Exhibit 99.5
EXECUTION COPY
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
among
XXXXXXX XXXXX MORTGAGE COMPANY,
as Assignor
GS MORTGAGE SECURITIES CORP.,
as Assignee
XXXXXX'X GATE RESIDENTIAL MORTGAGE TRUST,
as a Seller
and
PHH MORTGAGE CORPORATION
as a Seller and as Servicer
Dated as of
January 27, 2006
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this "Assignment
Agreement") made this 27th day of January, 2006, among PHH Mortgage
Corporation (formerly known as Cendant Mortgage Corporation) (the "Servicer"),
Xxxxxx'x Gate Residential Mortgage Trust (formerly known as Cendant
Residential Mortgage Trust) ("Xxxxxx'x Gate" and, together with the Servicer,
the "PHH Parties"), GS Mortgage Securities Corp., as assignee (the "Assignee")
and Xxxxxxx Xxxxx Mortgage Company, as assignor (the "Assignor").
WHEREAS, the Assignor and the PHH Parties have entered into the
Amended and Restated Mortgage Loan Flow Purchase, Sale & Servicing Agreement,
dated as of December 1, 2005 (the "Sale and Servicing Agreement"), pursuant to
which the PHH Parties sold to the Assignor certain mortgage loans listed on
the mortgage loan schedule attached as an exhibit to the Sale and Servicing
Agreement;
WHEREAS, the Assignee has agreed on certain terms and conditions to
purchase from the Assignor certain of the mortgage loans (the "Mortgage
Loans"), which are subject to the provisions of the Sale and Servicing
Agreement and are listed on the mortgage loan schedule attached as Exhibit 1
hereto (the "Mortgage Loan Schedule"); and
WHEREAS, pursuant to a Master Servicing and Trust Agreement, dated as
of January 1, 2006 (the "Trust Agreement"), among GS Mortgage Securities
Corp., as depositor, U.S. Bank National Association, as trustee (the
"Trustee"), Deutsche Bank National Trust Company, as a custodian and JPMorgan
Chase Bank, National Association, as master servicer (in such capacity, the
"Master Servicer"), securities administrator and a custodian, the Assignee
will transfer the Mortgage Loans to the Trustee, together with the Assignee's
rights under the Sale and Servicing Agreement, to the extent relating to the
Mortgage Loans (other than the rights of the Assignor (and if applicable its
affiliates, officers, directors and agents) to indemnification thereunder).
NOW THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption.
(a) The Assignor hereby assigns to the Assignee, as of the date
hereof, all of its right, title and interest in and to the Mortgage Loans, the
Sale and Servicing Agreement, to the extent relating to the Mortgage Loans
(other than the rights of the Assignor (and if applicable its affiliates,
officers, directors and agents) to indemnification thereunder), and the
Assignee hereby assumes all of the Assignor's obligations under the Sale and
Servicing Agreement, to the extent relating to the Mortgage Loans, from and
after the date hereof, and the Servicer hereby acknowledges such assignment
and assumption and hereby agrees to the release of the Assignor from any
obligations under the Sale and Servicing Agreement from and after the date
hereof, to the extent relating to the Mortgage Loans.
(b) The Assignor represents and warrants to the Assignee that the
Assignor has not taken any action which would serve to impair or encumber the
Assignor's ownership interest in the Mortgage Loans since the date of the Sale
and Servicing Agreement.
(c) The PHH Parties and the Assignor shall have the right to amend,
modify or terminate the Sale and Servicing Agreement without the joinder of
the Assignee with respect to mortgage loans not conveyed to the Assignee
hereunder; provided, however, that such amendment, modification or termination
shall not affect or be binding on the Assignee.
2. Modification of the Servicing Agreement. Only in so far as it
relates to the Mortgage Loans, the PHH Parties and the Assignor hereby amend
the Sale and Servicing Agreement as follows:
(a) the defined term "Repurchase Price" in Article I, Section 1.01
will be deleted in its entirety and replaced with the following:
"Repurchase Price": As to (a) any Defective Mortgage Loan required to
be repurchased hereunder with respect to which a breach occurred or (b) any
Mortgage Loan required to be repurchased pursuant to Section 3.04 and/or
Section 7.02, an amount equal to the Unpaid Principal Balance of such Mortgage
Loan at the time of repurchase; plus (2) interest on such Mortgage Loan at the
applicable Note Rate from the last date through which interest has been paid
and distributed to the Purchaser hereunder to the date of repurchase; plus (3)
with respect to any Mortgage Loan included in a Securitization Transaction,
damages incurred by the Purchaser or its assignee including the trust in any
securitization in connection with any violation by such Mortgage Loan of any
predatory or abusive lending law; minus (4) any amounts received in respect of
such Defective Mortgage Loan which are being held in the Collection Account
for future remittance.
3. Accuracy of Sale and Servicing Agreement. The PHH Parties and the
Assignor represent and warrant to the Assignee that (i) attached hereto as
Exhibit 2 is a true, accurate and complete copy of the Sale and Servicing
Agreement, (ii) the Sale and Servicing Agreement is in full force and effect
as of the date hereof, (iii) except as provided in Section 1 above, the Sale
and Servicing Agreement has not been amended or modified in any respect and
(iv) no notice of termination has been given to the Servicer under the Sale
and Servicing Agreement. The PHH Parties, in their respective capacities as
seller and/or servicer under the Sale and Servicing Agreement, further
represent and warrant that the representations and warranties contained in
Sections 3.01 and 3.02 of the Sale and Servicing Agreement are true and
correct as of the January 27, 2006 (the "Closing Date") and the
representations and warranties regarding the Mortgage Loans contained in
Section 3.03 of the Sale and Servicing Agreement were true and correct as of
the Closing Date (as such term is defined in the Sale and Servicing
Agreement).
4. Recognition of Assignee. From and after the date hereof, the
Servicer shall note the transfer of the Mortgage Loans to the Assignee in its
books and records, shall recognize the Assignee as the owner of the Mortgage
Loans and, notwithstanding anything herein to the contrary, shall service all
of the Mortgage Loans for the benefit of the Assignee pursuant to the Sale and
Servicing Agreement the terms of which are incorporated herein by
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reference. It is the intention of the Assignor, the PHH Parties and Assignee
that the Sale and Servicing Agreement shall be binding upon and inure to the
benefit of the PHH Parties and the Assignee and their successors and assigns.
5. Representations and Warranties of the Assignee. The Assignee
hereby represents and warrants to the Assignor as follows:
(a) Decision to Purchase. The Assignee represents and warrants that
it is a sophisticated investor able to evaluate the risks and merits of the
transactions contemplated hereby, and that it has not relied in connection
therewith upon any statements or representations of the Assignor or the PHH
Parties other than those contained in the Sale and Servicing Agreement, the
Sale and Servicing Agreement or this Assignment Agreement.
(b) Authority. The Assignee hereto represents and warrants that it is
duly and legally authorized to enter into this Assignment Agreement and to
perform its obligations hereunder and under the Sale and Servicing Agreement.
(c) Enforceability. The Assignee hereto represents and warrants that
this Assignment Agreement has been duly authorized, executed and delivered by
it and (assuming due authorization, execution and delivery thereof by each of
the other parties hereto) constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
6. Representations and Warranties of the Assignor. The Assignor
hereby represents and warrants to the Assignee as follows:
(a) Organization. The Assignor has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of New York with full power and authority (corporate and other) to enter into
and perform its obligations under the Sale and Servicing Agreement and this
Assignment Agreement.
(b) Enforceability. This Assignment Agreement has been duly executed
and delivered by the Assignor, and, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a legal, valid, and
binding agreement of the Assignor, enforceable against it in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
(c) No Consent. The execution, delivery and performance by the
Assignor of this Assignment Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except such
as has been obtained, given, effected or taken prior to the date hereof.
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(d) Authorization; No Breach. The execution and delivery of this
Assignment Agreement have been duly authorized by all necessary corporate
action on the part of the Assignor; neither the execution and delivery by the
Assignor of this Assignment Agreement, nor the consummation by the Assignor of
the transactions herein contemplated, nor compliance by the Assignor with the
provisions hereof, will conflict with or result in a breach of, or constitute
a default under, any of the provisions of the governing documents of the
Assignor or any law, governmental rule or regulation or any material judgment,
decree or order binding on the Assignor or any of its properties, or any of
the provisions of any material indenture, mortgage, deed of trust, contract or
other instrument to which the Assignor is a party or by which it is bound.
(e) Actions; Proceedings. There are no actions, suits or proceedings
pending or, to the knowledge of the Assignor, threatened, before or by any
court, administrative agency, arbitrator or governmental body (A) with respect
to any of the transactions contemplated by this Assignment Agreement or (B)
with respect to any other matter that in the judgment of the Assignor will be
determined adversely to the Assignor and will, if determined adversely to the
Assignor, materially adversely affect its ability to perform its obligations
under this Assignment Agreement.
7. Additional Representations and Warranties of the Assignor With
Respect to the Mortgage Loans. The Assignor hereby represents and warrants to
the Assignee as follows:
(a) Prior Assignments; Pledges. Except for the sale to the Assignee,
the Assignor has not assigned or pledged any Mortgage Note or the related
Mortgage or any interest or participation therein.
(b) Releases. The Assignor has not satisfied, canceled or
subordinated in whole or in part, or rescinded any Mortgage, and the Assignor
has not released the related Mortgaged Property from the lien of any Mortgage,
in whole or in part, nor has the Assignor executed an instrument that would
effect any such release, cancellation, subordination, or rescission. The
Assignor has not released any Mortgagor, in whole or in part, except in
connection with an assumption agreement or other agreement approved by the
related federal insurer, to the extent such approval was required.
(c) Compliance with Applicable Laws. With respect to each Mortgage
Loan, any and all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, predatory
and abusive lending or disclosure laws applicable to such Mortgage Loan,
including without limitation, any provisions relating to prepayment charges,
have been complied with.
(d) High Cost. No Mortgage Loan is categorized as "High Cost"
pursuant to the then-current Standard & Poor's Glossary for File Format for
LEVELS(R) Version 5.6(c), Appendix E, as revised from time to time and in
effect as of the Original Purchase Date. Furthermore, none of the Mortgage
Loans sold by the Seller are classified as (a) a "high cost mortgage" loan
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high
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cost home," "covered," "high-cost," "high-risk home," or "predatory" loan
under any other applicable state, federal or local law.
(e) Georgia Fair Lending Act. No Mortgage Loan is secured by a
property in the state of Georgia and originated between October 1, 2002 and
March 7, 2003.
(f) Credit Reporting. The Assignor will cause to be fully furnished,
in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and
unfavorable) on Mortgagor credit files to Equifax, Experian and Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis.
(g) Bring Down. To the Assignor's knowledge, with respect to each
Mortgage Loan, no event has occurred from and after the closing date set forth
in such Sale and Servicing Agreement to the date hereof that would cause any
of the representations and warranties relating to such Mortgage Loan set forth
in Section 3.03 of the Sale and Servicing Agreement to be untrue in any
material respect as of the date hereof as if made on the date hereof. With
respect to those representations and warranties which are made to the best of
the Assignor's knowledge, if it is discovered by the Assignor that the
substance of such representation and warranty is inaccurate, notwithstanding
the Assignor's lack of knowledge with respect to the substance of such
representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation and warranty.
It is understood and agreed that the representations and warranties
set forth in Sections 6 and 7 shall survive delivery of the respective
mortgage loan documents to the Assignee or its designee and shall inure to the
benefit of the Assignee and its assigns notwithstanding any restrictive or
qualified endorsement or assignment. Upon the discovery by the Assignor or the
Assignee and its assigns of a breach of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other parties to this Assignment Agreement, and in no event later than
two (2) Business Days from the date of such discovery. It is understood and
agreed that the obligations of the Assignor set forth in Section 8 to
repurchase or, in limited circumstances, substitute a Mortgage Loan constitute
the sole remedies available to the Assignee and its assigns on their behalf
respecting a breach of the representations and warranties contained in
Sections 6 and 7. It is further understood and agreed that, except as
specifically set forth in Sections 6 and 7, the Assignor shall be deemed not
to have made the representations and warranties in Section 7(g) with respect
to, and to the extent of, representations and warranties made, as to the
matters covered in Section 7(g), by the PHH Parties in the Sale and Servicing
Agreement (or any officer's certificate delivered pursuant thereto).
It is understood and agreed that, with respect to the Mortgage Loans,
the Assignor has made no representations or warranties to the Assignee other
than those contained in Sections 6 and 7, and no other affiliate of the
Assignor has made any representations or warranties of any kind to the
Assignee.
8. Repurchase of Mortgage Loans. Upon discovery or notice of any
breach by the Assignor of any representation, warranty or covenant under this
Assignment Agreement
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that materially and adversely affects the value of any Mortgage Loan or the
interest of the Assignee therein (it being understood that any such defect or
breach shall be deemed to have materially and adversely affected the value of
the related Mortgage Loan or the interest of the Assignee therein if the
Assignee incurs a loss as a result of such defect or breach), the Assignee
promptly shall request that the Assignor cure such breach and, if the Assignor
does not cure such breach in all material respects within sixty (60) days from
the date on which it is notified of the breach, the Assignee may enforce the
Assignor's obligation hereunder to purchase such Mortgage Loan from the
Assignee at the Repurchase Price as defined in the Sale and Servicing
Agreement or, in limited circumstances (as set forth below), substitute such
mortgage loan for a Substitute Mortgage Loan (as defined below).
Notwithstanding the foregoing, however, if such breach is a Qualification
Defect as defined in the Sale and Servicing Agreement, such cure or repurchase
must take place within sixty (60) days of discovery of such Qualification
Defect.
The Assignor shall have the option, but is not obligated, to
substitute a Substitute Mortgage Loan for a Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, by removing such Mortgage Loan
and substituting in its place a Substitute Mortgage Loan or Loans and
providing the Substitution Adjustment Amount, if any, provided that any such
substitution shall be effected not later than ninety (90) days from the date
on which it is notified of the breach.
In the event a PHH Party has breached a representation or warranty
under the Sale and Servicing Agreement that is substantially identical to, or
covers the same matters as, a representation or warranty breached by the
Assignor hereunder, the Assignee shall first proceed against such PHH Party to
cure such breach or purchase such mortgage loan from the Trust. If such PHH
Party does not within ninety (90) days after notification of the breach, take
steps to cure such breach (which may include certifying to progress made and
requesting an extension of the time to cure such breach, as permitted under
the Sale and Servicing Agreement) or purchase the Mortgage Loan, the Trustee
shall be entitled to enforce the obligations of the Assignor or the Servicer,
as applicable, hereunder to cure such breach or to purchase or substitute for
the Mortgage Loan from the Trust.
In addition, the Assignor shall have the option, but is not
obligated, to substitute a Substitute Mortgage Loan for a Mortgage Loan with
respect to which the Servicer has breached a representation and warranty and
is obligated to repurchase such Mortgage Loan under the Sale and Servicing
Agreement, by removing such Mortgage Loan and substituting in its place a
Substitute Mortgage Loan or Loans, provided that any such substitution shall
be effected not later than ninety (90) days from the date on which it is
notified of the breach.
In the event of any repurchase or substitution of any Mortgage Loan
by the Assignor hereunder, the Assignor shall succeed to the rights of the
Assignee to enforce the obligations of the Servicer to cure any breach or
repurchase such Mortgage Loan under the terms of the Sale and Servicing
Agreement with respect to such Mortgage Loan. In the event of a repurchase or
substitution of any Mortgage Loan by the Assignor, the Assignee shall promptly
deliver to the Assignor or its designee the related Mortgage File and shall
assign to the Assignor all of the Assignee's rights under the Sale and
Servicing Agreement, but only insofar as such Sale and Servicing Agreement
relates to such Mortgage Loan.
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Except as specifically set forth herein, the Assignee shall have no
responsibility to enforce any provision of this Assignment Agreement, to
oversee compliance hereof or to take notice of any breach or default thereof.
For purposes of this Section, "Deleted Mortgage Loan" and "Substitute
Mortgage Loan" shall be defined as set forth below.
"Deleted Mortgage Loan" A Mortgage Loan which is to be, pursuant to
this Section 8, replaced or to be replaced by the Assignor with a Substitute
Mortgage Loan.
"Substitute Mortgage Loan" A Mortgage Loan substituted by the
Assignor for a Deleted Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than
and not more than 2% per annum higher than that of the Deleted Mortgage Loan;
(iii) have a remaining term to maturity not greater than and not more than one
year less than that of the Deleted Mortgage Loan; (iv) be of the same type as
the Deleted Mortgage Loan (i.e., fixed rate or adjustable rate with same
periodic rate cap, lifetime rate cap, and index); and (v) comply with each
representation and warranty set forth in Section 3.03 of the Sale and
Servicing Agreement.
"Substitution Adjustment Amount" means with respect to any Mortgage
Loan, the amount remitted by GSMC on the applicable Distribution Date which is
the difference between the outstanding principal balance of a Substitute
Mortgage Loan as of the date of substitution and the outstanding principal
balance of the Deleted Mortgage Loan as of the date of substitution.
9. Continuing Effect. Except as contemplated hereby, the Sale and
Servicing Agreement shall remain in full force and effect in accordance with
its terms.
10. Governing Law.
THIS ASSIGNMENT AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF).
EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
ASSIGNMENT AGREEMENT, OR ANY OTHER DOCUMENTS AND INSTRUMENTS EXECUTED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTIONS OF SUCH PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS ASSIGNMENT AGREEMENT.
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11. Notices. Any notices or other communications permitted or
required hereunder or under the Sale and Servicing Agreement shall be in
writing and shall be deemed conclusively to have been given if personally
delivered at or mailed by registered mail, postage prepaid, and return receipt
requested or transmitted by telex, telegraph or telecopier and confirmed by a
similar mailed writing, to:
(a) in the case of the PHH Parties,
PHH Mortgage Corporation
0000 Xxxxxxxxxx Xxxx,
Xx. Xxxxxx, Xxx Xxxxxx 00000
Attention: Vice President of Servicing
or such other address as may hereafter be furnished by the PHH Parties;
(b) in the case of the Assignee,
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished by the Assignee, and
(c) in the case of the Assignor,
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished by the Assignor.
12. Counterparts. This Assignment Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
instrument.
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13. Definitions. Any capitalized term used but not defined in this
Assignment Agreement has the meaning assigned thereto in the Sale and
Servicing Agreement.
14. Third Party Beneficiary. The parties agree that the Trustee is
intended to be, and shall have the rights of, a third party beneficiary of
this Assignment Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement the day and year first above written.
XXXXXXX XXXXX MORTGAGE
COMPANY
By: Xxxxxxx Sachs Real Estate Funding
Corp., its General Partner
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Managing Director
GS MORTGAGE SECURITIES CORP.
By: /s/ Xxxxxxxx Xxxx
------------------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
PHH MORTGAGE CORPORATION (formerly known as
CENDANT MORTGAGE CORPORATION)
By: /s/ Crissy Judge
--------------------------------------
Name: Crissy Judge
Title: Assistant Vice President
XXXXXX'X GATE RESIDENTIAL MORTGAGE TRUST
(formerly known as CENDANT RESIDENTIAL
MORTGAGE TRUST)
By: PHH Mortgage Corporation, as
Administrator
By: /s/ Crissy Judge
--------------------------------------
Name: Crissy Judge
Title: Assistant Vice President
PHH Step 1 AAR
EXHIBIT 1
Mortgage Loan Schedule
[On File with the Securities Administrator as provided by the Depositor]
1-1
EXHIBIT 2
Sale and Servicing Agreement
[See Attached]
2-1
Execution Copy
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AMENDED AND RESTATED
MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT
dated as of December 1, 2005
between
XXXXXXX SACHS MORTGAGE COMPANY, Purchaser
and
PHH MORTGAGE CORPORATION
(formerly known as CENDANT MORTGAGE CORPORATION) and
XXXXXX'X GATE RESIDENTIAL MORTGAGE TRUST
(formerly known as CENDANT RESIDENTIAL MORTGAGE TRUST)
Sellers
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.................................................................................2
ARTICLE II
SALE AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE
FILES; BOOKS AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Sale and Conveyance of Mortgage Loans........................................................18
Section 2.02 Possession of Mortgage Files.................................................................19
Section 2.03 Books and Records............................................................................20
Section 2.04 Defective Documents; Delivery of Mortgage Loan Documents.....................................20
Section 2.05 Transfer of Mortgage Loans...................................................................21
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REPURCHASE AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS
Section 3.01 Representations and Warranties of each Seller................................................23
Section 3.02 Representations and Warranties of the Servicer...............................................25
Section 3.03 Representations and Warranties as to Individual Mortgage Loans...............................26
Section 3.04 Repurchase and Substitution..................................................................38
Section 3.05 Certain Covenants of each Seller and the Servicer............................................40
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND CONDITIONS
PRECEDENT TO FUNDING
Section 4.01 Representations and Warranties...............................................................40
Section 4.02 Conditions Precedent to Closing..............................................................43
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01 PHH Mortgage to Act as Servicer; Servicing Standards; Additional Documents; Consent
of the Purchaser...........................................................................43
Section 5.02 Collection of Mortgage Loan Payments.........................................................46
Section 5.03 Reports for Specially Serviced Mortgage Loans and Foreclosure Sales..........................46
Section 5.04 Establishment of Collection Account; Deposits in Collection Account..........................46
Section 5.05 Permitted Withdrawals from the Collection Account............................................47
Section 5.06 Establishment of Escrow Accounts; Deposits in Escrow.........................................48
Section 5.07 Permitted Withdrawals From Escrow Accounts...................................................49
-i-
Section 5.08 Payment of Taxes, Insurance and Other Charges; Maintenance of Primary Insurance
Policies; Collections Thereunder...........................................................49
Section 5.09 Transfer of Accounts.........................................................................51
Section 5.10 Maintenance of Hazard Insurance..............................................................51
Section 5.11 Maintenance of Mortgage Impairment Insurance Policy..........................................52
Section 5.12 Fidelity Bond; Errors and Omissions Insurance................................................52
Section 5.13 Management of REO Properties.................................................................53
Section 5.14 Sale of Specially Serviced Mortgage Loans and REO Properties.................................55
Section 5.15 Realization Upon Specially Serviced Mortgage Loans and REO Properties........................55
Section 5.16 Investment of Funds in the Collection Account................................................57
Section 5.17 MERS.........................................................................................58
Section 5.18 Pledged Asset Mortgage Loans,................................................................58
ARTICLE VI
REPORTS; REMITTANCES; ADVANCES
Section 6.01 Remittances..................................................................................63
Section 6.02 Reporting....................................................................................63
Section 6.03 Monthly Advances by the Servicer.............................................................64
Section 6.04 Non-recoverable Advances.....................................................................64
Section 6.05 Itemization of Servicing Advances............................................................64
Section 6.06 Officer's Certificate........................................................................64
Section 6.07 Compliance with REMIC Provisions.............................................................64
ARTICLE VII
GENERAL SERVICING PROCEDURE
Section 7.01 Enforcement of Due-on-Sale Clauses, Assumption Agreements....................................65
Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files......................................65
Section 7.03 Servicing Compensation.......................................................................66
Section 7.04 Annual Statement as to Compliance............................................................66
Section 7.05 Annual Independent Certified Public Accountants' Servicing Report............................67
Section 7.06 Purchaser's Right to Examine Servicer Records................................................67
Section 7.07 Annual Certification.........................................................................67
ARTICLE VIII
REPORTS TO BE PREPARED BY THE SERVICER
Section 8.01 The Servicer's Reporting Requirements........................................................67
Section 8.02 Financial Statements.........................................................................68
ARTICLE IX
THE SELLERS
Section 9.01 Indemnification; Third Party Claims..........................................................68
Section 9.02 Merger or Consolidation of the Seller........................................................69
Section 9.03 Limitation on Liability of the Sellers and Others............................................69
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Section 9.04 Servicer Not to Resign.......................................................................70
ARTICLE X
DEFAULT
Section 10.01 Events of Default............................................................................70
ARTICLE XI
TERMINATION
Section 11.01 Term and Termination.........................................................................72
Section 11.02 Survival.....................................................................................72
ARTICLE XII
GENERAL PROVISIONS
Section 12.01 Successor to the Servicer....................................................................73
Section 12.02 Governing Law................................................................................73
Section 12.03 Notices......................................................................................74
Section 12.04 Severability of Provisions...................................................................74
Section 12.05 Schedules and Exhibits.......................................................................74
Section 12.06 General Interpretive Principles..............................................................74
Section 12.07 Waivers and Amendments, Noncontractual Remedies; Preservation of Remedies....................75
Section 12.08 Captions.....................................................................................75
Section 12.09 Counterparts; Effectiveness..................................................................75
Section 12.10 Entire Agreement; Amendment..................................................................75
Section 12.11 Further Assurances...........................................................................75
Section 12.12 Intention of the Seller......................................................................76
ARTICLE XIII
COMPLIANCE WITH REGULATION AB
Section 13.01 Intent of the Parties; Reasonableness........................................................76
Section 13.02 Additional Representations and Warranties of the Sellers and the Servicer....................77
Section 13.03 Information to Be Provided by each Seller or the Servicer....................................78
Section 13.04 Servicer Compliance Statement................................................................82
Section 13.05 Report on Assessment of Compliance and Attestation...........................................83
Section 13.06 Use of Subservicers and Subcontractors.......................................................84
Section 13.07 Indemnification; Remedies....................................................................85
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Schedules
A. Mortgage Loan Schedule
B. Content of Mortgage File
B-1 Collateral File
B-2 Credit Documents
C. PHH Guidelines and Restrictions
Exhibits
Exhibit 2.05 Form of Assignment, Assumption and Recognition Agreement
Exhibit 5.03(a) Report P-4DL
Exhibit 5.03(b) Report S-5L2
Exhibit 5.03(c) Form of Notice of Foreclosure
Exhibit 5.04-1 Form of Collection Account Certification
Exhibit 5.04-2 Form of Collection Account Letter Agreement
Exhibit 5.06-1 Form of Escrow Account Certification
Exhibit 5.06-2 Form of Escrow Account Letter Agreement
Exhibit 6.02(a) Report P-139 -- Monthly Statement of Mortgage Accounts
Exhibit 6.02(b) Report S-50Y -- Private Pool Detail Report
Exhibit 6.02(c) Report S-213 -- Summary of Curtailments Made Remittance
Report
Exhibit 6.02(d) Report S-214 -- Summary of Paid in Full Remittance Report
Exhibit 6.02(e) Report S-215 -- Consolidation of Remittance Report
Exhibit 6.02(f) Report T-62C -- Monthly Accounting Report
Exhibit 6.02(g) Report T-62E -- Liquidation Report
Exhibit 8.01 Report P-195 Delinquency Report
Exhibit 9 Form of Officer's Certificate
Exhibit 10 Form of Warranty Xxxx of Sale
Exhibit 11 [RESERVED]
Exhibit 12 Form of Annual Certification
Exhibit 13 Servicing Criteria to be Addressed in Assessment of
Compliance
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MORTGAGE LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT
This Amended and Restated Mortgage Loan Flow Purchase, Sale &
Servicing Agreement, dated as of December 1, 2005, is entered into between
Xxxxxxx Sachs Mortgage Company, as the Purchaser ("Purchaser"), PHH Mortgage
Corporation (formerly known as Cendant Mortgage Corporation) ("PHH Mortgage")
and Xxxxxx'x Gate Residential Mortgage Trust (formerly known as Cendant
Residential Mortgage Trust) (the "Trust," together with PHH Mortgage, the
"Sellers" and individually, each a "Seller"), as the Sellers.
PRELIMINARY STATEMENT
1. PHH Mortgage is engaged in the business, inter alia, of making
loans to individuals, the repayment of which is secured by a first lien
mortgage on such individuals' residences (each, a "Mortgage Loan"). The Trust
is engaged in the business of purchasing such Mortgage Loans from PHH Mortgage
and selling same to investors.
2. Purchaser is engaged in the business, inter alia, of purchasing
Mortgage Loans for its own account.
3. PHH Mortgage has established certain terms, conditions and loan
programs, as described in PHH Mortgage's Program and Underwriting Guidelines
(the "PHH Guide") and Purchaser is willing to purchase Mortgage Loans that
comply with the terms of such terms, conditions and loan programs. The
applicable provisions of the PHH Guide are attached hereto as Schedule C.
4. Purchaser and Sellers are parties to that certain Master Mortgage
Loan Purchase, Sale and Servicing Agreement, dated as of June 1, 2004, as
amended (the "Original Purchase Agreement"), pursuant to which PHH Mortgage
will make Mortgage Loans which meet the applicable provisions of the PHH
Guide, and Purchaser will, on a regular basis, purchase such Mortgage Loans
from PHH Mortgage or the Trust, as applicable, provided the parties agree on
the price, date and other conditions or considerations as set forth in the
Original Purchase Agreement.
5. At the present time, Purchaser and Sellers desire to amend the
Original Purchase Agreement to make certain modifications as set forth herein,
and upon the execution and delivery of this Agreement by the Purchaser and the
Sellers this Agreement shall supercede the Original Purchase Agreement and
supplant the Original Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the Purchaser and the Sellers agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement, the
following words and phrases shall have the following meaning specified in this
Article:
"Acceptance of Assignment and Assumption of Lease Agreement": The
specific agreement reating a first lien on and pledge of the Cooperative
Shares and the appurtenant Proprietary Lease securing a Cooperative Loan.
"Affiliate": When used with reference to a specified Person, any
Person that (i) directly or indirectly controls or is controlled by or is
under common control with the specified Person, (ii) is an officer of, partner
in or trustee of, or serves in a similar capacity with respect to, the
specified person or of which the specified Person is an officer, partner or
trustee, or with respect to which the specified Person serves in a similar
capacity, or (iii) directly or indirectly is the beneficial owner of 10% or
more of any class of equity securities of the specified Person or of which the
specified person is directly or indirectly the owner of 10% or more of any
class of equity securities.
"Agreement": This Amended and Restated Mortgage Loan Flow Purchase,
Sale & Servicing Agreement between the Purchaser and the Sellers.
"ALTA": The American Land Title Association.
"Appraised Value": With respect to any Mortgaged Property, the lesser
of: (i) the value thereof as determined by an appraisal or a PHH approved AVM
made for the originator of the Mortgage Loan at the time of origination of the
Mortgage Loan by an appraiser who met the minimum requirements of Xxxxxx Xxx
and Xxxxxxx Mac; or (ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan; provided
that, in the case of a Refinanced Mortgage Loan, such value of the Mortgaged
Property shall be based solely upon the value determined by an appraisal made
for the originator of such Refinanced Mortgage Loan at the time of origination
of such Refinanced Mortgage Loan by an appraiser who met the minimum
requirements of Xxxxxx Mae and Xxxxxxx Mac.
"ARM Loan": An "adjustable rate" Mortgage Loan, the Note Rate of
which is subject to periodic adjustment in accordance with the terms of the
Mortgage Note.
"Assignment": An individual assignment of a 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 or transfer of the Mortgage Loan to the Purchaser
or, in the case of a MERS Mortgage Loan, an electronic transmission to MERS,
identifying a transfer of ownership of the related Mortgage to the Purchaser
or its designee.
"Assignment of Proprietary Lease": With respect to a Cooperative
Loan, an assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Unit is located to reflect the
assignment of such Proprietary Lease.
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"Assignment of Recognition Agreement": With respect to a Cooperative
Loan, an assignment of the Recognition Agreement sufficient under the laws of
the jurisdiction wherein the related Cooperative Unit is located to reflect
the assignment of such Recognition Agreement.
"AVM": Shall mean an electronic appraisal document used in lieu of a
standard appraisal form in accordance with the PHH Guide.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (11 U.S.C.
xx.xx. 101-1330), as amended, modified, or supplemented from time to time, and
any successor statute, and all rules and regulations issued or promulgated in
connection therewith.
"Business Day": Any day other than (i) a Saturday or Sunday, or (ii)
a day on which the Federal Reserve is closed.
"Code": The Internal Revenue Code of 1986, as amended or any
successor statute thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto.
"Collection Account": The separate trust account or accounts created
and maintained pursuant to Section 5.04 which shall be entitled "PHH Mortgage
Corporation, as servicer and custodian for the Purchaser of Mortgage Loans
under the Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as of
June 1, 2004." The Collection Account shall be an Eligible Account.
"Commission": The United States Securities and Exchange Commission.
"Condemnation Proceeds": All awards or settlements in respect of a
taking of an entire Mortgaged Property or a part thereof by exercise of the
power of eminent domain or condemnation to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
File.
