Exhibit 99.11(b)
EXECUTION COPY
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FIRST AMENDED AND RESTATED SERVICING AGREEMENT
between
Xxxxxx Xxxxxxx Mortgage Capital Inc.
(Owner)
and
GMAC Mortgage Corporation,
a Pennsylvania corporation
(Servicer)
Dated as of January 1, 2006
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TABLE OF CONTENTS
SECTION 1. DEFINED TERMS..................................................1
SECTION 2. OWNER'S RESPONSIBILITIES AND ENGAGEMENT OF SERVICER TO PERFORM
SERVICING RESPONSIBILITIES....................................14
2.01 Contract for Servicing..........................................14
2.02 [Reserved.].....................................................14
2.03 Exclusive Right to Service......................................14
2.04 [Reserved]......................................................14
2.05 Delivery of Powers of Attorney..................................14
2.06 Record Title to Mortgage Loans..................................14
2.07 Books and Records...............................................14
2.08 Transfer of Mortgage Loans......................................14
SECTION 3. SERVICING OF THE MORTGAGE LOANS...............................15
3.01 Servicer to Service.............................................15
3.02 Collection of Mortgage Loan Payments; Notification of
Adjustments ....................................................16
3.03 Realization Upon Defaulted Mortgage Loans.......................17
3.04 Establishment of and Deposits to Collection Account.............18
3.05 Permitted Withdrawals from Collection Account...................19
3.06 Establishment of and Deposits to Escrow Account.................20
3.07 Permitted Withdrawals from Escrow Account.......................21
3.08 Protection of Accounts..........................................22
3.09 Payment of Taxes, Insurance and Other Charges...................22
3.10 Maintenance of Hazard Insurance.................................22
3.11 Maintenance of Mortgage Blanket Insurance.......................24
3.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance.24
3.13 Inspections.....................................................25
3.14 Title, Management and Disposition of REO Property...............25
3.15 Transfers of Mortgaged Property.................................26
3.16 Satisfaction of Mortgages and Release of Mortgage Files.........26
3.17 [Reserved.].....................................................26
3.18 Maintenance of PMI Policy; Claims...............................26
SECTION 4. PAYMENTS TO OWNER.............................................27
4.01 Remittances.....................................................27
4.02 Reports to Owner................................................28
4.03 P&I Advances by Servicer........................................28
SECTION 5. GENERAL SERVICING PROCEDURES..................................29
5.01 Servicing Compensation..........................................29
5.02 Repayment of Servicing Advances.................................29
5.03 Right to Examine Servicer Records...............................29
5.04 Annual Independent Public Accountants' Servicing Report.........30
5.05 Statement of Compliance.........................................30
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5.06 Compliance with Xxxxx-Xxxxx-Xxxxxx Act of 1999..................30
5.07 Compliance with REMIC provisions................................30
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SERVICER AND THE OWNER .......................................30
6.01 Representations of the Servicer.................................30
6.02 Representations of the Owner....................................32
SECTION 7. THE SERVICER..................................................32
7.01 [Reserved]......................................................32
7.02 Merger or Consolidation of the Servicer.........................32
7.03 Limitation on Liability of the Servicer and Others..............33
7.04 Servicer Not to Assign..........................................33
SECTION 8. DEFAULT.......................................................34
8.01 Default by Servicer.............................................34
8.02 Default by Owner................................................35
8.03 Waiver of Defaults..............................................35
SECTION 9. TERMINATION...................................................36
9.01 Expiration of Term and Termination with Cause...................36
9.02 Termination without Cause.......................................37
9.03 Notice of Servicing Transfers...................................37
9.04 Termination Process.............................................37
SECTION 10. SUCCESSOR TO THE SERVICER.....................................37
10.01 Effect of Termination...........................................37
10.02 Transfer of Servicing...........................................38
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SECTION 11. NOTICES.......................................................40
SECTION 12. SEVERABILITY CLAUSE...........................................42
SECTION 13. COUNTERPARTS..................................................42
SECTION 14. APPLICABLE LAW................................................42
SECTION 15. SUCCESSORS AND ASSIGNS........................................43
SECTION 16. WAIVERS.......................................................43
SECTION 17. EXHIBITS......................................................43
SECTION 18. GENERAL INTERPRETIVE PRINCIPLES...............................43
SECTION 19. REPRODUCTION OF DOCUMENTS.....................................44
SECTION 20. INDEMNIFICATION...............................................44
SECTION 21. LEGAL MATTERS.................................................46
21.01 Waiver of Trial by Jury.........................................46
21.02 Submission to Jurisdiction; Waivers.............................47
SECTION 22. CONFIDENTIALITY OF INFORMATION................................47
SECTION 23. NO PERSONAL SOLICITATION......................................48
SECTION 24. MERS PROVISION................................................48
SECTION 25. COOPERATION OF SERVICER WITH A RECONSTITUTION.................49
SECTION 26. MATERIAL CHANGE...............................................50
SECTION 27. FURTHER AGREEMENTS............................................50
SECTION 28. ENTIRE AGREEMENT..............................................51
SECTION 29. RELATIONSHIP BETWEEN THE PARTIES..............................51
SECTION 30. LIMITATION OF DAMAGES.........................................51
SECTION 31. COMPLIANCE WITH REGULATION AB.................................51
31.01 Intent of the Parties; Reasonableness...........................51
31.02 Additional Representations and Warranties of the Servicer.......52
31.03 Information to Be Provided by the Servicer......................52
31.04 Servicer Compliance Statement...................................56
31.05 Report on Assessment of Compliance and Attestation..............56
31.06 Use of Subservicers and Subcontractors..........................57
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31.07 Indemnification; Remedies.......................................58
EXHIBIT A COLLECTION ACCOUNT LETTER AGREEMENT
EXHIBIT B ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT C CONTENTS OF LEGAL FILE
EXHIBIT D CONTENTS OF SERVICING FILE
EXHIBIT E INFORMATION INCLUDED ON MORTGAGE LOAN SCHEDULE
EXHIBIT F ACKNOWLEDGMENT AGREEMENT
EXHIBIT G FORM OF INDEMNIFICATION AGREEMENT
EXHIBIT H SERVICE RELEASE AND TRANSFER OF OWNERSHIP AGREEMENT
EXHIBIT I ANNUAL CERTIFICATION
EXHIBIT J SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
SCHEDULE I REPORTS PREPARED BY THE SERVICER
SCHEDULE II [RESERVED]
SCHEDULE III PREPAYMENT PENALTY SCHEDULE
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FIRST AMENDED AND RESTATED SERVICING AGREEMENT
This First Amended and Restated Servicing Agreement (this
"Agreement"), dated as of January 1, 2006 (the "Effective Date"), is entered
into by and between Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation having an office at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Owner"), and GMAC Mortgage Corporation, a Pennsylvania corporation having an
office at 000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000 (the "Servicer").
RECITALS
WHEREAS, the Owner and the Servicer entered into that certain
Servicing Agreement, dated as of May 20, 2005, and hereby wish to amend and
restate such Servicing Agreement to further clarify the rights and
responsibilities of the parties;
WHEREAS, the Owner is and will be the originator or sole acquirer
of certain Mortgage Loans (as defined below); and
WHEREAS, the Servicer desires to service the Mortgage Loans and
the Owner and the Servicer wish to prescribe the manner of the servicing and
control of the Mortgage Loans;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Owner and
the Servicer agree as follows:
SECTION 1. DEFINED TERMS
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"Accepted Servicing Practices" shall mean the servicing procedures
which (i) conform to customary and usual standards of practice of mortgage
loan servicers servicing mortgage loans similar to the Mortgage Loans, (ii)
follow the policies and procedures that Servicer applies to similar mortgage
loans serviced for third parties and for its own account, (iii) meet the
requirements of Xxxxxx Xxx and Xxxxxxx Mac, (iv) comply with all applicable
laws and follow collection practices with respect to the related Mortgage
Loans that are in all material respects legal and customary, and (v) subject
to clauses (i), (ii) (iii) and (iv), comply with the reasonable requests of
the Owner and the requirements of this Agreement.
"Acknowledgment Agreement" shall mean a weekly electronic
transmission from Owner to Servicer for Servicing by Servicer of the Mortgage
Loans specified on the Mortgage Loan Schedule included with such electronic
transmission. Each such electronic transmission, upon receipt by Servicer,
shall be deemed to be an agreement by Servicer to the primary form of
acknowledgment agreement between the parties and shall include the information
set forth in the attached Exhibit E hereto. As a confirmation of the foregoing
electronic transmission constitution acknowledgement agreements, Owner and
Servicer shall execute and deliver a written agreement, on a monthly basis, in
the form of the attached Exhibit F hereto, which shall include a Mortgage Loan
Schedule, for Mortgage Loans that became subject to the terms and conditions
of this Agreement through such electronic transmissions during such month.
"Adjustable Rate Mortgage Loan" shall mean a Mortgage Loan which
provides for the adjustment of the Mortgage Interest Rate payable in respect
thereto.
"Affiliate" shall mean, with respect to any Person, any other
Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with the Person
specified.
"Automated Boarding" shall mean, with respect to a Mortgage Loan,
the successful, complete and timely electronic transfer of the related
Electronic File to the Servicing database of the Servicer.
"Agreement" shall mean this First Amended and Restated Servicing
Agreement including all exhibits, schedules, amendments and supplements
hereto.
"Ancillary Income" shall mean all income derived from the Mortgage
Loans (other than the (i) Servicing Fee or (ii) prepayment charges
attributable to the Mortgage Loans), including but not limited to late
charges, any interest paid on funds deposited in the Collection Account and
Escrow Account (other than interest on escrowed funds required by law to be
paid to the Mortgagor), fees received with respect to checks or bank drafts
returned by the related bank for non-sufficient funds, assumption fees,
optional insurance administrative fees and all other incidental fees and
charges to the extent not otherwise payable to the Mortgagor under applicable
law or pursuant to the terms of the related Mortgage Note.
"Assignment of Mortgage" shall mean an assignment of the Mortgage,
notice of transfer or equivalent instrument, in recordable form, which when
recorded is sufficient under the laws of the jurisdiction where the related
Mortgaged Property is located to reflect of record the sale of the Mortgage to
the Owner or its assignee.
"Best" shall have the meaning set forth in Section 3.10.
"Business Day" shall mean a day other than Saturday, Sunday, or
any other day on which banks are authorized or required to remain closed in
the States of New York, Connecticut and Iowa and the Commonwealth of
Pennsylvania.
"Closing Date" shall mean for any group of Mortgage Loans, the
date upon which such Mortgage Loans become subject to this Agreement.
"Code" The Internal Revenue Code of 1986, including any successor
or amendatory provisions.
"Commission" The United States Securities and Exchange Commission.
"Collection Account" shall mean the separate account or accounts
created and maintained by the Servicer pursuant to Section 3.04 of this
Agreement, which shall be entitled "GMAC Mortgage Corporation, as Servicer, in
trust for Xxxxxx Xxxxxxx Mortgage Capital Inc., as Owner of the Mortgage
Loans."
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"Compensating Interest" shall mean, with respect to any Remittance
Date, the lesser of (x) the Prepayment Interest Shortfall Amount and (y) the
amount of the Servicing Fee for such Remittance Date.
"Condemnation Proceeds" shall mean all awards, compensation and
settlements in respect of a taking of all or part of a Mortgaged Property by
exercise of the power of condemnation or the right of eminent domain, whether
permanent or temporary, to the extent such awards, compensation or settlements
are not required to be delivered to the related Obligor in accordance with the
terms of the related Mortgage.
"Confidential Information" shall have its meaning set forth in
Section 22 of this Agreement.
"Custodian" shall mean Deutsche Bank National Trust Company or any
successor thereto.
"Cut-off Date" shall mean, with respect to the transfer of
servicing by Owner to Servicer for any group of Mortgage Loans, the date
specified by the Owner to the Servicer in the related Mortgage Loan Schedule.
"Deficient Valuation" shall mean, in connection with bankruptcy
proceedings with respect to a Mortgagor, a binding determination that, based
upon the value of the Mortgaged Property, the lien of the related Mortgage
secures an amount of indebtedness that is less than the outstanding amount
stated in the related Note.
"Delinquent" shall mean if any payment due on the Mortgage Loan is
not made by the close of business on the Due Date for such Mortgage Loan. A
Mortgage Loan is "30 days Delinquent" if such payment has not been received by
the close of business on the Determination Date in the month in which such
payment was due. Similarly for "60 days Delinquent," "90 days Delinquent" and
so on.
"Demotech" shall have the meaning set forth in Section 3.10.
"Depositor" The depositor, as such term is defined in Regulation
AB, with respect to any Securitization Transaction.
"Determination Date" shall have the meaning, with respect to each
Remittance Date, the 15th day (or, if such 15th day is not a Business Day, the
following Business Day) of the month in which such Remittance Date occurs.
"Distressed Mortgage Loan" shall mean any Mortgage Loan which is
ninety (90) days or more Delinquent.
"Due Date" shall mean the day of the month on which the Monthly
Payment is due on a Mortgage Loan, exclusive of any days of grace.
"Due Period" shall mean, with respect to each Remittance Date and
any Mortgage Loan, the period beginning on the second day of the month
preceding the month of
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such Remittance Date through and including the first day of the month in which
such Remittance Date occurs.
"Effective Date" shall be the date this Agreement is executed.
"Electronic File" shall mean a file in transferable electronic
format that includes all data essential to Service a Mortgage Loan, including
but not limited to the following information with regard to each Mortgage
Loan:
(i) the origination loan number,
(ii) customer name, billing address and street address (if
different),
(iii) unpaid principal balance,
(iv) the amount of periodic installments and the date(s) to
which principal, interest and any escrows have been paid,
(v) the accrued but unpaid interest up to and including the
Closing Date,
(vi) a ledger history reflecting all receipts and
disbursements, and
(vii) data, consistent with Schedule III hereto, sufficient
to calculate any applicable late charge, prepayment penalty and
any other applicable contractual fee, charge or penalty.
"Eligible Account" shall mean (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company, the short-term unsecured debt obligations of which (or, in the case
of a depository institution or trust company that is the principal subsidiary
of a holding company, the short-term unsecured debt obligations of such
holding company) are rated A-1 by Standard & Poor's (or its successor in
interest) or Prime-1 by Moody's (or its successor in interest) at the time any
amounts are held on deposit therein, (ii) an account or accounts maintained
with a federal or state chartered depository institution or trust company, the
deposits in which are fully insured by the FDIC, or (iii) a trust account or
accounts maintained with a federal or state chartered depository institution
or trust company acting in its fiduciary capacity. Eligible Accounts may bear
interest.
"Eligible Investments" shall mean any one or more of the following
obligations or securities:
(i) direct obligations of, or obligations fully guaranteed
as to timely payment of principal and interest by the United
States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United
States, or Xxxxxxx Mac senior debt obligations, but excluding any
of such securities whose terms do not provide for payment of a
fixed dollar amount upon maturity or call for redemption;
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(ii) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or
its agent acting in their respective commercial capacities)
incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by
federal and/or state authorities, so long as, at the time of such
investment or contractual commitment providing for such
investment, such depository institution or trust company or its
ultimate parent has a short-term uninsured debt rating in one of
the two highest available rating categories of S&P and the highest
available rating category of Moody's, and provided that each such
investment has an original maturity of no more than 365 days;
(A) any other demand or time deposit or deposit which
is fully insured by the FDIC; and
(B) Xxxxxxx Mac participation certificates and other
Xxxxxxx Mac guaranteed mortgage-backed securities and senior
debt obligations;
(iii) repurchase obligations with a term not to exceed 30
days with respect to any security described in clause (i) above
and entered into with a depository institution or trust company
(acting as principal) rated A or higher by S&P and rated A2 or
higher by Moody's; provided, however, that collateral transferred
pursuant to such repurchase obligation must be of the type
described in clause (i) above and must (A) be valued daily at
current market prices plus accrued interest or (B) pursuant to
such valuation, be equal, at all times, to 105% of the cash
transferred by the Trustee in exchange for such collateral and (C)
be delivered to the Trustee or, if the Trustee is supplying the
collateral, an agent for the Trustee, in such a manner as to
accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any State thereof and that are rated
by a Rating Agency in its highest long-term unsecured rating
categories at the time of such investment or contractual
commitment providing for such investment;
(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 30 days after the date
of acquisition thereof) that is rated by a Rating Agency in its
highest short-term unsecured debt rating available at the time of
such investment;
(vi) units of money market funds registered under the
Investment Company Act of 1940 including funds managed or advised
by the Trustee or an affiliate thereof having a rating by S&P of
AAA-G, AAA-m, or AA-m, and if rated by Moody's, rated Aaa, Aa1 or
Aa2; and
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(vii) any other obligation or security acceptable to the
Owner (as certified by a letter from the Owner to the Servicer);
provided, that no such investment shall be an Eligible Investment if such
investment evidences (a) the right to receive interest-only payments with
respect to the obligations underlying such investments, (b) both principal and
interest payments derived from obligations underlying such investment where
the principal and interest payments with respect to such investment provide a
yield to maturity exceeding one hundred twenty percent (120%) of the yield to
maturity at par of such underlying obligation, or (c) if the instrument may be
redeemed at a price below the purchase price. Eligible Investments that are
subject to prepayment or call may not be purchased at a price in excess of
par.
"Escrow Account" shall mean the separate trust account or accounts
created and maintained by the Servicer for the deposit and retention of Escrow
Payments pursuant to Section 3.06 of this Agreement which shall be entitled
"GMAC Mortgage Corporation, as Servicer, in trust for Xxxxxx Xxxxxxx Mortgage
Capital Inc., as Owner of the Mortgage Loans."
"Escrow Mortgage Loans" shall mean the Mortgage Loans for which
the Servicer has established an Escrow Account for items constituting Escrow
Payments.
"Escrow Payment" shall mean the amounts constituting any of
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 Obligor with
the Mortgagee pursuant to the Mortgage or any other document.
"Event of Default" shall mean any one of the events enumerated in
Sections 8.01 and 8.02 of this Agreement.
"Exchange Act" The Securities Exchange Act of 1934, as amended.
"Xxxxxx Mae" shall mean the Federal National Mortgage Association,
or any successor thereto.
"Xxxxxx Xxx Guides" shall mean the Xxxxxx Mae Seller's Guide and
the Xxxxxx Xxx Servicer's Guide and all amendments or additions thereto.
"FDIC" shall mean the Federal Deposit Insurance Corporation, or
any successor thereto.
"Fidelity Bond" shall mean a fidelity bond to be maintained by the
Servicer pursuant to Section 3.12.
"Final Recovery Determination" shall mean, with respect to any
defaulted Mortgage Loan or any REO Property, a determination made by the
Servicer that all Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds and any other payments and recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered.
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"Fitch" shall mean Fitch, Inc. or its successors and assigns.
"Fixed Rate Mortgage Loan" shall mean a Mortgage Loan which
provides for a fixed Mortgage Interest Rate payable with respect thereto.
"Xxxxxxx Mac" shall mean the Federal Home Mortgage Loan Mortgage
Corporation, or any successor thereto.
"Xxxxxxx Mac Guides" shall mean the Xxxxxxx Mac Seller's &
Servicer's Guide and all amendments or additions thereto.
"GAAP" shall mean the generally accepted accounting principles.
"HUD" shall mean the United States Department of Housing and Urban
Development or its successors and assigns.
"Indemnified Party" shall have the meaning set forth in Section
20.
"Indemnitor" shall have the meaning set forth in Section 20.
"Index" shall mean, with respect to each Adjustable Rate Mortgage
Loan and with respect to each related Interest Rate Adjustment Date, the index
as specified in the related Mortgage Note.
"Insurance Proceeds" shall mean, with respect to each Mortgage
Loan, all proceeds of any insurance policy or other insurance policies
insuring the Mortgage Loan or the related Mortgaged Property.
"Interest Rate Adjustment Date" shall mean, with respect to an
Adjustable Rate Mortgage Loan, the date on which the Mortgage Interest Rate is
adjusted with respect to such Mortgage Loan. The first Interest Rate
Adjustment Date for each Adjustable Rate Mortgage Loan is set forth on the
Mortgage Loan Schedule.
"IRS" shall mean the Internal Revenue Service, or any successor
thereto.
"Legal File" shall mean the file containing those items listed in
Exhibit C attached hereto and incorporated herein, and any additional
documents required to be added thereto pursuant to this Agreement.
"Liquidation Proceeds" shall mean the amounts, other than
Insurance Proceeds and Condemnation Proceeds, received in connection with the
liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than amounts received following the acquisition of
REO Property.
"LPMI Policy" A policy of primary mortgage guaranty insurance
issued by an insurer pursuant to which the related premium is to be paid by
the servicer of the related Mortgage Loan from payments of interest made by
the Mortgagor in an amount as is set forth in the related Mortgage Loan
Schedule.
