Exhibit 99.6
RECONSTITUTED SERVICING AGREEMENT
THIS RECONSTITUTED SERVICING AGREEMENT (this "Agreement"), entered
into as of the 1st day of August, 2006, by and among XXXXXXXXX MORTGAGE HOME
LOANS, INC., a Delaware corporation ("Xxxxxxxxx" or the "Seller"), XXXXX FARGO
BANK, N.A., as servicer (the "Servicer") and XXXXXXXXX MORTGAGE SECURITIES TRUST
2006-5 (the "Trust"), and acknowledged by XXXXX FARGO BANK, N.A., as master
servicer (the "Master Servicer"), recites and provides as follows:
RECITALS
WHEREAS, the Seller has conveyed certain mortgage loans identified on
Schedule I hereto (the "Mortgage Loans") to Structured Asset Mortgage
Investments II, Inc., a Delaware corporation ("XXXX XX"), which in turn has
conveyed the Mortgage Loans to the Xxxxxxxxx Mortgage Securities Trust 2006-5
(the "Trust"), under a pooling and servicing agreement dated as of August 1,
2006 (the "Pooling and Servicing Agreement"), among LaSalle Bank National
Association, as Trustee (the "Trustee"), the Master Servicer, XXXX XX, as seller
(referred to herein as the "Depositor"), Wilmington Trust Company, as Delaware
trustee, Xxxxx Fargo Bank, N.A., as securities administrator and the Seller.
WHEREAS, the Mortgage Loans are currently being serviced by the
Servicer pursuant to a Master Seller's Warranties and Servicing Agreement
between Xxxxxx Brothers Bank, FSB ("Xxxxxx Brothers") and the Servicer dated as
of May 1, 2006, as amended by Amendment No. 1 to the Master Seller's Warranties
and Servicing Agreement dated August 1, 2006 and the Assignment and Conveyance
Agreement (06-W067) between Xxxxxx Brothers and the Servicer dated as of August
18, 2006 (collectively, the "Master Servicing Agreement"), a copy of which is
attached hereto as Exhibit B;
WHEREAS, the Seller, Xxxxxx Brothers, and the Servicer entered into an
Assignment and Assumption Agreement dated August 25, 2006 (the "AAR"), pursuant
to which, among other things, the Seller purchased the Mortgage Loans from
Xxxxxx Brothers and the Servicer agreed to service and administer the Mortgage
Loans in accordance with the terms of the Master Servicing Agreement, as
modified by the AAR (collectively the "Servicing Agreement"), a copy of which is
attached hereto as Exhibit C;
WHEREAS, the Seller desires that the Servicer continue to service the
Mortgage Loans, and the Servicer has agreed to do so in accordance with the
Servicing Agreement as modified in the attached Exhibit A;
WHEREAS, the Master Servicer and any successor master servicer shall
be obligated, among other things, to supervise the servicing of the Mortgage
Loans on behalf of the Trustee, and shall have the right, under certain
circumstances, to terminate the rights and obligations of the Servicer upon the
occurrence and continuance of an Event of Default by the Servicer under this
Agreement;
-1-
WHEREAS, the Seller and the Servicer desire that the provisions of the
Servicing Agreement shall apply to the Mortgage Loans, but only to the extent
provided herein and that this Agreement shall constitute a "Reconstitution
Agreement" as defined under the Servicing Agreement which shall govern the
Mortgage Loans for so long as such Mortgage Loans remain subject to the
provisions of the Pooling and Servicing Agreement;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Seller and the Servicer hereby
agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto, shall have the meanings ascribed to such
terms in the Servicing Agreement.
2. Servicing. The Servicer agrees, with respect to the Mortgage Loans,
to perform and observe the duties, responsibilities and obligations that are to
be performed and observed under the provisions of the Servicing Agreement,
except as otherwise provided herein and on Exhibit A hereto, and that the
provisions of the Servicing Agreement, as so modified, are and shall be a part
of this Agreement to the same extent as if set forth herein in full.
3. Servicer. From and after August 31, 2006, the Servicer shall and
does hereby recognize that the Seller will transfer the Mortgage Loans and
assign its rights under the Servicing Agreement to XXXX XX and that XXXX XX will
thereafter transfer the Mortgage Loans and assign its rights under the Servicing
Agreement and this Agreement to the Trust. The Servicer acknowledges and agrees
that from and after August 31, 2006 (i) the Trust will be the owner of the
Mortgage Loans, (ii) the Servicer shall look solely to the Trust for performance
of any obligations of the Seller insofar as they relate to the enforcement of
the representations, warranties and covenants with respect to the Mortgage
Loans, (iii) the Trust (including the Trustee and, with respect to the servicing
of the Mortgage Loans, the Master Servicer acting on the Trust's behalf) shall
have all the rights and remedies available to the Seller insofar as they relate
to the Mortgage Loans, under the Servicing Agreement, including, without
limitation, the enforcement of the document delivery requirements set forth in
Section 2.03 of the Master Servicing Agreement, and shall be entitled to enforce
all of the obligations of the Servicer thereunder insofar as they relate to the
Mortgage Loans, and (iv) all references to the Purchaser (insofar as they relate
to the rights, title and interest and, with respect to obligations of the
Purchaser, only insofar as they relate to the enforcement of the
representations, warranties and covenants of the Servicer) under the Servicing
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust. Neither the Servicer nor the Seller shall further amend or agree
to amend, modify, waive, or otherwise alter any of the terms or provisions of
the Servicing Agreement which amendment, modification, waiver or other
alteration would in any way affect the Mortgage Loans or the Servicer's
performance under the Servicing Agreement with respect to the Mortgage Loans
without the prior written consent of the Trustee and the Master Servicer.
-2-
4. Notwithstanding any statement to the contrary in Section 3 above,
the Seller shall and does hereby acknowledge that the indemnification provisions
set forth in Sections 3.03, 8.01 and 9.01(f) of the Master Servicing Agreement
shall be available to and for the benefit of the Seller, XXXX XX and the Trust
(including the Trustee and the Master Servicer acting on the Trust's behalf).