"Consent": A document executed by the Cooperative Corporation (i)
consenting to the sale of the Cooperative Unit to the Mortgagor and (ii)
certifying that all maintenance charges relating to the Cooperative Unit have
been paid.
"Control Agreement": With respect to each Pledged Asset Mortgage
Loan, the Pledged Collateral Account Control Agreement between the guarantor
or mortgagor, as applicable, and the related Pledged Asset Servicer, pursuant
to which the guarantor or mortgagor, as applicable, has granted security
interest in a Securities Account.
"Cooperative Corporation": With respect to any Cooperative Loan, the
cooperative apartment corporation that holds legal title to the related
Cooperative Project and grants occupancy rights to units therein to
stockholders through Proprietary Leases or similar arrangements.
"Cooperative Lien Search": A search for (a) federal tax liens,
mechanics' liens, lis pendens, judgments of record or otherwise against (i)
the Cooperative Corporation and (ii) the
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seller of the Cooperative Unit, (b) filings of Financing Statements and (c)
the deed of the Cooperative Project into the Cooperative Corporation.
"Cooperative Loan": A Mortgage Loan that is secured by a first lien
on and a perfected security interest in Cooperative Shares and the related
Proprietary Lease granting exclusive rights to occupy the related Cooperative
Unit in the building owned by the related Cooperative Corporation.
"Cooperative Project": With respect to any Cooperative Loan, all real
property and improvements thereto and rights therein and thereto owned by a
Cooperative Corporation including without limitation the land, separate
dwelling units and all common elements.
"Cooperative Shares": With respect to any Cooperative Loan, the
shares of stock issued by a Cooperative Corporation and allocated to a
Cooperative Unit and represented by a stock certificates.
"Cooperative Unit": With respect to any Cooperative Loan, a specific
unit in a Cooperative Project.
"Covered Loan": A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
"Credit Documents": Those documents, comprising part of the Mortgage
File, required of the Mortgagor, as described in Section 2 (Specific Loan
Program Guidelines) of the PHH Guide. The Credit Documents are specified on
Schedule B-2 hereto.
"Cut-off Date": The first day of the month in which the respective
Funding Date occurs.
"Defective Mortgage Loan": As defined in Section 3.04.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced
with a Qualified Substitute Mortgage Loan.
"Depositor": The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
"Determination Date": The 16th day of each calendar month, commencing
on the 16th day of the month following the Funding Date, or, if such 16th day
is not a Business Day, the Business Day immediately preceding such 16th day.
"Due Date": With respect to any Mortgage Loan, the day of the month
on which each Monthly Payment is due thereon, exclusive of any grace period.
"Due Period": With respect to each Remittance Date, the period
commencing on the second day of the month immediately preceding the month of
such Remittance Date and ending on the first day of the month in which such
Remittance Date occurs.
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"Eligible Account": One or more accounts (i) that are maintained with
a depository institution the long-term unsecured debt obligations of which
have been rated by each Rating Agency in one of its two highest rating
categories at the time of any deposit therein, (ii) that are trust accounts
with any depository institution held by the depository institution in its
capacity as a corporate trustee the long-term unsecured debt obligations of
which have been rated by each Rating Agency in one of its two highest rating
categories at the time of any deposit therein, or (iii) maintained with a
depository institution the long-term unsecured debt obligations of which have
been rated by each Rating Agency in one of its two highest rating categories
at the time of any deposit therein and the deposits in which are insured by
the FDIC (to the limits established by the FDIC) and the uninsured deposits in
which are otherwise secured such that the Purchaser has a claim with respect
to the funds in such accounts or a perfected first security interest against
any collateral securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such accounts
are maintained. In the event that the Mortgage Loans are subject to a
securitization, the Servicer agrees that the definition of Eligible Account
shall satisfy the rating requirements established by the rating agency or
rating agencies that rate any of the securities issued as part of such
securitization.
"Environmental Assessment": A "Phase I" environmental assessment of a
Mortgaged Property prepared by an Independent Person who regularly conducts
environmental assessments and who has any necessary license(s) required by
applicable law and has five years experience in conducting environmental
assessments.
"Environmental Conditions Precedent to Foreclosure": As defined in
Section 5.15.
"Environmental Laws": All federal, state, and local statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants or industrial, toxic or
hazardous substances or wastes into the environment, including ambient air,
surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or industrial, toxic or
hazardous substances or wastes or the cleanup or other remediation thereof.
"Escrow Account": The separate trust account or accounts created and
maintained pursuant to Section 5.06 which shall be entitled "PHH Mortgage
Corporation, as servicer and custodian for the Purchaser under the Mortgage
Loan Flow Purchase, Sale & Servicing Agreement, dated as of December 1, 2005
(as amended), and various mortgagors." The Escrow Account shall be an Eligible
Account.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.
"Estoppel Letter": A document executed by the Cooperative Corporation
certifying, with respect to a Cooperative Unit, (i) the appurtenant
Proprietary Lease will be in full force and effect as of the date of issuance
thereof, (ii) the related Stock Certificate was
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registered in the Mortgagor's name and the Cooperative Corporation has not
been notified of any lien upon, pledge of, levy of execution on or disposition
of such Stock Certificate, and (iii) the Mortgagor is not in default under the
appurtenant Proprietary Lease and all charges due the Cooperative Corporation
have been paid.
"Event of Default": Any one of the conditions or circumstances
enumerated in Section 10.01.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Fair Credit Reporting Act": The Fair Credit Reporting Act of 1970,
as amended.
"Xxxxxx Xxx": Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association or any successor organization.
"Xxxxxx Mae Guide": The Xxxxxx Xxx Selling Guide and the Servicing
Guide, collectively, in effect on and after the Funding Date.
"FDIC": The Federal Deposit Insurance Corporation or any successor
organization.
"Fidelity Bond": A fidelity bond to be maintained by the Servicer
pursuant to Section 5.12.
"Financing Statement": A financing statement in the form of a UCC-1
filed pursuant to the Uniform Commercial Code to perfect a security interest
in the Cooperative Shares and Pledge Instruments.
"Financing Statement Change": A financing statement in the form of a
UCC-3 filed to continue, terminate, release, assign or amend an existing
Financing Statement.
"Xxxxxxx Mac": Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation or any successor organization.
"Xxxxxxx Mac Servicing Guide": The Xxxxxxx Xxx Xxxxxxx' and
Servicers' Guide in effect on and after the Funding Date.
"Funding Date": Each date that Purchaser purchases Mortgage Loans
from the Sellers hereunder.
"Gross Margin": With respect to each ARM Loan, the fixed percentage
added to the Index on each Rate Adjustment Date, as specified in each related
Mortgage Note and listed in the Mortgage Loan Schedule.
"Home Loan": A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
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"Independent": With respect to any specified Person, such Person who:
(i) does not have any direct financial interest or any material indirect
financial interest in the applicable Mortgagor, the Sellers, the Purchaser, or
their Affiliates; and (b) is not connected with the applicable Mortgagor, the
Sellers, the Purchaser, or their respective Affiliates as an officer,
employee, promoter, underwriter, trustee, member, partner, shareholder,
director, or Person performing similar functions.
"Index": With respect to each ARM Loan, on each Rate Adjustment Date,
the applicable rate index set forth on the Mortgage Loan Schedule, which shall
be an index described on such Mortgage Loan Schedule.
"Insolvency Proceeding": With respect to any Person: (i) any case,
action, or proceeding with respect to such Person before any court or other
governmental authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up, or relief of debtors; or
(ii) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other, similar arrangement in respect
of the creditors generally of such Person or any substantial portion of such
Person's creditors; in any case undertaken under federal, state or foreign
law, including the Bankruptcy Code.
"Insurance Proceeds": Proceeds of any Primary Insurance Policy, LPMI
Policy, title policy, hazard policy or other insurance policy covering a
Mortgage Loan, if any, to the extent such proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the Mortgagor
in accordance with the procedures that the Servicer would follow in servicing
mortgage loans held for its own or its Affiliates' account or managed by it
for third-party institutional investors.
"Legal Documents": Those documents, comprising part of the Mortgage
File, set forth in Schedule B-1 of this Agreement.
"Liquidation Proceeds": Amounts, other than Insurance Proceeds or
Condemnation Proceeds, received by the Servicer in connection with the
liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than amounts received following the acquisition of an
REO Property in accordance with the provisions hereof.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan,
the original principal balance of such Mortgage Loan divided by the lesser of
the Appraised Value of the related Mortgaged Property or the purchase price.
The Loan-to-Value Ratio of any Pledged Asset Mortgage Loan shall be calculated
by reducing the principal balance of such Pledged Asset Mortgage Loan by the
amount of the Original Pledged Asset Requirement with respect to such Mortgage
Loan. This is referred to in the PHH Guide as the effective loan-to-value
ratio.
"LPMI Fee": With respect to an LPMI Loan, the LPMI Fee Rate for that
LPMI Loan times the stated principal balance of such LPMI Loan as of the
applicable Cut-off Date.
"LPMI Fee Rate": The portion of the Mortgage Interest Rate relating
to an LPMI Loan, which is set forth on the related Mortgage Loan Schedule, to
be retained by the Servicer to pay the premium due on the Policy with respect
to such LPMI Loan.
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"LPMI Loan": Any mortgage loan with respect to which the Servicer is
responsible for paying the premium due on the related LPMI Policy with the
proceeds generated by the LPMI Fee relating to such Mortgage Loan, as set
forth on the related Mortgage Loan Schedule.
"LPMI Policy": A policy of mortgage guaranty insurance issued by an
insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located.
"MAI Appraiser": With respect to any real property, a member of the
American Institute of Real Estate Appraisers with a minimum of 5 years of
experience appraising real property of a type similar to the real property
being appraised and located in the same geographical area as the real property
being appraised.
"Maximum Rate": With respect to each ARM Loan, the rate per annum set
forth in the related Mortgage Note as the maximum Note Rate thereunder. The
Maximum Rate as to each ARM Loan is set forth on the related Mortgage Loan
Schedule.
"MERS": Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
"MERS Eligible Mortgage Loan": Any Mortgage Loan that under
applicable law and investor requirements is recordable in the name of MERS in
the jurisdiction in which the related Mortgaged Property is located.
"MERS Mortgage Loan": Any Mortgage Loan as to which the related
Mortgage, or an Assignment, has been recorded in the name of MERS, as agent
for the holder from time to time of the Mortgage Note.
"Minimum Rate": With respect to each ARM Loan, the rate per annum set
forth in the related Mortgage Note as the minimum Note Rate thereunder. The
Minimum Rate as to each ARM Loan is set forth on the related Mortgage Loan
Schedule.
"Monthly Advance": The aggregate amount of the advances made by the
Servicer on any Remittance Date pursuant to and as more fully described in
Section 6.03.
"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.
"Monthly Period": Initially, the period from the Funding Date through
to and including the first Record Date during the term hereof, and,
thereafter, the period commencing on the day after each Record Date during the
term hereof and ending on the next succeeding Record Date during the term
hereof (or, if earlier, the date on which this Agreement terminates).
"Mortgage": The mortgage, deed of trust or other instrument securing
a Mortgage Note, which creates a first lien on either (i) with respect to a
Mortgage Loan other than a Cooperative Loan, an unsubordinated estate in fee
simple in real property or (ii) with respect to a Cooperative Loan, the
Proprietary Lease and related Cooperative Shares, which in either case secures
the Mortgage Note.
-8-
"Mortgage File": With respect to a particular Mortgage Loan, those
origination and servicing documents, escrow documents, and other documents as
are specified on Schedule B-1 and B-2 to this Agreement and any additional
documents required to be added to the Mortgage File pursuant to the related
Purchase Price and Terms Letter.
"Mortgage Loan": Each individual mortgage loan or Cooperative Loan
(including all documents included in the Mortgage File evidencing the same,
all Monthly Payments, Principal Prepayments, Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds, REO Disposition Proceeds and other proceeds
relating thereto, and any and all rights, benefits, proceeds and obligations
arising therefrom or in connection therewith) which is the subject of this
Agreement and the related Purchase Price and Terms Letter. The Mortgage Loans
subject to this Agreement shall be identified on Mortgage Loan Schedules
prepared in connection with each Funding Date.
"Mortgage Loan Schedule": The list of Mortgage Loans identified on
each Funding Date that sets forth the information with respect to each
Mortgage Loan that is specified on Schedule A hereto (as amended from time to
time to reflect the addition of any Qualified Substitute Mortgage Loans). A
Mortgage Loan Schedule will be prepared for each Funding Date.
"Mortgage Note": The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
"Mortgaged Property": With respect to a Mortgage Loan, the underlying
real property securing repayment of a Mortgage Note, consisting of a fee
simple estate.
"Mortgagor": The obligor on a Mortgage Note.
"Negative Amortization": That portion of interest accrued at the Note
Rate in any month which exceeds the Monthly Payment on the related Mortgage
Loan for such month and which, pursuant to the terms of the Mortgage Note, is
added to the principal balance of the Mortgage Loan.
"Non-recoverable Advance": As of any date of determination, any
Monthly Advance or Servicing Advance previously made or any Monthly Advance or
Servicing Advance proposed to be made in respect of a Mortgage Loan which, in
the good faith judgment of the Servicer and in accordance with the servicing
standard set forth in Section 5.01, will not or, in the case of a proposed
advance, would not be ultimately recoverable pursuant to Section 5.05(3) or
(4) hereof. The determination by the Servicer that it has made a
Non-recoverable Advance or that any proposed advance would constitute a
Non-recoverable Advance shall be evidenced by an Officer's Certificate
satisfying the requirements of Section 6.04 hereof and delivered to the
Purchaser on or before the Determination Date in any month.
"Note Rate": With respect to any Mortgage Loan at any time any
determination thereof is to be made, the annual rate at which interest accrues
thereon.
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"Offering Materials": All documents, tapes, or other materials
relating to the Mortgage Loans provided by Seller to Purchaser prior to
Purchaser submitting its bid to purchase the Mortgage Loans.
"Officers' Certificate": A certificate signed by (i) the President or
a Vice President and (ii) the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Servicer and Seller, and
delivered by the Servicer and Seller to the Purchaser as required by this
Agreement.
"Original Pledged Asset Requirement": With respect to any Pledged
Asset Mortgage Loan, an amount equal to the Pledged Assets required at the
time of the origination of such Pledged Asset Mortgage Loan. Even though for
other purposes the Original Pledged Asset Requirement may actually exceed
thirty percent (30%) of the original principal balance of a Pledged Asset
Mortgage Loan, solely for purposes of the Required Surety Payment, the
Original Pledged Asset Requirement for a Pledged Asset Mortgage Loan will be
deemed not to exceed thirty percent (30%) of its original principal balance.
"Payment Adjustment Date": The date on which Monthly Payments shall
be adjusted. Payment Adjustment Date shall occur on the date which is eleven
months from the first payment date for the Mortgage Loan, unless otherwise
specified in the Mortgage Note, and on each anniversary of such first Payment
Adjustment Date.
"Payoff": With respect to any Mortgage Loan, any payment or recovery
received in advance of the last scheduled Due Date of such Mortgage Loan,
which payment or recovery consists of principal in an amount equal to the
outstanding principal balance of such Mortgage Loan, all accrued and unpaid
prepayment penalties, premiums, and/or interest with respect thereto, and all
other unpaid sums due with respect to such Mortgage Loan.
"Periodic Rate Cap": With respect to each ARM Loan, the provision in
each Mortgage Note that limits permissible increases and decreases in the Note
Rate on any Rate Adjustment Date to not more than one percentage point with
respect to each ARM Loan that is subject to semi-annual adjustment or two
percentage points with respect to each ARM Loan that is subject to annual
adjustment.
"Permitted Investments": Investments that mature, unless payable on
demand, not later than the Business Day preceding the related Remittance Date;
provided that such investments shall only consist of the following:
(i) direct obligations of, or obligations fully guaranteed as to
principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(ii) repurchase obligations (the collateral for which is held by a
third party) with respect to any security described in clause (i) above,
provided that the long-term unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated by each Rating
Agency in one of its two highest rating categories;
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(iii) certificates of deposit, time deposits and bankers'
acceptances of any bank or trust company incorporated under the laws of
the United States or any state, provided that the long-term unsecured
debt obligations of such bank or trust company (or, in the case of the
principal depository institution of a depository institution holding
company, the long-term unsecured debt obligations of the depository
institution holding company) at the date of acquisition thereof have
been rated by each Rating Agency in one of its two highest rating
categories;
(iv) commercial paper (having original maturities of not more than
365 days) of any corporation incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been
rated by each Rating Agency in its highest rating category; and
(v) any other demand, money market or time deposit account or
obligation, or interest-bearing or other security or investment,
acceptable to the Purchaser (such acceptance evidenced in writing);
provided further that "Permitted Investments" shall not include any instrument
described hereunder which evidences either the right to receive (a) only
interest with respect to the obligations underlying such instrument or (b)
both principal and interest payments derived from obligations underlying such
instrument and the interest and principal payments with respect to such
instrument provide a yield to maturity at par greater than 120% of the yield
to maturity at par of the underlying obligations.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"PHH Guide": As defined in paragraph 3 of the Preliminary Statement
to this Agreement.
"Pledge Agreements": Each Control Agreement and Pledged Asset
Agreement for each Pledged Asset Mortgage Loan.
"Pledged Assets": With respect to any Pledged Asset Mortgage Loan,
the related Securities Account and the financial assets held therein subject
to a security interest pursuant to the related Pledged Asset Agreement.
"Pledged Asset Agreement": With respect to each Pledged Asset
Mortgage Loan, the Pledge Agreement for Securities Account between the related
mortgagor and the related Pledged Asset Servicer pursuant to which such
mortgagor granted a security interest in the related securities and other
financial assets held therein.
"Pledged Asset Mortgage Loan": Each Mortgage Loan as to which Pledged
Assets, in the form of a security interest in the Securities Account and the
financial assets held therein and having a value, as of the date of
origination of such Mortgage Loan, of at least equal to the related Original
Pledged Asset Requirement, were required to be provided at the closing
thereof, which is subject to the terms of this Agreement from time to time.
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"Pledged Asset Servicer": The entity responsible for administering
and servicing the Pledged Assets with respect to a Pledged Asset Mortgage
Loan, as identified in the Purchase Price and Terms Letter.
"Pledged Asset Servicing Agreement": With respect to each Pledged
Asset Mortgage Loan, the Agreement between the related Pledged Asset Servicer
and PHH, including any exhibits thereto, pursuant to which such Pledged Asset
Servicer shall service and administer the related Pledged Assets.
"Pledge Instruments": With respect to each Cooperative Loan, the
Stock Power, the Assignment of the Proprietary Lease, the Assignment of the
Mortgage Note and the Acceptance of Assignment and Assumption of Lease
Agreement.
"Predatory Mortgage Loan": A Mortgage Loan classified as (a) a "high
cost" loan under the Home Ownership and Equity Protection Act of 1994, (b) a
"high cost home," "threshold," "covered," (excluding New Jersey "Covered Home
Loans" as that term is defined in clause (1) of the definition of that term in
the New Jersey Home Ownership Security Act of 2002), "high risk home,"
"predatory" or similar loan under any other applicable state, federal or local
law (or a similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or
(c) a Mortgage Loan categorized as High Cost pursuant to Appendix E of
Standard & Poor's Glossary. The parties agree that this definition shall apply
to any law regardless of whether such law is presently, or in the future
becomes, the subject of judicial review or litigation.
"Prepaid Monthly Payment": Any Monthly Payment received prior to its
scheduled Due Date and which is intended to be applied to a Mortgage Loan on
its scheduled Due Date.
"Prepayment Period": With respect to each Remittance Date, shall mean
the calendar month immediately preceding the month in which such Remittance
Date occurs.
"Primary Insurance Policy": Each primary policy of mortgage insurance
in effect with respect to a Mortgage Loan and as so indicated on the Mortgage
Loan Schedule, or any replacement policy therefor obtained by the Servicer
pursuant to Section 5.08.
"Principal Prepayment": Any payment or other recovery of principal on
a Mortgage Loan (including a Payoff), other than a Monthly Payment or a
Prepaid Monthly Payment which is received in advance of its scheduled Due
Date, including any prepayment penalty or premium thereon, which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment
and which is intended to reduce the principal balance of the Mortgage Loan.
"Proprietary Lease": The lease on a Cooperative Unit evidencing the
possessory interest of the owner of the Cooperative Shares in such Cooperative
Unit.
"Purchase Price and Terms Letter": With respect to any pool of
Mortgage Loans purchased and sold on any Funding Date, the letter agreement
between the Purchaser and Seller
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(including any exhibits, schedules and attachments thereto), setting forth the
terms and conditions of such transaction and describing the Mortgage Loans to
be purchased by the Purchaser on such Funding Date. A Purchase Price and Terms
Letter may relate to more than one pool of Mortgage Loans to be purchased on
one or more Funding Dates hereunder.
"Purchaser": Xxxxxxx Xxxxx Mortgage Company, or its successor in
interest or any successor under this Agreement appointed as herein provided.
"Purchase Price": As to each Mortgage Loan to be sold hereunder, the
price set forth in the Mortgage Loan Schedule and the related Purchase Price
and Terms Letter.
"Purchaser's Account": The account of the Purchaser at a bank or
other entity most recently designated in a written notice by the Purchaser to
the Sellers as the "Purchaser's Account."
"Qualified Correspondent": Any Person from which the Sellers
purchased Mortgage Loans, provided that the following conditions are
satisfied: (i) such Mortgage Loans were originated pursuant to an agreement
between the Sellers and such Person that contemplated that such Person would
underwrite mortgage loans from time to time, for sale to the Sellers, in
accordance with underwriting guidelines designated by the Sellers ("Designated
Guidelines") or guidelines that do not vary materially from such Designated
Guidelines; (ii) such Mortgage Loans were in fact underwritten as described in
clause (i) above and were acquired by the Company within 180 days after
origination; (iii) either (x) the Designated Guidelines were, at the time such
Mortgage Loans were originated, used by the Sellers in origination of mortgage
loans of the same type as the Mortgage Loans for the Sellers' own accounts or
(y) the Designated Guidelines were, at the time such Mortgage Loans were
underwritten, designated by the Sellers on a consistent basis for use by
lenders in originating mortgage loans to be purchased by the Sellers; and (iv)
the Sellers employed, at the time such Mortgage Loans were acquired by the
Sellers, pre-purchase or post-purchase quality assurance procedures (which may
involve, among other things, review of a sample of mortgage loans purchased
during a particular time period or through particular channels) designed to
ensure that Persons from which it purchased mortgage loans properly applied
the underwriting criteria designated by the Sellers.
"Qualified Mortgage Insurer": American Guaranty Corporation,
Commonwealth Mortgage Assurance Company, General Electric Mortgage Insurance
Companies, Mortgage Guaranty Insurance Corporation, PMI Mortgage Insurance
Company, Republic Mortgage Insurance Company or United Guaranty Residential
Insurance Corporation.
"Qualified Substitute Mortgage Loan": A Mortgage Loan substituted by
a Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due and received in the month of substitution (or in
the case of a substitution of more than one mortgage loan for a Deleted
Mortgage Loan, an aggregate principal balance), not in excess of the Unpaid
Principal Balance of the Deleted Mortgage Loan and not less than ninety
percent (90%) of the Unpaid Principal Balance of the Deleted Mortgage Loan
(the amount of any shortfall to be distributed by the applicable Seller to the
Purchaser in the month of substitution), (ii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage
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Loan, (iii) have a Note Rate not less than (and not more than one percentage
point greater than) the Note Rate of the Deleted Mortgage Loan, (iv) with
respect to each ARM Loan, have a Minimum Rate not less than that of the
Deleted Mortgage Loan, (v) with respect to each ARM Loan, have a Maximum Rate
not less than that of the Deleted Mortgage Loan and not more than two (2)
percentage points above that of the Deleted Mortgage Loan, (vi) with respect
to each Adjustable Rate Mortgage Loan, have a Gross Margin not less than that
of the Deleted Mortgage Loan, (vii) with respect to each ARM Loan, have a
Periodic Rate Cap equal to that of the Deleted Mortgage Loan, (viii) have a
Loan-to-Value Ratio at the time of substitution equal to or less than the
Loan-to-Value Ratio of the Deleted Mortgage Loan at the time of substitution,
(ix) with respect to each ARM Loan, have the same Rate Adjustment Date as that
of the Deleted Mortgage Loan, (x) with respect to each ARM Loan, have an Index
as provided herein for all ARM Loans subject to this Agreement, (xi) comply as
of the date of substitution with each representation and warranty set forth in
Sections 3.01, 3.02 and 3.03, (xii) be in the same credit grade category as
the Deleted Mortgage Loan and (xiii) have the same prepayment penalty term.
"Rate Adjustment Date": With respect to each ARM Loan, the date on
which the Note Rate adjusts.
"Rating Agency": Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Xxxxx'x Investors Service, Inc., and Fitch, Inc.
"Recognition Agreement": An agreement among a Cooperative
Corporation, a lender and a Mortgagor with respect to a Cooperative Loan
whereby such parties (i) acknowledge that such lender may make, or intends to
make, such Cooperative Loan, and (ii) make certain agreements with respect to
such Cooperative Loan.
"Reconstitution": Any Securitization Transaction or Whole Loan
Transfer.
"Record Date": The close of business of the last Business Day of the
month immediately preceding the month of the related Remittance Date.
"Refinanced Mortgage Loan": A Mortgage Loan that was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or part to satisfy
an existing mortgage.
"Regulation AB": Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code or any similar tax vehicle providing for
the pooling of assets (such as a Financial Asset Security Investment Trust).
"REMIC Provisions": Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of
Chapter 1, Subtitle A
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of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
"Remittance Date": The 18th day of each calendar month, commencing on
the 18th day of the month following the Funding Date, or, if such 18th day is
not a Business Day, then the Business Day immediately preceding such 18th day.
"Remittance Rate": With respect to each Mortgage Loan, the related
Note Rate minus the Servicing Fee Rate.
"REO Disposition": The final sale by the Servicer of any REO
Property.
"REO Disposition Proceeds": All amounts received with respect to any
REO Disposition.
"REO Property": A Mortgaged Property acquired by the Servicer on
behalf of the Purchaser as described in Section 5.13.
"Repurchase Price": As to (a) any Defective Mortgage Loan required to
be repurchased hereunder with respect to which a breach occurred or (b) any
Mortgage Loan required to be repurchased pursuant to Section 3.04 and/or
Section 7.02, an amount equal to the Unpaid Principal Balance of such Mortgage
Loan at the time of repurchase; plus (2) interest on such Mortgage Loan at the
applicable Note Rate from the last date through which interest has been paid
and distributed to the Purchaser hereunder to the date of repurchase; minus
(3) any amounts received in respect of such Defective Mortgage Loan which are
being held in the Collection Account for future remittance.
"Required Surety Payment": With respect to any defaulted Pledged
Asset Mortgage Loan for which a claim is payable under the related Surety Bond
under the procedures referred to herein, the lesser of (i) the principal
portion of the realized loss with respect to such Mortgage Loan and (ii) the
excess, if any, of (a) the amount of Pledged Assets required at origination
with respect to such Mortgage Loan (but not more than 30% of the original
principal balance of such Mortgage Loan) over (b) the net proceeds realized by
the related Pledged Asset Servicer from the related Pledged Assets.
"Scheduled Principal Balance": With respect to any Mortgage Loan, (i)
the outstanding principal balance as of the Funding Date after application of
principal payments due on or before such date whether or not received, minus
(ii) all amounts previously remitted to the Purchaser with respect to such
Mortgage Loan representing (a) payments or other recoveries of principal, or
(b) advances of principal made pursuant to Section 6.03.
"Securities Act": The Securities Act of 1933, as amended.
"Securitization Transaction". Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or
(2) an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more
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portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
"Seller Information": As defined in Section 13.07(a).
"Sellers": PHH Mortgage Corporation, a New Jersey corporation and
Xxxxxx'x Gate Residential Mortgage Trust (formerly known as Cendant
Residential Mortgage Trust), a Delaware business trust, or their successors in
interest or any successor under this Agreement appointed as herein provided.
"Servicer": PHH Mortgage Corporation, a New Jersey corporation.
"Servicer's Mortgage File": The documents pertaining to a particular
Mortgage Loan which are specified on Exhibit B-1 and B-2 attached hereto and
any additional documents required to be included or added to the "Servicer's
Mortgage File" pursuant to this Agreement.
"Servicing Advances": All "out of pocket" costs and expenses that are
customary, reasonable and necessary which are incurred by the Servicer in the
performance of its servicing obligations hereunder, including (without
duplication) (i) reasonable attorneys' fees and (ii) the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the
servicing, management and liquidation of any Specially Serviced Mortgaged
Loans and/or any REO Property, and (d) compliance with the Servicer's
obligations under Section 5.08.
"Servicing Criteria": The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
"Servicing Event": Any of the following events with respect to any
Mortgage Loan: (i) any Monthly Payment being more than 60 days delinquent;
(ii) any filing of an Insolvency Proceeding by or on behalf of the related
Mortgagor, any consent by or on behalf of the related Mortgagor to the filing
of an Insolvency Proceeding against such Mortgagor, or any admission by or on
behalf of such Mortgagor of its inability to pay such Person's debts generally
as the same become due; (iii) any filing of an Insolvency Proceeding against
the related Mortgagor that remains undismissed or unstayed for a period of 60
days after the filing thereof; (iv) any issuance of any attachment or
execution against, or any appointment of a conservator, receiver or liquidator
with respect to, all or substantially all of the assets of the related
Mortgagor or with respect to any Mortgaged Property; (v) any receipt by the
Servicer of notice of the foreclosure or proposed foreclosure of any other
lien on the related Mortgaged Property; (vi) any proposal of a material
modification (as reasonably determined by the Seller) to such Mortgage Loan
due to a default or imminent default under such Mortgage Loan; or (vii) in the
reasonable judgment of the Servicer, the occurrence, or likely occurrence
within 60 days, of a payment default with respect to such Mortgage Loan that
is likely to remain uncured by the related Mortgagor within 60 days
thereafter.
"Servicing Fee": The annual fee, payable monthly to the Servicer out
of the interest portion of the Monthly Payment actually received on each
Mortgage Loan. The Servicing Fee with respect to each Mortgage Loan for any
calendar month (or a portion thereof)
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shall be 1/12 of the product of (i) the Scheduled Principal Balance of the
Mortgage Loan and (ii) the Servicing Fee Rate applicable to such Mortgage
Loan.
"Servicing Fee Rate": Unless otherwise specified on the Mortgage Loan
Schedule, (i) with respect to any ARM Loan, 0.375% per annum; provided that,
prior to the first Rate Adjustment Date with respect to any such Mortgage
Loan, such rate may be, at the Servicer's option, not less than 0.25% per
annum; and (ii) with respect to any Mortgage Loan other than an ARM Loan,
0.25% per annum.
"Servicing File": As defined in Section 2.02.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a written list of servicing officers furnished by the Servicer
to the Purchaser upon request therefor by the Purchaser, as such list may from
time to time be amended.
"Specially Serviced Mortgage Loan": A Mortgage Loan as to which a
Servicing Event has occurred and is continuing.
"Standard & Poor's Glossary": The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
"Static Pool Information": Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
"Stock Certificate": With respect to a Cooperative Loan, the
certificates evidencing ownership of the Cooperative Shares issued by the
Cooperative Corporation.
"Stock Power": With respect to a Cooperative Loan, an assignment of
the Stock Certificate or an assignment of the Cooperative Shares issued by the
Cooperative Corporation.
"Subcontractor": Any vendor, subcontractor or other Person that is
not responsible for the overall servicing (as "servicing" is commonly
understood by participants in the mortgage-backed securities market) of
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to Mortgage Loans under the direction or
authority of the Servicer or a Subservicer.
"Subservicer": Any Person that services Mortgage Loans on behalf of
the Servicer or any Subservicer and is responsible for the performance
(whether directly or through Subservicers or Subcontractors) of a substantial
portion of the material servicing functions required to be performed by the
Servicer under this Agreement or any Reconstitution Agreement that are
identified in Item 1122(d) of Regulation AB.
"Surety Bond": With respect to each Pledged Asset Mortgage Loan, the
surety bond issued by the related Surety Bond Issuer covering such Pledged
Asset Mortgage Loan.
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"Surety Bond Issuer": With respect to each Pledged Asset Mortgage
Loan, the surety bond issuer for the related Surety Bond covering such Pledged
Asset Mortgage Loan, as identified in the Purchase Price and Terms Letter.
"Third-Party Originator": Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Sellers.
"Transaction Servicer": As defined in Section 13.03(c).
