Exhibit 10.5(A)
COUNTRYWIDE HOME LOANS, INC.,
as Seller
and
BANC OF AMERICA MORTGAGE CAPITAL CORPORATION,
as Purchaser
----------
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
dated as of April 1, 2003
----------
Conventional Residential Mortgage Loans
(SERVICING RETAINED)
ARTICLE I.
DEFINITIONS
ARTICLE II.
PRE-CLOSING AND CLOSING PROCEDURES
Section 2.01 Due Diligence by the Purchaser............................. 10
Section 2.02 Identification of Mortgage Loan Package.................... 11
Section 2.03 Post-Closing Due Diligence................................. 11
Section 2.04 Credit Document Deficiencies Identified During Due
Diligence.................................................. 12
Section 2.05 Delivery of Collateral Files............................... 12
Section 2.06 Purchase Confirmation...................................... 13
Section 2.07 Closing.................................................... 13
Section 2.08 Payment of the Purchase Proceeds........................... 13
Section 2.09 Entitlement to Payments on the Mortgage Loans.............. 13
Section 2.10 Payment of Costs and Expenses.............................. 14
Section 2.11 MERS Mortgage Loans and the MERS System.................... 14
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Representations and Warranties Respecting Countrywide...... 14
Section 3.02 Representations and Warranties Regarding Individual
Mortgage Loans............................................. 15
Section 3.03 Remedies for Breach of Representations and Warranties...... 23
Section 3.04 Repurchase of Convertible Mortgage Loans................... 24
Section 3.05 Representations and Warranties Respecting the Purchaser.... 25
Section 3.06 Indemnification by the Purchaser........................... 26
ARTICLE IV.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Countrywide to Act as Servicer............................. 26
Section 4.02 Collection of Mortgage Loan Payments....................... 27
Section 4.03 Realization Upon Defaulted Mortgage Loans.................. 28
Section 4.04 Establishment of Custodial Accounts; Deposits in
Custodial Accounts......................................... 28
Section 4.05 Permitted Withdrawals From the Custodial Account........... 30
Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts................................................... 31
Section 4.07 Permitted Withdrawals From Escrow Account.................. 31
Section 4.08 Transfer of Accounts....................................... 32
Section 4.09 Payment of Taxes, Insurance and Other Charges;
Maintenance of PMI Policies; Collections Thereunder........ 32
Section 4.10 Maintenance of Hazard Insurance............................ 33
Section 4.11 [Reserved]................................................. 33
Section 4.12 Fidelity Bond; Errors and Omissions Insurance.............. 34
Section 4.13 Title, Management and Disposition of REO Property.......... 34
Section 4.14 Notification of Adjustments................................ 35
Section 4.15 Notification of Maturity Date.............................. 36
Section 4.16 Assumption Agreements...................................... 36
i
Section 4.17 Satisfaction of Mortgages and Release of Collateral
Files...................................................... 37
Section 4.18 Servicing Compensation..................................... 38
ARTICLE V.
PROVISIONS OF PAYMENTS AND REPORTS TO PURCHASER
Section 5.01 Distributions.............................................. 38
Section 5.02 Periodic Reports to the Purchaser.......................... 38
Section 5.03 Monthly Advances by Countrywide............................ 39
Section 5.04 Annual Statement as to Compliance.......................... 39
Section 5.05 Annual Independent Certified Public Accountants'
Servicing Report........................................... 40
Section 5.06 Purchaser's Access to Countrywide's Records................ 40
ARTICLE VI.
COVENANTS BY COUNTRYWIDE
Section 6.01 Indemnification by Countrywide............................. 41
Section 6.02 Third Party Claims......................................... 41
Section 6.03 Merger or Consolidation of Countrywide..................... 41
Section 6.04 Limitation on Liability of Countrywide and Others.......... 42
Section 6.05 No Transfer of Servicing................................... 42
ARTICLE VII.
TERMINATION OF COUNTRYWIDE AS SERVICER
Section 7.01 Termination Due to an Event of Default..................... 43
Section 7.02 Termination by Other Means................................. 45
ARTICLE VIII.
MISCELLANEOUS
Section 8.01 Notices.................................................... 46
Section 8.02 Sale Treatment............................................. 46
Section 8.03 Exhibits................................................... 46
Section 8.04 General Interpretive Principles............................ 46
Section 8.05 Reproduction of Documents.................................. 47
Section 8.06 Further Agreements......................................... 47
Section 8.07 Assignment of Mortgage Loans by the Purchaser;
Pass-Through Transfers..................................... 47
Section 8.08 Conflicts between Transaction Documents.................... 49
Section 8.09 Governing Law.............................................. 50
Section 8.10 Severability Clause........................................ 50
Section 8.11 Successors and Assigns..................................... 50
Section 8.12 Confidentiality............................................ 50
Section 8.13 Entire Agreement........................................... 51
Exhibit A Schedule of Collateral Documents........................... A-1
Exhibit B Form of Purchase Confirmation.............................. B-1
Exhibit C Form of Custodial Agreement................................ C-1
Exhibit D Form of Trade Confirmation................................. D-1
ii
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This Master Mortgage Loan Purchase and Servicing Agreement is made and
entered into as of April 1, 2003 (the "Agreement"), between Countrywide Home
Loans, Inc., having an address at 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000
("Countrywide"), and Banc of America Mortgage Capital Corporation, having an
address at 000 X. Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (the
"Purchaser").
RECITALS
The Purchaser has agreed to purchase from Countrywide and Countrywide
has agreed to sell from time to time to the Purchaser all of Countrywide's
right, title and interest, excluding servicing rights, in and to those certain
mortgage loans identified in a Purchase Confirmation (as defined below) executed
by Countrywide and the Purchaser. This Agreement is intended to set forth the
terms and conditions by which Countrywide shall transfer and the Purchaser shall
acquire such mortgage loans.
In consideration of the promises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Countrywide and the Purchaser
agree as follows:
DEFINITIONS
Unless the context requires otherwise, all capitalized terms used
herein shall have the meanings assigned to such terms in this Article I unless
defined elsewhere herein. Any capitalized term used or defined in a Purchase
Confirmation that conflicts with the corresponding definition set forth herein
shall supersede such term.
Accepted Servicing Practices: With respect to any Mortgage Loan,
procedures (including collection procedures) that comply with applicable
federal, state and local law and that Countrywide customarily employs and
exercises in servicing and administering mortgage loans for its own account and
that are in accordance with accepted mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type as
the Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located.
Adjustable Rate Mortgage Loan: Any Mortgage Loan in which the related
Mortgage Note contains a provision whereby the Mortgage Interest Rate is
adjusted from time to time in accordance with the terms of such Mortgage Note.
Agency: Either Xxxxxx Mae or Xxxxxxx Mac.
Agreement: This Master Mortgage Loan Purchase and Servicing Agreement,
including all exhibits and supplements hereto, and all amendments hereof.
Appraised Value: The value of the related Mortgaged Property as set
forth in an appraisal made in connection with the origination of a Mortgage Loan
or the sale price of the related Mortgaged Property if the proceeds of such
Mortgage Loan were used to purchase such Mortgaged Property, whichever is less.
1
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan wherein the Mortgage Note
matures prior to full amortization and requires a final and accelerated payment
of principal.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in either the State of
California or the State of Texas are authorized or obligated by law or executive
order to be closed.
Cash Liquidation: Recovery of all cash proceeds by Countrywide with
respect to the termination of any defaulted Mortgage Loan other than a Mortgage
Loan which became an REO Property, including all PMI Proceeds, Government
Insurance Proceeds, Other Insurance Proceeds, Liquidation Proceeds, Condemnation
Proceeds and other payments or recoveries whether made at one time or over a
period of time which Countrywide deems to be finally recoverable, in connection
with the sale or assignment of such Mortgage Loan, trustee's sale, foreclosure
sale or otherwise.
Closing: The consummation of the sale and purchase of each Mortgage
Loan Package.
Closing Date: The date on which the purchase and sale of the Mortgage
Loans constituting a Mortgage Loan Package is consummated, as set forth in the
Trade Confirmation or Purchase Confirmation.
Code: The Internal Revenue Code of 1986, as it may be amended from
time to time or any successor statute thereto, and applicable U.S. Department of
the Treasury regulations issued pursuant thereto.
Collateral Documents: The collateral documents pertaining to each
Mortgage Loan as set forth in Exhibit A hereto.
Collateral File: With respect to each Mortgage Loan, a file containing
each of the Collateral Documents.
Condemnation Proceeds: All awards or settlements in respect of a
taking of an entire Mortgaged Property by exercise of the power of eminent
domain or condemnation.
Conventional Mortgage Loan: A Mortgage Loan that is not insured by the
FHA or guaranteed by the VA.
Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan that
contains a provision whereby the Mortgagor is permitted to convert the Mortgage
Loan to a fixed-rate mortgage loan in accordance with the terms of the related
Mortgage Note.
Co-op Shares: Shares issued by private non-profit housing
corporations.
Countrywide: Countrywide Home Loans, Inc., or any successor or assign
to Countrywide under this Agreement as provided herein.
2
Credit File: The file retained by Countrywide that includes the
mortgage loan documents pertaining to a Mortgage Loan including copies of the
Collateral Documents together with the credit documentation relating to the
origination of such Mortgage Loan, which Credit File may be maintained by
Countrywide on microfilm or any other comparable medium.
Custodial Account: The account or accounts created and maintained
pursuant to Section 4.04, each of which shall be an Eligible Account.
Custodial Agreement: The agreement, substantially in the form of
Exhibit C, that governs the retention of the Collateral Files by the Custodian
with respect to a Closing Date.
Custodian: Treasury Bank, National Association, its successor in
interest or assign, or such other custodian that may be designated in the
Custodial Agreement from time to time.
Cut-off Date: The first day of the month in which the related Closing
Date occurs or such other date as may be set forth in the related Trade
Confirmation or Purchase Confirmation.
Cut-off Date Balance: The aggregate scheduled unpaid principal balance
of the Mortgage Loans in a Mortgage Loan Package as of the Cut-off Date, after
application of (i) scheduled payments of principal due on such Mortgage Loans on
or before such Cut-off Date, whether or not collected, and (ii) any Principal
Prepayments received from the Mortgagor prior to the Cut-off Date.
Determination Date: The fifteenth calendar day of each month (or if
such fifteenth day is not a Business Day, the first Business Day immediately
following).
Due Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance Date.
Eligible Account: An account or accounts (i) maintained with a
depository institution the short term debt obligations of which are rated by a
nationally recognized statistical rating agency in one of its two (2) highest
rating categories at the time of any deposit therein, (ii) the deposits of which
are insured up to the maximum permitted by the FDIC, or (iii) maintained with an
institution and in a manner acceptable to an Agency.
Escrow Account: The separate trust account or accounts created and
maintained pursuant to Section 4.06, each of which shall be an Eligible Account.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water rates, 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.
3
Event of Default: Any one of the conditions or circumstances
enumerated in Section 7.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration.
Xxxxxx Xxx: The Federal National Mortgage Association or any successor
organization.
Fidelity Bond: A fidelity bond to be maintained by Countrywide
pursuant to Section 4.12.
Fixed Rate Mortgage Loan: Any Mortgage Loan wherein the Mortgage
Interest Rate set forth in the Mortgage Note is fixed for the term of such
Mortgage Loan.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation or any
successor organization.
Funding Deadline: With respect to each Closing Date, one o'clock
(1:00) p.m. New York time.
GNMA: The Government National Mortgage Association or any successor
organization.
Government Insurance Proceeds: With respect to each Government
Mortgage Loan, payments made pursuant to a MIC or LGC.
Government Mortgage Loan: A Mortgage Loan insured by the FHA or
guaranteed by the VA.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note, which amount is
added to the index in accordance with the terms of the related Mortgage Note to
determine on each Interest Adjustment Date, the Mortgage Interest Rate for such
Mortgage Loan.
HUD: The Department of Housing and Urban Development or any federal
agency or official thereof which may from time to time succeed to the functions
thereof.
Index: With respect to each Adjustable Rate Mortgage Loan, the index
set forth in the related Mortgage Note for the purpose of calculating the
interest rate thereon.
Interest Adjustment Date: With respect to an Adjustable Rate Mortgage
Loan, the date on which an adjustment to the Mortgage Interest Rate on a
Mortgage Note becomes effective.
LGC: A loan guarantee certificate issued by the VA.
LTV: With respect to any Mortgage Loan, the ratio (expressed as a
percentage) of the Stated Principal Balance (or the original principal balance,
if so indicated) of such
4
Mortgage Loan as of the date of determination to the Appraised Value of the
related Mortgaged Property.
Late Collections: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Liquidation Proceeds, Condemnation Proceeds, PMI Proceeds, Government
Insurance Proceeds, Other Insurance Proceeds, proceeds of any REO Disposition or
otherwise, which represent late payments or collections of Monthly Payments due
but delinquent for a previous Due Period and not previously recovered.
Lifetime Rate Cap: With respect to each Adjustable Rate Mortgage Loan,
the absolute maximum Mortgage Interest Rate payable, above which the Mortgage
Interest Rate shall not be adjusted, as set forth in the related Mortgage Note
and Mortgage Loan Schedule.
Liquidation Proceeds: Amounts, other than PMI Proceeds, Government
Insurance Proceeds, Condemnation Proceeds and Other Insurance Proceeds, received
by Countrywide in connection with the liquidation of a defaulted Mortgage Loan
through trustee's sale, foreclosure sale or otherwise, other than amounts
received following the acquisition of an REO Property pursuant to Section 4.13.
LPMI Fee: The portion of the Mortgage Interest Rate relating to an
LPMI Loan, which is set forth on the related Mortgage Loan Schedule, to be
retained by Countrywide to pay the premium due on the PMI Policy with respect to
such LPMI Loan.
LPMI Loan: Any Mortgage Loan with respect to which Countrywide is
responsible for paying the premium due on the related PMI Policy with the
proceeds generated by the LPMI Fee relating to such Mortgage Loan, as set forth
on the related Mortgage Loan Schedule.
MERS: Mortgage Electronic Registration Systems, Inc. or any successor
or assign thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The electronic system of recording transfers of mortgages
maintained by MERS.
MIC: A mortgage insurance certificate issued by HUD.
Missing Credit Documents: As defined in Section 2.04 hereof.
Monthly Advance: The advances made or required to be made by
Countrywide on any Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
5
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage Interest Rate: The annual rate at which interest accrues on
any Mortgage Loan and, with respect to an Adjustable Rate Mortgage Loan, as
adjusted from time to time in accordance with the provisions of the related
Mortgage Note.
Mortgage Loan: Any mortgage loan that is sold pursuant to this
Agreement, as evidenced by such mortgage loan's inclusion on the related
Mortgage Loan Schedule, which mortgage loan includes the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, PMI Proceeds
(if applicable), Government Insurance Proceeds (if applicable), Other Insurance
Proceeds, REO Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan, excluding the
servicing rights relating thereto. Unless the context requires otherwise, any
reference to the Mortgage Loans in this Agreement shall refer to the Mortgage
Loans constituting a Mortgage Loan Package.
Mortgage Loan Package: The Mortgage Loans sold to the Purchaser
pursuant to a Purchase Confirmation.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
interest rate payable to the Purchaser on each Remittance Date which shall equal
the Mortgage Interest Rate less the Servicing Fee and the LPMI Fee, if
applicable.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package,
the schedule of Mortgage Loans, in the form attached hereto as Exhibit E,
included therein and made a part of the related Purchase Confirmation, which
schedule shall include, the following information with respect to each Mortgage
Loan: (i) information sufficient to uniquely identify such Mortgage Loan; (ii)
the Mortgage Interest Rate as of the Cut-off Date; (iii) with respect to any
Adjustable Rate Mortgage Loan, the Gross Margin, the Periodic Rate Cap, the
Lifetime Rate Cap, the next Interest Adjustment Date and whether such Adjustable
Rate Mortgage Loan is a Convertible Mortgage Loan, (iv) with respect to a LPMI
Loan, the LPMI Fee, (v) the LTV at origination; (vi) the remaining term as of
the Cut-off Date and the original term of such Mortgage Loan, and (vii) any
other information pertaining to such Mortgage Loan as may be reasonably
requested by the Purchaser. The information set forth in the Mortgage Loan
Schedule relating to the Mortgage Interest Rate, with respect to any LPMI Loan
shall have a separate field for Mortgage Interest Rate, exclusive of the LPMI
Fee.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note.
6
OCC: The Office of the Comptroller of the Currency.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or 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 Countrywide, and delivered to
the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given.
Other Insurance Proceeds: Proceeds of any title policy, hazard policy,
pool policy or other insurance policy covering a Mortgage Loan, other than the
PMI Policy, 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 Countrywide would follow in servicing
mortgage loans held for its own account.
Pass-Through Transfer: The sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a trust to be formed as part of a publicly
issued or privately placed mortgage-backed securities transaction.
