EXHIBIT 99.2
EXECUTION COPY
XXXXXX XXXXXXX XXXX XXXXXX CREDIT CORPORATION,
as Servicer
MSDWCC HELOC TRUST 2003-1,
as Issuer
and
XXXXX FARGO BANK MINNESOTA, N.A.
as Indenture Trustee
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SERVICING AGREEMENT
Dated as of May 1, 2003
----------------------
Home Equity Loans
TABLE OF CONTENTS
Page
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ARTICLE I.
Definitions
Section 1.01. Definitions............................................................................1
Section 1.02. Other Definitional Provisions..........................................................1
Section 1.03. Interest Calculations..................................................................2
ARTICLE II.
Representations and Warranties
Section 2.01. Representations and Warranties Regarding the Servicer..................................3
Section 2.02. Representations and Warranties of the Issuer...........................................4
Section 2.03. Enforcement of Representations and Warranties..........................................4
ARTICLE III.
Administration and Servicing of Home Equity Loans
Section 3.01. The Servicer...........................................................................6
Section 3.02. Collection of Certain Home Equity Loan Payments........................................9
Section 3.03. Withdrawals from the Collection Account...............................................11
Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses.........................12
Section 3.05. Modification Agreements...............................................................13
Section 3.06. Trust Estate; Related Documents.......................................................13
Section 3.07. Realization Upon Defaulted Home Equity Loans..........................................14
Section 3.08. Issuer and Indenture Trustee to Cooperate.............................................15
Section 3.09. Servicing Compensation; Payment of Certain Expenses by Servicer.......................16
Section 3.10. Annual Statement as to Compliance.....................................................16
Section 3.11. Annual Servicing Report...............................................................17
Section 3.12. Access to Certain Documentation and Information Regarding the Home Equity Loans.......17
Section 3.13. Maintenance of Certain Servicing Insurance Policies...................................18
Section 3.14. Information Required by the Internal Revenue Service and Reports of
Foreclosures and Abandonments of Mortgaged Property...................................18
Section 3.15. [Reserved]............................................................................18
Section 3.16. Payment of Taxes, Insurance and Other Charges.........................................18
Section 3.17. Optional Retransfers of Home Equity Loans.............................................18
ARTICLE IV.
Servicing Reports
Section 4.01. Statements to Securityholders.........................................................19
Section 4.02. Tax Reporting.........................................................................21
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ARTICLE V.
Payment Account
Section 5.01. Payment Account.......................................................................22
ARTICLE VI.
The Servicer
Section 6.01. Liability of the Servicer.............................................................23
Section 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer.........23
Section 6.03. Limitation on Liability of the Servicer and Others....................................23
Section 6.04. Servicer Not to Resign................................................................24
Section 6.05. Delegation of Duties..................................................................24
Section 6.06. Servicer to Pay Indenture Trustee's and Owner Trustee's Fees and Expenses;
Indemnification.......................................................................25
Section 6.07. Servicer to act as Administrator for the Owner Trustee................................25
ARTICLE VII.
Default
Section 7.01. Servicing Default.....................................................................26
Section 7.02. Indenture Trustee to Act; Appointment of Successor....................................28
Section 7.03. Notification to Securityholders.......................................................30
ARTICLE VIII.
Miscellaneous Provisions
Section 8.01. Amendment.............................................................................31
Section 8.02. GOVERNING LAW.........................................................................31
Section 8.03. Notices...............................................................................31
Section 8.04. Severability of Provisions............................................................31
Section 8.05. Third-Party Beneficiaries.............................................................32
Section 8.06. Counterparts..........................................................................32
Section 8.07. Effect of Headings and Table of Contents..............................................32
Section 8.08. Termination Upon Purchase by the Servicer or Liquidation of All Home Equity
Loans.................................................................................32
Section 8.09. Certain Matters Affecting the Indenture Trustee.......................................33
Section 8.10. Owner Trustee Not Liable for Related Documents........................................33
EXHIBIT A - HOME EQUITY LOAN SCHEDULE...........................................................................A-1
EXHIBIT B - POWER OF ATTORNEY...................................................................................B-1
EXHIBIT C - FORM OF REQUEST FOR RELEASE.........................................................................D-1
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This Servicing Agreement, dated as May 1, 2003, among Xxxxxx Xxxxxxx
Xxxx Xxxxxx Credit Corporation (the "Servicer"), the MSDWCC HELOC Trust 2003-1
(the "Issuer"), and Xxxxx Fargo Bank Minnesota, N.A. (the "Indenture
Trustee").
W I T N E S S E T H T H A T:
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WHEREAS, pursuant to the terms of the Home Equity Loan Purchase
Agreement, Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation (in its capacity as
Seller) will sell to the Depositor the Home Equity Loans together with the
Related Documents on the Closing Date, and thereafter, with respect to the
Revolving Credit Loans, all Additional Balances created on or after the
Cut-off Date;
WHEREAS, the Depositor will transfer the Home Equity Loans and all
of its rights under the Home Equity Loan Purchase Agreement to the Issuer,
together with the Related Documents on the Closing Date, and thereafter, with
respect to the Revolving Credit Loans, all Additional Balances created on or
after the Cut-off Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer
will issue and transfer to or at the direction of the Depositor, the
Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will
issue and transfer to or at the direction of the Depositor, the Notes; and
WHEREAS, pursuant to the terms of this Servicing Agreement, the
Servicer will service the Home Equity Loans directly;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I.
Definitions
Section 1.01. Definitions. For all purposes of this Servicing Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the
meanings assigned to such terms in the Definitions contained in Appendix A to
the Indenture dated as of May 1, 2003 (the "Indenture"), between MSDWCC HELOC
Trust 2003-1, as issuer, and Xxxxx Fargo Bank Minnesota, N.A., as indenture
trustee, which is incorporated by reference herein. All other capitalized
terms used herein shall have the meanings specified herein.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Servicing Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or
in any such certificate or other document, to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Servicing Agreement
or in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Servicing Agreement shall refer to this Servicing Agreement
as a whole and not to any particular provision of this Servicing Agreement;
Section and Exhibit references contained in this Servicing Agreement are
references to Sections and Exhibits in or to this Servicing Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(d) The definitions contained in this Servicing Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
Section 1.03. Interest Calculations. All calculations of interest
hereunder that are made in respect of the Loan Balance of a Home Equity Loan
shall be made on a daily basis using a 365/366-day year. All calculations of
interest on the Securities shall be made on the basis of the actual number of
days in an Interest Period and a year assumed to consist of 360 days. The
calculation of the Servicing Fee shall be made on the basis of a 360-day year
consisting of twelve 30-day months. All dollar amounts calculated hereunder
shall be rounded to the nearest xxxxx with one-half of one xxxxx being rounded
up.
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ARTICLE II.
Representations and Warranties
Section 2.01. Representations and Warranties Regarding the Servicer. The
Servicer represents and warrants to the Issuer and for the benefit of the
Indenture Trustee, as pledgee of the Home Equity Loans and the Credit
Enhancer, as of the Cut-off Date:
(i) The Servicer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power to own its assets and to transact the business in which it is
currently engaged. The Servicer is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
character of the business transacted by it or properties owned or leased by it
requires such qualification and in which the failure to so qualify would have
a material adverse effect on the business, properties, assets, or condition
(financial or other) of the Servicer;
(ii) The Servicer has the power and authority to make, execute,
deliver and perform this Servicing Agreement and all of the transactions
contemplated under this Servicing Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Servicing Agreement. When executed and delivered, this Servicing Agreement
will constitute the legal, valid and binding obligation of the Servicer
enforceable in accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies;
(iii) The Servicer is not required to obtain the consent of any
other Person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Servicing Agreement, except for such consent, license,
approval or authorization, or registration or declaration, as shall have been
obtained or filed, as the case may be;
(iv) The execution and delivery of this Servicing Agreement and the
performance of the transactions contemplated hereby by the Servicer will not
violate any provision of any existing law or regulation or any order or decree
of any court applicable to the Servicer or any provision of the Certificate of
Incorporation or Bylaws of the Servicer, or constitute a material breach of
any mortgage, indenture, contract or other agreement to which the Servicer is
a party or by which the Servicer may be bound; and
(v) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the knowledge
of the Servicer threatened, against the Servicer or any of its properties or
with respect to this Servicing Agreement or the Securities which the opinion
of the Servicer has a reasonable likelihood of resulting in a material adverse
effect on the transactions contemplated by this Servicing Agreement.
The foregoing representations and warranties shall survive any
termination of the Servicer hereunder.
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Section 2.02. Representations and Warranties of the Issuer. The Issuer
hereby represents and warrants to the Servicer and for the benefit of the
Indenture Trustee, as pledgee of the Home Equity Loans and the Credit
Enhancer, as of the Cut-off Date:
(i) The Issuer is a statutory trust duly formed and in good standing
under the laws of the State of Delaware and has full power, authority and
legal right to execute and deliver this Servicing Agreement and to perform its
obligations under this Servicing Agreement, and has taken all necessary action
to authorize the execution, delivery and performance by it of this Servicing
Agreement; and
(ii) The execution and delivery by the Issuer of this Servicing
Agreement and the performance by the Issuer of its obligations under this
Servicing Agreement will not violate any provision of any law or regulation
governing the Issuer or any order, writ, judgment or decree of any court,
arbitrator or governmental authority or agency applicable to the Issuer or any
of its assets. Such execution, delivery, authentication and performance will
not require the authorization, consent or approval of, the giving of notice
to, the filing or registration with, or the taking of any other action with
respect to, any governmental authority or agency regulating the activities of
limited liability companies. Such execution, delivery, authentication and
performance will not conflict with, or result in a breach or violation of, any
mortgage, deed of trust, lease or other agreement or instrument to which the
Issuer is bound.
Section 2.03. Enforcement of Representations and Warranties. The
Servicer, on behalf of and subject to the direction of the Indenture Trustee,
as pledgee of the Home Equity Loans, the Credit Enhancer or the Issuer, shall
enforce the representations and warranties of the Seller pursuant to the Home
Equity Loan Purchase Agreement. Upon the discovery by the Seller, the
Depositor, the Servicer, the Indenture Trustee, the Credit Enhancer, the
Issuer, or any Custodian of a breach of any of the representations and
warranties made in the Home Equity Loan Purchase Agreement, in respect of any
Home Equity Loan which materially and adversely affects the interests of the
Securityholders or the Credit Enhancer, the party discovering such breach
shall give prompt written notice to the other parties (any Custodian being so
obligated under a Custodial Agreement). The Servicer shall promptly notify the
Seller of such breach and request that, pursuant to the terms of the Home
Equity Loan Purchase Agreement, the Seller either (i) cure such breach in all
material respects within 45 days (with respect to a breach of the
representations and warranties contained in Section 3.1(a) of the Home Equity
Loan Purchase Agreement) or 90 days (with respect to a breach of the
representations and warranties contained in Section 3.1(b) of the Home Equity
Loan Purchase Agreement) from the earlier of the Seller's discovery of such
breach or the date the Seller was notified of such breach or (ii) purchase
such Home Equity Loan from the Issuer at the Repurchase Price and in the
manner set forth in Section 3.1(c) of the Home Equity Loan Purchase Agreement;
provided that the Seller shall, subject to compliance with all the conditions
set forth in the Home Equity Loan Purchase Agreement, have the option to
substitute an Eligible Substitute Loan or Loans, together with any
Substitution Adjustment Amounts, for such Home Equity Loan. In the event that
the Seller elects to substitute one or more Eligible Substitute Loans pursuant
to Section 3.1(c) of the Home Equity Loan Purchase Agreement, the Seller shall
deliver to the Issuer with respect to such Eligible Substitute Loans, the
original Credit Line Agreement, the Mortgage, and such other documents and
agreements as are required by the Home Equity Loan Purchase Agreement.
