EXECUTION
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the 1st
day of March, 1998, by and between XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and OPTION
ONE MORTGAGE CORPORATION, a California corporation ("the Servicer"), recites
and provides as follows:
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans identified
on Schedule I hereto (the "Serviced Mortgage Loans") to Structured Asset
Securities Corporation ("SASCO"), which in turn has conveyed the Serviced
Mortgage Loans to First Union National Bank, as trustee (the "Trustee") under
a trust agreement dated as of March 1, 1998 (the "Trust Agreement"), among
the Trustee, Norwest Bank Minnesota, National Association, as master servicer
("Norwest," and, together with any successor Master Servicer appointed
pursuant to the provisions of the Trust Agreement, the "Master Servicer") and
SASCO.
WHEREAS, Xxxxxx Capital desires that the Servicer service the Serviced
Mortgage Loans, and the Servicer has agreed to do so, subject to the
conditions set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be obligated,
among other things, to supervise the servicing of the Serviced Mortgage Loans
on behalf of the Trustee, and shall have the right, under certain
circumstances, to terminate the rights and obligations of the Servicer under
this Servicing Agreement.
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, Xxxxxx Capital and the Servicer
hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
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Agreement, including Exhibit A hereto and any provisions of the Seller's
Warranties and Servicing Agreement dated as of September 30, 1997, between
Xxxxxx Capital and the Servicer (the "Warranties and Servicing Agreement")
incorporated by reference herein, shall have the meanings ascribed to such
terms in the Trust Agreement.
2. Servicing. The Servicer agrees, with respect to the Serviced
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Mortgage Loans, to perform and observe the duties, responsibilities and
obligations that are to be performed and observed under the provisions of the
Warranties and Servicing Agreement, except as otherwise provided herein and
on Exhibit A hereto, and that the provisions of the Warranties and Servicing
Agreement, as so modified, are and shall be a part of this Agreement to the
same extent as if set forth herein in full.
3. Master Servicing; Termination of Servicer. The Servicer, including
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any successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Serviced Mortgage Loans in accordance with the
provisions of this Agreement. The Master Servicer, acting on behalf of the
Trustee pursuant to the Trust Agreement, shall have the same rights as the
"Purchaser" (as defined in the Warranties and Servicing Agreement) to enforce
the obligations of the Servicer under the Warranties and Servicing Agreement.
The Master Servicer shall be entitled to terminate the rights and obligations
of the Servicer under this Agreement upon the failure of the Servicer to
perform any of its obligations under this Agreement, as provided in Article X
of the Warranties and Servicing Agreement.
4. No Representations. Neither the Servicer nor the Master Servicer
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shall be obligated or required to make any representations and warranties
regarding the Serviced Mortgage Loans in connection with the transactions
contemplated by the Trust Agreement and issuance of the certificates issued
pursuant thereto.
5. Notices. All notices and communications between or among the
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parties hereto shall be in writing and shall be deemed received or given when
mailed first-class mail, postage prepaid, addressed to each other party at
its address specified below. Each party may designate to the other parties
in writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
6. Governing Law. THIS SERVICING AGREEMENT SHALL BE GOVERNED BY, AND
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CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which when so executed shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
8. Reconstitution. Xxxxxx Capital and the Servicer agree that this
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Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Warranties and Servicing
Agreement.
9. Notices and Remittances to the Master Servicer. All notices
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required to be delivered to the Purchaser or the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, SASCO 1998-3
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: 13415500, SASCO 1998-3
10. Errors and Omissions Insurance. The Servicer shall keep in force
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during the term of this Agreement a fidelity bond and a policy or policies of
insurance covering errors and omissions in the performance of the Servicer's
obligations under this Agreement. Such fidelity bond and policy or policies
shall be maintained with recognized insurers and shall be in such form and
amount as would permit the Servicer to be qualified as a FNMA or FHLMC
seller-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 Master Servicer a copy of each such bond and insurance
policy upon receipt thereof by the Servicer.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
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Name:
Title:
OPTION ONE MORTGAGE CORPORATION
By:
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Name:
Title:
EXHIBIT A
Modifications to the Warranties and Servicing Agreement
1. All references to "Pool I," "Pool 1," "Pool 2" and "Pool II" in the
Warranties and Servicing Agreement are hereby deleted.
2. The definition of "Custodial Agreement" in Article I is hereby deleted
and replaced with the following:
"The custodial agreement relating to custody of the Serviced Mortgage
Loans between First Trust National Association, as Custodian, and First
Union National Bank, as Trustee, dated as of March 1, 1998."
3. The definition of "Monthly Advance" in Article I is hereby amended by
adding at the end of such definition the following: ", but only to the
extent that such amount is expected, in the reasonable judgment of the
Company, to be recoverable from collections or other recoveries in
respect of such Mortgage Loan."
