EXHIBIT 10.1.3
SELLER'S PURCHASE, WARRANTIES AND SERVICING AGREEMENT, DATED AS
OF OCTOBER 1, 2001, AMONG XXXXXXX XXXXX MORTGAGE COMPANY,
BANK ONE, N.A. AND FIRST CHICAGO NBD MORTGAGE COMPANY
==============================================================================
XXXXXXX SACHS MORTGAGE COMPANY
Purchaser,
BANK ONE, N.A.,
Seller
and
FIRST CHICAGO NBD MORTGAGE COMPANY
Servicer
SELLER'S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of August 1, 2001
==============================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.................................................................................2
Section 1.01 Defined Terms...............................................................................2
ARTICLE II SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION OF MORTGAGE FILES; BOOKS AND
RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF MORTGAGE LOAN DOCUMENTS..........................14
Section 2.01 Agreement to Purchase......................................................................14
Section 2.02 Purchase Price.............................................................................14
Section 2.03 Servicing of Mortgage Loans................................................................14
Section 2.04 Record Title and Possession of Mortgage Files; Maintenance of Servicing Files..............15
Section 2.05 Books and Records..........................................................................15
Section 2.06 Transfer of Mortgage Loans.................................................................16
Section 2.07 Delivery of Mortgage Loan Documents........................................................16
Section 2.08 Quality Control Procedures.................................................................18
Section 2.09 Closing....................................................................................19
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SERVICER; REPURCHASE; REVIEW OF
MORTGAGE LOANS.............................................................................20
Section 3.01 Examination of Mortgage Files..............................................................20
Section 3.02 Representations and Warranties of the Seller and the Servicer..............................20
Section 3.03 Representations and Warranties as to Individual Mortgage Loans.............................23
Section 3.04 Repurchase.................................................................................32
Section 3.05 Repurchase of Mortgage Loans with Early Payment Default:...................................34
Section 3.06 Purchase Price Protection..................................................................34
Section 3.07 Representations and Warranties of the Purchaser............................................34
ARTICLE IV ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS.........................................36
Section 4.01 The Servicer to Act as Servicer............................................................36
Section 4.02 Collection of Mortgage Loan Payments.......................................................37
Section 4.03 Realization Upon Defaulted Mortgage Loans..................................................37
Section 4.04 Establishment of Custodial Accounts; Deposits in Custodial Accounts........................38
Section 4.05 Permitted Withdrawals From the Custodial Account...........................................40
Section 4.06 Establishment of Escrow Accounts; Deposits in Accounts.....................................42
Section 4.07 Permitted Withdrawals From the Escrow Account..............................................42
Section 4.08 Payment of Taxes, Insurance and Charges; Maintenance of Primary Mortgage Insurance;
Collections Thereunder..................................................................43
Section 4.09 Transfer of Accounts.......................................................................44
Section 4.10 Maintenance of Hazard Insurance............................................................44
Section 4.11 Maintenance of Mortgage Impairment Insurance Policy........................................46
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance............................46
Section 4.13 Inspections................................................................................47
Section 4.14 Restoration of Mortgaged Property..........................................................47
Section 4.15 Claims.....................................................................................48
Section 4.16 Title, Management and Disposition of REO Property..........................................48
Section 4.17 Real Estate Owned Reports..................................................................49
Section 4.18 Liquidation Reports........................................................................49
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property.............................49
Section 4.20 Notification of Maturity Date..............................................................50
ARTICLE V PAYMENTS TO THE PURCHASER..................................................................51
Section 5.01 Distributions..............................................................................51
Section 5.02 Statements to the Purchaser................................................................51
Section 5.03 Monthly Advances by the Servicer...........................................................52
Section 5.04 Liquidation Reports........................................................................53
ARTICLE VI GENERAL SERVICING PROCEDURES...............................................................54
Section 6.01 Assumption Agreements......................................................................54
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files....................................55
Section 6.03 Servicing Compensation.....................................................................56
Section 6.04 Annual Statement as to Compliance..........................................................56
Section 6.05 Annual Independent Certified Public Accountants' Servicing Report..........................56
Section 6.06 Purchaser's Right to Examine Servicer Records..............................................57
Section 6.07 Compliance with REMIC Provisions...........................................................57
Section 6.08 Servicer Shall Provide Information as Reasonably Required..................................57
ARTICLE VII SERVICER TO COOPERATE......................................................................59
Section 7.01 Provision of Information...................................................................59
Section 7.02 Financial Statements; Servicing Facility...................................................59
ARTICLE VIII THE SELLER AND THE SERVICER................................................................60
Section 8.01 Indemnification; Third Party Claims........................................................60
Section 8.02 Merger or Consolidation of the Seller or the Servicer......................................60
Section 8.03 Limitation on Liability of the Seller and Others...........................................61
Section 8.04 Servicer Not to Resign.....................................................................61
Section 8.05 No Transfer of Servicing...................................................................62
ARTICLE IX DEFAULT....................................................................................63
Section 9.01 Events of Default..........................................................................63
Section 9.02 Waiver of Defaults.........................................................................65
ARTICLE X TERMINATION................................................................................66
Section 10.01 Termination................................................................................66
Section 10.02 Termination Without Cause..................................................................66
ARTICLE XI RECONSTITUTION OF MORTGAGE LOANS...........................................................67
Section 11.01 Reconstitution of Mortgage Loans...........................................................67
ARTICLE XII MISCELLANEOUS PROVISIONS...................................................................70
Section 12.01 Successor to the Servicer..................................................................70
Section 12.02 Amendment..................................................................................71
Section 12.03 Governing Law..............................................................................71
Section 12.04 Notices....................................................................................71
Section 12.05 Severability of Provisions.................................................................72
Section 12.06 Duration of Agreement......................................................................72
Section 12.07 Exhibits...................................................................................73
Section 12.08 General Interpretive Principles............................................................73
Section 12.09 Reproduction of Documents..................................................................73
Section 12.10 Confidentiality of Information.............................................................74
Section 12.11 Recordation of Assignments of Mortgage.....................................................74
Section 12.12 Assignment by Purchaser, Seller and Servicer...............................................74
Section 12.13 No Partnership.............................................................................74
Section 12.14 Execution; Successors and Assigns..........................................................75
Section 12.15 Entire Agreement...........................................................................75
Section 12.16 No Solicitation............................................................................75
EXHIBITS
A-1 Contents of Mortgage File
A-2 Contents of Servicing File
B Form of Custodial Account Letter Agreement
C Form of Escrow Account Letter Agreement
D Form of Assignment, Assumption and Recognition Agreement
E-1 Form of Monthly Servicing Report
E-2 Monthly Deliquency Report Sample
F Mortgage Loan Schedule
G Request for Release of Documents and Receipt
H Form of Bring Down Letter
I Form of Opinion of Counsel to Seller
J Form of Custodial Agreement
This is a Seller's Purchase, Warranties and Servicing
Agreement, dated as of August 1, 2001 and is executed between XXXXXXX XXXXX
MORTGAGE COMPANY, as purchaser (the "Purchaser"), BANK ONE, N.A., as seller
(the "Seller") and First Chicago NBD Mortgage Company, as servicer (the
"Servicer").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Purchaser has heretofore agreed to purchase
from the Seller and the Seller has heretofore agreed to sell to the Purchaser
certain adjustable rate Mortgage Loans, servicing rights retained, which have
an aggregate outstanding principal balance as of the close of business on the
Cut-Off Date, after deduction of payments due on or before such date (whether
or not received) of approximately $89.4 million pursuant to the terms of a
letter agreement by and between the Seller and the Purchaser (the "Purchase
Price and Terms Letter").
WHEREAS, each of the Mortgage Loans is secured by a
mortgage, deed of trust or other security instrument creating a first priority
lien on a residential dwelling located in the jurisdiction indicated on the
Mortgage Loan Schedule, which is annexed hereto as Exhibit F. The Mortgage
Loans as described herein shall be delivered in groups of whole loans (each, a
"Mortgage Loan Package") on various dates as provided herein (each, a "Closing
Date"); and
WHEREAS, the Purchaser, the Seller and the Servicer wish to
prescribe the representations and warranties of the Seller with respect to
itself and the Mortgage Loans and the management, servicing and control of the
Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Purchaser, the
Seller and the Servicer agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meaning specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices (including collection procedures) of
prudent mortgage banking institutions which service mortgage loans of the same
type as such Mortgage Loan in the jurisdiction where the related Mortgaged
Property is located, and which are in accordance with Xxxxxx Mae servicing
practices and procedures, for MBS pool mortgages, as defined in the Xxxxxx Xxx
Guides including future updates.
Adjustable Rate Mortgage Loan: An adjustable rate mortgage
loan purchased pursuant to this Agreement.
Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date set forth in the related Mortgage Note on which the
Mortgage Interest Rate on the Mortgage Loan is adjusted in accordance with the
terms of the Mortgage Note.
Agreement: This Seller's Purchase, Warranties and Servicing
Agreement including all exhibits hereto, amendments hereof and supplements
hereto.
ALTA: The American Land Title Association or any successor
thereto.
Appraised Value: With respect to any Mortgaged Property, the
lesser of (i) the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by an appraiser who met the underwriting requirements of the originator,
and (ii) the purchase price paid for the related Mortgaged Property by the
Mortgagor with the proceeds of the Mortgage Loan, provided, however, in the
case of a Refinanced Mortgage Loan, such value of the Mortgaged Property is
based solely upon the value determined by an appraisal made for the originator
of such Refinanced Mortgage Loan at the time of the refinancing by an
appraiser who met the underwriting requirements of the originator.
Assignment: 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 or other transfer of the Mortgage.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or a
Sunday, or (ii) a legal holiday in the State of New York, or (iii) a day on
which banks or savings and loan associations in the State of New York are
authorized or obligated by law or executive order to be closed.
Closing Date: August 23, 2001.
Closing Documents: The Closing Documents shall consist of
fully executed originals of the following documents:
(i) this Agreement, dated as of the Cut-off Date, in two
counterparts;
(ii) the Custodial Agreement, dated as of the Cut-off
Date, in three counterparts, in the form attached as Exhibit J to this
Agreement;
(iii) the Mortgage Loan Schedule, one copy to be attached
to each counterpart of this Agreement, and to each counterpart of the
Custodial Agreement, as the Mortgage Loan Schedule thereto;
(iv) a Receipt and Certification, as required under the
Custodial Agreement;
(v) an officer's certificate of the Seller substantially
in the form of Exhibit F attached hereto; and
(vi) an Opinion of Counsel of the Seller, substantially
in the form of Exhibit I hereto.
Code: The Internal Revenue Code of 1986, as the same may
be amended from time to time (or any successor statute thereto).
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.
Credit Score: The credit score for each Mortgage Loan
shall be the minimum of two credit bureau scores obtained at origination or
such other time by the Seller. If two credit bureau scores are obtained,
the Credit Score will be the lower score. If three credit bureau scores are
obtained, the Credit Score will be the middle of the three. When there is
more than one applicant, the lowest of the applicants' Credit Scores will
be used. There is only one (1) score for any loan regardless of the number
of borrowers and/or applicants. The minimum Credit Score for each Mortgage
Loan will be in accordance with the Seller's Underwriting Standards (as
defined below).
Custodial Account: Each separate demand account or
accounts created and maintained pursuant to Section 4.04 which shall be
established as an Eligible Account, in the name of the Person that is the
"Purchaser" with respect to the related Mortgage Loans.
Cut-off Date: August 1, 2001.
Determination Date: The 15th day (or if such 15th day is
not a Business Day, the Business Day immediately preceding such 15th day)
of the month of the related Remittance Date.
Due Date: The day of the month on which the Monthly Payment
is due on a Mortgage Loan, exclusive of any days of grace, which in all cases
is the first day of the month.
Due Period: With respect to any Remittance Date, the period
commencing on the second day of the month preceding the month of such
Remittance Date and ending on the first day of the month of the Remittance
Date.
Eligible Account: An account established and maintained:
(a) within FDIC insured accounts (or other accounts with comparable
insurance coverage acceptable to the Rating Agencies) created, maintained
and monitored by the Servicer so that all funds deposited therein are fully
insured, or (b) in a separate non-trust account without FDIC or other
insurance in an Eligible Institution. In the event that a Custodial Account
is established pursuant to clause (b) of the preceding sentence, the
Servicer shall provide the Purchaser with written notice on the Business
Day following the date on which the applicable institution fails to meet
the applicable ratings requirements.
Eligible Institution: An institution having (i) the
highest short-term debt rating, and one of the two highest long-term debt
ratings of the Rating Agency; or (ii) with respect to any Custodial
Account, an unsecured long-term debt rating of at least one of the two
highest unsecured long-term debt ratings of the Rating Agencies.
E&O Policy: An errors and omissions insurance policy to
be maintained by the Servicer pursuant to Section 4.12.
Escrow Account: Each separate trust account or accounts
created and maintained pursuant to Section 4.06 which shall be established
as an Eligible Account, in the name of the Person that is the "Purchaser"
with respect to the related Mortgage Loans.
Escrow Payments: With respect to any Mortgage Loan, the
amounts constituting taxes, municipal charges, mortgage insurance premiums,
fire and hazard insurance premiums, and any other payments required to be
escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage,
applicable law or any other related document.
Event of Default: Any one of the conditions or
circumstances enumerated in Section 9.01.
Xxxxxx Xxx: The entity formerly known as the Federal
National Mortgage Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the
Xxxxxx Mae Servicers' Guide and all amendments or additions thereto,
including, but not limited to, future updates thereof.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the
Servicer pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
First Remittance Date: September 18, 2001.
Xxxxxxx Mac: The entity formerly known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
Xxxxxxx Mac Guides: The Xxxxxxx Xxx Xxxxxxx' Guide and the
Xxxxxxx Mac Servicers' Guide and all amendments or additions thereto,
including, but not limited to, any future updates thereof.
GAAP: Generally accepted accounting procedures, consistently
applied.
Gross Margin: With respect to any Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note and
the related Mortgage Loan Schedule that is added to the Index on each
Adjustment Date in accordance with the terms of the related Mortgage Note to
determine the new Mortgage Interest Rate for such Mortgage Loan.
HUD: The United States Department of Housing and Urban
Development or any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan,
the index identified on the Mortgage Loan Schedule and set forth in the
related Mortgage Note for the purpose of calculating the Mortgage Interest
Rate thereon.
Insurance Proceeds: Proceeds of any mortgage insurance,
title policy, hazard policy or other insurance policy covering a Mortgage
Loan, if any, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own account.
Liquidation Proceeds: Cash (other than Insurance Proceeds or
Condemnation Proceeds) 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 or the Mortgage Property is sold by the
Mortgagor with the Lenders' consent.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the
ratio of the original loan amount of the Mortgage Loan at its origination or
refinancing, as applicable, to the Appraised Value of the Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the related
Mortgage Loan Schedule and in the related Mortgage Note and is the maximum
interest rate to which the Mortgage Interest Rate on such Mortgage Loan may be
increased on any Adjustment Date.
Minimum Mortgage Interest Rate: With respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the related
Mortgage Loan Schedule and in the related Mortgage Note and is the minimum
interest rate to which the Mortgage Interest Rate on such Mortgage Loan may be
decreased on any Adjustment Date.
Monthly Advance: The payment required to be made by the
Servicer with respect to any Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date pursuant to the terms of the related Mortgage Note.
Mortgage: The mortgage, deed of trust or other instrument
and any riders thereto securing a Mortgage Note, which creates a first lien 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 upon a leasehold
estate of the Mortgagor.
Mortgage File: With respect to each Mortgage Loan, the
documents pertaining thereto specified in Exhibit A-1 and any additional
documents required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Interest Rate: The annual rate at which interest
accrues on any Mortgage Loan in accordance with the provisions of the related
Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage Loan originally sold and subject to
this Agreement being identified on the Mortgage Loan Schedule, which Mortgage
Loan includes without limitation the Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds, any escrow accounts related to the
Mortgage Loan, and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: With respect to a Mortgage Loan,
the original Mortgage Note with applicable addenda and riders, the original
security instrument and the originals of any required addenda and riders, the
original Assignment and any original intervening related Assignments, the
original title insurance policy, and the related appraisal report.
Mortgage Loan Remittance Rate: With respect to each Mortgage
Loan, the Mortgage Interest Rate less the Servicing Fee Rate .
Mortgage Loan Schedule: The schedule of Mortgage Loans
annexed hereto as Exhibit F, such schedule setting forth the following
information with respect to each Mortgage Loan in the related Mortgage Loan
Package:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property
including the state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied;
(5) the type of residential property constituting the
Mortgaged Property (including a code indicating whether the Mortgaged
Property is a single family residence, two family residence, three family
residence, four family residence, condominium, or planned unit development;
(6) the original months to maturity or the remaining
months to maturity from the Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule;
(7) the Loan-to-Value Ratio at origination and as of the
Cut-off Date;
(8) the Due Date of the Mortgage Loan;
(9) the Mortgage Interest Rate at origination and as of
the Cut-off Date
(10) the Mortgage Loan Remittance Rate;
(11) the Servicing Fee Rate;
(12) the Mortgage Loan origination date;
(13) the paid through date;
(14) the stated maturity date of the Mortgage Loan (and,
if different, the stated maturity date indicated on the Mortgage Note on
its date of origination) and the original term to maturity;
(15) the amount of the Monthly Payment as of the Cut-off
Date;
(16) the original principal amount of the Mortgage Loan
as of the date of origination;
(17) the Scheduled Principal Balance of the Mortgage Loan
as of the Cut-off Date;
(18) a code indicating the purpose of the Mortgage Loan
(i.e., purchase, rate and term refinance, equity take-out refinance);
(19) a code indicating the documentation style (i.e.
full, alternative or reduced);
(20) the number of times during the twelve (12) month
period preceding the Closing Date that any Monthly Payment has been
received thirty (30) or more days after its Due Date;
(21) the date on which the first payment is or was due;
(22) a code indicating whether or not the Mortgage Loan
is insured as to payment defaults by a Primary Mortgage Insurance Policy;
and, in the case of any Mortgage Loan which is insured as to payment
defaults by a Primary Mortgage Insurance Policy, the name of the provider
of such Primary Mortgage Insurance Policy;
(23) a code indicating whether or not the Mortgage Loan
is the subject of a Prepayment Penalty as well as the terms of the
Prepayment Penalty;
(24) the Primary Mortgage Insurance Policy certificate
number, if applicable;
(25) the Primary Mortgage Insurance Policy coverage
percentage, if applicable;
(26) a code indicating the Credit Score of the Mortgagor
at the time of origination of the Mortgage Loan;
(27) a code indicating the credit grade and specific
loan/underwriting program of each Mortgage Loan as assigned by the Seller
pursuant to the Underwriting Standards;
(28) the loan type (i.e. fixed, adjustable; 5/1, 7/1 etc.);
(29) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date and the Adjustment Date frequency;
(30) with respect to each Adjustable Rate Mortgage Loan,
the Gross Margin;
(31) with respect to each Adjustable Rate Mortgage Loan,
the Maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(32) with respect to each Adjustable Rate Mortgage Loan,
the Minimum Mortgage Interest Rate under the terms of the Mortgage Note;
(33) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Rate Cap;
(34) with respect to each Adjustable Rate Mortgage Loan,
the first Adjustment Date immediately following the related Cut-off Date;
(35) with respect to each Adjustable Rate Mortgage Loan,
the Index;
(36) a code indicating whether the Mortgagor or the
Mortgaged Property is the subject of a bankruptcy case;
(37) whether there is a second lien on the Mortgaged
Property, and
(38) if there is a second lien, the combined
Loan-to-Value Ratio.
With respect to the Mortgage Loans in the aggregate in each
Mortgage Loan Package, the Mortgage Loan Schedule shall set forth the
following information, as of the Cut-off Date unless otherwise specified:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance
of the Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the
Mortgage Loans;
(4) the weighted average original months to maturity of
the Mortgage Loans and the weighted average remaining months to maturity of
the Mortgage Loans.
Mortgage Note: The note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged Property: The underlying real property securing
repayment of a Mortgage Note, consisting of a fee simple parcel of real estate
or a leasehold estate, the term of which is equal to or at least ten (10)
years longer than the term of the related Mortgage Note. With respect to a
Co-op Loan, the related Co-op Stock and Co-op Lease securing the indebtedness
of the Mortgagor under the related Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Nondisqualification Opinion: An opinion of counsel
experienced in mortgage loan securitization that a particular action will not
cause a REMIC to cease to qualify as such.
OCC: Office of the Comptroller of the Currency, its
successors and assigns.
Officers' Certificate: A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President, a Senior Vice
President or a Vice President and by the Treasurer or the Secretary or one of
the Assistant Treasurers or Assistant Secretaries of the Seller, and delivered
to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
an employee of the party on behalf of whom the opinion is being given,
reasonably acceptable to the Purchaser.
OTS: Office of Thrift Supervision.
Pass-Through Transfer: As defined in Section 11.01(a)(ii).
Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, a number of percentage points
per annum that is set forth in the related Mortgage Loan Schedule and in the
related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase (without regard to the
Maximum Mortgage Interest Rate) or decrease (without regard to the Minimum
Mortgage Interest Rate) on such Adjustment Date from the Mortgage Interest
Rate in effect immediately prior to such Adjustment Date, which may be a
different amount with respect to the first Adjustment Date.
Person: Any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Prepayment Interest Shortfall: The sum, for each Mortgage
Loan as to which there was a full or partial prepayment (including receipt of
Condemnation Proceeds, Liquidation Proceeds, or Insurance Proceeds) during a
Prepayment Period, of the difference between the interest that would have
accrued on such Mortgage Loan for the Due Period in which the prepayment
occurs if no such prepayment had occurred, and the interest that actually
accrues on such Mortgage Loan during such Due Period.
Prepayment Penalty: With respect to each Mortgage Loan, the
penalty if the Mortgagor prepays such Mortgage Loan as provided in the related
Mortgage Note or Mortgage.
