LEHMAN BROTHERS BANK, FSB,
Execution
XXXXXX
BROTHERS BANK, FSB,
Purchaser
and
COUNTRYWIDE
HOME LOANS, INC.,
Company
Dated
as
of March 1, 2006
Conventional
Residential Fixed and
Adjustable
Rate Mortgage Loans
Group
No.
2006-Flow
TABLE
OF
CONTENTS
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Page
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ARTICLE
I.
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DEFINITIONS
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ARTICLE
II.
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CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
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BOOKS
AND RECORDS; CUSTODIAL AGREEMENT
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DELIVERY
OF DOCUMENTS
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Section
2.01.
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Conveyance
of Mortgage Loans; Possession of Mortgage Files; Maintenance of
Servicing
Files.
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13
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Section
2.02.
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Books
and Records; Transfers of Mortgage Loans.
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13
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Section
2.03.
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Custodial
Agreement; Delivery of Documents.
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14
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Section
2.04.
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MERS
Designated Mortgage Loans.
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15
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ARTICLE
III.
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PURCHASE
PRICE
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ARTICLE
IV.
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REPRESENTATIONS
AND WARRANTIES;
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REMEDIES
AND BREACH
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Section
4.01.
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Company
Representations and Warranties.
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16
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Section
4.02.
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Representations
and Warranties Regarding Individual Mortgage Loans.
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18
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Section
4.03.
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Remedies
for Breach of Representations and Warranties.
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30
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Section
4.04.
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Restrictions
and Requirements Applicable in the Event that a Mortgage Loan is
Acquired
by a REMIC.
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32
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Section
4.05.
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Pre-
Closing Due Diligence.
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34
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ARTICLE
V.
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ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
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Section
5.01.
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Company
to Act as Servicer.
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34
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Section
5.02.
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Liquidation
of Mortgage Loans.
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36
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Section
5.03.
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Collection
of Mortgage Loan Payments.
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37
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Section
5.04.
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Establishment
of and Deposits to Custodial Account.
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37
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Section
5.05.
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Permitted
Withdrawals From Custodial Account.
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38
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-
i -
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Section
5.06.
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Establishment
of and Deposits to Escrow Account.
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39
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Section
5.07.
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Permitted
Withdrawals From Escrow Account.
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40
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Section
5.08.
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Payment
of Taxes, Insurance and Other Charges.
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41
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Section
5.09.
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Protection
of Accounts.
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41
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Section
5.10.
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Maintenance
of Hazard Insurance.
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42
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Section
5.11.
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Maintenance
of Mortgage Impairment Insurance.
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43
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Section
5.12.
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Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
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44
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Section
5.13.
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Inspections.
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44
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Section
5.14.
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Restoration
of Mortgaged Property.
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45
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Section
5.15.
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Maintenance
of LPMI Policy; Claims.
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45
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Section
5.16.
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Title,
Management and Disposition of REO Property.
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46
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Section
5.17.
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Real
Estate Owned Reports.
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49
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Section
5.18.
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Liquidation
Reports.
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49
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Section
5.19.
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Notification
of Adjustments.
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49
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Section
5.20.
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Reports
of Foreclosures and Abandonments of Mortgaged Property.
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49
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Section
5.21.
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Waiver
of Prepayment Charges.
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49
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Section
5.22.
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Credit
Reporting.
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50
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ARTICLE
VI.
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PAYMENTS
TO PURCHASER
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Section
6.01.
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Remittances.
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50
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Section
6.02.
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Statements
to Purchaser.
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51
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Section
6.03.
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Monthly
Advances by Company.
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51
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ARTICLE
VII.
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GENERAL
SERVICING PROCEDURES
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Section
7.01.
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Transfers
of Mortgaged Property.
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52
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Section
7.02.
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Satisfaction
of Mortgages and Release of Mortgage Files.
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52
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Section
7.03.
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Servicing
Compensation.
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53
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Section
7.04.
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Annual
Statement as to Compliance.
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53
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Section
7.05.
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Annual
Independent Public Accountants’ Servicing Report.
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53
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Section
7.06.
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Right
to Examine Company Records.
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54
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ARTICLE
VIII.
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AGENCY
TRANSFER; PASS-THROUGH TRANSFER
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Section
8.01.
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Whole
Loan Transfers; Agency Transfers or Pass-Through
Transfers.
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54
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Section
8.02.
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Purchaser’s
Repurchase and Indemnification Obligations.
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56
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Section
8.03.
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Provision
of Information.
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57
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Section
8.04.
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Financial
Statements; Servicing Facility.
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57
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-
ii -
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ARTICLE
IX.
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THE
COMPANY
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Section
9.01.
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Indemnification;
Third Party Claims.
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58
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Section
9.02.
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Merger
or Consolidation of the Company.
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58
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Section
9.03.
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Limitation
on Liability of Company and Others.
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59
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Section
9.04.
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Limitation
on Resignation and Assignment by Company.
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59
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ARTICLE
X.
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DEFAULT
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Section
10.01.
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Events
of Default.
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60
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Section
10.02.
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Waiver
of Defaults.
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61
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ARTICLE
XI.
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TERMINATION
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Section
11.01.
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Termination.
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62
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Section
11.02.
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Termination
Without Cause.
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62
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ARTICLE
XII.
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MISCELLANEOUS
PROVISIONS
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Section
12.01.
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Successor
to Company.
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62
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Section
12.02.
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Amendment.
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63
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Section
12.03.
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Closing.
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64
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Section
12.04.
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Closing
Documents.
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64
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Section
12.05.
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Assignments
of Mortgage; Costs.
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66
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Section
12.06.
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Arbitration.
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66
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Section
12.07.
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Confidential
Information
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66
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Section
12.08.
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Safeguarding
Customer Information
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66
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Section
12.09.
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Notices.
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67
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Section
12.10.
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Severability
of Provisions.
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68
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Section
12.11.
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Counterparts.
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68
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Section
12.12.
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Place
of Delivery and Governing Law.
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68
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Section
12.13.
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Further
Agreements.
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68
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Section
12.14.
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Intention
of the Parties.
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68
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Section
12.15.
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Successors
and Assigns; Assignment by the Purchaser.
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69
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Section
12.16.
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Waivers;
Other Agreements.
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69
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Section
12.17.
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General
Interpretive Principles.
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69
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Section
12.18.
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Reproduction
of Documents.
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69
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Section
12.19.
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Recordation
of Assignments of Mortgage.
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70
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-
iii -
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Section
12.20.
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No
Personal Solicitation.
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70
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Section
12.21.
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Appointment
and Designation of Master Servicer.
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71
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Section
12.22.
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Regulation
AB Addendum.
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71
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Section
12.23.
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Documents
Mutually Drafted.
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71
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-
iv -
EXHIBITS
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EXHIBIT
A-1
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FORM
OF ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
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EXHIBIT
A-2
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MORTGAGE
LOAN SCHEDULE DATA FIELDS
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EXHIBIT
B
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CONTENTS
OF EACH MORTGAGE FILE
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EXHIBIT
C
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FORM
OF CUSTODIAL ACCOUNT LETTER AGREEMENT
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EXHIBIT
D
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FORM
OF ESCROW ACCOUNT LETTER AGREEMENT
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EXHIBIT
E-1
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FORM
OF MONTHLY REMITTANCE ADVICE
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EXHIBIT
E-2
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STANDARD
LAYOUT FOR DEFAULTED LOAN REPORT
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EXHIBIT
F
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FORM
OF COMPANY’S OFFICER’S CERTIFICATE
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EXHIBIT
G
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FORM
OF OPINION OF COUNSEL TO COMPANY
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EXHIBIT
H-1
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FORM
OF SECURITY RELEASE CERTIFICATION
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EXHIBIT
H-2
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FORM
OF SECURITY RELEASE CERTIFICATION
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EXHIBIT
I
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REGULATION
AB ADDENDUM
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-
v -
This
is a
Flow Mortgage Loan Purchase, Warranties and Servicing Agreement (this
“Agreement”), dated as of March 1, 2006, by and between Xxxxxx Brothers Bank,
FSB, as purchaser (the “Purchaser”),
and
Countrywide Home Loans, Inc., as seller and servicer (the “Company”).
WITNESSETH:
WHEREAS,
the Company has agreed to sell from time to time to the Purchaser, and the
Purchaser has agreed to purchase from time to time from the Company, certain
fixed and adjustable rate residential first and second lien mortgage loans
(the
“Mortgage Loans”) on a servicing retained basis as described herein, and which
shall be delivered as whole loans on the related Closing Date, as defined
below;
WHEREAS,
each Mortgage Loan will be secured by a mortgage, deed of trust or other
security instrument creating a first or second lien on a residential dwelling
located in the jurisdiction indicated on the related Mortgage Loan Schedule;
and
WHEREAS,
the Purchaser and the Company wish to prescribe the manner of conveyance,
servicing and control of the Mortgage Loans.
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 Company
agree as follows:
ARTICLE
I.
DEFINITIONS
The
following terms are defined as follows (except as otherwise agreed in writing
by
the parties):
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices (i) 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 (ii) in accordance with all applicable state, federal and local
laws, rules and regulations.
Acknowledgment
and Conveyance Agreement:
The
agreement, substantially in the form of Exhibit
A-1
hereto
to be executed by the Company and the Purchaser on each Closing
Date.
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:
The
sale or transfer by Purchaser of some or all of the Mortgage Loans to Xxxxxx
Xxx
under its Cash Purchase Program or its MBS Swap Program (Special Servicing
Option) or to Xxxxxxx Mac under its Xxxxxxx Xxx Xxxx Program or Gold PC Program,
retaining the Company as “servicer” thereunder.
Agreement:
This
Flow Mortgage Loan Purchase, Warranties and Servicing Agreement and all
amendments hereof and supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
Ancillary
Income:
All
income derived from the Mortgage Loans, excluding Servicing Fees and Prepayment
Charges attributable to the Mortgage Loans, including but not limited to,
late
charges, fees received with respect to checks or bank drafts returned by
the
related bank for non-sufficient funds, assumption fees, optional insurance
administrative fees, Prepayment Interest Excess amounts and all other incidental
fees and charges.
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 or the sale
price
of the related Mortgaged Property, whichever is less.
ARM
Mortgage Loan:
An adjustable rate Mortgage Loan.
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, or in the case of a MERS Designated Mortgage Loan, a confirmed
electronic transmission to MERS, identifying a transfer of ownership of the
related Mortgage to the Purchaser or its designee.
Balloon
Mortgage Loan:
Any
Mortgage Loan wherein the Mortgage Note matures prior to full amortization
and
requires a final and accelerated payment of principal.
BIF:
The
Bank Insurance Fund, or any successor thereto.
BPO:
A
broker’s price opinion obtained by the Purchaser.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the State of New York, Texas or California are
authorized or obligated by law or executive order to be closed.
Closing
Date:
Means a
date on which the Company shall sell and the Purchaser shall purchase Mortgage
Loans under this Agreement as set forth in the related Purchase Price and
Terms
Letter.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time or
any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
-
2 -
Combined
Loan-to-Value Ratio or CLTV:
With respect to any Second Lien Mortgage Loan, the ratio (expressed as a
percentage) of (a) the sum of (i) the outstanding principal balance of the
Mortgage Loan at origination and (ii) the original principal amount of any
related First Lien Mortgage Loan (as of the origination date of the Second
Lien
Mortgage Loan) and (b) the lesser of (i) the Appraised Value of the Mortgaged
Property and (ii) if the Mortgage Loan was made to finance the acquisition
of
the related Mortgaged Property, the purchase price of the Mortgaged
Property.
Commission:
The
United States Securities and Exchange Commission.
Company:
Countrywide Home Loans, Inc., or its successor in interest or assigns, or
any
successor to the Company under this Agreement appointed as herein
provided.
Condemnation
Proceeds:
All
awards or settlements in respect of a Mortgaged Property, 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.
Custodial
Account:
The
separate trust account created and maintained pursuant to Section
5.04.
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:
The
custodian under the Custodial Agreement, or its successor in interest or
assigns
or any successor to the Custodian under the Custodial Agreement, as therein
provided.
Customer
Information:
The
nonpublic personal information (as defined in 15 U.S.C. § 6809(4)) of the
Mortgagors held or received by the Company in connection with the performance
of
its obligations under this Agreement.
Cut-off
Date:
With
respect to any Mortgage Loan purchased on a Closing Date, the date as may
be set
forth in the related Purchase Price and Terms Letter.
Deleted
Mortgage Loan:
A
Mortgage Loan which is repurchased by the Company in accordance with the
terms
of this Agreement or which is, in the case of a substitution pursuant to
Section
4.03, replaced or to be replaced with a Qualified Substitute Mortgage
Loan.
Determination
Date:
The
15th day (or if such 15th day is not a Business Day, the Business Day
immediately following such 15th day) of the month of the related Remittance
Date.
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace.
-
3 -
Due
Period:
With
respect to each Remittance Date, the period commencing on the second day
of the
month preceding the month of the Remittance Date and ending on the first
day of
the month of the Remittance Date.
Eligible
Investments:
Any one
or more of the obligations and securities listed below which investment provides
for a date of maturity not later than the Determination Date in each
month:
(i) direct
obligations of, and obligations fully guaranteed by, the United States of
America, or any agency or instrumentality of the United States of America
the
obligations of which are backed by the full faith and credit of the United
States of America; and
(ii) federal
funds, demand and time deposits in, certificates of deposits of, or bankers’
acceptances issued by, any depository institution or trust company incorporated
or organized under the laws of the United States of America or any state
thereof
and subject to supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual commitment
providing for such investment the commercial paper or other short-term debt
obligations of such depository institution or trust company (or, in the case
of
a depository institution or trust company which is the principal subsidiary
of a
holding company, the commercial paper or other short-term debt obligations
of
such holding company) are rated “P-1” by Xxxxx’x Investors Service, Inc. and the
long-term debt obligations of such holding company) are rated “P-1” by Xxxxx’x
Investors Service, Inc. and the long-term debt obligations of such depository
institution or trust company (or, in the case of a depository institution
or
trust company which is the principal subsidiary of a holding company, the
long-term debt obligations of such holding company) are rated at least “Aa” by
Xxxxx’x Investors Service, Inc.;
provided,
however,
that no
such instrument shall be an Eligible Investment if such instrument evidences
either (i) a right to receive only interest payments with respect to the
obligations underlying such instrument, or (ii) both principal and interest
payments derived from obligations underlying such instrument and the principal
and interest payments with respect to such instrument provide a yield to
maturity of greater than 120% of the yield to maturity at par of such underlying
obligations; provided, further, that upon a Pass-Through Transfer, the Eligible
Investments permitted thereunder shall be set forth in the related
Reconstitution Agreement, if amended by such Reconstitution
Agreement.
Notwithstanding
anything to the contrary contained herein, with respect to Mortgage Loans
subject to an Agency Transfer (if applicable) or a Pass-Through Transfer,
in the
event that the applicable Reconstitution Agreement has a more limiting
definition of “Eligible Investments”, then the definition contained in such
Reconstitution Agreement shall apply to such Mortgage Loans, if agreed upon
by
the Company.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Company pursuant
to Section 5.12.
-
4 -
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section
5.06.
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 Loan.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 10.01.
Xxxxxx
Mae:
Xxxxxx
Xxx, or any successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
FICO
Score:
A
statistical credit score obtained by mortgage lenders in connection with
the
loan application to help assess a Mortgagor’s creditworthiness.
Fidelity
Bond:
A
fidelity bond to be maintained by the Company pursuant to Section
5.12.
First
Lien:
With respect to any Second Lien Mortgage Loan, the mortgage loan relating
to the
corresponding Mortgaged Property having a first priority lien.
Xxxxxxx
Mac:
Xxxxxxx
Mac, or any successor thereto.
Gross
Margin:
With
respect to each ARM 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.
Index:
With
respect to each ARM Mortgage Loan, the index identified in the related Purchase
Price and Terms Letter.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Interim
Funder:
With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the interim funder pursuant to the MERS Procedures
Manual.
Interest
Rate Adjustment Date:
The
date on which an adjustment to the Mortgage Interest Rate on a Mortgage Note
becomes effective.
Investor:
With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the investor pursuant to the MERS Procedures Manual.
-
5 -
Lifetime
Rate Cap:
The
provision of the Mortgage Note related to each ARM Mortgage Loan which provides
for an absolute maximum Mortgage Interest Rate thereunder as set forth on
the
related Mortgage Loan Schedule and/or the related Mortgage Note.
Liquidation
Proceeds:
Cash,
other than Insurance Proceeds, 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 of the outstanding principal amount
of
the Mortgage Loan as of the related origination Date to the lesser of (a)
the
Appraised Value of the Mortgaged Property and (b) if the Mortgage Loan was
made
to finance the acquisition of the related Mortgaged Property, the purchase
price
of the Mortgaged Property.
LPMI
Loan: A
Mortgage Loan with a LPMI Policy.
LPMI
Policy: A
policy
of mortgage guaranty insurance as obtained by the Purchaser, issued by a
Qualified Insurer pursuant to which the related premium is to be paid by
the
Company from payments of interest made by the Mortgagor.
LPMI
Fee:
With
respect to each LPMI Loan, the portion of the Mortgage Interest Rate as set
forth on the related Mortgage Loan Insurance Coverage Schedule as provided
by
the Purchaser to the Company (which shall be payable solely from the interest
portion of Monthly Payments, Insurance Proceeds, Condemnation Proceeds or
Liquidation Proceeds), which, during such period prior to the required
cancellation of the LPMI Policy, shall be used to pay the premium due on
the
related LPMI Policy.
Master
Servicer:
Has the
meaning set forth in Section 12.22.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, and
its
successors in interest.
MERS
Designated Mortgage Loan:
Mortgage Loans for which (a) the Company has designated MERS as the mortgagee
of
record, as nominee for the Company and (b) the Company has designated or
will
designate the Purchaser as the Investor on the MERS System.
MERS
Identification Number:
The
eighteen digit number permanently assigned to each MERS Designated Mortgage
Loan.
MERS
Procedures Manual:
The
MERS Procedures Manual, as it may be amended, supplemented or otherwise modified
from time to time.
MERS
System:
MERS
Electronic Registration Systems, Inc., or any successor thereto.
-
6 -
Monthly
Advance:
The
portion of Monthly Payment delinquent with respect to each Mortgage Loan
at the
close of business on the Determination Date required to be advanced by the
Company pursuant to Section 6.03 on the Business Day immediately preceding
the
Remittance Date of the related month.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first or second lien on an unsubordinated estate in fee simple
in real
property securing the Mortgage Note or a lien upon a leasehold estate, as
the
case may be.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit
B
hereto,
and any additional documents required to be added to the Mortgage File pursuant
to this Agreement.
Mortgage
Impairment Insurance Policy:
A
mortgage impairment or blanket hazard insurance policy as described in Section
5.11.
Mortgage
Interest Rate:
With
respect to each fixed rate Mortgage Loan, the fixed annual rate of interest
borne on a Mortgage Note. With respect to each ARM Mortgage Loan, the annual
rate of interest borne on a Mortgage Note, as adjusted from time to time
in
accordance with the provisions of the Mortgage Note.
Mortgage
Interest Rate Cap:
With
respect to each ARM 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
Mortgage Loan Schedule annexed as Annex 1 to the related Acknowledgment and
Conveyance Agreement, which Mortgage Loan includes without limitation the
Mortgage File, the Monthly Payments, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds
and all other rights, benefits, proceeds and obligations arising from or
in
connection with such Mortgage Loan, except for the servicing rights related
thereto which are retained by the Company.
Mortgage
Loan Documents:
The
documents contained in the Mortgage File pertaining to each Mortgage
Loan.
Mortgage
Loan Package:
A group
of Mortgage Loans sold to the Purchaser by the Company on a Closing Date
and set
forth on the Mortgage Loan Schedule annexed to the related Acknowledgment
and
Conveyance Agreement.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Purchaser, which shall be equal to the Mortgage Interest Rate minus the
Servicing Fee Rate.
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7 -
Mortgage
Loan Schedule:
A
schedule of Mortgage Loans annexed as Annex 1 to each Acknowledgment and
Conveyance Agreement, each such schedule setting forth the data and information
listed on Exhibit
A-2
with
respect to each Mortgage Loan.
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.
Officer’s
Certificate:
A
certificate signed by (a) the Chairman of the Board, the Vice Chairman of
the
Board, the President or a Vice President and (b) the Treasurer, the Secretary
or
one of the Assistant Treasurers or Assistant Secretaries of the Company,
and
delivered to the Purchaser as required by this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Company, reasonably
acceptable to the Purchaser, provided that any Opinion of Counsel relating
to
(a) qualification of the Mortgage Loans in a REMIC or (b) compliance
with the REMIC Provisions, must be an opinion of counsel who (i) is in fact
independent of the Company and any Master Servicer of the Mortgage Loans,
(ii) does not have any material direct or indirect financial interest in
the Company or any Master Servicer of the Mortgage Loans or in an Affiliate
of
any such entity and (iii) is not connected with the Company or any Master
Servicer of the Mortgage Loans as an officer, employee, director or person
performing similar functions.
Pass-Through
Transfer:
Any
transaction involving either (1) a sale or other transfer of some or all
of the
Mortgage Loans directly or indirectly to an issuing entity in connection
with an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage
loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Periodic
Rate Cap:
The
provision of the Mortgage Note related to each ARM 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
ARM
Mortgage Loan is the rate set forth 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.
PMI
Policy:
A
policy of primary mortgage guaranty insurance issued by a Qualified Insurer,
solely with respect to those Mortgage Loans that have such a policy.
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Prepayment
Charge:
With
respect to any Mortgage Loan and Remittance Date, the charges or premiums,
if
any, due in connection with a full or partial prepayment of such Mortgage
Loan
during the immediately preceding Principal Prepayment Period in accordance
with
the terms of the related Mortgage Note.
Prepayment
Interest Excess:
With
respect to any Remittance Date, for each Mortgage Loan that was the subject
of a
Principal Prepayment during the period from the related Due Date to the end
of
the related Prepayment Period, any payment of interest received in connection
therewith (net the related Servicing Fee) representing interest accrued for
any
portion of such month of receipt.
Prepayment
Interest Shortfall Amount:
With
respect to any Mortgage Loan that was subject to a Principal Prepayment in
full
or in part during any Due Period, which Principal Prepayment was applied
to such
Mortgage Loan prior to such Mortgage Loan’s Due Date in such Due Period, the
amount of interest (net the related Servicing Fee) that would have accrued
on
the amount of such Principal Prepayment during the period commencing on the
date
as of which such Principal Prepayment was applied to such Mortgage Loan and
ending on the day immediately preceding such Due Date, inclusive.
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate in The
Wall Street Journal.
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.
Principal
Prepayment Period:
The
period beginning on the 16th
day of
the preceding the month in which the related Remittance Date occurs and ending
on the 15th
day of
the month in which such Remittance Date occurs.
Purchase
Price:
The
price paid on the related Closing Date by the Purchaser to the Company in
exchange for the Mortgage Loans as calculated in Article III of this
Agreement.
Purchase
Price and Terms Letter:
With
respect to each purchase of a Mortgage Loan Package hereunder, that certain
letter agreement by and between the Company and the Purchaser setting forth
the
general terms, conditions and portfolio characteristics for each Mortgage
Loan
Package to be purchased hereunder as of any Closing Date.
Purchaser:
Xxxxxx
Brothers Bank, FSB or its successor in interest or assigns under this Agreement
as herein provided.
Qualified
Appraiser:
An
appraiser 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 such appraiser and
the
appraisal made by such appraiser both satisfy 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.
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9 -
Qualified
Depository:
A
depository the accounts of which are insured by the FDIC through the BIF
or the
SAIF and the debt obligations of which are rated in the two highest short
term
ratings by Standard & Poor’s, A Division of The McGraw Hill
Companies.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business.
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by the Company for a Deleted Mortgage
Loan which must, on the date of such substitution, (i) have an outstanding
principal balance, after deduction of all scheduled payments due in the month
of
substitution (or in the case of a substitution of more than one mortgage
loan
for a Deleted Mortgage Loan, an aggregate principal balance), not in excess
of
the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage
Loan Remittance Rate not less than and not more than 2% greater than the
Mortgage Loan Remittance Rate of the Deleted Mortgage Loan; (iii) have a
remaining term to maturity not greater than and not more than one year less
than
that of the Deleted Mortgage Loan; (iv) have a Gross Margin not less than
that
of the Deleted Mortgage Loan; (v) have a Lifetime Rate Cap not less than
that of
the Deleted Mortgage Loan; (vi) have a Periodic Rate Cap not less than that
of
the Deleted Mortgage Loan; (vii) comply with each representation and warranty
set forth in Sections 3.01 and 3.02; and (viii) be a REMIC Eligible Mortgage
Loan.
Rating
Agency:
Any of
Fitch, Inc., Xxxxx’x Investors Service, Inc. or Standard & Poor’s Rating
Services, A Division of The XxXxxx-Xxxx Companies, Inc., or their respective
successors, as applicable, or such other applicable rating agency.
Reconstitution:
Any
Pass-Through Transfer, Whole Loan Transfer or Agency Transfer.
Reconstitution
Agreement:
The
agreement or agreements entered into by the Purchaser and/or certain third
parties on the Reconstitution Date(s) with respect to any or all of the Mortgage
Loans in a particular Mortgage Loan Package, in connection with a Pass-Through
Transfer, an Agency Transfer or a Whole Loan Transfer.
Reconstitution
Date:
The
date or dates on which any or all of the Mortgage Loans serviced under this
Agreement shall be removed from this Agreement and reconstituted as part
of a
Pass-Through Transfer pursuant to Section 8.01.
Regulation
AB:
Subpart
229.1100 - Mortgage Loan Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject
to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Mortgage
Loan-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg.
1,506,
1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided
by the Commission or its staff from time to time.
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REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code.
REMIC
Documents:
The
document or documents creating and governing the administration of a
REMIC.
REMIC
Eligible Mortgage Loan:
A
Mortgage Loan held by a REMIC which satisfies and/or complies with all
applicable REMIC Provisions.
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
Internal Revenue Code of 1986, as it may be amended from time to time or
any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto, and related provisions, and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be
in
effect from time to time.
Remittance
Date:
The
24th day (or if such 24th day is not a Business Day, the first Business Day
immediately following) of any month.
REO
Disposition:
The
final sale by the Company of any REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section 5.16.
REO
Property:
A
Mortgaged Property acquired by the Company on behalf of the Purchasers through
foreclosure or by deed in lieu of foreclosure, as described in Section
5.16.
Repurchase
Price:
As
defined in the related Purchase Price and Terms Letter.
SAIF:
The
Savings Association Insurance Fund, or any successor thereto.
Second
Lien Mortgage Loan:
A
Mortgage Loan secured by a second lien on the related Mortgaged
Property.
Securities
Act:
The
Securities Act of 1933, as amended.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses other
than Monthly Advances (including reasonable attorneys’ fees and disbursements)
incurred in the performance by the Company of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration
and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of
any
REO Property and (d) compliance with the obligations under this Agreement,
including without limitation, Sections 5.01, 5.02, 5.08, 5.10, 5.13, 5.14,
5.15,
and 5.16.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Purchaser
shall
pay to the Company, which shall, for a period of one full month, be 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,
computed on the basis of the same principal amount and period respecting
which
any related interest payment on a Mortgage Loan is computed. The obligation
of
the 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, Condemnation Proceeds and Insurance
Proceeds, to the extent permitted by Section 5.05) of such Monthly Payment
collected by the Company.
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Servicing
Fee Rate:
0.50%,
or such other amount as set forth in the related Purchase Price and Terms
Letter.
Servicing
File:
With
respect to each Mortgage Loan the file retained by the Company consisting
of
originals of all documents in the Mortgage File, which are not delivered
to the
Purchaser or the Purchaser’s designee, and copies of the Mortgage Loan Documents
listed on Exhibit
B
hereto.
Stated
Principal Balance:
As to
each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the
related Cut-off Date after giving effect to payments of principal due on
or
before such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal or advances in lieu
thereof.
Subservicer:
Any
Subservicer which is subservicing the Mortgage Loans pursuant to a Subservicing
Agreement. Any subservicer shall meet the qualifications set forth in Section
5.01.
Subservicing
Agreement:
An
agreement between the Company and a Subservicer for the servicing of the
Mortgage Loans.
Texas
Home Equity Loan:
An
extension of credit described in Section 50(a)(6), Article XVI of the Texas
Constitution.
