RECONSTITUTED SERVICING AGREEMENT
EXECUTION
RECONSTITUTED
SERVICING AGREEMENT
THIS
RECONSTITUTED SERVICING AGREEMENT (the “Agreement” or the “Reconstituted
Servicing Agreement”), entered into as of March 1, 2007, by and between XXXXXX
BROTHERS HOLDINGS INC., a Delaware corporation (the “Seller” or “Xxxxxx Brothers
Holdings”) and WASHINGTON MUTUAL BANK (formerly known as Washington Mutual Bank,
FA) (the “Servicer”), a federally chartered savings bank, and
acknowledged by
AURORA
LOAN SERVICES LLC, a Delaware limited liability company (“Aurora”), and U.S.
BANK NATIONAL ASSOCIATION, a national banking association, solely in its
capacity as Trustee under the Trust Agreement identified below (in such
capacity, the “Trustee”), recites and provides as follows recites and provides
as follows:
RECITALS
WHEREAS,
Xxxxxx Brothers Bank, FSB (the “Bank”) has acquired certain conventional,
residential, adjustable rate, first lien mortgage loans (the “Mortgage Loans”)
pursuant to a Mortgage Loan Purchase and Sale Agreement among the Servicer,
Washington Mutual Bank, FA, Washington Mutual Bank fsb, Washington Mutual Bank
and the Bank, dated as of September 1, 2003, amended as of March 1, 2006 by
the
Regulation AB Amendment to the Mortgage Loan Purchase and Sale Agreement (as
amended, the “Purchase Agreement”) and annexed as Exhibit B hereto.
WHEREAS,
the Seller has conveyed certain Mortgage Loans identified on Exhibit C hereto
(the “Serviced Mortgage Loans”) to Structured Asset Securities Corporation, a
Delaware special purpose corporation (“SASCO”), which in turn has conveyed the
Serviced Mortgage Loans to U.S. Bank National Association (the “Trustee”),
pursuant to a trust agreement, dated as of March 1, 2007 (the “Trust
Agreement”), among the Trustee, Aurora, as master servicer (“Aurora,” and,
together with any successor master servicer appointed pursuant to the provisions
of the Trust Agreement, the “Master Servicer”) and SASCO.
WHEREAS,
the Serviced Mortgage Loans are currently being serviced by the Servicer
pursuant to a Servicing Agreement between the Bank and the Servicer, dated
as of
September 1, 2003, amended as of July 1, 2004 and as of March 1, 2006 by the
Regulation AB Amendment to the Servicing Agreement (the “Regulation AB
Amendment” and, collectively, the “Servicing Agreement”) and annexed as Exhibit
D hereto.
WHEREAS,
pursuant to an Assignment and Assumption Agreement, dated March 1, 2007 (the
“Assignment and Assumption Agreement”) annexed as Exhibit E hereto, the Seller
acquired from the Bank all of the Bank’s right, title and interest in and to the
mortgage loans currently serviced under the Servicing Agreement and assumed
for
the benefit of each of the Servicer and the Bank the rights and obligations
of
the Bank as owner of such mortgage loans pursuant to the Servicing
Agreement.
WHEREAS,
the Seller desires that the Servicer continue to service the Serviced Mortgage
Loans, and the Servicer has agreed to do so, subject to the rights of the Seller
and the Master Servicer to terminate the rights and obligations of the Servicer
hereunder as set forth herein and to the other conditions set forth
herein.
WHEREAS,
the Seller and the Servicer agree that the provisions of the Servicing Agreement
shall continue to apply to the Serviced Mortgage Loans, but only to the extent
provided herein and that this Agreement shall govern the servicing of the
Serviced Mortgage Loans for so long as such Serviced Mortgage Loans remain
subject to the provisions of the Trust Agreement.
WHEREAS,
the Master Servicer and any successor master servicer shall be obligated, among
other things, to supervise the servicing of the Serviced Mortgage Loans on
behalf of the Trust Fund (or the Trustee on behalf of the Trust Fund), and
shall
have the right under the conditions specified herein to terminate for cause
the
rights and obligations of the Servicer under this Agreement.
WHEREAS,
the Seller and the Servicer intend that each of the Master Servicer and the
Trustee is an intended third party beneficiary of this Agreement as described
in
Section 28 of Exhibit A hereunder.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth
and
for other good and valuable consideration, the receipt and adequacy of which
are
hereby acknowledged, the Seller and the Servicer hereby agree as
follows:
AGREEMENT
1. Definitions.
Capitalized terms used and not defined in this Agreement, including Exhibit
A
hereto and any provisions of the Servicing Agreement incorporated by reference
herein, shall have the meanings ascribed to such terms in the Servicing
Agreement or Purchase Agreement, as the case may be.
Notwithstanding
the foregoing, the term “Agreement” when used in the Servicing Agreement or the
Purchase Agreement shall have the meaning given to such term in the Servicing
Agreement or the Purchase Agreement, as the case may be.
2. Custodianship.
The
parties hereto acknowledge that U.S. Bank National Association will act as
custodian of the Collateral Files of the Serviced Mortgage Loans for the Trustee
on behalf of the Trust Fund and will maintain custody of the Collateral Files
at
the following address:
U.S.
Bank
National Association
0000
Xxxxxx Xxxxxx, Xxxxx 000
Xx.
Xxxx,
Xxxxxxxxx 00000
Attention:
Document
Collateral Services
Telephone:
(000)
000-0000
Telecopier:
(000)
000-0000
3. Servicing.
The
Servicer agrees, with respect to the Serviced Mortgage
Loans,
to perform and observe the duties, responsibilities and obligations that are
to
be performed and observed under the provisions of the applicable Servicing
Agreement, except as otherwise provided herein and on Exhibit A hereto, and
that
the provisions of the Servicing Agreement, as so modified and incorporated
by
reference herein, are and shall be a part of this Agreement to the same extent
as if set forth herein in full. Pursuant
to Section 2.17 of the Servicing Agreement, the Servicer acknowledges that
a
REMIC election has been or will be made with respect to the Trust, and the
Servicer shall comply with the provisions of Section 2.17 of the Servicing
Agreement with respect to the REMIC provisions
4. Trust
Cut-off Date.
The
parties hereto acknowledge that by operation of Section 2.5 and Section 3.1
of
the Servicing Agreement, the remittance on April 18, 2007 to the LMT 2007-3
Trust Fund (the “Trust Fund”) is to include principal due after March 1, 2007
(the “Trust Cut-off Date”) plus interest, at the Net Rate collected during the
advancing period exclusive of any portion thereof allocable to a period prior
to
the Trust Cut-off Date, with the adjustments specified in Section 3.1 of the
relevant Servicing Agreement.
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5. Master
Servicing; Termination of Servicer.
The
Servicer, including any successor servicer hereunder, shall be subject to the
supervision of the Master Servicer, which Master Servicer shall be obligated
to
ensure that the Servicer services the Serviced Mortgage Loans in accordance
with
the provisions of this Agreement. The Master Servicer, acting on behalf of
the
Trustee and the Trust Fund created pursuant to the Trust Agreement, shall have
the same rights as the Seller, as owner, under the Servicing Agreement to
enforce the obligations of the Servicer under the Servicing Agreement and the
term “Owner” as used in the Servicing Agreement in connection with any rights of
the Owner shall refer to the Trust Fund or, as the context requires, the Master
Servicer acting in its capacity as agent for the Trust Fund, except with respect
to the Servicer’s indemnification of the Trustee and the Trust Fund, or as
otherwise specified in Exhibit A hereto. The Master Servicer shall be entitled
to terminate the rights and obligations of the Servicer under this Agreement
and
the provisions of the Servicing Agreement to the extent unmodified or unamended
herein upon the failure of the Servicer to perform any of its obligations under
this Agreement, which failure results in an Event of Default as provided in
Article 6 of the Servicing Agreement (such Article 6 and Article 7 of the
Servicing Agreement remaining unmodified except for the right to terminate
with
respect to the Serviced Mortgage Loans being vested in the Master Servicer
pursuant to this Agreement and as expressly described in Exhibit A hereto).
Notwithstanding anything herein to the contrary, in no event shall the Master
Servicer assume any of the obligations of the Owner under the Servicing
Agreement and the parties and other signatories hereto agree that the Master
Servicer shall be entitled to all of the rights, protections and limitations
of
liability afforded to the Master Servicer under the Trust
Agreement.
6. No
Representations.
Neither
the Servicer nor the Master Servicer shall be obligated or required to make
any
representations or warranties regarding the characteristics of the Serviced
Mortgage Loans in connection with the transactions contemplated by the Trust
Agreement and issuance of the certificates (the “Certificates”) issued pursuant
thereto. Notwithstanding the preceding sentence, the Servicer hereby restates
and remakes to the Seller, the Bank, the Master Servicer, the Trustee and the
Trust Fund each representation and warranty in Section 5.7 of the Servicing
Agreement as of March 1, 2007.
7. Waiver
and Amendment.
The
parties hereto agree that by execution of this Agreement, the Servicer has
waived or agreed to modification or amendment of, with respect to the Serviced
Mortgage Loans, certain of the Servicer’s rights that it has pursuant to the
provisions of the Servicing Agreement (the “Waiver”). The Waiver shall extend
only to the Serviced Mortgage Loans serviced under this Agreement, and shall
not
constitute a waiver or modification of any of the Servicer’s rights under any
other provision of the Servicing Agreement with respect to Mortgage Loans
purchased pursuant to the Purchase Agreement other than the Serviced Mortgage
Loans, waive any default by the Bank or impair any right of the Servicer arising
under this Agreement or the Servicing Agreement, in each case except to the
extent expressly so waived in this Section 7. Except as otherwise provided
in
this Agreement with respect to the Serviced Mortgage Loans, the Servicing
Agreement shall remain in full force and effect.
Notwithstanding
the foregoing and with respect to the Serviced Mortgage Loans, the Servicer
shall continue to be entitled to (i) collect its servicing compensation
(including, without limitation, its Servicing Fee), (ii) receive reimbursement
for advances (including, without limitation, Monthly Advances and Servicing
Advances), and (iii) timely receive all or any portion of the related Collateral
Files in connection with its performance of servicing activities (including,
without limitation, in connection with the processing of any satisfaction or
release of any Serviced Mortgage Loans), in accordance with the terms and
conditions of the Servicing Agreement. The Servicer shall be entitled to enforce
the rights set forth in the preceding sentence against the Trust Fund as the
owner of the Serviced Mortgage Loans.
8. Notices.
All
notices and communications between or among the parties hereto (including any
third party beneficiary thereof) or required to be provided to the Trustee
on
behalf of the Trust Fund shall be in writing and shall be deemed received or
given when mailed first-class mail, postage prepaid, addressed to each other
party at its address specified below or, if sent by facsimile or electronic
mail, when facsimile or electronic confirmation of receipt by the recipient
is
received by the sender of such notice. Each party may designate to the other
parties in writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
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All
notices required to be delivered to the Master Servicer under this Agreement
shall be delivered to the Master Servicer at the following address:
Aurora
Loan Services LLC
00000
Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
Mail
Stop
Code - 3195
Attn: Xxxxxx
X.
Xxxxxx- Master Servicing
LMT
2007-3
Tel: 000-000-0000
All
remittances required to be made to the Master Servicer under this Agreement
shall be made on a scheduled/scheduled basis to the following wire
account:
The
Bank
of New York
ABA#:
000-000-000
Account
Name: Aurora
Loan Services LLC,
Master
Servicing Payment Clearing Account
Account
Number: 8900620730
Beneficiary:
Aurora Loan Services LLC
For
further credit to: LMT 2007-3
All
notices required to be delivered to the Trustee on behalf of the Trust Fund
hereunder shall be delivered to the Trustee at the following
address:
U.S.
Bank
National Association
Xxx
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Structured
Finance - LMT 2007-3
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
All
notices required to be delivered to the Seller hereunder shall be delivered
to
the Seller at the following address:
Xxxxxx
Brothers Holdings Inc.
000
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxxx
Telephone:
(000) 000-0000
E-mail:
xxxxxxx@xxxxxx.xxx
All
notices required to be delivered to the Servicer hereunder shall be delivered
to
the following address:
4
Washington
Mutual Bank
0000
Xxxxxx Xxxxxx, XXX 1401
Xxxxxxx,
XX 00000
Attention:
General Counsel
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Washington
Mutual Bank
0000
X.
000xx
Xxxxxx
Xxxxxxxxx,
XX 00000
Attention:
Investor Reporting
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
9. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF NEW YORK, NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES
TO
THE CONTRARY.
10. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original, but all of which counterparts shall
together constitute but one and the same instrument.
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Executed
as of the day and year first above written.
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XXXXXX
BROTHERS HOLDINGS INC.,
as Seller
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| By: | /s/ Xxxxx Xxxxxxx | |
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Name:
Xxxxx Xxxxxxx
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Title:
Authorized Signatory
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WASHINGTON
MUTUAL BANK,
as Servicer
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| By: | /s/ Xxxxxx Xxxx | |
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Name:
Xxxxxx Xxxx
Title:
Vice President
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Acknowledged
By:
| AURORA
LOAN SERVICES LLC,
as
Master Servicer
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By:
/s/
Xxxxx Xxxxxxx
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Name: Xxxxx
Xxxxxxx
Title: Senior
Vice President
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| U.S.
BANK NATIONAL ASSOCIATION,
as
Trustee and not in its individual capacity
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By:
/s/
Xxxxx
Xxxxxx
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Name: Xxxxx
Xxxxxx
Title: Vice
President
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EXHIBIT
A
Modifications
to the Servicing Agreement
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1.
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A
new definition of “Best Efforts” is hereby added to Article 1 to
immediately follow the definition of “Applicable Requirements,” to read as
follows:
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Best
Efforts:
Efforts
determined to be reasonably diligent by the Servicer in its reasonable
discretion. Such efforts do not require the Servicer to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Servicer to advance or expend fees or sums of money in addition
to
those specifically set forth in this Agreement.
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2.
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The
definition of “Determination Date” in Article 1 is hereby amended and
restated in its entirety, to read as
follows:
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Determination
Date:
The
fifteenth (15th)
day of
the calendar month of the related Monthly Remittance Date (or if such day is
not
a Business Day, the Business Day immediately preceding such day).
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A
new definition of “Fitch” is hereby added to Article 1 to immediately
follow the definition of “Final recovery determination”, to read as
follows:
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Fitch:
Fitch,
Inc. or any successor in interest.
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4.
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A
new definition of “Mortgage Loan” is hereby added to Article 1 to
immediately follow the definition of “Mortgage Interest Rate,” to read as
follows:
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Mortgage
Loan:
An
individual servicing retained Mortgage Loan which has been purchased from
Washington Mutual Bank FA, Washington Mutual Bank fsb or Washington Mutual
Bank
by Xxxxxx Brothers Bank, FSB is subject to this Agreement by being identified
on
the Mortgage Loan Schedule to this Agreement, which mortgage loan includes
without limitation the rights to the mortgage loan documents, the monthly
reports, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.
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5.
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A
new definition of “Mortgage Loan Schedule” is hereby added to Article 1 to
immediately follow the definition of “Mortgage Loan,” to read as
follows:
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Mortgage
Loan Schedule:
The
schedule of Mortgage Loans setting forth certain information with respect to
the
Mortgage Loans purchased from the Washington Mutual Bank, FA, Washington Mutual
Bank fsb or Washington Mutual Bank by Xxxxxx Brothers Bank, FSB, which Mortgage
Loan Schedule is attached as Exhibit C to this Reconstituted Servicing
Agreement.
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6.
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The
definition of “Qualified Depository” is hereby amended and restated in its
entirety to read as follows:
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Qualified
Depository:
Any of
(i) a depository the accounts of which are insured by the FDIC and the debt
obligations of which are rated AA (or its equivalent) or better by each Rating
Agency; (ii) the corporate trust department of any bank the debt obligations
of
which are rated at least A-1 or its equivalent by each Rating Agency; or (iii)
the Servicer, so long as the long-term unsecured debt obligations of the
Servicer are acceptable to either Rating Agency.
A-1
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7.
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A
new definition of “Rating Agency” is hereby added to Article 1 to
immediately follow the definition of “Qualified Depository,” to read as
follows:
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Rating
Agency:
Each of
Fitch and S&P, or any successor of the foregoing.
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8.
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Section
2.1 (Identification of Mortgage Loans; Servicer to Act as Servicer)
is
hereby amended by adding the following to the end of Subsection
(c):
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Promptly
after the execution of any assumption, modification, consolidation or extension
of any Mortgage Loan, the Servicer shall forward to the Master Servicer copies
of any documents evidencing such assumption, modification, consolidation or
extension.
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9.
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Section
2.3 (Collection of Mortgage Loan Payments) is hereby amended by replacing
the words “Continuously from the related Closing Date until the principal
and interest on all of the Mortgage Loans are paid in full,” with
“Continuously from March 1, 2007 until the date the Mortgage Loans
cease
to be subject to this Agreement.”
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10.
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Section
2.4 (Establishment of Account; Deposits in Account) is hereby amended
by:
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(i)
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replacing
the words “for Xxxxxx Brothers Bank, FSB, as Owner, and any successor
Owner” with the words “for LMT 2007-3 Trust Fund and various Mortgagors.”;
and
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(ii)
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adding
the following after the last sentence of subsection
(a):
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"Further,
a copy of such certification or letter agreement shall be furnished
to the
Master Servicer within thirty (30) days of each Closing
Date."
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11.
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Section
2.5 (Permitted Withdrawals from the Account) is hereby amended by
deleting
the word “and” at the end of clause (vii), by replacing the period at the
end of clause (viii) with “; and” and by adding the following new clause
(ix):
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(ix)
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to
invest funds in the Account in Permitted Investments in accordance
with
Section 2.4(d).
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12.
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Section
2.6 (Establishment of Escrow Account; Deposits in Escrow Account;
Escrow
Analysis) is hereby amended by:
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(i)
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replacing
the words “for Xxxxxx Brothers Bank, FSB, as Owner and any successor
Owner, and certain Mortgagors” with “for LMT 2007-3 Trust Fund and various
Mortgagors.”; and
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(ii)
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adding
the following after the last sentence of subsection
(a):
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A-2
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"Further,
a copy of such certification or letter agreement shall be furnished
to the
Master Servicer within thirty (30) days of each Closing
Date."
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13.
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Section
2.12 (Title, Management and Disposition of Real Estate Owned) is
hereby
amended by replacing all references to “Owner” with “Trustee” in paragraph
(a).
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14.
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Section
3.1 (Distributions) is hereby amended as
follows:
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(i)
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replacing
the word “preceding” in the second line of 3.1(a) with the word “related;”
and
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(ii)
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by
adding the following after Section
3.1(c):
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(d)
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All
remittances required to be made to the Master Servicer shall be made
to
the following wire account or to such other account as may be specified
by
the Master Servicer from time to
time:
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The
Bank
of New York
ABA#:
000-000-000
Account
Name: Aurora
Loan Services LLC,
Master
Servicing Payment Clearing Account
Account
Number: 8900620730
Beneficiary:
Aurora Loan Services LLC
For
further credit to: LMT 2007-3
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15.
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Section
4.4 (Statements as to Compliance) is hereby deleted in its
entirety.
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16.
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Section
4.5 (Annual Independent Public Accountants’ Servicing Report) is hereby
deleted in its entirety.
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17.
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Section
5.1 (Indemnification; Third Party Claims) is hereby amended by deleting
Subsection (a) and replacing it with the
following:
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(a) The
Servicer agrees
to
indemnify the
Trust
Fund and
the
Trustee
and hold
each of them harmless against any and all third
party claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of such parties may sustain in any way related to the failure of the
Servicer to
service the Mortgage Loans in compliance with the terms of this
Agreement;
provided, a written request for indemnity by the Master Servicer submitted
directly by the Master Servicer to the Servicer shall be deemed by the Servicer
to be a claim for indemnity by the Trustee or the Trust Fund pursuant to this
Section 5.1(a), together with the Trust Fund’s direction to remit any amounts
due hereunder to the Master Servicer, if the Master Servicer provides the
Servicer with (i) reasonable evidence (x) confirming that such claim arises
out
of the Servicer’s failure to service the Mortgage Loans in compliance with this
Agreement and (y) identifying the losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses incurred by the Master Servicer, and
(ii)
the agreement pursuant to which the Trust Fund has agreed to indemnify the
Master Servicer and specifying the applicable provisions of such agreement;
and
further
provided, however, the Servicer shall not be liable hereunder with respect
to
(i) any action or inaction in accordance with the written direction or consent
of the Trustee, Trust Fund, Master Servicer or Xxxxxx Brothers Holdings Inc.
or
(ii) any action or inaction resulting from the Trustee’s, Trust Fund’s, Master
Servicer’s or Xxxxxx Brothers Holdings Inc.’s failure to cause any Collateral
File (or portion thereof) to be released to the Servicer pursuant to Sections
2.18 or 4.2(c) or other terms
of
this Agreement or (iii) any action or inaction resulting from the Trust Fund’s
failure to comply with Section 5.1(b)
or
Section 5.6.
The
Servicer shall promptly notify
the
Trustee if a claim is made by a third party with respect to this Agreement
or
the Mortgage Loans,
that the
Servicer determines in its good faith judgment will materially affect the Trust
Fund’s interest in such Mortgage Loans. The Servicer shall
assume
(with the prior written consent of the indemnified party, which consent shall
not be unreasonably withheld or delayed) the defense of any such claim and
pay
all reasonable expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or any of such indemnified parties in respect of such claim. The
Servicer shall follow any written instructions received from the Trustee in
connection with such claim. The Servicer shall provide the Trustee with a
written report of all expenses and advances incurred by the Servicer pursuant
to
this Section 5.1, and the Trustee, from the assets of the Trust Fund, shall
promptly reimburse the Servicer for all amounts advanced by the Servicer
pursuant to this Section 5.1(a) except
when the claim is in any way related
to the
failure of the Servicer to service and administer the Mortgage Loans in
compliance with the terms of this Agreement or the gross negligence, bad faith
or willful misconduct of the Servicer.
A-3
The
Trust
Fund shall indemnify the Servicer and hold it harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Servicer may sustain in any way related to the failure of the Trust
Fund to perform its duties in compliance with the terms of this
Agreement.
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18.
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Section
6.1 (Events of Default) is hereby amended by changing all references
to
“Owner” with “Master Servicer” in such Section and deleting Subsection
(vi) and replacing it with the
following:
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(vi) the
Servicer at any time is neither a Xxxxxx Xxx or Xxxxxxx Mac approved servicer,
and the Master Servicer has not terminated the rights and obligations of the
Servicer under this Agreement and replaced the Servicer with a Xxxxxx Mae or
Xxxxxxx Mac approved servicer within 30 days of the absence of such approval;
or
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19.
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The
parties hereto acknowledge that the word “Owner” in Section 6.2 (Waiver of
Defaults) shall refer to the “Master Servicer with the prior consent of
the Trustee.”
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20.
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Section
8.3 (Intent of the Parties) is hereby amended as
follows:
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(i)
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by
replacing the words “the Owner and any Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each
instance;
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(ii)
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by
replacing the words “Neither the Owner nor any Depositor” with “None of
the Trust Fund, the Depositor, the Trustee, or the Master
Servicer”;
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A-4
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(iii)
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by
replacing the words “the Owner or any Depositor” with “the Trust Fund, the
Depositor, the Trustee or the Master Servicer” in each instance;
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(iv)
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by
replacing the words “the Owner to deliver to the Owner (including any of
its assignees or designees) and any Depositor” with “the Trust Fund, the
Depositor, the Trustee or the Master Servicer to deliver to such
party
(including any of its assignees or designees)”;
and
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(v)
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by
replacing the words “the Owner or such Depositor” with “the Trust Fund,
the Depositor, the Trustee or the Master Servicer.”
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21.
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Section
8.4 (Additional Representations and Warranties of the Servicer),
as such
section is amended by the Regulation AB Amendment, is hereby further
amended as follows:
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(i)
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by
replacing the words “the Owner and to any Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each
instance;
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(ii)
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by
replacing the words “the Owner or any Depositor” with “the Trust Fund, the
Depositor, the Trustee or the Master Servicer” in each instance;
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(iii)
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by
replacing the words “the Owner or such Depositor” with “the Trust Fund,
the Depositor, the Trustee or the Master Servicer” in each instance;
and
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(iv)
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by
replacing Section 8.4(a)(vii) in its entirety with the
following:
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(vii)
there are no affiliations, relationships or transactions relating to a Seller,
the Servicer or any Subservicer with respect to any Securitization Transaction
and any party thereto listed on Exhibit J hereto of a type described in Item
1119 of Regulation AB (other than the affiliation between the Servicer and
Washington Mutual Bank fsb and Washington Mutual Mortgage Securities
Corp.).
|
22.
|
Section
8.5 (Information to be Provided by the Servicer), as such section
is
amended by the Regulation AB Amendment, is hereby further amended
as
follows:
|
|
(i)
|
by
replacing the words “the Owner or any Depositor” with “the Trust Fund, the
Depositor, the Trustee or the Master Servicer” in each instance;
|
|
(ii)
|
by
replacing the words “the Owner and such Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each instance;
|
|
(iii)
|
by
replacing the words “the Owner and such Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each
instance;
|
|
(iv)
|
by
replacing the words “the Owner and any Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each instance;
|
|
(v)
|
by
replacing the words “the Owner or such Depositor” with “the Trust Fund,
the Depositor, the Trustee or the Master Servicer” in each instance;
and
|
|
(vi)
|
by
amending Section 8.5 (a)(iii) to read in its entirety as
follows:
|
A-5
|
(iii)
as promptly as practicable following notice to the Servicer, a description
of any affiliation or relationship between a Seller or the Servicer
or
each Subservicer, as applicable, and any of the parties listed on
Exhibit
J hereto.
|
|
23.
|
Section
8.6 (Servicer Compliance Statement), is hereby amended as
follows:
|
|
(i)
|
by
replacing the words “the Owner and any Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each instance;
|
|
(ii)
|
by
replacing the words “the Owner and such Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each instance;
and
|
|
(iii)
|
by
replacing “2007” with “2008.”
|
|
24.
|
Section
8.7 (Report on Assessment of Compliance and Attestation), is hereby
amended as follows:
|
|
(i)
|
the
first sentence of subsection (a)(1) is hereby amended as follows:
|
deliver
to the Master Servicer, the Owner and any Depositor a report (in form and
substance reasonably satisfactory to the Master Servicer, the Owner and such
Depositor) regarding the Servicer’s assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year as required under Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.
|
(ii)
|
by
replacing the words “the Owner and such Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each instance;
|
|
(iii)
|
by
replacing the words “the Owner or any Depositor” with “the Trust Fund, the
Depositor, the Trustee and the Master Servicer” in each
instance;
|
|
(iv)
|
by
replacing the words “Neither the Owner nor any Depositor” with “None of
the Trust Fund, the Depositor, the Trustee or the Master Servicer” in each
instance;
|
|
(v)
|
by
replacing the words “the Owner or such Depositor” with “the Trust Fund,
the Depositor, the Trustee or the Master Servicer” in each
instance
|
|
(vi)
|
by
replacing the words “the Owner and any Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each
instance;
|
|
(vii)
|
by
replacing the words “the Owner, such Depositor and any other Person” with
“the Trust Fund, the Depositor, the Trustee, the Master Servicer and
any
other Person” in each instance; and
|
|
(viii)
|
by
replacing “2007” with “2008.”
|
25. Section
8.8 (Use of Subservicers and Subcontractors), is hereby amended as
follows:
|
(i)
|
by
replacing the words “the Owner or any Depositor” with “the Trust Fund, the
Depositor, the Trustee or the Master Servicer” in each
instance;
|
A-6
|
(ii)
|
by
replacing the words “the Owner and any Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each instance;
|
|
(iii)
|
by
replacing the words “(or any designee of the Depositor, such as a master
servicer or administrator)” with “(or any designee of such party)” in each
instance; and
|
|
(iv)
|
by
replacing the words “the Owner and such Depositor” with “the Trust Fund,
the Depositor, the Trustee and the Master Servicer” in each
instance.
|
26. Section
8.9 (Indemnification; Remedies), is hereby amended as follows:
|
(i)
|
by
replacing the words “Owner or Depositor” with “the Trust Fund, the
Depositor, the Trustee and the Master Servicer” in each
instance;
|
|
(ii)
|
by
replacing the words “Neither the Owner nor any Depositor” with “None of
the Trust Fund, the Depositor, the Trustee or the Master Servicer” in each
instance;
|
|
(iii)
|
by
replacing the words “Owner, any Depositor” with “the Trust Fund, the
Depositor, the Trustee or the Master Servicer” in each
instance
|
|
(iv)
|
by
replacing the words “Owner (or any designee of the Owner, such as a Master
Servicer) and any Depositor” with “the Trust Fund, the Depositor, the
Trustee and the Master Servicer (or any designee of such party) in
each
instance;
|
|
(v)
|
by
replacing the words “Owner (or such designee) or such Depositor” with “the
Trust Fund, the Depositor, the Trustee and the Master Servicer (or
any
designee of such party)” in each
instance’
|
|
(vi)
|
by
replacing the words “Owner or any Depositor” with “the Trust Fund, the
Depositor, the Trustee or the Master Servicer” in each instance;
and
|
|
(vii)
|
by
replacing the words “Purchaser, any Depositor” with “the Trust Fund, the
Depositor, the Trustee or the Master Servicer” in each
instance.
|
|
27.
|
Section
9.1 (Successor to the Servicer) is hereby amended in its entirety
to read
as follows:
|
(a) Simultaneously
with the termination of the Servicer’s responsibilities and duties under this
Agreement pursuant to Sections 5.4, 6.1, 7.1 or 7.2 the Master Servicer shall,
in accordance with the provisions of the Trust Agreement (i) succeed to and
assume all of the Servicer’s responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor meeting the eligibility
requirements of this Agreement, and which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Servicer under this
Agreement simultaneously with the termination of the Servicer’s
responsibilities, duties and liabilities under this Agreement. Any successor
to
the Servicer that is not at that time a servicer of other mortgage loans for
the
Trust Fund shall be subject to the approval of the Master Servicer, Xxxxxx
Brothers Holdings Inc., the Trustee and each Rating Agency (as such term is
defined in the Trust Agreement). Unless the successor servicer is at that time
a
servicer of other mortgage loans for the Trust Fund, each Rating Agency must
deliver to the Trustee a letter to the effect that such transfer of servicing
will not result in a qualification, withdrawal or downgrade of the then-current
rating of any of the Certificates. In connection with such appointment and
assumption, the Master Servicer or Xxxxxx Brothers Holdings Inc., as applicable,
may make such arrangements for the compensation of such successor out of
payments on the Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Servicer under this Agreement. In the event that the Servicer’s duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities, and be compensated therefor as provided in this
Agreement, during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of its successor. The resignation or removal of the Servicer pursuant
to the aforementioned sections shall not become effective until a successor
shall be appointed pursuant to this Section 9.1 and shall in no event relieve
the Servicer of the representations and warranties made pursuant to Section
5.7
prior to such resignation or termination, which representations and warranties
shall be applicable to the Servicer notwithstanding any such resignation or
termination of the Servicer, or the termination of this Agreement.
A-7
(b) Within
a
reasonable period of time, the Servicer shall promptly prepare, execute and
deliver to the successor entity any and all documents and other instruments,
place in such successor’s possession all Collateral Files and Credit Files, and
do or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such termination. The Servicer shall cooperate with
the
Trustee and the Master Servicer, as applicable, on behalf of the Trust Fund
and
such successor in effecting the termination of the Servicer’s responsibilities
and rights hereunder and the transfer of servicing responsibilities to the
successor, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Servicer to the Account or the Escrow Account or thereafter received with
respect to the Mortgage Loans, in each case to which the Servicer is not
entitled pursuant to this Agreement.
(c) Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Servicer and the Master Servicer, and the Trustee, on behalf of the Trust
Fund, an instrument accepting such appointment, wherein the successor shall
make
an assumption of the due and punctual performance and observance of each
covenant and condition to be performed and observed by the Servicer under this
Agreement, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Servicer or termination of this Agreement
pursuant to Sections 6.1 or 7.1 shall not affect any claims that the Trust
Fund
(or the Master Servicer or the Trustee on behalf of the Trust Fund) may have
against the Servicer arising out of the Servicer’s actions or failure to act
prior to any such termination or resignation.
(d) The
Servicer shall promptly deliver the funds in the Account and Escrow Account,
in
each case to which the Servicer is not entitled pursuant to this Agreement
and
all Collateral Files, Credit Files and related documents and statements held
by
it hereunder and the Servicer shall account for all funds and shall execute
and
deliver such instruments and do such other things as may reasonably be required
to more fully and definitively vest in the successor all such rights, powers,
duties, responsibilities, obligations and liabilities of the
Servicer.
A-8
(e) Upon
a
successor’s acceptance of appointment as such, the Servicer, the Master Servicer
and the Trustee shall each notify the others of such appointment, but only
if
and to the extent of having actual knowledge of such appointment.
(f) Notwithstanding
any termination pursuant to this Agreement, the Servicer shall continue to
be
entitled to receive all amounts accrued or owing to it under this Agreement
on
or prior to the effective date of such termination, whether in respect of (i)
unreimbursed Servicing Advances or Monthly Advances, (ii) unpaid Servicing
Fees
or REO Management Fees or (iii) or other servicing compensation, and shall
continue to be entitled to the benefits of Section 5.3 notwithstanding any
such
termination, with respect to events occurring prior to such
termination.
|
28.
|
A
new
Section 9.15 is hereby added to read as
follows:
|
Intended
Third Party Beneficiaries.
Notwithstanding any provision herein to the contrary, the parties to this
Agreement agree that it is appropriate, in furtherance of the intent of such
parties as set forth herein, that the Master Servicer and the Trustee receive
the benefit of the provisions of this Agreement as intended third party
beneficiaries of this Agreement to the extent of such provisions; provided,
however, that no third party beneficiary designation will extend indemnification
rights directly to the Master Servicer. The Servicer shall only take direction
from the Master Servicer (if direction by the Master Servicer is required under
this Agreement) unless otherwise directed by this Agreement. Notwithstanding
any
other terms of this Agreement, the parties agree that the overriding intent
is
for the Servicer to be entitled to deal with and through the Master Servicer
in
virtually all circumstances. This intent is not altered by anything herein,
including without limitation, the following: any third party beneficiary
designation of the Trustee; any requirement that the Servicer give notice to
others with respect to third party claims; any indemnification of the Servicer
for following instructions of others in selected circumstances; any
indemnifications running from the Servicer to others; or any provisions allowing
the Servicer in any circumstance to rely on instructions from others.
Notwithstanding the foregoing, all rights and obligations of the Master Servicer
and the Trustee hereunder (other than the Trustee’s right to indemnification)
shall terminate upon termination of the Trust Agreement and of the Trust Fund
pursuant to the Trust Agreement; and upon such termination of the Trust Fund
and
the Trust Agreement, the Serviced Mortgage Loans shall no longer be governed
by
this Agreement but will be governed by terms of the relevant Servicing
Agreement. The
parties to this Agreement further agree that the Depositor shall have the right
to enforce its rights and shall assume its obligations under the Regulation
AB
Amendment as if the Depositor were a signatory to the Regulation AB
Amendment.
|
29
|
Exhibit
F hereto is hereby added to the Servicing Agreement as Exhibit J
thereto.
|
|
30.
|
Exhibit
D to the Servicing Agreement is hereby amended and restated as Exhibit
G
hereto.
|
A-9
EXHIBIT
B
Purchase
Agreement
EXECUTION
VERSION
MORTGAGE
LOAN PURCHASE AND SALE AGREEMENT
Among
WASHINGTON
MUTUAL BANK, XX
XXXXXXXXXX
MUTUAL BANK fsb
WASHINGTON
MUTUAL BANK
(Sellers)
and
XXXXXX
BROTHERS BANK, FSB
(Purchaser)
Dated
as of September 1, 2003
Residential
First Lien Mortgage Loans
Schedule/Schedule
Flow Delivery Program
TABLE
OF CONTENTS
|
Page
|
|||
|
ARTICLE
1. DEFINITIONS
|
1
|
||
|
ARTICLE
2. SALE AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF FILES;
PAYMENT OF
PURCHASE PRICE; DELIVERY OF MORTGAGE LOAN DOCUMENTS; RECORDATION
OF
ASSIGNMENTS OF MORTGAGE
|
9
|
||
|
Section
2.1.
|
Sale
and Conveyance of Mortgage Loans; Possession of Files
|
9
|
|
|
Section
2.2.
|
Delivery
of Mortgage Loan Documents Regarding Mortgage Loans; Recordation
of
Assignments of Mortgage
|
10
|
|
|
Section
2.3.
|
Purchaser’s
Due Diligence Review
|
13
|
|
|
ARTICLE
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS CONCERNING
MORTGAGE LOANS; REPURCHASE OF MORTGAGE LOANS
|
13
|
||
|
Section
3.1.
|
Individual
Mortgage Loans
|
13
|
|
|
Section
3.2.
|
Seller
Representations
|
21
|
|
|
Section
3.3.
|
Repurchase
and Substitution
|
23
|
|
|
ARTICLE
4. COVENANTS
|
26
|
||
|
Section
4.1.
|
Cooperation
|
26
|
|
|
Section
4.2.
|
Representations,
Warranties, Covenants and Indemnities
|
26
|
|
|
Section
4.3.
|
Delivery
of Documents
|
26
|
|
|
Section
4.4.
|
Consents
and Approvals
|
26
|
|
|
Section
4.5.
|
Confidentiality
|
27
|
|
|
Section
4.6.
|
Servicing
|
27
|
|
|
ARTICLE
5. CONDITIONS TO PURCHASE
|
27
|
||
|
Section
5.1.
|
Effective
Date and Closing Date Documents
|
28
|
|
|
Section
5.2.
|
Correctness
of Representations and Warranties
|
28
|
|
|
Section
5.3.
|
Compliance
With Conditions
|
28
|
|
|
ARTICLE
6. PASS-THROUGH AND WHOLE LOAN TRANSFERS
|
28
|
||
|
Section
6.1.
|
Pass-Through
Transfers or Whole-Loan Transfers
|
28
|
|
|
Section
6.2.
|
Designation
of a Master Servicer
|
31
|
|
|
ARTICLE
7. MISCELLANEOUS PROVISIONS
|
31
|
||
|
Section
7.1.
|
Amendment
|
31
|
|
|
Section
7.2.
|
Recordation
of Agreement
|
31
|
|
|
Section
7.3.
|
Governing
Law
|
32
|
|
|
Section
7.4.
|
General
Interpretive Principles
|
32
|
|
i
|
Section
7.5.
|
Reproduction
of Documents
|
32
|
|
|
Section
7.6.
|
Notices
|
33
|
|
|
Section
7.7.
|
Severability
of Provisions
|
34
|
|
|
Section
7.8.
|
Exhibits
|
34
|
|
|
Section
7.9.
|
Counterparts;
Successors and Assigns
|
34
|
|
|
Section
7.10.
|
Effect
of Headings
|
34
|
|
|
Section
7.11.
|
Other
Agreements Superseded; Entire Agreement
|
35
|
|
|
Section
7.12.
|
Survival
|
35
|
|
|
Section
7.13.
|
Intention
of the Parties
|
35
|
|
|
Section
7.14.
|
Nonsolicitation
|
35
|
|
|
Section
7.15.
|
Costs
|
36
|
|
|
Section
7.16.
|
Obligations
of the Sellers
|
36
|
|
|
Section
7.17.
|
Attorneys’
Fees
|
36
|
ii
EXHIBITS
& SCHEDULES
| · |
Exhibit
A-1 CONTENTS
OF COLLATERAL FILE
|
| · |
Exhibit
A-2 CONTENTS
OF CREDIT FILE
|
| · |
Exhibit
B TERM
SHEET
|
Schedule
I to Term Sheet MORTGAGE
LOAN SCHEDULE
| · |
Exhibit
C FORM
OF INDEMNIFICATION AGREEMENT
|
| · |
Exhibit
D REPRESENTATIONS
AND WARRANTIES
|
iii
MORTGAGE
LOAN PURCHASE AND SALE AGREEMENT
THIS
MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
(this
“Agreement”)
dated
as of September 1, 2003 is among Xxxxxx Brothers Bank, FSB, a federal savings
bank, as purchaser (the “Purchaser”),
and
Washington Mutual Bank, FA, a savings association organized under the laws
of
the United States, Washington Mutual Bank fsb, a savings bank organized under
the laws of the United States and Washington Mutual Bank, a Washington state
chartered stock savings bank, as sellers (each, a “Seller”
and,
collectively, the “Sellers”).
PRELIMINARY
STATEMENT
WHEREAS,
in
reliance upon the representations, warranties and covenants of each Seller
contained herein, the Purchaser desires to purchase from each Seller, from
time
to time, and each Seller desires to sell to the Purchaser, from time to time,
certain residential first lien mortgage loans, subject to the terms and
conditions of this Agreement, without recourse and exclusive of the related
servicing rights;
WHEREAS,
the
Purchaser and the Sellers desire to prescribe in this Agreement the manner
of
sale by each Seller and purchase by the Purchaser of such mortgage
loans;
WHEREAS,
the
Purchaser and the Sellers desire that Washington Mutual Bank, FA service
the
mortgage loans in the manner described in the Servicing Agreement;
and
WHEREAS,
following its purchase of the mortgage loans from the Sellers, the Purchaser
may
desire to sell some or all of the mortgage loans to one or more purchasers
as a
whole loan transfer or a public or private mortgage-backed securities
transaction;
NOW,
THEREFORE,
the
Purchaser and the Sellers agree as follows:
ARTICLE
1.
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Acceptable
Servicing Procedures:
The
procedures, including prudent collection and loan administration procedures,
and
the standard of care employed by prudent mortgage servicers which service
mortgage loans of the same type as the Mortgage Loans in the jurisdictions
in
which the related Mortgaged Properties are located. Such standard of care
shall
not be lower than that the Servicer customarily employs and exercises in
servicing and administering similar mortgage loans for its own account and
shall
be in full compliance with all federal, state and local laws, ordinances,
rules
and regulations.
Account:
As
defined in the Servicing Agreement.
1
Agreement:
This
Mortgage Loan Purchase and Sale Agreement, including all exhibits, attachments
and schedules hereto, and all amendments hereof and supplements
hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Appraised
Value:
With
respect to any Mortgage Loan, the lesser of (i) the value set forth on the
appraisal made in connection with the origination of the related Mortgage
Loan
as the value of the related Mortgaged Property, or (ii) the purchase price
paid for the Mortgaged Property, provided, however, that in the case of a
Mortgage
Loan
originated
in connection with
the
refinance of a mortgage loan,
such
value shall be based solely on the appraisal made
in
connection with the origination
of such Mortgage Loan
and
provided, further, that in the case of a Streamlined Mortgage Loan, such
value
shall be based solely on the appraisal made in connection with the origination
of the mortgage loan being refinanced.
ARM
Loan:
A
Mortgage Loan as to which the related Mortgage Note provides that the Mortgage
Interest Rate may be adjusted periodically.
Assignment
of Mortgage:
An
assignment of mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under and complying with the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect
of
record the transfer of the Mortgage Loan to the assignee named
therein.
Breaching
Seller:
As
defined in Section 3.3(b).
Business
Day:
A day
other than (i) a Saturday or Sunday, or (ii) a day on which banking or savings
and loan institutions in the States of Washington, California, Illinois or
New
York are authorized or obligated by law or executive order to be
closed.
Closing
Date:
With
respect to any Loan Pool, the date on which the Purchaser purchases the Mortgage
Loans included in such Loan Pool.
Code:
The
Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto.
Collateral
Documents:
With
respect to any Mortgage Loan, the mortgage loan documents pertaining to such
Mortgage Loan which are specified in Exhibit A-1
attached
hereto and any additional mortgage documents pertaining to such Mortgage
Loan
required to be added to the related Collateral File pursuant to the terms
of
this Agreement.
Collateral
File:
With
respect to any Mortgage Loan, a file pertaining to such Mortgage Loan that
contains each of the related Collateral Documents.
Commitment
Letter:
With
respect to each Loan Pool, a commitment letter entered into between one or
more
Sellers and the Purchaser that provides for the purchase of Mortgage Loans
pursuant to the terms of this Agreement and sets forth the purchase price
for
and certain other terms and conditions of the sale and purchase of such Mortgage
Loans.