Prepayment Period: With respect to each Remittance Date, the
period commencing on the first day of the month preceding the month in which
such Remittance Date occurs, and ending on the last day of such month.
Primary Mortgage Insurance Policy: Each policy of primary
mortgage insurance represented to be in effect pursuant to Section 3.02(cc),
or any replacement policy therefor obtained by the Servicer pursuant to
Section 4.08.
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 Balance: As to each Mortgage Loan, (i) the actual
outstanding principal balance of the Mortgage Loan at the Cut-off Date after
giving effect to payments of principal due on or before such date, whether or
not received, minus (ii) all amounts attributable to principal collected from
or on behalf of the Mortgagor, including the principal portion of Liquidation
Proceeds, Condemnation Proceeds, and Insurance Proceeds.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date, including any Prepayment Penalty or premium thereon and
which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the
month of prepayment.
Purchase Price: As defined in Section 2.02.
Purchase Price and Terms Letter: As defined in the Recitals
to this Agreement which may also be a form of trade execution notice.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, or its successor
in interest or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Appraiser: With respect to each Mortgage Loan, an
appraiser, duly appointed by the originator, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Mortgage Loan, and such appraiser and the appraisal made by such
appraiser both satisfy the requirements of Xxxxxx Mae or Xxxxxxx Mac and Title
XI of FIRREA and the regulations promulgated thereunder, all as in effect on
the date the Mortgage Loan was originated.
Qualification Defect: With respect to a Mortgage Loan, (a) a
defective document in the Mortgage File, (b) the absence of a document in the
Mortgage File, or (c) the breach of any representation, warranty or covenant
with respect to the Mortgage Loan made by the Seller, but, in each case, only
if the affected Mortgage Loan would cease to qualify as a "qualified mortgage"
for purposes of the REMIC Provisions.
Qualified Depository: A federal or state chartered
depository institution the deposits in which are insured by the FDIC to the
applicable limits and the short-term unsecured debt obligations of which (or,
in the case of a depository institution that is a subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company)
are rated A-1 by Standard & Poor's Ratings Group or Prime-1 by Xxxxx'x
Investors Service, Inc. (or a comparable rating if another rating agency is
specified by the Purchaser by written notice to the Servicer) at the time any
deposits are held on deposit therein.
Qualified Insurer: An insurance company duly qualified as
such under the laws of the states in which the Mortgaged Properties are
located, duly authorized and licensed in such states to transact the
applicable insurance business and to write the insurance provided by the
insurance policy issued by it, approved as an insurer by Xxxxxx Xxx and
Xxxxxxx Mac.
Rating Agencies: Xxxxx'x Investors Services, Inc., Standard
& Poor's Ratings Group, Fitch, Inc., or any other nationally recognized
statistical credit rating agency rating any security issued in connection with
any Pass-Through Transfer.
Reconstitution Date: The date on which any or all of the
Mortgage Loans serviced under this Agreement shall be reconstituted as part of
a Pass-Through Transfer or Whole Loan Transfer pursuant to Section 11.01
hereof. The Reconstitution Date shall be such date the Purchaser shall
designate in writing to the Seller.
Refinanced Mortgage Loan: A Mortgage Loan which was made to
a Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or part to satisfy
an existing mortgage.
REMIC: A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of Subchapter M
of Chapter 1, Subtitle A of the Code, and related provisions, and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The 18th day of each month, beginning with
the First Remittance Date, or if such day is not a Business Day, the first
Business Day thereafter.
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Disposition Proceeds: Amounts received by the Servicer
in connection with an REO Disposition, net of associated expenses.
REO Property: A Mortgaged Property acquired by or on behalf
of the Purchaser in full or partial satisfaction of the related Mortgage as
described in Section 4.16.
Repurchase Price: Unless agreed otherwise by the Purchaser
and the Seller (including in the Purchase Price and Terms Letter) a price
equal to (i) the greater of (A) the product of the percentage of par stated in
the related Purchase Price and Terms Letter and the outstanding principal
balance of the Mortgage Loan and (B) and the Principal Balance of the Mortgage
Loan, plus (ii) interest on such Principal Balance at the related Mortgage
Interest Rate from the last date through which interest was last paid and
distributed to the Purchaser to the date of repurchase, plus, (iii) reasonable
and customary third party expenses incurred in connection with the transfer of
the Mortgage Loan being repurchased; less amounts received or advanced in
respect of such repurchased Mortgage Loan which are being held in the
Custodial Account for distribution in the month of repurchase.
SAIF: The Savings Association Insurance Fund, or any
successor thereto.
Scheduled Principal Balance: As to each Mortgage Loan, (i)
the principal balance of the Mortgage Loan at the Cut-off Date after giving
effect to payments of principal due on or before such date, whether or not
received, minus (ii) all amounts previously collected by the Servicer
hereunder or advanced and distributed to the Purchaser with respect to the
related Mortgage Loan representing payments or recoveries of principal or
advances made in lieu thereof.
Seller: Bank One, N.A., a national banking association, its
successors and assigns.
Seller's Officer's Certificate: A certificate signed by the
Chairman of the Board, President, any Vice President or Treasurer of Seller
stating the date by which Seller expects to receive any missing documents sent
for recording from the applicable recording office.
Servicer: First Chicago NBD Mortgage Company, a Delaware
corporation, its successors and assigns.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, (other than the ordinary expenses of servicing non-defaulted
Mortgage Loans) including, but not limited to, the cost of (a) the
preservation, restoration and protection of a Mortgaged Property, (b) any
enforcement, administrative or judicial proceedings, or any legal work or
advice specifically related to servicing the Mortgage Loans, including but not
limited to, foreclosures, bankruptcies, condemnations, drug seizures,
elections, foreclosures by subordinate or superior lienholders, and other
legal actions incidental to the servicing of the Mortgage Loans (provided that
such expenses are reasonable and that the Servicer specifies the Mortgage
Loan(s) to which such expenses relate, and provided further that any such
enforcement, administrative or judicial proceeding does not arise out of a
breach of any representation, warranty or covenant of the Seller hereunder),
(c) the management and liquidation of any REO Property, (d) taxes,
assessments, water rates, sewer rates and other charges which are or may
become a lien upon the Mortgaged Property, and Primary Mortgage Insurance
Policy premiums and fire and hazard insurance coverage, (e) any expenses
reasonably sustained by the Servicer, with respect to the liquidation of the
Mortgaged Property in accordance with the terms of this Agreement and (f)
compliance with the obligations under Section 4.08. Servicing Advances do not
include the cost of processing any requests for loan modifications by a
Mortgagor, which shall be paid by such Mortgagor.
Servicing Fee: As to each Mortgage Loan, the fee the
Purchaser shall pay to the Servicer for servicing the Mortgage Loans in
accordance with the terms of this Agreement, which shall, with respect to each
Mortgage Loan, for a period of one full or partial month, be equal to one
twelfth of the product of (a) the Servicing Fee Rate and (b) the Scheduled
Principal Balance of such Mortgage Loan as of the first day of the month for
which such fee is being calculated. Such fee shall be payable monthly,
computed on the basis of the same principal amount and same period for which
any related interest payment on a Mortgage Loan is computed. The obligation of
the Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect
to interest from Liquidation Proceeds, to the extent permitted by Section
4.05) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 4.05.
Servicing Fee Rate: 0.25% per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of imaged copies of all documents in the
Mortgage File which are not delivered to the Custodian and copies of the
Mortgage Loan Documents listed in the Custodial Agreement the originals of
which are delivered to 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 Purchaser upon request, as such list may from time to time be amended.
Underwriting Standards: As to each Mortgage Loan, the
Seller's written underwriting guidelines in effect as of the origination date
of the Mortgage Loan(s).
Whole Loan Transfer: As defined in Section 11.01(a)(i).
ARTICLE II
SERVICING OF MORTGAGE LOANS;
RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Agreement to Purchase.
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
the right, title and interest of the Seller in and to the Mortgage Loans,
including all interest and principal accrued on or received by the Seller on
or with respect to the related Mortgage Loans after the Cut-off Date (and
including Monthly Payments due after the Cut-off Date but received by the
Seller on or before the Cut-off Date, but not including payments of principal
and interest due on the Mortgage Loans on or before the Cut-off Date).
Section 2.02 Purchase Price.
The Purchase Price for the Mortgage Loans shall equal the
sum of (a) the percentage of par as stated in the related Purchase Price and
Terms Letter (subject to adjustment as provided therein), multiplied by the
aggregate Scheduled Principal Balance of Mortgage Loans listed on the related
Mortgage Loan Schedule plus (b) accrued interest on such Mortgage Loans from
the Cut-off Date to but not including the Closing Date (the "Purchase Price").
The Purchase Price shall be paid on the Closing Date by wire
transfer of immediately available funds.
With respect to each Mortgage Loan, the Purchaser shall be
entitled to (1) all Scheduled Payments due after the Cut-Off Date, (2) all
other recoveries of principal collected on or after the Cut-off Date
(provided, however, that the principal portion of all Monthly Payments due on
or before the Cut-off Date and collected by the Servicer or any successor
servicer after the Cut-off Date shall belong to the Seller). The Scheduled
Principal Balance of each Mortgage Loan as of the Cut-off Date is determined
after application of payments of principal due on or before the Cut-off Date
whether or not collected, together with any unscheduled Principal Prepayments
collected prior to the Cut-off Date; provided, however, that Monthly Payments
for a Due Date beyond the Cut-off Date shall not be applied to the principal
balance as of the Cut-off Date. Such Monthly Payments shall be the property of
the Purchaser. The Seller shall deposit any such Monthly Payments into the
Custodial Account.
Section 2.03 Servicing of Mortgage Loans.
On the Closing Date, the Mortgage Loans will be sold by the
Seller to the Purchaser on a servicing retained basis.
Simultaneously with the execution and delivery of this
Agreement, the Servicer hereby agrees to service the Mortgage Loans listed on
the Mortgage Loan Schedule in accordance with Accepted Servicing Practices and
this Agreement.
Section 2.04 Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files.
As of the Closing Date, the Seller will have sold,
transferred, assigned, set over and conveyed to the Purchaser, without
recourse, and the Seller hereby acknowledges that the Purchaser will have, all
the right, title and interest of the Seller in and to the Mortgage Loans. In
accordance with Section 2.07, the Seller shall deliver at its own expense, the
Mortgage Files for the related Mortgage Loans to Purchaser or its designee.
The Seller shall retain the related Servicing Files for the related Mortgage
Loans, solely to facilitate its servicing of the Mortgage Loans. The
possession of each Servicing File by the Servicer is at the will of the
Purchaser, for the sole purpose of servicing the related Mortgage Loan, and
such retention and possession by the Servicer is in a custodial capacity only.
From the Closing Date, the ownership of each Mortgage Loan, including the
Mortgage Note, the Mortgage, the contents of the related Mortgage File and all
rights, benefits, proceeds and obligations arising therefrom or in connection
therewith, has been vested in the Purchaser. All rights arising out of the
Mortgage Loans including, but not limited to, all funds received on or in
connection with the Mortgage Loans and all records or documents relating to
the Mortgage Loans prepared by or which come into the possession of the Seller
or Servicer shall be received and held by the Seller or Servicer in trust for
the benefit of the Purchaser as the owner of the Mortgage Loans. The Servicer
shall release its custody of the contents of the Servicing Files only in
accordance with written instructions of the Purchaser, except when such
release is required as incidental to the Servicer's servicing of the Mortgage
Loans or is in connection with a repurchase of any Mortgage Loan or Loans with
respect thereto pursuant to this Agreement, such written instructions shall
not be required.
Section 2.05 Books and Records
The sale of each Mortgage Loan will be reflected on the
Seller's balance sheet and other financial statements as a sale of assets by
the Seller. The Servicer shall maintain a complete set of books and records
for the Mortgage Loans sold by it which shall be appropriately identified in
the Servicer's computer system to clearly reflect the ownership of the
Mortgage Loans by the Purchaser. In particular, the Servicer shall maintain in
its possession, available for inspection by the Purchaser, or its designee and
shall deliver to the Purchaser upon demand, evidence of compliance with all
federal, state and local laws, rules and regulations, and requirements of
Xxxxxx Xxx or Xxxxxxx Mac, as applicable, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by Seller and periodic
inspection reports as required by Section 4.13. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Servicer may be in the form
of microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long as
the Servicer complies with the requirements of the Xxxxxx Mae Guides.
In addition to the foregoing, the Servicer shall provide to
any supervisory agents or examiners that regulate the Purchaser, including but
not limited to, the OTS, the FDIC and other similar entities, access, during
normal business hours, upon reasonable advance notice to the Servicer and
without charge to the Servicer or such supervisory agents or examiners, to any
documentation regarding the Mortgage Loans that may be required by any
applicable regulator.
Section 2.06 Transfer of Mortgage Loans.
The Servicer shall keep at its 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 of
Section 12.12. For the purposes of this Agreement, the Servicer shall be under
no obligation to deal with any person with respect to this Agreement or any
Mortgage Loan unless a properly executed Assignment, Assumption and
Recognition Agreement in the form of Exhibit D with respect to such Mortgage
Loan has been delivered to the Seller and Servicer. Upon receipt of notice of
the transfer, the Servicer shall xxxx its books and records to reflect the
ownership of the Mortgage Loans by such assignee, and the previous Purchaser
shall be released from its obligations hereunder with respect to the Mortgage
Loans sold or transferred.
Section 2.07 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Purchaser or its
designee the Mortgage Loan Documents no later than four (4) Business Days
prior to the Closing Date pursuant to a bailee letter agreement. If the Seller
cannot deliver the original recorded Mortgage Loan Documents on the Closing
Date, the Seller shall, promptly upon receipt thereof and in any case not
later than 120 days from the Closing Date, deliver such original recorded
documents to the Purchaser or its designee (unless the Seller is delayed in
making such delivery by reason of the fact that such documents shall not have
been returned by the appropriate recording office). If delivery is not
completed within 120 days of the Closing Date solely because such documents
shall not have been returned by the appropriate recording office, Seller shall
deliver such document to Purchaser, or its designee, within such time period
as specified in a Seller's Officer's Certificate. The Seller's Officer's
Certificate shall (i) identify the recorded document; (ii) state that the
recorded document has not been delivered to the Custodian due solely to a
delay by the public recording office and (iii) state the amount of time
generally required by the applicable recording office to record and return a
document submitted for recordation. The Seller will be required to deliver the
document to the Custodian within the period of time specified pursuant to
(iii) above. An extension of the period of time specified in (iii) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld or delayed.
In the event that documents have not been received by the
date specified in the Seller's Officer's Certificate, a subsequent Seller's
Officer's Certificate shall be delivered by such date specified in the prior
Seller's Officer's Certificate, stating a revised date for receipt of
documentation. The procedure shall be repeated until the documents have been
received and delivered. The Seller shall use its best efforts to effect
delivery of all delayed recorded documents within 180 days of the Closing
Date.
In addition to the foregoing, if the Seller, the Servicer,
the Purchaser or the Custodian finds any document or documents constituting a
part of a Mortgage File pertaining to a Mortgage Loan to be defective (or
missing) in any material respect, and such defect or missing document
materially and adversely affects the value of the related Mortgage Loan or the
interests of the Purchaser therein, the party discovering such defect shall
promptly so notify the Seller. The Seller shall have a period of 90 days after
receipt of such written notice within which to correct or cure any such
defect.
If the originals or certified copies required in this
Section 2.07 are not delivered as required within 90 days following the
Closing Date or as otherwise extended as set forth above, the related Mortgage
Loan shall, upon request of the Purchaser, be repurchased by the Seller in
accordance with Section 3.04 hereof; provided, however, that the foregoing
repurchase obligation shall not apply in the event the Seller cannot deliver
such items due to a delay caused by the recording office in the applicable
jurisdiction; provided that the Seller shall deliver instead a recording
receipt of such recording office or, if such recording receipt is not
available, an Officer's Certificate from the Seller confirming that such
documents have been accepted for recording. Any such document shall be
delivered to the Purchaser or its designee promptly upon receipt thereof from
the related recording office. Notwithstanding the foregoing, if a defect
constitutes a Qualification Defect, any repurchase must take place within 75
days of the date such defect is discovered.
Notwithstanding the foregoing, with respect to a Mortgage
Loan, if, at the end of such 90-day period, the Seller delivers an Officer's
Certificate to the Purchaser certifying that the Seller is using good faith
efforts to correct or cure such defect and identifying progress made, then the
Purchaser shall grant the Seller an extension to correct or cure such defect.
The extension shall not extend beyond (1) the date that is 75 days after the
date the defect is discovered, or, (2) if the defect is not a Qualification
Defect (as evidenced by an Opinion of Counsel), the date that is 30 days
beyond the original 90-day cure period. If the defect is not a Qualification
Defect, additional 30-day extensions may be obtained pursuant to the same
procedure, as long as the Seller demonstrates continued progress toward a
correction or cure; provided that no extension shall be granted beyond 180
days from the date on which the Seller received the original notice of the
defect.
Pursuant to Section 12.11, the Seller shall be responsible
for recording the Assignments of Mortgage. The Seller shall pay all initial
recording fees, for the Assignments of Mortgage and any other fees in
connection with the transfer of the Mortgage Loan Documents to the Purchaser
or its designee.
No later than five (5) days prior to the related Closing
Date, the Seller shall provide a copy of the commitment for title insurance to
the Purchaser or its designee.
Any review by the Purchaser or its designee of the Mortgage
Files shall in no way alter or reduce the Seller's obligations hereunder.
If the Purchaser or its designee discovers any defect with
respect to any document constituting part of a Mortgage File, the Purchaser
shall, or shall cause its designee to, give written specification of such
defect to the Seller and the Seller shall cure or repurchase such Mortgage
Loan in accordance with Section 3.04.
The Servicer shall forward to the Purchaser, or its
designee, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance
with Section 4.01 or 6.01 within one week of their execution except that in
the case of any document submitted for recordation a certified copy shall be
delivered to the Custodian within 10 days of execution, and an original or a
copy of such document certified by the appropriate public recording office to
be a true and complete copy of the original within five (5) days of its return
from the appropriate public recording office, but in all cases within 60 days,
subject to the extension procedures set forth above.
The failure of the Purchaser to notify the Seller of any
defective or missing document in a Mortgage File within such 90-day period, or
the failure of the Purchaser to require the Seller to cure or repurchase the
related Mortgage Loan upon expiration of such 90-day period, shall not
constitute a waiver of its rights hereunder, including the rights with respect
to a Mortgage Loan, to require the Seller to repurchase the affected Mortgage
Loan and the right to indemnification pursuant to Section 8.01 hereof.
To the extent that the Custodian certifies a any document as
being delivered to it pursuant to the Custodial Agreement in a non-defective
state and such document subsequently becomes missing or defective, the Seller
shall not be obligated to repurchase the related Mortgage Loan by reason of
such missing or defective document, to redeliver such document to the
Custodian or to correct any such defect.
The Seller covenants that with respect to each Mortgage
Loan, it shall maintain in its possession, available for Purchaser's
inspection, and shall deliver to Purchaser on demand, to the extent available,
evidence of compliance with any and all requirements of any federal, state or
local law including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the Mortgage Loan.
Section 2.08 Quality Control Procedures.
The Seller must have an internal quality control program
that verifies the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program must
be capable of evaluating and monitoring the overall quality of its loan
production and servicing activities. The program is to ensure that the
Mortgage Loans are originated and serviced in accordance with prudent mortgage
banking practices and accounting principles; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
Section 2.09 Closing.
The closing for the purchase and sale of the Mortgage Loans
shall take place on the Closing Date. The closing shall be either: by
telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the
Closing Date shall be subject to each of the following conditions:
(a) at least two (2) Business Days prior to the Closing
Date, the Seller shall deliver to the Purchaser a
magnetic diskette, or transmit by modem or e-mail,
a listing on a loan-level basis of the information
required to be contained in the Mortgage Loan
Schedule;
(b) all of the representations and warranties of the
Seller and the Servicer under this Agreement shall
be materially true and correct as of the Closing
Date or, with respect to representations and
warranties made as of a date other than the Closing
Date, as of such date, and no event shall have
occurred which, with notice or the passage of time,
would constitute a material default under this
Agreement;
(c) the Purchaser shall have received, or the
Purchaser's attorneys shall have received in
escrow, all Closing Documents, in such forms as are
agreed upon and acceptable to the Purchaser, duly
executed by all signatories other than the
Purchaser as required pursuant to the terms hereof;
(d) the Seller and the Servicer shall have delivered
and released to the Purchaser (or its designee) on
or prior to the Closing Date all documents required
pursuant to the terms of this Agreement; and
(e) all other terms and conditions of this Agreement
and the Purchase Price and Terms Letters shall have
been materially complied with.
Subject to the foregoing conditions, the Purchaser shall pay
to the Seller on the Closing Date the Purchase Price pursuant to Section 2.02
of this Agreement, by wire transfer of immediately available funds to the
account designated by the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SELLER AND THE SERVICER; REPURCHASE;
REVIEW OF MORTGAGE LOANS
Section 3.01 Examination of Mortgage Files.
Prior to the Closing Date, the Seller shall (a) deliver to
the Purchaser in escrow, for examination, the Mortgage File for each Mortgage
Loan, including a copy of the Assignment of Mortgage, pertaining to each
Mortgage Loan, or (b) make the Mortgage Files available to the Purchaser or
its designee for examination at the Seller's offices or such other location as
shall otherwise be agreed upon by the Purchaser and the Seller. Such
examination may be made by the Purchaser, or by any prospective purchaser of
the Mortgage Loans from the Purchaser, at any time before or after the Closing
Date upon prior reasonable notice to the Seller. The fact that the Purchaser
or any prospective purchaser of the Mortgage Loans has conducted or has failed
to conduct any partial or complete examination of the Mortgage Files shall not
affect the Purchaser's (or any of its successor's) rights to demand
repurchase, substitution or other relief as provided under this Agreement.
Section 3.02 Representations and Warranties of the Seller and the Servicer.
