EXHIBIT 4
EXECUTION COPY
AMENDMENT NO. 1 AND JOINDER AGREEMENT
AMENDMENT NO. 1 AND JOINDER AGREEMENT, dated as of June 1, 2003
("Amendment No. 1 and Joinder"), by and among XXXXXX XXXXXXX ABS CAPITAL I INC.
(the "Depositor"), CHASE MANHATTAN MORTGAGE CORPORATION ("Chase"), THE PROVIDENT
BANK ("Provident" and, together with Chase, the "Servicers"), DEUTSCHE BANK
NATIONAL TRUST COMPANY (the "Trustee"), ACCREDITED HOME LENDERS, INC.
("Accredited") and NC CAPITAL CORPORATION ("New Century"), to the POOLING AND
SERVICING AGREEMENT, dated as of June 1, 2003 (the "Pooling and Servicing
Agreement"), among the Depositor, the Servicers and the Trustee (collectively,
the "Original Parties").
RECITALS
WHEREAS, the Original Parties have entered into the Pooling and
Servicing Agreement;
WHEREAS, the Pooling and Servicing Agreement, pursuant to Section
10.01 thereof, may be amended from time to time by the Original Parties without
the consent of any of the Certificateholders (a) to add as a party to the
Pooling and Servicing Agreement any Originator for the purpose of setting forth
in the Pooling and Servicing Agreement its obligations under the applicable
Assignment Agreement with respect to representations and warranties and remedies
for breach thereof and (b) in connection therewith to modify certain of the
Depositor's representations and warranties under Section 2.03(b) of the Pooling
and Servicing Agreement so that such representations and warranties no longer
relate to such Originator's Mortgage Loans;
WHEREAS, the Original Parties have agreed to amend the Pooling and
Servicing Agreement to permit Accredited and New Century to become additional
parties under the Pooling and Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Pooling and Servicing Agreement are used herein as therein defined.
2. Agreement. Each of Accredited and New Century hereby agrees to
each of the provisions of the Pooling and Servicing Agreement and agrees to be
bound by such provisions, with the same effect as if each of Accredited and New
Century were an original signatory thereunder.
The Original Parties hereby agree that each of the provisions of the
Pooling and Servicing Agreement shall also relate to Accredited and New Century,
and effective on the date hereof each of Accredited and New Century shall become
a party to the Pooling and Servicing Agreement with full rights and with the
same effect as if it were an original signatory thereunder.
3. Amendments.
a. The definition of "Accredited Purchase Agreement" in
Article I of the Pooling and Servicing Agreement is hereby deleted and replaced
in its entirety with the following:
"Accredited Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, attached as Exhibit O hereto,
dated as of March 1, 2003, by and between Accredited and the Purchaser, as
assigned by the Purchaser to the Depositor."
b. The definition of "New Century Purchase Agreement" in
Article I of the Pooling and Servicing Agreement is hereby deleted and replaced
in its entirety with the following:
"New Century Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, attached as Exhibit P hereto,
dated as of January 1, 2003, by and between New Century and the Purchaser,
as assigned by the Purchaser to the Depositor."
c. The definition of "Repurchase Price" in Article I of the
Pooling and Servicing Agreement is hereby deleted and replaced in its entirety
with the following:
"Repurchase Price: (i) With respect to any Mortgage Loan for which a
breach of a representation and warranty made by the Depositor or Provident
(with respect to the Aames Mortgage Loans) hereunder exists, an amount
equal to the sum of (a) the unpaid principal balance of such Mortgage Loan
as of the date of repurchase, (b) interest on such unpaid principal
balance of such Mortgage Loan at the Mortgage Rate from the last date
through which interest has been paid and distributed to the Trustee to the
date of repurchase, (c) all unreimbursed Servicing Advances and (d) all
costs and expenses incurred by the Trustee arising out of or based upon
such breach, including without limitation, costs and expenses relating to
the Trustee's enforcement of the repurchase obligation of the Depositor or
Provident (with respect to the Aames Mortgage Loans) hereunder or (ii)
with respect to any Mortgage Loan for which there has been a breach of a
representation and warranty made by (a) Aames under the Aames Assignment
Agreement, "Repurchase Price" as defined in the Aames Purchase Agreement,
(b) Accredited under this Agreement, "Repurchase Price" as defined in the
Accredited Purchase Agreement, (c) New Century under this Agreement,
"Repurchase Price" as defined in the New Century Purchase Agreement and
(d) Provident under the Provident Assignment Agreement, "Repurchase Price"
as defined in the Provident Purchase Agreement.
d. Article I of the Pooling and Servicing Agreement is hereby
amended by adding the following definition:
"Responsible Party: Accredited or New Century, as applicable."
e. The definition of "Substitute Mortgage Loan" in Article I
of the Pooling and Servicing Agreement is hereby deleted and replaced in its
entirety with the following:
"Substitute Mortgage Loan: A Mortgage Loan (i) substituted by
Provident or any Responsible Party for a Deleted Mortgage Loan pursuant to
the terms of the related Purchase Agreement and that satisfies the
criteria set forth in the definition of "Qualified Substitute Mortgage
Loan" in the applicable Purchase Agreement or (ii) substituted by the
Depositor for a Deleted Mortgage Loan, which, if substituted by the
Depositor, must, on the date of such substitution, as confirmed in a
Request for Release, substantially in the form of Exhibit J, (a) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and
not more than 10% less than, the Stated Principal Balance of the Deleted
Mortgage Loan; (b) be accruing interest at a rate no lower than and not
more than 1% per annum higher than, that of the Deleted Mortgage Loan; (c)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (d) have a remaining term to maturity no greater than (and not more
than one year less than that of) the Deleted Mortgage Loan; and (e) comply
with each representation and warranty set forth in Section 2.03."
f. Section 2.01(a) of the Pooling and Servicing Agreement is
hereby deleted and replaced in its entirety with the following:
"(a) The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys
to the Trustee for the benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and to the
Trust Fund, together with all rights of the Depositor under the Aames
Assignment Agreement and the Provident Assignment Agreement (pursuant to
which all of the right, title and interest in (i) the Aames Mortgage Loans
and the Provident Mortgage Loans, respectively, and (ii) the Aames
Purchase Agreement and the Provident Purchase Agreement, respectively,
were assigned by the Purchaser to the Depositor), and the Trustee, on
behalf of the Trust, hereby accepts the Trust Fund."
g. The second paragraph of Section 2.01(b) of the Pooling and
Servicing Agreement is hereby deleted and replaced in its entirety with the
following:
"The Depositor will use its reasonable efforts to assist the Trustee
and the Servicers in enforcing the obligations of Aames under the Aames
Assignment Agreement, Provident under the Provident Assignment Agreement and
each Responsible Party under this Agreement."
h. Section 2.03 of the Pooling and Servicing Agreement is
hereby deleted and replaced in its entirety with the following:
"Section 2.03 Representations and Warranties; Remedies for Breaches
of Representations and Warranties with Respect to the Mortgage Loans.
(a) Chase hereby makes the representations and warranties set forth
in Schedule II hereto to the Depositor and the Trustee, as of the dates
set forth in such schedule, and Provident hereby makes the representations
and warranties set forth in Schedules III and IV hereto to the Depositor
and the Trustee, as of the dates set forth in such schedules.
(b) The Depositor hereby makes the representations and warranties,
set forth in Schedule V hereto, to the Trustee.
(c) Accredited hereby makes the representations and warranties set
forth in Schedule VI hereto to the Depositor and the Trustee, as of the
dates set forth in such schedule, and New Century hereby makes the
representations and warranties set forth in Schedule VII hereto to the
Depositor, the Servicers and the Trustee, as of the dates set forth in
such schedule.
(d) It is understood and agreed by each Servicer that the
representations and warranties set forth in this Section 2.03 shall
survive the transfer of the Mortgage Loans by the Depositor to the
Trustee, and shall inure to the benefit of the Depositor and the Trustee
notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine
any Mortgage File.
(e) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by Aames under the Aames Assignment
Agreement, Provident under the Provident Assignment Agreement, or the
Depositor, Provident (with respect to the Aames Mortgage Loans) or any
Responsible Party, as applicable, under this Agreement, that materially
and adversely affects the value of any Mortgage Loan or the interests of
the Trustee or the Certificateholders therein, the party discovering such
breach shall give prompt written notice thereof to the other parties. Upon
receiving written notice of a breach of a representation and warranty or
written notice that a Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the
Trustee shall in turn notify Aames, Provident, the Depositor or the
applicable Responsible Party in writing to correct or cure, in accordance
with the Aames Assignment Agreement, the Provident Assignment Agreement or
this Agreement, as applicable, any such breach of a representation or
warranty made by Aames under the Aames Assignment Agreement, Provident
under the Provident Assignment Agreement or the Depositor or any
Responsible Party, as applicable, under this Agreement, within sixty (60)
days from the date of notice from the Trustee or the discovery by Aames,
Provident, the Depositor or such Responsible Party, as applicable, of the
breach, and if Aames, Provident, the Depositor or such Responsible Party
fails or is unable to correct or cure the defect or breach within such
period, the Trustee shall notify the Depositor of such failure to correct
or cure. Unless otherwise directed by the Depositor within five (5)
Business Days after notifying the Depositor of such failure by Aames,
Provident, the Depositor or such Responsible Party, as applicable, to
correct or cure, the Trustee shall notify Aames, Provident, the Depositor
or such Responsible Party, as applicable, to repurchase the Mortgage Loan
at the Repurchase Price or substitute a Substitute Mortgage Loan for such
Mortgage Loan, in each case, pursuant to the terms of the Aames Assignment
Agreement, the Provident Assignment Agreement or this Agreement, as
applicable. Notwithstanding the foregoing, in the event that the Trustee
receives notice of a breach (i) by Aames of the representations and
warranties set forth in clauses (zz)(i), (zz)(ii), (aaa), (bbb), (ccc) or
(ddd) of Section 9.02 of the Aames Purchase Agreement, (ii) by Accredited
of any of the representations and warranties set forth in clause (49)(ii),
(50), (51), (53) or (55) of Schedule VI, (iii) by Provident of the
representations and warranties set forth in clauses (zz), (aaa), (bbb),
(ccc) or (ddd) of Section 9.02 of the Provident Purchase Agreement, or
(iv) by New Century of any of the representations and warranties set forth
in clause (46), (47), (50), (53) or (56) of Schedule VII, the Trustee
shall notify Aames, Provident or such Responsible Party, as applicable, to
repurchase the Mortgage Loan at the Repurchase Price within sixty (60)
days of Aames's, Provident's or such Responsible Party's receipt of such
notice. If, within ten (10) Business Days of receipt of such notice by
Aames, Provident or such Responsible Party, Aames, Provident or such
Responsible Party fails to repurchase such Mortgage Loan, the Trustee
shall notify the Depositor of such failure. The Trustee shall pursue all
legal remedies available to the Trustee against Aames, Provident or such
Responsible Party under the Aames Assignment Agreement, the Provident
Assignment Agreement or this Agreement, as applicable, if the Trustee has
received written notice from the Depositor directing the Trustee to pursue
such remedies.
(f) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's review of the related
Custodial File, the Trustee shall notify Aames, Provident or the
applicable Responsible Party, as applicable, to correct or cure such
defect as required under the Aames Assignment Agreement, the Provident
Assignment Agreement or this Agreement, as applicable, and if Aames,
Provident or such Responsible Party, as applicable, fails or is unable to
correct or cure the defect within the period set forth in the Aames
Assignment Agreement, the Provident Assignment Agreement or this
Agreement, as applicable, the Trustee shall notify the Depositor of such
failure to correct or cure. Unless otherwise directed by the Depositor
within five (5) Business Days after notifying the Depositor of such
failure by Aames, Provident or such Responsible Party, as applicable, to
correct or cure, the Trustee shall notify Aames, Provident or such
Responsible Party, as applicable, to repurchase the Mortgage Loan at the
Repurchase Price or substitute a Substitute Mortgage Loan for such
Mortgage Loan, in each case, pursuant to the terms of the Aames Assignment
Agreement, the Provident Assignment Agreement or this Agreement, as
applicable. If, within ten (10) Business Days of receipt of such notice by
Aames, Provident or such Responsible Party, as applicable, Aames,
Provident or such Responsible Party, as applicable, fails to repurchase
such Mortgage Loan, the Trustee shall notify the Depositor of such
failure. The Trustee shall pursue all legal remedies available to the
Trustee against Aames, Provident or such Responsible Party, as applicable,
under the Aames Assignment Agreement, the Provident Assignment Agreement
or this Agreement, as applicable, if the Trustee has received written
notice from the Depositor directing the Trustee to pursue such remedies.
(g) Within 90 days of the earlier of either discovery by or notice
to Provident of any breach of a representation or warranty set forth on
Schedule IV hereto that materially and adversely affects the value of any
Mortgage Loan or the interest of the Trustee or the Certificateholders
therein, Provident shall use its best efforts to promptly cure such breach
in all material respects and, if such defect or breach cannot be remedied,
Provident shall, at the Depositor's option, purchase such Mortgage Loan at
the Repurchase Price or substitute a Substitute Mortgage Loan for such
Mortgage Loan.
(h) Within 90 days of the earlier of either discovery by or notice
to the Depositor of any breach of a representation or warranty set forth
on Schedule V hereto that materially and adversely affects the value of
any Mortgage Loan or the interest of the Trustee or the Certificateholders
therein, the Depositor shall use its best efforts to promptly cure such
breach in all material respects and, if such defect or breach cannot be
remedied, the Depositor shall purchase such Mortgage Loan at the
Repurchase Price or substitute a Substitute Mortgage Loan for such
Mortgage Loan.
(i) Within 90 days of the earlier of either discovery by or notice
to the applicable Responsible Party of any breach of a representation or
warranty set forth on either Schedule VI or Schedule VII, as applicable,
that materially and adversely affects the value of any Mortgage Loan or
the interest of the Trustee or the Certificateholders therein, the
applicable Responsible Party shall use its best efforts to promptly cure
such breach in all material respects and, if such defect or breach cannot
be remedied, the applicable Responsible Party shall, at the Depositor's
option, purchase such Mortgage Loan at the Repurchase Price or substitute
a Substitute Mortgage Loan for such Mortgage Loan.
(j) Any substitution of a Substitute Mortgage Loan by Provident or a
Responsible Party shall be made in accordance with the substitution
procedures set forth in the Provident Purchase Agreement, the Accredited
Purchase Agreement or the New Century Purchase Agreement, as applicable,
as if such substitution procedures were set forth herein. With respect to
any Substitute Mortgage Loan or Loans substituted by the Depositor,
Provident or a Responsible Party, the Depositor, Provident or such
Responsible Party, as applicable, shall deliver to the Trustee for the
benefit of the Certificateholders the Mortgage Note, the Mortgage, the
related assignment of the Mortgage, and such other documents and
agreements as are required by Section 2.01, with the Mortgage Note
endorsed and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Substitute Mortgage Loans in the Due Period of substitution shall not be
part of the Trust Fund and will be retained by the Depositor, Provident or
the applicable Responsible Party on the next succeeding Distribution Date.
For the Due Period of substitution, distributions to Certificateholders
will include the Scheduled Payment due on any Deleted Mortgage Loan for
such Due Period and thereafter the Depositor, Provident or the applicable
Responsible Party shall be entitled to retain all amounts received in
respect of such Deleted Mortgage Loan.
(k) The applicable Servicer, based upon information provided by the
Depositor, Provident or the applicable Responsible Party, shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the substitution of
the Substitute Mortgage Loan or Loans and such Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and, if the substitution is made by the
Depositor, the Depositor shall be deemed to have made with respect to such
Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties made pursuant to Section 2.03(b) with
respect to such Mortgage Loan. Upon any such substitution and the deposit
into the related Collection Account of the amount required to be deposited
therein in connection with such substitution as described in the following
paragraph, the Trustee shall release the Mortgage File held for the
benefit of the Certificateholders relating to such Deleted Mortgage Loan
to the Depositor, Provident or the applicable Responsible Party, as
applicable, and shall execute and deliver at the direction of the
Depositor, Provident or the applicable Responsible Party, as applicable,
such instruments of transfer or assignment prepared by the Depositor,
Provident or the applicable Responsible Party, as applicable, in each case
without recourse, as shall be necessary to vest title in the Depositor,
Provident or the applicable Responsible Party, as applicable, of the
Trustee's interest in any Deleted Mortgage Loan substituted for pursuant
to this Section 2.03.
(l) For any month in which the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
applicable Servicer will determine the amount (if any) by which the
aggregate unpaid principal balance of all such Substitute Mortgage Loans
as of the date of substitution is less than the aggregate Stated Principal
Balance of all such Deleted Mortgage Loans (after application of the
scheduled principal portion of the Scheduled Payments due in the Due
Period of substitution). The amount of such shortage or the amount of any
similar shortage with respect to a Substitute Mortgage Loan substituted by
Provident or a Responsible Party under the Provident Assignment Agreement
or this Agreement, as applicable (the "Substitution Adjustment Amount"),
plus, with respect to substitutions by the Depositor, an amount equal to
the aggregate of any unreimbursed Advances with respect to such Deleted
Mortgage Loans shall be deposited into the related Collection Account by
the Depositor on or before the Distribution Account Deposit Date for the
Distribution Date in the month succeeding the calendar month during which
the related Mortgage Loan became required to be purchased or replaced
hereunder.
Any Mortgage Loan repurchased pursuant to this Section 2.03 will be
removed from the Trust Fund. The applicable Servicer shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of any Mortgage Loan repurchased and such Servicer
shall deliver the amended Mortgage Loan Schedule to the Trustee.
In the event that Aames, pursuant to the Aames Assignment Agreement,
Provident, pursuant to the Provident Assignment Agreement, or the
Depositor or any Responsible Party, as applicable, pursuant to this
Agreement, shall have repurchased a Mortgage Loan, the Repurchase Price
therefor shall be deposited in the Collection Account of the related
Servicer pursuant to Section 3.10 on or before the Distribution Account
Deposit Date for the Distribution Date in the month following the month
during which Aames, Provident, the Depositor or such Responsible Party, as
applicable, became obligated to repurchase such Mortgage Loan and upon
such deposit of the Repurchase Price and receipt of a Request for Release
in the form of Exhibit J hereto, the Trustee shall release the related
Custodial File held for the benefit of the Certificateholders to such
Person as directed by the applicable Servicer, and the Trustee shall
execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without
recourse, as shall be necessary to transfer title (and, in the case of a
repurchase of an Aames Mortgage Loan or a Provident Mortgage Loan by the
Depositor, all rights of the Depositor under the Aames Assignment
Agreement or the Provident Assignment Agreement, as applicable,
transferred by the Depositor to the Trustee hereunder with respect to such
Aames Mortgage Loan or Provident Mortgage Loan, as applicable) from the
Trustee.
In addition to any repurchase or substitution obligation by any
Responsible Party under this Agreement, each Responsible Party shall
indemnify the Trust in accordance with the indemnification provisions
relating to breaches of representations and warranties and defective
Mortgage Loans set forth in the Accredited Purchase Agreement or the New
Century Purchase Agreement, as applicable, as if such indemnification
provisions were set forth herein.