2
Coop
Ownership Interests:
With
respect to any Cooperative Loan, the ownership interest in a single Cooperative
Apartment, including (i) the shares issued by the cooperative housing
corporation, (ii) the leasehold interest in the Cooperative Apartment and
(iii)
all attendant right, title and interest thereto.
Cooperative
Apartment:
A
dwelling unit in a multi-dwelling building owned or leased by a cooperative
housing corporation, which unit the Mortgagor has an exclusive right to occupy
pursuant to the terms of a proprietary lease in accordance with the laws
of the
state in which the building is located.
Cooperative
Loan:
A
Mortgage Loan evidenced by a Mortgage Note and secured by a first lien against
the Coop Ownership Interests in a Cooperative Apartment.
Credit
File:
With
respect to any Mortgage Loan, a file pertaining to such Mortgage Loan which
contains the mortgage loan documents described on
Exhibit A-2
attached
hereto together with the credit documentation relating to the origination
of
such Mortgage Loan and copies of the Collateral Documents, which file shall
be
retained by the Servicer and may be maintained on microfilm or any other
comparable medium.
Custodian:
With
respect to the Mortgage Loans in any Loan Pool, the custodian designated
by the
Purchaser in the related Commitment Letter, or any successor
custodian.
Cut-off
Date:
As to
each Mortgage Loan purchased on a particular Closing Date, the cut-off date
specified in the Commitment Letter relating to the purchase and sale of the
related Loan Pool.
Cut-off
Date Principal Balance:
As to
each Mortgage Loan, the outstanding principal balance of such Mortgage Loan
as
of the close of business on the applicable Cut-off Date, after deduction
and
application of all payments of principal due on
or
before such Cut-off Date,
whether
or not received.
Deleted
Mortgage Loan:
A
Mortgage Loan that is removed from a Loan Pool and replaced with a Qualified
Substitute Mortgage Loan as set forth in Section 3.3.
Delinquent
Monthly Payment:
Any
scheduled Monthly Payment that (i) has not been received by the Due Date
of the
next Monthly Payment and (ii) remains unpaid as of the related Closing
Date.
Disclosure
Document:
As
defined in Section 6.1(d).
Due
Date:
With
respect to any Mortgage Loan, the day of the month on which Monthly Payments
on
such Mortgage Loan are due, exclusive of any days of grace, which day shall
be
the first day of the month unless otherwise specified on the related Mortgage
Loan Schedule.
Due
Period:
With
respect to any Mortgage Loan, the period beginning on the first day of any
month
and ending on the last day of such month.
3
Effective
Date:
September 25, 2003.
Effective
Date Documents:
| (A) |
two
fully-executed counterparts of this Agreement;
|
| (B) |
two
fully executed counterparts of the Servicing
Agreement;
|
|
(C)
|
two
fully-executed counterparts of the Term
Sheet;
|
|
(D)
|
an
executed copy of the opinion of Xxxxxx Xxxxxx White & XxXxxxxxx
LLP;
|
|
(E)
|
the
Account Certification or Account Letter Agreement, as required
under the
Servicing Agreement;
|
|
(F)
|
the
Escrow Account Certification or Escrow Account Letter Agreement,
as
required under the Servicing Agreement;
and
|
|
(G)
|
an
executed copy of a Secretary’s or Assistant Secretary’s Certificate for
each Seller selling Mortgage Loans on the Effective
Date.
|
Escrow
Account:
As
defined in the Servicing Agreement.
Escrow
Holdback Mortgage Loan:
A
Mortgage Loan subject to an escrow withhold agreement for the express purpose
of
completing designated improvements on the Mortgaged Property.
Xxxxxx
Xxx:
Xxxxxx
Xxx (formerly known as the Federal National Mortgage Association) and any
successor thereto.
Xxxxxxx
Mac:
Xxxxxxx
Mac (formerly known as The Federal Home Loan Mortgage Corporation) and any
successor thereto.
Gross
Margin:
With
respect to any ARM Loan, the fixed percentage amount set forth in the related
Mortgage Note and described in the related Mortgage Loan Schedule, which
amount
is added to the Index in accordance with the terms of the related Mortgage
Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest
Rate
for such Mortgage Loan.
HUD:
The
United States Department of Housing and Urban Development, or any successor
thereto.
Indemnified
Party:
As
defined in Section 6.1(d).
Index:
With
respect to any ARM Loan, the index set forth in each adjustable rate Mortgage
Note, which index is added to the Gross Margin to determine the Mortgage
Interest Rate on each Interest Rate Adjustment Date.
4
Initial
Closing Date:
September 25, 2003.
Initial
Rate Cap:
With
respect to any ARM Loan, the maximum increase or decrease in the Mortgage
Interest Rate on the initial Interest Rate Adjustment Date.
Interest
Rate Adjustment Date:
With
respect to any ARM Loan, the date specified in the related Mortgage Note
as the
date on which the Mortgage Interest Rate for the related Mortgage Loan is
subject to adjustment.
Interest
Rate Decrease Maximum:
With
respect to any ARM Loan, the maximum amount, if any, that the Mortgage Interest
Rate can adjust downwards on any Interest Rate Adjustment Date, as determined
in
accordance with the related Mortgage Note.
Interest
Rate Increase Maximum:
With
respect to any ARM Loan, the maximum amount, if any, that the Mortgage Interest
Rate can adjust upwards on any Interest Rate Adjustment Date, as determined
in
accordance with the related Mortgage Note.
Loan-to-Value
Ratio:
With
respect to each Mortgage Loan, the original principal balance of such Mortgage
Loan divided by the Appraised Value of the related Mortgaged
Property.
Loan
Pool:
A pool
of Mortgage Loans sold by one or more Sellers to the Purchaser on any Closing
Date pursuant to the terms of this Agreement and the related Commitment Letter
(which Mortgage Loans shall be identified on the related Mortgage Loan Schedule
delivered pursuant to this Agreement).
Master
Servicer:
As
defined in Section 6.2.
Maturity
Date:
With
respect to each Mortgage Loan, the maturity date of the related Mortgage
Note,
as specified therein.
Maximum
Mortgage Interest Rate:
With
respect to any ARM Loan, the maximum rate of interest that may be charged
pursuant to the related Mortgage Note.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, and
any
successor thereto.
MERS
Loan:
Any
Mortgage Loan registered on the MERS® System and for which MERS is listed as the
record mortgagee or beneficiary on the related Mortgage or assignment
thereof.
MERS®
System:
The
system of electronically recording transfers of Mortgages maintained by
MERS.
MIN:
The
mortgage identification number issued to each MERS Loan.
Minimum
Mortgage Interest Rate:
With
respect to any ARM Loan, the minimum rate of interest, if any, that may be
charged pursuant to the related Mortgage Note.
5
MOM
Loan:
A
Mortgage Loan that was registered on the MERS® System at the time of origination
thereof and for which MERS appears as the record mortgagee or beneficiary
on the
related Mortgage.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage Loan which
is
payable by a Mortgagor from time to time under the related Mortgage
Note.
Monthly
Remittance Date:
The
eighteenth (18th)
day of
each month (or if such day is not a Business Day, the next Business Day)
commencing in the month following the end of the calendar month in which
the
initial Cut-off Date occurs.
Mortgage:
The
mortgage, deed of trust, or other instrument creating a first lien on or
first
priority ownership interest in real property or, in the case of a Cooperative
Loan, the security agreement or other instrument creating a first lien on
the
related Coop Ownership Interests, in each case, including any riders, addenda,
assumption agreements, or modifications relating thereto.
Mortgage
Interest Rate:
With
respect to each Mortgage Loan, the annual rate at which interest accrues
on such
Mortgage Loan.
Mortgage
Loan:
An
individual mortgage loan that is sold pursuant and subject to this Agreement,
each such mortgage loan being identified on the related Mortgage Loan Schedule.
The term Mortgage Loan includes a Cooperative Loan.
Mortgage
Loan Schedule:
With
respect to the Mortgage Loans included in a Loan Pool to be sold pursuant
to
this Agreement on any Closing Date, the schedule or schedules of Mortgage
Loans agreed to by the parties that describes such Mortgage Loans, which
schedule shall set forth at least the information specified on Exhibit
E
attached
hereto with respect to each Mortgage Loan to the extent applicable.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage,
including any riders or addenda thereto.
Mortgaged
Property:
The
property securing a Mortgage Note pursuant to the related Mortgage or, in
the
case of a Cooperative Loan the related Coop Ownership Interests.
Mortgagor:
The
obligor(s) on a Mortgage Note.
Net
Rate:
With
respect to each Mortgage Loan, the annual rate at which interest thereon
shall
be remitted to the Purchaser (in each case computed on the basis of a 360-day
year consisting of twelve 30-day months), which annual rate shall be equal
to
the Mortgage Interest Rate less the Servicing Fee Rate.
Pass-Through
Transfer:
The
sale or transfer of some or all of the Mortgage Loans by the Purchaser to
a
trust to be formed as part of a publicly issued or privately placed mortgage
backed securities transaction.
6
Person:
Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Primary
Mortgage Insurance Policy:
With
respect to each Mortgage Loan, the policy of primary mortgage insurance
(including all endorsements thereto) issued with respect to such Mortgage
Loan,
if any, or any replacement policy.
Purchase
Price:
For
each Mortgage Loan purchased hereunder, an amount equal to the Cut-off Date
Principal Balance of such Mortgage Loan, multiplied by the Purchase Price
Percentage.
Purchase
Price Percentage:
For
each Mortgage Loan included in a Loan Pool, the percentage of par set forth
in
the related Commitment Letter that is used to calculate the Purchase Price
of
each Mortgage Loan in such Loan Pool, subject to any adjustments specified
in
the related Commitment Letter.
Purchaser:
Xxxxxx
Brothers Bank, FSB, a federal savings bank, and all successors in interest
pursuant to Sections 6.1 and 7.9 hereof.
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by a Breaching Seller for a Deleted
Mortgage Loan, which must have the following qualities on the date of
substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution, not in excess of
the
outstanding principal balance of the Deleted Mortgage Loan (the amount of
any
shortfall shall be deposited in the Account by such Breaching Seller out
of its
own funds without right of reimbursement as provided in Section 3.3(e)),
(ii) have a current Mortgage Interest Rate not less than 1% less than, and
not more than 1% greater than, the current Mortgage Interest Rate of the
Deleted
Mortgage Loan, (iii) have a remaining term to maturity not greater than and
not more than one year less than that of the Deleted Mortgage Loan,
(iv) have a Net Rate not less than 1% less than, and not more than 1%
greater than, the Net Rate of the Deleted Mortgage Loan, (v) be of the same
type as the Deleted Mortgage Loan (i.e., if the Deleted Mortgage Loan is
a fixed
rate Mortgage Loan, the substituted loan shall be a fixed rate Mortgage Loan,
and if the Deleted Mortgage Loan is an ARM Loan, the substituted loan shall
be
an ARM Loan which is the same ARM type and with the same Mortgage Interest
Rate
caps, Index and Gross Margin as the Deleted Mortgage Loan), and (vi) comply
with each representation and warranty respecting individual Mortgage Loans
set
forth in Section 3.1 hereof, provided, that for purposes of applying such
representations and warranties to each such Qualified Substitute Mortgage
Loan,
references in such Sections to the related Closing Date shall be deemed to
be
references to the date of substitution of such Qualified Substitute Mortgage
Loan. If one or more Mortgage Loans are substituted for one or more Deleted
Mortgage Loans pursuant to Section 3.3, the amounts described in clause (i)
hereof shall be determined on the basis of the aggregate principal balances;
the
Mortgage Interest Rate, the term to maturity and the Net Rate described in
clauses (ii)-(iv) hereof shall be determined on the basis of weighted average
Mortgage Interest Rates, original terms to maturity and Net Rates
respectively.
7
Repurchase
Price:
With
respect to any Mortgage Loan,
unless
otherwise specified in the related Commitment Letter, an amount equal to
the sum
of (a) (i) if such repurchase occurs during the first twelve months following
the related Closing Date, (A) the Unpaid Principal Balance of such Mortgage
Loan, multiplied by (B) the Purchase Price Percentage, and (ii) if such
repurchase occurs after the first twelve months following the related Closing
Date or after such Mortgage Loan has been subject to a Pass-Through Transfer,
the Unpaid Principal Balance of such Mortgage Loan, plus (b) the amount of
interest on such Unpaid Principal Balance at the applicable Net Rate, from
the
date to which interest has last been paid and distributed to the Purchaser,
to
and including the last
day
of the month in which such repurchase occurs.
Seller:
As the
context requires, any of Washington Mutual Bank, FA, Washington Mutual Bank
fsb
and/or Washington Mutual Bank and their respective assigns and successors
in
interest.
Seller’s
Information:
As
defined in Section 6.1(d).
Servicer:
Washington Mutual Bank, FA, in its capacity as Servicer under the Servicing
Agreement, and any permitted successor to or assignee of any servicing rights
or
obligations under the Servicing Agreement.
Servicing
Agreement:
That
certain Servicing Agreement of even date herewith between the Purchaser as
owner
and the Servicer.
Servicing
Cut-off Date:
As
to
each Mortgage Loan purchased on a Closing Date, the
last
day of the Due Period in which such Closing Date occurs.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee payable to the
Servicer as compensation for servicing and administering such Mortgage Loan.
Such fee shall, for a period of one full month, be equal to one-twelfth of
the
product of (i) the related Servicing Fee Rate, multiplied by (ii) the
outstanding Unpaid Principal Balance of such Mortgage Loan.
Servicing
Fee Rate:
With
respect to each Mortgage Loan, the annual rate at which the Servicing Fee
shall
be calculated, which annual rate is set forth in the related Commitment Letter
and Term Sheet. In the event that the Index and Gross Margin of an ARM Loan
are
adjusted pursuant to the terms of the related Mortgage Note, the Servicing
Fee
Rate for such ARM Loan shall be the annual rate of the Servicing Fee in effect
immediately prior to such adjustment.
Streamlined
Mortgage Loan:
A
Mortgage Loan originated in connection with the refinance of a mortgage loan
pursuant to the related Seller’s streamlined loan documentation program then in
effect.
Subsequent
Transfer Settlement Date:
As
defined in Section 6.1(a).
Term
Sheet:
A term
sheet with respect to the Mortgage Loans purchased on a Closing Date, in
the
form attached hereto as Exhibit
B.
8
Unpaid
Principal Balance:
With
respect to each Mortgage Loan that is not a Qualified Substitute Mortgage
Loan,
as of
any date of determination, (i) the Cut-off Date Principal Balance, minus
(ii) the principal portion of all payments made by or on behalf of the
Mortgagor after such Cut-off Date and received by the Purchaser. With respect
to
each Mortgage Loan that is a Qualified Substitute Mortgage Loan, as of any
date
of determination, (i) the outstanding principal balance of such Mortgage
Loan as of the close of business on the date of substitution, after deduction
and application of the principal portion of all payments due on or before
such
date of substitution
whether
or not received,
minus
(ii) the principal portion of all payments made by or on behalf of the
Mortgagor after such date of substitution and received by the
Purchaser.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to
a
third party, which sale or transfer is not a Pass-Through Transfer.
ARTICLE
2.
SALE
AND CONVEYANCE OF MORTGAGE LOANS;
POSSESSION
OF FILES; PAYMENT OF PURCHASE
PRICE;
DELIVERY OF MORTGAGE LOAN DOCUMENTS;
RECORDATION
OF ASSIGNMENTS OF MORTGAGE
Section
2.1. Sale
and Conveyance of Mortgage Loans; Possession of Files
(a) On
each
Closing Date for any Loan Pool, upon the receipt of the requisite consideration,
the applicable Seller or Sellers shall deliver a Term Sheet with respect
to the
Loan Pool. By such delivery, each Seller shall sell, transfer, assign, set
over,
and convey to the Purchaser, without recourse, but subject to the
representations, warranties, terms and provisions of this Agreement, all
the
right, title, and interest of the Seller in and to the Mortgage Loans included
in such Loan Pool, exclusive of the related servicing rights.
(b) Pursuant
to Section 2.2, the applicable Seller or Sellers shall deliver to the
Custodian the documents comprising the Collateral File with respect to each
related Mortgage Loan included in a Loan Pool to be purchased by the Purchaser.
Such documents shall, prior to payment for the related Mortgage Loan pursuant
to
Section 2.1(c) below, be held by the Custodian as custodian for the
applicable Seller or Sellers. The documents comprising each Collateral File
that
are not required to be delivered to the Custodian pursuant to
Section 2.2(a) and the documents comprising each Credit File shall, subject
to payment for the related Mortgage Loan pursuant to
Section 2.1(c) below, be held in trust by the Servicer for the benefit
of the Purchaser as the owner thereof. The Servicer’s possession of such
documents so held is at the will of the Purchaser, and such holding and
possession is in trust for the Purchaser as the owner thereof and only for
the
purpose of servicing the Mortgage Loans. Upon payment for the related Mortgage
Loan pursuant to Section 2.1(c) below, the beneficial ownership of
each Mortgage Note, each Mortgage, and each of the other documents comprising
the Collateral File and the Credit File with respect to such Mortgage Loan
is
and shall be vested in the Purchaser, and the ownership of all records and
documents with respect to such Mortgage Loan prepared by or which come into
the
possession of the applicable Seller or Sellers or any agent or designee thereof
shall immediately vest in the Purchaser and shall be delivered to the Custodian
(in the case of the Collateral Documents) or the Servicer (in the case of
the
Credit Files or any other documents) to hold the same in a custodial capacity
for Purchaser.
9
(c) In
full
consideration for the sale of each of the Mortgage Loans pursuant to
Section 2.1(a) hereof, and upon the terms and conditions of this
Agreement, on the related Closing Date the Purchaser shall pay to the applicable
Seller or Sellers by wire transfer of immediately available funds (i) the
applicable Purchase Price for each Mortgage Loan purchased on such Closing
Date,
plus (ii) the amount of interest (computed, as to each Mortgage Loan, at
the Net Rate) that has accrued on the Cut-off Date Principal Balance of such
Mortgage Loans from the Cut-off Date to but not including the Closing
Date.
(d) As
of
each Closing Date, the Purchaser shall own and be entitled to receive with
respect to each Mortgage Loan purchased on such Closing Date all Monthly
Payments and all other recoveries of principal and interest (computed, as
to
each Mortgage Loan, at the Net Rate) due after the applicable Cut-off Date,
subject to the rights of the Servicer under the Servicing Agreement to
reimbursement for certain costs, expenses and advances incurred or made pursuant
thereto. All such amounts that are collected after the applicable Cut-off
Date
through and including the related Closing Date shall be held and remitted
by the
Servicer in accordance with the terms of the Servicing Agreement.
(e) On
or
before the Closing Date for any Loan Pool, the applicable Seller or Sellers
shall deliver to the Purchaser with the Term Sheet the related Mortgage Loan
Schedule, which shall be in hard copy or “read-only” electronic format (as
reasonably acceptable to such Seller and the Purchaser).
Section
2.2. Delivery
of Mortgage Loan Documents Regarding Mortgage Loans; Recordation of Assignments
of Mortgage
(a) On
or
before the date specified in the related Commitment Letter, each Seller shall
deliver or cause to be delivered to the Custodian, at such Seller’s expense,
with respect to each Mortgage Loan sold by such Seller hereunder, each of
the
following items or documents (unless otherwise agreed by the applicable Seller
and the Purchaser):
(i) With
respect to each Mortgage Loan (other than a Cooperative Loan):
(A)
(1) the
original Mortgage Note, endorsed (on the Mortgage Note or an allonge attached
thereto) “Pay to the order of ____________________, without recourse,” (or as
otherwise specified in the related Commitment Letter), and signed by facsimile
signature in the name of such Seller by an authorized officer, with all
intervening endorsements showing a complete, valid and proper chain of title
from the originator of such Mortgage Loan to such Seller;
10
(2)
or a
lost note affidavit, providing indemnification to the holder thereof for
any
losses incurred due to the fact that the original Mortgage Note is missing,
together with a copy of the Mortgage Note.
(B) the
original Mortgage, with evidence of recording thereon, (and, in the case
of a
MOM Loan, with evidence of the MIN); provided that (i) if the original Mortgage
has been delivered for recording to the appropriate public recording office
of
the jurisdiction in which the Mortgaged Property is located but has not yet
been
returned to such Seller by such recording office, such Seller shall, no later
than 180 days following the related Closing Date, deliver to the Custodian
the
original of such Mortgage, with evidence of recording thereon, and (ii) if
such
Mortgage has been lost or if such public recording office retains the original
recorded Mortgage, such Seller may deliver or cause to be delivered to the
Custodian a photocopy of such Mortgage certified by such public recording
office
to be a true and complete copy of the original recorded Mortgage;
(C) unless
such Mortgage Loan is a MERS Loan, the original Assignment of Mortgage, from
such Seller signed by original signature of an authorized officer, in blank
(or
as otherwise specified in the related Commitment Letter), which assignment
shall
be in form and substance acceptable for recording (except for the insertion
of
the name of the assignee and the recording information);
(D) unless
such Mortgage Loan is a MOM Loan, originals of all intervening Assignments
of
Mortgage, with evidence of recording thereon, showing a complete chain of
title
from the originator to such Seller (or in the case of a MERS Loan other than
a
MOM Loan, showing a complete chain of title from the originator to MERS);
provided that (i) if any original intervening Assignment of Mortgage has
been
delivered for recording to the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located but has not yet been
returned to such Seller by such recording office, such Seller shall, no later
than 180 days following the related Closing Date, deliver to the Custodian
the
original of such intervening Assignment of Mortgage, with evidence of recording
thereon, and (ii) if such intervening Assignment of Mortgage has been lost
or if
such public recording office retains the original recorded intervening
Assignment of Mortgage, such Seller may deliver or cause to be delivered
to the
Custodian a photocopy of such intervening Assignment of Mortgage certified
by
such public recording office to be a true and complete copy of the original
recorded intervening Assignment of Mortgage; and
(E) originals
of all assumption and modification agreements, if any, unless such originals
are
unavailable (in which event such Seller shall deliver to the Custodian a
photocopy of each such original, certified by the Seller to be a true and
complete copy of the original).
11
(ii) With
respect to each Cooperative Loan, as applicable and as required by the
applicable laws of the state in which the related Cooperative Apartment is
located, copies of: (A) the proprietary lease, (B) the security agreement,
(C)
the assignment of the proprietary lease, with all intervening assignments
showing a complete chain of title and an assignment thereof by such Seller,
(D)
the original stock certificate evidencing the ownership of the Cooperative
Apartment endorsed or accompanied by a stock power relating to such stock
certificate executed in blank, (E) a recognition agreement in form approved
by
Seller’s underwriting guidelines, in substantially the same form as the standard
“AZTECH” form, (F) copies of the financing statement filed by the applicable
Seller as secured party and, if applicable, a filed UCC-3 assignment of the
subject security interest showing a complete chain of title, together with
an
executed UCC-3 Assignment of such security interest by the Seller in a form
sufficient for filing, and (G) such other documents as are necessary for
the
perfection of a lien against the related Coop Ownership Interests under
applicable law.
(b) In
connection with the transfer of any MERS Loan pursuant to Section 2.1
hereof, the Servicer shall cause the MERS® System to indicate that such MERS
Loan has been assigned to the Purchaser. The Purchaser may, in its discretion,
direct the Servicer to deliver for recording to the appropriate public recording
office of the jurisdiction in which the Mortgaged Property is located, and
cause
to be duly recorded, any or all of the original Assignments of Mortgage referred
to in Section 2.2(a)(i)(C). The Seller shall pay all recording fees
relating to the recordation of the Assignments of Mortgage from its own funds.
If any such Assignment of Mortgage is returned unrecorded to a Seller because
of
any defect therein, such Seller shall cause such defect to be cured and such
Assignment of Mortgage to be recorded in accordance with this Section 2.2
within 30 days after the date on which the rejected document was received
by
such Seller from the public recording office.
(c) Whenever
a certified copy of a document certified by a Seller is required to be delivered
to the Purchaser pursuant to this Section 2.2, the following form of
certification is permitted: “Certified true, correct and complete copy of the
original. [Name of Seller], By _________________, Its
_________________.”
(d) Promptly
following receipt thereof, but in no event later than 180
days
after the related Closing Date, such Seller shall deliver to the Custodian
the
following documents with respect to each Mortgage Loan included in the Loan
Pool
purchased on such Closing Date to the extent not previously delivered to
the
Custodian: (i) the original Mortgage, with evidence of recording thereon,
(ii) unless such Mortgage Loan is a MOM Loan, all original intervening
Assignments of Mortgage, with evidence of recording thereon and (iii) if
a lost
note affidavit was previously delivered without a copy of the related Mortgage
Note, a copy of such Mortgage Note. If any original Mortgage or intervening
Assignment of Mortgage has been delivered for recording to the appropriate
public recording office of the jurisdiction in which the related Mortgaged
Property is located and such recording office retains such original document,
or
if an original Mortgage or intervening Assignment of Mortgage has been lost,
then Seller shall deliver to the Custodian in lieu of such original document
a
photocopy certified by such recording office to be a true and correct copy
of
such original. In the event that a Seller does not comply with the delivery
requirements set forth in this Section 2.2, the related Mortgage Loan
shall, upon the request of the Purchaser, be repurchased by such Seller at
the
Repurchase Price and in the manner specified in Section 3.3(b).
Notwithstanding the foregoing, a Seller shall not be deemed to be in breach
of
this Agreement if such Seller fails to deliver to the Custodian within the
time
period specified above any of the documents described in this
Section 2.2(d) and provides evidence to the Custodian that such
failure is due solely to the failure of the applicable recorder’s office to
return a Collateral Document that was properly submitted for recordation.
Such
Seller shall use reasonable efforts to obtain such original recorded document
or
copy of the original showing recording information certified by the appropriate
recording office to be a true and complete copy of the recorded original
as soon
as practicable.
12
(e) If
requested by the Purchaser, the Servicer shall, at Purchaser’s sole expense,
create a xeroxed copy or an imaged copy of the documents contained in the
Credit
File of any Mortgage Loan and deliver, or cause to be delivered, each such
xeroxed copy or, through an electronic medium, each such imaged copy to the
Custodian or the Purchaser.
Section
2.3. Purchaser’s
Due Diligence Review
With
respect to each Loan Pool, the Purchaser shall be entitled to conduct a due
diligence review in order to ensure that the Mortgage Loans included in such
Loan Pool meet the requirements set forth in the related Commitment Letter
and
this Agreement. Such due diligence review shall be conducted in accordance
with
the timetable and any additional terms and conditions set forth in the related
Commitment Letter. The Purchaser’s due diligence review shall not result in a
waiver of or impair or diminish the rights of the Purchaser under this Agreement
with respect to a breach of representations or warranties of the applicable
Seller or Sellers.
ARTICLE
3.
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF
THE
SELLERS CONCERNING MORTGAGE LOANS;
REPURCHASE
OF MORTGAGE LOANS
Section
3.1. Individual
Mortgage Loans
Each
of
the Sellers hereby, severally and not jointly, represents and warrants to
and
covenants to and agrees with the Purchaser that, as to each Mortgage Loan
sold
by such Seller hereunder, as of the related Closing Date:
(a) The
information with respect to such Mortgage Loan set forth on the related Mortgage
Loan Schedule is true and correct in all material respects.
(b) Immediately
prior to the transfer and conveyance of the Mortgage Loan to the Purchaser
pursuant to Section 2.1, neither the related Mortgage nor the Mortgage Note
were assigned or pledged to any Person and the Seller had good and marketable
title thereto. Immediately prior to the transfer and conveyance of the Mortgage
Loan to the Purchaser pursuant to Section 2.1, the Seller was the sole
owner and holder of such Mortgage Loan, free and clear of any and all liens,
claims, encumbrances, participation interests, equities, pledges, charges,
or
security interests of any nature, and had full right and authority to sell
and
assign such Mortgage Loan pursuant to this Agreement. Upon the transfer of
the
Mortgage Loan to the Purchaser pursuant to Section 2.1, the Seller shall
have taken all actions necessary on its part to be taken so that the Purchaser
will have good indefeasible title to, and will be sole owner of, the related
Mortgage and the Mortgage Note, free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges, or security
interests of any nature.
13
(c) With
respect to each Mortgage Loan other than a Cooperative Loan, (i) the Mortgage
is
a valid, subsisting and enforceable first lien on the Mortgaged Property,
including all buildings, fixtures, installations and improvements to the
Mortgaged Property, and the Mortgaged Property is free and clear of all
encumbrances and liens having parity with or priority over the first lien
of the
Mortgage except for (A) the lien of current real property taxes and
assessments not yet due and payable, (B) covenants, conditions and
restrictions, rights of way, easements, mineral right reservations and other
matters of public record as of the date of recording of such Mortgage, such
exceptions generally being acceptable under prudent mortgage lending standards
and specifically reflected in the appraisal made in connection with the
origination of such Mortgage Loan or specifically referred to in the mortgagee’s
policy of title insurance and (C) other matters to which like properties
are commonly subject that do not materially interfere with the value (as
determined by the Appraised Value), use, enjoyment or marketability of the
Mortgaged Property and (ii) there are no security agreements, pledged accounts,
chattel mortgages, or equivalent documents related to the Mortgage.
(d) The
terms
of the Mortgage and the Mortgage Note have not been impaired, waived, altered,
or modified in any respect, except by a written instrument that has been
recorded, if necessary, to protect the interest of the Purchaser and that
is a
part of the Collateral File.
(e) No
mortgagor has been released, in whole or in part, except in connection with
an
assumption agreement or modification agreement that is part of the Collateral
File.
(f) There
is
no default, breach, violation, or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
such a default, breach, violation, or event of acceleration, and neither
the
Seller, nor any seller or servicer, has waived any such default, breach,
violation, or event of acceleration. All taxes, governmental assessments
(including assessments payable in future installments), insurance premiums,
leasehold payments, or ground rents which previously became due and owing
in
respect of or affecting the related Mortgaged Property have been paid, or
an
escrow of funds has been established in an amount sufficient to pay for every
such item that remains unpaid and that has been assessed but is not yet due
and
payable. The Seller has not advanced funds, or induced, solicited, or knowingly
received any advance of funds by a party other than the Mortgagor, directly
or
indirectly, for the payment of any amount required by the Mortgage or the
Mortgage Note. No foreclosure action has been commenced with respect to such
Mortgage Loan.
(g) The
Mortgaged Property is free of material damage or waste and in good repair.
There
is no proceeding pending or, to the best of the Seller’s knowledge, threatened
for the total or partial condemnation of the Mortgaged Property and no notice
of
any such pending or threatened proceeding has been received so as to adversely
impair the value or marketability of the Mortgaged Property.
14
(h) There
are
no mechanics’ or similar liens or claims which have been filed for work, labor,
or material (and no rights are outstanding that under law could give rise
to
such liens) affecting the related Mortgaged Property that are, or may be,
liens
prior or equal to, or coordinate with, the lien of the related Mortgage and
that
are not insured against by the related mortgagee’s policy of title
insurance.
(i) Unless
such Mortgage Loan is an Escrow Holdback Mortgage Loan, all of the improvements
which were included for the purpose of determining the Appraised Value of
the
Mortgaged Property were completed at the time that such Mortgage Loan was
originated and lie wholly within the boundaries and building restriction
lines
of such Mortgaged Property. No improvements on adjoining properties encroach
upon the Mortgaged Property
except
those that are insured against by the title insurance policy referred to
in
Section 3.1(q).
No
improvement located on or being part of the Mortgaged Property is in violation
of any applicable zoning law or regulation, subdivision law or
ordinance.
(j) The
Seller is (or, if the Seller did not originate the Mortgage Loan, the
originator, during the period in which it held and disposed of such Mortgage
Loan, was): (i) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located
and (ii)(A) organized under the laws of such state, (B) qualified to
do business in such state, (C) a federal savings and loan association or
national bank having principal offices in such state, (D) not doing
business in such state, or (E) not required to qualify to do business in
such state.
(k) No
Monthly Payment with respect to such Mortgage Loan is a Delinquent Monthly
Payment. All payments required to be made under the related Mortgage and
Mortgage Note through and including the related Cut-off Date, have been made.
Unless otherwise stated in the related Commitment Letter, not more than one
payment required to be made under the related Mortgage and Mortgage Note
has
remained unpaid through its next Due Date (excluding any applicable grace
period) during the twelve months immediately preceding the related Cut-off
Date.
(l) There
are
no custodial agreements in effect adversely affecting the right or ability
of
the Seller to make the deliveries specified in Section 2.2(a) or
Section 2.2(d).
(m) The
Mortgage Note and the Mortgage are genuine, and each is the legal, valid
and
binding obligation of the maker thereof and each party assuming liability
therefor, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium, or
other
similar laws affecting the enforcement of creditors’ rights generally and except
that the equitable remedy of specific performance and other equitable remedies
are subject to the discretion of the courts. All parties to the Mortgage
Note
and the Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage and convey the estate therein purported to be conveyed, and the
Mortgage Note and the Mortgage have been duly and properly executed by such
parties or pursuant to a valid power-of-attorney that has been recorded with
the
Mortgage.
15
(n) The
Mortgage has been duly assigned and the Mortgage Note has been duly endorsed
as
provided in Section 2.2(a). Any Assignment of Mortgage delivered to the
Purchaser pursuant to Section 2.2(a)(i)(C) is in recordable form except for
the insertion of the name of the assignee and recording information and is
acceptable for recording under the laws of the applicable
jurisdiction.
(o) Any
and
all requirements of any federal, state, or local law including, without
limitation, applicable anti-money laundering laws (including, without
limitation, the USA Patriot Act of 2001), usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity,
or
disclosure laws applicable to such Mortgage Loan have been complied with.
The
consummation of the transactions contemplated by this Agreement shall not
cause
the violation of any such laws.
(p) Unless
such Mortgage Loan is an Escrow Holdback Mortgage Loan, the proceeds of such
Mortgage Loan have been fully disbursed. There is no requirement for, and
the
Seller shall not make any, future advances under the terms of the Mortgage
Loan.
Any future advances made prior to the applicable Cut-off Date have been
consolidated with the principal balance secured by the Mortgage, and such
principal balance, as consolidated, bears a single interest rate and single
repayment term reflected on the related Mortgage Loan Schedule. Unless such
Mortgage Loan is subject to negative amortization, the Unpaid Principal Balance
as of the applicable Cut-off Date does not exceed the original principal
amount
of such Mortgage Loan. Unless such Mortgage Loan is an Escrow Holdback Mortgage
Loan, any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have been
complied with, and certificates of completion with respect thereto are contained
in the related Credit File. All costs, fees and expenses incurred in making,
or
closing or recording such Mortgage Loan have been paid or shall be paid in
the
ordinary course of business.
(q) Such
Mortgage Loan (unless it is a Cooperative Loan) is covered by an ALTA mortgage
title insurance policy acceptable to Seller, with, in the case of an ARM
Loan,
an adjustable rate mortgage endorsement, substantially in the form of ALTA
Form
6.1 or 6.2, or such other generally used and acceptable form of policy and
applicable endorsements acceptable under the Seller’s underwriting guidelines.
Each such policy affirmatively insures ingress and egress and insures against
encroachments by or upon the Mortgaged Property. Each such policy was issued
on
the date of the origination of such Mortgage Loan by a title insurer acceptable
under Seller’s underwriting guidelines and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller,
and
its successors and assigns, as to the first priority lien of the Mortgage
in the
original principal amount of such Mortgage Loan. Each such policy has been
duly
and validly endorsed to the Purchaser or the assignment to the Purchaser
of the
Seller’s interest does not require the consent of or notification to the
insurer, and such mortgage title insurance policy is in full force and effect.
Where required by law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
The
Seller has taken no action that would impair the enforceability of such
policy.
16
(r) All
buildings and other improvements upon the Mortgaged Property are insured
against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, pursuant to
insurance policies conforming to the requirements of Section 2.10 of the
Servicing Agreement and issued by an insurer acceptable under Seller’s
underwriting guidelines. If the Mortgaged Property is in an area that, at
the
time of origination of the related Mortgage Loan, was identified on a flood
hazard boundary map or flood insurance rate map issued by the Federal Emergency
Management Agency as having special flood hazards and such flood insurance
was
then available, a flood insurance policy is in effect meeting the requirements
of the current guidelines of the Federal Insurance Administration with an
insurance carrier acceptable to Seller. Each individual insurance policy
has
been validly issued and is in full force and effect. The Seller has caused
to be
performed all acts required to preserve the rights and interests of the
Purchaser in all insurance policies required by this Agreement, including,
without limitation, notification of insurers, and assignment of policies
or
interests therein. Each individual insurance policy contains a standard
mortgagee clause naming the Seller, and its successors and assigns, as mortgagee
and loss payee. All premiums due thereon have been paid. The Mortgage obligates
the Mortgagor to maintain all such insurance at the Mortgagor’s cost and
expense, and upon the Mortgagor’s failure to do so, authorizes the servicer or
the owner of the Mortgage to obtain and maintain such insurance at the
Mortgagor’s cost and expense and to seek reimbursement therefor from the
Mortgagor. No claims have been made under such policies since origination
of the
Mortgage Loan, and the Seller has taken no action that would impair the coverage
of any such insurance policy, the benefits of any endorsement or the validity,
binding effect and enforceability of the foregoing.
(s) There
is
no valid offset, defense, counterclaim or right of rescission as to the related
Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay
the
unpaid principal of or interest on such Mortgage Note. The operation of any
of
the terms of such Mortgage Note or Mortgage, or the exercise of any right
thereunder, shall not render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, recoupment, counterclaim or defense, including, without limitation,
the
defense of usury, and no such right of rescission, set-off, recoupment,
counterclaim or defense has been asserted with respect thereto. Such Mortgage
Loan is not subject to any pending bankruptcy, insolvency, reorganization
or
moratorium. If such Mortgage Loan is an ARM Loan, all the applicable terms
of
the Mortgage Note pertaining to adjustments of the Mortgage Interest Rate
and
the Monthly Payments and payment adjustments in connection therewith are
enforceable and shall not affect the priority of the Mortgage lien. If such
Mortgage Loan is an ARM Loan, the related Mortgage Note has been timely and
appropriately adjusted, if such adjustment is required, and the respective
Mortgagor timely and appropriately advised. All such adjustments have been
made
in compliance with applicable law and in accordance with the terms of the
Mortgage Loan documents.
(t) Such
Mortgage Loan was originated by (i) the Seller, (ii) a savings and
loan association, savings bank, commercial bank, credit union, insurance
company
or similar institution that is supervised and examined by a Federal or state
authority, or (iii) a
mortgagee
approved
by the Secretary of HUD
pursuant to Section 203 or 211 of the National Housing Act.
17
(u) Principal
payments on such Mortgage Loan commenced or are required to commence no more
than two months after funds were disbursed in connection with such Mortgage
Loan. Unless such Mortgage Loan is subject to negative amortization as indicated
on the related Mortgage Loan Schedule, the Mortgage Note requires a Monthly
Payment which is sufficient to fully amortize the original principal balance
over the remaining term thereof and to pay interest at the Mortgage Interest
Rate.
(v) Such
Mortgage Loan is a residential mortgage loan having an original term to maturity
as set forth on the related Mortgage Loan Schedule, and if no such term is
specified in the related Mortgage Loan Schedule, the term to maturity does
not
exceed forty years, with interest payable in arrears on the first day of
each
month, or such other day of the month as may be noted on the related Mortgage
Loan Schedule. If such Mortgage Loan is an ARM Loan, the Mortgage Interest
Rate
is subject to adjustment periodically on each Interest Rate Adjustment Date
to a
new Mortgage Interest Rate (rounded as provided in the related Mortgage Note)
equal to the then current Index plus the Gross Margin as specified on the
related Mortgage Note, subject to the Initial Rate Cap (if applicable), Maximum
Mortgage Interest Rate, the Minimum Mortgage Interest Rate, the Interest
Rate
Increase Maximum and the Interest Rate Decrease Maximum, in each case if
and to
the extent specified in the related Mortgage Loan Schedule.
(w) The
Mortgage Note is not and has not been secured by any collateral, pledged
account
or other security, except the lien of the Mortgage.
(x) The
Mortgage contains customary and enforceable provisions which render the rights
and remedies of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee’s sale and
(ii) otherwise by judicial foreclosure. There is no homestead, dower,
curtesy or other exemption or right available to the Mortgagor or any other
Person which would interfere with the right to sell the Mortgaged Property
at a
trustee’s sale or the right to foreclose the Mortgage. The Mortgage or Mortgage
Note contains a provision that is, to the extent not prohibited by federal
or
state law, enforceable and that provides for the acceleration of the payment
of
the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent
of
the mortgagee thereunder. The Mortgagor has not notified the Seller and the
Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Soldiers and Sailors Civil Relief Act of 1940.
(y) If
the
Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable
law to serve as such, has been properly designated and currently so serves
and
is named in such Mortgage, and no fees or expenses are or shall become payable
by the Purchaser to the trustee under the deed of trust, except in connection
with a trustee’s sale after default by the Mortgagor.
(z) The
Mortgaged Property consists of (x) a single parcel of real property
separately assessed for tax purposes, upon which is erected a detached or
an
attached one-to-four-family residence, an individual condominium or an
individual unit in a planned unit development or (y) in the case of a
Cooperative Loan, the related Coop Ownership Interests, in each case that
is in
compliance with Seller’s applicable requirements. Such Mortgaged Property is not
(i) a property held in trust (other than a revocable inter vivos trust that
is in compliance with Xxxxxx Mae’s requirements applicable to Seller, or, if the
Mortgaged Property is located in Illinois, an Illinois land trust), (ii)
a
mobile home or manufactured home, or (iii) a recreational vehicle. Such
Mortgage Loan is not considered an agricultural loan. The related Mortgaged
Property does not consist of a log home, earthen home, underground home or
a
home which is situated on more than twenty acres of property. To the Seller’s
knowledge, no portion of the related Mortgaged Property is being used for
commercial purposes.
18
(aa) The
Loan-to-Value Ratio of such Mortgage Loan at the time of origination was
not
greater than the Loan-to-Value Ratio set forth in the related Mortgage Loan
Schedule, and if no such percentage is specified, not greater than 95%. If
such
Mortgage Loan had at the time of origination a Loan-to-Value Ratio in excess
of
80%, unless otherwise specified in the related Commitment Letter, such Mortgage
Loan is subject to a Primary Mortgage Insurance Policy. All provisions of
such
Primary Mortgage Insurance Policy have been and are being complied with,
such
policy is in full force and effect, and all premiums due thereunder have
been
paid. No Mortgage Loan requires payment of such premiums, in whole or in
part,
by the Purchaser. No action has been taken and no event has occurred that
has,
or shall result in the exclusion from, denial of, or defense to coverage.
Any
Mortgage Loan subject to a Primary Mortgage Insurance Policy obligates the
Mortgagor to maintain the Primary Mortgage Insurance Policy and to pay all
related premiums and charges. The Mortgage Interest Rate for the Mortgage
Loan
as set forth on the Mortgage Loan Schedule is net of any such insurance premium.
None of the Mortgage Loans are covered by a “lender-paid” Primary Mortgage
Insurance Policy.
(bb) Such
Mortgage Loan was underwritten generally
in
accordance with the underwriting guidelines of the Seller in effect at the
time
such Mortgage Loan was originated.
(cc) There
exist no deficiencies in excess of $1000 with respect to escrow deposits
and
payments, if such are required, for which customary arrangements for repayment
thereof have not been made or which the Seller expects not to be cured, and
no
escrow deposits or payments of other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note.
(dd) Such
Mortgage Loan does not have a shared appreciation feature or other contingent
interest feature, and such Mortgage Loan does not involve buydowns, balloons,
timeshares or graduated payments. If such Mortgage Loan is an ARM Loan, it
is
not convertible to a Mortgage Loan with a fixed Mortgage Interest Rate, unless
otherwise indicated in the related Mortgage Loan Schedule.
