EXECUTION COPY
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GMAC MORTGAGE CORPORATION
as Servicer,
GMACM HOME EQUITY LOAN TRUST 2004-HE3,
as Issuer
and
XXXXX FARGO BANK, N.A.
as Indenture Trustee
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SERVICING AGREEMENT
Dated as of June 30, 2004
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This Servicing Agreement, dated as of June 30, 2004 (the "Agreement"),
is among GMAC Mortgage Corporation, as servicer (the "Servicer"), the GMACM Home
Equity Loan Trust 2004-HE3, as issuer (the "Issuer"), and Xxxxx Fargo Bank,
N.A., as indenture trustee (the "Indenture Trustee").
WITNESSETH:
WHEREAS, pursuant to the terms of the Purchase Agreement (as defined
herein), GMAC Mortgage Corporation, as seller (in such capacity, "GMACM") and as
servicer, and Walnut Grove Mortgage Loan Trust 2003-A, as seller ("WG Trust
2003" and, with GMACM, each a "Seller" and together, the "Sellers"), will sell
to Residential Asset Mortgage Products, Inc. ("RAMP"), as purchaser (in such
capacity, the "Purchaser"), the Initial Mortgage Loans on the Closing Date, and
may sell Subsequent Mortgage Loans on one or more Subsequent Transfer Dates,
together with the Related Documents on the Closing Date and any Subsequent
Transfer Date, and thereafter all Additional Balances created on or after the
Cut-Off Date and any such Subsequent Transfer Date;
WHEREAS, RAMP, as depositor (in such capacity, the "Depositor"), will
sell the Initial Mortgage Loans and assign all of its rights under the Purchase
Agreement to the Issuer, together with the Related Documents on the Closing
Date, and thereafter all Additional Balances relating thereto created on or
after the Cut-Off Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will
issue the Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue
the Notes; and
WHEREAS, pursuant to the terms of this Agreement, the Servicer will
service the Mortgage Loans directly or through one or more Subservicers.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Appendix A to the indenture dated
as of June 30, 2004 (the "Indenture"), between the Issuer and the Indenture
Trustee, which is incorporated by reference herein. All other capitalized terms
used herein shall have the meanings specified herein.
Section 1.02 Other Definitional Provisions.
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(a) All terms defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document,
to the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; Section and Exhibit references contained
in this Agreement are references to Sections and Exhibits in or to this
Agreement unless otherwise specified; the term "including" shall mean "including
without limitation"; "or" shall include "and/or"; and the term "proceeds" shall
have the meaning ascribed thereto in the UCC.
(d) The definitions contained in this Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as the
feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
Section 1.03 Interest Calculations. All calculations of interest hereunder that
are made in respect of a Mortgage Loan shall be made in conformity with the
related Loan Agreement. All calculations of interest on the Notes shall be made
on the basis of the actual number of days in an Interest Period and a year
assumed to consist of 360-days. The calculation of the Servicing Fee shall be
made on the basis of a 360-day year consisting of twelve 30-day months. All
dollar amounts calculated hereunder shall be rounded to the nearest xxxxx with
one-half of one xxxxx being rounded up.
ARTICLE II
Representations and Warranties
Section 2.01 Representations and Warranties Regarding the Servicer. The Servicer
represents and warrants to the Issuer and for the benefit of the Indenture
Trustee, as pledgee of the Mortgage Loans, as of the Closing Date:
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(a) the Servicer is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania and has the
corporate power to own its assets and to transact the business in which it is
currently engaged. The Servicer is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the character
of the business transacted by it or properties owned or leased by it requires
such qualification and in which the failure to so qualify would have a material
adverse effect (not in the ordinary course of business) on the business,
properties, assets, or condition (financial or other) of the Servicer;
(b) the Servicer has the power and authority to make, execute, deliver and
perform this Agreement and all of the transactions contemplated under this
Agreement, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Servicing Agreement will constitute the legal, valid and binding
obligation of the Servicer enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies;
(c) the Servicer is not required to obtain the consent of any other Person or
any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or filed, as the case
may be;
(d) the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby by the Servicer will not violate any material
provision of any existing law or regulation or any order or decree of any court
applicable to the Servicer or any provision of the Articles of Incorporation or
Bylaws of the Servicer, or constitute a material breach of any material
mortgage, indenture, contract or other agreement to which the Servicer is a
party or by which the Servicer may be bound;
(e) no litigation or administrative proceeding of or before any court, tribunal
or governmental body is currently pending, or to the knowledge of the Servicer
threatened, against the Servicer or any of its properties or with respect to
this Agreement or the Securities which in the opinion of the Servicer has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement;
(f) the Servicer 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 Mortgage Loans that are registered with MERS; and
(g) the servicing of the Mortgage Loans has at all times been conducted in
material compliance with all applicable federal, state and local laws, rules and
regulations and there has been no material violation of any such laws, rules or
regulations arising out of the servicing of the Mortgage Loans.
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The foregoing representations and warranties shall survive any
termination of the Servicer hereunder.
Section 2.02 Representations and Warranties of the Issuer. The Issuer hereby
represents and warrants to the Servicer and for the benefit of the Indenture
Trustee, as pledgee of the Mortgage Loans, as of the Closing Date:
(a) the Issuer is a statutory trust duly formed and in good standing under the
laws of the State of Delaware and has full power, authority and legal right to
execute and deliver this Agreement and to perform its obligations under this
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement; and
(b) the execution and delivery by the Issuer of this Agreement and the
performance by the Issuer of its obligations under this Agreement will not
violate any provision of any law or regulation governing the Issuer or any
order, writ, judgment or decree of any court, arbitrator or governmental
authority or agency applicable to the Issuer or any of its assets. Such
execution, delivery, authentication and performance will not require the
authorization, consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action with respect to, any
governmental authority or agency regulating the activities of limited liability
companies. Such execution, delivery, authentication and performance will not
conflict with, or result in a breach or violation of, any mortgage, deed of
trust, lease or other agreement or instrument to which the Issuer is bound.
Section 2.03 Enforcement of Representations and Warranties. The Servicer, on
behalf of and subject to the direction of the Indenture Trustee, as pledgee of
the Mortgage Loans, or the Issuer, shall enforce the representations and
warranties of the Sellers pursuant to the Purchase Agreement. Upon the discovery
by the Sellers, the Depositor, the Servicer, the Indenture Trustee, the
Enhancer, the Issuer, or the Custodian of a breach of any of the representations
and warranties made by a Seller in the Purchase Agreement, in respect of any
Mortgage Loan which materially and adversely affects the interests of the
Securityholders or the Enhancer, the party discovering such breach shall give
prompt written notice to the other parties (the Custodian being so obligated
under the Custodial Agreement). The Servicer shall promptly notify such Seller
of such breach and request that, pursuant to the terms of the Purchase
Agreement, the Seller either (i) cure such breach in all material respects
within 90 days from the date the Seller was notified of such breach or (ii)
purchase such Mortgage Loan from the Issuer at the price and in the manner set
forth in Section 3.1(d) of the Purchase Agreement; provided, that the Seller
shall, subject to the conditions set forth in the Purchase Agreement, have the
option to substitute an Eligible Substitute Loan or Loans for such Mortgage
Loan. In the event that the Seller elects to substitute one or more Eligible
Substitute Loans pursuant to Section 3.1(e) of the Purchase Agreement, the
Seller shall deliver to the Custodian or the Servicer, in accordance with the
Purchase Agreement, with respect to such Eligible Substitute Loans, the original
Loan Agreement, the Mortgage, and such other documents and agreements as are
required by the Purchase Agreement. Payments due with respect to Eligible
Substitute Loans in the month of substitution shall not be transferred to the
Issuer and will be retained by the Servicer and remitted by the Servicer to such
Seller on the next succeeding Payment Date except to the extent that a payment
less than the applicable Minimum Monthly Payment has been received by the Issuer
for such month in respect of the Mortgage Loan to be removed. The Servicer shall
amend or cause to be amended the Mortgage Loan Schedule to reflect the removal
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of such Mortgage Loan and the substitution of the Eligible Substitute Loans and
the Servicer shall promptly deliver the amended Mortgage Loan Schedule to the
Owner Trustee and Indenture Trustee.
It is understood and agreed that the obligation of the Sellers to cure
such breach or purchase or substitute for such Mortgage Loan as to which such a
breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Issuer and the Indenture Trustee, as
pledgee of the Mortgage Loans, against any Seller. In connection with the
purchase of or substitution for any such Mortgage Loan by such Seller, the
Issuer shall assign to such Seller all of its right, title and interest in
respect of the Purchase Agreement applicable to such Mortgage Loan. Upon receipt
of the Repurchase Price, or upon completion of such substitution, the Servicer
shall notify the Custodian, and the Custodian shall deliver the Loan Agreements
to the Servicer, together with all relevant endorsements and assignments
prepared by the Servicer that the Indenture Trustee shall execute.
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 The Servicer.
(a) The Servicer shall service and administer the Mortgage Loans in a manner
generally consistent with the terms of the Program Guide and in a manner
consistent with the terms of this Agreement and that shall be normal and usual
in its general mortgage servicing activities and consistent with the manner in
which it services all other Mortgage Loans in its servicing portfolio with
characteristics similar to those of the Mortgage Loans. The Servicer shall have
full power and authority, acting alone or through a Subservicer, to do any and
all things in connection with such servicing and administration which it may
deem necessary or desirable, it being understood, however, that the Servicer
shall at all times remain responsible to the Issuer and the Indenture Trustee,
as pledgee of the Mortgage Loans, for the performance of its duties and
obligations hereunder in accordance with the terms hereof and the Program Guide.
Without limiting the generality of the foregoing, the Servicer shall continue,
and is hereby authorized and empowered by the Issuer and the Indenture Trustee,
as pledgee of the Mortgage Loans, to execute and deliver, on behalf of itself,
the Issuer, the Indenture Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments with respect to the Mortgage Loans and the
Mortgaged Properties. The Issuer, the Indenture Trustee and the Custodian, as
applicable, shall furnish the Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. In addition, the Servicer may, at
its own discretion and on behalf of the Indenture Trustee, obtain credit
information in the form of a "credit score" from a credit repository. On the
Closing Date, the Indenture Trustee shall deliver to the Servicer a limited
power of attorney substantially in the form of Exhibit B hereto. The Servicer is
further authorized and empowered by the Issuer and the Indenture Trustee, on
behalf of the Noteholders and the Indenture Trustee, in its own name or in the
name of the Subservicer, when the Servicer or the Subservicer, as the case may
be, believes it appropriate in its best judgment to register any Mortgage Loan
on the MERS(R) System, or cause the removal from the registration of any
Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of the
Indenture Trustee and the Noteholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such assignment or
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re-recording of a Mortgage in the name of MERS, solely as nominee for the
Indenture Trustee and its successors and assigns. The Indenture Trustee shall
have no ongoing responsibility to check the status of the Mortgage Loans on the
MERS(R) System. Any expenses incurred in connection with the actions described
in the preceding sentence shall be borne by the Servicer, with no right of
reimbursement.
Subject to Section 3.15, if the Mortgage did not have a Lien senior to
the related Mortgage Loan on the related Mortgaged Property as of the related
Cut-Off Date, then the Servicer, in such capacity, may not consent to the
placing of a Lien senior to that of the Mortgage on the related Mortgaged
Property. Subject to Section 3.15, if the Mortgage had a Lien senior to the
related Mortgage Loan on the related Mortgaged Property as of the related
Cut-Off Date, then the Servicer, in such capacity, may not consent to the
refinancing of such prior senior Lien; unless (i) the resulting CLTV of such
Mortgage Loan is no higher than the greater of the CLTV prior to such
refinancing or a 70% CLTV (or a 80% CLTV for those borrowers with a FICO "credit
score" of 720 or greater) and (ii) the interest rate for the loan evidencing the
refinanced senior Lien is no higher than the interest rate on the loan
evidencing the existing senior Lien immediately prior to the date of such
refinancing (meaning, in the case of an adjustable rate loan, a substantially
similar index and a gross margin no higher than that of the existing senior
Lien); provided, however, that if the loan evidencing the existing senior Lien
prior to the date of refinancing is an adjustable rate loan and the loan
evidencing the refinanced senior Lien is a fixed rate loan, then the interest
rate on the loan evidencing the refinanced senior Lien may be up to 2.0% higher
than the then-current mortgage rate of the loan evidencing the existing senior
Lien and (iii) the loan evidencing the refinanced senior Lien is not subject to
negative amortization.
In connection with servicing the Mortgage Loans, the Servicer may take
reasonable actions to encourage or effect the termination of Loan Agreements
that have become dormant.
The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Agreement) to the Issuer under this Agreement is intended
by the parties to be that of an independent contractor and not that of a joint
venturer, partner or agent.
(b) The Servicer may enter into Subservicing Agreements with Subservicers for
the servicing and administration of certain of the Mortgage Loans. The Servicer
shall provide notice to the Indenture Trustee upon entering into a Subservicing
Agreement. References in this Agreement to actions taken or to be taken by the
Servicer in servicing the Mortgage Loans include actions taken or to be taken by
a Subservicer on behalf of the Servicer and any amount actually received by such
Subservicer in respect of a Mortgage Loan shall be deemed to have been received
by the Servicer whether or not actually received by the Servicer. Each
Subservicing Agreement will be upon such terms and conditions as are not
inconsistent with this Agreement and as the Servicer and the Subservicer have
agreed. With the approval of the Servicer, a Subservicer may delegate its
servicing obligations to third-party servicers, but such Subservicers will
remain obligated under the related Subservicing Agreements. The Servicer and the
Subservicer may enter into amendments to the related Subservicing Agreements;
provided, however, that any such amendments shall not cause the Mortgage Loans
to be serviced in a manner that would be materially inconsistent with the
standards set forth in this Agreement. The Servicer shall be entitled to
terminate any Subservicing Agreement in accordance with the terms and conditions
thereof and without any limitation by virtue of this Agreement; provided,
however, that in the event of termination of any Subservicing Agreement by the
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Servicer or the Subservicer, the Servicer shall either act as servicer of the
related Mortgage Loan or enter into a Subservicing Agreement with a successor
Subservicer which will be bound by the terms of the related Subservicing
Agreement. The Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Servicer and nothing contained in this
Agreement shall be deemed to limit or modify such indemnification.