"Uniform Commercial Code": The Uniform Commercial Code as in effect
on the date hereof in the State of New York; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York,
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection or effect of perfection or non-perfection.
"Unpaid Principal Balance": With respect to any Mortgage Loan, at any
time, the actual outstanding principal balance then payable by the Mortgagor
under the terms of the related Mortgage Note including any cumulative Negative
Amortization.
"Warranty Xxxx of Sale": A warranty xxxx of sale with respect to the
Mortgage Loans purchased on a Funding Date in the form annexed hereto as
Exhibit 10.
"Whole Loan Transfer": Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
ARTICLE II
SALE AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Sale and Conveyance of Mortgage Loans. Seller agrees to
sell and Purchaser agrees to purchase, from time to time, those certain
Mortgage Loans identified in a Mortgage Loan Schedule, at the price and on the
terms set forth herein and in the related Purchase Price and Terms Letter.
Purchaser, on any Funding Date, shall be obligated to purchase only such
Mortgage Loans set forth in the applicable Mortgage Loan Schedule, subject to
the terms and conditions of this Agreement and the related Purchase Price and
Terms Letter.
The closing shall, at Purchaser's option be either: by telephone,
confirmed by letter or wire as the parties shall agree; or conducted in person
at such place, as the parties shall agree. On the Funding Date and subject to
the terms and conditions of this Agreement, each Seller will sell, transfer,
assign, set over and convey to the Purchaser, without recourse except as set
forth in this Agreement, and the Purchaser will purchase, all of the right,
title and interest of the applicable Seller in and to the Mortgage Loans being
conveyed by it hereunder, as identified on the Mortgage Loan Schedule.
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Examination of the Mortgage Files may be made by Purchaser or its
designee as follows. No later than 5 Business Days prior to the Funding Date,
Seller will deliver to Purchaser or its custodian, Legal Documents required
pursuant to Schedule B-1. Upon Purchaser's request, Seller shall make the
Credit Documents available to Purchaser for review, at Seller's place of
business and during reasonable business hours. If Purchaser makes such
examination prior to the Funding Date and identifies any Mortgage Loans that
do not conform to the PHH Guide, such Mortgage Loans will be deleted from the
Mortgage Loan Schedule at Purchaser's discretion. Purchaser may, at its option
and without notice to Seller, purchase all or part of the Mortgage Loans
without conducting any partial or complete examination. The fact that
Purchaser has conducted or has failed to conduct any partial or complete
examination of the Mortgage Loan files shall not affect Purchaser's rights to
demand repurchase, substitution or other relief as provided herein.
On the Funding Date and in accordance with the terms herein,
Purchaser will pay to Seller, by wire transfer of immediately available funds,
the Purchase Price, together with interest, if any, accrued from the Cut-off
Date through the day immediately preceding the Funding Date, according to the
instructions to be provided, respectively, by PHH Mortgage and the Trust.
Seller, simultaneously with the payment of the Purchase Price, shall execute
and deliver to Purchaser a Warranty Xxxx of Sale with respect to the Mortgage
Loans in the form annexed hereto as Exhibit 10.
Purchaser shall be entitled to all scheduled principal due after the
Cut-off Date, all other recoveries of principal collected after the Cut-off
Date and all payments of interest on the Mortgage Loans (minus that portion of
any such payment which is allocable to the period prior to the Cut-off Date).
Notwithstanding the foregoing, on the first Remittance Date after the Funding
Date the Purchaser shall be entitled to receive the interest accrued from the
Cut-off Date through the day immediately preceding the Funding Date. The
principal balance of each Mortgage Loan as of the Cut-off Date is determined
after application of payments of principal due on or before the Cut-off Date
whether or not collected. Therefore, payments of scheduled principal and
interest prepaid for a due date beyond the Cut-off Date shall not be applied
to the principal balance as of the Cut-off Date. Such prepaid amounts shall be
the property of Purchaser. Seller shall hold any such prepaid amounts for the
benefit of Purchaser for subsequent remittance by Seller to Purchaser. All
scheduled payments of principal due on or before the Cut-off Date and
collected by Seller after the Cut-off Date shall belong to Seller.
Section 2.02 Possession of Mortgage Files. Upon the sale of any
Mortgage Loan, the ownership of such Mortgage Loan, including the Mortgage
Note, the Mortgage, the contents of the related Mortgage File and all rights,
benefits, payments, proceeds and obligations arising therefrom or in
connection therewith, shall then be vested in the Purchaser, and the ownership
of all records and documents with respect to such Mortgage Loan prepared by or
which come into the possession of the Seller shall immediately vest in the
Purchaser and, to the extent retained by the Seller, shall be retained and
maintained, in trust, by the Seller at the will of the Purchaser in a
custodial capacity only. The contents of such Mortgage File not delivered to
the Purchaser (the "Servicing File") are and shall be maintained by the
Servicer and held in trust by the Servicer for the benefit of the Purchaser as
the owner thereof and the Servicer's possession of the contents of each
Mortgage File so retained is at the will of the Purchaser for the sole purpose
of servicing the related Mortgage Loan, and such retention and possession by
the
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Servicer is in a custodial capacity only. Mortgage Files shall be maintained
separately from the other books and records of the Servicer. The Servicer
shall release from its custody of the contents of any Mortgage File only in
accordance with written instructions from the Purchaser, except where such
release is required as incidental to the Servicer's servicing of the Mortgage
Loans or is in connection with a repurchase or substitution of any such
Mortgage Loan pursuant to Section 3.04.
Any documents released to the Servicer in connection with the
foreclosure or servicing of any Mortgage Loan shall be held by such Person in
trust for the benefit of the Purchaser in accordance with this Section 2.02.
Such Person shall return to the Purchaser such documents when such Person's
need therefor in connection with such foreclosure or servicing no longer
exists (unless sooner requested by the Purchaser); provided that, if such
Mortgage Loan is liquidated, then, upon the delivery by the Servicer to the
Purchaser of a request for the release of such documents and a certificate
certifying as to such liquidation, the Purchaser shall promptly release and,
to the extent necessary, deliver to such Person such documents.
Section 2.03 Books and Records. The sale of each of its Mortgage
Loans shall be reflected on the applicable Seller's balance sheet and other
financial statements as a sale of assets by the applicable Seller. Each Seller
shall be responsible for maintaining, and shall maintain, a complete set of
books and records for the Mortgage Loans it conveyed to the Purchaser which
shall be clearly marked to reflect the sale of each Mortgage Loan to the
Purchaser and the ownership of each Mortgage Loan by the Purchaser.
Section 2.04 Defective Documents; Delivery of Mortgage Loan
Documents. If, subsequent to the related Funding Date, the Purchaser or either
Seller finds any document or documents constituting a part of a Mortgage File
to be defective or missing in any material respect (in this Section 2.04, a
"Defect"), the party discovering such Defect shall promptly so notify the
other parties. If the Defect pertains to the Mortgage Note or the Mortgage,
then the applicable Seller shall have a period of 45 days within which to
correct or cure any such defect after the earlier of such Seller's discovery
of same or such Seller being notified of same. If such Defect can ultimately
be cured but is not reasonably expected to be cured within such 45 day period,
such Seller shall have such additional time as is reasonably determined by the
Purchaser to cure or correct such Defect provided that such Seller has
commenced curing or correcting such Defect and is diligently pursuing same;
provided however that in no event shall the cure period be extended beyond 90
days after notice or discovery of such defect. If the Defect pertains to any
other document constituting a part of a Mortgage File, then such Seller shall
have a period of 90 days within which to correct or cure any such Defect after
the earlier of such Seller's discovery of same or such Seller being notified
of same. PHH Mortgage hereby covenants and agrees that, if any material Defect
cannot be corrected or cured, the related Mortgage Loan shall automatically
constitute, upon the expiration of the applicable cure period described above
and without any further action by any other party, a Defective Mortgage Loan,
whereupon PHH Mortgage shall repurchase such Mortgage Loan by paying to the
Purchaser the Repurchase Price therefor in accordance with Section 3.04(3) and
(4).
The applicable Seller will, with respect to each Mortgage Loan to be
purchased by the Purchaser, deliver and release to the Purchaser the Legal
Documents as set forth in Section 2.01. If the applicable Seller cannot
deliver an original Mortgage with evidence of
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recording thereon, original assumption, modification and substitution
agreements with evidence of recording thereon or an original intervening
assignment with evidence of recording thereon within the applicable time
periods, then such Seller shall promptly deliver to the Purchaser such
original Mortgages and original intervening assignments with evidence of
recording indicated thereon upon receipt thereof from the public recording
official, except in cases where the original Mortgage or original intervening
assignments are retained permanently by the recording office, in which case,
such Seller shall deliver a copy of such Mortgage or intervening assignment,
as the case may be, certified to be a true and complete copy of the recorded
original thereof. If the applicable Seller cannot deliver the original
security instrument or if an original intervening assignment has been lost,
then the applicable Seller will deliver a copy of such security instrument or
intervening assignment, certified by the local public recording official. If
the original title policy has been lost, the applicable Seller will deliver a
duplicate original title policy.
If the original Mortgage was not delivered pursuant to the preceding
paragraph, then the applicable Seller shall use its best efforts to promptly
secure the delivery of such originals and shall cause such originals to be
delivered to the Purchaser promptly upon receipt thereof. Notwithstanding the
foregoing, if the original Mortgage, original assumption, modification, and
substitution agreements, the original of any intervening assignment or the
original policy of title insurance is not so delivered to the Purchaser within
180 days following the Funding Date, then, upon written notice by the
Purchaser to PHH Mortgage, the Purchaser may, in its sole discretion, then
elect (by providing written notice to PHH Mortgage) to treat such Mortgage
Loan as a Defective Mortgage Loan, whereupon PHH Mortgage shall repurchase
such Mortgage Loan by paying to the Purchaser the Repurchase Price therefor in
accordance with Section 3.04(3) and (4). It is understood that from time to
time certain local recorder offices become backlogged with document volume. It
is agreed that the Seller will provide an Officer's Certificate to document
that the Seller has performed all necessary tasks to insure delivery of the
required documentation within 180 days and the delay beyond 180 is caused by
the backlog. If the delay exceeds 360 days, regardless of the backlog the
Purchaser may elect to collect the documents with its own resources with the
reasonable cost and expense to be borne by the Seller. The fact that the
Purchaser has conducted or failed to conduct any partial or complete
examination of the Mortgage Files shall not affect its right to demand
repurchase or any other remedies provided in this Agreement.
At the Purchaser's request, the Assignments shall be promptly
recorded in the name of the Purchaser or in the name of a Person designated by
the Purchaser in all appropriate public offices for real property records. If
any such Assignment is lost or returned unrecorded because of a defect
therein, then the applicable Seller shall promptly prepare a substitute
Assignment to cure such defect and thereafter cause each such Assignment to be
duly recorded. All recording fees related to such a one-time recordation of
the Assignments to or by a Seller shall be paid by the applicable Seller.
Section 2.05 Transfer of Mortgage Loans. Subject to the provisions of
this Section 2.05, the Purchaser shall have the right, without the consent of
the Sellers, at any time and from time to time, to assign any of the Mortgage
Loans and all or any part of its interest under this Agreement and designate
any person to exercise any rights of the Purchaser hereunder, and the
assignees or designees shall accede to the rights and obligations hereunder of
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the Purchaser with respect to such Mortgage Loans. The Sellers recognize that
the Mortgage Loans may be divided into "packages" for resale ("Mortgage Loan
Packages").
All of the provisions of this Agreement shall inure to the benefit of
the Purchaser and any such assignees or designees. All references to the
Purchaser shall be deemed to include its assignees or designees. Utilizing
resources reasonably available to the Seller without incurring any cost except
the Seller's overhead and employees' salaries, the applicable Seller shall
cooperate in any such assignment of the Mortgage Loans and this Agreement;
provided that the Purchaser shall bear all costs associated with any such
assignment of the Mortgage Loans and this Agreement other than such Seller's
overhead or employees' salaries.
The Servicer and the Purchaser acknowledge that the Servicer shall
continue to remit payments to the Purchaser on the Remittance Date after the
transfer of the Mortgage Loans, unless the Servicer was notified in writing of
the new record owner of the Mortgage Loans prior to the immediately preceding
Record Date, in which case, the Servicer shall remit to the new record owner
(or trustee or master servicer, as the case may be) of the Mortgage Loans.
The Servicer and Purchaser agree that in no event will the Servicer
be required to remit funds or send remittance reports to more than four (4)
Persons (not including the Servicer or any Affiliate or transferee thereof) at
any given time with respect to any Mortgage Loans sold on a particular Funding
Date.
Any prospective assignees of the Purchaser who have entered into a
commitment to purchase any of the Mortgage Loans may review and underwrite the
Servicer's servicing and origination operations, upon reasonable prior notice
to the Servicer, and the Servicer shall cooperate with such review and
underwriting to the extent such prospective assignees request information or
documents that are reasonably available and can be produced without
unreasonable expense or effort. The Servicer shall make the Mortgage Files
related to the Mortgage Loans held by the Servicer available at the Servicer's
principal operations center for review by any such prospective assignees
during normal business hours upon reasonable prior notice to the Servicer (in
no event less than 5 Business Days prior notice). The Servicer may, in its
sole discretion, require that such prospective assignees sign a
confidentiality agreement with respect to such information disclosed to the
prospective assignee which is not available to the public at large and a
release agreement with respect to its activities on the Servicer's premises.
The Servicer shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the
Servicer shall note transfers of Mortgage Loans. The Purchaser may, subject to
the terms of this Agreement, sell and transfer, in whole or in part, any or
all of the Mortgage Loans; provided that no such sale and transfer shall be
binding upon the Servicer unless such transferee shall agree in writing to an
Assignment, Assumption and Recognition Agreement, in substantially the form of
Exhibit 2.05 attached hereto, and an executed copy of such Assignment,
Assumption and Recognition Agreement shall have been delivered to the
Servicer. The Servicer shall evidence its acknowledgment of any transfers of
the Mortgage Loans to any assignees of the Purchaser by executing such
Assignment, Assumption and Recognition Agreement. The Servicer shall xxxx its
books and records to reflect the ownership of the Mortgage Loans by any such
assignees, and the previous Purchaser shall be released from its obligations
hereunder accruing after the date of transfer to the extent such
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obligations relate to Mortgage Loans sold by the Purchaser. This Agreement
shall be binding upon and inure to the benefit of the Purchaser and the
Servicer and their permitted successors, assignees and designees.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REPURCHASE AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS
Section 3.01 Representations and Warranties of each Seller. Each
Seller, as to itself, represents, warrants and covenants to the Purchaser that
as of each Funding Date and, with respect to any securitization, as of the
related cut-off date specified in the related trust agreement with respect to
such securitization (and modified, if necessary, to reflect changes due to
events that may have occurred from the applicable Funding Date through the
closing date of the securitization) or as of such date specifically provided
herein:
(1) Due Organization. The Seller is an entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and has all licenses necessary to carry on its business now
being conducted and is licensed, qualified and in good standing under the laws
of each state where a Mortgaged Property is located or is otherwise exempt
under applicable law from such qualification or is otherwise not required
under applicable law to effect such qualification; no demand for such
qualification has been made upon the Seller by any state having jurisdiction
and in any event the Seller is or will be in compliance with the laws of any
such state to the extent necessary to enforce each Mortgage Loan and with
respect to PHH Mortgage, service each Mortgage Loan in accordance with the
terms of this Agreement.
(2) Due Authority. The Seller had the full power and authority and
legal right to originate the Mortgage Loans that it originated, if any, and to
acquire the Mortgage Loans that it acquired. The Seller has the full power and
authority to hold each Mortgage Loan, to sell each Mortgage Loan and to
execute, deliver and perform, and to enter into and consummate, all
transactions contemplated by this Agreement. The Seller has duly authorized
the execution, delivery and performance of this Agreement, has duly executed
and delivered this Agreement, and this Agreement, assuming due authorization,
execution and delivery by the Purchaser, constitutes a legal, valid and
binding obligation of the Seller, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, receivership,
conservatorship, insolvency, moratorium and other laws relating to or
affecting creditors' rights generally or the rights of creditors of banks and
to the general principles of equity (whether such enforceability is considered
in a proceeding in equity or at law).
(3) No Conflict. The execution and delivery of this Agreement, the
acquisition or origination, as applicable, of the Mortgage Loans by the
Seller, the sale of the Mortgage Loans, the consummation of the transactions
contemplated hereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement, will not conflict with or result in a breach of
any of the terms, conditions or provisions of the Seller's organizational
documents and bylaws or any legal restriction or any agreement or instrument
to which the Seller is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or result in
the violation of any law, rule, regulation, order, judgment or decree to
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which the Seller or its property is subject, or impair the ability of the
Purchaser to realize on the Mortgage Loans;
(4) Ability to Perform. The Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(5) No Material Default. Neither the Seller nor any of its Affiliates
is in material default under any agreement, contract, instrument or indenture
of any nature whatsoever to which the Seller or any of its Affiliates is a
party or by which it (or any of its assets) is bound, which default would have
a material adverse effect on the ability of the Seller to perform under this
Agreement, nor, to the best of the Seller's knowledge, has any event occurred
which, with notice, lapse of time or both, would constitute a default under
any such agreement, contract, instrument or indenture and have a material
adverse effect on the ability of the Seller to perform its obligations under
this Agreement;
(6) Financial Statements. PHH Mortgage has delivered to the Purchaser
financial statements as to its fiscal year ended December 31, 2004. Except as
has previously been disclosed to the Purchaser in writing: (a) such financial
statements fairly present the results of operations and changes in financial
position for such period and the financial position at the end of such period
of PHH Mortgage and its subsidiaries; and (b) such financial statements are
true, correct and complete as of their respective dates and have been prepared
in accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as set forth in the notes
thereto. The Trust has delivered to the Purchaser financial statements dated
as of December 31, 2004 (the "Trust Financials") and such Trust Financials
fairly present the results of operations and changes in financial position for
such period and the financial position at the end of such period of the Trust.
The Trust Financials are true, correct and complete as of the date thereof and
have been prepared in accordance with generally accepted accounting principles
consistently applied. There has been no change in such Trust Financials since
their date and the Trust is not aware of any errors or omissions therein;
(7) No Change in Business. There has been no change in the business,
operations, financial condition, properties or assets of the applicable Seller
since (i) in the case of PHH Mortgage, the date of its financial statements
and (ii) in the case of the Trust, the date of delivery of the Trust
Financials, that would have a material adverse effect on the ability of the
applicable Seller to perform its obligations under this Agreement;
(8) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Seller's knowledge, threatened,
against the Seller, which, either in any one instance or in the aggregate, if
determined adversely to the Seller would adversely affect the sale of the
Mortgage Loans to the Purchaser or the execution, delivery or enforceability
of this Agreement or result in any material liability of the Seller, or draw
into question the validity of this Agreement, or have a material adverse
effect on the financial condition of the Seller;
(9) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by
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the Seller of or compliance by the Seller with this Agreement, the delivery of
the Mortgage Files to the Purchaser, the sale of the Mortgage Loans to the
Purchaser, the servicing of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or, if required, such approval has
been obtained prior to the Funding Date;
(10) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement is in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(11) No Broker. The Seller has not dealt with any broker or agent or
anyone else who might be entitled to a fee or commission in connection with
this transaction;
(12) No Untrue Information. Neither this Agreement nor any statement,
report or other agreement, document or instrument furnished or to be furnished
pursuant to this Agreement contains or will contain any materially untrue
statement of fact or omits or will omit to state a fact necessary to make the
statements contained therein not misleading;
(13) Sale Treatment. The Seller has determined that the disposition
of the Mortgage Loans pursuant to this Agreement will be afforded sale
treatment for accounting and tax purposes;
(14) Non-solicitation. The Seller agrees that it shall not solicit
any Mortgagors (in writing or otherwise) to refinance any of the Mortgage
Loans; provided that mass advertising or mailings (such as placing
advertisements on television, on radio, in magazines or in newspapers or
including messages in billing statements) that are not exclusively directed
towards the Mortgagors shall not constitute solicitation and shall not violate
this covenant; and
(15) Privacy. The Seller agrees and acknowledges that as to all
nonpublic personal information received or obtained by it with respect to any
Mortgagor: (a) such information is and shall be held by Seller in accordance
with all applicable law, including but not limited to the privacy provisions
of the Xxxxx-Xxxxx Xxxxxx Act; (b) such information is in connection with a
proposed or actual secondary market sale related to a transaction of the
Mortgagor for purposes of 16 C.F.R.ss.313.14(a)(3); and (c) Purchaser is
hereby prohibited from disclosing or using any such information other than to
carry out the express provisions of this Agreement, or as otherwise permitted
by applicable law.
Section 3.02 Representations and Warranties of the Servicer. The
Servicer represents, warrants and covenants to the Purchaser that as of the
Funding Date and, with respect to any securitization, as of the related
cut-off date specified in the trust agreement with respect to such
securitization (and modified, if necessary, to reflect changes due to events
that may have occurred from the applicable Funding Date through the closing
date of the securitization) or as of such date specifically provided herein:
(1) Ability to Service. The Servicer is an approved seller/servicer
for Xxxxxx Mae and Xxxxxxx Mac in good standing and is a mortgagee approved by
the Secretary of Housing and Urban Development pursuant to Section 203 of the
National Housing Act, with facilities,
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procedures and experienced personnel necessary for the servicing of mortgage
loans of the same type as the Mortgage Loans. No event has occurred that would
make the Servicer unable to comply with Xxxxxx Mae or Xxxxxxx Mac eligibility
requirements or that would require notification to either Xxxxxx Mae or
Xxxxxxx Mac;
(2) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Servicer's knowledge, threatened,
against the Servicer which, either in any one instance or in the aggregate, if
determined adversely to the Servicer would adversely affect the ability of the
Servicer to service the Mortgage Loans hereunder in accordance with the terms
hereof or have a material adverse effect on the financial condition of the
Servicer;
(3) Collection Practices. The collection practices used by the
Servicer with respect to each Mortgage Note and Mortgage have been in all
respects legal, proper and prudent in the mortgage servicing business;
(4) MERS. The Servicer is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the MERS Mortgage Loans for as long as such
Mortgage Loans are registered with MERS;
(5) Reasonable Servicing Fee. The Servicer acknowledges and agrees
that the Servicing Fee represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Servicer,
for accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement; and
(6) Fair Credit Reporting Act Compliance. The Servicer, furnishes, in
accordance with the Fair Credit Act and its implementing regulations, accurate
and complete information (e.g., favorable and unfavorable) on its borrower
credit files to Equifax, Experian and Trans Union Credit Information Company
(or the successors to such credit repository companies) on a monthly basis.
The Servicer will transmit full-file credit reporting data for each Mortgage
Loan pursuant to Xxxxxx Mae Guide Announcement 95-19 and that for each
Mortgage Loan, Servicer agrees it shall report one of the following statuses
each month as follows: current, delinquent (30-, 60-, 90-days, etc.),
foreclosed, or charged-off.
Section 3.03 Representations and Warranties as to Individual Mortgage
Loans. With respect to each Mortgage Loan, the applicable Seller hereby makes
the following representations and warranties to the Purchaser on which the
Purchaser specifically relies in purchasing such Mortgage Loan. Such
representations and warranties speak as of the Funding Date and, with respect
to any securitization, as of the related cut-off date specified in the trust
agreement with respect to such securitization (and modified, as necessary, to
reflect changes due to events that may have occurred from the applicable
Funding Date through the closing date of the securitization) unless otherwise
indicated, but shall survive any subsequent transfer, assignment or conveyance
of such Mortgage Loans:
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(1) Mortgage Loan as Described. Such Mortgage Loan complies with the
terms and conditions set forth herein, and all of the information set forth
with respect thereto on the related Mortgage Loan Schedule is true and correct
in all material respects;
(2) Complete Mortgage Files. The instruments and documents specified
in Section 2.02 with respect to such Mortgage Loan have been delivered to the
Purchaser in compliance with the requirements of Article II. The Seller is in
possession of a Mortgage File respecting such Mortgage Loan, except for such
documents as have been previously delivered to the Purchaser;
(3) Owner of Record. As of the applicable Funding Date, the Mortgage
relating to such Mortgage Loan has been duly recorded in the appropriate
recording office, and the applicable Seller or Servicer is the owner of record
of such Mortgage Loan and the indebtedness evidenced by the related Mortgage
Note;
(4) Payments Current. As of the applicable Funding Date and unless
otherwise disclosed in the Offering Materials, all payments required to be
made up to and including the Funding Date for such Mortgage Loan under the
terms of the Mortgage Note have been made and if the Mortgage Loan is a
Pledged Asset Mortgage Loan, neither the Mortgage Loan nor the related Pledged
Assets has been dishonored. Unless otherwise disclosed in the Offering
Materials or the related Mortgage Loan Schedule, there has been no
delinquency, exclusive of any grace period, in any payment by the Mortgagor
thereunder during the twelve months preceding the Funding Date;
(5) No Outstanding Charges. There are no delinquent taxes, insurance
premiums, assessments, including assessments payable in future installments,
or other outstanding charges affecting the Mortgaged Property related to such
Mortgage Loan;
(6) Original Terms Unmodified. The terms of the Mortgage Note and the
Mortgage related to such Mortgage Loan (and the Pledged Assets with respect to
each Pledged Asset Mortgage Loan) have not been impaired, waived, altered or
modified in any material respect, except by a written instrument which has
been recorded, if necessary to protect the interests of the Purchaser, and
which has been delivered to the Purchaser. The substance of any such waiver,
alteration or modification has been approved by the issuer of any related LPMI
Policy and by the mortgage insurer, if the Mortgage Loan is insured, the title
insurance policy, to the extent required by the policy, and its terms are
reflected on the related Mortgage Loan Schedule. No Mortgagor has been
released, in whole or in part, except in connection with an assumption
agreement approved by the issuer of any related LPMI Policy and the title
insurer, to the extent required by the policy guidelines, and which assumption
agreement is part of the Mortgage File delivered to the Purchaser and the
terms of which are reflected in the related Mortgage Loan Schedule;
(7) No Defenses. The Mortgage Note and the Mortgage related to such
Mortgage Loan (and the related Pledge Agreement with respect to each Pledged
Asset Mortgage Loan) are not subject to any right of rescission, set-off or
defense, including the defense of usury, nor will the operation of any of the
terms of such Mortgage Note and such Mortgage (or the related Pledge Agreement
with respect to each Pledged Asset Mortgage Loan), or the exercise of
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any right thereunder, render such Mortgage (or the related Pledge Agreement
with respect to each Pledged Asset Mortgage Loan) unenforceable, in whole or
in part, or subject to any right of rescission, set-off or defense, including
the defense of usury and no such right of rescission, set-off or defense has
been asserted with respect thereto;
(8) Hazard Insurance. (a) All buildings upon the Mortgaged Property
related to such Mortgage Loan are insured by an insurer acceptable to Xxxxxx
Xxx or Xxxxxxx Mac against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where such Mortgaged Property is
located, pursuant to insurance policies conforming to the requirements of
either Section 5.10 or Section 5.11. All such insurance policies
(collectively, the "hazard insurance policy") contain a standard mortgagee
clause naming the originator of such Mortgage Loan, its successors and
assigns, as mortgagee. Such policies are the valid and binding obligations of
the insurer, and all premiums thereon due to date have been paid. The related
Mortgage obligates the Mortgagor thereunder to maintain all such insurance at
such Mortgagor's cost and expense, and on such Mortgagor's failure to do so,
authorizes the holder of such Mortgage to maintain such insurance at such
Mortgagor's cost and expense and to seek reimbursement therefor from such
Mortgagor; or (b) in the case of a condominium or unit in a planned unit
development ("PUD") project that is not covered by an individual policy, the
condominium or PUD project is covered by a "master" or "blanket" policy and
there exists and is in the Servicer's Mortgage File a certificate of insurance
showing that the individual unit that secures the first mortgage is covered
under such policy. The insurance policy contains a standard mortgagee clause
naming the originator of such Mortgage Loan (and its successors and assigns),
as insured mortgagee. Such policies are the valid and binding obligations of
the insurer, and all premiums thereon have been paid. The insurance policy
provides for advance notice to the Seller or Servicer if the policy is
canceled or not renewed, or if any other change that adversely affects the
Seller's interests is made; the certificate includes the types and amounts of
coverage provided, describes any endorsements that are part of the "master"
policy and would be acceptable pursuant to the Xxxxxx Mae Guide;
(9) Compliance With Applicable Laws. All requirements of any federal,
state or local law (including usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, disclosure
and applicable predatory and abusive lending laws) applicable to the
origination and servicing of such Mortgage Loan have been complied with in all
material respects;
(10) No Fraud. No error or omission, misrepresentation, negligence or
fraud in respect of such Mortgage Loan has taken place on the part of any
Person in connection with the origination and servicing of such Mortgage Loan
or in the application for mortgage insurance.
