Lehman Brothers Bank, FSB, Purchaser and Countrywide Home Loans, Inc., Company
Xxxxxx
Brothers Bank, FSB,
Purchaser
and
Countrywide
Home Loans, Inc.,
Company
FLOW
SELLER’S WARRANTIES AND SERVICING AGREEMENT
Dated
as
of June 1, 2004
Conventional
Residential Fixed Rate Mortgage Loans
TABLE
OF
CONTENTS
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Page
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ARTICLE
I
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||
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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; 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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12
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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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Delivery
of Documents
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14
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ARTICLE
III
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|
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REPRESENTATIONS
AND WARRANTIES;
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REMEDIES
AND BREACH
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Section
3.01
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Company
Representations and Warranties
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15
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Section
3.02
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Representations
and Warranties Regarding Individual Mortgage Loans
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17
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Section
3.03
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Remedies
for Breach of Representations and Warranties
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27
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Section
3.04
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Indemnification
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29
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Section
3.05
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Restrictions
and Requirements Applicable in the Event
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|
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that
a Mortgage Loan is Acquired by a REMIC
|
30
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Section
3.06
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Review
of Mortgage Loans
|
31
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ARTICLE
IV
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ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
|
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Section
4.01
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Company
to Act as Servicer
|
31
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|
Section
4.02
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Liquidation
of Mortgage Loans
|
33
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|
Section
4.03
|
Collection
of Mortgage Loan Payments
|
34
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Section
4.04
|
Establishment
of and Deposits to Custodial Account
|
34
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|
Section
4.05
|
Permitted
Withdrawals From Custodial Account
|
36
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|
Section
4.06
|
Establishment
of and Deposits to Escrow Account
|
37
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|
Section
4.07
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Permitted
Withdrawals From Escrow Account
|
37
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Section
4.08
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Payment
of Taxes, Insurance and Other Charges
|
38
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Section
4.09
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Protection
of Accounts
|
38
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Section
4.10
|
Maintenance
of Hazard Insurance
|
39
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i
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Section
4.11
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Maintenance
of Mortgage Impairment Insurance
|
41
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|
Section
4.12
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Maintenance
of Fidelity Bond and Errors and Omissions Insurance
|
41
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|
Section
4.13
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Inspections
|
41
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|
Section
4.14
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Restoration
of Mortgaged Property
|
42
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|
Section
4.15
|
Maintenance
of LPMI Policy; Claims
|
42
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|
Section
4.16
|
Title,
Management and Disposition of REO Property
|
43
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|
Section
4.17
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Real
Estate Owned Reports
|
44
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|
Section
4.18
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Liquidation
Reports
|
44
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|
Section
4.19
|
Reports
of Foreclosures and Abandonments of Mortgaged Property
|
45
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|
Section
4.20
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Credit
Reporting
|
45
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ARTICLE
V
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|
|
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PAYMENTS
TO PURCHASER
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|
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Section
5.01
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Remittances
|
45
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|
Section
5.02
|
Statements
to Purchaser
|
46
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|
Section
5.03
|
Monthly
Advances by Company
|
46
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ARTICLE
VI
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|
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GENERAL
SERVICING PROCEDURES
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|
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Section
6.01
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Transfers
of Mortgaged Property
|
47
|
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Section
6.02
|
Satisfaction
of Mortgages and Release of Mortgage Files
|
47
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|
Section
6.03
|
Servicing
Compensation
|
48
|
|
Section
6.04
|
Annual
Statement as to Compliance
|
48
|
|
Section
6.05
|
Annual
Independent Public Accountants’ Servicing Report
|
48
|
|
Section
6.06
|
Right
to Examine Company Records
|
49
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|
Section
6.07
|
Appointment
and Designation of Master Servicer
|
49
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ARTICLE
VII
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|
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AGENCY
TRANSFER; PASS-THROUGH TRANSFER
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|
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Section
7.01
|
Removal
of Mortgage Loans from Inclusion Under this Agreement Upon an Agency
Transfer, or a Pass-Through Transfer on One or More Reconstitution
Dates
|
49
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||
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ARTICLE
VIII
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|
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COMPANY
TO COOPERATE
|
|
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Section
8.01
|
Provision
of Information
|
52
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|
Section
8.02
|
Financial
Statements; Servicing Facility
|
52
|
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
|
53
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Section
9.02
|
Merger
or Consolidation of the Company
|
53
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Section
9.03
|
Limitation
on Liability of Company and Others
|
53
|
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Section
9.04
|
Limitation
on Resignation and Assignment by Company
|
54
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ARTICLE
X
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|
|
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DEFAULT
|
|
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Section
10.01
|
Events
of Default
|
55
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Section
10.02
|
Waiver
of Defaults
|
56
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ARTICLE
XI
|
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TERMINATION
|
|
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Section
11.01
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Termination
|
57
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Section
11.02
|
Termination
Without Cause
|
57
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ARTICLE
XII
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|
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MISCELLANEOUS
PROVISIONS
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|
|
|
Section
12.01
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Successor
to Company
|
57
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Section
12.02
|
Amendment
|
58
|
|
Section
12.03
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Governing
Law
|
58
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Section
12.04
|
Duration
of Agreement
|
58
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Section
12.05
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Notices
|
58
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Section
12.06
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Severability
of Provisions
|
59
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|
Section
12.07
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Relationship
of Parties
|
59
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Section
12.08
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Execution;
Successors and Assigns
|
59
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Section
12.09
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Recordation
of Assignments of Mortgage
|
59
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Section
12.10
|
Assignment
by Purchaser
|
60
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Section
12.11
|
No
Personal Solicitation
|
60
|
iii
EXHIBITS
|
EXHIBIT
A
|
MORTGAGE
LOAN SCHEDULE
|
|
EXHIBIT
B
|
CONTENTS
OF EACH MORTGAGE FILE
|
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EXHIBIT
C
|
MORTGAGE
LOAN DOCUMENTS
|
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EXHIBIT
D-1
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FORM
OF CUSTODIAL ACCOUNT
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CERTIFICATION
|
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EXHIBIT
D-2
|
FORM
OF CUSTODIAL ACCOUNT
|
|
LETTER
AGREEMENT
|
|
|
EXHIBIT
E-1
|
FORM
OF ESCROW ACCOUNT CERTIFICATION
|
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EXHIBIT
E-2
|
FORM
OF ESCROW ACCOUNT
|
|
LETTER
AGREEMENT
|
|
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EXHIBIT
F
|
RESERVED
|
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EXHIBIT
G
|
FORM
OF ASSIGNMENT AND ASSUMPTION
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EXHIBIT
H
|
RESERVED
|
|
EXHIBIT
I
|
FORM
OF ASSIGNMENT AND CONVEYANCE
|
iv
This
is a
Flow Seller’s Warranties and Servicing Agreement for conventional residential
first lien mortgage loans, dated and effective as of June 1, 2004, and is
executed between Xxxxxx Brothers Bank, FSB, as purchaser (the “Purchaser”),
and
Countrywide Home Loans, Inc., as seller and servicer (the “Company”).
WITNESSETH:
WHEREAS,
from time to time, the Purchaser has agreed to purchase from the Company and,
from to time, the Company has agreed to sell to the Purchaser certain Mortgage
Loans (excluding the right to service the Mortgage Loans which the Company
expressly retains), which shall be delivered as a pool of whole
loans;
WHEREAS,
each of the Mortgage Loans is secured by a mortgage, deed of trust or other
security instrument creating a lien on a residential dwelling located in the
jurisdiction indicated on the Mortgage Loan Schedule; and
WHEREAS,
the Purchaser and the Company wish to prescribe the manner of purchase of the
Mortgage Loans and the management, servicing and control of the Mortgage
Loans.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Purchaser and the Company agree as
follows:
ARTICLE
I
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type
as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property
is
located.
Adjustable
Rate Mortgage Loan:
A
Mortgage Loan purchased pursuant to this Agreement, the Mortgage Interest Rate
of which is adjusted from time to time in accordance with the terms of the
related Mortgage Note.
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 Seller’s Warranties and Servicing Agreement and all amendments hereof and
supplements hereto.
ALTA:
The
American Land Title Association or any successor thereto.
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.
Approved
Flood Certification Provider:
Any
provider acceptable to Xxxxxx Xxx or Xxxxxxx Mac.
Assignment
and Conveyance:
An
Assignment and Conveyance in the form of Exhibit
I
hereto
dated as of the related Closing Date, by and between the Company and the
Purchaser.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the Mortgage to
the
Purchaser.
BIF:
The
Bank Insurance Fund, or any successor thereto.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the States of New York, Texas, or California are
authorized or obligated by law or executive order to be closed.
Closing
Date:
The
date or dates set forth on the related Assignment and Conveyance on which the
Purchaser from time to time shall purchase and the Company from time to time
shall sell, the Mortgage Loans listed on the related Mortgage Loan
Schedule.
Combined
Loan-to-Value Ratio
or
CLTV:
With
respect to any Mortgage Loan, the sum of the original principal balance of
such
Mortgage Loan and the outstanding principal balance of any related first lien
as
of the date of origination of the Mortgage Loan, divided by the lower 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.
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.
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, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
-2-
Custodial
Account:
The
separate account or accounts created and maintained pursuant to Section
4.04.
Custodial
Agreement:
That
certain Custodial Agreement, dated as of October 1, 1999 by and between the
Purchaser and U.S. Bank Trust National Association, as amended.
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 provided
therein.
Cut-off
Date:
With
respect to each Mortgage Loan in a Mortgage Loan Package, the date set forth
on
the related Mortgage Loan Schedule.
Deleted
Mortgage Loan:
A
Mortgage Loan which is repurchased by the Company in accordance with the terms
of this Agreement and which is, in the case of a substitution pursuant to
Section 3.03, 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.
Disqualified
Organization:
An
organization defined as such in Section 860E(e) of the Code.
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace. With respect to the Mortgage Loans for which payment
from
the Mortgagor is due on a day other than the first day of the month, such
Mortgage Loans will be treated as if the Monthly Payment is due on the first
day
of the month of such Due Date.
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 in 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.;
-3-
(iii) investments
and securities otherwise acceptable to Xxxxxx Mae and Xxxxxxx Mac.
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.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Company pursuant
to Section 4.12.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section
4.06.
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, if
applicable, and any other payments required to be escrowed by the Mortgagor
with
the mortgagee pursuant to the Mortgage or any other related
document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 10.01.
Xxxxxx
Mae:
The
Federal National Mortgage Association, or any successor thereto.
Xxxxxx
Xxx Guides:
The
Xxxxxx Xxx Xxxxxxx’ Guide and the Xxxxxx Xxx Servicers’ Guide and all amendments
or additions 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 borrower’s credit worthiness.
-4-
Fidelity
Bond:
A
fidelity bond to be maintained by the Company pursuant to Section
4.12.
Xxxxxxx
Mac:
The
Federal Home Loan Mortgage Corporation, or any successor thereto.
Gross
Margin:
With
respect to each Adjustable Rate Mortgage Loan, the fixed percentage amount
set
forth in the related Mortgage Note which amount is added to the Index in
accordance with the terms of the related Mortgage Note to determine on each
Interest Rate Adjustment Date the Mortgage Interest Rate for such Mortgage
Loan.
Index:
The
index indicated in the related Mortgage Note for each Adjustable Rate Mortgage
Loan.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Interest
Only Mortgage Loan:
A
Mortgage Loan that requires payments of interest only during its term and the
entire original principal balance at maturity, and that does not amortize during
its term.
Interest
Rate Adjustment Date:
With
respect to each Adjustable Rate Mortgage Loan, the date as specified in the
related Mortgage Note with respect to the initial Interest Rate Adjustment
Date,
or the related Mortgage Loan Schedule, with respect to subsequent Interest
Rate
Adjustment Dates.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise, or the sale of the related Mortgaged Property
if
the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan.
Loan-to-Value
Ratio or LTV:
With
respect to any Mortgage Loan, the ratio of the Stated Principal Balance of
the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated) to
the
lesser of (a) the Appraised Value of the Mortgaged Property and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property, expressed as a
percentage.
LPMI
Loan: A
Mortgage Loan with a LPMI Policy.
LPMI
Policy: A
policy
of primary mortgage guaranty insurance issued by a Qualified Insurer pursuant
to
which the related premium is to be paid by the Company of the related Mortgage
Loan 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 Schedule (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.
-5-
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan registered with MERS on the MERS System.
MERS
System:
The
system of recording transfers of mortgages electronically maintained by
MERS.
MIN:
The
Mortgage Identification Number for any MERS Mortgage Loan.
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 5.03 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 lien on an unsubordinated estate in fee simple in real property
securing the Mortgage Note.
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit
B
annexed
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
4.11.