5. The Servicer hereby acknowledges that Xxxxx Fargo Bank, N.A. has
been appointed as the master servicer of the Mortgage Loans pursuant to the
Pooling and Servicing Agreement and, therefore, has the right to enforce all
obligations of the Servicer under the Servicing Agreement. Such rights will
include, without limitation, the right to terminate the Servicer under the
Servicing Agreement upon the occurrence of an Event of Default thereunder, the
right to receive all remittances required to be made by the Servicer under the
Servicing Agreement, the right to receive all monthly reports and other data
required to be delivered by the Servicer under the Servicing Agreement, the
right to examine the books and records of the Servicer, indemnification rights
and the right to exercise certain rights of consent and approval relating to
actions taken by the Servicer. All assessments, reports and certifications
required to be delivered by the Servicer under this Agreement and the Servicing
Agreement shall include the Master Servicer as an addressee, and the Master
Servicer shall be entitled to rely on all such assessments, reports and
certifications.
6. Representations. The Servicer shall not be obligated or required to
make any further representations and warranties regarding the characteristics of
the Mortgage Loans in connection with the transactions contemplated by the
Pooling and Servicing Agreement and issuance of the Certificates pursuant
thereto. The Servicer does hereby make the representations made in Section 3.01
of the Master Servicing Agreement as of August 31, 2006.
7. Notices. All notices, consents, certificates and other
communications required to be delivered between or among the parties hereto
(including any third party beneficiary thereof) or required to be provided to
the Trustee shall be in writing, may be in the form of facsimile or electronic
transmission, and shall be deemed received or given when mailed first-class
mail, postage prepaid, addressed to each other party at its address specified
below or, if sent by facsimile or electronic mail, when facsimile or electronic
confirmation of receipt by the recipient is received by the sender of such
notice. Each party may designate to the other parties in writing, from time to
time, other addresses to which notices and communications hereunder shall be
sent. All notices and other written information required to be delivered to the
Master Servicer under this Agreement shall be delivered to the Master Servicer
at the following address:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx Xxxxxxxxxx, Xxxxxxxxx 0000-0
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
-3-
Xxxxx Fargo Bank, N.A.
ABA# 000-000-000
Account Name: SAS Clearing
Account No. 0000000000
FFC: 50941400, Xxxxxxxxx 2006-5
All notices and other written information required to be delivered to
the Trustee hereunder shall be delivered to the Trustee at the following
address:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx 2006-5
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All notices and other written information required to be delivered to
the Seller hereunder shall be delivered to it at the following address:
Xxxxxxxxx Mortgage Home Loans, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxx (Xxxxxxxxx 2006-5)
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All notices and written information required to be delivered to the
Servicer hereunder shall be delivered to the Servicer at the following address:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2302-033
Fax: 000-000-0000
with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS
CHOICE OF LAW RULES EXCEPT FOR SECTION 5-1401 OF THE GENERAL OBLIGATION LAW,
WHICH SHALL APPLY HERETO.
-4-
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all of which counterparts shall together constitute but one and the same
instrument.
10. Reconstitution. The Seller and the Servicer agree that this
Agreement is a "Reconstitution Agreement" and that the date hereof is the
"Reconstitution Date," each as defined in the Servicing Agreement.
11. REMIC Status. The Servicer is hereby notified, and the Servicer
hereby acknowledges such notice, that the Mortgage Loans will be held in a
securitization pursuant to which a REMIC election will be made.
12. Limitation of Liability. It is expressly understood and agreed by
the parties hereto that (a) this Agreement is executed and delivered by LaSalle
Bank National Association ("LaSalle Bank"), not individually or personally but
solely as the Trustee of the Trust, in the exercise of the powers and authority
conferred and vested in it, (b) the representations, warranties, covenants,
undertakings and agreements herein made on the part of the Trustee are made and
intended not as personal representations, undertakings and agreements by LaSalle
Bank but are made and intended for the purpose of binding on the Trust, (c)
nothing herein contained shall be construed as creating any liability on LaSalle
Bank, individually or personally, to perform any covenant either expressly or
implied contained herein, all such liability, if any, being expressly waived by
the parties who are signatories to this Agreement and by any person claiming by,
through or under such parties and (d) under no circumstances shall LaSalle Bank
be personally liable for payment of any indemnity, indebtedness, fees or
expenses of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this
Agreement.
-5-
Executed as of the day and year first above written.
XXXXXXXXX MORTGAGE HOME LOANS, INC.,
as Seller
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx
Senior Vice President
XXXXX FARGO BANK, N.A.,
as Servicer
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
XXXXXXXXX MORTGAGE SECURITIES TRUST
2006-5
BY: LASALLE BANK NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Trustee on
behalf of the Trust
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
Acknowledged By:
XXXXX FARGO BANK, N.A.
as Master Servicer
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
-6-
EXHIBIT A
Modifications to the Servicing Agreement
1. The definition of "Business Day" in Article I is hereby amended to
read as follows:
Business Day: Any day other than (a) a Saturday or Sunday or (b) a day
on which banking and savings and loan institutions in the States of
California, Delaware, New York, Maryland, Minnesota, South Carolina or
Iowa are authorized or obligated by law or executive order to be
closed.
2. The definition of "Qualified Substitute Mortgage Loan" in Article I
is hereby amended by the addition of the following language at the end of the
first sentence thereof:
and (vi) qualify as a Qualified Substitute Mortgage Loan under the
Pooling and Servicing Agreement.
3. A new definition of "Document Transfer Event" is hereby added to
Article I to read as follow:
Document Transfer Event. The day on which (i) Xxxxx Fargo Bank, N.A.
or any successor thereto is no longer the servicer of any of the
Mortgage Loans, (ii) the senior, unsecured long-term debt rating of
Xxxxx Fargo & Company is less than "BBB-" by Fitch Ratings or (iii)
any Rating Agency requires the Company to deliver the Retained
Mortgage Files (as defined in the Servicing Agreement) to the
Custodian.