Payment Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
date on which an adjustment to the Monthly Payment on a Mortgage Note becomes
effective.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan,
the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Adjustment Date above or below the Mortgage Interest Rate previously in
effect, equal to the rate set forth on the Mortgage Loan Schedule per
adjustment.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
PMI Policy: A policy of private mortgage guaranty insurance relating
to a Mortgage Loan and issued by a Qualified Insurer.
PMI Proceeds: Proceeds of any PMI Policy.
Preliminary Mortgage Loan Package: The mortgage loans identified or
described in a Trade Confirmation, which, subject to the Purchaser's due
diligence as contemplated in Section 2.01, are intended to be sold under this
Agreement as a Mortgage Loan Package.
Preliminary Mortgage Loans: The mortgage loans constituting a
Preliminary Mortgage Loan Package.
Prepayment Interest Shortfall Amount: With respect to any Remittance
Date and Mortgage Loan that was subject to a Principal Prepayment in full or in
part during the related Principal Prepayment Period, which Principal Prepayment
was applied to such Mortgage Loan prior to such Mortgage Loan's Due Date in such
calendar month, the amount of interest (at the Mortgage Loan Remittance Rate)
that would have accrued on the amount of such Principal
7
Prepayment during the period commencing on the date as of which such Principal
Prepayment was applied to such Mortgage Loan and ending on the day immediately
preceding such Due Date, inclusive.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, excluding
any prepayment penalty or premium thereon (unless the Purchase Confirmation
provides otherwise), 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.
Purchase Confirmation: A letter agreement, substantially in the form
of Exhibit B hereto, executed by Countrywide and the Purchaser in connection
with the purchase and sale of each Mortgage Loan Package, which sets forth the
terms relating thereto including a description of the related Mortgage Loans
(including the Mortgage Loan Schedule), the purchase price for such Mortgage
Loans, the Closing Date and the Servicing Fee Rate.
Purchase Proceeds: The amount paid on the related Closing Date by the
Purchaser to Countrywide in exchange for the Mortgage Loan Package purchased on
such Closing Date as set forth in the applicable Purchase Confirmation.
Purchaser: The Person identified as the "Purchaser" in the preamble to
this Agreement or its successor in interest or any successor or assign to the
Purchaser under this Agreement as herein provided. Any reference to "Purchaser"
as used herein shall be deemed to include any designee of the Purchaser, so long
as such designation was made in accordance with the limitations set forth in
Section 8.07.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, which insurer is approved in such
capacity by an Agency.
Qualified Substitute Mortgage Loan: A mortgage loan that must, on the
date of such substitution, (i) have an unpaid principal balance, after deduction
of all scheduled payments due in the month of substitution (or if more than one
(1) mortgage loan is being substituted, an aggregate principal balance), not in
excess of the unpaid principal balance of the repurchased Mortgage Loan (the
amount of any shortfall will be deposited in the Custodial Account by
Countrywide in the month of substitution); (ii) have a Mortgage Interest Rate
not less than, and not more than 1% greater than, the Mortgage Interest Rate of
the repurchased Mortgage Loan; (iii) have a remaining term to maturity not
greater than, and not more than one year less than, the maturity date of the
repurchased Mortgage Loan; (iv) comply with each representation and warranty
(respecting individual Mortgage Loans) set forth in Section 3.02 hereof; (v)
shall be the same type as the Mortgage Loan (i.e., a Convertible Mortgage Loan
or a Fixed Rate Mortgage Loan).
Reconstitution Date: The date on which any or all of the Mortgage
Loans serviced under this Agreement shall be removed from this Agreement and
reconstituted as part of
8
a Whole Loan Transfer or a Pass-Through Transfer pursuant to Section 8.07
hereof. The Reconstitution Date shall be such date which the Purchaser shall
designate. On such date, the Mortgage Loans transferred shall cease to be
covered by this Agreement and Countrywide's servicing responsibilities shall
cease under this Agreement with respect to the related transferred Mortgage
Loans.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The eighteenth (18th) day of any month, beginning
with the month next following the month in which the related Cut-off Date
occurs, or if such eighteenth (18th) day is not a Business Day, the first
Business Day immediately following.
REO Disposition: The final sale by Countrywide of any REO Property or
the transfer of the management of such REO Property to the Purchaser as set
forth in Section 4.13.
REO Property: A Mortgaged Property acquired by Countrywide on behalf
of the Purchaser as described in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan, a price equal to
(i) the Stated Principal Balance of the Mortgage Loan plus (ii) interest on such
Stated Principal Balance at the Mortgage Loan Remittance Rate from the last date
through which interest has been paid and distributed to the Purchaser to the
date of repurchase, less amounts received or advanced in respect of such
repurchased Mortgage Loan which such amounts are being held in the Custodial
Account for distribution in the month of repurchase, plus (iii) any cost and
damages incurred by the trust in connection with any violation by such Mortgage
Loan of any predatory or abusive lending law.
Securities Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by Countrywide of its
servicing obligations, including the cost of (i) the preservation, restoration
and protection of the Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation of the
REO Property, (iv) with respect to Government Mortgage Loans, amounts advanced
to the Purchaser for which Countrywide may be entitled to receive reimbursement
from a government agency and (v) compliance with the obligations under this
Agreement including Section 4.09.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to Countrywide, which shall, for a period of
one full month, be equal to one-twelfth of the product of (i) the Servicing Fee
Rate and (ii) the Stated Principal Balance of such Mortgage Loan. Such fee shall
be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
computed. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the
9
Servicing Fee is payable solely from, the interest portion of such Monthly
Payment collected by Countrywide, or as otherwise provided herein. Subject to
the foregoing, and with respect to each Mortgage Loan, Countrywide shall be
entitled to receive its Servicing Fee through the disposition of any related REO
Property and the Servicing Fee payable with respect to any REO Property shall be
based on the Stated Principal Balance of the related Mortgage Loan at the time
of foreclosure.
Servicing Fee Rate: With respect to any Mortgage Loan, the rate per
annum set forth in the applicable Trade Confirmation or Purchase Confirmation.
Servicing LP: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as servicer
hereunder.
Servicing Officer: Any officer of Countrywide involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by Countrywide to
Purchaser upon request, as such list may from time to time be amended.
Stated Principal Balance: With respect to each Mortgage Loan as of any
date of determination: (i) the unpaid principal balance of the Mortgage Loan at
the related Cut-off Date after giving effect to payments of principal due on or
before such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal or advances in lieu thereof.
Trade Confirmation: A letter agreement substantially in the form of
Exhibit D hereto executed by Countrywide and the Purchaser prior to the
applicable Closing Date confirming the terms of a prospective purchase and sale
of a Mortgage Loan Package.
Transaction Documents: With respect to any Mortgage Loan, the related
Trade Confirmation, the related Purchase Confirmation and this Agreement.
Underwriting Guidelines: As defined in the respective Trade
Confirmation.
Updated LTV: With respect to any Mortgage Loan, the outstanding
principal balance of such Mortgage Loan as of the date of determination divided
by the value of the related Mortgaged Property as determined by a recent
appraisal of the Mortgaged Property.
VA: The Department of Veterans Affairs.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third party which sale or transfer is not a
Pass-Through Transfer.
PRE-CLOSING AND CLOSING PROCEDURES
Due Diligence by the Purchaser.
Review of Credit File. Prior to the Closing Date, Countrywide shall make
available to the Purchaser the Credit File for each Preliminary Mortgage Loan in
the related Preliminary Mortgage Loan Package. The Purchaser shall have the
right to review the Credit File for each
10
such Preliminary Mortgage Loan, at Countrywide's offices or such other location
agreed upon by the Purchaser and Countrywide, for the purpose of determining
whether each Preliminary Mortgage Loan conforms in all material respects to the
applicable terms contained in the Transaction Documents, which determination
shall be made in the Purchaser's reasonable and good faith discretion. In the
event that the Purchaser rejects any Preliminary Mortgage Loan based on such
review, Countrywide shall have the right, in its sole discretion, to substitute
replacement Preliminary Mortgage Loans satisfying the requirements set forth
above, and the Purchaser shall have the right to review any such replacement
Preliminary Mortgage Loan(s) in the manner contemplated above. The Purchaser
shall use its reasonable best efforts to conduct its due diligence, and to
convey the results thereof to Countrywide, within the time and in the manner
necessary to permit Countrywide to rebut or cure any Preliminary Mortgage Loan
or to substitute replacement Preliminary Mortgage Loans as permitted herein.
Rejection of Preliminary Mortgage Loans. Without limiting the generality of the
foregoing, in the event that the Purchaser rejects Preliminary Mortgage Loans
(i) comprising more than fifteen percent (15%) of the related Preliminary
Mortgage Loan Package (as measured by unpaid principal balance), or (ii) for
reasons other than as permitted under this Agreement or the Trade Confirmation,
Countrywide may, in its reasonable and good faith discretion, rescind its offer
to sell any of the Preliminary Mortgage Loans relating thereto to the Purchaser
and Countrywide shall have no liability therefor.
Identification of Mortgage Loan Package.
At least three (3) Business Days prior to the Closing Date, the
Purchaser shall identify those Preliminary Mortgage Loans that the Purchaser
intends to be included in the Mortgage Loan Package.
Post-Closing Due Diligence.
In the event that the Purchaser fails to complete its due diligence,
as contemplated in Section 2.01, with respect to any Preliminary Mortgage Loan,
the Purchaser and Countrywide may nonetheless mutually agree to the purchase and
sale of such Mortgage Loan as contemplated hereunder, and upon such mutual
agreement, if the Purchaser provides notice to Countrywide of such Mortgage Loan
and such Mortgage Loan is identified as such in the Purchase Confirmation (as
used therein, the "Pending Mortgage Loans"), the Purchaser shall have the right
to review the related Credit File for such Mortgage Loan within ten (10)
Business Days after the Closing Date and, based on such review and within such
ten (10) Business Days period, request that Countrywide repurchase any Pending
Mortgage Loan that the Purchaser reasonably and in good faith contends does not
conform in all material respects to the applicable terms of the Transaction
Documents. Countrywide shall have ten (10) Business Days from the date of its
receipt of such request to either (a) repurchase such Mortgage Loan at the
purchase price for such Mortgage Loan (as calculated under the related
Transaction Documents, as applicable) plus accrued and unpaid interest, or (b)
provide evidence reasonably satisfactory to the Purchaser that such Mortgage
Loan does in fact conform to the terms of the Transaction Documents, as
applicable. In the event that Countrywide must repurchase any Mortgage Loan in
accordance with this Section 2.03 or pursuant to any other applicable term
contained in the Transaction Documents, Countrywide may, at its option,
substitute replacement Mortgage Loans conforming
11
in all material respects to the applicable terms contained in the related
Transaction Documents. The rights and remedies set forth in this Section 2.03
are in addition to those set forth in Section 3.03.
Credit Document Deficiencies Identified During Due Diligence.
If, with respect to a Mortgage Loan Package, the related Purchase
Confirmation identifies any Mortgage Loan for which the related Credit File is
missing material documentation (as used therein, the "Missing Credit
Documents"), Countrywide agrees to use its best efforts to procure each such
Missing Credit Document within thirty (30) days following a written notice of
such deficiency. In the event of a default by a Mortgagor or any material
impairment of the Mortgaged Property, in either case directly arising from a
breach of Countrywide's obligation to deliver the Missing Credit Document within
the time specified above, Countrywide shall repurchase such Mortgage Loan at the
Repurchase Price.
Delivery of Collateral Files.
Custodial Agreement. Countrywide shall, on or before three (3) Business Days
prior to the related Closing Date, deliver and release to the Custodian the
Collateral File for each Mortgage Loan in the Mortgage Loan Package and shall
execute, and cause the Custodian to execute, the Custodial Agreement.
Countrywide shall pay all fees and expenses of the Custodian prior to the
related Closing Date; however, it is understood that after the related Closing
Date, the Purchaser shall be solely responsible for fees and expenses of the
Custodian.
Missing Collateral Documents. In the event that any of the original Collateral
Documents set forth in clauses (3) through (7) of Exhibit A hereto are not
delivered to the Custodian on or before the Closing Date (each, a "Missing
Collateral Document"), then Countrywide shall have (i) with respect to any
Missing Collateral Document sent for recording, nine (9) months from the related
Closing Date, or (ii) with respect to all other Missing Collateral Documents,
one-hundred twenty (120) days from the Closing Date, to deliver to the Purchaser
such Missing Collateral Documents; provided, however, that with respect to any
Government Mortgage Loan, Countrywide agrees to procure each such Missing
Collateral Document within sixty (60) days following the FHA's or the VA's, as
applicable, deadline for procuring such documents. In the event the public
recording office is delayed in returning any original document, Countrywide
shall deliver to the Custodian within one hundred eighty (180) days of its
submission for recordation, a copy of such document and an Officer's
Certificate, which shall (i) identify the recorded document; (ii) state that the
recorded document has not been delivered to the Custodian due solely a delay by
the public recording office, and (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation. Notwithstanding the foregoing, Countrywide shall not
be deemed to be in breach of this Agreement if its failure to deliver to the
Purchaser any Missing Collateral Document within the time specified above is due
solely to (i) the failure of the applicable recorder's office to return a
Missing Collateral Document that was sent for recording or (ii) the failure of
the title insurer to issue and deliver the original mortgagee title policy,
except where such refusal to issue the policy is based on a claim that the title
insurer is under no obligation to issue such policy. However, if Countrywide
cannot deliver such original or clerk-certified copy of any document submitted
for recordation to the appropriate public recording office within the specified
time for any reason, within thirty (30) days after receipt of written
notification of such failure from the
12
Purchaser, Countrywide shall repurchase the related Mortgage Loan at the price
and in the manner specified in Section 3.03.
Other Documents. Countrywide shall forward to the Purchaser in a timely manner
any original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
upon execution and, if applicable, recordation thereof.
Purchase Confirmation.
Upon confirmation with the Purchaser of a Mortgage Loan Package,
Countrywide shall prepare and deliver to the Purchaser for execution the related
Purchase Confirmation, executed by an authorized signatory of Countrywide.
Closing.
The Closing of each Mortgage Loan Package shall take place on the
related Closing Date and shall be subject to the satisfaction of each of the
following conditions, unless otherwise waived by the prejudiced party(ies):
All of the representations and warranties of Countrywide under this Agreement
shall be true and correct in all material respects as of the related Closing
Date and no event shall have occurred that, with notice or the passage of time,
would constitute a default under this Agreement;
All of the representations and warranties of the Purchaser under this Agreement
shall be true and correct in all material respects as of the related Closing
Date and no event shall have occurred that, with notice or the passage of time,
would constitute a default under this Agreement; and
Both parties shall have executed the related Purchase Confirmation and Custodial
Agreement.
Payment of the Purchase Proceeds.
Subject to the conditions set forth in Section 2.07, and in
consideration for the Mortgage Loan Package to be purchased by the Purchaser on
the related Closing Date, the Purchaser shall pay to Countrywide on such Closing
Date the Purchase Proceeds by wire transfer of immediately available funds to
the account designated by Countrywide on or before the Funding Deadline.
Entitlement to Payments on the Mortgage Loans.
With respect to any Mortgage Loan purchased hereunder, the Purchaser
shall be entitled to (a) all scheduled principal due after the related Cut-off
Date; (b) all other recoveries of principal collected after the related Cut-off
Date, except for (i) recoveries of principal collected after the Cut-off Date
and prior to the Closing Date that are reflected in the Mortgage Loan Schedule,
and (ii) all scheduled payments of principal due on or before the related
Cut-off Date; and (c) all payments of interest on such Mortgage Loan net of
interest at the Servicing Fee Rate and the LPMI Fee, if applicable (minus that
portion of any such payment that is allocable to the period prior to the related
Cut-off Date).
13
Payment of Costs and Expenses.
The Purchaser and Countrywide shall each bear its own costs and
expenses in connection with the purchase and sale of the Mortgage Loans
including any commissions due its sales personnel, the legal fees and expenses
of its attorneys and any due diligence expenses. Without limiting the generality
of the foregoing, any costs and expenses incurred in connection with recording
the Assignment of Mortgage or any subsequent assignment thereof shall be paid
for by the Purchaser.
MERS Mortgage Loans and the MERS System.
Notwithstanding anything contained in this Agreement to the contrary, with
respect to any MERS Mortgage Loan sold to the Purchaser by Countrywide pursuant
to this Agreement, Countrywide shall cause the registration of such MERS
Mortgage Loan to be changed on the MERS System to reflect the Purchaser as the
beneficial owner of such MERS Mortgage Loan. The foregoing obligation of
Countrywide shall be in lieu of Countrywide delivering to the Purchaser an
Assignment of Mortgage for such MERS Mortgage Loan. With respect to the Mortgage
and intervening assignments related to any MERS Mortgage Loan, Countrywide
shall, in accordance with Section 2.05, provide the Purchaser with the original
Mortgage with evidence of registration with MERS and, as applicable, the
originals of all intervening assignments of the Mortgage with evidence of
recording thereon prior to the registration of the Mortgage Loan with the MERS
System.
