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EXHIBIT 10.7
NOMURA ASSET CAPITAL CORPORATION EXHIBIT M
PAGE M-1
AUGUST 1, 1995
FORM OF SERVICING AGREEMENT
SERVICING AGREEMENT
Dated and effective as of ____________ 1, 1995
between
NOMURA ASSET CAPITAL CORPORATION
(Owner)
and
(Servicer)
Fixed Rate and Adjustable Rate
Residential Mortgage Loans
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT M
PAGE M-2
AUGUST 1, 1995
FORM OF SERVICING AGREEMENT
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations, Warranties and Covenants of the Servicer .......... 9
Section 2.02. Representations, Warranties and Covenants of the Owner ............. 10
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Servicer to Act as Servicer ........................................ 12
Section 3.02. Liquidation of Mortgage Loans ...................................... 13
Section 3.03. Collection of Mortgage Loan Payments ............................... 13
Section 3 04. Establishment of Custodial Account, Deposits in Custodial Account .. 13
Section 3.05. Withdrawals From the Custodial Account ............................. 15
Section 3.06. Establishment of Escrow Account; Deposits in Escrow Account ........ 16
Section 3.07. Withdrawals From Escrow Account .................................... 17
Section 3.08. Payment of Taxes, Insurance and Other Charges ...................... 18
Section 3.09. Transfer of Accounts ............................................... 18
Section 3.10. Maintenance of Hazard Insurance and Primary Mortgage Insurance ..... 18
Section 3.11. Fidelity Bond; Errors and Omissions Insurance ...................... 20
Section 3.12. Title, Management and Disposition of REO Property .................. 21
Section 3.13. Liquidation Reports ................................................ 22
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FORM OF SERVICING AGREEMENT
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Section 3.14. Possession of Mortgage Files by Servicer ........................... 22
Section 3.15. Superior Liens ..................................................... 22
ARTICLE IV
PAYMENTS TO THE OWNER
Section 4.01. Distributions ...................................................... 24
Section 4.02. Statements to the Owner ............................................ 24
Section 4.03. Advances by the Servicer ........................................... 25
Section 4.04. Additional Reports to the Owner .................................... 26
ARTICLE V
GENERAL SERVICING PROCEDURES
Section 5.01. Assumption Agreements .............................................. 27
Section 5.02. Satisfaction of Mortgages and Release of Mortgage Files ............ 27
Section 5.03. Servicing Compensation ............................................. 28
Section 5.04. Annual Statement as to Compliance .................................. 28
Section 5.05. Annual Independent Public Accountants' Servicing Report ............ 28
Section 5.06. Owner's Right to Examine Servicer Records .......................... 28
Section 5.07. Possession of Servicing Files ...................................... 29
ARTICLE VI
REPORTS TO BE PREPARED BY SERVICER
Section 6.01. Servicer Shall Provide Access and Information as Reasonably Required 30
Section 6.02. Financial Statements ............................................... 30
ARTICLE VII
THE SERVICER
Section 7.01. Indemnification; Third Party Claims ................................ 31
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT M
PAGE M-4
AUGUST 1, 1995
FORM OF SERVICING AGREEMENT
Page
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Section 7.02. Merger or Consolidation of the Servicer ............................ 31
Section 7 03. Limitation on Liability of the Servicer and Others ................. 32
Section 7.04. Servicer Not to Resign ............................................. 32
ARTICLE VIII
DEFAULT
Section 8.01. Events of Default .................................................. 33
Section 8.02. Waiver of Defaults ................................................. 34
ARTICLE IX
TERMINATION
Section 9.01. Termination ........................................................ 35
Section 9.02. Termination Without Cause .......................................... 35
Section 9.03. Termination With Cause ............................................. 35
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Successor to the Servicer ......................................... 36
Section 10.02. Amendment ......................................................... 37
Section 10 03. Recordation of Agreement .......................................... 37
Section 10.04. Duration of Agreement ............................................. 37
Section 10.05. Governing Law ..................................................... 37
Section 10.06. General Interpretive Principles ................................... 37
Section 10.07. Reproduction of Documents ......................................... 38
Section 10.08. Notices ........................................................... 38
Section 10.09. Severability of Provisions ........................................ 38
Section 10.10. No Partnership .................................................... 39
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT M
PAGE M-5
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FORM OF SERVICING AGREEMENT
Page
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Section 10.11. Execution; Successors and Assigns ................................. 39
Section 10.12. Reconstitution Agreements ......................................... 39
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT M
PAGE M-6
AUGUST 1, 1995
FORM OF SERVICING AGREEMENT
EXHIBITS
EXHIBIT A CONTENTS OF MORTGAGE FILES
EXHIBIT B CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT C CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT D ESCROW ACCOUNT CERTIFICATION
EXHIBIT E ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT F CUSTODIAL AGREEMENT
EXHIBIT G MORTGAGE LOAN SCHEDULE
EXHIBIT H FORM OF DELINQUENCY REPORT (LOAN-BY-LOAN)
EXHIBIT I FORM OF DELINQUENCY REPORT (AGGREGATE)
EXHIBIT J FORM OF STATUS DETAIL REPORT
EXHIBIT K FORM OF FORECLOSURE LOG
EXHIBIT L FORM OF FINANCIAL REPORT
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT M
PAGE M-7
AUGUST 1, 1995
FORM OF SERVICING AGREEMENT
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This is a Servicing Agreement dated and effective as of __________1 , 1995,
and is executed between Nomura Asset Capital Corporation, as Owner
(hereinafter, the "Owner") and _________________________, as servicer (the
"Servicer").
WHEREAS, the Owner is the owner of certain residential, single-family,
first and second lien mortgage and deed of trust loans (the "Mortgage Loans")
identified on the Mortgage Loan Schedule attached hereto, as revised from time
to time; and
WHEREAS, the Owner desires to have the Servicer service and administer the
Mortgage Loans for the Owner and the Servicer desires to service and administer
the Mortgage Loans for the Owner in accordance with the terms and conditions as
set forth herein; and
WHEREAS, the Owner and the Servicer wish to prescribe the management,
servicing and control of the Mortgage Loans:
THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the Owner and the Servicer agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
"Accounting Cut-off Date": With respect to each Remittance Date, the last
Business Day of the month immediately preceding the related Remittance Date.
"Adjustment Date": With respect to each adjustable rate Mortgage Loan, the
date set forth in the related Mortgage Note on which the Mortgage Interest Rate
may change and each annual or semi-annual anniversary of such date, or such
other dates described in the related Mortgage Note as dates on which the
Mortgage Interest Rate may change. The first Adjustment Date as to each
adjustable rate Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Advance": As to any Mortgage Loan, an advance made by the Servicer
pursuant to Section 4.03.
"Agreement": This Servicing Agreement, including all exhibits hereto, and
all amendments hereof and supplements hereto.
"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 of record the sale of the related Mortgage Loan to the Owner.
"Appraised Value": As to any Mortgaged Property, the lesser of (i) the
appraised value of such Mortgaged Property based upon the appraisal made at the
time of the origination of the related Mortgage Loan, and (ii) the sales price
of the Mortgaged Property at such time of organization, except in the case of a
Mortgaged
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Property securing a refinanced or modified Mortgage Loan, as to which such term
shall mean either the appraised value as determined (if no appraisal is
obtained) above or the appraisal value determined in an appraisal at the time
of refinancing or modification, as the case may be.
"Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking or savings and loan institutions in ______________________ or
New York, New York are authorized or obligated by law or executive order to be
closed.
"Custodial Account": The separate account or accounts created and
maintained pursuant to Section 3.04.
"Custodial Agreement". The agreement for the retention of each Mortgage
Note, Mortgage, Assignment of Mortgage and other documents, which agreement is
initially in the form annexed hereto as Exhibit F.
"Custodian": The custodian under the Custodial Agreement, or its successor.
"Customary Servicing Procedures": Procedures (including collection
procedures) that the Servicer customarily employs and exercises in servicing
and administering mortgage loans for its own account and, in the absence of
anything in this Agreement to the contrary, which are in accordance with the
servicing procedures for Mortgage Backed Securities pursuant to the FNMA
Selling and Servicing Guide, Special Servicing Option, under the
Scheduled/Scheduled accounting and reporting method.
"Determination Date": With respect to each Remittance Date, the second
Business Day prior to such Remittance Date.
"Due Date": The day of the month on which each Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
"Due Period": With respect to each Remittance Date, the applicable Due
Period shall be the period beginning on the second day of the month preceding
the month of such Remittance Date, and ending on the first day of the month of
such Remittance Date.
"Eligible Account": Either (i) an account or accounts maintained with a
depository institution acceptable to FNMA as a depository for custodial
accounts at the time any amounts are held in deposit therein, the deposits of
which are at all times insured by the FDIC to the limits established by such
corporation, (ii) an account or accounts the deposits in which are at all times
fully insured by the FDIC or (iii) a trust account or accounts maintained with
a federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity. Each such account must be maintained
at a banking institution rated at least "75" by IDC or C/D by Xxxxxxxx
Bankwatch. Eligible Accounts may bear interest.
"Escrow Account": The separate account or accounts created and maintained
pursuant to Section 3.06.
"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 mortgage pursuant to any Mortgage Loan.
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"Event of Default": Any one of the conditions or circumstances
enumerated in Section 8.01.
"FDIC": The Federal Deposit Insurance Corporation or any successor.
"FHLMC": The Federal Home Loan Mortgage Corporation or any successor.
"Fidelity Bond": A fidelity bond to be obtained by the Servicer
pursuant to Section 3.11.
"FNMA": The Federal National Mortgage Association or any successor.
"Gross Margin": With respect to each adjustable rate Mortgage Loan,
the fixed amount set forth in the related Mortgage Note to be added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note, which fixed amount is used to determine the Mortgage Interest
Rate for such Mortgage Loan. The Gross Margin as to each Mortgage Loan will be
set forth on the Mortgage Loan Schedule.
"Index": With respect to each adjustable rate Mortgage Loan, the
index used for calculating the related Mortgage Interest Rate as set forth in
the Mortgage Loan Schedule.
"Liquidation Proceeds": Cash (other than REO Disposition Proceeds)
received in connection with the liquidation of a defaulted Mortgage Loan whether
through the sale or assignment of the Mortgage Loan, trustee's sale, foreclosure
sale, sale of the Mortgaged Property or otherwise.
"Loan-to-Value Ratio": With respect to any Mortgage Loan, the
original principal balance of such Mortgage Loan divided by the Appraised Value
of the related Mortgaged Property.
"Maximum Rate": With respect to each adjustable rate Mortgage Loan
the amount set forth in the Mortgage Note as the maximum Mortgage Interest
Rate thereunder.
"Minimum Rate": With respect to each adjustable rate Mortgage Loan,
the amount set forth in the Mortgage Note as the minimum Mortgage Interest Rate
thereunder.
"Monthly Payment": The scheduled monthly payment of principal and
interest on a Mortgage Loan which is payable by a Mortgagor under the related
Mortgage Note.
"Mortgage": The mortgage, deed of trust or other instrument creating
a first or second lien on or first or second priority ownership interest in an
estate in fee simple or a leasehold interest in real property securing a
Mortgage Note.
"Mortgage File": The items pertaining to a particular Mortgage Loan
which are identified on Exhibit A hereto and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Interest Rate": With respect to any Mortgage Loan the
annual rate, which in the case of adjustable rate Mortgage Loans may change
from time to time, at which interest accrues on such Mortgage Loan in accordance
with the provisions of the related Mortgage Note.
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"Mortgage Loan": An individual mortgage loan which is the subject of this
Agreement, each mortgage loan subject to this Agreement from time to time being
identified on the Mortgage Loan Schedule, including without limitation the
contents of the Mortgage File, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, insurance proceeds, condemnation proceeds, REO
Disposition Proceeds and all other rights, benefits, proceeds and obligations
arising from or in connection with such mortgage loan. To the extent applicable
and as the context so permits, any and all references to "Mortgage Loan" or
"Mortgage Loans" herein shall be deemed to include any Mortgage Loan that has
become an REO Property.
"Mortgage Loan Remittance Rate": As to each Mortgage Loan, the annual rate
of interest remitted to the Owner, which shall be equal to the Mortgage
Interest Rate minus the applicable Servicing Fee Rate.
"Mortgage Loan Schedule": The schedule of Mortgage Loans attached hereto
as Exhibit G, as supplemented and amended from time to time, such schedule
setting forth the information as to each Mortgage Loan in form and substance
agreed to by the Servicer and the Owner.
"Mortgage Note": The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
"Mortgaged Property": The real property securing repaying of the debt
evidenced by a Mortgage Note, consisting of property considered to be real
estate under the law of the state in which it is located.
"Mortgagor": The obligor or obligors on a Mortgage Note.
"Nonrecoverable Advance": Any Advance or Servicing Advance which, in the
Servicer's good faith determination, if made with respect to a Mortgage Loan
would not be ultimately recoverable from any related payments or collections
on, or with respect to, such Mortgage Loan, as evidenced by an Officer's
Certificate detailing the reason for such determination and containing an
appraisal or comparative market analysis of the value of the related Mortgaged
Property.
"Officer's Certificate": A certificate signed by the President, a Vice
President, the Treasurer, the Secretary, an Assistant Treasurer or an Assistant
Secretary of the Servicer, and delivered to the Owner as required by this
Agreement.
"Opinion of Counsel": A written opinion of counsel, who may be in-house
counsel of the Servicer, reasonably acceptable to the Owner.
"Owner": Nomura Asset Capital Corporation and its successors and assigns.
"Periodic Rate Cap": The provision in each adjustable rate Mortgage Note
that limits permissible increases and decreases in the Mortgage Interest Rate
on any Adjustment Date.
"Permitted Instruments": Any one or more of the following:
direct obligations of, or obligations fully guaranteed as to principal and
interest by, the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and credit of the United
States;
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT M
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repurchase of obligations (the collateral for which is held by a third
party) with respect to any security described in clause (i) above, provided
that the long-term unsecured obligations of the party agreeing to repurchase
such obligations are at the time rated by each of the Rating Agencies in one of
its two highest long-term rating categories;
certificates of deposit, time deposits, demand deposits and bankers'
acceptances of any bank or trust company incorporated under the laws of the
United States or any state thereof or the District of Columbia, provided that
the short-term commercial paper of such bank or trust company (or, in the case
of the principal depository institution holding company, the long-term
unsecured debt obligations of the depository institution holding company) at
the date of acquisition thereof has been rated by each of the Rating Agencies
in its highest short-term rating;
commercial paper (having original maturities of not more than nine months)
of any corporation incorporated under the laws of the United States or any
state thereof or the District of Columbia which on the date of acquisition has
been rated by each of the Rating Agencies in its highest short-term rating; and
any other obligation or security acceptable to the Owner;
provided, that no such instrument shall be a Permitted Instrument if such
instrument evidences either (a) the right to receive interest only payments
with respect to the obligations underlying such instrument or (b) both
principal and interest payments derived from obligations underlying such
instrument where the principal and interest payments with respect to such
instrument provide a yield to maturity exceeding 120% of the yield to maturity
at par of such underlying obligation.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal Prepayment": Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, net of
any prepayment penalty or premium thereon which is retained by the Servicer,
and 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 in Full": Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
"Purchase Date": With respect to any Mortgage Loan, the date on which such
Mortgage Loan was acquired by the Owner.
