EXECUTION COPY
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
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This is an Assignment, Assumption and Recognition Agreement (this
"Agreement") made this 18th day of December 2000, among Greenwich Capital
Financial Products, Inc. (the "Original Owner"), Bankers Trust Company of
California, N.A., as trustee of HarborView Mortgage Loan Trust 2000-2 (the
"Subsequent Purchaser"), Xxxxxxx Xxxxx Credit Corporation ("MLCC") and Cendant
Mortgage Corporation ("CMC").
RECITALS
A. The mortgage loans listed on Exhibit One hereto (the "MLCC-Serviced
Loans") are currently being serviced by MLCC for the Original Owner pursuant
to the Master Servicing Agreement, dated as of May 13, 1997, as amended on
December 30, 1998 (the "Servicing Agreement"), between the Original Owner and
MLCC, a copy of which is annexed hereto as Exhibit Two.
B. The mortgage loans listed on Exhibit Three hereto (the "CMC-Serviced
Loans") are currently being serviced for the Original Owner by CMC, either as
servicer or subservicer, pursuant to the Servicing Agreement.
C. It is acknowledged by the parties hereto that the servicing rights and
obligations with respect to those certain MLCC-Serviced Loans listed on
Exhibit Four hereto (the "Designated Loans") will be assigned by MLCC to CMC
on or about March 1, 2001, whereupon CMC shall service the Designated Loans
pursuant to the terms of the Servicing Agreement. Upon such assignment, the
Designated Loans shall be deemed to be "CMC-Serviced Loans" hereunder and
shall no longer be deemed "MLCC-Serviced Loans" hereunder.
D. In consideration of the mutual promises contained herein the parties
hereto agree that the MLCC-Serviced Loans and the CMC-Serviced Loans shall be
subject to the terms of this Agreement.
Warranties
----------
1. The Original Owner and MLCC mutually warrant and represent that, with
respect to the MLCC-Serviced Loans, the Servicing Agreement is in full force
and effect as of the date hereof and has not been amended or modified in any
way with respect to the MLCC-Serviced Loans and no notice of termination has
been given thereunder.
2. The Original Owner and CMC mutually warrant and represent that, with
respect to the CMC-Serviced Loans, the Servicing Agreement is in full force
and effect as of the date hereof and has not been amended or modified in any
way with respect to the CMC-Serviced Loans (except, in connection with the
CMC-Serviced Loans, to the extent that CMC shall be deemed to be the
"servicer" under the Servicing Agreement) and no notice of termination has
been given thereunder.
Assignment and Assumption
-------------------------
3. The Original Owner hereby assigns to the Subsequent Purchaser all of
its right, title and interest in and to the Servicing Agreement as the "Owner"
thereunder to the extent of the MLCC-Serviced Loans and the CMC-Serviced
Loans, and the Subsequent Purchaser hereby assumes, solely as trustee of
HarborView Mortgage Loan Trust 2000-2 and not in its individual capacity, all
of the Original Owner's right, title and interest in and to (including,
without limitation, the Original Owner's obligations under) the Servicing
Agreement as the "Owner" thereunder (excluding those obligations contained in
Sections 7.01 and 7.02 of the Servicing Agreement) to the extent of the
MLCC-Serviced Loans and the CMC-Serviced Loans from and after the date hereof,
and the Original Owner shall be relieved and released of all of its
obligations under the Servicing Agreement to the extent of the MLCC-Serviced
Loans and the CMC-Serviced Loans from and after the date hereof.
Recognition of the Subsequent Purchaser
---------------------------------------
4. From and after the date hereof, MLCC shall recognize the Subsequent
Purchaser as the owner of the MLCC-Serviced Loans and will service the
MLCC-Serviced Loans for the Subsequent Purchaser as if the Subsequent
Purchaser and MLCC had entered into a separate servicing agreement for the
servicing of the MLCC-Serviced Loans in the form of the Servicing Agreement
with the Subsequent Purchaser as the "Owner" thereunder, the terms of which
Servicing Agreement are incorporated herein by reference. It is the intention
of the Original Owner, MLCC and the Subsequent Purchaser that this Agreement
will be a separate and distinct servicing agreement with respect to the
MLCC-Serviced Loans, and the entire agreement between MLCC and the Subsequent
Owner to the extent of the MLCC-Serviced Loans and shall be binding upon and
for the benefit of their respective successors and assigns.
5. From and after the date hereof, CMC shall recognize the Subsequent
Purchaser as the owner of the CMC-Serviced Loans and will service the
CMC-Serviced Loans for the Subsequent Purchaser as if the Subsequent Purchaser
and CMC had entered into a separate servicing agreement for the servicing of
the CMC-Serviced Loans in the form of the Servicing Agreement with the
Subsequent Purchaser as the "Owner" thereunder, the terms of which Servicing
Agreement are incorporated herein by reference. It is the intention of the
Original Owner, CMC and the Subsequent Purchaser that this Agreement will be a
separate and distinct servicing agreement with respect to the CMC-Serviced
Loans, and the entire agreement between CMC and the Subsequent Owner to the
extent of the CMC-Serviced Loans and shall be binding upon and for the benefit
of their respective successors and assigns.
6. The parties hereto hereby agree that, from and after the date hereof,
the definition of "Determination Date" in the Servicing Agreement, as it
relates to the MLCC-Serviced Loans and the CMC-Serviced Loans, shall be
amended to read as follows:
"The fifth Business Day prior to the 18th day of the month
of the Related Remittance Date, or if such 18th day is not a
Business Day, the Business Day immediately following such
18th day."
7. MLCC and CMC agree that, from and after the date hereof, all amounts
required to be remitted or distributed by MLCC and CMC to the Subsequent
Purchaser as "Owner" under the Servicing Agreement shall be remitted pursuant
to the account held at Bankers Trust Company of California, N.A., entitled
"Distribution Account, Bankers Trust Company of California, N.A., as Trustee,
in trust for the registered Certificateholders of HarborView Mortgage Loan
Trust 2000-2, Mortgage Loan Pass-Through Certificates, Series 2000-2", and
bearing the account number 31072.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment,
Assumption and Recognition Agreement by their duly authorized officers as of
the day and year first above written.
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
(Original Owner)
By:______________________________________
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
as trustee of HarborView Mortgage Loan Trust 2000-2
(Subsequent Owner)
By:______________________________________
Name:
Title:
XXXXXXX XXXXX CREDIT CORPORATION
(MLCC)
By:______________________________________
Name:
Title:
CENDANT MORTGAGE CORPORATION
(CMC)
By:_______________________________________
Name:
Title:
EXHIBIT ONE
List of MLCC-Serviced Loans
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EXHIBIT TWO
Copy of Master Servicing Agreement
==============================================================================
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
Owner
and
XXXXXXX XXXXX CREDIT CORPORATION
Company
MASTER SERVICING AGREEMENT
Dated as of May 13,1997
Conventional Fixed and Adjustable Rate Mortgage Loans
MLCC 1997-6 Flow Delivery Program
==============================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms........................................................................1
ARTICLE II
BOOKS AND RECORDS;
TRANSFER OF MORTGAGE LOANS
Section 2.01 Books and Records...................................................................12
Section 2.02 Transfer of Mortgage Loans..........................................................13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.01 Representations and Warranties of the Company.......................................13
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer..........................................................15
Section 4.02 Collection of Mortgage Loan Payments................................................15
Section 4.03 Realization Upon Defaulted Mortgage Loans...........................................16
Section 4.04 Establishment of Custodial Accounts; Deposits in Custodial Accounts.................16
Section 4.05 Permitted Withdrawals From the Custodial Account....................................18
Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts.......................19
Section 4.07 Permitted Withdrawals From Escrow Account...........................................19
Section 4.08 Payment of Taxes, Insurance and Other Charges; Maintenance of
Primary Insurance Policies; Collections Thereunder..................................20
Section 4.09 Transfer of Accounts................................................................21
Section 4.10 Maintenance of Hazard Insurance.....................................................21
Section 4.11 Maintenance of Mortgage Impairment Insurance Policy.................................22
Section 4.12 Fidelity Bond. Errors and Omissions Insurance.......................................22
Section 4.13 Title, Management and Disposition of REO Property...................................23
Section 4.14 Adjustments to Mortgage Interest Rates..............................................24
Section 4.15 Subservicing Agreements Between the Company and Subservicers........................24
Section 4.16 Successor Subservicers..............................................................25
Section 4.17 Liability of the Company............................................................25
Section 4.18 No Contractual Relationship Between Subservicers and the Owner......................25
Section 4.19 Assumption or Termination of Subservicing Agreements................................25
Section 4.20 Subservicing Accounts...............................................................26
Section 4.21 Permitted Investments...............................................................26
ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01 Distributions.......................................................................26
Section 5.02 Statements to the Owner.............................................................27
Section 5.03 Monthly Advances by the Company.....................................................27
Section 5.04 Compensating Interest...............................................................28
ARTICLE VI
GENERAL SERVICING PROCEDURE
Section 6.01 Assumption Agreements...............................................................28
Section 6.02 Satisfaction of Mortgages and Release of Mortgage...................................28
Section 6.03 Servicing Compensation..............................................................29
Section 6.04 Annual Statement as to Compliance...................................................30
Section 6.05 Annual Independent Certified Public Accountants' Servicing Report...................30
Section 6.06 Owner's Right to Examine Company Records............................................30
ARTICLE VII
REPORTS TO BE PREPARED BY COMPANY
Section 7.01 Transfers on One or More Reconstitution Dates.......................................30
Section 7.02 Owner's Repurchase Obligations......................................................31
Section 7.03 Company Shall Provide Information as Reasonably Required............................32
ARTICLE VIII
THE COMPANY
Section 8.01 Indemnification; Third Party Claims.................................................32
Section 8.02 Merger or Consolidation of the Company..............................................33
Section 8.03 Limitation on Liability of the Company and Others...................................33
Section 8.04 Company Not to Resign...............................................................33
ARTICLE IX
DEFAULT
Section 9.01 Events of Default...................................................................34
Section 9.02 Waiver of Defaults..................................................................35
ARTICLE X
TERMINATION
Section 10.01 Termination.........................................................................35
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Successor to the Company............................................................36
Section 11.02 Amendment...........................................................................37
Section 11.03 Assignments of Mortgage.............................................................37
Section 11.04 Assignment of Servicing Rights......................................................37
Section 11.05 Governing Law.......................................................................37
Section 11.06 Notices.............................................................................38
Section 11.07 Severability Provisions.............................................................38
Section 11.08 Exhibits............................................................................38
Section 11.09 General Interpretive Principles.....................................................38
Section 11.10 Reproduction of Documents...........................................................39
Section 11.11 Successors and Assigns..............................................................39
Section 11.12 Counterparts........................................................................39
Section 11.13 Relationship of Parties.............................................................39
Section 11.14 Assignment by Owner.................................................................39
Section 11.15 No Personal Solicitation............................................................40
Section 11.16 Survival............................................................................40
EXHIBITS
A Form of Power of Attorney
B Custodial Account Certification
C Custodial Account Letter Agreement
D Escrow Account Certification
E Escrow Account Letter Agreement
F Form of REO Account Certification
G Form of REO Account Letter Agreement
H Form of Monthly Remittance Advice
I [Reserved.]
J Form of Assignment, Assumption and Recognition Agreement
This is a MASTER SERVICING AGREEMENT (this "Agreement"), dated and
effective as of May 13, 1997 and is executed between Greenwich Capital
Financial Products, Inc. as Owner (the "Owner"), and Xxxxxxx Xxxxx Credit
Corporation, as seller and servicer (the "Company").
PRELIMINARY STATEMENTS
Pursuant to a Master Mortgage Loan Purchase Agreement of even date
herewith between the Owner and the Company (the "Master Mortgage Loan Purchase
Agreement"), the Owner may purchase from the Company from time to time certain
residential, first mortgage loans. In order to facilitate the servicing of
such mortgage loans by the Company, the Company and the Owner have executed
this Agreement.
In consideration of the premises and the mutual agreements
hereinafter set forth, the Owner and the Company 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 (capitalized terms used and not otherwise defined
herein shall have the meanings specified in the Master Mortgage Loan Purchase
Agreement):
"Additional Collateral": (i) With respect to any Mortgage 100(SM)
Loan, the marketable securities subject to a security interest pursuant to the
related Mortgage 100(SM) Pledge Agreement, together with the related
Mortgage 100(SM) Pledge Agreement, or (ii) with respect to any
ParentPower(R), Mortgage Loan, the related ParentPower(R) Agreement.
"Additional Collateral Mortgage Loan": Each Mortgage Loan that is
either a Mortgage 100(SM) Loan or ParentPower(R), Mortgage Loan as to which
the Additional Collateral is still required.
"Adjustable Rate Mortgage Loan": A Mortgage Loan that provides for
the adjustment of the Mortgage Interest Rate payable with respect thereto in
accordance with the terms of the related Mortgage Note.
"Affiliate": With respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.
"Agreement": This Master Servicing Agreement and all exhibits hereto,
amendments hereof and supplements hereto.
"Appraised Value": With respect to any Mortgage Loan, the value of
the related Mortgaged Property based upon the lesser of (i) the appraisal made
for the originator at the time of origination of the Mortgage Loan, and (ii)
if applicable, the sales price of the Mortgaged Property at such time of
origination.
"Assignment": An assignment of the Mortgage, notice of transfer or
equivalent instrument, sufficient under the laws of the jurisdiction wherein
the related Mortgaged Property is located to reflect of record the sale or
transfer of the Mortgage Loan, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages securing Mortgaged Properties located in the same county,
if permitted by applicable law and acceptable for recording by the applicable
recording office.
"Assumed Principal Balance": With respect to any Mortgage Loan as of
any date of determination (i) the outstanding principal balance as of the
Cut-off Date, after application of principal payments due on or before such
date whether or not received, minus (ii) all amounts previously distributed to
the Owner with respect to such Mortgage Loan representing (a) payments or
other recoveries of principal, or (b) advances of principal made pursuant to
Section 5.03.
"Assumption Fee": The fee retained by the Company as additional
servicing compensation pursuant to Section 6.01.
"Balloon Mortgage Loan": Any Mortgage Loan for which the related
Monthly Payments, other than the Monthly Payment due on the maturity date
thereof, are computed on the basis of a period to full amortization ending on
a date that is later than such maturity date.
"Business Day": Any day other than (i) a Saturday or Sunday, or (ii)
a day on which banking or savings associations in the State of Florida are
authorized or obligated by law or executive order to be closed.
