MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT MORGAN STANLEY MORTGAGE CAPITAL INC. Purchaser and WILMINGTON FINANCE INC., Seller Dated as of November 1, 2006 Conventional, Fixed and Adjustable Rate, Prime/Alt-A Residential Mortgage Loans
Exhibit
99.8b
Execution
Copy
____________________
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
Purchaser
and
WILMINGTON
FINANCE INC.,
Seller
____________________
Dated
as
of November 1, 2006
Conventional,
Fixed
and
Adjustable Rate, Prime/Alt-A Residential Mortgage Loans
TABLE
OF
CONTENTS
Page
|
SECTION
1.
|
Definitions.
|
1
|
|
SECTION
2.
|
Agreement
to Purchase.
|
13
|
|
SECTION
3.
|
Mortgage
Schedules.
|
14
|
|
SECTION
4.
|
Purchase
Price.
|
14
|
|
SECTION
5.
|
Examination
of Mortgage Files.
|
15
|
|
SECTION
6.
|
Conveyance
from Sellers to Purchaser.
|
15
|
|
SECTION
7.
|
Servicing
of the Mortgage Loans.
|
17
|
|
SECTION
8.
|
Transfer
of Servicing.
|
19
|
|
SECTION
9.
|
Representations,
Warranties and Covenants of the Seller; Remedies for
Breach.
|
21
|
|
SECTION
10.
|
Closing.
|
41
|
|
SECTION
11.
|
Closing
Documents.
|
41
|
|
SECTION
12.
|
Costs.
|
43
|
|
SECTION
13.
|
Cooperation
of Seller with a Reconstitution.
|
43
|
|
SECTION
14.
|
The
Seller.
|
44
|
|
SECTION
15.
|
Financial
Statements.
|
46
|
|
SECTION
16.
|
Mandatory
Delivery; Grant of Security Interest.
|
46
|
|
SECTION
17.
|
Notices.
|
47
|
|
SECTION
18.
|
Severability
Clause.
|
48
|
|
SECTION
19.
|
Counterparts.
|
48
|
|
SECTION
20.
|
Governing
Law.
|
48
|
|
SECTION
21.
|
Intention
of the Parties.
|
48
|
|
SECTION
22.
|
Successors
and Assigns; Assignment of Purchase Agreement.
|
00
|
-x-
|
XXXXXXX
00.
|
Waivers.
|
49
|
|
SECTION
24.
|
Exhibits.
|
49
|
|
SECTION
25.
|
General
Interpretive Principles.
|
49
|
|
SECTION
26.
|
Reproduction
of Documents.
|
50
|
|
SECTION
27.
|
Further
Agreements.
|
50
|
|
SECTION
28.
|
Recordation
of Assignments of Mortgage.
|
50
|
|
SECTION
29.
|
No
Solicitation
|
50
|
|
SECTION
30.
|
Waiver
of Trial by Jury.
|
51
|
|
SECTION
31.
|
Governing
Law Jurisdiction; Consent to Service of Process.
|
51
|
|
SECTION
32.
|
Confidentiality
|
51
|
|
SECTION
33.
|
Compliance
With Regulation AB.
|
52
|
EXHIBITS
|
EXHIBIT
A
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
B
|
[RESERVED]
|
|
EXHIBIT
C
|
FORM
OF SELLER’S OFFICER’S CERTIFICATE
|
|
EXHIBIT
D
|
[RESERVED]
|
|
EXHIBIT
E
|
FORM
OF SECURITY RELEASE CERTIFICATION
|
|
EXHIBIT
F
|
FORM
OF SECURITY RELEASE CERTIFICATION
|
|
EXHIBIT
G
|
FORM
OF ASSIGNMENT AND CONVEYANCE
AGREEMENT
|
|
EXHIBIT
H
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
I
|
FORM
OF ASSIGNMENT AND RECOGNITION
AGREEMENT
|
-ii-
This
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the “Agreement”), dated
as of November 1, 2006, by and between Xxxxxx Xxxxxxx Mortgage Capital Inc.,
a
New York corporation, having an office at 0000 Xxxxxxxx, 0xx Xxxxx,
Xxx Xxxx,
Xxx Xxxx 00000 (the “Purchaser”) and WILMINGTON FINANCE INC., a Delaware
corporation, having an office at 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Meeting,
Pennsylvania 19462 (the “Seller”).
W I T N E S S E T H:
WHEREAS,
the Seller desires to sell, from time to time, to the Purchaser on a
nonexclusive basis, and the Purchaser desires to purchase, from time to time,
from the Seller, without recourse to the Seller but subject to the terms of
this
Agreement, certain first and second lien, adjustable-rate and fixed-rate
prime/Alt-A residential mortgage loans (the “Mortgage Loans”) on a
servicing released basis as described herein, and which shall be delivered
in
pools of whole loans (each, a “Mortgage Loan Package”) on various dates
as provided herein (each, a “Closing Date”);
WHEREAS,
each Mortgage Loan is secured by a mortgage, deed of trust or other security
instrument creating a first or second lien on a residential dwelling located
in
the jurisdiction indicated on the Mortgage Loan Schedule for the related
Mortgage Loan Package;
WHEREAS,
the Purchaser and the Seller wish to prescribe the manner of the conveyance,
servicing and control of the Mortgage Loans; and
WHEREAS,
following its purchase of the Mortgage Loans from the Seller, the Purchaser
desires to sell some or all of the Mortgage Loans to one or more purchasers
as a
whole loan transfer or a public or private, rated or unrated mortgage
Securitization Transaction;
NOW,
THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller
agree
as follows:
SECTION
1. Definitions.
For
purposes of this Agreement the following capitalized terms shall have the
respective meanings set forth below.
Accepted
Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Act: The
National Housing Act, as amended from time to time.
Adjustable
Rate Mortgage Loan: An adjustable rate Mortgage Loan purchased
pursuant to this Agreement.
Affiliate: With
respect to any specified Person, any other Person controlling or controlled
by
or under common control with such specified Person. For the purposes
of this definition, “control” when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
Agency
Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac
Transfer.
Agreement: This
Mortgage Loan Purchase and Warranties Agreement and all amendments hereof and
supplements hereto.
ALTA: The
American Land Title Association or any successor thereto.
Appraised
Value: The value set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value of the Mortgaged
Property.
Assignment
and Conveyance Agreement: As defined in
Subsection 6.01.
Assignment
of Mortgage: An assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser.
Balloon
Mortgage Loan: Any Mortgage Loan (a) that requires only payments
of interest until the stated maturity date of the Mortgage Loan or (b) for
which
Monthly Payments of principal (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Business
Day: Any day other than (i) a Saturday or Sunday,
(ii) a day on which banking and savings and loan institutions, in the State
of New York or the State in which either Seller’s servicing operations are
located or (iii) the state in which the Custodian’s operations are located,
are authorized or obligated by law or executive order to be closed.
Closing
Date: The date or dates on which the Purchaser from time to time
shall purchase, and the Seller from time to time shall sell, the Mortgage Loans
listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As
of any date and as to any Second Lien Loan, the ratio, expressed as a
percentage, of the (a) sum of (i) the outstanding principal balance of
the Second Lien Loan and (ii) the outstanding principal balance as of such
date of any mortgage loan or mortgage loans that are senior or equal in priority
to the Second Lien Loan and which are secured by the same
-2-
Mortgaged
Property to (b) the Appraised Value as determined pursuant to the
Underwriting Guidelines of the related Mortgaged Property as of the origination
of the Second Lien Loan.
Code: Internal
Revenue Code of 1986, as amended.
Commission: The
United States Securities and Exchange Commission.
Condemnation
Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of
the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Covered
Loan: A Mortgage Loan categorized as Covered pursuant to Appendix
E of Standard & Poor’s Glossary.
Custodial
Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in
effect at any given time, all of the individual Custodial Agreements shall
collectively be referred to as the “Custodial Agreement.”
Custodian:
LaSalle Bank, National Association, a national banking association, and its
successors in interest or any successor to the Custodian under the Custodial
Agreement as therein provided.
Cut-off
Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Deemed
Material and Adverse Representation: Each representation and
warranty identified as such in Subsection 9.02 of this
Agreement.
Deleted
Mortgage Loan: A Mortgage Loan that is repurchased or replaced or
to be replaced with a Qualified Substitute Mortgage Loan by the Seller in
accordance with the terms of this Agreement.
Depositor: The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date: The second Business Day of the month in which the related
Remittance Date occurs.
Due
Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace.
Eligible
Account: Any of (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured
debt
obligations of such holding company) are rated A-1 by Standard & Poor’s or
Prime-1 by Moody’s (or a comparable rating if another Rating Agency
is
-3-
specified
by the Purchaser by written notice to the Seller) at the time any amounts are
held on deposit therein, (ii) an account or accounts the deposits in which
are fully insured by the FDIC, or (iii) a trust account or accounts
maintained with a federal or state chartered depository institution or trust
company acting in its fiduciary capacity.
Escrow
Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Exchange
Act: The Securities Exchange Act of 1934, as
amended.
Xxxxxx
Mae: The Federal National Mortgage Association, or any successor
thereto.
Xxxxxx
Xxx Guides: The Xxxxxx Xxx Xxxxxxx’ Guide and the Xxxxxx Xxx
Servicers’ Guide and all amendments or additions thereto.
Xxxxxx
Mae Transfer: As defined in Section 13.
FHA: The
Federal Housing Administration, an agency within the United States Department
of
Housing and Urban Development, or any successor thereto and including the
Federal Housing Commissioner and the Secretary of Housing and Urban Development
where appropriate under the FHA Regulations.
First
Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch,
Inc., or its successor in interest.
Fixed
Rate Mortgage Loan: A fixed rate mortgage loan purchased pursuant
to this Agreement.
Xxxxxxx
Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Xxxxxxx
Mac Transfer: As defined in Section 13.
Gross
Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which amount
is
added to the Index in accordance with the terms of the related Mortgage Note
to
determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for
such Mortgage Loan.
High
Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 (“HOEPA”), (b) with an “annual
percentage rate” or total “points and fees” payable by the related
Mortgagor (as each such term is calculated under HOEPA) that exceed the
thresholds set forth by HOEPA and its implementing regulations, including 12
C.F.R.
-4-
§
226.32(a)(1)(i) and (ii), (c) classified as a “high cost home,”
“threshold,” “covered,” (excluding New Jersey “Covered Home Loans” as that term
is defined in clause (1) of the definition of that term in the New Jersey
Home Ownership Security Act of 2002 that were originated between November 26,
2003 and July 7, 2004), “high risk home,” “predatory” or similar loan under any
other applicable federal, state or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (d) categorized as High Cost pursuant
to
Appendix E of Standard & Poor’s Glossary. For avoidance of
doubt, the parties agree that this definition shall apply to any law regardless
of whether such law is presently, or in the future becomes, the subject of
judicial review or litigation.
Home
Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor’s Glossary.
HUD: The
Department of Housing and Urban Development, or any federal agency or official
thereof which may from time to time succeed to the functions thereof with regard
to Mortgage Insurance issued by the FHA. The term “HUD,” for
purposes of this Agreement, is also deemed to include subdivisions thereof
such
as the FHA and Government National Mortgage Association.
Index: The
index indicated in the related Mortgage Note for each Adjustable Rate Mortgage
Loan.
Insurance
Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest
Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Interim
Funder: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Investor: With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the investor pursuant to the MERS Procedures Manual.
Lifetime
Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms
of each Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage
Interest Rate at the time of origination of such Adjustable Rate Mortgage Loan
by more than the amount per annum set forth on the related Mortgage Loan
Schedule.
Liquidation
Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee’s sale, foreclosure sale or otherwise or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the
Mortgage Loan.
-5-
Loan
Performance Information: As defined in Subsection
34.03(e).
Loan-to-Value
Ratio or LTV: With respect to any Mortgage Loan, the ratio
(expressed as a percentage) of the outstanding principal amount of the Mortgage
Loan as of the related Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and
(b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Manufactured
Home: A single family residential unit that is constructed in a
factory in sections in accordance with the Federal Manufactured Home
Construction and Safety Standards adopted on July 15, 1976, by the
Department of Housing and Urban Development (“HUD Code”), as amended in 2000,
which preempts state and local building codes. Each unit is
identified by the presence of a HUD Plate/Compliance Certificate
label. The sections are then transported to the site and joined
together and affixed to a pre-built permanent foundation (which satisfies the
manufacturer’s requirements and all state, county, and local building codes and
regulations). The manufactured home is built on a non-removable,
permanent frame chassis that supports the complete unit of walls, floors, and
roof. The underneath part of the home may have running gear (wheels,
axles, and brakes) that enable it to be transported to the permanent
site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as
real estate and taxed accordingly. The permanent foundation may be on
land owned by the mortgager or may be on leased land.
MERS: Mortgage
Electronic Registration Systems, Inc., a Delaware corporation, and its
successors in interest.
MERS
Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take
such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedures Manual and (b) the
Seller has designated or will designate the Purchaser as the Investor on the
MERS System.
MERS
Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS
Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS
System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly
Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.
Moody’s: Xxxxx’x
Investors Service, Inc., and any successor thereto.
Mortgage: The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first lien, in the case of a First Lien Loan, or a second lien, in
the
case of a Second Lien Loan, on the Mortgaged Property.
-6-
Mortgage
File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit A annexed hereto, and any additional documents
required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage
Interest Rate: The annual rate of interest borne on a Mortgage
Note with respect to each Mortgage Loan.
Mortgage
Interest Rate Cap: With respect to an Adjustable Rate Mortgage
Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the
related Mortgage Note.
Mortgage
Loan: An individual Mortgage Loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage
Loan Documents: The documents required to be delivered to the
Custodian pursuant to Subsection 6.03 hereof with respect to any
Mortgage Loan.
Mortgage
Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage
Loan Schedule: The schedule of Mortgage Loans setting forth the
following information with respect to each Mortgage Loan in the related Mortgage
Loan Package: (1) the Seller’s Mortgage Loan identifying number;
(2) the Mortgagor’s name; (3) the street address of the Mortgaged
Property including the city, state and zip code; (4) a code indicating
whether the Mortgagor is self-employed; (5) a code indicating whether the
Mortgaged Property is owner-occupied; (6) the number and type of
residential units constituting the Mortgaged Property; (7) the original
months to maturity or the remaining months to maturity from the related Cut-off
Date, in any case based on the original amortization schedule and, if different,
the maturity expressed in the same manner but based on the actual amortization
schedule; (8) with respect to each First Lien Loan, the Loan-to-Value Ratio
at origination, and with respect to each Second Lien Loan, the CLTV at
origination; (9) the Mortgage Interest Rate as of the related Cut-off Date;
(10) the date on which the Monthly Payment was due on the Mortgage Loan
and, if such date is not consistent with the Due Date currently in effect,
such
Due Date; (11) the stated maturity date; (12) the first payment date;
(13) the amount of the Monthly Payment as of the related Cut-off Date;
(14) the last payment date on which a payment was actually applied to the
outstanding principal balance; (15) the original principal amount of the
Mortgage Loan; (16) the principal balance of the Mortgage Loan as of the
close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (17) delinquency status as of the
related Cut-off Date; (18) with respect to each Adjustable Rate Mortgage
Loan, the Interest Rate Adjustment Date; (19) with respect to each
Adjustable Rate Mortgage Loan, the Gross Margin; (20) with respect to each
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the terms of the
Mortgage Note; (21) with respect to each Adjustable Rate Mortgage Loan, a
code indicating the type of Index; (22) the
-7-
type
of
Mortgage Loan (i.e., Fixed or Adjustable Rate Mortgage Loan, First or Second
Lien Loan); (23) a code indicating the purpose of the loan
(i.e., purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e., full, alternative or
reduced); (25) asset verification (Y/N); (26) the loan credit
classification (as described in the Underwriting Guidelines); (27) whether
such Mortgage Loan provides for a Prepayment Penalty and, if applicable, the
Prepayment Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score); (30) the date of
origination; (31) with respect to Adjustable Rate Mortgage Loans, the
Mortgage Interest Rate adjustment period; (32) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage Interest Rate adjustment percentage;
(33) with respect to each Adjustable Rate Mortgage Loan, the Mortgage
Interest Rate floor; (34) with respect to each Adjustable Rate Mortgage
Loan, the Mortgage Interest Rate Cap as of the first Interest Rate Adjustment
Date; (35) with respect to each Adjustable Rate Mortgage Loan, the Periodic
Rate Cap subsequent to the first Interest Rate Adjustment Date; (36) with
respect to each Adjustable Rate Mortgage Loan, a code indicating whether the
Mortgage Loan provides for negative amortization; (37) with respect to each
Adjustable Rate Mortgage Loan with negative amortization, the negative
amortization limit; (38) a code indicating whether the Mortgage Loan is a
Home Loan; (39) a code indicating whether the Mortgage Loan is a Balloon
Mortgage Loan; (40) the Due Date for the first Monthly Payment;
(41) the original Monthly Payment due; (42) a code indicating the PMI
Policy provider and percentage of coverage, if applicable; (43) Appraised
Value; (44) appraisal type; (45) automated valuation model (AVM);
(46) appraisal date; (47) with respect to the related Mortgagor, the
debt-to-income ratio; (48) whether the Mortgage Loan has Monthly Payments that
are interest-only for a period of time, and the interest-only period, if
applicable (and with respect to each Second Lien Loan, whether the related
first
lien mortgage loan has monthly payments that are interest-only for a period
of
time, and the interest-only period, if applicable); (49) the social security
number of the Mortgagor; (50) a code indicating whether the Mortgagor’s
race and/or ethnicity is (i) native American or Alaskan native,
(ii) Asian/Pacific islander, (iii) African American, (iv) white,
(v) Hispanic or Latino, (vi) other minority, (vii) not provided
by the Mortgagor, (viii) not applicable (if the Mortgagor is an entity) and
(ix) unknown or missing; (51) a description of the Prepayment Penalty, if
applicable, including whether the applicable Prepayment Penalty provision is
“hard” or “soft”; and (52) a code indicating whether the Mortgage Loan is a MERS
Designated Mortgage Loan and the MERS Identification Number, if
applicable. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; (4) the weighted average maturity of the Mortgage Loans;
(5) the applicable Cut-off Date; and (6) the applicable Closing
Date.