Mortgage
Interest Rate:
The
annual rate of interest borne on a 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
related Mortgage Loan Schedule, 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.
Mortgage
Loan Documents:
The
documents listed in Exhibit
B
hereto.
Mortgage
Loan Package:
A pool
of Mortgage Loans sold to the Purchaser by the Company on a Closing
Date.
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 (i) the
Servicing Fee Rate and (ii) with respect to LPMI Loans, the LPMI
Fee.
-6-
Mortgage
Loan Schedule:
With
respect to each Mortgage Loan Package, a schedule of Mortgage Loans annexed
to
the Assignment and Conveyance, each such schedule setting forth the information
delineated in Exhibit
A,
with
respect to each Mortgage Loan. With respect to the Mortgage Loans in the
aggregate, the Mortgage Loan Schedule shall set forth the following information,
as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage
Loans.
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
The
real property 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) an assistant Vice President or higher ranking officer
and (b) by the Treasurer or 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 either 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:
The
sale or transfer of some or all of the Mortgage Loans to a trust to be formed
as
part of a publicly-issued and/or privately placed, rated or unrated, mortgage
pass-through transaction, retaining the Company as “servicer” (with or without a
master servicer) thereunder.
Periodic
Rate Cap:
With
respect to each Adjustable Rate Mortgage Loan, the provision of each Mortgage
Note 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.
Person:
Any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof.
PMI:
PMI
Mortgage Insurance Co., or any successor thereto.
-7-
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 “Money Rates” section of 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, excluding 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
second day of the month preceding the month in which the related Remittance
Date
occurs through the first day of the month in which the related Remittance Date
occurs.
Purchase
Price and Terms Letter:
With
respect to each purchase of a Mortgage Loan Package hereunder, that certain
letter agreement setting forth the general terms and conditions of such
transaction consummated herein and identifying the Mortgage Loans to be
purchased hereunder, by and between the Company and the Purchaser.
Purchaser:
Xxxxxx
Brothers Bank, FSB or its successor in interest or any successor to the
Purchaser under this Agreement as herein provided.
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 AA or better by Standard &
Poor’s Corporation.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by Xxxxxx Mae or Xxxxxxx Mac.
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.
-8-
Rating
Agency:
Any of
Fitch, Moody’s or Standard & Poor’s or their respective
successors.
Reconstitution:
A
Pass-Through Transfer, a Whole Loan Transfer or an Agency Transfer.
Reconstitution
Agreements:
The
agreement or agreements entered into by the Purchaser, the Company, Xxxxxx
Mae
or Xxxxxxx Mac or certain third parties on the Reconstitution Date(s) with
respect to any or all of the Mortgage Loans serviced hereunder, in connection
with a Pass-Through Transfer or an Agency Transfer as set forth in Section
7.01,
including, but not limited to, (i) a Xxxxxx Mae Mortgage Selling and Servicing
Contract, a Pool Purchase Contract, and any and all servicing agreements and
tri-party agreements reasonably required by Xxxxxx Xxx with respect to a Xxxxxx
Mae Transfer, (ii) a Purchase Contract and all purchase documents associated
therewith as set forth in the Xxxxxxx Xxx Xxxxxxx’ & Servicers’ Guide, and
any and all servicing agreements and tri-party agreements reasonably required
by
Xxxxxxx Mac with respect to a Xxxxxxx Mac Transfer, and (iii) a Pooling and
Servicing Agreement and/or a subservicing/master servicing agreement and related
custodial/trust agreement and related documents with respect to a Pass-Through
Transfer. Such agreement or agreements shall prescribe the rights and
obligations of the Company in servicing the related Mortgage Loans and shall
provide for servicing compensation to the Company (calculated on a weighted
average basis for all the related Mortgage Loans as of the Reconstitution Date),
net of any guarantee fees due Xxxxxx Mae or Xxxxxxx Mac, if applicable, at
least
equal to the Servicing Fee due the Company in accordance with this Agreement.
The form of relevant Reconstitution Agreement to be entered into by the
Purchaser and/or master servicer or trustee and the Company with respect to
Pass-Through Transfers shall be reasonably satisfactory in form and substance
to
the Purchaser and the Company (giving due regard to any rating or master
servicing requirements), shall not materially increase the Company’s obligations
or materially diminish the Company’s rights under this Agreement, and the
representations and warranties and servicing provisions contained therein shall
be substantially similar to those contained in this Agreement as of the related
Closing Date, unless otherwise mutually agreed by the parties.
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
an
Agency Transfer or a Pass-Through Transfer pursuant to Section 7.01 hereof.
On
such date or dates, the Mortgage Loans transferred shall cease to be covered
by
this Agreement and the Company’s servicing responsibilities shall cease under
this Agreement (but not its obligations as Company and originator for
representations made as of the related Closing Date hereunder or its servicing
obligations prior to the Reconstitution Date) with respect to the related
transferred Mortgage Loans.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code.
-9-
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 86OG of Subchapter M of Chapter 1, Subtitle A of the Code,
and related provisions, and regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
Remittance
Date:
The
18th day (or if such 18th 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 4.16.
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
4.16.
Repurchase
Price:
With
respect to any Mortgage Loan, a price equal to (i) the Stated Principal Balance
of the Mortgage Loan plus (ii) interest on such Stated Principal Balance at
the
Mortgage Loan Remittance Rate from the date on which interest has last been
paid
and distributed to the Purchaser to the date of repurchase, less amounts
received or advanced in respect of such repurchased Mortgage Loan which are
being held in the Custodial Account for distribution in the month of repurchase
plus (iii) any costs and damages incurred by the Purchaser or trust with respect
to any securitization of the Mortgage Loan in connection with any violation
by
such Mortgage Loan of any predatory- or abusive-lending law plus (iv) all
reasonable costs and expenses incurred by the Purchaser in the enforcement
of
the Company’s repurchase obligation hereunder.
SAIF:
The
Savings Association Insurance Fund, or any successor thereto.
Securities
Act of 1933 or the 1933 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, (d) in connection with the liquidation of a Mortgage Loan, any
expenditures relating to the purchase or maintenance of any Superior Lien
pursuant to Section 4.21 hereof, and (e) compliance with the obligations under
Section 4.08.
-10-
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, to the extent permitted by Section 4.05)
of
such Monthly Payment collected by the Company, or as otherwise provided under
Section 4.05.
Servicing
Fee Rate:
With
respect to each Mortgage Loan and each Mortgage Loan Package, the Servicing
Fee
Rate set forth in the related Assignment and Conveyance.
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
Custodian and copies of the Mortgage Loan Documents listed in Exhibit
B
the
originals of which are delivered to the Custodian pursuant to Section
2.01.
Servicing
LP:
Countrywide Home Loans Servicing LP, or any successor thereto
Servicing
Officer:
Any
officer of the Company involved in or responsible for, the administration and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Company to the Purchaser upon request, as such list
may from time to time be amended.
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
4.01.
Subservicing
Agreement:
An
agreement between the Company and a Subservicer for the servicing of the
Mortgage Loans.
Tax
Returns:
The
federal income tax return on Internal Revenue Service Form 1066, U.S. Real
Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q
thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income
or Net Loss Allocation, or any successor forms, to be filed on behalf of any
REMIC under the REMIC Provisions, together with any and all other information,
reports or returns that may be required to be furnished to the certificate
holders under a REMIC or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
-11-
Underwriting
Guidelines:
The
applicable underwriting guidelines of the Company attached to the related
Assignment and Conveyance.
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 seller’s warranties and servicing
agreement or a participation and servicing agreement, retaining the Company
as
“servicer” thereunder.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS
AND RECORDS; DELIVERY OF DOCUMENTS
|
Section
2.01
|
Conveyance
of Mortgage Loans; Possession of Mortgage Files; Maintenance of Servicing
Files.
|
The
Company, on the related Closing Date, does hereby sell, transfer, assign, set
over and convey to the Purchaser, without recourse, but subject to the terms
of
this Agreement, on a servicing retained basis, all the right, title and interest
of the Company in and to the Mortgage Loans in the related Mortgage Loan
Package, and Mortgage Files and all rights and obligations arising under the
documents contained therein for each Mortgage Loan in the related Mortgage
Loan
Package. Pursuant to Section 2.03, the Company shall deliver the Mortgage Loan
Documents for each Mortgage Loan to the Custodian prior to the related Closing
Date.
The
contents of each Mortgage File not delivered to the Custodian are and shall
be
held in trust by the Company for the benefit of the Purchaser as the owner
thereof. The Company shall maintain a Servicing File consisting of a copy of
the
contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the Custodian. The possession of each Servicing
File by the Company is at the will of the Purchaser for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Company is in a custodial capacity only. Upon the sale of the Mortgage Loans
the
ownership of each Mortgage Note, the related Mortgage and the related Mortgage
File and Servicing File shall vest immediately in the Purchaser, and the
ownership of all records and documents with respect to the related Mortgage
Loan
prepared by or which come into the possession of the Company shall vest
immediately in the Purchaser and shall be retained and maintained by the
Company, in trust, at the will of the Purchaser and only in such custodial
capacity. Each Servicing File shall be segregated from the other books and
records of the Company and shall be marked appropriately to reflect clearly
the
sale of the related Mortgage Loan to the Purchaser. The Company shall release
its custody of the contents of any Servicing File only in accordance with
written instructions from the Purchaser, unless such release is required as
incidental to the Company’s servicing of the Mortgage Loans or is in connection
with a repurchase of any Mortgage Loan pursuant to Section 3.03, 3.06, or
6.02.
-12-
|
Section
2.02
|
Books and Records; Transfers of Mortgage Loans. |
From
and
after the sale of the Mortgage Loans to the Purchaser all rights arising out
of
the Mortgage Loans including but not limited to all funds received on or in
connection with the Mortgage Loans, shall be received and held by the Company
in
trust for the benefit of the Purchaser as owner of the Mortgage Loans, and
the
Company shall retain record title to the related Mortgages for the sole purpose
of facilitating the servicing and the supervision of the servicing of the
Mortgage Loans.
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. In particular, the Company
shall maintain in its possession, available for inspection by the Purchaser,
or
its designee and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations,
including but not limited to documentation as to the method used in determining
the applicability of the provisions of the Flood Disaster Protection Act of
1973, as amended, to the Mortgaged Property, documentation evidencing insurance
coverage and eligibility of any condominium project for approval by Xxxxxx
Xxx
and periodic inspection reports as required by Section 4.13. To the extent
that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Company may be
in
the form of microfilm or microfiche or such other reliable means of recreating
original documents, including but not limited to, optical imagery
techniques.
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.
The
Company shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Company shall note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made unless
such transfer is in compliance with the terms hereof. For the purposes of this
Agreement, the Company shall be under no obligation to deal with any person
with
respect to this Agreement or the Mortgage Loans unless the books and records
show such person as the owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans, provided,
however,
that
(i) the transferee will not be deemed to be a Purchaser hereunder binding upon
the Company unless (a) such transferee shall agree in writing to be bound by
the
terms of this Agreement and an original counterpart of the instrument of
transfer and an assignment and assumption of this Agreement in the form of
Exhibit
G
hereto
executed by the transferee shall have been delivered to the Company, or (b)
the
transferee is an affiliate of the Purchaser, a depositor, a trustee or any
other
appropriate party in a Pass-through Transfer and (ii) in no event shall there
be
more than five Persons at any given time having the status of “Purchaser”
hereunder. The Purchaser also shall advise the Company of the transfer. Upon
receipt of notice of the transfer, the Company shall xxxx its books and records
to reflect the ownership of the Mortgage Loans of such assignee, and shall
release the previous Purchaser from its obligations hereunder with respect
to
the Mortgage Loans sold or transferred.
-13-
|
Section
2.03
|
Delivery
of Documents.
|
On
or
before the date which is agreed upon by the Purchaser and the Company in the
Purchase Price and Terms Letter, the Company shall deliver to the Custodian
in
escrow for the benefit of the Seller, those Mortgage Loan Documents as required
by this Agreement with respect to each Mortgage Loan in the related Mortgage
Loan Package.
On
or
prior to the related Closing Date, the Custodian shall certify 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. Purchaser shall pay all fees
and
expenses of the Custodian.
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 4.01 or 6.01 within two weeks of their
execution, provided, however, that the Company shall provide the Custodian
with
a certified true copy of any such document submitted for recordation within
two
weeks of its execution, and shall provide the original of any document submitted
for recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within 270
days
of its submission for recordation.
