Exhibit 99.3
Execution
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OPTION ONE MORTGAGE CORPORATION
as Servicer
and
XXXXXX BROTHERS HOLDINGS INC.,
-----------------------------
Structured Asset Securities Corporation
Amortizing Residential Collateral Trust
Mortgage Pass-Through Certificates, Series 2001-BC1
SERVICING AGREEMENT
Dated as of February 1, 2001
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Table of Contents
Page
ARTICLE I.
DEFINITIONS
ARTICLE II.
HOLDING'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files..........12
Section 2.02 Books and Records..............................................13
ARTICLE III.
SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service............................................13
Section 3.02 Collection of Mortgage Loan Payments...........................15
Section 3.03 Establishment of and Deposits to Custodial Account.............15
Section 3.04 Permitted Withdrawals From Custodial Account...................17
Section 3.05 Establishment of and Deposits to Escrow Account................18
Section 3.06 Permitted Withdrawals From Escrow Account......................19
Section 3.07 Restoration of Mortgaged Property..............................20
Section 3.08 Fidelity Bond and Errors and Omissions Insurance...............21
Section 3.09 Notification of Adjustments....................................21
Section 3.10 Payment of Taxes, Insurance and Other Charges..................22
Section 3.11 Protection of Accounts.........................................22
Section 3.12 Title, Management and Disposition of REO Property..............23
Section 3.13 Real Estate Owned Reports......................................25
Section 3.14 MERS...........................................................25
Section 3.15 Servicing and Administration of the MGIC PMI Insurance Policy..25
Section 3.16 Maintenance of Hazard Insurance................................26
Section 3.17 Realization Upon Defaulted Mortgage Loans......................27
Section 3.18 Enforcement of Due-On-Sale Clauses; Assumption Agreement.......28
ARTICLE IV.
PAYMENTS TO THE TRUSTEE
Section 4.01 Remittances....................................................29
Section 4.02 Statements to Trustee..........................................30
Section 4.03 Monthly Advances by Servicer...................................30
Section 4.04 Compensating Interest..........................................31
Section 4.05 Credit Reporting...............................................31
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.........................................31
Section 5.02 Annual Audit Report............................................32
Section 5.03 Annual Officer's Certificate...................................32
ARTICLE VI.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer.....33
Section 6.02 Remedies for Breach of Representations and Warranties
of the Servicer..............................................34
Section 6.03 Additional Indemnification by the Servicer;
Third Party Claims...........................................35
ARTICLE VII.
THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer........................35
Section 7.02 Limitation on Liability of the Servicer and Others.............36
Section 7.03 Limitation on Resignation and Assignment by the Servicer.......36
ARTICLE VIII.
TERMINATION
Section 8.01 Termination for Cause..........................................37
Section 8.02 Termination Without Cause......................................39
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer......................................40
Section 9.02 Costs..........................................................42
Section 9.03 Notices........................................................42
Section 9.04 Severability Clause............................................43
Section 9.05 No Personal Solicitation.......................................43
Section 9.06 Counterparts...................................................44
Section 9.07 Place of Delivery and Governing Law............................44
Section 9.08 Further Agreements.............................................44
Section 9.09 Intention of the Parties.......................................44
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement......44
Section 9.11 Assignment by Holdings.........................................44
Section 9.12 Amendment......................................................45
Section 9.13 Waivers........................................................45
Section 9.14 Exhibits.......................................................45
Section 9.15 Intended Third Party Beneficiary...............................45
Section 9.16 General Interpretive Principles................................45
Section 9.17 Reproduction of Documents......................................46
Section 9.18 Inspection Rights. ............................................46
EXHIBITS & SCHEDULES
EXHIBIT A Mortgage Loan Schedule........................................A-1
EXHIBIT B Custodial Account Letter Agreement............................B-1
EXHIBIT C Escrow Account Letter Agreement...............................C-1
EXHIBIT D Trust Agreement...............................................D-1
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the 1st
day of February, 2001, by and between XXXXXX BROTHERS HOLDINGS INC., a
Delaware corporation ("Holdings"), and OPTION ONE MORTGAGE CORPORATION, a
California corporation (the "Servicer"), recites and provides as follows:
RECITAL
WHEREAS, the Servicer and Xxxxxx Brothers Bank, FSB (the "Bank") are
parties to an Amended and Restated Flow Interim Servicing Agreement, dated as
of May 1, 2000, for Fixed and Adjustable Rate Mortgage Loans (the "Bank
5/1/2000 Amended Interim Agreement"), and a Flow Interim Servicing Agreement,
dated as of May 1, 2000, for Fixed and Adjustable Rate Mortgage Loans (Group
LB-2000) (the "Bank 5/1/2000 Flow Interim Agreement" and together with the
Bank 5/1/2000 Amended Interim Agreement, the "Bank Servicing Agreements"),
pursuant to which the Servicer services certain residential adjustable and
fixed rate mortgage loans for the Bank;
WHEREAS, the Servicer and Xxxxxx Capital, a division of Holdings, are
parties to a Flow Interim Servicing Agreement, dated as of May 1, 2000, for
Fixed and Adjustable Rate Mortgage Loans (Group LC-2000) (the "LC Servicing
Agreement") pursuant to which the Servicer services certain residential
adjustable and fixed rate mortgage loans for Xxxxxx Capital;
WHEREAS, pursuant to an Assignment, Assumption and Recognition Agreement,
dated as of March 8, 2001, the Bank has assigned all of its rights, title and
interest in and to the Bank Servicing Agreements with respect to certain
Serviced Mortgage Loans (as defined below) serviced thereunder and delegated
all of its obligations under the Bank Servicing Agreements with respect to
such Serviced Mortgage Loans to Holdings, and Holdings has accepted such
assignment and delegation;
WHEREAS, Holdings has conveyed certain of the Mortgage Loans serviced
under the Bank Servicing Agreements and the LC Servicing Agreement (as
identified on Schedule I hereto) (hereafter, the "Serviced Mortgage Loans") on
a servicing-retained basis to IBF Special Purpose Corporation VII ("IBF"),
which in turn has conveyed the Serviced Mortgage Loans to Structured Asset
Securities Corporation (the "Depositor"), and the Depositor has in turn
conveyed the Serviced Mortgage Loans to Xxxxx Fargo Bank Minnesota, National
Association, as trustee (the "Trustee") under a trust agreement dated as of
February 1, 2001 (the "Trust Agreement") between the Trustee and the
Depositor, a copy of which is attached hereto as Exhibit D;
WHEREAS, Holdings desires that the Servicer service the Serviced Mortgage
Loans pursuant to this Agreement, and the Servicer has agreed to do so,
subject to the right of Holdings, with the prior written consent of IBF, to
terminate the rights and obligations of the Servicer hereunder;
WHEREAS, Holdings and the Servicer desire to consolidate under this
Agreement the servicing of the Serviced Mortgage Loans currently serviced
under the Bank Servicing Agreements and the LC Servicing Agreement such that
the provisions of this Agreement (and not the Bank Servicing Agreements and
the LC Servicing Agreement) will govern the Serviced Mortgage Loans for so
long as the Serviced Mortgage Loans remain subject to the provisions of the
Trust Agreement;
WHEREAS, Holdings and the Servicer intend that the Trustee be an intended
third party beneficiary of this Agreement;
WHEREAS, Holdings and the Servicer acknowledge and agree that Holdings
will assign all of its rights and delegate all of its obligations hereunder
(excluding Holdings' rights and obligations as owner of the servicing rights
relating to the Mortgage Loans) to the Trustee, and that each reference herein
to Holdings is intended, unless otherwise specified, to mean Holdings or the
Trustee, as assignee, whichever is the owner of the Mortgage Loans from time
to time.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Holdings and the Servicer hereby agree as
follows:
ARTICLE I.
DEFINITIONS
The following terms are defined as follows (except as otherwise agreed in
writing by the parties):
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices that prudent mortgage lending institutions would
employ in servicing their own portfolio of mortgage loans of the same type as
the Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located.
Adjustable Rate Mortgage Loan: A Mortgage Loan serviced pursuant to this
Agreement under which the Mortgage Interest Rate is adjusted from time to time
in accordance with the terms and provisions of the related Mortgage Note.
Adverse REMIC Event: As defined in Article X of the Trust Agreement.
Advancing Person: As defined in Section 4.03 hereof.
Agreement: This Servicing Agreement and all amendments hereof and
supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans, other than
the Option One Servicing Fee, the Holdings Remittance Amount and Prepayment
Penalty Amounts, including but not limited to late charges, fees received with
respect to checks or bank drafts returned by the related bank for
non-sufficient funds, assumption fees, optional insurance, administrative
fees, any Net Prepayment Interest Excess Amount attributable to Principal
Prepayments in full and all other incidental fees and charges.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
transfer of the Mortgage to the party indicated therein, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction, if permitted by law.
Balloon Mortgage Loan: Any Mortgage Loan that by its original terms or by
virtue of any modification provides for an amortization schedule extending
beyond its originally scheduled Maturity Date.
Bank: As defined in the first RECITAL of this Agreement.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking and savings and loan institutions in the States of
California, New York, Commonwealth of Pennsylvania, North Carolina and
Minnesota are authorized or obligated by law or executive order to be closed.
Certificates: Any or all of the Certificates issued pursuant to the Trust
Agreement.
Closing Date: March 8, 2001.
Code: The Internal Revenue Code of 1986, as it may be amended from time
to time or any successor statute thereto, and applicable U.S. Department of
the Treasury regulations issued pursuant thereto.
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan documents.
Conventional Loan: A conventional residential first or second lien fixed
or adjustable rate Mortgage Loan that is neither FHA insured nor VA
guaranteed.
Costs: For any Person, any claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses of such Person.
Custodial Account: The separate account or accounts created and
maintained by the Servicer pursuant to Section 3.03.
Custodial Agreement: Each custodial agreement relating to custody of
certain of the Mortgage Loans (as identified in such agreement), among the
Custodian and the Trustee and acknowledged by the Servicer, dated as of
February 1, 2001.
Custodian: Each of The Chase Manhattan Bank (successor by merger with
Chase Bank of Texas, National Association), US Bank Trust National Association
and Xxxxx Fargo Bank Minnesota, National Association pursuant to the related
Custodial Agreement (or, in the case of Xxxxx Fargo Bank, Minnesota, National
Association, pursuant to the provisions of the Trust Agreement), and any
successor thereto. Each such Custodial Agreement will identify by schedule the
Serviced Mortgage Loans covered under such agreement.
Determination Date: The last day (or if such day is not a Business Day,
the Business Day immediately following such last day) of the Due Period
immediately preceding the related Remittance Date.
Depositor: Structured Asset Securities Corporation or any successor in
interest.
Distribution Date: The 25th day of each month (or if such day is not a
Business Day) the next succeeding Business Day.
Due Date: The day of the calendar month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace. With respect to the
Mortgage Loans for which payment from the Mortgagor is due on a day other than
the first day of the calendar month, such Mortgage Loans will be treated as if
the Monthly Payment is due on the first day of the immediately succeeding
month.
Due Period: With respect to each Remittance Date, the period commencing
on the second day of the month immediately preceding the month of the
Remittance Date and ending on the first day of the month of the Remittance
Date.
Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than
the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States of America or any
agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America,
including Federal Housing Administration debentures, but excluding any of such
securities whose terms do not provide for a payment of a fixed dollar amount
upon maturity or call for redemption ("Direct Obligations") and FHLMC senior
debt obligations;
(ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution or
trust company (including U.S. subsidiaries of foreign depositories and the
Trustee or any agent of the Trustee, acting in its respective commercial
capacity) incorporated or organized under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal or state banking authorities, so long as at the time of investment or
the contractual commitment providing for such investment the commercial paper
or other short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company which is
the principal subsidiary of a holding company, the commercial paper or other
short-term debt or deposit obligations of such holding company or deposit
institution, as the case may be) have been rated by each Rating Agency in its
highest short-term rating category or one of its two highest long-term rating
categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA or FHLMC with any registered broker/dealer
subject to Securities Investors' Protection Corporation jurisdiction or any
commercial bank insured by the FDIC, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed obligation rated by each Rating Agency
in its highest short-term rating category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which have a credit rating from each Rating Agency, at the time
of investment or the contractual commitment providing for such investment, at
least equal to one of the two highest long-term credit rating categories of
each Rating Agency; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Custodial
Account to exceed 20% of the aggregate principal amount of all Eligible
Investments in the Custodial Account; provided, further, that such securities
will not be Eligible Investments if they are published as being under review
with negative implications from either Rating Agency;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 180 days after the date of issuance thereof)
rated by each Rating Agency in its highest short-term rating category;
(vi) a Qualified GIC (as defined in the Trust Agreement);
(vii) certificates or receipts representing direct ownership interests in
future interest or principal payments on obligations of the United States of
America or its agencies or instrumentalities (which obligations are backed by
the full faith and credit of the United States of America) held by a custodian
in safekeeping on behalf of the holders of such receipts; and
(viii) any other demand, money market, common trust fund or time deposit
or obligation, or interest-bearing or other security or investment, (A) rated
in the highest rating category by each Rating Agency or (B) that would not
adversely affect the then current rating by either Rating Agency of any of the
Certificates. Such investments in this subsection (viii) may include money
market mutual funds or common trust funds, including any fund for which the
Trustee, or an affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (x) the Trustee, or an affiliate thereof charges and
collects fees and expenses from such funds for services rendered, (y) the
Trustee, or an affiliate thereof charges and collects fees and expenses for
services rendered pursuant to this Agreement, and (z) services performed for
such funds and pursuant to this Agreement may converge at any time; provided,
however, that no such instrument shall be an Eligible Investment if such
instrument evidences either (i) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (ii) both principal
and interest payments derived from obligations underlying such instrument and
the principal and interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations.
Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with the FHLMC Guide or FNMA Guide.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 3.05.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Event of Default: Any of the events which may result in a termination for
cause set forth in Section 8.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within HUD or any
successor thereto and including the Federal Housing Commissioner and the
Secretary of HUD where appropriate under the FHA Regulation.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
FHLMC Guide: The FHLMC Selling/Servicing Guide and all amendments or
additions thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer in
accordance with the FHLMC Guide or FNMA Guide.
Fixed Rate Mortgage Loan: Any individual Mortgage Loan serviced pursuant
to this Agreement as to which the Mortgage Interest Rate set forth in the
Mortgage Note is fixed for the term of such Mortgage Loan.
Final Recovery Determination: With respect to any defaulted Mortgage Loan
or any REO Property (other than any Mortgage Loan or REO Property repurchased
from the Trust), a determination made by the Servicer that all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries which the
Servicer, in its reasonable good faith judgment, expect to be finally
recoverable in respect thereof have been so recovered.
Fitch: Fitch, Inc., or any successor in interest.
FNMA: The Federal National Mortgage Association, or any successor
thereto.
FNMA Guide: The FNMA Selling/Servicing Guide and all amendments or
additions thereto.
General Servicing Fee: With respect to each Due Period and any Mortgage
Loan, an amount equal to one-twelfth the product of (i) the General Servicing
Fee Rate and (ii) the outstanding principal balance of such Mortgage Loan. The
obligation of the Trustee to pay the General Servicing Fee is limited to, and
the General Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds to
the extent permitted by Section 3.02 of this Agreement) of such Monthly
Payment collected by the Servicer, or as otherwise provided under this
Agreement.
General Servicing Fee Rate: 0.50% per annum.
GNMA: The Government National Mortgage Association, or any successor
thereto.
Holdings: Xxxxxx Brothers Holdings Inc. and its successors or assigns.
Holdings Remittance Amount: With respect to each Due Period and any
Mortgage Loan, an amount equal to one-twelfth the product of (a) the Holdings
Remittance Rate and (ii) the outstanding principal balance of the Mortgage
Loan.
Holdings Remittance Rate: With respect to each Mortgage Loan, the
difference between the General Servicing Fee Rate and the Option One Servicing
Fee Rate.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the
functions thereof with regard to FHA Mortgage Insurance. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof
such as the FHA and GNMA.
IBF: IBF Special Purpose Corporation VII or any successor in interest
thereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property, including proceeds from the MGIC PMI Insurance Policy, to the extent
such proceeds are not to be applied to the restoration or repair of the
related Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing mortgage loans for its
own account, subject to the terms and conditions of the related Mortgage Note
and Mortgage.
Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of
the related REO Property, if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Eligible Mortgage Loan: Any Mortgage Loan that has been designated
by the Servicer as recordable in the name of MERS as nominee for the holder of
the related Mortgage Loan.
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of
MERS, as nominee for the holder from time to time of the related Mortgage
Note.
MGIC: Mortgage Guaranty Insurance Corporation and its successors and
assigns.
MGIC PMI Insurance Policy: The primary mortgage insurance policy (No.
22-400-4-1291) acquired by Holdings for the Trust Fund from MGIC for those
Mortgage Loans included in the Trust Fund with loan-to-value ratios determined
as of the date of origination of greater than 60%, which Mortgage Loans shall
be specifically identified and labeled for the Servicer by certificate number,
Alltel/CPI Loan Number, the percentage of the Mortgage Loan principal balance
insured by MGIC and other applicable insurer information in a separate
schedule to be provided to the Servicer by Holdings within five Business Days
of the Closing Date.
Monthly Advance: With respect to each Remittance Date and each Mortgage
Loan, an amount equal to the Monthly Payment (with the interest portion of
such Monthly Payment adjusted to the Mortgage Loan Remittance Rate) that was
due on the Mortgage Loan, and that was delinquent at the close of business on
the first day of the month in which such Remittance Date occurs, but only to
the extent that such amount is expected, in the reasonable judgment of the
Servicer, to be recoverable from collections or other recoveries in respect of
such Mortgage Loan. To the extent that the Servicer determines that any such
amount is not recoverable from collections or other recoveries in respect of
such Mortgage Loan, such determination shall be evidenced by a certificate of
a Servicing Officer delivered to the Trustee setting forth such determination
and the procedures and considerations of the Servicer forming the basis of
such determination.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc. or any successor in interest.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note net of any Relief Act Reduction.
Mortgage Loan: An individual Mortgage Loan that is the subject of this
Agreement, each Mortgage Loan subject to this Agreement being identified on
the Mortgage Loan Schedule, which Mortgage Loan includes without limitation
the Mortgage Loan documents, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds, and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Trustee, which shall be equal to the
Mortgage Interest Rate minus the General Servicing Fee Rate.
Mortgage Loan Schedule: A schedule of the Mortgage Loans setting forth
information with respect to such Mortgage Loans as agreed to by Holdings and
the Servicer (including, but not limited to, (i) any MERS identification
number (if available) with respect to each MERS Mortgage Loan or MERS Eligible
Mortgage Loan and (ii) a data field indicating whether such Mortgage Loan is
insured under the MGIC PMI Insurance Policy), attached hereto as Exhibit A-1.
Mortgage Note: The original, executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (including any REO Property)
securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Prepayment Interest Excess Amount: With respect to any Due Period the
amount, if any, by which the Prepayment Interest Excess Amount exceeds the
Prepayment Interest Shortfall Amount for such Due Period.
Non-MERS Eligible Mortgage Loan: Any Mortgage Loan other than a MERS
Eligible Mortgage Loan.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the President or a vice president (however denominated), and by the Treasurer,
the Secretary, or one of the assistant treasurers or assistant secretaries of
the Servicer or Holdings, as applicable.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Servicer, reasonably acceptable to Holdings and the Trustee, provided
that any Opinion of Counsel relating to (a) qualification of the Mortgage
Loans in a REMIC or (b) compliance with the REMIC Provisions, must be an
opinion of counsel acceptable to Holdings and the Trustee, who (i) is in fact
independent of Holdings and the Servicer, (ii) does not have any material
direct or indirect financial interest in Holdings or the Servicer or any
affiliate of any such entity and (iii) is not connected with Holdings or the
Servicer as an officer, employee, director or person performing similar
functions.
Option One Servicing Fee: With respect to each Due Period and any
Mortgage Loan, an amount equal to the sum of (a) one-twelfth the product of
(i) the Option One Servicing Fee Rate and (ii) the outstanding principal
balance of such Mortgage Loan. The obligation of the Trustee to pay the Option
One Servicing Fee is limited to, and the Option One Servicing Fee is payable
solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds to the extent permitted by Section 3.02 of
this Agreement) of such Monthly Payment collected by the Servicer, or as
otherwise provided under this Agreement.
Option One Servicing Fee Rate: 0.40% per annum.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance, including
the MGIC PMI Insurance Policy, issued by a Qualified Insurer as required by
this Agreement and the Trust Agreement with respect to certain Mortgage Loans.
Prepayment Interest Excess Amount: With respect to any Principal
Prepayment in full received on the first day of the month of the Remittance
Date, all amounts received in respect of interest on such Principal
Prepayment.
Prepayment Interest Shortfall Amount: With respect to any Mortgage Loan
that was subject to a Principal Prepayment in full or in part during any Due
Period, which Principal Prepayment was applied to such Mortgage Loan prior to
such Mortgage Loan's Due Date in such Due Period, the amount of interest (net
of the related General Servicing Fee) that would have accrued on the amount of
such Principal Prepayment during the period commencing on the date as of which
such Principal Prepayment was applied to such Mortgage Loan and ending on the
day immediately preceding such Due Date, inclusive.
Prepayment Penalty Amount: With respect to any Remittance Date, all
premiums or charges paid by the Mortgagors due to Principal Prepayments
collected by the Servicer during the immediately preceding Due Period.
Prime Rate: The prime rate published from time to time, as published as
the average rate in The Wall Street Journal (Northeast Edition).
Principal Prepayment: Any Mortgagor payment of principal (other than a
Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled
Due Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note.
Qualified Depository: Any of (i) a depository the accounts of which are
insured by the FDIC (to the limits established by such corporation) and the
debt obligations of which are rated P-1 by Moody's (or its equivalent) or
better by each Rating Agency; (ii) the corporate trust department of any bank
the debt obligations of which are rated at least A-1 by S&P and F-1 by Fitch
or its equivalent by any Rating Agency; or (iii) the Bank.
Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by FNMA or FHLMC.
Rating Agency: Each of S&P and Xxxxx'x or their successors. If such
agencies or their successors are no longer in existence, "Rating Agencies"
shall be such nationally recognized statistical rating agencies, or other
comparable Person, designated by Holdings, notice of which designation shall
be given to the Trustee and the Servicer.
Relief Act Reduction: With respect to any Mortgage Loan as to which there
has been a reduction in the amount of the interest collectible thereon as a
result of the application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended, any amount by which interest collectible on such Mortgage
Loan for the Due Date in the related Due Period is less than the interest
accrued thereon for the applicable one-month period at the Mortgage Interest
Rate without giving effect to such reduction.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any calendar month.
REO Disposition: The final sale or other disposition by the Servicer of
any REO Property on behalf of the Trust Fund.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 3.12.
REO Property: A Mortgaged Property acquired by the Trustee on behalf of
the Trust through foreclosure or by deed in lieu of foreclosure, pursuant to
Section 3.12.
S&P: Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc., or any successor in interest.
Servicer: Option One Mortgage Corporation or its successor in interest or
assigns or any successor to the Servicer under this Agreement as herein
provided.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorneys' fees and disbursements) incurred in the performance by the Servicer
of its servicing obligations, including, but not limited to, the cost of (a)
the preservation, inspection, restoration and protection of the Mortgaged
Property, (b) any enforcement or administrative or judicial proceedings,
including foreclosures, (c) the management and liquidation of the Mortgaged
Property and/or REO Property (including costs incurred in connection with
environmental inspections or other related costs of foreclosure of Mortgaged
Property potentially contaminated by hazardous or toxic substance or wastes in
accordance with Section 3.12 hereof) if the Mortgaged Property is acquired in
satisfaction of the Mortgage, (d) taxes, assessments, water rates, sewer rents
and other charges which are or may become a lien upon the Mortgaged Property,
and PMI Policy premiums and fire and hazard insurance coverage, (e) any losses
sustained by the Servicer with respect to the liquidation of the Mortgaged
Property and (f) compliance with the obligations under applicable Sections of
this Agreement.