Underwriting
Guidelines:
The
underwriting guidelines of the Company attached as Annex 3 to the related
Acknowledgment and Conveyance Agreement.
Whole
Loan Transfer:
The
sale or transfer of some or all of the Mortgage Loans to a third party purchaser
in a whole loan transaction pursuant to a loan purchase, warranties and
servicing agreement or a participation and servicing agreement, or similar
agreement, retaining the Company as “servicer” thereunder.
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12 -
ARTICLE
II.
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS
AND RECORDS; CUSTODIAL AGREEMENT
DELIVERY
OF DOCUMENTS
Section
2.01. Conveyance
of Mortgage Loans; Possession of Mortgage Files; Maintenance of Servicing
Files.
On
each
Closing Date, the Company, simultaneously with the execution and delivery
of the
related Acknowledgment and Conveyance Agreement, does hereby sell, transfer,
assign, set over and convey to the Purchaser, without recourse, but subject
to
the terms of this Agreement, all right, title and interest of the Company
in and
to the Mortgage Loans included in the related Mortgage Loan Package, together
with Mortgage Files and all rights and obligations arising under the documents
contained therein for each Mortgage Loan. Pursuant to Section 2.03 hereof,
on or
prior to each Closing Date, the Company shall deliver the Mortgage Loan
Documents for each Mortgage Loan included in the related Mortgage Loan Package
to the Purchaser or its designee. The contents of each Servicing File required
to be retained by the Company to service the Mortgage Loans included in the
related Mortgage Loan Package pursuant to this Agreement and thus not delivered
to the Purchaser are and shall be held in trust by the Company for the benefit
of Purchaser as the owner thereof. The Company’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 this Agreement,
and such retention and possession by the Company shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, and the contents
of the Mortgage File and Servicing File are vested in the Purchaser and the
ownership of all records and documents required to be included in the Mortgage
File and Servicing File but not delivered or received until after the Closing
Date, shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Company at the will of the Purchaser in such
custodial capacity only. The Servicing File retained by the Company pursuant
to
this Agreement shall be appropriately marked to clearly reflect the sale
of the
related Mortgage Loan to the Purchaser. The Company shall release from its
custody the contents of any Servicing File retained by it only in accordance
with this Agreement, except when such release is required in connection with
a
repurchase of any such Mortgage Loan pursuant hereto.
Section
2.02. Books
and Records; Transfers of Mortgage Loans.
Record
title to each Mortgage and the related Mortgage Note as of the applicable
Closing Date shall be in the name of the Purchaser or as the Purchaser shall
designate. All rights arising out of the Mortgage Loans including, but not
limited to, all funds received by the Company after the related Cut-off Date
on
or in connection with a Mortgage Loan shall be vested in the Purchaser;
provided, however, that all funds received on or in connection with a Mortgage
Loan shall be received and held by the Company in trust for the benefit of
the
Purchaser as owner of the Mortgage Loans, for the sole purpose of servicing
the
Mortgage Loans.
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13 -
The
sale
of each Mortgage Loan shall be reflected on the Company’s balance sheet and
other financial statements as a sale of assets by the Company. The Company
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.
The
Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Purchaser or its designee the related Servicing
File during the time the Purchaser retains ownership of a Mortgage Loan and
thereafter in accordance with applicable laws and regulations.
Section
2.03. Custodial
Agreement; Delivery of Documents.
Not
later
than the date set forth in the related Purchase Price and Terms Letter, the
Company shall deliver to the Custodian those Mortgage Loan Documents as required
by this Agreement with respect to each Mortgage Loan in the related Mortgage
Loan Package, a list of which is attached as Exhibit
B
hereto.
On
or
prior to the related Closing Date, the Custodian shall have certified its
receipt of all such Mortgage Loan Documents required to be delivered pursuant
to
the Custodial Agreement, as evidenced by the initial certification of the
Custodian in the form annexed to the Custodial Agreement. The Purchaser shall
be
responsible for maintaining the Custodial Agreement and shall pay all fees
and
expenses of the Custodian. On
the
related Closing Date, the Company shall release any interest that it has
in the
Mortgage Loan Documents upon its receipt of the Purchase Price for the Mortgage
Loans.
Within
ninety (90) days of receipt by the Company of any notice from the Purchaser
or
the Custodian that any of the Mortgage Loan Documents is missing or appears
to
be unrelated to the Mortgage Loans identified in the Mortgage Loan Schedule
(each, a “Material
Defect”),
the
Company shall cure such Material Defect. If the Company does not so cure
such
Material Defect, it shall, if such Material Defect would under Accepted
Servicing Practices reasonably be expected to materially and adversely affect
the value of the Mortgage Loan, repurchase the related Mortgage Loan at the
Repurchase Price.
The
Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 5.01 or 7.01 in a timely manner upon
their execution, provided, however, that the Company, in the event such document
was submitted for recordation, shall provide the Custodian with a certified
true
copy of any such document in a timely manner and shall provide the original
of
such document submitted for recordation within 270 days of its submission
for
recordation.
Notwithstanding
anything to the contrary set forth in this Section 2.03, in the event any
Mortgage Loan Document is missing due to a delay caused by the public recording
office in returning any such Mortgage Loan Document, upon the written request
of
the Purchaser, the Company shall deliver to the Custodian, within 270 days
of
the related Closing Date, an Officer’s Certificate which shall (i) identify the
missing Mortgage Loan Document, and (ii) state that the Mortgage Loan Document
has not been delivered to the Custodian due solely to a delay caused by the
public recording office, and (iii) specify the date the applicable recorded
document most likely will be delivered to the Custodian. The Company shall
make
best efforts to deliver to the Custodian the applicable recorded document
by the
date specified in (iv) above. An extension of the date specified in (iv)
above
may be requested from the Purchaser, which consent shall not be unreasonably
withheld.
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14 -
The
Company shall deliver a final Mortgage Loan Schedule for the Mortgage Loans
included in any Mortgage Loan Package to be purchased on any Closing Date
to the
Purchaser no later than the date set forth in the related Purchase Price
and
Terms Letter.
Section
2.04. MERS
Designated Mortgage Loans.
With
respect to each MERS Designated Mortgage Loan, the Company shall, within
a
reasonable time following the related Closing Date, designate the Purchaser
as
the Investor and the Custodian as custodian, and no Person shall be listed
as
Interim Funder on the MERS System.
ARTICLE
III.
PURCHASE
PRICE
The
Purchase Price shall be the percentage of par as stated in the related Purchase
Price and Terms Letter (subject to the adjustments as provided therein),
multiplied by the aggregate scheduled principal balance, as of the related
Cut-off Date, of the Mortgage Loans listed on the related Mortgage Loan
Schedule, after application of payments of principal received on or before
the
related Cut-off Date. The initial principal amount of the Mortgage Loans
shall
be the aggregate scheduled principal balance of such Mortgage Loans, so computed
as of the related Cut-off Date. On each Closing Date, the Purchaser shall
deduct
from the Purchase Price proceeds certain costs and expenses set forth in
Article
XIII or in the related Purchase Price and Terms Letter.
In
addition to the Purchase Price as described above, the Purchaser shall pay
to
the Company, on the related Closing Date, accrued interest on the initial
principal amount of the Mortgage Loans at the weighted average Mortgage Loan
Remittance Rate from the related Cut-off Date through the day prior to the
related Closing Date, inclusive.
The
Purchase Price shall be paid on the related Closing Date by wire transfer
of
immediately available federal funds.
The
Purchaser shall be entitled to (i) all principal received after the related
Cut-off Date, (ii) all other recoveries of late charges, assumption fees
or
other charges collected after the related Cut-off Date, and (iii) all payments
of interest on the Mortgage Loans at the Mortgage Interest Rate. The principal
balance of each Mortgage Loan as of the related Cut-off Date is determined
after
application of payments of principal received on or before the related Cut-off
Date. All payments of principal and interest (minus interest at the Servicing
Fee Rate) due on the first day of the month after the related Cut-off Date
shall
belong to the Purchaser.
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15 -
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES;
REMEDIES
AND BREACH
Section
4.01. Company
Representations and Warranties.
The
Company, as a condition to the consummation of the transactions contemplated
hereby, makes the following representations and warranties to the Purchaser
that, as of each Closing Date:
(a) Due
Organization and Authority.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization 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 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 Company, and in any event the
Company is in good standing with the laws of each 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; the Company
has the full corporate power and authority to execute and deliver this Agreement
and to perform in accordance herewith; the execution, delivery and performance
of this Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Company and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the
Company; and all requisite corporate action has been taken by the Company
to
make this Agreement valid and binding upon the Company in accordance with
its
terms;
(b) Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Company, and the transfer, assignment
and
conveyance of the Mortgage Notes and the Mortgages by the Company 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 of the Mortgage
Loans by the Company, the sale of the Mortgage Loans to the Purchaser or
the
transactions contemplated hereby, 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 Company’s charter or
by-laws or any legal restriction or any agreement or instrument to which
the
Company 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 Company
or
its property is subject, or impair the ability of the Purchaser to realize
on
the Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability
to Service.
The
Company is an approved seller/servicer of conventional residential mortgage
loans for Xxxxxx Xxx and Xxxxxxx Mac, with the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans
of the
same type as the Mortgage Loans. The Company is in good standing to sell
mortgage loans to and service mortgage loans for Xxxxxx Mae and Xxxxxxx Mac,
and
no event has occurred, including but not limited to a change in insurance
coverage, which would make the Company unable to comply with Xxxxxx Mae and
Xxxxxxx Mac eligibility requirements or which would require notification
to
either Xxxxxx Mae and Xxxxxxx Mac;
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16 -
(e) Reasonable
Servicing Fee.
The
Company acknowledges and agrees that the Servicing Fee, as calculated at
the
Servicing Fee Rate, represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by the Company,
for
accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement.
(f) Ability
to Perform.
The
Company 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
Company is solvent and the sale of the Mortgage Loans will not cause the
Company
to become insolvent. The sale of the Mortgage Loans is not undertaken with
the
intent to hinder, delay or defraud any of the Company’s creditors;
(g) No
Litigation Pending.
There
is no action, suit, proceeding or investigation pending or, to the Company’s
knowledge, threatened against the Company 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 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 this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Company contemplated herein, or which
would be likely to impair materially the ability of the Company to perform
under
the terms of this Agreement;
(h) No
Consent Required.
No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Company
of
or compliance by the Company 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 to the Purchaser 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 not intentionally selected in a manner so as to affect
adversely the interests of the Purchaser;
(j) No
Untrue Information.
Neither
this Agreement nor any statement, report or other document created and furnished
by the Company pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of fact or omits to state
a
fact necessary to make the statements contained therein not
misleading;
(k) Sale
Treatment.
The
Company has determined that the disposition of the Mortgage Loans pursuant
to
this Agreement will be afforded sale treatment for accounting and tax
purposes;
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17 -
(l) No
Broker Fees.
The
Company has not dealt with any broker, agent or other person that may be
entitled to any commission or compensation in connection with the sale of
the
Mortgage Loans;
(m) Financial
Statements.
The
Company 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 at the
end of
each such period of the Company 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.
There
has
been no change in the business, operations, financial condition, properties
or
assets of the Company since the date of the Company’s financial statements that
would have a material adverse effect on its ability to perform its obligations
under this Agreement;
(n) Fair
Consideration.
The
consideration received by the Company upon the sale of the Mortgage Loans
under
this Agreement constitutes fair consideration and reasonably equivalent value
for the Mortgage Loans;
(o) MERS.
The
Company is a member of MERS in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the MERS Designated Mortgage Loans for as long as such Mortgage Loans
are
registered with MERS; and
(p) Company’s
Origination.
The
Company’s decision to originate any mortgage loan or to deny any mortgage loan
application is an independent decision based upon the related 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.
Section
4.02. Representations
and Warranties Regarding Individual Mortgage Loans.
As
to
each Mortgage Loan, the Company hereby represents and warrants to the Purchaser
that as of the related Closing Date:
(a) Mortgage
Loans as Described.
The
information set forth in the related Mortgage Loan Schedule is complete,
true
and correct in all material respects;
(b) Payments
Current.
All
payments required to be made up to the related Closing Date on the Mortgage
Loan
under the terms of the Mortgage Note have been made and credited. Unless
otherwise set forth in the related Purchase Price and Terms Letter, (i) no
payment required under the Mortgage Loan is delinquent nor has any payment
under
the Mortgage Loan been delinquent for thirty (30) days or more in the twelve
(12) months preceding such Closing Date and (ii) no payment required under
the
Mortgage Loan is delinquent;
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18 -
(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 Company 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;
(d) Original
Terms Unmodified.
The
terms of the Mortgage Note and Mortgage have not been impaired, waived, altered
or modified in any respect, except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser and which
has
been or will be delivered to the Purchaser or its designee in accordance
with
this Agreement. The substance of any such waiver, alteration or modification
has
been approved by the issuer of any PMI Policy (if any) and the title insurer,
to
the extent required by the policy, and its terms are reflected on the related
Mortgage Loan Schedule. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement approved by the issuer
of any
related PMI Policy (if any) and the title insurer, to the extent required
by the
policy, and which assumption agreement is part of the Mortgage Loan File
delivered to the Purchaser or its designee 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, or subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, and no such right of rescission, set-off, counterclaim
or
defense has been asserted with respect thereto;
(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. If upon
origination of the Mortgage Loan, the Mortgaged Property was in an area
identified in the Federal Register by the Federal Emergency Management Agency
as
having special flood hazards a life-of-loan flood insurance policy meeting
the
requirements of the current guidelines of the Federal Flood Insurance
Administration is in effect which policy conforms to the requirements of
Xxxxxx
Mae and Xxxxxxx Mac. Such flood insurance shall be with a Qualified Insurer.
All
individual insurance policies contain a standard mortgagee clause naming
the
Company 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
and is in full force and effect. The Company has not engaged in, and has
no
knowledge of the Mortgagor or any subservicer 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
Company;
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19 -
(g) Compliance
with Applicable Laws.
At
origination, any and all requirements of any applicable federal, state or
local
law including, without limitation, usury, truth-in-lending, real estate
settlement procedures, anti-predatory and abusive lending, consumer credit
protection, equal credit opportunity or 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 applicable
laws
or regulations;
(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
Company 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 Company 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 or leasehold estate located in
the
state identified in the related 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 manufactured dwelling permanently affixed to the ground.
None
of the Mortgaged Properties are rural properties, mobile homes, log homes,
geodesic homes or other unique property. No portion of the Mortgaged Property
is
used for commercial purposes, and since the date of origination, no portion
of
the Mortgaged Property has been used for commercial purposes;
(j) Pool
Characteristics.
The
pool characteristics with respect to the Mortgage Loans included in the related
Mortgage Loan Package are set forth in the related Acknowledgment and Conveyance
Agreement and are true and complete in all material respects;
(k) Valid
First or Second Lien.
With
respect to any First Lien Mortgage Loan, the related Mortgage is a valid,
subsisting, enforceable and perfected first lien on the Mortgaged Property,
and,
with respect to any Second Lien Mortgage Loan, the related Mortgage is a
valid,
subsisting, enforceable and perfected second lien on the Mortgaged Property,
including all buildings on the Mortgaged Property, and all additions,
alterations and replacements made at any time with respect to the foregoing.
Such lien is free and clear of all adverse claims, liens and encumbrances
having
priority over the first or second lien, as applicable, of the Mortgage subject
only to:
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20 -
(i) with
respect to any Second Lien Mortgage Loan, the related First Lien Mortgage
Loan;
(ii) the
lien
of current real property taxes and assessments not yet due and
payable;
(iii) covenants,
conditions and restrictions, rights of way, easements and other matters of
the
public record as of the date of recording acceptable to mortgage lending
institutions generally and specifically referred to in the lender’s title
insurance policy delivered to the originator of the Mortgage Loan and
(i) referred to or to otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (ii) which do not adversely affect the
appraised value of the Mortgaged Property set forth in such appraisal;
and
(iv) 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 and enforceable (A) first lien and first priority security interest
with
respect to each First Lien Mortgage Loan, or (B) second lien and second priority
security interest with respect to each Second Lien Mortgage Loan, in either
case, on
the
property described therein and the Company has full right to sell and assign
the
same to the Purchaser;
(l) 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 and the Mortgage
and
any other related agreement had legal capacity to enter into the Mortgage
Loan
and to execute and deliver the Mortgage Note and the Mortgage and any other
related agreement, and the Mortgage Note and the Mortgage and any other related
agreement have been duly and properly executed by such parties. The documents,
instruments and agreements submitted for loan underwriting were not falsified
by
the Company, or, to the best of the Company’s knowledge, any other party, 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. The Company 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;
(m) No
Fraud.
No
error, omission, misrepresentation, negligence, fraud or similar occurrence
with
respect to a Mortgage Loan has taken place on the part of the Company and,
to
the best of the Company’s knowledge, the Mortgagor, the appraiser, any builder
or developer, or any other party involved in the origination of the Mortgage
Loan or, in the application of any insurance in relation to such Mortgage
Loan;
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21 -
(n) 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;
(o) Ownership.
The
Company is the sole owner of record and holder of the Mortgage Loan. The
Mortgage Loan is not assigned or pledged, and the Company has good and
marketable title thereto, and has full right to transfer and sell the Mortgage
Loan therein 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;
(p) 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) (i) organized under the laws of such state,
(ii)
qualified to do business in such state, (iii) federal savings and loan
associations, savings banks or national banks having principal offices in
such
state, or (iv) not doing business in such state;
(q) Title
Insurance.
The
Mortgage Loan is covered by an ALTA lender’s title insurance policy or other
generally acceptable form of policy of insurance issued by a Qualified Insurer
qualified to do business in the jurisdiction where the Mortgaged Property
is
located, insuring the Company, its successors and assigns, as to the first
priority lien of the Mortgage with respect to First Lien Mortgage Loans and
as
to the second priority lien of the Mortgage with respect to Second Lien Mortgage
Loans in the original principal amount of the Mortgage Loan subject only
to the
exceptions contained in clauses (1), (2), (3) and (4) of the “Valid First or
Second Lien” representation of this Section 4.02, and with respect to each ARM
Mortgage Loan, 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
applicable 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 Company, its successors 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. No claims have been made under
such
lender’s title insurance policy, and no prior holder of the Mortgage, including
the Company, 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 Company;
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(r) No
Defaults.
There
is no default, breach, violation or event of acceleration existing under
the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any applicable grace or cure period, would
constitute a default, breach, violation or event of acceleration, and neither
the Company nor its predecessors have waived any default, breach, violation
or
event of acceleration. With respect to each Second Lien Mortgage Loan, (i)
the
First Lien Mortgage Loan is in full force and effect, (ii) there is no default,
breach, violation or event of acceleration existing under such prior mortgage
or
the related mortgage note, (iii) there is 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 of acceleration thereunder,
and
either (A) the prior mortgage contains a provision which allows or (B)
applicable law requires, the mortgagee under the Second Lien Mortgage Loan
to
receive notice of, and affords such mortgagee an opportunity to cure any
default
by payment in full or otherwise under the prior mortgage;
(s) 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;
(t) 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, no improvements on adjoining properties
to
which value was assigned encroach upon the Mortgaged Property and the value
of
the Mortgaged Property is not diminished by any improvements on adjoining
properties which encroach the Mortgaged Property. No improvement located
on or
being part of the Mortgaged Property is in violation of any applicable zoning
law or regulation;
(u) Origination;
Payment Terms.
At the
time the Mortgage Loan was originated, the originator was a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to Sections 203
and
211 of the National Housing Act or a savings and loan association, a savings
bank, a commercial bank or similar institution which is supervised and examined
by a Federal or State authority. The Mortgage Interest Rate is (a) with respect
to fixed rate Mortgage Loans, the fixed interest rate set forth in the Mortgage
Note and (b) with respect to ARM Mortgage Loans, adjusted on each Interest
Rate
Adjustment Date pursuant to the Mortgage Loan Documents and rounded as required
under Accepted Servicing Practices and subject to the Mortgage Interest Rate
Cap, the Periodic Rate Cap and the Lifetime Rate Cap. Except with respect
to any
Balloon Mortgage Loan as indicated on the related Mortgage Loan Schedule,
the
Mortgage Note is payable in equal monthly installments of principal and
interest, 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. The
Mortgage Interest Rate, as well as the Lifetime Rate Cap, the Periodic Rate
Cap
and the Mortgage Interest Rate Cap, are as set forth on the Mortgage Loan
Schedule. No ARM Mortgage Loan contains terms whereby the Mortgagor is permitted
to convert the Mortgage Loan to a fixed rate Mortgage Loan and no ARM Mortgage
Loan contains a negative amortization provision;
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23 -
(v) 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 the 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;
(w) Conformance
with Underwriting Guidelines; Underwriting Methodology.
The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
in
effect at the time the Mortgage Loan was originated. The Mortgage Note and
Mortgage are on forms acceptable to participants in the secondary mortgage
market for similar types of Mortgage Loans;
(x) Occupancy
of the Mortgaged Property.
As of
the related Closing Date, the Mortgaged Property was lawfully occupied under
applicable law and all inspections, licenses and certificates required to
be
made or issued with respect to all occupied portions of the Mortgaged Property
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.
The Mortgagor represented at the time of origination of the Mortgage Loan
that
the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary
residence, if applicable;
(y) 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 the “Valid First or Second
Lien” representation above;
(z) Loan-to-Value
Ratio; Combined Loan-to-Value Ratio.
No
Mortgage Loan has an LTV or a CLTV of greater than 100%;
(aa) Deeds
of Trust.
In the
event the Mortgage constitutes a deed of trust, a trustee, duly qualified
under
applicable law to serve as such, has been properly designated and currently
so
serves and is named in 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;
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24 -
(bb) Acceptable
Investment.
The
Company has no knowledge of any circumstances or conditions with respect
to the
Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit
standing that can reasonably be expected to cause private institutional
investors 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;
(cc) Ground
Leases.
a
Mortgaged Property is subject to, (i) the ground lease is assignable or
transferable; (ii) the ground lease will not terminate earlier than five
years
after the maturity date of the Mortgage Loan unless fee simple title will
vest
in the Mortgagor, an owner’s association or cooperative corporation at an
earlier date; (iii) the ground lease does not provide for termination of
the
lease in the event of lessee’s default without the mortgagee being entitled to
receive written notice of, and a reasonable opportunity to cure the default;
(iv) the ground lease permits the mortgaging of the related Mortgaged Property;
and (v) the ground lease protects the mortgagee’s interests in the event of a
property condemnation;
(dd) Delivery
of Mortgage Documents.
The
Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered by the Company under this Agreement have been or
will
be delivered to the Purchaser or its designee in accordance with this
Agreement;
(ee) Condominiums/Planned
Unit Developments.
If the
Mortgaged Property is a condominium unit or a planned unit development (other
than a de minimus planned unit development) such condominium or planned unit
development project meets Company’s
underwriting guidelines.
(ff) Manufactured
Homes.
With
respect to each Mortgage Loan secured by a manufactured home: (i) the
manufactured home is permanently affixed to a foundation which is suitable
for
the soil conditions of the site; (ii) all foundations, both perimeter and
interior, have footings that are located below the frost line; (iii) any
wheels,
axles and trailer hitches are removed from the manufactured home; (iv) the
Mortgage Loan is covered under a standard real estate title insurance policy
or
attorney’s title opinion or certificate that identified the manufactured home as
part of the real property and insures or indemnifies against any loss if
the
manufactured home is determined not to be part of the real property. In no
event
shall any Mortgage Loan be secured by a mobile home;
(gg) Due
on
Sale.
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 Mortgage thereunder;
(hh) Transfer
of Mortgage Loans.
If the
Mortgage Loan is not a MERS Designated Mortgage Loan, the Assignment of Mortgage
is in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(ii) 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 Company, 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 currently in effect 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;
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25 -
(jj) Consolidation
of Future Advances.
Any
future advances prior to the related 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 or readjustment
feature and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having the lien priority
as indicated on the Mortgage Loan Schedule 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;
(kk) Mortgaged
Property Undamaged.
There
is no proceeding pending or, to the best of the Company’s knowledge, 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;
(ll) Collection
Practices; Escrow Payments.
The
origination and collection practices used with respect to the Mortgage Loan
have
been in accordance with Accepted Servicing Practices, and have been in all
respects in compliance with all applicable laws and regulations and in all
material respects proper and prudent in the mortgage origination and servicing
business. With respect to escrow deposits and Escrow Payments (other
than with respect to Second Lien Mortgage Loans for which the mortgagee under
the prior mortgage lien is collecting Escrow Payments),
all
such payments are in the possession of the Company 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. No escrow deposits or Escrow
Payments or other charges or payments due the Company have been capitalized
under the Mortgage or the Mortgage Note. With respect to each ARM Mortgage
Loan,
all Mortgage Interest Rate adjustments have been made in compliance with
federal
law and the terms of the Mortgage Note. The index used for the adjustment
of the
Mortgage Interest Rate on each ARM Mortgage Loan is the Index. The Company
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 for the period on and prior to the
Closing Date. Any interest required to be paid pursuant to state, federal
and
local law has been properly paid and credited;
(mm) 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;
(nn) Servicemembers’
Relief Act.
The
Mortgagor has not notified the Company, and the Company has no knowledge
of any
relief requested or allowed to the Mortgagor under the Servicemembers’ Relief
Act or any other federal or state law that would have the effect of suspending
or reducing the Mortgagor’s payment obligations under a Mortgage Loan or that
would prevent or restrict the ability of the Servicer to commence or continue
with the foreclosure of the Mortgage Loan;
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(oo) Environmental
Matters.
The
Mortgaged Property is free from any and all toxic or hazardous substances
and
there exists no violation of any local, state or federal environmental law,
rule
or regulation. There is no pending action or proceeding directly involving
any
Mortgaged Property of which the Company is aware in which compliance with
any
environmental law, rule or regulation is an issue; and to the best of the
Company’s knowledge, nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation consisting a prerequisite
to
use and enjoyment of said property;
(pp) No
Construction Loans.
No
Mortgage Loan was made in connection with (i) the construction or rehabilitation
of a Mortgaged Property or (ii) facilitating the trade-in or exchange of
a
Mortgaged Property;
(qq) Insurance.
The
Company has caused to be performed any and all acts required by a mortgagee
to
preserve the rights and remedies of the Purchaser in any insurance policies
applicable to the Mortgage Loans including, without limitation, any necessary
notifications of insurers, assignments of policies or interests therein,
and
establishments of coinsured, joint loss payee and mortgagee rights in favor
of
the Purchaser; No action, inaction, or event has occurred and no state of
fact
exists or has existed that has resulted or will result in the exclusion from,
denial of, or defense to coverage under any applicable pool insurance policy,
special hazard insurance policy, PMI Policy (if any) or bankruptcy bond.
In
connection with the placement of any such insurance, no commission, fee,
or
other compensation has been or will be received by the Company or any designee
of the Company or any corporation in which the Company or any officer, director,
or employee had a financial interest at the time of placement of such
insurance;
(rr) Regarding
the Mortgagor.
The
Mortgagor is one or more natural persons;
(ss) Simple
Interest Mortgage Loans.
None of
the Mortgage Loans are simple interest Mortgage Loans;
(tt) Single
Premium Credit Life Insurance.
No
Mortgagor was required to purchase any credit life, disability, accident
or
health insurance product or debt cancellation agreement as a condition of
obtaining the extension of credit evidenced by the Mortgage Loan. No Mortgagor
obtained a prepaid single-premium credit life, disability, accident or health
insurance policy in connection with the origination of the Mortgage Loan.
No
proceeds from any Mortgage Loan were used to purchase single premium credit
insurance policies as part of the origination of, or as a condition to closing,
such Mortgage Loan;
(uu) Mortgagor
Disclosure.
All
points, fees and charges (including finance charges), whether or not financed,
assessed, collected or to be collected in connection with the origination
and
servicing of each Mortgage Loan have been disclosed in writing to the Mortgagor
in accordance with applicable state and federal law and regulation The
Mortgagor has executed a statement to the effect that the Mortgagor has received
all disclosure materials required by applicable law with respect to the making
of adjustable rate mortgage loans. The Company shall maintain such statement
in
the Mortgage File;
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(vv) Tax
Service Contract
Except
with respect to the Mortgage Loans for which Purchaser will obtain a tax
service
contract pursuant to Section 12.05, the Company has obtained a life of loan,
transferable real estate tax service on each Mortgage Loan and such contract
is
assignable to the Purchaser without cost;
(ww) Flood
Certification Contract.