"Rating Agency": Each of Standard & Poor's Ratings Group, Xxxxx'x
Investors Service, Inc. and Fitch Investors Service, Inc.
"Reconstitution Agreement": As defined in Section 10.12.
"REO Disposition": The final sale by the Servicer of a Mortgaged Property
acquired by the Servicer in foreclosure or by deed in lieu of foreclosure.
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"REO Disposition Proceeds": All amounts received with respect to an REO
Disposition pursuant to Section 3.12.
"REO Property": A Mortgaged Property acquired by the Servicer through
foreclosure, as described in Section 3.12.
"Remittance Date": The 25th day of each month, beginning ______ 1995, or
if such 25th day is not a Business Day, the immediately succeeding Business Day.
"Servicer" _________________, or its successor in interest or any
successor to the Servicer under this Agreement appointed as herein provided.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Servicer of its
servicing obligations and not part of the Servicer's general and administrative
expenses, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement or
judicial proceedings, including foreclosures, relating to Mortgage Loans or
Mortgaged Properties, (c) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the Mortgage,
and (d) the maintenance of hazard insurance, payment of property taxes
(including tax penalties) or mortgage insurance premiums.
"Servicing Fee": With respect to each Mortgage Loan, the amount of the
annual fee the Owner shall pay to the Servicer, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the applicable
Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage
Loan. Such fee shall be payable monthly, computed on the basis of the same
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 Owner to pay the Servicing Fee is limited to, and payable solely from, the
interest portion (including recoveries with respect to interest from
Liquidation Proceeds and REO Disposition Proceeds, to the extent permitted by
Section 3.05) of such Monthly Payments collected by the Servicer, or as
otherwise provided under Section 3.05.
"Servicing Fee Rate": With respect to each adjustable rate Mortgage Loan
___% per annum and with respect to each fixed rate Mortgage Loan___% per annum.
"Servicing File": With respect to each Mortgage Loan, items 10 through
45, inclusive, of the Mortgage File, including photocopies of the Mortgage Loan
documents retained by the Custodian, and any other documents necessary for the
Servicer to service the Mortgage Loans in accordance with the terms of this
Agreement.
"Stated Principal Balance": As to each Mortgage Loan and as of any date,
(i) the principal balance of the Mortgage Loan at the Purchase 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 Owner with
respect to the Mortgage Loan representing payments or recoveries of principal,
or advances in lieu thereof.
"Sub-Servicer": As defined in Section 3.01.
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT M
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ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 2.01. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICER.
The Servicer hereby represents and warrants to and covenants with the
Owner, as of the date hereof, that:
(a) The Servicer is a corporation duly organized, validly existing, and
in good standing under the laws of the State of __________ and has
all licenses necessary to carry on its business as now being conducted
and it or a Sub-Servicer is licensed, qualified and in good standing
in the states where the Mortgaged Property is located if the laws of
such state require licensing or qualification; the Servicer has
corporate power and authority to execute and deliver this Agreement
and to perform in accordance herewith; the execution, delivery and
performance of this Agreement by the Servicer and the consummation of
the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer, subject to applicable law;
and all requisite corporate action has been taken by the Servicer to
make this Agreement valid and binding upon the Servicer in accordance
with its terms:
(b) No approval of the transactions contemplated by this Agreement from
any court or governmental agency or body having jurisdiction over the
Servicer is required or, if required, such approval has been or will,
prior to ________, 1995, be obtained:
(c) The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer and will not
result in the breach of any term or provision of the charter or
by-laws of the Servicer or result in the breach of any term or
provision of, or conflict with or constitute a default under or
result in the acceleration of any obligation under, any agreement,
indenture or loan or credit agreement or other instrument to which
the Servicer or its property is subject, or result in the violation of
any law, rule, regulation, order, judgment or decree to which the
Servicer or its property is subject.
(d) There is no action, suit, proceeding or investigation pending or, to
the best knowledge of the Servicer, threatened against the Servicer
which, either individually or in the aggregate, would result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Servicer, or in any material
impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted or which would draw into
question the validity of this Agreement or the Mortgage Loans or of
any action taken or to be taken in connection with the obligations of
the Servicer contemplated herein, or which would materially impair
the ability of the Servicer to perform under the terms of this
Agreement.
(e) The Servicer does not believe, not does it have any reason or cause
to believe, that it cannot perform each and every covenant contained
in this Agreement either directly or through a Sub-Servicer;
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(f) The Servicer is an approved seller/servicer of mortgage loans for FNMA or
FHLMC, has the facilities, procedures and experienced personnel necessary
for the sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Servicer is in good standing to sell and to service mortgage
loans for FNMA or FHLMC, and no event has occurred, including but not
limited to a change in insurance coverage, which would make the Servicer
unable to comply with FNMA OR FHLMC eligibility requirements or which
would require notification to either FNMA or FHLMC:
(g) Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in connection
with the transaction contemplated hereby contains any untrue statement of
fact on the part of the Servicer.
(h) The collection practices to be used by the Servicer with respect to the
Mortgage Loans will be legal, proper, prudent and customary in the
mortgage servicing business.
(i) Each Mortgage Loan shall be serviced in accordance with the terms of the
related Mortgage Note and Mortgage and in accordance with applicable laws
and all interest rate adjustments shall be made in compliance with the
terms of the related Mortgage Note and Mortgage and all applicable laws;
and
(j) The Servicer has in effect, and shall cause to remain in effect for the
duration of this Agreement, all insurance policies and fidelity bonds
required to be maintained pursuant to Sections 3.10 and 3.11 hereof.
SECTION 2.02. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OWNER.
The Owner hereby represents and warrants to and covenants with the
Servicer, as of the date hereof, that:
(a) The Owner is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware and has all licenses
necessary to carry on its business as now being conducted; the Owner has
corporate power and authority to execute and deliver this Agreement; the
execution, delivery and performance of this Agreement by the Owner and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Owner, subject to applicable law; and all
requisite corporate action has been taken by the Owner to make this
Agreement valid and binding upon the Owner in accordance with its terms;
(b) No approval of the transactions contemplated by this Agreement from any
court or governmental agency or body having jurisdiction over the Owner is
required or, if required, such approval has been or will, prior to _______,
1995, be obtained;
(c) The consummation of the transactions contemplated by this Agreement are in
the ordinary course of business of the Owner and will not result in the
breach of any term or provision of the charter or by-laws of the Owner or
result in the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of any obligation
under, any agreement, indenture or loan or credit agreement or other
instrument to which the Owner or its
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property is subject, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Owner or its property
is subject; and
(d) There is no action, suit, proceeding or investigation pending or, to the
best knowledge of the Owner, threatened against the Owner which, either
individually or in the aggregate, would result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Owner, or in any material impairment of the right or ability
of the Owner to carry on its business substantially as now conducted or
which would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be taken or be taken in
connection with the obligations of the Owner contemplated herein, or which
would materially impair the ability of the Owner to perform under the terms
of this Agreement.
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ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01. SERVICER TO ACT AS SERVICER.
The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans as servicer and shall have full power and
authority to do any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable and
consistent with the terms of this Agreement.
Consistent with the terms of this Agreement and absent specific
instructions from the Owner, the Servicer 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 provided, however,
that (unless the Mortgagor is in default with respect to the Mortgage Loan, or
such default is, in the judgment of the Servicer, imminent, and the Servicer
has the consent of the Owner) the Servicer may not, permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer or forgive the payment of any principal or interest, change the
outstanding principal amount (except for actual payments of principal), make
any future advances or extend the final maturity date on such Mortgage Loan
with respect thereto. Without limiting the generality of the foregoing, the
Servicer is hereby authorized and empowered to execute and deliver on behalf of
itself, and the Owner, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and the Mortgaged Properties. If reasonably
required by the Servicer, the Owner shall furnish the Servicer with such
limited powers of attorney and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Agreement.
The Servicer may perform its servicing responsibilities through agents
or independent contractors acting as sub-servicers hereunder (each, a
"Sub-Servicer"), but shall not thereby be released from any of its
responsibilities hereunder, and the Servicer shall diligently pursue all of its
rights against such Sub-Servicer. Notwithstanding any agreement with a
Sub-Servicer (a "Sub-Servicing Agreement"), any of the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise,
the Servicer shall remain obligated and liable to the Owner for the servicing
and administering of the Mortgage Loans in accordance with the provisions of
this Agreement without diminution of such obligation or liability by virtue of
such Sub-Servicing Agreements or arrangements or by virtue of indemnification
from the Sub-Servicer for any acts and omissions and to the same extent and
under the same terms and conditions as if the Servicer alone were servicing and
administering the Mortgage Loans and any other transactions or services relating
to the Mortgage Loans involving the Sub-Servicer shall be deemed to be between
the Sub-Servicer and the Servicer alone and the Owner shall have no obligations,
duties or liabilities with respect to the Sub-Servicer including no obligation,
duty or liability of the Owner to pay Sub-Servicer's fees and expenses. For
purposes of this Agreement, the Servicer shall be deemed to have received
payments on Mortgage Loans when the Sub-Servicer has received such payments. The
Servicer shall pay all fees and expenses of the Sub-Servicer from its own funds,
the Servicing Fee or other amounts permitted to be retained by or reimbursed to
the Servicer hereunder.
In servicing and administering the Mortgage Loans, the Servicer shall
employ Customary Servicing Procedures.
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SECTION 3.02. LIQUIDATION OF MORTGAGE LOANS.
In the event that any payment due under any Mortgage Loan is not paid
when the same becomes due and payable, or in the event the Mortgagor fails to
perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Servicer shall take
such action as it shall deem to be in the best interest of the Owner and shall
not adversely affect the coverage of the related Insurance Agreement. In the
event that any payment due under any Mortgage Loan remains delinquent, the
Servicer shall commence foreclosure proceedings in accordance with Customary
Servicing Procedures, provided that prior to commencing foreclosure
proceedings, the Servicer shall notify the Owner in writing (which notice may
be given via facsimile) of the Servicer's intention to so do, and the Servicer
will not commence foreclosure proceedings if the Owner objects to such action
within two (2) Business Days of receiving such notice. In such connection, the
Servicer shall from its own funds make all necessary and proper Servicing
Advances unless such advance would be a Nonrecoverable Advance.
SECTION 3.03. COLLECTION OF MORTGAGE LOAN PAYMENTS.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Servicer will proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable and will take reasonable care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and hazard
insurance premiums and all other charges that, as provided in any Mortgage, will
become due and payable to the end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due
and payable.
SECTION 3.04. ESTABLISHMENT OF CUSTODIAL ACCOUNT; DEPOSITS IN
CUSTODIAL ACCOUNT.
(a) The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Custodial
Accounts (collectively, the "Custodial Account"), in the form of time deposit
or demand accounts, which may be interest bearing, titled "_____________________
in trust for the Owner under a Servicing Agreement dated as of _________________
1, 1995". Such Custodial Account shall be established with a commercial bank, a
savings bank or a savings and loan association. In any case, the Custodial
Account shall be an Eligible Account which may be drawn on by the Servicer. The
creation of any Custodial Account shall be evidenced by (a) a certification in
the form of Exhibit B hereto, in the case of an account established with the
Servicer, or (b) a letter agreement in the form of Exhibit C hereto, in the
case of an account held by a depository other than the Servicer. In either
case, a copy of such certification or letter agreement shall be furnished to
the Owner upon request.
(b) The Servicer shall deposit in the Custodial Account within two
(2) Business Days of receipt, and retain therein the following payments and
collections received or made with respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
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(iii) all Liquidation Proceeds and all REO Disposition Proceeds;
(iv) all proceeds received by the Servicer under any title, hazard,
primary mortgage guaranty or other insurance policy, including amounts required
to be deposited pursuant to Section 3.10, other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Customary Servicing
Procedures;
(v) all awards or settlements in respect of condemnation
proceedings or eminent domain affecting any Mortgaged Property which are not
released to the Mortgagor in accordance with Customary Servicing Procedures;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Sections 3.04(c), 4.01, 4.03, 5.01 and 5.02; and
(vii) with respect to each Principal Prepayment in Full, an amount
(to be paid by the Servicer out of its own funds) which, when added to all
amounts allocable to interest received in connection with the Principal
Prepayment in Full, equals one month's interest on the amount of principal so
prepaid for the month of prepayment at the applicable Mortgage Loan Remittance
Rate; provided that, the Servicer's obligation to pay such amount in any one
month shall be limited to the aggregate Servicing Fee received by the Servicer
for such month.
(c) The Servicer may invest the funds in the Custodial Account in
Permitted Instruments, which, unless such Permitted Instruments are
withdrawable on demand, shall mature not later than two (2) Business Days prior
to the date on which such funds will be necessary to make withdrawals from the
Custodial Account for the purposes specified in Section 3.05 (except that if
such Permitted Instrument is an obligation of the institution that maintains
the Custodial Account, then such Permitted Instrument shall mature not later
than such withdrawal date) and shall not be sold or disposed of prior to its
maturity. In the absence of any such investment, the Servicer shall hold all
funds in the Custodial Account uninvested. All such Permitted Instruments shall
be made in the name of the Servicer in the trust capacity in which the
Custodial Account is held or its nominee. The Servicer shall receive as
additional servicing compensation an amount equal to all income and gain
realized from any such investment. The amount of any losses incurred in respect
of any such investments shall be deposited in the Custodial Account by the
Servicer out of its own funds immediately as realized.
(d) The requirements in this Section 3.04 for deposit in the
Custodial Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of
late payment charges, prepayment charges and assumption fees need not be
deposited by the Servicer in the Custodial Account.
SECTION 3.05. WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.
The Servicer shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided for in Section 4.01;
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(ii) to reimburse itself for unreimbursed Advances, the Servicer's
right to reimburse itself pursuant to this subclause (ii) being limited to
amounts received on the related Mortgage Loan which represent late payments of
principal and/or interest respecting which any such Advance was made;
(iii) to reimburse itself for unreimbursed Servicing Advances, for
unreimbursed Advances and for accrued and unpaid Servicing Fees, the Servicer's
right to reimburse itself pursuant to this subclause (iii) with respect to any
Mortgage Loan being limited to related Liquidation Proceeds, condemnation
proceeds, REO Disposition Proceeds, amounts representing proceeds of insurance
policies covering the related Mortgaged Property and such other amounts as may
be collected by the Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of any such reimbursement,
the Servicer's right thereto shall be prior to the rights of Owner;
(iv) to reimburse itself for expenses incurred by and reimbursable
to it pursuant to Section 7.01;
(v) to pay to itself any interest earned on funds deposited in the
Custodial Account, such withdrawal to be made monthly not later than the
Remittance Date;
(vi) to withdraw any amounts inadvertently deposited in the
Custodial Account or not required to be deposited therein; and
(vii) to clear and terminate the Custodial Account upon the
termination of this Agreement.
On each Remittance Date, the Servicer shall withdraw all funds from the
Custodial Account except for those amounts which, pursuant to Section 4.01, the
Servicer is not obligated to remit on such Remittance Date. The Servicer may
use such withdrawn funds only for the purposes described in this Section 3.05.
If after receipt and application of Liquidation Proceeds or REO
Disposition Proceeds in accordance with the foregoing the Servicer has
sustained an unrecovered loss in connection with a Servicing Advance or an
Advance, the amount of unrecovered loss shall be reimbursed to the Servicer
from amounts in the Custodial Account, or if such funds are insufficient, by
payment to the Servicer by the Owner within ten (10) Business Days of the
receipt of notice by such Owner of such amount. The Servicer shall reimburse
itself and demand reimbursement only if the Servicer has reasonably determined
that such reimbursements are in accordance with Customary Servicing Advances as
evidenced by an Officer's Certificate delivered to the Owner.