It is understood and agreed that the obligation of Aames under the
Aames Purchase Agreement or the Aames Assignment Agreement, Provident
under the Provident Purchase Agreement or the Provident Assignment
Agreement, or of the Depositor or any Responsible Party, as applicable,
under this Agreement, to cure, repurchase or substitute any Mortgage Loan
as to which a breach has occurred and is continuing, together with any
related indemnification obligations set forth therein or herein, shall
constitute the sole remedies against such Persons respecting such breach
available to Certificateholders, the Depositor, or the Trustee on their
behalf.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the Trustee for the benefit of the
Certificateholders."
i. Section 2.05 of the Pooling and Servicing Agreement is
hereby deleted in its entirety and replaced with the following:
"Section 2.05 Delivery of Opinion of Counsel in Connection
with Substitutions.
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.03 shall be made more than 30 days
after the Closing Date unless the applicable Responsible Party, Provident
or the Depositor delivers to the Trustee an Opinion of Counsel, which
Opinion of Counsel shall not be at the expense of either the Trustee or
the Trust Fund, addressed to the Trustee, to the effect that such
substitution will not (i) result in the imposition of the tax on
"prohibited transactions" on either the Lower Tier REMIC or Upper Tier
REMIC or contributions after the Startup Date, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively, or (ii) cause either the
Lower Tier REMIC or Upper Tier REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding."
j. Section 3.11(a)(v) is hereby deleted and replaced in its
entirety with the following:
"(v) to pay to Aames, Provident, the Depositor or any
Responsible Party, as applicable, with respect to each Mortgage Loan that
has previously been repurchased or replaced pursuant to the Aames
Assignment Agreement, the Provident Assignment Agreement or this
Agreement, as applicable, all amounts received thereon subsequent to the
date of purchase or substitution, as further described herein."
k. Section 3.11(a)(ix) of the Pooling and Servicing Agreement
is hereby amended to change the reference to "Originator, the Depositor or
Provident" to "the Depositor, Aames, Provident or any Responsible Party".
l. Schedule V to the Pooling and Servicing Agreement is hereby
replaced in its entirety with the language set forth in Exhibit A attached
hereto.
m. A new Schedule VI to the Pooling and Servicing Agreement,
attached as Exhibit B hereto, is hereby added to the Pooling and Servicing
Agreement.
n. A new Schedule VII to the Pooling and Servicing Agreement,
attached as Exhibit C hereto, is hereby added to the Pooling and Servicing
Agreement.
o. A new Exhibit O to the Pooling and Servicing Agreement,
attached as Exhibit D hereto, is hereby added to the Pooling and Servicing
Agreement.
p. A new Exhibit P to the Pooling and Servicing Agreement,
attached as Exhibit E hereto, is hereby added to the Pooling and Servicing
Agreement.
4. Ratification of Agreement. Except as modified and expressly
amended by this Amendment No. 1 and Joinder, the Pooling and Servicing Agreement
is in all respects ratified and confirmed, and all the terms, provisions and
conditions thereof shall be and remain in full force and effect.
5. Counterparts. This Amendment No. 1 and Joinder may be executed by
one or more of the parties hereto on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.
6. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 1 and Joinder to be duly executed and delivered as of the day and year first
above written.
XXXXXX XXXXXXX ABS CAPITAL I INC.,
as Depositor
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Assistant Vice President
CHASE MANHATTAN MORTGAGE CORPORATION,
as a Servicer
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
THE PROVIDENT BANK,
as a Servicer
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Sr. Vice President
ACCREDITED HOME LENDERS, INC.,
as a Responsible Party
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: GC, AVP & Assistant Secretary
NC CAPITAL CORPORATION,
as a Responsible Party
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: President
Exhibit A
SCHEDULE V
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2003-HE1
Representations and Warranties of Xxxxxx Xxxxxxx ABS Capital I Inc.
as to the Mortgage Loans
Xxxxxx Xxxxxxx ABS Capital I Inc. (the "Depositor") hereby makes
with respect the Mortgage Loans the following representations and warranties.
Capitalized terms used but not otherwise defined in this Schedule V shall have
the meanings ascribed thereto in the Pooling and Servicing Agreement.
(1) With respect to each Accredited Mortgage Loan and each
representation and warranty made by Accredited as of the date
servicing with respect to such Mortgage Loan was transferred from
Accredited to Chase (each an "Accredited Transfer Date"), to the
Depositor's knowledge, no event has occurred in the period from the
applicable Accredited Transfer Date to the Closing Date which would
render such representations and warranties to be untrue in any
material respect.
(2) With respect to each Mortgage Loan, other than an Accredited
Mortgage Loan or a New Century Mortgage Loan, such Mortgage Loan is
not classified as (a) a "high cost" loan under the Home Ownership
and Equity Protection Act of 1994 or (b) a "high cost," "threshold,"
"covered," "predatory" or similar loan under any other applicable
state, federal or local law.
(3) With respect to each Mortgage Loan, other than an Accredited
Mortgage Loan or a New Century Mortgage Loan, any and all
requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity and
disclosure laws applicable to such Mortgage Loan have been complied
with and the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations.
Exhibit B
SCHEDULE VI
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2003-HE1
Representations and Warranties of Accredited
as to the Accredited Mortgage Loans
Accredited hereby makes the representations and warranties set forth
in this Schedule VI, as to the Accredited Mortgage Loans only, to the Depositor
and the Trustee, as of June 27, 2003 (the "Securitization Closing Date") (unless
otherwise expressly indicated), for each Accredited Mortgage Loan. Capitalized
terms used but not otherwise defined in this Schedule VI shall have the meanings
ascribed thereto in the Accredited Purchase Agreement.
(1) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule as prepared by the Purchaser (the "Information") is
complete, true and correct as of the date on which Accredited transferred
servicing of the Mortgage Loan to the Purchaser or its designee (the
"Accredited Transfer Date") or, if earlier, June 1, 2003 (the
"Securitization Cut-off Date"), and such Information was provided to the
Purchaser by Accredited;
(2) Payments Current. All payments required to be made up to the
Securitization Closing Date for the Mortgage Loan under the terms of the
Mortgage Note, other than payments not yet 30 days delinquent, have been
made and credited. No payment required under the Mortgage Loan is 30 days
or more delinquent nor has any payment under the Mortgage Loan been 30
days or more delinquent at any time since the origination of the Mortgage
Loan;
(3) No Outstanding Charges. As of the Cut-off Date, and to
Accredited's knowledge as of the Securitization Closing Date, there are no
defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due
and owing have been paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and
which has been assessed but is not yet due and payable. Accredited 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage Loan proceeds, whichever is earlier, to the
day which precedes by one month the Due Date of the first installment of
principal and interest;
(4) Original Terms Unmodified. As of the Accredited Transfer Date,
the terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, from the date of origination
except by a written instrument which has been recorded, if necessary to
protect the interests of the Purchaser, and which has been delivered to
the Custodian or to such other Person as the Purchaser shall designate in
writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has
been approved by the title insurer, if any, to the extent required by the
policy, and its terms are reflected on the Mortgage Loan Schedule, if
applicable. As of the Accredited Transfer Date, no Mortgagor has been
released, in whole or in part, except in connection with an assumption
agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the
Mortgage Loan File delivered to the Custodian or to such other Person as
the Purchaser shall designate in writing and the terms of which are
reflected in the Mortgage Loan Schedule;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the terms of the
Mortgage Note or the Mortgage, or the exercise of any right thereunder,
render either the Mortgage Note or the Mortgage unenforceable, in whole or
in part and no such right of rescission, set-off, counterclaim or defense
has been asserted with respect thereto, and no Mortgagor was a debtor in
any state or Federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was funded;
(6) Hazard Insurance. As of the Accredited Transfer Date, pursuant
to the terms of the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable insurer 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 Xxxxxx Mae and
Xxxxxxx Mac, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. As of the Accredited Transfer
Date, if required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to Xxxxxx Mae and
Xxxxxxx Mac, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming Accredited and its successors
and assigns as mortgagee, and all premiums thereon have been paid. The
Mortgage obligates the Mortgagor thereunder to maintain the hazard
insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense,
and to seek reimbursement therefor from the Mortgagor. Where required by
state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy
is not a "master" or "blanket" hazard insurance policy covering a
condominium, or any hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid
and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the purchase of the Mortgage Loan as contemplated
by this Agreement. Accredited has not engaged in, and has no knowledge of
the Mortgagor's having engaged in, any act or omission which would impair
the coverage of any such policy, the benefits of the endorsement provided
for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and
no such unlawful items have been received, retained or realized by
Accredited;
(7) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure laws applicable to the
Mortgage Loan have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any
such laws or regulations, and Accredited shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements.
Notwithstanding the foregoing, Accredited shall not be responsible for a
breach of a federal, state or local law, other than those governing the
origination of the Mortgage Loan, following the Accredited Transfer Date;
(8) No Satisfaction of Mortgage. As of the Accredited Transfer Date,
the Mortgage has not been satisfied, canceled, subordinated or rescinded,
in whole or in part, and the Mortgaged Property has not been released from
the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination
or rescission. Accredited has not waived the performance by the Mortgagor
of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has Accredited waived any
default resulting from any action or inaction by the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage
Loan Schedule, except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential
properties is a widely-accepted practice, the Mortgaged Property may be a
leasehold estate, and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual residential condominium unit in a condominium
project, or an individual unit in a planned unit development and that no
residence or dwelling is a mobile home, provided, however, that any
condominium unit or planned unit development shall not fall within any of
the "Ineligible Projects" of part VIII, Section 102 of the Xxxxxx Mae
Selling Guide and shall conform with the Underwriting Guidelines. In the
case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loans"), (i) such Manufactured Home Mortgage
Loan conforms with the applicable Xxxxxx Xxx or Xxxxxxx Mac requirements
regarding mortgage loans related to manufactured dwellings, (ii) the
related manufactured dwelling is permanently affixed to the land, (iii)
the related manufactured dwelling and the related land are subject to a
Mortgage properly filed in the appropriate public recording office and
naming Accredited as mortgagee, (iv) the applicable laws of the
jurisdiction in which the related Mortgaged Property is located will deem
the manufactured dwelling located on such Mortgaged Property to be a part
of the real property on which such dwelling is located, and (v) such
Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section
860G(a)(3) of the Internal Revenue Code of 1986, as amended and (y)
secured by manufactured housing treated as a single family residence under
Section 25(e)(10) of the Code. As of the date of origination, no portion
of the Mortgaged Property was used for commercial purposes, and to
Accredited's knowledge since the Closing Date, no portion of the Mortgaged
Property has been used for commercial purposes; provided, that Mortgaged
Properties which contain a home office shall not be considered as being
used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or
raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes;
(10) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property, including
all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject only to:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and Accredited has full right to sell
and assign the same to the Purchaser. As used in this Subsection 9.02,
"enforceable" shall be deemed to be subject to bankruptcy laws and general
principles of equity;
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance with
its terms. All parties to the Mortgage Note, the Mortgage and any other
such related agreement had legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related
parties. As of the Closing Date, and to Accredited's knowledge, as of the
Securitization Closing Date, no fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken
place on the part of any Person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan. Accredited has reviewed
all of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(12) Full Disbursement of Proceeds. Except to the extent the
Mortgage Loan is subject to completion escrows which have been disclosed
to and acknowledged by the Purchaser and which meet the requirements of
the Underwriting Guidelines, and as to which a completed Xxxxxx Xxx form
442 has been delivered to the Purchaser within sixty (60) days after the
Closing Date, the Mortgage Loan has been closed and the proceeds of the
Mortgage Loan have been fully disbursed and there is no requirement for
future advances thereunder, and any and all requirements as to completion
of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording
of the Mortgage were paid, and the Mortgagor is not entitled to any refund
of any amounts paid or due under the Mortgage Note or Mortgage;
(13) Ownership. As of the Closing Date, Accredited was the sole
owner of record and holder of the Mortgage Loan and the indebtedness
evidenced by each Mortgage Note and upon the sale of the Mortgage Loans to
the Purchaser, Accredited will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the Purchaser
or the Purchaser's designee, in trust only for the purpose of servicing
and supervising the servicing of each Mortgage Loan. As of the Closing
Date, upon payment of the Purchase Price, the Mortgage Loan was not
assigned or pledged, and Accredited had good, indefeasible and marketable
title thereto, and has full right to transfer and sell the Mortgage Loan
to the Purchaser free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and had full
right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan
pursuant to the Purchase Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest. As of the Closing Date, Accredited intended to
relinquish all rights to possess, control and monitor the Mortgage Loan.
After the Closing Date, Accredited will have no right to modify or alter
the terms of the sale of the Mortgage Loan and Accredited will have no
obligation or right to repurchase the Mortgage Loan or substitute another
Mortgage Loan, except as provided in this Agreement;
(14) Doing Business. As of the Closing Date, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held and
disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (2) either (i) organized under the laws
of such state, or (ii) qualified to do business in such state, or (iii) a
federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(15) LTV. No Mortgage Loan had an LTV at origination greater than
100%.
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such
title insurance policy is issued by a title insurer acceptable to Xxxxxx
Mae or Xxxxxxx Mac and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring Accredited, its successors and
assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan (or to the extent a Mortgage Note
provides for negative amortization, the maximum amount of negative
amortization in accordance with the Mortgage), subject only to the
exceptions contained in clauses (i) and (ii) of paragraph (j) of this
Subsection 9.02, and in the case of adjustable rate Mortgage Loans,
against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where
required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. Accredited, its
successor and assigns, are the sole insureds of such lender's title
insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the purchase of the Mortgage Loan as contemplated by this
Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including Accredited,
has done, by act or omission, anything which would impair the coverage of
such lender's title insurance policy, including without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value
of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have
been received, retained or realized by Accredited;
(17) No Defaults. Other than payments due but not yet 30 days or
more delinquent, as of the Closing Date and to Accredited's knowledge as
of the Securitization Closing Date, there is no default, breach, violation
or event which would permit acceleration existing under the Mortgage or
the Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and
neither Accredited nor any of its affiliates nor any of their respective
predecessors, have waived any default, breach, violation or event which
would permit acceleration;
(18) No Mechanics' Liens. Except as insured against by the related
title insurance, as of the Closing Date and to Accredited's knowledge as
of the Securitization Closing Date, 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 which are or may be liens prior
to, or equal or coordinate with, the lien of the related Mortgage;
(19) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. As of the Closing Date, and to
Accredited's knowledge as of the Securitization Closing Date, no
improvement located on or being part of the Mortgaged Property is in
violation of any applicable zoning law or regulation;
(20) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act,
a savings and loan association, a savings bank, a commercial bank, credit
union, insurance company or other similar institution which is supervised
and examined by a federal or state authority, or (b) the following
requirements have been met with respect to the Mortgage Loan: Accredited
meets the requirements set forth in clause (a) and (i) such Mortgage Loan
was underwritten in accordance with standards established by Accredited,
using application forms and related credit documents approved by
Accredited, (ii) Accredited approved each application and the related
credit documents before a commitment by the correspondent was issued, and
no such commitment was issued until Accredited agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were
prepared on forms approved by Accredited, and (iv) such Mortgage Loan was
actually funded by Accredited and was purchased by Accredited at closing
or soon thereafter. The documents, instruments and agreements submitted
for loan underwriting were not falsified and contain no untrue statement
of material fact or omit to state a material fact required to be stated
therein or necessary to make the information and statements therein not
misleading. Principal payments on the Mortgage Loan are required to
commence no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Interest Rate as well as the Lifetime
Rate Cap and the Periodic Cap, are as set forth on the Mortgage Loan
Schedule. Except with respect to a "balloon" Mortgage Loan, the Mortgage
Note is payable in equal monthly installments of principal and interest,
which installments of interest, with respect to Adjustable Rate Mortgage
Loans, are subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, with interest
calculated and payable in arrears, sufficient to amortize the Mortgage
Loan fully by the stated maturity date, over an original term of not more
than thirty years from commencement of amortization. Unless otherwise
specified on the Mortgage Loan Schedule, the Mortgage Loan is payable on
the first day of each month. There are no Convertible Mortgage Loans which
contain a provision allowing the Mortgagor to convert the Mortgage Note
from an adjustable interest rate Mortgage Note to a fixed interest rate
Mortgage Note;
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(22) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines. The Mortgage Note and Mortgage are on forms acceptable to
Xxxxxxx Mac or Xxxxxx Mae and Accredited has not made any representations
to a Mortgagor that are inconsistent with the mortgage instruments used;
(23) Occupancy of the Mortgaged Property. As of the Closing Date,
and to Accredited's knowledge as of the Securitization Closing Date, the
Mortgaged Property is capable of being lawfully occupied under applicable
law. As of the Closing Date, and to Accredited's knowledge as of the
Securitization Closing Date, 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 and fire
underwriting certificates, have been made or obtained from the appropriate
authorities;
(24) No Additional Collateral. As of the Accredited Transfer Date,
the Mortgage Note is not and has not been secured by any collateral except
the lien of the corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage referred to in clause
(j) above;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and, as of the Accredited
Transfer Date, and to Accredited's knowledge as of the Securitization
Closing Date, so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under
the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(26) Acceptable Investment. Accredited has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor, the Mortgage File or the Mortgagor's credit
standing, other than the subprime nature of such credit standing, that can
reasonably be expected to cause private institutional investors who invest
in mortgage loans similar to the Mortgage Loan, to regard the Mortgage
Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the Mortgage
Loan, or cause the Mortgage Loans to prepay during any period materially
faster or slower than the mortgage loans originated by Accredited
generally;
(27) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under the Custodial Agreement for each Mortgage Loan have
been delivered to the Custodian. Accredited is in possession of a
complete, true and accurate Mortgage File in compliance with Exhibit A to
the Purchase Agreement, except for such documents the originals of which
have been delivered to the Custodian;
(28) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in Accredited's
Underwriting Guidelines;
(29) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by Accredited are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(30) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision (subject to applicable law) 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,
and to the best of Accredited's knowledge, such provision is enforceable;
(31) [Reserved];
(32) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by Accredited, the Mortgagor, or anyone on
behalf of the Mortgagor, or paid by any source other than the Mortgagor
nor does it contain any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage
loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(33) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority by a
title insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence acceptable to
Xxxxxx Xxx and Xxxxxxx Mac. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan;
(34) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Closing Date, and to Accredited's knowledge as of the
Securitization Closing Date, there is no proceeding pending or threatened
for the total or partial condemnation of the Mortgaged Property. As of the
Closing Date, and to Accredited's knowledge as of the Securitization
Closing Date, the Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty
so as to affect adversely the value of the Mortgaged Property as security
for the Mortgage Loan or the use for which the premises were intended and
each Mortgaged Property is in good repair. As of the Closing Date, there
have not been any condemnation proceedings with respect to the Mortgaged
Property and Accredited has no knowledge of any such proceedings in the
future;
(35) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by
Accredited with respect to the Mortgage Loan have been in all respects in
compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect
to escrow deposits and Escrow Payments, all such payments are in the
possession of, or under the control of, Accredited through the Accredited
Transfer Date, and, as of such date, there exist no deficiencies in
connection therewith for which customary arrangements for repayment