Notwithstanding any Subservicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Servicer or a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Servicer shall remain obligated and liable to the Indenture Trustee, the
Enhancer and the Noteholders for the servicing and administering of the Mortgage
Loans in accordance with the provisions of Section 3.01 without diminution of
such obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer or the
Depositor and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer or the
Sellers for indemnification of the Servicer and nothing contained in this
Agreement shall be deemed to limit or modify such indemnification.
In the event that the rights, duties and obligations of the Servicer are
terminated hereunder, any successor to the Servicer in its sole discretion may,
to the extent permitted by applicable law, terminate the existing Subservicing
Agreement with any Subservicer in accordance with the terms of the applicable
Subservicing Agreement or assume the terminated Servicer's rights and
obligations under such subservicing arrangements which termination or assumption
will not violate the terms of such arrangements.
As part of its servicing activities hereunder, the Servicer, for the
benefit of the Indenture Trustee, the Enhancer and the Securityholders, shall
use reasonable efforts to enforce the obligations of each Subservicer under the
related Subservicing Agreement, to the extent that the non-performance of any
such obligation would have a material adverse effect on a Mortgage Loan. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Servicer shall pay the costs of
such enforcement at its own expense, and shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement to the extent, if any,
that such recovery exceeds all amounts due in respect of the related Mortgage
Loan or (ii) from a specific recovery of costs, expenses or attorneys fees
against the party against whom such enforcement is directed.
(c) All other documents contained in the Mortgage File and any original
documents relating to the Mortgage Loans not contained in the Mortgage File or
delivered to the Custodian, if any, or the Indenture Trustee are and shall be
held by the Servicer in trust as agent for the Indenture Trustee on behalf of
the Noteholders.
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Section 3.02 Collection of Certain Mortgage Loan Payments.
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(a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this
Agreement and generally consistent with the Program Guide, follow such
collection procedures as shall be normal and usual in its general
mortgage servicing activities and consistent with the procedures the
Servicer employs in servicing all other Mortgage Loans in the servicing
portfolio with characteristics similar to those of the Mortgage Loans.
Consistent with the foregoing, and without limiting the generality of
the foregoing, the Servicer may in its discretion (i) waive any late
payment charge, penalty interest or other fees which may be collected in
the ordinary course of servicing a Mortgage Loan and (ii) arrange with a
Mortgagor a schedule for the payment of principal and interest due and
unpaid; provided, that such arrangement is consistent with the
Servicer's policies with respect to home equity mortgage loans; and
provided further, that notwithstanding such arrangement, such Mortgage
Loans will be included in the information regarding delinquent Mortgage
Loans set forth in the Servicing Certificate. The Servicer may also
extend the Due Date for payment due on a Mortgage Loan in accordance
with the Program Guide; provided, however, that the Servicer shall first
determine that any such waiver or extension will not impair the coverage
of any related insurance policy or materially adversely affect the Lien
of the related Mortgage or the interests of the Securityholders or the
Enhancer, and the Servicer shall not grant any such waiver or extension
that would have any such effect. Consistent with the terms of this
Agreement, the Servicer may also:
(i) waive, modify or vary any term of any Mortgage Loan (including reduce
the Credit Limit);
(ii) consent to the postponement of strict compliance with any such term or
in any manner grant indulgence to any Mortgagor;
(iii) arrange with a Mortgagor a schedule for the payment of principal and
interest due and unpaid;
(iv) forgive any portion of the amounts contractually owed under the Mortgage
Loan;
(v) capitalize past due amounts owed under the Mortgage Loan by adding any
amounts in arrearage to the existing principal balance of the Mortgage Loan
(a "Capitalization Workout") which will result in an increased monthly
payment amount, provided that: (A) the amount added to the existing
principal balance of the Mortgage Loan (the "Capitalized Amount") shall be
no greater than five times the Mortgagor's current Minimum Monthly Payment
amount; and (B) the Servicer shall not enter into a Capitalization Workout
unless the CLTV of the Mortgage Loan prior to the Capitalization Workout
equals or exceeds 80% and the Mortgagor has qualified for the
Capitalization Workout under the Servicer's servicing guidelines; or
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(vi) reset the maturity date for the Mortgage Loan, but in no event shall
such reset date extend beyond the end of the Collection Period preceding
the Final Payment Date;
or any combination of the foregoing, if in the Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Securityholders or the Enhancer;
provided, however, that the Servicer may not modify or permit any Subservicer to
modify any Mortgage Loan (including any modification that would change the Loan
Rate, forgive the payment of any principal or interest (unless in connection
with the liquidation of the related Mortgage Loan) or extend the final maturity
date of such Mortgage Loan) unless such Mortgage Loan is in default or, in the
judgment of the Servicer, such default is reasonably foreseeable. The general
terms of any waiver, modification, forgiveness, postponement or indulgence with
respect to any of the Mortgage Loans will be included in the Servicing
Certificate, and such Mortgage Loans will not be considered "delinquent" for the
purposes of the Basic Documents so long as the Mortgagor complies with the terms
of such waiver, modification, forgiveness, postponement or indulgence. (b) The
Servicer shall establish a Custodial Account, which shall be an Eligible
Account, titled "GMACM Home Equity Loan Trust Series 2004-HE3," in which the
Servicer shall deposit or cause to be deposited any amounts representing
payments and collections in respect of the Initial Mortgage Loans received by it
subsequent to or on the Cut-Off Date or, with respect to the Subsequent Mortgage
Loans, the Subsequent Cut-Off Date (other than in respect of the payments
referred to in the following paragraph), within two Business Days following
receipt thereof (or otherwise on or prior to the Closing Date), including the
following payments and collections received or made by it (without duplication):
(i) all payments of principal of or interest on the Mortgage Loans received
or advanced by the Servicer, net of any portion of the interest thereof
retained by any Subservicer as subservicing fees;
(ii) the aggregate Repurchase Price of the Mortgage Loans purchased by the
Servicer pursuant to Section 3.15;
(iii) Net Liquidation Proceeds, net of any related Foreclosure Profit and all
Subsequent Net Recovery Amounts;
(iv) all proceeds of any Mortgage Loans repurchased by a Seller pursuant to
the Purchase Agreement, and all Substitution Adjustment Amounts required
to be deposited in connection with the substitution of an Eligible
Substitute Loan pursuant to the Purchase Agreement;
(v) Insurance Proceeds, other than Net Liquidation Proceeds, resulting from
any insurance policy maintained on a Mortgaged Property; and
(vi) amounts required to be paid by the Servicer pursuant to Section 8.08;
provided, however, that with respect to each Collection Period, the Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans, the Servicing Fee for such Collection Period. The foregoing
requirements respecting deposits to the Custodial Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Servicer need not deposit in the Custodial Account amounts representing
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Foreclosure Profits, fees (including annual fees) or late charge penalties,
payable by Mortgagors (such amounts to be retained as additional servicing
compensation in accordance with Section 3.09 hereof), or amounts received by the
Servicer for the accounts of Mortgagors for application towards the payment of
taxes, insurance premiums, assessments and similar items. In the event any
amount not required to be deposited in the Custodial Account is so deposited,
the Servicer may at any time withdraw such amount from the Custodial Account,
any provision herein to the contrary notwithstanding. The Servicer shall retain
all Foreclosure Profits as additional servicing compensation.
The Servicer, in its sole discretion, may deposit into the Custodial
Account, Servicer Advances, representing installments of principal of or
interest on Mortgage Loans that were delinquent as of the end of any Collection
Period, provided that the Servicer reasonably believes that such amounts will be
recoverable from Collections on the related Mortgage Loan. If the Servicer makes
any such Servicer Advances, the Servicer shall be entitled to reimburse itself
by withdrawing from the Custodial Account, as provided herein, any amounts so
advanced. The Servicer may cause the institution maintaining the Custodial
Account to invest any funds in the Custodial Account in Permitted Investments
(including obligations of the Servicer or any of its Affiliates, if such
obligations otherwise qualify as Permitted Investments), which investments shall
mature not later than the Business Day preceding the next succeeding Payment
Date, and which investments shall not be sold or disposed of prior to maturity.
In addition, no such Permitted Investment shall be purchased at a price in
excess of par. Except as provided above, all income and gain realized from any
such investment shall inure to the benefit of the Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of the principal amount of any such investments shall be deposited in
the Custodial Account by the Servicer out of its own funds immediately as
realized.
(c) The Servicer shall require each Subservicer to hold all funds constituting
collections on the Mortgage Loans, pending remittance thereof to the Servicer,
in one or more accounts meeting the requirements of an Eligible Account, and
shall require all such funds to be invested in Permitted Investments, unless all
such collections are remitted on a daily basis to the Servicer for deposit into
the Custodial Account.
Section 3.03 Withdrawals from the Custodial Account. The Servicer shall, from
time to time as provided herein, make withdrawals from the Custodial Account of
amounts on deposit therein pursuant to Section 3.02 that are attributable to the
Mortgage Loans for the following purposes:
(a) on each Determination Date, the Servicer shall determine the aggregate
amounts to be withdrawn from the Custodial Account and applied pursuant to
Section 3.05(a) of the Indenture and, prior to close of business on the Business
Day prior to the related Payment Date (provided, however, that the Indenture
Trustee shall not be required to invest any amounts deposited into the Note
Payment Account after 1:00 p.m.), shall withdraw such amounts from the Custodial
Account and deposit such amounts into the Note Payment Account, Funding Account
or Reserve Sub-Account, as applicable, to be distributed by the Paying Agent in
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accordance with and in the order or priority set forth in Section 3.05(a) of the
Indenture for such Payment Date, in accordance with the Servicing Certificate;
(b) to pay to itself any monthly payments received from the Mortgagors, the
amount of such payment that represents interest accrued on the related Mortgage
Loan for any period prior to the Cut-Off Date; prior to the commencement of the
Rapid Amortization Period, from Principal Collections on the Mortgage Loans,
and, if Principal Collections are not sufficient, from Excess Spread, to pay to
GMACM the amount of any Additional Balances as and when created during the
related Collection Period, and, prior to the commencement of the Managed
Amortization Period, to pay to the related Seller the Purchase Price of any
Subsequent Mortgage Loans on the related Subsequent Transfer Date;
(c) to the extent deposited to the Custodial Account, to reimburse itself or the
related Subservicer for previously unreimbursed expenses incurred in maintaining
individual insurance policies pursuant to Section 3.04, or Liquidation Expenses,
paid pursuant to Section 3.07 or otherwise reimbursable pursuant to the terms of
this Agreement (to the extent not payable pursuant to Section 3.09), such
withdrawal right being limited to amounts received on particular Mortgage Loans
(other than any Repurchase Price in respect thereof) that represent late
recoveries of the payments for which such advances were made, or from related
Net Liquidation Proceeds or the proceeds of the purchase of such Mortgage Loan;
(d) to pay to itself out of each payment received on account of interest on a
Mortgage Loan as contemplated by Section 3.09, an amount equal to the related
Servicing Fee and the Recovery Fee (to the extent not retained pursuant to
Section 3.02 or 3.07), and to pay to any Subservicer any subservicing fees not
previously withheld by such Subservicer;
(e) to the extent deposited in the Custodial Account, to pay to itself as
additional servicing compensation any (i) interest or investment income earned
on funds deposited in the Custodial Account that it is entitled to withdraw
pursuant to Sections 3.02(b) and 5.01, and (ii) Foreclosure Profits (to the
extent permitted by law);
(f) to pay to itself or a Seller, with respect to any Mortgage Loan or property
acquired in respect thereof that has been purchased or otherwise transferred to
such Seller, the Servicer or other entity, all amounts received thereon and not
required to be distributed to Securityholders as of the date on which the
related Purchase Price or Repurchase Price is determined;
(g) to withdraw any other amount deposited in the Custodial Account that was not
required to be deposited therein pursuant to Section 3.02;
(h) to pay to itself, with respect to any Mortgage Loan for which it has made a
Servicer Advance of delinquent principal or interest, any previously
unreimbursed Servicer Advances of such amounts theretofore made to the extent of
receipts of late recoveries of such payments from the related Mortgagors, out of
related Net Liquidation Proceeds or the proceeds of the purchase of such
Mortgage Loans;
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(i) to reimburse itself for the amount of any investment earnings advanced prior
to maturity pursuant to Section 5.01, to the extent not reimbursed from earnings
received on the related investment at maturity;
(j) at its option, for so long as it is the sole Certificateholder, to pay to
itself from amounts otherwise required to be remitted to the Distribution
Account in accordance with Section 3.05(a)(xv) of the Indenture, all amounts
payable to it as a Certificateholder on the related Payment Date, and
(k) to reimburse itself for Servicer Advances of delinquent principal or
interest on a Mortgage Loan or other advances that are made pursuant to this
Agreement that are not reimbursed pursuant to clauses (c) or (h) of this Section
3.03.
Since, in connection with withdrawals pursuant to clauses (c), (d), (e),
(f) and (h), the Servicer's entitlement thereto is limited to collections or
other recoveries on the related Mortgage Loan, the Servicer shall keep and
maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the
purpose of justifying any withdrawal from the Custodial Account pursuant to such
clauses. Notwithstanding any other provision of this Agreement, the Servicer
shall be entitled to reimburse itself for any previously unreimbursed expenses
incurred pursuant to Section 3.07 or otherwise reimbursable pursuant to the
terms of this Agreement that the Servicer determines to be otherwise
nonrecoverable (except with respect to any Mortgage Loan as to which the
Repurchase Price has been paid), by withdrawal from the Custodial Account of
amounts on deposit therein attributable to the Mortgage Loans on any Business
Day prior to the Payment Date succeeding the date of such determination.
Section 3.04 Maintenance of Hazard Insurance; Property Protection Expenses. To
the extent permitted under the related Loan Agreement and Mortgage, and to the
extent the Servicer receives notice that a hazard insurance policy has been
cancelled, the Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance naming the Servicer or related Subservicer as loss payee
thereunder providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time or (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time
to time; provided, however, that such coverage may not be less than the minimum
amount required to fully compensate for any loss or damage on a replacement cost
basis. The Servicer shall use its best efforts to monitor that hazard insurance
is maintained as described in the previous sentence in the same manner as it
would for mortgage loans in its own portfolio. The Servicer shall also cause to
be maintained on property acquired upon foreclosure, or deed in lieu of
foreclosure, of any Mortgage Loan, fire insurance with extended coverage in an
amount which is at least equal to the amount necessary to avoid the application
of any co-insurance clause contained in the related hazard insurance policy.