SECTION 3.06. ESTABLISHMENT OF ESCROW ACCOUNT; DEPOSITS IN ESCROW
ACCOUNT.
(a) The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts (collectively, the "Escrow
Account"), in the form of time deposit or demand accounts, which may be
interest bearing, titled, with respect to Escrow Payments actually held by the
Servicer, "_______________________ in trust for various Mortgagors, Taxes and
Insurance Escrow Funds". Such Escrow Account shall be established with a
commercial bank, a savings bank or a savings and loan association. The Escrow
Account shall be an Eligible Account and may be drawn on by the Servicer as
provided herein. The creation of any Escrow Account shall be evidenced by (a) a
certification in the form of Exhibit D hereto, in the case of an account
established with the Servicer, or (b) a letter agreement in the
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form of Exhibit E hereto, in the case of an account held by a depository other
than the Servicer. In either case, a copy of such certification or letter
agreement shall be furnished to the Owner upon request.
(b) The Services shall deposit in the Escrow Account within two (2)
Business Days of receipt or earlier if so required by law and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans, for the
purpose of effecting timely payment of any such items as required under the
terms of this Agreement, and (ii) all amounts representing proceeds of any
hazard insurance policy which are to be applied to the restoration or repair of
any Mortgaged Property. The Servicer shall make withdrawals therefrom only in
accordance with Section 3.07 hereof. To the extent required by law, the Servicer
shall pay interest on escrowed funds to the Mortgagor notwithstanding that the
Escrow may not bear interest.
(c) The Servicer may invest the funds in an Escrow Account in
Permitted Instruments, which, unless such Permitted Instruments are withdrawable
on demand, shall mature not later than two (2) Business Days prior to the date
on which such funds will be necessary to make withdrawals from such Escrow
Account for the purposes specified in Section 3.07 (except that if such
Permitted Instrument is an obligation of the institution that maintains such
Escrow Account, then such Permitted Instrument shall mature not later than such
withdrawal date) and shall not be sold or disposed of prior to its maturity. In
the absence of any such investment, the Servicer shall hold all funds in the
Escrow Account uninvested. All such Permitted Instruments shall be made in the
name of the Servicer in the trust capacity in which the related Escrow Account
is held or its nominee. The Servicer shall receive as additional servicing
compensation an amount equal to all income and gain realized from any such
investment, to the extent in excess of amounts necessary to make any interest
payments required to be made to the applicable Mortgagor. The amount of any
losses incurred in respect of any such investment shall be deposited in the
related Escrow Account by the Servicer out of its own funds immediately as
realized.
SECTION 3.07. WITHDRAWALS FROM ESCROW ACCOUNT.
Withdrawals from the Escrow Account shall be made by the Servicer,
only (a) to effect timely payments of ground rents, taxes, assessments, water
rates, mortgage insurance premiums, fire and hazard insurance premiums or other
items constituting Escrow Payments for the related Mortgage, (b) to reimburse
the Servicer for any Servicing Advance made by the Servicer pursuant to Section
3.08 hereof with respect to a related Mortgage Loan, but only from amounts
received on the related Mortgage Loan which represent late payments or
collections of Escrow Payments thereunder, (c) to refund to any Mortgagor any
funds found to be in excess of the amounts required under the terms of the
related Mortgage Loan, (d) for transfer to the Custodial Account in accordance
with the terms of the related Mortgage Loan, (e) for application to restoration
or repair of the Mortgaged Property, for transfer to the Custodial Account in
accordance with the terms of the related Mortgage Loan, (e) for application to
restoration or repair of the Mortgaged Property, (f) to pay to the Mortgagor,
to the extent required by law, any interest paid on the funds deposited in the
Escrow Account, (g) to pay to itself any interest earned on funds deposited in
the Escrow Account (and not required to be paid to the Mortgagor), such
withdrawal to be made monthly not later than the Remittance Date, or (h) to
clear and terminate the Escrow Account upon the termination of this Agreement.
SECTION 3.08. PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES.
With respect to each Mortgage Loan that provides for Escrow Payments,
the Servicer shall maintain accurate records reflecting the status of ground
rents, taxes, assessments, water rates and other charges
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which are or may become a lien upon the Mortgaged Property and the status of
fire and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date and
at a time appropriate for securing maximum discounts allowable, employing for
such purpose deposits of the Mortgagor in the Escrow Account which shall have
been estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage.
To the extent that a Mortgage does not provide for Escrow Payments,
the Servicer shall determine that any such payments are made by the Mortgagor
at the time they first become due. The Servicer assumes full responsibility for
the timely payment of all such bills and shall effect timely payments of all
such bills irrespective of each Mortgagor's faithful performance in the payment
of same of the making of the Escrow Payments and shall make advances from its
own funds to effect such payments.
SECTION 3.09. TRANSFER OF ACCOUNTS.
The Servicer may transfer the Custodial Account or the Escrow Account
to a different depository institution. Such transfer shall be made only upon
obtaining the consent of the Owner.
SECTION 3.10. MAINTENANCE OF HAZARD INSURANCE AND PRIMARY MORTGAGE
INSURANCE.
The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage customary in the area where the
Mortgaged Property is located, in an amount which is as least equal to the
lesser of (i) the full insurable value of the Mortgaged Property and (ii) the
greater of (a) the outstanding principal balance owing on the Mortgage Loan and
(b) an amount such that the proceeds of such insurance shall be sufficient to
avoid the application to the Mortgagor or loss payee of any coinsurance clause
under the policy).
If the Mortgaged Property is 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) the Servicer will
cause to be maintained a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration with a generally
acceptable insurance carrier, in an amount representing coverage not less than
the least of (i) the outstanding principal balance of the Mortgage Loan,
(ii) the full insurable value of the Mortgaged Property, or (iii) the maximum
amount of insurance available under the National Flood Insurance Act of 1968
and the Flood Disaster Protection Act of 1973, each as amended.
The Servicer shall also maintain on property acquired upon
foreclosure, or by deed in lieu of foreclosure, of any Mortgage Loan, fire and
hazard insurance with extended coverage in an amount which is at least equal to
the maximum insurable value of the improvements which are a part of such
property, liability insurance and, to the extent required and available under
the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act
of 1973, each as amended, flood insurance in an amount required above. Any
amounts collected by the Servicer under any such policies (other than amounts
to be deposited in the Escrow Account and applied to the restoration or repair
of the property subject to the related Mortgage or property acquired in
liquidation of the Mortgaged Loan, or to be released to the Mortgagor in
accordance with Customary Servicing Procedures) shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 3.05. It is
understood and agreed that no earthquake or other additional insurance need be
required by the Servicer of any Mortgagor or maintained on property acquired in
respect of a Mortgage Loan, other than pursuant to such
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applicable laws and regulations as shall at any time be in force and shall
require such additional insurance. All policies required hereunder shall be
endorsed with standard mortgagee clauses with loss payable to the Servicer, and
shall provide for prior written notice of any cancellation, reduction in amount
or material change in coverage to the Servicer. The Servicer shall not
interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent.
In the event that the Servicer shall obtain and maintain a blanket policy
insuring against fire and hazards of extended coverage on all of the Mortgage
Loans, then, to the extent such policy names the Servicer as loss payee and
provides coverage in an amount equal to the amount required under the preceding
paragraphs, and otherwise complies with the requirements of the preceding
paragraph, the Servicer shall be deemed conclusively to have satisfied its
obligations under the preceding paragraphs of this Section 3.10, it being
understood and agreed that such blanket policy may contain a deductible clause,
in which case the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with the
preceding paragraphs, and there shall have been a loss which would have been
covered by such policy, deposit in the Custodial Account the difference, if any,
between the amount that would have been payable under a policy complying with
the preceding paragraph and the amount paid under such blanket policy. Upon the
request of the Owner, the Servicer shall cause to be delivered to the Owner a
certified true copy of such policy.
With respect to each Mortgage Loan which had a Loan-to-Value Ratio greater
than 85% at origination, and with respect to each Mortgage Loan which had a
Loan-to-Value Ratio between 80% and 85% at origination for which primary
mortgage insurance was required by the related originator, the Servicer will
maintain in full force and effect, a primary mortgage insurance policy issued by
a FNMA or FHLMC approved insurer qualified to do business in the jurisdiction in
which the related Mortgage Property is located which insures that portion of the
Mortgage Loan as required pursuant to the Nomura Residential Non-Conforming
Mortgage Loan Program. Such coverage may be terminated only if (a) the
Loan-to-Value Ratio of the related Mortgage Loan has been reduced to 75% or
less; (b) a request for termination of the primary mortgage insurance policy is
received from the Mortgagor; (c) the Mortgage Loan has a satisfactory payment
history for the twelve months preceding such termination; and (d) the Servicer
obtains, at the Mortgagor's expense, an updated appraisal indicating that the
loan-to-value ratio of the Mortgage Loan based on such appraisal and the then
current unpaid principal balance of the Mortgage Loan is 75% or less. The
Servicer will not cancel or refuse to renew any primary mortgage insurance
policy in effect on the Purchase Date that is required to be kept in force under
this Agreement unless a replacement primary mortgage insurance policy for such
cancelled or non-renewed policy is obtained from and maintained with an insurer
that is a FNMA or FHLMC approved insurer qualified to do business in the
jurisdiction in which the related Mortgaged Property is located. The Servicer
shall not take any action which would result in non-coverage under any
applicable primary mortgage insurance policy of any loss which, but for the
actions of the Servicer, would have been covered thereunder. In connection with
an assumption or substitution agreement entered into or to be entered into
pursuant to Section 5.01, the Servicer shall promptly notify the insurer under
the related primary mortgage insurance policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and shall
take all actions which may be required by such insurer as a condition to the
continuation of coverage under the primary mortgage insurance policy. If such
primary mortgage insurance policy is terminated as a result of such assumption
or substitution of liability, the Servicer shall obtain a replacement primary
mortgage insurance policy as provided above at the Servicer's expense. Evidence
of such replacement coverage shall be forwarded to the Owner within thirty (30)
days of such cancellation.
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In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Owner, claims to the insurer
under any primary mortgage insurance policy in a timely fashion in accordance
with the terms of such policies and, in this regard, to take such actions as
shall be necessary to permit recovery under any primary mortgage insurance
policy respecting a defaulted Mortgage Loan. Pursuant to Section 3.04, any
amounts collected by the Servicer under any primary mortgage insurance policy
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 3.05.
SECTION 3.11. FIDELITY BOND; ERRORS AND OMISSIONS INSURANCE.
The Servicer shall maintain with responsible companies, at its own
expense, a blanket fidelity bond and an errors and omissions insurance policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Servicer Employees"). Any such fidelity bond
and errors and omissions insurance shall be in the form of the Mortgage
Banker's Blanket Bond and shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions, failure to
maintain any insurance policies required pursuant to this Agreement and
negligent acts of such Servicer Employees. Such fidelity bond shall also
protect and insure the Servicer against losses in connection with the release
or satisfaction of a Mortgage Loan without having obtained payment in full of
the indebtedness secured thereby. No provision of this Section 3.11 requiring
such fidelity bond and errors and omissions insurance shall diminish or relieve
the Servicer from its duties and obligations as set forth in this Agreement.
The minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by FHLMC in the FHLMC Sellers' &
Servicers' Guide, as amended or restated from time to time. Upon the request of
the Owner, the Servicer shall cause to be delivered to the Owner a certified
true copy of such fidelity bond and insurance policy.
SECTION 3.12. TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
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 the Servicer, as nominee for the Owner. The
Servicer agrees to take such actions as shall be necessary to hold the
Mortgaged Property in such capacity.
The Servicer shall manage, conserve, protect and operate each REO
Property solely for the purpose of its prompt disposition and sale. The
Servicer shall either itself or through an agent selected by the Servicer,
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Servicer shall attempt to sell the same on
such terms and conditions as the Servicer deems to be in the best interest of
the Owner.
The Servicer shall cause to be deposited within two (2) Business Days
of receipt in the Custodial Account all revenues received with respect to the
conservation and disposition of each REO Property and shall be permitted to
retain from such revenues funds necessary for the proper operation, management
and maintenance of the REO Property, including the cost of maintaining any
hazard insurance pursuant to Section 3.10 hereof and the fees of any managing
agent acting on behalf of the Servicer. Any disbursement related to the
preservation or restoration of a Mortgaged Property in excess of $1,000 shall
be made only with the written approval of the Owner.
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The Servicer shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within one year
after title has been taken to such REO Property, unless the Servicer determines,
and gives an appropriate notice to the Owner, that a longer period is necessary
for the orderly liquidation of such REO Property. If a period longer than one
year is permitted under this Agreement and is necessary to sell any REO
Property, (i) the Servicer shall report monthly to the Owner as to the progress
being made in selling such REO Property and (ii) if, within the written consent
of the Owner, a purchase money mortgage is taken in connection with such sale,
such purchase money mortgage shall name the Servicer as mortgagee, and a
participation agreement among the Servicer and the Owner shall be entered into
with respect to such purchase money mortgage.
The disposition of REO Property shall be earned out by the Servicer only
with the prior written consent of the Owner (which consent shall not be
unreasonably withheld or delayed) and shall be made at such price, and upon such
terms and conditions, as the Servicer deems to be in the best interest of the
Owner. Notwithstanding the foregoing, in the event the sales price of an REO
Property is at least to 90% of the list price for such property the Owner's
prior written consent shall not be required. The proceeds of sale of the REO
Property shall be promptly deposited in the Custodial Account as soon as
practical thereafter and after the expenses of such sale have been paid.
Upon request, with respect to any REO Property, the Servicer shall furnish
to the Owner a statement covering the Servicer's efforts in connection with
the sale of that REO Property and any rental of the REO Property incidental to
the sale thereof for the previous month (together with an operating statement).
That statement shall be accompanied by such other information as the Owner
shall reasonably request.
SECTION 3.13 LIQUIDATION REPORTS.
The Servicer shall submit to the Owner monthly, at the time of the
remittance report required pursuant to Section 4.02, a liquidation report with
respect to each Mortgaged Property sold in a foreclosure sale and not previously
reported.
SECTION 3.14. POSSESSION OF MORTGAGE FILES BY SERVICER.
From time to time in connection with the servicing of the Mortgage Loans
hereunder, the Servicer may take possession of all or a portion of the
documents relating to the Mortgage Loans as may be held by the Owner or the
Custodian. Such documents shall be held in trust by the Servicer for the
benefit of the Owner as the owner thereof and the Servicer's possession of such
document or documents is at the will of the Owner for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Servicer is in a custodial capacity only.
SECTION 3.15. SUPERIOR LIENS.
With respect to each Mortgage Loan which is secured by a second lien on the
related Mortgaged Property, the Servicer shall, for the protection of the
Owner's interest, file (or cause to be filed) of record a request for notice of
any action by a superior lienholder where permitted by local law and whenever
applicable state law does not require that a junior lienholder be named as a
party defendant in foreclosure proceedings in order to foreclose such junior
lienholder's equity of redemption. The Servicer shall also notify any superior
lienholder in
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writing of the existence of the Mortgage Loan and request notification of any
action (as described below) to be taken against the Mortgagor or the Mortgaged
Property by the superior lienholder.