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"Manual Boarding" shall mean, with respect to a Mortgage Loan, the
manual entry of Mortgage Loan data onto the Servicing database of the
Servicer, which can occur either when there is no Electronic File relating to
a Mortgage Loan or the related Electronic File is not transferred in a
successful, complete and timely manner.
"Maximum Rate" shall mean, with respect to each Adjustable Rate
Mortgage Loan, the amount set forth in the Note as the maximum Mortgage
Interest Rate thereunder.
"MERS" shall mean Mortgage Electronic Registration Systems, Inc.,
a Delaware corporation, or any successor in interest thereto.
"MERS Eligible Mortgage Loan" shall mean 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" shall mean 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.
"Minimum Rate" shall mean, with respect to each Adjustable Rate
Mortgage Loan, the amount set forth in the Note as the minimum Mortgage Rate
Interest thereunder.
"Monthly Payment" shall mean, with respect to any Mortgage Loan
and any Due Date, the scheduled monthly payment of principal and interest on
such Mortgage Loan which is payable by a Mortgagor under the related Note as
originally executed (after adjustment, if any, for Principal Prepayments and
for Deficient Valuations occurring prior to such Due Date, and after any
adjustment by reason of any bankruptcy or similar proceeding or any moratorium
or similar waiver or grace period).
"Moody's" shall mean Xxxxx'x Investors Service, Inc., or its
successor in interest.
"Mortgage" shall mean the mortgage, deed of trust or any other
instrument securing the Mortgage Loan, together with any riders, addenda or
amendments thereto.
"Mortgage File" shall collectively mean the Servicing File and the
Legal File for any Mortgage Loan.
"Mortgage Interest Rate" shall mean, with respect to any Mortgage
Loan, the annual rate at which interest accrues on such Mortgage Loan, as
adjusted from time to time in accordance with the provisions of the Note in
the case of an Adjustable Rate Mortgage Loan.
"Mortgage Interest Rate Margin" shall mean, with respect to
Adjustable Rate Mortgage Loans, the percentage to be added to the specified
Index identified in the related Note for the purpose of calculating the
applicable Mortgage Interest Rate.
"Mortgage Loan" or "Mortgage Loans" shall mean each of the
mortgage loans acquired by the Owner and which are from time to time serviced
pursuant to the terms of this
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Agreement and the Mortgage Loans so serviced at any point in time being
identified on a Mortgage Loan Schedule. To the extent applicable and as the
context so permits, as used herein, the term "Mortgage Loan" includes the
related Note and Mortgage, and any and all references to "Mortgage Loan" or
"Mortgage Loans" herein shall be deemed to include any Mortgage Loan that has
become an REO Property.
"Mortgage Loan Remittance Rate" shall mean, with respect to each
Mortgage Loan, the related Mortgage Interest Rate minus the related Servicing
Fee Rate.
"Mortgage Loan Schedule" shall mean the schedule of Mortgage Loans
setting forth the information itemized on Exhibit E (attached hereto and
incorporated herein) with respect to such Mortgage Loans, which schedule shall
be attached to the applicable Acknowledgment Agreement and deemed to
supplement this Agreement and become part hereof on the related Closing Date.
"Mortgage Note" or "Note" shall mean the original executed
promissory note or other original evidence of indebtedness executed by the
respective obligor to evidence such obligor's indebtedness under the related
Mortgage Loan containing all intervening endorsements, exhibits, riders and
amendments thereto, if any, evidencing a complete chain of Owner from the
originator to the Owner.
"Mortgaged Property" shall mean the underlying real property
securing a Mortgage Loan.
"Mortgagee" shall mean the mortgagee or beneficiary named in the
Mortgage and the successors and assigns of such mortgagee or beneficiary.
"Mortgagor" shall mean the obligor or obligors on a Note.
"Nonrecoverable Advance" shall mean any Servicing Advance or P&I
Advance previously made or proposed to be made in respect of a Mortgage Loan
or REO Property which, in the good faith judgment of the Servicer after taking
into account other preexisting liens and claims against such proceeds, will
not or, in the case of a proposed Servicing Advance or a proposed P&I Advance,
would not be ultimately recoverable from related late payments, Insurance
Proceeds, Condemnation Proceeds, or Liquidation Proceeds on such Mortgage Loan
or REO Property as provided herein.
"Non-Escrow Mortgage Loan" shall mean any Mortgage Loan which is
not an Escrow Mortgage Loan.
"Obligor" shall mean any Person obligated for payment of a
Mortgage Loan or who has transferred or assigned any property interest to
Owner to secure payment of such Mortgage Loan.
"Officer's Certificate" shall mean a certificate signed by a Vice
President or an Assistant Vice President and by an Assistant Treasurer or
Assistant Secretary of the Servicer, and delivered to the Owner as required by
this Agreement.
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"Owner" shall mean Xxxxxx Xxxxxxx Mortgage Capital Inc., or its
successor or assigns.
"Owner Servicing Guidelines" shall mean the Owner's guidelines for
the servicing of Distressed Mortgage Loans and REO Property, as determined by
the Owner from time to time.
"P&I Advance" shall mean the portion of each Monthly Payment
delinquent with respect to each Mortgage Loan at the close of business on the
Determination Date and required to be advanced by the Servicer pursuant to
Section 4.03.
"Periodic Rate Cap" shall mean with respect to each Adjustable
Rate Mortgage Loan, the provision in the Mortgage Note that limits permissible
increases and decreases in the Mortgage Interest Rate on any Interest Rate
Adjustment Date.
"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PMI Policy" A policy of primary mortgage guaranty insurance
issued by a Qualified Insurer, as required by this Agreement with respect to
certain Mortgage Loans.
"Policy" means a PMI Policy or LPMI Policy, as applicable.
"Prepayment Interest Shortfall Amount" shall mean, with respect to
each Remittance Date and any Mortgage Loan that was subject to a Principal
Prepayment during any Due Period, the amount, if any, by which one month's
interest at the related Mortgage Loan Remittance Rate on such Principal
Prepayment exceeds the amount of interest actually received in connection with
such Principal Prepayment.
"Prime Rate" shall mean the interest rate equal to the prime rate
of United States money center commercial banks as published from time to time
in The Wall Street Journal.
"Principal Prepayment" shall mean any payment or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled Due
Date, (excluding any prepayment penalty or premium thereon), which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
"Principal Prepayment Period" shall mean with respect to each
Remittance Date, the calendar month preceding the month in which such
Remittance Date occurs.
"Qualified Insurer" shall mean an insurance company duly qualified
as such under the laws of the states in which the Mortgaged Properties are
located, duly authorized and licensed in such states to transact the
applicable insurance business and to write the insurance provided, and
approved as an insurer by Xxxxxx Mae and Xxxxxxx Mac.
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"Rating Agency" shall mean Xxxxx'x, Fitch or S&P or their
respective successors and assigns. If such agency and its successors are no
longer in existence, "Rating Agency" shall be such nationally recognized
statistical rating agency, or other comparable Person, designated by the
Owner, notice of which designations shall be given to the Servicer. References
herein to the two highest long term debt rating categories of a Rating Agency
shall mean "A-2" or better and references herein to the highest short-term
debt rating of a Rating Agency shall mean "Prime-1" and in the case of any
other Rating Agency such references shall mean such rating categories without
regard to any plus or minus.
"Reconstitution" shall mean any Securitization Transaction or
Whole Loan Transfer.
"Reconstitution Agreements" shall have the meaning set forth in
Section 25.
"Reconstitution Date" shall have the meaning set forth in Section
25.
"Record Date" shall mean, with respect to each Remittance Date,
the last Business Day of the month immediately preceding the month in which
such Remittance Date occurs.
"Regulation AB" Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
"Remittance Advice Date" shall mean the 10th calendar day of each
month.
"Remittance Date" shall mean the 18th day of each month, or if
such 18th day is not a Business Day, the first Business Day immediately
following such 18th day.
"REO Disposition" shall mean the final sale by Servicer of any REO
Property.
"REO Property" shall mean a Mortgaged Property acquired by the
Owner as a result of the liquidation of a Mortgage Loan.
"Residential Dwelling" shall mean, except as excluded below, any
one of the following:
(i) a one-family dwelling, either attached or detached; or
(ii) a two- to four-family dwelling; or (
iii) a one-family dwelling unit in a condominium project
that meets the eligibility requirements of Xxxxxx Xxx; or
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(iv) a one-family dwelling, either attached or detached, in
a planned unit development; or
(v) a manufactured home recognized as a real property.
"Securities Act" The Securities Act of 1933, as amended.
"Securitization Transaction" Any transaction involving either (1)
a sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or
(2) an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
"Seller" shall mean the applicable Person from whom Owner acquires
one or more Mortgage Loans.
"Servic(e)(ed)(ing)" shall mean any function performed, to be
performed or allowed to be performed by Servicer with regard to the Mortgage
Loans pursuant to Accepted Servicing Practices and the terms and conditions of
this Agreement.
"Servicer" shall mean GMAC Mortgage Corporation, a Pennsylvania
corporation, and its successors in interest, and any successor Servicer
appointed hereunder.
"Servicer Information" As defined in Section 31.07(a).
"Servicing Advances" shall mean all customary, reasonable and
necessary "out of pocket" costs and expenses (including reasonable attorney's
fees and expenses) incurred by the Servicer in the performance of its
servicing obligations hereunder related to each Mortgage Loan (other than any
P&I Advances), including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of the Mortgaged
Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of the REO Property and
(iv) compliance with the obligations under Sections 3.01, 3.03, 3.09, and
3.14.
"Servicing Compensation" shall mean the Servicing Fee and other
amounts of additional servicing compensation to which the Servicer is entitled
pursuant to Section 5.01 of this Agreement.
"Servicing Criteria" The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
"Servicing Fee" shall mean, with respect to each Mortgage Loan,
the amount of the annual fee the Owner shall pay to the Servicer, which shall,
for each month, be equal to one-twelfth of (i) the product of the Servicing
Fee Rate and (ii) the Stated Principal Balance of such Mortgage Loan. Such fee
shall be payable monthly, computed on the basis of the same principal amount
and period respecting which any related interest payment on a Mortgage Loan is
computed, and shall be pro rated (based upon the number of days of the related
month the
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Servicer so acted as Servicer relative to the number of days in that month)
for each part thereof. The obligation of the Owner to pay the Servicing Fee is
limited to, and payable solely from, the interest portion of the related
Monthly Payments, Insurance Proceeds, Condemnation Proceeds and REO
Disposition Proceeds collected by the Servicer.
"Servicing Fee Rate" With respect to each Mortgage Loan, a per
annum rate as set forth in the Mortgage Loan Schedule.
"Servicing File" shall mean the file containing those items listed
in Exhibit D attached hereto and incorporated herein, and any additional
documents required to be added thereto pursuant to this Agreement.
"Servicing Transfer Date" shall mean the effective date of a
transfer of servicing from the Servicer to a Successor Servicer, as provided
in Section 10 of this Agreement.
"Standard & Poor's" or "S&P" shall mean Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., or its successor in
interest.
"Stated Principal Balance" shall mean, as to each Mortgage Loan as
to any date of determination, (i) the principal balance of the Mortgage Loan
at the related Cut-off Date after giving effect to payments of principal due
on or before such date, whether or not received, minus (ii) all amounts
previously distributed to the Owner with respect to the related Mortgage Loan
representing payments or recoveries of principal, or advances in lieu thereof
on such Mortgage Loan.
"Static Pool Information" Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
"Static Pool Party" As defined in Section 31.03(g).
"Subcontractor" Any vendor, subcontractor or other Person that is
not responsible for the overall servicing (as "servicing" is commonly
understood by participants in the mortgage-backed securities market) of
Mortgage Loans but performs one or more discrete functions identified in Item
1122(d) of Regulation AB with respect to Mortgage Loans under the direction or
authority of the Servicer or a Subservicer.
"Subservicer" Any Person that services Mortgage Loans on behalf of
the Servicer or any Subservicer and is responsible for the performance
(whether directly or through Subservicers or Subcontractors) of a substantial
portion of the material servicing functions required to be performed by the
Servicer under this Agreement or any Reconstitution Agreement that are
identified in Item 1122(d) of Regulation AB.
"Successor Servicer" shall have the meaning as set forth in
Section 10.02(a) below.
"Transaction Servicer" As defined in Section 31.03(c).
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"Whole Loan Transfer" shall mean any sale or transfer of some or
all of the Mortgage Loans other than a Securitization Transaction.
SECTION 2. OWNER'S RESPONSIBILITIES AND ENGAGEMENT OF SERVICER TO PERFORM
--------------------------------------------------------------
SERVICING RESPONSIBILITIES
--------------------------
2.01 Contract for Servicing. The Owner, by execution and delivery
of this Agreement and the related Acknowledgment Agreement (including a
related Mortgage Loan Schedule), does hereby contract with the Servicer for
the Servicing of the Mortgage Loans subject to the terms of this Agreement.
The Owner may request the Servicer to Service certain additional Mortgage
Loans from time to time acquired by it through bulk acquisitions or other
means, and each such request shall be evidenced by execution of a separate
Acknowledgment Agreement (including a related Mortgage Loan Schedule) in the
form attached hereto as Exhibit F.
2.02 [Reserved.]
2.03 Exclusive Right to Service. Subject to the termination
provisions set forth in Section 9, the Servicer shall have the exclusive right
to Service the Mortgage Loans from and after the related Closing Date and
during the term of this Agreement, unless Servicer expressly agrees otherwise
in writing.
2.04 [Reserved].
2.05 Delivery of Powers of Attorney. If reasonably required by the
Servicer, the Owner shall furnish the Servicer with any powers of attorney and
other documents necessary to enable the Servicer to carry out its servicing
and administrative duties under this Agreement.
2.06 Record Title to Mortgage Loans. Record title to the Mortgage
Loans shall be retained by the Owner or its designee. The ownership of each
Mortgage Loan, including the Mortgage Note, the Mortgage, the contents of the
related Mortgage File and all rights, benefits, proceeds and obligations
arising therefrom or in connection therewith, is vested in the Owner. All
rights arising out of the Mortgage Loans including, but not limited to, all
funds received on or in connection with the Mortgage Loans and all records or
documents with respect to the Mortgage Loans prepared by or which come into
the possession of the Servicer shall be received and held by the Servicer in
trust for the benefit of the Owner as the Owner of the Mortgage Loans.
2.07 Books and Records. The Servicer shall be responsible for
maintaining, and shall maintain, a complete set of books and records for the
Mortgage Loan which shall be clearly marked to reflect the ownership by the
Owner of each Mortgage Loan.
2.08 Transfer of Mortgage Loans.
(a) The Servicer shall keep at its Servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Servicer shall note transfers of
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Mortgage Loans. For the purposes of this Agreement, the Servicer shall be
under no obligation to deal with any Person but the Owner with respect to this
Agreement or the Mortgage Loans unless the books and records show such Person
as the owner of the Mortgage Loans. Upon receipt of a written notice from the
Owner of the assignment of any Mortgage Loans and this Agreement with respect
to such Mortgage Loans, the Servicer shall xxxx its books and records to
reflect the ownership of the Mortgage Loans by such assignee, and the previous
Owner shall be released from its obligations hereunder to the extent such
obligations relate to Mortgage Loans sold by the Owner. Except as set forth in
subsection (b) of this Section 2.08 or in Section 9, all Mortgage Loan
transfers shall be subject to and Serviced pursuant to this Agreement or as
mutually agreed upon by the parties as evidenced by The Service Release and
Transfer of Ownership Agreement attached hereto as Exhibit H.
(b) The Owner shall have the right at any time to transfer (i) one
or more Mortgage Loans without assigning this Agreement to a successor Owner
or (ii) the servicing with respect to one or more Mortgage Loans. In
connection with any such transfer, the terms of this Agreement shall no longer
govern the servicing of such Mortgage Loans from and after the Servicing
Transfer Date and Section 9.02 shall apply to any such transfer.
SECTION 3. SERVICING OF THE MORTGAGE LOANS
-------------------------------
3.01 Servicer to Service.
(a) The Servicer, as an independent contractor, shall administer
the Mortgage Loans from and after the related Closing Date and shall be
responsible for Servicing the Mortgage Loans as of the related Closing Date,
and shall have full power and authority, acting alone, to do any and all
things in connection with such Servicing and administration which the Servicer
may deem necessary or desirable, consistent with the terms of this Agreement
and with Accepted Servicing Practices, including (without limitation) the
execution and delivery, on behalf of itself and the Owner, (i) of all
agreements and instruments of subordination, of satisfaction, discharge or
cancellation, and of partial or full release; and (ii) of all other comparable
agreements and instruments with respect to the Mortgage Loans and with respect
to the Mortgaged Properties. The Servicer may take any and all actions
relative to the Servicing and administration of the Mortgage Loans that are
consistent with Accepted Servicing Practices; provided, however, that all
Distressed Mortgaged Loans shall be transferred by the Owner when a Mortgage
Loan is 90 days delinquent. In the event, the Owner chooses to have the
Servicer service Distressed Mortgage Loans, the Owner Servicing Guidelines
shall be mutually agreed upon between the Servicer and the Owner pursuant to a
side agreement. The Servicer shall provide Owner the reports described on
Schedule I, attached hereto and made a part hereof.
(b) Without limiting the foregoing, the Servicer may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any
Mortgagor, if in the Servicer's reasonable and prudent determination such
waiver, modification, postponement or indulgence could be in the best interest
of the Owner. The Servicer shall not take any such action if that action will
cause a Mortgage Loan not to constitute a "qualified mortgage" within the
meaning of Section 860(G)(a)(3) of the Code.
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(c) The Servicer shall not waive any prepayment charge in full or
in part unless such waiver would maximize recovery of total proceeds taking
into account the value of such prepayment charge and the related Mortgage
Loan, and doing so is standard and customary practice in Servicing similar
Mortgage Loans. In addition, the Servicer may waive a prepayment charge on any
Mortgage Loan in full or in part if the Servicer has determined, in its
reasonable business judgment and in connection with the conduct of its
business in accordance with applicable requirements, that the prepayment
charge should be waived. If such waiver is primarily for the benefit of the
Servicer, the waived amount of such prepayment charge shall be immediately
deposited in the Collection Account by the Servicer out of its own funds,
without any right of reimbursement, therefor. The Servicer shall administer
the enforcement and collection of all prepayment charges in accordance with
the related mortgage documents or applicable state or federal law and shall
provide to the related Mortgagor any reports required to be provided to them
in connection therewith.
Servicer's enforcement and administration of prepayment charges
shall, where legally possible, be in accordance with Schedule III, attached
hereto and incorporated herein; provided, however, the Servicer shall confirm
that the related prepayment charge listed on Schedule III matches the
prepayment change in the Mortgage Note prior to enforcing such prepayment
charge and shall act in accordance with the Mortgage Note in the event of a
discrepancy. Said Schedule III shall be compiled and provided by the Owner to
the Servicer, on or prior to the related Closing Date, and shall set forth
each type of prepayment penalty provision found in the Mortgage Loans and the
method to be used by Servicer for calculating each such provision. Where an
electronically transferable file contains insufficient data, or no data, to
calculate any applicable prepayment penalty or other contractual charge, fee
or penalty, Transfer of such file may be accomplished only by Manual Boarding.
In such case, and if such data cannot be obtained from Schedule III, Owner
shall be given a reasonable opportunity, not to exceed three business days
from the discovery of the deficiency, to interpret the applicable prepayment
penalty or other contractual charge, fee or penalty provision, and to inform
Servicer of such interpretation. Should Owner fail to provide such
interpretation to Servicer within the allotted time period, the Servicer shall
make a good faith effort to accurately review the applicable Mortgage Loan
documents and interpret the applicable prepayment penalty or other contractual
charge, fee or penalty provision. Similarly, if Owner fails to provide
Schedule III on or prior to the related Closing Date, Servicer shall enforce,
administer and collect such prepayment charges in accordance to the policies
and procedures it applies to similar Mortgage Loans serviced for its own
account. Servicer may rely on any data provided by Owner on Schedule III or
otherwise, and, in the event Owner has failed to timely provide such data to
Servicer, Servicer may rely on its own interpretations made on behalf of Owner
as set forth above.
3.02 Collection of Mortgage Loan Payments; Notification of
Adjustments. 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 with respect to Escrow Mortgage Loans only, 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.
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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. Upon the discovery by
the Servicer or the receipt of notice from the Owner 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 Collection Account from its own funds, without any right to
reimbursement, the amount of any interest loss or deferral caused the Owner
thereby.