Seller and Servicer (interchangeably, for purposes of this
Section 3.02 only, the "Company"), each represents, warrants and covenants to
the Purchaser that as of the Closing Date as follows:
(a) The Seller is a national banking association duly
organized and validly existing under the laws of the United States. The
Servicer is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. The Company
has all licenses necessary to carry out its business as now being conducted,
and is licensed and qualified to transact business in and is in good standing
under the laws of each state in which any Mortgaged Property is located or is
otherwise exempt under applicable law from such licensing or qualification or
is otherwise not required under applicable law to effect such licensing or
qualification and no demand for such licensing or qualification has been made
upon the Company by any such state, and in any event the Company is in
compliance with the laws of any such state to the extent necessary to ensure
the enforceability of each Mortgage Loan and, as to the Servicer, the
servicing of the Mortgage Loans in accordance with the terms of this
Agreement;
(b) The Company has the full power and authority and legal
right to hold, transfer and convey each Mortgage Loan, to sell each Mortgage
Loan and to execute, deliver and perform, and to enter into and consummate all
transactions contemplated by this Agreement and the related Purchase Price and
Terms Letter and to conduct its business as presently conducted; the Company
has duly authorized the execution, delivery and performance of this Agreement
and any agreements contemplated hereby, has duly executed and delivered this
Agreement and the related Purchase Price and Terms Letter, and any agreements
contemplated hereby, and this Agreement and the related Purchase Price and
Terms Letter and each Assignment of Mortgage to the Purchaser and any
agreements contemplated hereby, constitute the legal, valid and binding
obligations of the Company, enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization and similar laws, and by equitable
principles affecting the enforceability of the rights of creditors; and all
requisite corporate action has been taken by the Company to make this
Agreement , the related Purchase Price and Terms Letter and all agreements
contemplated hereby valid and binding upon the Company in accordance with
their terms;
(c) Neither the origination or acquisition of the Mortgage
Loans by the Seller, the execution and delivery of this Agreement, the related
Purchase Price and Terms Letter, the sale of the Mortgage Loans to the
Purchaser, the consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement
and the related Purchase Price and Terms Letter will conflict with or result
in a breach of any of the terms, conditions or provisions of the Company's
charter or by-laws or materially conflict with or result in a material breach
of any of the terms, conditions or provisions of any legal restriction or any
agreement or instrument to which the Company is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the material violation of any law, rule, regulation,
order, judgment or decree to which the Company or its property is subject or
impair the value of the Mortgage Loans;
(d) There is no action, suit, proceeding or investigation
pending or threatened against the Company 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 Company, or in
any material impairment of the right or ability of the Company to carry on its
business substantially as now conducted, or in any material liability on the
part of the Company, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be contemplated
herein, or which would be likely to impair materially the ability of the
Company to perform under the terms of this Agreement;
(e) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery
and performance by the Company of or compliance by the Company with this
Agreement and the related Purchase Price and Terms Letter, except for
consents, approvals, authorizations and orders which have been obtained;
(f) The consummation of the transactions contemplated by
this Agreement and the related Purchase Price and Terms Letter are in the
ordinary course of business of the Company, which is in the business of
selling and servicing Mortgage Loans, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Company pursuant to
this Agreement and the related Purchase Price and Terms Letter are not subject
to bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction;
(g) The origination and servicing practices with respect to
each Mortgage Note and Mortgage have been legal and in accordance with
applicable laws and regulations, and in all material respects proper and
prudent in the mortgage origination and servicing business. The Servicer
further represents and warrants that: with respect to escrow deposits and
payments that the Servicer is entitled to collect, all such payments are in
the possession of, or under the control of, the Servicer or its delegate, and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made; all escrow payments
have been collected and are being maintained in full compliance with
applicable state and federal law and the provisions of the related Mortgage
Note and Mortgage; as to any Mortgage Loan that is the subject of an escrow,
escrow of funds is not prohibited by applicable law and has been established
in an amount sufficient to pay for every escrowed item that remains unpaid and
has been assessed but is not yet due and payable; no escrow deposits or other
charges or payments due under the Mortgage Note have been capitalized under
any Mortgage or the related Mortgage Note; all Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note; and any interest required to be paid
pursuant to state and local law has been properly paid and credited;
(h) The Seller has not used selection procedures that
identified the Mortgage Loans as being less desirable or valuable than other
comparable mortgage loans in the Company's portfolio at the Cut-off Date;
(i) The Seller will treat the sale of the Mortgage Loans to
the Purchaser as a sale for reporting and accounting purposes and for federal
income tax purposes;
(j) The Company is an approved seller/servicer of
residential mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and HUD, with such
facilities, procedures and personnel necessary for the sound servicing of such
mortgage loans. The Company is duly qualified, licensed, registered and
otherwise authorized under all applicable federal, state and local laws, and
regulations, meets the minimum capital requirements, if applicable, set forth
by the OCC, and is in good standing to sell mortgage loans to and service
mortgage loans for Xxxxxx Mae or Xxxxxxx Mac and no event has occurred which
would make the Company unable to comply with eligibility requirements or which
would require notification to either Xxxxxx Mae or Xxxxxxx Mac;
(k) The Company does not believe, nor does it have any cause
or reason to believe, that it cannot perform each and every covenant contained
in this Agreement and the related Purchase Price and Terms Letter applicable
to it. The Seller is solvent and the sale of the Mortgage Loans will not cause
the Seller to become insolvent. The sale of the Mortgage Loans is not
undertaken with the intent to hinder, delay or defraud any of the Seller's
creditors;
(l) Neither this Agreement nor any statement, tape,
diskette, form, report or other document prepared by, or on behalf of, the
Company pursuant to this Agreement, the related Purchase Price and Terms
Letter or in connection with the transactions contemplated hereby, contains or
will contain any statement that is or will be inaccurate or misleading in any
material respect. The Seller has prudently originated and underwritten each
Mortgage Loan;
(m) The Servicer acknowledges and agrees that the Servicing
Fee represents reasonable compensation for performing such services and that
the entire Servicing Fee shall be treated by the Servicer, for accounting and
tax purposes, as compensation for the servicing and administration of the
Mortgage Loans pursuant to this Agreement;
(n) The Company has delivered to the Purchaser financial
statements as to its last two complete fiscal years. All such financial
statements fairly present the pertinent results of operations and changes in
financial position for each of such periods and the financial position at the
end of each such period of the Company and its subsidiaries and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved, except as set forth in the notes thereto. There has been no change
in the business, operations, financial condition, properties or assets of the
Company since the date of the Company's financial statements that would have a
material adverse effect on its ability to perform its obligations under this
Agreement or the related Purchase Price and Terms Letter;
(o) The Company has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(p) Neither this Agreement nor any statement, report or
other document furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein, in light of the circumstances under which such statements
are made, not misleading.
Section 3.03 Representations and Warranties as to Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser,
as to each Mortgage Loan, as of the Closing Date as follows:
(a) Mortgage Loan Schedule. The information set forth in the
Mortgage Loan Schedule, including any diskette or other related data tapes
sent to the Purchaser, is complete, true and correct in all material respects
as of the Cut-off Date;
(b) First Priority Lien. The Mortgage creates a first lien
or a first priority ownership interest in an estate in fee simple in real
property securing the related Mortgage Note.
(c) Payment History. All payments due on or prior to the
Cut-off Date for such Mortgage Loan have been made; as of the Closing Date,
the Mortgage Loan is not delinquent in payment 30 days or more and has not
been dishonored; there are no material defaults under the terms of the
Mortgage Loan; the Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of
the Mortgaged Property subject to the Mortgage, directly or indirectly, for
the payment of any amount required by the Mortgage Loan; as to each first lien
Mortgage Loan, there has been no more than one delinquency during the
preceding twelve-month period, and such delinquency did not last more than 30
days;
(d) No Outstanding Charges. There are no defaults by the
Seller or Servicer in complying with the terms of the Mortgage Note or
Mortgage. All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;
(e) Original Terms Unmodified. The terms of the Mortgage
Note and the Mortgage have not been impaired, waived, altered or modified in
any respect, except by written instruments which have been recorded to the
extent any such recordation is required by law. No instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, from the terms thereof except in connection
with an assumption agreement and which assumption agreement is part of the
Mortgage File and the terms of which are reflected in the Mortgage Loan
Schedule; the substance of any such waiver, alteration or modification has
been approved by the issuer of any related Primary Mortgage Insurance Policy
and title insurance policy, to the extent required by the related policies. No
Mortagor or Mortgaged Property has been released in whole or in part;
(f) No Defenses. The Mortgage Note and the Mortgage are not
subject to any right of rescission, set-off, counterclaim or defense,
including, without limitation, the defense of usury, nor will the operation of
any of the terms of the Mortgage Note or the Mortgage, or the exercise of any
right thereunder, render the Mortgage Note or Mortgage unenforceable, in whole
or in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto; and
the Mortgagor was not a debtor in any state or federal bankruptcy or
insolvency proceeding at the time the Mortgage Loan was originated;
(g) Insurance. All buildings or other customarily insured
improvements upon the Mortgaged Property are insured by an insurer acceptable
under the Xxxxxx Mae Guides, against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Xxxxxx Xxx Guides
or by Xxxxxxx Mac, as well as all additional requirements set forth in Section
4.10 of this Agreement. All such standard hazard policies are in full force
and effect and on the date of origination contained a standard mortgagee
clause naming the Seller and its successors in interest and assigns as loss
payee and such clause is still in effect and all premiums due thereon have
been paid. Such insurance shall be in an amount not less than the lesser of
100% of the insurable value of the Mortgaged Property and the outstanding
Principal Balance of the Mortgage Loan, but in no event less than the minimum
amount necessary to fully compensate for any damage or loss on a replacement
cost basis. If the Mortgaged Property is a condominium, it is included under
the coverage afforded by a blanket policy for the project. If upon origination
of the Mortgage Loan, the improvements on the Mortgaged Property were in an
area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards, the Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration which policy conforms to Xxxxxx Xxx and
Xxxxxxx Mac requirements, as well as all additional requirements set forth in
Section 4.10 of this Agreement. The amount of such insurance shall be no less
than the least of (A) the outstanding principal balance of the Mortgage Loan,
(B) the full insurable value and (C) the maximum amount of insurance which was
available under the Flood Disaster Protection Act of 1983, as amended. Such
policy was issued by an insurer acceptable under Xxxxxx Mae or Xxxxxxx Mac
guidelines. The Mortgage obligates the Mortgagor thereunder to maintain all
such insurance at the Mortgagor's cost and expense, and upon the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(h) Compliance with Applicable Laws. Any and all
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been complied with in all material respects. All
inspections, licenses, and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been made
or obtained from the appropriate authorities. The Mortgagor has received all
disclosure materials required by applicable law with respect to the making of
such mortgage loans.
(i) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled or subordinated, in whole or in part, or rescinded, and
the Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part nor has any instrument been executed that would effect any
such release, cancellation, subordination or rescission. The Seller has not
waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be in default,
nor has the Seller waived any default resulting from any action or inaction by
the Mortgagor;
(j) Valid First Lien. Each Mortgage is a valid, subsisting,
enforceable and perfected first lien on the Mortgaged Property all buildings
on the Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems affixed to such buildings, and
all additions, alterations and replacements made at any time with respect to
the foregoing securing the Mortgage Note's original Principal Balance. The
Mortgage and the Mortgage Note do not contain any evidence of any security
interest or other interest or right thereto. Such lien is free and clear of
all adverse claims, liens and encumbrances having priority over the first of
the Mortgage is subject only to (1) the lien of non-delinquent current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording which are acceptable to mortgage
lending institutions generally and (A) which are referred to or otherwise
considered in the appraisal made for the originator of the Mortgage Loan and
in form and (B) which do not adversely affect the appraised value of the
Mortgaged Property as set forth in such appraisal, and (3) other matters to
which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage or
the use, enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected first lien and first priority
security interest on the property described therein, and the Seller has the
full right to sell and assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and
the related Mortgage are original and genuine and each is the legal, valid and
binding obligation of the maker thereof, enforceable in all respects in
accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles and the Seller has taken all
action necessary to transfer such rights of enforceability to the Purchaser.
All parties to the Mortgage Note and the Mortgage had the legal capacity to
enter into the Mortgage Loan and to execute and deliver the Mortgage Note and
the Mortgage. The Mortgage Note and the Mortgage have been duly and properly
executed by such parties. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken
place on the part of Seller or the Mortgagor, or, on the part of any other
party involved in the origination of the Mortgage Loan.
(l) Full Disbursement of Proceeds. The proceeds of the
Mortgage Loan have been fully disbursed, except for escrows established or
created due to seasonal weather conditions, and there is no requirement for
future advances thereunder, and any and all requirements as to completion of
any on-site or off-site improvements and as to disbursements of any escrow
funds therefor have been complied with. All costs, fees and expenses incurred
in making or closing the Mortgage Loan and the recording of the Mortgage were
paid or are in the process of being paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller or its affiliate is the sole owner
of record and holder of the Mortgage Loan and the indebtedness evidenced by
the Mortgage Note, and upon recordation the Purchaser or its designee will be
the owner of record of the Mortgage and the indebtedness evidenced by the
Mortgage Note, and upon the sale of the Mortgage Loan to the Purchaser, the
Servicer will retain the Servicing File in trust for the Purchaser only for
the purpose of servicing and supervising the servicing of the Mortgage Loan.
Immediately prior to the transfer and assignment to the Purchaser on the
Closing Date, the Mortgage Loan, including the Mortgage Note and the Mortgage,
were not subject to an assignment or pledge, and the Seller had good and
marketable title to and was the sole owner thereof and had full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest and has
the full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign the Mortgage Loan pursuant
to this Agreement and following the sale of the Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan, except for the purposes of servicing the Mortgage Loan as set
forth in this Agreement;
(n) Title Insurance. Each Mortgage Loan is covered by an
ALTA lender's title insurance policy or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac, issued by a title
insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified to do business
in the jurisdiction where the Mortgaged Property is located, insuring (subject
to the exceptions contained in (j)(1), (2), and (3) above) the Seller, its
successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan. Where required by applicable
state law or regulation, the Mortgagor has been given the opportunity to
choose the carrier of the required mortgage title insurance. The Seller, its
successors and assigns, are the sole insureds of such lender's title insurance
policy, such title insurance policy has been duly and validly endorsed to the
Purchaser or the assignment to the Purchaser of the Seller's interest therein
does not require the consent of or notification to the insurer and such
lender's title insurance policy is in full force and effect and will be in
full force and effect upon the consummation of the transactions contemplated
by this Agreement and the Purchase Price and Terms Letter. No claims have been
made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy;
(o) No Defaults. There is no default, breach, violation or
event of acceleration existing under the Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event permitting acceleration; and neither the Seller nor any prior mortgagee
has waived any default, breach, violation or event permitting acceleration.
(p) No Mechanic's Liens. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no
rights are outstanding that under law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to or of equal
priority with the lien of the related Mortgage;
(q) Location of Improvements; No Encroachments. All
improvements subject to the Mortgage which were considered in determining the
appraised value of the Mortgaged Property lie wholly within the boundaries and
to the best of the Seller's knowledge, building restriction lines of the
Mortgaged Property (and wholly within the project with respect to a
condominium unit) and no improvements on adjoining properties encroach upon
the Mortgaged Property except those which are insured against by the title
insurance policy referred to in clause (m) above and all, to the best of the
Seller's knowledge, improvements on the property comply with all applicable
zoning and subdivision laws and ordinances;
(r) Underwriting. The Mortgage Loan was originated by or for
the Seller. The Mortgage Loan complies with all the terms, conditions and
requirements of the Seller's Underwriting Standards in effect at the time of
origination of such Mortgage Loan. The Mortgage Notes and Mortgages (exclusive
of any riders) are on forms generally acceptable to Xxxxxx Xxx or Xxxxxxx Mac.
Seller is currently selling loans to Xxxxxx Mae and/or Xxxxxxx Mac which are
the same document forms as the Mortgage Notes and Mortgages (inclusive of any
riders). The Mortgage Loan bears interest at the Mortgage Interest Rate set
forth in the Mortgage Loan Schedule, and Monthly Payments under the Mortgage
Note are due and payable on the first day of each month. The Mortgage contains
the usual and enforceable provisions of the originator at the time of
origination for the acceleration of the payment of the unpaid principal amount
of the Mortgage Loan if the related Mortgaged Property is sold without the
prior consent of the mortgagee thereunder.
(s) No Mortgagor Bankruptcy. The Mortgagor is not in
bankruptcy and, the Mortgagor is not insolvent or in bankruptcy and the Seller
has no knowledge of any circumstances or condition with respect to the
Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's credit
standing that could reasonably be expected to cause investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or materially adversely affect the value or marketability of the
Mortgage Loan;
(t) No Damage or Condemnation. The Mortgaged Property is not
subject to any material damage by waste, fire, earthquake, earth movement,
water, tornado, windstorm, flood or other casualty. At origination of the
Mortgage Loan there was, and there currently is, no proceeding pending for the
total or partial condemnation of the Mortgaged Property. There are no
condemnation proceedings pending or threatened for the total or partial
condemnation of the Mortgaged Property and, to the best of the Seller's
knowledge, there are no such proceedings scheduled to commence at a future
date;
(u) Customary Provisions. The Mortgage contains customary
and enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property of
the benefits of the security provided thereby. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage;
(v) Deeds of Trust. If the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified if required under applicable
law to act as such, has been properly designated and currently so serves and
is named in the Mortgage, and no fees or expenses, except as may be required
by local law, are or will become payable by the Purchaser to the trustee under
the deed of trust, except in connection with a trustee's sale or attempted
sale after default by the Mortgagor;
(w) Appraisal. The Mortgage File contains an appraisal of
the related Mortgaged Property signed prior to the final approval of the
mortgage loan application by a Qualified Appraiser, who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on the
security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of FIRREA and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated. The appraisal is in a form acceptable to Xxxxxx Mae or
Xxxxxxx Mac;
(x) Origination / Doing Business. All parties which have had
any interest in the Mortgage, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed of such
interest, were) (A) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is
located, and (B) (1) organized under the laws of such state, or (2) qualified
to do business in such state, or (3) federal savings and loan associations or
national banks or a Federal Home Loan Bank or savings bank having principal
offices in such state, or (4) not doing business in such state;
(y) No Additional Collateral. The related Mortgage Note is
not and has not been secured by any collateral except the lien of the
corresponding Mortgage and the security interest of any applicable security
agreement or chattel mortgage referred to above and such collateral does not
serve as security for any other obligation;
(z) No Fraud.
All the documents executed in connection with the Mortgage
Loan including, but not limited to, the Mortgage Note and the Mortgage are
free of fraud and any misrepresentation, are signed by the persons they
purport to be signed by, and witnessed or, as appropriate, notarized by the
persons whose signatures appear as witnesses or notaries, and each such
document constitutes the valid and binding legal obligation of the signatories
and is enforceable in accordance with its terms;
(aa) No GPMs or Buydowns. The Mortgage Loan does not contain
"graduated payment" features; to the extent any Mortgage Loan contains any
buydown provision, such buydown funds have been maintained and administered in
accordance with, and such Mortgage Loan otherwise complies with, Xxxxxx
Mae/Xxxxxxx Mac requirements relating to buydown loans;
(bb) Payment Terms. The Mortgage Note is payable on the
first day of each month in equal monthly installments of principal and
interest, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years and to pay interest at the related Mortgage
Interest Rate. No Mortgage Loan contains terms or provisions which would
result in negative amortization; no Mortgage Loan is a balloon loan, no
Mortgage Loan is a convertible mortgage loan, and no Mortgage Loan provides
for a shared appreciation feature or other contingent interest. Principal
payments on the Mortgage Loan commenced or will commence no more than sixty
(60) days after the funds were disbursed in connection with the Mortgage Loan.
No Mortgage Loan will have its first payment due later than September 1, 2001.