If the Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by the superior
lien, or has declared or intends to declare a default under the superior
mortgage or the promissory note secured thereby, or has filed or intends to
file an election to have the Mortgaged Property sold or foreclosed, the
Servicer shall take such actions as are consistent with Customary Servicing
Procedures to protect the interests of the Owner, and/or to preserve the
security of the related Mortgage Loan. The Servicer shall make a Servicing
Advance of the funds necessary to cure the default or reinstate the superior
lien, if the Servicer determines that such Servicing Advance would maximize the
net recovery to the Owner and would not be a Nonrecoverable Advance. The
Servicer shall thereafter take such action as is necessary to recover the
amount so advanced.
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ARTICLE IV
PAYMENTS TO THE OWNER
SECTION 4.01. DISTRIBUTIONS.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the account designated in writing by Owner (a)
all amounts on deposit in 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 3.05), together with any additional
interest required to be deposited in the Custodial Account in connection with
Principal Payments in Full in accordance with Section 3.04(b)(vii), plus (b) all
amounts, if any, which the Servicer is obligated to distribute pursuant to
Section 4.03, minus (c) any amounts attributable to Principal Prepayments
received after the last day of the calendar month preceding the month of the
Remittance Date, which amounts shall be remitted on the following Remittance
Date, and minus (d) any amounts attributable to Monthly Payments collected but
due on a Due Date or Dates subsequent to the Due Period ending on the first day
of the month of the Remittance Date, which amounts shall be remitted on the
Remittance Date next succeeding the Due Period for such amounts.
With respect to any remittance received by the Owner after the Business
Day on which such payment was due, the Servicer shall pay to the Owner interest
on any such late payment at an annual rate equal to the rate of interest as is
publicly announced from time to time as its principal office by Chemical Bank,
New York, New York, as its prime lending rate, adjusted as of the date of each
change, plus three percentage points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall be paid by the Servicer
to the Owner on the date such late payment is made and shall cover the period
commencing with the Business Day on which such payment was due and ending with
the Business Day prior to which such payment is made, both inclusive. The
payment by the Servicer of any such interest shall not be deemed an extension
of time for payment or a waiver of any Event of Default by the Servicer.
SECTION 4.02. STATEMENTS TO THE OWNER.
By the tenth (10th) day of each month, or if such day is not a Business
Day, the immediately succeeding Business Day, the Servicer will furnish to the
Owner via its bulletin board system and by hard copy a statement setting forth
the following:
(i) the portion of the remittance that represents principal of the
Mortgage Loans, separately identifying (A) monthly amortization, (B) any
Principal Prepayments (other than any Principal Prepayment in Full) and
(C) any Principal Prepayments in Full;
(ii) the portion of the remittance that represents interest on the
Mortgage Loans;
(iii) the aggregate unpaid principal balance of the Mortgage Loans at
the close of business on the related Accounting Cut-off Date;
(iv) the portion of the remittance that represents Advances;
(v) the number of loans and unpaid principal balance of each Mortgage
Loan (a) delinquent one month, (b) delinquent two months, (c) delinquent
three or more months, or (d) as to which
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foreclosure proceedings have been commenced or which has become an REO
Property, together with reports of Exhibits H, I, J, K and L with respect
to each such loan or property, as of the last day of the immediately
preceding calendar month along with copies of all problem inspection
reports; and
(vi) the trial balance reconciling the actual and scheduled balances
of such Mortgage Loans.
In addition to the foregoing, upon request of the Owner at any time,
the Servicer shall prepare and deliver to the Owner a "trial balance" report
showing information as reasonably requested with respect to such Mortgage Loan
that is available on information systems maintained by the Servicer.
The Servicer shall prepare and file any and all reports required by
the Internal Revenue Service (the "IRS") covering Mortgagor interest payments
collected by the Servicer and any other reports incident to actions taken in
servicing the Mortgage Loans in accordance with IRS requirements.
SECTION 4.03. ADVANCES BY THE SERVICER.
On each Remittance Date, the Servicer shall deposit in the Custodial
Account an amount equal to all Monthly Payments (with interest adjusted to the
Mortgage Loan Remittance Rate) which were due on the Mortgage Loans during the
applicable Due Period and which were delinquent at the close of business on the
immediately preceding Determination Date, provided that, such obligation shall
cease with respect to any Mortgage Loan if the Servicer determines that such
advances would be Nonrecoverable Advances. The Servicer's obligation to make
such Advances as to any Mortgage Loan will continue through the last Monthly
Payment due prior to the payment in full of the Mortgage Loan, or through the
last Remittance Date prior to the Remittance Date for the distribution of all
Liquidation Proceeds and other payments or recoveries (including proceeds under
any title, hazard or other insurance policy, or condemnation awards) with
respect to the Mortgage Loan, provided, however, that such obligation shall
cease if title to the Mortgaged Property is acquired in foreclosure or by deed
in lieu of foreclosure.
The Servicer shall either (i) deposit in the Custodial Account from
its own funds an amount equal to the aggregate amount of such Advances, if any,
(ii) cause to be made an appropriate entry in the records of the Custodial
Account that amounts held for future distribution have been used by the
Servicer in discharge of any such Advance or (ii) make Advances in the form of
any combination of (i) or (ii) aggregating the total amount of Advances to be
made. Any amounts held for future distribution and so used shall be replaced by
the Servicer by deposit in the Custodial Account on or before any future
Remittance Date if funds in the Custodial Account on such Remittance Date shall
be less than payments to the Owner required to be made on the related Remittance
Date.
SECTION 4.04. ADDITIONAL REPORTS TO THE OWNER.
On the second (2nd) and sixteenth (16th) days of each month or if
such days are not Business Days, the next succeeding Business Day, the Servicer
shall furnish to the Owner via its bulletin board system a "master loan tape"
report showing, among other things, the actual balance of each Mortgage Loan
prepared as of the close of business on the last Business Day of the preceding
month and the close of business on the 15th day of such month, respectively.
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ARTICLE V
GENERAL SERVICING PROCEDURES
SECTION 5.01. ASSUMPTION AGREEMENTS.
The Servicer will use its best efforts, subject to requirements of
applicable law, to enforce any "due-on-sale" provision contained in any
Mortgage or Mortgage Note and to deny assumption by the person to whom the
Mortgaged Property has been or is about to be sold whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
liable on the Mortgage and Mortgage Note. When the Mortgaged Property has been
conveyed to the Mortgagor, the Servicer will, to the extent is has knowledge of
such conveyance, exercise its rights to accelerate the maturity of such
Mortgage Loan under the "due-on-sale" clause applicable thereto, provided,
however, the Servicer will not exercise such rights if prohibited by law from
doing so or if the exercise of such rights would impair or threaten to impair
any recovery under the related primary insurance policy, if any. If an
assumption fee is collected by the Servicer for entering into an assumption
agreement, such fee will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, the outstanding principal
amount, the Monthly Payment and the Mortgage Interest Rate of the related
Mortgage Note shall not be changed, and the term of the Mortgage Loan will not
be increased or decreased. If an assumption is allowed pursuant to this Section
5.01, the Servicer with the prior consent of the private mortgage guaranty
insurer, if applicable, is authorized to enter into a substitution of liability
agreement with the purchaser of the Mortgaged Property pursuant to which the
original Mortgagor is released from liability and the purchaser of the
Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note.
SECTION 5.02. SATISFACTION OF MORTGAGES AND RELEASE OF MORTGAGE
FILES.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will obtain the portion of the
Mortgage File that is in the possession of the Custodian and prepare and
process any required satisfaction or release of the Mortgage. The cost of
recording such satisfaction or release shall be reimbursable by the Owner.
In the event the Servicer grants a satisfaction or release of a
Mortgage without either having obtained payment in full of the indebtedness
secured by the Mortgage or the Owner's prior written approval, or should the
Servicer otherwise prejudice any right the Owner may have under the mortgage
instruments, the Servicer, upon written demand of the Owner, shall remit to the
Owner the Stated Principal Balance of the related Mortgage Loan together with
accrued and unpaid interest thereon at the Mortgage Loan Remittance Rate up to
the date of such remittance by deposit thereof in the Custodial Account. The
Servicer shall maintain the Fidelity Bond as provided for in Section 4.11
insuring the Servicer against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
SECTION 5.03. SERVICING COMPENSATION.
As compensation for its services hereunder, the Servicer shall be
entitled to retain from interest payments on the Mortgage Loans the applicable
Servicing Fee. Additional servicing compensation in the form of assumption
fees, prepayment charges or late payment charges and other incidental fees or
charges shall be
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retained by the Servicer. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement therefor except as specifically provided for
herein.
SECTION 5.04. ANNUAL STATEMENT AS TO COMPLIANCE
The Servicer will deliver to the Owner, on or before March 15 of
each year beginning March 15, 1996, an Officers' Certificate stating that (i)
the Servicer has fully complied with the provisions of Article III, (ii) a
review of the activities of the Servicer during the preceding calendar year and
of performance under this Agreement has been made under such officer's
supervision, and (iii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof and the action being taken by the Servicer to cure
such default.
SECTION 5.05. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT
On or before March 15 of each year beginning March 15, 1996, the
Servicer at its expense shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Owner to the effect that such firm has, with respect
to the Servicer's overall servicing operations (i) performed applicable tests
in accordance with the compliance testing procedures as set forth in Appendix 3
of the Audit Guide for Audits of HUD Approved Nonsupervised Mortgagees or (ii)
examined such operations in accordance with the requirements of the Uniform
Single Audit Program for Mortgage Bankers, and in either case stating such
firm's conclusions relating thereto.
SECTION 5.06. OWNER'S RIGHT TO EXAMINE SERVICER RECORDS
The Owner shall have the right, at all reasonable times and as often
as reasonably required to examine and audit any and all of the books, records
or other information of the Servicer whether held by the Servicer or by another
on behalf of the Servicer, which may be relevant to the performance or
observance by the Servicer of the terms, covenants or conditions of this
Agreement. Any out-of-pocket expenses incurred by the Servicer in connection
with such audits shall be paid by the Owner.
SECTION 5.07. POSSESSION OF SERVICING FILES
The ownership of each Mortgage Note, each Mortgage and the contents
of each related Servicing File is hereby absolutely vested in the Owner and the
ownership of all records and documents pertaining to each Mortgage Loan
prepared by or which come into the possession of the Servicer shall immediately
vest in the Owner.
The portion of each Servicing File held by the Servicer in accordance
with the provisions of this Agreement are and shall be held, in original or
legible microfiche form, in trust by the Servicer for the benefit of the Owner.
The Servicer's possession of such documents and any other Mortgage File
documents which may come into the Servicer's possession shall be at the will of
the Owner for the sole purpose of servicing the related Mortgage Loan and such
possession by the Servicer shall be in a custodial capacity only.
The Servicing File and the portion of each Mortgage File held by the
Servicer shall be appropriately marked to clearly reflect the Owner's interest
in the related Mortgage Loan.
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The Servicer shall release its custody of any Mortgage File documents
only in accordance with written instructions from the Owner, provided, however,
that if such release is required as incidental to the Servicer's servicing of a
Mortgage Loan, written instructions shall not be required as a condition to
such release.
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ARTICLE VI
REPORTS TO BE PREPARED BY SERVICER
SECTION 6.01. SERVICER SHALL PROVIDE ACCESS AND INFORMATION AS
REASONABLY REQUIRED.
The Servicer shall provide to the Owner and its agents, accountants or
designees, access to any documentation regarding the Mortgage Loans without
charge, but only upon advance notice and reasonable request, during normal
business hours and at the offices of the Servicer.
In addition,, the Servicer shall furnish to the Owner, upon advance
notice and reasonable request, during the term of this Agreement such periodic,
special or other reports or information, whether or not provided for herein, as
shall be necessary, reasonable or appropriate with respect to the purposes of
this Agreement. All such reports or information shall be provided by and in
accordance with all reasonable instructions and directions the Owner may
require. Any out-of-pocket expenses incurred by the Servicer in connection with
furnishing information not generally furnished by the Servicer in its normal
course of business as servicer shall be paid by the Owner. The Servicer agrees
to execute and deliver all such instruments and take all such action as the
Owner, from time to time, may reasonably request in order to effectuate the
purposes and to carry out the terms of this Agreement.
SECTION 6.02. FINANCIAL STATEMENTS.
The Servicer understands that, in connection with marketing the Mortgage
Loans, the Owner may make available to any prospective owner a Consolidated
Statement of Operations of the Servicer 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 fiscal years
covered by such Consolidated Statement of Operations. The Servicer will also
make available any comparable interim statements to the extent any such
statements have been prepared. The Servicer, if it has not already done so,
agrees to promptly furnish to Owner copies of the statements specified above.
The Servicer also agrees to make available, upon advance notice and
reasonable request, to any prospective owner a knowledgeable financial or
accounting officer for the purpose of answering questions respecting recent
developments affecting the Servicer and to permit any prospective owner to
inspect the Servicer's servicing facilities for the purpose of satisfying such
prospective owner that the Servicer has the ability to service the Mortgage
Loans in accordance with this Agreement and any applicable Reconstitution
Agreement.
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ARTICLE VII
THE SERVICER
SECTION 7.01. INDEMNIFICATION; THIRD PARTY CLAIMS.
The Servicer agrees to indemnify and hold harmless the Owner against any
and all claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Owner may
sustain in any way related to the failure of the Servicer to perform its duties
and service the Mortgage Loans in strict compliance with the terms of this
Agreement. The Servicer shall immediately notify the Owner if a claim is made by
a third party with respect to this Agreement or the Mortgage Loans, and the
Servicer shall assume (with the consent of the Owner) the defense of any such
claim and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer or the Owner in respect of such claim. The Owner shall
promptly reimburse the Servicer for all amounts advanced by it pursuant to the
preceding sentence except when the claim is directly caused by the Servicer's
the failure to service and administer the Mortgage Loans in strict compliance
with the terms of this Agreement.
SECTION 7.02. MERGER OR CONSOLIDATION OF THE SERVICER.
The Servicer will keep in full effect its existence, rights and
franchises, as a corporation, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to substantially all of the
business of the Servicer (whether or not related to loan servicing), shall be
the successor of the Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that the successor or
surviving Person shall be an institution (i) having a GAAP net worth of not less
than $15,000,000, (ii) the deposits of which are insured by the FDIC or which
is a HUD-approved mortgagee whose primary business is in origination and
servicing of first mortgage loans and (ii) who is a FNMA or FHLMC approved
seller/servicer in good standing.
SECTION 7.03. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
Neither the Servicer nor any of the officers, employees or agents of the
Servicer shall be under any liability to the Owner for any action taken or for
refraining from the taking of any action in good faith in connection with the
servicing of the Mortgage Loans pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Servicer
or any such person against any breach of warranties or representations made
herein, or failure to perform its obligations in strict compliance with any
standard of care set forth in this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of this
Agreement. The Servicer and any officer, employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duty, to service the Mortgage Loans in
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accordance with this Agreement and which in its opinion may involve it in any
expenses or liability; provided, however, that the Servicer may, with the
consent of the Owner, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities for which
the Servicer shall be entitled to reimbursement therefor from the proceeds of
the Custodial Account, except when such expenses, costs and liabilities are
subject to the Servicer's indemnification hereunder.
SECTION 7.04. SERVICER NOT TO RESIGN.