thereof have not been made. As of the Accredited Transfer Date, all Escrow
Payments collected by Accredited have been collected in full compliance
with state and federal law and the provisions of the related Mortgage Note
and Mortgage. An escrow of funds is not prohibited by applicable law and,
as of the Accredited Transfer Date, all escrows that have been established
have been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. As of
the Accredited Transfer Date, no escrow deposits or Escrow Payments or
other charges or payments due Accredited have been capitalized by
Accredited under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and
federal law and the terms of the related Mortgage and Mortgage Note on the
related Interest Rate Adjustment Date. If, pursuant to the terms of the
Mortgage Note, another index was selected for determining the Mortgage
Interest Rate, the same index was used with respect to each Mortgage Note
which required a new index to be selected, and such selection did not
conflict with the terms of the related Mortgage Note. Accredited executed
and delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage
Interest Rate and the Monthly Payment adjustments. As of the Accredited
Transfer Date, any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited;
(36) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(37) Other Insurance Policies. As of the Accredited Transfer Date,
no action, inaction or event has occurred and no state of facts exists or
has existed that has resulted or will result in the exclusion from, denial
of, or defense to coverage under any applicable, special hazard insurance
policy, or bankruptcy bond, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by
Accredited or by any officer, director, or employee of Accredited or any
designee of Accredited or any corporation in which Accredited or any
officer, director, or employee had a financial interest at the time of
placement of such insurance;
(38) No Violation of Environmental Laws. As of the Closing Date, and
to Accredited's knowledge as of the Securitization Closing Date, there is
no pending action or proceeding directly involving the Mortgaged Property
in which compliance with any environmental law, rule or regulation is an
issue. As of the Closing Date, to Accredited's knowledge, based upon
customary and prudent residential mortgage industry underwriting
standards, and to Accredited's knowledge as of the Securitization Closing
Date, there is no violation of any environmental law, rule or regulation
with respect to the Mortgaged Property, and nothing further remains to be
done to satisfy in full all requirements of each such law, rule or
regulation constituting a prerequisite to use and enjoyment of said
property;
(39) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified Accredited, and Accredited has no knowledge of any relief
requested or allowed to the Mortgagor under the Soldiers' and Sailors'
Civil Relief Act of 1940 or any similar state statute;
(40) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage
Loan application by a Qualified Appraiser, duly appointed by Accredited,
who had no interest, direct or indirect in the Mortgaged Property or in
any loan made on the security thereof, and whose compensation was not
affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfied the requirements of Xxxxxx Mae or
Xxxxxxx Mac and Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 and the regulations promulgated thereunder,
all as in effect on the date the Mortgage Loan was originated;
(41) Disclosure Materials. The Mortgagor has executed one or more
statements to the effect that the Mortgagor has received all disclosure
materials required by, and Accredited has complied with, all applicable
law with respect to the making of the Mortgage Loans. Accredited shall
maintain such statement(s) in the Mortgage File;
(42) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(43) Value of Mortgaged Property. Accredited has no knowledge of any
circumstances existing that could reasonably be expected to adversely
affect the value or the marketability of any Mortgaged Property or
Mortgage Loan or to cause the Mortgage Loans to prepay during any period
materially faster or slower than similar mortgage loans held by Accredited
generally secured by properties in the same geographic area as the related
Mortgaged Property;
(44) No Defense to Insurance Coverage. As of the Accredited Transfer
Date, no action has been taken or failed to be taken, no event has
occurred and no state of facts exists or has existed on or prior to the
Closing Date (whether or not known to Accredited on or prior to such date)
which has resulted or will result in an exclusion from, denial of, or
defense to coverage under any primary mortgage insurance (including,
without limitation, any exclusions, denials or defenses which would limit
or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of
actions, representations, errors, omissions, negligence, or fraud of
Accredited, the related Mortgagor or any party involved in the application
for such coverage, including the appraisal, plans and specifications and
other exhibits or documents submitted therewith to the insurer under such
insurance policy, or for any other reason under such coverage, but not
including the failure of such insurer to pay by reason of such insurer's
breach of such insurance policy or such insurer's financial inability to
pay;
(45) Escrow Analysis. With respect to each Mortgage, Accredited has
within the last twelve months (unless such Mortgage was originated within
such twelve month period) analyzed the required Escrow Payments for each
Mortgage and adjusted the amount of such payments so that, assuming all
required payments are timely made, any deficiency will be eliminated on or
before the first anniversary of such analysis, or any overage will be
refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(46) Prior Servicing. As of the Accredited Transfer Date, each
Mortgage Loan had been serviced by Accredited in all material respects in
strict compliance with Accepted Servicing Practices;
(47) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by Accredited to the Purchaser, that Accredited has
full right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective
purchaser of such Mortgage. Accredited shall hold the Purchaser harmless
from any and all damages, losses, costs and expenses (including attorney's
fees) arising from disclosure of credit information in connection with the
Purchaser's secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto;
(48) Leaseholds. As of the Closing Date and to Accredited's
knowledge as of the Accredited Transfer Date, if the Mortgage Loan is
secured by a long-term residential lease, (1) the lessor under the lease
holds a fee simple interest in the land; (2) the terms of such lease
expressly permit the mortgaging of the leasehold estate, the collateral
assignment of the lease without the lessor's consent (or such consent has
been obtained) and the acquisition by the holder of the Mortgage of the
rights of the lessee upon foreclosure or assignment in lieu of foreclosure
or provide the holder of the Mortgage with substantially similar
protections; (3) the terms of such lease do not (a) allow the termination
thereof upon the lessee's default without the holder of the Mortgage being
entitled to receive written notice of, and opportunity to cure, such
default, (b) allow the termination of the lease in the event of damage or
destruction as long as the Mortgage is in existence, (c) prohibit the
holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than
pre-established increases set forth in the lease; (4) the original term of
such lease is not less than 15 years; (5) the term of such lease does not
terminate earlier than five years after the maturity date of the Mortgage
Note; and (6) the Mortgaged Property is located in a jurisdiction in which
the use of leasehold estates in transferring ownership in residential
properties is a widely accepted practice;
(49) Prepayment Penalty. (i) Each Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note, except as set
forth on the Mortgage Loan Schedule, and (ii) no such prepayment penalty
may be imposed for a term in excess of five (5) years from the date of
origination;
(50) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan;
(51) Single-Premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance a single-premium credit life insurance policy;
(52) Compliance with Anti-Money Laundering Laws. Accredited has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively,
the "Anti-Money Laundering Laws");
(53) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(54) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real
Estate Tax Service, and such contract is transferable; and
(55) Georgia Fair Lending Act. If originated on or after October 1,
2002, the Mortgage Loan is not secured by Mortgaged Property located in
the State of Georgia.
Exhibit C
SCHEDULE VII
Xxxxxx Xxxxxxx ABS Capital I Inc.
Mortgage Pass-Through Certificates
Series 2003-HE1
Representations and Warranties of New Century
as to the New Century Mortgage Loans
New Century hereby makes the representations and warranties set
forth in this Schedule VII as to the New Century Mortgage Loans only, to the
Depositor and the Trustee, as of the Closing Date (unless otherwise expressly
indicated), for each New Century Mortgage Loan. Capitalized terms used but not
otherwise defined in this Schedule VII shall have the meanings ascribed thereto
in the Pooling and Servicing Agreement.
(1) Mortgage Loans as Described. New Century has delivered to the
Purchaser, as of the Cut-off Date, the Data Tape Information and that Data
Tape Information and the information set forth on the Mortgage Loan
Schedule (other than item (15) thereof, as to which New Century makes no
representation or warranty) are true and correct, including, without
limitation, the terms of the Prepayment Charges, if any, as of the Closing
Date;
(2) Payments Current. All payments required to be made up to the
Cut-off Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and
credited. Except with respect to two (2) Mortgage Loans, no payment
required under the Mortgage Loan is 30 days or more delinquent nor has any
payment under the Mortgage Loan been 30 days or more delinquent at any
time since the origination of the Mortgage Loan. The first Scheduled
Payment was or shall be made with respect to the Mortgage Loan on its Due
Date or within the grace period, all in accordance with the terms of the
related Mortgage Note;
(3) No Outstanding Charges. Except with respect to two (2) Mortgage
Loans that are more than 30 days but less than 60 days delinquent, there
are no defaults in complying with the terms of the Mortgage, and all
taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or an escrow of funds has been
established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable.
Neither New Century nor any Affiliate has 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by one month the
Due Date of the first installment of principal and interest;
(4) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any
respect from the date of origination, except by a written instrument which
has been recorded, if necessary to protect the interests of the Purchaser,
and which has been delivered to the Trustee and the terms of which are
reflected in the Mortgage Loan Schedule, the Data Tape Information or
included in the Mortgage File. The substance of any such waiver,
alteration or modification has been approved by the title insurer, if any,
to the extent required by the policy, and its terms are reflected on the
Mortgage Loan Schedule. No Mortgagor has been released, in whole or in
part, except in connection with an assumption agreement, approved by the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Trustee and
the terms of which are reflected in the Mortgage Loan Schedule and the
Data Tape Information;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage unenforceable,
in whole or in part, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no
Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(6) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Xxxxxx Xxx
Guides or by Xxxxxxx Mac, as well as all additional requirements set forth
in Section 3.13 of the Pooling and Servicing Agreement. If required by the
National Flood Insurance Act of 1968, as amended, the Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect
which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac, as well as all
additional requirements set forth in Section 3.13 of the Pooling and
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming New Century and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates
the Mortgagor thereunder to maintain the hazard insurance policy at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such
insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. Where required by state law or regulation,
the Mortgagor has been given an opportunity to choose the carrier of the
required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Trustee upon the
consummation of the transactions contemplated by this Agreement. New
Century has not engaged in, and has no knowledge of the Mortgagor's having
engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value
of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have
been received, retained or realized by New Century;
(7) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure laws applicable to the
Mortgage Loan have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any
such laws or regulations, and New Century shall maintain in its
possession, available for the Purchaser's or the Trustee's inspection, and
shall deliver to the Purchaser upon demand, evidence of compliance with
all such requirements;
(8) No Satisfaction of Mortgage. Other than with respect to any
Mortgage Loan that may be subject to a Principal Prepayment in Full
occurring after the Cut-off Date but prior to the Closing Date, the
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in
whole or in part, and the Mortgaged Property has not been released from
the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination
or rescission. New Century has not waived the performance by the Mortgagor
of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has New Century waived any
default resulting from any action or inaction by the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a low rise condominium project, or an
individual unit in a planned unit development or a de minimis planned unit
development which is in each case four stories or less; provided, however,
that any condominium unit, planned unit development, mobile home (double
wide only) or manufactured dwelling shall conform with the applicable
Xxxxxx Mae and Xxxxxxx Mac requirements regarding such dwellings and that
no Mortgage Loan is secured by a single parcel of real property with a
cooperative housing corporation, a log home or, except as specified on the
Mortgage Loan Schedule, a mobile home erected thereon or by a mixed use
property, a property in excess of 10 acres or other unique property types.
As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall not
be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. With respect to
any Mortgage Loan secured by a Mortgaged Property improved by manufactured
housing, (i) such Mortgage Loan conforms with the applicable Xxxxxx Mae or
Xxxxxxx Mac requirements regarding mortgage loans related to manufactured
dwellings, (ii) the related manufactured housing unit is permanently
affixed to the land, (iii) the related manufactured housing unit and the
related land are subject to a Mortgage properly filed in the appropriate
public recording office and naming New Century as mortgagee, and (iv) the
applicable laws of the jurisdiction in which the related Mortgaged
Property is located will deem the manufactured dwelling located on such
Mortgaged Property to be a part of the real property on which such
dwelling is located;
(10) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected first lien on the Mortgaged Property, including
all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject only to:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property;
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance with
its terms. All parties to the Mortgage Note, the Mortgage and any other
such related agreement had legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related
parties. No fraud, error, omission, misrepresentation, negligence or
similar occurrence with respect to a Mortgage Loan has taken place on the
part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. New Century has reviewed all of the
documents constituting the Servicing File and has made such inquiries as
it deems necessary to make and confirm the accuracy of the representations
set forth herein;
(12) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(13) Ownership. Immediately prior to the transfer contemplated by
the New Century Purchase Agreement, New Century was the sole owner of
record and holder of the Mortgage Loan and the indebtedness evidenced by
each Mortgage Note and upon the sale of the Mortgage Loans to the
Purchaser, New Century retained the Mortgage Files or any part thereof
with respect thereto not delivered to the Purchaser or the Purchaser's
designee, in trust only for the purpose of servicing and supervising the
servicing of each Mortgage Loan. The Mortgage Loan was not assigned or
pledged, and New Century had good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and has full
right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan
pursuant to the New Century Purchase Agreement and following the sale of
each Mortgage Loan, the Purchaser will own such Mortgage Loan free and
clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest;
(14) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is located, and
(2) either (i) organized under the laws of such state, or (ii) qualified
to do business in such state, or (iii) a federal savings and loan
association, a savings bank or a national bank having a principal office
in such state, or (3) not doing business in such state;
(15) LTV. No Mortgage Loan has an LTV greater than 100%;
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac with respect
to Mortgage Loans and each such title insurance policy is issued by a
title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located,
insuring New Century, its successors and assigns, as to the first priority
lien (with respect to a First Lien Mortgage Loan) or second priority lien
(with respect to a Second Lien Mortgage Loan) of the Mortgage in the
original principal amount of the Mortgage Loan, subject only to the
exceptions contained in clauses (i), (ii), (iii) and (iv) of
representation 10 of this Schedule III, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Rate and Scheduled Payment. Where
required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. New Century, its
successor and assigns, are the sole insureds of such lender's title
insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy, and no prior
holder of the related Mortgage, including New Century, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy, including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind
has been or will be received, retained or realized by any attorney, firm
or other person or entity, and no such unlawful items have been received,
retained or realized by New Century;
(17) No Defaults. Except with respect to two (2) Mortgage Loans that
are more than 30 days but less than 60 days delinquent, other than
payments due but not yet 30 or more days delinquent, there is no default,
breach, violation or event which would permit acceleration existing under
the Mortgage or the Mortgage Note and no event which, with the passage of
time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event which would permit
acceleration, and neither New Century nor its Affiliates or any of their
respective predecessors have waived any default, breach, violation or
event which would permit acceleration;
(18) No Mechanics' Liens. As of the date of origination, 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 which are or
may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(19) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. As of the date of origination, there
are no improvements located on or being part of the Mortgaged Property in
violation of any applicable zoning law or regulation;
(20) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a Mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act,
a savings and loan association, a savings bank, a commercial bank, credit
union, insurance company or other similar institution which is supervised
and examined by a federal or state authority, or (b) the following
requirements have been met with respect to the Mortgage Loan: New Century
meets the requirements set forth in clause (a), and (i) such Mortgage Loan
was underwritten in accordance with standards established by New Century,
using application forms and related credit documents approved by New
Century, (ii) New Century approved each application and the related credit
documents before a commitment by the correspondent was issued, and no such
commitment was issued until New Century agreed to fund such Mortgage Loan,
(iii) the closing documents for such Mortgage Loan were prepared on forms
approved by New Century and (iv) such Mortgage Loan was actually funded by
New Century and was purchased by New Century at closing or soon
thereafter. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated
therein or necessary to make the information and statements therein not
misleading. Principal payments on the Mortgage Loan commenced no more than
sixty days after funds were disbursed in connection with the Mortgage
Loan. The Mortgage Rate is as set forth on Mortgage Loan Schedule hereto
(including in the case of Adjustable Rate Mortgage Loans, the interest
rate and payment limitations set forth on Mortgage Loan Schedule hereto).
All Mortgage Loans have Due Dates on the first day of each month except as
specified on the Mortgage Loan Schedule. Each Mortgage Note is payable in
equal monthly installments of principal and interest, which installments
of interest, with respect to Adjustable Rate Mortgage Loans, are subject
to change due to the adjustments to the Mortgage Rate on each Interest
Rate Adjustment Date, with interest calculated and payable in arrears and
is not calculated on a simple interest basis. The monthly principal
payments on each Mortgage Loan is sufficient to amortize the Mortgage Loan
fully by the stated maturity date, over an original term of not more than
thirty years from commencement of amortization. There is no negative
amortization allowed in the terms of any Mortgage Note. None of the
Mortgage Loans allows for negative amortization or the conversion of the
interest rate thereon from an adjustable rate to a fixed rate or from a
fixed rate to an adjustable rate. No Mortgage Loan is a Balloon Loan;
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(22) Index. With respect to Adjustable Rate Mortgage Loans, the
Index set forth in the Mortgage Note is LIBOR;
(23) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. 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 and fire underwriting certificates, have
been made or obtained from the appropriate authorities;
(24) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable
by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(26) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Purchaser;
(27) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form, other than the assignee's name and recording information
not yet returned from the recording office, and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by New Century are not subject to the
bulk transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(28) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision 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, and to the best of New
Century's knowledge, such provision is enforceable;
(29) No Buydown Provisions No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Scheduled Payments are paid or partially paid with funds deposited in any
separate account established by New Century, the Mortgagor, or anyone on
behalf of the Mortgagor, or paid by any source other than the Mortgagor
nor does it contain any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage
loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(30) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be assumed
if the party assuming such Mortgage Loan meets certain credit requirements
stated in the Mortgage Loan Documents;
(31) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority (with
respect to a First Lien Mortgage Loan) or second lien priority (with
respect to a Second Lien Mortgage Loan) by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest
or by other title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The
consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan;
(32) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended and each Mortgaged Property is in good repair.
There have not been any condemnation proceedings with respect to the
Mortgaged Property and New Century has no knowledge of any such
proceedings in the future;
(33) Collection Practices; Escrow Payments; Interest Rate
Adjustments. The origination, servicing and collection practices used by
New Century and its Affiliates with respect to the Mortgage Loan have been
in all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and
proper. With respect to escrow deposits and Escrow Payments, if any, all
such payments are in the possession of, or under the control of, New
Century and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage.
An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due New Century
have been capitalized under the Mortgage or the Mortgage Note. All
Mortgage Rate adjustments have been made in strict compliance with state
and federal law and the terms of the related Mortgage Note. If, pursuant
to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such
selection did not conflict with the terms of the related Mortgage Note.
