EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
between
FIRST FRANKLIN FINANCIAL CORPORATION
as Seller
and
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
as Purchaser
Dated as of
February 1, 2007
Section 1. Definitions............................................... 1
Section 2. Purchase and Sale of the Mortgage Loans and Related
Rights.................................................... 4
Section 3. Mortgage Loan Schedule.................................... 5
Section 4. Mortgage Loan Transfer.................................... 5
Section 5. Examination of Mortgage Files............................. 7
Section 6. Sale Treatment............................................ 9
Section 7. Representations and Warranties of Seller Concerning the
Mortgage Loans............................................ 9
Section 8. Representations and Warranties Concerning the Seller...... 20
Section 9. Representations and Warranties Concerning the Purchaser... 21
Section 10. Conditions to Closing..................................... 23
Section 11. Fees and Expenses......................................... 25
Section 12. Accountants' Letters...................................... 25
Section 13. Indemnification........................................... 25
Section 14. Notices................................................... 27
Section 15. Transfer of Mortgage Loans................................ 28
Section 16. Termination............................................... 28
Section 17. Representations, Warranties and Agreements to Survive
Delivery.................................................. 28
Section 18. Mandatory Delivery; Grant of Security Interest............ 28
Section 19. Severability.............................................. 29
Section 20. Counterparts.............................................. 29
Section 21. Amendment................................................. 29
Section 22. GOVERNING LAW............................................. 29
Section 23. Further Assurances........................................ 30
Section 24. Successors and Assigns.................................... 30
Section 25. The Seller................................................ 30
Section 26. Entire Agreement.......................................... 30
Section 27. No Partnership............................................ 30
EXHIBIT 1 MORTGAGE LOAN SCHEDULE INFORMATION........................ E-1-1
EXHIBIT 2 CONTENTS OF EACH MORTGAGE FILE............................ E-2-1
EXHIBIT 3 APPENDIX E - Standard & Poor's Predatory Lending
Categories................................................ E-3-1
SCHEDULE A MORTGAGE LOAN SCHEDULE.................................... A-1
SCHEDULE B REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES........... B-1
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MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of February 1, 2007 (the
"Agreement"), by and between FIRST FRANKLIN FINANCIAL CORPORATION, a Delaware
corporation having an office at 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the
"Seller"), and XXXXXXX XXXXX MORTGAGE INVESTORS, INC., a Delaware corporation
having an office at 000 Xxxxx Xxxxxx, 4 World Financial Center, New York, New
York 10080 (the "Purchaser").
Upon the terms and subject to the conditions of this Agreement, the Seller
agrees to sell, and the Purchaser agrees to purchase, certain first lien,
fixed-and adjustable-rate mortgage loans secured by one- to four-family
residences, townhouses, individual condominiums, co-op units and units in
planned unit developments (collectively, the "Mortgage Loans") as described
herein. The Purchaser intends to deposit the Mortgage Loans into a trust fund
(the "Trust Fund" or the "Issuing Entity") and create the First Franklin
Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-FF2
(the "Certificates"), under a pooling and servicing agreement, to be dated as of
February 1, 2007 (the "Pooling and Servicing Agreement"), by and among the
Purchaser, as depositor, LaSalle Bank, National Association, as trustee (the
"Trustee") and Home Loan Services, Inc. (the "Servicer").
The Purchaser has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Number 333-130545) relating
to its Mortgage Asset-Backed Certificates and the offering of certain series
thereof (including certain classes of the Certificates) from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder (the "Securities
Act"). Such registration statement, when it became effective under the
Securities Act, and the prospectus relating to the public offering of certain
classes of the Certificates by the Purchaser (the "Public Offering"), as from
time to time each is amended or supplemented pursuant to the Securities Act or
otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus," respectively. The "Prospectus Supplement" shall mean that
supplement, dated February 27, 2007 to the Prospectus, dated February 20, 2007,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, the Purchaser and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") have entered into a
terms agreement dated as of February 26, 2007 to an underwriting agreement dated
February 28, 2003, between the Purchaser and Xxxxxxx Xxxxx (together, the
"Underwriting Agreement").
Now, therefore, in consideration of the premises and the mutual agreements
set forth herein, the parties hereto agree as follows:
Section 1. Definitions.
Certain terms are defined herein. Capitalized terms used herein but not
defined herein shall have the meanings specified in the Pooling and Servicing
Agreement. The following other terms are defined as follows:
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for the
adjustment of the Mortgage Rate payable in respect thereto.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan, the
date set forth in the related Mortgage Note on which the Mortgage Rate on such
Adjustable Rate Mortgage Loan is adjusted in accordance with the terms of the
related Mortgage Note.
Appraised Value: With respect to any Mortgaged Property, the lesser of (i)
the value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time of origination of the Mortgage Loan either by a
Qualified Appraiser or pursuant to the Automated Valuation Model as set forth in
the Originator's Underwriting Guidelines, and (ii) the purchase price paid for
the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the value determined
by an appraisal made for the originator of such Refinanced Mortgage Loan at the
time of origination of such Refinanced Mortgage Loan either by a Qualified
Appraiser or pursuant to the Automated Valuation Model as set forth in the
Originator's Underwriting Guidelines.
Automated Valuation Model: A statistical mood or algorithm that estimates
the market value of the subject property as of a particular date.
Balloon Loan: A Mortgage Loan identified on the Mortgage Loan Schedule as a
balloon mortgage loan.
Buydown Mortgage Loan: A Mortgage Loan in which buydown funds are used to
pay a portion of the interest payable on the Mortgage Loan for a specified
period of time.
Certificates: Shall mean the Class A-1 Certificates, the Class A-2A
Certificates, the Class A-2B Certificates, the Class A-2C Certificates, the
Class A-2D Certificates, the Class R Certificates, the Class M-1 Certificates,
Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates,
the Class M-5 Certificates, the Class M-6 Certificates, the Class B-1
Certificates, the Class B-2 Certificates, the Class B-3 Certificates and the
Class B-4 Certificates issued pursuant to the Pooling and Servicing Agreement.
Closing Date: February 28, 2007.
Cut-off Date Balance: $205,989,567.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Due Date: With respect to each Mortgage Loan, the first day in each month.
Escrow Payments: The amounts constituting ground rents, taxes, assessments,
water charges, sewer rents, primary insurance policy premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the Mortgagee pursuant to the terms of any Mortgage Note or Mortgage.
FHLMC: The Federal Home Loan Mortgage Corporation or any successor thereto.
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Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which the
Mortgage Rate set forth in the Mortgage Note is fixed for the term of such
Mortgage Loan.
Flood Zone Service Contract: A transferable contract maintained for the
Mortgaged Property with a nationally recognized flood zone service provider for
the purpose of obtaining the current flood zone status relating to such
Mortgaged Property.
FNMA: Xxxxxx Mae or any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the interest rate thereon.
Xxxxxxx Xxxxx: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgages electronically
maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Loan.
MOM Loan: Any Loan as to which MERS is acting as mortgagee, solely as
nominee for the originator of such Loan and its successors and assigns
Monthly Payment: With respect to any Mortgage Loan, the scheduled combined
payment of principal and interest payable by a Mortgagor under the related
Mortgage Note on each Due Date.
Moody's: Xxxxx'x Investors Service, Inc., or its successors in interest.
Mortgage: The mortgage or deed of trust creating a first lien on an
interest in real property securing a Mortgage Note.
Mortgage File: The items set out on Exhibit 2 hereto pertaining to a
particular Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans to be annexed hereto
as Schedule A on the Closing Date setting forth the information contained on
Exhibit 1 hereto.
Mortgage Note: The original executed note or other evidence of the Mortgage
Loan indebtedness of a Mortgagor.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note as
stated therein.
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Mortgaged Property: The Mortgagor's real property securing repayment of a
related Mortgage Note, consisting of a fee simple interest or leasehold interest
in a single parcel of real property improved by a Residential Dwelling.
Mortgagor: The obligor(s) on a Mortgage Note.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Seller or the Purchaser, reasonably acceptable to the Trustee.
Origination Date: The date on which a Mortgage Loan funded.
Originator: First Franklin Financial Corporation, a Delaware corporation.
Originator's Underwriting Guidelines: The underwriting guidelines in effect
as of the applicable Origination Date, used by the Originator in originating
and/or acquiring Mortgage Loans, including the restrictions applicable thereto,
as amended from time to time, and which have been provided or made available to
the Purchaser.
Person: Any legal person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Prepayment Charge: With respect to any Mortgage Loan, the premiums, fees,
or charges, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.
Purchase Price: With respect to any Mortgage Loan required to be purchased
by the Seller pursuant to the applicable provisions of this Agreement, an amount
equal to the sum of (i) 100% of the principal remaining unpaid on such Mortgage
Loan as of the date of purchase (including if a foreclosure has already
occurred, the principal balance of the related Mortgage Loan at the time the
Mortgaged Property was acquired), (ii) accrued and unpaid interest thereon at
the Mortgage Rate through and including the last day of the month of purchase
and (iii) any costs and damages incurred by the Issuing Entity in connection
with any violation by such Mortgage Loan of any predatory or abusive-lending
law.
Qualified Appraiser: A state licensed or certified appraiser, duly
appointed by the Originator, who had no interest, direct or indirect in the
Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and such appraiser and the appraisal made by such appraiser both satisfy
the requirements of Title XI of FIRREA and the regulations promulgated
thereunder with respect to appraisals (as in effect on the date the appraisal
was made).
Rating Agencies: S&P and Moody's, each a "Rating Agency."
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
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Residential Dwelling: Any one of the following: (i) a detached one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family
dwelling unit in a condominium project which meets the eligibility requirements
of the Originator's Underwriting Guidelines, or (iv) a detached one-family
dwelling in a planned unit development, none of which is a cooperative, mobile
or manufactured home.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., or
its successors in interest.
Securities Act: The Securities Act of 1933, as amended.
Tax Service Contract: A transferable contract maintained for the Mortgaged
Property with a tax service provider for the purpose of obtaining current
information from local taxing authorities relating to such Mortgaged Property.
Section 2. Purchase and Sale of the Mortgage Loans and Related Rights.
(a) Upon satisfaction of the conditions set forth in Section 10
hereof, the Seller agrees to sell, and the Purchaser agrees to purchase Mortgage
Loans having an aggregate Cut-off Date Balance of $205,989,567.
(b) The closing for the purchase and sale of the Mortgage Loans and
the closing for the issuance of the Certificates will take place on the Closing
Date at the office of the Purchaser's counsel in New York, New York or such
other place as the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in Section 10
hereof, on the Closing Date, in consideration of the purchase of the Mortgage
Loans, the Purchaser shall (i) pay to the Seller an amount equal to the net sale
proceeds of the Certificates plus accrued interest in immediately available
funds by wire transfer to such account or accounts as shall be designated by the
Seller.
Section 3. Mortgage Loan Schedule.