The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer and the Owner or upon the determination that the Services duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Servicer. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Owner, which Opinion of Counsel shall be in form and
substance acceptable to the Owner. No such resignation shall become effective
until a successor has assumed the Servicer's responsibilities and obligations
hereunder in accordance with Section 10.01 or, if no successor has been
appointed within ninety (90) days, then on the 90th day following the date of
the Servicer's resignation notice.
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ARTICLE VIII
DEFAULT
SECTION 8.01. EVENTS OF DEFAULT.
In case one or more of the following Events of Default by the Servicer
shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit to the Owner any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of two (2) Business Days after the date upon which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner; or
(ii) failure by the Servicer to duly observe or perform, in any material
respect, any other covenants, obligations or agreements of the Servicer as set
forth in this Agreement or in the Custodial Agreement which failure continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force, undischarged or unstayed for a period of 60 days;
or
(iv) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer or
relating to all or substantially all of the Servicer's property; or
(v) the Servicer shall admit in writing its inability to pay its debts
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;
then, and in each and every such case, so long as an Event of Default
shall not have been remedied, the Owner, by notice in writing to the Servicer,
may, in addition to whatever rights the Owner may have at law or equity to
damages, including injunctive relief and specific performance, commence
termination of all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof with respect
to the Owner. Upon receipt by the Servicer of a second written notice from the
Owner stating that it intends to terminate the Servicer as a result of such
Event of Default, all authority and power of the Servicer under this Agreement,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the successor appointed pursuant to Section 10.01. Upon written
request from the Owner, the Servicer shall prepare, execute and deliver to a
successor any and all documents and other instruments, place in such successor's
possession all Servicing Files, together with any other Mortgage File documents
in the Servicer's possession, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including, but not limited to, the transfer and endorsement or
assignment of the Mortgage Loans and related documents to the successor at the
Servicer's sole expense. The Servicer agrees to cooperate with the 0wner and
such successor in effecting the termination of the Servicer's responsibilities
and
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rights hereunder with respect to the Owner, including, without limitation, the
transfer of such successor for administration by it of all amounts which shall
at the time be credited by the Servicer to the Custodial Account or Escrow
Account or thereafter received with respect to the Mortgage Loans.
SECTION 8.02 WAIVER OF DEFAULTS.
The Owner may waive any default by the Servicer in the performance of
its obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto except to the extent expressly so waived.
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ARTICLE IX
TERMINATION
SECTION 9.01. TERMINATION.
This Agreement shall terminate upon either: (i) the later of the
distribution to the Owner of final payment or liquidation with respect to the
last Mortgage Loan (or advances of same by the Servicer), or the disposition of
all property acquired upon foreclosure or deed in lieu of foreclosure with
respect to the last Mortgage Loan and the remittance of all funds due
hereunder, or (ii) mutual consent of the Servicer and the Owner in writing.
SECTION 9.02. TERMINATION WITHOUT CAUSE.
The Owner may, at its sole option, terminate any rights the Servicer
may have hereunder without cause, upon 30 days written notice. Any such notice
of termination shall be in writing and delivered to the Servicer by registered
mail as provided in Section 10.09 of this Agreement. In connection with any
termination pursuant to this Section 9.02, the Servicer will cooperate with the
Owner in transferring the servicing of the related Mortgage Loans.
SECTION 9.03. TERMINATION WITH CAUSE.
The Owner may terminate any rights the Servicer may have hereunder
with cause at any time. In connection with any termination pursuant to this
Section 9.03, the Servicer will cooperate with the Owner in transferring
servicing.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. SUCCESSOR TO THE SERVICER.
Prior to termination of Servicer's responsibilities and duties under
this Agreement pursuant to Section 7.04, 8.01, 9.01(ii), 9.02 or 9.03, the
party designated by the Owner shall (i) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer
under this Agreement prior to the termination of Servicer's responsibilities,
duties and liabilities under this Agreement. In connection with such
appointment and assumption, the party so designated may make such arrangements
for the compensation of such successor out of payments on Mortgage Loans as it
and such successor shall agree; provided, however, that no such compensation
shall be in excess of that permitted the Servicer under this Agreement without
the consent of the Owner. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned Sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date hereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned Sections shall not become
effective until a successor shall be appointed pursuant to this Section or, if
no successor has been appointed within ninety (90) days, then on the 90th day
following the date of the Servicer's resignation or removal notice, and shall in
no event relieve the Servicer of the representations and warranties made
pursuant to Article II.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Servicer and to the Owner an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party
to this Agreement. Any termination or resignation of the Servicer or this
Agreement pursuant to Section 7.04, 8.01, 9.01, 9.02 or 9.03 shall not affect
any claims that the Owner may have against the Servicer arising prior to any
such termination or resignation.
The Servicer shall promptly deliver to the successor the funds in the
Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Servicer shall account
for all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
SECTION 10.02. AMENDMENT.
This Agreement may be amended from time to time by the Servicer and
the Owner by written agreement signed by the Servicer and the Owner.
SECTION 10.03. RECORDATION OF AGREEMENT.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which
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any or all of the properties subject to the Mortgages are situated, and in any
other appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the Owner's expense, but only when such direction
is accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the Owner or is necessary
for the administration or servicing of the Mortgage Loans.
SECTION 10.04. DURATION OF AGREEMENT.
This Agreement shall continue in existence and effect until
terminated as herein provided.
SECTION 10.05. GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of the
State of New York, except to the extent preempted by Federal law, and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
SECTION 10.06. GENERAL INTERPRETIVE PRINCIPLES.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 10.07. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar
39
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process. The parties agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 10.08. NOTICES.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or
mailed by registered mail, postage prepaid, to (a) in the case of the
Servicer, _______________________ Attention ___________________, or such other
address as may hereafter be furnished to the Owner in writing by the Servicer,
and (b) in the case of the Owner, Nomura Asset Capital Corporation, Two World
Xxxxxxxxx Xxxxxx, Xxxxxxxx X, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention:
Xxxxxxx Xxxxxxxxx, or such other address as may hereafter be furnished to the
Servicer in writing by the Owner.
SECTION 10.09. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate in
good-faith to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
SECTION 10.10. NO PARTNERSHIP.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent
for the Owner.
SECTION 10.11. EXECUTION; SUCCESSORS AND ASSIGNS.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 7.04, this Agreement
shall inure to the benefit of and be binding upon the Servicer and the Owner
and their respective successors and assigns. The Owner shall have the right,
without the Servicer's consent, to assign (in whole or in part), its interests
under this Agreement with respect to the Mortgage Loans, or to designate in
writing any one Person to exercise any rights of the Owner hereunder. Any
assignee or designee of the Owner shall accede to the Owner's rights and
obligations hereunder to the extent of such assignment or designation. All
references to the Owner shall, with respect to the Mortgage Loans, be deemed to
include its assignees or designee.
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SECTION 10.12. RECONSTITUTION AGREEMENTS
Upon the transfer, assignment or other conveyance of any of the
Mortgage Loans (any Mortgage Loan so transferred, assigned, pledged or
otherwise conveyed, a "Transferred Mortgage Loan") by the Owner to a third
party, the Servicer shall, at the request of the Owner and any such third
party (the "Transferee"), execute a Reconstitution Agreement, provided that
such Reconstitution Agreement shall be mutually satisfactory in form and
substance to the Owner, the Transferee and the Servicer in their respective
sole discretion and shall be agreed upon prior to the date of transfer. For all
purposes hereof, a "Reconstitution Agreement" shall be any agreement providing
for the servicing of a Transferred Mortgage Loan entered into between the
Servicer and the Transferee, including, without limitation, any pooling and
servicing agreement, participation and servicing agreement, seller's warranties
and servicing agreement or trust agreement. The Owner and third parties in
addition to the Transferee may also be party to a Reconstitution Agreement.
Upon entering into any Reconstitution Agreement, all of the Servicer's rights
and obligations hereunder with respect to the Transferred Mortgage Loans
subject to such Reconstitution Agreement shall be deemed terminated in
accordance with the provisions of Section 9.02.
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IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
---------------------------------------,
Servicer
By:
Name:
Title:
NOMURA ASSET CAPITAL CORPORATION
Owner
By:
Name:
Title:
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STATE OF )
) SS.
COUNTY OF )
On the ____ day of ______________, 1995 before me, a Notary Public in and
for said State, personally appeared ___________________________ known to me to
be ____________________ of _____________________, one of the corporations that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my official seal
the day and year in this certificate first above written.
____________________________________
Notary Public
My Commission expires ______________
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STATE OF )
) SS.
COUNTY OF )
On the ____ day of ______________, 1995 before me, a Notary Public in
and for said State, personally appeared _____________________ known to me to be
_____________________ of _____________________, one of the corporations that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my official
seal the day and year in this certificate first above written.
_________________________________
Notary Public
My Commission expires ___________
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EXHIBIT A
CONTENTS OF MORTGAGE LOAN FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items:
The original Mortgage Note, together with any riders thereto, bearing
all intervening endorsements, endorsed "Pay to the order of [__________],
without recourse" and signed in the name of the Seller by an authorized officer.
The original Assignment of Mortgage for each Mortgage Loan [in blank].
The original of any guarantee executed in connection with the
Mortgage Note.
The original Mortgage, together with any riders thereto, with
evidence of recording thereon. If in connection with any Mortgage Loan, the
Seller has not caused the original recorded Mortgage to be delivered to the
Custodian because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has been
lost or because such public recording office retains the original recorded
Mortgage, the Mortgage File shall consist of a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording office,
an Officer's Certificate of either the Seller or the title insurer insuring the
Mortgage stating that such Mortgage has been delivered to the appropriate
public recording office for recordation and that the original recorded Mortgage
or a copy of such Mortgage certified by such public recording office to be a
true and complete copy of the original recorded Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Seller; or (ii) in the
case of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after recordation in
a public recording office, a copy of such Mortgage with the recording
information thereon certified by such public recording office to be a true and
complete copy of the original recorded Mortgage.
The originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if any, or if such
agreement has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
agreement, the Mortgage File shall include a photocopy of such agreement,
together with (i) in the case of a delay caused by the public recording office,
an Officer's Certificate of either the Seller or the title insurer insuring the
Mortgage stating that such agreement has been delivered to the appropriate
public recording office for recordation and that such original recorded
agreement or a copy of such agreement certified by the appropriate public
recording office to be a true and complete copy of the original recorded
agreement will be promptly delivered to the Custodian upon receipt thereof by
the Seller; or (ii) in the case of an agreement where a public recording office
retains the original recorded agreement or in the case where an agreement is
lost after recordation in a public recording office, a copy of such agreement
with recording information thereon certified by such public recording office to
be a true and complete copy of the original recorded document.
The originals of all intervening assignments of mortgage with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been
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lost or if such public recording office retains the original recorded
assignments of mortgage, the Mortgage File shall include a photocopy of such
intervening assignment, together with (i) in the case of a delay caused by the
public recording office, an Officer's Certificate of either the Seller or the
title insurer insuring the Mortgage stating that such intervening assignment of
mortgage has been delivered to the appropriate public recording office for
recordation and that such original recorded intervening assignment of mortgage
or a copy of such intervening assignment of mortgage certified by the
appropriate public recording office to be a true and complete copy of the
original recorded intervening assignment of mortgage will be promptly delivered
to the Custodian upon receipt thereof by the Seller; or (ii) in the case of an
intervening assignment where a public recording office retains the original
recorded intervening assignment or in the case where an intervening assignment
is lost after recordation in a public recording office, a copy of such
intervening assignment with recording information thereon certified by such
public recording office to be a true and complete copy of the original recorded
intervening assignment.
The original or a certified copy of the mortgage title insurance
policy or preliminary title insurance policy.
The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage.
The original power of attorney, if applicable, with evidence of
recording thereon or if such power of attorney has not been returned from the
applicable recording office or has been lost or if such public recording office
retains the original recorded power of attorney, the Mortgage File shall
include a photocopy of such power of attorney, together with (i) in the case of
a delay caused by the public recording office, an Officer's Certificate of
either the Seller or the title insurer insuring the Mortgage stating that such
power of attorney has been delivered to the appropriate public recording office
for recordation and that such original recorded power of attorney or a copy of
such power of attorney certified by the appropriate public recording office to
be a true and complete copy of the original recorded power of attorney will be
promptly delivered to the Custodian upon receipt thereof by the Seller; or (ii)
in the case of a power of attorney where a public recording office retains the
original recorded power of attorney or in the case where a power of attorney is
lost after recordation in a public recording office, a copy of such power of
attorney with recording information thereon certified by such public recording
office to be a true and complete copy of the original recorded power of
attorney.
Mortgage Loan Package Cover Sheet.
Rescission Notice (if applicable).
Borrower disclosure - i.e.
a) Variable Rate Mortgage Loan Disclosure Statement
b) Reg Z Truth-in-Lending Disclosure Statement
c) RESPA Notice of Potential Servicing Transfer
d) RESPA Good Faith Estimate
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e) Broker Agreement (if applicable)
HUD - 1 (RESPA).
Itemization of origination fees financed (if applicable).
Notice as to Requirements of Impounds/Escrow for Taxes and Insurance.
Hazard insurance and records of premiums paid.
Flood Certification.
Flood insurance (if applicable) and records of premiums paid.
Primary mortgage insurance (if applicable).
Optional Insurance.
Tax Service Contract Statement.
Customer authorization for re-verification.
IRS 4506 or IRS 8821 (if applicable); after December 10, 1994, the
new version of IRS Form 4506 must be included in this sequence in place of
these forms.
The original goodbye letter.
The loss payee change notices for Hazard and Flood.
PMI Transfer Notice (if applicable).
Notice of Tax Service Contract Transfer.
Payment transaction histories (if applicable).
Residential loan application (Form 1003).
Credit report.
Credit explanations.
Title search.
Appraisal plus original photos of subject and comparables.
Survey of the Mortgage Property or reference to a record plat.
If available, termite report, structural engineer's report, water.
potability and septic certification.
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VOE(s).
Most recent paystub (wage earner).
2 years IRS Form W2's (wage earner).
2 years IRS Form 1040's, 1120's, 1120S's, 1065's, etc. and
appropriate schedules (for self employed).
Year-to-date income statement.
VOM(s) or other form of verification(s) on all mortgages.
Copy of first mortgage note and security instrument (if applicable).
Verification of original purchase price or real estate sales contract
or HUD-1 on first mortgage (if applicable).
VOD(s) or source of funds to close.
All other processing, underwriting and closing papers which are
customarily contained in a mortgage loan file and which are required to
document the Mortgage Loan or service the Mortgage Loan.
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EXHIBIT B
CUSTODIAL ACCOUNT CERTIFICATION
________ __, 1995
__________________ (the "Servicer"), hereby certifies that it has
established the account described below as a Custodial Account pursuant to
Section 3.04 of the Servicing Agreement, dated as of ____________ 1, 1995,
Fixed Rate and Adjustable Rate Residential Mortgage Loans.
Title of Account: "____________, in trust for Nomura Asset Capital
Corporation pursuant to a Servicing Agreement dated as
of ____________ 1, 1995."