In
the
event an Officer’s Certificate of the Company is delivered to the Custodian
because of a delay caused by the public recording office in returning any
recorded document, the Company shall deliver to the Custodian, within 270 days
of the related Closing Date, an Officer’s Certificate which shall (i) identify
the recorded document, (ii) state that the recorded document has not been
delivered to the Custodian due solely to a delay caused by the public recording
office, (iii) state the amount of time generally required by the applicable
recording office to record and return a document submitted for recordation,
and
(iv) specify the date the applicable recorded document will be delivered to
the
Custodian. The Company shall be required 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. Notwithstanding the foregoing,
the
Company shall not be in breach of this Agreement due to a delay caused by the
recording office.
The
Company shall deliver the Mortgage Loan Schedule with respect to the related
Mortgage Loan Package to the Purchaser on a best efforts basis, within 3
Business Days prior to the related Closing Date but in no event later than
the
date 2 Business Days prior to the related Closing Date.
-14-
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES;
REMEDIES
AND BREACH
|
Section
3.01
|
Company
Representations and Warranties.
|
The
Company represents and warrants 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 State of New York 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 compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the related Mortgage Loan and the servicing of such Mortgage
Loan in accordance with the terms of this Agreement; 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 or 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 or 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 or
Xxxxxxx Mac eligibility requirements or which would require notification to
either Xxxxxx Mae or Xxxxxxx Mac;
-15-
(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 is not undertaken 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 best of 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, prospects, 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 sale of the Mortgage
Loans as evidenced by the consummation of the transactions contemplated by
this
Agreement, or if required, such approval has been obtained prior to the related
Closing Date;
(i) Selection
Process.
The
Mortgage Loans were selected from among the one- to four-family mortgage loans
in the Company’s portfolio at the related Closing Date as to which the
representations and warranties set forth in Section 3.02 could be made and
such
selection was not made in a manner so as to affect adversely the interests
of
the Purchaser;
(j) Pool
Characteristics.
The
Mortgage Loans in the related Mortgage Loan Package have the characteristics
as
set forth on Exhibit
2
to the
related Assignment and Conveyance.
(k) No
Untrue Information.
Neither
this Agreement nor any statement, report or other document furnished or to
be
furnished 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;
-16-
(l) 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;
(m) Financial
Statements.
There
has been no change in the business, operations, financial condition, properties
or assets of the Company since the date of the Company’s most recent financial
statements that would have a material adverse effect on its ability to perform
its obligations under this Agreement;
(n) No
Brokers’ Fees.
The
Company has not dealt with any broker, investment banker, agent or other person
that may be entitled to any commission or compensation in connection with the
sale of the Mortgage Loans;
(o) Origination.
The
Company’s decision to originate any mortgage loan or to deny any mortgage loan
application is an independent decision based upon Company’s Underwriting
Guidelines, and is in no way made as a result of Purchaser’s decision to
purchase, or not to purchase, or the price Purchaser may offer to pay for,
any
such mortgage loan, if originated; and
(p) 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 Mortgage Loans for as long as such Mortgage Loans are registered
with MERS.
|
Section
3.02
|
Representations
and Warranties Regarding Individual Mortgage Loans.
|
With
respect to each Mortgage Loan, or the Mortgage Loans in a Mortgage Loan Package
the aggregate, as applicable, the Company hereby represents and warrants to
the
Purchaser that as of the related Closing Date on which such Mortgage Loan is
sold:
(a) Mortgage
Loans as Described.
The
information set forth in each Mortgage Loan Schedule is complete, true and
correct;
(b) Payments
Current.
All
payments required to be made up to the related Closing Date for the Mortgage
Loan under the terms of the Mortgage Note have been made and credited. No
payment required under the Mortgage Loan has been delinquent thirty days or
more
at any time in the twelve months prior to the related Cut-off Date;
(c) No
Outstanding Charges.
There
are no defaults in complying with the terms of the Mortgages, 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 greater, to the day which precedes by one month the Due Date of
the
first installment of principal and interest;
-17-
(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 delivered to the Custodian. The substance of any such waiver, alteration
or
modification has been approved by the issuer of any related LPMI Policy 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 LPMI Policy 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 Custodian 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, and no Mortgagor (a) was a
debtor in any state or federal bankruptcy or insolvency proceeding or (b) had
a
foreclosure proceeding commenced again him, in each case, at the time the
Mortgage Loan was originated or in the twelve months preceding the related
origination date.
(f) Hazard
Insurance.
Pursuant to the terms of the Mortgage, all buildings or other improvements
upon
the Mortgaged Property are insured by a generally acceptable insurer against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located pursuant to
insurance policies conforming to the requirements of Section 4.10. 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 (and such flood insurance has been made available)
a 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 Section 4.10. 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 the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser
upon
the consummation of the transactions contemplated by this Agreement. The Company
has not engaged in, and has no knowledge of the Mortgagor’s or any Subservicer’s
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including without limitation, no unlawful
fee, unlawful commission, unlawful 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;
-18-
(g) Compliance
with Applicable Laws.
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 predatory and abusive lending laws and any and all requirements
of
any federal, state or local law (including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure laws, all applicable predatory and abusive
lending laws or unfair and deceptive practices laws) applicable to the Mortgage
Loan have been complied with, and the Company shall maintain in its possession,
available for the Purchaser’s inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements.
(h) No
Satisfaction of Mortgage.
The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. The
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 located in the state identified
in
the Mortgage Loan Schedule and consists of a parcel of real property with a
detached single family residence erected thereon, two-to-four family dwelling,
an individual condominium unit in a low-rise condominium project, or an
individual unit in a planned unit development, provided, however, that any
condominium project or planned unit development shall conform with the Company’s
Underwriting Guidelines regarding such dwellings, and no residence or dwelling
is a mobile home, a manufactured dwelling, a modular home or rural property.
No
portion of the Mortgaged Property is used for commercial purposes;
(j) Valid
Lien.
The
Mortgage is a valid, subsisting enforceable and perfected first lien and first
priority security interest on the Mortgaged Property, including all buildings
and improvements on the Mortgaged Property, and all additions, alterations
and
replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(1)
the
lien of current real property taxes and assessments not yet due and
payable;
(2)
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
-19-
(3)
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 first lien and first priority security interest
on
the property described therein and the Company has full right to sell and assign
the same to the Purchaser;
(k) Validity
of Mortgage Documents.
The
Mortgage Note and the Mortgage 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 have been duly and properly executed by
such
parties;
(l) Full
Disbursement of Proceeds.
The
Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances thereunder,
and
any and all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage Loan
and
the recording of the Mortgage were paid, and the Mortgagor is not entitled
to
any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(m) Ownership.
The
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;
(n) Doing
Business.
All
parties which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and (2) organized under the laws of such state, or (3)
qualified to do business in such state, or (4) federal savings and loan
associations or national banks having principal offices in such state, or (5)
not doing business in such state;
-20-
(o)
Title Insurance.
The
Mortgage Loan is covered by either (i) an attorney’s opinion of title and
abstract of title the form and substance of which is acceptable to mortgage
lending institutions making mortgage loans in the area where the Mortgaged
Property is located or (ii) an ALTA lender’s title insurance policy or other
generally acceptable form of policy of insurance acceptable to Xxxxxx Xxx or
Xxxxxxx Mac, issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx
Mac
and qualified to do business in the jurisdiction where the Mortgaged Property
is
located, insuring the Company, its successors and assigns, as to the second
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan (or to the extent that a Mortgage Note provides for negative amortization,
the maximum amount of negative amortization in accordance with the Mortgage),
subject only to the exceptions contained in clauses (1), (2) and (3) of
paragraph (j) of this Section 3.02. Where required by state law or regulation,
the Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. Additionally, such lender’s title insurance
policy affirmatively insures ingress and egress, and against encroachments
by or
upon the Mortgaged Property or any interest therein. The Company is the sole
insured of such lender’s title insurance policy, and such lender’s title
insurance policy is in full force and effect and will be in force and effect
upon the consummation of the transactions contemplated by this Agreement. No
claims have been made under such lender’s title insurance policy, and no prior
holder of the 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;
(p) 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 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;
(q) 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;
(r) Location
of Improvements; No Encroachments.
All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part
of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;
(s) 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 banking institution which is supervised
and
examined by a Federal or State authority or a Xxxxxx Xxx or Xxxxxxx Mac approved
mortgagee. The
Mortgage Interest Rate is as set forth in the related Mortgage Note. As stated
in the related Mortgage Note, the Mortgage Interest Rate is adjusted, with
respect to Adjustable Rate Mortgage Loans, on each Interest Rate Adjustment
Date
to equal the Index plus the Gross Margin, subject to the Periodic Rate Cap.
Except with respect to Interest Only Mortgage Loans, the Mortgage Note is
payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date,
over
an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the related Mortgage Loan Schedule,
the Mortgage Loan is payable on the first day of each month. The Mortgage Loan
by its original terms or any modification thereof, does not provide for
amortization beyond its scheduled maturity;
-21-
(t) Customary
Provisions.
The
Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a
Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the
Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee’s sale or the right to foreclose the Mortgage;
(u) Conformance
with Underwriting Guidelines.
The
Mortgage Loan was underwritten in accordance with the Company’s Underwriting
Guidelines in effect at the time the Mortgage Loan was originated;
(v) Occupancy
of the Mortgaged Property.
As of
the related Closing Date the Mortgaged Property is lawfully occupied under
applicable law. All inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited
to
certificates of occupancy and fire underwriting certificates, have been made
or
obtained from the appropriate authorities. 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;
(w) 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 (j) above;
(x) 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 Purchasers to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor;
-22-
(y) 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;
(z) Delivery
of Mortgage Documents.
The
Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered for the Mortgage Loan by the Company under this
Agreement as set forth in Exhibit
C
attached
hereto have been delivered to the Custodian. The Company is in possession of
a
complete, true and accurate Mortgage File in compliance with Exhibit
B,
except
for such documents the originals of which have been delivered to the
Custodian;
(aa) 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 with respect to such
condominium or planned unit development;
(bb) Transfer
of Mortgage Loans.
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;
(cc) 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 Mortgagor thereunder;
(dd) 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;
(ee) Consolidation
of Future Advances.
Any
future advances made 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 and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first lien priority by a title insurance
policy, an endorsement to the policy insuring the mortgagee’s consolidated
interest or by other title evidence acceptable to Xxxxxx Xxx or Xxxxxxx Mac.
The
consolidated principal amount does not exceed the original principal amount
of
the Mortgage Loan;
-23-
(ff) 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;
(gg) Collection
Practices; Escrow Deposits.
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. With respect
to
escrow deposits and 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.
An
escrow of funds is not prohibited by applicable law and has been established
in
an amount sufficient to pay for every item which remains unpaid and which has
been assessed but is not yet due and payable. 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 escrow deposits and
Escrow Payments, any interest required to be paid pursuant to state and local
law has been properly paid and credited;
(hh) Appraisal.
The
Mortgage File contains an appraisal of the related Mortgaged Property signed
prior to the approval of the Mortgage Loan application by a qualified appraiser,
duly appointed by the Company, who had no interest, direct or indirect in the
Mortgaged Property or in any loan made on the security thereof; and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and appraiser both satisfy the requirements of Xxxxxx
Mae, Xxxxxxx Mac or Title XI of the Federal 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;
(ii) Servicemembers
Civil 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 Civil
Relief Act of 2003;
(jj) Environmental
Matters.
As of
the origination date and to the best of the Company’s knowledge as of the
Closing Date, 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. At the time of origination and to the
best of the Company’s knowledge as of the related Closing Date, 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;
(kk) 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;
-24-
(ll) Insurance.
The
Company has caused or will cause to be performed any and all acts required
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, LPMI Policy or bankruptcy bond, irrespective
of
the cause of such failure of coverage. In connection with the placement of
any
such insurance, no commission, fee, or other compensation has been or will
be
received by the 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;
(mm) Regarding
the Mortgagor.
The
Mortgagor is one or more natural persons and/or trustees for an Illinois land
trust or a trustee under a “living trust” and such “living trust” is in
compliance with Xxxxxx Xxx guidelines for such trusts.
(nn) Predatory
Lending Regulations; High Cost Loans.
None of
the Mortgage Loans are classified as (a) “high cost” loans under the Home
Ownership and Equity Protection Act of 1994 or (b) “high cost,” “threshold,”
“predatory” or “covered” loans or “High Cost Home Loans” under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees);
(oo) Georgia
Loans.
No
Mortgage Loan is a “High Cost Home Loan” as defined in the Georgia Fair Lending
Act, as amended (the “Georgia Act”). No Mortgage Loan subject to the Georgia Act
and secured by owner occupied real property or an owner occupied manufactured
home located in the State of Georgia was originated (or modified) on or after
October 1, 2002 through and including March 6, 2003;
(pp) Simple
Interest Mortgage Loans.
None of
the Mortgage Loans are simple interest Mortgage Loans.
(qq) Single
Premium Credit Life Insurance.