Amounts collected by the Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the related Mortgaged Property or
property thus acquired or amounts released to the Mortgagor in accordance with
the Servicer's normal servicing procedures) shall be deposited in the Custodial
Account to the extent called for by Section 3.02. In cases in which any
Mortgaged Property is located at any time during the life of a Mortgage Loan in
a federally designated flood area, to the extent permitted under the related
Loan Agreement and Mortgage, and to the extent the Servicer receives notice that
the related flood insurance has been cancelled, the hazard insurance to be
maintained for the related Mortgage Loan shall include flood insurance (to the
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extent available). All such flood insurance shall be in amounts equal to the
lesser of (i) the amount required to compensate for any loss or damage to the
related Mortgaged Property on a replacement cost basis and (ii) the maximum
amount of such insurance available for such Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program). The Servicer shall use
its best efforts to monitor such flood insurance as described in the previous
sentence in the same manner as it would for mortgage loans in its own portfolio.
The Servicer shall be under no obligation to require that any Mortgagor maintain
earthquake or other additional insurance and shall be under no obligation itself
to maintain any such additional insurance on property acquired in respect of a
Mortgage Loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Servicer shall obtain and maintain a blanket policy consistent with its
general mortgage servicing activities insuring against hazard losses on all of
the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.04, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property a policy complying with the first sentence of
this Section 3.04 and there shall have been a loss which would have been covered
by such policy, deposit in the Custodial Account the amount not otherwise
payable under the blanket policy because of such deductible clause. Any such
deposit by the Servicer shall be made on the last Business Day of the Collection
Period in the month in which payments under any such policy would have been
deposited in the Custodial Account. In connection with its activities as
servicer of the Mortgage Loans, the Servicer agrees to present, on behalf of
itself, the Issuer and the Indenture Trustee, claims under any such blanket
policy. Section 3.05 Modification Agreements. The Servicer or the related
Subservicer, as the case may be, shall be entitled to (a) execute assumption
agreements, substitution agreements, and instruments of satisfaction or
cancellation or of partial or full release or discharge, or any other document
contemplated by this Agreement and other comparable instruments with respect to
the Mortgage Loans and with respect to the related Mortgaged Properties (and the
Issuer and the Indenture Trustee each shall promptly execute any such documents
on request of the Servicer) and (b) approve the granting of an easement thereon
in favor of another Person, any alteration or demolition of such Mortgaged
Properties or other similar matters, if it has determined, exercising its good
faith business judgment in the same manner as it would if it were the owner of
the related Mortgage Loans, that the security for, and the timely and full
collectability of, such Mortgage Loans would not be adversely affected thereby.
A partial release pursuant to this Section 3.05 shall be permitted only if the
CLTV for the related Mortgage Loan after such partial release does not exceed
the CLTV for such Mortgage Loan as of the related Cut-Off Date. Any fee
collected by the Servicer or the related Subservicer for processing such request
will be retained by the Servicer or such Subservicer as additional servicing
compensation.
Section 3.06 Trust Estate; Related Documents.
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(a) When required by the provisions of this Agreement, the Issuer or the
Indenture Trustee shall execute instruments to release property from the terms
of the Trust Agreement, Indenture or Custodial Agreement, as applicable, or
convey the Issuer's or the Indenture Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of this
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Agreement. No party relying upon an instrument executed by the Issuer or the
Indenture Trustee as provided in this Section 3.06 shall be bound to ascertain
the Issuer's or the Indenture Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any moneys.
(b) If from time to time any written assurance, assumption agreement or
substitution agreement or other similar agreement shall be executed pursuant to
Section 3.05, the Servicer shall check that each of such documents purports to
be an original executed copy (or a copy of the original executed document if the
original executed copy has been submitted for recording and has not yet been
returned) and, if so, shall file such documents, and upon receipt of the
original executed copy from the applicable recording office or receipt of a copy
thereof certified by the applicable recording office shall file such originals
or certified copies, with the Related Documents held by the Servicer.
(c) Upon receipt of a Request for Release from the Servicer, substantially in
the form of Exhibit C hereto, to the effect that a Mortgage Loan has been the
subject of a final payment or a prepayment in full and such Mortgage Loan has
been terminated or that substantially all Net Liquidation Proceeds that have
been determined by the Servicer in its reasonable judgment to be finally
recoverable have been recovered, and upon deposit to the Custodial Account of
such final monthly payment, prepayment in full together with accrued and unpaid
interest to the date of such payment with respect to such Mortgage Loan or, if
applicable, Net Liquidation Proceeds, the Custodian shall promptly release the
Related Documents held by the Custodian to the Servicer. The Indenture Trustee
shall execute such Related Documents, along with such documents as the Servicer
or the related Mortgagor may request to evidence satisfaction and discharge of
such Mortgage Loan, upon request of the Servicer. If from time to time and as
appropriate for the servicing or foreclosure of any Mortgage Loan, the Servicer
requests the Custodian to release the Related Documents held by the Custodian
and delivers to the Custodian a trust receipt reasonably satisfactory to the
Custodian and signed by a Responsible Officer of the Servicer, the Custodian
shall release such Related Documents to the Servicer. If such Mortgage Loans
shall be liquidated and the Custodian receives a certificate from the Servicer
as provided above, then, upon request of the Servicer, the Custodian shall
release the trust receipt to the Servicer.
Section 3.07 Realization Upon Defaulted Mortgage Loans. With respect to any
Mortgage Loan that comes into and continues in default, the Servicer shall
decide whether to (i) foreclose upon the related Mortgaged Property, (ii) write
off the unpaid Principal Balance thereof as bad debt, (iii) take a deed in lieu
of foreclosure, (iv) accept a short sale (a payoff of the Mortgage Loan for an
amount less than the total amount contractually owed in order to facilitate a
sale of the Mortgaged Property by the Mortgagor), (v) permit a short refinancing
(a payoff of the Mortgage Loan for an amount less than the total amount
contractually owed in order to facilitate refinancing transactions by the
Mortgagor not involving a sale of the Mortgaged Property), (vi) arrange for a
repayment plan, (vii) agree to a modification in accordance with this Agreement
or (viii) take an unsecured note in each case subject to the rights of any
related first Lien holder; provided, that in connection with the foregoing, if
the Servicer has actual knowledge that any Mortgaged Property is affected by
hazardous or toxic wastes or substances and that the acquisition of such
Mortgaged Property would not be commercially reasonable, then the Servicer shall
not cause the Issuer or the Indenture Trustee to acquire title to such Mortgaged
Property in a foreclosure or similar proceeding. In connection with such
decision, the Servicer shall follow such practices (including, in the case of
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any default on a related senior mortgage loan, the advancing of funds to correct
such default if deemed to be appropriate by the Servicer) and procedures as it
shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities and as shall be required or permitted by
the Program Guide; provided, that the Servicer shall not be liable in any
respect hereunder if the Servicer is acting in connection with any such
foreclosure or attempted foreclosure which is not completed or other conversion
in a manner that is consistent with the provisions of this Agreement. The
foregoing is subject to the proviso that the Servicer shall not be required to
expend its own funds in connection with any foreclosure or attempted foreclosure
which is not completed or towards the correction of any default on a related
senior mortgage loan or restoration of any property unless it shall determine
that such expenditure will increase the related Net Liquidation Proceeds. In the
event of a determination by the Servicer that any such expenditure previously
made pursuant to this Section 3.07 will not be reimbursable from Net Liquidation
Proceeds, the Servicer shall be entitled to reimbursement of its funds so
expended pursuant to Section 3.03.
Notwithstanding any provision of this Agreement, a Mortgage Loan may be
deemed to be finally liquidated if substantially all amounts expected by the
Servicer to be received in connection therewith have been received; provided,
however, that the Servicer may continue to pursue recovery of such Mortgage Loan
and any Recovery Amount with respect to any such Mortgage Loan shall be
deposited into the Custodial Account. If the Servicer continues to pursue
recovery, the Servicer shall be entitled to the Recovery Fee with respect to
that Mortgage Loan and to be reimbursed for any Servicer Advances and expenses
as though such Mortgage Loan continued to be an Outstanding Mortgage Loan
hereunder. For purposes of determining the amount of any Net Liquidation
Proceeds, Insurance Proceeds or other unscheduled collections, the Servicer may
take into account minimal amounts of additional receipts expected to be received
or any estimated additional liquidation expenses expected to be incurred in
connection with such Mortgage Loan.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, which shall hold the same on behalf of
the Issuer in accordance with Section 3.13 of the Indenture. Notwithstanding any
such acquisition of title and cancellation of the related Mortgage Loan, such
Mortgaged Property shall (except as otherwise expressly provided herein) be
considered to be an outstanding Mortgage Loan held as an asset of the Issuer
until such time as such property shall be sold. Consistent with the foregoing
for purposes of all calculations hereunder, so long as the related Mortgage Loan
shall be considered to be an outstanding Mortgage Loan, it shall be assumed
that, notwithstanding that the indebtedness evidenced by the related Loan
Agreement shall have been discharged, such Loan Agreement in effect at the time
of any such acquisition of title before any adjustment thereto by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver or grace
period will remain in effect.
Any proceeds from foreclosure proceedings or the purchase or repurchase
of any Mortgage Loan pursuant to the terms of this Agreement, as well as any
recovery resulting from a collection of Net Liquidation Proceeds or Insurance
Proceeds, shall be applied in the following order of priority: first, to
reimburse the Servicer or the related Subservicer in accordance with this
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Section 3.07; second, to pay the Servicer or the related Subservicer all
Servicing Fees payable therefrom; third, to pay accrued and unpaid interest on
such Mortgage Loan, at the Net Loan Rate to the Payment Date on which such
amounts are to be deposited in the Note Payment Account or Distribution Account;
and fourth, as a recovery of principal on such Mortgage Loan. Any remaining
amount shall constitute Foreclosure Profits.
Section 3.08 Issuer and Indenture Trustee to Cooperate. On or before each
Payment Date, the Servicer will notify the Indenture Trustee or the Custodian,
with a copy to the Issuer, of the termination of or the payment in full and the
termination of any Mortgage Loan during the preceding Collection Period. Upon
receipt of payment in full, the Servicer is authorized to execute, pursuant to
the authorization contained in Section 3.01, an instrument of satisfaction
regarding the related Mortgage, which instrument of satisfaction shall be
recorded by the Servicer if required by applicable law and be delivered to the
Person entitled thereto and to cause the removal from the registration on the
MERS(R) System of such Mortgage. It is understood and agreed that any expenses
incurred in connection with such instrument of satisfaction or transfer shall be
reimbursed from amounts deposited in the Custodial Account. From time to time
and as appropriate for the servicing or foreclosure of any Mortgage Loan, the
Custodian shall, upon request of the Servicer and delivery to the Custodian,
with a copy to the Issuer, of a Request for Release, in the form attached hereto
as Exhibit C, signed by a Servicing Officer, release or cause to be released the
related Loan Agreement to the Servicer. The Issuer or Indenture Trustee shall
promptly execute such documents, in the forms provided by the Servicer, as shall
be necessary for the prosecution of any such proceedings or the taking of other
servicing actions. Such trust receipt shall obligate the Servicer to return such
Loan Agreement to the Custodian (as specified in such receipt) when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that specified above, such trust receipt shall be released to the
Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the related Assignment
of Mortgage in accordance with the provisions of the Purchase Agreement, the
Indenture Trustee or the Issuer shall, if so requested in writing by the
Servicer, promptly execute an appropriate assignment in the form provided by the
Servicer to assign such Mortgage Loan for the purpose of collection to the
Servicer (any such assignment shall unambiguously indicate that the assignment
is for the purpose of collection only), and, upon such assignment, such assignee
for collection will thereupon bring all required actions in its own name and
otherwise enforce the terms of such Mortgage Loan and deposit or credit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto into the Custodial Account. In the event that all delinquent payments
due under any such Mortgage Loan are paid by the Mortgagor and any other
defaults are cured, then the assignee for collection shall promptly reassign
such Mortgage Loan to the Indenture Trustee and return all Related Documents to
the place where the related Mortgage File was being maintained.
In connection with the Issuer's obligation to cooperate as provided in
this Section 3.08 and all other provisions of this Agreement requiring the
Issuer to authorize or permit any actions to be taken with respect to the
Mortgage Loans, the Indenture Trustee, as pledgee of the Mortgage Loans and as
assignee of record of the Mortgage Loans on behalf of the Issuer pursuant to
Section 3.13 of the Indenture, expressly agrees, on behalf of the Issuer, to
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take all such actions on behalf of the Issuer and to promptly execute and return
all instruments reasonably required by the Servicer in connection therewith;
provided, that if the Servicer requests a signature of the Indenture Trustee, on
behalf of the Issuer, then the Servicer shall deliver to the Indenture Trustee
an Officer's Certificate stating that such signature is necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
under this Agreement.
Section 3.09 Servicing Compensation; Payment of Certain Expenses by Servicer.
The Servicer shall be entitled to receive the Servicing Fee in accordance with
Section 3.03 as compensation for its services in connection with servicing the
Mortgage Loans. Moreover, late payment charges and other receipts not required
to be deposited in the Custodial Account as specified in Section 3.02 shall be
retained by the Servicer as additional servicing compensation. The Servicer
shall be required to pay all expenses incurred by it in connection with its
activities hereunder (including payment of all other fees and expenses not
expressly stated hereunder to be for the account of the Securityholders),
including the fees and expenses of the Owner Trustee, Indenture Trustee and the
Custodian, and shall not be entitled to reimbursement therefor.
Section 3.10 Annual Statement as to Compliance.