Servicing File: The items pertaining to a particular Mortgage Loan
including, but not limited to, the computer files, data disks, books, records,
data tapes, notes, and all additional documents generated as a result of or
utilized in originating and/or servicing each Mortgage Loan, which are held in
trust for the Trustee by the Servicer.
Servicing Officer: Any officer of the Servicer involved in or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished by the Servicer to Trustee (or its
Custodian) upon request, as such list may from time to time be amended.
Transfer Date: The date the Mortgage Loan was posted for servicing on the
Servicer's servicing system.
Trust Agreement: As defined in the fourth RECITAL of this Agreement, a
copy of which agreement is attached as Exhibit D hereto.
Trust Fund: The trust fund established by the Trust Agreement, the assets
of which consist of the Mortgage Loans and any related assets.
Trustee: Xxxxx Fargo Bank Minnesota, National Association, or any
successor in interest, or if any successor trustee or co-trustee shall be
appointed as provided in the Trust Agreement, then such successor trustee or
such co-trustee, as the case may be.
VA: The Veterans Administration, an agency of the United States of
America, or any successor thereto, including the Administration of Veterans
Affairs.
Any capitalized terms used and not defined in this Agreement shall have
the meanings ascribed to such terms in the Trust Agreement.
ARTICLE II.
HOLDING'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files.
Holdings, by execution and delivery of this Agreement, does hereby
contract with the Servicer, subject to the terms of this Agreement, for the
servicing of the Mortgage Loans. On or before the Closing Date, Holdings shall
cause to be delivered the Servicing Files with respect to the Mortgage Loans
listed on the Mortgage Loan Schedule to the Servicer. Each Servicing File
delivered to the Servicer shall be held in trust by the Servicer for the
benefit of the Trustee; provided, however, that the Servicer shall have no
liability for any Servicing Files (or portions thereof) not delivered by
Holdings. The Servicer's possession of any portion of the Mortgage Loan
documents shall be at the will of the Trustee for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to this
Agreement, and such retention and possession by the Servicer shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, and
the contents of the Servicing File shall be vested in the Trustee and the
ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Servicer shall
immediately vest in the Trustee and shall be retained and maintained, in
trust, by the Servicer at the will of the Trustee in such custodial capacity
only. The portion of each Servicing File retained by the Servicer pursuant to
this Agreement shall be segregated from the other books and records of the
Servicer and shall be appropriately marked to clearly reflect the ownership of
the related Mortgage Loan by the Trustee. The Servicer shall release from its
custody the contents of any Servicing File retained by it only in accordance
with this Agreement.
Section 2.02 Books and Records.
(a) Subject to Section 3.01(a) hereof, as soon as practicable after the
Closing Date or the date on which a Qualifying Substitute Mortgage Loan is
delivered pursuant to Section 2.05 of the Trust Agreement, as applicable (but
in no event more than 90 days thereafter except to the extent delays are
caused by MERS or the applicable recording office), the Servicer, at the
expense of Holdings, shall cause the Mortgage or Assignment of Mortgage, as
applicable, with respect to each MERS Eligible Mortgage Loan, to be properly
recorded in the name of MERS in the public recording office in the applicable
jurisdiction, or shall ascertain that such have previously been so recorded.
(b) Subject to Section 3.01(a) hereof, an Assignment of Mortgage in favor
of the Trustee shall be recorded as to each Non-MERS Mortgage Loan unless
instructions to the contrary are delivered to the Servicer, in writing, by the
Trustee. Subject to the preceding sentence, as soon as practicable after the
Closing Date (but in no event more than 90 days thereafter except to the
extent delays are caused by MERS or the applicable recording office), the
Servicer, at the expense of Holdings, shall cause to be properly recorded in
each public recording office where such Non-MERS Eligible Mortgage Loans are
recorded each Assignment of Mortgage.
(c) Additionally, the Servicer shall prepare and execute, at the
direction of the Trustee, any note endorsements relating to any of the
Non-MERS Mortgage Loans.
(d) All rights arising out of the Mortgage Loans shall be vested in the
Trustee, subject to the Servicer's right to service and administer the
Mortgage Loans hereunder in accordance with the terms of this Agreement. All
funds received on or in connection with a Mortgage Loan, other than the
General Servicing Fee and other compensation to which the Servicer is entitled
as set forth herein, including but not limited to in Section 5.01 below, shall
be received and held by the Servicer in trust for the benefit of the Trustee
pursuant to the terms of this Agreement.
(e) Any out-of-pocket costs incurred by the Servicer pursuant to this
Section 2.02 and Section 3.01(a), including (i) a management fee of $0.25 per
Mortgage Loan for tracking, maintaining and managing the MERS recording of the
Mortgage Loans and (ii) any recording or other fees in connection with the
Servicer's obtaining the necessary powers of attorney (and which are specified
herein to be an expense of Holdings), shall be reimbursed to the Servicer by
Holdings within five (5) Business Days of receipt by Holdings of an invoice
for reimbursement.
ARTICLE III.
SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service.
The Servicer, as an independent contractor, shall service and administer
the Mortgage Loans from and after the Closing Date and shall have full power
and authority, acting alone, to do any and all things in connection with such
servicing and administration which the Servicer may deem necessary or
desirable, consistent with the terms of this Agreement and with Accepted
Servicing Practices.
Holdings and the Servicer additionally agree as follows:
(a) The Servicer shall (A) prepare and record or cause to be recorded the
Mortgage or the Assignment of Mortgage, as applicable, with respect to all
MERS Eligible Mortgage Loans, in the name of MERS, or shall ascertain that
such have previously been so recorded; (B) prepare or cause to be prepared all
Assignments of Mortgage with respect to all Non-MERS Eligible Mortgage Loans;
(C) prepare and record or cause to be recorded, subject to Section 2.02(b)
hereof, all Assignments of Mortgage with respect to Non-MERS Mortgage Loans in
the name of the Trustee; (D) pay the recording costs pursuant to Section 2.02
hereof; and/or (E) track such Mortgages and Assignments of Mortgage to ensure
they have been recorded. The Servicer shall be entitled to be paid by Holdings
its out-of-pocket costs for the preparation and recordation of the Mortgages
and Assignments of Mortgage. After the expenses of such recording costs
pursuant to Section 2.02 hereof shall have been paid by the Servicer, the
Servicer shall submit to Holdings a reasonably detailed invoice for
reimbursement of recording costs it incurred hereunder.
(b) If applicable, the Servicer shall, in accordance with the relevant
provisions of the Xxxxxxxx-Xxxxxxxx National Affordable Housing Act of 1990,
as the same may be amended from time to time, and the regulations provided in
accordance with the Real Estate Settlement Procedures Act, provide notice to
the Mortgagor of each Mortgage of the transfer of the servicing thereto to the
Servicer.
(c) The Servicer shall be responsible for the preparation of and costs
associated with notifications to Mortgagors of the assumption of servicing by
the Servicer.
(d) Consistent with the terms of this Agreement, the Servicer may waive
any late payment charge, assumption fee or other fee that may be collected in
the ordinary course of servicing the Mortgage Loans. The Servicer shall not
make any future advances to any Mortgagor under any Mortgage Loan, and (unless
the Mortgagor is in default with respect to the Mortgage Loan or such default
is, in the judgment of the Servicer, reasonably foreseeable) the Servicer
shall not permit any modification of any material term of any Mortgage Loan,
including any modification that would change the Mortgage Interest Rate, defer
or forgive the payment of principal or interest, reduce or increase the
outstanding principal balance (except for actual payments of principal) or
change the final maturity date on such Mortgage Loan. In the event of any such
modification which permits the deferral of interest or principal payments on
any Mortgage Loan, the Servicer shall, on the Business Day immediately
preceding the Remittance Date in any month in which any such principal or
interest payment has been deferred, make a Monthly Advance in accordance with
Section 4.03, in an amount equal to the difference between (a) such month's
principal and one month's interest at the Mortgage Loan Remittance Rate on the
unpaid principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Servicer shall be entitled to reimbursement for such advances
to the same extent as for all other advances made pursuant to Section 4.03.
Without limiting the generality of the foregoing, the Servicer shall continue,
and is hereby authorized and empowered, to execute and deliver on behalf of
itself and the Trustee, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties.
Upon the request of the Servicer, the Trustee shall execute and deliver to the
Servicer within the later of fifteen days from the Closing Date or within
fifteen days of such Servicer request any powers of attorney (one for each
county in which any of the Mortgaged Properties are located) and other
documents, furnished to it by the Servicer and reasonably satisfactory to the
Trustee, necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement.
(e) To the extent consistent with the terms of this Agreement, the
Servicer shall seek to maximize the timely and complete recovery of principal
and interest on the Mortgage Note and may waive (or permit a subservicer to
waive) a Prepayment Penalty Amount without the consent of Holdings and the
Trustee if (i) such waiver relates to a default or a reasonably foreseeable
default of such Mortgage Loan, (ii) enforcement of collection of the
Prepayment Penalty Amount would, in the Servicer's reasonable determination,
result in a violation of applicable state law, or (iii) would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds
taking into account the value of such Prepayment Penalty Amount and the
related Mortgage Loan. If a Prepayment Penalty Amount is waived as permitted
by meeting the standards described in clauses (ii) and (iii) above, or if the
Servicer fails to collect the Prepayment Penalty Amount from the Mortgagor for
any reason other than a waiver described under clause (i) above, the Servicer
will be required to pay the amount of such Prepayment Penalty Amount for the
benefit of the Trust Fund by depositing such amount in the Custodial Account
together with and at the time that the amount prepaid on the related Mortgage
Loan is required to be deposited in the Custodial Account.
Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the Closing Date until the date each Mortgage Loan
ceases to be subject to this Agreement, the Servicer shall proceed diligently
to collect all payments due under each of the Mortgage Loans when the same
shall become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loans and each related Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Section 3.03 Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to the Mortgage Loans separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, titled "in trust for
Xxxxx Fargo Bank Minnesota, National Association, as trustee for ARC 2001-BC1
Trust." The Custodial Account shall be established with a Qualified
Depository. Any funds deposited in the Custodial Account may be invested in
Eligible Investments subject to the provisions of Section 3.11 hereof. Funds
deposited in the Custodial Account may be drawn on by the Servicer in
accordance with Section 3.04 hereof. The creation of any Custodial Account
shall be evidenced by a letter agreement in the form of Exhibit B. A copy of
such certification or letter agreement shall be furnished to the Trustee and,
upon request, to any subsequent owner of the Mortgage Loans.
The Servicer shall deposit in the Custodial Account on a daily basis, and
retain therein, the following collections received by the Servicer and
payments made by the Servicer after the Closing Date:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
(including Prepayment Penalty Amounts) adjusted to the Mortgage Loan
Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds (other than any amounts immediately
applied to the restoration or repair of the Mortgaged Property or immediately
released to the Mortgagor);
(v) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor;
(vi) any Prepayment Interest Shortfall Amount required to be paid by
the Servicer;
(vii) all Monthly Advances made by the Servicer or an Advancing
Person pursuant to Section 4.03;
(viii) any amounts required to be deposited by the Servicer in
connection with the deductible clause in any blanket hazard insurance policy;
(ix) any amounts received with respect to or related to any REO
Property or REO Disposition Proceeds;
(x) any amounts required to be deposited pursuant to Section 3.11 in
connection with any losses realized on Eligible Investments with respect to
funds held in the Custodial Accounts;
(xi) any amounts received by it under any PMI Policy; and
(xii) any other amount required hereunder to be deposited by the
Servicer in the Custodial Account.
The foregoing requirements for deposit into the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing payments in the nature of (i) late payment charges
and insufficient fund charges, (ii) assumption fees, (iii) other Ancillary
Income and (iv) the Option One Servicing Fee need not be deposited by the
Servicer into the Custodial Account.