(11) No Satisfaction of Mortgage. The Mortgage related to such
Mortgage Loan has not been satisfied, canceled or subordinated, in whole or in
part, or rescinded, and the related Mortgaged Property has not been released
from the lien of such Mortgage, in whole or in part, nor has any instrument
been executed that would effect any such release, cancellation, subordination
or rescission;
(12) Valid First Lien. The Mortgage related to such Mortgage Loan is
a valid, subsisting and enforceable perfected first lien on the related
Mortgaged Property, including all
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improvements on the related Mortgaged Property, which Mortgaged Property is
free and clear of any encumbrances and liens having priority over the first
lien of the Mortgage subject only to (a) the lien of current real estate taxes
and special assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record
as of the date of recording of such Mortgage which are acceptable to mortgage
lending institutions generally, are referred to in the lender's title
insurance policy and do not adversely affect the market value or intended use
of the related Mortgaged Property, and (c) other matters to which like
properties are commonly subject which do not individually or in the aggregate
materially interfere with the benefits of the security intended to be provided
by such Mortgage or the use, enjoyment, or market value of the related
Mortgaged Property; with respect to each Cooperative Loan, each Acceptance of
Assignment and Assumption of Lease Agreement creates a valid, enforceable and
subsisting first security interest in the collateral securing the related
Mortgage Note subject only to (a) the lien of the related Cooperative
Corporation for unpaid assessments representing the obligor's pro rata share
of the Cooperative Corporation's payments for its blanket mortgage, current
and future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Acceptance of
Assignment and Assumption of Lease Agreement; provided, however, that the
appurtenant Proprietary Lease may be subordinated or otherwise subject to the
lien of any mortgage on the Cooperative Project;
(13) Validity of Documents. The Mortgage Note and the Mortgage
related to such Mortgage Loan (and the Acceptance of Assignment and Assumption
of Lease Agreement with respect to each Cooperative Loan) are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and general equitable principles
(regardless whether such enforcement is considered in a proceeding in equity
or at law);
(14) Valid Execution of Documents. All parties to the Mortgage Note
and the Mortgage related to such Mortgage Loan had legal capacity to enter
into such Mortgage Loan and to execute and deliver the related Mortgage Note
and the related Mortgage and the related Mortgage Note and the related
Mortgage have been duly and properly executed by such parties; with respect to
each Cooperative Loan, all parties to the Mortgage Note and the Mortgage Loan
had legal capacity to execute and deliver the Mortgage Note, the Acceptance of
Assignment and Assumption of Lease Agreement, the Proprietary Lease, the Stock
Power, the Recognition Agreement, the Financing Statement and the Assignment
of Proprietary Lease and such documents have been duly and properly executed
by such parties; each Stock Power (i) has all signatures guaranteed or (ii) if
all signatures are not guaranteed, then such Cooperative Shares will be
transferred by the stock transfer agent of the Cooperative Corporation if the
Seller undertakes to convert the ownership of the collateral securing the
related Cooperative Loan
(15) Full Disbursement of Proceeds. Such Mortgage Loan has closed and
the proceeds of such Mortgage Loan have been fully disbursed prior to the
applicable Funding Date and there is no requirement for future advances
thereunder; provided that, with respect to any Mortgage Loan originated within
the previous 120 days, alterations and repairs with respect to
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the related Mortgaged Property or any part thereof may have required an escrow
of funds in an amount sufficient to pay for all outstanding work within 120
days of the origination of such Mortgage Loan, and, if so, such funds are held
in escrow by the Seller, a title company or other escrow agent. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;
(16) Ownership. The Mortgage Note and the Mortgage related to such
Mortgage Loan have not been assigned, pledged or otherwise transferred by the
Seller, in whole or in part, and the Seller has good and marketable title
thereto, and the Seller is the sole owner thereof (and with respect to any
Cooperative Loan, the sole owner of the related Acceptance of Assignment and
Assumption of Lease Agreement) and has full right and authority to transfer
and sell such Mortgage Loan, and is transferring such Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest;
(17) Doing Business. The Mortgage Loan was originated by a savings
and loan association, a savings bank, a commercial bank, a credit union, an
insurance company, or similar institution which is supervised and examined by
a federal or state authority or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 or the National
Housing Act. All parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of
the state wherein the Mortgaged Property is located and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal
offices in such state, or (5) not doing business in such state;
(18) Title Insurance. (a) Such Mortgage Loan is covered by an ALTA
lender's title insurance policy or short form title policy acceptable to
Xxxxxx Xxx, Xxxxxxx Mac or GNMA (or, in jurisdictions where ALTA policies are
not generally approved for use, a lender's title insurance policy acceptable
to Xxxxxx Xxx, Xxxxxxx Mac or GNMA), issued by a title insurer acceptable to
Xxxxxx Mae, Xxxxxxx Mac or GNMA, and qualified to do business in the
jurisdiction where the related Mortgaged Property is located, insuring
(subject to the exceptions contained in clauses (11)(a) and (b) above) the
Seller or the Servicer, its successors and assigns as to the first priority
lien of the related Mortgage in the original principal amount of such Mortgage
Loan and in the case of ARM Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of
such Mortgage providing for adjustment to the applicable Note Rate and Monthly
Payment. Additionally, either such lender's title insurance policy
affirmatively insures that there is ingress and egress to and from the
Mortgaged Property or the Seller warrants that there is ingress and egress to
and from the Mortgaged Property and the lender's title insurance policy
affirmatively insures against encroachments by or upon the related Mortgaged
Property or any interest therein or any other adverse circumstance that either
is disclosed or would have been disclosed by an accurate survey. The Seller or
the Servicer is the sole insured of such lender's title insurance policy, and
such lender's title insurance policy is in full force and effect and will be
in full force and effect upon the consummation of the transactions
contemplated by this Agreement and will inure to the benefit of the Purchaser
without any further act. No claims have been made under such lender's
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title insurance policy, neither the Seller, nor to the best of the Seller's
knowledge, any prior holder of the related Mortgage has done, by act or
omission, anything that would impair the coverage of such lender's insurance
policy, and there is no act, omission, condition, or information that would
impair the coverage of such lender's insurance policy; (b) The mortgage title
insurance policy covering each unit mortgage in a condominium or PUD project
related to such Mortgage Loan meets all requirements of Xxxxxx Mae, Xxxxxxx
Mac or GNMA;
(19) No Defaults. As of the applicable Funding Date, (a) there is no
default, breach, violation or event of acceleration existing under the
Mortgage, the Mortgage Note (or the related Pledge Agreement with respect to
each Pledged Asset Mortgage Loan), or any other agreements, documents, or
instruments related to such Mortgage Loan; (b) to the best of the Seller's
knowledge, there is no event that, with the lapse of time, the giving of
notice, or both, would constitute such a default, breach, violation or event
of acceleration; (c) the Mortgagor(s) with respect to such Mortgage Loan is
(1) not in default under any other Mortgage Loan or (2) the subject of an
Insolvency Proceeding; (d) no event of acceleration has previously occurred,
and no notice of default has been sent, with respect to such Mortgage Loan;
(e) in no event has the Seller waived any of its rights or remedies in respect
of any default, breach, violation or event of acceleration under the Mortgage,
the Mortgage Note (or the related Pledge Agreement with respect to each
Pledged Asset Mortgage Loan), or any other agreements, documents, or
instruments related to such Mortgage Loan; and (f) with respect to each
Cooperative Loan, there is no default in complying with the terms of the
Mortgage Note, the Acceptance of Assignment and Assumption of Lease Agreement
and the Proprietary Lease and all maintenance charges and assessments
(including assessments payable in the future installments, which previously
became due and owing) have been paid, and the Seller has the right under the
terms of the Mortgage Note, Acceptance of Assignment and Assumption of Lease
Agreement and Recognition Agreement to pay any maintenance charges or
assessments owed by the Mortgagor;
(20) No Mechanics' Liens. As of the applicable Funding Date, there
are no mechanics' or similar liens, except such liens as are expressly insured
against by a title insurance policy described in clause (18) above, or claims
that have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such lien) affecting the related
Mortgaged Property that are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(21) Location of Improvements; No Encroachments. As of the date of
origination of such Mortgage Loan, to the best of the Seller's knowledge, all
improvements that were considered in determining the Appraised Value of the
related Mortgaged Property lay wholly within the boundaries and building
restriction lines of such Mortgaged Property, and no improvements on adjoining
properties encroach upon such Mortgaged Property. No improvement located on or
part of any Mortgaged Property is in violation of any applicable zoning law or
regulation, and all inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of such Mortgaged Property,
and with respect to the use and occupancy of the same, including certificates
of occupancy, have been made or obtained from the appropriate authorities;
(22) Origination; Payment Terms. Principal payments on such Mortgage
Loan commenced or will commence no more than 60 days after funds were
disbursed in connection
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with such Mortgage Loan. If the interest rate on the related Mortgage Note is
adjustable, the adjustment is based on the Index set forth on the related
Mortgage Loan Schedule. The related Mortgage Note is payable on the first day
of each month in arrears, in accordance with the payment terms described on
the related Mortgage Loan Schedule;
(23) LTV; Primary Mortgage Insurance Policy. Except with respect to
Pledged Asset Mortgage Loans and any Alt-A loan as defined in the PHH Guide
and disclosed to the Purchaser in the Offering Materials, if such Mortgage
Loan had a Loan-to-Value Ratio of more than 80% at origination, such Mortgage
Loan is and will be subject to a Primary Insurance Policy or LPMI Policy
issued by a Qualified Mortgage Insurer, which insures the Seller or Servicer,
its successors and assigns and insureds in the amount set forth on the
Mortgage Loan Schedule; provided that, a Primary Mortgage Insurance Policy or
LPMI Policy will not be required for any Cooperative Loan if (i) the proceeds
of such Cooperative Loan were used to purchase a Cooperative Unit at the
"insider's price" when the building was converted to a Cooperative
Corporation, (ii) the value of the Cooperative Unit for purposes of
establishing the LTV at origination was such "insider's price", (iii) the
principal amount of the Cooperative Loan at origination was not more than 100%
of such "insider's price" and (iv) the LTV at origination, as calculated using
the Appraised Value at origination, was less than or equal to 80%. All
provisions of such Primary Insurance Policy or LPMI Policy have been and are
being complied with, such policy is in full force and effect, and all premiums
due thereunder have been paid. Any related Mortgage subject to any such
Primary Insurance Policy or LPMI Policy obligates the Mortgagor or the
Servicer thereunder, as applicable, to maintain such insurance for the time
period required by law and to pay all premiums and charges in connection
therewith. As of the date of origination, the Loan-to-Value Ratio of such
Mortgage Loan is as specified in the applicable Mortgage Loan Schedule;
(24) Prepayment Penalty Term. No Mortgage Loan is subject to a
prepayment penalty except as provided in the related Mortgage Note and as set
forth on the related Mortgage Loan Schedule. With respect to each Mortgage
Loan that has a prepayment penalty feature, each such prepayment penalty is
enforceable and will be enforced by the Servicer for the benefit of the
Purchaser, and each prepayment penalty is permitted pursuant to federal, state
and local law. Each such prepayment penalty is in an amount not more than the
maximum amount permitted under applicable law and no such prepayment penalty
may be imposed for a term in excess of five (5) years with respect to Mortgage
Loans originated prior to October, 1, 2002. With respect to Mortgage Loans
originated on or after October 1, 2002, the duration of the prepayment period
shall not exceed three (3) years from the date of the Mortgage Note unless the
Mortgage Loan was modified to reduce the prepayment period to no more than
three (3) years from the date of the note and the Mortgagor was notified in
writing of such reduction in prepayment period. With respect to any Mortgage
Loan that contains a provision permitting imposition of a premium upon a
prepayment prior to maturity: (i) prior to the loan's origination, the
Mortgagor agreed to such premium in exchange for a monetary benefit, including
but not limited to a rate or fee reduction, (ii) prior to the loan's
origination, the Mortgagor was offered the option of obtaining a mortgage loan
that did not require payment of such a premium, (iii) the prepayment premium
is disclosed to the Mortgagor in the loan documents pursuant to applicable
state, local and federal law, and (iv) notwithstanding any state, local or
federal law to the contrary, the Servicer shall not impose such prepayment
premium in any instance when the mortgage debt is accelerated as the result of
the Mortgagor's default in making the loan payments;
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(25) Mortgaged Property Undamaged; No Condemnation. To the best of
the Seller's knowledge, as of the applicable Funding Date, the related
Mortgaged Property is free of material damage and waste and there is no
proceeding pending for the total or partial condemnation thereof;
(26) Customary Provisions. The related Mortgage contains customary
and enforceable provisions that render the rights and remedies of the holder
thereof adequate for the realization against the related Mortgaged Property of
the benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) in the case
of a Mortgage, otherwise by judicial foreclosure. There is no homestead or
other exemption available to a Mortgagor which would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose
the Mortgage.
(27) Conformance With Underwriting Standards. Such Mortgage Loan was
underwritten in accordance with the PHH Guide in effect at the time of the
origination with exceptions thereto exercised in a reasonable manner;
(28) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property on forms signed prior to the approval of such
Mortgage Loan application by an appraiser, duly appointed by the originator of
such Mortgage Loan and whose compensation is not affected by the approval or
disapproval of such Mortgage Loan and the appraisal and appraiser both satisfy
the requirements of Xxxxxxx Mac and Xxxxxx Xxx;
(29) Deeds of Trust. If the related Mortgage constitutes a deed of
trust, then a trustee, duly qualified under Applicable Law to serve as such,
has been properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the Purchaser
to the trustee under such deed of trust, except in connection with a trustee's
sale after default by the related Mortgagor;
(30) Insurance. The Mortgaged Property securing each Mortgage Loan is
covered by a hazard insurance policy meeting the requirements of Section 5.10
hereof issued by an insurer acceptable to Xxxxxx Mae and Xxxxxxx Mac;
(31) Occupancy. As of the date of origination of such Mortgage Loan,
to the best of the Seller's knowledge, the related Mortgaged Property (or with
respect to a Cooperative Loan, the related Cooperative Unit) is lawfully
occupied under Applicable Law and all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Mortgaged Property (or with respect to a Cooperative Loan, the related
Cooperative Unit) and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy, have been made or
obtained from the appropriate authorities;
(32) Adjustments. All of the terms of the related Mortgage Note
pertaining to interest rate adjustments, payment adjustments and adjustments
of the outstanding principal balance, if any, are enforceable and such
adjustments will not affect the priority of the lien of the related Mortgage;
all such adjustments on such Mortgage Loan have been made properly and in
accordance with the provisions of such Mortgage Loan;
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(33) Insolvency Proceedings; Servicemembers Relief Act. To the best
of the Seller's knowledge, the related Mortgagor (1) is not the subject of any
Insolvency Proceeding; and (2) has not requested any relief allowed to such
Mortgagor under the Servicemembers Civil Relief Act;
(34) Xxxxxx Mae/Xxxxxxx Mac Documents. Such Mortgage Loan was closed
on standard Xxxxxx Mae or Xxxxxxx Mac documents or on such documents otherwise
acceptable to them;
(35) No Buydown Loans. Unless otherwise disclosed in the Offering
Materials or the related Mortgage Loan Schedule, no Mortgage Loan contains
provisions pursuant to which Monthly Payments are (a) paid or partially paid
with funds deposited in any separate account established by the Seller, the
Mortgagor, or anyone on behalf of the Mortgagor, (b) paid by any source other
than the Mortgagor or (c) contains any other similar provisions which may
constitute a "buydown" provision. The Mortgage Loan is not a graduated payment
mortgage loan and the Mortgage Loan does not have a shared appreciation or
other contingent interest feature;
(36) Assignment in Recordable Form. The Assignment is in recordable
form and is acceptable for recording under the laws of the jurisdiction in
which the Mortgaged Property is located;
(37) Principal Advances Consolidated. Any principal advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(38) Payment Terms; Amortization. The Mortgage Note requires a
monthly payment which is sufficient either from the first payment date or
during the period following each Adjustment Date, to amortize the outstanding
principal balance fully, as of such first payment day or the first day of such
period, over the then remaining term of such Mortgage Note and to pay interest
at the related Note Rate. Unless otherwise disclosed in the Offering Materials
or the related Mortgage Loan Schedule, no Mortgage Loan has a balloon payment
feature. With respect to any Mortgage Loan with a balloon payment feature, the
Mortgage Note is payable in Monthly Payments based on a thirty year
amortization schedule and has a final Monthly Payment substantially greater
than the proceeding Monthly Payment which is sufficient to amortize the
remaining principal balance of the Mortgage Loan;
(39) Condominium Eligibility. If the residential dwelling on the
Mortgaged Property is a condominium unit or a unit in a planned unit
development (other than a de minimis planned unit development) such
condominium or planned unit development project meets the eligibility
requirements of the PHH Guide;
(40) HOEPA. No Mortgage Loan is a Predatory Mortgage Loan or Covered
Loan, as applicable, and no Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 a "high cost home loan" as defined in the Georgia
Fair Lending Act. No
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Mortgage Loan is covered by the Home Ownership and Equity Protection Act of
1994 and no Mortgage Loan is in violation of any comparable state or local
law;
(41) No Construction, Rehabilitation or Trade-In. No Mortgage Loan
was made in connection with (a) the construction or rehabilitation of a
Mortgaged Property or (b) facilitating the trade-in or exchange of a Mortgaged
Property;
(42) Acceptable Investment. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property (or with respect to a Cooperative Loan, the Acceptance of Assignment
and Assumption of Lease Agreement, the Cooperative Loan or the Cooperative
Project), the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause the Mortgage Loan to be an unacceptable investment, cause
the Mortgage Loan to become more delinquent than as disclosed in the Offering
Materials, or adversely affect the value of the Mortgage Loan;
(43) No Additional Collateral. Except as indicated on the Mortgage
Loan Schedule, the Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage and the security interest of any applicable security
agreement or chattel mortgage referred to in paragraph (12) above;
(44) Compliance with Environmental Laws. To the best of the Seller's
knowledge, the Mortgaged Property is in material compliance with all
applicable Environmental Laws pertaining to environmental hazards including,
without limitation, asbestos, and neither the Seller nor, to the Seller's
knowledge, the related Mortgagor, has received any notice of any violation or
potential violation of such law;
(45) Negative Amortization. No Mortgage Loan is subject to Negative
Amortization;
(46) Loan-to-Value Ratio; Modifications; No Foreclosures. The
Loan-to-Value Ratio of each Mortgage Loan was less than 125% at the time of
its origination or refinancing, as applicable;
(47) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the related Mortgage Loan Schedule and
consists of a single parcel (or more than one contiguous parcels) of real
property with a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit in a condominium
project, or an individual unit in a planned unit development or a townhouse.
No Mortgage Loan is secured by a leasehold estate where the term of the
leasehold exceeds the term of the Mortgage Loan and no Mortgage Loan is a
cooperative loan. As of the respective appraisal date for each Mortgaged
Property, no portion of the Mortgaged Property was being used for commercial
purposes;
(48) No Additional Payments. There is no obligation on the part of
the Seller or any other party to make payments in addition to those made by
the Mortgagor;
(49) Fair Credit Reporting Act. The Servicer has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete
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information (e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (or the
successors to such credit repository companies), on a monthly basis;
(50) Scheduled Interest. Interest on each Mortgage is calculated on
the basis of a 360-day year consisting of twelve 30-day months;
(51) Collection Practices Escrow Deposits. The origination and
collection practices used with respect to the Mortgage Loan have been in
accordance with the servicing standard set forth in Section 5.01 hereof, and
have been in all material respects legal and proper, and in accordance with
the terms of the Mortgage Note and Mortgage. All Escrow Payments have been
collected in full compliance with state and federal law. An escrow of funds is
not prohibited by Applicable Law and has been established to pay for all
Escrow Payments which remain unpaid and have been assessed but are not yet due
and payable. No escrow deposits or Escrow Payments or other charges or
payments due the Servicer have been capitalized under the Mortgage Note;
(52) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of section 860G(a)(3) of the Code;
(53) [Reserved]
(54) No Credit Insurance Policies. In connection with the origination
of any Mortgage Loan, no proceeds from any Mortgage Loan were used to finance
or acquire a single-premium credit life insurance policy. No Mortgagor was
required to purchase any single-premium credit insurance policy (e.g., life,
disability, accident, unemployment, or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single-premium credit insurance policy (e.g.,
life, disability, accident, unemployment, mortgage, or health insurance) in
connection with the origination of the Mortgage Loan; no proceeds from any
Mortgage Loan were used to purchase single-premium credit insurance policies
or debt cancellation agreements as part of the origination of, or as a
condition to closing, such Mortgage Loan;
(55) Cooperative Lien Search. With respect to each Cooperative Loan,
a Cooperative Lien Search has been made by a company competent to make the
same which company is acceptable to Xxxxxx Xxx and qualified to do business in
the jurisdiction where the Cooperative Unit is located;
(56) Proprietary Leases. With respect to each Cooperative Loan, (i)
the terms of the related Proprietary Lease is longer than the terms of the
Cooperative Loan, (ii) there is no provision in any Proprietary Lease which
requires the Mortgagor to offer for sale the Cooperative Shares owned by such
Mortgagor first to the Cooperative Corporation, (iii) there is no prohibition
in any Proprietary Lease against pledging the Cooperative Shares or assigning
the Proprietary Lease and (iv) the Recognition Agreement is on a form of
agreement published by the Aztech Document Systems, Inc. or includes
provisions which are no less favorable to the lender than those contained in
such agreement;
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(57) Financing Statements; Perfection. With respect to each
Cooperative Loan, each original UCC financing statement, continuation
statement or other governmental filing or recordation necessary to create or
preserve the perfection and priority of the first priority lien and security
interest in the Cooperative Shares and Proprietary Lease has been timely and
properly made. Any security agreement, chattel mortgage or equivalent document
related to the Cooperative Loan and delivered to the Mortgagor or its designee
establishes in the Mortgagor a valid and subsisting perfected first lien on
and security interest in the Mortgaged Property described therein, and the
Mortgagor has full right to sell and assign the same;
(58) Acceptance of Assignment and Assumption of Lease Agreement. With
respect to each Cooperative Loan, each Acceptance of Assignment and Assumption
of Lease Agreement contains enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization of the
benefits of the security provided thereby. The Acceptance of Assignment and
Assumption of Lease Agreement contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage
Note in the event the Cooperative Unit is transferred or sold without the
consent of the holder thereof;
(59) Arbitration. With respect to any Mortgage Loan originated on or
after August 1, 2004, neither the related Mortgage nor the related Mortgage
Note requires the Mortgagor to submit to arbitration to resolve any dispute
arising out of or relating in any way to the Mortgage Loan transaction;
(60) Balloon Payments. No Mortgage Loan is a balloon mortgage loan
that has an original stated maturity of less than seven (7) years;
(61) Origination Practices. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Mortgage Loan's originator
which is a higher cost product designed for less creditworthy borrowers,
unless at the time of the Mortgage Loan's origination, such Mortgagor did not
qualify taking into account credit history and debt-to-income ratios for a
lower-cost credit product then offered by the Mortgage Loan's originator or
any affiliate of the Mortgage Loan's originator. If, at the time of loan
application, the Mortgagor may have qualified for a lower-cost credit product
then offered by any mortgage lending affiliate of the Mortgage Loan's
originator, the Mortgage Loan's originator referred the Mortgagor's
application to such affiliate for underwriting consideration;
(62) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs, in part, objective
mathematical principles which relate the Mortgagor's income, assets and
liabilities to the proposed payment and such underwriting methodology does not
rely on the extent of the Mortgagor's equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the Mortgagor had a reasonable ability to make timely
payments on the Mortgage Loan;
(63) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than
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$60,000 which would have resulted in an unprofitable origination, no Mortgagor
was charged "points and fees" (whether or not financed) in an amount greater
than 5% of the principal amount of such Mortgage Loan, such 5% limitation is
calculated in accordance with Xxxxxx Mae's anti-predatory lending requirements
as set forth in the Xxxxxx Xxx Selling Guide; and
(64) Fees Charges. All fees and charges (including finance charges)
and whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Mortgage Loan has been
disclosed in writing to the Mortgagor in accordance with applicable state and
federal law and regulation.
Section 3.04 Repurchase and Substitution. It is understood and agreed
that the representations and warranties set forth in Sections 3.01, 3.02 and
3.03 shall survive the sale of the Mortgage Loans to the Purchaser and shall
inure to the benefit of the Purchaser, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment or the examination of
any Mortgage File and notwithstanding the fact that any such representation or
warranty (other than the representation contained in clause (42) of Section
3.03 above) was made to the best of the Seller's knowledge.
Upon discovery by either of the Sellers or the Purchaser of a breach
of any of the representations and warranties contained in Sections 3.01, 3.02
or 3.03 that materially and adversely affects the interest of the Purchaser
(or that materially and adversely affects the interests of the Purchaser in
the related Mortgage Loan, in the case of a representation or warranty
relating to a particular Mortgage Loan), the party discovering such breach
shall give prompt written notice to the other.
Unless permitted a greater period of time to cure as set forth in
Section 2.04, the applicable Seller shall have a period of 60 days from the
earlier of either discovery by or receipt of written notice from the Purchaser
to the Seller of any breach of any of the representations and warranties
contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects
the interest of the Purchaser (or that materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan, in the case of a
representation or warranty relating to a particular Mortgage Loan) (a
"Defective Mortgage Loan"; provided that "Defective Mortgage Loan" shall also
include (a) any Mortgage Loan treated or designated as such in accordance with
Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to
make the first regularly scheduled payment of principal and interest) within
which to correct or cure such breach. If such breach can ultimately be cured
but is not reasonably expected to be cured within the 60-day period, then the
applicable Seller shall have such additional time, if any, as is determined by
the Purchaser to cure such breach provided that the Seller has commenced
curing or correcting such breach and is diligently pursuing same. Each Seller
hereby covenants and agrees with respect to each Mortgage Loan conveyed by it
that, if any breach relating thereto cannot be corrected or cured within the
applicable cure period or such additional time, if any, as is determined by
the Purchaser, then such Seller shall, at the direction of the Purchaser,
repurchase the Defective Mortgage Loan at the applicable Repurchase Price.
Notwithstanding anything to the contrary contained herein, if the first
regularly scheduled payment of principal and interest due under any Mortgage
Loan has been delinquent more than 30 days, the Purchaser may, by written
notice to the applicable Seller, require that the Seller repurchase the
related Mortgage Loan. However, if the Seller provides evidence that the
delinquency was due to a
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servicing setup error, no repurchase shall be required. Within 10 Business
Days following the delivery of any such written notice from the Purchaser, the
applicable Seller shall repurchase the specified Mortgage Loan by paying the
Repurchase Price therefor by wire transfer of immediately available funds
directly to the Purchaser's Account.
Notwithstanding the previous paragraph, with the exception of
paragraphs (24), (40), (49), (52), (54) and (59) of Section 3.03, the
applicable Seller may, at the Purchaser's option and assuming that such Seller
has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan ("Deleted Mortgage
Loan") and substitute in its place a Qualified Substitute Mortgage Loan or
Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it
shall repurchase the Defective Mortgage Loan.
As to any Deleted Mortgage Loan for which the applicable Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable
Seller shall effect such substitution by delivering to the Purchaser or its
designee for such Qualified Substitute Mortgage Loan or Loans the Legal
Documents as are required by Section 2. Upon such substitution, such Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the applicable Seller shall be deemed to have
made with respect to such Qualified Substitute Mortgage Loan or Loans, as of
the date of substitution, the covenants, representations and warranties set
forth in Sections 3.01, 3.02 and 3.03.
For any month in which the applicable Seller substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the applicable Seller will determine the amount (if any) by which the
aggregate principal balance of all such Qualified Substitute Mortgage Loans as
of the date of substitution (after application of scheduled principal payments
due in the month of substitution which have been received or as to which an
advance has been made) is less than the aggregate outstanding principal
balance of all such Deleted Mortgage Loans. The amount of such shortfall shall
be paid by the applicable Seller on the date of such substitution) by wire
transfer of immediately available funds directly to the Purchaser's Account.
Any repurchase of a Defective Mortgage Loan required hereunder shall
be accomplished by payment of the applicable Repurchase Price within 3
Business Days of expiration of the applicable time period referred to above in
paragraph 3.04(3) by wire transfer of immediately available funds directly to
the Purchaser's Account. It is understood and agreed that the obligations of a
Seller (a) set forth in this Section 3.04(3) to cure any breach of such
Seller's representations and warranties contained in Sections 3.01, 3.02 and
3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in
Section 9.01 to indemnify the Purchaser in connection with any breach of a
Seller's representations and warranties contained in Sections 3.01, 3.02 and
3.03 shall constitute the sole remedies of the Purchaser respecting a breach
of such representations and warranties.
The parties further agree that, in recognition of the Trust's rights
against PHH Mortgage with respect to the Mortgage Loans acquired by it from
PHH Mortgage and conveyed to the Purchaser hereunder, the Purchaser shall have
the right to cause PHH Mortgage to repurchase directly any Defective Mortgage
Loan (other than as a result of a breach by the Trust
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of Section 3.03(3) or 3.03(15) hereof, in which case the Purchaser shall have
the right to cause the Trust to repurchase directly the Defective Mortgage
Loan) acquired hereunder by the Purchaser from the Trust.
Section 3.05 Certain Covenants of each Seller and the Servicer.
Without incurring undue effort or any cost except the Seller's overhead or
employees' salaries, each Seller shall take reasonable steps to assist the
Purchaser, if the Purchaser so requests by 30 days' advance written notice to
the related Seller or Sellers (it is agreed that electronic mail shall be
considered valid notification if followed by a verbal communication by the
Purchaser to the related Seller or Sellers), in re-selling the Mortgage Loans
in a whole loan sale or in securitizing the Mortgage Loans and selling
undivided interests in such Mortgage Loans in a public offering or private
placement or selling participating interests in such Mortgage Loans, which
steps may include, (a) providing any information relating to the Mortgage
Loans reasonably necessary to assist in the preparation of any disclosure
documents, (b) providing information relating to delinquencies and defaults
with respect to the Servicer's servicing portfolio (or such portion thereof as
is similar to the Mortgage Loans), (c) entering into any other servicing,
custodial or other similar agreements, that are consistent with the provisions
of this Agreement, and which contain such provisions as are customary in
securitizations rated "AAA" (including a securitization involving a REMIC) (a
"Securitization") (d) to restate the representations and warranties contained
in Article III hereof as of the closing date of such Securitization or whole
loan sale; provided, however, Servicer may qualify and/or modify any such
representations and warranties to reflect any facts or circumstances arising
subsequent to the related Funding Date, and (e) provide such opinions of
counsel as are customary in such transactions, provided, however, that any
opinion of outside counsel shall be provided at Purchaser's expense. In
connection with such a Securitization, the Purchaser may be required to engage
a master servicer or trustee to determine the allocation of payments to and
make remittances to the certificateholders, at the Purchaser's sole cost and
expense. In the event that a master servicer or trustee is requested by the
Purchaser to determine the allocation of payments and to make remittances to
the certificateholders, the Servicer agrees to service the Mortgage Loans in
accordance with the reasonable and customary requirements of such
Securitization, which may include the Servicer's acting as a subservicer in a
master servicing arrangement. With respect to the then owners of the Mortgage
Loans, the Servicer shall thereafter deal solely with such master servicer or
trustee, as the case may be with respect to such Mortgage Loans which are
subject to the Securitization and shall not be required to deal with any other
party with respect to such Mortgage Loans. The cost of such securitization
shall be borne by the Purchaser, other than the Seller's overhead or
employees' salaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND CONDITIONS
PRECEDENT TO FUNDING
Section 4.01 Representations and Warranties. The Purchaser
represents, warrants and covenants to the Seller that as of each Funding Date
or as of such date specifically provided herein:
(1) Due Organization. The Purchaser is an entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, and has all
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licenses necessary to carry on its business now being conducted and is
licensed, qualified and in good standing under the laws of each state where a
Mortgaged Property is located or is otherwise exempt under applicable law from
such qualification or is otherwise not required under applicable law to effect
such qualification; no demand for such qualification has been made upon the
Purchaser by any state having jurisdiction and in any event the Purchaser is
or will be in compliance with the laws of any such state to the extent
necessary to enforce each Mortgage Loan.
(2) Due Authority. The Purchaser had the full power and authority and
legal right to acquire the Mortgage Loans that it acquired. The Purchaser has
the full power and authority to hold each Mortgage Loan, to sell each Mortgage
Loan and to execute, deliver and perform, and to enter into and consummate,
all transactions contemplated by this Agreement. The Purchaser has duly
authorized the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Seller, constitutes a legal,
valid and binding obligation of the Purchaser, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
receivership, conservatorship, insolvency, moratorium and other laws relating
to or affecting creditors' rights generally or the rights of creditors of
banks and to the general principles of equity (whether such enforceability is
considered in a proceeding in equity or at law);
(3) No Conflict. None of the execution and delivery of this
Agreement, the purchase of the Mortgage Loans, the consummation of the
transactions contemplated hereby, or the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Purchaser's
organizational documents and bylaws or any legal restriction or any agreement
or instrument to which the Purchaser is now a party or by which it is bound,
or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Purchaser or its property is subject, or
impair the ability of the Purchaser to perform its obligations under this
Agreement;
(4) Ability to Perform. The Purchaser does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(5) No Material Default. The Purchaser is not in material default
under any agreement, contract, instrument or indenture of any nature
whatsoever to which the Purchaser is a party or by which it (or any of its
assets) is bound, which default would have a material adverse effect on the
ability of the Purchaser to perform under this Agreement, nor, to the best of
the Purchaser's knowledge, has any event occurred which, with notice, lapse of
time or both would constitute a default under any such agreement, contract,
instrument or indenture and have a material adverse effect on the ability of
the Purchaser to perform its obligations under this Agreement;
(6) Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Purchaser's knowledge,
threatened, against the Purchaser, which, either in any one instance or in the
aggregate, if determined adversely to the Purchaser would
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adversely affect the purchase of the Mortgage Loans or the execution, delivery
or enforceability of this Agreement or result in any material liability of the
Purchaser, or draw into question the validity of this Agreement, or the
Mortgage Loans or have a material adverse effect on the financial condition of
the Purchaser;
(7) Broker. The Purchaser has not dealt with any broker or agent or
anyone else who might be entitled to a fee or commission in connection with
this transaction.
(8) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Purchaser of or compliance by the Purchaser
with this Agreement, the purchase of the Mortgage Loans from the Seller or the
consummation of the transactions contemplated by this Agreement or, if
required, such approval has been obtained prior to the Funding Date;
(9) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement is in the ordinary course of business of the
Purchaser;
(10) Non-Petition Agreement. The Purchaser covenants and agrees that
it shall not, prior to the date which is one year and one day (or if longer,
the applicable preference period then in effect) after the payment in full of
all rated obligations of Xxxxxx'x Gate Residential Mortgage Trust, acquiesce,
petition or otherwise, directly or indirectly, invoke or cause Xxxxxx'x Gate
Residential Mortgage Trust to invoke the process of any governmental authority
for the purpose of commencing or sustaining a case against Xxxxxx'x Gate
Residential Mortgage Trust under any federal or state bankruptcy, insolvency
or similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or other similar official of Xxxxxx'x Gate
Residential Mortgage Trust. This covenant and agreement shall be binding upon
the Purchaser and any assignee or transferee of the Purchaser;
(11) No Untrue Information. No statement, report or other agreement,
document or instrument furnished or to be furnished by the Purchaser pursuant
to this Agreement contains or will contain any materially untrue statement of
fact or omits or will omit to state a fact necessary to make the statements
contained therein not misleading;
(12) Non-solicitation. The Purchaser agrees that it shall not solicit
any Mortgagors (in writing or otherwise) to refinance any of the Mortgage
Loans; provided that mass advertising or mailings (such as placing
advertisements on television, on radio, in magazines or in newspapers or
including messages in billing statements) that are not exclusively directed
towards the Mortgagors shall not constitute solicitation and shall not violate
this covenant;
(13) Privacy. Purchaser agrees and acknowledges that as to all
nonpublic personal information received or obtained by it with respect to any
Mortgagor: (a) such information is and shall be held by Purchaser in
accordance with all applicable law, including but not limited to the privacy
provisions of the Xxxxx-Xxxxx Bliley Act; (b) such information is in
connection with a proposed or actual secondary market sale related to a
transaction of the Mortgagor for purposes of 16 C.F.R.ss.313.14(a)(3); and (c)
Purchaser is hereby prohibited from disclosing or using any such information
other than to carry out the express provisions of this Agreement, or as
otherwise permitted by applicable law; and
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(14) MERS. The Purchaser is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS in
connection with the Purchaser's performance of its obligations under this
Agreement with respect to the Mortgage Loans, for as long as such Mortgage
Loans are registered with MERS.
