whose (or
whose direct or indirect parents) long term unsecured debt obligations are
rated at least "A" or better by one of the Rating Agencies.
"Environmental Liability" shall have the meaning ascribed thereto in
Section 8.3(c).
"Environmental Problem Property" means a Property that is in violation
of any environmental law, rule or regulation.
"Escrow Accounts" means the separate account(s) created pursuant to
Section 2.3(a) of this Agreement, for the payment of taxes, Association dues,
assessments, Hazard Insurance and Mortgage Insurance premiums, ground rents and
similar items which shall be entitled "Ocwen Federal Bank FSB, as Servicer, in
bust for Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc. and its
successors and assigns, and various mortgagors."
"Escrow Payments" means amounts required to be paid for taxes,
Association dues, assessments, Hazard Insurance and Mortgage Insurance
premiums, ground rents and similar items and, any and all other purposes for
which funds are required to be held in escrow.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation or any
successor thereto.
"Fitch" means Fitch Investors Services, L.P.
"Flood Insurance Policy" means an insurance policy insuring against
flood damage to a Mortgaged Property.
"FNMA" means- the Federal National Mortgage Association or any
successor thereto.
"Hazard Insurance" means casualty, fire, hazard, flood, wind,
liability or similar insurance policies relating to a Property.
"HUD" means the United States Department of Housing and Urban
Development.
"Liability" shall have the meaning ascribed thereto in Section 8.2.
"Liquidation Proceeds" means cash received in connection with the
liquidation of defaulted Loans, whether through a Disposition or otherwise, net
of the amount of any broker's fees payable in connection with any sale of a REO
Property (but without any deduction for any legal fees or other costs or
expenses).
"Loan" means a loan, secured by a mortgage or deed of trust on certain
real property, acquired by Owner and for which the servicing is transferred to
Servicer from time to time pursuant to the terms and provisions of Section 2.1;
the term "Loan" shall include Performing Loans and Non-Performing Loans.
"Loan Documents" means the promissory note, mortgage or deed of trust,
assignment of mortgage, intervening assignments of mortgage, title insurance
policy or binder, Mortgage Insurance or guaranty agreement and any other
agreement, instrument or other document evidencing or relating to a Loan and
any other agreement, instrument or other document evidencing ownership of a REO
Property.
"Maturity Date" means, with respect to any Loan as of any date of
determination, the date on which the last payment of principal is due and
payable under the related promissory note.
"Missing Document Report" means the report prepared by Servicer and
delivered to Owner pursuant to Section 6.5.
"Monthly Collection Amount" means, for each Distribution Date, all
amounts actually received into Servicer's lock box during the related
Collection Period with respect to the Loans and REO Properties from whatever
source (other than partial and forbearance payments), amounts representing
accrued taxes and insurance premiums; not yet due and payable to the applicable
taxing authority or insurer, calculated in accordance with the then current
escrow analysis performed by Servicer in accordance with applicable
Requirements.
"Monthly Payment" means with respect to any Loan and any Collection
Period, the scheduled monthly payment of principal and interest, excluding any
Balloon Payment, on such Loan which is payable in such Collection Period.
"Monthly" means the monthly report prepared by Servicer and delivered
to Owner pursuant to Section 6.2.
"Moody's" means Moody's Investor's Service Inc.
"Mortgage Insurance" means any mortgage insurance or guaranty relating
to a Loan issued by a Mortgage Insurer.
"Mortgage Insurer" means the Federal Housing Administration as a
mortgage insurer, the United States Department of Veterans Affairs as a
mortgage guarantor and any issuer of private mortgage insurance.
"Mortgage Loan Remittance Rate" means with respect to each Loan, the
annual rate of interest remitted to Owner, which shall be equal to the interest
rate on the Loan under the Loan Documents minus the annual rate of the
Servicing Fee.
"Mortgaged Property" means the real property securing a Loan.
"Non-Performing Loan" means as of the Determination Date, a Loan for
which any one of the following applies: (a) any Monthly Payment is delinquent
at least three (3) calendar months determined without giving effect to any
grace period permitted by the related Loan Documents; (b) there has been a
material default under the terms and provisions of the Loan Documents, and such
material default is not likely to be cured by Obligor within three (3) calendar
months; (c) as to which Servicer shall have received notice of the foreclosure
(or deed-in-lieu of foreclosure) or proposed foreclosure (or proposed
deed-in-lieu of foreclosure) or exercise of other remedies of any other
mortgage or lien on the Mortgaged Property; (d) as to which the Obligor has
entered into or consented to bankruptcy, appointment of a receiver or
conservator or a similar insolvency or similar proceeding, or the Obligor has
become the subject of a decree or order for such a proceeding which shall have
remained in force undischarged or unstayed for a period of two (2) calendar
months; or (e) as to which the Obligor admits in writing its inability to pay
its debts generally as they become due, files a petition to take advantage of
any applicable insolvency or reorganization statute, makes an assignment for
the benefit of its creditors or voluntarily suspends payments of its
obligations.
"Non-Recoverable Advance" shall have the meaning set forth in Section
2.3(b) below.
"Obligor" means the Person or Persons obligated to make payments of
principal and interest on the Loan, and includes all joint, several or joint
and several obligors and all guarantors other than Mortgage Insurers.
"Officer's Certificate" means a certificate, substantially in the form
of Exhibit E, executed by an officer of the Servicer and delivered to the Owner
on the date hereof.
"Opinion of Counsel" means an opinion of counsel, substantially in the
form of. Exhibit D, delivered to Owner on the date hereof.
"Owner" means Xxxxxx Capital, A Division of Xxxxxx Brothers
Holdings Inc.
"Pass-Through Transfer" means the sale or transfer of some or all of
the Loans by Owner to a trust to be formed as part of a publicly issued or
privately placed mortgage-backed securities transaction.
"Performing Loan" means any Loan which is not a Non-Performing Loan as
of the Determination Date.
"Permitted Loan" means, any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Distribution Date in each month:
(a) direct obligations of, and obligations fully guaranteed by,
the United States of America, FHLMC, FNMA, the Federal Home Loan Banks
or any agency or instrumentality of the United States of America the
obligations of which are backed by the M faith and credit of the
United States of America;
(b) (i) demand and time deposits in, certificates of deposit of,
bankers acceptances issued by, or federal finds sold by, and
depository institution or trust company (including Servicer or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof
and subject to supervision and examination by federal or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company or its ultimate parent has a short-term unsecured
debt rating in one of the two highest available rating categories of
S&P and the highest available rating category of Moody's Investor's
Service Inc. and provided that each such investment has an original
maturity of no more than 365 days, and (ii) any other demand or time
deposit or deposit which is fully insured by the FDIC;
(c) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (a) above and entered into
with a depository institution or trust company (acting as principal)
rated "A" or higher by S&P and rated "A2" or higher by Moody's;
provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (a)
above and must (i) be valued daily at current market price plus
accrued interest, (ii) pursuant to such valuation, be equal, at all
times, to at least 105% of the cash transferred by Servicer in
exchange for such collateral, and (iii) be delivered to Servicer, or
if Servicer is supplying the collateral, an agent for Servicer, in
such a manner as to accomplish perfection of a security interest in
the collateral by possession of certificated securities;
(d) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of
America or any state thereof which has a short-term unsecured debt
rating in the highest available rating category of each of the Rating
Agencies at the time of such investment.
(e) commercial paper having an original maturity of less than 180
days and issued by an institution having a short-term unsecured debt
rating in the highest available rating category of each of the Rating
Agencies at the time of such investment.
(f) a guaranteed investment contract approved by each of the
Rating Agencies and Owner and issued by an insurance company or other
corporation having a short-term unsecured debt rating in the highest
available rating category of each of the Rating Agencies at the time
of such investment;
(g) money market funds having one of the two highest available
rating categories of S&P and the highest available rating category of
Moody's at the time of such investment, which invests only in other
Eligible Investments;
(h) Federal Housing Administration debentures; provided, that any
such investment shall be rated in one of the two highest ratings
categories by each Rating Agency;
(i) FHLMC participation certificates which guaranty timely
payment of principal and interest and senior debt obligations;
(j) Consolidated senior debt obligations of any Federal Home Loan
Banks;
(k) FNMA mortgage-backed securities (other than stripped mortgage
securities which are valued greater than par on the portion of unpaid
principal) and senior debt obligations;
(l) Federal funds, certificates of deposit time deposits, and
bankers' acceptances (having original maturities of not more than 365
days) of any domestic bank, the short-term debt obligations of which
have been rated F-1+ or better by Fitch, A-1+ or better by S&P and P-1
by Moody's; or
(m) Deposits of any bank or savings and loan association (the
long-term deposit rating of which is Baa3 or better by Moody's and BBB
by each of S&P and Fitch) which has combined capital, surplus and
undivided profits of at least $50,000,000 which deposits are insured
by the FDIC and held up to the limits insured by the FDIC;
provided that all instruments described hereunder shall mature at par on or
prior to the next succeeding Distribution Date unless otherwise provided in
this Agreement and that no instrument described hereunder may be purchased at a
price greater than par if such instrument may be prepaid or called at a price
less than its purchase price prior to stated maturity.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, limited liability company,
unincorporated organization or government or agency or political subdivision
thereof.
"Preliminary Servicing Period" means, with respect to any Loan, the
period commencing on the related Transfer Date and ending on the date the Owner
enters into a Reconstitution Agreement which amends or restates the servicing
provisions of this Agreement.
"Prepayment Interest Shortfall Amount" Upon any Reconstitution as set
forth in Article XI hereto, with respect to any Loan that was subject to a
principal prepayment in full during any Collection Period, which principal
prepayment was applied to such Loan prior to such Loan's due date in such
Collection Period, the amount of interest (net the related Servicing Fee) that
would have accrued on the amount of such principal prepayment during the period
commencing on the date as of which such principal prepayment was applied to
such Loan and ending on the day immediately preceding such due date, inclusive.
"Property" means any Mortgaged Property and/or REO Property.
"Property Improvement Expenses" means any costs and expenses for
repairs, replacements or improvements which Servicer deems advisable under the
circumstances, but only to the extent that they:
(a) are paid to Persons who are generally in the business of
providing such goods and services;
(b) are reasonable for the types of goods or services provided in
the geographical area in which such goods or services are provided;
(c) are designed to maintain or improve the value of a Property
but not immediately necessary to operate it; and
(d) are incurred for the purpose of facilitating the sale of the
related Loan or REO Property and maximizing the proceeds thereof,
including but not limited to the following:
(i) cosmetic improvements such as painting and landscaping;
(ii) replacement of items which are obsolete or wearing out
but which may not be dysfunctional; and
(iii) moneys paid to a tenant or buyer for a purpose similar
to a Property Improvement Expense.
"Property Protection Expenses" means the following costs and expenses,
but only to the extent that they are paid to Persons who are generally in the
business of providing such goods and services and are reasonable for the types
of goods or services provided in the geographical area in which such goods or
services are provided:
(a) utility costs;
(b) payments required under service contracts, including but not
limited to service contracts for heating, ventilation and air
conditioning systems, landscape maintenance, pest extermination,
security, model furniture, swimming pool service, trash removal,
answering service and credit checks;
(c) property management fees;
(d) usual and customary leasing and sales brokerage expenses and
commissions;
(e) permits, licenses and registration fees and costs;
(f) any expense necessary in order to prevent or cure a breach
under a lease, contract or agreement including any debt secured by a
lien which is superior or prior to the lien encumbering the Loan, if
the consequences of failure to prevent or cure could, in the sole
judgment of Servicer, have a material adverse effect with respect to a
Loan or Property;
(g) any expense necessary in order to prevent or cure a material
violation of any applicable law, regulation, code or ordinance;
(h) costs and expenses of brokers' price opinions and surveys
incidental to evaluation, leasing and/or sale of the Loans and/or
Properties;
(i) fees and expenses of attorneys, paralegals, surveyors, title
and escrow companies (including, without limitation, costs, fees
and/or expenses for title insurance premiums, title searches, escrow
fees. recording costs and all costs similar or related thereto), costs
incurred to obtain documents or information for the Servicing File,
and any costs and expenses related to the preparation and/or
recor9dation of releases of liens or satisfactions of mortgages (in
whole or in part);
(j) property inspections; and
(k) other such reasonable fees and expenses incurred by Servicer
in connection with the enforcement, collection, foreclosure,
management and operation of the REO Property or the Mortgaged
Property, sales of REO Properties (including, without limitation, the
costs and expenses set forth ` in subsection (i) above and any and all
transfer taxes and other closing costs customarily paid by the seller
in the locale where such sale occurs) and the performance of its
servicing activities.
"Rating Agencies" means, collectively, Duff & Phelps, Fitch, Xxxxx'x
and S&P.
"Reconstitution" means the actions required by Section 11.1 in
connection with a Whole Loan Transfer, Agency Transfer or Pass-Through
Transfer.
"Reconstitution Agreement" The agreement or agreements entered into by
Servicer and Owner and/or certain third parties on the Reconstitution Date or
Dates with respect to any or all of the Loans serviced hereunder, in connection
with an Agency Transfer, a Whole Loan Transfer or a Pass-Through Transfer as
provided in Section 11.1 hereof.
"Reconstitution Date" The date or dates on which any or all of the
Mortgage Loans subject to this Agreement shall be removed from this Agreement
and reconstituted as part of Whole Loan Transfer, Agency Transfer or
Pass-Through Transfer pursuant to Section 11.1 hereof.
"Requirements" means all federal, state or local laws and any other
requirements of any government or agency or instrumentality thereof applicable
to the servicing of the Loans, the management of the REO Properties or the
provision of services hereunder by Servicer.
"REO Property" means, (a) as of any Determination Date for the purpose
of calculating the relevant Servicing Fee, and (b) as of the actual date of
acquisition of title for all other purposes: any (i) real property owned by
Owner and made subject to this Agreement, and (ii) any Mortgaged Property that
was subject to a Loan, after the Mortgaged Property has been acquired on behalf
of Owner pursuant to this Agreement through foreclosure or similar proceedings,
acceptance of deed-in-lieu of foreclosure-, acquisition of title in lieu of
foreclosure or the acquisition-of title by operation of law.
"S&P" means Standard & Poor's Rating Group.
"Servicer" means Ocwen Federal Bank FSB, a federal savings bank, its
successors in interest and permitted assigns.
"Servicer Event of Default" shall have the meaning set forth in
Section 9. 1.
"Servicing Advances" means all amounts advanced by Servicer in payment
of Property Protection Expenses, Escrow Payments and Property Improvement
Expenses.
