FLOW SERVICING AGREEMENT between GOLDMAN SACHS MORTGAGE COMPANY, Owner and AVELO MORTGAGE, L.L.C., Servicer Dated as of January 1, 2006 CONVENTIONAL FIXED AND ADJUSTABLE RATE RESIDENTIAL MORTGAGE LOANS
EXECUTION
COPY
between
XXXXXXX
XXXXX MORTGAGE COMPANY,
Owner
and
AVELO
MORTGAGE, L.L.C.,
Servicer
Dated
as
of January 1, 2006
CONVENTIONAL
FIXED AND ADJUSTABLE
RATE
RESIDENTIAL MORTGAGE LOANS
TABLE
OF
CONTENTS
Page
ARTICLE
I
DEFINITIONS
|
Section
1.01
|
Definitions
|
1
|
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ARTICLE
II
|
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|
SERVICING
|
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|
Section
2.01
|
Servicer
to Act as Servicer
|
14
|
|
Section
2.02
|
Liquidation
of Mortgage Loans
|
15
|
|
Section
2.03
|
Collection
of Mortgage Loan Payments
|
15
|
|
Section
2.04
|
Establishment
of and Deposits to Custodial Account
|
15
|
|
Section
2.05
|
Permitted
Withdrawals From Custodial Account
|
17
|
|
Section
2.06
|
Establishment
of and Deposits to Escrow Account
|
18
|
|
Section
2.07
|
Permitted
Withdrawals From Escrow Account
|
19
|
|
Section
2.08
|
Payment
of Taxes, Insurance and Other Charges With Respect to First Lien
Loans
|
19
|
|
Section
2.09
|
Protection
of Accounts
|
20
|
|
Section
2.10
|
Maintenance
of Hazard Insurance
|
20
|
|
Section
2.11
|
Maintenance
of Fidelity Bond and Errors and Omissions Insurance
|
22
|
|
Section
2.12
|
Inspections
|
22
|
|
Section
2.13
|
Restoration
of Mortgaged Property
|
22
|
|
Section
2.14
|
Liquidation
Reports
|
23
|
|
Section
2.15
|
Notification
of Adjustments
|
23
|
|
Section
2.16
|
Reports
of Foreclosures and Abandonments of Mortgaged Property
|
23
|
|
Section
2.17
|
Credit
Reporting
|
23
|
|
Section
2.18
|
Title,
Management and Disposition of REO Property
|
23
|
|
Section
2.19
|
Permitted
Withdrawals with Respect to REO Property
|
25
|
|
Section
2.20
|
Real
Estate Owned Reports
|
25
|
|
Section
2.21
|
Reports
of Foreclosures and Abandonments of Mortgaged Property
|
25
|
|
Section
2.22
|
Recordation
of Assignments of Mortgage
|
25
|
|
Section
2.23
|
Additional
Servicing Requirements
|
25
|
|
Section
2.24
|
Tax
and Flood Service Contracts
|
26
|
|
ARTICLE
III
|
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|
PAYMENTS
TO OWNER
|
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|
Section
3.01
|
Remittances
|
00
|
-x-
|
Xxxxxxx
0.00
|
Xxxxxxxxxx
to Owner
|
27
|
|
Section
3.03
|
Advances
by Servicer
|
27
|
|
Section
3.04
|
Principal
and Interest Advances by Servicer
|
27
|
|
ARTICLE
IV
|
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|
GENERAL
SERVICING PROCEDURES
|
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|
Section
4.01
|
Transfers
of Mortgaged Property
|
28
|
|
Section
4.02
|
Satisfaction
of Mortgages and Release of Mortgage Files
|
28
|
|
Section
4.03
|
Servicing
Compensation
|
29
|
|
Section
4.04
|
Right
to Examine Servicer Records
|
29
|
|
Section
4.05
|
Compliance
with Xxxxx-Xxxxx-Xxxxxx Act of 1999
|
30
|
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ARTICLE
V
|
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|
SERVICER
TO COOPERATE
|
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|
Section
5.01
|
Provision
of Information
|
30
|
|
Section
5.02
|
Financial
Statements; Servicing Facilities
|
30
|
|
Section
5.03
|
Covenant
|
30
|
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ARTICLE
VI
|
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|
TERMINATION
|
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|
Section
6.01
|
Liability
of the Owner and the Servicer
|
31
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Section
6.02
|
Termination
|
31
|
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ARTICLE
VII
|
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|
BOOKS
AND RECORDS
|
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|
Section
7.01
|
Possession
of Servicing Files Prior to the Subsequent Transfer Date
|
32
|
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ARTICLE
VIII
|
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|
INDEMNIFICATION
AND ASSIGNMENT
|
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|
Section
8.01
|
Indemnification
|
33
|
|
Section
8.02
|
Limitation
on Liability of Servicer and Others
|
33
|
|
Section
8.03
|
Limitation
on Resignation and Assignment by Servicer
|
34
|
|
Section
8.04
|
Assignment
by Owner
|
35
|
|
Section
8.05
|
Merger
or Consolidation of the Servicer
|
35
|
-ii-
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ARTICLE
IX
|
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|
REPRESENTATIONS
AND WARRANTIES
|
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|
Section
9.01
|
Representations
and Warranties Regarding the Servicer
|
36
|
|
Section
9.02
|
Representations
and Warranties of the Owner
|
37
|
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ARTICLE
X
|
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|
DEFAULT
|
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|
Section
10.01
|
Events
of Default
|
38
|
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Section
10.02
|
Waiver
of Defaults
|
40
|
|
ARTICLE
XI
|
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|
MISCELLANEOUS
PROVISIONS
|
||
|
Section
11.01
|
Notices
|
40
|
|
Section
11.02
|
Waivers
|
40
|
|
Section
11.03
|
[Reserved]
|
40
|
|
Section
11.04
|
Entire
Agreement; Amendment
|
41
|
|
Section
11.05
|
Execution;
Binding Effect
|
41
|
|
Section
11.06
|
Headings
|
41
|
|
Section
11.07
|
Applicable
Law
|
41
|
|
Section
11.08
|
Relationship
of Parties
|
41
|
|
Section
11.09
|
Severability
of Provisions
|
41
|
|
Section
11.10
|
General
Interpretive Principles
|
41
|
|
Section
11.11
|
Reproduction
of Documents
|
42
|
|
Section
11.12
|
Further
Agreements
|
42
|
|
Section
11.13
|
No
Solicitation
|
42
|
|
Section
11.14
|
Waiver
of Trial by Jury
|
42
|
|
Section
11.15
|
Submission
To Jurisdiction; Waivers
|
43
|
|
Section
11.16
|
Confidential
Information
|
43
|
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ARTICLE
XII
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|
COMPLIANCE
WITH REGULATION AB
|
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|
Section
12.01
|
Intent
of the Parties; Reasonableness
|
44
|
|
Section
12.02
|
Additional
Representations and Warranties of the Servicer
|
45
|
|
Section
12.03
|
Information
to Be Provided by the Servicer
|
45
|
|
Section
12.04
|
Servicer
Compliance Statement
|
49
|
|
Section
12.05
|
Report
on Assessment of Compliance and Attestation
|
49
|
|
Section
12.06
|
Use
of Subservicers and Subcontractors
|
50
|
|
Section
12.07
|
Indemnification;
Remedies
|
51
|
-iii-
EXHIBITS
|
SCHEDULE
1
|
REQUIRED
FIELDS FOR MONTHLY REMITTANCE REPORT
|
|
SCHEDULE
2
|
CONTENTS
OF EACH MORTGAGE LOAN DOCUMENTS
|
|
SCHEDULE
3
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
1
|
FORM
OF MONTHLY REMITTANCE ADVICE
|
|
EXHIBIT
2
|
FORM
OF CUSTODIAL ACCOUNT CERTIFICATION
|
|
EXHIBIT
3
|
FORM
OF CUSTODIAL ACCOUNT LETTER AGREEMENT
|
|
EXHIBIT
4
|
FORM
OF ESCROW ACCOUNT CERTIFICATION
|
|
EXHIBIT
5
|
FORM
OF ESCROW ACCOUNT LETTER AGREEMENT
|
|
EXHIBIT
6
|
FORM
OF ANNUAL CERTIFICATION
|
|
EXHIBIT
7
|
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
|
|
EXHIBIT
8
|
SUBPRIME
DEFAULT AND REO SERVICING STANDARDS
|
|
EXHIBIT
9
|
REO
SERVICING STANDARDS
|
|
EXHIBIT
10
|
FORM
OF NOTICE LETTER
|
-iv-
This
Flow
Servicing Agreement (the “Agreement”)
is
entered into as of the 1st
day of
January 2006, by and between AVELO MORTGAGE, L.L.C. (the “Servicer”),
a
Delaware limited liability company and XXXXXXX XXXXX MORTGAGE COMPANY, a
New
York limited partnership (the “Owner”).
WHEREAS,
the Owner has purchased certain conventional, residential, fixed and adjustable
rate, first and second lien mortgage loans (the “Mortgage
Loans”)
and
the right to service such Mortgage Loans and the right to retain the servicing
fee and certain ancillary income related to the Mortgage Loans (the
“Servicing Rights”)
from
various originators which were delivered as whole loans on a servicing released
basis pursuant to the related Purchase Agreement (as defined below) by and
between the Owner and Seller (as defined below);
WHEREAS,
the Servicer regularly services residential mortgage loans and is or will
be
servicing the Mortgage Loans pursuant to this Agreement;
WHEREAS,
the Owner will retain ownership of the Servicing Rights and the right to
sell or
assign the Servicing Rights; and
WHEREAS,
the Owner desires, and the Servicer has agreed to service and administer
the
Mortgage Loans that become subject to this Agreement on an “at-will” basis, and
the parties desire to provide the terms and conditions of such servicing
by the
Servicer.
NOW,
THEREFORE, in consideration of the mutual covenants made herein and for other
good and valuable consideration the sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Definitions.
The
following terms are defined as follows (except as otherwise agreed by the
parties).
Accepted
Servicing Practices:
With
respect to any Mortgage Loan or REO Property, each of (a) those mortgage
servicing practices (including collection procedures) 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 and in compliance with all applicable federal, state and local
laws
which (i) servicing practices are in compliance with all federal, state and
local laws and regulations, (ii) shall be in accordance with the Servicer’s
policies and procedures as amended from time to time for mortgage loans
of the
same type, (iii) are in accordance with the terms of the Mortgage and the
Mortgage Note and (iv) at a minimum based on the requirements set forth
from time to time by Xxxxxx Mae.
Adjustable
Rate Mortgage Loan:
An
adjustable rate Mortgage Loan.
Advance
Facility:
As
defined in Section 8.03.
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.
Agreement:
This
agreement between the Owner and the Servicer for the servicing and
administration of the Mortgage Loans.
Ancillary
Income:
All
income derived from the Mortgage Loans (other than payments or other collections
in respect of principal, interest, Escrow Payments, Servicing Fees and
prepayment penalties or premiums attributable to the Mortgage Loans), including
but not limited to interest received on funds deposited in the Custodial
Account
or any Escrow Account (subject to applicable law), all late charges, assumption
fees, reconveyance fees, subordination fees, demand statement fees, modification
fees, if any, escrow account benefits, reinstatement fees, fees received
with
respect to checks on bank drafts returned by the related bank for insufficient
funds, and other similar types of fees arising from or in connection with
any
Mortgage Loan to the extent not otherwise payable to the Mortgagor under
applicable law or pursuant to the terms of the related Mortgage
Note.
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
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
Owner.
BPO:
A
broker price opinion.
Business
Day:
Any day
other than (i) a Saturday or Sunday, (ii) a day on which banking and savings
and
loan institutions in (a) the State of New York, (b) the state in which
the
Servicer’s servicing operations are located or (c) or (iii) the State in which
the Custodian’s operations are located, are authorized or obligated by law or
executive order to be closed.
CLTV:
As of
any date and as to any Second Lien Loan, the ratio, expressed as a percentage,
of (a) the sum of (i) the outstanding principal balance of the Second
Lien Loan and (ii) the outstanding principal balance of 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 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:
The
Internal Revenue Code of 1986, as amended.
Commission:
The
United States Securities and Exchange Commission.
-2-
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.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to
Section 2.04.
Custodial
Agreement:
With
respect to each Mortgage Loan, the agreement between the Owner and the
custodian
of the Mortgage Loan Documents for such Mortgage Loan, governing the retention
of the originals of each Mortgage Note, Mortgage, Assignment of Mortgage
and
other documents constituting the related Mortgage Loan Documents.
Custodian:
With
respect to each Mortgage Loan, the custodian of the Mortgage Loan Documents
under the related Custodial Agreement, or its successor in interest or
permitted
assigns, or any successor to the Custodian under the related Custodial
Agreement
as therein provided.
Cut-off
Date:
The
date set forth as such in the related Purchase Agreement.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date:
The
last day of the month preceding the related Remittance Date.
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace.
Due
Period:
With
respect to amounts collected by the Servicer and required to be remitted
to the
Owner on each Remittance Date, the period commencing on the first day of
the
month and ending on the last day of the month preceding the month of the
Remittance Date.
Eligible
Investments:
Any one
or more of the obligations and securities listed below which investment
provides
for a date of maturity not later than one day prior to the Remittance Date
in
each month (or such other date as permitted under this Agreement):
(i) direct
obligations of, and obligations fully guaranteed as to timely payment of
principal and interest by, the United States of America or any agency or
instrumentality of the United States of America the obligations of which
are
backed by the full faith and credit of the United States of America
(“Direct
Obligations”);
(ii) federal
funds, demand and time deposits in, certificates of deposits of, or bankers’
acceptances issued by, any depository institution or trust company (including
U.S. subsidiaries of foreign depositories) incorporated or organized under
the
laws of the United States of America or any state thereof and subject to
supervision and examination by federal or state banking authorities, so
long as
at the time of such investment or the contractual commitment providing
for such
investment the commercial paper or other short-term debt obligations of
such
depository institution or trust company (or, in the case of a depository
institution or trust company which is the principal subsidiary of a holding
company, the commercial paper or other short-term debt or deposit obligations
of
such holding company or deposit institution, as the case may be) have been
rated
by each Rating Agency in its highest short-term rating category or one
of its
two highest long-term rating categories;
-3-
(iii) repurchase
agreements collateralized by Direct Obligations or securities guaranteed
by
Xxxxxx Xxx or Xxxxxxx Mac with any registered broker/dealer subject to
Securities Investors’ Protection Corporation jurisdiction or any commercial bank
insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured
and unguaranteed obligation rated by each Rating Agency in its highest
short-term rating category;
(iv) securities
bearing interest or sold at a discount issued by any corporation incorporated
under the laws of the United States of America or any state thereof which
have a
credit rating from each Rating Agency, at the time of investment or the
contractual commitment providing for such investment, at least equal to
one of
the two highest long-term credit rating categories of each Rating Agency;
provided,
however,
that
securities issued by any particular corporation will not be Eligible Investments
to the extent that investment therein will cause the then outstanding principal
amount of securities issued by such corporation to exceed 20% of the aggregate
principal amount of all Eligible Investments in the Custodial Accounts
and the
Escrow Accounts; provided,
further,
that
such securities will not be Eligible Investments if they are published
as being
under review with negative implications from either Rating Agency;
(v) commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not
more
than 180 days after the date of issuance thereof) rated by each Rating
Agency in its highest short-term rating category;
(vi) certificates
or receipts representing direct ownership interests in future interest
or
principal payments on obligations of the United States of America or its
agencies or instrumentalities (which obligations are backed by the full
faith
and credit of the United States of America) held by a custodian in safekeeping
on behalf of the holders of such receipts; and
(vii) any
other
demand, money market, common trust fund or time deposit or obligation,
or
interest-bearing or other security or investment rated in the highest rating
category by each Rating Agency;
provided,
however,
that
(a) any such instrument shall be acceptable to the Rating Agencies, and
(b) no such instrument shall be an Eligible Investment if such instrument
evidences either (i) a right to receive only interest payments with respect
to the obligations underlying such instrument, or (ii) both principal and
interest payments derived from obligations underlying such instrument and
the
principal and interest payments with respect to such instrument provide
a yield
to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations.
-4-
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Servicer
pursuant
to Section 2.12.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to
Section 2.06.
Escrow
Payment:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and
any other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in
Section 10.01.
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 Servicing Guide and all amendments
or additions thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
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.
Fidelity
Bond:
A
fidelity bond to be maintained by the Servicer pursuant to
Section 2.11.
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.
Flood
Zone Service Contract:
A
transferable contract maintained for a Mortgaged Property with a nationally
recognized flood zone service provider for the purpose of obtaining the
current
flood zone status relating to such Mortgaged Property.
Xxxxxxx
Mac:
The
Federal Home Loan Mortgage Corporation, or any successor thereto.
-5-
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 HOEPA, or (b) classified as a “high
cost,” “threshold,” “covered,” “predatory” or similar loan under any other
applicable state, federal or local law (or a similarly classified loan
using
different terminology under a law imposing heightened regulatory scrutiny
or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees).
HOEPA:
The
federal Home Ownership and Equity Protection Act of 1994, as
amended.
HOEPA
Loan:
A
Mortgage Loan which (a) the Owner has identified to the Servicer in the
Mortgage Loan Schedule as being subject to HOEPA, or (b) which the Servicer
discovers is subject to HOEPA.
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 FHA Mortgage Insurance. 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:
With
respect to each Adjustable Rate Mortgage Loan, the index set forth in the
related Mortgage Note.
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 Mortgage Loan Schedule, on which the Mortgage
Interest Rate is adjusted.
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 in the related Mortgage Loan Documents.
Liquidation
Proceeds: Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise, or the sale of the related Mortgaged Property
if
the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
Loan-to-Value
Ratio
or
LTV:
With
respect to any Mortgage Loan, the ratio (expressed as a percentage) of
the
outstanding principal amount of the Mortgage Loan, to the lesser of (a) the
Appraised Value of the Mortgaged Property at origination or (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
-6-
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized
and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan as to which the related mortgage or assignment of Mortgage
has
been recorded in the name of MERS, as agent for the holder from time to
time of
the Mortgage Note and which is identified as a MERS Mortgage Loan on the
related
Mortgage Loan Schedule.
MERS®
System:
The
system of recording transfers of Mortgages electronically maintained by
MERS.
MIN:
The
Mortgage Identification Number of Mortgage Loans registered with MERS on
the
MERS® System.
MOM
Loan:
Any
Mortgage Loan where MERS acts as the mortgagee of record of such Mortgage
Loan,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns, at the origination thereof.
Monthly
Advance:
The
portion of Monthly Payment delinquent with respect to each Mortgage Loan
at the
close of business on the Business Day immediately preceding the Remittance
Date
required to be advanced by the Servicer pursuant to Section 3.04.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage Loan,
or the
scheduled monthly payment of interest, if no principal is due.
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 an unsubordinated estate in fee simple in
real
property securing the Mortgage Note; except that with respect to real property
located in jurisdictions in which the use of leasehold estates for residential
properties is a widely-accepted practice, the mortgage, deed of trust or
other
instrument securing the Mortgage Note may secure and create a first lien,
in the
case of a First Lien Loan, or a second lien, in the case of a Second Lien
Loan,
upon a leasehold estate of the Mortgagor.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Schedule
3
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.
-7-
Mortgage
Loan Documents:
The
documents listed on Schedule
2
hereto
pertaining to any Mortgage Loan.
Mortgage
Loan Package:
A pool
of Mortgage Loans to be serviced by the Servicer hereunder and identified
in the
related Notice Letter.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to
the
Owner, which shall be equal to the Mortgage Interest Rate minus the Servicing
Fee.
Mortgage
Loan Schedule:
The
schedule of Mortgage Loans with respect to a Mortgage Loan Package, in
a form
mutually agreed upon by the Owner and the Servicer, to be delivered by
the Owner
to the Servicer, which schedule shall include such fields as the Owner
and the
Servicer may from time to time agree upon, including, on the date of this
Agreement, the following information with respect to each Mortgage Loan:
(1) the name of the Seller and the Seller’s Mortgage Loan identifying
number; (2) the Mortgagor’s name; (3) the street address of the
Mortgaged Property including the city, state and zip code; (4) a code
indicating whether the Mortgaged Property is owner-occupied, a second home
or
investment property; (5) the number and type of residential units
constituting the Mortgaged Property (i.e. a single family residence, a
2-4
family residence, a unit in a condominium project or a unit in a planned
unit
development, manufactured housing); (6) 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;
(7) the Loan-to-Value Ratio at origination; (8) with respect to First
Lien Loans, the LTV and with respect to Second Lien Loans, the CLTV;
(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 amount of the
Monthly Payment as of the related Cut-off Date; (13) the last payment date
on which a Monthly Payment was actually applied to pay interest and the
outstanding principal balance; (14) the original principal amount of the
Mortgage Loan; (15) 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;
(16) with respect to Adjustable Rate Mortgage Loans, the Interest Rate
Adjustment Date; (17) with respect to Adjustable Rate Mortgage Loans, the
Gross Margin; (18) with respect to Adjustable Rate Mortgage Loans, the
Lifetime Rate Cap under the terms of the Mortgage Note; (19) with respect
to Adjustable Rate Mortgage Loans, a code indicating the type of Index;
(20) with respect to Adjustable Rate Mortgage Loans, the Periodic Rate Cap
under the terms of the Mortgage Note; (21) with respect to Adjustable Rate
Mortgage Loans, the Periodic Rate Floor under the terms of the Mortgage
Note;
(22) the type of Mortgage Loan (i.e., Fixed Rate Mortgage Loan, Adjustable
Rate Mortgage Loan, First Lien Mortgage Loan, Second Lien Mortgage 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) the loan
credit classification (as described in the applicable Underwriting Guidelines);
(26) whether such Mortgage Loan provides for a prepayment penalty or
premium; (27) the prepayment penalty or premium period of such Mortgage
Loan, if applicable; (28) a description of the prepayment penalty or
premium, if applicable; (29) the Mortgage Interest Rate as of origination;
(30) the credit risk score (FICO score) at origination; (31) the
date of origination; (32) the Mortgage Interest Rate adjustment period;
(33) the Mortgage Interest Rate adjustment percentage; (34) the
Mortgage Interest Rate floor; (35) the Mortgage Interest Rate calculation
method (i.e., 30/360, simple interest, other); (36) a code indicating
whether the Mortgage Loan is a Section 32 Mortgage Loan; (37) a code
indicating whether the Mortgage Loan is assumable; (38) a code indicating
whether the Mortgage Loan has been modified; (39) the one year payment
history; (40) the Due Date for the first Monthly Payment; (41) the
original Monthly Payment due; (42) with respect to the related Mortgagor,
the debt-to-income ratio; (43) the Appraised Value of the Mortgaged
Property; (44) the sales price of the Mortgaged Property if the Mortgage
Loan was originated in connection with the purchase of the Mortgaged Property;
(45) the MERS identification number, (46) if the Mortgage Loan has
borrower paid, lender paid or deep primary mortgage insurance coverage
and, if
so, (i) the insurer’s name, (ii) the policy or certification number,
(iii) the premium rate and (iv) the coverage percentage,
(47) with respect to Second Lien Loans, the outstanding principal balance
of the superior lien, (48) a code indicating whether the Mortgage Loan is a
HOEPA Loan, (49) a code indicating whether the Mortgage Loan is a High Cost
Loan, (50) a code indicating whether the Mortgage Loan is a subject to a
buydown, (51) flood zone and flood insurance coverage information with
respect
to each Mortgage Loan (to the extent known by the Owner), and (52) the
applicable Servicing Fee Rate. 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; and (4) the weighted average maturity of the Mortgage
Loans.