No
Mortgagor was required to purchase any credit life, disability, accident or
health insurance product as a condition of obtaining the extension of credit.
No
Mortgagor obtained a single-premium credit life insurance policy in connection
with the origination of the Mortgage Loan;
(rr) Tax
Service Contract.
The
Company has obtained a life of loan, transferable real estate Tax Service
Contract on each Mortgage Loan and such contract is assignable without penalty,
premium or cost to the Purchaser;
(ss) Flood
Certification Contract.
The
Company has obtained a life of loan, transferable flood certification contract
with a Approved Flood Certification Provider for each Mortgage Loan and such
contract is assignable without penalty, premium or cost to the
Purchaser;
-25-
(tt) FICO
Scores.
Except
as set forth in the Underwriting Guidelines, each Mortgage Loan has a non-zero
FICO score;
(uu) Prepayment
Fee.
With
respect to each Mortgage Loan that has a prepayment fee feature, each such
prepayment fee is enforceable, and each prepayment penalty in permitted pursuant
to federal, state and local law. No Mortgage Loan will impose a prepayment
penalty for a term in excess of five years from the date such Mortgage Loan
was
originated;
(vv) Recordation.
Each
original Mortgage was recorded and, except for those Mortgage Loans subject
to
the MERS identification system, 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;
(ww) Compliance
with Anti-Money Laundering Laws.
The
Company has complied with all applicable anti-money laundering laws and
regulations, including without limitation the USA Patriot Act of 2001
(collectively, the “Anti-Money
Laundering Laws”);
the
Company has established an anti-money laundering compliance program as required
by the Anti-Money Laundering Laws, has conducted the requisite due diligence
in
connection with the origination of each Mortgage Loan for purposes of the
Anti-Money Laundering Laws, including with respect to the legitimacy of the
applicable Mortgagor and the origin of the assets used by the said Mortgagor
to
purchase the property in question, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of the Anti-Money
Laundering Laws;
(xx) Credit
Reporting.
For
each Mortgage Loan, the Company or its designee has accurately and fully
furnished, 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., Trans Union, LLC and Experian Information Solution, Inc., on a monthly
basis. Prior to the Closing Date, 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, prior to the related Closing
Date, 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;
(yy) Reserved;
(zz) Origination:
No
error, omission, misrepresentation, negligence, fraud or similar occurrence
with
respect to the origination or servicing of a Mortgage Loan has taken place
on
the part of the Company or, to the best of the Company’s knowledge, any person
including without limitation the Mortgagor, any appraiser, any builder or
developer, or any other party involved in the origination of the Mortgage Loan
or, in the application of any insurance in relation to such Mortgage Loan;
no
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the borrower to repay
and
the extension of credit which has no apparent benefit to the borrower, were
employed in the origination of the Mortgage Loan;
-26-
(aaa) Qualified
Mortgage.
The
Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3)
of the Code;
(bbb) Underwriting
Methodology.
The
methodology used in underwriting the extension of credit for each Mortgage
Loan
employs objective mathematical principles which relate the Mortgagor’s income,
assets and liabilities to the proposed payment and such underwriting methodology
does not rely on the extent of the Mortgagor’s equity in the collateral as the
principal determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the Mortgagor had a reasonable ability to make timely
payments on the Mortgage Loan
(ccc) Higher
Cost Products.
No
Mortgagor was encouraged or required to select a Mortgage Loan product offered
by the Company or, to the best of Company’s knowledge, a third party originator
which is a higher cost product designed for less creditworthy borrowers, unless
at the time of the Mortgage Loan’s origination, such Mortgagor did not qualify
taking into account credit history and debt to income ratios for a lower cost
credit product then offered by the Mortgage Loan’s originator or any affiliate
of the Mortgage Loan’s originator. If, at the time of loan application, the
Mortgagor may have qualified for a lower cost credit product then offered by
any
mortgage lending affiliate of the Company or, to the best of Company’s
knowledge, a third party originator, the Mortgage Loan’s originator referred the
Mortgagor’s application to such affiliate for underwriting
consideration;
(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; and
(eee) 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 has been disclosed in writing to the Mortgagor
in accordance with applicable state and federal law and regulation. The
Company shall maintain in the Mortgage File all statements related to any
points, fees and charges assessed to the Mortgagor including but not limited
to
GFE, HUD Settlement Statement, TIL, or any such other disclosure document
required by any law applicable to the origination of the Mortgage
Loan.
|
Section
3.03
|
Remedies
for Breach of Representations and Warranties.
|
It
is
understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and the delivery of the Mortgage Loan Documents to the Custodian
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.
-27-
With
respect to those representations and warranties in Section 3.02, except for
(zz), which are made to the best of the Company’s knowledge, 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.
Within
60
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
promptly to cure such Breach in all material respects and, if such Breach cannot
be cured, the Company shall, at the Purchaser’s option and subject to Section
3.05, repurchase such Mortgage Loan at the Repurchase Price. In the event that
a
Breach shall involve any representation or warranty set forth in Section 3.01,
and such Breach cannot be cured within 60 days of the earlier of either
discovery by or notice to the Company of such Breach, all of the Mortgage Loans
shall, at the Purchaser’s option and subject to Section 3.05, be repurchased by
the Company at the Repurchase Price. However, if the Breach shall involve a
representation or warranty set forth in Section 3.02 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. Any repurchase of a Mortgage
Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall
be
accomplished by deposit in the Custodial Account of the amount of the Repurchase
Price for distribution to Purchaser on the next scheduled Remittance Date,
after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future
distribution.
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, amend the
related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage
Loan from this Agreement, and, in the case of substitution, identify a Qualified
Substitute Mortgage Loan and amend the related Mortgage Loan Schedule to reflect
the addition of such Qualified Substitute Mortgage Loan to this Agreement.
In
connection with any such substitution, the 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, with the Mortgage Note endorsed as 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.
-28-
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.
Any
cause
of action against the Company relating to or arising out of the Breach of any
representations and warranties made in Sections 3.01 and 3.02 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 or repurchase such Mortgage Loan as specified above, and (iii)
demand upon the Company by the Purchaser for compliance with this
Agreement.
Section
3.04 Indemnification.
The
Company agrees to indemnify the Purchaser and hold it harmless from and against
any and all claims, losses, damages, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Purchaser may sustain in any way related any assertion based on, grounded upon
resulting from a Breach of any of the Company’s representations and warranties
contained herein. The provisions of this Section 3.04 shall survive termination
of this Agreement.
It
is
understood and agreed that the obligations of the Company set forth in Sections
3.03 and 3.04 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser constitute the sole remedies of the Purchaser
respecting a Breach of the foregoing representations and
warranties.
-29-
|
Section
3.05
|
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:
|
(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 Subsection 3.03, 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 two years after its acquisition
by
the REMIC unless (i) the Company applies for an extension of such two-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 two 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 3.05, 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.
-30-
Section
3.06 Review of Mortgage Loans.
The
review of the Mortgage Loans shall be conducted pursuant to the applicable
provisions of the related Purchase Price and Terms Letter at the Company’s
offices or such other location mutually agreed upon by the parties, for the
purpose of determining whether each Mortgage Loan conforms in all material
respects to the applicable terms contained in the related Purchase Price and
Terms Letter, which determination shall be made in the Purchaser’s reasonable
and good faith discretion.
Without
limiting the generality of the foregoing, in the event that the Purchaser
rejects Mortgage Loans comprising more than ten percent (10%) of the related
Mortgage Loan Package (as measured by unpaid principal balance), provided,
however, a rejection of a Mortgage Loan for credit deficiencies shall not be
considered in the calculation of the ten percent (10%), the Company may, in
its
sole discretion, rescind its offer to sell any of the Mortgage Loans related
the
such Mortgage Loan Package to the Purchaser and the Company shall have no
liability therefor.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
Section
4.01
|
Company
to Act as Servicer.
|
The
Company shall service and administer the Mortgage Loans from the related 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 Purchaser, 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 5.03, 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 5.03. 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 Purchaser, 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.
-31-
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 Xxxxxx Xxx-approved lender or a Xxxxxxx
Mac
seller/servicer in good standing, and no event has occurred, including but
not
limited to a change in insurance coverage, which would make it unable to comply
with the eligibility requirements for lenders imposed by Xxxxxx Xxx or for
seller/servicers imposed by Xxxxxxx Mac, or which would require notification
to
Xxxxxx Xxx or Xxxxxxx Mac. 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.
-32-
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.
|
Section
4.02
|
Liquidation
of Mortgage Loans.
|
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.01 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 (1) the Company would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices,
(3)
the Company shall determine prudently to be in the best interest of Purchaser,
and (4) is consistent with any related LPMI Policy, if applicable. In the event
that any payment due under any Mortgage Loan is not postponed pursuant to
Section 4.01 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
or
its designee in writing of the Company’s intention to do so. 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 4.05)
or
through Insurance Proceeds (respecting which it shall have similar
priority).
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Company has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Purchaser or its designee
otherwise requests an environmental inspection or review of such Mortgaged
Property to be conducted by a qualified inspector. Upon completion of the
inspection, the Company shall promptly provide the Purchaser or its designee
with a written report of the environmental inspection.
-33-
After
reviewing the environmental inspection report, the Purchaser or its designee
shall determine how the Company shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates
that the Mortgaged Property is contaminated by hazardous or toxic substances
or
wastes and (b) the Purchaser or its designee directs the Company to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure, the Company
shall be reimbursed for all reasonable costs associated with such foreclosure
or
acceptance of a deed in lieu of foreclosure and any related environmental clean
up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse the Company, the
Company shall be entitled to be reimbursed from amounts in the Custodial Account
pursuant to Section 4.05 hereof. In the event the Purchaser or its designee
directs the Company not to proceed with foreclosure or acceptance of a deed
in
lieu of foreclosure, the Company shall be reimbursed for all Servicing Advances
made with respect to the related Mortgaged Property from the Custodial Account
pursuant to Section 4.05 hereof.
|
Section
4.03
|
Collection
of Mortgage Loan Payments.
|
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, 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
Loan
and the 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
4.04
|
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 the Purchaser of Conventional Residential Conventional Residential Mortgage
Loans, and various Mortgagors”. 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 4.05. The creation of any Custodial Account shall be
evidenced by a certification in the form of Exhibit
D-1
hereto,
in the case of an account established with the Company, or by a letter agreement
in the form of Exhibit
D-2
hereto,
in the case of an account held by a depository other than the Company. A copy
of
such certification or letter agreement shall be furnished to the Purchaser
and,
upon request, to any subsequent Purchaser.
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 related 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):
-34-
(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) all
Liquidation Proceeds;
(iv) all
Insurance Proceeds including amounts required to be deposited pursuant to
Section 4.10, Section 4.11, Section 4.14 and Section 4.15;
(v) 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
4.14;
(vi) any
amount required to be deposited in the Custodial Account pursuant to Section
4.01, 4.09, 5.03, 6.01 or 6.02;
(vii) any
amounts payable in connection with the repurchase of any Mortgage Loan pursuant
to Section 3.03 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 3.03;
(viii) 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 therefore, which, in
the aggregate, for any month, shall not exceed one twelfth of 0.50% of the
outstanding principal balance of the Mortgage Loans;
(ix) any
amounts required to be deposited by the Company pursuant to Section 4.11 in
connection with the deductible clause in any blanket hazard insurance policy;
and
(x) any
amounts received with respect to or related to any REO Property and all REO
Disposition Proceeds pursuant to Section 4.16.
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, payments in the nature of late payment charges, prepayment
penalties, assumption fees, and other ancillary fees 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 4.05.
-35-
|
Section
4.05
|
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 5.01;
(ii) to
reimburse itself for Monthly Advances of the Company’s funds made pursuant to
Section 5.03, 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 3.03 or 6.02, 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 3.03 or 6.02, 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
reimburse itself for expenses incurred and reimbursable to it pursuant to
Section 9.01;
(vi) to
pay
LPMI Fees in accordance with Section 4.15 hereof;
(vii) to
pay
any amount required to be paid pursuant to Section 4.16 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;
(viii) to
clear
and terminate the Custodial Account upon the termination of this Agreement;
and
(ix) to
withdraw funds deposited in error.
-36-
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 5.01, 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 4.05.
|
Section
4.06
|
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 the Purchaser of Conventional Residential Mortgage
Loans, 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 4.07. The creation of any Escrow Account
shall be evidenced by a certification in the form of Exhibit
E-1
hereto,
in the case of an account established with the Company, or by a letter agreement
in the form of Exhibit
E-2
hereto,
in the case of an account held by a depository other than the Company. A copy
of
such certification shall be furnished to the Purchaser and, upon request, to
any
subsequent Purchaser.
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 4.07.