"Servicing Fee" means, collectively, with respect to any Loan or REO
Property, the servicing fees set forth on the related Acknowledgment Agreement.
"Servicing File" means with respect to each Loan, the Loan Documents
and information (including any servicing tapes, images and conversion reports)
received from the Current Servicer, provided by Owner (including title company
investigations of matters relating to the Loans and the REO Properties), or
obtained through the efforts of Servicer hereunder. To the extent reasonably
practicable the Servicing File will contain copies of the Loan Documents and
information described in Exhibit B hereto.
"Servicing Portfolio" means all Loans and REO Properties serviced by
Servicer pursuant to this Agreement.
"Setup" means, in connection with the transfer of servicing of Loans
and REO Properties to Servicer, the conversion of any data tape from the
Current Servicer, the uploading and quality control review of data, the
uploading of final trial balances, the posting of interim payment activity of
the Loans, the setup of tax, escrow and insurance records, and the management
of the document delivery process.
"Setup Expenses" means the direct out-of-pocket expenses incurred by
Servicer in connection with Setup of a Loan or REO Property, including, without
limitation, title searches, recording fees for powers of attorney and tax
search services.
"Setup Fee" means an initial fee for the Setup of each Loan and/or REO
Property , as set forth on the related Acknowledgment Agreement.
"Transfer Date" means the date on which the servicing of a pool of
Loans and/or REO Properties is transferred from the Current Servicer to the
Servicer and becomes part of the Servicing Portfolio, as evidenced by an
Acknowledgment Agreement, executed in accordance with Section 2.1.
"Whole Loan Transfer" means any sale or transfer of some or all of the
Loans by Owner to a third party, which sale or transfer is not a Pass-Through
Transfer.
Section 1.2 Interpretation of Agreement.
(a) All references in this Agreement to designated Sections,
Articles, Exhibits and Schedules are to the designated sections and
articles of and exhibits and schedules to this Agreement.
(b) Use of the masculine gender is intended to include the
feminine and neuter genders.
(c) The headings and captions used in this Agreement are for
convenience of reference only and do not define, limit or describe the
scope or intent of the provisions of this Agreement
(d) Terms in the singular include the plural and vice versa.
(e) The term "includes" or "including" are intended to be
inclusive rather than exclusive.
ARTICLE II
TRANSFER OF SERVICING, SERVICING RESPONSIBILITIES AND SERVICING COMPENSATION
Section 2.1. Transfer of Servicing Files to Servicer.
(a) The Owner may request that Servicer add a pool of Loans or
REO Properties to the Servicing Portfolio at any time during the term
of this Agreement. Servicer shall have no obligation to accept any
Loans or REO Properties to be added to this Agreement. Within five
Business Days of any request for a pool of Loans and/or REO Properties
to be added, which request shall be accompanied by a description of
the Loans or REO Properties to be transferred and a proposed fee
structure, Servicer shall accept or reject such pool of Loans and/or
REO Properties. If Servicer accepts such pool, then Owner and Servicer
shall execute an Acknowledgment Agreement in the form of Exhibit C
hereto, and the Loans and/or REO Properties shall become a part of the
Servicing Portfolio. On the Transfer Date, Owner shall cause the
Current Servicer to transfer to Servicer the Servicing Files and/or
servicing records necessary to provide current data with respect to
each of the Loans and Properties. Such transfer shall occur in
accordance with such procedures as Owner and Servicer shall mutually
agree upon taking into account the requirements of this Agreement. In
the event that not all of the related Servicing; Files and/or
necessary servicing records are transferred on the applicable Transfer
Date, thereafter, Servicer, at Owner's reasonable expense, payable in
accordance with Section 6.4, shall use its best efforts to cause the
Current Servicer to transfer to Servicer any Servicing Files and/or
servicing records necessary to provide current data with respect to
each Loan and each REO Property which were not transferred to Servicer
on the applicable Transfer Date. Servicer shall transfer and convert
the Servicing Files to Servicer's system as soon as reasonably
possible from the date of receipt by Servicer of the Servicing Files
and such other documents as are reasonably necessary to service the
Loans and REO Properties from the Current Servicer.
(b) As of each Transfer Date, Owner hereby appoints Servicer to
provide and Servicer hereby assumes and accepts responsibility for
providing the services described herein with respect to each Loan and
REO Property; provided, however, that if Servicer is making diligent
efforts to complete and verify the Servicing File because a Servicing
File is not materially complete or contains incorrect information on
the Transfer Date, Servicer shall not be responsible for any failure
to provide any service hereunder, or for any inaction or any action
taken hereunder related to such incompleteness or incorrectness.
(c) To the extent that Owner holds a transferable, life of loan
tax service contract with TransAmerica on a Loan being transferred to
the Servicing Portfolio, Owner shall transfer such contract to
Servicer on the Transfer Date. If no such contract exists, then
Servicer shall obtain such a contract at Owner's sole expense as soon
as reasonably possible after the Transfer Date. Servicer also shall
obtain, at Owner's expense, tax reports for any Loans that are
Non-Performing Loans as of the Transfer Date. The costs of such
contract and tax reports shall be billed to, and paid by, Owner in
accordance with Section 6.4; provided that, to the extent that
Servicer chooses to obtain a life of loan transferable tax contract on
a newly originated Loan from TransAmerica, and the cost of such tax
contract exceeds $50, then Owner will not be responsible for
reimbursing Servicer for any amount over $50.
(d) Prior to the transfer to Servicer of the complete Servicing
File with respect to a Loan, Servicer shall not be responsible for the
payment of Escrow Payments with respect to such Loan unless Servicer
has actual knowledge of the existence, amount and due date of such
obligations, in which case Servicer shall determine in accordance with
Accepted Servicing Practices whether or not to make any Escrow
Payments within five (5) Business Days after it has actual knowledge
of the existence, amount and due date of such obligations. In the case
of property taxes and similar items, Servicer shall be deemed not to
have knowledge of the existence, amount and/or due date of such
obligations until five (5) Business Days after receiving a current
report with respect to the Mortgaged Property from a tax service
retained by Servicer, unless the Current Servicer provided that
information to Servicer as part of the servicing transfer. Servicer
shall be entitled to rely in all respects on any tax service report
and shall have no liability to Owner if a tax sale occurs for which
Servicer (i) received no notice from the applicable taxing authority
and received no information from the Current Servicer that would
indicate that the taxes were delinquent, or (ii) received a report
from a tax service indicating that the taxes were current.
(e) Upon reasonable request by Servicer, Owner shall furnish
Servicer with such limited powers of attorney and other documents
prepared by Servicer and satisfactory in form and substance to Owner
as may be necessary or appropriate to enable Servicer to liquidate,
collect payments against and otherwise service and manage the Loans
and REO Properties in accordance with this Agreement. Additionally,
Servicer may appoint certain designated servicing officers in a
writing to Owner and such designated servicing officers shall be
authorized to act upon behalf of Owner hereunder. Such list (or any
amended list) designating such servicing officers shall be sufficient
so long as it is executed by any officer of Servicer. All documents so
provided to Servicer shall be held in trust by Servicer on behalf of
Owner.
(f) Owner agrees to cooperate fully with Servicer with respect to
all reasonable requests made by Servicer in connection with the
transfer of servicing pursuant to this Section 2.1.
Section 2.2. Release of Loan Documents. From time to time as is
appropriate for the servicing or foreclosure of a Loan or the acquisition of
Mortgaged Properties in lieu of foreclosure or for the making of any claim
against or collection under any Mortgage Insurance policy, Hazard Insurance
policy, other insurance policy, Servicer's fidelity bond, Servicer's errors and
omissions policy, or for purposes of effecting a partial release of any
Mortgaged Property from the lien of the, mortgage or for making any corrections
to the mortgage note or the mortgage or other Loan Documents, Servicer shall
deliver to the Custodian, or, if the Owner is acting as its own custodian, to
the Owner, an officer's certificate of Servicer certifying as to the reason for
such release and designating the Loan Documents requested to be released to
Servicer.
Within days of receipt of the foregoing, Owner shall deliver or cause
Custodian to deliver to Servicer the Loan Documents so requested. Servicer
shall cause the Loan Documents so released to be returned to the Custodian or
Owner, as applicable, when the need therefor by Servicer no longer exists,
unless the Mortgage Loan is liquidated and the proceeds thereof are deposited
in the Collection Account. Upon receipt of an Officer's Certificate of Servicer
stating that such Mortgage Loan was liquidated and the Liquidation Proceeds
were deposited in the Collection Account, the servicing receipt shall be
released by the Custodian or Owner, as applicable, to Servicer.
Servicer shall retain possession of any Loan Documents that have been
released to Servicer by the Custodian or Owner, as applicable, at all times
unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account,
(ii) the Loan Documents have 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 or (iii) Servicer's need therefor no longer exists and
Servicer returns the Loan Documents to the Custodian or Owner, as applicable,
pursuant to the previous paragraph.
Loan Documents held by Servicer are and shall be held in trust by
Servicer for the benefit of Owner as the owner thereof and Servicer's
possession of the Mortgage Loan Documents so retained is at the will of Owner
for the sole purpose of servicing the related Loan, and such retention and
possession by Servicer is in a custodial capacity only. The Loan Documents with
respect to each Loan shall be appropriately marked to clearly reflect the
ownership of such Loan by Owner.
Section 2.3. Servicing Responsibilities.
Subject to Accepted Servicing Practices, Servicer shall have full
power and authority to do or cause to be done any and all things in connection
with such servicing and administration which it may deem necessary or
desirable. Subject to Section 2.1 and in accordance with Accepted Servicing
Practices, in performing its obligations hereunder, Servicer shall comply with
the following with respect to each Loan or REO Property, continuously from the
date hereof until the date each Loan or REO Property ceases to be subject to
this Agreement:
(a) Servicer shall hold all funds received for Owner hereunder in
trust for Owner in a segregated Collection Account in accordance with
all applicable regulations and with a financial institution whose
accounts are insured by the FDIC to the amount available. To the
extent amounts on deposit exceed the FDIC insured limit, then the
Servicer either (1) shall deposit such excess amounts in a separate
Eligible Account or (2) shall invest such excess amounts in Permitted
Investments. The Collection Account shall be maintained with Servicer,
or if it is not maintained with Servicer, then it must be an Eligible
Account Any amounts held in the Collection Account may be, but are not
required to be, invested by Servicer in Permitted Investments. Any
income on the Collection Account shall belong to Servicer and may be
withdrawn therefrom in accordance with Sections 6.2 and 6.3. If losses
are incurred on investments in the Collection Account, Servicer
promptly shall deposit, from its own funds without right to
reimbursement, the full amount of such losses. Servicer shall make
remittances from the Collection Account as provided in Sections 6.2
and 6.3 and is authorized to make withdrawals from the Collection
Account for that purpose and to withdraw funds deposited therein in
error and to clear and terminate the. Collection Account upon
termination of this Agreement Servicer shall hold all funds received
to cover Escrow Payments in connection with the Loans in trust for
Owner, and the related Obligor in a segregated Escrow Account, which
shall be maintained in accordance with all applicable Requirements and
the terms; of the Loan Documents. The Escrow Account shall be
maintained with Servicer, or, if not maintained with Servicer, in an
Eligible Account Servicer shall disburse such funds from the
appropriate Escrow Accounts as necessary or advisable. Servicer shall
also be authorized to hold all partial payments and forbearance
payments in the Escrow Account and shall not be required to deposit
same into the Collection Account nor to remit same to Owner until such
time as Servicer applies such payments to the applicable Loan.
(b) Servicer shall deposit the following collections related to
the Loans and REO Property into the Collection Account within one
Business Day of receipt thereof, provided that Servicer may retain the
Servicing Fee earned per Loan or REO Property solely from the interest
portion of collections related to such Loan or REO Property (including
not only the interest portion of Obligor's payments, but also
recoveries with respect to interest from any Liquidation Proceeds,
proceeds of Hazard Insurance policies or other insurance policies and,
condemnation proceeds):
(i) all payments on account of principal and interest on the
Loans, including any payoffs or curtailments and any prepayment
penalties;
(ii) any amounts received from the seller of a Loan or any
other person giving representations and warranties with respect
to the Loan, in connection with the repurchase of any Loan;
(iii) all Liquidation Proceeds;
(iv) all proceeds of Hazard Insurance policies, Flood
Insurance policies or other insurance policies (other than
proceeds to be held in the Escrow Account and applied to the
restoration and repair of the Property or released to the Obligor
in accordance with the related Loan Documents; and
(v) (v) all condemnation proceeds that are not applied to
the restoration or repair of the Property or released to the
Obligor in accordance with the related Loan Documents.
(c) Servicer shall timely determine the amounts of all required
disbursements from the Escrow Accounts and shall make disbursements as
they become due. Servicer shall also determine whether any delinquency
exists in the payment of Escrow Payments and shall use commercially
reasonable efforts to cause such deficient amounts to be paid by the
Obligor. If there are not sufficient funds in the appropriate Escrow
Account to make such payments as they become due, Servicer shall
advance Escrow Payments unless Servicer determines in its reasonable
judgment that an advance pursuant to this or any other section will
not be ultimately recoverable from late payments, insurance proceeds,
Liquidating Proceeds or any other recovery on such Loan or Property (a
"Non-Recoverable Advance"). If Servicer determines that the Escrow
Payment would constitute a Non-Recoverable Advance, Servicer will not
be obligated to make such advance. Servicer shall notify Owner
promptly in the event it deems any Servicing Advance to be a
Non-Recoverable Advance. Any advances made towards Escrow Payments
shall be deemed to be Servicing Advances, for which Servicer shall be
entitled to reimbursement pursuant to Section 6.2.
(d) Withdrawals from the Escrow Account or Accounts may be made
by Servicer only:
(i) to effect timely payments of Escrow Payments for the
related Loan;
(ii) to reimburse the Servicer for any Servicing Advance
made by the Servicer with respect to a related Loan, but only
from amounts received on the related Loan that represent late
collections of Escrow Payments thereunder;
(iii) to refund to any Obligor any funds found to be in
excess of the amounts required under the terms of the related
Loan;
(iv) for transfer to the Collection Account and application
to reduce the principal balance of the Loan in accordance with
the terms of the related mortgage and mortgage note;
(v) for application to restoration or repair of the
Mortgaged Property;
(vi) to pay to the Servicer, or any Obligor 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; and
(viii) to withdraw funds deposited in error.