"Closing Date": For each Transaction, the date on which the Company
actually sells to the Owner, and the Owner actually purchases from the
Company, the Mortgage Loans listed on the Mortgage Loan Schedule attached to
the respective Warranty Xxxx of Sale.
"Company": MLCC or any successor under this Agreement appointed as
herein provided.
"Condemnation Proceeds": All awards or settlements in respect of a
taking of a partial or an entire Mortgaged Property by exercise of the power
of eminent domain or condemnation.
"Custodial Account": The separate trust account or accounts created
and maintained pursuant to Section 4.04 which shall be entitled "Xxxxxxx Xxxxx
Credit Corporation, in trust for the Owner," or such other title as is
requested by the Owner.
"Custodial Agreement": The Custodial Agreement, among the Company,
the Owner and the Custodian for the retention of each Mortgage Note, Mortgage,
Assignment and certain other portions of each Mortgage File, substantially in
the form attached to the Master Mortgage Loan Purchase Agreement as Exhibit 3.
"Custodian": The custodian under the Custodial Agreement, or its
successor.
"Cut-off Date": With respect to each Mortgage Loan, the first day of
the month in which the related Closing Date occurs.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced
by a Qualified Substitute Mortgage Loan.
"Determination Date": The 15th day of the month of the related
Remittance Date or if such 15th day is not a Business Day, the Business Day
immediately following such 15th day.
"Due Date": The day of the month of the related Remittance Date on
which each Monthly Payment is due on a Mortgage Loan, exclusive of any days of
grace.
"Eligible Account": An account or accounts acceptable to FNMA or
FHLMC.
"Equity Refinanced Mortgage Loan": A Refinanced Mortgage Loan in
which the Mortgagor used less than the entire amount of the proceeds (net of
any closing costs, including discount and origination fees and prepaid items)
to refinance an existing mortgage loan and any junior lien that existed on the
related Mortgaged Property for at least one year prior to origination of the
Refinanced Mortgage Loan.
"Escrow Account": The separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "Xxxxxxx Xxxxx
Credit Corporation, in trust for the Owner and various Mortgagors," or such
other title as is requested by the Owner.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, mortgage insurance premiums, fire and
hazard insurance premiums and other payments required to be escrowed by the
Mortgagor with the mortgagee pursuant to any Mortgage Loan.
"Event of Default": Any one of the conditions or circumstances
enumerated in Section 9.01.
"FHLMC": The Federal Home Loan Mortgage Corporation or any successor
organization.
"Fidelity Bond": A fidelity bond to be maintained by the Company
pursuant to Section 4.12.
"FNMA": The Federal National Mortgage Association or any successor
organization.
"Gross Margin": With respect to each Adjustable Rate Mortgage Loan,
the fixed number of basis points set forth in the Mortgage Loan Schedule that
is added to the Index on each Interest Rate Adjustment Date in accordance with
the terms of the related Mortgage Note to determine the Mortgage Interest Rate
for such Mortgage Loan, subject to any applicable Periodic Rate Cap and
Lifetime Rate Cap.
"Index": With respect to each Adjustable Rate Mortgage Loan and each
Interest Rate Adjustment Date, the index used to determine the Mortgage
Interest Rate on such Adjustable Rate Mortgage Loan, as specified in the
related Mortgage Note, which index may be (i) the average of the London
Interbank Offered Rates for one- or six-month U.S. dollar deposits, as
published in the "Money Rates" table of The Wall Street Journal or elsewhere
(as specified in the related Mortgage Note) on the date or dates specified in
such Mortgage Note for the determination of such rate, (ii) the weekly average
of the closing market bid yields on actively traded U.S. Treasury securities
adjusted to a constant maturity of one year, (iii) the weekly average or the
monthly average of weekly average auction rates on U.S. Treasury bills with a
maturity of six months, as published by the Board of Governors of the Federal
Reserve System in Federal Reserve Statistical Release H.15.(519), (iv) the
weekly average of the closing market bid yields on U.S. Treasury securities
adjusted to a constant maturity of one (1) year, as published by the Board of
Governors of the Federal Reserve System in Federal Reserve Statistical Release
H.15.(519), as available, the number of days prior to the Interest Rate
Adjustment Date set forth in the related Mortgage Note, (v) the weekly average
of the closing market bid yields on U.S. Treasury securities adjusted to a
constant maturity of five (5) years, as published by the Board of Governors of
the Federal Reserve System in Federal Reserve Statistical Release H.15.(519),
as available, the number of days prior to the Interest Rate Adjustment Date
set forth in the related Mortgage Note, (vi) the prime rate specified in the
related Mortgage Note, as published in the "Money Rates" table of The Wall
Street Journal, or elsewhere (as specified in such Mortgage Note) and
available the number of days prior to the Interest Rate Adjustment Date set
forth in the related Mortgage Note, (vii) the monthly weighted average cost of
funds of members of the Federal Home Loan Bank of San Francisco, (viii) such
other standard for determining the change in the interest rate as may be set
forth in the related Mortgage Note, as such rate may be available, the number
of days prior to the Interest Rate Adjustment Date set forth in the related
Mortgage Note, or (ix) if such index is not so published or is otherwise
unavailable, such comparable alternative index selected by the Company in
accordance with the terns of the Mortgage Notes and in consultation with the
Owner.
"Insurance Proceeds": Proceeds of any Primary Insurance Policy, 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 Company would follow in servicing mortgage loans held
for its own account.
"Interest Rate Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, the date on which the Mortgage Interest Rate is adjusted in
accordance with the terms of the related Mortgage Note.
"Lifetime Rate Cap": With respect to each Adjustable Rate Mortgage
Loan, the maximum Mortgage Interest Rate that may be borne thereby, as set
forth in the related Mortgage Note.
"Limited Documentation Mortgage Loan": A Mortgage Loan that was
originated pursuant to a "limited documentation" or "easy qualifier"
underwriting program.
"Liquidation Proceeds": Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received by the Company in connection with the
liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise (including, but not limited to, amounts received with
respect to a Parent Power(R) Agreement or a Mortgage 100(SM) Pledge
Agreement), other than amounts received following the acquisition of an REO
Property pursuant to Section 4.13.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan, as
of any date on which a determination thereof is made, the ratio on such date
of the outstanding principal balance of such Mortgage Loan to the Appraised
Value of the related Mortgaged Property.
"MLCC": Xxxxxxx Xxxxx Credit Corporation and its successors in
interest.
"Monthly Advance": The aggregate of the advances made by the Company
on any Remittance Date pursuant to Section 5.03.
"Monthly Payment": The scheduled monthly payment of principal and
interest on a Mortgage Loan which is payable by a Mortgagor from time to time
under the related Mortgage Note on every Due Date.
"Moody's": Xxxxx'x Investors Service, Inc. or its successor in
interest.
"Mortgage": The mortgage, deed of trust or other instrument creating
a first lien on real property securing the Mortgage Note.
"Mortgage 100(SM) Loan": A Mortgage Loan having at the time of
origination a Loan-to-Value Ratio generally in excess of MLCC's maximum
acceptable Loan-to-Value Ratio for such Mortgage Loan, which Mortgage Loan is
secured by additional collateral in the form of a security interest in
marketable securities having a market value, as of the date of such loan's
origination, of in most cases at least equal to the Original Additional
Collateral Requirement.
"Mortgage 100(SM) Pledge Agreement": With respect to each Mortgage
100(SM) Loan, the Mortgage 100(SM) Pledge Agreement for Securities Account
between the Mortgagor under such Mortgage 100(SM) Loan and MLCC, pursuant to
which such Mortgagor granted a security interest in various investment
securities.
"Mortgage File": The mortgage documents, including but not limited to
all paper, computer generated and microfiche records, pertaining to a
particular Mortgage Loan which are specified in Exhibit 1 to the Master
Mortgage Loan Purchase Agreement and any additional documents required to be
added to the Mortgage File pursuant to the Program Documents.
"Mortgage Interest Rate": The annual rate at which interest accrues
on any Mortgage Loan, net of any premium on any related Primary Insurance
Policy, and with respect to any Adjustable Rate Mortgage Loan, as such annual
rate may be adjusted on any Interest Rate Adjustment Date and subject to the
limitations on such interest rate imposed by the Periodic Rate Cap and the
Lifetime Rate Cap.
"Mortgage Loan": An individual Mortgage Loan, including but not
limited to all documents included in the Mortgage File, Monthly Payments,
Principal Prepayments, Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds, proceeds from REO Dispositions and any and all rights, benefits,
proceeds and obligations arising therefrom or in connection therewith, and
which is the subject of this Agreement. Each Mortgage Loan set forth on the
Mortgage Loan Schedule attached to a Warranty Xxxx of Sale initially will be
subject to this Agreement, commencing on the respective Closing Date for the
related Transaction.
"Mortgage Loan Remittance Rate": With respect to each Mortgage Loan,
the related Mortgage Interest Rate minus the Servicing Fee Rate.
"Mortgage Loan Schedule": The list of Mortgage Loans purchased by the
Owner from the Company from time to time that are subject to this Agreement,
which list shall set forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property,
including city, state and zip code;
(iv) the Mortgage Interest Rate at origination;
(v) for each Adjustable Rate Mortgage Loan, the first
Interest Rate Adjustment Date and the first Payment
Adjustment Date;
(vi) for each Adjustable Rate Mortgage Loan, the Gross
Margin;
(vii) for each Adjustable Rate Mortgage Loan, the Lifetime
Rate Cap;
(viii) for each Adjustable Rate Mortgage Loan, the Periodic
Rate Cap;
(ix) the original term to maturity;
(x) the original principal balance;
(xi) the first payment date;
(xii) the maturity date;
(xiii) the Monthly Payment in effect as of the related Cut-off
Date;
(xiv) the principal balance as of the related Cut-off Date,
after giving effect to all payments of principal due
on or before such date, whether or not received;
(xv) the Loan-to-Value Ratio as of the date of origination;
(xvi) a code indicating whether the Mortgaged Property is
occupied by owner;
(xvii) a code indicating the type of residential dwelling;
(xviii) a code indicating whether the Mortgage Loan is a
Refinanced Mortgage Loan and, if so, whether it is an
Equity Refinanced Mortgage Loan;
(xix) a code indicating whether the Mortgage Loan is covered
by a Primary Insurance Policy;
(xx) a code indicating whether the Mortgage Loan is a
Limited Documentation Mortgage Loan;
(xxi) a code indicating whether the Mortgage Loan is a
Additional Collateral Mortgage Loan;
(xxii) for each Adjustable Rate Mortgage Loan, a code
indicating the type of Index;
(xxiii) a code indicating whether the Mortgage Loan is a
Balloon Mortgage Loan; and
(xxiv) the Servicing Fee Rate applicable to such Mortgage
Loan, and if such Mortgage Loan is an Adjustable Rate
Mortgage Loan whose first Interest Rate Adjustment has
not occurred, the Servicing Fee Rate (if different)
prior to the first Interest Rate Adjustment Date.
Such schedule shall also set forth the weighted average of the amounts set
forth in (iv) and (xi) above and the total of the amounts described under
(xiii) above for all of the Mortgage Loans. Such list may be in the form of
more than one list, collectively setting forth all of the information
required.
"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 or leasehold interest in a
single parcel of real property improved by a residential dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Senior Vice President,
a Vice President, or an Assistant Vice President and by the Treasurer or the
Secretary or one of the Assistant Treasurers or Assistant Secretaries of the
Company, and delivered to the Owner as required by this Agreement.
"Opinion of Counsel": A written opinion of counsel, who may be
counsel for the Company, reasonably acceptable to the Owner.
"Original Additional Collateral Requirement": With respect to any
Additional Collateral Mortgage Loan, 30 percent (or, in the case of an
Additional Collateral Mortgage Loan with an original principal balance of
$1,000,000 or less and a Loan-to-Value Ratio less than 100%, such lower
percent specified by the Master Servicer in originating such Additional
Collateral Mortgage Loan) of the original principal balance of such Mortgage
Loan.
"Owner": Greenwich Capital Financial Products, Inc. and any successor
or assignee ox Greenwich Capital Financial Products, Inc.
"ParentPower(R) Agreement": With respect to each ParentPower(R)
Mortgage Loan, a ParentPower(R) Guaranty and Security Agreement for Securities
Account or a ParentPower(R) Guaranty Agreement for Real Estate.
"ParentPower(R) Guaranty Agreement for Real Estate": With respect to
a ParentPower(R) Mortgage Loan, an agreement between MLCC and a guarantor on
behalf of the Mortgagor under such ParentPower(R) Mortgage Loan pursuant to
which such guarantor guarantees the payment of certain losses under such
ParentPower(R) Mortgage Loan, authorizes MLCC to draw on a home equity credit
line to fund such guaranty and has secured such guaranty with a lien on
residential real estate of the guarantor. The required amount of the
collateral supporting such guaranty is at least equal to the Original
Additional Collateral Requirement for such ParentPower(R) Mortgage Loan. For
purposes of this definition, the ParentPower(R) Guaranty Agreement for Real
Estate shall not include the rights of the mortgagee under the Equity
Access(R) Security Instrument referred to therein, which rights have been
retained by MLCC.
"ParentPower(R) Guaranty and Security Agreement for Securities
Account": With respect to a ParentPower(R), Mortgage Loan, an agreement
between MLCC and a guarantor on behalf of the Mortgagor under such
ParentPower(R) Mortgage Loan pursuant to which such guarantor guarantees the
payment of certain losses under such ParentPower(R) Mortgage Loan and has
granted a security interest to MLCC in certain marketable securities to
collateralize such guaranty. The required amount of such collateral is at
least equal to the Original Additional Collateral Requirement fog such
ParentPower(R) Mortgage Loan.
"ParentPower(R) Mortgage Loan": A Mortgage Loan having at the time of
origination a Loan-to-Value Ratio generally in excess of MLCC's maximum
acceptable Loan-to-Value Ratio for such Mortgage Loan, which Mortgage Loan is
supported by a ParentPower(R) Agreement.
"Payment Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, the first Payment Adjustment Date, as set forth in the Mortgage
Loan Schedule and in the related Mortgage Note, and each anniversary thereof,
on which the amount of the Monthly Payment on an Adjustable Rate Mortgage Loan
may adjust.