In connection with the MERS System, Countrywide is hereby authorized and
empowered, in its own name, to register, or change the registration of any MERS
Mortgage Loan to effectuate such registration. Further, Countrywide is
authorized to cause the removal of any MERS Mortgage Loan from such
registration, and to execute and deliver on behalf of itself and the Purchaser,
any and all instruments of assignment and comparable instruments with respect to
any registration and/or removal of such MERS Mortgage Loan on or from the MERS
System.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Representations and Warranties Respecting Countrywide.
Countrywide represents, warrants and covenants to the Purchaser that,
as of each Closing Date:
Organization and Standing. Countrywide is duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is organized and
is qualified and licensed to transact business in and is in good standing under
the laws of each state where each Mortgaged Property is located to the extent
necessary to ensure the enforceability of each Mortgage Loan and the servicing
of the Mortgage Loan in accordance with the terms of this Agreement;
Due Authority. Countrywide has the full power and authority to (i) perform and
enter into and consummate all transactions contemplated by this Agreement and
(ii) to sell each Mortgage Loan; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered pursuant to
this Agreement) by Countrywide and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
14
evidences the valid, binding and enforceable obligation of Countrywide; and all
requisite corporate action has been taken by Countrywide to make this Agreement
valid and binding upon Countrywide in accordance with its terms;
No Conflict. Neither the acquisition or origination of the Mortgage Loans by
Countrywide, the sale of the Mortgage Loans to the Purchaser, the consummation
of the transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Agreement, will conflict with or result in
a breach of any of the terms, conditions or provisions of Countrywide's
certificate of incorporation or by-laws or result in a material breach of any
legal restriction or any material agreement or instrument to which Countrywide
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 material law, rule, regulation, order, judgment or decree to which
Countrywide or its property is subject;
Approved Seller. Countrywide is an approved seller/servicer for each Agency in
good standing and is a mortgagee approved by the Secretary of HUD. No event has
occurred, including a change in insurance coverage, which would make Countrywide
unable to comply with Xxxxxx Xxx, Xxxxxxx Mac or HUD eligibility requirements;
No Pending Litigation. There is no action, suit, proceeding, investigation or
litigation pending or, to Countrywide's knowledge, threatened, which either in
any one instance or in the aggregate, if determined adversely to Countrywide
would materially and adversely affect the sale of the Mortgage Loans to the
Purchaser, the ability of Countrywide to service the Mortgage Loans hereunder in
accordance with the terms hereof, or Countrywide's ability to perform its
obligations under this Agreement; and
No Consent Required. No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by Countrywide, of or compliance by Countrywide with, this Agreement
or the consummation of the transactions contemplated by this Agreement, or if
required, such consent, approval, authorization or order has been obtained prior
to the related Closing Date.
Representations and Warranties Regarding Individual Mortgage Loans.
With respect to each Mortgage Loan (unless otherwise specified below),
Countrywide represents and warrants to the Purchaser as of the related Closing
Date that:
Mortgage Loan Schedule. The information contained in the Mortgage Loan Schedule
and the related electronic data file provided on or one (1) Business Day prior
to the related Closing Date is complete, true and correct in all material
respects;
No Delinquencies or Advances. All payments required to be made prior to the
related Cut-off Date for such Mortgage Loan under the terms of the Mortgage Note
have been made; Countrywide has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan; and there has been no
delinquency of more than thirty (30) days in any payment by the Mortgagor
thereunder during the last twelve (12) months;
15
Taxes, Assessments, Insurance Premiums and Other Charges. There are no
delinquent taxes, assessments, ground rents, insurance premiums, leasehold
payments, and to the best of Countrywide's knowledge, water charges, sewer rents
or other outstanding charges affecting the related Mortgaged Property;
No Modifications. The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments that have been or will be recorded, if necessary to protect the
interests of the Purchaser, and that have been or will be delivered to the
Purchaser, all in accordance with this Agreement. The substance of any such
waiver, alteration or modification has been approved by the primary mortgage
guaranty insurer, if any, and by the title insurer, to the extent required by
the related policy and its terms are reflected on the Mortgage Loan Schedule. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the primary mortgage insurer, if any, and the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Collateral File and the terms of which are reflected in
the Mortgage Loan Schedule if executed prior to the Closing Date;
No Defenses. The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
Hazard and Flood Insurance. All buildings upon the Mortgaged Property are
insured by an insurer acceptable to an Agency against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, and such insurer is licensed to do business in
the state where the Mortgaged Property is located. All such insurance policies
contain a standard mortgagee clause naming Countrywide, its successors and
assigns as mortgagee, and all premiums thereon have been paid. If, upon the
origination of the Mortgage Loan, the Mortgaged Property was, or was
subsequently deemed to be, in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available), a flood insurance policy that meets
the requirements of the current guidelines of the Federal Insurance
Administration (or any successor thereto) and conforms to the requirements of an
Agency is in effect. The Mortgage obligates the Mortgagor thereunder to maintain
all such insurance at the Mortgagor's expense and, upon the failure of the
Mortgagor to do so, the holder of the Mortgage is authorized to maintain such
insurance at the Mortgagor's expense and to seek reimbursement therefor from the
Mortgagor;
Compliance with Applicable Law. Each Mortgage Loan at the time of origination
complied in all material respects with applicable local, state and federal laws
including, without limitation, usury, predatory and abusive lending, truth in
lending, real estate settlement procedures, consumer credit protection, equal
credit opportunity and disclosure laws applicable to the Mortgage Loan;
No Release of Mortgage. The Mortgage has not been satisfied, canceled,
subordinated, or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of
16
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission;
Enforceability of Mortgage Documents. The Mortgage Note and the related Mortgage
are genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or similar
laws;
Valid First Lien. Each related Mortgage is a valid, subsisting and enforceable
first lien on the related Mortgaged Property, including all improvements on the
Mortgaged Property. The lien of the Mortgage is subject only to:
(i) the lien of current real property taxes and assessments not
yet due and payable;
(ii) if the Mortgaged Property consists of Co-op Shares, any lien
for amounts due to the cooperative housing corporation for unpaid
assessments, or charges or any lien of any assignment of rents or
maintenance expenses secured by the real property owned by the cooperative
housing corporation;
(iii) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording
that are acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and that do not adversely affect the
Appraised Value (as evidenced by an appraisal referred to in such
definition) of the Mortgaged Property set forth in such appraisal; and
(iv) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property; and
Disbursements of Proceeds. The proceeds of the Mortgage Loan have been fully
disbursed, and there is no requirement for future advances thereunder, and any
and all requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage Loan and
recording the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;
Sole Owner. Countrywide is the sole owner and holder of the Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and Countrywide has good and
marketable title thereto, and is transferring and selling the Mortgage Loan to
the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest not specifically set forth in the related Mortgage
Loan Schedule and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to the terms of this Agreement;
Title Insurance. Each Mortgage Loan is covered by a lender's title insurance
policy acceptable to an Agency, issued by a title insurer acceptable to an
Agency and qualified to do business in
17
the jurisdiction where the related Mortgaged Property is located, insuring
(subject to the exceptions contained in Section 3.02(j)(i), (ii) and (iii)
above) Countrywide, its successors and assigns as to the first priority lien of
the Mortgage. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. Countrywide is the sole insured of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in full force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and no prior holder of the related
Mortgage, including Countrywide, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy;
No Default. There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration, and
Countrywide has not waived any default, breach, violation or event of
acceleration;
No Mechanics' Liens. There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
Origination and Collection Practices. The origination, servicing, and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage
have been in all respects legal, proper, prudent and customary in the mortgage
origination and servicing business. With respect to escrow deposits and Escrow
Payments, if any, all such payments are in the possession of, or under the
control of, Countrywide and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. No
escrow deposits or Escrow Payments or other charges or payments due Countrywide
have been capitalized under any Mortgage or the related Mortgage Note. With
respect to Adjustable Rate Mortgage Loans, the terms of the related Mortgage
Notes pertaining to interest adjustments, payment adjustments and adjustments of
the outstanding principal balance, if any, are enforceable, and all Mortgage
Interest Rate adjustments have been made in strict compliance with state and
federal law and the terms of the related Mortgage Note. Any interest required to
be paid pursuant to state and local law has been properly paid and credited;
No Condemnation or Damage. The Mortgaged Property is free of material damage and
waste and there is no proceeding pending for the total or partial condemnation
thereof;
Customary and Enforceable Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby including (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure; there is no homestead or other exemption (other than under
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended) available to a
Mortgagor which would interfere with the right to sell the Mortgaged Property at
a trustee's sale or the right to foreclose the Mortgage;
18
Collateral. The Mortgage Note is not and has not been secured by any collateral
except the lien of the corresponding Mortgage;
Appraisal. Unless the Mortgage Loan was underwritten pursuant to one of
Countrywide's streamline documentation programs, the Credit File contains an
appraisal of the related Mortgaged Property signed prior to the approval of the
Mortgage Loan application by an appraiser who meets the minimum requisite
qualifications of an Agency for appraisers, duly appointed by the originator,
that had no interest, direct or indirect in the Mortgaged Property, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan; the appraisal is in a form acceptable to an Agency, with such riders as
are acceptable to such Agency;
Trustee for Deed of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
Private Mortgage Insurance, FHA Insurance and VA Guarantees. No Mortgage Loan
has an LTV greater than ninety-five percent (95%). Each Conventional Mortgage
Loan with an LTV at origination in excess of eighty percent (80%) is and will be
subject to a PMI Policy, which insures that portion of the Mortgage Loan over
seventy-five percent (75%) of the Appraised Value of the related Mortgaged
Property. All provisions of such PMI Policy have been and are being complied
with, such policy is in full force and effect, and all premiums due thereunder
have been paid. Any Mortgage subject to any such PMI Policy obligates the
Mortgagor thereunder to maintain such insurance and to pay all premiums and
charges in connection therewith or, in the case of a lender paid mortgage
insurance policy, the premiums and charges are included in the Mortgage Interest
Rate for the Mortgage Loan. Each Government Mortgage Loan either has, or will
have in due course, a valid and enforceable MIC or LGC, as applicable and, in
each case, all premiums due thereunder have been paid;
Lawfully Occupied. To the best of Countrywide's knowledge, the Mortgaged
Property is lawfully occupied under applicable law. To the best of Countrywide's
knowledge, all inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same including certificates of
occupancy, have been made or obtained from the appropriate authorities;
Assignment of Mortgage. Except for the absence of recording information, the
Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located;
Consolidation of Future Advances. Any future advances made to the Mortgagor
prior to the Cut-off Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
Form of Mortgage Note and Mortgage. The Mortgage Note and Mortgage are on forms
acceptable to an Agency;
19
Section 32 Loans. No Mortgage Loan is subject to the Home Ownership and Equity
Protection Act of 1994 or any similar state or local statutes or regulations
related to "high cost" mortgage loans or "predatory" or "abusive" lending (as
such terms are defined in the applicable statute or regulation);
(bb) Security Agreements. Any security agreement, chattel
mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a
valid, subsisting and enforceable first lien and first
priority security interest on the property described
therein;
(cc) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of
the Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property and no
improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part
of the Mortgaged Property is in violation of any applicable
zoning law or regulation;
(dd) Payment Terms. Payments commenced no more than sixty (60)
days after the funds were disbursed to the --------------
Mortgagor in connection with the Mortgage Loan. The Mortgage
Loans have an original term to maturity of not more than
thirty (30) years, with interest payable in arrears each
month. As to each Adjustable Rate Mortgage Loan on each
applicable Interest Adjustment Date, the Mortgage Interest
Rate adjusts in accordance with the terms of the related
Mortgage Note. As to each Adjustable Rate Mortgage Loan,
each Mortgage Note requires a monthly payment which is
sufficient, during the period prior to the first adjustment
to the Mortgage Interest Rate, to fully amortize the
outstanding principal balance as of the first day of such
period over the then remaining term of such Mortgage Note
and to pay interest at the related Mortgage Interest Rate.
No Mortgage Loan contains terms or provisions which would
result in negative amortization;
(ee) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has
not notified Countrywide, and Countrywide has no knowledge,
of any relief requested by or provided to the Mortgagor
under the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended, or any similar state law;
(ff) Balloon Payments, Graduated Payments or Contingent
Interests. With respect to any Mortgage Loan which is
identified on the Mortgage Loan Schedule as a Balloon
Mortgage Loan, the Mortgage Note is payable in Monthly
Payments based on a thirty (30) year amortization schedule
with a final Monthly Payment substantially greater than the
preceding Monthly Payment which is sufficient to amortize
the remaining principal balance of the Balloon Mortgage Loan
and such final Monthly Payment shall not be due prior to one
hundred eighty (180) months following the origination of the
Balloon Mortgage Loan. The Mortgage Loan is not a
20
graduated payment mortgage loan and the Mortgage Loan does
not have a shared appreciation or other contingent interest
feature;
(gg) No Bankruptcy. No Mortgagor was a debtor in any state or
federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated and, to the best of
Countrywide's knowledge, following the date of origination
of the Mortgage Loan, the Mortgagor with respect to the
Mortgage Loan was not a debtor in any state or federal
bankruptcy or insolvency proceeding;
(hh) No Violation of Environmental Laws. To the best of
Countrywide's knowledge, there is no pending action or
proceeding directly involving the Mortgaged Property in
which compliance with any environmental law, rule or
regulation is an issue; and to the best of Countrywide's
knowledge, nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said
property;
(ii) Texas Refinance Mortgage Loans. No Mortgage Loan was
originated in the state of Texas under Article XVI, Section
50(a)(6) of the Texas Constitution (a "Texas Refinance
Loan");
(jj) Georgia Fair Lending Act. No Mortgage Loan secured by
property located in Georgia and originated on or after
October 1, 2002 and on or prior to March 7, 2003, meets the
definition of a "home loan" under the Georgia Fair Lending
Act;
(kk) Qualified Mortgages. Each Mortgage Loan is a "qualified
mortgage" within Section 860G(a)(3) of the Code;
(ll) Interest Calculation. Interest on each Mortgage Loan is
calculated on the basis of a 360-day year consisting of
twelve 30-day months;
(mm) Due on Sale. The Mortgage contains an enforceable provision,
to the extent not prohibited by federal law as of the date
of such Mortgage, for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without
the prior written consent of the mortgagee thereunder;
(nn) Single Premium Credit Life Insurance. None of the proceeds
of the Mortgage Loan were used to finance single premium
credit life insurance policies;
(oo) Origination/Doing Business. The Mortgage Loan was originated
by a savings and loan association, a savings bank, a
commercial bank, a credit union, an insurance company, or
similar institution that is supervised and examined by a
federal or state authority or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing
21
Act. All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed
of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and (2) either
(A) organized under the laws of such state, (B) qualified to
do business in such state, (C) federal savings and loan
associations or national banks having principal offices in
such state, or (D) not doing business in such state;
(pp) No Fraud. No fraud, error, omission, misrepresentation, or
similar occurrence with respect to a Mortgage Loan has taken
place on the part of Countrywide or to the best of
Countrywide's knowledge, the Mortgagor, the appraiser, any
builder, or any developer, or any other party involved in
the origination of the Mortgage Loan or in the application
of any insurance in relation to such Mortgage Loan;
(qq) Location and Type of Mortgaged Property. The Mortgaged
Property consists of a contiguous parcel of real property
with a detached single family residence erected thereon, or
a two- to four-family dwelling, or an individual condominium
unit in a condominium project, or an individual unit in a
planned unit development, or in the case of Mortgage Loans
secured by Co-op Shares, leases or occupancy agreements,
provided, however, that any condominium project or planned
unit development shall conform with the applicable
requirements of an Agency regarding such dwellings, and no
residence or dwelling is a mobile home or a manufactured
dwelling. As of the respective appraisal date for each
Mortgaged Property, no portion of the Mortgaged Property was
being used for commercial purposes. If the Mortgaged
Property is a condominium unit or a planned unit development
(other than a de minimus planned unit development) such
condominium or planned unit development project meets
eligibility requirements of an Agency or is located in a
condominium or planned unit development project which has
received project approval of an Agency;
(rr) Underwriting. Each Mortgage Loan was generally underwritten
in accordance with the Underwriting Guidelines;
(ss) Buy-down Mortgage Loans. The Mortgage Loan is not subject to
a buy-down agreement;
(tt) Prepayment Penalties. If the Mortgage Loan is a Mortgage
Loan subject to a prepayment premium, enforcing the
Mortgagor's obligation to pay the prepayment premium in
connection with the Principal Prepayment will not violate
any applicable state or local statute, regulation, or rule;
(uu) The Mortgagor. The Mortgagor is one or more natural persons
and/or trustees for an Illinois land trust or a trustee
under a "living trust"
22
and such "living trust" is in compliance with Xxxxxx Xxx or
Xxxxxxx Mac guidelines. In the event the Mortgagor is a
trustee, the borrower is a natural person; and
(vv) Leaseholds. The Mortgage Loan is not secured by a leasehold
interest in the Mortgaged Property.
Remedies for Breach of Representations and Warranties.