Any interest paid on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.04. Additionally, any other benefit
derived from the Custodial Account associated with the receipt, disbursement
and accumulation of principal, interest, taxes, hazard insurance, mortgage
insurance, etc. shall accrue for the benefit of the Servicer.
Section 3.04 Permitted Withdrawals From Custodial Account.
The Servicer shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to pay any outstanding premiums under the MGIC PMI Insurance
Policy and to make payments to the Trustee in the amounts and in the manner
provided for in Section 4.01;
(ii) to pay the Holdings Remittance Amount to Holdings;
(iii) in the event the Servicer has elected not to retain the Option
One Servicing Fee out of any Mortgagor payments on account of interest or
other recovery of interest with respect to a particular Mortgage Loan
(including late collections of interest on such Mortgage Loan, or interest
portions of Insurance Proceeds or Liquidation Proceeds) prior to the deposit
of such Mortgagor payment or recovery in the Custodial Account, to pay to
itself the related Option One Servicing Fee from all such Mortgagor payments
on account of interest or other such recovery for interest with respect to
that Mortgage Loan;
(iv) to pay itself investment earnings on funds deposited in the
Custodial Account;
(v) to clear and terminate the Custodial Account upon the
termination of this Agreement;
(vi) to transfer funds to another Qualified Depository in accordance
with Section 3.11 hereof;
(vii) to invest funds in certain Eligible Investments in accordance
with Section 3.11 hereof;
(viii) to reimburse itself to the extent of funds held in the
Custodial Account for Monthly Advances of the Servicer's funds made pursuant
to Section 4.03. The Servicer's right to reimburse itself pursuant to this
subclause (viii) with respect to any Mortgage Loan shall be limited to amounts
received on or in respect of the related Mortgage Loan which represent late
recoveries of payments of principal or interest with respect to which a
Monthly Advance was made, it being understood in the case of any such
reimbursement, that the Servicer's right thereto shall be prior to the rights
of the Trust Fund; provided, however, that following the final liquidation of
a Mortgage Loan, the Servicer may reimburse itself for previously unreimbused
Monthly Advances in excess of Liquidation Proceeds or Insurance Proceeds with
respect to such Mortgage Loan from any funds in the Custodial Account, it
being understood, in the case of any such reimbursement, that the Servicer's
right thereto shall be prior to the rights of the Trust Fund. The Servicer may
recover at any time from amounts on deposit in the Custodial Account the
amount of any Monthly Advances that the Servicer deems nonrecoverable or that
remain unreimbursed to the Servicer from related Liquidation Proceeds after
the final liquidation of the Mortgage Loan. In addition, the Servicer may, at
any time, withdraw from the Custodial Account funds that were not included in
the Total Distribution Amount (as defined in the Trust Agreement) for the
preceding Distribution Date to reimburse itself for Monthly Advances
previously made by the Servicer;
(ix) to reimburse itself for any unreimbursed Servicing Advances the
Servicer is obligated to advance pursuant to any related provision of this
Agreement, and for any unpaid Option One Servicing Fee, the Servicer's right
to reimburse itself pursuant to this subclause (ix) with respect to any
Mortgage Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds and other amounts
received in respect of the related REO Property, and such other amounts as may
be collected by the Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of any such
reimbursement, the Servicer's right thereto shall be prior to the rights of
the Trust Fund;
(x) to reimburse the Servicer for expenses incurred by, and
reimbursable to, the Servicer pursuant to Section 6.03 up to amount equal to
$500,000 in any calendar year but only to extent such amounts are determined
to be reimbursable to the Servicer by the Trust Fund pursuant to Section 6.03;
(xi) to reimburse itself for expenses incurred or reimbursable to
the Servicer pursuant to Section 3.12 to the extent not previously withdrawn
under clause (ix) of this Section 3.04;
(xii) to withdraw funds necessary for the operation, management and
maintenance of any REO related property to the extent not previously
reimbursed under clause (ix) of this Section 3.04; and
(xiii) to withdraw any funds deposited to the Custodial Account in
error.
Section 3.05 Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Escrow Accounts, in the form of time deposit or demand accounts,
titled "in trust for Xxxxx Fargo Bank Minnesota, National Association, as
Trustee for ARC 2001-BC1 Trust." The Escrow Accounts shall be established with
a Qualified Depository in a manner that shall provide maximum available
insurance thereunder. Funds deposited in the Escrow Account may be drawn on by
the Servicer in accordance with Section 3.06. The creation of any Escrow
Account shall be evidenced by a letter agreement in the form of Exhibit C. A
copy of such certification or letter agreement shall be furnished to the
Trustee and, upon request, to any subsequent owner of the Mortgage Loans.
The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds that are to be applied to the restoration or repair of any Mortgaged
Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06. The Servicer shall retain any interest paid on funds deposited
in the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. Additionally, any
other benefit derived from the Escrow Account associated with the receipt,
disbursement and accumulation of principal, interest, taxes, hazard insurance,
mortgage insurance, etc. shall accrue to the Servicer. To the extent required
by law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section 3.06 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
(i) to effect payments of ground rents, taxes, assessments, water
rates, sewer rents, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for the
related Mortgage;
(ii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
(iii) for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;
(iv) for application to restore or repair the Mortgaged Property in
accordance with the FHLMC or FNMA Guide;
(v) to pay to the Servicer, or any Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account; and
(vi) to reimburse itself for any Servicing Advances made with
respect to Escrow Payments for a Mortgage Loan or the related Mortgaged
Properties, but solely from amounts received on the related Mortgage Loan
which represent late collections of Escrow Payments thereunder;
(vii) to withdraw any funds deposited into the Escrow Account in
error; and
(viii) to clear and terminate the Escrow Account on the termination
of this Agreement.
The Servicer will be responsible for the administration of the Escrow
Accounts and will be obligated to make Servicing Advances to the Escrow
Account in respect of its obligations under this Section 3.06, reimbursable
from the Escrow Accounts or Custodial Account to the extent not collected from
the related Mortgagor, anything to the contrary notwithstanding, when and as
necessary to avoid the lapse of insurance coverage on the Mortgaged Property,
or which the Servicer knows, or in the exercise of the required standard of
care of the Servicer hereunder should know, is necessary to avoid the loss of
the Mortgaged Property due to a tax sale or the foreclosure as a result of a
tax lien. If any such payment has not been made and the Servicer receives
notice of a tax lien with respect to the Mortgage being imposed, the Servicer
will, within ten (10) Business Days of such notice, advance or cause to be
advanced funds necessary to discharge such lien on the Mortgaged Property.
Section 3.07 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Trustee prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to
be applied to the restoration or repair of the Mortgaged Property if such
release is in accordance with Accepted Servicing Practices. At a minimum, with
respect to claims of $5,000 or more, the Servicer shall comply with the
following conditions in connection with any such release of Insurance Proceeds
or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens;
(iii) the Servicer shall verify that the Mortgage Loan is not 60 or
more days delinquent; and
(iv) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
With respect to claims of less than $5,000, the Servicer shall comply
with the following conditions in connection with any such release of Insurance
Proceeds or Condemnation Proceeds:
(i) the related Mortgagor shall provide an affidavit verifying the
completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Servicer shall verify the total amount of the claim with
the applicable insurance company; and
(iii) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account. If the
Trustee is named as an additional loss payee, the Servicer is hereby empowered
to endorse any loss draft issued in respect of such a claim in the name of the
Trustee.
Section 3.08 Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall keep in force during the term of this Agreement a
Fidelity Bond and Errors and Omissions Insurance the minimum coverage of which
shall be at least equal to the coverage required by FNMA in the FNMA Guide or
by FHLMC in the FHLMC Guide. Such Fidelity Bond and Errors and Omissions
Insurance shall be maintained with recognized insurers and shall be in such
form and amount as would permit the Servicer to be qualified as a FHLMC
servicer. The Servicer shall be deemed to have complied with this provision if
an affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. The Servicer shall
furnish to the Trustee a copy of each such bond and insurance policy if the
Trustee so requests.
Section 3.09 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment
adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The Servicer shall
execute and deliver any and all necessary notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and Monthly Payment adjustments. The Servicer shall
promptly, upon written request therefor, deliver to the Trustee such
notifications and any additional applicable data regarding such adjustments
and the methods used to calculate and implement such adjustments. Upon the
discovery by the Servicer or the receipt of notice from the Trustee that the
Servicer has failed to adjust a Mortgage Interest Rate or Monthly Payment in
accordance with the terms of the related Mortgage Note, the Servicer shall
immediately deposit in the Custodial Account from its own funds the amount of
any interest loss or deferral caused thereby.
Section 3.10 Payment of Taxes, Insurance and Other Charges. With respect
to each Mortgage Loan, the Servicer shall maintain accurate records reflecting
the status of ground rents, taxes, assessments, water rates and other charges
which are or may become a lien upon the Mortgaged Property and the status of
fire and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date and
at a time appropriate for securing maximum discounts allowable, employing for
such purpose deposits of the Mortgagor in the Escrow Account which shall have
been estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage or applicable
regulations. The Servicer assumes full responsibility for the payment of all
such bills and shall effect payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments. To the extent that the Mortgage does not provide for Escrow
Payments, the Servicer shall use reasonable efforts consistent with Accepted
Servicing Practices to determine that any such payments are made by the
Mortgagor at the time they first become due and shall ensure that the
Mortgaged Property is not subjected to a tax lien as a result of nonpayment
and that such Mortgaged Property is not left uninsured.
Section 3.11 Protection of Accounts.
The Servicer may transfer any Custodial Account or any Escrow Account to
a different Qualified Depository from time to time. The Servicer shall give
notice to the Trustee of the location of the Custodial Account and Escrow
Account maintained by it when established and prior to any change thereof.
The Servicer shall bear any expenses, losses or damages sustained by the
Trustee if the Custodial Account and/or the Escrow Account are not demand
deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may at
the option of the Servicer be invested in Eligible Investments; provided that
in the event that amounts on deposit in the Custodial Account or the Escrow
Account exceed the amount fully insured by the FDIC (the "Insured Amount") the
Servicer shall be obligated to invest the excess amount over the Insured
Amount in Eligible Investments on the same Business Day as such excess amount
becomes present in the Custodial Account or the Escrow Account. Any such
Eligible Investment shall mature no later than the Business Day immediately
preceding the related Remittance Date, provided, however, that if such
Eligible Investment is an obligation of a Qualified Depository (other than the
Servicer) that maintains the Custodial Account or the Escrow Account, then
such Eligible Investment may mature on the related Remittance Date. Any such
Eligible Investment shall be made in the name of the Servicer in trust for the
benefit of the Trustee. All income on or gain realized from any such Eligible
Investment shall be for the benefit of the Servicer and may be withdrawn at
any time by the Servicer. Any losses incurred in respect of any such
investment shall be deposited in the Custodial Account or the Escrow Account,
by the Servicer out of its own funds immediately as realized.
Section 3.12 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Trustee (or MERS, as applicable), or in the
event the Trustee is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such
Person or Persons as shall be consistent with an Opinion of Counsel obtained
by the Servicer from any attorney duly licensed to practice law in the state
where the REO Property is located. The Person or Persons holding such title
other than the Trustee shall acknowledge in writing that such title is being
held as nominee for the Trustee.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Trustee solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt
to sell the same (and may temporarily rent the same for a period not greater
than one year, except as otherwise provided below) on such terms and
conditions as the Servicer deems to be in the best interest of the Trustee.