(ee) The
origination, servicing and collection practices used with respect to such
Mortgage Loan (including without limitation, the establishment, maintenance
and
servicing of the Escrow Accounts, if any), have been, in all material respects,
in accordance with applicable laws and regulations, the terms of the Mortgage
Loan documents and Acceptable Servicing Procedures. All escrow payments have
been collected in all material respects in compliance with applicable law,
Acceptable Servicing Procedures and the provisions of the Mortgage Loan
documents. If such Mortgage Loan is the subject of an escrow, escrow of funds
is
not prohibited by applicable law and has been established in an amount
sufficient to pay for every escrowed item that remains unpaid and has been
assessed but is not yet due and payable. Any Escrow Account interest required
to
be paid pursuant to applicable law has been properly paid and
credited.
19
(ff) The
appraisal report with respect to the Mortgaged Property contained in the
Credit
File was made in accordance with the relevant provisions of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as in effect on
the
date such Mortgage Loan was originated and was signed by a qualified appraiser,
who met the requirements of the Seller’s appraisal policies and procedures, who
had no interest, direct or indirect, in the Mortgaged Property or in any
loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of such application and who otherwise meets the
requirements of Seller.
(gg) No
Mortgage Loan is a “high cost” loan as defined under the Home Ownership and
Equity Protection Act of 1994 or under any federal, state or local law
applicable to the originating lender.
(hh) Unless
otherwise stated in the related Mortgage Loan Schedule, if such Mortgage
Loan is
an ARM Loan, it does not have an interest rate step-down feature or similar
feature that would result in a downwards adjustment to the Mortgage Interest
Rate, the Gross Margin or the Index as a result of the related Mortgagor’s
payment method or payment history (e.g., no downwards adjustment in return
for
allowing the automatic withdrawal of funds from the related Mortgagor’s bank
account to make the Monthly Payments on such Mortgage Loan, or for making
payments when due on such Mortgage Loan).
(ii) No
misrepresentation or fraud has taken place on the part of the Seller, the
Mortgagor or any third party originator of such Mortgage Loan, or to the
Seller’s knowledge, any other Person, including without limitation, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan.
(jj) The
Mortgaged Property is lawfully occupied under applicable law and, at the
time of
origination of such Mortgage Loan, all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Mortgaged Property (and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy) were made or obtained
from the appropriate authorities.
(kk) The
Seller has no knowledge of any circumstances or condition existing as of
the
related Closing Date with respect to the Mortgage, the Mortgaged Property,
the
Mortgagor or the Mortgagor’s credit standing that can reasonably be expected to
cause the Mortgage Loan to be an unacceptable investment as of such Closing
Date.
(ll) To
the
Seller’s knowledge, the Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards including,
without limitation, asbestos, and neither the Seller nor, to the Seller’s
knowledge, the related Mortgagor, has received any notice of any violation
or
potential violation of such law.
20
(mm) Such
Mortgage Loan was selected from among the outstanding mortgage loans of the
same
type in the Seller’s portfolio on the related Closing Date and such selection
was not made in a manner so as to affect adversely the interests of the
Purchaser.
(nn) Interest
on each Mortgage Loan is calculated on the basis of a 360-day year consisting
of
twelve 30-day months.
(oo) If
such
Mortgage Loan is a Cooperative Loan, the security instruments create a valid,
enforceable and subsisting first priority security interest in the related
cooperative shares securing the related cooperative note, subject only to
(x) the lien of the related cooperative for unpaid assessments representing
the Mortgagor’s pro rata share of payments for a blanket mortgage, if any,
current and future real property taxes, insurance premiums, maintenance fees
and
other assessments to which like collateral is commonly subject and (y) other
matters to which like collateral is commonly subject and which do not materially
interfere with the benefits of the security intended to be provided; provided,
however, that the related proprietary lease for the Cooperative Apartment
may be
subordinated or otherwise subject to the lien of a mortgage on the cooperative
building.
(pp) If
such
Mortgage Loan is a Cooperative Loan, a search for filings of financing
statements has been made by a party competent to make the same, which party
is
acceptable to Seller in accordance with its underwriting guidelines and is
qualified to do business in the jurisdiction where the cooperative unit is
located; and such search did not disclose any lien or security interest that
would materially and adversely affect the Cooperative Loan.
(qq) If
such
Mortgage Loan is a Cooperative Loan, the cooperative corporation that owns
title
to the related Cooperative Apartment is a “cooperative housing corporation”
within the meaning of Section 216 of the Code, and is in material compliance
with applicable laws that, if not complied with, could have a material adverse
effect on the Mortgaged Property.
(rr) If
such
Mortgage Loan is a Cooperative Loan: (i) the term of the related
proprietary lease or occupancy agreement is longer than the term of the
Cooperative Loan, (ii) there is no provision in such proprietary lease or
occupancy agreement which requires the Mortgagor to offer for sale the
cooperative shares owned by such Mortgagor first to the Cooperative and
(iii) there is no prohibition against pledging the shares of the
cooperative corporation or assigning the cooperative lease.
(ss) To
the
Seller’s knowledge, none of the proceeds of such Mortgage Loan were used to
finance single premium credit life insurance policies.
Section
3.2. Seller
Representations
Each
of
the Sellers hereby, severally and not jointly, represents and warrants to
the
Purchaser as to such Seller as of the Initial Closing Date and each Closing
Date
on which such Seller sells Mortgage Loans hereunder, and with respect to
the
Mortgage Loans sold by such Seller, as of the related Closing Date:
(a) If
the
Seller is Washington Mutual Bank, FA, the Seller is a federally chartered
savings association, duly organized, validly existing and in good standing
under
the laws of the United States. If the Seller is Washington Mutual Bank fsb,
the
Seller is a savings bank, duly organized, validly existing and in good standing
under the laws of the United States. If the Seller is Washington Mutual Bank,
the Seller is a Washington state chartered stock savings bank, duly organized,
validly existing and in good standing under the laws of the State of
Washington.
21
(b) The
Seller has the corporate power and authority to hold each Mortgage Loan,
to sell
each Mortgage Loan, to enter into, execute and deliver this Agreement, the
Term
Sheet and all documents and instruments executed and delivered pursuant hereto
and to perform its obligations in accordance therewith. The execution, delivery
and performance of this Agreement by the Seller and the consummation of the
transactions contemplated hereby, including, without limitation, the repurchase
obligations hereinafter contained, have been duly and validly authorized.
This
Agreement, the Term Sheet and all other documents and instruments contemplated
hereby, in each case assuming due authorization, execution and delivery by
the
Purchaser, evidence the valid, binding and enforceable obligations of the
Seller, subject as to enforcement, (i) to bankruptcy, insolvency,
receivership, conservatorship, reorganization, arrangement, moratorium, and
other laws of general applicability relating to or affecting creditor’s rights
and (ii) to general principles of equity, whether such enforcement is
sought in a proceeding in equity or at law. All requisite corporate action
has
been taken by the Seller to make this Agreement valid and binding upon the
Seller in accordance with its terms.
(c) No
consent, approval, authorization, or order of any court or governmental agency
or body relating to the transactions contemplated by this Agreement and the
transfer of legal title to the Mortgage Loans to the Purchaser, is required
as
to the Seller or, if required, such consent, approval, authorization, or
order
has been or shall, prior to the Effective Date, be obtained, except for any
recordations of Assignments of the Mortgages to or for the benefit of the
Purchaser pursuant to this Agreement.
(d) The
consummation of the transactions contemplated by this Agreement, including
without limitation the transfer and assignment of the Mortgage Loans to or
for
the benefit of the Purchaser pursuant to this Agreement and the fulfillment
of
or compliance with the terms and conditions of this Agreement, are in the
ordinary course of business of the Seller and shall not (i) result in the
breach of any term or provision of the charter or by-laws of the Seller,
(ii) result in the breach of any term or provision of, or conflict with or
constitute a default under, or result in the acceleration of any obligation
under, any material agreement, indenture, loan or credit agreement or other
instrument to which the Seller or its property is subject, or (iii) result
in the violation of any law, rule, regulation, order, judgment, or decree
to
which the Seller or its property is subject.
(e) There
is
no action, suit, proceeding or investigation pending or, to the best of the
Seller’s knowledge, threatened against the Seller which, either in any one
instance or in the aggregate, is likely (in the Seller’s judgment) to
draw
into
question the validity of this Agreement or the Mortgage Loans, or of any
action
taken or to be taken in connection with the obligations of the Seller
contemplated herein or therein, or which would be likely to impair materially
the ability of the Seller to perform its obligations hereunder or
thereunder.
22
(f) The
Servicer is an approved servicer of residential mortgage loans for Xxxxxx
Xxx
and Xxxxxxx Mac, in good standing, with such facilities, procedures and
personnel necessary for the sound servicing of such mortgage loans. No event
has
occurred, including but not limited to, a change in insurance coverage, which
would make Servicer unable to comply with eligibility requirements of
Xxxxxx
Mae or Xxxxxxx Mac.
(g) The
Seller is a HUD approved mortgagee pursuant to Section 203
of
the National Housing Act. No event has occurred, including but not limited
to,
a change
in insurance coverage, which would make the
Seller
unable to comply with eligibility
requirements of
HUD.
Section
3.3. Repurchase
and Substitution
(a) It
is
understood and agreed that the representations and warranties set forth in
Sections 3.1 and 3.2 shall survive the sale of Mortgage Loans by each Seller
to
the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or Assignment
of
Mortgage or the examination of any Collateral File or Credit File.
(b) Upon
discovery by a Seller (the “Breaching
Seller”)
or the
Purchaser of a breach of any of the representations and warranties set forth
in
Sections 3.1 or 3.2 made by the Breaching Seller that materially and adversely
affects the value of any Mortgage Loan or the interest of the Purchaser in
any
Mortgage Loan sold by the Breaching Seller hereunder (or, in the case of
the
representations and warranties set forth in Section 3.2, the value of the
Mortgage Loans or the interest of the Purchaser in the Mortgage Loans sold
by
the Breaching Seller hereunder), the party discovering such breach shall
give
prompt written notice to the other. The Breaching Seller shall either
(A) cure
in
all material respects any such breach or defect within 90 days of the earlier
of
either discovery by or notice to the Breaching Seller of such breach or defect,
or
(B)
in the
case of a breach of a representation and warranty set forth in Section 3.1,
repurchase the affected Mortgage Loan(s), and, in the case of a breach of
a
representation and warranty set forth in Section 3.2, repurchase either
(1) all of the Mortgage Loans or (2) such of the Mortgage Loans
selected by the Purchaser so that, after such repurchase, such breach or
defect
is cured in all material respects. Any such repurchase shall be at a price
equal
to the applicable Repurchase Price, shall occur on the next Monthly Remittance
Date and shall be accomplished by deposit in the Account of the amount of
the
Repurchase Price pursuant to Section 2.4 of the Servicing Agreement.
Notwithstanding the foregoing, if the Breaching Seller discovers or receives
notice of any such breach or defect, and if the affected Mortgage Loan has
not
been subject to a Pass-Through Transfer, the Breaching Seller may remove
any
such Mortgage Loan (a “Deleted
Mortgage Loan”),
rather than repurchase any such Mortgage Loan as provided above, and substitute
in its place a Qualified Substitute Mortgage Loan(s). If the Breaching Seller
has
no
Qualified Substitute Mortgage Loan(s), then the Breaching Seller shall
repurchase the Mortgage
Loan
or
Mortgage Loans, as the case may be, in the manner provided in this
Section 3.3(b).
23
(c) For
each
of the Qualified Substitute Mortgage Loans substituted for a Deleted Mortgage
Loan, the Breaching Seller shall deliver to the Custodian the documents
specified in Section 2.2(a), with the Mortgage Note endorsed as required by
Section 2.2(a) and, where applicable, original documents having evidence of
recording thereon. The Breaching Seller shall also take such actions with
respect to the documents pertaining to each such Qualified Substitute Mortgage
Loan as are required to be taken pursuant to Section 2.2(d) with respect
to the
Mortgage Loans originally subject to this Agreement. For purposes of applying
the requirements of Section 2.2(d) to any Qualified Substitute Mortgage Loan,
references in such Section to the related Closing Date shall be deemed to
be
references to the applicable date of substitution of such Qualified Substitute
Mortgage Loan. The Breaching Seller shall deposit in the Account the Monthly
Payment due on each Qualified Substitute Mortgage Loan in the month following
the date of such substitution (with the interest portion thereof adjusted
to the
applicable Net Rate), and the Monthly Payment due with respect to such Qualified
Substitute Mortgage Loan in the month of substitution
shall be retained by the Breaching Seller. For the month of substitution,
distributions to the Purchaser shall include the Monthly Payment due on such
Deleted Mortgage Loan in the month of substitution, and the Breaching Seller
shall thereafter be entitled to retain all amounts subsequently received
by the
Breaching Seller in respect of such Deleted Mortgage Loan. The Breaching
Seller
shall amend the related Mortgage Loan Schedule to reflect the removal of
such Deleted Mortgage Loan from the terms of this Agreement and the substitution
of the Qualified Substitute Mortgage Loan(s) and shall give written notice
to
the Purchaser that such substitution has taken place, which notice shall
have
attached thereto a copy of such amended Mortgage Loan Schedule in hard copy
or
“read-only” electronic format (as reasonably acceptable to such Breaching Seller
and the Purchaser). Upon such substitution, each such Qualified Substitute
Mortgage Loan shall be subject to the terms of this Agreement in all respects,
and the Breaching Seller shall make and shall be deemed to have made, with
respect to such Qualified Substitute Mortgage Loan(s), as of the date of
substitution, the representations and warranties set forth in Sections 3.1
and
3.2 (and, for purposes of applying such representations and warranties to
each
such Qualified Substitute Mortgage Loan, references in such Sections to the
related Closing Date shall be deemed to be references to such date of
substitution of such Qualified Substitute Mortgage Loan).
(d) The
Purchaser shall immediately take all steps necessary to effect the reconveyance
of any repurchased Mortgage Loan or Deleted Mortgage Loan, including all
documentation with respect thereto, to the Breaching Seller. The Breaching
Seller shall pay all costs and expenses incurred in connection with the
repurchase of any Mortgage Loan and the substitution for any Deleted Mortgage
Loan. If, in accordance with Section 3.3(b), a Breaching Seller repurchases
any MERS Loan or substitutes a Qualified Substitute Mortgage Loan for any
MERS
Loan, the Servicer shall be authorized to (i) cause the MERS® System to reflect
such repurchase or substitution, as the case may be, or (ii) cause MERS to
remove the repurchased or replaced Mortgage Loan from registration on the
MERS®
System and execute and deliver an Assignment of Mortgage to reflect the transfer
of such Mortgage Loan to the Breaching Seller or its designee. The Breaching
Seller shall bear any and all fees of MERS relating to the actions authorized
under this Section 3.3(d).
24
(e) For
any
month in which a Breaching Seller substitutes one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, such Breaching Seller
shall determine the amount, if any, by which the aggregate outstanding principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Unpaid Principal Balance of all such
Deleted Mortgage Loans (after application of scheduled principal payments
due in
the month of substitution). The amount of such shortfall shall be distributed
by
the Breaching Seller on the Monthly Remittance Date following the date of
the
substitution pursuant to Section 3.1 of the Servicing Agreement. Pursuant
to Section 2.4 of the Servicing Agreement, the Breaching Seller shall deposit
from its own funds (and without any right of reimbursement therefor) into
the
Account an amount equal to the amount of such shortfall.
(f) It
is
understood and agreed that the obligations of a Breaching Seller set forth
in
this Section 3.3 constitute the sole remedies available to the Purchaser
respecting a breach of the representations and warranties by such Breaching
Seller set forth in Section 3.1 and Section 3.2.
(g) Any
cause
of action against a Breaching Seller relating to or arising out of the breach
of
any representation and warranty made by such Breaching Seller in Sections
3.1
and 3.2 shall accrue as to any Mortgage Loan only upon (i) discovery of
such breach by the Purchaser or notice thereof by such Breaching Seller to
the
Purchaser, (ii) failure by such Breaching Seller to cure such breach or
repurchase or substitute a Qualified Substitute Mortgage Loan(s) for such
Mortgage Loan as specified above and (iii) demand upon such Breaching
Seller by the Purchaser for all amounts payable in respect of such Mortgage
Loan.
(h) In
addition to the repurchase obligations set forth above in this Section 3.3,
each Seller shall also be required to repurchase, in the manner provided
in
Section 3.3(b) but without any right of such Seller to cure, any Mortgage
Loan sold by such Seller hereunder that is paid in full on or prior to the
related Cut-off Date. Any such Mortgage Loan shall be repurchased by such
Seller
at the Repurchase Price.
(i) (A)
Each
Seller agrees to indemnify the Purchaser and hold it harmless from and against
any and all losses, damages, penalties, fines, forfeitures, legal fees and
related costs, judgments, and any other costs, fees and expenses resulting
from
the defense of any claim against the Purchaser by a third party in any way
related to any act or omission on the part of such Seller or any other person
or
entity in the origination, processing or funding of any Mortgage Loan prior
to
the related Closing Date, provided that such act or omission constitutes
a
breach of such Seller’s representations, warranties, or covenants under this
Agreement. Notwithstanding anything to the contrary in this Agreement, in
no
event shall any Seller have any liability for any indirect, special or
consequential damages, losses, costs or expenses incurred by the
Purchaser.
(B)
The
related Seller or the Purchaser, as applicable, shall promptly provide notice
to
the Purchaser or the related Seller, as applicable, if a claim is made by
a
third party with respect to this Agreement or the Mortgage Loans. The applicable
Seller shall assume (with counsel reasonably satisfactory to the Purchaser)
the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any final
judgment or decree that may be entered against it or the Purchaser in respect
of
such claim and from which such Seller may not appeal or otherwise further
contest. The related Seller’s failure to so notify the Purchaser shall not limit
its obligations hereunder, and the Purchaser’s failure to notify the related
Seller shall not relieve such Seller from any liability that such Seller
may
have to the Purchaser otherwise than on account of this indemnity. Each Seller
agrees that it will not enter into any settlement of any such claim without
the
consent of the Purchaser (which consent shall not be unreasonably withheld
or
delayed) unless such settlement includes an unconditional release of the
Purchaser from all liabilities that is the subject matter of such claim.
In
addition to the obligations of each Seller set forth in this section, the
Purchaser may, subject to the limitation set forth in Section 3.3(f) with
respect to the breach of a representation and warranty, pursue any and all
remedies otherwise available at law or in equity, including, but not limited
to,
the right to seek damages. The provisions of this Section 3.3(i) shall survive
termination of this Agreement.
25
ARTICLE
4.
COVENANTS
Section
4.1. Cooperation
Each
of
the Sellers and the Purchaser shall cooperate fully with each other and their
respective counsel and other representatives and advisors in connection with
the
steps required to be taken as part of their respective obligations under
this
Agreement.
Section
4.2. Representations,
Warranties, Covenants and Indemnities
Each
representation, warranty, covenant and indemnity made by a Seller in this
Agreement as of each Closing Date shall survive the execution of this Agreement
and the expiration or termination of this Agreement.
Section
4.3. Delivery
of Documents
On
the
dates specified herein, each party shall deliver to the appropriate persons
specified herein all documents and instruments provided for
hereunder.
Section
4.4. Consents
and Approvals
Each
Seller shall obtain, at its sole cost and expense, prior to each Closing
Date,
all consents and approvals required by law or pursuant to contract to consummate
the transactions contemplated hereby. All such consents shall be obtained
without any cost or expense to the Purchaser and shall be obtained without
any
modification in the terms of any of the agreements relating to the Mortgage
Loans or the imposition of any provisions or conditions on the
Purchaser.
26
Section
4.5. Confidentiality
(a) Each
party understands that certain information that has been furnished and shall
be
furnished in connection with the transactions contemplated under this Agreement
is confidential and proprietary, and each party agrees that, with respect
to
such information that is marked or identified as confidential or proprietary,
or
required by applicable law (including, without limitation, the
Xxxxx-Xxxxx-Xxxxxx Act and the regulations promulgated thereunder) to be
kept
confidential, such party shall maintain the confidentiality of such information
and shall not, without the written consent of the party furnishing such
information, disclose it to third parties or use it except in connection
with
the transactions contemplated by this Agreement, as permitted by applicable
law
or as permitted in Section 4.5(b) below. The parties agree that the following
items, except as provided in Section 4.5(b) below, shall be deemed confidential
for purposes of this Section 4.5: (a) each completed Term Sheet and (b)
each Commitment Letter. The parties agree that the following items shall
not be
deemed confidential for purposes of this Section 4.5, unless otherwise
required by applicable law: (i) this Agreement (except as provided above),
(ii)
each Mortgage Loan Schedule, (iii) the underwriting guidelines of each Seller,
(iv) information generally known in the industry concerning a party, (v)
information disclosed to the receiving party by a third party and (vi)
information that is required to be disclosed by law, or regulatory or judicial
process.
(b) Notwithstanding
any other provision of this Agreement (including the confidentiality provision
in Section 4.5(a)), each Seller, the Purchaser and the Servicer (and each
employee, representative or other agent of any of the foregoing) may disclose
to
any and all persons, without limitation of any kind, the “tax treatment” and
“tax structure” (as those terms are defined in Treasury Regulations Section
1.6011-4(c)) of all transactions covered by this Agreement and all materials
of
any kind (including opinions or other tax analyses) that are provided to
any of
the foregoing parties relating to such tax treatment and tax
structure.
Section
4.6. Servicing
Each
of
Washington Mutual Bank and Washington Mutual Bank fsb, for purposes of the
servicing of all Mortgage Loans sold by it hereunder, hereby appoints Washington
Mutual Bank, FA as its agent and subservicer for purposes of acting as Servicer
and servicing such Mortgage Loans on behalf of the Purchaser pursuant
to
the
Servicing Agreement. Each
of
the Sellers shall cause
the
Servicing Agreement
to be
executed by the Servicer on or before the Initial Closing Date.
ARTICLE
5.
CONDITIONS
TO PURCHASE
The
obligations of the Purchaser to purchase any Mortgage Loans on any Closing
Date
are subject to the satisfaction, as applicable, prior to or on the Initial
Closing Date and on such Closing Date (or on such other date as expressly
provided for herein) of the following conditions, any of which may be waived
in
writing by Purchaser:
27
Section
5.1. Effective
Date and Closing Date Documents
On
the
Effective Date, the Purchaser shall have received the Effective Date Documents
duly executed by all signatories thereto. At each subsequent Closing Date,
the
Purchaser and the applicable Sellers each shall furnish to the other a fully
executed counterpart of the Term Sheet.
Section
5.2. Correctness
of Representations and Warranties
All
of
the representations and warranties of the applicable Seller or Sellers under
this Agreement shall be true and correct as of such Closing Date (except
as
otherwise expressly provided for herein), and no event shall have occurred
which, with notice or the passage of time, would constitute a default under
this
Agreement.
Section
5.3. Compliance
With Conditions
All
other
terms and conditions of this Agreement to be performed by the applicable
Seller
or Sellers on or prior to such Closing Date (or such other date as expressly
provided for herein) shall have been duly complied with and performed in
all
respects.
ARTICLE
6.
PASS-THROUGH
AND WHOLE LOAN TRANSFERS
Section
6.1. Pass-Through
Transfers or Whole-Loan Transfers
(a) Upon
15
days’ prior written notice of intent to the applicable Seller(s) and the
Servicer, the Purchaser may, at its sole option, effect one or more Whole
Loan
Transfers or Pass-Through Transfers with respect to some or all of the Mortgage
Loans in a Loan Pool purchased on any Closing Date, retaining the Servicer
as
the servicer or subservicer if a Master Servicer is employed as provided
in
Section 6.2; provided, however, that neither the Purchaser nor any of its
permitted assignees may effect a Whole Loan Transfer or a Pass-Through Transfer
with respect to Mortgage Loans in any Loan Pool if as a result: (i) more
than
three investors would own Mortgage Loans in such Loan Pool at any one time
(unless otherwise stated in the related Commitment Letter), (ii) any single
investor would own Mortgage Loans from such Loan Pool having an aggregate
Unpaid
Principal Balance immediately after such Whole Loan Transfer or Pass-Through
Transfer of less than $5,000,000, (iii) the applicable Seller(s) and the
Servicer are not provided with initial drafts of all documents for which
such
Sellers and Servicer are requested to become a party in connection with such
Whole Loan Transfer or Pass-Through Transfer at least 10 days prior to the
related settlement date (the “Subsequent
Transfer Settlement Date”),
(iv)
a final list of the Mortgage Loans subject to such Whole Loan Transfer or
Pass-Through Transfer is not provided to the Servicer at least 2 Business
Days
prior to the related Subsequent Transfer Settlement Date, (v) any Mortgage
Loan
is subject to more than one Whole Loan Transfer or Pass-Through Transfer
in any
given Due Period, or (vi) the related Subsequent Transfer Settlement Date
occurs
on or prior to the related Servicing Cut-off Date.
28
(b) Purchaser
shall reimburse each Seller for all reasonable out-of-pocket expenses, including
attorneys’ fees, incurred by such Seller in connection with each Whole Loan
Transfer or Pass-Through Transfer.
(c) In
connection with each Whole Loan Transfer or Pass-Through Transfer permitted
under this Section 6.1, each of the Sellers, as applicable,
shall:
(i) provide
the Purchaser with information and appropriate verification of information
in
its possession or control as may reasonably be necessary in order to effect
such
Whole Loan Transfer or Pass-Through Transfer (and, to the extent any such
information is in the possession or control of any third party, use commercially
reasonable efforts to cause such third party to provide such information);
and
(ii) cooperate
with all reasonable requests and due diligence procedures not otherwise
addressed herein.
(d) With
respect to any Whole Loan Transfer or Pass-Through Transfer permitted under
this
Section 6.1 in which a prospectus, prospectus supplement or other
disclosure document (a “Disclosure
Document”)
is
prepared in connection therewith, and in which a substantial portion of the
mortgage loans in the related transaction consist of Mortgage Loans, each
of the
Sellers, as applicable, shall:
(i) provide
for inclusion as part of such Disclosure Document (A) the regulatory status
of
such Seller and its affiliates, (B) an update of the characteristics set
forth
on the Mortgage Loan Schedule for the applicable Mortgage Loans sold by such
Seller, (C) the origination and underwriting criteria related to the applicable
Mortgage Loans sold by such Seller and (D) delinquency and foreclosure
information of the type typically provided by such Seller in connection with
mortgage loans originated by such Seller and securitized by third parties
(the
information referred to in this sentence, in the form provided to Purchaser,
being “Seller’s Information”); and
(ii) execute
and deliver an Indemnification Agreement in substantially the form attached
hereto as Exhibit C.
(e) With
respect to any Pass-Through Transfer permitted under this Section 6.1 in
which all or substantially all of the mortgage loans in the related transaction
consist of Mortgage Loans, each of the applicable Sellers shall:
(i) execute
and deliver a pooling and servicing agreement containing terms and conditions
that are consistent with the terms and conditions set forth herein and in
the
Servicing Agreement and that are customary for public, rated transactions
for
the issuance of pass-through certificates backed by mortgage loans similar
to
the Mortgage Loans included in such Pass-Through Transfer, provided, that
(A)
any servicing reporting requirements must be consistent with the standard
practices of Washington Mutual Bank, FA and (B) each of the parties to such
pooling and servicing agreement negotiates in good faith any terms or conditions
in such pooling and servicing agreement not specifically referenced or provided
for under this Agreement or the Servicing Agreement;
29
(ii) provide
Purchaser with opinions of counsel as to such Seller’s corporate authority and
the enforceability of the pooling and servicing agreement against such Seller,
audit letters addressing the delinquency and foreclosure statistics of
Washington Mutual Bank, FA and certificates from public officials, each as
such
Seller shall reasonably determine to be necessary to effect such Pass-Through
Transfer; and
(iii) upon
the
reasonable request of the Purchaser, execute and deliver a reconstituted
sale
agreement pursuant to which such Seller shall make the representations and
warranties set forth on Exhibit D
with
respect to the applicable Mortgage Loans, effective as of the date of such
reconstituted sale agreement, provided that (A) the related Mortgage Loans
have
been transferred by the Purchaser to a third party within six months of the
related Closing Date, (B) the representations and warranties made in such
reconstituted sale agreement shall supercede and replace all representations
and
warranties made in Section 3.1 hereof with respect to such Mortgage Loans
and (C) in no event shall any Seller be obligated to make any representation
or
warranty regarding any Mortgage Loan that is untrue.
(f) In
connection with each Pass-Through Transfer, each of the Sellers, as applicable,
shall provide Seller’s Information (as described in paragraph (d)(i) of this
Section) and shall, severally and not jointly, (i) indemnify and hold harmless
the Purchaser and each Person, if any, who “controls” the Purchaser within the
meaning of the Securities Act of 1933, as amended (an “Indemnified
Party”),
against any losses, claims, damages or liabilities resulting from the defense
of
any claim against such Indemnified Party by a third party, under the Securities
Act of 1933, as amended, or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon
any untrue statement of any material fact contained in Seller’s Information
provided by such Seller and included in a Disclosure Document, and (ii)
reimburse each Indemnified Party for any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such loss, claim, damage, liability or action. Notwithstanding anything
to
the contrary in this paragraph (f), in no event shall any Seller have any
liability for any indirect, special or consequential damages, losses, costs
or
expenses incurred by an Indemnified Party.
(g) With
respect to any Whole Loan Transfer or Pass-Through Transfer in which a
Disclosure Document is prepared in connection therewith, the Purchaser
shall:
(i) provide
each Seller with all drafts of the Seller’s Information when produced and revise
the Seller’s Information in accordance with such Seller’s comments to correct
any information therein at the Purchaser’s cost; and
(ii) (A)
indemnify and hold harmless each of the Sellers against any losses, claims,
damages or liabilities to which such Seller may become subject, under the
Securities Act of 1933, as amended, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) (x) arise
out of
or are based upon any untrue statement of any material fact contained in
such
Disclosure Document (other than an untrue statement of material fact contained
in the Seller’s Information), or (y) arise out of or are based upon the omission
to state in such Disclosure Document a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (unless the material
fact omitted would constitute Seller’s Information) and (B) reimburse each
Seller for any legal or other expenses reasonably incurred by such Seller
in
connection with investigating or defending any such loss, claim, damage,
liability or action.
30
Section
6.2. Designation
of a Master Servicer
Notwithstanding
anything to the contrary contained in this Agreement, but subject to the
terms
of the Servicing Agreement, the Purchaser shall have the right, in its sole
discretion, upon 30 days’ prior written notice to the Sellers, to appoint and
designate a master servicer (the “Master
Servicer”),
as
master servicer of any Mortgage Loans. Upon such appointment, the Sellers
shall
correspond and communicate solely with the Master Servicer, as if the Master
Servicer were the “Purchaser” hereunder. Furthermore, the Master Servicer shall
have all rights as designee of the Purchaser to enforce the representations
and
warranties, and all other covenants and conditions set forth in this Agreement,
and the Sellers shall follow and shall be entitled to rely on the instructions
of the Master Servicer under this Agreement as if such instructions were
the
instructions of the Purchaser. The Master Servicer shall have the right to
give
any waivers or consents required or allowed under this Agreement on behalf
of
the Purchaser, and the Sellers shall have the right to rely on all such waivers
and consents. The Master Servicer shall be empowered to enter into and execute
and deliver any amendments or modifications to this Agreement as the Purchaser’s
designee hereunder, and such amendments or modifications shall be binding
upon
the Purchaser as if the Purchaser had executed and delivered the same. Each
of
the Sellers acknowledges that the Purchaser has provided notice that it will
appoint and designate Aurora Loan Services, Inc. as Master Servicer of any
Mortgage Loans. The written notice required pursuant to this Section 6.2
is
deemed to have been satisfied with respect to the appointment of Aurora Loan
Services, Inc.
ARTICLE
7.
MISCELLANEOUS
PROVISIONS
Section
7.1. Amendment
This
Agreement may be amended from time to time by the Sellers and the Purchaser
solely by written agreement signed by the Sellers and the
Purchaser.
Section
7.2. Recordation
of Agreement
(a) To
the
extent necessary under applicable law to protect the interests of the Purchaser,
this Agreement or a memorandum thereof is subject to recordation in all
appropriate public offices for real property records in all the counties
and
other comparable jurisdictions in which any or all of the Mortgaged Properties
are situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Sellers at the Purchaser’s expense upon
direction of the Purchaser.
(b) Each
Seller agrees to execute or cause to be executed such documents and take
or
cause to be taken such actions as may be necessary to effect the intent of
this
Agreement, including without limitation the execution and delivery of
instruments of further assurance and the execution and delivery of such other
documents, and the taking of such other actions as may be reasonably requested
by the Purchaser.
31
Section
7.3. Governing
Law
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York (including Section 5-1401 of the New York General
Obligations Law) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without giving
effect
to conflict of laws principles other than Section 5-1401 of the New York
General Obligations Law.
Section
7.4. General
Interpretive Principles
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(i) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender
herein
shall be deemed to include the other gender;
(ii) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(iii) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs, and other subdivisions of this
Agreement;
(iv) a
reference to a subsection without further reference to a Section is a
reference to such subsection as contained in the same Section in which
the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(v) the
words
“herein,” “hereof,” “hereunder,” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(vi) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
Section
7.5. Reproduction
of Documents
This
Agreement and all documents relating hereto, including (i) consents,
waivers, and modifications which may hereafter be executed, (ii) the
Effective Date Documents, all Commitment Letters, Term Sheets and Mortgage
Loan
Schedules and (iii) financial statements, certificates, and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, microcard, miniature photographic,
or
other similar process. The parties agree that any such reproduction shall
be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not
such
reproduction was made by a party in the regular course of business, and that
any
enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence.
32
Section
7.6. Notices
All
demands, notices, consents, waivers and other communications hereunder shall
be
in writing and shall be deemed to have been duly given upon receipt if
personally delivered, sent by facsimile, mailed by registered mail, postage
prepaid or delivered by a nationally recognized overnight courier, to
(i)
in
the case of the Sellers:
Washington
Mutual Bank, XX
Xxxxxxxxxx
Mutual Bank fsb
Washington
Mutual Bank
0000
Xxxxx Xxxxxx, XXX0000
Xxxxxxx,
Xxxxxxxxxx 00000
Attention:
General Counsel
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
(ii)
in
the case of the Servicer:
Washington
Mutual Bank, FA
00000
Xxxxxxx Xx. (Mail Stop N070205)
Xxxxxxxxxx,
XX 00000
Attention:
Vice President of Investor Reporting
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
or
such
other address as may hereafter be furnished to the Purchaser in writing by
a
Seller or the Servicer, and
(iii)
in
the case of the Purchaser:
Xxxxxx
Brothers Bank, FSB
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxx Head
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
33
or
such
other address as may hereafter be furnished to each of the Sellers and the
Servicer in writing by the Purchaser.
Notwithstanding
the foregoing, any demand, notice, consent, waiver or communication may be
given
by any other means if the parties hereto agree to such alternative means
in
writing.
Section
7.7. Severability
of Provisions
If
any
one or more of the covenants, agreements, provisions, or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Agreement and shall in
no
way affect the validity or enforceability of the other covenants, agreements,
provisions, or terms of this Agreement or the rights of the parties hereunder.
If the invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate in good faith to
develop a structure the economic effect of which is as nearly as possible
the
same as the economic effect of this Agreement without regard to such
invalidity.
Section
7.8. Exhibits
The
exhibits to this Agreement and each of the Commitment Letters are hereby
incorporated and made a part hereof and are an integral part of this
Agreement.
Section
7.9. Counterparts;
Successors and Assigns
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto on separate counterparts, each of which, when so executed,
shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. This Agreement shall inure to the benefit of and
be
binding upon the Sellers and the Purchaser. Notwithstanding the foregoing,
(a)
none of the Sellers shall assign its rights and obligations under this Agreement
without the prior written consent of the Purchaser, which consent shall not
be
unreasonably withheld or delayed and (b) the Purchaser may not assign its
rights
and obligations under this Agreement except (i) as provided in Article 6,
or
(ii) with the prior written consent of the applicable Seller or Sellers,
which
consent shall not be unreasonably withheld or delayed (in which case all
references to the Purchaser herein shall be deemed to include such assignee
or
designee).
Section
7.10. Effect
of Headings
The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.
34
Section
7.11. Other
Agreements Superseded; Entire Agreement
This
Agreement supersedes all prior agreements and understandings (other than
any
Commitment Letter delivered prior to the date hereof) relating to the subject
matter hereof. This Agreement, together with all Commitment Letters and Term
Sheets delivered or entered into pursuant hereto constitute the entire agreement
of the parties with respect to the subject matter hereof.
If any
provision of the Term Sheet conflicts with any provision of the Agreement,
the
Term Sheet shall control. If any provision of this Agreement conflicts with
any
provision of any Commitment Letter, the provisions of this Agreement shall
control.
Section
7.12. Survival
The
representations, warranties, indemnities, covenants and agreements of the
parties provided in this Agreement and the parties’ obligations hereunder shall
survive the execution and delivery and the termination or expiration of this
Agreement.
Section
7.13. Intention
of the Parties
It
is the
intention of the parties that the Purchaser is purchasing, and each Seller
is
selling Mortgage Loans and not a debt instrument of such Seller or other
security. Accordingly, the parties hereto each intend to treat each of the
transactions hereunder for federal income tax purposes as a sale by each
Seller,
as applicable, and a purchase by the Purchaser, of Mortgage Loans. The Purchaser
shall have the right to review the Mortgage Loans and the related Credit
Files
to determine the characteristics of the Mortgage Loans which shall affect
the
federal income tax consequences of owning the Mortgage Loans, and the applicable
Seller or Sellers shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
Section
7.14. Nonsolicitation
Each
Seller covenants and agrees that it shall not take any action to solicit
the
refinancing of any Mortgage Loan following the date hereof or provide
information to any other entity to solicit the refinancing of any Mortgage
Loan;
provided that, the foregoing shall not preclude such Seller or any of its
affiliates from (a) engaging in general solicitations to its customer base,
including by mass mailing or as part of monthly or periodic statements mailed
to
its borrowers or to holders of deposit or other accounts, (b) engaging in
solicitations to the general public, including without limitation by mass
mailing, newspaper, radio, television or other media which are not specifically
directed toward the Mortgagors, (c) engaging in solicitations of optional
insurance or other bank products (not including mortgage loans) (d) refinancing
the Mortgage Loan of any Mortgagor who, without solicitation, contacts a
Seller
to request the refinancing of the related Mortgage Loan, or (e) engaging
in any
action to solicit the refinancing of any Mortgage Loan to the extent such
action
would be permitted under the Xxxxxx Xxx Selling Guide or the Xxxxxx Mae
Servicing Guide.
35
Section
7.15. Costs
Except
as
otherwise provided in Section 2.2(b), each Seller shall pay all costs, fees
and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans sold by such Seller under this Agreement for Seller’s accountants,
attorneys and other service providers.
Section
7.16. Obligations
of the Sellers
The
obligations and liability of each of the Sellers under this Agreement are
several, and no Seller shall be responsible for the obligations of any other
Seller under this Agreement. Each representation, warranty, indemnity and
covenant made by one Seller under the Agreement is made by, or on behalf
of, and
with respect to, that Seller only and not any other Seller.
Section
7.17. Attorneys’
Fees
If
any
party retains an attorney to enforce any of the provisions of this Agreement,
the prevailing party shall be entitled to reasonable attorneys’ fees from the
non-prevailing party (or parties), including, without limitation, fees incurred
in arbitration and in trial and appellate courts, fees incurred without suit,
and all arbitration, court and accounting costs.
[signatures
follow]
36
TO
WITNESS THIS,
the
Sellers and the Purchaser have caused their names to be signed to this Mortgage
Loan Purchase and Sale Agreement by their duly authorized respective officers
as
of the day and year first above written.
|
WASHINGTON
MUTUAL BANK, FA
a
federally chartered savings association
|
||
| |
|
|
| By: | ||
|
Name: Xxxxx
Xxxxxxxx
|
||
|
Title: Senior
Vice President
|
||
|
WASHINGTON
MUTUAL BANK fsb
a
federal savings bank
|
||
| |
|
|
| By: | ||
|
Name: Xxxxx
Xxxxxxxx
|
||
|
Title: Senior
Vice President
|
||
|
WASHINGTON
MUTUAL BANK
a
Washington state chartered stock savings
bank
|
||
| |
|
|
| By: | ||
|
Name: Xxxxx
Xxxxxxxx
|
||
|
Title: Senior
Vice President
|
||
|
XXXXXX
BROTHERS BANK, FSB
a
federal savings bank
|
||
| |
|
|
| By: | ||
|
|
||
| Name: | ||
|
|
||
| Title: | ||
|
|
||
|
STATE
OF WASHINGTON
|
)
|
|
)
ss.
|
|
|
COUNTY
OF KING
|
)
|
This
instrument was acknowledged before me on ______________________, 2003, by
_____________________ as _________________________ of Washington Mutual Bank,
FA.
|
[Print Name] ________________________ |
||
|
NOTARY PUBLIC in and for the State of
Washington, residing at
______________________
|
||
|
My
commission expires
_______________________
|
||
|
STATE
OF WASHINGTON
|
)
|
|
)
ss.
|
|
|
COUNTY
OF KING
|
)
|
This
instrument was acknowledged before me on ______________________, 2003, by
_____________________ as _________________________ of Washington Mutual Bank
fsb.
|
[Print Name] ________________________ |
||
|
NOTARY PUBLIC in and for the State of
Washington, residing at
______________________
|
||
|
My
commission expires
_______________________
|
||
|
STATE
OF WASHINGTON
|
)
|
|
)
ss.
|
|
|
COUNTY
OF KING
|
)
|
This
instrument was acknowledged before me on ______________________, 2003, by
_____________________ as _________________________ of Washington Mutual
Bank.
|
[Print Name] ________________________ |
||
|
NOTARY PUBLIC in and for the State of
Washington, residing at
______________________
|
||
|
My
commission expires
_______________________
|
||
|
STATE
OF WASHINGTON _____________
|
)
|
|
)
ss.
|
|
|
COUNTY
OF KING ___________________
|
)
|
This
instrument was acknowledged before me on ______________________, 2003, by
_____________________ as _________________________ of Xxxxxx Brothers Bank,
FSB.
|
[Print Name] ________________________ |
||
|
NOTARY PUBLIC in and for the State of
____________, residing at
______________________
|
||
|
My
commission expires
_______________________
|
||
EXHIBIT A-1
CONTENTS
OF COLLATERAL FILE
With
respect to each Mortgage Loan, unless otherwise agreed by the applicable
Seller
and the Purchaser, the Collateral File shall include each of the following
items:
A. With
respect to each Mortgage Loan (other than a Cooperative Loan):
|
1.
|
(i)
The original Mortgage Note, endorsed (on the Mortgage Note or an
allonge
attached thereto) “Pay to the order of _______________________, without
recourse,” (or as otherwise specified in the related Commitment Letter),
and signed by facsimile signature in the name of such Seller by
an
authorized officer, with all intervening endorsements showing a
complete,
valid and proper chain of title from the originator of such Mortgage
Loan
to such Seller;
|
(ii)
or a
lost note affidavit, providing indemnification to the holder thereof for
any
losses incurred due to the fact that the original Mortgage Note is missing,
together with a copy of the Mortgage Note.
|
2.
|
The
original Mortgage, with evidence of recording thereon (and in the
case of
a MOM Loan, with evidence of the MIN), or if such Mortgage has
been lost
or if such public recording office retains the original recorded
Mortgage,
a photocopy of such Mortgage certified by such public recording
office to
be a true and complete copy of the original recorded
Mortgage.
|
|
3.
|
Unless
such Mortgage Loan is a MERS Loan, the original Assignment of Mortgage,
from the Seller signed by original signature of an authorized officer,
in
blank (or as otherwise specified in the related Commitment Letter),
which
assignment shall be in form and substance acceptable for recording
(except
for the insertion of the name of the assignee and recording
information).
|
|
4.
|
Unless
such Mortgage Loan is a MOM Loan, originals of all intervening
Assignments
of Mortgage, with evidence of recording thereon, showing a complete
chain
of title from the originator to the Seller (or in the case of a
MERS Loan
other than a MOM Loan showing a complete chain of title from the
originator to MERS), or if any such original intervening Assignment
of
Mortgage is permanently retained by the applicable recording office,
or if
such original Assignment of Mortgage has been lost, a photocopy
of each
such original, certified by the applicable public recording office
to be a
true and complete copy of the
original.
|
A-1-1
|
5.
|
Originals
of all assumption and modification agreements, if any, unless such
originals are unavailable (in which event such Seller shall deliver
to the
Custodian a photocopy of each such original, certified by the Seller
to be
a true and complete copy of the
original).
|
B. With
respect to each Cooperative Loan, as applicable, copies of (1) the proprietary
lease; (2) the security agreement; (3) the assignment of the proprietary
lease,
with all intervening assignments showing a complete chain of title and an
assignment thereof by the applicable Seller; (4) the original stock certificate
evidencing the ownership of the Cooperative Apartment, endorsed or accompanied
by a stock power relating to such stock certificate executed in blank; (5)
a
recognition agreement in form approved by the applicable Seller’s underwriting
guidelines, in substantially the same form as the standard “AZTECH” form; (6)
copies of the financing statement filed by the applicable Seller as secured
party and, if applicable, a filed UCC-3 assignment of the subject security
interest showing a complete chain of title, together with an executed UCC-3
Assignment of such security interest by the applicable Seller in a form
sufficient for filing; and (7) such other documents as are necessary for
the
perfection of a lien against the related Coop Ownership Interests under
applicable law.