Notice of Breach. The representations and warranties set forth in Sections 3.01
and 3.02 shall survive the sale of the Mortgage Loans to the Purchaser and shall
inure to the benefit of the Purchaser, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Collateral Documents or Credit File. Upon
discovery by either Countrywide or the Purchaser of a breach of any of the
foregoing representations and warranties that materially and adversely affects
the value of one or more of the related Mortgage Loans, the party discovering
such breach shall give prompt written notice to the other. Any such breach or
missing Collateral Document that causes a Mortgage Loan not to be a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code shall be deemed
to materially and adversely affect the value of such Mortgage Loan.
Cure or Repurchase. Within ninety (90) days from the earlier of either discovery
by or notice to Countrywide of a breach of a representation or warranty that
materially and adversely affects the value of a Mortgage Loan or the Mortgage
Loans, Countrywide shall use its best efforts to cure such breach in all
material respects, and, if such breach cannot be cured, Countrywide shall, at
the Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
In the event that a breach shall involve any representation or warranty set
forth in Section 3.01 and such breach cannot be cured within ninety (90) days of
the earlier of either discovery by or notice to Countrywide of such breach, all
of the Mortgage Loans shall, at the Purchaser's option, be repurchased by
Countrywide at the Repurchase Price.
Substitution or Repurchase. If the breach shall involve a representation or
warranty set forth in Section 3.02, Countrywide may, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan and substitute in its
place a Qualified Substitute Mortgage Loan or Loans. If Countrywide has no
Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage
Loan. Notwithstanding any of the foregoing, if a breach would cause the Mortgage
Loan to be other than a "qualified mortgage," as defined in Section 860G(a)(3)
of the Code, any such repurchase or substitution must occur within sixty (60)
days from the date the breach was discovered unless such breach is cured during
such period. Any repurchase of a Mortgage Loan(s) pursuant to the provisions of
this Section 3.03 shall be accomplished by deposit in the Custodial Account of
the amount of the Repurchase Price for distribution to the Purchaser on the next
scheduled Remittance Date, after deducting therefrom any amount received in
respect of such repurchased Mortgage Loan or Loans and being held in the
Custodial Account for future distribution. At the time of repurchase or
substitution, the Purchaser and Countrywide shall arrange for the reassignment
of such Mortgage Loan and release of the related Collateral File to Countrywide
and the delivery to Countrywide of any documents held by the Purchaser or its
designee relating to such Mortgage Loan. In the event Countrywide determines to
substitute a Qualified Substitute Mortgage Loan for a repurchased Mortgage Loan,
Countrywide shall, simultaneously with such reassignment, give written notice to
the Purchaser that substitution has taken place and identify the Qualified
Substitute Mortgage Loan(s). In
23
connection with any such substitution, Countrywide shall be deemed to have made
as to such Qualified Substitute Mortgage Loan(s) the representations and
warranties except that all such representations and warranties set forth in this
Agreement shall be deemed made as of the date of such substitution. Countrywide
shall effect such substitution by delivering to the Purchaser the Collateral
Documents for such Qualified Substitute Mortgage Loan(s). Countrywide shall
deposit in the Custodial Account the Monthly Payment less the Servicing Fee due
on such Qualified Substitute Mortgage Loan(s) in the month following the date of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall be retained by Countrywide.
For the month of substitution, distributions to the Purchaser shall include the
Monthly Payment due on any substituted Mortgage Loan in the month of
substitution, and Countrywide shall thereafter be entitled to retain all amounts
subsequently received by Countrywide in respect of such substituted Mortgage
Loan.
For any month in which Countrywide substitutes a Qualified Substitute
Mortgage Loan for a repurchased Mortgage Loan, Countrywide shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all substituted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by Countrywide in the month of
substitution pursuant to Section 5.01. Accordingly, on the date of such
substitution, Countrywide shall deposit from its own funds into the Custodial
Account an amount equal to the amount of such shortfall.
Indemnification. In addition to such repurchase or substitution obligation,
Countrywide shall indemnify the Purchaser and hold it harmless against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and other costs and expenses resulting from
any claim, demand, defense or assertion based on or grounded upon, or resulting
from, a material breach of the representations and warranties of Countrywide
contained in Sections 3.01 and 3.02.
Sole Remedy. With respect to the breach of a representation and warranty set
forth in Section 3.02 with respect to a Mortgage Loan, the obligation under this
Section 3.03 of Countrywide to cure, repurchase or replace such Mortgage Loan
and to indemnify the Purchaser shall constitute the sole remedies against
Countrywide respecting such breach available to the Purchaser.
Accrual of Cause of Action. Any cause of action against Countrywide relating to
or arising out of the breach of any representations and warranties made in
Sections 3.01 or 3.02 shall accrue as to any Mortgage Loan upon (i) discovery of
such breach by the Purchaser or notice thereof by Countrywide to the Purchaser,
(ii) failure by Countrywide to cure such breach or repurchase such Mortgage Loan
as specified above, and (iii) demand upon Countrywide by the Purchaser for
compliance with the relevant provisions of this Agreement.
Repurchase of Convertible Mortgage Loans.
In the event a Mortgagor exercises the option to convert a Convertible
Mortgage Loan to a Fixed Rate Mortgage Loan in accordance with the terms of the
related Mortgage Note, Countrywide shall repurchase such Convertible Mortgage
Loan within thirty (30) days of such conversion taking effect at a price equal
to on hundred percent (100%) of the unpaid principal balance of such Convertible
Mortgage Loan at the time of such conversion plus accrued interest
24
thereon through the last day of the month of repurchase at the Mortgage Loan
Remittance Rate; provided, however, no interest shall be due and payable if a
Convertible Mortgage Loan is repurchased on the first day of a month. Any
repurchase of a Convertible Mortgage Loan(s) pursuant to the foregoing
provisions of this Section 3.04 shall be accomplished by deposit in the
Custodial Account of the amount of said repurchase price for distribution to the
Purchaser on the next scheduled Remittance Date.
Representations and Warranties Respecting the Purchaser.
The Purchaser represents, warrants and covenants to Countrywide that,
as of each Closing Date:
Organization and Standing. The Purchaser is duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is organized and
is qualified to transact business in and is in good standing under the laws of
each state in which the nature of the business transacted by it or the character
of the properties owned or leased by it requires such qualification;
Due Authority. The Purchaser has the full power and authority to perform, and to
enter into and consummate, all transactions contemplated by this Agreement; the
Purchaser has the full power and authority to purchase and hold each Mortgage
Loan;
No Conflict. Neither the acquisition of the Mortgage Loans by the Purchaser
pursuant to this Agreement, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and conditions of
this Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Purchaser's charter or by-laws or result in a
material breach of any legal restriction or any material agreement or instrument
to which the Purchaser 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 material law, rule, regulation, order, judgment
or decree to which the Purchaser or its property is subject;
No Pending Litigation. There is no action, suit, proceeding, investigation or
litigation pending or, to the Purchaser's knowledge, threatened, which either in
any one instance or in the aggregate, if determined adversely to the Purchaser
would adversely affect the purchase of the Mortgage Loans by the Purchaser
hereunder, or the Purchaser's ability to perform its obligations under this
Agreement; and
No Consent Required. No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Purchaser of or compliance by the Purchaser with this
Agreement or the consummation of the transactions contemplated by this Agreement
(including, but not limited to, any approval from HUD), or if required, such
consent, approval, authorization or order has been obtained prior to the related
Closing Date.
Securities. Without conceding that the Mortgage Loans are securities, the
Purchaser hereby makes the following representations, warranties and agreements,
which shall have been deemed to have been made as of each Closing Date:
the Purchaser understands that the Mortgage Loans have not been registered under
the 1933 Act or the securities laws of any state;
25
the Purchaser is acquiring the Mortgage Loans for its own account without a view
towards a public distribution;
the Purchaser considers itself a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of investment in the
Mortgage Loans;
the Purchaser has been furnished with all information regarding the Mortgage
Loans which it has requested from Countrywide; and
neither the Purchaser nor anyone acting on its behalf offered, transferred,
pledged, sold or otherwise disposed of any Mortgage Loan, any interest in any
Mortgage Loan or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of any Mortgage Loan, any
interest in any Mortgage Loan or any other similar security from, or otherwise
approached or negotiated with respect to any Mortgage Loan, any interest in any
Mortgage Loan or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution of the
Mortgage Loans under the 1933 Act or which would render the disposition of any
Mortgage Loan a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, nor will it act, nor has it authorized or will it authorize
any person to act, in such manner with respect to the Mortgage Loans.
Indemnification by the Purchaser.
The Purchaser shall indemnify Countrywide and hold it harmless against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Purchaser's representations and warranties
contained in Section 3.05 above.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Countrywide to Act as Servicer.
Countrywide, as independent contract servicer, shall service and
administer Mortgage Loans sold pursuant to this Agreement in accordance with the
Accepted Servicing Practices and the terms of this Agreement 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 Countrywide may deem
necessary or desirable and consistent with the terms of this Agreement. In
servicing and administering the Mortgage Loans, Countrywide shall employ
procedures in accordance with the customary and usual standards of practice of
prudent mortgage servicers. Notwithstanding anything to the contrary contained
herein, in servicing and administering Government Mortgage Loans, Countrywide
shall not take, or fail to take, any action that would result in the denial of
coverage under any LGC or MIC, as applicable. Without limiting the generality of
the foregoing, with respect to any Government Mortgage Loan, Countrywide shall
be permitted to deviate from the servicing practices set forth herein if such
deviation would be consistent with the servicing practices employed in
connection with any similar mortgage loan constituting a part of a GNMA
mortgage-backed security.
26
In accordance with the terms of this Agreement, Countrywide 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 Countrywide's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that Countrywide shall not permit any
modification, waiver, or forbearance with respect to any Mortgage Loan that
would decrease the Mortgage Interest Rate (other than by adjustments required by
the terms of the Mortgage Note), result in the denial of coverage under a PMI
Policy, LGC or MIC, defer or forgive the payment of any principal or interest
payments, reduce the outstanding principal amount (except for actual payments of
principal), make future advances or extend the final maturity date on such
Mortgage Loan without the Purchaser's consent or otherwise constitute a
"significant modification" within the meaning of Treasury Regulations Section
1.860G-2(b). Countrywide may permit forbearance or allow for suspension of
Monthly Payments for up to one hundred twenty (120) days if the Mortgagor is in
default or Countrywide determines in its reasonable discretion, that default is
imminent and if Countrywide determines that granting such forbearance or
suspension is in the best interest of the Purchaser. If any modification,
forbearance or suspension permitted hereunder allows the deferral of interest or
principal payments on any Mortgage Loan, Countrywide shall include in each
remittance for any month in which any such principal or interest payment has
been deferred (without giving effect to such modification, forbearance or
suspension) an amount equal to such month's principal and one (1) month's
interest at the Mortgage Loan Remittance Rate on the then unpaid principal
balance of the Mortgage Loan and shall be entitled to reimbursement for such
advances only to the same extent as for Monthly Advances made pursuant to
Section 5.03. Countrywide shall notify the Purchaser, in writing, of any
modification, waiver, forbearance or amendment of any term of any Mortgage Loan
and the date thereof, and shall deliver to the Purchaser (or, at the direction
of the Purchaser, the Custodian) for deposit in the related Mortgage File, an
original counterpart of the agreement relating to such modification, waiver,
forbearance or amendment, promptly (and in any event within thirty (30) days)
following the execution thereof; provided, however, that if any such
modification, waiver, forbearance or amendment is required by applicable law to
be recorded, Countrywide (i) shall deliver to the Purchaser a copy thereof and
(ii) shall deliver to the Purchaser such document, with evidence of recordation
upon receipt thereof from the public recording office.
Without limiting the generality of the foregoing, Countrywide shall
continue, and is hereby authorized and empowered to execute and deliver on
behalf of itself and the Purchaser, 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. If reasonably required by Countrywide, the Purchaser shall
furnish Countrywide with any powers of attorney and other documents necessary or
appropriate to enable Countrywide to carry out its servicing and administrative
duties under this Agreement.
Collection of Mortgage Loan Payments.
Countrywide shall make reasonable efforts, in accordance with the
Accepted Servicing Practices and this Agreement, to collect all payments due
under each Mortgage Loan and shall exercise reasonable care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loan and Mortgaged Property.
27
Realization Upon Defaulted Mortgage Loans.
Foreclosure. In accordance with Accepted Servicing Practices, Countrywide shall
use reasonable efforts to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments. Countrywide shall use reasonable efforts to
realize upon defaulted Mortgage Loans, in such manner as will maximize the
receipt of principal and interest by the Purchaser, taking into account, among
other things, the timing of foreclosure proceedings. The foregoing is subject to
the provisions that, in any case in which Mortgaged Property shall have suffered
damage, Countrywide shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion (i)
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan to the Purchaser after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by Countrywide through PMI
Proceeds, Government Insurance Proceeds, Other Insurance Proceeds or Liquidation
Proceeds from the related Mortgaged Property. Countrywide shall notify the
Purchaser in writing of the commencement of foreclosure proceedings. Such notice
may be contained in the reports prepared by Countrywide and delivered to the
Purchaser pursuant to the terms and conditions of this Agreement. Countrywide
shall be responsible for all costs and expenses incurred by it in any
foreclosure proceedings; provided, however, that it shall be entitled to
reimbursement thereof from proceeds from the related Mortgaged Property.
Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
Countrywide has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, Countrywide shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how Countrywide shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Purchaser directs Countrywide to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, Countrywide shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse Countrywide, Countrywide shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Purchaser directs Countrywide not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, Countrywide shall be
reimbursed for all Servicing Advances made with respect to the related Mortgaged
Property from the Custodial Account pursuant to Section 4.05 hereof.
Establishment of Custodial Accounts; Deposits in Custodial Accounts.
Countrywide 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
28
establish and maintain one (1) or more Custodial Accounts, in the form of time
deposit or demand accounts, titled "[Countrywide], in trust for Banc of America
Mortgage Capital Corporation and/or subsequent purchasers of Mortgage Loans -
P&I." Countrywide shall provide the Purchaser with written evidence of the
creation of such Custodial Account(s) upon the request of the Purchaser.
Countrywide shall deposit in the Custodial Account within two (2)
Business Days, 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:
all payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
all payments on account of interest on the Mortgage Loans, adjusted to the
Mortgage Loan Remittance Rate;
all proceeds from a Cash Liquidation;
all PMI Proceeds, Government Insurance Proceeds and Other Insurance Proceeds,
including amounts required to be deposited pursuant to Sections 4.08 and 4.10,
other than proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Accepted Servicing
Practices, the loan documents or applicable law;
all Condemnation Proceeds affecting any Mortgaged Property that are not released
to the Mortgagor in accordance with the Accepted Servicing Practices, the loan
documents or applicable law;
all Monthly Advances;
all proceeds of any Mortgage Loan repurchased in accordance with Section 3.03 or
3.04, and any amount required to be deposited by Countrywide in connection with
any shortfall in principal amount of the Qualified Substitute Mortgage Loans and
the repurchased Mortgage Loans as required pursuant to Section 3.03;
any amounts required to be deposited by Countrywide pursuant to Section 4.10 in
connection with the deductible clause in any blanket hazard insurance policy
(such deposit shall be made from Countrywide's own funds, without reimbursement
therefor);
the Prepayment Interest Shortfall Amount, if any, for the month of distribution
(such deposit shall be made from Countrywide's own funds, without reimbursement
therefor up to a maximum amount per month equal to the lesser of (a) one-twelfth
of the product of (i) the Servicing Fee Rate and (ii) the Stated Principal
Balance of such Mortgage Loans, or (b) the aggregate Servicing Fee actually
received for such month for the Mortgage Loans); and
any amounts required to be deposited by Countrywide in connection with any REO
Property pursuant to Section 4.13.
The foregoing requirements for deposit in the Custodial Account are
exclusive. The Purchaser understands and agrees that, without limiting the
generality of the foregoing,
29
payments in the nature of late payment charges, prepayment penalties and
assumption fees (to the extent permitted by Section 4.16) need not be deposited
by Countrywide in the Custodial Account. Any interest paid by the depository
institution on funds deposited in the Custodial Account shall accrue to the
benefit of Countrywide and Countrywide shall be entitled to retain and withdraw
such interest from the Custodial Account pursuant to Section 4.05(d). All funds
required to be deposited in the Custodial Account shall be held in trust for the
Purchaser until withdrawn in accordance with Section 4.05.
Permitted Withdrawals From the Custodial Account.