"Periodic Rate Cap": With respect to each Adjustable Rate Mortgage
Loan as to which the related Mortgage Loan Schedule indicates the existence of
a Periodic Rate Cap, the provision of the related Mortgage Note that provides
for a maximum amount by which the Mortgage Interest Rate may increase (or, if
so indicated on such Mortgage Loan Schedule, decrease) on an Interest Rate
Adjustment Date above the Mortgage Interest Rate immediately prior to such
Interest Rate Adjustment Date.
"Permitted Investment": Any one or more of the following:
(i) direct obligations of, or obligations fully guaranteed as
to principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(ii) repurchase obligations (the collateral for which is held
by a third party) with respect to any security described in clause
(i) above, provided that the long-term unsecured obligations of the
party agreeing to repurchase such obligations are at the time rated
by each of the Rating Agencies in one of its two highest rating
categories;
(iii) certificates of deposit, time deposits, demand deposits
and bankers' acceptances of any bank or trust company incorporated
under the laws of the United States or any state thereof or the
District of Columbia, provided that the short-term commercial paper
of such bank or trust company at the date of acquisition thereof has
been rated by each of the Rating Agencies in its highest rating;
(iv) money market funds rated by each of the Rating Agencies
in its highest short-term debt rating category;
(v) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof or the District of Columbia which
on the date of acquisition has been rated by each of the Rating
Agencies in its highest short-term rating; and
(vi) any other obligation or security acceptable to each of
the Rating Agencies (as certified by a letter from each of the Rating
Agencies to the Purchaser) in respect of mortgage pass-through
certificates rated in one of its two highest rating categories;
provided, that with the exception of U.S. Treasury Strips, no such
instrument shall be a Permitted Investment if such instrument
evidences either (a) the right to receive interest only payments
with respect to the obligations underlying such instrument or (b)
both principal and interest payments derived from obligations
underlying such instrument where the principal and interest payments
with respect to such instrument provide a yield to maturity
exceeding 120% of the yield to maturity at par of such underlying
obligation.
"Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Prepayment Interest Shortfall": With respect to any Remittance Date
and any Mortgage Loan that was the subject of a Principal Prepayment during
the related Principal Prepayment Period, an amount equal to one month's
interest at the Mortgage Loan Remittance Rate on the amount of such Principal
Prepayment, less the amount of interest (adjusted to the Mortgage Loan
Remittance Rate) paid by the Mortgagor in respect of such Principal
Prepayment.
"Primary Insurance Policy": With respect to each Mortgage Loan, the
policy of primary mortgage insurance, if any, in effect as indicated on the
Mortgage Loan Schedule, or any replacement policy therefor obtained by the
Company pursuant to Section 4.08.
"Principal Prepayment": Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon, which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
"Principal Prepayment Period": As to any Remittance Date, the
calendar month preceding the month of distribution.
"Program Documents": With respect to each Transaction, the related
Purchase Price and Terms Letter, the related Warranty Xxxx of Sale, the Master
Mortgage Loan Purchase Agreement, the Custodial Agreement, this Agreement and
each other document or instrument executed or delivered by MLCC in connection
with any of the foregoing.
"Purchase Price and Terms Letter": With respect to each Transaction,
the letter agreement or agreements setting forth the general terms and
conditions of the Transaction to be consummated as provided in the Master
Mortgage Loan Purchase Agreement.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted by
the Company for a Deleted Mortgage Loan which must, on the date of such
substitution (i) have an outstanding principal balance, after deduction of all
scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal
balance of the Deleted Mortgage Loan (the amount of any shortfall to be
deposited into the Custodial Account by the Company in the month of
substitution pursuant to Section 4.04(vii)), (ii) have a Mortgage Interest
Rate not less than, and not more than 1% greater than the Mortgage Interest
Rate of the Deleted Mortgage Loan, (iii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted
Mortgage Loan, and (iv) comply with each representation and warranty set forth
in Section 5(b) of the Master Mortgage Loan Purchase Agreement.
"Rating Agency": Either of Standard & Poor's and Xxxxx'x.
"Record Date": The close of business of the last Business Day of the
month preceding the month of the related Remittance Date.
"Refinanced Mortgage Loan": A Mortgage Loan that was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which (net of any closing costs, including
discount and origination fees and prepaid items) were used in whole or part to
satisfy an existing mortgage.
"Remittance Date": The 18th day of any month or, if such 18th day is
not a Business Day, the first Business Day immediately following such 18th
day.
"REO Account": The separate trust account or accounts created and
maintained pursuant to Section 4.13 which shall be entitled "Xxxxxxx Xxxxx
Credit Corporation, in trust for the Owner," or such other title as is
requested by the Owner.
"REO Disposition": The final sale by the Company of any REO Property.
"REO Property": A Mortgaged Property acquired by the Company on
behalf of the Owner as described in Section 4.13.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Company of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures and bankruptcies,
(iii) the management and liquidation of the REO Property and (iv) compliance
with the obligations under Section 4.08.
"Servicing Fee": With respect to any Mortgage Loan and any Remittance
Date, the fee payable monthly to the Company pursuant to Section 6.03.
"Servicing Fee Rate": With respect to each Mortgage Loan, the rate
per annum set forth in the related Warranty Xxxx of Sale as the "Servicing Fee
Rate."
"Servicing File": The servicing file required to be maintained by the
Company pursuant to Section 2.01.
"Servicing Officer": Any officer of the Company 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 Company to the
Owner upon request, as such list may from time to time be amended.
"Standard & Poor's": Standard & Poor's Ratings Services or its
successor in interest.
"Subservicer": Any Person with which the Company has entered into a
Subservicing Agreement and which meets the qualifications of a Subservicer
pursuant to Section 4.15.
"Subservicing Account": An account established by a Subservicer which
meets the requirements set forth in Section 4.20 and is otherwise acceptable
to the Company, and which must be an Eligible Account.
"Subservicing Agreement": The written agreement between the Company
and a Subservicer relating to the servicing and administration of the Mortgage
Loans as provided in Section 4.15.
"Transaction": The sale by the Company to the Owner, and the purchase
by the Owner from the Company, of one or more Mortgage Loans on a Closing
Date, as evidenced by the execution and delivery by the Company to Greenwich
Capital Financial Products, Inc. as the initial Owner, of the Warranty Xxxx of
Sale.
"Warranty Xxxx of Sale": The warranty xxxx of sale executed and
delivered by the Company to the Owner on a Closing Date, evidencing the sale
of the related Mortgage Loans by the Company to the 0wner and setting forth
certain representations and warranties of the Company with respect thereto, in
the form attached to the Master Mortgage Loan Purchase Agreement as Exhibit
10.
ARTICLE II
BOOKS AND RECORDS;
TRANSFER OF MORTGAGE LOANS
Section 2.01 Books and Records.
The Company shall be responsible for maintaining, and shall maintain,
a complete set of books and records for the Mortgage Loans, which shall be
appropriately identified in the Company's books and records to clearly reflect
the ownership of the Mortgage Loans by the Owner, and subsequent assignments
and transfers of the Mortgage Loans pursuant to Section 2.02 hereof. At the
request of the Owner of one or more Mortgage Loans from time to time, the
Company shall promptly deliver to such Owner a Mortgage Loan Schedule setting
forth all Mortgage Loans that the Company then services and administers for
the Owner under this Agreement; provide , however, that the information
contained on such Mortgage Loan Schedule may be as of the Closing Date for
each respective Mortgage Loan and may consist of the Mortgage Loan Schedule(s)
attached to the Warranty Xxxx(s) of Sale for such Mortgage Loans, with manual
deletions or additions thereto or other revisions thereof.
The contents of each Mortgage File not delivered to the Custodian are
and shall be held in trust by the Company for the benefit of the Owner as the
owner thereof. The Company shall maintain a servicing file consisting of a
copy of the contents of each Mortgage File and the originals of the documents
in each Mortgage File not delivered to the Custodian ("Servicing File"). The
possession of each Servicing File by the Company is at the will of the Owner
for the sole purpose of servicing the related Mortgage Loan, and such
retention and possession by the Company is in a custodial capacity only. Upon
the sale of the Mortgage Loans to Owner from Seller the ownership of each
Mortgage Note, the related Mortgage and the related Mortgage File and
Servicing File shall vest immediately in the Owner and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Company shall vest immediately in the
Owner and shall be retained and maintained by the Company, in trust for the
Owner, during the term of this Agreement, and only in such custodial capacity.
Each Servicing File shall be segregated from the other books and records of
the Company and shall be marked appropriately to reflect clearly the sale of
the related Mortgage Loan to the Owner. The Company shall release its custody
of the contents of any Servicing File only in accordance with written
instructions from the Owner, unless such release is required as incidental to
the Company's servicing of the Mortgage Loans.
Section 2.02 Transfer of Mortgage Loans.
The Company acknowledges that the Owner shall have the right, without
the consent of Company, to assign, any or all of the Mortgage Loans, and any
such assignee shall, upon such assignment, exercise any rights of the Owner
hereunder, and shall accede to the rights and obligations hereunder of the
Owner with respect to such assigned Mortgage Loans and the Company shall
recognize such assignee as the owner of such Mortgage Loans and shall service
such Mortgage Loans for the assignee as if the assignee and the Company had
entered into a separate servicing agreement in the form of this Agreement. All
references to the Owner shall be deemed to include its assignee. Upon the
request of the Owner, the Company shall provide copies of any one or more of
the Mortgage Files at the expense of the requesting party. Pursuant to Section
2.03 herein, the Company shall keep at its servicing office books and records
in which, subject to such reasonable regulations as it may prescribe, the
Company shall note assignments and transfers of Mortgage Loans. Upon receipt
of an Assignment, Assumption and Recognition Agreement, substantially in the
form of Exhibit J hereto, the Company shall (a) amend its books and records to
reflect the ownership of the assigned Mortgage Loans of such assignee, and the
previous Owner shall be released from its obligations hereunder with respect
to each such assigned Mortgage Loans and (b) execute each such Assignment,
Assumption and Recognition Agreement in as many counterparts as are necessary
to enable each party to the Assignment, Assumption and Recognition Agreement
to receive an original of such Assignment, Assumption and Recognition
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.01 Representations and Warranties of the Company.
The Company represents, warrants and covenants to the Owner, as of
the date of this Agreement and as of each Closing Date or as of such other
date specified below, that:
(i) The Company (a) is a corporation, duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
(b) has all licenses necessary to carry on its business as now being
conducted, (c) is licensed, qualified and in good standing under the laws of
each state where a Mortgaged Property is located unless not required under
applicable law to effect such qualification (with no demand for such
qualification having been made upon the Company by any such state), and (d) in
compliance with the laws of any such state to the extent necessary to insure
the enforceability of each Mortgage Loan and to permit the servicing of the
Mortgage Loans in accordance with the terms of this Agreement.
(ii) The Company has the full power and authority to hold each
Mortgage Loan, to service each Mortgage Loan, to execute and deliver this
Agreement, and to enter into and consummate all transactions contemplated by
this Agreement. The Company has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this Agreement,
and this Agreement, assuming due authorization, execution and delivery by the
Owner and the enforceability against the Owner, constitutes a legal, valid and
binding obligation of the Company, enforceable against it in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, liquidation, moratorium, reorganization or other similar laws
affecting the rights of creditors generally or by general principles of
equity, regardless of whether enforcement is sought in a proceeding in equity
or at law.
(iii)The consummation of the transactions contemplated by this
Agreement is in the ordinary course of the Company's business and will not
conflict with or result in a breach of any of the terms, conditions or
provisions of the Company's certificate of incorporation or by-laws or 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 material default or result in
an acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Company or its
property is subject.
(iv) The Company is an approved seller/servicer for FNMA or
FHLMC in good standing and is a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Section 203 of the National Housing Act. No
event has occurred that would render the Company unable to comply with FNMA or
FHLMC eligibility requirements or that would require notification to either
FNMA or FHLMC.
(v) The Company has no reason or cause to believe that it
cannot perform each covenant contained in this Agreement.
(vi) There is no action, suit, proceeding or investigation
pending or, to the Company's knowledge, threatened, against the Company that,
in the Company's judgment, if determined adversely to the Company, would
materially and adversely affect the validity or enforceability of this
Agreement or the ability of the Company to perform its obligations hereunder
in accordance with the terms hereof.
(vii)No consent, approval, authorization or order of any court
or governmental authority is required for the execution and delivery of this
Agreement by the Company or for the performance by the Company of its
obligations hereunder, other than such consent, approval, authorization or
order as has been obtained prior to the Closing Date.
The Company shall indemnify the Owner and hold it harmless against
any losses, damages, penalties, fines, forfeitures, legal fees and related
costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
breach of the Company's representations and warranties contained in this
Section 3.01. It is understood and agreed that the obligations of the Company
set forth in this Section 3.01 to indemnify the Owner as provided above
constitute the sole remedies of the Owner respecting a breach of the foregoing
representations and warranties.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and the normal
and usual standards of practice of prudent mortgage lenders, 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 that the Company
may deem necessary or desirable and consistent with the terms of this
Agreement.
Consistent with the terms of this Agreement, the Company may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Company's reasonable and prudent determination such
waiver, modification, postponement or indulgence is not materially adverse to
the Owner; provided, however, that the Company shall not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, forgive the payment of any principal or interest payments, make
future advances or extend the final maturity date on such Mortgage Loan.
Without limiting the generality of the foregoing, the Company shall continue,
and is hereby authorized and empowered, to execute and deliver on behalf of
itself, and the Owner, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Property. The
Owner shall promptly furnish the Company with such powers of attorney (a form
of which is attached hereto as Exhibit A) as are necessary and appropriate and
with such other documents as are necessary or appropriate to enable the
Company to carry out its servicing and administrative duties under this
Agreement.
In servicing and administering the Mortgage Loans, the Company shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted
mortgage servicing practices of prudent lending institutions and the Owner's
reliance on the Company.
Section 4.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Company shall 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 and the terms and provisions of any related Primary
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 Company will take special care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and
hazard insurance premiums, mortgage insurance premiums, and all other charges
that, as provided in the Mortgage, will become due and payable to the end that
the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section 4.03 Realization Upon Defaulted Mortgage Loans.