3.03 Realization Upon Defaulted Mortgage Loans.
(a) In the event that any payment due under any Mortgage Loan is
not paid when the same becomes due and payable, or in the event the Mortgagor
fails to perform any other covenant or obligation under the Mortgage Loan and
such failure continues beyond any applicable grace period, the Servicer shall
take such action (i) as it shall deem to be in the best interest of the Owner
(which shall include, but not be limited to, Mortgage Loan liquidation and
short sales) and (ii) that is consistent with any related PMI Policy. In
connection with a foreclosure or other conversion, the Servicer shall exercise
such rights and powers vested in it hereunder and use the same degree of care
and skill in its exercise as it customarily employs with respect to mortgage
loans Serviced for its own account, giving due consideration to Accepted
Servicing Practices, including, without limitation, advancing funds for the
payment of taxes and insurance premiums. During this period and in the
administration of such defaulted Mortgage Loans, the Servicer shall be
responsible for making all customary Servicing Advances. Notwithstanding
anything to the contrary contained herein, in no event will the Servicer make
a Servicing Advance if it determines, using Accepted Servicing Practices, that
such Servicing Advance would be a Nonrecoverable Advance. The determination by
the Servicer that it has made a Nonrecoverable Advance or that any proposed
Servicing Advance, if made would constitute a Nonrecoverable Advance, shall be
evidenced by an officer's certificate of the Servicer delivered to the Owner.
Servicer shall be reimbursed for all Servicing Advances made with respect to
such defaulted Mortgage Loans from the Collection Account pursuant to Section
3.05 herein.
(b) Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure,
in the event the Servicer has reasonable cause to believe that a Mortgaged
Property is contaminated by hazardous or toxic substances or wastes or if the
Mortgage Property poses any type of environmental risks or if the Owner
otherwise requests an environmental inspection or review of such Mortgaged
Property to be conducted by a qualified inspector, the Servicer shall cause
such inspection to occur solely at the expense of the Owner. If the Servicer
shall advance or use its own money to effect such environmental inspection,
the Servicer shall reimburse itself from the Collection Account. If the
Collection Account fails to maintain sufficient funds to reimburse the
Servicer, the Owner shall directly reimburse the Servicer of such advance
within five (5) Business Days upon receipt of an invoice from the Servicer.
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(c) Upon completion of an environmental inspection, the Servicer
shall promptly provide the Owner with the environmental inspection report.
After reviewing the environmental inspection report, the Owner shall determine
how the Servicer shall proceed with respect to the Mortgaged Property. In the
event (i) the environmental inspection report indicates that the Mortgaged
Property is contaminated by hazardous, toxic substances or wastes or poses
environmental risks of any kind, and (ii) the Owner directs the Servicer, in
writing, to proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, the Servicer shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of
foreclosure and any related environmental clean up costs, as applicable, from
the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Servicer, the Servicer shall be entitled
to be reimbursed from amounts in the Collection Account pursuant to Section
3.05 herein and in the event amounts in the Collection Account are
insufficient to fully reimburse the Servicer, the Servicer shall be entitled
to reimbursement directly from the Owner within five (5) Business Days upon
receipt of an invoice from the Servicer. In the event the Owner directs the
Servicer, in writing, not to proceed with foreclosure or acceptance of a deed
in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing
Advances made with respect to the related Mortgaged Property from the
Collection Account pursuant to Section 3.05 herein and in the event amounts in
the Collection Account are insufficient to fully reimburse the Servicer, the
Servicer shall be entitled to reimbursement from the Owner.
3.04 Establishment of and Deposits to Collection 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 Collection Accounts, if
necessary. Each Collection Account shall be an Eligible Account. Funds
deposited in the Collection Account may be withdrawn by the Servicer in
accordance with Section 3.05 herein. The creation of any Collection Account
shall be evidenced by a letter agreement in the form of Exhibit A attached
hereto and incorporated herein. The Servicer shall deposit in the Collection
Account on a daily basis in accordance with its Accepted Servicing Practices,
and retain therein, the following collections received by the Servicer and
payments made by the Servicer on or after the related Closing Date through the
Servicing Transfer Date:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) [Reserved];
(iii) all payments on account of interest on the Mortgage Loans
minus all Servicing Fees attributable thereto;
(iv) all Liquidation Proceeds;
(v) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 3.10 herein (other than proceeds to be
held in the Escrow Account and applied to the restoration and repair of
the Mortgaged Property or released to the Mortgagor in accordance with
Sections 3.14 and 3.18 herein);
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(vi) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or release to the
Mortgagor;
(vii) any amount required to be deposited in the Collection
Account pursuant to Section 3.01, 3.08 or 3.10 herein:
(viii) any amounts required to be deposited by the Servicer
pursuant to Section 3.11 herein in connection with the deductible clause
in any blanket hazard insurance policy;
(ix) with respect to each Principal Prepayment, the Prepayment
Interest Shortfall Amount, if any, for the month of distribution. Such
deposit shall be made from the Servicer's own funds; and
(x) any amounts received with respect to or related to any REO
Property or REO Disposition Proceeds.
The foregoing requirements for deposit into the Collection Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of Servicing Fees or
Ancillary Income need not be deposited by the Servicer into the Collection
Account. Any interest paid on funds deposited in the Collection 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
Collection Account pursuant to Section 3.05 herein. Additionally, any other
benefit derived from the Collection Account associated with the receipt,
disbursement and accumulation of principal, interest, taxes, hazard insurance,
mortgage blanket insurance, and like sources, shall accrue to the benefit of
the Servicer.
3.05 Permitted Withdrawals from Collection Account. The Servicer
shall, from time to time, withdraw funds from the Collection Account for the
following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided for in Section 4.01 herein;
(ii) to reimburse itself for all P&I Advances of the Servicer's
funds made pursuant to Section 4.03, it being understood that, in the
case of any such reimbursement, the Servicer's rights hereto shall be
prior to the rights of the Owner under this Section 3.05; provided,
however, that the Servicer's right to reimburse itself pursuant to this
subclause (ii) with respect to any Mortgage Loan being limited to
amounts received on the related Mortgage Loan (including without
limitation, late recoveries of payments from the Mortgagor, Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds with respect to
such Mortgage Loan to the extent collected) which represent late
payments of principal and/or interest respecting which any such P&I
Advance was made; provided, further, that if such amounts are
insufficient to reimburse the Servicer, or if the Servicer determines,
using Accepted Servicing Practices, that such xxxxxxxxxxxx X&X Advance
would be a Nonrecoverable Advance the Servicer shall be entitled to
reimburse itself from other funds in the Collection Account;
19
(iii) to reimburse itself for all unreimbursed Servicing Advances,
it being understood that, in the case of any such reimbursement, the
Servicer's right thereto shall be prior to the rights of the Owner under
this Section 3.05; provided, however, that the Servicer's rights to
reimburse itself pursuant to this subclause (iii) with respect to any
Mortgage Loan being limited to related Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds; provided, further, that if
such amounts are insufficient to reimburse the Servicer, or if the
Servicer determines, using Accepted Servicing Practices, that such
unreimbursed Servicing Advance would be a Nonrecoverable Advance the
Servicer shall be entitled to reimburse itself from other funds in the
Collection Account;
(iv) to pay itself interest on funds deposited in the Collection
Account pursuant to Section 3.08 and to pay itself the Servicing Fees
pursuant to Section 5.01 of this Agreement (less Compensating Interest
payments required to be made by the Servicer hereunder);
(v) [Reserved];
(vi) to pay or to reimburse itself for advances with respect to
expenses incurred in connection with any Mortgage Loan, including, but
not limited to environmental expenses pursuant to Sections 3.03(b) and
(c) herein but only to the extent the Servicer is entitled to
reimbursement therefore under this Agreement;
(vii) to pay any amount required to be paid pursuant to Section
3.14 related to any REO Property and Section 3.16 related to the
satisfaction of the Mortgage Loan;
(viii) to invest funds in certain Eligible Investments in
accordance with Section 3.08 herein;
(ix) to transfer funds to another Eligible Account in accordance
with Section 3.08 herein;
(x) to clear and terminate the Collection Account upon the
termination of this Agreement; and
(xi) to withdraw funds deposited in error.
The Servicer shall keep and maintain separate accounting, on a
loan-by-loan basis, for the purpose of justifying any withdrawal from the
Collection Account pursuant to subsections (ii), (iii), (iv), (vi) and (vii)
above.
3.06 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. Each Escrow Account shall be an Eligible Account. Funds
deposited in the Escrow Account may be withdrawn by the Servicer in accordance
with Section 3.07 of this Agreement. The creation of any Escrow Account shall
be evidenced by a letter agreement in the form of Exhibit B attached hereto
and incorporated
20
herein. A copy of such letter agreement shall be furnished to the Owner 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, in accordance with its standard practice, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Servicer shall make withdrawals from the Escrow Account only
to effect such payments as are required under this Agreement, as set forth in
Section 3.07 of this Agreement. 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.
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.
3.07 Permitted Withdrawals from Escrow Account. The Servicer
shall, from time to time, withdraw funds from the Escrow Account for the
following purposes:
(i) to effect payments of ground rents, taxes, assessments, water
rates, condominium charges, fire and hazard insurance premiums or other
items constituting obligations with respect to which Escrow Payments are
collected for the related Mortgage;
(ii) to reimburse itself for any Servicing Advance made by it with
respect to a related Mortgage Loan, but only from amounts received on
the related Mortgage Loan which represent late collections of Escrow
Payments thereunder;
(iii) to refund to the related Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Mortgage
Loan;
(iv) for transfer to the Collection Account and application to
reduce the principal balance of the Mortgage Loan in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to restore or repair of the Mortgaged Property
in accordance with the procedures outlined in Section 3.14 herein;
(vi) to pay to the Servicer, or the related Mortgagor to the
extent required by law, any interest paid on the funds deposited in the
Escrow Account;
(vii) to clear and terminate the Escrow Account on the termination
of this Agreement; and
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(viii) to withdraw funds deposited in error.
3.08 Protection of Accounts. The Collection Account and Escrow
Account shall be Eligible Accounts at all times. The Servicer may transfer the
Collection Account or the Escrow Account to a different Eligible Account from
time to time. The Servicer shall bear any expenses, losses or damages
sustained by the Owner because the Collection Account and/or the Escrow
Account are not Eligible Accounts.
Amounts on deposit in the Collection Account may at the option of
the Servicer be invested in Eligible Investments. Any such Eligible Investment
shall be made in the name of the Servicer in trust for the benefit of the
Owner. All income on or gain realized from any such Eligible Investment shall
be for the benefit of the Servicer and may be withdrawn from the Collection
Account at any time by the Servicer. Any losses incurred in respect of any
such investment shall be deposited in the Collection Account, by the Servicer
out of its own funds immediately as realized.
3.09 Payment of Taxes, Insurance and Other Charges. With respect
to each Escrow Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property, the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of
such charges (including renewal premiums) and, shall effect payment thereof
prior to the applicable penalty or termination date, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. The Servicer assumes
full responsibility for the timely payment of all such bills and shall effect
timely payment of all such charges irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments, and
the Servicer shall make advances from its own funds to effect such payments.
With respect to Non-Escrow Mortgage Loans, 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 became due and
that such Mortgage is not left uninsured and shall make advances from its own
funds to effect any such delinquent payments to avoid the lapse of insurance
coverage on the Mortgaged Property or to avoid the sale or other loss of the
Mortgage Property to a tax lien. Such advances made by the Servicer shall be
considered Servicing Advances subject to reimbursement pursuant to Section 3
herein.
3.10 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 an insurer that conforms with the
Xxxxxx Xxx Guides and Xxxxxxx Mac Guides against loss by fire, hazards of
extended coverage and such other hazards as are required to be insured
pursuant to the Xxxxxx Xxx Guides or Xxxxxxx Mac Guides, in an amount which is
at least equal to the least of: (i) 100% of the maximum insurable value of the
improvements securing such Mortgage Loan; or (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor or the loss
payee from becoming a co-insurer; or (iii) the amount determined by applicable
federal or state law. If the Mortgagor fails to provide Mortgage Loan hazard
insurance coverage after thirty (30) days of Servicer's written notification,
the Servicer may
22
force place such hazard insurance coverage on the Mortgagor's behalf. Any
out-of-pocket expense or advance made by the Servicer on such force placed
hazard insurance coverage shall be deemed a Servicing Advance.
If upon origination of the Mortgage Loan, the related Mortgaged
Property was located in an area identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards
(and such flood insurance has been made available) a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect with an insurance carrier that meets the
requirements of the Xxxxxx Xxx Guides and the Xxxxxxx Mac Guides in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured), and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Servicer determines in accordance with applicable law and
pursuant to the FEMA Guides that a Mortgaged Property is located in a special
flood hazard area and is not covered by flood insurance or is covered in an
amount less than the amount required by the Flood Disaster Protection Act of
1973, as amended, the Servicer shall notify the related Mortgagor to obtain
such flood insurance coverage, and if said Mortgagor fails to obtain the
required flood insurance coverage within forty-five (45) days after such
notification, the Servicer shall immediately force place the required flood
insurance on the Mortgagor's behalf. Any out-of-pocket expense or advance made
by the Servicer on such force placed flood insurance coverage shall be deemed
a Servicing Advance.
If a Mortgage is secured by a unit in a condominium project, the
Servicer shall verify that the coverage required of the Owner's association,
including hazard, flood, liability, and fidelity coverage is being maintained
in accordance with the current Xxxxxx Xxx requirements, and secure from the
Owner's association its agreement to notify the Servicer promptly of any
change in the insurance coverage or of any condemnation or casualty loss that
may have a material effect on the value of the Mortgaged Property as security.
In the event the Owner or the Servicer shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and
risks not covered by the insurance required to be maintained by the Mortgagor
pursuant to the terms of the Mortgage, the Servicer may, at its discretion,
communicate with the Mortgagor with respect to the need for such insurance and
bring to the Mortgagor's attention the desirability of protection of the
Mortgaged Property.
All policies required hereunder shall name the Servicer as loss
payee and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least thirty (30) days prior written
notice of any cancellation, reduction in amount or material change in
coverage.
The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies are acceptable under the Xxxxxx Mae Guides and
Xxxxxxx Mac Guides and are licensed to do
23
business in the jurisdiction in which the Mortgaged Property is located. The
Servicer shall determine that such policies provide sufficient risk coverage
and amounts, that they insure the property, and that they properly describe
the property address. The Servicer shall furnish to the Mortgagor a formal
notice of expiration of any such insurance in conformance with Servicer's
standard practices; provided, however, that in the event that no such notice
is furnished by the Servicer, the Servicer shall ensure that replacement
insurance policies (whether forced placed or other insurance policies) are in
place with the required coverage and the Servicer shall be solely liable for
any losses in the event coverage is not provided.
Pursuant to Section 3.04 of this Agreement, any amounts collected
by the Servicer under any such policies (other than amounts to be deposited in
the Escrow Account and applied to the restoration or repair of the related
Mortgaged Property, or property acquired in liquidation of the Mortgage Loan,
or to be released to the Mortgagor, in accordance with the Servicer's normal
Servicing procedures as specified in Section 3.14 of this Agreement) shall be
deposited in the Collection Account subject to withdrawal pursuant to Section
3.05 of this Agreement.
3.11 Maintenance of Mortgage Blanket Insurance. In the event that
the Servicer shall obtain and maintain a blanket policy insuring against
losses arising from fire and hazards covered under extended coverage on all of
the Mortgage Loans, then, to the extent such policy provides coverage in an
amount equal to the amount required pursuant to Section 3.10 of this Agreement
and otherwise complies with all other requirements of Section 3.10 of this
Agreement, it shall conclusively be deemed to have satisfied its obligations
as set forth in Section 3.10 of this Agreement. Any amounts collected by the
Servicer under any such policy relating to a Mortgage Loan shall be deposited
in the Collection Account or Escrow Account subject to withdrawal pursuant to
Section 3.05 or 3.07 of this Agreement. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained
on the related Mortgaged Property a policy complying with Section 3.10 of this
Agreement, and there shall have been a loss which would have been covered by
such policy, the Servicer shall deposit in the Collection Account at the time
of such loss the amount not otherwise payable under the blanket policy because
of such deductible clause, such amount shall be deposited from the Servicer's
funds, without reimbursement therefor. Upon request of the Owner, the Servicer
shall cause to be delivered to such Owner a certified true copy of such policy
and a statement from the insurer thereunder that such policy shall in no event
be terminated or materially modified without thirty (30) days' prior written
notice to the Owner.
3.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Servicer Employees"). Any such Fidelity Bond
and Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions
and negligent acts of such Servicer Employees. Such Fidelity Bond and Errors
and Omissions Insurance Policy also shall protect and insure the Servicer
against losses in connection with the release or satisfaction of a Mortgage
Loan without having obtained payment in full of the indebtedness secured
thereby. No provision of this Section 3.12 requiring such Fidelity Bond and
Errors and Omissions Insurance Policy
24
shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts required
by Xxxxxx Mae in the Xxxxxx Xxx Guides or by Xxxxxxx Mac in the Xxxxxxx Mac
Guides.
3.13 Inspections. The Servicer shall inspect the Mortgaged
Property as often as deemed necessary by the Servicer to assure itself that
the value of the Mortgaged Property is being preserved and which is both
consistent with Accepted Servicing Practices and with any requirements of the
primary mortgage guaranty insurer.
3.14 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 Servicer, or in the event the Servicer 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 Servicer shall acknowledge in
writing that such title is being held as nominee for the Owner.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Owner 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, in the same locality as the REO Property is
located and consistent with the Owner Servicing Guidelines. 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 Owner.
The Servicer shall also maintain on each REO Property fire and
hazard insurance with extended coverage, liability insurance, and flood
insurance in accordance with the provisions of Section 3.09 and 3.10 hereof.
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 Owner. Prior to the disposition of
the REO Property, the Owner may provide a valuation for the REO Property to
the Servicer no later than three (3) Business Days after notification of the
Owner by the Servicer. The proceeds of sale of the REO Property shall be
promptly deposited in the Collection Account. As soon as practical thereafter
the expenses of such sale shall be paid and the Servicer shall reimburse
itself for any related xxxxxxxxxxxx X&X Advances, Servicing Advances, unpaid
Servicing Fees, and on the Remittance Date immediately following the date on
which such sale proceeds are received the net cash proceeds of such sale
remaining in the Collection Account shall be distributed to the Owner.
25
The Servicer shall advance funds necessary for the proper
operation, management and maintenance of the REO Property, including the cost
of maintaining any hazard or Flood insurance pursuant to this Section 3.14 and
the fees of any property manager appointed by the Servicer, shall be deemed
"Servicing Advances." The Servicer shall make monthly distributions on each
Remittance Date to the Owner 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 3.14 and of any reserves reasonably required from time to time
to be maintained to satisfy anticipated liabilities for such expenses).
3.15 Transfers of Mortgaged Property. The Servicer shall enforce
any "due-on-sale" provision contained in any Mortgage or Mortgage Note and to
deny assumption by the person to whom the Mortgaged Property has been or is
about to be sold whether by absolute conveyance or by contract of sale, and
whether or not the Mortgagor remains liable on the Mortgage and the Mortgage
Note; provided that, if the Servicer determines that a due-on-sale provision
is not enforceable or that either a decision not to exercise the due-on-sale
provision or a decision to permit an assumption of the Mortgage Loan is in the
best interests of the Owner, it may, with the prior consent of the primary
mortgage guaranty insurer, if applicable, permit such conveyance of the
Property without resort to the due-on-sale clause or permit such assumption,
as applicable, with notice to the Owner.
3.16 Satisfaction of Mortgages and Release of Mortgage Files. Upon
the payment in full of any Mortgage Loan, or the receipt by the Servicer of
notification that payment in full will be escrowed in a manner customary for
such purposes, the Servicer may notify the Owner, which notification shall
include a statement to the effect that all amounts received or to be received
in connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.04 herein have been or will be so
deposited, and may request delivery to it of the Mortgage File. In addition,
from time to time and as appropriate for the servicing or foreclosure of a
Mortgage Loan, including for this purpose collection under any insurance
policy, the Servicer may request delivery to it by Custodian of the related
Mortgage File. Upon receipt of such notification and request pursuant to this
Section 3.16, the Owner shall request that the Custodian, within five (5)
Business Days, release the related Mortgage File to the Servicer. Should
Servicer be called upon or elect to assist in obtaining any documents or
information which may be missing from the Legal File, Owner shall be required
to reimburse Servicer for any reasonable expense incurred by Servicer in
providing that assistance, whether or not Servicer is ultimately successful in
obtaining the missing information.
3.17 [Reserved.]