Notwithstanding anything to the contrary contained in this Section 3.12,
in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event the Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Trustee otherwise requests, an environmental inspection or review of
such Mortgaged Property to be conducted by a qualified inspector shall be
arranged by the Servicer. Upon completion of the inspection, the Servicer
shall provide the Trustee with a written report of such environmental
inspection. In the event that the environmental inspection report indicates
that the Mortgaged Property is contaminated by hazardous or toxic substances
or wastes, the Servicer shall not proceed with foreclosure or acceptance of a
deed in lieu of foreclosure. In the event that the environmental inspection
report is inconclusive as to the whether or not the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, the Servicer shall
not, without the prior approval of the Trustee, proceed with foreclosure or
acceptance of a deed in lieu of foreclosure. In such instance, the Trustee
shall be deemed to have approved such foreclosure or acceptance of a deed in
lieu of foreclosure unless either of them notifies the Servicer in writing,
within five (5) days after its receipt of written notice of the proposed
foreclosure or deed in lieu of foreclosure from the Servicer, that it
disapproves of the related foreclosure or acceptance of a deed in lieu of
foreclosure. The Servicer shall be reimbursed for all Servicing Advances made
pursuant to this paragraph with respect to the related Mortgaged Property from
the Custodial Account.
In the event that the Trust Fund acquires any REO Property in connection
with a default or imminent default on a Mortgage Loan, the Servicer shall
dispose of such REO Property not later than the end of the third taxable year
after the year of its acquisition by the Trust Fund unless the Servicer has
applied for and received a grant of extension from the Internal Revenue
Service to the effect that, under the REMIC Provisions and any relevant
proposed legislation and under applicable state law, the applicable REMIC may
hold REO Property for a longer period without adversely affecting the REMIC
status of such REMIC or causing the imposition of a federal or state tax upon
such REMIC. If the Servicer has received such an extension, then the Servicer
shall continue to attempt to sell the REO Property for its fair market value
for such period longer than three years as such extension permits (the
"Extended Period"). If the Servicer has not received such an extension and the
Servicer is unable to sell the REO Property within the period ending 3 months
before the end of such third taxable year after its acquisition by the Trust
Fund or if the Servicer has received such an extension, and the Servicer is
unable to sell the REO Property within the period ending three months before
the close of the Extended Period, the Servicer shall, before the end of the
three year period or the Extended Period, as applicable, (i) purchase such REO
Property at a price equal to the REO Property's fair market value or (ii)
auction the REO Property to the highest bidder (which may be the Servicer) in
an auction reasonably designed to produce a fair price prior to the expiration
of the three-year period or the Extended Period, as the case may be. The
Trustee shall sign any document or take any other action reasonably requested
by the Servicer which would enable the Servicer, on behalf of the Trust Fund,
to request such grant of extension.
Notwithstanding any other provisions of this Agreement, no REO Property
acquired by the Trust Fund shall be rented (or allowed to continue to be
rented) or otherwise used by or on behalf of the Trust Fund in such a manner
or pursuant to any terms that would: (i) cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code; or (ii) subject any Trust REMIC to the imposition of any federal
income taxes on the income earned from such REO Property, including any taxes
imposed by reason of Sections 860F or 860G(c) of the Code, unless the Servicer
has agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
lesser of (i) maximum insurable value of the improvements which are a part of
such property, and (ii) the outstanding principal balance of the related
Mortgage Loan at the time it became an REO Property and, to the extent
required and available under the Flood Disaster Protection Act of 1973, as
amended, flood insurance in the amount required above.
The disposition of REO Property shall be carried out by the Servicer at
such price, and upon such terms and conditions, as the Servicer deems to be in
the best interests of the Trust Fund. The proceeds of sale of the REO Property
shall be promptly deposited in the Custodial Account. After the expenses of
such disposition shall have been paid, the Servicer shall reimburse itself
pursuant to Section 3.04 hereof for any Servicing Advances it incurred with
respect to such REO Property.
The Servicer shall withdraw from the Custodial Account funds necessary
for the proper operation, management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to the FHLMC
Guides. The Servicer shall make monthly distributions on each Remittance Date
to the Trustee of the net cash flow from the REO Property (which shall equal
the revenues from such REO Property net of the expenses described in this
Section 3.12 and of any reserves reasonably required from time to time to be
maintained to satisfy anticipated liabilities for such expenses).
Section 3.13 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 4.02, the
Servicer shall furnish by electronic transmission to the Trustee on or before
the Remittance Date each month a statement with respect to any REO Property
covering the operation of such REO Property for the previous month and the
Servicer's efforts in connection with the sale of such REO Property and any
rental of such REO Property incidental to the sale thereof for the previous
month. That statement shall be accompanied by such other information as the
Trustee shall reasonably request.
Section 3.14 MERS.
(a) The Servicer shall take such actions as are necessary to cause the
Trustee to be clearly identified as the owner of each MERS Mortgage Loan on
the records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS.
(b) The Servicer shall maintain in good standing its membership in MERS.
In addition, the Servicer shall comply with all rules, policies and procedures
of MERS, including the Rules of Membership, as amended, and the MERS
Procedures Manual, as amended.
(c) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall promptly notify MERS as to any transfer of beneficial ownership
or release of any security interest in such Mortgage Loans.
(d) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall notify MERS as to any transfer of servicing pursuant to Section
3.15 or Section 9.01 within 10 Business Days of such transfer of servicing.
The Servicer shall cooperate with the Trustee and any successor Servicer to
the extent necessary to ensure that such transfer of servicing is
appropriately reflected on the MERS system.
Section 3.15 Servicing and Administration of the MGIC PMI Insurance
Policy.
(a) The Servicer shall take all such actions on behalf of the Trustee as
are necessary to service, maintain and administer the MGIC PMI Insurance
Policy and to perform and enforce the rights under such policy, which actions
shall conform to the standards of an institution prudently administering such
policy for its own account. Except as expressly set forth herein, the Servicer
shall have full authority on behalf of the Trust to do anything it reasonably
deems appropriate or desirable in connection with the servicing, maintenance
and administration of the MGIC PMI Insurance Policy. The Servicer shall file
on a timely basis all insured claims under the MGIC PMI Insurance Policy and
collect from MGIC all Insurance Proceeds due to the Trustee under such policy.
The Servicer shall not take, or permit any subservicer to modify or assume a
Mortgage Loan covered by the MGIC PMI Policy or take any other action with
respect to such Mortgage Loan which would result in non-coverage under the
MGIC PMI Insurance Policy of any loss which, but for the actions of the
Servicer or subservicer, would have been covered thereunder. To the extent
coverage is available, the Servicer shall keep or cause to be kept in full
force and effect the MGIC PMI Insurance Policy for as long as any Certificates
are outstanding. The Servicer shall cooperate with MGIC and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Servicer to which the Servicer has access with respect to
any Mortgage Loan; provided, however, notwithstanding anything to the contrary
contained in the MGIC PMI Insurance Policy, the Servicer shall not be required
to submit any reports to MGIC until a reporting date that is at least 15 days
after the Servicer has received sufficient loan level detail information from
Holdings to appropriately code its servicing system in accordance with MGIC
requirements.
(b) The Servicer shall deposit into the Custodial Account pursuant to
Section 3.03(xi) hereof all Insurance Proceeds received from MGIC under the
terms of the MGIC PMI Insurance Policy. The Servicer shall pay to MGIC
pursuant to Section 3.04(i) hereof the monthly insurance premium due to MGIC
in accordance with the terms of such policy.
(c) Notwithstanding the provisions of (a) and (b) above, the Servicer
shall not take any action in regard to the MGIC PMI Insurance Policy
inconsistent with the interests of the Trustee or the Certificateholders or
with the rights and interests of the Trustee or the Certificateholders under
this Agreement;
(d) The Trustee shall furnish the Servicer with any powers of attorney
and other documents (within fifteen (15) days upon request from the Servicer)
in form as provided to it necessary or appropriate to enable the Servicer to
service and administer the MGIC PMI Insurance Policy; provided, however, that
the Trustee shall not be liable for the actions of the Servicer under such
powers of attorney.
Section 3.16 Maintenance of Hazard Insurance. The Servicer shall cause to
be maintained for each Mortgage Loan hazard insurance such that all buildings
upon the Mortgaged Property are insured by a generally acceptable insurer
against loss by fire, hazards of extended coverage and such other hazards as
are customary in the area where the Mortgaged Property is located in an amount
which is at least equal to the lesser of (i) the current principal balance of
such Mortgage Loan and (ii) the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than the amount as
is necessary to avoid the application of any co-insurance clause contained in
the related hazard insurance policy.
Any payments by the Servicer for hazard insurance shall be deemed
Servicing Advances, reimbursable in accordance with Section 3.04(ix), to the
extent not collected from the related Mortgagor. The Servicer will comply in
the performance of this Agreement with all reasonable rules and requirements
of each insurer under any such hazard policies. Any amounts to be collected by
the Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property or amounts to be released to the
Mortgagor subject to the terms and conditions of the related Mortgage and
Mortgage Note) shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 3.04, if received in respect of a Mortgage
Loan. Any cost incurred by the Servicer in maintaining any such insurance
shall not, for the purpose of calculating distributions to Certificateholders,
be added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit. It is
understood and agreed that no earthquake or other additional insurance is to
be required of any Mortgagor 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 Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the Servicer will cause to be maintained a flood insurance
policy in respect thereof. Such flood insurance shall be in an amount equal to
the lesser of (i) the unpaid principal balance of the related Mortgage Loan
and (ii) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program (assuming that
the area in which such Mortgaged Property is located is participating in such
program).
In the event that the Servicer shall obtain and maintain a blanket policy
with an insurer having a General Policy Rating of A:X or better in Best's Key
Rating Guide (or such other rating that is comparable to such rating) 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 two
sentences of this Section 3.16, 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 or REO Property a policy complying with the first two sentences of
this Section 3.16, and there shall have been one or more losses which would
have been covered by such policy, deposit to the Custodial Account from its
own funds the amount not otherwise payable under the blanket policy because of
such deductible clause. In connection with its activities as administrator and
servicer of the Mortgage Loans, the Servicer agrees to prepare and present, on
behalf of itself, the Trustee and the Certificateholders, claims under any
such blanket policy in a timely fashion in accordance with the terms of such
policy.
Section 3.17 Realization Upon Defaulted Mortgage Loans.
(a) The Servicer shall, consistent with Accepted Servicing Practices, to
foreclose upon or otherwise comparably convert the ownership of properties
securing such of the Mortgage Loans (including selling any such Mortgage Loans
other than converting the ownership of the related properties) as come into
and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments. The Servicer shall be responsible
for all costs and expenses incurred by it in any such proceedings; provided,
however, that such costs and expenses will be recoverable as Servicing
Advances by the Servicer as contemplated in Section 3.04. The foregoing is
subject to the provision that, in any case in which Mortgaged Property shall
have suffered damage from an uninsured cause, the Servicer shall not be
required to expend its own funds toward the restoration of such Mortgaged
Property unless in its determination such restoration will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.
(b) If the Servicer determines that it is in the best economic interest
of the Trust and the Certificateholders to sell a Mortgage Loan that is over
90 days delinquent, rather than foreclosing, the Servicer may effect such a
sale. The net proceeds of such sale shall be Liquidation Proceeds.
(c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to unpaid Option
One Servicing Fees; second, to reimburse the Servicer or any sub-servicer for
any related unreimbursed Servicing Advances and Monthly Advances pursuant to
Section 3.04; third, to accrued and unpaid interest on the Mortgage Loan, to
the date of the Final Recovery Determination, or to the Due Date prior to the
Distribution Date on which such amounts are to be distributed if not in
connection with a Final Recovery Determination; and fourth, as a recovery of
principal of the Mortgage Loan. The portion of the recovery so allocated to
any unpaid Option One Servicing Fee shall be reimbursed to the Servicer or any
Sub-Servicer pursuant to Section 3.04.
Section 3.18 Enforcement of Due-On-Sale Clauses; Assumption Agreement.