4. Section 4.01 (Company to Act as Servicer) is modified to add the
following at the end of the second paragraph:
"Further, with respect to any permitted modification, the Company
shall determine, in consultation with counsel, that such a change
would not be treated as a "significant modification" that would cause
a deemed exchange under Section 1001(a) of the Code or applicable
temporary or final regulations thereunder at any time when the
Mortgage Loan is held by a REMIC or grantor trust."
5. Section 4.01 (Company to Act as Servicer) is further modified by
replacing the second sentence of the second paragraph thereof with the
following:
"The Company shall not permit any modification with respect to a
Mortgage Loan that would change the Mortgage Interest Rate, defer or
forgive the payment of principal or reduce or increase the outstanding
principal balance (except for reductions resulting from actual
payments of principal) or change the final maturity date on
-7-
such Mortgage Loan, unless the Mortgagor is in default with respect to
the Mortgage Loan or such default is, in the judgment of the Company,
imminent."
6. Section 4.04 (Establishment of and Deposits to Custodial Account)
is hereby amended by deleting the language "Purchaser and/or subsequent
purchasers of Mortgage Loans - P&I" at the end of the first sentence in the
first paragraph and replacing it with the phrase "Xxxxxxxxx Mortgage Securities
Trust 2006-5."
7. Section 4.05 (Permitted Withdrawals From Custodial Account) is
hereby amended by deleting clause (vii) and replacing it with the following:
"(vii) to reimburse itself for any Monthly Advances, Servicing
Advances and REO expenses after liquidation of the Mortgaged Property
not otherwise reimbursed above;"
8. Section 4.06 (Establishment of Deposits to Escrow Accounts) is
hereby amended by deleting the phrase "Purchaser and/or subsequent purchasers of
Residential Mortgage Loans, and various Mortgagors - T&I" at the end of the
first sentence of the first paragraph, and replacing it with the phrase
"Xxxxxxxxx Mortgage Securities Trust 2006-5."
9. Section 4.16 (Title, Management and Disposition of REO Property) is
hereby amended by:
a. deleting the first paragraph and replacing it with the
following:
"In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate
of sale shall be taken in the name of the Trust."
10. A new Section 4.32 (Delivery of Retained File) is added to the
Servicing Agreement to read as follows:
"Within sixty (60) days of the occurrence of a Document Transfer
Event, the Company shall deliver to the Trustee or any other party per
written instructions from the Trustee, the additional documents from
its Retained Mortgage File (as defined in the Servicing Agreement)."
11. Section 5.01 (Remittances) is hereby amended by deleting the
second use of the phrase "Business Day" in the second paragraph and replacing it
with the phrase "Remittance Date."
12. Section 6.04 (Annual Statement as to Compliance) is hereby deleted
in its entirety and replaced as follows:
"On or before March 1 of each calendar year, commencing in 2007, the
Company shall deliver to the Purchaser and any
-8-
Depositor, or if Xxxxx Fargo Bank, N.A. is the Master Servicer, to the
Master Servicer, a statement of compliance addressed to the Purchaser
and such Depositor or if Xxxxx Fargo Bank, N.A. is the Master
Servicer, to the Master Servicer, and signed by an authorized officer
of the Company, to the effect that (a) a review of the Company's
activities during the immediately preceding calendar year (or
applicable portion thereof) and of its performance under this
Agreement and any applicable Reconstitution Agreement during such
period has been made under such officer's supervision, and (b) to the
best of such officers' knowledge, based on such review, the Company
has fulfilled all of its obligations under this Agreement and any
applicable Reconstitution Agreement in all material respects
throughout such calendar year (or applicable portion thereof) or, if
there has been a failure to fulfill any such obligation in any
material respect, specifically identifying each such failure known to
such officer and the nature and the status thereof."
13. Section 6.06 (Report on Assessment of Compliance and Attestation)
is hereby deleted in its entirety and replaced as follows:
On or before March 1 of each calendar year, commencing in 2007, the
Company shall:
(i) deliver to the Purchaser and any Depositor or if Xxxxx Fargo Bank,
N.A. is the Master Servicer, to the Master Servicer, a report (in form and
substance reasonably satisfactory to the Purchaser and such Depositor and
if Xxxxx Fargo Bank, N.A. is the Master Servicer, to such Master Servicer)
regarding the Company's assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year, as required under
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.
Such report shall be addressed to the Purchaser and such Depositor or if
Xxxxx Fargo Bank, N.A. is the Master Servicer, to the Master Servicer, and
signed by an authorized officer of the Company and shall address each of
the "Applicable Servicing Criteria" specified on Exhibit H hereto (or those
Servicing Criteria otherwise mutually agreed to by the Purchaser, the
Company and any Person that will be responsible for signing any Sarbanes
Certification with respect to a Securitization Transaction in response to
evolving interpretations of Regulation AB);
(ii) deliver to the Purchaser and any Depositor or if Xxxxx Fargo
Bank, N.A. is the Master Servicer, to the Master Servicer, a report of a
registered public accounting firm reasonably acceptable to the Purchaser
and such Depositor or if Xxxxx Fargo Bank, N.A. is the Master Servicer, to
such Master Servicer, that attests to, and reports on, the assessment of
compliance made by the Company and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act;
-9-
(iii) cause each Subservicer and each Subcontractor, determined by the
Company pursuant to Section 4.25(b) to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, to deliver to
the Purchaser and any Depositor an assessment of compliance and
accountants' attestation as and when provided in paragraphs (i) and (ii) of
this Section 6.06; and
(iv) deliver, and cause each Subservicer and each Subcontractor
described in clause (iii) hereof to deliver to the Purchaser, any
Depositor, any Master Servicer and any other Person that will be
responsible for signing the certification (a "Sarbanes Certification")
required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant
to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) on behalf of an
asset-backed issuer with respect to a Securitization Transaction a
certification, signed by the appropriate officer of the Company, in the
form attached hereto as Exhibit I.