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
4.07
|
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;
-37-
(ii) to
reimburse the Company for any Servicing Advances made by the Company pursuant
to
Section 4.08 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;
(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 4.14;
(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
4.08
|
Payment
of Taxes, Insurance and Other Charges.
|
With
respect to each Mortgage Loan, 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 LPMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of
such
charges (including renewal premiums) and shall effect payment thereof prior
to
the applicable penalty or termination date, 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. To the extent that a Mortgage 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. 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.
|
Section
4.09
|
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 Certification or Escrow Account Certification (as applicable) in the
form of Exhibit
D-1
or
E-1
to this
Agreement.
-38-
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.
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
4.10
|
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 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.
-39-
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 in accordance with then
current Xxxxxx Xxx requirements, 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 4.04, 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 4.14) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05.
-40-
|
Section
4.11
|
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 4.10 and otherwise
complies with all other requirements of Section 4.10, it shall conclusively
be
deemed to have satisfied its obligations as set forth in Section 4.10. Any
amounts collected by the Company under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section 4.05. 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 4.10, and there shall have been a
loss
which would have been covered by such policy, the Company shall deposit in
the
Custodial 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.
|
Section
4.12
|
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, embezzlement, 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 4.12 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 any Purchaser, the Company shall cause
to be delivered to such Purchaser a certified true copy of such fidelity bond
and insurance policy.
|
Section
4.13
|
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.
-41-
|
Section
4.14
|
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 Custodial 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
4.15
|
Maintenance
of LPMI Policy; Claims.
|
With
respect to LPMI Loans, maintain in full force and effect an LPMI Policy, and
from time to time, withdraw the LPMI Fee with respect to such LPMI Loan from
the
Custodial Account in order to pay the premium thereon on a timely basis. In
the
event that the interest payments made with respect to any LPMI Loan are less
than the LPMI Fee, the Company shall advance from its own funds the amount
of
any such shortfall in the LPMI Fee, in payment of the premium on the related
LPMI Policy. Any such advance shall be a Servicing Advance subject to
reimbursement pursuant to the provisions on Section 4.05. In the event that
such
LPMI 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 LPMI 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 LPMI 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 LPMI 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. The Company shall not take any action which would result in noncoverage
under any applicable LPMI Policy of any loss which, but for the actions of
the
Company would have been covered thereunder. In connection with any assumption
or
substitution agreement entered into or to be entered into pursuant to Section
6.01, the Company shall promptly notify the insurer under the related LPMI
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such LPMI Policy and shall take all actions which may be
required by such insurer as a condition to the continuation of coverage under
such LPMI Policy. If such LPMI Policy is terminated as a result of such
assumption or substitution of liability, the Company shall obtain a replacement
LPMI Policy as provided above.
-42-
(b) In
connection with its activities as servicer, the Company agrees to prepare and
present, on behalf of itself and the Purchaser, claims to the insurer under
any
LPMI Policy in a timely fashion in accordance with the terms of such LPMI Policy
and, in this regard, to take such action as shall be necessary to permit
recovery under any LPMI Policy respecting a defaulted Mortgage Loan. Pursuant
to
Section 4.04, any amounts collected by the Company under any LPMI Policy shall
be deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
(c) Purchaser,
in its sole discretion, at any time, may (i) either obtain an additional LPMI
Policy on any Mortgage Loan which already has a LPMI Policy in place, or (ii)
obtain a LPMI Policy for any Mortgage Loan which does not already have a LPMI
Policy in place. In any event, the Company agrees to administer such LPMI
Policies in accordance with the Agreement or any Reconstitution
Agreement.
|
Section
4.16
|
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 or its designee, or in the event the Purchaser 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
Purchaser or its designee.
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 within one year after
title has been taken to such REO Property, 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.
-43-
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.
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 5.03, 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 pursuant to Section 4.10 and the fees of any
managing agent of the Company, a Subservicer, or the Company itself. The REO
management fee shall be an amount that is reasonable and customary in the area
where the Mortgaged Property is located. 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 4.16 and of any reserves reasonably
required from time to time to be maintained to satisfy anticipated liabilities
for such expenses).
|
Section
4.17
|
Real
Estate Owned Reports.
|
Together
with the statement furnished pursuant to Section 5.02, the Company shall furnish
to the Purchaser on or before the Remittance Date each month 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
4.18
|
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.
-44-
|
Section
4.19
|
Reports
of Foreclosures and Abandonments of Mortgaged Property.
|
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Company
shall
report to the Purchaser such foreclosure or abandonment as required pursuant
to
Section 6050J of the Code.
|
Section
4.20
|
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., TransUnion,
LLC
and Experian Information Solution, Inc. on a monthly basis.
ARTICLE
V
PAYMENTS
TO PURCHASER
|
Section
5.01
|
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 Determination Date (net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.05),
plus (b) all amounts, if any, which the Company is obligated to distribute
pursuant to Section 5.03, minus (c) any amounts attributable to Principal
Prepayments received after the applicable Principal Prepayment Period 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 4.04(viii),
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.
-45-
|
Section
5.02
|
Statements
to Purchaser.
|
Not
later
than the 10th
day of
each calendar month, the Company shall furnish to the Purchaser or its designee
(a) a Monthly Remittance Advice, with a trial balance report as to the Due
Period in the month of remittance, and (b) a monthly default report as to the
preceding calendar month, in each case, (i) by electronic medium, and (ii)
in a
form, mutually acceptable to the parties.
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
5.03
|
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 4.01. 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
5.03
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 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 Purchaser.
-46-
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01 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, 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, it 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.
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
6.02
|
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 5.02, 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.
-47-
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
6.03
|
Servicing
Compensation.
|
As
compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on
the
Mortgage Loans the amount of its Servicing Fee. The Servicing Fee shall be
payable monthly and shall be computed on the basis of the same unpaid principal
balance and for the period respecting which any related interest payment on
a
Mortgage Loan is computed. The Servicing Fee shall be payable only at the time
of and with respect to those Mortgage Loans for which payment is in fact made
of
the entire amount of the Monthly Payment. The obligation of the Purchaser to
pay
the Servicing Fee is limited to, and payable solely from, the interest portion
of such Monthly Payments collected by the Company.
Additional
servicing compensation in the form of assumption fees, late payment charges,
and
prepayment penalties, shall be retained 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
6.04
|
Annual
Statement as to Compliance.
|
The
Company shall deliver to the Purchaser, on or before March 15 each year
beginning March 15, 2004, 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
6.05
|
Annual
Independent Public Accountants’ Servicing Report.
|
On
or
before March 15th of each year beginning March 15, 2004, 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.
-48-
|
Section
6.06
|
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
at the
sole cost and expense of the Purchaser.
|
Section
6.07
|
Appointment
and Designation of Master Servicer.
|
The
Purchaser hereby appoints and designates Aurora Loan Services, Inc. as its
master servicer (the “Master
Servicer”)
for
the Mortgage Loans subject to this Agreement. The Company is hereby authorized
and instructed to take any and all instructions with respect to servicing the
Mortgage Loans hereunder as if the Master Servicer were the Purchaser hereunder.
The authorization and instruction set forth herein shall remain in effect until
such time as the Company shall receive written instruction from the Purchaser
that such authorization and instruction is terminated.
ARTICLE
VII
AGENCY
TRANSFER; PASS-THROUGH TRANSFER
|
Section
7.01
|
Removal
of Mortgage Loans from Inclusion Under this Agreement Upon an Agency
Transfer, or a Pass-Through Transfer on One or More Reconstitution
Dates.
|
The
Purchaser and the Company agree that with respect to any Pass-Through Transfer,
Whole Loan Transfer or Agency Transfers, as applicable, the Company shall
cooperate with the Purchaser in effecting such transfers and shall negotiate
in
good faith and 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, and provide to any master servicer or the 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 reasonably request as to the
related Mortgage Loans. Purchaser shall reimburse Company for any and all costs
or expenses incurred by Company in complying with such requests for information
for which the Company shall, if requested by the Purchaser, provide
indemnification through an indemnification agreement or otherwise; provided,
however, each Purchaser and depositor shall indemnify the Company and its
subsidiaries and affiliates for all information not specifically provided by
the
Company for inclusion in any disclosure statement. Such information may be
included in any disclosure document prepared in connection with the Pass-Through
Transfer, Whole Loan Transfer or Agency Transfer, as applicable. The Company
shall execute any Reconstitution Agreements required within a reasonable period
of time after receipt of such agreements which time shall not exceed ten (10)
Business Days from the date of receipt of
such
Reconstitution Agreement.
-49-
Nothing
in this Section 7.01 shall be deemed to materially increase the Company’s
obligations or liabilities under this Agreement.
Any
Reconstitution Agreement may require the Company to remit premium payments
with
respect to any LPMI Policy or “pool insurance policy” to the related
insurer;
(a) With
respect to each Pass-Through Transfer, Whole Loan Transfer or Agency Transfer
entered into by the Purchaser, the Company agrees:
(i) to
cooperate reasonably with the Purchaser, Xxxxxx Xxx, Xxxxxxx Mac, the trustee
or
a third party purchaser and any prospective purchaser, at the Purchaser’s
expense, with respect to all reasonable requests and due diligence procedures
including participating in meetings with rating agencies, Xxxxxx Mae, Xxxxxxx
Mac, bond insurers, guarantors, loss mitigation or credit risk management
advisors and such other parties as the Purchaser shall designate and
participating in meetings with prospective purchasers of the Mortgage Loans
or
interests therein and providing information contained in the Mortgage Loan
Schedule including any diskette or other related data tapes provided as
reasonably requested by such purchasers;
(ii)
to
negotiate and execute one or more loss mitigation advisory or credit risk
management agreements between the Company and any loss mitigation or credit
risk
management advisor designated by the Purchaser in its sole
discretion;
(iii)
to
deliver to the Purchaser and to any Person designated by the Purchaser (a)
specifically for inclusion in any prospectus or other offering material such
publicly available information regarding the Company, its financial condition
and its mortgage loan delinquency, foreclosure and loss experience and any
additional information reasonably requested by the Purchaser, (b) any similar
non-public, unaudited financial information (which the Purchaser may, at its
option and at its cost, have audited by certified public accountants) and such
other information as is reasonably requested by the Purchaser and which the
Company is capable of providing without unreasonable effort or expense, and
to
indemnify the Purchaser and its affiliates for material misstatements contained
in such information specifically provided for inclusion in a prospectus or
other
offering material, and if such indemnification from the Company is provided,
the
Purchaser shall indemnify the Company and its affiliates for material
misstatements contained in such prospectus or offering material that was not
specifically provided by the Company for inclusion in such prospectus or
offering material, and (c) such statements and audit letters of reputable,
certified public accountants pertaining to information provided by the Company
pursuant to clause (a) above as shall be reasonably requested by the Purchaser;
and
(iv)
to
provide, on an ongoing basis from information obtained through its servicing
of
the Mortgage Loans, any information necessary to enable the “tax matters person”
for any REMIC in a Pass-Through Transfer, including any master servicer or
trustee acting in such capacity, to perform its obligations in accordance with
applicable law and customary secondary mortgage market standards for securitized
transactions.
-50-
(b) The
Company shall provide to the Purchaser or issuer, as the case may be, and any
other participants in such Agency Transfer, Whole Loan Transfer or Pass-Through
Transfer, (i) any and all information with respect to itself, its servicing
portfolio or the Mortgage Loans 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 or any such other
participant shall request upon reasonable demand and (ii) such additional
corporate representations, warranties, covenants, opinions of counsel, letters
from auditors, and certificates of officers of the Company as are reasonably
believed necessary in connection with such transactions, including but not
limited to the delivery to the party filing the certificate pursuant to Section
302 of the Sarbanes Oxley Act of 2002, as amended, and any regulations
promulgated thereunder (collectively, the “Sarbanes
Act”)
of
certificates or other related information, no later than March 15th of the
applicable year and such other times as may be required under the Sarbanes
Act,
from time to time, upon reasonable demand and notice to the Company. The
Company
shall indemnify and hold harmless such party
filing the certificate pursuant to Section 302 of the Sarbanes Act
(the
“Beneficiary”) from and against any losses, damages, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments and other costs
and expenses arising out of a breach by the Company of its obligations
delineated in this paragraph; provided,
however,
that
the Company shall not be obligated to indemnify or hold harmless the Beneficiary
from or against any losses, damages, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments and other costs and expenses arising
out
of the negligence, bad faith or willful misconduct of the Beneficiary.