The Company shall use its best efforts, consistent with the
procedures that the Company would use in servicing loans for its own account,
to foreclose upon or otherwise comparably convert the ownership of such
Mortgaged Properties as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 4.01. In addition, if an Additional Collateral Mortgage
Loan becomes a defaulted Mortgage Loan, the Company (or, if MLCC is no longer
the Company hereunder, MLCC, as Subservicer, at the direction of the Company)
shall make all reasonable efforts to realize upon the related Additional
Collateral, and any proceeds from the realization thereof, and not such
Additional Collateral itself, shall be included in the related Liquidation
Proceeds and deposited in the Custodial Account, net of any related Servicing
Advances. The Company shall use its best efforts to realize upon defaulted
Mortgage Loans in such a manner as will maximize the receipt of principal and
interest by the Owner, taking into account, among other things, the timing of
foreclosure proceedings and any proceedings with respect to Additional
Collateral. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage, the Company shall not be
required to expend its own funds toward the restoration of such property in
excess of an aggregate of $2,000 during the life of the Mortgage Loan, unless
it shall determine in its discretion (i) that such restoration will increase
the proceeds of liquidation of the related Mortgage Loan to Owner after
reimbursement to itself for such expenses, and (ii) that such expenses mill be
recoverable by the Company through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property, as contemplated in Section 4.05. In the
event that any payment due under any Mortgage Loan 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 Company shall take such
action as it shall deem to be in the best interest of the Owner. In the event
that any payment due under any Mortgage Loan remains delinquent for a period
of 90 days or more and, in the judgment of the Company, the related Mortgagor
is not likely to become current within a reasonable period of time, the
Company shall commence foreclosure proceedings. In connection with such
foreclosure proceedings, the Company shall be responsible for all costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 4.05.
Section 4.04 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
The Company 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, in the form of time deposit or demand accounts, each of which shall
be an Eligible Account. The creation of any Custodial Account shall be
evidenced by (i) a certification in the form shown in Exhibit B hereto, in the
case of an account established with the Company, or (ii) a letter agreement in
the form shown in Exhibit C hereto, in the case of an account held by a
depository other than the Company. In either case, a copy of such
certification or letter agreement shall be furnished to a Owner upon request.
The Company shall deposit in the Custodial Account on a daily basis,
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
adjusted to the Mortgage Loan Remittance Rate;
(iii) All Liquidation Proceeds;
(iv) 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 the
Company's normal servicing procedures, the loan documents or applicable law;
(v) All Condemnation Proceeds affecting any Mortgaged
Property that are not released to the Mortgagor in accordance with the
Company's normal servicing procedures, the loan documents or applicable law;
(vi) Any Monthly Advances;
(vii) All proceeds of any Mortgage Loan repurchased in
accordance with Section 5(c) or (d) of the Master Mortgage Loan Purchase
Agreement, and all amounts required to be deposited by the Company in
connection with shortfalls in principal amount of Qualified Substitute
Mortgage Loans pursuant to Section 5(c) of the Master Mortgage Loan Purchase
Agreement.
(viii) Any amounts required to be deposited by the Company
pursuant to Section 4.11 in connection with the deductible amount of any
blanket hazard insurance policy;
(ix) Any amounts required to be deposited by the Company
pursuant to Section 5.04 in connection with the Prepayment Interest
Shortfalls, if any, for the month of distribution;
(x) Any amounts in respect of Permitted Investments required
to be deposited pursuant to Section 4.21;
(xi) Any amounts required to be deposited by the Company in
connection with any REO Property pursuant to Section 4.13;
(xii) Any amounts required to be deposited into the Custodial
Account pursuant to Sections 6.01 or 6.02; and
(xiii) Any amounts required to be deposited by the Company
pursuant to Section 4.14 in connection with errors in adjustments to Mortgage
Interest Rates or Monthly Payments.
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 Company in the Custodial Account. Any interest paid on funds
deposited into the Custodial Account by the depository institution shall
accrue to the benefit of the Company and the Company shall be entitled to
retain and withdraw such interest from the Custodial Account pursuant to
Section 4.05 (iv). In addition, funds in the Custodial Account may be invested
in Permitted Investments in accordance with the provisions set forth in
Section 4.21.
Section 4.05 Permitted Withdrawals From the Custodial Account.
The Company may, from time to time, withdraw from the Custodial
Account for the following purposes:
(i) To make payments to the Owner in the amounts and in the
manner provided for in Section __.01;
(ii) To reimburse itself for unreimbursed Monthly Advances with
respect to any Mortgage Loan, provided that the Company's right to such
reimbursement shall be limited to amounts received with respect to such
related Mortgage Loan that represent late payments of _________ interest.
(iii)To reimburse itself for unreimbursed Servicing Advances
and for unreimbursed _________ advances, provided that with respect to any
Mortgage Loan the Company's right to such reimbursement shall be limited,
subject to Section 4.13, to the related Liquidation Proceeds, __________
Proceeds and Insurance Proceeds as may be collected by the Company from the
__________ any Person. The Company's right to the reimbursement set forth in
the preceding __________ be prior to the rights of the Owner to such proceeds
and amounts, except that where _________ is required to repurchase a Mortgage
Loan pursuant to Section 5(c) or (d) of the Mortgage Loan Purchase Agreement,
the Company's right to such reimbursement shall be __________ the rights of
the Owner to receive payment from the Custodial Account representing
___________ price set forth in Section 5(c) or (d) of the Master Mortgage Loan
Purchase Agreement applicable, and representing all other amounts required to
be paid to the Owner with __________ repurchased Mortgage Loan;
(iv) To pay to itself as servicing compensation any interest or
investment income __________ in the Custodial Account (all such interest and
investment income to be withdrawn no later than each Remittance Date);
(v) To pay to itself with respect to each Mortgage Loan that
has been repurchased pursuant to Section 5(c) or (d) of the Master Mortgage
Loan Purchase Agreement all related __________ and such other amounts as may
be collected by the Company from the __________ otherwise relating to such
Mortgage Loan, provided that such Monthly Payments or __________ have not been
distributed as of the date on which the related repurchase price is
__________.
(vi) To refund to the Company any amount deposited in the
Custodial Account and not required to be deposited therein; and
(vii)To clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 4.06 Establishment of Escrow Accounts; Deposits in
Escrow Accounts.
The Company 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, in the form of time deposit or demand
accounts. Each Escrow Account shall be an Eligible Account. The creation of
any Escrow Account shall be evidenced by (i) a certification in the form shown
in Exhibit D hereto, in the case of an account established with the Company,
or (ii) a letter agreement in the form shown in Exhibit E hereto, in the case
of an account held by a depository other than the Company. In either case, a
copy of such certification or letter agreement shall be furnished to the then
Owner upon request.
The Company 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, and (ii) all Insurance
Proceeds which are to be applied to the restoration or repair of any Mortgaged
Property. The Company shall make withdrawals therefrom 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 Company shall be
entitled to retain any interest paid on funds deposited into the Escrow
Account by the depository institution other than interest on escrowed funds
required by law to be paid to the Mortgagor and, to the extent required by
law, the Company shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account is non-interest bearing or that
interest paid funds therein is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Company (i) to
effect timely payments of ground rents, taxes, assessments, water rates,
hazard insurance premiums, Primary Insurance Policy premiums, if applicable,
and comparable items, (ii) to reimburse the Company for any Servicing Advance
made by Company with respect to an Escrow Payment, but only from amounts
received on the related Mortgage Loan which represent late payments or
collections of Escrow Payments thereunder, and only to the extent permitted by
applicable law, (iii) to refund to the Mortgagor any funds as may be
determined to be overages, (iv) for transfer to the Custodial Account in
accordance with the terms of this Agreement, (v) for application to
restoration or repair of the Mortgaged Property, (vi) to pay to the Company,
or to the Mortgagor to the extent required by law, any interest paid on the
funds deposited into the Escrow Account, (vii) to refund to the Company any
amount deposited in the Escrow Account and not required to be deposited
therein or (viii) to clear and terminate the Escrow Account on the termination
of this Agreement. As part of its servicing duties, the Company shall pay to
the Mortgagors interest on funds in the Escrow Account, to the extent required
by law, and to the extent that interest earned on funds in the Escrow Account
is insufficient, shall pay such interest from its own funds, without any
reimbursement therefor.
Section 4.08 Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Insurance Policies;
Collections Thereunder.
With respect to each Mortgage Loan, the Company shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the
Mortgaged Property and shall effect payment thereof to ensure the lien of the
Mortgage remains in full force and effect by applying deposits of the
Mortgagor in the Escrow Account, where such an account is maintained in
connection with a Mortgage Loan, to the extent permitted under the terms of
the Mortgage and applicable law. In the event the Company does not enforce, or
is prohibited by law from enforcing, the escrow requirements under a Mortgage
and does not require a Mortgagor to make deposits into the Escrow Account, the
Company shall ensure that all ground rents, taxes, assessments, water rates,
and any other charges which are or may become a lien upon the Mortgaged
Property are paid and the lien of the Mortgage remains in full force and
effect, and shall advance its own funds, if necessary, to effect payment of
the same.
With respect to each Mortgage Loan the Company shall maintain or
cause to be maintained accurate records reflecting the status of hazard
insurance policy premiums, and shall effect payment thereof by applying
deposits of the Mortgagor in the Escrow Account, where such an account is
maintained in connection with a Mortgage Loan, to the extent permitted under
the terms of the Mortgage and applicable law. In the event the Company does
not enforce, or is prohibited by law from enforcing, the escrow requirements
under a Mortgage and does not require a Mortgagor to make deposits into the
Escrow Account, the Company shall ensure that at all times each Mortgaged
Property affected thereby is insured by hazard insurance to the extent
required under Section 4.10 of this Agreement, and shall advance its own funds
to effect payment of the same, if necessary.
The Company shall maintain in full force and effect a Primary
Insurance Policy with respect to each Mortgage Loan as to which a Primary
Insurance Policy was in effect on the related Closing Date, which Primary
Insurance Policy shall be the same as or conform in all material respects to
such Primary Insurance Policy in effect on the related Closing Date and shall
be issued by an insurer whose claims-paying ability is satisfactory to FNMA
and FHLMC and that is licensed to do business in the state in which the
related Mortgaged Property is located. Such coverage shall be maintained until
the Loan-to-Value Ratio of the related Mortgage Loan is reduced to 80% or
less. The Company will not cancel or refuse to renew any Primary Insurance
Policy in effect on the Closing Date that is required to be kept in force
under this Agreement unless a replacement Primary Insurance Policy for such
canceled or non-renewed policy is obtained from and maintained with an insurer
that satisfies the standards set forth above. The Company shall not take any
action that would result in non-coverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Company, would
have been covered thereunder. In connection with any assumption or
substitution of liability agreement entered into or to be entered into
pursuant to Section 6.01, the Company shall promptly notify the insurer under
the related Primary Insurance Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and
shall take all actions that may be required by such insurer as a condition to
the continuation of coverage under the Primary Insurance Policy. If such
Primary Insurance Policy is terminated as a result of such assumption or
substitution of liability, the Company shall obtain a replacement Primary
Insurance Policy as provided above.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself, and the Owner, claims to the insurer
under any Primary Insurance Policy in a timely fashion in accordance with the
terms of such policies and, in this regard, to take such action as shall be
necessary to permit recovery under any Primary Insurance Policy respecting a
defaulted Mortgage Loan. Pursuant to Section 4.04, any amounts collected by
the Company under any Primary Insurance Policy shall be deposited into the
Custodial Account, subject to withdrawal pursuant to Section 4.05.
Section 4.09 Transfer of Accounts.
The Company may transfer the Custodial Account or the Escrow Account
to a different depository institution from time to time. The Company shall
promptly notify the Owner upon making any such transfer. In any case, the
Custodial Account and Escrow Account shall be Eligible Accounts.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
lesser of (i) the amount necessary to fully compensate for any damage or loss
to the improvements which are a part of such property on a replacement cost
basis or (ii) the outstanding principal balance of the Mortgage Loan in each
case in an amount not less than such amount as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer; provided, however,
that coverage under such fire and hazard insurance policy shall in no event
exceed the maximum amount, if any, set forth in any document in the Mortgage
File or as required by applicable law. With respect to each Mortgage Loan, the
Company shall maintain or cause to be maintained such policy of flood
insurance as is required to be maintained pursuant to the Flood Disaster
Protection Act of 1973, as amended, to the extent available. The Company shall
also maintain on any REO Property, fire, hazard and liability insurance with
extended coverage in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage
Loan at the time it became an REO Property plus accrued interest at the
Mortgage Interest Rate and related Servicing Advances, liability insurance
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.
Pursuant to Section 4.04, any amounts collected by the Company under any such
policies other than amounts to be deposited into 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 the Company's normal
servicing procedures, shall be deposited into the Custodial Account, subject
to withdrawal pursuant to Section 4.05. Any cost incurred by the Company in
maintaining any such insurance shall not, for the purpose of calculating
distributions to the Owner, be added to the unpaid principal balance of the
related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so
permit. It is understood and agreed that no earthquake or other additional
insurance need be required by the Company of the Mortgagor or maintained on
property acquired in respect of the Mortgage Loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. All such policies shall be endorsed with
standard mortgagee clauses with loss payable to the Company, and shall provide
for at least thirty days prior written notice of any cancellation, reduction
in the amount of, or material change in, coverage to the Company. The Company
shall not interfere with the Mortgagor's freedom of choice in selecting either
his insurance carrier or agent; provided, however, that the Company shall not
accept or maintain any such insurance policy from an insurance company that
does not then meet the standards for hazard insurance carriers established by
FNMA or FHLMC.
Section 4.11 Maintenance of Mortgage Impairment Insurance
Policy.
If the Company shall obtain and maintain a blanket insurance policy
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 Company 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 one or more losses 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. In connection with
its activities as servicer of the Mortgage Loans, the Company agrees to
prepare and present, on behalf of the Owner, claims under any such blanket
policy in a timely fashion in accordance with the terms of such policy. Upon
request of Owner, the Company shall cause to be delivered to the Owner a
certified true copy of such policy and shall use reasonable 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 Owner.
Section 4.12 Fidelity Bond, Errors and Omissions Insurance.
The Company shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of FNMA, or FHLMC on
all officers, employees or other persons acting in any capacity with regard to
the Mortgage Loan to handle funds, money, documents and papers relating to the
Mortgage Loan. The Fidelity Bond and errors and omissions insurance shall be
in the form of the Mortgage Banker's Blanket Bond and shall protect and insure
the Company against losses, including forgery, theft, embezzlement, fraud,
errors and omissions and negligent acts of such persons. Such Fidelity Bond
shall also protect and insure the Company 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 and errors and omissions
insurance shall diminish or relieve the Company from its duties and
obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be at least equal to the corresponding
amounts required by FNMA in the FNMA Sellers' and Servicers' Guide or by FHLMC
in the FHLMC Sellers' and Servicers' Guide. Upon request of any Owner, the
Company shall cause to be delivered to such Owner a certified true copy of the
Fidelity Bond and insurance policy and shall use reasonable efforts to obtain
a statement from the surety and the insurer that such Fidelity Bond or
insurance policy shall in no event be terminated or materially modified
without thirty (30) days prior written notice to the Owner.