X-0-0
XXXXXXX X-0
CONTENTS
OF CREDIT FILE
With
respect to each Mortgage Loan, unless otherwise agreed by the applicable
Seller
and the Purchaser, the Credit File shall include each of the following
items:
|
1.
|
Copy
of survey of the Mortgaged Property, if
available.
|
|
2.
|
Copy
of each instrument necessary to complete identification of any
exception
set forth in the exception schedule in the title policy (i.e.,
map or
plat, restrictions, easements, sewer agreements, home association
declarations, etc.).
|
|
3.
|
Evidence
of a hazard insurance policy and, if required by law, a flood insurance
policy, with extended coverage of the hazard insurance policy.
(Note:
Evidence shall be maintained by the applicable Seller in electronic
form.
The applicable Seller shall produce a paper copy of such evidence
upon
request by the Purchaser.)
|
|
4.
|
Mortgage
Loan closing statement (Form HUD-1) and any other truth-in-lending
or real
estate settlement procedure forms required by
law.
|
|
5.
|
Residential
loan application.
|
|
6.
|
Verification
of employment and income (if required pursuant to the Seller’s
underwriting criteria).
|
|
7.
|
Verification
of acceptable evidence of source and amount of down payment (to
the extent
required under the Seller’s underwriting
guidelines).
|
|
8.
|
Credit
report on the Mortgagor.
|
|
9.
|
Residential
appraisal report.
|
|
10.
|
Photograph
of the property.
|
|
11.
|
Executed
disclosure statement.
|
|
12.
|
Tax
receipts, insurance premium receipts, ledger sheets, payment records,
insurance claim files and correspondence, correspondence, current
and
historical computerized data files, underwriting standards used
for
origination, and all other papers and records developed or originated
by
the applicable Seller or others required to document the Mortgage
Loan or
to service the Mortgage Loan.
|
A-2-1
|
13.
|
A
certified copy or an imaged copy on CD ROM of the policy of title
insurance, including any endorsements
thereto.
|
|
14.
|
A
certified copy or an imaged copy on CD ROM of the executed Power
of
Attorney, if any.
|
|
15.
|
A
certified copy or an imaged copy on CD ROM of the original Primary
Mortgage Insurance Policy, if any.
|
|
16.
|
A
copy of the tax service contract, if
available.
|
|
17.
|
A
copy of the sales contract, if
available.
|
A-2-2
EXHIBIT B
TERM
SHEET
(Washington
Mutual—Xxxxxx Brothers)
This
Term
Sheet
(the
“Term Sheet”) is dated _____, by ____________________ [INSERT
one or
more of the following parties: WASHINGTON MUTUAL BANK, FA, a savings association
organized under the laws of the United States, WASHINGTON MUTUAL BANK fsb,
a
savings bank organized under the laws of the United States and WASHINGTON
MUTUAL
BANK, a Washington state chartered stock savings bank],
as
sellers (each, a “Seller” and, collectively, the “Sellers”) and XXXXXX BROTHERS
BANK, FSB, a federal savings bank (the “Purchaser”).
This
Term
Sheet is made pursuant to the terms and conditions of the Mortgage Loan Purchase
and Sale Agreement (the “Agreement”), dated as of September 1, 2003, among
Sellers and the Purchaser, the provisions of which are incorporated here,
as
such terms may be modified or supplemented here. All capitalized terms shall
have the meanings ascribed to them in the Agreement, unless otherwise defined
here.
The
Purchaser hereby purchases from Sellers and each Seller hereby sells to the
Purchaser, severally and not jointly, all of Seller’s right, title and interest
in and to the Mortgage Loans described on the Mortgage Loan Schedule attached
hereto as Schedule I,
in
accordance with the terms of the Agreement, as such terms may be supplemented
or
modified by this Term Sheet. From this date forward, Washington Mutual Bank,
FA,
shall service the Mortgage Loans for the benefit of the Purchaser and all
subsequent transferees of the Mortgage Loans in accordance with the terms
of the
Servicing Agreement, dated as of September 1, 2003, between Washington Mutual
Bank, FA, as servicer, and Purchaser.
1.
DEFINITIONS
For
purposes of the Mortgage Loans to be sold pursuant to this Term Sheet, the
following terms shall have the following meanings:
|
Aggregate
Principal Balance
(as
of the Cut-Off Date):
|
|
||
|
Closing
Date:
|
|||
|
Custodian:
|
|||
|
Cut-off
Date:
|
|||
|
Initial
Weighted Average
Mortgage
Loan Net Rate:
|
|||
|
Mortgage
Loan Type:
|
|||
|
Purchase
Price Percentage:
|
|||
|
Servicing
Fee Rate:
|
B-1
2.
Additional
Closing Conditions:
a.
The
Purchaser or any of its permitted assignees shall not effect a Whole Loan
Transfer or a Pass-Through Transfer unless the following conditions are met:
(i)
the maximum number of investors that own the Mortgage Loans at any one time
is
three, (ii) no single investor owns Mortgage Loans having an aggregate Unpaid
Principal Balance immediately after such Whole Loan Transfer or Pass-Through
Transfer of less than $5,000,000, (iii) the applicable Seller(s) and the
Servicer are provided with initial drafts of all documents for which such
Sellers and Servicer are requested to become a party in connection with such
Whole Loan Transfer or Pass-Through Transfer at least 10 days prior to the
Subsequent Transfer Settlement Date, (iv) a final list of the Mortgage Loans
subject to such Whole Loan Transfer or Pass-Through Transfer is provided
to the
Servicer at least 2 Business Days prior to the related Subsequent Transfer
Settlement Date, (v) no Mortgage Loan is subject to more than one Whole Loan
Transfer or Pass-Through Transfer in any given Due Period and (vi) the
Subsequent Transfer Settlement Date occurs after the related Servicing Cut-off
Date.
b.
In
addition to the foregoing and to the conditions specified in the Agreement,
the
obligation of each of the Sellers and the Purchaser is subject to the
fulfillment, on or prior to the relevant Closing Date, of the following
additional conditions:
[None].
3.
Additional
Loan Documents:
a.
In
addition to the contents of the Collateral File specified in the Agreement,
the
following documents shall be delivered with respect to the Mortgage Loans:
[None].
4.
[Additional]
[Modification of] Representations and Warranties:
a.
In
addition to the representations and warranties set forth in the Agreement,
as of
the date hereof, the applicable Seller makes the following additional
representations and warranties with respect to each of the Mortgage Loans
to be
sold by such Seller on the Closing Date:
[No
Mortgage Loan that was originated on or after October 1, 2002 and on or prior
to
March 7, 2003, which is secured by a Mortgaged Property located in the State
of
Georgia is a “home loan” as defined in the Georgia Fair Lending Act (HB
1361).]
B-2
[None].
b.
[Notwithstanding anything to the contrary set forth in the Agreement, with
respect to each Mortgage Loan to be sold on the Closing Date or with respect
to
each of the Sellers, the representations and warranties set forth in Section
3.1
and Section 3.2 of the Agreement shall be modified to read as
follows:
[No
change].
c.
Except
as modified here, Sections 3.1 and 3.2 of the Agreement remain in full force
and
effect as of the date of this Term Sheet.
5.
Tax Treatment and Tax Structure
Notwithstanding
any other provision of this Term Sheet or the Agreement (including any
confidentiality provision) or the terms of any confidentiality provisions
in any
other agreements between the parties relevant to the Mortgage Loans, each
Seller, the Purchaser and the Servicer (and each employee, representative
or
other agent of any of the foregoing) may disclose to any and all persons,
without limitation of any kind, (i) the “tax treatment” and “tax structure” (as
those terms are defined in Treasury Regulations Section 1.6011-4(c)) of all
transactions covered by this Term Sheet, the Agreement or any other agreements
between the parties relevant to the Mortgage Loans and (ii) all materials
of any
kind (including opinions or other tax analyses) that are provided to any
of the
foregoing parties relating to such tax treatment and tax structure.
[signatures
follow]
B-3
TO
WITNESS THIS,
the
parties have caused their names to be signed by their respective duly authorized
officers as of the date first written above.
|
WASHINGTON
MUTUAL BANK, FA
a
federally chartered savings
association
|
||
| |
|
|
| By: | ||
|
|
||
| Name: | ||
|
|
||
| Title: | ||
|
|
||
|
WASHINGTON
MUTUAL BANK fsb
a
federal savings bank
|
||
| |
|
|
| By: | ||
|
|
||
| Name: | ||
|
|
||
| Title: | ||
|
|
||
|
WASHINGTON
MUTUAL BANK
a
Washington state chartered stock savings
bank
|
||
| |
|
|
| By: | ||
|
|
||
| Name: | ||
|
|
||
| Title: | ||
|
|
||
|
XXXXXX
BROTHERS BANK, FSB
a
federal savings bank
|
||
| |
|
|
| By: | ||
|
|
||
| Name: | ||
|
|
||
| Title: | ||
|
|
||
B-4
SCHEDULE
I TO TERM SHEET
MORTGAGE
LOAN SCHEDULE *
*
To be
attached as diskette in “read-only” format.
i
EXHIBIT
C
FORM
OF INDEMNIFICATION AGREEMENT
[Date]
[Purchaser
Name]
[Purchaser
Address]
[Purchaser
Address]
Re: [Name
of
Securities]
Ladies
and Gentlemen:
The
following terms shall have the meanings indicated:
“Act”
shall mean The Securities Act of 1933, as amended.
“Claims”
shall mean losses, third-party claims, damages, joint or several liabilities
or
expenses (including the reasonable cost of investigating and defending against
any third-party claims including related counsel fees, except as otherwise
provided herein).
“Controlling
Person” shall mean the officers and directors, and each person, if any, who
controls a party to this letter agreement within the meaning of Section 15
of
the Act.
“Indemnified
Party” shall mean a party to this letter agreement (in its own right and on
behalf of its related Controlling Persons) entitled to an indemnification
under
the terms of this letter agreement.
“Indemnifying
Party” shall mean a party to this letter agreement obligated to indemnify an
Indemnified Party under the terms of this letter agreement.
“Prospectus
Supplement” shall mean the prospectus supplement dated on or about ____________,
200_ under the Act related to the securities described in the subject line
of
this letter agreement.
“Seller”
shall mean, as the context requires, any of Washington Mutual Bank, FA,
Washington Mutual Bank fsb and/or Washington Mutual Bank.
“Seller
Information” shall mean the information contained on Exhibit A attached
hereto.
Capitalized
terms not otherwise defined herein have the meanings ascribed to such terms
in
the Pooling and Servicing Agreement, dated as of ____________, 200_ (the
“Pooling and Servicing Agreement”), among ______________, as depositor,
________________, as trustee, ____________________, as a seller, and
________________, as a seller and servicer.
C-1
Each
of
the Sellers, severally and not jointly, represents and warrants that the
Seller
Information related to such Seller does not (1) contain any untrue statement
of
a material fact or (2) omit to state any material fact necessary to make
the
statements therein, in light of the circumstances under which they were made,
not misleading. In the event of a breach of the foregoing representation
and
warranty, each Seller agrees to indemnify and hold harmless each addressee
of
this letter agreement and each of its related Controlling Persons against
any
Claim that may be based upon the Act, or any other statute or at common law,
on
the ground or alleged ground that the Prospectus Supplement, to the limited
extent of the Seller Information related to such Seller contained therein,
(1)
contains an untrue statement of a material fact, or (2) omits to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Each
addressee of this letter agreement represents and warrants that the Prospectus
Supplement, exclusive of the Seller Information, does not (1) contain any
untrue
statement of a material fact or (2) omit to state any material fact necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading. In the event of a breach of the foregoing representation
and warranty, each addressee of this letter agreement agrees to indemnify
and
hold harmless each of the Sellers and each of its respective Controlling
Persons, against any Claim that may be based upon the Act, or any other statute
or at common law, on the ground or alleged ground that the statements made
in
the Prospectus Supplement (exclusive of the Seller Information) (1) contain
any
untrue statement of a material fact or (2) omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
With
respect to each claim for indemnification made hereunder, the Indemnified
Party
shall notify the Indemnifying Party in writing, giving notice of the nature
of
the claim, within a reasonable time after service of a summons or other first
legal process that shall have been served upon such Indemnified Party, but
failure to notify the Indemnifying Party of any such claim shall not relieve
the
Indemnifying Party from any liability which it may have to the Indemnified
Party
(i) on account of the indemnity contained in this letter agreement, except
to
the extent that the Indemnifying Party has been materially prejudiced by
such
failure, or (ii) otherwise than on account of the indemnity contained in
this
letter agreement.
The
Indemnifying Party will be entitled to participate at its own expense in
the
defense or, if the Indemnifying Party so elects, to assume the defense of
any
suit brought to enforce any such liability, but if the Indemnifying Party
elects
to assume the defense, such defense shall be conducted by counsel reasonably
satisfactory to the Indemnified Party. In the event the Indemnifying Party
elects to assume the defense of any such suit and retain such counsel, the
Indemnified Party or persons, defendant or defendants in the suit, may retain
additional counsel but shall bear the fees and expenses of such counsel unless:
(1) the Indemnifying Party shall have agreed to the retention of such counsel
at
the expense of the Indemnifying Party; or (2) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnifying
Party
and the Indemnified Party, and the Indemnified Party reasonably determines
that
representation of both by the same counsel would be inappropriate due to
actual
or potential differing interests between them. It is understood that the
Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses
of
more than one counsel (separate from its own counsel) for the Indemnified
Party.
C-2
The
Indemnified Party shall not be liable to indemnify any person for any settlement
of any claim effected without the Indemnified Party’s consent, which consent
shall not be unreasonably withheld. The Indemnifying Party shall not, without
the prior written consent of an Indemnified Party, which consent will not
be
unreasonably withheld, effect any settlement of any pending or threatened
proceeding in respect of which such Indemnified Party is or could have been
a
party and indemnity is or could have been sought hereunder by such Indemnified
Party.
If
the
indemnification provided for in this letter is insufficient or unavailable
to an
Indemnified Party in respect of any losses, claims, damages, liabilities
or
judgments referred to herein, then the Indemnifying Party, in lieu of
indemnifying the Indemnified Party, shall contribute to the amount paid or
payable by the Indemnified Party as a result of such losses, claims, damages,
liabilities and expenses in such proportion as is appropriate equally to
reflect
(1) the relative fault and benefits of (a) the Indemnifying Party on the
one
hand and (b) the Indemnified Party on the other hand, as well as (2) any
other
relevant equitable considerations.
The
Controlling Person of any Indemnified Party shall be an intended third-party
beneficiary of this letter agreement; provided, however, that any Controlling
Person shall appoint its related Indemnified Party as its exclusive agent
for,
on behalf of, and in the name of such Controlling Person, to exercise any
and
all rights of such Controlling Person under this letter agreement, without
prejudice to the right of any Controlling Party to retain additional counsel
at
its own expense, as provided in this letter agreement. In no event, however,
will an Indemnifying Party be required to bear the expense of such additional
counsel on the grounds that representation of both the Indemnified Party
and its
related Controlling Person by the same counsel would be inappropriate due
to
actual or potential differing interests between them.
This
letter agreement shall be governed by and construed in accordance with the
laws
of the State of New York (including Section 5-1401 of the New York General
Obligations Law) and the obligations, rights and remedies of the parties
shall
be determined in accordance with such laws without giving effect to conflict
of
laws principles other than Section 5-1401 of the New York General Obligations
Law.
C-3
Please
signify your acceptance of this letter agreement by signing below and returning
to the undersigned. This letter agreement shall be effective as of the date
first stated above upon delivery of written acceptance by all parties
hereto.
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Very
truly yours,
WASHINGTON
MUTUAL BANK, FA
a
federally chartered savings
association
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WASHINGTON
MUTUAL BANK fsb
a
federal savings bank
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WASHINGTON
MUTUAL BANK
a
Washington state chartered stock savings
bank
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AGREED
AND ACCEPTED
XXXXXX
BROTHERS BANK, FSB
a
federal savings bank
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C-4
Exhibit
A
WASHINGTON
MUTUAL BANK, XX
Xxxxxxxxxx
Mutual Bank, FA (“WMBFA”), is a federally chartered savings association. WMBFA’s
principal executive offices are located at 0000 Xxxxx Xxxxxx, Xxxxxxx, XX
00000,
telephone (000) 000-0000. The primary mortgage loan servicing office of WMBFA
is
located at 00000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000. Its telephone
number is (000) 000-0000. WMBFA is subject to regulation and examination
by the
Office of Thrift Supervision, which is its primary regulator. Its deposit
accounts are insured by the FDIC, primarily through the Savings Association
Insurance Fund. As a result, the FDIC also has some authority to regulate
WMBFA.
WASHINGTON
MUTUAL BANK fsb
Washington
Mutual Bank fsb (“WMBfsb”) is a federally chartered savings bank. WMBfsb’s
principal executive offices are located at 0000 Xxxxx Xxxxxx, Xxxxxxx, XX
00000,
telephone (000) 000-0000. WMBfsb is subject to regulation and examination
by the
Office of Thrift Supervision, which is its primary regulator. Its deposit
accounts are insured by the FDIC through the Savings Association Insurance
Fund.
As a result, the FDIC also has some authority to regulate WMBfsb.
WASHINGTON
MUTUAL BANK
Washington
Mutual Bank (“WMB”) is a savings bank chartered under the laws of the State of
Washington. WMB’s principal executive offices are located at 0000 Xxxxx Xxxxxx,
Xxxxxxx, XX 00000, telephone (000) 000-0000. WMB is subject to regulation
and
supervision by the Director of Financial Institutions of the State of
Washington. As a state savings bank, WMB is also subject to examination and
regulation by the FDIC.
C-5
NONACCRUAL
LOAN STATISTICS
[to
be
attached]
C-6
ORIGINATION
AND UNDERWRITING CRITERIA
[to
be
attached]
C-7
MORTGAGE
LOAN SCHEDULE
[to
be
attached as diskette in “read-only” format]
C-8
EXHIBIT D
REPRESENTATIONS
AND WARRANTIES
Each
Company hereby, severally and not jointly, represents and warrants to and
covenants to and agrees with the Assignor and the Assignee that, as to each
Mortgage Loan sold by such Company to the Assignor, as of the date
hereof:
1.1 The
information set forth in the Mortgage Loan Schedule attached hereto as
Exhibit
A
is true
and correct in all material respects.
1.2 The
related Mortgage is a valid and enforceable (subject to Section 1.12) first
lien
on the related Mortgaged Property, subject only to (a) liens for current
real
property taxes and special assessments; (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record
as of
the date of recording such Mortgage, such exceptions appearing of record
being
acceptable to mortgage lending institutions generally or specifically reflected
in the appraisal obtained in connection with the origination of the Mortgage
Loan; (c) exceptions set forth in the title insurance policy relating to
such
Mortgage, such exceptions being acceptable to mortgage lending institutions
generally; and (d) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security intended
to
be provided by the Mortgage.
1.3 All
Monthly Payments due on such Mortgage Loan have been made and such Mortgage
Loan
has not been delinquent (i.e., was more than 30 days past due) more than
once in
the preceding 12 months and any such delinquency lasted for no more than
30
days.
1.4 There
is
no offset, defense or counterclaim to the related Mortgage Note, including
the
obligation of the Mortgagor to pay the unpaid principal or interest on such
Mortgage Note.
1.5 The
related Mortgaged Property is free of damage and in good repair, ordinary
wear
and tear excepted.
1.6 Such
Mortgage Loan at the time it was made complied with all applicable state
and
federal laws, including, without limitation, usury, equal credit opportunity,
disclosure and recording laws.
1.7 Such
Mortgage Loan was originated by a savings association, savings bank, credit
union, insurance company, or similar institution which is supervised and
examined by a federal or state authority, or a mortgagee approved by
HUD.
1.8 Such
Mortgage Loan is covered by an ALTA form of mortgagee title insurance policy
or
other form of policy of insurance which has been issued by, and is the valid
and
binding obligation of, a title insurer which, as of the origination date
of such
Mortgage Loan, was qualified to do business in the state in which the related
Mortgaged Property is located. Such policy insures the originator of the
Mortgage Loan, its successors and assigns as to the first priority lien of
the
Mortgage in the original principal amount of the Mortgage Loan subject to
the
exceptions set forth in such policy. Such policy is in full force and effect
and
will inure to the benefit of the Assignee upon the consummation of the
transactions contemplated by this Agreement and no claims have been made
under
such policy, and the applicable Company, has not done, by act or omission,
anything that would impair the coverage of such policy.
D-1
1.9 If
such
Mortgage Loan had a Loan-to-Value Ratio in excess of 80% at the time of
origination, such Mortgage Loan was covered by a Primary Mortgage Insurance
Policy that remains in full force and effect.
1.10 The
related Mortgage (exclusive of any riders thereto) was documented by appropriate
Xxxxxx Xxx/Xxxxxxx Mac mortgage instruments in effect at the time of
origination, or other instruments approved by the applicable
Company.
1.11 The
related Mortgaged Property securing the Mortgage is improved with a one-
to
four-family dwelling unit, including units in a duplex, triplex, fourplex,
condominium project, townhouse, a planned unit development or a de minimis
planned unit development.
1.12 The
related Mortgage and the related Mortgage Note are the legal, valid and binding
obligations of the maker thereof and are enforceable in accordance with their
respective terms, except only as such enforcement may be limited by laws
affecting the enforcement of creditors’ rights generally and principles of
equity.
1.13 Prior
to
origination or refinancing, an appraisal of the related Mortgaged Property
was
made by an appraiser who met the requirements of the applicable
Company.
1.14 Such
Mortgage Loan has been underwritten substantially in accordance with the
underwriting guidelines of the applicable Company.
1.15 The
applicable Company used no adverse selection procedures in selecting such
Mortgage Loan from among the outstanding mortgage loans in such Company’s
portfolio on the date of transfer to the Assignor and as to which the
representations and warranties set forth herein could be made.
1.16 Immediately
upon the transfer contemplated by the Purchase Agreement, the Assignor had
good
title to, and was the sole legal owner of, such Mortgage Loan, free and clear
of
any encumbrance or lien.
1.17 There
is
no late assessment for delinquent taxes outstanding against the related
Mortgaged Property.
D-2
EXHIBIT
E
INFORMATION
TO BE SET FORTH IN THE MORTGAGE LOAN SCHEDULE
|
(1)
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the
Seller's name and the Seller’s Mortgage Loan identifying
number;
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(2)
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the
Mortgagor's name or co-mortgagor’s
name;
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(3)
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the
street address of the Mortgaged Property including the city, state,
county, and the zip code;
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(4)
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a
code indicating whether the loan was originated through a correspondent,
retail, or wholesale channel;
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(5)
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a
code indicating whether the Mortgage Loan is a balloon Mortgage
Loan;
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(6)
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a
code indicating whether the Mortgage Loan is a Fixed Rate Mortgage
Loan or
an ARM Loan;
|
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(7)
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a
code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a townhouse or a unit in a high-rise
or
low-rise condominium project;
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(8)
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the
number of units for all Mortgaged
Properties;
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(9)
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the
original months to maturity or the remaining months to maturity
from the
related Cut-off Date, in any case based on the original amortization
schedule, and if different, the maturity expressed in the same
manner but
based on the actual amortization
schedule;
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(10)
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a
code indicating the lien status of the Mortgage
Loan;
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(11)
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the
Loan-to-Value Ratio at origination;
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(12)
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the
Appraised Value and purchase price, if applicable, of the Mortgaged
Property;
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(13)
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the
Mortgage Interest Rate at the time of
origination;
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(14)
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the
Mortgage Interest Rate as of the related Cut-off
Date;
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(15)
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the
application date of the Mortgage
Loan;
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(16)
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the
commitment date;
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(17)
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the
origination date of the Mortgage
Loan;
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E-1
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(18)
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the
first payment Due Date of the Mortgage
Loan;
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(19)
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the
stated maturity date of the Mortgage
Loan;
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(20)
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the
amount of the Monthly Payment, including principal and interest,
as of the
related Cut-off Date;
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(21)
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the
amount of the Monthly Payment, including principal and interest,
at the
time of origination;
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(22)
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the
next due date of the Mortgage Loan;
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(23)
|
a
twelve month history for the Mortgage Loan and the number of times
thirty,
sixty, and ninety days delinquent in the past twelve
months;
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(24)
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a
code indicating the payment status of the loan (i.e. bankruptcy,
foreclosure, REO);
|
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(25)
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the
original principal amount of the Mortgage
Loan;
|
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(26)
|
the
actual principal balance of the Mortgage Loan as of the close of
business
on the related Cut-off Date, after deduction of payments of principal
actually collected on or before such Cut-off
Date;
|
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(27)
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the
scheduled principal balance of the Mortgage Loan as of the close
of
business on the related Cut-off Date, after deduction of payments
of
principal due on or before such Cut-off Date;
|
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(28)
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the
Mortgage Loan purpose type;
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(29)
|
the
occupancy status of the Mortgaged Property at the time of
origination;
|
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(30)
|
the
Indices and Monthly Payment and Mortgage Interest Rate adjustment
frequencies;
|
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(31)
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the
initial Interest Rate Adjustment
Date;
|
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(32)
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the
initial Monthly Payment adjustment
date;
|
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(33)
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the
next Interest Rate Adjustment Date;
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(34)
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the
next Monthly Payment adjustment
date;
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(35)
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the
Gross Margin;
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(36)
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the
Minimum Mortgage Interest Rate;
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E-2
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(37)
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the
Maximum Mortgage Interest Rate;
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(38)
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the
Initial Mortgage Interest Rate Cap;
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(39)
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the
Interest Rate Decrease Maximum and Interest Rate Decrease Minimum
at all
subsequent Interest Rate Adjustment
Dates;
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(40)
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the
rounding provisions under the terms of the Mortgage
Note;
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(41)
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the
lookback provisions (#of days) under the terms of the Mortgage
Note;
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(42)
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the
Mortgagor’s FICO score;
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(43)
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a
code indicating the mortgage insurance provider and percent of
coverage,
if applicable;
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(44)
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the
mortgage insurance certificate number; a code indicating the method
of
payment for mortgage insurance premiums and cost (Lender Paid MI),
if
applicable;
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(45)
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the
loan documentation type;
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(46)
|
the
back-end debt to income ratio;
|
|
(47)
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number
of borrowers;
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(48)
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borrower
Social Security Number;
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(49)
|
co-borrower
Social Security Number;
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(50)
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borrower
race;
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(51)
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co-borrower
race;
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(52)
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combined
borrower’s annual income;
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(53)
|
a
code indicating whether the Mortgage Loan has a prepayment
charge;
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(54)
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the
monthly servicing fee;
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(55)
|
a
code indicating if the Mortgage Loan is a MERS
Loan;
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(56)
|
with
respect to each MERS Loan, the MIN;
and
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(57)
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the
assumption code.
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E-3
REGULATION
AB AMENDMENT TO MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
This
REGULATION AB AMENDMENT TO MORTGAGE LOAN PURCHASE AND SALE AGREEMENT dated
as of
March 1, 2006 (the "Amendment") between WASHINGTON MUTUAL BANK., (formerly
known
as Washington Mutual Bank, FA), a savings bank organized under the laws of
the
United States and WASHINGTON MUTUAL BANK, FSB, a savings bank organized under
the laws of the United States (each, "Seller"
and,
collectively, the "Sellers"),
and
XXXXXX
BROTHERS BANK, FSB,
a
federal savings bank organized under the laws of the United States, as purchaser
(the "Purchaser"),
is
made with respect to the Mortgage Loan Purchase and Sale Agreement dated as
of
September 1, 2003 (the "Original Purchase Agreement") among the Sellers,
Washington Mutual Bank and the Purchaser. Capitalized terms used in this
Amendment without definition have the meanings assigned to them in the Original
Purchase Agreement.
The
parties wish to amend the Original Purchase Agreement in order to facilitate
compliance by the Purchaser and its assignees with Regulation AB (as defined
below).
Accordingly,
the parties agree as follows:
ARTICLE
I
AMENDMENTS
Section
1.1. Definitions
(a) Article
1
of the Original Purchase Agreement is amended by adding the following
definitions:
Commission:
The
United States Securities and Exchange Commission.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Issuing
Entity:
The
issuing entity, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Master
Servicer:
As
defined in Section 6.1(d).
Permitted
Reconstitution:
A Whole
Loan Transfer or Securitization Transaction that complies with the provisions
of
Section 6.1(a).
Qualified
Correspondent:
Any
Person from which a Seller purchased Mortgage Loans, provided that the following
conditions are satisfied: (i) such Mortgage Loans were originated pursuant
to an
agreement between the applicable Seller(s) and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the applicable Seller(s), in accordance with underwriting guidelines designated
by the Seller(s) (“Designated
Guidelines”)
or
guidelines that do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans were in fact underwritten as described in clause (i) above
and were acquired by the applicable Seller(s) within 180 days after origination;
(iii) either (x) the Designated Guidelines were, at the time such Mortgage
Loans
were originated, used by the applicable Seller(s) in origination of mortgage
loans of the same type as the Mortgage Loans for the Seller's own account or
(y)
the Designated Guidelines were, at the time such Mortgage Loans were
underwritten, designated by the Seller(s) on a consistent basis for use by
lenders in originating mortgage loans to be purchased by the applicable
Seller(s); and (iv) the applicable Seller(s) employed, at the time such Mortgage
Loans were acquired by the Seller, pre-purchase or post-purchase quality
assurance procedures (which may involve, among other things, review of a sample
of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by the
Seller(s).
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan.
7, 2005)) or by the staff of the Commission, or as may be provided by the
Commission or its staff from time to time.
Required
Notice:
With
respect to any Reconstitution, 15 days' prior written notice.
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (1) a sale or other transfer of some or all of
the
Mortgage Loans directly or indirectly to an issuing entity in connection with
an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately
placed, rated or unrated securities,
the payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
2
Seller
Information:
The
information provided by each of the Sellers pursuant to Sections 6.4(a) and
(b).
Sponsor:
The
sponsor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, from which the Sellers acquired
Mortgage Loans.
(b) Article
1
of the Original Purchase Agreement is amended by amending and restating the
following definitions in their entirety:
Disclosure
Document:
With
respect to any Securitization Transaction, a prospectus, prospectus supplement,
free writing prospectus, private placement memorandum or offering circular
prepared in connection with such Securitization Transaction.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.
(c) Article
1
of the Original Purchase Agreement is amended by deleting the following
definitions: "Pass-Through Transfer" and "Seller's Information."
(d) The
penultimate sentence of Section 3.3(b) of the Original Purchase Agreement is
amended by replacing he reference therein to “Pass-Through Transfer” with
“Securitization Transction”.
(e) Article
6
of the Original Purchase Agreement is amended and restated in its entirety
to
read as follows:
ARTICLE
RECONSTITUTIONS;
REGULATION AB COMPLIANCE
Section
6.1 Reconstitutions
(a) Upon
Required Notice to the applicable Seller(s), the Purchaser may, at its sole
option, effect one or more Reconstitutions with respect to some or all of the
Mortgage Loans purchased on any Closing Date, retaining the Servicer as servicer
or subservicer, if a Master Servicer is employed;
provided, however, that no Reconstitution may be made by the Purchaser or any
of
its permitted assignees with respect to Mortgage Loans in any Loan Pool if
as a
result thereof: (i) more than three (3) investors would own Mortgage Loans
in
such Loan Pool at any one time (unless otherwise stated in the related
Commitment Letter), (ii) any single investor would own Mortgage Loans from
such
Loan Pool having an aggregate Unpaid Principal Balance immediately after such
Reconstitution of less than $5,000,000 (unless mutually agreed upon otherwise
by
the parties thereto), (iii) the applicable Seller(s) and the Servicer are not
provided with initial drafts of all documents for which the applicable Seller(s)
and Servicer are requested to become a party in connection with such
Reconstitution at least 10 days prior to the related settlement date (the
“Subsequent
Transfer Settlement Date”),
(iv)
a final list of the Mortgage Loans intended to be subject to such Reconstitution
is not provided to the Servicer at least 2 Business Days prior to the related
Subsequent Transfer Settlement Date (unless mutually agreed upon otherwise
by
the parties thereto), (v) any Mortgage Loan is subject to more than one
Reconstitution in any given Due Period, or (vi) the related Subsequent Transfer
Settlement Date occurs on or prior to the related Servicing Cut-off Date.
3
(b) The
Purchaser shall reimburse the applicable Seller(s) for all reasonable
out-of-pocket expenses, including attorneys’ fees, incurred by the Seller(s) in
connection with any Reconstitution.
(c) In
connection with each Whole Loan Transfer permitted under this Section 6.1,
each of the Sellers, as applicable, shall:
(i) provide
the Purchaser with information and appropriate verification of information
in
its possession or control as may reasonably be necessary in order to effect
such
Whole Loan Transfer (and, to the extent any such information is in the
possession or control of any third party, use commercially reasonable efforts
to
cause such third party to provide such information); and
(ii) cooperate
with all reasonable requests and due diligence procedures not otherwise
addressed herein.
(d)
Notwithstanding
anything to the contrary contained in this Agreement, but subject to the terms
of the Servicing Agreement, the Purchaser shall have the right, in its sole
discretion, upon 30 days’ prior written notice to the Sellers, to appoint and
designate a master servicer (the “Master
Servicer”),
as
master servicer of any Mortgage Loans. Upon such appointment, the Sellers shall
correspond and communicate solely with the Master Servicer, as if the Master
Servicer were the “Purchaser” hereunder. Furthermore, the Master Servicer shall
have all rights as designee of the Purchaser to enforce the representations
and
warranties, and all other covenants and conditions set forth in this Agreement,
and the Sellers
shall follow and shall be entitled to rely on the instructions of the Master
Servicer under this Agreement as if such instructions were the instructions
of
the Purchaser. The Master Servicer shall have the right to give any waivers
or
consents required or allowed under this Agreement on behalf of the Purchaser,
and the Sellers shall have the right to rely on all such waivers and consents.
The Master Servicer shall be empowered to enter into and execute and deliver
any
amendments or modifications to this Agreement as the Purchaser’s designee
hereunder, and such amendments or modifications shall be binding upon the
Purchaser as if the Purchaser had executed and delivered the same. Each of
the
Sellers acknowledges that the Purchaser has provided notice that it will appoint
and designate Aurora Loan Services LLC as Master Servicer of any Mortgage Loans.
The written notice required pursuant to this Section 6.1(d) is deemed to have
been satisfied with respect to the appointment of Aurora Loan Services
LLC.
4
Section
6.2 [Reserved]
Section
6.3 Intent
of the Parties; Reasonableness
The
Purchaser and the Sellers acknowledge and agree that the purpose of Sections
6.4
and 6.5 is to facilitate compliance by the Purchaser and any Depositor
with the
provisions of Regulation AB and related rules and regulations of the Commission.
Although
Regulation AB is applicable by its terms only to offerings of asset-backed
securities that are registered under the Securities Act, the Sellers acknowledge
that investors in privately offered securities may require that the Purchaser
and any Depositor provide comparable disclosure in unregistered offerings.
References in this Agreement to compliance with Regulation AB include provision
of comparable disclosure in private offerings.
Neither
the Purchaser nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder
(or the
provision in a private offering of disclosure comparable to that required
under
the Securities Act). The Sellers acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise,
and
agree to comply with requests made by the Purchaser or any Depositor in
good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. Each party agrees that it shall
cooperate in good faith to amend this Amendment and/or the Original Purchase
Agreement in light of any changes in the interpretations of the requirements
of
Regulation AB over time, whether due to interpretive guidance provided
by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise. In connection
with any Securitization Transaction, the Sellers shall cooperate fully
with the
Purchaser to deliver to the Purchaser (including any of its assignees or
designees) and any Depositor, any and all statements, reports, certifications,
records and any other information necessary in the good faith determination
of
the Purchaser or such Depositor to permit the Purchaser or such Depositor
to
comply with the provisions of Regulation AB, together with such disclosures
relating to the Sellers, any Third-Party Originator and the Mortgage Loans,
reasonably believed by the Purchaser or such Depositor to be necessary
in order
to effect such compliance.
5
The
Purchaser (including any of its assignees or designees) shall cooperate
with the
Sellers by providing timely notice of requests for information under these
provisions and by reasonably limiting such requests to information required,
in
the Purchaser's reasonable judgment, to comply with Regulation AB.
Section
6.4 Information
to be Provided by the Sellers
In
connection with any Securitization Transaction, each of the Sellers as
applicable shall (i) within five Business Days following request by the
Purchaser or any Depositor, provide to the Purchaser and such Depositor
(or, as
applicable, cause each Third-Party Originator to provide), in writing and
in
form and substance reasonably satisfactory to the Purchaser and such Depositor,
the information and materials specified in paragraphs (a) and (b) of this
Section 6.4, and (ii) as promptly as practicable following notice to or
discovery by the applicable Seller(s), provide to the Purchaser and any
Depositor (in writing and in form and substance reasonably satisfactory
to the
Purchaser and such Depositor) the information specified in paragraph (c)
of this
Section.
(a) If
so
requested by the Purchaser or any Depositor, the applicable Seller(s) shall
provide such information regarding (i) the Seller, as originator of the
Mortgage
Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, as is requested for
the
purpose of compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119
of
Regulation AB. Such information shall include, at a minimum:
(i) the
originator’s form of organization;
(ii) a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage
loans, which description shall include a discussion of the originator’s
experience in originating mortgage loans of a similar type as the Mortgage
Loans; information regarding the size and composition of the originator’s
origination portfolio; and information that may be material, in the good
faith
judgment of the Purchaser or any Depositor, to an analysis of the performance
of
the Mortgage Loans, including the originator’s credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage Loans and
such
other information as the Purchaser or such Depositor may reasonably request
for
the purpose of compliance with Item 1110(b)(2) of Regulation
AB;
6
(iii) a
description of any material legal or governmental proceedings pending (or
known
to be contemplated) against the applicable Seller(s) and each Third-Party
Originator; and
(iv) a
description of any affiliation or relationship between the applicable Seller(s)
each Third-Party Originator and any of the following parties to a Securitization
Transaction, as such parties are identified to the applicable Seller(s)
by the
Purchaser or any Depositor in writing in advance of such Securitization
Transaction:
|
(A)
|
the
Sponsor;
|
|
|
(B)
|
the
Depositor;
|
|
|
(C)
|
the
Issuing Entity;
|
|
|
(D)
|
any
servicer;
|
|
|
(E)
|
any
trustee;
|
|
|
(F)
|
any
originator;
|
|
|
(G)
|
any
significant obligor;
|
|
|
(H)
|
any
enhancement or support provider; and
|
|
|
(I)
|
any
other material transaction party.
|
(b) If
so
requested by the Purchaser or any Depositor, the applicable Seller(s) shall
provide (or, as applicable, cause each Third-Party Originator to provide)
Static
Pool Information with respect to the mortgage loans (of a similar type
as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the applicable Seller(s), if the Seller is an originator
of
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent) and/or (ii) each Third Party Originator. Such Static Pool
Information shall be prepared by the applicable Seller(s) (or Third Party
Originator) on the basis of its reasonable, good faith interpretation of
the
requirements of Item 1105(a)(1)-(3) of Regulation AB. To the extent that
there
is reasonably available to the applicable Seller(s) (or Third Party Originator)
Static Pool Information with respect to more than one mortgage loan type,
the
Purchaser or any Depositor shall be entitled to specify whether some or
all of
such information shall be provided pursuant
to this paragraph. The content of such Static Pool Information may be in
the
form customarily provided by the applicable Seller(s), and need not be
customized for the Purchaser or any Depositor. Such Static Pool Information
for
each vintage origination year or prior securitized pool, as applicable,
shall be
presented in increments no less frequently than quarterly over the life
of the
mortgage loans included in the vintage origination year or prior securitized
pool. The most recent periodic increment must be as of a date no later
than 135
days prior to the date of the prospectus or other offering document in
which the
Static Pool Information is to be included or incorporated by reference.
The
Static Pool Information shall be provided in an electronic format that
provides
a permanent record of the information provided, such as a portable document
format (pdf) file, or other such electronic format reasonably required
by the
Purchaser or such Depositor, as applicable.
7
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an
omission
to include therein information required to be provided pursuant to such
paragraph), the applicable Seller(s) shall provide (or, as applicable,
cause any
Third Party Originator to provide) corrected Static Pool Information to
the
Purchaser or any Depositor, as applicable, in the same format in which
Static
Pool Information was previously provided to such party by the applicable
Seller(s) (or Third Party Originator).
If
so
requested by the Purchaser or any Depositor, the applicable Seller(s) shall
provide (or, as applicable, cause each Third Party Originator to provide),
at
the expense of the requesting party, such agreed-upon procedures letters
of
certified public accountants reasonably acceptable to the Purchaser or
such
Depositor, as applicable, pertaining to Static Pool Information relating
to
prior securitized pools for securitizations closed on or after January
1, 2006
or, in the case of Static Pool Information with respect to each of the
applicable Seller's or Third-Party Originator's originations or purchases,
to
calendar months commencing prior to January 1, 2006, as the Purchaser or
such
Depositor shall reasonably request. Such statements and letters shall be
addressed to and be for the benefit of such parties as the Purchaser or
such
Depositor shall designate, which may include, by way of example, any Sponsor,
any Depositor and any broker dealer acting as underwriter, placement agent
or
initial purchaser with respect to a Securitization Transaction. Any such
statement or letter may take the form of a standard, generally applicable
document accompanied by a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.
(c) If
so
requested by the Purchaser or any Depositor for the purpose of satisfying
its
reporting obligation under the Exchange Act with respect
to any class of asset-backed securities, the applicable Seller(s) shall
(or
shall cause each Third-Party Originator to) (i) notify the Purchaser and
such
Depositor in writing of (A) any material litigation or governmental proceedings
pending against the Seller or any Third-Party Originator and (B) any
affiliations or relationships that develop following the closing date of
a
Securitization Transaction between the Seller or any Third-Party Originator
and
any of the parties specified in clause (iv) of Section 6.4(a) (and any
other
parties identified in writing by the requesting party) with respect to
such
Securitization Transaction, and (C) any other information required to be
disclosed by originators pursuant to Regulation AB based on amendments
to the
related rules and regulations of the Commission or interpretive guidance
provided by the Commission or its staff, as mutually agreed to by the applicable
Seller(s) and the Purchaser or such Depositor and (ii) provide to the Purchaser
and such Depositor a description of such proceedings, affiliations or
relationships.
8
Section
6.5 Indemnification
(a) With
respect to any Securitization Transaction for which any Seller's Information
is
included in a related Disclosure Document, the applicable Seller(s), on
the one
hand, and the Sponsor, the Depositor and any broker dealer acting as
underwriter, placement agent or initial purchaser, on the other hand, shall
execute and deliver an indemnification agreement (an “Indemnification
Agreement”)
in
substantially the form attached as Exhibit
I to
the
Servicing Agreement, pursuant to which certain parties shall indemnify
other
party or parties and their respective affiliates and each Person who controls
any of such parties (within the meaning of Section 15 of the Securities
Act) and
their respective present and former directors, officers and employees for
the
matters set forth in such Indemnification Agreement.