With respect to each Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes,
assessments, water rates, sewer rents, and other charges which
are or may become a lien upon the Mortgaged Property and fire and
hazard insurance coverage and shall obtain, from time to time,
all bills for the payment of such charges (including renewal
premiums) and shall effect payment thereof prior to the
applicable penalty or termination date, employing for such
purpose deposits of the Obligor in the Escrow Account which shall
have been estimated and accumulated by the Servicer in amounts
sufficient for such purposes, as allowed under the terms of the
Mortgage. The Servicer assumes full responsibility for the timely
payment of all such bills and, shall effect timely payment of all
such charges irrespective of each Obligor's faithful performance
in the payment of same or the making of the Escrow Payments, and
the Servicer shall make advances from its own funds to effect
such payments (unless Servicer determines, consistent with
Accepted Servicing Practices, that any required advance would be
a Non-Recoverable Advance). With regard to non-escrow Loans, the
Servicer shall use reasonable efforts consistent with Accepted
Servicing Practices to determine that any such payments are made
by the Obligor at the time they first became due and shall insure
that the Mortgaged Property is not lost to a tax lien as a result
of nonpayment and that such mortgage is not left uninsured and
shall make advances from its own funds to effect any such
delinquent payments to avoid the lapse of insurance coverage on
the Mortgaged Property or to avoid the imposition of a tax lien
(unless Servicer determines, consistent with Accepted Servicing
Practices, that any required advance would be a Non-Recoverable
Advance).
(e) Servicer shall comply with the provisions of all
applicable Requirements and the Loan Documents relating to the
giving of all notices or other or required to be given by or on
behalf of Owner to any Mortgage Insurer, tide insurer or other
insurer or guarantor, as applicable. Where any applicable
Requirement or the Loan Documents require any notice or other
communication to be given to an Obligor, Servicer shall, in the
absence of instructions to the contrary from Owner, give such
notice or other communication to the Obligor.
(f) Except as otherwise prescribed by Accepted Servicing
Practices with respect to any Loans which are not first liens on
the related Mortgaged Properties, Servicer shall, as a Property
Protection Expense if not paid by an Obligor, (i) enforce the
Obligor's obligations under the Loan Documents to cause each
Mortgaged Property to be insured against risks, hazards and
liabilities as required by all applicable Requirements and the
Loan Documents, in an amount at least equal to the unpaid
principal balance of the Loan, and (ii) cause each REO Property
to be insured against risks, hazards and liabilities, in an
amount which is at least equal to the lesser of (A) the full
replacement value of the improvements which are a part of such
REO Property, and (B) the outstanding principal balance of the
related Mortgage Loan at the time it became an REO Property; such
insurance shall be obtained from a financially sound and
reputable insurance carrier. Servicer shall retain copies of all
Hazard Insurance policies or certificates of insurance
representing such coverage. Servicer shall comply with all of the
terms of Mortgage Insurance and guarantees relating to any Loan
and shall use its best efforts to maintain such Mortgage
Insurance and guarantees in full force and effect provided that
Servicer has actual knowledge of such insurance or guaranty. In
the event of an insured loss with respect to any REO Property,
Servicer shall promptly file or cause to be filed a claim on the
Hazard Insurance. In the event of an insured loss with respect to
a Mortgaged Property, Servicer shall promptly file or cause to be
filed a claim on the Hazard Insurance unless Servicer has actual
knowledge that the Obligor has filed such a claim. In the case of
a Mortgaged Property, Servicer shall apply or disburse all
insurance proceeds in accordance with the terms and provisions of
the Loan Documents and all Requirements, and, in the case of a
REO Property, Servicer shall apply or disburse all insurance
proceeds in accordance with the instructions of Owner, in each
case net of any amounts due to Servicer as otherwise provided
herein. Servicer shall be responsible for submitting a claim
under any Mortgage Insurance or other guaranty or insurance on a
timely basis provided that Servicer has actual knowledge of such
insurance or guaranty. Except as otherwise prescribed by Accepted
Servicing Practices with respect to any Loans which are not first
liens on the related Mortgaged Properties, Servicer shall, as a
Property Protection Expense and where the Obligor fails or
refuses to maintain insurance on the Mortgaged Property in
accordance with the applicable Loan Documents (or to pay escrows
sufficient therefor, as the case may be), subject the Mortgaged
Properties to the coverage of its "force-placed" hazard insurance
policy with such deductible as Servicer maintains for similar
mortgaged properties serviced for itself and for others by
Servicer. The amount of any premiums to Servicer resulting from
obtaining such coverage shall be treated as a Property Protection
Expense hereunder. The Owner shall be solely responsible for the
amount of the deductible in the event of any loss and Servicer
shall have no liability to Owner therefor.
Subject to the preceding paragraph, Servicer shall keep in
force during the term of this Agreement a fidelity bond and a
policy or policies of insurance covering errors and omissions in
the performance of Servicer's obligations under this Agreement.
Such fidelity bond and policy or policies shall be maintained
with recognized insurers and shall be in such form and amount as
would permit Servicer to be qualified as a FNMA or FHLMC
seller-servicer. Servicer shall be deemed to have complied with
this provision if an affiliate of Servicer has such errors and
omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded
thereunder extends to Servicer.
Servicer shall ensure that Flood Insurance is maintained on
Mortgaged Premises (and REO) that are identified in the Federal
Register by the Federal Emergency Management Agency as having
special flood hazards (and the flood insurance described below
has been made available). Any such Flood Insurance shall meet the
current guidelines of the Federal Insurance Administration and
shall be with a generally acceptable insurance carrier.
The amount of the Flood Insurance Policy shall equal not
less than the least of (i) the lesser of (a) the unpaid principal
balance of the Loan, plus accrued interest and the aggregate of
all Servicing Advances, and (b) the full insurable value of the
Mortgaged Property, but in each case not less than such amount as
is necessary to prevent the mortgagor and/or the mortgagee from
becoming a co-insurer or loss payee, and (ii) the maximum amount
of insurance which was available under the Flood Disaster
Protection Act of 1973.
(g) Servicer shall prepare promptly each report required by
all applicable Requirements including reports to be delivered to
all governmental agencies having jurisdiction over the, servicing
of the Loans and the Escrow Accounts, shall execute such reports
or, if Owner must execute such reports, shall deliver such
reports to Owner for execution prior to the date on which such
reports are due and shall file such reports with the appropriate
Persons. Servicer shall timely prepare and deliver to the
appropriate Persons Internal Revenue Service forms 1098, 1099 and
1099A (or any similar replacement, amended or updated Internal
Revenue Service forms) relating to any Loan for the time period
such Loan has been serviced by Servicer. T he reports to be
provided under this subsection shall cover the period through the
end of the month following the termination of this Agreement or,
in the case of reports to be sent to the Internal Revenue
Service, the end of the calendar year following termination of
the Agreement Servicer shall promptly prepare all reports or
other information required to respond to any inquiry from or give
any necessary instructions to any Mortgage Insurer, provider of
Hazard Insurance or other insurer or guarantor, taxing authority,
tax servicer, Association or the Obligor.
(h) Servicer shall maintain adequate facilities and
experienced staff to carry out its obligations hereunder.
(i) Servicer shall hold and be responsible for responding
promptly and accurately to all reasonable requests from Owner,
the Obligor or other Persons for information relating to a Loan
or REO Property or to the Obligor that Servicer is required or
permitted to disclose to such Person, upon compliance by such
Person of any conditions to the release of such information.
(j) Servicer shall cooperate with Owner in facilitating any
financing or securitization or whole loan transfer of the Loans,
including furnishing such reports and information with -respect
to the Loans or with respect to Servicer as Owner may reasonably
request, and facilitating the transfer of servicing of the Loans
to such entity as Owner may designate in connection with an
Agency Transfer, a Pass-Through Transfer or Whole Loan Transfer
of the Loans. Any and all costs, fees and expenses incurred by
Servicer in connection with the foregoing shall be paid by Owner
pursuant to Section 6.4.
(k) All collections on any Loan, unless the terms of the
Loan specify otherwise, be applied first to accrued unpaid
interest, then to principal then due, and finally to any other
amounts payable under the terms of the Loan.
Section 2.4. Collection and Resolution Activities. Servicer shall be
responsible, continuously from the Transfer Date until the date each Loan
ceases to be subject to this Agreement, for using measures consistent with the
Accepted Servicing Practices to attempt to collect delinquent payments on each
Loan.
Section 2.5. Servicing Compensation. Servicer shall be entitled to the
Setup Fee (as set forth in the related Acknowledgment Agreement) related to a
Loan or REO Property on the related Transfer Date. Owner shall pay the Setup
Fee in accordance with Section 6.4. Servicer shall be entitled each month to
the Servicing Fee. The Servicing Fee shall be prorated for any period of less
than a full calendar month based upon the number of days such Loan was serviced
by Servicer. In addition, Servicer shall be entitled to retain all Ancillary
Income. Servicer shall not be obligated to deposit any Ancillary Income into
the Collection Account. In the event that Servicer deposits into the Collection
Account any Ancillary Income, Servicer may withdraw such amount at any time
from the Collection Account, any provision herein to the contrary
notwithstanding.
ARTICLE III
DEFAULT MANAGEMENT SERVICES
Section 3.1. Default Management Responsibilities. Without limiting the
generality of Section 2.3, Servicer is hereby authorized and empowered by Owner
to take the following actions, without limitation: (i) prepare, execute and
deliver, on behalf of Owner at its expense, any and all financing statements,
continuation statements and other documents or instruments necessary to
maintain the hen on each Mortgaged Property and related collateral; and
modifications, waivers (including, without limitation, waivers of any late
-payment charge in connection with any delinquent payment on a Loan), consents,
amendments, discounted payoff agreements, forbearance agreements, cash
management agreements or consents to or with respect to any documents contained
in the related Servicing File; and any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
instruments comparable to any of the -types of instruments described in this
subsection (i), and (ii) institute and prosecute judicial and non-judicial
foreclosures, suits on promissory notes, indemnities, guaranties or other Loan
Documents, actions for equitable and/or extraordinary relief (including,
without limitation, actions for temporary restraining orders, injunctions, and
appointment of receivers), suits for waste, fraud and any and all other tort,
contractual and/or other claims of whatever nature, and to appear in and file
on behalf of Owner such pleadings or documents as may be necessary or advisable
in any bankruptcy action, state or federal suit or any other action.
Section 3.2. Foreclosure. If Servicer reasonably determines that
foreclosure is appropriate with respect to a Loan (including if it determines
that foreclosure is appropriate in conjunction with or as an alternative to
collection efforts and default management services hereunder), Servicer shall
retain an attorney and supervise the conduct of the foreclosure proceeding. If
the Property is acquired in the foreclosure proceeding, Servicer may acquire
the Property in the name of Owner or its designee, and Servicer shall commence
providing property and disposition services as provided in Section 4.1.
Notwithstanding anything to the contrary contained herein, in the event
Servicer has reasonable cause to believe that a Property is an Environmental
Problem Property as described in Section 4.2 hereof, Servicer shall notify
Owner of the existence of the Environmental Problem Property, describe such
problem, make a recommendation to Owner regarding handling the Property and
carry out the recommendation unless otherwise directed by Owner in writing
within five (5) days after Owner's receipt (or deemed receipt) of such notice
in accordance with the terms and provisions of Section 11.3 below. In no event
will Servicer be required to acquire record title to an Environmental Problem
Property. If Servicer elects to proceed with a foreclosure in accordance with
the laws of the state where the Mortgaged Property is located, Servicer shall
not be required to pursue a deficiency judgment against the related Obligor or
any, other liable party if the laws of the state do not permit such a
deficiency judgment after such foreclosure or if Servicer determines in its
reasonable judgment that the likely recovery if a deficiency judgment is
obtained will not be sufficient to warrant the cost, time, expense and/or
exposure of pursuing the deficiency judgment.
Section 3.3. Deed in Lieu. If Servicer pursues a deed in lieu of
foreclosure pursuant to the authority granted to Servicer by the terms and
provisions of Section 3.1 above, Servicer will retain counsel to prepare
appropriate documentation, execute and deliver such documentation on behalf of
Owner and may enter into an agreement with Obligor regarding payment of any
deficiency. The actions described herein shall be taken by Servicer in
accordance with Accepted Servicing Practices or otherwise with the consent of
Owner. Title to such Property may be taken in the name of Owner or its
designee. Notwithstanding anything to the contrary contained herein, in
connection with a deed in lieu of foreclosure, in the event Servicer has
reasonable cause to believe that a Property is an Environmental Problem
Property as described in Section 4.2 hereof, Servicer shall notify Owner of the
existence of the Environmental Problem Property, describe such problem, make a
recommendation to, Owner regarding handling the Property and carry out the
recommendation unless otherwise directed by Owner in writing within five (5)
days after Owner's receipt (or deemed receipt) of such notice in accordance
with the term and provisions of Section 11.3 below. In no event will Servicer
be required to acquire record tide to an Environmental Problem Property.
Servicer will provide the services described in Section 4.1 with respect to
each Property for which a deed in lieu of foreclosure is received by Servicer.
Section 3.4. Priority; Insurance Claims. Servicer will be responsible
for retaining counsel on behalf of Owner to advise Servicer whether any
proposed relief for the Obligor pursuant to this Section 3.4 will adversely
affect claims against any other Obligor' or the priority of the lien securing
the Loan. Servicer will be responsible for determining that such relief will
not adversely affect any applicable Mortgage Insurance or other guaranty.
Servicer shall consider the effect of such relief on the priority of the lien,
claim against other Obligors and the effect on Mortgage Insurance or other
guarantees in acting hereunder.
Section 3.5. Bankruptcy of Obligor. If Servicer has actual knowledge
that an Obligor is the subject of a proceeding under the Bankruptcy Code or any
other similar law, has made an assignment for the benefit of creditors or has
had a receiver or custodian appointed for its property, Servicer shall retain
an attorney to pursue claim to payment on the Loan and foreclosure on the
Property. If the Property is acquired in an insolvency proceeding, it shall be
acquired in the name of Owner or its designee.
Section 3.6. Discounted Payoffs. In accordance with Section 3.1 and
Accepted Servicing Practices, Servicer may permit the Obligor to pay off a
Non-Performing Loan at less than its unpaid principal balance without obtaining
Owner's approval; provided that if the discounted payoff amount is less than
80% of the market value of the Mortgaged Property (as determined by the
Servicer), then the Servicer shall notify Owner, by telecopy and telephone, of
the proposed discounted payoff. Unless the Servicer receives a written
objection from Owner within three Business Days of the notice, then Owner shall
be deemed to consent to such discounted payoff.