New Century or an Affiliate executed and delivered any and all notices
required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Rate and the monthly payment
adjustments. Any interest required to be paid pursuant to state, federal
and local law has been properly paid and credited;
(34) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or
will result in the exclusion from, denial of, or defense to coverage under
any insurance policy or bankruptcy bond related to the Mortgage Loans,
irrespective of the cause of such failure of coverage. In connection with
the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by New Century or by any
officer, director, or employee of New Century or any designee of New
Century or any corporation in which New Century or any officer, director,
or employee had a financial interest at the time of placement of such
insurance;
(35) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with
respect to the Mortgaged Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(36) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified New Century, and New Century has no knowledge of any relief
requested or allowed to the Mortgagor under the Soldiers' and Sailors'
Civil Relief Act of 1940;
(37) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed by a qualified appraiser, acceptable to
New Century, 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 the
Mortgage Loan, and the appraisal and appraiser both satisfy the
requirements of Xxxxxx Mae or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(38) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials
required by, and the originator has complied with all applicable law with
respect to the making of the Mortgage Loans;
(39) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(40) Value of Mortgaged Property. New Century has no knowledge of
any circumstances existing that could reasonably be expected to adversely
affect the value or the marketability of any Mortgaged Property or
Mortgage Loan or to cause the Mortgage Loans to prepay during any period
materially faster or slower than similar mortgage loans held by New
Century generally secured by properties in the same geographic area as the
related Mortgaged Property;
(41) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or
has existed on or prior to the Closing Date (whether or not known to New
Century on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary
mortgage insurance (including, without limitation, any exclusions, denials
or defenses which would limit or reduce the availability of the timely
payment of the full amount of the loss otherwise due thereunder to the
insured) whether arising out of actions, representations, errors,
omissions, negligence, or fraud of New Century, the related Mortgagor or
any party involved in the application for such coverage, including the
appraisal, plans and specifications and other exhibits or documents
submitted therewith to the insurer under such insurance policy, or for any
other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy
or such insurer's financial inability to pay;
(42) Escrow Analysis. With respect to each Mortgage, New Century or
its Affiliate has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so
that, assuming all required payments are timely made, any deficiency will
be eliminated on or before the first anniversary of such analysis, or any
overage will be refunded to the Mortgagor, in accordance with RESPA and
any other applicable law;
(43) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(44) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by New Century to the Purchaser, New Century has
full right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser;
(45) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without
the lessor's consent and the acquisition by the holder of the Mortgage of
the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially
similar protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to
cure, such default, (b) allow the termination of the lease in the event of
damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent
other than pre-established increases set forth in the lease; (4) the
original term of such lease is not less than 15 years; (5) the term of
such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring
ownership in residential properties is a generally accepted practice;
(46) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans are classified as (a) "high cost" loans under the Home
Ownership and Equity Protection Act of 1994 or (b) "high cost,"
"threshold," "covered" or "predatory" loans under any other applicable
federal, state or local law (including without limitation any regulation
or ordinance) (or a similarly classified loan using different terminology
under a law imposing heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high interest rates,
points and/or fees);
(47) Prepayment Penalty. No Mortgage Loan has a prepayment penalty
period in excess of three years. Any prepayment penalty is in an amount
equal to the lesser of (a) the maximum amount permitted under applicable
state law, and (b) if the Mortgaged Property is secured by residential
real property located in a state other than Arizona, Maine, Massachusetts,
New York, South Carolina or Wisconsin, six months interest on the related
prepaid amount. No such prepayment penalty may be imposed for a term in
excess of (y) with respect to the Mortgage Loans originated prior to
October 1, 2002, five (5) years from the date of origination and (z) with
respect to Mortgage Loans originated on or after October 1, 2002, three
(3) years from the date of origination;
(48) [Reserved];
(49) Conformance with Agency and Underwriting Standards. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines. The Mortgage Note and Mortgage are on forms acceptable to
Xxxxxxx Mac or Xxxxxx Xxx and neither the New Century nor any Affiliate
has made any representations to a Mortgagor that are inconsistent with the
mortgage instruments used;
(50) Single-Premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance a single-premium credit life insurance policy;
(51) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be
expected to cause private institutional investors who invest in mortgage
loans similar to the Mortgage Loan to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan, or cause
the Mortgage Loans to prepay during any period materially faster or slower
than the mortgage loans originated by the New Century or any Affiliates
generally;
(52) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the
Originator's Underwriting Guidelines;
(53) No Mortgaged Property Located in Georgia. No Mortgage Loan is
secured by property located in the State of Georgia;
(54) Conversion to Fixed Interest Rate. With respect to each
Adjustable Rate Mortgage Loan, the Mortgage Loan is not a Convertible
Mortgage Loan;
(55) Right to Cure First Lien. With respect to each Second Lien
Mortgage Loan, the related first lien mortgage contains a provision which
provides for giving notice of default or breach to the mortgagee under
such Second Lien Mortgage Loan and allows such mortgagee to cure any
default under the related first lien mortgage;
(56) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code; and
(57) Compliance with Anti-Money Laundering Laws. New Century has
complied with all applicable anti-money laundering laws and regulations,
including, without limitation, the USA Patriot Act of 2001.
Exhibit D
EXHIBIT O
ACCREDITED PURCHASE AGREEMENT
EXECUTION COPY
================================================================================
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE
AND WARRANTIES AGREEMENT
-----------------
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
ACCREDITED HOME LENDERS, INC.,
Seller
------------------
Dated as of March 1, 2003
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files........................................
Subsection 6.02 Books and Records......................................
Subsection 6.03 Delivery of Mortgage Loan Documents....................
Subsection 6.04 Quality Control Procedures.............................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
Subsection 9.01 Representations and Warranties Regarding the
Seller.................................................
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans..............................
Subsection 9.03 Remedies for Breach of Representations and
Warranties.............................................
Subsection 9.04 [RESERVED].............................................
Subsection 9.05 Mortgage Loans with First Payment Defaults;
Repurchase.............................................
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay
in Full................................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims...........................................
Subsection 14.02 Merger or Consolidation of the Seller..................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY...........................................
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
SECTION 32. CONFIDENTIALITY..............................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT J FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES
AGREEMENT (the "Agreement"), dated as of March 1, 2003, by and between Xxxxxx
Xxxxxxx Mortgage Capital Inc., a New York corporation, having an office at 0000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser"), and Accredited
Home Lenders, Inc., a California corporation, having an office at 00000 Xxxxxx
xx Xxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2002 (the
"Original Purchase Agreement"), pursuant to which the Seller may sell, from time
to time, to the Purchaser, and the Purchaser may purchase, from time to time,
from the Seller, certain conventional adjustable and fixed rate B/C, residential
first mortgage loans (the "Mortgage Loans") on a servicing released basis as
described therein, and which shall be delivered in pools of whole loans (each, a
"Mortgage Loan Package") on various dates as provided therein (each, a "Closing
Date"); and
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend the Original Purchase Agreement to make certain modifications as set forth
herein;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below. Other capitalized terms used in
this Agreement and not defined herein shall have the respective meanings set
forth in the Interim Servicing Agreement.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Amended and Restated Mortgage Loan Purchase and
Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All late charges, assumption fees, escrow account
benefits, reinstatement fees and similar types of fees arising from or in
connection with any Mortgage, to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related Mortgage
Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in (a) the State of New
York, (b) the state in which the Seller's servicing operations are located or
(c) the State in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Interim Servicing Agreement (with respect to
each Mortgage Loan, as specified therein).
Custodial Agreement: The Custodial Agreement, dated as of the date
hereof, among the Seller, the Purchaser and the Custodian, which governs the
retention of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents.
Custodian: Deutsche Bank Trust Company Americas, or its successor in
interest or permitted assigns, or any successor to the Custodian under the
Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage
Loan, the period commencing on the day immediately succeeding the Due Date for
such Mortgage Loan occurring in the month preceding the month of the Remittance
Date and ending on the next Due Date.
Equity Take-out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Interim Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch, Inc., or its successor in interest.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high cost,"
"threshold," "covered", "predatory" or similar loan under any other applicable
state, federal or local law (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or additional
legal liability for residential mortgage loans having high interest rates,
points and/or fees).
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Interim Servicing Agreement: The Interim Servicing Agreement,
between Purchaser and Seller, as servicer, dated as of the date hereof, which
agreement provides for the Seller to service the Mortgage Loans for an interim
period.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the Lifetime Rate Cap set forth as an amount per annum on the related
Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, or was made within 12 months following such acquisition, the
purchase price of the Mortgaged Property.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual, (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS(R)
System, and (c) the Seller has designated or will designate the Custodian as the
Custodian on the MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note; except that with respect to
real property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 hereof with respect to any Mortgage Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgaged
Property is owner-occupied; (5) the number and type of residential units
constituting the Mortgaged Property; (6) 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; (7) the
Loan-to-Value Ratio at origination; (8) the Mortgage Interest Rate as of the
related Cut-off Date; (9) the date on which the Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (10) the stated maturity date; (11) the amount of the
Monthly Payment as of the related Cut-off Date; (12) the last payment date as of
which a payment was actually applied to the outstanding principal balance; (13)
the original principal amount of the Mortgage Loan; (14) the 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 and collected on or before the
Cut-off Date; (15) the Interest Rate Adjustment Date; (16) the Gross Margin;
(17) the Lifetime Rate Cap under the terms of the Mortgage Note; (18) with
respect to Adjustable Rate Mortgage Loans, a code indicating the type of Index;
(19) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate); (20) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (21) a code indicating the documentation style
(i.e., full, alternative or reduced); (22) the loan credit classification (as
described in the Underwriting Guidelines); (23) whether such Mortgage Loan
provides for a prepayment penalty as well as the terms of such prepayment
penalty, if any; (24) the Mortgage Interest Rate as of origination; (25) the
credit risk score (FICO score); (26) the date of origination; (27) the Mortgage
Interest Rate adjustment period; (28) the Mortgage Interest Rate adjustment
percentage; (29) the Mortgage Interest Rate floor; (30) the Mortgage Interest
Rate Cap as of the first Interest Rate Adjustment Date; (31) a code indicating
whether the Mortgage Loan is a High Cost Loan; (32) a code indicating whether
the Mortgage Loan is a balloon Mortgage Loan; (33) the Due Date for the first
Monthly Payment; (34) the original Monthly Payment due; (35) with respect to the
related Mortgagor, the debt-to-income ratio; (36) in connection with a
condominium unit, a code indicating whether the condominium project where such
unit is located is low-rise or high-rise; and (37) with respect to each MERS
Designated Mortgage Loan, the MERS Identification Number. With respect to the
Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; (4) the weighted average maturity of the Mortgage Loans; (5) the
applicable Cut-off Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan purchased pursuant to this Agreement which does not contain a
provision pursuant to which the Mortgagor may convert the Adjustable Rate
Mortgage Loan to a Fixed Rate Mortgage Loan.
Nonrecoverable Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Seller, will not or, in the case of a proposed advance, would not, be ultimately
recoverable from related Insurance Proceeds, Liquidation Proceeds or otherwise.
The determination by the Seller that it has made a Nonrecoverable Advance or
that any proposed advance of principal and interest, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officers' Certificate delivered
to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President
(including Assistant Vice Presidents) and by the Treasurer or the Secretary or
one of the Assistant Treasurers or Assistant Secretaries of the Seller, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price Percentage: As defined in the related Purchase Price
and Terms Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., or its successor in
interest or assigns or any successor to the Purchaser under this Agreement as
herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller, who
had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation was not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfied the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Mae and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by Best's with respect to
hazard and flood insurance (or such other rating as may be required by a Rating
Agency in connection with a Securitization Transfer in order to achieve the
desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, Index and lien
priority); and (v) comply with each representation and warranty (respecting
individual Mortgage Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a trust and servicing agreement, pooling and servicing agreement
and/or seller/servicer agreements and related custodial/trust agreement and
documents with respect to a Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Relief Act: The Solders' and Sailors' Civil Relief Act of 1940, as
amended, and any other comparable state statute.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly issued or
privately placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: Accredited Home Lenders, Inc., its successors in interest
and assigns.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
of such Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated
for any portion of a month during which the Mortgage Loan is serviced by the
Seller under the Interim Servicing Agreement. The obligation of the Purchaser to
pay the Servicing Fee is limited to, and the Servicing Fee is payable solely
from, the interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by this Agreement) of such Monthly
Payment collected by the Seller, or as otherwise provided under this Agreement.
Servicing Fee Rate: 50 basis points (0.50%) per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities. Such date
shall occur on the day indicated by the Purchaser to the Seller in accordance
with the Interim Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the Seller
(which take into account the exception policies set forth therein), a copy of
which is attached hereto as Exhibit G and a then-current copy of which shall be
attached as an exhibit to the related Assignment and Conveyance.
Well Capitalized: Well Capitalized shall mean, with respect to any
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller is obligated to deliver those Mortgage Loans funded by
the Seller pursuant to the original terms of the Seller's commitment to the
mortgagor. The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on a particular Closing Date to the Purchaser at least two
(2) Business Days prior to the related Closing Date. The Mortgage Loan Schedule
shall be the related Preliminary Mortgage Schedule with those Mortgage Loans
which are not being purchased by the Purchaser deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans, after application of
scheduled payments of principal due on or before the related Cut-off Date, to
the extent such payments were actually received. The initial principal amount of
the Mortgage Loans shall be the aggregate principal balance of the Mortgage
Loans, so computed as of the related Cut-off Date. If so provided in the related
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage pertaining to each
Mortgage Loan (except with respect to each MERS Designated Mortgage Loan), or
(b) make the related Mortgage File available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser. Such
examination may be made by the Purchaser or its designee at any reasonable time
before or after the related Closing Date. If the Purchaser makes such
examination prior to the related Closing Date and determines, in its sole
discretion, that any Mortgage Loans are unacceptable to the Purchaser for any
reason, such Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided herein;
provided, however, that the Purchaser may not demand repurchase, substitution or
other relief on the basis that a Mortgage Loan examined by the Purchaser or its
designee prior to purchase does not comply with the Underwriting Guidelines
provided by the Seller to the Purchaser prior to such examination and attached
as an exhibit hereto.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by it
pursuant to this Agreement to be appropriately identified in its computer system
and/or books and records, as appropriate, to clearly reflect the sale of the
related Mortgage Loan to the Purchaser. The Seller shall release from its
custody the contents of any Servicing File retained by it only in accordance
with this Agreement or the Interim Servicing Agreement, except when such release
is required in connection with a repurchase of any such Mortgage Loan pursuant
to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller. Notwithstanding the foregoing, each Mortgage and
related Mortgage Note shall be possessed solely by the Purchaser or the
appropriate designee of the Purchaser, as the case may be. All rights arising
out of the Mortgage Loans including, but not limited to, all funds received by
the Seller after the related Cut-off Date on or in connection with a Mortgage
Loan shall be vested in the Purchaser or one or more designees of the Purchaser;
provided, however, that all funds received on or in connection with a Mortgage
Loan shall be received and held by the Seller in trust for the benefit of the
Purchaser or the appropriate designee of the Purchaser, as the case may be, as
the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and applicable requirements of Xxxxxx Mae or Xxxxxxx Mac, including
but not limited to documentation as to the method used in determining the
applicability of the provisions of the National Flood Insurance Act of 1968, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and periodic inspection reports, as required by the Xxxxxx Mae Guides, if
applicable. To the extent that original documents are not required for purposes
of realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Seller may be in the form of microfilm or microfiche so long
as the Seller complies with the requirements of the Xxxxxx Xxx Guides, if
applicable.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
three (3) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
shall include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Seller. The program is to ensure
that the Mortgage Loans are originated and serviced in accordance with Accepted
Servicing Standards and the Underwriting Guidelines; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to, and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement (with respect
to each Mortgage Loan, for an interim period, as specified therein). The
Purchaser and Seller shall execute the Interim Servicing Agreement on the
Closing Date. Pursuant to the Interim Servicing Agreement, the Seller shall
begin servicing the Mortgage Loans on behalf of the Purchaser and shall be
entitled to a Servicing Fee with respect to each Mortgage Loan from the related
Closing Date until the termination of the Interim Servicing Agreement with
respect to such Mortgage Loan as set forth therein.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to the related Mortgage Loans. The
Transfer Date shall be the date determined in accordance with Section 6.03 of
the Interim Servicing Agreement (with respect to each Mortgage Loan, for an
interim period, as specified therein).