(cc) Mortgage Insurance. If a Mortgage Loan has an LTV
greater than 80%, the excess of the principal balance of the Mortgage Loan
over 80% of the Appraised Value will have mortgage insurance in accordance
with the terms of the Xxxxxx Mae Guides. Such excess is and will be insured as
to payment defaults by a Primary Mortgage Insurance Policy issued by a
Qualified Insurer. All provisions of such Primary Mortgage Insurance Policy
have been and are being complied with, such policy is in full force and
effect, and all premiums due thereunder have been paid. No action, inaction,
or event has occurred and no state of facts exists that has, or will result in
the exclusion from, denial of, or defense to coverage. Any Mortgage Loan
subject to a Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Mortgage Insurance Policy and to pay all
premiums and charges in connection therewith. The mortgage interest rate for
the Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any
such insurance premium;
(dd) Assignments of Mortgage. As to any Mortgage Loan, the
Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located;
(ee) Location and Type of Mortgaged Property. As to Mortgage
Loans that are not secured by an interest in a leasehold estate, the Mortgaged
Property is located in the state identified in the Mortgage Loan Schedule and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a townhouse, or a two-to four-family dwelling,
or an individual condominium unit in a condominium project, or an individual
unit in a planned unit development or a de minimis planned unit development,
provided, however, that no residence or dwelling is a single parcel of real
property with a cooperative housing corporation erected thereon, or a mobile
home or manufactured dwelling. As of the date of origination, no portion of
the Mortgaged Property was used for commercial purposes, and since the date or
origination no portion of the Mortgaged Property has been used for commercial
purposes;
(ff) Prepayment Penalties. With respect to each Mortgage
Loan that contains a Prepayment Penalty, such Prepayment Penalty is
enforceable and will be enforced by the Seller, and such Prepayment Penalty is
permitted pursuant to federal, state and local law. No Mortgage Loan will
impose a prepayment penalty for a term in excess of five years from the date
such Mortgage Loan was originated. Except as otherwise set forth on the
Mortgage Loan Schedule, with respect to each Mortgage Loan that contains a
Prepayment Penalty, such Prepayment Penalty is at least equal to the lesser of
(A) the maximum amount permitted under applicable law and (B) six months
interest at the related Mortgage Interest Rate on the amount prepaid in excess
of 20% of the original principal balance of such Mortgage Loan;
(gg) Occupation. As of the date of origination of the
Mortgage Loan, the Mortgaged Property was lawfully occupied under applicable
law, and all inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited
to certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities;
(hh) Condominiums or PUDs. If the Mortgaged Property is a
condominium unit or a planned unit development (other than a de minimis
planned unit development), or stock in a cooperative housing corporation, such
condominium, cooperative or planned unit development project meets the
Seller's eligibility requirements as set forth in Seller's underwriting
guidelines;
(ii) Environmental Conditions. To the best of the Seller's
knowledge, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; to the best of the Seller's knowledge, there is no
violation of any environmental law, rule or regulation with respect to the
Mortgaged Property; and, to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such
law, rule or regulation constituting a prerequisite to use and enjoyment of
said property. To the best of the Seller's knowledge, there does not exist on
the related Mortgage Property any hazardous substances, hazardous wastes or
solid wastes, as such terms are defined in the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and
Recovery Act of 1976, or other federal, state or local environmental
legislation;
(jj) Soldiers and Sailors Civil Relief Act. The Mortgagor
has not notified the Seller, and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Soldiers' and Sailors' Civil
Relief Act of 1940;
(kk) Rehabilitation Loans. No Mortgage Loan was made in
connection with the rehabilitation of a Mortgaged Property or facilitating the
trade-in or exchange of a Mortgaged Property;
(ll) PMI - No Defenses. No action has been taken or omitted
to be taken by the Seller on or prior to the Closing Date which action or
omission has resulted or will result in an exclusion from, denial of, or
defense to coverage under any Primary Mortgage Insurance Policy (including,
without limitation, any exclusions, denials or defenses which would limit or
reduce the availability of the timely payment of the full amount of the loss
otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Seller, or for
any other reason under such coverage;
(mm) Collection Practices; Escrow Deposits; Servicing. The
origination and collection practices used with respect to the Mortgage Loan
have been in accordance with Acceptable Servicing Practices, and have been in
all material respects legal and proper, and in accordance with the terms of
the Mortgage Note and Mortgage. All Escrow Payments have been collected in
full compliance with state and federal law. An escrow of funds is not
prohibited by applicable law and has been established to pay for every item
that remains unpaid and has been assessed but is not yet due and payable. No
escrow deposits or Escrow Payments or other charges or payments due the Seller
have been capitalized under the Mortgage Note;
(nn) Origination. The Mortgage Loan was originated by a
mortgagee approved by the Secretary of Housing and Urban Development pursuant
to sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance
company or similar institution which is supervised and examined by a federal
or state authority;
(oo) Ground Leases. With respect to any ground lease to
which a Mortgaged Property may be subject: (i) a true, correct and complete
copy of the ground lease and all amendments, modifications and supplements
thereto is included in the Servicing File, and the Mortgagor is the owner of a
valid and subsisting leasehold interest under such ground lease; (ii) such
ground lease is in full force and effect, unmodified and not supplemented by
any writing or otherwise except as contained in the Mortgage File; (iii) all
rent, additional rent and other charges reserved therein have been fully paid
to the extent payable as of the Closing Date; (iv) the Mortgagor enjoys the
quiet and peaceful possession of the leasehold estate, subject to any
sublease; (v) the Mortgagor is not in default under any of the terms of such
ground lease, and there are no circumstances which, with the passage of time
or the giving of notice, or both, would result in a default under such ground
lease; (vi) the lessor under such ground lease is not in default under any of
the terms or provisions of such ground lease on the part of the lessor to be
observed or performed; (vii) the lessor under such ground lease has satisfied
any repair or construction obligations due as of the Closing Date pursuant to
the terms of such ground lease; (viii) the execution, delivery and performance
of the Mortgage do not require the consent (other than those consents which
have been obtained and are in full force and effect) under, and will not
contravene any provision of or cause a default under, such ground lease; (ix)
the ground lease term extends, or is automatically renewable, for at least ten
years beyond the maturity date of the related Mortgage Loan; and (x) the
Purchaser has notice of, and the right to cure defaults on the ground lease;
(pp) Broker Fees. With respect to any broker fees collected
and paid on any of the Mortgage Loans, all broker fees have been properly
assessed to the borrower and no claims will arise as to broker fees that are
double charged or for which the borrower would be entitled to reimbursement;
(qq) Qualified Mortgage. Each Mortgage Loan constitutes a
qualified mortgage under Section 860G(a)(3)(A) of the Code and Treasury
Regulations Section 1.860G-2(a)(1);
(rr) Delivery. Except as provided in Section 2.07, the
Mortgage Note, the Mortgage, the Assignment of Mortgage and the other
documents set forth in Exhibit A-1 and required to be delivered on the related
Closing Date have been delivered to the Purchaser or its designee;
(ss) Mortgagor Information. All information supplied by, on
behalf of, or concerning the Mortgagor is true, accurate and complete and does
not contain any statement that is or will be inaccurate or misleading in any
material respect;
(tt) Disclosure to Mortgagor. All disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans have been received by the borrower.
(uu) Loan-to-Value Ratio; Foreclosure. No Mortgage Loan had
a Loan-to-Value Ratio at the time of origination of more than 100%; no
Mortgage Loan is subject to a written foreclosure agreement or pending
foreclosure proceedings.
(vv) Home Ownership and Equity Protection Act. None of the
Mortgage Loans are subject to the Home Ownership and Equity Protection Act of
1994 or any comparable state law; and
(ww) Single Premium Credit Insurance. None of the proceeds
of the Mortgage Loan were used to finance single-premium credit insurance
policies.
Section 3.04 Repurchase.
It is understood and agreed that the representations and
warranties set forth in Sections 3.02 and 3.03 shall survive the sale of the
Mortgage Loans and delivery of the Mortgage File to the Purchaser, or its
designee, and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination, or lack of examination, of any Mortgage File. Upon discovery by
the Seller, the Servicer or the Purchaser of a breach of any of the foregoing
representations and warranties which materially and adversely affects the
value of one or more of the Mortgage Loans or the interest of the Purchaser in
any Mortgage Loan, the party discovering such breach shall give prompt written
notice to the others. With respect to the representations and warranties which
are made to the best of the Seller's knowledge, if it is discovered by the
Seller, the Servicer or the Purchaser that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interests of
the Purchaser therein, notwithstanding such Seller's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
The Seller shall have a period of sixty (60) days from the
earlier of its discovery or its receipt of notice of any such breach within
which to correct or cure such breach. The Seller hereby covenants and agrees
that if any such breach is not corrected or cured within such sixty (60) day
period, the Seller shall, at the Purchaser's option and not later than the
next Determination Date, either repurchase such Mortgage Loan at the
Repurchase Price. If any such breach shall involve any representation or
warranty set forth in Section 3.02, and such breach is not cured within sixty
days of the earlier of either discovery by or notice to the Seller of such
breach, all Mortgage Loans shall, at the option of the Purchaser, be
repurchased by the Seller at the Repurchase Price. Any such repurchase shall
be accomplished by deposit in the Custodial Account of the amount of the
Repurchase Price.
At the time of repurchase, the Purchaser and the Seller
shall arrange for the reassignment of the repurchased Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the repurchased Mortgage Loan. In the event of a repurchase, the
Seller shall, simultaneously with such reassignment, give written notice to
the Purchaser that such repurchase has taken place and amend the Mortgage Loan
Schedule to reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement.
In addition to its obligation to cure or repurchase a
defective Mortgage Loan, the Seller shall indemnify the Purchaser and hold it
harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses (excluding, however, punitive damages, loss of profit
damages and exemplary damages) resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the
Seller's representations and warranties contained in this Agreement.
It is understood and agreed that the obligation of the
Seller set forth in this Section 3.04 to cure, repurchase a defective Mortgage
Loan, and to indemnify Purchaser pursuant to this Section and Section 8.01,
constitutes the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties. If the Seller fails to repurchase
for a defective Mortgage Loan in accordance with this Section 3.04, or fails
to cure a defective Mortgage Loan to Purchaser's reasonable satisfaction in
accordance with this Section 3.04, or to indemnify Purchaser pursuant to
Section 8.01, that failure shall, upon compliance by the Purchaser with the
next to the last paragraph of this Section 3.04, be an Event of Default and
the Purchaser shall be entitled to pursue all available remedies. No provision
of this paragraph shall affect the rights of the Purchaser to terminate this
Agreement for cause, as set forth in Section 9.01 or 10.01.
Any cause of action against the Seller relating to or
arising out of the breach of any representations and warranties made in
Sections 3.02 and 3.03 shall accrue as to any Mortgage Loan upon (i) the
earlier of discovery of such breach by the Seller or notice thereof by the
Purchaser to the Seller, (ii) failure by the Seller to cure such breach or
repurchase such Mortgage Loan as specified above, and (iii) demand upon the
Seller by the Purchaser for compliance with this Agreement.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, with respect to any
Mortgage Loan that is not in default or as to which no default is imminent,
Purchaser may, in connection with any repurchase of a Defective Mortgage Loan
pursuant to this Section 3.04, require that the Seller deliver, at the
Seller's expense, an Opinion of Counsel to the effect that such repurchase or
substitution will not (i) result in the imposition of taxes on "prohibited
transactions" of such REMIC (as defined in Section 860F of the Code) or
otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to qualify
as a REMIC at any time.
Section 3.05 Repurchase of Mortgage Loans with Early Payment Default:
If (a) a Mortgagor is thirty (30) days delinquent in respect
to the first Monthly Payment due on the related Mortgage Loan immediately
following the applicable Closing Date or (b) a Mortgage Loan is in bankruptcy
or litigation within the first month immediately following the applicable
Closing Date, the Seller, at the Purchaser's option, shall promptly repurchase
such Mortgage Loan from the Purchaser in accordance with the procedures set
forth in Section 3.04 hereof, however, any such repurchase shall be made at
the Purchase Price.
Section 3.06 Purchase Price Protection.
With respect to any Mortgage Loan that prepays in full
during the two (2) month period from and after the Closing Date, the Seller
shall reimburse the Purchaser the amount (if any) by which the Purchase Price
paid by the Purchaser to the Seller exceeded 100% of the outstanding scheduled
principal balance of the Mortgage Loan as of the Cut-off Date, within thirty
(30) days of such payoff.
Section 3.07 Representations and Warranties of the Purchaser.
Purchaser represents, warrants and covenants to the Seller
and Servicer that as of each Closing Date or as of such date specifically
provided herein:
(a) Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all licenses necessary to carry out its business as now
being conducted, and is licensed and qualified to transact business in and is
in good standing under the laws of each state in which any Mortgaged Property
is located or is otherwise exempt under applicable law from such licensing or
qualification or is otherwise not required under applicable law to effect such
licensing or qualification and no demand for such licensing or qualification
has been made upon the Purchaser by any such state, and in any event the
Purchaser is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of each Mortgage Loan and the servicing
of the Mortgage Loans in accordance with the terms of this Agreement;
(b) The Purchaser has the full power and authority and legal
right to hold, transfer and convey each Mortgage Loan, to sell each Mortgage
Loan and to execute, deliver and perform, and to enter into and consummate all
transactions contemplated by this Agreement and the related Purchase Price and
Terms Letter and to conduct its business as presently conducted; the Purchaser
has duly authorized the execution, delivery and performance of this Agreement
and any agreements contemplated hereby, has duly executed and delivered this
Agreement and the related Purchase Price and Terms Letter, and any agreements
contemplated hereby, and this Agreement and the related Purchase Price and
Terms Letter and any agreements contemplated hereby, constitute the legal,
valid and binding obligations of the Purchaser, enforceable against it in
accordance with their respective terms , except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization and similar
laws, and by equitable principles affecting the enforceability of the rights
of creditors; and all requisite corporate action has been taken by the
Purchaser to make this Agreement , the related Purchase Price and Terms Letter
and all agreements contemplated hereby valid and binding upon the Purchaser
any in accordance with their terms;
(c) Neither the execution and delivery of this Agreement,
the related Purchase Price and Terms Letter, the purchase of the Mortgage
Loans by the Purchaser, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and conditions of
this Agreement and the related Purchase Price and Terms Letter will conflict
with any of the terms, conditions or provisions of the Purchaser's charter or
by-laws or materially conflict with or result in a material breach of any of
the terms, conditions or provisions of any legal restriction or any agreement
or instrument to which the Purchaser is now a party or by which it is bound,
or constitute a default or result in an acceleration under any of the
foregoing, or result in the material violation of any law, rule, regulation,
order, judgment or decree to which the Purchaser or its property is subject;
(d) There is no litigation, suit, proceeding or
investigation pending or threatened, or any order or decree outstanding, which
is reasonably likely to have a material adverse effect on the purchase of the
Mortgage Loans, the execution, delivery, performance or enforceability of this
Agreement or the related Purchase Price and Terms Letter, or which is
reasonably likely to have a material adverse effect on the financial condition
of the Purchaser;
(e) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery
and performance by the Purchaser of or compliance by the Purchaser with this
Agreement and the related Purchase Price and Terms Letter, except for
consents, approvals, authorizations and orders which have been obtained;
(f) The consummation of the transactions contemplated by
this Agreement and the related Purchase Price and Terms Letter are in the
ordinary course of business of the Purchaser;
(g) The Purchaser does not believe, nor does it have any
cause or reason to believe, that it cannot perform each and every covenant
contained in this Agreement and the related Purchase Price and Terms Letter.
The Purchaser is solvent and the purchase of the Mortgage Loans will not cause
the Purchaser to become insolvent;
(h) The Purchaser has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 4.01 The Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall
service and administer the Mortgage Loans in accordance with this Agreement
and with Accepted Servicing Practices, and shall have full power and
authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable and consistent with the terms of this Agreement and
with Accepted Servicing Practices and, if any Mortgage Loan is held by a
REMIC, the REMIC Provisions. The Servicer shall service and administer the
Mortgage Loans through the exercise of the same care that it customarily
employs for its own account. Except as set forth in this Agreement, the
Servicer shall service the Mortgage Loans in strict compliance with the
servicing provisions of the Xxxxxx Xxx Guides, which include, but are not
limited to, provisions regarding the liquidation of Mortgage Loans, the
collection of Mortgage Loan payments, the payment of taxes, insurance and
other charges, the maintenance of hazard insurance with a Qualified Insurer,
the maintenance of mortgage impairment insurance, the maintenance of fidelity
bond and errors and omissions insurance, inspections, the restoration of
Mortgaged Property, the maintenance of Primary Mortgage Insurance Policies,
insurance claims, the title, management of REO Property, permitted withdrawals
with respect to REO Property, liquidation reports, and reports of foreclosures
and abandonments of Mortgaged Property, the transfer of Mortgaged Property,
the release of Mortgage Files, annual statements, and examination of records
and facilities. In the event of any conflict, inconsistency or discrepancy
between any of the servicing provisions of this Agreement and any of the
servicing provisions of the Xxxxxx Mae Guides, the provisions of this
Agreement shall control and be binding upon the Purchaser and the Servicer.
Consistent with the terms of this Agreement, the Servicer
may waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of any such term or in any manner grant indulgence to any
Mortgagor if in the Servicer's reasonable and prudent determination such
waiver, modification, postponement or indulgence is not materially adverse to
the Purchaser (provided, however, that following the transfer of any Mortgage
Loan to a REMIC any waiver or modification shall be consistent with the REMIC
Provisions). In the event of any such modification or waiver 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,
deposit in the Custodial Account from its own funds, in accordance with
Section 4.04, the difference between (a) the otherwise scheduled Monthly
Payment 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 pursuant to Section 4.05. Without limiting the generality of
the foregoing, the Servicer shall continue, and is hereby authorized and
empowered, to prepare, execute and deliver, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties. Notwithstanding anything herein to the contrary, the
Servicer may not enter into a forbearance agreement or similar arrangement
with respect to any Mortgage Loan which runs more than 180 days after the
first delinquent Due Date. Any forbearance agreement shall be approved by any
applicable holder of a Primary Mortgage Insurance Policy, if required.
Unless a different time period is stated in this Agreement,
the Purchaser shall be deemed to have given consent in connection with a
particular matter if the Purchaser does not affirmatively grant or deny
consent within five (5) Business Days from the date the Purchaser receives a
second written request for consent for such matter from the Servicer.
The Servicer shall accurately and fully report its borrower
credit files related to the Mortgage Loans to Equifax, Transunion & Experian
in a timely manner.
Section 4.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the date each
Mortgage Loan ceases to be serviced subject to this Agreement, the Servicer
will proceed diligently to collect all payments due under each Mortgage Loan
when the same shall become due and payable and shall, to the extent such
procedures shall be consistent with this Agreement, Accepted Servicing
Practices, and the terms and provisions of related Primary Mortgage Insurance
Policy, follow such collection procedures as it follows with respect to
mortgage loans comparable to the Mortgage Loans and held for its own account.
Further, the Servicer will take special care in ascertaining and estimating
annual escrow payments, and all other charges that, as provided in the
Mortgage, will become due and payable, so that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due
and payable.
Section 4.03 Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Mortgage Loan
and not postponed pursuant to Section 4.01 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 and any Primary Mortgage Insurance Policies,
and (3) the Servicer shall determine prudently to be in the best interest of
Purchaser. In the event that any payment due under any Mortgage Loan is not
postponed pursuant to Section 4.01 and remains delinquent for a period of 90
days or any other default continues for a period of 90 days beyond the
expiration of any grace or cure period, the Servicer shall, subject to the
provisions of this Agreement, commence foreclosure proceedings. The Servicer
shall notify the Purchaser in writing of the Servicer's intention to do so,
and the Servicer shall not commence foreclosure proceedings if the Purchaser
objects to such action within three (3) Business Days of receiving such
notice. In the event the Purchaser objects to such foreclosure action, the
Servicer shall not be required to make Monthly Advances with respect to such
Mortgage Loan, pursuant to Section 5.03, and the Servicer's obligation to make
such Monthly Advances shall terminate on the 90th day referred to above.
The Servicer shall from its own funds make all necessary and
proper Servicing Advances, provided, however, that the Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration or preservation of any Mortgaged Property, unless it shall
determine in its reasonable discretion (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to Purchaser after reimbursement to itself for such expenses and (b) that
such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 4.05) or through Insurance Proceeds
(respecting which it shall have similar priority).
The Servicer shall obtain prior approval of Purchaser as to
restoration expenses in excess of one thousand dollars ($1,000). The Servicer
shall notify the Purchaser in writing of the commencement of foreclosure
proceedings. The Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings or functions; provided, however, that
it shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 4.05.
Notwithstanding anything to the contrary contained herein,
in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event the Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Purchaser otherwise requests an environmental inspection or review
of such Mortgaged Property, such an inspection or review is to be conducted by
a qualified inspector at the Purchaser's expense. Upon completion of the
inspection, the Servicer shall promptly provide the Purchaser with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the
Purchaser shall determine how the Servicer shall proceed with respect to the
Mortgaged Property. In the event (a) the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes and (b) the Purchaser directs the Servicer to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer
shall be reimbursed for all reasonable costs associated with such foreclosure
or acceptance of a deed in lieu of foreclosure and any related environmental
clean up costs, as applicable, from the related Liquidation Proceeds, or if
the Liquidation Proceeds are insufficient to fully reimburse the Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the Custodial
Account pursuant to Section 4.05 hereof. In the event the Purchaser directs
the Servicer not to proceed with foreclosure or acceptance of a deed in lieu
of foreclosure, the Servicer shall be reimbursed for all Servicing Advances
made with respect to the related Mortgaged Property from the Custodial Account
pursuant to Section 4.05 hereof.
In the event that a Mortgage Loan becomes part of a REMIC,
and becomes REO Property, such property shall be disposed of by the Servicer
in accordance with Section 4.16.
Section 4.04 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
The Servicer shall segregate and hold all funds collected
and received pursuant to each Mortgage Loan separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Custodial Accounts titled "First Chicago NBD Mortgage Company, in trust for
the Purchaser under the Seller's Purchase, Warranties and Servicing Agreement
dated as of August 1, 2001 and/or subsequent purchasers of Mortgage Loans, and
various Mortgagors - P & I." The Custodial Account shall be an Eligible
Account. The Servicer agrees to enter into a securities account control
agreement with the Purchaser and the Qualified Depository under which the
Qualified Depository shall follow instructions exclusively from the Purchaser
regarding the Custodial Account or accounts and including such other terms to
be agreed between the parties thereto. The Funds deposited in a Custodial
Account may be drawn on in accordance with Section 4.05. The creation of any
Custodial Account shall be evidenced by a letter agreement in the form shown
in Exhibit B hereto. The original of such letter agreement shall be furnished
to the Purchaser on the Closing Date, and upon the request of any subsequent
purchaser.
The Servicer shall deposit in the Custodial Account on a
daily basis (within one day of receipt, or within two days of receipt in the
case of clauses (iii) through (vi)), and retain therein the following payments
and collections received or made by it subsequent to the Cut-off Date, or
received by it prior to the Cut-off Date but allocable to a period subsequent
thereto, other than in respect of principal and interest on the Mortgage Loans
due on or before the Cut-off Date:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the
Mortgage Loans;
(iii) all Liquidation Proceeds;
(iv) any amounts required to be deposited by the
Servicer in connection with any REO Property pursuant to
Section 4.16;
(v) all Insurance Proceeds including amounts
required to be deposited pursuant to Sections 4.08, 4.10 and
4.11, other than proceeds to be held in the Escrow Account
and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with
Accepted Servicing Practices, the loan documents or
applicable law;
(vi) all Condemnation Proceeds affecting any
Mortgaged Property which are not released to the Mortgagor
in accordance with the Seller's normal servicing procedures,
the loan documents or applicable law;
(vii) any Monthly Advances;
(viii) all proceeds of any Mortgage Loan
repurchased in accordance with Sections 3.04, 3.05 and 6.02;
(ix) any amounts required to be deposited by the
Servicer pursuant to Section 4.11 in connection with the
deductible clause in any blanket hazard insurance policy,
such deposit shall be made from the Servicer's own funds,
without reimbursement therefor; and
(x) any amounts required to be deposited in the
Custodial Account pursuant to Section 4.01 or Section 6.02.