---------------------------------
(a) The Servicer shall deliver to the Issuer, the Indenture Trustee and the
Depositor, with a copy to the Enhancer, beginning March 31, 2005, and on or
before March 31 of each year thereafter, an Officer's Certificate stating that
(i) a review of the activities of the Servicer during the preceding calendar
year and of its performance under any servicing agreements to which it is a
party, including this Agreement, has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has complied in all material respects with the minimum servicing
standards set forth in the Uniform Single Attestation Program for Mortgage
Bankers and has fulfilled all of its material obligations in all material
respects throughout such year, or, if there has been material noncompliance with
such servicing standards or a default in the fulfillment in all material
respects of any such obligation relating to this Servicing Agreement, such
statement shall include a description of such noncompliance or specify each such
default, as the case may be, known to such officer and the nature and status
thereof.
(b) The Servicer shall deliver to the Issuer and the Indenture Trustee, with a
copy to the Enhancer, promptly after having obtained knowledge thereof, but in
no event later than five Business Days thereafter, written notice by means of an
Officer's Certificate of any event which with the giving of notice or the lapse
of time or both, would become a Servicing Default.
Section 3.11 Annual Servicing Report. Beginning March 31, 2005, and on or before
March 31 of each year thereafter, the Servicer at its expense shall cause a firm
of nationally recognized independent public accountants (which firm may also
render other services to the Servicer) to furnish a report to the Issuer, the
Indenture Trustee, the Depositor, the Enhancer and each Rating Agency stating
its opinion that, on the basis of an examination conducted by such firm
substantially in accordance with standards established by the American Institute
of Certified Public Accountants, the assertions made pursuant to Section 3.10
regarding compliance with the minimum servicing standards set forth in the
Uniform Single Attestation Program for Mortgage Bankers during the preceding
calendar year are fairly stated in all material respects, subject to such
exceptions and other qualifications that, in the opinion of such firm, such
17
accounting standards require it to report. In rendering such statement, such
firm may rely, as to matters relating to the direct servicing of Mortgage Loans
by Subservicers, upon comparable statements for examinations conducted by
independent public accountants substantially in accordance with standards
established by the American Institute of Certified Public Accountants (rendered
within one year of such statement) with respect to such Subservicers.
Section 3.12 Access to Certain Documentation and Information Regarding the
Mortgage Loans. Whenever required by statute or regulation, the Servicer shall
provide to the Enhancer, any Securityholder upon reasonable request (or a
regulator for a Securityholder) or the Indenture Trustee, reasonable access to
the documentation regarding the Mortgage Loans. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the Servicer. Nothing in this Section 3.12 shall
derogate from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding Mortgagors, and the failure of
the Servicer to provide access as provided in this Section 3.12 as a result of
such obligation shall not constitute a breach of this Section 3.12.
Section 3.13 Maintenance of Certain Servicing Insurance Policies. The Servicer
shall, during the term of its service as servicer, maintain in force and effect
(i) a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Servicer hereunder and (ii) a fidelity bond in
respect of its officers, employees or agents. Each such policy or policies and
fidelity bond shall be at least equal to the coverage that would be required by
Xxxxxx Xxx or Xxxxxxx Mac, whichever is greater, for Persons performing
servicing for mortgage loans purchased by such entity.
Section 3.14 Information Required by the Internal Revenue Service and Reports of
Foreclosures and Abandonments of Mortgaged Property. The Servicer shall prepare
and deliver all federal and state information reports with respect to the
Mortgage Loans when and as required by all applicable state and federal income
tax laws. In particular, with respect to the requirement under Section 6050J of
the Code to the effect that the Servicer or Subservicer shall make reports of
foreclosures and abandonments of any mortgaged property for each year beginning
in 2004, the Servicer or Subservicer shall file reports relating to each
instance occurring during the previous calendar year in which the Servicer (a)
on behalf of the Issuer, acquired an interest in any Mortgaged Property through
foreclosure or other comparable conversion in full or partial satisfaction of a
Mortgage Loan, or (b) knew or had reason to know that any Mortgaged Property had
been abandoned. The reports from the Servicer or Subservicer shall be in form
and substance sufficient to meet the reporting requirements imposed by Section
6050J and Section 6050H (reports relating to mortgage interest received) of the
Code.
Section 3.15 Optional Repurchase or Transfer of Mortgage Loans.
-------------------------------------------------
(a) Notwithstanding any provision in Section 3.07 to the contrary, the
Servicer, at its option and in its sole discretion, may repurchase any
Mortgage Loan that is delinquent in payment by a period of ninety (90)
days or longer for a price equal to the Repurchase Price, provided that
any such repurchase shall occur only during the 60-day period commencing
on the first day of the next calendar month.
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(b) The Servicer, at its option and in its sole discretion, may repurchase
any Mortgage Loan for a price equal to the Repurchase Price (i) if the
related Mortgage did not have a Lien senior to it as of the related
Cut-Off Date, and, at the request of the related Mortgagor, the Servicer
agrees to the placement of a Lien on the related Mortgaged Property
senior to that of such Mortgage or (ii) at the request of the Mortgagor,
the Servicer agrees to an increase in the Credit Limit above the Credit
Limit of such Mortgage Loan as of the related Cut-Off Date or (iii) at
the request of the Mortgagor, the Servicer agrees to the refinancing of
the Lien senior to that of the related Mortgage resulting in a CLTV that
does not satisfy the conditions set forth in Section 3.01(a) herein.
(c) Subject to the conditions set forth below, the Servicer, upon receipt of
written notice and direction from the Issuer, shall cause the retransfer
of Mortgage Loans from the Trust Estate to the Issuer as of the close of
business on a Payment Date (the "Transfer Date"). On the fifth Business
Day (the "Transfer Notice Date") prior to the Transfer Date designated
in such notice, the Servicer shall give the Indenture Trustee, the
Rating Agencies and the Enhancer a notice of the proposed retransfer
that contains a list of the Mortgage Loans to be retransferred. Such
retransfers of Mortgage Loans shall be permitted upon satisfaction of
the following conditions:
(i) No Rapid Amortization Event has occurred;
(ii) On the Transfer Date, the Overcollateralization Amount (after giving
effect to the removal from the Trust Estate of the Mortgage Loans
proposed to be retransferred) will equal or exceed the
Overcollateralization Target Amount;
(iii) The retransfer of any Mortgage Loans on any Transfer Date during the
Managed Amortization Period shall not, in the reasonable belief of the
Servicer, cause a Rapid Amortization Event to occur or an event which
with notice or lapse of time or both would constitute a Rapid
Amortization Event;
(iv) On or before the Transfer Date, the Servicer shall have delivered to the
Indenture Trustee a revised Mortgage Loan Schedule showing that the
Mortgages Loans transferred to the Certificateholders are no longer
owned by the Trust Estate;
(v) The Servicer shall represent and warrant that the Mortgage Loans to be
removed from the Trust Estate were selected at random and the Servicer
shall have received the consent of the Enhancer as to the selection of
the particular Mortgage Loans to be removed; and
(vi) The Servicer shall have delivered to the Indenture Trustee and the
Enhancer an officer's certificate certifying that the items set forth in
subparagraphs (i) through (v), inclusive, have been performed or are
true and correct, as the case may be. The Indenture Trustee may
conclusively rely on such officer's certificate, shall have no duty to
make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying.
The Servicer shall not be permitted to effect the retransfer of any
Mortgage Loan except under the conditions specified above. Upon receiving the
requisite notice and direction from the Issuer, the Servicer shall perform in a
timely manner those acts required of it, as specified above. Upon satisfaction
of the above conditions, on the Transfer Date the Indenture Trustee shall
deliver, or cause to be delivered, to the Issuer a written itemization of each
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Mortgage Loan being transferred, together with the Mortgage File for each such
Mortgage Loan, and the Indenture Trustee shall execute and deliver to the Issuer
or its designee such other documents prepared by the Servicer as shall be
reasonably necessary to transfer such Mortgage Loans to the Certificateholders.
Any such transfer of the Trust Estate's right, title and interest in and to
Mortgage Loans shall be without recourse, representation or warranty by or of
the Indenture Trustee or the Trust Estate to the Issuer or its designee.
Section 3.16 Funding Account.
(a) No later than the Closing Date, the Indenture Trustee shall establish
and maintain on behalf of itself one or more segregated trust accounts,
which shall be Eligible Accounts, titled "Funding Account, Xxxxx Fargo
Bank, N.A., as Indenture Trustee for GMACM Home Equity Loan Trust
2004-HE3" (the "Funding Account"). The Indenture Trustee shall establish
within the Funding Account a sub-account, titled "Reserve Sub-Account,"
as set forth in Section 3.17 of this Agreement. On each Payment Date
during the Revolving Period, the Servicer shall withdraw from the
Custodial Account and deposit into the Funding Account (but not the
Reserve Sub-Account) the aggregate amount of Principal Collections
remaining after the purchase of all Additional Balances or Subsequent
Mortgage Loans on or prior to such Payment Date.
(b) The Servicer may cause the institution maintaining the Funding Account
to invest any funds therein in Permitted Investments having a maturity
of up to 90 days or maturing or otherwise available not later than the
Business Day preceding the related Payment Date on which funds are
scheduled to be withdrawn to purchase Subsequent Mortgage Loans;
provided, that any investment in an obligation of the institution with
which the Funding Account is maintained may mature on or before 10:30
a.m., New York time, on such Payment Date; and provided further, that no
such investment may be sold or disposed of prior to maturity. In
addition, no such Permitted Investment shall be purchased at a price in
excess of par. At any time when the Indenture Trustee is maintaining the
Funding Account, any request by the Servicer to invest funds on deposit
therein shall be in writing, delivered to the Indenture Trustee at or
before 10:30 a.m., New York time, if such investment is to be made on
such day. The Servicer shall certify that the requested investment is a
Permitted Investment maturing at or prior to the time required hereby.
Any such investment shall be registered in the name of the Indenture
Trustee or its nominee, and to the extent that any such investment is
certificated, such investment shall be maintained with the Indenture
Trustee at its Corporate Trust Office. All net income or other gain
received from any such investment shall be deposited into or credited to
the Note Payment Account.
(c) From time to time withdrawals shall be made from the Funding Account by
the Servicer as follows:
(i) on each Payment Date during the Revolving Period, any amounts on deposit
in the Funding Account, including Excess Spread, shall be withdrawn and
applied, to the extent available, in the following order:
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(A) to GMACM, as payment for Additional Balances, if any, in an amount equal
to (1) the aggregate of all Draws during the related Collection Period
or (2) if the Servicer has applied amounts on deposit in the Custodial
Account representing Principal Collections received during such
Collection Period to the purchase of Additional Balances, the excess, if
any, of the aggregate of all Draws during the related Collection Period
over Principal Collections for such Collection Period; and
(B) to each Seller, as payment for Subsequent Mortgage Loans, if any, in an
amount equal to (1) the aggregate Principal Balance of all such Subsequent
Mortgage Loans purchased from such Seller during the related Collection
Period or (2) if the Servicer has applied amounts on deposit in the
Custodial Account representing Principal Collections for such Collection
Period toward the purchase of Subsequent Mortgage Loans, the excess, if
any, of the aggregate Principal Balance of all such Subsequent Mortgage
Loans purchased from such Seller over such Principal Collections;
(ii) on the last Payment Date during the Revolving Period, any amounts
remaining on deposit in the Funding Account, if any, after giving effect
to clause (i) above, shall be deposited into the Note Payment Account
for payment to the Noteholders pursuant to Section 3.05 of the
Indenture.
Section 3.17 Reserve Sub-Account.
(a) On or after the Closing Date, the Indenture Trustee shall establish and
maintain a sub-account within the Funding Account (the "Reserve Sub-Account").
On each Business Day following each Determination Date, the Servicer, in
accordance with the requirements of Sections 3.05(a), 3.05(b) and 3.05(c) of the
Indenture, shall determine the amount, if any, to be withdrawn from the
Custodial Account and deposited into the Reserve Sub-Account. From time to time
withdrawals shall be made from the Reserve Sub-Account by the Indenture Trustee
in the amounts and for the purposes set forth in Sections 3.05(a), 3.05(b) and
3.05(c) of the Indenture. In addition, if a Funding Event has occurred during
the Managed Amortization Period, any amount in the Reserve Sub-Account may be
applied to purchase Subsequent Mortgage Loans in the manner set forth in the
Purchase Agreement. Funds on deposit in the Reserve Sub-Account may be invested
in Permitted Investments in accordance with Section 3.16(b) hereof.
Section 3.18 Pre-Funding Account.
(a) No later than the Closing Date, the Indenture Trustee shall
establish and maintain on behalf of itself one or more segregated trust
accounts, which shall be Eligible Accounts, titled "Pre-Funding Account, Xxxxx
Fargo Bank, N.A., as Indenture Trustee for GMACM Home Equity Loan Trust
2004-HE3" (the "Pre-Funding Account"). On the Closing Date, GMACM shall deposit
into the Pre-Funding Account an amount equal to the Original Pre-Funded Amount
from the proceeds of the sale of the Securities. On each Subsequent Transfer
Date, the Servicer shall instruct the Indenture Trustee in writing to withdraw
from the Pre-Funding Account an amount equal to the aggregate Principal Balance
as of the related Subsequent Cut-Off Date of the Subsequent Mortgage Loans to be
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sold to the Trust on such Subsequent Transfer Date and purchased with funds on
deposit in the Pre-Funding Account, and to pay such amount to or upon the order
of GMACM upon satisfaction of the conditions set forth in this Agreement, in the
Purchase Agreement and in the related Subsequent Transfer Agreement with respect
thereto.
(b) If the Pre-Funded Amount has not been reduced to zero at the close
of business on the last day of the Pre-Funding Period, after giving effect to
any withdrawal therefrom on such day, any remaining Pre-Funded Amount shall be
deposited in the Note Payment Account and applied as a principal distribution on
the Notes on the next succeeding Payment Date in accordance with the terms of
the Indenture.