On or prior to the applicable Transfer Date, or as otherwise
specified below, the Seller shall, at its sole cost and expense, take such steps
as may be necessary or appropriate to effectuate and evidence the transfer of
the servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990;
provided, however, the content and format of the letter shall have the prior
approval of the Purchaser. The Seller shall provide the Purchaser with copies of
all such related notices within five (5) Business Days following the Transfer
Date;
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall transmit to the applicable taxing authorities and insurance companies
(including primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the servicing to the Purchaser, or its
designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Purchaser from and after the Transfer
Date. The Seller shall provide the Purchaser with copies of all such notices
within five (5) Business Days following the Transfer Date;
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in the
Seller's possession relating to each related Mortgage Loan including the
information enumerated in the Interim Servicing Agreement (with respect to each
such Mortgage Loan, for an interim period, as specified therein);
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of the
net Escrow Payments and suspense balances and all loss draft balances associated
with the related Mortgage Loans. The Seller shall provide the Purchaser with an
accounting statement of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller shall
wire transfer to the Purchaser the amount of any agency, trustee or prepaid
Mortgage Loan payments and all other similar amounts held by the Seller;
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the Transfer Date;
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller on each related Mortgage Loan
shall be properly applied by the Seller to the account of the particular
Mortgagor;
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail within one (1) Business
Day following the date of receipt. The Seller shall notify the Purchaser of the
particulars of the payment, which notification requirement shall be satisfied if
the Seller forwards with its payment sufficient information to permit
appropriate processing of the payment by the Purchaser. The Seller shall assume
full responsibility for the necessary and appropriate legal application of such
Monthly Payments received by the Seller after the Transfer Date with respect to
related Mortgage Loans then in foreclosure or bankruptcy; provided, for purposes
of this Agreement, necessary and appropriate legal application of such Monthly
Payments shall include, but not be limited to, endorsement of a Monthly Payment
to the Purchaser with the particulars of the payment such as the account number,
dollar amount, date received and any special Mortgagor application instructions
and the Seller shall comply with the foregoing requirements with respect to all
Monthly Payments received by the it after the Transfer Date;
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication
errors;
(ii) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and discovered after
the Transfer Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller
shall reimburse the Purchaser for the amount of such shortage within
thirty (30) days after receipt of written demand therefor from the
Purchaser;
(iv) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(v) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments;
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements as set forth in this
Agreement;
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required by
the Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate;
(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
or 1041 and K-1 which are required to be filed on or before the Transfer Date in
relation to the servicing and ownership of the related Mortgage Loans. The
Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph; and
(l) MERS. With respect to each MERS Designated Mortgage Loan, the
Seller shall, on or before the Transfer Date, designate, as directed by the
Purchaser, the Purchaser, or its designee, as the Servicer on the MERS(R)
System. In addition, the Seller shall promptly take all other actions reasonably
requested by Purchaser with respect to MERS Designated Mortgage Loans and the
MERS(R) System to effectuate and evidence the transfer of servicing in
accordance with the terms of this Agreement and the Interim Servicing Agreement.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan and the servicing of
such Mortgage Loan in accordance with the terms of this Agreement and the
Interim Servicing Agreement; the Seller has the full corporate power, authority
and legal right to hold, transfer and convey the Mortgage Loans and to execute
and deliver this Agreement and to perform its obligations hereunder and
thereunder; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Seller, regardless of
whether such enforcement is sought in a proceeding in equity or at law, but
subject to bankruptcy laws and general principles of equity; and all requisite
corporate or other action has been taken by the Seller to make this Agreement
and all agreements contemplated hereby valid and binding upon the Seller in
accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of the
Seller's charter, by-laws or other organizational documents or any legal
restriction or any agreement or instrument to which the Seller is now a party or
by which it is bound, or constitute a default or result in an acceleration under
any of the foregoing, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its property is subject, or
result in the creation or imposition of any lien, charge or encumbrance that
would have an adverse effect upon any of its properties pursuant to the terms of
any mortgage, contract, deed of trust or other instrument, or impair the ability
of the Purchaser to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Purchaser to realize the full
amount of any insurance benefits accruing pursuant to this Agreement;
(d) Ability to Service. Seller has the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans. The Seller is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if applicable, and
is in good standing to enforce, originate, sell mortgage loans to, and service
mortgage loans in each jurisdiction wherein the Mortgaged Properties are
located;
(e) Reasonable Servicing Fee. The Seller acknowledges and agrees
that the Servicing Fee, represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Seller, for
accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement and the Interim
Servicing Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) No Litigation Pending. Except as previously identified by the
Seller to the Purchaser in writing, there is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(h) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the Department of Veterans Affairs is
required for the execution, delivery and performance by the Seller of or
compliance by the Seller with this Agreement or the Mortgage Loans, the delivery
of a portion of the Mortgage Files to the Custodian or the sale of the Mortgage
Loans or the consummation of the transactions contemplated by this Agreement, or
if required, such approval has been or will be obtained prior to the date
required by federal, state or local law;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not intentionally
made in a manner so as to affect adversely the interests of the Purchaser;
(j) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(k) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(l) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. In addition, the Seller has delivered information as to its loan
gain and loss experience in respect of foreclosures and its loan delinquency
experience for the immediately preceding three-year period, in each case with
respect to mortgage loans owned by it and such mortgage loans serviced for
others during such period, and all such information so delivered shall be true
and correct in all material respects. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. The
Seller has completed any forms requested by the Purchaser in a timely manner and
in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, and upon the sale
of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage
Files with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan; and
(q) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was funded;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer 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
Xxxxxx Xxx and Xxxxxxx Mac, as well as all additional requirements set forth in
Section 2.10 of the Interim Servicing Agreement. If required by the National
Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to Xxxxxx
Mae and Xxxxxxx Mac, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the purchase of the Mortgage Loan as contemplated by this
Agreement. The Seller has not engaged in, and has no knowledge of the
Mortgagor's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws applicable to the Mortgage Loan
have been complied with, the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations, and the
Seller shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the related Mortgage
Loan Schedule, except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, the Mortgaged Property may be a leasehold estate,
and consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development and that no residence or dwelling is a mobile home;
provided, however, that any condominium unit or planned unit development shall
not fall within any of the "Ineligible Projects" of part XII, Section 102 of the
Xxxxxx Mae Selling Guide and shall conform with the Underwriting Guidelines. In
the case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loans"), (i) such Manufactured Home Mortgage Loan
conforms with the applicable Xxxxxx Xxx or Xxxxxxx Mac requirements regarding
mortgage loans related to manufactured dwellings, (ii) the related manufactured
dwelling is permanently affixed to the land, (iii) the related manufactured
dwelling and the related land are subject to a Mortgage properly filed in the
appropriate public recording office and naming Seller as mortgagee, (iv) the
applicable laws of the jurisdiction in which the related Mortgaged Property is
located will deem the manufactured dwelling located on such Mortgaged Property
to be a part of the real property on which such dwelling is located, and (v)
such Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section
860G(a)(3) of the Internal Revenue Code of 1986, as amended, and (y) secured by
manufactured housing treated as a single family residence under Section
25(e)(10) of the Code. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes;
(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and the Seller has full right to sell
and assign the same to the Purchaser. As used in this Subsection 9.02,
"enforceable" shall be deemed to be subject to bankruptcy laws and general
principles of equity;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan. The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. Except to the extent the Mortgage
Loan is subject to completion escrows which have been disclosed to and
acknowledged by the Purchaser and which meet the requirements of the
Underwriting Guidelines, and as to which a completed Xxxxxx Xxx form 442 has
been delivered to the Purchaser within sixty (60) days after the related Closing
Date, the Mortgage Loan has been closed and the proceeds of the Mortgage Loan
have been fully disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any on-site or
off-site improvement and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor
is not entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. Upon
payment of the Purchase Price, the Mortgage Loan is not assigned or pledged, and
the Seller has good, indefeasible and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan to the Purchaser free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan had an LTV at origination greater than
100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage Loan (or to the
extent a Mortgage Note provides for negative amortization, the maximum amount of
negative amortization in accordance with the Mortgage), subject only to the
exceptions contained in clauses (i) and (ii) of paragraph (j) of this Subsection
9.02, and in the case of Adjustable Rate Mortgage Loans, against any loss by
reason of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the purchase of the
Mortgage Loan as contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. Except as insured against by the related
title insurance, 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
the law could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. Principal payments on the Mortgage Loan
are required to commence no more than sixty days after funds were disbursed in
connection with the Mortgage Loan. The Mortgage Interest Rate as well as the
Lifetime Rate Cap and the Periodic Cap, are as set forth on the related Mortgage
Loan Schedule. Except with respect to a "balloon" Mortgage Loan, the Mortgage
Note is payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date, over
an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the related Mortgage Loan Schedule,
the Mortgage Loan is payable on the first day of each month. There are no
Convertible Mortgage Loans which contain a provision allowing the Mortgagor to
convert the Mortgage Note from an adjustable interest rate Mortgage Note to a
fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and the Seller has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is capable of being lawfully occupied under
applicable law. 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 and fire underwriting certificates, have been made or
obtained from the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor, the Mortgage File or the Mortgagor's credit standing,
other than the subprime nature of such credit standing, that can reasonably be
expected to cause private institutional investors who invest in mortgage loans
similar to the Mortgage Loan, to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan, or cause the Mortgage Loans to
prepay during any period materially faster or slower than the mortgage loans
originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Seller's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. Except with respect to MERS
Designated Mortgage Loans, the Assignment of Mortgage with respect to each
Mortgage Loan is in recordable form and is acceptable for recording under the
laws of the jurisdiction in which the Mortgaged Property is located. The
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller are not subject to the bulk transfer or similar statutory provisions
in effect in any applicable jurisdiction;
(dd) Due-on-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision (subject to applicable law) 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, and to the best of the
Seller's knowledge, such provision is enforceable;
(ee) [Reserved];
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller with respect to the Mortgage Loan have been in all respects in compliance
with Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. All
Escrow Payments have been collected in full compliance with state and federal
law and the provisions of the related Mortgage Note and Mortgage. An escrow of
funds is not prohibited by applicable law and, if requested by the Mortgagor,
has been established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
The Seller executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue. To the best of Seller's
knowledge, based upon customary and prudent residential mortgage industry
underwriting standards, there is no violation of any environmental law, rule or
regulation with respect to the Mortgage Property, and nothing further remains to
be done to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or any similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation was not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfied
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated;
(oo) Disclosure Materials. The Mortgagor has executed one or more
statements to the effect that the Mortgagor has received all disclosure
materials required by, and the Seller has complied with, all applicable law with
respect to the making of the Mortgage Loans. The Seller shall maintain such
statement(s) in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage and
adjusted the amount of such payments so that, assuming all required payments are
timely made, any deficiency will be eliminated on or before the first
anniversary of such analysis, or any overage will be refunded to the Mortgagor,
in accordance with RESPA and any other applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded by the terms of
the Mortgage Loan Documents from furnishing the same to any subsequent or
prospective purchaser of such Mortgage. The Seller shall hold the Purchaser
harmless from any and all damages, losses, costs and expenses (including
attorney's fees) arising from disclosure of credit information in connection
with the Purchaser's secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto;
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the collateral assignment of the lease without the lessor's
consent (or such consent has been obtained) and the acquisition by the holder of
the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu
of foreclosure or provide the holder of the Mortgage with substantially similar
protections; (3) the terms of such lease do not (a) allow the termination
thereof upon the lessee's default without the holder of the Mortgage being
entitled to receive written notice of, and opportunity to cure, such default,
(b) allow the termination of the lease in the event of damage or destruction as
long as the Mortgage is in existence, (c) prohibit the holder of the Mortgage
from being insured (or receiving proceeds of insurance) under the hazard
insurance policy or policies relating to the Mortgaged Property or (d) permit
any increase in rent other than pre-established increases set forth in the
lease; (4) the original term of such lease is not less than 15 years; (5) the
term of such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring ownership in
residential properties is a widely accepted practice;
(ww) Prepayment Penalty. (i) Each Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note, except as set forth
on the related Mortgage Loan Schedule, and (ii) no such prepayment penalty may
be imposed for a term in excess of five (5) years from the date of origination;
(xx) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan;
(yy) Single-premium credit life insurance policy. In connection with
the origination of the Mortgage Loan, no proceeds from such Mortgage Loan were
used to finance or acquire a single-premium credit life insurance policy;
(zz) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws");
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by First American Real Estate
Tax Service or another issuer reasonably acceptable to the Purchaser, and such
contract is transferable;
(ccc) Reports. On or prior to the related Closing Date, Seller has
provided the Custodian and the Purchaser with a MERS Report listing the
Purchaser as the Investor and the Custodian as the Custodian with respect to
each MERS Designated Mortgage Loan;
(ddd) MERS Designations. With respect to each MERS Designated
Mortgage Loan, Seller shall designate the Purchaser as the Investor, the
Custodian as the Custodian and no Person shall be listed as Interim Funder on
the MERS(R) System; and
(eee) Georgia Fair Lending Act. If originated on or after October 1,
2002, the Mortgage Loan is not secured by Mortgaged Property located in the
State of Georgia.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File in accordance with Section 5 hereof. Upon discovery by either the Seller or
the Purchaser of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price, plus
all costs and expenses incurred by the Purchaser or any servicer arising out of
or based upon such breach, including without limitation costs and expenses
incurred in the enforcement of the Seller's repurchase obligation hereunder.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in paragraph (ww)(ii), (xx), (yy), (aaa) or (eee) of
Subsection 9.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price plus all costs and expenses incurred by the Purchaser or any
servicer arising out of or based upon such breach, including without limitation
costs and expenses incurred in the enforcement of the Seller's repurchase
obligation hereunder. In the event that a breach shall involve any
representation or warranty set forth in Subsection 9.01, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans affected by such breach shall,
at the Purchaser's option, be repurchased by the Seller at the Repurchase Price
plus all costs and expenses incurred by the Purchaser or any servicer arising
out of or based upon such breach, including without limitation costs and
expenses incurred in the enforcement of the Seller's repurchase obligation
hereunder. However, if the breach shall involve a representation or warranty set
forth in Subsection 9.02 (except as provided in the second sentence of this
paragraph with respect to certain breaches for which no substitution is
permitted) and the Seller discovers or receives notice of any such breach within
120 days of the related Closing Date, the Seller shall, at the Purchaser's
option and provided that the Seller has a Qualified Substitute Mortgage Loan,
rather than repurchase the Mortgage Loan as provided above, remove such Mortgage
Loan (a "Deleted Mortgage Loan") and substitute in its place a Qualified
Substitute Mortgage Loan or Loans, provided that any such substitution shall be
effected not later than 120 days after the related Closing Date. If the Seller
has no Qualified Substitute Mortgage Loan, it shall repurchase the deficient
Mortgage Loan at the Repurchase Price plus all costs and expenses incurred by
the Purchaser or any servicer arising out of or based upon such breach,
including without limitation costs and expenses incurred in the enforcement of
the Seller's repurchase obligation hereunder. Any repurchase of a Mortgage Loan
or Loans pursuant to the foregoing provisions of this Subsection 9.03 shall be
accomplished by either (a) if the Interim Servicing Agreement has been entered
into and is in effect, deposit in the Custodial Account of the amount of the
Repurchase Price, including all costs and expenses described above, for
distribution to the Purchaser on the next scheduled Remittance Date, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future distribution or
(b) if the Interim Servicing Agreement has not been entered into or is no longer
in effect, by direct remittance of the Repurchase Price, including all costs and
expenses described above, to the Purchaser or its designee in accordance with
the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, and, in the case of substitution, identify a Qualified Substitute
Mortgage Loan and amend the related Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Seller shall be deemed to have made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such
substitution. The Seller shall effect such substitution by delivering to the
Custodian or to such other party as the Purchaser may designate in writing for
such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment less the Servicing Fee due, if any,
on such Qualified Substitute Mortgage Loan or Loans in the month following the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained by the
Seller..For the month of substitution, distributions to the Purchaser shall
include the Monthly Payment due on any Deleted Mortgage Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain all amounts
subsequently received by the Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all 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 Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and hold it harmless against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
breach of the Seller representations and warranties contained in this Agreement
or any Reconstitution Agreement. It is understood and agreed that the
obligations of the Seller set forth in this Subsection 9.03 to cure, substitute
for or repurchase a defective Mortgage Loan and to indemnify the Purchaser as
provided in this Subsection 9.03 constitute the sole remedies of the Purchaser
respecting a breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 [RESERVED].
Subsection 9.05 Mortgage Loans with First Payment Defaults;
Repurchase.
In the event that the first Monthly Payment with respect to any
Mortgage Loan is not paid before the first day of the second month following
such Due Date, the Seller shall repurchase within 30 days thereafter such
Mortgage Loan at a price equal to the Purchase Price Percentage multiplied by
the then outstanding principal balance of such Mortgage Loan, plus accrued and
unpaid interest thereon from the date to which interest was last paid through
the day prior to the repurchase date at the applicable Mortgage Interest Rate,
plus any outstanding advances owed to any servicer in connection with such
Mortgage Loan, plus all costs and expenses incurred by the Purchaser or any
servicer arising out of or based upon such delinquency, including without
limitation costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder. Notwithstanding the foregoing, the Purchaser
shall notify the Seller of any Mortgage Loan whose first Monthly Payment is not
made by the fifth (5th) Business Day of the first month following the related
first scheduled Due Date. Thereafter the Seller shall be authorized to
participate in the collection of such Monthly Payment. The Seller shall
indemnify and hold the Purchaser harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from or based upon the
Seller's participation in such collection.
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without prepayment penalties, in the
event that any such Mortgage Loan prepays in full during the first three months
following the related Closing Date, the Seller shall pay the Purchaser, within
ten (10) Business Days of such prepayment in full, an amount equal to the
product of the applicable Purchase Price Percentage less 100%, multiplied by the
outstanding principal balance of such Mortgage Loan as of the related Cut-off
Date. The provisions of this Subsection 9.06 shall supersede the corresponding
provisions set forth in the related Purchase Price and Terms Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette,
or transmit by modem, a listing on a loan-level basis of the
necessary information to compute the Purchase Price of the
Mortgage Loans delivered on such Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and under the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as
specified therein) shall be true and correct as of the related
Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default
under this Agreement or an Event of Default under the Interim
Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the Interim Servicing Agreement, dated as of the initial
Cut-off Date (to be executed and delivered only for the
initial Closing Date);
3. with respect to the initial Closing Date, the Custodial
Agreement, dated as of the initial Cut-off Date;
4. the related Mortgage Loan Schedule (one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. with respect to the initial Closing Date, a Custodial Account
Letter Agreement or a Custodial Account Certification, as
applicable, as required under the Interim Servicing Agreement;
7. with respect to the initial Closing Date, an Escrow Account
Letter Agreement or an Escrow Account Certification, as
applicable, as required under the Interim Servicing Agreement;
8. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
the Seller, including all attachments thereto; with respect to
subsequent Closing Dates, an Officer's Certificate upon
request of the Purchaser;
9. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
10. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
11. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto, or in the form of the Seller's
warehouse lender's standard bailee letter, subject to the
Purchaser's reasonable approval, executed by any person, as
requested by the Purchaser, if any of the Mortgage Loans have
at any time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
12. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
13. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit G;
14. Assignment and Conveyance Agreement in the form of Exhibit H
hereto;
15. Exhibit B to the related Assignment and Conveyance Agreement;
and
16. a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for
each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after each Closing Date, on one or more dates (each, a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each, a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the parties or an Assignment and
Recognition Agreement substantially in the form attached hereto as Exhibit I
(collectively, the agreements referred to herein are designated the
"Reconstitution Agreements"), together with an opinion of counsel with respect
to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; and (3) to restate the
representations and warranties set forth in this Agreement and the Interim
Servicing Agreement as of the settlement or closing date in connection with such
Reconstitution (each, a "Reconstitution Date") that occurs on or prior to the
date which is six (6) months following the related Closing Date, such
restatement to be in the form of Exhibit B to Exhibit I hereto, or make the
representations and warranties set forth in the related selling/servicing guide
of the master servicer or issuer, as the case may be, in connection with such
Reconstitution. The Seller shall use its reasonable best efforts to provide to
such master servicer or issuer, as the case may be, and any other participants
in such Reconstitution: (i) any and all information and appropriate verification
of information which may be reasonably available to the Seller or its
affiliates, whether through letters of its auditors and counsel or otherwise, as
the Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller as are
reasonably believed necessary by the Purchaser or any such other participant and
as are customarily provided in connection with Securitization Transfers
involving mortgage loans similar to the Mortgage Loans; and (iii) to execute,
deliver and satisfy all conditions set forth in any indemnity agreement required
by the Purchaser or any such participant, including, without limitation, an
Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit J. The Seller shall indemnify the Purchaser, each Affiliate
designated by the Purchaser and each Person who controls the Purchaser or such
Affiliate and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of the
Seller regarding the Seller, the Seller's servicing practices or performance,
the Mortgage Loans or the Underwriting Guidelines set forth in any offering
document prepared in connection with any Reconstitution. For purposes of the
previous sentence, "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement. Moreover, the Seller agrees to cooperate with
all reasonable requests made by the Purchaser to effect such Reconstitution
Agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related Mortgage
Loan Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Interim Servicing Agreement and with respect thereto this
Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any other
costs, fees and expenses that the Purchaser may sustain in any way related to
the failure of the Seller to perform its duties and to service the Mortgage
Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage Loans,
assume (with the prior written consent of 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 judgment or decree which may be entered
against it or the Purchaser in respect of such claim. The Purchaser promptly
shall reimburse the Seller for all amounts advanced by it pursuant to the
preceding sentence, except when the claim is in any way related to the Seller's
indemnification pursuant to Section 9, or is in any way related to the failure
of the Seller to service and administer the Mortgage Loans in strict compliance
with the terms of this Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios. The Purchaser shall
use reasonable best efforts to cause any prospective purchaser to enter into a
confidentiality agreement in connection with such financial information.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Accredited Home Lenders, Inc.
00000 Xxxxxx xx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Capital Markets
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have the
right to review the Mortgage Loans and the related Mortgage Loan Files to
determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser. This
Agreement may be assigned, pledged or hypothecated by the Purchaser without the
consent of the Seller. In the event the Purchaser assigns this Agreement, and
the assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed and the Purchaser shall
be relieved from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and (f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their 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 at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the related Closing Date and the Seller shall take no action to undermine
these rights and benefits. Notwithstanding the foregoing, it is understood and
agreed that promotions undertaken by the Seller or any affiliate of the Seller
which are directed to the general public at large, including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission to Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL
HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
SECTION 32. Confidentiality.