The Company acknowledges that the parties identified in clause (iv)
above may rely on the certification provided by the Company pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
Neither the Purchaser nor any Depositor or Master Servicer will request delivery
of a certification under clause (iv) above unless a Depositor or Master Servicer
is required under the Exchange Act to file an annual report on Form 10-K with
respect to an issuing entity whose asset pool includes the Mortgage Loans.
Each assessment of compliance provided by a Subservicer pursuant to
Section 6.06(i) shall address each of the Servicing Criteria specified
substantially in the form of Exhibit H hereto delivered to the Purchaser
concurrently with the execution of this Agreement or, in the case of a
Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant to
Section 6.06(iii) need not address any elements of the Servicing Criteria other
than those specified by the Company pursuant to Section 4.25.
14. Section 6.07 (Remedies) is hereby deleted in its entirety and
replaced as follows:
a. Any failure by the Company, any Subservicer, any Subcontractor
or any Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under Article IX,
Section 4.25, Section 6.04 or Section 6.06, or any breach by the Company of a
representation or warranty set forth in Section 9.01(e)(vi)(A), or in a writing
furnished pursuant to Section 9.01(e)(vi)(B) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(e)(vi)(B) to the extent made as of a date subsequent to such closing date,
shall, except as provided in sub-clause (ii) of this Section, immediately and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or any Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Company as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement or any applicable Reconstitution Agreement to the contrary) of any
compensation to the Company (and,
-10-
if the Company is servicing any of the Mortgage Loans in a Securitization
Transaction, appoint a successor servicer reasonably acceptable to any Master
Servicer for such Securitization Transaction); provided that to the extent that
any provision of this Agreement and/or any applicable Reconstitution Agreement
expressly provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given effect.
b. Any failure by the Company, any Subservicer or any
Subcontractor to deliver any information, report, certification or accountants'
letter when and as required under Section 6.04 or Section 6.06, including any
failure by the Company to identify any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten (10) calendar days after the date on which such
information, report, certification or accountants' letter was required to be
delivered shall constitute an Event of Default with respect to the Company under
this Agreement and any applicable Reconstitution Agreement, and shall entitle
the Purchaser, any Master Servicer or any Depositor, as applicable, in its sole
discretion to terminate the rights and obligations of the Company under this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any compensation
to the Company; provided that to the extent that any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the Company
as servicer, such provision shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to
terminate the rights and obligations of the Company pursuant to this
subparagraph if a failure of the Company to identify a Subcontractor
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB was attributable solely to the role or functions of such
Subcontractor with respect to mortgage loans other than the Mortgage Loans.
c. The Company shall promptly reimburse the Purchaser (or any
designee of the Purchaser), any Master Servicer and any Depositor, as
applicable, for all reasonable expenses incurred by the Purchaser (or such
designee) or such Depositor, as such are incurred, in connection with the
termination of the Company as servicer and the transfer of servicing of the
Mortgage Loans to a successor servicer. The provisions of this paragraph shall
not limit whatever rights the Purchaser or any Depositor may have under other
provisions of this Agreement and/or any applicable Reconstitution Agreement or
otherwise, whether in equity or at law, such as an action for damages, specific
performance or injunctive relief.
15. Article IX (Removal of Mortgage Loans From Agreement) is hereby
deleted in its entirety and replaced as follows:
Section 9.01 Removal of Mortgage Loans from Inclusion Under this
Agreement.
The Purchaser and the Company agree that with respect to some or all
of the Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers, Agency Sales or Securitization Transactions, retaining the Company as
the servicer thereof or subservicer if a master servicer is employed, or as
applicable the "seller/servicer." In the event that any Mortgage Loan
transferred pursuant to this Section 9.01 is rejected by the transferee, the
-11-
Company shall continue to service such rejected Mortgage Loan on behalf of the
Purchaser in accordance with the terms and provisions of this Agreement.
The Company shall cooperate with the Purchaser in connection with each
Whole Loan Transfer, Agency Sale or Securitization Transaction in accordance
with this Section 9.01; provided that no such Whole Loan Transfer, Agency Sale
or Securitization Transaction shall create a greater obligation or cost on the
part of the Company than otherwise set forth in this Agreement. In connection
therewith:
a. the Company shall make all representations and warranties with
respect to the Mortgage Loans as of the Closing Date and with respect to the
Company itself as of the closing date of each Whole Loan Transfer, Agency Sale
or Securitization Transaction;
b. the Company shall negotiate in good faith and execute any
seller/servicer agreements required by the shelf registrant to effectuate the
foregoing;
c. the Company shall make representations and warranties (1) that
the Company has serviced the Mortgage Loans in accordance with the terms of this
Agreement, provided accurate statements to the Purchaser pursuant to Section
5.02 of this Agreement, and otherwise complied with all covenants and
obligations hereunder and, (2) that the Company has taken no action nor omitted
to take any required action the omission of which would have the effect of
impairing any mortgage insurance or guarantee on the Mortgage Loans;
d. the Company shall:
(i) provide such additional representations, warranties,
covenants, opinions of counsel or certificates of officers of the Company as are
reasonably believed necessary by the trustee, any rating agency or the
Purchaser, as the case may be, in connection with such Whole Loan Transfers or
Agency Sales. The Purchaser shall pay all third party costs associated with the
preparation of such information;
(ii) execute any seller/servicer agreements required within
a reasonable period of time after receipt of such seller/servicer agreements
which time shall be sufficient for the Company and the Company's counsel to
review such seller/servicer agreements. Under this Agreement, the Company shall
retain a Servicing Fee for each Mortgage Loan at a Servicing Fee Rate; and
(iii) at any time as required by any Rating Agency, provide
such additional documents from the related Retained Mortgage File to the
Custodian as may be required by such Rating Agency.
e. in connection with any Securitization Transaction, the Company
shall (1) within five (5) Business Days following request by the Purchaser or
any Depositor, provide to the Purchaser and such Depositor (or, as applicable,
cause each Third-Party Originator and each Subservicer to provide), in writing
and in form and substance reasonably satisfactory to the Purchaser and such
Depositor, the information and materials specified in paragraphs (i), (ii),
(iii) and (vii) of this subsection (e), and (2) as promptly as practicable
following notice to or discovery by the Company, provide to the Purchaser and
any Depositor (in writing and in form
-12-
and substance reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (iv) of this subsection (e).