Payments due with respect to Eligible Substitute Loans in the month of
substitution shall not be transferred to
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the Issuer and will be retained by the Servicer and remitted by the Servicer
to the Seller on the next succeeding Payment Date provided a payment at least
equal to the applicable Minimum Monthly Payment has been received by the
Issuer for the month of substitution in respect of the Home Equity Loan to be
removed. The Servicer shall amend or cause to be amended the Home Equity Loan
Schedule to reflect the removal of such Home Equity Loan and the substitution
of the Eligible Substitute Loans and the Servicer shall promptly deliver the
amended Home Equity Loan Schedule to the Owner Trustee and Indenture Trustee.
It is understood and agreed that the obligation of the Seller to cure
such breach or purchase or substitute for such Home Equity Loan as to which
such a breach has occurred and is continuing, together with the obligation of
the Seller in the third paragraph of Section 2.1(c) of the Home Equity Loan
Purchase Agreement and the indemnification provided in Section 6.1 of the Home
Equity Loan Purchase Agreement, shall constitute the sole remedy respecting
such breach available to the Issuer and the Indenture Trustee, as pledgee of
the Home Equity Loans, against the Seller. In connection with the purchase of
or substitution for any such Home Equity Loan by the Seller, the Issuer shall
assign to the Seller all of its right, title and interest in respect of the
Home Equity Loan Purchase Agreement applicable to such Home Equity Loan. Upon
receipt of the Repurchase Price, or upon completion of such substitution, the
Servicer shall notify the Custodian and then the Custodian shall deliver the
Mortgage Files to the Servicer, together with all relevant endorsements and
assignments prepared by the Servicer which the Indenture Trustee shall
execute.
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ARTICLE III.
Administration and Servicing
of Home Equity Loans
Section 3.01. The Servicer.
(a) The Servicer shall service and administer the Home Equity Loans in a
manner consistent with the terms of this Servicing Agreement and which shall
be normal and usual in its general mortgage servicing activities and shall
have full power and authority, acting alone or through a subservicer, to do
any and all things in connection with such servicing and administration which
it may deem necessary or desirable, it being understood, however, that the
Servicer shall at all times remain responsible to the Issuer and the Indenture
Trustee, as pledgee of the Home Equity Loans and the Credit Enhancer, for the
performance of its duties and obligations hereunder in accordance with the
terms hereof. Without limiting the generality of the foregoing, the Servicer
shall continue, and is hereby authorized and empowered by the Issuer and the
Indenture Trustee, as pledgee of the Home Equity Loans, to execute and
deliver, on behalf of itself, the Issuer, the Indenture Trustee or any of
them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments with respect
to the Home Equity Loans and with respect to the Mortgaged Properties. The
Issuer, the Indenture Trustee and the Custodian, as applicable, shall furnish
the Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. On the Closing Date, the Indenture Trustee
shall deliver to the Servicer a limited power of attorney substantially in the
form of Exhibit B hereto.
If the Mortgage relating to a Home Equity Loan did not have a Lien senior
to the Home Equity Loan on the related Mortgaged Property as of the Cut-off
Date, then the Servicer, in such capacity, may not consent to the placing of a
lien senior to that of the Mortgage on the related Mortgaged Property. If the
Mortgage relating to a Home Equity Loan had a lien senior to the Home Equity
Loan on the related Mortgaged Property as of the Cut-off Date, then the
Servicer, in such capacity, may consent to the refinancing of the prior senior
lien, provided that the following requirements are met:
(i) the resulting Combined Loan-to-Value Ratio ("CLTV") of such Home
Equity Loan is no higher than the greater of the Combined Loan-to-Value Ratio
prior to such refinancing or a 70% CLTV (or a 80% CLTV for those borrowers
with a Credit Score as of the Cut-off Date of 712 or greater); provided,
however, if such refinanced mortgage loan is a "rate and term" mortgage loan
(meaning, the borrower does not receive any cash from the refinancing), the
CLTV may increase to the extent of either (a) the reasonable closing costs of
such refinancing (up to a maximum of 5% of the CLTV) or (b) any decrease in
the value of the related Mortgaged Property, if the borrower is not delinquent
in the payment of interest or principal on such Home Equity Loan at the time
of such refinancing;
(ii) the interest rate for the loan evidencing the refinanced senior
lien is no higher than the interest rate on the loan evidencing the existing
senior lien immediately prior to the date of such refinancing (meaning, in the
case of an adjustable rate loan, a substantially
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similar index and a gross margin no higher than that of the existing senior
lien); provided, however, if the loan evidencing the existing senior lien
prior to the date of refinancing is an adjustable rate loan and the loan
evidencing the refinanced senior lien is a fixed rate loan, then the interest
rate on the loan evidencing the refinanced senior lien may be up to 2.0%
higher than the then-current mortgage rate of the loan evidencing the existing
senior lien; and
(iii) the loan evidencing the refinanced senior lien is not subject
to negative amortization.
The Servicer may also, without prior approval of the Rating Agencies and
the Credit Enhancer, increase the Credit Limits on Revolving Credit Loans,
provided that (i) a new appraisal in accordance with the Servicer's
underwriting or servicing guidelines is obtained, (ii) the new CLTV of any
such Revolving Credit Loan after giving effect to such increase is less than
or equal to the CLTV of the Revolving Credit Loan as of the Cut-off Date,
(iii) the Servicer receives verbal verification of employment of the related
Mortgagor and (iv) the payment history of the related borrower is within the
underwriting parameters of the Guide. In addition, the Servicer may increase
the Credit Limits on Revolving Credit Loans without obtaining new appraisals
provided that clauses (ii) through (iv) of the preceding sentence are
satisfied and the CLTV of the Revolving Credit Loan following the increase in
the Credit Limit is less than or equal to 100.00%. In addition, such increases
without new appraisals shall be limited to no greater than 10% of the current
Pool Balance, provided, that the principal balances of such Revolving Credit
Loans with CLTVs greater than 80% will be limited to 3% of the current Pool
Balance.
In connection with servicing the Revolving Credit Loans, the Servicer may
take reasonable actions to encourage or effect the termination of Loan
Agreements that have become dormant.
The relationship of the Servicer (and of any successor to the Servicer as
servicer under this Servicing Agreement) to the Issuer under this Servicing
Agreement is intended by the parties to be that of an independent contractor
and not that of a joint venturer, partner or agent.
(b) With the consent of the Credit Enhancer, the Servicer may enter into
Subservicing Agreements with Subservicers for the servicing and administration
of certain of the Home Equity Loans. References in this Servicing Agreement to
actions taken or to be taken by the Servicer in servicing the Home Equity
Loans include actions taken or to be taken by a Subservicer on behalf of the
Servicer and any amount actually received by such Subservicer in respect of a
Home Equity Loan shall be deemed to have been received by the Servicer whether
or not actually received by the Servicer. Each Subservicing Agreement will be
upon such terms and conditions as are not inconsistent with this Servicing
Agreement and as the Servicer and the Subservicer have agreed. With the
approval of the Servicer and the Credit Enhancer, a Subservicer may delegate
its servicing obligations to third-party servicers, but such Subservicers will
remain obligated under the related Subservicing Agreements. The Servicer and
the Subservicer may enter into amendments to the related Subservicing
Agreements; provided, however, that any such amendments shall not cause the
Home Equity Loans to be serviced in a manner that would be materially
inconsistent with the standards set forth in this Servicing Agreement. With
the consent of the Credit Enhancer, the Servicer shall be entitled to
terminate any Subservicing
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Agreement in accordance with the terms and conditions thereof and without any
limitation by virtue of this Servicing Agreement; provided, however, that in
the event of termination of any Subservicing Agreement by the Servicer or the
Subservicer, the Servicer shall either act as servicer of the related Home
Equity Loan or enter into a Subservicing Agreement with a successor
Subservicer which will be bound by the terms of the related Subservicing
Agreement. The Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Servicer and nothing contained in this
Servicing Agreement shall be deemed to limit or modify such indemnification.
In the event that the rights, duties and obligations of the Servicer are
terminated hereunder, any successor to the Servicer in its sole discretion
may, to the extent permitted by applicable law, terminate the existing
Subservicing Agreement with any Subservicer in accordance with the terms of
the applicable Subservicing Agreement (but without the payment of any
termination fee) or assume the terminated Servicer's rights and obligations
under such subservicing arrangements which termination or assumption will not
violate the terms of such arrangements.
Notwithstanding any Subservicing Agreement or any of the provisions of
this Servicing Agreement relating to agreements or arrangements between the
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, the Servicer shall remain obligated and primarily liable for the
servicing and administering of the Home Equity Loans in accordance with the
provisions of this Servicing Agreement without diminution of such obligation
or liability by virtue of such Subservicing Agreements or arrangements or by
virtue of indemnification from the Subservicer and to the same extent and
under the same terms and conditions as if the Servicer alone were servicing
and administering the Home Equity Loans. For purposes of this Servicing
Agreement, the Servicer shall be deemed to have received payments on Home
Equity Loans when the Subservicer has received such payments.
Any Subservicing Agreement that may be entered into and any transactions
or services relating to the Home Equity Loans involving a Subservicer in its
capacity as such and not as an originator shall be deemed to be between the
Subservicer and the Servicer alone, and none of the Indenture Trustee, the
Credit Enhancer or the Securityholders shall be deemed parties thereto or
shall have any claims, rights, obligations, duties or liabilities with respect
to the Subservicer. The Servicer shall be solely liable for all fees owed by
it to any Subservicer irrespective of whether the Servicer's compensation
pursuant to this Servicing Agreement is sufficient to pay such fees.
As part of its servicing activities hereunder, the Servicer, for the
benefit of the Trust, the Securityholders and the Credit Enhancer, shall use
reasonable efforts to enforce the obligations of each Subservicer under the
related Subservicing Agreement, to the extent that the non-performance of any
such obligation would have a material adverse effect on a Home Equity Loan.
Such enforcement, including, without limitation, the legal prosecution of
claims, termination of Subservicing Agreements and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Servicer, in its good faith business judgment, would
require were it the owner of the related Home Equity Loans. The Servicer shall
pay the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement to
the extent, if any,
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that such recovery exceeds all amounts due in respect of the related Home
Equity Loan or (ii) from a specific recovery of costs, expenses or attorneys
fees against the party against whom such enforcement is directed.