(c) The Servicer may cause the institution maintaining the Pre-Funding
Account to invest any funds therein in Permitted Investments having a maturity
of up to 90 days or maturing or otherwise available not later than the Business
Day preceding the related Payment Date on which funds are scheduled to be
withdrawn to purchase Subsequent Mortgage Loans; provided, that any investment
in an obligation of the institution with which the Pre-Funding Account is
maintained may mature on or before 10:30 a.m., New York time, on such Payment
Date; and provided further, that no such investment may be sold or disposed of
prior to maturity. In addition, no such Permitted Investment shall be purchased
at a price in excess of par. Notwithstanding the foregoing, in the event
investment earnings have not matured on any Payment Date, the amount of such
earnings accrued as of such Payment Date shall be advanced by the Servicer for
deposit into the Note Payment Account (which advance shall be reimbursed to the
Servicer from such investment earnings at maturity). At any time when the
Indenture Trustee is maintaining the Pre-Funding Account, any request by the
Servicer to invest funds on deposit therein shall be in writing, delivered to
the Indenture Trustee at or before 10:30 a.m., New York time, if such investment
is to be made on such day. The Servicer shall certify that the requested
investment is a Permitted Investment maturing at or prior to the time required
hereby. Any such investment shall be registered in the name of the Indenture
Trustee or its nominee, and to the extent that any such investment is
certificated, such investment shall be maintained with the Indenture Trustee at
its Corporate Trust Office. All net income or other gain received from any such
investment shall be deposited into or credited to the Note Payment Account, and
may be withdrawn therefrom in accordance with Section 3.05 of the Indenture. In
no event shall the Indenture Trustee be liable for any investment losses on
Permitted Investments held in or credited to the Pre-Funding Account, provided
that such investments are made in accordance with the provisions of this
Agreement and the Indenture Trustee is not the obligor under the Permitted
Investment.
Section 3.19 Capitalized Interest Account.
(a) No later than the Closing Date, the Indenture Trustee shall
establish and maintain on behalf of itself one or more segregated trust
accounts, which shall be Eligible Accounts, titled "Capitalized Interest
Account, Xxxxx Fargo Bank, N.A., as Indenture Trustee for GMACM Home Equity Loan
Trust 2004-HE3" (the "Capitalized Interest Account"). The Indenture Trustee
shall, promptly upon receipt, deposit in the Capitalized Interest Account and
retain therein the Interest Coverage Amount. If the Indenture Trustee shall not
have received an investment direction from GMACM, the Indenture Trustee shall
invest funds on deposit in the Capitalized Interest Account in Permitted
Investments of the kind described in clause (v) of the definition of Permitted
Investments having a maturity date no later than the next succeeding Payment
Date. In addition, no such Permitted Investment shall be purchased at a price in
excess of par. The Servicer shall be entitled to retain any investment earnings
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on amounts on deposit in the Capitalized Interest Account and shall deposit into
the Capitalized Interest Account the amount of any net loss incurred in respect
of any such Permitted Investment immediately upon realization of such loss
without any right of reimbursement therefor. The Servicer shall be the owner of
the Capitalized Interest Account and shall report all items of income,
deduction, gain or loss arising therefrom.
(b) On each Payment Date during the Pre-Funding Period and on the
Payment Date immediately after the end of the Pre-Funding Period, the Indenture
Trustee, at the written direction of the Servicer, shall withdraw from the
Capitalized Interest Account and deposit into the Note Payment Account an amount
equal to the Capitalized Interest Requirement for such Payment Date.
(c) In connection with each Subsequent Transfer Date occurring in the
Pre-Funding Period, the Servicer, at its option, may recalculate the Interest
Coverage Amount taking into account the amount remaining in the Pre-Funding
Account following the sale of Subsequent Mortgage Loans to the Trust on such
date. The recomputed Interest Coverage Amount shall be not less than the amount
necessary to cover the Capitalized Interest Requirement for each remaining
Payment Date in the Pre-Funding Period. On any such Subsequent Transfer Date,
GMACM shall instruct in writing the Indenture Trustee to pay to it from funds in
the Capitalized Interest Account the excess of the amount on deposit therein
over the recomputed Interest Coverage Amount.
(d) Upon the earlier of (i) termination of the Trust Agreement in
accordance with Section 8.01 thereof and (ii) the Payment Date following the end
of the Pre-Funding Period, any amount remaining on deposit in the Capitalized
Interest Account shall be withdrawn by the Indenture Trustee and paid to GMACM.
Section 3.20 Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Servicer
or Subservicer, to the extent it has knowledge of such conveyance, shall
enforce any due-on-sale clause contained in any Loan Agreement or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not
adversely affect or jeopardize coverage under any Required Insurance
Policy. Notwithstanding the foregoing:
(i) the Servicer shall not be deemed to be in default under this Section
3.20(a) by reason of any transfer or assumption which the Servicer is
restricted by law from preventing; and
(ii) if the Servicer determines that it is reasonably likely that any
Mortgagor will bring, or if any Mortgagor does bring, legal action to
declare invalid or otherwise avoid enforcement of a due-on-sale clause
contained in any Loan Agreement or Mortgage, the Servicer shall not be
required to enforce the due-on-sale clause or to contest such action.
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(b) Subject to the Servicer's duty to enforce any due-on-sale clause to the
extent set forth in Section 3.20(a), in any case in which a Mortgaged
Property is to be conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption or modification agreement or supplement
to the Loan Agreement or Mortgage which requires the signature of the
Indenture Trustee, or if an instrument of release signed by the
Indenture Trustee is required releasing the Mortgagor from liability on
the Mortgage Loan, the Servicer is authorized, subject to the
requirements of the sentence next following, to execute and deliver, on
behalf of the Indenture Trustee, the assumption agreement with the
Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Loan Agreement or Mortgage
or other instruments as are reasonable or necessary to carry out the
terms of the Loan Agreement or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. The Servicer shall execute and deliver such
documents only if it reasonably determines that (i) its execution and
delivery thereof will not conflict with or violate any terms of this
Agreement or cause the unpaid balance and interest on the Mortgage Loan
to be uncollectible in whole or in part, (ii) any required consents of
insurers under any Required Insurance Policies have been obtained and
(iii) subsequent to the closing of the transaction involving the
assumption or transfer (A) such transaction will not adversely affect
the coverage under any Required Insurance Policies, (B) the Mortgage
Loan will fully amortize over the remaining term thereof, (C) no
material term of the Mortgage Loan (including the interest rate on the
Mortgage Loan) will be altered nor will the term of the Mortgage Loan be
changed and (D) if the seller/transferor of the Mortgaged Property is to
be released from liability on the Mortgage Loan, such release will not
(based on the Servicer's or Subservicer's good faith determination)
adversely affect the collectability of the Mortgage Loan. Upon receipt
of appropriate instructions from the Servicer in accordance with the
foregoing, the Indenture Trustee shall execute any necessary instruments
for such assumption or substitution of liability as directed in writing
by the Servicer. Upon the closing of the transactions contemplated by
such documents, the Servicer shall cause the originals or true and
correct copies of the assumption agreement, the release (if any), or the
modification or supplement to the Loan Agreement or Mortgage to be
delivered to the Indenture Trustee or the Custodian and deposited with
the Mortgage File for such Mortgage Loan. Any fee collected by the
Servicer or such related Subservicer for entering into an assumption or
substitution of liability agreement will be retained by the Servicer or
such Subservicer as additional servicing compensation.
Section 3.21 Advance Facility.
(a) The Servicer is hereby authorized to enter into any facility (an "Advance
Facility") with any Person (any such Person, an "Advance Facility
Counterparty"), without the consent of any party to this Agreement or the
Enhancer, which provides that the Servicer may pledge or sell its rights to
receive reimbursement of any advances made by the Servicer in respect of draws
for HELOCs ("HELOC Advances") and any Servicer Advances pursuant to this
Agreement ("Advance Reimbursement Rights") pursuant to credit facilities,
repurchase facilities, or similar facilities providing liquidity for the funding
of the HELOC Advances and the Servicer Advances. Notwithstanding the existence
of any Advance Facility, the Servicer shall remain obligated pursuant to this
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Agreement to make any HELOC Advance or Servicer Advances as required by this
Agreement, and shall not be relieved of such obligations by virtue of such
Advance Facility.
(b) If the Servicer enters into an Advance Facility, and for so long as an
Advance Facility Counterparty remains entitled to receive reimbursement for any
Servicer Advances ("Advance Reimbursement Amount"), then the Servicer shall
identify such Advance Reimbursement Amount as received, consistently with the
reimbursement rights set forth in Sections 3.03 of this Agreement, and shall
remit such Advance Reimbursement Amount in accordance with the documentation
establishing the Advance Facility to such Advance Facility Counterparty or to a
trustee, agent or custodian (an "Advance Facility Trustee") designated by such
Advance Facility Counterparty. Notwithstanding the foregoing, if so required
pursuant to the terms of the Advance Facility, the Servicer may withdraw from
the Custodial Account or direct the Indenture Trustee to withdraw, as
applicable, and the Servicer shall, or if so directed, the Indenture Trustee is
hereby authorized to and shall pay to the Advance Facility Counterparty or the
Advance Facility Trustee the Advance Reimbursement Amount identified pursuant to
the preceding sentence.
(c) The Advance Reimbursement Amount shall consist solely of amounts in respect
of Servicer Advances made with respect to the Mortgage Loans for which the
Servicer would be permitted to reimburse itself in accordance with this
Agreement, assuming the Servicer had made the related Servicer Advances. Any
Advance Reimbursement Amount that the Servicer, in its capacity as Servicer, is
entitled to be paid shall not be included in distributions to Noteholders. An
Advance Facility Counterparty whose obligations are limited to the making of
Servicer Advances will not be deemed to be a Subservicer under this Agreement or
be required to meet the criteria for qualification as a Subservicer under this
Agreement.
(d) Any Advance Reimbursement Amount allocated to reimburse Servicer Advances
made with respect to any particular Mortgage Loan shall be allocated to the
reimbursement of the unreimbursed Servicer Advances made with respect to that
Mortgage Loan on a "first-in, first out" ("FIFO") basis, such that the Advance
Reimbursement Amount shall be applied to reimburse the Servicer Advance for that
Mortgage Loan that was disbursed earliest in time first, and to reimburse the
Servicer Advance for that Mortgage Loan that was disbursed latest in time, last.
The Servicer shall provide to the related Advance Facility Counterparty or
Advance Facility Trustee loan-by-loan information with respect to each Advance
Reimbursement Amount remitted to such Advance Facility Counterparty or Advance
Facility Trustee, to enable the Advance Facility Counterparty or Advance
Facility Trustee to make the FIFO allocation of each such Advance Reimbursement
Amount with respect to each Mortgage Loan. HELOC Advances shall be reimbursed as
funds are received and available to be disbursed in reimbursement for any HELOC
Advance pursuant to the Basic Documents. The Servicer shall provide to the
related Advance Facility Counterparty or Advance Facility Trustee loan-by-loan
information with respect to each HELOC Advance remitted to such Advance Facility
Counterparty or Advance Facility Trustee.
(e) Upon request of the Servicer, the Indenture Trustee agrees to execute such
acknowledgments, certificates, and other documents recognizing the interests of
any Advance Facility Counterparty in such Advance Reimbursement Rights as the
Servicer may cause to be made subject to Advance Facilities pursuant to this
Section 3.21.
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ARTICLE IV
Servicing Certificate
Section 4.01 Statements to Securityholders.
(a) With respect to each Payment Date, on the Business Day following the
related Determination Date, the Servicer shall forward the Servicing
Certificate to the Indenture Trustee and the Enhancer, and the Indenture
Trustee, pursuant to Section 3.26 of the Indenture, shall make such
Servicing Certificate available to each Certificateholder, each
Noteholder, the Depositor, the Owner Trustee, the Certificate Paying
Agent and each Rating Agency, with a copy to the Enhancer. The Servicing
Certificate shall set forth the following information as to the Notes
and Certificates, to the extent applicable:
(i) the aggregate amount of (a) Interest Collections, (b) Principal
Collections (and, with respect to any Payment Date relating to the
Managed Amortization Period, Net Principal Collections), (c)
Substitution Adjustment Amounts and (d) Excess Spread, for the related
Collection Period;
(ii) the amount of such distribution as principal to the Noteholders of each
Class of Notes;
(iii) the amount of such distribution as interest to the Noteholders of each
Class of Notes, the amount thereof, if any, payable in respect of unpaid
Interest Shortfalls, and the amount of any Interest Shortfalls and
Relief Act Shortfalls for the related Payment Date;
(iv) each Policy Payment, if any, for such Payment Date and the aggregate
amount of prior draws on the Policy thereunder not yet reimbursed;
(v) the amount of such distribution to the Certificateholders;
(vi) the amount of any Additional Balance Increase Amount payable to the
Certificateholders;
(vii) the aggregate Principal Balance of the Mortgage Loans as of the end of
the related Collection Period;
(viii) the number and aggregate Principal Balances of Mortgage Loans (a) as to
which the Minimum Monthly Payment is delinquent for 30-59 days, 60-89
days, 90-119 days, 120-149 days, 150-179 days and greater than 180 days,
respectively, (b) the related Mortgaged Property of which has been
foreclosed upon and (c) as to which the related Mortgaged Property has
become REO Property, in each case as of the end of the related
Collection Period; provided, however, that such information shall not be
provided on the statements relating to the first Payment Date;
(ix) the number and aggregate Principal Balance of Mortgage Loans repurchased
pursuant to Section 3.15(a) herein during the related Collection Period;
26
(x) the Net WAC Rate for the related Collection Period;
(xi) prior to the second Determination Date following the commencement of the
Rapid Amortization Period, the aggregate amount of Additional Balances
created during the related Collection Period and conveyed to the Issuer
prior to the commencement of such Rapid Amortization Period;
(xii) the aggregate Liquidation Loss Amounts with respect to the related
Collection Period, the amount distributed as principal to Noteholders or
paid to the Funding Account in respect of Liquidation Loss Amounts and
the aggregate of the Liquidation Loss Amounts (minus any Subsequent Net
Recovery Amounts) from all Collection Periods to date expressed as
dollar amount and as a percentage of the aggregate Cut-Off Date
Principal Balances of the Mortgage Loans;
(xiii) the aggregate Note Balance of each Class of Notes and the Certificate
Balance of each Class of the Certificates after giving effect to the
distribution of principal on such Payment Date;
(xiv) the balance of the Pre-Funding Account, Capitalized Interest Account,
Funding Account and the Reserve Sub-Account as of the end of the related
Collection Period;
(xv) the Percentage Interest applicable to each of the Securities, after
application of payments made on such Payment Date;
(xvi) the Overcollateralization Amount as of the end of the related Collection
Period and whether the Excess Spread Test is satisfied as of the end of
the related Collection Period; and
(xvii) the aggregate Principal Balance of Subsequent Mortgage Loans transferred
to the Trust Estate during the related Collection Period.