Except
with respect to the Mortgage Loans for which Purchaser will obtain a flood
certification contract pursuant to Section 12.05, the Company has obtained
a
life of loan, transferable flood certification contract for each Mortgage
Loan
and such contract is assignable to the Purchaser or the Purchaser’s designee
without cost;
(xx) Recordation.
Each
original Mortgage was recorded and, except for those Mortgage Loans subject
to
MERS, all subsequent assignments of the original Mortgage (other than the
assignment to the Purchaser) have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as against
creditors of the Company, or is in the process of being recorded;
(yy) FICO
Scores.
The FICO
score of each Mortgage Loan is not less than what is set forth on the related
Mortgage Loan Schedule;
(zz) Prepayment
Premium.
With
respect to any Mortgage Loan that contains a provision permitting imposition
of
a premium upon a prepayment prior to maturity: (i) the prepayment premium
is
enforceable and will be enforced by the Company, (ii) the prepayment premium
is
permitted pursuant to federal, state and local law With respect to any Mortgage
Loan that contains a provision permitting imposition of a premium upon a
prepayment prior to maturity: (i) prior to the origination of such Mortgage
Loan, the Mortgagor agreed to such premium in exchange for a monetary benefit,
including but not limited to a rate or fee reduction, (ii) prior to the
origination of such Mortgage Loan, the Mortgagor was offered the option of
obtaining a mortgage loan that did not require payment of such a premium,
(iii)
the prepayment premium is disclosed to the Mortgagor in the Mortgage Loan
Documents pursuant to applicable state and federal law and notwithstanding
any
state or federal law to the contrary or clause (i) above, the Company shall
not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the Mortgagor’s default in making the loan payments
and (vi) the prepayment premium is set forth on the related Mortgage Loan
Schedule;
(aaa) Predatory
Lending Regulations.
No
Mortgage Loan is subject to the requirements of the Home Ownership and Equity
Protection Act of 1994. No Mortgage Loan is classified as a “high cost,”
“threshold,” “abusive” or “predatory” loan or a similarly defined loan under any
applicable state, federal or local law (or similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny
and
additional legal assignee liability for residential mortgage loans having
high
interest rates, points and/or fees).
Each Mortgage Loan at the time it was made complied in all material respects
with applicable local, state, and federal laws, including, but not limited
to,
all applicable anti-predatory and abusive lending laws. No
Mortgage Loan is classified as “High Cost” as set forth in the current Standard
& Poor’s LEVELS® Glossary;
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(bbb) Higher
Cost Products.
No
Mortgagor was encouraged or required to select a Mortgage Loan product offered
by the Mortgage Loan’s originator which is a higher cost product designed for
less creditworthy Mortgagors, unless at the time of the Mortgage Loan’s
origination, such Mortgagor did not qualify taking into account credit history
and debt to income ratios for a lower cost credit product then offered by
the
Mortgage Loan’s originator or any Affiliate of the Mortgage Loan’s originator.
If, at the time of loan application, the Mortgagor may have qualified for
a
lower cost credit product then offered by any mortgage lending Affiliate
of the
Mortgage Loan’s originator, the Mortgage Loan’s originator referred the
Mortgagor’s application to such Affiliate for underwriting
consideration;
(ccc) Origination
Practices.
No
predatory or deceptive lending practices or deceptive trade practices,
including, without limitation, the extension of credit without regard to
the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
(ddd) Texas
Home Equity Loans.
With
respect to any Mortgage Loan which is a Texas Home Equity Loan, any and all
requirements of Section 50, Article XVI of the Texas Constitution applicable
to
Texas Home Equity Loans which were in effect at the time of the origination
of
the Mortgage Loan have been complied with. Specifically, without limiting
the
generality of the foregoing, any fees paid in connection with such Mortgage
Loan
in order for the Mortgagor to receive a reduced interest rate are not required
to be included in the calculation of the aggregate fees pursuant to Section
50(a)(6)(E) of the Texas Constitution;
(eee) Credit
Reporting.
The
Company has caused to be fully furnished, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information (i.e., favorable and unfavorable) on its Mortgagor credit files
to
Equifax, Experian, and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis. The
Company shall have transmitted full-file credit reporting data for each Mortgage
Loan pursuant to Xxxxxx Mae Guide Announcement 95-19, and, for each Mortgage
Loan, the Company shall have reported one of the following statuses each
month
as follows: new origination, current, delinquent (30-, 60-, 90-days, etc.),
foreclosed, or charged-off;
(fff) Second
Lien Mortgage Loans.
Either
(a) no consent for the Second Lien Mortgage Loan is required by the holder
of
the related first lien or (b) such consent has been obtained and is contained
in
the Mortgage File; With respect to any Second Lien Mortgage Loan, the Company
has not received notice of: (a) any proceeding for the total or partial
condemnation of any Mortgaged Property, (b) any subsequent, intervening
mortgage, lien, attachment, lis pendens or other encumbrance affecting any
Mortgaged Property or (c) any default under any mortgage, lien or other
encumbrance senior to each Mortgage; With respect to any Second Lien Mortgage
Loan, where required or customary in the jurisdiction in which the Mortgaged
Property is located, the original lender has filed of record a request for
notice of any action by the senior lienholder under the related First Lien
Mortgage Loan, and the original lender has notified any senior lienholder
in
writing of the existence of the Second Lien Mortgage Loan and requested
notification of any action to be taken against the Mortgagor by the senior
lienholder; no Second Lien Mortgage Loan is a “home equity line of credit”. As
of the related Closing Date, the Company has not received a notice of default
of
a First Lien Mortgage Loan which has not been cured;
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29 -
(ggg) Balloon
Mortgage Loans.
No
Mortgage Loan is a Balloon Mortgage Loan that has an original stated maturity
of
less than seven (7) years;
(hhh) Imaged
Documents.
Any
document to be included in the Mortgage File that is delivered as an imaged
document (and not accompanied by the original underlying document) represents
a
true, complete, and correct copy of the original document in all respects,
including, but not limited to, all signatures conforming with signatures
contained in the original document, no information having been added or deleted,
and no imaged document having been manipulated or altered in any manner.
Each
imaged document is clear and legible in all material respects, including,
but
not limited to, accurate reproductions of photographs. The destruction by
the
Company of any original document underlying an imaged document or the inability
of Company to produce a copy of such original document upon request shall
not
cause (i) any material delay in the enforcement of the Mortgage Loan resulting
in a loss to the Purchaser, (ii) any inability to collect all amounts due
under
the Mortgage Loan, including without limitation, in connection with a
foreclosure or other sale of the Mortgaged Property, or (iii) any claims
from
holders of mortgage-backed securities collateralized by the Mortgage Loan;
(iii) FEMA
Designations.
Except
for a “Certified Mortgaged Property” (as defined below), no Mortgaged Property
(i) is in a zip code declared by the Federal Emergency Management Agency
(“FEMA”) as a federal disaster area, (ii) has been declared by FEMA as being an
“Individual Assistance” property or “Category 1” property, or such similar
term(s) or classification(s) that may be used by FEMA from time to time,
as
identified by the Purchaser prior to the related Closing Date (a “FEMA
Property”). A “Certified Mortgaged Property” means a FEMA Property for which the
Purchaser receives from the Company a certified property inspection acceptable
to the Purchaser that evidences that such FEMA Property has not been materially
damaged at any time prior to the date of such report;
(jjj) REMIC
Status.
The
Mortgage Loan is a qualified mortgage for inclusion in a “real estate mortgage
investment conduit” for federal income tax purposes; and
(kkk) Compliance
with Anti-Money Laundering Laws.
The
Company has established an anti-money laundering compliance program to the
extent required by applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2003, and the laws and
regulations administered by the U.S. Department of Treasury’s Office of Foreign
Assets Control (“OFAC”),
which
prohibit dealings with certain countries, territories, entities and individuals
named in OFAC’s Sanction Programs and on the Specially Designated Nationals and
Blocked Persons List. The Mortgage Loans have been originated, and documentation
related thereto shall be maintained, in material compliance with such program.
Section
4.03. Remedies
for Breach of Representations and Warranties.
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(a) It
is
understood and agreed that the representations and warranties set forth in
Sections 4.01 and 4.02 shall survive the sale of the Mortgage Loans to the
Purchaser and the delivery of the Mortgage Loan Documents to the Purchaser
(or
its designee) 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 Company or the Purchaser of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the value of the Mortgage Loans or the interest of the Purchaser, or which
materially and adversely affects the interests of Purchaser in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan (in the case of any of the foregoing, a “Breach”), the
party discovering such Breach shall give prompt written notice to the other.
Within 90 days of the earlier of either discovery by or notice to the Company
of
any Breach of a representation or warranty, the Company shall use its best
efforts to promptly cure such Breach in all material respects and, if such
Breach cannot be cured, the Company shall repurchase such Mortgage Loan at
the
Repurchase Price.
In
the
event that a Breach shall involve any representation or warranty of Company
set
forth in Section 4.01 and such Breach cannot be cured within 90 days of the
earlier of either discovery by or notice to the Company of such Breach, all
of
the Mortgage Loans shall, as the Purchaser’s option, be repurchased by the
Company at the Repurchase Price. However, if the Breach shall involve a
representation or warranty set forth in Section 4.02 and the Company discovers
or receives notice of any such Breach within 120 days of the related Closing
Date, the Company shall, at the Purchaser’s option and provided that the Company
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 Company has no Qualified Substitute Mortgage
Loan,
it shall repurchase the deficient Mortgage Loan.
(b) With
respect to those representations and warranties which are made to the best
of
the Company’s knowledge (except with respect to the “No Fraud” representation
and warranty contained in Section 4.02), if it is discovered by the Company
or
the Purchaser that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value
of the
related Mortgage Loan or the interest of the Purchaser (or which materially
and
adversely affects the value of a Mortgage Loan or the interests of the Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan), notwithstanding the Company’s lack of
knowledge with respect to the substance of such representation and warranty,
such inaccuracy shall be deemed a breach of the applicable representation
and
warranty.
(c) Any
repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions
of
this Section 4.03 shall be accomplished by wire transfer of the amount of
the
Repurchase Price to the Purchaser in accordance with the Purchaser’s
instructions.
(d) At
the
time of repurchase or substitution, the Purchaser and the Company shall arrange
for the reassignment of the Deleted Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to
the
Deleted Mortgage Loan. In the event of a repurchase or substitution, the
Company
shall, simultaneously with such reassignment, give written notice to the
Purchaser that such repurchase or substitution has taken place, and the related
Mortgage Loan Schedule shall be deemed amended 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 Company
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 Company shall effect such substitution
by delivering to the Custodian for such Qualified Substitute Mortgage Loan
the
documents required by Section 2.03. No substitution will be made in any calendar
month after the Determination Date for such month. The Company shall deposit
in
the Custodial Account the Monthly Payment less the Servicing Fee due 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 Company.
For the month of substitution, distributions to Purchaser shall include the
Monthly Payment due on any Deleted Mortgage Loan in the month of substitution,
and the Company shall thereafter be entitled to retain all amounts subsequently
received by the Company in respect of such Deleted Mortgage Loan.
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For
any
month in which the Company substitutes a Qualified Substitute Mortgage Loan
for
a Deleted Mortgage Loan, the Company 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 Company in the month of substitution pursuant to Section
5.01. Accordingly, on the date of such substitution, the Company shall deposit
from its own funds into the Custodial Account an amount equal to the amount
of
such shortfall.
(e) In
addition to the repurchase obligation set forth herein, the Company shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, including without limitation, 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 any representation or warranty made
by the
Company. It is understood and agreed that the obligations of the Company
set
forth in this Section 4.03 to cure, repurchase or substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in this Section
4.03
constitute the sole remedies of the Purchaser respecting a Breach of the
foregoing representations and warranties.
Any
cause
of action against the Company relating to or arising out of the Breach of
any
representations and warranties made in Sections 4.01 and 4.02 shall accrue
as to
any Mortgage Loan upon (i) discovery of such Breach by the Purchaser or notice
thereof by the Company to the Purchaser, (ii) failure by the Company to cure
such Breach within the applicable cure period or repurchase such Mortgage
Loan
as specified above, and (iii) demand upon the Company by the Purchaser for
compliance with this Agreement.
Section
4.04. Restrictions
and Requirements Applicable in the Event that a Mortgage Loan is Acquired
by a
REMIC.
In
the
event that any Mortgage Loan is held by a REMIC, notwithstanding any contrary
provision of this Agreement, the following provisions shall be applicable
to
such Mortgage Loan:
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(a) Repurchase
of Mortgage Loans.
With
respect to any Mortgage Loan that is not in default or as to which no default
is
imminent, no repurchase or substitution pursuant to Section 4.03 shall be
made,
unless, if so required by the applicable REMIC Documents the Company has
obtained an Opinion of Counsel to the effect that such repurchase will not
(i) result in the imposition of taxes on “prohibited transactions” of such
REMIC (as defined in Section 860F of the Code) or otherwise subject the REMIC
to
tax, or (ii) cause the REMIC to fail to qualify as a REMIC at any
time.
(b) General
Servicing Obligations.
The
Company shall sell any REO Property within three years after its acquisition
by
the REMIC unless (i) the Company applies for an extension of such
three-year period from the Internal Revenue Service pursuant to the REMIC
Provisions and Code Section 856(e)(3), in which event such REO Property shall
be
sold within the applicable extension period, or (ii) the Company obtains
for the Purchaser an Opinion of Counsel, addressed to the Purchaser and the
Company, to the effect that the holding by the REMIC of such REO Property
subsequent to such three year period will not result in the imposition of
taxes
on “prohibited transactions” as defined in Section 860F of the Code or cause the
REMIC to fail to qualify as a REMIC under the REMIC Provisions or comparable
provisions of relevant state laws at any time. The Company shall manage,
conserve, protect and operate each REO Property for the Purchaser solely
for the
purpose of its prompt disposition and sale in a manner which does not cause
such
REO Property to fail to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) or result in the receipt by the REMIC of any “income from
non-permitted assets” within the meaning of Section 860F(a)(2)(B) of the Code or
any “net income from foreclosure property” which is subject to taxation under
Section 860G(a)(1) of the Code. Pursuant to its efforts to sell such REO
Property, the Company shall either itself or through an agent selected by
the
Company protect and conserve such REO Property in the same manner and to
such
extent as is customary in the locality where such REO Property is located
and
may, incident to its conservation and protection of the interests of the
Purchaser, rent the same, or any part thereof, as the Company deems to be
in the
best interest of the Company and the Purchaser for the period prior to the
sale
of such REO Property; provided, however, that any rent received or accrued
with
respect to such REO Property qualifies as “rents from real property” as defined
in Section 856(d) of the Code.
(c) Additional
Covenants.
In
addition to the provision set forth in this Section 4.04, if a REMIC election
is
made with respect to the arrangement under which any of the Mortgage Loans
or
REO Properties are held, then, with respect to such Mortgage Loans and/or
REO
Properties, and notwithstanding the terms of this Agreement, the Company
shall
not take any action, cause the REMIC to take any action or fail to take (or
fail
to cause to be taken) any action that, under the REMIC Provisions, if taken
or
not taken, as the case may be, could (i) endanger the status of the REMIC
as a REMIC or (ii) result in the imposition of a tax upon the REMIC
(including but not limited to the tax on “prohibited transactions” as defined in
Section 860F(a)(2) of the Code and the tax on “contributions” to a REMIC set
forth in Section 860G(d) of the Code) unless the Company has received an
Opinion
of Counsel (at the expense of the party seeking to take such action) to the
effect that the contemplated action will not endanger such REMIC status or
result in the imposition of any such tax.
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Section
4.05. Pre-
Closing Due Diligence.
The
Purchaser shall have the right to review the portion of the Mortgage Files
as
set forth in the related Purchase Price and Terms Letter and reject any Mortgage
Loan in accordance with the terms set forth therein. Any rejected Mortgage
Loan
shall be removed from the terms of this Agreement. The Company shall make
available all files required by Purchaser in order to complete its review.
Any
review performed by the Purchaser prior to the Closing Date does not limit
the
Purchaser’s rights or the Company’s obligations under this Agreement thereafter.
ARTICLE
V.
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
5.01. Company
to Act as Servicer.
The
Company, as an independent contractor, shall service and administer the Mortgage
Loans in the related Mortgage Loan Package from and after each Closing Date
and
shall have full power and authority, acting alone, to do any and all things
in
connection with such servicing and administration which the Company may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices.
Consistent
with the terms of this Agreement, the Company may waive, modify or vary any
term
of any Mortgage Loan or consent to the postponement of strict compliance
with
any such term or in any manner grant indulgence to any Mortgagor if in the
Company’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchasers,
provided, however, that the Company shall not make any future advances with
respect to a Mortgage Loan and (unless the Mortgagor is in default with respect
to the Mortgage Loan or such default is, in the judgment of the Company,
imminent and the Company has obtained the prior written consent of the
Purchaser) the Company shall not permit any modification of any material
term of
any Mortgage Loan including any modifications that would change the Mortgage
Interest Rate, defer or forgive the payment of principal or interest, reduce
or
increase the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan. In the
event
of any such modification which permits the deferral of interest or principal
payments on any Mortgage Loan, the Company shall, on the Business Day
immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 6.03, the difference
between (a) such month’s principal and one month’s interest at the Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and
(b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant
to
Section 6.03. Without limiting the generality of the foregoing, the Company
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself and the Purchasers, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. If reasonably required by the Company, the Purchaser
shall
furnish the Company with any powers of attorney and other documents necessary
or
appropriate to enable the Company to carry out its servicing and administrative
duties under this Agreement.
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In
servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering mortgage
loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser’s reliance on the Company.
The
Mortgage Loans may be subserviced by the Subservicer on behalf of the Company
provided that the Subservicer is a servicer in good standing in the jurisdiction
of its incorporation or organization. The Company may perform any of its
servicing responsibilities hereunder or may cause the Subservicer to perform
any
such servicing responsibilities on its behalf, but the use by the Company
of the
Subservicer shall not release the Company from any of its obligations hereunder
and the Company shall remain responsible hereunder for all acts and omissions
of
the Subservicer as fully as if such acts and omissions were those of the
Company. The Company shall pay all fees and expenses of the Subservicer from
its
own funds, and the Subservicer’s fee shall not exceed the Servicing
Fee.
At
the
cost and expense of the Company, without any right of reimbursement from
the
Custodial Account, the Company shall be entitled to terminate the rights
and
responsibilities of the Subservicer and arrange for any servicing
responsibilities to be performed by a successor Subservicer meeting the
requirements in the preceding paragraph, provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Company, at the
Company’s option, from electing to service the related Mortgage Loans itself. In
the event that the Company’s responsibilities and duties under this Agreement
are terminated pursuant to Section 9.04, 10.01 or 11.02, and if requested
to do
so by the Purchaser, the Company shall at its own cost and expense terminate
the
rights and responsibilities of the Subservicer as soon as is reasonably
possible. The Company shall pay all fees, expenses or penalties necessary
in
order to terminate the rights and responsibilities of the Subservicer from
the
Company’s own funds without reimbursement from the Purchaser.
Notwithstanding
any of the provisions of this Agreement relating to agreements or arrangements
between the Company and the Subservicer or any reference herein to actions
taken
through the Subservicer or otherwise, the Company shall not be relieved of
its
obligations to the Purchaser and shall be obligated to the same extent and under
the same terms and conditions as if it alone were servicing and administering
the Mortgage Loans. The Company shall be entitled to enter into an agreement
with the Subservicer for indemnification of the Company by the Subservicer
and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any
Subservicing Agreement and any other transactions or services relating to
the
Mortgage Loans involving the Subservicer shall be deemed to be between the
Subservicer and Company alone, and the Purchaser shall have no rights,
obligations, duties or liabilities with respect to the Subservicer including
no
obligation, duty or liability of Purchaser to pay the Subservicer’s fees and
expenses. For purposes of distributions and advances by the Company pursuant
to
this Agreement, the Company shall be deemed to have received a payment on
a
Mortgage Loan when the Subservicer has received such payment.
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With
respect to any Second Lien Mortgage Loan, if the Company is notified that
any
First Lien lienholder has accelerated or intends to accelerate the obligations
secured by the First Lien, or has declared or intends to declare a default
under
the Mortgage or the Mortgage Note secured thereby, or has filed or intends
to
file an election to have the Mortgaged Property sold or foreclosed, the Company
shall promptly notify the Purchaser of any such notice from or action by
the
First Lien lienholder and of the amount necessary to cure the default or
reinstate the First Lien. The Company shall further make recommendations
to the
Purchaser (including note sales to third parties) so as to best protect the
Purchaser’s interest in and the security of the related Mortgage Loan. If the
Purchaser directs the Company to cure a default under or otherwise reinstate
a
First Lien, the Purchaser will advance to the Company necessary funds to
cure
the default or reinstate the First Lien. The Company shall thereafter take
immediate action to recover from the Mortgagor the amount so advanced. The
Purchaser shall notify the Company in writing of any and all action which
it
requests the Company to take.
In
the
event that the Company reasonably deems that the factual circumstances require
prompt action, the Company may (but shall not be obligated to) without notice
to
the Purchaser, advance the necessary funds to cure the default or reinstate
the
First Lien so as to best protect the Purchaser’s interest. The Company shall
thereafter notify the Purchaser of the action taken, including the amount
of the
advance. Such advances shall be reimbursed to the Company from the Custodial
Account or Escrow Account, as applicable. The Company shall thereafter take
immediate action to recover from the Mortgagor the amount so advanced
.
Section
5.02. Liquidation
of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 5.01 is not paid when the same becomes due and payable, or in the
event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Company shall take such action as (a) the Company would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (b) shall be consistent with Accepted Servicing Practices,
(c)
the Company shall determine prudently to be in the best interest of Purchaser
and (d) is consistent with any related PMI Policy or LPMI Policy, if applicable.
In the event that any payment due under any Mortgage Loan is not postponed
pursuant to Section 5.01 and remains delinquent for a period of 90 days or
any
other default continues for a period of 90 days beyond the expiration of
any
grace or cure period, the Company shall commence foreclosure proceedings,
provided that, prior to commencing foreclosure proceedings, the Company shall
notify the Purchaser in writing of the Company’s intention to do so, and the
Company shall not commence foreclosure proceedings if the Purchaser objects
to
such action within 3 Business Days of receiving such notice. In such connection,
the Company shall from its own funds make all necessary and proper Servicing
Advances, provided, however, that the Company shall not be required to expend
its own funds in connection with any foreclosure or towards the restoration
or
preservation of any Mortgaged Property, unless it shall determine (a) that
such
preservation, restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Purchaser after reimbursement to itself
for
such expenses and (b) that such expenses will be recoverable by it either
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 5.05)
or
through Insurance Proceeds (respecting which it shall have similar priority).
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Section
5.03. Collection
of Mortgage Loan Payments.
The
Company shall proceed diligently to collect all payments due under each of
the
Mortgage Loans when the same shall become due and payable and shall take
special
care in ascertaining and estimating Escrow Payments and all other charges
that
will become due and payable with respect to the Mortgage Loans and each related
Mortgaged Property, to the end that the installments payable by the Mortgagors
will be sufficient to pay such charges as and when they become due and
payable.
Section
5.04. Establishment
of and Deposits to Custodial Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled “Countrywide Home Loans, Inc., in trust
for Xxxxxx Brothers Bank, purchaser of Residential Mortgage Loans, Group
No.
2006-Flow”. The Custodial Account shall be established with a Qualified
Depository. Any funds deposited in the Custodial Account shall at all times
be
fully insured to the full extent permitted under applicable law. Funds deposited
in the Custodial Account may be drawn on by the Company in accordance with
Section 5.05. The creation of any Custodial Account shall be evidenced by
a
letter agreement in the form of Exhibit
C
hereto.
A copy of such letter agreement shall be furnished to the Purchaser and,
upon
request, to any subsequent purchaser of the Mortgage Loans.
The
Company shall deposit in the Custodial Account within two Business Days of
receipt, and retain therein, the following collections received by the Company
and payments made by the Company after the Cut-off Date (other than payments
of
principal and interest due on or before the related Cut-off Date, or received
by
the Company prior to the related Cut-off Date but allocable to a period
subsequent thereto or with respect to each LPMI Loan, in the amount of the
LPMI
Fee):
(i) all
payments on account of principal on the Mortgage Loans, including all Principal
Prepayments;
(ii) all
payments on account of interest on the Mortgage Loans adjusted to the Mortgage
Loan Remittance Rate;
(iii) any
Prepayment Charge received in connection with the Mortgage Loans;
(iv) all
Liquidation Proceeds;
(v) all
Insurance Proceeds including amounts required to be deposited pursuant to
Section 5.10 (other than proceeds to be held in the Escrow Account and applied
to the restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 5.14), Section 5.11 and Section
5.15;
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(vi) all
Condemnation Proceeds which are not applied to the restoration or repair
of the
Mortgaged Property or released to the Mortgagor in accordance with Section
5.14;
(vii) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Section 4.03 and all amounts required to be deposited by the Company in
connection with a shortfall in principal amount of any Qualified Substitute
Mortgage Loan pursuant to Section 4.03;
(viii) any
amounts required to be deposited by the Company pursuant to Section 5.11
in
connection with the deductible clause in any blanket hazard insurance
policy;
(ix) any
amounts required to be deposited by the Company pursuant to Section 5.15
in
connection with any unpaid claims that are a result of a breach by the Company
or any subservicer of the obligations hereunder or under the terms of an
LPMI
Policy;
(x) with
respect to each Principal Prepayment in full or in part, the Prepayment Interest
Shortfall Amount, if any, for the month of distribution. Such deposit shall
be
made from the Company’s own funds, without reimbursement therefor up to a
maximum amount per month of one-half the Servicing Fee actually received
for
such month for the Mortgage Loans;
(xi) any
amounts received with respect to or related to any REO Property and all REO
Disposition Proceeds pursuant to Section 5.16; and
(xii) any
other
amount required to be deposited into the Custodial Account as set forth in
this
Agreement.
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, Ancillary Income need not be deposited by the Company into
the
Custodial Account. Any interest paid on funds deposited in the Custodial
Account
by the depository institution shall accrue to the benefit of the Company
and the
Company shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 5.05.
Section
5.05. Permitted
Withdrawals From Custodial Account.
The
Company shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
(i) to
make
payments to the Purchaser in the amounts and in the manner provided for in
Section 6.01;
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(ii) to
reimburse itself for Monthly Advances of the Company’s funds made pursuant to
Section 6.03, the Company’s right to reimburse itself pursuant to this subclause
(ii) being limited to amounts received on the related Mortgage Loan which
represent late payments of principal and/or interest respecting which any
such
advance was made, it being understood that, in the case of any such
reimbursement, the Company’s right thereto shall be prior to the rights of
Purchaser, except that, where the Company is required to repurchase a Mortgage
Loan pursuant to Section 4.03 or 8.02, the Company’s right to such reimbursement
shall be subsequent to the payment to the Purchaser of the Repurchase Price
pursuant to such sections and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan;
(iii) to
reimburse itself for unreimbursed Servicing Advances, and for any unpaid
Servicing Fees, the Company’s right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such
other
amounts as may be collected by the Company from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of any
such
reimbursement, the Company’s right thereto shall be prior to the rights of
Purchaser except where the Company is required to repurchase a Mortgage Loan
pursuant to Section 4.03 or 8.02, in which case the Company’s right to such
reimbursement shall be subsequent to the payment to the Purchasers of the
Repurchase Price pursuant to such sections and all other amounts required
to be
paid to the Purchasers with respect to such Mortgage Loan;
(iv) to
pay
itself interest on funds deposited in the Custodial Account;
(v) to
pay
LPMI Fees in accordance with Section 5.15;
(vi) to
pay
any amount required to be paid pursuant to Section 5.16 related to any REO
Property, it being understood that in the case of any such expenditure or
withdrawal related to a particular REO Property, the amount of such expenditure
or withdrawal from the Custodial Account shall be limited to amounts on deposit
in the Custodial Account with respect to the related REO Property;
(vii) to
clear
and terminate the Custodial Account upon the termination of this Agreement;
and
(viii) to
withdraw funds deposited in error.
In
the
event that the Custodial Account is interest bearing, on each Remittance
Date,
the Company shall withdraw all funds from the Custodial Account except for
those
amounts which, pursuant to Section 6.01, the Company is not obligated to
remit
on such Remittance Date. The Company may use such withdrawn funds only for
the
purposes described in this Section 5.05.