Section 3.02. Collection of Certain Home Equity Loan Payments.
(a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Home Equity Loans, and shall,
to the extent such procedures shall be consistent with this Servicing
Agreement follow such collection procedures as shall be normal and usual in
its general mortgage servicing activities. Consistent with the foregoing, and
without limiting the generality of the foregoing, the Servicer may in its
discretion (i) waive any late payment charge, penalty interest or other fees
which may be collected in the ordinary course of servicing such Home Equity
Loan and (ii) arrange with a Mortgagor a schedule for the payment of principal
and interest due and unpaid; provided such arrangement is generally consistent
with the Servicer's policies with respect to home equity loans generally;
provided, further, that notwithstanding such arrangement such Home Equity
Loans will be included in the information regarding delinquent Home Equity
Loans set forth in the Servicing Report. The Servicer may also extend the Due
Date for payment due on a Home Equity Loan in accordance with its standard
servicing procedures, provided, however, that the Servicer shall first
determine that any such waiver or extension will not impair the coverage of
any related insurance policy or materially adversely affect the lien of the
related Mortgage or the interests of the Securityholders or the Credit
Enhancer. Consistent with the terms of this Servicing Agreement, the Servicer
may also waive, modify or vary any term of any Home Equity Loan (including
reduce the Credit Limit with respect to any Revolving Credit Loan) or consent
to the postponement of strict compliance with any such term or in any manner
grant indulgence to any Mortgagor if in the Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Securityholders or the Credit Enhancer, provided,
however, that the Servicer may not modify or permit any Subservicer to modify
any Home Equity Loan (including without limitation any modification that would
change the Loan Rate, forgive the payment of any principal or interest (unless
in connection with the liquidation of the related Home Equity Loan) or extend
the final maturity date of such Home Equity Loan) unless such Home Equity Loan
is in default or, in the judgment of the Servicer, such default is reasonably
foreseeable. The general terms of any waiver, modification, postponement or
indulgence with respect to any of the Home Equity Loans will be included in
the Servicing Report, and such Home Equity Loans will not be considered
"delinquent" for the purposes of the Basic Documents, so long as the Mortgagor
complies with the terms of such waiver, modification, postponement or
indulgence. Notwithstanding the foregoing, the Servicer in its sole discretion
(i) may permit the Mortgagor (or may enter into a modification agreement which
will allow the Mortgagor) to make monthly payments, with respect to any
Billing Cycle during the related Draw Period, in a minimum amount that will be
equal to the related finance charge for such Billing Cycle and (ii) may reduce
the amount of the Credit Limit with respect to any Revolving Credit Loans (to
an amount no less than the then current Principal Balance of such Revolving
Credit Loan) in connection with any refinancing of a senior lien pursuant to
the second paragraph of Section 3.01(a) of this Servicing Agreement.
(b) The Servicer shall establish a Collection Account in the name of the
Indenture Trustee on behalf of the Noteholders and the Credit Enhancer, which
shall be an Eligible
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Account in which the Servicer shall deposit or cause to be deposited any
amounts representing payments and collections in respect of the Home Equity
Loans received by it subsequent to the Cut-off Date (other than in respect of
the payments referred to in the paragraph following subsection viii) within
two Business Days following receipt thereof (or otherwise on or prior to the
Closing Date), including the following payments and collections received or
made by it (without duplication):
(i) all payments of principal or interest on the Home Equity Loans
received by the Servicer, net of the Servicing Fee;
(ii) the aggregate Repurchase Price of the Home Equity Loans
purchased by the Servicer pursuant to Section 3.15;
(iii) Net Liquidation Proceeds net of any related Foreclosure
Profit;
(iv) all proceeds of any Home Equity Loans repurchased by the Seller
pursuant to the Home Equity Loan Purchase Agreement, and all Substitution
Adjustment Amounts required to be deposited in connection with the
substitution of an Eligible Substitute Loan pursuant to the Home Equity Loan
Purchase Agreement;
(v) insurance proceeds, other than Net Liquidation Proceeds,
resulting from any insurance policy maintained on a Mortgaged Property;
(vi) amounts required to be paid by the Servicer pursuant to Section
8.08;
(vii) any blanket policy deductible; and
(viii) any investment losses for amounts on deposit in the
Collection Account;
provided, however, that with respect to each Collection Period, the Servicer
shall be permitted to retain from payments in respect of interest on the Home
Equity Loans, the Servicing Fee for such Collection Period. All amounts
deposited in the Collection Account shall be held by the Servicer in trust for
the Securityholders and the Credit Enhancer until disbursed in accordance with
this Servicing Agreement. The foregoing requirements respecting deposits to
the Collection Account are exclusive, it being understood that, without
limiting the generality of the foregoing, the Servicer need not deposit in the
Collection Account amounts representing Foreclosure Profits, fees (including
annual fees) or late charge penalties, payable by Mortgagors, or amounts
received by the Servicer for the accounts of Mortgagors for application
towards the payment of taxes, insurance premiums, assessments and similar
items. In the event any amount not required to be deposited in the Collection
Account is so deposited, the Servicer may at any time withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding. The Servicer shall retain all Foreclosure Profits as
additional servicing compensation.
The Servicer may cause the institution maintaining the Collection Account
to invest any funds in the Collection Account in Permitted Investments
(including obligations of the Servicer or any of its Affiliates, if such
obligations otherwise qualify as Permitted Investments), which shall mature
not later than the Determination Date related to the following Payment Date
and shall not be sold or disposed of prior to its maturity. Except as provided
above, all income and
10
gain realized from any such investment shall inure to the benefit of the
Servicer and shall be subject to its withdrawal or order from time to time.
The amount of any losses incurred in respect of the principal amount of any
such investments shall be deposited in the Collection Account by the Servicer
out of its own funds immediately as realized.
(c) The Servicer will require each Subservicer to hold all funds
constituting collections on the Home Equity Loans, pending remittance thereof
to the Servicer, in one or more accounts meeting the requirements of an
Eligible Account, and invested in Permitted Investments.
Section 3.03. Withdrawals from the Collection Account. The Servicer
shall, from time to time as provided herein, make withdrawals from the
Collection Account of amounts on deposit therein pursuant to Section 3.02 that
are attributable to the Home Equity Loans for the following purposes:
(i) to remit to the Indenture Trustee for deposit in the Payment
Account, on the related Determination Date for each Payment Date, an amount
equal to the Interest Collections and Principal Collections for such Payment
Date;
(ii) prior to either a Rapid Amortization Event or the Collection
Period preceding the end of the Managed Amortization Period, to pay to the
Seller, with respect to the Revolving Credit Loans, the amount of any
Additional Balances as and when created during the related Collection Period,
provided, that, with respect to the Revolving Credit Loans, the aggregate
amount so paid to the Seller in respect of Additional Balances at any time
during any Collection Period shall not exceed the amount of Principal
Collections theretofore received for such Collection Period;
(iii) to the extent deposited to the Collection Account, to
reimburse itself or the related Subservicer for previously unreimbursed
expenses incurred in maintaining individual insurance policies pursuant to
Section 3.04, or Liquidation Expenses, paid pursuant to Section 3.07 or
otherwise reimbursable pursuant to the terms of this Servicing Agreement (to
the extent not payable pursuant to Section 3.09), such withdrawal right being
limited to amounts received on particular Home Equity Loans (other than any
Repurchase Price in respect thereof) which represent late recoveries of the
payments for which such advances were made, or from related Liquidation
Proceeds or the proceeds of the purchase of such Home Equity Loan;
(iv) to pay to itself out of each payment received on account of
interest on a Home Equity Loan as contemplated by Section 3.09, an amount
equal to the Servicing Fee (to the extent not retained pursuant to Section
3.02);
(v) to the extent deposited in the Collection Account to pay to
itself as additional servicing compensation any interest or investment income
earned on funds deposited in the Collection Account that it is entitled to
withdraw pursuant to Sections 3.02(b) and 5.01;
(vi) to the extent deposited in the Collection Account, to pay to
itself as additional servicing compensation any Foreclosure Profits (to the
extent permitted by law); and
11
(vii) to withdraw any other amount deposited in the Collection
Account that was not required to be deposited therein pursuant to Section
3.02.
Since, in connection with withdrawals pursuant to clauses (iii), (iv) and
(vi), the Servicer's entitlement thereto is limited to collections or other
recoveries on the related Home Equity Loan, the Servicer shall keep and
maintain separate accounting, on a Home Equity Loan by Home Equity Loan basis,
for the purpose of justifying any withdrawal from the Collection Account
pursuant to such clauses. Notwithstanding any other provision of this
Servicing Agreement, the Servicer shall be entitled to reimburse itself for
any previously unreimbursed expenses incurred pursuant to Section 3.07 or
otherwise reimbursable pursuant to the terms of this Servicing Agreement that
the Servicer determines to be otherwise nonrecoverable (except with respect to
any Home Equity Loan as to which the Repurchase Price has been paid), by
withdrawal from the Collection Account of amounts on deposit therein
attributable to the Home Equity Loans on any Business Day prior to the
Determination Date following the date of such calculation.
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Home Equity Loan
that is either (a) in a first lien position or (b) has a Credit Limit at
origination in excess of $50,000 hazard insurance naming the Servicer or
related Subservicer as loss payee thereunder providing extended coverage in an
amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements securing such Home Equity Loan from time to time or
(ii) the combined principal balance owing on such Home Equity Loan and any
mortgage loan senior to such Home Equity Loan from time to time; provided,
however, that such coverage may not be less than the minimum amount required
to fully compensate for any loss or damage on a replacement cost basis. The
Servicer shall also cause to be maintained on property acquired upon
foreclosure, or deed in lieu of foreclosure, of any Home Equity Loan, fire
insurance with extended coverage in an amount sufficient to cover the value of
the related Mortgaged Property (less the amount of any deductible). Amounts
collected by the Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the related Mortgaged Property or
property thus acquired or amounts released to the Mortgagor in accordance with
the Servicer's normal servicing procedures) shall be deposited in the
Collection Account to the extent called for by Section 3.02. The Servicer
shall be under no obligation to require that any Mortgagor maintain earthquake
or other additional insurance and shall be under no obligation itself to
maintain any such additional insurance on property acquired in respect of a
Home Equity 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. If the Servicer shall obtain and maintain a blanket policy
consistent with its general mortgage servicing activities insuring against
hazard losses on all of the Home Equity Loans, it shall conclusively be deemed
to have satisfied its obligations as set forth in the first sentence of this
Section 3.04, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.04 and there shall have
been a loss 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. Any such deposit by the Servicer shall be
made on the last Business Day of the Collection Period in the month in which
payments under any such policy would have been deposited in the Collection
Account. In connection with its
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activities as servicer of the Home Equity Loans, the Servicer agrees to
present, on behalf of itself, the Issuer and the Indenture Trustee, claims
under any such blanket policy.