The foregoing requirements for deposit in the Custodial
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late
payment charges and assumption fees, to the extent permitted by Section 6.01,
need not be deposited by the Servicer in the Custodial Account. Any interest
paid on funds deposited in the Custodial Account by the depository institution
shall accrue to the benefit of the Servicer and the Servicer shall be entitled
to retain and withdraw such interest from the Custodial Account pursuant to
Section 4.05(iv).
Section 4.05 Permitted Withdrawals From the Custodial Account.
The Servicer may, from time to time, withdraw from the
Custodial Account for the following purposes:
(i) to make payments to the Purchaser in the
amounts and in the manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances, the
Servicer's right to reimburse itself pursuant to this
subclause (ii) being limited to amounts received on the
related Mortgage Loan which represent late collections (net
of the related Servicing Fee) of principal and/or interest
respecting which any such advance was made, it being
understood that, in the case of such reimbursement, the
Servicer's right thereto shall be prior to the rights of the
Purchaser, except that, where the Seller is required to
repurchase a Mortgage Loan, pursuant to Sections 3.04, 3.05
or 6.02, the Servicer's right to such reimbursement shall be
subsequent to the Seller's payment to the Purchaser of the
Repurchase Price pursuant to such Section and all other
amounts required to be paid to the Purchaser with respect to
such Mortgage Loan;
(iii) to reimburse itself for unreimbursed
Servicing Advances and any unpaid Servicing Fees, the
Servicer's right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being
limited to related proceeds from Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds or otherwise
relating to the Mortgage Loan in accordance with the
relevant provisions of the Xxxxxx Xxx Guides or as otherwise
set forth in this Agreement, it being understood (A) that
for those Mortgage Loans in foreclosure, the Purchaser shall
reimburse the Servicer for Servicing Advances and Servicing
Fees through the completion of foreclosure and disposition
of the REO Property; such reimbursement shall be monthly
after completion of foreclosure or deed-in-lieu proceedings
and (B) in the case of any such reimbursement, the
Servicer's right thereto shall be prior to the rights of
Purchaser, except that, where the Seller is required to
repurchase a Mortgage Loan pursuant to Section 3.04, 3.05 or
6.02, the Servicer's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase
Price pursuant to such sections and all other amounts
required to be paid to the Purchaser with respect to such
Mortgage Loan;
(iv) to pay to itself as part of its servicing
compensation: (a) any interest earned on funds in the
Custodial Account (all such interest to be withdrawn monthly
not later than each Remittance Date),and (b) the Servicing
Fee from that portion of any payment or recovery of interest
with respect to a particular Mortgage Loan, net of any
amount required to compensate the Purchaser for Prepayment
Interest Shortfalls;
(v) to pay to itself with respect to each Mortgage
Loan that has been repurchased pursuant to Section 3.04,
3.05 or 6.02, all amounts received thereon and not
distributed as of the date on which the related Repurchase
Price is determined;
(vi) to transfer funds to another Eligible Account
in accordance with Section 4.09 hereof;
(vii) to reimburse itself for expenses incurred to
the extent reimbursable pursuant to Section 8.01;
(viii) to pay any amount required to be paid
pursuant to Section 4.16 related to any REO Property, it
being understood that, in the case of any such expenditure
or withdrawal related to a particular REO Property, the
amount of such expenditure or withdrawal from the Custodial
Account shall be limited to amounts on deposit in the
Custodial Account with respect to the related REO Property;
(ix) to reimburse itself for any Monthly Advances,
Servicing Advances or REO expenses after liquidation of the
Mortgaged Property to the extent not otherwise reimbursed
above;
(x) to reimburse the trustee for any Pass-Through
Transfer for any unreimbursed Monthly Advances or Servicing
Advances made by the Trustee, as applicable, the right to
reimbursement pursuant to this subclause (viii) with respect
to any Mortgage Loan being limited to related Liquidation
Proceeds, proceeds of REO Dispositions, 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 such reimbursement, such trustee's right thereto
shall be prior to the rights of the Servicer to
reimbursement under (ii) and (iii), and prior to the rights
of the Purchaser under (i);
(xi) to remove funds inadvertently placed in the
Custodial Account by the Servicer; and
(xii) to clear and terminate the Custodial Account
upon the termination of this Agreement.
Section 4.06 Establishment of Escrow Accounts; Deposits in Accounts.
The Servicer shall segregate and hold all funds collected
and received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts. Each Escrow Account shall
be an Eligible Account, and shall be titled "First Chicago NBD Mortgage
Company, in trust for the Purchaser under the Seller's Purchase, Warranties
and Servicing Agreement dated as of August 1, 2001 and/or subsequent
purchasers of Mortgage Loans, and various Mortgagors - T & I." The Servicer
agrees to enter into a securities account control agreement with the Purchaser
and the Qualified Depository under which the Qualified Depository shall follow
instructions exclusively from the Purchaser regarding the Escrow Accounts and
including such other terms to be agreed between the parties thereto. Funds
deposited in the Escrow Account may be drawn on by the Servicer in accordance
with Section 4.07. The creation of any Escrow Account shall be evidenced by a
letter agreement in the form shown in Exhibit C. The original of such letter
agreement shall be furnished to the Purchaser on the Closing Date, and upon
request to any subsequent purchaser.
The Servicer shall deposit in the Escrow Account or Accounts
on a daily basis, and retain therein:
(i) all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment
of any such items as required under the terms of this
Agreement;
(ii) all Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property; and
(iii) all Servicing Advances of Escrow Payments for
Mortgagors whose Escrow Payments are insufficient to cover
escrow disbursements.
The Servicer shall make withdrawals from the Escrow Account
only to effect such payments as are required under this Agreement, and for
such other purposes as shall be as set forth or in accordance with Section
4.07. The Servicer shall be entitled to retain any interest paid on funds
deposited in an 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 such Escrow Account is non-interest bearing
or that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From the Escrow Account.
Withdrawals from the Escrow Account may be made by the
Servicer only:
(i) to effect timely payments of taxes, Primary
Mortgage Insurance Policy premiums, if applicable, fire and
hazard insurance premiums, and comparable items constituting
Escrow Payments;
(ii) to reimburse the Servicer for any Servicing
Advance made by the Servicer 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 the Mortgagor any funds that may
be determined to be overages;
(iv) for transfer to the Custodial Account in
accordance with the terms of this Agreement or 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 this Agreement;
(vi) to pay to the Servicer, or to the Mortgagor to
the extent required by law, any interest paid on the funds
deposited in the Escrow Account;
(vii) to clear and terminate the Escrow Account on
the termination of this Agreement;
(viii) to pay to the Mortgagors or other parties
Insurance Proceeds deposited in accordance with Section
4.06; and
(ix) to remove funds inadvertently placed in the
Escrow Account by the Servicer.
Section 4.08 Payment of Taxes, Insurance and Charges; Maintenance of
Primary Mortgage Insurance; Collections Thereunder.
With respect to each Mortgage Loan, the Servicer shall
maintain accurate records reflecting the status of taxes and other charges
which are or may become a lien upon the Mortgaged Property and the status of
primary mortgage insurance premiums and fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges,
including renewal premiums and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage or applicable law. To the extent that
the Mortgage does not provide for Escrow Payments, the Servicer shall require
that the Mortgagor make any such payments at the time they first become due.
The Servicer assumes full responsibility for the timely payment of all such
bills and shall effect timely payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make Servicing Advances from its own funds if
necessary to effect such payments.
The Servicer will maintain in full force and effect Primary
Mortgage Insurance Policies issued by a Qualified Insurer with respect to each
Mortgage Loan for which such coverage is herein required. Such coverage will
be maintained until the Loan-to-Value ratio of the related Mortgage Loan is
reduced to 80% or less in the case of a Mortgage Loan having a Loan-to-Value
Ratio at origination in excess of 80% or as required by state or federal law.
The Servicer will not cancel or refuse to renew any Primary Mortgage Insurance
Policy in effect on the Closing Date that is required to be kept in force
under this Agreement unless a replacement Primary Mortgage Insurance Policy
for such canceled or non-renewed policy is obtained from and maintained with a
Qualified Insurer. The Servicer shall not take any action which would result
in non-coverage under any applicable Primary Mortgage Insurance Policy of any
loss which, but for the actions of the Servicer would have been covered
thereunder. In connection with any assumption or substitution agreement
entered into or to be entered into pursuant to Section 6.01, the Servicer
shall promptly notify the insurer under the related Primary Mortgage Insurance
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such policy and shall take all actions which may be required
by such insurer as a condition to the continuation of coverage under the
Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy
is terminated as a result of such assumption or substitution of liability, the
Servicer shall obtain a replacement Primary Mortgage Insurance Policy as
provided above.
Section 4.09 Transfer of Accounts.
Upon five (5) Business Days prior written notice to the
Purchaser, the Servicer may transfer a Custodial Account or an Escrow Account
to a different Eligible Institution(s) from time to time, provided that such
Custodial Account and Escrow Account shall at all times be Eligible Accounts.
Section 4.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage
Loan fire and hazard insurance with extended coverage as is acceptable to
Xxxxxx Mae and Xxxxxxx Mac and customary in the area where the Mortgaged
Property is located in an amount which is equal to the lesser of (i) the
maximum insurable value of the improvements securing such Mortgage Loan and
(ii) the greater of (a) the outstanding principal balance of the Mortgage
Loan, and (b) an amount such that the proceeds thereof shall be sufficient to
prevent the Mortgagor and/or the mortgagee from becoming a co-insurer. In the
event a hazard insurance policy shall be in danger of being terminated, or in
the event the insurer shall cease to be acceptable to Xxxxxx Mae or Xxxxxxx
Mac, the Servicer shall use its best efforts, as permitted by applicable law,
to obtain from another Qualified Insurer a replacement hazard insurance policy
substantially and materially similar in all respects to the original policy.
In no event, however, shall a Mortgage Loan be without a hazard insurance
policy at any time, subject only to Section 4.11 hereof.
If upon origination of the Mortgage Loan, the related
Mortgaged Property was located in an area identified by the Flood Emergency
Management Agency as having special flood hazards, such Mortgage Loan shall be
covered by a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration from an insurance carrier
acceptable to Xxxxxx Mae or Xxxxxxx Mac, in an amount representing coverage
equal to the least 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 Principal Balance of the Mortgage Loan if replacement cost coverage is not
available for the type of building insured) (ii) the maximum insurable value
of the improvements securing such Mortgage Loan and (iii) the maximum amount
of insurance which is available under the Flood Disaster Protection Act of
1973, as amended.
If at any time during the term of the Mortgage Loan, the
Servicer determines in accordance with applicable law and pursuant to the
Xxxxxx Mae 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, and, if permitted by the terms of the Mortgage, the
Servicer shall immediately force place the required flood insurance on the
Mortgagor's behalf.
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, and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in an amount as
provided above. Any amounts collected by the Servicer under any such policies
other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or REO Property, or released
to the Mortgagor in accordance with Accepted Servicing Practices, shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
In the event that any Purchaser 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.
It is understood and agreed that no other additional
insurance need be required by the Servicer or maintained on property acquired
in respect of the Mortgage Loan, other than pursuant to this Agreement, the
Xxxxxx Xxx Guides or such applicable state or federal laws and regulations as
shall at any time be in force and as shall require such additional insurance.
All insurance policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and its successors and/or
assigns and shall provide for at least thirty days prior written notice of any
cancellation, reduction in the amount or material change in coverage to the
Servicer. 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 are Qualified Insurers 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 address of the Mortgaged Property.
Section 4.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a
blanket policy issued by an issuer acceptable to Xxxxxx Mae and/or Xxxxxxx Mac
insuring against hazard losses on all of the Mortgage Loans, then, to the
extent such policy provides coverage in an amount equal to the amount required
pursuant to Section 4.10 and otherwise complies with all other requirements of
Section 4.10, it shall conclusively be deemed to have satisfied its
obligations as set forth in Section 4.10, it being understood and agreed that
such policy may contain a deductible clause, in which case the Servicer shall,
in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with Section 4.10, and
there shall have been a loss which would have been covered by such policy,
deposit in the Custodial Account the amount not otherwise payable under the
blanket policy because of such deductible clause, without reimbursement
therefor. In connection with its activities as servicer of the Mortgage Loans,
the Servicer agrees to prepare and present, on behalf of the Purchaser, claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy. Upon request of the Purchaser, the Servicer shall cause to be
delivered to the Purchaser a certified true copy of such policy and shall use
its best efforts to obtain a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.
The Servicer shall maintain, at its own expense, a Fidelity
Bond, which is also known as a blanket fidelity bond under the Xxxxxx Xxx
Guides, and an errors and omissions insurance policy (an "E&O Policy"), with
broad coverage with responsible companies on all officers, employees or other
persons acting in any capacity with regard to the Mortgage Loans to handle
funds, money, documents and papers relating to the Mortgage Loans. The
Fidelity Bond shall be in the form of a mortgage banker's bond and shall
protect and insure the Servicer against losses, including forgery, theft,
embezzlement and fraud of such persons. The E&O Policy shall protect and
insure the Servicer against losses arising out of errors and omissions and
negligent acts of such persons. Such E&O Policy shall also protect and insure
the Servicer against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 4.12 requiring the
Fidelity Bond or E&O 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 E&O Policy shall be at least equal to the
corresponding amounts required by Xxxxxx Mae in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac in the Xxxxxxx Mac Guides. The Servicer shall deliver to the
Purchaser a certificate from the surety and the insurer as to the existence of
the Fidelity Bond and E&O Policy and shall obtain a statement from the surety
and the insurer that such Fidelity Bond or E&O Policy shall in no event be
terminated or materially modified without thirty (30) days' prior written
notice to the Purchaser. The Seller shall notify the Purchaser within five (5)
business days of receipt of notice that such Fidelity Bond or E&O Policy will
be, or has been, materially modified or terminated. The Purchaser (or any
party having the status of Purchaser hereunder) and any subsidiary thereof and
their successors or assigns as their interests may appear must be named as
certificate holder, which is also known as loss payee under the Xxxxxx Mae
Guides, on the Fidelity Bond and as additional insured on the E&O Policy. Upon
request by the Purchaser, the Servicer shall provide the Purchaser with an
insurance certificate certifying coverage under this Section 4.12, and will
provide an update to such certificate upon request, or upon renewal or
material modification of coverage.
Section 4.13 Inspections.
If any Mortgage Loan is more than 60 days delinquent, the
Servicer immediately shall inspect the Mortgaged Property 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 4.14 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Purchaser
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. For claims
greater than $15,000, at a minimum the Servicer shall comply with the
following conditions in connection with any such release of Insurance Proceeds
or Condemnation Proceeds:
a) The Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any
required approvals with respect thereto;
b) 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;
c) the Servicer shall verify that the Mortgage Loan is not in
default; and
d) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow
Account.
If the Purchaser 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 Purchaser.
Section 4.15 Claims.
In connection with its activities as servicer, the Servicer
agrees to prepare and present, on behalf of itself and the Purchaser, claims
to the insurer in a timely fashion and, in this regard, to take such action as
shall be necessary to permit recovery respecting a defaulted Mortgage Loan.
Pursuant to Section 4.04, any amounts collected by the Servicer under any
guaranty shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is
acquired in foreclosure, by deed in lieu of foreclosure or other method
resulting in full or partial satisfaction of the related Mortgage, the deed or
certificate of sale shall be taken in the name of the Purchaser or its
designee, or in the event the Purchaser or its designee is not authorized or
permitted to hold title to real property in the state where the REO Property
is located, or would be adversely affected under the "doing business" or tax
laws of such state by so holding title, the deed or certificate of sale shall
be taken in the name of such Person or Persons as shall be consistent with an
opinion of counsel obtained by the Servicer from an attorney duly licensed to
practice law in the state where the REO Property is located. Any Person or
Persons holding such title other than the Purchaser shall acknowledge in
writing that such title is being held as nominee for the benefit of the
Purchaser.
The Servicer shall manage, conserve, protect and operate
each REO Property for the Purchaser solely for the purpose of its prompt
disposition and sale. 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
Purchaser.
Purchaser shall be obligated to Servicer for an REO Property
disposition fees for each REO Property, at the time of final liquidation,
equal to 2.00% of the REO Property sales price, subject to a maximum of $5000
per REO Property, provided, that, if the Purchaser terminates the REO process
before sale of the related Mortgaged Property, the Purchaser shall pay the
Servicer a fee of $1500.
The Servicer shall use its best 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 (i) a
REMIC election has not been made with respect to the arrangement under which
the Mortgage Loans and the REO Property are held, and (ii) the Servicer
determines, and gives an appropriate notice to the Purchaser to such effect,
that a longer period is necessary for the orderly liquidation of such REO
Property. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, (i) the Servicer shall
report monthly to the Purchaser as to the progress being made in selling such
REO Property and (ii) if, with the written consent of the Purchaser, a
purchase money mortgage is taken in connection with such sale, such purchase
money mortgage shall name the Servicer as mortgagee, and such purchase money
mortgage shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Servicer and Purchaser shall be entered into
with respect to such purchase money mortgage. If the Mortgage Loan is held by
a REMIC, any sale shall be for cash only unless a Nondisqualification Opinion
shall have been obtained.
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 Purchaser. The proceeds of sale of
the REO Property shall be promptly deposited in the Custodial Account. 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, unpaid Servicing Fees and unreimbursed advances made pursuant to
Section 5.03. On the Remittance Date immediately following the Principal
Prepayment Period in which such sale proceeds are received the net cash
proceeds of such sale remaining in the Custodial Account shall be distributed
to the Purchaser. In addition, if the Mortgage Loan is in a REMIC, such
management shall be conducted in accordance with the REMIC Provisions and in a
manner that does not give rise to a tax on income from foreclosure property
within the meaning of such provisions.
The Servicer shall withdraw the Custodial Account funds
necessary for the proper operation management and maintenance of the REO
Property, including the cost of maintaining any hazard insurance pursuant to
Section 4.10 and the fees of any managing agent of the Servicer, or the
Servicer itself. The Servicer shall make monthly distributions on each
Remittance Date to the Purchaser of the net cash flow from the REO Property
(which shall equal the revenues from such REO Property net of the expenses
described in the Section 4.16 and of any reserves reasonably required from
time to time to be maintained to satisfy anticipated liabilities for such
expenses).
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section
5.02, the Servicer shall furnish to the Purchaser on or before the Remittance
Date each month a statement 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 as the Purchaser
shall reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of
foreclosure, the Servicer shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property.
Section 4.19 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. The Servicer shall file
information reports with respect to the receipt of mortgage interest received
in a trade or business and information returns relating to cancellation of
indebtedness income with respect to any Mortgaged Property as required by the
Code. Such reports shall be in form and substance sufficient to meet the
reporting requirements imposed by the Code.
Section 4.20 Notification of Maturity Date.
With respect to each Mortgage Loan, the Servicer shall
execute and deliver to the Mortgagor any and all necessary notices required
under applicable law and the terms of the related Mortgage Note and Mortgage
regarding the maturity date if required under applicable law.
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01 Distributions.
On each Remittance Date, the Servicer shall distribute by
wire transfer of immediately available funds to the Purchaser (i) all amounts
credited to the Custodial Account as of the close of business on the preceding
Determination Date, net of charges against or withdrawals from the Custodial
Account pursuant to Section 4.05, plus (ii) all Monthly Advances, if any,
which the Servicer is obligated to distribute pursuant to Section 5.03, minus
(iii) any amounts attributable to Monthly Payments collected but due on a Due
Date or Dates subsequent to the preceding Determination Date, which amounts
shall be remitted on the Remittance Date next succeeding the Due Period for
such amounts, and any Principal Prepayments received during the month of such
Remittance Date together with any additional interest required to be deposited
(or not withdrawn from) in the Custodial Account in connection with such
Principal Prepayment in accordance with Section 4.04(viii), which amounts
shall be remitted on the next succeeding Remittance Date.
With respect to any remittance received by the Purchaser
after the Business Day on which such payment was due, the Servicer shall pay
to the Purchaser interest on any such late payment at an annual rate equal to
the Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Custodial Account by
the Servicer on the date such late payment is made and shall cover the period
commencing with the day following the Business Day on which such payment was
due and ending with the Business Day on which such payment is made, both
inclusive. Such interest shall be remitted along with the distribution payable
on the next succeeding Remittance Date. The payment by the Servicer of any
such interest shall not be deemed an extension of time for payment or a waiver
of any Event of Default by the Servicer.
Section 5.02 Statements to the Purchaser.
The Servicer shall furnish to the Purchaser an individual
loan accounting report, as of the last Business Day of each month, in the
Servicer's assigned loan number order to document Mortgage Loan payment
activity on an individual Mortgage Loan basis. With respect to each month, the
corresponding individual loan accounting report shall be received by the
Purchaser no later than the sixth (6th) Business Day of the following month in
hard copy, which report shall contain the following:
(i) With respect to each Monthly Payment, the amount of
such remittance allocable to principal (including a
separate breakdown of any Principal Prepayment,
including the date of such prepayment, and any
Prepayment Penalties or premiums, along with a
detailed report of interest on principal prepayment
amounts remitted in accordance with Section 4.04);
(ii) with respect to each Monthly Payment, the amount of
such remittance allocable to interest;
(iii) the amount of servicing compensation received by
the Servicer during the prior distribution period;
(iv) the aggregate Scheduled Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the
Servicer during the prior distribution period
pursuant to Section 4.05; and
(vi) the number and aggregate outstanding principal
balances of Mortgage Loans (a) delinquent (1) 30 to
59 days, (2) 60 to 89 days, and (3) 90 days or
more; (b) as to which foreclosure has commenced;
and (c) as to which REO Property has been acquired.