(i) If so requested by the Purchaser or any Depositor, the
Company shall provide such information regarding (1) the Company, as originator
of the Mortgage Loans (including as an acquirer of Mortgage Loans from a
Qualified Correspondent), or (2) each Third-Party Originator, and (3) as
applicable, each Subservicer, as is requested for the purpose of compliance with
Items 1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such information
shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination
program and how long the originator has been engaged in originating residential
mortgage loans, which description shall include a discussion of the originator's
experience in originating mortgage loans of a similar type as the Mortgage
Loans; information regarding the size and composition of the originator's
origination portfolio; and information that may be material, in the good faith
judgment of the Purchaser or any Depositor, to an analysis of the performance of
the Mortgage Loans, including the originators' credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage Loans and such
other information as the Purchaser or any Depositor may reasonably request for
the purpose of compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the Company, each
Third-Party Originator and each Subservicer; and
(D) a description of any affiliation or relationship
(of a type described in Item 1119 of Regulation AB) between the Company, each
Third-Party Originator, each Subservicer and any of the following parties to a
Securitization Transaction, as such parties are identified to the Company by the
Purchaser or any Depositor in writing in advance of a Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(ii) If so requested by the Purchaser or any Depositor, the
Company shall provide (or, as applicable, cause each Third-Party Originator to
provide) Static Pool Information with respect to the mortgage loans (of a
similar type as the Mortgage Loans, as reasonably identified by the Purchaser as
provided below) originated by (1) the Company, if the Company is an originator
of Mortgage Loans (including as an acquirer of Mortgage Loans from
-13-
a Qualified Correspondent), and/or (2) each Third-Party Originator. Such Static
Pool Information shall be prepared by the Company (or Third-Party Originator) on
the basis of its reasonable, good faith interpretation of the requirements of
Item 1105(a)(1)-(3) of Regulation AB. To the extent that there is reasonably
available to the Company (or Third-Party Originator) Static Pool Information
with respect to more than one mortgage loan type, the Purchaser or any Depositor
shall be entitled to specify whether some or all of such information shall be
provided pursuant to this paragraph. The content of such Static Pool Information
may be in the form customarily provided by the Company, and need not be
customized for the Purchaser or any Depositor. Such Static Pool Information for
each vintage origination year or prior securitized pool, as applicable, shall be
presented in increments no less frequently than quarterly over the life of the
mortgage loans included in the vintage origination year or prior securitized
pool. The most recent periodic increment must be as of a date no later than 135
days prior to the date of the prospectus or other offering document in which the
Static Pool Information is to be included or incorporated by reference. The
Static Pool Information shall be provided in an electronic format that provides
a permanent record of the information provided, such as a portable document
format (pdf) file, or other such electronic format reasonably required by the
Purchaser or the Depositor, as applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Company shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same format
in which Static Pool Information was previously provided to such party by the
Company.
If so requested by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to the
Company's or Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such statements and letters shall be addressed to and be for
the benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction. Any such statement or letter may take the form
of a standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(iii) If so requested by the Purchaser or any Depositor, the
Company shall provide such information regarding the Company, as servicer of the
Mortgage Loans, and each Subservicer (each of the Company and each Subservicer,
for purposes of this paragraph, a "Servicer"), as is requested for the purpose
of compliance with Items 1108, 1117 and 1119 of Regulation AB. Such information
shall include, at a minimum:
-14-
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been
servicing residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more detailed discussion
of the Servicer's experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution Agreements; information
regarding the size, composition and growth of the Servicer's portfolio of
residential mortgage loans of a type similar to the Mortgage Loans and
information on factors related to the Servicer that may be material, in the good
faith judgment of the Purchaser or any Depositor, to any analysis of the
servicing of the Mortgage Loans or the related asset-backed securities, as
applicable, including, without limitation:
(1) whether any prior securitizations of mortgage
loans of a type similar to the Mortgage Loans involving the
Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing
during the three-year period immediately preceding the
related Securitization Transaction;
(2) the extent of outsourcing the Servicer
utilizes;
(3) whether there has been previous disclosure of
material noncompliance with the applicable Servicing
Criteria with respect to other securitizations of
residential mortgage loans involving the Servicer as a
servicer during the three-year period immediately preceding
the related Securitization Transaction;
(4) whether the Servicer has been terminated as
servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a
servicing performance test or trigger; and
(5) such other information as the Purchaser or any
Depositor may reasonably request for the purpose of
compliance with Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during the
three-year period immediately preceding the related Securitization Transaction
to the Servicer's policies or procedures with respect to the servicing function
it will perform under this Agreement and any Reconstitution Agreements for
mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial
condition, to the extent that there is a material risk that an adverse financial
event or circumstance involving the Servicer could have a material adverse
effect on the performance by the Company of its servicing obligations under this
Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the Servicer
on the Mortgage Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately preceding the
related Securitization Transaction, which may be limited to a statement by an
authorized officer of the Servicer to the
-15-
effect that the Servicer has made all advances required to be made on
residential mortgage loans serviced by it during such period, or, if such
statement would not be accurate, information regarding the percentage and type
of advances not made as required, and the reasons for such failure to advance;
(F) a description of the Servicer's processes and
procedures designed to address any special or unique factors involved in
servicing loans of a similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for
handling delinquencies, losses, bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of defaulted mortgage loans or
workouts;
(H) information as to how the Servicer defines or
determines delinquencies and charge-offs, including the effect of any grace
period, re-aging, restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience;
(I) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the Servicer; and
(J) a description of any affiliation or relationship
between the Servicer and any of the following parties to a Securitization
Transaction, as such parties are identified to the Servicer by the Purchaser or
any Depositor in writing in advance of a Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(iv) For the purpose of satisfying the reporting obligation
under the Exchange Act with respect to any class of asset-backed securities, the
Company shall (or shall cause each Subservicer and Third-Party Originator to)
(1) provide prompt notice to the Purchaser, any Master Servicer and any
Depositor in writing of (A) any material litigation or governmental proceedings
involving the Company, any Subservicer or any Third-Party Originator, (B) any
affiliations or relationships that develop following the closing date of a
Securitization Transaction between the Company, any Subservicer or any
Third-Party Originator and any of the parties specified in Section 9.01(e)(i)(D)
(and any other parties identified in writing by the requesting party) with
respect to such Securitization Transaction, (C) any Event of Default under the
terms of this Agreement or any Reconstitution Agreement, (D) any merger,
consolidation or sale of substantially all of the assets of the Company, and (E)
the Company's entry into an agreement with a Subservicer to perform or assist in
the performance of any of the
-16-
Company's obligations under this Agreement or any Reconstitution Agreement and
(2) provide to the Purchaser and any Depositor a description of such
proceedings, affiliations or relationships.