The Seller hereby acknowledges the Purchaser's need to share
non-public information ("Information") with the Purchaser's employees,
Affiliates, attorneys or accountants (the "Representatives"), as well as Persons
performing due diligence investigations in connection with securities or
merger/acquisition transactions, taxing authorities or other governmental
agencies or regulatory bodies or in order to comply with any applicable federal
or state laws (collectively with the Representatives, the "Agents"). The
Purchaser hereby agrees to use best efforts to avoid causing the Seller to
violate applicable securities laws governing publicly traded companies. The
Purchaser and the Seller shall use mutual best efforts to determine which
Information will remain confidential.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
(Purchaser)
By:____________________________________
Name:__________________________________
Title:_________________________________
ACCREDITED HOME LENDERS, INC.
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Amended and Restated Mortgage Loan Purchase and
Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]." If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage shall be delivered in
blank. If the Mortgage Loan was acquired by the Seller in a merger, the
Assignment of Mortgage must be made by "[Seller], successor by merger to [name
of predecessor]." If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"[Seller], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller to the Last
Endorsee (or MERS, with respect to each MERS Designated Mortgage Loan) with
evidence of recording thereon;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder, preliminary report or commitment for title issued by the
title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
Notwithstanding the foregoing, in connection with any item described
above in clauses (c), (d) or (f), if the Seller cannot deliver or cause to be
delivered the original of any such item with evidence of recording thereon on or
prior to the related Closing Date because of a delay caused by the public
recording office where such item has been delivered for recordation or because
such item has been lost or because such public recording office retains the
original recorded item (each such item, a "Delayed Document"), the Seller shall
deliver or cause to be delivered to the Custodian, (i) in the case of a delay
caused by the public recording office, a photocopy of such Delayed Document,
together with an Officer's Certificate of the Seller (or certified by the title
company, escrow agent, or closing attorney) to the effect that such copy is a
true and correct copy of the Delayed Document that has been dispatched to the
appropriate public recording office for recordation (and the original recorded
Delayed Document or a copy of such Delayed Document certified by such public
recording office to be a true and complete copy of the original recorded Delayed
Document will be promptly delivered to the Custodian upon receipt thereof by the
Seller); or (ii) in the case of a Delayed Document where a public recording
office retains the original recorded Delayed Document or in the case where a
Delayed Document is lost after recordation in a public recording office, a copy
of such Delayed Document certified by such public recording office to be a true
and complete copy of the original recorded Delayed Document.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
Exhibit B
EXHIBIT B
[RESERVED]
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a corporation organized under the
laws of the state of ____________] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver agreements such as the
Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of _______ __, 200_, by and between Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Purchaser") and the Company (the "Purchase Agreement"),
the Interim Servicing Agreement, dated as of _______ __, 200_, by and
between the Company and the Purchaser (the "Servicing Agreement"), and the
Custodial Agreement dated as of _____ __, 200_ by and among the Company,
the Purchaser and Deutsche Bank Trust Company Americas (the "Custodial
Agreement") and to endorse the Mortgage Notes and execute the Assignments
of Mortgages by original [or facsimile] signature, and such resolutions
are in effect on the date hereof and have been in effect without
amendment, waiver, rescission or modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Servicing Agreement, the Custodial
Agreement, the sale of the mortgage loans or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement conflicts or will conflict with or
results or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject
or by which it is bound.
7. Except as previously identified by the Company to the Purchaser
in writing, to the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity of
the Purchase Agreement, the Servicing Agreement and the Custodial
Agreement, or the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would be
likely to impair materially the ability of the Company to perform under
the terms of the Purchase Agreement, the Servicing Agreement and the
Custodial Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Servicing Agreement, (c) the Custodial Agreement and
(d) any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:_______________________ By:______________________________
Name:____________________________
[Seal] Title: [Executive/Assistant Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Executive/Assistant Vice] President of the Company and
that the signature appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Amended and Restated Mortgage Loan Purchase and Warranties
Agreement by and between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the "Purchaser"), dated as of _________ __, 200_ (the "Purchase Agreement"),
which sale is in the form of whole loans, delivered pursuant to a Custodial
Agreement dated as of _____ __, 200_ among the Purchaser, the Company and
Deutsche Bank Trust Company Americas (the "Custodial Agreement"), and serviced
pursuant to an Interim Servicing Agreement, dated as of ______ __, 200_ by and
between the Seller and the Purchaser (the "Servicing Agreement" and,
collectively with the Purchase Agreement and the Custodial Agreement, the
"Agreements"). Capitalized terms not otherwise defined herein have the meanings
set forth in the Purchase Agreement and the Servicing Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Servicing Agreement;
3. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as [we] [I] have
deemed necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement and in the Servicing Agreement, as applicable. [We] [I]
have assumed the authenticity of all documents submitted to [us] [me] as
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is [type of entity] duly organized, validly
existing and in good standing under the laws of the [state of
incorporation] and is qualified to transact business in, and
is in good standing under, the laws of [the state of
incorporation].
2. The Company has the power to engage in the transactions
contemplated by the Agreements to which it is a party and all
requisite power, authority and legal right to execute and
deliver such Agreements and to perform and observe the terms
and conditions of such Agreements.
3. Each of the Agreements to which it is a party has been duly
authorized, executed and delivered by the Company, and is a
legal, valid and binding agreement enforceable in accordance
with its respective terms against the Company, subject to
bankruptcy laws and other similar laws of general application
affecting rights of creditors and subject to the application
of the rules of equity, including those respecting the
availability of specific performance, none of which will
materially interfere with the realization of the benefits
provided thereunder or with the Purchaser's ownership of the
Mortgage Loans.
4. The Company has been duly authorized to allow certain of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements to which it is a party
5. The Company has been duly authorized to allow certain of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the Company with the Agreements to which it is a
party and the sale of the Mortgage Loans by the Company or the
consummation of the transactions contemplated by the
Agreements to which each is a party or (ii) any required
consent, approval, authorization or order has been obtained by
the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements to which
it is a party conflicts or will conflict with or results or
will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms
of any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations,
writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject
or by which it is bound.
8. Except as previously identified by the Company to the
Purchaser in writing, there is no action, suit, proceeding or
investigation pending or, to the best of [our] [my] knowledge,
threatened against the Company which, in [our] [my] judgment,
either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in
any material impairment of the right or ability of the Company
to carry on its business substantially as now conducted or in
any material liability on the part of the Company or which
would draw into question the validity of the Agreements to
which it is a party or the Mortgage Loans or of any action
taken or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform under the
terms of the Agreements to which it is a party.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
10. The endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to
the Purchaser, or its designee, are sufficient to permit the
Purchaser to avail itself of all protection available under
applicable law against the claims of any present or future
creditors of the Company, and are sufficient to prevent any
other sale, transfer, assignment, pledge or hypothecation of
the Mortgages and the Mortgage Notes by the Company from being
enforceable.
I am admitted to the bar of the State of California, and I express
no opinion as to the laws of any other jurisdiction except as to matters that
are governed by federal law. I make no undertaking to supplement or update this
opinion if, after the date hereof, facts or circumstances come to my attention
or changes in the law occur which could affect such opinion. This opinion is
given to you for your sole benefit, and no other person or entity is entitled to
rely hereon except that the purchaser or purchasers to which you initially and
directly resell the Mortgage Loans may rely on this opinion as if it were
addressed to them as of its date.
Very truly yours,
________________________________
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to Xxxxxx Xxxxxxx Mortgage
Capital Inc. under an Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of ______ __, 200_, certain mortgage loans originated by the
Association. The Company warrants that the mortgage loans to be sold to Xxxxxx
Xxxxxxx Mortgage Capital Inc. are in addition to and beyond any collateral
required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc.
Very truly yours,
_______________________________
By:____________________________
Name:__________________________
Title:_________________________
Date:__________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
_________________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
Upon receipt of the sum of $_____________ in immediately available
funds, the financial institution named below hereby relinquishes any and all
right, title and interest it may have in all Mortgage Loans to be purchased by
Xxxxxx Xxxxxxx Mortgage Capital Inc. from the Company named below pursuant to
that certain Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of ______ __, 200_, and certifies that all notes, mortgages,
assignments and other documents in its possession relating to such Mortgage
Loans have been delivered and released to the Company named below or its
designees, as of the date and time of the sale of such Mortgage Loans to Xxxxxx
Xxxxxxx Mortgage Capital Inc.
Name and Address of Financial Institution
________________________________
(Name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage
Capital Inc. that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
_______________________________
By:____________________________
Title:_________________________
Date:__________________________
Exhibit G
EXHIBIT G
UNDERWRITING GUIDELINES
Exhibit H
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of __________, ____, ___________________ ("Seller"),
as (i) the Seller under that certain Purchase Price and Terms Agreement, dated
as of ___________, _____ (the "PPTA"), (ii) the Seller under that certain
Amended and Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of ________, ____ (the "Purchase Agreement"), and (iii) the Seller/Interim
Servicer under that certain Interim Servicing Agreement, dated as of
___________, ____ (the "Interim Servicing Agreement" and, together with the PPTA
and the Purchase Agreement, the "Agreements"), does hereby sell, transfer,
assign, set over and convey to Xxxxxx Xxxxxxx Mortgage Capital Inc.
("Purchaser") as the Purchaser under the Agreements, without recourse, but
subject to the terms of the Agreements, all right, title and interest of, in and
to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Exhibit A (the "Mortgage Loans"), together with the Mortgage Files and all
rights and obligations arising under the documents contained therein. Each
Mortgage Loan subject to the Agreements was underwritten in accordance with, and
conforms to, the Underwriting Guidelines attached hereto as Exhibit C. Pursuant
to Section 6 of the Purchase Agreement, the Seller has delivered to the
Custodian the documents for each Mortgage Loan to be purchased as set forth in
the Custodial Agreement. The contents of each Servicing File required to be
retained by __________________________ ("Interim Servicer") to service the
Mortgage Loans pursuant to the Interim Servicing Agreement and thus not
delivered to the Purchaser are and shall be held in trust by the Seller in its
capacity as Interim Servicer for the benefit of the Purchaser as the owner
thereof. The Interim Servicer's possession of any portion of the Servicing File
is at the will of the Purchaser for the sole purpose of facilitating servicing
of the related Mortgage Loan pursuant to the Interim Servicing Agreement, and
such retention and possession by the Interim Servicer shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, the Servicing
Rights and the contents of the Mortgage File and Servicing File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Seller or the Interim Servicer shall immediately vest in the Purchaser and shall
be retained and maintained, in trust, by the Seller at the will of the Purchaser
in such custodial capacity only.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
Exhibit H
[SELLER]
By:____________________________________
Name:__________________________________
Title:_________________________________
Accepted and Agreed:
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
By:_____________________________
Name:________________________
Title:_______________________
Exhibit H
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
The Mortgage Loans
Exhibit H
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on
the related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than
$_________; (2) an origination date earlier than _ months prior to the related
Cut-off Date; (3) a CLTV of greater than _____%; (4) a FICO Score of less than
___; or (5) a debt-to-income ratio of more than __%. Each First Lien Loan has a
Mortgage Interest Rate of at least ___% per annum and an outstanding principal
balance less than $_________. Each Second Lien Loan has a Mortgage Interest Rate
of at least ______% per annum and an outstanding principal balance less than
$________. Each Adjustable Rate Mortgage Loan has an Index of [_______].
Exhibit H
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXHIBIT I
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and
assigns to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Amended and
Restated Mortgage Loan Purchase and Warranties Agreement (the "Purchase
Agreement"), dated as of [DATE], between the Assignor, as purchaser (the
"Purchaser"), and the Company, as seller, solely insofar as the Purchase
Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under and
any obligations of the Assignor with respect to any mortgage loans subject to
the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 2003 (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors in
interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after the
date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6 of
the Purchase Agreement, and shall be entitled to enforce all of the obligations
of the Company thereunder insofar as they relate to the Mortgage Loans, and (iv)
all references to the Purchaser or the Custodian under the Purchase Agreement
insofar as they relate to the Mortgage Loans shall be deemed to refer to the
Trust (including the Trustee and the Servicer acting on the Trust's behalf).
Neither the Company nor the Assignor shall amend or agree to amend, modify,
waiver, or otherwise alter any of the terms or provisions of the Purchase
Agreement which amendment, modification, waiver or other alteration would in any
way affect the Mortgage Loans or the Company's performance under the Purchase
Agreement with respect to the Mortgage Loans without the prior written consent
of the Trustee.
Representations and Warranties of the Company
3. The Company warrants and represents to the Assignor, the
Assignee and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) The Company has full power and authority to execute, deliver and
perform its obligations under this Agreement and has full power and
authority to perform its obligations under the Purchase Agreement. The
execution by the Company of this Agreement is in the ordinary course of the
Company's business and will not conflict with, or result in a breach of,
any of the terms, conditions or provisions of the Company's charter or
bylaws or any legal restriction, or any material agreement or instrument to
which the Company is now a party or by which it is bound, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
the Company or its property is subject. The execution, delivery and
performance by the Company of this Agreement have been duly authorized by
all necessary corporate action on part of the Company. This Agreement has
been duly executed and delivered by the Company, and, upon the due
authorization, execution and delivery by the Assignor and the Assignee,
will constitute the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms except as
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and by general principles of equity regardless
of whether enforceability is considered in a proceeding in equity or at
law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be
obtained or made by the Company in connection with the execution, delivery
or performance by the Company of this Agreement, or if required, such
approval has been obtained prior to the date hereof; and
(d) Except as previously identified by the Company to the Assignor in
writing, there is no action, suit, proceeding or investigation pending or
threatened against the Company, before any court, administrative agency or
other tribunal, which would draw into question the validity of this
Agreement or the Purchase Agreement, or which, either in any one instance
or in the aggregate, would result in any material adverse change in the
ability of the Company to perform its obligations under this Agreement or
the Purchase Agreement, and the Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth on Exhibit B
hereto are true and correct as of the date hereof as if such representations and
warranties were made on the date hereof unless otherwise specifically stated in
such representations and warranties.
Remedies for Breach of Representations and Warranties
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Subsection 9.03 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
7. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend the
terms of the Purchase Agreement.
10. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
11. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
12. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
[SELLER]
By: __________________________________
Name:__________________________________
Its: __________________________________
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
By: __________________________________
Name:__________________________________
Its: __________________________________
[__________________________]
By: __________________________________
Name:__________________________________
Its: __________________________________
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations and Warranties as to the Mortgage Loans
(insert reps from Exhibit B to PPTA here)
Exhibit J
EXHIBIT J
FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
WHEREAS, [________________] (the "Depositor") is acting as depositor
and registrant with respect to the Prospectus, dated [________________], and the
Prospectus Supplement to the Prospectus, [________________] (the "Prospectus
Supplement"), relating to [________________] Certificates (the "Certificates")
to be issued pursuant to a Pooling and Servicing Agreement, dated as of
[________________] (the "P&S"), among the Depositor, as depositor,
[________________], as servicer (the "Servicer"), and [________________], as
trustee (the "Trustee");
WHEREAS, Xxxxxx Xxxxxxx Mortgage Capital Inc. ("Xxxxxx Xxxxxxx")
purchased from [SELLER] ("Seller") certain of the Mortgage Loans underlying the
Certificates (the "Mortgage Loans") from Seller pursuant to an Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of [DATE]
(the "Purchase Agreement"), by and between Xxxxxx Xxxxxxx and Seller; and
WHEREAS, pursuant to Section 13 of the Purchase Agreement, Seller
has agreed to indemnify Xxxxxx Xxxxxxx and its affiliates and their respective
present and former directors, officers, employees and agents;
NOW THEREFORE, in consideration of the agreements contained herein,
and other valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Seller and Xxxxxx Xxxxxxx agree as follows:
1. Indemnification and Contribution.
(a) Seller agrees to indemnify and hold harmless Xxxxxx Xxxxxxx and
its affiliates and their respective present and former directors, officers,
employees and agents and each person, if any, who controls Xxxxxx Xxxxxxx or
such affiliate within the meaning of either Section 15 of the Securities Act of
1933, as amended (the "1933 Act"), or Section 20 of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based in whole or in part upon any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus Supplement or in the
Comp Materials or any omission or alleged omission to state in the Prospectus
Supplement or in the Comp Materials a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any such untrue
statement or omission or alleged untrue statement or alleged omission made in
any amendment of or supplement to the Prospectus Supplement or the Comp
Materials and agrees to reimburse Xxxxxx Xxxxxxx or such affiliate and each such
officer, director, employee, agent and controlling person promptly upon demand
for any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that Seller shall be liable in any such case only to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with the Seller Information.
The foregoing indemnity agreement is in addition to any liability which Seller
may otherwise have to Xxxxxx Xxxxxxx, its affiliates or any such director,
officer, employee, agent or controlling person of Xxxxxx Xxxxxxx or its
affiliates.
As used herein:
"Seller Information" means any information relating to Seller, the
Mortgage Loans and/or the underwriting guidelines relating to the Mortgage Loans
set forth in the Prospectus Supplement or the Comp Materials.
The terms "Collateral Term Sheet" and "Structural Term Sheet" shall
have the respective meanings assigned to them in the February 13, 1995 letter
(the "PSA Letter") of Cleary, Gottlieb, Xxxxx & Xxxxxxxx on behalf of the Public
Securities Association (which letter, and the SEC staff's response thereto, were
publicly available February 17, 1995). The term "Collateral Term Sheet" as used
herein includes any subsequent Collateral Term Sheet that reflects a substantive
change in the information presented. The term "Computational Materials" has the
meaning assigned to it in the May 17, 1994 letter (the "Xxxxxx letter" and,
together with the PSA Letter, the "No-Action Letters") of Xxxxx & Xxxx on behalf
of Xxxxxx, Peabody & Co., Inc. (which letter, and the SEC staff's response
thereto, were publicly available May 20, 1994). The term "Comp Materials" as
used herein means, collectively, Collateral Term Sheets, Structural Term Sheet
and Computational Materials relating to the Certificates or the transaction
contemplated by the Prospectus Supplement.
(b) Promptly after receipt by any indemnified party under this
Section 1 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 1, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 1 except to the extent it has
been materially prejudiced by such failure; and provided, further, however, that
the failure to notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 1.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, except as provided in
the following paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section 1 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
necessary or appropriate for such indemnified party to employ separate counsel;
or (iii) the indemnifying party has failed to assume the defense of such action
and employ counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in writing that
it elects to employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties.
Each indemnified party, as a condition of the indemnity agreements
contained in this Section 1, shall cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement.
(c) If the indemnification provided for in this Section 1 is
unavailable to an indemnified party, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities, in such proportion as is appropriate to reflect the relative fault
of the indemnifying party and the indemnified party, respectively, in connection
with the statements or omissions that result in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the indemnified party and indemnifying party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission and any other equitable considerations.
(d) The indemnity and contribution agreements contained in this
Section 1 and the representations and warranties set forth in Section 2 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by Xxxxxx Xxxxxxx, its directors,
officers, employees or agents or any person controlling Xxxxxx Xxxxxxx, and
(iii) acceptance of and payment for any of the Offered Certificates.