The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if in its sole business
judgment the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing
so. If the Servicer reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, or if any of the other conditions set forth
in the proviso to the preceding sentence apply, the Servicer will enter into
an assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. The
Servicer is also authorized to enter into a substitution of liability
agreement with such person, pursuant, to which the original Mortgagor is
released from liability and such person is substituted as the Mortgagor and
becomes liable under the Mortgage Note, provided that no such substitution
shall be effective unless such person satisfies the underwriting criteria of
the Servicer and has a credit risk rating at least equal to that of the
original Mortgagor. In connection with any assumption or substitution, the
Servicer shall apply such underwriting standards and follow such practices and
procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. The
Servicer shall not take or enter into any assumption and modification
agreement, however, unless (to the extent practicable in the circumstances) it
shall have received confirmation, in writing, of the continued effectiveness
of any applicable hazard insurance policy. Any fee collected by the Servicer
in respect of an assumption, modification or substitution of liability
agreement shall be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Interest Rate
and the amount of the Monthly Payment) may be amended or modified, except as
otherwise required pursuant to the terms thereof. The Servicer shall notify
the Trustee that any such substitution, modification or assumption agreement
has been completed by forwarding to the Trustee the executed original of such
substitution, modification or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered
a part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for
any reason whatever. For purposes of this Section 3.18, the term "assumption"
is deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
ARTICLE IV.
PAYMENTS TO THE TRUSTEE
Section 4.01 Remittances.
On each Remittance Date, no later than 3:00 P.M. New York City time, the
Servicer shall remit on a scheduled/scheduled basis by wire transfer of
immediately available funds to the Trustee (a) all amounts deposited in the
Custodial Account as of the close of business on the last day of the related
Due Period (net of charges against or withdrawals from the Custodial Account
pursuant to Section 3.04), plus (b) all Monthly Advances, if any, which the
Servicer is obligated to make pursuant to Section 4.03, minus (c) any amounts
attributable to Principal Prepayments, Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds or REO Disposition Proceeds received after the
applicable Due Period, which amounts shall be remitted on the following
Remittance Date, together with any additional interest required to be
deposited in the Custodial Account in connection with such Principal
Prepayment in accordance with Section 3.03(vi), and minus (d) any amounts
attributable to Monthly Payments collected but due on a Due Date or Due Dates
subsequent to the first day of the month in which such Remittance Date occurs,
which amounts shall be remitted on the Remittance Date next succeeding the Due
Date related to such Monthly Payment.
With respect to any remittance received by the Trustee after the second
Business Day following the Business Day on which such payment was due, the
Servicer shall pay to the Trustee interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus two (2) percentage points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall be deposited in the
Custodial Account by the Servicer on the date such late payment is made and
shall cover the period commencing with the day following such Business Day and
ending with the Business Day on which such payment is made, both inclusive.
Such interest shall be remitted along with the distribution payable on the
next succeeding Remittance Date. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment or a waiver of
any Event of Default by the Trustee.
All remittances required to be made to the Trustee shall be made on a
scheduled/scheduled basis to the following wire account or to such other
account as may be specified by the Trustee from time to time:
Xxxxx Fargo Bank Minnesota, National Association
Minneapolis, Minnesota
ABA #: 000-00-000
Account Name: Corporate Trust Clearing
Account Number.: 0000000000
For further credit to: Custodial Account No. 00000000 (ARC 2001-BC1)
Section 4.02 Statements to Trustee.
Not later than the 13th calendar day of March 2001 and the 10th calendar
day of each subsequent month (or if such calendar day is not a Business Day,
the immediately succeeding Business Day), the Servicer shall furnish to the
Trustee (with a copy also provided to IBF in electronic mail form) (a) a
monthly remittance advice in a format mutually acceptable to the Servicer and
the Trustee as to the accompanying remittance and the period ending on the
last day of the preceding Determination Date and (b) all such information
required pursuant to clause (a) above on a magnetic tape or other similar
media reasonably acceptable to the Trustee.
Such monthly remittance advice shall also include on a cumulative and
aggregate basis (i) the amount of claims filed, (ii) the amount of any claim
payments made, (iii) the amount of claims denied and (iv) policies cancelled
with respect to those Serviced Mortgage Loans covered by the MGIC PMI
Insurance Policy or any other provider of primary mortgage insurance purchased
by the Trust; provided, however, notwithstanding anything to the contrary
contained in the MGIC PMI Insurance Policy, the Servicer shall not be required
to submit any reports or tapes to MGIC until a reporting date that is at least
15 days after the Servicer has received sufficient loan level detail
information from the Depositor to appropriately code its servicing system in
accordance with MGIC requirements.
In addition, not more than 60 days after the end of each calendar year,
commencing December 31, 2001, the Servicer shall provide (as such information
becomes reasonably available to the Servicer) the Trustee such information
concerning the Mortgage Loans and annual remittances to the Trustee therefrom
as is necessary for each Certificateholder to prepare its federal income tax
return. Such obligation of the Servicer shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by
the Servicer to the Trustee pursuant to any requirements of the Code as from
time to time are in force. In addition, the Servicer shall provide the Trustee
with such information concerning the Mortgage Loans as is necessary for the
Trustee to prepare the Trust Fund's federal income tax return.
Section 4.03 Monthly Advances by Servicer.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution or both an amount equal to all Monthly
Payments which were due on the Mortgage Loans during the applicable Due Period
and which were delinquent at the close of business on the immediately
preceding Determination Date. Any amounts held for future distribution and so
used shall be replaced by the Servicer by deposit in the Custodial Account on
or before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than remittances to the Trustee required to be
made on such Remittance Date.
The Servicer shall make Monthly Advances through the Distribution Date
immediately preceding the distribution of all Liquidation Proceeds and other
payments or recoveries (including insurance proceeds and condemnation
proceeds) with respect to the related Mortgage Loans.
Notwithstanding the foregoing, no Monthly Advances or Servicing Advances
shall be required to be made by the Servicer if such Monthly Advance or
Servicing Advance could, if made, be, in the Servicer's reasonable judgment,
nonrecoverable. The determination by the Servicer that it has made a
nonrecoverable Monthly Advance or Servicing Advance, or that any proposed
Monthly Advance or Servicing Advance would be a nonrecoverable advance, shall
be evidenced by an Officer's Certificate of the Servicer delivered to the
Depositor and the Trustee.
The Servicer may enter into a facility with any person which provides
that such person (an "Advancing Person") may fund Monthly Advances required
under Section 4.03 and/or Servicing Advances, although no such facility shall
reduce or otherwise affect the Servicer's obligation to fund such Monthly
Advances and/or Servicing Advances. Any Monthly Advances and/or Servicing
Advances made by an Advancing Person shall be reimbursed to the Advancing
Person in the same manner as reimbursements would be made to the Servicer if
such Monthly Advances or Servicing Advance were funded by the Servicer.
Section 4.04 Compensating Interest.
The Servicer shall deposit in the Custodial Account on a daily basis, and
retain therein with respect to each Principal Prepayment, the Prepayment
Interest Shortfall Amount, if any, for the month of such distribution. Such
deposit shall be made from the Servicer's own funds, without reimbursement
therefor up to a maximum amount per month of the Option One Servicing Fee
actually received for such month for the Mortgage Loans. The Servicer shall
not be obligated to pay any Prepayment Interest Shortfall Amount with respect
to a Relief Act Reduction.
Section 4.05 Credit Reporting.
For each Mortgage Loan, in accordance with its current servicing
practices, the Servicer will accurately and fully report its underlying
borrower credit files to each of the following credit repositories or their
successors: Equifax Credit Information Services, Inc., Trans Union, LLC and
Experian Information Solution, Inc., on a monthly basis in a timely manner.
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.
As consideration for servicing the Mortgage Loans subject to this
Agreement, the Servicer shall retain (a) the relevant Option One Servicing Fee
for each Mortgage Loan remaining subject to this Agreement during any month
and (b) Ancillary Income. The Option One Servicing Fee shall be payable
monthly. The Option One Servicing Fees shall be payable solely from payments
of interest in respect of such Mortgage Loan, subject to Section 4.04 hereof,
only at the time of and with respect to those Mortgage Loans for which payment
is in fact made of the entire amount of the Monthly Payment or as otherwise
provided in Section 3.04. The aggregate of the Option One Servicing Fees
payable to the Servicer for any month with respect to the Mortgage Loans shall
be reduced by any Prepayment Interest Shortfall Amount with respect to such
month. In addition, the Servicer shall be entitled to recover unpaid Option
One Servicing Fees out of Insurance Proceeds, Condemnation Proceeds or
Liquidation Proceeds to the extent permitted in Section 3.04 and out of
amounts derived from the operation and sale of an REO Property to the extent
permitted by Section 3.12.
Additional servicing compensation in the form of Ancillary Income shall
be retained by the Servicer only to the extent such fees or charges are
received by the Servicer. The Servicer shall also be entitled pursuant to
Section 3.04 and Section 3.06 to withdraw from the Custodial Account and
Escrow Account, respectively, as additional servicing compensation, interest
or other income earned on deposits therein, subject to Section 3.11
The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled
to reimbursement thereof except as specifically provided for herein.
Section 5.02 Annual Audit Report.
Not more than ninety days after the end of the Servicer's fiscal year
commencing with the fiscal year ending April 30, 2002, Servicer shall, at its
own expense, cause a firm of independent public accountants (who may also
render other services to Servicer), which is a member of the American
Institute of Certified Public Accountants, to furnish to the Depositor and the
Trustee (i) year-end audited (if available) financial statements of the
Servicer and (ii) a statement to the effect that such firm has examined
certain documents and records for the preceding fiscal year (or during the
period from the date of commencement of such servicer's duties hereunder until
the end of such preceding fiscal year in the case of the first such
certificate) and that, on the basis of such examination conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that Servicer's overall
servicing operations have been conducted in compliance with the Uniform Single
Attestation Program for Mortgage Bankers except for such exceptions that, in
the opinion of such firm, the Uniform Single Attestation Program for Mortgage
Bankers requires it to report, in which case such exceptions shall be set
forth in such statement.
Section 5.03 Annual Officer's Certificate.
Not more than ninety days after the end of the Servicer's fiscal year
commencing with the fiscal year ending April 30, 2002, the Servicer, at its
own expense, will deliver to the Depositor and the Trustee a Servicing
Officer's certificate stating, as to each signer thereof, that (i) a review of
the activities of the Servicer during such preceding fiscal year and of
performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
for such year, or, if there has been a default in the fulfillment of all such
obligations, specifying each such default known to such officers and the
nature and status thereof including the steps being taken by the Servicer to
remedy such default.
ARTICLE VI.
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer.
The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to Holdings as of the Closing Date:
(a) Due Organization and Authority. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the State
of California and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in each state
where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted
by the Servicer, and in any event the Servicer is in compliance with the laws
of any such state to the extent necessary to ensure the enforceability of the
terms of this Agreement; the Servicer has the full power and authority to
execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Servicer and the consummation of the transactions contemplated hereby have
been duly and validly authorized; this Agreement evidences the valid, binding
and enforceable obligation of the Servicer and all requisite action has been
taken by the Servicer to make this Agreement valid and binding upon the
Servicer in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Servicer;
(c) No Conflicts. Neither the execution and delivery of this Agreement,
the acquisition of the servicing responsibilities by the Servicer or the
transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Servicer's
organizational documents or any legal restriction or any agreement or
instrument to which the Servicer is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or result in the violation of any law, rule, regulation, order, judgment or
decree to which the Servicer or its property is subject, or impair the ability
of the Servicer to service the Mortgage Loans, or impair the value of the
Mortgage Loans;
(d) Ability to Perform. The Servicer does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to its knowledge threatened against the Servicer
which, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of the
right or ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or which
would draw into question the validity of this Agreement or of any action taken
or to be taken in connection with the obligations of the Servicer contemplated
herein, or which would be likely to impair materially the ability of the
Servicer to perform under the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of or compliance by the Servicer with
this Agreement;
(g) Ability to Service. The Servicer is an approved seller/servicer of
conventional residential mortgage loans for FNMA and FHLMC, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The
Servicer is in good standing to service mortgage loans for either FNMA or
FHLMC. The Servicer is a member in good standing of the MERS system, if
applicable;
(h) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this
Agreement or in connection with the transactions contemplated hereby contains
any untrue statement of fact or omits to state a fact necessary to make the
statements contained therein not misleading; and
(i) No Commissions to Third Parties. The Servicer has not dealt with any
broker or agent or anyone else who might be entitled to a fee or commission in
connection with this transaction other than Holdings.