Mortgage
Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged
Property: With respect to each Mortgage Loan, the Mortgagor’s
real property securing repayment of a related Mortgage Note, consisting of
an
unsubordinated estate in fee simple or, with respect to real property located
in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, a leasehold estate, in a single parcel or
multiple parcels of real property improved by a Residential
Dwelling.
-8-
Mortgagor: The
obligor on a Mortgage Note.
Officer’s
Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or a President or a Vice President and by the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Seller, and delivered to the Purchaser as required by this
Agreement.
Periodic
Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount
by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan
is the rate set forth as such on the related Mortgage Loan
Schedule.
Person: Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
PMI
Policy: A policy of primary mortgage guaranty insurance issued by
an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is
located.
Preliminary
Mortgage Schedule: As defined in
Section 3.
Prepayment
Penalty: With respect to each Mortgage Loan, the penalty if the
Mortgagor prepays such Mortgage Loan as provided in the related Mortgage Note
or
Mortgage.
Principal
Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Penalty or premium thereon, and which is not accompanied by
an
amount of interest representing scheduled interest due on any date or dates
in
any month or months subsequent to the month of prepayment.
Purchase
Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this
Agreement.
Purchase
Price and Terms Agreement: Those certain agreements setting forth
the general terms and conditions of the transactions consummated herein and
identifying the Mortgage Loans to be purchased from time to time hereunder,
by
and between the Seller and the Purchaser.
Purchaser: Xxxxxx
Xxxxxxx Mortgage Capital Inc., a New York corporation, and its successors in
interest and assigns, or any successor to the Purchaser under this Agreement
as
herein provided.
Qualified
Appraiser: An appraiser, accepted by the Seller, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan made
on
the security thereof, and
-9-
whose
compensation was not affected by the approval or disapproval of the Mortgage
Loan, and such appraiser and the appraisal made by such appraiser both satisfied
the requirements of Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified
Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such Mortgage Loans were originated pursuant to an
agreement between the Seller and such Person that contemplated that such Person
would underwrite mortgage loans from time to time, for sale to the Seller,
in
accordance with underwriting guidelines designated by the Seller (“Designated
Guidelines”) or guidelines that do not vary materially from such Designated
Guidelines; (ii) such Mortgage Loans were in fact underwritten as described
in
clause (i) above and were acquired by the Seller within 180 days after
origination; (iii) either (x) the Designated Guidelines were, at the time such
Mortgage Loans were originated, used by the Seller in origination of mortgage
loans of the same type as the Mortgage Loans for the Seller’s own accounts or
(y) the Designated Guidelines were, at the time such Mortgage Loans were
underwritten, designated by the Seller on a consistent basis for use by lenders
in originating mortgage loans to be purchased by the Seller; and (iv) the Seller
employed, at the time such Mortgage Loans were acquired by the Seller,
pre-purchase or post-purchase quality assurance procedures (which may involve,
among other things, review of a sample of mortgage loans purchased during a
particular time period or through particular channels) designed to ensure that
Persons from which it purchased mortgage loans properly applied the underwriting
criteria designated by the Seller.
Qualified
Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date
of
such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in
the
case of a substitution of more than one mortgage loan for a Deleted Mortgage
Loan, an aggregate principal balance), not in excess of the outstanding
principal balance of the Deleted Mortgage Loan (the amount of any shortfall
will
be remitted to the Purchaser by the Seller in accordance with the terms of
this
Agreement in the month of substitution); (ii) have a Mortgage Interest Rate
not less than and not more than 1% greater than the Mortgage Interest Rate
of
the Deleted Mortgage Loan; (iii) have a remaining term to maturity not
greater than and not more than one year less than that of the Deleted Mortgage
Loan; (iv) be of the same type as the Deleted Mortgage Loan (i.e., fixed
rate or adjustable rate with same Mortgage
Interest Rate Caps); and (v) comply with each representation and warranty
(respecting individual Mortgage Loans) set forth in
Section 9.
Rating
Agency: Any of Fitch, Xxxxx’x or Standard & Poor’s, or their
respective successors designated by the Purchaser.
Reconstitution: A
Whole Loan Transfer or a Securitization Transaction.
Reconstitution
Agreement: As defined in Section 13.
Reconstitution
Date: As defined in Section 13.
-10-
Regulation
AB: Subpart 229.1100 – Asset Backed Securities (Regulation AB),
17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506-1,631 (Jan. 7, 2005)) or by the staff
of
the Commission, or as may be provided by the Commission or its staff from time
to time.
Relief
Act: The Servicemembers’ Civil Relief Act.
REMIC: A
“real estate mortgage investment conduit” within the meaning of
Section 860D of the Code.
REMIC
Provisions: Provisions of the federal income tax law relating to
a REMIC, which appear at Section 860A through 860G of Subchapter M of
Chapter 1, Subtitle A of the Code, and related provisions and
regulations, rulings or pronouncements promulgated thereunder, as the foregoing
may be in effect from time to time.
Remittance
Date: The fifth Business Day of any month, beginning with the
first Remittance Date after the related Closing Date.
Repurchase
Price: With respect to any Mortgage Loan, a price equal to (a)
during the first year immediately following the related Closing Date, an amount
equal to the percentage of par as stated in the related Purchase Price and
Terms
Agreement multiplied by the then outstanding principal balance of such Mortgage
Loan as of the date of such repurchase, plus accrued interest on such Mortgage
Loan at the Mortgage Interest Rate from the date to which interest had last
been
paid through the day immediately preceding the date of such repurchase, plus
the
amount of any outstanding advances owed to any servicer, plus all costs and
expenses incurred by the Purchaser arising out of or based upon such breach,
including without limitation costs and expenses incurred in the enforcement
of
the Seller's repurchase obligation hereunder, (b) during the second year
following the Closing Date, an amount equal to the product of (i) 100% plus
an
amount equal to (A) a fraction, whose numerator is equal to 12 less the number
of months since the first anniversary of the Closing Date and whose denominator
is equal to 12, multiplied by (B) the percentage of par as stated in the related
Purchase Price and Terms Agreement less 100%, multiplied by (ii) the then
outstanding principal balance of such Mortgage Loan as of the date of such
repurchase, plus accrued interest on such Mortgage Loan at the Mortgage
Interest Rate from the date to which interest had last been paid through the
day
immediately preceding the date of such repurchase, plus the amount of any
outstanding advances owed to any servicer, plus all costs and expenses incurred
by the Purchaser arising out of or based upon such breach, including without
limitation costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder, and (c) thereafter, an amount equal to the
then
outstanding principal balance of such Mortgage Loan as of the date of such
repurchase plus accrued interest on such Mortgage Loan at the Mortgage Interest
Rate from the date to which interest had last been paid through the day
immediately preceding the date of such repurchase, plus the amount of any
outstanding advances owed to any servicer, plus all costs and expenses incurred
by the Purchaser arising out of or based upon such breach, including without
limitation costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder.
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Residential
Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a condominium project or (iv) a
one-family dwelling in a planned unit development, none of which is a dwelling
unit in a residential cooperative housing corporation, mobile home or
Manufactured Home.
RESPA: Real
Estate Settlement Procedures Act, as amended from time to time.
Second
Lien Loan: A Mortgage Loan secured by a second lien Mortgage on
the related Mortgaged Property.
Securities
Act: The Securities Act of 1933, as amended.
Securitization
Transaction: Any transaction involving either (1) a sale or other
transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all
of
the Mortgage Loans.
Seller: As
defined in the initial paragraph of the Agreement, together with its successors
in interest.
Sellers: As
defined in the initial paragraph of the Agreement.
Seller
Information: As defined in Subsection 33.04(a).
Servicing
File: With respect to each Mortgage Loan, the file retained by
the Seller consisting of originals of all documents in the Mortgage File which
are not delivered to the Purchaser or the Custodian and copies of the Mortgage
Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing
Representations and Warranties: The representations and warranties set forth
in Subsection 9.02(a), (f), (h), (ii), (ll), (mm) and (qq).
Servicing
Rights: 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; (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) Escrow Payments 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.
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Sponsor: The
sponsor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Standard
& Poor’s: Standard & Poor’s Ratings Services, a division
of The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard &
Poor’s Glossary: The Standard & Poor’s LEVELS® Glossary,
as may be
in effect from time to time.
Static
Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor
Servicer: Any servicer of one or more Mortgage Loans designated
by the Purchaser as being entitled to the benefits of the indemnifications
set
forth in Subsections 9.03 and 14.01.
Stated
Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the
related Cut-off Date after giving effect to payments of principal due on or
before such date, to the extent actually received, minus (ii) all amounts
previously distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal on such Mortgage
Loan.
Third-Party
Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Seller.
Transfer
Date: The date on which the Purchaser, or its designee, shall
receive the transfer of servicing responsibilities and begin to perform the
servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing
responsibilities. Such date shall occur on the day indicated by the
Purchaser to the Seller in the related Purchase Price and Terms
Agreement.
Underwriting
Guidelines: The underwriting guidelines of the Seller, a copy of
which is attached as an exhibit to the related Assignment and
Conveyance.
Whole
Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION
2. Agreement to
Purchase.
The
Seller agrees to sell from time to time on a nonexclusive basis, and the
Purchaser agrees to purchase from time to time without recourse to the Seller
but subject to the representations and warranties and terms contained in this
Agreement, Mortgage Loans having an aggregate principal balance on the related
Cut-off Date in an amount as set forth in the related Purchase Price and Terms
Agreement, or in such other amount as agreed by the Purchaser and the Seller
as
evidenced by the actual aggregate principal balance of the Mortgage Loans
accepted by the Purchaser on each Closing Date.
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SECTION
3. Mortgage
Schedules.
The
Seller from time to time shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on
each
Closing Date in accordance with the related Purchase Price and Terms Agreement
and this Agreement (each, a “Preliminary Mortgage
Schedule”).
The
Seller shall deliver the related Mortgage Loan Schedule for the Mortgage Loans
to be purchased on a particular Closing Date to the Purchaser at least five
(5)
Business Days prior to the related Closing Date. The related Mortgage
Loan Schedule shall be the related Preliminary Mortgage Schedule with those
Mortgage Loans which have not been funded prior to the related Closing Date
deleted.
SECTION
4. Purchase
Price.
The
Purchase Price for each Mortgage Loan shall be the percentage of par as stated
in the related Purchase Price and Terms Agreement (subject to adjustment as
provided therein), multiplied by the aggregate principal balance, as of the
related Cut-off Date, of the Mortgage Loans listed on the related Mortgage
Loan
Schedule, after application of scheduled payments of principal due on or before
the related Cut-off Date, but only to the extent such payments were actually
received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed
as
of the related Cut-off Date. If so provided in the related Purchase
Price and Terms Agreement, portions of the Mortgage Loans shall be priced
separately.
In
addition to the Purchase Price as described above, the Purchaser shall pay
to
the Seller, at closing, accrued interest on the current principal amount of
the
related Mortgage Loans as of the related Cut-off Date at the weighted average
Mortgage Interest Rate of those Mortgage Loans. The Purchase Price
plus accrued interest as set forth in the preceding paragraph
shall be paid to the Seller by wire transfer of immediately available funds
to
an account designated by the Seller in writing.
The
Purchaser shall be entitled to (1) all scheduled principal due after the
related Cut-off Date, (2) all other recoveries of principal collected on or
after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans (minus that portion of any such payment which is allocable to
the
period prior to the related Cut-off Date). The outstanding principal
balance of each Mortgage Loan as of the related Cut-off Date is determined
after
application of payments of principal due on or before the related Cut-off Date,
to the extent actually collected, together with any unscheduled principal
prepayments collected prior to such Cut-off Date; provided, however, that
payments of scheduled principal and interest paid prior to such Cut-off date,
but to be applied on a Due Date beyond the related Cut-off Date shall not be
applied to the principal balance as of the related Cut-off Date. Such
prepaid amounts shall be the property of the Purchaser and shall be remitted
by
the Seller to the Purchaser on the next Remittance Date.
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SECTION
5. Examination of
Mortgage Files.
At
least
ten (10) Business Days prior to the related Closing Date, the Seller shall
(a) deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to each Mortgage
Loan, or (b) make the related Mortgage File available to the Purchaser for
examination at the Seller’s place of business in Plymouth Meeting,
Pennsylvania. Such examination may be made by the Purchaser or its
designee at any reasonable time before or after the related Closing
Date. If the Purchaser makes such examination prior to the related
Closing Date and reasonably determines, in good faith, that any Mortgage Loans
are unacceptable to the Purchaser for any reason, such Mortgage Loans shall
be
deleted from the related Mortgage Loan Schedule, and may be replaced, at the
Seller’s option, by a Qualified Substitute Mortgage Loan (or Loans) acceptable
to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting
any
partial or complete examination. The fact that the Purchaser or its
designee has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the Purchaser’s (or any of
its successor’s) rights to demand repurchase, substitution or other relief as
provided herein.
SECTION
6. Conveyance from
Sellers to Purchaser.
Subsection
6.01 Conveyance of Mortgage
Loans.
The
Seller shall execute and deliver an Assignment and Conveyance Agreement in
the
form attached hereto as Exhibit G (the “Assignment and Conveyance
Agreement”). The Seller shall cause the Servicing File retained
by the Seller pursuant to this Agreement to be appropriately identified in
the
Seller’s computer system and/or books and records, as appropriate, to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The
Seller shall release from their custody the contents of any Servicing File
retained by it only in accordance with this Agreement.
Subsection
6.02 Books
and Records.
Record
title to each Mortgage and the related Mortgage Note as of the related Closing
Date shall be in the name of the Seller, an Affiliate of the Seller, the
Purchaser or one or more designees of the Purchaser, as the Purchaser shall
select; provided, however, that if a Mortgage has been
recorded in the name of MERS or its designee, the Seller is shown as the owner
of the related Mortgage Loan on the records of MERS for purposes of the system
of recording transfers of beneficial ownership of mortgages maintained by
MERS. Notwithstanding the foregoing, each Mortgage and related
Mortgage Note shall be possessed solely by the Purchaser or the appropriate
designee of the Purchaser, as the case may be. All rights arising out
of the Mortgage Loans including, but not limited to, all funds received by
the
Seller after the related Cut-off Date on or in connection with a Mortgage Loan
shall be vested in the Purchaser or one or more designees of the Purchaser;
provided, however, that all funds received on or in connection
with a Mortgage Loan shall be received and held by the Seller in trust for
the
benefit of the Purchaser or the appropriate designee of the Purchaser, as the
case may be, as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
-15-
The
Seller shall be responsible for maintaining, and shall maintain, a complete
set
of books and records for each Mortgage Loan which shall be marked clearly to
reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in their possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of prudent mortgage lenders who originate mortgage
loans similar to the Mortgage Loans in the jurisdiction where the Mortgaged
Property is located, including but not limited to documentation as to the method
used in determining the applicability of the provisions of the National Flood
Insurance Act of 1968, as amended, to the Mortgaged Property and documentation
evidencing insurance coverage. To the extent that original documents
are not required for purposes of realization of Liquidation Proceeds or
Insurance Proceeds, documents maintained by the Seller may be in the form of
microfilm or microfiche so long as the Seller complies with the requirements
of
the Xxxxxx Xxx Guides or prudent mortgage lenders who originate mortgage loans
similar to the Mortgage Loans in the jurisdiction where the Mortgaged Property
is located.
The
sale
of each Mortgage Loan shall be reflected on the Seller’s balance sheet and other
financial statements as a sale of assets by the Seller.
Subsection
6.03 Delivery
of Mortgage Loan Documents.
The
Seller shall deliver and release to the Custodian no later than two (2) Business
Days prior to the related Closing Date those Mortgage Loan Documents set forth
on Exhibit A hereto as required by the Custodial Agreement with
respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The
Custodian shall certify its receipt of all such Mortgage Loan Documents required
to be delivered pursuant to the Custodial Agreement for the related Closing
Date, as evidenced by the Initial Certification of the Custodian in the form
annexed to the Custodial Agreement. The
Seller shall comply with the terms of the Custodial Agreement and the Purchaser
shall pay all fees and expenses of the Custodian.
The
Seller shall forward to the Custodian, or after the related Closing Date, to
such other Person as the Purchaser shall designate in writing, original
documents evidencing an assumption, modification, consolidation or extension
of
any Mortgage Loan entered into in accordance with this Agreement within two
weeks of their execution, provided, however, that the Seller shall provide
the
Custodian, or to such other Person as the Purchaser shall designate in writing,
with a certified true copy of any such document submitted for recordation within
two weeks of its execution, and shall promptly provide the original of any
document submitted for recordation or a copy of such document certified by
the
appropriate public recording office or title closing agent to be a true and
complete copy of the original within ninety days of its submission for
recordation.