Account Number: _________________________
Address of office or
branch of the Servicer
at which Account is
maintained: _________________________
_________________________
_________________________
By_______________________
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EXHIBIT C
CUSTODIAL ACCOUNT LETTER AGREEMENT
(date)
To: _________________________________
_________________________________
_________________________________
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of
____________ 1, 1995 (the "Agreement"), we hereby authorize and request you to
establish an account, as a Custodial Account pursuant to Section 3.04 of the
Agreement, to be designated as "_____________________, in trust for Nomura
Asset Capital Corporation pursuant to a Servicing Agreement dated as of
_________ 1, 1995". All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. This letter is submitted
to you in duplicate. Please execute and return one original to us.
_________________________
By_______________________
The undersigned, as "Depository", hereby certifies that the above
described account has been established under Account Number ________________, at
the office of the depository indicated above, and agrees to honor withdrawals
on such account as provided above. The amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation to the
maximum extent permitted under applicable law.
_________________________
(name of Depository)
By_______________________
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EXHIBIT D
ESCROW ACCOUNT CERTIFICATION
________ __, 1995
__________________ (the "Servicer"), hereby certifies that it has
established the account described below as an Escrow Account pursuant to
Section 3.06 of the Servicing Agreement, dated as of ____________ 1, 1995,
Fixed Rate and Adjustable Rate Residential Mortgage Loans.
Title of Account: "____________, in trust for various Mortgagors, Taxes
and Insurance Escrow Funds."
Account Number: _________________________
Address of office or
branch of the Servicer
at which Account is
maintained: _________________________
_________________________
_________________________
By_______________________
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EXHIBIT E
ESCROW ACCOUNT LETTER AGREEMENT
(date)
To: _________________________________
_________________________________
_________________________________
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of ____________
1, 1995 (the "Agreement"), we hereby authorize and request you to establish an
account, as an Escrow Account pursuant to Section 3.06 of the Agreement, to be
designated as "_____________________, in trust for various Mortgagors, Taxes and
Insurance Escrow Funds." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. This letter is submitted
to you in duplicate. Please execute and return one original to us.
_________________________
By_______________________
The undersigned, as "Depository", hereby certifies that the above
described account has been established under Account Number ________________, at
the office of the depository indicated above, and agrees to honor withdrawals
on such account as provided above. The amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation to the
maximum extent permitted under applicable law.
_________________________
(name of Depository)
By_______________________
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EXHIBIT F
CUSTODIAL AGREEMENT
53
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EXHIBIT G
MORTGAGE LOAN SCHEDULE
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EXHIBIT H
FORM OF DELINQUENCY REPORT (LOAN-BY-LOAN)
55
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EXHIBIT I
FORM OF DELINQUENCY REPORT (AGGREGATE)
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EXHIBIT J
FORM OF STATUS DETAIL REPORT
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EXHIBIT K
FORM OF FORECLOSURE LOG
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EXHIBIT L
FORM OF FINANCIAL REPORT
59
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT N
PAGE N-1
AUGUST 1, 1995
FORM OF CONFIRMATION
--------------------------------------------------------------------------------
[DATE]
[SELLER
ADDRESS]
Re: Nomura Asset Capital Corporation
Commitment Number:_______
Dear Sir:
On the above referenced date you entered a Commitment to sell
Mortgage Loans to Nomura Asset Capital Corporation ("Nomura") as follows:
Mortgage Loan Program *Various
---------------
Principal Balance $
--------------
Base Rates
A As per attached %
---------------------
A- %
---------------------
B %
---------------------
C %
---------------------
D %
---------------------
Stated Purchase Price %
---------------------
Funding Date
---------------------
(delivery 5 business days prior)
Servicing Retained Released
------ ------
The terms of this Commitment are governed by the
Purchasing/Servicing Agreement in effect between you and Nomura. The Purchase
Price of the Mortgage Loans delivered by you under this Commitment shall be
calculated based on the above Base Rates, Stated Purchase Prices and the buy-up
and buy-down ratios, Rate Adjustments and Price Adjustments attached to this
letter as Appendix A.
Please indicate your acceptance of the terms of this Commitment
by signing a copy of this letter in the space provided therefore and returning
the signed copy to Nomura.
NOMURA ASSET CAPITAL CORPORATION
By:
---------------------------
Name:
-------------------------
Title:
------------------------
AGREED AND ACCEPTED:
[SELLER NAME]
By:
--------------------------
Name:
------------------------
Title:
-----------------------
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CUSTODIAL AGREEMENT
by and among
NOMURA ASSET CAPITAL CORPORATION,
Purchaser
and
[________________________] Company
and
LASALLE NATIONAL BANK,
Custodian
Dated as of _____ 1, 1995
Fixed Rate and Adjustable Rate Mortgage Loans
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TABLE OF CONTENTS
Page
----
SECTION 1. Definitions 1
SECTION 2. Delivery of Custodial Files 4
SECTION 3. Certification and Trust Receipt of Custodian 4
SECTION 4. Obligations of the Custodian 5
SECTION 5. Custodian to Cooperate 5
SECTION 6. Future Defects 5
SECTION 7. Release for Servicing 5
SECTION 8. Limitation on Release 6
SECTION 9. Release for Payment 6
SECTION 10. Fees of Custodian 6
SECTION 11. Removal of Custodian 6
SECTION 12. Transfer of Custodial Files Upon Termination 7
SECTION 13. Examination of Custodial Files 7
SECTION 14. Insurance of Custodian 7
SECTION 15. Counterparts 7
SECTION 16. Periodic Statements 7
SECTION 17. Governing Law 8
SECTION 18. Copies of Mortgage Documents 8
SECTION 19. No Adverse Interest of Custodian 8
SECTION 20. Termination by Custodian 8
SECTION 21. Term of Agreement 8
SECTION 22. Notices 8
SECTION 23. Successors and Assigns 9
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SECTION 24. Indemnification of Custodian 9
SECTION 25. Reliance of Custodian 9
SECTION 26. Transmission of Custodial Files 9
SECTION 27. Authorized Representatives 10
SECTION 28. Amendments: Entire Agreement 10
SECTION 29. Reproduction of Documents 10
SECTION 30. No Assignment or Delegation by Custodian 11
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EXHIBITS
--------
EXHIBIT 1 CONTENTS OF EACH CUSTODIAL FILE
EXHIBIT 2 FORM OF CERTIFICATION
EXHIBIT 3 FORM OF REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
EXHIBIT 4 AUTHORIZED REPRESENTATIVES OF COMPANY
EXHIBIT 5 AUTHORIZED REPRESENTATIVES OF CUSTODIAN
EXHIBIT 6 AUTHORIZED REPRESENTATIVES OF PURCHASER
EXHIBIT 7 FORM OF OPINION OF COUNSEL OF CUSTODIAN
EXHIBIT 8 FORM OF TRUST RECEIPT
EXHIBIT 9 SERVICING AGREEMENT
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THIS CUSTODIAL AGREEMENT, dated as of _____ 1, 1995, is by and among
Nomura Asset Capital Corporation, a Delaware corporation, having an address at
Two World Xxxxxxxxx Xxxxxx, Xxxxxxxx X, Xxx Xxxx, Xxx Xxxx 00000-0000 (the
"Purchaser"), ___________________ having an office at ________________________
(the "Company"), and LaSalle National Bank, a national banking association
chartered under the laws of the United States, having an address at 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 (the "Custodian");
W I T N E S S E T H
WHEREAS, the Purchaser has agreed to purchase certain mortgage loans
(each a "Mortgage Loan"), from time to time, as whole loans, from the Company
pursuant to its Non-Conforming Residential Mortgage Loan Conduit (the
"Conduit").
WHEREAS, the Company is to service the Mortgage Loans pursuant to the
terms and conditions of the Servicing Agreement, of even date herewith, between
the Purchaser and the Company (the "Servicing Agreement").
WHEREAS, the Custodian is a national banking association chartered
under the laws of the United States of America by the Comptroller of the
Currency, and is otherwise to act as Custodian pursuant to this Agreement. The
Purchaser desires to have the Custodian take possession from time to time of
the Mortgages and Mortgage Notes, along with certain other documents specified
herein, as the custodian of the Purchaser its successors and assigns, on
various delivery dates (each, a "Delivery Date"), in accordance with the terms
and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual undertakings herein
expressed, the parties hereto hereby agree as follows:
Section 1. Definitions.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Servicing Agreement, a copy of which is attached hereto
as Exhibit 9.
Agreement: This Custodial Agreement and all amendments and
attachments hereto and supplements hereof.
Assignment of Mortgage: An individual 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.
Authorized Representative: As defined in Section 27 hereof.
Business Day: Any day excluding Saturday, Sunday and any day on which
banks located in the State of ______________, ______________ or New York are
authorized or obligated by law or executive order to be closed.
Certification: A certification as to each Mortgaged Loan, which
certification is delivered to the Purchaser by the Custodian in the form
annexed hereto as Exhibit 2.
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Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Company from time to time shall sell to the
Purchaser, Mortgage Loans.
Company: ___________________________, or its successor in interest or
assigns, or any successor to the Company under the Servicing Agreement as
therein provided.
Custodian: LaSalle National Bank, or its successor in interest or
assigns, or any successor to the Custodian under this Agreement as herein
provided.
Custodial File: As to each Mortgage Loan, the mortgage loan
documents which are delivered to the Custodian on or prior to the related
Closing Date as specified on Exhibit 1 hereto.
Delivery Date: As to each Mortgage Loan, the date on which the
Custodial File related to a Mortgage Loan is delivered to the Custodian.
Mortgage: The mortgage, deed of trust or other instrument creating a
valid and enforceable first or second lien on the Mortgage Property securing
the Mortgage Note.
Mortgage Loan Package: The Mortgage Loans to be purchased by the
Purchaser on a Closing Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans for the
Mortgage Loan Package delivered on the related Delivery Date by the Seller to
the Custodian, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Company's Mortgage Loan identifying
number; (2) the Mortgagor's first and last name; (3) the street address of the
Mortgaged Property including the state and zip code; (4) a code indicating
whether the Mortgaged Property is owner-occupied; (5) the type of residential
dwelling constituting the Mortgaged Property; (6) the original months to
maturity; (7) the original date of the Mortgage; (8) the Loan-to-Value
Ratio at origination; (9) the Mortgage Interest Rate in effect immediately
following the Cut-off Date; (10) the date on which the first Monthly Payment
was due on the Mortgage Loan; (11) the stated maturity date; (12) the amount of
the Monthly Payment at origination; (13) the amount of the Monthly Payment as
of the Cut-off Date; (14) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal Balance; (15) the original
principal amount of the Mortgage Loan; (16) the Stated Principal Balance of the
Mortgage Loan as of the close of business on the Cut-off Date; (17) the first
Adjustment Date with respect to each Adjustable Rate Mortgage Loan; (18) the
Gross Margin with respect to each Adjustable Rate Mortgage Loan; (19) a code
indicating the purpose of the loan (i.e., purchase financing, Rate/Term
Refinancing, Cash-Out Refinancing); (20) the Maximum Mortgage Interest Rate
under the terms of the Mortgage Note with respect to each Adjustable Rate
Mortgage Loan; (21) the Minimum Mortgage Interest Rate under the terms of the
Mortgage Note with respect to each Adjustable Rate Mortgage Loan; (22) the
Mortgage Interest Rate at origination; (23) the Periodic Rate Cap with respect
to each Adjustable Rate Mortgage Loan; (24) a code indicating the documentation
style (i.e. full, alternative or reduced); (25) the Primary Insurance Policy
number, if any, which number (or an additional code) shall identify the
applicable Primary Insurance Policy provider; (26) the first Adjustment Date
immediately following the Cut-off Date with respect to each Adjustable Rate
Mortgage Loan; (27) the Index with respect to each Adjustable Rate Mortgage
Loan; (28) the Appraised Value of the Mortgaged Property; (29) the sale price of
the Mortgaged Property, if applicable; (30) the Servicing Fee; and (31) the
Periodic Rate Cap with respect to the initial Adjustment Date with respect to
each Adjustable Rate Mortgage
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Loan. With respect to the Mortgage Loan Package in the aggregate, the Mortgage
Loan Schedule shall set forth the following information, as of the Cut-off Date:
(1) the number of Mortgage Loans; (2) the current principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans.
Mortgage Loans: The original executed 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 consisting of a single contiguous parcel of real
property improved by a one- to four- family dwelling held either as a fee
simple interest or, in markets for which leaseholds are accepted, a leasehold
estate in the underlying property that extends at least five (5) years beyond
the longer of the term of the related Mortgage and the amortization period of
the related Mortgage.
Officer's Certificate: A certificate signed by (i) an officer (authorized
to sign an Officer's Certificate) of the Company or the Purchaser or (ii) an
officer from the appropriate records depository for the jurisdiction where the
respective Mortgaged Property is located. (The text of any particular Officer's
Certificate may be printed or stamped upon or attached to a document
constituting a portion of a Custodial File and the signature of an officer
authorized to sign an Officer's Certificate may be either a facsimile or other
reproduction thereof.)
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by the Servicing Agreement with respect to
certain Mortgage Loans.
Purchaser: Nomura Asset Capital Corporation, or its successor in interest
or assigns.
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, approved as an insurer by FNMA
and FHLMC and whose claims paying ability is rated in one of the two highest
rating categories by the Standard & Poor's Rating Group and Xxxxx'x Investors
Service, Inc. with respect to primary mortgage insurance and in one of the two
highest rating categories by Best's with respect to hazard and flood insurance.
Trust Receipt: A trust receipt delivered by the Custodian to the Purchaser
in the form attached hereto as Exhibit 8.
Trust Receipt Schedule: The list of Mortgage Loans attached from time to
time to a Trust Receipt in the form requested by the Purchaser.
Section 2. Delivery of Custodial Files.
The Company will deliver at least five (5) Business Days prior to the
related Closing Date the documents listed in Exhibit 1 hereto pertaining to
each of the Mortgage Loans to be purchased on such
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Closing Date. Such documents so delivered by the Company shall be released by
the Company to the Custodian for the benefit of the Purchaser on the related
Closing Date.
From time to time, the Company shall forward to the Custodian
additional original documents as such documents are returned from the
applicable recording offices and any other documents required to be delivered
to the Custodian pursuant to the Conduit guidelines. In addition, the Company
shall forward to the Custodian additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan approved by the
Company in accordance with the terms of the Servicing Agreement. All such
mortgage documents held by the Custodian as to each Mortgage Loan shall
constitute the "Custodial File."
With respect to any bulk purchase of Mortgage Loans, the Purchaser
shall deliver or cause to be delivered to the Custodian a Mortgage Loan
Schedule.
Section 3. Certification and Trust Receipt of the Custodian.
The Custodian shall deliver to the Purchaser a Certification in the
form of Exhibit 2 hereto within twenty-four (24) hours after each Delivery
Date, provided, however, that if the Custodian receives the Custodial Files
after 12:00 p.m. New York City time on a Delivery Date, the Custodian shall
have forty-eight (48) hours to deliver the related Certification. On the
initial Closing Date the Custodian shall deliver to the Purchaser a Trust
Receipt in the form of Exhibit 8 hereto. On each subsequent Closing Date the
Custodian shall deliver to the Purchaser a new Trust Receipt Schedule dated the
Closing Date and signed by an Authorized Representative of the Custodian. The
delivery of a dated and signed new Trust Receipt Schedule by the Custodian to
the Purchaser shall render the old Trust Receipt Schedule null and void.