Section 6.02 Remedies for Breach of Representations and Warranties of the
Servicer.
It is understood and agreed that the representations and warranties set
forth in Section 6.01 shall survive the engagement of the Servicer to perform
the servicing responsibilities as of the Closing Date hereunder and the
delivery of the Servicing Files to the Servicer and shall inure to the benefit
of Holdings, the Depositor and the Trustee. Upon discovery by either the
Servicer, Holdings, the Depositor or the Trustee of a breach of any of the
foregoing representations and warranties which materially and adversely
affects the ability of the Servicer to perform its duties and obligations
under this Agreement or otherwise materially and adversely affects the value
of the Mortgage Loans, the Mortgaged Property or the priority of the security
interest on such Mortgaged Property or the interest of Holdings, the Depositor
or the Trustee, the party discovering such breach shall give prompt written
notice to the other.
Within 60 days of the earlier of either discovery by or notice to the
Servicer of any breach of a representation or warranty set forth in Section
6.01 which materially and adversely affects the ability of the Servicer to
perform its duties and obligations under this Agreement or otherwise
materially and adversely affects the value of the Mortgage Loans, the
Mortgaged Property or the priority of the security interest on such Mortgaged
Property, the Servicer shall use its best efforts promptly to cure such breach
in all material respects and, if such breach cannot be cured, the Servicer
shall, at the Trustee's option, assign the Servicer's rights and obligations
under this Agreement (or respecting the affected Mortgage Loans) to a
successor Servicer. Such assignment shall be made in accordance with Sections
9.01 and 9.02.
In addition, the Servicer shall indemnify Holdings, the Depositor and the
Trustee and hold each of them harmless against any Costs resulting from any
claim, demand, defense or assertion based on or grounded upon, or resulting
from, a breach of the Servicer representations and warranties contained in
this Agreement. It is understood and agreed that the remedies set forth in
this Section 6.02 constitute the sole remedies of Holdings, the Depositor or
the Trustee respecting a breach of the foregoing representations and
warranties.
Any cause of action against the Servicer relating to or arising out of
the breach of any representations and warranties made in Section 6.01 shall
accrue upon (i) discovery of such breach by the Servicer or notice thereof by
Holdings, the Depositor or the Trustee to the Servicer, (ii) failure by the
Servicer to cure such breach within the applicable cure period, and (iii)
demand upon the Servicer by Holdings, the Depositor or the Trustee for
compliance with this Agreement.
Section 6.03 Additional Indemnification by the Servicer; Third Party
Claims.
The Servicer shall indemnify Holdings, the Depositor, the Trustee and the
Trust Fund and hold them harmless against any and all Costs that the
indemnified party may sustain in any way related to (i) the failure of the
Servicer to perform its duties and service the Mortgage Loans in material
compliance with the terms of this Agreement or (ii) the failure of the
Servicer to cause any event to occur which should have occurred if the
Servicer were applying Accepted Servicing Practices under this Agreement. The
Servicer shall immediately notify Holdings, the Depositor, the Trustee, or any
other relevant party if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
indemnified party) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or any
indemnified party in respect of such claim and follow any written instructions
received from such indemnified party in connection with such claim. The
Servicer shall be promptly reimbursed from the Trust Fund for all amounts
advanced by it pursuant to the preceding sentence except when the claim is in
any way related to the Servicer's indemnification pursuant to Section 6.02, or
the failure of the Servicer to service and administer the Mortgage Loans in
material compliance with the terms of this Agreement. In the event a dispute
arises between an indemnified party and the Servicer with respect to any of
the rights and obligations of the parties pursuant to this Agreement, and such
dispute is adjudicated in a court of law, by an arbitration panel or any other
judicial process, then the losing party shall indemnify and reimburse the
winning party for all attorneys' fees and other costs and expenses related to
the adjudication of said dispute.
ARTICLE VII.
THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification
to do business as a foreign entity in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall, with the prior written consent of the Trustee, 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; provided, however, that the successor
or surviving Person shall be an institution (i) having a net worth of not less
than $15,000,000, and (ii) which is a FHLMC-approved or FNMA-approved servicer
in good standing.
Section 7.02 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to Holdings, the Depositor
or the Trustee for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Servicer or any
such person against any breach of warranties or representations made herein,
or failure to perform its obligations in strict compliance with any standard
of care set forth in this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Servicer and any director, officer, 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 shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve
it in any expense or liability; provided, however, that the Servicer may
undertake any such action which it may deem necessary or desirable in respect
of this Agreement and the rights and duties of the parties hereto. In such
event, the Servicer shall be entitled to reimbursement from the Trust Fund for
the reasonable legal expenses and costs of such action.
Section 7.03 Limitation on Resignation and Assignment by the Servicer.
Holdings has entered into this Agreement with the Servicer in reliance
upon the independent status of the Servicer, and the representations as to the
adequacy of its servicing facilities, plant, personnel, records and
procedures, its integrity, reputation and financial standing, and the
continuance thereof. Therefore, the Servicer shall neither assign its rights
under this Agreement or the servicing hereunder nor delegate its duties
hereunder or any portion thereof, or sell or otherwise dispose of all or
substantially all of its property or assets without, in each case, the prior
written consent of Holdings and the Trustee, which consent, in the case of an
assignment of rights or delegation of duties, shall be granted or withheld in
the discretion of Holdings and the Trustee and which consent, in the case of a
sale or disposition of all or substantially all of the property or assets of
the Servicer, shall not be unreasonably withheld; provided, that in each case,
there must be delivered to Holdings and the Trustee a letter from each Rating
Agency to the effect that such transfer of servicing or sale or disposition of
assets will not result in a qualification, withdrawal or downgrade of the
then-current rating of any of the Certificates. Notwithstanding the foregoing,
the Servicer, without the consent of Holdings, and the Trustee, may retain
third party contractors to perform certain servicing and loan administration
functions, including without limitation, hazard insurance administration, tax
payment and administration, flood certification and administration, collection
services and similar functions; provided, that the retention of such
contractors by Servicer shall not limit the obligation of the Servicer to
service the Mortgage Loans pursuant to the terms and conditions of this
Agreement.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of Holdings and the Trustee or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to Holdings and the Trustee
which Opinion of Counsel shall be in form and substance acceptable to Holdings
and the Trustee. No such resignation shall become effective until a successor
shall have assumed the Servicer's responsibilities and obligations hereunder
in the manner provided in Section 9.01.
Without in any way limiting the generality of this Section 7.03, in the
event that the Servicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written consent of Holdings and the
Trustee, then such parties shall have the right to terminate this Agreement
upon notice given as set forth in Section 8.01, without any payment of any
penalty or damages and without any liability whatsoever to the Servicer or any
third party.
ARTICLE VIII.
TERMINATION
Section 8.01 Termination for Cause.
This Agreement shall be terminable at the option of Holdings or the
Trustee if any of the following events of default exist on the part of the
Servicer:
(i) any failure by the Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Servicer by the Trustee; or
(ii) failure by the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer
set forth in this Agreement which continues unremedied for a period of 30
days; or
(iii) failure by the Servicer to maintain its license to do business or
service residential mortgage loans in any jurisdiction, if required by such
jurisdiction, where the Mortgaged Properties are located which continues
uncured for a period of thirty (30) days after actual knowledge of such
failure by the Servicer; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
(v) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Servicer
or of or relating to all or substantially all of its property; or
(vi) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend payment of
its obligations or cease its normal business operations for three Business
Days; or
(vii) the Servicer ceases to meet the qualifications of a FNMA or FHLMC
seller/servicer; or
(viii) the Servicer attempts to assign the servicing of the Mortgage
Loans or its right to servicing compensation hereunder or the Servicer
attempts to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof, in each case without complying fully with the provisions of Section
7.03.
In each and every such case, so long as an event of default shall not
have been remedied within the applicable cure period, in addition to whatever
rights Holdings or the Trustee may have at law or equity to damages, including
injunctive relief and specific performance, Holdings or the Trustee, by notice
in writing to the Servicer, may (and upon the direction of more than 50% of
the voting interest of Certificateholder shall) terminate all the rights and
obligations of the Servicer under this Agreement and in and to the servicing
contract established hereby and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in a successor
Servicer appointed by Holdings and the Trustee in accordance with the terms of
the Trust Agreement. Upon written request from Holdings, the Servicer shall
prepare, execute and deliver to the successor entity designated by Holdings
any and all documents and other instruments, place in such successor's
possession all Servicing Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Servicer's sole
expense. The Servicer shall cooperate with Holdings and the Trustee and such
successor in effecting the termination of the Servicer's responsibilities and
rights hereunder, including without limitation, the transfer to such successor
for administration by it of all cash amounts which shall at the time be
credited by the Servicer to the Custodial Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
By a written notice, Holdings and the Trustee, may waive any default by
the Servicer in the performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived.
Upon a termination of the Servicer for cause pursuant to this Section
8.01, all unreimbursed Option One Servicing Fees, Servicing Advances and
Monthly Advances still owing the Servicer shall be paid by the Trust Fund on
the Remittance Date following the Due Period in which the successor servicer
reports such amounts as received from the related Mortgage Loans.
Section 8.02 Termination Without Cause.
(a) This Agreement shall terminate upon: (i) the later of (a) the
distribution of the final payment or liquidation proceeds on the last Mortgage
Loan to the Trust Fund, and (b) the disposition of all REO Property acquired
upon foreclosure of the last Mortgage Loan and the remittance of all funds due
hereunder or (ii) mutual consent of the Servicer, Holdings and the Trustee in
writing, provided such termination is also acceptable to the Rating Agencies.
In addition, Holdings, with prior written consent of IBF, may terminate this
Agreement with respect to all of the Mortgage Loans, without cause, provided,
that Holdings gives the Servicer and the Trustee 90 days' notice of such
termination and Holdings has appointed a successor servicer reasonably
acceptable to the Trustee. In the event of failure of IBF to grant such
written consent, IBF shall be required to pay Holdings an amount equal to the
product of (a) the General Servicing Fee Rate and (b) the then outstanding
principal balance of the Mortgage Loan in consideration of the transfer of the
servicing rights with respect to the Mortgage Loans to IBF. Any such notice of
termination shall be in writing and delivered to the Servicer by registered
mail to the address set forth in Section 9.03. Holdings and the Servicer shall
comply with the termination procedures set forth in Section 9.01 hereof. In
the event that such termination without cause is exercised by Holdings within
six months of the Transfer Date, Holdings shall pay to the Servicer a
termination fee equal to $15.00 per Mortgage Loan, payable no later than five
Business Days following the date of such termination. In connection with any
termination pursuant to clause (ii) of the first sentence of this Section
8.02(a), all unreimbursed Option One Servicing Fees, Servicing Advances and
Monthly Advances still owing the Servicer shall be paid no later than 5
Business Days following the date of such termination by the Trust Fund. In
connection with any termination without cause pursuant to the second sentence
of this Section 8.02(a), Holdings will be responsible for reimbursing the
Servicer for all unreimbursed Option One Servicing Fees, Servicing Advances,
Monthly Advances and other reasonable and necessary out-of-pocket costs
associated with any transfer of servicing at the time of such transfer of
servicing.
(b) In the event that the Servicer decides to terminate its obligations
under this Agreement as set forth in clause (ii) of Section 8.02(a), the
Servicer agrees that it will continue to service the Mortgage Loans beyond the
prescribed termination date until such time as the Trustee, using reasonable
commercial efforts, is able to identify a successor servicer meeting the
characteristics of Sections 7.01 and 9.01.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer.