ARTICLE IV
PROPERTY MANAGEMENT AND DISPOSITION SERVICES
Section 0.0.Xxxxxxxx Management and Disposition Responsibilities. With
respect to each REO Property made subject to this Agreement and with respect to
each Mortgaged Property that becomes an REO Property, Servicer shall, in
accordance with Accepted Servicing Practices, provide property and disposition
services with respect to such REO Property, including analysis of sale and
leas' potential of such REO Property, leasing and collection of rents, property
management (including maintenance and repairs to such REO Property to render it
leasable or salable), Escrow Account administration for payment of Escrow
Payments and property sales.
Section 4.2.Environmental Problems. If Servicer hereafter becomes
aware that a Property is an Environmental Problem Property, Servicer will
notify Owner of the existence of the Environmental Problem Property.
Additionally, Servicer shall set forth in such notice a description of such
problem, an estimate of how long the problem has existed (if known to
Servicer), a recommendation to Owner relating to the proposed action regarding
the Environmental Problem Property, and Servicer shall carry out the
recommendation set forth in such notice unless otherwise directed by Owner in
writing within five (5) days after Owner's, receipt (or deemed receipt) of such
notice in accordance with the terms and provisions of Section 11.3 below.
Notwithstanding the foregoing, Servicer shall obtain Owner's written consent to
any expenditures proposed to remediate Environmental Problem Properties or to
defend any claims associated with Environmental Problem Properties if such
expenses, in the aggregate, are expected to exceed $10,000. If Servicer has
reason to believe that a Property is an Environmental Problem Property (e.g.,
Servicer obtains a broker's price opinion which reveals the potential for such
problem), Servicer will not accept a deed-in-lieu of foreclosure upon any such
Property without first obtaining a preliminary environmental investigation for
the Property satisfactory to Owner.
ARTICLE V
STANDARDS FOR CONDUCT
Section 5.1. Standards of Care and Delegation of Duties.
(a) The obligation of Servicer to perform its duties under this
Agreement, including any duty to obtain or verify information, will be
satisfied so long as Servicer acts in a manner consistent, with
Accepted Servicing Practices. Servicer shall not be responsible for
the form, substance, validity, perfection, priority, effectiveness or
enforceability of any documents in the Servicing File on the Transfer
Date or on the date that it obtains such documents from the Current
Servicer.
(b) In the performance of its duties and obligations under this
Agreement, Servicer may act directly or through agents, sub-servicers,
independent counsel, accountants and other independent professional
Persons, or it may delegate the performance of functions and consult
with agents, independent counsel and other independent Persons;
provided, however, that no such delegation shall relieve Servicer from
any of its obligations; hereunder. Additionally, in the event that
Servicer believes that it is unable to comply with the requirements of
Section 5.1(a) with respect to any particular Loan or REO Property as
a result of Servicer's relationship with an Obligor or some other
xxxxx which would cause Servicer to be in violation of Accepted
Servicing Practices, it may enter into a sub-servicing agreement
whereby a, sub-servicer shall perform its duties with respect to such
Loan or REO Property. In such event, so long as such sub-servicer
performs such duties on behalf of Servicer, in accordance with the
other terms and provisions of this Agreement, then Servicer shall be
deemed to be in compliance therewith.
(c) Servicer shall be entitled to rely upon any notice, document,
correspondence, request or directives received by it from Owner that
Servicer believes to be genuine and to have been signed or presented
by an authorized officer or representative of Owner, and shall not be
obligated to inquire as to the authority or power of any Person so
executing or presenting any notice, document, request or directive or
as to the truthfulness of any statements set forth therein.
Section 5.2. Transactions with Related Persons. In carrying out -its
obligations and duties under this Agreement, Servicer may contact with its
affiliates, provided that all Persons with whom Servicer may contract, enter
into with or otherwise deal with, shall be engaged on a commercially reasonable
arm's-length basis and at competitive rates of compensation. Nothing contained
in this Agreement will prevent Servicer or its affiliates from engaging in
other businesses or from acting in a similar capacity for any other Person even
though such Person may engage in business activities similar to those of Owner
or its affiliates.
Section 5.3. Access to Records.
(a) To the extent required by this Agreement, Servicer will
establish and a system of (i) records of operational information
relating to the collection of Loans, the conduct of default management
services and the administration, management, servicing, repair,
maintenance, rental, sale or other disposition of `Loans and REO
Properties and (ii) books and accounts, which shall be maintained in
accordance with customary business practices, of financial information
relating to the Loans and the Properties. Information may be
maintained on a computer or electronic system.
(b) If Owner provides reasonable prior written notice, Owner and
its respective accountants, attorneys, agents or designees may examine
Servicer's books and records relating to the Loans and the REO
Properties during normal business hours of Servicer at Owner's
expense. Such records shall not include any proprietary or
confidential information, as reasonably determined by Servicer. Owner
shall provide to Servicer a copy of any report generated in connection
with any such examination. In addition, Servicer shall provide to
Owner any other information, related to the Loans and Properties,
reasonably requested by Owner.
Section 5.4. Annual Audit. On or before April 30 of each year,
beginning with April 30, 2000, Servicer shall cause a firm of independent
public accountants (who may also render other services to Servicer), which is a
member of the American Institute of Certified Public Accountants, to furnish a
statement to Owner, and to Servicer, to the effect that such firm has examined
certain documents and records for the preceding calendar year (or during the
period from the date of commencement of Servicer's duties hereunder until the
end of such preceding calendar year in the case of the first such certificate)
and that, on the basis of such examination conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers,
such firm is of the opinion that Servicer's overall servicing operations have
been conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers except for such exceptions that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers requires it to
report, in which case such exceptions shall be set forth in such statement.
ARTICLE VI
BILLING OF AND REPORTS TO OWNER
Section 6.1. Property Protection Expenses and Property Improvement
Expenses. To the extent no funds remain on deposit in the Escrow Account to pay
Property Protection Expenses and/or Property Improvement Expenses, Servicer
shall advance such amounts; provided, however, that Servicer shall not be
obligated to make any advance if Servicer determines in its reasonable judgment
that such advance will be a Non-Recoverable Advance. Any advances made towards
Property Protection Expenses and/or Property Improvement Expenses shall be
deemed to be Servicing Advances. As provided in Section 6.2, Servicer shall be
entitled to reimbursement of all such Servicing Advances made pursuant to this
Section 6.1 from all collections on the related Loan that are subsequently
deposited in the Collection Account. To the extent that Servicer has previously
withdrawn funds from the Collection Account funds to pay for third party costs
relating to loan modifications and Servicer thereafter recovers cash from the
Obligor for such amounts, Servicer shall deposit such recovered cash into the
Collection Account.
Section 6.2. Remittances and Monthly Report. Two (2) Business Days
prior to each Distribution Date, Servicer shall submit a Monthly Report by
means of hard copy and computer diskette substantially in the form set forth on
Exhibit A hereto (or in such other form and manner as may be hereafter mutually
agreed upon by Owner and Servicer), showing all collections of interest and
principal (from whatever source) on the Loans and all collections in respect of
the REO Properties (including sale proceeds and rental payments) during the
related Collection Period as well as the amounts, and a detailed description of
all Servicing Advances incurred during the related Collection Period and all
distributions from the Collection Account since the preceding Distribution
Date. On each Distribution Date Servicer shall withdraw the Monthly Collection
Amount from the Collection Account and distribute the amount withdrawn in the
following priority:
(a) to refund to any Obligor any funds determined to be in excess
of the amounts required under the terms of the related Loan Documents;
(b) to the Owner, (i) all payments on account of principal on the
Mortgage Loans or REO Properties, including all principal prepayments
and (ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate; provided, however,
that. upon liquidation of a Loan, any amounts due to Servicer pursuant
to subsection (d) below with respect to such Loan shall be paid prior
to any amounts due pursuant to this subsection (b);
(c) to pay itself all Ancillary Income collected during the
related Collection Period;
(d) to reimburse itself for unpaid Servicing Fees and
unreimbursed Servicing Advances; provided, that Servicer's right to
reimburse itself pursuant to this subclause (d) with, respect to any
Loan or REO Property (i) is limited to related Liquidation Proceeds,
condemnation proceeds, insurance proceeds and such other amounts as
may be collected by Servicer from the Obligor or otherwise relating to
the Loan or REO Property, and (ii) if, after Disposition of such Loan
or REO Property, such amounts are insufficient to satisfy such unpaid
or unreimbursed amounts, then Servicer may seek reimbursement from
Owner (as set forth in Section 6.4 below), it being understood that,
in the case of such reimbursement from the Collection Account,
Servicer's right thereto shall be prior to the rights of Owner.
Amounts payable to Owner shall be paid by wire transfer in immediately
available funds (by 4:00 p.m., eastern time on the day of transfer) to an
account designated by Owner.
With respect to any remittance sent by Servicer after the second
Business Day following the Business Day on which such payment was due, Servicer
shall pay to the Owner interest on any such late payment at an annual rate
equal to the rate of interest as is publicly announced from time to time by
Citibank, N.A., New York, New York, or its successor as its prime lending rate,
plus 30/c, adjusted as of the date of each change, but in no event greater than
the amount permitted by applicable law ("Default Rate"). Such interest shall be
paid by Servicer to the Owner on the date such late payment is made and shall
cover the period commencing with and including the Business Day on which such
payment was due and ending with but excluding the Business Day on which such
payment is made. Such interest shall be remitted along with such late payment
The payment by Servicer of any such interest shall not be deemed an extension
of time for payment or a waiver of any Servicer Event of Default.
Section 6.3. Remittance Upon Termination.
Upon the termination of this Agreement, Servicer shall withdraw all
funds from the Collection Account and shall distribute them as follows:
(a) to refund to any Obligor any funds determined to be in excess
of the amounts required under the terms of the related Loan Documents;
(b) to Owner, and
(c) to reimburse itself for all unpaid Servicing Fees and
Servicing Advances.
Amounts payable to Owner shall be paid by wire transfer in immediately
available funds (by 4:00 p.m., eastern time on the day of transfer) to an
account designated by Owner.
Section 6.4. Billing. Servicer shall submit monthly invoices to Owner
for any expenses incurred by Servicer pursuant to Sections 2.1(a), 2.1(c),
2.3G), 6.5, 11.1 and for any Setup Fees and Setup Expenses. Moreover, upon
Disposition of a Loan or REO Property, if the related Liquidation Proceeds,
insurance proceeds, condemnation proceeds and other amounts collected from the
Obligor or otherwise with respect to the Loan are insufficient to pay or
reimburse Servicer for any of the items payable to Servicer in Section 6.2(d),
or if funds in the Collection Account upon the termination of this Agreement
are insufficient to reimburse Servicer for any items in Section 6.3(c),
Servicer shall submit an invoice for any such amount that remains outstanding.
Owner shall remit to Servicer in immediately available funds all amounts
reflected on any invoice within five (5) days after the date Servicer sends
such notice to Owner. If Owner fails to pay any amount invoiced within ten (10)
days of receipt of the invoice, then Owner shall pay Servicer interest on such
late payment at the Default Rate. Such interest shall be paid by Owner to
Servicer on the date such late payment is made and shall cover the period
commencing with and including the Business Day on which such payment was due
and ending with but excluding the Business Day on which such payment is made.
Such interest shall be remitted along with such late payment. The payment by
Owner of any such interest shall not be deemed an extension of time for payment
On any Distribution Date, if any payment owed under this Section 6.4 is more
than thirty (30) days past due, Servicer is entitled to withdraw the amount
owing from the Collection Account and to pay itself such amount prior to making
any payments to Owner pursuant to Section 6.2. The obligation of Owner to pay
amounts billed by Servicer shall survive any termination of this Agreement.
Section 6.5. Missing Document Report. In addition to the Monthly
Report, Servicer shall provide to Owner a report (the "Missing Document
Report") with respect to a Loan within forty-five (45) days after -the related
Transfer Date, which Missing Document Report shall include a listing (to
Servicer's current, actual knowledge) with respect to each Loan and REO
Property of all missing documents reasonably necessary to service such Loan or
REO Property. For the purposes of this Section 6.5, the phrase "to Servicer's
current, actual knowledge" shall mean that Servicer shall be responsible for
examining the Servicing File presented to Servicer by Owner or the Current
Servicer and verifying that each such Servicing File contains Loan Documents
customary for the type of Loan; Servicer shall have no responsibility for
determining whether there are particular missing documents if the documents
presented to Servicer do not disclose the existence of such missing document.
Owner shall cure, or shall cause the Current Servicer to cure, any such
deficiencies as soon as reasonably possible following receipt of the Missing
Document Report. After Servicer has delivered to Owner the notice referred to
in this Section 6.5, regarding missing documents, Servicer shall not be
responsible for any failure to perform any action related to such Loan to the
extent Servicer is impaired by the absence of such material document(s).
Moreover, if Owner has not cured any document deficiency within 30 days
following receipt of the Missing Document Report, and such document is
reasonably necessary to service such Loan or REO Property, then Servicer may,
but is not obligated to, cure such deficiency. All out-of-pocket expenses
incurred by Servicer in connection with such cure shall be billed to, and paid
by, Owner pursuant to Section 6.4.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of Servicer. Servicer, as
a condition to the consummation of the transactions contemplated hereby, hereby
makes the following representations and warranties to Owner as of the initial
Transfer Date and each subsequent Transfer Date:
(a) Organization and Good Standing; Licensing. Servicer is a
federal savings association duly organized, validly existing and in
good standing under the laws of-the United States of America and has
the power and, authority to own its assets and to transact the
business in which it is currently engaged. Servicer is duly qualified
to do business as a foreign corporation and is in good standing in
each jurisdiction in which the character of the business transacted by
it or properties owned, or leased or serviced by it requires such
qualification (except where there is an appropriate statutory
exemption applicable to Servicer or the failure so to qualify would
not have a material adverse effect on the business, properties, assets
or, financial condition of Servicer).
(b) Authorization: Binding Obligations. Servicer has the power
and authority to make, execute, deliver and perform this Agreement,
including all instruments of transfer to be delivered pursuant to
-this Agreement, and perform all of the transactions contemplated to
be performed by it under this Agreement, and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute
the legal, valid and binding obligation of Servicer enforceable
against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies.
(c) No Consent Required. Servicer is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except such as have been obtained or made or as to which
the failure to obtain or make will not materially adversely affect the
ability of Servicer to perform its obligations hereunder.