-8-
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
real property (or leasehold estate, if applicable) securing repayment of
the
debt evidenced by a Mortgage Note.
Mortgagor:
The
obligor on a Mortgage Note.
Nonrecoverable
Advance:
Any
Servicing Advance or Monthly Advance previously made or proposed to be
made in
respect of a Mortgage Loan or REO Property which, in the good faith judgment
of
the Servicer, will not or, in the case of a proposed advance, would not,
be
ultimately recoverable from related Insurance Proceeds, Liquidation Proceeds
or
otherwise from such Mortgage Loan or REO Property. The determination by
the
Servicer that it has made a Nonrecoverable Advance or that any proposed
Servicing Advance or Monthly Advance, if made, would constitute a Nonrecoverable
Advance shall be evidenced by an Officer’s Certificate delivered to the
Owner.
Notice
Date:
As
defined in Section 10.01(b).
Notice
Letter:
With
respect to each Mortgage Loan Package subject to this Agreement, any letter,
facsimile, e-mail or other communication from the Owner to the Servicer
in the
form of Exhibit 10 attached hereto (or including the same information as
required by such form of Exhibit) identifying the Mortgage Loans to be
subject
to this Agreement and the related Transfer Date.
-9-
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board, the Vice Chairman of the
Board,
a President or Vice President, the Treasurer, the Secretary or any Assistant
Treasurer or any Assistant Secretary of the Servicer, and delivered to
the Owner
as required by this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be counsel for the Servicer, reasonably
acceptable to the Owner, provided
that any
Opinion of Counsel relating to (a) the qualification of any account
required to be maintained pursuant to this Agreement as an Eligible Account,
(b) qualification of the Mortgage Loans in a REMIC or (c) compliance
with the REMIC provisions must be (unless otherwise stated in such Opinion
of
Counsel) an opinion of counsel who (i) is in fact independent of the
related Servicer and any master servicer of the Mortgage Loans, (ii) does
not have any material direct or indirect financial interest in the related
Servicer or any master servicer of the related Mortgage Loans or in an
Affiliate
of either and (iii) is not connected with the related Servicer or any
master servicer of the Mortgage Loans as an officer, employee, director,
member
or person performing similar functions.
Periodic
Rate Cap:
With
respect to each Adjustable Rate Mortgage Loan, the provision of each Mortgage
Note which provides for an absolute maximum amount by which the Mortgage
Interest Rate therein may increase on an Interest Rate Adjustment Date
above the
Mortgage Interest Rate previously in effect.
Periodic
Rate Floor:
With
respect to each Adjustable Rate Mortgage Loan, the provision of each Mortgage
Note which provides for an absolute maximum amount by which the Mortgage
Interest Rate therein may decrease on an Interest Rate Adjustment Date
below the
Mortgage Interest Rate previously in effect.
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.
Prepayment
Interest Shortfall Amount:
With
respect to any Mortgage Loan that was subject to a Principal Prepayment
in full
or in part during the Principal Prepayment Period, the amount if any, by
which
one month’s interest at the related Mortgage Loan Remittance Rate on such
Principal Prepayment exceeds the amount of interest paid in connection
with such
Principal Prepayment.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as
the
average rate in The Wall Street Journal (Northeast edition).
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any prepayment penalty or
premium
thereon and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment.
Principal
Prepayment Period:
The
month preceding the month in which the related Remittance Date
occurs.
-10-
Purchase
Agreement:
The
agreement pursuant to which the Owner purchased the related Mortgage Loans
from
the related Seller.
Qualified
Depository:
A
depository the accounts of which are insured by the FDIC or is otherwise
acceptable to the Rating Agencies.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where
required
by law to transact mortgage guaranty insurance business and approved as
an
insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Rating
Agency:
Any of
Fitch, Xxxxx’x or Standard & Poor’s, or their respective successors
designated by the Owner.
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
Reconstitution
Agreement:
Any
(i) pool purchase contracts, and/or agreements among the Owner, the
Servicer, Xxxxxx Mae or Xxxxxxx Mac (as the case may be) and any servicer,
(ii) in connection with a Whole Loan Transfer, a Servicer’s warranties and
servicing agreement or a participation and servicing agreement, and
(iii) in connection with a Securitization Transaction, a pooling and
servicing agreement or similar agreement.
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, 1,531 (January 7, 2005)) or by the staff of
the
Commission, or as may be provided by the Commission or its staff from time
to
time.
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:
With
respect to each Mortgage Loan, the 18th day of any month, or if such 18th
day is
not a Business Day, the following Business Day.
REO
Disposition:
The
final sale by the Servicer of any REO Property.
REO
Management Fee:
With
respect to each REO Property being managed by the Servicer, that fee set
forth
in the applicable Notice Letter.
REO
Property:
A
Mortgaged Property acquired by the Servicer on behalf of the Owner through
foreclosure or by deed in lieu of foreclosure.
-11-
RESPA:
The
Real Estate Settlement Procedures Act, as amended from time to
time.
SAIF:
The
Savings Association Insurance Fund, or any successor thereto.
Second
Lien Loan:
A
Mortgage Loan secured by a second lien Mortgaged 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:
With
respect to each Mortgage Loan, the Seller set forth in the related Purchase
Agreement
Servicer
Information:
As
defined in Section 12.07(a).
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred (regardless if
any such advance is not, in the reasonable determination of the Servicer,
a
Nonrecoverable Servicing Advance when made but, thereafter, becomes a
Nonrecoverable Servicing Advance) in the performance by the Servicer of
its
servicing obligations (other than Monthly Advances), including, but not
limited
to, the cost of (a) the preservation, restoration and protection of the
Mortgaged Property or REO Property, (b) any fees relating to any
enforcement or judicial proceedings, excluding foreclosures, but including
fees
and costs associated with the bankruptcy of the related Mortgagor, (c) any
appraisals, valuations, broker price opinions, inspections, or environmental
assessments, (d) foreclosure actions per Xxxxxxx Mac attorney fees and
costs guidelines, (e) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the Mortgage,
(f) taxes, assessments, water rates, sewer rents and other charges which
are or may become a lien upon the Mortgaged Property, and (g) executing and
recording instruments of satisfaction, deeds of reconveyance.
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Owner shall
pay
to the Servicer on each Remittance Date, which shall, for a period of one
full
month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate
and (b) the outstanding principal balance of such Mortgage Loan as of the
first day of such month in which the related Monthly Payment is due. Such
fee
shall be payable monthly, computed on the basis of the same principal amount
and
period respecting which any related interest payment on a Mortgage Loan
is
computed. The obligation of the Owner to pay the Servicing Fee is limited
to,
and the Servicing Fee is payable solely from, the interest portion (including
recoveries with respect to interest from Liquidation Proceeds, to the extent
permitted by Section 2.05) of such Monthly Payment collected by the
Servicer, or as otherwise provided under Section 2.05.
-12-
Servicing
Fee Rate:
With
respect to each Mortgage Loan, the rate per annum specified in the related
Mortgage Loan Schedule.
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Servicer consisting
of
copies of the Mortgage Loan Documents listed on Schedule 2
hereto
and originals of all documents in the Mortgage File as listed on Schedule 3
hereto
which are not delivered to the Owner, its designee or the
Custodian.
Servicing
Officer:
Any
officer of the Servicer involved in or responsible for, the administration
and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Servicer to the Owner upon request, as such list
may
from time to time be amended.
Special
Deposit Account:
Any
demand deposit account established by the Servicer pursuant to an agreement
with
the related Qualified Depository that monies deposited in the account remain
the
property of the depositor thereof and are to be used specifically for the
purposes set forth in this Agreement.
Standard &
Poor’s:
Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx
Companies Inc., and any successor thereto.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB
Static
Pool Party:
As
defined in Section 12.03(g).
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or
more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Company or a
Subservicer.
Subsequent
Transfer Date:
The
date on which servicing shall be transferred to a successor servicer, which
shall be such date as mutually agreed in writing by the Servicer and the
Owner.
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Servicer or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Servicer under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
-13-
Tax
Service Contract:
A
life-of-loan tax service contract maintained for the Mortgaged Property
with a
tax service provider for the purpose of obtaining current information from
local
taxing authorities relating to such Mortgaged Property.
Transfer
Date:
The
date or dates set forth on the related Notice Letter on which the Servicer
from
time to time shall commence servicing the Mortgage Loans listed on the
related
Notice Letter.
Transaction
Servicer:
As
defined in Section 12.03(c).
Underwriting
Guidelines:
The
underwriting guidelines of the related originator, as identified or specified
in
the related Purchase Agreement.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.
ARTICLE
II
SERVICING
Section
2.01 Servicer
to Act as Servicer. With
respect to each Mortgage Loan in each Mortgage Loan Package, from and after
the
related Transfer Date, the Servicer, as an independent contractor, shall
service
and administer the Mortgage Loans pursuant to the terms of this Agreement,
under
the Servicer’s name on a scheduled/scheduled basis, and shall have full power
and authority to do any and all things in connection with such servicing
and
administration which the Servicer may deem necessary or desirable, consistent
with the terms of this Agreement and with Accepted Servicing Practices.
The
Servicer shall acknowledge by email to the Owner its receipt of each Mortgage
Loan Schedule and the Servicer’s assumption of the servicing responsibilities
with respect to the related Mortgage Loan Package.
The
Servicer may not waive, modify or vary any term of any Mortgage Loan or
consent
to the postponement of strict compliance with any such term or in any manner
grant indulgence to any Mortgagor without the prior written consent of
the
Owner. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered, to execute and deliver
on
behalf of itself and the Owner, all instruments of satisfaction or cancellation,
or of partial or full release, discharge and all other comparable instruments,
with respect to the Mortgage Loans and with respect to the Mortgaged Properties.
If reasonably required by the Servicer, the Owner shall furnish the Servicer
with any powers of attorney and other documents necessary or appropriate
to
enable the Servicer to carry out its servicing and administrative duties
under
this Agreement.
In
servicing and administering the Mortgage Loans, the Servicer shall employ
procedures (including collection procedures) and exercise the same care
that it
customarily employs and exercises in servicing and administering mortgage
loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
the Mortgage Loan Documents or applicable law, and the Owner’s reliance on the
Servicer.
-14-
The
Servicer shall keep at its servicing office books and records in which,
subject
to such reasonable regulations as it may prescribe, the Servicer shall
note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless
such transfer is in compliance with the terms hereof. For the purposes
of this
Agreement, Servicer shall be under no obligation to deal with any Person
with
respect to this Agreement or the Mortgage Loans unless the Servicer has
been
notified of such transfers as provided in this Section 2.01. The Owner may
sell and transfer, in whole or in part, the Mortgage Loans. Upon notice
thereof,
Servicer shall xxxx its books and records to reflect the ownership of the
Mortgage Loans by such assignee, and the previous Owner shall be released
from
its obligations hereunder. This Agreement shall be binding upon and inure
to the
benefit of the Owner and Servicer and their permitted successors, assignees
and
designees.
The
Servicer shall notify MERS of the ownership interest of Owner in each MOM
Loan
through the MORNET system or MIDANET system, as applicable, or any other
comparable system acceptable to MERS. At any time during the term of this
Agreement, Owner may direct Servicer to cause any MOM Loan to be deactivated
from the MERS System.
The
Servicer shall be responsible for the actions of any vendors which the
Servicer
utilizes to carry out its obligations hereunder and any fees paid to such
vendors shall be paid by the Servicer from its own funds.
Section
2.02 Liquidation
of Mortgage Loans. In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 2.01 is not paid when the same becomes due and payable, or in the
event the Mortgagor fails to perform any other covenant or obligation under
the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Servicer shall take such action as (1) the Servicer would take under
similar circumstances with respect to a similar mortgage loan held for
its own
account for investment, (2) shall be consistent with Accepted Servicing
Practices, or (3) the Servicer shall determine prudently to be in the best
interest of Owner.
Section
2.03 Collection
of Mortgage Loan Payments. Continuously
from the related Transfer Date until the related Subsequent Transfer
Date, the Servicer shall proceed diligently to collect all payments due
under each of the Mortgage Loans when the same shall become due and payable
and
shall take special care in ascertaining and estimating Escrow Payments
and all
other charges that will become due and payable with respect to the Mortgage
Loans and each related Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and
when
they become due and payable.
Section
2.04 Establishment
of and Deposits to Custodial Account. The
Servicer shall segregate and hold all funds collected and received pursuant
to
the Mortgage Loans separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts,
in the
form of time deposit or demand accounts, titled “Avelo Mortgage, L.L.C., in
trust for [insert Owner’s name], Residential Fixed and Adjustable Rate Mortgage
Loans, and various Mortgagors.” The Custodial Account shall be established with
a Qualified Depository acceptable to the Owner. The Servicer and the Owner
intend that the Custodial Account be a Special Deposit Account. Any funds
deposited in the Custodial Account shall at all times be fully insured
to the
full extent permitted by the FDIC and as otherwise acceptable to the Rating
Agencies. Funds deposited in the Custodial Account may be drawn on by the
Servicer in accordance with Section 2.05. The creation of any Custodial
Account shall be evidenced by a certification in the form of Exhibit 2
hereto,
in the case of an account established with the Servicer, or by a letter
agreement in the form of Exhibit 3
hereto,
in the case of an account held by a depository other than the Servicer.
A copy
of such certification or letter agreement shall be furnished to the Owner
and,
upon request, to any subsequent Owner.
-15-
The
Servicer shall deposit in the Custodial Account within two (2) Business
Days of
receipt thereof, and retain therein, the following collections received
by the
Servicer and payments made by the Servicer after the related Transfer Date,
other than payments of principal and interest due on or before the related
Subsequent Transfer Date, or received by the Servicer prior to the related
Subsequent Transfer Date but allocable to a period subsequent
thereto:
(i) all
payments on account of principal on the Mortgage Loans including all Principal
Prepayments;
(ii) all
payments on account of interest on the Mortgage Loans adjusted to the Mortgage
Loan Remittance Rate;
(iii) all
Liquidation Proceeds and any amounts received with respect to REO
Property;
(iv) all
Insurance Proceeds including amounts required to be deposited pursuant
to
Section 2.10 (other than proceeds to be held in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or released
to
the Mortgagor in accordance with Section 2.13);
(v) all
Condemnation Proceeds which are not applied to the restoration or repair
of the
Mortgaged Property or released to the Mortgagor in accordance with
Section 2.15;
(vi) any
amount required to be deposited in the Custodial Account pursuant to
Section 2.01, 2.09, 3.01, 4.01 or 4.02;
(vii) any
amounts payable to the Owner in connection with the repurchase of any Mortgage
Loan pursuant to the related Purchase Agreement;
(viii) with
respect to each Principal Prepayment in full or in part, the Prepayment
Interest
Shortfall Amount, if any, for the month of distribution. Such deposit shall
be
made from the Servicer’s own funds, without reimbursement therefore up to a
maximum amount per month of one-half of the Servicing Fee actually received
for
such month for the Mortgage Loans;
(ix) any
prepayment penalties or premiums received with respect to any Mortgage
Loan;
and
-16-
(x) any
amounts required to be deposited by the Servicer pursuant to Section 2.11
in connection with the deductible clause in any blanket hazard insurance
policy.
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, unless otherwise provided herein, payments in the nature
of
Ancillary Income, need not be deposited by the Servicer into the Custodial
Account. Any interest paid on funds deposited in the Custodial Account
by the
depository institution shall accrue to the benefit of the Servicer and
the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 2.05.
With
respect to each Securitization Transaction, the Servicer shall establish
a
separate custodial account for the related securitization and deposit all
amounts that have been or are subsequently received with respect to the
Mortgage
Loans included in such Securitization Transaction into the custodial account
created for the securitization on the date of the Securitization Transfer,
or as
soon as possible thereafter (but not to exceed 48 hours after such
date).
Section
2.05 Permitted
Withdrawals From Custodial Account. The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(i) to
make
payments to the Owner in the amounts and in the manner provided for in
Section 3.01;
(ii) to
reimburse itself for Monthly Advances of the Servicer’s funds made pursuant to
Section 3.04, the Servicer’s right to reimburse itself pursuant to this
subclause (ii) being limited to amounts received on the related
Mortgage Loan (including without limitation, late recoveries of payments
from
the Mortgagor, Liquidation Proceeds and Insurance Proceeds with respect
to such
Mortgage Loan to the extent collected) which represent late payments of
principal and/or interest respecting which any such advance was made; it
being
understood that, in the case of any such reimbursement, the Servicer’s right
thereto shall be prior to the rights of the Owner;
(iii) to
reimburse itself for unreimbursed Servicing Advances, and any unpaid Servicing
Fees, the Interim Servicer’s right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such
other
amounts as may be collected by the Servicer from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of
any such
reimbursement, the Servicer’s right thereto shall be prior to the rights of the
Owner;
(iv) to
pay
itself pursuant to Section 4.03, as servicing compensation, interest on
funds deposited in the Custodial Account;
(v) to
reimburse itself for expenses incurred and reimbursable to it pursuant
to
Section 4.03;
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(vi) to
clear
and terminate the Custodial Account upon the termination of this
Agreement;
(vii) to
withdraw funds deposited in error; and
(viii) to
withdraw amounts collected under a blanket hazard insurance policy with
respect
to a Second Lien Loan as provided for in Section 2.10, for application to
restoration or repair of the Mortgaged Property in accordance with the
procedures outlined in Section 2.13.
Section
2.06 Establishment
of and Deposits to Escrow Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any
of its
own funds and general assets and shall establish and maintain one or more
Escrow
Accounts, in the form of time deposit or demand accounts, titled, Avelo
Mortgage, L.L.C., in trust for [insert Owner’s name] Residential Fixed and
Adjustable Rate Mortgage Loans, and various Mortgagors.” The Escrow Accounts
shall be established with a Qualified Depository, in a manner which shall
provide maximum available insurance by the FDIC and as otherwise acceptable
to
the Rating Agencies. The Servicer and the Owner intend that the Escrow
Accounts
be Special Deposit Accounts. Funds deposited in the Escrow Account may
be drawn
on by the Servicer in accordance with Section 2.07. The creation of any
Escrow Account shall be evidenced by a certification in the form of Exhibit 4
hereto,
in the case of an account established with the Servicer, or by a letter
agreement in the form of Exhibit 5
hereto,
in the case of an account held by a depository other than the Servicer.
A copy
of such certification shall be furnished to the Owner and, upon request,
to any
subsequent Owner.
The
Servicer shall deposit in the Escrow Account or Accounts within two (2)
Business
Days of receipt thereof, and retain therein:
(i) all
Escrow Payments collected on account of the Mortgage Loans, for the purpose
of
effecting timely payment of any such items as required under the terms
of this
Agreement; and
(ii) all
amounts representing Insurance Proceeds or Condemnation Proceeds which
are to be
applied to the restoration or repair of any Mortgaged Property.
The
Servicer shall make withdrawals from the Escrow Account only to effect
such
payments as are required under this Agreement, as set forth in
Section 2.07. The Servicer shall be entitled to retain any interest paid on
funds deposited in the Escrow Account by the depository institution, other
than
interest on escrowed funds required by law to be paid to the Mortgagor.
To the
extent required by law, the Servicer shall pay interest on escrowed funds
to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing
or
that interest paid thereon is insufficient for such purposes.
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Section
2.07 Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Servicer
only:
(i) to
effect
timely payments of ground rents, taxes, assessments, water rates, mortgage
insurance premiums, condominium charges, fire and hazard insurance premiums
or
other items constituting Escrow Payments for the related Mortgage;
(ii) to
reimburse the Servicer for any Servicing Advance made by the Servicer pursuant
to Section 2.08 with respect to a related Mortgage Loan, but only from
amounts received on the related Mortgage Loan which represent late collections
of Escrow Payments thereunder;
(iii) to
refund
to any Mortgagor any funds found to be in excess of the amounts required
under
the terms of the related Mortgage Loan or applicable federal or state law
or
judicial or administrative ruling;
(iv) for
transfer to the Custodial Account and application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the related
Mortgage and Mortgage Note;
(v) for
application to restoration or repair of the Mortgaged Property in accordance
with the procedures outlined in Section 2.13;
(vi) to
pay to
the Servicer, or any Mortgagor to the extent required by law, any interest
paid
on the funds deposited in the Escrow Account;
(vii) to
clear
and terminate the Escrow Account on the termination of this Agreement;
and
(viii) to
withdraw funds deposited in error.
Section
2.08 Payment
of Taxes, Insurance and Other Charges With Respect to First Lien
Loans.
With
respect to each First Lien Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates,
sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of fire and hazard insurance coverage and shall
obtain,
from time to time, all bills for the payment of such charges (including
renewal
premiums) and shall effect payment thereof prior to the applicable penalty
or
termination date, employing for such purpose deposits of the Mortgagor
in the
Escrow Account which shall have been estimated and accumulated by the Servicer
in amounts sufficient for such purposes, as allowed under the terms of
the
Mortgage. To the extent that a Mortgage does not provide for Escrow Payments,
the Servicer shall determine that any such payments are made by the Mortgagor
at
the time they first become due. The Servicer shall monitor the Mortgagor’s
payment of such bills and shall promptly notify any Mortgagor in breach
of
timely payments of such bills to remedy such breach. If after such notification,
such Mortgagor continues to fail to remedy the breach, the Servicer shall
arrange for the purchase of insurance coverage which satisfied the requirements
of Section 2.10 of this Agreement on behalf of such Mortgagor. The Servicer
shall advance property taxes to protect each Mortgaged Property as may
be
provided for in the related Mortgage Loan Documents.