The Seller agrees to provide to the Purchaser as of the Closing Date a
listing of the Mortgage Loans (the "Mortgage Loan Schedule") setting forth the
information listed on Exhibit 1 to this Agreement with respect to each of the
Mortgage Loans being sold by the Seller. The Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to this
Agreement on the Closing Date by the parties hereto and shall be in form and
substance mutually agreed to by the Seller and the Purchaser.
Section 4. Mortgage Loan Transfer.
The Purchaser will be entitled to all scheduled payments of principal and
interest on the Mortgage Loans due after the Cut-off Date (regardless of when
actually collected) and all payments thereof other than scheduled principal and
interest received after the Cut-off Date. The Seller will be entitled to all
scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off Date (including payments collected after the Cut-off Date)
and all payments thereof other than scheduled principal and interest on the
Mortgage Loans received on
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or before the Cut-off Date. Such principal amounts and any interest thereon
belonging to the Seller as described above will not be included in the aggregate
outstanding principal balance of the Mortgage Loans as of the Cut-off Date as
set forth on the Mortgage Loan Schedule.
Pursuant to the Pooling and Servicing Agreement, the Purchaser will assign
on the Closing Date all of its right, title and interest in and to the Mortgage
Loans to the Trustee for the benefit of the Certificateholders. In connection
with the transfer and assignment of the Mortgage Loans, the Seller has delivered
or will deliver or cause to be delivered to the Trustee by the Closing Date the
following documents or instruments with respect to each Mortgage Loan (the
"Mortgage Loan Documents":
(A) The original Mortgage Note endorsed in blank or, "Pay to the order of
LaSalle Bank National Association, as trustee for the First Franklin Mortgage
Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-FF2, without
recourse" together with all riders thereto. The Mortgage Note shall include all
intervening endorsements showing a complete chain of the title from the
originator of the Mortgage Loan to [____________________].
(B) Except as provided below and for each Mortgage Loan that is not a MERS
Loan, the original recorded Mortgage together with all riders thereto, with
evidence of recording thereon, or, if the original Mortgage has not yet been
returned from the recording office, a copy of the original Mortgage together
with all riders thereto certified to be a true copy of the original of the
Mortgage that has been delivered for recording in the appropriate recording
office of the jurisdiction in which the Mortgaged Property is located and in the
case of each MERS Loan, the original Mortgage together with all riders thereto,
noting the presence of the MIN of the Loan and either language indicating that
the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a MOM Loan at
origination, the original Mortgage and the assignment thereof to MERS, with
evidence of recording indicated thereon, or a copy of the Mortgage certified by
the public recording office in which such Mortgage has been recorded.
(C) In the case of each Mortgage Loan that is not a MERS Loan, the original
Assignment of each Mortgage in blank or, to "LaSalle Bank National Association,
as trustee for the First Franklin Mortgage Loan Trust, Mortgage Loan
Asset-Backed Certificates, Series 2007-FF2."
(D) The original or a certified copy of the policy of title insurance (or a
preliminary title report, commitment or binder if the original title insurance
policy has not been received from the title insurance company).
(E) Originals of any intervening assignments of the Mortgage, with evidence
of recording thereon (if necessary to show the complete chain of title from the
originator of the Mortgage Loan to the mortgagee of record as of the Closing
Date) or, if the original intervening assignment has not yet been returned from
the recording office, a copy of such assignment certified to be a true copy of
the original of the assignment which has been sent for recording in the
appropriate jurisdiction in which the Mortgaged Property is located.
(F) Originals of all assumption and modification agreements, if any.
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(G) If in connection with any Mortgage Loan, the Purchaser cannot deliver
the Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording thereon, if
applicable, concurrently with the execution and delivery of this Agreement
solely because of a delay caused by the public recording office where such
Mortgage, Assignments of Mortgage or assumption, consolidation or modification,
as the case may be, has been delivered for recordation, the Purchaser shall
deliver or cause to be delivered to the Trustee written notice stating that such
Mortgage or assumption, consolidation or modification, as the case may be, has
been delivered to the appropriate public recording office for recordation.
Thereafter, the Purchaser shall deliver or cause to be delivered to the Trustee
such Mortgage, Assignments of Mortgage or assumption, consolidation or
modification, as the case may be, with evidence of recording indicated thereon,
if applicable, upon receipt thereof from the public recording office. To the
extent any required endorsement is not contained on a Mortgage Note or an
Assignment of Mortgage, the Purchaser shall make or cause to be made such
endorsement.
The Seller and the Purchaser acknowledge hereunder that all of the Mortgage
Loans and the related servicing will ultimately be assigned to LaSalle Bank,
National Association, as Trustee for the Certificateholders, on the date hereof.
Section 5. Examination of Mortgage Files.
(a) On or before the Closing Date, the Seller will have made the
Mortgage Files available to the Purchaser or its agent for examination which may
be at the offices of the Trustee or the Seller. The fact that the Purchaser or
its agent has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the Purchaser's rights to
demand cure, repurchase, substitution or other relief as provided in this
Agreement. In furtherance of the foregoing, the Seller shall make the Mortgage
Files available to the Purchaser or its agent from time to time so as to permit
the Purchaser to confirm the Seller's compliance with the delivery and
recordation requirements of this Agreement and the Pooling and Servicing
Agreement. In addition, upon request of the Purchaser, the Seller agrees to
provide to the Purchaser, Xxxxxxx Xxxxx and to any investors or prospective
investors in the Certificates information regarding the Mortgage Loans and their
servicing, to make the Mortgage Files available to the Purchaser, Xxxxxxx Xxxxx
and to such investors or prospective investors (which may be at the offices of
the Seller and/or the Seller's custodian) and to make available personnel
knowledgeable about the Mortgage Loans for discussions with the Purchaser,
Xxxxxxx Xxxxx and such investors or prospective investors, upon reasonable
request during regular business hours, sufficient to permit the Purchaser,
Xxxxxxx Xxxxx and such investors or potential investors to conduct such due
diligence as any such party reasonably believes is appropriate.
(b) Except as set forth in the exception report delivered
contemporaneously herewith (the "Exception Report"), the Trustee acknowledges
receipt of the Mortgage Note for each Mortgage Loan and delivery of a Mortgage
File (but does not acknowledge receipt of all documents required to be included
in such Mortgage File) with respect to each Mortgage Loan and declares that it
holds and will hold such documents and any other documents constituting a part
of the Mortgage Files delivered to it in trust for the use and benefit of all
present and future Certificateholders. The Purchaser will cause the Seller to
repurchase any Mortgage Loan to
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which a material exception was taken in the Exception Report unless such
exception is cured to the satisfaction of the Purchaser and the Trustee within
45 Business Days of the Closing Date.
(c) The Trustee agrees, for the benefit of the Purchaser and the
Certificateholders to review each Mortgage File delivered to it within sixty
(60) days after the Closing Date. The Trustee will ascertain and to certify,
within seventy (70) days of the Closing Date, to the Purchaser and the Servicer
that all documents required by Section 4 (A)-(B), (C) (if applicable), and
(D)-(E), and the documents if actually received by it, under Section 4 (F), have
been executed and received, and that such documents relate to the Mortgage Loans
that have been conveyed to it. It is herein acknowledged that, in conducting
such review, the Trustee shall not be under any duty or obligation to inspect,
review or examine any such documents, instruments, certificates or other papers
to determine that they are genuine, enforceable or appropriate for the
represented purpose, that they have actually been recorded or that they are
other than what they purport to be on their face. If the Trustee finds any
document or documents constituting a part of a Mortgage File to be missing or
defective (that is, mutilated, damaged, defaced or unexecuted) in any material
respect, the Trustee shall promptly (and in any event within no more than five
Business Days) after such finding so notify the Servicer, the Seller and the
Purchaser. In addition, the Trustee shall also notify the Servicer, the Seller
and the Purchaser if the original Mortgage with evidence of recording thereon
with respect to a Mortgage Loan is not received within seventy (70) days of the
Closing Date; if it has not been received because of a delay caused by the
public recording office where such Mortgage has been delivered for recordation,
the Purchaser shall deliver or cause to be delivered to the Trustee written
notice stating that such Mortgage has been delivered to the appropriate public
recording office for recordation and thereafter the Purchaser shall deliver or
cause to be delivered such Mortgage with evidence of recording thereon upon
receipt thereof from the public recording office. The Trustee shall request that
the Seller correct or cure such omission, defect or other irregularity, or
substitute a Mortgage Loan pursuant to the provisions of Section 5(c), within
ninety (90) days from the date the Seller was notified of such omission or
defect and, if the Seller does not correct or cure such omission or defect
within such period, that the Seller purchase such Mortgage Loan from the Issuing
Entity within ninety (90) days from the date the Trustee notified the Seller of
such omission, defect or other irregularity at the Purchase Price of such
Mortgage Loan.
The Purchase Price for any Mortgage Loan purchased pursuant to this Section
5(c) shall be paid to the Servicer and deposited by the Servicer in the
Collection Account promptly upon receipt, and upon receipt by the Trustee of
written notification of such deposit signed by a Servicing Officer or receipt of
such deposit by the Trustee, the Trustee, upon receipt of a Request for Release
and certification of the Servicer of such required deposit, shall promptly
release to the Seller the related Mortgage File and the Trustee shall execute
and deliver such instruments of transfer or assignment, without recourse, as
shall be requested by the Seller and necessary to vest in the Seller or its
designee, as the case may be, any Mortgage Loan released pursuant hereto, and
the Trustee shall have no further responsibility with regard to such Mortgage
Loan. It is understood and agreed that the obligation of the Seller to purchase,
cure or substitute any Mortgage Loan as to which a material defect in or
omission of a constituent document exists shall constitute the sole remedy
respecting such defect or omission available to the Purchaser and the Trustee on
behalf of Certificateholders.
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The Trustee shall be under no duty or obligation to inspect, review and
examine such documents, instruments, certificates or other papers to determine
that they are genuine, enforceable, recordable, duly authorized, sufficient,
legal, valid or appropriate to the represented purpose, or that they have
actually been recorded, or that they are other than what they purport to be on
their face. The Trustee shall keep confidential the name of each Mortgagor
except as required for the performance of this Agreement and the Trustee shall
not solicit any such Mortgagor for the purpose of refinancing the related
Mortgage Loan; notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, or information obtained by the Trustee from
sources other than the other parties hereto, (ii) disclosure of any and all
information (A) if required to do so by any applicable law, rule or regulation,
(B) to any government agency or regulatory body having or claiming authority to
regulate or oversee any aspects of the business of the Trustee or that of any
Affiliate, (C) pursuant to any subpoena, civil investigation demand or similar
demand or request of any court, regulatory authority, arbitrator or arbitration
to which the Trustee or any Affiliate or an officer, director, employer or
shareholder thereof is a party or (D) to any Affiliate, independent or internal
auditor, agent, employee or attorney of the Trustee having a need to know the
same, provided that the Trustee advises such recipient of the confidential
nature of the information being disclosed, or (iii) any other disclosure
authorized by the Purchaser.
Within seventy (70) days of the Closing Date, the Trustee shall deliver to
the Purchaser and the Servicer the Trustee's Certification, substantially in the
form of Exhibit D to the Pooling and Servicing Agreement, evidencing the
completeness of the Mortgage Files, with any exceptions noted thereto.
Section 6. Sale Treatment.
(a) [Reserved.]
(b) It is the express intent of the parties hereto that the conveyance
of the Mortgage Loans by the Seller to the Purchaser, as contemplated by this
Agreement be, and be treated as, a sale. It is, further, not the intention of
the parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Seller to the Purchaser to secure a debt or other obligation of the Seller.
However, in the event that, notwithstanding the intent of the parties, the
Mortgage Loans are held by a court of competent jurisdiction to continue to be
property of the Seller, then (i) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the applicable
Uniform Commercial Code; (ii) the transfer of the Mortgage Loans provided for
herein shall be deemed to be a grant by the Seller to the Purchaser of a
security interest in all of the Seller's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, to the extent the Purchaser would otherwise be entitled to own such
Mortgage Loans and proceeds pursuant to Section 4 hereof, including all amounts,
other than investment earnings, from time to time held or invested in any
accounts created pursuant to the Pooling and Servicing Agreement, whether in the
form of cash, instruments, securities or other property; (iii) the possession by
the Purchaser or the Trustee of Mortgage Notes and such other items of property
as constitute instruments, money, negotiable documents
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or chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 (or
comparable provision) of the applicable Uniform Commercial Code; and (iv)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Purchaser pursuant to any provision hereof or
pursuant to the Pooling and Servicing Agreement shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
reasonably necessary to ensure that, if this Agreement were deemed to create a
security interest in the Mortgage Loans, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Pooling and Servicing
Agreement.
Section 7. Representations and Warranties of Seller Concerning the Mortgage
Loans.
The Seller hereby represents and warrants to the Purchaser as of the
Closing Date or such other date as may be specified below with respect to each
Mortgage Loan being sold by it:
(a) The information set forth with respect to the Mortgage Loans on
the Mortgage Loan Schedule provides an accurate listing of the Mortgage Loans,
and the information with respect to each Mortgage Loan on the Mortgage Loan
Schedule is true and correct in all material respects at the date or dates
respecting which such information is given;
(b) [Reserved].
(c) All payments required to be made up to the close of business on
the Closing Date for such Mortgage Loan under the terms of the Mortgage Note
have been made; the Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
related Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Mortgage Note or Mortgage; and there has been no
delinquency, exclusive of any period of grace, in any payment by the Mortgagor
thereunder during the last twelve months;
(d) There are no delinquent taxes, ground rents, water charges, sewer
rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding charges
affecting the related Mortgaged Property;
(e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to the
custodian; the substance of any such waiver, alteration or modification has been
approved by the insurer under the primary insurance policy, if any, and the
title insurer, to the extent required by the related policy, and is reflected on
the related Mortgage Loan Schedule. No instrument of waiver, alteration or
modification has been executed, and no Mortgagor has been released, in whole or
in part, except in connection with an
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assumption agreement approved by the insurer under the primary insurance policy,
if any, the title insurer, to the extent required by the policy, and which
assumption agreement has been delivered to the custodian and the terms of which
are reflected in the related Mortgage Loan Schedule;
(f) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(g) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer in accordance with Originator's Underwriting
Guidelines against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located.
All such insurance policies contain a standard mortgagee clause naming the
Originator, its successors and assigns as mortgagee and all premiums thereon
have been paid. If the Mortgaged Property is in an area identified on a Flood
Hazard Map or Flood Insurance Rate Map issued by the Federal Emergency
Management Agency 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 which
policy conforms to the Originator's Underwriting Guidelines. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at Mortgagor's
cost and expense and to seek reimbursement therefor from the Mortgagor;
(h) Any and all requirements of any federal, state or local law
including, without limitation, applicable laws governing prepayment penalties,
usury, truth in lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, fair housing, disclosure laws and all
applicable predatory and abusive lending laws applicable to the origination and
servicing of mortgage loans of a type similar to the Mortgage Loans have been
complied with and the consummation of the transactions contemplated hereby will
not involve the violation of any such laws;
(i) The Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, cancellation, subordination,
rescission or release;
(j) The related Mortgage is properly recorded and is a valid, existing
and enforceable first lien and first priority security interest on the Mortgaged
Property, including all improvements on the Mortgaged Property subject only to
(a) the lien of current real property taxes and assessments not yet due and
payable, (b) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording being
acceptable to mortgage lending institutions generally and specifically referred
to in the lender's title insurance policy delivered to the Originator of the
Mortgage Loan and which do not
-11-
adversely affect the Appraised Value of the Mortgaged Property and (c) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property. Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, existing and enforceable first lien and first priority security
interest on the property described therein and the Seller has full right to sell
and assign the same to the Purchaser. The Mortgaged Property was not, as of the
date of origination of the Mortgage Loan, subject to a mortgage, deed of trust,
deed to secure debt or other security instrument creating a lien subordinate to
the lien of the Mortgage;
(k) The Mortgage Note and the related Mortgage are genuine and each is
the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms subject to bankruptcy laws and similar laws of general
application affecting creditors' rights and subject to the application of the
rules of equity, including those respecting the availability of specific
performance;
(l) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties. The Mortgagor is a natural person, the
identity of such natural person was fully verified by the Seller and such
Mortgagor is not in violation of any laws regarding identity theft;
(m) The proceeds of the Mortgage Loan have been fully disbursed to or
for the account of the Mortgagor and there is no obligation for the Mortgagee to
advance additional funds thereunder and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(n) The Seller is the sole legal, beneficial and equitable owner of
the Mortgage Note and the Mortgage. The Seller has full right and authority
under all governmental and regulatory bodies having jurisdiction over such
Seller, subject to no interest or participation of, or agreement with, any
party, to transfer and sell the Mortgage Loan to the Purchaser pursuant to this
Agreement free and clear of any encumbrance or right of others, equity, lien,
pledge, charge, mortgage, claim, participation interest or security interest of
any nature (collectively, a "Lien"); and immediately upon the transfers and
assignments herein contemplated, the Seller shall have transferred and sold all
of its right, title and interest in and to each Mortgage Loan and the Purchaser
will hold good, marketable and indefeasible title to, and be the owner of, each
Mortgage Loan subject to no Lien;
(o) All Persons which have had any interest in the Mortgage Loan,
whether as originator, mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were): (A)
organized under the laws of such state, or (B) qualified to do business in such
state, or (C) federal savings and loan associations or national banks having
principal offices in such state, or (D) not doing business in such state so as
to
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require qualification or licensing, or (E) not otherwise required to be licensed
in such state. All parties which have had any interest in the Mortgage Loan were
in compliance with any and all applicable "doing business" and licensing
requirements of the laws of the state wherein the Mortgaged Property is located
or were not required to be licensed in such state;
(p) The Mortgage Loan is covered by an ALTA lender's title insurance
policy (which, in the case of an Adjustable Rate Mortgage Loan has an adjustable
rate mortgage endorsement in the form of ALTA 6.0 or 6.1) acceptable to FNMA and
FHLMC, issued by a title insurer acceptable to FNMA and FHLMC and qualified to
do business in the jurisdiction where the Mortgaged Property is located,
insuring (subject to the exceptions contained above in (x)(a) and (b)) the
Seller, its successors and assigns as to the first priority lien of the Mortgage
in the original principal amount of the Mortgage Loan and, with respect to any
Adjustable Rate Mortgage Loan, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment in the Mortgage Rate and Monthly Payment. Additionally,
such lender's title insurance policy affirmatively insures ingress and egress to
and from the Mortgaged Property, and against encroachments by or upon the
Mortgaged Property or any interest therein. The Seller is the sole insured of
such lender's title insurance policy, and such lender's title insurance policy
is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy;
(q) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration, and the
Seller has not waived any default, breach, violation or event of acceleration;
(r) There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such lien) affecting the related Mortgaged Property which are
or may be liens prior to, or equal or coordinate with, the lien of the related
Mortgage;
(s) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;
(t) At the time the Mortgage Loan was originated, the originator was a
(i) mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act or a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a Federal or State authority, or
(ii) a mortgage banker or broker licensed or authorized to do business in the
jurisdiction in which the related Mortgaged Property is located, applying the
same standards and procedures used by the Seller in originating Mortgage Loans
directly. The Seller
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determined that the Mortgage Loans were originated in compliance with such
standards prior to purchasing the Mortgage Loans;
(u) Principal payments on the Mortgage Loan shall commence (with
respect to any newly originated Mortgage Loans) or commenced no more than sixty
(60) days after the proceeds of the Mortgage Loan were disbursed. The Mortgage
Loan bears interest at the Mortgage Rate. With respect to each Mortgage Loan,
the Mortgage Note is payable on the first day of each month in Monthly Payments,
which, (A) in the case of a Fixed Rate Mortgage Loan, are sufficient to fully
amortize the original principal balance over the original term thereof and to
pay interest at the related Mortgage Rate, (B) in the case of an Adjustable Rate
Mortgage Loan, are changed on each Adjustment Date, and in any case, are
sufficient to fully amortize the original principal balance over the original
term thereof and to pay interest at the related Mortgage Rate and (C) in the
case of a Balloon Loan, are based on a twenty (20) or thirty (30) year
amortization schedule, as set forth in the related Mortgage Note, and a final
monthly payment substantially greater than the preceding monthly payment which
is sufficient to amortize the remaining principal balance of the Balloon Loan
and to pay interest at the related Mortgage Rate. The Index for each Adjustable
Rate Mortgage Loan is as defined in the related Mortgage Loan Schedule. The
Mortgage Note does not permit negative amortization. No Mortgage Loan is a
Convertible Mortgage Loan;
(v) The origination and collection practices used by the Seller with
respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing
industry. The Mortgage Loan has been serviced by the Seller and any predecessor
servicer in accordance with the terms of the Mortgage Note. With respect to any
Mortgage Loan which provides for an adjustable interest rate, all rate
adjustments have been performed in accordance with the terms of the related
Mortgage Note or subsequent modifications, if any. With respect to escrow
deposits and Escrow Payments, if any, all such payments are in the possession
of, or under the control of, the Seller and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. No escrow deposits or Escrow Payments or other charges or
payments due the Seller have been capitalized under any Mortgage or the related
Mortgage Note and no such escrow deposits or Escrow Payments are being held by
the Seller for any work on a Mortgaged Property which has not been completed;
(w) The Mortgaged Property is free of damage and waste and there is no
proceeding pending or threatened for the total or partial condemnation thereof
nor is such a proceeding currently occurring;
(x) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure. The Mortgaged Property has not been subject to any
bankruptcy proceeding (or with respect to each Mortgage Loan for which the
proceeds were used to pay off a bankruptcy of the Mortgagor, the related
Mortgaged Property is not subject to any bankruptcy proceeding) or foreclosure
proceeding, nor are any such proceedings pending and the Mortgagor has not filed
for protection under applicable bankruptcy laws. There is no
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homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage. The Mortgagor has not notified the Seller and the
Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Soldiers and Sailors Civil Relief Act of 1940;
(y) The Mortgage Loan was underwritten in accordance with the
underwriting standards of the Seller in effect at the time the Mortgage Loan was
originated; and the Mortgage Note and Mortgage are on forms acceptable to FNMA
or FHLMC;
(z) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (j) above;
(aa) The Mortgage File contains an appraisal of the related Mortgaged
Property which satisfied the standards of FNMA and FHLMC and was made and
signed, prior to the approval of the Mortgage Loan application, by a qualified
appraiser, duly appointed by the Seller, who had no interest, direct or indirect
in the Mortgaged Property or in any loan made on the security thereof, whose
compensation is not affected by the approval or disapproval of the Mortgage Loan
and who met the minimum qualifications of FNMA and FHLMC (or contains an
automated (statistical) appraisal in conjunction with FNMA Form 2055 or FNMA
Form 2075 appraisals pursuant to the Seller's underwriting guidelines in the
case of Mortgage Loans in the Express Valuing Program of the Seller). Each
appraisal of the Mortgage Loan was made in accordance with the relevant
provisions of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989;
(bb) In the event the Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor;
(cc) No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature (with
the exception of the Seller's Dividend Loan Program);
(dd) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of fixed rate mortgage loans in the
case of Fixed Rate Mortgage Loans, and adjustable rate mortgage loans in the
case of Adjustable Rate Mortgage Loans and rescission materials with respect to
Refinanced Mortgage Loans;
(ee) No Mortgage Loan was made in connection with (a) the construction
or rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or
exchange of a Mortgaged Property;
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(ff) The Seller has no knowledge of any circumstances or condition
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause the
Mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to
become delinquent, or adversely affect the value of the Mortgage Loan;
(gg) If a mortgage loan has primary mortgage loan insurance, each such
primary mortgage insurance policy is issued by a Qualified Insurer, which
insures that portion of the Mortgage Loan in excess of the portion of the
Appraised Value of the Mortgaged Property required by FNMA. All provisions of
such primary insurance policy have been and are being complied with, such policy
is in full force and effect, and all premiums due thereunder have been paid. Any
Mortgage subject to any such primary insurance policy obligates the Mortgagor
thereunder to maintain such insurance and to pay all premiums and charges in
connection therewith. The Mortgage Rate for the Mortgage Loan does not include
any such insurance premium;
(hh) The Mortgaged Property is lawfully occupied under applicable law;
all inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. No improvement located on or being part of any
Mortgaged Property is in violation of any applicable zoning law or regulation.
To the best of the Seller's knowledge and with respect to each Mortgage Loan
that is covered by a primary insurance policy, the improvement(s) located on or
being part of the related Mortgaged Property were constructed in accordance with
the specifications set forth in the original construction plans;
(ii) No error, omission of material fact, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any person, including without limitation the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan. If a mortgage insurer fails to pay a claim
submitted with respect to the related Mortgage Loan as a result of the mortgage
insurer successfully asserting a defense based on fraud, then such failure to
pay shall (i) constitute a breach of this representation which materially and
adversely affects the interests of the owner of the Mortgage Loan and (ii) allow
the Purchaser to enforce the remedies set forth in this Section 7;
(jj) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been recorded, or are in the process of being recorded, in the
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(kk) Any principal advances made to the Mortgagor prior to the Cut-off
Date have been consolidated with the outstanding principal amount secured by the
Mortgage, and the
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secured principal amount, as consolidated, bears a single interest rate and
single repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority with respect
to each Mortgage Loan by a title insurance policy, an endorsement to the policy
insuring the mortgagee's consolidated interest or by other title evidence
acceptable to FNMA and FHLMC. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(ll) If the Residential Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets the eligibility requirements of the Seller. With respect to
Mortgage Loans that are secured by a leasehold estate, (A) the lease is valid,
in full force and effect, and conforms to all of FNMA's requirements for
leasehold estates; (B) all rents and other payments due under the lease have
been paid; (C) the lessee is not in default under any provision of the lease;
(D) the term of the lease exceeds the maturity date of the related Mortgage Loan
by at least five (5) years; and (E) the terms of the lease provide a Mortgagee
with an opportunity to cure any defaults;
(mm) Each Mortgage Loan originated in the state of Texas pursuant to
Article XVI, Section 50(a)(6) of the Texas Constitution (a "Texas Refinance
Loan") has been originated in compliance with the provisions of Article XVI,
Section 50(a)(6) of the Texas Constitution, Texas Civil Statutes and the Texas
Finance Code. With respect to each Texas Refinance Loan that is a Cash-Out
Refinancing, the related Mortgage Loan Documents state that the Mortgagor may
prepay such Texas Refinance Loan in whole or in part without incurring a
Prepayment Charge. The Seller does not collect any such Prepayment Charges in
connection with any such Texas Refinance Loan;
(nn) The source of the down payment with respect to each Mortgage Loan
has been fully verified by the Seller;
(oo) Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(pp) The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards including,
without limitation, asbestos, and neither the Seller nor, to the Seller's
knowledge, the related Mortgagor, has received any notice of any violation or
potential violation of such law;
(qq) The Seller shall, at its own expense, cause each Mortgage Loan to
be covered by a "life of loan" Tax Service Contract which is assignable to the
Purchaser or its designee at no cost to the Purchaser or its designee; provided
however, that if the Seller fails to purchase such Tax Service Contract, the
Seller shall be required to reimburse the Purchaser for all costs and expenses
incurred by the Purchaser in connection with the purchase of any such Tax
Service Contract;
(rr) Each Mortgage Loan is covered by a "life of loan" Flood Zone
Service Contract which is assignable to the Purchaser or its
designee at no cost to the Purchaser or its
-17-
designee or, for each Mortgage Loan not covered by such Flood Zone Service
Contract, the Seller agrees to purchase such Flood Zone Service Contract;
(ss) None of the Adjustable Rate Mortgage Loans include an option to
convert to a Fixed Rate Mortgage Loan;
(tt) No selection procedures were used by the Seller that identified
the Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans being offered for sale by the Seller;
(uu) Each Mortgage Loan is a "qualified mortgage" within the meaning
of Section 860G of the Code (as determined without regard to Treas. Reg. Section
1.860G-2(a)(3) or any similar rule that treats a defective obligation as a
qualified mortgage for a temporary period). Any breach of this representation
shall be deemed to materially and adversely affect the value of the Mortgage
Loan and shall require a repurchase of the affected Mortgage Loans;
(vv) No Mortgage Loan shall (a) be subject to Section 226.32 of
Regulation Z or any similar state or local law (relating to high interest rate
credit/lending transactions), (b) include any single premium credit life or
accident and health insurance or disability insurance, or (c) contain any term
or condition, or involves any loan origination practice, that has been defined
as "predatory," "covered," or "threshold" under applicable federal, state or
local law, or which has been expressly categorized as an "unfair" or "deceptive"
term, condition, or practice in any applicable federal, state or local law
dealing with "predatory" or "high cost" mortgage lending;
(ww) The Mortgage Loan Documents with respect to each Mortgage Loan
subject to Prepayment Charges specifically authorizes such Prepayment Charges to
be collected and such Prepayment Charges are permissible and enforceable in
accordance with the terms of the related Mortgage Loan Documents and applicable
law;
(xx) No Mortgage Loan had an LTV or a CLTV in excess of 100% at
origination;
(yy) No Mortgage Loan made on or after October 1, 2002 or prior to
March 7, 2003 is subject to the Georgia Fair Lending Act (OGCA Sections 7 6A 1,
et. seq.), as such Act may be amended from time to time, or is subject to any
similar law that would subject the Purchaser to "assignee" or "originator"
liability similar to that described in the Georgia Fair Lending Act;
(zz) No Mortgage Loan had an original term to maturity of more than
thirty (30) years;
(aaa) Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Mortgage Loan in the
event the related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;
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(bbb) Each Mortgage Note is comprised of one original promissory note
and each such promissory note constitutes an "instrument" for purposes of
section 9-102(a)(65) of the UCC;
(ccc) No predatory or deceptive lending practices, as defined by
applicable federal, state or local law applicable to the Seller, including but
not limited to, the extension of credit to the mortgagor without regard for the
mortgagor's ability to repay the Mortgage Loan and the extension of credit to
the mortgagor which has no apparent benefit to the mortgagor, were employed by
the originator of the Mortgage Loan in connection with the origination of the
Mortgage Loan. No mortgagor was required to purchase single premium credit life
insurance, disability insurance or similar insurance in connection with the
origination of the Mortgage Loan;
(ddd) The Seller and its agents have at all times complied with all
applicable federal, state and local anti-money laundering laws, orders and
regulations, including without limitation the USA PATRIOT Act of 2001
(collectively, the "Anti-Money Laundering Laws"), in respect of the origination
and servicing of each Mortgage Loan; the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination and
servicing of each Mortgage Loan for purposes of the Anti-Money Laundering Laws,
including with respect to the legitimacy of the applicable Mortgagor and the
origin of the assets used by the said Mortgagor to purchase the property in
question, and maintains, and will maintain, sufficient information to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering Laws; no
Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the
"Executive Order") or the regulations promulgated by the Office of Foreign
Assets Control of the United States Department of the Treasury ("OFAC
Regulations") or in violation of the Executive Order or the OFAC Regulations,
and no Mortgagor is subject to the provisions of such Executive Order or the
OFAC Regulations nor listed as a "blocked person" for purposes of the OFAC
Regulations;
(eee) Each Mortgage Loan is in compliance with the anti-predatory
lending eligibility for purchase requirements of FNMA's Selling Guide (this
representation and warranty shall be construed only to mean that none of the
representations and warranties specified in clauses (fff) through (ooo) and
(sss) below have been breached);
(fff) No Mortgagor was encouraged or required to select a Mortgage
Loan product offered by the Mortgage Loan's originator which is a higher cost
product designed for less creditworthy borrowers, unless at the time of the
Mortgage Loan's origination, such Mortgagor did not qualify taking into account
credit history and debt-to-income ratios for a lower-cost credit product then
offered by the Mortgage Loan's originator or any affiliate of the Mortgage
Loan's originator. If, at the time of loan application, the Mortgagor may have
qualified for a lower-cost credit product then offered by any mortgage lending
affiliate of the Mortgage Loan's originator, the Mortgage Loan's originator
referred the Mortgagor's application to such affiliate for underwriting
consideration;
(ggg) The methodology used in underwriting the extension of credit for
each Mortgage Loan employs objective mathematical principles which relate the
Mortgagor's
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income, assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the Mortgagor's equity in the
collateral as the principal determining factor in approving such credit
extension (other than No Documentation Mortgage Loans). Such underwriting
methodology confirmed that at the time of origination (application/approval) the
Mortgagor had a reasonable ability to make timely payments on the Mortgage Loan;
(hhh) With respect to any Mortgage Loan that contains a provision
permitting imposition of a Prepayment Charge prior to maturity: (i) prior to the
Mortgage Loan's origination, the Mortgagor agreed to such Prepayment Charge in
exchange for a monetary benefit, including but not limited to a rate or fee
reduction, (ii) prior to the Mortgage Loan's origination, the Mortgagor was
offered the option of obtaining a mortgage loan that did not require payment of
such a Prepayment Charge, (iii) the Prepayment Charge is disclosed to the
Mortgagor in the loan documents pursuant to applicable state and federal law,
and (iv) for loans originated on or after September 1, 2004, the duration of the
prepayment period shall not exceed three (3) years from the date of the note,
unless the Mortgage Loan was modified to reduce the prepayment period to no more
than three years from the date of the note and the Mortgagor was notified in
writing of such reduction in prepayment period;
(iii) No Mortgage Loan is a Balloon Loan that has an original stated
maturity of less than seven (7) years. No Mortgagor was required to purchase any
single premium credit insurance policy (e.g., life, mortgage, disability,
accident, unemployment, or health insurance product) or debt cancellation
agreement as a condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid single-premium credit insurance policy (e.g., life, mortgage,
disability, accident, unemployment or health insurance) in connection with the
origination of the Mortgage Loan. No proceeds from any Mortgage Loan were used
to purchase single premium credit insurance policies or debt cancellation
agreements as part of the origination of, or as a condition to closing, such
Mortgage Loan;
(jjj) All points and fees related to each Mortgage Loan were disclosed
in writing to the Mortgagor in accordance with applicable state and federal law
and regulation. All points related to each Mortgage Loan are listed on the
Mortgage Loan Schedule and are complete, true and correct.
(kkk) All fees and charges (including finance charges) and whether or
not financed, assessed, collected or to be collected in connection with the
origination and servicing of each Mortgage Loan has been disclosed in writing to
the Mortgagor in accordance with applicable state and federal law and
regulation;
(lll) The Seller will transmit full-file credit reporting data for
each Mortgage Loan and that for each Mortgage Loan, Servicer agrees it shall
report one of the following statuses each month as follows: new origination,
current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off. In
the case of correspondent originated loans, the reporting cycle will not
commence until sixty (60) days from the transfer of servicing from the
correspondent originator;
(mmm) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 ("HOEPA"), no Mortgage Loan is subject to the
requirements of
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HOEPA and no Mortgage Loan is in violation of any applicable comparable state or
local law. Any breach of this representation shall be deemed to materially and
adversely affect the interests of the owner of the Mortgage Loan and shall
require a repurchase of the affected Mortgage Loans;
(nnn) No Mortgage Loan was originated on or after October 1, 2002 and
prior to March 7, 2003, which is secured by property located in the State of
Georgia. No Mortgage Loan was originated on or after March 7, 2003 which is a
"high cost home loan" as defined under the Georgia Fair Lending Act. Any breach
of this representation shall be deemed to materially and adversely affect the
interests of the owner of the Mortgage Loan and shall require a repurchase of
the affected Mortgage Loan;
(ooo) No Mortgage Loan (a) is secured by property located in the State
of New York, (b) had an original principal balance of $300,000 or less, and (c)
has an application date on or after April 1, 2003, the terms of which Mortgage
Loan equal or exceed either the APR or points and fees threshold for "high-cost
home loans," as defined in Section 6-L of the New York State Banking Law. Any
breach of this representation shall be deemed to materially and adversely affect
the interests of the owner of the Mortgage Loan and shall require a repurchase
of the affected Mortgage Loans;
(ppp) No Mortgagor obtained a prepaid single-premium credit-life,
credit disability, credit unemployment or credit property insurance policy in
connection with the origination of the Mortgage Loan. Any breach of this
representation shall be deemed to materially and adversely affect the value of
the Mortgage Loan and shall require a repurchase of the affected Mortgage Loans;
(qqq) No Mortgage Loan originated prior to October 1, 2004 has a
Prepayment Charge longer than five years after its origination; and no Mortgage
Loan originated on or after October 1, 2004 has a Prepayment Charge longer than
three years after its origination. Any breach of this representation shall be
deemed to materially and adversely affect the interests of the owner of the
Mortgage Loan and shall require a repurchase of the affected Mortgage Loans;
(rrr) The Seller and any predecessor servicer has fully furnished and
will fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable and
unfavorable) on its Mortgagor credit files to Equifax, Experian and Trans Union
Credit Information Company, on a monthly basis. Any breach of this
representation shall be deemed to materially and adversely affect the interests
of the owner of the Mortgage Loan and shall require a repurchase of the affected
Mortgage Loans;
(sss) Each Mortgage Loan at the time it was made complied in all
material respects with applicable local, state and federal laws, including, but
not limited to, all applicable predatory or abusive lending laws;
(ttt) The information set forth in the Prepayment Charge schedule is
complete, true and correct in all material respects on the date or dates when
such information is furnished
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and each Prepayment Charge is permissible and enforceable in accordance with its
terms under applicable law;
(uuu) No Mortgaged Property related to a Mortgage Loan has less than
700 square feet (or 650 square feet with respect to condominiums) if the
loan-to-value ratio is greater than 90%;
(vvv) No Mortgaged Property related to a Mortgage Loan was listed for
sale at the time of origination. No Mortgaged Property related to a Mortgage
Loan was listed for sale as of the Cut-off Date;
(www) No Mortgage Loan is classified as a high cost mortgage loan
under HOEPA, and no Mortgage Loan is a "high cost home," "covered" (excluding
home loans defined as "covered home loans" pursuant to clause (1) of the
definition of that term in the New Jersey Home Ownership Security Act of 2002
that were originated between November 26, 2003 and July 7, 2004), "high risk
home" or "predatory" loan under any applicable state, federal or local law (or a
similarly classified loan using different terminology under an applicable law
imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees). Any
breach of this representation shall be deemed to materially and adversely affect
the interests of the owner of the Mortgage Loan and shall require a repurchase
of the affected Mortgage Loan;
(xxx) No Mortgage Loan is a "home loan" as defined by Nevada Assembly
Xxxx No. 284;
(yyy) No Mortgage Loan is a "high-rate, high-fee mortgage" as defined
by Maine House Xxxx 383 X.X. 494;
(zzz) No Mortgage Loan is a "High-Cost Home Loan" as defined in New
York Banking Law 6-1.
(aaaa) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
Arkansas Home Loan Protection Act effective July 16, 2003 (Act 1340 of 2003);
(bbbb) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
Kentucky high-cost home loan statute effective June 24, 2003 (Ky. Rev. Stat.
Section 360.100);
(cccc) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
New Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46:10B-22 et
seq.);
(dddd) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
New Mexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat. Xxx.
Sections 58-21A-1 et seq.);
(eeee) No Mortgage Loan is a "High-Risk Home Loan" as defined in the
Illinois High- Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp.
Stat. 137/1 et seq.); No Mortgage Loan is a "High-Cost Home Mortgage Loan" as
defined in the Massachusetts Predatory Home Loan Practices Act, effective
November 6, 2004 (Mass. Xxx. Laws Ch. 183C);
-22-
None of the Mortgage Loans that are secured by property located in the State of
Illinois are in violation of the provisions of the Illinois Interest Act; No
Mortgage Loan is a "High Cost Home Loan" as defined in the Indiana Home Loan
Practices Act, effective January 1, 2005 (Ind. Code Xxx. Sections 24-9-1 through
24-9-9);
(ffff) No Mortgage Loan is a "high cost," "covered" (excluding home
loans defined as "covered home loans" pursuant to clause (1) of the definition
of that term in the New Jersey Home Ownership Security Act of 2002) or other
similarly designated loan as defined under any applicable state, local or
federal law, which law contains provisions that may result in liability to the
purchaser or assignee of such Mortgage Loan;
(gggg) Except as disclosed on the Mortgage Loan Schedule, a full
appraisal (URAR Form 1004) was obtained;
(hhhh) An automated valuation model was not the sole method used in
the appraisal process of any Mortgage Loan;
(iiii) With respect to each Mortgage Loan, the FICO score provided is
not a NextGen FICO score;
(jjjj) No Mortgage Loan is a Buydown Mortgage Loan;
(kkkk) No Mortgage Loan requires the Mortgagor to submit to
arbitration to resolve any dispute arising out of or relating in any way to the
mortgage loan transaction. Any breach of this representation shall be deemed to
materially and adversely affect the interests of the owner of the Mortgage Loan
and shall require al repurchase of the affected Mortgage Loan;
(llll) No litigation is pending or threatened with respect to the
Mortgage Loan or Mortgaged Property; and
(mmmm) No Mortgage Loan provides for interest other than at either (i)
a single fixed rate in effect throughout the term of the Mortgage Loan or (ii) a
"variable rate" (within the meaning of Treas. Reg. Section 1.860G-1(a)(3)) in
effect throughout the term of the Mortgage Loan;
(nnnn) The Seller would not, based on the delinquency status of the
Mortgage Loans, institute foreclosure proceedings with respect to any of the
Mortgage Loans prior to the next scheduled payment for such Mortgage Loan; and
(oooo) None of the Mortgage Loans are "high cost" as defined by
applicable predatory and abusive lending laws; No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable (as such terms are defined in the current
Standard & Poor's LEVELS(R) Glossary which is now Version 5.7 Revised, Appendix
E).
Upon discovery by any of the Seller, the Purchaser, the Servicer or the
Trustee (or its custodian) of a breach of any of such representations and
warranties that adversely and materially affects the value of the related
Mortgage Loan, Prepayment Charges or the interests of
-23-
the Certificateholders, the party discovering such breach shall give prompt
written notice to the other parties. Within sixty (60) days of the discovery of
such breach of any representation or warranty, the Seller shall either (a) cure
such breach in all material respects, (b) repurchase such Mortgage Loan or any
property acquired in respect thereof from the Trustee at the Purchase Price or
(c) within the two year period following the Closing Date, substitute a
Replacement Mortgage Loan for the affected Mortgage Loan. In the event of
discovery of a breach of any representation and warranty of the Seller, the
Trustee's rights shall be enforced under this Agreement for the benefit of
Certificateholders. In the event that such breach relates solely to the
unenforceability of a Prepayment Charge, amounts received in respect of such
indemnity up to the amount of such Prepayment Charge shall be distributed
pursuant to Section 4.04(b)(i) of the Pooling and Servicing Agreement. If the
Seller substitutes for a Mortgage Loan for which there is a breach of any
representations and warranties in this Agreement which adversely and materially
affects the value of such Mortgage Loan and such substitute mortgage loan is not
a Replacement Mortgage Loan, the Seller will, in exchange for such substitute
Mortgage Loan, (i) provide the applicable Purchase Price for the affected
Mortgage Loan or (ii) within two years of the Closing Date, substitute such
affected Mortgage Loan with a Replacement Mortgage Loan. Any such substitution
shall not be effected prior to the additional delivery to the Trustee of a
Request for Release substantially in the form of Exhibit I to the Pooling and
Servicing Agreement and shall not be effected unless it is within two years of
the Startup Day. With respect to the representations and warranties described in
this Section that are made to the best of the Seller's knowledge, if it is
discovered by any of the Purchaser, the Seller or the Trustee that the substance
of such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan, notwithstanding
the Seller's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
The Seller indemnifies and holds the Issuing Entity, the Trustee (or its
custodian, as applicable), the Purchaser, the Servicer and each
Certificateholder harmless against any and all taxes, claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, fees and expenses that the Issuing Entity, the Trustee (or its
custodian, as applicable), the Purchaser, the Servicer and any Certificateholder
may sustain in connection with any actions of the Seller relating to a
repurchase of a Mortgage Loan other than in compliance with the terms of this
Section 7, to the extent that any such action causes (i) any federal or state
tax to be imposed on the Issuing Entity or any REMIC provided for in the Pooling
and Servicing Agreement, including without limitation, any federal tax imposed
on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup day" under Section 860G(d)(1) of the Code, or
(ii) any REMIC created in the Pooling and Servicing Agreement to fail to qualify
as a REMIC at any time that any Certificate is outstanding. In furtherance of
the foregoing, if the Seller is not a member of MERS and repurchases a Mortgage
Loan which is registered on the MERS System, the Seller, at its own expense and
without any right of reimbursement, shall cause MERS to execute and deliver an
assignment of the Mortgage in recordable form to transfer the Mortgage from MERS
to the Seller and shall cause such Mortgage to be removed from registration on
the MERS System in accordance with MERS' rules and regulations.
With respect to any Mortgage Loan repurchased by the Seller hereunder, the
principal portion of the funds received by the Servicer in respect of such
repurchase of a Mortgage Loan
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will be considered a Principal Prepayment and shall be deposited in the
Certificate Account pursuant to Section 3.05 of the Pooling and Servicing
Agreement. Upon receipt by the Trustee of notice from the Servicer of receipt by
the Servicer of the full amount of the Purchase Price for a Deleted Mortgage
Loan, and upon receipt by the Trustee of the Mortgage File for a Replacement
Mortgage Loan substituted for a Deleted Mortgage Loan and a Request for Release,
the Trustee shall release and reassign to the Seller the related Mortgage File
for the Deleted Mortgage Loan and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, representation or
warranty, as shall be necessary to vest in such party or its designee or
assignee title to any Deleted Mortgage Loan released pursuant hereto, free and
clear of all security interests, liens and other encumbrances created by this
Agreement, which instruments shall be prepared by the Purchaser or the Seller,
and the Trustee (and its custodian) shall have no further responsibility with
respect to the Mortgage File relating to such Deleted Mortgage Loan.
With respect to each Replacement Mortgage Loan to be delivered to the
Trustee pursuant to the terms of this Section 7 in exchange for a Deleted
Mortgage Loan: (i) the Seller must deliver to the Trustee the Mortgage File for
the Replacement Mortgage Loan along with a written certification certifying as
to the Mortgage Loan satisfying all requirements under the definition of
Replacement Mortgage Loan and the delivery of such Mortgage File and containing
the granting language set forth in Section 4; and (ii) the Purchaser will be
deemed to have made, with respect to such Replacement Mortgage Loan, each of the
representations and warranties made by it with respect to the related Deleted
Mortgage Loan. The Trustee shall review the Mortgage File with respect to each
Replacement Mortgage Loan and certify to the Purchaser that all documents
required by Section 4(A)-(B), (C) (if applicable), and (D)-(E) have been
executed and received.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine
the amount (if any) by which the aggregate principal balance of all such
Replacement Mortgage Loans as of the date of substitution and the aggregate
Prepayment Charges with respect to such Replacement Mortgage Loans is less than
the aggregate Stated Principal Balance (after application of the principal
portion of the Monthly Payment due in the month of substitution) and aggregate
Prepayment Charges of all such Deleted Mortgage Loans. An amount equal to the
aggregate of the deficiencies described in the preceding sentence (such amount,
the "Substitution Adjustment Amount") plus an amount equal to any unreimbursed
costs, penalties and/or damages incurred by the Issuing Entity in connection
with any violation relating to such Deleted Mortgage Loan of any predatory or
abusive lending law shall be remitted by the Seller to the Trustee for deposit
into the Certificate Account by the Seller on the Determination Date for the
Distribution Date relating to the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Section 7 shall be subject to the
additional limitations that no substitution of a Replacement Mortgage Loan for a
Deleted Mortgage Loan shall be made unless the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make the
substitution) that, under current law, such substitution will not (A) affect
adversely the status of any REMIC established pursuant to the Pooling and
Servicing Agreement as a REMIC, or of the
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related "regular interests" as "regular interests" in any such REMIC, or (B)
cause any such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC Provisions.
The Purchaser shall amend the Mortgage Loan Schedule to reflect the removal
of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Replacement Mortgage Loan or Replacement Mortgage Loans.
Upon such substitution by the Seller, such Replacement Mortgage Loan or
Replacement Mortgage Loans shall constitute part of the Mortgage Pool and shall
be subject in all respects to the terms of this Agreement, including all
applicable representations and warranties thereof included herein as of the date
of substitution.
It is understood and agreed that the representations, warranties and
indemnification set forth in this Section 7 of the Seller hereunder shall each
survive delivery of the Mortgage Files and the Assignment of Mortgage of each
Mortgage Loan to the Trustee and shall continue throughout the term of this
Agreement.
Section 8. Representations and Warranties Concerning the Seller.
As of the date hereof and as of the Closing Date, the Seller represents and
warrants to the Purchaser as to itself in the capacity indicated as follows:
(a) the Seller (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and (ii) is
qualified and in good standing to do business in each jurisdiction where such
qualification is necessary, except where the failure so to qualify would not
reasonably be expected to have a material adverse effect on the Seller's
business as presently conducted or on the Seller's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(b) the Seller has full power to own its property, to carry on its
business as presently conducted and to enter into and perform its obligations
under this Agreement;
(c) the execution and delivery by the Seller of this Agreement have
been duly authorized by all necessary action on the part of the Seller; and
neither the execution and delivery of this Agreement, nor the consummation of
the transactions herein contemplated, nor compliance with the provisions hereof,
will conflict with or result in a breach of, or constitute a default under, any
of the provisions of any law, governmental rule, regulation, judgment, decree or
order binding on the Seller or its properties or the charter or by-laws of the
Seller, except those conflicts, breaches or defaults which would not reasonably
be expected to have a material adverse effect on the Seller's ability to enter
into this Agreement and to consummate the transactions contemplated hereby;
(d) the execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given or
made
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and, in connection with the recordation of the Mortgages, powers of attorney or
assignments of Mortgages not yet completed;
(e) this Agreement has been duly executed and delivered by the Seller
and, assuming due authorization, execution and delivery by the Purchaser,
constitutes a valid and binding obligation of the Seller enforceable against it
in accordance with its terms (subject to applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of the rights of creditors
generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Seller, threatened against the Seller, before or by any court,
administrative agency, arbitrator or governmental body (i) with respect to any
of the transactions contemplated by this Agreement or (ii) with respect to any
other matter which in the judgment of the Seller will be determined adversely to
the Seller and will if determined adversely to the Seller materially and
adversely affect the Seller's ability to perform its obligations under this
Agreement; and the Seller is not in default with respect to any order of any
court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this Agreement;
and
Section 9. Representations and Warranties Concerning the Purchaser.
As of the date hereof and as of the Closing Date, the Purchaser represents
and warrants to the Seller as follows:
(a) the Purchaser (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (ii)
is qualified and in good standing as a foreign corporation to do business in
each jurisdiction where such qualification is necessary, except where the
failure so to qualify would not reasonably be expected to have a material
adverse effect on the Purchaser's business as presently conducted or on the
Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(b) the Purchaser has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(c) the execution and delivery by the Purchaser of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Purchaser; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Purchaser or its properties or the
articles of incorporation or by-laws of the Purchaser, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on the Purchaser's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(d) the execution, delivery and performance by the Purchaser of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other
-27-
action in respect of, any state, federal or other governmental authority or
agency, except those consents, approvals, notices, registrations or other
actions as have already been obtained, given or made;
(e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by the Seller,
constitutes a valid and binding obligation of the Purchaser enforceable against
it in accordance with its terms (subject to applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of the rights of creditors
generally);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Purchaser, threatened against the Purchaser, before or by any
court, administrative agency, arbitrator or governmental body (i) with respect
to any of the transactions contemplated by this Agreement or (ii) with respect
to any other matter which in the judgment of the Purchaser will be determined
adversely to the Purchaser and will if determined adversely to the Purchaser
materially and adversely affect the Purchaser's ability to perform its
obligations under this Agreement; and the Purchaser is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(g) the Purchaser's Information (as defined in Section 13(b) hereof)
does not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
Section 10. Conditions to Closing.
(a) The obligations of the Purchaser under this Agreement will be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(i) Each of the obligations of the Seller required to be performed at
or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with in all material respects; all of
the representations and warranties of the Seller under this Agreement shall
be true and correct as of the date or dates specified in all material
respects; and no event shall have occurred which, with notice or the
passage of time, would constitute a default under this Agreement, or the
Pooling and Servicing Agreement; and the Purchaser shall have received
certificates to that effect signed by authorized officers of the Seller.
(ii) The Purchaser shall have received all of the following closing
documents, in such forms as are agreed upon and reasonably acceptable to
the Purchaser, duly executed by all signatories other than the Purchaser as
required pursuant to the respective terms thereof:
(A) [Reserved];
(B) If required pursuant to Section 3 hereof, the Mortgage Loan
Schedule containing the information set forth on Exhibit 1 hereto;
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(C) The Pooling and Servicing Agreement, in form and substance
reasonably satisfactory to the Trustee and the Purchaser, and all
documents required thereby duly executed by all signatories;
(D) A certificate of an officer of the Seller dated as of the
Closing Date, in a form reasonably acceptable to the Purchaser, and
attached thereto the resolutions of the Seller's authorizing the
transactions contemplated by this Agreement, together with copies of
the charter and by-laws of the Seller;
(E) One or more opinions of counsel from the Seller's counsel
otherwise in form and substance reasonably satisfactory to the
Purchaser, the Trustee and each Rating Agency;
(F) A letter from each of the Rating Agencies giving each Class
of Certificates set forth on Schedule B the rating set forth on
Schedule B; and
(G) Such other documents, certificates (including additional
representations and warranties) and opinions as may be reasonably
necessary to secure the intended ratings from each Rating Agency for
the Certificates.
(iii) The Certificates to be sold to Xxxxxxx Xxxxx pursuant to the
Underwriting Agreement shall have been issued and sold to Xxxxxxx Xxxxx.
(iv) The Seller shall have furnished to the Purchaser such other
certificates of its officers or others and such other documents and
opinions of counsel to evidence fulfillment of the conditions set forth in
this Agreement and the transactions contemplated hereby as the Purchaser
and its counsel may reasonably request.
(b) The obligations of the Seller under this Agreement shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(i) The obligations of the Purchaser required to be performed by it on
or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with in all material respects, and
all of the representations and warranties of the Purchaser under this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the Closing Date, and no event shall have occurred which
would constitute a breach by it of the terms of this Agreement, and the
Seller shall have received a certificate to that effect signed by an
authorized officer of the Purchaser.
(ii) The Seller shall have received copies of all of the following
closing documents, in such forms as are agreed upon and reasonably
acceptable to the Seller, duly executed by all signatories other than the
Seller as required pursuant to the respective terms thereof:
(A) [Reserved];
-29-
(B) The Pooling and Servicing Agreement, in form and substance
reasonably satisfactory to the Seller, and all documents required
thereby duly executed by all signatories;
(C) A certificate of an officer of the Purchaser dated as of the
Closing Date, in a form reasonably acceptable to the Seller, and
attached thereto the resolutions of the Purchaser authorizing the
transactions contemplated by this Agreement and the Pooling and
Servicing Agreement, together with copies of the Purchaser's articles
of incorporation, and evidence as to the good standing of the
Purchaser dated as of a recent date;
(D) One or more opinions of counsel from the Purchaser's counsel
in form and substance reasonably satisfactory to the Seller; and
(E) Such other documents, certificates (including additional
representations and warranties) and opinions as may be reasonably
necessary to secure the intended rating from each Rating Agency for
the Certificates;
Section 11. Notices.
All demands, notices and communications hereunder shall be in writing but
may be delivered by facsimile transmission subsequently confirmed in writing.
Notices to the Seller shall be directed to First Franklin Financial Corporation,
0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attn: Vice President, Secondary
Marketing First Franklin Financial Corporation, and notices to the Purchaser
shall be directed to Xxxxxxx Xxxxx Mortgage Investors, Inc., 0 Xxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Telecopy: 212-449-6710), or to any other
address as may hereafter be furnished by one party to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date received at the premises of the addressee (as
evidenced, in the case of registered or certified mail, by the date noted on the
return receipt) provided that it is received on a business day during normal
business hours and, if received after normal business hours, then it shall be
deemed to be received on the next business day.
Section 12. Transfer of Mortgage Loans.
The Purchaser retains the right to assign the Mortgage Loans and any or all
of its interest under this Agreement to the Trustee without the consent of the
Seller, and, upon such assignment, the Trustee shall succeed to the applicable
rights and obligations of the Purchaser hereunder; provided, however, the
Purchaser shall remain entitled to the benefits set forth in Sections 13 hereto
and as provided in Section 2(a). Notwithstanding the foregoing, the sole and
exclusive right and remedy of the Trustee with respect to a breach of
representation or warranty of the Seller shall be the purchase or substitution
obligations of the Seller contained in Sections 5 and 7 hereof.
Section 13. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement,
or contained in certificates of officers of the Seller submitted pursuant
hereto, shall remain operative and in
-30-
full force and effect and shall survive delivery of the Mortgage Loans to the
Purchaser (and by the Purchaser to the Trustee). Subsequent to the delivery of
the Mortgage Loans to the Purchaser, the Seller's representations and warranties
contained herein with respect to the Mortgage Loans shall be deemed to relate to
the Mortgage Loans actually delivered to the Purchaser and included in the
Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to
Section 3 hereof prior to the Closing.
Section 14. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans described
on the Mortgage Loan Schedule in accordance with the terms and conditions of
this Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's obligation to
deliver or cause to be delivered the consideration for the Mortgage Loans
pursuant to Section 2 hereof. The Seller agrees that, upon acceptance of the
Mortgage Loans by the Purchaser or its designee and delivery of payment to the
Seller, that its security interest in the Mortgage Loans shall be released. All
rights and remedies of the Purchaser under this Agreement are distinct from, and
cumulative with, any other rights or remedies under this Agreement or afforded
by law or equity and all such rights and remedies may be exercised concurrently,
independently or successively.
Notwithstanding the foregoing, if on the Closing Date, each of the
conditions set forth in Section 10 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the purchase price as
described in Section 2(c) hereof, or any such condition shall not have been
waived or satisfied and the Purchaser determines not to pay or cause to be paid
the purchase price, the Purchaser shall immediately effect the redelivery of the
Mortgage Loans, if delivery to the Purchaser has occurred and the security
interest created by this Section 18 shall be deemed to have been released.
Section 15. Severability.
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, as to such jurisdiction, be ineffective
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
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extent permitted by applicable law, the parties hereto waive any provision of
law which prohibits or renders void or unenforceable any provision hereof.
Section 16. Counterparts.
This Agreement may be executed in counterparts, each of which will be an
original, but which together shall constitute one and the same agreement.
Section 17. Amendment.
This Agreement cannot be amended or modified in any manner without the
prior written consent of each party.
Section 18. GOVERNING LAW.
THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE AND PERFORMED IN THE STATE
OF NEW YORK AND SHALL BE INTERPRETED IN ACCORDANCE WITH THE LAWS OF SUCH STATE,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
Section 19. Further Assurances.
Each of the parties agrees to execute and deliver such instruments and take
such actions as another party may, from time to time, reasonably request in
order to effectuate the purpose and to carry out the terms of this Agreement
including any amendments hereto which may be required by either Rating Agency.
Section 20. Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be enforceable by
the Seller and the Purchaser and their permitted successors and assigns and, to
the extent specified in Section 13 hereof, Xxxxxxx Xxxxx, and their directors,
officers and controlling persons (within the meaning of federal securities
laws). The Seller acknowledges and agrees that the Purchaser may assign its
rights under this Agreement (including, without limitation, with respect to the
Seller's representations and warranties respecting the Mortgage Loans) to the
Trustee. Any Person into which the Seller may be merged or consolidated (or any
Person resulting from any merger or consolidation involving the Seller), any
Person resulting from a change in form of the Seller or any Person succeeding to
the business of the Seller, shall be considered the "successor" of the Seller
hereunder and shall be considered a party hereto without the execution or filing
of any paper or any further act or consent on the part of any party hereto.
Except as provided in the two preceding sentences, this Agreement cannot be
assigned, pledged or hypothecated by either party hereto without the written
consent of the other parties to this Agreement and any such assignment or
purported assignment shall be deemed null and void.
Section 21. The Seller.
The Seller will keep in full effect all rights as are necessary to perform
their respective obligations under this Agreement.
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Section 22. Entire Agreement.
This Agreement contains the entire agreement and understanding between the
parties with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof.
Section 23. No Partnership.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective duly authorized officers as of the date first above
written.
FIRST FRANKLIN FINANCIAL CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:
------------------------------------
Name: Xxxx Park
Title: Authorized Signatory
EXHIBIT 1
MORTGAGE LOAN SCHEDULE INFORMATION
The Mortgage Loan Schedule shall set forth the following information with
respect to each Mortgage Loan:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
(3) the street address of the Mortgaged Property including the state and
zip code;
(4) a code indicating whether the Mortgaged Property is owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged Property;
(6) the original months to maturity, calculated (i) in the case of a
modified loan, the number of months between the date on which the
first Monthly Payment was due per the modification agreement on such
Mortgage Loan and the stated maturity date per the modification
agreement, and (ii) in the case of a non-modified loan, the number of
months between the date on which the first Monthly Payment was due on
such Mortgage Loan and the stated maturity date;
(7) the original date of the Mortgage Loan, and if the loan has been
modified, the modification date of the Mortgage Loan, and the
remaining months to maturity from the Cut-off Date, based on the
original amortization schedule;
(8) the Loan-to-Value Ratio at origination, except with respect to a
modified loan, for which such calculation shall be performed using the
appraisal obtained at the time of the modification and without regards
to sales price;
(9) the Mortgage Rate in effect immediately following the Cut-off Date;
(10) the date on which the first Monthly Payment was due on the Mortgage
Loan, except with respect to a modified loan, the date on which the
first Monthly Payment was due on the loan per the modification
agreement;
(11) the stated maturity date, except with respect to a modified loan, the
date on which the stated maturity date on the loan per the
modification agreement;
(12) the amount of the Monthly Payment at origination, except with respect
to a modified loan, the amount of the initial Monthly Payment per the
modification agreement;
(13) the amount of the Monthly Payment as of the Cut-off Date;
(14) the last Due Date on which a Monthly Payment was actually applied to
the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan, except with
respect to a modified loan, the principal amount stated on the
modification agreement as then due;
(16) the Stated Principal Balance of the Mortgage Loan as of the close of
business on the Cut-off Date;
(17) with respect to each Adjustable Rate Mortgage Loan, the first Mortgage
Rate Adjustment Date and the number of months between each Adjustment
Date thereafter, except with respect to a modified loan that is an
Adjustable Rate Mortgage Loan, the first Mortgage Rate Adjustment Date
per the modification agreement;
(18) with respect to each Adjustable Rate Mortgage Loan, the number of days
prior to the Origination Date and each Adjustment Date thereafter,
whereby the Index is determined;
(19) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin,
except with respect to a modified loan, the Gross Margin stated on the
modification agreement;
(20) with respect to each Adjustable Rate Mortgage Loan, the Periodic Rate
Cap, except with respect to a modified loan, the Periodic Rate Cap
stated on the modification agreement;
(21) with respect to each Adjustable Rate Mortgage Loan, the Initial Rate
Cap, except with respect to a modified loan, the Initial Rate Cap
stated on the modification agreement;
(22) a code indicating the purpose of the loan (i.e., purchase financing,
Rate/Term Refinancing, Cash-Out Refinancing);
(23) with respect to each Adjustable Rate Mortgage Loan, the Maximum
Mortgage Rate under the terms of the Mortgage Note, except with
respect to a modified loan, the Maximum Mortgage Rate stated on the
modification agreement;
(24) with respect to each Adjustable Rate Mortgage Loan, the Minimum
Mortgage Rate under the terms of the Mortgage Note, except with
respect to a modified loan, the Minimum Mortgage Rate stated on the
modification agreement;
(25) the Mortgage Rate at origination, except with respect to a modified
loan, for which the initial Mortgage Rate per the modification
agreement shall be provided;
(26) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;
(27) with respect to each Adjustable Rate Mortgage Loan, the Index and the
number of decimal places to which the Index is rounded;
(28) a code indicating whether the Mortgage Loan is an Adjustable Rate
Mortgage Loan or a Fixed Rate Mortgage Loan, where for modified loans,
the code reflects the whether the modified loan is an Adjustable Rate
Mortgage Loan or a Fixed Rate Mortgage Loan;
(29) a code indicating the documentation style (i.e., full, alternative or
reduced);
(30) a code indicating if the Mortgage Loan is subject to a primary
insurance policy;
(31) a code indicating whether the Mortgage Loan is a Buydown Mortgage
Loan;
(32) a code indicating the product type of the Mortgage Loan;
(33) a code indicating whether the Mortgage Loan is subject to a Prepayment
Charge, the term of such Prepayment Charge, the amount of such
Prepayment Charge to be provided on a prepayment penalty matrix
attached to such Mortgage Loan Schedule;
(34) the Appraised Value of the Mortgaged Property, and if such loan is a
modified loan, the Appraised Value;
(35) the sale price of the Mortgaged Property, if applicable;
(36) a code indicating whether the Mortgaged Property is subject to a First
Lien or a Second Lien;
(37) the Credit Score of the Mortgagor;
(38) the Mortgagor's debt to income ratio;
(39) with respect to each Adjustable Rate Mortgage Loan, to the extent that
such Mortgage Loan is an interest only loan, the number of
months/years whereby the scheduled payment payable by a Mortgagor
under the related Mortgage Note on each Due Date includes only
interest payments;
(40) points and fees at origination, described in the aggregate;
(41) a code indicating whether the Mortgagor is self-employed;
(42) the Mortgagor's monthly income;
(43) the number of months from disposition of bankruptcy (use "999" to
indicate no bankruptcy);
(44) the number of months from disposition of foreclosure (use "999" to
indicate no foreclosure);
(45) a payment string relating to payment history for the past 12 months of
the current mortgage loan performance;
(46) the Combined Loan-to-Value Ratio (including all senior and junior
mortgage loans), using the appraisal obtained at the time of
modification in relation to modified loans;
(47) the original balance on any mortgage loan senior in priority to the
Mortgage Loan;
(48) the Mortgagor's social security number;
(49) the type of appraisal performed on the Mortgaged Property;
(50) a code indicating whether the Mortgage Note permits negative
amortization;
(51) a code indicating whether the Mortgage Note permits deferred interest;
(52) a code indicating whether the Mortgage is a graduated payment mortgage
loan;
(53) a code indicating whether the Mortgage Loan is a reverse-mortgage
loan;
(54) the unpaid principal balance of the Mortgage Loan;
(55) with respect to any modification agreement, the modification type; and
(56) with respect to each DAD Loan, the dividend rate and the reserved
amount.
With respect to the Mortgage Loan Package in the aggregate, the Mortgage Loan
Schedule shall set forth the following information, as of the related Cut-off
Date:
(1) the number of Mortgage Loans;
(2) the current principal balance of the Mortgage Loans;
(3) the weighted average Mortgage Rate of the Mortgage Loans; and
(4) the weighted average maturity of the Mortgage Loans.
Schedule I hereto shall be supplemented as of each Closing Date to reflect the
addition of the Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
EXHIBIT 2
CONTENTS OF EACH MORTGAGE FILE
[Intentionally Omitted]
EXHIBIT 3
APPENDIX E - STANDARD & POOR'S PREDATORY LENDING CATEGORIES
REVISED April 18, 2006
Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.
STANDARD & POOR'S HIGH COST LOAN CATEGORIZATION
Category under
Applicable
Name of Anti-Predatory Anti-Predatory Lending
State/Jurisdiction Lending Law/Effective Date Law
------------------ ----------------------------------- ----------------------
Arkansas Arkansas Home Loan Protection Act, High Cost Home Loan
Ark. Code Xxx. Sections 00-00-000
et seq.
Effective July 16, 0000
Xxxxxxxxx Xxxxxxx, XX Ordinance No. 72-2003 (PSH), Mun. Covered Loan
Code Sections 757.01 et seq.
Effective June 2, 2003
Colorado Consumer Equity Protection, Colo. Covered Loan
Stat. Xxx. Sections 5-3.5-101 et
seq.
Effective for covered loans offered
or entered into on or after January
1, 2003. Other provisions of the
Act took effect on June 7, 0000
Xxxxxxxxxxx Xxxxxxxxxxx Abusive Home Loan High Cost Home Loan
Lending Practices Act, Conn. Gen.
Stat. Sections 36a-746 et seq.
Effective October 1, 0000
Xxxxxxxx xx Xxxxxxxx Home Loan Protection Act, D.C. Code Covered Loan
Sections 26-1151.01 et seq.
Effective for loans closed on or
after January 28, 2003
Category under
Applicable
Name of Anti-Predatory Anti-Predatory Lending
State/Jurisdiction Lending Law/Effective Date Law
------------------ ----------------------------------- ----------------------
Florida Fair Lending Act, Fla. Stat. Xxx. High Cost Home Loan
Sections 494.0078 et seq.
Effective October 2, 2002
Georgia (Oct. 1, 0000 Xxxxxxx Xxxx Xxxxxxx Xxx, Xx. Code High Cost Home Loan
- Mar. 6, 2003) Xxx. Sections 7-6A-1 et seq.
Effective October 1, 2002 - March
6, 2003
Georgia as amended Georgia Fair Lending Act, Ga. Code High Cost Home Loan
(Mar. 7, 2003 - Xxx. Sections 7-6A-1 et seq.
current)
Effective for loans closed on or
after Xxxxx 0, 0000
XXXXX Section 32 Home Ownership and Equity High Cost Loan
Protection Act of 1994, 15 U.S.C.
Section 1639, 12 C.F.R. Sections
226.32 and 226.34
Effective October 1, 1995,
amendments October 1, 2002
Illinois High Risk Home Loan Act, Ill. Comp. High Risk Home Loan
Stat. tit. 815, Sections 137/5 et
seq.
Effective January 1, 2004 (prior to
this date, regulations under
Residential Mortgage License Act
effective from May 14, 2001)
Kansas Consumer Credit Code, Kan. Stat. High Loan to Value
Xxx. Sections 16a-1-101 et seq. Consumer Loan (id.
Section 16a-3-207) and;
Sections 16a-1-301 and 16a-3-207
became effective April 14, 1999; High APR Consumer Loan
Section 16a-3-308a became effective (id. Section 16a-3-308a)
July 1, 1999
Kentucky 2003 KY H.B. 287 - High Cost Home High Cost Home Loan
Loan Act, Ky. Rev. Stat. Sections
360.100 et seq.
Effective June 24, 2003
Category under
Applicable
Name of Anti-Predatory Anti-Predatory Lending
State/Jurisdiction Lending Law/Effective Date Law
------------------ ----------------------------------- ----------------------
Maine Truth in Lending, Me. Rev. Stat. High Rate High Fee
tit. 9-A, Sections 8-101 et seq. Mortgage
Effective September 29, 1995 and as
amended from time to time
Massachusetts Part 40 and Part 32, 209 C.M.R. High Cost Home Loan
Sections 32.00 et seq. and 209
C.M.R. Sections 40.01 et seq.
Effective March 22, 2001 and
amended from time to time
Nevada Assembly Xxxx No. 284, Nev. Rev. Home Loan
Stat. Sections 598D.010 et seq.
Effective October 1, 2003
New Jersey New Jersey Home Ownership Security High Cost Home Loan
Act of 2002, N.J. Rev. Stat.
Sections 46:10B-22 et seq.
Effective for loans closed on or
after November 27, 2003
New Mexico Home Loan Protection Act, N.M. Rev. High Cost Home Loan
Stat. Sections 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made on
or after April 1, 2003
North Carolina Restrictions and Limitations on High Cost Home Loan
High Cost Home Loans, N.C. Gen.
Stat. Sections 24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end
lines of credit)
Name of Anti-Predatory Category under Applicable
State/Jurisdiction Lending Law/Effective Date Anti-Predatory Lending Law
------------------ ---------------------------------- --------------------------
Ohio H.B. 386 (codified in various Covered Loan
sections of the Ohio Code), Ohio
Rev. Code Xxx. Sections 1349.25 et
seq.
Effective May 24, 2002
Oklahoma Consumer Credit Code (codified in Subsection 10 Mortgage
various sections of Title 14A)
Effective July 1, 2000; amended
effective January 1, 2004
South Carolina South Carolina High Cost and High Cost Home Loan
Consumer Home Loans Act, S.C. Code
Xxx. Sections 37-23-10 et seq.
Effective for loans taken on or
after January 1, 0000
Xxxx Xxxxxxxx Xxxx Xxxxxxxx Residential Mortgage West Virginia Mortgage
Lender, Broker and Servicer Act, Loan Act Loan
W. Va. Code Xxx. Sections 31-17-1
et seq.
Effective June 5, 2002
STANDARD & POOR'S COVERED LOAN CATEGORIZATION
Name of Anti-Predatory Category under Applicable
State/Jurisdiction Lending Law/Effective Date Anti-Predatory Lending Law
------------------ ---------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Covered Loan
Mar. 6, 2003) Xxx. Sections 7-6A-1 et seq.
Effective October 1, 2002 - March
6, 0000
Xxx Xxxxxx Xxx Xxxxxx Home Ownership Security Covered Home Loan
Act of 2002, N.J. Rev. Stat.
Sections 46:10B-22 et seq.
Effective November 27, 2003 - July
5, 2004
STANDARD & POOR'S HOME LOAN CATEGORIZATION
Name of Anti-Predatory Category under Applicable
State/Jurisdiction Lending Law/Effective Date Anti-Predatory Lending Law
------------------ ---------------------------------- --------------------------
Georgia (Oct. 1, 2002 - Georgia Fair Lending Act, Ga. Code Home Loan
Mar. 6, 2003) Xxx. Sections 7-6A-1 et seq.
Effective October 1, 2002 - March
6, 0000
Xxx Xxxxxx Xxx Xxxxxx Home Ownership Security Home Loan
Act of 2002, N.J. Rev. Stat.
Sections 46:10B-22 et seq.
Effective for loans closed on or
after November 27, 2003
New Mexico Home Loan Protection Act, N.M. Home Loan
Rev. Stat. Sections 58-21A-1 et
seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
North Carolina Restrictions and Limitations on Consumer Home Loan
High Cost Home Loans, N.C. Gen.
Stat. Sections 24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end
lines of credit)
South Carolina South Carolina High Cost and Consumer Home Loan
Consumer Home Loans Act, S.C. Code
Xxx. Sections 37-23-10 et seq.
Effective for loans taken on or
after January 1, 2004
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
SCHEDULE B
REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
Certificates
Class Xxxxx'x S&P
----- ------------ ----
Class A-1 Aaa AAA
Class A-2A Aaa AAA
Class A-2B Aaa AAA
Class A-2C Aaa AAA
Class R N/R AAA
Class X-0 Xx0 XXx
Xxxxx X-0 Xx0 XX
Class M-3 Aa3 AA
Class M-4 A1 A+
Class M-5 A2 A
Class M-6 A3 A-
Class B-1 Baa1 BBB+
Class B-2 Baa2 BBB
Class B-3 Baa3 BBB-
Class B-4 Ba1 BB+
None of the above ratings has been lowered since the respective dates of such
letters.