(b) The
applicable Seller(s) shall indemnify the Purchaser, the Depositor, each
Sponsor,
each Issuing Entity and each Person responsible for the preparation, execution
or filing of any report required to be filed with the Commission with respect
to
such Securitization Transaction, or for execution of a certification pursuant
to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to
such
Securitization Transaction and each Person who controls any of such parties
(within the meaning of Section 20 of the Exchange Act) and their respective
affiliates, present and former directors, officers and employees, and shall
hold
each of them harmless from and against any losses damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and
any other
costs, fees and expenses that any of them may sustain arising out of or
based
upon any untrue statement of a material fact contained in any information
delivered in written or electronic form or the omission in such information
of
any material fact required to be stated therein, if applicable, or
necessary to make the statements in such information, in light of the
circumstances under which they were made, not misleading, by the applicable
Seller(s) pursuant to Section 6.4(c).
9
(f) Paragraph
2(a) of Exhibit B to the Original Purchase Agreement is amended by replacing
the
references therein to “Pass-Through Transfer” with “Securitization
Transaction”.
ARTICLE
II
MISCELLANEOUS
Section
2.1 Conditions
to Effectiveness
This
Amendment shall be effective upon the execution and delivery by both parties
of
this Amendment.
Section
2.2 Reference
to and Effect on the Purchase Agreement and the Servicing
Agreement
Each
reference in the Purchase Agreement to "this Agreement" or otherwise to
the
Purchase Agreement shall hereafter be deemed to refer to the Purchase Agreement
as amended hereby. Each reference to the Purchase Agreement in the Servicing
Agreement or in any other document or agreement executed in connection
therewith
or with the Servicing Agreement shall hereafter be deemed to refer to the
Purchase Agreement as amended hereby.
Section
2.3 Ratification
The
Purchase Agreement, as amended by this Amendment, is hereby ratified and
confirmed and shall continue unimpaired and in full force and effect in
accordance with the provisions thereof, as amended or modified on or prior
to
the date hereof and as hereby amended.
Section
2.4 Applicable
Law
This
Amendment shall be governed by and construed in accordance with the laws
of the
State of New York (including Section 5-1401 of the New York General
Obligations Law) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without giving
effect
to conflict of laws principles other than Section 5-1401 of the New York
General Obligations Law.
Section
2.5 Severability
Any
provision of this Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions of this Amendment and without
affecting the validity or enforceability of such or any other provision
in any
other jurisdiction.
10
Section
2.6 Counterparts
This
Amendment may be executed simultaneously in counterparts, each of which
shall be
deemed an original, and it shall not be necessary in making proof of this
Amendment to produce or account for more than one such counterpart for
each
party hereto.
[Signature
page follows]
11
the
Sellers and the Purchaser have caused this Regulation AB Amendment to Purchase
Agreement to be executed as of the date set forth above.
SELLERS:
|
WASHINGTON
MUTUAL BANK
a
savings association organized under the laws of the United
States
By:
______________________________________
Name:______________________________________
Title:
______________________________________
WASHINGTON
MUTUAL BANK, fsb
a
savings association organized under the laws of the United
States
By:
______________________________________
Name:______________________________________
Title:
______________________________________
|
PURCHASER:
|
XXXXXX
BROTHERS BANK, FSB
a
federal savings bank organized under the laws of the United
States
By:
______________________________________
Name:______________________________________
Title:
______________________________________
|
12
EXHIBIT
C
Schedule
of Serviced Mortgage Loans
[To
be
retained in a separate file at the Washington, DC offices of XxXxx Xxxxxx
LLP]
EXHIBIT
D
Servicing
Agreement
EXECUTION
VERSION
SERVICING
AGREEMENT
By
and Between
WASHINGTON
MUTUAL BANK, FA
(Servicer)
and
XXXXXX
BROTHERS BANK, FSB
(Owner)
Dated
as of September 1, 2003
Residential
First Lien Mortgage Loans
Schedule/Schedule
Flow Delivery Program
TABLE
OF CONTENTS
|
Page
|
||||
|
ARTICLE
1. DEFINITIONS
|
1
|
|||
|
ARTICLE
2. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
|
7
|
|||
|
Section
2.1.
|
Identification
of Mortgage Loans; Servicer to Act as Servicer
|
7
|
||
|
Section
2.2.
|
Liquidation
of Mortgage Loans
|
9
|
||
|
Section
2.3.
|
Collection
of Mortgage Loan Payments
|
10
|
||
|
Section
2.4.
|
Establishment
of Account; Deposits in Account
|
10
|
||
|
Section
2.5.
|
Permitted
Withdrawals from the Account
|
12
|
||
|
Section
2.6.
|
Establishment
of Escrow Account; Deposits in Escrow Account; Escrow
Analysis
|
12
|
||
|
Section
2.7.
|
Permitted
Withdrawals from the Escrow Account
|
13
|
||
|
Section
2.8.
|
Payment
of Taxes, Insurance and Other Charges
|
13
|
||
|
Section
2.9.
|
Transfer
of Accounts
|
14
|
||
|
Section
2.10.
|
Maintenance
of Hazard Insurance
|
14
|
||
|
Section
2.11.
|
Fidelity
Bond; Errors and Omissions Insurance
|
15
|
||
|
Section
2.12.
|
Title,
Management and Disposition of Real Estate Owned
|
16
|
||
|
Section
2.13.
|
Application
of Proceeds of Insurance to Repair or Restoration
|
17
|
||
|
Section
2.14.
|
Inspections
|
18
|
||
|
Section
2.15.
|
Maintenance
of Primary Mortgage Insurance Policies; Collections
Thereunder
|
18
|
||
|
Section
2.16.
|
Monthly
Advances by the Servicer
|
18
|
||
|
Section
2.17.
|
Compliance
With REMIC Provisions
|
19
|
||
|
Section
2.18.
|
Owner
to Cooperate; Release of Collateral Files
|
19
|
||
|
Section
2.19.
|
Credit
Reporting
|
20
|
||
|
ARTICLE
3. PAYMENTS TO THE OWNER
|
20
|
|||
|
Section
3.1.
|
Distributions
|
20
|
||
|
Section
3.2.
|
Reports
|
21
|
||
|
Section
3.3.
|
Delinquency
and Foreclosure Statements
|
23
|
||
|
ARTICLE
4. GENERAL SERVICING PROCEDURE; COVENANTS; REPRESENTATIONS AND
WARRANTIES
|
23
|
|||
|
Section
4.1.
|
Assumption
Agreements
|
23
|
||
|
Section
4.2.
|
Satisfaction
of Mortgages and Release of Collateral Files
|
24
|
||
|
Section
4.3.
|
Servicing
Compensation
|
25
|
||
|
Section
4.4.
|
Statements
as to Compliance
|
25
|
||
|
Section
4.5.
|
Annual
Independent Public Accountants’ Servicing Report
|
26
|
||
|
Section
4.6.
|
Owner’s
Right to Examine Servicer Records, etc.
|
26
|
||
|
Section
4.7.
|
Cooperation
|
27
|
||
|
Section
4.8.
|
Consents
and Approvals
|
27
|
||
i
|
ARTICLE
5. THE SERVICER
|
27
|
|||
|
Section
5.1.
|
Indemnification;
Third Party Claims
|
27
|
||
|
Section
5.2.
|
Servicer
Covenants; Merger or Consolidation of the Servicer
|
28
|
||
|
Section
5.3.
|
Limitation
on Liability of the Servicer and Others
|
28
|
||
|
Section
5.4.
|
Servicer
Not to Resign
|
29
|
||
|
Section
5.5.
|
Transfer
of Servicing
|
29
|
||
|
Section
5.6.
|
Transfer
of Mortgage Loans
|
29
|
||
|
Section
5.7.
|
Representations
and Warranties of the Servicer
|
30
|
||
|
Section
5.8.
|
Customer
Information
|
31
|
||
|
ARTICLE
6. DEFAULT
|
31
|
|||
|
Section
6.1.
|
Events
of Default
|
31
|
||
|
Section
6.2.
|
Waiver
of Defaults
|
33
|
||
|
Section
6.3.
|
Survival
of Certain Obligations and Liabilities of the Defaulted
Servicer
|
33
|
||
|
ARTICLE
7. TERMINATION
|
33
|
|||
|
Section
7.1.
|
Termination
of Agreement
|
33
|
||
|
Section
7.2.
|
Termination
of the Servicer Upon Unremedied Event of Default
|
33
|
||
|
ARTICLE
8. PASS-THROUGH AND WHOLE LOAN TRANSFERS
|
34
|
|||
|
Section
8.1.
|
Pass-Through
Transfers or Whole-Loan Transfers
|
34
|
||
|
Section
8.2.
|
Designation
of a Master Servicer
|
35
|
||
|
Section
8.3.
|
Servicer’s
Purchase Right
|
36
|
||
|
ARTICLE
9. MISCELLANEOUS PROVISIONS
|
37
|
|||
|
Section
9.1.
|
Successor
to the Servicer
|
37
|
||
|
Section
9.2.
|
Amendment
|
37
|
||
|
Section
9.3.
|
Recordation
of Agreement; Perfection of Security Interest; Further
Assurances
|
38
|
||
|
Section
9.4.
|
Duration
of Agreement
|
38
|
||
|
Section
9.5.
|
Governing
Law
|
38
|
||
|
Section
9.6.
|
General
Interpretive Principles
|
38
|
||
|
Section
9.7.
|
Reproduction
of Documents
|
39
|
||
|
Section
9.8.
|
Notices
|
39
|
||
|
Section
9.9.
|
Severability
of Provisions
|
40
|
||
|
Section
9.10.
|
Exhibits
and Schedules
|
40
|
||
|
Section
9.11.
|
Counterparts;
Successors and Assigns
|
40
|
||
|
Section
9.12.
|
Effect
of Headings
|
40
|
||
|
Section
9.13.
|
Other
Agreements Superseded; Entire Agreement
|
40
|
||
|
Section
9.14.
|
Attorneys’
Fees
|
40
|
||
ii
DESCRIPTION
OF ATTACHMENTS
|
FORM
OF REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
|
||
|
Exhibit
B
|
ACCOUNT
CERTIFICATION
|
|
|
Exhibit
C
|
ACCOUNT
LETTER AGREEMENT
|
|
|
Exhibit
D
|
ESCROW
ACCOUNT CERTIFICATION
|
|
|
Exhibit
E
|
ESCROW
ACCOUNT LETTER AGREEMENT
|
|
|
Exhibit
F
|
FORM
OF OFFICER’S CERTIFICATE
|
iii
SERVICING
AGREEMENT
This
SERVICING
AGREEMENT (this
“Agreement”)
dated
as of September 1, 2003, is between Washington Mutual Bank, FA, a savings
association organized under the laws of the United States, in its capacity
as
servicer (the “Servicer”),
and
Xxxxxx Brothers Bank, FSB, a federal savings bank, and its successors and
assigns, in its capacity as owner (the “Owner”).
PRELIMINARY
STATEMENT
WHEREAS,
pursuant to that certain Mortgage Loan Purchase and Sale Agreement of even
date
herewith among the Servicer, Washington Mutual Bank fsb and Washington Mutual
Bank, each as a seller (the “Sellers”)
and
the Owner as purchaser (the “Purchase
Agreement”),
and
in reliance upon the representations, warranties and covenants of the Servicer
contained herein and of the Sellers contained in the Purchase Agreement,
the
Owner has agreed to purchase from the Sellers, and the Sellers have agreed
to
sell to the Owner, without recourse and on a servicing-retained basis, certain
residential, first lien mortgage loans;
WHEREAS,
the
Servicer has agreed to act as Servicer and, on behalf of each of the Sellers
as
agent and subservicer, to service such mortgage loans for the Owner from
and
after the purchase by the Owner of such mortgage loans; and
WHEREAS,
the
Servicer and the Owner desire to prescribe the terms and conditions regarding
the management, servicing, and control of the mortgage loans purchased by
the
Owner pursuant to the Purchase Agreement;
NOW,
THEREFORE,
in
consideration of the mutual agreements and covenants herein contained and
other
good and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the Servicer and the Owner agree as follows:
ARTICLE
1.
DEFINITIONS
Capitalized
terms used in this Agreement shall have the meanings specified in the Purchase
Agreement, except that, whenever used herein, the following words and phrases
shall have the following meanings, unless the context otherwise
requires:
Acceptable
Servicing Procedures:
The
procedures, including prudent collection and loan administration procedures,
and
the standard of care employed by prudent mortgage servicers that service
mortgage loans of the same type as the Mortgage Loans in the jurisdictions
in
which the related Mortgaged Properties are located. Such standard of care
shall
not be lower than that the Servicer customarily employs and exercises in
servicing and administering similar mortgage loans for its own account and
shall
be in full compliance with all applicable federal, state and local laws,
ordinances, rules and regulations.
Account:
The
account or accounts created and maintained pursuant to Section 2.4 of this
Agreement.
1
Agreement:
This
Servicing Agreement, including all exhibits and schedules hereto, and all
amendments hereof and supplements hereto.
Applicable
Requirements:
With
respect to each Mortgage Loan, (i) the terms of the related Mortgage and
Mortgage Note, (ii) the federal, state, local and foreign laws, statutes,
rules, regulations, ordinances, standards, requirements, administrative rulings,
orders and processes pertaining to such Mortgage Loan, including but not
limited
to those pertaining to the processing, origination and servicing of the Mortgage
Loan, (iii) the requirements of the Owner as set forth in this Agreement
and (iv) Acceptable Servicing Procedures.
BIF:
The
Bank Insurance Fund.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking or
savings and loan institutions in the States of Washington, California, Illinois,
Nebraska or New York are authorized or obligated by law or executive order
to be
closed.
Code:
The
Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto.
Compensating
Interest Cap:
An
amount equal to 1/12 of the sum of:
(i) the
aggregate Unpaid Principal Balance of all (A) fixed rate Mortgage Loans and
(B)
Hybrid ARM Loans that bear interest at the initial fixed rate (other than
3/1
Hybrid Arm Loans), multiplied by 0.25%, and
(ii) the
aggregate Unpaid Principal Balance of all (A) ARM Loans, (B) Hybrid ARM Loans
that bear interest at an adjustable rate and (C) 3/1 Hybrid Arm Loans,
multiplied by 0.375%.
Condemnation
Proceeds:
All
awards or settlements in respect of a taking of all or part of a Mortgaged
Property by exercise of the power of eminent domain or
condemnation.
Customer
Information:
All
personal, nonpublic information about the Mortgagors that is supplied on
behalf
of the Mortgagors and is maintained by a party hereto.
Cut-off
Date:
With
respect to any Mortgage Loan purchased on a Closing Date, the cut-off date
specified in the Commitment Letter relating to the purchase and sale of the
related Loan Pool.
Defaulted
Servicer:
As
defined in Section 6.1.
Determination
Date:
The
thirteenth (13th) day of each month (or if such day is not a Business Day,
the
next Business Day), commencing in the month following the end of the calendar
month in which the initial Cut-off Date occurs. A Determination Date is related
to a Monthly Remittance Date if such Determination Date and such Monthly
Remittance Date occur in the same calendar month.
2
Disclosure
Document:
As
defined in Section 8.1(d).
Due
Date:
With
respect to any Mortgage Loan, the day of the month on which Monthly Payments
on
such Mortgage Loan are due, exclusive of any days of grace, which day shall
be
the first day of the month unless otherwise specified on the related Mortgage
Loan Schedule.
Due
Period:
With
respect to any Mortgage Loan, the period beginning on the first day of any
month
and ending on the last day of such month.
Eligible
Account:
An
account or accounts maintained with a Qualified Depository.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to
Section 2.6.
Escrow
Payments:
The
amounts constituting ground rents, taxes, assessments, water rates, sewer
rents,
municipal charges, Primary Mortgage Insurance Policy premiums, if any, fire
and
hazard insurance premiums, condominium charges and other payments required
to be
escrowed by the Mortgagor with the mortgagee pursuant to any Mortgage Loan
or
this Agreement.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 6.1.
Xxxxxx
Xxx:
Xxxxxx
Xxx (formerly known as the Federal National Mortgage Association) and any
successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be obtained by the Servicer pursuant to
Section 2.11.
Final
Recovery Determination:
With
respect to any defaulted Mortgage Loan or any REO Property, a determination
made
by the Servicer that all related Condemnation Proceeds, Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries that the Servicer,
in its
reasonable good faith judgment, expects to be finally recoverable have been
so
recovered. The Servicer shall maintain records, prepared by a servicing officer
of the Servicer, of each Final Recovery Determination.
GAAP:
Generally Accepted Accounting Principles, as promulgated by the Financial
Accounting Standards Board from time to time.
Indemnified
Party:
As
defined in Section 8.1(d).
Initial
Closing Date:
September 25, 2003.
Insurance
Proceeds:
Proceeds of any Primary Mortgage Insurance Policy, title policy, hazard
insurance policy or any other insurance policy covering a Mortgage Loan or
the
related Mortgaged Property, including any amounts required to be deposited
in
the Account pursuant to Section 2.10, to the extent such proceeds are not
to be applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with Applicable Requirements.
3
Late
Collections:
With
respect to any Mortgage Loan, all amounts received during any Due Period,
whether as late payments of Monthly Payments, or as Insurance Proceeds,
Liquidation Proceeds, Condemnation Proceeds or otherwise, which amounts
represent late payments or collections of Monthly Payments due but delinquent
for a previous Due Period and not previously recovered.
Liquidation
Proceeds:
Cash
received in connection with (i) the liquidation of a defaulted Mortgage Loan
(whether through the sale or assignment of the Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise) or (ii) the sale of the Mortgaged Property,
if
the Mortgaged Property is acquired in satisfaction of the Mortgage.
Master
Servicer:
As
defined in Section 8.2(a).
Master
Servicing Agreement:
As
defined in Section 8.2(a).
Monthly
Advance:
The
aggregate of the advances made by the Servicer on any Monthly Remittance
Date
pursuant to Section 2.16(a).
Monthly
Remittance Date:
The
eighteenth (18th) day of each month (or if such day is not a Business Day,
the
next Business Day) commencing in the month following the end of the calendar
month in which the initial Cut-off Date occurs. A Determination Date is related
to a Monthly Remittance Date if such Determination Date and such Monthly
Remittance Date occur in the same calendar month.
Moody’s:
Xxxxx’x
Investors Service, Inc. or any successor thereto.
Mortgage
Interest Rate:
With
respect to each Mortgage Loan, the annual rate at which interest accrues
on such
Mortgage Loan.
Net
Rate:
With
respect to each Mortgage Loan, the annual rate at which interest thereon
shall
be remitted to the Owner (in each case computed on the basis of a 360-day
year
consisting of twelve 30-day months), which annual rate shall be equal to
the
Mortgage Interest Rate less the Servicing Fee Rate.
Nonrecoverable
Advance:
Any
portion of any Servicing Advance or Monthly Advance previously made or proposed
to be made in respect of a Mortgage Loan by the Servicer hereunder that the
Servicer determines in its good faith judgment will not be ultimately
recoverable from Late Collections.
Officer’s
Certificate:
A
certificate signed by a Vice President or other authorized officer and delivered
to the Owner as required by this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Servicer, reasonably
acceptable to the Owner.
4
OTS:
The
Office of Thrift Supervision, or any successor thereto.
Owner:
Xxxxxx
Brothers Bank, FSB, a federal savings bank, and any successor owner of any
of
the Mortgage Loans.
Pass-Through
Transfer:
The
sale or transfer of some or all of the Mortgage Loans by the Owner to a trust
to
be formed as part of a publicly issued or privately placed mortgage backed
securities transaction.
Permitted
Investments:
Any one
or more of the following obligations or securities:
(i) direct
obligations of, or obligations fully guaranteed as to principal and interest
by,
the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase
obligations with respect to any security described in clause (i) above,
provided that the unsecured long-term obligations of the party agreeing to
repurchase such obligations are at the time rated by S&P or Moody’s in one
of its two highest rating categories;
(iii) federal
funds, certificates of deposit, time deposits, and bankers’ acceptances of any
bank or trust company incorporated under the laws of the United States or
any
state, provided that the long-term debt obligations of such bank or trust
company (or, in the case of the principal bank in a bank holding company
system,
the long-term debt obligations of the bank holding company) at the date of
acquisition thereof have been rated by S&P or Moody’s in one of its two
highest rating categories; and
(iv) commercial
paper of any corporation incorporated under the laws of the United States
or any
state thereof which on the date of acquisition has been rated by S&P or
Moody’s in its highest short-term rating category.
Portfolio
Loans:
As
defined in Section 8.3.
Prepayment
Charge:
With
respect to any Mortgage Loan, the prepayment premium or charge, if any, required
under the terms of the related Mortgage Note to be paid in connection with
a
Principal Prepayment in Full or a Principal Prepayment in Part, to the extent
permitted by applicable law.
Primary
Mortgage Insurance Policy:
With
respect to each Mortgage Loan, the policy of primary mortgage insurance
(including all endorsements thereto) issued with respect to such Mortgage
Loan,
if any, or any replacement policy.
Prime:
As of
any date of determination, the annual interest rate, adjusted daily, published
from time to time in The Wall Street Journal (Western Edition) as the “PRIME
RATE” in the “MONEY RATES” section. In the event that more than one such rate is
specified, “Prime” shall mean the greatest of such rates.
5
Principal
Prepayment:
Any
payment or other recovery of principal in full ( a “Principal
Prepayment in Full”)
or in
part (a “Principal
Prepayment in Part”)
of the
then-outstanding principal on a Mortgage Loan (other than Condemnation Proceeds,
Insurance Proceeds, and Liquidation Proceeds) that is received in advance
of its
scheduled Due Date and not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment. The term “Principal Prepayment” shall not refer to any
related Prepayment Charge.
Purchase
Agreement:
That
certain Mortgage Loan Purchase and Sale Agreement of even date herewith among
Washington Mutual Bank, FA, Washington Mutual Bank fsb and Washington Mutual
Bank as the sellers and the Owner as the purchaser.
Qualified
Depository:
Any of
the following: (i) a depository, the long-term unsecured debt obligations
of which are rated by Moody’s or S&P (or a comparable rating agency) in one
of its two highest rating categories, (ii) the corporate trust department
of a national bank, (iii) a depository that fully insures the Account and
the Escrow Account with insurance provided by the FDIC, or (iv) the
Servicer.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to REMICs, which appear
at
Section 860G of Subchapter M of Chapter 1 of the Code and related
provisions, and regulations promulgated thereunder, as in effect from time
to
time.
REO
Management Fee:
With
respect to each REO Property, an amount equal to $1,500.
REO
Property:
A
Mortgaged Property acquired in foreclosure or by deed in lieu of foreclosure,
as
described in Section 2.12.
SAIF:
The
Savings Association Insurance Fund.
S&P:
Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc., or its successor in interest.
Servicer:
Washington Mutual Bank, FA, a savings association organized under the laws
of
the United States, or its permitted successor in interest, or any successor
to
the Servicer under this Agreement appointed as herein provided.
Servicer’s
Information:
As
defined in Section 8.1(d).
Servicing
Advances:
All
customary, reasonable, and necessary “out of pocket” costs and expenses,
including reasonable attorneys’ fees and disbursements, incurred by the Servicer
in the performance of its servicing obligations hereunder, including, without
limitation, costs related to (i) the preservation, restoration, and
protection of the Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation
of the Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage and (iv) Servicer’s compliance with the obligations set
forth in Sections 2.2, 2.3, 2.8, 2.10, 2.12 and 2.15 of this
Agreement.
6
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee payable to the
Servicer pursuant to Section 4.3 as compensation for servicing and
administering such Mortgage Loan. Such fee shall, for a period of one full
month, be equal to one-twelfth of the product of (i) the related Servicing
Fee Rate, multiplied by (ii) the outstanding Unpaid Principal Balance of
such Mortgage Loan. Such fee shall be payable monthly and shall be computed
on
the basis of the same principal amount and period respecting which any related
interest payment on such Mortgage Loan is computed.
Transferred
Loans:
As
defined in Section 8.3.
USAP:
As
defined in Section 4.5.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Owner to a third
party, which sale or transfer is not a Pass-Through Transfer.
ARTICLE
2.
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
2.1. Identification
of Mortgage Loans; Servicer to Act as Servicer
(a) From
each
Closing Date, the Servicer, as independent contract servicer, shall commence
servicing and administering the Mortgage Loans purchased by the Owner on
such
Closing Date. Such servicing shall be in accordance with this Agreement and
Acceptable Servicing Procedures, and, except as otherwise expressly provided
in
this Agreement, the Servicer shall have full power and authority, acting
alone,
to do any and all things in connection with such servicing and administration
that the Servicer may deem necessary or desirable and consistent with the
terms
of this Agreement, including, without limitation, all action permitted or
required to be taken under any related Primary Mortgage Insurance Policy.
In
servicing and administering the Mortgage Loans, the Servicer shall employ
Acceptable Servicing Procedures, except that the Servicer shall employ the
procedures set forth in this Agreement whenever the Acceptable Servicing
Procedures conflict with the requirements under this Agreement (provided
that in
no event shall this Section 2.1 be interpreted to permit the Servicer to
act in
conflict with any applicable federal, state and local laws, ordinances, rules
or
regulations). The Servicer shall at all times act in the best interests of
the
Owner in performing hereunder.
(b) The
documents comprising the Collateral File and the Credit File with respect
to
each Mortgage Loan serviced hereunder and that are delivered to the Servicer,
together with all other documents with respect to each such Mortgage Loan
that
are prepared by or which come into the possession of the Servicer, shall
immediately vest in the Owner and shall be held and maintained in trust by
the
Servicer at the will of the Owner and in a custodial capacity only for the
sole
purpose of servicing or supervising the servicing of the related Mortgage
Loans.
The documents comprising each Collateral File and each Credit File and all
related documents that come into the possession of the Servicer and are so
held
by the Servicer shall be appropriately marked to clearly reflect the ownership
interest of the Owner in such Collateral File and Credit File and related
documents. The Servicer shall release its custody of any such documents only
in
accordance with written instructions from the Owner, unless such release
is
required as incidental to the Servicer’s servicing of the Mortgage Loans or is
in connection with a repurchase or substitution of any Mortgage Loan pursuant
to
Section 3.3 of the Purchase Agreement.
7
(c) Consistent
with the terms of this Agreement, the Servicer may waive, modify or vary
any
term of any Mortgage Loan or consent to the postponement of strict compliance
with any such term or in any manner grant indulgence to any Mortgagor if,
in the
Servicer’s reasonable and prudent determination, such waiver, modification,
variation, postponement or indulgence is in the best interests of the Owner;
provided, however, that the Servicer shall not permit any modification with
respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer
or forgive the payment of any principal or interest payments, reduce the
outstanding principal amount (except for actual payments of principal) or
extend
the related Maturity Date (unless the Mortgagor is in default with respect
to
the Mortgage Loan or such default is, in the judgment of the Servicer, imminent
and the Servicer has obtained the prior written consent of the Owner). Without
limiting the generality of the foregoing, the Servicer is hereby authorized
and
empowered to execute and deliver on behalf of itself and the Owner all
instruments of satisfaction, cancellation, full release, or partial release
or
discharge, and all other comparable instruments with respect to the Mortgage
Loans and the Mortgaged Properties. If reasonably required by the Servicer,
the
Owner shall furnish the Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing
and
administrative duties under this Agreement.
(d) As
to
each ARM Loan, the Servicer shall make periodic Mortgage Interest Rate and
Monthly Payment adjustments, as applicable, and execute and deliver all
appropriate notices regarding the same, in strict compliance with Applicable
Requirements. The Servicer shall establish procedures to monitor the Index
in
order to ensure that it uses the appropriate value for the Index in determining
an interest rate change. If the Servicer fails to make a timely and correct
Mortgage Interest Rate adjustment or Monthly Payment adjustment, the Servicer
shall use its own funds to satisfy any shortage in the Mortgagor’s Monthly
Payment for so long as such shortage continues. In the event the Index, as
specified in the related Mortgage Note, becomes unavailable for any reason,
the
Servicer shall select an alternative index based on comparable information,
in
accordance with the terms of the Mortgage Note, and such alternative index
shall
thereafter be the Index for such Mortgage Loan. In such event, the Servicer
shall also determine a new Gross Margin. The new Gross Margin shall be the
difference between (x) the average of the original Index for the most recent
three-year period that ends on the last date the original Index was available
plus the Gross Margin on the last date the original Index was available and
(y)
the average of the new Index for the most recent three-year period that ends
on
that date (or if not available for such three-year period, for such time
as it
is available), rounded as provided in the Mortgage Note.
(e) In
connection with the servicing and administration of the Mortgage Loans and
consistent with Acceptable Servicing Procedures, this Agreement and the Purchase
Agreement, the Servicer shall have full power and authority to execute and
deliver or cause to be executed and delivered on behalf of the Owner such
instruments of assignment or other comparable instruments as the Servicer
shall
deem appropriate in order to register any Mortgage Loan on the MERS® System or
cause the removal of any Mortgage Loan from registration on the MERS®
System.
8
Section
2.2. Liquidation
of Mortgage Loans
(a) In
the
event that any payment due under any Mortgage Loan is not paid when the same
becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Servicer shall proceed diligently
to
collect all payments due and shall take such action, including commencing
foreclosure, as it shall reasonably deem to be in the best interests of the
Owner.
(b) Notwithstanding
the foregoing provisions of this Section 2.2, with respect to any Mortgage
Loan as to which the Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Servicer shall neither (i) obtain title to such
Mortgaged Property as a result of or in lieu of foreclosure or otherwise,
(ii)
acquire possession of, nor (iii) take any other action with respect to, such
Mortgaged Property if, as a result of any such action, the Owner would be
considered to hold title to, to be a mortgagee-in-possession of, or to be
an
owner or operator of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as
amended from time to time, or any comparable law, unless the Servicer has
either
(x) obtained the written consent of the Owner, or (y) previously determined,
based on its reasonable judgment and a prudent report prepared by a Person
who
regularly conducts environmental audits using customary industry standards,
that:
(i) such
Mortgaged Property is in compliance with applicable environmental laws or,
if
not, that it would be in the best economic interest of the Owner to take
such
actions as are necessary to bring the Mortgaged Property into compliance
therewith; and
(ii) there
are
no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under
any
federal, state or local law or regulation, or that if any such materials
are
present for which such action could be required, that it would be in the
best
economic interest of the Owner to take such actions with respect to the affected
Mortgaged Property.
The
cost
of the environmental audit report contemplated by this Section 2.2(b) shall
be advanced by the Servicer as a Servicing Advance, subject to the Servicer’s
right to be reimbursed therefor from the Account and the Servicer’s right to
make a judgment about whether any such advance would be a Nonrecoverable
Advance.
(c) If
the
Servicer has (i) determined that it is in the best economic interest of the
Owner to take such actions as are necessary to bring any such Mortgaged Property
into compliance with applicable environmental laws, or to take such action
with
respect to the containment, clean-up or remediation of hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials affecting
any such Mortgaged Property, or (ii) obtained the written consent of the
Owner,
in each case as described above, then the Servicer shall take such action
as it
deems to be in the best economic interest of the Owner (or as otherwise directed
by the Owner). The cost of any such compliance, containment, clean-up or
remediation shall be advanced by the Servicer as a Servicing Advance, subject
to
the Servicer’s right to be reimbursed therefor from the Account and the
Servicer’s right to make a judgment about whether any such advance would be a
Nonrecoverable Advance.
9
Section
2.3. Collection
of Mortgage Loan Payments
Continuously
from the related Closing Date until the principal and interest on all of
the
Mortgage Loans are paid in full, the Servicer shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable. With respect to those Mortgage Loans, if any, as
to
which the Servicer collects Escrow Payments, the Servicer shall ascertain
or
estimate annual ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, fire and hazard insurance premiums, condominium charges,
Primary Mortgage Insurance Policy premiums and all other charges that, as
provided in any Mortgage, shall become due and payable, to the end that the
Escrow Payments payable by the Mortgagors shall be sufficient to pay such
charges as and when they become due and payable. The Servicer shall not be
required to institute or join in litigation with respect to collection of
any
payment (whether under a Mortgage, Mortgage Note, Primary Mortgage Insurance
Policy or otherwise or against any public or governmental authority with
respect
to a taking or condemnation) if in the Servicer’s reasonable judgment the
Servicer believes that the costs and expenses relating thereto would be
Nonrecoverable Advances. The Servicer shall be entitled to be reimbursed
from
the Account for any costs, expenses or other liabilities incurred by the
Servicer in connection with any such litigation solely from the proceeds
of the
related Mortgage Loan. The Servicer’s right to such reimbursement shall be prior
to the Owner’s right to such proceeds.
Section
2.4. Establishment
of Account; Deposits in Account
(a) The
Servicer shall establish and maintain one or more Accounts (collectively,
the
“Account”)
entitled “Washington Mutual Bank, FA, in trust for Xxxxxx Brothers Bank, FSB, as
Owner, and any successor Owner.” The Account shall be an Eligible Account,
established with an institution that is a Qualified Depository and maintained
as
a segregated account separate and apart from any of the Servicer’s own funds and
general assets. The existence of any such Account shall be evidenced by (i)
a
certification substantially in the form of Exhibit
B
attached
hereto, in the case of an account established with the Servicer, or (ii)
a
letter agreement substantially in the form of Exhibit C
attached
hereto in the case of an account held by an institution other than the Servicer.
In either case, the Servicer shall deliver a copy of such certification or
letter agreement to the Owner on or prior to the Initial Closing
Date.
(b) The
Servicer shall, upon receipt (and in all events by not later than the end
of the
second Business Day following receipt thereof), deposit in the Account and
retain therein, the following payments and collections received or made by
the
Servicer subsequent to the related Cut-off Date:
(i) the
principal portion of all Monthly Payments on the Mortgage Loans;
10
(ii) the
interest portion of all Monthly Payments on the Mortgage Loans less the
Servicing Fee;
(iii) all
Principal Prepayments in Part and Principal Prepayments in Full;
(iv) all
Liquidation Proceeds;
(v) all
Insurance Proceeds, other than Insurance Proceeds to be held in the Escrow
Account and applied to the restoration and repair of the Mortgaged Property
or
released to the Mortgagor in accordance with Applicable
Requirements;
(vi) all
Condemnation Proceeds which are not released to the Mortgagor in accordance
with
the Owner’s written consent and Applicable Requirements;
(vii) any
amount required to be deposited in the Account pursuant to Sections 2.4(d),
2.10, 2.12(c), 2.12(e) or 4.2(b);
(viii) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Section 3.3 of the Purchase Agreement and all amounts required to be
deposited in connection with the substitution of any Qualified Substitute
Mortgage Loan pursuant to the Purchase Agreement; and
(ix) with
respect to each Principal Prepayment in Full, an amount (to be paid by the
Servicer out of its own funds without reimbursement therefor) which, when
added
to all amounts allocable to interest received in connection with such Principal
Prepayment in Full, equals one month’s interest on the amount of principal so
prepaid at the Net Rate, provided, however, that the aggregate of deposits
made
by the Servicer pursuant to this clause (ix) in respect of any Monthly
Remittance Date shall not exceed the Compensating Interest Cap.
(c)
The
Servicer shall, no later than 24 hours prior to the next Monthly Remittance
Date, deposit in the Account all Monthly Advances.
(d) The
Servicer may cause the funds on deposit from time to time in the Account
to be
invested in Permitted Investments, which Permitted Investments shall mature
not
later than the Business Day immediately preceding the next Monthly Remittance
Date following the date such funds are invested. All Permitted Investments
shall
be made in the name of the Servicer or its nominee. All income and gain realized
from any Permitted Investment shall be for the benefit of the Servicer and
shall
be subject to its withdrawal or order from time to time. The Servicer shall
indemnify the Owner for any loss incurred in respect of any Permitted Investment
by such Servicer, and the amount of such loss shall be deposited in the Account
by the Servicer out if its own funds, without reimbursement therefor, no
later
than 24 hours prior to the next Monthly Remittance Date following the date
of
such loss.
11
Section
2.5. Permitted
Withdrawals from the Account
The
Servicer may, from time to time, withdraw funds from the Account for the
following purposes:
(i) to
make
payments and distributions to the Owner in the amounts and in the manner
provided for in Section 3.1, and to pay itself any unpaid Servicing Fees,
unpaid REO Management Fees and other servicing compensation in accordance
with
Section 4.3;
(ii) to
reimburse itself for any unreimbursed Servicing Advances or Monthly Advances
made with respect to any Mortgage Loan; provided that the Servicer’s right to
reimburse itself pursuant to this clause (ii) is limited to any amounts
collected or received by the Servicer with respect to such Mortgage
Loan;
(iii) to
pay to
itself any interest earned on funds deposited in the Account;
(iv) to
make
any payment or reimburse itself for any amount pursuant to Sections 2.12(c),
2.12(e), 5.1(a) or 5.3;
(v) to
reimburse itself for any Monthly Advance or Servicing Advance previously
made
that it has determined to be a Nonrecoverable Advance;
(vi) if
there
shall be amounts deposited in error or there shall be amounts deposited in
the
Account not required to be deposited therein, including the Servicing Fee
and
other servicing compensation, to withdraw such amount from the Account any
provision herein to the contrary notwithstanding;
(vii) to
transfer funds to another Qualified Depository in accordance with
Section 2.9; and
(viii) to
clear
and terminate the Account upon the termination of this Agreement in accordance
with Article 7.
Section
2.6. Establishment
of Escrow Account;
Deposits in Escrow Account; Escrow Analysis
(a) The
Servicer shall segregate and hold separate and apart from any of its own
funds
and general assets all Escrow Payments collected and received pursuant to
the
Mortgage Loans and shall establish and maintain one or more Escrow Accounts
(collectively, the “Escrow
Account”),
in
the form of time deposit or demand accounts, which may be interest bearing,
entitled “Washington Mutual Bank, FA, in trust for Xxxxxx Brothers Bank, FSB, as
Owner, and any successor Owner, and certain Mortgagors.” The Escrow Account
shall be an Eligible Account established with a Qualified Depository. The
creation of any Escrow Account shall be evidenced by (i) a certification
substantially in the form of Exhibit
D
attached
hereto, in the case of an account established with the Servicer, or (ii)
a
letter agreement substantially in the form of Exhibit E
attached
hereto, in the case of an account held by an institution other than the
Servicer. In either case, the Servicer shall deliver a copy of such
certification or letter agreement to the Owner on or prior to the Initial
Closing Date.
12
(b) The
Servicer shall, upon receipt (and in all events by not later than the end
of the
second Business Day following receipt thereof, or sooner if required by
applicable law), deposit in the Escrow Account and retain therein: (i) all
Escrow Payments collected on account of the Mortgage Loans for the purpose
of
effecting timely payment of escrow items as required under the terms of this
Agreement and (ii) all amounts representing proceeds of any hazard
insurance policy that are to be applied to the restoration or repair of the
related Mortgaged Property. The Servicer shall make withdrawals from the
Escrow
Account only in accordance with Section 2.7. The Servicer shall be entitled
to retain any interest earned on funds deposited in the Escrow Account other
than interest on escrowed funds required by law to be paid to the Mortgagor
and,
to the extent required by law, the Servicer shall pay interest on escrowed
funds
to the Mortgagor without right of reimbursement therefor notwithstanding
that
the Escrow Account maintained by the Servicer may not bear interest or that
the
interest earned on such escrowed funds is insufficient for such
purpose.
Section
2.7. Permitted
Withdrawals from the Escrow Account
Withdrawals
from the Escrow Account maintained by the Servicer may be made by the Servicer
only (i) to effect timely payments of ground rents, taxes, assessments,
sewer rents, municipal charges, water rates, insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage, (ii) to reimburse the Servicer for any
Servicing Advance made by the Servicer pursuant to Sections 2.8 and 2.10
with
respect to a related Mortgage Loan, (iii) to refund to any Mortgagor any
funds found to be in excess of the amounts required under the terms of the
related Mortgage Loan, (iv) for transfer to the Account in accordance with
the terms of this Agreement, (v) for restoration or repair of a Mortgaged
Property, provided the provisions of Section 2.13 have been complied with,
(vi) to pay to the Mortgagor, to the extent required by Applicable
Requirements, interest on the funds deposited in the Escrow Account,
(vii) to pay to itself any interest earned on funds deposited in the Escrow
Account (and not required to be paid to the Mortgagor), (viii) to remove
funds
inadvertently placed in the Escrow Account by the Servicer, or (ix) to
clear and terminate the Escrow Account upon the termination of this Agreement,
in accordance with Article 7.
Section
2.8. Payment
of Taxes, Insurance and Other Charges
With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of property taxes, assessments and other charges that
are
or may become a lien upon the related Mortgaged Property, the status of Primary
Mortgage Insurance premiums, if any, and the status of fire and hazard insurance
coverage and flood insurance, all as required hereunder. If a Mortgage Loan
requires Escrow Payments, the Servicer shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date
in a
manner consistent with Acceptable Servicing Procedures, employing for such
purpose deposits of the Mortgagor in the Escrow Account that shall have been
estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. If a Mortgage Loan
does
not require Escrow Payments, or if there are insufficient funds in the related
Escrow Account, the Servicer shall cause all such bills to be paid on a timely
basis and shall from its own funds (if necessary) make a Servicing Advance
for
timely payment of all such bills. The Servicer shall monitor the payment
status
of such charges (including renewal premiums) by the related Mortgagor. The
Servicer shall effect payment of such charges in a manner consistent with
Acceptable Servicing Procedures and, in all events, prior to the foreclosure
of
any lien against the Mortgaged Property resulting from non-payment of such
property taxes, assessments and other charges and prior to the termination
of
any such insurance coverage. Notwithstanding anything herein to the contrary,
if
a tax lien is imposed on the Mortgaged Property and the taxing authority
forecloses on such Mortgaged Property, the Servicer shall indemnify the Owner
in
accordance with the provisions of Section 5.1 of this Agreement.
13
Section
2.9. Transfer
of Accounts
The
Servicer may, from time to time, transfer the Account or the Escrow Account
to a
different Qualified Depository. The Servicer shall notify the Owner of any
such
transfer within ten (10) Business Days of transfer.
Section
2.10. Maintenance
of Hazard Insurance
(a) The
Servicer shall cause to be maintained for each Mortgage Loan serviced by
it fire
and hazard insurance with extended coverage customary in the area where the
related Mortgaged Property is located, in an amount which is at least equal
to
the lesser of (i) 100% of the replacement value of the improvements
securing the Mortgage Loan, or (ii) the Unpaid Principal Balance of the
Mortgage Loan (so long as it equals 80% of the insurable value of the
improvements); provided that in any case such amount shall be sufficient
to
prevent the Mortgagor and/or Mortgagee from becoming a co-insurer. If the
Mortgaged Property is in an area that, at the time of origination of the
related
Mortgage Loan, is identified on a flood hazard boundary map or flood insurance
rate map issued by the Federal Emergency Management Agency as having special
flood hazards (and such flood insurance was then available), the Servicer
shall
cause to be maintained a flood insurance policy meeting the requirements
of the
current guidelines of the Federal Insurance Administration with a generally
acceptable insurance carrier, if such insurance is available. Such flood
insurance shall be in an amount representing coverage not less than the least
of
(i) the Unpaid Principal Balance of the Mortgage Loan, (ii) the full
insurable value of the improvements securing such Mortgage Loan and
(iii) the maximum amount of insurance available under the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, each
as
amended. The Servicer shall also maintain on REO Property (x) fire and hazard
insurance with extended coverage in an amount that is at least equal to the
maximum insurable value of the improvements that are a part of such property,
(y) liability insurance and (z) to the extent required and available under
the
National Flood Insurance Act of 1968 and the Flood Disaster Protection Act
of
1973, each as amended, flood insurance in an amount as provided above. Any
amounts collected by the Servicer under any such policies shall be paid over
or
applied by the Servicer in accordance with Applicable Requirements whether
(i)
for the restoration or repair of the Mortgaged Property, subject to the related
Mortgage, (ii) for release to the Mortgagor, or (iii) for application in
reduction of the Mortgage Loan, in which event such amounts shall be deposited
in the Account, as provided in Section 2.4. It is understood and agreed
that no earthquake or other additional insurance need be maintained by the
Servicer on any Mortgage Loan or property acquired in respect of a Mortgage
Loan, other than as required under applicable laws and regulations as shall
at
any time be in force. All policies required hereunder shall be endorsed with
standard mortgagee clauses with loss payable to the Servicer and shall provide
for at least 30 days prior written notice to the Servicer of any cancellation,
reduction in amount, or material change in coverage. The Servicer shall not
interfere with the Mortgagor’s freedom of choice in selecting either the
Mortgagor’s insurance carrier or agent upon any policy renewal; provided,
however, that upon any such policy renewal, the Servicer shall accept such
insurance policies only from insurance companies that (A) have a rating of
B:III
or better in Best’s Key Rating Guide or a financial performance index rating of
6 or better in Best’s Insurance Reports and (B) are licensed to do business in
the jurisdiction in which the related Mortgaged Property is
located.