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Section
2.09 Protection
of Accounts.
The
Servicer may transfer the Custodial Account or the Escrow Account to a
different
Qualified Depository from time to time. Such transfer shall be made only
upon
obtaining the consent of the Owner.
The
Servicer shall bear any expenses, losses or damages sustained by the Owner
because the Custodial Account and/or the Escrow Account are not demand
deposit
accounts.
Amounts
on deposit in the Custodial Account and the Escrow Account may at the option
of
the Servicer be invested in Eligible Investments; provided
that in
the event that amounts on deposit in the Custodial Account or the Escrow
Account
exceed the amount fully insured by the FDIC (the “Insured
Amount”)
the
Servicer shall be obligated to invest the excess amount over the Insured
Amount
in Eligible Investments on the same Business Day as such excess amount
becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Determination Date next following
the
date of such Eligible Investment, provided,
however,
that if
such Eligible Investment is an obligation of a Qualified Depository (other
than
the Servicer) that maintains the Custodial Account or the Escrow Account,
then
such Eligible Investment may mature on such Remittance Date. Any such Eligible
Investment shall be made in the name of the Servicer in trust for the benefit
of
the Owner. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Servicer and may be withdrawn at any time
by the
Servicer. Any losses incurred in respect of any such investment shall be
deposited in the Custodial Account or the Escrow Account, by the Servicer
out of
its own funds immediately as realized.
Section
2.10 Maintenance
of Hazard Insurance.
The
Servicer shall cause to be maintained for each First Lien Loan, hazard
insurance
such that all buildings upon the Mortgaged Property are insured by a generally
acceptable insurer which satisfies the hazard insurer ratings requirements
of
each of the Rating Agencies, against loss by fire, hazards of extended
coverage
and such other hazards as are customary in the area where the Mortgaged
Property
is located, in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements securing such First Lien Loan
and
(ii) the greater of (a) the outstanding principal balance of the First
Lien Loan and (b) an amount such that the proceeds thereof shall be
sufficient to prevent the Mortgagor or the loss payee from becoming a
co-insurer.
If
upon
origination of the First Lien Loan, the related Mortgaged Property was
located
in an area identified in the Federal Register by the Flood Emergency Management
Agency as having special flood hazards (and such flood insurance has been
made
available) a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with a
generally
acceptable insurance carrier which satisfies the flood insurer ratings
requirements of each of the Rating Agencies, in an amount representing
coverage
equal to the lesser of (i) the minimum amount required, under the terms of
coverage, to compensate for any damage or loss on a replacement cost basis
(or
the unpaid balance of the mortgage if replacement cost coverage is not
available
for the type of building insured) and (ii) the maximum amount of insurance
which is available under the Flood Disaster Protection Act of 1973, as
amended.
If at any time during the term of the First Lien Loan, the Servicer determines
in accordance with applicable law and pursuant to the Xxxxxx Xxx Guides
that a
Mortgaged Property is located in a special flood hazard area and is not
covered
by flood insurance or is covered in an amount less than the amount required
by
the Flood Disaster Protection Act of 1973, as amended, the Servicer shall
notify
the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the required flood insurance
coverage within forty-five (45) days after such notification, the Servicer
shall immediately force place the required flood insurance on the Mortgagor’s
behalf.
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If
a
Mortgage is secured by a unit in a condominium project, the Servicer shall
verify that the coverage required of the owner’s association, including hazard,
flood, liability, and fidelity coverage, is being maintained in accordance
with
then current Xxxxxx Mae requirements, and secure from the owner’s association
its agreement to notify the Servicer promptly of any change in the insurance
coverage or of any condemnation or casualty loss that may have a material
effect
on the value of the Mortgaged Property as security.
The
Servicer shall cause to be maintained on each Mortgaged Property earthquake
or
such other or additional insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and as
shall
require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices, in any instance, only to the extent permitted
by
applicable laws or regulations and subject to the availability of such
additional insurance in the marketplace.
In
the
event that the Owner or the Servicer shall determine that the Mortgaged
Property
should be insured against loss or damage by hazards and risks not covered
by the
insurance required to be maintained by the Mortgagor pursuant to the terms
of
the Mortgage, the Servicer shall communicate and consult with the Mortgagor
with
respect to the need for such insurance and bring to the Mortgagor’s attention
the desirability of protection of the Mortgaged Property.
All
policies required hereunder shall name the Servicer as loss payee and shall
be
endorsed with standard or New York mortgagee clauses, without contribution,
which shall provide for at least 30 days prior written notice of any
cancellation, reduction in amount or material change in coverage.
The
Servicer shall not interfere with the Mortgagor’s freedom of choice in selecting
either his insurance carrier or agent, provided,
however,
that
the Servicer shall not accept any such insurance policies from insurance
companies unless such companies satisfy the insurer ratings requirements
of each
of the Rating Agencies and are licensed to do business in the jurisdiction
in
which the Mortgaged Property is located. The Servicer shall determine that
such
policies provide sufficient risk coverage and amounts, that they insure
the
property owner, and that they properly describe the property address. The
Servicer shall ensure that appropriate insurance policies are in place
in the
required coverages.
Pursuant
to Section 2.04, any amounts collected by the Servicer under any such
policies (other than amounts to be deposited in the Escrow Account and
applied
to the restoration or repair of the related Mortgaged Property, or property
acquired in liquidation of the First Lien Loan, or to be released to the
Mortgagor, in accordance with the Servicer’s normal servicing procedures as
specified in Section 2.13) shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 2.05.
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With
respect to each Second Lien Loan, the Servicer shall obtain and maintain
the
blanket hazard insurance policy in an amount equal to the unpaid principal
balance of such Second Lien Loan. Any amounts collected by the Servicer
under
any such policy relating to a Second Lien Loan shall be deposited in the
Custodial Account subject to withdrawal pursuant to Section 2.05. Such
policy
may contain a standard deductible clause. Upon request of the Owner, the
Servicer shall cause to be delivered to the Owner a certified true copy
of such
policy and a statement from the insurer thereunder that such policy shall
in no
event be terminated or materially modified without 30 days’ prior written notice
to the Owner.
Section
2.11 Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Servicer shall maintain with responsible companies, at its own expense,
a
blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with
broad
coverage on all officers, employees or other persons acting in any capacity
requiring such persons to handle funds, money, documents or papers relating
to
the Mortgage Loans (“Servicer
Employees”).
Any
such Fidelity Bond and Errors and Omissions Insurance Policy shall be in
the
form of the Mortgage Banker’s Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzle-ment, fraud,
errors
and omissions and negligent acts of such Servicer Employees. Such Fidelity
Bond
and Errors and Omissions Insurance Policy also shall protect and insure
the
Servicer against losses in connection with the release or satisfaction
of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 2.11 requiring such Fidelity
Bond and Errors and Omissions Insurance Policy shall diminish or relieve
the
Servicer from its duties and obligations as set forth in this Agreement.
The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by Xxxxxx Xxx in the Xxxxxx
Mae
Guides or by Xxxxxxx Mac in the Xxxxxxx Xxx Xxxxxxx/Servicer Guide. Upon
the
request of the Owner, the Servicer shall cause to be delivered to the Owner
a
certified true copy of such fidelity bond and insurance policy and a statement
from the surety and the insurer that such fidelity bond and insurance policy
shall in no event be terminated or materially modified without 30 days’
prior written notice to the Owner.
Section
2.12 Inspections.
The
Servicer shall inspect the Mortgaged Property as often as deemed necessary
by
the Servicer to assure itself that the value of the Mortgaged Property
is being
preserved. In addition, if any Mortgage Loan is more than 60 days
delinquent, the Servicer immediately shall inspect the Mortgaged Property
(provided
that if
the Servicer is in communication with the Mortgagor with respect to bringing
the
Mortgage Loan current the Servicer shall conduct inspections in accordance
with
Accepted Servicing Practices) and shall conduct subsequent inspections
in
accordance with Accepted Servicing Practices or as may be required by the
primary mortgage guaranty insurer. The Servicer shall keep a written report
of
each such inspection.
Section
2.13 Restoration
of Mortgaged Property.
The
Servicer need not obtain the approval of the Owner prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is
in
accordance with Accepted Servicing Practices. At a minimum, the Servicer
shall
comply with the following conditions in connection with any such release
of
Insurance Proceeds or Condemnation Proceeds:
-22-
(i) the
Servicer shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect
thereto;
(ii) the
Servicer shall take all steps necessary to preserve the priority of the
lien of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens;
(iii) the
Servicer shall verify that the Mortgage Loan is not in default; and
(iv) pending
repairs or restoration, the Servicer shall place the Insurance Proceeds
or
Condemnation Proceeds in the Escrow Account.
If
the
Owner is named as an additional loss payee, the Servicer is hereby empowered
to
endorse any loss draft issued in respect of such a claim in the name of
the
Owner.
Section
2.14 Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by
the
Owner pursuant to a deed in lieu of foreclosure, the Servicer shall submit
to
the Owner a liquidation report with respect to such Mortgaged
Property.
Section
2.15 Notification
of Adjustments.
With
respect to each Mortgage Loan, the Servicer shall adjust the Mortgage Interest
Rate on the related Interest Rate Adjustment Date in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note.
The
Servicer shall execute and deliver any and all necessary notices required
under
applicable law and the terms of the related Mortgage Note and Mortgage
regarding
the Mortgage Interest Rate adjustments. The Servicer shall promptly, upon
written request therefor, deliver to the Owner such notifications and any
additional applicable data regarding such adjustments and the methods used
to
calculate and implement such adjustments. Upon the discovery by the Servicer
or
the receipt of notice from the Owner that the Servicer has failed to adjust
a
Mortgage Interest Rate in accordance with the terms of the related Mortgage
Note, the Servicer shall immediately deposit in the Custodial Account from
its
own funds the amount of any interest loss or deferral caused the Owner
thereby.
Section
2.16 Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Servicer
shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code.
Section
2.17 Credit
Reporting.
The
Servicer shall report the Mortgagor credit files to each of the three major
credit reporting agencies on a monthly basis consistent with Accepted Servicing
Practices.
Section
2.18 Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or by
deed in lieu of foreclosure, the deed or certificate of sale shall be taken
in
the name of the Servicer on behalf of the Owner and without reference to
the
Owner except as otherwise required by law. The Person or Persons holding
such
title other than the Owner shall acknowledge in writing that such
title is being held as nominee for the Owner.
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The
Servicer shall manage, conserve, protect and operate each REO Property
for the
Owner solely for the purpose of its prompt disposition and sale. In
consideration therefor, the Owner shall pay the Servicer the REO Management
Fee.
The Servicer, either itself or through an agent selected by the Servicer,
shall
manage, conserve, protect and operate the REO Property in the same manner
that
it manages, conserves, protects and operates other foreclosed property
for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Servicer shall attempt to sell the
same (and
may temporarily rent the same for a period not greater than one year, except
as
otherwise provided below) on such terms and conditions as the Servicer
deems to
be in the best interest of the Owner in accordance with Accepted Servicing
Practices. The Servicer shall provide the Owner on a monthly basis a report
on
the status of each REO Property.
The
Servicer shall use commercially reasonable efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Owner to such
effect, that a longer period is necessary for the orderly liquidation of
such
REO Property. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall
report
monthly to the Owner as to the progress being made in selling such REO
Property.
The
Servicer shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in an amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability
insurance
and, to the extent required and available under the National Flood Insurance
Act
of 1968, as amended, flood insurance in the amount required in Section 2.10
hereof.
The
disposition of REO Property shall be carried out by the Servicer at such
price,
and upon such terms and conditions, as the Servicer deems to be in the
best
interests of the Owner in accordance with Accepted Servicing Practices.
The
proceeds of sale of the REO Property shall be promptly deposited in the
Custodial Account pursuant to the terms of this Agreement but not later
than the
second Business Day following receipt thereof. As soon as practical thereafter,
the expenses of such sale shall be paid and the Servicer shall reimburse
itself
for any related unreimbursed Servicing Advances and unpaid Servicing Fees
made
pursuant to this Section 2.18.
With
respect to each REO Property, the Servicer shall hold all funds collected
and
received in connection with the operation of the REO Property in the Custodial
Account. The Servicer shall cause to be deposited on or prior to the second
Business Day following the receipt thereof in each Custodial Account all
revenues received with respect to the conservation and disposition of the
related REO Property.
-24-
Section
2.19 Permitted
Withdrawals with Respect to REO Property.
The
Servicer shall withdraw funds on deposit in the Custodial Account with
respect
to each related REO Property necessary for the proper operation, management
and
maintenance of the REO Property, including the cost of maintaining any
hazard
insurance pursuant to Section 2.10 and the fees of any managing agent
acting on behalf of the Servicer. The Servicer shall make monthly distributions
on each Remittance Date to the Owner of the net cash flow from the REO
Property
(which shall equal the revenues from such REO Property net of the expenses
described in Section 2.18 and of any reserves reasonably required from time
to time to be maintained to satisfy anticipated liabilities for such
expenses).
Section
2.20 Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 2.21, the Servicer shall
furnish to the Owner on or before the 5th Business Day of each month a
report
with respect to any REO Property covering the operation of such REO Property
for
the previous month and the Servicer’s efforts in connection with the sale of
such REO Property and any rental of such REO Property incidental to the
sale
thereof for the previous month. That statement shall be accompanied by
such
other information available to the Servicer as the Owner shall reasonably
request.
Section
2.21 Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Servicer
shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code.
Section
2.22 Recordation
of Assignments of Mortgage.
Except
in
connection with Accepted Servicing Practices for defaulted Mortgage Loans,
the
Servicer shall not be responsible for the preparation or recording of the
Assignments of Mortgage relating to the Mortgage Loans to the Owner, the
securitization trustee or any other party; provided,
however,
that in
the event the Servicer agrees to record any mortgage assignment, any expense,
including the fees of third party service providers, incurred by the Servicer
in
connection with the preparation and recordation of Assignments of Mortgage
shall
be reimbursable by the Owner, or if not reimbursed by the Owner, as a Servicing
Advance. The Servicer shall not be liable for, and shall be indemnified
by the
Owner, against any losses, costs, penalties and damages incurred as a result
of
incorrect or incomplete, or untimely submission of, Assignments of Mortgage
and
applicable recording information.
Section
2.23 Additional
Servicing Requirements.
In
addition to its other obligations, under this Agreement, the Servicer
shall:
(a) Obtain
updated FICO scores quarterly for the entire portfolio at the Owner’s
expense.
-25-
(b) apply
all
payments received from Mortgagors to principal and interest prior to any
application of advances or fees.
(c) make
staff available to participate in weekly calls, as needed, to discuss loans
in
default including foreclosures, bankruptcy and REO Properties; and
(d) adhere
to
the additional requirements relating to REO Property set forth in Exhibit 8
(in the case of Mortgage Loans identified by the Owner in the related Notice
Letter as subprime mortgage loans) and Exhibit 9.
Section
2.24 Tax
and Flood Service Contracts.
The
Servicer, at Owner’s expense, shall cause each Mortgage Loan which is
transferred to the Servicer for servicing to be covered by (a) with respect
to each First Lien Loan only, a Tax Service Contract and (b) Flood Zone
Service Contract. Servicer shall place such Tax Service Contracts and Flood
Service Contracts in place, and shall xxxx the Owner the fee associated
with
acquiring such contracts.
ARTICLE
III
PAYMENTS
TO OWNER
Section
3.01 Remittances.
On
each
Remittance Date the Servicer shall remit by wire transfer of immediately
available funds to the Owner (a) all amounts deposited in the Custodial
Account for the related Due Period (net of charges against or withdrawals
from
the Custodial Account pursuant to Section 2.05), plus (b) all amounts,
if any, which the Servicer is obligated to remit pursuant to Section 3.04,
minus
(c) any amounts attributable to Principal Prepayments received after the
applicable Principal Prepayment Period which amounts shall be remitted
on the
following Remittance Date, together with any additional interest required
to be
deposited in the Custodial Account in connection with such Principal Prepayment
in accordance with Section 2.04(viii), and minus (d) any amounts
attributable to Monthly Payments collected but due on a Due Date or Dates
subsequent to the first day of the month of the Remittance Date, which
amounts
shall be remitted on the applicable Remittance Date.
For
all
purposes of this Agreement, delinquency status shall be determined in accordance
with standard ABS or RMBS methodology, as is appropriate, as determined
by the
Owner for the applicable Mortgage Loan type as set forth in the related
Notice
Letter.
With
respect to any remittance received by the Owner after the second Business
Day
following the Business Day on which such payment was due, the Servicer
shall pay
to the Owner interest on any such late payment at an annual rate equal
to the
Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be deposited in the Custodial Account by the Servicer
on the date such late payment is made and shall cover the period commencing
with
the day the payment was due and ending with the Business Day on which such
payment is made, both inclusive. Such interest shall be remitted along
with the
distribution payable on the next succeeding Remittance Date. The payment
by the
Servicer of any such interest shall not be deemed an extension of time
for
payment or a waiver of any Event of Default by the Servicer.
-26-
Section
3.02 Statements
to Owner.
Not
later
than the date which is two Business Days prior to the Remittance Date,
the
Servicer shall furnish to the Owner a monthly remittance advice with all
of the
information required by Schedule
1
hereto,
with a trial balance report attached thereto in the form of Exhibit 1
hereto
in
hard copy and electronic medium mutually acceptable to the parties as to
the
preceding remittance and the period ending on the preceding Determination
Date.
At a minimum, the trial balance report must contain the fields attached
as
Schedule
1
to
Exhibit
1
hereto
and Static Pool Information regarding the Mortgage Loans.
In
addition, not more than 60 days after the end of each calendar year, the
Servicer shall furnish to each Person who was a Owner at any time during
such
calendar year an annual statement in accordance with the requirements of
applicable federal income tax law as to the aggregate of remittances for
the
applicable portion of such year.
Such
obligation of the Servicer shall be deemed to have been satisfied to the
extent
that substantially comparable information shall be provided by the Servicer
pursuant to any requirements of the Code as from time to time are in
force.
The
Servicer shall prepare and file any and all tax returns, information statements
or other filings required to be delivered to any governmental taxing authority
or to the Owner pursuant to any applicable law with respect to the Mortgage
Loans and the transactions contemplated hereby. In addition, the Servicer
shall
provide the Owner with such information concerning the Mortgage Loans as
is
necessary for the Owner to prepare its federal income tax return as the
Owner
may reasonably request from time to time.
Section
3.03 Advances
by Servicer.
Except
as
otherwise provided herein, the Servicer shall be entitled to first priority
reimbursement pursuant to Section 2.07 hereof for Servicing Advances from
recoveries from the related Mortgagor or from all Liquidation Proceeds
and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the related Mortgage Loan.
Section
3.04 Principal
and Interest Advances by Servicer.
On
the
Business Day immediately preceding each Remittance Date, the Servicer shall
deposit in the Custodial Account from its own funds or from amounts held
for
future distribution, or both, an amount equal to all Monthly Payments (with
interest adjusted to the Mortgage Loan Rate minus the applicable Servicing
Fee
Rate) which were due on the Mortgage Loans during the applicable Due Period
and
which were delinquent on the Business Day immediately preceding such Remittance
Date or which were deferred pursuant to Section 4.01. Any amounts held for
future distribution and so used shall be replaced by the Servicer by deposit
in
the Custodial Account on or before any future Remittance Date if funds
in the
Custodial Account on such Remittance Date shall be less than remittances
to the
Owner required to be made on such Remittance Date. The Servicer shall keep
appropriate records of such amounts. The Servicer’s obligation to make such
Monthly Advances as to any Mortgage Loan will continue through the last
Monthly
Payment due prior to the payment in full of the Mortgage Loan, or through
the
last Remittance Date prior to the Remittance Date for the distribution
of all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan;
provided,
that
the Servicer shall not be obligated to make Monthly Advances which the
Servicer
determines to be Nonrecoverable Advances. The Servicer shall not be obligated
to
advance shortfalls of interest resulting from the application of the
Servicemembers’ Civil Relief Act or any similar state laws.
-27-
ARTICLE
IV
GENERAL
SERVICING PROCEDURES
Section
4.01 Transfers
of Mortgaged Property.
The
Servicer shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the
person
to whom the Mortgaged Property has been or is about to be sold whether
by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Servicer shall, to the
extent
it has knowledge of such conveyance, exercise its rights to accelerate
the
maturity of such Mortgage Loan under the “due-on-sale” clause applicable
thereto.
If
the
Servicer reasonably believes it is unable under applicable law to enforce
such
“due-on-sale” clause, the Servicer shall enter into (i) an assumption and
modification agreement with the person to whom such property has been conveyed,
pursuant to which such person becomes liable under the Mortgage Note and
the
original Mortgagor remains liable thereon or (ii) in the event the Servicer
is unable under applicable law to require that the original Mortgagor remain
liable under the Mortgage Note and the Servicer has the prior consent of
the
primary mortgage guaranty insurer, a substitution of liability agreement
with
the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor
is released from liability and the purchaser of the Mortgaged Property
is
substituted as Mortgagor and becomes liable under the Mortgage Note. The
Servicer shall be entitled to retain as additional servicing compensation
any
assumption fees collected by the Servicer in connection with a Mortgagor
entering into an assumption agreement. In connection with any such assumption,
neither the Mortgage Interest Rate borne by the related Mortgage Note,
the term
of the Mortgage Loan nor the outstanding principal amount of the Mortgage
Loan
shall be changed.
To
the
extent that any Mortgage Loan is assumable, the Servicer shall inquire
diligently into the creditworthiness of the proposed transferee, and shall
use
the underwriting criteria for approving the credit of the proposed transferee
which are used by the Servicers and their affiliates with respect to
underwriting mortgage loans of the same type as the Mortgage Loans. If
the
credit of the proposed transferee does not meet such underwriting criteria,
the
Servicer diligently shall, to the extent permitted by the Mortgage or the
Mortgage Note and by applicable law, accelerate the maturity of the Mortgage
Loan.
Section
4.02 Satisfaction
of Mortgages and Release of Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Servicer of
a
notification that payment in full will be escrowed in a manner customary
for
such purposes, the Servicer shall notify the Owner in the monthly remittance
advice as provided in Section 3.02, and may request the release of any
Mortgage Loan Documents from the Owner in accordance with this Section 4.02
hereof.