Section 4.02 Conditions Precedent to Closing. Each purchase of
Mortgage Loans hereunder shall be subject to each of the following conditions:
(a) All of the representations and warranties of Seller under the PHH
Guide, and of Seller and Purchaser under this Agreement shall be true and
correct as of the Funding Date, and no event shall have occurred which,
with notice or the passage of time, would constitute an Event of Default
under this Agreement or under the PHH Guide;
(b) Purchaser shall have received, or Purchaser's attorneys shall
have received in escrow, all closing documents as specified herein, in
such forms as are agreed upon and acceptable to Purchaser, duly executed
by all signatories other than Purchaser as required pursuant to the
respective terms thereof;
(c) All other terms and conditions of this Agreement shall have been
complied with.
Subject to the foregoing conditions, Purchaser shall pay to Seller on
each Funding Date the applicable Purchase Price as provided herein.
ARTICLE V
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 5.01 PHH Mortgage to Act as Servicer; Servicing Standards;
Additional Documents; Consent of the Purchaser.
(1) The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans and REO Property from and after each Funding
Date in accordance with the terms and provisions of the Mortgage Loans,
applicable law and the terms and provisions of this Agreement for and on
behalf of, and in the best interests of, the Purchaser (without taking into
account any relationship the Servicer may have with any Mortgagor or other
Person, the participation, if any, of the Servicer in any financing provided
in connection with the sale of any Mortgaged Property, or the Servicer's
obligation to advance any expenses or incur any costs in the performance of
its duties hereunder) in accordance with a standard that is not less than the
higher of (a) the same care, skill, prudence and diligence with which it
services similar assets held for its own or its Affiliates' account and (b)
the same care, skill, prudence and diligence with which it services similar
assets for third party institutional investors, in each case giving due
consideration to customary and usual standards of practice of prudent
institutional mortgage loan servicers utilized with respect to mortgage loans
comparable to the Mortgage Loans. In addition, the Servicer shall service and
administer the Mortgage Loans in accordance with all Applicable Laws including
the Fair Credit Reporting Act and its implementing regulations (which require,
among other things, the provision of accurate and complete
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information (e.g., favorable and unfavorable) on the Servicer's borrower
credit files to Equifax, Experian and Trans Union Credit Information Company
(or the successors to such credit repository companies) on a monthly basis).
Subject to the foregoing standards, in connection with such servicing and
administration, the Servicer shall seek to maximize the timely recovery of
principal and interest on the Mortgage Notes; provided that nothing contained
herein shall be construed as an express or implied guarantee by the Servicer
of the collectibility of payments on the Mortgage Loans or shall be construed
as impairing or adversely affecting any rights or benefits specifically
provided by this Agreement to the Seller, including with respect to Servicing
Fees.
In the event that any of the Mortgage Loans included on the Mortgage
Loan Schedule for a particular Funding Date are Pledged Asset Mortgage Loans
such Pledged Asset Mortgage Loans will be serviced in accordance with Section
5.18 hereof.
(2) To the extent consistent with Section 5.01(1) and further subject
to any express limitations set forth in this Agreement, the Servicer (acting
alone or, solely in the circumstances permitted hereunder, acting through a
subservicer) shall have full power and authority to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including the power and authority (a) to execute
and deliver, on behalf of the Purchaser, customary consents or waivers and
other instruments and documents (including estoppel certificates), (b) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (c) to submit claims to collect any Insurance
Proceeds and Liquidation Proceeds, (d) to consent to the application of any
Insurance Proceeds or Condemnation Proceeds to the restoration of the
applicable Mortgaged Property or otherwise, (e) to bring an action in a court
of law, including an unlawful detainer action, to enforce rights of the
Purchaser with respect to any Mortgaged Property, (f) to execute and deliver,
on behalf of the Purchaser, documents relating to the management, operation,
maintenance, repair, leasing, marketing and sale of any Mortgaged Property or
any REO Property, and (g) to effectuate foreclosure or other conversion of the
ownership of the Mortgaged Property securing any Mortgage Loan; provided that
the Servicer shall not take any action not provided for in this Agreement that
is materially inconsistent with or materially prejudices the interest of the
Purchaser in any Mortgage Loan or under this Agreement. If reasonably
requested by the Servicer, the Purchaser shall furnish the Servicer with any
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to service and administer the Mortgage Loans and the REO
Properties, including documents relating to the foreclosure, receivership,
management, operation, maintenance, repair, leasing, marketing and sale (in
foreclosure or otherwise) of any Mortgaged Property or any REO Property.
Nothing contained in this Agreement shall limit the ability of the Servicer to
lend money to (whether on a secured or unsecured basis), and otherwise
generally engage in any kind of business or dealings with, any Mortgagor as
though the Servicer were not a party to this Agreement or to the transactions
contemplated hereby.
(3) Notwithstanding anything to the contrary contained herein:
(a) the Servicer acknowledges that the Purchaser will retain title
to, and ownership of, the Mortgage Loans and the REO Properties and that the
Servicer does not
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hereby acquire any title to, security interest in, or other rights of any kind
in or to any Mortgage Loan or REO Property or any portion thereof;
(b) the Servicer shall not file any lien or any other encumbrance on,
exercise any right of setoff against, or attach or assert any claim in or on
any Mortgage Loan or REO Property, unless authorized pursuant to a judicial or
administrative proceeding or a court order;
(c) the Servicer shall, in servicing the Mortgage Loans, follow and
comply with the servicing guidelines established by Xxxxxx Xxx, provided that
the Servicer shall specifically notify the Purchaser in writing and obtain the
Purchaser's written consent prior to the Servicer taking any of the following
actions: (1) modifying, amending or waiving any of the financial terms of, or
making any other material modifications to, a Mortgage Loan, except the
Servicer may, upon the Mortgagor's request, accept a principal prepayment and
re-amortize the then remaining principal balance over the then remaining term
of the loan (resulting in a lower scheduled monthly payment but no change in
the maturity date); (2) selling any Specially Serviced Mortgage Loan; (3)
making, with respect to any Specially Serviced Mortgage Loan or REO Property,
Servicing Advances provided that the Servicer shall not be required to so
advise the Purchaser to the extent that each related Servicing Advance as to
the related Mortgaged Property or REO Property is in the best interests of the
Purchaser or other owner of the Mortgage Loan and that are deemed to be
recoverable by the Servicer; (4) forgiving principal or interest on, or
permitting to be satisfied at a discount, any Mortgage Loan; (5) accepting
substitute or additional collateral, or releasing any collateral, for a
Mortgage Loan. If the Purchaser has not approved or rejected in writing any
proposed action(s) recommended by the Servicer to be taken hereunder within 20
Business Days of the date such recommendation is made, then the Purchaser
shall be deemed to have rejected such recommended action(s) and the Servicer
shall not take any such action(s);
(d) the Servicer shall notify the Purchaser of any modification,
waiver or amendment of any term of any Mortgage Loan and the date thereof and
shall deliver to the Purchaser, for deposit in the related Mortgage File, an
original counterpart of the agreement relating to such modification, waiver or
amendment promptly following the execution thereof;
(e) the Servicer shall remain primarily liable for the full
performance of its obligations hereunder notwithstanding any appointment by
the Servicer of a subservicer or subservicers hereunder; and
(f) the Purchaser may at any time and from time to time, in its sole
discretion, upon 10 Business Days written notice to the Servicer, terminate
the Servicer's servicing obligations hereunder with respect to (1) any REO
Property or (2) any Mortgage Loan that, in accordance with the Purchaser's
internal credit classification criteria, has been classified as "doubtful" or
a "loss." Upon the effectiveness of any such termination of the Servicer's
servicing obligations with respect to any such REO Property or Mortgage Loan,
the Servicer shall deliver all agreements, documents, and instruments related
thereto to the Purchaser, in accordance with applicable law.
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Section 5.02 Collection of Mortgage Loan Payments. Continuously from
the date hereof until the principal and interest on all Mortgage Loans are
paid in full, the Servicer will proceed diligently to collect all payments due
under each Mortgage Loan when the same shall become due and payable and shall,
to the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any related Primary Insurance Policy, follow such
collection procedures as it follows with respect to mortgage loans comparable
to the Mortgage Loans, which procedures shall in any event comply with the
servicing standards set forth in Section 5.01. Furthermore, the Servicer shall
ascertain and estimate annual ground rents, taxes, assessments, fire and
hazard insurance premiums, mortgage insurance premiums, and all other charges
that, as provided in the Mortgages, 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 5.03 Reports for Specially Serviced Mortgage Loans and
Foreclosure Sales. The Servicer shall, within five (5) calendar days following
each Record Date, deliver to the Purchaser monthly reports (substantially in
the form of Exhibit 5.03(a) and Exhibit 5.03(b) attached hereto) with respect
to all Specially Serviced Mortgage Loans. In addition, the Servicer shall,
within one (1) Business Day following the occurrence of any foreclosure sale
with respect to any Mortgaged Property, deliver to the Purchaser a notice of
foreclosure sale substantially in the form of Exhibit 5.03(c) attached hereto.
Section 5.04 Establishment of Collection Account; Deposits in
Collection Account. 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
Collection Accounts, in the form of time deposit or demand accounts. The
creation of any Collection Account shall be evidenced by a certification in
the form of Exhibit 5.04-1 attached hereto, in the case of an account
established with the Servicer, or a letter agreement in the form of Exhibit
5.04-2 attached 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 Purchaser.
On and after the related Funding Date, the Servicer shall deposit in
the Collection Account on a daily basis, within two Business Days after
receipt (or as otherwise required pursuant to this Agreement in the case of
clauses (8), (9) and (10) of this Section 5.04) and retain therein the
following payments and collections received or made by it subsequent to each
Cut-off Date, or received by it prior to the Cut-off Date but allocable to a
period subsequent thereto, other than in respect of principal and interest on
the Mortgage Loans due on or before the Cut-off Date:
(1) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(2) all payments on account of interest on the Mortgage Loans;
(3) all Liquidation Proceeds;
(4) all REO Proceeds;
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(5) all Insurance Proceeds, including amounts required to be
deposited pursuant to Sections 5.10 and 5.11, other than proceeds to be held
in the Escrow Account and applied to the restoration or repair of the
Mortgaged Properties or released to the applicable Mortgagors in accordance
with the Servicer's normal servicing procedures, the related Mortgages or
applicable law;
(6) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to a Mortgagor in accordance with the Servicer's normal
servicing procedures, the related Mortgage or applicable law;
(7) any Monthly Advances in accordance with Section 6.03;
(8) any amounts required to be deposited by the Servicer pursuant to
Section 5.11 in connection with the deductible clause in any blanket hazard
insurance policy, such deposit to be made from the Servicer's own funds
without reimbursement therefor;
(9) any amounts required to be deposited by the Servicer pursuant to
Section 5.16 in connection with any losses on Permitted Investments; and
(10) any amounts required to be deposited in the Collection Account
pursuant to Sections 7.01 or 7.02 or otherwise pursuant to the terms hereof.
The foregoing requirements for deposit in the Collection Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges
and assumption fees, to the extent permitted by Section 7.01, need not be
deposited by the Servicer in the Collection Account and shall be retained by
the Servicer as additional compensation.
Section 5.05 Permitted Withdrawals from the Collection Account. The
Servicer may, from time to time in accordance with the provisions hereof,
withdraw amounts from the Collection Account for the following purposes
(without duplication):
(1) to reimburse itself for unreimbursed Monthly Advances and
Servicing Advances that the Servicer has determined to be Non-Recoverable
Advances as provided in Section 6.04;
(2) to make payments to the Purchaser in the amounts, at the times
and in the manner provided for in Section 6.01;
(3) to reimburse itself for Monthly Advances, the Servicer's right to
reimburse itself pursuant to this Subsection (3) being limited to amounts
received on the related Mortgage Loan which represent late payments of
principal and/or interest with respect to which any such Monthly Advance was
made;
(4) to reimburse itself for unreimbursed Servicing Advances and for
unreimbursed Monthly Advances, the Servicer's right to reimburse itself
pursuant to this Subsection (4) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the
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Servicer from the Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of such reimbursement, the Servicer's right
thereto shall be prior to the rights of the Purchaser, except that, where a
Seller or the Servicer is required to repurchase (or substitute a Qualified
Substitute Mortgage Loan for) a Mortgage Loan pursuant to Sections 2.04, 3.04
and/or 7.02, the Servicer's right to such reimbursement shall be subsequent
and subordinate to the payment to the Purchaser of the applicable Repurchase
Price (or delivery of a Qualified Substitute Mortgage Loan) and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loan;
(5) to pay to itself, solely out of the interest portion of the
Monthly Payment actually received with respect to a Mortgage Loan during the
period ending on the most recent Determination Date, the Servicing Fee with
respect to such Mortgage Loan;
(6) to pay to itself as additional servicing compensation (a) any
interest earned on funds in the Collection Account (all such interest to be
withdrawn monthly not later than each Remittance Date) and (b) any prepayment
penalties or premiums relating to any Principal Prepayments; provided that no
such amounts shall be payable as servicing compensation to the extent they
relate to a Mortgage Loan with respect to which a default, breach, violation,
or event of acceleration exists or would exist but for the lapse of time, the
giving of notice, or both;
(7) to pay to itself with respect to each Mortgage Loan that has been
repurchased pursuant to Sections 2.04, 3.04 and/or 7.02 all amounts received
thereon and not distributed as of the date on which the related Repurchase
Price is determined (except to the extent that such amounts constitute part of
the Repurchase Price to be remitted to the Purchaser);
(8) to remove any amounts deposited into the Collection Account in
error;
(9) to clear and terminate the Collection Account upon the
termination of this Agreement, with any funds contained therein to be
distributed in accordance with the terms of this Agreement; and
(10) to reimburse itself for LPMI Fees, if any.
The Servicer shall keep and maintain a separate, detailed accounting,
on a Mortgage Loan-by-Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account pursuant to this Section.
Section 5.06 Establishment of Escrow Accounts; Deposits in Escrow.
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, in the form of time deposit or demand
accounts. The creation of any Escrow Account shall be evidenced by a
certification in the form shown on Exhibit 5.06-1 attached hereto, in the case
of an account established with the Servicer, or a letter agreement in the form
shown on Exhibit 5.06-2 attached hereto, in the case of an account held by a
depository other than the Servicer, such depository having been consented to
by the Purchaser. In either case, a copy of such certification or letter
agreement shall be furnished to the Purchaser.
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The Servicer shall deposit in each Escrow Account on a daily basis
within two (2) Business Days of receipt, and retain therein, (i) all Escrow
Payments collected on account of the related Mortgage Loans for the purpose of
effecting timely payment of any such items as required under the terms of this
Agreement, and (ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property. The Servicer shall make
withdrawals therefrom only to effect such payments as are required under
Sections 5.07 and/or 5.08. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid
to the Mortgagor and, to the extent required by law, the Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes, without any right of reimbursement therefor.
Section 5.07 Permitted Withdrawals From Escrow Accounts. Withdrawals
from any Escrow Account may be made by the Servicer only (i) to effect timely
payments of ground rents, taxes, assessments, water rates, hazard insurance
premiums, Primary Insurance Policy premiums, if applicable, and comparable
items constituting Escrow Payments for the related Mortgage, (ii) to reimburse
the Servicer for any Servicing Advance made by the Servicer with respect to a
related Mortgage Loan but only from amounts received on the related Mortgage
Loan that represent late payments or collections of Escrow Payments
thereunder, (iii) to refund to the Mortgagor any funds as may be determined to
be overages, (iv) if permitted by applicable law, for transfer to the
Collection Account in accordance with the terms of this Agreement, (v) for
application to the restoration or repair of the Mortgaged Property in
accordance with the terms of the related Mortgage Loan, (vi) to pay to the
Servicer, or to the Mortgagor to the extent required by law, any interest paid
on the funds deposited in the Escrow Account, (vii) to reimburse a Mortgagor
in connection with the making of the Payoff of the related Mortgage Loan or
the termination of all or part of the escrow requirement in connection with
the Mortgage Loan, (viii) to remove any amounts deposited into the Escrow
Account in error; or (ix) to clear and terminate the Escrow Account on the
termination of this Agreement.
Section 5.08 Payment of Taxes, Insurance and Other Charges;
Maintenance of Primary Insurance Policies; Collections Thereunder. With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates and
other charges which are or may become a lien upon the Mortgaged Property and
the status of Primary Insurance Policy or LPMI Policy premiums and fire and
hazard insurance coverage and shall obtain, from time to time, all bills for
the payment of such charges, including renewal premiums, and shall effect
payment thereof prior to the applicable penalty or termination date and at a
time appropriate for securing maximum discounts allowable, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage and applicable law. If a
Mortgage does not provide for Escrow Payments, then the Servicer shall require
that any such payments be 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
the Mortgagor's faithful performance in the payment of same or the making of
the Escrow Payments and shall make advances from its own funds to effect such
payments but shall be entitled to reimbursement thereof in accordance with the
terms of this Agreement.
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The Servicer shall maintain in full force and effect a Primary
Insurance Policy or LPMI Policy, conforming in all respects to the description
set forth in Section 3.03(29), issued by an insurer described in that Section,
with respect to each Mortgage Loan for which such coverage is required. Such
coverage will be maintained until the Loan-to-Value Ratio of the related
Mortgage Loan is reduced to 75% or less in the case of a Mortgage Loan having
a Loan-to-Value Ratio at origination in excess of 80% or until such time, if
any, as such insurance is required to be released in accordance with the
provisions of applicable law including, but not limited to, the Homeowners
Protection Act of 1998. The Servicer shall assure that all premiums due under
any Primary Insurance Policy or LPMI Policy are paid in a timely manner, but,
shall be entitled to reimbursement pursuant to the terms of this Agreement for
premiums paid by the Servicer on behalf of any Mortgagor who is obligated to
pay such premiums but fails to do so. The Servicer shall not cancel or refuse
to renew any Primary Insurance Policy or LPMI Policy in effect on the Funding
Date that is required to be kept in force under this Agreement unless a
replacement Primary Insurance Policy or LPMI Policy for such canceled or
nonrenewed policy is obtained from and maintained with an insurer that
satisfies the standards set forth in Section 3.03(29). The Servicer shall not
take any action which would result in noncoverage under any applicable Primary
Insurance Policy or LPMI Policy of any loss which, but for the actions of the
Servicer, would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into
pursuant to Section 7.01, the Servicer shall promptly notify the insurer under
the related Primary Insurance Policy or LPMI 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 Insurance Policy
or LPMI Policy. If such Primary Insurance Policy or LPMI Policy is terminated
as a result of such assumption or substitution of liability, then the Servicer
shall obtain, and, except as otherwise provided above, maintain, a replacement
Primary Insurance Policy or LPMI Policy as provided above. If the insurer
shall cease to be an insurer acceptable under the PHH Guidelines, the Servicer
shall determine whether recoveries under the LPMI Policy are jeopardized for
reasons related to the financial condition of such insurer, it being
understood that the Servicer shall in no event have any responsibility or
liability for any failure to recover under the LPMI Policy for such reason. If
the Servicer determines that recoveries are so jeopardized, it shall notify
the Purchaser and the Mortgagor, if required, and obtain from another insurer
acceptable under the PHH Guidelines a replacement insurance policy.
Purchaser, in its sole discretion, at any time, may (i) either obtain
an additional LPMI Policy on any Mortgage Loan which already has an LPMI
Policy in place, or (ii) obtain a LPMI Policy for any Mortgage Loan which does
not already have a LPMI Policy in place. In any event, the Servicer agrees to
administer such LPMI Policies in accordance with the Agreement or any
Reconstitution Agreement.
In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any Primary Insurance Policy or LPMI Policy in a timely fashion
in accordance with the terms of such policies and, in this regard, to take
such action as shall be necessary to permit recovery under any Primary
Insurance Policy or LPMI Policy respecting a defaulted Mortgage Loan. Pursuant
to Section 5.04, any amounts collected by the Servicer under any Primary
Insurance Policy or
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LPMI Policy shall be deposited in the Collection Account, subject to
withdrawal in accordance with Section 5.05.
Section 5.09 Transfer of Accounts. The Servicer may transfer the
Collection Account or any Escrow Account to a different depository institution
from time to time; provided that (i) no such transfer shall be made unless all
certifications or letter agreements required under Section 5.04 have been
executed and delivered by the parties thereto; and (ii) concurrently upon any
such transfer, the Servicer shall give written notice thereof to the
Purchaser. Notwithstanding anything to the contrary contained herein, the
Collection Account and each Escrow Account shall at all times constitute
Eligible Accounts.
Section 5.10 Maintenance of Hazard Insurance. The Servicer shall
cause to be maintained for each Mortgage Loan fire and hazard insurance with
extended coverage as is customary in the area where the Mortgaged Property is
located in an amount that is at least equal to the lesser of (a) the maximum
insurable value of the improvements securing such Mortgage Loan and (b) the
greater of (1) the Unpaid Principal Balance of such Mortgage Loan or (2) an
amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor and/or the loss payee from becoming a co-insurer.
If any Mortgaged Property is in an area identified by the Federal
Emergency Management Agency as having special flood hazards and such flood
insurance has been made available, then 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 lesser
of (a) the minimum amount required, under the terms of coverage, to compensate
for any damage or loss on a replacement cost basis (or the outstanding
principal balance of the related Mortgage Loan if replacement cost coverage is
not available for the type of building insured) or (b) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973,
as amended (assuming that the area in which such Mortgaged Property is located
is participating in such program).
The Servicer shall also maintain on each REO Property fire, hazard
and liability insurance, and to the extent required and available under the
Flood Disaster Protection Act of 1973, as amended, flood insurance with
extended coverage in an amount which is at least equal to the lesser of (a)
the maximum insurable value of the improvements which are a part of such
property and (b) the outstanding principal balance of the related Mortgage
Loan at the time it became an REO Property plus accrued interest at the Note
Rate and related Servicing Advances.
All such policies shall be endorsed with standard mortgagee clauses
with loss payable to the Servicer, or upon request to the Purchaser, and shall
provide for at least 30 days prior written notice of any cancellation,
reduction in the amount of, or material change in, coverage to the Servicer.
The Servicer shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided that the Servicer
shall not accept any such insurance policies from insurance companies unless
such companies (a) currently reflect (1) a general policyholder's rating of B+
or better and a financial size category of III or better in Best's Key Rating
Guide, or (2) a general policyholder's rating of "A" or "A-" or better in
Best's Key Rating Guide, and (b) are licensed to do business in the state
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wherein the related Mortgaged Property is located. Notwithstanding the
foregoing, the Servicer may accept a policy underwritten by Lloyd's of London
or, if it is the only coverage available, coverage under a state's Fair Access
to Insurance Requirement (FAIR) Plan. If a hazard policy becomes in danger of
being terminated, or the insurer ceases to have the ratings noted above, the
Servicer shall notify the Purchaser and the related Mortgagor, and shall use
its best efforts, as permitted by applicable law, to obtain from another
qualified insurer a replacement hazard insurance policy substantially and
materially similar in all respects to the original policy. In no event,
however, shall a Mortgage Loan be without a hazard insurance policy at any
time, subject only to Section 5.11.
Pursuant to Section 5.04, any amounts collected by the Servicer under
any such policies other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or REO
Property, or released to the Mortgagor in accordance with the Servicer's
normal servicing procedures, shall be deposited in the Collection Account
within two Business Days after receipt, subject to withdrawal in accordance
with Section 5.05. Any cost incurred by the Servicer in maintaining any such
insurance shall not, for the purpose of calculating remittances to the
Purchaser, be added to the unpaid principal balance of the related Mortgage
Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional
insurance need be required by the Servicer of the Mortgagor or maintained on
property acquired in respect of the Mortgage Loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
Section 5.11 Maintenance of Mortgage Impairment Insurance Policy. If
the Servicer obtains and maintains a blanket policy issued by an issuer that
has a Best's Key rating of A+:V insuring against hazard losses on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 5.10 and otherwise complies
with all other requirements of Section 5.10, it shall conclusively be deemed
to have satisfied its obligations as set forth in Section 5.10, it being
understood and agreed that such policy may contain a deductible clause, in
which case the Servicer shall, if there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section
5.10 and there shall have been one or more losses which would have been
covered by such policy, deposit in the Collection Account the amount not
otherwise payable under the blanket policy because of such deductible clause;
provided that the Servicer shall not be entitled to obtain reimbursement
therefor. In connection with its activities as servicer of the Mortgage Loans,
the Servicer agrees to prepare and present, on behalf of the Purchaser, claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy. Upon request of the Purchaser, the Servicer shall cause to be
delivered to the Purchaser a certified true copy of such policy and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Purchaser.
Section 5.12 Fidelity Bond; Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies that would meet the requirements of Xxxxxx Xxx and Xxxxxxx Mac on
all officers, employees or other Persons acting in any capacity with regard to
the Mortgage Loan to handle funds, money, documents and papers relating to the
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Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be
in the form of the "Mortgage Banker's Blanket Bond" and shall protect and
insure the Servicer against losses, including losses arising by virtue of any
Mortgage Loan not being satisfied in accordance with the procedures set forth
in Section 7.02 and/or losses resulting from or arising in connection with
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts
of or by such Persons. Such Fidelity Bond shall also protect and insure the
Servicer against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 5.12 requiring the
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 Xxxxxx Mae in the Xxxxxx Xxx
Guide and by Xxxxxxx Mac in the Xxxxxxx Mac Servicing Guide. The Servicer
shall cause to be delivered to the Purchaser on or before the Funding Date:
(i) a certified true copy of the Fidelity Bond and insurance policy; (ii) a
written statement from the surety and the insurer that such Fidelity Bond or
insurance policy shall in no event be terminated or materially modified
without 30 days' prior written notice to the Purchaser; and (iii) written
evidence reasonably satisfactory to the Purchaser that such Fidelity Bond or
insurance policy provides that the Purchaser is a beneficiary or loss payee
thereunder.
Section 5.13 Management of REO Properties. If title to any Mortgaged
Property is acquired in foreclosure or by deed in lieu of foreclosure (each,
an "REO Property"), the deed or certificate of sale shall be taken in the name
of the Servicer, or in the event the Servicer notifies the Purchaser that the
Servicer is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed
or certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an opinion of counsel obtained by the Servicer from
an attorney duly licensed to practice law in the state where the REO Property
is located. The Servicer (acting alone or through a subservicer), on behalf of
the Purchaser, shall, subject to Section 5.01(3)(c), dispose of any REO
Property pursuant to Section 5.14. Unless an appraisal prepared by an MAI
Appraiser who is Independent in accordance with the provisions of 12 C.F.R.
225.65 shall have been obtained in connection with the acquisition of such REO
Property, promptly following any acquisition by the Purchaser (through the
Servicer) of an REO Property, the Servicer shall obtain a narrative appraisal
thereof (at the expense of the Purchaser) in order to determine the fair
market value of such REO Property. The Servicer shall promptly notify the
Purchaser of the results of such appraisal. The Servicer shall also cause each
REO Property to be inspected promptly upon the acquisition of title thereto
and shall cause each REO Property to be inspected at least annually
thereafter, and Servicer shall be entitled to be reimbursed for expenses in
connection therewith in accordance with this Agreement. The Servicer shall
make or cause to be made a written report of each such inspection. Such
reports shall be retained in the Servicer's Mortgage File and copies thereof
shall be forwarded by the Servicer to the Purchaser. The Servicer shall also
furnish to the Purchaser the applicable reports required under Section 8.01.
Notwithstanding anything to the contrary contained herein, if a REMIC
election has been or is to be made with respect to the arrangement under which
the Mortgage Loans and the REO Properties are held, then the Servicer shall
manage, conserve, protect and operate each
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REO Property in a manner that does not cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or result in the receipt by such REMIC of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) or any "net
income from foreclosure property" within the meaning of Section 860G(c)(2) of
the Code (or comparable provisions of any successor or similar legislation).
The Servicer shall deposit and hold all revenues and funds collected
and received in connection with the operation of each REO Property in the
Collection Account, and the Servicer shall account separately for revenues and
funds received or expended with respect to each REO Property.
The Servicer shall have full power and authority, subject only to the
specific requirements and prohibitions of this Agreement (and, in particular,
Section 5.01(3)(c)), to do any and all things in connection with any REO
Property as are consistent with the servicing standards set forth in Section
5.01. In connection therewith, the Servicer shall deposit or cause to be
deposited on a daily basis in the Collection Account all revenues and
collections received or collected by it with respect to each REO Property,
including all proceeds of any REO Disposition. Subject to Section 5.15, the
Servicer shall withdraw (without duplication) from the Collection Account, but
solely from the revenues and collections received or collected by it with
respect to a specific REO Property, such funds necessary for the proper
operation, management and maintenance of such REO Property, including the
following:
(1) all insurance premiums due and payable in respect of such REO
Property;
(2) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon;
(3) all customary and reasonable costs and expenses necessary to
maintain, repair, appraise, evaluate, manage or operate such REO Property
(including the customary and reasonable costs incurred by any "managing agent"
retained by the Servicer in connection with the maintenance, management or
operation of such REO Property);
(4) all reasonable costs and expenses of restoration improvements,
deferred maintenance and tenant improvements; and
(5) all other reasonable costs and expenses, including reasonable
attorneys' fees, that the Servicer may suffer or incur in connection with its
performance of its obligations under this Section (other than costs and
expenses that the Servicer is expressly obligated to bear pursuant to this
Agreement).
To the extent that amounts on deposit in the Collection Account are
insufficient for the purposes set forth in clauses (1) through (5) above, the
Servicer shall, subject to Section 6.04, advance the amount of funds required
to cover the shortfall with respect thereto. The Servicer shall promptly
notify the Purchaser in writing of any failure by the Servicer to make a
Servicing Advance of the type specified in clauses (1) or (2) above
(irrespective of whether such Servicing Advance is claimed to be
non-recoverable by the Servicer pursuant to Section 6.04).
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Following the consummation of an REO Disposition, the Servicer shall
remit to the Purchaser, in accordance with Section 6.01, any proceeds from
such REO Disposition in the Collection Account following the payment of all
expenses and Servicing Advances relating to the subject REO Property.
Section 5.14 Sale of Specially Serviced Mortgage Loans and REO
Properties. Subject to Section 5.01 (and, specifically, Section 5.01(3)(c))
and Section 5.15, the Servicer shall offer to sell any REO Property in the
manner that is in the best interests of the Purchaser or other owner of the
REO, but no later than the time determined by the Servicer to be sufficient to
result in the sale of such REO Property on or prior to the time specified in
Section 5.15. In accordance with the servicing standards set forth in Section
5.01, the Servicer or designated agent of the Servicer shall solicit bids and
offers from Persons for the purchase of any Specially Serviced Mortgage Loan
or REO Property and, upon receipt thereof, promptly (but in any event within 3
Business Days) present such bids and offers to the Purchaser. The Servicer
shall not accept any bid or offer for any Specially Serviced Mortgage Loan or
REO Property except in compliance with Section 5.01(3)(c). The Purchaser may
reject any bid or offer if the Purchaser determines the rejection of such bid
or offer would be in the best interests of the Purchaser. The Purchaser shall
notify the Servicer of such determination within three (3) Business Days of
notice of any such bids from the Servicer. If the Purchaser rejects any bid or
offer, the Servicer shall, if appropriate, seek an extension of the 3 year
period referred to in Section 5.15.
Subject to Section 5.01 (and, specifically, Section 5.01(3)(c)) and
Section 5.15, the Servicer shall act on behalf of the Purchaser in negotiating
and taking any other action necessary or appropriate in connection with the
sale of any Specially Serviced Mortgage Loan or REO Property, including the
collection of all amounts payable in connection therewith. The terms of sale
of any Specially Serviced Mortgage Loan or REO Property shall be in the sole
discretion of the Purchaser. Any sale of a Specially Serviced Mortgage Loan or
any REO Disposition shall be without recourse to, or representation or
warranty by, the Purchaser or the Servicer, and, if consummated in accordance
with the terms of this Agreement, then the Servicer shall have no liability to
the Purchaser with respect to the purchase price therefor accepted by the
Purchaser. The proceeds of any sale after deduction of the expenses of such
sale incurred in connection therewith shall be promptly deposited in (a) if
such sale is an REO Disposition, in the Collection Account in accordance with
Section 5.13 and (b) in any other circumstance, the Collection Account in
accordance with Section 5.04.