Section
5.06. Establishment
of and Deposits to Escrow Account.
The
Company shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of
its
own funds and general assets and shall establish and maintain one or more
Escrow
Accounts, in the form of time deposit or demand accounts, titled, “Countrywide
Home Loans, Inc., in trust for Xxxxxx Brothers Bank, purchaser of Residential
Mortgage Loans, Group No. 2006-Flow, and various Mortgagors”. The Escrow
Accounts shall be established with a Qualified Depository, in a manner which
shall provide maximum available insurance thereunder. Funds deposited in
the
Escrow Account may be drawn on by the Company in accordance with Section
5.07.
The creation of any Escrow Account shall be evidenced by a letter agreement
in
the form of Exhibit
D
hereto.
A copy of such letter agreement shall be furnished to the Purchaser and,
upon
request, to any subsequent purchaser.
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The
Company shall deposit in the Escrow Account or Accounts within two Business
Days
of receipt, and retain therein:
(i) all
Escrow Payments collected on account of the Mortgage Loans, for the purpose
of
effecting timely payment of any such items as required under the terms of
this
Agreement; and
(ii) all
amounts representing Insurance Proceeds or Condemnation Proceeds which are
to be
applied to the restoration or repair of any Mortgaged Property.
The
Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 5.07.
The
Company shall be entitled to retain any interest paid on funds deposited
in the
Escrow Account by the depository institution, other than interest on escrowed
funds required by law to be paid to the Mortgagor. To the extent required
by
law, the Company shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section
5.07. Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Company
only:
(i) to
effect
timely payments of ground rents, taxes, assessments, water rates, mortgage
insurance premiums, condominium charges, fire and hazard insurance premiums
or
other items constituting Escrow Payments for the related Mortgage;
(ii) to
reimburse the Company for any Servicing Advances made by the Company pursuant
to
Section 5.08 with respect to a related Mortgage Loan, but only from amounts
received on the related Mortgage Loan which represent late collections of
Escrow
Payments thereunder;
(iii) to
refund
to any Mortgagor any funds found to be in excess of the amounts required
under
the terms of the related Mortgage Loan;
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(iv) for
transfer to the Custodial Account and application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the related
Mortgage and Mortgage Note;
(v) for
application to restoration or repair of the Mortgaged Property in accordance
with the procedures outlined in Section 5.14;
(vi) to
pay to
the Company, or any Mortgagor to the extent required by law, any interest
paid
on the funds deposited in the Escrow Account;
(vii) to
clear
and terminate the Escrow Account on the termination of this Agreement;
and
(viii) to
withdraw funds deposited in error.
Section
5.08. Payment
of Taxes, Insurance and Other Charges.
(a) With
respect to each Mortgage Loan which provides for Escrow Payments, the Company
shall maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates, sewer rents, and other charges which are or may
become
a lien upon the Mortgaged Property and the status of PMI Policy, if any,
and
LPMI Policy premiums (if applicable) and fire and hazard insurance coverage
and
shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date, employing for such purpose deposits
of
the Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Company in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage. The Company assumes full responsibility
for the
timely payment of all such bills and shall effect timely payment of all such
charges irrespective of each Mortgagor’s faithful performance in the payment of
same or the making of the Escrow Payments, and the Company shall make advances
from its own funds to effect such payments.
(b) To
the
extent that a Mortgage Loan does not provide for Escrow Payments, the Company
shall determine that any such payments are made by the Mortgagor at the time
they first become due.
Section
5.09. Protection
of Accounts.
The
Company may transfer the Custodial Account or the Escrow Account to a different
Qualified Depository from time to time. Upon any such transfer, the Company
shall promptly notify the Purchaser and deliver to the Purchaser a Custodial
Account Letter Agreement or Escrow Account Letter Agreement (as applicable)
in
the form of Exhibit
C
or
D
hereto.
The
Company shall bear any expenses, losses or damages sustained by the Purchaser
because the Custodial Account and/or the Escrow Account are not demand deposit
accounts.
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Amounts
on deposit in the Custodial Account and the Escrow Account may at the option
of
the Company be invested in Eligible Investments; provided that in the event
that
amounts on deposit in the Custodial Account or the Escrow Account exceed
the
amount fully insured by the FDIC (the “Insured
Amount”)
the
Company shall be obligated to invest the excess amount over the Insured Amount
in Eligible Investments on the same Business Day as such excess amount becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Determination Date next following
the
date of such Eligible Investment, provided, however, that if such Eligible
Investment is an obligation of a Qualified Depository (other than the Company)
that maintains the Custodial Account or the Escrow Account, then such Eligible
Investment may mature on such Remittance Date. Any such Eligible Investment
shall be made in the name of the Company in trust for the benefit of the
Purchaser. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Company and may be withdrawn at any time
by the
Company. Any losses incurred in respect of any such investment shall be
deposited in the Custodial Account or the Escrow Account, by the Company
out of
its own funds immediately as realized.
Section
5.10. Maintenance
of Hazard Insurance.
The
Company shall cause to be maintained for each Mortgage Loan hazard insurance
such that all buildings upon the Mortgaged Property are insured by a generally
acceptable insurer rated A:VI or better in the current Best’s Key Rating Guide
(“Best’s”) against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located,
in
an amount which is at least equal to the lesser of (i) the replacement value
of
the improvements securing such Mortgage Loan and (ii) the greater of (a)
the
outstanding principal balance of the Mortgage Loan and (b) an amount such
that
the proceeds thereof shall be sufficient to prevent the Mortgagor or the
loss
payee from becoming a co-insurer.
If
upon
origination of the Mortgage Loan, the related Mortgaged Property was located
in
an area identified in the Federal Register by the Flood Emergency Management
Agency as having special flood hazards (and such flood insurance has been
made
available) a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with a generally
acceptable insurance carrier rated A:VI or better in Best’s in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii)
the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Company determines in accordance with applicable law and
that
a Mortgaged Property is located in a special flood hazard area and is not
covered by flood insurance or is covered in an amount less than the amount
required by the Flood Disaster Protection Act of 1973, as amended, the Company
shall notify the related Mortgagor that the Mortgagor must obtain such flood
insurance coverage, and if said Mortgagor fails to obtain the required flood
insurance coverage within forty-five (45) days after such notification, the
Company shall immediately force place the required flood insurance on the
Mortgagor’s behalf.
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If
a
Mortgage is secured by a unit in a condominium project, the Company shall
verify
that the coverage required of the owner’s association, including hazard, flood,
liability, and fidelity coverage, is being maintained, and secure from the
owner’s association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may
have
a material effect on the value of the Mortgaged Property as
security.
The
Company shall cause to be maintained on each Mortgaged Property earthquake
or
such other or additional insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In
the
event that any Purchaser or the Company shall determine that the Mortgaged
Property should be insured against loss or damage by hazards and risks not
covered by the insurance required to be maintained by the Mortgagor pursuant
to
the terms of the Mortgage, the Company shall communicate and consult with
the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor’s attention the desirability of protection of the Mortgaged
Property.
All
policies required hereunder shall name the Company as loss payee and shall
be
endorsed with standard or union mortgagee clauses, without contribution,
which
shall provide for at least 30 days prior written notice of any cancellation,
reduction in amount or material change in coverage.
The
Company shall not interfere with the Mortgagor’s freedom of choice in selecting
either his insurance carrier or agent, provided, however, that the Company
shall
not accept any such insurance policies from insurance companies unless such
companies are rated A:VI or better in Best’s and are licensed to do business in
the jurisdiction in which the Mortgaged Property is located. The Company
shall
determine that such policies provide sufficient risk coverage and amounts,
that
they insure the property owner, and that they properly describe the property
address. The Company shall furnish to the Mortgagor a formal notice of
expiration of any such insurance in sufficient time for the Mortgagor to
arrange
for renewal coverage by the expiration date.
Pursuant
to Section 5.04, any amounts collected by the Company under any such policies
(other than amounts to be deposited in the Escrow Account and applied to
the
restoration or repair of the related Mortgaged Property, or property acquired
in
liquidation of the Mortgage Loan, or to be released to the Mortgagor, in
accordance with the Company’s normal servicing procedures as specified in
Section 5.14) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 5.05.
Section
5.11. Maintenance
of Mortgage Impairment Insurance.
In
the
event that the Company shall obtain and maintain a blanket policy insuring
against losses arising from fire and hazards covered under extended coverage
on
all of the Mortgage Loans, then, to the extent such policy provides coverage
in
an amount equal to the amount required pursuant to Section 5.10 and otherwise
complies with all other requirements of Section 5.10, it shall conclusively
be
deemed to have satisfied its obligations as set forth in Section 5.10. Any
amounts collected by the Company under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account or Escrow Account subject
to
withdrawal pursuant to Section 5.06. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained
on
the related Mortgaged Property a policy complying with Section 5.10, and
there
shall have been a loss which would have been covered by such policy, the
Company
shall deposit in the Custodial Account or Escrow Account at the time of such
loss the amount not otherwise payable under the blanket policy because of
such
deductible clause, such amount to deposited from the Company’s funds, without
reimbursement therefor. Upon request of any Purchaser, the Company shall
cause
to be delivered to such Purchaser a certified true copy of such policy and
a
statement from the insurer thereunder that such policy shall in no event
be
terminated or materially modified without 30 days’ prior written notice to such
Purchaser.
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Section
5.12. Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Company shall maintain with responsible companies, at its own expense, a
blanket
Fidelity Bond and an Errors and Omissions Insurance Policy, with broad coverage
on all officers, employees or other persons acting in any capacity requiring
such persons to handle funds, money, documents or papers relating to the
Mortgage Loans (“Company Employees”). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker’s Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzle-ment, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance
Policy
also shall protect and insure the Company against losses in connection with
the
release or satisfaction of a Mortgage Loan without having obtained payment
in
full of the indebtedness secured thereby. No provision of this Section 5.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth
in
this Agreement. The minimum coverage under any such bond and insurance policy
shall be acceptable to Xxxxxx Mae or Xxxxxxx Mac. Upon the request of the
Purchaser, the Company shall cause to be delivered to such Purchaser a certified
true copy of such Fidelity Bond and Errors and Omissions Insurance policy
and a
statement from the surety and the insurer that it shall make best efforts
to
provide 30 days’ prior written notice to the Purchaser before terminating or
materially modifying such Fidelity Bond or Errors or Omissions Insurance
Policy.
Section
5.13. Inspections.
The
Company shall inspect the Mortgaged Property as often as deemed necessary
by the
Company to assure itself that the value of the Mortgaged Property is being
preserved. In addition, if any Mortgage Loan is more than 60 days delinquent,
the Company immediately shall inspect the Mortgaged Property and shall conduct
subsequent inspections in accordance with Accepted Servicing Practices or
as may
be required by the primary mortgage guaranty insurer. The Company shall keep
a
written report of each such inspection.
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Section
5.14. Restoration
of Mortgaged Property.
The
Company need not obtain the approval of the Purchaser prior to releasing
any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. At a minimum, the Company shall
comply with the following conditions in connection with any such release
of
Insurance Proceeds or Condemnation Proceeds:
(i) the
Company shall receive satisfactory independent verification of completion
of
repairs and issuance of any required approvals with respect thereto;
(ii) the
Company shall take all steps necessary to preserve the priority of the lien
of
the Mortgage, including, but not limited to requiring waivers with respect
to
mechanics’ and materialmen’s liens;
(iii) the
Company shall verify that the Mortgage Loan is not in default; and
(iv) pending
repairs or restoration, the Company shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.
If
the
Purchaser is named as an additional loss payee, the Company is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of
the
Purchaser.
Section
5.15. Maintenance
of LPMI Policy; Claims.
(a) The
Company shall be obligated to make premium payments with respect to (i) LPMI
Policies, to the extent of the LPMI Fee set forth on the Mortgage Loan Schedule
with respect to any LPMI Loans submitted by Purchaser (or Qualified Insurer)
to
the Servicer no later than seven (7) Business Days prior to effective date
of
coverage, which shall be paid out of the interest portion of the related
Monthly
Payment or, if a Monthly Payment is not made, from the Company’s own funds and
(ii) PMI Policies, if any, required to be maintained by the Mortgagor rather
than the Purchaser, if the Mortgagor is required but fails to pay any PMI
Policy
premium, which shall be paid from the Company’s own funds. Any premium payments
made by the Company from its own funds pursuant to this Section 5.15(a) shall
be
recoverable by the Company as a Servicing Advance, subject to the reimbursement
provisions of Section 5.05.
(b) In
the
event that any PMI Policy shall be terminated, the Company shall obtain from
another Qualified Insurer a comparable replacement policy, with a total coverage
equal to the remaining coverage of such terminated PMI Policy, at substantially
the same fee level. If the insurer shall cease to be a Qualified Insurer,
the
Company shall determine whether recoveries under the PMI Policy are jeopardized
for reasons related to the financial condition of such insurer, it being
understood that the Company shall in no event have any responsibility or
liability for any failure to recover under the PMI Policy for such reason.
If
the Company determines that recoveries are so jeopardized, it shall notify
the
Purchaser and the Mortgagor, if required, and obtain from another Qualified
Insurer a replacement insurance policy.
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(c) With
respect to each Mortgage Loan covered by an LPMI Policy or a PMI Policy,
if any,
the Company shall take all such actions on behalf of the Purchaser as are
necessary to service, maintain and administer the related Mortgage Loan in
accordance with such policy and to enforce the rights under such policy.
Except
as expressly set forth herein, the Company shall have full authority on behalf
of the Purchaser to do anything it deems appropriate or desirable in connection
with the servicing, maintenance and administration of such policy; provided
that
the
Company shall not take any action to permit any modification or assumption
of a
Mortgage Loan covered by an LPMI Policy or a PMI Policy, if any, or take
any
other action with respect to such Mortgage Loan, which would result in
non-coverage under such policy of any loss which, but for actions of the
Company, would have been covered thereunder. If the Qualified Insurer fails
to
pay a claim under an LPMI Policy or a PMI Policy, if any, solely as a result
of
a breach by the Company of its obligations hereunder or under such policy,
the
Company shall be required to deposit in the Custodial Account on or prior
to the
next succeeding Remittance Date an amount equal to such unpaid claim from
its
own funds without any rights to reimbursement from the Purchaser; provided,
that
once the Company has paid the amount of such unpaid claim and the Purchaser
has
otherwise fully recovered all amounts due to the Purchaser with respect to
the
Mortgage Loan, the Purchaser shall (at the Company’s cost and expense) cooperate
with the Company in permitting the Company to be subrogated to the rights
of the
Purchaser with respect to such Mortgage Loan to the same extent that the
insurer
would have been subrogated under the applicable LPMI Policy or PMI Policy,
if
any, had such insurer not failed to pay such claim. The Company shall cooperate
with the Qualified Insurers and shall furnish all reasonable evidence and
information in the possession of the Company to which the Company has access
with respect to the related Mortgage Loan; provided,
however,
notwithstanding anything to the contrary contained in any LPMI Policy or
PMI
Policy, if any, the Company shall not be required to submit any reports to
the
related Qualified Insurer until a reporting date that is at least 15 days
after
the Company has received sufficient loan level information from each Purchaser
to appropriately code its servicing systems in accordance with the Qualified
Insurer’s requirements.
(d) In
connection with its activities as servicer, the Company agrees to prepare
and
present, on behalf of itself and the Purchaser, claims to the Qualified Insurer
under any LPMI Policy or PMI Policy in a timely fashion in accordance with
the
terms of such policy and, in this regard, to take such action as shall be
necessary to permit recovery under such policy respecting a defaulted Mortgage
Loan. Any amounts collected by the Company under any LPMI Policy or PMI Policy
shall be deposited in the Custodial Account, subject to withdrawal pursuant
to
Section 5.05.
Section
5.16. Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or
by deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in
the
name of the Purchaser’s designee (“Designee”), or in the event Designee is not
authorized or permitted to hold title to real property in the state where
the
REO Property is located, or would be adversely affected under the “doing
business” or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Company from any attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the
Designee. The Purchaser hereby agrees to indemnify the Company and hold it
harmless against any losses, damages, penalties, fines, and transfer taxes,
including without limitation, reasonable and necessary costs and expenses
incurred by the Company resulting from the failure to provide the Company
with
the name of the Designee prior to the commencement of foreclosure proceedings
of
the related Mortgage Loan.
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The
Company shall manage, conserve, protect and operate each REO Property for
the
Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner
that
it manages, conserves, protects and operates other foreclosed property for
its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same
(and
may temporarily rent the same for a period not greater than one year, except
as
otherwise provided below) on such terms and conditions as the Company deems
to
be in the best interest of the Purchaser.
The
Company shall use its best efforts to dispose of the REO Property as soon
as
possible and shall sell such REO Property in any event not later than the
end of
the third taxable year after the year of its acquisition unless (i) (A) a
REMIC
election has not been made with respect to the arrangement under which the
Mortgage Loans and the REO Property are held, and (ii) the Company determines,
and gives an appropriate notice to the Purchaser to such effect, that a longer
period is necessary for the orderly liquidation of such REO Property. If
a
period longer than one year is permitted under the foregoing sentence and
is
necessary to sell any REO Property, the Company shall report monthly to the
Purchaser as to the progress being made in selling such REO Property.
The
Company shall also maintain on each REO Property fire and hazard insurance
with
extended coverage in amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required above.
Notwithstanding
the foregoing provisions of this Section 5.16 or any other provision of this
Agreement, with respect to any Mortgage Loan as to which the Company has
received actual notice of, or has actual knowledge of, the presence of any
toxic
or hazardous substance on the related Mortgaged Property, the Company shall
not,
on behalf of the Purchaser, either (i) obtain title to such Mortgaged Property
as a result of or in lieu of foreclosure or otherwise or (ii) otherwise acquire
possession of, or take any other action with respect to, such Mortgaged
Property, if, as a result of any such action, the Purchaser would be considered
to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or
“operator” of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
from
time to time, or any comparable law, unless the Company has also previously
determined, based on its reasonable judgment and a report prepared by a Person
who regularly conducts environmental audits using customary industry standards,
that (i) such Mortgaged Property is in compliance with applicable environmental
laws or, if not, that it would be in the best economic interest of the Purchaser
to take such actions as are necessary to bring the Mortgaged Property into
compliance therewith and (ii)
there
are
no circumstances present at such Mortgaged Property relating to the use,
management or disposal of any hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under
any
federal, state or local law or regulation, or that if any such materials
are
present for which such action could be required, that it would be in the
best
economic interest of the Purchaser to take such actions with respect to the
affected Mortgaged Property.
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The
cost
of the environmental audit report contemplated by this Section 5.16 shall
be
advanced by the Company, subject to the Company’s right to be reimbursed
therefor from the Custodial Account.
If
the
Company determines, as described above, that it is in the best economic interest
of the Purchaser to take such actions as are necessary to bring any such
Mortgaged Property into compliance with applicable environmental laws, or
to
take such action with respect to the containment, clean-up or remediation
of
hazardous substances, hazardous materials, hazardous wastes or petroleum-based
materials affecting any such Mortgaged Property, then the Company shall take
such action as it deems to be in the best economic interest of the Purchaser;
provided, however, that the Company shall not proceed with foreclosure or
acceptance of a deed in lieu of foreclosure if the estimated costs of the
environmental clean up, as estimated in the environmental audit report, together
with the Servicing Advances and Monthly Advances made by the Company and
the
estimated costs of foreclosure or acceptance of a deed in lieu of foreclosure
exceeds the estimated value of the Mortgaged Property. The cost of any such
compliance, containment, cleanup or remediation shall be advanced by the
Company, subject to the Company’s right to be reimbursed therefor from the
Custodial Account.
The
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and conditions, as the Company deems to be in the best
interests of the Purchaser.
The
proceeds of sale of the REO Property shall be promptly deposited in the
Custodial Account. As soon as practical thereafter the expenses of such sale
shall be paid and the Company shall reimburse itself for any related
unreimbursed Servicing Advances, unpaid Servicing Fees and unreimbursed advances
made pursuant to Section 6.03, and on the Remittance Date immediately following
the Principal Prepayment Period in which such sale proceeds are received
the net
cash proceeds of such sale remaining in the Custodial Account shall be
distributed to the Purchaser.
The
Company shall withdraw the Custodial Account funds necessary for the proper
operation, management and maintenance of the REO Property, including the
cost of
maintaining any hazard insurance fees of any managing agent of the Company,
a
Subservicer, or the Company itself. The Company shall make monthly distributions
on each Remittance Date to the Purchasers of the net cash flow from the REO
Property (which shall equal the revenues from such REO Property net of the
expenses described in the Section 5.16 and of any reserves reasonably required
from time to time to be maintained to satisfy anticipated liabilities for
such
expenses).
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Section
5.17. Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 6.02, the Company shall
furnish
to the Purchaser a statement with respect to any REO Property covering the
operation of such REO Property for the previous month and the Company’s efforts
in connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement
shall be accompanied by such other information as the Purchaser shall reasonably
request.
Section
5.18. Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by
the
Purchaser pursuant to a deed in lieu of foreclosure, the Company shall submit
to
the Purchaser a liquidation report with respect to such Mortgaged Property.
In
addition, the Company shall provide the Purchaser or its designee a report
of
Servicing Advances and other expenses in connection with the liquidation
of any
Mortgage Loan.
Section
5.19. Notification
of Adjustments.
With
respect to each ARM Mortgage Loan, the Company shall adjust the Mortgage
Interest Rate on the related Interest Rate Adjustment Date in compliance
with
the requirements of applicable law and the related Mortgage and Mortgage
Note.
The Company shall execute and deliver any and all necessary notices required
under applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Interest Rate adjustments. The Company shall promptly,
upon written request therefor, deliver to the Purchaser such notifications
and
any additional applicable data regarding such adjustments and the methods
used
to calculate and implement such adjustments. Upon the discovery by the Company
or the receipt of notice from the Purchaser that the Company has failed to
adjust a Mortgage Interest Rate in accordance with the terms of the related
Mortgage Note, the Company shall immediately deposit in the Custodial Account
from its own funds the amount of any interest loss caused the Purchaser
thereby.
Section
5.20. Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report such foreclosure or abandonment as required pursuant to Section 6050J
of
the Code.
Section
5.21. Waiver
of Prepayment Charges.
Except
as
set forth below, the Company or any designee of the Company shall not waive
any
Prepayment Charge with respect to any Mortgage Loan. If the Company or its
designee fails to collect a Prepayment Charge at the time of the related
principal prepayment in full of any Mortgage Loan subject to such Prepayment
Charge, the Company shall pay to the Custodial Account an amount equal to
the
amount of the prepayment charge not collected. Notwithstanding the above,
the
Company or its designee may waive a Prepayment Charge without paying to the
Custodial Account the amount of such Prepayment Charge only if the related
prepayment in full is not the result of a refinancing by the Company or its
designee and such waiver (a) relates to a defaulted Mortgage Loan or a
reasonably foreseeable default, such waiver is standard and customary in
servicing similar mortgage loans to the Mortgage Loans, and such waiver,
in the
reasonable judgment of the Company, would maximize recovery of total proceeds
from the Mortgage Loan, taking into account the amount of such Prepayment
Charge
and the related Mortgage Loan, or (b) relates to a Prepayment Charge the
collection of which, in the reasonable judgment of the Company, would be
a
violation of applicable laws and regulations.
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Section
5.22. Credit
Reporting.
For
each
Mortgage Loan, the Company shall accurately and fully furnish, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information on its borrower credit files to each of the following
credit repositories: Equifax, Credit Information Services, Inc., Experian
Information Solutions, Inc., and Trans Union, LLC on a monthly
basis.
ARTICLE
VI.
PAYMENTS
TO PURCHASER
Section
6.01. Remittances.
On
each
Remittance Date the Company shall remit by wire transfer of immediately
available funds to the Purchaser (a) all amounts deposited in the Custodial
Account as of the close of business on the last day of the related Determination
Date (net of charges against or withdrawals from the Custodial Account pursuant
to Section 5.05), plus (b) all amounts, if any, which the Company is obligated
to distribute pursuant to Section 6.03, minus (c) any Prepayments Interest
Excess amounts received which amounts shall be remitted on the following
Remittance Date, together with any additional interest required to be deposited
in the Custodial Account in connection with such Principal Prepayment in
accordance with Section 5.04, and minus (d) any amounts attributable to Monthly
Payments collected but due on a Due Date or Dates subsequent to the first
day of
the month of the Remittance Date, which amounts shall be remitted on the
Remittance Date next succeeding the Due Period for such amounts.
With
respect to any remittance received by the Purchaser after the second Business
Day following the Business Day on which such payment was due, the Company
shall
pay to the Purchaser interest on any such late payment at an annual rate
equal
to the Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be deposited in the Custodial Account by the Company
on
the date such late payment is made and shall cover the period commencing
with
the day following such second Business Day and ending with the Business Day
on
which such payment is made, both inclusive. Such interest shall be remitted
along with the distribution payable on the next succeeding Remittance Date.
The
payment by the Company of any such interest shall not be deemed an extension
of
time for payment or a waiver of any Event of Default by the
Company.
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Section
6.02. Statements
to Purchaser.
Not
later
than the 18th
day of
each calendar month, the Company shall furnish to the Purchaser or its designee
a monthly remittance advice in the format set forth in Exhibit
E-1
hereto
and a monthly defaulted loan report in format set forth in Exhibit
E-2
hereto
(or in such other format mutually agreed to between the Company and the
Purchaser) relating to the period ending on the last day of the preceding
calendar month.
In
addition, in connection with any Principal Prepayment, not later than the
16th
day of
each month, the Company shall furnish to the Purchaser or its designee a
monthly
payoff remittance advice regarding any Principal Payment applied to the related
Mortgage Loan on or after the 15th
day of
the month preceding the month of such reporting date, but on or before the
14th
day of
the month of such reporting date, containing such information and in such
format
as is mutually acceptable to the Company and the Purchaser.
In
addition, not more than 60 days after the end of each calendar year, the
Company
shall furnish to each Person who was a Purchaser at any time during such
calendar year an annual statement in accordance with the requirements of
applicable federal income tax law as to the aggregate of remittances for
the
applicable portion of such year.
Section
6.03. Monthly
Advances by Company.
On
the
Business Day immediately preceding each Remittance Date, either (a) the Company
shall deposit in the Custodial Account from its own funds or (b) if funds
are on
deposit in the Custodial Account which are not required to be remitted on
the
related Remittance Date, the Company may make an appropriate entry in its
records that such funds shall be applied toward the related Monthly Advance
(provided, that any funds so applied shall be replaced by the Company no
later
than the Business Day immediately preceding the next Remittance Date), in
each
case, in an aggregate amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close
of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 5.01. The Company’s obligation to make such Monthly Advances
as to any Mortgage Loan will continue through the last Monthly Payment due
prior
to the payment in full of the Mortgage Loan, or through the last Remittance
Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan.
In
no
event shall the Company be obligated to make an advance under this Section
6.03
if at the time of such advance it deems such advance to be non-recoverable.
The
Company shall promptly deliver an officer’s certificate to the Purchaser upon
determining that any advance is non-recoverable. In the event that upon
liquidation of the Mortgage Loan, the Liquidation Proceeds are insufficient
to
reimburse the Company for any Monthly Advances, the Company shall notify
the
Purchaser of such shortfall by registered mail with sufficient supporting
documentation. The Purchaser shall respond to the Company within 60 days
of
receipt of such request. In the event that the related Purchaser fails to
respond within 60 days, the Company shall have the right to deduct such
shortfall from the next remittance to be paid to the related
Purchaser.
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ARTICLE
VII.
GENERAL
SERVICING PROCEDURES
Section
7.01. Transfers
of Mortgaged Property.
The
Company shall use its best efforts to enforce any “due-on-sale” provision
contained in any Mortgage or Mortgage Note and to deny assumption by the
person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Company shall, to the extent
it
has knowledge of such conveyance, exercise its rights to accelerate the maturity
of such Mortgage Loan under the “due-on-sale” clause applicable thereto,
provided, however, that the Company shall not exercise such rights if prohibited
by law from doing so or if the exercise of such rights would impair or threaten
to impair any recovery under the related LPMI Policy or PMI Policy, if any.
If
the
Company reasonably believes it is unable under applicable law to enforce
such
“due-on-sale” clause, the Company shall enter into (i) an assumption and
modification agreement with the person to whom such property has been conveyed,
pursuant to which such person becomes liable under the Mortgage Note and
the
original Mortgagor remains liable thereon or (ii) in the event the Company
is
unable under applicable law to require that the original Mortgagor remain
liable
under the Mortgage Note and the Company has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note. If
an
assumption fee is collected by the Company for entering into an assumption
agreement, all fees, will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage
Loan
nor the outstanding principal amount of the Mortgage Loan shall be
changed.