Section 3.05. Modification Agreements. The Servicer shall be entitled to
(A) execute assumption agreements, substitution agreements, and instruments of
satisfaction or cancellation or of partial or full release or discharge, or
any other document contemplated by this Servicing Agreement and other
comparable instruments with respect to the Home Equity Loans and with respect
to the Mortgaged Properties subject to the Mortgages (and the Issuer and the
Indenture Trustee each shall promptly execute any such documents on request of
the Servicer) and (B) approve the granting of an easement thereon in favor of
another Person, any alteration or demolition of the related Mortgaged Property
or other similar matters, if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Home Equity Loan, that the security for, and the timely and full
collectability of, such Home Equity Loan would not be adversely affected
thereby. A partial release pursuant to this Section 3.05 shall be permitted
only if the Combined Loan-to-Value Ratio for such Home Equity Loan after such
partial release does not exceed the Combined Loan-to-Value Ratio for such Home
Equity Loan as of the Cut-off Date. Any fee collected by the Servicer or the
related Subservicer for processing such request will be retained by the
Servicer or such Subservicer as additional servicing compensation.
Section 3.06. Trust Estate; Related Documents.
(a) When required by the provisions of this Servicing Agreement, the
Issuer or the Indenture Trustee shall execute instruments to release property
from the terms of the Trust Agreement, Indenture or Custodial Agreement, as
applicable, or convey the Issuer's or the Indenture Trustee's interest in the
same, in a manner and under circumstances which are not inconsistent with the
provisions of this Servicing Agreement. No party relying upon an instrument
executed by the Issuer or the Indenture Trustee as provided in this Section
3.06 shall be bound to ascertain the Issuer's or the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any moneys.
(b) If from time to time the Servicer shall deliver to the Custodian
copies of any written assurance, assumption agreement or substitution
agreement or other similar agreement pursuant to Section 3.05, the Custodian
shall check that each of such documents purports to be an original executed
copy (or a copy of the original executed document if the original executed
copy has been submitted for recording and has not yet been returned) and, if
so, shall file such documents, and upon receipt of the original executed copy
from the applicable recording office or receipt of a copy thereof certified by
the applicable recording office shall file such originals or certified copies
with the Related Documents. If any such documents submitted by the Servicer do
not meet the above qualifications, such documents shall promptly be returned
by the Custodian to the Servicer, with a direction to the Servicer to forward
the correct documentation.
(c) Upon receipt of two copies (one of which will be returned to the
Servicer with the related Mortgage File) of a Request for Release from the
Servicer, substantially in the form of Exhibit C which shall be signed by a
Servicing Officer or in a mutually agreeable format, which in lieu of a
signature on its face will originate from a Servicing Officer, to the effect
that a Home Equity Loan has been the subject of a final payment or a
prepayment in full and the related
13
Home Equity Loan has been terminated or that substantially all Liquidation
Proceeds which have been determined by the Servicer in its reasonable judgment
to be finally recoverable have been recovered, and upon deposit to the
Collection Account of such final monthly payment, prepayment in full together
with accrued and unpaid interest to the date of such payment with respect to
such Home Equity Loan or, if applicable, Liquidation Proceeds, the Custodian
shall promptly release the related Mortgage File to the Servicer, upon request
of the Servicer. If from time to time and as appropriate for the servicing or
foreclosure of any Home Equity Loan, the Servicer requests the Custodian to
release the Mortgage File and delivers to the Custodian two copies of a
Request for Release reasonably satisfactory to the Custodian and signed by a
Responsible Officer of the Servicer, the Custodian shall release the related
Mortgage File to the Servicer. If such Home Equity Loans shall be liquidated
and the Custodian receives a certificate from the Servicer as provided above,
then, upon request of the Servicer, the Custodian shall release the Mortgage
File to the Servicer.
Section 3.07. Realization Upon Defaulted Home Equity Loans. With respect
to those of the Home Equity Loans which become and continue in default, the
Servicer will decide whether to (i) foreclose upon the Mortgaged Properties
securing such Home Equity Loans, (ii) write off the unpaid principal balance
of the Home Equity Loans as bad debt, (iii) take a deed in lieu of
foreclosure, (iv) accept a short sale, (v) arrange for a repayment plan, (vi)
agree to a modification in accordance with this Servicing Agreement, or (vii)
take an unsecured note or substitute a new lien, in each case subject to the
rights of any related first lien holder; provided that in connection with the
foregoing if the Servicer has actual knowledge that any Mortgaged Property is
affected by hazardous or toxic wastes or substances and that the acquisition
of such Mortgaged Property would not be commercially reasonable, then the
Servicer will not cause the Issuer or the Indenture Trustee to acquire title
to such Mortgaged Property in a foreclosure or similar proceeding. In
connection with such decision, the Servicer shall follow such practices
(including, in the case of any default on a related senior mortgage loan, the
advancing of funds to correct such default if deemed to be appropriate by the
Servicer) and procedures as it shall deem necessary or advisable and as shall
be normal and usual in its general mortgage servicing activities; provided
that the Servicer shall not be liable in any respect hereunder if the Servicer
is acting in connection with any such foreclosure or attempted foreclosure
which is not completed or other conversion in a manner that is consistent with
the provisions of this Servicing Agreement. The foregoing is subject to the
proviso that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or attempted foreclosure or towards the
correction of any default on a related senior mortgage loan or restoration of
any property unless it shall determine that such expenditure will increase Net
Liquidation Proceeds. In the event of a determination by the Servicer that any
such expenditure previously made pursuant to this Section 3.07 will not be
reimbursable from Net Liquidation Proceeds, the Servicer shall be entitled to
reimbursement of its funds so expended pursuant to Section 3.03.
Notwithstanding any provision of this Servicing Agreement, a Home Equity
Loan may be deemed to be finally liquidated if substantially all amounts
expected by the Servicer to be received in connection with the related
defaulted Home Equity Loan have been received; provided, however, that any
subsequent collections with respect to any such Home Equity Loan shall be
deposited to the Collection Account. For purposes of determining the amount of
any Liquidation Proceeds or Insurance Proceeds, or other unscheduled
collections, the Servicer may take into account minimal amounts of additional
receipts expected to be received or any
14
estimated additional liquidation expenses expected to be incurred in
connection with the related defaulted Home Equity Loan.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, who shall hold the same on behalf of
the Issuer in accordance with Section 3.13 of the Indenture. Notwithstanding
any such acquisition of title and cancellation of the related Home Equity
Loan, such Mortgaged Property shall (except as otherwise expressly provided
herein) be considered to be an outstanding Home Equity Loan held as an asset
of the Issuer until such time as such property shall be sold. Consistent with
the foregoing for purposes of all calculations hereunder, so long as such
Mortgaged Property shall be considered to be an outstanding Home Equity Loan
it shall be assumed that, notwithstanding that the indebtedness evidenced by
the related Credit Line Agreement shall have been discharged, such Credit Line
Agreement in effect at the time of any such acquisition of title before any
adjustment thereto by reason of any bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period will remain in effect.
Any proceeds from foreclosure proceedings or the purchase or repurchase
of any Home Equity Loan pursuant to the terms of this Servicing Agreement, as
well as any recovery resulting from a collection of Liquidation Proceeds or
Insurance Proceeds, will be applied in the following order of priority: first,
to reimburse the Servicer in accordance with Section 3.03(vii) and this
Section 3.07; second, to the Servicer, all Servicing Fees payable therefrom;
third, to the extent of accrued and unpaid interest to the Payment Date on the
related Home Equity Loan, at the Loan Rate (less the Servicing Fee Rate) on
which such amounts are to be deposited in the Payment Account; fourth, as a
recovery of principal on the Home Equity Loan; and fifth, to Foreclosure
Profits.
Section 3.08. Issuer and Indenture Trustee to Cooperate. On or before
each Determination Date, the Servicer will notify the Indenture Trustee and
the Custodian, with a copy to the Issuer, of the termination of or the payment
in full and the termination of any Home Equity Loan during the preceding
Collection Period. Upon receipt of payment in full, the Servicer is authorized
to execute, pursuant to the authorization contained in Section 3.01, if the
assignments of Mortgage have been recorded if required under the Home Equity
Loan Purchase Agreement, an instrument of satisfaction regarding the related
Mortgage, which instrument of satisfaction shall be recorded by the Servicer
if required by applicable law and be delivered to the Person entitled thereto.
It is understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursed from amounts
deposited in the Collection Account. From time to time and as appropriate for
the servicing or foreclosure of any Home Equity Loan, the Indenture Trustee or
the Custodian shall, upon request of the Servicer and delivery to the
Indenture Trustee or Custodian, with a copy to the Issuer, of two copies (one
of which will be returned to the Servicer with the related Mortgage File) of a
Request for Release, in the form annexed hereto as Exhibit C, which shall be
signed by a Servicing Officer or in a mutually agreeable electronic format
which in lieu of a signature on its face will originate from a Servicing
Officer, release or cause to be released the related Mortgage File to the
Servicer and the Issuer or Indenture Trustee shall promptly execute such
documents, in the forms provided by the Servicer, as shall be necessary for
the prosecution of any such proceedings or the taking of other servicing
actions. Such trust receipt shall obligate the Servicer to return the Mortgage
File to the Indenture Trustee or the Custodian (as specified in such
15
receipt) when the need therefor by the Servicer no longer exists unless the
Home Equity Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
trust receipt shall be released to the Servicer.
In order to facilitate the foreclosure of the Mortgage securing any Home
Equity Loan that is in default following recordation of the assignments of
Mortgage in accordance with the provisions of the Home Equity Loan Purchase
Agreement, the Indenture Trustee or the Issuer shall, if so requested in
writing by the Servicer, promptly execute an appropriate assignment in the
form provided by the Servicer to assign such Home Equity Loan for the purpose
of collection to the Servicer (any such assignment shall unambiguously
indicate that the assignment is for the purpose of collection only), and, upon
such assignment, such assignee for collection will thereupon bring all
required actions in its own name and otherwise enforce the terms of the Home
Equity Loan and deposit or credit the Net Liquidation Proceeds, exclusive of
Foreclosure Profits, received with respect thereto in the Collection Account.
In the event that all delinquent payments due under any such Home Equity Loan
are paid by the Mortgagor and any other defaults are cured, then the assignee
for collection shall promptly reassign such Home Equity Loan to the Indenture
Trustee and return the related Mortgage File to the Custodian.
In connection with the Issuer's obligation to cooperate as provided in
this Section 3.08 and all other provisions of this Servicing Agreement
requiring the Issuer to authorize or permit any actions to be taken with
respect to the Home Equity Loans, the Indenture Trustee, as pledgee of the
Home Equity Loans and as assignee of record of the Home Equity Loans on behalf
of the Issuer pursuant to Section 3.13 of the Indenture, expressly agrees, on
behalf of the Issuer, to take all such actions on behalf of the Issuer and to
promptly execute and return all instruments reasonably required by the
Servicer in connection therewith; provided that if the Servicer shall request
a signature of the Indenture Trustee, on behalf of the Issuer, the Servicer
will deliver to the Indenture Trustee an Officer's Certificate stating that
such signature is necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties under this Servicing Agreement.