Section 5.15 Realization Upon Specially Serviced Mortgage Loans and
REO Properties. Subject to Section 5.01(3)(c), the Servicer shall foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the Specially Serviced Mortgage Loans as come into and continue in default
and as to which (a) in the reasonable judgment of the Servicer, no
satisfactory arrangements can, in accordance with prudent lending practices,
be made for collection of delinquent payments pursuant to Section 5.01 and (b)
such foreclosure or other conversion is otherwise in accordance with Section
5.01. The Servicer shall not be required to expend its own funds in connection
with any foreclosure or towards the restoration, repair, protection or
maintenance of any property unless it shall determine that such expenses will
be recoverable to it as Servicing Advances either through Liquidation Proceeds
or through Insurance Proceeds (in accordance with Section 5.05) or from any
other source relating to the Specially Serviced Mortgage Loan. The Servicer
shall be required to advance funds for all
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other costs and expenses incurred by it in any such foreclosure proceedings;
provided that it shall be entitled to reimbursement thereof from the proceeds
of liquidation of the related Mortgaged Property, as contemplated by Section
5.05.
Upon any Mortgaged Property becoming an REO Property, the Servicer
shall promptly notify the Purchaser thereof, specifying the date on which such
Mortgaged Property became an REO Property. Pursuant to its efforts to sell
such REO Property, the Servicer shall, either itself or through an agent
selected by it, protect and conserve such REO Property in accordance with the
servicing standards set forth in Section 5.01 and may, subject to Section
5.01(3)(c) and incident to its conservation and protection of the interests of
the Purchaser, rent the same, or any part thereof, for the period to the sale
of such REO Property.
Notwithstanding anything to the contrary contained herein, the
Purchaser shall not, and the Servicer shall not on the Purchaser's behalf,
acquire any real property (or personal property incident to such real
property) except in connection with a default or a default that is imminent on
a Mortgage Loan. If the Purchaser acquires any real property (or personal
property incident to such real property) in connection with such a default,
then such property shall be disposed of by the Servicer in accordance with
this Section and Section 5.14 as soon as possible but in no event later than 3
years after its acquisition by the Servicer on behalf of the Purchaser, unless
the Servicer obtains, at the expense of the Purchaser, in a timely fashion an
extension from the Internal Revenue Service for an additional specified
period.
Any recommendation of the Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO Property,
net of reimbursement to the Servicer for Servicing Advances and fees for
work-out compensation in accordance with the Xxxxxxx Mac Servicing Guide,
incurred with respect to such REO Property under Section 5.13, shall be
applied to the payment of the costs and expenses set forth in Section 5.13(4),
with any remaining amounts to be promptly deposited in the Collection Account
in accordance with Section 5.13.
If, in the exercise of its servicing obligations with respect to any
Mortgaged Property hereunder, the Servicer deems it is necessary or advisable
to obtain an Environmental Assessment, then the Servicer shall so obtain an
Environmental Assessment, it being understood that all reasonable costs and
expenses incurred by the Servicer in connection with any such Environmental
Assessment (including the cost thereof) shall be deemed to be Servicing
Advances recoverable by the Servicer pursuant to Section 5.13(4). Such
Environmental Assessment shall (a) assess whether (1) such Mortgaged Property
is in material violation of applicable Environmental Laws or (2) after
consultation with an environmental expert, taking the actions necessary to
comply with applicable Environmental Laws is reasonably likely to produce a
greater recovery on a net present value basis than not taking such actions,
and (b) identify whether (1) any circumstances are present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
materials for which investigation, testing, monitoring, containment, clean-up
or re mediation could be required under any federal, state or local law or
regulation, or (2) if such circumstances exist, after consultation with an
environmental expert, taking such actions is reasonably likely to produce a
greater recovery on a present value basis than not taking such actions. (The
conditions described in the immediately preceding clauses (a)
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and (b) shall be referred to herein as "Environmental Conditions Precedent to
Foreclosure.") If any such Environmental Assessment so warrants, the Servicer
is hereby authorized to and shall perform such additional environmental
testing as it deems necessary and prudent to establish the satisfaction of the
foregoing Environmental Conditions Precedent to Foreclosure or to proceed as
set forth below (such additional testing thereafter being included in the term
"Environmental Assessment").
If an Environmental Assessment deemed necessary or advisable by the
Servicer in accordance with this Section 5.15 establishes that any of the
Environmental Conditions Precedent to Foreclosure is not satisfied with
respect to any Mortgaged Property, but the Servicer in good faith reasonably
believes that it is in the best economic interest of the Purchaser to proceed
against such Mortgaged Property and, if title thereto is acquired, to take
such remedial, corrective or other action with respect to the unsatisfied
condition or conditions as may be prescribed by applicable law to satisfy such
condition or conditions, then the Servicer shall so notify the Purchaser. If,
pursuant to Section 5.01(3)(c), the Purchaser has notified the Servicer in
writing to proceed against such Mortgaged Property, then the Servicer shall so
proceed. The cost of any remedial, corrective or other action contemplated by
the preceding sentence in respect of any of the Environmental Conditions
Precedent to Foreclosure that is not satisfied shall not be an expense of the
Servicer and the Servicer shall not be required to expend or risk its own
funds or otherwise incur any financial liability in connection with any such
action.
If an Environmental Assessment deemed necessary or advisable by the
Servicer in accordance with this Section 5.15 establishes that any of the
Environmental Conditions Precedent to Foreclosure is not satisfied with
respect to any Mortgaged Property and, in accordance with Section 5.01(3)(c),
the Purchaser elects or is deemed to have elected not to proceed against such
Mortgaged Property, then the Servicer shall, subject to Section 5.01(3)(c),
take such action as it deems to be in the best economic interest of the
Purchaser (other than proceeding against the Mortgaged Property or directly or
indirectly becoming the owner or operator thereof) as determined in accordance
with the servicing standard set forth in Section 5.01 and is hereby authorized
at such time as it deems appropriate to release such Mortgaged Property from
the lien of the related Mortgage.
Prior to the Servicer taking any action with respect to the use,
management or disposal of any hazardous materials on any Mortgaged Property,
the Servicer shall request the approval of the Purchaser in accordance with
Section 5.01(3)(c) and, if such action is approved by the Purchaser, (a) keep
the Purchaser apprised of the progress of such action; and (b) take such
action in compliance with all applicable Environmental Laws.
Section 5.16 Investment of Funds in the Collection Account. The
Servicer may direct any depository institution which holds the Collection
Account to invest the funds in the Collection Account in one or more Permitted
Investments bearing interest. All such Permitted Investments shall be held to
maturity, unless payable on demand. In the event amounts on deposit in the
Collection Account are at any time invested in a Permitted Investment payable
on demand, the Servicer shall:
(a) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted
Investment may otherwise
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mature hereunder in an amount equal to the lesser of (1) all amounts then
payable thereunder and (2) the amount required to be withdrawn on such
date; and (b) demand payment of all amounts due thereunder promptly upon
determination by the Servicer or notice from the Purchaser that such
Permitted Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in the Collection Account.
All income and gain realized from investment of funds deposited in
the Collection Account shall be for the benefit of the Servicer and shall be
subject to its withdrawal in accordance with Section 5.05. The Servicer shall
deposit in the Collection Account the amount of any loss incurred in respect
of any Permitted Investment immediately upon realization of such loss.
Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment,
or if a default occurs in any other performance required under any Permitted
Investment, the Purchaser may elect to take such action, or instruct the
Servicer to take such action, as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings, at the expense of the Servicer.
Section 5.17 MERS. In the case of each MERS Mortgage Loan, the
Servicer shall, as soon as practicable after the Purchaser's request (but in
no event more than 30 days thereafter with respect to each Mortgage Loan that
was a MERS Mortgage Loan as of the Funding Date, or 90 days thereafter with
respect to each Mortgage Loan that was a MERS Eligible Mortgage Loan as of the
Funding Date and subsequent to the Funding Date becomes a MERS Mortgage Loan),
the Servicer shall take such actions as are necessary to cause the Purchaser
to be clearly identified as the owner of each MERS Mortgage Loan on the
records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS. Each of the Purchaser
and the Servicer shall maintain in good standing its membership in MERS. In
addition, each of the Purchaser and the Servicer shall comply with all rules,
policies and procedures of MERS, including the Rules of Membership, as
amended, and the MERS Procedures Manual, as amended. With respect to all MERS
Mortgage Loans serviced hereunder, the Servicer shall promptly notify MERS as
to any transfer of beneficial ownership or release of any security interest in
such Mortgage Loans. The Servicer shall cooperate with the Purchaser and any
successor owner or successor servicer to the extent necessary to ensure that
any transfer of ownership or servicing is appropriately reflected on the MERS
system.
Section 5.18 Pledged Asset Mortgage Loans,
(a) Representations of Servicer
(1) Servicer hereby represents and warrants to Purchaser
that prior to its assignment to Purchaser of the security interest in
and to any Pledged Assets set forth in Section 5.18(b) hereof,
Servicer had a first priority perfected security interest in each
Securities Account, and/or, if necessary to perfect a first priority
security interest in each asset contained
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in such Securities Account, a first priority perfected security
interest in each such asset contained in such Securities Account and
following Servicer's assignment of the Pledged Asset Agreements and
such security interest in and to any Pledged Assets, Purchaser has a
first priority perfected security interest in each Securities
Account, and/or, if necessary to perfect a first priority security
interest in each asset contained in such Securities Account, a
perfected first priority security interest in each such asset
contained in such Securities Account. Servicer hereby represents and
warrants to Purchaser that prior to the related Pledged Asset
Servicer's assignment to the Servicer of the security interest in and
to any Pledged Assets, the related Pledged Asset Servicer had a first
priority perfected security interest in each Securities Account,
and/or, if necessary to perfect a first priority security interest in
each asset contained in such Securities Account, a first priority
perfected security interest in each such asset contained in such
Securities Account and following such Pledged Asset Servicer's
assignment of the Pledged Asset Agreements and such security interest
in and to any Pledged Assets, the Servicer had a first priority
perfected security interest in each Securities Account, and/or, if
necessary to perfect a first priority security interest in each asset
contained in such Securities Account, a perfected first priority
security interest in each such asset contained in such Securities
Account.
(2) Servicer represents and warrants to Purchaser that each
Pledged Asset Mortgage Loan is insured under the terms and provisions
of a Surety Bond subject to the limitations set forth therein.
Servicer covenants that within 2 Business Days after the Funding Date
for any purchase of Pledged Asset Mortgage Loans, Servicer will
deliver to each Surety Bond Issuer any instrument required to be
delivered under the related Surety Bond, executed by the necessary
parties, and that all other requirements for transferring coverage
under the related Surety Bonds in respect of such Pledged Asset
Mortgage Loans to the Purchaser shall be complied with. Servicer
shall indemnify Purchaser and hold it harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that are related to or arise from the
non-payment of Required Surety Payments with respect to the Pledged
Asset Mortgage Loans purchased by Purchaser from applicable Seller
under this Agreement. The indemnification obligation provided in this
subparagraph 2 with respect to each Pledged Asset Mortgage Loan shall
expire upon receipt by the related Surety Bond Issuer of the
necessary documentation referred to in this paragraph, signed by the
appropriate parties thereto.
(3) Servicer represents and warrants that the assignment of
rights to Purchaser under each Surety Bond, as described herein, will
not result in Purchaser assuming any obligations or liabilities of
Servicer with respect thereto.
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(4) Servicer represents and warrants that each Pledged Asset
Servicing Agreement and the Pledge Agreements are in full force and
effect as of the Funding Date and their provisions have not been
waived, amended or modified in any respect, nor has any notice of
termination been given thereunder. Servicer represents to Purchaser
that as of the Funding Date, neither Servicer nor any Pledged Asset
Servicer is in default under the related Pledged Asset Servicing
Agreement.
(b) Assignment of Security Interest.
(1) With respect to each Pledged Asset Mortgage Loan sold to
Purchaser under this Agreement, the Servicer hereby assigns to the
Purchaser its security interest in and to any related Pledged Assets,
all of its rights in each related Pledge Agreement, its right to
receive amounts due or to become due in respect of any related
Pledged Assets and its rights as beneficiary under the related Surety
Bond in respect of any Pledged Asset Mortgage Loans.
(c) Servicing of Pledged Assets.
(1) The parties acknowledge that pursuant to each Pledged
Asset Servicing Agreement between Servicer and the related Pledged
Asset Servicer, the Securities Accounts and other Pledged Assets in
which Purchaser shall (pursuant to the terms of this Agreement) have
a security interest, shall continue to be maintained and serviced by
such Pledged Asset Servicer. Servicer represents and warrants that
the terms of each Pledged Asset Servicing Agreement are not
inconsistent with any of the provisions of this Agreement. Subject to
subsection (c)(2) below, the Servicer shall service and administer
the Securities Accounts and other Pledged Assets, in accordance with
(i) prudent business practices and procedures employed in the
industry to administer securities accounts and additional collateral
similar to that securing the Pledged Asset Mortgage Loans; (ii) the
terms of the related Pledge Agreements; and (iii) the terms of this
Agreement. Servicer's obligations under this Section 5.18(c) will be
subject to the provisions of Section 9.04 hereof.
(2) Notwithstanding any other provision of this Agreement to
the contrary, except as provided below in this subsection (c)(2), the
Servicer shall have no duty or obligation to service and administer
the Pledged Assets, and the Servicer shall not be deemed to be the
Pledged Asset Servicer with respect to any Pledged Asset Mortgage
Loan, unless and until the related Pledged Asset Servicer's
obligations to administer the Pledged Asset as provided in the
related Pledged Asset Servicing Agreement have been terminated with
respect to such Pledged Asset Mortgage Loans sold hereunder, in which
case the Servicer shall be bound to service and administer the
related Pledged Assets and the related Surety Bond in accordance with
the provisions of this Agreement and the related
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Xxxxxx Xxxxxxxxxx, from the date of such termination. The Servicer
shall enforce the obligations of each Pledged Asset Servicer to
service and administer the Pledged Assets as provided in the related
Pledged Asset Servicing Agreement, and shall take appropriate action
thereunder if any Pledged Asset Servicer fails to substantially
comply with its obligations to administer the Pledged Assets. Such
enforcement, including without limitation, the legal prosecution of
claims, termination of the related Pledged Asset Servicing Agreement
with respect to the related Pledged Asset Mortgage Loans, and the
pursuit of other appropriate remedies, shall be carried out as the
Servicer, in its good faith business judgment, would require were it
the owner of the related Securities Accounts and other Pledged
Assets. Without in any way limiting any other remedies set forth
herein, Servicer shall indemnify Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses (collectively,
"Losses") that arise with respect to Pledged Asset Mortgage Loans
purchased by Purchaser from Servicer hereunder, provided that (i)
such Losses are caused by the related Pledged Asset Servicer's
failure to administer the Pledged Assets as provided in the related
Pledged Asset Servicing Agreement and in a manner consistent with the
standard set forth in subsection (c)(l) above, (ii) the
indemnification contained in this subsection (c)(2) will in no event
exceed the Original Pledged Asset Requirement for the related Pledged
Asset Mortgage Loan, and (iii) such indemnification liability shall
be offset to the extent that the Losses are covered by a Required
Surety Payment.
(3) The related Pledged Asset Servicer shall use its best
reasonable efforts to realize upon any related Pledged Assets for
such of the Pledged Asset Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for
collection of delinquent payments; provided that the related Pledged
Asset Servicer shall not obtain title to any such Pledged Assets as a
result of or in lieu of the disposition thereof or otherwise; and
provided further that (i) the related Pledged Asset Servicer shall
not proceed with respect to such Pledged Assets in any manner that
would impair the ability to recover against the related Mortgaged
Property, and (ii) the Servicer shall proceed with any acquisition of
REO Property in a manner that preserves the ability to apply the
proceeds of such Pledged Assets against amounts owed under the
defaulted Mortgage Loan. Any proceeds realized from such Pledged
Assets (other than amounts to be released to the Mortgagor or the
related guarantor in accordance with procedures that the Servicer
would follow in servicing loans held for its own account, subject to
the terms and conditions of the related Mortgage and Mortgage Note
and to the terms and conditions of any security agreement, guarantee
agreement, mortgage or other agreement governing the disposition of
the proceeds of such Pledged Assets) shall be deposited in the
Collection Account, subject to
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withdrawal pursuant to Section 5.05 hereof; provided, that such
proceeds shall not be so deposited if the Required Surety Payment in
respect of such Pledged Asset Mortgage Loan has been deposited in the
Collection Account or otherwise paid to the Purchaser (except to the
extent of any such proceeds taken into account in calculating the
amount of the Required Surety Payment).
(4) Servicer's obligations to administer the Securities
Accounts shall terminate upon termination of the related Pledged
Asset Agreement. Purchaser acknowledges coverage under the terms and
provisions of the related Surety Bond as to any particular Pledged
Asset Mortgage Loan shall terminate upon termination of the related
Pledged Asset Agreement; provided, however, that such termination
shall not affect claims arising under this Agreement or the related
Surety Bond prior to the date of termination of the related Pledged
Asset Agreement.
(5) The Pledged Asset Servicer with respect to each Pledged
Asset Mortgage Loan may, without the consent of the Purchaser, amend
or modify a Pledged Asset Agreement in any non-material respect to
reflect administrative or account changes, provided that the same are
consistent with the PHH Guide.
(d) Surety Bonds
(1) If a Required Surety Payment is payable pursuant to the
related Surety Bond with respect to any Pledged Asset Mortgage Loan,
as determined by the Servicer, the related Pledged Asset Servicer
shall so notify the related Surety Bond Issuer promptly. The Servicer
shall cause the prompt completion of any necessary documentation
relating to the related Surety Bond and shall cause the prompt
submission of such documentation to the related Surety Bond Issuer as
a claim for a required surety. The Purchaser shall execute such
documentation if requested by the related Pledged Asset Servicer.
(2) In the event that the Servicer receives a Required
Surety Payment from a Surety Bond Issuer on behalf of the Purchaser,
the Servicer shall deposit such Required Surety Payment in the
Collection Account and shall distribute such Required Surety Payment,
or the proceeds thereof, in accordance with the provisions hereof
applicable to Insurance Proceeds.
Purchaser will cooperate with Servicer to transfer to Purchaser the coverage
of each Surety Bond in respect of the related Pledged Asset Mortgage Loans.
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ARTICLE VI
REPORTS; REMITTANCES; ADVANCES
Section 6.01 Remittances. (1) On each Remittance Date, the Servicer
shall remit to the Purchaser (a) all amounts credited to the Collection
Account as of the close of business on the last day of the related Due Period
and all Principal Prepayments credited to the Collection Account as of the
close of business on the last day of the related Prepayment Period (including
(1) the amount of any Payoff, together with interest thereon at the related
Remittance Rate to the end of the month in which prepayment of the related
Mortgage Loan occurs and (2) all proceeds of any REO Disposition net of
amounts payable to the Servicer pursuant to Section 5.13), net of charges
against or withdrawals from the Collection Account in accordance with Section
5.05, which charges against or withdrawals from the Collection Account the
Servicer shall make solely on such Remittance Date, plus (b) all Monthly
Advances, if any, which the Servicer is obligated to remit pursuant to Section
6.03; provided that the Servicer shall not be required to remit, until the
next following Remittance Date, any amounts attributable to Monthly Payments
collected but due on a Due Date or Dates subsequent to the related Due Period.
(2) All remittances made to the Purchaser on each Remittance Date
will be made to the Purchaser by wire transfer of immediately available funds
according to the instructions that will be provided by Purchaser to the
Servicer.
(3) With respect to any remittance received by the Purchaser after
the Business Day on which such payment was due, the Servicer shall pay to the
Purchaser interest on any such late payment at an annual rate equal to the
Prime Rate (as published in the Wall Street Journal) plus 2 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 Purchaser 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 on which
such payment is made, both inclusive. Such interest shall be remitted along
with such late payment. Neither the payment by the Servicer nor the acceptance
by the Purchaser of any such interest shall be deemed an extension of time for
payment or a waiver by the Purchaser of any Event of Default.
Section 6.02 Reporting. On or before the 5th calendar day (or, if
such day is not a Business Day, on the immediately succeeding Business Day) of
each month during the term hereof, the Servicer shall deliver to the Purchaser
monthly accounting reports in the form of Exhibits 6.02(a) through 6.02(g)
attached hereto with respect to the most recently ended Monthly Period. Such
monthly accounting reports shall include information as to the aggregate
Unpaid Principal Balance of all Mortgage Loans, the scheduled amortization of
all Mortgage Loans, any delinquencies as of the most recently ended Due Period
and the amount of any Principal Prepayments as of the most recently ended
Prepayment Period.
The Servicer shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return as the Purchaser may reasonably request from time to
time.
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Section 6.03 Monthly Advances by the Servicer. (1) Not later than the
close of business on the Business Day immediately preceding each Remittance
Date, the Servicer shall deposit in the Collection Account an amount equal to
all Monthly Payments not previously advanced by the Servicer (with interest
adjusted to the Remittance Rate) that were due on a Mortgage Loan and
delinquent at the close of business on the related Determination Date. The
Servicer may reduce the total amount to be deposited in the Collection Account
as required by the foregoing sentence by the amount of funds in the Collection
Account which represent Prepaid Monthly Payments; provided, however, that the
Servicer must meet the criteria of the Rating Agencies at the time that the
Servicer proposes to use Prepaid Monthly Payments for the making of any
Monthly Advance required to be made by the Servicer pursuant to this
Agreement.
(2) The Servicer's obligations to make Monthly Advances as to any
Mortgage Loan will continue through the last Monthly Payment due prior to the
payment in full of the Mortgage Loan, or through the Remittance Date prior to
the Remittance Date for the remittance of all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds or Condemnation Proceeds)
with respect to the Mortgage Loan; provided that such obligation shall cease
if the Servicer furnishes to the Purchaser an Officers' Certificate evidencing
the determination by the Servicer in accordance with Section 6.04 that an
advance with respect to such Mortgage Loan would constitute a Non-recoverable
Advance.
Section 6.04 Non-recoverable Advances. The determination by the
Servicer that it has made a Non-recoverable Advance or that any Monthly
Advance or Servicing Advance, if made, would constitute a Non-recoverable
Advance shall be evidenced by an Officers' Certificate delivered to the
Purchaser detailing the reasons for such determination.
Section 6.05 Itemization of Servicing Advances. The Servicer shall
provide the Purchaser with an itemization of all Servicing Advances incurred
or made by the Servicer hereunder as the Purchaser may from time to time
reasonably request.
Section 6.06 Officer's Certificate. The Seller shall deliver to the
Purchaser an Officer's Certificate in the form attached hereto as Exhibit 9 on
the Initial Funding Date and upon Purchaser's reasonable request thereafter.
Section 6.07 Compliance with REMIC Provisions. If a REMIC election
has been made with respect to the arrangement under which the Mortgage Loans
and REO Property are held, the Servicer shall not take any action, cause the
REMIC to take any action or fail to take (or fail to cause to be taken) any
action that, under the REMIC Provisions, if taken or not taken, as the case
may be, could (i) endanger the status of the REMIC as a REMIC or (ii) result
in the imposition of a tax upon the REMIC )including but not limited to the
tax on "prohibited transactions" as defined in Section 860G(a)(2) of the Code
and the tax on "contributions" to a REMIC set forth in Section 860(D) of the
Code) unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
tax.
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ARTICLE VII
GENERAL SERVICING PROCEDURE
Section 7.01 Enforcement of Due-on-Sale Clauses, Assumption
Agreements. (1) The Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged
Property (whether by absolute conveyance or by contract of sale, and whether
or not the Mortgagor remains or is to remain liable under the Mortgage Note
and/or the Mortgage), exercise its rights to accelerate the maturity of such
Mortgage Loan under any " due-on-sale" clause applicable thereto; provided
that the Servicer shall not exercise any 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.
(2) If the Servicer is prohibited from enforcing such "due-on-sale"
clause, then the Servicer will enter into an assumption agreement with the
Person to whom the Mortgaged Property has been conveyed or is proposed to be
conveyed, pursuant to which such Person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. (For purposes of this Section 7.01, the term "assumption" is
deemed to also include a sale of the Mortgaged Property subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.) If any Mortgage Loan is to be assumed, then the Servicer shall
inquire into the creditworthiness of the proposed transferee and shall use the
same underwriting criteria for approving the credit of the proposed transferee
that are used with respect to underwriting mortgage loans of the same type as
the Mortgage Loans. Where an assumption is allowed, the Servicer, with the
prior written consent of the primary mortgage insurer, if any, and subject to
the conditions of Section 7.01(3), shall, and is hereby authorized to, enter
into a substitution of liability agreement with the Person to whom the
Mortgaged Property is proposed to be conveyed pursuant to which the original
mortgagor is released from liability and such Person is substituted as
mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption
agreement. In no event shall the Note Rate, the amount of the Monthly Payment
or the final maturity date be changed. The Servicer shall notify the Purchaser
that any such substitution of liability or assumption agreement has been
completed by forwarding to the Purchaser the original of any such substitution
of liability or assumption agreement, which document shall be added to the
related Purchaser's Mortgage File and shall, for all purposes, be considered a
part of such Purchaser's Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. Any fee collected by
the Servicer for entering into an assumption or substitution of liability
agreement shall be retained by the Servicer as additional compensation for
servicing the Mortgage Loans.
(3) If the credit of the proposed transferee does not meet such
underwriting criteria, then the Servicer shall, to the extent permitted by the
Mortgage or the Mortgage Note and by applicable law, accelerate the maturity
of the Mortgage Loan.
Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, the Servicer will immediately
notify the Purchaser by a certification of a Servicing Officer, which
certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required
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to be deposited in the Collection Account pursuant to Section 5.04 have been
or will be so deposited and shall request delivery to it of the Purchaser's
Mortgage File held by the Purchaser. Upon receipt of such certification and
request, the Purchaser shall promptly release the related mortgage documents
to the Servicer and the Servicer shall promptly prepare and process any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Collection
Account.
If the Servicer satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage, or
should it otherwise take such action which results in a reduction of the
coverage under the Primary Insurance Policy, if any, then the Servicer shall
promptly give written notice thereof to the Purchaser, and, within 10 Business
Days following written demand therefor from the Purchaser to the Servicer, the
Servicer shall repurchase the related Mortgage Loan by paying to the Purchaser
the Repurchase Price therefor by wire transfer of immediately available funds
directly to the Purchaser's Account.
From time to time and as appropriate for the servicing or foreclosure
of the Mortgage Loan, including for this purpose collection under any Primary
Insurance Policy, the Purchaser shall, upon request of the Servicer and
delivery to the Purchaser of a servicing receipt signed by a Servicing
Officer, release the Purchaser's Mortgage File held by the Purchaser to the
Servicer. Such servicing receipt shall obligate the Servicer to return the
related mortgage documents to the Purchaser when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Collection Account or the Purchaser's Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or
other proceedings for the foreclosure of the Mortgaged Property either
judicially or nonjudicially, and the Servicer has delivered to the Purchaser a
certificate of a Servicing Officer certifying as to the name and address of
the Person to which such Purchaser's Mortgage File or such document was
delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated and the Liquidation Proceeds were deposited in the Collection
Account, the servicing receipt shall be released by the Purchaser to the
Servicer.
Section 7.03 Servicing Compensation. As compensation for its services
hereunder, the Servicer shall be entitled to retain from interest payments on
the Mortgage Loans the amounts provided for as the Servicing Fee. The
Servicing Fee in respect of a Mortgage Loan for a particular month shall
become payable only upon the receipt by the Servicer from the Mortgagor of the
full Monthly Payment in respect of such Mortgage Loan. Additional servicing
compensation in the form of assumption fees, as provided in Section 7.01, late
payment charges and other servicer compensation for modifications, short
sales, and other shall be retained by the Servicer to the extent not required
to be deposited in the Collection Account. The Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided for herein.
Section 7.04 Annual Statement as to Compliance. The Servicer will
deliver to the Purchaser on or before March 15, 2006, an Officers' Certificate
stating that (i) a review of the activities of the Servicer during the
preceding calendar year and of performance under this Agreement has been made
under such officers' supervision, (ii) the Servicer has fully complied
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with the provisions of this Agreement and (iii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.
Section 7.05 Annual Independent Certified Public Accountants'
Servicing Report. On or before March 15, 2006, the Servicer at its expense
shall cause a firm of independent public accountants which is a member of the
American Institute of Certified Public Accountants to furnish a statement to
the Purchaser to the effect that such firm has examined certain documents and
records relating to the servicing of mortgage loans by the Servicer generally
that include a sampling of the Mortgage Loans, the provisions of Article VI
have been complied with and, on the basis of such an examination conducted
substantially in accordance with the Uniform Single Attestation Program for
Mortgage Bankers, such servicing has been conducted in compliance with this
Agreement, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement.
Section 7.06 Purchaser's Right to Examine Servicer Records. The
Purchaser shall have the right to examine and audit, during business hours or
at such other times as are reasonable under applicable circumstances, upon ten
days advance notice any and all of (i) the Servicing Files and any credit and
other loan files relating to the Mortgage Loans or the Mortgagors, (ii) any
and all books, records, documentation or other information of the Servicer
(whether held by the Servicer or by another) relating to the servicing of the
Mortgage Loans and (iii) any and all books, records, documentation or other
information of the Servicer (whether held by the Servicer or by another) that
are relevant to the performance or observance by the Servicer of the terms,
covenants or conditions of this Agreement. The Servicer shall be obligated to
make the foregoing information available to the Purchaser at the site where
such information is stored; provided that the Purchaser shall be required to
pay all reasonable costs and expenses incurred by the Servicer in making such
information available.
Section 7.07 Annual Certification. In the event that any of the
Mortgage Loans purchased by the Purchaser pursuant to the terms of this
Agreement are subject to a Securitization, the Servicer will deliver to the
Purchaser, on or before March 15 of each year commencing in the year
immediately following such Securitization, a certification substantially in
the form attached hereto as Exhibit 12.
ARTICLE VIII
REPORTS TO BE PREPARED BY THE SERVICER
Section 8.01 The Servicer's Reporting Requirements.
Electronic Format. If requested by the Purchaser, the Servicer shall
supply any and all information regarding the Mortgage Loans and the REO
Properties, including all reports required to be delivered pursuant to Section
5.03, Section 6.02 and this Section 8.01, to the Purchaser in electronic
format reasonably acceptable to Purchaser, unless otherwise limited by the
servicing system utilized by the Servicer.
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Additional Reports; Further Assurances. On or before the 3rd Business
Day preceding each Determination Date, the Servicer shall deliver to the
Purchaser (i) a report, acceptable to the Purchaser, describing in reasonable
detail all Mortgage Loans that are 90 days or more delinquent and the
Servicer's activities in connection with such delinquencies and (ii) a report
(substantially in the form of Exhibit 8.01 attached hereto) with respect to
delinquent Mortgage Loans. Utilizing resources reasonably available to the
Servicer without incurring any cost except the Servicer's overhead and
employees' salaries, the Servicer shall furnish to the Purchaser during the
term of this Agreement such periodic, special or other reports, information or
documentation, whether or not provided for herein, as shall be reasonably
requested by the Purchaser with respect to Mortgage Loans or REO Properties
(provided the Purchaser shall have given the Servicer reasonable notice and
opportunity to prepare such reports, information or documentation), including
any reports, information or documentation reasonably required to comply with
any regulations of any governmental agency or body having jurisdiction over
the Purchaser, all such reports or information to be as provided by and in
accordance with such applicable instructions and directions as the Purchaser
may reasonably request. If any of such reports are not customarily prepared by
the Servicer or require that the Servicer program data processing systems to
create the reports, then the Purchaser shall pay to the Servicer a fee
mutually agreed to by the Purchaser and the Servicer taking into account the
Servicer's actual time and cost in preparing such reports. The Servicer agrees
to execute and deliver all such instruments and take all such action as the
Purchaser, from time to time, may reasonably request in order to effectuate
the purposes and to carry out the terms of this Agreement.
Section 8.02 Financial Statements. The Servicer understands that, in
connection with marketing the Mortgage Loans, the Purchaser may make available
to any prospective purchaser of the Mortgage Loans the Servicer's audited
financial statements for its fiscal year 2004 and its audited financial
statements for fiscal year 2005, together with any additional statements
provided pursuant to the next sentence. During the term hereof, the Servicer
will deliver to the Purchaser audited financial statements for each of its
fiscal years following the Funding Date and all other financial statements
prepared following the Funding Date to the extent any such statements are
available upon request to the public at large.