In
the
event any document required to be delivered to the Custodian in the Custodial
Agreement, including an original or copy of any document submitted for
recordation to the appropriate public recording office, is not so delivered
to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, within 90 days following the related Closing
-16-
Date
(other than with respect to the Assignments of Mortgage which shall be delivered
to the Custodian in blank and recorded subsequently by the Purchaser or its
designee), and in the event that the Seller does not cure such failure within
30
days of discovery or receipt of written notification of such failure from the
Purchaser, the related Mortgage Loan shall, upon the request of the Purchaser,
be repurchased by such Seller at the price and in the manner specified in
Subsection 9.03. The foregoing repurchase obligation
shall not apply in the event that such Seller cannot deliver an original
document submitted for recordation to the appropriate public recording office
within the specified period due to a delay caused by the recording office in
the
applicable jurisdiction; provided that such Seller shall instead deliver a
recording receipt of such recording office or, if such recording receipt is
not
available, an officer’s certificate of a servicing officer of such Seller,
confirming that such documents have been accepted for recording; provided that,
upon request of the Purchaser and delivery by the Purchaser to the Seller of
a
schedule of the related Mortgage Loans, such Seller shall reissue and deliver
to
the Purchaser or its designee said officer’s certificate.
The
Seller shall pay all initial recording fees, if any, for the assignments of
mortgage and any other fees or costs in transferring all original documents
to
the Custodian or, upon written request of the Purchaser, to the Purchaser or
the
Purchaser’s designee. The Purchaser or the Purchaser’s designee shall
be responsible for recording the Assignments of Mortgage and shall be reimbursed
by the Seller for the costs associated therewith pursuant to the preceding
sentence.
Subsection
6.04 Quality
Control Procedures.
The
Seller shall have an internal quality control program that verifies, on a
regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The
program shall include evaluating and monitoring the overall quality of the
Seller’s loan production and servicing activities. The program is to
ensure that the Mortgage
Loans are originated in accordance with the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against errors
and
omissions by officers, employees, or other authorized persons.
Subsection
6.05 MERS
Designated Loans.
With
respect to each MERS Designated Mortgage Loan, the Seller shall, on or prior
to
the related Closing Date, designate the Purchaser as the Investor and the
Custodian as custodian, and no Person shall be listed as Interim Funder on
the
MERS System. In addition, on or prior to the related Closing Date,
Seller shall provide the Custodian and the Purchaser with a MERS Report listing
the Purchaser as the Investor, the Custodian as custodian and no Person as
Interim Funder with respect to each MERS Designated Mortgage Loan.
SECTION
7. Servicing of the
Mortgage Loans.
The
Mortgage Loans have been sold by the Seller to the Purchaser on a servicing
released basis. Subject to, and upon the terms and conditions of this
Agreement, the Seller hereby sells, transfers, assigns, conveys and delivers
to
the Purchaser the Servicing Rights.
-17-
The
Purchaser shall retain the Seller as contract servicer of the Mortgage Loans
for
an interim period pursuant to and in accordance with the terms and conditions
set forth in this section provided that if the related Transfer Date has not
occurred on or prior to the date which is 60 days after the related Closing
Date, the Purchaser and the Seller hereby agrees to negotiate in good faith
and
enter into a more detailed interim servicing agreement mutually acceptable
to
the parties. The Seller shall service the Mortgage Loans on an
“actual/actual” basis and otherwise in accordance with the Accepted Servicing
Practices and the following provisions of this section. The Seller
shall not be entitled to a servicing fee in connection with the servicing of
any
Mortgage Loan hereunder.
In
servicing the Mortgage Loans, the Seller shall comply with all applicable laws,
rules and regulations with respect thereto. The Seller shall take no
action with respect to any Mortgage Loan, including entering into any
litigation, or any agreement with the related Mortgagor, without the prior
written consent of the Purchaser. The Seller shall promptly notify
the Purchaser in writing of any action which should be taken with respect to
any
Mortgage Loan in accordance with Accepted Servicing Practices. The
Seller shall take no action, and shall not refrain from taking action, which,
in
either case, (a) would impair the ability of the Purchaser to realize on or
enforce the Mortgage Note or the lien of the Mortgage or any other document
related thereto or (b) would jeopardize the rights or remedies available to
the Purchaser with respect to any Mortgage Loan or otherwise impair the ability
of the Purchaser to realize on the Mortgaged Property with respect to such
Mortgage Loan.
The
Seller shall be obligated to make all advances on the Mortgage Loans with
respect to taxes and insurance premiums due and owing (the “T&I Servicing
Advances”). Any other servicing advances in excess of $500 shall
be made with the prior written consent of the Purchaser. The Seller
shall be required to notify the Purchaser in writing of all advances in excess
of $500 required to be made in order to further protect and preserve the
Purchaser’s interest
in the Mortgage Loans and the underlying Mortgaged Property (the “Other
Servicing Advances,” together with the T&I Servicing Advances, the
“Servicing Advances”), and shall make such Other Servicing Advances in a
timely fashion unless otherwise instructed by the Purchaser. The
Seller shall be entitled to reimbursement for all Servicing Advances from the
Purchaser within 15 Business Days following the Transfer Date.
The
Seller shall segregate and hold all funds collected and received pursuant to
the
Mortgage Loans, including Escrow Payments, separate and apart from any of their
own funds and general assets in one or more Eligible Accounts.
The
Seller shall remit to the Purchaser on each Remittance Date all amounts received
from any source with respect to the Mortgage Loans. On or prior to
each Remittance Date the Seller shall deliver to the Purchaser a remittance
advice in electronic format acceptable to the Purchaser as to the accompanying
remittance and the period ending on the related Determination Date and shall
additionally specify the number of days which each Mortgage Loan is delinquent,
and shall contain an explanation of all Servicing Advances made, the status
of
all Mortgage Loans in foreclosure or otherwise the subject of litigation, and
the status of all other collection efforts with respect to each Mortgage
Loan.
-18-
SECTION
8. Transfer of
Servicing.
On
the
applicable Transfer Date, the Purchaser, or its designee, shall assume all
servicing responsibilities related to, and the Seller shall cease all servicing
responsibilities related to, the related Mortgage Loans subject to such Transfer
Date. The Transfer Date shall be the date determined in accordance
with Section 7 herein.
On
or
prior to the applicable Transfer Date, the Seller shall, at its sole cost and
expense, take such steps as may be necessary or appropriate to effectuate and
evidence the transfer of the servicing of the related Mortgage Loans to the
Purchaser, or its designee, including but not limited to the
following:
(a) Notice
to Mortgagors. The Seller shall mail to the Mortgagor of each
related Mortgage Loan a letter advising such Mortgagor of the transfer of the
servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall provide the Purchaser
with copies of all such related notices no later than the Transfer
Date.
(b) Notice
to Insurance Companies. The Seller shall transmit to the
applicable insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall provide
the Purchaser with copies of all such notices no later than the Transfer
Date.
(c) Delivery
of Servicing Records. The Seller shall forward to the Purchaser,
or its designee, all servicing records and the Servicing File in the Seller’s
possession relating to each related Mortgage Loan.
(d) Escrow
Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of
the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall provide the
Purchaser with an accounting statement, in electronic format acceptable to
the
Purchaser in its sole discretion, of Escrow Payments and suspense balances
and
loss draft balances sufficient to enable the Purchaser to reconcile the amount
of such payment with the accounts of the Mortgage
Loans. Additionally, the Seller shall wire transfer to the Purchaser
the amount of any agency, trustee or prepaid Mortgage Loan payments and all
other similar amounts held by the Seller.
(e) Payoffs
and Assumptions. The Seller shall provide to the Purchaser, or
its designee, copies of all assumption and payoff statements generated by the
Seller on the related Mortgage Loans from the related Cut-off Date to the
Transfer Date.
(f) Mortgage
Payments Received Prior to Transfer Date. Prior to the Transfer
Date all payments received by the Seller on each related Mortgage Loan shall
be
properly applied by the Seller to the account of the particular
Mortgagor.
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(g) Mortgage
Payments Received after Transfer Date. The amount of any related
Monthly Payments received by the Sellers after the Transfer Date shall be
forwarded to the Purchaser by overnight mail on the Business Day following
the
date of receipt. The Seller shall notify the Purchaser of the
particulars of the payment, which notification requirement shall be satisfied
if
the Seller forwards with their payment sufficient information to permit
appropriate processing of the payment by the Purchaser. The Seller
shall assume full responsibility for the necessary and appropriate legal
application of such Monthly Payments received by the Seller after the Transfer
Date with respect to related Mortgage Loans then in foreclosure or bankruptcy;
provided, for purposes of this Agreement, necessary and appropriate legal
application of such Monthly Payments shall include, but not be limited to,
endorsement of a Monthly Payment to the Purchaser with the particulars of the
payment such as the account number, dollar amount, date received and any special
Mortgagor application instructions and the Seller shall comply with the
foregoing requirements with respect to all Monthly Payments received by the
Seller after the Transfer Date.
(h) Misapplied
Payments. Misapplied payments shall be processed as
follows:
(i) All
parties shall cooperate in correcting misapplication errors;
(ii) The
party receiving notice of a misapplied payment occurring prior to the applicable
Transfer Date and discovered after the Transfer Date shall immediately notify
the other party;
(iii) If
a misapplied payment which occurred prior to the Transfer Date cannot be
identified and said misapplied payment has resulted in a shortage, the Seller
shall be liable for the amount of such shortage. The Seller shall
reimburse the Purchaser for the amount of such shortage within thirty
(30) days after receipt of written demand therefor from the
Purchaser;
(iv) If
a misapplied payment which occurred prior to the Transfer Date has created
an
improper Purchase Price as the result of an inaccurate outstanding principal
balance, a check shall be issued to the party shorted by the improper payment
application within seven (7) Business Days after notice thereof by the
other party; and
(v) Any
check issued under the provisions of this Section 8(h) shall be accompanied
by a statement indicating the corresponding Seller and/or the Purchaser Mortgage
Loan identification number and an explanation of the allocation of any such
payments.
(i) Books
and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be
in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The
Seller shall, on or before the Transfer Date, reconcile principal balances
and
make any monetary adjustments required by the Purchaser. Any such
monetary adjustments will be transferred between the Seller and the Purchaser
as
appropriate.
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(k) IRS
Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
or 1041 and K-1 which are required to be filed on or before the Transfer Date
in
relation to the servicing and ownership of the related Mortgage
Loans. The Seller shall provide copies of such forms to the Purchaser
upon request and shall reimburse the Purchaser for any costs or penalties
incurred by the Purchaser due to either Seller’s failure to comply with this
paragraph.
SECTION
9. Representations,
Warranties and Covenants of the Seller; Remedies for Breach.
Subsection
9.01 Representations
and Warranties Regarding the Seller.
The
Seller represents, warrants and covenants to the Purchaser that as of the date
hereof and as of each Closing Date:
(a) Due
Organization and Authority. The Seller is a Delaware corporation,
validly existing, and in good standing under the laws of its jurisdiction of
incorporation. The Seller has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in the states where the Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Seller. The Seller has power and authority to
execute and deliver this Agreement and to perform its obligations hereunder;
the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Seller
and
the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement has been duly executed and delivered and constitutes
the valid, legal, binding and enforceable obligation of the Seller, except
as
enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the
enforcement of the rights of creditors and (ii) general principles of
equity, whether enforcement is sought in a proceeding in equity or at
law. All requisite action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with its
terms;
(b) No
Consent Required. No consent, approval, authorization or order is required
for the transactions contemplated by this Agreement from any court, governmental
agency or body, or federal or state regulatory authority having jurisdiction
over the Seller is required or, if required, such consent, approval,
authorization or order has been or will, prior to the related Closing Date,
be
obtained;
(c) Ordinary
Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Seller, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(d) No
Conflicts. Neither the execution and delivery of this Agreement,
the acquisition or origination of the Mortgage Loans by the Seller, the sale
of
the Mortgage Loans to the Purchaser, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, will conflict with or result in a
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breach
of
any of the terms, conditions or provisions of the Seller’s charter, by-laws or
other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract,
deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(e) No
Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in
any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller
contemplated herein, or which would be likely to impair materially the ability
of the Seller to perform under the terms of this Agreement;
(f) Ability
to Perform; Solvency. The Seller does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Seller is solvent and the
sale of the Mortgage Loans will not cause the Seller to become
insolvent. The sale of the Mortgage Loans is not undertaken with the
intent to hinder, delay or defraud any of Seller’s creditors;
(g) Seller’s
Origination. The Seller’s decision to originate any mortgage loan
or to deny any mortgage loan application is an independent decision based upon
the Underwriting Guidelines, and is in no way made as a result of Purchaser’s
decision to purchase, or not to purchase, or the price Purchaser may offer
to
pay for, any such mortgage loan, if originated;
(h) Anti-Money
Laundering Laws. The Seller has complied with all applicable
anti-money laundering laws, regulations and executive orders, including without
limitation the USA Patriot Act of 2001 (collectively, the “Anti-Money
Laundering Laws”); the Seller has established an anti-money laundering
compliance program as required by the Anti-Money Laundering Laws, has conducted
(or the originator of the Mortgage Loan has conducted) the requisite due
diligence in connection with the origination of each Mortgage Loan required
by
the Anti-Money Laundering Laws, and has obtained and will maintain information
identifying the applicable Mortgagor as required by the Anti-Money Laundering
Laws. Additionally, no Mortgage Loan is subject to nullification pursuant to
Executive Order 13224 (the “Executive Order”) or the regulations
promulgated by the Office of Foreign Assets Control of the United States
Department of Treasury (the “OFAC Regulations”) or in violation of the
Executive Order or the OFAC Regulations; and no Mortgagor is subject to the
provisions of such
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Executive
Order or the OFAC Regulations nor listed as a “blocked person” for purposes of
the OFAC Regulations;
(i)
Financial Statements. The Seller has delivered to the
Purchaser financial statements as to its last three complete fiscal years and
any later quarter ended more than 60 days prior to the execution of this
Agreement. All such financial statements fairly present the pertinent
results of operations and changes in financial position for each of such periods
and the financial position at the end of each such period of the Seller and
its
subsidiaries and have been prepared in accordance with generally accepted
accounting principles of the United States consistently applied throughout
the
periods involved, except as set forth in the notes thereto. There has
been no change in the business, operations, financial condition, properties
or
assets of the Seller since the date of the Seller’s financial statements that
would have a material adverse effect on its ability to perform its obligations
under this Agreement. The Seller has completed any forms reasonably
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(j)
Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller’s portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and
such
selection was not made in a manner so as to affect adversely the interests
of
the Purchaser;
(k) Delivery
to the Custodian. The Mortgage Note, the Mortgage, the Assignment
of Mortgage and any other documents required to be delivered with respect to
each Mortgage Loan pursuant to the Custodial Agreement, shall be delivered
to
the Custodian all in compliance with the specific requirements of the Custodial
Agreement. With respect to each Mortgage Loan, the Seller will be in
possession of a complete Mortgage File in compliance with Exhibit A
hereto, except for such documents as will be delivered to the
Custodian;
(l)
Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant
to
Section 11 on the related Closing Date in the form attached as
Exhibit B to each related Assignment and Conveyance
Agreement;
(m) No
Untrue Information. Neither this Agreement nor any information,
statement, tape, diskette, report, form, or other document furnished or to
be
furnished by or on behalf of the Seller pursuant to this Agreement or any
Reconstitution Agreement or in connection with the transactions contemplated
hereby (including any Securitization Transaction or Whole Loan Transfer)
contains or (up to the applicable Transfer Date) will contain any untrue
statement of fact or omits or will omit to state a fact necessary to make the
statements contained herein or therein not misleading;
(n) No
Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
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(o) Sale
Treatment. The Seller expects to be advised by its independent certified
public accountants that under generally accepted accounting principles the
transfer of the Mortgage Loans will be treated as a sale on the books and
records of the Seller and the Seller has determined that the disposition of
the
Mortgage Loans to the Purchaser pursuant to this Agreement will be afforded
sale
treatment for tax and accounting purposes;
(p) Owner
of Record. The Seller is the owner of record of each Mortgage and
the indebtedness evidenced by each Mortgage Note, except for the Assignments
of
Mortgage which have been sent for recording, and upon recordation the Seller
will be the owner of record of each Mortgage and the indebtedness evidenced
by
each Mortgage Note, and upon the sale of the Mortgage Loans to the Purchaser,
the Seller will retain the Mortgage Files with respect thereto in trust only
for
the purpose of servicing and supervising the servicing of each Mortgage Loan;
and
(q) Reasonable
Purchase Price. The consideration received by the Seller upon the
sale of the Mortgage Loans under this Agreement constitutes fair consideration
and reasonably equivalent value for the Mortgage Loans.
Subsection
9.02 Representations
and Warranties Regarding Individual Mortgage Loans.