To
the
extent that any Mortgage Loan is assumable, the Company shall inquire diligently
into the creditworthiness of the proposed transferee, and shall use the
Underwriting Guidelines for approving the credit of the proposed transferee
of
the same type as the Mortgage Loans. If the credit of the proposed transferee
does not meet such Underwriting Guidelines, the Company diligently shall,
to the
extent permitted by the Mortgage or the Mortgage Note and by applicable
law,
accelerate the maturity of the Mortgage Loan.
Section
7.02. Satisfaction
of Mortgages and Release of Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Company of
a
notification that payment in full will be escrowed in a manner customary
for
such purposes, the Company shall notify the Purchaser in the Monthly Remittance
Advice as provided in Section 6.02, and may request the release of any
Mortgage
Loan Documents. In connection with any such prepayment in full, the Company
shall comply with all applicable laws regarding satisfaction, release or
reconveyance with respect to the Mortgage.
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If
the
Company satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage or should the Company
otherwise prejudice any rights the Purchaser may have under the mortgage
instruments, upon written demand of the Purchaser, the Company shall repurchase
the related Mortgage Loan at the Repurchase Price by deposit thereof in the
Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Company shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Company against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section
7.03. Servicing
Compensation.
As
consideration for servicing the Mortgage Loans subject to this Agreement,
the
Company shall retain the relevant Servicing Fee for each Mortgage Loan remaining
subject to this Agreement during any month or part thereof. Such Servicing
Fee
shall be payable monthly. Additional servicing compensation in the form of
Ancillary Income shall be retained by the Company and is not required to
be
deposited in the Custodial Account. 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
Condemnation Proceeds and Liquidation Proceeds) of such Monthly Payment
collected by the Company.
The
Company shall be required to pay all expenses incurred by it in connection
with
its servicing activities hereunder and shall not be entitled to reimbursement
thereof except as specifically provided for herein.
Section
7.04. Annual
Statement as to Compliance.
The
Company shall deliver to the Purchaser, on or before March 15 each year
beginning March 15, 2007, an Officer’s Certificate, stating that (i) a review of
the activities of the Company during the preceding calendar year and of
performance under this Agreement has been made under such officer’s supervision,
and (ii) the Company has complied fully with the provisions of Article II
and
Article IV, and (iii) to the best of such officer’s knowledge, based on such
review, the Company has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment
of any
such obligation, specifying each such default known to such officer and the
nature and status thereof and the action being taken by the Company to cure
such
default.
Section
7.05. Annual
Independent Public Accountants’ Servicing Report.
On
or
before March 15th of each year beginning March 15, 2007, the Company, at
its
expense, shall cause a firm of independent public accountants which is a
member
of the American Institute of Certified Public Accountants to furnish a statement
to each Purchaser to the effect that such firm has examined certain documents
and records relating to the servicing of the Mortgage Loans and this Agreement
and that such firm is of the opinion that the provisions of Article II and
Article IV have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Single Attestation Program
for
Mortgage Bankers, nothing has come to their attention which would indicate
that
such servicing has not been conducted in compliance therewith, except for
(i)
such exceptions as such firm shall believe to be immaterial, and (ii) such
other
exceptions as shall be set forth in such statement.
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Section
7.06. Right
to Examine Company Records.
The
Purchaser shall have the right to examine and audit any and all of the books,
records, or other information of the Company, whether held by the Company
or by
another on its behalf, with respect to or concerning this Agreement or the
Mortgage Loans, during business hours or at such other times as may be
reasonable under applicable circumstances, upon reasonable advance
notice.
The
Company shall provide to the Purchaser and any supervisory agents or examiners
representing a state or federal government agency having jurisdiction over
the
Purchaser, including without limitation the OTS, the FDIC and other similar
entities, access to any documentation regarding the Mortgage Loans in the
possession of the Company that is required by any applicable regulations.
Such
access shall be afforded without charge, upon reasonable request, during
normal
business hours, at the offices of the Company and in accordance with any
applicable regulations.
ARTICLE
VIII.
AGENCY
TRANSFER; PASS-THROUGH TRANSFER
Section
8.01. Whole
Loan Transfers; Agency Transfers or Pass-Through Transfers.
(a) The
Company and the Purchaser agree that with respect to some or all of the Mortgage
Loans, the Purchaser may effect either one or more Whole Loan Transfers,
and/or
one or more Pass-Through Transfers; provided, however, that the transferee
will
not be deemed to be the Purchaser hereunder unless such transferee shall
agree
in writing to be bound by the terms of this Agreement (or such other agreement
or document agreed to by such transferee, the initial Purchaser and the Company)
and an original counterpart of the document evidencing such agreement shall
have
been executed by the Purchaser and the transferee and delivered to Countrywide.
Notwithstanding the foregoing, no transfer shall be effective if such transfer
would result in there being more than three (3) “Purchasers” outstanding
hereunder with respect to any Mortgage Loan Package.
(b) With
respect to each Whole Loan Transfer entered into by the Purchaser, the Company
agrees:
(i) to
cooperate reasonably with the Purchaser and any prospective purchaser with
respect to all reasonable requests relating to such Whole Loan
Transfer;
(ii) to
execute or acknowledge a mutually agreeable assignment, assumption and
recognition agreement recognizing the transfer by the Purchaser to a successor
purchaser of some or all of the Mortgage Loans, which Mortgage Loans will
be
assigned along with all of the Purchaser’s rights and obligations under this
Agreement; and
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(iii) to
restate on the Reconstitution Date, all representations and warranties made
by
the Company set forth in Section 6 of this Agreement (except with respect
to
Section 4.01(b), (i), (j), (k), and (l)) with respect to the Company
itself.
(c) The
Purchaser and the Company agree that in connection with the completion of
a
Pass-Through Transfer or Agency Transfer, the Company shall:
(i) restate
on the Reconstitution Date, all representations and warranties made by the
Company set forth in Section 6 of this Agreement (except with respect to
Section
4.01(b), (i), (j), (k), and (l)) with respect to the Company
itself;
(ii) if
the
Company is required to be a party to any of the Reconstitution Agreements,
to
execute any Reconstitution Agreement required to effectuate the foregoing;
provided that such Reconstitution Agreement shall be reasonably acceptable
to
the Company, shall not materially increase the Company’s obligations or
liabilities hereunder, nor diminish any of the Company’s rights and remedies
hereunder;
(iii) provide
to any master servicer or trustee, as applicable, and/or the Purchaser any
and all publicly available information and appropriate verification of
information which may be reasonably available to the Company, whether through
letters of its auditors and counsel or otherwise, as the Purchaser, trustee
or a
master servicer shall reasonable request as to the related Mortgage Loans;
and
(iv) provide
all other assistance reasonably requested by the Purchaser in connection
with
completion of the Pass-Through Transfer.
(d) With
respect to any Pass-Through Transfer, the Purchaser shall be entitled to
include
in any disclosure document information that is specifically provided by the
Company for inclusion in such disclosure document (“Company Disclosure
Information”), and the Company acknowledges and agrees that the related
investors will be permitted to rely on such Company Disclosure Information.
In
addition, the Company shall indemnify the Purchaser and its affiliates for
any
untrue or alleged untrue statement of any material fact contained in such
Company Disclosure Information, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the
statements therein, in the light of the circumstances in which they were
made,
not misleading. The Purchaser shall indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, insofar as such losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments and other costs and expenses
(or actions in respect thereof) (x) arise out of or are based upon any untrue
or
alleged untrue statement of any material fact contained in the Purchaser’s
disclosure document (other than an untrue statement of material fact contained
in the Company Disclosure Information), or (y) arise out of or are based
upon
the omission or alleged omission to state in such disclosure document a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(unless the material fact omitted would constitute the Company Disclosure
Information). If the Purchaser determines that the Company is required to
be a
party to any Reconstitution Agreement, the Company shall execute such
Reconstitution Agreement within a reasonable period of time, but in no event
shall such time exceed ten (10) Business Days after mutual agreement between
the
Purchaser and the Company as to the terms thereof. In addition to the foregoing,
the Company acknowledges that the Purchaser may complete a Pass-Through Transfer
on or prior to the Servicing Transfer Date.
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(e) Continuing
Liabilities. All of the Mortgage Loans, including those Mortgage Loans that
are
subject to a Pass-Through Transfer, an Agency Transfer or a Whole Loan Transfer,
shall continue to be subject to this Agreement, unless otherwise specified
in
the Reconstitution Agreement. Further, all Mortgage Loans repurchased by
the
Purchaser pursuant with respect to an Agency Transfer, Pass-Through Transfer
or
Whole Loan Transfer or otherwise directly or indirectly reacquired by the
Purchaser or its designee upon termination of an Agency Transfer or Pass-Through
Transfer or otherwise, shall be subject to this Agreement and shall continue
to
be serviced in accordance with the terms of this Agreement and with respect
thereto this Agreement shall remain in full force and effect.
Section
8.02. Purchaser’s
Repurchase and Indemnification Obligations.
Upon
receipt by the Purchaser of notice from Xxxxxx Xxx, Xxxxxxx Mac or other
such
third party purchaser of a breach of any Purchaser representation or warranty
contained in any Reconstitution Agreement or a request by Xxxxxx Mae, Xxxxxxx
Mac, the trustee or third party purchaser as the case may be, for the repurchase
of any Mortgage Loan transferred to Xxxxxx Mae or Xxxxxxx Mac pursuant to
an
Agency Transfer or to a trustee pursuant to a Pass-Through
Transfer
or to a
third party purchaser pursuant to a Whole Loan Transfer.
The
Purchaser shall repurchase from the pool any Mortgage Loan transferred to Xxxxxx
Mae or Xxxxxxx Mac pursuant to an Agency Transfer or to a trustee pursuant
to a
Pass-Through
Transfer
or to a
third party purchaser pursuant to a Whole Loan Transfer with respect to which
the Purchaser has been required by Xxxxxx Mae, Xxxxxxx Mac, the trustee or
such
third party purchaser to repurchase due to a breach of a representation or
warranty made by the Purchaser with respect to the Mortgage Loans, or the
servicing thereof prior to the related Closing Date to Xxxxxx Mae, Xxxxxxx
Mac,
the trustee or any third party purchaser in any Reconstitution Agreement
and not
due to a breach of the Company’s representations or obligations thereunder or
pursuant to this Agreement. The repurchase price to be paid by the Purchaser
to
the Company shall equal that repurchase price required by Xxxxxx Mae, Xxxxxxx
Mac, or the third party purchaser plus all reasonable costs and expenses
borne
by the Company in connection with the repurchase of such Mortgage Loan from
Xxxxxx Mae, Xxxxxxx Mac, the trustee or the third party purchaser, including,
but not limited to, reasonable and necessary attorneys’ fees.
At
the
time of repurchase, the Custodian and the Company shall arrange for the
reassignment of the repurchased Mortgage Loan to the Purchaser according
to the
Purchaser’s instructions and the delivery to the Custodian of any documents held
by Xxxxxx Mae, Xxxxxxx Mac, the trustee or other relevant third party purchaser
with respect to the repurchased Mortgage Loan pursuant to the related
Reconstitution Agreement. In the event of a repurchase, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser
that
such repurchase has taken place, and amend its servicing records accordingly.
In
connection with any such addition, the Company and the Purchaser shall be
deemed
to have made as to such repurchased Mortgage Loan the representations and
warranties set forth in this Agreement.
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Section
8.03. Provision
of Information.
During
the term of this Agreement, the Company shall furnish to the Purchaser such
periodic, special, or other reports or information and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan, whether
or
not provided for herein, as shall be necessary, reasonable, or appropriate
with
respect to the Purchaser, any regulatory requirement pertaining to the Purchaser
or the purposes of this Agreement. All such reports, documents or information
shall be provided by and in accordance with all reasonable instructions and
directions which the Purchaser may give. Purchaser shall pay any costs related
to any special reports.
The
Company shall execute and deliver all such instruments and take all such
action
as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this
Agreement.
Section
8.04. Financial
Statements; Servicing Facility.
In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective Purchaser a Consolidated Statement of Operations of the
Company
for the most recently completed five fiscal years for which such a statement
is
available, as well as a Consolidated Statement of Condition at the end of
the
last two fiscal years covered by such Consolidated Statement of Operations.
The
Company also shall make available any comparable interim statements to the
extent any such statements have been prepared by or on behalf of the Company
(and are available upon request to members or stockholders of the Company
or to
the public at large). If it has not already done so, the Company shall furnish
promptly to the Purchaser copies of the statement specified above. Unless
requested the Purchaser, the Company shall not be required to deliver any
documents which are publicly available on XXXXX.
The
Company also shall make available to Purchaser or prospective Purchaser a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Company or the financial
statements of the Company, and to permit any prospective Purchaser to inspect
the Company’s servicing facilities or those of any Subservicer for the purpose
of satisfying such prospective Purchaser that the Company and any Subservicer
have the ability to service the Mortgage Loans as provided in this
Agreement.
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ARTICLE
IX.
THE
COMPANY
Section
9.01. Indemnification;
Third Party Claims.
The
Company shall indemnify the Purchaser and hold it harmless against any and
all
claims, losses, damages, penalties, fines, and forfeitures, including, but
not
limited to 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 Company to perform in any way its duties and
service the Mortgage Loans in strict compliance with the terms of this Agreement
entered into pursuant to Section 8.01. The Company immediately shall notify
the
Purchaser if a claim is made by a third party with respect to this Agreement.
The Company shall 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 Company shall follow any written instructions received from the
Purchaser in connection with such claim. The Purchaser promptly shall reimburse
the Company for all amounts advanced by it pursuant to the preceding sentence
except when the claim is in any way related to the Company’s indemnification
pursuant to Section 4.03, or the failure of the Company to (a) service and
administer the Mortgage Loans in compliance with the terms of this Agreement,
and/or (b) comply with applicable law. In addition to the obligations of
the
Company set forth in this Section 9.01, the Purchaser may pursue any and
all
remedies otherwise available at law or in equity; provided, that, the Purchaser
shall not be entitled to any special, indirect or consequential losses or
damages. The obligations of the Company arising under this Section 9.01 shall
survive the termination of this Agreement.
Section
9.02. Merger
or Consolidation of the Company.
The
Company shall keep in full effect its existence, rights and franchises as
a
corporation, and shall obtain and preserve its qualification to do business
as a
foreign corporation in each jurisdiction in which such qualification is or
shall
be necessary to protect the validity and enforceability of this Agreement
or any
of the Mortgage Loans and to perform its duties under this
Agreement.
Any
person into which the Company may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Company
shall be a party, or any Person succeeding to the business of the Company,
shall
be the successor of the Company hereunder, without the execution or filing
of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the successor
or
surviving Person shall be an institution (i) having a net worth of not less
than
$25,000,000, (ii) whose deposits are insured by the FDIC through the BIF
or the
SAIF, and (iii) which is a Xxxxxx Xxx- and Xxxxxxx Mac-approved servicer
in good
standing.
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Section
9.03. Limitation
on Liability of Company and Others.
Neither
the Company nor any of the directors, officers, employees or agents of the
Company shall be under any liability to the Purchaser for any action taken
or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Company or any such person against any Breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement,
or
any liability which would otherwise be imposed by reason of any breach of
the
terms and conditions of this Agreement. The Company and any director, officer,
employee or agent of the Company may rely in good faith on any document of
any
kind prima facie properly executed and submitted by any Person respecting
any
matters arising hereunder. The Company shall not be under any obligation
to
appear in, prosecute or defend any legal action which is not incidental to
its
duties to service the Mortgage Loans in accordance with this Agreement and
which
in its opinion may involve it in any expense or liability, provided, however,
that the Company may, with the consent of the Purchaser, undertake any such
action which it may deem necessary or desirable in respect to this Agreement
and
the rights and duties of the parties hereto. In such event, the Company shall
be
entitled to reimbursement from the Purchaser of the reasonable legal expenses
and costs of such action.
Section
9.04. Limitation
on Resignation and Assignment by Company.
The
Purchaser has entered into this Agreement with the Company and subsequent
Purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore,
the
Company shall neither assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder or any portion hereof (to a Subservicer
or third party in the case of outsourcing routine tasks such as taxes,
insurance, mortgage release and property inspection, in which case the Company
shall be fully liable for such tasks as if the Company performed them itself)
or
sell or otherwise dispose of all or substantially all of its property or
assets
without the prior written consent of the Purchaser, which consent shall be
granted or withheld in the reasonable discretion of the Purchaser; provided,
however, notwithstanding any of the foregoing or any other provision in this
Agreement, the Company may assign its rights and obligations hereunder to
Countrywide Home Loans Servicing LP or an Affiliate of the Company and the
Company guarantees the performance by Countrywide Home Loans Servicing LP
or
such Affiliate of all obligations hereunder.
The
Company shall not resign from the obligations and duties hereby imposed on
it
except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced
by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company’s responsibilities and obligations hereunder in the manner provided in
Section 12.01.
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Without
in any way limiting the generality of this Section 9.04, in the event that
the
Company either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its duties hereunder or any portion thereof (to a
Subservicer or third party in the case of outsourcing routine tasks such
as
taxes, insurance, mortgage release and property inspection, in which case
the
Company shall be fully liable for such tasks as if the Company performed
them
itself) or sell or otherwise dispose of all or substantially all of its property
or assets, without the prior written consent of the Purchaser, then the
Purchaser shall have the right to terminate this Agreement upon notice given
as
set forth in Section 10.01, without any payment of any penalty or damages
and
without any liability whatsoever to the Company or any third party.
ARTICLE
X.
DEFAULT
Section
10.01. Events
of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Company:
(i) any
failure by the Company to remit to the Purchaser any payment required to
be made
under the terms of this Agreement which continues unremedied for a period
of two
days after the date upon which written notice of such failure, requiring
the
same to be remedied, shall have been given to the Company by the Purchaser;
or
(ii) the
failure by the Company duly to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Company set forth
in
this Agreement which continues unremedied for a period of 30 days after the
date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Purchaser; or
(iii) the
Company fails to be in compliance with the “doing business” or licensing laws of
any jurisdiction which noncompliance materially and adversely affects the
Company’s ability to service the Mortgage Loans in compliance with the terms of
this Agreement which continues unremedied for a period of 30 days after the
date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Purchaser; or
(iv) a
decree
or order of a court or agency or supervisory authority having jurisdiction
for
the appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, including bankruptcy, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Company and such decree or order shall
have
remained in force undischarged or unstayed for a period of 60 days;
or
(v) the
Company shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets
and
liabilities or similar proceedings of or relating to the Company or of or
relating to all or substantially all of its property; or
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(vi) the
Company shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency,
bankruptcy or reorganization statute, make an assignment for the benefit
of its
creditors, voluntarily suspend payment of its obligations or cease its normal
business operations for three Business Days; or
(vii) the
Company ceases to meet the qualifications of a Xxxxxx Xxx or Xxxxxxx Mac
servicer; or
(viii) the
Company fails to maintain a minimum net worth of $25,000,000; or
(ix) the
Company attempts to assign its right to servicing compensation hereunder
or the
Company attempts, without the consent of the Purchaser, to sell or otherwise
dispose of all or substantially all of its property or assets or to assign
this
Agreement or the servicing responsibilities hereunder or to delegate its
duties
hereunder or any portion thereof (to a Subservicer or third party in the
case of
outsourcing routine tasks such as taxes, insurance, mortgage release and
property inspection, in which case the Company shall be fully liable for
such
tasks as if the Company performed them itself) in violation of Section
9.04.
In
each
and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatsoever rights the Purchaser may have at law
or
equity to damages, including injunctive relief and specific performance,
the
Purchaser, by notice in writing to the Company, may terminate all the rights
and
obligations of the Company under this Agreement and in and to the Mortgage
Loans
and the proceeds thereof.
Upon
receipt by the Company of such written notice, all authority and power of
the
Company under this Agreement, whether with respect to the Mortgage Loans
or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.01. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor’s
possession all Mortgage Files, and do or cause to be done all other acts
or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company’s sole
expense. The Company shall cooperate with the Purchaser and such successor
in
effecting the termination of the Company’s responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Section
10.02. Waiver
of Defaults.
By
a
written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose
of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
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ARTICLE
XI.
TERMINATION
Section
11.01. Termination.
This
Agreement shall terminate upon the earliest of: (i) later of the final payment
or other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder, (ii) the exercise of
the
Purchaser’s right pursuant to Section 10.01 to terminate this Agreement upon an
Event of Default, (iii) mutual agreement of the Company and the Purchaser
in
writing and (iv) the operation of Section 11.02. All representations,
warranties, rights to audits, indemnity obligations, and other remedies
available to the Purchaser under this Agreement, at law or in equity, will
survive the termination of this Agreement.
Section
11.02. Termination
Without Cause.
The
Purchaser may terminate, after providing 30 days’ written notice, at its sole
option, any rights the Company may have hereunder, without cause, as provided
in
this Section 11.02. Any such notice of termination shall be in writing and
delivered to the Company by registered mail as provided in Section
12.09.
In
the
event the Purchaser terminates the Company without cause with respect to
some or
all of the Mortgage Loans, the Purchaser shall be required to pay to the
Company
a Termination Fee in an amount equal to 2.00% of the outstanding principal
balance of the terminated Mortgage Loans as of the date of such termination
or
fair market value of the Company’s servicing rights.
ARTICLE
XII.
MISCELLANEOUS
PROVISIONS
Section
12.01. Successor
to Company.
Prior
to
termination of the Company’s responsibilities and duties under this Agreement
pursuant to Sections 9.04, 10.01, 11.01(iii) or pursuant to Section 11.02
after
the 90 day period has expired, the Purchaser shall, (i) succeed to and assume
all of the Company’s responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth
in
clauses (i) through (iii) of Section 9.02 and which shall succeed to all
rights
and assume all of the responsibilities, duties and liabilities of the Company
under this Agreement prior to the termination of Company’s responsibilities,
duties and liabilities under this Agreement. In connection with such appointment
and assumption, the Purchaser may make such arrangements for the compensation
of
such successor out of payments on Mortgage Loans as it and such successor
shall
agree. In the event that the Company’s duties, responsibilities and liabilities
under this Agreement should be terminated pursuant to the aforementioned
sections, the Company shall discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until
the
effective date thereof with the same degree of diligence and prudence which
it
is obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition
of
its successor. The resignation or removal of the Company pursuant to the
aforementioned sections shall not become effective until a successor shall
be
appointed pursuant to this Section 12.01 and shall in no event relieve the
Company of the representations and warranties made pursuant to Sections 4.01
and
4.02 and the remedies available to the Purchaser under Sections 4.03 and
4.04,
it being understood and agreed that the provisions of such Sections 4.01,
4.02,
4.03, and 4.04 shall be applicable to the Company notwithstanding any such
sale,
assignment, resignation or termination of the Company, or the termination
of
this Agreement.
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The
Company shall prepare, execute and deliver to the successor entity any and
all
documents and other instruments in the Company’s possession relating to the
Mortgage Loans, place in such successor’s possession all related Servicing
Files, and do or cause to be done all other acts or things reasonably necessary
or appropriate by a terminated servicer to effect the purposes of such notice
of
termination, including but not limited to the transfer of the Mortgage Notes
and
related collateral documents. The Company shall reasonably cooperate with
the
Purchaser and such successor in effecting the termination of the Company’s
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor Company, including without limitation,
the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Company to the Custodial Account or
Escrow
Account or thereafter received with respect to the Mortgage Loans.
Any
termination or resignation of the Company or termination of this Agreement
pursuant to Section 9.04, 10.01, 11.01 or 11.02 shall not affect any claims
that
any Purchaser may have against the Company arising out of the Company’s actions
or failure to act prior to any such termination or resignation.
The
Company shall deliver promptly to the successor servicer the funds in the
Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account
for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest
in the
successor all such rights, powers, duties, responsibilities, obligations
and
liabilities of the Company.
Upon
a
successor’s acceptance of appointment as such, the Company shall notify by mail
the Purchaser of such appointment in accordance with the procedures set forth
in
Section 12.09.
Section
12.02. Amendment.
This
Agreement may be amended from time to time by the Company and the Purchaser
by
written agreement signed by the Company and the Purchaser.
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Section
12.03. Closing.
Each
closing for the purchase and sale of Mortgage Loans hereunder shall take
place
on the related Closing Date. The closing shall be either: by telephone,
confirmed by letter or wire as the parties shall agree.
Each
closing for a Mortgage Loan Package shall be subject to each of the following
conditions unless waived by the prejudiced party(ies):
(a) No
later
than the date set forth in the related Purchase Price and Terms Letter, the
Company shall deliver to the Purchaser a Mortgage Loan Schedule with respect
to
the Mortgage Loans to be purchased and sold on such date;
(b) all
of
the representations and warranties of the Company under this Agreement 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;
(c) the
Purchaser shall have received, or the Purchaser’s attorneys shall have received
in escrow, all closing documents as specified in Section 12.04 of this
Agreement, in such forms as are agreed upon by the parties, duly executed
by all
signatories as required pursuant to the respective terms thereof;
(d) The
Company shall have delivered and released to the Custodian on or prior to
the
related Closing Date all documents required to be delivered prior to the
related
Closing Date pursuant to this Agreement;
and
(e) all
other
terms and conditions of this Agreement and the related Purchase Price and
Terms
Letter that are required to be performed on or prior to the Closing Date
shall
have been complied with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Company on the
related Closing Date the Purchase Price, plus accrued interest pursuant to
Article III of this Agreement, plus the costs specified in Section 12.05
by wire
transfer of immediately available funds to the account designated by the
Company.
Section
12.04. Closing
Documents.
(a) The
closing documents to be delivered on the initial Closing Date shall consist
of
fully executed originals of the following documents, as well as the documents
referred to in Section 12.04(b):
(i) this
Agreement;
(ii) a
Custodial Account Letter Agreement, in the form of Exhibit
C;
(iii) an
Escrow
Account Letter Agreement, in the form of Exhibit
D;
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(iv) an
Officer’s Certificate, in the form of Exhibit
F
hereto,
including all attachments thereto; and
(v) an
Opinion of Counsel of the Company, substantially in the form of Exhibit
G
hereto.
(b) The
closing documents for the Mortgage Loans to be purchased on each Closing
Date
under this Agreement (including the initial Closing Date) shall consist of
fully
executed originals of the following documents:
(i) the
related Purchase Price and Terms Letter;
(ii) the
related Acknowledgment and Conveyance Agreement, including all annexes
thereto;
(iii) each
of
the documents required to be delivered by the Company pursuant to Section
2.03
hereof;
(iv) an
assignment and assumption of the Custodial Agreement;
(v) an
initial certification of the Custodian;
(vi) (A)
if
applicable a Security Release Certification, in the form of Exhibit
H-1
hereto
(if Company is a member of the Federal Home Loan Bank System), executed by
the
applicable regional Federal Home Loan Bank and, (B) if applicable, a Security
Release Certification, in the form of Exhibit
H-2
hereto,
executed by any other 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 and (C) if applicable, a
certificate of the Company and an opinion of counsel of the Company stating
that
the Mortgage Loans are not subject to any security interest, claim, pledge,
hypothecation or lien;
(vii) 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 Company by merger or acquired or originated by the Company while
conducting business under a name other than its present name;
(viii) upon
request by the Purchaser, an Officer’s Certificate, in the form of Exhibit
F
hereto,
including all attachments thereto; and
(ix) upon
request by the Purchaser, an Opinion of Counsel to the Company, substantially
in
the form of Exhibit
G
hereto.
The
Company shall bear the risk of loss of the Closing Documents until such time
as
they are received by the Purchaser or its attorneys.
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Section
12.05. Assignments
of Mortgage; Costs.
The
Purchaser shall pay any commissions due its salesmen and the legal fees and
expenses of its attorneys. All other costs and expenses incurred in connection
with the transfer and delivery of the Mortgage Loans, including fees for
the
preparation and tracking of Assignments of Mortgage, fees for title policy
endorsements and continuations and the Company’s attorney’s fees, shall be paid
by the Company. In addition, on the related Closing Date, the Purchaser shall
deduct from the Purchase Price $75.00 for each Mortgage Loan missing a tax
service contract and $18.00 for each Mortgage Loan missing a flood
certification.