-28-
If
the
Servicer satisfies or releases a Mortgage without first having obtained
payment
in full of the indebtedness secured by the Mortgage (or such lesser amount
in
connection with a discounted payoff accepted by the Servicer with respect
to a
defaulted Mortgage Loan) or should the Servicer otherwise prejudice any
rights
the Owner may have under the mortgage instruments, if Servicer is unable
to
reasonably demonstrate that it will be able to cause the amount of the
unpaid
indebtedness to be reinstated and secured under the related Mortgage, or
if the
Mortgagor becomes thirty (30) or more days delinquent following such erroneous
release, regardless of Servicer’s ability to obtain reinstatement, upon the
Servicer’s receiving knowledge of such an event or upon written demand of the
Owner, whichever is earlier, the Servicer shall deposit the amount of any
shortfall thereof in the Custodial Account within 2 Business Days of receipt
of
such demand by the Owner; provided,
however,
that
with respect to any such Mortgage Loan subject to judicial action, the
Servicer’s obligations under this sentence shall be limited to giving the Owner
notice of such judicial action and using good faith efforts to reinstate
and
secure the amount of the unpaid indebtedness under the related Mortgage.
The
Servicer shall maintain the Fidelity Bond and Errors and Omissions Insurance
Policy as provided for in Section 2.11 insuring the Servicer against any
loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section
4.03 Servicing
Compensation.
As
consideration for servicing the Mortgage Loans pursuant to this Agreement,
the
Servicer shall be entitled to retain the applicable Servicing Fee from
payments
on the Mortgage Loans or to withdraw the applicable Servicing Fee with
respect
to each Mortgage Loan from the Custodial Account pursuant to Section 2.05
hereof. The obligation of the Owner to pay, and the Servicer’s right to
withdraw, the Servicing Fee is limited to, and the Servicing Fee is payable
solely from, the interest portion (including recoveries with respect to
interest
from Liquidation Proceeds, to the extent permitted by Section 2.05) of such
Monthly Payment collected by the Servicer, or as otherwise provided under
Section 2.05. The Servicer shall be entitled to all accrued and unpaid
Servicing Fees upon the termination of its servicing of the related Mortgage
Loans.
Additional
servicing compensation in the form of Ancillary Income shall be retained
by the
Servicer to the extent not required to be deposited in the Custodial Account.
The Servicer shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section
4.04 Right
to Examine Servicer Records.
So long
as any Mortgage Loan are being serviced hereunder and for a reasonable
period
after servicing has been transferred, the Owner shall have the right to
examine
and audit any and all of the books, records, or other material information
of
the Servicer, whether held by the Servicer or by another on its behalf,
with
respect to or concerning this Agreement or the Mortgage Loans, during business
hours or at such other times as may be reasonable under applicable
circumstances, upon reasonable advance notice.
-29-
Section
4.05 Compliance
with Xxxxx-Xxxxx-Xxxxxx Act of 1999.
With
respect to each Mortgage Loan and the related Mortgagor, the Servicer shall
comply with Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999, as amended, and
all applicable regulations and guidelines promulgated thereunder, and shall
provide all notices required thereunder using the notice language supplied
by
the Owner.
ARTICLE
V
SERVICER
TO COOPERATE
Section
5.01 Provision
of Information.
During
the term of this Agreement, the Servicer shall furnish to the Owner such
periodic, special, or other reports or information, whether or not provided
for
herein, as shall be necessary, reasonable, or appropriate with respect
to the
Owner or the purposes of this Agreement. All such reports or information
shall
be provided by and in accordance with all reasonable instructions and directions
which the Owner may give.
The
Servicer shall execute and deliver all such instruments and take all such
action
as the Owner may reasonably request from time to time, in order to effectuate
the purposes and to carry out the terms of this Agreement.
Section
5.02 Financial
Statements; Servicing Facilities.
So
long
as any Mortgage Loan is being serviced hereunder and for a reasonable period
after servicing has been transferred, in connection with marketing the
Mortgage
Loans, the Owner may make available to a prospective Owner a Consolidated
Statement of Operations of the Servicer for the most recently completed
three
fiscal years for which such a statement is available, as well as a
Consolidated Statement of Condition at the end of the last two fiscal years
covered by such Consolidated Statement of Operations. The Servicer also
shall
make available any comparable interim statements to the extent any such
statements have been prepared by or on behalf of the Servicer (and are
available
upon request to members or stockholders of the Servicer or to the public
at
large). If it has not already done so, the Servicer shall furnish promptly
to
the Owner copies of the statement specified above.
So
long
as any Mortgage Loan is being serviced hereunder and for a reasonable period
after servicing has been transferred, the Servicer shall make available
to the
Owner or any prospective Owner a knowledgeable financial or accounting
officer
for the purpose of answering questions respecting recent developments affecting
the Servicer or the financial statements of the Servicer, and to permit
any
prospective Owner to inspect the Servicer’s servicing facilities for the purpose
of satisfying such prospective Owner that the Servicer has the ability
to
service the Mortgage Loans as provided in this Agreement.
Section
5.03 Covenant.
The
Servicer shall use its best efforts to (i) obtain servicer ratings of at
least “Average” from Standard & Poor’s and “RPS2-“ from Fitch and
(ii) become a Xxxxxx Xxx and Xxxxxxx Mac approved servicer, in either case,
as soon as practicable.
-30-
ARTICLE
VI
TERMINATION
Section
6.01 Liability
of the Owner and the Servicer.
The
Owner
and the Servicer shall each be liable in accordance with the terms of this
Agreement only to the extent of the obligations specifically and respectively
imposed upon and undertaken by the Owner and Servicer in this Agreement.
Section
6.02 Termination.
(a)
This
Agreement shall terminate with respect to the Mortgage Loans or any portion
thereof transferred on the related Subsequent Transfer Date or on such
other
date as mutually agreed upon by the Owner and the Servicer. The Owner may
elect
to terminate this Agreement and transfer the servicing from the Servicer
prior
to the related Subsequent Transfer Date with respect to all or any portion
of
the Mortgage Loans by providing written notice to the Servicer at least
30 days prior to the date on which it intends to transfer the servicing of
its intent to transfer the servicing from the Servicer.
In
the
event the Servicer is terminated pursuant to the terms of this Agreement,
the
Servicer agrees to cooperate with the Owner and with any party designated
as the
successor servicer or subservicer in transferring the servicing to such
successor servicer. In addition, the Servicer shall be responsible for
notifying
the related Mortgagors of any transfer of servicing in accordance with
the
requirements of the RESPA and the Xxxxxxxx Xxxxxxxx National Affordable
Housing
Act of 1990, as amended.
On
or
before the related Subsequent Transfer Date or such other date specified
by the
Owner in accordance with this Section 6.02(a) for the transfer of servicing
from the Servicer, the Servicer shall prepare, execute and deliver to the
successor entity designated by the Owner any and all documents and other
instruments, place in such successor’s possession all Mortgage Loan Documents
necessary or appropriate to effect the purposes of such notice of termination,
including but not limited to the transfer and endorsement or assignment
of the
Mortgage Loans and related documents. The Servicer shall cooperate with
the
Owner and such successor in effecting the termination of the Servicer’s
responsibilities and rights hereunder.
On
the
related Subsequent Transfer Date for each Mortgage Loan, this Agreement,
except
for Articles VI, VIII, IX and X which shall survive the related Subsequent
Transfer Date, shall terminate.
(b) Servicing
Advances.
On or
before the date which is five (5) days after the related Subsequent
Transfer Date, the Owner or its designee shall reimburse the Servicer for
any
Servicing Advances and Monthly Advances with respect to any Mortgage Loan.
This
Section 6.02(b) shall survive the related Subsequent Transfer Date;
provided
that
neither the Owner nor its designee shall be obligated to reimburse the
Servicer
for any Servicing Advances or Monthly Advances which are reasonably deemed
to be
nonrecoverable by the Owner or its designee as of the related Subsequent
Transfer Date in its sole reasonable discretion.
(c) Additional
Termination Provisions.
Notwithstanding and in addition to the foregoing, in the event that (i) a
Mortgage Loan becomes delinquent for a period of 90 days or more (a
“Delinquent
Mortgage Loan”)
or
(ii) a Mortgage Loan becomes an REO Property, the Owner may at its election
terminate this Agreement with respect to such Delinquent Mortgage Loan
or REO
Property, upon 15 days’ written notice to the Servicer, and have servicing
transferred to a successor servicer.
-31-
ARTICLE
VII
BOOKS
AND RECORDS
Section
7.01 Possession
of Servicing Files Prior to the Subsequent Transfer Date.
Prior
to
the related Subsequent Transfer Date, the contents of each Servicing File
are
and shall be held in trust by the Servicer for the benefit of the Owner
as the
owner thereof. The Servicer shall maintain in the Servicing File a copy
of the
contents of each Mortgage File and the originals (or imaged copies) of
the
documents in each Mortgage File not delivered to the Owner. The possession of
the Servicing File by the Servicer is at the will of the Owner for the
sole
purpose of servicing the related Mortgage Loan, pursuant to this Agreement,
and
such retention and possession by the Servicer is in its capacity as Servicer
only and at the election of the Owner. The Servicer shall release its custody
of
the contents of any Servicing File only in accordance with written instructions
from the Owner, unless such release is required as incidental to the Servicer’s
servicing of the Mortgage Loans pursuant to this Agreement, or is in connection
with a repurchase of any Mortgage Loan from the Owner.
The
Servicer 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 Owner. In particular,
the
Servicer shall maintain in its possession, available for inspection by
the Owner
or its designee, and shall deliver to the Owner or its designee upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of Xxxxxx Xxx or Xxxxxxx Mac, including but
not
limited to documentation as to the method used in determining the applicability
of the provisions of the Flood Disaster Protection Act of 1973, as amended,
to
the Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by Xxxxxx Mae and periodic
inspection reports as required by Section 2.12.
The
Servicer shall keep at its servicing office books and records in which,
subject
to such reasonable regulations as it may prescribe, the Servicer shall
note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless
such transfer is in compliance with the terms hereof. For the purposes
of this
Agreement, the Servicer shall be under no obligation to deal with any person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such person as the owner of the Mortgage Loan. The Owner may,
subject to the terms of this Agreement, sell or transfer one or more of
the
Mortgage Loans. The Owner also shall advise the Servicer of the transfer.
Upon
receipt of notice of the transfer, the Servicer shall xxxx its books and
records
to reflect the ownership of the Mortgage Loans of such assignee, and shall
release the previous Owner from its obligations hereunder with respect
to the
Mortgage Loans sold or transferred.
-32-
ARTICLE
VIII
INDEMNIFICATION
AND ASSIGNMENT
Section
8.01 Indemnification.
(a) The
Servicer agrees to indemnify and hold the Owner and any successor servicer
harmless from any liability, claim, loss or damage (including, without
limitation, any reasonable legal fees, judgments or expenses relating to
such
liability, claim, loss or damage) to the Owner directly or indirectly resulting
from the Servicer’s failure:
(i) to
observe and perform any or all of Servicer’s duties, obligations, covenants,
agreements, warranties or representations contained in this Agreement including,
without limitation, Sections 4.04 and 4.05; or
(ii) to
comply
with all applicable requirements with respect to the servicing of the Mortgage
Loans as set forth herein.
The
Servicer immediately shall notify the Owner if a claim is made by a third
party
with respect to this Agreement. For purposes of this Section 8.01(a),
“Owner” shall mean the Person then acting as the Owner under this Agreement and
any and all Persons who previously were “Owners” under this
Agreement.
(b) The
Owner
agrees to indemnify and hold the Servicer harmless from any liability,
claim,
loss or damage (including without limitation, any reasonable legal fees,
judgments or expenses relating to such liability, claim, loss or damage)
to the
Servicer (i) directly or indirectly resulting from the Owner’s failure to
observe and perform any or all of the Owner’s duties, obligations, covenants,
agreements, warranties or representations contained in this Agreement or
(ii) directly resulting from the Servicer taking any legal actions with
respect to any Mortgage Loans and/or REO Properties in the name of the
Servicer
and without reference to the Owner, or (iii) any act or omission on the
part of the Owner, any prior servicer or any other third party which occurred
in
connection with the prior servicing of a Mortgage Loan, but, in each case,
only
to the extent such loss does not result from the failure of the Servicer
(x) to observe and perform any or all of Servicer’s duties, obligations,
covenants, agreements, warranties or representations contained in this
Agreement
or in any other agreement pursuant to which the Servicer services or has
serviced any such Mortgage Loan; or (y) to comply with all applicable
requirements with respect to the servicing of the Mortgage Loans as set
forth in
this Agreement or in any other agreement pursuant to which the Servicer
services
or has serviced any such Mortgage Loan.
Section
8.02 Limitation
on Liability of Servicer and Others.
Neither
the Servicer nor any of the directors, members, officers, employees or
agents of
the Servicer shall be under any liability to the Owner for any action taken
or
for refraining from the taking of any action in good faith pursuant to
this
Agreement, or for errors in judgment, provided,
however,
that
this provision shall not protect the Servicer or any such person against
any
breach of warranties or representations made herein, its own negligent
actions,
or failure to perform its obligations in compliance with any standard of
care
set forth in this Agreement, or any liability which would otherwise be
imposed
by reason of any breach of the terms and conditions of this Agreement.
The
Servicer and any director, member, officer, employee or agent of the Servicer
may rely in good faith on any document of any kind prima facie properly
executed
and submitted by any Person respecting any matters arising hereunder. The
Servicer shall not be under any obligation to appear in, prosecute or defend
any
legal action which is not incidental to its duties to service the Mortgage
Loans
in accordance with this Agreement and which in its opinion may involve
it in any
expense or liability, provided,
however,
that
the Servicer may undertake any such action which it may deem necessary
or
desirable in respect to this Agreement and the rights and duties of the
parties
hereto. In such event, the Servicer shall be entitled to reimbursement
from the
Owner of the reasonable legal expenses and costs of such action.
-33-
Section
8.03 Limitation
on Resignation and Assignment by Servicer.
The
Owner
has entered into this Agreement with the Servicer and subsequent purchasers
will
purchase the Mortgage Loans in reliance upon the independent status of
the
Servicer, and the representations as to the adequacy of its servicing
facilities, plant, personnel, records and procedures, its integrity, reputation
and financial standing, and the continuance thereof. Therefore, the Servicer
shall not assign this Agreement or the servicing hereunder or delegate
its
rights or duties hereunder or any portion hereof or sell or otherwise dispose
of
all or substantially all of its property or assets without the prior written
consent of the Owner, which consent shall be granted or withheld in the
reasonable discretion of the Owner.
The
Servicer may, without the consent of the Owner, retain third party contractors
to perform certain servicing and loan administration functions, including
without limitation, hazard insurance administration, tax payment and
administration, flood certification and administration, collection services
and
similar functions; provided,
that
the retention of such contractors by Servicer shall not limit the obligation
of
the Servicer to service the Mortgage Loans pursuant to the terms and conditions
of this Agreement.
The
Servicer shall not resign from the obligations and duties hereby imposed
on it
except by mutual consent of the Servicer and the Owner or upon the determination
that its duties hereunder are no longer permissible under applicable law
and
such incapacity cannot be cured by the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion
of
Counsel to such effect delivered to the Owner which Opinion of Counsel
shall be
in form and substance acceptable to the Owner. No such resignation shall
become
effective until a successor shall have assumed the Servicer’s responsibilities
and obligations hereunder in the manner provided in
Section 6.02.
Without
in any way limiting the generality of this Section 8.03, in the event that
the Servicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its
property
or assets without the prior written consent of the Owner, then the Owner
shall
have the right to terminate this Agreement upon notice given as set forth
in
Section 6.02(a), without any payment of any penalty or damages and without
any liability whatsoever to the Servicer or any third party.
-34-
Notwithstanding
any provision in this Agreement to the contrary, the Servicer may at any
time
upon notice to the Owner, or trustee in the case of a Reconstitution, and
without the consent of any party, solely in connection with a financing
or other
facility (any such arrangement, an “Advance
Facility”),
assign as collateral security or pledge to another Person all its rights,
title and interest under this Agreement to its rights to reimbursement of
Servicing Advances.
Section
8.04 Assignment
by Owner.
Subject
to the limitations and requirements set forth in this Agreement, the Owner
shall
have the right, to assign, in whole or in part, its interest under this
Agreement with respect to some or all of the Mortgage Loans, and designate
any
person to exercise any rights of the Owner hereunder.
Section
8.05 Merger
or Consolidation of the Servicer.
The
Servicer will keep in full effect its existence, rights and franchises
as a
limited liability company under the laws of the state of its filing 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.
Any
Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation (including by means
of
the sale of all or substantially all of the Servicer’s assets to such Person) to
which the Servicer shall be a party, or any Person succeeding to the business
of
the Servicer (whether or not related to loan servicing), shall be the successor
of the Servicer 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 Servicer shall not, without the prior written approval of the Owner,
be a
party to any such merger, conversion or consolidation, or sell or otherwise
dispose of all or substantially all of its business or assets if, (i) as a
result of such merger, conversion or consolidation, sale or other disposition,
an Event of Default under Section 11.01 hereof would exist with respect to
such successor Servicer or (ii) such successor has (a) a residential
primary servicer rating for servicing of mortgage loans issued by
Standard & Poor’s Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc., Fitch, Inc. or Xxxxx’x Investors Service, Inc. below “average”
or its equivalent or (b) a net worth of less than $25,000,000.
The
Servicer shall give 90 days’ prior written notice to the Owner to the
extent permitted by applicable law of any such merger, conversion,
consolidation, sale or other disposition to which the Servicer proposes
to be a
party. In the event that any successor entity to the Servicer fails to
meet the
requirements set forth in this Section 8.05 and the Owner does not consent
to such successor becoming the servicer hereunder, then the Servicer shall
have
the right to terminate this Agreement with respect to the Servicer and
any such
successor upon notice given as set forth in Section 6.01, without any
payment of any termination penalty or termination damages and without any
additional liability whatsoever to the Servicer or any third party, except
for
liabilities accrued under this Agreement prior to the date of termination
and
for liabilities resulting from Owner’s obligations hereunder, including the
payment of the Servicing Fee pursuant to Section 4.03.
-35-
ARTICLE
IX
REPRESENTATIONS
AND WARRANTIES
Section
9.01 Representations
and Warranties Regarding the Servicer.
As
of the
date hereof and on each date on which a Mortgage Loan Package becomes subject
to
the terms of this Agreement, the Servicer warrants and represents to, and
covenants and agrees with, the Owner as follows:
(a) Due
Organization and Authority.
The
Servicer is a Delaware limited liability company duly organized, validly
existing and in good standing under the laws of Delaware and has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in each state where a 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 Servicer, and in any event
the
Servicer is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of the related Mortgage Loan in
accordance with the terms of this Agreement; the Servicer has the full
power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments or transfer to be delivered pursuant to this Agreement)
by the
Servicer and the consummation of the transactions contemplated hereby have
been
duly and validly authorized; this Agreement evidences the valid, binding
and
enforceable obligation of the Servicer; and all requisite action has been
taken
by the Servicer to make this Agreement valid and binding upon the Servicer
in
accordance with its terms;
(b) Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in
the
ordinary course of business of the Servicer.
(c) No
Conflicts.
Neither
the execution and delivery of this Agreement, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict
with
or result in a breach of any of the terms, conditions or provisions of
the
Servicer’s certificate of formation or limited liability company agreement or
any legal restriction or any agreement or instrument to which the Servicer
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 Servicer or its
property is subject, or impair the ability of the Owner to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans.
(d) Ability
to Service.
The
Servicer has the facilities, procedures, and experienced personnel necessary
for
the sound servicing of mortgage loans of the same type as the Mortgage
Loans.
The Servicer is in good standing to enforce and service mortgage loans
in the
jurisdiction wherein the Mortgaged Properties are located.
(e) Ability
to Perform.
The
Servicer 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.
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(f) No
Litigation Pending.
There
is no action, suit, proceeding or investigation pending or to the best
of
Servicer’s knowledge threatened against the Servicer, 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 Servicer,
or in any
material impairment of the right or ability of the Servicer to carry on
its
business substantially as now conducted, or in any material liability on
the
part of the Servicer, 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 Servicer contemplated herein, or
which
would be likely to impair materially the ability of the Servicer to perform
under the terms of this Agreement.
(g) No
Consent Required.
No
consent, approval, authorization or order of any court or governmental
agency or
body is required for the execution, delivery and performance by the Servicer
of
or compliance by the Servicer with this Agreement, or the servicing of
the
Mortgage Loans as evidenced by the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been obtained prior
to the
date hereof.
(h) No
Untrue Information.
(i)
No
statement, report or other document relating to the Servicer furnished
or to be
furnished by the Servicer pursuant to this Agreement or in connection with
the
transactions contemplated hereby contains any untrue statement of material
fact
or omits to state a material fact necessary to make the statements contained
therein not misleading.
Section
9.02 Representations
and Warranties of the Owner.
As of
the date hereof and on each date on which a Mortgage Loan Package becomes
subject to the terms of this Agreement, the Owner warrants and represents
to,
and covenants and agrees with, the Servicer as follows:
(a) Organization
and Good Standing; Licensing.
The
Owner is a New York limited partnership duly organized, validly existing
and has
the power and authority to own its assets and to transact the business
in which
it is currently engaged.
(b) Authorization;
Binding Obligations.
The
Owner has the power and authority to make, execute, deliver and perform
this
Agreement, and perform all of the transactions contemplated to be performed
by
it under this Agreement, and has taken all necessary action to authorize
the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of the Owner enforceable in accordance with its terms, except
as
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally and by the availability of
equitable remedies.
-37-
(c) No
Consent Required.
The
Owner is not required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration
with,
any governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement, except
such
as have been obtained or made or as to which the failure to obtain or make
will
not materially adversely affect the ability of the Owner to perform all
obligations hereunder.
(d) No
Violations.
The
execution, delivery and performance of this Agreement by the Owner will
not
violate any provision of any existing law or regulation or any order or
decree
of any court applicable to the Owner, except for violations that will not
adversely affect the Owner’s ability to perform its obligations under this
Agreement or the certificate of incorporation of the Owner, or constitute
a
material breach of any mortgage, indenture, contract or other agreement
to which
the Owner is a party or by which the Owner may be bound.
(e) Litigation.