The
Seller hereby represents and warrants to the Purchaser that, as to each Mortgage
Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage
Loans as Described. The information set forth in the related
Mortgage Loan Schedule is complete, true and correct;
(b) Payments
Current. All payments required to be made up to the related
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days delinquent, have been made and
credited. No payment required under the Mortgage Loan is 30 days or
more delinquent nor has any payment under the Mortgage Loan been 30 days or
more
delinquent at any time since the origination of the Mortgage
Loan. The first Monthly Payment shall be made with respect to the
Mortgage Loan on its related Due Date or within thirty (30) days thereafter,
all
in accordance with the terms of the related Mortgage Note;
(c) No
Outstanding Charges. There are no defaults in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground
rents
which previously became due and owing have been paid, or an escrow of funds
has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and
payable. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage Loan proceeds, whichever is earlier,
to
the day which precedes by one month the related Due Date of the first
installment of principal and interest;
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(d) Original
Terms Unmodified. The terms of the Mortgage Note and Mortgage
have not been impaired, waived, altered or modified in any respect, from the
date of origination except by a written instrument which has been recorded,
if
necessary to protect the interests of the Purchaser, and which has been
delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration
or modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage
Loan
Schedule, if applicable. No Mortgagor has been released, in whole or
in part, except in connection with an assumption agreement, approved by the
issuer of the title insurer, to the extent required by the policy, and which
assumption agreement is part of the Mortgage Loan File delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the related Mortgage Loan
Schedule;
(e) No
Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the
Mortgage Note or the Mortgage unenforceable, in whole or in part and
no
such right of rescission, set-off, counterclaim or defense has been asserted
with respect thereto;
(f) Hazard
Insurance. Pursuant to the terms of the Mortgage, all buildings
or other improvements upon the Mortgaged Property are insured by a generally
acceptable insurer against loss by fire, hazards of extended coverage and such
other hazards as are provided for in the Xxxxxx Xxx Guides or by Xxxxxxx Mac
or
those of prudent mortgage lenders who originate mortgage loans similar to the
Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting
the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac requirements
or
those of prudent mortgage lenders who originate mortgage loans similar to the
Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor’s
cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such Mortgagor’s cost
and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor
has been given an opportunity to choose the carrier of the required hazard
insurance, provided the policy is not a “master” or “blanket”
hazard insurance policy covering a condominium, or any hazard
insurance policy
covering the common facilities of a planned unit development. The
hazard insurance policy is the valid and binding obligation of the insurer,
is
in full force and effect, and will be in full force and effect and inure to
the
benefit of the Purchaser upon the consummation of the transactions contemplated
by this Agreement. Neither the Seller nor the related Mortgagor has
engaged in any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the validity
and
binding effect of either including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be
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received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance
with Applicable Laws. Any and all requirements of any federal,
state or local law including, without limitation, usury, truth-in-lending,
real
estate settlement procedures, consumer credit protection, equal credit
opportunity, disclosure and all predatory, abusive and fair lending laws
applicable to the Mortgage Loan, including, without limitation, any provisions
relating to the Illinois Interest Act and Prepayment Penalties, have been
complied with, the consummation of the transactions contemplated hereby will
not
involve the violation of any such laws or regulations, and the Seller shall
maintain in its possession, available for the Purchaser’s inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance with all such
requirements. This representation and warranty is a Deemed Material
and Adverse Representation;
(h) No
Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed
that would effect any such release, cancellation, subordination or
rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor’s failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;
(i) Type
of Mortgaged Property. The Mortgaged Property is a fee simple
estate, or a leasehold estate located in a jurisdiction in which the use of
a
leasehold estate for residential properties is a widely-accepted practice,
that
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit
in
a planned unit development, or an individual unit in a residential cooperative
housing corporation; provided, however, that any condominium unit, planned
unit
development or residential cooperative housing corporation shall conform with
the Underwriting Guidelines. No portion of the Mortgaged Property is
used for commercial purposes, and since the date of origination, no portion
of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgaged Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid
First or Second Lien. The Mortgage is a valid, subsisting,
enforceable, except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law) and
perfected, first lien (with respect to a First Lien Loan) or second lien (with
respect to a Second Lien Loan) on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations
and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all
-26-
additions,
alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(A) with
respect to a Second Lien Loan only, the lien of the first mortgage on the
Mortgaged Property;
(B) the
lien of current real property taxes and assessments not yet due and
payable;
(C) covenants,
conditions and restrictions, rights of way, easements and other matters of
the
public record as of the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the lender’s title
insurance policy delivered to the originator of the Mortgage Loan and
(A) specifically referred to or otherwise considered in the appraisal made
for the originator of the Mortgage Loan or (B) which do not adversely
affect the Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(D) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property.
Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity (whether considered in a proceeding or action in equity
or
at law), and perfected first lien (with respect to a First Lien Loan) or second
lien (with respect to a Second Lien Loan) and first priority (with respect
to a
First Lien Loan) or second priority (with respect to a Second Lien Loan)
security interest on the property described therein and the Seller has full
right to sell and assign the same to the Purchaser;
(k) Validity
of Mortgage Documents. The Mortgage Note and the Mortgage and any
other agreement executed and delivered by a Mortgagor in connection with a
Mortgage Loan are genuine, and each is the legal, valid and binding obligation
of the maker thereof enforceable in accordance with its terms (including,
without limitation, any provisions therein relating to Prepayment Penalties)
except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of
creditors’ rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law). All
parties to the Mortgage Note, the Mortgage and any other such related agreement
had legal capacity to enter into the Mortgage Loan and to execute and deliver
the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note,
the Mortgage and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of the Seller in connection with the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission,
misrepresentation,
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negligence
or similar occurrence with respect to a Mortgage Loan has taken place on the
part of any Person, including without limitation, the Mortgagor, any appraiser,
any builder or developer, or any other party involved in the origination of
the
Mortgage Loan or in the application for any insurance in relation to such
Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l)
Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees
and expenses incurred in making or closing the Mortgage Loan and the recording
of the Mortgage were paid, and the Mortgagor is not entitled to any refund
of
any amounts paid or due under the Mortgage Note or Mortgage other than any
amounts placed in a tax or insurance escrow account pursuant to the
Mortgage;
(m) Ownership. The
Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage
Loans to the Purchaser, the Seller will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the Purchaser
or
the Purchaser’s designee, in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan. The Mortgage Loan is
not assigned or pledged, and the Seller has good, indefeasible and marketable
title thereto, and has full right to transfer and sell the Mortgage Loan to
the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
except for any warehouse liens that will be released simultaneously with the
sale of the Mortgage Loan to the Purchaser, and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of
any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to
possess, control and monitor the Mortgage Loan. After the related
Closing Date, the Seller will have no right to modify or alter the terms of
the
sale of the Mortgage Loan and the Seller will have no obligation or right to
repurchase the Mortgage Loan or substitute another Mortgage Loan, except as
provided in this Agreement;
(n) Doing
Business. All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during
the
period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of
the
state wherein the Mortgaged Property is located, and (2) either
(i) organized under the laws of such state, or (ii) qualified to do
business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state, or
(3) not doing business in such state;
(o) LTV. No
Mortgage Loan has an LTV greater than 100%;
(p) Title
Insurance. The Mortgage Loan is covered by an ALTA lender’s title
insurance policy, or with respect to any Mortgage Loan for which the related
Mortgaged
-28-
Property
is located in California a CLTA lender’s title insurance policy, or other
generally acceptable form of policy or insurance acceptable to Xxxxxx Xxx or
Xxxxxxx Mac and each such title insurance policy is issued by a title insurer
acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller,
its
successors and assigns, as to the first (with respect to a First Lien Loan)
or
second (with respect to a Second Lien Loan) priority lien of the Mortgage in
the
original principal amount of the Mortgage Loan (or to the extent a Mortgage
Note
provides for negative amortization, the maximum amount of negative amortization
in accordance with the Mortgage), subject only to the exceptions contained
in
clauses (A), (B) and (C) of paragraph (j) of this Subsection 9.02,
and in the case of Adjustable Rate Mortgage Loans, against any loss by reason
of
the invalidity or unenforceability of the lien resulting from the provisions
of
the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly
Payment. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender’s title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property
or any interest therein. The Seller, its successor and assigns, are
the sole insureds of such lender’s title insurance policy, and such lender’s
title insurance policy is valid and remains in full force and effect and will
be
in force and effect upon the consummation of the transactions contemplated
by
this Agreement. No claims have been made under such lender’s title
insurance policy, and no prior holder of the related Mortgage, including the
Seller, has done, by act or omission, anything which would impair the coverage
of such lender’s title insurance policy, including without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value
of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No
Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates
nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r)
No Mechanics’ Liens. There are no mechanics’ or similar liens
or claims which have been filed for work, labor or material (and no rights
are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location
of Improvements; No Encroachments. All improvements which were
considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Propert, except for deminimis encroachments acceptable to a prudent
mortgage lender that originates mortgage loans similar to the Mortgage Loan
in
the jurisdiction where the Mortgaged Property is located that will have no
adverse affect on the value of the property, provided that any such encroaching
improvements are stated in the applicable title insurance policy and
affirmatively insured over.
-29-
No
improvement located on or being part of the Mortgaged Property is in violation
of any applicable zoning law or regulation;
(t)
Origination; Payment Terms. The Mortgage Loan was originated
by a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings and
loan association, a savings bank, a commercial bank, credit union, insurance
company or other similar institution which is supervised and examined by a
federal or state authority. Principal payments on the Mortgage Loan
commenced no more than seventy days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Interest Rate as well as, in the
case of an Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic
Cap are as set forth on the related Mortgage Loan Schedule. Unless
specified on the related Mortgage Loan Schedule as an interest-only loan or
a
Balloon Mortgage Loan, the Mortgage Note is payable in equal monthly
installments of principal (except for Mortgage Loans that provide for a fixed
period of interest only
payments at the beginning of their term) and interest, which installments of
interest, with respect to Adjustable Rate Mortgage Loans, are subject to change
due to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears, sufficient
to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty (30) years from commencement of
amortization. With respect to any Mortgage Loan that provides for a
fixed period of interest-only payments at the beginning of its term, at the
end
of such interest-only period, the Monthly Payment will be recalculated so as
to
require Monthly Payments sufficient to amortize the Mortgage Loan fully by
its
stated maturity date. Unless otherwise specified on the related
Mortgage Loan Schedule, the Mortgage Loan is payable on the first day of each
month. The Mortgage Loan, by its original terms or any modification
thereof, does not provide for amortization beyond its scheduled maturity
date. Unless otherwise specified on the related Mortgage Loan
Schedule, the Mortgage Loan does not require a balloon payment on its stated
maturity date;
(u) Customary
Provisions. The Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits
of
the security provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee’s sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan
and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver
good
and merchantable title to the Mortgaged Property. There is no
homestead or other exemption available to a Mortgagor which would interfere
with
the right to sell the Mortgaged Property at a trustee’s sale or the right to
foreclose the Mortgage, subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or similar
law;
(v) Conformance
with Agency and Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines (a copy of which
is
attached to each related Assignment and Conveyance Agreement). The
Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae
and no representations have been made to a Mortgagor that are inconsistent
with
the mortgage instruments used;
-30-
(w) Occupancy
of the Mortgaged Property. As of the related Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to
the use and occupancy of the same, including but not limited to certificates
of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Unless otherwise specified on the
related Mortgage Loan Schedule, the Mortgagor represented at the time of
origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged
Property as the Mortgagor’s primary residence;
(x)
No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage
and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds
of Trust. In the event the Mortgage constitutes a deed of trust,
a trustee, authorized and duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser
to
the trustee under the deed of trust, except in connection with a trustee’s sale
after default by the Mortgagor;
(z)
Acceptable Investment. There are no circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor,
the Mortgage File or the Mortgagor’s credit standing that can reasonably be
expected to cause prudent private institutional investors who invest in mortgage
loans similar to the Mortgage Loan to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located, or cause the
Mortgage Loans to prepay during any period materially faster or slower than
the
mortgage loans originated by the Seller generally;
(aa) Delivery
of Mortgage Documents. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered under
the Custodial Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except
for such documents the originals of which have been delivered to the
Custodian;
(bb) Condominiums/Planned
Unit Developments. If the Mortgaged Property is a condominium
unit or a planned unit development (other than a de minimis planned unit
development) such condominium or planned unit development project such Mortgage
Loan was originated in accordance with, and the Mortgaged Property meets the
guidelines set forth in the Originator’s Underwriting Guidelines;
(cc) Transfer
of Mortgage Loans. The Assignment of Mortgage with respect to
each Mortgage Loan (except with respect to any Mortgage that has been recorded
in the name of MERS or its designee) is in recordable form and is acceptable
for
recording under the laws of the jurisdiction in which the Mortgaged Property
is
located. The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Seller are not subject to the bulk transfer
or
similar statutory provisions in effect in any applicable
jurisdiction;
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(dd) Due-On-Sale. With
respect to each Fixed Rate Mortgage Loan, the Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance
of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder,
and
such provision is enforceable;
(ee) Assumability. With
respect to each Adjustable Rate Mortgage Loan, the Mortgage Loan Documents
provide that after the related first Interest Rate Adjustment Date, a related
Mortgage Loan may only be assumed if the party assuming such Mortgage Loan
meets
certain credit requirements stated in the Mortgage Loan Documents;
(ff) No
Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant
to which Monthly Payments are paid or partially
paid with funds deposited in any separate account established by the Seller,
the
Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other
than the Mortgagor nor does it contain any other similar provisions which may
constitute a “buydown” provision. The Mortgage Loan is not a
graduated payment mortgage loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature;
(gg) Consolidation
of Future Advances. Any future advances made to the Mortgagor
prior to the applicable Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount,
as
consolidated, bears a single interest rate and single repayment
term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (with respect to a First Lien Loan)
or second (with respect to a Second Lien Loan) lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee’s
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan;
(hh) Mortgaged
Property Undamaged; No Condemnation Proceedings. There is no
proceeding pending or threatened for the total or partial condemnation of the
Mortgaged Property. The Mortgaged Property is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other casualty
so as to affect adversely the value of the Mortgaged Property as security for
the Mortgage Loan or the use for which the premises were intended and each
Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property;
(ii)
Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices
used by the Seller with respect to the Mortgage Loan have been in all respects
in compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With
respect to escrow deposits and Escrow Payments, all such payments are in the
possession of, or under the control of, the Seller and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been
collected in full compliance with state and federal law and the provisions
of
the related Mortgage Note and Mortgage. An escrow of funds is not
prohibited by applicable law and has been established in an amount sufficient
to
pay for every item that remains unpaid and has been assessed but is not
yet
-32-
due
and
payable. No escrow deposits or Escrow Payments or other charges or
payments due the Seller have been capitalized under the Mortgage or the Mortgage
Note. All Mortgage Interest Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage
and
Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect
to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The
Seller executed and delivered any and all notices required under applicable
law
and the terms of the related Mortgage Note and Mortgage regarding the Mortgage
Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj)
Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from and adjustable rate to a fixed rate;
(kk) Other
Insurance Policies; No Defense to Coverage. No action, inaction or event has
occurred and no state of facts exists or has existed on or prior to the
Closing Date that has resulted or will result in the exclusion from,
denial of, or defense to coverage under any applicable hazard insurance policy,
PMI Policy or bankruptcy bond (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of the timely
payment of the full amount of the loss otherwise due thereunder to the insured),
irrespective of the cause of such failure of coverage. In connection
with the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll)
No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance
with
any environmental law, rule or regulation is an issue; there is no violation
of
any environmental law, rule or regulation with respect to the Mortgage Property;
and nothing further remains to be done to satisfy in full all requirements
of
each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property;
(mm) Servicemembers’
Civil Relief Act. The Mortgagor has not notified the Seller, and
the Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Relief Act or other similar state statute;
(nn) Appraisal. The
Mortgage File contains an appraisal of the related Mortgaged Property signed
prior to the approval of the Mortgage Loan application by a Qualified Appraiser,