Section
12.06. Arbitration.
With
respect to (a) any Mortgage Loan in the conforming balance group originated
by
the Company from August 1, 2004 through April 30, 2005 and (b) any Mortgage
Loan
in the conforming balance group originated by any other entity through April
30,
2005, the Company represents, warrants and covenants that if the related
Mortgage or the related Mortgage Note, or any document relating to the loan
transaction, contains a mandatory arbitration clause (that is, a clause that
requires the Mortgagor to submit to arbitration to resolve any dispute arising
out of or relating in any way to the mortgage loan transaction), Company
(i)
will notify the related Mortgagor in writing within 60 days after the Closing
Date that none of the seller, the servicer that acquires an interest in the
loan
or services such arbitration clause against the Mortgagor, but that the
Mortgagor will continue to have the right to submit a dispute to arbitration
and
(ii) will place a copy of such notice in the Mortgage File and with respect
to
any Mortgage Loan originated on or after May 1, 2005, neither the related
Mortgage nor the related Mortgage Note requires the Mortgagor to submit to
arbitration to resolve any dispute arising out of or relating in any way
to the
mortgage loan transaction.
Section
12.07. Confidential
Information
The
Company and the Purchaser shall keep confidential and shall not divulge to
any
party, without the other party’s prior written consent, the Purchase Price paid
by the Purchaser for any Mortgage Loan or Mortgage Loan Package, except to
the
extent that it is appropriate for the Company to do so in working with legal
counsel, auditors, taxing authorities or other governmental
agencies.
Section
12.08. Safeguarding
Customer Information
The
Company represents that it has implemented, and covenants that it shall
maintain, security measures designed to meet the objectives of the Interagency
Guidelines Establishing Information Security Standards (the “Guidelines”),
Section 216 of the Fair and Accurate Transactions Act (including its
implementing regulations, “FACTA”),
as
well as any amendments thereto or other applicable regulations regarding
safeguarding information enacted or released by a regulatory agency having
jurisdiction over the Company. In addition, the Company represents to the
Purchaser that it has in place a response program to respond to any incident
of
unauthorized access to Customer Information (as defined in the Guidelines)
.
-
66 -
The
Company shall, upon written request and execution by the Purchaser and its
designee, if applicable, of a mutually agreeable non-disclosure agreement,
promptly provide the Purchaser with information regarding such information
security measures upon the reasonable request of the Purchaser or its designee
(including any Master Servicer of the Mortgage Loans) which information shall
include, but not be limited to, any Statement on Auditing Standards (SAS)
No. 70
report covering the Company’s operations related to this Agreement, and, if
necessary, any other external audit reports, summaries of test results or
equivalent measures or evaluations taken by the Company with respect to its
security measures related to this Agreement.
The
obligations set forth in this Section 12.08 shall survive termination of
this
Agreement.
Section
12.09. Notices.
All
notices, requests, demands and other communications which are required or
permitted to be given under this Agreement shall be in writing and shall
be
deemed to have been duly given upon the delivery or mailing thereof, as the
case
may be, sent by registered or certified mail, return receipt requested, or,
if
by other means, when received by the other party at the address shown in
this
Section 12.09, 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):
If
to
Purchaser to:
Xxxxxx
Brothers Bank, FSB
000
Xxxxxxx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Contract Finance
with
a
copy to:
Aurora
Loan Services LLC
000
Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx,
XX 00000
Attn:
E. Xxxx Xxxxxxxxxx
Mail
Stop - 3195
If
to
Company to:
Countrywide
Home Loans, Inc.
0000
Xxxx
Xxxxxxx
Xxxxxxxxx,
Xxxxxxxxxx 00000
Attn:
Xx.
Xxxx Xxxxxxx
With
copy
to: General Counsel
-
67 -
Section
12.10. Severability
of Provisions.
Any
part,
provision, representation or warranty of this Agreement that is prohibited
or
that is held to be void or unenforceable shall be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of this
Agreement that 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 that 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 as close as possible to the economic effect of this
Agreement, without regard to such invalidity.
Section
12.11. Counterparts.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed,
shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement.
Section
12.12. Place
of Delivery and Governing Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS,
RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section
12.13. Further
Agreements.
The
Purchaser and the Company each agree to execute and deliver to the other
such
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
Section
12.14. Intention
of the Parties.
It
is the
intention of the parties that the Purchaser is purchasing, and the Company
is
selling, 100% ownership interest in the Mortgage Loans and not a debt instrument
of the Company or another security. Accordingly, the parties hereto each
intend
to treat each transaction for Federal income tax purposes as a sale by the
Company, 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.
-
68 -
Section
12.15. Successors
and Assigns; Assignment by the Purchaser.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Company and the Purchaser and the respective permitted successors and assigns
of
the Company and the successors and assigns of the Purchaser. This Agreement
shall not be assigned, pledged or hypothecated by the Company to a third
party
without the prior written consent of the Purchaser. Except
as
specifically set forth in Article 7 of this Agreement, the Purchaser may
not
assign this Agreement to any Person without the Company’s prior written
consent.
Section
12.16. Waivers;
Other Agreements.
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
12.17. 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) the
exhibits to this Agreement are hereby incorporated and made a part hereof
and
are an integral part of this Agreement;
(c) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(d) 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;
(e) a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(f) 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
(g) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
Section
12.18. 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.
-
69 -
Section
12.19. 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 initial recordation to be effected
at
the Company’s expense in the event recordation is either necessary under
applicable law or requested by the Purchaser at its sole option.
Section
12.20. No
Personal Solicitation.
From
and
after the related Closing Date, the Company hereby 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 or independent mortgage brokerage
companies on the Company’s behalf, to personally, by telephone or mail, solicit
the Mortgagor under any Mortgage Loan for the purpose of refinancing such
Mortgage Loan; provided, that the Company may solicit any Mortgagor for whom
the
Company or its affiliates has received a request for verification of mortgage,
a
request for demand for payoff, a Mortgagor initiated written or verbal
communication indicating a desire to prepay the related Mortgage Loan, or
the
Mortgagor initiates a title search, provided further, it is understood and
agreed that promotions undertaken by the Company or any of its affiliates
which
(i) concern optional insurance products or other additional products, (ii)
are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio and
television advertisements and (iii)
solicitations made as a part of a campaign directed to borrowers with mortgage
loans meeting certain defined parameters, provided, that such solicitations
are
made to all borrowers of mortgage loans serviced by the Company and its
Affiliates with respect to mortgage loans meeting such defined parameters,
including, but not limited to, those mortgage loans serviced for the Company
and/or its Affiliates own account,
shall
not constitute solicitation under this Section 12.20 nor is the Company
prohibited from responding to unsolicited requests or inquiries made by a
Mortgagor or an agent of a Mortgagor. Notwithstanding the foregoing, the
following solicitations, if undertaken by the Company or any affiliate of
the
Company, shall not be prohibited under this Section 12.20: (i) solicitations
that are directed to the general public at large, including, without limitation,
mass mailings based on commercially acquired mailing lists and newspaper,
radio,
television and other mass media advertisements and (ii) borrower messages
included on, and statement inserts provided with, the monthly statements
sent to
Mortgagors; provided, however, that similar messages and inserts are sent
to the
borrowers of other mortgage loans serviced by the Company or any affiliate
of
the Company.
-
70 -
Section
12.21. Appointment
and Designation of Master Servicer.
The
Purchaser may, in its sole discretion from time to time, engage a master
servicer (the “Master Servicer”) to assist the Purchaser in the supervision of
the performance by the Company of its obligations and responsibilities arising
under this Agreement. In the event that the Purchaser so appoints a Master
Servicer, the Purchaser shall provide written notice thereof to the Company.
From the date of such notice until such time as the Company receives written
notice from the Purchaser that it has terminated or replaced such Master
Servicer, the Company shall deliver all notices, reports and remittances
that
the Company is obligated to deliver to the Purchaser under this Agreement
directly to the Master Servicer named in such notice (or to any successor
master
servicer named in any subsequent written notice received from the Purchaser).
The Master Servicer shall have the rights to enforce the obligations of the
Company under this Agreement on behalf of the Purchaser. Notwithstanding
anything herein to the contrary, in no event shall the Master Servicer assume
any of the obligations of the Purchaser under this Agreement; provided, however,
that it is hereby understood and agreed upon by the Company and the Purchaser
that the obligations of the Purchaser under this Agreement shall be retained
by
the Purchaser. The Purchaser hereby appoints Aurora Loan Services LLC as
its
initial Master Servicer hereunder.
Section
12.22. Regulation
AB Addendum.
The
Company and the Purchaser hereby agree that Exhibit
I
hereto
regarding provisions related to Regulation AB (the “Regulation AB Addendum”) is
hereby expressly incorporated into, and made a part of, this Agreement. If
the
provisions of the Regulation AB Addendum are inconsistent with the provisions
of
this Agreement, then the Regulation AB Addendum shall control.
Section
12.23. Documents
Mutually Drafted.
The
Company and the Purchaser agree that this Agreement and each other document
prepared in connection with the transactions set forth herein have been mutually
drafted and negotiated by each party, and consequently such documents shall
not
be construed against either party as the drafter thereof.
[Signature
page follows]
-
71 -
IN
WITNESS WHEREOF,
the
Company and the Purchaser have caused their names to be signed hereto by
their
respective officers thereunto duly authorized as of the day and year first
above
written.
XXXXXX
BROTHERS BANK, FSB
By:
___________________________
Name:
Xxxx X. Xxxxxx
Title:
Vice President
COUNTRYWIDE
HOME LOANS, INC.
By:
___________________________
Name:
Title:
S-1
EXHIBIT
A-1
FORM
OF
ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
(Group
No. 200_-____)
This
is
an Acknowledgment and Conveyance Agreement delivered pursuant to that certain
Flow Mortgage Loan Purchase, Warranties and Servicing Agreement, dated as
of
March 1, 2006 (the “Agreement”),
between XXXXXX BROTHERS BANK, FSB (the “Purchaser”),
and
COUNTRYWIDE
HOME LOANS, INC.
(the
“Company”).
All
capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Agreement.
The
Purchaser and the Company hereby confirm that they have reached agreement
on the
purchase, sale and servicing of the Mortgage Loans described on the Mortgage
Loan Schedule attached as Annex 1 hereto on the terms and conditions set
forth
in the Purchase Agreement (which terms and conditions are incorporated herein
by
this reference) and the Purchase Price and Terms Letter, dated as of
[___________ __, 200_] between the parties hereto.
Accordingly,
on this [___ day of _________, 200_], the Company does hereby sell, transfer,
assign, set over and convey to the Purchaser all right, title and interest
of
the Company in and to the Mortgage Loans, excluding the servicing rights
related
thereto which shall be retained by the Company, listed on the Mortgage Loan
Schedule attached as Annex 1 hereto, including all interest and principal
received by the Company on or with respect to the Mortgage Loans after the
related Cut-off Date, together with all of the Company’s right, title and
interest in and to each Custodial Account and all amounts from time to time
credited to and the proceeds of such Custodial Account, all amounts from
time to
time credited to and the proceeds of any Escrow Account, any Liquidation
Proceeds or Condemnation Proceeds, any REO Disposition Proceeds, the Company’s
rights under any insurance policies related to the Mortgage Loans, the Policy
related to each Mortgage Loan and all rights of the Company thereunder, any
Insurance Proceeds, the Company’s security interest in any collateral pledged to
secure the Mortgage Loans, including the Mortgaged Properties, and any proceeds
of the foregoing. Pursuant to Article II of the Agreement, the Company has
delivered to the Custodian the documents for each Mortgage Loan to be purchased
as set forth in the Agreement. The ownership of each Mortgage Note, Mortgage,
and the contents of the Mortgage File and Servicing File are vested in the
Purchaser and the ownership of all records and documents required to be included
in the Mortgage Loan File and Servicing File but not delivered or received
until
after the Closing Date shall immediately vest in the Purchaser.
By
its
execution and delivery of this Acknowledgment and Conveyance Agreement, the
Company represents and warrants to the Purchaser that each of the
representations and warranties contained in Sections 4.01 and 4.02 of the
Agreement and Annex
2
hereto
is true and correct as of the date hereof with respect to the Company and
each
of the Mortgage Loans listed on the Mortgage Loan Schedule attached as
Annex
1
hereto.
In addition, the Company represents and warrants to the Purchaser that the
Underwriting Guidelines set forth on Annex
3
hereto
are the Underwriting Guidelines used by the Company with respect to the
origination of the Mortgage Loans in this Mortgage Loan Package.
A-1-1
By
its
execution and delivery of this Acknowledgment and Conveyance Agreement, the
Company agrees that it shall service the Mortgage Loans on behalf of the
Purchaser in accordance with the terms and conditions contained in the
Agreement.
This
Acknowledgment and Conveyance Agreement may be executed simultaneously in
any
number of counterparts. Each counterpart shall be deemed an original, and
all
such counterparts shall constitute one and the same instrument.
COUNTRYWIDE
HOME LOANS, INC.,
as
Company
By:
___________________________
Name:
Title:
XXXXXX
BROTHERS BANK, FSB, as Purchaser
By:
___________________________
Name:
Title:
A-1-2
Annex
1
to
Acknowledgment
and Conveyance Agreement
MORTGAGE
LOAN SCHEDULE
[Each
Mortgage Loan Schedule shall provide the information required by Exhibit
A-2 to
the Agreement with respect to each Mortgage Loan as of the related Cut-Off
Date.]
A-1-3
Annex
2
to
Acknowledgment
and Conveyance Agreement
POOL
CHARACTERISTICS
The
Company hereby represents and warrants to the Purchaser, as to each Mortgage
Loan, that as of March 1, 2006 or as of such other date specifically provided
therein:
Pool
Characteristics.
With
respect to the aggregate unpaid principal balance of all of the Mortgage
Loans
as of the Closing Date, (a) the Mortgage Loans are secured by real property
improved by one- to four- family dwellings with original terms of up to [___]
years, (b) with respect to each ARM Mortgage Loan the Index shall be as set
forth on the Mortgage Loan Schedule, (c) the maximum Mortgage Interest Rate
of
the Mortgage Loans is [___]%, (d) the minimum Mortgage Interest Rate of the
Mortgage Loans is [___]%, (e) the Mortgage Loans have a weighted average
remaining term of [___] months, (f) each of the Mortgaged Properties consists
of
a single parcel of real property of which (i) at least [___]% are attached
or
detached one family residences, (ii) approximately [___]% are individual
condominium units in a condominium project, (iii) approximately [___]% are
units
in planned unit developments, (iv) approximately [___]% are two-to-four family
residential dwellings, (v) not more than [___]% are townhouses and (vi) not
more
than [___]% are manufactured housing which are permanently affixed to the
ground, (g) no more than [___]% of the Mortgage Loans are rate-term refinance
mortgage loans, (h) no more than [___]% of the Mortgage Loans are cash out
refinance mortgage loans, (i) at least [___]% of the Mortgage Loans are purchase
money mortgage loans, (j) the Mortgaged Properties are located as follows
(i)
approximately [___]% in [___], (ii) approximately [___]% in [___] and (iii)
no
other state shall contain a percentage which is greater than [___]% and (k)
with
respect to the ARM Mortgage Loans, the weighted average initial period gross
Lifetime Rate Cap shall be [___]% and the weighted average lifetime Mortgage
Interest Rate of [___]%. With respect to the aggregate unpaid principal balance
of the Mortgage Loans at the time of origination, (a) no more than [___]%
of the
Mortgaged Properties were investment properties and (b) at least [___]% of
the
Mortgaged Properties were owner-occupied primary residences. With respect
to the
aggregate unpaid principal balance of the Mortgage Loans, (a) at least [___]%
of
the Mortgage Loans shall have full documentation, (b) no more than [___]%
of the
Mortgage Loans shall have stated income documentation and (c) no more than
[___]% of the Mortgage Loans shall have alternate income documentation. The
maximum LTV at origination of the Mortgage Loans in Pool 1 was not more than
[___]% and the maximum LTV at origination of the Mortgage Loans in Pool 2
was
not more than [___]%. The weighted average LTV at origination of the Mortgage
Loans in Pool 1 was not more than [___]% and the weighted average LTV at
origination of the Mortgage Loans in Pool 2 was not more than [___]%. The
weighted average FICO Score of the Mortgage Loans in Pool 1 is not less than
[___] and the weighted average FICO Score of the Mortgage Loans in Pool 2
is not
less than [__]. The Mortgage Loans have the approximate pool characteristics
as
set forth in the Purchase Price and Terms Letter.
A-1-4
Annex
3
to
Acknowledgment
and Conveyance Agreement
COMPANY’S
UNDERWRITING GUIDELINES
X-0-0
XXXXXXX
X-0
MORTGAGE
LOAN SCHEDULE DATA FIELDS
|
(1)
|
the
Company’s Mortgage Loan identifying
number;
|
|
(2)
|
the
Mortgagor’s and Co-Mortgagor’s (if applicable)
names;
|
|
(3)
|
the
street address of the Mortgaged Property, including the city, state,
zip
code, county;
|
|
(4)
|
a
code indicating whether the Mortgaged Property is a single family
residence, a 2 family dwelling, a 3-4 family dwelling, a manufactured
home, a PUD, a townhouse, a unit in a condominium project, a co-operative,
a mixed-use property, land, or a non-residential
property;
|
|
(5)
|
a
code indicating the loan is a fixed rate or adjustable rate
Mortgage;
|
|
(6)
|
Product;
|
|
(7)
|
a
code indicating the lien status of the Mortgage
Loan;
|
|
(8)
|
the
original months to maturity or the remaining months to maturity
from the
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;
|
|
(9)
|
the
Loan to Value Ratio at origination;
|
|
(10)
|
the
combined Loan to Value Ratio at
origination;
|
|
(11)
|
the
Mortgage Interest Rate as of the Cut-off
Date;
|
|
(12)
|
the
Payment and Rate Adjustment Frequencies (if
applicable);
|
|
(13)
|
the
Index (if applicable);
|
|
(14)
|
the
initial Interest Rate Adjustment Date (if
applicable);
|
|
(15)
|
the
initial Payment Adjustment Date (if
applicable);
|
|
(16)
|
the
next Interest Rate Adjustment Date (if
applicable);
|
|
(17)
|
the
next Payment Adjustment Date (if
applicable);
|
|
(18)
|
the
Gross Margin (if applicable);
|
A-2-1
|
(19)
|
the
minimum Mortgage Interest Rate under the terms of the Mortgage
Note (if
applicable);
|
|
(20)
|
a
code indicating Interest Only Loans
(Y/N);
|
|
(21)
|
the
maximum Mortgage Interest Rate under the terms of the Mortgage
Note (if
applicable);
|
|
(22)
|
the
Mortgage Interest Rate adjustment cap at the initial Interest Rate
Adjustment Date (if applicable);
|
|
(23)
|
the
Mortgage Interest Rate adjustment cap at all subsequent Interest
Rate
Adjustment Dates (if applicable);
|
|
(24)
|
the
Lifetime Mortgage Interest Rate Cap (if applicable);
|
|
(25)
|
the
rounding provisions under the terms of the Mortgage Note (if
applicable);
|
|
(26)
|
the
lookback provisions (#of days) under the terms of the Mortgage
Note (if
applicable);
|
|
(27)
|
negative
amortization indicator;
|
|
(28)
|
the
date on which the first payment is
due;
|
|
(29)
|
the
original term of the Mortgage Loan;
|
|
(30)
|
the
stated maturity date;
|
|
(31)
|
the
amount of the monthly principal and interest
Payment;
|
|
(32)
|
the
Annual Payment Cap expressed as a percentage (for Arms
only);
|
|
(33)
|
the
next due date as of the Cut-off
Date;
|
|
(34)
|
the
original principal amount of the Mortgage
Loan;
|
|
(35)
|
the
origination date of the Mortgage
Loan;
|
|
(36)
|
the
principal balance of the Mortgage Loan as of the close of business
on the
Cut-off Date; after deduction of payments of principal actually
received
on or before the Cut-off Date;
|
|
(37)
|
the
loan documentation type;
|
A-2-2
|
(38)
|
the
loan purpose code;
|
|
(39)
|
the
occupancy code;
|
|
(40)
|
the
Mortgage Loan FICO score at
origination;
|
|
(41)
|
the
purchase price of the Mortgaged Property (if a
purchase);
|
|
(42)
|
the
Appraisal value of the Mortgaged
Property;
|
|
(43)
|
amortization
term;
|
|
(44)
|
balloon
flag;
|
|
(45)
|
prepayment
penalty flag;
|
|
(46)
|
prepayment
penalty term;
|
|
(47)
|
The
MIN number assigned to each Mortgage Loan, if
applicable;
|
The
following data fields will be provided on the data tape by Company to Purchaser,
but shall not be considered to be part of the Mortgage Loan
Schedule:
|
(1)
|
the
Senior balances, if applicable
|
|
(2)
|
monthly
payment histories on current mortgages (12 months
);
|
|
(3)
|
prior
foreclosure history, if available;
|
|
(4)
|
prior
bankruptcy history, if available;
|
|
(5)
|
Asset
Verification (Purchase Money Loans only), (yes or
no);
|
|
(6)
|
the
Mortgagor’s and Co-Mortgagor’s (if applicable) social security
numbers;
|
|
(7)
|
the
Mortgagor’s and Co-Mortgagor’s (if applicable)
race;
|
|
(8)
|
the
Mortgagor’s and Co-Mortgagor’s (if applicable)
gender;
|
|
(9)
|
the
combined annual income;
|
|
(10)
|
as
of date;
|
|
(11)
|
the
escrow balance as of the Cut-off Date;
|
A-2-3
|
(12)
|
a
code indicating the Appraisal Type (Tax Assessment, BPO, Drive-By
Form
704, URAR, Form 2065, Form 2055 (Exterior only), Form 2055 (Interior
Inspection), or AVM;
|
|
(13)
|
the
Appraisal Type in #12 is an AVM, then a description of the AVM
type;
|
|
(14)
|
a
code indicating whether the loan is High Cost or Covered (HC, CV,
HL);
and
|
|
(15)
|
Section
32 flag.
|
A-2-4
EXHIBIT
B
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 Purchaser
pursuant to Section 2.03 of the Purchase Agreement to which this Exhibit
is
attached (the “Agreement”):
|
(a)
|
The
original Mortgage Note bearing all intervening endorsements and
including
any riders to the Mortgage Note, endorsed “Pay to the order of
___________________________________, without recourse and signed
in the
name of the previous owner by an authorized officer;
|
|
(b)
|
the
original of any guarantee executed in connection with the Mortgage
Note
(if any);
|
|
(c)
|
the
original Mortgage with evidence of recording thereon, or copies
certified
by the related recording office or if the original Mortgage has
not yet
been returned from the recording office, a copy certified by the
Company
indicating that such Mortgage has been delivered for recording.
The return
directions for the original Mortgage should indicate, when recorded,
mail
to the Company;
|
|
(d)
|
the
originals of all assumption, modification, consolidation or extension
agreements, (or, if an original of any of these documents has not
been
returned from the recording office, a certified copy thereof, the
original
to be delivered to the Company forthwith after return from such
recording
office) with evidence of recording thereon, if any;
|
|
(e)
|
the
original Assignment of Mortgage as appropriate, in recordable form,
for
each Mortgage Loan to ___________________;
|
|
(f)
|
the
originals of any intervening recorded Assignments of Mortgage,
showing a
complete chain of assignment from origination to the Company, including
warehousing assignments, with evidence of recording thereon (or,
if an
original intervening Assignment of Mortgage has not been returned
from the
recording office, a certified copy thereof, the original to be
delivered
to the Custodian forthwith after return from such recording office);
|
|
(g)
|
the
original mortgage title insurance policy;
|
|
(h)
|
the
original primary mortgage insurance certificate, if any; and
|
|
(i)
|
such
other documents as from time to time may be delivered to the Purchaser
in
accordance with this Agreement.
|
B-1
EXHIBIT
C
CUSTODIAL
ACCOUNT LETTER AGREEMENT
_________________,
200_
|
To:
|
||
|
(the
“Depository”)
|
As
Company under the Flow Mortgage Loan Purchase, Warranties and Servicing
Agreement, dated as of March 1, 2006 (the “Agreement”), we hereby authorize and
request you to establish an account, as a Custodial Account pursuant to Section
5.04 of the Agreement, to be designated as “Countrywide Home Loans, Inc., in
trust for Xxxxxx Brothers Bank, purchaser of Residential Mortgage Loans,
Group
No. 2006-Flow.” All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Company. You may refuse any deposit which
would
result in violation of the requirement that the account be fully insured
as
described below. This letter is submitted to you in duplicate. Please execute
and return one original to us.
|
COUNTRYWIDE
HOME LOANS, INC.
Company
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Date:
|
||
C-1
The
undersigned, as Depository, hereby certifies that the above described account
has been established under Account Number __________, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account will
be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund (“BIF”) or the Savings Association Insurance Fund (“SAIF”).
| Depository | ||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Date:
|
||
C-2
EXHIBIT
D
ESCROW
ACCOUNT LETTER AGREEMENT
___________________,
200_
|
To:
|
||
|
(the
“Depository”)
|
As
Company under the Flow Mortgage Loan Purchase, Warranties and Servicing
Agreement, dated as of March 1, 2006 (the “Agreement”), we hereby authorize and
request you to establish an account, as an Escrow Account pursuant to Section
5.06 of the Agreement, to be designated as “Countrywide Home Loans, Inc., in
trust for Xxxxxx Brothers Bank, purchaser of Residential Mortgage Loans,
Group
No. 2006-Flow, and various Mortgagors.” All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Company. You may refuse
any deposit which would result in violation of the requirement that the account
be fully insured as described below. This letter is submitted to you in
duplicate. Please execute and return one original to us.
|
COUNTRYWIDE
HOME LOANS, INC.