(c) To
the
extent required by the applicable Reconstitution Agreements or otherwise
requested by the Purchaser in connection with a Reconstitution, the Company
shall prepare Assignments of Mortgage in form and substance acceptable to Xxxxxx
Xxx, Xxxxxxx Mac, the trustee or such third party, as the case may be, for
each
Mortgage Loan that is part of a Reconstitution. The Company shall execute each
Assignment of Mortgage, track such Assignments of Mortgage to ensure they have
been recorded and deliver them as required by Xxxxxx Mae, Xxxxxxx Mac, the
trustee or such third party, as the case may be, upon the Company’s receipt
thereof. The Purchaser shall pay all fees associated with the preparation,
recording and tracking of such Assignments of Mortgage.
All
Mortgage Loans not sold or transferred pursuant to an Agency Transfer,
Pass-Through Transfer or Whole Loan Transfer and any and all Mortgage Loans
repurchased by the Purchaser pursuant to Section 7.03 below with respect to
an
Agency Transfer, Pass-Through Transfer or Whole Loan Transfer 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.
(d) If
required at any time by the Rating Agencies, Purchaser or successor Purchaser
in
connection with any Agency Transfer, Pass-Through Transfer or Whole Loan
Transfer, the Company shall deliver such additional documents from its Mortgage
File within 10 days to the Custodian, successor Purchaser or other designee
of
the Purchaser as the Rating Agencies, Purchaser or successor Purchaser may
require.
-51-
ARTICLE
VIII
COMPANY
TO COOPERATE
|
Section
8.01
|
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
8.02
|
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 by 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.
-52-
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 (a) perform its duties and service
the
Mortgage Loans in strict compliance with the terms of this Agreement, and/or
(b)
comply with applicable law. The Company immediately shall notify the Purchaser
if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the prior written consent of the Purchaser) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment
or
decree which may be entered against it or the Purchaser in respect of such
claim. The 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 3.03, or the failure of the Company to (a) service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement, and/or (b) comply with applicable law.
|
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 company in good
standing.
|
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.
-53-
|
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 other than
a
Subservicer) 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 sole discretion of the Purchaser;
provided, however, notwithstanding any of the foregoing or any other provision
in this Agreement, the Company may assign its right and obligations hereunder
to
Servicing LP or any entity that is directly or indirectly owned or controlled
by
the Company and the Company guarantees the performance by Servicing LP or such
entity 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.
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 other
than
a Subservicer) 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.
-54-
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) 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
(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 Xxxxxx Xxx or Xxxxxxx Mac lender;
or
-55-
(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 other than a Subservicer) 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. Notwithstanding the foregoing, with respect to the
Event of Default delineated in (iii) above, the Purchaser may terminate all
the
rights and obligations of the Company under this Agreement solely with respect
to the Mortgage Loans affected by such Event of Default.
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.
-56-
ARTICLE
XI
TERMINATION
|
Section
11.01
|
Termination.
|
This
Agreement shall terminate upon either: (i) the 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; or (ii) mutual consent
of
the Company and the Purchaser in writing.
|
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
12.05.
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.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
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Section
12.01
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Successor
to Company.
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Prior
to
termination of the Company’s responsibilities and duties under this Agreement
pursuant to Sections 9.04, 10.01, 11.01 or pursuant to Section 11.02 after
the
30 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 3.01
and
3.02 and the remedies available to the Purchaser under Sections 3.03, 3.04,
and
3.06, it being understood and agreed that the provisions of such Sections 3.01,
3.02, 3.03, 3.04, and 3.06 shall be applicable to the Company notwithstanding
any such sale, assignment, resignation or termination of the Company, or the
termination of this Agreement.
-57-
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 12.05.
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Section
12.02
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Amendment.
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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
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Governing
Law.
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This
Agreement shall be construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties hereunder shall
be
determined in accordance with such laws.
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Section
12.04
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Duration
of Agreement.
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This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
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Section
12.05
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Notices.
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All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
-58-
(i) if
to the
Company:
Countrywide
Home Loans Inc.,
0000
Xxxx
Xxxxxxx
Xxxxxxxxx,
XX 00000
Attention:
Xxxxx Xxxxxxx
or
such
other address as may hereafter be furnished to the Purchaser in writing by
the
Company;
(ii) if
to
Purchaser:
Xxxxxx
Brothers Bank, FSB
000
Xxxxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Contract Finance
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Section
12.06
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Severability
of Provisions.
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If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
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Section
12.07
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Relationship
of Parties.
|
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto and the services of the Company shall be
rendered as an independent contractor and not as agent for the
Purchaser.
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Section
12.08
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Execution;
Successors and Assigns.
|
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.04, this Agreement shall inure
to
the benefit of and be binding upon the Company and the Purchaser and their
respective successors and assigns.
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Section
12.09
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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 other comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Company’s expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option accordance with Section
14
of the Purchase Agreement.
-59-
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Section
12.10
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Assignment
by Purchaser.
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The
Purchaser shall have the right, without the consent of the Company but subject
to the limit set forth in Section 2.02 hereof, to assign, in whole or in part,
its interest under this Agreement with respect to some or all of the Mortgage
Loans, and designate any person to exercise any rights of the Purchaser
hereunder, by (i) executing an Assignment and Assumption Agreement substantially
in the form of Exhibit
G
hereto
or (ii) in connection with a Pass-Through Transfer, through any related
Reconstitution Agreement or assignment agreement with an affiliate of the
Purchaser, a depositor, a trustee or any other appropriate party in such
Pass-Through Transfer. Upon such assignment of rights and assumption of
obligations, the assignee or designee shall accede to the rights and obligations
hereunder of the Purchaser with respect to such Mortgage Loans and the Purchaser
as assignor shall be released from all obligations hereunder with respect to
such Mortgage Loans from and after the date of such assignment and assumption
to
the extent provided in the Assignment and Assumption Agreement or Reconstitution
Agreement or other assignment agreement in a Pass-Through Transfer. All
references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee.
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Section
12.11
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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 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 or (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 shall not constitute solicitation under this Section 12.11 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 12.11: (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; (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.
[Signature
page follows]
-60-
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 | ||
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By:
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Name:
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Title:
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| COUNTRYWIDE HOME LOANS, INC. | ||
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By:
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Name:
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Xxxxx Xxxxxxx | |
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Title:
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Executive Vice President | |
On
the __
day of ________, 200_ before me, a Notary Public in and for said State,
personally appeared ________, known to me to be Vice President of Xxxxxx
Brothers Bank, FSB, the federal savings association that executed the within
instrument and also known to me to be the person who executed it on behalf
of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
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| Notary Public | ||
| My Commission expires ____________ | ||
| STATE OF | ) | |
| ) ss.: | ||
| COUNTY OF | ) |
On
the __
day of _______, 200_ before me, a Notary Public in and for said State,
personally appeared __________, known to me to be ______________ of Countrywide
Home Loans, Inc. the corporation that executed the within instrument and also
known to me to be the person who executed it on behalf of said corporation,
and
acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
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| Notary Public | ||
| My Commission expires ____________ | ||
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
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(1)
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the
Seller’s Mortgage Loan identifying
number;
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(2)
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the
Mortgagor’s and Co-Mortgagor’s (if applicable)
names;
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(3)
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the
street address of the Mortgaged Property, including the city, state,
zip
code, county;
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(4)
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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;
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(5)
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a
code indicating the loan is a fixed rate or adjustable rate Mortgage
Loan
(to be provided in accordance with Standard and Poor’s loan type
requirements-Field 14);
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(6)
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Product
Description (to be provided in accordance with Standard and Poor’s
description categories-Field 7);
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| (7) |
a
code indicating the lien status of the Mortgage
Loan;
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(8)
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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;
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| (9) |
the
Loan to Value Ratio at origination;
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| (10) |
the
combined Loan to Value Ratio at
origination;
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| (11) |
the
Mortgage Interest Rate as of the Cut-off
Date;
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| (12) |
the
Payment and Rate Adjustment Frequencies (if
applicable);
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| (13) |
the
Index (if applicable);
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| (14) |
the
initial Interest Rate Adjustment Date (if
applicable);
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| (15) |
the
initial Payment Adjustment Date (if
applicable);
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| (16) |
the
next Interest Rate Adjustment Date (if
applicable);
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| (17) |
the
next Payment Adjustment Date (if
applicable);
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A-1
| (18) |
the
Gross Margin (if applicable);
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| (19) |
the
minimum Mortgage Interest Rate under the terms of the Mortgage Note
(if
applicable);
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| (20) |
a
code indicating Interest Only Loans
(Y/N);
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| (21) |
the
maximum Mortgage Interest Rate under the terms of the Mortgage Note
(if
applicable);
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| (22) |
the
Mortgage Interest Rate adjustment cap at the initial Interest Rate
Adjustment Date (if applicable);
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(23)
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the
Mortgage Interest Rate adjustment cap at all subsequent Interest
Rate
Adjustment Dates (if applicable);
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| (24) |
the
Lifetime Mortgage Interest Rate Cap (if applicable);
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| (25) |
the
rounding provisions under the terms of the Mortgage Note (if
applicable);
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| (26) |
the
lookback provisions (#of days) under the terms of the Mortgage Note
(if
applicable);
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| (27) |
negative
amortization indicator;
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| (28) |
the
date on which the first payment is
due;
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| (29) |
the
original term of the Mortgage Loan;
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| (30) |
the
stated maturity date;
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| (31) |
the
amount of the monthly principal and interest
Payment;
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| (32) |
the
Annual Payment Cap expressed as a percentage (for Arms
only);
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| (33) |
the
next due date as of the Cut-off
Date;
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| (34) |
the
original principal amount of the Mortgage
Loan;
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| (35) |
the
Senior balances, if applicable
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| (36) |
the
origination date of the Mortgage
Loan;
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(37)
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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;
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A-2
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(38)
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monthly
payment histories on current mortgages (12 months
);
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(39)
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prior
foreclosure history, if available;
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(40)
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prior
bankruptcy history, if available;
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(41)
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the
loan purpose code;
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(42)
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the
occupancy code;
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(43)
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the
loan documentation type, (to be provided in conformance with Standard
and
Poor’s documentation categories- Field
5);
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(44)
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Asset
Verification (Purchase Money loans only), (yes or
no);
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(45)
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the
Mortgagor’s and Co-Mortgagor’s (if applicable) social security
numbers;
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(46)
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the
Mortgage Loan FICO score at
origination;
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(47)
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the
purchase price of the Mortgaged Property (if a
purchase);
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(48)
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the
Appraisal value of the Mortgaged
Property;
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(49)
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the
Mortgagor’s and Co-Mortgagor’s (if applicable)
race;
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(50)
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the
Mortgagor’s and Co-Mortgagor’s (if applicable)
gender;
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(51)
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the
combined annual income;
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(52)
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as
of date;
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(53)
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amortization
term;
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(54)
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balloon
flag;
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(55)
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prepayment
penalty flag;
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(56)
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prepayment
penalty term;
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(57)
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mortgage
insurance provider, or code for
LPMI;
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(58)
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mortgage
insurance coverage percentage;
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(59)
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mortgage
insurance cost;
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(60)
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mortgage
insurance certificate number;
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A-3
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(61)
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the
monthly tax and insurance payment;
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(62)
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the
escrow balance as of the Cut-off Date;
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(63)
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The
MIN number assigned to each Mortgage Loan, if
applicable;
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(64)
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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;
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(65)
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the
Appraisal Type in #64 is an AVM, then a description of the AVM type;
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(66)
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a
code indicating whether the loan is High Cost or Covered (HC, CV,
HL);
and
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(67)
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a
section 32 flag and the origination points and or
fees.
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A-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 retained by the Company in the
Servicing File or delivered to the Custodian pursuant to Section 2.01 and 2.03
of the Flow Seller’s Warranties and Servicing Agreement to which this Exhibit is
attached (the “Agreement”):
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1.
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The
original Mortgage Note bearing all intervening endorsements, endorsed
“Pay
to the order of _________ without recourse” and signed in the name of the
Company by an authorized officer (in the event that the Mortgage
Loan was
acquired by the Company in a merger, the signature must be in the
following form: “Countrywide Home Loans Inc., successor by merger to [name
of predecessor]”; and in the event that the Mortgage Loan was acquired or
originated by the Company while doing business under another name,
the
signature must be in the following form: “Countrywide Home Loans Inc.,
formerly known as [previous
name]”).
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2.
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The
original of any guarantee executed in connection with the Mortgage
Note
(if any).
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3.
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The
original Mortgage, with evidence of recording thereon. If in connection
with any Mortgage Loan, the Company cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon
on or
prior to the related Closing Date because of a delay caused by the
public
recording office where such Mortgage has been delivered for recordation
or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Company shall
deliver
or cause to be delivered to the Custodian, a photocopy of such Mortgage,
together with (i) in the case of a delay caused by the public recording
office, an Officer’s Certificate of the Company stating that such Mortgage
has been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of
such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly
delivered
to the Custodian upon receipt thereof by the Company; or (ii) in
the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office or by the title insurance
company that issued the title policy to be a true and complete copy
of the
original recorded Mortgage.