Simultaneously with the termination of the Servicer's responsibilities
and duties under this Agreement (a) pursuant to Sections 7.03, 8.01 or
8.02(a)(ii), the Trustee shall (i) within 90 days of the Servicer receiving
notice of such termination, succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor having the characteristics set forth in clauses (i) and
(ii) of Section 7.01 and which shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Servicer under this
Agreement simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement; or (b) pursuant
to Section 8.02, the Trustee shall appoint a successor having the
characteristics set forth in clauses (i) and (ii) of Section 7.01 and which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement simultaneously with the
termination of the Servicer's responsibilities, duties and liabilities under
this Agreement. In the event that the Trustee assumes the responsibilities of
a successor servicer, the Trustee and such successor shall take such actions,
consistent with this Agreement, as shall be necessary to effectuate any such
succession and may make other arrangements with respect to the servicing to be
conducted hereunder which are not inconsistent herewith. In the event the
Servicer is terminated for cause under Section 8.01, the Trustee shall be
entitled to be reimbursed from the Servicer (or by the Trust Fund if the
Servicer is unable to fulfill its obligations hereunder) for all costs
associated with the transfer of servicing from the terminated servicer,
including, without limitation, any 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 Trustee to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Trustee to service the Mortgage Loans properly and effectively. In
the event the Servicer is terminated without cause pursuant to Section 8.02,
reimbursement of the Trustee pursuant to the preceding sentence shall be the
obligation of the Holdings. Any successor to the Servicer shall be subject to
the approval of Holdings and shall be a member in good standing of the MERS
system (if any of the Mortgage Loans are MERS Eligible Mortgage Loans, unless
such Mortgage Loans are withdrawn from MERS and Assignments of Mortgage are
recorded in favor of the Trustee at the expense of the successor Servicer).
Any approval of a successor servicer by the Trustee and Holdings be
conditioned upon the receipt by them of a letter from each Rating Agency to
the effect that such transfer of servicing will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of the Certificates.
In connection with such appointment and assumption, the Trustee or Holdings,
as applicable, may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree, provided, however, that no such compensation shall be in excess of the
General Servicing Fee permitted the Servicer under this Agreement. In the
event that the Servicer's duties, responsibilities and liabilities under this
Agreement should be terminated pursuant to the aforementioned sections, the
Servicer shall discharge such duties and responsibilities during the period
from the date it acquires knowledge of such termination until the effective
date thereof with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor. The resignation or removal of the Servicer pursuant to the
aforementioned sections shall not become effective until a successor shall be
appointed pursuant to this Section 9.01 and shall in no event relieve the
Servicer of the representations and warranties made pursuant to Section 6.01
and the remedies available to Holdings, the Depositor and the Trustee under
Section 6.02 and 6.03, it being understood and agreed that the provisions of
such Sections 6.01, 6.02 and 6.03 shall be applicable to the Servicer
notwithstanding any such resignation or termination of the Servicer, or the
termination of this Agreement. Notwithstanding the foregoing, the parties
hereto agree that the Trustee, in its capacity as successor servicer,
immediately will assume all of the obligations of the Servicer to make Monthly
Advances and the Trustee will assume the other duties of the Servicer as soon
as practicable, but in no event later than 90 days after the Trustee becomes
successor servicer. Notwithstanding the foregoing, the Trustee, in its
capacity as successor servicer, shall not be responsible for the lack of
information and/or documents that it cannot obtain through reasonable efforts.
Within a reasonable period of time, but in no event longer than 30 days
after the appointment of a successor servicer, the Servicer shall prepare,
execute and deliver to the successor servicer any and all documents and other
instruments, place in such successor's possession all Servicing Files, and do
or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, including but not limited
to the transfer and endorsement of the Mortgage Notes and related documents,
and the preparation and recordation of Assignments of Mortgage. The Servicer
shall cooperate with Holdings and the Trustee, as applicable, and such
successor in effecting the termination of the Servicer's responsibilities and
rights hereunder and the transfer of servicing responsibilities to the
successor Servicer, including without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the time
be credited by the Servicer to the Custodial Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to Holdings and the Trustee an instrument (i) accepting such
appointment, wherein the successor shall make the representations and
warranties set forth in Section 6.01 (including a representation that the
successor Servicer is a member of MERS, unless none of the Mortgage Loans are
MERS Mortgage Loans or MERS Eligible Mortgage Loans or any such Mortgage Loans
have been withdrawn from MERS and Assignments of Mortgage are recorded in
favor of the Trustee) and (ii) an assumption of the due and punctual
performance and observance of each covenant and condition to be performed and
observed by the Servicer under this Agreement, whereupon such successor shall
become fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer, with like effect as if originally
named as a party to this Agreement. Any termination or resignation of the
Servicer or termination of this Agreement pursuant to Sections 6.02, 7.03,
8.01 or 8.02 shall not affect any claims that Holdings, the Depositor or the
Trustee may have against the Servicer arising out of the Servicer's actions or
failure to act prior to any such termination or resignation. In addition, in
the event any successor Servicer is appointed pursuant to Section 8.02(a) of
this Agreement, such successor Servicer must satisfy the conditions relating
to the transfer of servicing set forth in the Trust Agreement.
The Servicer shall deliver promptly to the successor Servicer the funds
in the Custodial Account and Escrow Account and all Mortgage Loan documents
and related documents and statements held by it hereunder and the Servicer
shall account for all funds and shall execute and deliver such instruments and
do such other things as may reasonably be required to more fully and
definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
Upon a successor servicer's acceptance of appointment as such, the
Servicer shall notify the Trustee and Holdings of such appointment in
accordance with the procedures set forth in Section 9.03.
Section 9.02 Costs.
Holdings shall pay any legal fees and expenses of its attorneys. Costs
and expenses incurred in connection with the transfer of the servicing
responsibilities, including fees for delivering Servicing Files, shall be paid
by Holdings. Subject to Sections 2.02 and 3.01(a), Holdings shall pay the
costs associated with the preparation, delivery and recording of Assignments
of Mortgages.
Section 9.03 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if sent by facsimile or mailed by
overnight courier, addressed as follows (or such other address as may
hereafter be furnished to the other party by like notice):
(i) if to Holdings:
Lehman Capital, A Division of
Xxxxxx Brothers Holdings Inc.
Three World Financial Center
New York, New York 10285
Attention: Manager, Contract Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) if to the Servicer:
Option One Mortgage Corporation
3 Ada
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx
Technical Servicing Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iii) If to the Trustee:
Xxxxx Fargo Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Group
Telephone: 000-000-0000
Facsimile: 000-000-0000
Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee. Any notice of termination to the Servicer shall be given by
facsimile and by certified mail. A copy of any notice required to be faxed
hereunder shall also be mailed to the appropriate party in a manner set forth
above.
Section 9.04 Severability Clause.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable
any provision hereof. If the invalidity of any part, provision, representation
or warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
Section 9.05 No Personal Solicitation.
From and after the related Closing Date, the Servicer hereby agrees that
it will not take any action or permit or cause any action to be taken by any
of its agents or affiliates, or by any independent contractors or independent
mortgage brokerage companies on the Servicer's behalf, to personally, by
telephone, mail, or electronic mail, solicit the Mortgagor under any Mortgage
Loan for the purpose of refinancing such Mortgage Loan; provided, that the
Servicer may solicit any Mortgagor for whom the Servicer has received a
request for verification of mortgage, a request for demand for payoff, a
mortgagor initiated written or verbal communication indicating a desire to
prepay the related Mortgage Loan, or the mortgagor initiates a title search,
provided further, it is understood and agreed that promotions undertaken by
the Servicer or any of its affiliates which (i) concern optional insurance
products or other additional projects or (ii) are directed to the general
public at large, including without limitation, mass mailings based on
commercially acquired mailing lists, newspaper, radio and television
advertisements shall not constitute solicitation under this Section 9.05 nor
is the Servicer prohibited from responding to unsolicited requests or
inquiries made by a Mortgagor or an agent of a Mortgagor.
Section 9.06 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 9.07 Place of Delivery and Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by Holdings in the State of New York and shall
be deemed to have been made in the State of New York. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
Section 9.08 Further Agreements.
Holdings and the Servicer each agree to execute and deliver to the other
such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
Section 9.09 Intention of the Parties.
It is the intention of the parties that Holdings is conveying, and the
Servicer is receiving, only a contract for servicing the Mortgage Loans.
Accordingly, the parties hereby acknowledge that the Trust Fund remains the
sole and absolute owner of the Mortgage Loans and all rights (other than the
servicing rights) related thereto.
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable
by the Servicer, Holdings and the Trustee and their respective successors and
assigns. This Agreement shall not be assigned, pledged or hypothecated by the
Servicer to a third party except in accordance with Section 7.03.
Section 9.11 Assignment by Holdings.
Holdings shall have the right, upon notice to but without the consent of
the Servicer, to assign, in whole or in part, its interest under this
Agreement to the Depositor, which in turn shall assign such rights to the
Trustee, and the Trustee then shall succeed to all rights of Holdings under
this Agreement. All references to Holdings in this Agreement shall be deemed
to include its assignee or designee and any subsequent assignee or designee,
specifically including the Trustee.
Section 9.12 Amendment.
This Agreement may be amended from time to time by the Servicer and
Holdings with the prior written consent of the Trustee by written agreement
signed by Holdings and the Servicer; provided that the party requesting such
amendment shall, at its own expense, provide the Trustee with an Opinion of
Counsel that such amendment will not materially adversely affect the interest
of the Certificateholders in the Mortgage Loans.
Section 9.13 Waivers.
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
Section 9.14 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 9.15 Intended Third Party Beneficiary.
Notwithstanding any provision herein to the contrary, the parties to this
Agreement agree that it is appropriate, in furtherance of the intent of such
parties as set forth herein, that the Trustee receive the benefit of the
provisions of this Agreement as an intended third party beneficiary of this
Agreement to the extent of such provisions. The Servicer shall have the same
obligations to the Trustee as if it were a party to this Agreement, and the
Trustee shall have the same rights and remedies to enforce the provisions of
this Agreement as if it was a party to this Agreement. Notwithstanding the
foregoing, all rights and obligations of the Trustee hereunder (other than the
right to indemnification) shall terminate upon termination of the Trust
Agreement and of the Trust Fund pursuant to the Trust Agreement.
Section 9.16 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) a reference to a Subsection without further reference to a Section is
a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
(f) the term "include" or "including" shall mean by reason of
enumeration.
Section 9.17 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
Section 9.18 Inspection Rights.
The Servicer shall afford the Trustee, Holdings and IBF, upon reasonable
advance notice and at such entity's own expense, during normal business hours,
access to records maintained by the Servicer as they relate to this Agreement
and the Mortgage Loans subject to this Agreement, in respect of its rights and
obligations hereunder and access to officers of the Servicer responsible for
such obligations.
IN WITNESS WHEREOF, the Servicer and Holdings have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the date first above written.
XXXXXX BROTHERS HOLDINGS INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
OPTION ONE MORTGAGE CORPORATION,
as Servicer
By: /s/ Xxx Xxxxxxx
----------------------------------------------
Name: Xxx Xxxxxxx
Title: Vice President
ACKNOWLEDGED BY:
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Trustee
By: /s/ Xxx Xxxxx
----------------------------------
Name: Xxx Xxxxx
Title: Vice President
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 20__
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Servicing Agreement, dated as of February 1, 2001
(the "Agreement"), we hereby authorize and request you to establish an
account, as a Custodial Account pursuant to Section 3.03 of the Agreement, to
be designated as "in trust for Xxxxx Fargo Bank Minnesota, National
Association as Trustee for ARC 2001-BC1 Trust." All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Servicer. This
letter is submitted to you in duplicate. Please execute and return one
original to us.
OPTION ONE MORTGAGE CORPORATION
By:____________________________
Name:
Title:
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number __________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such
account as provided above.
_______________________________
Depository
By:____________________________
Name:
Title:
Date:
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 20__
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Servicing Agreement, dated as of February 1, 2001
(the "Agreement"), we hereby authorize and request you to establish an
account, as an Escrow Account pursuant to Section 3.05 of the Agreement, to be
designated as "in trust for Xxxxx Fargo Bank Minnesota, National Association
for ARC 2001-BC1 Trust." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Servicer. This letter is submitted
to you in duplicate. Please execute and return one original to us.
OPTION ONE MORTGAGE CORPORATION
By:____________________________
Name:
Title:
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number __________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such
account as provided above.
___________________________
Depository
By:________________________
Name:
Title:
Date:
EXHIBIT D
TRUST AGREEMENT