No
litigation or administrative proceeding of or before any court, tribunal
or
governmental body is currently pending or to the knowledge of the Owner
threatened, against the Owner or with respect to this Agreement, which
if
adversely determined would have a material adverse effect on the transactions
contemplated by this Agreement.
ARTICLE
X
DEFAULT
Section
10.01 Events
of Default.
The
following shall constitute an Event of Default under this Agreement on
the part
of the Servicer:
(a) any
failure by the Servicer to remit to the Owner any payment required to be
made
under the terms of this Agreement which continues unremedied for a period
of two
(2) Business Days after the date upon which notice of such failure is given
to the Servicer, requiring the same to be remedied, shall have been given
to the
Servicer by the Owner; or
(b) the
failure by the Servicer duly to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Servicer set forth
in
this Agreement or in the Custodial Agreement which continues unremedied
for a
period of 30 days after the date on which notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the Owner
(the
date of delivery of such notice, the “Notice
Date”);
provided,
however,
that in
the case of a failure that cannot be cured within thirty (30) days after
the Notice Date, the cure period may be extended if the Servicer can demonstrate
to the reasonable satisfaction of the Owner that the failure can be cured
and
the Servicer is diligently pursuing remedial action; or
(c) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshaling of assets and liabilities
or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days;
or
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(d) the
Servicer shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
of
assets and liabilities or similar proceedings of or relating to the Servicer
or
of or relating to all or substantially all of its property; or
(e) the
Servicer shall admit in writing its inability to pay its debts generally
as they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(f) the
Servicer fails to maintain its license to do business or service residential
mortgage loans in any jurisdiction where the Mortgaged Properties are located
for more than thirty (30) days after receiving notice from any Person
thereof; or
(g) Any
reduction, withdrawal or qualification of the servicing credit of the Servicer
by any Rating Agency which results in the inability of the Servicer to
act as a
primary or special servicer for any mortgage-backed or asset-backed transaction
rated or to be rated by any such Rating Agency; or
(h) the
Servicer attempts to assign its right to servicing compensation hereunder
or the
Servicer attempts, without the consent of the Owner, to sell or otherwise
dispose of all or substantially all of its property or assets or to assign
this
Agreement or the servicing responsibilities hereunder or to delegate its
duties
hereunder or any portion thereof in a manner not permitted under this
Agreement.
In
each
and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatsoever rights the Owner may have at law or
equity
to damages, including injunctive relief and specific performance, the Owner,
by
notice in writing to the Servicer, may terminate without compensation all
the
rights and obligations of the Servicer under this Agreement and in and
to the
Mortgage Loans and the proceeds thereof.
Upon
receipt by the Servicer of such written notice, all authority and power
of the
Servicer under this Agreement, whether with respect to the Mortgage Loans
or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 6.02. Upon written request from the Owner, the Servicer shall
prepare, execute and deliver any and all documents and other instruments,
place
in such successor’s possession all Mortgage Files to the extent initially
provided to the Servicer, and do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise, at the Servicer’s sole expense or as
otherwise provided under Accepted Servicing Practices. The Servicer agrees
to
cooperate with the Owner and such successor in effecting the termination
of the
Servicer’s responsibilities and rights hereunder, including, without limitation,
the transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Servicer to the Custodial Account
or
Escrow Account or thereafter received with respect to the Mortgage
Loans.
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Section
10.02 Waiver
of Defaults.
By
a
written notice, the Owner may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any
waiver
of a past default, such default shall cease to exist, and any Event of
Default
arising therefrom shall be deemed to have been remedied for every purpose
of
this Agreement. No such waiver shall extend to any subsequent or other
default
or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE
XI
MISCELLANEOUS
PROVISIONS
Section
11.01 Notices.
All
notices, requests, demands and other communications which are required
or
permitted to be given under this Agreement shall be in writing and shall
be
deemed to have been duly given upon the delivery or mailing thereof, as
the case
may be, sent by registered or certified mail, return receipt
requested:
|
(a)
|
If
to Owner to:
|
Xxxxxxx
Xxxxx Mortgage Company
00
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxxxx
Facsimile
Number: (000) 000-0000
|
(b)
|
If
to Servicer to:
|
Avelo
Mortgage, L.L.C.
000
X.
Xxx Xxxxxxx Xxxxxxxxx
Xxxxx
000
Xxxxxx,
Xxxxx 00000
Attention:
President and General Counsel
Facsimile
Number: (000) 000-0000 / (000) 000-0000
Section
11.02 Waivers.
Either
the Servicer or Owner may upon consent of all parties, by written notice
to the
others:
(a) Waive
compliance with any of the terms, conditions or covenants required to be
complied with by the others hereunder; and
(b) Waive
or
modify performance of any of the obligations of the others
hereunder.
The
waiver by any party hereto of a breach of any provision of this Agreement
shall
not operate or be construed as a waiver of any other subsequent
breach.
Section
11.03 [Reserved].
-40-
Section
11.04 Entire
Agreement; Amendment.
This
Agreement, including all documents and exhibits incorporated by reference
herein, constitutes the entire agreement between the parties with respect
to
servicing of the Mortgage Loans. This Agreement may be amended and any
provision
hereof waived, but, only in writing signed by the party against whom such
enforcement is sought.
Section
11.05 Execution;
Binding Effect.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed,
shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.03, this Agreement shall inure
to the benefit of and be binding upon the Servicer and the Owner and their
respective successors and assigns.
Section
11.06 Headings.
Headings
of the Articles and Sections in this Agreement are for reference purposes
only and shall not be deemed to have any substantive effect.
Section
11.07 Applicable
Law.
This
Agreement shall be construed in accordance with the laws of the State of
New
York.
Section
11.08 Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or
joint
venture between the parties. The duties and responsibilities of the Servicer
shall be rendered by them as independent contractors and not as an agent
of
Owner. The Servicer shall have full control of all of its acts, doings,
proceedings, relating to or requisite in connection with the discharge
of its
duties and responsibilities under this Agreement.
Section
11.09 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall
in no way
affect the validity or enforceability of the other provisions of this
Agreement.
Section
11.10 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;
-41-
(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;
(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
11.11 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
11.12 Further
Agreements.
The
Servicer and the Owner 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
11.13 No
Solicitation.
From
and after the related Transfer Date, the Servicer agrees that it will not
take
any action or cause any action to be taken by any of its agents or affiliates,
or by any independent contractors on the Servicer’s behalf, to personally, by
telephone or mail, solicit the Mortgagor under any Mortgage Loan for any
purpose
whatsoever, including to refinance a Mortgage Loan, in whole or in part,
without
the prior written consent of the Owner. It is understood and agreed that
all
rights and benefits relating to the solicitation of any Mortgagors and
the
attendant rights, title and interest in and to the list of such Mortgagors
and
data relating to their Mortgages (including insurance renewal dates) shall
be
transferred to the Owner pursuant hereto on the related Transfer Date and
the
Servicer shall take no action to undermine these rights and benefits.
Notwithstanding the foregoing, it is understood and agreed that promotions
undertaken by the Servicer or any affiliate of the Servicer which are directed
to the general public at large, including, without limitation, mass mailing,
internet and e-mail solicitations, based in all instances, on commercially
acquired mailing lists (which may not be targeted at the Mortgagors) and
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 29.
Section
11.14 Waiver
of Trial by Jury.
THE
SERVICER AND THE OWNER 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.
-42-
Section
11.15 Submission
To Jurisdiction; Waivers.
The
Servicer hereby irrevocably and unconditionally:
(A) SUBMITS
FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS
AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF
NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS
THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO
THE
EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE
TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT
SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT
TO
PLEAD OR CLAIM THE SAME;
(C) AGREES
THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED
BY
MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH HEREIN
OR AT
SUCH OTHER ADDRESS OF WHICH THE OWNER SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES
THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS
IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO XXX IN ANY OTHER
JURISDICTION.
Section
11.16 Confidential
Information.
The
Servicer and Owner understand and agree that this Agreement, any other
agreements executed in connection with the sale contemplated hereunder,
any
agreements executed in connection with any Reconstitution, and any offering
circulars or other disclosure documents produced in connection with any
Reconstitution are confidential and proprietary to the Owner or Servicer,
and
the Servicer and Owner agree to hold such documents confidential and not
to
divulge such documents to anyone except (a) to the extent required by law
or
judicial order or to enforce its rights or remedies under this Agreement,
(b) to
the extent such information enters into the public domain other than through
the
wrongful act of the Servicer or the Owner, as the case may be, (c) as is
necessary in working with legal counsel, rating agencies, auditors, agents,
taxing authorities or other governmental agencies (d) the federal income
tax
treatment of the transactions hereunder, any fact relevant to understanding
the
federal tax treatment of the transactions hereunder, and all materials
of any
kind (including opinions or other tax analyses) relating to such federal
income
tax treatment, or (e) to their respective Affiliates (so long as such Affiliates
agree to keep such information confidential as if such Affiliate were bound
to
the same extent the parties to this Agreement are bound by this Section
11.16);
provided
that the
Servicer may not disclose the name of or identifying information with respect
to
Owner or any pricing terms or other nonpublic business or financial information
that is unrelated to the purported or claimed federal income tax treatment
of
the transactions hereunder and is not relevant to understanding the purported
or
claimed federal income tax treatment of the transactions hereunder. Moreover,
the Servicer understands and agrees that this Agreement, any other agreements
executed in connection with the sale contemplated hereunder, any agreements
executed in connection with the securitization of the Mortgage Loans, and
any
offering circulars or other disclosure documents produced in connection
with
such securitization are confidential and proprietary to the Owner, and
the
Servicer agrees to hold such documents confidential and not to divulge
such
documents to anyone except (a) to the extent required by law or judicial
order
or to enforce its rights or remedies under this letter agreement or the
Agreements, (b) to the extent such information enters into the public domain
other than through the wrongful act of the Servicer (c) as is necessary
in
working with legal counsel, auditors, agents, rating agencies, taxing
authorities or other governmental agencies, or (d) to their respective
Affiliates (so long as such Affiliates agree to keep such information
confidential as if such Affiliate were bound to the same extent the parties
to
this Agreement are bound by this Section 11.16). The rights and obligations
set
forth in this paragraph shall survive the related Transfer Date and shall
not
merge into the closing documents but shall be independently enforceable
by the
parties hereto.
-43-
ARTICLE
XII
COMPLIANCE
WITH REGULATION AB
Section
12.01 Intent
of the Parties; Reasonableness.
The
Owner and the Servicer acknowledge and agree that the purpose of
Article XII of this Agreement is to facilitate compliance by the Owner 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 Servicer acknowledges that investors in privately offered
securities may require that the Owner 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 Owner 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 Servicer 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 Owner 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 Servicer shall cooperate fully with the Owner to deliver
to the
Owner (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 Owner or any Depositor
to
permit the Owner or such Depositor to comply with the provisions of Regulation
AB, together with such disclosures relating to the Servicer, any Subservicer
and
the Mortgage Loans, or the servicing of the Mortgage Loans, reasonably
believed
by the Owner or any Depositor to be necessary in order to effect such
compliance.
-44-
The
Owner
(including any of its assignees or designees) shall cooperate with the
Servicer
by providing timely notice of requests for information under these provisions
and by reasonably limiting such requests to information required, in the
Owner’s
reasonable judgment, to comply with Regulation AB.
Section
12.02 Additional
Representations and Warranties of the Servicer.
(a) The
Servicer shall be deemed to represent to the Owner and to any Depositor,
as of
the date on which information is first provided to the Owner or any Depositor
under Section 12.03 that, except as disclosed in writing to the Owner or
such
Depositor prior to such date: (i) the Servicer is not aware and has not
received
notice that any default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act or failure
to
act of the Servicer; (ii) the Servicer has not been terminated as servicer
in a
residential mortgage loan securitization, either due to a servicing default
or
to application of a servicing performance test or trigger; (iii) no material
noncompliance with the applicable servicing criteria with respect to other
securitizations of residential mortgage loans involving the Servicer as
servicer
has been disclosed or reported by the Servicer; (iv) no material changes
to the
Servicer’s policies or procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement for mortgage
loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (v)
there
are no aspects of the Servicer’s financial condition that could have a material
adverse effect on the performance by the Servicer of its servicing obligations
under this Agreement or any Reconstitution Agreement; (vi) there are no
material
legal or governmental proceedings pending (or known to be contemplated)
against
the Servicer or any Subservicer; and (vii) there are no affiliations,
relationships or transactions relating to the Servicer or any Subservicer
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 Owner or any Depositor on any date following the date
on which
information is first provided to the Owner or any Depositor under Section
12.03,
the Servicer 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.
Section
12.03 Information
to Be Provided by the Servicer.
In
connection with any Securitization Transaction the Servicer shall (i) within
five Business Days following request by the Owner or any Depositor, provide
to
the Owner and such Depositor (or cause each Subservicer to provide), in
writing
and in form and substance reasonably satisfactory to the Owner and such
Depositor, the information and materials specified in paragraphs (a), (c)
and
(f) of this Section, and (ii) as promptly as practicable following notice
to or
discovery by the Servicer, provide to the Owner and any Depositor (in writing
and in form and substance reasonably satisfactory to the Owner and such
Depositor) the information specified in paragraph (d) of this
Section.
-45-
(a) If
so
requested by the Owner or any Depositor, the Servicer shall provide such
information regarding each Subservicer, as is requested for the purpose
of
compliance with Items 1103(a)(1), 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum:
(A) [Reserved];
(B) [Reserved];
(C) a
description of any material legal or governmental proceedings pending (or
known
to be contemplated) against the Servicer and each Subservicer; and
(D) a
description of any affiliation or relationship between the Servicer, each
Subservicer and any of the following parties to a Securitization Transaction,
as
such parties are identified to the Servicer by the Owner 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) [Reserved].
(c) If
so
requested by the Owner or any Depositor, the Servicer shall provide such
information regarding the Servicer, as servicer of the Mortgage Loans,
and each
Subservicer (each of the Servicer and each Subservicer, for purposes of
this
paragraph, a “Transaction
Servicer”),
as is
requested for the purpose of compliance with Item 1108 of Regulation AB.
Such
information shall include, at a minimum:
(A) the
Transaction Servicer’s form of organization;
-46-
(B) a
description of how long the Transaction Servicer has been servicing residential
mortgage loans; a general discussion of the Transaction Servicer’s experience in
servicing assets of any type as well as a more detailed discussion of the
Transaction Servicer’s experience in, and procedures for, the servicing function
it will perform under this Agreement and any Reconstitution Agreements;
information regarding the size, composition and growth of the Transaction
Servicer’s portfolio of residential mortgage loans of a type similar to the
Mortgage Loans and information on factors related to the Transaction Servicer
that may be material, in the good faith judgment of the Owner or any Depositor,
to any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without
limitation:
|
(1)
|
whether
any prior securitizations of mortgage loans of a type similar
to the
Mortgage Loans involving the Transaction Servicer have defaulted
or
experienced an early amortization or other performance triggering
event
because of servicing during the three-year period immediately
preceding
the related Securitization
Transaction;
|
|
(2)
|
the
extent of outsourcing the Transaction Servicer
utilizes;
|
|
(3)
|
whether
there has been previous disclosure of material noncompliance
with the
applicable servicing criteria with respect to other securitizations
of
residential mortgage loans involving the Transaction Servicer
as a
servicer during the three-year period immediately preceding the
related
Securitization Transaction;
|
|
(4)
|
whether
the Transaction Servicer has been terminated as servicer in a
residential
mortgage loan securitization, either due to a servicing default
or to
application of a servicing performance test or trigger;
and
|
|
(5)
|
such
other information as the Owner or any Depositor may reasonably
request for
the purpose of compliance with Item 1108(b)(2) of Regulation
AB;
|
(C) a
description of any material changes during the three-year period immediately
preceding the related Securitization Transaction to the Transaction Servicer’s
policies or procedures with respect to the servicing function it will perform
under this Agreement for mortgage loans of a type similar to the Mortgage
Loans;
(D) information
regarding the Transaction Servicer’s financial condition, to the extent that
there is a material risk that an adverse financial event or circumstance
involving the Transaction Servicer could have a material adverse effect
on the
performance by the Transaction Servicer of its servicing obligations under
this
Agreement or any Reconstitution Agreement;
-47-
(E) information
regarding advances made by the Transaction Servicer on the Mortgage Loans
and
the Transaction Servicer’s overall servicing portfolio of residential mortgage
loans for the three-year period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an authorized officer
of the
Transaction Servicer to the effect that the Transaction Servicer has made
all
advances required to be made on residential mortgage loans serviced by
it during
such period, or, if such statement would not be accurate, information regarding
the percentage and type of advances not made as required, and the reasons
for
such failure to advance;
(F) a
description of the Transaction Servicer’s processes and procedures designed to
address any special or unique factors involved in servicing loans of a
similar
type as the Mortgage Loans;
(G) a
description of the Transaction Servicer’s processes for handling delinquencies,
losses, bankruptcies and recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts; and
(H) information
as to how the Transaction Servicer defines or determines delinquencies
and
charge-offs, including the effect of any grace period, re-aging, restructuring,
partial payments considered current or other practices with respect to
delinquency and loss experience.
(d) If
so
requested by the Owner 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 Servicer shall (or shall cause each Subservicer
to)
(i) notify the Owner and any Depositor in writing of (A) any material litigation
or governmental proceedings pending against the Servicer or any Subservicer
and
(B) any affiliations or relationships that develop following the closing
date of
a Securitization Transaction between the Servicer or any Subservicer 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 Owner and any
Depositor
a description of such proceedings, affiliations or relationships.
(e) As
a
condition to the succession to the Servicer or any Subservicer as servicer
or
subservicer under this Agreement or any Reconstitution Agreement by any
Person
(i) into which the Servicer or such Subservicer may be merged or consolidated,
or (ii) which may be appointed as a successor to the Servicer or any
Subservicer, the Servicer shall provide to the Owner and any Depositor,
at least
15 calendar days prior to the effective date of such succession or appointment,
(x) written notice to the Owner and any Depositor of such succession or
appointment and (y) in writing and in form and substance reasonably satisfactory
to the Owner and such Depositor, all information reasonably requested by
the
Owner or any Depositor in order to comply with its reporting obligation
under
Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
-48-
(f) In
addition to such information as the Servicer, as servicer, is obligated
to
provide pursuant to other provisions of this Agreement, if so requested
by the
Owner or any Depositor, the Servicer shall provide such information regarding
the performance or servicing of the Mortgage Loans as is reasonably required
by
the Owner or any Depositor to facilitate preparation of distribution reports
in
accordance with Item 1121 of Regulation AB and to permit the Owner or such
Depositor to comply with the provisions of Regulation AB relating to Static
Pool
Information regarding the performance of the Mortgage Loans on the basis
of the
Owner’s or such Depositor’s reasonable, good faith interpretation of the
requirements of Item 1105(a)(1)-(3) of Regulation AB (including without
limitation as to the format and content of such Static Pool Information).
Such
information shall be provided concurrently with the monthly reports otherwise
required to be delivered by the Servicer under this Agreement, commencing
with
the first such report due in connection with the applicable Securitization
Transaction.
(g) The
Servicer shall provide to each originator of a Mortgage Loan (or if such
Mortgage Loan was not sold to Owner by the originator, the seller of such
Mortgage Loan) (the “Static
Pool Party”)
information with respect to each Mortgage Loan from and after the date
Servicer
commences servicing such Mortgage Loan necessary for such Static Pool Party
to
comply with its obligations under Regulation AB, including, without limitation,
providing to the Static Pool Party static pool information, as set forth
in Item
1105(a)(2) and (3) of Regulation AB.
(h) Promptly
following notice or discovery of a material error in the information provided
pursuant to the immediately preceding paragraph (including an omission
to
include therein information required to be provided pursuant to such paragraph),
the Servicer shall provide corrected static pool information to the Owner
in the
same format in which static pool information was previously provided to
such
party by the Servicer.
Section
12.04 Servicer
Compliance Statement.
On
or
before March 1 of each calendar year, commencing in 2007, the Servicer
shall
deliver to the Owner and any Depositor a statement of compliance addressed
to
the Owner and such Depositor and signed by an authorized officer of the
Servicer, to the effect that (i) a review of the Servicer’s activities during
the immediately preceding calendar year (or applicable portion thereof)
and of
its performance under this Agreement and any applicable Reconstitution
Agreement
during such period has been made under such officer’s supervision, and (ii) to
the best of such officers’ knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such obligation in any material respect, specifically identifying each
such
failure known to such officer and the nature and the status
thereof.
Section
12.05 Report
on Assessment of Compliance and Attestation.
(a) On
or
before March 1 of each calendar year, commencing in 2007, the Servicer
shall:
(i) deliver
to the Owner and any Depositor a report (in form and substance reasonably
satisfactory to the Owner and such Depositor) regarding the Servicer’s
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed
to
the Owner and such Depositor and signed by an authorized officer of the
Servicer, and shall address each of the Servicing Criteria specified on
a
certification substantially in the form of Exhibit 7 hereto delivered to
the Owner concurrently with the execution of this Agreement;
-49-
(ii) deliver
to the Owner and any Depositor a report of a registered public accounting
firm
reasonably acceptable to the Owner and such Depositor that attests to,
and
reports on, the assessment of compliance made by the Servicer and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities
Act and
the Exchange Act;
(iii) cause
each Subservicer, and each Subcontractor determined by the Company pursuant
to
Section 12.06(b) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, to deliver to the Owner and any
Depositor
an assessment of compliance and accountants’ attestation as and when provided in
paragraphs (a) and (b) of this Section; and
(iv) if
requested by the Owner or any Depositor not later than February 1 of the
calendar year in which such certification is to be delivered, deliver to
the
Owner, any Depositor and any other Person that will be responsible for
signing
the certification (a “Sarbanes
Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to
Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a certification in
the form
attached hereto as Exhibit 6.
The
Servicer acknowledges that the parties identified in clause (a)(iv) above
may
rely on the certification provided by the Servicer pursuant to such clause
in
signing a Sarbanes Certification and filing such with the Commission. Neither
the Owner nor any Depositor will request delivery of a certification under
clause (a)(iv) above, unless a Depositor is required under the Exchange
Act to
file an annual report on Form 10-K with respect to an issuing entity whose
asset
pool includes Mortgage Loans.