4. The definition of "Servicing Advance" in Article I is hereby amended by
adding, immediately after the phrase "but not limited to, the cost of",
the following: "transfer of servicing of Delinquent Mortgage Loans to
the Special Servicer pursuant to Section 11.02, and".
5. The word "or" at the beginning of line twelve of the second paragraph in
Section 4.01 is hereby deleted and replaced with a comma, and the
following is hereby added immediately following the words "change the
final maturity date on such Mortgage Loan" in such line twelve: "or
permit any alteration, substitution or release of any collateral for
such Mortgage Loan."
6. The fourth and fifth paragraphs of Section 4.01 are hereby deleted in
their entirety and replaced with the following:
"Notwithstanding anything to the contrary in this Agreement, the
Company shall not waive any premium or penalty in connection with a
prepayment of principal of any Mortgage Loan, and shall not consent to
the modification of any Mortgage Note to the extent that such
modification relates to payment of a prepayment premium or penalty."
7. The following paragraph is hereby added at the end of Section 4.02:
"Notwithstanding the foregoing, in the event of any conflict
between the provisions of this Section 4.02 and the provisions of
Section 11.02, the provisions of Section 11.02 shall control."
8. The words "the Purchaser of Conventional Residential Adjustable and
Fixed Rate Mortgage Loans, Group No. 1997-LB/00" in the first paragraph
of Section 4.04 are hereby deleted and replaced with the following:
"Norwest Bank Minnesota, National Association, as master servicer for
SASCO 1998-3."
9. Section 4.05 is amended by deleting the word "and" at the end of clause
(vi), replacing the period at the end of clause (vii) with "; and", and
adding the following immediately following clause (viii):
"(viii) to reimburse itself for Monthly Advances of the Company's
funds made pursuant to Section 7.03, the Company's right to reimburse
itself pursuant to this subclause (viii) (x) being limited to amounts
received on the related Mortgage Loan which represent late payments of
principal and/or interest respecting which any such advance was made,
related Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds,
REO Property, and such other amounts as may be collected by the Company
from the Mortgagor or otherwise relating to such Mortgage Loan, and (y)
if, after the liquidation of such Mortgage Loan, such amounts are
insufficient to reimburse the Company for such unreimbursed Monthly
Advances, the Company may seek reimbursement from other amounts in the
Custodial Account, it being understood that, in the case of any such
reimbursement, the Company's right thereto shall be prior to the rights
of the Purchaser;
10. Section 4.05 is further amended by adding, immediately after the words
"unreimbursed Servicing Advances" in the first line of clause (ii), the
following: ", and for any unpaid Servicing Fees,".
11. The words "the Purchaser of Conventional Residential Adjustable and
Fixed Rate Mortgage Loans, Group No. 1997-LB/00" in the first paragraph
of Section 4.06 are hereby deleted and replaced with the following:
"Norwest Bank Minnesota, National Association, as master servicer for
SASCO 1998-3."
12. All references in Section 4.15 to the disposition of REO Properties
within a two year period are hereby deleted and replaced with a three
year period.
13. The first paragraph of Section 5.01 is hereby deleted and replaced with
the following:
"On each Remittance Date the Company shall remit by wire transfer
of immediately available funds to the Master Servicer (a) all amounts
deposited in the Custodial Account as of the close of business on the
Determination Date (net of charges against or withdrawals from the
Custodial Account pursuant to Section 4.05), plus (b) all advances, if
any, which the Company is obligated to make pursuant to Section 7.03,
minus (c) any amounts attributable to Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds, Condemnation Proceeds or REO Disposition
Proceeds received after the applicable Prepayment Period, which amounts
shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section
7.04, and minus (d) any amounts attributable to Monthly Payments
collected but due (giving effect to Section 5.03) on a due date or 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 Period for such amounts."
14. Section 5.02 is hereby amended by deleting the words "Remittance Date"
in the first line of such Section, and substituting the following:
"tenth day of each month, or if such tenth day is not a Business Day,
the immediately preceding Business Day,"
15. Section 5.03 is hereby deleted in its entirety.
16. Section 6.03 is hereby amended by adding the following immediately after
the words "other ancillary fees" in the second paragraph of such
Section: ", but not including any premium or penalty associated with a
prepayment of principal of a Mortgage Loan."