(d) No Violations. The execution, delivery and performance of
this Agreement by Servicer will not violate any provision of any
existing law or regulation or any order or decree of any court
applicable to Servicer, except for violations that will not adversely
affect Servicer's ability to perform its obligations hereunder, or the
charter or by-laws of Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which Servicer is
a party or by which Servicer may be bound.
(e) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending
or to the knowledge of Servicer threatened, against Servicer or any of
its properties or with respect to this Agreement, which if adversely
determined, would have a material adverse effect on the transactions
contemplated by this Agreement.
(f) HUD Approved. Servicer is a mortgagee approved by HUD for
servicing pursuant to 24 CFR ss. 202.18. No event has occurred that,
with notice to HUD, would result in a breach of the representation
made in the preceding sentence.
(g) FNMA or FHLMC Approved. Servicer is an approved
seller/servicer for FNMA or FHLMC in good standing. No event has
occurred that would make Servicer unable to comply with FNMA or FHLMC
eligibility requirements, would require notification to FNMA or FHLMC,
or, with notification to FNMA or FHLMC, would result in a breach of
the representation made in the preceding sentence.
Section 7.2. Representations and Warranties of Owner. Owner, as a
condition to the consummation of the transactions contemplated hereby, hereby
makes the following representations and warranties to Servicer as of the
initial Transfer Date and each subsequent Transfer Date:
(a) Organization and Good Standing; Licensing. Owner is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the power and
authority to own its assets and to transact the business in which it
is currently engaged. Owner is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties
owned or leased by it requires such qualification (except where there
is an appropriate statutory exemption applicable to Owner or the
failure so to qualify would not have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of
Owner).
(b) Authorization: Binding Obligations. Owner has the power and
authority to make, execute, deliver and perform this Agreement
(including all instruments of transfer to be delivered pursuant to
this Agreement) and perform all of the transactions contemplated to be
performed by it under this Agreement, and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute
the legal, valid and binding obligation of Owner enforceable in
accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies.
(c) No Consent Required. Owner is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except such as have been obtained or made.
(d) No Violations. The execution, delivery and performance of
this Agreement by Owner will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to
Owner or the articles or by4aws of Owner, or constitute a material
breach of any mortgage, indenture, contract or other agreement to
which Owner is a party or by which Owner may be bound.
(e) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending
or to the knowledge of Owner threatened, against Owner or any of its
properties or with respect to this Agreement, which if adversely
determined would have a material adverse effect on the transactions
contemplated by this Agreement.
(f) Holder of Notes. The Owner is the owner and holder of the
notes evidencing the debt under the Mortgage Loans (with each note
either endorsed in blank or endorsed to Owner), and is the beneficiary
or mortgagee of record of the mortgage or deed of trust securing such
Mortgage Loans.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Liabilities to Obligors. No liability to any Obligor
under any of the Loans or Properties arising out of any act or omission to act
of any servicer, sub-servicer, owner, holder or originator of the Loans or
Properties prior to the Transfer Date is assumed by Servicer under or as a
result of this Agreement and the transactions contemplated hereby and, to the
extent permitted and valid under mandatory provisions of law, Servicer
expressly disclaims such assumption.
Section 8.2. Servicer's Indemnity of Owner. Servicer shall defend and
indemnify of Owner against any and all claims, losses, damages, liabilities,
judgments, penalties, fines, forfeitures, reasonable legal fees and expenses,
and any and all related costs and/or expenses of litigation, administrative
and/or regulatory agency proceedings, and any other costs, fees and expenses,
suffered or incurred by Owner (each, a "Liability') arising out of or resulting
from third party claims or actions that were caused directly by or directly
resulted from a breach of any of Servicer's representations and warranties
contained in this Agreement or the failure of Servicer to perform its duties in
accordance with the terms of this Agreement or Accepted Servicing Practices.
Servicer shall not be liable to Owner, however, with respect to action taken,
or for refraining from taking any action, with respect to any Loan or REO
Property at or in conformity with the direction of Owner (for this purpose, the
terms of this Agreement are directions of Owner), or for any Liability caused
by or resulting from a delay occasioned by Owner's objection to a proposal by
Servicer hereunder, or for any Liability caused by or resulting from Owner's
breach of a representation or warranty herein or for any Liability incurred by
xxxxx of Owner's willful misfeasance, bad faith or negligence in acting or
refraining from acting. In any event, Servicer shall not have any liability or
obligations for any actions of any prior servicer, sub-servicer, originator,
holder or owner, or any successor servicer, of the Loans or Properties.
Section 8.3. Owner's Indemnity of Servicer; Limitation on Liability of
Servicer.
(a) Owner shall defend and indemnify Servicer against any
Liability arising from (i) third party claim or actions that were
caused by or resulted from (A) any actions or omissions in respect of
any Loan or REO Property of any prior servicer, sub-servicer, owner or
originator of a Loan or REO Property, and/or (B) taking any action, or
refraining from taking any action, with respect to any Loan or REO
Property at or in conformity with this Agreement or the direction of
Owner, and/or (ii) any Environmental Liability (as defined in Section
8.3(c) below), (iii) any breach by Owner or Owner's directors,
officers, employees, agents, invitees or representatives of Owner's
obligations under Section 8.3(d) below, and (iv) any Liability
relating to the failure or refusal of Owner or any trustee or
custodian in possession of original Loan Documents to timely provide
to Servicer the originals of any Loan Documents in order to allow
Servicer sufficient time to timely process satisfactions, payoffs and
releases.
(b) Neither Servicer nor any directors, officers, employees or
agents of Servicer shall be liable to Owner for any action taken or
for refraining from taking any action in good faith pursuant to this
Agreement or for errors in judgment; provided, however, that this
provision shall not protect Servicer against any liability directly
and solely caused by Servicer that would otherwise be imposed by
reason of Servicer's willful misfeasance or bad faith in the
performance of or failure to perform duties hereunder. Servicer may
rely in good faith on any document of any kind prima facie properly
executed and submitted to ----- ----- Servicer respecting any matters
arising hereunder and shall not be liable for taking any action or
refraining from taking any action in good faith reliance thereon,
pursuant to this Agreement.
(c) The term "Environmental Liability" shall mean any and all
claims, losses, damages, liabilities, judgments, penalties, fines,
forfeitures, reasonable legal fees and expenses, and any and all
related costs and/or expenses of litigation, administrative and/or
regulatory agency proceedings, and any other costs, fees and expenses,
suffered or incurred by Servicer arising out of or resulting from the
introduction of such materials on any Property before and/or after the
date hereof, including, without limitation, (a) any liability under or
on account of the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq., as the same may be
amended from time to time, and/or any other federal or state
environmental laws, and specifically including, without limitation,
any liability relating to asbestos and asbestos containing materials,
polychlorinated biphenyls, radon gas, petroleum and petroleum
products, urea formaldehyde and any substances classified as being "in
inventory", "usable work in process" or similar classification which
would, if classified as unusable, be included in the foregoing
definition, including the assertion of any lien thereunder, (b) claims
brought by third parties for loss or damage incurred or sustained
subsequent to the date hereof, and (c) liability with respect to any
other matter affecting the Property within the jurisdiction of the
federal Environmental Protection Agency or state environmental
regulatory agencies pursuant to any state laws, and in the regulations
adopted pursuant to any of said laws; provided, however, that the
indemnity for Environmental Liability shall not be effective with
respect to any liability directly and solely caused by Servicer that
would otherwise be imposed by reason of Servicer's willful misfeasance
or bad faith in the performance of or failure to perform duties
hereunder.
(d) It is understood and agreed that during the term of this
Agreement Owner may have access to certain of Servicer's confidential
and proprietary information including, without limitation, Servicer's
computer systems and models, secure web site, investor reporting
systems, default management -systems and procedures, and other
proprietary systems and procedures (the "Confidential Information").
The term "Confidential Information" does not include information which
becomes generally available to the public other than as a result of
disclosure by Owner or its representatives, but shall be deemed to
include the Setup Fee and the Servicing Fees contained herein and any
passwords or identification codes, access codes, modem dial-up numbers
and similar items. The Owner shall keep confidential and shall not
divulge to any party other than an officer or employee of Owner who
has a need-to know, without Servicer's prior written consent, any
Confidential Information. Additionally, Owner shall only permit its
officers and employees to perform procedures on Servicer's system
which are specifically authorized by Servicer. The Confidential
Information shall not be used or duplicated by Owner for any purpose
other than those purposes specified by Servicer. Owner further agrees
that the Confidential Information will not be used by it or its
directors, officers, employees, invitees, agents or representatives,
including, but not limited to outside counsel, in any way detrimental
to Servicer, as determined in the reasonable judgment of Servicer. In
the event that Owner is requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any
Confidential Information, it is agreed that Owner will provide
Servicer with prompt notice of such request(s) so that Servicer may
seek an appropriate protective order and/or waive compliance with the
provisions of this subsection, in Servicer's sole and absolute
discretion. Owner acknowledges that Servicer will incur irreparable
damage if Owner should breach the terms and provisions of this
subsection. Accordingly, if Owner or Owner's directors, officers,
employees, invitees, agents or representatives breaches or threatens
to breach any of the provisions of this subsection, Servicer shall be
entitled, without prejudice, to all the rights and remedies available
to it, including a temporary restraining order and an injunction
restraining any breach of the provisions of this subsection (without
any bond or other security being required therefor).
Section 8.4. Indemnification Procedures. If, for so long as this
Agreement is in effect, a party entitled to indemnification hereunder
("Indemnified Party") has actual notice or knowledge of any claim or loss for
which on by an indemnifying party hereunder ("Indemnifying Party") is asserted,
the Indemnified Party shall give to the Indemnifying Party written notice
within such time as is reasonable under the circumstances, describing such
claim or loss in reasonable detail. In the event that a demand or claim for
indemnification is made hereunder with respect to losses the amount or extent
of which is not yet known or certain, the notice of demand for indemnification
shall so state, and, where practicable, shall include an estimate of the amount
of the losses.
(a) Unless applicable law mandates a cure within a shorter period
of time, the Indemnifying Party shall have 30 calendar days from the
date of receipt by Indemnifying Party of written notice of a breach of
the Indemnifying Party's representations within, which to cure such
breach, or if such breach cannot be cured within 30 days but
Indemnifying Party has commenced efforts to cure, then the
Indemnifying Party shall have 60 calendar days from the date of such
notice to cure such breach. In the event a breach is cured by the
Indemnifying Party, the Indemnifying Party shall execute a written
acknowledgment of the cure in such form as is approved or provided by
the Indemnified Party.
(b) In the case of actual notice of indemnification hereunder
involving any litigation, arbitration or legal proceeding, the
Indemnifying Party shall have responsibility to, and shall employ
counsel acceptable to the Indemnified Party, and shall assume all
expense with respect to, the defense or settlement or such claim;
provided however, that:
(i) the Indemnified Party shall be entitled to participate
in the defense of such claim and to employ counsel at its own
expense to assist in the handling of such claim; and
(ii) the Indemnifying Party shall obtain the prior written
approval of the Indemnified Party before entering into any
settlement of such claim or ceasing to defend against such claim
if, pursuant to or as a result of such settlement or cessation,
(1) injunctive or other relief (excepting the payment of money
damages) would be imposed against any Indemnified Party which
could materially interfere with the business, operations, assets,
conditions (financial or otherwise) or prospects of the
Indemnified Party, or (2) the settlement or cessation shall
result in an indemnification obligation of the Indemnifying Party
that, in the reasonable judgment of the Indemnified Party, cannot
be fulfilled by the Indemnifying Party in accordance with the
terms of this Agreement. If the Indemnifying Party does not
provide to the Indemnified Party, within fifteen (15) days after
receipt of a notice of indemnification, a written acknowledgment
that the Indemnifying Party shall assume responsibility for the
defense or settlement of such claim as provided in this Section
8.4, the Indemnified Party shall have the right to defend and
settle the claim in such manner as it may deem appropriate at the
cost and expense of the Indemnifying Party, and the Indemnifying
Party shall promptly reimburse the Indemnified Party therefor, in
accordance with this Agreement.
Section 8.5. Operation of Indemnities. If any Person has made any
indemnity payments to any other Person pursuant to this Article VII and such
other Person thereafter collects any of such amounts from others, such other
Person will repay such amounts collected, together with any interest collected
thereon. The provisions of this Article VIII shall survive any termination of
this Agreement, the liquidation of any Loan, or the transfer or assignment by
Owner to another Person of any Loan or REO Property or any interest in any Loan
or REO Property or the transfer of the servicing to a successor servicer as
long as the action giving rise to the indemnification shall have occurred
during the period when the Servicer was servicing the related Loan or REO
Property.
ARTICLE IX
DEFAULT
Section 9.1. Events of Default. The following shall constitute
"Servicer Events of Default" hereunder by Servicer:
(a) any failure by Servicer to make any deposit or payment, or to
remit any payment, required to be made under the terms of this
Agreement which continues unremedied for a period of three (3)
Business Days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to
Servicer by Owner-, or
(b) failure on the part of Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the
part of Servicer set forth in this Agreement which continues
unremedied for a period of thirty (30) days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to Servicer by Owner; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or appointing a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against Servicer
and such decree or order shall have remained in force undischarged or
unstayed for a period of sixty (60) days; or
(d) Servicer shall consent to the appointment of a trustee,
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings
of or relating to Servicer or of or relating to all or substantially
all of the property of Servicer, or
(e) Servicer shall admit in writing its inability to pay its
debts, generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations or take any action in furtherance of the
foregoing; or
(f) Servicer assigns or attempts to assign its rights, to the
servicing compensation hereunder or attempts to assign this Agreement
or the servicing responsibilities hereunder without the consent of
Owner except as otherwise expressly permitted by the other terms and
provisions of this Agreement; or
(g) to the extent that Servicer is required to maintain a
license, failure by the Servicer to maintain its license to do
business or service residential mortgage loans in any jurisdiction
where a Mortgaged Property is located, to the extent that the failure
would have a material adverse effect on the Servicer's performance of
its obligations hereunder or the enforceability of any Loan; or
(h) Servicer is neither an approved seller/servicer for FNMA nor
for FHLMC; or
(i) the net worth of the Servicer shall be less than $25,000,000.
Section 9.2. Effect of Transfer. After the effective date of the
termination of servicing duties pursuant to Section 9.1, Section 10.1 or
Section 10.3, Servicer shall have no further obligations hereunder other than
under Article VIII or Article X.
ARTICLE X
TERM
Section 10.1. Term of Agreement.