(b) Each
assessment of compliance provided by a Subservicer pursuant to Section
12.05(a)(i) shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit 7 hereto delivered to
the Owner concurrently with the execution of this Agreement or, in the
case of a
Subservicer subsequently appointed as such, on or prior to the date of
such
appointment. An assessment of compliance provided by a Subcontractor pursuant
to
Section 12.05(a)(iii) need not address any elements of the Servicing Criteria
other than those specified by the Servicer pursuant to Section
12.06.
Section
12.06 Use
of
Subservicers and Subcontractors.
The
Servicer shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Servicer as servicer under this Agreement
or any Reconstitution Agreement unless the Servicer complies with the provisions
of paragraph (a) of this Section. The Servicer shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Servicer as servicer under this Agreement or
any
Reconstitution Agreement unless the Servicer complies with the provisions
of
paragraph (b) of this Section.
-50-
(a) It
shall
not be necessary for the Servicer to seek the consent of the Owner or any
Depositor to the utilization of any Subservicer. The Servicer shall cause
any
Subservicer used by the Servicer (or by any Subservicer) for the benefit
of the
Owner and any Depositor to comply with the provisions of this Section and
with
Sections 12.02, 12.03(c) and (e), 12.04, 12.05 and 12.07 of this Agreement
to
the same extent as if such Subservicer were the Servicer, and to provide
the
information required with respect to such Subservicer under Section 12.03(d)
of
this Agreement. The Servicer shall be responsible for obtaining from each
Subservicer and delivering to the Owner and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under
Section
12.04, any assessment of compliance and attestation required to be delivered
by
such Subservicer under Section 12.05 and any certification required to
be
delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 12.05 as and when required to be
delivered.
(b) It
shall
not be necessary for the Servicer to seek the consent of the Owner or any
Depositor to the utilization of any Subcontractor. The Servicer shall promptly
upon request provide to the Owner and any Depositor (or any designee of
the
Depositor, such as a master servicer or administrator) a written description
(in
form and substance satisfactory to the Owner and such Depositor) of the
role and
function of each Subcontractor utilized by the Servicer or any Subservicer,
specifying (i) the identity of each such Subcontractor, (ii) which (if
any) of
such Subcontractors are “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
Servicing
Criteria will be addressed in assessments of compliance provided by each
Subcontractor identified pursuant to clause (ii) of this paragraph.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by
the
Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor
to comply with the provisions of Sections 12.05 and 12.07 of this Agreement
to
the same extent as if such Subcontractor were the Servicer. The Servicer
shall
be responsible for obtaining from each Subcontractor and delivering to
the Owner
and any Depositor any assessment of compliance and attestation required
to be
delivered by such Subcontractor under Section 12.05, in each case as and
when
required to be delivered.
Section
12.07 Indemnification;
Remedies.
(a) The
Servicer shall indemnify the Owner, each affiliate of the Owner, the Depositor
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); each Static Pool Party and the respective
present and former directors, members, 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:
-51-
(i) (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 under this Article XII by or on behalf of the Servicer, or
provided in written or electronic form under this Article XII by or on
behalf of any Subservicer or Subcontractor (collectively, the “Servicer
Information”),
or
(B) the omission or alleged omission to state in the Servicer Information
a
material fact required to be stated in the Servicer 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 Servicer Information and not to any other information
communicated in connection with a sale or purchase of securities, without
regard
to whether the Servicer Information or any portion thereof is presented
together
with or separately from such other information;
(ii) any
failure by the Servicer, any Subservicer or any Subcontractor to deliver
any
information, report, certification, accountants’ letter or other material when
and as required under this Article XII, including any failure by the
Servicer to identify pursuant to Section 12.06(b) any Subcontractor
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB; or
(iii) any
breach by the Servicer of a representation or warranty set forth in Section
12.02(a) or in a writing furnished pursuant to Section 12.02(b) and made
as of a
date prior to the closing date of the related Securitization Transaction,
to the
extent that such breach is not cured by such closing date, or any breach
by the
Servicer of a representation or warranty in a writing furnished pursuant
to
Section 12.02(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 Servicer shall promptly reimburse the Owner, 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 the Servicer, any Subservicer
or
any Subcontractor.
(b) (i) Any
failure by the Servicer, any Subservicer or any Subcontractor to deliver
any
information, report, certification, Static Pool Party static pool information,
accountants’ letter or other material when and as required under this
Article XII, or any breach by the Servicer of a representation or warranty
set forth in Section 12.02(a) or in a writing furnished pursuant to Section
12.02(g) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured
by such
closing date, or any breach by the Servicer of a representation or warranty
in a
writing furnished pursuant to Section 12.02(b) to the extent made as of
a date
subsequent to such closing date, shall, except as provided in clause (ii)
of
this paragraph, immediately and automatically, without notice or grace
period,
constitute an Event of Default with respect to the Servicer under this
Agreement
and any applicable Reconstitution Agreement, and shall entitle the Owner
or
Depositor, as applicable, in its sole discretion to terminate the rights
and
obligations of the Servicer as servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding anything
in
this Agreement or any applicable Reconstitution Agreement to the contrary)
of
any compensation to the Servicer; provided
that to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain
rights
or obligations following termination of the Servicer as servicer, such
provision
shall be given effect.
-52-
(ii) Any
failure by the Servicer, any Subservicer or any Subcontractor to deliver
any
information, report, certification or accountants’ letter when and as required
under Section 12.04 or 12.05, including (except as provided below) any
failure
by the Servicer to identify pursuant to Section 12.06(b) any Subcontractor
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, which continues unremedied for ten calendar days after the
date
on which such information, report, certification or accountants’ letter was
required to be delivered shall constitute an Event of Default with respect
to
the Servicer under this Agreement and any applicable Reconstitution Agreement,
and shall entitle the Owner or Depositor, as applicable, in its sole discretion
to terminate the rights and obligations of the Servicer as servicer under
this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any compensation
to the Servicer; provided
that to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain
rights
or obligations following termination of the Servicer as servicer, such
provision
shall be given effect.
Neither
the Owner nor any Depositor shall be entitled to terminate the rights and
obligations of the Servicer pursuant to this subparagraph (b)(ii) if a
failure
of the Servicer to identify a Subcontractor “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB was attributable
solely to the role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.
(iii) The
Servicer shall promptly reimburse the Owner (or any designee of the Owner,
such
as a master servicer) and any Depositor, as applicable, for all reasonable
expenses incurred by the Owner (or such designee) or such Depositor, as
such are
incurred, in connection with the termination of the Servicer as servicer
and the
transfer of servicing of the Mortgage Loans to a successor servicer. The
provisions of this paragraph shall not limit whatever rights the Owner
or any
Depositor may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in equity or
at law,
such as an action for damages, specific performance or injunctive
relief.
-53-
IN
WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the
date and year first above written.
XXXXXXX
XXXXX MORTGAGE COMPANY, a New York limited partnership
(the
Owner)
By: XXXXXXX
SACHS REAL ESTATE FUNDING CORP., a New York corporation, its General
Partner
By:
_______________________________
Name:
Title:
AVELO
MORTGAGE, L.L.C.
(the
Servicer)
By:
_______________________________
Name:
J.
Xxxxxx Xxxxxxx
Title:
President
SCHEDULE
1
Minimum
fields required for the Monthly Remittance Report:
(a) investor;
(b) pool;
(c) loan
number;
(d) inventory
loan number;
(e) contractual
due date;
(f) interest
rate;
(g) servicing
fee rate;
(h) servicing
payment;
(i) principal
and interest payment;
(j) beginning
principal balance;
(k) ending
principal balance;
(l) noncash
principal adjustments;
(m) noncash
interest adjustments;
(n) prepayment
penalties;
(o) remittance
amount;
(p) actual
principal payments (actual principal payments that the borrower made in
the
reporting period);
(q) actual
interest payments (actual interest payments that the borrower made in the
reporting period);
(r) principal
curtailments (principal curtailments applied to the loan in the reporting
period);
(s) payoff
date;
(t) borrower’s
name;
(u) escrow
balance;
Sch.
1-1
(v) corporate
balance;
(w) suspense
balance;
Sch.
1-2
SCHEDULE
2
MORTGAGE
LOAN DOCUMENTS
With
respect to each Mortgage Loan, the Mortgage Loan Documents shall include
each of
the following items:
(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 Custodian is so advised by the loan seller. If the
Mortgage Loan was acquired loan 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 loan seller cannot deliver or cause to be delivered
the
original Mortgage with evidence of recording thereon on or prior to the
related
Transfer 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, the loan 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 the
loan 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 the loan 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;
(e) except
with respect to each MERS Designated Mortgage Loan, the original Assignment
of
Mortgage for each Mortgage Loan, in form and substance acceptable for recording.
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 Owner as provided in this Agreement. If the Assignment
of
Mortgage is to be recorded, the Mortgage shall be assigned to the Owner.
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 the loan seller
in a
merger, the Assignment of Mortgage must be made by “[Servicer], successor by
merger to [name of predecessor].” If the Mortgage Loan was acquired or
originated by the loan seller while doing business under another name,
the
Assignment of Mortgage must be by “[Servicer], formerly known as [previous
name]”;
Sch.
2-1
(f) the
originals of all intervening assignments of mortgage (if any) evidencing
a
complete chain of assignment from the originator to the Last Endorsee (or
to
MERS with respect to each MERS Designated Mortgage Loan) 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,
the loan
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 officers certificate of the loan
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
loan 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; and
(h) security
agreement, chattel mortgage or equivalent document executed in connection
with
the Mortgage.
In
the
event an officer’s certificate of the loan seller is delivered to the Owner
because of a delay caused by the public recording office in returning any
recorded document, the loan seller shall deliver to the Owner, within 90
days of
the related Transfer 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. An extension of the
date
specified in (iv) above may be requested from the Owner, which consent
shall not be unreasonably withheld.
Sch.
2-2
SCHEDULE
3
CONTENTS
OF EACH MORTGAGE FILE
(a) Copies
of
each Mortgage Loan Document.
(b) The
original hazard insurance policy and, if required by law, flood insurance
policy.
(c) Residential
loan application.
(d) Mortgage
Loan closing statement.
(e) Verification
of employment and income (except for Mortgage Loans originated under a
Limited
Documentation Program).
(f) Verification
of acceptable evidence of source and amount of downpayment.
(g) Credit
report on the Mortgagor.
(h) Residential
appraisal report, if available.
(i) Photograph
of the Mortgaged Property.
(j) Survey
of
the Mortgaged Property, if any.
(k) Copy
of
each instrument necessary to complete identification of any exception set
forth
in the exception schedule in the title policy, i.e., map or plat, restrictions,
easements, sewer agreements, home association declarations, etc.
(l) All
required disclosure statements.
(m) If
available, termite report, structural engineer’s report, water potability and
septic certification.
(n) Sales
contract, if applicable.
(o) Tax
receipts, insurance premium receipts, ledger sheets, payment history from
date
of origination, insurance claim files, correspondence, current and historical
computerized data files, and all other processing, underwriting and closing
papers and records which are customarily contained in a mortgage loan file
and
which are required to document the Mortgage Loan or to service the Mortgage
Loan.
(p) Amortization
schedule, if applicable.
Sch.
3-1
EXHIBIT
1
FORM
OF
MONTHLY REMITTANCE ADVICE
Exh.
1-1
SCHEDULE
1 TO EXHIBIT 1
REPORTING
REQUIREMENTS
DATA
FILE
LAYOUT
|
Static
Information
|
|
|
|
|
Loan
Number
|
Loan
Number currently being used to service this loan.
|
123456789
|
|
|
Prior
Loan Number
|
Prior
Loan Number (if any). If servicing has transferred this should
contain the
Loan Number used by the previous servicer.
|
987654321
|
|
|
Custodian
File Number
|
Custodian
ID used to file documents. This can be the custodian’s only id or a
category used to arrange documents into proper pools.
|
1de457
|
|
|
Custodian
Loan
Number
|
Custodian
secondary ID used to file documents. Often this is used in conjunction
with Custodian File Number to uniquely identify loans.
|
365wer5
|
|
|
Owner
Loan Number
|
The
Loan number that Owner assigns to the loan
|
Leave
Blank
|
|
|
Origination
Date
|
Origination
Date shown on loan documents.
|
12/25/2004
|
|
|
Originator
|
The
name of the company that originated the loan
|
Xxxxx
Fargo
|
|
|
Origination
Source
|
Broker,
etc.
|
Broker
|
|
|
Loan
Purchase Date
|
The
date that Owner purchased the loan
|
11/25/2004
|
|
|
HOEPA
Status
|
Y\N
|
||
|
Type
of Ownership
|
like
fee simple, lease-hold
|
Lease-Hold
|
|
|
Documentation
Type
|
Full,
Alt, No Ration, None, XXXX,XXXX
|
Full
|
|
|
Income
Verification
Flag
|
Was
the Borrower’s income verified or stated
|
Y
|
|
|
Asset
Verification
|
Were
the Borrower’s Assets verified
|
Y
|
|
|
Employment
Verification
|
Was
the Borrower’s employment verified
|
Y
|
|
|
Flood
Insurance Indicator
|
Does
the property have flood insurance
|
Y
|
|
|
Min
MERS
|
MERS
Certificate Number
|
Y
|
|
|
Product
Type
|
Generic
category code used internally to describe loan type
|
6MO
|
|
|
Product
Description
|
Generic
category description
|
6
month arm - IO
|
|
|
Interest
Calculation Method
|
The
basis on which interest is calculated. ( arrears, 360, 365, advance,
etc)
|
30/360
|
|
|
Draw
Term
|
The
term that the borrower can draw from the line of credit stated
in
months
|
120
|
Exh.
1-2
|
FHA
Section of the Act
|
FHA
Section, if applicable
|
||
|
Balloon
Term
|
Number
of months to Balloon Date
|
180
|
|
|
IO
Term
|
Indicates
the term in months of the interest only period
|
24
|
|
|
IO
Flag
|
Indicates
if the loan is an interest only loan for a period of the
loan
|
Y
|
|
|
Section
32 Flag
|
Indicates
if the loan may violate predatory lending laws (Y/N)
|
Y
|
|
|
Convertible
Flag
|
Indicates
that the borrower is allowed to convert an ARM mortgage to a
Fixed Rate
mortgage
|
Y
|
|
|
Assumable
Flag
|
Indicates
if loan is assumable
|
Y
|
|
|
Balloon
Flag
|
Code/literal
to identify balloon loans. Example: Y, N.
|
Y
|
|
|
Buydown
Flag
|
Indicates
if the loan has a buydown option (Y/N)
|
Y
|
|
|
Daily
Simple Interest Flag
|
Flag
to identify loans where interest is due is calculated based on
the date
that each payment is actually received.
|
Y
|
|
|
Loan
Type
|
Code/literal
to identify the loan type. (Conventional [w/] PMI , Jumbo, FHA,
VA,
etc)
|
Conventional
- PMI
|
|
|
Property
Type
|
Code/literal
that identifies the type of property securing the loan. ( 2 Family,
PUD)
|
PUD
|
|
|
Property
Address
|
Property
address, not billing address.
|
000
Xxxxxxx Xxxx
|
|
|
Property
City
|
Property
city.
|
Toronto
|
|
|
Property
State
|
Property
state.
|
NY
|
|
|
Property
Zip
|
Property
zip.
|
10004
|
|
|
Condo/PUD
Project Name
|
Name
of the development.
|
Xxxxx
Xxxxxxx
|
|
|
Number
of Units
|
The
number of units for the property (1,2,3,4) ( should correspond
to the
property type)
|
2
|
|
|
Year-Built
|
Date
property was built
|
1978
|
|
|
Lien
Position
|
Number
used to identify the lien position in effect at the time of application.
Example: 1, 2, 3, O (other)
|
1
|
|
|
Occupancy
Type
|
Occupancy
status at time of application. (2nd home, owner occupied, vacant,
etc)
|
OO
|
|
|
Convertible
Term
|
The
specified period at which a borrower can choose to exercise convertible
rights
|
24
|
|
|
Conversion
Expiration Date
|
Expiration
date of conversion provisions
|
12/25/2006
|
|
|
Conversion
Fee
|
Fee
for converting loan from ARM to Fixed
|
Exh.
1-3
|
Conversion
Formula
|
|||
|
Convert
Lookback
|
The
period designated for lookback calculation stated in days.
|
45
|
|
|
Convert
Index
|
Index
used for the conversion
|
||
|
Convert
Lifetime Cap Down
|
|||
|
Convert
Lifetime Cap Up
|
|||
|
Convert
Margin
|
|||
|
Convert
Cap Down
|
|||
|
Convert
Cap Up
|
|||
|
Convert
Max PI CAP (Up)
|
|||
|
Convert
Max PI CAP (Down)
|
|||
|
PMI
Provider
|
Name
or code for company providing private mortgage insurance.
|
Radian
|
|
|
PMI
Coverage Percentage
|
Percentage
of insurance provided by PMI agreement.
|
12
|
|
|
PMI
Certificate ID
|
Unique
ID to identify PMI insurance certificate.
|
5829471
|
|
|
Lender
Paid Insurance Flag
|
Indicates
if Lender pays PMI Insurance
|
Y
|
|
|
Lender
Paid Insurance Fee
|
stated
in percent
|
0.25
|
|
|
Original
Balance
|
Original
amount of loan granted to borrower. In the case of construction
loans this
should be the full amount extended on which the monthly payments
are
based.
|
250000.00
|
|
|
Original
Senior Lien Amount
|
Amount
of senior lien outstanding when loan was originated.
|
0.00
|
|
|
Original
Junior Lien Amount
|
Amount
of junior liens outstanding when loan was originated
|
32000.00
|
|
|
Payment
Frequency
|
Monthly,
bi-weekly, etc.
|
monthly
|
|
|
Original
Scheduled P&I
|
Original
Scheduled Principal and Interest payment
|
564.12
|
|
|
Original
PITI
|
Original
Scheduled Principal, Interest, Tax and Insurance payment
|
725.12
|
|
|
First
Payment Date
|
This
is the contractual date when the first payment was to be made.
|
2/1/2005
|
|
|
Original
Maturity Date
|
This
is the contractual date when the last payment on the loan is
scheduled to
be made. For balloons it should be the balloon date.
|
1/1/2020
|
Xxx.
0-0
|
Xxxxxxxx
Xxxx
|
The
number of months from First Payment Date to Original Maturity
Date
inclusive.
|
180
|
|
|
Original
Amortization Term
|
Original
Amortization Term of the loan in number of months. For fully
amortizing
loans would be the same as Original Term. For balloon loans this
would
exceed Original Term. For IO loans this would have no
value.
|
360
|
|
|
Original
Interest Rate
|
Original
contractual interest rate for loan. ( provide all decimal
places)
|
8.515
|
|
|
Original
Loan To Value Ratio
|
Ratio
representing the Original Loan Balance to the Original Appraised
Value
|
75.69
|
|
|
Original
Combined Loan To Value Ratio
|
For
Junior liens, Ratio representing the sum of the Original Loan
Balance plus
Original Senior Lien Amount to the Original Appraised Value
|
85.23
|
|
|
Original
Appraised
Value
|
Appraised
value at time of application.
|
550562
|
|
|
Original
Appraisal Date
|
Date
of the original Appraisal
|
12/1/2004
|
|
|
Original
Appraisal Firm
|
Name
of the Appraisal firm
|
Union
Appraisals
|
|
|
Appraisal
Form Type
|
Form
1040 U, 2005
|
||
|
Appraisal
Review Type
|
Desk
Top, Drive By
|
||
|
Original
Purchase Price
|
Price
paid for home.
|
360000
|
|
|
Purchase
BPO
|
BPO
at the time of Purchase by Owner
|
580000
|
|
|
Purchase
BPO Date
|
Date
of the Purchase BPO
|
12/1/2004
|
|
|
Purpose
of Loan
|
Code/literal
used to identify the original purpose of the loan. ( case-out
refi, refi,
purchase, construction, etc)
|
Purchase
|
|
|
Cash-out
Amount
|
The
Amount that the borrower removed from the loan
|
10000
|
|
|
Prepayment
Flag
|
Code/Flag
to determine if loan was originated with a prepayment penalty.
(Y /
N)
|
Y
|
|
|
Prepayment
Penalty Type
|
Code/literal
to identify characteristics of penalty. Example: 6 MO INT ON
80% XXXX,
5/4/3/2/1, 3%.
|
6
Months Interest on 80%
|
|
|
Prepayment
Term
|
Original
number of months that penalty was imposed.
|
24
|
|
|
Arm
Index Description
|
Code/literal
used to identify the specific underlying index that adjustable
rate loans
will reset from. (6 Months Libor, 1 Yr CMT, etc)
|
6ML
|
|
|
Margin
|
The
spread above the index value that a new rate on adjustable rate
loans will
be set to; subject to caps and rounding. (stated in
percent)
|
3.65
|
|
|
ARM
Rounding Feature
|
Code/literal
used to identify the method to be used when computing new rate
on
adjustable rate loans. (stated in percent)
|
0.125
|
Exh.
1-5
|
Lookback
Days
|
The
actual number of days prior to the Next Rate Reset Date that
the
underlying index will be referenced for determining new rate
on adjustable
rate loans. Examples: 45, 30, 0.
|
45
|
|
|
First
Payment Reset
Date
|
The
first date that any payment reset was/is scheduled to occur.
Typically is
one month after First Rate Reset Date.
|
3/1/2007
|
|
|
First
Rate Reset Date
|
The
first date that any rate reset was/is scheduled to occur. Typically
is one
month prior to First Payment Reset Date.
|
2/1/2007
|
|
|
Initial
Rate Reset Period
|
Number
of payments to be made prior to the first rate reset. For a typical
5/1
ARM, this would contain the value 60.
|
60
|
|
|
Rate
Reset Period
|
Number
of payments to be made between rate changes following the initial
rate
reset period. For a typical 5/1 ARM this would contain the value
12.
|
12
|
|
|
Initial
Payment Reset Period
|
Number
of payments to be made prior to the first payment reset. For
a typical 5/1
ARM, this would contain the value 60. For non hybrid loans this
would
equal the Payment Reset Period.
|
60
|
|
|
Payment
Reset Period
|
Number
of payments to be made between payment changes following the
Initial
Payment Reset Period. For a typical 5/1 ARM this would contain
the value
12.
|
12
|
|
|
Initial
Rate Adjustment Cap
|
Maximum
rate change allowed on First Rate Reset Date.
|
3
|
|
|
First
Cap Adjustment Down
|
0
|
||
|
Rate
Adjustment Cap
|
Maximum
rate increase allowed subsequent to First Rate Reset Date.
|
1
|
|
|
Periodic
Floor
|
Maximum
rate decrease allowed subsequent to First Rate Reset Date.
|
0
|
|
|
Lifetime
Caps
|
The
maximum amount the rate is allowed to increase by over the life
of the
loan.
|
6
|
|
|
Lifetime
Floor
|
The
minimum amount the rate is allowed to increase by over the life
of the
loan.
|
0
|
|
|
Max
Rate
|
The
absolute maximum rate allowed for the loan.
|
11.65
|
|
|
Min
Rate
|
The
absolute minimum rate allowed for the loan.
|
3.65
|
|
|
Negative
Amortization Flag
|
Code/literal
to identify loans where negative amortization is allowed. Example:
Y=neg
am allowed, N=no neg am allowed.
|
Y
|
|
|
Negam
Percent Cap
|
Maximum
percentage of original balance that a loan may negatively amortize
by.