Upon the written direction of the Purchaser, the Custodian shall
deliver all or any portion of the related Custodial Files held by it to the
Purchaser, or to such other party designated by the Purchaser in such written
direction, and to the place indicated in any such written direction. If such
delivery is for less than all of the Custodial Files held by the Custodian with
respect to a Trust Receipt, the Custodian shall deliver to the Purchaser a new
Trust Receipt Schedule with respect to the related Custodial Files retained by
the Custodian. In addition, upon receipt by the Custodian of a written
notification from the Purchaser that the Purchaser has sold all or a portion of
the Mortgage Loans relating to a Trust Receipt, which notification shall state
the name and address of the purchaser and the date of sale for such Mortgage
Loans, the Custodian shall change its records to reflect that the purchaser of
such Mortgage Loans from the Purchaser (the "Subsequent Purchaser") is the
owner of such Mortgage Loans and the related Custodial Files and shall, upon
the direction of the Purchaser, either deliver the applicable Custodial Files
to such Subsequent Purchaser or issue a Trust Receipt in the name of such
Subsequent Purchaser. The Custodian shall deliver to the Purchaser a new Trust
Receipt Schedule reflecting all of the Mortgage Loans with respect to which the
Custodian shall continue to hold the related Custodial Files on behalf of the
Purchaser. Any Subsequent Purchaser of a Mortgage Loan to whom a Trust Receipt
has been delivered shall succeed to all the rights and obligations of the
Purchaser under this Agreement, including the obligation to pay the Custodian's
fees and expenses, with respect to the such Mortgage Loan and the related
Custodial Files. The Purchaser shall give the Custodian at least one (1)
Business Day's notice prior to the sale of any or all of the Mortgage Loans. In
addition, the Purchaser shall give the Custodian such notice as is from
time-to-time agreed upon between the Purchaser and the Custodian prior to
requesting the shipping of any or all of the Custodial Files.
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Section 4. Obligations of Custodian.
With respect to the Mortgage Note, the Mortgage and the Assignment of
Mortgage and other documents constituting each Custodial File which is
delivered to the Custodian or which come into the possession of the Custodian,
the Custodian is the custodian for the Purchaser exclusively. On and after the
Closing Date, the Custodian shall hold all mortgage documents received by it
constituting the Custodial File for the exclusive use and benefit of the
Purchaser, and shall make disposition thereof only in accordance with this
Agreement and the instructions furnished by the Purchaser. The Custodian shall
segregate and maintain continuous custody of all mortgage documents
constituting the Custodial File in secure and fire-resistant facilities in
accordance with customary standards for such custody. The Custodian shall not
be responsible to verify (i) the validity, legality, enforceability,
sufficiency, due authorization, adequacy, recordability, title or genuineness
of any document in each Custodial File or of any of the Mortgage Loans or (ii)
the collectability, insurability, effectiveness or suitability of any Mortgage
Loan.
Section 5. Custodian to Cooperate.
From time to time and as appropriate in the servicing of the Mortgage
Loans, the Custodian shall cooperate with the Company's reasonable requests.
Section 6. Future Defects.
During the term of this Agreement, if the Custodian discovers any defect
with respect to a Custodial File, the Custodian shall give prompt written notice
of such defect to the Purchaser. The Purchaser, or its designee, shall be
solely responsible for providing each and every document required for the
Custodial File to the Custodian in a timely manner and for completing or
correcting any missing, incomplete or inconsistent documents, and the Custodian
shall not be responsible or liable for taking any such action, causing the
Company or any other Person to do so or notifying any Person that any such
action has or has not been taken (except to the extent of noting any existing
defects as provided herein).
Section 7. Release for Servicing.
From time to time and as appropriate for the foreclosure or servicing of
any of the Mortgage Loans, the Custodian is hereby authorized, upon written
receipt from an Authorized Representative of the Company of a request for
release of documents and receipt in the form annexed hereto as Exhibit 3, to
release to the Company the related Custodial File or the documents set forth in
such request and receipt to the Company. All documents so released to the
Company shall be held by the Company in trust for the benefit of the Purchaser
in accordance with the terms of the Servicing Agreement. The Company shall
return to the Custodian the Custodial File or other such documents when the
Company's need therefor in connection with such foreclosure or servicing no
longer exists, unless the Mortgage Loan shall be liquidated in which case, upon
receipt of an additional request for release of documents and receipt certifying
such liquidation from an Authorized Representative of the Company to the
Custodian in the form annexed hereto as Exhibit 3, the Company's request and
receipt submitted pursuant to the first sentence of this Section 7 shall be
released by the Custodian to the Company.
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Section 8. Limitation on Release.
The foregoing provision respecting release to the Company of the
Custodial Files and documents by the Custodian upon request by the Company shall
be operative only to the extent that at any time the Custodian shall not have
released to the Company active Custodial Files or documents (including those
requested) pertaining to more than 10 percent (10%) of the Mortgage Loans, by
aggregate outstanding principal balance, at the time being serviced by the
Company under the Servicing Agreement. Any additional Custodial Files or
documents requested to be released by the Company may be released only upon
written authorization of the Purchaser. The limitations of this paragraph shall
not apply to the release of Custodial Files to the Company under Section 9
below.
Section 9. Release for Payment.
Upon the repurchase or rejection of any Mortgage Loan pursuant to
Section 7 of the Servicing Agreement, or upon the payment in full of any
Mortgage Loan, and upon receipt by the Custodian of the Company's request for
release of documents and receipt in the form annexed hereto as Exhibit 3 (which
certification by the Company shall include a statement to the effect that
all amounts received in connection with such payment or repurchase have been
credited to the Custodial Account as provided in the Servicing Agreement), the
Custodian shall promptly release the related Custodial File to the Company.
Section 10. Fees of Custodian.
The Custodian shall charge such fees for its services under this
Agreement as are set forth in a separate agreement between the Custodian and
the Purchaser. All fees and expenses of the Custodian in connection with this
Agreement shall be borne solely by the Purchaser.
Section 11. Removal of Custodian.
The Purchaser, with or without cause, may (i) require the Custodian
to complete the endorsements on the Mortgage Notes and to complete the
Assignments of Mortgage, and/or (ii) upon at least thirty (30) days' notice
remove and discharge the Custodian from the performance of its duties under
this Agreement by written notice from the Purchaser to the Custodian, with a
copy to the Company. Having given notice of such removal, the Purchaser
promptly (and in any event within thirty (30) days after notice of removal is
given) shall appoint a successor Custodian to act on behalf of the Purchaser by
written instrument, one (1) original counterpart of which instrument shall be
delivered to the Purchaser, with a copy to the Company and an original to the
successor Custodian. In the event of any such removal, the Custodian shall
promptly transfer to the successor Custodian, as directed, all Custodial Files
being administered under this Agreement, and shall assign the Mortgages and
endorse the Mortgage Notes as directed by the Purchaser if the endorsement on
the Mortgage Notes and the Assignments of Mortgages have been completed in the
name of the Custodian; provided, that if no successor custodian shall have been
appointed within thirty (30) days after notice of removal has been given, the
Custodian shall deliver all of the Custodial Files to the Purchaser upon the
expiration of such thirty (30) day period, and shall assign the Mortgages and
endorse the Mortgage Notes to the Purchaser if the endorsements on the Mortgage
Notes and the Assignments of Mortgage have been completed in the name of
Custodian. In the event of any such appointment, the Purchaser shall be
responsible for the fees and expenses of the existing and successor custodian.
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Section 12. Transfer of Custodial Files Upon Termination.
If the Custodian is furnished with written notice from the Purchaser
that the Servicing Agreement has been terminated as to any or all of the
Mortgage Loans, upon written request of the Purchaser, the Custodian shall
release to such persons as the Purchaser shall designate, the Custodial Files
relating to such Mortgage Loans as the Purchaser shall request, and shall
assign the Mortgages and endorse the Mortgage Notes as directed by the
Purchaser.
Section 13. Examination of Custodial Files.
Upon reasonable prior notice to the Custodian, the Purchaser and its
agents, accountants, attorneys and auditors will be permitted during normal
business hours to examine the Custodial Files, documents, records and other
papers in the possession of or under the control of the Custodian relating to
any or all of the Mortgage Loans.
Section 14. Insurance of Custodian.
At its own expense, the Custodian shall maintain at all times during
the existence of this Agreement and keep in full force and effect a blanket
fidelity bond, theft of documents insurance, forgery insurance and errors and
omissions insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, all as is customary for insurance
typically maintained by banks which act as custodian. The minimum coverage
under any such bond and insurance policies shall be at least equal to the
corresponding amounts required by FNMA in the FNMA Mortgage-Backed Securities
Selling and Servicing Guide. A certificate of the respective insurer as to
each such policy, with a copy of such policy attached, shall be furnished to the
Purchaser, upon request, containing the statement of the insurer or endorsement
evidencing that such insurance shall not terminate prior to receipt by the
Purchaser, by registered mail, of 30 days' prior written notice thereof.
Section 15. Counterparts.
For the purpose of facilitating the execution of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute and be one
and the same instrument.
Section 16. Periodic Statements.
On the fifth Business Day of each month, and at such other times as
the Purchaser may reasonably request, the Custodian shall provide to the
Purchaser a list of all the Mortgage Loans for which the Custodian holds a
Custodial File showing all documents which are either in the Custodian's
possession, missing, defective or not yet returned from the appropriate
recording office pursuant to this Agreement. In addition, on the fifth Business
Day of each month, and at such other times as the Purchaser may reasonably
request, the Custodian shall provide to the Purchaser a list of all Custodial
Files released by the Custodian to the Company and the reason for such release.
All such reports shall be in a form reasonably acceptable to the Purchaser.
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Section 17. Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights, and remedies of the parties hereunder
shall be determined in accordance with such laws.
Section 18. Copies of Mortgage Documents.
Upon the request of the Purchaser and at the cost and expense of the
Purchaser, the Custodian shall provide the Purchaser with copies of the
Mortgage Notes, Mortgages, Assignments of Mortgage and other documents relating
to one or more of the Mortgage Loans.
Section 19. No Adverse Interest of Custodian.
By execution of this Agreement, the Custodian represents and warrants that
it currently holds, and during the existence of this Agreement shall hold, no
adverse interest, by way of security or otherwise, in any Mortgage Loan, and
hereby waives and releases any such interest which it may have in any Mortgage
Loan as of the date hereof.
Section 20. Termination by Custodian.
The Custodian may terminate its obligations under this Agreement upon at
least sixty (60) days' prior written notice to the Company and the Purchaser.
In the event of such termination, the Purchaser shall appoint a successor
Custodian. The payment of such successor Custodian's fees and expenses shall be
solely the responsibility of the Purchaser. Upon such announcement, the
Custodian shall promptly transfer, at the Custodian's sole expense, to the
successor Custodian, as directed, all Custodial Files being administered under
this Agreement, and shall assign the Mortgages and endorse the Mortgage Notes
as directed by the Purchaser, if the endorsements on the Mortgage Notes and the
Assignments of Mortgage have been completed in the name of the Custodian.
Section 21. Term of Agreement.
Unless terminated pursuant to Section 11 or Section 20 hereof, this
Agreement shall terminate upon the final payment or other liquidation of the
last Mortgage Loan or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, and the final remittance
of all funds due the Purchaser under the Servicing Agreement. In such event
all documents remaining in the Custodial Files shall be released in accordance
with the written instructions of Purchaser.
Section 22. Notices.
All demands, notices and communications hereunder shall be in writing
(including, without limitation, facsimile transmissions) and shall be deemed to
have been duly given when received by the recipient party at the address shown
on the first page hereof, or at such other addresses as may hereafter be
furnished to the other parties 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.
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Section 23. Successors and Assigns.
This Agreement shall inure to the benefit of the successors and assigns of
the parties hereto; provided, that this Agreement may not be assigned in whole
or in part without the prior written consent of the other parties hereto, which
consent shall not be unreasonably withheld.
Section 24. Indemnification of Custodian.
Neither the Custodian nor any of its directors, officers, agents or
employees, shall be liable for any action taken or omitted to be taken by it or
them hereunder or in connection herewith in good faith and believed by it or
them to be within the purview of this Agreement, except for its or their own
negligence, lack of good faith or willful misconduct. In no event shall the
Custodian or its directors, officers, agents and employees be held liable for
any special, indirect or consequential damages resulting from any action taken
or omitted to be taken by it or them hereunder or in connection herewith even
if advised of the possibility of such damages.
The Purchaser agrees to reimburse, indemnify and hold the Custodian and
its directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever,
including reasonable attorney's fees, that may be imposed on, incurred by,
or asserted against it or them in any way relating to or arising out of any
action taken or not taken by it or them hereunder unless such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (i) relate to or arise out of any action taken or not
taken by the Company hereunder or (ii) were imposed on, incurred by or asserted
against the Custodian because of the breach by the Custodian of its obligations
hereunder, which breach was caused by negligence, lack of good faith or willful
misconduct on the part of the Custodian or any of its directors, officers,
agents or employees.
The Company agrees to reimburse, indemnify and hold the Custodian and its
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever,
including reasonable attorney's fees, that may be imposed on, incurred by, or
asserted against it or them in any way relating to or arising out of this
Agreement or any action taken or not taken by the Company hereunder unless
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements were imposed on, incurred by or
asserted against the Custodian because of the breach by the Custodian of its
obligations hereunder, which breach was caused by negligence, lack of good
faith or willful misconduct on the part of the Custodian or any of its
directors, officers, agents or employees.
Section 25. Reliance of Custodian.
In the absence of bad faith, negligence or willful misconduct on the part
of the Custodian, the Custodian may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
request, instructions, certificate, opinion or other document furnished to the
Custodian, reasonably believed by the Custodian to be genuine and to have been
signed or presented by the proper party or parties and conforming to the
requirements of this Agreement; but in the case of any loan document or other
request, instruction, document or certificate which by any provision hereof is
specifically
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required to be furnished to the Custodian, the Custodian shall be under a duty
to examine the same to determine whether or not it conforms on its face to the
requirements of this Agreement.
Section 26. Transmission of Custodial Files.
Written instructions as to the method of shipment and shipper(s) the
Custodian is directed to utilize in connection with transmission of mortgage
files and loan documents in the performance of the Custodian's duties hereunder
shall be delivered by the Company or the Purchaser, as applicable, to the
Custodian prior to any shipment of any mortgage files and loan documents
hereunder. The cost of such services shall be borne by the Purchaser or, at the
Custodian's option, shall be borne by the Custodian and reimbursed by the
Purchaser. Without limiting the generality of the provisions of Section 24
above, it is expressly agreed that in no event shall the Custodian have any
liability for any losses or damages to any person, including without
limitation, the Company and the Purchaser, arising out of actions of the
Custodian consistent with instructions of the Company or the Purchaser, as
applicable.
Section 27. Authorized Representatives.
Each individual designated as an authorized representative of the
Company, the Custodian or the Purchaser (each, an "Authorized Representative")
is authorized to give and receive notices, requests and instructions and to
deliver certificates and documents in connection with this Agreement on behalf
of the Company, the Custodian or the Purchaser, as the case may be, and the
specimen signature for each such Authorized Representative of the Company, the
Custodian and Purchaser initially authorized hereunder is set forth on Exhibits
4, 5 and 6 hereof, respectively. From time to time, the Company, the Custodian
and the Purchaser may, by delivering to the others a revised exhibit, change
the information previously given pursuant to this Section 27, but each of the
parties hereto shall be entitled to rely conclusively on the then current
exhibit until receipt of superseding exhibit.