3.18 Maintenance of PMI Policy; Claims. With respect to each
Mortgage Loan with a loan-to-value ratio in excess of 80% for which a PMI
Policy is both required and has been issued, the Servicer shall, to the extent
permitted by Accepted Servicing Practices, maintain or cause the Mortgagor to
maintain in full force and effect a PMI Policy insuring that portion of the
Mortgage Loan in excess of 75% of value, and shall cause the Mortgagor to pay
the premium thereon on a timely basis, until the loan-to-value ratio of such
Mortgage Loan is reduced to 80% or PMI can otherwise no longer be mandated
pursuant to applicable law. In the event that such PMI Policy shall be
terminated, the Servicer shall attempt to obtain from another Qualified
Insurer a comparable replacement policy, with a total coverage
26
equal to the remaining coverage of such terminated PMI Policy. The Servicer
shall not take any action which would result in noncoverage under any
applicable PMI Policy of any loss which, but for the actions of the Servicer
would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to this
Agreement, the Servicer shall promptly notify the insurer under the related
PMI Policy, if any, of such assumption or substitution of liability in
accordance with the terms of such PMI Policy and shall take all actions which
may be required by such insurer as a condition to the continuation of coverage
under such PMI Policy. If such PMI Policy is terminated as a result of such
assumption or substitution of liability, the Servicer shall obtain a
replacement PMI Policy as provided above.
With respect to each Mortgage Loan covered by a PMI Policy or LPMI
Policy, the Servicer shall take all such actions on behalf of the Owner as are
necessary to service, maintain and administer the related Mortgage Loan in
accordance with such Policy and to enforce the rights under such Policy.
Except as expressly set forth herein, the Servicer shall have full authority
on behalf of the Owner to do anything it deems appropriate or desirable in
connection with the servicing, maintenance and administration of such Policy;
provided that the Servicer shall not take any action to permit any
modification or assumption of a Mortgage Loan covered by a LPMI or PMI Policy,
or take any other action with respect to such Mortgage Loan, which would
result in non-coverage under such Policy of any loss which, but for actions of
the Servicer, would have been covered thereunder. The Servicer shall cooperate
with the PMI insurers and shall furnish all reasonable evidence and
information in the possession of the Servicer to which the Servicer has access
with respect to the related Mortgage Loan. The Servicer agrees to prepare and
present, on behalf of itself and the Owner, claims to the insurer under any
PMI Policy or LPMI Policy in a timely fashion in accordance with the terms of
such PMI Policy or LPMI Policy and, in this regard, to take such action as
shall be necessary to permit recovery under any PMI Policy or LPMI Policy
respecting a defaulted Mortgage Loan. Pursuant to Section 3.04, any amounts
collected by the Servicer under any PMI Policy or LPMI Policy shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.05.
SECTION 4. PAYMENTS TO OWNER
-----------------
4.01 Remittances. On each Remittance Date, the Servicer shall
remit to the Owner the sum of (i) all amounts credited to the Collection
Account as of the close of business on the related preceding Determination
Date, net of charges against or withdrawals from the Collection Account
pursuant to Section 3.05 herein, other than Principal Prepayments received
after the end of the related Principal Prepayment Period, plus, to the extent
not already deposited in the Collection Account, (ii) all P&I Advances, if
any, which the Servicer is obligated to remit pursuant to Section 4.03 and
(iii) all Compensating Interest payable by the Servicer minus (iv) any amounts
attributable to Monthly Payments collected by the Servicer but due on a Due
Date or Due Dates subsequent to the last day of the related Due Period, which
amounts shall be remitted on the related Remittance Date next succeeding the
Due Period for such amounts.
With respect to any Mortgage Loan, during the term of this
Agreement, in the event such Mortgage Loan prepays in full, the Servicer shall
distribute such prepayment to the Owner, together with any related prepayment
charge, on the Remittance Date. In connection
27
with the distribution of such prepayment, the Servicer shall provide to the
Owner a report containing the mortgage loan number, the name of the Mortgagor
and the amount of the distribution.
All distributions made to the Owner on each Remittance Date will
be made to the Owner of record on the preceding Record Date, and shall be
based on the Mortgage Loans owned and held by the Owner. All distributions,
including any distribution for prepayments in full, shall be made by wire
transfer of immediately available funds to the account of the Owner at a bank
or other entity having appropriate facilities therefor as directed in writing
by the Owner or by check mailed to the address of the Owner.
With respect to any remittance received by the Owner after the
Business Day following the Business Day on which such payment was due, the
Servicer shall pay to the Owner 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
Collection Account by the Servicer on the date such late payment is made and
shall cover the period commencing with the day following such second Business
Day and ending with the Business Day on which such payment is made, both
inclusive. Such interest shall be remitted along with the distribution payable
on the next succeeding Remittance Date. The payment by the 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 Owner.
4.02 Reports to Owner. Not later than the Remittance Advice Date,
the Servicer shall furnish to the Owner as of the previous Determination Date,
by electronic or such other format acceptable to Owner and Servicer, the
information listed on Schedule I attached hereto.
In addition, the Servicer shall provide the Owner with such
information concerning the Mortgage Loans as is necessary for the Owner to
prepare its federal income tax return, and reports required by state and
federal regulatory agencies provided such information is in Servicer's
possession and is reasonably available to the Servicer.
4.03 P&I Advances by Servicer. (a) On the Business Day immediately
preceding each Remittance Date, the Servicer shall deposit in the Collection
Account from its own funds an amount equal to all P&I Payments (with interest
on each Mortgage Loan adjusted to the applicable Mortgage Loan Remittance
Rate) which were due on the Mortgage Loans during the applicable Due Period
and which were delinquent on the Business Day immediately preceding such
Remittance Date or which were deferred pursuant to this Agreement. The
Servicer's obligation to make such P&I Advances as to any Mortgage Loan will
continue through the last Monthly Payment due prior to the payment in full of
the Mortgage Loan, or through the last Remittance Date prior to the Remittance
Date for the distribution of all Liquidation Proceeds and other payments or
recoveries (including Insurance Proceeds and Condemnation Proceeds) with
respect to the Mortgage Loan; provided, that the Servicer shall not be
obligated to make P&I Advances which the Servicer determines to be
Nonrecoverable Advances. The determination by the Servicer that it has made a
Nonrecoverable Advance, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Owner and detailing the
28
reasons for such determination. The Servicer shall not be obligated to advance
shortfalls of interest resulting from the application of the Servicemembers
Civil Relief Act, as amended, or similar state laws.
(b) Such P&I Advance shall be made by the Servicer either (i) from
its own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of the Collection Account that amounts held
for future distribution have been, as permitted by this Section 4.03, used by
the Servicer in discharge of any such P&I Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of P&I Advances to be
made by the Servicer with respect to the Mortgage Loans and REO Properties.
Any amount held for future distribution and so used shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the Collection Account on or before any future Remittance Date to the extent
required.
SECTION 5. GENERAL SERVICING PROCEDURES
----------------------------
5.01 Servicing Compensation. As compensation for its services
hereunder, the Servicer shall be entitled to withdraw from the Collection
Account or to retain from interest payments on the Mortgage Loans the amount
of its Servicing Fee. The Servicing Fee shall be payable monthly and shall be
computed on the basis of the same unpaid principal balance and for the period
respecting which any related interest payment on a Mortgage Loan is computed.
The Servicer shall be entitled to its pro rata portion of the Servicing Fee
with respect to the transfer of Mortgage Loans on the Servicing Transfer Date
payable by the Owner on the Servicing Transfer Date.
Additional Servicing compensation in the form of Ancillary Income
shall be retained by the Servicer and is not required to be deposited in the
Collection Account.
5.02 Repayment of Servicing Advances. Subject to Section 3.05, on
each Remittance Date, or upon liquidation or transfer of servicing of a
Mortgage Loan, the Servicer shall be entitled to reimbursement for all due and
unpaid P&I Advances and Servicing Advances. The Servicer may reimburse itself
from the funds in the Collection Account for due and unpaid Servicing Advances
prior to distribution of such funds to the Owner. To the extent that there are
not sufficient funds in the Collection Account to reimburse the Servicer for
due and unpaid Servicing Advances, or if the Collection Account is no longer
in the Servicer's control, the Owner shall pay the amount of such shortfall to
the Servicer within five (5) Business Days upon receipt of an invoice
therefor. In addition to the data requirements listed on Schedule I, the
Servicer shall provide in its monthly remittance reports all information
relating to Servicing Advances as deemed necessary by the Owner in its
reasonable discretion.
5.03 Right to Examine Servicer Records. The Owner may examine and
audit the Servicer's books, records, or other information directly related to
or concerning this Agreement or the Mortgage Loans. Such examination and audit
shall occur during business hours or at such other times as may be reasonable
under applicable circumstances, upon at least three (3) days' advance notice
to the Servicer.
29
5.04 Annual Independent Public Accountants' Servicing Report. On
or before March 15, 2006, the Servicer, at its expense, shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to furnish a statement to each Owner stating that
(i) it has obtained a letter of representation regarding certain matters from
the management of the Servicer which includes an assertion that the Servicer
has complied with certain minimum residential mortgage loan servicing
standards, identified in the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America, with
respect to the servicing of residential mortgage loans during the most
recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the
American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to the exception and other
qualifications that may be appropriate.
5.05 Statement of Compliance. The Servicer will deliver to the
Owner not later than March 15, 2006, a statement of compliance confirming, as
to each signatory thereof, that (i) a review of the activities of the Servicer
during the preceding year and of performance under this Agreement has been
made under the signatory's supervision and (ii) to the best of such
signatory's knowledge, based on such review, the Servicer has fulfilled all of
its obligations under this Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such signatory and the nature and status thereof. Copies of
such statement may be provided by the Owner to any Person identified by the
Owner as a prospective purchaser of the Mortgage Loans.
5.06 Compliance with Xxxxx-Xxxxx-Xxxxxx Act of 1999. With respect
to each Mortgage Loan and the related Mortgagor, the Servicer shall comply
with Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999, as amended and all
applicable regulations promulgated thereunder, and shall provide all notices
required of the Servicer thereunder.
5.07 Compliance with REMIC provisions. If a REMIC election is or
is to be made with respect to the arrangement under which the Mortgage Loans
and any REO property are held, the Servicer shall manage, conserve, protect
and operate each REO Property in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by such REMIC of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code or any "net income from foreclosure property" within the meaning
of Section 860G(c)(2) of the Code.
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER
---------------------------------------------------------
AND THE OWNER
-------------
6.01 Representations of the Servicer. The Servicer represents,
warrants and covenants to the Owner as of the Effective Date, each relevant
Cut-off Date, as of each Closing Date and as of any date specifically provided
herein:
(a) The Servicer is duly organized, validly existing and in good
standing as a corporation under the laws of the Commonwealth of Pennsylvania
and the Servicer is duly licensed and qualified in all states which such
licensing or qualification is required to conduct its
30
business or perform its obligations hereunder and the services and is and will
remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of
each Mortgage Loan and the servicing of the Mortgage Loan in accordance with
the terms of this Agreement;
(b) The Servicer has the full power and authority to service each
Mortgage Loan and to execute, deliver and perform, and to enter into and
consummate all transactions contemplated by this Agreement, and the Servicer
has taken all requisite corporate action to make this Agreement and all
agreements contemplated hereby valid and binding upon the Servicer in
accordance with their terms. The Servicer has duly authorized the execution,
delivery and performance of this Agreement; it has duly executed and delivered
this Agreement. This Agreement, assuming due authorization, execution and
delivery by the Owner, constitutes a legal, valid and binding obligation of
the Servicer, enforceable against it in accordance with its terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium, or similar laws affecting creditors'
rights in general, including equitable remedies;
(c) The execution and delivery of this Agreement by the Servicer
and the performance of and compliance with the terms of this Agreement will
not violate the Servicer's articles of incorporation or by-laws or constitute
a default under or result in a breach or acceleration of, any material
contract, agreement or other instrument to which the Servicer is a party or
which may be applicable to the Servicer or its assets;
(d) The Servicer is not in violation of, and the execution and
delivery of this Agreement by the Servicer and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over the Servicer
or its assets, which violation might have consequences that would materially
and adversely affect the condition (financial or otherwise) or the operation
of the Servicer or its assets or might have consequences that would materially
and adversely affect the performance of its obligations and duties hereunder;
(e) The Servicer is an approved servicer for Xxxxxx Xxx/Xxxxxxx
Mac in good standing. No event has occurred, including but not limited to a
change in insurance coverage, which would make the Servicer unable to comply
with Xxxxxx Mae eligibility requirements or which would require notification
to Xxxxxx Xxx/Xxxxxxx Mac;
(f) 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;
(g) There are no actions, suits or proceedings against,
investigations of, the Servicer before any court, administrative or other
tribunal or, to the best of its knowledge, threatened against the Servicer (i)
that might prohibit its entering into this Agreement, (ii) seeking to prevent
the consummation of the transactions contemplated by this Agreement or (iii)
that might prohibit or materially and adversely affect the performance by the
Servicer of its obligations under, or validity or enforceability of, this
Agreement;
31
(h) 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 or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained;
(i) The consummation of the transactions contemplated by this
Agreement is in the ordinary course of business of the Servicer;
(j) The written statements, reports and other documents prepared
and furnished or to be prepared and furnished by the Servicer pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and
(k) The Servicer has 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 enforce and service
mortgage loans in the jurisdiction wherein the Mortgaged Properties are
located.
6.02 Representations of the Owner. The Owner represents, warrants
and covenants to the Servicer as of the Effective Date, each relevant Cut-off
Date, each relevant Closing Date and as of any date specifically provided
herein:
(a) The execution, delivery and performance by the Owner of this
Agreement has been duly and validly authorized by all necessary corporate
action. This Agreement constitutes a legal, valid and enforceable obligation
of the Owner, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, receivership or other laws relating to
or affecting creditors' rights generally, and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity), and except that the enforcement or rights with respect to
indemnification and contribution obligations and provisions (i) purporting to
waive or limit rights to trial by jury, oral amendments to written agreements
or rights of set off or (ii) relating to submission to jurisdiction, venue or
service of process, may be limited by applicable law or considerations of
public policy.
SECTION 7. THE SERVICER
------------
7.01 [Reserved].
7.02 Merger or Consolidation of the Servicer. The Servicer will
keep in full effect its existence, rights and franchises as a corporation, and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement or any
of the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Servicer shall
32
be a party, or any Person succeeding to substantially all of the business of
the Servicer (whether or not related to mortgage loan servicing), shall be the
successor of the Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that the successor
or surviving Person shall be an institution (a) having a GAAP net worth of not
less than $10,000,000, and (b) that is one of the following: (i) an
institution the deposits of which are insured by the FDIC or (ii) an
institution which is a HUD-approved mortgagee whose primary business is in
origination and servicing of first and second mortgage loans or (iii) an
institution which is a Xxxxxx Mae/Xxxxxxx Mac approved servicer in good
standing.
7.03 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 the Owner 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, its own negligent actions, or
failure to perform its obligations in 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 to this
Agreement and the rights and duties of the parties hereto. In such event, the
Servicer shall be entitled to reimbursement from the Owner of the reasonable
legal expenses and costs of such action.
Notwithstanding Section 20, the Servicer shall not be required to
indemnify, or otherwise be liable to, the Owner or those referenced above for
any Liability which the Owner is required to indemnify for pursuant to Section
20(c) above.
7.04 Servicer Not to Assign. The Owner has entered into this
Agreement with the Servicer and subsequent purchasers will purchase the
Mortgage Loans 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 not
assign this Agreement or the servicing hereunder or delegate its rights or
duties hereunder or any portion hereof, except for the assignment or
delegation of standard practice outsourcing activities such as the delegation
of data processing, tax reporting and other purely clerical or administrative
functions in connection with its Servicing responsibilities, or sell or
otherwise dispose of all or substantially all of its property or assets except
in connection with a merger or consolidation permitted under Section 7.02
without thirty (30) days prior notice and the prior written consent of the
Owner, which consent shall be reasonably granted or withheld in the sole
discretion of the Owner.
Without in any way limiting the generality of this Section 7.04,
in the event that the Servicer either shall assign this Agreement or the
servicing responsibilities hereunder or
33
delegate its duties hereunder or sell or otherwise dispose of all or
substantially all of its property or assets, except as permitted herein,
without the prior written consent of the Owner, then the Owner shall have the
right to terminate this Agreement upon notice given as set forth in Section
9.01, without any payment of any penalty or damages and without any liability
whatsoever to the Servicer or any third party.
SECTION 8. DEFAULT
-------
8.01 Default by Servicer. If one or more of the following Events
of Default shall occur and be continuing, that is to say:
(a) any failure by the Servicer to remit to the Owner any payment
required to be made under the terms of this Agreement which continues to be
uncured for a period of three (3) Business Days after the date upon which (i)
written notice of such failure requiring the same to be remedied shall have
been given to the Servicer by the Owner, or (ii) Servicer first becomes aware
of such failure;
(b) failure on the part of 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 (including but not limited to
breach by Servicer of any one or more of the representations, warranties and
covenants of the Servicer as set forth in Section 6.01 above) which continues
uncured for a period of thirty (30) days (except that (x) such number of days
shall be fifteen (15) days in the case of a failure to pay any premium for any
insurance policy required to be maintained under this Agreement and (y) such
number of days shall be one (1) calendar day with respect to the reports
required under Sections 5.04 and 5.05 and the last paragraph of Section 25)
after the earlier of the date on which (i) written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the Owner, or (ii) Servicer first becomes aware of such failure;
(c) 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, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceeding 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 sixty (60) days;
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its assets;
(e) 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 or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations;
34
(f) failure by the Servicer to be in compliance with the "doing
business" or licensing laws of any jurisdiction where a Mortgaged Property is
located and such failure has a material and adverse effect on the Servicer's
ability to perform its obligations under this Agreement;
(g) the Servicer ceases to meet the qualifications of either a
Xxxxxx Xxx or Xxxxxxx Mac servicer which status continues uncured for a period
of thirty (30) days; or
(h) other than as provided in Section 7.04 herein, the Servicer
attempts to assign its rights to Servicing Compensation hereunder or the
Servicer attempts, without the consent of the Owner, 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;
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, in addition to whatsoever rights the Owner may have at
law or equity to damages, including injunctive relief and specific
performance, the Owner, by notice in writing to the Servicer may immediately
terminate without compensation all the rights and obligations of the Servicer
as servicer under this Agreement. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer to service the
Mortgage Loans under this Agreement shall on the date set forth in such notice
pass to and be vested in the successor appointed pursuant to Section 10
herein.
8.02 Default by Owner. If one or more of the following Events of
Default shall occur and be continuing, that is to say:
(a) breach by Owner of the representations, warranties and
covenants of the Owner as set forth in Section 6.02 above);
then, and in each and every such case (except in instances where the Event of
Default has been cured within thirty (30) days after the date on which written
notice of such default, requiring the same to be remedied, shall have been
given to the Owner by the Servicer), the Servicer, by notice in writing to the
Owner, may immediately terminate all of its responsibilities, duties and
obligations as servicer under this Agreement. On or after the receipt by the
Owner of such written notice, all responsibilities, duties and obligations of
the Servicer to service the Mortgage Loans under this Agreement shall on the
date set forth in such notice pass to and be vested in the successor appointed
pursuant to Section 10 herein.
8.03 Waiver of Defaults. Each party to this Agreement may waive
any default by the other party in the performance of its obligations hereunder
and its consequences. No such waiver shall be deemed to have been given by the
waiving party unless given in writing. Upon any such 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.
35
SECTION 9. TERMINATION
-----------
9.01 Expiration of Term and Termination with Cause.
(a) The rights, obligations, duties and responsibilities of the
Servicer shall terminate upon the earliest to occur of: (i) the termination
(in accordance with Section 9.01(c) below) of this Agreement by either party
for cause pursuant to an Event of Default; (ii) the later of the final payment
or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of all REO Property and the remittance of all
funds due hereunder; (iii) in the event the Servicer assigns its
responsibilities under the Agreement without the Owner's prior consent
pursuant to Section 7.04; (iv) at the election of the Servicer, in the event
the Owner, acting in bad faith, interferes with the Servicer's exclusive
rights to service the Mortgage Loans under this Agreement by contacting any
Mortgagors either (A) directly through collection calls; or (B) through third
party collection agencies not previously agreed to by the Servicer; or (v) by
mutual consent of the Servicer and the Owner in writing.
(b) This Agreement shall continue in full force and effect, unless
earlier terminated in accordance with this Section 9, until the distribution
of the final payment or liquidation proceeds on the last Mortgage Loan
(including, as applicable, final disposition of, and remittance as provided in
this Agreement relating to, all REO Property acquired upon foreclosure of the
last Mortgage Loan) then covered by this Agreement.