accepted by the Seller, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation
is
not affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx
Mac and Title XI of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 and the regulations promulgated thereunder, all as in effect on
the
date the Mortgage Loan was originated;
-33-
(oo) Disclosure
Materials. The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by, and the
Seller has complied with, all applicable law with respect to the making of
the
Mortgage Loans. The Seller shall maintain such statement in the
Mortgage File;
(pp) Construction
or Rehabilitation of Mortgaged Property. No Mortgage Loan was
made in connection with the construction (other than a “construct-to-perm” loan)
or rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(qq) Request
for Notice; No Consent Required. With respect to any Second Lien
Loan, if applicable to the Seller, where required or customary in the
jurisdiction in which the Mortgaged Property is located, the original lender
has
filed for record a request for notice of any action by the related senior
lienholder, and the Seller has notified the senior lienholder in writing of
the
existence of the Second Lien Loan and requested notification of any action
to be
taken against the Mortgagor by the senior lienholder. Either
(a) no consent for the Second Lien Loan is required by the holder of the
related first lien or (b) such consent has been obtained and is contained
in the Mortgage File. This representation and warranty is a Deemed
Material and Adverse Representation;
(rr) [Reserved];
(ss) Escrow
Analysis. If applicable, with respect to each Mortgage, the
Seller has within the last twelve months (unless such Mortgage was originated
within such twelve month period) analyzed the required Escrow Payments for
each
Mortgage and adjusted the amount of such payments so that, assuming all required
payments are timely made, any deficiency will be eliminated on or before the
first anniversary of such analysis, or any overage will be refunded to the
Mortgagor, in accordance with RESPA and any other applicable law;
(tt) Prior
Servicing. Each Mortgage Loan has been serviced in all material
respects in strict compliance with Accepted Servicing Practices;
(uu) No
Default Under First Lien. With respect to each Second Lien Loan,
the related First Lien Loan related thereto is in full force and effect, and
there is no default, breach, violation or event which would permit acceleration
existing under such first Mortgage or Mortgage Note, and no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event which would
permit acceleration thereunder. This representation and warranty is a
Deemed Material and Adverse Representation;
(vv) Right
to Cure First Lien. With respect to each Second Lien Loan, the
related first lien Mortgage contains a provision which provides for giving
notice of default or breach to the mortgagee under the Mortgage Loan and allows
such mortgagee to cure any default under the related first lien
Mortgage. This representation and warranty is a Deemed Material and
Adverse Representation;
(ww) No
Failure to Cure Default. The Seller has not received a written
notice of default of any senior mortgage loan related to the Mortgaged Property
which has not been cured;
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(xx) Credit
Information. As to each consumer report (as defined in the Fair
Credit Reporting Act, Public Law 91-508) or other credit information furnished
by the Seller to the Purchaser, that Seller has full right and authority and
is
not precluded by law or contract from furnishing such information to the
Purchaser and the Purchaser is not precluded from furnishing the same to any
subsequent or prospective purchaser of such Mortgage;
(yy) Leaseholds. If
the Mortgage Loan is secured by a leasehold estate, (1) the ground lease is
assignable or transferable; (2) the ground lease will not terminate earlier
than five years
after the maturity date of the Mortgage Loan; (3) the ground lease does not
provide for termination of the lease in the event of lessee’s default without
the mortgagee being entitled to receive written notice of, and a reasonable
opportunity to cure the default; (4) the ground lease permits the
mortgaging of the related Mortgaged Property; (5) the ground lease protects
the mortgagee’s interests in the event of a property condemnation; (6) all
ground lease rents, other payments, or assessments that have become due have
been paid; and (7) the use of leasehold estates for residential properties
is a widely accepted practice in the jurisdiction in which the Mortgaged
Property is located;
(zz) Prepayment
Penalty. Each Mortgage Loan that is subject to a Prepayment
Penalty as provided in the related Mortgage Note is identified on the related
Mortgage Loan Schedule. With respect to each Mortgage Loan that has a
Prepayment Penalty feature, each such Prepayment Penalty is enforceable and
will
be enforced by the Seller for the benefit of the Purchaser, and each Prepayment
Penalty is permitted pursuant to applicable federal, state and local
law. Each such Prepayment Penalty is in an amount not more than the
maximum amount permitted under applicable law and no such Prepayment Penalty
may
be imposed for a term in excess of five (5) years with respect to Mortgage
Loans
originated prior to October, 1, 2002. With respect to Mortgage Loans
originated on or after October 1, 2002, the duration of the Prepayment Penalty
period shall not exceed three (3) years from the date of the Mortgage Note
(except as set forth on the related Mortgage Loan Schedule) unless the Mortgage
Loan was modified to reduce the Prepayment Penalty period to no more than three
(3) years from the date of the related Mortgage Note and the Mortgagor was
notified in writing of such reduction in Prepayment Penalty
period. This representation and warranty is a Deemed Material and
Adverse Representation;
(aaa) Predatory
Lending Regulations. No Mortgage Loan is a High Cost Loan or
Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair
Lending Act. No Mortgage Loan is covered by the Home Ownership and
Equity Protection Act of 1994 and no Mortgage Loan is in violation of any
comparable state or local law. This representation and warranty is a
Deemed Material and Adverse Representation;
(bbb) Flood
Service Contract. Each Mortgage Loan is covered by a paid in
full, life of loan, flood service contract issued by either First American
Flood
Data Services or Fidelity, and such contract is transferable. If no
such flood service contract is in place, or if such flood service contract
is
issued by an insurer other than First American Flood Data Services or Fidelity,
then on the related Closing Date, the Seller shall remit to the Purchaser a
placement fee of ten dollars ($10.00) for each such Mortgage Loan;
-35-
(ccc) Qualified
Mortgage. The Mortgage Loan is a “qualified mortgage” under
Section 860G(a)(3) of the Code;
(ddd) Tax
Service Contract. Either (x) each Mortgage Loan is covered by a
paid in full, life of loan, tax service contract, and such contract is
transferable, or (y) on the related Closing Date the Purchaser shall net $72.00
per Mortgage Loan from the related Purchase Price to cover the cost of such
a
tax service contract;
(eee) Origination. No
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to repay
and
the extension of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan;
(fff) Recordation. Each
original Mortgage was recorded, or has been sent for recording, and all
subsequent assignments of the original Mortgage (other than the assignment
to
the Purchaser) have been recorded in the appropriate jurisdictions wherein
such
recordation is necessary to perfect the lien thereof as against creditors of
the
Seller, or is in the process of being recorded;
(ggg) Mortgagor
Bankruptcy. On or prior to the related Closing Date, the
Mortgagor has not filed and will not file a bankruptcy petition or has not
become the subject and will not become the subject of involuntary bankruptcy
proceedings or has not consented to or will not consent to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect
of
the related Mortgaged Property;
(hhh) No
Prior Offer. The Mortgage Loan has not previously been offered
for sale to and been rejected by another investor for material reasons of credit
compliance or valuation;
(iii) Balloon
Mortgage Loans. No Balloon Mortgage Loan has an original stated
maturity of less than seven (7) years;
(jjj) Mortgagor
Selection. The Mortgagor was not encouraged or required to select
a Mortgage Loan product offered by the Seller which is a higher cost product
designed for less creditworthy mortgagors, unless at the time of the Mortgage
Loan’s origination, such Mortgagor did not qualify taking into account such
facts as, without limitation, the Mortgage Loan’s requirements and the
Mortgagor’s credit history, income, assets and liabilities and debt-to-income
ratios for a lower-cost similar credit product then offered by the
Seller. This representation and warranty is a Deemed Material and
Adverse Representation;
(kkk) Underwriting
Methodology. The methodology used in underwriting the extension
of credit for each Mortgage Loan does not rely solely on the extent of the
related Mortgagor’s equity in the collateral as the principal determining factor
in approving such extension of credit. The methodology
employed objective criteria such as the
Mortgagor’s income, assets and liabilities, to the
proposed mortgage payment and, based on such methodology, the Mortgage Loan’s
originator made a reasonable determination that at the time of origination
the
Mortgagor had the ability to make timely payments on the Mortgage Loan. Such
underwriting methodology confirmed that at the time of origination
(application/approval)
-36-
the
related Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan. This representation and warranty is a Deemed Material
and Adverse Representation;
(lll) Mortgage
Loans with Prepayment Premiums. With respect to any Mortgage Loan
that contains a provision permitting imposition of a Prepayment Penalty upon
a
prepayment prior to maturity: (i) the Mortgage Loan provides some benefit to
the
Mortgagor (e.g., a rate or fee reduction) in exchange for accepting
such Prepayment Penalty, (ii) prior to the Mortgage
Loan’s origination, the Mortgagor was informed of the option of
obtaining a mortgage loan that did not require payment of such a penalty as
required by applicable state or federal law, (iii) the Prepayment Penalty was
adequately disclosed to the Mortgagor in the mortgage loan documents pursuant
to
applicable state, local and federal law, and (iv) notwithstanding any state,
local or federal law to the contrary, the Originator, as servicer, shall not
impose such Prepayment Penalty in any instance when the mortgage debt is (x)
accelerated as a result of the Mortgagor’s default in making the Mortgage Loan
payments or (y) paid off in connection with the workout of a delinquent Mortgage
Loan. This representation and warranty is a Deemed Material and
Adverse Representation;
(mmm) Purchase
of Insurance. No Mortgagor was required to purchase any single
premium credit insurance policy (e.g., life, mortgage, disability, property,
accident, unemployment or health insurance product) or debt cancellation
agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single premium credit insurance policy (e.g.,
life,
mortgage, disability, property, accident, unemployment, mortgage or health
insurance) in connection with the origination of the Mortgage
Loan. No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan. This representation and
warranty is a Deemed Material and Adverse Representation;
(nnn) [Reserved];
(ooo) Disclosure
of Fees and Charges. All fees and charges (including finance
charges), whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Mortgage Loan, have been
disclosed in writing to the Mortgagor in accordance with applicable state and
federal law and regulation. This representation and warranty is a
Deemed Material and Adverse Representation;
(ppp) No
Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or relating in any way to the Mortgage Loan
transaction. This representation and warranty is a Deemed Material
and Adverse Representation;
(qqq) No
Negative Amortization of Related First Lien Loan. With respect to
each Second Lien Loan, the related First Lien Loan does not permit negative
amortization. This representation and warranty is a Deemed Material
and Adverse Representation; and
(rrr) Principal
Residence. With respect to each Second Lien Loan, the related
Mortgaged Property is the Mortgagor’s principal residence. This
representation and warranty is a Deemed Material and Adverse
Representation.
-37-
Subsection
9.03 Remedies
for Breach of Representations and Warranties.
It
is
understood and agreed that the representations and warranties set forth in
Subsections 9.01 and 9.02 shall survive the sale of the
Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note
or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either Seller or by the Purchaser of a breach
of any of the foregoing representations and warranties, the party discovering
such breach shall give prompt written notice to the other; however, in any
event, such notice by Purchaser must be made to the Seller within sixty (60)
days of the Purchaser’s discovery of such breach. In the event that
the Purchaser does not deliver such notice within the sixty (60) day timeframe
then the Purchaser shall forfeit its right to require such Seller to repurchase
the applicable Mortgage Loan.
Within
60
days of the earlier of either discovery by or notice to the Seller of any such
breach of a representation or warranty, which materially and adversely affects
the value of the Mortgage Loans or the interest of the Purchaser therein (or
which materially and adversely affects the value of the applicable Mortgage
Loan
or the interest of the Purchaser therein in the case of a representation and
warranty relating to a particular Mortgage Loan), such Seller shall use its
best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, such Seller shall, at the Purchaser’s option, repurchase
such Mortgage Loan at the Repurchase Price. Notwithstanding the above
sentence, (i) within sixty (60) days after the earlier of either discovery
by,
or notice to, the Seller of any breach of the representation and warranty set
forth in clause (ccc) of Subsection 9.02, such Seller shall repurchase
such Mortgage Loan at the Repurchase Price and (ii) any breach of a Deemed
Material and Adverse Representation shall automatically be deemed to materially
and adversely affect the value of the Mortgage Loans or the interest of the
Purchaser therein. In the event that a breach shall involve any
representation or warranty set forth in Subsection 9.01, and such
breach cannot be cured within 60 days of the earlier of either discovery by
or
notice to the Seller of such breach, all of the Mortgage Loans affected by
such
breach shall, at the Purchaser’s option, be repurchased by such Seller at the
Repurchase Price. However, if the breach shall involve a
representation or warranty set forth in Subsection 9.02 (except as
provided in the second sentence of this paragraph with respect to certain
breaches for which no substitution is permitted) and the Seller discovers or
receives notice of any such breach within 120 days of the related Closing
Date, such Seller shall, at such Seller’s option and provided that such Seller
has a Qualified Substitute Mortgage Loan, rather than repurchase the Mortgage
Loan as provided above, remove such Mortgage Loan (a “Deleted Mortgage
Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or
Loans, provided that any such substitution shall be effected not later than
120 days after the related Closing Date. If such Seller has no
Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage
Loan at the Repurchase Price. Any repurchase of a Mortgage Loan or
Loans pursuant to the foregoing provisions of this Subsection 9.03 shall
be accomplished by direct remittance of the Repurchase Price to the Purchaser
or
its designee in accordance with the Purchaser’s instructions.
At
the
time of repurchase or substitution, the Purchaser and the Seller shall arrange
for the reassignment of the Deleted Mortgage Loan to such Seller and the
Purchaser shall reassign the Mortgage Loan affected and any right it may have
in
the relevant Mortgaged Property to such Seller free and clear of all liens,
encumbrances, claims, or interest of any person
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or
entity
claiming by, through, or under the Purchaser without recourse and shall execute
and deliver to such Seller in recordable form an assignment of the Purchaser’s
beneficial interest in the affected Mortgage, as well as other documents
necessary to reflect the reassignment of any title protection and insurance
policies, and the delivery to such Seller of any documents held by the
Custodian relating to the Deleted Mortgage Loan. In the event of a
repurchase or substitution, the Seller shall, simultaneously with such
reassignment, give written notice to the Purchaser that such repurchase or
substitution has taken place, amend the Mortgage Loan Schedule to reflect the
withdrawal of the Deleted Mortgage Loan from this Agreement, and, in the case
of
substitution, identify a Qualified Substitute Mortgage Loan and amend the
related Mortgage Loan Schedule to reflect the addition of such Qualified
Substitute Mortgage Loan to this Agreement. In connection with any
such substitution, the Seller shall be deemed to have made as to such Qualified
Substitute Mortgage Loan the representations and warranties set forth in this
Agreement except that all such representations and warranties set forth in
this
Agreement shall be deemed made as of the date of such
substitution. The Seller shall effect such substitution by delivering
to the Custodian or to such other party as the Purchaser may designate in
writing for such Qualified Substitute Mortgage Loan the documents required
by
Subsection 6.03 and the Custodial Agreement, with the Mortgage Note
endorsed as required by Subsection 6.03 and the Custodial
Agreement. No substitution will be made in any calendar month after
the Determination Date for such month. The Seller shall remit
directly to the Purchaser, or its designee in accordance with the Purchaser’s
instructions the Monthly Payment due, if any, on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such
substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained by
the
Seller. For the month of substitution, distributions to the Purchaser
shall include the Monthly Payment due on any Deleted Mortgage Loan in the month
of substitution, and the Seller shall thereafter be entitled to retain all
amounts subsequently received by such Seller in respect of such Deleted Mortgage
Loan.
For
any
month in which either Seller substitutes a Qualified Substitute Mortgage Loan
for a Deleted Mortgage Loan, such Seller shall determine the amount (if any)
by
which the aggregate principal balance of all Qualified Substitute Mortgage
Loans
as of the date of substitution is less than the aggregate Stated Principal
Balance of all Deleted Mortgage Loans (after application of scheduled principal
payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser’s instructions within two (2) Business
Days of such substitution.
As
to
each Mortgage Loan, on and after the date servicing is transferred from the
Seller to the Purchaser and until such time as the servicing for such Mortgage
Loan in reassigned to Sellers, the Purchaser or its designee shall service
such
Mortgage Loan in conformance and accordance with the servicing practices that
Purchaser or its designee would follow in servicing residential mortgage loans
held for its own account, giving due consideration to those mortgage servicing
practices of prudent mortgage lending institutions that service mortgage loans
of the same type as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located.
In
addition to such repurchase or substitution obligation, the Seller shall
indemnify the Purchaser and its present and former directors, officers,
employees and agents and any Successor Servicer and its present and former
directors, officers, employees and agents and
-39-
hold
such
parties harmless against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the
Seller’s representations and warranties contained in this Agreement or any
Reconstitution Agreement. It is understood and agreed that the
obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and Successor Servicer as provided in this Subsection 9.03
and in Subsection 14.01 constitute the sole remedies of the Purchaser
respecting a breach of the foregoing representations and
warranties. For purposes of this paragraph “Purchaser” shall mean the
Person then acting as the Purchaser under this Agreement and any and all Persons
who previously were “Purchasers” under this Agreement and “Successor Servicer”
shall mean any Person designated as the Successor Servicer pursuant to this
Agreement and any and all Persons who previously were “Successor Servicers”
pursuant to this Agreement.
Any
cause
of action against either Seller relating to or arising out of the breach of
any
representations and warranties made in Subsections 9.01 and 9.02
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by either Seller to the Purchaser,
(ii) failure by the Seller to cure such breach or repurchase such Mortgage
Loan as specified above, and (iii) demand upon the Seller by the Purchaser
for compliance with this Agreement.
Notwithstanding
the above, in no event shall the indemnifying party be liable to the indemnified
party for any punitive, special, incidental, indirect or consequential damages,
including but not limited to, lost profits.
Subsection
9.04 Repurchase
of Mortgage Loans with First Payment Defaults. With respect to
any Mortgage Loan, in the event that the first scheduled payment of principal
and interest due either (i) after origination of such Mortgage Loan is not
paid by the related Mortgagor to the then current mortgagee, or (ii) after
the related Closing Date is not paid by the related Mortgagor to the Purchaser
within thirty (30) days of such related Due Date, the Seller, at the Purchaser’s
option, shall repurchase such Mortgage Loan from the Purchaser at a price equal
to the related Purchase Price Percentage multiplied by the then outstanding
principal balance of such Mortgage Loan, plus accrued and unpaid interest
thereon from the date to which interest was last paid through the day prior
to
the repurchase date at the applicable Mortgage Interest Rate, plus any
outstanding advances owed to any servicer in connection with such Mortgage
Loan. The Purchaser shall have ninety (90) days following such thirty
(30) day period to notify the Seller and request a repurchase and the Seller
shall repurchase such delinquent Mortgage Loan within thirty (30) days of
receipt of such notice. Notwithstanding the foregoing, the Purchaser
reserves the right to request a repurchase following such ninety (90) day
timeframe in the event of a NSF return of the related first
payment.
Subsection
9.05 Premium
Recapture. With respect to any Mortgage Loan without prepayment
penalties that prepays in full during the first six months following the related
Closing Date, the Seller shall pay the Purchaser, within seven (7) Business
Days
after Purchaser notifies such Seller in writing (with backup documentation)
of
such prepayment, such prepayment in full, an amount equal to the excess of
the
Purchase Price Percentage for such
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Mortgage
Loan over par, multiplied by the outstanding principal balance of such Mortgage
Loan as of the related Cut-off Date.