(25%, etc.)
|
25
|
Exh.
1-6
|
Payment
Cap
|
Periodic
Cap for monthly principal & interest payment increase. Example
7.5%.
|
6.5
|
|
|
Original
FICO score
|
Credit
bureau score obtained at application.
|
654
|
|
|
Credit
Score Company
|
Experian
|
||
|
Original
Credit Grade
|
B+
|
||
|
Front
Debt To Income Ratio
|
Front
End Ratio at time of application. Mortgage debt to borrower
income.
|
56.23
|
|
|
Debt
To Income Ratio
|
Back
End Ratio at time of application. Total debt to borrower
income.
|
68.25
|
|
|
Scheduled
Due Date
|
Scheduled
payment date sold to security
|
2/1/2005
|
|
|
Borrower
Name Last Name
|
Borrower’s
Last Name
|
Xxx
|
|
|
Borrower
Name First Name
|
Borrower’s
First Name
|
Xxx
|
|
|
CoBorrower
Name Last Name
|
Co-Borrower’s
Last Name
|
Xxx
|
|
|
CoBorrower
Name First Name
|
Co-Borrower’s
First Name
|
Xxxx
|
|
|
Borrower
Social
Security
Number/TIN
|
Eleven
character ID. Example: 000-00-0000.
|
000-00-0000
|
|
|
CoBorrower
Social Security Number/TIN
|
Eleven
character ID. Example: 000-00-0000.
|
000-00-0000
|
|
|
Self
Employment Flag
|
Y
|
||
|
Borrower
Age
|
52
|
||
|
Co-Age
|
56
|
||
|
Borrower
Race
|
|||
|
Co-Race
|
|||
|
Borrower
Gender
|
Male
|
||
|
Co-Gender
|
Female
|
||
|
Income
|
182564
|
||
|
Co-Income
|
256453
|
||
|
Co_credit
Score
|
841
|
||
|
Borrower
Ethnicity
|
|||
|
Co-Ethnicity
|
|||
|
First
Time Borrower Flag
|
N
|
Exh.
1-7
|
Monthly
Updated Information
|
|
|
|
|
Investor
Number
|
This
is the servicer assigned number for reporting purposes.
|
691
|
|
|
Investor
Category
|
This
is the servicer assigned category for reporting purposes.
|
2
|
|
|
Servicing
Type
|
Indicates
whether the loan is serviced on an actual or scheduled basis.
(act/act,act/sched,sched/act,sched/sched)
|
(sched/sched)
|
|
|
Senior
Lien Amount
|
Most
recently recorded senior lien amount.
|
0
|
|
|
Current
Maturity Date
|
This
is the actual date when the last payment on the loan is scheduled
to be
made. For balloons it should be the balloon date. For modified
loans it
should be the modified maturity date.
|
1/1/2020
|
|
|
Current
Principal & Interest Payment
|
Principal
& Interest in effect for currently outstanding
payment.
|
562.41
|
|
|
Current
Interest Rate
|
Interest
Rate in effect for currently outstanding payment.
|
8.55
|
|
|
Current
Net Interest
Rate
|
The
current rate exclusive of LPMI, servicing and other fees.
|
7.55
|
|
|
Current
Rate Expenses
|
Current
Rate Expenses ( LPMI and Servicing Fee Excluded)
|
0
|
|
|
Remaining
Term
|
The
Remaining Term of the loan
|
179
|
|
|
Next
Due Date
|
Date
next payment is due.
|
2/1/2005
|
|
|
Interest
Paid To Date
|
Date
interest is paid to. Typically for 30/360 loans it is one month
prior to
Next Due Date.
|
1/1/2005
|
|
|
Last
Payment Date
|
Date
last payment was made.
|
1/1/2005
|
|
|
Days
Past Due
|
Number
of days loan is past due.
|
0
|
|
|
Delinquency
Convention
|
Indicates
if ABS or MBS method for reporting delinquencies is used.
|
MBS
|
|
|
Status
of Loan
|
Code/literal
used to identify loan status. See Enumerations worksheet.
|
Foreclosure
|
|
|
12
Month Pay String
|
12
character string representing the timing of payments received
on a rolling
12 month basis. String should begin with January and end with
December.
|
||
|
As
of Date
|
As
of Date of data being provided
|
||
|
Next
Payment Reset
Date
|
The
next date that any payment reset is scheduled to occur. Typically
is one
month after Next Rate Reset Date.
|
||
|
Next
Rate Reset Date
|
The
next date that any rate reset is scheduled to occur. Typically
is one
month prior to Next Payment Reset Date.
|
||
|
Last
Modification Date
|
Date
that loan was last modified.
|
||
|
Last
Extension Date
|
Date
loan term was last extended.
|
||
|
Times
Extended
|
|||
|
Total
Extension
Months
|
Number
of months loan has been extended in total.
|
Xxx.
0-0
|
Xxxxxxxxxxx
Xxxxxx - X00
|
0
|
||
|
Xxxxxxxxxxx
Xxxxxx - T60
|
1
|
||
|
Delinquency
Status - T90
|
0
|
||
|
Delinquency
Status - T120
|
0
|
||
|
Restructured
Interest
|
Total
amount of restructured interest (modified loans)
|
||
|
Recent
Property Valuation
|
Most
recent appraised value or BPO value.
|
||
|
Recent
Property Valuation Date
|
Date
of most recent valuation.
|
||
|
Valuation
Method
|
Identify
method used to obtain new valuation. See Enumerations
worksheet.
|
||
|
Valuation
Firm
|
Name
of the Firm who appraised the property
|
||
|
Current
FICO
|
Current
FICO score.
|
||
|
FICO
Date
|
FICO
Date.
|
||
|
ARM
Flag
|
A
‘Y’ or ‘N’ to indicate if a loan is an Adjustable rate
mortgage
|
Y
|
|
|
Servicing
Information
|
|
|
|
|
Amortization
Term
|
The
remaining amortization term, in months
|
||
|
Forbearance
Payment
|
Amount
of payment under Forbearance plan
|
||
|
Servicing
Fee
|
The
fee rate to service the loan
|
||
|
Servicing
Fee Payment
|
The
actual service fee for the loan for the given month
|
||
|
Interest
Adjustment
|
Adjustments
made to a previous month’s interest
|
||
|
Principal
Adjustment
|
Adjustments
made to a previous month’s principal
|
||
|
Total
Monthly Payment Principal
|
Cash
applied to principal.
|
||
|
Total
Monthly Payment Interest
|
Cash
applied to interest.
|
||
|
Total
Monthly Payment Penalties / Fees
|
Cash
applied to fees.
|
||
|
Total
Monthly Escrow Payment
|
Cash
applied to escrow account.
|
||
|
Total
Monthly Prepayment Amount
|
Total
amount borrower prepaid
|
||
|
Total
Prepayment Penalties
|
Prepayment
Penalty collected this month
|
||
|
Total
Monthly Payment
|
Total
cash received from borrower.
|
Exh.
1-9
|
Total
Remit Amount
|
Total
amount remitted for the individual loan
|
||
|
Current
PITI
|
Current
scheduled Principal, Interest, Tax and Insurance payment
|
||
|
Monthly
Escrow Advances
|
Net
escrow advances made or recovered by servicer. Positive value
denotes
payments made by servicer.
|
||
|
Monthly
Corporate Advances
|
Net
corporate advances made or recovered by servicer. Positive value
denotes
payments made by servicer.
|
||
|
Principal
Advance Balance
|
Total
outstanding principal advances made by servicer.
|
||
|
Interest
Advance Balance
|
Total
outstanding interest advances made by servicer.
|
||
|
Monthly
Principal Advances
|
Amount
of principal advanced in current month
|
||
|
Monthly
Interest Advances
|
Amount
of interest advanced in current month
|
||
|
Beginning
Actual Balance
|
Actual
balance at the beginning of the period. The is most likely last
periods
ending balance carried forward
|
||
|
Current
Principal
Balance
|
Ending
actual principal balance outstanding
|
||
|
Current
Balance Net Present Value
|
The
net present value of the current balance
|
||
|
Beginning
Scheduled Balance
|
Beginning
scheduled loan balance. If the loan is serviced on a scheduled
balance
basis
|
||
|
Ending
Scheduled Balance
|
Ending
scheduled loan balance. If the loan is serviced on a scheduled
balance
basis
|
||
|
Escrow
Balance
|
Current
balance of escrow account (borrower’s positive funds).
|
||
|
Escrow
Advance Balance
|
Total
outstanding escrow advance balance.
|
||
|
Recoverable
Corporate Advance Balance
|
Corporate
advance balance where a + denotes a payment made by the
servicer
|
||
|
Non
Recoverable Corporate Advance Balance
|
Balance
of Corporate Advances made that are not recoverable from the
borrower
|
||
|
Total
Corporate Advance Balance
|
Total
outstanding Corporate Advance Balance
|
||
|
Suspense
Account Balance
|
Total
suspense account balance
|
||
|
Accrued
Interest
|
Total
Accrued Interest on loan.
|
||
|
Stop
Advance Flag
|
Code
indicating loan has been placed in a stop advance status. Example:
Y=Stop
Advance.
|
Exh.
1-10
|
Stop
Advance Recovered
|
Amount
of principal and interest advances recovered at stop date.
|
||
|
Stop
Advance Start
Date
|
Date
loan was initially placed on a stop advance status.
|
||
|
Stop
Advance Reversal Date
|
Date
stop advance status was reversed.
|
||
|
Stop
Advance Reversal Amount
|
Amount
of advances reversed.
|
||
|
Rent
Collection
|
|||
|
PI
Constant
|
The
Constant Principal and Interest rate the borrower would pay based
on their
schedule
|
||
|
Combined
Loan to
Value
Ratio
|
|||
|
Current
Loan to Value Ratio
|
|||
|
Forced
Placed Insurance Flag
|
Code
indicating loan is on forced placed insurance.
|
||
|
Annual
Forced Placed Insurance
|
Amount
of forced placed policy.
|
||
|
Last
Contact Date
|
Date
of Servicer’s last contact with the borrower.
|
||
|
Last
Attempt Date
|
Date
of the Servicer’s last attempt to contact the borrower.
|
||
|
Bankruptcy
Flag
|
Flag
indicating loan is in bankruptcy.
|
||
|
Bankruptcy
Chapter
|
Chapter
of bankruptcy (7, 11, 12, 13, OTH).
|
||
|
Bankruptcy
Start Date
|
Bankruptcy
filing date.
|
||
|
Bankruptcy
End Date
|
Dismissal/Discharge
date.
|
||
|
Bankruptcy
Post
Petition
Due Date
|
Payment
due date of Bankruptcy payment plan. In essence the new due
date.
|
||
|
Motion
for Relief Request Date
|
Motion
for Relief Request Date.
|
||
|
Motion
for Relief Filing Date
|
0
|
||
|
Motion
for Relief Hearing Date
|
Motion
for Relief Hearing Date.
|
||
|
Motion
for Relief Granted Date
|
Motion
for Relief Granted Date.
|
||
|
Motion
for Relief Denied Date
|
Date
the motion was Denied (if applicable)
|
||
|
In
Demand Flag
|
Code
indicating demand letter has been sent.
|
||
|
In
Demand Start Date
|
Date
demand letter was sent.
|
Exh.
1-11
|
In
Demand End Date
|
Expiration
of demand letter.
|
||
|
Foreclosure
Estimated End Date
|
On
loans that are in Foreclosure the Servicers estimate of when
the FCL will
be completed.
|
||
|
Foreclosure
Sale Date
|
Date
of actual foreclosure sale.
|
||
|
Foreclosure
Start Date
|
Date
of Referral to FC Attorney
|
||
|
Foreclosure
end date
|
Date
of recording of foreclosure deed.
|
||
|
First
Legal Date
|
Date
of first legal action taken on foreclosure.
|
||
|
Foreclosure
Resolution Flag
|
Indicates
if the loan has moved out of foreclosure (i.e.
Did not go to REO).
|
||
|
Foreclosure
Resolution Type
|
Method
used by the servicer to prevent the foreclosed loan from moving
into REO.
See Enumerations worksheet.
|
||
|
Foreclosure
On Hold
|
Flag
indicating that the loan is in foreclosure but on hold.
|
||
|
Foreclosure
Hold Start Date
|
Date
indicating when the loan’s foreclosure proceedings were put on
hold.
|
||
|
Bankruptcy
Cash Delays
|
Number
of days an active foreclosure has been in BK subsequent to its
initial
foreclosure start date.
|
||
|
Forbearance
Cash Delays
|
Number
of days an active foreclosure has been in forbearance subsequent
to its
initial foreclosure start date.
|
||
|
Forbearance
Flag
|
Y/N
|
||
|
Non
- Cash Delays
|
Number
of allowable days that a loan’s foreclosure proceedings have been on hold
due to a non cash delay (i.e.
Title problem…) [again as per Fannie or Xxxxxxx time line]
|
||
|
Forbearance
Start Date
|
Date
forbearance plan was initiated.
|
||
|
Forbearance
End Date
|
Date
forbearance plan scheduled to be complete.
|
||
|
Eviction
Start Date
|
Date
eviction flag placed on loan.
|
||
|
Eviction
End Date
|
Date
property is vacated.
|
||
|
REO
Start Date
|
Date
REO flag placed on loan (including any redemption
periods).
|
||
|
REO
End Date
|
Date
property is sold.
|
||
|
REO
Sub Status
|
Status
while within REO. See Enumerations worksheet.
|
||
|
Not
Acquired Date
|
Date
that the REO enters “Not Acquired” sub status
|
||
|
Eviction
Date
|
Date
that the REO enters “Eviction” sub status
|
||
|
Listed
Date
|
Date
that the REO enters “Listed” sub status
|
||
|
Under
Contract Date
|
Date
that the REO enters “Under Contract” sub status
|
||
|
Estimated
Closing Date
|
Servicer
estimated closing date on loan
|
||
|
Days
In REO
|
Number
of Days from the REO becomes marketable to the As of Date
|
Exh.
1-12
|
Estimated
Sales Price
|
Servicer
estimated REO Sales Price
|
||
|
Possession
Date
|
Date
when the servicer takes possession of the property. Date we have
full
access to the property, eviction completed
|
||
|
Redemption
End Date
|
Legal
time period, determined by State, when borrower can redeem their
property.
Property not available for sale until redemption completed (no
beginning
date, just an end date)
|
||
|
Initial
Listing Price
|
First
listing price of property.
|
||
|
Initial
Listing Date
|
Date
of the first listing price of property
|
||
|
Current
List Price
|
Most
recent listing price of property.
|
||
|
Current
List Date
|
Date
of the most recent listing price of property.
|
||
|
Reason
For Default
|
Servicer
Code representing the Reason for Default. See Enumerations
worksheet.
|
||
|
Foreclosure
Indicator Flag
|
|||
|
Termination
Information
|
|
|
|
|
Net
Interest at termination
|
Ending
accrued net interest outstanding before the loan was
liquidated/terminated
|
||
|
Gross
Interest at termination
|
Ending
accrued gross interest outstanding before the loan was
liquidated/terminated
|
||
|
Balance
at Termination
|
Actual
Principal balance at time of termination.
|
||
|
Gross
Total Proceeds
|
Gross
Total Proceeds.
|
||
|
Net
Total Proceeds
|
Gross
total proceeds less expenses.
|
||
|
Principal
Advanced
|
Total
of principal advanced at time of liquidation.
|
||
|
Interest
Advanced
|
Total
of interest advanced at time of liquidation.
|
||
|
Deferred
Interest
|
Amount
of deferred interest on the loan @ liquidation
|
||
|
Accrued
Servicing Fee Recovered
|
Servicing
fee recovered at time of liquidation.
|
||
|
Corporate
Advances Recovered at Termination
|
The
amount of the Total Corporate Advance balance recovered at
termination
|
||
|
Escrow
Advances Recovered at Termination
|
The
amount of the Total Escrow Advance balance recovered at
termination
|
||
|
Commission
|
The
broker commission amount on liquidation
|
||
|
Seller
Concession
|
The
dollar amt of seller concessions upon liquidation.
|
||
|
Taxes
|
Taxes
paid on liquidation
|
||
|
Repairs
|
Cost
of Repairs to property
|
Exh.
1-13
|
Water
and Sewer
|
Water
& Sewer costs
|
||
|
Expenses
Recovered at Termination
|
The
amount of the Total Expenses recovered at termination
|
||
|
Corporate
Advances at Termination
|
Corporate
advance balance at time of liquidation.
|
||
|
Escrow
Advances at Termination
|
Escrow
advance balance at time of liquidation.
|
||
|
Charge-off
amount
|
Loss
amount.
|
||
|
Severity
|
Severity
percentage.
|
||
|
Severity
Formula
|
Formula
for calculating Severity percentage.
|
||
|
Potential
Deficiency Judgment Flag
|
Flag
indicating loan is referred for deficiency collections.
|
||
|
Potential
Deficiency Amount
|
Deficiency
balance reported to borrower/IRS.
|
||
|
Deficiency
Proceeds (this period)
|
Deficiency
proceeds collected in current month.
|
||
|
Deficiency
Proceeds Total (to date)
|
Deficiency
proceeds collected to date.
|
||
|
Deficiency
Vendor Expense
|
Deficiency
vendor out of pocket expenses.
|
||
|
Deficiency
Servicer Expense
|
Deficiency
vendor collection fee
|
||
|
Servicer
Hold Back Amount
|
Amount
servicer withholds for future trailing expenses.
|
||
|
Days
from Acquisition to Close
|
Days
from Acquisition to Close
|
||
|
Days
from Possession
to
Close
|
Days
from Possession to Close
|
||
|
Property
Sale Date
|
Date
property sold.
|
||
|
Termination
Type
|
Type
of liquidation. See Enumerations worksheet.
|
||
|
Scheduled
Sale Date
|
Dates
of planned sales for properties in Foreclosure
|
||
|
Property
Sales Price
|
Sales
price if liquidation was short sale or REO sale.
|
||
|
Liquidation
Date
|
Date
property liquidated.
|
||
|
Hazard
Insurance Claim Date
|
Date
hazard claim filed.
|
||
|
Hazard
Insurance Claim Due Date
|
Date
hazard claim due.
|
||
|
Hazard
Insurance Claim Amount
|
Amount
of hazard claim.
|
Exh.
1-14
|
Hazard
Insurance
Claim
Paid Amount
|
Amount
of hazard claim paid to investor.
|
||
|
MI
Insurance Claim
Date
|
Date
MI claim filed.
|
||
|
MI
Insurance Claim
Due
Date
|
Date
MI claim is due to be paid.
|
||
|
MI
Insurance Claim Amount
|
Expected
MI proceeds.
|
||
|
MI
Insurance Claim
Paid
Amount
|
Actual
MI proceeds received.
|
||
|
306
|
|||
|
Amortization
Type
|
|
|
BN10
|
Balloon,
10 Year
|
|
BN5
|
Balloon,
5 Year
|
|
BN7
|
Balloon,
7 Year
|
|
FIX
|
Fixed
|
|
FX10
|
Fixed
- 10 Year
|
|
FX15
|
Fixed,
15 Year
|
|
FX5
|
Fixed
- 5 Year
|
|
FXST
|
Fixed
- Short Term
|
|
H101
|
Hybrid,
10/1
|
|
H106
|
Hybrid,
10/6 month
|
|
H21
|
Hybrid,
2 Year
|
|
H228
|
Hybrid
2/28
|
|
H31
|
Hybrid,
3/1
|
|
H327
|
Hybrid
3/27
|
|
H51
|
Hybrid,
5/1
|
|
H71
|
Hybrid,
7/1
|
|
OTH
|
Other
|
|
STEP
|
Step
Coupon
|
Exh.
1-15
|
ARM
Index Description
|
|
|
10YC
|
10
Year CMT
|
|
1ML
|
1
Month Libor
|
|
1YC
|
1
Year CMT
|
|
1YL
|
1
Year Libor
|
|
2ML
|
2
Month Libor
|
|
2YC
|
2
Year CMT
|
|
3ML
|
3
Month Libor
|
|
3MT
|
3
Month TBill
|
|
3YC
|
3
Year CMT
|
|
5YC
|
5
Year CMT
|
|
6MCD
|
6
Month CD
|
|
6ML
|
6
Month Libor
|
|
6MT
|
6
Month TBill
|
|
COFI
|
COFI
|
|
FHLM
|
FHLMC
Commitment Rate
|
|
FNMA
|
FNMA
Commitment Rate
|
|
OTH
|
Other
Rate
|
|
PRI
|
PRIME
|
|
ARM
Rounding Feature
|
|
|
DEC3
|
Nearest
1000th
|
|
H8
|
Higher
Xxxxxx
|
|
X0
|
Xxxxxxx
Xxxxxx
|
|
XXXX
|
Xxxx
|
Xxx.
1-16
|
Interest
Calculation Method
|
|
|
3360
|
30/360
|
|
A360
|
Actual/360
|
|
A365
|
Actual/365
|
|
AA
|
Actual/Actual
|
|
Loan
Type
|
|
|
COMI
|
Conventional,
with mi. Collecting a premium from the borrower for mortgage
insurance and
is FHA and is VA
|
|
CONV
|
Conventional,
no mi
|
|
FHA
|
FHA
Mortgage
|
|
HEL
|
Home
Equity Line of credit
|
|
CC
|
Credit
Card
|
|
A
|
Auto
|
|
B
|
Boats
|
|
RV
|
RV’s
|
|
MFG
|
Manufactured
Housing
|
|
ATV
|
ATV
|
|
VA
|
VA
Mortgage
|
|
OTH
|
Other
|
|
Occupancy
Type
|
|
|
2ND
|
2nd
Home
|
|
NOO
|
Non
Owner Occupied
|
|
OO
|
Owner
Occupied
|
|
VA
|
Vacant
|
|
Property
Type
|
|
|
2F
|
2
Family
|
|
3F
|
3
Family
|
Exh.