(c) If an Event of Default has occurred, and provided that such
Event of Default with respect to either party has neither been waived by the
other party pursuant to Section 8.03 nor cured (if such cure is not
specifically disallowed under the terms of this Agreement), then the aggrieved
party may, by notice in writing to the offending party, terminate all of the
Servicer's obligations, duties and responsibilities under this Agreement.
36
9.02 Termination without Cause(a) . This Agreement shall terminate
at the election of either the Owner or the Servicer at any time from time to
time with respect to one or more Mortgage Loans, and without cause; provided,
however, that if the Owner is the party electing such termination without
cause, the Owner shall pay the Servicer a termination fee equal to the product
of 3.00% and the Stated Principal Balance (as of the date notice of such
termination is given) of the Mortgage Loans subject to such termination;
provided, further, that either party's ability to terminate this Agreement
under this Subsection 9.02 is expressly conditioned upon delivery by the
terminating party to the other party, by courier or other delivery service for
which proof of delivery may be obtained, (i) in the event of termination by
Owner, no less than ninety (90) days prior written notice of such election, or
(ii) in the event of termination by the Servicer, no less than (180) days
prior written notice of such election.
9.03 Notice of Servicing Transfers. In the event Owner requests
the transfer of Mortgage Loans in excess of Ten Thousand (10,000) total in any
calendar month, Owner must provide a minimum sixty (60) days prior written
notice to Servicer and Servicer must provide prior written acknowledgement by
an authorized officer of Servicer.
9.04 Termination Process. Upon termination for any ground stated
in this Section 9, the Owner and the Servicer shall comply with the
termination process and procedures set forth in Section 10 herein.
SECTION 10. SUCCESSOR TO THE SERVICER
-------------------------
10.01 Effect of Termination. Upon a transfer of Mortgage Loans or
of servicing pursuant to Section 2.08(b) or upon termination of the Servicer's
responsibilities and duties under this Agreement pursuant to Section 9 herein,
the Owner or the Owner's designee shall, on the related Servicing Transfer
Date, succeed to and assume all of the Servicer's responsibilities, rights,
duties and obligations under this Agreement. In the event that this Agreement
should be terminated by the Owner for cause or by Owner without cause (but not
in the event this Agreement should be terminated by the Servicer for cause,
unless Servicer specifically agrees otherwise in writing), and if the Owner
elects to appoint a Successor Servicer that agrees to succeed to all rights
and assume all of the responsibilities, duties and liabilities of the Servicer
as servicer under this Agreement (which appointment must occur and be accepted
by the Successor Servicer within thirty (30) days of the date of written
notice of termination by either party to the other party), the termination
shall not become effective until such Successor Servicer has been appointed
and has accepted such appointment pursuant to this Section. Any Successor
Servicer appointed as provided herein shall execute, acknowledge and deliver
to the Servicer and to the Owner an instrument accepting such appointment,
whereupon such Successor Servicer shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
replaced Servicer with similar effect as if originally named as a party to
this Agreement; provided, however, that neither the Owner nor such Successor
Servicer shall assume, and the replaced Servicer shall indemnify the Owner and
such Successor Servicer for, any and all liabilities arising out of the
replaced Servicer's acts as servicer. The Servicing Transfer Date shall be the
same as the date of termination of the Servicer's responsibilities and duties
under this Agreement pursuant to Section 8 or 9 herein, or as soon as
practicable after the date of termination to ensure compliance with any
legally imposed requirements relating to servicing transfers in general. In
connection with any transfer pursuant to Section 2.08(b) or any
37
termination pursuant to Section 9, all unreimbursed Servicing Fees, P&I
Advances, and Servicing Advances still owing the Servicer shall be deducted by
the Servicer from the final remittance of funds to the Owner. To the extent
that there are insufficient funds in the Collection Account to reimburse the
Servicer for due and unpaid Servicing Fees, P&I Advances, and Servicing
Advances, or if the Collection Account is no longer in the Servicer's control,
the Owner shall pay the amount of such shortfall to the Servicer within five
(5) Business Days upon receipt of an invoice thereof.
10.02 Transfer of Servicing. Upon a transfer of Mortgage Loans or
of servicing pursuant to Section 2.08(b) or upon termination of the Servicer's
responsibilities and duties under this Agreement pursuant to Section 9 herein,
the following shall be performed:
(a) With respect to each Mortgage Loan, on the related Servicing
Transfer Date, the Owner, or its appointed successor servicer (collectively
referred to as "Successor Servicer"), shall assume all Servicing
responsibilities related to, and the Servicer shall cease all Servicing
responsibilities related to the Mortgage Loans. On or prior to the related
Servicing Transfer Date the Servicer shall take such steps as may be necessary
or appropriate to effectuate and evidence the transfer of the Servicing of the
Mortgage Loans to the Successor Servicer, including but not limited to the
following:
(i) Notice to Mortgagors. The Servicer shall mail to the Mortgagor
of each Mortgage a letter advising the Mortgagor of the transfer of the
Servicing of the related Mortgage Loan to the Successor Servicer in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of
1990, as amended; provided, however, the content and format of the
letter shall have the prior approval of the Successor Servicer. The
Servicer shall provide the Owner with copies of all such notices no
later than the related Servicing Transfer Date.
(ii) Notice to Taxing Authorities and Insurance Companies. The
Servicer shall transmit to the applicable insurance companies (including
primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the Servicing to the Successor
Servicer, and instructions to deliver all notices and insurance
statements, as the case may be, to the Successor Servicer from and after
the related Servicing Transfer Date. The Servicer shall provide the
Successor Servicer with copies of all such notices no later than the
related Servicing Transfer Date.
(iii) Delivery of Servicing Records. The Servicer shall forward to
the Successor Servicer, all Servicing records in the Servicer's
possession relating to each Mortgage Loan. Such delivery of hard copies
of borrower history is an out-of-pocket expense and will be paid by the
Owner.
(iv) Escrow Payments. The Servicer shall provide the Successor
Servicer, with immediately available funds by wire transfer in the
amount of the Escrow Account balance and suspense balances and all loss
draft balances associated with the related Mortgage Loan. The Servicer
shall provide the Successor Servicer, with an accounting statement in
electronic format mutually acceptable to the Owner and the Servicer, of
Escrow Payments and suspense balances and loss draft balances sufficient
to enable the
38
Owner to reconcile the amount of such payment with the accounts of the
Mortgage Loans. Additionally, the Servicer shall wire transfer to the
Owner the amount of any agency, trustee or prepaid Mortgage Loan
payments and all other similar amounts held by the Servicer.
(v) Payoffs and Assumptions. The Servicer shall provide to the
Successor Servicer electronic data information regarding of all
assumption statements and payoff statements generated by the Servicer on
the Mortgage Loans from the related Cut-off Date to the related
Servicing Transfer Date.
(vi) Mortgage Payments Received Prior to Related Servicing
Transfer Date. Prior to the related Servicing Transfer Date, all
payments theretofore received by the Servicer on each Mortgage Loan
shall be properly applied by the Servicer to the account of the
particular Mortgagor.
(vii) Mortgage Payments Received After Related Servicing Transfer
Date. The amount of any related Monthly Payments received by the
Servicer after the Servicing Transfer Date shall be forwarded to the
Owner by overnight mail on the date of receipt. The Servicer shall
notify the Owner of the particulars of the payment, which notification
requirement shall be satisfied if the Servicer forwards with its payment
sufficient information to permit appropriate processing of the payment
by the Owner. The Servicer shall assume full responsibility for the
necessary and appropriate legal application of such Monthly Payments
received by the Servicer after the Servicing Transfer Date with respect
to related Mortgage Loans then in foreclosure or bankruptcy; provided,
that for purposes of this Agreement, necessary and appropriate legal
application of such Monthly Payments shall include, but not be limited
to, endorsement of a Monthly Payment to the Owner with the particulars
of the payment such as the account number, dollar amount, date received
and any special Mortgagor application instructions and the Servicer
shall comply with the foregoing requirements with respect to all Monthly
Payments received by the Servicer after the Servicing Transfer Date;
provided, that the Servicer shall not be liable for any use of such
Monthly Payments by the Owner if (i) the Servicer has met the sufficient
payment information requirement above and (ii) Monthly Payment has been
forwarded to the Owner as set forth above.
(viii) Misapplied Payments. Misapplied payments shall be processed
as follows:
(A) All parties shall cooperate in correcting misapplication
errors;
(B) The party receiving notice of a misapplied payment
occurring prior to the related Servicing Transfer Date and
discovered after the related Servicing Transfer Date shall
immediately notify the other party in writing; and
(C) If a proven misapplied payment which occurred prior to
the related Servicing Transfer Date cannot be identified and said
misapplied payment has resulted in a shortage in a Collection
Account or Escrow Account, the Servicer shall be liable for the
amount of such shortage. The Servicer shall reimburse the
39
Successor Servicer for the amount of such shortage within thirty
(30) days upon receipt of written demand therefor from the
Successor Servicer.
(ix) Books and Records. On the Servicing Transfer Date, the books,
records and accounts of the Servicer with respect to the related
Mortgage Loans shall be maintained by the Servicer in accordance with
all applicable Accepted Servicing Practices.
(x) Reconciliation. The Servicer shall, on or before the related
Servicing Transfer Date, reconcile principal balances and make any
monetary adjustments necessary to complete the reconciliation. Any such
monetary adjustments will be transferred between the Servicer and the
Successor Servicer as appropriate.
(xi) IRS Forms. The Servicer shall prepare and file all IRS forms
1098, 1099 and other applicable forms and reports which are required to
be filed hereunder with respect to the period prior to the related
Servicing Transfer Date. The Servicer shall provide copies of such forms
(as reasonably available to the Servicer) to the Owner upon request and
shall reimburse the Owner for any costs or penalties incurred by the
Owner due to the Servicer's failure to comply with this paragraph. The
Servicer shall not be responsible for the preparation or filing of any
such reports with respect to any period commencing on or after the
related Servicing Transfer Date.
(b) The Servicer shall not be obligated to deliver the Servicing
Files to the Owner or Successor Servicer until and unless all such Servicing
Advances shall have been reimbursed and all such Servicing Fees shall have
been paid. In addition, if and to the extent that from and after the Servicing
Transfer Date (or such earlier date through which Servicing Advances shall
have been, for convenience, calculated and reimbursed) the Servicer should
receive and pay bills (including, but not limited to, non-sufficient fund
checks) for services properly rendered with respect to the Mortgage Loans and
REO Property, then Servicer shall be entitled to reimbursement for such
additional payments within five (5) Business Days of the Servicer's written
request, directly from (i) the Collection Account, or (ii) if such Collection
Account has insufficient funds to pay such additional payments or is no longer
under the Servicer's control, the Successor Servicer, or (iii) if the
Successor Servicer fails to pay such advances, the Owner.
SECTION 11. NOTICES
-------
All notices, requests, demands, consents, approvals, agreements,
amendments or other communications, to or by a party to this Agreement shall:
(a) be in writing addressed to the address of the recipient set
out in this Section 11 of this Agreement or to such other address as such
recipient may have notified the sender;
(b) be signed by an authorized officer of the sender, if
necessary, or an employee of the sender; and
40
(c) be delivered in Person or sent by registered or certified
mail, return receipt requested, by facsimile transmission, or by overnight
courier and be deemed to be duly given or made:
(i) in the case of delivery in person, when delivered to the
recipient at such address;
(ii) in the case of registered or certified mail, three days after
the date of mailing;
(iii) in the case of overnight courier, the date of receipt; or
(iv) in the case of facsimile transmission, when received in
legible form by the recipient at such address, and in the event that the
recipient has been requested to acknowledge receipt of the entire
facsimile transmission, upon the sending or receiving the acknowledgment
of receipt (which acknowledgment the recipient will promptly give); but
if such delivery or dispatch is later than 5:00 p.m. local time on a
Business Day or occurs on a day which is not a Business Day, it will be
deemed to have been duly given or made at the commencement of business
on the next Business Day.
Notices may be sent:
(i) if to the Servicer:
GMAC Mortgage Corporation
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Executive Vice President of National Loan
Administration
Telecopier No: (000) 000-0000
if to the Owner:
1221 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx Whole Loan Operations
Manager
Fax 000-000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
with copies to:
Xxxx Xxxxxxxx
Xxxxxx Xxxxxxx Servicing Oversight
0000 X Xxx Xxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Fax : 000-000-0000
Email : xxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
00
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx - XXXX
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Email : xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
or to such other address as the Owner and the Servicer shall have specified in
writing to each other.
If a change of address shall occur, the involved party or parties
herein shall notify the other parties in writing of such address change within
two (2) Business Days. If the involved party or parties failed to provide such
notification within two (2) Business Days, all notices (including, but not
limited to, notice of claims, legal processes, etc.) mailed by the Servicer to
the address(es) in this Section 11 are deemed to have been properly delivered
to the intended recipient.
SECTION 12. 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 nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
SECTION 13. 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 14. APPLICABLE LAW
--------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO
42
CONFLICTS OF LAWS PRINCIPLES), EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.
SECTION 15. SUCCESSORS AND ASSIGNS
----------------------
This Agreement shall bind and inure to the benefit of and be
enforceable by the Servicer and the Owner and the respective successors and
permitted assigns of the Servicer and the Owner. Subject to Section 7.04
herein, this Agreement shall not be assigned, pledged or hypothecated by the
Servicer to a third party without the consent of the Owner.
SECTION 16. 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 17. EXHIBITS
--------
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 18. 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 GAAP;
(c) references herein to "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) 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;
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration; and
43
(g) this Agreement shall be fairly and evenly construed and
interpreted as the joint negotiated work product between two knowledgeable
participants in the secondary mortgage market, each represented by legal
counsel. No inference or presumption in favor of one party or against the
other shall arise on account of drafting. The Section headings are for
convenience only and shall not affect the construction of this Agreement.
SECTION 19. 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.
SECTION 20. INDEMNIFICATION
---------------
(a) The Servicer shall indemnify and hold the Owner, any Successor
Servicer, and their respective officers, directors, employees and Affiliates
(each, an "Indemnified Party") harmless from, and shall reimburse each
Indemnified Party for, any losses, damages, deficiencies, claims, causes of
action or expenses of any nature (including, but not limited to reasonable
attorneys' fees) (each a "Liability") incurred by such Indemnified Party which
arise out of or result from Servicer's willful misfeasance, bad faith or
negligence in the performance of its duties or its reckless disregard of its
obligations and duties hereunder, the Servicer's failure to service the
Mortgage Loans in strict compliance with the terms of this Agreement or the
breach by the Servicer of any of its representations and warranties herein.
(b) Servicer Indemnification. The Owner shall indemnify and hold
harmless from and shall reimburse the Servicer for any losses, damages,
deficiencies, claims, causes of action or expenses of any nature (including,
but not limited to reasonable attorneys' fees) incurred by the Servicer which
arise out of or result from the Owner's gross negligence or willful failure to
perform any of its obligations under this Agreement.
(c) The Owner shall defend and indemnify the Servicer, its
employees, officers, affiliates, agents and representatives (the "Servicer
Indemnified Parties"), against any and all Liability that the Servicer
Indemnified Parties may sustain which are caused by or result from (directly
or indirectly, in whole or in part):
(i) (A) the Servicer taking any action, or refraining from
taking any action, with respect to any Mortgage Loan or REO
Property at or in conformity with the express written direction of
the Owner or this Agreement or (B) the Servicer taking and
initiating any legal actions with respect to any Mortgage Loans
and REO Properties or taking title to any REO Properties on behalf
of the Owner, in the name of the Servicer or an Affiliate thereof
(in each case, unless such action or omission is taken with a
standard of care in contravention of any standard of care required
under the Agreement and such contravention is the proximate cause
of the claim or action);
44
(ii) the refusal of the Owner or any trustee or custodian in
possession of the Servicing File to provide to the Servicer the
originals of the Servicing File within a reasonable amount of time
after a request for such documents has been received in order to
allow the Servicer sufficient time to process satisfactions,
payoffs, and releases;
(iii) any act or omission to act of any servicer,
sub-servicer, owner or originator of a Mortgage Loan or Mortgaged
Property (or any other Person) prior to or in conjunction with
servicing transfer on the Servicing Transfer Date, including,
without limitation, any data integrity issue (and any related
costs of correcting such issues); provided, however, that the
Owner shall have no liability hereunder for any act or omission
relating to a servicing transfer as to which the Owner has not
received written notice of a claim for indemnification within 60
days after the Servicing Transfer Date; and provided, further,
should the Servicer have actual knowledge of any data integrity
error which is likely to materially affect any Mortgage Loan, the
Servicer, in consultation with the Owner and at the Owner's
expense, will take reasonable efforts to correct such error;
(iv) the violation of a Mortgage Loan under the Home
Ownership and Equity Protection Act of 1994 or under any other
applicable state, federal or local law;
(v) any Environmental Liability.
The term "Environmental Liability" shall mean any and all claims,
losses, damages, liabilities, judgments, penalties, fines, forfeitures,
reasonable legal fees and expenses, and any and all related costs and/or
expenses of litigation, administrative and/or regulatory agency proceedings,
and any other costs, fees and expenses, suffered or incurred by the Servicer
or Owner arising out of or resulting from the introduction of environmentally
hazardous materials on any Mortgaged Property before and/or after the date of
the Servicer's knowledge thereof, including, without limitation, (a) any
liability under or on account of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., as the same
may be amended from time to time, and/or any other federal or state
environmental laws, and specifically including, without limitation, any
liability relating to asbestos and asbestos containing materials,
polychlorinated biphenyls, radon gas, petroleum and petroleum products, urea
formaldehyde and any substances classified as being "in inventory", "usable
work in process" or similar classification which would, if classified as
unusable, be included in the foregoing definition, including the assertion of
any lien thereunder, (b) claims brought by third parties for loss or damage
incurred or sustained subsequent to the date hereof, and (c) liability with
respect to any other matter affecting the Mortgaged Property within the
jurisdiction of the federal Environmental Protection Agency or state
environmental regulatory agencies pursuant to any state laws, and in the
regulations adopted pursuant to any of said laws; provided, however, that the
indemnity for Environmental Liability shall not be effective with respect to
any liability caused by the Servicer that would otherwise be imposed by reason
of the Servicer's willful misfeasance or bad faith in the performance of or
failure to perform its duties hereunder.
45
(d) Procedure. If the Owner or the Servicer (either, the
"Indemnified Party) receives notice of the commencement of any action for
which a claim for indemnity under this Section 20 may be made, the Indemnified
Party shall promptly notify the Servicer or the Owner, as the case may be (the
party so notified, the "Indemnitor") thereof; provided, that any delay in
notification shall not reduce the extent of indemnity and defense hereunder
except to the extent that the delay prejudices the Indemnitor. Following
receipt of notice of the commencement of any action, the Indemnitor shall be
entitled to participate in such action, and upon notice delivered to the
Indemnified Party, to assume the defense thereof, with counsel reasonably
acceptable to the Indemnified Party, who shall not unreasonably withhold such
acceptance. If, however, the defendants in such action include both the Owner
and the Servicer, and the Indemnified Party shall have reasonably concluded
that there may be legal defenses available to it that are different from or
additional to those available to the Indemnitor, the Indemnified Party shall
be entitled, at the expense of the Indemnitor, to separate counsel to assert
such defenses. If the Indemnitor shall have given notice of its assumption of
the defense of such action and following the approval by the Indemnified Party
of counsel, the Indemnitor shall not be liable under this Section 20 for any
legal expenses incurred by the Indemnified Party in retaining separate counsel
in connection with such defense unless (i) the Indemnified Party shall have
employed separate counsel in accordance with the preceding sentence; (ii) the
Indemnitor shall not have employed counsel reasonably acceptable to the
Indemnified Party within a reasonable time after notice of the commencement of
action; or (iii) the Indemnitor shall have otherwise authorized the employment
of separate counsel for the Indemnified Party at the Indemnitor's expense; and
except that, if clause (i) or (iii) is applicable, such liability shall be
only in respect of the separate counsel referred to in such clause (i) or
(iii).
(e) Limit of Servicer's Liability. The Servicer shall have no
obligation to indemnify or in any way compensate or reimburse the Owner for
losses due to the Owner's gross negligence, bad faith or willful misconduct
under this Agreement, and, if the same is determined by an arbitrator or a
court of competent jurisdiction from which no appeal is available, the
Servicer shall be entitled to a direct reimbursement for indemnification
payments previously made to the Owner under this Section 20 by the Servicer if
such determination is made.
(f) Limit of Owner's Liability. The Owner shall have no obligation
to indemnify the Servicer for losses due to the Servicer's willful misconduct
or negligence, and, if the same is determined by an arbitrator or a court of
competent jurisdiction from which no appeal is available, the Owner shall be
entitled to reimbursement for expenses incurred by the Owner or previously
reimbursed to the Servicer by the Owner. Other than as expressly set forth
herein and subject to Section 7 herein, the Owner shall have no obligation to
indemnify the Servicer for any losses.