Countrywide may, from time to time, withdraw funds from the Custodial
Account for the following purposes:
to make payments to the Purchaser in the amounts and in the manner provided for
in Sections 5.01 and 5.03;
to reimburse itself for Monthly Advances (Countrywide's reimbursement for
Monthly Advances shall be limited to amounts received on the related Mortgage
Loan (or to amounts received on the Mortgage Loans as a whole if the Monthly
Advance is made due to a shortfall in a Monthly Payment made by a Mortgagor
entitled to relief under the Soldiers' and Sailors' Civil Relief Act of 1940)
which represent Late Collections, net of the related Servicing Fee and LPMI Fee,
if applicable. Countrywide's right to reimbursement hereunder shall be prior to
the rights of the Purchaser, except that, where Countrywide is required to
repurchase a Mortgage Loan pursuant to Sections 3.03 or 3.04 or Countrywide is
required to remit a sum pursuant to the applicable provision of Section 4.17,
Countrywide's right to such reimbursement shall be subsequent to the payment to
the Purchaser of the Repurchase Price and all other amounts required to be paid
to the Purchaser with respect to such Mortgage Loans. Notwithstanding the
foregoing, Countrywide may reimburse itself for Monthly Advances from any funds
in the Custodial Account if it has determined that such funds are nonrecoverable
advances or if all funds, with respect to the related Mortgage Loan, have
previously been remitted to the Purchaser);
to reimburse itself for unreimbursed Servicing Advances and any unpaid Servicing
Fees (Countrywide's reimbursement for Servicing Advances and/or Servicing Fees
hereunder with respect to any Mortgage Loan shall be limited to proceeds from
Cash Liquidation, Liquidation Proceeds, Condemnation Proceeds, PMI Proceeds,
Government Insurance Proceeds and Other Insurance Proceeds; provided, however,
that Countrywide may reimburse itself for Servicing Advances and Servicing Fees
from any funds in the Custodial Account if all funds, with respect to the
related Mortgage Loan, have previously been remitted to the Purchaser.
Notwithstanding the foregoing, with respect to each Government Mortgage Loan,
Countrywide shall not be entitled to reimbursement of any Servicing Advances
that constitute losses and expenses for which an issuer of GNMA securities would
be responsible, pursuant to Chapter 4 of the GNMA Handbook 5500.2, if such
Government Mortgage Loan had been included in a GNMA security);
to pay to itself as servicing compensation (i) any interest earned on funds in
the Custodial Account (all such interest to be withdrawn monthly not later than
each Remittance Date), and (ii) the Servicing Fee and the LPMI Fee, if
applicable, from that portion of any payment or recovery of interest on a
particular Mortgage Loan;
30
to pay to itself, with respect to each Mortgage Loan that has been repurchased
pursuant to Section 3.03 or 3.04, all amounts received but not distributed as of
the date on which the related Repurchase Price is determined;
to reimburse itself for any amounts deposited in the Custodial Account in error;
and
to clear and terminate the Custodial Account upon the termination of this
Agreement.
Establishment of Escrow Accounts; Deposits in Escrow Accounts.
Countrywide 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 (1) or more Escrow Accounts in the form of time deposit or demand
accounts, which accounts shall be Eligible Accounts, titled "[Countrywide], in
trust for Banc of America Mortgage Capital Corporation and/or subsequent
purchasers of Mortgage Loans and various mortgagors - T&I." Countrywide shall
provide the Purchaser with written evidence of the creation of such Escrow
Account(s) upon the request of the Purchaser.
Countrywide shall deposit in the Escrow Account(s) within two (2)
Business Days, and retain therein, (a) all Escrow Payments collected on account
of the Mortgage Loans, and (b) all Other Insurance Proceeds that are to be
applied to the restoration or repair of any Mortgaged Property. Countrywide
shall make withdrawals therefrom only to effect such payments as are required
under this Agreement, and for such other purposes in accordance with Section
4.07. Countrywide shall be entitled to retain any interest paid by the
depository institution on funds deposited in the Escrow Account except interest
on escrowed funds required by law to be paid to the Mortgagor. Countrywide shall
pay Mortgagor interest on the escrowed funds at the rate required by law
notwithstanding that the Escrow Account is non-interest bearing or the interest
paid by the depository institution thereon is insufficient to pay the Mortgagor
interest at the rate required by law.
Permitted Withdrawals From Escrow Account.
Countrywide may, from time to time, withdraw funds from the Escrow
Account(s) for the following purposes: (a) to effect timely payments of ground
rents, taxes, assessments, water rates, mortgage insurance premiums, PMI Policy
premiums, if applicable, and comparable items; (b) to reimburse Countrywide for
any Servicing Advance made by Countrywide with respect to a related Mortgage
Loan; provided, however, that such reimbursement shall only be made from amounts
received on the related Mortgage Loan that represent late payments or
collections of Escrow Payments thereunder; (c) to refund to the Mortgagor any
funds as may be determined to be overages; (d) for transfer to the Custodial
Account in accordance with the terms of this Agreement; (e) for application to
restoration or repair of the Mortgaged Property; (f) to pay to Countrywide, or
to the Mortgagors to the extent required by law, any interest paid on the funds
deposited in the Escrow Account; (g) to reimburse itself for any amounts
deposited in the Escrow Account in error; or (h) to clear and terminate the
Escrow Account on the termination of this Agreement.
31
Transfer of Accounts.
Countrywide may transfer the Custodial Account or the Escrow Account
to a different depository institution from time to time provided that such
Custodial Account and Escrow Account shall at all times be Eligible Accounts.
Countrywide shall notify the Purchaser of any such transfer within five (5) days
thereafter.
Payment of Taxes, Insurance and Other Charges; Maintenance of PMI Policies;
Collections Thereunder.
With respect to each Mortgage Loan, Countrywide shall maintain
accurate records reflecting the status of (a) ground rents, taxes, assessments,
water rates and other charges that are or may become a lien upon the Mortgaged
Property; (b) primary mortgage insurance premiums; (c) with respect to Mortgage
Loans insured by the FHA, mortgage insurance premiums, and (d) fire and hazard
insurance premiums. Countrywide shall obtain, from time to time, all bills for
the payment of such charges, including renewal premiums, and shall effect
payment thereof prior to the applicable penalty or termination date and at a
time appropriate for securing maximum discounts allowable using Escrow Payments
which shall have been estimated and accumulated by Countrywide in amounts
sufficient for such purposes. To the extent that the Mortgage does not provide
for Escrow Payments, Countrywide shall determine that any such payments are made
by the Mortgagor at the time they first become due. Countrywide assumes full
responsibility for the timely payment of all such bills and shall effect timely
payments of all such bills, irrespective of the Mortgagor's faithful performance
in the payment of same or the making of the Escrow Payments, and shall make
advances from its own funds to effect such payments.
Countrywide will maintain in full force and effect, a PMI Policy
conforming in all respects to the description set forth in Section 3.02(v),
issued by an insurer described in that Section, with respect to each Mortgage
Loan for which such coverage is herein required. Such coverage will be
maintained until the LTV or the Updated LTV of the related Mortgage Loan is
reduced to 80% or less in the case of a Mortgage Loan having a LTV at
origination in excess of 80%. Countrywide will not cancel or refuse to renew any
PMI Policy in effect on the Closing Date that is required to be kept in force
under this Agreement unless a replacement PMI Policy is obtained from and
maintained with an insurer that is approved by an Agency. Countrywide shall not
take any action that would result in non-coverage under any applicable PMI
Policy of any loss that, but for the actions of Countrywide, would have been
covered thereunder. In connection with any assumption or substitution agreement
entered into or to be entered into pursuant to Section 4.16, Countrywide shall
promptly notify the insurer under the related PMI 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 PMI Policy. If such PMI
Policy is terminated as a result of such assumption or substitution of
liability, Countrywide shall obtain a replacement PMI Policy as provided above.
Unless otherwise provided in the related Purchase Confirmation, no
Mortgage Loan has in effect as of the Closing Date any mortgage pool insurance
policy or other credit enhancement, except for any PMI Policy, MIC or LGC and
the insurance or guarantee relating thereto, as applicable (excluding such
exception, the "Credit Enhancement"), and Countrywide shall not be required to
take into consideration the existence of any such Credit Enhancement for
32
the purposes of performing its servicing obligations hereunder. If the Purchaser
shall at any time after the related Closing Date notify Countrywide in writing
of its desire to obtain any such Credit Enhancement, the Purchaser and
Countrywide shall thereafter negotiate in good faith for the procurement and
servicing of such Credit Enhancement.
Maintenance of Hazard Insurance.
Countrywide 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 that is equal to the lesser of
(a) the maximum insurable value of the improvements securing such Mortgage Loan
or (b) the greater of (i) the unpaid principal balance of the Mortgage Loan, and
(ii) the percentage such that the proceeds thereof shall be sufficient to
prevent the Mortgagor and/or the Mortgagee from becoming a co-insurer. In the
event a hazard insurance policy shall be in danger of being terminated, or in
the event the insurer shall cease to be acceptable to an Agency, Countrywide
shall notify the Purchaser and the related Mortgagor, and shall use its best
efforts, as permitted by applicable law, to assure that a replacement hazard
insurance policy substantially and materially similar in all respects to the
original policy is obtained from a qualified insurer. If the Mortgaged Property
is in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards and such flood insurance has
been made available, Countrywide shall cause to be maintained a flood insurance
policy meeting the requirements of the current guidelines of the National Flood
Insurance Administration program (or any successor thereto) with a generally
acceptable insurance carrier and with coverage in an amount not less than the
lesser of (x) the unpaid principal balance of the Mortgage Loan; (y) full
replacement value of the improvements which are a part of the Mortgaged
Property; or (z) the maximum amount of insurance which is available under the
National Flood Insurance Reform Act of 1994. Countrywide shall also maintain on
REO Property, (1) fire and hazard insurance with extended coverage in an amount
that is not less than the maximum insurable value of the improvements that are a
part of such property; (2) liability insurance; and (3) to the extent required
and available under the National Flood Insurance Reform Act of 1994, flood
insurance in an amount as provided above. Countrywide shall deposit in the
Custodial Account all amounts collected under any such policies except (A)
amounts to be deposited in the Escrow Account and applied to the restoration or
repair of the Mortgaged Property or REO Property and (B) amounts to be released
to the Mortgagor in accordance with the Accepted Servicing Practices. The
Purchaser understands and agrees that no earthquake or other additional
insurance on property acquired in respect of the Mortgage Loan shall be
maintained by Countrywide or Mortgagor. All policies required hereunder shall be
endorsed with standard mortgagee clauses with loss payable to Countrywide and
shall provide for at least thirty (30) days prior written notice to Countrywide
of any cancellation, reduction in the amount of coverage or material change in
coverage. Countrywide shall not interfere with the Mortgagor's freedom of choice
in selecting either the insurance carrier or agent; provided, however, that
Countrywide shall only accept insurance policies from insurance companies
acceptable to an Agency and licensed to do business in the state wherein the
property subject to the policy is located.
Business Continuity Plan/Disaster Recovery.
Countrywide shall establish and maintain contingency plans, recovery
plans and proper risk controls to ensure Countrywide's continued performance
under this Agreement. The plans must be in place within thirty (30) calendar
days after the Closing Date of this Agreement and
33
shall include, but not be limited to, testing, control functions, accountability
and corrective actions to be implemented, if necessary. Countrywide agrees to
make copies or summaries of the plans available to the Purchaser or its
regulators upon request.
Fidelity Bond; Errors and Omissions Insurance.
Countrywide shall maintain, at its own expense, a blanket Fidelity
Bond and an errors and omissions insurance policy with responsible companies,
with broad coverage of all officers, employees or other persons acting in any
capacity with regard to the Mortgage Loan who handle funds, money, documents or
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 Countrywide against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of its officers,
employees and agents. Such Fidelity Bond shall also protect and insure
Countrywide 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 shall diminish
or relieve Countrywide from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and errors and
omissions insurance policy shall be at least equal to the corresponding amounts
required by an Agency for an approved seller/servicer.
Title, Management and Disposition of REO Property.
Title. In the event that title to the 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 Countrywide for the benefit of the Purchaser, or
in the event the Purchaser is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such
Person(s) as shall be consistent with an Opinion of Counsel obtained by
Countrywide from an attorney duly licensed to practice law in the state where
the REO Property is located. Any Person(s) holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as nominee
for the benefit of the Purchaser.
Management. Countrywide shall either itself or through an agent selected by
Countrywide, manage, conserve, protect and operate each REO Property in the same
manner that it manages, conserves, protects and operates other foreclosed
property for its own account. Countrywide 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 or more frequently as
required by the circumstances. Countrywide shall make or cause to be made a
written report of each such inspection. Such reports shall be retained in the
Credit File and copies thereof shall be forwarded by Countrywide to the
Purchaser within five (5) days of the Purchaser's request therefor. Countrywide
shall promptly attempt to sell the REO Property (and may temporarily rent the
same) on such terms and conditions as Countrywide deems to be in the best
interest of the Purchaser. Countrywide shall deposit, or cause to be deposited,
within two (2) Business Days of receipt, in the Custodial Account all revenues
received with respect to each REO Property and shall withdraw therefrom funds
necessary for the proper operation, management and maintenance of each REO
Property, including the cost of maintaining any hazard insurance
34
pursuant to Section 4.10 hereof and the fees of any managing agent acting on
behalf of Countrywide. Notwithstanding anything contained in this Agreement to
the contrary, upon written notice to Countrywide, the Purchaser may elect to
assume the management and control of any REO Property; provided, however, that
prior to giving effect to such election, the Purchaser shall reimburse
Countrywide for all previously unreimbursed or unpaid Monthly Advances,
Servicing Advances and Servicing Fees related to such REO Property.
Disposition. Subject to the following paragraph, Countrywide shall use
reasonable efforts to dispose of each REO Property as soon as possible and shall
sell each REO Property no later than one (1) year after title to such REO
Property has been obtained, unless Countrywide determines, and gives an
appropriate notice to the Purchaser, that a longer period is necessary for the
orderly disposition of any REO Property. If a period longer than one (1) year is
necessary to sell any REO Property, Countrywide shall, if requested by the
Purchaser, report monthly to the Purchaser as to the progress being made in
selling such REO Property.
Each REO Disposition shall be carried out by Countrywide at such price
and upon such terms and conditions as Countrywide deems to be in a manner that
maximizes the net present value of the recovery to the Purchaser. If, as of the
date title to any REO Property was acquired by Countrywide, there were
outstanding unreimbursed Servicing Advances, Monthly Advances or Servicing Fees
with respect to the REO Property or the related Mortgage Loan, Countrywide, upon
an REO Disposition of such REO Property, shall be entitled to reimbursement for
any related unreimbursed Servicing Advances, Monthly Advances and Servicing Fees
from proceeds received in connection with such REO Disposition. The proceeds
from the REO Disposition, net of any payment to Countrywide as provided above,
shall be deposited in the Custodial Account and distributed to the Purchaser in
accordance with Section 5.01.
Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, Countrywide shall
adjust the Mortgage Interest Rate on the related Interest Adjustment Date and
shall adjust the Monthly Payment on the related Payment Adjustment Date in
compliance with the requirements of applicable law and the related Mortgage and
Mortgage Note. If, pursuant to the terms of the Mortgage Note, another index is
selected for determining the Mortgage Interest Rate because the original index
is no longer available, the same index will be used with respect to each
Mortgage Note which requires a new index to be selected, provided that such
selection does not conflict with the terms of the related Mortgage Note.
Countrywide shall execute and deliver any and all necessary notices required
under applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Interest Rate and the Monthly Payment adjustments.
Countrywide shall promptly, upon written request therefor, deliver to the
Purchaser such notifications and any additional applicable data regarding such
adjustments and the methods used to calculate and implement such adjustments.
Upon the discovery by Countrywide or the Purchaser that Countrywide has failed
to adjust a Mortgage Interest Rate or a Monthly Payment pursuant to the terms of
the related Mortgage Note and Mortgage, Countrywide shall immediately deposit in
the Custodial Account, from its own funds, the amount of any interest loss
caused the Purchaser thereby without reimbursement therefor.
35
Notification of Maturity Date.
With respect to each Balloon Mortgage Loan, Countrywide shall execute
and deliver to the Mortgagor any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the maturity date and final balloon payment.
Assumption Agreements.
Countrywide shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the Mortgaged Property (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that
Countrywide shall not exercise any such right if prohibited from doing so by law
or the terms of the Mortgage Note or if the exercise of such right would impair
or threaten to impair any recovery under the related PMI Policy, if any. If
Countrywide reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, Countrywide shall enter into an assumption agreement
with the Person to whom the Mortgaged Property has been conveyed or is proposed
to be conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. Where an assumption is allowed pursuant to this Section 4.16,
the Purchaser authorizes Countrywide, with the prior written consent of the
primary mortgage insurer, if any, to enter into a substitution of liability
agreement with the Person to whom the Mortgaged Property has been conveyed or is
proposed to be conveyed pursuant to which the original Mortgagor is released
from liability and such Person is substituted as Mortgagor and becomes liable
under the related Mortgage Note. Any such substitution of liability agreement
shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability,
Countrywide shall follow the underwriting practices and procedures employed by
Countrywide for mortgage loans originated by Countrywide for its own account in
effect at the time such assumption or substitution is made. With respect to an
assumption or substitution of liability, the Mortgage Interest Rate borne by the
related Mortgage Note, the term of the Mortgage Loan and the outstanding
principal amount of the Mortgage Loan shall not be changed. Countrywide shall
notify the Purchaser that any such substitution of liability or assumption
agreement has been completed by forwarding to the Purchaser or its designee the
original of any such substitution of liability or assumption agreement, which
document shall be added to the related Collateral File and shall, for all
purposes, be considered a part of such Collateral File to the same extent as all
other documents and instruments constituting a part thereof.
