AMENDMENT NO. 1 TO FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
EXECUTION
VERSION
AMENDMENT
NO. 1
Amendment
No. 1, dated as of August 1, 2006 (the “Amendment”),
by
and between XXXXXXX XXXXX MORTGAGE COMPANY (the “Purchaser”)
and
BANK OF AMERICA, NATIONAL ASSOCIATION (the “Seller”).
RECITALS
The
Seller and the Purchaser are parties to that certain Amended and Restated Flow
Mortgage Loan Sale and Servicing Agreement, dated as of July 1, 2005, (the
“Existing
Purchase Agreement”;
as
amended by this Amendment, the “Purchase
Agreement”).
Capitalized terms used but not otherwise defined herein shall have the meanings
given to them in the Existing Purchase Agreement.
The
Seller and the Purchaser have agreed, subject to the terms and conditions of
this Amendment, that the Existing Purchase Agreement be amended to reflect
certain agreed upon revisions to the terms of the Existing Purchase
Agreement.
Accordingly,
the Seller and the Purchaser hereby agree, in consideration of the mutual
promises and mutual obligations set forth herein, that the Existing Purchase
Agreement is hereby amended as follows:
SECTION
1. Section
1
of the
existing Purchase Agreement is hereby amended by adding the following
definitions:
Covered
Loan:
A
Mortgage Loan categorized as Covered pursuant to Appendix E of Standard &
Poor’s Glossary.
Deemed
Material Breach Representation:
Each
representation and warranty identified as such in Subsection 7.01.
High
Cost Loan:
A
Mortgage Loan (a) covered by the Home Ownership and Equity Protection Act of
1994 (“HOEPA”), (b) with an “annual percentage rate” or total “points and fees”
payable by the related Mortgagor (as each such term is calculated under HOEPA)
that exceed the thresholds set forth by HOEPA and its implementing regulations,
including 12 C.F.R. § 226.32(a)(1)(i) and (ii), (c) classified as a “high cost
home,” “threshold,” “covered,” “high risk home,” “predatory” or similar loan
under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans
having high interest rates, points and/or fees) or (d) a Mortgage Loan
categorized as High Cost pursuant to Appendix E of Standard & Poor’s
Glossary. For avoidance of doubt, the parties agree that this definition shall
apply to any law regardless of whether such law is presently, or in the future
becomes, the subject of judicial review or litigation.
Prepayment
Charge:
With
respect to each Mortgage Loan, the fee, if any, payable upon the prepayment,
in
whole or in part, of such Mortgage Loan, as set forth in the related Mortgage
Note.
SECTION
2. Section
7.01 of the
existing Purchase Agreement is hereby amended by:
(a) deleting
the existing subsection (g) in its entirety and replacing it with the following
language:
(g) Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, predatory, abusive and fair lending laws, equal credit
opportunity and disclosure laws or unfair and deceptive practices laws
applicable to the Mortgage Loan including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation
of
the transactions contemplated hereby will not involve the violation of any
such
laws or regulations, and the Seller shall maintain in its possession, available
for the Purchaser’s inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements. This representation and
warranty is a Deemed Material Breach Representation;
(b) deleting
the existing subsection (zz) in its entirety and replacing it with the following
language:
(zz) No
Mortgage Loan is a High Cost Loan or Covered Loan, as applicable,. No Mortgage
Loan is covered by the Home Ownership and Equity Protection Act of 1994 and
no
Mortgage Loan is in violation of any comparable state or local law. The
Mortgaged Property is not located in a jurisdiction where a breach of this
representation with respect to the related Mortgage Loan may result in
additional assignee liability to the Purchaser, as determined by Purchaser
in
its reasonable discretion. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan. Each Mortgage Loan is in compliance with the anti-predatory
lending eligibility for purchase requirements of Xxxxxx Mae’s Selling Guide.