SECTION
10. Closing.
The
closing for the purchase and sale of each Mortgage Loan Package shall take
place
on the related Closing Date. At the Purchaser’s option, each Closing
shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The
closing for the Mortgage Loans to be purchased on each Closing Date shall be
subject to each of the following conditions:
(i) at
least two Business Days prior to the related Closing Date, the Seller shall
deliver to the Purchaser a magnetic diskette, or transmit by modem, a listing
on
a loan-level basis of the necessary information to compute the Purchase Price
of
the Mortgage Loans delivered on such Closing Date (including accrued interest),
and prepare a Mortgage Loan Schedule;
(ii) all
of the representations and warranties of the Seller under this Agreement shall
be true and correct as of the related Closing Date and no event shall have
occurred which, with notice or the passage of time, would constitute a default
under this Agreement;
(iii) the
Purchaser shall have received, or the Purchaser’s attorneys shall have received
in escrow, all closing documents as specified in Section 11 of this
Agreement, in such forms as are agreed upon and acceptable to the Purchaser,
duly executed by all signatories other than the Purchaser as required pursuant
to the terms hereof;
(iv) the
Seller shall have delivered and released to the Custodian all documents required
pursuant to the Custodial Agreement; and
(v) all
other terms and conditions of this Agreement and the related Purchase Price
and
Terms Agreement shall have been complied with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on the
related Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION
11. Closing
Documents.
The
Closing Documents for the Mortgage Loans to be purchased on each Closing Date
shall consist of fully executed originals of the following
documents:
(1) this
Agreement (to be executed and delivered only for the initial Closing
Date);
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(2) with
respect to the initial Closing Date, the Custodial Agreement, dated as of the
initial Cut-off Date;
(3) the
related Mortgage Loan Schedule (one copy to be attached to the Custodian’s
counterpart of the Custodial Agreement in connection with the initial Closing
Date, and one copy to be attached to the related Assignment and Conveyance
as
the Mortgage Loan Schedule thereto);
(4) a
Custodian’s Certification, as required under the Custodial Agreement, in the
form of Exhibit 2 to the Custodial Agreement;
(5) with
respect to the initial Closing Date, an Officer’s Certificate, in the form of
Exhibit C hereto with respect to the Seller, including all
attachments thereto; with respect to subsequent Closing Dates, an Officer’s
Certificate upon request of the Purchaser;
(6) with
respect to the initial Closing Date, an Opinion of Counsel of the Custodian
(who
may be an employee of the Custodian), in the form of an exhibit to the Custodial
Agreement(s);
(7) a
Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the
Purchaser, if any of the Mortgage Loans have at any time been subject to any
security interest, pledge or hypothecation for the benefit of such
person;
(8) a
certificate or other evidence of merger or change of name, signed or stamped
by
the applicable regulatory authority, if any of the Mortgage Loans were acquired
by either Seller by merger or acquired or originated by either Seller while
conducting business under a name other than its present name, if
applicable;
(9) Assignment
and Conveyance Agreement in the form of Exhibit G hereto, and all
exhibits thereto;
(10) with
respect to the initial Closing Date, the Underwriting Guidelines to be attached
hereto as Exhibit H and with respect to each subsequent Closing Date, the
Underwriting Guidelines to be attached to the related Assignment and Conveyance;
and
(11) a
MERS Report reflecting the Purchaser as Investor, the Custodian as custodian
and
no Person as Interim Funder for each MERS Designated Mortgage Loan.
The
Seller shall bear the risk of loss of the closing documents until such time
as
they are received by the Purchaser or its attorneys.
-42-
SECTION
12. Costs.
The
Purchaser shall pay any commissions due its salesmen and the legal fees and
expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage,
and
the Seller’s attorney’s fees, shall be paid by the Seller.
SECTION
13. Cooperation of Seller with a
Reconstitution.
The
Seller and the Purchaser agree that with respect to some or all of the Mortgage
Loans, after the related Closing Date, on one or more dates (each, a
“Reconstitution Date”) at the Purchaser’s sole option, the Purchaser may
effect a sale (each, a “Reconstitution”) of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxx
Xxx under its Cash Purchase Program or MBS Program (Special Servicing Option)
(each, a “Xxxxxx Mae Transfer”); or
(ii) Xxxxxxx
Mac (the “Xxxxxxx Mac Transfer”); or
(iii) one
or more third party purchasers in one or more Whole Loan Transfers;
or
(iv) one
or more trusts or other entities to be formed as part of one or more
Securitization Transactions.
The
Seller agrees to execute in connection with any Agency Transfer, any and all
pool purchase contracts, and/or agreements reasonably acceptable to the Seller
among the Purchaser, the Seller and any servicer in connection with a Whole
Loan
Transfer, a sellers’ warranties and servicing agreement or a participation and
servicing agreement in form and substance reasonably acceptable to the parties,
and in connection with a Securitization Transaction, an Assignment and
Recognition Agreement substantially in the form attached hereto as
Exhibit I (each, a “Reconstitution
Agreement”). Notwithstanding anything contained in this Agreement
to the contrary, under no circumstances and in no event shall either Seller
be
required to service any Mortgage Loans subject to a Securitization Transaction
on or after the applicable Reconstitution Date.
With
respect to each Whole Loan Transfer and each Securitization Transaction entered
into by the Purchaser, the Seller agrees (1) to reasonably cooperate with
the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform
a Reconstitution Agreement as required by the Purchaser; (3) to restate the
representations and warranties set forth in Subsection 9.01 of this Agreement
as
of the applicable Reconstitution Date and restate the representations and
warranties set forth in Subsection 9.02 of this Agreement as of the applicable
Closing Date; provided, however, that the Seller shall restate the Servicing
Representations and Warranties set forth in Subsection 9.02 of this Agreement
as
of the applicable Transfer Date. The Seller shall provide
to such servicer or issuer, as the case may be, and any other participants
or
purchasers in
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such
Reconstitution: (i) any and all reasonable information and
appropriate verification of information which may be reasonably available to
the
Seller or its affiliates, whether through letters of its auditors and counsel
or
otherwise, as the Purchaser or any such other participant shall request;
(ii) such additional representations, warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably believed necessary by the Purchaser or any
such
other participant; and (iii) to execute, deliver and satisfy all conditions
set forth in any indemnity agreement reasonably required by the Purchaser or
any
such participant. Moreover, the Seller agrees to cooperate with all
reasonable requests made by the Purchaser to effect such Reconstitution
Agreement. The Seller shall indemnify the Purchaser, each affiliate
of the Purchaser participating in the Reconstitution, each underwriter or
placement agent participating in the Reconstitution and each Person who controls
the Purchaser, such affiliate, underwriter or placement agent and their
respective present and former directors, officers, employees and agents, and
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that each of them may sustain arising out
of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the information provided by or on behalf of either Seller
regarding either Seller, the Mortgage Loans or the Underwriting Guidelines
set
forth in any offering document (including, without limitation, structural term
sheets, collateral term sheets and computational materials) prepared in
connection with any Reconstitution. For purposes of the previous
sentence, “Purchaser” shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were “Purchasers” under
this Agreement.
In
the
event the Purchaser has elected to have the Seller hold record title to the
Mortgages, prior to the Reconstitution Date, the Seller shall prepare an
assignment of mortgage in blank from the Seller, acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of
the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall
execute each assignment of mortgage.
All
Mortgage Loans not sold or transferred pursuant to a Reconstitution shall remain
subject to this Agreement and with respect thereto this Agreement shall remain
in full force and effect.
SECTION
14. The Seller.
Subsection
14.01 Additional
Indemnification by the Seller; Third Party Claims.
(a) The
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents, and hold such parties harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees and expenses (including legal fees and expenses incurred in
connection with the enforcement of the Seller’s indemnification obligations
under this Subsection 14.01) and related costs, judgments, and any other
costs, fees and
expenses that such parties may sustain in any way related to the Seller to
perform its duties and to service the Mortgage Loans in strict compliance with
the terms of this Agreement or any
-44-
Reconstitution
Agreement entered into pursuant to Section 13 or any breach of the Seller’s
representations, warranties and covenants set forth in this
Agreement. For purposes of this paragraph “Purchaser” shall mean the
Person then acting as the Purchaser under this Agreement and any and all Persons
who previously were “Purchasers” under this Agreement and “Successor Servicer”
shall mean any Person designated as the Successor Servicer pursuant to this
Agreement and any and all Persons who previously were “Successor Servicers”
pursuant to this Agreement.
(b) Promptly
after receipt by an indemnified party under this Subsection 14.01 of notice
of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Subsection 14.01, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party under this Subsection 14.01, except to the extent that it has been
prejudiced in any material respect, or from any liability which it may have,
otherwise than under this Subsection 14.01. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party or parties shall have reasonably
concluded that there may be legal defenses available to it or them and/or other
indemnified parties which are different from or additional to those available
to
the indemnifying party, the indemnified party or parties shall have the right
to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or
parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not
be
liable to such indemnified party for expenses incurred by the indemnified party
in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence (it
being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with one local counsel,
if
applicable)), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized in writing the employment of
counsel for the indemnified party at the expense of the indemnifying party;
and
except that, if clause (i) or (iii) is applicable, such liability shall be
only
in respect of the counsel referred to in such clause (i) or (iii).
Subsection
14.02 Merger
or Consolidation of the Seller.
The
Seller will keep in full effect their existence, rights and franchises as a
corporation under the laws of the state of its incorporation except as permitted
herein, and will obtain
and preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect
the
validity and enforceability of this Agreement, or any of the Mortgage Loans
and
to perform its duties under this Agreement.
-45-
Any
Person into which either Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
either Seller shall be a party, or any Person succeeding to the business of
either Seller, shall be the successor of such Seller hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person shall have a net worth of at
least $25,000,000.
SECTION
15. Financial
Statements.
The
Seller understands that in connection with the Purchaser’s marketing of the
Mortgage Loans, the Purchaser shall make available to prospective purchasers
audited financial statements of the Seller for the most recently completed
three
fiscal years respecting which such statements are available, as well as a
Consolidated Statement of Condition of the Seller at the end of the last two
fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable
interim statements to the extent any such statements have been prepared by
the
Seller (and are available upon request to members or stockholders of the Seller
or the public at large). The Seller, if it has not already done so,
agrees to furnish promptly to the Purchaser copies of the statements specified
above.
The
Seller also agrees to allow reasonable access to a knowledgeable financial
or
accounting officer for the purpose of answering questions asked by any
prospective purchaser regarding recent developments affecting the Seller or
the
financial statements of the Seller.
SECTION
16. Mandatory Delivery; Grant of
Security Interest.
The
sale
and delivery on the related Closing Date of the Mortgage Loans described on
the
related Mortgage Loan Schedule is mandatory from and after the date of the
execution of the related Purchase Price and Terms Agreement, it being
specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred
by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of either Seller’s failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the
Purchaser on or before the related Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in each
Mortgage Loan and each document and instrument evidencing each such Mortgage
Loan to secure the performance by the Seller of its obligations under the
related Purchase Price and Terms Agreement, and the Seller agrees that they
shall hold such Mortgage Loans in custody for the Purchaser subject to the
Purchaser’s (a) right to reject any Mortgage Loan (or Qualified Substitute
Mortgage Loan) under the terms of this Agreement and to require another Mortgage
Loan (or Qualified Substitute Mortgage Loan) to be substituted therefor, and
(b) obligation to pay
the
Purchase Price for the Mortgage Loans. All rights and remedies of the
Purchaser under this Agreement are distinct from, and cumulative with, any
other
rights or remedies under this Agreement or afforded by law or equity and all
such rights and remedies may be exercised concurrently, independently or
successively.
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SECTION
17. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address as follows:
(i) if
to the Seller:
Wilmington
Finance Inc.
000
Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx
Meeting, Pennsylvania 19462
Attention: Xxxx
Xxxxxxx
(ii) if
to the Purchaser:
Xxxxxx
Xxxxxxx Mortgage Capital Inc.
1221
Avenue of the Xxxxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: Xxxxx
Xxxxxxxxxx - Whole Loan Operations Manager
Fax: 000-000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
with
copies to:
Xxxx
Xxxxxxxx
Xxxxxx
Xxxxxxx – Servicing Oversight
0000
X-Xxx Xxx
Xxxxx
000
Xxxx
Xxxxx, Xxxxxxx 00000
Fax: 000-000-0000
Email: xxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
Xxxxx
Xxxxxx
Xxxxxx
Xxxxxxx - RFPG
0000
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax: 000-000-0000
Email: xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
or
such
other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be
deemed to have been received on the date delivered to or received at the
premises of the addressee (as evidenced, in the case of registered or certified
mail, by the date noted on the return receipt).
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SECTION
18. Severability
Clause.
Any
part,
provision representation or warranty of this Agreement which is prohibited
or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition
or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties
hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof. If the invalidity of any part,
provision, representation or warranty of this Agreement shall deprive any party
of the economic benefit intended to be conferred by this Agreement, the parties
shall negotiate, in good-faith, to develop a structure the economic effect
of
which is nearly as possible the same as the economic effect of this Agreement
without regard to such invalidity.
SECTION
19. Counterparts.
This
Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
SECTION
20. Governing Law.
This
Agreement shall be deemed in effect when a fully executed counterpart thereof
is
received by the Purchaser in the State of New York and shall be deemed to have
been made in the State of New York. The Agreement shall be construed
in accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
the
substantive laws of the State of New York (without regard to conflicts of laws
principles), except to the extent preempted by Federal law.
SECTION
21. Intention of the
Parties.
It
is the
intention of the parties that the Purchaser is purchasing, and the Seller are
selling the Mortgage Loans and not a debt instrument of the Seller or another
security. Accordingly, the parties hereto each intend to treat the
transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the
arrangement under which the Mortgage Loans are held shall be consistent with
classification of such arrangement as a grantor trust in the event it is not
found to represent direct ownership of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans
which
shall affect the Federal income tax consequences of owning the Mortgage Loans
and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
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SECTION
22. Successors and Assigns;
Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective permitted successors and assigns
of
the Seller and the successors and assigns of the Purchaser. This
Agreement shall not be assigned, pledged or hypothecated by the Seller to a
third party without the prior written consent of the Purchaser, which consent
may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole
or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. There shall be no limitation on the number of
assignments or transfers allowable by the Purchaser with respect to the Mortgage
Loans and this Agreement. In the event the Purchaser assigns this
Agreement, and the assignee assumes any of the Purchaser’s obligations
hereunder, the Seller acknowledges and agrees to look solely to such assignee,
and not to the Purchaser, for performance of the obligations so assumed and
the
Purchaser shall be relieved from any liability to the Seller with respect
thereto.
SECTION
23. Waivers.
No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
24. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
SECTION
25. General Interpretive
Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of any
gender herein shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) reference
to a Subsection without further reference to a Section is a reference to such
Subsection as contained in the same Section in which the reference appears,
and
this rule shall also apply to Paragraphs and other subdivisions;
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(e)
the words “herein,” “hereof,” “hereunder” and other words of similar import
refer to this Agreement as a whole and not to any particular provision;
and
(f)
the term “include” or “including” shall mean without limitation by reason of
enumeration.
SECTION
26. Reproduction of
Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be executed,
(b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the
original itself in any judicial or administrative proceeding, whether or not
the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile
or
further reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION
27. Further
Agreements.
The
Seller and the Purchaser each agree to execute and deliver to the other such
reasonable and appropriate additional documents, instruments or agreements
as
may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION
28. Recordation of Assignments of
Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or their comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Seller’s expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
SECTION
29. No
Solicitation.
From
and
after the related Closing Date, the Seller agrees that they will not take any
action or permit or cause any action to be taken by any of their agents or
affiliates, or by any independent contractors on either Seller’s behalf, to
personally, by telephone or mail (via electronic means or otherwise), solicit
a
Mortgagor under any Mortgage Loan for the purpose of refinancing a Mortgage
Loan, in whole or in part, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, it is understood and agreed
that the Seller, or any of their respective affiliates:
(i) may
advertise its availability for handling refinancings of mortgages in their
portfolio, including the promotion of terms it has available for such
refinancings,
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through
the sending of letters or promotional material, so long as it does not
specifically target Mortgagors and so long as such promotional material either
is sent to the mortgagors for all of the mortgages in the servicing portfolio
of
the Seller and any of its affiliates (those it owns as well as those serviced
for others); and
(ii) may
provide pay-off information and otherwise cooperate with individual mortgagors
who contact them about prepaying their mortgages by advising them of refinancing
terms and streamlined origination arrangements that are available.
Promotions
undertaken by the Seller or by any affiliate of the Seller which are directed
to
the general public at large (including, without limitation, mass mailing based
on commercially acquired mailing lists, newspaper, radio and television
advertisements), shall not constitute solicitation under this
Section 29.
SECTION
30. Waiver of Trial by
Jury.
THE
SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
TO
THE FULLEST 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 OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION
31. Governing Law Jurisdiction;
Consent to Service of Process.