14
If
a
Mortgage is secured by a unit in a condominium project, the Servicer shall
verify that the coverage required of the owner’s association, including hazard,
flood, liability, and fidelity coverage, is being maintained in accordance
with
the current Xxxxxx Mae requirements, and secure from the owner’s association its
agreement to notify the Servicer promptly of any change in the insurance
coverage or of any condemnation or casualty loss that may have a material
adverse effect on the value of the Mortgaged Property as security.
(b) If
the
Servicer, as servicer for the benefit of the Owner, shall obtain and maintain
a
blanket policy that would meet the requirements of Xxxxxx Xxx if Xxxxxx Xxx
were
the purchaser of the Mortgage Loans, insuring against loss to the Owner as
mortgagee from damage to any or all of the Mortgaged Properties, then, to
the
extent such blanket policy (i) provides coverage, without coinsurance, in
an amount equal to the aggregate outstanding Unpaid Principal Balance of
the
Mortgage Loans, (ii) otherwise complies with the requirements of
Section 2.10(a) and (iii) contains a deductible not greater than
$10,000, the Servicer shall be deemed conclusively to have satisfied its
obligations under Section 2.10(a); provided, however, that if there shall
have been one or more of such losses the Servicer shall deposit in the Account,
as provided in Section 2.4, out of the Servicer’s own funds and without
reimbursement therefor, the difference, if any, between the amount that would
have been payable under a policy complying with Section 2.10(a) and
the amount paid under the blanket policy permitted under this
Section 2.10(b). At the request of the Owner, the Servicer shall cause to
be delivered to the Owner a certified true copy of such policy and a statement
from the insurer thereunder that such policy shall not be terminated or
materially modified without 30 days’ prior written notice to the
Owner.
Section
2.11. Fidelity
Bond; Errors and Omissions Insurance
The
Servicer shall maintain, at its own expense, with companies that meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac, a blanket fidelity bond and an
errors
and omissions insurance policy, with broad coverage on all officers, employees,
agents and other persons acting in any capacity that would require such persons
to handle funds, money, documents or papers relating to the Mortgage Loans
(collectively, the “Servicer
Employees”).
Any
such fidelity bond and errors and omissions insurance shall be in the form
of
the Mortgage Banker’s Blanket Bond and shall protect and insure the Servicer
against losses relating to forgery, theft, embezzlement, fraud, errors and
omissions, failure to maintain any insurance policies required under this
Agreement and negligent acts of Servicer Employees. Such fidelity bond shall
also protect and insure the Servicer against losses relating to the release
or
satisfaction of a Mortgage without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 2.11 requiring
such fidelity bond and errors and omissions insurance shall diminish or relieve
the Servicer from its duties and obligations as set forth in this Agreement.
The
terms of any such fidelity bond and errors and omissions insurance policy
shall
be at least equal to the corresponding amounts required by Xxxxxx Mae in
the
Xxxxxx Xxx MBS Selling and Servicing Guide or by Xxxxxxx Mac in the Xxxxxxx
Mac
Seller’s and Servicer’s Guide, as amended or restated from time to time. At the
request of the Owner, the Servicer shall cause to be delivered to the Owner
a
certified true copy of such fidelity bond and errors and omissions insurance
policy and a statement from the surety and the insurer that such fidelity
bond
and errors and omissions insurance policy shall not be terminated or materially
modified without 30 days’ prior written notice to the Owner.
15
Section
2.12. Title,
Management and Disposition of Real Estate Owned
(a) If
title
to any Mortgaged Property is acquired in foreclosure or by deed in lieu of
foreclosure (“REO
Property”),
the
deed or certificate of sale shall be taken in the name of the Owner, or in
the
name of such Person or Persons designated by the Owner; provided, however,
that
(i) the Owner shall not designate the Servicer as holder without the Servicer’s
prior written consent and (ii) such designated Person or Persons shall
acknowledge in writing that such title is to be held as nominee for the Owner.
The Servicer shall provide written notice to the Owner after any REO Property
is
acquired in foreclosure or by deed in lieu of foreclosure.
(b) The
Servicer, shall manage, conserve, protect, and operate each REO Property
solely
for the purpose of its prompt disposition and sale. The Servicer shall either
itself, or through an agent selected by the Servicer, manage, conserve, protect
and operate the REO Property in accordance with Acceptable Servicing Procedures.
The Servicer shall attempt to sell the same (and may temporarily rent the
same)
on such terms and conditions as the Servicer deems to be in the best interests
of the Owner. If a REMIC election has been made with respect to the arrangement
under which the related Mortgage Loan is held and the Servicer has received
written notice from the Owner that a REMIC election has been made with respect
to such Mortgage Loan, the Servicer shall use its best efforts to dispose
of the
REO Property as soon as practicable and shall sell such REO Property, in
any
event, within three (3) years after title has been taken to such REO
Property (unless the Servicer determines, and gives the Owner appropriate
notice
that a longer period is necessary for the orderly liquidation of such REO
Property).
(c) The
Servicer shall collect all revenues arising from the operation of REO Property.
The Servicer shall deposit, or cause to be deposited, all such revenues in
the
Account in accordance with Section 2.4. The Servicer may use all such
revenues and, if any thereof have been deposited in the Account, withdraw
such
revenues therefrom as is necessary for the proper operation, management and
maintenance of any REO Property, including, but not limited to, the cost
of
maintaining any hazard insurance pursuant to Section 2.10 and the fees of
any managing agent acting on behalf of the Servicer. The Servicer shall use
reasonable efforts to dispose of the REO Property at such price and upon
the
terms and conditions as the Servicer deems to be in the best interest of
the
Owner.
(d) The
Servicer shall also maintain on each REO Property fire and hazard insurance
with
extended coverage, liability insurance, and flood insurance in accordance
with
the provisions of Section 2.10.
16
(e) The
proceeds of sale of an REO Property shall be deposited in the Account in
accordance with Section 2.4. The Servicer shall apply the sale proceeds of
any REO Property (i) first to pay the expenses of such sale, (ii) second
to
reimburse itself for any related unpaid Servicing Fees, unpaid REO Management
Fees and unreimbursed Servicing Advances and Monthly Advances and (iii) the
balance to be distributed to the Owner. If the sale proceeds have been deposited
in the Account, the Servicer may withdraw from the Account the amounts necessary
to make such payments and reimbursements. The Servicer shall undertake to
sell
the REO Property at such price and upon the terms and conditions as the Servicer
deems to be in the best interest of the Owner.
(f) Upon
request, with respect to any REO Property, the Servicer shall furnish to
the
Owner a statement covering the Servicer’s efforts in connection with the sale of
that REO Property and any rental of the REO Property incidental to the sale
thereof for the previous month (together with an operating statement for
such
REO Property). Such statement shall be accompanied by such other information
as
the Owner shall reasonably request. The Servicer shall maintain separate
accounting for each REO Property.
(g) The
Owner
hereby constitutes and appoints the Servicer as its true and lawful
attorney-in-fact, with full power and authority to sign, execute, acknowledge,
deliver, file for record and record any instrument on its behalf and to perform
such other act or acts as may be customarily and reasonably necessary and
appropriate to effectuate the transactions contemplated by this
Section 2.12, in each case as fully as the Owner might or could do. The
Owner ratifies and confirms each action that the Servicer, as such
attorney-in-fact, shall lawfully take or cause to be taken by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this power of attorney, and may be satisfied that this power
of
attorney shall continue in full force and effect and has not been revoked
unless
this Agreement is terminated as provided herein. If requested by the Servicer,
the Owner shall furnish the Servicer with any instrument or document necessary
or appropriate to evidence or confirm the power of attorney granted in this
Section 2.12(g), including one or more separate instruments or documents in
recordable form for recordation in any jurisdiction in which any Mortgaged
Property is located.
(h) Notwithstanding
anything to the contrary contained in this Agreement, the Owner may, at the
Owner’s sole option, terminate the Servicer as servicer of any such REO Property
without payment of any termination fee, provided that the Servicer shall
on the
date said termination takes effect be reimbursed for any unreimbursed advances
of the Servicer’s funds made pursuant to Section 2.16 and any unreimbursed
Servicing Advances and Servicing Fees in each case relating to the Mortgage
Loan
underlying such REO Property. In the event of any such termination, the
provisions of Section 9.1 shall apply to said termination and the transfer
of servicing responsibilities with respect to such REO Property to the Owner
or
its designees.
Section
2.13. Application
of Proceeds of Insurance to Repair or Restoration
The
Servicer shall collect the proceeds from all policies of insurance required
to
be maintained pursuant to Section 2.10 with respect to all losses that may
occur. The Servicer may remit such proceeds to the Mortgagor for the restoration
or repair of the related property and shall otherwise take such actions in
connection with such restoration and repair in a manner consistent with
Acceptable Servicing Procedures.
17
Section
2.14. Inspections
The
Servicer shall conduct inspections of the Mortgaged Properties at such times
and
in a manner consistent with Acceptable Servicing Procedures and shall maintain
a
written report of all such inspections. If any Mortgage Loan is more than
sixty
(60) days delinquent, the Servicer shall promptly inspect the Mortgaged
Property.
Section
2.15. Maintenance
of Primary Mortgage Insurance Policies; Collections
Thereunder
The
parties acknowledge that, as of any Closing Date, not all Mortgage Loans
purchased on such Closing Date are covered by Primary Mortgage Insurance.
In the
event that any Mortgage Loans are covered by a Primary Mortgage Insurance
Policy
on the related Closing Date or subsequently become covered by a Primary Mortgage
Insurance Policy, the provisions set forth below shall apply.
(a) The
Servicer shall maintain in full force and effect any Primary Mortgage Insurance
Policy covering a Mortgage Loan serviced by the Servicer. The Servicer shall
cause the premium for any such Primary Mortgage Insurance Policy to be paid
on a
timely basis and shall from its own funds, if necessary, make a Servicing
Advance to pay the premium on a timely basis. The Servicer shall not cancel
or
refuse to renew any such Primary Mortgage Insurance Policy in effect on the
related Closing Date, unless cancellation or non-renewal is required by
applicable law or regulation. The Servicer shall not take any action or fail
to
take any action which would result in non-coverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the
Servicer, would have been covered thereunder. In connection with any assumption
or substitution agreement entered into or to be entered into pursuant to
Section 4.1, the Servicer shall promptly notify the insurer under the
related Primary Mortgage Insurance Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and
shall
take all actions which may be required by such insurer as a condition to
the
continuation of coverage under such Primary Mortgage Insurance Policy. If
such
Primary Mortgage Insurance Policy is terminated as a result of such assumption
or substitution of liability, the Servicer shall obtain a replacement Primary
Mortgage Insurance Policy as provided above.
(b) As
part
of its activities as servicer of the Mortgage Loans, the Servicer agrees
to
prepare and present, on behalf of itself and the Owner, claims under any
Primary
Mortgage Insurance Policy in a timely fashion in accordance with the terms
thereof and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Mortgage Insurance Policy
respecting a defaulted Mortgage Loan.
Section
2.16. Monthly
Advances by the Servicer
(a) Not
later
than the close of business on the Business Day preceding each Monthly Remittance
Date, the Servicer shall deposit in the Account an amount equal to all payments
not previously advanced by the Servicer of principal and interest at the
Net
Rate that were (i) due on any Mortgage Loan during the Due Period that commences
in the same month in which such Monthly Remittance Date occurs, (ii) not
received as of the close of business on the related Determination Date (whether
or not deferred) and (iii) not due on or prior to the related Cut-off Date
(the
aggregate of all such amounts, the “Monthly
Advance”).
In
lieu of making all or a portion of any Monthly Advance, the Servicer may
cause
to be made an appropriate entry in its records relating to the Account that
funds in such account, including but not limited to any amounts received
in
respect of scheduled principal and interest on any Mortgage Loan due after
the
related Due Period for the related Monthly Remittance Date, have been used
by
the Servicer in discharge of its obligation to make any such Monthly Advance.
Any funds so applied shall be replaced by the Servicer by deposit, in the
manner
set forth above, in the Account no later than the close of business on the
Business Day immediately preceding the next Monthly Remittance Date to the
extent that funds in the Account on such date are less than the amounts required
to be distributed on such Monthly Remittance Date. The Servicer shall be
entitled to be reimbursed from the Account for all Monthly Advances of its
own
funds made pursuant to this Section as provided in
Section 2.5.
18
(b) The
obligation of the Servicer to make such Monthly Advances is mandatory, and,
with
respect to any Mortgage Loan or REO Property, shall continue through the
earlier
of (i) the date on which a Final Recovery Determination in connection with
such
Mortgage Loan is made and (ii) the due date of the last Monthly Payment due
prior to the payment in full of such Mortgage Loan.
(c) Notwithstanding
anything herein to the contrary, no Monthly Advance shall be required to
be made
hereunder by the Servicer if such Monthly Advance would, if made, constitute
a
Nonrecoverable Advance.
Section
2.17. Compliance
With REMIC Provisions
If
the
Servicer has received written notice from the Owner that a REMIC election
has
been made with respect to the arrangement under which any Mortgage Loans
and REO
Property are held, the Servicer shall not take any action, cause the REMIC
to
take any action or fail to take (or fail to cause to be taken) any action
that,
under the REMIC Provisions, if taken or not taken, as the case may be, could
(i) endanger the status of the REMIC as a REMIC, or (ii) result in the
imposition of a tax upon the REMIC (including but not limited to the tax
on
“prohibited transactions” as defined in Section 860F(a)(2) of the Code and
the tax on “contributions” to a REMIC set forth in Section 860G(d) of the
Code) unless the Servicer has received an Opinion of Counsel (at the expense
of
the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of
any
such tax.
Section
2.18. Owner
to
Cooperate; Release of Collateral Files
If,
at
any time prior to termination of this Agreement, the Servicer shall require
the
use of any Collateral File (or any portion thereof) to perform its servicing
activities as set forth in this Agreement, the Owner, within five (5) Business
Days of the written request of the Servicer in the form of Exhibit A
hereto,
(or within such shorter period as may be necessary for the Servicer to perform
its obligations hereunder in compliance with all Acceptable Servicing
Procedures), shall release or shall cause the Custodian to release such
Collateral File, or portion thereof, to the Servicer. Within
five (5) Business Days of the Servicer’s request therefor (or, within such
shorter period as may be necessary for the Servicer to perform obligations
hereunder in compliance with all Acceptable Servicing Procedures), the Owner
shall execute and deliver to the Servicer, in the form supplied to the Owner
by
the Servicer, any court pleadings, requests for trustee’s sale or other
documents reasonably necessary to perform the servicing activities with respect
to any Mortgage Loan, including the foreclosure or sale in respect of any
Mortgaged Property, the commencement and prosecution of any legal action
to
enforce the related Mortgage Note and Mortgage and the defense of any legal
action or counterclaim filed against the Owner or the Servicer. The Servicer
may
execute and deliver any or all of such pleadings or documents on behalf of
the
Owner pursuant to the power of attorney granted pursuant to
Section 2.12(g).
19
Section
2.19. Credit
Reporting
For
each
Mortgage Loan, the Servicer shall furnish, to the extent required under
applicable law, accurate and complete information (i.e., favorable and
unfavorable) on its borrowers’ credit files to Equifax, Experian and Trans Union
Credit Information Company, or their successors, on a monthly
basis.
Section
2.20. Delivery
of Policies of Title and Primary Mortgage Insurance
Policies
The
Servicer shall, at Servicer’s expense and within thirty (30) days of Owner’s
request or a request by a third party approved by the Owner, create a xeroxed
copy or an imaged copy of the policy of title insurance or the original Primary
Mortgage Insurance Policy, if any, of any Mortgage Loan and deliver, or cause
to
be delivered, each such xeroxed copy or, through an electronic medium, each
such
imaged copy to the Custodian or the Owner. The Servicer agrees to indemnify
and
hold harmless the Owner against any and all losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
fees
and expenses resulting from the defense of any claim against the Owner by
a
third party in any way related to the Servicer’s failure, upon Owner’s request,
to create and deliver, or cause to be delivered, any such xeroxed copy or
imaged
copy of the policy of title insurance or the original Primary Mortgage Insurance
Policy; provided, that in no event shall the Servicer have any liability
for any
indirect, special or consequential damages, losses, costs or expenses incurred
by the Owner.
ARTICLE
3.
PAYMENTS
TO THE OWNER
Section
3.1. Distributions
(a) On
each
Monthly Remittance Date, the Servicer shall distribute to the Owner all amounts
credited to the Account as of the close of business on the preceding
Determination Date, net of charges against or withdrawals from the Account
pursuant to Section 2.5, plus all Monthly Advances deposited in the Account
prior to such Monthly Remittance Date pursuant to Section 2.4, minus
(i) any amounts attributable to Principal Prepayments received after the
last day of the Due Period immediately preceding the related Monthly Remittance
Date and (ii) any amounts attributable to Monthly Payments collected but
due on a Due Date(s) subsequent to the preceding Determination
Date.
20
(b) All
distributions made to the Owner on each Monthly Remittance Date shall be
made to
the Owner of record, based on the Mortgage Loans owned and held by the Owner.
All distributions shall be made by wire transfer of immediately available
funds
to the account of the Owner at a bank or other entity having appropriate
facilities therefor, if the Owner shall have so notified the Servicer, or
by
check mailed to the address of the Owner. Distributions on each Monthly
Remittance Date may be made by more than one (1) wire transfer or check,
as the
case may be.
(c) With
respect to any remittance received by the Owner on or after the second Business
Day following the Business Day on which such payment was due, the Owner shall
send written notice thereof to the Servicer. The Servicer shall pay to the
Owner
interest on any such late payment at an annual rate equal to Prime plus one
percentage point, but in no event greater than the maximum amount permitted
by
applicable law. Such interest shall be paid by the Servicer to the Owner
on the
date such late payment is made and shall cover the period commencing with
the
day following such second Business Day and ending with the Business Day on
which
such payment is made, both inclusive. The payment by the Servicer of any
such
interest, or the failure of the Owner to notify the Servicer of such interest,
shall not be deemed an extension of time for payment or a waiver of any Event
of
Default by the Servicer.
Section
3.2. Reports
(a) On
or
before the tenth (10th)
day of
each month (or if such day is not a Business Day, the next Business Day),
the
Servicer shall provide to the Owner or its designee by means of an electronic
or
other agreed upon medium, with respect to the Due Period immediately preceding
such Monthly Remittance Date, the data set forth below on an individual loan
basis:
(i) mortgage
loan number;
(ii) interest
rate;
(iii) pending
rate;
(iv) scheduled
principal and interest payment;
(v) scheduled
principal;
(vi) gross
interest;
(vii) curtailment
collected;
(viii) curtailment
adjustment;
(ix) PIF
principal;
21
(x) PIF
interest difference;
(xi) ARM
Index;
(xii) pending
Index;
(xiii) ending
scheduled balance;
(xiv) investor
loan number;
(xv) Servicing
Fee Rate;
(xvi) due
date;
(xvii) yield
rate;
(xviii) beginning
balance;
(xix) ending
balance;
(xx) beginning
scheduled balance;
(xxi) principal
collected;
(xxii) scheduled
net interest;
(xxiii) scheduled
buydown;
(xxiv) Servicing
Fee collected; and
(xxv) remittance
amount.
The
Servicer may submit the foregoing information in more than one (1) report.
Requests for additional data regarding the Mortgage Loans or alternative
means
for delivering such reports shall be accommodated at the discretion of the
Servicer and at the Owner’s expense.
(b) Upon
reasonable advance notice in writing, the Servicer shall provide to any Owner
which is a savings and loan association, a bank, an insurance company or
other
regulated or supervised entity reports and access to information and
documentation regarding the Mortgage Loans and the transactions contemplated
hereby sufficient to permit the Owner to comply with the applicable regulations
of relevant regulatory or supervisory authorities with respect to its investment
in the Mortgage Loans and Owner’s internal and third-party audit
requirements.
(c) The
Servicer shall prepare and file any and all information statements or other
filings required to be delivered to any governmental taxing authority or
to
Owner pursuant to any applicable law with respect to the Mortgage Loans and
the
transactions contemplated hereby. In addition, the Servicer shall provide
Owner
with such information concerning the Mortgage Loans as is necessary for Owner
to
prepare its federal income tax return as Owner may reasonably request from
time
to time. In addition, not more than 90 days after the end of each calendar
year,
the Servicer shall furnish to each Person who was an Owner at any time during
such calendar year an annual statement in accordance with the requirement
of
applicable federal income tax law as to the aggregate of remittances for
the
applicable portion of such year.
22
Section
3.3. Delinquency
and Foreclosure Statements
The
Servicer shall provide a monthly statement of delinquents and a delinquency
report on all Mortgage Loans more than 30 days delinquent. The Servicer shall
also provide a monthly statement regarding foreclosure status.
ARTICLE
4.
GENERAL
SERVICING PROCEDURE; COVENANTS;
REPRESENTATIONS
AND WARRANTIES
Section
4.1. Assumption
Agreements
(a) The
Servicer shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the
person
to whom the Mortgaged Property has been or is about to be sold, whether by
absolute conveyance or by contract of sale and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note, provided that in
accordance with the terms of the Mortgage Note, the Servicer may permit an
assumption (i) if the Servicer reasonably believes it is unable under Applicable
Requirements to enforce such “due-on-sale” clause, or (ii) if the enforcement of
such rights would impair or threaten to impair any recovery under the related
Primary Mortgage Insurance Policy, if any. In connection with any such
assumption, the related Mortgage Interest Rate, the Unpaid Principal Balance
and
the term of the Mortgage Loan may not be changed. If an assumption is allowed
pursuant to this Section 4.1(a), the Servicer is authorized, at the
Servicer’s discretion, to prepare a substitution of liability agreement to be
entered into by the Owner and the purchaser of the Mortgaged Property pursuant
to which the original Mortgagor is released from liability and the purchaser
of
the Mortgaged Property is substituted as Mortgagor and becomes liable under
the
Mortgage Note. Any such substitution of liability agreement shall be in lieu
of
an assumption agreement. If an assumption fee is collected by the Servicer
for
entering into an assumption agreement the entire amount of such fee may be
retained by the Servicer as additional servicing compensation.
(b) The
Servicer shall follow Acceptable Servicing Procedures with respect to any
such
assumption or substitution of liability (taking into account the applicable
Seller’s then current underwriting guidelines applicable to mortgage loans of
the same type as the related Mortgage Loan). The Servicer shall notify the
Owner
that any such substitution of liability or assumption agreement has been
completed by forwarding to the Owner a copy of any such substitution of
liability or assumption agreement, which document shall be added to the related
Collateral File and shall for all purposes be considered a part of such
Collateral File to the same extent as all other documents and instruments
constituting a part thereof.
23
(c) For
purposes of this Section 4.1, the term “assumption” is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is
not
accompanied by an assumption or substitution of liability
agreement.
Section
4.2. Satisfaction
of Mortgages and Release of Collateral Files
(a) Upon
the
payment in full of any Mortgage Loan or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary
for
such purposes, the Servicer shall prepare the appropriate documents and
instruments required to satisfy or release the lien of the Mortgage in
accordance with applicable state law requirements. The Servicer, promptly
and
within the applicable legal deadlines appropriate to process the satisfaction
or
release, shall notify the Owner of such event.
(b) The
Servicer shall not grant a satisfaction or release of a Mortgage without
having
obtained payment in full of the indebtedness secured by the Mortgage. In
the
event the Servicer grants a satisfaction or release of a Mortgage without
having
obtained payment in full of the indebtedness secured by the Mortgage, the
Servicer, upon becoming aware of the foregoing, shall remit to the Owner
the
Unpaid Principal Balance of the related Mortgage Loan plus accrued and unpaid
interest by deposit thereof in the Account pursuant to Section 2.4. The
Owner shall assign the related Mortgage and endorse the related Mortgage
Note to
the Servicer and shall do all things necessary to transfer ownership of the
Mortgage Loan to the Servicer. The Servicer shall maintain the Fidelity Bond
as
provided for in Section 2.11 protecting and insuring the Servicer against,
losses sustained with respect to any Mortgage Loan satisfied or released
other
than in accordance with the procedures set forth herein.
(c) The
Owner
shall, within five (5) Business Days following receipt of any request from
the
Servicer (or within such shorter period as is necessary for the Servicer
to
perform its obligations hereunder in compliance with all Applicable Servicing
Procedures) deliver or cause the Custodian to deliver to the Servicer the
Collateral File (or any portion thereof) required by the Servicer to process
any
satisfaction or release of any Mortgage pursuant to this Section 4.2. In
addition, if any Mortgage Loan has been paid in full and, pursuant to
Section 2.2(b) of the Purchase Agreement, the Owner has recorded the
related Assignment of Mortgage designating the Owner as the holder of record
of
the Mortgage, the Servicer shall prepare and deliver to the Owner, together
with
a request for execution, the documents and instruments necessary to satisfy
or
release the lien of the Mortgage. The Owner shall, within five (5) Business
Days following its receipt of any such request, send to the Servicer the
fully-executed documents that were prepared and requested by the Servicer.
In
the event that applicable state law requires that a satisfaction or release
be
recorded within a shorter time period than the foregoing procedure permits,
the
Servicer shall advise the Owner accordingly and shall use its best efforts
to
ensure that the lien of the Mortgage is released or satisfied in accordance
with
applicable state law requirements, and the Owner shall assist therewith by,
to
the extent reasonably practicable, returning to the Servicer the required
portion of the Collateral File and, if applicable, the executed satisfaction
and
release documents and instruments within the time periods reasonably specified
by the Servicer.
(d) If
a
Mortgage Loan that has been paid in full is a MERS Loan, the Servicer may
cause
the removal of such Mortgage Loan from registration on the MERS® System and
execute and deliver, on behalf of the Owner, any and all related instruments
of
satisfaction or release. No expense incurred in connection with the delivery
of
any instrument of satisfaction or deed or reconveyance shall be chargeable
to
the Account or the Owner.
24
Section
4.3. Servicing
Compensation
The
Servicer shall be entitled to pay itself a Servicing Fee for each Mortgage
Loan
serviced hereunder. The obligation of the Owner to pay such Servicing Fee
is
limited to, and payable solely from, the interest portion of the Monthly
Payments and Late Collections collected by the Servicer with respect to the
related Mortgage Loan. Additional servicing compensation in the form of
non-sufficient funds check fees, assumption fees, conversion fees, other
related
administrative fees, late payment charges, Prepayment Charges (except as
otherwise specified in the relevant Commitment Letter) and other similar
types
of ancillary fees and charges that are actually received by the Servicer
may be
retained by the Servicer to the extent not required to be deposited into
the
Account pursuant to the terms of this Agreement. In addition to the Servicing
Fee payable hereunder, the Servicer shall be entitled to pay itself an REO
Management Fee for each REO Property managed by the Servicer or its agent.
The
Servicer shall be required to pay all expenses incurred by it in connection
with
its servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided for in this Agreement. Any Late
Collections shall be applied by the Servicer in the following order of priority:
(i) first to pay the expenses incurred in connection with collection of such
Late Collections, (ii) second to reimburse itself for any related unpaid
Servicing Fees, unpaid REO Management Fees and unreimbursed Servicing Advances
and Monthly Advances and (iii) the balance to be distributed to the
Owner.
Section
4.4. Statements
as to Compliance
(a) Not
later
than March 15 of each year (or if such day is not a Business Day, the next
succeeding Business Day), the Servicer will deliver to the Owner and, with
respect to any Mortgage Loans subject to a Pass-Through Transfer, each other
Person entitled to receive servicing reports provided pursuant to Section
3.2(a)
an Officer’s Certificate for the prior calendar year, beginning with the
calendar year ending December 31, 2003, stating (i) a review of the activities
of the Servicer during the preceding year and of performance under this
Agreement has been made under such officer’s supervision, and (ii) to the best
of such officer’s knowledge, based on such review, the Servicer has fulfilled
all of its obligations under this Agreement throughout such year or, if there
has been a default in the fulfillment of any such obligation, specifying
each
such default known to such officer and the nature and status
thereof.
(b) Not
later
than March 15 of each year (or if such day is not a Business Day, the next
succeeding Business Day), with respect to any Mortgage Loans subject to a
Pass-Through Transfer, the Servicer will deliver to the Owner and each other
Person entitled to receive servicing reports provided pursuant to Section
3.2(a)
an Officer’s Certificate for the prior calendar year, beginning with the
calendar year ending December 31, 2003, in substantially the form of
Exhibit F
to this
Agreement.
25
(c) The
Servicer agrees to indemnify and hold harmless each of the Owner, each other
Person entitled to receive servicing reports provided pursuant to Section
3.2(a), each Person, if any, who “controls” the Owner or such other Person
within the meaning of the Securities Act of 1933, as amended, and their
respective officers and directors against any and all losses, penalties,
fines,
forfeitures, legal fees and related costs, judgments and any other costs,
fees
and expenses that such Person may sustain arising out of third party claims
based on (i) the failure of the Servicer to deliver or cause to be delivered
when required any Officer’s Certificate required pursuant to Section 4.4(a) or
Section 4.4(b), or the accountants’ statement required pursuant to Section 4.5,
or (ii) any material misstatement or omission in any certification pursuant
to
Section 302(a) of the Xxxxxxxx-Xxxxx Act of 2002 and Rules 13a-14 and 15d-14
promulgated by the Securities and Exchange Commission thereunder made in
reliance on any material misstatement or omission contained in any Officer’s
Certificate provided pursuant to Section 4.4(a) or Section 4.4(b).
Section
4.5. Annual
Independent Public Accountants’ Servicing Report
Not
later
than March 15 of each year (or if such day is not a Business Day, the next
succeeding Business Day), the Servicer will, at its expense, cause a firm
of
independent public accountants that is a member of the American Institute
of
Certified Public Accountants to furnish to the Owner and, with respect to
any
Mortgage Loans subject to a Pass-Through Transfer, each other Person entitled
to
receive servicing reports provided pursuant to Section 3.2(a), a statement
to
the effect that, based on an examination conducted by such firm in compliance
with the Uniform Single Attestation Program for Mortgage Bankers (“USAP”),
the
assertion of management of the Servicer that it has complied with the minimum
servicing standards identified in the USAP is fairly stated in all material
respects, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement.
Section
4.6. Owner’s
Right to Examine Servicer Records, etc.
(a) Subject
to any applicable standards of Section 5.8, the Owner shall have the right,
at
its expense, to (i) examine and audit the Servicer’s books of account,
records, reports and other papers relating to (x) the performance by the
Servicer of its obligations and duties under this Agreement, or (y) the
Mortgage Loans, (ii) make copies and extracts therefrom and (iii) discuss
the affairs, finances, and accounts of the Servicer relating to such performance
with the Servicer’s officers and employees, all at such times and places, and
with such frequency, as may be reasonably requested.
(b) Subject
to any applicable standards of Section 5.8, the Servicer shall provide to
the
Owner and any supervisory agents or examiners representing a state or federal
governmental agency having jurisdiction over the Owner, including without
limitation the OTS, the FDIC and other similar entities, access to any
documentation regarding the Mortgage Loans in the possession of the Servicer
that is required by any applicable regulations. Such access shall be afforded
without charge, upon reasonable request, during normal business hours, at
the
offices of the Servicer and in accordance with any applicable
regulations.
26
Section
4.7. Cooperation
The
Servicer and the Owner shall cooperate fully with one another and their
respective counsel and other representatives and advisors in connection with
the
steps required to be taken as part of their respective obligations under
this
Agreement.
Section
4.8. Consents
and Approvals
The
Servicer shall timely obtain, at its sole cost and expense, the consents
and
approvals required by law or pursuant to contract to consummate the transactions
contemplated hereby. All such consents shall be obtained without any cost
or
expense to the Owner and will be obtained without any adverse modification
in
the terms of any of the agreements relating to the Mortgage Loans or the
imposition of any burdensome provisions or conditions on the Owner.
ARTICLE
5.
THE
SERVICER
Section
5.1. Indemnification;
Third Party Claims
(a) The
Servicer agrees to indemnify and hold harmless the Owner against any and
all
third party claims, losses, penalties, fines, forfeitures, legal fees and
related costs, judgments and any other costs, fees and expenses that the
Owner
may sustain in any way related to the failure of the Servicer to service
the
Mortgage Loans in compliance with the terms of this Agreement; provided,
however, the Servicer shall not be liable hereunder with respect to (i) any
action or inaction resulting from the written direction or consent of the
Owner,
(ii) any action or inaction resulting from the Owner’s failure to cause any
Collateral File (or portion thereof) to be released to the Servicer pursuant
to
Sections 2.18 or 4.2(c), or (iii) any action or inaction resulting from the
Owner’s failure to comply with Section 5.1(b) or Section 5.6. The Servicer
shall notify the Owner if a claim is made by a third party with respect to
this
Agreement or the Mortgage Loans that the Servicer determines in its good
faith
judgment will materially affect the Owner’s interest in such Mortgage Loans. The
Servicer shall assume (with the written consent of the Owner) the defense
of any
such claim and, subject to the last sentence of this paragraph, pay all
reasonable expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer or the Owner in respect of such claim. The Servicer
shall
follow any written instructions received from the Owner in connection with
any
such claim. The Servicer shall have the right to reimburse itself from the
Account for all expenses, advances and liabilities incurred by the Servicer
in
respect of any such claim (whether or not the Servicer has assumed the defense
thereof), except when the claim (x) is related to the Servicer’s
obligations to indemnify the Owner pursuant hereto, (y) results from the
failure of the Servicer to service the Mortgage Loans in compliance with
the
terms of this Agreement, or (z) results from the Servicer’s willful
misconduct, bad faith or negligence in performing its duties under this
Agreement.
(b) With
respect to any Mortgage Loan, if the Owner records or causes to be recorded
the
related Assignment of Mortgage designating the Owner as the holder of record
of
the Mortgage in the appropriate public recording office of the jurisdiction
in
which the related Mortgaged Property is located, and the Owner, in its capacity
as the holder of record, receives written notice of any action with respect
to
the related Mortgage or Mortgaged Property, the Owner shall promptly send
a copy
of such notice to the Servicer in accordance with Section 9.8. The Servicer
shall have no liability to the Owner for claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, or any other costs
or
expenses, that result from the Owner’s failure to comply with the provisions set
forth in this paragraph.
27
Section
5.2. Servicer
Covenants; Merger or Consolidation of the Servicer
(a) The
Servicer covenants that, subject to Section 5.2(b), it shall keep in full
force and effect its existence, rights and franchises as a corporation and
its
status as a Xxxxxx Mae or Xxxxxxx Mac approved servicer in good standing
and
shall obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall
be
necessary to protect the validity and enforceability of this Agreement or
any of
the Mortgage Loans and to perform its duties under this Agreement.
(b) Any
Person into which the Servicer may be merged or consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to all, or substantially all,
of the
business or assets of the Servicer (whether or not related to loan servicing),
shall be the successor of the Servicer hereunder, without the execution or
filing of any paper, or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however,
that
the Servicer shall not be a party to any such merger, consolidation or
conversion, or sell or otherwise dispose of all, or substantially all, of
its
business or assets, unless the successor or surviving Person shall be an
institution that is a Xxxxxx Mae or Xxxxxxx Mac approved servicer in good
standing and a member of MERS in good standing. In addition, the successor
or
surviving Person shall be an institution (i) having a GAAP net worth of not
less than $25,000,000 and (ii) the deposits of which are insured by the FDIC,
SAIF and/or BIF, or which is a HUD-approved mortgagee whose primary business
is
in origination and servicing of first lien mortgage loans.
Section
5.3. Limitation
on Liability of the Servicer and Others
The
Servicer and the directors, officers, employees or agents of the Servicer
shall
not be under any liability to the Owner (i) for any action taken, or for
refraining from the taking of any action, in good faith pursuant to this
Agreement, (ii) for errors in judgment made in good faith, (iii) for any
action
or inaction in accordance with the written direction or consent of the Owner,
(iv) for any action or inaction resulting from the Owner’s failure to cause any
Collateral File (or portion thereof) to be released to the Servicer pursuant
to
Sections 2.18 or 4.2(c), or (v) for any action or inaction resulting from
the Owner’s failure to comply with Section 5.1(b) or Section 5.6; provided,
however, this provision shall not protect the Servicer against any breach
of
warranties or representations made herein, any failure to perform its
obligations in accordance with any standard of care set forth in this Agreement
(unless in accordance with the written direction or consent of the Owner)
or any
liability that would otherwise be imposed by reason of willful misconduct,
bad
faith or negligence in the performance of duties. The Servicer and any officer,
employee or agent of the Servicer may rely in good faith on any document
of any
kind that appears, on its face, to be properly executed and submitted by
any
Person respecting any matters arising hereunder. Subject to Section 5.1(a),
the Servicer shall not be under any obligation to appear in, prosecute or
defend
any legal action that is not incidental to its duties under this Agreement
and
that may result in any expense or liability to the Servicer; provided, however,
that the Servicer may, with the written consent of the Owner, undertake any
such
action which it may deem necessary or desirable with respect to this Agreement
and the rights, duties, and the interests of the parties hereto. In such
event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs, and liabilities for which the Owner shall
be
liable and the Servicer shall be entitled to be reimbursed therefor from
the
Account,
unless
any such costs or liabilities shall result from the negligence, bad faith
or
willful misfeasance of the Servicer in performing such action.
28
Section
5.4. Servicer
Not to Resign
The
Servicer shall not resign from the obligations and duties hereby imposed
on it
except upon the determination that such Servicer’s duties hereunder are no
longer permissible under Applicable Requirements and such incapacity cannot
be
cured by such Servicer. Any such determination permitting the resignation
of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to
the Owner. No such resignation shall become effective until a successor that
satisfies the requirements set forth in Section 9.1 has assumed the
Servicer’s responsibilities and obligations hereunder in accordance with such
Section.
Section
5.5. Transfer
of Servicing
The
Servicer acknowledges that the Owner has entered into this Agreement in reliance
upon the adequacy of the Servicer’s servicing facilities, plan, personnel,
records and procedures, its integrity, reputation and financial standing
and the
continuance thereof. Without in any way limiting the generality of this
Section 5.5, the Servicer shall not either assign this Agreement or any of
the servicing rights or obligations hereunder except (i) in connection with
a merger or consolidation permitted under Section 5.2(b), or (ii) with
the prior written consent of the Owner, which consent shall not be unreasonably
withheld or delayed.
Section
5.6. Transfer
of Mortgage Loans
(a) The
Owner
shall have the right, without the consent of the Servicer, to assign its
interest under this Agreement with respect to any Mortgage Loans that have
been
assigned in accordance with Article 6 of the Purchase Agreement; provided,
however, that the Owner shall give the Servicer written notice 15 days prior
to
any such assignment of its interest under this Agreement. The Owner shall
also
have the right to designate any Person to exercise the rights of Owner hereunder
to the extent provided in Section 8.2 of this Agreement. In any such case,
all references to the Owner shall be deemed to include such assignee or
designee.
(b) The
Servicer shall keep books and records in which, subject to such reasonable
regulations as it may prescribe, the Servicer shall note transfers of Mortgage
Loans. For the purposes of this Agreement, the Servicer shall be under no
obligation to deal with any Person with respect to this Agreement or any
Mortgage Loan unless the books and records show such person as the owner
of such
Mortgage Loan. Upon receipt of a written notice from the Owner of any assignment
of any Mortgage Loan permitted under the Purchase Agreement, the Servicer
shall
xxxx its books and records to reflect the ownership of such Mortgage Loan
by
such assignee, and, except with respect to the indemnity set forth in
Section 8.1(f) hereof, the previous Owner shall be released from its
obligations hereunder to the extent such obligations relate to Mortgage Loans
sold by the Owner and arise after the date of such sale.
29
Section
5.7. Representations
and Warranties of the Servicer
The
Servicer hereby represents and warrants to the Owner as of each Closing Date
as
follows:
(a) The
Servicer is a federally chartered savings association, duly organized, validly
existing and in good standing under the laws of the United States, has all
licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in the states where the Mortgaged
Properties are located, if the laws of such states require licensing or
qualification in order to conduct business of the type conducted by the Servicer
and to the extent necessary to ensure the servicing of each Mortgage Loan
in
accordance with this Agreement. The Servicer has the corporate power and
authority to enter into, execute and deliver this Agreement and all documents
and instruments executed and delivered pursuant hereto and to perform its
obligations in accordance therewith. The execution, delivery and performance
of
this Agreement by the Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized. This Agreement
evidences the valid, binding and enforceable obligations of the Servicer,
subject as to enforcement, (i) to bankruptcy, insolvency, receivership,
conservatorship, reorganization, arrangement, moratorium and other laws of
general applicability relating to or affecting creditors’ rights and (ii) to
general principles of equity, whether such enforcement is considered in a
proceeding in equity or at law. All requisite corporate action has been taken
by
the Servicer to make this Agreement valid and binding upon the Servicer in
accordance with its terms.
(b) No
consent, approval, authorization, or order of any court or governmental agency
or body relating to the transactions contemplated by this Agreement is required
as to the Servicer or, if required, such consent, approval, authorization,
or
order has been obtained.
(c) The
consummation of the transactions contemplated by this Agreement, including
without limitation the fulfillment of, or compliance with, the terms and
conditions of this Agreement, are in the ordinary course of business of the
Servicer and shall not (i) result in the breach of any term or provision of
the charter or by-laws of the Servicer, (ii) result in the breach of any
term or provision of, or conflict with or constitute a default under, or
result
in the acceleration of any obligation under, any material agreement, indenture,
loan or credit agreement, or other instrument to which the Servicer or its
property is subject, or (iii) result in the violation of any law, rule,
regulation, order, judgment, or decree to which the Servicer or its property
is
subject.
(d) There
is
no action, suit, proceeding or investigation pending or, to the best of the
Servicer’s knowledge, threatened against the Servicer that, either in any one
instance or in the aggregate, is likely (in the Servicer’s judgment), to result
in any material impairment of the right or ability of the Servicer to carry
on
its business substantially as now conducted, or that would adversely affect
the
validity of this Agreement, or of any action taken or to be taken in connection
with the obligations of the Servicer contemplated herein, or that would be
likely to materially impair the ability of the Servicer to perform its
obligations hereunder.
30
(e) The
Servicer is an approved servicer of mortgage loans for Xxxxxx Mae and Xxxxxxx
Mac, in good standing. No event has occurred, including but not limited to
a
change in insurance coverage, that would make the Servicer unable to comply
with
Xxxxxx Mae and Xxxxxxx Mac eligibility requirements.
(f) The
Servicer is a member of MERS in good standing. The Servicer shall comply
in all
material respects with the rules and procedures of MERS in connection with
the
servicing of each MERS Loan for as long as each such Mortgage Loan is registered
on the MERS® System.
Section
5.8. Customer
Information
Each
of
the Servicer and the Owner agrees that it shall comply with all applicable
laws
and regulations regarding the privacy or security of any Customer Information.
The Servicer has implemented and shall maintain security measures designed
to
meet the objectives of the Xxxxx-Xxxxx-Xxxxxx Act and the regulations
promulgated thereunder. The Servicer shall make available to the Owner’s
regulator such information regarding security measures as may be requested
by
the regulator, provided that such information shall not be disclosed to the
Owner, and that the Servicer may take reasonable steps to protect proprietary
business information and to comply with all applicable laws.
ARTICLE
6.