(a) This Agreement shall terminate upon the distribution of the
final payment or Liquidation Proceeds on the last Loan or REO Property
subject to this Agreement.
(b) If Servicer fails to perform any of its obligations which
would result, after expiration of the applicable notice and cure or
grace period (if applicable), in a Servicer Event of Default
hereunder, Owner may terminate this Agreement by written notice to
Servicer, specifying the effective date of such termination and
instructions with respect to the Servicing Files and Loan Documents.
Servicer shall do all things necessary or appropriate to effect the
purposes of such termination and the transfer of servicing, and
Servicer shall pay all costs and expenses related to the transfer of
servicing. On or after the receipt by Servicer of such written notice,
all authority and power of Servicer under this Agreement, whether with
respect to the Loans or Properties shall terminate effective as of the
date specified in such written notice. If Servicer fails to perform
any of its obligations which would result, after expiration of the
applicable notice and cure or grace period (if applicable), in a
Servicer Event of Default hereunder, Owner may also pursue whatever
rights it may have at law or in equity to damages, including
injunctive relief and specific performance.
(c) Owner may, at its sole option, terminate any rights the
Servicer may have hereunder with respect to one or more of the Loans,
without cause, upon 30 days prior written notice. In the event of a
termination pursuant to this Section 10.1, Owner shall pay to the
Servicer a sum, as liquidated damages, equal to the product of (a)
two, (b) the servicing fee rate, and (c) the aggregate unpaid
principal balance of the Loans for which this Agreement is going to be
terminated as of the last day of the month following receipt of such
notice of termination.
(d) Servicer may, at its sole option and without cause, terminate
this Agreement with respect to the Loans and REO Properties being
serviced hereunder, on or after the date occurring nine months after
the first date above written upon the sending of 180 days' written
notice to Owner.
Section 10.2. Transfers of Servicing. Servicer shall not pledge or
assign this Agreement or its rights to the Servicing Fee or transfer the
servicing hereunder or delegate its rights or duties hereunder without the
prior written approval of Owner.
Section 10.3. Servicer Not to Resign. Servicer shall not resign from
the obligations and duties imposed on Servicer by this Agreement, except (i) as
set forth in Xxxxxxx 00. 0 xxxxx, (xx) by mutual consent of Servicer and Owner,
or (iii) upon the determination that Servicer's duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by
Servicer. Any determination under clause (iii) above shall be evidenced by an
opinion of counsel to such effect delivered to Owner in form and substance
reasonably acceptable to, Owner. No resignation shall become effective until
Owner or its designee shall have assumed Servicer's responsibilities and
obligations hereunder.
Section 10.4. Successor Servicer. If any successor servicer succeeds
to the obligations of Servicer after a termination pursuant to Sections 10.1 or
10.3 above, the successor servicer, to the extent necessary to permit the
successor servicer to carry out the provisions of the terms hereof and without
act or deed on the part of the successor servicer, shall succeed to all of the
rights and obligations of Servicer under any sub-servicing agreement entered
into pursuant to Section 5.1(b). In such event, the successor servicer shall be
deemed to have assumed all of Servicer's interest therein and to have replaced
Servicer as a party to such sub-servicing agreement to the same extent as if
such sub-servicing agreement had been assigned to the successor servicer,
except that Servicer, as applicable, shall not have any liability or obligation
under such sub-servicing agreement in respect of events that occur after such
succession unless so provided in such sub-servicing agreement or unless such
events arise out of actions or events that occurred prior to such succession.
In the event that the successor servicer assumes the servicing obligations of
Servicer, upon request of the successor servicer, Servicer, shall at its own
expense (if the transfer of servicing is occasioned by a Servicer Event of
Default) or at Owner's expense (if the transfer is occasioned by any reason
other than a Servicer Event of Default) deliver to the successor servicer (as
the case may be) all documents and records relating to any sub-servicing
agreement and the Loans then being serviced thereunder and an accounting of
amounts collected and held by it, if any, and will otherwise use its best
efforts to effect the orderly and efficient transfer of any sub-servicing
agreement to the successor servicer.
ARTICLE XI
RECONSTITUTION
Section 11.1. Reconstitution.
(a) Servicer and Owner agree that with respect to some or all of
the Loans, Owner may effect one or more Whole Loan Transfers, one or
more Agency Transfers and/or one- or more Pass-Through Transfers. With
respect to each Whole Loan Transfer, Agency Transfer or Pass-Through
Transfer, as the case may be, entered into by Owner, Servicer agrees:
(1) to cooperate fully with Owner and any prospective purchaser
with respect to all reasonable requests and due diligence
procedures including participating in meetings with rating
agencies, bond insurers and such other parties as Owner shall
designate and participating in meetings with prospective
purchasers of the Loans or interests therein and providing
information reasonably requested by such purchasers;
(2) to execute all Reconstitution Agreements provided that each
of Servicer and Owner is given an opportunity to review and
reasonably negotiate in good faith the content of such documents
not specifically referenced or provided for herein;
(3) to deliver to Owner for inclusion in any prospectus or other
offering material such publicly available information regarding
Servicer, its Loan delinquency, foreclosure and loss experience
and any additional information reasonably requested by Owner,
and to deliver to Owner;
(4) to deliver to Owner and to any Person designated by Owner,
at Owner's expense, such statements and audit letters of
reputable, certified public accountants pertaining to
information provided by Servicer pursuant to clause 3 above as
shall be reasonably requested by Owner,
(5) to deliver to Owner, and to any Person designated by Owner,
such legal documents and in-house Opinions of Counsel as are
customarily delivered by originators or servicers, as the case
may be, and reasonably determined by Owner to be necessary in
connection with Whole Loan Transfers, Agency Transfers or
Pass-Through Transfers;
(6) to cooperate fully with Owner and any prospective purchaser
with respect to the preparation (including, but not limited to,
the endorsement, delivery, assignment, and execution) of Loan
Documents and other related documents, with respect to servicing
requirements reasonably requested by the rating agencies and
credit enhancers;
(7) to negotiate and execute one or more subservicing agreements
between Servicer and any master servicer which is generally
considered to be a prudent master servicer in the secondary
mortgage market, designated by Owner in its sole discretion
after consultation with Servicer and/or one or more custodial
and servicing agreements among Owner, Servicer and a thud party
custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by
Owner in its sole discretion after consultation with Servicer,
in either case for the purpose of pooling the Loans with other
Loans for resale or securitization; and
(8) in connection with any securitization of any Loans, to
execute a pooling and, servicing agreement, which pooling and
servicing agreement may, at Owner's direction, contain
contractual provisions including, but not limited to, a
customary certificate payment delays, servicer advances of
delinquent scheduled, payments of principal and interest through
liquidation (unless deemed non-recoverable) and prepayment
interest shortfalls (to the extent of the monthly servicing fee
payable thereto), servicing representations and warranties which
in form and substance conform to the representations and
warranties in this Agreement and to secondary market standards
for securities backed by Loans similar to the Loans and such
provisions with regard to servicing responsibilities, investor
reporting, segregation and deposit of principal and interest
payments, custody of the Loans, and other covenants as are
required by Owner and one or more nationally recognized rating
agencies which are "mortgage related securities" for the
purposes of the Secondary Mortgage Market Enhancement Act of
1984, unless otherwise mutually agreed. If Owner deems it
advisable at any time to pool the Loans with other Loans for the
purpose of resale or securitization, Servicer agrees to execute
one or more subservicing agreements between itself (as servicer)
and a master servicer designated by Owner at its sole
discretion, and/or one or more servicing agreements among
Servicer (as servicer), Owner and a trustee designated by Owner
at its sole discretion, such agreements in each case
incorporating terms and provisions substantially identical to
those described in the immediately preceding paragraph.
Any and all reasonable costs, fees and expenses incurred by Servicer
in connection with the foregoing shall be reimbursed by Owner after receipt of
an invoice therefor in accordance with Section 6.4; provided that Servicer
shall not be entitled to reimbursement for the fees of Servicer's own legal
counsel in connection with the foregoing. All Loans not sold or transferred
pursuant to a Whole Loan Transfer, Agency Transfer or Pass-Through Transfer
shall be subject to this Agreement and shall continue to be serviced for the
remainder of the Preliminary Servicing Period in accordance with the terms of
this Agreement and with respect thereto this Agreement shall remain in full
force and effect.
(b) Notwithstanding anything contained herein to the contrary, in
connection with (a) a Pass-Through Transfer, or (b) an Agency
Transfer, or (c) a Whole Loan Transfer, Servicer shall deposit in the
Collection Account within one Business Day of receipt, and retain
therein with respect to each principal prepayment in full, the
Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from Servicer's own funds,
without reimbursement therefor up to a maximum amount per month of the
Servicing Fee actually received for such month for the Loans.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Successors and Assigns: No Third Beneficiaries. This
Agreement will inure to the benefit of and- be binding upon the parties hereto
and their successors and assigns. This Agreement is not intended to confer on
any person other than the parties hereto and their successors and assigns any
rights, obligations, remedies or liabilities.
Section 12.2. Choice of Law. This Agreement is made under and shall be
governed by and construed under the laws of Florida.
Section 12.3. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given and received: (a) upon receipt if
delivered personally (unless subject to clause (b)) or if mailed by registered
or certified mail return receipt requested, postage prepaid; (b) at 5:00 p.m.
local time on the business day after dispatch if sent by a nationally
recognized overnight courier, or (c) upon the completion of transmission (which
is confirmed by telephone or by a statement generated by the transmitting
machine) if transmitted by telecopy or other means of facsimile which provides
immediate or near immediate transmission to compatible equipment in the
possession of the recipient in any case to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy number for
a party as will be specified by like notice):
if to Servicer:
Ocwen Federal Bank FSB
The Forum, Suite 1002
0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: Secretary
Facsimile Number: (000) 000-0000
Confirmation Number: (000) 000-0000
If to Owner:
Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.
3 World Financial Center, 8th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Manager, Contract Finance
Facsimile Number: (000) 000-0000
Confirmation Number: (000)000-0000
Any change of address must be in writing.
Section 12.4. Entire Agreement; Amendments; Waivers. This Agreement
constitutes the entire agreement between the parties with respect to the
transactions contemplated hereby and supersedes all prior agreements (or
contemporaneous oral agreements) of the parties with respect thereto. This
Agreement may be amended only in writing signed by the party against whom such
amendment is sought to be enforced. Each of Servicer or Owner may, by written
notice to the other, extend the time for or waive the performance of any of the
obligations of such other hereunder. The waiver by any party hereto of a breach
of this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach. No delay, omission or act by a party shall be deemed a
waiver of such party's rights, powers or remedies. No course of dealing between
the parties hereto shall operate as a waiver of any provision hereof.
Section 12.5. No Joint Venture; Limited A&M. The services provided by
Servicer are in each case those of an independent contractor providing a
service. Nothing contained in this Agreement: (i) shall constitute Servicer and
Owner as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity; (ii) shall be construed to
impose any liability as such on Servicer or Owner or (iii) shall, except as
otherwise expressly provided in this Agreement as to Servicer, constitute a
general or limited agency or be deemed to confer on it any express, implied or
apparent authority to incur any obligation or liability on behalf of the other.
Section 12.6. everabilily; Interpretation. If any provision hereof is
invalid, illegal or unenforceable, the remaining provisions shall not be
affected or impaired thereby. No provision of this Agreement -shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other authority by reason of such party having or being deemed to have
structured, dictated or drafted such provision. The parties hereto acknowledge.
that no other agreement entered into by Servicer for the provision of
servicing, default management services and property management and disposition
services shall be used or referred to in construing the provisions of this
Agreement.
Section 12.7. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
Section 12.8. Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 12.9. Limitation of Damages. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, THE PARTIES AGREE THAT NEITHER PARTY SHALL BE
LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES
WHATSOEVER, WHETHER IN CONTRACT, TORT (INCLUDING' NEGLIGENCE AND STRICT
LIABILITY) OR ANY OTHER LEGAL OR EQUITABLE PRINCIPLE.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto effective as of the date first written above.
OWNER:
XXXXXX CAPITAL, A DIVISION OF XXXXXX BROTHERS
HOLDINGS INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
SERVICER:
OCWEN FEDERAL BANK FSB
By: /s/ Xxxxxxx X.X. Xxxxxxx
-------------------------------------------
Name: Xxxxxxx X.X. Xxxxxxx
Title: Senior Vice President
EXHIBIT A
MONTHLY REPORT
Report Legend
I. Remittance Summary
- distribution of all funds received for the referenced
remittance period
2. Portfolio Summary
- various portfolio statistics
3. Trial Balance Summary (detail - trial balance)
- standard balance -information
4. Cash Collections Summary (detail - cash collections)
- cash collection summarized by transaction code and category
5. Non-Cash Summary (detail - noncash)
- non-cash transactions by category
6. Other Advance Summary (detail - other. advances)
- disbursements of various collection expenses
7. Escrow Advance Summary (detail - escrow advances)
- net disbursements of escrow for which servicer has advanced
funds
8. Payoff Detail
- cash and non-cash collections on paid off loans
9. REO Transfer Detail
- loam transferred to REO
10. Delinquency Summary
- delinquency stratification
11. ARM Detail (detail only - arm)
- ARM data
12. Property Detail (detail only - property)
- property information data
13. Status Detail (detail only - status)
- loan status information data
EXHIBIT B
SERVICING FILE
1. Copy of Note and any riders executed in connection with such Note.
2. Copy of Mortgage or Deed of trust
3. Copy of Mortgagee's Title Policy or Attorney's Title Opinion.
4. Copy of Assignment in blank of the mortgage or deed of tug.
5. Hazard insurance policy.
6. Copy of Mortgage insurance or guaranty agreement, if applicable.
7. Copy of Deed with respect to any REO Property.
8. Any correspondence by and between the Current Servicer and the Obligor.
9. Any broker's price opinion and/or any appraisal relating to the
Property.
10. Original of the tax service contract, if any.
11. Originals of all RESPA and TILA disclosure statements executed by the
Obligor.
12. Settlement Statement
13. Loan Application and credit reports, verification of employment, tax
returns.