This representation and warranty is a Deemed Material Breach Representation;
(c) deleting
the existing subsection (bbb) in its entirety and replacing it with the
following language:
(bbb) In
connection with the origination of any Mortgage Loan, no proceeds from any
Mortgage Loan were used to finance or acquire a single-premium credit life
insurance policy. No Mortgagor was required to purchase any single premium
credit insurance policy (e.g., life, disability, accident, unemployment or
property insurance product) or debt cancellation agreement as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid single
premium credit insurance policy (e.g., life, disability, accident, unemployment
or property insurance policy) in connection with the origination of the Mortgage
Loan; no proceeds from any Mortgage Loan were used to purchase single premium
credit insurance policies or debt cancellation agreements as part of the
origination of, or as a condition to closing, such Mortgage Loan. This
representation and warranty is a Deemed Material Breach
Representation;
1
(d) deleting
the existing subsection (ccc) in its entirety and replacing it with the
following language:
(ccc) The
Mortgage Loan is subject to a Prepayment Charge as provided in the related
Mortgage Note except as set forth on the related Mortgage Loan Schedule. With
respect to each Mortgage Loan that has a Prepayment Charge feature, each such
Prepayment Charge is enforceable and will be enforced by the Seller for the
benefit of the Purchaser, and each Prepayment Charge is permitted pursuant
to
federal, state and local law. Each such Prepayment Charge is in an amount not
more than the maximum amount permitted under applicable law and no such
Prepayment Charge may provide for a term in excess of five (5) years with
respect to Mortgage Loans originated prior to October, 1, 2002. With respect
to
Mortgage Loans originated on or after October 1, 2002, the duration of the
Prepayment Charge period shall not exceed three (3) years from the date of
the
Mortgage Note unless the Mortgage Loan was modified to reduce the Prepayment
Charge period to no more than three (3) years from the date of such Mortgage
Loan and the Mortgagor was notified in writing of such reduction in Prepayment
Charge period. With respect to any Mortgage Loan that contains a provision
permitting imposition of a penalty upon a prepayment prior to maturity: (i)
the
Mortgage Loan provides some benefit to the Mortgagor (e.g., a rate or fee
reduction) in exchange for accepting such Prepayment Charge, (ii) the Mortgage
Loan’s originator had a written policy of offering the Mortgagor or requiring
third-party brokers to offer the Mortgagor, the option of obtaining a mortgage
loan that did not require payment of such a penalty and (iii) the Prepayment
Charge was adequately disclosed to the Mortgagor in the mortgage loan documents
pursuant to applicable state, local and federal law. This representation and
warranty is a Deemed Material Breach Representation;
(e) deleting
the existing subsection (ddd) in its entirety and replacing it with the
following language:
(ddd) As
to
each consumer report (as defined in the Fair Credit Reporting Act, Public Law
91-508) or other credit information furnished by the Seller to the Purchaser,
that Seller has full right and authority and is not precluded by law or contract
from furnishing such information to the Purchaser and the Purchaser is not
precluded by the terms of the Mortgage Loan Documents from furnishing the same
to any subsequent or prospective purchaser of such Mortgage. The Seller shall
hold the Purchaser harmless from any and all damages, losses, costs and expenses
(including attorney’s fees) arising from disclosure of credit information in
connection with the Purchaser’s secondary marketing operations and the purchase
and sale of mortgages. The Seller has in its capacity as servicer, for each
Mortgage Loan, fully furnished, in accordance with the Fair Credit Reporting
Act
and its implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian
and
Trans Union Credit Information Company (three of the credit repositories),
on a
monthly basis. The Servicer will transmit full-file credit reporting data for
each Mortgage Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and that
for
each Mortgage Loan, Servicer agrees it shall report one of the following
statuses each month as follows: new origination, current, delinquent (30-,
60-,
90-days, etc.), foreclosed, or charged-off. This representation and warranty
is
a Deemed Material Breach Representation;
2
SECTION
3. Section
7.01 of the
existing Purchase Agreement is hereby amended by adding the following new
subsection (mmm)-(qqq) at the end thereof:
(mmm) The
Mortgagor was not encouraged or required to select a Mortgage Loan product
offered by the Mortgage Loan’s originator which is a higher cost product
designed for less creditworthy borrowers, unless at the time of the Mortgage
Loan’s origination, such Mortgagor did not qualify taking into account such
facts as, without limitation, the Mortgage Loan’s requirements and the
Mortgagor’s credit history, income, assets and liabilities and debt-to-income
ratios for a lower-cost credit product then offered by the Mortgage Loan’s
originator or any affiliate of the Mortgage Loan’s originator. If, at the time
of loan application, the Mortgagor may have qualified for a lower-cost credit
product then offered by any mortgage lending affiliate of the Mortgage Loan’s
originator, the Mortgage Loan’s originator referred the Mortgagor’s application
to such affiliate for underwriting consideration. For a Mortgagor who seeks
financing through a Mortgage Loan originator’s higher-priced subprime lending
channel, the Mortgagor was directed towards or offered the Mortgage Loan
originator’s standard mortgage line if the Mortgagor was able to qualify for one
of the standard products. This representation and warranty is a Deemed Material