The Servicer also agrees to make available upon reasonable notice and
during normal business hours to any prospective purchasers of the Mortgage
Loans a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Servicer or
the financial statements of the Servicer which may affect, in any material
respect, the Servicer's ability to comply with its obligations under this
Agreement, and to permit any prospective purchasers upon reasonable notice and
during normal business hours to inspect the Servicer's servicing facilities
for the purpose of satisfying such prospective purchasers that the Servicer
has the ability to service the Mortgage Loans in accordance with this
Agreement.
ARTICLE IX
THE SELLERS
Section 9.01 Indemnification; Third Party Claims. Each Seller shall
indemnify and hold harmless the Purchaser, its directors, officers, agents,
employees, and assignees (each, an "Indemnified Party") from and against any
costs, damages, expenses (including reasonable
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attorneys' fees and costs, irrespective of whether or not incurred in
connection with the defense of any actual or threatened action, proceeding, or
claim), fines, forfeitures, injuries, liabilities or losses ("Losses")
suffered or sustained in any way by any such Person, no matter how or when
arising (including Losses incurred or sustained in connection with any
judgment, award, or settlement), in connection with or relating to (i) a
breach by such Seller of any of its representations and warranties contained
in Article III or (ii) a breach by such Seller of any of its covenants and
other obligations contained herein including any failure to service the
Mortgage Loans in strict compliance with the terms hereof and in accordance
with the standard of care in Section 9.03. The applicable Seller shall
immediately (i) notify the Purchaser if a claim is made by a third party with
respect to this Agreement, any Mortgage Loan and/or any REO Property (ii)
assume (with the prior written consent of the Purchaser) the defense of any
such claim and pay all expenses in connection therewith, including attorneys'
fees, and (iii) promptly pay, discharge and satisfy any judgment, award, or
decree that may be entered against it or the Purchaser in respect of such
claim. Nothing contained herein shall prohibit the Purchaser, at its expense,
from retaining its own counsel to assist in any such proceedings or to observe
such proceedings; provided that neither Seller shall be obligated to pay or
comply with any settlement to which it has not consented. The Servicer shall
be reimbursed from amounts on deposit in the Collection Account for all
amounts advanced by it pursuant to the second preceding sentence except when
the claim in any way relates to the Servicer's indemnification pursuant to
this Section 9.01.
Section 9.02 Merger or Consolidation of the Seller. Each Seller will
keep in full effect its existence, rights and franchises as a corporation or a
Delaware business trust, as applicable, under the laws of the state of its
organization and will obtain and preserve its qualification to do business as
a foreign entity 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 a Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation (including
by means of the sale of all or substantially all of such Seller's assets to
such Person) to which the Seller shall be a party, or any Person succeeding to
the business of the Seller (whether or not related to loan servicing), shall
be the successor of the Seller 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
Seller shall not, without the prior written approval of the Purchaser, be a
party to any such merger, conversion or consolidation, or sell or otherwise
dispose of all or substantially all of its business or assets if, (i) as a
result of such merger, conversion or consolidation, sale or other disposition,
an Event of Default under Section 10.01 hereof would exist with respect to
such successor Seller or (ii) such successor (a) is a servicer that is not in
good standing with Xxxxxx Xxx or Xxxxxxx Mac or (b) has a net worth of less
than $25,000,000.
Section 9.03 Limitation on Liability of the Sellers and Others.
Neither the Sellers nor any of the officers, employees or agents of the
Sellers shall be under any liability to the Purchaser for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement or pursuant to the express written instructions of the Purchaser, or
for errors in judgment made in good faith; provided that this provision shall
not protect the Sellers or
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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 reasons of willful misfeasance, bad faith, negligence
or any breach in the performance of the obligations and duties hereunder. The
Sellers and any officer, employee or agent of the Sellers may rely in good
faith on any document of any kind reasonably believed by the Sellers or such
Person to be genuine and prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.
The Sellers shall not be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to their duties hereunder
and which in their opinion may involve them in any expense or liability;
provided that the Sellers may in their discretion undertake any such action
that it may deem necessary or desirable in respect of 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 Sellers shall be entitled to be reimbursed
therefor out of the Collection Account. This indemnity shall survive the
termination of this Agreement.
Section 9.04 Servicer Not to Resign. With respect to the retention by
PHH Mortgage of the servicing of the Mortgage Loans and the REO Properties
hereunder, PHH Mortgage acknowledges that the Purchaser has acted in reliance
upon PHH Mortgage's Independent status, the adequacy of its servicing
facilities, plan, personnel, records and procedures, its integrity, reputation
and financial standing and the continuance thereof. Consequently, PHH Mortgage
shall not assign the servicing rights retained by it hereunder to any third
party nor resign from the obligations and duties hereby imposed on it except
(i) with the approval of the Purchaser, such approval not to be unreasonably
withheld, or (ii) 3 Business Days following any determination that its duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by PHH Mortgage. Any determination permitting the transfer of
the servicing rights or the resignation of PHH Mortgage under Subsection (ii)
hereof shall be evidenced by an opinion of counsel to such effect delivered to
the Purchaser, which opinion of counsel shall be in form and substance
reasonably acceptable to the Purchaser.
ARTICLE X
DEFAULT
Section 10.01 Events of Default. In case one or more of the following
events shall occur and be continuing:
(1) any failure by the Servicer to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of two (2) Business Days unless such failure to remit
is due to a cause beyond the Servicer's control, including an act of God, act
of civil, military or governmental authority, fire, epidemic, flood, blizzard,
earthquake, riot, war, or sabotage, provided that the Servicer gives the
Purchaser notice of such cause promptly and uses its reasonable efforts to
correct such failure to remit and does so remit within 2 Business Days
following the end of the duration of the cause of such failure to remit;
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(2) any failure on the part of a Seller/Servicer duly to observe or
perform in any material respect any of the covenants or agreements on the part
of such Seller/Servicer set forth in this Agreement which continues unremedied
for a period of 15 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
applicable Seller/Servicer by the Purchaser; provided that such 15-day period
shall not begin with respect to any failure to cure, repurchase or substitute
in accordance with Sections 2.04 and/or 3.04 until the expiration of the cure
periods provided for in Sections 2.04 and/or 3.04, as applicable;
(3) any filing of an Insolvency Proceeding by or on behalf of a
Seller/Servicer, any consent by or on behalf of a Seller/Servicer to the
filing of an Insolvency Proceeding against a Seller/Servicer, or any admission
by or on behalf of a Seller/Servicer of its inability to pay its debts
generally as the same become due;
(4) any filing of an Insolvency Proceeding against a Seller/Servicer
that remains undismissed or unstayed for a period of 60 days after the filing
thereof;
(5) any issuance of any attachment or execution against, or any
appointment of a conservator, receiver or liquidator with respect to, all or
substantially all of the assets of a Seller/Servicer;
(6) any failure or inability of PHH Mortgage to be eligible to
service Mortgage Loans for Xxxxxx Xxx or Xxxxxxx Mac;
(7) any sale, transfer, assignment, or other disposition by a
Seller/Servicer of all or substantially all of its property or assets to a
Person who does not meet the qualifications enumerated or incorporated by
reference into Section 9.02, any assignment by a Seller/Servicer of this
Agreement or any of a Seller's/Servicer's rights or obligations hereunder
except in accordance with Section 9.04, or any action taken or omitted to be
taken by a Seller/Servicer in contemplation or in furtherance of any of the
foregoing, without the consent of the Purchaser; or
(8) any failure by the Seller to be in compliance with applicable
"doing business" or licensing laws of any jurisdiction where Mortgaged
Property is located;
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, the Purchaser, by notice in writing to the Sellers
may, in addition to whatever rights the Purchaser may have at law or in equity
to damages, including injunctive relief and specific performance, terminate
all the rights and obligations of the Sellers under this Agreement and in and
to the Mortgage Loans and the proceeds thereof subject to Section 12.01,
without the Purchaser's incurring any penalty or fee of any kind whatsoever in
connection therewith; provided that, upon the occurrence of an Event of
Default under Subsection (3), (4) or (5) of this Section 10.01, this Agreement
and all authority and power of the Sellers hereunder (whether with respect to
the Mortgage Loans, the REO Properties or otherwise) shall automatically
cease. On or after the receipt by the Sellers of such written notice, all
authority and power of the Sellers under this Agreement (whether with respect
to the Mortgage Loans or otherwise) shall cease. Notwithstanding the
occurrence of an Event of Default, the Sellers or the Servicer, as applicable,
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shall be entitled to all amounts due to such party and remaining unpaid on
such date of termination.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection
with the termination or resignation (as described in Section 9.04) of the
Servicer hereunder, either (i) the successor servicer shall represent and
warrant that it is a member of MERS in good standing and shall agree to comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the MERS Mortgage Loans, or (ii) the predecessor
servicer shall cooperate with the successor servicer either (x) in causing
MERS to execute and deliver an assignment of Mortgage in recordable form to
transfer the Mortgage from MERS to the Purchaser and to execute and deliver
such other notices, documents and other instruments as may be necessary to
effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS system to the successor servicer or (y) in causing MERS to designate
on the MERS system the successor servicer as the servicer of such Mortgage
Loan.
ARTICLE XI
TERMINATION
Section 11.01 Term and Termination. (1) The servicing obligations of
the Servicer under this Agreement may be terminated as provided in Section
10.01 hereof.
(2) The Purchaser may, at its option and with the prior consent of
the Servicer, terminate this Agreement, and any rights of the Servicer
hereunder, without cause. Any such notice of termination shall be in writing
and delivered to the Sellers and any Rating Agency by registered mail as
provided in Section 12.03 hereof. Upon such termination, the Servicer shall be
entitled to receive, as such liquidated damages, an amount equal to 2.5% of
the aggregate outstanding principal amount of the Mortgage Loans as of the
termination date paid by the Purchaser to the Servicer with respect to all of
the Mortgage Loans.
(3) In any case other than as provided under Subsection (1) or (2)
hereof, the respective obligations and responsibilities of the Sellers
hereunder shall terminate upon: (a) the later of the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan or
the disposition of all REO Property and the remittance of all funds due
hereunder; or (b) the mutual written consent of the Sellers and the Purchaser.
(4) Upon any termination of this Agreement or the servicing
obligations of the Servicer hereunder, then the Servicer shall prepare,
execute and deliver all agreements, documents and instruments, including all
Servicer Mortgage Files, and do or accomplish all other acts or things
necessary or appropriate to effect such termination, all at the Servicer's
sole expense. In any such event, the Servicer agrees to cooperate with the
Purchaser in effecting the termination of the Servicer's servicing
responsibilities hereunder, including the transfer to the Purchaser or its
designee for administration by it of all cash amounts which shall at the time
be contained in, or credited by the Servicer to, the Collection Account and/or
the Escrow Account or thereafter received with respect to any Mortgage Loan or
REO Property.
Section 11.02 Survival. Notwithstanding anything to the contrary
contained herein, the representations and warranties of the parties contained
herein and in any certificate or
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other instrument delivered pursuant hereto, as well as the other covenants
hereof (including those set forth in Section 9.01) that, by their terms,
require performance after the termination by this Agreement, shall survive the
delivery and payment for the Mortgage Loans on each Funding Date as well as
the termination of this Agreement and shall inure to the benefit of the
parties, their successors and assigns. Sellers further agree that the
representations, warranties and covenants made by Sellers herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to
be relied upon by Purchaser notwithstanding any investigation heretofore made
by Purchaser or on Purchaser's behalf. ARTICLE XII GENERAL PROVISIONS
Section 12.01 Successor to the Servicer. Upon the termination of the
Servicer's servicing responsibilities and duties under this Agreement pursuant
to Section 9.04, 10.01, or 11.01, the Purchaser shall (i) succeed to and
assume all of the Servicer's responsibilities, rights, duties and obligations
under this Agreement or (ii) appoint a successor servicer which shall succeed
to all rights and assume all of the responsibilities, duties and liabilities
of the Servicer under this Agreement prior to the termination of the
Servicer's responsibilities, duties and liabilities under this Agreement. If
the Servicer's duties, responsibilities and liabilities under this Agreement
should be terminated pursuant to the aforementioned sections, then the
Servicer shall continue to discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until the
effective date thereof (if applicable) all on the terms and conditions
contained herein and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The termination
of the Servicer's servicing responsibilities pursuant to any of the
aforementioned Sections shall not, among other things, relieve the Servicer of
its obligations pursuant to Section 2.04 and/or 7.02, the representations and
warranties or other obligations set forth in Sections 2.04, 3.01, 3.02 and
3.03 and the remedies available to the Purchaser under the various provisions
of this Agreement. In addition, such termination shall not affect any claims
that the Purchaser may have against the Servicer arising prior to any such
termination.
The Servicer shall promptly deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and the Servicer shall account
for all funds. The Servicer shall execute and deliver such instruments and do
such other things all as may reasonably be required to more fully and
definitely vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liability of the Servicer. The successor
shall make such arrangements as it may deem appropriate to reimburse the
Servicer for unrecovered Servicing Advances which the successor retains
hereunder and which could otherwise have been recovered by the Servicer
pursuant to this Agreement but for the appointment of the successor Servicer.
Section 12.02 Governing Law. This Agreement is to be governed by, and
construed in accordance with the internal laws of the State of New York
without giving effect to principals of conflicts of laws. The obligations,
rights, and remedies of the parties hereunder shall be determined in
accordance with such laws.
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Section 12.03 Notices. Any notices or other communications permitted
or required hereunder shall be in writing and shall be deemed conclusively to
have been given if personally delivered, sent by courier with delivery against
signature therefor, mailed by registered mail, postage prepaid, and return
receipt requested or transmitted by telex, telegraph or telecopier and
confirmed by a similar writing mailed or sent by courier as provided above, to
(i) in the case of the Purchaser, Xxxxxxx Xxxxx Mortgage Company, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxxxxx, (ii) in the
case of the PHH Mortgage, PHH Mortgage Corporation, 0000 Xxxxxxxxxx Xxxx, Xx.
Xxxxxx, XX 00000, Attention: Vice President of Servicing and (iii) in the case
of the Trust, c/o PHH Mortgage Corporation, as Administrator, 0000 Xxxxxxxxxx
Xxxx, Xx. Xxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxx, Vice President of
Servicing, or such other address as may hereafter be furnished to the
Purchaser in writing by the applicable Seller.
Section 12.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, the invalidity of any such covenant,
agreement, provision or term of this Agreement shall in no way affect the
validity or enforceability of the other provisions of this Agreement.
Section 12.05 Schedules and Exhibits. The schedules and exhibits that
are attached to this Agreement are hereby incorporated herein and made a part
hereof by this reference.
Section 12.06 General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(1) 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;
(2) any reference in this Agreement to this Agreement or any other
agreement, document, or instrument shall be a reference to this Agreement or
any other such agreement, document, or instrument as the same has been
amended, modified, or supplemented in accordance with the terms hereof and
thereof (as applicable);
(3) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(4) 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, unless the context shall otherwise require;
(5) 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;
(6) a reference to a "day" shall be a reference to a calendar day;
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(7) 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
(8) the terms "include" and "including" shall mean without limitation
by reason of enumeration .
Section 12.07 Waivers and Amendments, Noncontractual Remedies;
Preservation of Remedies. This Agreement may be amended, superseded, canceled,
renewed or extended and the terms hereof may be waived, only by a written
instrument signed by authorized representatives of the parties or, in the case
of a waiver, by an authorized representative of the party waiving compliance.
No such written instrument shall be effective unless it expressly recites that
it is intended to amend, supersede, cancel, renew or extend this Agreement or
to waive compliance with one or more of the terms hereof, as the case may be.
No delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part
of any party of any such right, power or privilege, or any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege. The
rights and remedies herein provided are cumulative and are not exclusive of
any rights or remedies that any party may otherwise have at law or in equity.
Section 12.08 Captions. All section titles or captions contained in
this Agreement or in any schedule or exhibit annexed hereto or referred to
herein, and the table of contents to this Agreement, are for convenience only,
shall not be deemed a part of this Agreement and shall not affect the meaning
or interpretation of this Agreement.
Section 12.09 Counterparts; Effectiveness. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument. This Agreement shall become
effective as of the date first set forth herein upon the due execution and
delivery of this Agreement by each of the parties hereto.
Section 12.10 Entire Agreement; Amendment. This Agreement (including
the schedules and exhibits annexed hereto or referred to herein), together
with the PHH Guide, contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby and supersedes all prior
agreements, written or oral, with respect thereto. No amendment, modification
or alteration of the terms or provisions of this Agreement shall be binding
unless the same shall be in writing and duly executed by the authorized
representatives of the parties hereto.
Section 12.11 Further Assurances. Each party hereto shall take such
additional action as may be reasonably necessary to effectuate this Agreement
and the transactions contemplated hereby. The Sellers will promptly and duly
execute and deliver to the Purchaser such documents and assurances and take
such further action as the Purchaser may from time to time reasonably request
in order to carry out more effectively the intent and purpose of this
Agreement and to establish and protect the rights and remedies created or
intended to be created in favor of the Purchaser.
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Notwithstanding any other provision of this Agreement, in connection
with any Securitization the Servicer shall (i) agree to such modifications and
enter into such amendments to this Agreement as may be reasonably necessary,
in the reasonable judgment of the Purchaser and its counsel, to comply with
any rules promulgated by the Securities and Exchange Commission (the
"Commission") and any interpretations thereof by the staff of the Commission
(collectively, "SEC Rules"); provided, however, that the Servicer is provided
the opportunity to negotiate such modifications and amendments and (ii)
promptly upon request provide to the Purchaser for inclusion in any prospectus
or periodic report such written information regarding the Servicer, its
business, experience, financial condition, loan portfolio, servicing policies
and procedures, other securitizations to which the Servicer was a party,
information regarding material litigation or governmental actions or
proceedings involving the Servicer or its Affiliates, and such other matters,
including as applicable statistical data to be necessary to comply with any
SEC Rules and in accordance with the best business practices of the servicing
industry, and to indemnify and hold harmless the Purchaser and each
controlling person, Affiliate, officer, director, employee or agent of the
Purchaser for any and all liabilities, losses and expenses arising under the
Securities Act of 1933, as amended, in connection with any material
misstatement contained in such written information or any omission of a
material fact the inclusion of which was necessary to make such written
information not misleading, as shall be more fully provided in an
indemnification agreement to be negotiated by the Purchaser and Servicer.
Section 12.12 Intention of the Seller. Each Seller intends that the
conveyance of such Seller's right, title and interest in and to the Mortgage
Loans to the Purchaser shall constitute a sale and not a pledge of security
for a loan. If such conveyance is deemed to be a pledge of security for a
loan, however, the applicable Seller intends that the rights and obligations
of the parties to such loan shall be established pursuant to the terms of this
Agreement. Each Seller also intends and agrees that, in such event, (i) the
applicable Seller shall be deemed to have granted to the Purchaser and its
assigns a first priority security interest in such Seller's entire right,
title and interest in and to the Mortgage Loans, all principal and interest
received or receivable with respect to the Mortgage Loans, all amounts held
from time to time in the accounts mentioned pursuant to this Agreement and all
reinvestment earnings on such amounts, together with all of the applicable
Seller's right, title and interest in and to the proceeds of any title, hazard
or other insurance policies related to such Mortgage Loans and (ii) this
Agreement shall constitute a security agreement under applicable law. All
rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
ARTICLE XIII
COMPLIANCE WITH REGULATION AB
Section 13.01 Intent of the Parties; Reasonableness. The Purchaser,
each Seller and the Servicer acknowledges and agrees that the purpose of
Article XIII of this Agreement is to facilitate compliance by the Purchaser
and any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its
terms only to offerings of asset-backed securities that are registered under
the Securities Act, the Seller and the Servicer acknowledges that investors in
privately offered securities may
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require that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). Each Seller and the
Servicer acknowledges that interpretations of the requirements of Regulation
AB may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Purchaser or any Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. In connection with any Securitization Transaction, the Sellers
and the Servicer shall cooperate fully with the Purchaser to deliver to the
Purchaser (including any of its assignees or designees) and any Depositor, any
and all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Purchaser or any Depositor to
permit the Purchaser or such Depositor to comply with the provisions of
Regulation AB, together with such disclosures relating to the Sellers, the
Servicer, any Subservicer, any Third-Party Originator and the Mortgage Loans,
or the servicing of the Mortgage Loans, reasonably believed by the Purchaser
or any Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Seller and the Servicer by providing timely notice of
requests for information under these provisions and by reasonably limiting
such requests to information required, in the Purchaser's reasonable judgment,
to comply with Regulation AB.
Section 13.02 Additional Representations and Warranties of the
Sellers and the Servicer.
(a) Each Seller and/or the Servicer, as applicable, as to itself,
shall be deemed to represent to the Purchaser and to any Depositor, as of
the date on which information is first provided to the Purchaser or any
Depositor under Section 13.03 that, except as disclosed in writing to the
Purchaser or such Depositor prior to such date: (i) the Servicer is not
aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Servicer; (ii) the
Servicer has not been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application
of a servicing performance test or trigger; (iii) no material
noncompliance with the applicable servicing criteria with respect to
other securitizations of residential mortgage loans involving the
Servicer as servicer has been disclosed or reported by such Servicer;
(iv) no material changes to the Servicer's policies or procedures with
respect to the servicing function it will perform under this Agreement
and any Reconstitution Agreement for mortgage loans of a type similar to
the Mortgage Loans have occurred during the three-year period immediately
preceding the related Securitization
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Transaction; (v) there are no aspects of the Servicer's financial
condition that could have a material adverse effect on the performance by
such Servicer of its servicing obligations under this Agreement or any
Reconstitution Agreement; (vi) there are no material legal or
governmental proceedings pending (or known to be contemplated) against
the Seller, the Servicer, any Subservicer or any Third-Party Originator;
and (vii) there are no affiliations, relationships or transactions
relating to any Seller, the Servicer, any Subservicer or any Third-Party
Originator with respect to any Securitization Transaction and any party
thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the
Purchaser or any Depositor under Section 13.03, each Seller and the
Servicer shall, within five Business Days following such request, confirm
in writing the accuracy of the representations and warranties set forth
in paragraph (a) of this Section or, if any such representation and
warranty is not accurate as of the date of such request, provide
reasonably adequate disclosure of the pertinent facts, in writing, to the
requesting party.
Section 13.03 Information to Be Provided by each Seller or the
Servicer. In connection with any Securitization Transaction, the Sellers or
the Servicer shall (i) within five Business Days following request by the
Purchaser or any Depositor, provide to the Purchaser and such Depositor (or,
as applicable, cause each Third-Party Originator and each Subservicer to
provide), in writing and in form and substance reasonably satisfactory to the
Purchaser and such Depositor, the information and materials specified in
paragraphs (a), (b), (c) and (f) of this Section, and (ii) as promptly as
practicable following notice to or discovery by any Seller or the Servicer,
provide to the Purchaser and any Depositor (in writing and in form and
substance reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Sellers
shall provide such information regarding (i) each Seller, as originator
of the Mortgage Loans (including as an acquirer of Mortgage Loans from a
Qualified Correspondent), or (ii) each Third-Party Originator, and (iii)
as applicable, each Subservicer, as is requested for the purpose of
compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation
AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how
long the originator has been engaged in originating residential mortgage
loans, which description shall include a discussion of the originator's
experience in originating mortgage loans of a similar type as the
Mortgage Loans; information regarding the size and composition of the
originator's origination portfolio; and information that may be material,
in the good faith judgment of the Purchaser or any Depositor, to an
analysis of the performance of the Mortgage Loans, including the
originators' credit-granting or underwriting criteria for mortgage loans
of similar type(s) as the Mortgage Loans and such other information as
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the Purchaser or any Depositor may reasonably request for the purpose of
compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental proceedings
pending (or known to be contemplated) against each Seller, each
Third-Party Originator and each Subservicer; and
(D) a description of any affiliation or relationship between each
Seller, each Third-Party Originator, each Subservicer and any of the
following parties to a Securitization Transaction, as such parties are
identified to the Sellers, by the Purchaser or any Depositor in writing
in advance of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Sellers
shall provide (or, as applicable, cause each Third-Party Originator to
provide) Static Pool Information with respect to the mortgage loans (of a
similar type as the Mortgage Loans, as reasonably identified by the
Purchaser as provided below) originated by (i) the Sellers, if any Seller
is an originator of Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent), and/or (ii) each Third-Party
Originator. Such Static Pool Information shall be prepared by each Seller
(or Third-Party Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(1)-(3) of Regulation
AB. To the extent that there is reasonably available to the Sellers (or
Third-Party Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be entitled
to specify whether some or all of such information shall be provided
pursuant to this paragraph. The content of such Static Pool Information
may be in the form customarily provided by the Sellers, and need not be
customized for the Purchaser or any Depositor. Such Static Pool
Information for each vintage origination year or prior securitized pool,
as applicable, shall be presented in increments no less frequently than
quarterly over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The most recent periodic
increment must be as of a date no later than 135 days prior to the date
of the prospectus or other offering document in which the Static Pool
Information is to be included or incorporated by reference. The Static
Pool Information shall be provided in an electronic format that provides
a permanent record of the information provided, such as a portable
document format (pdf) file, or other such electronic format reasonably
required by the Purchaser or the Depositor, as applicable.
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Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Seller shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same
format in which Static Pool Information was previously provided to such party
by the Seller.
If so requested by the Purchaser or any Depositor, each Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional
incremental expense associated with delivery pursuant to this Agreement), such
agreed-upon procedures letters of certified public accountants reasonably
acceptable to the Purchaser or Depositor, as applicable, pertaining to Static
Pool Information relating to prior securitized pools for securitizations
closed on or after January 1, 2006 or, in the case of Static Pool Information
with respect to such Seller's or Third-Party Originator's originations or
purchases, to calendar months commencing January 1, 2006, as the Purchaser or
such Depositor shall reasonably request. Such letters shall be addressed to
and be for the benefit of such parties as the Purchaser or such Depositor
shall designate, which may include, by way of example, any Sponsor, any
Depositor and any broker dealer acting as underwriter, placement agent or
initial purchaser with respect to a Securitization Transaction. Any such
statement or letter may take the form of a standard, generally applicable
document accompanied by a reliance letter authorizing reliance by the
addressees designated by the Purchaser or such Depositor.
(c) If so requested by the Purchaser or any Depositor, the Servicer
shall provide such information regarding the Servicer, as servicer of the
Mortgage Loans, and each Subservicer (the Servicer and each Subservicer,
for purposes of this paragraph, a "Transaction Servicer"), as is
requested for the purpose of compliance with Item 1108 of Regulation AB.
Such information shall include, at a minimum:
(A) the Transaction Servicer's form of organization;
(B) a description of how long the Transaction Servicer has been
servicing residential mortgage loans; a general discussion of the
Transaction Servicer's experience in servicing assets of any type as
well as a more detailed discussion of the Transaction Servicer's
experience in, and procedures for, the servicing function it will
perform under this Agreement and any Reconstitution Agreements;
information regarding the size, composition and growth of the
Transaction Servicer's portfolio of residential mortgage loans of a
type similar to the Mortgage Loans and information on factors
related to the Transaction Servicer that may be material, in the
good faith judgment of the Purchaser or any Depositor, to any
analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without
limitation:
(1) whether any prior securitizations of mortgage loans of
a type similar to the Mortgage Loans involving the Transaction
Servicer have defaulted or experienced an early amortization or
other performance triggering event because of servicing during
the three-year period immediately preceding the related
Securitization Transaction;
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(2) the extent of outsourcing the Transaction Servicer
utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable servicing criteria with
respect to other securitizations of residential mortgage loans
involving the Transaction Servicer as a servicer during the
three-year period immediately preceding the related
Securitization Transaction;
(4) whether the Transaction Servicer has been terminated
as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a
servicing performance test or trigger; and
(5) such other information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance
with Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during the three-year
period immediately preceding the related Securitization Transaction
to the Transaction Servicer's policies or procedures with respect to
the servicing function it will perform under this Agreement and any
Reconstitution Agreements for mortgage loans of a type similar to
the Mortgage Loans;
(D) information regarding the Transaction Servicer's financial
condition, to the extent that there is a material risk that an
adverse financial event or circumstance involving the Transaction
Servicer could have a material adverse effect on the performance by
the Servicer of its servicing obligations under this Agreement or
any Reconstitution Agreement;
(E) information regarding advances made by the Transaction
Servicer on the Mortgage Loans and the Transaction Servicer's
overall servicing portfolio of residential mortgage loans for the
three-year period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an authorized
officer of the Transaction Servicer to the effect that the
Transaction Servicer has made all advances required to be made on
residential mortgage loans serviced by it during such period, or, if
such statement would not be accurate, information regarding the
percentage and type of advances not made as required, and the
reasons for such failure to advance;
(F) a description of the Transaction Servicer's processes and
procedures designed to address any special or unique factors
involved in servicing loans of a similar type as the Mortgage Loans;
(G) a description of the Transaction Servicer's processes for
handling delinquencies, losses, bankruptcies and recoveries, such as
through liquidation of mortgaged properties, sale of defaulted
mortgage loans or workouts; and
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(H) information as to how the Transaction Servicer defines or
determines delinquencies and charge-offs, including the effect of
any grace period, re-aging, restructuring, partial payments
considered current or other practices with respect to delinquency
and loss experience.
(d) If so requested by the Purchaser or any Depositor for the purpose
of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, each Seller and the
Servicer shall (or shall cause each Subservicer and Third-Party
Originator to) (i) notify the Purchaser and any Depositor in writing of
(A) any material litigation or governmental proceedings pending against
such Seller or the Servicer, any Subservicer or any Third-Party
Originator and (B) any affiliations or relationships that develop
following the closing date of a Securitization Transaction between such
Seller or the Servicer, any Subservicer or any Third-Party Originator and
any of the parties specified in clause (D) of paragraph (a) of this
Section (and any other parties identified in writing by the requesting
party) with respect to such Securitization Transaction, and (ii) provide
to the Purchaser and any Depositor a description of such proceedings,
affiliations or relationships.
(e) As a condition to the succession to the Servicer or any
Subservicer as servicer or subservicer under this Agreement or any
Reconstitution Agreement by any Person (i) into which the Servicer or
such Subservicer may be merged or consolidated, or (ii) which may be
appointed as a successor to the Servicer or any Subservicer, the Servicer
shall provide to the Purchaser and any Depositor, at least 15 calendar
days prior to the effective date of such succession or appointment, (x)
written notice to the Purchaser and any Depositor of such succession or
appointment and (y) in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser or any Depositor in order to comply
with its reporting obligation under Item 6.02 of Form 8-K with respect to
any class of asset-backed securities.
(f) In addition to such information as the Servicer, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, if
so requested by the Purchaser or any Depositor, the Servicer shall
provide such information regarding the performance or servicing of the
Mortgage Loans as is reasonably required by the Purchaser or any
Depositor to facilitate preparation of distribution reports in accordance
with Item 1121 of Regulation AB. Such information shall be provided
concurrently with the monthly reports otherwise required to be delivered
by the Servicer under this Agreement in connection with the applicable
Securitization Transaction.
Section 13.04 Servicer Compliance Statement. On or before March 1 of
each calendar year, commencing in 2007, the Servicer shall deliver to the
Purchaser and any Depositor a statement of compliance addressed to the
Purchaser and such Depositor and signed by an authorized officer of the
Servicer, to the effect that (i) a review of the Servicer's activities during
the immediately preceding calendar year (or applicable portion thereof) and of
its performance under this Agreement and any applicable Reconstitution
Agreement during such period has been made under such officer's supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this
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Agreement and any applicable Reconstitution Agreement in all material respects
throughout such calendar year (or applicable portion thereof) or, if there has
been a failure to fulfill any such obligation in any material respect,
specifically identifying each such failure known to such officer and the
nature and the status thereof.
Section 13.05 Report on Assessment of Compliance and Attestation(1) .