DEFAULT
Section
6.1. Events
of Default
In
case
one or more of the following Events of Default by the Servicer shall occur
and
be continuing:
(i) any
failure by the Servicer to remit to the Owner within three (3) Business Days
when due any payment required to be made under the terms of this Agreement;
or
(ii) any
failure by the Servicer to duly observe or perform, in any material respect,
any
other covenant, obligation or agreement of the Servicer as set forth in this
Agreement, which failure continues unremedied for a period of sixty (60)
(or, in
the case of any failure to pay the premium for any insurance policy which
is
required to be maintained hereunder, thirty (30)) days after the date on
which
written notice of such failure, requiring the same to be remedied, shall
have
been given to the Servicer by the Owner; provided that any failure by the
Servicer to duly perform its obligations under Section 4.4 or Section 4.5
shall
be deemed to be a material breach of this Agreement; or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities, or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Servicer and such decree or order shall have remained
in force, undischarged or unstayed for a period of sixty (60) days;
or
31
(iv) the
Servicer shall consent to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets
and
liabilities or similar proceedings of or relating to the Servicer or relating
to
all, or substantially all, of the Servicer’s property; or
(v) the
Servicer shall admit in writing its inability to pay its debts as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(vi) the
Servicer shall fail to be an approved servicer of mortgage loans for Xxxxxx
Xxx
and Xxxxxxx Mac, in good standing; or
(vii) the
Servicer shall fail to be in compliance with the “doing business” or licensing
laws of any jurisdiction where a Mortgaged Property is located; or
(viii) the
Servicer shall attempt to assign this Agreement or the servicing
responsibilities hereunder in contravention of this Agreement; or
(ix) the
Servicer shall fail to maintain a minimum net worth of $25,000,000;
or
(x) any
representation and warranty of the Servicer contained in Section 5.7 shall
be
untrue in any material respect as of the related Closing Date and such untruth
shall cause the Servicer to be unable to perform its obligations under this
Agreement;
then,
and
in each and every such case, so long as such Event of Default shall not have
been remedied, the Owner, by notice in writing to the Servicer (in each such
instance, the “Defaulted
Servicer”),
may,
in addition to whatever rights the Owner may have at law or equity, including
injunctive relief and specific performance, commence termination of all of
the
rights and obligations of the Defaulted Servicer under this Agreement pursuant
to Section 7.2, and may exercise any and all other remedies available at
law or at equity. Upon receipt by the Defaulted Servicer of such written
notice
from the Owner stating the intent to terminate the Defaulted Servicer as
servicer under this Agreement as a result of such Event of Default, all
authority and power of the Defaulted Servicer under this Agreement, whether
with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in
the
successor appointed pursuant to Section 9.1. Upon written request from the
Owner, the Defaulted Servicer shall, at its sole expense, prepare, execute,
and
place in such successor’s possession or control all Collateral Files and Credit
Files, and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, all of
which
shall be undertaken immediately and shall be completed as soon as possible
and
in all events by not later than forty-five (45) Business Days following the
Owner’s request therefor. The Defaulted Servicer agrees to cooperate with the
Owner and such successor in effecting the termination of the Defaulted
Servicer’s responsibilities and rights hereunder, including, without limitation,
the transfer to such successor of all cash amounts that have been credited
by
the Defaulted Servicer to the Account or the Escrow Account at the time of
transfer, and all other amounts that may thereafter be received with respect
to
the Mortgage Loans and to which the Defaulted Servicer is not entitled pursuant
to the terms of this Agreement.
32
Section
6.2. Waiver
of Defaults
The
Owner
may waive any default by the Defaulted Servicer in the performance of its
obligations hereunder and its consequences. Any such waiver must be in writing
to be effective. Upon any waiver of a past default, such default shall cease
to
exist, and any Event of Default arising therefrom shall, unless otherwise
specified in such waiver, be deemed to have been remedied for every purpose
of
this Agreement unless the Defaulted Servicer fails to comply with the terms
of
such waiver. No such waiver shall extend to any subsequent or other default
or
impair any right consequent thereto except to the extent expressly so
waived.
Section
6.3. Survival
of Certain Obligations and Liabilities of the
Defaulted Servicer
The
representations, warranties, covenants, indemnities and agreements of the
parties provided in this Agreement and the parties’ obligations hereunder shall
survive the execution and delivery and the termination or expiration of this
Agreement. Notwithstanding any termination of the rights and obligations
of the
Servicer pursuant to this Article 6, the Defaulted Servicer shall remain
liable for any actions of the Defaulted Servicer taken prior to the effective
time of such termination.
ARTICLE
7.
TERMINATION
Section
7.1. Termination
of Agreement
This
Agreement shall terminate upon either (i) the later of the distribution to
the Owner of final payment or liquidation with respect to the last Mortgage
Loan
subject to this Agreement and each REO Property or the disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure with respect
to the last Mortgage Loan subject to this Agreement and the remittance of
all
funds due hereunder, or (ii) the mutual written consent
of
the parties.
Section
7.2. Termination
of the Servicer
Upon Unremedied Event of Default
The
Owner
may, at its sole option, following an unremedied Event of Default and in
accordance with Section 6.1, terminate any rights the Servicer may have
hereunder. The Owner, with full cooperation of the Servicer, shall arrange
for
the transfer of servicing, at the Owner’s option, to the Owner or a third party
successor servicer pursuant to Section 9.1, and the Servicer shall continue
servicing the Mortgage Loans under this Agreement, for the Servicing Fee
provided herein, until the Owner gives the Servicer notice of such
transfer.
33
ARTICLE
8.
PASS-THROUGH
AND WHOLE LOAN TRANSFERS
Section
8.1. Pass-Through
Transfers or Whole-Loan Transfers
(a) The
Owner
and the Servicer agree that in connection with any Whole Loan Transfer or
Pass-Through Transfer permitted under Article 6 of the Purchase Agreement,
the
Owner, in its sole discretion, may assign its rights under this Agreement
with
respect to the Mortgage Loans subject to such Whole Loan Transfer or
Pass-Through Transfer.
(b) The
Owner
shall reimburse the Servicer for all reasonable out-of-pocket expenses,
including attorneys’ fees, incurred by the Servicer in connection with any Whole
Loan Transfer or Pass-Through Transfer.
(c) In
connection with each Whole Loan Transfer or Pass-Through Transfer permitted
under Article 6 of the Purchase Agreement, the Servicer shall cooperate and
shall: (i) provide the Owner with information and appropriate verification
of
information in its possession or control as may reasonably be necessary in
order
to effect such Whole Loan Transfer or Pass-Through Transfer (and, to the
extent
any such information is in the possession or control of any third party,
use
commercially reasonable efforts to cause such third party to provide any
such
information); and (ii) cooperate with all reasonable requests and due diligence
procedures not otherwise addressed herein.
(d) With
respect to any Whole Loan Transfer or Pass-Through Transfer permitted under
Article 6 of the Purchase Agreement in which a prospectus, prospectus supplement
or other disclosure document (a “Disclosure
Document”)
is
prepared in connection therewith, and in which a substantial portion of the
mortgage loans in the related transaction consist of Mortgage Loans, the
Servicer shall:
(i) provide
for inclusion as part of such Disclosure Document (A) the regulatory status
of
the Servicer and its affiliates and (B) delinquency and foreclosure information
of the type typically provided by the Servicer in connection with mortgage
loans
originated by the Sellers and securitized by third parties (the information
referred to in this sentence, in the form provided to the Owner, being
“Servicer’s
Information”);
and
(ii) execute
and deliver an Indemnification Agreement in substantially the form attached
to
Exhibit C
of the
Purchase Agreement.
(e) With
respect to any Pass-Through Transfer permitted under Article 6 of the Purchase
Agreement in which all or substantially all of the mortgage loans in the
related
transaction consist of Mortgage Loans, the Servicer shall:
(i) execute
and deliver a pooling and servicing agreement containing terms and conditions
that are consistent with the terms and conditions set forth herein and in
the
Purchase Agreement and that are customary for public, rated transactions
for the
issuance of pass-through certificates backed by mortgage loans similar to
the
Mortgage Loans included in such Pass-Through Transfer, provided, that (A)
any
servicing reporting requirements must be consistent with the standard practices
of the Servicer and (B) each of the parties to such pooling and servicing
agreement negotiates in good faith any terms or conditions in such pooling
and
servicing agreement not specifically referenced or provided for under this
Agreement or the Purchase Agreement; and
34
(ii) provide
Owner with opinions of counsel as to the Servicer’s corporate authority and the
enforceability of the pooling and servicing agreement against the Servicer,
audit letters addressing the delinquency and foreclosure statistics of the
Servicer and certificates from public officials, each as the Servicer shall
reasonably determine to be necessary to effect such Pass-Through
Transfer.
(f) With
respect to any Whole Loan Transfer or Pass-Through Transfer in which a
Disclosure Document is prepared in connection therewith, the Owner
shall:
(i) provide
the Servicer with all drafts of the Servicer’s Information when produced and
revise the Servicer’s Information in accordance with the Servicer’s comments to
correct any information therein at the Owner’s cost; and
(ii) (A)
indemnify and hold harmless the Servicer against any losses, claims, damages
or
liabilities to which the Servicer may become subject, under the Securities
Act
of 1933, as amended, or otherwise, insofar as such losses, claims, damages
or
liabilities (or actions in respect thereof) (x) arise out of or are based
upon
any untrue statement of any material fact contained in such Disclosure Document
(other than an untrue statement of material fact contained in the Servicer’s
Information), or (y) arise out of or are based upon the omission to state
in
such Disclosure Document a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (unless the material fact omitted
would constitute Servicer’s Information) and (B) reimburse the Servicer for any
legal or other expenses reasonably incurred by the Servicer in connection
with
investigating or defending any such loss, claim, damage, liability or
action.
Section
8.2. Designation
of a Master Servicer
(a) Notwithstanding
anything to the contrary contained in this Agreement, the Owner shall have
the
right, in its sole discretion, upon 30 days’ prior written notice to the
Servicer, to appoint and designate a master servicer (the “Master
Servicer”),
as
master servicer of Mortgage Loans. The Servicer acknowledges that the Purchaser
has provided notice that it will appoint and designate Aurora Loan Services,
Inc. as Master Servicer of the Mortgage Loans and that the Mortgage Loans
will,
subject to Section 8.2(b), be serviced in accordance with this Agreement.
The
written notice required pursuant to this Section 8.2 is deemed to have been
satisfied with respect to the appointment of Aurora Loan Services, Inc. Upon
receipt of written notice of the appointment of a Master Servicer pursuant
to
this Section 8.2 (other than Aurora Loan Services, Inc.), the Servicer shall
promptly enter into a servicing agreement (a “Master
Servicing Agreement”)
to
service the Mortgage Loans for the Master Servicer in accordance with the
Master
Servicer’s requirements as set forth in the Master Servicer’s servicing guide;
provided, however, that the Servicer shall be under no obligation to enter
into
any Master Servicing Agreement unless the obligations and duties of the Servicer
as a subservicer thereunder (i) are not materially different from than those
set
forth herein, (ii) do not cause undue burden on the Servicer, (iii) do not
expand in any material respect any of the obligations, duties or liabilities
of
the Servicer hereunder and (iv) will not result in any increased cost to
the
Servicer. If the Servicer and the Master Servicer enter into a Master Servicing
Agreement, the Servicer shall service the Mortgage Loans, and remit and report
to the Master Servicer, in accordance with the terms of the Master Servicing
Agreement and, to the extent inconsistent therewith, the servicing provisions
set forth in this Agreement shall be superseded by the Master Servicing
Agreement. If the Servicer and the Master Servicer do not enter into a Master
Servicing Agreement, the Servicer shall service the Mortgage Loans, and remit
and report to the Master Servicer, in accordance with the terms of this
Agreement.
35
(b) Upon
appointment of a Master Servicer in accordance with Section 8.2(a), the
Servicer shall correspond and communicate solely with the Master Servicer,
as if
the Master Servicer were the “Owner” hereunder. The Master Servicer shall have
all rights as designee of the Owner to enforce the covenants and conditions
set
forth in this Agreement, and the Servicer shall follow and shall be entitled
to
rely on the instructions of the Master Servicer under this Agreement as if
such
instructions were the instructions of the Owner. The Master Servicer shall
have
the right to give any waivers or consents required or allowed under this
Agreement on behalf of the Owner, and the Servicer shall be entitled to rely
on
such waivers and consents as if such waivers or consents were the waivers
or
consents of the Owner. The Master Servicer is empowered to enter into and
execute and deliver any amendments or modifications to this Agreement as
the
Owner’s designee hereunder, and such amendments or modifications shall be
binding upon the Owner as if the Owner had executed and delivered the same.
The
Servicer shall treat the Master Servicer as “Owner” hereunder until the Servicer
receives written notice from the Owner that the Owner has terminated the
Master
Servicer.
(c) Upon
receipt of notice of termination of the Master Servicer, the Servicer shall
no
longer deal with the Master Servicer and shall instead deal directly with
the
Owner. From and after receipt of such notice of termination of the Master
Servicer, the Servicer shall service the applicable Mortgage Loans in accordance
with the provisions of this Agreement and shall give no effect to any Master
Servicing Agreement entered into with the Master Servicer.
Section
8.3. Servicer’s
Purchase Right
If,
at
any time, either (i) the aggregate Unpaid Principal Balance of any pool of
Mortgage Loans that are transferred pursuant to a Whole Loan Transfer
(“Transferred
Loans”)
is
less than or equal to one percent (1%) of the Unpaid Principal Balance of
such
Transferred Loans on the date of such Whole Loan Transfer, or (ii) the aggregate
Unpaid Principal Balance of any Mortgage Loans purchased hereunder and retained
by the Owner (“Portfolio
Loans”)
is
less than or equal to one percent (1%) of the Unpaid Principal Balance of
such
Portfolio Loans on the date of purchase from the applicable Seller, the Servicer
may elect, in its sole discretion, to purchase such Transferred Loans or
Portfolio Loans, as the case may be. The purchase price of Mortgage Loans
purchased by the Servicer pursuant to this Section 8.3 shall equal the
lesser of (i) the aggregate fair market value of such Mortgage Loans at the
time
of purchase by the Servicer and (ii) the aggregate Unpaid Principal Balance
of
such Mortgage Loans, plus the amount of interest on such Unpaid Principal
Balance at the applicable Net Rate from the date to which interest has last
been
paid and distributed to the Owner to, and including, the last day of the
month
in which such purchase occurs.
36
ARTICLE
9.
MISCELLANEOUS
PROVISIONS
Section
9.1. Successor
to the Servicer
(a) Prior
to
termination of the Servicer’s responsibilities and duties under this Agreement
pursuant to Sections 5.4, 6.1, 7.1, or 7.2, the Owner shall either
(i) succeed to and assume all of the Servicer’s responsibilities, rights,
duties, and obligations under this Agreement from and after the date of such
succession, or (ii) appoint a successor to the Servicer that shall succeed
to all rights and assume all of the responsibilities, duties and liabilities
of
the Servicer under this Agreement prior to the termination of the Servicer’s
responsibilities, duties, and liabilities under this Agreement. If the
Servicer’s duties, responsibilities, and liabilities under this Agreement shall
be terminated pursuant to any of the foregoing Sections, the Servicer shall
discharge such duties and responsibilities with the same degree of diligence
and
prudence that it is obligated to exercise under this Agreement, from the
date it
acquires knowledge of such termination until the effective date
thereof.
(b) The
Servicer shall promptly deliver to its successor (i) the funds in the Account
and the Escrow Account to which the Owner is entitled pursuant to the terms
of
this Agreement and all other amounts which may thereafter be received with
respect to the Mortgage Loans and to which the Servicer is not entitled pursuant
to the terms of this Agreement and (ii) all Collateral Files and Credit Files
and related documents and statements held by it hereunder. The Servicer shall
account for all funds and shall execute and deliver such instruments and
do such
other things as may reasonably be required to more fully and definitively
vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer.
(c) Upon
a
successor’s acceptance of appointment as such, the Owner shall notify the
Servicer of such appointment.
(d) Notwithstanding
any termination pursuant to this Agreement, the Servicer shall continue to
be
entitled to receive all amounts accrued or owing to it under this Agreement
on
or prior to the effective date of such termination, whether in respect of
(i)
unreimbursed Servicing Advances or Monthly Advances, (ii) unpaid Servicing
Fees
or REO Management Fees, or (iii) other servicing compensation, and shall
continue to be entitled to the benefits of Section 5.3 notwithstanding any
such termination, with respect to events occurring prior to such
termination.
Section
9.2. Amendment
This
Agreement may be amended from time to time solely by written agreement signed
by
both of the parties.
37
Section
9.3. Recordation
of Agreement; Perfection of Security Interest; Further
Assurances
(a) To
the
extent necessary under applicable law to protect the interests of the Owner,
this Agreement, or a memorandum thereof, is subject to recordation in all
appropriate public offices for real property records in all the counties
or
other comparable jurisdictions in which any or all of the Mortgaged Properties
are situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Owner at the Owner’s
expense.
(b) The
Servicer agrees to execute or cause to be executed such documents and take
or
cause to be taken such actions as may be necessary to effect the intent of
this
Agreement, including, without limitation, the execution and delivery of
instruments of further assurance and the execution and delivery of such other
documents, and the taking of such other actions, as may be reasonably requested
by the Owner.
Section
9.4. Duration
of Agreement
This
Agreement shall continue in existence and effect until terminated as herein
provided.
Section
9.5. Governing
Law
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York (including Section 5-1401 of the New York General
Obligations Law) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without giving
effect
to conflict of laws principles other than Section 5-1401 of the New York
General Obligations Law.
Section
9.6. General
Interpretive Principles
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(i) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender
herein
shall be deemed to include the other gender;
(ii) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(iii) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs, and other subdivisions of this
Agreement;
(iv) a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
38
(v) the
words
“herein,” “hereof,” “hereunder,” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(vi) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
Section
9.7. Reproduction
of Documents
This
Agreement and all documents relating hereto, including, without limitation,
(i) consents, waivers, and modifications that may hereafter be executed,
(ii) documents received by any party on any Closing Date, and
(iii) financial statements, certificates, and other information previously
or hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, microcard, miniature photographic, or other similar process. Any
such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business. Any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
Section
9.8. Notices
All
demands, notices, consents, waivers and other communications hereunder shall
be
in writing and shall be deemed to have been duly given upon receipt (x) in
the
case of any notice of an Event of Default, if mailed by registered mail,
postage
prepaid and (y) in the case of any other demand, notice, consent, waiver
or
other communication, if personally delivered, mailed by registered mail,
postage
prepaid, delivered by air courier or sent by facsimile to:
(i) in
the
case of the Servicer, at the address set forth below or such other address
as
may hereafter be furnished to the Owner in writing by the Servicer:
Washington
Mutual Bank, FA
00000
Xxxxxxx Xx. (Mail Stop N070205)
Xxxxxxxxxx,
XX 00000
Attention:
Vice President, Investor Reporting
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
(ii) in
the
case of the Owner, at the address set forth below, or such other address
as may
hereafter be furnished to the Servicer by the Owner:
Xxxxxx
Brothers Bank, FSB
000
Xxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxx Head
Facsimile:
(000) 000-0000
and
in
the case of any subsequent Owner, as set forth in written notice supplied
to the
Servicer by such subsequent Owner.
39
Notwithstanding
the foregoing any demand, notice, consent, waiver or communication (other
than
those referred to in clause (x) above) may be given by any other means if
the
parties hereto agree to such alternative means in writing.
Section
9.9. Severability
of Provisions
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the
validity or enforceability of the other covenants, agreements, provisions
or
terms of this Agreement or the rights of the Owner hereunder. If the invalidity
of any part, provision, representation or warranty of this Agreement shall
deprive any party of the economic benefit intended to be conferred by this
Agreement, the parties shall negotiate in good faith to develop a new structure,
the economic effect of which is nearly as possible the same as the economic
effect of this Agreement without regard to such invalidity.
Section
9.10. Exhibits
and Schedules
The
exhibits and schedules to this Agreement are hereby incorporated and made
an
integral part of this Agreement.
Section
9.11. Counterparts;
Successors and Assigns
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed,
shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Sections 5.4, 5.5, 5.6, 6.1, 7.1 and
8.1, this Agreement shall inure to the benefit of and be binding upon the
Servicer, the Owner and their respective successors and assigns.
Section
9.12. Effect
of Headings
The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.
Section
9.13. Other
Agreements Superseded;
Entire Agreement
This
Agreement supersedes all prior agreements and understandings relating to
the
subject matter hereof. This Agreement constitutes the entire agreement of
the
parties with respect to the subject matter hereof.
Section
9.14. Attorneys’
Fees
If
either
party retains an attorney to enforce any of the provisions of this Agreement,
the prevailing party shall be entitled to reasonable attorneys’ fees from the
other party, including, without limitation, fees incurred in arbitration
and in
trial and appellate courts, fees incurred without suit, and all arbitration,
court and accounting costs.
[signatures
follow]
40
TO
WITNESS THIS,
the
Servicer and the Owner have caused their names to be signed to this Servicing
Agreement by their respective officers duly authorized as of the day and
year
first written above.
|
SERVICER:
|
||
|
WASHINGTON
MUTUAL BANK, FA
a
federally chartered savings association
|
||
| |
|
|
| By: | ||
|
Name:
|
|
|
|
Title:
|
|
|
|
|
||
|
OWNER:
|
||
|
XXXXXX
BROTHERS BANK, FSB
a
federal savings bank
|
||
| |
|
|
| By: | ||
|
Name:
|
|
|
|
Title:
|
|
|
|
|
||
|
STATE
OF WASHINGTON
|
)
|
|
|
)
ss.
|
||
|
COUNTY
OF KING
|
)
|
This
instrument was acknowledged before me on ______________________, 2003, by
_____________________ as _________________________ of Washington Mutual Bank,
FA.
|
__________________________________________________
[Print
Name]_________________________
NOTARY
PUBLIC in and for the State of
Washington,
residing at _________________
My
commission expires _________________
|
||
|
STATE
OF ________
|
)
|
|
|
)
ss.
|
||
|
COUNTY
OF ______
|
)
|
This
instrument was acknowledged before me on ______________________, 2003, by
_____________________ as _________________________ of Xxxxxx Brothers Bank,
FSB.
|
__________________________________________________
[Print
Name]_________________________
NOTARY
PUBLIC in and for the State of
_______________,
residing at _________________
My
commission expires _________________
|
||
EXHIBIT
A
FORM
OF REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
To: [Name/Address
of Owner]
Attention:
_________________
Telephone:
_________________
Facsimile:
__________________
|
Re:
|
Servicing
Agreement dated as of September 1, 2003 (the “Servicing Agreement”)
between Xxxxxx Brothers Bank, FSB (the “Owner”) and Washington Mutual
Bank, FA (the “Servicer”)
|
In
connection with the administration of the Mortgage Loans that we service
on your
behalf pursuant to the Servicing Agreement, we request the release, and
acknowledge receipt of the Collateral File/[specify documents]) for the Mortgage
Loan described below, for the reason indicated.
Mortgagor’s
Name, Address and Zip Code:
Mortgage
Loan Number:
Reason
for Requesting Documents:
(check
one)
|
_____
|
1.
|
Mortgage
Loan paid in full. (The Servicer hereby certifies that all amounts
received in connection therewith have been credited to the Account
as
provided in the Servicing
Agreement.)
|
|
_____
|
2.
|
Mortgage
Loan in foreclosure.
|
|
_____
|
3.
|
Repurchase
pursuant to the Servicing Agreement or the Purchase Agreement.
(The
Servicer hereby certifies that the repurchase price has been credited
to
the Account.)
|
|
_____
|
4.
|
Mortgage
Loan liquidated by _____________________.
(The Servicer hereby certifies that all proceeds of the foreclosure,
insurance, condemnation or other liquidation have been finally
received
and credited to the Account pursuant to the Servicing
Agreement.)
|
|
_____
|
5.
|
Other
(Explain): ________________________________________
|
A-1
If
box 1,
2 or 3 above is checked, and if all or part of the Collateral File was
previously released to us, please release to us our previous request and
receipt
on file with you, as well as any additional documents in your possession
relating to the specified Mortgage Loan.
If
box 4
or 5 above is checked, upon our return of all of the above documents to you,
please acknowledge your reception by signing in the space indicated below
and
returning this form.
|
WASHINGTON
MUTUAL BANK, FA
|
||
| |
|
|
| By: | ||
|
Name:
|
|
|
|
Title:
|
|
|
|
|
||
Acknowledgment
of Documents
returned
to the Owner:
XXXXXX
BROTHERS BANK, FSB
By:
Name:
Title:
Date:
A-2
EXHIBIT B
ACCOUNT
CERTIFICATION
_______________,
2003
Washington
Mutual Bank, FA (the “Servicer”) hereby certifies that it has established an
account meeting the requirements of Section 2.4 of the Servicing Agreement
dated as of September 1, 2003, between the Owner and the Servicer named
therein.
|
Title
of Account:
|
“Washington
Mutual Bank, FA, in trust for Xxxxxx Brothers Bank, FSB, as Owner,
and any
successor Owner.”
|
|
Account
Number:
|
______________________________________
|
|
Address
of office or
branch
of the Servicer
at
which Collection Account
is
maintained:
|
______________________________________
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_________________________________
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_________________________________
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WASHINGTON
MUTUAL BANK, FA
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Name:
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Title:
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B-1
EXHIBIT C
ACCOUNT
LETTER AGREEMENT
_______________,
______
| To: |
____________________
____________________
____________________
____________________
(the “Depository”)
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As
the
“Servicer” under the Servicing Agreement dated as of September 1, 2003, between
the Servicer and the Owner named therein (the “Agreement”), we hereby authorize
and request you to establish an account, as an Account pursuant to
Section 2.4 of the Agreement, to be designated as “Washington Mutual Bank,
FA, in trust for Xxxxxx Brothers Bank, FSB, as Owner, and any successor Owner.”
All deposits in the account shall be subject to withdrawal therefrom by order
signed by the Servicer. You may refuse any deposit which would result in
violation of the requirement that the account be fully insured as described
below. This letter is submitted to you in duplicate. Please execute and return
one original to us.
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Name:
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Title:
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The
undersigned, as the “Depository,” hereby certifies that the above-described
account has been established under Account Number _________________, at the
office of the Depository indicated above, and agrees to honor withdrawals
on
such account as provided above. The full amount deposited at any time in
the
account will be insured by the Federal Deposit Insurance
Corporation.
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(Name
of Depository)
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Name:
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Title:
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C-1
EXHIBIT D
ESCROW
ACCOUNT CERTIFICATION
_______________,
2003
Washington
Mutual Bank, FA (the “Servicer”) hereby certifies that it has established an
account meeting the requirements of Section 2.6 of the Servicing Agreement
dated as of September 1, 2003, between the Servicer and the Owner named
therein.
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Title
of Escrow Account:
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“Washington
Mutual Bank, FA, in trust for Xxxxxx Brothers Bank, FSB, as
Owner, and any
successor Owner, and certain
Mortgagors.”
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Account
Number:
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______________________________________
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Address
of office or
branch
of the Servicer
at
which Escrow Account
is
maintained:
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______________________________________
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_________________________________
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_________________________________
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WASHINGTON
MUTUAL BANK, FA
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Name:
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Title:
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D-1
EXHIBIT E
ESCROW
ACCOUNT LETTER AGREEMENT
____________________,
___
| To: |
____________________
____________________
____________________
____________________
(the “Depository”)
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As
the
“Servicer” under the Servicing Agreement dated as of September 1, 2003, between
the Servicer and the Owner named therein (the “Agreement”), we hereby authorize
and request you to establish an account, as an Escrow Account pursuant to
Section 2.6 of the Agreement, to be designated as “Washington Mutual Bank,
FA, in trust for Xxxxxx Brothers Bank, FSB, as Owner, and any successor Owner,
and certain Mortgagors.” All deposits in the account pursuant to the Agreement
shall be subject to withdrawal therefrom by order signed by the Servicer.
You
may refuse any deposit which would result in violation of the requirement
that
the account by fully insured as described below. This letter is submitted
to you
in duplicate. Please execute and return one original to us.
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Name:
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Title:
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The
undersigned, as the “Depository,” hereby certifies that the above-described
account has been established under Account Number _________________, at the
office of the Depository indicated above, and agrees to honor withdrawals
on
such account as provided above. The full amount deposited at any time in
the
account will be insured by the Federal Deposit Insurance
Corporation.
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(Name
of Depository)
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Name:
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Title:
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E-1
EXHIBIT F
FORM
OF OFFICER’S CERTIFICATE
I,
[name
of certifying individual], a duly elected and acting officer of Washington
Mutual Bank, FA (the “Servicer”),
certify pursuant to Section 4.4(b) of the Servicing Agreement dated as of
September 1, 2003 (as from time to time amended or replaced by a reconstituted
servicing or other successor servicing agreement, the “Servicing
Agreement”)
between the Servicer and Xxxxxx Brothers Bank, FSB (the “Owner”)
to the
Owner and each other Person entitled to receive servicing reports provided
pursuant to Section 3.2(a) of the Servicing Agreement (the “Servicing
Reports”),
each
Person, if any, who “controls” the Owner or such other Person within the meaning
of the Securities Act of 1933, as amended, and their respective officers
and
directors, with respect to the calendar year immediately preceding the date
of
this Certificate (the “Relevant
Year”),
as
follows:
1. For
purposes of this Certificate, “Relevant
Information”
means
the information in the certificate provided pursuant to Section 4.4(a) of
the
Servicing Agreement (the “Annual
Compliance Certificate”)
for
the Relevant Year and the information in all Servicing Reports provided by
the
Servicer during the Relevant Year. Based on my knowledge, the Relevant
Information, taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
which is necessary to make the statements made therein, in light of the
circumstances under which such statements were made, not misleading as of
the
last day of the Relevant Year.
2. The
Relevant Information has been provided to those Persons entitled to receive
it.
3. I
am
responsible for reviewing the activities performed by the Servicer under
the
Servicing Agreement during the Relevant Year. Based upon the review required
by
the Servicing Agreement and except as disclosed in the Annual Compliance
Certificate or the accountants’ statement provided pursuant to Section 4.5, to
the best of my knowledge, the Servicer has fulfilled its obligations under
the
Servicing Agreement throughout the Relevant Year.
DATED
as
of ________ __. 200_.
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Name:
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Title:
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F-1
EXECUTION
VERSION
AMENDMENT
TO
SERVICING
AGREEMENT
Dated
as of September 1, 2003
Between
WASHINGTON
MUTUAL BANK, FA
(Servicer)
and
XXXXXX
BROTHERS BANK, FSB
(Owner)
Dated
as of July 1, 2004
AMENDMENT
TO SERVICING AGREEMENT
This
Amendment (the “Amendment”)
to
that certain Servicing Agreement (the “Servicing
Agreement”),
dated
as of September 1, 2003, between Xxxxxx Brothers Bank, FSB, a federal savings
bank, as owner (the “Owner”),
and
Washington Mutual Bank, FA, a savings bank organized under the laws of
the
United States (the “Servicer”),
is
made effective the 1st day of July, 2004. Capitalized
terms used but not defined herein shall have the meanings ascribed to such
terms
in the Servicing Agreement.
PRELIMINARY
STATEMENT
WHEREAS,
the Owner and the Servicer desire to amend certain terms and conditions
of the
Servicing Agreement;
NOW
THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Owner and the Servicer agree as follows:
AGREEMENT
1. Amendment
to Section 5.1(a).
Section
5.1(a) is amended and restated to read in its entirety as follows:
(a) The
Servicer agrees to indemnify and hold harmless the Owner against any and
all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, fees and expenses that the Owner may sustain
in
any way related to the failure of the Servicer to service the Mortgage
Loans in
compliance with the terms of this Agreement (“Losses”);
provided, however, the Servicer shall not be liable hereunder with respect
to
(i) any action or inaction resulting from the written direction or consent
of
the Owner, (ii) any action or inaction resulting from the Owner’s failure to
cause any Collateral File (or portion thereof) to be released to the Servicer
pursuant to Sections 2.18 or 4.2(c), or (iii) any action or inaction
resulting from the Owner’s failure to comply with Section 5.1(b) or Section
5.6 and provided further, that with respect to Losses related to claims
other
than third party claims, the Servicer shall only be liable to the Owner
for the
fees and expenses of the Owner’s legal counsel to the extent that such fees and
expenses are required to be reimbursed pursuant to Section 9.14 hereof.
The
Servicer shall notify the Owner if a claim is made by a third party with
respect
to this Agreement or the Mortgage Loans that the Servicer determines in
its good
faith judgment will materially affect the Owner’s interest in such Mortgage
Loans. The Servicer shall assume (with the written consent of the Owner)
the
defense of any such claim and, subject to the last sentence of this paragraph,
pay all reasonable expenses in connection therewith, including counsel
fees, and
promptly pay, discharge and satisfy any judgment or decree that may be
entered
against the Servicer or the Owner in respect of such claim. The Servicer
shall
follow any written instructions received from the Owner in connection with
any
such claim. The Servicer shall have the right to reimburse itself from
the
Account for all expenses, advances and liabilities incurred by the Servicer
in
respect of any such claim (whether or not the Servicer has assumed the
defense
thereof), except when the claim (x) is related to the Servicer’s
obligations to indemnify the Owner pursuant hereto, (y) results from the
failure of the Servicer to service the Mortgage Loans in compliance with
the
terms of this Agreement, or (z) results from the Servicer’s willful
misconduct, bad faith or negligence in performing its duties under this
Agreement.
1
2. Miscellaneous.
(a) On
and
after the date of this Amendment, each reference in the Servicing Agreement
to
“this Agreement,” “hereunder,” “hereof,” “herein” or words of like import, shall
mean and be a reference to the Servicing Agreement, as amended by this
Amendment.
(b) Except
as
specifically amended above, the Servicing Agreement is and shall continue
to be
in full force and effect and is hereby ratified and confirmed in all
respects.
(c) This
Amendment may be executed in any number of counterparts and by different
parties
in separate counterparts, each of which taken together shall constitute
one and
the same original.
(d) This
Amendment shall be governed by and construed in accordance with the laws
of the
State of New York (including Section 5-1401 of the New York General
Obligations Law) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without giving
effect
to conflict of laws principles other than Section 5-1401 of the New York
General Obligations Law.
(e) The
execution, delivery and effectiveness of this Amendment shall not operate
as a
waiver of any right, power or remedy of any party under the Servicing Agreement
or any other document, instrument or agreement executed in connection therewith,
nor constitute a waiver of any provision contained therein, except as
specifically set forth herein.
(f) The
headings in this Amendment are inserted for convenience of reference only
and
shall not affect the meaning or interpretation of this Amendment or any
provision hereof.
[signatures
follow]
2
TO
WITNESS THIS,
the
Owner and the Servicer have caused their names to be signed to this Amendment
by
their respective officers duly authorized as of the day and year first
written
above.
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WASHINGTON
MUTUAL BANK, FA
a
federally chartered savings bank
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| Title: | ||
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XXXXXX
BROTHERS BANK, FSB
a
federal savings bank
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[Signature
Page to July 2004 Amendment to September 2003 Servicing
Agreement]
| STATE OF WASHINGTON | ) |
| ) ss. | |
| COUNTY OF KING | ) |
This
instrument was acknowledged before me on ______________________, 2004,
by
_____________________ as _________________________ of Washington Mutual
Bank,
FA.
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[Print Name] ______________________ |
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NOTARY
PUBLIC in and for the State of
Washington,
residing at ___________________
My
commission expires
___________________
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| STATE OF ___________________ | ) |
| ) ss. | |
| COUNTY OF _________________ | ) |
This
instrument was acknowledged before me on ______________________, 2004,
by
_____________________ as _________________________ of Xxxxxx Brothers Bank,
FSB.
|
[Print Name] ______________________ |
||
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NOTARY
PUBLIC in and for the State of
___________,
residing at _________________
My
commission expires
__________________
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EXECUTION
VERSION
REGULATION
AB AMENDMENT TO SERVICING AGREEMENT
This
REGULATION AB AMENDMENT TO SERVICING AGREEMENT dated as of March 1, 2006
(the
"Amendment") between WASHINGTON MUTUAL BANK (formerly known as Washington
Mutual
Bank, FA), a savings bank organized under the laws of the United States,
as
servicer (the "Servicer"), and XXXXXX
BROTHERS BANK, FSB,
a
federal savings bank organized under the laws of the United States as owner
(the
"Owner"), is made with respect to the Servicing Agreement dated as of September
1, 2003, and amended as of July 1, 2004, (the "Original Servicing Agreement")
between the Servicer and the Owner. Capitalized terms used in this Amendment
without definition have the meanings assigned to them in the Original Servicing
Agreement.
The
parties wish to amend the Original Servicing Agreement in order to facilitate
compliance by the Owner and its assignees with Regulation AB (as defined
below).
Accordingly,
the parties agree as follows:
ARTICLE
I
AMENDMENTS
Section
1.1. Definitions
(a) Article
1
of the Original Servicing Agreement is amended by adding the following
definitions:
Commission:
The
United States Securities and Exchange Commission.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Issuing
Entity:
The
issuing entity, as such term is defined in Regulation AB, with respect to
any
Securitization Transaction.
Master
Servicer:
As
defined in Section 8.1(e).
Master
Servicing Agreement:
As
defined in Section 8.1(e).
Participating
Entity:
As
defined in Section 8.7(a)(iii).
Permitted
Reconstitution:
As
defined in Section 8.1(a).
Purchase
Agreement:
That
certain Mortgage Loan Purchase and Sale Agreement dated as of September 1,
2003
among Washington Mutual Bank, FA, Washington Mutual Bank fsb and Washington
Mutual Bank as the sellers and the Owner as the purchaser, as
amended.
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
Reconstitution
Agreement:
An
agreement or agreements entered into by the Servicer and the Owner and/or
certain third parties, including a Master Servicer, in connection with a
Reconstitution with respect to any or all of the Mortgage Loans serviced
under
this Agreement.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject
to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan.
7, 2005)) or by the staff of the Commission, or as may be provided by the
Commission or its staff from time to time.
Required
Notice:
With
respect to any Reconstitution, 15 days' prior written notice.
Sarbanes
Certification:
As
defined in Section 8.7(a)(iv).
Securities
Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (1) a sale or other transfer of some or all
of the
Mortgage Loans directly or indirectly to an issuing entity in connection
with an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage
loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Servicer
Information:
The
information provided by the Servicer, any Subservicer or any Subcontractor
pursuant to Section 8.5(a) and (b).
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Sponsor:
The
sponsor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or
more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Servicer or a
Subservicer.
2
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Servicer or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Servicer under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
(b) Article
1
of the Original Servicing Agreement is amended by amending and restating
the
following definitions in their entirety:
Disclosure
Document:
With
respect to any Securitization Transaction, a prospectus, prospectus supplement,
free writing prospectus, private placement memorandum or offering circular
prepared in connection with such Securitization Transaction.
Portfolio
Loans:
As
defined in Section 8.1(d).
Transferred
Loans:
As
defined in Section 8.1(d).
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.
(c) Article
1
of the Original Servicing Agreement is amended by deleting the following
definitions: "Indemnified Party," "Pass-Through Transfer" and "Servicer's
Information."
(d) The
following provisions of the Original Servicing Agreement shall cease to be
effective as of December 31, 2006: (i) Sections 4.4 and 4.5 and the related
definitions of "Indemnitee," "Management Assertion" and "USAP" in Article
1 and
(ii) clause (viii) of Section 6.1 and the related definition of "Certification
Cure Deadline."
(e) Section
5.6 of the Original Servicing Agreement is amended and restated in its entirety
to read as follows:
Section
5.6 Transfer
of Mortgage Loans
(a) The
Owner
shall have the right, without the consent of the Servicer, to assign its
interest under this Agreement with respect to any Mortgage Loans that have
been
assigned in accordance with Article 6 of the Purchase Agreement; provided,
however, that the Owner shall give the Servicer Required Notice prior to
any
such assignment of its interest under this Agreement. The Owner shall also
have
the right to designate any Person to exercise the rights of Owner hereunder
to
the extent provided in Section 8.1(e) of this Agreement. In any such case,
all
references to the Owner shall be deemed to include such assignee or
designee.
3
(b) The
Servicer shall keep books and records in which, subject to such reasonable
regulations as it may prescribe, the Servicer shall note transfers of Mortgage
Loans. For the purposes of this Agreement, the Servicer shall be under no
obligation to deal with any Person with respect to this Agreement or any
Mortgage Loan unless the books and records show such person as the owner
of such
Mortgage Loan. Upon receipt of a written notice from the Owner of any assignment
of any Mortgage Loan permitted under the Purchase Agreement, the Servicer
shall
xxxx its books and records to reflect the ownership of such Mortgage Loan
by
such assignee, and, except with respect to the indemnification obligations
set
forth in any Indemnification Agreement entered into pursuant to Section 8.9
hereof, the previous Owner shall be released from its obligations hereunder
to
the extent such obligations related to Mortgage Loans sold by the Owner and
arise after the date of such sale.
(f) Article
8
of the Original Servicing Agreement is amended and restated in its entirety
to
read as follows:
ARTICLE
8
RECONSTITUTIONS;
REGULATION AB COMPLIANCE
Section
8.1 Reconstitutions;
Servicer's Purchase Right
(a) Upon
Required Notice to the Servicer and subject to the terms and conditions in
Article 6 of the Purchase Agreement, the Owner may, at its sole option, effect
one or more Whole Loan Transfers or Securitization Transactions with respect
to
some or all of the Mortgage Loans (each, a "Permitted
Reconstitution").
In
connection with any Permitted Reconstitution, the Owner, in its sole discretion,
may assign its rights under this Agreement with respect to the Mortgage Loans
subject to such Permitted Reconstitution, and the Servicer shall service
the
affected Mortgage Loans as the servicer, or as subservicer, if a Master Servicer
is employed as provided in Section 8.1(e)(i), on the terms and conditions
set
forth herein and in any related Reconstitution Agreement.
(b) The
Owner
shall reimburse the Servicer for all reasonable out-of-pocket expenses,
including attorneys’ fees, incurred by the Servicer in connection with any
Reconstitution.
(c) With
respect to any Permitted Reconstitution, the Servicer shall (i) provide the
Owner with information and appropriate verification of information in its
possession or control as may reasonably be necessary in order to effect such
Reconstitution (and, to the extent any such information is in the possession
or
control of any third party, use commercially reasonable efforts to cause
such
third party to provide such information) and (ii) cooperate with all reasonable
requests and due diligence procedures not otherwise addressed
herein.
4
(d) If,
at
any time, either (i) the aggregate Unpaid Principal Balance of any pool of
Mortgage Loans that are transferred pursuant to a Whole Loan Transfer
(“Transferred
Loans”)
is
less than or equal to one percent (1%) of the Unpaid Principal Balance of
such
Transferred Loans on the date of such Whole Loan Transfer, or (ii) the aggregate
Unpaid Principal Balance of any Mortgage Loans serviced hereunder and retained
by the Owner (“Portfolio
Loans”)
is
less than or equal to one percent (1%) of the Unpaid Principal Balance of
such
Portfolio Loans on the date of purchase from the applicable Seller, the Servicer
may elect, in its sole discretion, to purchase such Transferred Loans or
Portfolio Loans, as the case may be. The purchase price of Mortgage Loans
purchased by the Servicer pursuant to this Section 8.1(d) shall equal the
lesser of (i) the aggregate fair market value of such Mortgage Loans at the
time
of purchase by the Servicer and (ii) the aggregate Unpaid Principal Balance
of
such Mortgage Loans, plus the amount of interest on such Unpaid Principal
Balance at the applicable Net Rate from the date to which interest has last
been
paid and distributed to the Owner to, and including, the last day of the
month
in which such purchase occurs.
(e)
(i) Notwithstanding
anything to the contrary contained in this Agreement, the Owner shall have
the
right, in its sole discretion, upon 30 days’ prior written notice to the
Servicer, to appoint and designate a master servicer (the “Master
Servicer”),
as
master servicer of Mortgage Loans. The Servicer acknowledges that the Purchaser
has provided notice that it will appoint and designate Aurora Loan Services
LLC
as Master Servicer of the Mortgage Loans and that the Mortgage Loans will,
subject to Section 8.1(e)(ii), be serviced in accordance with this Agreement.
The written notice required pursuant to this Section 8.1(e)(i) is deemed
to have
been satisfied with respect to the appointment of Aurora Loan Services LLC.