Section 4.13 Title, Management and Disposition of REO Property.
If title to a Mortgaged Property is acquired in foreclosure or by
deed in lieu of foreclosure, the deed or certificate of sale shall be taken in
the name of the Owner.
The Company shall either itself or through an agent selected by the
Company, manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) 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 Company shall cause each REO Property to be inspected promptly
upon the acquisition of title thereto and shall cause each REO Property to be
inspected at least annually thereafter. The Company shall make or cause to be
made a written report of each such inspection. Such reports shall be retained
in the Mortgage File and copies thereof shall be forwarded by the Company to
the Owner upon request. The Company shall use its best efforts to dispose of
the REO Property as soon as possible and shall sell such REO Property, upon
approval of the Owner, within one (1) 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 Company determines, and gives an appropriate notice to the Owner
to such effect, that a longer period is necessary for the orderly liquidation
of such REO Property. If a period longer than one year is permitted under the
foregoing sentence and is necessary to sell any REO Property, (i) the Company
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 Owner, a
purchase money mortgage is taken in connection with such sale, such purchase
money mortgage shall name the Company as mortgagee, and such purchase money
mortgage shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Company and Owner shall be entered into with
respect to such purchase money mortgage.
The Company shall segregate and hold all funds collected and received
in connection with the operation of REO Properties separate and apart from its
own funds or general assets in an REO Account, which shall be an Eligible
Account. The creation of the REO Account shall be evidenced by (i) a
certification in the form shown in Exhibit F hereto, in the case of an account
established with the Company, or (ii) a letter agreement in the form shown in
Exhibit G hereto, in the case of an account held by a depository other than
the Company. In either case, an original of such certification or letter
agreement shall be furnished to the Owner upon request. The Company shall
maintain accurate records reflecting the origin of all funds collected and
deposited into the REO Account.
The Company shall deposit or cause to be deposited, on a daily basis
in the REO Account all revenues received with respect to each REO Property and
shall withdraw therefrom funds necessary for the proper operation, management
and maintenance of the REO Property with respect to which a deposit into the
REO Account was made, including the cost of maintaining any hazard insurance
pursuant to Section 4.10 hereof and the fees of any managing agent acting on
behalf of the Company. On or before each Determination Date, the Company shall
withdraw from the REO Account and deposit into the Custodial Account the net
income from each REO Property on deposit in the REO Account.
The Company shall notify the Owner of its receipt of a bona fide
offer for any REO Property. Each REO Disposition shall be carried out by the
Company at such price and upon such terms and conditions as the Owner shall
approve. The proceeds from the REO Disposition, net of any related
unreimbursed Servicing Advances and Monthly Advances to the Company, shall be
deposited into the REO Account and shall be transferred to the Custodial
Account on the Determination Date in the month following receipt thereof for
distribution on the succeeding Remittance Date in accordance with Section
5.01. If the proceeds from an REO Disposition are insufficient to reimburse
the Company for any related unreimbursed Servicing Advances and Monthly
Advances, the Company shall be entitled to withdraw any such deficiency from
amounts on deposit in the Custodial Account.
Section 4.14 Adjustments to Mortgage Interest Rates.
The Company shall make interest rate adjustments and payment amount
adjustments for each Adjustable Rate Mortgage Loan in accordance with the
terms of the related Mortgage Note, and will deliver to the related Mortgagor
written notice of such adjustments in accordance with the terms of such
Mortgage Note and the requirements of applicable law.
Section 4.15 Subservicing Agreements Between the Company and
Subservicers.
(a) The Company may enter into Subservicing Agreements with
Subservicers for the servicing and administration of the Mortgage Loans. The
terms of any Subservicing Agreement shall not be inconsistent with any of the
provisions of this Agreement. Each Subservicer shall be (i) authorized to
transact business in the state or states in which the Mortgaged Properties
related to the Mortgage Loans it is to service are situated, if and to the
extent required by applicable law to enable the Subservicer to perform its
obligations hereunder and under the Subservicing Agreement, and (ii) a FHLMC-
or FNMA- approved mortgage servicer. Each Subservicing Agreement must impose
on the Subservicer requirements conforming to the provisions set forth in
Section 4.20 and provide for servicing of the Mortgage Loans consistent with
the terms of this Agreement.
(b) As part of its servicing activities hereunder, the Company, for
the benefit of the Owner, shall enforce the obligations of each Subservicer
under the related Subservicing Agreement, including without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Company, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Company shall pay the costs of such enforcement at its own expense and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans, or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 4.16 Successor Subservicers.
The Company shall be entitled to terminate any Subservicing Agreement
and the rights and obligations of any Subservicer pursuant to any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement. In the event of termination of any Subservicer, the Company either
shall directly service the related Mortgage Loans or shall enter into a
Subservicing Agreement with a successor Subservicer which qualifies under
section 4.15.
Section 4.17 Liability of the Company.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Company and
a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Company shall remain obligated and primarily liable to the
Owner for the servicing and administering of the Mortgage Loans in accordance
with the provisions of Section 4.01 without diminution of such obligation or
liability by virtue of such Subservicing Agreements or arrangements or by
virtue of indemnification from the Subservicer and to the same extent and
under the same terms and conditions as if the Company alone were servicing and
administering the Mortgage Loans. The Company shall be entitled to enter into
any agreement with a Subservicer for indemnification of the Company by such
Subservicer and nothing contained in this Agreement shall be deemed to limit
or modify such indemnification.
Section 4.18 No Contractual Relationship Between Subservicers
and the Owner.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a
Subservicer in its capacity as such shall be deemed to be between such
Subservicer and the Company alone, and the Owner shall not be deemed a party
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to the Subservicer.
Section 4.19 Assumption or Termination of Subservicing
Agreements.
In the event that MLCC shall for any reason no longer be the Company,
the Owner or its designee may, if the Company does not terminate any
Subservicing Agreement in accordance with its terms, thereupon assume all of
the rights and obligations of the Company under such Subservicing Agreement.
Upon such assumption, the Owner or its designee shall be deemed to have
assumed all of the Company's interest therein and to have replaced the Company
as a party to each Subservicing Agreement to the same extent as if the
Subservicing Agreements had been assigned to the assuming party, except that
the Company shall not thereby be relieved of any liability or obligations
under the Subservicing Agreements, and the Company shall continue to be
entitled to any rights or benefits which arose prior to its termination as
servicer.
The Company at its expense shall, upon the request of the Owner,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.
Section 4.20 Subservicing Accounts.
In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Subservicer shall be required to
establish and maintain a Subservicing Account which shall be an Eligible
Account. The Subservicer shall be required to deposit into the Subservicing
Account not later than the first Business Day after receipt all proceeds of
Mortgage Loans received by the Subservicer, less its subservicing compensation
to the extent permitted by the Subservicing Agreement, and to remit such
proceeds to the Company for deposit in the Custodial Account not later than
the tenth day of each month or, if such tenth day is not a Business Day, the
immediately succeeding Business Day. For purposes of this Agreement, the
Company shall be deemed to have received payments on the Mortgage Loans when
the Subservicer has received such payments pursuant to the Subservicing
Agreement.
Section 4.21 Permitted Investments.
The Company may invest the funds in the Custodial Account in
Permitted Investments, each of which shall mature not later than the Business
Day immediately preceding the Remittance Date next following the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such account, then such Permitted Investment shall
mature not later than such Remittance Date) and shall not be sold or disposed
of prior to its maturity. All such Permitted Investments shall be registered
in the name of the Company or its nominee. All income and gain realized from
any such investment as well as any interest earned on deposits in the
Custodial Account shall be for the benefit of the Company, and shall be
withdrawn by the Company on the related Remittance Date. The Company shall
deposit in the Custodial Account (with respect to investments made hereunder
of funds held therein) an amount equal to the amount of any loss incurred in
respect of any such investment immediately upon realization of such loss
without right of reimbursement.
ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01 Distributions.
On each Remittance Date, the Company shall distribute to the Owner
(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 clauses (ii) through (vi) of Section
4.05, (ii) plus all Monthly Advances, if any, which the Company is obligated
to deposit into the Custodial Account pursuant to Section 5.03, (iii) minus
(a) any amounts attributable to Principal Prepayments received after the
Principal Prepayment Period, and (b) any amounts attributable to Monthly
Payments collected but due on a Due Date or Due Dates subsequent to the
preceding Determination Date.
All distributions made to the Owner on each Remittance Date will be
made to the Owner of record on the preceding Record Date, and shall be based
on the Mortgage Loans owned and held by the Owner, and shall be made by wire
transfer of immediately available funds to the account of the Owner at a bank
or other entity having appropriate facilities therefor, or if the Owner shall
have so notified the Company, by check mailed to the address of the Owner as
provided for in Section 11.05.
With respect to any remittance received by the Owner on or after the
second Business Day following the Business Day on which such payment was due,
the Company shall pay to the Owner interest on any such late payment at an
annual rate equal to the rate of interest as is publicly announced from time
to time at its principal office by Chemical Bank, New York, New York, as its
prime lending rate, adjusted as of the date of each change, plus three (3)
percentage points, but in no event greater than the maximum amount permitted
by applicable law. Such interest shall be paid by the Company to the Owner on
the date such late payment is made and shall cover the period commencing with
the day following such second Business Day and ending with the Business Day on
which such payment is made, both inclusive. Such interest shall be remitted
along with such late payment. The payment by the Company of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event
of Default by the Company.
Section 5.02 Statements to the Owner.
Not later than the tenth (10th) day of each month, the Company will
furnish to the Owner a Monthly Remittance Advice in a format substantially
similar to FNMA Form 2010 attached hereto as Exhibit H, which Monthly
Remittance Advice will be generated as of the expiration of the preceding
month.
The Company shall provide the Owner with such information concerning
the Mortgage Loans as is necessary for such Owner to prepare its federal
income tax return as any Owner may reasonably request from time to time.
Section 5.03 Monthly Advances by the Company.
Not later than the close of business on the Business Day preceding
each Remittance Date, the Company shall deposit in the Custodial Account an
amount equal to all Monthly Payments, not previously advanced by the Company
(with interest adjusted to the Mortgage Loan Remittance Rate), which were due
on a Mortgage Loan and delinquent at the close of business on the related
Determination Date.
The Company's obligation to make Monthly Advances as to any Mortgage
Loan shall continue through the Remittance Date following the earlier to occur
of (a) the repurchase of the Mortgage Loan by the Company, if applicable, and
(b) the acquisition or disposition of title to the related Mortgaged Property
through foreclosure or receipt of a deed in lieu of foreclosure; provided,
however, that the Company shall not be required to make a Monthly Advance if
the Company determines, in its reasonable judgment, that such Monthly Advance
would not be recoverable from Liquidation Proceeds and other payments or
recoveries (including Insurance Proceeds or Condemnation Proceeds) on the
related Mortgage Loan and delivers to the Owner an Officer's Certificate
setting forth the basis for such determination; provided, further, that the
Company shall not be required to make a Monthly Advance with respect to the
principal portion of the Monthly Payment for any Balloon Mortgage Loan due on
the maturity date of such Balloon Mortgage Loan.
Section 5.04 Compensating Interest.
Not later than the close of business on the Business Day preceding
each Remittance Date, the Company shall from its own funds deposit in the
Custodial Account an amount equal to the lesser of (i) the aggregate of the
Prepayment Interest Shortfalls, if any, that exist in respect of the related
Principal Prepayment Period and (ii) the aggregate of the Servicing Fees for
the most recently ended calendar month.
ARTICLE VI
GENERAL SERVICING PROCEDURE
Section 6.01 Assumption Agreements.
If the Company acquires actual knowledge that a Mortgagor has
transferred or proposes to transfer the related Mortgaged Property, the
Company shall enforce any related "due-on-sale" clause consistent with its
practices for mortgage loans it services for its own account. If the Company
elects not to enforce such due-on-sale clause, the Company may enter into an
assumption agreement with the party to whom such Mortgaged Property is to be
or has been conveyed. If any assumption fee is collected by the Company for
entering into an assumption agreement, the Company shall be entitled to
retain, as additional servicing compensation, a portion of such fee equal to
the greater of: (i) $500.00 or (ii) 1% of the outstanding principal balance of
the related Mortgage Loan ("Assumption Fee") and shall deposit into the
Custodial Account any portion thereof that exceeds the Assumption Fee.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, the Company shall
request execution of any document necessary to satisfy the Mortgage Loan and
delivery to it of the portion of the Mortgage File held by the Owner or the
Custodian. Upon receipt of such request, the related mortgage documents
promptly shall be released to the Company and the Company shall prepare and
process any satisfaction or release. No expense incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the Custodial Account or the Owner.
If the Company satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage, then
upon discovery by the Company or notice from the Owner, the Company shall cure
any erroneously issued release within sixty (60) days. If the Company is
unable to cure such erroneous release or satisfaction within such time period,
or any Mortgage or other security instrument executed by a Mortgagor in
connection with such cure is later determined to be unenforceable by a final
order of a bankruptcy court with jurisdiction over the Mortgagor or the
Mortgaged Property, the Company shall within two (2) Business Days following
such cure period and after receipt of demand by the Owner, repurchase the
related Mortgage Loan a price equal to (i) the Assumed Principal Balance of
the Mortgage Loan plus (ii) accrued interest on such Assumed Principal Balance
at the Mortgage Loan Remittance Rate from the date to which interest has last
been paid and distributed to the Owner to the date of repurchase. Any such
repurchase shall be accomplished by deposit in the Custodial Account of the
amount of the repurchase price, after deducting therefrom any amounts received
in respect of such repurchased Mortgage Loan and being held in the Custodial
Account for future distribution.