Notwithstanding anything to the contrary contained herein, Countrywide
shall not be deemed to be in default, breach or any other violation of its
obligations hereunder by reason of any assumption of a Mortgage Loan by
operation of law or any assumption that Countrywide may be restricted by law
from preventing, for any reason whatsoever. For purposes of this Section 4.16,
the term "assumption" is deemed to also include a sale of the Mortgaged Property
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
36
Satisfaction of Mortgages and Release of Collateral Files.
Upon the payment in full of any Mortgage Loan, or the receipt by
Countrywide of a notification that payment in full will be escrowed in a manner
customary for such purposes, Countrywide shall immediately notify the Purchaser.
Such notice shall include a statement to the effect that all amounts received or
to be received in connection with such payment, which are required to be
deposited in the Custodial Account pursuant to Section 4.04, have been or will
be so deposited and shall request delivery to it of the portion of the
Collateral File held by the Purchaser or the Custodian. Upon receipt of such
notice and request, the Purchaser, or its designee, shall within five (5)
Business Days release or cause to be released to Countrywide the related
Collateral Documents and Countrywide shall prepare and process any satisfaction
or release. In the event that the Purchaser fails to release or cause to be
released to Countrywide the related Collateral Documents within five (5)
Business Days of Countrywide's request therefor, the Purchaser shall be liable
to Countrywide for any additional expenses or costs, including, but not limited
to, outsourcing fees and penalties, incurred by Countrywide resulting from such
failure. No expense incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the Custodial Account.
In the event Countrywide satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Purchaser may have under the
mortgage instruments, Countrywide, upon written demand, shall remit to the
Purchaser the then unpaid principal balance of the related Mortgage Loan by
deposit thereof in the Custodial Account. Countrywide shall maintain the
Fidelity Bond insuring Countrywide against any loss it may sustain with respect
to any Mortgage Loan not satisfied in accordance with the procedures set forth
herein.
From time to time and as appropriate for the service or foreclosure of
a Mortgage Loan, including for the purpose of collection under any PMI Policy,
the Purchaser, its designee, or the Custodian shall, within five (5) Business
Days of Countrywide's request and delivery to the Purchaser, its designee, or
the Custodian of a servicing receipt signed by a Servicing Officer, release or
cause to be released to Countrywide the portion of the Collateral File held by
the Purchaser, its designee, or the Custodian. Pursuant to the servicing
receipt, Countrywide shall be obligated to return to the Purchaser, its
designee, or the Custodian the related Collateral File when Countrywide no
longer needs such file, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Custodial Account or the Collateral 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. In
the event that the Purchaser fails to release or cause to be released to
Countrywide the portion of the Collateral File held by the Purchaser or its
designee within five (5) Business Days of Countrywide's request therefor, the
Purchaser shall be liable to Countrywide for any additional expenses or costs,
including, but not limited to, outsourcing fees and penalties, incurred by
Countrywide resulting from such failure. Upon receipt of notice from Countrywide
stating that such Mortgage Loan was liquidated, the Purchaser shall release
Countrywide from its obligations under the related servicing receipt.
37
Servicing Compensation.
As compensation for its services hereunder, Countrywide shall be
entitled to withdraw from the Custodial Account, or to retain from interest
payments on the Mortgage Loans, the amounts provided for as Servicing Fees.
Except as otherwise provided hereunder, the obligation of the Purchaser to pay
the Servicing Fee is limited to, and payable solely from, the interest portion
of the Monthly Payments. Notwithstanding the foregoing, with respect to the
payment of the Servicing Fee for any month, the aggregate Servicing Fee shall be
reduced (but not less than zero) by an amount equal to the Prepayment Interest
Shortfall for the related Due Period. Additional servicing compensation in the
form of assumption fees (as provided in Section 4.16), late payment charges,
prepayment penalties or otherwise shall be retained by Countrywide to the extent
not required to be deposited in the Custodial Account. Countrywide 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 herein.
PROVISIONS OF PAYMENTS AND REPORTS TO PURCHASER
Distributions.
On each Remittance Date, Countrywide shall distribute to the Purchaser
(a) all amounts credited to the Custodial Account as of the close of business on
the preceding Determination Date, net of charges against or withdrawals from the
Custodial Account pursuant to Section 4.05; plus (b) all Monthly Advances, if
any, that Countrywide is obligated to distribute pursuant to Section 5.03; minus
(c) any amounts attributable to Principal Prepayments received after the related
Principal Prepayment Period; minus (d) any amounts attributable to Monthly
Payments collected but due on a Due Date or Dates subsequent to the preceding
Determination Date. It is understood that, by operation of Section 4.04, the
remittance on the first Remittance Date is to include principal collected after
the Cut-off Date through the preceding Determination Date plus interest,
adjusted to the Mortgage Loan Remittance Rate, collected through such
Determination Date exclusive of any portion thereof allocable to the period
prior to the Cut-off Date, with the adjustments specified in (b), (c) and (d)
above.
Periodic Reports to the Purchaser.
Monthly Reports. Not later than the fifth (5th) Business Day following the
Principal Prepayment Period, Countrywide shall furnish to the Purchaser via any
electronic medium a monthly report in a form reasonably acceptable to the
Purchaser, which report shall include with respect to each Mortgage Loan the
following loan-level information: (i) the scheduled balance as of the last day
of the related Due Period, (ii) all Principal Prepayments applied to the
Mortgagor's account during the related Principal Prepayment Period, (iii) the
delinquency and bankruptcy status of the Mortgage Loan, if applicable, (iv)
actual unpaid principal balance, (v) the date through which Monthly Payments
have been made; (vi) the current Mortgage Interest Rate, (vii) Mortgage Interest
Rate net of the Servicing Fee and the LPMI fee and (viii) the amount being
remitted.
Miscellaneous Reports. Upon the foreclosure sale of any Mortgaged Property or
the acquisition thereof by the Purchaser pursuant to a deed-in-lieu of
foreclosure, Countrywide shall submit to the Purchaser a liquidation report with
respect to such Mortgaged Property, which report may be
38
included with any other reports prepared by Countrywide and delivered to the
Purchaser pursuant to the terms and conditions of this Agreement. With respect
to any REO Property, and upon the request of the Purchaser, Countrywide shall
furnish to the Purchaser a statement describing Countrywide's efforts during the
previous month in connection with the sale of such REO Property, including any
rental of such REO Property incidental to the sale thereof and an operating
statement. Countrywide shall also provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return and as the Purchaser may reasonably request from time
to time. The Purchaser agrees to pay for all reasonable out-of-pocket expenses
incurred by Countrywide in connection with complying with any request made by
the Purchaser hereunder if such information is not customarily provided by
Countrywide in the ordinary course of servicing mortgage loans similar to the
Mortgage Loans.
Monthly Advances by Countrywide.
Not later than the close of business on the Determination Date
preceding each Remittance Date, Countrywide shall deposit in the Custodial
Account an amount equal to all payments not previously advanced by Countrywide,
whether or not deferred pursuant to Section 5.01, of principal (due after the
Cut-off Date) and interest not allocable to the period prior to the Cut-off
Date, adjusted to the Mortgage Loan Remittance Rate, which were due on a
Mortgage Loan and delinquent as of the close of business on the Business Day
prior to the related Determination Date. Notwithstanding anything to the
contrary herein, Countrywide may use amounts on deposit in the Custodial Account
for future distribution to the Purchaser to satisfy its obligation, if any, to
deposit delinquent amounts pursuant to the preceding sentence. To the extent
Countrywide uses any funds being held for future distribution to the Purchaser
to satisfy its obligations under this Section 5.03, Countrywide shall deposit in
the Custodial Account an amount equal to such used funds no later than the
Determination Date prior to the following Remittance Date to the extent that
funds in the Custodial Account on such Remittance Date are less than the amounts
to be remitted to the Purchaser pursuant to Section 5.01.
Countrywide's obligation to make such advances as to any Mortgage Loan
will continue through the earliest of: (a) the last Monthly Payment due prior to
the payment in full of the Mortgage Loan; (b) the Remittance Date prior to the
Remittance Date for the distribution of any Liquidation Proceeds, Other
Insurance Proceeds or Condemnation Proceeds which, in the case of Other
Insurance Proceeds and Condemnation Proceeds, satisfy in full the indebtedness
of such Mortgage Loan; or (c) the Remittance Date prior to the date the Mortgage
Loan is converted to REO Property; provided, however, with respect to any
Government Mortgage Loan that is converted to REO Property, Countrywide's
obligation to make such advances will continue in accordance with the applicable
governmental agency's guidelines. In no event shall Countrywide be obligated to
make an advance under this Section 5.03 if at the time of such advance it
reasonably determines that such advance will be unrecoverable.
Annual Statement as to Compliance.
Countrywide shall deliver to the Purchaser on or before March 15th of
each year, beginning in the year following the Closing Date, an Officers'
Certificate stating, as to each signatory thereof, that (a) a review of the
activities of Countrywide during the preceding calendar year and of performance
under this Agreement has been made under such officers' supervision, and (b) to
the best of such officers' knowledge, based on such review, Countrywide has
fulfilled
39
all of its obligations under this Agreement throughout such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officers and the nature and status thereof.
Countrywide shall provide the Purchaser with copies of such statements upon
request.
Annual Independent Certified Public Accountants' Servicing Report.
On or before March 15th of each year, beginning in the year following
the Closing Date, Countrywide at its expense shall cause a firm of independent
public accountants, which is a member of the American Institute of Certified
Public Accountants, to furnish a statement to the Purchaser to the effect that
such firm has examined certain documents and records relating to Countrywide's
servicing of mortgage loans of the same type as the Mortgage Loans, pursuant to
this Agreement or servicing agreements substantially similar to this Agreement,
and that, on the basis of such examination, conducted substantially in
accordance with the Uniform Single Audit Program for Mortgage Bankers, such firm
is of the opinion that Countrywide's servicing has been conducted in compliance
with this Agreement or such servicing agreements examined pursuant to this
Section 5.05 except for (a) such exceptions as such firm shall believe to be
immaterial, and (b) such other exceptions as shall be set forth in such
statement. Countrywide shall provide the Purchaser with copies of such
statements upon request.
Purchaser's Access to Countrywide's Records.
The Purchaser shall have access upon reasonable notice to Countrywide,
during regular business hours or at such other times as might be reasonable
under applicable circumstances, to any and all of the books and records of
Countrywide that relate to the performance or observance by Countrywide of the
terms, covenants or conditions of this Agreement. Further, Countrywide hereby
authorizes the Purchaser, in connection with a sale of the Mortgage Loans, to
make available to prospective purchasers a Consolidated Statement of Operations
of Countrywide, or its parent company, prepared by or at the request of
Countrywide for the most recently completed three (3) fiscal years for which
such a statement is available as well as a Consolidated Statement of Condition
at the end of the last two (2) fiscal years covered by such Consolidated
Statement of Operations. Countrywide also agrees to make available to any
prospective purchaser, upon reasonable notice and during normal business hours,
a knowledgeable financial or accounting officer for the purpose of answering
questions respecting Countrywide's ability to perform under this Agreement. The
Purchaser agrees to reimburse Countrywide for any out-of-pocket costs incurred
by Countrywide in connection with its obligations under this Section 5.06.
Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans and REO Property are held, Countrywide shall not
take any action, cause the REMIC to take any action, or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of the REMIC as a REMIC
or (ii) result in the imposition of a tax upon the REMIC (including but not
limited to the tax on "prohibited transactions" as defined in Section 860 (a)
(2) of the Code and the tax on "contributions" to a REMIC set forth in Section
860(d) of the Code) unless Countrywide has received an Opinion of Counsel (at
the expense of the party seeking to take
40
such action) to the effect that the contemplated action will not endanger such
REMIC status or result in the imposition of any such tax.
COVENANTS BY COUNTRYWIDE
Indemnification by Countrywide.
Countrywide shall indemnify the Purchaser and hold it harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary attorneys' fees and related costs, judgments, and any other costs,
fees and expenses that the Purchaser may sustain in any way related to the
failure of Countrywide to perform its obligations hereunder including its
obligations to service and administer the Mortgage Loans in compliance with the
terms of this Agreement. Notwithstanding the foregoing, the Purchaser shall
indemnify Countrywide and hold it harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that
Countrywide may sustain in any way related to (a) actions or inactions of
Countrywide which were taken or omitted upon the instruction or direction of the
Purchaser, or (b) the failure of the Purchaser to perform its obligations
hereunder, including subsections (i) and (ii) in Section 6.04.
Third Party Claims.
Countrywide and the Purchaser shall immediately notify the other if a
claim is made upon such party by a third party with respect to this Agreement or
the Mortgage Loans. Upon the prior written consent of the Purchaser, which
consent shall not be unreasonably withheld, Countrywide shall assume the defense
of any such claim and pay all expenses in connection therewith, including
attorneys' fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against it or the Purchaser in respect of such claim. The
Purchaser shall promptly reimburse Countrywide for all amounts advanced by it
pursuant to the preceding sentence except when as a result of such claim
Countrywide is otherwise required to indemnify the Purchaser pursuant to Section
6.01 hereof.
Merger or Consolidation of Countrywide.
Countrywide shall keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof, 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.
Notwithstanding anything to the contrary contained herein, any Person
into which Countrywide may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which Countrywide
shall be a party, or any Person succeeding to the business of Countrywide, shall
be the successor of Countrywide hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto; provided,
however, that the successor or surviving Person shall be an institution whose
deposits are insured by FDIC or a company whose business is the origination and
servicing of mortgage
41
loans, unless otherwise consented to by the Purchaser, which consent shall not
be unreasonably withheld, and shall be qualified to service mortgage loans on
behalf of an Agency.
Limitation on Liability of Countrywide and Others.
Neither Countrywide nor any of the officers, employees or agents of
Countrywide shall be under any liability to the Purchaser for any action taken,
or for refraining from taking any action, in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect Countrywide or any such person against any breach of
warranties or representations made herein, or the failure to perform its
obligations in compliance with any standard of care set forth in this Agreement,
or any liability which would otherwise be imposed by reason of any breach of the
terms and conditions of this Agreement. Countrywide and any officer, employee or
agent of Countrywide 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. Notwithstanding anything to the contrary contained in this
Agreement, unless one or more Event of Default by Countrywide shall occur and
shall not have been remedied within the time limits set forth in Section 7.01(a)
of this Agreement, the Purchaser shall not record or cause to be recorded an
Assignment of Mortgage with the recording office. To the extent the Purchaser
records with the recording office as permitted herein an Assignment of Mortgage
which designates the Purchaser as the holder of record of the Mortgage, the
Purchaser agrees that it shall (i) provide Countrywide with immediate notice of
any action with respect to the Mortgage or the related Mortgaged Property and
ensure that the proper department or person at Countrywide receives such notice;
and (ii) immediately complete, sign and return to Countrywide any document
reasonably requested by Countrywide to comply with its servicing obligations,
including without limitation, any instrument required to release the Mortgage
upon payment in full of the obligation or take any other action reasonably
required by Countrywide. The Purchaser further agrees that Countrywide shall
have no liability for the Purchaser's failure to comply with the subsections (i)
or (ii) in the foregoing sentence. Countrywide shall have no liability to the
Purchaser and 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 Countrywide
may, with the consent of the Purchaser, undertake any such action which it may
deem necessary or desirable to protect the Purchaser's interests in the Mortgage
Loans. 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 Purchaser will be liable, and Countrywide shall be entitled to be reimbursed
therefor from the Purchaser upon written demand except when such expenses, costs
and liabilities are subject to Countrywide's indemnification under Section 6.01.
No Transfer of Servicing.
Countrywide acknowledges that the Purchaser acts in reliance upon
Countrywide's independent status, the adequacy of its servicing facilities,
plant, personnel, records and procedures, its integrity, reputation and
financial standing and the continuance thereof. Without in any way limiting the
generality of this Section, Countrywide shall not assign this Agreement or the
servicing rights hereunder, without the prior written approval of the Purchaser,
which consent may not be unreasonably withheld; provided, however, that nothing
in this Agreement shall limit the right of Countrywide to assign the servicing
rights hereunder to Servicing LP.
42
Provision of Information.