THIS
AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED COUNTERPART THEREOF
IS
RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND SHALL BE DEEMED TO HAVE
BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL BE GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS
CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE
SELLER IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR
PROCEEDING IN ANY SUCH COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY
ACTION OR PROCEEDING IN ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW; AND (IV) CONSENTS TO SERVICE OF PROCESS UPON IT BY MAILING
A COPY THEREOF BY CERTIFIED MAIL ADDRESSED TO IT AS PROVIDED FOR NOTICES
HEREUNDER.
SECTION
32. Confidentiality.
Each
of
the Purchaser and the Seller shall employ proper procedures and standards
designed to maintain the confidential nature of the terms of this Agreement,
except to the extent: (a) the disclosure of which is reasonably
believed by such party to be required in connection with regulatory requirements
or other legal requirements relating to its affairs;
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(b) disclosed
to any one or more of such party’s employees, officers, directors, agents,
attorneys or accountants who would have access to the contents of this Agreement
and such data and information in the normal course of the performance of such
Person’s duties for such party, to the extent such party has procedures in
effect to inform such Person of the confidential nature thereof; (c) that
is disclosed in a prospectus, prospectus supplement or private placement
memorandum relating to a securitization of the Mortgage Loans by the Purchaser
(or an affiliate assignee thereof) or to any Person in connection with the
resale or proposed resale of all or a portion of the Mortgage Loans by such
party in accordance with the terms of this Agreement; and (d) that is
reasonably believed by such party to be necessary for the enforcement of such
party’s rights under this Agreement.
Notwithstanding
any other express or implied agreement to the contrary, each of the Purchaser
and the Seller agree and acknowledge that each of them and each of their
employees, representatives, and other agents may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure
of
the transaction and all materials of any kind (including opinions or other
tax
analyses) that are provided to any of them relating to such tax treatment and
tax structure, except to the extent that confidentiality is reasonably necessary
to comply with U.S. federal or state securities laws. For purposes of
this paragraph, the terms “tax treatment” and “tax structure” have the meanings
specified in Treasury Regulation section 1.6011-4(c).
SECTION
33. Compliance With Regulation
AB.
Subsection
33.01 Intent of the Parties;
Reasonableness.
The
Purchaser and the Seller acknowledges and agrees that the purpose of
Section 33 of this Agreement is to facilitate compliance by the Purchaser
and any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable
by its terms only to offerings of asset-backed securities that are registered
under the Securities Act, the Seller acknowledges that investors in privately
offered securities may require that the Purchaser or any Depositor provide
comparable disclosure in unregistered offerings. References in this
Agreement to compliance with Regulation AB include provision of comparable
disclosure in private offerings.
Neither
the Purchaser nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder (or
the
provision in a private offering of disclosure comparable to that required under
the Securities Act). The Seller acknowledges that interpretations of
the requirements of Regulation AB may change over time, whether due to
interpretive guidance provided by the Commission or its staff, consensus among
participants in the asset-backed securities markets, advice of counsel, or
otherwise, and agrees to comply with requests made by the Purchaser or any
Depositor in good faith for delivery of information under these provisions
on
the basis of evolving interpretations of Regulation AB. In connection
with any Securitization Transaction, the Seller shall cooperate fully with
the
Purchaser to deliver to the Purchaser (including any of its assignees or
designees) and any Depositor, any and all statements, reports, certifications,
records and any other information necessary in the good faith determination
of
the Purchaser or any Depositor to permit the Purchaser or such Depositor
to
-52-
comply
with the provisions of Regulation AB, together with such disclosures relating
to
the Seller, any Third-Party Originator and the Mortgage Loans, reasonably
believed by the Purchaser or any Depositor to be necessary in order to effect
such compliance.
The
Purchaser (including any of its assignees or designees) shall cooperate with
the
Seller by providing timely notice of requests for information under these
provisions and by reasonably limiting such requests to information required,
in
the Purchaser’s reasonable judgment, to comply with Regulation AB.
Subsection
33.02 Additional
Representations and Warranties of the Seller.
(a) The
Seller shall be deemed to represent to the Purchaser and to any Depositor,
as of
the date on which information is first provided to the Purchaser or any
Depositor under Subsection 33.03 that, except as disclosed in writing to the
Purchaser or such Depositor prior to such date: (i) there are no
material legal or governmental proceedings pending (or known to be contemplated)
against the Seller or any Third-Party Originator; and (ii) there are no
affiliations, relationships or transactions relating to the Seller or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(b) If
so requested by the Purchaser or any Depositor on any date following the date
on
which information is first provided to the Purchaser or any Depositor under
Subsection 33.03, the Seller shall, within five Business Days following such
request, confirm in writing the accuracy of the representations and warranties
set forth in paragraph (a) of this Section or, if any such representation and
warranty is not accurate as of the date of such request, provide reasonably
adequate disclosure of the pertinent facts, in writing, to the requesting
party.
Subsection
33.03 Information
to Be Provided by the Seller.
In
connection with any Securitization Transaction the Seller shall (i) within
five
Business Days following request by the Purchaser or any Depositor, provide
to
the Purchaser and such Depositor (or, as applicable, cause each Third-Party
Originator to provide), in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information and materials
specified in paragraphs (a) and (b) of this Section, and (ii) as promptly as
practicable following notice to or discovery by any Seller, provide to the
Purchaser and any Depositor (in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor) the information specified
in
paragraph (d) of this Section.
(a) If
so requested by the Purchaser or any Depositor, the Seller shall provide such
information regarding (i) the Seller, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
or
(ii) each Third-Party Originator, as is requested for the purpose of compliance
with Items 1103(a)(1), 1105 (subject to paragraph (b) below), 1110, 1117 and
1119 of Regulation AB. Such information shall include, at a
minimum:
(A) the
originator’s form of organization;
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(B) a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description
shall include a discussion of the originator’s experience in originating
mortgage loans of a similar type as the Mortgage Loans; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the good faith judgment of the Purchaser
or
any Depositor, to an analysis of the performance of the Mortgage Loans,
including the originators’ credit-granting or underwriting criteria for mortgage
loans of similar type(s) as the Mortgage Loans and such other information as
the
Purchaser or any Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a
description of any material legal or governmental proceedings pending (or known
to be contemplated) against the Seller and each Third-Party Originator;
and
(D) a
description of any affiliation or relationship between the Seller, each
Third-Party Originator and any of the following parties to a Securitization
Transaction, as such parties are identified to the Seller by the Purchaser
or
any Depositor in writing in advance of such Securitization
Transaction:
(1) the
sponsor;
(2) the
depositor;
(3) the
issuing entity;
(4) any
servicer;
(5) any
trustee;
(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
(9) any
other material transaction party.
(b) If
so requested by the Purchaser or any Depositor, the Seller shall provide (or,
as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information
shall be prepared in form and substance reasonably satisfactory to the Purchaser
by the Seller (or Third-Party Originator) on the basis of its reasonable, good
faith interpretation of the requirements of Item 1105(a)(1)-(3) of Regulation
AB. To the extent that there is reasonably available to the Seller
(or Third-Party Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be entitled to
specify whether some or all of such information shall be provided pursuant
to
this paragraph. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall be presented
in
increments no less frequently than quarterly over the life of the mortgage
loans
included in the vintage origination year or prior securitized
pool. The most recent periodic increment must be as of a date no
later than 135 days prior to the date of the prospectus or other offering
document in which the Static Pool Information is to be included or incorporated
by reference. The Static Pool Information shall be provided in an
electronic format that provides a permanent record of the
information
-54-
provided,
such as a portable document format (pdf) file, or other such electronic format
reasonably required by the Purchaser or the Depositor, as
applicable. The Seller and the Purchaser agree that either (i) the
Seller shall provide all Static Pool Information, as described above, or (ii)
solely with respect to the period of time prior to January 1, 2006, the Seller
shall represent and warrant that they are unable without unreasonable effort
or
expense to provide Static Pool Information and indemnify the Purchaser for
such
assessment. Notwithstanding anything in this Agreement to the
contrary, the parties hereto agree that the Purchaser or any Depositor shall
not
be requesting, and the Seller shall not be required to provide, Static Pool
Information from the Seller until such time that the Purchaser is informed
by
the Seller that it is able to comply with the obligations set forth
above.
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an omission
to include therein information required to be provided pursuant to such
paragraph), the Seller shall provide corrected Static Pool Information to the
Purchaser or any Depositor, as applicable, in the same format in which Static
Pool Information was previously provided to such party by the
Seller.
If
so
requested by the Purchaser or any Depositor, the Seller shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense of
the
requesting party (to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon procedures letters
of certified public accountants reasonably acceptable to the Purchaser or
Depositor, as applicable, pertaining to Static Pool Information relating to
prior securitized pools for securitizations closed on or after January 1, 2006
or, in the case of Static Pool Information with respect to such Seller’s or
Third-Party Originator’s originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall reasonably
request. Such letters shall be addressed to and be for the benefit of
such parties as the Purchaser or such Depositor shall designate, which may
include, by way of example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect to
a
Securitization Transaction. Any such statement or letter may take the
form of a standard, generally applicable document accompanied by a reliance
letter authorizing reliance by the addressees designated by the Purchaser or
such Depositor.
(c) [Reserved].
(d) If
so requested by the Purchaser or any Depositor for the purpose of satisfying
its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Seller shall (or shall cause each Third-Party
Originator to) (i) notify the Purchaser and any Depositor in writing of (A)
any
material litigation or governmental proceedings pending against such Seller
or
any Third-Party Originator (to the extent permitted by applicable law) and
(B)
any affiliations or relationships that develop following the closing date of
a
Securitization Transaction between such Seller or any Third-Party Originator
and
any of the parties specified in clause (D) of paragraph (a) of this Section
(and
any other parties identified in writing by the requesting party) with respect
to
such Securitization Transaction, and (ii) provide to the Purchaser and any
Depositor a description of such proceedings, affiliations or
relationships.
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(e) With
respect to those Mortgage Loans that were sold to the Purchaser pursuant to
this
Agreement, the Purchaser shall cause the servicer (or another party) to be
obligated to provide information, on a monthly basis and in the form customarily
provided by such servicer or other party (which need not be customized for
the
Seller) with respect to the Mortgage Loans reasonably necessary for the Seller
to comply with their contractual and other obligations under Regulation AB
reasonably related to information reasonably requested from the Seller for
purposes of compliance with Regulation AB, including, without limitation,
providing to the Seller Static Pool Information, as set forth in Item 1105(a)(2)
and (3) of Regulation AB (such information provided by the servicer or such
other party, the “Loan Performance Information”).
Subsection
33.04 Indemnification;
Remedies.
(a) The
Seller shall indemnify the Purchaser, each affiliate of the Purchaser, and
each
of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible
for the preparation, execution or filing of any report required to be filed
with
the Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act
with
respect to such Securitization Transaction; each broker dealer acting as
underwriter, placement agent or initial purchaser, each Person who controls
any
of such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of the foregoing
and of the Depositor, and shall hold each of them harmless from and against
any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(1)(a) any
untrue statement of a material fact contained or alleged to be contained in
any
information, report, certification, accountants’ letter or other material
provided in written or electronic form under this Section 33 by or on
behalf of any Seller, or provided under this Section 33 by or on behalf of
any Third-Party Originator (collectively, the “Seller Information”), or
(b) the omission or alleged omission to state in the Seller Information a
material fact required to be stated in the Seller Information or necessary
in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, by way of clarification, that
clause (B) of this paragraph shall be construed solely by reference to the
Seller Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the Seller
Information or any portion thereof is presented together with or separately
from
such other information;
(ii) any
failure by any Seller or any Third-Party Originator to deliver any information,
report, certification, accountants’ letter or other material when and as
required under this Section 33; or
(iii) any
breach by any Seller of a representation or warranty set forth in Subsection
33.02(a) or in a writing furnished pursuant to Subsection 33.02(b) and made
as
of a date prior to the closing date of the related Securitization Transaction,
to the
-56-
extent
that such breach is not cured by such closing date, or any breach by any Seller
of a representation or warranty in a writing furnished pursuant to Subsection
33.02(b) to the extent made as of a date subsequent to such closing
date.
In
the
case of any failure of performance described in clause (a)(ii) of this Section,
the Seller shall promptly reimburse the Purchaser, any Depositor, as applicable,
and each Person responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by any Seller or any Third-Party
Originator.
(b) [Reserved].
(c) The
Purchaser shall indemnify the Seller, each affiliate of the Seller and the
respective present and former directors, officers, employees and agents of
each
of the foregoing,
and shall hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them may sustain
arising out of or based upon:
(i) (A)
any untrue statement of a material fact contained or alleged to be contained
in
the Loan Performance Information or (B) the omission or alleged omission to
state in the Loan Performance Information a material fact required to be stated
in the Loan Performance Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, by way of clarification, that clause (B) of this paragraph
shall be construed solely by reference to the Loan Performance Information
and
not to any other information communicated in connection with a sale or purchase
of securities, without regard to whether the Loan Performance Information or
any
portion thereof is presented together with or separately from such other
information; or
(ii) any
failure by the Purchaser or by the related servicer to deliver any Loan
Performance Information as required under Subsection 34.03(e).
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
|
XXXXXX
XXXXXXX MORTGAGE
CAPITAL INC. |
|||
| (Purchaser) | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
|
WILMINGTON
FINANCE INC.
|
|||
| (Seller) | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
EXHIBIT
A
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser and
any prospective Purchaser, and which shall be delivered to the Custodian, or
to
such other Person as the Purchaser shall designate in writing, pursuant to
Section 6 of the Mortgage Loan Purchase and Warranties Agreement to which
this Exhibit is attached (the “Agreement”):
(a) the
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of _________, without recourse” and signed in the name of the last
endorsee (the “Last Endorsee”) by an authorized officer. To
the extent that there is no room on the face of the Mortgage Notes for
endorsements, the endorsement may be contained on an allonge, if state law
so
allows and the Custodian is so advised by the Seller that state law so
allows. If the Mortgage Loan was acquired by either Seller in a
merger, the endorsement must be by “[Last Endorsee], successor by merger to
[name of predecessor]”. If the Mortgage Loan was acquired or
originated by the Last Endorsee while doing business under another name, the
endorsement must be by “[Last Endorsee], formerly known as [previous
name]”;
(b) the
original of any guarantee executed in connection with the Mortgage
Note;
(c) the
original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, such Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer’s Certificate of such
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or
a
copy of such Mortgage certified by such public recording office to be a true
and
complete copy of the original recorded Mortgage will be promptly delivered
to
the Custodian upon receipt thereof by such Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to
be
a true and complete copy of the original recorded Mortgage;
(d) the
originals of all assumption, modification, consolidation or extension
agreements, if any, with evidence of recording thereon;
A-1
(e) the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording (except with respect to MERS Designated
Loans). The Assignment of Mortgage must be duly recorded only if
recordation is either necessary under applicable law or commonly required by
private institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser as provided in this
Agreement. If the Assignment of Mortgage is to be recorded, the
Mortgage shall be assigned to the Purchaser. If the Assignment of
Mortgage is not to be recorded, the Assignment of Mortgage shall be delivered
in
blank. If the Mortgage Loan was acquired by either Seller in a
merger, the Assignment of Mortgage must be made by “[Seller], successor by
merger to [name of predecessor]”. If the Mortgage Loan was acquired
or originated by either Seller while doing business under another name, the
Assignment of Mortgage must be by “[Seller], formerly known as [previous
name]”;
(f) the
originals of all intervening assignments of mortgage (if any) evidencing a
complete chain of assignment from the Seller to the Last Endorsee (or, in the
case of a MERS Designated Loan, MERS) with evidence of recording thereon, or
if
any such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office retains
the
original recorded assignments of mortgage, such Seller shall deliver or cause
to
be delivered to the Custodian, a photocopy of such intervening assignment,
together with (i) in the case of a delay caused by the public recording
office, an Officer’s Certificate of such Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such intervening
assignment of mortgage has been dispatched to the appropriate public recording
office for recordation and that such original recorded intervening assignment
of
mortgage or a copy of such intervening assignment of mortgage certified by
the
appropriate public recording office to be a true and complete copy of the
original recorded intervening assignment of mortgage will be promptly delivered
to the Custodian upon receipt thereof by the Seller; or (ii) in the case of
an intervening assignment where a public recording office retains the original
recorded intervening assignment or in the case where an intervening assignment
is lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a true
and complete copy of the original recorded intervening assignment;
(g) the
original mortgagee policy of title insurance or, in the event such original
title policy is unavailable, a certified true copy of the related policy binder
or commitment for title certified to be true and complete by the title insurance
company;
(h) the
original or, if unavailable, a copy of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage;
and
(i) if
any of the above documents has been executed by a person holding a power of
attorney, an original or photocopy of such power certified by the Seller to
be a
true and correct copy of the original.
In
the
event an Officer’s Certificate of either Seller is delivered to the Purchaser
because of a delay caused by the public recording office in returning any
recorded document,
A-2
such
Seller shall deliver to the Purchaser, within 90 days of the related Closing
Date, an Officer’s Certificate which shall (i) identify the recorded
document, (ii) state that the recorded document has not been delivered to
the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable
recording office to record and return a document submitted for recordation,
and
(iv) specify the date the applicable recorded document will be delivered to
the Custodian; provided, however, that any recorded document
shall in no event be delivered later than one year following the related Closing
Date. An extension of the date specified in clause (iv) above
may be requested from the Purchaser, which consent shall not be unreasonably
withheld.