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4.
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The
originals of all assumption, modification, consolidation or extension
agreements, with evidence of recording
thereon.
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B-1
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5.
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The
original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording, delivered in blank. If the Mortgage
Loan was acquired by the Company in a merger, the Assignment of Mortgage
must be made by “Countrywide Home Loans Inc., successor by merger to [name
of predecessor].” If the Mortgage Loan was acquired or originated by the
Company while doing business under another name, the Assignment of
Mortgage must be by “Countrywide Home Loans Inc., formerly known as
[previous name].”
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6.
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Originals
of all intervening assignments of the Mortgage with evidence of recording
thereon, or if any such intervening assignment has not been returned
from
the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of mortgage,
the Company shall deliver or cause to be delivered to the Custodian,
a
photocopy of such intervening assignment, together with (i) in the
case of
a delay caused by the public recording office, an Officer’s Certificate of
the Company stating that such intervening assignment of mortgage
has been
dispatched to the appropriate public recording office for recordation
and
that such original recorded intervening assignment of mortgage or
a copy
of such intervening assignment of mortgage certified by the appropriate
public recording office or by the title insurance company that issued
the
title policy to be a true and complete copy of the original recorded
intervening assignment of mortgage will be promptly delivered to
the
Custodian upon receipt thereof by the Company; or (ii) in the case
of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment.
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7.
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A
copy of the mortgagee policy of title insurance or attorney’s opinion of
title and abstract of title.
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8.
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Any
security agreement, chattel mortgage or equivalent executed in connection
with the Mortgage.
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9.
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The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the
Agreement.
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10.
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Residential
loan application.
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11.
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Mortgage
Loan closing statement.
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12.
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Verification
of employment and income, if applicable and
available.
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13.
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Verification
of acceptable evidence of source and amount of downpayment, if
applicable.
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14.
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Credit
report on the Mortgagor, if
applicable.
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B-2
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15.
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Residential
appraisal report, if applicable.
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16.
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Photograph
of the Mortgaged Property, if applicable and
available.
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17.
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Survey
of the Mortgaged Property, if applicable and
available.
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18.
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Copy
of each instrument necessary to complete identification of any exception
set forth in the exception schedule in the title policy, i.e., map
or
plat, restrictions, easements, sewer agreements, home association
declarations, etc., if applicable.
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19.
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All
required disclosure statements.
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20.
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If
available, termite report, structural engineer’s report, water potability
and septic certification.
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21.
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Sales
contract, if applicable.
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22.
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Tax
receipts, insurance premium receipts, ledger sheets, payment history
from
date of origination, insurance claim files, correspondence, current
and
historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in
a
mortgage loan file and which are required to document the Mortgage
Loan or
to service the Mortgage Loan, if
applicable.
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B-3
EXHIBIT
C
MORTGAGE
LOAN DOCUMENTS
The
Mortgage Loan Documents for each Mortgage Loan shall include each of the
following items, which shall be delivered to the Custodian pursuant to Section
2.01 of the Flow Seller’s Warranties and Servicing Agreement to which this
Exhibit is annexed (the “Agreement”):
(a) the
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of ___________, without recourse” and signed in the name of the
Company by an authorized officer. To the extent that there is no room on the
face of the Mortgage Note for endorsements, the endorsement may be contained
on
an allonge, if state law so allows. If the Mortgage Loan was acquired by the
Company in a merger, the endorsement must be by “Countrywide Home Loans Inc.,
successor by merger to [name of predecessor].” If the Mortgage Loan was acquired
or originated by the Company while doing business under another name, the
endorsement must be by “Countrywide Home Loans Inc., formerly known as [previous
name]”;
(b) the
original of any guarantee executed in connection with the Mortgage
Note;
(c) the
original Mortgage with evidence of recording thereon, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of attorney,
with evidence of recording thereon;
(d) the
originals of all assumption, modification, consolidation or extension
agreements, with evidence of recording thereon;
(e) the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording, delivered in blank, or the original Assignment of
Mortgage in recordable form into MERS. If the Mortgage Loan was acquired by
the
Company in a merger, the Assignment of Mortgage must be made by “Countrywide
Home Loans Inc., successor by merger to [name of predecessor].” If the Mortgage
Loan was acquired or originated by the Company while doing business under
another name, the Assignment of Mortgage must be by “Countrywide Home Loans
Inc., formerly known as [previous name];” and
(f) the
originals of all intervening assignments of mortgage with evidence of recording
thereon, including warehousing assignments, if any.;
X-0
XXXXXXX
X-0
CUSTODIAL
ACCOUNT CERTIFICATION
_____________________,
200_
Countrywide
Home Loans, Inc. hereby certifies that it has established the account described
below as a Custodial Account pursuant to Section 4.04 of the Flow Seller’s
Warranties and Servicing Agreement, dated as of June 1, 2004, Conventional
Residential Mortgage Loans.
Title
of
Account: Countrywide
Home Loans, Inc. in trust for the Purchaser
Account
Number: _______________
Address
of office or branch
of
the
Company at
which
Account is maintained:
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Countrywide
Home Loans, Inc.
Company
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By:
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Name:
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Title:
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X-0-0
XXXXXXX
X-0
CUSTODIAL
ACCOUNT LETTER AGREEMENT
_________________,
200_
To:
____________________
_________________
_________________
(the
“Depository”)
As
Company under the Flow Seller’s Warranties and Servicing Agreement, dated as of
June 1, 2004, Conventional Residential Mortgage Loans (the “Agreement”), we
hereby authorize and request you to establish an account, as a Custodial Account
pursuant to Section 4.04 of the Agreement, to be designated as “Countrywide Home
Loans, Inc., in trust for the Purchaser - Conventional Residential Mortgage
Loans.” 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.
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Countrywide
Home Loans, Inc.
Company
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By:
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D-2-1
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”).
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D-2-2
EXHIBIT
E-1
ESCROW
ACCOUNT CERTIFICATION
__________________,
200_
Countrywide
Home Loans, Inc. hereby certifies that it has established the account described
below as an Escrow Account pursuant to Section 4.06 of the Flow Seller’s
Warranties and Servicing Agreement, dated as of June 1, 2004, Conventional
Residential Mortgage Loans.
Title
of
Account: “Countrywide
Home Loans, Inc. in trust for the Purchaser and various
Mortgagors.”
Account
Number: _______________
Address
of office or branch
of
the
Company at
which
Account is maintained:
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Countrywide
Home Loans, Inc.
Company
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E-1-1
EXHIBIT
E-2
ESCROW
ACCOUNT LETTER AGREEMENT
___________________,
200_
To:
_______________
_____________
_____________
(the
“Depository”)
As
Company under the Flow Seller’s Warranties and Servicing Agreement, dated as of
June 1, 2004, Conventional Residential Mortgage Loans (the “Agreement”), we
hereby authorize and request you to establish an account, as an Escrow Account
pursuant to Section 4.07 of the Agreement, to be designated as “Countrywide Home
Loans, Inc., in trust for the Purchaser 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.
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Home Loans, Inc.
Company
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Name:
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Title:
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E-2-1
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”).
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E-2-2
Exhibit
F-1
RESERVED
F-1-1
Exhibit
F-2
RESERVED
F-2-1
EXHIBIT
G
ASSIGNMENT
AND ASSUMPTION
_________________,
200_
ASSIGNMENT
AND ASSUMPTION, dated __________, between __________________________________,
a
___________________ corporation having an office at __________________
(“Assignor”) and _________________________________, a __________________
corporation having an office at __________________ (“Assignee”):
For
and
in consideration of the sum of TEN DOLLARS ($10.00) and other valuable
consideration the receipt and sufficiency of which hereby are acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
1. The
Assignor hereby grants, transfers and assigns to Assignee all of the right,
title and interest of Assignor, as purchaser, with respect to the Mortgage
Loans
identified on Exhibit A hereto (the “Mortgage
Loans”)
in, to
and under that certain Flow Seller’s Warranties and Servicing Agreement,
Conventional Residential Mortgage Loans (the “Flow Seller’s Warranties and
Servicing Agreement”), dated as of June 1, 2004, by and between Xxxxxx Brothers
Bank, FSB (the “Purchaser”), and Countrywide Home Loans, Inc. (the “Company”),
and the Mortgage Loans delivered thereunder by the Company to the
Assignor.
2. The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The
Assignor is the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
b. The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Company with respect to the
Flow Seller’s Warranties and Servicing Agreement or the Mortgage
Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Flow Seller’s Warranties and Servicing
Agreement, the Custodial Agreement or the Mortgage Loans, including without
limitation the transfer of the servicing obligations under the Flow Seller’s
Warranties and Servicing Agreement. The Assignor has no knowledge of, and has
not received notice of, any waivers under or amendments or other modifications
of, or assignments of rights or obligations under, the Flow Seller’s Warranties
and Servicing Agreement or the Mortgage Loans; and
d. Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the “33 Act”) or which would render the
disposition of the Mortgage Loans a violation of Section 5 of the 33 Act or
require registration pursuant thereto.
G-1
3. The
Assignee warrants and represents to, and covenants with, the Assignor and the
Company that:
a. The
Assignee agrees to be bound, as Purchaser, by all of the terms, covenants and
conditions of the Flow Seller’s Warranties and Servicing Agreement, the Mortgage
Loans and the Custodial Agreement, and from and after the date hereof, the
Assignee assumes for the benefit of each of the Company and the Assignor all
of
the Assignor’s obligations as Purchaser thereunder;
b. The
Assignee understands that the Mortgage Loans have not been registered under
the
33 Act or the securities laws of any state;
c. The
purchase price being paid by the Assignee for the Mortgage Loans are in excess
of $250,000 and will be paid by cash remittance of the full purchase price
within 60 days of the sale;
d. The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person. In this connection, neither the Assignee nor
any
Person authorized to act therefor has offered the Mortgage Loans by means of
any
general advertising or general solicitation within the meaning of Rule 502(c)
of
U.S. Securities and Exchange Commission Regulation D, promulgated under the
1933
Act;
e. The
Assignee considers itself a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
f. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Company;
g. Neither
the Assignee nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner which would
constitute a distribution of the Mortgage Loans under the 33 Act or which would
render the disposition of the Mortgage Loans a violation of Section 5 of the
33
Act or require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with respect
to the Mortgage Loans; and
h. Either:
(1) the Assignee is not an employee benefit plan (“Plan”) within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) or a plan (also “Plan”) within the meaning of section 4975(e)(1) of
the Internal Revenue Code of 1986 (“Code”), and the Assignee is not directly or
indirectly purchasing the Mortgage Loans on behalf of, investment manager of,
as
named fiduciary of, as Trustee of, or with assets of, a Plan; or (2) the
Assignee’s purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
G-2
i. The
Assignee’s address for purposes of all notices and correspondence related to the
Mortgage Loans and the Flow Seller’s Warranties and Servicing Agreement
is:
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Attention: ________________
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The
Assignee’s wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Flow Seller’s Warranties and
Servicing Agreement are:
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G-3
IN
WITNESS WHEREOF, the parties have caused this Assignment and Assumption to
be
executed by their duly authorized officers as of the date first above
written.
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Assignor
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Assignee
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By:
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Its:
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Its: | |||
X-0
XXXXXXX
X
XXXXXXXX
X-0
XXXXXXX
I
ASSIGNMENT
AND CONVEYANCE
On
this
[__] day of [___], 200[_], Countrywide Home Loans Inc., as the Company, under
that certain Flow Seller’s Warranties and Servicing Agreement, dated as of
[___], 200[_] (the “Agreement”)
does
hereby sell, transfer, assign, set over and convey to Xxxxxx Brothers Bank,
FSB,
as Purchaser under the Agreement all rights, title and interest of the Company
in and to the Mortgage Loans listed on the Mortgage Loan Schedule attached
hereto as Exhibit
1,
together with the related Mortgage Files and all rights and obligations arising
under the documents contained therein. Pursuant to Section 2 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 each Mortgage File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Company shall immediately vest in the Purchaser and shall be delivered promptly
by the Company to the Purchaser.
The
Company confirms to the Purchaser that the representations and warranties set
forth in Section 3 of the Agreement with respect to the Mortgage Loans listed
on
the Mortgage Loan Schedule attached hereto as Exhibit
1,
and the
representations and warranties in Section 3 of the Agreement with respect to
the
Company are true and correct as of the date hereof.
The
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto have the
pool characteristics as set forth on Exhibit
2
attached
hereto.
The
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto have been
underwritten in accordance with the Underwriting Guidelines set forth in
Exhibit
3
attached
hereto.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Agreement.