In the case of information furnished pursuant to clauses (ii) and (iii)
above, the amounts shall be expressed as an aggregate dollar amount per Note or
Certificate, as applicable, with a $25,000 denomination and per Certificate with
a denomination equal to a 100% Percentage Interest.
If a Rapid Amortization Event or a Servicing Default shall occur, on the
Business Day following the related Determination Date, the Servicer shall
forward to the Indenture Trustee and the Enhancer, a statement to such effect,
including the nature of such Rapid Amortization Event or Servicing Default. Upon
the Servicer's becoming aware of any Early Amortization Event, the Servicer
shall forward to the Indenture Trustee and the Enhancer, a statement to such
effect, including the nature of such Early Amortization Event. The Indenture
Trustee, pursuant to Section 3.26 of the Indenture, shall deliver or cause to be
delivered by mail to each Certificateholder, each Noteholder, the Enhancer, the
Depositor, the Owner Trustee, the Certificate Paying Agent and each Rating
Agency, notice of such Rapid Amortization Event, Early Amortization Event or
Servicing Default, including, the nature thereof. Such statement may be included
in, or separate from, the regular statement sent to Securityholders.
27
The Indenture Trustee will make the Servicing Certificate (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Securityholders, and other parties to this
Agreement via the Indenture Trustee's internet website. The Indenture Trustee's
internet website shall initially be located at "xxx.xxxxxxx.xxx." Assistance in
using the website can be obtained by calling the Indenture Trustee's customer
service desk at (000) 000-0000. Parties that are unable to use the above
distribution options are entitled to have a paper copy mailed to them via first
class mail by calling the customer service desk and indicating such. The
Indenture Trustee shall have the right to change the way the statements to
Securityholders are distributed in order to make such distribution more
convenient or more accessible to the above parties and the Indenture Trustee
shall provide timely and adequate notification to all above parties regarding
any such changes. The Indenture Trustee may require registration and the
acceptance of a disclaimer in connection with access to its website.
(b) The Servicer shall forward to the Indenture Trustee any other information
reasonably requested by the Indenture Trustee necessary to make distributions
pursuant to Section 3.05 of the Indenture. Prior to the close of business on the
Business Day next succeeding each Determination Date, the Servicer shall furnish
a written statement to the Certificate Paying Agent and the Indenture Trustee
setting forth the aggregate amounts required to be withdrawn from the Custodial
Account and the Reserve Sub-Account and deposited into the Note Payment Account,
Reserve Sub-Account, Funding Account or Distribution Account on the Business Day
preceding the related Payment Date pursuant to Section 3.03. The determination
by the Servicer of such amounts shall, in the absence of obvious error, be
deemed to be presumptively correct for all purposes hereunder, and the Owner
Trustee and the Indenture Trustee shall be protected in relying upon the same
without any independent check or verification. In addition, upon the Issuer's
written request, the Servicer shall promptly furnish such information reasonably
requested by the Issuer that is reasonably available to the Servicer to enable
the Issuer to perform its federal and state income tax reporting obligations.
(c) If the Note Balance of the Variable Pay Revolving Notes is to be reduced on
any Payment Date pursuant to the terms of the Indenture, the Servicer shall, not
later than 12:00 Noon (New York time) on the second Business Day prior to such
Payment Date, deliver a written notice to the Administrative Agent specifying
the amount of such reduction.
Section 4.02 Tax Returns and 1934 Act Reports
(a) The Servicer will act as the Tax Matters Partner or the agent for the Tax
Matters Partner pursuant to the Trust Agreement. The Servicer agrees to perform
the obligations of the Servicer set forth in Section 5.03 of the Trust
Agreement. The Servicer will prepare and file or cause to be prepared and filed
all tax and information returns of the Trust Estate.
(b) The Servicer shall, on behalf of the Depositor and in respect of the Trust
Fund, prepare and cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Exchange Act, and the rules and
regulations of the Commission thereunder. In connection with the preparation and
filing of such periodic reports, the Indenture Trustee shall timely provide to
the Servicer (I) a list of Noteholders as shown on the Note Register as of the
end of each calendar year, (II) copies of all pleadings, other legal process and
any other documents relating to any claims, charges or complaints involving the
Indenture Trustee, as trustee, or the Trust Estate that are received by the
Indenture Trustee, (III) notice of all matters that, to the actual knowledge of
28
a Responsible Officer of the Indenture Trustee, have been submitted to a vote of
the Noteholders or Certificateholders, other than those matters that have been
submitted to a vote of the Noteholders or Certificateholders at the request of
the Depositor or the Servicer, and (IV) notice of any failure of the Indenture
Trustee to make any distribution to the Noteholders or Certificateholders as
required pursuant to the Indenture or Trust Agreement, as applicable. Neither
the Indenture Trustee nor the Servicer shall have any liability with respect to
the Servicer's failure to properly prepare or file such periodic reports
resulting from or relating to the Servicer's inability or failure to maintain or
obtain any information not resulting from the Servicer's own negligence or
willful misconduct. Any Form 10-K filed with the Commission in connection with
this Section 4.01(b) shall include a certification, signed by the senior officer
in charge of the servicing functions of the Servicer, in the form attached as
Exhibit D-1 hereto or such other form as may be required or permitted by the
Commission (the "Form 10-K Certification"), in compliance with Rule 13a-14 and
15d-14 under the Exchange Act and any additional directives of the Commission.
In connection with the Form 10-K Certification, the Indenture Trustee shall
provide the Servicer with a back-up certification substantially in the form
attached hereto as Exhibit D-2.
ARTICLE V
Note Payment Account
Section 5.01 Note Payment Account. The Indenture Trustee shall establish and
maintain an Eligible Account entitled "Xxxxx Fargo Bank, N.A., as Indenture
Trustee, for the benefit of the Securityholders, the Certificate Paying Agent
and the Enhancer, pursuant to the Indenture, dated as of June 30, 2004, between
GMACM Home Equity Loan Trust 2004-HE3 and Xxxxx Fargo Bank, N.A." (the "Note
Payment Account"). On each Payment Date, amounts on deposit in the Note Payment
Account shall be distributed by the Indenture Trustee in accordance with Section
3.05 of the Indenture. In addition, the Indenture Trustee shall deposit in the
Note Payment Account, the amount of any Advance received from the holder of a
Variable Pay Revolving Note in accordance with Section 2.03 of the Indenture, or
the proceeds of the sale and issuance of a Variable Pay Revolving Note issued
pursuant to the Indenture after the Closing Date, to be applied as a
distribution of principal of the related Class of Term Notes on its respective
Targeted Final Payment Date. The Indenture Trustee shall invest or cause the
institution maintaining the Note Payment Account to invest the funds therein in
Permitted Investments selected in writing by the Servicer and designated in the
name of the Indenture Trustee, which investments shall mature not later than the
Business Day next preceding the Payment Date next following the date of such
investment (except that any investment in the institution with which the Note
Payment Account is maintained may mature on such Payment Date and shall not be
sold or disposed of prior to maturity). In addition, no such Permitted
Investment shall be purchased at a price in excess of par. All income and gain
realized from any such investment shall be for the benefit of the Servicer and
shall be subject to its withdrawal or order from time to time. The amount of any
losses incurred in respect of any such investments shall be deposited in the
Note Payment Account by the Servicer out of its own funds immediately as
realized.
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ARTICLE VI
The Servicer
Section 6.01 Liability of the Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Servicer herein.
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer. Any corporation into which the Servicer may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Servicer shall be a party, or
any corporation succeeding to the business of the Servicer, shall be the
successor of the Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
The Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided, that the Person accepting such
assignment or delegation shall be a Person qualified to service mortgage loans,
is reasonably satisfactory to the Enhancer (provided, that such consent to
assignment may not be unreasonably withheld), is willing to service the Mortgage
Loans and executes and delivers to the Issuer (with a copy to the Enhancer) an
agreement, in form and substance reasonably satisfactory to the Enhancer, that
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Servicer under this Agreement; and provided further, that no Rating Event will
occur as a result of such assignment and delegation (as evidenced by a letter to
such effect from each Rating Agency), if determined without regard to the
Policy; and provided further, that the Owner Trustee shall receive an Opinion of
Counsel to the effect that such assignment or delegation will not cause the
Issuer to be treated as an association (or a publicly-traded partnership)
taxable as a corporation for federal income tax purposes.
Section 6.03 Limitation on Liability of the Servicer and Others. Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Issuer, the Owner Trustee, the
Indenture Trustee or the Securityholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement;
provided, however, that this provision shall not protect the Servicer or any
such Person against any liability that would otherwise be imposed by reason of
its willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder or by reason of its reckless disregard of its obligations and
duties hereunder. The Servicer and any director or officer or employee or agent
of the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Servicer and any director, officer, employee or agent of the
Servicer shall be indemnified by the Issuer and held harmless against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Securities, including any amount paid to the Owner Trustee
or the Indenture Trustee pursuant to Section 6.06(b), other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of its willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder or by reason of its reckless disregard of
30
its obligations and duties hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may in its sole discretion undertake any
such action that it may deem necessary or desirable in respect of this
Agreement, the rights and duties of the parties hereto and the interests of the
Securityholders. In such event, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Issuer, and the Servicer shall be entitled to be reimbursed
therefor. The Servicer's right to indemnity or reimbursement pursuant to this
Section 6.03 shall survive any resignation or termination of the Servicer
pursuant to Section 6.04 or 7.01 with respect to any losses, expenses, costs or
liabilities arising prior to such resignation or termination (or arising from
events that occurred prior to such resignation or termination).
Section 6.04 Servicer Not to Resign. Subject to the provisions of Section 6.02,
the Servicer shall not resign from the obligations and duties hereby imposed on
it except (a) upon determination that the performance of its obligations or
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried
on by it or its subsidiaries or Affiliates, the other activities of the Servicer
so causing such a conflict being of a type and nature carried on by the Servicer
or its subsidiaries or Affiliates at the date of this Agreement or (b) upon
satisfaction of the following conditions: (i) the Servicer shall have proposed a
successor Servicer to the Issuer and the Indenture Trustee in writing and such
proposed successor Servicer is reasonably acceptable to the Issuer, the
Indenture Trustee and the Enhancer; (ii) each Rating Agency shall have delivered
a letter to the Issuer, the Enhancer and the Indenture Trustee prior to the
appointment of the successor Servicer stating that the proposed appointment of
such successor Servicer as Servicer hereunder will not cause a Rating Event, if
determined without regard to the Policy; and (iii) such proposed successor
Servicer is reasonably acceptable to the Enhancer, as evidenced by a letter to
the Issuer and the Indenture Trustee; provided, however, that no such
resignation by the Servicer shall become effective until such successor Servicer
or, in the case of (a) above, the Indenture Trustee, as pledgee of the Mortgage
Loans, shall have assumed the Servicer's responsibilities and obligations
hereunder or the Indenture Trustee, as pledgee of the Mortgage Loans, shall have
designated a successor Servicer in accordance with Section 7.02. Any such
resignation shall not relieve the Servicer of responsibility for any of the
obligations specified in Sections 7.01 and 7.02 as obligations that survive the
resignation or termination of the Servicer. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Indenture Trustee and the Enhancer.
Section 6.05 Delegation of Duties. In the ordinary course of business, the
Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, that agrees to conduct such duties in
accordance with standards comparable to those with which the Servicer complies
pursuant to Section 3.01. Such delegation shall not relieve the Servicer of its
liabilities and responsibilities with respect to such duties and shall not
constitute a resignation within the meaning of Section 6.04.
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Section 6.06 Payment of Indenture Trustee's and Owner Trustee's Fees and
Expenses; Indemnification.
(a) After the Closing Date, the Servicer covenants and agrees to pay to the
Owner Trustee, the Indenture Trustee and any co-trustee of the Indenture Trustee
or the Owner Trustee from time to time, and the Owner Trustee, the Indenture
Trustee and any such co-trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust and, in the case of the Indenture
Trustee, for so long as GMAC Mortgage Corporation is the Servicer shall be as
set forth in the letter agreement between the Indenture Trustee and the Servicer
dated as of June 30, 2004) for all services rendered by each of them in the
execution of the trusts created under the Trust Agreement and the Indenture and
in the exercise and performance of any of the powers and duties under the Trust
Agreement or the Indenture, as the case may be, of the Owner Trustee, the
Indenture Trustee and any co-trustee, and the Servicer will pay or reimburse the
Indenture Trustee and any co-trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Indenture Trustee or any
co-trustee in accordance with any of the provisions of this Agreement, the
Indenture or the Trust Agreement except any such expense, disbursement or
advance as may arise from its negligence, willful misfeasance or bad faith. In
addition, the Indenture Trustee shall be entitled to be reimbursed from the
Servicer for all reasonable costs associated with the transfer of servicing from
the predecessor servicer pursuant to Section 7.02 hereunder, including, without
limitation, any reasonable costs or expenses associated with the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Indenture Trustee to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Indenture Trustee to service the Mortgage Loans properly and effectively.
(b) The Servicer agrees to indemnify the Indenture Trustee and the Owner
Trustee for, and to hold the Indenture Trustee and the Owner Trustee, as the
case may be, harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on the part of the Indenture Trustee
or the Owner Trustee, as the case may be, arising out of, or in connection with,
the acceptance and administration of the Issuer and the assets thereof,
including the costs and expenses (including reasonable legal fees and expenses)
of defending the Indenture Trustee or the Owner Trustee, as the case may be,
against any claim in connection with the exercise or performance of any of its
powers or duties under any Basic Document; provided that:
(i) with respect to any such claim, the Indenture Trustee or
Owner Trustee, as the case may be, shall have given the
Servicer written notice thereof promptly after the
Indenture Trustee or Owner Trustee, as the case may be,
shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the
Issuer, the Indenture Trustee or Owner Trustee, as the
case may be, shall cooperate and consult fully with the
Servicer in preparing such defense; and
(iii) notwithstanding anything in this Agreement to the
contrary, the Servicer shall not be liable for settlement
of any claim by the Indenture Trustee or the Owner
Trustee, as the case may be, entered into without the
prior consent of the Servicer.