Company
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Date:
|
||
D-1
The
undersigned, as Depository, hereby certifies that the above described account
has been established under Account Number ______, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account will
be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund (“BIF”) or the Savings Association Insurance Fund (“SAIF”).
| Depository | ||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Date:
|
||
D-2
EXHIBIT
E-1
FORM
OF
MONTHLY REMITTANCE ADVICE
|
FIELD
NAME
|
DESCRIPTION
|
FORMAT
|
||
|
INVNUM
|
|
INVESTOR
LOAN NUMBER
|
|
Number
no decimals
|
|
SERVNUM
|
|
SERVICER
LOAN NUMBER, REQUIRED
|
|
Number
no decimals
|
|
BEGSCHEDBAL
|
|
BEGINNING
SCHEDULED BALANCE FOR SCHED/SCHED
|
|
Number
two decimals
|
|
|
|
BEGINNING
TRAIL BALANCE FOR ACTUAL/ACTUAL,
|
|
|
|
|
|
REQUIRED
|
|
|
|
SCHEDPRIN
|
|
SCHEDULED
PRINCIPAL AMOUNT FOR SCHEDULED/SCHEDULED
|
|
Number
two decimals
|
|
|
|
ACTUAL
PRINCIPAL COLLECTED FOR ACTUAL/ACTUAL,
|
|
|
|
|
|
REQUIRED,
.00 IF NO COLLECTIONS
|
|
|
|
CURT1
|
|
CURTAILMENT
1 XXXXXX, .00 IF NOT APPLICABLE
|
|
Number
two decimals
|
|
CURT1DATE
|
|
CURTAILMENT
1 DATE, BLANK IF NOT APPLICABLE
|
|
DD-MMM-YY
|
|
CURT1ADJ
|
|
CURTAILMENT
1 ADJUSTMENT, .00 IF NOT APPLICABLE
|
|
Number
two decimals
|
|
CURT2
|
|
CURTAILMENT
2 XXXXXX, .00 IF NOT APPLICABLE
|
|
Number
two decimals
|
|
CURT2DATE
|
|
CURTAILMENT
2 DATE, BLANK IF NOT APPLICABLE
|
|
DD-MMM-YY
|
|
CURT2ADJ
|
|
CURTAILMENT
2 ADJUSTMENT, .00 IF NOT APPLICABLE
|
|
Number
two decimals
|
|
LIQPRIN
|
|
PAYOFF,
LIQUIDATION PRINCIPAL, .00 IF NOT APPLICABLE
|
|
Number
two decimals
|
|
OTHPRIN
|
|
OTHER
PRINCIPAL, .00 IF NOT APPLICABLE
|
|
Number
two decimals
|
|
PRINREMIT
|
|
TOTAL
PRINCIPAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE
|
|
Number
two decimals
|
|
INTREMIT
|
|
NET
INTEREST REMIT, INCLUDE PAYOFF INTEREST,
|
|
Number
two decimals
|
|
|
|
.00
IF NOT APPLICABLE
|
|
|
|
TOTREMIT
|
|
TOTAL
REMITTANCE AMOUNT, .00 IF NOT APPLICABLE
|
|
Number
two decimals
|
|
ENDSCHEDBAL
|
|
ENDING
SCHEDULED BALANCE FOR SCHEDULED/SCHEDULED
|
|
Number
two decimals
|
|
|
|
ENDING
TRIAL BALANCE FOR ACTUAL/ACTUAL
|
|
|
|
|
|
.00
IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
|
|
|
|
ENDACTBAL
|
|
ENDING
TRIAL BALANCE
|
|
Number
two decimals
|
|
|
|
.00
IF PAIDOFF, LIQUIDATED OR FULL CHARGEOFF
|
|
|
|
ENDDUEDATE
|
|
ENDING
ACTUAL DUE DATE, NOT LAST PAID INSTALLMENT
|
|
DD-MMM-YY
|
|
ACTCODE
|
|
60
IF PAIDOFF, BLANK IF NOT APPLICABLE
|
|
Number
no decimals
|
|
ACTDATE
|
|
ACTUAL
PAYOFF DATE, BLANK IF NOT APPLICABLE
|
|
DD-MMM-YY
|
|
INTRATE
|
|
INTEREST
RATE, REQUIRED
|
|
Number
seven decimals
|
|
|
|
|
|
Example
.0700000 for 7.00%
|
|
SFRATE
|
|
SERVICE
FEE RATE, REQUIRED
|
|
Number
seven decimals
|
|
|
|
|
|
Example
.0025000 for .25%
|
|
PTRATE
|
|
PASS
THRU RATE, REQUIRED
|
|
Number
seven decimals
|
|
|
|
|
|
Example
.0675000 for 6.75%
|
|
PIPMT
|
|
P&I
CONSTANT, REQUIRED
|
|
Number
two decimals
|
|
|
|
.00
IF PAIDOFF
|
|
|
E-1-1
EXHIBIT
E-2
STANDARD
LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
|
Data
Field
|
Format
|
|
|
Data
Description
|
|
%
of
MI coverage
|
NUMBER(6,5)
|
|
|
The
percent of coverage provided by the PMI company in the event
of loss on a
defaulted loan.
|
|
Actual
MI claim filed date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the claim was submitted to the PMI company.
|
|
Actual
bankruptcy start date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the bankruptcy petition is filed with the
court.
|
|
Actual
MI claim amount filed
|
NUMBER(15,2)
|
|
|
The
amount of the claim that was filed by the servicer with the PMI
company.
|
|
Actual
discharge date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the Discharge Order is entered in the bankruptcy
docket.
|
|
Actual
due date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
due date of the next outstanding payment amount due from the
mortgagor.
|
|
Actual
eviction complete date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the eviction proceedings are completed by local
counsel.
|
|
Actual
eviction start date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the eviction proceedings are commenced by local
counsel.
|
|
Actual
first legal date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that foreclosure counsel filed the first legal action as
defined by
state statute.
|
|
Actual
redemption end date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the foreclosure redemption period expires.
|
|
Bankruptcy
chapter
|
VARCHAR2(2)
|
7=
Chapter 7 filed
12=
Chapter 12 filed
|
11=
Chapter 11 filed
13=
Chapter 13 filed
|
Chapter
of bankruptcy filed.
|
|
Bankruptcy
flag
|
VARCHAR2(2)
|
Y=Active
Bankruptcy
|
N=No
Active Bankruptcy
|
Servicer
defined indicator that identifies that the property is an asset
in an
active bankruptcy case.
|
|
Bankruptcy
Case Number
|
VARCHAR2(15)
|
|
|
The
court assigned case number of the bankruptcy filed by a party
with
interest in the property.
|
E-2-1
|
MI
claim amount paid
|
NUMBER(15,2)
|
|
|
The
amount paid to the servicer by the PMI company as a result of
submitting
an MI claim.
|
|
MI
claim funds received date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that funds were received from the PMI company as a result
of
transmitting an MI claim.
|
|
Current
loan amount
|
NUMBER(10,2)
|
|
|
Current
unpaid principal balance of the loan as of the date of reporting
to Aurora
Master Servicing.
|
|
Date
FC sale scheduled
|
DATE(MM/DD/YYYY)
|
|
|
Date
that the foreclosure sale is scheduled to be held.
|
|
Date
relief/dismissal granted
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the dismissal or relief from stay order is entered
by the
bankruptcy court.
|
|
Date
REO offer accepted
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date of acceptance of an REO offer.
|
|
Date
REO offer received
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date of receipt of an REO offer.
|
|
Delinquency
value
|
NUMBER(10,2)
|
|
|
Value
obtained typically from a BPO prior to foreclosure referral not
related to
loss mitigation activity.
|
|
Delinquency
value source
|
VARCHAR2(15)
|
BPO=
Broker's Price Opinion
|
Appraisal=Appraisal
|
Name
of vendor or management company that provided the delinquency
valuation
amount.
|
|
Delinquency
value date
|
DATE(MM/DD/YYYY)
|
|
|
Date
that the delinquency valuation amount was completed by vendor
or property
management company.
|
|
Delinquency
flag
|
VARCHAR2(2)
|
Y=
90+ delinq. Not in FC, Bky or Loss mit
|
N=Less
than 90 days delinquent
|
Servicer
defined indicator that identifies that the loan is delinquent
but is not
involved in loss mitigation, foreclosure, bankruptcy or
REO.
|
|
Foreclosure
flag
|
VARCHAR2(2)
|
Y=Active
foreclosure
|
N=No
active foreclosure
|
Servicer
defined indicator that identifies that the loan is involved in
foreclosure
proceedings.
|
|
Corporate
expense balance
|
NUMBER(10,2)
|
|
|
Total
of all cumulative expenses advanced by the servicer for non-escrow
expenses such as but not limited to: FC fees and costs, bankruptcy
fees
and costs, property preservation and property
inspections.
|
E-2-2
|
Foreclosure
attorney referral date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the loan was referred to local counsel to begin foreclosure
proceedings.
|
|
Foreclosure
valuation amount
|
NUMBER(15,2)
|
|
|
Value
obtained during the foreclosure process. Usually as a result
of a BPO and
typically used to calculate the bid.
|
|
Foreclosure
valuation date
|
DATE(MM/DD/YYYY)
|
|
|
Date
that foreclosure valuation amount was completed by vendor or
property
management company.
|
|
Foreclosure
valuation source
|
VARCHAR2(80)
|
BPO=
Broker's Price Opinion
|
Appraisal=Appraisal
|
Name
of vendor or management company that provided the foreclosure
valuation
amount.
|
|
FHA
27011A transmitted date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the FHA 27011A claim was submitted to HUD.
|
|
FHA
27011 B transmitted date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the FHA 27011B claim was submitted to HUD.
|
|
VA
LGC/ FHA Case number
|
VARCHAR2(15)
|
|
|
Number
that is assigned individually to the loan by either HUD or VA
at the time
of origination. The number is located on the Loan Guarantee Certificate
(LGC) or the Mortgage Insurance Certificate (MIC).
|
|
FHA
Part A funds received date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that funds were received from HUD as a result of transmitting
the
27011A claim.
|
|
Foreclosure
actual sale date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the foreclosure sale was held.
|
|
Servicer
loan number
|
VARCHAR2(15)
|
|
|
Individual
number that uniquely identifies loan as defined by
servicer.
|
|
Loan
type
|
VARCHAR2(2)
|
1=FHA
Residential
3=Conventional
w/o PMI
5=FHA
Project
7=HUD
235/265
9=Farm
Loan
S=Sub
prime
|
2=VA
Residentia
4=Commercial
6=Conventional
w/PMI
8=Daily
Simple Interest Loan
U=Unknown
|
Type
of loan being serviced generally defined by the existence of
certain types
of insurance (i.e.: FHA, VA, conventional insured, conventional
uninsured,
SBA, etc.).
|
|
Loss
mit approval date
|
DATE(MM/DD/YYYY)
|
|
|
The
date determined that the servicer and mortgagor agree to pursue
a defined
loss mitigation alternative.
|
E-2-3
|
Loss
mit flag
|
VARCHAR2(2)
|
Y=
Active loss mitigation
|
N=No
active loss mitigation
|
Servicer
defined indicator that identifies that the loan is involved in
completing
a loss mitigation alternative.
|
|
Loss
mit removal date
|
DATE(MM/DD/YYYY)
|
|
|
The
date that the mortgagor is denied loss mitigation alternatives
or the date
that the loss mitigation alternative is completed resulting in
a current
or liquidated loan.
|
|
Loss
mit type
|
VARCHAR2(2)
|
L=
Loss Mitigation
NP=Pending
non-performing sale
DI=
Deed in lieu
MO=Modification
SH=Short
sale
|
LT=Litigation
pending
CH=
Charge off
FB=
Forbearance plan
PC=Partial
claim
VA=VA
refunding
|
The
defined loss mitigation alternative identified on the loss mit
approval
date.
|
|
Loss
mit value
|
NUMBER(10,2)
|
|
|
Value
obtained typically from a BPO prior to foreclosure sale intended
to aid in
the completion of loss mitigation activity.
|
|
Loss
mit value date
|
DATE(MM/DD/YYYY)
|
|
|
Name
of vendor or management company that provided the loss mitigation
valuation amount.
|
|
Loss
mit value source
|
VARCHAR2(15)
|
BPO=
Broker's Price Opinion
|
Appraisal=Appraisal
|
Date
that the loss mitigation valuation amount was completed by vendor
or
property management company.
|
|
MI
certificate number
|
VARCHAR2(15)
|
|
|
A
number that is assigned individually to the loan by the PMI company
at the
time of origination. Similar to the VA LGC/FHA Case Number in
purpose.
|
|
LPMI
Cost
|
NUMBER(7,7)
|
|
|
The
current premium paid to the PMI company for Lender Paid Mortgage
Insurance.
|
|
Occupancy
status
|
VARCHAR2(1)
|
O=Owner
occupied
U=Unknown
|
T=Tenant
occupied
V=Vacant
|
The
most recent status of the property regarding who if anyone is
occupying
the property. Typically a result of a routine property
inspection.
|
|
First
Vacancy date/ Occupancy status date
|
DATE(MM/DD/YYYY)
|
|
|
The
date that the most recent occupancy status was determined. Typically
the
date of the most recent property inspection.
|
|
Original
loan amount
|
NUMBER(10,2)
|
|
|
Amount
of the contractual obligations (i.e.: note and mortgage/deed
of
trust).
|
E-2-4
|
Original
value amount
|
NUMBER(10,2)
|
|
|
Appraised
value of property as of origination typically determined through
the
appraisal process.
|
|
Origination
date
|
DATE(MM/DD/YYYY)
|
|
|
Date
that the contractual obligations (i.e.: note and mortgage/deed
of trust)
of the mortgagor was executed.
|
|
FHA
Part B funds received date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that funds were received from HUD as a result of transmitting
the
27011B claim.
|
|
Post
petition due date
|
DATE(MM/DD/YYYY)
|
|
|
The
post petition due date of a loan involved in a chapter 13
bankruptcy.
|
|
Property
condition
|
VARCHAR2(2)
|
1=
Excellent
3=Average
5=Poor
|
2=Good
4=Fair
6=Very
poor
|
Physical
condition of the property as most recently reported to the servicer
by
vendor or property management company.
|
|
Property
type
|
VARCHAR2(2)
3=Condo
6=Prefabricated
7=Mobile
home
A=Church
O=Co-op
CT=Condotel
|
1=Single
family
4=Multifamily
B=Commercial
U=Unknown
P=PUD
M=Manufactured
housing
MU=Mixed
use
|
2=Town
house
5=Other
C=Land
only
D=Farm
R=Row
house
24=
2-4 family
|
Type
of property secured by mortgage such as: single family, 2-4 unit,
etc.
|
|
Reason
for default
|
VARCHAR2(3)
|
001=Death
of principal mtgr
003=Illness
of mtgr's family member
004=Death
of mtgr's family member
006=Curtailment
of income
008=Abandonment
of property
011=Property
problem
013=Inability
to rent property
015=Other
017=Business
failure
022=Energy-Environment
costs
026=
Payment adjustment
029=Transfer
ownership pending
031=Unable
to contact borrower
|
002=Illness
of principal mtgr
005=Marital
difficulties
007=Excessive
obligations
009=Distant
employee transfer
012=Inability
to sell property
014=Military
service
016=Unemployment
019=Casualty
loss
023=
Servicing problems
027=Payment
dispute
030=Fraud
INC=Incarceration
|
Cause
of delinquency as identified by mortgagor.
|
|
REO
repaired value
|
NUMBER(10,2)
|
|
|
The
projected value of the property that is adjusted from the "as
is" value
assuming necessary repairs have been made to the property as
determined by
the vendor/property management
company.
|
E-2-5
|
REO
list price adjustment amount
|
NUMBER(15,2)
|
|
|
The
most recent listing/pricing amount as updated by the servicer
for REO
properties.
|
|
REO
list price adjustment date
|
DATE(MM/DD/YYYY)
|
|
|
The
most recent date that the servicer advised the agent to make
an adjustment
to the REO listing price.
|
|
REO
value (as is)
|
NUMBER(10,2)
|
|
|
The
value of the property without making any repairs as determined
by the
vendor/property management company.
|
|
REO
actual closing date
|
DATE(MM/DD/YYYY)
|
|
|
The
actual date that the sale of the REO property closed
escrow.
|
|
REO
flag
|
VARCHAR2(7)
|
Y=Active
REO
|
N=No
active REO
|
Servicer
defined indicator that identifies that the property is now Real
Estate
Owned.
|
|
REO
original list date
|
DATE(MM/DD/YYYY)
|
|
|
The
initial/first date that the property was listed with an agent
as an
REO.
|
|
REO
original list price
|
NUMBER(15,2)
|
|
|
The
initial/first price that was used to list the property with an
agent as an
REO.
|
|
REO
net sales proceeds
|
NUMBER(10,2)
|
|
|
The
actual REO sales price less closing costs paid. The net sales
proceeds are
identified within the HUD1 settlement statement.
|
|
REO
sales price
|
NUMBER(10,2)
|
|
|
Actual
sales price agreed upon by both the purchaser and servicer as
documented
on the HUD1 settlement statement.
|
|
REO
scheduled close date
|
DATE(MM/DD/YYYY)
|
|
|
The
date that the sale of the REO property is scheduled to close
escrow.
|
|
REO
value date
|
DATE(MM/DD/YYYY)
|
|
|
Date
that the vendor or management company completed the valuation
of the
property resulting in the REO value (as is).
|
|
REO
value source
|
VARCHAR2(15)
|
BPO=
Broker's Price Opinion
|
Appraisal=Appraisal
|
Name
of vendor or management company that provided the REO value (as
is).
|
|
Repay
first due date
|
DATE(MM/DD/YYYY)
|
|
|
The
due date of the first scheduled payment due under a forbearance
or
repayment plan agreed to by both the mortgagor and
servicer.
|
|
Repay
next due date
|
DATE(MM/DD/YYYY)
|
|
|
The
due date of the next outstanding payment due under a forbearance
or
repayment plan agreed to by both the mortgagor and servicer.
|
E-2-6
|
Repay
plan broken/reinstated/closed date
|
DATE(MM/DD/YYYY)
|
|
|
The
servicer defined date upon which the servicer considers that
the plan is
no longer in effect as a result of plan completion or mortgagor's
failure
to remit payments as scheduled.
|
|
Repay
plan created date
|
DATE(MM/DD/YYYY)
|
|
|
The
date that both the mortgagor and servicer agree to the terms
of a
forbearance or repayment plan.
|
|
SBO
loan number
|
NUMBER(9)
|
|
|
Individual
number that uniquely identifies loan as defined by Aurora Master
Servicing.
|
|
Escrow
balance/advance balance
|
NUMBER(10,2)
|
|
|
The
positive or negative account balance that is dedicated to payment
of
hazard insurance, property taxes, MI, etc. (escrow items
only).
|
|
Title
approval letter received date
|
DATE(MM/DD/YYYY)
|
|
|
The
actual date that the title approval was received as set forth
in the HUD
title approval letter.
|
|
Title
package HUD/VA date
|
DATE(MM/DD/YYYY)
|
|
|
The
actual date that the title package was submitted to either HUD
or
VA.
|
|
VA
claim funds received date
|
DATE(MM/DD/YYYY)
|
|
|
The
actual date that funds were received by the servicer from the
VA for the
expense claim submitted by the servicer.
|
|
VA
claim submitted date
|
DATE(MM/DD/YYYY)
|
|
|
The
actual date that the expense claim was submitted by the servicer
to the
VA.
|
|
VA
first funds received amount
|
NUMBER(15,2)
|
|
|
The
amount of funds received by the servicer from VA as a result
of the
specified bid.
|
|
VA
first funds received date
|
DATE(MM/DD/YYYY)
|
|
|
The
date that the funds from the specified bid were received by the
servicer
from the VA.
|
|
VA
XXX submitted date
|
DATE(MM/DD/YYYY)
|
|
|
Actual
date that the Notice of Election to Convey was submitted to the
VA.
|
|
Zip
Code
|
VARCHAR2(5)
|
|
|
U.S.
postal zip code that corresponds to property
location.
|
E-2-7
|
FNMA
Delinquency status code
|
VARCHAR2(3)
24=Drug
seizure
28=Modification
31=Probate
44=Deed-in-lieu
62=VA
no-bid
65=Ch.
7 bankruptcy
|
09=Forbearance
26=Refinance
29=Charge-off
32=Military
indulgence
49=Assignment
63=VA
Refund
66=Ch.
11 bankruptcy
|
17=Preforeclosure
sale
27=Assumption
30=Third-party
sale
43=Foreclosure
61=Second
lien considerations
64=VA
Buydown
67=Ch.
13 bankruptcy
|
The
code that is electronically reported to FNMA by the servicer
that reflects
the current defaulted status of a loan (i.e.: 65, 67, 43 or
44).
|
|
FNMA
delinquency reason code
|
VARCHAR2(3)
|
001=Death
of principal mtgr
003=Illness
of mtgr's family member
005=Marital
difficulties
007=Excessive
obligations
009=Distant
employee transfer
012=Inability
to sell property
014=Military
service
016=Unemployment
019=Casualty
loss
023=
Servicing problems
027=Payment
dispute
030=Fraud
INC=Incarceration
|
002=Illness
of principal mtgr
004=Death
of mtgr's family member
006=Curtailment
of income
008=Abandonment
of property
011=Property
problem
013=Inability
to rent property
015=Other
017=Business
failure
022=Energy-Environment
costs
026=
Payment adjustment
029=Transfer
ownership pending
031=Unable
to contact borrower
|
The
code that is electronically reported to FNMA by the servicer
that
describes the circumstance that appears to be the primary contributing
factor to the delinquency.
|
|
Suspense
balance
|
NUMBER(10,2)
|
|
|
Money
submitted to the servicer, credited to the mortgagor's account
but not
allocated to principal, interest, escrow, etc.
|
|
Restricted
escrow balance
|
NUMBER(10,2)
|
|
|
Money
held in escrow by the mortgage company through completion of
repairs to
property.
|
|
Investor
number
|
NUMBER
(10,2)
|
|
|
Unique
number assigned to a group of loans in the servicing system.
|
E-2-8
EXHIBIT
F
COMPANY’S
OFFICER’S CERTIFICATE
I,
____________________, hereby certify that I am the duly elected [Vice] President
of Countrywide Home Loans, Inc., a state chartered institution organized
under
the laws of the state of New York, (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.
(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.
(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 each of the Flow Mortgage Loan Purchase, Warranties and
Servicing Agreement, Group No. 2006-Flow dated March 1, 2006 by and between
the
Company and Xxxxxx Brothers Bank, FSB (the “Purchaser”) (the “Purchase
Agreement”) and to endorse the Mortgage Notes and execute the Assignments of
Mortgages by original signature, and such resolutions are in effect on the
date
hereof and have been in effect without amendment, waiver, rescission or
modification.
(5) The
Company is duly authorized to engage in the transactions described and
contemplated in the Purchase Agreement.
F-1
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
|
Dated:
|
By:
|
|||
|
[Seal]
|
Name: | |||
| Title: [Vice] President | ||||
I,
________________________, an [Assistant] Secretary of Countrywide Home Loans,
Inc., 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:
|
|||
|
[Seal]
|
Name: | |||
| Title: [Vice] President | ||||
F-2
EXHIBIT
5
to
Company’s
Officer’s Certificate
|
Name
|
Title
|
Signature
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-3
EXHIBIT
G
FORM
OF
OPINION OF COUNSEL TO THE COMPANY
(date)
Xxxxxx
Brothers Bank, FSB
000
Xxxxxxx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Dear
Sirs:
You
have
requested [our] [my] opinion, as [Assistant] General Counsel to Countrywide
Home
Loans, Inc. (the “Company”), with respect to certain matters in connection with
the sale by the Company of the Mortgage Loans pursuant to that certain Flow
Mortgage Loan Purchase, Warranties and Servicing Agreement by and between
the
Company and Xxxxxx Brothers Bank, FSB (the “Purchaser”), Group No. 2006-Flow
dated as of March 1, 2006 (the “Purchase Agreement”) which sale is in the form
of whole loans, serviced pursuant thereto. Capitalized terms not otherwise
defined herein have the meanings set forth in the Purchase Agreement.
[We]
[I]
have examined the following documents:
|
1.
|
the
Purchase 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 contained in the Purchase
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.
|
|
2.
|
The
Company has the power to engage in the transactions contemplated
by the
Purchase Agreement and all requisite power, authority and legal
right to
execute and deliver the Purchase Agreement, and to perform and
observe the
terms and conditions of the Purchase
Agreement.
|
G-1
|
3.
|
The
Purchase Agreement 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 any of its officers to
execute
any and all documents by original signature in order to complete
the
transactions contemplated by the Purchase Agreement and by original
signature in order to execute the endorsements to the Mortgage
Notes and
the Assignments of Mortgages, and the original 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.
|
|
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 or the sale of the Mortgage Loans or the consummation
of the transactions contemplated by the Purchase Agreement; 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, 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.
|
|
7.
|
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
Purchase
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 to perform
under
the terms of the Purchase
Agreement.
|
G-2
|
8.
|
The
sale of each Mortgage Note and Mortgage as and in the manner contemplated
by the Purchase Agreement is sufficient to fully transfer to the
Purchaser
all right, title and interest of the Company thereto as noteholder
and
mortgagee.
|
|
9.
|
The
Mortgages have been duly assigned and the Mortgage Notes have been
duly
endorsed as provided in the Purchase 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.
|
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
G-3
EXHIBIT
H-1
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 Countrywide Home Loans, Inc., a corporation
organized pursuant to the laws of the state of New York (the “Company”) has
committed to sell to Xxxxxx Brothers Bank, FSB under a Flow Mortgage Loan
Purchase, Warranties and Servicing Agreement Group No. 2006-Flow, dated as
of
March 1, 2006, certain mortgage loans originated by the Company. The Company
warrants that the mortgage loans to be sold to Xxxxxx Brothers Bank, FSB
on this
date pursuant to the Acknowledgment and Conveyance Agreement dated as of
________ (the “Related Loans”) are in addition to and beyond any collateral
required to secure advances made by the Association to the Company.
The
Company acknowledges that the Related Loans shall not be used as additional
or
substitute collateral for advances made by the Association. Xxxxxx Brothers
Bank, FSB 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 Related Loans.
H-1-1
Very
truly yours,
Countrywide
Home Loans, Inc.
By:
_______________________
Name:
Title:
Date:
Acknowledged
and approved:
FEDERAL
HOME LOAN BANK OF
________________________
By:
_________________________
Name:
Title:
Date:
X-0-0
XXXXXXX
X-0
SECURITY
RELEASE CERTIFICATION
I.
Release
of Security Interest
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
Brothers Bank, FSB from the Company named below pursuant to that certain
Flow
Mortgage Loan Purchase, Warranties and Servicing Agreement, Group No. 2006-Flow,
dated as of March 1, 2006 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 Brothers Bank,
FSB
pursuant to the Acknowledgment and Conveyance Agreement dated as of
__________.
Name
and
Address of Financial Institution
_____________________________________________
(name)
_____________________________________________
(Address)
By:
________________________________________________
H-2-1
II.
Certification
of Release
The
Company named below hereby certifies to Xxxxxx Brothers Bank, FSB, that,
as of
the date and time of the sale of the above-mentioned Mortgage Loans to Xxxxxx
Brothers Bank, FSB, 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.
Countrywide
Home Loans, Inc.
By:
___________________________
Name:
Date:
H-2-2
EXHIBIT
I
REGULATION
AB ADDENDUM
1. Definitions.
Capitalized terms used herein but not otherwise defined shall have the meanings
set forth in the Flow Mortgage Loan Purchase, Warranties and Servicing Agreement
(the “Flow Agreement”) to which this Regulation AB Addendum (this “Addendum”) is
attached. The Flow Agreement and this Addendum may be collectively referred
to
in this Addendum as “this Agreement”. In addition, the following terms shall
have the following meanings.
Commission:
The
United States Securities and Exchange Commission.
Company
Information:
As
defined in Section 2(g)(i)(A)(1).
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Qualified
Correspondent:
Any
Person from which the Company purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Company and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Company, in accordance with underwriting guidelines designated by the
Company (“Designated Guidelines”) or guidelines that do not vary materially from
such Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten
as described in clause (i) above; and (iii) either (x) the Designated Guidelines
were, at the time such Mortgage Loans were originated, used by the Company
in
origination of mortgage loans of the same type as the Mortgage Loans for
the
Company’s own account or (y) the Designated Guidelines were, at the time such
Mortgage Loans were underwritten, designated by the Company on a consistent
basis for use by lenders in originating mortgage loans to be purchased by
the
Company; and (iv) the Company employed, at the time such Mortgage Loans were
acquired by the Company, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage
loans
properly applied the underwriting criteria designated by the Company.
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
Reconstitution
Agreement:
An
agreement or agreements entered into by the Company and the Purchaser and/or
certain third parties in connection with a Reconstitution with respect to
any or
all of the Mortgage Loans serviced under the Agreement.
I-1
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject
to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan.
7, 2005)) or by the staff of the Commission, or as may be provided by the
Commission or its staff from time to time.
Securities
Act:
The Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (1) a sale or other transfer of some or all
of the
Mortgage Loans directly or indirectly to an issuing entity in connection
with an
issuance of publicly offered, rated mortgage-backed securities or (2) an
issuance of publicly offered, rated securities, the payments on which are
determined primarily by reference to one or more portfolios of residential
mortgage loans consisting, in whole or in part, of some or all of the Mortgage
Loans.
Servicer:
As
defined in Section 2(c)(iii).
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or
more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Company or a
Subservicer.
Subservicer:
Any
Person that services Mortgage Loans on behalf of the Company or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Company under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB;
provided, for the avoidance of doubt, that the term “Subservicer” shall not
include (i) any master servicer, or any special servicer engaged at the request
of a Depositor, Purchaser or investor in a Securitization Transaction or
(ii)
any “back-up servicer” or trustee performing servicing functions on behalf of a
Securitization Transaction, in each case so long as such party does not act
on
behalf of the Company or any Subservicer.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Company.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.
I-2
2. General
Provisions.
(a)
Intent
of the Parties; Reasonableness.
The
Purchaser and the Company acknowledge and agree that the purpose of this
Section
2 is to facilitate compliance by the Purchaser and any Depositor with the
provisions of Regulation AB and related rules and regulations of the Commission.
Because Regulation AB is applicable by its terms only to offerings of
asset-backed securities that are registered under the Securities Act and
there
are market uncertainties with respect to the disclosure that investors in
privately offered securities may request, the parties agree over time to
negotiate in good faith with respect to the provision of comparable disclosure
in private offerings.
Neither
the Purchaser nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder.
The
Company acknowledges that interpretations of the requirements of Regulation
AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets or advice of counsel, and agrees to negotiate in good
faith
with the Purchaser or any Depositor with regard to reasonable requests for
delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection
with any Securitization Transaction, the Company shall cooperate fully with
the
Purchaser to deliver to the Purchaser (including any of its assignees or
designees) and any Depositor, any and all statements, reports, certifications,
records and any other information necessary, to permit the Purchaser or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Company, any Subservicer, any Third-Party Originator
and the Mortgage Loans, or the servicing of the Mortgage Loans necessary
in
order to effect such compliance.