2. Representations and Warranties. Seller represents and warrants
that:
(i) Seller is validly existing and in good standing under the laws
of its jurisdiction of formation or incorporation, as applicable, and has
full power and authority to own its assets and to transact the business in
which it is currently engaged. Seller is duly qualified to do business and
is in good standing in each jurisdiction in which the character of the
business transacted by it or any properties owned or leased by it requires
such qualification and in which the failure so to qualify would have a
material adverse effect on the business, properties, assets or condition
(financial or otherwise) of Seller;
(ii) Seller is not required to obtain the consent of any other
person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity
or enforceability of this Agreement;
(iii) the execution, delivery and performance of this Agreement by
Seller will not violate any provision of any existing law or regulation or
any order decree of any court applicable to Seller or any provision of the
charter or bylaws of Seller, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which Seller is a
party or by which it may be bound;
(iv) except as previously identified by Seller to Xxxxxx Xxxxxxx in
writing, (a) no proceeding of or before any court, tribunal or
governmental body is currently pending or, (b) to the knowledge of Seller,
threatened against Seller or any of its properties or with respect to this
Agreement or the Offered Certificates, in either case, which would have a
material adverse effect on the business, properties, assets or condition
(financial or otherwise) of Seller;
(v) Seller has full power and authority to make, execute, deliver
and perform this Agreement and all of the transactions contemplated
hereunder, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of each of Seller 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, by the availability of equitable remedies,
and by limitations of public policy under applicable securities law as to
rights of indemnity and contribution thereunder; and
(vi) this Agreement has been duly executed and delivered by Seller.
3. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to Seller, will be mailed, delivered or
telegraphed and confirmed [______________________]; or, if sent to Xxxxxx
Xxxxxxx, will be mailed, delivered or telegraphed and confirmed to Xxxxxx
Xxxxxxx, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
[____________].
4. Miscellaneous. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
the conflict of laws provisions thereof. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their successors and
assigns and the controlling persons referred to herein, and no other person
shall have any right or obligation hereunder. 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. Capitalized terms used but not defined herein shall have the
meanings provided in the P&S.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized, this
__th day of [_____________].
XXXXXX XXXXXXX MORTGAGE
CAPITAL INC.
By:____________________________________
Name:
Title:
ACCREDITED HOME LENDERS, INC.
By:____________________________________
Name:
Title:
Exhibit E
EXHIBIT P
NEW CENTURY PURCHASE AGREEMENT
EXECUTION COPY
==============================================================================
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
---------------
XXXXXX XXXXXXX XXXX XXXXXX MORTGAGE CAPITAL INC.,
Purchaser
NC CAPITAL CORPORATION,
Seller
----------------
Dated as of January 1, 2003
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. [RESERVED]...................................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES
AGREEMENT (the "Agreement"), dated as of January 1, 2003, by and between Xxxxxx
Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc., a New York corporation, having an
office at 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser")
and NC Capital Corporation, a California corporation, having an office at 00000
Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2002 (the
"Original Purchase Agreement"), pursuant to which the Seller may sell, from time
to time, to the Purchaser, and the Purchaser may purchase, from time to time,
from the Seller, certain conventional adjustable and fixed rate. B/C,
residential first mortgage loans (the "Mortgage Loans") on a servicing retained
basis as described therein, and which shall be delivered in pools of whole loans
(each, a "Mortgage Loan Package") on various dates as provided therein (each, a
"Closing Date");
WHEREAS, at the present time, the Purchaser and the Seller desire to
amend the Original Purchase Agreement to (a) provide for the purchase of
Mortgage Loans secured by second liens on the related Mortgaged Property and (b)
make certain additional modifications as set forth herein:
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Xxx Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Amended and Restated Mortgage Loan Purchase and
Warranties Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All late charges, assumption fees, escrow account
benefits, reinstatement fees, and similar types of fees arising from or in
connection with any Mortgage, to the extent not otherwise payable to the
Mortgagor under applicable law or pursuant to the terms of the related Mortgage
Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New York
or the State in which the Originator's servicing operations are located or (iii)
the state in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Servicing Agreement (with respect to each
Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively be
referred to as the "Custodial Agreement".
Custodian: Deutsche Bank Trust Company Americas, or the Custodian's
successor in interest or permitted assigns, or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The date specified in the Servicing Agreement
(with respect to each Mortgage Loan, for an interim period, as specified
therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date and any Mortgage
Loan, the period commencing on the day immediately succeeding the Due Date for
such Mortgage Loan occurring in the month preceding the month of the Remittance
Date and ending on the next Due Date.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
Escrow Account: The separate account created and maintained pursuant
to Section 2.06 of the Servicing Agreement (with respect to each Mortgage Loan,
as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high cost,"
"threshold," "covered," "predatory" or similar loan under any other applicable
state, federal or local law (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or additional
legal liability for residential mortgage loans having high interest rates,
points and/or fees).
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the Lifetime Rate Cap set forth as an amount per annum on the related
Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the
Originator generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
and (b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on an unsubordinated estate in
fee simple in real property securing the Mortgage Note; except that with respect
to real property located in jurisdictions in which the use of leasehold estates
for residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first lien, and with respect to a Second Lien Loan, a second lien, in each case,
upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, 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, excluding replaced or repurchased mortgage
loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state and zip code; (4) a code indicating whether the Mortgaged
Property is owner-occupied; (5) the number and type of residential units
constituting the Mortgaged Property; (6) 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; (7) with respect
to each First Lien Loan, the Loan-to-Value Ratio at origination, and with
respect to each Second Lien Loan, the CLTV at origination; (8) the Mortgage
Interest Rate as of the related Cut-off Date; (9) the date on which the Monthly
Payment was due on the Mortgage Loan and, if such date is not consistent with
the Due Date currently in effect, such Due Date; (10) the stated maturity date;
(11) the amount of the Monthly Payment as of the related Cut-off Date; (12) the
last payment date on which a payment was actually applied to the outstanding
principal balance; (13) the original principal amount of the Mortgage Loan; (14)
the 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 and collected
on or before the related Cut-off Date; (15) with respect to each Adjustable Rate
Mortgage Loan, the Interest Rate Adjustment Date; (16) with respect to each
Adjustable Rate Mortgage Loan, the Gross Margin; (17) with respect to each
Adjustable Rate Mortgage Loan , the Lifetime Rate Cap under the terms of the
Mortgage Note; (18) with respect to each Adjustable Rate Mortgage Loan, a code
indicating the type of Index; (19) the type of Mortgage Loan (i.e., Fixed Rate
or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (20) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (21) a code indicating the documentation style
(i.e., full, alternative or reduced); (22) the loan credit classification (as
described in the Underwriting Guidelines); (23) whether such Mortgage Loan
provides for a prepayment penalty and, if applicable, the prepayment penalty
period; (24) the Mortgage Interest Rate as of origination; (25) the credit risk
score (FICO score); (26) the date of origination; (27) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage Interest Rate adjustment period;
(28) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest
Rate adjustment percentage; (29) with respect to each Adjustable Rate Mortgage
Loan, the Mortgage Interest Rate floor; (30) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate Cap as of the first Interest Rate
Adjustment Date; (31) a code indicating whether the Mortgage Loan is a High Cost
Loan; (32) a code indicating whether the Mortgage Loan is a Balloon Mortgage
Loan; (33) the Due Date for the first Monthly Payment; (34) the original Monthly
Payment due; and (35) with respect to the related Mortgagor, the debt-to-income
ratio. With respect to the Mortgage Loans in the aggregate, the Mortgage Loan
Schedule shall set forth the following information, as of the related Cut-off
Date: (1) the number of Mortgage Loans; (2) the current aggregate outstanding
principal balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; (4) the weighted average maturity of the
Mortgage Loans; (5) the applicable Cut-off Date; and (6) the applicable Closing
Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) securing repayment of the debt
evidenced by the related Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan purchased pursuant to this Agreement which does not contain a
provision pursuant to which the Mortgagor may convert the Adjustable Rate
Mortgage Loan to a Fixed Rate Mortgage Loan.
Nonrecoverable Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Originator, will not or, in the case of a proposed advance, would not, be
ultimately recoverable from related Insurance Proceeds, Liquidation Proceeds or
otherwise. The determination by the Originator that it has made a Nonrecoverable
Advance or that any proposed advance of principal and interest, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct or indirect
financial interest in the Seller or any servicer of the Mortgage Loans or in an
Affiliate of either and (iii) is not connected with the Seller or any servicer
of the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Originator: New Century Mortgage Corporation, its successors in
interest and assigns.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth as such on the related Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time hereunder,
by and between the Seller, the Originator and the Purchaser.
Purchaser: Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc., or its
successor in interest or assigns or any successor to the Purchaser under this
Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the Originator, who had no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation was
not affected by the approval or disapproval of the Mortgage Loan, and such
appraiser and the appraisal made by such appraiser both satisfied the
requirements of Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Mae and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by Best's with respect to
hazard and flood insurance (or such other rating as may be required by a Rating
Agency in connection with a Securitization Transfer in order to achieve the
desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Caps); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and/or the Originator and the Purchaser and/or certain third
parties on the Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans sold hereunder, in connection with a Whole Loan Transfer, Agency
Transfer or a Securitization Transfer pursuant to Section 13, including, but not
limited to, a seller's warranties and servicing agreement with respect to a
Whole Loan Transfer, and a pooling and servicing agreement and/or
seller/servicer agreements and related custodial/trust agreement and documents
with respect to a Securitization Transfer.
Reconstitution Date: As defined in Section 13.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Servicing Agreement (with
respect to each Mortgage Loan, as specified therein).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgage Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: NC Capital Corporation, its successors in interest and
assigns.
Servicing Agreement: The servicing agreement, dated as of August 1,
2002, between the Purchaser and the Originator, providing for the Originator to
service the Mortgage Loans as specified in the Servicing Agreement.
Servicing Fee: With respect to each Mortgage Loan subject to the
Servicing Agreement, a fee payable monthly equal to one-twelfth of the product
of (a) the Servicing Fee Rate and (b) the outstanding principal balance of such
Mortgage Loan. Such fee shall be payable monthly and shall be pro-rated for any
portion of a month during which the Mortgage Loan is serviced by the Originator
under the Servicing Agreement. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by this Agreement) of such Monthly Payment
collected by the Originator, or as otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Originator consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before such
date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Sections 9.03 and 14.01.
Underwriting Guidelines: The underwriting guidelines of the
Originator, a copy of which is attached hereto as Exhibit G and a then-current
copy of which shall be attached as an exhibit to the related Assignment and
Conveyance.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
principal balance on the related Cut-off Date in an amount as set forth in the
related Purchase Price and Terms Agreement, or in such other amount as agreed by
the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans to
be purchased on each Closing Date in accordance with the related Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller is obligated to deliver those Mortgage Loans owned by the
Seller and funded by the Originator pursuant to the original terms of the
Originator's commitment to the mortgagor. The Seller shall deliver the related
Mortgage Loan Schedule for the Mortgage Loans to be purchased on a particular
Closing Date to the Purchaser at least two (2) Business Days prior to the
related Closing Date. The related Mortgage Loan Schedule shall be the related
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the related Closing Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the related Purchase Price and Terms Agreement (subject to
adjustment as provided therein), multiplied by the aggregate principal balance,
as of the related Cut-off Date, of the Mortgage Loans listed on the related
Mortgage Loan Schedule, after application of scheduled payments of principal due
on or before the related Cut-off Date, but only to the extent such payments were
actually received. The initial principal amount of the related Mortgage Loans
shall be the aggregate principal balance of the Mortgage Loans, so computed as
of the related Cut-off Date. If so provided in the related Purchase Price and
Terms Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an account
designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal collected
on or after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any such
payment which is allocable to the period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the related Cut-off
Date is determined after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to such Cut-off date, but to be applied on a Due Date beyond the related Cut-off
Date shall not be applied to the principal balance as of the related Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall deposit any such prepaid amounts into the Custodial Account, which account
is established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least three (3) Business Days prior to the related Closing Date,
the Seller shall (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall otherwise be
acceptable to the Purchaser. Such examination may be made by the Purchaser or
its designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
Mortgage Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its
option and without notice to the Seller, purchase some or all of the Mortgage
Loans without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's (or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by
the Originator pursuant to this Agreement to be appropriately identified in the
Seller's computer system and/or books and records, as appropriate, to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Seller shall
cause the Originator to release from its custody the contents of any Servicing
File retained by it only in accordance with this Agreement or the Servicing
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, an Affiliate of the Seller, the Purchaser or one
or more designees of the Purchaser, as the Purchaser shall select.
Notwithstanding the foregoing, each Mortgage and related Mortgage Note shall be
possessed solely by the Purchaser or the appropriate designee of the Purchaser,
as the case may be. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received by the Seller or the Originator after the
related Cut-off Date on or in connection with a Mortgage Loan shall be vested in
the Purchaser or one or more designees of the Purchaser; provided, however, that
all funds received on or in connection with a Mortgage Loan shall be received
and held by the Seller or the Originator in trust for the benefit of the
Purchaser or the appropriate designee of the Purchaser, as the case may be, as
the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall or shall cause the Originator to be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the ownership of each
Mortgage Loan by the Purchaser. In particular, the Seller shall or shall cause
the Originator to maintain in its possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Xxx or Xxxxxxx Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller or Originator
may be in the form of microfilm or microfiche so long as the Seller or
Originator complies with the requirements of the Xxxxxx Xxx Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
three (3) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto as required by the Custodial Agreement
with respect to each Mortgage Loan set forth on the related Mortgage Loan
Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The Seller shall or shall cause the Originator to forward to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Seller shall
provide the Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall promptly provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within ninety days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to the
Custodian in blank and recorded subsequently by the Purchaser or its designee),
and in the event that the Seller does not cure such failure within 30 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in transferring all original
documents to the Custodian or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's designee
shall be responsible for recording the Assignments of Mortgage and shall be
reimbursed by the Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Originator to, have an internal
quality control program that verifies, on a regular basis, the existence and
accuracy of the legal documents, credit documents, property appraisals, and
underwriting decisions. The program shall include evaluating and monitoring the
overall quality of the Originator's loan production and the servicing activities
of the Originator. The program is to ensure that the Mortgage Loans are
originated and serviced in accordance with Accepted Servicing Standards and the
Underwriting Guidelines; guard against dishonest, fraudulent, or negligent acts;
and guard against errors and omissions by officers, employees, or other
authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing retained basis.
The Purchaser shall retain the Originator as independent contract
servicer of the Mortgage Loans pursuant to and in accordance with the terms and
conditions contained in the Servicing Agreement.
Pursuant to the Servicing Agreement, the Originator shall begin
servicing the Mortgage Loans on behalf of the Purchaser and shall be entitled to
the Servicing Fee and any Ancillary Income with respect to such Mortgage Loans
from the related Closing Date until the termination of the Servicing Agreement
with respect to any of the Mortgage Loans as set forth in the Servicing
Agreement. The Seller shall cause the Originator to service the Mortgage Loans
in accordance with the terms of the Servicing Agreement.
SECTION 8. [RESERVED].
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan and the servicing of
such Mortgage Loan in accordance with the terms of this Agreement and the
Servicing Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder and thereunder;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Seller, regardless of
whether such enforcement is sought in a proceeding in equity or at law; and all
requisite corporate action has been taken by the Seller to make this Agreement
and all agreements contemplated hereby valid and binding upon the Seller in
accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of the
Seller's charter or by-laws or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(d) Ability to Service. Originator has the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Loans. The Originator is duly qualified, licensed,
registered and otherwise authorized under all applicable federal, state and
local laws, and regulations, if applicable, meets the minimum capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if applicable, and
is in good standing to enforce, originate, sell mortgage loans to, and service
mortgage loans in each jurisdiction wherein the Mortgaged Properties are
located;
(e) Reasonable Servicing Fee. The Originator acknowledges and agrees
that the Servicing Fee, represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Originator,
for accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement and the
Servicing Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(h) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the Department of Veterans Affairs is
required for the execution, delivery and performance by the Seller of or
compliance by the Seller with this Agreement or the Mortgage Loans, the delivery
of a portion of the Mortgage Files to the Custodian or the sale of the Mortgage
Loans or the consummation of the transactions contemplated by this Agreement, or
if required, such approval has been obtained prior to the related Closing Date;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(j) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(k) Mortgage Loan Characteristics. The characteristics of the
related Mortgage Loan Package are as set forth on the description of the pool
characteristics for the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(l) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not misleading;
(m) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. In addition, the Seller has delivered information as to its loan
gain and loss experience in respect of foreclosures and its loan delinquency
experience for the immediately preceding three-year period, in each case with
respect to mortgage loans owned by it and such mortgage loans serviced for
others during such period, and all such information so delivered shall be true
and correct in all material respects. There has been no change in the business,
operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. The
Seller has completed any forms requested by the Purchaser in a timely manner and
in accordance with the provided instructions;
(n) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan; and
(q) Origination. The Originator's decision to originate any mortgage
loan or to deny any mortgage loan application is an independent decision based
upon Originator's Underwriting Guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The first Monthly Payment shall be
made with respect to the Mortgage Loan on its related Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of principal and
interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10 of
the Servicing Agreement. If required by the National Flood Insurance Act of
1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac,
as well as all additional requirements set forth in Section 2.10 of the
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws applicable to the Mortgage Loan
have been complied with, the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations, and the
Seller shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Mae and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit B to the related Assignment and
Conveyance Agreement, a mobile home erected thereon or by a mixed-use property,
a property in excess of 10 acres, or other unique property types. As of the date
of origination, no portion of the Mortgaged Property was used for commercial
purposes, and since the date of origination, no portion of the Mortgaged
Property has been used for commercial purposes; provided, that Mortgaged
Properties which contain a home office shall not be considered as being used for
commercial purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials other than
those commonly used for homeowner repair, maintenance and/or household purposes.
In the case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loan"), (i) such Manufactured Home Mortgage Loan
conforms with the applicable Xxxxxx Mae or Xxxxxxx Xxxx requirements regarding
mortgage loans related to manufactured dwellings, (ii) the related manufactured
dwelling is permanently affixed to the land, (iii) the related manufactured
dwelling and the related land are subject to a Mortgage properly filed in the
appropriate public recording office and naming Seller as mortgagee and (iv) the
applicable laws of the jurisdiction in which the related Mortgaged Property is
located will deem the manufactured dwelling located on such Mortgaged Property
to be a part of the real property on which such dwelling is located, and (v)
such Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section
860G(a)(3) of the Internal Revenue Code of 1986, as amended, and (y) secured by
manufactured housing treated as a single family residence under Section
25(e)(10) of the Code;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or a
second lien (with respect to a second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(1) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgage Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien (with respect to a First Lien
Loan) or second lien (with respect to a Second Lien Loan) and first priority
(with respect to a First Lien Loan) or second priority (with resect to a Second
Lien Loan) security interest on the property described therein and the Seller
has full right to sell and assign the same to the Purchaser.;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan. The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only for the
purpose of servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first (with resect to
a First Lien Loan) or second (with resect to a Second Lien Loan) priority lien
of the Mortgage in the original principal amount of the Mortgage Loan (or to the
extent a Mortgage Note provides for negative amortization, the maximum amount of
negative amortization in accordance with the Mortgage), subject only to the
exceptions contained in clauses (1), (2) and (3) of Paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) the Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection with
the Mortgage Loan. The Mortgage Interest Rate as well as, with respect to
Adjustable Rate Mortgage loans, the Lifetime Rate Cap and the Periodic Cap, are
as set forth on the related Mortgage Loan Schedule. The Mortgage Note is payable
in equal monthly installments of principal and interest, which installments of
interest, with respect to Adjustable Rate Mortgage Loans, are subject to change
due to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization. Unless
otherwise specified on the related Mortgage Loan Schedule, the Mortgage Loan is
payable on the first day of each month. There are no Convertible Mortgage Loans
which contain a provision allowing the Mortgagor to convert the Mortgage Note
from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage
Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines.