Breach Representation;
(nnn) The
methodology used in underwriting the extension of credit for each Mortgage
Loan
does not rely on the extent of the Mortgagor’s equity in the collateral as the
principal determining factor in approving such extension of credit. The
methodology employed objective criteria that related such facts as, without
limitation, the Mortgagor’s credit history, income, assets or liabilities, to
the proposed mortgage payment and, based on such methodology, the Mortgage
Loan’s originator made a reasonable determination that at the time of
origination the Mortgagor had the ability to make timely payments on the
Mortgage Loan. Such underwriting methodology confirmed that at the time of
origination (application/approval) the Mortgagor had a reasonable ability to
make timely payments on the Mortgage Loan. This representation and warranty
is a
Deemed Material Breach Representation;
3
(ooo) With
respect to any Mortgage Loan originated on or after August 1, 2004, neither
the
related Mortgage nor the related Mortgage Note requires the Mortgagor to submit
to arbitration to resolve any dispute arising out of or relating in any way
to
the Mortgage Loan transaction. This representation and warranty is a Deemed
Material Breach Representation; and
(ppp) All
fees
and charges (including finance charges) and whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing
of
each Mortgage Loan has been disclosed in writing to the Mortgagor in accordance
with applicable state and federal law and regulation. This representation and
warranty is a Deemed Material Breach Representation;
(qqq) No
Mortgagor was charged “points and fees” (whether or not financed) in an amount
greater than (i) $1,000, or (ii) 5% of the principal amount of such Mortgage
Loan, whichever is greater. For purposes of this representation, such 5%
limitation is calculated in accordance with Xxxxxx Mae’s anti-predatory lending
requirements as set forth in the Xxxxxx Xxx Guides and “points and fees” (x)
include origination, underwriting, broker and finder fees and charges that
the
mortgagee imposed as a condition of making the Mortgage Loan, whether they
are
paid to the mortgagee or a third party; and (y) exclude bona fide discount
points, fees paid for actual services rendered in connection with the
origination of the Mortgage Loan (such as attorneys’ fees, notaries fees and
fees paid for property appraisals, credit reports, surveys, title examinations
and extracts, flood and tax certifications, and home inspections), the cost
of
mortgage insurance or credit-risk price adjustments, the costs of title, hazard,
and flood insurance policies, state and local transfer taxes or fees, escrow
deposits for the future payment of taxes and insurance premiums, and other
miscellaneous fees and charges which miscellaneous fees and charges, in total,
do not exceed 0.25% of the principal amount of such Mortgage Loan. This
representation and warranty is a Deemed Material Breach Representation;
SECTION
4. The
second sentence of second paragraph of Subsection 7.03 of the
existing Agreement is hereby amended by deleting the existing sentence in its
entirety and replacing it with the following language:
Notwithstanding
the above sentence, (i) within sixty (60) days of the earlier of either
discovery by, or notice to, the Seller of any breach of the representation
and
warranty set forth in clause (nn) of Subsection 7.01, the Seller shall
repurchase such Mortgage Loan at the Repurchase Price, together with all
expenses incurred by the Purchaser as a result of such repurchase and (ii)
any
breach of a Deemed Material Breach Representation shall automatically be deemed
to materially and adversely affect the value of the Mortgage Loan and the
interest of the Purchaser therein.
SECTION
5. Conditions
Precedent.
This
Amendment shall become effective on August 30, 2006 (the “Amendment
Effective Date”)
subject to the satisfaction of the following conditions precedent:
4
5.1 Delivered
Documents.
On the
Amendment Effective Date, the Purchaser shall have received the following
documents, each of which shall be satisfactory to the Purchaser in form and
substance:
(a) this
Amendment, executed and delivered by duly authorized officers of the Seller
and
the Purchaser;
(b) such
other documents as the Purchaser or counsel to the Purchaser may reasonably
request.
SECTION
6. Representations
and Warranties.
The
Seller hereby represents and warrants to the Purchaser that it is in compliance
with all the terms and provisions set forth in the Existing Purchase Agreement
on its part to be observed or performed, and hereby confirms and reaffirms
the
representations and warranties contained in Section 7.02 of the Existing
Purchase Agreement.
SECTION
7. Limited
Effect.
Except
as expressly amended and modified by this Amendment, the Existing Purchase
Agreement shall continue to be, and shall remain, in full force and effect
in
accordance with its terms.
SECTION
8. GOVERNING
LAW. THIS
AMENDMENT 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
9. Counterparts.
This
Amendment may be executed in one or more counterparts and by different parties
hereto on separate counterparts, each of which, when so executed, shall
constitute one and the same agreement.
SECTION
10. Conflicts.
The
parties hereto agree that in the event there is any conflict between the terms
of this Amendment, and the terms of the Existing Purchase Agreement, the
provisions of this Amendment shall control.
[SIGNATURE
PAGE FOLLOWS]
5
EXECUTION
VERSION
IN
WITNESS WHEREOF, the parties have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year
first
above written.
| Purchaser: | XXXXXXX
SACHS MORTGAGE COMPANY, a New York limited partnership |
|
| |
By: |
Xxxxxxx
Xxxxx Real Estate Funding Corp.,
its general partner |
| By: | ||
|
Name: |
||
| Title: | ||
| Seller: | BANK OF AMERICA, NATIONAL ASSOCIATION | |
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