32
No termination of this Agreement or resignation or removal of the Indenture
Trustee shall affect the obligations created by this Section 6.06 of the
Servicer to indemnify the Indenture Trustee and the Owner Trustee under the
conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the
Servicer in this Section 6.06(b) shall not pertain to any loss, liability or
expense of the Indenture Trustee or the Owner Trustee, including the costs and
expenses of defending itself against any claim, incurred in connection with any
actions taken by the Indenture Trustee or the Owner Trustee at the direction of
the Noteholders or Certificateholders, as the case may be, pursuant to the terms
of this Agreement.
ARTICLE VII
Default
Section 7.01 Servicing Default.
(a) If a Servicing Default shall occur and be continuing, then, and in every
such case, so long as a Servicing Default shall not have been remedied by the
Servicer, either the Issuer or the Indenture Trustee, upon actual knowledge of
the occurrence of a Servicing Default and with the consent of the Enhancer (so
long as no Enhancer Default exists), or the Enhancer, by notice then given in
writing to the Servicer, the Issuer and the Indenture Trustee, may terminate all
of the rights and obligations of the Servicer as servicer under this Agreement
other than its right to receive servicing compensation and expenses for
servicing the Mortgage Loans hereunder during any period prior to the date of
such termination, and the Enhancer or the Issuer or the Indenture Trustee with
the consent of the Enhancer (so long as no Enhancer Default exists), may
exercise any and all other remedies available at law or equity. Any such notice
to the Servicer shall also be given to each Rating Agency, the Enhancer and the
Issuer. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Securities or the Mortgage Loans or otherwise, shall pass to and be
vested in the Indenture Trustee, subject to Section 7.02 hereof, as pledgee of
the Mortgage Loans, pursuant to and under this Section 7.01; and, without
limitation, the Indenture Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each Mortgage
Loan and related documents, or otherwise. The Servicer agrees to cooperate with
the Issuer, the Enhancer and Indenture Trustee, as the case may be, in effecting
the termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, the transfer to the Indenture Trustee for the
administration by it of all cash amounts relating to the Mortgage Loans that
shall at the time be held by the Servicer and to be deposited by it in the
Custodial Account, or that have been deposited by the Servicer in the Custodial
Account or thereafter received by the Servicer with respect to the Mortgage
33
Loans, the recordation of Assignments of Mortgages to the Indenture Trustee if
MERS is not the mortgagee of a Mortgage Loan, and the delivery of the Mortgage
Files in its possession to the Indenture Trustee. All reasonable costs and
expenses (including, but not limited to, attorneys' fees) incurred in connection
with amending this Agreement to reflect such succession as Servicer pursuant to
this Section 7.01 shall be paid by the predecessor Servicer (or if the
predecessor Servicer is the Indenture Trustee, the initial Servicer) upon
presentation of reasonable documentation of such costs and expenses.
(b) Notwithstanding any termination of the activities of the Servicer hereunder,
the Servicer shall be entitled to receive, out of any late collection of a
payment on a Mortgage Loan which was due prior to the notice terminating the
Servicer's rights and obligations hereunder and received after such notice, that
portion to which the Servicer would have been entitled pursuant to Sections 3.03
and 3.09 as well as its Servicing Fee in respect thereof, and any other amounts
payable to the Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder.
Notwithstanding the foregoing, a delay in or failure of performance
under clause (i) or (ii) of the definition of Servicing Default, after the
applicable grace periods specified therein, shall not constitute a Servicing
Default if such delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure was caused by an
act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall
not relieve the Servicer from using reasonable efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Agreement.
The Servicer shall provide the Indenture Trustee, the Enhancer and the
Securityholders with notice of any such failure or delay by it, together with a
description of its efforts to so perform its obligations. The Servicer shall
immediately notify the Indenture Trustee, the Enhancer and the Issuer in writing
of any Servicing Default.
Section 7.02 Indenture Trustee to Act; Appointment of Successor.
--------------------------------------------------
(a) On and after the time the Servicer receives a notice of termination pursuant
to Section 7.01 or sends a notice pursuant to Section 6.04, the Enhancer may
appoint a successor Servicer with the consent of the Indenture Trustee (which
consent shall not be unreasonably withheld) and such appointee, or if the
Enhancer fails to do so within 30 days or an Enhancer Default exists, the
Indenture Trustee or, upon notice to the Enhancer and the Depositor and with the
Depositor's consent and, so long as no Enhancer Default exists, the Enhancer's
consent (which consent shall not be unreasonably withheld), a designee of the
Indenture Trustee (which meets the standards set forth below), shall become the
successor in all respects to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for herein and shall
immediately assume all of the obligations of the Servicer to make advances on
Mortgage Loans under Section 3.02(b) and will be subject to all other
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof as soon as practicable, but in no event later
than 120 days after the termination of the Servicer. During such 120 day period,
the Indenture Trustee, with the consent of the Enhancer, may require the
Servicer being terminated to continue to perform such servicing responsibilities
(other than making advances on the Mortgage Loans under Section 3.02(b)) as the
Indenture Trustee deems appropriate. In such event, the Servicer being
terminated shall provide such services as directed by the Indenture Trustee
until the earliest of the date the Indenture Trustee notifies such Servicer to
discontinue providing such services, the date on which a successor Servicer or
the Indenture Trustee has assumed all responsibilities, duties and liabilities
34
of the Servicer hereunder or the expiration of the 120 day period. The Servicer
shall be entitled to the Servicing Fee hereunder for any period during which the
Servicer is obligated to provide such services as if no termination of the
Servicer had occurred. Nothing in this Agreement or in the Trust Agreement shall
be construed to permit or require any successor Servicer, including the
Indenture Trustee, to (i) succeed to the responsibilities, duties and
liabilities of the initial Servicer in its capacity as Seller under the Purchase
Agreement, (ii) be responsible or accountable for any act or omission of the
Servicer prior to the issuance of a notice of termination hereunder, (iii)
purchase, repurchase or substitute any Mortgage Loan, (iv) fund any Additional
Balances with respect to any Mortgage Loan, (v) fund any losses on any Permitted
Investment directed by any other Servicer, or (vi) be responsible for the
representations and warranties of any other Servicer. As compensation therefor,
any successor Servicer, including the Indenture Trustee, shall be entitled to
such compensation as the Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the foregoing, if the
Enhancer has not appointed a successor Servicer and the Indenture Trustee is (x)
unwilling to act as successor Servicer itself or to appoint an affiliate to
become successor Servicer, or (y) legally unable so to act, the Indenture
Trustee as pledgee of the Mortgage Loans may (in the situation described in
clause (x)) or shall (in the situation described in clause (y)) appoint or
petition a court of competent jurisdiction to appoint any established housing
and home finance institution, bank or other mortgage loan servicer having a net
worth of not less than $10,000,000 as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder; provided, that any such successor Servicer shall be
acceptable to the Enhancer, as evidenced by the Enhancer's prior written
consent, which consent shall not be unreasonably withheld; and provided further,
that the appointment of any such successor Servicer will not result in a Rating
Event, if determined without regard to the Policy. Pending appointment of a
successor to the Servicer hereunder, unless the Indenture Trustee is prohibited
by law from so acting, the Indenture Trustee itself shall act or appoint an
affiliate to act in such capacity as provided above. In connection with such
appointment and assumption, the successor shall be entitled to receive
compensation out of payments on Mortgage Loans in an amount equal to the
compensation that the Servicer would otherwise have received pursuant to Section
3.09 (or such other compensation as the Enhancer (so long as no Enhancer Default
exists) or if an Enhancer Default exists, the Indenture Trustee, and such
successor shall agree). The appointment of a successor Servicer shall not affect
any liability of the predecessor Servicer that may have arisen under this
Agreement prior to its termination as Servicer (including the obligation to
purchase Mortgage Loans pursuant to Section 3.01, to pay any deductible under an
insurance policy pursuant to Section 3.04 or to indemnify the Indenture Trustee
pursuant to Section 6.06), nor shall any successor Servicer be liable for any
acts or omissions of the predecessor Servicer or for any breach by such Servicer
of any of its representations or warranties contained herein or in any related
document or agreement. The Indenture Trustee and such successor shall take such
35
action, consistent with this Agreement and the requirements (including any
notice requirements) of applicable law, as shall be necessary to effectuate any
such succession. Notwithstanding the foregoing, the Indenture Trustee, in its
capacity as successor Servicer, shall not be responsible for the lack of
information or documents that it cannot obtain through reasonable efforts or for
failing to take any action that the Indenture Trustee is legally prohibited from
taking by applicable law.
(b) Any successor, including the Indenture Trustee, to the Servicer as servicer
shall during its term as Servicer (i) continue to service and administer the
Mortgage Loans for the benefit of the Securityholders, (ii) maintain in force a
policy or policies of insurance covering errors and omissions in the performance
of its obligations as Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required
pursuant to Section 3.13 and (iii) be bound by the terms of the Insurance
Agreement.
(c) Any successor Servicer, including the Indenture Trustee, shall not be deemed
in default or to have breached its duties hereunder if the predecessor Servicer
shall fail to deliver any required deposit to the Custodial Account or otherwise
cooperate with any required servicing transfer or succession hereunder.
(d) In connection with the termination or resignation of the Servicer hereunder,
either (i) the successor Servicer, including the Indenture Trustee if the
Indenture Trustee is acting as successor Servicer, shall represent and warrant
that it is a member of MERS in good standing and shall agree to comply in all
material respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS, in which case the
predecessor Servicer shall cooperate with the successor Servicer in causing MERS
to revise its records to reflect the transfer of servicing to the successor
Servicer as necessary under MERS' rules and regulations, or (ii) the predecessor
Servicer shall cooperate with the successor Servicer in causing MERS to execute
and deliver an assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Indenture Trustee and to execute and deliver such
other notices, documents and other instruments as may be necessary or desirable
to effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS(R) System to the successor Servicer. The predecessor Servicer shall
file or cause to be filed any such assignment in the appropriate recording
office. The predecessor Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this subsection (d). The
successor Servicer shall cause such assignment to be delivered to the Indenture
Trustee or the Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording office in which
such assignment was recorded.
Section 7.03 Notification to Securityholders. Upon any termination of or
appointment of a successor to the Servicer pursuant to this Article VII or
Section 6.04, the Indenture Trustee shall give prompt written notice thereof to
the Securityholders, the Enhancer, the Issuer and each Rating Agency.
ARTICLE VIII
Miscellaneous Provisions
Section 8.01 Amendment. This Agreement may be amended from time to time by the
parties hereto; provided, that any such amendment shall be accompanied by a
letter from each Rating Agency to the effect that such amendment will not result
in a Rating Event, if determined without regard to the Policy; and provided
further, that the Enhancer and the Indenture Trustee shall consent thereto.
36
Section 8.02 GOVERNING LAW. 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.
Section 8.03 Notices. All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
at or mailed by certified mail, return receipt requested, to (a) in the case of
the Servicer, 000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxxx
Xxxxx, (b) in the case of the Enhancer, Financial Security Assurance Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Managing Director -
Transaction Oversight, Re: GMACM Home Equity Loan Trust 2004 HE3, Policy No.
51527-N, telecopier number (000) 000-0000, confirmation telephone number (212)
000-0000, (c) in the case of Xxxxx'x, Home Mortgage Loan Monitoring Group, 4th
Floor, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (d) in the case of Standard &
Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Residential
Mortgage Surveillance Group, (e) in the case of the Owner Trustee, Wilmington
Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000-0000 and (f) in the case of the Issuer, GMACM Home Equity Loan
Trust 2004-HE3, c/o the Owner Trustee at the address set forth in clause (e)
above, and (g) in the case of the Indenture Trustee, at the Corporate Trust
Office of the Indenture Trustee; or, with respect to each of the foregoing
Persons, at such other address as shall be designated by such Person in a
written notice to the other foregoing Persons. Any notice required or permitted
to be mailed to a Securityholder shall be given by first class mail, postage
prepaid, at the address of such Securityholder as shown in the Note Register or
Certificate Register, as the case may be. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the related Securityholder receives such notice. Any
notice or other document required to be delivered or mailed by the Indenture
Trustee to any Rating Agency shall be given on a reasonable efforts basis and
only as a matter of courtesy and accommodation, and the Indenture Trustee shall
have no liability for failure to deliver any such notice or document to any
Rating Agency.
Section 8.04 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, 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 or the Securities or
the rights of the Securityholders.
Section 8.05 Third-Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, the Securityholders, the
Enhancer, the Owner Trustee and their respective successors and permitted
assigns. Except as otherwise provided in this Agreement, no other Person shall
have any right or obligation hereunder.
Section 8.06 Counterparts. This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
37
Section 8.07 Effect of Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 8.08 Termination Upon Purchase by the Servicer or Liquidation of All
Mortgage Loans; Partial Redemption.
(a) The respective obligations and responsibilities of the
Servicer, the Issuer and the Indenture Trustee created
hereby shall terminate upon the last action required to be
taken by the Issuer pursuant to the Trust Agreement and by
the Indenture Trustee pursuant to the Indenture following
the earlier of:
(i) the date on or before which the Indenture or the Trust
Agreement is terminated, or
(ii) the purchase by the Servicer from the Issuer of all
Mortgage Loans and REO Property in accordance with Section
8.08(b).
(b) The Servicer shall have the right to purchase from the Issuer all of
the Mortgage Loans and related REO Property if the aggregate Note Balance of the
Notes as of any Payment Date is less than 10% of the aggregate Note Balance of
the Notes as of the Closing Date (provided that a draw on the Policy would not
occur as a result of such purchase and provided further that the purchase price
will provide sufficient funds to pay the outstanding Note Balance and accrued
and unpaid interest on the Notes to the Payment Date on which such amounts are
to be distributed to the Securityholders), at a price equal to 100% of the
aggregate unpaid Principal Balance of all such remaining Mortgage Loans, plus
accrued and unpaid interest thereon at the weighted average of the Loan Rates
thereon up to the date preceding the Payment Date on which such amounts are to
be distributed to the Securityholders (and in the case of REO Property, the fair
market value of the REO Property), plus any amounts due and owing to the
Enhancer under the Insurance Agreement related to the Mortgage Loans or the
Notes (and any unpaid Servicing Fee relating to the Mortgage Loans shall be
deemed to have been paid at such time), plus any Interest Shortfall and interest
owed thereon to the Noteholders.