14. Documentation relating to any release of collateral.
EXHIBIT C
ACKNOWLEDGMENT AGREEMENT
-------------------------
On this ___ day of _____________, 199_, Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings Inc. (the "Sellee) as the Owner under that certain
Residential Flow Servicing Agreement dated as of August 1, 1999, (the
"Agreement"), does hereby transfer to Ocwen Federal Bank FSB (the -Purchaser-)
as Servicer under the Agreement, the Servicing Rights and servicing
responsibilities related to the Loans listed on the Mortgage Loan Schedule
attached hereto (the "Related Loans') in exchange for the Purchase Price. `The
Purchase Price shall equal the following:
The Purchaser hereby accepts the Servicing Rights and servicing
responsibilities transferred hereby and on the date hereof assumes all
servicing responsibilities related to the Related Loans all in accordance with
the Agreement. The contents of each Servicing File required to be delivered to
service the Loans pursuant to the Agreement have been or shall be delivered to
the Purchaser by the Seller in accordance with the term of the Agreement.
With respect to the Related Loans, the Cut-off Date is ______________,
the Closing Date is ______________, and the Transfer Date is ____________. The
following fees shall apply to the Related Loans:
Servicing Fee:
Setup Fee:
All other terms and conditions of this transaction shall be governed
by the Agreement. Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Agreement. This Acknowledgment Agreement may
be executed simultaneously in any number of counterparts. Each counterpart
shall be deemed to be an original, and all such counterparts shall constitute
one and the same instrument.
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.
SELLER:
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: ----------------------------------
Name: ----------------------------------
Title: ----------------------------------
PURCHASER:
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: ----------------------------------
Name: ----------------------------------
Title: ----------------------------------
FLOW SERVICING RIGHTS PURCHASE AGREEMENT
THIS FLOW AGREEMENT (this "Agreement"), dated as of the 1st day of
August, 1999, by and between OCWEN FEDERAL BANK FSB, a federal savings bank
("Purchaser"), and XXXXXX CAPITAL, A DIVISION OF XXXXXX BROTHERS HOLDINGS INC.,
a Delaware corporation ("Seller").
WHEREAS, on the date hereof, the Seller and the Purchaser have entered
into a flow Residential Servicing Agreement dated substantially of even date
herewith (the "Servicing Agreement").
WHEREAS, the Seller has purchased certain conventional adjustable rate
and fixed rate residential first and second mortgage loans (the "MCA Mortgage
Loans") on a servicing released basis as described herein, pursuant to a
certain Mortgage Loan Purchase and Sale Agreement (the "MCA Purchase
Agreement") by and between Seller and MCA Mortgage, Inc. ("MCA") as provided
herein.
WHEREAS, the Seller has purchased certain conventional adjustable rate
and fixed rate residential first and second mortgage loans (the "Fieldstone
Mortgage Loans") and, together with the MCA Mortgage Loans, the "Initial
Mortgage Loans"), on a servicing released basis as described herein, pursuant
to a certain Purchase and Warranties Agreement (the "Fieldstone Purchase
Agreement") by and between Seller and Fieldstone Mortgage, Inc. ("Fieldstone")
as provided herein.
WHEREAS, the Seller intends to purchase additional conventional
adjustable rate and fixed rate residential first and second lien mortgage loans
(the "Additional Mortgage Loans" and, together with the Initial Mortgage Loans,
the "Mortgage Loans");
WHEREAS, Seller owns the Servicing Rights (as that term is defined in
Paragraph 1(f) below) with respect to the Initial Mortgage Loans and the Seller
will own the Servicing Rights with respect to the Additional Mortgage Loan; and
WHEREAS, Seller desires to sell, from time to time, to the Purchaser,
and the Purchaser desires to purchase, from time to time, from the Seller, in
accordance with the terms and conditions of this Agreement, the Servicing
Rights, with all such sales of Servicing Rights to be evidenced by the
execution of an Acknowledgment Agreement (as defined herein) by Purchaser and
Seller, and
WHEREAS, Purchaser shall be obligated to service the Mortgage Loans in
accordance with the terms and conditions of the Servicing Agreement.
In consideration of the mutual promises, covenants, and conditions
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Servicing Agreement. In
addition, the following terms as used in this Agreement shall have the meanings
assigned to them below:
(a) Acknowledgment Agreement means the document, in the form
of Exhibit B hereto, to be executed by the Seller and Purchaser on or
prior to each Closing Date.
(b) Closing Date means, with respect to the Initial Mortgage
Loans, August 3, 1999, or such later date or dates as are mutually
agreed upon by the parties, and with respect to any pool of Additional
Mortgage Loans, the date or dates set forth on the Acknowledgment
Agreement.
(c) Current Servicer means Seller or any other servicer,
sub-servicer, document custodian, owner, holder, originator or other
Person who, as of the date of this Agreement, has possession of any
document or information constituting a part of the Servicing File.
(d) Cut-off Date means the date on which the purchase price
for the Servicing Rights associated with each Mortgage Loan listed on
the Mortgage Loan Schedule is calculated by Purchaser and Seller. The
Cut-off Date for the Initial Mortgage Loans shall be August 1, 1999,
and the Cut-off Date with respect to any pool of Additional Mortgage
Loans shall be that set forth on the related Acknowledgment Agreement.
(e) Mortgage Loan Schedule means the schedule of Mortgage
Loans setting forth information with respect to such Mortgage Loans
attached as Exhibit A hereto.
(f) Servicing Rights means any and all of the following: (a)
any and all rights to service the Mortgage Loans; (b) any payments to
or monies received by the Seller for servicing the Mortgage Loans; (c)
any late fees, penalties or similar payments with respect to the
Mortgage Loans (other than prepayment penalties); (d) all agreements
or documents creating, defining or evidencing any such servicing
rights to the extent they relate to such servicing rights and all
rights of the Seller thereunder, (e) any interest on Escrow Payments
allowed by law or other similar payments with respect to the Mortgage
Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any
of the, property described in this paragraph; and (g) any and all
documents, files, records, servicing files, servicing documents,
servicing records, data tapes, computer records, or other information
pertaining to the Mortgage Loans or pertaining to the past, present or
prospective servicing of the Mortgage Loans.
(g) Transfer Date means the date on which the Purchaser shall
receive the transfer of servicing responsibilities and begin to
perform the servicing of the Mortgage Loans, and the Seller or its -
designee shall cease all servicing responsibilities. The Transfer Date
for the Initial Mortgage Loans shall be August 15, 1999, and the
Transfer Date for any pool of Additional Mortgage Loans shall be the
date set forth on the Acknowledgment Agreement.
2. Effectuation of Purchase and Sale; Terms and Conditions of
Servicing. Purchaser agrees to purchase from Seller, and Seller agrees to sell,
transfer, assign and deliver to Purchaser, all of Seller's right, title and
interest in and to the Servicing Rights with respect to the Mortgage Loans, it
being understood that no endorsement of mortgage notes or assignments of
mortgages shall be required in connection with this transfer. Such purchase and
sale shall take place on each Closing Date, as evidenced by the execution and
delivery of the Acknowledgement Agreement by the Seller and Purchaser (and, on
the Closing Date for the Initial Mortgage Loans, the execution and delivery of
this Agreement by the Seller and Purchaser), the execution by the Seller and
Purchaser of all related closing documents as set forth in Section 2(a) through
(d) herein, and by the delivery of the Purchase Price by the Purchaser to the
Seller. Purchaser shall assume responsibility for servicing the Mortgage Loans
effective as of each related Transfer Date. Following such transfer of
responsibility on the related Transfer Date, Purchaser shall be responsible for
servicing the Mortgage Loans in accordance with, and the Servicing Rights shall
in all respects be subject to, the terms and conditions of the Servicing
Agreement, until such time that any Mortgage Loans are no. longer subject to
the Servicing Agreement.
(a) On the Initial Closing Date, the Purchaser shall deliver to
the Seller the following:
(1) A fully executed original of this Agreement;
(2) A fully executed original of the Servicing Agreement and
all documents required to be delivered thereunder;
(3) A fully executed original of an Acknowledgment
Agreement;
(4) The Purchase Price for the Servicing Rights related to
the Initial Mortgage Loans; and
(5) An opinion of counsel substantially in the form of
Exhibit D to the Servicing Agreement and an officer's certificate
in the form of Exhibit E to the Servicing Agreement.
(b) On each Closing Date with respect to any Additional Mortgage
Loans, the Purchaser shall deliver to the Seller the following:
(1) A fully executed original of the Acknowledgment
Agreement related to such Additional Mortgage Loans;
(2) The Purchase Price for the Servicing Rights related to
such Additional Mortgage Loans;
(c) On the Closing Date relating to the Initial Mortgage Loans,
the Seller shall deliver to the Purchaser the following:
(1) A fully executed original of this Agreement;
(2) A fully executed original of an Acknowledgment
Agreement; and
(3) A fully executed original of the Servicing Agreement and
all documents required to be delivered thereunder.
(d) On the Closing Date for any Additional Mortgage Loans, the
Purchaser shall deliver to the Seller a fully executed original of an
Acknowledgement Agreement.
3. Purchase Price.
(a) On each Closing Date, Purchaser shall pay to Seller an amount
(the "Purchase Price") set forth on the related Acknowledgment
Agreement in consideration for the Servicing Rights related to the
Mortgage Loans.
(b) The Purchase Price shall be paid by Purchaser by wire
transfer of immediately available funds to an account of Seller
specified by Seller to Purchaser in writing on the related Closing
Date.
4. Seller's Covenants. Seller covenants and agrees with
Purchaser to take the following actions, at Seller's own expense, it being
understood by the parties hereto that the following actions may be undertaken
by Seller's designee:
(a) Prior to each Transfer Date:
(1) Seller shall inform all hazard, flood, earthquake,
private mortgage and any other insurance companies and/or their
agents providing insurance with respect to any related Mortgage
Loan of the transfer and request a change in the loss payee
mortgage endorsement clause to Purchaser's name. With respect to
each related Mortgage Loan that is covered by a force placed
insurance policy, Seller shall cause such policy to be canceled
as of the related Transfer Date, and Purchaser shall cause such
insurance to be provided by its force placed carrier as of such
Transfer Date. On- each Transfer Date, Seller shall provide to
Purchaser a list of all related Mortgage Loans covered by force
placed insurance that will be canceled in connection with the
transfer of the related Servicing Rights to Purchaser.
(2) Seller shall cause its designee to obtain transferable
life-of-loan real estate tax service contracts on all the related
Mortgage Loans to the extent such contracts are not already in
place, and shall assign and transfer all such contacts to
Purchaser at no expense to Purchaser, provided that if Seller is
unable, after using best efforts, to obtain such a contract, then
Purchaser shall have the right to purchase such a contract at the
Seller's cost; provided further that if Purchaser obtains a
TransAmerica tax contract for a newly originated Mortgage Loan,
the Purchaser shall be entitled to reimbursement from the Seller
for no more than $50 for such contract on such Mortgage Loan.
(3) Seller shall, no later than fifteen (15) days prior to
the related Transfer Date, cause its Current Servicer to inform
all Mortgagors of the change in servicer from Seller to Purchaser
by written notice in accordance with applicable law; provided,
however, the content and format of such letters shall have the
prior approval of Purchaser. Seller shall promptly provide
Purchaser with copies of all such notices.
(4) Upon reasonable prior request by Purchaser, Seller shall
permit review by Purchaser of Seller's servicing records and loan
records on the premises of Seller during normal business hours.
(5) Seller shall cause its designee to pay all private
mortgage insurance premium , if any,, and all hazard, flood,
earthquake and other insurance premiums for insurance covering
any of the Mortgage Loans, and real estate taxes for which bills
have been received prior to the Transfer Date on all Mortgage
Loans with impound/escrow accounts, to the extent such premiums
or taxes would be delinquent if unpaid within thirty (30) days
after the Transfer Date. Seller will send to Purchaser, and
Purchaser will pay, any bills received on or after the Transfer
Date and any such bills received prior to the Transfer Date which
Seller is not required to pay pursuant to this subparagraph.
(6) Available computer or like records reflecting the status
of payments, balances and other pertinent information on the
Mortgage Loans as of the Transfer Date (such information shall
include, but not be limited to, comprehensive tax and insurance
information for each Mortgage Loan, identifying payee, payee
address, next payment due date, next amount payable, policy
number/parcel number). Such records shall include magnetic tapes
reflecting all computer files maintained by Seller with respect
to the Mortgage Loans, shall include hard copy trial balance
reports and schedules if requested, and as reasonably required by
Purchaser, to the extent reasonably feasible, shall be in a
format and storage medium acceptable for conversion to
Purchaser's servicing computer system, and shall be delivered no
later than the Transfer Date.
(7) A hard copy of the mortgage loan file for each Mortgage
Loan (the "Loan File") consisting of all documents available to
Seller with respect to such Mortgage Loan, including original
credit files held by Seller, to be delivered on the related
Transfer Date. In addition, upon Purchaser's reasonable request,
Seller shall assist Purchaser in all reasonable respects in
Purchaser's efforts to obtain any additional documents or
information necessary to enable Purchaser to service the Mortgage
Loans properly.
(8) Copies of all investor cut-off or accounting reports
submitted by Seller relating to the Mortgage Loans as of the
related Transfer Date, including a trial balance and reports of
collections, delinquencies, prepayments, curtailments, escrow
payments, escrow balances, partial payments, partial payment
balances and other like information on the Mortgage Loans.
(b) After each Transfer Date, Seller, at Seller's expense, shall
furnish or cause the Current Servicer to furnish, the following to
Purchaser:
(1) Within five (5) Business Days after the Transfer Date,
Seller will deliver to Purchaser reports setting forth all
Mortgage Loan escrow/impound balances as of the Transfer Date,
reporting all unposted payments and unearned fees which are
deemed collected as of the Transfer Date, and including a
reconciliation of such escrow/impound balances.
(2) Within five (5) Business Days after the Transfer Date,
to the extent Mortgage Loan histories are available, Seller will
deliver to Purchaser Mortgage Loan histories in bulk or
electronically.
(3) Seller shall deliver to Purchaser any correspondence
received by Seller relating to the Mortgage Loans after the
Transfer Date, such as tax bills, insurance bills, borrower
letters and the like. Such items shall be forwarded to Purchaser
within five (5) Business Days following the day on which the
correspondence is received by Seller. The correspondence shall be
forwarded to Purchaser via overnight courier for the first thirty
(30) days subsequent to the Transfer Date and via regular mail
thereafter.
(4) Seller shall deliver to Purchaser any payments on the
Mortgage Loans received by Seller from the related Mortgagors for
a period of seventy-five (75) days following the Transfer Date.
Seller shall forward any such payment to Purchaser within two (2)
Business Days after Seller's receipt thereof. Such payments shall
be forwarded to Purchaser via overnight courier for the first
thirty (30) days subsequent to the Transfer Date and via regular
mail for the following thirty (30) days. Thereafter, Seller shall
return to the related Mortgagors any payments on the Mortgage
Loans received by Seller.