Section 3.09. Servicing Compensation; Payment of Certain Expenses by
Servicer. The Servicer shall be entitled to receive the Servicing Fee in
accordance with Section 3.03 as compensation for its services in connection
with servicing the Home Equity Loans. Moreover, additional servicing
compensation in the form of late payment charges and other receipts not
required to be deposited in the Collection Account as specified in Section
3.02 shall be retained by the Servicer. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder
(including payment of all other fees and expenses not expressly stated
hereunder to be for the account of the Securityholders, including, without
limitation, the Indenture Trustee and any Custodian) and shall not be entitled
to reimbursement therefor.
Section 3.10. Annual Statement as to Compliance.
(a) The Servicer will deliver to the Issuer, the Underwriter and the
Indenture Trustee, with a copy to the Credit Enhancer, on or before the last
day of February of each year, beginning February 2004, an Officer's
Certificate stating that (i) a review of the activities of the Servicer during
the preceding fiscal year and of its performance under servicing agreements,
including this Servicing Agreement has been made under such officer's
supervision and (ii) to the best of
16
such officer's knowledge, based on such review, the Servicer has complied in
all material respects with the minimum servicing standards set forth in the
Uniform Single Attestation Program for Mortgage Bankers and has fulfilled all
of its material obligations in all material respects throughout such year, or,
if there has been material noncompliance with such servicing standards or a
default in the fulfillment in all material respects of any such obligation
relating to this Servicing Agreement, such statement shall include a
description of such noncompliance or specify each such default, as the case
may be, known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Issuer and the Indenture Trustee,
with a copy to the Credit Enhancer, promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, written
notice by means of an Officer's Certificate of any event which with the giving
of notice or the lapse of time or both, would become a Servicing Default.
(c) Upon the reasonable request of the Indenture Trustee, the Servicer
will provide to the Indenture Trustee a copy of its financial statements for
the most recent fiscal year; provided that such financial statements are
available for distribution.
Section 3.11. Annual Servicing Report. On or before the last day of
February of each year, beginning February 2004, the Servicer at its expense
shall cause a firm of nationally recognized independent public accountants
(who may also render other services to the Servicer) to furnish a report to
the Issuer, the Indenture Trustee, the Depositor, each Underwriter, the Credit
Enhancer and each Rating Agency stating its opinion that, on the basis of an
examination conducted by such firm substantially in accordance with standards
established by the American Institute of Certified Public Accountants, the
assertions made pursuant to Section 3.10 regarding compliance with the minimum
servicing standards set forth in the Uniform Single Attestation Program for
Mortgage Bankers during the preceding fiscal year are fairly stated in all
material respects, subject to such exceptions and other qualifications that,
in the opinion of such firm, such accounting standards require it to report.
In rendering such statement, such firm may rely, as to matters relating to the
direct servicing of home equity loans by Subservicers, upon comparable
statements for examinations conducted by independent public accountants
substantially in accordance with standards established by the American
Institute of Certified Public Accountants (rendered within one year of such
statement) with respect to such Subservicers.
Section 3.12. Access to Certain Documentation and Information Regarding
the Home Equity Loans. Whenever required by statute or regulation, the
Servicer shall provide to the Credit Enhancer, any Securityholder upon
reasonable request (or a regulator for a Securityholder) or the Indenture
Trustee, reasonable access to the documentation regarding the Home Equity
Loans such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices of the Servicer.
Nothing in this Section 3.12 shall derogate from the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section 3.12 as a result of such obligation shall not
constitute a breach of this Section 3.12.
17
Section 3.13. Maintenance of Certain Servicing Insurance Policies. The
Servicer shall during the term of its service as servicer maintain in force
(i) a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Servicer hereunder and (ii) a fidelity bond
in respect of its officers, employees or agents. Each such policy or policies
and bond shall be at least equal to the coverage that would be required by
FNMA or FHLMC, whichever is greater, for Persons performing servicing for home
equity loans purchased by such entity.
Section 3.14. Information Required by the Internal Revenue Service and
Reports of Foreclosures and Abandonments of Mortgaged Property. The Servicer
shall prepare and deliver all federal and state information reports with
respect to the Home Equity Loans when and as required by all applicable state
and federal income tax laws. In particular, with respect to the requirement
under Section 6050J of the Code to the effect that the Servicer or Subservicer
shall make reports of foreclosures and abandonments of any mortgaged property
for each year beginning in 2003, the Servicer or Subservicer shall file
reports relating to each instance occurring during the previous calendar year
in which the Servicer (i) on behalf of the Issuer, acquires an interest in any
Mortgaged Property through foreclosure or other comparable conversion in full
or partial satisfaction of a Home Equity Loan, or (ii) knows or has reason to
know that any Mortgaged Property has been abandoned. The reports from the
Servicer or Subservicer shall be in form and substance sufficient to meet the
reporting requirements imposed by Section 6050J and Section 6050H (reports
relating to mortgage interest received) of the Code.
Section 3.15. [Reserved].
Section 3.16. Payment of Taxes, Insurance and Other Charges. With respect
to each Home Equity Loan, the Servicer will maintain accurate records
reflecting fire and hazard insurance coverage to the extent required by
Section 3.04.
With respect to each Home Equity Loan as to which the Servicer maintains
escrow accounts, the Servicer shall maintain accurate records reflecting the
status of ground taxes, assessments, water rates and other charges which are
or may become a lien upon the Mortgaged Property and the status of primary
mortgage guaranty premiums, if any, 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
applicable penalty or termination date and at a time appropriate for securing
the maximum amounts allowable, employing for such purpose deposits of the
Mortgagor in any escrow account which shall have been estimated and
accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage. To the extent that a Mortgage does
not provide for escrow payments, the Servicer shall, if it has received notice
of a default or a deficiency, monitor such payments to determine if they are
made by the Mortgagor.
Section 3.17. Optional Retransfers of Home Equity Loans. Pursuant to
Section 2.3 of the Home Equity Loan Purchase Agreement, the Servicer, in its
capacity as Seller, may, but shall not be obligated to, require the retransfer
of Home Equity Loans from the Trust to the Seller as of the close of business
on a Transfer Date after giving notice to the Indenture Trustee on the Notice
Transfer Date. Any such retransfers shall be permissible only upon the
satisfaction of the conditions set forth in Section 2.3 of the Home Equity
Loan Purchase Agreement.
18
ARTICLE IV.
Servicing Reports
Section 4.01. Statements to Securityholders.
(a) With respect to each Payment Date, on the related Determination Date,
the Servicer shall forward to the Indenture Trustee monthly Servicing Reports
in a mutually agreeable electronic format. The Servicing Reports shall set
forth the following information to the extent applicable:
(i) the aggregate amount of (a) Interest Collections, (b) Principal
Collections, (c) Substitution Adjustment Amounts and (d) Investor P&I
Collections;
(ii) (a) the aggregate Loan Balance of the Home Equity Loans as of
the end of the preceding Collection Period, (b) the Investor Amount, (c) the
aggregate Loan Balance of the Mortgage and (d) the aggregate Loan Balance of
the Revolving Credit;
(iii) with respect to the Revolving Credit Loans, the aggregate
amount of Additional Balances created during the previous Collection Period
conveyed to the Issuer;
(iv) the number and aggregate Loan Balances of Home Equity Loans (a)
as to which the Minimum Monthly Payment is delinquent for 30-59 days, 60-89
days and 90 or more days, respectively, (b) that are foreclosed and (c) that
have become REO, in each case as of the end of the preceding Collection
Period; provided, however, that such information will not be provided on the
statements relating to the first Payment Date;
(v) the aggregate Liquidation Loss Amounts with respect to the
related Collection Period, the amount of any Liquidation Loss Distribution
Amounts with respect to the Notes, and the aggregate of the Liquidation Loss
Amounts from all Collection Periods to date expressed as dollars and as a
percentage of the aggregate Cut-off Date Loan Balance;
(vi) the aggregate Servicing Fees for the related Collection Period
and the aggregate amount of Draws for the related Collection Period;
(vii) the aggregate outstanding principal balance of the three Home
Equity Loans having the largest outstanding principal balances or Credit
Limits, as applicable for the related Collection Period;
(viii) the number and aggregate outstanding principal balances of
the Home Equity Loans which are 180 or more days delinquent in the payment of
all or any portion of the scheduled interest or principal for the related
Collection Period;
(ix) the 60+ Delinquency Percentage (Rolling Six Month) for the
related Collection Period;
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(x) the number and the aggregate Loan Balances of Liquidated Home
Equity Loans for the related Collection Period; and
(xi) the number and the aggregate Loan Balances of Home Equity Loans
having an outstanding principal balance (or any other amounts owing but
otherwise unpaid) as of or following the final maturity date as set forth in
the Related Documents respecting such Home Equity Loans.
The Indenture Trustee pursuant to Section 3.26 of the Indenture shall prepare
its monthly Statement based solely on the information contained in the
Servicing Reports and shall make available such statements to each
Certificateholder, Noteholder, the Credit Enhancer, the Depositor, the Owner
Trustee, the Certificate Paying Agent and each Rating Agency. The Indenture
Trustee may conclusively rely on the correctness of the information contained
in the Servicing Reports, without independent verification thereof. The
Statements to Securityholders shall contain the information in the Servicing
Report and the following information:
(i) the amount of such distribution as principal to the Noteholders;
(ii) the amount of such distribution as interest to the Noteholders,
separately stating the portion thereof in respect of overdue accrued interest;
(iii) the amount of any Credit Enhancement Draw Amount, if any, for
such Payment Date and the aggregate amount of prior draws thereunder not yet
reimbursed;
(iv) the amount of such distribution as principal and interest to
the Certificateholders of the Certificates, separately stating the portion
thereof which resulted in a reduction of the Certificate Principal Balance
thereof;
(v) the weighted average Net Loan Rate for the related Collection
Period;
(vi) the Note Balance of each Class of Notes and the Certificate
Principal Balance of the Certificates after giving effect to the distribution
of principal on such Payment Date; and
(vii) the Required Overcollateralization Amount for the related
Payment Date.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts shall be expressed as an aggregate dollar amount per Note
or Certificate, as applicable, with a $1,000 denomination.
The Indenture Trustee will make the monthly statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Noteholders and the Certificateholders and
offer parties described in the second preceding paragraph via the Indenture
Trustee's internet website. The Indenture Trustee's internet website shall
initially be located at "xxx.xxxxxxx.xxx". Assistance in using the website can
be obtained by calling the Indenture Trustee's customer service desk at (301)
815-6600. Parties that are unable to use the above distribution options are
entitled to have a paper copy mailed to them via
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first class mail by calling the customer service desk and indicating such. The
Indenture Trustee shall have the right to change the way monthly Statements
are distributed in order to make such distribution more convenient and/or more
accessible to the Noteholders and the Certificateholders and the Indenture
Trustee shall provide timely and adequate notification to all the Noteholders
and the Certificateholders regarding any such changes. The Indenture Trustee
shall deliver to the Credit Enhancer a paper copy of such monthly statements.