SECTION 21. LEGAL MATTERS
-------------
21.01 Waiver of Trial by Jury. EACH OF THE SERVICER AND THE OWNER
EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
46
21.02 Submission to Jurisdiction; Waivers. The Servicer hereby
irrevocably and unconditionally:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS
BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE
SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO ITS ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF
WHICH THE OWNER SHALL HAVE BEEN NOTIFIED; AND
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
SECTION 22. CONFIDENTIALITY OF INFORMATION
------------------------------
(a) Owner and Servicer shall not disclose any confidential or
proprietary information of the other party with respect to such other party,
the Mortgage Loans, or the Mortgage Files that may be in the possession of
that party (the "Confidential Information") to any Person who is not a
partner, officer, employee, counsel, or agent of such party except with the
written consent of such other party or pursuant to a subpoena or order issued
by a court or by an administrative, legislative, or law enforcement agent,
department, agency, body or committee.
(b) The Owner and the Servicer shall not be required to treat as
Confidential Information, any information of the other party if (i) such
information is already in the possession of the party and is not otherwise
subject to any agreement as to confidentiality, (ii) such information is or
becomes generally available in the public domain other than as a result of a
disclosure by the party or its partners, officers employees, counsel, or
agents, (iii) such information is not acquired from the other party or Persons
known to be in breach of an obligation of secrecy to such other party, (iv)
such information is contained in or derived from the Mortgage File, or (v)
such information is statistical in nature, and the Servicer or the Servicer's
counsel determines it is reasonably required to be disclosed in connection
with the
47
securitization or other transfer of mortgage loans (other than the Mortgage
Loans) sold by Servicer.
(c) Neither of the parties to this Agreement nor any of their
Affiliates shall issue any press release or public announcement concerning the
contemplated transaction, the existence of this Agreement, the terms,
conditions, and provisions of this Agreement, or any of the party's
Confidential Information, (i) unless mutually agreed by the parties or (ii)
except as required by law, in which event the disclosing party shall consult
with the other party to the extent practicable before making such disclosure.
SECTION 23. NO PERSONAL SOLICITATION
------------------------
From and after each Closing Date, the Servicer agrees that it will
not take any action or permit or cause any action to be taken by any of its
agents and Affiliates, or by any independent contractors or independent
mortgage brokerage companies on the Servicer's behalf, to personally, by
telephone or mail, solicit the Mortgagor or Mortgagor under any Mortgage Loan
to refinance a Mortgage Loan. The Servicer further agrees to use reasonable
efforts to provide Owner written or electronic notice when 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; provided, it is understood and
agreed that promotions undertaken by the Servicer or its affiliates which (i)
concern optional insurance products or other additional products or (ii) are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this
Section, nor is the Servicer prohibited from responding to unsolicited
requests or inquiries made by a Mortgagor or an agent of a Mortgagor.
SECTION 24. MERS PROVISION
--------------
With respect to each MERS Mortgage Loan, no later than five (5)
Business Days after notification of the Servicer by the Owner of the transfer
of such MERS Mortgage Loan, the Servicer shall designate, as directed by the
Owner, the Successor Servicer, as the Servicer on MERS. In addition, no later
than five (5) Business Days after notification of the Servicer by the Owner of
the transfer of such MERS Mortgage Loan, the Servicer shall designate, as
directed by the Owner, the successor Owner of the MERS Mortgage Loan, as the
Investor on MERS. In addition, the Servicer shall promptly take all other
actions reasonably requested by Owner with respect to MERS Mortgage Loans and
MERS to effectuate and evidence the transfer of servicing and/or ownership
thereof in accordance with the terms of this Agreement.
48
SECTION 25. COOPERATION OF SERVICER WITH A RECONSTITUTION
---------------------------------------------
The Servicer and the Owner agree that with respect to some or all
of the Mortgage Loans, after the related Servicing Transfer Date, on one or
more dates (each, a "Reconstitution Date") at the Owner's sole option, the
Owner may effect a sale (each, a "Reconstitution") of some or all of the
Mortgage Loans then subject to this Agreement, without recourse, to:
(a) Whole Loan Transfers to Xxxxxx Xxx under its Cash Purchase
Program or MBS Program (Special Servicing Option); or
(b) Whole Loan Transfers to Xxxxxxx Mac; or
(c) one or more third party purchasers in one or more Whole Loan
Transfers; or
(d) one or more Securitization Transactions.
The Servicer agrees to execute in connection with any Whole Loan
Transfer to Xxxxxx Xxx or Xxxxxxx Mac, any and all pool purchase contracts,
and/or agreements reasonably acceptable to the Servicer among the Owner, the
Servicer, Xxxxxx Mae or Xxxxxxx Mac (as the case may be) and any servicer in
connection with a Whole Loan Transfer, a Seller's warranties and servicing
agreement or a participation and servicing agreement in form and substance
reasonably acceptable to the Servicer, and in connection with a Securitization
Transaction, a pooling and servicing agreement or sale and servicing agreement
in form and substance reasonably acceptable to the Servicer (collectively the
agreements referred to herein are designated, the "Reconstitution
Agreements").
In the event the Servicer is chosen by the Owner, and the Servicer
agrees, to service any Mortgage Loans in connection with a Reconstitution,
with respect to each Reconstitution entered into by the Owner, the Servicer
agrees (1) to cooperate fully with the Owner and any prospective purchaser
with respect to all reasonable requests and due diligence procedures; (2) to
execute, deliver and perform all Reconstitution Agreements required by the
Owner and as negotiated by the parties; (3) to restate as nearly as possible
the representations and warranties set forth in this Agreement as of the
settlement or closing date in connection with such Reconstitution Date or make
the representations and warranties regarding the Servicer set forth in the
related selling/servicing guide of the master servicer or issuer, as the case
may be, in connection with such Reconstitution, provided that the Servicer may
negotiate the terms of any additional representations and warranties not
included in this Agreement. In connection with such Reconstitution, the
Servicer shall: (i) provide to such master servicer or issuer, as the case may
be, and any other participants in such Reconstitution, any and all information
and appropriate verification of information which may be reasonably available
to the Servicer or its affiliates, whether through letters of its auditors and
counsel or otherwise, as the Owner or any such other participant shall
reasonably request, (ii) provide to such master servicer or issuer, as the
case mat be, and any other participants in such Reconstitution, at the expense
of the Owner (not to exceed $15,000), such opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Servicer as
are reasonably believed necessary by the Owner or any such other participant;
and (iii) execute, deliver and satisfy all conditions set forth in any
49
indemnity agreement as required by the Owner or any such participant in the
form of Exhibit G attached hereto. Moreover, the Servicer agrees to cooperate
with all reasonable requests made by the Owner to effect such Reconstitution
Agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if this Agreement
shall remain in effect with respect to the Mortgage Loans, shall continue to
be serviced in accordance with the terms of this Agreement and with respect
thereto this Agreement shall remain in full force and effect.
With respect to any Mortgage Loans sold in a Securitization
Transaction where the Servicer is a servicer, the Servicer agrees that on or
before March 15th of each year beginning March 15, 2006, the Servicer shall
deliver to the depositor, the master servicer (if any), and the trustee for
the securitization trust created in the Securitization Transaction, and their
officers, directors and affiliates, (a) a certification in the form attached
as Exhibit I hereto, executed by the senior officer in charge of servicing at
the Servicer for use in connection with any Form 10-K to be filed with the
Securities and Exchange Commission with respect to the securitization trust
and the annual statement of compliance and accountant's report referred to in
such certification. In such event the Servicer shall agree to the following
indemnification provision: "The Servicer shall indemnify and hold harmless the
depositor, the master servicer (if any), and the trustee, and their respective
officers, directors and Affiliates, from and against any losses, damages,
charges, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon any
breach of the Servicer's obligations under this paragraph or any material
misstatement or omission, negligence, bad faith or willful misconduct of the
Servicer in connection therewith. If the indemnification provided for in the
preceding sentence is unavailable or insufficient to hold harmless any
indemnified party, then the Servicer agrees that it shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities of such indemnified party in such proportion as
is appropriate to reflect the relative fault of such indemnified party, on the
one hand, and the Servicer, on the other, in connection with a breach of the
Servicer's obligations under this paragraph or any material misstatement or
omission, negligence, bad faith or willful misconduct of the Servicer in
connection therewith."
SECTION 26. MATERIAL CHANGE
---------------
The Servicer shall promptly notify the Owner in writing of any
event, circumstance or occurrence which may materially and adversely affect
the ability of the Servicer to perform in accordance with this Agreement.
SECTION 27. FURTHER AGREEMENTS
------------------
The Servicer and the Owner 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.
50
SECTION 28. ENTIRE AGREEMENT
----------------
This Agreement sets forth the entire Agreement among the parties,
and there are no prior agreements, understandings, restrictions, warranties,
or representations among the parties with respect thereto unless specified
herein.
SECTION 29. RELATIONSHIP BETWEEN THE PARTIES
--------------------------------
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture among the parties. The duties and
responsibilities of the Servicer shall be performed by the Servicer as an
independent contractor and not as an agent of the Owner. The Servicer shall
have full control of all of its acts, doings and proceedings relating to or
requisite in connection with the discharge of its duties and responsibilities
under this Agreement.
SECTION 30. LIMITATION OF DAMAGES.
---------------------
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE
PARTIES AGREE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY PUNITIVE
DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT
LIABILITY OR ANY OTHER LEGAL OR EQUITABLE PRINCIPLE, PROVIDED, HOWEVER, THAT
SUCH LIMITATION SHALL NOT BE APPLICABLE WITH RESPECT TO THIRD PARTY CLAIMS
MADE AGAINST A PARTY.
SECTION 31. COMPLIANCE WITH REGULATION AB.
-----------------------------
31.01 Intent of the Parties; Reasonableness.
The Owner and the Servicer acknowledge and agree that the purpose
of Section 31 of this Agreement is to facilitate compliance by the Owner and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its
terms only to offerings of asset-backed securities that are registered under
the Securities Act, the Servicer acknowledges that investors in privately
offered securities may require that the Owner or any Depositor provide
comparable disclosure in unregistered offerings. References in this Agreement
to compliance with Regulation AB include provision of comparable disclosure in
private offerings.
Neither the Owner nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Servicer
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Owner or any Depositor in good faith for delivery of
information under
51
these provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Servicer shall cooperate
fully with the Owner to deliver to the Owner (including any of its assignees
or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Owner or any Depositor to permit the Owner or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Servicer, any Subservicer and the Mortgage Loans,
or the servicing of the Mortgage Loans, reasonably believed by the Owner or
any Depositor to be necessary in order to effect such compliance.
31.02 Additional Representations and Warranties of the Servicer.
(a) The Servicer shall be deemed to represent to the Owner and to
any Depositor, as of the date on which information is first provided to the
Owner or any Depositor under Section 31.03 that, except as disclosed in
writing to the Owner or such Depositor prior to such date: (i) the Servicer is
not aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other securitization
due to any act or failure to act of the Servicer; (ii) the Servicer has not
been terminated as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage loans
involving the Servicer as servicer has been disclosed or reported by the
Servicer; (iv) no material changes to the Servicer's policies or procedures
with respect to the servicing function it will perform under this Agreement
and any Reconstitution Agreement for mortgage loans of a type similar to the
Mortgage Loans have occurred during the three-year period immediately
preceding the related Securitization Transaction; (v) there are no aspects of
the Servicer's financial condition that could have a material adverse effect
on the performance by the Servicer of its servicing obligations under this
Agreement or any Reconstitution Agreement; (vi) there are no material legal or
governmental proceedings pending (or known to be contemplated) against the
Servicer or any Subservicer; and (vii) there are no affiliations,
relationships or transactions relating to the Servicer or any Subservicer with
respect to any Securitization Transaction and any party thereto identified by
the related Depositor of a type described in Item 1119 of Regulation AB.
(b) If so requested by the Owner or any Depositor on any date
following the date on which information is first provided to the Owner or any
Depositor under Section 31.03, the Servicer shall, within five Business Days
following such request, confirm in writing the accuracy of the representations
and warranties set forth in paragraph (a) of this Section or, if any such
representation and warranty is not accurate as of the date of such request,
provide reasonably adequate disclosure of the pertinent facts, in writing, to
the requesting party.
31.03 Information to Be Provided by the Servicer.
In connection with any Securitization Transaction the Servicer
shall (i) within five Business Days following request by the Owner or any
Depositor, provide to the Owner and such Depositor (or cause each Subservicer
to provide), in writing and in form and substance reasonably satisfactory to
the Owner and such Depositor, the information and materials specified in
paragraphs (a), (c) and (f) of this Section, and (ii) as promptly as
practicable following notice
52
to or discovery by the Servicer, provide to the Owner and any Depositor (in
writing and in form and substance reasonably satisfactory to the Owner and
such Depositor) the information specified in paragraph (d) of this Section.
(a) If so requested by the Owner or any Depositor, the Servicer
shall provide such information regarding each Subservicer, as is requested for
the purpose of compliance with Items 1103(a)(1), 1117 and 1119 of Regulation
AB. Such information shall include, at a minimum:
(A) [Reserved];
(B) [Reserved];
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the
Servicer and each Subservicer; and
(D) a description of any affiliation or relationship between
the Servicer, each Subservicer and any of the following parties to
a Securitization Transaction, as such parties are identified to
the Servicer by the Owner or any Depositor in writing in advance
of such Securitization Transaction:
1. the sponsor;
2. the depositor;
3. the issuing entity;
4. any servicer;
5. any trustee;
6. any originator;
7. any significant obligor;
8. any enhancement or support provider; and
9. any other material transaction party.
(b) [Reserved].
(c) If so requested by the Owner or any Depositor, the Servicer
shall provide such information regarding the Servicer, as servicer of the
Mortgage Loans, and each Subservicer (each of the Servicer and each
Subservicer, for purposes of this paragraph, a "Transaction Servicer"), as is
requested for the purpose of compliance with Item 1108 of Regulation AB. Such
information shall include, at a minimum:
(A) the Transaction Servicer's form of organization;
(B) a description of how long the Transaction Servicer has
been servicing residential mortgage loans; a general discussion of
the Transaction Servicer's experience in servicing assets of any
type as well as a more detailed discussion of the Transaction
Servicer's experience in, and procedures for, the servicing
function it will perform under this Agreement and any
Reconstitution Agreements; information regarding the size,
composition and growth of the
53
Transaction Servicer's portfolio of residential mortgage loans of
a type similar to the Mortgage Loans and information on factors
related to the Transaction Servicer that may be material, in the
good faith judgment of the Owner or any Depositor, to any analysis
of the servicing of the Mortgage Loans or the related asset-backed
securities, as applicable, including, without limitation:
1. whether any prior securitizations of mortgage loans
of a type similar to the Mortgage Loans involving the
Transaction Servicer have defaulted or experienced an early
amortization or other performance triggering event because
of servicing during the three-year period immediately
preceding the related Securitization Transaction;
2. the extent of outsourcing the Transaction Servicer
utilizes;
3. whether there has been previous disclosure of
material noncompliance with the applicable servicing
criteria with respect to other securitizations of
residential mortgage loans involving the Transaction
Servicer as a servicer during the three-year period
immediately preceding the related Securitization
Transaction;
4. whether the Transaction Servicer has been
terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to
application of a servicing performance test or trigger; and
5. such other information as the Owner or any
Depositor may reasonably request for the purpose of
compliance with Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during the
three-year period immediately preceding the related
Securitization Transaction to the Transaction Servicer's
policies or procedures with respect to the servicing
function it will perform under this Agreement and any
Reconstitution Agreements for mortgage loans of a type
similar to the Mortgage Loans;
(D) information regarding the Transaction Servicer's
financial condition, to the extent that there is a material
risk that an adverse financial event or circumstance
involving the Transaction Servicer could have a material
adverse effect on the performance by the Transaction
Servicer of its servicing obligations under this Agreement
or any Reconstitution Agreement;
(E) information regarding advances made by the
Transaction Servicer on the Mortgage Loans and the
Transaction Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period
immediately preceding the related Securitization
Transaction, which may be limited to a statement by an
authorized officer of the Transaction Servicer to the effect
that the Transaction Servicer has made all advances required
to be made on residential mortgage loans serviced by it
during such period, or, if such statement would not be
accurate,
54
information regarding the percentage and type of advances
not made as required, and the reasons for such failure to
advance;
(F) a description of the Transaction Servicer's
processes and procedures designed to address any special or
unique factors involved in servicing loans of a similar type
as the Mortgage Loans;
(G) a description of the Transaction Servicer's
processes for handling delinquencies, losses, bankruptcies
and recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts;
and
(H) information as to how the Transaction Servicer
defines or determines delinquencies and charge-offs,
including the effect of any grace period, re-aging,
restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience.
(d) If so requested by the Owner or any Depositor for the purpose
of satisfying its reporting obligation under the Exchange Act with respect to
any class of asset-backed securities, the Servicer shall (or shall cause each
Subservicer to) (i) notify the Owner and any Depositor in writing of (A) any
material litigation or governmental proceedings pending against the Servicer
or any Subservicer and (B) any affiliations or relationships that develop
following the closing date of a Securitization Transaction between the
Servicer or any Subservicer and any of the parties specified in clause (D) of
paragraph (a) of this Section (and any other parties identified in writing by
the requesting party) with respect to such Securitization Transaction, and
(ii) provide to the Owner and any Depositor a description of such proceedings,
affiliations or relationships.
(e) As a condition to the succession to the Servicer or any
Subservicer as servicer or subservicer under this Agreement or any
Reconstitution Agreement by any Person (i) into which the Servicer or such
Subservicer may be merged or consolidated, or (ii) which may be appointed as a
successor to the Servicer or any Subservicer, the Servicer shall provide to
the Owner and any Depositor, at least 15 calendar days prior to the effective
date of such succession or appointment, (x) written notice to the Owner and
any Depositor of such succession or appointment and (y) in writing and in form
and substance reasonably satisfactory to the Owner and such Depositor, all
information reasonably requested by the Owner or any Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to any class of asset-backed securities.
(f) In addition to such information as the Servicer, as servicer,
is obligated to provide pursuant to other provisions of this Agreement, if so
requested by the Owner or any Depositor, the Servicer shall provide such
information regarding the performance or servicing of the Mortgage Loans as is
reasonably required by the Owner or any Depositor to facilitate preparation of
distribution reports in accordance with Item 1121 of Regulation AB and to
permit the Owner or such Depositor to comply with the provisions of Regulation
AB relating to Static Pool Information regarding the performance of the
Mortgage Loans on the basis of the Owner's or such Depositor's reasonable,
good faith interpretation of the requirements of Item 1105(a)(1)-(3) of
Regulation AB (including without limitation as to the format and content of
such Static
55
Pool Information). Such information shall be provided concurrently with the
monthly reports otherwise required to be delivered by the Servicer under this
Agreement commencing with the first such report due in connection with the
applicable Securitization Transaction.
(g) The Servicer shall provide to each originator of a Mortgage
Loan (or if such Mortgage Loan was not sold to Owner by the originator, the
seller of such Mortgage Loan) (the "Static Pool Party") information with
respect to each Mortgage Loan from and after the date Servicer commences
servicing such Mortgage Loan necessary for such Static Pool Party to comply
with its obligations under Regulation AB, including, without limitation,
providing to the Static Pool Party static pool information, as set forth in
Item 1105(a)(2) and (3) of Regulation AB.
(h) Promptly following notice or discovery of a material error in
the information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Servicer shall provide corrected static pool
information to the Owner and each Static Pool Party in the same format in
which static pool information was previously provided to such party by the
Servicer.
31.04 Servicer Compliance Statement.
On or before March 1 of each calendar year, commencing in 2007,
the Servicer shall deliver to the Owner and any Depositor a statement of
compliance addressed to the Owner and such Depositor and signed by an
authorized officer of the Servicer, to the effect that (i) a review of the
Servicer's activities during the immediately preceding calendar year (or
applicable portion thereof) and of its performance under this Agreement and
any applicable Reconstitution Agreement during such period has been made under
such officer's supervision, and (ii) to the best of such officers' knowledge,
based on such review, the Servicer has fulfilled all of its obligations under
this Agreement and any applicable Reconstitution Agreement in all material
respects throughout such calendar year (or applicable portion thereof) or, if
there has been a failure to fulfill any such obligation in any material
respect, specifically identifying each such failure known to such officer and
the nature and the status thereof.