Section 28. Amendments: Entire Agreement.
No amendment or waiver of any provision of this Agreement nor consent
to any departure herefrom shall in any event be effective unless the same shall
be in writing and signed by all the parties hereto, and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. This Agreement constitutes the entire
agreement and understanding of the parties with respect to the matters and
transactions contemplated by this Agreement and supersedes any prior agreement
and understandings with respect to those matters and transactions.
Section 29. Reproduction of Documents.
This Agreement and all documents relating thereto except with respect
to any Custodial File, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, and (b) certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, microcard, 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.
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-15
AUGUST 1, 1995
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Section 30. No Assignment or Delegation by Custodian
The Custodian shall not assign, transfer, pledge, or grant a security
interest in, any of its rights, benefits or privileges hereunder nor delegate
or appoint any other Person, except an affiliate of the Custodian or another
national bank or a depository institution subject to supervision by federal or
state authority and shall have a long-term debt rating of at least single A
from Standard and Poor's Ratings Group or Xxxxx'x Investors Services, Inc.,
whose appointment shall not relieve the Custodian of its obligations hereunder,
to perform or carry out any of its duties, responsibilities or obligations
under this Agreement, without the prior written consent of the Purchaser, and
any act or instrument purporting to effect any such assignment, transfer,
pledge, grant delegation or appointment without such consent shall be void.
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT M
PAGE R-16
AUGUST 1, 1995
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IN WITNESS WHEREOF, the Company, the Purchaser and the Custodian have
caused their names to be duly signed hereto by their respective officers
thereunto duly authorized, all as of the date first above written.
NOMURA ASSET CAPITAL CORPORATION, as
Purchaser
By:
Name:
Title:
----------------------------, as Company
By:
Name:
Title:
LASALLE NATIONAL BANK, as Custodian
By:
Name:
Title:
76
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-17
AUGUST 1, 1995
FORM OF CUSTODIAL AGREEMENT
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EXHIBIT 1
CONTENTS OF EACH CUSTODIAL FILE
With respect to each Mortgage Loan, the Custodial File shall
include each of the following items unless otherwise agreed to in writing by
the Purchaser:
1. The original Mortgage Note, together with any riders thereto,
bearing all intervening endorsements, endorsed "Pay to the order
of [____________], without recourse" and signed in the name of
the Company by an authorized officer.
2. The original Assignment of Mortgage for each Mortgage Loan [in
blank].
3. The original of any guarantee executed in connection with the
Mortgage Note.
4. The original Mortgage, together with any riders thereto, with
evidence of recording thereon. If in connection with any
Mortgage Loan, the Company has not caused the original recorded
Mortgage to be delivered to the Custodian because of a delay
caused by the public recording office where such Mortgage has
been delivered for recordation or because such Mortgage has been
lost or because such public recording office retains the
original recorded Mortgage, the Custodial File shall consist of
a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's
Certificate of either the Company or the title insurer insuring
the Mortgage stating that such Mortgage has been delivered to
the appropriate public recording office for recordation and that
the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the Company;
or (ii) in the case of a Mortgage where a public recording
office retains the original recorded Mortgage or in the case
where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage with the recording information
thereon certified by such public recording office to be a true
and complete copy of the original recorded Mortgage.
5. The originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if
any, or if such agreement has not been returned from the
applicable recording office or has been lost or if such public
recording office retains the original recorded agreement, the
Custodial File shall include a photocopy of such agreement,
together with (i) in the case delay caused by the public
recording office, an Officer's Certificate of either the Company
or the title insurer insuring the Mortgage stating that such
agreement has been delivered to the appropriate public recording
office for recordation and that such original recorded agreement
or a copy of such agreement certified by the appropriate public
recording office to a true and complete copy of the original
recorded agreement will be promptly delivered to the Custodian
upon receipt thereof by the Company; or (ii) in the case of an
agreement where a public recording office retains the original
recorded agreement or in the case where an agreement is lost
after recordation in a public recording office, a copy of such
agreement with recording
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-18
AUGUST 1, 1995
FORM OF CUSTODIAL AGREEMENT
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information thereon certified by such public recording office to
be a true and complete copy of the original recorded agreement.
6. The originals of all intervening assignments of mortgage with
evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording
office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the
Custodial File shall include a photocopy of such intervening
assignment, together with (i) in the case delay caused by the
public recording office, an Officer's Certificate of either the
Company or the title insurer insuring the Mortgage stating that
such intervening assignment of mortgage has been delivered to
the appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or a
copy of such intervening assignment of mortgage certified by the
appropriate public recording office to a true and complete copy
of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by
the Company; or (ii) in the case of an intervening assignment
where a public recording office retains the original recorded
intervening assignment or in the case where an intervening
assignment is lost after recordation in a public recording
office, a copy of such intervening assignment with recording
information thereon certified by such public recording office to
be a true and complete copy of the original recorded intervening
assignment.
7. The original or a certified copy of the mortgagee title
insurance policy or preliminary title insurance policy.
8. The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage.
9. The original power of attorney, if applicable, with evidence of
recording thereon or if such power of attorney has not been
returned from the applicable recording office or has been lost
or if such public recording office retains the original recorded
power of attorney, the Custodial File shall include a photocopy
of such power of attorney, together with (i) in the case delay
caused by the public recording office, an Officer's Certificate
of either the Company or the title insurer insuring the Mortgage
stating that such power of attorney has been delivered to the
appropriate public recording office for recordation and that
such original recorded power of attorney or a copy of such power
of attorney certified by the appropriate public recording office
to a true and complete copy of the original recorded power of
attorney will be promptly delivered to the Custodian upon
receipt thereof by the Company; or (ii) in the case of a power
of attorney where a public recording office retains the original
recorded power of attorney or in the case where a power of
attorney is lost after recordation in a public recording office,
a copy of such power of attorney with recording information
thereon certified by such public recording office to be a true
and complete copy of the original recorded power of attorney.
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-19
AUGUST 1, 1995
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EXHIBIT 2
CERTIFICATION
[Date]
Nomura Asset Capital Corporation
Two World Xxxxxxxxx Xxxxxx, Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn:
RE: CUSTODIAL AGREEMENT, DATED AS OF ______ 1, 1995, AMONG
NOMURA ASSET CAPITAL CORPORATION AS THE PURCHASER, LA SALLE
NATIONAL BANK AS THE CUSTODIAN, AND
____________________________ AS THE COMPANY.
Ladies and Gentlemen:
In accordance with the provisions of Section 3 of the above-referenced
Custodial Agreement, the undersigned, as the Custodian, hereby certifies that,
except as specifically noted on the schedule attached hereto, as to each
Mortgage Loan, (i) all documents required to be included in the Custodial File
are in its possession; provided, however, that this certification is not
required to be made with respect to items 3 and 5 of Exhibit 1, (ii) such
documents have been reviewed by the Custodian and appear regular, complete, and
not patently inconsistent on their face and relate to the Mortgage Loan, (ii)
such documents purporting to be original documents appear on their face to be
original documents, and (iii) such documents purporting to be certified
photocopies or conformed copies appear on their face to be true copies of the
related originals. [If a bulk purchase add: In addition, based upon the
Custodian's examination of the documents in the Custodial Files, the Custodian
hereby certifies that the information set forth on the Mortgage Loan Schedule
accurately reflects the terms of such documents.]
LASALLE NATIONAL BANK, Custodian
By:
Name:
Title:
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-20
AUGUST 1, 1995
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EXHIBIT 3
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
LASALLE NATIONAL BANK
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn:
RE: CUSTODIAL AGREEMENT, DATED AS OF __________ 1, 1995, AMONG
NOMURA ASSET CAPITAL CORPORATION AS THE PURCHASER, LASALLE
NATIONAL BANK AS THE CUSTODIAN, AND
__________________________ AS THE COMPANY.
In connection with the administration of the Mortgage Loans held by you
as the Custodian on behalf of the Purchaser, we request the release, and
acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor's Name Address & Zip Code:
------------------------------------
Mortgage Loan Number:
---------------------
Reason for Requesting Documents (check one)
-------------------------------
__1. Mortgage Loan Paid in Full. (The Company hereby certifies that all
amounts received in connection therewith have been credited to the
Custodial Account as provided in the Servicing Agreement.)
__2. Mortgage Loan Repurchase Pursuant to Section ___ of the Servicing
Agreement. (The Company hereby certifies that the repurchase price has
been credited to the Custodial Account as provided in the Servicing
Agreement.)
__3. Mortgage Loan Liquidated By__________________ (The Company hereby
certifies that all proceeds of foreclosure, insurance, condemnation or
other liquidation have been finally received and credited to the
Custodial Account pursuant to the Servicing Agreement.)
__4. Mortgage Loan in Foreclosure
__5. Other (explain)
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-21
AUGUST 1, 1995
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If box 1, 2 or 3 above is checked, and if all or part of the Custodial
File was previously released to us, please release to us our previous request
and receipt on file with you, as well as any additional documents in your
possession relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Custodian, please acknowledge your receipt by signing
in the space indicated below, and returning this form.
[COMPANY]
By:
Name:
Title:
Date:
Acknowledgment of Documents returned to the Custodian (Items 4 and 5):
LASALLE NATIONAL BANK
By:
Name:
Title:
Date:
Acknowledgment of release of documents to the Company (only required if
Custodial Files or documents relating to more than 10 percent (10%) of the
Mortgage Loans, by aggregate outstanding principal balance, have withdrawn for
foreclosure or servicing):
NOMURA ASSET CAPITAL CORPORATION
By:
Name:
Title:
Date:
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-22
AUGUST 1, 1995
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EXHIBIT 4
AUTHORIZED REPRESENTATIVES OF COMPANY
[COMPANY]
NAME SPECIMEN SIGNATURE
---- ------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-23
AUGUST 1, 1995
FORM OF CUSTODIAL AGREEMENT
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EXHIBIT 5
AUTHORIZED REPRESENTATIVES OF CUSTODIAN
LASALLE NATIONAL BANK
NAME SPECIMEN SIGNATURE
---- ------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-24
AUGUST 1, 1995
FORM OF CUSTODIAL AGREEMENT
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EXHIBIT 5
AUTHORIZED REPRESENTATIVES OF PURCHASER
NOMURA ASSET CAPITAL CORPORATION
NAME SPECIMEN SIGNATURE
---- ------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-25
AUGUST 1, 1995
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EXHIBIT 7
FORM OF OPINION OF COUNSEL TO THE CUSTODIAN
(Date)
[COMPANY]
Nomura Asset Capital Corporation
Two World Xxxxxxxxx Xxxxxx
Xxxxxxxx X
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to LaSalle National Bank (the "Custodian")
in connection with the execution and delivery of that certain Custodial
Agreement, dated as of ____ 1, 1995 (the "Agreement"), among __________________
(the "Company"), Nomura Asset Capital Corporation (the "Purchaser") and the
Custodian with respect to certain residential mortgage loans.
We have reviewed the Agreement and such other matters as we have
deemed appropriate in order to deliver the opinions contained herein.
In rendering the opinions expressed below, we have assumed, without
any independent investigation or verification of any kind, that each of you and
the Company is duly organized, validly existing and in good standing under the
laws of the respective jurisdiction of incorporation and has full power and
authority to execute, deliver and perform the Agreement, and that the
execution, delivery and performance of the Agreement by each of the Purchaser
and the Company has been duly authorized by all requisite corporate action on
the part of each of the Purchaser and the Company and has been duly executed
and delivered by each of the Purchaser and the Company.
Based upon the foregoing, it is our opinion that:
1. The Custodian is a corporation, duly organized, validly existing
and in good standing under the laws of the State of _____________
with full right, power and authority to enter into, execute and
deliver the Agreement. The Custodian is eligible to act as
custodian under the terms of the Agreement.
2. The Agreement has been duly authorized, executed and delivered by
the Custodian and constitutes the legal, valid and binding
agreement of and is enforceable against the Custodian in
accordance with its terms, subject to bankruptcy laws and other
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-26
AUGUST 1, 1995
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similar laws of general application affecting rights of
creditors and subject to the application of the rules of equity,
including those respecting the availability of specific
performance.
We are members of the Bar of the State of __________. We do not
express herein any opinion as to matters governed by any law other than the law
of the State of _________, the laws of the State of __________ applicable to
Delaware corporations and the federal law of the United States of America.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon, except that the purchaser or
purchasers to which the Purchaser initially and directly resells the Mortgage
Loans may rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-27
AUGUST 1, 1995
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EXHIBIT 8
TRUST RECEIPT
[To be addressed to the Purchaser]
Re: Custodial Agreement, dated as of _____ 1, 1995, among Nomura Asset Capital
Corporation as the Purchaser, __________________________ as the Company and
LaSalle National Bank as the Custodian
Ladies and Gentlemen:
In accordance with the provisions of Section 3 of the above-referenced
Custodial Agreement, the undersigned, as the custodian, hereby certifies that
as to each Mortgage Loan in the attached Trust Receipt Schedule, except as noted
therein, (i) [ if a bulk purchase add: based on its examination of the documents
in the Custodial File, the information set forth on the Mortgage Loan Schedule
accurately reflects the terms of the documents held in the Custodial File,]
(ii) all documents required to be included in the Custodial File are in its
possession; provided, however, that this certification is not required to be
made with respect to items 3 and 5 of Exhibit 1 to the Custodial Agreement,
(iii) such documents have been reviewed by the Custodian and appear regular,
complete, and not patently inconsistent on their face and relate to the
Mortgage Loan, (iv) such documents purporting to be original documents appear
on their face to be original documents, and (v) such documents purporting to be
certified photocopies or conformed copies appear on their face to be true
copies of the related originals. The Custodian makes no representations as to
(i) the validity, legality, enforceability, sufficiency, due authorization,
adequacy, recordability, title or genuineness of any of the documents contained
in each Custodial File or of any of the Mortgage Loans or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan.
The Custodian hereby confirms that it is holding each such Mortgage
Note and Assignment of Mortgage as agent and bailee of, and custodian for the
exclusive use and benefit, and subject to the sole discretion, of the addressee
above pursuant to the terms and conditions of the Custodial Agreement.
This Trust Receipt is not divisible or negotiable. However, you or an
affiliate may transfer this Trust Receipt by special endorsement to no more
than one other party as collateral for a loan or pursuant to a repurchase
transaction. Any party that takes this Trust Receipt from you or your affiliate
by special endorsement may only transfer it by a second endorsement in your
or your affiliate's favor.
If this Trust Receipt has been endorsed as provided above and is held
by other than you or one or your affiliates, we will accept and act on
instructions from the endorsee only if the Certification of Default set forth
below is executed and delivered to the Custodian.
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NOMURA ASSET CAPITAL CORPORATION EXHIBIT R
PAGE R-28
AUGUST 1, 1995
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Capitalized terms used herein shall have the meaning ascribed to them
in the Custodial Agreement.
LASALLE NATIONAL BANK, Custodian
By:
Name:
Title: ________________________________
CERTIFICATION OF DEFAULT
You are hereby notified that _____________________ is in default under
a loan agreement or repurchase agreement with the undersigned and the
undersigned is entitled to receive the Mortgage Loans subject to this Trust
Receipt.
[COMPANY]
By:
Name:
Title:
Receipt Acknowledged:
LASALLE NATIONAL BANK, Custodian
By:
Name:
Title:
Date:
EXHIBIT 9
SERVICING AGREEMENT