The Servicer shall also provide (a) via electronic medium, a
monthly report for the preceding month in the form of Exhibit E-1 hereto, and
(b) via hard copy, a monthly delinquency report in the form of Exhibit E-2
hereto, with each such report.
The Servicer shall prepare and file any and all information
statements or other filings required to be delivered to any governmental
taxing authority or to the Purchaser pursuant to any applicable law with
respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Servicer shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return as the Purchaser may reasonably request from time to
time.
In addition, not more than sixty (60) days after the end of
each calendar year, the Servicer shall furnish to each Person who was a
Purchaser at any time during such calendar year an annual statement in
accordance with the requirements of applicable federal income tax law as to
the aggregate of remittances for the applicable portion of such year.
Section 5.03 Monthly Advances by the Servicer.
Not later than the close of business on the Business Day
preceding each Remittance Date, the Servicer shall deposit in the Custodial
Account an amount equal to all Monthly Payments, whether or not deferred
pursuant to Section 4.01, which were due on a Mortgage Loan on the immediately
preceding Due Date and delinquent at the close of business on the related
Determination Date.
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 payments to the Purchaser required to be
made on such Remittance Date. Notwithstanding the foregoing, the Servicer
shall not be permitted to make any advances from amounts held for future
distribution, and instead shall be required to make all advances from its own
funds, unless the Servicer, its parent, or their respective successors
hereunder shall have a long-term credit rating of at least "A" by Fitch, Inc.,
or the equivalent rating of another Rating Agency.
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 or REO Property;
provided, however, that such obligation shall cease if the Servicer
determines, in its sole reasonable opinion, that advances with respect to such
Mortgage Loan are non-recoverable by the Servicer from Liquidation Proceeds,
Insurance Proceeds, Condemnation Proceeds, or otherwise with respect to a
particular Mortgage Loan. In the event that the Servicer determines that any
such advances are non-recoverable, the Servicer shall provide the Purchaser
with a certificate signed by two officers of the Servicer evidencing such
determination.
Section 5.04 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of
foreclosure, the Servicer shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property. The Servicer shall also provide
reports on the status of REO Property containing such information as the
Purchaser may reasonably require.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Assumption Agreements.
The Servicer shall, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged
Property (whether by absolute conveyance or by contract of sale, and whether
or not the Mortgagor remains or is to remain liable under the Mortgage Note
and/or the Mortgage), exercise its rights to accelerate the maturity of such
Mortgage Loan under any "due-on-sale" clause to the extent permitted by law;
provided, however, that the Servicer shall not exercise any such rights if
prohibited by law or the terms of the Mortgage Note from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related Primary Mortgage Insurance Policy, if any.
If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Servicer will enter
into an assumption agreement with the person to whom the Mortgaged Property
has been conveyed or is proposed to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. If the Servicer is
prohibited under applicable law from (a) entering into an assumption agreement
with the Person to whom the Mortgaged Property has been conveyed or is
proposed to be conveyed or (b) requiring the original Mortgagor to remain
liable under the Mortgage Note, the Servicer, with the prior consent of the
Purchaser and the primary mortgage insurer, if any, is authorized to enter
into a substitution of liability agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as mortgagor and becomes liable under the related Mortgage Note.
Any such substitution of liability agreement shall be in lieu of an assumption
agreement.
In connection with any such assumption or substitution of
liability, the Servicer shall follow the underwriting practices and procedures
of the Xxxxxx Xxx Guides. In connection with any such assumption, neither the
Mortgage Interest Rate borne by the related Mortgage Note, the term of the
Mortgage Loan, the outstanding principal amount of the Mortgage Loan nor any
other materials terms shall be changed without Purchaser's consent. 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.
The Servicer shall notify the Purchaser that any such
substitution of liability or assumption agreement has been completed by
forwarding to the Purchaser the original of any such substitution of liability
or assumption agreement, which document shall be added to the related Mortgage
File and shall, for all purposes, be considered a part of such Mortgage File
to the same extent as all other documents and instruments constituting a part
thereof. All fees collected by the Servicer for entering into an assumption or
substitution of liability agreement shall belong to the Servicer.
Notwithstanding the foregoing paragraphs of this Section or
any other provision of this Agreement, the Servicer shall not be deemed to be
in default, breach or any other violation of its obligations hereunder by
reason of any assumption of a Mortgage Loan by operation of law or any
assumption which the Servicer may be restricted by law from preventing, for
any reason whatsoever. For purposes of this Section 6.01, the term
"assumption" is deemed to also include a sale of the Mortgaged Property
subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the
receipt by the Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes, the Servicer will notify the
Purchaser in the Monthly Remittance Advice that all amounts received or to be
received in connection with such payment which are required to be deposited in
the Custodial Account pursuant to Section 4.04 have been or will be so
deposited, and shall request delivery to it of the portion of the Mortgage
File held by the Purchaser.
If the Servicer satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage,
or should it otherwise prejudice any right the Purchaser may have under the
Mortgage Loan Documents, the Servicer, upon written demand, shall remit within
two (2) Business Days to the Purchaser the then Principal Balance of the
related Mortgage Loan, plus unpaid accrued interest thereon, net of any
outstanding Advances (of Scheduled Payments or Servicing Advances) by deposit
thereof in the Custodial Account.
From time to time and as appropriate for the servicing or
foreclosure of the Mortgage Loans, including for the purpose of collection
under any Primary Mortgage Insurance Policy, the Purchaser shall, upon request
of the Servicer and delivery to the Purchaser of a servicing receipt signed by
a Servicing Officer, release the portion of the Mortgage File held by the
Purchaser to the Servicer. Such servicing receipt shall obligate the Servicer
to return such Mortgage Loan Documents to the Purchaser when the need therefor
by the Servicer no longer exists, unless the Mortgage Loan has been liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Custodial Account or the Mortgage File has been delivered to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for
the foreclosure of the Mortgaged Property either judicially or non-judicially,
and the Servicer has delivered to the Purchaser a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such
Mortgage File was delivered and the purpose or purposes of such delivery. Upon
receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated, the servicing receipt shall be released by the Purchaser
to the Servicer. The Servicer shall indemnify the Purchaser, and its designee,
from and against any and all losses, claims, damages, penalties, fines,
forfeitures, costs and expenses (including court costs and reasonable
attorney's fees) resulting from or related to the loss, damage or misplacement
of any documentation delivered to the Servicer pursuant to this paragraph.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Servicer
shall be entitled to withdraw from the Custodial Account or to retain from
interest payments on the Mortgage Loans the amount of its Servicing Fee,
subject to its obligation to pay Prepayment Interest Shortfalls, up to the
total amount of its Servicing Fee for any Due Period, to the Purchaser. The
Servicing Fee shall be payable monthly and shall be computed on the basis of
the same unpaid scheduled principal balance and for the period respecting
which any related interest payment on a Mortgage Loan is computed. The
obligation of the Purchaser to pay the Servicing Fee is limited to, and
payable solely from, the interest portion of such Monthly Payments.
Additional servicing compensation in the form of assumption
fees, to the extent provided in Section 6.01, and late payment charges 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 6.04 Annual Statement as to Compliance.
The Servicer will deliver to the Purchaser annually within
120 days after the end of the Servicer's fiscal year, beginning with 2001, an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Servicer during the preceding calendar year and of
performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such officers and
the nature and status thereof. Copies of such statement shall be provided by
the Servicer to the Purchaser upon request.
Section 6.05 Annual Independent Certified Public Accountants'
Servicing Report.
Within one hundred twenty (120) days after the end of the
Servicer's fiscal year, beginning in its 2001 fiscal year, the Servicer at its
expense shall cause a firm of independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a
statement to the Purchaser to the effect that such firm has examined certain
documents and records relating to the Servicer's servicing of mortgage loans
of the same type as the Mortgage Loans pursuant to servicing agreements
substantially similar to this Agreement, which agreements may include this
Agreement, and that, on the basis of such an examination, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Servicer's servicing
has been conducted in compliance with the agreements examined pursuant to this
Section 6.05, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement. Copies of such statement shall be provided by the Servicer to the
Purchaser. In addition, on an annual basis, the Servicer shall provide the
Purchaser with copies of its audited financial statements upon execution by
the Purchaser of an agreement to keep confidential the contents of such
financial statements.
Section 6.06 Purchaser's Right to Examine Servicer Records.
The Purchaser or its designee shall have the right to
examine and audit upon reasonable notice to the Servicer, during business
hours or at such other times as might be reasonable under applicable
circumstances, any and all of the books, records, documentation or other
information of the Servicer, or held by another for the Servicer or on its
behalf or otherwise, which relates to the performance or observance by the
Servicer of the terms, covenants or conditions of this Agreement.
The Servicer shall provide to the Purchaser (who may, in
turn, provide to any supervisory agents or examiners representing a state or
federal governmental agency having jurisdiction over the Purchaser, including
but not limited to OTS, FDIC and other similar entities) access to any
documentation regarding the Mortgage Loans in the possession of the Servicer
which may be required by any applicable regulations. Such access shall be
afforded without charge, upon reasonable request, during normal business hours
and at the offices of the Servicer, and in accordance with the federal
government, FDIC, OTS, or any other similar regulations.
Section 6.07 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the
arrangement under which the Mortgage Loans and REO Property are held, the
Servicer shall not take any action, cause the REMIC to take any action or fail
to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon
the REMIC (including but not limited to the tax on "prohibited transactions"
as defined Section 860G(a)(2) of the Code and the tax on "contributions" to a
REMIC set forth in Section 860(D) of the Code) unless the Servicer has
received an Opinion of Counsel (at the expense of the party seeking to take
such action) to the effect that the contemplated action will not endanger such
REMIC status or result in the imposition of any such tax.
Section 6.08 Servicer Shall Provide Information as Reasonably Required.
The Servicer shall furnish to the Purchaser during the term
of this Agreement, at the Purchaser's expense, such periodic, special or other
reports, information or documentation, whether or not provided for herein, as
shall be necessary, reasonable or appropriate in respect to the Purchaser, or
otherwise in respect to the Mortgage Loans and the performance of the Servicer
under this Agreement, including any reports, information or documentation
reasonably required to comply with any regulations regarding any supervisory
agents or examiners of the Purchaser, all such reports or information to be as
provided by and in accordance with such applicable instructions and directions
as the Purchaser may reasonably request in relation to this Agreement or the
performance of the Servicer under this Agreement. The Servicer agrees to
execute and deliver all such instruments and take all such action as the
Purchaser, from time to time, may reasonably request in order to effectuate
the purpose and to carry out the terms of this Agreement.
In connection with marketing the Mortgage Loans, the
Purchaser may make available to a prospective purchaser audited financial
statements of the Seller and the Servicer for the most recently completed two
(2) fiscal years for which such statements are available, as well as a
consolidated statement of condition at the end of the last two (2) fiscal
years covered by any consolidated statement of operations, specifically, such
statements are known as Consolidated Balance Sheets, Consolidated Statements
of Income, Consolidated Statements of Changes in Stockholder's Equity,
Consolidated Statements of Cash Flows, Notes to Consolidated Financial
Statements, and the USAP and Management Assertion letters. If it has not
already done so, the Seller and the Servicer shall furnish promptly to the
Purchaser or a prospective purchaser copies of the statements specified above;
provided, however, that prior to furnishing such statements or information to
any prospective purchaser, the Seller and the Servicer may require such
prospective purchaser to execute a confidentiality agreement in a form
satisfactory to the Seller or Servicer, as applicable.
The Servicer shall make reasonably available to the
Purchaser or any prospective purchaser a knowledgeable financial or accounting
officer for the purpose of answering questions and to permit any prospective
purchaser to inspect the Servicer's servicing facilities for the purpose of
satisfying such prospective purchaser that the Servicer has the ability to
service the Mortgage Loans as provided in this Agreement.
The Servicer shall maintain with respect to each Mortgage
Loan and shall make available for inspection by the Purchaser or its designee
the related Servicing File during the time the Purchaser retains ownership of
a Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
ARTICLE VII
SERVICER TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, on a reasonable basis,
the Servicer shall furnish to the Purchaser such periodic, special, or other
reports or information, and copies or originals of any documents contained in
the Servicing File for each Mortgage Loan provided for herein. All other
special reports or information not provided for herein as shall be necessary,
reasonable, or appropriate with respect to the Purchaser or any regulatory
agency will be provided at the Purchaser's expense. All such reports,
documents or information shall be provided by and in accordance with all
reasonable instructions and directions which the Purchaser may give.
The Servicer shall execute and deliver all such instruments
and take all such action as the Purchaser may reasonably request from time to
time, in order to effectuate the purposes and to carry out the terms of this
Agreement.
Section 7.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the
Purchaser may make available to a prospective Purchaser a Consolidated
Statement of Operations of the Servicer for the most recently completed two
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).
The Servicer also shall make available to Purchaser or
prospective Purchaser 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 Purchaser to inspect the Servicer's servicing facilities for the
purpose of satisfying such prospective Purchaser that the Servicer has the
ability to service the Mortgage Loans as provided in this Agreement.
ARTICLE VIII
THE SELLER AND THE SERVICER
Section 8.01 Indemnification; Third Party Claims.
The Servicer agrees to indemnify the Purchaser and hold it
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
fees and expenses that the Purchaser may sustain in any way related to the
failure of the Servicer to observe and perform its duties, obligations,
covenants, and agreements to service the Mortgage Loans in strict compliance
with the terms of this Agreement. The Seller agrees to indemnify the Purchaser
and hold it harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that the Purchaser may sustain in any way related to
the failure of the Seller to observe and perform its duties, obligations, and
covenants in strict compliance with the terms of this Agreement or as a result
of the breach of a representation or warranty set forth in Sections 3.02 or
3.03 of this Agreement. An indemnifying party hereunder shall immediately
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or a Mortgage Loan, assume (with the consent of the Purchaser, which
consent shall not be unreasonably withheld) the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or the Purchaser in respect of such claim. An indemnifying party hereunder
shall follow any written instructions received from the Purchaser in
connection with such claim. The Purchaser shall promptly reimburse an
indemnifying party hereunder for all amounts advanced by it pursuant to the
two preceding sentences except when the claim results from, relates to, or
arises out of any liability, obligation, act or omission of the Servicer,
including but not limited to the Servicer's or Seller's indemnification
obligation pursuant to this Section 8.01, the Servicer's the failure of the
Servicer to service and administer the Mortgage Loans in compliance with the
terms of this Agreement, the failure of the Seller or Servicer to perform its
duties and obligations pursuant to this Agreement, the breach of
representation or warranty set forth in Sections 3.02 or 3.03, or the
negligence, bad faith or willful misconduct of either the Seller or the
Servicer. The provisions of this Section 8.01 shall survive termination of
this Agreement and transfer of the servicing rights.
Section 8.02 Merger or Consolidation of the Seller or the Servicer.
Each of the Seller and the Servicer shall keep in full
effect its existence, rights and franchises as a corporation under the laws of
the state of its incorporation except as permitted herein, and shall 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 either the Seller or the Servicer may
be merged or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which either the Seller or the Servicer shall
be a party, or any Person succeeding to the business of either the Seller or
the Servicer whether or not related to loan servicing, shall be the successor
of the Seller or of the Servicer, as applicable, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person shall be an institution or (i)
having a GAAP net worth of not less than $25,000,000, (ii) the deposits of
which are insured by the FDIC, SAIF and/or BIF, or which is a HUD-approved
mortgagee whose primary business is in origination and servicing of first lien
mortgage loans, and (iii) who is a Xxxxxx Xxx or Xxxxxxx Mac approved
seller/servicer in good standing. Notwithstanding the foregoing, if the
successor or surviving Person is an institution with a GAAP net worth of less
than $25,000,000, then the Purchaser may, in its sole discretion, waive such
minimum GAAP net worth requirement.
Furthermore, if the Servicer or Seller transfers or
otherwise disposes of all or substantially all of its assets to an affiliate,
such affiliate shall satisfy the condition above, and shall also be fully
liable to the Purchaser for all of the Servicer's or Seller's obligations and
liabilities hereunder. Not withstanding the foregoing, any party to whom the
Seller or Servicer sells or otherwise disposes of all or substantially all of
its property or assets shall become a party to this Agreement.
Section 8.03 Limitation on Liability of the Seller and Others.
None of the Seller, the Servicer nor any of the officers,
employees or agents of the Seller or the Servicer shall be under any liability
to the Purchaser for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment
made in good faith; provided, however, that this provision shall not protect
the Seller, the Servicer or any such person against any breach of warranties
or representations made herein, or failure to perform its obligations in
strict compliance with any standard of care set forth in this Agreement, or
any liability which would otherwise be imposed by reason of negligence, bad
faith or willful misconduct, or any breach of the terms and conditions of this
Agreement. The Seller, the Servicer and any officer, employee or agent of the
Seller and the Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by the Purchaser respecting any
matters arising hereunder. The 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 reasonable opinion may involve it in any expenses or liability;
provided, however, that the Servicer may, with the consent of the Purchaser,
undertake any such action which it may deem necessary or desirable in respect
to this Agreement and the rights and duties of the parties hereto. In such
event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities for
which the Purchaser will be liable, and the Servicer shall be entitled to be
reimbursed therefor from the Purchaser upon written demand.
Section 8.04 Servicer Not to Resign.
The Servicer shall not resign from the obligations and
duties hereby imposed on it except by mutual consent of the Servicer and the
Purchaser or upon the determination that its duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by the
Servicer. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Purchaser which Opinion of Counsel shall be in form and substance acceptable
to the Purchaser. No such resignation shall become effective until a successor
shall have assumed the Servicer's responsibilities and obligations hereunder
in the manner provided in Section 12.01.
Section 8.05 Transfer of Servicing.
With respect to the retention of the Servicer to service the
Mortgage Loans hereunder, the Servicer acknowledges that the Purchaser has
acted in reliance upon the Servicer's independent status, the adequacy of its
servicing facilities, plan, personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any
way limiting the generality of this Section 8.05, but subject to the last
paragraph of this Section 8.05 and Section 8.02, the Servicer shall not either
assign this Agreement or the servicing hereunder or delegate its rights or
duties hereunder or any portion thereof, or sell or otherwise dispose of all
or substantially all of its property or assets, without 30 days' prior written
notice of the Servicer to the Purchaser. The Servicer may assign this
Agreement or the servicing hereunder only (i) to an institution qualified to
service mortgage loans in accordance with the requirements of Section 3.02(j),
(ii) which institution shall have a net worth of at least $25 million; (iii)
which shall comply with the procedures and requirements necessary to transfer
servicing under Section 12.01 here of and (iv) upon receipt of written
confirmation by applicable rating agencies that the assignment or transfer
will not cause a rating of any security backed by a Mortgage Loan to be
downgraded, qualified or withdrawn.
Without in any way limiting the generality of this Section
8.05 or Section 8.04, in the event that the Servicer either shall purport to
assign this Agreement or the servicing responsibilities hereunder or delegate
its duties hereunder or any portion thereof, except with respect to previously
existing outsource vendor relationships (such as existing relationships with
foreclosure, flood and tax service providers), or sell or otherwise dispose of
all or substantially all of its property or assets, without, in each case,
complying with the requirements of this Section 8.05, then the Servicer shall
provide 30 days' prior written notice thereof to the Purchaser and the
Purchaser shall have the right to terminate this Agreement as set forth in
Section 10.02, however, without any payment of any penalty or damages and
without any liability whatsoever to the Servicer (other than with respect to
accrued but unpaid Monthly Advances, Servicing Advances and Servicing Fees
remaining unpaid) or any third party. The Servicer currently maintains vendor
relationships for services typically utilized by large volume servicers in the
mortgage loan servicing industry.
Notwithstanding the foregoing, Purchaser acknowledges and
consents to (a) the delegation by Servicer of its servicing duties hereunder
to its subservicer, Wendover Financial Services Corporation, and (b) the
transfer of the servicing rights in and to the Mortgage Loans (and assignment
of this Agreement with respect to the Servicer) to HomeSide Lending ,Inc.
ARTICLE IX
DEFAULT
Section 9.01 Events of Default.
In case one or more of the following Events of Default by
the Servicer shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit to the
Purchaser any payment required to be made under the
terms of this Agreement which continues unremedied
for a period of three (3) Business Days after the
date upon which written notice of such failure,
requiring the same to be remedied, shall have been
given to the Servicer by the Purchaser; or
(ii) failure on the part of the Servicer (x) duly to
observe or perform in any material respect any
other of the covenants or obligations on the part
of the Servicer set forth in this Agreement, or if
any of the representations and warranties of the
Servicer in Section 3.02 proves to be untrue in any
material respect, which failure or breach continues
unremedied for a period of thirty (30) days (except
that such number of days shall be fifteen (15) in
the case of a failure to pay any premium for any
insurance policy required to be maintained under
this Agreement) after the date on which written
notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by
the Purchaser, or (y) any material failure to
strictly comply with the terms and provisions of
this Agreement which occurs twice in any year or
six times in aggregate; or
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction for the
appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy,
readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such
decree or order shall have remained in force
undischarged or unstayed for a period of sixty (60)
days; or
(iv) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any
insolvency, bankruptcy, readjustment of debt,
marshalling 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
(v) 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, cease
its normal business operations for three Business
Days, or voluntarily suspend payment of its
obligations; or
(vi) the Servicer ceases to be approved by Xxxxxx Xxx or
Xxxxxxx Mac as a mortgage loan seller and servicer
for more than thirty (30) days; or
(vii) the Servicer attempts to assign its right to
servicing compensation hereunder or the Servicer
attempts, 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
violation of Section 8.04 or 8.05; or
(viii) the Servicer ceases to be (a) licensed to service
first lien residential mortgage loans in each
jurisdiction in which a Mortgaged Property is
located and such licensing is required, and (b)
qualified to transact business in any jurisdiction
where it is currently so qualified, but only to the
extent such non-qualification materially and
adversely affects the Servicer's ability to perform
its obligations hereunder;
(ix) the Servicer fails to meet the eligibility criteria
set forth in the second paragraph of Section 8.02;
or
(x) the taking of any action by the Servicer, any
Servicer employee, any Affiliate or any director or
employee thereof that has been determined by any
court, governmental body or arbitrator having
competent jurisdiction to constitute fraud or
criminal activity in the performance of its
obligations under this Agreement or the indictment
of any of the foregoing Persons for criminal
activity related to the mortgage origination or
servicing activities of the Servicer, in each case,
where such indictment materially and adversely
affects the ability of the Servicer to perform its
obligations under this Agreement (subject to the
condition that such indictment is not dismissed
within 90 days).