A-3
EXHIBIT
B
[RESERVED]
B-1
EXHIBIT
C
SELLER’S
OFFICER’S CERTIFICATE
I,
____________________, hereby certify that I am the duly elected
[Vice] President of ________________ [COMPANY], a [state] [federally]
chartered institution organized under the laws of the [state of ____________]
[United States] (the “Company”) and further as follows:
(i) Attached
hereto as Exhibit 1 is a true, correct and complete copy of the charter
of the Company which is in full force and effect on the date hereof and which
has been in effect without amendment, waiver, rescission or modification since
___________.
(ii) Attached
hereto as Exhibit 2 is a true, correct and complete copy of the bylaws of
the Company which are in effect on the date hereof and which have been in effect
without amendment, waiver, rescission or modification since
___________.
(iii) Attached
hereto as Exhibit 3 is an original certificate of good standing of the
Company issued within ten days of the date hereof, and no event has occurred
since the date thereof which would impair such standing.
(iv) Attached
hereto as Exhibit 4 is a true, correct and complete copy of the corporate
resolutions of the Board of Directors of the Company authorizing the Company
to
execute and deliver the Mortgage Loan Purchase and Warranties Agreement, dated
as of November 1, 2006 (the “Purchase Agreement”), by and between Xxxxxx
Xxxxxxx Mortgage Capital Inc. (the “Purchaser”) and the Company, [and to
endorse the Mortgage Notes and execute the Assignments of Mortgages by original
[or facsimile] signature], and such resolutions are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or modification
since ____________.
(v) Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the Purchase
Agreement, [the sale of the mortgage loans] or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
(vi) Neither
the consummation of the transactions contemplated by, nor the fulfillment of
the
terms of the Purchase Agreement conflicts or will conflict with or results
or
will result in a breach of or constitutes or will constitute a default under
the
charter or by-laws of the Company or, to the best of my knowledge, the terms
of
any indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or order,
rule, regulations, writ, injunction or decree of any court,
C-1
governmental
authority or regulatory body to which the Company is subject or by which it
is
bound.
(vii) To
the best of my knowledge, there is no action, suit, proceeding or investigation
pending or threatened against the Company which, in my judgment, either in
any
one instance or in the aggregate, may result in any material adverse change
in
the business, operations, financial condition, properties or assets of the
Company or in any material impairment of the right or ability of the Company
to
carry on its business substantially as now conducted or in any material
liability on the part of the Company or which would draw into question the
validity of the Purchase Agreement, or the mortgage loans or of any action
taken
or to be taken in connection with the transactions contemplated hereby, or
which
would be likely to impair materially the ability of the Company to perform
under
the terms of the Purchase Agreement.
(viii) Each
person listed on Exhibit 5 attached hereto who, as an officer or
representative of the Company, signed (a) the Purchase Agreement, and
(b) any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the respective
times of such signing and delivery, and is now, a duly elected or appointed,
qualified and acting officer or representative of the Company, who holds the
office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their genuine
signatures.
(ix) The
Company is duly authorized to engage in the transactions described and
contemplated in the Purchase Agreement.
C-2
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
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Dated:____________________
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By:___________________________
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Name:_________________________
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[Seal]
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Title:
Vice President
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I,
________________________, an [Assistant] Secretary of ______________ [COMPANY],
hereby certify that ____________ is the duly elected, qualified and acting
[Vice] President of the Company and that the signature appearing above is [her]
[his] genuine signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
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Dated:____________________
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By:___________________________
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Name:_________________________
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Title:
[Assistant] Secretary
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C-3
Exhibit
5
to
Company's
Officer's Certificate
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NAME
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TITLE
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SIGNATURE
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C-4
EXHIBIT
D
[RESERVED]
D-1
EXHIBIT
E
FORM
OF SECURITY RELEASE CERTIFICATION
___________________,
200__
[Federal
Home Loan Bank of
______
(the “Association”)]
________________________
________________________
________________________
|
Attention:
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___________________________
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___________________________
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Re:
|
Notice
of Sale and Release of
Collateral
|
Dear
Sirs:
This
letter serves as notice that ________________________ [COMPANY] a [type of
entity], organized pursuant to the laws of [the State of incorporation] (the
“Company”) has committed to sell certain mortgage loans to Xxxxxx Xxxxxxx
Mortgage Capital Inc. under the Mortgage Loan Purchase and Warranties
Agreement. The Company warrants that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. are in addition to and beyond any
collateral required to secure advances made by the Association to the
Company.
The
Company acknowledges that the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc. shall not be used as additional or substitute collateral
for advances made by the Association. Xxxxxx Xxxxxxx Mortgage Capital
Inc. understands that the balance of the Company’s mortgage loan portfolio may
be used as collateral or additional collateral for advances made by the
Association, and confirms that it has no interest therein.
Execution
of this letter by the Association shall constitute a full and complete release
of any security interest, claim, or lien which the Association may have against
the mortgage loans to be sold to Xxxxxx Xxxxxxx Mortgage Capital
Inc.
E-1
Very
truly yours,
____________________________
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
Acknowledged
and approved:
[FEDERAL
HOME LOAN BANK OF]
__________________________
By:______________________________
Name:___________________________
Title:____________________________
Date:____________________________
E-2
EXHIBIT
F
FORM
OF SECURITY RELEASE CERTIFICATION
I. Release
of Security Interest
The
financial institution named below hereby relinquishes any and all right, title,
interest, lien or claim of any kind it may have in all mortgage loans described
on the attached Schedule A (the “Mortgage Loans”), to be purchased
by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on the next
page
(the “Company”) pursuant to that certain Mortgage Loan Purchase and
Warranties Agreement, dated as of November 1, 2006, and certifies that all
notes, mortgages, assignments and other documents in its possession relating
to
such Mortgage Loans have been delivered and released to the Company or its
designees, as of the date and time of the sale of such Mortgage Loans to Xxxxxx
Xxxxxxx Mortgage Capital Inc. Such release shall be effective
automatically without any further action by any party upon payment in one or
more installments, in immediately available funds, of $_____________, in
accordance with the wire instructions set forth below.
Name,
Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
____________________________
____________________________
____________________________
By:_____________________________
F-1
II. Certification
of Release
The
Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage Capital Inc.
that, as of the date and time of the sale of the above-mentioned Mortgage Loans
to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in the Mortgage
Loans released by the above-named financial institution comprise all security
interests relating to or affecting any and all such Mortgage
Loans. The Company warrants that, as of such time, there are and will
be no other security interests affecting any or all of such Mortgage
Loans.
_____________________________
By:__________________________
Title:_________________________
Date:_________________________
F-2
EXHIBIT
G
FORM
OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On
this
___ day of ____________, ________, Wilmington Finance Inc. (“Seller”), as
the Seller under (i) that certain Purchase Price and Terms Agreement, dated
as of ________, 200_ (the “PPTA”), and (ii) that certain Mortgage
Loan Purchase and Warranties Agreement, dated as of November 1, 2006 (the
“Purchase Agreement”), do hereby sell, transfer, assign, set over and
convey to Xxxxxx Xxxxxxx Mortgage Capital, Inc. (“Purchaser”) as the
Purchaser under the Agreements (as defined below) without recourse, but subject
to the terms of the Agreements, all right, title and interest of, in and to
the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Exhibit A (the “Mortgage Loans”), together with the Mortgage
Files and the related Servicing Rights and all rights and obligations arising
under the documents contained therein. Each Mortgage Loan subject to
the Agreements was underwritten in accordance with, and conforms to, the
Underwriting Guidelines attached hereto as
Exhibit C. Pursuant to Section 6 of the Purchase
Agreement, the Seller has delivered to the Custodian the documents for each
Mortgage Loan to be purchased as set forth in the Purchase
Agreement. The ownership of each Mortgage Note, Mortgage and the
contents of the Mortgage File and Servicing File is vested in the Purchaser
and
the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Seller at the will of the Purchaser in a custodial capacity
only. The PPTA and the Purchase Agreement shall collectively be
referred to as the “Agreements” herein.
The
Mortgage Loan Package characteristics of the Mortgage Loans subject hereto
are
set forth on Exhibit B hereto.
In
accordance with Section 6 of the Purchase Agreement, the Purchaser accepts
the Mortgage Loans listed on Exhibit A attached
hereto. Notwithstanding the foregoing the Purchaser does not waive
any rights or remedies it may have under the Agreements.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Purchase Agreement.
[SIGNATURE
PAGE FOLLOWS]
G-1
WILMINGTON
FINANCE INC.
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By:
_______________________________________
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Name: ________________________________
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Title:
________________________________
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Accepted
and Agreed:
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
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By:
______________________________________
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Name:
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Title:
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G-2
EXHIBIT
A
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
THE
MORTGAGE LOANS
G-3
EXHIBIT
B
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS
AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF EACH MORTGAGE LOAN
PACKAGE
Pool
Characteristics of the Mortgage Loan Package as delivered on the related Closing
Date:
No
Mortgage Loan has: (1) an outstanding principal balance less
than $_____; (2) an origination date earlier than __ months prior to the
related Cut-off Date; (3) a CLTV of greater than ____%; (4) a FICO
Score of less than ___; or (5) a debt-to-income ratio of more than
___%. Each Mortgage Loan has a Mortgage Interest Rate of at least
___% per annum and an outstanding principal balance of less than
$______. Each Adjustable Rate Mortgage Loan has an Index of
[______].
G-4
EXHIBIT
C
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING
GUIDELINES
G-5
EXHIBIT
H
UNDERWRITING GUIDELINES
H-1
Exhibit
J
EXHIBIT
I
FORM
OF
ASSIGNMENT AND RECOGNITION AGREEMENT
THIS
ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __, 20__]
(“Agreement”), among Xxxxxx Xxxxxxx Mortgage Capital Inc.
(“Assignor”), [____________________] (“Assignee”) and [SELLERS]
(the “Company”):
For
and
in consideration of the sum of TEN DOLLARS ($10.00) and other valuable
consideration the receipt and sufficiency of which hereby are acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
Assignment
and Conveyance
1. The
Assignor hereby conveys, sells, grants, transfers and assigns to the Assignee
all of the right, title and interest of the Assignor, as purchaser, in, to
and
under (a) those certain Mortgage Loans listed on the schedule (the
“Mortgage Loan Schedule”) attached hereto as Exhibit A (the
“Mortgage Loans”) and (b) except as described below, that certain
Mortgage Loan Purchase and Warranties Agreement (the “Purchase
Agreement”), dated as of November 1, 2006, between the Assignor, as
purchaser (the “Purchaser”), and the Company, as seller, solely insofar
as the Purchase Agreement relates to the Mortgage Loans.
The
Assignor specifically reserves and does not assign to the Assignee hereunder
(i) any and all right, title and interest in, to and under and any
obligations of the Assignor with respect to any mortgage loans subject to the
Purchase Agreement which are not the Mortgage Loans set forth on the Mortgage
Loan Schedule and are not the subject of this Agreement or (ii) the rights
of the Purchaser under Section 9.04 of the Purchase
Agreement.
Recognition
of the Company
2. From
and after the date hereof (the “Securitization Closing Date”), the
Company shall and does hereby recognize that the Assignee will transfer the
Mortgage Loans and assign its rights under the Purchase Agreement (solely to
the
extent set forth herein) and this Agreement to [__________________] (the
“Trust”) created pursuant to a Pooling and Servicing Agreement, dated as
of [______], 200_ (the “Pooling Agreement”), among the Assignee, the
Assignor, [___________________], as trustee (including its successors in
interest and any successor trustees under the Pooling Agreement, the
“Trustee”), [____________________], as servicer (including its successors
in interest and any successor servicer under the Pooling Agreement, the
“Servicer”). The Company hereby acknowledges and agrees that
from and after the date hereof (i) the Trust will be the owner of the
Mortgage Loans, (ii) the Company shall look solely to the Trust for
performance of any obligations of the Assignor insofar as they relate to the
Mortgage Loans, (iii) the Trust (including the Trustee and the Servicer
acting on the Trust’s behalf) shall have all the rights and remedies available
to the Assignor, insofar as they relate to the Mortgage Loans, under the
Purchase Agreement, including, without limitation, the enforcement of the
document delivery requirements set forth in Section 6 of the
Purchase Agreement, and shall be entitled to enforce all of the obligations
of
the Company thereunder insofar as they relate to the Mortgage Loans, and
(iv) all references to the Purchaser, the
I-1
Custodian
or the Bailee under the Purchase Agreement insofar as they relate to the
Mortgage Loans, shall be deemed to refer to the Trust (including the Trustee
and
the Servicer acting on the Trust’s behalf). Neither the Company nor
the Assignor shall amend or agree to amend, modify, waiver, or otherwise alter
any of the terms or provisions of the Purchase Agreement which amendment,
modification, waiver or other alteration would in any way affect the Mortgage
Loans or the Company’s performance under the Purchase Agreement with respect to
the Mortgage Loans without the prior written consent of the
Trustee.
Representations
and Warranties of the Company
3. The
Company warrants and represents to the Assignor, the Assignee and the Trust
as
of the date hereof that:
|
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(a)
|
The
Company is duly organized, validly existing and in good standing
under the
laws of the jurisdiction of its
incorporation;
|
|
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(b)
|
The
Company has full power and authority to execute, deliver and perform
its
obligations under this Agreement and has full power and authority
to
perform its obligations under the Purchase Agreement. The
execution by the Company of this Agreement is in the ordinary course
of
the Company’s business and will not conflict with, or result in a breach
of, any of the terms, conditions or provisions of the Company’s charter or
bylaws or any legal restriction, or any material agreement or instrument
to which the Company is now a party or by which it is bound, or result
in
the violation of any law, rule, regulation, order, judgment or decree
to
which the Company or its property is subject. The execution,
delivery and performance by the Company of this Agreement have been
duly
authorized by all necessary corporate action on part of the
Company. This Agreement has been duly executed and delivered by
the Company, and, upon the due authorization, execution and delivery
by
the Assignor and the Assignee, will constitute the valid and legally
binding obligation of the Company, enforceable against the Company
in
accordance with its terms except as enforceability may be limited
by
bankruptcy, reorganization, insolvency, moratorium or other similar
laws
now or hereafter in effect relating to creditors’ rights generally, and by
general principles of equity regardless of whether enforceability
is
considered in a proceeding in equity or at
law;
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(c)
|
No
consent, approval, order or authorization of, or declaration, filing
or
registration with, any governmental entity is required to be obtained
or
made by the Company in connection with the execution, delivery or
performance by the Company of this Agreement;
and
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(d)
|
There
is no action, suit, proceeding or investigation pending or threatened
against the Company, before any court, administrative agency or other
tribunal, which would draw into question the validity of this Agreement
or
the Purchase Agreement, or which, either in any one instance or in
the
aggregate, would result in any material adverse change in the ability
of
the Company to perform its
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I-2
|
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obligations
under this Agreement or the Purchase Agreement, and the Company is
solvent.
|
4. Pursuant
to Section 13 of the Purchase Agreement, the Company hereby
represents and warrants, for the benefit of the Assignor, the Assignee and
the
Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the applicable Closing Date; provided,
however, that the Seller shall restate the representations and warranties set
forth on Exhibit B that match the Servicing
Representations and Warranties as set forth in Subsection 9.02 of the Purchase
Agreement as of the applicable Transfer Date unless otherwise specifically
stated in such representations and warranties.
Remedies
for Breach of Representations and Warranties
5. The
Company hereby acknowledges and agrees that the remedies available to the
Assignor, the Assignee and the Trust (including the Trustee and the Servicer
acting on the Trust’s behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3
and 4 hereof shall be as set forth in Subsection 9.03 of the
Purchase Agreement as if they were set forth herein (including without
limitation the repurchase and indemnity obligations set forth
therein).
Miscellaneous
6. This
Agreement shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of law principles, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
7. No
term or provision of this Agreement may be waived or modified unless such waiver
or modification is in writing and signed by the party against whom such waiver
or modification is sought to be enforced, with the prior written consent of
the
Trustee.
8. This
Agreement shall inure to the benefit of (i) the successors and assigns of
the parties hereto and (ii) the Trust (including the Trustee and the
Servicer acting on the Trust’s behalf). Any entity into which
Assignor, Assignee or Company may be merged or consolidated shall, without
the
requirement for any further writing, be deemed Assignor, Assignee or Company,
respectively, hereunder.
9. Each
of this Agreement and the Purchase Agreement shall survive the conveyance of
the
Mortgage Loans and the assignment of the Purchase Agreement (to the extent
assigned hereunder) by Assignor to Assignee and by Assignee to the Trust and
nothing contained herein shall supersede or amend the terms of the Purchase
Agreement.
10. This
Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and
all such counterparts shall constitute one and the same instrument.
11. In
the event that any provision of this Agreement conflicts with any provision
of
the Purchase Agreement with respect to the Mortgage Loans, the terms of this
Agreement shall control.
I-3
12. Capitalized
terms used in this Agreement (including the exhibits hereto) but not defined
in
this Agreement shall have the meanings given to such terms in the Purchase
Agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
duly authorized officers as of the date first above written.
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WILMINGTON
FINANCE INC.
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By:
__________________________________
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Name: ____________________________
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Its:
_________________________________
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XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
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By:
__________________________________
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Name: ____________________________
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Its:
_________________________________
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[__________________________]
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By:
__________________________________
|
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Name: ____________________________
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Its:
_________________________________
|
I-4
EXHIBIT
A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage
Loan Schedule
I-5
EXHIBIT
B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations
and Warranties
Regarding
Individual Mortgage Loans
I-6