31.05 Report on Assessment of Compliance and Attestation.
(a) On or before March 1 of each calendar year, commencing in
2007, the Servicer shall:
(i) deliver to the Owner and any Depositor a report (in form and
substance reasonably satisfactory to the Owner and such Depositor)
regarding the Servicer's assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year, as required
under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Owner and such
Depositor and signed by an authorized officer of the Servicer, and shall
address each of the Servicing Criteria specified on a certification
substantially in the form of Exhibit J hereto delivered to the Owner
concurrently with the execution of this Agreement;
56
(ii) deliver to the Owner and any Depositor a report of a
registered public accounting firm reasonably acceptable to the Owner and
such Depositor that attests to, and reports on, the assessment of
compliance made by the Servicer and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act;
(iii) cause each Subservicer, and each Subcontractor determined by
the Company pursuant to Section 31.06(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to
deliver to the Owner and any Depositor an assessment of compliance and
accountants' attestation as and when provided in paragraphs (a) and (b)
of this Section; and
(iv) deliver to the Owner, any Depositor and any other Person that
will be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002)
on behalf of an asset-backed issuer with respect to a Securitization
Transaction a certification in the form attached hereto as Exhibit I.
The Servicer acknowledges that the parties identified in clause
(a)(iv) above may rely on the certification provided by the Servicer pursuant
to such clause in signing a Sarbanes Certification and filing such with the
Commission. Neither the Owner nor any Depositor will request delivery of a
certification under clause (a)(iv) above, unless a Depositor is required under
the Exchange Act to file an annual report on Form 10-K with respect to an
issuing entity whose asset pool includes Mortgage Loans.
(b) Each assessment of compliance provided by a Subservicer
pursuant to Section 31.05(a)(i) shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit J hereto
delivered to the Owner concurrently with the execution of this Agreement or,
in the case of a Subservicer subsequently appointed as such, on or prior to
the date of such appointment. An assessment of compliance provided by a
Subcontractor pursuant to Section 31.05(a)(iii) need not address any elements
of the Servicing Criteria other than those specified by the Servicer pursuant
to Section 31.06.
31.06 Use of Subservicers and Subcontractors.
The Servicer shall not hire or otherwise utilize the services of
any Subservicer to fulfill any of the obligations of the Servicer as servicer
under this Agreement or any Reconstitution Agreement unless the Servicer
complies with the provisions of paragraph (a) of this Section. The Servicer
shall not hire or otherwise utilize the services of any Subcontractor, and
shall not permit any Subservicer to hire or otherwise utilize the services of
any Subcontractor, to fulfill any of the obligations of the Servicer as
servicer under this Agreement or any Reconstitution Agreement unless the
Servicer complies with the provisions of paragraph (b) of this Section.
(a) The Servicer shall not hire or otherwise utilize the services
of any Subservicer with respect to the Mortgage Loans without giving the Owner
or its designee fifteen (15) calendar days' advance written notice of the
effective date of such hiring or utilization of a Subservicer, followed by
written confirmation of such hiring or utilization of a
57
Subservicer on the effective date of such engagement and indicating the
circumstances surrounding such hiring or utilization. Any notices required by
this Section 31.06(a) shall be sent via telecopier or certified or registered
mail to the addresses set forth below: Xxxx X. Xxxxxxxx, Servicer Oversight
Group, 0000 X-Xxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000, Telecopy:
000-000-0000 and emailed to: xxxxx_xxxxxxxx_xxxxxx@xxxxxxxxxxxxx.xxx, with a
copy to Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx & Xxxx, LLP, Xxx Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Telecopy: 000-000-0000, Email:
xxxxxxx.xxxxxx@xxx.xxx (or such other address as such Person may otherwise
specify to Servicer). The Servicer shall cause any Subservicer used by the
Servicer (or by any Subservicer) for the benefit of the Owner and any
Depositor to comply with the provisions of this Section and with Sections
31.02, 31.03(c) and (e), 31.04, 31.05 and 31.07 of this Agreement to the same
extent as if such Subservicer were the Servicer, and to provide the
information required with respect to such Subservicer under Section 31.03(d)
of this Agreement. The Servicer shall be responsible for obtaining from each
Subservicer and delivering to the Owner and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under
Section 31.04, any assessment of compliance and attestation required to be
delivered by such Subservicer under Section 31.05 and any certification
required to be delivered to the Person that will be responsible for signing
the Sarbanes Certification under Section 31.05 as and when required to be
delivered.
(b) It shall not be necessary for the Servicer to seek the consent
of the Owner or any Depositor to the utilization of any Subcontractor. The
Servicer shall promptly upon request provide to the Owner and any Depositor
(or any designee of the Depositor, such as a master servicer or administrator)
a written description (in form and substance satisfactory to the Owner and
such Depositor) of the role and function of each Subcontractor utilized by the
Servicer or any Subservicer, specifying (i) the identity of each such
Subcontractor, (ii) which (if any) of such Subcontractors are "participating
in the servicing function" within the meaning of Item 1122 of Regulation AB,
and (iii) which elements of the Servicing Criteria will be addressed in
assessments of compliance provided by each Subcontractor identified pursuant
to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined
to be "participating in the servicing function" within the meaning of Item
1122 of Regulation AB, the Servicer shall cause any such Subcontractor used by
the Servicer (or by any Subservicer) for the benefit of the Owner and any
Depositor to comply with the provisions of Sections 31.05 and 31.07 of this
Agreement to the same extent as if such Subcontractor were the Servicer. The
Servicer shall be responsible for obtaining from each Subcontractor and
delivering to the Owner and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section
31.05, in each case as and when required to be delivered.
31.07 Indemnification; Remedies.
(a) The Servicer shall indemnify the Owner, each affiliate of the
Owner, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange
58
Act with respect to such Securitization Transaction; each broker dealer acting
as underwriter, placement agent or initial purchaser, each Person who controls
any of such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); each Static Pool Party and
the respective present and former directors, officers, employees and agents of
each of the foregoing and of the Depositor, and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs,
fees and expenses that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification,
accountants' letter or other material provided in written or electronic
form under this Section 31 by or on behalf of the Servicer, or provided
under this Section 31 by or on behalf of any Subservicer or
Subcontractor (collectively, the "Servicer Information"), or (B) the
omission or alleged omission to state in the Servicer Information a
material fact required to be stated in the Servicer Information or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by
way of clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Servicer Information and not to any
other information communicated in connection with a sale or purchase of
securities, without regard to whether the Servicer Information or any
portion thereof is presented together with or separately from such other
information;
(ii) any failure by the Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification,
accountants' letter or other material when and as required under this
Section 31, including any failure by the Servicer to identify pursuant
to Section 31.06(b) any Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB; or
(iii) any breach by the Servicer of a representation or warranty
set forth in Section 31.02(a) or in a writing furnished pursuant to
Section 31.02(b) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is
not cured by such closing date, or any breach by the Servicer of a
representation or warranty in a writing furnished pursuant to Section
31.02(b) to the extent made as of a date subsequent to such closing
date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the Servicer shall promptly reimburse the Owner, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction, for all costs reasonably
incurred by each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as required
by the Servicer, any Subservicer or any Subcontractor.
(b) (i) Any failure by the Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification, Static Pool
Party static pool information,
59
accountants' letter or other material when and as required under this Section
31, or any breach by the Servicer of a representation or warranty set forth in
Section 31.02(a) or in a writing furnished pursuant to Section 31.02(b) and
made as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Servicer of a representation or warranty in a writing
furnished pursuant to Section 31.02(b) to the extent made as of a date
subsequent to such closing date, shall, except as provided in clause (ii) of
this paragraph, immediately and automatically, without notice or grace period,
constitute an Event of Default with respect to the Servicer under this
Agreement and any applicable Reconstitution Agreement, and shall entitle the
Owner or Depositor, as applicable, in its sole discretion to terminate the
rights and obligations of the Servicer as servicer under this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement or any applicable Reconstitution Agreement to the
contrary) of any compensation to the Servicer; provided that to the extent
that any provision of this Agreement and/or any applicable Reconstitution
Agreement expressly provides for the survival of certain rights or obligations
following termination of the Servicer as servicer, such provision shall be
given effect.
(ii) Any failure by the Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification or
accountants' letter when and as required under Section 31.04 or 31.05,
including (except as provided below) any failure by the Servicer to
identify pursuant to Section 31.06(b) any Subcontractor "participating
in the servicing function" within the meaning of Item 1122 of Regulation
AB, which continues unremedied for ten calendar days after the date on
which such information, report, certification or accountants' letter was
required to be delivered shall constitute an Event of Default with
respect to the Servicer under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Owner or Depositor, as
applicable, in its sole discretion to terminate the rights and
obligations of the Servicer as servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement to the contrary) of any compensation to the
Servicer; provided that to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following
termination of the Servicer as servicer, such provision shall be given
effect.
Neither the Owner nor any Depositor shall be entitled to terminate
the rights and obligations of the Servicer pursuant to this subparagraph
(b)(ii) if a failure of the Servicer to identify a Subcontractor
"participating in the servicing function" within the meaning of Item
1122 of Regulation AB was attributable solely to the role or functions
of such Subcontractor with respect to mortgage loans other than the
Mortgage Loans.
The Servicer shall promptly reimburse the Owner (or any designee
of the Owner, such as a master servicer) and any Depositor, as applicable, for
all reasonable expenses incurred by the Owner (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Servicer as servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Owner or any Depositor may have under other provisions of this
Agreement and/or any applicable
60
Reconstitution Agreement or otherwise, whether in equity or at law, such as an
action for damages, specific performance or injunctive relief.
[Signature Page to Follow]
61
IN WITNESS WHEREOF, the Servicer and the Owner have caused their
names to be signed hereto by their respective officers there unto duly
authorized as of the date first above written.
OWNER:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:______________________________
Name:
Title:
SERVICER:
GMAC MORTGAGE CORPORATION
By:______________________________
Name:
Title:
[Signature Page to Servicing Agreement]
EXHIBIT A
COLLECTION ACCOUNT LETTER AGREEMENT
____________, 2006
To: [__________________________]
(the "Depository")
As Servicer under the Servicing Agreement, dated as of
___________________, we hereby authorize and request that you establish an
account, as a Collection Account, to be designated as "GMAC Mortgage
Corporation, as Servicer, in trust for Xxxxxx Xxxxxxx Mortgage Capital Inc.
(the "Owner") and various Mortgagors." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Owner. You may refuse
any deposit which would result in violation of the requirement that the
account be insured as described below. This letter is submitted to you in
duplicate. Please execute and return one original to us.
GMAC 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. The amount deposited at any
time in the account will be insured by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund or the Savings Association
Insurance Fund to the maximum extent available.
[______________________________]
(Depository)
By:_____________________________________
Name:
Title:
A-1
EXHIBIT B
ESCROW ACCOUNT LETTER AGREEMENT
________________, 2006
To: [__________________________]
(the "Depository")
As Servicer under the Servicing Agreement, dated as of
____________________, we hereby authorize and request that you to establish an
account, as an Escrow Account, to be designated as "GMAC Mortgage Corporation,
as Servicer, in trust for Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Owner")
and various Mortgagors." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Owner. You may refuse any deposit
which would result in violation of the requirement that the account be insured
as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
GMAC 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. The amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through
the Bank Insurance Fund or the Savings Association Insurance Fund to the
maximum extent available.
By:_____________________________________
Name:
Title:
Date:
B-1
EXHIBIT C
CONTENTS OF LEGAL FILE
With respect to each Mortgage Loan, the Legal File shall include
each of the following items:
1. The original Note, bearing all intervening endorsements, endorsed, "Pay
to the order of _______________ without recourse" or "pay to the order
of _________________ without recourse" and signed in the name of the
original payee or by the last endorsee by an authorized officer.
2. Either: (a) the original recorded Mortgage with recording information
thereon, together with a certified true copy of the original
power-of-attorney showing the recording information thereon, if the
Mortgage was executed by an attorney-in-fact; (b) a certified true copy
of the Mortgage and of the power of attorney (if applicable), the
originals of which have been transmitted for recording, until such time
as the originals are returned by the public recording office; or (c) a
copy of the Mortgage certified by the public recording office in those
instances where the public recording office retains the original or the
original is lost, together with a duplicate original mortgagee's
certificate of title if the Mortgagee is registered under the Torrens
system.
3. The original Assignment of Mortgage for each Mortgage Loan, either in
blank or in favor of the Owner, in form acceptable for recording but
which may not have been recorded, signed in the name of the original
mortgagee or the last assignee by an authorized officer.
4. A copy of the title search and mortgagee title insurance commitment or
the original mortgagee title insurance policy issued by an approved ALTA
title insurance company.
5. Originals of all intervening assignments, if any, with evidence of
recording thereon, or certified true copies with evidence that the
originals have been transmitted for recording until such time as the
originals are returned by the public recording office, or a copy of each
such assignment certified by the public recording office if such office
retains the original, or if such original is lost. If the payee of the
Note assigned the Note under a different name, whether as a result of a
merger, name change, receivership, or other event which did not require
separate endorsement and assignment, certified copies of the documents
evidencing such events must be provided.
6. Originals of all assumption, modification, consolidation or extension
agreements with evidence of recording thereon, if any.
C-1
EXHIBIT D
CONTENTS OF SERVICING FILE
With respect to each Mortgage Loan, the Servicing File shall
include each of the following items:
1. A copy of each document in the Legal File, including each item listed on
Exhibit C and any other item actually included in the Legal File.
2. A survey or plat of the Mortgaged Property (except if the Mortgaged
Property is a condominium unit), unless the title insurance contains a
116 or "no survey" endorsement.
3. Original hazard insurance policy (or certificate of insurance for a
condominium or planned unit development unit) and certificate or
original policy of flood insurance, if applicable.
4. Mortgage Loan closing statement or a copy thereof.
5. Residential Mortgage Loan application.
6. Verification of employment and income (if applicable).
7. Verification of evidence of source and amount of down payment (if
applicable).
8. Credit report on the Obligor.
9. Residential appraisal report.
10. Photograph of the Mortgaged Property.
a. Payment records and current and historical computerized data
files; and
b. tax receipts, insurance premium receipts, ledger sheets,
correspondence, insurance claim files and correspondence, and all
other papers and records developed or originated by Owner or
others, required to document the Mortgage Loan or to service the
Mortgage Loan; provided, however, that these items may be provided
no later than 15 days after the service transfer date.
11. A copy of the guarantee(s), if any.
12. Copies of each security agreement, chattel mortgage or equivalent,
executed in connection with the Mortgage, if any.
13. Copy of each instrument necessary to complete identification of any
exception set forth in the title policy, if any.
D-1
14. All required disclosure statements, including a copy of the HUD good
faith estimate, HUD-1 settlement statement and TILA disclosure statement
prepared in connection with the Mortgage Loan indicating that the
Obligor has received all disclosures required by RESPA and TILA.
15. Termite reports, structural engineer's report, water potability and
septic certification, if any.
16. Sales contract, if any.
17. If the Mortgaged Property is a leasehold estate, a copy of the lease
with evidence of recording thereon (or, if such recorded copy has not
yet been returned by the applicable recording office, a copy thereof
certified to be a true, correct and complete copy of such lease sent for
recording).
18. Any and all documents, agreements or instruments related to the Mortgage
Loan or the Note and Owner's right and benefits therein; all documents
related to the making and closing of the Mortgage Loan; and any other
documents, agreements, or instruments related to the Mortgage Loan or
required by Owner, in order to enable Owner to sell the Mortgage Loan to
a private investor or as part of a securitization or other financing
vehicle.
19. A statement showing the account number, customer name, unpaid principal
balance of the Mortgage Loan, the amount of periodic installments and
the date(s) to which principal, interest and any escrows have been paid,
the accrued but unpaid interest up to and including the Closing Date;
provided, however, that this information may be provided in a trial
balance; and, if required by Owner, a ledger card or ledger history
reflecting all receipts and disbursements.
20. The federal and state fair fending and equal credit notices, including
the truth-in-lending statement and rescission notices, if applicable.
D-2
EXHIBIT E
INFORMATION INCLUDED ON MORTGAGE LOAN SCHEDULE
1. Servicer loan number;
2. Originator or investor loan number;
3. Mortgagor last name;
4. Current Owner;
5. Original loan balance;
6. Unpaid principal balance;
7. Principal balance purchased;
8. Mortgage Interest Rate;
9. Next due date;
10. Mortgage Loan product type; and
11. Such other information as the Interim Servicer may reasonably require.
E-1
EXHIBIT F
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, ____, Xxxxxx Xxxxxxx Mortgage
Capital Inc. (the "Owner"), as the Owner under the First Amended and Restated
Servicing Agreement, dated as of January 1, 2006 (the "Agreement"), does
hereby transfer to GMAC Mortgage Corporation (the "Servicer"), as Servicer
under the Agreement, the Servicing responsibilities related to the Mortgage
Loans listed on the Mortgage Loan Schedule attached hereto as Schedule F-1.
The Servicer hereby accepts the Servicing responsibilities transferred hereby
and on the date hereof assumes all Servicing responsibilities related to the
Mortgage Loans identified on the attached Mortgage Loan Schedule all in
accordance with the Agreement. The contents of each Servicing File required to
be delivered to service the Mortgage Loans pursuant to the Agreement have been
or shall be delivered to the Servicer by the Owner in accordance with the
terms of the Agreement.
With respect to the Mortgage Loans made subject to the Agreement
hereby, the Closing Date shall be _______________.
All other terms and conditions of this transaction shall be
governed by the Agreement.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
This Acknowledgment 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.
IN WITNESS WHEREOF, the Owner and the Servicer have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
OWNER:
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:_____________________________________
Name:
Title:
F-1
SERVICER:
GMAC MORTGAGE CORPORATION
By:_____________________________________
Name:
Title:
F-2
EXHIBIT G
FORM OF INDEMNIFICATION AND
CONTRIBUTION AGREEMENT
[THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT, dated
[_________] ("Agreement"), among Xxxxxx Xxxxxxx ABS Capital I Inc., a Delaware
corporation (the "Depositor"), Xxxxxx Xxxxxxx & Co. Incorporated, as
representative (the "Representative") of itself, [________] and [_________]
(together, the "Underwriters"), and GMAC Mortgage Corporation, a [___________]
[corporation] (the "Servicer").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser"),
an affiliate of the Depositor, purchased the Mortgage Loans in anticipation of
the securitization transaction;
WHEREAS, the Purchaser will transfer, assign and convey the
Mortgage Loans to the Depositor and the Depositor will thereupon transfer,
assign and convey the Mortgage Loans to the trust created by the Pooling and
Servicing Agreement (as defined herein);
WHEREAS, as an inducement to the Depositor to enter into the
Pooling and Servicing Agreement, and the Underwriters to enter into the
Underwriting Agreement (as defined herein) and the Initial Purchasers to enter
into the Certificate Purchase Agreement (as defined herein), the Servicer
wishes to provide for indemnification and contribution on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms shall have the meanings set forth below,
unless the context clearly indicates otherwise:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
"ABS Informational and Computational Material" means any written
communication as defined in Item 1101(a) of Regulation AB under the 1933 Act
and the 1934 Act, as may be amended from time to time.
Exh. G-1
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Certificate Purchase Agreement: The Purchase Agreement, dated as
of [_______], among the Depositor and the Initial Purchasers, relating to the
Privately Offered Certificates.
Depositor Information: All information in the Prospectus
Supplement or the Private Placement Memorandum other than Servicer Information
and Originator Information.
"Free Writing Prospectus" means any written communication that
constitutes a "free writing prospectus," as defined in Rule 405 under the 1933
Act.
Indemnifying Party: Either the Servicer or the Depositor, as
applicable.
Originator Information: All information in the Prospectus
supplement or the Private Placement Memorandum that specifically relates to
any Originator, any Originator's underwriting guidelines and the related
Mortgage Loans, the Mortgaged Properties or the Mortgagors.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of [_________], among the Depositor, [the Servicer],
[NAMES OF RESPONSIBLE PARTIES], [NAME OF OTHER SERVICERS] and [NAME OF
TRUSTEE].
Privately Offered Certificates: Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust [_________], Mortgage Pass-Through Certificates, Series [_________],
Class [__] Certificates issued pursuant to the Pooling and Servicing
Agreement.
Private Placement Memorandum: The private placement memorandum,
dated [_________], relating to the offering of the Privately Offered
Certificates.
Prospectus Supplement: The prospectus supplement, dated
[_________], relating to the offering of the Publicly Offered Certificates.
Publicly Offered Certificates: Xxxxxx Xxxxxxx ABS Capital I Inc.
Trust [_________], Mortgage Pass-through Certificates, [_________],[_________]
Certificates issued pursuant to the Pooling and Servicing Agreement.