(v) As a condition to the succession to the Company or any
Subservicer as servicer or Subservicer under this Agreement or any
Reconstitution Agreement by any Person (i) into which the Company or such
Subservicer may be merged or consolidated, or (ii) which may be appointed as a
successor to the Company or any Subservicer, the Company shall provide to the
Purchaser and any Depositor, at least fifteen (15) calendar days prior to the
effective date of such succession or appointment, (x) written notice to the
Purchaser and any Depositor of such succession or appointment and (y) in writing
and in form and substance reasonably satisfactory to the Purchaser and such
Depositor, all information reasonably requested by the Purchaser or any
Depositor in order to comply with is reporting obligation under Item 6.02 of
Form 8-K with respect to any class of asset-backed securities.
(vi) (a) The Company shall be deemed to represent to the
Purchaser, to any Master Servicer and to any Depositor, as of the date on which
information is first provided to the Purchaser, any Master Servicer or any
Depositor under this Section 9.01(e) that, except as disclosed in writing to the
Purchaser, such Master Servicer or such Depositor prior to such date: (1) the
Company is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Company; (2) the Company
has not been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; (3) no material noncompliance with the
applicable Servicing Criteria with respect to other securitizations of
residential mortgage loans involving the Company as servicer has been disclosed
or reported by the Company; (4) no material changes to the Company's policies or
procedures with respect to the servicing function it will perform under this
Agreement and any Reconstitution Agreement for mortgage loans of a type similar
to the Mortgage Loans have occurred during the three-year period immediately
preceding the related Securitization Transaction; (5) there are no aspects of
the Company's financial condition that could have a material adverse effect on
the performance by the Company of its servicing obligations under this Agreement
or any Reconstitution Agreement; (6) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Company, any
Subservicer or any Third-Party Originator; and (7) there are no affiliations,
relationships or transactions relating to the Company, any Subservicer or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(b) If so requested by the Purchaser, any Master
Servicer or any Depositor on any date following the date on which information is
first provided to the Purchaser, any Master Servicer or any Depositor under this
Section 9.01(e), the Company shall, within five (5) Business Days following such
request, confirm in writing the accuracy of the representations and warranties
set forth in sub clause (A) above or, if any such representation and warranty is
not accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting party.
-17-
(vii) In addition to such information as the Company, as
servicer, is obligated to provide pursuant to other provisions of this
Agreement, not later than ten (10) days prior to the deadline for the filing of
any distribution report on Form 10-D in respect of any Securitization
Transaction that includes any of the Mortgage Loans serviced by the Company or
any Subservicer, the Company or such Subservicer, as applicable, shall, to the
extent the Company or such Subservicer has knowledge, provide to the party
responsible for filing such report (including, if applicable, the Master
Servicer) notice of the occurrence of any of the following events along with all
information, data, and materials related thereto as may be required to be
included in the related distribution report on Form 10-D (as specified in the
provisions of Regulation AB referenced below):
(A) any material modifications, extensions or waivers
of pool asset terms, fees, penalties or payments during the distribution period
or that have cumulatively become material over time (Item 1121(a)(11) of
Regulation AB);
(B) material breaches of pool asset representations or
warranties or transaction covenants (Item 1121(a)(12) of Regulation AB); and
(C) information regarding new asset-backed securities
issuances backed by the same pool assets, any pool asset changes (such as,
additions, substitutions or repurchases), and any material changes in
origination, underwriting or other criteria for acquisition or selection of pool
assets (Item 1121(a)(14) of Regulation AB).
(viii) The Company shall provide to the Purchaser, any
Master Servicer and any Depositor, evidence of the authorization of the person
signing any certification or statement, copies or other evidence of Fidelity
Bond Insurance and Errors and Omission Insurance policy, financial information
and reports, and such other information related to the Company or any
Subservicer or the Company or such Subservicer's performance hereunder.
f. The Company shall indemnify the Purchaser, each affiliate of
the Purchaser, and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each Person
(including, but not limited to, any Master Service, if applicable) responsible
for the preparation, execution or filing of any report required to be filed with
the Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction; each broker dealer
acting as underwriter, placement agent or initial purchaser, each Person who
controls any of such parties or the Depositor (within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act); and the respective
present and former directors, officers, employees, agents and affiliates of each
of the foregoing and of the Depositor (each, an "Indemnified Party"), and shall
hold each of them harmless from and against any claims, losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them may sustain
arising out of or based upon:
(i) (a) any untrue statement of a material fact contained or
alleged to be contained in any information, report, data, certification,
accountants' letter or other material provided under Sections 4.25, 6.04, 6.06,
9.01(d) and (e) by or on behalf of the Company, or provided under Sections 4.25,
6.04, 6.06, 9.01(d) and (e) by or on behalf of any
-18-
Subservicer, Subcontractor or Third-Party Originator (collectively, the "Company
Information"), or (B) the omission or alleged omission to state in the Company
Information a material fact required to be stated in the Company Information or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be construed solely by
reference to the Company Information and not to any other information
communicated in connection with a sale or purchase of securities, without regard
to whether the Company Information or any portion thereof is presented together
with or separately from such other information;
(ii) any breach by the Company of its obligations under this
Section 9.01(e), including particularly any failure by the Company, any
Subservicer, any Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or other material when
and as required under Sections 4.25, 6.04, 6.06, 9.01(d) and (e), including any
failure by the Company to identify any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB;
(iii) any breach by the Company of a representation or
warranty set forth in Section 9.01(e)(vi)(A) or in a writing furnished pursuant
to Section 9.01(e)(vi)(B) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is not cured
by such closing date, or any breach by the Company of a representation or
warranty in a writing furnished pursuant to Section 9.01(e)(vi)(B) to the extent
made as of a date subsequent to such closing date; or
(iv) the negligence, bad faith or willful misconduct of the
Company in connection with its performance under Sections 4.25, 6.04, 6.06 or
9.01(e).