Upon
receipt of written notice of the appointment of a Master Servicer pursuant
to
this Section 8.1(e)(i) (other than Aurora Loan Services LLC), the Servicer
shall
promptly enter into a servicing agreement (a “Master
Servicing Agreement”)
to
service the Mortgage Loans for the Master Servicer in accordance with the
Master
Servicer’s requirements as set forth in the Master Servicer’s servicing guide;
provided, however, that the Servicer shall be under no obligation to enter
into
any Master Servicing Agreement unless the obligations and duties of the Servicer
as a subservicer thereunder (A) are not materially different from than those
set
forth herein, (B) do not cause undue burden on the Servicer, (C) do not expand
in any material respect any of the obligations, duties or liabilities of
the
Servicer hereunder and (D) will not result in any increased cost to the
Servicer. If the Servicer and the Master Servicer enter into a Master Servicing
Agreement, the Servicer shall service the Mortgage Loans, and remit and report
to the Master Servicer, in accordance with the terms of the Master Servicing
Agreement and, to the extent inconsistent therewith, the servicing provisions
set forth in this Agreement shall be superseded by the Master Servicing
Agreement. If the Servicer and the Master Servicer do not enter into a Master
Servicing Agreement, the Servicer shall service the Mortgage Loans, and remit
and report to the Master Servicer, in accordance with the terms of this
Agreement and any related Reconstitution Agreement.
5
(ii) Upon
appointment of a Master Servicer in accordance with Section 8.1(e)(i), the
Servicer shall correspond and communicate solely with the Master Servicer,
as if
the Master Servicer were the “Owner” hereunder. The Master Servicer shall have
all rights as designee of the Owner to enforce the covenants and conditions
set
forth in this Agreement, and the Servicer shall follow and shall be entitled
to
rely on the instructions of the Master Servicer under this Agreement as if
such
instructions were the instructions of the Owner. The Master Servicer shall
have
the right to give any waivers or consents required or allowed under this
Agreement on behalf of the Owner, and the Servicer shall be entitled to rely
on
such waivers and consents as if such waivers or consents were the waivers
or
consents of the Owner. The Master Servicer is empowered to enter into and
execute and deliver any amendments or modifications to this Agreement as
the
Owner’s designee hereunder, and such amendments or modifications shall be
binding upon the Owner as if the Owner had executed and delivered the same.
The
Servicer shall treat the Master Servicer as “Owner” hereunder until the Servicer
receives written notice from the Owner that the Owner has terminated the
Master
Servicer.
(iii) Upon
receipt of notice of termination of the Master Servicer, the Servicer shall
no
longer deal with the Master Servicer and shall instead deal directly with
the
Owner. From and after receipt of such notice of termination of the Master
Servicer, the Servicer shall service the applicable Mortgage Loans in accordance
with the provisions of this Agreement and shall give no effect to any Master
Servicing Agreement entered into with the Master Servicer.
Section
8.2 Reconstitution
Agreements
In
connection with each Permitted Reconstitution, the Servicer shall:
(i) execute
and deliver a Reconstitution Agreement containing terms and conditions that
are
consistent with the terms and conditions set forth herein and in the Purchase
Agreement and, in the case of a Securitization Transaction, that are customary
for publicly offered or privately placed, rated or unrated securities backed
by
mortgage loans similar to the Mortgage Loans included in such Securitization
Transaction, provided that (A) any servicing reporting requirements must
be
consistent with the standard practices of the Servicer; and (B) such
Reconstitution Agreement does not expand in any material respect any of the
obligations, duties or liabilities of the Servicer under this Agreement or
result in any increased cost to the Servicer; and
(ii) with
respect to any Securitization Transaction in which all or substantially all
of
the mortgage loans in the entire related transaction consist of Mortgage
Loans,
(A) execute and deliver a pooling and servicing agreement that meets the
requirements of clause (i) above, provided that each of the parties to such
pooling and servicing agreement negotiates in good faith any terms or conditions
in such pooling and servicing agreement not specifically referenced or provided
for under this Agreement or the Purchase Agreement; and (B) provide the Owner
with opinions of counsel as to the Servicer’s corporate authority and the
enforceability of the pooling and servicing agreement against the Servicer
and
certificates from public officials, each as the Servicer shall reasonably
determine to be necessary to effect such Securitization Transaction.
6
Section
8.3 Intent
of the Parties; Reasonableness
The
Owner
and the Servicer acknowledge and agree that the purpose of Sections 8.4,
8.5,
8.6, 8.7, 8.8 and 8.9 is to facilitate compliance by the Owner and any Depositor
with the provisions of Regulation AB and related rules and regulations
of
the Commission. Although
Regulation AB is applicable by its terms only to offerings of asset-backed
securities that are registered under the Securities Act, the Company
acknowledges that investors in privately offered securities may require that
the
Purchaser and any Depositor provide comparable disclosure in unregistered
offerings. References in this Agreement to compliance with Regulation AB
include
provision of comparable disclosure in private offerings.
Neither
the Owner nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder (or
the
provision in a private offering of disclosure comparable to that required
under
the Securities Act). The Servicer acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise,
and
agrees to comply with requests made by the Owner or any Depositor in good
faith
for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. Each party agrees that it shall cooperate
in
good faith to amend this Amendment and/or the Original Servicing Agreement
in
light of any changes in the interpretations of the requirements of Regulation
AB
over time, whether due to interpretive guidance provided by the Commission
or
its staff, consensus among participants in the asset-backed securities markets,
advice of counsel, or otherwise. In connection
with any Securitization Transaction, the Servicer shall cooperate fully with
the
Owner to deliver to the Owner (including any of its assignees or designees)
and
any Depositor, any and all statements, reports, certifications, records and
any
other information necessary in the good faith determination of the Owner
or such
Depositor to permit the Owner or such Depositor to comply with the provisions
of
Regulation AB, together with such disclosures relating to the Servicer, any
Subservicer, any Third-Party Originator and the Mortgage Loans, or the servicing
of the Mortgage Loans, reasonably believed by the Owner or such Depositor
to be
necessary in order to effect such compliance.
The
Owner
(including any of its assignees or designees) shall cooperate with the Servicer
by providing timely notice of requests for information under these provisions
and by reasonably limiting such requests to information required, in the
Owner's
reasonable judgment, to comply with Regulation AB.
7
Section
8.4 Additional
Representations and Warranties of the Servicer
(a) The
Servicer shall be deemed to represent to the Owner and to any Depositor,
as of
the date on which information is first provided to the Owner or such Depositor
under Section 8.5 for a Permitted Reconstitution that, except as disclosed
in
writing to the Owner or such Depositor, as applicable: (i)
the
Servicer is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any
other
securitization due to any act or failure to act of the Servicer; (ii)
the
Servicer has not been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; (iii) no
material noncompliance
with the applicable servicing criteria with respect to other securitizations
of
residential mortgage loans involving the Servicer as servicer
has been
disclosed or reported by the Servicer; (iv) no material
changes to the Servicer’s policies or procedures with respect to the servicing
function it will perform under this Agreement and any Reconstitution Agreement
for mortgage loans of a type similar to the Mortgage Loans
have
occurred during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Servicer’s financial
condition that could have a material adverse effect on the performance by
the
Servicer of its servicing obligations under this Agreement or any Reconstitution
Agreement;
(vi)
there are no material
legal or governmental proceedings pending (or known to be contemplated) against
the Servicer, any Subservicer or any Third-Party Originator;
and
(vii) there are no affiliations, relationships or transactions relating to
the
Servicer or any Subservicer with respect to any Securitization Transaction
and
any party thereto identified by the related Depositor of a type described
in
Item 1119 of Regulation AB (other than the affiliation between the Servicer
and
Washington Mutual Bank fsb and Washington Mutual Mortgage Securities
Corp.).
(b) If
so
requested by the Owner or any Depositor on any date following the date on
which
information is first provided to the Owner or any Depositor under Section
8.5,
the Servicer shall, within five Business Days following such request, confirm
in
writing the accuracy of the representations and warranties set forth in Section
8.4(a) or, if any such representation and warranty is not accurate as of
the
date of such request, provide reasonably adequate disclosure of the pertinent
facts, in writing, to the requesting party.
8
Section
8.5 Information
to Be Provided by the Servicer
In
connection with any Securitization Transaction that is a Permitted
Reconstitution, the Servicer shall (x) within five Business Days following
request by the Owner or any Depositor, provide to the Owner and such Depositor
(or, as applicable, cause each Subservicer to provide), in writing and in
form
and substance reasonably satisfactory to the Owner and such Depositor, the
information and materials specified in Sections 8.5(a) and (d), and (y) as
promptly as practicable following notice to or discovery by the Servicer,
provide to the Owner and any Depositor (in writing and in form and substance
reasonably satisfactory to the Owner and such Depositor) the information
specified in Section 8.5(b).
(a) If
so
requested by the Owner or any Depositor, the Servicer shall provide such
information regarding the Servicer, as servicer of the Mortgage Loans, and,
as
applicable, each Subservicer, as is requested for the purpose of compliance
with
Item 1108 of Regulation AB. Such information shall include, at a
minimum:
(i) the
Servicer’s and each Subservicer's form of organization;
(ii) a
description of any material legal or governmental proceedings pending (or
known
to be contemplated) against the Servicer and each Subservicer;
(iii) a
description of any affiliation or relationship between the Servicer and each
Subservicer and any of the following parties to a Securitization Transaction,
as
such parties are identified to the Servicer by the Owner or any Depositor
in
writing in advance of such Securitization Transaction:
(A) the
Sponsor;
(B) the
Depositor;
(C) the
Issuing Entity;
(D) any
servicer;
(E) any
trustee;
(F) any
originator;
(G) any
significant obligor;
(H) any
enhancement or support provider; and
(I) any
other
material transaction party.
(iv) a
description of how long the Servicer and each Subservicer have been servicing
residential mortgage loans; a general discussion of the Servicer’s and each
Subservicer's experience in servicing assets of any type as well as a more
detailed discussion of the Servicer’s and each Subservicer's experience in, and
procedures for, the servicing function it will perform under this Agreement
and
any Reconstitution Agreement; information regarding the size, composition
and
growth of the Servicer’s and each Subservicer's portfolio of residential
mortgage loans of a type similar to the Mortgage Loans and information on
factors related to the Servicer and each Subservicer that may be material,
in
the good faith judgment of the Owner or any Depositor, to any analysis of
the
servicing of the Mortgage Loans or the related asset-backed securities, as
applicable, including, without limitation:
(A) whether
any prior securitizations of mortgage loans of a type similar to the Mortgage
Loans involving the Servicer or any Subservicer have defaulted or experienced
an
early amortization or other performance triggering event because of servicing
during the three-year period immediately preceding the related Securitization
Transaction;
9
(B) the
extent of outsourcing the Servicer and each Subservicer utilizes;
(C) whether
there has been previous disclosure of material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential mortgage
loans involving the Servicer or any Subservicer during the three-year period
immediately preceding the related Securitization Transaction;
(D) whether
the Servicer or any Subservicer has been terminated as servicer in a residential
mortgage loan securitization, either due to a servicing default or to
application of a servicing performance test or trigger; and
(E) such
other information as the Owner or any Depositor may reasonably request for
the
purpose of compliance with Item 1108(b)(2) of Regulation AB;
(v) a
description of any material changes during the three-year period immediately
preceding the related Securitization Transaction to the Servicer’s and each
Subservicer's policies or procedures with respect to the servicing function
it
will perform under this Agreement and any Reconstitution Agreement for mortgage
loans of a type similar to the Mortgage Loans;
(vi) information
regarding the Servicer’s and each Subservicer's financial condition, to the
extent that there is a material risk that an adverse financial event or
circumstance involving the Servicer or Subservicer could have a material
adverse
effect on the performance by the Servicer or Subservicer of its servicing
obligations under this Agreement or any Reconstitution Agreement;
(vii) information
regarding advances made by the Servicer and each Subservicer on the Mortgage
Loans and the Servicer’s and Subservicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately preceding
the
related Securitization Transaction, which may be limited to a statement by
an
authorized officer of the Servicer or Subservicer to the effect that the
Servicer or Subservicer has made all advances required to be made on residential
mortgage loans serviced by it during such period, or, if such statement would
not be accurate, information regarding the percentage and type of advances
not
made as required, and the reasons for such failure to advance;
10
(viii) a
description of the Servicer’s and each Subservicer's processes and procedures
designed to address any special or unique factors involved in servicing loans
of
a similar type as the Mortgage Loans;
(ix) a
description of the Servicer’s and each Subservicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through liquidation
of mortgaged properties, sale of defaulted mortgage loans or workouts;
and
(x) information
as to how the Servicer and each Subservicer defines or determines delinquencies
and charge-offs, including the effect of any grace period, re-aging,
restructuring, partial payments considered current or other practices with
respect to delinquency and loss experience.
(b) If
so
requested by the Owner or any Depositor for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Servicer shall (or shall cause each Subservicer
to)
(i) notify the Owner and such Depositor in writing of (A) any material
litigation or governmental proceedings pending against the Servicer or any
Subservicer and (B) any affiliations or relationships that develop following
the
closing date of a Securitization Transaction between the Servicer or any
Subservicer and any of the parties specified in clause (iii) of Section 8.5(a)
(and any other parties identified in writing by the requesting party) with
respect to such Securitization Transaction, and (ii) provide to the Owner
and
such Depositor a description of such proceedings, affiliations or
relationships.
(c) As
a
condition to the succession to the Servicer or any Subservicer as servicer
or
subservicer under this Agreement or any Reconstitution Agreement by any Person
(i) into which the Servicer or such Subservicer may be merged or consolidated,
or (ii) which may be appointed as a successor to the Servicer or any
Subservicer, the Servicer shall provide to the Owner and any Depositor, at
least
15 calendar days prior to the effective date of such succession or appointment,
(x) written notice to the Owner and such Depositor of such succession or
appointment and (y) in writing and in form and substance reasonably satisfactory
to the Owner and such Depositor, all information reasonably requested by
the
Owner or such Depositor in order to comply with its reporting obligation
under
Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
11
(d) In
addition to such information as the Servicer is obligated to provide pursuant
to
other provisions of this Agreement, if so requested by the Owner or any
Depositor, the Servicer shall provide such other information which is available
to the Servicer without unreasonable effort or expense regarding the performance
or servicing of the Mortgage Loans as is reasonably required for distribution
reports in accordance with Item 1121 of Regulation AB and as mutually agreed
to
by the Servicer and the Owner or such Depositor. Such information shall be
provided concurrently with the monthly reports otherwise required to be
delivered by the Servicer under this Agreement, commencing with the first
such
report due not less than ten (10) Business Days following such
request.
Section
8.6. Servicer
Compliance Statement
On
or
before March 15 of each calendar year, commencing in 2007, the Servicer shall
deliver to the Owner and any Depositor a statement of compliance addressed
to
the Owner and such Depositor and signed by an authorized officer of the
Servicer, to the effect that (i) a review of the Servicer’s activities during
the immediately preceding calendar year (or applicable portion thereof) and
of
its performance under this Agreement and any applicable Reconstitution Agreement
during such period has been made under such officer’s supervision, and (ii) to
the best of such officer’s knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar
year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status
thereof.
Section
8.7 Report
on Assessment of Compliance and Attestation
(a) On
or
before March 15 of each calendar year, commencing in 2007, the Servicer
shall:
(i) deliver
to the Owner and any Depositor a report (in form and substance reasonably
satisfactory to the Owner and such Depositor) regarding the Servicer’s
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed
to
the Owner and such Depositor and signed by an authorized officer of the
Servicer, and shall address each of the Servicing Criteria specified on
Exhibit H
hereto;
(ii) deliver
to the Owner and any Depositor a report of a registered public accounting
firm
reasonably acceptable to the Owner and such Depositor that attests to, and
reports on, the assessment of compliance made by the Servicer and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities
Act and
the Exchange Act;
12
(iii) cause
each Subservicer and each Subcontractor determined by the Servicer pursuant
to
Section 8.8(b) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB (each such Subcontractor, a “Participating
Entity”),
to
deliver to the Owner and any Depositor an assessment of compliance and
accountants’ attestation as and when provided in paragraphs (i) and (ii) of this
Section 8.7(a); and
(iv) if
requested by the Owner or any Depositor not later than February 1 of the
calendar year in which such certification is to be delivered, deliver to
the
Owner, such Depositor and any other Person that will be responsible for signing
the certification (a “Sarbanes
Certification”)
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to
Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a certification in the
form
attached hereto as Exhibit D.
The
Servicer acknowledges that the parties identified in clause (iv) above may
rely
on the certification provided by the Servicer pursuant to such clause in
signing
a Sarbanes Certification and filing such with the Commission. Neither the
Owner
nor any Depositor will require delivery of a certification under clause (iv)
above unless such Depositor is required under the Exchange Act to file an
annual
report on Form 10-K with respect to an issuing entity whose asset pool includes
Mortgage Loans. Further, no certification delivered under clause (iv) above
shall be filed by the Owner or such Depositor or any designee thereof as
an
exhibit to, or otherwise included in, any filing with the Commission, except
to
the extent (A) required by applicable law or (B) the Owner or such Depositor
reasonably determines that filing such certification is required to meet
its
disclosure obligations.
(b) Each
assessment of compliance provided by a Subservicer pursuant to Section
8.7(a)(iii) shall address each of the Servicing Criteria specified on
Exhibit H
hereto
and identified as applicable to such Subservicer in an officer’s certificate
delivered to the Owner on or prior to the date on which such Subservicer
is
appointed. An assessment of compliance provided by a Subcontractor pursuant
to
Section 8.7(a)(iii) need not address any elements of the Servicing Criteria
other than those specified by the Servicer pursuant to Section
8.8(b).
13
Section
8.8 Use
of Subservicers and Subcontractors
The
Servicer shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Servicer as servicer under this Agreement
or any Reconstitution Agreement unless the Servicer complies with the provisions
of paragraph (a) of this Section 8.8. The Servicer shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Servicer as servicer under this Agreement or any
Reconstitution Agreement unless the Servicer complies with the provisions
of
paragraph (b) of this Section 8.8.
(a) It
shall
not be necessary for the Servicer to seek the consent of the Owner or any
Depositor to the utilization of any Subservicer. The Servicer shall cause
any
Subservicer used by the Servicer (or by any Subservicer) for the benefit
of the
Owner and any Depositor to comply with the provisions of this Section 8.8(a)
and
with Sections 8.4, 8.5(b) and (d), 8.6, 8.7 and 8.9 of this Agreement to
the
same extent as if such Subservicer were the Servicer, and to provide the
information required with respect to such Subservicer under Section 8.5(c)
of
this Agreement. The Servicer shall be responsible for obtaining from each
Subservicer and delivering to the Owner and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under Section
8.6, any assessment of compliance and attestation required to be delivered
by
such Subservicer under Section 8.7 and any certification required to be
delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 8.7 as and when required to be
delivered.
(b) It
shall
not be necessary for the Servicer to seek the consent of the Owner or any
Depositor to the utilization of any Subcontractor. The Servicer shall promptly
upon request provide to the Owner and any Depositor (or any designee of such
Depositor, such as a Master Servicer or administrator) a written description
(in
form and substance satisfactory to the Owner and such Depositor) of the role
and
function of each Subcontractor utilized by the Servicer or any Subservicer,
specifying (i) the identity of each such Subcontractor, (ii) which (if any)
of
such Subcontractors are Participating Entities, and (iii) which elements
of the
Servicing Criteria will be addressed in assessments of compliance provided
by
each Subcontractor identified pursuant to clause (B) of this
paragraph.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor
to comply with the provisions of Sections 8.7 and 8.9 of this Agreement to
the
same extent as if such Subcontractor were the Servicer. The Servicer shall
be
responsible for obtaining from each Subcontractor and delivering to the Owner
and any Depositor any assessment of compliance and attestation required to
be
delivered by such Subcontractor under Section 8.7, in each case as and when
required to be delivered.
14
Section
8.9 Indemnification;
Remedies
(a) With
respect to any Securitization Transaction for which Servicer Information
is
included in a related Disclosure Document, the Servicer, on the one hand,
and
the Owner, the Depositor and any broker dealer acting as underwriter, placement
agent or initial purchaser, on the other hand, shall execute and deliver
an
indemnification agreement (an “Indemnification
Agreement”)
in
substantially the form attached as Exhibit
I hereto,
pursuant to which certain parties shall indemnify other party or parties
and
their respective affiliates and each Person who controls any of such parties
(within the meaning of Section 15 of the Securities Act) and their respective
present and former directors, officers and employees for the matters set
forth
in such Indemnification Agreement.
(b) The
Servicer shall indemnify the Owner, the Depositor, each Sponsor, each Issuing
Entity and each Person responsible for the preparation, execution or filing
of
any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant
to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction and each Person who controls any of such parties
(within the meaning of Section 20 of the Exchange Act) and their respective
affiliates, present and former directors, officers and employees, and shall
hold
each of them harmless from and against any losses damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any
other
costs, fees and expenses that any of them may sustain arising out of or based
upon:
(i) any
failure by the Servicer, any Subservicer or any Subcontractor
to
deliver any information report, certification, accountants' letter or other
material when and as required under this Article 8, including any failure
by the
Servicer to identify pursuant to Section 8.8(b) any Subcontractor “participating
in the servicing function” within the meaning of Item 1122 of Regulation AB;
(ii) any
untrue statement of a material fact contained in any information, report
or
certification delivered in written or electronic form or the omission to
state
therein any material fact required to be stated therein, if applicable, or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, by the Servicer,
any
Subservicer or any Subcontractor
pursuant
to Sections 8.4(b), 8.5(b) or (d), 8.6, 8.7(a)(i) or 8.7(a)(iv).
In
the
case of any failure of performance described in clause (i) of this Section
8.9(b), the Servicer shall promptly reimburse the Owner, any Depositor, as
applicable, and each Person responsible for the preparation, execution or
filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant
to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information,
report, certification, accountants’ letter or other material not delivered as
required by the Servicer,
any
Subservicer or any Subcontractor.
15
(c) (i) Any
failure by the Servicer, any Subservicer or any Subcontractor to
deliver any information, report, certification, accountants’ letter or other
material when and as required under this Article,
or any
breach by the Servicer of a representation or warranty set forth in Section
8.4(a) or in a writing furnished pursuant to Section 8.4(b) and made as of
a
date prior to the closing date of the related Securitization Transaction,
to the
extent that such failure or breach
is
not cured by such closing date, or any breach by the Servicer of a
representation or warranty in a writing furnished pursuant to Section 8.4(b)
to
the extent made as of a date subsequent to such closing date, shall, except
as
provided in clause (ii) of this Section 8.9(c), immediately and automatically,
without notice or grace period, constitute an Event of Default with respect
to
the Servicer under this Agreement and any applicable Reconstitution Agreement,
and shall entitle the Owner or Depositor, as applicable, in its sole discretion
to terminate the rights and obligations of the Servicer as servicer under
this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Servicer; provided
that to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Servicer as servicer, such provision
shall be given effect.
(ii) Any
failure by the Servicer, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants’ letter when and
as required under Section 8.6 or 8.7, including (except as provided below)
any
failure by the Servicer to identify pursuant to Section 8.8(b) any Subcontractor
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, which continues unremedied for ten calendar days after the
date
on which such information, report, certification or accountants' letter was
required (or if the Depositor (or its agent) has obtained an extension to
the
Commission filing deadline for the related 10-K, the date occurring ten calendar
days prior to the extended filing deadline) shall constitute an Event of
Default
with respect to the Servicer under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Owner or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations
of
the Servicer as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Servicer; provided
that to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Servicer as servicer, such provision
shall be given effect.
16
Neither
the Owner nor any Depositor shall be entitled to terminate the rights and
obligations of the Servicer pursuant to this subparagraph (c)(ii) if a failure
of the Servicer to identify a Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB was attributable
solely to the role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.
(iii) The
Servicer shall promptly reimburse the Owner (or any designee of the Owner,
such
as a Master Servicer) and any Depositor, as applicable, for all reasonable
expenses incurred by the Owner (or such designee) or such Depositor as such
are
incurred, in connection with the termination of the Servicer as servicer
and the
transfer of servicing of the Mortgage Loans to a successor servicer. The
provisions of this paragraph shall not limit whatever rights the Owner or
any
Depositor may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in equity or at
law,
such as an action for damages, specific performance or injunctive
relief.
(iv) Notwithstanding
anything in clauses (c)(i) or (c)(ii) of this Section 8.9 to the contrary,
the
initial failure by the Servicer, any Subservicer or any Subcontractor to
deliver
any information, report, certification or accountants’ letter when and as
required under this Agreement shall not constitute an Event of Default with
respect to the Servicer under this Agreement and any applicable Reconstitution
Agreement, provided that (A) such failure may not reasonably be expected
to have
a material adverse effect on the Purchaser, any Depositor or the Sponsor)
and
(B) such failure shall be remedied as soon as practicable.
(d) Notwithstanding
anything in this Section 8.9 to the contrary, in no event shall the Servicer
have any liability for any indirect, special, consequential or punitive damages,
losses, costs or expenses incurred by the Owner or any other party entitled
to
indemnification or other remedies hereunder.
(f) The
Original Servicing Agreement is amended by substituting Exhibit
D attached
hereto for Exhibit
D to
the
Original Servicing Agreement.
(g) The
Original Servicing Agreement is amended by adding the following exhibits:
Exhibit
H Servicing
Criteria
Exhibit
I Form
of
Indemnification Agreement
17
ARTICLE
II
MISCELLANEOUS
Section
2.1 Conditions
to Effectiveness
This
Amendment shall be effective upon the execution and delivery by both parties
of
this Amendment.
Section
2.2 Reference
to and Effect on the Purchase Agreement and the Servicing
Agreement
Each
reference in the Servicing Agreement to "this Agreement" or otherwise to
the
Servicing Agreement shall hereafter be deemed to refer to the Servicing
Agreement as amended hereby. Each reference to the Servicing Agreement in
the
Purchase Agreement or in any other document or agreement executed in connection
therewith or with the Servicing Agreement shall hereafter be deemed to refer
to
the Servicing Agreement as amended hereby.
Section
2.3 Ratification
The
Servicing Agreement, as amended by this Amendment, is hereby ratified and
confirmed and shall continue unimpaired and in full force and effect in
accordance with the provisions thereof, as amended or modified on or prior
to
the date hereof and as hereby amended.
Section
2.4 Applicable
Law
This
Amendment shall be governed by and construed in accordance with the laws
of the
State of New York (including Section 5-1401 of the New York General
Obligations Law) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without giving
effect
to conflict of laws principles other than Section 5-1401 of the New York
General Obligations Law.
Section
2.5 Severability
Any
provision of this Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions of this Amendment and without affecting the validity or
enforceability of such or any other provision in any other
jurisdiction.
Section
2.6 Counterparts
This
Amendment may be executed simultaneously in counterparts, each of which shall
be
deemed an original, and it shall not be necessary in making proof of this
Amendment to produce or account for more than one such counterpart for each
party hereto.
[Signature
page follows]
18
The
Servicer and the Owner have caused this Regulation AB Amendment to Servicing
Agreement to be executed as of the date set forth above.
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SERVICER:
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WASHINGTON
MUTUAL BANK
a
federally chartered savings bank
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Name:
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Title:
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OWNER:
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XXXXXX
BROTHERS BANK, FSB
a
federal savings bank organized under the laws of the
United
States
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Name:
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Title:
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19
EXHIBIT
D
FORM
OF ANNUAL CERTIFICATION
Re:
The
[ ]
agreement dated as of [ ],
200[
]
(the “Agreement”),
among
[IDENTIFY
PARTIES]
I,
________________________________, the _____________________ of Washington
Mutual
Bank (the “Servicer”),
certify to [the Owner], [the Depositor], and the [Master Servicer] [Securities
Administrator] [Trustee], and their officers, with the knowledge and intent
that
they will rely upon this certification, that:
(1)
I
have
reviewed the servicer compliance statement of the Servicer provided in
accordance with Item 1123 of Regulation AB (the “Compliance
Statement”),
the
report on assessment of the Servicer’s compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the “Servicing
Criteria”),
provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the “Exchange
Act”)
and
Item 1122 of Regulation AB (the “Servicing
Assessment”),
the
registered public accounting firm’s attestation report provided in accordance
with Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the “Attestation
Report”),
and
all servicing reports, officer’s certificates and other information relating to
the servicing of the Mortgage Loans by the Servicer during 200[ ] that were
delivered by the Servicer to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
“Servicing
Information”);
(2)
Based
on
my knowledge, the Servicing Information, taken as a whole, does not contain
any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in the light of the circumstances under which
such
statements were made, not misleading with respect to the period of time covered
by the Servicing Information;
(3)
Based
on
my knowledge, all of the Servicing Information required to be provided by
the
Servicer under the Agreement has been provided to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee];
(4)
I
am
responsible for reviewing the activities performed by the Servicer as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report,
the
Servicer has fulfilled its obligations under the Agreement; and
D-1
(5)
The
Compliance Statement required to be delivered by the Servicer pursuant to
the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Servicer and by each Subservicer and Subcontractor pursuant
to
the Agreement, have been provided to the [Depositor] [Master Servicer]. Any
material instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such reports.
| Date: | ||
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| By: | ||
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Name:
Title:
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D-2
EXHIBIT
H
SERVICING
CRITERIA
The
assessment of compliance to be delivered by [the Servicer] [Name of Subservicer]
shall address the criteria identified as below as “Applicable
Servicing Criteria”:
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Servicing
Criteria
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Applicable
Servicing
Criteria
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Reference
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Criteria
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General
Servicing Considerations
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1122(d)(1)(i)
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Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction agreements.
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X
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1122(d)(1)(ii)
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If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
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X
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1122(d)(1)(iii)
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Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
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1122(d)(1)(iv)
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A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
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X
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Cash
Collection and Administration
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1122(d)(2)(i)
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Payments
on mortgage loans are deposited into the appropriate custodial
bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
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X
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1122(d)(2)(ii)
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Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
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X
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1122(d)(2)(iii)
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Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
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X
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H-1
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Servicing
Criteria
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Applicable
Servicing
Criteria
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||||
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Reference
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Criteria
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||||
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1122(d)(2)(iv)
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The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
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X
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1122(d)(2)(v)
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Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
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X
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1122(d)(2)(vi)
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Unissued
checks are safeguarded so as to prevent unauthorized access.
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X
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1122(d)(2)(vii)
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Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction
agreements;
(C) reviewed and approved by someone other than the person who
prepared
the reconciliation; and (D) contain explanations for reconciling
items.
These reconciling items are resolved within 90 calendar days of
their
original identification, or such other number of
days
specified in the transaction agreements.
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X
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Investor
Remittances and Reporting
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1122(d)(3)(i)
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Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the Servicer.
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X
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1122(d)(3)(ii)
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Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
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X
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H-2
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Servicing
Criteria
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Applicable
Servicing
Criteria
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||||
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Reference
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Criteria
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||||
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1122(d)(3)(iii)
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Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
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X
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1122(d)(3)(iv)
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Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
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X
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Pool
Asset Administration
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1122(d)(4)(i)
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Collateral
or security on mortgage loans is maintained as required by the
transaction
agreements or related mortgage loan documents.
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X
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1122(d)(4)(ii)
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Mortgage
loan and related documents are safeguarded as required by the
transaction
agreements
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X
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1122(d)(4)(iii)
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Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
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X
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1122(d)(4)(iv)
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Payments
on mortgage loans, including any payoffs, made in accordance
with the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements,
and
allocated to principal, interest or other items (e.g., escrow)
in
accordance
with the related mortgage loan documents.
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X
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1122(d)(4)(v)
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The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
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X
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1122(d)(4)(vi)
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Changes
with respect to the terms or status of an obligor’s mortgage loans (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
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X
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1122(d)(4)(vii)
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Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions,
as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
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X
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H-3
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Servicing
Criteria
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Applicable
Servicing
Criteria
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||||
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Reference
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Criteria
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||||
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1122(d)(4)(viii)
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Records
documenting collection efforts are maintained during the period
a mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including,
for example,
phone calls, letters and payment rescheduling plans in cases
where
delinquency is deemed temporary (e.g., illness or unemployment).
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X
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1122(d)(4)(ix)
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Adjustments
to interest rates or rates of return for mortgage loans with
variable
rates are computed based on the related mortgage loan documents.
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X
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1122(d)(4)(x)
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Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period
specified in
the transaction agreements; (B) interest on such funds is paid,
or
credited, to obligors in accordance with applicable mortgage
loan
documents and state laws; and (C) such funds are returned to
the obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction agreements.
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X
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1122(d)(4)(xi)
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Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that
such support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
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X
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1122(d)(4)(xii)
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Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
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X
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1122(d)(4)(xiii)
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Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of
days
specified in the transaction agreements.
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X
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H-4
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Servicing
Criteria
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Applicable
Servicing
Criteria
|
||||
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Reference
|
Criteria
|
||||
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1122(d)(4)(xiv)
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Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
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X
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1122(d)(4)(xv)
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Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
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H-5
EXHIBIT
I
FORM
OF INDEMNIFICATION AGREEMENT
[DEPOSITOR]
[TRUST/CERTIFICATES]
[DATE]
Reference
is made to the [OFFERING DOCUMENT] to [CERTIFICATES] (together, the “Offering
Materials”).
[Each
of]
[NAME OF SELLER(S)] (“Seller(s)”) hereby, severally and not jointly, agrees to
indemnify and hold harmless Structured Asset Securities Corporation (the
“Company”), Xxxxxx Brothers Holdings Inc. (the “Sponsor”) and Xxxxxx Brothers
Inc. (“Xxxxxx”), the respective affiliates, present and former directors,
officers and employees of each of the foregoing and each person, if any,
who
controls the Company, the Sponsor or Xxxxxx within the meaning of Section
15 of
the Securities Act of 1933, as amended (the “Act”), or Section 20 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), from and
against any and all losses, claims, liabilities, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any
other
costs, fees and expenses that any of them may sustain as and when such losses,
claims, liabilities, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
are incurred, insofar as such losses, claims, liabilities, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments,
and
any other costs, fees and expenses (or actions in respect thereof) arise
out of
or are based upon (i) any untrue statement or alleged untrue statement of
any
material fact contained in the information attached hereto on Exhibit
A
with
respect to such Seller (the “Seller Information”) or (ii) the omission or
alleged omission to state in the Seller Information any material fact required
to be stated therein or necessary to make the statements in the Seller
Information, in light of the circumstances under which they were made, not
misleading, in each case to the extent and only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was
made
in reliance upon and in strict conformity with the Seller Information furnished
by such Seller specifically for use in the Offering Materials as attached
hereto
as Exhibit
A.
In
addition, each of the Sellers, severally and not jointly, will reimburse
the
Company, the Sponsor and Xxxxxx, the affiliates of each of the foregoing,
the
present and former respective officers, directors and employees of each of
the
foregoing and any such controlling person for any legal or other expenses
reasonably incurred by it or any of them in connection with investigating
or
defending any such losses, claims, liabilities, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any
other
costs, fees and expenses, as and when incurred.
I-1
Washington
Mutual Bank (the “Servicer”) hereby agrees to indemnify and hold harmless the
Company, the Sponsor and Xxxxxx, the respective affiliates, present and former
directors, officers and employees of each of the foregoing and each person,
if
any, who controls the Company, the Sponsor or Xxxxxx within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against
any
and all losses, claims, liabilities, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs,
fees
and expenses that any of them may sustain as and when such losses, claims,
liabilities, damages, penalties, fines, forfeitures, legal fees and expenses
and
related costs, judgments, and any other costs, fees and expenses are incurred,
insofar as such losses, claims, liabilities, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any
other
costs, fees and expenses (or actions in respect thereof) arise out of or
are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in the information attached hereto on Exhibit
B
with
respect to the Servicer (the “Servicer Information”) or (ii) the omission or
alleged omission to state in the Servicer Information any material fact required
to be stated therein or necessary to make the statements in the Servicer
Information, in light of the circumstances under which they were made, not
misleading, in each case to the extent and only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was
made
in reliance upon and in strict conformity with the Servicer Information
furnished by the Servicer specifically for use in the Offering Materials
as
attached hereto as Exhibit
B.
In
addition, the Servicer will reimburse the Company, the Sponsor and Xxxxxx,
the
affiliates of each of the foregoing, the present and former respective officers,
directors and employees of each of the foregoing and any such controlling
person
for any legal or other expenses reasonably incurred by it or any of them
in
connection with investigating or defending any such losses, claims, liabilities,
damages, penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses, as and when
incurred.
The
Sponsor hereby agrees to indemnify and hold harmless each of the Sellers
and the
Servicer, their affiliates, respective officers and directors and each person,
if any, who controls such Seller or the Servicer within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any and
all
losses, claims, liabilities, damages, penalties, fines, forfeitures, legal
fees
and expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain as and when such losses, claims,
liabilities, damages, penalties, fines, forfeitures, legal fees and expenses
and
related costs, judgments, and any other costs, fees and expenses are incurred,
insofar as such losses, claims, liabilities, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any
other
costs, fees and expenses (or actions in respect thereof) arise out of or
are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in the Offering Materials or (ii) the omission or alleged
omission to state therein any material fact required to be stated therein
or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and will reimburse each of the Sellers
and
the Servicer, their affiliates, present and former directors, officers and
employees and any such controlling person for any legal or other expenses
reasonably incurred by it or any of them in connection with investigating
or
defending any such losses, claims, liabilities, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any
other
costs, fees and expenses, as and when incurred; provided,
however,
that
the Sponsor will not be liable in any such case to the extent that any such
losses, claims, liabilities, damages, penalties, fines, forfeitures, legal
fees
and expenses and related costs, judgments, and any other costs, fees and
expenses arise out of, or are based upon, an untrue statement or omission,
or
alleged untrue statement or omission, made in the Offering Materials in reliance
upon and in conformity with the Seller Information or the Servicer
Information.
I-2
For
purposes of this Indemnification Agreement, (i) each Seller hereby, severally
and not jointly, represents and warrants, as of the date of the Offering
Materials, that the Seller Information with respect to such Seller includes
all
information that is required to be provided under Items 1110(b), 1117 and
1119
of Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as in effect on the date the Seller Information was
provided by such Seller and (ii) the Servicer hereby
represents and warrants, as of the date of the Offering Materials, that the
Servicer Information includes all information that is required to be provided
under Items 1108(b), [1108(c), 1108(d), - insert as applicable] 1117 and
1119 of
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as in effect on the date the Servicer Information was
provided by the Servicer.
Promptly
after receipt by an indemnified party hereunder of notice of the commencement
of
any action, such indemnified party will, if a claim in respect thereof is
to be
made against the indemnifying party hereunder, notify the indemnifying party
of
the commencement thereof; provided,
however, that
the
omission so to notify the indemnifying party will not relieve it from any
liability that such indemnifying party may have to any indemnified party
under
this Agreement except to the extent that such indemnifying party has been
materially prejudiced by such failure; provided,
further,
that
the failure to so notify the indemnifying party shall not relieve it from
any
liability that such indemnifying party may have to any indemnified party
otherwise than under this Agreement. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that such indemnifying party may wish, to assume
(at
its own expense) the defense thereof, with counsel reasonably satisfactory
to
such indemnified party (which counsel may be counsel to the indemnifying
party),
and, after notice from the indemnifying party to such indemnified party
hereunder, such indemnifying party shall not be liable for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the
defense thereof unless (i) the indemnifying party shall have agreed in writing
to the continuing participation of such counsel or (ii) the named parties
to any
such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same
counsel would, in the opinion of such counsel, be inappropriate due to the
actual or potential differing interests between them. If the indemnifying
party
assumes the defense of any proceeding, it shall be entitled to settle such
proceeding with the consent of the indemnified party, which will not be
unreasonably withheld or delayed or, if such settlement provides for release
of
the indemnified party in connection with all matters relating to the proceeding
which have been asserted against the indemnified party in such proceeding
by the
other parties to such settlement, without the consent of the indemnified
party.
If
recovery is not available under the foregoing indemnification provisions
for any
reason other than as specified therein, each indemnified party shall be entitled
to contribution to liabilities and expenses, except to the extent that
contribution is not permitted under Section 11(f) of the Act. In determining
the
amount of such contribution, there shall be considered the parties’ relative
knowledge and access to information concerning the matter with respect to
which
the claim was asserted, the opportunity to correct and prevent any misstatement
or omission, the relative fault of and relative benefits received by the
parties, and any other equitable considerations appropriate under the
circumstances.
I-3
The
agreements, indemnities and representations of the parties thereto contained
herein or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof,
made by
or on behalf of any parties hereto or any of the controlling persons referred
to
herein, and will survive the sale of the Certificates.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS,
RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their successors and assignees. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. This Agreement may be
executed in counterparts, each of which when so executed and delivered shall
be
considered an original, and all such counterparts shall constitute one and
the
same instrument.
[SIGNATURES
COMMENCE ON FOLLOWING PAGE]
I-4
Executed
as of the day and year first above written.
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[NAME
OF SELLER(S)]
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Name:
Title:
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WASHINGTON
MUTUAL BANK,
as
Servicer
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Name:
Title:
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STRUCTURED
ASSET SECURITIES CORPORATION,
as
Depositor
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Name:
Title:
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XXXXXX
BROTHERS INC., as Underwriter
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Name:
Title:
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XXXXXX
BROTHERS HOLDINGS INC., as Sponsor
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Name:
Title:
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I-5
Exhibit
A
SELLER
INFORMATION
Exhibit
A-1
Exhibit
B
SERVICER
INFORMATION
Exhibit
B-1
EXHIBIT
E
Assignment
and Assumption Agreement
EXHIBIT
F
EXHIBIT
J
TRANSACTION
PARTIES
Depositor: Structured
Asset Securities Corporation
Trustee:
U.S.
Bank
National Association
Securities
Administrator: N/A
Master
Servicer: Aurora
Loan Services LLC
Credit
Risk Manager: N/A
PMI
Insurer(s): N/A
Interest
Rate Swap Counterparty: N/A
Interest
Rate Cap Counterparty: N/A
Servicer(s):
Aurora Loan Services LLC, IndyMac Bank, F.S.B. and Washington Mutual
Bank
Primary
Originator(s): IndyMac Bank, F.S.B., Washington Mutual Bank and Xxxxxx Brothers
Bank, FSB.
Custodian(s):
Deutsche Bank National Trust Company, LaSalle Bank National Association and
U.S.
Bank National Association
Sponsor
and Seller: Xxxxxx Brothers Holdings, Inc.
EXHIBIT
G
EXHIBIT
D
[Date]
FORM
OF
ANNUAL CERTIFICATION
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Re:
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The
Reconstituted Servicing Agreement dated as of March 1, 2007 (the
“Agreement”), by and between Xxxxxx Brothers Holdings Inc. and Washington
Mutual Bank (the “Servicer”), and acknowledged by Aurora Loan Services LLC
(the “Master Servicer”) and U.S. Bank National Association, as Trustee
(the “Trustee”).
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I,
[identify the certifying individual], the [title] of the Servicer, certify
to
the Trustee, the Master Servicer and Structured Asset Securities Corporation
(the “Depositor”), and their officers, with the knowledge and intent that they
will rely upon this certification, that:
(1) I
have
reviewed the servicer compliance statement of the Servicer provided in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
report on assessment of the Company’s compliance with the servicing criteria set
forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934,
as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing
Assessment”), the registered public accounting firm’s attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
and
Section 1122(b) of Regulation AB (the “Attestation
Report”), and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans by the Servicer
during 200[ ] that were delivered by the Servicer to any of the Depositor,
the
Master Servicer and the Trustee pursuant to the Agreement (collectively, the
“Company Servicing Information”);
(2) Based
on
my knowledge, the Company Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period
of
time covered by the Company Servicing Information;
(3) Based
on
my knowledge, all of the Company Servicing Information required to be provided
by the Company under the Agreement has been provided to the Depositor, the
Master Servicer and the Trustee;
(4) I
am
responsible for reviewing the activities performed by the Servicer as servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the
Compliance Statement, the Servicing Assessment or the Attestation Report, the
Servicer has fulfilled its obligations under the Agreement in all material
respects; and
(5) The
Compliance Statement required to be delivered by the Servicer pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Servicer and by any Subservicer or Subcontractor pursuant to
the
Agreement, have been provided to the Depositor, the Master Servicer and the
Trustee. Any material instances of noncompliance described in such reports
have
been disclosed to the Depositor, the Master Servicer and the Trustee. Any
material instance of noncompliance with the Servicing Criteria has been
disclosed in such reports.
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Name:
Title:
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