In addition, the Servicer shall forward to the Indenture Trustee any
other information reasonably requested by the Indenture Trustee necessary to
make distributions pursuant to Section 3.05 of the Indenture. Prior to the
close of business on each Determination Date, the Servicer shall furnish a
written statement to the Certificate Paying Agent and the Indenture Trustee
setting forth the aggregate amounts required to be withdrawn from the
Collection Account and deposited into the Payment Account on such
Determination Date pursuant to Section 3.03. The determination by the Servicer
of such amounts shall, in the absence of obvious error, be presumptively
deemed to be correct for all purposes hereunder and the Certificate Paying
Agent and Indenture Trustee shall be protected in relying upon the same
without any independent check or verification. In addition, upon the Issuer's
written request, the Servicer shall promptly furnish information reasonably
requested by the Issuer that is reasonably available to the Servicer to enable
the Issuer to perform its federal and state income tax reporting obligations.
Section 4.02. Tax Reporting. So long as Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit
Corporation or any affiliate thereof owns 100% of the Certificates, then no
separate federal and state income tax returns and information returns or
reports will be filed with respect to the Issuer, and the Issuer will be
treated for tax purposes as an entity wholly owned by Xxxxxx Xxxxxxx Xxxx
Xxxxxx Credit Corporation or an affiliate thereof.
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ARTICLE V.
Payment Account
Section 5.01. Payment Account. The Indenture Trustee shall establish and
maintain a Payment Account titled "Xxxxx Fargo Bank Minnesota, N.A., as
Indenture Trustee, for the benefit of the Securityholders, the Certificate
Paying Agent and the Credit Enhancer pursuant to the Indenture, dated as of
May 1, 2003, between MSDWCC HELOC Trust 2003-1 and Xxxxx Fargo Bank Minnesota,
N.A.". The Payment Account shall be an Eligible Account. On each Payment Date,
amounts on deposit in the Payment Account will be distributed by the Indenture
Trustee in accordance with Section 3.05 of the Indenture. For the period
beginning on and including the Determination Date and ending on but excluding
the third Business Day prior to the Payment Date, the Indenture Trustee shall,
invest or cause the institution maintaining the Payment Account to invest the
funds in the Payment Account as directed by the Servicer, but only in
Permitted Investments designated in the name of the Indenture Trustee, which
shall mature not later than the Business Day next preceding such third
Business Day prior to the Payment Date next following the date of such
investment and shall not be sold or disposed of prior to maturity. Thereafter,
the Indenture Trustee may invest the funds in the Payment Account for its own
benefit and at its direction but only in Permitted Investments which should
mature not later than (i) the Business Day preceding the Payment Date or (ii)
with respect to Permitted Investments described in clause (v) of the
definition thereof that are managed by the Indenture Trustee or its Affiliates
or for which the Indenture Trustee or any Affiliate acts as advisor, the
Payment Date. All income and gain realized from any such investment for the
period beginning on and including the Determination Date to but excluding such
third Business Day prior to the Payment Date shall be for the benefit of the
Servicer and shall be subject to withdrawal by the Indenture Trustee for
payment to the Servicer from time to time. All income and gain realized from
any such investment for the period beginning on the third Business Day
preceding the Payment Date and ending on the Business Day preceding the
Payment Date pursuant to clause (i) above, or the Payment Date pursuant to
clause (ii) above, as the case may be, shall be for the benefit of the
Indenture Trustee. The amount of any losses incurred in respect of any such
investments shall be deposited in the Payment Account by the party which made
the investment decision resulting in such loss (i.e., either the Servicer or
the Indenture Trustee, as the case may be), out of its own funds immediately
as realized.
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ARTICLE VI.
The Servicer
Section 6.01. Liability of the Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Servicer herein.
Section 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. Any corporation into which the Servicer may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any corporation succeeding to the business of the
Servicer, shall (with the consent of the Credit Enhancer, which consent shall
not be unreasonably withheld if such merger, conversion or consolidation is
with an Affiliate of the Servicer and provided that the resulting Person is of
reasonably equivalent capitalization) be the successor of the Servicer,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
The Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; provided that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
home equity loans, is reasonably satisfactory to the Indenture Trustee (as
pledgee of the Home Equity Loans), the Issuer and the Credit Enhancer, is
willing to service the Home Equity Loans and executes and delivers to the
Indenture Trustee and the Issuer an agreement, in form and substance
reasonably satisfactory to the Credit Enhancer, the Indenture Trustee and the
Issuer, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this Servicing Agreement; provided further that
each Rating Agency's rating of the Securities in effect immediately prior to
such assignment and delegation will not be qualified, reduced, or withdrawn as
a result of such assignment and delegation (as evidenced by a letter to such
effect from each Rating Agency), if determined without regard to the Credit
Enhancement Instrument; and provided further that the Owner Trustee and the
Credit Enhancer receives an Opinion of Counsel to the effect that such
assignment or delegation shall not cause the Owner Trust to be treated as a
corporation for federal or state income tax purposes.
Section 6.03. Limitation on Liability of the Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of
the Servicer shall be under any liability to the Issuer, the Owner Trustee,
the Indenture Trustee or the Securityholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Servicing Agreement, provided, however, that this provision shall not protect
the Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or negligence in the
performance of its duties hereunder or by reason of its reckless disregard of
its obligations and duties hereunder. The Servicer and any director or officer
or employee or agent of the Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Servicer and any director or officer or
employee or agent of the Servicer shall be indemnified by the Issuer and held
harmless against any loss, liability or expense incurred in
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connection with any legal action relating to this Servicing Agreement or the
Securities, other than any loss, liability or expense incurred by reason of
its willful misfeasance, bad faith or negligence in the performance of its
duties hereunder or by reason of its reckless disregard of its obligations and
duties hereunder pursuant to Section 3.05(a)(i) and Section 3.05(a)(ix) of the
Indenture. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Home Equity Loans in accordance with this Servicing Agreement, and
which in its opinion may involve it in any expense or liability; provided,
however, that the Servicer may in its sole discretion undertake any such
action which it may deem necessary or desirable in respect of this Servicing
Agreement, and the rights and duties of the parties hereto and the interests
of the Securityholders. In such event, the reasonable legal expenses and costs
of such action and any liability resulting therefrom shall be expenses, costs
and liabilities of the Issuer, and the Servicer shall be entitled to be
reimbursed therefor. The Servicer's right to indemnity or reimbursement
pursuant to this Section 6.03 shall survive any resignation or termination of
the Servicer pursuant to Section 6.04 or 7.01 with respect to any losses,
expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination).
Section 6.04. Servicer Not to Resign. Subject to the provisions of
Section 6.02, the Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and
nature carried on by the Servicer or its subsidiaries or Affiliates at the
date of this Servicing Agreement or (ii) upon satisfaction of the following
conditions: (a) the Servicer has proposed a successor servicer to the Issuer
and the Indenture Trustee in writing and such proposed successor servicer is
reasonably acceptable to the Issuer and the Indenture Trustee, (b) each Rating
Agency shall have delivered a letter to the Issuer, the Credit Enhancer and
the Indenture Trustee prior to the appointment of the successor servicer
stating that the proposed appointment of such successor servicer as Servicer
hereunder will not result in the qualification, reduction or withdrawal of the
then current rating of the Securities, if determined without regard to the
Credit Enhancement Instrument; and (c) such proposed successor servicer is
acceptable to the Credit Enhancer, as evidenced by a letter to the Issuer and
the Indenture Trustee; provided, however, that no such resignation by the
Servicer shall become effective until such successor servicer or, in the case
of (i) above, the Indenture Trustee, as pledgee of the Home Equity Loans,
shall have assumed the Servicer's responsibilities and obligations hereunder
or the Indenture Trustee, as pledgee of the Home Equity Loans, shall have
designated a successor servicer in accordance with Section 7.02. Any such
resignation shall not relieve the Servicer of responsibility for any of the
obligations specified in Sections 7.01 and 7.02 as obligations that survive
the resignation or termination of the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Indenture Trustee and the Credit
Enhancer.
Section 6.05. Delegation of Duties. In the ordinary course of business,
the Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those with which the Servicer complies
pursuant to Section 3.01. Such delegation shall not relieve the Servicer of
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its liabilities and responsibilities with respect to such duties and shall not
constitute a resignation within the meaning of Section 6.04.
Section 6.06. Servicer to Pay Indenture Trustee's and Owner Trustee's
Fees and Expenses; Indemnification.
(a) The Servicer covenants and agrees to pay to the Owner Trustee, the
Indenture Trustee and any co-trustee of the Indenture Trustee or the Owner
Trustee from time to time, and the Owner Trustee, the Indenture Trustee and
any such co-trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by each of them in the
execution of the trusts created under the Trust Agreement and the Indenture or
any other Basic Document and in the exercise and performance of any of the
powers and duties under the Trust Agreement or the Indenture, as the case may
be, of the Owner Trustee, the Indenture Trustee and any co-trustee, and the
Servicer will pay or reimburse the Indenture Trustee and any co-trustee upon
request for all reasonable expenses, disbursements and advances incurred or
made by the Indenture Trustee or any co-trustee in accordance with any of the
provisions of this Servicing Agreement except any such expense, disbursement
or advance as may arise from its negligence, willful misfeasance or bad faith.
The Servicer further agrees to indemnify the Owner Trustee in the same manner
and to the same extent as is provided by the holder of the majority of the
Certificate Percentage Interest of the Certificates in Section 7.02 of the
Trust Agreement.
(b) The Servicer shall indemnify and hold harmless the Trust, the Credit
Enhancer, the Indenture Trustee and the Owner Trustee from and against any
loss, liability, expense, damage or injury suffered or sustained by reason of
the Servicer's willful misfeasance, bad faith or negligence in the performance
of its activities in any material respect in servicing or administering the
Home Equity Loans pursuant to this Servicing Agreement, including, but not
limited to, any judgment, award, settlement, reasonable attorneys' fees and
other costs or expenses incurred in connection with the defense of any actual
or threatened action, proceeding or claim related to the Servicer's willful
misfeasance, bad faith or negligence in the performance of its activities in
any material respect in servicing or administering the Home Equity Loans
pursuant to this Servicing Agreement. Any such indemnification shall not be
payable from the assets of the Trust. The provisions of this Section 6.06
shall survive the termination of this Servicing Agreement.
Section 6.07. Servicer to act as Administrator for the Owner Trustee. The
Servicer shall perform all its duties and the duties of the Issuer under the
Indenture and other Basic Documents, unless otherwise specifically delegated
to another party therein. In furtherance of the foregoing, the Servicer shall
take all necessary action that is the duty of the Issuer to take pursuant to
the Indenture and other Basic Documents, unless such duty has been
specifically delegated to another party therein.
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ARTICLE VII.