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the Company agrees that
it shall contribute to the amount paid or payable by such Indemnified Party as a
result of any claims, losses, damages or liabilities incurred by such
Indemnified Party in such proportion as is appropriate to reflect the relative
fault of such Indemnified Party on the one hand and the Company on the other.
In the case of any failure of performance described in sub-clause (ii)
of this Section 9.01(f), the Company shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Company,
any Subservicer, any Subcontractor or any Third-Party Originator.
This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
g. The Purchaser and each Person who controls the Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act) shall indemnify the Company, each affiliate of the Company, each
Person who controls any of such parties or the
-19-
Company (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act) and the respective present and former directors, officers,
employees and agents of each of the foregoing and of the Company, and shall hold
each of them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain arising out of or based
upon:
(i) any untrue statement of a material fact contained or
alleged to be contained in any offering materials related to a Securitization
Transaction, including without limitation the registration statement,
prospectus, prospectus supplement, any private placement memorandum, and free
writing prospectus, any ABS informational and computational materials, any
offering circular, any computational materials, and any amendments or
supplements to the foregoing (collectively, the "Securitization Materials"); or
(ii) the omission or alleged omission to state in the
Securitization Materials a material fact required to be stated in the
Securitization Materials or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is other than a statement or omission
arising out of, resulting from, or based upon the Company Information.
This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
h. the Company shall cooperate with the Purchaser in servicing
the Mortgage Loans in accordance with the usual and customary requirements of
any credit enhancement, risk management and other service providers and shall
otherwise cooperate with the Purchaser in connection with such third party
service providers and the provision of third party services relating to a
Securitization Transaction; provided, however, that such requirements are
reasonably acceptable to the Company and pose no greater risk, obligation or
expense to the Company than otherwise set forth in this Agreement. Any
additional costs and/or expenses will be paid by the requesting party.
The Purchaser and the Company acknowledge and agree that the purpose
of Section 9.01(e) is to facilitate compliance by the Purchaser and any
Depositor with the provisions of Regulation AB and related rules and regulations
of the Commission. Although Regulation AB is applicable by its terms only to
offerings of asset-backed securities that are registered under the Securities
Act, the Company acknowledges that investors in privately offered securities may
require that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB also apply to comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure
-20-
comparable to that required under the Securities Act). The Company acknowledges
that interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Purchaser,
any Master Servicer or any Depositor in good faith for delivery of information
under these provisions on the basis of evolving interpretations of Regulation
AB. In connection with any Securitization Transaction, the Company shall
cooperate fully with the Purchaser and any Master Servicer to deliver to the
Purchaser (including any of its assignees or designees), any Master Servicer and
any Depositor, any and all statements, reports, certifications, records and any
other information necessary in the good faith determination of the Purchaser,
the Master Servicer or any Depositor to permit the Purchaser, such Master
Servicer or such Depositor to comply with the provisions of Regulation AB,
together with such disclosures relating to the Company, any Subservicer, any
Third-Party Originator and the Mortgage Loans, or the servicing of the Mortgage
Loans, reasonably believed by the Purchaser or any Depositor to be necessary in
order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Company by providing timely notice of requests for
information under this Article IX and by reasonably limiting such requests to
information necessary, in the Purchaser's reasonable judgment, to comply with
Regulation AB.
In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to the Reconstitution Date the Company shall
prepare an Assignment of Mortgage in blank for each Mortgage Loan that is a part
of a Whole Loan Transfer or Agency Sale or prepare an Assignment of Mortgage in
blank or to the trustee from the Company acceptable to the trustee for each
Mortgage Loan that is part of a Securitization Transaction. The Purchaser shall
pay all preparation and recording costs associated therewith if the Assignments
of Mortgage have been previously prepared and recorded in Purchaser's name. The
Company shall execute each Assignment of Mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
trustee upon the Company's receipt thereof. Additionally, the Company shall
prepare and execute, at the direction of the Purchaser, any note endorsements in
connection with any and all seller/servicer agreements. If required at any time
by a Rating Agency, Purchaser or successor purchaser in connection with any
Whole Loan Transfer, Agency Sale or Securitization Transaction, the Company
shall deliver such additional document from its Retained Mortgage File within
ten (10) days to the Custodian, successor purchaser or other designee of the
Purchaser as said Rating Agency, Purchaser or successor purchaser may require.
All Mortgage Loans (i) not sold or transferred pursuant to Whole Loan
Transfers, Agency Sales or Securitization Transactions or (ii) that are subject
to a Securitization for which the related trust is terminated for any reason,
shall remain subject to this Agreement and shall continue to be serviced in
accordance with the terms of this Agreement and with respect thereto this
Agreement shall remain in full force and effect.