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COUNTRYWIDE
HOME LOANS, INC.
(Company)
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By:
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Name:
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Title:
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XXXXXX BROTHERS BANK, FSB
(Purchaser)
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By:
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Name:
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Title:
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I-1
EXHIBIT
1
MORTGAGE
LOAN SCHEDULE
[INTENTIONALLY
OMITTED]
EXHIBIT
2
POOL
CHARACTERISTICS
The
Mortgage Interest Rate shall not exceed [____]% nor be less than [___]%. With
respect to the aggregate unpaid principal balance of the Mortgage Loans, no
more
than [___]% of the Mortgage Loans have a balloon payment feature. With respect
to the aggregate unpaid principal balance of all the Mortgage Loans, the
Mortgaged Properties are located as follows: (i) no more than [___]% are located
in California (ii) no more than [___]% are located in Florida and (iii) no
other
one state contains more than [__]% of the Mortgaged Properties. With respect
to
the aggregate unpaid principal balance of all Mortgage Loans, (a) no more than
[___]% are secured by real property improved by individual condominium units,
(b) no more than [___]% are secured by real property improved by an individual
unit in a planned unit development, and (c) at least [___]% are secured by
real
property with a detached one family residence erected thereon. All of the
Mortgaged Properties are owner occupied primary residences. No Mortgage Loan
has
a Combined Loan-to-Value Ratio of greater than [_____]%. The Mortgage Loans
have
a weighted average Combined Loan-to-Value ration of [_____]%. With respect
to
the aggregate unpaid principal balance of the Mortgage Loans, (a) at least
[___]% of the Mortgage Loans were originated under the Company’s full
documentation program (b) no more than [___]% of the Mortgage Loans were
originated under the Company’s “stated income” documentation program, and (c) no
more than [___]% were originated under Company’s “limited” documentation
program. With respect to the aggregate unpaid principal balance of the Mortgage
Loans, (a) no more than [___]% are “cash-out” refinance and/or debt
consolidation mortgage loans, (b) no more than [___]% are rate and term
refinance mortgage loans and (c) at least [___]% are purchase mortgage loans.
No
Mortgage Loans has a FICO Score of less than [___]. The weighted average FICO
Score of the Mortgage Loans is [_____]. With respect to the aggregate unpaid
principal balance of the Mortgage Loans, the Mortgage Loans have the following
Credit Grades: (i) [___]% of the Mortgage Loans are Credit Grade “A”; (ii)
[___]% of the Mortgage Loans are Credit Grade “A-”; and (iii) [___]% of the
Mortgage Loans are Credit Grade “B”. [___]. With respect to the aggregate unpaid
principal balance of the Mortgage Loans, [___]% of the Mortgage Loans have
prepayment penalty features. With respect to the aggregate unpaid principal
balance of the Mortgage Loans, the weighted average prepayment penalty term
of
Mortgage Loans that have prepayment penalties is [___] months. The weighted
average seasoning of the Mortgage Loans is less than [__] months. No Mortgage
Loans has a debt to income ratio greater than [___]. The weighted average debt
to income ratio of the Mortgage Loans is [_____]. No more than [___]% of the
Mortgage Loans has a debt to income ratio greater than 45. No more than [___]%
of the Mortgage Loans has a debt to income ratio greater than 50.
2
EXHIBIT
3
UNDERWRITING
GUIDELINES
[INTENTIONALLY
OMITTED]
3
AMENDMENT
REG AB
TO
THE
FLOW SELLER’S WARRANTIES AND SERVICING AGREEMENT
This
is
Amendment Reg AB (“Amendment
Reg AB”),
dated
as of January ___, 2006, by and between Xxxxxx Brothers Bank, FSB (the
“Purchaser”), and
Countrywide Home Loans, Inc. (the “Company”)
to
that certain Flow Seller’s Warranties and Servicing Agreement dated as of June
1, 2004 by and between the Company and the Purchaser (as amended, modified
or
supplemented, the “Existing
Agreement”).
WITNESSETH
WHEREAS,
the Company and the Purchaser have agreed, subject to the terms and conditions
of this Amendment Reg AB that the Existing Agreement be amended to reflect
agreed upon revisions to the terms of the Existing Agreement.
Accordingly,
the Company and the Purchaser hereby agree, in consideration of the mutual
premises and mutual obligations set forth herein, that the Existing Agreement
is
hereby amended as follows:
1. Capitalized
terms used herein but not otherwise defined shall have the meanings set forth
in
the Existing Agreement. The Existing Agreement is hereby amended by adding
the
following definitions in their proper alphabetical order:
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, except for up to 2% of the Mortgage Loans
(measured by unpaid principal balance) included in any Mortgage Loan pool sold
to the Purchaser, were acquired by the Company within 180 days after
origination; (iii) either (x) the Designated Guidelines were, at the time such
Mortgage Loans were originated, used by the 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.
4
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.
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.
5
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.
2. The
Purchaser and the Company agree that the Existing Agreement is hereby amended
by
adding the following provisions:
(a)
Intent
of the Parties; Reasonableness.
The
Purchaser and the Company acknowledge and agree that the purpose of Article
2 of
this Agreement is to facilitate compliance by the Purchaser and any Depositor
with the provisions of Regulation AB and related rules and regulations of the
Commission. 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.
6
(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: (i)
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; (ii)
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; (iii) 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; (iv) 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; (v) 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;
(vi)
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
(vii) there are no affiliations, relationships or transactions relating to
the
Company, any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
(ii) If
so
requested by the Purchaser or any Depositor on any date following the
date
on which information is first provided to the Purchaser or any Depositor under
Section 2(c),
the
Company shall make reasonable best efforts within five Business Days but in
no
event later than ten Business Days following such request, confirm in writing
the accuracy of the representations and warranties set forth in paragraph (i)
of
this Section or, if any such representation and warranty is not accurate as
of
the date of such request, provide reasonably adequate disclosure of the
pertinent facts, in writing, to the requesting party.
(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.
7
(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;
(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.
8
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;
9
(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:
(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;
10
(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
(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 (or shall cause each
Subservicer and Third-Party Originator, if applicable, to) (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 (2) any affiliations or relationships that develop
following the closing date of a Securitization Transaction between the Company,
any Subservicer or any Third-Party Originator and any of the parties specified
in clause (D) of paragraph (i) of this Section 2(c) (and any other parties
identified in writing by the requesting party) with respect to such
Securitization Transaction, and (b) provide to the Purchaser and any Depositor
a
description of such proceedings, affiliations or relationships.
(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 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
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 servicer 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.
11
(d) Servicer
Compliance Statement.
The
Company shall deliver using best reasonable efforts on or before March 1, but
in
no event later than March 15, of each calendar year, commencing in 2007, 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 under
the
servicing provisions of 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 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 in no
event 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 a certification
substantially in the form of Exhibit B hereto delivered to the Purchaser
concurrently with the execution of this Agreement;
(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
12
(D) if
requested in writing by the Purchaser or any Depositor not later than February
1
of the calendar year in which such certification is to be delivered, deliver
to
the Person that will be responsible for signing the certification (a “Sarbanes
Certification”) required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act
(pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an
asset-backed issuer with respect to a Securitization Transaction a certification
in the form attached hereto as Exhibit A; 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
a certification substantially in the form of Exhibit B hereto delivered to
the
Purchaser concurrently with the execution of this Agreement or, in the case
of a
Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a 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.
13
(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 provide to the Purchaser and any 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.
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 Section 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 Amendment Reg AB
by or on
behalf of the Company,
or provided under this Amendment Reg AB 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;
14
(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 Amendment Reg AB,
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
is
of a nature that is incapable of cure and which failure may reasonably be
expected have a material and adverse effect on the Purchaser or any Depositor
in
connection with a Securitization Transaction) 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.
15
(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:
16
(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.
3. 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
and
each Subcontractor 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.
4. Notwithstanding
any other provision of this Amendment Reg AB, (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.
5. The
Existing Agreement is hereby amended by adding the Exhibits attached hereto
as
Exhibit A and Exhibit B to the end thereto. References in this Amendment Reg
AB
to “this Agreement” or words of similar import (including indirect references to
the Agreement) shall be deemed to be references to the Existing Agreement as
amended by this Amendment Reg AB. Except as expressly amended and modified
by
this Agreement Reg AB, the Agreement shall continue to be, and shall remain,
in
full force and effect in accordance with its terms. In the event of a conflict
between this Amendment Reg AB and any other document or agreement, including
without limitation the Existing Agreement, this Amendment Reg AB shall
control.
17
6. This
Amendment Reg AB 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.
7. This
Amendment Reg AB may be executed in one or more counterparts and by different
parties hereto on separate counterparts, each of which, when so executed, shall
constitute one and the same agreement. This Amendment Reg AB will become
effective as of the date first mentioned above. This
Amendment Reg AB 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
Amendment Reg AB shall not be assigned, pledged or hypothecated by the Company
to a third party without the prior written consent of the Purchaser, which
consent may be withheld by the Purchaser pursuant to Section 9.04 of the
Existing Agreement. The Existing Agreement as amended by this Amendment Reg
AB
may be assigned, pledged or hypothecated by the Purchaser in whole or in part,
and with respect to one or more of the Mortgage Loans, without the consent
of
the Company subject to Sections 2.02 and 12.10 of the Existing Agreement.
[Signatures
Commence on Following Page]
18
IN
WITNESS WHEREOF, the parties have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year
first
above written.
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XXXXXX
BROTHERS BANK, FSB
Purchaser
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By:
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Name:
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Title:
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COUNTRYWIDE
HOME LOANS, INC.
Company
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By:
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Name:
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Title:
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19
EXHIBIT
A
FORM
OF
ANNUAL CERTIFICATION
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Re:
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The
[ ] agreement dated as of [ ],
200[ ] (the “Agreement”), among [IDENTIFY
PARTIES]
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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:
(1) I
have
reviewed the servicer compliance statement of the Company provided in accordance
with Item 1123 of Regulation AB (the “Compliance Statement”), the report on
assessment of the Company’s compliance with the servicing criteria set forth in
Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in accordance
with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing
Assessment”), the registered public accounting firm’s attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
and
Section 1122(b) of Regulation AB (the “Attestation
Report”), and all servicing reports, officer’s certificates and other
information relating to the servicing of the Mortgage Loans by the Company
during 200[ ] that were delivered by the Company to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee] pursuant to the Agreement
(collectively, the “Company Servicing Information”);
(2) Based
on
my knowledge, the Company Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in 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
(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.
A-1
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Date:
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By:
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Name:
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Title:
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A-2
EXHIBIT
B
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”:
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Servicing
Criteria
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Applicable
Servicing Criteria
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Reference
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Criteria
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General
Servicing Considerations
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1122(d)(1)(i)
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Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
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1122(d)(1)(ii)
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If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
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1122(d)(1)(iii)
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Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
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1122(d)(1)(iv)
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A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
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Cash
Collection and Administration
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1122(d)(2)(i)
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Payments
on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
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1122(d)(2)(ii)
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Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
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1122(d)(2)(iii)
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Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction
agreements.
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1122(d)(2)(iv)
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The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
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1122(d)(2)(v)
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Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
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1122(d)(2)(vi)
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Unissued
checks are safeguarded so as to prevent unauthorized
access.
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1122(d)(2)(vii)
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Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
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B-1
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Servicing
Criteria
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Applicable
Servicing Criteria
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Reference
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Criteria
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Investor
Remittances and Reporting
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1122(d)(3)(i)
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Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
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1122(d)(3)(ii)
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Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
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1122(d)(3)(iii)
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Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
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1122(d)(3)(iv)
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Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
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Pool
Asset Administration
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1122(d)(4)(i)
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Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
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1122(d)(4)(ii)
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Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
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1122(d)(4)(iii)
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Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
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1122(d)(4)(iv)
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Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
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1122(d)(4)(v)
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The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
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1122(d)(4)(vi)
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Changes
with respect to the terms or status of an obligor's mortgage loans
(e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
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1122(d)(4)(vii)
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Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
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1122(d)(4)(viii)
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Records
documenting collection efforts are maintained during the period a
mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
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1122(d)(4)(ix)
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Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan
documents.
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B-2
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Servicing
Criteria
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Applicable
Servicing Criteria
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Reference
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Criteria
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1122(d)(4)(x)
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Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction
agreements.
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1122(d)(4)(xi)
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Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
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1122(d)(4)(xii)
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Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
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1122(d)(4)(xiii)
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Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
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1122(d)(4)(xiv)
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Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
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1122(d)(4)(xv)
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Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
|||
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|
[NAME
OF COMPANY] [NAME OF SUBSERVICER]
Date: _________________________
|
||
| |
|
|
| By: | ||
|
Name:
|
||
| Title: | ||
B-3