1-17
|
4F
|
4
Family
|
|
2-4F
|
2-4
Family
|
|
AUTO
|
Automobile
|
|
BOAT
|
Boat
|
|
COND
|
Condominium
|
|
COOP
|
Cooperative
|
|
HR-CONDO
|
High
Rise Condo
|
|
HVAC
|
HVAC
|
|
MF
|
Multi
Family
|
|
MH
|
Manufactured
Housing
|
|
MX
|
Mixed
Use
|
|
OF
|
Office
|
|
OTH
|
Other
|
|
PUDA
|
PUD
- Attached
|
|
PUDD
|
PUD
- Detached
|
|
PWR
|
PowerSports
|
|
RT
|
Retail
|
|
RV
|
Recreational
Vehicle
|
|
SF
|
Single
Family
|
|
TH
|
TownHouse
|
|
Purpose
of Loan
|
|
|
PUR
|
Purchase
|
|
RELO
|
Relocation
|
|
REFI
|
Rate/Term
Refinance
|
|
CASH
|
Cash
Out Refinance
|
|
DEBT
|
Cash
Out Debt Consolidation
|
|
IMPR
|
Cash
Out Home Improvement
|
|
EDUC
|
Cash
Out Medical or Educational Expense
|
|
TIT1
|
Title
One Home Improvement
|
|
CONST
|
New
Construction
|
|
REO
|
Facilitate
REO
|
Exh.
1-18
|
Status
of Loan
|
|
|
BU
|
Bankrupt
- Unknown Status
|
|
C
|
Current
|
|
DISP
|
Dispute
|
|
F
|
Foreclosure
|
|
NE
|
Non
Equity (NPV of current balance < $7,500)
|
|
FB
|
Forbearance
|
|
ID
|
In
Demand
|
|
LIT
|
Litigation
|
|
NLS
|
No
Longer Serviced
|
|
PO
|
Paid
Off- Borrower paid down entire balance
|
|
REO
|
Real
Estate Owned - MUST Include a REO
sub status
|
|
RSLD
|
Resolved
|
|
LIQ
|
Liquidated
- MUST include a Termination
Type
|
|
U
|
Unknown
|
|
Termination
Type
|
|
|
CO
|
Charge
Off
|
|
COC
|
Charge
Off with cash possible
|
|
NLPO
|
Negotiated
Loan Payoff
|
|
NS
|
Negotiated
Sale
|
|
PO
|
Paid
Off
|
|
PPOC
|
PPO
with More Cash Possible
|
|
REOS
|
REO
Sale
|
|
TPPO
|
Third
Party Paid Off
|
Exh.
1-19
|
Valuation
Method
|
|
|
DB
|
Drive
By
|
|
WT
|
Walk
Through
|
|
OTH
|
Other
|
|
APPR
|
Appraisal
|
|
DD
|
Due
Diligence
|
|
PRFC
|
Pre
Foreclosure
|
|
SUPP
|
Supplemental
|
|
RR
|
Re-review
|
|
REO
Sub Status
|
|
|
AC
|
Acquired
|
|
PS
|
Possession
|
|
EV
|
Eviction
|
|
LS
|
Listed
|
|
UC
|
Under
Contract
|
|
Reason
For Default
|
|
|
ABP
|
Abandonment
of Property
|
|
BF
|
Business
Failure
|
|
CI
|
Curtailment
Of Income
|
|
D
|
Death
|
|
EO
|
Excessive
Obligations
|
|
ILL
|
Illness
|
|
ITR
|
Inability
To Rent
|
|
MD
|
Marital
Difficulties
|
|
MS
|
Military
Service
|
|
MI
|
Mortgagor
Incarcerated
|
|
N
|
No
Reason
|
|
PD
|
Payment
Dispute
|
|
PP
|
Property
Problem
|
|
SP
|
Servicing
Problems
|
Exh.
1-20
|
TOP
|
Transfer
Of Ownership Pen
|
|
UC
|
Unable
To Contact
|
|
UEMP
|
Unemployment
|
Exh.
1-21
FORM
OF
CUSTODIAL ACCOUNT CERTIFICATION
_______
__, 200[_]
[___________]
hereby certifies that it has established the account described below as
a
Custodial Account pursuant to Section 2.04 of the Flow Servicing Agreement,
dated as of January 1, 2006.
Title of
Account: “Avelo
Mortgage, L.L.C., in trust for [insert name of Owner], Residential Fixed
and
Adjustable Rate Mortgage Loans, and various Mortgagors.”
Account
Number: __________________
Address
of office or branch
of
the
Servicer at
which
Account is maintained:
Avelo
Mortgage, L.L.C.,
Servicer
By:
_______________________
Name:
Title:
Exh.
2-1
EXHIBIT
3
FORM
OF
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______
__, 200[_]
To:
___________________________
___________________________
___________________________
(the
“Depository”)
As
Servicer under the Flow Servicing Agreement, dated as of January 1, 2006
(the “Agreement”),
we
hereby authorize and request you to establish an account, as a Custodial
Account
pursuant to Section 2.04 of the Agreement, to be designated as “Avelo
Mortgage, L.L.C., in trust for [insert name of Owner], Residential Fixed
and
Adjustable Rate Mortgage Loans, and various Mortgagors.” All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Servicer. You may refuse any deposit which would result in violation of
the
requirement that the account be fully insured as described below. This
letter is
submitted to you in duplicate. Please execute and return one original to
us.
Avelo
Mortgage, L.L.C.,
Servicer
By:
________________________
Name:
Title:
Date:
Exh.
3-1
The
undersigned, as Depository, hereby certifies that the above described account
has been established under Account Number __________, at the office of
the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account will
be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund (“BIF”)
or the
Savings Association Insurance Fund (“SAIF”).
The
parties hereto intend that the Custodial Account established hereby shall
be a
Special Deposit Account. This letter shall be construed in accordance with
the
laws of the State of New York.
___________________________
Depository
By:
____________________________
Name:
Title:
Date:
Exh.
3-2
EXHIBIT
4
FORM
OF
ESCROW ACCOUNT CERTIFICATION
_________
___, 200[_]
[_____________]
hereby certifies that it has established the account described below as
an
Escrow Account pursuant to Section 2.06 of the Flow Servicing Agreement,
dated as of January 1, 2006.
Title of
Account: “Avelo Mortgage, L.L.C., in trust for [insert name of Owner]
Residential Fixed and Adjustable Rate Mortgage Loans, and various
Mortgagors.”
Account
Number: __________________
Address
of office or branch
of
the
Servicer at
which
Account is maintained:
Avelo
Mortgage, L.L.C.,
Servicer
By:
________________________
Name:
Title:
Date:
Exh.
4-1
EXHIBIT
5
FORM
OF
ESCROW ACCOUNT LETTER AGREEMENT
_______
__, 200[_]
To:
_______________________
_______________________
_______________________
(the
“Depository”)
As
Servicer under the Flow Servicing Agreement, dated as of January 1, 2006
(the
“Agreement”),
we
hereby authorize and request you to establish an account, as an Escrow
Account
pursuant to Section 2.06 of the Agreement, to be designated as “Avelo
Mortgage, L.L.C., in trust for [insert name of Owner] Residential Fixed
and
Adjustable Rate Mortgage Loans, and various Mortgagors.” All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Servicer. You may refuse any deposit which would result in violation of
the
requirement that the account be fully insured as described below. This
letter is
submitted to you in duplicate. Please execute and return one original to
us.
Avelo
Mortgage, L.L.C.,
Servicer
By:
_______________________
Name:
Title:
Date:
Exh.
5-1
The
undersigned, as Depository, hereby certifies that the above described account
has been established under Account Number [______], at the office of the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account will
be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund (“BIF”)
or the
Savings Association Insurance Fund (“SAIF”).
The
parties hereto intend that the Escrow Account established hereby shall
be a
Special Deposit Account. This letter shall be construed in accordance with
the
laws of the State of New York.
___________________________
Depository
By:
_____________________________
Name:
Title:
Date:
Exh.
5-2
EXHIBIT
6
FORM
OF
ANNUAL CERTIFICATION
|
Re:
|
The
[ ] agreement dated as of [ ], 200[ ] (the “Agreement”),
among [IDENTIFY PARTIES]
|
I,
________________________________, the _______________________ of [NAME
OF
COMPANY] (the “Company”),
certify to [the Owner], [the Depositor], and the [Master Servicer] [Securities
Administrator] [Trustee], and their officers, with the knowledge and intent
that
they will rely upon this certification, that:
(1) I
have
reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance
Statement”),
the
report on assessment of the Company’s compliance with the servicing criteria set
forth in Item 1122(d) of Regulation AB (the “Servicing
Criteria”),
provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the “Exchange
Act”)
and
Item 1122 of Regulation AB (the “Servicing
Assessment”),
the
registered public accounting firm’s attestation report provided in accordance
with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b)
of
Regulation AB (the “Attestation
Report”),
and
all servicing reports, officer’s certificates and other information relating to
the servicing of the Mortgage Loans by the Company during 200[ ] that were
delivered by the Company to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
“Company
Servicing Information”);
(2) Based
on
my knowledge, the Company Servicing Information, taken as a whole, does
not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances
under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
(3) Based
on
my knowledge, all of the Company Servicing Information required to be provided
by the Company under the Agreement has been provided to the [Depositor]
[Master
Servicer] [Securities Administrator] [Trustee];
(4) I
am
responsible for reviewing the activities performed by the Company as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed
in the
Compliance Statement, the Servicing Assessment or the Attestation Report,
the
Company has fulfilled its obligations under the Agreement in all material
respects; and
Exh.
6-1
(5) The
Compliance Statement required to be delivered by the Company pursuant to
the
Agreement, and the Servicing Assessment and Attestation Report required
to be
provided by the Company and by any Subservicer or Subcontractor pursuant
to the
Agreement, have been provided to the [Depositor] [Master Servicer]. Any
material
instances of noncompliance described in such reports have been disclosed
to the
[Depositor] [Master Servicer]. Any material instance of noncompliance with
the
Servicing Criteria has been disclosed in such reports.
Date:
_________________________
By:
___________________________
Name:
Title:
Xxx.
0-0
XXXXXXX
0
XXXXXXXXX
XXXXXXXX TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the Servicer] [Subservicer]
shall
address, at a minimum, the criteria identified as below as “Applicable Servicing
Criteria”:
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
Reference
|
Criteria
|
|
|
General
Servicing Considerations
|
||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
Ö
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
Ö
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on
the party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
Ö
|
|
Cash
Collection and Administration
|
||
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial
bank
accounts and related bank clearing accounts no more than two
business days
following receipt, or such other number of days specified in
the
transaction agreements.
|
Ö
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
Ö
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are
made,
reviewed and approved as specified in the transaction
agreements.
|
Ö
|
Exh.
7-1
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are
separately
maintained (e.g., with respect to commingling of cash) as set
forth in the
transaction agreements.
|
Ö
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities
Exchange
Act.
|
Ö
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized
access.
|
Ö
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank
clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling
items. These
reconciling items are resolved within 90 calendar days of their
original
identification, or such other number of days specified in the
transaction
agreements.
|
Ö
|
|
Investor
Remittances and Reporting
|
||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and
applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the
terms specified in the transaction agreements; (C) are filed
with the
Commission as required by its rules and regulations; and (D)
agree with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
|
Ö
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
Ö
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
Ö
|
Exh.
7-2
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
|
Ö
|
|
Pool
Asset Administration
|
||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the
transaction
agreements or related mortgage loan documents.
|
Ö
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the
transaction
agreements
|
Ö
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
|
Ö
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance
with the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements,
and
allocated to principal, interest or other items (e.g., escrow)
in
accordance with the related mortgage loan documents.
|
Ö
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
|
Ö
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor’s mortgage loans (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
Ö
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions,
as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
Ö
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including,
for example,
phone calls, letters and payment rescheduling plans in cases
where
delinquency is deemed temporary (e.g., illness or
unemployment).
|
Ö
|
Exh.
7-3
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with
variable
rates are computed based on the related mortgage loan
documents.
|
Ö
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period
specified in
the transaction agreements; (B) interest on such funds is paid,
or
credited, to obligors in accordance with applicable mortgage
loan
documents and state laws; and (C) such funds are returned to
the obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction
agreements.
|
Ö
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that
such support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
Ö
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
Ö
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of
days
specified in the transaction agreements.
|
Ö
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
Ö
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
|
Exh.
7-4
[NAME
OF
SERVICER] [SUBSERVICER]
Date:
_______________________________
By:
_________________________________
Name:
Title:
Exh.
7-5
EXHIBIT
8
Subprime
Default and REO Servicing Standards
|
·
|
Right
Party Contact Rate of twenty-seven and a half percent (27.50%)
per month.
Termination standard is twenty-two and a half percent (22.50%),
after
Servicer has failed to respond to the notice provisions contained
in the
Flow Servicing Agreement
|
|
·
|
Servicer
shall meet the foreclosure timeline requirements as set forth
in the FNMA
guidelines
|
Time
Zones
All
accounts should be called until 9:00 p.m. in each time zone Monday through
Thursday.
Collection
Call Statistics
With
respect to only loans owned by Owner (“Owner
Loans”),
Servicer shall report monthly to Owner to the extent permitted by applicable
law
the following dialer statistical information broken out by delinquency
bucket
and on a loan level basis:
|
·
|
Number
of attempts made; ACD, predictive and non-predictive
;
|
|
·
|
Number
of right party contacts ;
|
|
·
|
Number
of commitments obtained; and
|
|
·
|
Number
of performing commitments.
|
The
reports provided by Servicer to Owner will stratify the collection work
efforts
and/or results in such a manner as to reasonably assure Owner that Servicer
is
in material compliance with the agreed upon service levels.
Skip
Tracing Statistics
A
minimum
of 50% of the accounts referred to skip tracing should result in a good
phone
number for the borrower.
Broken
Repayment Plans or Broken Promise to Pay
Follow-up
with the Mortgagor within seventy-two (72) hours of the repayment plan
being
broken.
FICO’s
Updated
FICO scores must be ordered, at Owner’s sole cost and expense, on all Owner
Loans on a quarterly basis and reported to Owner on the following month
end
tape.
VALUATIONS
BPO
should be ordered on the day in which a loan becomes sixty-five (65) days
delinquent if such loan is not cash flowing through a forbearance plan
or
bankruptcy plan. Servicer should receive the requested BPO within twenty-one
(21) days of such BPO order with the understanding that such BPOs may be
received at any time depending on the totality of the circumstances;
provided,
however,
the
Servicer shall provide Owner with notice and weekly updates of any developments
with respect to any BPO which is not received by the Servicer within twenty-one
(21) days of such BPO order. Reconciliation should be performed on a BPO
within
five (5) business days of receipt thereof. Servicer system should reflect
reconciled value upon receipt of the BPO. The reconciled value should then
be
reported to Owner with the next month end data tape.
Exh.
8-1
BANKRUPTCY
All
bankruptcy actions will be managed according to FNMA guidelines including,
without limitation, bankruptcy set-up, filing proofs of claims, monitoring
plans, referring loans to an attorney, filing motions for relief, and/or
releasing bankruptcies back to foreclosure/normal servicing.
All
loans
owned by Owner should be run though XXXXX or a similar system once every
thirty
(30) days.
FORECLOSURE
Servicer
shall follow FNMA timelines for all Owner Loans in foreclosure. Allowable
delays
shall include bankruptcy filings, litigation, loss mitigation which results
in
cash being applied to the loan. Assignment delays should be no longer than
thirty (30) days. Title issues should be no longer than sixty (60) days.
Any
delays that shall exceed these estimated timelines should be reported to
Owner
on a monthly basis. Owner Loans will not be referred to foreclosure until
the
reconciled value has been received and evaluated.
Servicer
shall maintain a foreclosure resolution rate of fifty percent
(50%).
Exh.
8-2
EXHIBIT
9
REO
Servicing Standards
Purpose:
The
purpose of these standards is to serve as a guideline for valuations, reporting
and overall management of Owner REO Assets.
Property
Valuations:
|
·
|
BPO
-
As soon as the REO property in possession, by our attached definition
an
interior BPO should be ordered by the servicer. The BPO should
state a
Value as-is and a Repaired Value. It should include interior
photos,
photos of outbuildings, and deferred maintenance. Upon completion
an
original copy of the BPO is to be forwarded to the REO Department
of Owner
either in PDF format or overnight hard copy. Sale and listing
information
on the BPO should be in a grid format acceptable to Owner.
|
|
·
|
APPRAISAL
-
(Only on new REO acquisitions) As soon as the property is re-keyed
and
trashed out the servicer will at Owner request, order a full
interior
appraisal on form 1004 from an Appraiser acceptable to Owner.
The
appraiser should be given the access instructions by the servicer.
The
full appraisal will include interior photos, photos of all outbuildings
and deferred maintenance. Required is “The Supplemental REO Addendum Form”
giving 3 listing comps, itemization of needed repairs, and as-is
and
as-repaired value. Upon completion an original copy of the Appraisal
is to
be forwarded or made available to the REO Department of Owner
either in
PDF format or overnight hard copy.
|
|
·
|
OTHER
-
Any and all subsequent BPO’s, CMA’s Appraisals, AVM’s or other evaluations
ordered during the course of the REO term are to be made available
in the
same manner.
|
Vendors:
|
·
|
From
time to time, Owner will provide the Servicer with a published
list of
Appraisers, Appraisal Vendors, Realtors, Brokers and other service
providers with whom they prefer not to do business. The Servicer
will make
commercially reasonable efforts to refrain from using anyone
named on such
a list and Owner reserves the right to refuse any product or
service and
payment for that product or service provided by such listed Appraisers,
Appraisal Vendors, Realtors, Brokers and other service providers
- if, and
only if, such product or service does not comply with reasonable
standards
as determined by generally accepted 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.
|
Possession:
|
·
|
RE-KEYING
- The
property should be Re-keyed as soon as it is in our possession
both to
keep prior occupants out and allow access to new service providers
and
Owner personnel. Owner suggests that the door be re-keyed to
a master key
code (key code to be furnished to REO personnel at Owner) and
the new keys
be placed in a combo lock box. The servicer will keep REO personnel
at
Owner informed with proper access
information.
|
Exh.
9-1
|
·
|
TRASH
OUT -
Defined as but not limited to; grass cut, shrubs and trees trimmed,
all
debris cleared from interior and exterior, appliances emptied,
cleaned and
secured, all trash removed from premises, windows and doors secured,
any
fire or safety hazard removed. The property should be trashed
out before
the full appraisal is ordered and the “For Sale” sign is placed on the
property.
|
|
·
|
CASH
FOR KEYS -
The maximum allowable payment to either an owner or tenant to
vacate the
property without Owners’ prior consent should be one thousand five hundred
dollars ($1,500). If the servicer intends to pay either an owner
or tenant
to vacate the property an amount in excess of one thousand five
hundred
dollars ($1,500), the servicer should make commercially reasonable
efforts
to obtain Owners’ prior consent. Every advance should be cost justified
and that data available to Owner upon request. The exact amount
of the
advance should be proportional to the benefit and made to avoid
a
lengthily eviction process. Payments should be made only after
the
property is actually vacated and inspected by designated agents
of the
servicer. The servicer will report each month on all cash for
keys
transactions.
|
|
·
|
INSURANCE
CLAIMS-
The servicer will report on a monthly basis all Insurance claims
filed,
claims denied and claims aged over ninety (90) days during the
reporting
period.
|
On
the Market:
· LISTING
-
All
properties are expected to be listed within thirty (30) days of possession.
Properties
not listed within thirty (30) days will require an exceptions report at
month
end.
All
listings should be in the local MLS.
Listing
Agreements should not be for more than six (6) months.
All
listing agreements are subject to cancellation at any time without penalty
of
liability to Owner
· SIGNAGE
-
All
listed properties are to have a sign that is conspicuous and readable from
the
street which clearly indicates the property is available for sale and contact
information for prospective buyers.
Exh.
9-2
From
the
date of acquisition through the date of listing , the broker/agent/servicer
is
to reasonably inspect the property until a sale sign is posted.
Exh.
9-3
EXHIBIT
10
FORM
OF NOTICE LETTER
[LETTERHEAD
OF OWNER]
[DATE]
Avelo
Mortgage, L.L.C.
000
X.
Xxx Xxxxxxx Xxxxxxxxx
Xxxxx
000
Xxxxxx,
Xxxxx 00000
Attention:
President
| Re: |
Flow
Servicing Agreement dated January 1, 2006 (the “Servicing
Agreement”),
between Xxxxxxx Sachs Mortgage Company (“Owner”)
and
Avelo Mortgage, L.L.C., as servicer (“Servicer”).
|
Gentlemen
and Ladies:
This
letter (this “Notice
Letter”)
and
the Mortgage Loan Schedule attached hereto as Exhibit
A,
identifies certain mortgage loans (the “Added
Mortgage Loans”)
which
Owner requests to make subject to the Servicing Agreement effective as
of
[________] (the “Transfer
Date”).
As
of the
Transfer Date, the Added Mortgage Loans shall be deemed to have been made
subject to the terms and conditions of the Servicing Agreement. The Mortgage
Loans are [prime] [subprime] [Alt-A] Mortgage Loans and all delinquency
calculation with respect to the Added Mortgage Loans shall be determined
in
accordance with [ABS] [RMBS] methodology. The Servicing Fee Rate with respect
to
the Added Mortgage Loans shall be [___]. The REO Management Fee with respect
to
the Added Mortgage Loans shall be [________].
All
exhibits hereto are incorporated herein in their entirety. All capitalized
terms
used herein and not otherwise defined herein shall have the meanings assigned
to
such terms in the Servicing Agreement.
[SIGNATURE
PAGE FOLLOWS]
Xxx.
00-0
IN
WITNESS WHEREOF, this Notice Letter has been executed as of the ____day
of
______________.
XXXXXXX
XXXXX MORTGAGE COMPANY, as Owner
By:
_________________________________
Name:
Title:
AVELO
MORTGAGE, L.L.C., as Servicer
By:
_________________________________
Name:
J.
Xxxxxx Xxxxxxx
Title:
President
Xxx.
00-0