Default
Section 7.01. Servicing Default. If any one of the following events
("Servicing Default") shall occur and be continuing:
(i) Any failure by the Servicer (a) to deposit in the Collection
Account any deposit required to be made under the terms of this Servicing
Agreement or to make payments to be made under the terms of the Insurance
Agreement which continues unremedied for a period of five Business Days or (b)
to deposit in the Payment Account any deposit required to be made under the
terms of this Servicing Agreement which continues unremedied for a period of
one Business Day after the date upon which written notice of such failure
shall have been given to the Servicer by the Issuer or the Indenture Trustee,
or to the Servicer, the Issuer and the Indenture Trustee by the Credit
Enhancer; or
(ii) Failure on the part of the Servicer duly to observe or perform
in any material respect any other covenants or agreements of the Servicer set
forth in the Securities or in this Servicing Agreement or the Insurance
Agreement, which failure, in each case, materially and adversely affects the
interests of Securityholders or the Credit Enhancer and which continues
unremedied for a period of 45 days or 60 days, respectively, after the date on
which written notice of such failure, requiring the same to be remedied, and
stating that such notice is a "Notice of Default" hereunder, shall have been
given to the Servicer by the Issuer or the Indenture Trustee, or to the
Servicer, the Issuer and the Indenture Trustee by the Credit Enhancer; or
(iii) The entry against the Servicer of a decree or order by a court
or agency or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days;
(iv) The Servicer shall voluntarily go into liquidation, consent to
the appointment of a conservator, receiver, liquidator or similar person in
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property, or a decree or order of a court, agency or
supervisory authority having jurisdiction in the premises for the appointment
of a conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Servicer and such decree or order shall have remained
in force undischarged, unbonded or unstayed for a period of 60 days; or the
Servicer shall admit in writing its inability to pay its debts generally as
they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of
its creditors or voluntarily suspend payment of its obligations;
26
(v) the long-term unsecured debt rating of Xxxxxx Xxxxxxx or any
successor and surviving entity with a Controlling Interest in the Servicer is
suspended, terminated or downgraded below "Baa3" by Xxxxx'x or "BBB-" by S&P
and the Servicer Performance Test is not satisfied; or
(vi) there has been a Change of Ownership and the Servicer Test is
not satisfied;
then, and in every such case, so long as a Servicing Default shall not have
been remedied by the Servicer, either the Issuer or the Indenture Trustee (to
the extent a Responsible Officer of the Indenture Trustee has actual knowledge
of such Servicing Default), with the prior written consent of the Credit
Enhancer, or the Credit Enhancer, by notice then given in writing to the
Servicer (and to the Issuer and the Indenture Trustee if given by the Credit
Enhancer) may terminate all of the rights and obligations of the Servicer as
servicer under this Servicing Agreement other than its right to receive
servicing compensation and expenses for servicing the Home Equity Loans
hereunder during any period prior to the date of such termination and the
Issuer or the Indenture Trustee, with the prior written consent of the Credit
Enhancer, or the Credit Enhancer may exercise any and all other remedies
available at law or equity. Any such notice to the Servicer shall also be
given to each Rating Agency, the Credit Enhancer and the Issuer. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Servicing Agreement, whether with respect to the
Securities or the Home Equity Loans or otherwise, shall pass to and be vested
in a successor servicer designated by the Credit Enhancer (or if the Credit
Enhancer does not designate a successor servicer, the Indenture Trustee as
pledgee of the Home Equity Loans), pursuant to and under this Section 7.01;
and, without limitation, such successor servicer or the Indenture Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Home Equity Loan and related
documents, or otherwise; provided, that, without affecting the immediate
termination of the rights of the Servicer hereunder, it is understood and
acknowledged by the parties hereto that there will be a period of transition,
not to exceed 90 days before the servicing transfer is fully effected; and
provided, further, that any failure to perform such duties or responsibilities
caused by the Servicer's failure to provide the documents and records required
by Section 7.01 hereof shall not be considered a default by the Indenture
Trustee as successor to the Servicer hereunder. The Servicer agrees to
cooperate with such successor servicer or the Indenture Trustee in effecting
the termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, the transfer to such successor servicer or the
Indenture Trustee for the administration by it of all cash amounts relating to
the Home Equity Loans that shall at the time be held by the Servicer and to be
deposited by it in the Collection Account, or that have been deposited by the
Servicer in the Collection Account or thereafter received by the Servicer with
respect to the Home Equity Loans. All reasonable costs and expenses
(including, but not limited to, attorneys' fees) incurred in connection with
amending this Servicing Agreement to reflect such succession as Servicer
pursuant to this Section 7.01 shall be paid by the predecessor Servicer (or if
the predecessor Servicer is the Indenture Trustee, the initial Servicer) upon
presentation of reasonable documentation of such costs and expenses.
27
Notwithstanding the foregoing, a delay in or failure of performance under
Section 7.01(i) or under Section 7.01(ii) after the applicable grace periods
specified in such Sections, shall not constitute a Servicing Default if such
delay or failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by an act of
God or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes, floods or similar causes. The preceding sentence shall not
relieve the Servicer from using reasonable efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Servicing
Agreement and the Servicer shall provide the Indenture Trustee, the Credit
Enhancer and the Securityholders with notice of such failure or delay by it,
together with a description of its efforts to so perform its obligations. The
Servicer shall immediately notify the Indenture Trustee, the Credit Enhancer
and the Owner Trustee in writing of any Servicing Default.
Notwithstanding anything to the contrary in this Agreement, the Indenture
Trustee is not obligated to determine whether the Servicer Test or Servicer
Performance Test has been satisfied or monitor whether there has been a Change
of Ownership.
Section 7.02. Indenture Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 or sends a notice pursuant to Section 6.04, the
Indenture Trustee shall appoint a successor servicer in accordance with the
instruction of the Credit Enhancer, or if the Credit Enhancer does not provide
the Indenture Trustee such instruction within 30 days of such notice, the
Indenture Trustee, in a period not to exceed 90 days shall appoint a successor
Servicer or shall itself become the successor in all respects to the Servicer
in its capacity as servicer under this Servicing Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof. Notwithstanding the foregoing,
the parties hereto agree that the Indenture Trustee, in its capacity as
successor Servicer, immediately will assume all of the obligations of the
Servicer to make advances hereunder. During such 90 day period, neither the
Indenture Trustee nor any successor Servicer shall be responsible for any lack
of information or documents that it cannot reasonably obtain on a practical
basis under the circumstances. Neither the Indenture Trustee nor any successor
Servicer shall be liable for any action taken by the terminated Servicer
during such 90 day period. Nothing in this Servicing Agreement, the Indenture
or in the Trust Agreement shall be construed to permit or require the
Indenture Trustee to (i) succeed to the responsibilities, duties and
liabilities of the initial Servicer in its capacity as Seller under the Home
Equity Loan Purchase Agreement, (ii) be responsible or accountable for any act
or omission of the Servicer prior to the issuance of a notice of termination
hereunder, (iii) require or obligate the Indenture Trustee, in its capacity as
successor Servicer, to purchase, repurchase or substitute any Home Equity
Loan, (iv) fund any Additional Balances with respect to any Revolving Credit
Loans, (v) fund any losses on any Permitted Investment directed by any other
Servicer, or (vi) be responsible for the representations and warranties of the
Servicer. As compensation therefor, any successor servicer other than the
Indenture Trustee shall be entitled to such compensation as it and the Credit
Enhancer may agree upon and, if the Indenture Trustee is the successor
servicer, the Indenture Trustee shall be entitled to such compensation as the
Servicer would have been entitled to hereunder if no such notice of
termination had been given. The predecessor Servicer shall also pay the
Transition Costs of the Indenture Trustee or other
28
servicer as successor Servicer. To the extent not paid by the predecessor
Servicer, any Transition Costs incurred by the Indenture Trustee shall be paid
pursuant to Section 3.05(a)(i) of the Indenture. Notwithstanding the above,
(i) if the Credit Enhancer does not direct the appointment of a successor
servicer and if the Indenture Trustee is unwilling to act as successor
Servicer itself or appoint a successor to act as successor Servicer, or (ii)
if the Credit Enhancer does not direct the appointment of a successor servicer
and if the Indenture Trustee is legally unable so to act, the Indenture
Trustee may (in the situation described in clause (i)) or shall (in the
situation described in clause (ii)) appoint or petition a court of competent
jurisdiction to appoint any established housing and home finance institution,
bank or other mortgage loan or home equity loan servicer having a net worth of
not less than $10,000,000 as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder; provided that any such successor Servicer shall be
acceptable to the Credit Enhancer, as evidenced by the Credit Enhancer's prior
written consent which consent shall not be unreasonably withheld or delayed
and provided further that the appointment of any such successor Servicer will
not result in the qualification, reduction or withdrawal of the ratings
assigned to the Securities by the Rating Agencies, if determined without
regard to the Credit Enhancement Instrument. Pending appointment of a
successor to the Servicer hereunder, unless the Indenture Trustee is
prohibited by law from so acting, the Indenture Trustee, in a period not to
exceed 90 days, shall itself succeed or appoint a successor to succeed to all
of the rights and duties of the Servicer hereunder hereinabove provided. In
connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Home Equity Loans in an
amount equal to the compensation which the Servicer would otherwise have
received pursuant to Section 3.09 (or such other compensation as the Credit
Enhancer and such successor shall agree, together with the Transition Costs of
the successor Servicer, which shall be paid by the predecessor Servicer). The
appointment of a successor Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Servicing Agreement
prior to its termination as Servicer (including, without limitation, the
obligation to purchase Home Equity Loans pursuant to Section 3.01, to pay any
deductible under an insurance policy pursuant to Section 3.04 or to indemnify
the Indenture Trustee pursuant to Section 6.06), nor shall any successor
Servicer be liable for any acts or omissions of the predecessor Servicer or
for any breach by such Servicer of any of its representations or warranties
contained herein or in any related document or agreement. The Indenture
Trustee and such successor shall take such action, consistent with this
Servicing Agreement, as shall be necessary to effectuate any such succession.
(b) Any successor, including the Indenture Trustee, to the Servicer as
servicer shall during the term of its service as servicer (i) continue to
service and administer the Home Equity Loans for the benefit of the
Securityholders and the Credit Enhancer, (ii) maintain in force a policy or
policies of insurance covering errors and omissions in the performance of its
obligations as Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Servicer is so
required pursuant to Section 3.13 and (iii) be bound by the terms of the
Insurance Agreement.
(c) Any successor Servicer, including the Indenture Trustee, shall not be
deemed in default or to have breached its duties hereunder if the predecessor
Servicer shall fail to deliver any required deposit to the Collection Account
or otherwise cooperate with any required servicing transfer or succession
hereunder.
29
Section 7.03. Notification to Securityholders. Upon any termination of or
appointment of a successor to the Servicer pursuant to this Article VII or
Section 6.04, the Indenture Trustee shall give prompt written notice thereof
to the Securityholders, the Credit Enhancer, the Issuer and each Rating
Agency.
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ARTICLE VIII.
Miscellaneous Provisions
Section 8.01. Amendment. This Servicing Agreement may be amended from
time to time by the parties hereto, with the prior written consent of the
Credit Enhancer, provided that any amendment shall be accompanied by a letter
from the Rating Agencies that the amendment will not result in the downgrading
or withdrawal of the rating then assigned to the Securities, if determined
without regard to the Credit Enhancement Instrument.