From time to time and as appropriate for the servicing or foreclosure
of the Mortgage Loan, including for this purpose collection under any Primary
Insurance Policy, the Owner shall, upon request of the Company and delivery to
the Owner of a servicing receipt signed by a Servicing Officer, release the
requested portion of the Mortgage File held by the Owner to the Company. Such
servicing receipt shall obligate the Company to return the related Mortgage
documents to the Owner when the need therefor by the Company no longer exists,
unless the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited into the Custodial Account
or the Mortgage File or such document 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. Upon receipt of
a certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated, the servicing receipt shall be released by the Owner to the
Company.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be
entitled to a Servicing Fee payable with respect to each Mortgage Loan. As to
each Mortgage Loan, the Servicing Fee shall be payable monthly from payments
of interest (to the extent received) on such Mortgage Loan prior to the
deposit of such payments into the Custodial Account, shall accrue at the
applicable Servicing Fee Rate, and shall be computed on the basis of the same
principal amount and for the same period respecting which such interest
payment was computed. The Company shall be entitled to recover accrued but
unpaid Servicing Fees in respect of any Mortgage Loan to the extent permitted
by Section 4.05. The Company's right to the Servicing Fee shall not be
transferred in whole or in part except in connection with the transfer of all
the Company's obligations under this Agreement. Servicing compensation in
addition to the Servicing Fee, in the form of assumption fees as provided in
Section 6.01, default interest in excess of the Mortgage Interest Rate and
late payment charges, in each case to the extent collected, shall be retained
by the Company and shall not be required to be deposited into the Custodial
Account. The Company shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled
to reimbursement therefor except as specifically provided for herein.
Section 6.04 Annual Statement as to Compliance.
The Company will deliver to the Owner on or before April 1 of each
year, beginning with April 1 of the calendar year after the year in which the
first Closing Date occurs, an Officers' Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Company 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 Company has fulfilled all of its material
obligations under this Agreement throughout such year in all material
respects, 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.
Section 6.05 Annual Independent Certified Public Accountants'
Servicing Report.
On or before April 1 of each year, beginning with April 1 of the
calendar year after the year in which the first Closing Date occurs, the
Company at its expense shall cause a firm of independent public accountants
(which may also render other services to the Company) to furnish the Owner
with copy of a report to the effect that all Mortgage Loans serviced by the
Company under this Agreement were included in the total population or mortgage
loans subject to selection for testing in such firm's examination of certain
documents and records, that such examination was conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers
and that such examination disclosed no items of material noncompliance with
the provisions of the Uniform Single Attestation Program for Mortgage Bankers,
except for such items of noncompliance as shall be set forth in such report.
Section 6.06 Owner's Right to Examine Company Records.
The Owner shall have the right to examine and audit, 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 Company, or held by another for the Company or on its
behalf or otherwise, which may be relevant to the performance or observance by
the Company of the terms, covenants or conditions of this Agreement.
The Company shall provide to the Owner and any supervisory agents or
examiners which may relate to the Owner access to any documentation regarding
the Mortgage Loans 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 Company.
ARTICLE VII
REPORTS TO BE PREPARED BY COMPANY
Section 7.01 Transfers on One or More Reconstitution Dates.
The Owner and the Company agree that with respect to some or all of
the Mortgage Loans, from time to time, the Owner shall effect a transfer to
FNMA and/or FHLMC or a pass-through transfer, in each case retaining the
Company as the servicer thereof, or as applicable the "seller/servicer". On
the related reconstitution date, the Mortgage Loans transferred shall continue
to be covered by this Agreement.
The Company shall cooperate with the Owner in connection with any
transfer contemplated by this Section and shall (a) execute a reasonably
acceptable reconstitution agreement, on terms substantially similar to this
Agreement, within ten (10) Business Days after receipt of any reconstitution
agreement, and (b) provide to FNMA, FHLMC, the trustee or a third party
purchaser, as the case may be, subject to any reconstitution agreement and/or
the Owner: (i) any and all information and appropriate verification of
information which may be reasonably available to the Company, whether through
letters of its auditors and counsel or otherwise, as the Owner shall
reasonably request; and (ii) such additional representations, warranties,
covenants, opinions of counsel, as are reasonably requested and which are
substantially similar to those provided by the Company with respect to
securitizations of mortgage loans by the Company, letters from auditors, and
certificates of public officials or officers of the Company as are reasonably
believed necessary by FNMA, FHLMC, the trustee, such third party purchaser,
any rating agency or the Owner as the case may be in connection with such
transaction. Owner shall reimburse Company for all expenses incurred by
Company with respect to satisfying the requests made under this Section 7.01.
In the event the Owner has elected to have the Company hold record
title to the Mortgage Loans, prior to a reconstitution date, the Company or
its designee shall prepare an Assignment in blank from the Company, acceptable
to FNMA, FHLMC, the trustee or such third party, as the case may be, for each
Mortgage Loan that is part of such transfer and shall pay all preparation and
recording costs associated therewith. The Company shall execute each
Assignment and deliver them as required by FNMA, FHLMC, the trustee or such
third party, as the case may be, upon the Company's receipt thereof provided
however, that the Company shall not be required to prepare and/or record more
than one (1) Assignment with respect to any Mortgage Loan. Additionally the
Company shall prepare and execute, at the direction of the Owner, any Mortgage
Note endorsements in connection with a reconstitution agreement.
Section 7.02 Owner's Repurchase Obligations.
Upon receipt by the Company of notice from FNMA, FHLMC or the trustee
of a breach of any Owner representations or warranty contained in any
reconstitution agreement or a request by FNMA, FHLMC, or the trustee, as the
case may be, for the repurchase of any Mortgage Loan transferred to FNMA,
FHLMC, or trustee, the Company shall promptly notify the Owner of same and
shall, at the direction of the Owner, use reasonable efforts to cure or
correct any such breach and to satisfy the requests or concerns of FNMA,
FHLMC, or the trustee related to such deficiencies of the related Mortgage
Loans transferred to FNMA, FHLMC, or the trustee. With respect to any request
for repurchase of any Mortgage Loan, the Company shall prepare and forward to
the Owner, wire transfer instructions concerning the repurchase price, date,
and account routing information. The Owner shall complete repurchase of the
affected Mortgage Loan by delivery of the repurchase funds via wire transfer
to FNMA, FHLMC, or the trustee, as the case may be.
At the time of repurchase, the Custodian and the Company shall
arrange for the reassignment of the repurchased Mortgage Loan to the Owner
according to the Owner's instructions and the delivery to the Custodian of any
documents held by FNMA, FHLMC, or the trustee with respect to the repurchased
Mortgage Loan pursuant to the related reconstitution agreement. In the event
of a repurchase, the Company shall, simultaneously with such reassignment,
give written notice to the Owner that such repurchase has taken place, and
amend the Mortgage Loan Schedule to reflect the addition of the repurchased
Mortgage Loan to this Agreement. All Mortgage Loans repurchased by the Owner
pursuant to this Section shall be subject to this Agreement and shall continue
to be serviced in accordance with the terms of this Agreement and with respect
thereto this Agreement shall remain in full force and effect.
Section 7.03 Company Shall Provide Information as Reasonably
Required.
The Company shall furnish to the Owner during the term of this
Agreement, 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 Owner, or otherwise in respect to the
purposes of this Agreement, including any reports, information or
documentation reasonably required to comply with any regulations regarding any
supervisory agents or examiners of the Owner, all such reports or information
to be as provided by and in accordance with such applicable instructions and
directions as the Owner may reasonably request. The Company agrees to execute
and deliver all such instruments and take all such action as the Owner, from
time to time, may reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement.
ARTICLE VIII
THE COMPANY
Section 8.01 Indemnification; Third Party Claims.
(a) The Company agrees to indemnify the Owner and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that any
Owner may sustain in any way related to the failure of the Company to perform
its duties and service the Mortgage Loans in accordance with the terms of this
Agreement.
(b) The Company shall promptly notify the Owner if a material claim
is made by a third party with respect to this Agreement or the Mortgage Loans,
assume 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 Owner in respect of
such claim. The Company shall follow any written instructions received from
the Owner in connection with such claim. The Owner shall promptly reimburse
the Company for all amounts advanced by it pursuant to the preceding sentence
except when the claim in any way relates to the Company's indemnification
pursuant to Section 3.01 or to the failure of the Company to service and
administer the Mortgages substantially in accordance with the terms of this
Agreement.
Section 8.02 Merger or Consolidation of the Company.
The Company will keep in full effect its existence, rights and
franchises as a corporation, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Company may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Company shall be a party, or any Person succeeding to the business
of the Company, shall be the successor of the Company 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 meet the requirements of
Section 11.01 hereof.
Section 8.03 Limitation on Liability of the Company and Others.
Neither the Company nor any of the officers, employees or agents of
the Company shall be under any liability to any Owner for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Company or any such person against any breach of
warranties or representations made herein, or failure to perform its
obligations substantially in accordance with any standard of care set forth in
this Agreement, or any liability which would otherwise be imposed by reason of
any breach of the terms and conditions of this Agreement. The Company and any
officer, employee or agent of the Company may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Company shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expenses or
liability; provided, however, that the Company may, with the consent of the
Owner, 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 legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities for which the
Owner will be liable. The Company shall be entitled to be reimbursed therefor
from the Owner upon written demand.
Section 8.04 Company Not to Resign.
The Company shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Owner or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 11.01.
ARTICLE IX
DEFAULT
Section 9.01 Events of Default.
In case one or more of the following Events of Default by the Company
shall occur and be continuing, that is to say:
(i) any failure by the Company to remit to the Owner 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 on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Company by the Owner; or
(ii) failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or agreements on
the part of the Company set forth in this Agreement which 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 Company by the Owner; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator, receiver
or liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Company and such decree or
order shall have remained in force undischarged or unstayed for a period of
sixty (60) days; or
(iv) the Company shall consent to the appointment of a
conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Company or of or relating to all or substantially all of its property; or
(v) the Company shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations;
or
(vi) the Company ceases to be eligible to sell Mortgage Loans
to and service Mortgage Loans for FNMA and FHLMC, and continues to be
ineligible to sell Mortgage Loans to and service Mortgage Loans for FNMA and
FHLMC for a period of sixty (60) days after the date on which written notice
of such ineligibility shall have been given to the Company by FNMA and FHLMC;
(vii) failure by the Company to maintain its license to service
the Mortgage Loans, in any jurisdiction where a Mortgaged Property is located
and such license is required, which failure remains uncured for a period of
sixty (60) days (or such shorter period of time as shall result in a material
adverse effect on either the Owner's interest in the Mortgage Loans or the
value of the Mortgage Loan during such cure period).
(viii) failure by the Company to maintain a minimum net worth
of $15,000,000 unless adequate assurances are given to the Owner, in form and
substance reasonably acceptable to the Owner, that the Company will be able to
perform its obligations under this Agreement.
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, the Owner, by notice in writing to the Company, in
addition to whatever rights the Owner may have at law or in equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Company under this Agreement and in and to the Mortgage
Loans and the proceeds thereof other than, with respect to any Additional
Collateral Mortgage Loan, the obligation to administer the related
ParentPower(R) Agreement or Mortgage 100(SM) Pledge Agreement. On or after
the receipt by the Company of such written notice, all authority and power of
the Company 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 11.01, except with respect to any related ParentPower(R) Agreement
or Mortgage 100(SM) Pledge Agreement. Upon written request from the Owner,
the Company shall prepare, execute and deliver, any and all documents and
other instruments, deliver to the successor all Mortgage Files, and do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, including the transfer and endorsement
or assignment of the Mortgage. Loans and related documents, or otherwise, at
the Company's sole expense. The Company agrees to cooperate with the Owner and
such successor in effecting the termination of the Company's responsibilities
and rights hereunder as provided above, 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 Company to the Custodial Account, REO
Account or Escrow Account or thereafter received with respect to the Mortgage
Loans.
Section 9.02 Waiver of Defaults.
The Owner may waive any default by the Company in the performance of
its obligations hereunder and its consequences by written notice to Company
after notice is provided from Company to Owner. Owner agrees to respond to
such notice from Company within a reasonable time and shall use reasonable
efforts to respond to Company within sixty (60) days. 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.
ARTICLE X
TERMINATION
Section 10.01 Termination.
The respective obligations and responsibilities of the Company 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 Company and the Owner in writing, or (iii) the
repurchase by the Company of all Mortgage Loans and all REO Property at a
price equal to 100% of the outstanding principal balance of each Mortgage Loan
on the day of repurchase, plus accrued interest thereon at the Mortgage Loan
Remittance Rate to the first day of the month following repurchase, plus the
appraised value of any such REO Property determined at the expense of the
Company by an appraiser mutually agreed upon by the Company and the Owner.
The right of the Company to repurchase all Mortgage Loans and REO
Property pursuant to the preceding paragraph shall be conditioned upon the
aggregate outstanding principal balance of such Mortgage Loans at the time of
repurchase owned by each individual investor equaling less than 10% of the
aggregate outstanding principal balance of the Mortgage Loans sold to such
individual investor.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Successor to the Company.
Prior to termination of Company's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 9.01, 10.01 or 11.04, the Owner
shall (i) succeed to and assume all of the Company's responsibilities, rights,
duties and obligations under this Agreement, or (ii) appoint a successor who
is a FNMA/FHLMC approved Seller/Servicer, having a net worth of not less than
$15,000,000 and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Company under this Agreement
prior to the termination of Company's responsibilities, duties and liabilities
under this Agreement. In connection with such appointment and assumption, the
Owner may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree. In the event
that the Company's duties, responsibilities and liabilities under this
Agreement should be terminated pursuant to the aforementioned Sections, the
Company 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 Company 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 Company
of the representations and warranties made pursuant to Section 3.01 hereof or
Section 5 of the Master Mortgage Loan Purchase Agreement and the remedies
available to the Owner hereunder and thereunder, it being understood and
agreed that the provisions of Section 3.01 hereof and Section 5 of the Master
Mortgage Loan Purchase Agreement shall be applicable to the Company
notwithstanding any such resignation or termination of the Company, or the
termination of this Agreement.
Any successor appointed as provided in this Section 11.01 shall
execute, acknowledge and deliver to the Company and to the Owner an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Company, with like effect as if originally named as a party
to this Agreement. Any termination or resignation of the Company or
termination of this Agreement pursuant to Section 8.04, 9.01, 10.01, or 11.04
shall not affect any claims that the Owner may have against the Company
arising prior to any such termination or resignation.
The Company shall in a timely and reasonable manner deliver to the
successor the funds in the Custodial Account, REO Account and the Escrow
Account and the Mortgage Files and related documents and statements held by it
hereunder and the Company shall account for all funds. The Company 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 Company. The successor shall make arrangements as it may
deem appropriate to reimburse the Company for amounts the Company actually
expended pursuant to this Agreement which the successor is entitled to retain
hereunder and which would otherwise have been reimbursable to the Company
pursuant to this Agreement but for the appointment of the successor servicer.