During the term of this Agreement, Countrywide shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Credit File for each Mortgage Loan
provided for herein. All such reports, documents or information shall be
provided by and in accordance with all reasonable instructions and directions
which the Purchaser shall give in writing. In addition, during the term of this
Agreement, Countrywide shall provide to the OCC and to comparable regulatory
authorities supervising the Purchaser or any of Purchaser's assigns (including
beneficial owners of securities issued in Pass-Through Transfers backed by the
Mortgage Loans) and the examiners and supervisory agents of the OCC and such
other authorities, access to the documentation required by applicable
regulations of the OCC and other comparable regulatory authorities supervising
the Purchaser or any of its assigns with respect to the Mortgage Loans. Such
access shall be upon reasonable and prior written request and during normal
business hours at the offices designated by Countrywide. To the extent the
Purchaser, any of Purchaser's assigns, or the examiners and supervisory agents
of the OCC request reports, documents, information, or other cooperation not
generally provided by Countrywide to its other investors or readily available to
Countrywide, the Purchaser shall be liable for and shall pay all reasonable
out-of-pocket costs and expenses incurred by Countrywide in providing such
additional reports, documents, information, or other cooperation.
TERMINATION OF COUNTRYWIDE AS SERVICER
Termination Due to an Event of Default.
Each of the following shall be an Event of Default by Countrywide if it shall
occur and, if applicable, be continuing for the period of time set forth
therein:
any failure by Countrywide to remit to the Purchaser any payment required to be
made under the terms of this Agreement which such failure continues unremedied
for a period of three (3) Business Days after the date upon which written notice
of such failure, requiring the same to be remedied, shall have been given to
Countrywide by the Purchaser; or
any failure on the part of Countrywide to duly observe or perform in any
material respect any of the covenants or agreements on the part of Countrywide
set forth in this Agreement, including but not limited to breach by Countrywide
of any one or more of the representations, warranties, and covenants of
Countrywide as set forth in Section 3.01 of this Agreement, or in the Custodial
Agreement, if any, which continues unremedied for a period of thirty (30) days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to Countrywide by the Purchaser; or
a decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator in
any insolvency, bankruptcy, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against Countrywide and such decree or order
shall have remained in force undischarged or unstayed for a period of sixty (60)
days; or
43
Countrywide shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to Countrywide or
of or relating to all or substantially all of its property; or
Countrywide 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 completely ceases its
business operations for a period of five (5) consecutive Business Days; or
failure by Countrywide to maintain its license to do business in any
jurisdiction where the Mortgaged Property is located if such license is
required; or
Countrywide ceases to meet the servicer eligibility qualifications of both
Agencies; or
Countrywide attempts to assign this Agreement or all of its servicing
responsibilities or duties hereunder or any portion thereof in violation of
Section 6.05.
If Countrywide obtains knowledge of an Event of Default, it shall
promptly notify the Purchaser. In case one or more Events of Default by
Countrywide shall occur and shall not have been remedied, the Purchaser, by
notice in writing to Countrywide may, in addition to whatever rights the
Purchaser may have at law or equity to damages, including injunctive relief and
specific performance, terminate all the rights and obligations of Countrywide
under this Agreement and in and to the Mortgage Loans and the proceeds thereof.
On or after the receipt by Countrywide of such written notice, all authority and
power of Countrywide under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Purchaser. Upon written
request from the Purchaser, Countrywide shall prepare, execute and deliver, any
and all documents and other instruments and do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise, at Countrywide's sole
expense. Countrywide agrees to cooperate with the Purchaser in effecting the
termination of Countrywide's responsibilities and rights hereunder, including
the transfer to the Purchaser, for administration by it, of all cash amounts
which shall at the time be credited by Countrywide to the Custodial Account or
Escrow Account or thereafter received with respect to the Mortgage Loans.
Waiver of Event of Default. Upon written notice, the Purchaser may waive any
default by Countrywide in the performance of Countrywide's obligations hereunder
and its consequences. Upon any such waiver of a past default, such default shall
cease to exist, and any Events 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 thereto
except to the extent expressly so waived.
Termination without Cause.
The Purchaser may terminate, any servicing rights Countrywide may have
hereunder with respect to any Mortgage Loan Package, without cause as provided
in this Section 7.02. Any such notice of termination shall be in writing and
delivered to Countrywide by registered mail as provided in Section 8.01 at least
sixty (60) days prior to such termination date.
44
In the event the servicing rights with respect to a Mortgage Loan
Package are terminated pursuant to this Section 7.02, Countrywide shall be
entitled to receive, as liquidated damages, upon the transfer of the servicing
rights, an amount equal to the sum of (i) the greater of (A) two and one-half
percent (2 1/2%) of the aggregate outstanding principal amount of the Mortgage
Loans, or (B) the fair market value of the servicing rights, each as of the
termination date, plus (ii) all reasonable costs and expenses incurred by
Countrywide in managing the transfer of the servicing. The fair market value of
the servicing rights shall be determined based on the average of three (3) bids
made by experienced evaluators unaffiliated to the Purchaser or Countrywide and
chosen as follows: (X) one by the Purchaser, (Y) one by Countrywide, and (Z) one
by mutual agreement of the evaluators chosen by the Purchaser and Countrywide,
pursuant to (X) and (Y) above.
Termination by Other Means.
The respective obligations and responsibilities of Countrywide shall
terminate with respect to any Mortgage Loan Package upon the first to occur of:
(a) 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 in such Mortgage Loan Package and the remittance of all funds due
hereunder; (b) by mutual consent of Countrywide and the Purchaser in writing;
(c) the repurchase by Countrywide of all outstanding Mortgage Loans and REO
Property in a Mortgage Loan Package at a price equal to (i) in the case of a
Mortgage Loan, 100% of the Stated Principal Balance of each Mortgage Loan on the
date of such repurchase plus accrued interest thereon through the last day of
the month of repurchase, and (ii) in the case of REO Property, the lesser of (1)
100% of the Stated Principal Balance of the Mortgage Loan encumbering the
Mortgaged Property at the time such Mortgaged Property was acquired and became
REO Property or (2) the fair market value of such REO Property at the time of
repurchase; or (d) the Pass-Through Transfer of the last Mortgage Loan in such
Mortgage Loan Package.
The right of Countrywide to repurchase all outstanding Mortgage Loans
in a Mortgage Loan Package pursuant to (c) above shall be conditional upon (i)
the outstanding Stated Principal Balances of such Mortgage Loans at the time of
any such repurchase aggregating less than five percent (5%) of the aggregate
Stated Principal Balances of the Mortgage Loans on the related Cut-off Date, and
(ii) the determination by Countrywide that the reasonable costs and expenses
incurred by Countrywide in the performance of its servicing obligations
hereunder with respect to such Mortgage Loans exceed the benefits accruing to
Countrywide therefrom.
45
MISCELLANEOUS
Notices.
All demands, notices and communications required to be provided
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, by registered or certified mail, postage prepaid, and return receipt
requested, or, if by other means, when received by the other party at the
address as follows:
(i) to Countrywide:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx, Executive Vice President
With copy to: General Counsel
(ii) the Purchaser:
To the address and contact set forth in the related Purchase
Confirmation
or such other address as may hereafter be furnished to the other party
by like notice. Any such demand, notice or communication hereunder shall be
deemed to have been received on the date delivered to or received at the
premises of the addressee (as evidenced, in the case of registered or certified
mail, by the date noted on the return receipt).
Sale Treatment.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the Mortgage
Loans by Countrywide and not a pledge of the Mortgage Loans by Countrywide to
the Purchaser to secure a debt or other obligation of Countrywide. Consequently,
the sale of each Mortgage Loan shall be reflected as a sale on Countrywide's
business records, tax returns and financial statements. Accordingly, Countrywide
and the Purchaser shall each treat the transaction for federal income tax
purposes as a sale by Countrywide, and a purchase by the Purchaser, of the
Mortgage Loans.
Exhibits.
The Exhibits to this Agreement and each Trade Confirmation and
Purchase Confirmation executed by Countrywide and the Purchaser are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
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;
46
accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with generally accepted accounting principles;
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;
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;
the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular provision;
the term "include" or "including" shall mean without limitation by reason of
enumeration; and
reference to the Transaction Documents or any other document referenced herein
shall include all exhibits, schedules or other supplements thereto.
Reproduction of Documents.
This Agreement and all documents relating thereto, including (a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
Further Agreements.
Countrywide shall execute and deliver to the Purchaser and the
Purchaser shall be required to execute and deliver to Countrywide such
reasonable and appropriate additional documents, instruments or agreements as
may be necessary or appropriate to effectuate the purposes of this Agreement.
Assignment of Mortgage Loans by the Purchaser; Whole Loan Transfer; Pass-Through
Transfers.
The Purchaser may, subject to the terms of this Agreement, sell and transfer one
or more of the Mortgage Loans; provided, however, that the transferee will not
be deemed to be the Purchaser hereunder unless such transferee shall agree in
writing to be bound by the terms of this Agreement and an original counterpart
of the document evidencing such agreement shall have been executed by the
Purchaser and the transferee and delivered to Countrywide. Notwithstanding the
foregoing, no transfer shall be effective if such transfer would result in there
being more than four (4) "Purchasers" outstanding hereunder with respect to any
Mortgage Loan Package. Any trust to which Mortgage Loans may be transferred
pursuant to Section 8.07(b) hereunder shall constitute a single Purchaser for
the purposes of the preceding sentence.
47
The Purchaser and Countrywide agree that with respect to some or all of the
Mortgage Loans, the Purchaser, at its sole option, but subject to the
limitations set forth in Section 8.07(a) hereof, may effect Pass-Through
Transfers, retaining Countrywide as the servicer thereof or subservicer if a
master servicer is employed, or as applicable the "seller/servicer." On the
related Reconstitution Date, the Mortgage Loans transferred shall cease to be
covered by this Agreement; provided, however, that, in the event that any
Mortgage Loan transferred pursuant to this Section 8.07 is rejected by the
related transferee, Countrywide shall continue to service such rejected Mortgage
Loan on behalf of the Purchaser in accordance with the terms and provisions of
this Agreement. Countrywide shall cooperate with the Purchaser in connection
with each Whole Loan Transfer or Pass-Through Transfer in accordance with this
Section 8.07. In connection therewith Countrywide shall:
negotiate in good faith and execute any assignment, assumption and recognition
agreement or seller/servicer agreement reasonably required to effectuate the
Whole Loan Transfer or Pass-Through Transfer, provided such agreement creates no
greater obligation or cost on the part of Countrywide than otherwise set forth
in this Agreement, and provided further that Countrywide shall be entitled to a
servicing fee under that agreement at a rate per annum no less than the
Servicing Fee Rate; and
provide as applicable:
information pertaining to Countrywide of the type and scope customarily included
in offering documents for residential mortgage-backed securities transactions
involving multiple loan originators; and
such opinions of counsel, letters from auditors, and certificates of public
officials or officers of Countrywide as are reasonably believed necessary by the
trustee, any rating agency or the Purchaser, as the case may be, in connection
with such Whole Loan Transfer or Pass-Through Transfer. The Purchaser or another
party to such Whole Loan Transfer or Pass-Through Transfer shall pay all third
party costs associated with the preparation of the information described in
clause (ii)(A) above and the delivery of any opinions, letters or certificates
described in this clause (ii)(B). Countrywide shall not be required to execute
any seller/servicer agreement unless a draft of the agreement is provided to
Countrywide at least 10 days before the Reconstitution Date, or such longer
period as may reasonably be required for Countrywide and its counsel to review
and comment on the agreement.
In connection with any Whole Loan Transfer or Pass-Through Transfer, Countrywide
shall not be required to "bring down" any of the representations and warranties
in Section 3.02 (i.e., the representations and warranties only speak as of the
applicable date set forth in this Agreement), or, except as provided in the
following sentence, to make any other representations or warranties whatsoever.
Upon request, Countrywide will bring down the representations and warranties in
Section 3.01 to a date no later than the related Reconstitution Date, or make
new representations and warranties comparable in all material respects to those
in Section 3.01 or make representations and warranties (1) that Countrywide has
serviced the Mortgage Loans in accordance with the terms of this Agreement and
provided accurate statements to the Purchaser pursuant to Section 5.02 of this
Agreement, and (2) that Countrywide has taken no action nor omitted to take any
required action the omission of which would have the effect of impairing any
mortgage insurance or guarantee on the Mortgage Loans, and (3) regarding the
accuracy of the
48
information provided to the Purchaser by Countrywide on or before the closing
date of the applicable Whole Loan Transfer or Pass-Through Transfer.
All Mortgage Loans not sold or transferred pursuant to Pass-Through Transfers
shall remain 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.
(e) With respect to any Mortgage Loans that are subject to a
Pass-Through Transfer or other securitization transaction,
to the extent that either of the Purchaser, any master
servicer which is master servicing loans in connection with
such transaction (a "Master Servicer"), or any related
depositor (a "Depositor") is required under the
Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act") to
prepare and file a certification pursuant to Section 302 of
the Xxxxxxxx-Xxxxx Act, on or before March 15, 2004, and
March 1 of each year thereafter, an officer of Countrywide
shall, prior to the deadline for such certification, execute
and deliver an Officer's Certificate, in the form attached
hereto as Exhibit F, to such Purchaser, Master Servicer, or
Depositor, as the case may be, for the benefit of such
entity.
(f) Countrywide shall indemnify and hold harmless such
Purchaser, Master Servicer, or Depositor, as the case may be
(any such party, an "Indemnified Party") from and against
any losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other
costs and expenses arising out of or based upon a breach by
Countrywide or any of its officers, directors, or agents of
its obligations under Section 8.07(e); provided, however,
that Countrywide shall not be obligated to indemnify or hold
harmless any Indemnified Party from or against any losses,
damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and
expenses arising out of or based upon the negligence, bad
faith or willful misconduct of such Indemnified Party.
Conflicts between Transaction Documents.
In the event of any conflict, inconsistency or ambiguity between the
terms and conditions of this Agreement and either the related Trade Confirmation
or the related Purchase Confirmation, the terms of the related Purchase
Confirmation shall control. In the event of any conflict, inconsistency or
ambiguity between the terms and conditions of the Trade Confirmation and the
Purchase Confirmation, the terms of the Purchase Confirmation shall control.
49
Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements entered into and
wholly performed within that state.
Severability Clause.
Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to an amendment to this Agreement which places each party in the
same or as economic position as each party would have been in except for such
invalidity.
Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be
enforceable by Countrywide and the Purchaser and the respective permitted
successors and assigns of Countrywide and the Purchaser. Except as specifically
set forth in Section 8.07 above, the Purchaser may not assign this Agreement to
any Person without Countrywide's prior written consent, which consent shall not
be unreasonably withheld.
Confidentiality.
Countrywide and the Purchaser acknowledge and agree that the terms of
the Transaction Documents shall be kept confidential and their contents will not
be divulged to any party without the other party's consent, except to the extent
that it is appropriate for Countrywide and the Purchaser to do so in working
with legal counsel, auditors, taxing authorities, or other governmental
agencies.
The Purchaser and Countrywide shall comply with any and all federal
and state laws, rules, and regulations governing or relating to the
confidentiality and security of "nonpublic personal information" (as such term
is defined in the Xxxxx-Xxxxx-Xxxxxx Act ("GLBA")), including, without
limitation, the GLBA. The Purchaser and Countrywide shall implement such
physical and other security measures as shall be necessary to (a) ensure the
security and confidentiality of any "nonpublic personal information" that is
disclosed in any manner or for any purpose to either party and that pertains to
any "Customers" or "consumers" (as such terms are defined in GLBA) pertaining to
the Mortgage Loans, (b) protect against any threats or hazards to the security
and integrity of such "nonpublic personal information," and (c) protect against
any unauthorized access to or use of such "nonpublic personal information."
50
Both parties represent and warrant that they have implemented appropriate
measures to meet the objectives of Section 501(b) of the GLBA and of the
applicable standards adopted pursuant thereto. Upon request, and to the extent
there is no violation of applicable laws or regulations, either party shall
provide information to the other party, including, without limitation, any
regulatory or supervising authorities, and allow the confirmation of the party's
satisfaction of its obligations as required under this Section. Without
limitation, such information may include audits, summaries of test results, and
other equivalent evaluations.
Solicitation of Mortgagors.
From and after the Closing Date, Countrywide hereby agrees that
Countrywide will not take any action or permit or cause any action to be taken
by any of their agents or affiliates, or by any independent contractors or
independent mortgage brokerage companies on Countrywide's behalf, to personally,
by telephone or mail, solicit the Mortgagor under any Mortgage Loan for the
purpose of refinancing such Mortgage Loan; provided, that Countrywide may
solicit any Mortgagor for whom Countrywide or it affiliates have received a
request for verification of Mortgage, a request for demand for payoff, a
Mortgagor-initiated written or verbal communication indicating a desire to
prepay the related Mortgage Loan, or the Mortgagor initiates a title search,
provided further, it is understood and agreed that promotions undertaken by
Countrywide or any of their affiliates which (i) concern optional insurance
products or other additional projects or (ii) are directed to the general public
at large, including, without limitation, mass mailings based on commercially
acquired mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation nor is Countrywide prohibited from responding to
unsolicited requests or inquiries made by a Mortgagor or an agent of a
Mortgagor. Notwith-standing the foregoing, the following solicitations, if
undertaken by Countrywide or any affiliate of Countrywide, shall not be
prohibited: (i) solicitations that are directed to the general public at large,
including, without limitation, mass mailings based on commercially acquired
mailing lists and newspaper, radio, television and other mass media
advertisements and (ii) borrower messages included on, and statement inserts
provided with, the monthly statements sent to Mortgagors; provided, however,
that similar messages and inserts are sent to the borrowers of other mortgage
loans serviced by Countrywide or any affiliate of Countrywide.