Section 8.02. GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Notices. All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or
mailed by certified mail, return receipt requested, to (a) in the case of the
Servicer, Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation, 0000 Xxxx Xxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, Vice President and
Assistant General Counsel and Xxxxxxx X. Xxxxxx, Senior Vice President and
Treasurer, (b) in the case of the Credit Enhancer, MBIA Insurance Corporation,
000 Xxxx Xxxxxx, Xxxxx 0, Xxxxxx, Xxx Xxxx, 00000-0000, Attention:
Surveillance Department Re: MSDWCC HELOC Trust 2003-1, Asset-Backed Notes,
Series 2003-1, Confirmation: (000) 000-0000, Telecopy No. (000) 000-0000; (c)
in the case of Moody's, Home Mortgage Loan Monitoring Group, 4th Floor, 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (d) in the case of Standard & Poor's,
00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Surveillance Group, (e) in the case of the Owner Trustee, Wilmington Trust
Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, and (f) in the case of the Issuer, to MSDWCC HELOC Trust 2003-1,
c/o Owner Trustee, Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, (g) in the case of the
Indenture Trustee, to : Xxxxx Fargo Bank Minnesota, N.A., 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx, 00000, Attention: XXXXXX 0000-0, with a copy to the
Indenture Trustee's Corporate Trust Office and (h) in the case of the
Underwriter, Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: General Counsel; or, as to each party, at such other
address as shall be designated by such party in a written notice to each other
party. Any notice required or permitted to be mailed to a Securityholder shall
be given by first class mail, postage prepaid, at the address of such
Securityholder as shown in the Register. Any notice so mailed within the time
prescribed in this Servicing Agreement shall be conclusively presumed to have
been duly given, whether or not the Securityholder receives such notice. Any
notice or other document required to be delivered or mailed by the Indenture
Trustee to any Rating Agency shall be given on a reasonable efforts basis and
only as a matter of courtesy and accommodation and the Indenture Trustee shall
have no liability for failure to delivery such notice or document to any
Rating Agency.
Section 8.03. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Servicing Agreement shall
be for any reason whatsoever
31
held invalid, then such covenants, agreements, provisions or terms shall be
deemed severable from the remaining covenants, agreements, provisions or terms
of this Servicing Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Servicing Agreement or of the
Securities or the rights of the Securityholders thereof.
Section 8.04. Third-Party Beneficiaries. This Servicing Agreement will
inure to the benefit of and be binding upon the parties hereto, the
Securityholders, the Credit Enhancer, the Owner Trustee and their respective
successors and permitted assigns. Except as otherwise provided in this
Servicing Agreement, no other Person will have any right or obligation
hereunder.
Section 8.05. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 8.06. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 8.07. Termination Upon Purchase by the Servicer or Liquidation of
All Home Equity Loans.
(a) The respective obligations and responsibilities of the Servicer, the
Issuer and the Indenture Trustee created hereby shall terminate upon the last
action required to be taken by the Issuer pursuant to the Trust Agreement and
by the Indenture Trustee pursuant to the Indenture following the earlier of:
(i) the date on or before which the Indenture or Trust Agreement is
terminated, or
(ii) the purchase by the Servicer from the Issuer of all Home Equity
Loans and all property acquired in respect of any Home Equity Loan at a price
equal to 100% of the unpaid Loan Balance of each Home Equity Loan, plus
accrued and unpaid interest thereon at the Weighted Average Net Loan Rate up
to the day preceding the Payment Date on which such amounts are to be
distributed to Securityholders, plus any amounts due and owing to the Credit
Enhancer under the Insurance Agreement (any unpaid Servicing Fee shall be
deemed paid at such time).
The right of the Servicer to purchase the assets of the Issuer pursuant to
clause (ii) above is conditioned upon the Pool Balance as of such date being
less than ten percent of the aggregate of the Cut-off Date Loan Balances of
the Home Equity Loans. If such right is exercised by the Servicer, the
Servicer shall deposit the amount calculated pursuant to clause (ii) above
with the Indenture Trustee pursuant to Section 4.10 of the Indenture and, upon
the receipt of such deposit, the Indenture Trustee or Custodian shall release
to the Servicer, the files pertaining to the Home Equity Loans being
purchased.
(b) The Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee for execution, at the time the Home Equity Loans are to be
released to the Servicer, appropriate
32
documents assigning each such Home Equity Loan from the Indenture Trustee or
the Issuer to the Servicer or the appropriate party.
Section 8.08. Certain Matters Affecting the Indenture Trustee. For all
purposes of this Servicing Agreement, in the performance of any of its duties
or in the exercise of any of its powers hereunder, the Indenture Trustee shall
be subject to and entitled to the benefits of Article VI of the Indenture.
Section 8.09. Owner Trustee Not Liable for Related Documents. The
recitals contained herein shall be taken as the statements of the Depositor,
and the Owner Trustee assumes no responsibility for the correctness thereof.
The Owner Trustee makes no representations as to the validity or sufficiency
of this Servicing Agreement, of any Basic Document or of the Certificates
(other than the signatures of the Owner Trustee on the Certificates) or the
Notes, or of any Related Documents. The Owner Trustee shall at no time have
any responsibility or liability with respect to the sufficiency of the Owner
Trust Estate or its ability to generate the payments to be distributed to
Certificateholders under the Trust Agreement or the Noteholders under the
Indenture, including, the compliance by the Issuer, the Depositor or the
Seller with any warranty or representation made under any Basic Document or in
any related document or the accuracy of any such warranty or representation,
or any action of the Certificate Paying Agent, the Certificate Registrar or
the Indenture Trustee taken in the name of the Owner Trustee.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Home Equity Loans or under this Servicing Agreement or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
For all purposes of this Servicing Agreement, in the performance of any duties
or obligations of the Issuer hereunder, the Owner Trustee shall be subject to,
and entitled to the benefits of, the terms and provisions of Article VI, VII
and VIII of the Trust Agreement.
33
IN WITNESS WHEREOF, the Servicer, the Indenture Trustee and the Issuer
have caused this Servicing Agreement to be duly executed by their respective
officers or representatives all as of the day and year first above written.
XXXXXX XXXXXXX XXXX XXXXXX CREDIT
CORPORATION,
as Servicer
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------
Title: Vice President
MSDWCC HELOC TRUST 2003-1
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By: /s/ Xxxxx X. Xxxxx
----------------------------
Title: Authorized Signer
XXXXX FARGO BANK MINNESOTA, N.A.,
as Indenture Trustee
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Title: Vice President
34
EXHIBIT A
HOME EQUITY LOAN SCHEDULE
TO BE PROVIDED UPON REQUEST
A-1
EXHIBIT B
LIMITED POWER OF ATTORNEY
Xxxxx Fargo Bank Minnesota, N.A., (the "Principal"), in its capacity as
indenture trustee under that certain Servicing Agreement relating to MSDWCC
HELOC Trust 2003-1, HELOC Asset Backed Notes, Series 2003-1, dated as of May
1, 2003 (the "Agreement") by and among MSDWCC HELOC Trust 2003-1(Issuer),
Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation (Servicer) and Xxxxx Fargo Bank
Minnesota, N.A. (Indenture Trustee).
hereby constitutes and appoints:
Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation
its true and lawful attorney-in-fact (the "Attorney-in-Fact"), acting by and
through its officers and employees, with full authority and power to execute
and deliver on behalf of Principal any and all of the following instruments to
the extent consistent with the terms and conditions of the Agreement:
(i) All documents with respect to any of the mortgages or deeds of
trust securing the Home Equity Loans (as defined in the Agreement)
serviced for Principal by said attorney-in-fact which are
customarily and reasonably necessary and appropriate to the
satisfaction, cancellation, or partial or full release of mortgages,
deeds of trust or deeds to secure debt upon payment and discharge of
all sums secured thereby;
(ii) Instruments appointing one or more substitute trustees to act
in place of the trustees named in Deeds of Trust;
(iii) Affidavits of debt, notice of default, declaration of default,
notices of foreclosure, and all such contracts, agreements, deeds,
assignments and instruments as are appropriate to effect any sale,
transfer or disposition of real property acquired through
foreclosure or otherwise;
(iv) All other comparable instruments.
B-1
This Limited Power of Attorney is effective as of the date below and shall
remain in full force and effect until revoked in writing by the undersigned or
termination of the Agreement, whichever is earlier.
Dated: XXXXXXXXXX Xxxxx Fargo Bank Minnesota, N.A.
As Indenture Trustee under the Agreement
By:
-----------------------------------
By:
Its:
Attest:
----------------------
By:
--------------------
Its: Asst. Secretary
Unofficial Witnesses:
----------------------
----------------------
B-2
STATE OF
COUNTY OF ss:
On the ____ day of __________, 2003 before me, a Notary Public in and for
said State, personally appeared ___________________, known to me to be
___________________ of Xxxxx Fargo Bank Minnesota, N.A., and also known to me
to be the person who executed this Power of Attorney on behalf of said bank,
and acknowledged to me that such bank executed this Power of Attorney.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal the day and year written above.
-------------------------
Notary Public
My commission expires
------------
B-3
STATE OF )
SS.
COUNTY OF )
On this __th day of May, 2003, before me the undersigned, Notary Public
of said State, personally appeared _______________________________ personally
known to me to be duly authorized officers of Xxxxx Fargo Bank Minnesota, N.A.
that executed the within instrument and personally known to me to be the
persons who executed the within instrument on behalf of Xxxxx Fargo Bank
Minnesota, N.A. therein named, and acknowledged to me such Xxxxx Fargo Bank
Minnesota, N.A. executed the within instrument pursuant to its by-laws.
WITNESS my hand and official seal.
Notary Public in and for the
State of
After recording, please mail to:
Attn:
B-4
EXHIBIT C
FORM OF REQUEST FOR RELEASE
To: Xxxxx Fargo Bank Minnesota, N.A.
0000 00xx Xxxxxx X.X.
Xxxxxxxxxxx, XX 00000-0000
Attn: Inventory Control
Re: Custodial Agreement dated as of ____, among __________________ and
Xxxxx Fargo Bank Minnesota, N.A., as Custodian
In connection with the administration of the Home Equity Loans held by
you as Custodian for the Owner pursuant to the above-captioned Custodial
Agreement, we request the release, and hereby acknowledge receipt, of the
Custodian's Mortgage File for the Home Equity Loan described below, for the
reason indicated.
Home Equity Loan Number
-----------------------
Mortgagor Name, Address & Zip Code
----------------------------------
Reason for Requesting Documents (check one):
-------------------------------
_______ 1. Mortgage Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation (Repurchases, etc.)
_______ 5. Nonliquidation Reason:_______________________
Address to which Custodian should
Deliver the Custodian's Mortgage File:
--------------------------------------
--------------------------------------
--------------------------------------
By:
---------------------------------
(authorized signer)
Issuer:
-----------------------------
Address:
----------------------------
----------------------------
Date:
-------------------------------
Custodian
---------
Xxxxx Fargo Bank Minnesota, N.A.
Please acknowledge the execution of the above request your signature and date
below:
-------------------------------------- ---------------------
Signature Date
Documents returned to Custodian:
--------------------------------------
Custodian Date
C-1