(a) On or before March 1 of each calendar year, commencing in 2007, the
Servicer shall:
(i) deliver to the Purchaser and any Depositor a report (in form and
substance reasonably satisfactory to the Purchaser and such Depositor)
regarding the Servicer's assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year, as required
under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Purchaser and such
Depositor and signed by an authorized officer of the Servicer, and shall
address each of the Servicing Criteria specified on a certification
substantially in the form of Exhibit 13 hereto delivered to the Purchaser
concurrently with the execution of this Agreement;
(ii) deliver to the Purchaser and any Depositor a report of a
registered public accounting firm reasonably acceptable to the Purchaser
and such Depositor that attests to, and reports on, the assessment of
compliance made by the Servicer and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act;
(iii) cause each Subservicer, and each Subcontractor determined by
the Servicer pursuant to Section 13.06(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to
deliver to the Purchaser and any Depositor an assessment of compliance
and accountants' attestation as and when provided in paragraphs (a) and
(b) of this Section; and
(iv) if requested by the Purchaser or any Depositor not later than
February 1 of the calendar year in which such certification is to be
delivered, deliver to the Purchaser, any Depositor and any other Person
that will be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002)
on behalf of an asset-backed issuer with respect to a Securitization
Transaction a certification in the form attached hereto as Exhibit 12.
Each Seller acknowledges that the parties identified in clause
(a)(iv) above may rely on the certification provided by the Servicer pursuant
to such clause in signing a Sarbanes Certification and filing such with the
Commission. Neither the Purchaser nor any Depositor will request delivery of a
certification under clause (a)(iv) above, unless a Depositor is required under
the Exchange Act to file an annual report on Form 10-K with respect to an
issuing entity whose asset pool includes Mortgage Loans.
(b) Each assessment of compliance provided by a Subservicer pursuant
to Section 13.05(a)(i) shall address each of the Servicing Criteria
specified on a certification
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substantially in the form of Exhibit 13 hereto delivered to the Purchaser
concurrently with the execution of this Agreement or, in the case of a
Subservicer subsequently appointed as such, on or prior to the date of
such appointment. An assessment of compliance provided by a Subcontractor
pursuant to Section 13.05(a)(iii) need not address any elements of the
Servicing Criteria other than those specified by the Servicer pursuant to
Section 13.06.
Section 13.06 Use of Subservicers and Subcontractors.
The Servicer shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Servicer as servicers
under this Agreement or any Reconstitution Agreement unless the Servicer
complies with the provisions of paragraph (a) of this Section. The Servicer
shall not hire or otherwise utilize the services of any Subcontractor, and
shall not permit any Subservicer to hire or otherwise utilize the services of
any Subcontractor, to fulfill any of the obligations of the Servicer as
servicer under this Agreement or any Reconstitution Agreement unless the
Servicer complies with the provisions of paragraph (b) of this Section.
(a) It shall not be necessary for the Servicer to seek the consent of
the Purchaser or any Depositor to the utilization of any Subservicer. The
Servicer shall cause any Subservicer used by the Servicer (or by any
Subservicer) for the benefit of the Purchaser and any Depositor to comply
with the provisions of this Section and with Sections 13.02, 13.03(c) and
(e), 13.04, 13.05 and 13.07 of this Agreement to the same extent as if
such Subservicer were the Servicer, and to provide the information
required with respect to such Subservicer under Section 13.03(d) of this
Agreement. The Servicer shall be responsible for obtaining from each
Subservicer and delivering to the Purchaser and any Depositor any
servicer compliance statement required to be delivered by such
Subservicer under Section 13.04, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section
13.05 and any certification required to be delivered to the Person that
will be responsible for signing the Sarbanes Certification under Section
13.05 as and when required to be delivered.
(b) It shall not be necessary for the Servicer to seek the consent of
the Purchaser or any Depositor to the utilization of any Subcontractor.
The Servicer shall promptly upon request provide to the Purchaser and any
Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance reasonably
satisfactory to the Purchaser and such Depositor) of the role and
function of each Subcontractor utilized by the Servicer or any
Subservicer, specifying (i) the identity of each such Subcontractor, (ii)
which (if any) of such Subcontractors are "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, and (iii)
which elements of the Servicing Criteria will be addressed in assessments
of compliance provided by each Subcontractor identified pursuant to
clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to
be "participating in the servicing function" within the meaning of Item 1122
of Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the
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benefit of the Purchaser and any Depositor to comply with the provisions of
Sections 13.05 and 13.07 of this Agreement to the same extent as if such
Subcontractor were the Servicer. The Servicer shall be responsible for
obtaining from each Subcontractor and delivering to the Purchaser and any
Depositor any assessment of compliance and attestation required to be
delivered by such Subcontractor under Section 13.05, in each case as and when
required to be delivered.
Section 13.07 Indemnification; Remedies.
(a) Each Seller and the Servicer shall indemnify the Purchaser, each
affiliate of the Purchaser, and each of the following parties
participating in a Securitization Transaction: each sponsor and issuing
entity; each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to
such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with
respect to such Securitization Transaction; each broker dealer acting as
underwriter, placement agent or initial purchaser, each Person who
controls any of such parties or the Depositor (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act); and
the respective present and former directors, officers, employees and
agents of each of the foregoing and of the Depositor, and shall hold each
of them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising
out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification,
accountants' letter or other material provided in written or electronic
form under this Article XIII by or on behalf of any Seller or the
Servicer, or provided under this Article XIII by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator (collectively, the
"Seller Information"), or (B) the omission or alleged omission to state
in the Seller Information a material fact required to be stated in the
Seller Information or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the Seller
Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the
Seller Information or any portion thereof is presented together with or
separately from such other information;
(ii) any failure by any Seller, the Servicer, any Subservicer,
any Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or other material
when and as required under this Article XIII, including (except as
provided below) any failure by the Servicer to identify pursuant to
Section 13.06(b) any Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB; or
(iii) any breach by any Seller or the Servicer of a
representation or warranty set forth in Section 13.02(a) or in a writing
furnished pursuant to Section
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13.02(b) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured
by such closing date, or any breach by any Seller or the Servicer of a
representation or warranty in a writing furnished pursuant to Section
13.02(b) to the extent made as of a date subsequent to such closing date.
In the case of any failure of performance described in
clause (a)(ii) of this Section, the Sellers and the Servicer shall promptly
reimburse the Purchaser, any Depositor, as applicable, and each Person
responsible for the preparation, execution or filing of any report required to
be filed with the Commission with respect to such Securitization Transaction,
or for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to such Securitization
Transaction, for all costs reasonably incurred by each such party in order to
obtain the information, report, certification, accountants' letter or other
material not delivered as required by any Seller, the Servicer, any
Subservicer, any Subcontractor or any Third-Party Originator.
(b) (i) Any failure by any Seller, the Servicer, any Subservicer, any
Subcontractor or any Third-Party Originator to deliver any information,
report, certification, accountants' letter or other material when and as
required under this Article XIII, or any breach by any Seller or the
Servicer of a representation or warranty set forth in Section 13.02(a) or
in a writing furnished pursuant to Section 13.02(b) and made as of a date
prior to the closing date of the related Securitization Transaction, to
the extent that such breach is not cured by such closing date, or any
breach by any Seller or the Servicer of a representation or warranty in a
writing furnished pursuant to Section 13.02(b) to the extent made as of a
date subsequent to such closing date, shall, except as provided in clause
(ii) of this paragraph, immediately and automatically, without notice or
grace period, constitute an Event of Default with respect to the Sellers
and the Servicer under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Purchaser or Depositor, as applicable,
in its sole discretion to terminate the rights and obligations of the
Sellers and the Servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in
this Agreement or any applicable Reconstitution Agreement to the
contrary) of any compensation to the Sellers or the Servicer; provided
that to the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the survival
of certain rights or obligations following termination of the Servicer as
servicer, such provision shall be given effect.
(ii) Any failure by the Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification or
accountants' letter when and as required under Section 13.04 or 13.05,
including any failure by the Servicer to identify pursuant to Section
13.06(b) any Subcontractor "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB, which continues
unremedied for ten calendar days after the date on which such
information, report, certification or accountants' letter was required to
be delivered shall constitute an Event of Default with respect to the
Servicer under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Purchaser or Depositor, as applicable,
in its sole discretion to terminate the rights and obligations of the
Servicer as servicer under this
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Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any
compensation to the Servicer; provided that to the extent that any
provision of this Agreement and/or any applicable Reconstitution
Agreement expressly provides for the survival of certain rights or
obligations following termination of the Servicer as servicer, such
provision shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to
terminate the rights and obligations of the Servicer pursuant to this
subparagraph (b)(ii) if a failure of the Servicer to identify a
Subcontractor "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB was attributable solely to the role
or functions of such Subcontractor with respect to mortgage loans other
than the Mortgage Loans.
(iii) The Sellers and the Servicer shall promptly reimburse the
Purchaser (or any designee of the Purchaser, such as a master servicer)
and any Depositor, as applicable, for all reasonable expenses incurred by
the Purchaser (or such designee) or such Depositor, as such are incurred,
in connection with the termination of the Servicer as servicer and the
transfer of servicing of the Mortgage Loans to a successor servicer. The
provisions of this paragraph shall not limit whatever rights the
Purchaser or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or otherwise,
whether in equity or at law, such as an action for damages, specific
performance or injunctive relief.
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IN WITNESS WHEREOF, the Sellers and the Purchaser have caused their
names to be signed hereto by their respective officers as of the date first
written above.
XXXXXXX XXXXX MORTGAGE
COMPANY, a New York limited partnership
By: XXXXXXX SACHS REAL ESTATE FUNDING CORP., a New
York corporation, as General Partner
By: ______________________________________________
Name:
Title:
PHH MORTGAGE CORPORATION
(formerly known as CENDANT
MORTGAGE CORPORATION)
By: ______________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXXX'X GATE RESIDENTIAL
MORTGAGE TRUST (formerly known as CENDANT
RESIDENTIAL MORTGAGE TRUST)
By: PHH Mortgage Corporation, as Administrator
By: ______________________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President
The following items should be included in Schedule B-1 with respect
to any Cooperative Loan:
(1)______the original Mortgage Note, endorsed (on the Mortgage Note)
"Pay to the order of _____________, without recourse" and signed by facsimile
signature in the name of such Seller by an authorized officer, with all
intervening endorsements showing a complete, valid and proper chain of title
from the originator of such Mortgage Loan to such Seller;
(2) the original Acceptance of Assignment and Assumption of Lease
Agreement for each Mortgage Loan, from such Seller signed by original or by
facsimile signature to __________________, which assignment shall be in form
and substance acceptable for recording (except for the recording information);
(3) the original Stock Certificate and related Stock Power, in blank,
executed by the Mortgagor with such signature guaranteed and original Stock
Power, in blank executed by the Seller;
(4) the original Proprietary Lease and the Assignment of Proprietary
Lease executed by the Mortgagor in blank or if the Proprietary Lease has been
assigned by the Mortgagor to the Seller, then the Seller must execute an
assignment of the Assignment of Proprietary Lease in blank;
(5) the original Recognition Agreement and the original Assignment of
Recognition Agreement;
(6) the recorded state and county Financing Statements and Financing
Statement Changes;
(7) an Estoppel Letter and/or Consent;
(8) the Cooperative Lien Search;
(9) the guaranty of the Mortgage Note and Cooperative Loan, if any;
and
(10) the original of any security agreement or similar document
executed in connection with the Cooperative Loan.
The following items should be included in Schedule B-1 with respect
to any Pledged Asset Mortgage Loan:
1. A copy of the related Control Agreement and Pledged Asset
Agreement.
2. A copy of the UCC-l, to the extent the Pledged Asset
Servicer was required to deliver such UCC-l to Servicer, and
an original form UCC-3, if applicable, to the extent the
Pledged Asset Servicer was required to deliver such UCC-3 to
Servicer, together with any instrument required to be
delivered under the related Surety Bond for transferring
coverage under such Surety Bond.
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Schedule B-1
CONTENTS OF PURCHASER'S MORTGAGE FILE
With respect to each Mortgage Loan, the Purchaser's Mortgage File
shall include each of the following items, which shall be available for
inspection by the Purchaser, and which shall be retained by the applicable
Seller or delivered to the Purchaser pursuant to the provisions of the
Sellers' Warranties and Servicing Agreement.
To be Delivered 5 days prior to Closing Date:
---------------------------------------------
1. The original Mortgage Note bearing all intervening endorsements,
endorsed, at the direction of the Purchaser either (1) "Pay to the order
of "-------", without recourse," or (2) in blank and signed in the name
of the applicable Seller by an authorized officer. To the extent that
there is no space on the face of the Mortgage Notes for endorsements, the
endorsement may be contained on an allonge, if state law so allows and
the Purchaser is so advised by the Seller that state law so allows
2. If the Mortgage Loan is not a MERS Mortgage Loan, the original
Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Mortgage shall be assigned, at the
direction of the Purchaser either (1) to "---------" or (2) with
assignee's name left blank. The Assignment of Mortgage must be duly
recorded only on the direction of the Purchaser. If the Mortgage Loan was
acquired by the applicable Seller in a merger, the Assignment of Mortgage
must be made by "PHH Mortgage Corporation, successor by merger to [name
of predecessor]." If the Mortgage Loan was acquired or originated by the
Company while doing business under another name or under an assumed name,
the Assignment must be by "PHH Mortgage Corporation formerly known as
[previous name] or [PHH Mortgage Corporation dba ______________, ]
respectively.
3. With respect to each Pledged Asset Mortgage Loan, a copy of the
related Control Agreement and Pledged Asset Agreement.
4. With respect to each Pledged Asset Mortgage Loan, a copy of the
UCC-1, to the extent the Pledged Asset Servicer was required to deliver
such UCC-1 to Servicer, and an original form UCC-3, if applicable, to the
extent the Pledged Asset Servicer was required to deliver such UCC-3 to
Servicer, together with any instrument required to be delivered under the
related Surety Bond for transferring coverage under such Surety Bond.
5. With respect to each Cooperative Loan, the original Stock
Certificate and related Stock Power, in blank, executed by the Mortgagor
with such signature guaranteed and original Stock Power, in blank
executed by the Seller provided, that if the Seller delivers a certified
copy, the Seller shall deliver the original Stock Certificate and Stock
Powers to the Custodian on or prior to the date which is 180 days after
the related Closing Date.
Sch. B-1-1
To be delivered within 180 days after the related Closing Date:
---------------------------------------------------------------
1. the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the applicable Seller cannot deliver
or cause to be delivered the original Mortgage with evidence of recording
thereon on or prior to the Closing Date 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 applicable
Seller shall deliver or cause to be delivered to the Custodian, 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 the
applicable Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such Mortgage has been dispatched 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 applicable 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 certified by such public recording office
to be a true and complete copy of the original recorded Mortgage;
2. To the extent applicable, the original of each power of attorney,
surety agreement or guaranty agreement with respect to such Mortgage
Loan;
3. Originals of any executed intervening assignments of the Mortgage,
with evidence of recording thereon or, if the original intervening
assignment has not yet been returned from the recording office, a copy of
such assignment certified by the applicable Seller to be a true copy of
the original of the assignment which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located.
4. Originals of all assumption, modification and substitution
agreements, if any, or, if the originals of any such assumption,
modification and substitution agreements have not yet been returned from
the recording office, a copy of such instruments certified by the
applicable Seller to be a true copy of the original of such instruments
which have been sent for recording in the appropriate jurisdictions in
which the Mortgaged Properties are located.
5. The original mortgagee policy of title insurance or, in the event
such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and
complete by the title insurance company, in each case, including an
Environmental Protection Agency Endorsement and an adjustable-rate
endorsement.
6. With respect to each Cooperative Loan, the original Recognition
Agreement and the original Assignment of Recognition Agreement;
Sch. B-1-2
7. With respect to each Cooperative Loan, an Estoppel Letter and/or
Consent;
8. With respect to each Cooperative Loan, the Cooperative Lien
Search;
9. With respect to each Cooperative Loan, the guaranty of the
Mortgage Note and Cooperative Loan, if any; and
10. With respect to each Cooperative Loan, the original Cooperative
Pledge Agreement.
11. With respect to each Cooperative Loan, the original Proprietary
Lease and the Assignment of Proprietary Lease executed by the Mortgagor
in blank or if the Proprietary Lease has been assigned by the Mortgagor
to the Seller, then the Seller must execute an assignment of the
Assignment of Proprietary Lease in blank;
12. With respect to each Cooperative Loan, the recorded state and
county Financing Statements and Financing Statement Changes;
From time to time, the Sellers shall forward to the Custodian
additional original documents pursuant to the Agreement or additional
documents evidencing an assumption, modification, consolidation or extension
of a Mortgage Loan approved by the Sellers, in accordance with the Agreement.
All such mortgage documents held by the Custodian as to each Mortgage Loan
shall constitute the "Custodial File".
Sch. B-1-3
PHH Mortgage Corporation
Mortgage File Cover Sheet: Credit Documents
(Schedule B-2)
Prepared by:______________________ Phone: _____________
Location: PHH Mortgage Corporation Fax: ________________
Borrower Name:___________________
Loan Number:_____________________
________________________________________________________________________________
General:
_______ 1. Mortgage File Cover Sheet Checklist - Inside File
_______ 2. Borrower's Authorization to Obtain Information
(Original)
_______ 3. Xxxxxx Xxx 1008 (original) or Underwriter's Worksheet
(CUW2)
Applications:
_______ 4. Final Signed Typed Loan Application (Form 1003 or
personal profile)
_______ 5. Initial Signed Loan Application (personal profile,
handwritten or typed)
Credit Documentation:
_______ 6 Credit Report(s), Merged In-file or RMCR) (original or
photocopy)
_______ 7. Borrower's explanations (credit, employment, etc., if
applicable)
_______ 8. VOM(s) or other form of verification(s) on all
mortgages (not required on Aus scored loans)
_______ 9. Separation agreement, divorce decree (if applicable)
_______ 10. Miscellaneous Credit Documents (if applicable)
Employment/Income Documentation:
_______ 11. Copy or Original initial VOE(s); OR
Sch. B-2-1
_______ 12. Paystubs dated with 30 days of closing; OR
_______ 13. IRS Form W-2's Original or Copy (for wage earner); OR
_______ 14. IRS Form 1040's, 1120's, 1065's, etc.,(2 years)for
self-employed);
_______ 15. Leases (if applicable)
________ 16. All documentation required to support Borrower's cash
flow for loans Originated.
Asset Documentation:
_______ 17. Copy or Original VOD(s) or source of funds to close
(if applicable)
_______ 18. Gift Letter (if applicable) (original)
_______ 19. Verification of original purchase price, real estate
sales contract, or HUD-1 on first mortgage (if
applicable)
Property Documentation:
_______ 20. Appraisal, including original photos of subject and
comps. (original)
_______ 21. Review Appraisal or second full Appraisal (if required)
(original)
_______ 22. 442 Final Inspection
_______ 23. Copy or Original Contract of Sale
_______ 24. Miscellaneous
Sch. B-2-2
EXHIBIT 2.05
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this
"Assignment"), dated of ___________, is entered into among [________________]
(the "Assignee"), Xxxxxxx Sachs Mortgage Company (the "Assignor"), PHH
Mortgage Corporation, Xxxxxx'x Gate Residential Mortgage Trust (collectively,
the "Seller"), with PHH Mortgage Corporation, as the servicer (the
"Servicer").
RECITALS
WHEREAS the Assignor, the Seller and the Servicer have entered into a
certain Amended and Restated Mortgage Loan Flow Purchase, Sale & Servicing
Agreement, dated as of December 1, 2005 (as amended or modified to the date
hereof, the "Agreement"), pursuant to which the Assignor has acquired certain
Mortgage Loans pursuant to the terms of the Agreement and Servicer has agreed
to service such Mortgage Loans; and
WHEREAS the Assignee has agreed, on the terms and conditions
contained herein, to purchase from the Assignor [certain] [all] of the
Mortgage Loans (the "Specified Mortgage Loans") which are subject to the
provisions of the Agreement and are listed on the mortgage loan schedule
attached as Exhibit I hereto (the "Specified Mortgage Loan Schedule");
___________________________NOW, THEREFORE, in consideration of the
mutual promises contained herein and other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the parties
agree as follows:
1. Assignment and Assumption
(a) On and of the date hereof, the Assignor hereby sells, assigns and
transfers to the Assignee all of its right, title and interest in the
Specified Mortgage Loans and all rights related thereto as provided under the
Agreement to the extent relating to the Specified Mortgage Loans (other than
the rights of the Assignor to indemnification under the Agreement), the
Assignee hereby accepts such assignment from the Assignor and hereby agrees to
the release of the Assignor from any obligations under the Agreement, to the
extent of the Specified Mortgage Loans, from and after the date hereof, and
each of the Seller and the Servicer hereby acknowledges such assignment,
assumption and release.
(b) On and as of the date hereof, the Assignor represents and
warrants to the Assignee that the Assignor has not taken any action that would
serve to impair or encumber the Assignee's ownership interests in the
Specified Mortgage Loans since the date of the Assignor's acquisition of the
Specified Mortgage Loans.
(c) Assignor, Seller and Servicer shall have the right to amend,
modify or terminate the Agreement without joinder of the Assignee with respect
to mortgage loans not conveyed to Assignee hereunder; provided, however, that
such amendment, modification or termination shall not affect or be binding on
the Assignee.
Exh. 2.05-1
2. Accuracy of Agreement
Each of the Seller, the Servicer and the Assignor represent and
warrant to Assignee that (i) attached hereto as Exhibit II is a true, accurate
and complete copy of the Agreement, (ii) the Agreement is in full force and
effect as of the date hereof, (iii) the Agreement has not been amended or
modified in any respect and (iv) no notice of termination has been given to
the Servicer thereunder.
3. Recognition of Purchaser
From and after the date hereof, each of the Assignee, the Seller and
the Servicer shall note the transfer of the Specified Mortgage Loans to the
Assignee in their respective books and records and shall recognize the
Assignee as the owner of the Specified Mortgage Loans, and Servicer shall
service the Specified Mortgage Loans for the benefit of the Assignee pursuant
to the Agreement, the terms of which are incorporated herein by reference. It
is the intention of the Seller, the Servicer, the Assignee and the Assignor
that the Assignment shall be binding upon and inure to the benefit of the
Assignee and the Assignor and their successors and assigns.
4. Representations and Warranties of Assignee. The Assignee hereby
represents and warrants to the Seller, the Servicer and the Assignor
as follows:
(a) The Assignee is a sophisticated investor able to evaluate the
risks and merits of the transactions contemplated hereby, and that it has not
relied in connection therewith upon any statements or representations of the
Seller or the Assignor other than those contained in the Agreement or this
Assignment.
(b) The Assignee is duly and legally authorized to enter into this
Assignment and to perform its obligations hereunder and under the Agreement.
(c) This Assignment has been duly authorized, executed and delivered
by it and (assuming due authorization, execution and delivery thereof by each
of the other parties hereto) constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
5. Representations and Warranties of Assignor. The Assignor hereby
represents and warrants to the Assignee, Seller and Servicer as
follows:
(a) The Assignor is an entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization with full
power and authority (corporate and other) to enter into and perform its
obligations under this Assignment.
(b) This Assignment has been duly authorized, executed and delivered
by the Assignor and (assuming due authorization, execution and delivery
thereof by each of the other parties hereto) constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms,
except as such enforcement may be limited by bankruptcy,
Exh. 2.05-2
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance by the Assignor of this
Assignment and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except such as has been obtained,
given, effected or taken prior to the date hereof.
(d) The execution and delivery of this Assignment have been duly
authorized by all necessary corporate action on the part of the Assignor;
neither the execution and delivery of this Assignor, nor the consummation of
the transactions therein contemplated, nor compliance by the Assignor with the
provisions thereof, will conflict with or result in a breach of, or constitute
a default under, any of the provisions of the governing documents of the
Assignor or any law, governmental rule or regulation or any material judgment,
decree or order binding on the Assignor or any of its properties, or any of
the provisions of any material indenture, mortgage, deed of trust, contract or
other instrument to which Assignor is a party or by which it is bound.
(e) There is no action, suit, proceeding or investigation pending or,
to the best of the Assignor's knowledge, threatened, against the Assignor,
which, either in any one instance or in the aggregate, if determined adversely
to the Assignor would adversely affect its ability to perform its obligations
under this Assignment.
(f) Except for the sale to the Assignee, the Assignor has not
assigned or pledged any Mortgage Note or the related Mortgage or any interest
or participation therein.
6. Representations and Warranties of Seller and Servicer. Each of the
Seller and the Servicer hereby represents and warrants to the
Assignee and the Assignor as follows:
(a) Each of the Seller and the Servicer is duly and legally
authorized to enter into this Assignment and to perform its respective
obligations hereunder and under the Agreement.
(b) This Assignment has been duly authorized, executed and delivered
by each of the Seller and the Servicer and (assuming due authorization,
execution and delivery thereof by each of the other parties hereto)
constitutes its legal, valid and binding obligation, enforceable against each
such party in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
(c) The representations and warranties of the Seller and the Servicer
set forth in Sections 3.01 and 3.02 of the Agreement are true and correct as
of the date hereof.
7. Continuing Effect.
Except as contemplated hereby, the Agreement shall remain in full
force and effect in accordance with its terms.
Exh. 2.05-3
8. Governing Law.
This Assignment and the rights and obligations hereunder shall be
governed by and construed in accordance with the internal laws of the State of
New York.
9. Notices.
Any notices or other communications permitted or required under the
Agreement to be made to the Assignee shall be made in accordance with the
terms of the Agreement and shall be sent to the Assignee as follows:
[_____________________], or to such other address as may hereafter be
furnished by the Assignee to the parties in accordance with the provisions of
the Agreement.
10. Counterparts.
This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same instrument.
11. Definitions.
Any capitalized term used but not defined in this Agreement has the
same meaning as in the Agreement.
[Assignment continues with signature page]
Exh. 2.05-4
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
the day and year first above written.
ASSIGNOR:
XXXXXXX SACHS MORTGAGE COMPANY
By: ____________________________________
Name:
Title:
SELLER:
[PHH MORTGAGE CORPORATION]
[XXXXXX'X GATE RESIDENTIAL
MORTGAGE TRUST]
By: ____________________________________
Name:
Title:
ASSIGNEE:
By: ____________________________________
Name:
Title:
SERVICER:
PHH MORTGAGE CORPORATION
By: ____________________________________
Name:
Title:
Exh. 2.05-5
EXHIBIT 10
FORM OF WARRANTY XXXX OF SALE
On this ______ day of ______, _____, PHH Mortgage Corporation
(formerly known as Cendant Mortgage Corporation) ("PHH Mortgage") and Xxxxxx'x
Gate Residential Mortgage Trust (together with PHH Mortgage, the "Sellers" and
individually, each a "Seller"") as the Sellers under that certain Amended and
Restated Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as of
December 1, 2005 (the "Agreement"), do hereby sell, transfer, assign, set over
and convey to Xxxxxxx Sachs Mortgage Company as Purchaser under the Agreement,
without recourse, but subject to the terms of the Agreement, all rights, title
and interest of the Sellers in and to the Mortgage Loans listed on the
Mortgage Loan Schedules attached hereto, together with the related Mortgage
Files and all rights and obligations arising under the documents contained
therein. Pursuant to Section 2.01 of the Agreement, the Sellers have delivered
to the Purchaser or its custodian the Legal Documents for each Mortgage Loan
to be purchased as set forth in the Agreement. The contents of each related
Servicing File required to be maintained and retained by PHH Mortgage, in its
capacity as servicer (the "Servicer") to service the Mortgage Loans pursuant
to the Agreement and thus not delivered to the Purchaser are and shall be held
in trust by the Servicer for the benefit of the Purchaser as the owner
thereof. The Servicer's possession of any portion of each such Servicing File
is at the will of the Purchaser for the sole purpose of facilitating servicing
of the related Mortgage Loan pursuant to the Agreement, and such retention and
possession by the Servicer shall be in a custodial capacity only. The
ownership of each Mortgage Note, Mortgage, and the contents of the Mortgage
File and Servicing File is vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Servicer shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Servicer at
the will of the Purchaser in such custodial capacity only.
The Sellers confirm to the Purchaser that the representations and
warranties set forth in Sections 3.01, 3.02 and 3.03 of the Agreement are true
and correct as of the date hereof, and that all statements made in the Sellers
Officer's Certificate and all attachments thereto remain complete, true and
correct in all respects as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
[Signature page follows]
Exh. 10-1
[PHH MORTGAGE CORPORATION]
(Seller)
By: ________________________________________________
Name: ______________________________________________
Title: _____________________________________________
[XXXXXX'X GATE RESIDENTIAL
MORTGAGE TRUST]
(Seller)
By: PHH Mortgage Corporation, as Administrator
By: ________________________________________________
Name: ______________________________________________
Title: _____________________________________________
Xxx. 00-0
XXXXXXX 00
XXXXXXXX
Xxx. 11-1
EXHIBIT 12
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"), among
PHH Mortgage Corporation, Xxxxxx'x Gate Residential Mortgage Trust
and Xxxxxxx Xxxxx Mortgage Company.
I, ________________________________, the _______________________ of
PHH Mortgage Corporation (the "Company"), certify to [the Purchaser], [the
Depositor], and the [Master Servicer] [Securities Administrator] [Trustee],
and their officers, with the knowledge and intent that they will rely upon
this certification, that:
1. I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with
the servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and
15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), the
registered public accounting firm's attestation report provided in
accordance with Rules 13a-18 and 15d-18 under the Exchange Act and
Section 1122(b) of Regulation AB (the "Attestation Report"), and all
servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans by the Company during 200[ ] that
were delivered by the Company to the [Depositor] [Master Servicer]
[Securities Administrator] [Trustee] pursuant to the Agreement
(collectively, the "Company Servicing Information");
2. Based on my knowledge, the Company Servicing Information, taken as
a whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
3. Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
4. I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations
under the Agreement in all material respects; and
5. The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Subservicer or
Subcontractor pursuant to the Agreement, have been provided to the
[Depositor] [Master Servicer]. Any material
Exh. 12-1
instances of noncompliance described in such reports have been disclosed
to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date:_______________________________________________
By: ________________________________________________
Name:
Title:
Xxx. 00-0
XXXXXXX 00
XXXXXXXXX XXXXXXXX TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name
of Subservicer] shall address, at a minimum, the criteria identified as below
as "Applicable Servicing Criteria":
----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------- Applicable
Servicing Criteria Servicing Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
----------------------------------------------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance
or other triggers and events of default in accordance with the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(1)(ii) If any material servicing activities are outsourced
to third parties, policies and procedures are
instituted to monitor the third party's performance
and compliance with such servicing activities.
----------------------------------------------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans
are maintained.
----------------------------------------------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on
the party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
agreements.
----------------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding
collections, cash flows or distributions, and any
interest or other fees charged for such advances, are
made, reviewed and approved as specified in the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
Exh. 13-1
----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------- Applicable
Servicing Criteria Servicing Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(iv) The related accounts for the transaction, such as
cash reserve accounts or accounts established as a
form of overcollateralization, are separately
maintained (e.g., with respect to commingling of
cash) as set forth in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this
criterion, "federally insured depository institution"
with respect to a foreign financial institution means
a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for
all asset-backed securities related bank accounts,
including custodial accounts and related bank
clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30
calendar days after the bank statement cutoff date,
or such other number of days specified in the
transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are
resolved within 90 calendar days of their original
identification, or such other number of days
specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed
with the Commission, are maintained in accordance
with the transaction agreements and applicable
Commission requirements. Specifically, such reports
(A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements;
(B) provide information calculated in accordance with
the terms specified in the transaction agreements;
(C) are filed with the Commission as required by its
rules and regulations; and (D) agree with investors'
or the trustee's records as to the total unpaid
principal balance and number of mortgage loans
serviced by the Servicer.
----------------------------------------------------------------------------------------------------------------------
Exh. 13-2
----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------- Applicable
Servicing Criteria Servicing Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth
in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of
days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank
statements.
----------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required
by the transaction agreements or related mortgage loan documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by
the transaction agreements
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made,
reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage
loan documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the
Servicer's records with respect to an obligor's unpaid principal
balance.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's mortgage
loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction
agreements and related pool asset documents.
----------------------------------------------------------------------------------------------------------------------
Exh. 13-3
----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------- Applicable
Servicing Criteria Servicing Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded
in accordance with the timeframes or other requirements established
by the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans
with variable rates are computed based on the related mortgage loan
documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other
number of days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made
on behalf of an obligor are paid from the servicer's funds and not
charged to the obligor, unless the late payment was due to the
obligor's error or omission.
----------------------------------------------------------------------------------------------------------------------
Exh. 13-4
----------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------- Applicable
Servicing Criteria Servicing Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the servicer,
or such other number of days specified in the transaction
agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized
and recorded in accordance with the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained
as set forth in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
[NAME OF COMPANY] [NAME OF SUBSERVICER]
Date:____________________________________________________
By: _____________________________________________________
Name:
Title:
Xxx. 00-0