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, the Purchaser, by notice in writing to the Servicer
may, in addition to whatever rights the Purchaser may have under Sections 3.03
and 8.01 and at law or equity or to damages, including injunctive relief and
specific performance, terminate all the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Servicer for the same.
On or after the receipt by the Servicer of such written
notice of termination, 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 12.01. Upon
written request from the Purchaser, the Servicer shall prepare, execute and
deliver, any and all documents and other instruments, place in such
successor's possession all Servicing Files, and do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of termination, whether to complete the transfer and endorsement or assignment
of the Mortgage Loans and related documents, or otherwise, at the Servicer's
sole expense. The Servicer agrees to cooperate with the Purchaser 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 or any REO Property.
Section 9.02 Waiver of Defaults.
The Purchaser may waive only by written notice any default
by the Servicer in the performance of its obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived in writing.
ARTICLE X
TERMINATION
Section 10.01 Termination.
The respective obligations and responsibilities of the
Servicer shall terminate upon: (i) the later of the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan or
the disposition of all REO Property and the remittance of all funds due
hereunder; (ii) by mutual consent of the Servicer and the Purchaser in
writing; or (iii) termination of the Servicer by the Purchaser with or without
cause under the terms of this Agreement.
Section 10.02 Termination Without Cause.
The Purchaser may, at its sole option, terminate any rights
the Servicer may have hereunder, without cause, upon thirty (30) days written
notice. Any such notice of termination shall be in writing and delivered to
the Servicer as provided in Section 12.04 of this Agreement. In the event of
such termination, the Purchaser agrees to pay the Servicer a termination fee
of one percent (1%) of the Scheduled Principal Balance of the Mortgage Loans
as of the effective date of the transfer, plus the Servicer's costs and
expenses in connection with accommodating such early termination.
ARTICLE XI
RECONSTITUTION OF MORTGAGE LOANS
Section 11.01 Reconstitution of Mortgage Loans.
(a) The Seller and the Servicer acknowledge and the Purchaser
agrees that with respect to some or all of the Mortgage Loans, the Purchaser
may effect either:
(i) one or more sales of the Mortgage Loans as whole
loan transfers (each, a "Whole Loan Transfer");
and/or
(ii) one or more sales of the Mortgage Loans as public
or private pass-through transfers (each, a
"Pass-Through Transfer"),
in either case, retaining the Servicer as the Servicer
thereof or subservicer if a master servicer is employed, or as applicable the
"seller/servicer"; provided, however, that the Purchaser shall use its
reasonable best efforts to give the Servicer 15 Business Days prior written
notice of each such transfer and, in the event Purchaser shall for any reason
be unable to provide such 15 Business Days notice, shall reasonably cooperate
with Servicer in its efforts to minimize any material negative effects of such
failure. From and after the Reconstitution Date, the Mortgage Loans
transferred shall remain covered by this Agreement, insofar as the Servicer
shall continue to service such Mortgage Loans on behalf of the Purchaser in
accordance with the terms and provisions of this Agreement.
(b) With respect to each Whole Loan Transfer or
Pass-Through Transfer, as the case may, the Seller and the Servicer agree:
(i) to cooperate with the Purchaser and any prospective
purchaser with respect to all reasonable requests
and due diligence procedures including
participating in meetings with rating agencies,
bond insurers and such other parties as the
Purchaser shall designate and participating in
meetings with prospective purchasers of the
Mortgage Loans or interests therein and providing
information as reasonably requested by such
purchasers;
(ii) to execute all agreements reasonably required to be
executed by the Servicer in connection with such
Whole Loan Transfer or Pass-Through Transfer
provided that any such agreements be consistent
with the terms hereof and impose no greater duties,
liabilities or obligations upon the Servicer than
those set forth herein and provided that the
Servicer is given an opportunity to review and
reasonably negotiate in good faith the content of
such documents not specifically referenced or
provided for herein;
(iii) to make all the representations and warranties set
forth in Section 3.02 and solely with respect to
the Seller, Section 3.03, as of the date of the
Whole Loan Transfer or Pass-Through Transfer, as
specified in a letter from the Purchaser to the
Seller and the Servicer (substantially in the form
of Exhibit H hereto) indicating the date of the
Whole Loan Transfer or Pass-Through Transfer and
the applicable Mortgage Loans. No other document
need be prepared indicating that the Seller and the
Servicer are making such representations and
warranties as to the applicable Mortgage Loans as
of such date;
(iv) to negotiate and execute one or more master
servicing agreements between the Servicer and any
third party servicer which is servicing loans on
behalf of the Purchaser providing for the Servicer
to master service such Mortgage Loans on behalf of
the Purchaser;
(v) to negotiate and execute one or more subservicing
agreements between the Servicer and any master
servicer which is generally considered to be a
prudent master servicer in the secondary mortgage
market designated by the Purchaser in its sole
discretion after consultation with the Servicer
and/or one or more custodial and servicing
agreements among the Purchaser or an affiliate of
the Purchaser, the Servicer and a third party
custodian/trustee which is generally considered to
be a prudent custodian/trustee in the secondary
mortgage market designated by the Purchaser in its
sole discretion after consultation with the
Servicer, in either case for the purpose of pooling
the Mortgage Loans with other mortgage loans for
resale or securitization;
(vi) with respect to the Servicer, in connection with
any securitization of any Mortgage Loans, to
execute a pooling and servicing agreement, which
pooling and servicing agreement may, at the
Purchaser's direction, contain contractual
provisions including, but not limited to, a 24-day
certificate payment delay (54-day total payment
delay), servicer advances of delinquent scheduled
payments of principal and interest through
liquidation (unless deemed non-recoverable) and
payment of compensating interest with respect to
prepayment interest shortfalls (to the extent of
the monthly servicing fee payable thereto),
servicing and mortgage loan covenants by the Seller
and Servicer additional to those contained in this
agreement which in form and substance conform to
secondary market standards for securities backed by
mortgage loans similar to the Mortgage Loans and
such provisions with regard to servicing
responsibilities, investor reporting, segregation
and deposit of principal and interest payments,
custody of the Mortgage Loans, and other covenants,
representations, and warranties as are reasonably
required by the trustee, any credit enhancement
provider or one or more nationally recognized
rating agencies for "AAA" rated mortgage
pass-through transactions which are "mortgage
related securities" for purposes of the Secondary
Mortgage Market Enhancement Act of 1984, unless
otherwise mutually agreed;
(vii) to provide any and all information and appropriate
verification of information which may be reasonably
available to the Servicer, whether through letters
of its auditors and counsel or otherwise, as the
Purchaser shall request;
(viii) to provide certificates of public officials or
officers of the Servicer as are reasonably believed
necessary by the trustee, any Rating Agency or the
Purchaser, as the case may be, in connection with
such Whole Loan Transfers or Pass-Through
Transfers. The Purchaser shall pay all third party
costs (including all necessary fees and expenses of
external counsel) associated with the preparation
of such information. The Servicer shall execute any
seller/servicer agreements required within a
reasonable period of time after receipt of such
seller/servicer agreements which time shall be
sufficient for the Servicer and Servicer's counsel
to review such seller/servicer agreements. Under
this Agreement, the Servicer shall retain a
servicing fee at a rate per annum equal to no less
than 0.25% per Mortgage Loan;
(ix) to deliver to the Purchaser and to any Person
designated by the Purchaser for inclusion in any
prospectus or other offering material such publicly
available information regarding the Seller and the
Servicer, its financial condition and its mortgage
loan delinquency, foreclosure and loss experience
and any additional information reasonably requested
by the Purchaser, and which the Seller and the
Servicer are capable of providing without
unreasonable effort or expense, and to deliver to
the Purchaser any similar non public, unaudited
financial information (which the Purchaser may, at
its option and at its cost, have audited by
certified public accountants), and to indemnify the
Purchaser and its affiliates for material
misstatements or omissions contained in such
information, and such statements and audit letters
of reputable, certified public accountants
pertaining to information provided by the Seller
and the Servicer pursuant to the above as shall be
reasonably requested by the Purchaser;
(x) the Purchaser shall reimburse the Seller and
Servicer for any and all expenses, costs and fees
incurred by the Seller and Servicer in response to
requests for information or assistance under this
Section.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to the Servicer.
Prior to termination of Servicer's responsibilities and
duties under this Agreement pursuant to Sections 8.05, 9.01, 10.01 or 10.02,
the Purchaser shall (i) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor having the characteristics set forth in Section 8.02
hereof and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
prior to the termination of the Servicer's responsibilities, duties and
liabilities under this Agreement. In connection with such appointment and
assumption, the Purchaser may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as the Purchaser and such
successor shall agree. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned Sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned Sections shall not become
effective until a successor shall be appointed pursuant to this Section and
shall in no event relieve the Servicer or the Seller of the representations
and warranties made pursuant to Sections 3.02 and 3.03 and the remedies
available to the Purchaser under Sections 2.07, 3.04, and 3.05, any
indemnification obligations of the Servicer pursuant to Section 8.01 it being
understood that the provisions of such Sections shall be applicable to the
Servicer and/or the Seller notwithstanding any such sale, assignment,
resignation or termination of the Servicer or the termination of this
Agreement; provided, however, that the Servicer, as Servicer, shall not be
liable hereunder for any acts of omissions occurring subsequent to its
resignation or removal as servicer hereunder or the termination of this
Agreement.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Servicer and to the Purchaser an instrument
accepting such appointment, wherein the successor shall make the
representations and warranties made by the Servicer hereunder, except for the
portion of subsection 3.02(h) relating to the sale of the mortgage loans and
all of subsections (j) and (l) thereof, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer, with like effect as if originally
named as a party to this Agreement. Any termination or resignation of the
Servicer or this Agreement pursuant to Section 8.05, 9.01, 10.01 or 10.02
shall not affect any claims that the Purchaser may have against the Servicer
arising prior to any such termination or resignation.
The Servicer shall promptly deliver to the successor the
funds in the Custodial Account and the Escrow Account and the Mortgage Files
and related documents and statements held by it hereunder and the Servicer
shall account for all funds. The Servicer shall execute and deliver such
instruments and do such other things all as may reasonably be required to more
fully and definitely vest and confirm in the successor all such rights,
powers, duties, responsibilities, obligations and liabilities of the Servicer.
The successor shall make arrangements as it may deem appropriate to reimburse
the Servicer for unrecovered Servicing Advances and advances of Monthly
Payments which the successor retains hereunder and which would otherwise have
been recovered by the Servicer pursuant to this Agreement but for the
appointment of the successor servicer.
Upon a successor's acceptance of appointment as such, the
Servicer shall notify by mail the Purchaser of such appointment in accordance
with the procedures set forth in Section 12.04.
Section 12.02 Amendment.
This Agreement may be amended from time to time by the
Seller, the Servicer and the Purchaser by written agreement signed by the
Seller, the Servicer and the Purchaser.
Section 12.03 Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
conflict of law provisions, except to the extent preempted by Federal law. The
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
Section 12.04 Notices.
Any demands, notices or other communications permitted or
required hereunder shall be in writing and shall be deemed conclusively to
have been given if personally delivered at or mailed by registered mail,
postage prepaid, and return receipt requested or certified mail, return
receipt requested, or transmitted by telex, telegraph, telecopier and
confirmed by a similar mailed writing, as follows:
(i) if to the Seller:
Bank One, N.A.
00000 Xxxxxxx Xxxxx
XX0-0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Vice President -
Secondary Markets
(ii) if to the Servicer:
First Chicago NBD Mortgage Company
00000 Xxxxxxx Xxxxx
XX0-0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx,
First Vice President
(iii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000 Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
Section 12.05 Severability of Provisions.
Any part, provision, covenant, representation or warranty of
this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any
part, provision, representation or warranty of this Agreement which is
prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law
which prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good faith, to
develop a structure the economic effect of which is nearly as possible the
same as the economic effect of this Agreement without regard to such
invalidity.
Section 12.06 Duration of Agreement.
This Agreement shall continue in existence and effect until
terminated as herein provided. This Agreement shall continue notwithstanding
transfers of the Mortgage Loans by the Purchaser.
Section 12.07 Exhibits.
The exhibits to this Agreement are hereby incorporated and
made a part hereof and are an integral part of this Agreement.
Section 12.08 General Interpretive Principles.
For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(i) the terms defined in this Agreement have the
meanings assigned to them in this Agreement and
include the plural as well as the singular, and the
use of any gender herein shall be deemed to include
the other gender;
(ii) accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with
GAAP;
(iii) references herein to "Articles," "Sections,"
Subsections," "Paragraphs," and other subdivisions
without reference to a document are to designated
Articles, Sections, Subsections, Paragraphs and
other subdivisions of this Agreement;
(iv) a reference to a Subsection without further
reference to a Section is a reference to such
Subsection as contained in the same Section in
which the reference appears, and this rule shall
also apply to Paragraphs and other subdivisions;
(v) the words "herein," "hereof," "hereunder," and
other words of similar import refer to this
Agreement as a whole and not to any particular
provision;
(vi) the term "include" or "including" shall mean
without limitation by reason of enumeration; and
(vii) headings of the Articles and Sections in this
Agreement are for reference purposes only and shall
not be deemed to have any substantive effect.
Section 12.09 Reproduction of Documents.
This Agreement and all documents relating thereto,
including, without limitation, (i) consents, waivers and modifications which
may hereafter be executed, (ii) documents received by any party at the
closing, and (iii) financial statements, certificates and other information
previously or hereafter furnished, may be reproduced by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process. The parties agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 12.10 Confidentiality of Information.
Each party recognizes that, in connection with this
Agreement, it may become privy to non-public information regarding the
financial condition, operations and prospects of the other party. Except as
required by law or permitted by this Agreement (including in connection with a
securitization), each party agrees to keep all non-public information
regarding the other party strictly confidential, and to use all such
information solely in order to effectuate the purpose of the Agreement,
provided that each party may provide confidential information to its
employees, agents and affiliates who have a need to know such information in
order to effectuate the transaction, provided further that such information is
identified as confidential non-public information. In addition, confidential
information may be provided to a regulatory authority with supervisory power
over the Purchaser, provided such information is identified as confidential
non-public information.
Section 12.11 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the
Assignments of Mortgage is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated,
and in any other appropriate public recording office or elsewhere, such
recordation to be effected at the Seller's expense in the event recordation is
either necessary under applicable law or requested by the Purchaser at its
sole option.
Section 12.12 Assignment by Purchaser, Seller and Servicer.
The Purchaser shall have the right, without the consent of
the Seller or the Servicer hereof, to assign, in whole or in part, its
interest under this Agreement with respect to some or all of the Mortgage
Loans, and designate any person to exercise any rights of the Purchaser
hereunder, by executing an Assignment, Assumption and Recognition Agreement
substantially in the form of Exhibit D hereto and the assignee or designee
shall accede to the rights and obligations hereunder of the Purchaser with
respect to such Mortgage Loans; provided, however, in no event shall the
Purchaser assign its interest hereunder to more than six (6) different
Persons. In no event shall the Purchaser sell a partial interest in any
Mortgage Loan without the written consent of the Seller, which consent shall
not be unreasonably denied. All references to the Purchaser in this Agreement
shall be deemed to include its assignee or designee. Seller or Servicer may
assign this Agreement to one of its affiliates (provided, in the case of the
Servicer, such assignee satisfies the requirements of a successor Servicer set
forth in Section 8.02) without the consent of the Purchaser.
Section 12.13 No Partnership.
Nothing herein contained shall be deemed or construed to
create a co-partnership or joint venture between the parties hereto and the
services of the Servicer shall be rendered as an independent contractor and
not as agent for Purchaser.
Section 12.14 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same agreement. Subject to Section
8.02, this Agreement shall inure to the benefit of and be binding upon the
Seller, the Servicer and the Purchaser and their respective successors and
assigns, including any trustee appointed in connection with a Pass-Through
Transfer.
Section 12.15 Entire Agreement.
Each of the parties to this Agreement acknowledges that no
representations, agreements or promises were made to any of the other parties
to this Agreement or any of its employees other than those representations,
agreements or promises specifically contained herein. This Agreement and the
related Purchase Price and Terms Letter set forth the entire understanding
between the parties hereto and shall be binding upon all successors of all of
the parties. In the event of any inconsistency between a Purchase Price and
Terms Letter and this Agreement, this Agreement shall control.
Section 12.16 No Solicitation.
From and after the Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of
its agents or affiliates, or by any independent contractors on the Seller's
behalf, to personally, by telephone, by mail, or electronically by e-mail or
through the internet or otherwise, solicit the borrower or obligor under any
Mortgage Loan to refinance the Mortgage Loan, in whole or in part, without the
prior written consent of the Purchaser. It is understood and agreed that all
rights and benefits relating to the solicitation of any Mortgagors to
refinance any Mortgage Loans 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 Purchaser
pursuant hereto on the Closing Date and the Seller shall take no action to
undermine these rights and benefits. Notwithstanding the foregoing, it is
understood and agreed that promotions undertaken by the Seller or any
affiliate of the Seller which are directed to the general public at large, or
segments thereof, provided that no segment shall consist primarily of the
borrowers or obligors under the Mortgage Loans, including, without limitation,
mass mailing based on commercially acquired mailing lists, newspaper, radio
and television advertisements shall not constitute solicitation under this
Section 12.16. This Section 12.16 shall not be deemed to preclude the Seller
or any of its affiliates from soliciting any Mortgagor for any other financial
products or services. The Seller shall use its best efforts to prevent the
sale of the name of any Mortgagor to any Person who is not an affiliate of the
Seller.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
XXXXXXX XXXXX MORTGAGE COMPANY
Purchaser
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
BANK ONE, N.A.
Seller
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Assistant Vice President
FIRST CHICAGO NBD MORTGAGE COMPANY
Servicer
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: First Vice President
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 24th day of August, 2001 before me, a Notary Public in and for
said State, personally appeared Xxxxx X. Xxxx, known to me to be the Vice
President of Xxxxxxx Xxxxx Real Estate Funding Corp., the general partner of
Xxxxxxx Sachs Mortgage Company, the partnership that executed the within
instrument and also known to me to be the person who executed it on behalf of
said partnership, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office
seal the day and year in this certificate first above written.
/s/ Onyx S. Wellington
Notary Public
My Commission expires April 10, 2003
`
STATE OF [ INDIANA ])
) ss:
COUNTY OF [ XXXXXXXX ])
On the 24th day of August, 2001 before me, a Notary Public in and for
said State, personally appeared Xxxxx X. Xxxxxxxxx, known to me to be the
Assistant Vice President of Bank One, N.A., the corporation that executed the
within instrument and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office
seal the day and year in this certificate first above written.
Notary Public /s/ Xxxx Xxx Xxxxxx
My Commission expires 2 - 20 - 09
Exhibit A-1
-----------
Contents of Mortgage File
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items, which shall be available for
inspection by the Purchaser, and which shall be retained by the Seller in
the Servicing File or delivered to the Purchaser or its designee pursuant
to Sections 2.04 and 2.05 of the Seller's Purchase, Warranties and
Servicing Agreement.
1. The original Mortgage Note endorsed "Pay to the order of
___________________ without recourse," and signed in the name of the Seller
by an authorized officer, with all intervening endorsements showing a
complete chain of title from the originator to the Seller. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by
"[Seller], successor by merger to the [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the endorsement must be by "[Seller] formerly known as
[previous name]". If the original note is unavailable, seller will provide
an affidavit of lost note (in form acceptable to the Purchaser) stating
that the original Mortgage Note was lost or destroyed, together with a copy
of such Mortgage Note and indemnifying the Purchaser against any and all
claims arising as a result of any person or entity claiming they are the
holder of the note or that the note has been paid off and returned.
2. A true certified copy, certified by the [title insurer], of
the applicable First Lien.
3. Except as provided below, the original Mortgage with
evidence of recording thereon, or a copy thereof certified by the public
recording office in which such mortgage has been recorded or, if the
original Mortgage has not been returned from the applicable public
recording office, a true certified copy, certified by the [title insurer],
of the original Mortgage together with a certificate of the Seller
certifying that the original Mortgage has been delivered for recording in
the appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located or a copy of the Mortgage certified by the
public recording office in which such Mortgage has been recorded.
4. The original or certified to be a true copy or if in
electronic form identified on the Mortgage Loan Schedule, the certificate
number, certified by the Seller, of the related Primary Mortgage Insurance
Policy or LPMI Policy, if required.
5. In the case of each Mortgage, the original Assignment, from
the Seller in accordance with Purchaser's instructions, which assignment
shall, but for any blanks requested by the Purchaser, be in form and
substance acceptable for recording, or a copy certified by the Seller as a
true and correct copy of the original Assignment which has been sent for
recordation. If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment must be by
"[Seller] formerly known as [previous name]".
6. With respect to Mortgage Loans that are not Co-op Loans, the
original policy of title insurance, including riders and endorsements
thereto, or if the policy has not yet been issued, a written commitment or
interim binder or preliminary report of title issued by the title insurance
or escrow company.
7. Originals of all recorded intervening Assignments, or copies
thereof, certified by the public recording office in which such Assignments
have been recorded showing a complete chain of title from the originator to
the Seller, with evidence of recording thereon, or a copy thereof certified
by the public recording office in which such Assignment has been recorded
or, if the original Assignment has not been returned from the applicable
public recording office, a true certified copy, certified by the [title
insurer] of the original Assignment together with a certificate of the
[title insurer] certifying that the original Assignment has been delivered
for recording in the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located.
8. Originals, or copies thereof certified by the public
recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not been
returned from the applicable public recording office, a true certified
copy, certified by the [title insurer], of such original document together
with certificate of Seller certifying the original of such document has
been delivered for recording in the appropriate recording office of the
jurisdiction in which the Mortgaged Property is located.
9. If the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has been signed by a
person on behalf of the Mortgagor, the original power of attorney or other
instrument that authorized and empowered such person to sign bearing
evidence that such instrument has been recorded, if so required in the
appropriate jurisdiction where the Mortgaged Property is located (or, in
lieu thereof, a duplicate or conformed copy of such instrument, together
with a certificate of receipt from the recording office, certifying that
such copy represents a true and complete copy of the original and that such
original has been or is currently submitted to be recorded in the
appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located), or if the original power of attorney or
other such instrument has been delivered for recording in the appropriate
public recording office of the jurisdiction in which the Mortgaged Property
is located.
10. With respect to a Co-op Loan: (i) a copy of the Co-op Lease
and the assignment of such Co-op Lease to the originator of the Mortgage
Loan, with all intervening assignments showing a complete chain of title
and an assignment thereof by Seller; (ii) the stock certificate together
with an undated stock power relating to such stock certificate executed in
blank; (iii) the recognition agreement in substantially the same form as
standard a "AZTECH" form; (iv) copies of the financial statement filed by
the originator as secured party and, if applicable, a filed UCC-3
Assignment of the subject security interest showing a complete chain of
title, together with an executed UCC-3 Assignment of such security interest
by the Seller in a form sufficient for filing.
11. The original of any guarantee executed in connection with
the Mortgage Note.
12. The original or a certified copy of the lender's title
insurance policy.
Notwithstanding anything to the contrary herein, the Seller may
provide one certificate for all of the Mortgage Loans indicating that the
documents were delivered for recording.
Exhibit A-2
-----------
Contents of Servicing File
With respect to each Mortgage Loan, the Servicing File shall
include each of the following items, which shall be available for
inspection by the Purchaser:
1. Mortgage Loan closing statement (Form HUD-1) and any other
truth-in-lending or real estate settlement procedure forms required by law.
2. Residential loan application.
3. Uniform underwriter and transmittal summary (Xxxxxx Xxx Form
1008) or reasonable equivalent.
4. Credit report on the mortgagor.
5. Business credit report, if applicable.
6. Residential appraisal report and attachments thereto.
7. Verification of employment and income except for Mortgage
Loans originated under a Limited Documentation Program, all in accordance
with Seller's Underwriting Standards.
8. Verification of acceptable evidence of source and amount of
down payment, in accordance with Seller's underwriting guidelines.
9. Photograph of the Mortgaged Property (may be part of
appraisal).
10. Survey of the Mortgaged Property, if any.
11. Sales contract, if applicable.
12. If available, termite report, structural engineer's report,
water portability and septic certification.
13. Any original security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage.
14. Any ground lease, including all amendments, modifications
and supplements thereto.
15. Any other document required to service the Mortgage Loans.
Exhibit B
---------
Form of Custodial Account Letter Agreement
__________________ , 2001
To:
As "Servicer" under the Seller's Purchase, Warranties and
Servicing Agreement, dated as of August 1, 2001 (the "Agreement"), we
hereby authorize and request you to establish an account, as a Custodial
Account pursuant to Section 4.04 of the Agreement, to be designated as
"First Chicago NBD Mortgage Company, in trust for the Purchaser under the
Seller's Purchase, Warranties and Servicing Agreement dated as of August 1,
2001 and/or subsequent purchasers of Mortgage Loans, and various Mortgagors
- P & I.". All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. This letter is submitted to you
in duplicate. Please execute and return one original to us.
-------------------------------------
SERVICER
By:____________________________
Name:__________________________
Title:_________________________
The undersigned, as "Depository," hereby certifies that the
above described account has been established under Account Number
______________, at the office of the depository indicated above, and agrees
to honor withdrawals on such account as provided above.
----------------------------------
By:______________________________
Name:____________________________
Title:___________________________
Exhibit C
Form of Escrow Account Letter Agreement
_____________________, 2001
To:
As "Servicer" under the Seller's Purchase, Warranties and
Servicing Agreement, dated as of August 1, 2001, Whole Loan Series 2001
WL-________ (the "Agreement"), we hereby authorize and request you to
establish an account, as an Escrow Account pursuant to Section 4.06 of the
Agreement, to be designated as "First Chicago NBD Mortgage Company, in
trust for the Purchaser under the Seller's Purchase, Warranties and
Servicing Agreement dated as of August 1, 2001 and/or subsequent purchasers
of Mortgage Loans, and various Mortgagors - T & I.". All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Servicer. This letter is submitted to you in duplicate. Please execute and
return one original to us.
---------------------------------
SERVICER
By:____________________________
Name:__________________________
Title:_________________________
The undersigned, as "Depository," hereby certifies that the
above described account has been established under Account Number
______________, at the office of the depository indicated above, and agrees
to honor withdrawals on such account as provided above.
By:______________________________
Name:____________________________
Title:___________________________
Exhibit D
Form of Assignment, Assumption and Recognition Agreement
This Assignment, Assumption and Recognition Agreement (this
"Assignment Agreement"), dated as of _________, between
__________________________, a ________ corporation (the "Assignor"),
______________________, a ________ corporation (the "Assignee"),
______________ (the "Servicer") and ______________ (the "Seller"):
For good and valuable consideration the receipt and sufficiency
of which hereby are acknowledged, and of the premises and mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to
Assignee all of the right, title and interest of Assignor, as Purchaser,
in, to and under (a) those certain mortgage loans listed on Exhibit A
attached hereto (the "Mortgage Loans"); and (b) the Seller's Purchase,
Warranties and Servicing Agreement dated as of ______, but only to the
extent of the Mortgage Loans (the "Purchase Agreement"). For purposes of
this Assignment Agreement, the term "Purchase Agreement" includes any
separate xxxx of sale, assignment and conveyance or other instrument
pursuant to which Seller and Assignor effectuated the purchase and sale of
any Mortgage Loan following the execution and delivery of the Seller's
Purchase, Warranties and Servicing Agreement dated as of ______.
Notwithstanding the foregoing, it is understood that the Assignor is not
released from liability for any breaches of the representations and
warranties made by the Assignor in the Purchase Agreement and the Assignee
is not undertaking any such liability hereunder.
The Assignor represents and warrants to the Assignee that the
Assignor has not taken any action which would serve to impair or encumber
the Assignor's ownership interest in the Mortgage Loans since the date of
the Purchase Agreement.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under
any all obligations of the Assignor with respect to any mortgage loans
subject to the Purchase Agreement which are not the Mortgage Loans set
forth on Exhibit A attached hereto and are not the subject of this
Assignment Agreement.
2. From and after the date hereof, the Servicer shall note the
transfer of the Mortgage Loans to the Assignee in its books and records,
shall recognize the Assignee as the owner of the Mortgage Loans and shall
service the Mortgage Loans for the benefit of the Assignee pursuant to the
Purchase Agreement, the terms of which are incorporated herein by
reference. It is the intention of the Assignor, Servicer and Assignee that
the Purchase Agreement shall be binding upon and inure to the benefit of
the Servicer and the Assignee and their successors and assigns.
Each of the Seller and the Assignor represent and warrant to
the Assignee that (a) the copy of the Purchase Agreement, attached hereto
as Exhibit B, provided to the Assignee, is a true, complete and accurate
copy of the Purchase Agreement, (b) the Purchase Agreement is in full force
and effect as of the date hereof, (c) the provisions thereof have not been
waived, amended or modified in any respect, nor have any notices of
termination been given thereunder, (d) the Purchase Agreement contains all
of the terms and conditions governing the sale of the Mortgage Loans by
Seller to Assignor and the purchase of the Mortgage Loans by Assignor from
Seller; provided, however, that the date of purchase and sale and the
amount of payment for the Mortgage Loans may be set out in a Purchase Price
and Terms Letter, as defined in the Purchase Agreement, and (e) Seller
sold, conveyed and transferred each Mortgage Loan to Assignor pursuant to
the Purchase Agreement.
3. The Assignor warrants and represents to, and covenants with,
the Assignee and the Seller that:
(a) As of the date hereof, the Assignor is not in default under
the Purchase Agreement;
(b) The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans and any and all of its
interests, rights and obligations under the Purchase Agreement, free from
any and all claims and encumbrances arising out of the Assignor's ownership
thereof, and the Mortgage Loans, as well as the Purchase Agreement, upon
the transfer thereof to the Assignee as contemplated herein, shall be free
and clear of all such liens, claims and encumbrances or any lien claim or
encumbrance arising out of the ownership of the Mortgage Loans by any
person at any time after Assignor first acquired any Mortgage Loan from the
Seller;
(c) The Assignor has not received notice of, and has no
knowledge of, any offsets, counterclaims or other defenses available to the
Seller with respect to the Purchase Agreement or the Mortgage Loans;
(d) The Assignor has not waived or agreed to any waiver under,
or agreed to any amendment or other modification of, the Purchase Agreement
or the Mortgage Loans. The Assignor has no knowledge of, and has not
received notice of, any waivers under or amendments or other modifications
of, or assignments of rights or obligations under or defaults under, the
Purchase Agreement, or the Mortgage Loans;
(e) The Assignor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to sell,
transfer and assign the Mortgage Loans;
(f) The Assignor has full corporate power and authority to
execute, deliver and perform under this Assignment Agreement, and to
consummate the transactions set forth herein. The consummation of the
transactions contemplated by this Assignment Agreement is in the ordinary
course of the Assignor's business and will not conflict with, or result in
a breach of, any of the terms, conditions or provisions of the Assignor's
charter or by-laws, or any legal restriction, or any material agreement or
instrument to which the Assignor is now a party or by which it is bound, or
result in the violation of any law, rule, regulation, order, judgment or
decree to which the Assignor or its property is subject. The execution,
delivery and performance by the Assignor of this Assignment Agreement, and
the consummation by it of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action of the Assignor. This
Assignment Agreement has been duly executed and delivered by the Assignor
and constitutes the valid and legally binding obligation of the Assignor
enforceable against the Assignor in accordance with its respective terms
except as enforceability thereof may be limited by bankruptcy, insolvency,
or reorganization or other similar laws now or hereinafter in effect
relating to creditor's rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or in law;
(g) No material consent, approval, order or authorization of,
or declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Assignor in connection with the
execution, delivery or performance by the Assignor of this Assignment
Agreement, or the consummation by it of the transactions contemplated
hereby; and
(h) The Assignor has paid the purchase price for the Mortgage
Loans and has satisfied any conditions to closing required of it under the
terms of the Purchase Agreement.
4. The Assignee warrants and represents to, and covenants with,
the Assignor and the Seller that:
(a) The Assignee is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to
acquire, own and purchase the Mortgage Loans;
(b) The Assignee has full corporate power and authority to
execute, deliver and perform under this Assignment Agreement, and to
consummate the transactions set forth herein. The consummation of the
transactions contemplated by this Assignment Agreement is in the ordinary
course of the Assignee's business and will not conflict with, or result in
a breach of, any of the terms, conditions or provisions of the Assignee's
charter or by-laws, or any legal restriction, or any material agreement or
instrument to which the Assignee is now a party or by which it is bound, or
result in the violation of any law, rule, regulation, order, judgment or
decree to which the Assignee or its property is subject. The execution,
delivery and performance by the Assignee of this Assignment Agreement, and
the consummation by it of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action of the Assignee. This
Assignment Agreement has been duly executed and delivered by the Assignee
and constitutes the valid and legally binding obligation of the Assignee
enforceable against the Assignee in accordance with its respective terms
except as enforceability thereof may be limited by bankruptcy, insolvency,
or reorganization or other similar laws now or hereinafter in effect
relating to creditor's rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or in law;
(c) No material consent, approval, order or authorization of,
or declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Assignee in connection with the
execution, delivery or performance by the Assignee of this Assignment
Agreement, or the consummation by it of the transactions contemplated
hereby; and
(d) The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Purchase Agreement and the
Mortgage Loans, and from and after the date hereof, the Assignee assumes
for the benefit of each of the Seller and the Assignor all of the
Assignor's obligations as Purchaser thereunder, with respect to the
Mortgage Loans.
5. The Seller warrants and represents to, and covenants with,
the Assignor and the Assignee that:
(a) The Seller is not a natural person or a general partnership
and is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its formation, and has all requisite power and
authority to service the Mortgage Loans;
(b) The Seller has full power and authority to execute, deliver
and perform under this Assignment Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions
contemplated by this Assignment Agreement is in the ordinary course of the
Seller's business and will not conflict with, or result in a breach of, any
of the terms, conditions or provisions of the Seller's charter or by-laws,
or any legal restriction, or any material agreement or instrument to which
the Seller is now a party or by which it is bound, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
the Seller or its property is subject. The execution, delivery and
performance by the Seller of this Assignment Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of the Seller. This Assignment
Agreement has been duly executed and delivered by the Seller and
constitutes the valid and legally binding obligation of the Seller
enforceable against the Seller in accordance with its respective terms
except as enforceability thereof may be limited by bankruptcy, insolvency,
or reorganization or other similar laws now or hereinafter in effect
relating to creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or in law;
(d) No material consent, approval, order or authorization of,
or declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Seller in connection with the
execution, delivery or performance by the Seller of this Assignment
Agreement, or the consummation by it of the transactions contemplated
hereby;
(e) As of the date hereof, the Seller is not in default under
the Purchase Agreement; and
(f) No event has occurred or has failed to occur, during the
period commencing on date on which Assignor acquired the Mortgage Loans and
ending on the date hereof, inclusive, which would make the representations
and warranties set forth in Section 3.02 of the Purchase Agreement untrue
if such representations and warranties were made with respect to the
Mortgage Loans effective as of the date hereof.
Within sixty (60) days of the earlier of either, discovery by
the Seller or notice to the Seller from the Assignee, of a breach of any of
the foregoing representations and warranties with respect to a Mortgage
Loan which materially and adversely affects the value of such Mortgage Loan
or the Assignee's interests therein, the Seller shall use its best efforts
to cure such breach in all material respects and, if such breach is not
cured within such sixty (60) day period, the Seller shall, at the
Assignee's option, repurchase such Mortgage Loan at a price equal to the
unpaid principal balance of the Mortgage Loan as of the date or repurchase,
plus accrued interest thereon to, but not including, the date of
repurchase.
In connection with any repurchase of a Mortgage Loan, the
Assignee shall reassign the provisions of the Purchase Agreement to the
Seller with respect to such Mortgage Loan, and provide for the prompt
delivery of the related custodial file to the Seller or its designee, as
applicable.
6. From and after the date hereof, the Seller shall recognize
the Assignee as the owner of the Mortgage Loans, and shall look solely to
the Assignee for performance from and after the date hereof of the
Assignor's obligations with respect to the Mortgage Loans.
In the event the Servicer has breached a representation or
warranty under the Purchase Agreement that is substantially identical to a
representation or warranty breached by the Assignor hereunder, the Assignee
shall first proceed against the Servicer. If the Servicer does not within
60 days after notification of the breach, take steps to cure such breach
(which may include certifying to progress made and requesting an extension
of the time to cure such breach, as permitted under the Purchase Agreement)
or purchase, or substitute for the Mortgage Loan, the Trustee shall be
entitled to enforce the obligations of the Assignor hereunder to cure such
breach or to purchase the Mortgage Loan from the Trust. In such event, the
Assignor shall succeed to the rights of the Assignee to enforce the
obligations of the Servicer to cure such breach or repurchase such Mortgage
Loan under the terms of the related Purchase Agreement with respect to such
Mortgage Loan
7. Notice Addresses.
(a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement
is:
________________
________________
________________
Attention: ________________
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement
is:
________________
________________
________________
Attention: ________________
(c) The Seller's address for purposes of all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement
is:
________________
________________
________________
Attention: ________________
8. This Assignment Agreement shall be construed in accordance
with the substantive laws of the State of New York (without regard to
conflict of laws principles) and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws,
except to the extent preempted by federal law.
9. This Assignment Agreement shall inure to the benefit of the
successors and assigns of the parties hereto. Any entity into which the
Seller, the Assignor or the Assignee may be merged or consolidated shall,
without the requirement for any further writing, be deemed the Seller, the
Assignor or the Assignee, respectively, hereunder.
10. No term or provision of this Assignment Agreement may be
waived or modified unless such waiver or modification is in writing and
signed by the party against whom such waiver or modification is sought to
be enforced.
11. This Assignment Agreement shall survive the conveyance of
the Mortgage Loans and the assignment of the Purchase Agreement by the
Assignor.
12. Notwithstanding the assignment of the Purchase Agreement by
either the Assignor or Assignee, this Assignment Agreement shall not be
deemed assigned by the Seller or the Assignor unless assigned by separate
written instrument.
13. For the purpose for facilitating the execution of this
Assignment Agreement as herein provided and for other purposes, this
Assignment Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute and be one and the same instrument.
[signatures on following page]
IN WITNESS WHEREOF, the parties have caused this Assignment
Agreement to be executed by their duly authorized officers as of the date
first above written.
______________________________
Assignor
By: ________________________________
Name: ________________________________
Title: ________________________________
______________________________
Assignee
By: ________________________________
Name: ________________________________
Title: ________________________________
______________________________
Seller
By: ________________________________
Name: ________________________________
Title: ________________________________
______________________________
Servicer
By: ________________________________
Name: ________________________________
Title: ________________________________
Exhibit E-1
-----------
Form of Monthly Servicing Report
Servicer investor code
Servicer investor category
Servicer loan ID
Sub-servicer loan ID
Interest rate pending rate
Servicer fee rate
P&I payment amount
Scheduled beginning balance
Scheduled principal
Scheduled gross interest
Curtailment collected amount
Adjustment amount
Service fee amount
PIF principal
PIF Interest Difference
Scheduled net interest
Scheduled ending balance
Seller loan ID
Actual beginning principal balance
Actual principal collected
Actual gross interest collected
Service fee collected
Actual net interest collected
Actual ending principal balance
Remittance amount
Pre-payment penalty amount
Due date
Actual paid date
PIF date
Last paid installment date
Next interest change date
Next P&I change date
Arm Index
Pend Index
Escrow balance
Escrow payment
Mortgage Insurance Certification Number
PMI Company Name
Exhibit E-2
-----------
Monthly Delinquency Report Sample
Borrower Loan Number
Borrower Name
Servicing Fee Rate
Interest Rate
Due Date
Outstanding Principal Balance
Escrow Balance
Monthly P&I Payment
Delinquent Payment Amount
Insurance
Bankruptcy Flag
Delinquency Bucket
State
Servicer will provide information the Purchaser with additional information
related to delinquent loans, loans in foreclosure and REO property as
reasonably requested.
Exhibit F
---------
Mortgage Loan Schedule
See attached
Exhibit G
---------
Request for Release of Documents and Receipt
RE: Mortgage Loan #___________________________________
BORROWER: __________________________________________________
PROPERTY: __________________________________________________
Pursuant to a Seller's Purchase, Warranties and Servicing Agreement (the
"Agreement") between the Seller, the Servicer and the Purchaser, the
undersigned hereby certifies that he or she is an officer of the Servicer
requesting release of the documents for the reason specified below. The
undersigned further certifies that:
(Check one of the items below)
_____ On _________________, the above captioned mortgage loan was
paid in full or the Servicer has been notified that payment in
full has been or will be escrowed.
_____ The above captioned loan is being repurchased pursuant to the
terms of the Agreement. The Servicer hereby certifies that the
repurchase price has been credited to the Custodial Account as
required under the Agreement.
_____ The above captioned loan is being placed in foreclosure and the
original documents are required to proceed with the foreclosure
action. The Servicer hereby certifies that the documents will
be returned to the Purchaser in the event of reinstatement.
_____ Other (explain)
_______________________________________________________
_______________________________________________________
All capitalized terms used herein and not defined shall have the meanings
assigned to them in the Agreement.
Based on this certification and the indemnities provided for in the Agreement,
please release to the Servicer all original mortgage documents in your
possession relating to this loan.
Dated:_________________ By:________________________________
Signature
__________________________________
Title
Send documents to: _____________________________________________
_____________________________________________
_____________________________________________
Acknowledgment:
Purchaser hereby acknowledges that all original documents previously released
on the above captioned mortgage loan have been returned and received by the
Purchaser.
Dated:_________________ By:________________________________
Signature
__________________________________
Title
Exhibit H
---------
Form of Bring Down Letter
[Seller's Letterhead]
_____, 200_
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Re: Seller's Purchase, Warranties and Servicing Agreement,
dated as of August 1, 2001
______________________________________________________
Ladies and Gentlemen:
Reference is made to Section 10.01(b)(iii) of the referenced Seller's
Purchase, Warranties and Servicing Agreement, dated as of August 1, 2001 (the
"Agreement"), among Xxxxxxx Xxxxx Mortgage Company, as Purchaser, Bank One,
N.A., as Seller and First Chicago NBD Mortgage Company, as Servicer.
Capitalized terms used herein and not otherwise defined have the meanings set
forth in the Agreement.
Pursuant to such Section 10.01(b)(iii), we hereby notify you that the
representations and warranties set forth in Sections 3.02 and 3.03 of the
Agreement with respect to the Mortgage Loans identified on Exhibit A hereto
are being remade by us as of ____, 200_ (the "Bring-Down Date").
This letter will be the only document evidencing our obligation to
make the representations and warranties set forth in Sections 3.02 and 3.03
with respect to the Mortgage Loans as of the Bring-Down Date. Reference is
made to Section 3.04 of the Agreement for the procedures to be followed by the
parties to the Agreement in the event of any breach of a representation and
warranty and the remedies therefore.
Very truly yours,
BANK ONE, N.A.
By: _______________________
Name:
Title:
Exhibit I
---------
Form of Opinion of Counsel to Seller
See attached
Exhibit J
---------
Form of Custodial Agreement
See attached