Upon a successor's acceptance of appointment as such, the Company
shall notify the Owner by mail of such appointment.
Section 11.02 Amendment.
This Agreement may be amended from time to time by the Company and
the Owner only by written agreement signed by the Company and the Owner.
Section 11.03 Assignments of Mortgage.
Owner shall not record an Assignment of Mortgage as long as MLCC is
the Company under this Agreement. Upon the sale or transfer of any of the
Mortgage Loans by Owner, Seller shall, upon request, prepare and record all
applicable Assignments. In the event that MLCC shall for any reason no longer
be the Company, then, at the Owner's request, the Assignments of Mortgage
shall be recorded in the name of the Owner or in the name of a Person
designated by the Owner in all appropriate public offices for real property
records. All recording fees related to such recordation shall be paid by the
Company.
Section 11.04 Assignment of Servicing Rights.
The Company may assign the servicing rights with respect to the
Mortgage Loans upon the written consent of the Owner, provided however the
Company may, without the consent of the Owner enter into one or more
subservicing agreements relating to the Mortgage Loans provided further that
notwithstanding any subservicing arrangement, the Company shall remain liable
to the Owner for all obligations and responsibilities set forth in this
Agreement.
Section 11.05 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Florida except to the extent preempted by Federal
law.
Section 11.06 Notices.
Any 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 transmitted by telex, telegraph or facsimile
transmission and by a similar mailed writing, to (i) in the case of the
Company, Xxxxxxx Xxxxx Credit Corporation, 0000 Xxxx Xxxx Xxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000-0000, Attention: General Counsel, with a copy to
Senior Vice President, Loan Administration at the same address, or such other
address as may be furnished to the Owner in writing by the Company and (ii) in
the case of the Owner, Greenwich Capital Financial Products, Inc. 000
Xxxxxxxxx Xxxx Xxxxxxxxx, XX 00000 Attention: Xxxxxx Xxxxxxx, Vice President
or such other address as may be furnished to the Company in writing by the
Owner.
Section 11.07 Severability Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, the
invalidity of any such covenant, agreement, provision or term of this
Agreement shall in no way affect the validity or enforceability of the other
provisions of this Agreement; provided, however, that if the invalidity of any
covenant, agreement or provision 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
as nearly as possible the same as the economic effect of this Agreement.
Section 11.08 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
Section 11.09 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 generally accepted accounting
principles;
(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; and
(vi) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 11.10 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 11.11 Successors and Assigns.
The provisions of this Agreement shall be binding upon the inure to
the benefit of the respective successors and assigns of the parties hereto.
Section 11.12 Counterparts.
This Agreement may be executed in several counterparts, each of which
shall constitute an original, but all of which together shall constitute one
instrument notwithstanding that all parties are not signatories to the same
counterparts.
Section 11.13 Relationship of Parties.
Nothing contained herein shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of
the Company shall be rendered as an independent contractor and not as an agent
for the Owner.
Section 11.14 Assignment by Owner.
The Owner shall have the right without the consent of the Company but
subject to the limit set forth in Section 2.02 to assign in whole or in part
its interest under this Agreement with respect to some or all of the Mortgage
Loans and designate any person to exercise any rights of the Owner hereunder,
by executing an Assignment and Assumption Agreement substantially in the form
of Exhibit J hereto. Upon such assignment of rights and assumption of
obligations, the assignee or designee shall accede to the rights and
obligations hereunder of the Owner with respect to such Mortgage Loans and the
Owner as assignor shall be released from all obligation hereunder with respect
to such Mortgage Loans arising from events occurring from and after the date
of such assignment assumption. All references to the Owner in this Agreement
shall be deemed to include its assignee or designee.
Section 11.15 No Personal Solicitation.
From and after the Closing Date, the Company hereby 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 Company's
behalf, to personally, by telephone or mail, solicit the borrower or obligor
under any Mortgage Loan to refinance a Mortgage Loan, in whole or in part,
without the prior written consent of the Owner. Notwithstanding the foregoing,
it is understood and agreed that offers to refinance a Mortgage Loan made be
Owner or an affiliate of Owner in response to, or as a result of, contact
initiated by a Mortgagor, and promotions undertaken by the Company or any
affiliate of the Company which are directed to the general public at large,
including, without limitation, mass mailing based on commercially acquired
mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section.
Section 11.16 Survival.
The representations, warranties, covenants, agreements and
indemnities of the Owner and the Company expressed in this Agreement shall
survive.
IN WITNESS WHEREOF, Greenwich Capital Financial Products, Inc. and Xxxxxxx
Xxxxx Credit Corporation have executed this Master Servicing Agreement by and
through their duly authorized officers as of this _____ day of May, 1997.
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
By:
----------------------------------
Name:
Title:
XXXXXXX XXXXX CREDIT CORPORATION
By:
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
EXHIBIT A
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that ____________________________
("Owner") having its principal place of business at
__________________________, hereby constitutes and appoints Xxxxxxx Xxxxx
Credit Corporation ("MLCC"), a Delaware Corporation having its principal place
of business at 0000 Xxxx Xxxx Xxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, by and
through any, of its Vice Presidents or more senior officers, its true and
lawful Attorney-in-Fact, in its name, place and stead and for its benefit, in
connection with all mortgage loans serviced by MLCC for Owner for the purposes
of performing all acts and executing all documents in the name of the Owner
necessary and incidental to servicing said loans, including but not limited
to:
(1) Foreclosing delinquent loans or discontinuing such
foreclosure proceedings;
(2) Selling, transferring or otherwise disposing of real
property acquired through foreclosure or otherwise, including but
not limited to executing all contracts, agreements, deeds,
assignments or other instruments necessary to effect such sale,
transfer or disposition, and receiving proceeds and endorsing checks
made payable to the order of Owner from such proceedings;
(3) Preparing, executing and delivering satisfactions,
cancellations, discharges, or full or partial releases of lien,
subordination agreements, modification agreements, assumption
agreements, and substitutions of trustees under deeds of trust;
(4) Endorsing promissory notes and executing assignments of
mortgages, deeds of trust, deeds to secure debt and other security
instruments securing said promissory notes in connection with loans
for which MLCC has received full payment of all outstanding amounts
due; and
(5) Any and all such other acts of any kind and nature
whatsoever that are necessary and prudent to service the loans.
Owner further grants to MLCC full power and authority to do and
perform all acts necessary for MLCC to carry into effect the power or powers
granted by or under this Limited Power of Attorney as fully as the Owner might
or could do with the same validity as if all and every such act had been
herein particularly stated, expressed and especially provided for, and hereby
ratifies and confirms all that MLCC shall lawfully have done, do, or cause to
be done by virtue of the powers and authority granted and contemplated hereby.
This Limited Power of Attorney shall be effective as of _______________,199__.
Third parties without actual notice may rely upon the exercise of the
power granted under this Limited Power of Attorney, and may be satisfied that
this Limited Power of Attorney shall continue in full force and effect until
revoked in writing by the Owner.
(Print Name of Owner)
By:
------------------------------
Name:
Title:
ATTEST
Name:
Title:
STATE OF _____________ )
) ss.:
COUNTY OF _______ )
On the _____ day of ________________,199__, before me, the
undersigned, a Notary Public in and for said county and state, personally
appeared _______________________ and ________________________, personally
known to me to be the persons who executed the within instrument as
__________________ and ___________________, respectively, on behalf of the
corporation therein named, and they duly severally acknowledged that they
reside at _______________________________ and that said instrument is the act
and deed of said corporation, and that they, being authorized to do so,
executed and delivered said instrument and affixed the corporate seal thereto
for the purposes therein contained.
Witness my hand and official seal.
----------------------------------
Notary Public State of ______
My Commission Expires:_______________
EXHIBIT B
CUSTODIAL ACCOUNT CERTIFICATION
[Month] __, [Year]
Xxxxxxx Xxxxx Credit Corporation (the "Company"), hereby certifies
that it has established the account described below as a Custodial Account
pursuant to Section 4.04 of the Master Servicing Agreement, dated as of
[Month] 1, [Year].
Title of Account: "Xxxxxxx Xxxxx Credit Corporation, in trust
for the Owner."
Account Number:
---------------------------------------------
Address of office or branch of the Company at which Account
is maintained:
---------------------------------------------------------------
---------------------------------------------------------------
XXXXXXX XXXXX CREDIT CORPORATION
By:
---------------------------------
Name:
------------------------------
Title:
--------------------------------
EXHIBIT C
CUSTODIAL ACCOUNT LETTER AGREEMENT
[Month] __, [Year]
To: ____________________________
____________________________
____________________________
(the "Depository")
As "Company" under the Master Servicing Agreement, dated as of
[Month] 1, [Year], (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 "Xxxxxxx Xxxxx Credit Corporation, in trust for
the Owner." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Company. You may refuse any deposit which
would result in violation of the requirement that the account be fully insured
as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
XXXXXXX XXXXX CREDIT CORPORATION
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. The full amount deposited at
any time in the account will be insured by the Federal Deposit Insurance
Corporation or the National Credit Union Administration.
(name of Depository)
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
EXHIBIT D
ESCROW ACCOUNT CERTIFICATION
[Month] __, [Year]
Xxxxxxx Xxxxx Credit Corporation (the "Company"), hereby certifies
that it has established the account described below as an Escrow Account
pursuant to Section 4.06 of the Master Servicing Agreement, dated as of
[Month] 1, [Year].
Title of Account: "Xxxxxxx Xxxxx Credit Corporation, in trust
for the Owner and various Mortgagors."
Account Number: ______________________________
Address of office or branch of the Company at which Account
is maintained:
________________________________________________________________
________________________________________________________________
XXXXXXX XXXXX CREDIT CORPORATION
By:
-----------------------------------
Name:
-------------------------------
Title:
---------------------------------
EXHIBIT E
ESCROW ACCOUNT LETTER AGREEMENT
[Month] __, [Year]
To: ____________________________
____________________________
____________________________
(the "Depository")
As "Company" under the Master Servicing Agreement, dated as of
[Month] 1, [Year], (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 "Xxxxxxx Xxxxx Credit Corporation, in trust for
the Owner and various Mortgagors." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Company. You may refuse
any deposit which would result in violation of the requirement that the
account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
---------------------------
The undersigned, as "Depository", hereby certifies that the above
described account has been established under Account Number _____________, at
the office of the depository indicated above, and agrees to honor withdrawals
on such account as provided above. The full amount deposited at any time in
the account will be insured by the Federal Deposit Insurance Corporation or
the National Credit Union Administration.
-------------------------------------------------
(name of Depository)
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
EXHIBIT F
FORM OF REO ACCOUNT CERTIFICATION
(date)
Xxxxxxx Xxxxx Credit Corporation (the "Company") hereby certifies
that it has established the account described below as an REO Account pursuant
to Section 4.13 of the Master Servicing Agreement, dated as of [Month] 1,
[Year].
Title of Account: "Xxxxxxx Xxxxx Credit Corporation, in trust
for the Owner."
Account Number: ______________________________
Address of office or branch of the Company at which Account
is maintained:
________________________________________________________________
________________________________________________________________
XXXXXXX XXXXX CREDIT CORPORATION
By:
-----------------------------------
Name:
-------------------------------
Title:
---------------------------------
EXHIBIT G
FORM OF REO ACCOUNT LETTER AGREEMENT
(date)
To: ____________________________
____________________________
____________________________
(the "Depository")
As "Company" under the Master Servicing Agreement, dated as of
[Month] 1, [Year], (the "Agreement") we hereby authorize and request you to
establish an account, as an REO Account pursuant to Section 4.13 of the
Agreement, to be designated as "Xxxxxxx Xxxxx Credit Corporation, in trust for
the Owner." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Company. You may refuse any deposit which
would result in violation of the requirement that the account be fully insured
as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
XXXXXXX XXXXX CREDIT CORPORATION
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. The full amount deposited at any time in
the account will be insured by the Federal Deposit Insurance Corporation or
the National Credit Union Administration.
-------------------------------------------------
(name of Depository)
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
EXHIBIT H
FORM OF MONTHLY REMITTANCE ADVICE
(INFORMATION IN FNMA FORM 2010)
EXHIBIT I
[Reserved.]
EXHIBIT J
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This is an Assignment, Assumption and Recognition Agreement made this
______ day of __________, 199__, among Greenwich Capital Financial Products,
Inc. (the "Seller"), ______________ (the "Subsequent Purchaser") and Xxxxxxx
Xxxxx Credit Corporation (the "Company").
In consideration of the mutual promises contained herein the parties
hereto agree that the mortgage loans listed on Exhibit One annexed hereto (the
"Exhibit One Mortgage Loans") now serviced by the Company for Seller pursuant
to the Master Servicing Agreement, dated as of May 13, 1997 (the "Servicing
Agreement"), between the Seller and the Company, annexed hereto as Exhibit Two
shall be subject to the terms of this Agreement.
Warranties
1. The Seller and the Company warrant and represent that attached
hereto as Exhibit Two is a true, accurate and complete copy of the Servicing
Agreement with respect to the Exhibit One Mortgage Loans, which Servicing
Agreement is in full force and effect as of the date hereof and which has not
been amended or modified in any respect nor has any notice of termination been
given thereunder.
Assignment and Assumption
2. The Seller hereby assigns to the Subsequent Owner all of its
right, title and interest in and to the Servicing Agreement as the "Owner"
thereunder and to the extent of the Exhibit One Mortgage Loans, and the
Subsequent Owner hereby assumes all of the Seller's obligations under the
Servicing Agreement as the "Owner" thereunder and with respect to the Exhibit
One Mortgage Loans from and after the date hereof, and the Seller shall be
relieved and released of all of its obligations under the Servicing Agreement
to the extent of the Exhibit One Mortgage Loans from and after the date
hereof.
Recognition of the Subsequent Purchaser
3. From and after the date hereof, the Company shall recognize the
Subsequent Owner as the owner of the Exhibit One Mortgage Loans and will
service the Exhibit One Mortgage Loans for the Subsequent Owner as if the
Subsequent Owner and the Company had entered into a separate servicing
agreement for the servicing of the Exhibit One Mortgage Loans in the form of
the Servicing Agreement with the Subsequent Owner and the "Owner" thereunder,
the terms of which Servicing Agreement are incorporated herein by reference.