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and neither the Seller nor the Originator has made any representations to a
Mortgagor that are inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. 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 and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in Paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in mortgage loans similar to
the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan, or cause the Mortgage Loans to prepay during
any period materially faster or slower than the mortgage loans originated by the
Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision 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, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first (with resect to a First Lien Loan) or a second (with
resect to a Second Lien Loan) lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Originator with respect to the Mortgage Loan have been in all
respects in compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Originator and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Originator executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgage Property;
and nothing further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to use and
enjoyment of said property;
(mm) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act or any similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
Originator, 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 the Mortgage Loan, and the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Originator has complied with, all applicable law with respect to the
making of the Mortgage Loans. The Seller shall cause the Originator to maintain
such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the related Closing Date (whether or not known to the
Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (including, without limitation, any exclusions, denials or defenses
which would limit or reduce the availability of the timely payment of the full
amount of the loss otherwise due thereunder to the insured) whether arising out
of actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller or
the Originator has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or Mortgage Note, and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides for
giving notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(zz) Prepayment Penalty. Each Mortgage Loan is subject to a
prepayment penalty as provided in the related Mortgage Note and set forth on the
related Mortgage Loan Schedule. Such prepayment penalty is in an amount equal to
the lesser of (a) the maximum amount permitted under applicable state law, and
(b) if the Mortgage Property is secured by residential real property located in
a state other than Arizona, Maine, Massachusetts, New York, South Carolina or
Wisconsin, six months interest on the related prepaid amount. No such prepayment
penalty may be imposed for a term in excess of (y) with respect to Mortgage
Loans originated prior to October 1, 2002, five (5) years from the date of
origination and (z) with respect to Mortgage Loans originated on or after
October 1, 2002, three (3) years from the date of origination;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan;
(bbb) Single-premium credit life insurance policy. In connection
with the origination of the Mortgage Loan, no proceeds from such Mortgage Loan
were used to finance or acquire a single-premium credit life insurance policy;
and
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code.
(ddd) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including, without limitation, the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); and
(eee) Georgia Fair Lending Act. If originated on or after October 1,
2002, the Mortgage Loan is not secured by Mortgaged Property located in the
State of Georgia.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any such breach of a representation or warranty, which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding the above sentence, within 60 days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representations or
warranties set forth in Paragraph (zz)(y), (zz)(z), (aaa), (bbb), (ccc) or (eee)
of Subsection 9.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price. In the event that a breach shall involve any representation or
warranty set forth in Subsection 9.01, and such breach cannot be cured within 60
days of the earlier of either discovery by or notice to the Seller of such
breach, all of the Mortgage Loans affected by such breach shall, at the
Purchaser's option, be repurchased by the Seller at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Subsection 9.02 (except as provided in the second sentence of this paragraph
with respect to certain breaches for which no substitution is permitted) and the
Seller discovers or receives notice of any such breach within 120 days of the
related Closing Date, the Seller shall, at the Purchaser's option and provided
that the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase
the Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted
Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan
or Loans, provided that any such substitution shall be effected not later than
120 days after the related Closing Date. If the Seller has no Qualified
Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan at the
Repurchase Price. Any repurchase of a Mortgage Loan or Loans pursuant to the
foregoing provisions of this Subsection 9.03 shall be accomplished by either (a)
if the Servicing Agreement has been entered into and is in effect, deposit in
the Custodial Account of the amount of the Repurchase Price for distribution to
the Purchaser on the next scheduled Remittance Date, after deducting therefrom
any amount received in respect of such repurchased Mortgage Loan or Loans and
being held in the Custodial Account for future distribution or (b) if the
Servicing Agreement has not been entered into or is no longer in effect, by
direct remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule
to reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
cause the Originator to remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment less the
Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by the Seller in respect of such
Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all 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 Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold such
parties harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of the Seller representations
and warranties contained in this Agreement or any Reconstitution Agreement. It
is understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and the Successor Servicer as provided in this
Subsection 9.03 constitute the sole remedies of the Purchaser and the Successor
Servicer respecting a breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 [RESERVED].
Subsection 9.05 Repurchase of Mortgage Loans With First Payment
Defaults.
If the related Mortgagor is delinquent with respect to the Mortgage
Loan's first Monthly Payment either (i) after origination of such Mortgage Loan,
or (ii) after the related Closing Date, the Seller, at the Purchaser's option,
shall repurchase such Mortgage Loan from the Purchaser at a price equal to the
percentage of par as stated in the related Purchase Price and Terms Agreement
(subject to adjustment as provided therein) multiplied by the then outstanding
principal balance of such Mortgage Loan, plus accrued and unpaid interest
thereon from the date to which interest was last paid through the day prior to
the repurchase date at the applicable Mortgage Interest Rate, plus any
outstanding advances owed to any servicer in connection with such Mortgage Loan;
provided, however, that such repurchase request must be made within ninety (90)
days of any such delinquency and, provided further, that the Seller shall
repurchase such delinquent Mortgage Loan within thirty (30) days of such
request.
Subsection 9.06 Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without prepayment penalties, in the
event that any such Mortgage Loan prepays in full either (i) on or before a
Securitization Transfer or (ii) during the first six months following the
related Closing Date, the Seller shall pay the Purchaser, within three (3)
Business Days of such prepayment in full, the difference between the Purchase
Price for such Mortgage Loan and the outstanding principal balance of such
Mortgage Loan as of the related Cut-off Date.
SECTION 10. Closing.
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the related Closing Date,
the Seller shall deliver to the Purchaser a magnetic diskette,
or transmit by modem, a listing on a loan-level basis of the
necessary information to compute the Purchase Price of the
Mortgage Loans delivered on such Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement and of the Originator under the Servicing
Agreement (with respect to each Mortgage Loan, as specified
therein) shall be true and correct as of the related Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement or an Event of Default under the Servicing
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4 of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the related Mortgage Loan Schedule (one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
3. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
4. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
each of the Seller and the Originator, including all
attachments thereto; with respect to subsequent Closing Dates,
an Officer's Certificate upon request of the Purchaser;
5. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller),
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
6. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
7. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
8. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
9. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit G; and
10. Assignment and Conveyance Agreement in the form of Exhibit H
hereto, and all exhibits thereto.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans including recording fees, fees for title policy endorsements and
continuations, fees for recording Assignments of Mortgage, and the Seller's
attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after each Closing Date, on one or more dates (each, a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements").
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; and (3) to restate the
representations and warranties set forth in this Agreement and the Servicing
Agreement as of the settlement or closing date in connection with such
Reconstitution that occurs on or prior to the date which is six (6) months
following the related Closing Date and in connection with any Reconstitution on
or after the date which is six (6) months following the related Closing Date, to
restate the representations and warranties set forth in this Agreement as of the
Closing Date (each, a "Reconstitution Date") or make the representations and
warranties set forth in the related selling/servicing guide of the master
servicer or issuer, as the case may be, in connection with such Reconstitution.
The Seller shall use its reasonable best efforts to provide to such master
servicer or issuer, as the case may be, and any other participants in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller or the
Originator as are reasonably believed necessary by the Purchaser or any such
other participant; and (iii) to execute, deliver and satisfy all conditions set
forth in any indemnity agreement required by the Purchaser or any such
participant. The Seller shall indemnify the Purchaser, each Affiliate designated
by the Purchaser and each Person who controls the Purchaser or such Affiliate
and hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that each of them may sustain
in any way related to any information provided by or on behalf of the Seller or
the Originator regarding the Seller, the Originator, the Seller's and
Originator's servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement. Moreover, the Seller agrees to cooperate with all reasonable requests
made by the Purchaser to effect such Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller or the
Originator hold record title to the Mortgages, prior to the Reconstitution Date,
the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the
Originator, as applicable, acceptable to the prospective purchaser or trustee,
as applicable, for each Mortgage Loan that is part of the Reconstitution and
shall pay all preparation and recording costs associated therewith. In
connection with the Reconstitution, the Seller shall execute or shall cause the
Originator to execute each assignment of mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
prospective purchaser or trustee, as applicable, upon the Seller's receipt
thereof. Additionally, the Seller shall prepare and execute or shall cause the
Originator to execute, at the direction of the Purchaser, any note endorsement
in connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Servicing
Agreement shall remain in effect with respect to the related Mortgage Loan
Package, shall continue to be serviced in accordance with the terms of this
Agreement and the Servicing Agreement and with respect thereto this Agreement
shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and the Successor Servicer
and hold such parties 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 such parties may
sustain in any way related to the failure of the Seller to perform its duties
and the Originator to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13. The Seller immediately shall notify the Purchaser if a claim is made
by a third party with respect to this Agreement or any Reconstitution Agreement
or the Mortgage Loans, assume (with the prior written consent of 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 judgment or
decree which may be entered against it or the Purchaser in respect of such
claim. The Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Seller's indemnification pursuant to Section 9, or is in
any way related to the failure of the Originator or the Seller to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the related Closing Date of the Mortgage
Loans described on the related Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. The Seller hereby grants to the Purchaser a
lien on and a continuing security interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligations under the related Purchase Price
and Terms Agreement, and the Seller agrees that it shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (a) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the consent of the Purchaser. This Agreement may
be assigned, pledged or hypothecated by the Purchaser without the consent of the
Seller. In the event the Purchaser assigns this Agreement, and the assignee
assumes any of the Purchaser's obligations hereunder, the Seller acknowledges
and agrees to look solely to such assignee, and not to the Purchaser, for
performance of the obligations so assumed and the Purchaser shall be relieved
from any liability to the Seller with respect thereto.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their 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 at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Seller's behalf,
to personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the related Closing Date and the Seller shall take no action to undermine
these rights and benefits. Notwithstanding the foregoing, it is understood and
agreed that promotions undertaken by the Seller or any affiliate of the Seller
which are directed to the general public at large, including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX XXXXXXX XXXX XXXXXX MORTGAGE
CAPITAL INC.
(Purchaser)
By:____________________________________
Name:__________________________________
Title:_________________________________
NC CAPITAL CORPORATION
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Amended and Restated Mortgage Loan Purchase and
Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage must be
duly recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area where
the Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller], formerly
known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Originator to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officers
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) the original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection with
the Mortgage; and
(i) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power certified by
the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in clause (iv)
above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
Exhibit B
EXHIBIT B
[RESERVED]
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________ [COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver the Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of _______ __,
200_, by and between Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc. (the
"Purchaser") and the Company (the "Purchase Agreement"), [and to endorse
the Mortgage Notes and execute the Assignments of Mortgages by original
[or facsimile] signature], and such resolutions are in effect on the date
hereof and have been in effect without amendment, waiver, rescission or
modification since______________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement,, [the sale of the mortgage loans] or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement conflicts or will
conflict with or results or will result in a breach of or constitutes or
will constitute a default under the charter or by-laws of the Company or,
to the best of my knowledge, the terms of any indenture or other agreement
or instrument to which the Company is a party or by which it is bound or
to which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the Purchase
Agreement, or the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would be
likely to impair materially the ability of the Company to perform under
the terms of the Purchase Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER AND ORIGINATOR
(date)
Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc. (the "Purchaser"),
dated as of _________ __, 200_ (the "Agreement") which sale is in the form of
whole loans. Capitalized terms not otherwise defined herein have the meanings
set forth in the Purchase Agreement and the Servicing Agreement.
[We] [I] have examined the following documents:
1. the Agreement;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company and the
Originator contained in the Agreement. [We] [I] have assumed the authenticity of
all documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company and the Originator are [type of entity] duly
organized, validly existing and in good standing under the
laws of the [United States] and are qualified to transact
business in, and is in good standing under, the laws of [the
state of incorporation].
2. Each of the Company and the Originator has the power to engage
in the transactions contemplated by the Agreement and all
requisite power, authority and legal right to execute and
deliver the Agreement and to perform and observe the terms and
conditions of the Agreement.
3. The Agreement has been duly authorized, executed and delivered
by the Company and the Originator, as applicable, and is a
legal, valid and binding agreement enforceable in accordance
with its terms against the Company and the Originator, as
applicable, subject to bankruptcy laws and other similar laws
of general application affecting rights of creditors and
subject to the application of the rules of equity, including
those respecting the availability of specific performance,
none of which will materially interfere with the realization
of the benefits provided thereunder or with the Purchaser's
ownership of the Mortgage Loans.
4. Each of the Company and the Originator has been duly
authorized to allow any of its officers to execute any and all
documents by original signature in order to complete the
transactions contemplated by the Agreement.
[5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company].
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company or the
Originator of or compliance by the Company or the Originator
with the Agreement and the sale of the Mortgage Loans by the
Company or the consummation of the transactions contemplated
by the Agreement or (ii) any required consent, approval,
authorization or order has been obtained by the Company or the
Originator.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreement conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company or the Originator, as applicable,
or, to the best of my knowledge, the material terms of any
indenture or other agreement or instrument to which the
Company or the Originator is a party or by which it is bound
or to which it is subject, or violates any statute or order,
rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company
or the Originator is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company or the Originator which, in [our] [my] judgment,
either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations,
financial condition, properties or assets of the Company or
the Originator or in any material impairment of the right or
ability of the Company or the Originator to carry on its
business substantially as now conducted or in any material
liability on the part of the Company or the Originator or
which would draw into question the validity of the Agreement
or the Mortgage Loans or of any action taken or to be taken in
connection with the transactions contemplated thereby, or
which would be likely to impair materially the ability of the
Company or the Originator to perform under the terms of the
Agreement.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreement, is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
Except as otherwise set forth in the Agreement, I assume no
obligation to revise this opinion or alter its conclusions to update or support
this letter to reflect any facts or circumstances that may hereafter develop.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
_____________________________
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______ (the "Association")]
___________________________
___________________________
___________________________
___________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________ [COMPANY]
a [type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell to Xxxxxx Xxxxxxx Xxxx
Xxxxxx Mortgage Capital Inc. under an Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of ______ __, 200_, certain mortgage
loans originated by the Association. The Company warrants that the mortgage
loans to be sold to Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc. are in
addition to and beyond any collateral required to secure advances made by the
Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc. shall not be used as additional
or substitute collateral for advances made by the Association. Xxxxxx Xxxxxxx
Xxxx Xxxxxx Mortgage Capital Inc. understands that the balance of the Company's
mortgage loan portfolio may be used as collateral or additional collateral for
advances made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to Xxxxxx Xxxxxxx
Xxxx Xxxxxx Mortgage Capital Inc.
Very truly yours,
____________________________
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
__________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"), to
be purchased by Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc. from the
company named on the next page (the "Company") pursuant to that certain Amended
and Restated Mortgage Loan Purchase and Warranties Agreement, dated as of ______
__, 200_, and certifies that all notes, mortgages, assignments and other
documents in its possession relating to such Mortgage Loans have been delivered
and released to the Company or its designees, as of the date and time of the
sale of such Mortgage Loans to Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital Inc.
Such release shall be effective automatically without any further action by any
party upon payment in one or more installments, in immediately available funds,
of $_____________, in accordance with the wire instructions set forth below.
Name and Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to Xxxxxx Xxxxxxx Xxxx
Xxxxxx Mortgage Capital Inc. that, as of the date and time of the sale of the
above-mentioned Mortgage Loans to Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage Capital
Inc. the security interests in the Mortgage Loans released by the above-named
financial institution comprise all security interests relating to or affecting
any and all such Mortgage Loans. The Company warrants that, as of such time,
there are and will be no other security interests affecting any or all of such
Mortgage Loans.
_____________________________
By:__________________________
Title:_________________________
Date:_________________________
Exhibit G
EXHIBIT G
UNDERWRITING GUIDELINES
(See Exhibit C to Tab #5)
Exhibit H
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of __________, ____, ___________________ NC Capital
Corporation ("Seller"), as the Seller under (i) that certain Purchase Price and
Terms Agreement, dated as of ___________, _____ (the "PPTA"), and (ii) that
certain Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of ________, ____ (the "Purchase Agreement"), does hereby sell,
transfer, assign, set over and convey to Xxxxxx Xxxxxxx Xxxx Xxxxxx Mortgage
Capital Inc. ("Purchaser") as the Purchaser under the Agreements (as defined
below), without recourse, but subject to the terms of the Agreements, all right,
title and interest of, in and to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto as Exhibit A (the "Mortgage Loans"), together with the
Mortgage Files and all rights and obligations arising under the documents
contained therein. Each Mortgage Loan subject to the Agreements was underwritten
in accordance with, and conforms to, the Underwriting Guidelines attached hereto
as Exhibit C. Pursuant to Section 6 of the Purchase Agreement, the Seller has
delivered to the Custodian the documents for each Mortgage Loan to be purchased
as set forth in the Purchase Agreement. The contents of each Servicing File
required to be retained by ______________________ ("Servicer"), as
Originator/Servicer under that certain Servicing Agreement, dated as of
________, ____ (the "Servicing Agreement") to service the Mortgage Loans
pursuant to the Servicing Agreement and thus not delivered to the Purchaser are
and shall be held in trust by the Servicer for the benefit of the Purchaser as
the owner thereof. The Servicer's possession of any portion of the Servicing
File is at the will of the Purchaser for the sole purpose of facilitating
servicing of the related Mortgage Loan pursuant to the Servicing Agreement, and
such retention and possession by the Servicer shall be in a custodial capacity
only. The ownership of each Mortgage Note, Mortgage and the contents of the
Mortgage File and Servicing File is vested in the Purchaser and the ownership of
all records and documents with respect to the related Mortgage Loan prepared by
or which come into the possession of the Seller or the Servicer shall
immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Seller at the will of the Purchaser in such custodial capacity
only. The PPTA, the Purchase Agreement and the Servicing Agreement shall
collectively be referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
[SELLER]
By:____________________________________
Name:__________________________________
Title:_________________________________
[SERVICER]
By:____________________________________
Name:__________________________________
Title:_________________________________
Accepted and Agreed:
XXXXXX XXXXXXX XXXX XXXXXX
MORTGAGE CAPITAL INC.
By:___________________________
Name:______________________
Title:_____________________
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
The Mortgage Loans
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as delivered on
the related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than
$_________; (2) an origination date earlier than __ months prior to the related
Cut-off Date; (3) a CLTV of greater than _____%; (4) a FICO Score of less than
___; or (5) a debt-to-income ratio of more than __%. Each Mortgage Loan has a
Mortgage Interest Rate of at least ___% per annum and an outstanding principal
balance less than $_________. Each Adjustable Rate Mortgage Loan has an Index of
[_______].
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES