SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the
1st day of October, 1998, by and between XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and AURORA
LOAN SERVICES INC., a Delaware corporation ("the Servicer"), recites and
provides as follows:
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans identified
on Schedule I hereto (the "Serviced Mortgage Loans") on a servicing-retained
basis to Structured Asset Securities Corporation ("SASCO"), which in turn has
conveyed the Serviced Mortgage Loans to The Chase Manhattan Bank, as trustee
(the "Trustee") under a trust agreement dated as of October 1, 1998 (the "Trust
Agreement"), among the Trustee, Aurora Loan Services Inc., as master servicer
("Aurora," and together with any successor Master Servicer appointed pursuant
to the provisions of the Trust Agreement, the "Master Servicer") and SASCO.
WHEREAS, Xxxxxx Capital continues to own the servicing rights to the
Serviced Mortgage Loans, and may freely transfer such rights, subject to the
terms hereof.
WHEREAS, Xxxxxx Capital desires that the Servicer service the Serviced
Mortgage Loans, and the Servicer has agreed to do so, subject to the right of
Xxxxxx Capital to terminate the rights and obligations of the Servicer
hereunder at any time and to the other conditions set forth herein.
WHEREAS, Aurora, acting as Master Servicer, and any successor Master
Servicer shall be obligated, among other things, to supervise the servicing of
the Serviced Mortgage Loans on behalf of the Trustee, and shall have the right,
under certain circumstances, to terminate the rights and obligations of the
Servicer under this Servicing Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxxx Capital and the Servicer
hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto and any provisions of the Flow Servicing
Agreement dated as of September 1, 1997, between Xxxxxx Capital and the
Servicer (the "Flow Servicing Agreement") incorporated by reference herein,
shall have the meanings ascribed to such terms in the Trust Agreement.
2. Servicing. The Servicer agrees, with respect to the Serviced
Mortgage Loans, to perform and observe the duties, responsibilities and
obligations that are to be performed and observed under the provisions of the
Flow Servicing Agreement, except as otherwise provided herein and on Exhibit A
hereto, and that the provisions of the Flow Servicing Agreement, as so
modified, are and shall be a part of this Agreement to the same extent as if
set forth herein in full.
3. Master Servicing; Termination of Servicer. The Servicer, including
any successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Serviced Mortgage Loans in accordance with the provisions
of this Agreement. The Master Servicer, acting on behalf of the Trustee
pursuant to the Trust Agreement, shall have the same rights as the "Owner" (as
defined in the Flow Servicing Agreement) to enforce the obligations of the
Servicer under the Flow Servicing Agreement. In addition, all of the
representations, warranties, covenants, agreements and indemnities made by the
Servicer (or by any successor servicer) to the "Owner" under the Flow Servicing
Agreement are hereby deemed made to the Master Servicer as if the Master
Servicer were the "Owner" and all such representations, warranties, covenants,
agreements and indemnities shall inure to the benefit of the Master Servicer;
provided, however, that notwithstanding the foregoing, the Master Servicer
shall have (i) no right or interest in the "Reconstituted Termination Fee"
referred to in Section 7.06 of the Flow Servicing or the "Additional
Remittance" referred to in Section 7.07 of the Flow Servicing Agreement and
(ii) no right to terminate the Servicer, except as expressly set forth herein.
Nothing contained herein is intended to result in the creation or assumption by
the Master Servicer of any obligation of the "Owner" or any Person under the
Flow Servicing Agreement or any other agreement or instrument relating thereto
except as specifically set forth herein. The Master Servicer shall be entitled
to terminate the rights and obligations of the Servicer under this Agreement
upon the failure of the Servicer to perform any of its obligations under this
Agreement, as provided in Article IX of the Flow Servicing Agreement.
In addition, in the event that Xxxxxx Capital transfers the servicing
rights in respect of the Serviced Mortgage Loans to one or more successor
servicers, the rights and obligations of the Servicer under this Agreement
shall terminate, at the sole option of Xxxxxx Capital, without cause, upon
thirty days written notice to the Servicer, and each successor servicer shall
succeed to the rights and obligations of the Servicer under this Agreement as
of such date. Upon such termination the terminated Servicer shall not be
entitled to the Reconstituted Servicing Fee or any portion thereof, or, except
as provided in the Flow Servicing Agreement, to any other amounts in respect of
the Serviced Mortgage Loans.
The Servicer agrees that, notwithstanding anything to the contrary in
the Flow Servicing Agreement, Xxxxxx Capital is the sole owner of the servicing
rights relating to the Serviced Mortgaged Loans, and the Servicer shall have no
right to transfer the servicing thereof.
4. No Representations. Neither the Servicer nor the Master Servicer
shall be obligated or required to make any representations and warranties
regarding the Serviced Mortgage Loans in connection with the transactions
contemplated by the Trust Agreement and issuance of the certificates issued
pursuant thereto.
5. Notices. All notices and communications between or among the
parties hereto shall be in writing and shall be deemed received or given when
mailed first-class mail, postage prepaid, addressed to each other party at its
address specified below. Each party may designate to the other parties in
writing, from time to time, other addresses to which notices and communications
hereunder shall be sent.
6. Governing Law. THIS SERVICING AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all of which counterparts shall together constitute but one and the same
instrument.
8. Reconstitution. Xxxxxx Capital and the Servicer agree that this
Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Flow Servicing Agreement.
9. Notices and Remittances to the Master Servicer. All notices
required to be delivered to the Owner or the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Aurora Loan Services Inc.
0000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx
Attn: Master Servicing Department, SASCO 1998-ALS1
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
The Chase Manhattan Bank
New York, New York
ABA#: 000-000-000
Account Name: Aurora Loan Services Inc. Master Servicing
Payment Clearing Account
Account Number: 066-611059
Beneficiary: Aurora Loan Services Inc.
For further credit to: SASCO 1998-ALS1
10. Errors and Omissions Insurance. The Servicer shall keep in force
during the term of this Agreement a fidelity bond and a policy or policies of
insurance covering errors and omissions in the performance of the Servicer's
obligations under this Agreement. Such fidelity bond and policy or policies
shall be maintained with recognized insurers and shall be in such form and
amount as would permit the Servicer to be qualified as a FNMA or FHLMC
seller-servicer. The Servicer shall be deemed to have complied with this
provision if an affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. The Servicer
shall furnish to the Master Servicer a copy of each such bond and insurance
policy if (i) the Master Servicer so requests and (ii) the Servicer is not an
affiliate of Xxxxxx Brothers Inc. at the time of such request.
11. Annual Audit Report. On or before April 30 of each year, beginning
with April 30, 1999, Servicer shall cause a firm of independent public
accountants (who may also render other services to Servicer), which is a member
of the American Institute of Certified Public Accountants, to furnish a
statement to Owner and Master Servicer, to the effect that such firm has
examined certain documents and records for the preceding fiscal year (or during
the period from the date of commencement of such servicer's duties hereunder
until the end of such preceding fiscal year in the case of the first such
certificate) and that, on the basis of such examination conducted substantially
in compliance with the Uniform Single Attestation Program for Mortgage Bankers,
such firm is of the opinion that Servicer's overall servicing operations have
been conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers except for such exceptions that, in the opinion of such firm,
the Uniform Single Attestation Program for Mortgage Bankers requires it to
report, in which case such exceptions shall be set forth in such statement.
12. Annual Officer's Certificate. On or before April 30 of each year,
beginning with April 30, 1999, the Servicer, at its own expense, will deliver
to the Owner and Master Servicer a Servicing Officer's certificate stating, as
to each signer thereof, that (i) a review of the activities of the Servicer
during such preceding fiscal year and of performance under this Agreement has
been made under such officers' supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement for such year, or, if there has been a default
in the fulfillment of all such obligations, specifying each such default known
to such officers and the nature and status thereof including the steps being
taken by the Servicer to remedy such default.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: /s/Xxxxxx Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
AURORA LOAN SERVICES INC.
By: /s/Xxx X. Xxxxxxxx
Name: Xxx X. Xxxxxxxx
Title: Executive Vice President
EXHIBIT A
Modifications to the Flow Servicing Agreement
1. The following is hereby added immediately following the words
"incidental fees and charges" in the definition of "Ancillary Income"
in Article I: ", but not including any premium or penalty associated
with a prepayment of principal of a Mortgage Loan."
2. The definition of "Custodial Agreement" in Article I is hereby deleted
and replaced with the following:
"The custodial agreement relating to custody of the Serviced
Mortgage Loans among LaSalle National Bank, as Custodian, The Chase
Manhattan Bank, as Trustee, and Structured Asset Securities
Corporation, dated as of October 1, 1998."
3. The definition of "Custodian" in Article I is hereby deleted and
replaced with the following:
"LaSalle National Bank, as Custodian pursuant to a Custodial
Agreement, and any successor thereto."
4. The following definition is hereby added:
"Prepayment Interest Excess Amount: With respect to any Principal
Prepayment in full of a Mortgage Loan received from the first day
through the sixteenth day of any calendar month, all amounts paid in
respect of interest on such Principal Prepayment."
5. The definition of "Prepayment Interest Shortfall Amount" is hereby
deleted and replaced with the following:
"Prepayment Interest Shortfall Amount: With respect to (x)
any Principal Prepayment in part (other than any such prepayment
received on the first of the month) and (y) any Principal Prepayment
in full received on or after the seventeenth day of the month
preceding the month of such Distribution Date, but on or before the
last day of the month preceding the month of such Distribution Date,
the difference between (i) one full month's interest at the applicable
Mortgage Rate (giving effect to any applicable Relief Act Reduction),
as reduced by the Reconstituted Servicing Fee, on the outstanding
principal balance of such Mortgage Loan immediately prior to such
prepayment and (ii) the amount of interest actually received with
respect to such Mortgage Loan in connection with such Principal
Prepayment."
6. The following definition is hereby added:
"Prepayment Period: With respect to any Distribution Date and
a partial Principal Prepayment, the period from the second day of the
month preceding the month of such Distribution Date to the first day
of the month of such Distribution Date. With respect to any
Distribution Date and a full Principal Prepayment, the period from the
seventeenth day of the month preceding the month of such Distribution
Date to the sixteenth day of the month of such Distribution Date."
7. The definition of "Monthly Advance" in Article I is hereby amended by
adding at the end of such definition the following: ", but only to the
extent that such amount is expected, in the reasonable judgment of the
Servicer, to be recoverable from collections or other recoveries in
respect of such Mortgage Loan."
8. The definition of "Qualified Depository" in Article I is hereby
deleted and replaced with the following:
"Any of (i) a depository the accounts of which are insured by
the FDIC and the debt obligations of which are rated AA or better by
Fitch and S&P; (ii) the corporate trust department of any bank the
debt obligations of which are rated at least A-1 or its equivalent by
each of Fitch and S&P; or (iii) the Servicer, unless the Master
Servicer is notified by either Fitch or S&P that the designation of
the Servicer as a Qualified Depository will result in a qualification,
withdrawal or downgrade of the then-current rating of any of the
Certificates."
9. The following definition is hereby added:
"Reconstituted Servicing Fee: An amount equal to (1)
one-twelfth the product of (a) a rate per annum equal to 0.30% and (b)
the outstanding principal balance of such Mortgage Loan and (2) any
Prepayment Interest Excess Amounts. The obligation of the Master
Servicer to pay the Reconstituted Servicing Fee is limited to, and the
Reconstituted Servicing Fee is payable solely from, the interest
portion (including recoveries with respect to interest from
Liquidation Proceeds to the extent permitted by Section 3.02 of this
Agreement) of such Monthly Payment collected by the Servicer, or as
otherwise provided under this Agreement."
10. The definition of "Remittance Date" in Article I is hereby deleted and
replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the
first Business Day immediately preceding) of any month, following the
First Remittance Date."
11. The definition of "Servicing Fee" in Article I is hereby deleted.
12. The fourth and fifth paragraphs of Section 3.01 are hereby deleted and
replaced with the following paragraph:
"Consistent with the terms of this Agreement, the Servicer
may waive any late payment charge, assumption fee or other fee that
may be collected in the ordinary course of servicing the Mortgage
Loans. The Servicer shall not make any future advances to any obligor
under any Mortgage Loan, and (unless the Mortgagor is in default with
respect to the Mortgage Loan or such default is, in the judgment of
the Servicer, reasonably foreseeable) the Servicer shall not permit
any modification of any material term of any Mortgage Loan, including
any modification that would change the Mortgage Interest Rate, defer
or forgive the payment of principal or interest, reduce or increase
the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan. In
the event of any such modification which permits the deferral of
interest or principal payments on any Mortgage Loan, the Servicer
shall, on the Business Day immediately preceding the Remittance Date
in any month in which any such principal or interest payment has been
deferred, make a Monthly Advance in accordance with Section 4.03, in
an amount equal to the difference between (a) such month's principal
and one month's interest at the Remittance Rate on the unpaid
principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Servicer shall be entitled to reimbursement for such
advances to the same extent as for all other advances made pursuant to
Section 4.03. 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 Master Servicer, 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.
Upon the request of the Servicer, the Master Servicer shall execute
and deliver to the Servicer any powers of attorney and other
documents, furnished to it by the Servicer and reasonably satisfactory
to the Master Servicer, necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties under
this Agreement.
Notwithstanding anything to the contrary in this Agreement,
the Servicer shall not waive any premium or penalty in connection with
a prepayment of principal of any Mortgage Loan, and shall not consent
to the modification of any Mortgage Note to the extent that such
modification relates to payment of a prepayment premium or penalty."
13. The words "Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
Inc., owner of residential Mortgage Loans, Group No. 1997-ALSI, and
various Mortgagors" in the first paragraph of Section 3.03 are hereby
deleted and replaced with the following: "Aurora Loan Services Inc.,
as master servicer for SASCO 1998-ALS1."
14. Section 3.04 is amended by deleting the word "and" at the end of
clause (v), replacing the period at the end of clause (vi) with ";
and", and adding the following immediately following clauses (vii) and
(viii):
"(vii) to reimburse itself for Monthly Advances of the
Servicer's funds made pursuant to Section 7.03, it being understood
that, in the case of any such reimbursement, the Servicer's right
thereto shall be prior to the rights of the Trust Fund;
(viii) to reimburse itself for unreimbursed Servicing
Advances, and for any unpaid Reconstituted Servicing Fees, the
Servicer's right to reimburse itself pursuant to this subclause (viii)
with respect to any Mortgage Loan being limited to related Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
Proceeds and other amounts received in respect of the related REO
Property, 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
Purchaser;"
15. The words "Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
Inc., owner of residential Mortgage Loans, Group No. 1997-ALSI, and
various Mortgagors" in the first paragraph of Section 3.05 are hereby
deleted and replaced with the following: "Aurora Loan Services Inc.,
as master servicer for SASCO 1998-ALS1."
16. All references in Section 3.11 to the disposition of REO Properties
within a two year period are hereby deleted and replaced with a three
year period.
17. The first paragraph of Section 4.01 is hereby deleted and replaced
with the following:
"On each Remittance Date the Servicer shall remit by wire
transfer of immediately available funds to the Master Servicer (a) all
amounts deposited in the Custodial Account as of the close of business
on the last day of the related Due Period (net of charges against or
withdrawals from the Custodial Account pursuant to Section 3.04), plus
(b) all amounts, if any, which the Servicer is obligated to distribute
pursuant to Section 7.03, minus (c) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds or REO Disposition Proceeds received after the
applicable 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 7.03, 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 in which
such Remittance Date occurs, which amounts shall be remitted on the
Remittance Date next succeeding the Due Period for such amounts."
18. Section 4.02 is hereby amended by deleting the words "Remittance Date"
in the first line of such Section, and substituting the following:
"tenth Business Day of each month"
19. The third paragraph of Section 5.01 is hereby deleted.
20. Section 5.02 is hereby deleted.
21. All references to the "Servicing Fee" (other than the definition of
"Servicing Fee" in Article I) shall be deemed to refer to the
"Reconstituted Servicing Fee" pursuant to Section 7.03.
22. The following paragraph is added at the end of Section 10.01:
"Neither the Master Servicer nor any successor servicer
(including the Owner and the Master Servicer) shall be liable for any
acts or omissions of the Servicer or any predecessor servicer. In
particular, neither the Master Servicer nor any successor servicer
(including the Owner and the Master Servicer) shall be liable for any
servicing errors or interruptions resulting from any failure of the
Servicer to maintain computer and other information systems that are
year-2000 compliant."
23. The following words are hereby added after the words "Attention: Xxxx
Xxxxx" in Section 10.06(ii):
"with a copy to:
Aurora Loan Services Inc.
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Xx."