Relationship of the Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of
Countrywide shall be rendered as an independent contractor and not as agent for
the Purchaser.
[INTENTIONALLY LEFT BLANK]
51
Entire Agreement.
This Agreement and the related Trade Confirmation and Purchase
Confirmation constitute the entire understanding between the parties hereto with
respect to each Mortgage Loan Package and supersede all prior or contemporaneous
oral or written communications regarding same. Countrywide and the Purchaser
understand and agree that no employee, agent or other representative of
Countrywide or the Purchaser has any authority to bind such party with regard to
any statement, representation, warranty or other expression unless said
statement, representation, warranty or other expression is specifically included
within the express terms of this Agreement or the related Trade Confirmation or
Purchase Confirmation. Neither this Agreement nor the related Trade Confirmation
or Purchase Confirmation shall be modified, amended or in any way altered except
by an instrument in writing signed by both parties.
(SIGNATURE PAGE TO FOLLOW)
52
IN WITNESS WHEREOF, Countrywide and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.,
Countrywide
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
BANC OF AMERICA MORTGAGE CAPITAL
CORPORATION,
the Purchaser
By: /s/ Xxxxx X. Good
------------------------------------
Name: Xxxxx X. Good
Title: Vice President
53
EXHIBIT A
COLLATERAL DOCUMENTS
Mortgage Note: The original Mortgage Note (or, with respect to no more than one
percent (1%) of the unpaid principal balance of the Mortgage Loans as of the
related Cut-off Date, a lost note affidavit in a form acceptable to an Agency)
bearing all intervening endorsements, endorsed "Pay to the order of
_____________, without recourse" and signed in the name of Countrywide by an
authorized officer (provided that, in the event that the Mortgage Loan was
acquired by Countrywide in a merger, the signature must be in the following
form: "Countrywide, successor by merger to [name of predecessor]"; and in the
event that the Mortgage Loan was acquired or originated by Countrywide while
doing business under another name, the signature must be in the following form:
"Countrywide", formerly known as [previous name]").
Assignment of Mortgage: The original Assignment of Mortgage in blank for each
Mortgage Loan (except for the insertion of the name of the assignee and
recording information). If the Mortgage Loan was acquired by Countrywide in a
merger, the Assignment of Mortgage must be made by "[Countrywide], successor by
merger to [name of predecessor]." If the Mortgage Loan was acquired or
originated by Countrywide while doing business under another name, the
Assignment of Mortgage must be by "[Countrywide], formerly know as [previous
name]." Subject to the foregoing and where permitted under the applicable laws
of the jurisdiction wherein the Mortgaged property is located, such Assignments
of Mortgage may be made by blanket assignments for Mortgage Loans secured by the
Mortgaged Properties located in the same county. If the related Mortgage has
been recorded in the name of MERS or its designee, no Assignment of Mortgage
will be required to be prepared or delivered.
Guarantee: The original or certified true copy of any guarantee executed in
connection with the Mortgage Note, if any.
Mortgage: The original Mortgage with evidence of recording thereon or, if such
original Mortgage has not been returned to Countrywide on or prior to the
Closing Date by the public recording office where such Mortgage has been
delivered for recordation, a copy of such Mortgage certified by Countrywide to
be a true and complete copy of the original Mortgage sent for recordation. In
the case of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such public
recording office or by the title insurance company that issued the title policy
to be a true and complete copy of the original recorded Mortgage.
Modifications: The originals or certified true copies of any documents sent for
recordation of all assumption, modification, consolidation or extension
agreements, with evidence of recording thereon, if any.
Intervening Assignments: The originals of all intervening assignments of
Mortgage with evidence of recording thereon, provided that such originals have
been returned to Countrywide by the public recording office where such
intervening assignment of Mortgage has been delivered for recordation. Where a
public recording office retains the original recorded
A-1
intervening assignment or in the case where an intervening assignment is lost
after recordation in a public recording office, a copy of such intervening
assignment certified by such public recording office to be a true and complete
copy of the original recorded intervening assignment.
Loan Guaranty Certificate: The original Loan Guaranty Certificate, if
applicable.
8. For each Mortgage Loan secured by Co-op Shares, the originals of the
following documents or instruments:
A. the stock certificate;
B. the stock power executed in blank;
C. the executed proprietary lease;
D. the executed recognition agreement;
E. the executed assignment of recognition agreement;
F. the executed UCC-1 financing statement with evidence of recording
thereon; and
G. the executed UCC-3 financing statement or other appropriate UCC
financing statements required by state law, evidencing a complete and
unbroken line from the mortgagee to the Trustee with evidence or
recording thereon (or in a form suitable for recordation).
A-2
EXHIBIT B
FORM OF PURCHASE CONFIRMATION
[COUNTRYWIDE LETTERHEAD]
[DATE]
[PURCHASER]
[STREET ADDRESS]
[CITY, STATE AND ZIP]
Attn: [CONTACT, TITLE]
Re: Purchase Confirmation ($x.xmm) (Deal No. xxxx-xxx)
Ladies and Gentlemen:
This purchase confirmation (the "Purchase Confirmation") between
Countrywide Home Loans, Inc. ("Countrywide") and [PURCHASER] ("Purchaser") sets
forth our agreement pursuant to which Purchaser is purchasing, and Countrywide
is selling, on a servicing-retained basis, those certain mortgage loans
identified in Exhibit A hereto and more particularly described herein (the
"Mortgage Loans").
The purchase, sale and servicing of the Mortgage Loans as contemplated
herein shall be governed by that certain Master Mortgage Loan Purchase and
Servicing Agreement dated as of [DATE], between Countrywide and Purchaser (as
amended herein and otherwise, the "Agreement"). By executing this Purchase
Confirmation, each of Countrywide and Purchaser again makes, with respect to
itself and each Mortgage Loan, as applicable, all of the covenants,
representations and warranties made by each such party in the Agreement, except
as the same may be amended by this Purchase Confirmation.
All exhibits hereto are incorporated herein in their entirety. In the
event there exists any inconsistency between the Agreement and this Purchase
Confirmation, the latter shall be controlling notwithstanding anything contained
in the Agreement to the contrary. All capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Agreement.
1. Assignment and Conveyance of Mortgage Loans. Upon Purchaser's
payment of the Purchase Proceeds in accordance with Section 2.08 of the
Agreement, Countrywide shall sell, transfer, assign and convey to Purchaser,
without recourse, but subject to the terms of the Purchase Confirmation and the
Agreement, all of the right, title and interest of Countrywide in and to the
Mortgage Loans, excluding the servicing rights relating thereto. Each Mortgage
Loan shall be serviced by Countrywide pursuant to the terms of the Agreement.
B-1
2. Defined Terms. As used in the Agreement, the following defined
terms shall have meanings set forth below with respect to the related Mortgage
Loan Package.
a. Closing Date: [DATE].
b. Cut-off Date: [DATE].
c. Cut-off Date Balance:
[d. Index: On each Interest Adjustment Date, the applicable index rate
shall be a rate per annum equal to [the weekly average yield on U.S. Treasury
securities adjusted to a constant maturity of one year, as published by the
Board of Governors of the Federal Reserve System in Statistical Release No.
H.15] [the average of interbank offered rates for six-month U.S. dollar
denominated deposits in the London market (LIBOR), as published [in the Wall
Street Journal] [by Xxxxxx Mae] [the 11th District Cost of Funds as made
available by the Federal Home Loan Bank] [the weekly average yield on
certificates of deposit adjusted to a constant maturity of six months as
published by the Board of Governors of the Federal Reserve System in Statistical
Release No. H.15 or a similar publication.]]
e. Missing Credit Documents: As set forth in Exhibit [C] hereto.
Notwithstanding anything contained in Section 2.04 of the Agreement to
the contrary, Countrywide's obligation to repurchase from the Purchaser the
Mortgage Loan related to a Missing Credit Document shall occur only in the event
of a default by a Mortgagor or any material impairment of the Mortgaged Property
directly arising a breach of Countrywide's obligation to deliver the Missing
Credit Document within the time specified in Section 2.04 of the Agreement.
[f. Pending Mortgage Loans: As set forth in Exhibit [C] hereto.]
g. Purchase Proceeds: With respect to [the Mortgage Loans] [each
Mortgage Loan], and as set forth in Exhibit [A] and Exhibit [B] hereto, the sum
of (a) the product of (i) the Cut-off Date Balance of [such Mortgage Loan] [such
Mortgage Loans], and (ii) the purchase price percentage set forth in Exhibit [A]
hereto for such [Mortgage Loan] [Mortgage Loans], and (b) accrued interest from
the Cut-off Date through the day prior to the Closing Date, inclusive.
g. Servicing Fee Rate: [0.25%] [0.375%] [With respect to the period
prior to the initial Interest Adjustment Date, [0.25]% and, thereafter,
[0.375]%].
3. Description of Mortgage Loans. Each Mortgage Loan complies with the
specifications set forth below in all material respects.
a. Loan Type: Each Mortgage Loan is a [Conventional] [Government]
Mortgage Loan and a [Adjustable Rate] [Balloon] [Convertible] [Fixed Rate]
Mortgage Loan.
x. Xxxx Position: Each Mortgage Loan is secured by a perfected [first]
[second] lien Mortgage.
d. Underwriting Criteria: Each Mortgage Loan [was underwritten
generally in accordance with Countrywide's credit underwriting guidelines in
effect at the time such
B-2
Mortgage Loan was originated] [conforms to the Xxxxxx Mae or Xxxxxxx Mac
mortgage eligibility criteria (as such criteria applies to Countrywide) and is
eligible for sale to, and securitization by, Xxxxxx Mae or Xxxxxxx Mac]
[conforms in all material respects to the GNMA mortgage eligibility criteria and
is eligible for sale and securitization into a GNMA mortgage-backed security]
[at the time of origination was underwritten to guidelines which are consistent
with an institutional investor-quality mortgage loan].
B-3
Kindly acknowledge your agreement to the terms of this Purchase
Confirmation by signing in the appropriate space below and returning this
Purchase Confirmation to the undersigned. Telecopy signatures shall be deemed
valid and binding to the same extent as the original.
Sincerely, Agreed to and Accepted by:
COUNTRYWIDE HOME LOANS, INC. [PURCHASER]
By: By:
--------------------------------- ------------------------------------
Name: Xxxxx Xxxxxxx Name:
Title: Executive Vice President Title:
B-4
EXHIBIT A
TO
PURCHASE CONFIRMATION
MORTGAGE LOAN SCHEDULE
(attached)
B-A-1
EXHIBIT B
TO
PURCHASE CONFIRMATION
CALCULATION OF PURCHASE PROCEEDS
(attached)
B-B-1
EXHIBIT C
TO
PURCHASE CONFIRMATION
MISSING CREDIT DOCUMENTS
-----------------------------------
LOAN COUNT LOAN NUMBER DOCUMENT
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
B-C-1
EXHIBIT D
TO
PURCHASE CONFIRMATION
PENDING MORTGAGE LOANS
-----------------------------------
LOAN COUNT LOAN NUMBER DOCUMENT
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
B-D-1
EXHIBIT C
FORM OF CUSTODIAL AGREEMENT
[CUSTODIAN'S LETTERHEAD]
C-1
EXHIBIT D
FORM OF TRADE CONFIRMATION
[COUNTRYWIDE LETTERHEAD]
[DATE]
[PURCHASER]
[STREET ADDRESS]
[CITY, STATE AND ZIP]
Attn: [CONTACT, TITLE]
Re: Sale of $[AMOUNT] Million of Mortgage Loans to [PURCHASER]
(Deal No. yrmm-xxx)
Ladies and Gentlemen:
This Trade Confirmation confirms the agreement between [PURCHASER]
("Purchaser") and Countrywide Home Loans, Inc. ("Countrywide") pursuant to which
Purchaser has agreed to purchase, and Countrywide has agreed to sell, those
certain mortgage loans [identified][summarized] in Exhibit A hereto (the
"Mortgage Loans"), subject to the terms set forth herein.
Closing Date: _________ __, [year][, provided, however, that the parties
shall use their best efforts to consummate the transaction prior to [DATE].
Commitment Amount: $______________.
Purchase Price: $______________.
Percentage: ____%, subject to adjustment as set forth in Exhibit A.
[Loan-level pricing as set forth in Exhibit A.]
Product: [Jumbo]["A"][A-"]["Alt A"] [Sub-prime] [Conforming] [Conventional]
[Government] [Second Lien/HELOC] [[fixed][(x/1) Index adjustable] rate mortgage
loans]. (undefined terms should not be capitalized)
Underwriting Criteria:
Servicing Rights: RETAINED: Retained by Countrywide and serviced on a
[scheduled/scheduled] [actual/actual] [scheduled][actual] basis for the
servicing fee rate [equal to FEE% per annum][set forth in Exhibit A [for each
Mortgage Loan]]. [ With respect to the period prior to the initial Interest
Adjustment Date, 0.25% and, thereafter, 0.375%].
D-1
Prepayment Penalties: [Countrywide] [Purchaser] shall be entitled to any
penalties resulting from the prepayment of any Mortgage Loans by the related
mortgagor(s).
Documentation: [Assignment of a [type of agreement]] [Industry standard
purchase and servicing agreement.]
Conditions: [Review of Mortgage Loans by Purchaser to confirm conformance
with this Trade Confirmation. Countrywide may, at its option, elect to
substitute comparable mortgage loans for any Mortgage Loans rejected by
Purchaser pursuant to the preceding sentence.]
[Countrywide's sale of the Mortgage Loans is expressly subject to (a) the
review of the Mortgage Loans by Purchaser to confirm conformance with the Trade
Confirmation, and (b) purchase of the Mortgage Loans by Countrywide on or before
the Closing Date from the current owner of the Mortgage Loans (the "Current
Owner"). If either of the foregoing conditions are not satisfied, Countrywide
shall have no liability to Purchaser.]
Non-Circumvent: Countrywide and Purchaser understand and agree that
Countrywide may introduce the owner of the Mortgage Loans to Purchaser, that the
Current Owner is a customer of Countrywide and that such relationship of
Countrywide is confidential. Purchaser agrees, with respect to the Current
Owner, Purchaser will not, for the purpose of purchasing other mortgage loans
[for a period of one year from the Closing Date], communicate with or purchase
such other mortgage loans from the Current Owner unless the Current Owner has
had previous business dealings (other than any transactions involving
Countrywide) with the Current Owner in a similar context.
D-2
Please acknowledge your agreement to the terms and conditions of this Trade
Confirmation by signing in the appropriate space below and returning a copy of
the same to the undersigned. Telecopy signatures shall be deemed valid and
binding to the same extent as the original.
Sincerely, Agreed to and Accepted by:
COUNTRYWIDE HOME LOANS, INC. [PURCHASER]
By: By:
--------------------------------- ------------------------------------
Name: Xxxxx Xxxxxxx Name:
Title: Executive Vice President Title:
D-3
EXHIBIT A
TO
TRADE CONFIRMATION
MORTGAGE LOAN SCHEDULE AND PRICING INFORMATION
(attached)
D-A-1
EXHIBIT B
TO
TRADE CONFIRMATION
UNDERWRITING GUIDELINES
(attached)
D-B-1
EXHIBIT E
FORM OF MORTGAGE LOAN SCHEDULE
E-1
EXHIBIT F
FORM OF OFFICER'S CERTIFICATE
I, [identify certifying individual], certify to the [Purchaser], [Master
Servicer], or [Depositor] [i.e. THE PARTY EXECUTING THE CERTIFICATION REQUIRED
UNDER SECTION 302 OF THE XXXXXXXX-XXXXX ACT OF 2002] that:
(i) Based on my knowledge, the information in the annual statement of
compliance, the annual independent public accountant's servicing report and
all servicing reports, officer's certificates and other information
relating to the servicing of the Mortgage Loans conducted by Countrywide
taken as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not
misleading as of the date of this certification;
(ii) The servicing information required to be provided by Countrywide under
the Agreement has been provided to the Purchaser [or the Master Servicer];
(iii) I am is responsible for reviewing the activities performed by
Countrywide under the Agreement and based upon the review required by the
Agreement, and except as disclosed in the annual statement of compliance or
the annual independent public accountant's servicing report, Countrywide
has, as of the date of this certification fulfilled its obligations under
the Agreement; and
(iv) Such officer has disclosed to the Purchaser [orthe Master Servicer]
all significant deficiencies relating to Countrywide's compliance with the
minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar standard as set forth in the Agreement.
Dated as of: COUNTRYWIDE HOME LOANS, INC.,
------------------------ Countrywide
By:
------------------------------------
Name:
Title:
F-1