The Servicer shall send written notice to the Enhancer of its
intent to exercise its right to purchase any of the Mortgage Loans pursuant to
this Section 8.08(b).
If such right is exercised by the Servicer, the Servicer shall
deposit the amount calculated pursuant to this Section 8.08(b) with the
Indenture Trustee pursuant to Section 4.10 of the Indenture and, upon the
receipt of such deposit, the Indenture Trustee or Custodian shall release to the
Servicer, the files pertaining to the Mortgage Loans being purchased. The
Servicer, at its expense, shall prepare and deliver to the Indenture Trustee for
execution, at the time the related Mortgage Loans are to be released to the
Servicer, appropriate documents assigning each such Mortgage Loans from the
Indenture Trustee or the Issuer to the Servicer or the appropriate party.
Section 8.09 Certain Matters Affecting the Indenture Trustee. For all purposes
of this Agreement, in the performance of any of its duties or in the exercise of
any of its powers hereunder, the Indenture Trustee shall be subject to and
entitled to the benefits of Article VI of the Indenture.
38
Section 8.10 Owner Trustee Not Liable for Related Documents. The recitals
contained herein shall be taken as the statements of the Servicer, and the Owner
Trustee and the Indenture Trustee assume no responsibility for the correctness
thereof. The Owner Trustee and the Indenture Trustee make no representations as
to the validity or sufficiency of this Agreement, of any Basic Document or
Related Document, or of the Certificates (other than the signatures of the Owner
Trustee and the Indenture Trustee on the Certificates) or the Notes. The Owner
Trustee and the Indenture Trustee shall at no time have any responsibility or
liability with respect to the sufficiency of the Trust Estate or its ability to
generate the payments to be distributed to Certificateholders under the Trust
Agreement or the Noteholders under the Indenture, including the compliance by
the Depositor, the Sellers or the Servicer with any warranty or representation
made under any Basic Document or the accuracy of any such warranty or
representation, or any action of any person taken in the name of the Owner
Trustee or the Indenture Trustee.
IN WITNESS WHEREOF, the Servicer, the Issuer and the Indenture Trustee
have caused this Agreement to be duly executed by their respective officers or
representatives all as of the day and year first above written.
GMAC MORTGAGE CORPORATION,
as Servicer
By:
----------------------------------------
Name:
Title:
GMACM HOME EQUITY LOAN TRUST 2004-HE3, as
Issuer
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee
By:
----------------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A.,
as Indenture Trustee
By:
----------------------------------------
Name:
Title:
39
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PREMISES:
That Xxxxx Fargo Bank, N.A., as indenture trustee (the "Indenture
Trustee"), under the indenture dated as of June 30, 2004 (the "Indenture"),
between GMACM Home Equity Loan Trust 2004-HE3, as issuer and the Indenture
Trustee, a national banking association organized and existing under the laws of
the United States of America, and having its principal office located at 0000
Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, hath made, constituted and
appointed, and does by these presents make, constitute and appoint GMAC Mortgage
Corporation, a corporation organized and existing under the laws of the
Commonwealth of Pennsylvania, its true and lawful Attorney-in-Fact, with full
power and authority to sign, execute, acknowledge, deliver, file for record, and
record any instrument on its behalf and to perform such other act or acts as may
be customarily and reasonably necessary and appropriate to effectuate the
following enumerated transactions in respect of any of the Mortgages securing a
Mortgage Loan and the related Loan Agreements for which the undersigned is
acting as Indenture Trustee for various Securityholders (whether the undersigned
is named therein as mortgagee or beneficiary or has become mortgagee by virtue
of endorsement of such Loan Agreement secured by any such Mortgage) and for
which GMAC Mortgage Corporation is acting as Servicer pursuant to a Servicing
Agreement dated as of June 30, 2004 (the "Servicing Agreement").
This appointment shall apply to the following enumerated transactions only:
1. The modification or re-recording of a Mortgage, where said modification
or re-recording is for the purpose of correcting the Mortgage to conform
same to the original intent of the parties thereto or to correct title
errors discovered after such title insurance was issued and said
modification or re-recording, in either instance, does not adversely
affect the Lien of the Mortgage as insured.
2. The subordination of the Lien of a Mortgage to an easement in favor of a
public utility company or a government agency or unit with powers of
eminent domain; this section shall include, without limitation, the
execution of partial satisfactions/releases, partial reconveyances or
the execution of requests to trustees to accomplish same.
3. With respect to a Mortgage, the foreclosure, the taking of a deed in
lieu of foreclosure, or the completion of judicial or non-judicial
foreclosure or termination, cancellation or rescission of any such
foreclosure, including, without limitation, any and all of the following
acts:
a. The substitution of trustee(s) serving under a Mortgage, in
accordance with state law and the Mortgage;
b. Statements of breach or non-performance;
c. Notices of default;
d. Cancellations/rescissions of notices of default or notices of
sale;
e. The taking of a deed in lieu of foreclosure; and
f. Such other documents and actions as may be necessary under the
terms of the Mortgage or state law to expeditiously complete said
transactions.
4. The conveyance of the properties to the mortgage insurer, or the closing
of the title to the property to be acquired as real estate owned, or
conveyance of title to real estate owned.
5. The completion of loan assumption agreements.
6. The full satisfaction/release of a Mortgage or full reconveyance upon
payment and discharge of all sums secured thereby, including, without
limitation, cancellation of the related Loan Agreement.
7. The assignment of any Mortgage and the related Loan Agreement, in
connection with the repurchase of the Mortgage Loan secured and
evidenced thereby.
8. The full assignment of a Mortgage upon payment and discharge of all sums
secured thereby in conjunction with the refinancing thereof, including,
without limitation, the endorsement of the related Loan Agreement.
9. The modification or re-recording of a Mortgage, where said modification
or re-recording is for the purpose of any modification pursuant to
Section 3.01 of the Servicing Agreement.
10. The execution of partial satisfactions/releases pursuant to Section 3.01
of the Servicing Agreement.
The undersigned gives said Attorney-in-Fact full power and authority to
execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or could
do, and hereby does ratify and confirm to all that said Attorney-in-Fact shall
lawfully do or cause to be done by authority hereof.
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in Appendix A to the Indenture.
Third parties without actual notice may rely upon the exercise of the
power granted under this Limited Power of Attorney; and may be satisfied that
this Limited Power of Attorney shall continue in full force and effect has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.
XXXXX FARGO BANK, N.A.,
not in its individual capacity
but solely as Indenture Trustee
By:
----------------------------------------
Name:
Title:
STATE OF )
SS.
COUNTY OF )
On this [___] day of June, 2004, before me the undersigned, Notary
Public of said State, personally appeared , personally known to me to be duly
authorized officers of Xxxxx Fargo Bank, N.A. that executed the within
instrument and personally known to me to be the persons who executed the within
instrument on behalf of Xxxxx Fargo Bank, N.A. therein named, and acknowledged
to me such Xxxxx Fargo Bank, N.A. executed the within instrument pursuant to its
by-laws.
WITNESS my hand and official
seal.
Notary Public in and for the
State of
------------------------
After recording, please mail to:
Attn:
-------------------------------
EXHIBIT C
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Mortgage Loans, we request the
release of the Mortgage File described below.
Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan
Prepaid in Full Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Servicing Agreement."
GMAC Mortgage Corporation
Authorized Signature
******************************************************************************
TO CUSTODIAN: Please acknowledge this request, and check off documents being
enclosed with a copy of this form. You should retain this form for your files in
accordance with the terms of the Servicing Agreement.
Enclosed Documents: [ ] Loan Agreement
Name
--------------------------------
Title
-------------------------------
Date
------------------
EXHIBIT D-1
FORM OF FORM 10-K CERTIFICATION
I, [identify the certifying individual], certify that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
[____], and all reports on Form 8-K containing distribution or servicing reports
filed in respect of periods included in the year covered by that annual report,
of GMACM Home Equity Loan Trust 2004-HE3 (the "Trust"), the assets of which are
serviced pursuant to the Servicing Agreement dated June 30, 2004 (the "Servicing
Agreement") among the Trust, GMAC Mortgage Corporation (the "Servicer") and
Xxxxx Fargo Bank, N.A. (the "Indenture Trustee");
2. Based on my knowledge, the information in these reports, 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 light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by that annual report;
3. Based on my knowledge, the servicing information required to be
provided to the Indenture Trustee by the Servicer under the Servicing Agreement
is included in these reports;
4. I am responsible for reviewing the activities performed by the
Servicer under the Servicing Agreement and based upon my knowledge and the
review required under the Servicing Agreement, and, except as disclosed in the
report, the Servicer has fulfilled its obligations under the Servicing
Agreement; and
5. The reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant , after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers, or
similar procedure, as set forth in the Servicing Agreement, that is included in
these reports.
[In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: [Xxxxx Fargo
Bank, N.A.], [ ].
IN WITNESS WHEREOF, I have duly executed this certificate as of
_________, 20__.
____________________________*
Name:
Title:
* to be signed by the senior officer in charge of the servicing functions
of the Servicer
EXHIBIT D-2
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
The undersigned, a Responsible Officer of Xxxxx Fargo Bank, N.A. (the
"Indenture Trustee") certifies that:
(a) The Indenture Trustee has performed all of the duties specifically
required to be performed by it pursuant to the provisions of the Servicing
Agreement dated as of June 30, 2004 (the "Agreement") by and among GMACM Home
Equity Loan Trust 2004-HE3, as depositor, GMAC Mortgage Corporation, as
Servicer, and the Indenture Trustee in accordance with the standards set forth
therein.
(b) Based on my knowledge, the information that is provided by the
Indenture Trustee pursuant to Section 4.01(b) of the Agreement is accurate as of
the last day of the 20[ ] calendar year.
Capitalized terms used and not defined herein shall have the meanings
given such terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of
_________, 20__.
____________________________*
Name:
Title:
TABLE OF CONTENTS
Page
i
ARTICLE I Definitions...............................................................1
Section 1.01 Definitions.......................................................1
Section 1.02 Other Definitional Provisions.....................................1
Section 1.03 Interest Calculations.............................................2
ARTICLE II Representations and Warranties............................................2
Section 2.01 Representations and Warranties Regarding the Servicer.............2
Section 2.02 Representations and Warranties of the Issuer......................4
Section 2.03 Enforcement of Representations and Warranties.....................4
ARTICLE III Administration and Servicing of Mortgage Loans............................5
Section 3.01 The Servicer......................................................5
Section 3.02 Collection of Certain Mortgage Loan Payments......................8
Section 3.03 Withdrawals from the Custodial Account...........................10
Section 3.04 Maintenance of Hazard Insurance; Property Protection Expenses....12
Section 3.05 Modification Agreements..........................................13
Section 3.06 Trust Estate; Related Documents..................................13
Section 3.07 Realization Upon Defaulted Mortgage Loans........................14
Section 3.08 Issuer and Indenture Trustee to Cooperate........................16
Section 3.09 Servicing Compensation; Payment of Certain Expenses by
Servicer.........................................................17
Section 3.10 Annual Statement as to Compliance................................17
Section 3.11 Annual Servicing Report..........................................17
Section 3.12 Access to Certain Documentation and Information Regarding
the Mortgage Loans...............................................18
Section 3.13 Maintenance of Certain Servicing Insurance Policies..............18
Section 3.14 Information Required by the Internal Revenue Service and
Reports of Foreclosures and Abandonments of Mortgaged
Property.........................................................18
Section 3.15 Optional Repurchase or Transfer of Mortgage Loans................18
Section 3.16 Funding Account..................................................20
Section 3.18 Pre-Funding Account..............................................21
Section 3.19 Capitalized Interest Account.....................................22
Section 3.20 Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments. ...................23
Section 3.21 Advance Facility. ...............................................24
ARTICLE IV Servicing Certificate....................................................26
Section 4.01 Statements to Securityholders....................................26
Section 4.02 Tax Returns and 1934 Act Reports.................................28
ARTICLE V Note Payment Account.....................................................29
Section 5.01 Note Payment Account.............................................29
ARTICLE VI The Servicer.............................................................30
Section 6.01 Liability of the Servicer........................................30
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer.................................................30
Section 6.03 Limitation on Liability of the Servicer and Others...............30
Section 6.04 Servicer Not to Resign...........................................31
Section 6.05 Delegation of Duties.............................................31
Section 6.06 Payment of Indenture Trustee's and Owner Trustee's Fees and
Expenses; Indemnification........................................32
ARTICLE VII Default..................................................................33
Section 7.01 Servicing Default................................................33
Section 7.02 Indenture Trustee to Act; Appointment of Successor...............34
Section 7.03 Notification to Securityholders..................................36
ARTICLE VIII Miscellaneous Provisions.................................................36
Section 8.01 Amendment........................................................36
Section 8.02 GOVERNING LAW....................................................37
Section 8.03 Notices..........................................................37
Section 8.04 Severability of Provisions.......................................37
Section 8.05 Third-Party Beneficiaries........................................37
Section 8.06 Counterparts.....................................................37
Section 8.07 Effect of Headings and Table of Contents.........................38
Section 8.08 Termination Upon Purchase by the Servicer or Liquidation of
All Mortgage Loans; Partial Redemption...........................38
Section 8.09 Certain Matters Affecting the Indenture Trustee..................38
Section 8.10 Owner Trustee Not Liable for Related Documents...................39
TABLE OF CONTENTS
(CONTINUED)
PAGE
EXHIBIT A MORTGAGE LOAN SCHEDULE..................................................A-1
EXHIBIT B LIMITED POWER OF ATTORNEY...............................................B-1
EXHIBIT C FORM OF REQUEST FOR RELEASE.............................................C-1
EXHIBIT D-1 FORM OF FORM 10-K CERTIFICATION.........................................D-1
EXHIBIT D-2 FORM OF BACK-UP CERTIFICATION TO FORM 10-K
CERTIFICATE.............................................................D-2