Responsible Party Information: All information in the Prospectus
Supplement, ABS Informational and Computational Materials, Free Writing
Prospectus or the Private Placement Memorandum (i) contained under the
headings "Transaction Overview--Parties--The Original Loan Sellers--[NAME OF
RESPONSIBLE PARTY]", "The Mortgage Loan Pool--Underwriting Guidelines--[NAME
OF RESPONSIBLE PARTY]" (or similarly titled sections), and (ii) regarding the
Mortgage Loans, the related mortgagors and/or the related
Exh. G-2
Mortgaged Properties (but in the case of this clause (ii), only to the extent
any untrue statement or omission arises from or is based upon errors or
omissions in the information concerning the Mortgage Loans, the related
mortgagors and/or the related Mortgaged Properties, as applicable, provided to
the Depositor or any affiliate by or on behalf of the Responsible Party).
Servicer Information: All information in the Prospectus
Supplement, ABS Informational and Computational Materials, Free Writing
Prospectus or the Private Placement Memorandum contained under the headings
"Transaction Overview--Parties--The Servicer[s]--[NAME OF SERVICER]" and "The
Servicer[s]" (or similarly titled sections).
Underwriting Agreement: The Underwriting Agreement, dated [_____],
among the Depositor and the Underwriters, relating to the sale of the Publicly
Offered Certificates.
1.2 Other Terms.
Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Pooling and Servicing Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Each party hereto represents and warrants that:
(a) it has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and
delivered by such party; and
(c) assuming the due authorization, execution and delivery by each
other party hereto, this Agreement constitutes the legal, valid and
binding obligation of such party, except as such enforceability may be
limited by bankruptcy, insolvency and similar laws and equitable
principles affecting the enforceability of the rights of creditors
generally.
ARTICLE III.
INDEMNIFICATION
3.1 Indemnification by Indemnifying Parties.
(a) The Servicer agrees to indemnify and hold harmless the
Depositor and the Underwriters and their respective directors and
officers and each Person, if any, that controls the Depositor or the
respective Underwriters, within the meaning of either Section 15 of the
1933 Act or the Section 20 of the 1934 Act, against any and all actual
losses, claims, damages or liabilities to which the Depositor or the
Underwriters or any
Exh. G-3
such director, officer or controlling Person may become subject, under
the 1933 Act, the 1934 Act or otherwise, to the extent that such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement of any material fact contained
in the Servicer Information in the Prospectus Supplement, ABS
Informational and Computational Materials, the Free Writing Prospectus,
the Private Placement Memorandum or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were
made, not misleading, and the Servicer shall in each case reimburse the
Depositor and the Underwriters, and each such director, officer and
controlling Person for any legal or other expenses reasonably incurred
by the Depositor and the Underwriters, and each such director, officer
or controlling Person, in connection with defending any such loss,
claim, damage, liability or action. The Servicer's liability under this
Section 3.1 shall be in addition to any other liability that the
Servicer may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the
Servicer, its directors and officers and each Person, if any, that
controls the Servicer, within the meaning of either Section 15 of the
1933 Act or the Section 20 of the 1934 Act, against any and all actual
losses, claims, damages or liabilities to which the Servicer or any such
director, officer or controlling Person may become subject, under the
1933 Act, the 1934 Act or otherwise, to the extent that such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement of any material fact contained
in the Depositor Information in the Prospectus Supplement, ABS
Informational and Computational Materials, the Free Writing Prospectus,
the Private Placement Memorandum or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were
made, not misleading, and the Depositor shall in each case reimburse the
Servicer, and each such director, officer and controlling Person for any
legal or other expenses reasonably incurred by the Servicer and each
such director, officer or controlling Person, in connection with
investigating or defending any such loss, claim, damage, liability or
action. The Depositor's liability under this Section 3.1 shall be in
addition to any other liability that the Depositor may otherwise have.
(c) If the indemnification provided for in this Section 3.1 shall
for any reason be held to be unavailable to an indemnified party under
this Section 3.1 which would otherwise be obligated to indemnify with
respect thereto, on the one hand, and the parties which would otherwise
be entitled to be indemnified, on the other, shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated herein and incurred by the parties hereto in such
proportions that are appropriate to reflect the relative fault of the
Depositor, on the one hand, and the Servicer, on the other hand, in
connection with the applicable misstatements or omissions.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx)
shall be entitled to contribution from any Person that was not guilty of
such fraudulent misrepresentation. For purposes of this Section 3.1,
each director of a party to this
Exh. G-4
Agreement and each Person, if any, that controls a party to this
Agreement within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as such party.
3.4 Notification; Procedural Matters.
Promptly after receipt by an indemnified party under Section 3.1
of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
applicable Indemnifying Party (or if a claim for contribution is to be made
against another party) under Section 3.1 hereof, notify the applicable
Indemnifying Party (or other contributing party) in writing of the claim or
the commencement of such action; provided, however, that the failure to notify
the applicable Indemnifying Party (or other contributing party) shall not
relieve it from any liability it may have under Section 3.1 except to the
extent it has been materially prejudiced by such failure; and provided
further, however, that the failure to notify the applicable Indemnifying Party
shall not relieve it from any liability it may have to any indemnified party
(or to the party requesting contribution) otherwise than under Section 3.1
hereof. In case any such action is brought against any indemnified party and
it notifies the applicable Indemnifying Party of the commencement thereof, the
applicable Indemnifying Party shall be entitled to participate therein and, to
the extent that, by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, the
applicable Indemnifying Party elects to assume the defense thereof, it may do
so with counsel reasonably satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the
indemnified party and the applicable Indemnifying Party and the indemnified
party or parties shall reasonably have concluded that there may be legal
defenses available to it or them and/or other indemnified parties that are
different from or additional to those available to the applicable Indemnifying
Party, the indemnified party or parties shall have the right to select
separate counsel to assert such legal defenses and to otherwise participate in
the defense of such action on behalf of such indemnified party or parties.
Upon receipt of notice from the applicable Indemnifying Party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of such counsel, the applicable Indemnifying
Party shall not be liable to such indemnified party under this paragraph for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall
have employed separate counsel (plus any local counsel) in connection with the
assertion of legal defenses in accordance with the proviso to the immediately
preceding sentence, (ii) the applicable Indemnifying Party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action or (iii) the applicable Indemnifying Party shall have authorized in
writing the employment of counsel for the indemnified party at the expense of
the applicable Indemnifying Party. No party shall be liable for contribution
with respect to any action or claim settled without its consent, which shall
not be unreasonably withheld. In no event shall the applicable Indemnifying
Party be liable for the fees and expenses of more than one counsel
representing the indemnified parties (in addition to any local counsel)
separate from its own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
Exh. G-5
ARTICLE IV.
GENERAL
4.1 Survival.
This Agreement and the obligations of the parties hereunder shall
survive the purchase and sale of the Publicly Offered Certificates and
Privately Offered Certificates.
4.2 Successors.
This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and the officers, directors
and controlling Persons referred to in Article III hereof and their respective
successors and assigns, and no other Person shall have any right or obligation
hereunder.
4.3 Applicable Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to principles of
conflict of laws.
4.4 Miscellaneous.
Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated except by a writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Agreement may be signed in any number of counterparts, each of which shall be
deemed an original, which taken together shall constitute one and the same
instrument.
4.5 Notices.
All communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered to (a) in the case of the
Depositor, Xxxxxx Xxxxxxx ABS Capital I Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxx Xxxxxxx, with a copy to Xxxxxx Xxxxxxx ABS
Capital I Inc., 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx
Xxxxx, Esq.; (b) in the case of the Underwriters, Xxxxxx Xxxxxxx & Co.
Incorporated, on behalf of itself and as Representative of the several
Underwriters, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx
Xxxxx, Esq.; and (c) in the case of the Servicer, [_________],[_________],
Attention: [_________], with a copy to [_________],[_________], Attention:
[_________].
4.6 Submission To Jurisdiction; Waivers.
Each Indemnifying Party hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT
Exh. G-6
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO ITS ADDRESS SET FORTH HEREIN OR AT SUCH OTHER
ADDRESS OF WHICH THE DEPOSITOR SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
4.7 Waiver of Trial by Jury.
EACH INDEMNIFYING PARTY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SIGNATURE PAGE FOLLOWS
Exh. G-7
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
XXXXXX XXXXXXX ABS
CAPITAL I INC.
By:____________________________________
Name:
Title:
[_________]
By:____________________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED, as
Representative of the Underwriters
By:____________________________________
Name:
Title:
GMAC MORTGAGE CORPORATION,
By:____________________________________
Name:
Title:
G-1
EXHIBIT H
SERVICE RELEASE AND TRANSFER OF OWNERSHIP AGREEMENT
THIS SERVICE RELEASE AND TRANSFER OF OWNERSHIP AGREEMENT (the
"Service Transfer Agreement"), dated as of _____________, _____ (the
"Servicing Transfer Date"), is made and entered into by and among
_____________________________, as the original owner (herein referred to as
the "Original Owner"), _____________________, as the successor owner (herein
referred to as the "Owner"), and GMAC Mortgage Corporation, a Pennsylvania
corporation, as the servicer (herein referred to as the "Servicer").
RECITALS
WHEREAS, on _____________, the Original Owner and the Servicer
entered into a Servicing Agreement (the "Servicing Agreement"), to provide for
the Servicing of the Original Owner's mortgage loans by the Servicer;
WHEREAS, the Original Owner desires to transfer its ownership of
the Mortgage Loans directly to the Owner, and the Owner desires to accept such
transfer;
WHEREAS, the Original Owner, the Owner and the Servicer desire
that the Servicing Agreement shall govern all Mortgage Loan transfers and that
all Mortgage Loans so transferred (the "Transferred Mortgage Loans") shall
continue to be subject to and serviced pursuant to the Servicing Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Owner and the
Servicer hereby agree as follows:
1. Transfer of Ownership of the Mortgage Loans. As of the Servicing
Transfer Date, the Original Owner hereby transfers all of its right,
title and interest in the Mortgage Loans to the Owner, and the Owner
hereby accepts such transfer in accordance with the terms of this
Service Transfer Agreement.
2. Servicing of the Mortgage Loans. The Servicing Agreement shall govern
all Mortgage Loan transfers and the Servicer shall service the
Transferred Mortgage Loans pursuant to the terms and conditions of the
Servicing Agreement.
3. Servicing Fee Rate. The Servicing Fee Rate for Servicing the Transferred
Mortgage Loans shall be no less than ______________.
4. Custodial Accounts. The Collection Account and Escrow Account shall be
entitled:
5. Servicing Advances. The parties hereby agree that the Servicer shall
have the right to reimburse itself for any unreimbursed Servicing
Advances owed to it by the Original Owner directly from the Collection
Account. If funds in the Collection Account are
H-1
insufficient to reimburse the Servicer for any unreimbursed Servicing
Advances, the Original Owner shall directly reimburse the Servicer from
its own funds within five (5) Business Days of receipt from the Servicer
of a notification or invoice itemizing the unreimbursed Servicing
Advances. Notwithstanding the foregoing, if upon the Servicing Transfer
Date.
6. Schedule of Transferred Mortgage Loans. The Transferred Mortgage Loans
that are subject to this Servicing Transfer Agreement are listed in
Schedule H-1, attached hereto and made a part hereof.
7. Miscellaneous.
a. This Servicing Transfer Agreement is hereby fully incorporated
into and made part of the Servicing Agreement.
b. Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Servicing Agreement.
c. The Servicing Agreement, as amended by this Servicing Transfer
Agreement, is hereby ratified and confirmed by the Owner and the
Servicer.
IN WITNESSETH WHEREOF, the Original Owner, the Owner, and the
Servicer have caused their names to be signed by their respective officers
thereunto duly authorized as of the day and year first above written.
ORIGINAL OWNER
________________________________________
By:_____________________________________
OWNER
_________________________________________
By:_____________________________________
H-2
SERVICER
GMAC MORTGAGE CORPORATION
By:_____________________________________
Name:
Title:
H-3
EXHIBIT I
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"), among
------------------------------------------------------------------------
[IDENTIFY PARTIES]
------------------
I, ________________________________, the _______________________
of [NAME OF COMPANY] (the "Company"), certify to [the Owner], [the Depositor],
and the [Master Servicer] [Securities Administrator] [Trustee], and their
officers, with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans by
the Company during 200[ ] that were delivered by the Company to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee]
pursuant to the Agreement (collectively, the "Company Servicing
Information");
2. Based on my knowledge, the Company Servicing Information, taken
as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in
the light of the circumstances under which such statements were made,
not misleading with respect to the period of time covered by the Company
Servicing Information;
3. Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
4. I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement
and except as disclosed in the Compliance Statement, the Servicing
Assessment or the Attestation Report, the Company has fulfilled its
obligations under the Agreement in all material respects; and
5. The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the [Depositor] [Master Servicer]. Any material instances of
noncompliance described in such reports have been disclosed to the
I-1
[Depositor] [Master Servicer]. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
Date:__________________________________
By:____________________________________
Name:
Title:
I-2
EXHIBIT J
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Servicer]
[Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
--------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
General Servicing Considerations
--------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are instituted to
monitor any performance or other triggers and
events of default in accordance with the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(1)(ii) If any material servicing activities are
outsourced to third parties, policies and
procedures are instituted to monitor the
third party's performance and compliance with
such servicing activities.
--------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the transaction
agreements to maintain a back-up servicer for
the mortgage loans are maintained.
--------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions
policy is in effect on the party
participating in the servicing function
throughout the reporting period in the amount
of coverage required by and otherwise in
accordance with the terms of the transaction
agreements.
--------------------------------------------------------------------------------
Cash Collection and Administration
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into
the appropriate custodial bank accounts and
related bank clearing accounts no more than
two business days following receipt, or such
other number of days specified in the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on
behalf of an obligor or to an investor are
made only by authorized personnel.
--------------------------------------------------------------------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding
collections, cash flows or distributions, and
any interest or other fees charged for such
advances, are made, reviewed and approved as
specified in the transaction agreements.
--------------------------------------------------------------------------------
J-1
--------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
1122(d)(2)(iv) The related accounts for the transaction,
such as cash reserve accounts or accounts
established as a form of
overcollateralization, are separately
maintained (e.g., with respect to commingling
of cash) as set forth in the transaction
agreements.
--------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a
federally insured depository institution as
set forth in the transaction agreements. For
purposes of this criterion, "federally
insured depository institution" with respect
to a foreign financial institution means a
foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
--------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to
prevent unauthorized access.
--------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly
basis for all asset-backed securities related
bank accounts, including custodial accounts
and related bank clearing accounts. These
reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or
such other number of days specified in the
transaction agreements; (C) reviewed and
approved by someone other than the person who
prepared the reconciliation; and (D) contain
explanations for reconciling items. These
reconciling items are resolved within 90
calendar days of their original
identification, or such other number of days
specified in the transaction agreements.
--------------------------------------------------------------------------------
Investor Remittances and Reporting
--------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be
filed with the Commission, are maintained in
accordance with the transaction agreements
and applicable Commission requirements.
Specifically, such reports (A) are prepared
in accordance with timeframes and other terms
set forth in the transaction agreements; (B)
provide information calculated in accordance
with the terms specified in the transaction
agreements; (C) are filed with the Commission
as required by its rules and regulations; and
(D) agree with investors' or the trustee's
records as to the total unpaid principal
balance and number of mortgage loans serviced
by the Servicer.
--------------------------------------------------------------------------------
J-2
--------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and
remitted in accordance with timeframes,
distribution priority and other terms set
forth in the transaction agreements.
--------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted
within two business days to the Servicer's
investor records, or such other number of
days specified in the transaction agreements.
--------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the
investor reports agree with cancelled checks,
or other form of payment, or custodial bank
statements.
--------------------------------------------------------------------------------
Pool Asset Administration
--------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is
maintained as required by the transaction
agreements or related mortgage loan documents.
--------------------------------------------------------------------------------
1122(d)(4)(ii) Mortgage loan and related documents are
safeguarded as required by the transaction
agreements
--------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to
the asset pool are made, reviewed and
approved in accordance with any conditions or
requirements in the transaction agreements.
--------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on mortgage loans, including any
payoffs, made in accordance with the related
mortgage loan documents are posted to the
Servicer's obligor records maintained no more
than two business days after receipt, or such
other number of days specified in the
transaction agreements, and allocated to
principal, interest or other items (e.g.,
escrow) in accordance with the related
mortgage loan documents.
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1122(d)(4)(v) The Servicer's records regarding the mortgage
loans agree with the Servicer's records with
respect to an obligor's unpaid principal
balance.
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1122(d)(4)(vi) Changes with respect to the terms or status
of an obligor's mortgage loans (e.g., loan
modifications or re-agings) are made,
reviewed and approved by authorized personnel
in accordance with the transaction agreements
and related pool asset documents.
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J-3
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Applicable
Servicing
Servicing Criteria Criteria
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Reference Criteria
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1122(d)(4)(vii) Loss mitigation or recovery actions (e.g.,
forbearance plans, modifications and deeds in
lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated,
conducted and concluded in accordance with
the timeframes or other requirements
established by the transaction agreements.
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1122(d)(4)(viii) Records documenting collection efforts are
maintained during the period a mortgage loan
is delinquent in accordance with the
transaction agreements. Such records are
maintained on at least a monthly basis, or
such other period specified in the
transaction agreements, and describe the
entity's activities in monitoring delinquent
mortgage loans including, for example, phone
calls, letters and payment rescheduling plans
in cases where delinquency is deemed
temporary (e.g., illness or unemployment).
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1122(d)(4)(ix) Adjustments to interest rates or rates of
return for mortgage loans with variable rates
are computed based on the related mortgage
loan documents.
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1122(d)(4)(x) Regarding any funds held in trust for an
obligor (such as escrow accounts): (A) such
funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at
least an annual basis, or such other period
specified in the transaction agreements; (B)
interest on such funds is paid, or credited,
to obligors in accordance with applicable
mortgage loan documents and state laws; and
(C) such funds are returned to the obligor
within 30 calendar days of full repayment of
the related mortgage loans, or such other
number of days specified in the transaction
agreements.
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1122(d)(4)(xi) Payments made on behalf of an obligor (such
as tax or insurance payments) are made on or
before the related penalty or expiration
dates, as indicated on the appropriate bills
or notices for such payments, provided that
such support has been received by the
servicer at least 30 calendar days prior to
these dates, or such other number of days
specified in the transaction agreements.
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1122(d)(4)(xii) Any late payment penalties in connection with
any payment to be made on behalf of an
obligor are paid from the servicer's funds
and not charged to the obligor, unless the
late payment was due to the obligor's error
or omission.
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J-4
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Applicable
Servicing
Servicing Criteria Criteria
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Reference Criteria
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1122(d)(4)(xiii) Disbursements made on behalf of an obligor
are posted within two business days to the
obligor's records maintained by the servicer,
or such other number of days specified in the
transaction agreements.
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1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible
accounts are recognized and recorded in
accordance with the transaction agreements.
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1122(d)(4)(xv) Any external enhancement or other support,
identified in Item 1114(a)(1) through (3) or
Item 1115 of Regulation AB, is maintained as
set forth in the transaction agreements.
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[NAME OF SERVICER] [SUBSERVICER]
Date:
By:____________________________________
Name:
Title:
J-5
SCHEDULE I
REPORTS PREPARED BY THE SERVICER
1. Mortgage Loan level detail of such remittance allocable to principal;
2. Mortgage Loan level detail of such remittance allocable to curtailments;
3. Mortgage Loan level detail of such remittance allocable to payoffs;
4. Mortgage Loan level detail of such remittance allocable to interest;
5. Mortgage Loan level detail of the outstanding principal balance of the
Mortgage Loans as of the close of business on the related Determination
Date;
6. Mortgage Loan level detail of accrued interest income;
7. Mortgage Loan level detail of charge-offs and recoveries, including
accounts settled short;
8. Mortgage Loan level detail for:
a. Prepayment charges
b. Servicing Advances - reimbursed and non-reimbursed
c. Due Dates
d. Current interest rate
e. Current P&I payments
f. Escrow balance
g. Suspense balance
9. The weighted average maturity of the Mortgage Loans as of the close of
business on the applicable Determination Date;
10. The number and aggregate principal balances of Mortgage Loans (a)
Delinquent (i) 30 days, (ii) 60 days, (iii) 90 days or more, or (iv) 120
days or more; (b) as to which foreclosure has commenced; (c) in
Bankruptcy; and (d) as to which REO Property has been acquired;
11. Book values for all REO Property, including expenses;
12. Other portfolio data as agreed upon by both parties; and
13. Any other reports as deemed necessary at securitization and reasonably
prepared by the Servicer.
I-1
SCHEDULE II
[RESERVED]
II-1
SCHEDULE III
PREPAYMENT PENALTY SCHEDULE
(To be provided by Xxxxxx Xxxxxxx)
III-1