The
Purchaser (including any of its assignees or designees) shall cooperate with
the
Company by providing timely notice of requests for information under these
provisions and by reasonably limiting such requests to information required,
in
the Purchaser’s reasonable judgment, to comply with Regulation AB.
(b) Additional
Representations and Warranties of the Company.
(i) The
Company shall be deemed to represent to the Purchaser and to any Depositor,
as
of the date on which information is first provided to the Purchaser or any
Depositor under Section 2(c) and as of the closing date of each related
Securitization Transaction that, except as disclosed in writing to the Purchaser
or such Depositor prior to such date: (A)
the Company is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any
other
securitization due to any act or failure to act of the Company; (B) the
Company has not been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; (C) no
material noncompliance
with the applicable servicing criteria with respect to other securitizations
of
residential mortgage loans involving the Company as servicer
has been disclosed or reported by the Company; (D) no material
changes to the Company’s policies or procedures with respect to the servicing
function it will perform under this Agreement and any Reconstitution Agreement
for mortgage loans of a type similar to the Mortgage Loans
have occurred during the three-year period immediately preceding the related
Securitization Transaction; (E) there are no aspects of the Company’s financial
condition that could have a material adverse effect on the performance by
the
Company of its servicing obligations under this Agreement or any Reconstitution
Agreement;
(F) there are no material
legal or governmental proceedings pending (or known to be contemplated) against
the Company, any Subservicer or any Third-Party Originator;
and (G) there
are
no affiliations or relationships and related transactions required to be
disclosed under Item 1119 between the Company, any Subservicer or any
Third-Party Originator and any of the parties listed in Section
2(c)(i)(D)(4)-(9) which are identified in writing by the Purchaser or Depositor
in advance of the Securitization Transaction pursuant to Section 2(c)(i)(D)
of
this Addendum.
I-3
(ii) If
so requested by the Purchaser or any Depositor,
the Company shall make reasonable best efforts within five Business Days
but in
no event later than ten Business Days following such request, to (a) confirm
in
writing the accuracy of the representations and warranties set forth in
paragraph (i)(A)-(G) of this Section or (b) confirm in writing the accuracy
of
the representations and warranties set forth in paragraphs (i)(F) and (i)(G)
of
this Section on any date following the
date
on which information is first provided to the Purchaser or any Depositor
under
Section 2(c),
if any such representation and warranty is not accurate as of the date of
such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
(c) Information
to Be Provided by the Company.
In
connection with any Securitization Transaction the Company shall (1)
make
reasonable best efforts within five Business Days but in no event later than
ten
Business Days
following request by the Purchaser or any Depositor, provide to the Purchaser
and such Depositor (or, as applicable, cause each Third-Party Originator
and
each Subservicer to provide), in writing reasonably necessary
for compliance with Regulation AB,
the
information and materials specified in paragraphs (i), (ii), (iii) and (vi)
of
this Section 2(c), and (2) as promptly as practicable following notice to
or
discovery by the Company, provide to the Purchaser and any Depositor (in
writing) the information specified in paragraph (iv) of this
Section.
(i) If
so
requested by the Purchaser or any Depositor, the Company shall provide such
information regarding (x) the Company, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent,
if
applicable), or (y) as applicable, each Third-Party Originator, and (z) as
applicable, each Subservicer, as is requested for the purpose of compliance
with
Items 1103(a)(1), 1105 (subject
to paragraph (b) below),
1110,
1117 and 1119 of Regulation AB. Such information shall include, at a
minimum:
(A) the
originator’s form of organization;
I-4
(B) to
the
extent material, a description of the originator’s origination program and how
long the originator has been engaged in originating residential mortgage
loans,
which description shall include a discussion of the originator’s experience in
originating mortgage loans of a similar type as the Mortgage Loans; if material,
information regarding the size and composition of the originator’s origination
portfolio; and information that may be material to an analysis of the
performance of the Mortgage Loans, including the originators’ credit-granting or
underwriting criteria for mortgage loans of similar type(s) as the Mortgage
Loans and such other information as the Purchaser or any Depositor may
reasonably request for the purpose of compliance with Item 1110(b)(2) of
Regulation AB;
(C) a
description of any material legal or governmental proceedings pending (or
known
to be contemplated by
governmental authorities)
against
the Company, each Third-Party Originator, if applicable, and each Subservicer;
and
(D) a
description of any affiliation or relationship between the Company, each
Third-Party Originator, if applicable, each Subservicer and any of the following
parties to a Securitization Transaction, as such parties are identified to
the
Company by the Purchaser or any Depositor in writing in advance of such
Securitization Transaction:
(1) the
sponsor;
(2) the
depositor;
(3) the
issuing entity;
(4) any
servicer;
(5) any
trustee;
(6) any
originator;
(7) any
significant obligor;
(8) any
enhancement or support provider; and
(9) any
other
material transaction party.
(ii) If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (a) the Company, if the Company is an originator of Mortgage
Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent,
if
applicable), and/or (b) as applicable, each Third-Party Originator. Such
Static
Pool Information shall be prepared by the Company (or, if applicable, a
Third-Party Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(1)-(3) of Regulation AB.
To
the extent that there is reasonably available to the Company (or Third-Party
Originator, as applicable) Static Pool Information with respect to more than
one
mortgage loan type, the Purchaser or any Depositor shall be entitled to specify
whether some or all of such information shall be provided pursuant to this
paragraph. The content of such Static Pool Information may be in the form
customarily provided by the Company, and need not be customized for the
Purchaser or any Depositor. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall be presented
in
increments no less frequently than quarterly over the life of the mortgage
loans
included in the vintage origination year or prior securitized pool. The most
recent periodic increment must be as of a date no later than 135 days prior
to
the date of the prospectus or other offering document in which the Static
Pool
Information is to be included or incorporated by reference. The Static Pool
Information shall be provided in an electronic format that provides a permanent
record of the information provided, such as a portable document format (pdf)
file, or other such electronic format.
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Promptly
following notice or discovery of a material error,
as determined in the Company’s sole discretion, in
Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Company shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same
format
in which Static Pool Information was previously provided to such party by
the
Company.
If
so
requested by the Purchaser or any Depositor, the Company shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense
of the
requesting party (to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon procedures letters
of certified public accountants pertaining to Static Pool Information relating
to prior securitized pools for securitizations closed on or after January
1,
2006 or, in the case of Static Pool Information with respect to the Company’s
or, if applicable, Third-Party Originator’s originations or purchases, to
calendar months commencing January 1, 2006, as the Purchaser or such Depositor
shall reasonably request. Such letters shall be addressed to and be for the
benefit of such parties as the Purchaser or such Depositor shall designate,
which shall be limited to any Sponsor, any Depositor, any broker dealer acting
as underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction or any other party that is reasonably and customarily
entitled to receive such statements and letters in a Securitization Transaction
at the time of delivery. Any such statement or letter may take the form of
a
standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(iii) If
reasonably requested by the Purchaser or any Depositor, the Company shall
provide such information regarding the Company, as servicer of the Mortgage
Loans, and each Subservicer (each of the Company and each Subservicer, for
purposes of this paragraph, a “Servicer”), as is requested for the purpose of
compliance with Item 1108 of Regulation AB. Such information shall include,
at a
minimum:
(A) the
Servicer’s form of organization;
(B) a
description of how long the Servicer has been servicing residential mortgage
loans; a general discussion of the Servicer’s experience in servicing assets of
any type as well as a more detailed discussion of the Servicer’s experience in,
and procedures for, the servicing function it will perform under this Agreement
and any Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer’s portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the Servicer
that may be material, in the reasonable determination of the Purchaser or
any
Depositor, to any analysis of the servicing of the Mortgage Loans or the
related
asset-backed securities, as applicable, including, without
limitation:
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(1) whether
any prior securitizations of mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing during the three-year
period immediately preceding the related Securitization
Transaction;
(2) the
extent of outsourcing the Servicer utilizes;
(3) whether
there has been previous disclosure of material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential mortgage
loans involving the Servicer as a servicer during the three-year period
immediately preceding the related Securitization Transaction;
(4) whether
the Servicer has been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; and
(5) such
other information as the Purchaser or any Depositor may reasonably request
for
the purpose of compliance with Item 1108(b)(2) of Regulation AB;
(C) a
description of any material changes during the three-year period immediately
preceding the related Securitization Transaction to the Servicer’s policies or
procedures with respect to the servicing function it will perform under this
Agreement and any Reconstitution Agreements for mortgage loans of a type
similar
to the Mortgage Loans;
(D) information
regarding the Servicer’s financial condition, to the extent that there is a
material risk that an adverse financial event or circumstance involving the
Servicer could have a material adverse effect on the performance by the Company
of its servicing obligations under this Agreement or any Reconstitution
Agreement;
(E) information
regarding advances made by the Servicer on the Mortgage Loans and the Servicer’s
overall servicing portfolio of residential mortgage loans for the three-year
period immediately preceding the related Securitization Transaction, which
may
be limited to a statement by an authorized officer of the Servicer to the
effect
that the Servicer has made all advances required to be made on residential
mortgage loans serviced by it during such period, or, if such statement would
not be accurate, information regarding the percentage and type of advances
not
made as required, and the reasons for such failure to advance;
(F) a
description of the Servicer’s processes and procedures designed to address any
special or unique factors involved in servicing loans of a similar type as
the
Mortgage Loans;
(G) a
description of the Servicer’s processes for handling delinquencies, losses,
bankruptcies and recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts; and
I-7
(H) information
as to how the Servicer defines or determines delinquencies and charge-offs,
including the effect of any grace period, re-aging, restructuring, partial
payments considered current or other practices with respect to delinquency
and
loss experience.
(iv) If
reasonably requested by the Purchaser or any Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act with respect to
any
class of asset-backed securities, the Company shall (a) notify the Purchaser
and
any Depositor in writing of (1) any material litigation or governmental
proceedings pending against the Company, any Subservicer or any Third-Party
Originator and (b) provide to the Purchaser and any Depositor a description
of
such proceedings.
(v) As
a
condition to the succession to the Company or any Subservicer as servicer
or
subservicer under this Agreement or any applicable Reconstitution Agreement
by
any Person (i) into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Company
or
any Subservicer, the Company shall provide to the Purchaser and any Depositor,
at least 15 calendar days (in the event that Purchaser or Depositor is unaware
of any such successor) prior to the effective date of such succession or
appointment, (x) written notice to the Purchaser and any Depositor of such
succession or appointment and (y) in writing, all information reasonably
requested by the Purchaser or any Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to any class
of
asset-backed securities.
(vi) In
addition to such information as the Company, as servicer, is obligated to
provide pursuant to other provisions of this Agreement, if reasonably requested
by the Purchaser or any Depositor, the Company shall provide such information
reasonably available to the Company regarding the performance or servicing
of
the Mortgage Loans as is reasonably required to facilitate preparation of
distribution reports in accordance with Item 1121 of Regulation AB; provided
that to the extent that any such information requested by the Purchaser or
any
Depositor is not readily available to the Company, the time for delivery
of such
information by the Company to the Purchaser or any Depositor shall be such
period that does not interfere with the facilitation or preparation of
distribution reports in accordance with Item 1121 of Regulation AB. Such
information shall be provided concurrently with the monthly reports otherwise
required to be delivered by the Company under this Agreement, commencing
with
the first such report due not less than ten Business Days following such
request
or such longer period as provided herein.
(vii) If
reasonably requested in writing by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Company shall provide
to
the Purchaser and any Depositor a description of any affiliations or
relationships required to be disclosed under Item 1119 of Regulation AB between
the Company, any Subservicer or any Third-Party Originator and any of the
parties listed clauses (i)(4)-(9) of this Section 2(c) that develop following
the closing date of a Securitization Transaction. For purposes of the foregoing,
to the extent that the Company does not receive notification by March 1 of
the
calendar year in which a Form 10-K for the related Securitization Transaction
must be filed, the Company (1) shall be entitled to assume that the parties
to
the Securitization Transaction are the same as such parties listed on the
most
recent previously delivered written notification (or on the closing date,
if no
such written notification has been delivered), (2) shall not be obligated
to
disclose any affiliations or relationships that may develop after the closing
date for the Securitization Transaction with any parties not identified to
the
Company pursuant to clause (D) of paragraph (i) of this Section 2(c), and
(3)
shall be entitled to rely upon any written identification of parties provided
by
the Depositor, the Purchaser or any master servicer.
I-8
(d) Servicer
Compliance Statement.
The
Company shall, using best reasonable efforts on or before March 1, but no
later
than March 15 of each calendar year, commencing in 2007, deliver to the
Purchaser and any Depositor a statement of compliance addressed to the Purchaser
and such Depositor and signed by an authorized officer of the Company, to
the
effect that (i) a review of the Company’s servicing activities during the
immediately preceding calendar year (or applicable portion thereof) and of
its
performance of its servicing activities under this Agreement and any applicable
Reconstitution Agreement during such period has been made under such officer’s
supervision, and (ii) to the best of such officers’ knowledge, based on such
review, the Company has fulfilled all of its servicing obligations under
this
Agreement and any applicable Reconstitution Agreement in all material respects
throughout such calendar year (or applicable portion thereof) or, if there
has
been a failure to fulfill any such servicing obligation in any material respect,
specifically identifying each such failure known to such officer and the
nature
and the status thereof.
(e) Report
on Assessment of Compliance and Attestation.
(i) The
Company shall, using best reasonable efforts on or before March 1, but no
later
than March 15 of each calendar year, commencing in 2007:
(A) deliver
to the Purchaser and any Depositor a report regarding the Company’s assessment
of compliance with the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange
Act and
Item 1122 of Regulation AB. Such report shall be addressed to the Purchaser
and
such Depositor and signed by an authorized officer of the Company, and shall
address each of the applicable Servicing Criteria specified on Annex 2
hereto;
(B) deliver
to the Purchaser and any Depositor a report of a registered public accounting
firm that attests to, and reports on, the assessment of compliance made by
the
Company and delivered pursuant to the preceding paragraph. Such attestation
shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under
the Securities Act and the Exchange Act;
(C) cause
each Subservicer and each Subcontractor determined by the Company pursuant
to
Section 2(f)(ii) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB (each, a “Participating Entity”), to
deliver to the Purchaser and any Depositor an assessment of compliance and
accountants’ attestation as and when provided in paragraphs (i) and (ii) of this
Section 2(e); and
I-9
(D) deliver
to the Purchaser, any Depositor and any other Person that will be responsible
for signing the certification (a “Sarbanes Certification”) required by Rules
13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of
the
Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed issuer with respect
to
a Securitization Transaction a certification in the form of Annex 1 hereto;
provided that such back-up certification delivered by the Company shall not
be
filed as an exhibit to, or included in, any filing with the Commission unless
required by applicable law or interpretive guidance provided by the Commission
or its staff.
The
Company acknowledges that the party identified in clause (i)(D) above may
rely
on the certification provided by the Company pursuant to such clause in signing
a Sarbanes Certification and filing such with the Commission. Neither the
Purchaser nor any Depositor will request delivery of a certification under
clause (i)(D) above unless a Depositor is required under the Exchange Act
to
file an annual report on Form 10-K with respect to an issuing entity whose
asset
pool includes Mortgage Loans.
(ii) Each
assessment of compliance provided by a Subservicer pursuant to Section
2(e)(i)(A) shall address each of the applicable Servicing Criteria specified
on
Annex 2 hereto. An assessment of compliance provided by a Participating Entity
pursuant to Section 2(e)(i)(C) need not address any elements of the Servicing
Criteria other than those specified by the Company pursuant to Section
2(f).
(f) Use
of
Subservicers and Subcontractors.
The
Company shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Company as servicer under this Agreement
or any Reconstitution Agreement unless the Company complies with the provisions
of paragraph (i) of this subsection (f). The Company shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Company as servicer under this Agreement or any
applicable Reconstitution Agreement unless the Company complies with the
provisions of paragraph (ii) of this subsection (f).
(i) It
shall
not be necessary for the Company to seek the consent of the Purchaser or
any
Depositor to the utilization of any Subservicer. The Company shall cause
any
Subservicer used by the Company (or by any Subservicer) for the benefit of
the
Purchaser and any Depositor to comply with the provisions of this Section
and
with Sections 2(b), 2(c)(iii), 2(c)(v), 2(d) and 2(e) of this Agreement to
the
same extent as if such Subservicer were the Company, and to provide the
information required with respect to such Subservicer under Section 2(c)(iv)
of
this Agreement. The Company shall be responsible for obtaining from each
Subservicer and delivering to the Purchaser and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under Section
2(d), any assessment of compliance and attestation required to be delivered
by
such Subservicer under Section 2(e) and any certification required to be
delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 2(e) as and when required to be
delivered.
I-10
(ii) It
shall
not be necessary for the Company to seek the consent of the Purchaser or
any
Depositor to the utilization of any Subcontractor. The Company shall promptly
upon request by the Purchaser and any Depositor provide to such Purchaser
or
Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description of the role and function of each
Subcontractor utilized by the Company or any Subservicer, specifying (A)
the
identity of each such Subcontractor, (B) which (if any) of such Subcontractors
are Participating Entities, and (C) which elements of the Servicing Criteria
will be addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (B) of this paragraph;
provided that such request shall be made for
the
purpose of satisfying the Depositor’s reporting obligation under the Securities
Act and the Exchange Act with respect to such information.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 2(e) of this Agreement
to
the same extent as if such Subcontractor were the Company. The Company shall
be
responsible for obtaining from each Subcontractor and delivering to the
Purchaser and any Depositor any assessment of compliance and attestation
required to be delivered by such Subcontractor under Section 2(e), in each
case
as and when required to be delivered.
(g) Indemnification;
Remedies.
(i) The
Company shall indemnify the Purchaser, each affiliate of the Purchaser, and
each
of the following parties participating in a Securitization Transaction: each
sponsor and issuing entity; each Person responsible for the execution or
filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant
to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction; each broker dealer acting as underwriter, placement
agent or initial purchaser, each Person who controls any of such parties
or the
Depositor (within the meaning of Section 15 of the Securities Act and Section
20
of the Exchange Act); and the respective present and former directors, officers,
employees and agents of each of the foregoing and of the Depositor, and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments,
and
any other costs, fees and expenses that any of them may sustain arising out
of
or based upon:
(A)(1) any
untrue statement of a material fact contained or alleged to be contained
in any
information, report, certification, accountants’ letter or other material
provided in written or electronic form under this Addendum by or on behalf
of
the Company, or provided under this Addendum by or on behalf of any Subservicer,
Participating Entity or, if applicable, Third-Party Originator (collectively,
the “Company Information”), or (2) the omission or alleged omission to state in
the Company Information a material fact required to be stated in the Company
Information or necessary in order to make the statements therein, in the
light
of the circumstances under which they were made, not misleading; provided,
by way of clarification,
that
clause (2) of this paragraph shall be construed solely by reference to the
Company Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the Company
Information or any portion thereof is presented together with or separately
from
such other information;
I-11
(B) any
failure by the Company, any Subservicer, any Participating Entity or any
Third-Party Originator to deliver any information, report, certification,
accountants’ letter or other material when and as required under this Addendum,
including any failure by the Company to identify pursuant to Section 2(f)(ii)
any Subcontractor “participating in the servicing function” within the meaning
of Item 1122 of Regulation AB; or
(C) any
breach by the Company of a representation or warranty set forth in Section
2(b)(i) or in a writing furnished pursuant to Section 2(b)(ii) and made as
of a
date prior to the closing date of the related Securitization Transaction,
to the
extent that such breach is not cured by such closing date, or any breach
by the
Company of a representation or warranty in a writing furnished pursuant to
Section 2(b)(ii) to the extent made as of a date subsequent to such closing
date.
In
the
case of any failure of performance described in clause (i)(B) of this Section,
the Company shall promptly reimburse the Purchaser, any Depositor, as
applicable, and each Person responsible for the execution or filing of any
report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant
to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Company, any Subservicer,
any
Participating Entity or any Third-Party Originator.
(ii) (A) Any
failure by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Amendment Regulation
AB
(including, without limitation, any statement, writing or notification required
by a representation or warranty set forth in Section 2), shall, except as
provided in clause (B) of this paragraph, if not cured within three (3) Business
Days of the Company’s receipt of notice of such failure (or immediately and
automatically, without notice or grace period, in the event that such failure
will result or has resulted in the Purchaser’s or its affiliated sponsor’s loss
of right, for which the Purchaser or Depositor cannot obtain a waiver from
the
Commission, to maintain any registration statement relating to securitization
transactions of the same type as the Securitization Transactions contemplated
hereunder) constitute an Event of Default with respect to the Company under
this
Agreement and any applicable Reconstitution Agreement, and shall entitle
the
Purchaser or Depositor, as applicable, in its sole discretion to terminate
the
rights and obligations of the Company as servicer under this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement or any applicable Reconstitution Agreement to
the
contrary) of any compensation to the Company; provided
that to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
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(B) Any
failure by the Company, any Subservicer or any Participating Entity to deliver
any information, report, certification or accountants’ letter when and as
required under Section 2(d) or 2(e), including (except as provided below)
any
failure by the Company to identify pursuant to Section 2(f)(ii) any
Subcontractor “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB, which continues unremedied for ten calendar days
after the date on which such information, report, certification or accountants’
letter was required to be delivered shall constitute an Event of Default
with
respect to the Company under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Purchaser or Depositor, as applicable, in
its
sole discretion to terminate the rights and obligations of the Company as
servicer under this Agreement and/or any applicable Reconstitution Agreement
without payment (notwithstanding anything in this Agreement to the contrary)
of
any compensation to the Company; provided, however
it is
understood that the Company shall remain entitled to receive reimbursement
for
all unreimbursed Monthly Advances and Servicing Advances made by the Company
under this Agreement and/or any applicable Reconstitution Agreement.
Notwithstanding anything to the contrary set forth herein, to the extent
that
any provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given
effect.
Neither
the Purchaser nor any Depositor shall be entitled to terminate the rights
and
obligations of the Company pursuant to this subparagraph (ii)(B) if a failure
of
the Company to identify a Subcontractor “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB was attributable
solely to the role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.
(C) The
Company shall promptly reimburse the Purchaser (or any designee of the
Purchaser, such as a master servicer) and any Depositor, as applicable, for
all
reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to
a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of
this
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance
or
injunctive relief.
(iii) The
Purchaser shall indemnify and
hold harmless the
Company, each affiliate of the Company, any Subservicer, any Participating
Entity, and, if applicable, any Third-Party Originator, each Person who controls
any of such parties (within the meaning of Section 15 of the Securities Act
and
Section 20 of the Exchange Act) and the respective present and former directors,
officers, employees and agents of each of the foregoing and of the Company,
from
and against any losses, damages, penalties, fines, forfeitures, legal fees
and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
I-13
(A)
any
untrue statement of a material fact contained or alleged to be contained
in any
offering materials and
filings with the Commission related
to a Securitization Transaction, including without limitation the registration
statement, prospectus and prospectus supplement, and any amendments or
supplements to the foregoing (collectively, the “Securitization Materials”),
or
(B)
the
omission or alleged omission to state in the Securitization Materials a material
fact required to be stated in the Securitization Materials or necessary in
order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading,
but,
in
each case, only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is other than the Company
Information.
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3.
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Subservicers
and Subcontractors.
The Company acknowledges that a Subservicer or Subcontractor that
performs
services with respect to mortgage loans involved in a Securitization
Transaction in addition to the Mortgage Loans may be determined
by a
Depositor to be a Participating Entity on the basis of the aggregate
balance of such mortgage loans, without regard to whether such
Subservicer
or Subcontractor would be a Participating Entity with respect to
the
Mortgage Loans viewed in isolation. The Company shall (A) respond
as
promptly as practicable to any good faith request by the Purchaser
or any
Depositor for information regarding each Subservicer’s and each
Subcontractor’s role and (B) cause each Subservicer and each Subcontractor
with respect to which the Purchaser or any Depositor requests delivery
of
an assessment of compliance and accountants’ attestation to deliver such
within the time required under Section 2(e). Notwithstanding the
foregoing, the liability of the Company with respect to any information,
assessment or attestation furnished by or on behalf of a Subservicer
or
Subcontractor under this Section 3 (where such Subservicer or
Subcontractor would not have been deemed to be a Participating
Entity
based on the Mortgage Loans alone) shall be limited to the ratable
liability incurred in respect of such information, assessment or
attestation furnished by or on behalf of a Subservicer or Subcontractor
determined based upon the value of the Mortgage Loans as a proportionate
share of all mortgage loans included in the related Securitization
Transaction for which such Subservicer or Subcontractor performs
services.
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|
4.
|
Consents.
Notwithstanding any other provision of this Addendum, (i) the Company
shall seek the consent of the Purchaser for the utilization of
all third
party service providers, including Subservicers and Subcontractors,
when
required by and in accordance with the terms of the Existing Agreement
and
(ii) references to the Purchaser shall be deemed to include any
assignees
or designees of the Purchaser, such as any Depositor, a master
servicer or
a trustee.
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I-14
Annex
1
to Regulation AB Addendum
FORM
OF
ANNUAL CERTIFICATION
|
Re:
|
The
[ ]
agreement dated as of [
],
200[ ] (the “Agreement”), among [IDENTIFY
PARTIES]
|
I,
________________________________, the _______________________ of Countrywide
Home Loans, Inc., certify to [the Depositor][or] [Master Servicer], and [its]
officers, with the knowledge and intent that they will rely upon this
certification, that:
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(1)
|
I
have reviewed the servicer compliance statement of the Company
provided in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”),
the report on assessment of the Company’s compliance with the servicing
criteria set forth in Item 1122(d) of Regulation AB (the “Servicing
Criteria”), provided in accordance with Rules 13a-18 and 15d-18 under
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Item
1122 of Regulation AB (the “Servicing Assessment”), the registered public
accounting firm’s attestation report provided in accordance with Rules
13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation
AB (the “Attestation
Report”), and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans by
the Company
during 200[ ] that were delivered by the Company to the [Depositor]
[Master Servicer] [Securities Administrator] [Trustee] pursuant
to the
Agreement (collectively, the “Company Servicing
Information”);
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|
(2)
|
Based
on my knowledge, the Company Servicing Information, taken as a
whole, does
not contain any untrue statement of a material fact or omit to
state a
material fact necessary to make the statements made, in the light
of the
circumstances under which such statements were made, not misleading
with
respect to the period of time covered by the Company Servicing
Information;
|
|
(3)
|
Based
on my knowledge, all of the Company Servicing Information required
to be
provided by the Company under the Agreement has been provided to
the
[Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
|
|
(4)
|
I
am responsible for reviewing the activities performed by the Company
as
servicer under the Agreement, and based on my knowledge and the
compliance
review conducted in preparing the Compliance Statement and except
as
disclosed in the Compliance Statement, the Servicing Assessment
or the
Attestation Report, the Company has fulfilled its obligations under
the
Agreement in all material respects;
and
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|
(5)
|
The
Compliance Statement required to be delivered by the Company pursuant
to
the Agreement, and the Servicing Assessment and Attestation Report
required to be provided by the Company and by any Subservicer or
Subcontractor pursuant to the Agreement, have been provided to
the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor]
[Master
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such
reports.
|
I-15
Date: _________________________
By:
___________________________
Name:
Title:
X-00
Xxxxx
0
xx Xxxxxxxxxx XX Addendum
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the Company] [Name of Subservicer]
shall address, at a minimum, the applicable criteria identified below as
“Applicable Servicing Criteria”:
|
Servicing
Criteria
|
Applicable
Servicing Criteria
|
|
|
Reference
|
Criteria
|
|
|
|
General
Servicing Considerations
|
|
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
X
|
|
|
Cash
Collection and Administration
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|
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1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial
bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction
agreements.
|
X
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
X
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized
access.
|
X
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their
original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
I-17
|
Servicing
Criteria
|
Applicable
Servicing Criteria
|
|
|
Reference
|
Criteria
|
|
|
|
Investor
Remittances and Reporting
|
|
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
|
X
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
|
X
|
|
|
Pool
Asset Administration
|
|
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the
transaction
agreements or related mortgage loan documents.
|
X
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
X
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
|
X
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow)
in
accordance with the related mortgage loan documents.
|
X
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
|
X
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor’s mortgage loans (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
|
X
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan
documents.
|
X
|
I-18
|
Servicing
Criteria
|
Applicable
Servicing Criteria
|
|
|
Reference
|
Criteria
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid,
or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction
agreements.
|
X
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
|
|
|
|
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I-19