(5) Seller shall mail year-end statements reporting interest
income and interest expense . statements to all Mortgagors for
the period from January 1, 1999 through the Transfer Date.
(c) Purchaser shall not be required to assume any representations
and warranties made by Seller to any third party, or made to Seller by
any entity that sold a Mortgage Loan to Seller, relating to the
underwriting, origination or prior servicing of any of the Mortgage
Loans.
5. Purchaser's Covenants. Purchaser covenants and agrees with
Seller to take the following actions:
(a) Loan Set-up on Purchaser's Servicing System. Promptly upon
receipt of the information specified in Paragraph 4(a)(6), Purchaser
shall enter into its servicing system all appropriate information
concerning each of the Mortgage Loans as necessary to enable Purchaser
to service the Mortgage Loans in accordance with the Servicing
Agreement.
(b) Mortgager Notifications. No more than ten (10) calendar days
after the related Transfer Date, Purchaser will send to the Mortgagors
written notice of the transfer of servicing. Purchaser shall include
in such notice all information that is required to be so included in
order to comply with all applicable federal, state or local laws.
(c) Servicing Obligations. From and after the Transfer Date,
Purchaser shall service the Mortgage Loans pursuant to, and in
compliance with, the terms and conditions of the Servicing Agreement
and the related mortgage note for as long as such Mortgage Loans are
subject to the Servicing Agreement.
(d) Form 1098's and 1099's. Purchaser shall prepare and send, in
accordance with the provisions of the Servicing Agreement, Internal
Revenue Service Form 1098's and 1099's with respect to each of the
Mortgage Loans which cover the period commencing with the Transfer
Date.
(e) Establishment of Escrow Accounts. Purchaser shall establish
and maintain all escrow accounts that are to be maintained in
connection with the Mortgage Loans in accordance with the requirements
set forth in the -Servicing Agreement. Purchaser shall fund the newly
established escrow accounts for each Mortgage Loan on the basis of the
escrow account balance information provided by Current Servicer for
that Mortgage Loan pursuant to Paragraphs 4(a)(8) and 4(b)(1) above.
6. Reimbursement of Advances. Within five (5) Business Days
following the transfer and reconciliation of all funds held by Seller with
respect to the Mortgage Loans on which the Servicing Rights are transfered to
Purchaser, Purchaser will reimburse the Seller, or Seller's current servicer
for any unreimbursed delinquency and servicing advances with respect to such
Mortgage Loans that have been properly documented.
7. Payment of Costs. Purchaser and Seller shall each be
responsible for its own expenses in connection with the performance of its
obligations under this Agreement, which include, but are not limited to, its
legal and accounting fees and data processing related costs. Without limiting
the generality of the foregoing, Purchaser shall pay (i) all shipping expenses
for records and files required to be transferred to Purchaser hereunder and
(ii) any third party or governmental transfer fees resulting from the servicing
transfer.
8. Seller's Indemnification; Repurchase.
(a) Seller agrees to indemnify and hold Purchaser harmless from
and against any claims, demands, liabilities, losses, causes of action
or expenses (including, without limitation, reasonable attorneys',
fees) incurred by Purchaser that result from (i) any breach by Seller
of any of its obligations or representations or warranties in this
Agreement, (ii) any material errors or unlawful acts or omissions in
connection with the origination of any Mortgage Loan or in connection
with the servicing of any Mortgage Loan prior to the Transfer Date, or
(iii) Purchaser's inability to service a Mortgage Loan properly to the
extent such inability was due solely to the fact that Seller did not
deliver to Purchaser one or more documents that were reasonably
necessary to enable Purchaser to service such Mortgage Loan properly,
or (iv) any fact is discovered that would constitute a breach of the
Seller's representations and warranties in either Section 10(h) or
10(k) if the knowledge qualifier were not contained therein.
(b) If any fact is discovered that would constitute a material
breach of the Seller's representations and warranties in either
Section 10(h) or 10(k) if the knowledge qualifier were not contained
therein, then the Seller, at the sole option of the Purchaser, shall
repurchase the Servicing Rights of the related Mortgage Loan at the
Purchase Price paid therefor. This obligation to repurchase such
Servicing Rights shall be in addition to the Seller's obligation to
provide indemnification under Section 8(a).
9. Purchaser's Indemnification. Purchaser agrees to indemnify
and hold Seller or Seller's designee harmless from and against any claims,
demands, liabilities, losses, causes of action or expenses (including, without
limitation, reasonable attorneys' fees) incurred by Seller which result from
any breach by Purchaser of any of its obligations or representations in this
Agreement or any third party claim or actions that were caused directly by or
directly resulted from a breach of any of the Purchaser's representations and
warranties contained in this Agreement or the Servicing Agreement or the
failure of the Purchaser to perform its duties in accordance with the terms of
the Servicing Agreement and Accepted Servicing Practices (as defined in the
Servicing Agreement). Notwithstanding anything to the contrary set forth in
this Agreement, Seller acknowledges and agrees that any obligation of the
Purchaser to indemnify Seller shall not apply to the extent that such
obligation arose solely out of the failure by Seller to provide Purchaser with
the information that was reasonably and materially necessary to enable
Purchaser to service the Mortgage Loans properly.
10. Seller's Representations and Warranties. In addition to
Seller's representations and warranties under the Servicing Agreement, and as
an inducement to Purchaser to enter into this Agreement, Seller represents and
wan-ants as follows as of the date hereof and as of each Closing Date and each
Transfer Date:
(a) Seller is a duly organized and validly existing Delaware
corporation in good standing under the laws of such state; and this
Agreement has been duly and validly authorized by all necessary
corporate action on the part of Seller, and is the valid and binding
obligation of Seller; enforceable against Seller in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, and other similar laws relating to creditors'
rights generally and by general principles of equity.
(b) The execution, delivery and performance of this Agreement by
Seller, Seller's compliance with the terms `hereof and consummation of
the transactions, contemplated hereby will not violate, conflict with,
result in a breach of, constitute a default under, be prohibited by or
require any additional approval under, its charter, bylaws, or any
material agreement or other instrument to which Seller is a party or
by which it or any material portion of its property is bound, or any
federal, state or local statute, regulation or ordinance applicable to
Seller, or any order of any federal or state court or regulatory
agency applicable to Seller.
(c) The execution, delivery and performance of this Agreement by
Seller will not result in any violation of any material contract,
instrument or undertaking of Seller or one to which Seller is a party
or by which Seller is bound.
(d) Seller is the owner of and has good and marketable title to
the Servicing Rights and assigns those Servicing Rights to Purchaser
on the Closing Dates free and clear of all liens of any kind, and is
not contractually obligated to sell the Servicing Rights to any party
other than Purchaser.
(e) No finder's fees, commissions or other similar payments are
or will be required to be paid to any person or entity on account of
the transactions contemplated by this Agreement.
(f) Seller knows of no litigation, claim, proceeding or
governmental investigation pending or threatened against Seller,
which, in the opinion of Seller, may materially and adversely affect
Seller's ability to perform its obligations hereunder or under the
Servicing Agreement.
(g) No other authorization or approval of the transfer of
servicing of the Mortgage Loans, other than Seller's agreement herein,
shall be necessary.
(h) To the best of Seller's knowledge, each Mortgage Loan has
been originated and serviced in compliance with all applicable
federal, state and local laws and regulations and consistent with the
requirements of the Servicing Agreement and the terms of the Mortgage
Loans.
(i) All representations and warranties made by, the Seller in the
Servicing Agreement are true and correct in all material respects.
(j) All information provided to Purchaser by Seller in connection
with the sale and transfer of the Servicing Rights to the Purchaser is
true and correct in all material respects.
(k) To the best of Seller's knowledge, all data received by
Purchaser from Seller, whether in an electronic, magnetic or other
machine readable form, which is used or processed by a computer,
computer hardware or infrastructure, software or computer network,
shall be provided in a Year 2000 Compliant Format. For the purposes of
this Agreement "Year 2000 Compliant Format" means that all data is
correctly formatted so that all date-related arithmetic and logical
operations including operations which cross the century boundary will
be correctly read, used or processed, sorted in correct chronological
order, and correctly addresses leap years including, without
limitation the year 2000, as a "leap year."
11. Purchaser's Representations and Warranties. In addition to
Purchaser's representations and warranties under the Servicing Agreement, and
as an inducement to Seller to enter into this Agreement, Purchaser represents
and warrants as follows, as of the date hereof, as of each Closing Date and
each Transfer Date:
(a) Purchaser is duly organized, validly existing and in good
standing as a federally chartered savings bank, and this Agreement has
been duly and validly authorized by all necessary action on the part
of Purchaser, and is the valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, and other similar laws relating to creditors' rights
generally and by general principles of equity.
(b) The execution, delivery and performance of this Agreement by
Purchaser, Purchaser's compliance with the terms hereof and
consummation of the transactions contemplated hereby will not violate,
conflict with, result in a breach of, constitute a default under, be
prohibited by or require any additional approval under, its charter,
bylaws, or any material agreement or other instrument to which
Purchaser is a party or by which it or any material portion of its
property is bound, or any federal, state or local statute, regulation
or ordinance applicable to Purchaser, or any order of any federal or
state court or regulatory agency applicable to Purchaser.
(c) Purchaser satisfies all of the criteria specified in the
Servicing Agreement for eligibility as a servicer and is fully capable
of servicing all of the Mortgage Loans in accordance with the
requirements of the Servicing Agreement.
(d) Purchaser has received all federal, state and local
governmental and regulatory licenses, permits and other authorizations
required in order for it to service the Mortgage Loans in accordance
with the Servicing Agreement
(e) No finder's fees, commissions or other similar payments are
or will be required to be paid to any person or entity on account of
the transactions contemplated by this Agreement.
(f) Purchaser knows of no litigation, claim proceeding or
governmental investigation pending or threatened against Purchaser,
which, in the opinion of Purchaser, may materially and adversely
affect Purchaser's ability to perform its obligations hereunder or
under the agreements or instruments required by this Agreement to be
executed by Purchaser.
12. Miscellaneous.
(a) Counterparts. This Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be
deemed to be an original, and all of which counterparts shall together
constitute but one and the same instrument.
(b) Headings. The headings used throughout this Agreement are
inserted as a matter of convenience only and in no way define or limit
the scope or intent of the provision which follows the heading or any
other provision of this Agreement.
(c) Confidentiality. Seller and Purchaser agree not to disclose
to any third party any non-public information provided to it by the
other party in the course of performance under this Agreement, except
as such disclosure may be required by law.
(d) No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto only. There shall be no third party
beneficiaries hereof, unless the parties hereto mutually agree to
assign or transfer their respective rights under this Agreement.
13. No Solicitation of Borrowers. For as long as Purchaser
services any of the Mortgage Loans hereunder, Seller and Purchaser, covenant
that it will not, and that it will ensure that its affiliates and agents will
not, directly solicit or provide information for any other party to solicit for
prepayment or refinancing of any of the Mortgage Loans by the related
Mortgagors. It is understood that promotions undertaken by Seller or Purchaser
which are directed to the general public at large (such as, for example,
newspaper advertisements and radio or television advertisements) shall not
constitute solicitation as that term is used in this paragraph.
14. Severability. In the event any provision of this Agreement is
inconsistent with or in violation of any applicable state or federal law, the
parties agree that such provision shall be of no force or effect and that this
Agreement shall continue as though said contrary provision was deleted from
this Agreement.
15. Notices. Any notice, demand, or communication which either
party desires or is required to give the other party in connection with this
Agreement shall be in writing and shall be either served personally or sent by
telecopier or prepaid first class United States mail or by overnight courier,
addressed to the applicable parties as follows:
"Seller" Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings, Inc.
3 World Financial Center, 8th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Manager, Contract Finance
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
"Purchaser" Ocwen Federal Bank FSB
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxxx 0000
Xxxx Xxxx Xxxxx, XX 00000
Attention: Secretary
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
16. Amendments. No addendum, supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the
parties hereto.
17. Entire Agreement. This Agreement, including all documents and
Exhibits incorporated by reference herein, constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all other agreements, covenants, representations, warranties,
understandings and communications between the parties, whether written or oral,
with respect to the transactions contemplated by this Agreement.
18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
19. WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO1WS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE
A JUDGE SITTING WITHOUT A JURY.
20. Limitation of Damages. NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, THE PARTIES AGREE THAT NEITHER PARTY SHALL BE LIABLE TO
THE OTHER FOR ANY SPECIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN CONTRACT,
TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER LEGAL OR
EQUITABLE PRINCIPLE.
IN WITNESS WHEREOF, the parties have caused these presents to be
executed by their proper corporate officers this the day and year first above
written.
"Purchaser"
OCWEN FEDERAL BANK FSB
By: /s/ Xxxxxxx X.X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X.X. Xxxxxxx
Title:: Senior Vice President
"Seller"
XXXXXX CAPITAL, A DIVISION OF XXXXXX BROTHERS
HOLDINGS INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
ACKNOWLEDGMENT AGREEMENT
On this ___ day of _______________, 19__, Xxxxxx Capital, A Division
of Xxxxxx Brothers Holdings Inc. (the "Seller") as the Owner under that certain
Servicing Agreement dated as of August 1, 1999, (the "Agreement"), does hereby
transfer to Ocwen Federal Bank FSB (the "Purchaser") as Servicer under the
Agreement, the Servicing Rights and servicing responsibilities related to the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto (the
"Related Mortgage Loans") in exchange for the Purchase Price. The Purchase
Price shall equal:
The Purchaser hereby accepts the Servicing Rights and servicing
responsibilities transferred hereby and on the date hereof assumes all
servicing responsibilities related to the Related Mortgage Loans all in
accordance with the Agreement. The contents of each Servicing File required to
be delivered to service the Mortgage Loans pursuant to the Agreement have been
or shall be delivered to the Purchaser by the Seller in accordance with the
terms of the Agreement.
With respect to the Related Mortgage Loans, the Cut-off Date is
___________, the Closing Date is __________, and the Transfer Date is ________.
The following fees shall apply to the Related Loans:
Servicing Fee:
Setup Fee:
All other terms and conditions of this transaction shall be governed
by the Agreement Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Agreement This Acknowledgment Agreement may
be executed simultaneously in any number of counterparts. Each counterpart
shall be deemed to be an original, and all such counterparts shall constitute
one and the same instrument.
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.
SELLER:
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
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Name:
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Title:
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PURCHASER:
OCWEN FEDERAL BANK FSB
By:
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Name:
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Title:
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