17. The second paragraph of Section 11.02 is hereby deleted in its entirely
and replaced with the following:
"On the second Business Day of each month, the Company shall orally
inform the Master Servicer and the Special Servicer as to which Mortgage
Loans have become delinquent for a period of 61 days or more, without
giving effect to any grace period permitted by the related Mortgage Note
(each, a "Distressed Mortgage Loan"). Any such Mortgage Loan as to
which all past due payments are made prior to the Notice Date shall not
be considered to be a Distressed Mortgage Loan, and the servicing
thereof shall not be transferred as provided below. On the fourth
Business Day of each month (the "Notice Date"), the Company shall send
by facsimile a written listing of the Distressed Mortgage Loans to the
Master Servicer, the Trustee and the Custodian, and shall mail to the
Mortgagor of each Mortgage Loan listed in a Transfer Notice a letter
advising each such Mortgagor of the transfer of the servicing of the
related Mortgage Loan to the Special Servicer, in accordance with the
Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990; provided,
however, the content and format of such letter shall have the prior
approval of the Special Servicer. The Company shall promptly provide
the Special Servicer with copies of all such notices. The transfer of
servicing with respect to each such Mortgage Loan to the Special
Servicer shall be effected by the Company not later than the fifteenth
day following the applicable Notice Date (the "Transfer Date"). By the
Business Day immediately following each Notice Date, the Company shall
provide the Master Servicer, the Special Servicer, the Trustee and the
Custodian with a certification (the "Transfer Notice") listing the
Distressed Mortgage Loans.
At least five Business Days prior to each Transfer Date, the
Company shall deliver, with respect to the Distressed Mortgage Loans
listed on the related Transfer Notice, to the Special Servicer all
Servicing Files, and to the Special Servicer and the Master Servicer a
loan level tape or other electronic media containing loan set-up
information in form reasonably acceptable to the Master Servicer and the
Special Servicer. Within two Business Days following such Transfer
Date, the Servicer shall deliver a final trial balance (subject to
special claims), in form reasonably acceptable to the Master Servicer
and the Special Servicer, and commensurate with generally acceptable
industry standards, detailing the amount of any unreimbursed Monthly
Advances, Servicing Advances and accrued and unpaid Servicing Fees on a
loan level basis. Should the Master Servicer or the Special Servicer
desire a loan level tape or other electronic media containing
information which is not readily extractable from the Company's
servicing system, the Company shall reasonably cooperate to make such
loan level data available to the Master Servicer and Special Servicer.
In addition, no more than two Business Days after the Transfer Date, the
Company shall transfer to the Special Servicer any funds held in an
Escrow Account or Custodial Account relating to the Distressed Mortgage
Loans listed in the related Transfer Notice. Upon reasonable compliance
by the Company with the provisions of this Section regarding the
transfer of servicing for Distressed Mortgage Loans, the Special
Servicer will reimburse the Company within five Business Days for any
unreimbursed Monthly Advances, Servicing Advances and accrued and unpaid
Servicing Fees with respect to such Distressed Mortgage Loans which have
been properly documented. Notwithstanding anything herein to the
contrary, the transfer of servicing for Distressed Mortgage Loans shall
not require the payment of a termination fee therefor.
In connection with the transfer of any Distressed Mortgage Loan, (i) the
Company will be responsible for servicing the Distressed Mortgage Loan
until the effective date of transfer of servicing to the Special
Servicer, but shall have no right or obligation to service such
Distressed Mortgage Loan from and after the effective date of the
transfer of servicing to the Special Servicer, (ii) notwithstanding
clause (i) above, the Company shall include the Distressed Mortgage Loan
in its monthly remittance report pursuant to Section 5.02 for the month
in which such transfer is effected and shall be obligated, subject to
Section 7.03, to make the Monthly Advance with respect to such
Distressed Mortgage Loan on the Remittance Date in the month in which
such transfer is effected, in each case, regardless of whether the
Remittance Date occurs before or after the effective date of such
transfer, (iii) the amount of Monthly Advances to be reimbursed to the
Company by the Special Servicer hereunder shall include the Monthly
Advance described in clause (ii) above regardless of whether the Company
makes such Monthly Advance before or after the effective date of such
transfer, (iv) the Company shall, no later than the end of the month in
which such transfer is effected, provide to the Special Servicer loan
level information (in the loan level tape or other electronic media or
other agreed-upon form) regarding the Distressed Mortgage Loan during
the month of such transfer as may be necessary to enable the Special
Servicer to provide such information in its remittance report for the
next following month, and (v) the Company shall be entitled to its pro
rata portion of the Servicing Fee with respect to any such Distressed
Mortgage Loan for the month in which such transfer occurs, based on the
number of days in such month that precede the Transfer Date."
18. The following paragraph is added at the end of Section 12.01:
"Neither the Master Servicer nor any successor servicer (including
the Purchaser and the Master Servicer) shall be liable for any acts or
omissions of the Company or any predecessor servicer. In particular,
neither the Master Servicer nor any successor servicer (including the
Purchaser and the Master Servicer) shall be liable for any servicing
errors or interruptions resulting from any failure of the Company to
maintain computer and other information systems that are year-2000
compliant."
19. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance Date, the
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period beginning on the Cut-off Date and ending on April 1. With respect to
each subsequent Remittance Date, the period commencing on the second day of
the month immediately preceding the month in which such Remittance Date
occurs and ending on the first day of the month in which such Remittance Date
occurs."