It is the intention of the Seller, the Company and the Subsequent Owner that
this Agreement will be a separate and distinct servicing agreement, and the
entire agreement, between the Company and the Subsequent Owner to the
______________________.
PLEDGED ASSET MORTGAGE SERVICING AGREEMENT
THIS PLEDGED ASSET MORTGAGE SERVICING AGREEMENT (this "Pledged Asset
Agreement") is dated as of May 13, 1996, between XXXXXXX XXXXX CREDIT
CORPORATION, a Delaware corporation ("Company"), and GREENWICH CAPITAL
FINANCIAL PRODUCTS, INC., a Delaware corporation ("Investor").
W I T N E S S E T H: That,
WHEREAS, Investor is the investor pursuant to the terms and
provisions of that certain Seller/Servicer Contract dated May 13, 1997 (the
"Servicing Agreement"); and
WHEREAS, Investor has purchased under the Servicing Agreement certain
mortgage loans that were originated by Company (the "Additional Collateral
Mortgage Loans"); and
WHEREAS, that with respect to each Additional Collateral Mortgage
Loan, Company is a party to either: (a) a Mortgage 100(SM) Pledge Agreement;
or (b) a Parent Power(R) Agreement; and
WHEREAS, in connection with the Mortgage 100 Loans and those Parent
Power Mortgage Loans supported by a Parent Power(R) Guaranty and Security
Agreement for Securities Account (collectively, the "Pledge Agreements"), the
Additional Collateral Mortgage Loans are secured by real property and by the
pledges of certain securities in a trading account (the "Trading Accounts");
and
WHEREAS, in connection with the Parent Power Loans supported by a
Parent Powers Guaranty Agreement for Real Estate, the Additional Collateral
Mortgage Loans are secured by the real property of the applicable borrower and
the real property of the applicable sponsor of such loan; and
WHEREAS, Company is the servicer for the Additional Mortgage Loans
pursuant to the Servicing Agreement and has assigned to the Investor the
Pledge Agreements and the related security interests (for each Parent Power
Loan supported by a Parent Power Guaranty Agreement for Real Estate, this
includes an assignment of the accompanying Equity Access(R) Agreement and the
Equity Access(R) Mortgage); and
WHEREAS, Investor has requested Company, and Company has agreed, to
administer and service the Trading Accounts;
NOW, THEREFORE, in consideration of the premises, which are hereby
deemed an integral part hereof, the mutual promises contained herein, and
intending to be legally bound hereby, Company and Investor hereby agree as
follows:
1. For all purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires, all
capitalized terms shall have the meanings set forth below:
"Agreement" means this Pledged Asset Mortgage Servicing
Agreement.
"Additional Collateral Mortgage Loan" shall mean each
outstanding Mortgage Loan that is either a Mortgage 100 Loan or a Parent Power
Mortgage Loan.
"Equity Access(R) Agreement" shall mean the revolving line of
credit agreement entered into between Company, as lender, and the sponsor of a
Parent Power Mortgage Loan supported by a Parent Power Guaranty Agreement for
Real Estate, as debtor, which line of credit may be drawn upon in the event of
a "Loss" as set forth in the accompanying Parent Power Guaranty Agreement for
Real Estate.
"Equity Access(R) Mortgage" shall mean the mortgage given by
the sponsor of a Parent Power Mortgage Loan supported by a Parent Power
Guaranty Agreement for Real Estate, as mortgagor, in favor of Company, as
mortgagee, to secure the sponsor's obligations under the accompanying Equity
Access(R) Agreement.
"Mortgage 100 Loan" shall mean a Mortgage Loan having at the
time of origination a loan-to-value ratio generally in excess of Company's
maximum acceptable loan-to-value ratio for such Mortgage Loan, which Mortgage
Loan is supported by a Mortgage 100 Pledge Agreement.
"Mortgage 100 Pledge Agreement" shall mean, with respect to
each Mortgage 100 Loan, the Mortgage 100 Pledge Agreement for Securities
Account between the mortgagor under such Mortgage 100 Loan and Company,
pursuant to which such mortgagor has granted a security interest in various
investment securities.
"Mortgage Loan" shall mean an individual mortgage loan and all
rights with respect thereto, evidenced by a mortgage note and secured by a
mortgage encumbering the Mortgaged Property.
"Mortgage Property" shall mean the real property and
improvements thereon that is encumbered by an Additional Collateral Mortgage
Loan.
"Parent Power Agreement" shall mean, with respect to each
Parent Power Mortgage Loan, a Parent Power Guaranty and Security Agreement for
Securities Account or a Parent Power Guaranty Agreement for Real Estate.
"Parent Power Guaranty Agreement for Real Estate" shall mean,
with respect to a Parent Power Mortgage Loan, an agreement between Company and
a guarantor on behalf of the Mortgagor under such Parent Power Mortgage Loan
pursuant to which such guarantor guarantees the payment of certain losses
under such Parent Power Mortgage Loan, authorizes Company to draw on the
applicable Equity Access(R) Agreement to fund such guaranty and has secured
such Equity Access(R) Agreement with a lien on residential real estate of the
guarantor or pursuant of an Equity Access(R) Mortgage.
"Parent Power Guaranty and Security Agreement for Securities
Account" shall mean, with respect to a Parent Power Mortgage Loan, an
agreement between Company and a guarantor on behalf of the Mortgagor under
such Parent Power Mortgage Loan pursuant to which such guarantor guarantees
the payment of certain losses under such Parent Power Mortgage Loan and has
granted a security interest to Company in certain marketable securities to
collateralize such guaranty.
"Parent Power Mortgage Loan" shall mean a Mortgage Loan having
at the time of origination a loan-to-value ratio generally in excess of
Company's maximum acceptable loan-to-value ratio for such Mortgage Loans,
which Mortgage Loan is supported by a Parent Power Agreement.
"Support Agreement" shall mean that certain Support Agreement
dated as of February 28, 1996 between Xxxxxxx Xxxxx & Co., Inc., and Xxxxxxx
Xxxxx Credit Corporation and acknowledged by AMBAC Indemnity Corporation.
2. Company hereby represents and warrants to Investor that
prior to its assignment to Investor, Company had a perfected security interest
in each Trading Account, or, if necessary to perfect a security interest in
each asset contained in such Trading Account, a perfected security interest in
each such asset contained in such Trading Account and following Company's
assignment of the Pledge Agreements and related security interests, Investor
has a perfected security interest in each Trading Account, or, if necessary to
perfect a security interest in each asset contained in such Trading Account, a
perfected security interest in each such asset contained in such Trading
Account.
3. Company agrees to administer and service the Trading
Accounts upon the following terms and conditions:
(a) In the event that the aggregate market value of the assets
in a Trading Account falls below the Liquidation Value (as defined in the
related Pledge Agreement), Company shall immediately give the borrower notice
that the Trading Account is below the Liquidation Value and request that
qualified assets or funds be deposited in the Trading Account within five (5)
Business Days so as to bring the aggregate market value of the assets in the
Trading Account to at least the Liquidation Value and, in the event that the
borrower does not fulfill such obligation, Company shall (a) immediately
convert all such assets in such Trading Account to cash or cash equivalents,
(b) maintain such cash or cash equivalents until (i) the borrower is entitled
to have the pledge of such Trading Account released as described herein or
(ii) withdraw such cash or cash equivalents to be held by Company in escrow in
the event of a Loss (as defined in the related Pledge Agreement), and (c)
maintain its perfected security interest in the cash or cash equivalents until
such release is authorized under the Pledge Agreement.
(b) Company represents and warrants that it will service and
administer the Trading Accounts in accordance with the terms of (i) its
procedures (as the same may be amended from time to time) and (ii) the related
Pledge Agreements. Company's obligations shall include, without limitation,
exercising on behalf of Investor the remedies described in the Pledge
Agreements and the furnishing of any notices to borrowers required in
exercising such remedies. In the event that Company, in accordance with the
terms of a particular Pledge Agreement, withdraws and/or sells any or all of
the collateral and any proceeds thereof from a Trading Account, such sums
shall be held by Company as "cash collateral" for the benefit of the Investor
until the earlier to occur of (i) the Investor incurs a Loss (as defined in
the related Pledge Agreement) or (ii) the related Pledge Agreement is
terminated in accordance with its terms. If (i) the borrower has not elected
by written notice to Company to apply the cash collateral to the outstanding
principal balance owed in connection with a Pledged Asset Mortgage and (ii) in
the event a Loss is incurred by the Investor prior to termination of the
related Pledge Agreement, Company shall promptly pay the cash collateral held
by Company to the Investor up to an amount equal to the Maximum Value (as
defined in a particular Pledge Agreement). Any amounts in excess of the
Maximum Value shall be paid to the borrower. In the event a Loss is not
incurred by Investor and the related Pledge Agreement is terminated in
accordance with its terms, Company shall return any sums held pursuant to this
provision to the borrower. Any cash collateral held by Company shall be held
in trust for the Investor; provided, however, that Company may invest the cash
collateral in accordance with its normal cash management procedures and,
further provided, that any income or loss allocable to the investment of any
cash collateral shall be for the account of Company.
(c)(i) Company is a party to that certain Surety Bond
Reimbursement Agreement dated as of February 28, 1996 (the "Surety Agreement")
executed by Company and AMBAC Indemnity Corporation ("AMBAC") pursuant to
which AMBAC has issued the Limited Purpose Surety Bond contemplated thereby
(the "Surety Bond"). Company hereby represents and warrants to Investor that
the Additional Collateral Mortgage Loans are insured under the terms and
provisions of the Surety Bond subject to the limitations set forth therein.
Investor acknowledges receipt from AMBAC on even date herewith of a
certificate confirming the insurance of the Additional Collateral Mortgage
Loans pursuant to the terms and provisions of the Surety Bond.
(ii) Investor shall, to the extent required by AMBAC, enter
info an indemnification agreement with AMBAC, in the form provided by or
otherwise acceptable to AMBAC, pursuant to which Investor will indemnify AMBAC
in respect of Additional Collateral Mortgage Loans as to certain matters,
including but not limited to the securitization of the Additional Collateral
Mortgage Loans. Investor will cooperate with Company to transfer to Investor
the coverage of the Surety Bond in respect of the Additional Collateral
Mortgage Loans.
(iii) Company and Investor agree that AMBAC is a third-party
beneficiary in respect of the Company's obligations under the Servicing
Agreement and under this Pledged Asset Agreement.
(iv) Investor shall not use, circulate, or quote, or otherwise
refer to AMBAC or the Surety Bond for any purpose, including but not limited
to the registration, purchase and sale of securities, nor file the Surety Bond
with or refer to it or AMBAC as part of any registration statement or offering
document filed to effect the sale of any of the Additional Collateral Mortgage
Loans, without the express prior written consent of AMBAC as to both form and
substance of such disclosure.
(d) Company shall be released from its obligations to
administer the Trading Accounts or the Parent Power Guaranty Agreement for
Real Estate as applicable (and Company shall be entitled to release, as
applicable), (i) the pledge of the Trading Account with respect to any
Mortgage 100 Pledge Agreement or Parent Power Guaranty and Security Agreement
for Securities Account or (ii) the lien on the Sponsor's residence with
respect to a Parent Power Guaranty Agreement for Real Estate), provided that
either (x) the unpaid principal balance of the Additional Collateral Mortgage
Loan is less than or equal to 75% of the original loan amount of such
Additional Collateral Mortgage Loan, or (y) Company causes the property
securing the Additional Collateral Mortgage Loan to be reappraised at least
seven years after the date of origination of such Additional Collateral
Mortgage Loan and, on the basis of such reappraisal, the loan-to-value ratio
of such Additional Collateral Mortgage Loan is less than or equal to 70%; or
(z) the Mortgage 100 Pledge Agreement or the Parent Power Agreement, as
applicable, requires Company to release the pledge or lien. Investor
acknowledges that it shall no longer be afforded coverage under the terms and
provisions of the Surety Bond as to any particular Additional Collateral
Mortgage Loan at such time as Company's obligation to administer such
Additional Collateral Mortgage Loan terminates as set forth in the preceding
sentence.
4. This Pledged Asset Agreement may be modified, amended, or
terminated only by the written agreement of the parties hereto. Company shall
not amend any Mortgage 100 Pledge Agreement or any Parent Power Agreement
without the prior written consent of Investor.
5. The promises and covenants herein set forth shall be
mutually binding upon and shall inure to the mutual benefit of the parties
hereto and their respective successors and assigns.
6. This Pledged Asset Agreement shall be governed by the laws
of the State of Florida.
7. This Pledged Asset Agreement may be executed in
counterparts, all of which shall constitute one and the same agreement.
8. All demands, notices and communications hereunder to be
given to Company shall be directed to:
If to Company:
Xxxxxxx Xxxxx Credit Corporation
0000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx,
Vice-President, Secondary Marketing
(with a copy to General Counsel).
If to Investor.
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx,
Vice President
9. The Support Agreement was entered into between Xxxxxxx Xxxxx
& Co., Inc., and Company solely in connection with the transaction
contemplated by the Surety Agreement and Investor acknowledges that it is not
a thud party beneficiary thereto nor to any agreement similar to the Support
Agreement. Any references to the Support Agreement and the Surety Agreement
herein is solely for informational purposes. Neither the Support Agreement or
the Surety Agreement may be used, circulated or quoted, or otherwise referred
to for any purpose, including, but not limited to the registration purchase
and sale of securities, nor may any such documents be filed with or referred
to in whole or in part of any Registration Statement or Prospectus filed to
effect the sale of any Additional Collateral Mortgage Loan without the express
prior written consent of both Company and AMBAC as to both the form and
substance of such disclosures. Investor may in no way publicly disclose the
existence of the Support Agreement or the Surety Agreement without the express
written consent of both Company and AMBAC.
10. Investor agrees to convey and assign to Company, without
cost to Company, each Equity Access(R) Agreement and the Equity Access(R)
Mortgage with secures the same at such time as the debtor/mortgagor thereunder
no longer has and obligation to pay sums pursuant to the applicable Parent
Power Agreement for Real Estate.
IN WITNESS WHEREOF, the parries hereto have caused this Pledged
Asset Mortgage Servicing Agreement to be executed and delivered by their
respective officers thereunto duly authorized as of the day and year first
written above.
XXXXXXX XXXXX CREDIT CORPORATION
By:
--------------------------------------------------
Xxxxxxx X. Xxxxxx
Vice President
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
By:
--------------------------------------------------
Xxxxxx X. Xxxxxx
Vice President
EXHIBIT THREE
List of CMC-Serviced Loans
EXHIBIT FOUR
List of Designated Loans