16. Section 12.01 (Successor to Company) is hereby amended by:
-21-
a. replacing the words "Prior to" with the word "Upon" in the
first line of the first paragraph thereto;
b. adding the phrase ", in accordance with the Pooling and
Servicing Agreement," after the word "shall" in the second line of the first
paragraph thereto; and
c. adding the following sentence immediately after the first
sentence of the first paragraph:
Any successor to the Company shall be subject to the approval of the
Master Servicer and each Rating Agency, as evidenced by a letter from
such Rating Agency delivered to the Trustee that the transfer of
servicing will not result in a qualification, withdrawal or downgrade
of the then-current rating of any of the Certificates.
d. adding the following paragraph after the fourth paragraph
thereof:
Except as otherwise provided in this Agreement, all reasonable costs
and expenses incurred in connection with any transfer of servicing due
to an Event of Default under Section 10.01, including, without
limitation, the costs and expenses of the Master Servicer or any other
Person in appointing a successor servicer, or of the Master Servicer
in assuming the responsibilities of the Company hereunder, or of
transferring the Mortgage Files and the other necessary data,
including the completion, correction or manipulation of such servicing
data as may be required to correct any errors or insufficiencies in
the servicing data, to the successor servicer shall be paid by the
terminated or resigning Company from its own funds without
reimbursement.
17. New Section 12.11 (Intended Third Party Beneficiaries) is added to
the Servicing Agreement to read as follows:
Section 12.11. Intended Third Party Beneficiaries.
Notwithstanding any provision herein to the contrary, the parties to
this Agreement agree that it is appropriate, in furtherance of the
intent of such parties as set forth herein, that the Trustee, on
behalf of the Trust, receive the benefit of the provisions of this
Agreement as intended third party beneficiary of this Agreement to the
extent of such provisions. The Company shall have the same obligations
to the Trustee as if it were a party to this Agreement, and the
Trustee, on behalf of the Trust, shall have the same rights and
remedies to enforce the provisions of this Agreement as if it were a
party to this Agreement. The Company shall only take direction from
the Master Servicer (if direction by the Master Servicer is required
under this Agreement) unless otherwise directed by this Agreement.
Notwithstanding the foregoing, all rights and obligations of the
Master Servicer and the Trustee hereunder (other
-22-
than the right to indemnification and the indemnification obligations)
shall terminate upon termination of the Trust pursuant to the Pooling
and Servicing Agreement.
-23-
EXHIBIT B
Master Servicing Agreement
-24-
EXHIBIT C
Assignment and Assumption Agreement
-25-
SCHEDULE I
Mortgage Loan Schedule
(delivered to the Trustee in electronic format)
Execution Copy
5/26/06
XXXXXX BROTHERS BANK, FSB
PURCHASER
AND
XXXXX FARGO BANK, N.A.
COMPANY
----------
MASTER SELLER'S WARRANTIES AND SERVICING AGREEMENT
DATED AS OF MAY 1, 2006
----------
FIXED RATE AND ADJUSTABLE RATE PRIME AND SUBPRIME MORTGAGE LOANS
TABLE OF CONTENTS
ARTICLE I.................................................................. 1
DEFINITIONS................................................................ 1
ARTICLE II................................................................. 15
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS
AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS.................... 15
ARTICLE III................................................................ 19
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH......................... 19
ARTICLE IV................................................................. 40
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............................. 40
ARTICLE V.................................................................. 59
PAYMENTS TO PURCHASER...................................................... 59
ARTICLE VI................................................................. 60
GENERAL SERVICING PROCEDURES............................................... 60
ARTICLE VII................................................................ 65
COMPANY TO COOPERATE....................................................... 65
ARTICLE VIII............................................................... 66
THE COMPANY................................................................ 66
ARTICLE IX................................................................. 68
i
REMOVAL OF MORTGAGE LOANS FROM AGREEMENT................................... 68
ARTICLE X.................................................................. 78
DEFAULT.................................................................... 78
ARTICLE XI................................................................. 80
TERMINATION................................................................ 80
MISCELLANEOUS PROVISIONS................................................... 82
EXHIBITS
Exhibit A Form of Assignment and Conveyance Agreement
Exhibit B Custodial Agreement
Exhibit C Contents of Custodial Mortgage File, Retained Mortgage File and
Servicing File
Exhibit D Data File
Exhibit E Underwriting Guidelines
Exhibit F Custodial Account Certifications
Exhibit G Escrow Account Certifications
Exhibit H Servicing Criteria
Exhibit I Sarbanes Certification
Exhibit J Form of Assignment, Assumption and Recognition Agreement
ii
This is a Master Seller's Warranties and Servicing Agreement for fixed rate
and adjustable rate residential first and second lien mortgage loans, dated and
effective as of May 1, 2006, and is executed between Xxxxxx Brothers Bank, FSB,
as purchaser (the "Purchaser"), and Xxxxx Fargo Bank, N.A., as seller and
servicer (the "Company").
WITNESSETH
WHEREAS, the Purchaser has agreed to purchase from the Company and the
Company has agreed to sell to the Purchaser from time to time (each a
"Transaction") on a servicing retained basis certain mortgage loans (the
"Mortgage Loans") which shall be delivered as whole loans (each a "Loan
Package") on various dated (each a "Closing Date") as provided for in certain
Assignment and Conveyance Agreements by and between the Purchaser and the
Company as executed in conjunction with each Transaction;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the related Mortgage Loan
Schedule; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the conveyance, servicing and control of the
Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the Purchaser and the Company agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the content
otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as the Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located.
Adjustable Rate Mortgage Loan: A Mortgage Loan that contains a provision
pursuant to which the Mortgage Interest Rate is adjusted periodically.
1
Adjustment Date: As to each Adjustable Rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.
Agency/Agencies: Xxxxxx Xxx, Xxxxxxx Mac or GNMA, or any of them as
applicable.
Agency Sale: Any sale or transfer of some or all of the Mortgage Loans by
the Purchaser to an Agency which sale or transfer is not a Securitization
Transaction or Whole Loan Transfer.
Agreement: This Master Seller's Warranties and Servicing Agreement and all
exhibits hereto, amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the
value set forth on the appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgaged Property, or (ii)
the purchase price paid for the Mortgaged Property; provided, however, that in
the case of a refinanced Mortgage Loan, such value shall be based solely on the
appraisal made in connection with the origination of such Mortgage Loan.
Assignment and Conveyance Agreement: The agreement substantially in the
form of Exhibit A attached hereto.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser, or if the related Mortgage has been
recorded in the name of MERS or its designee, such actions as are necessary to
cause the Purchaser to be shown as the owner of the related Mortgage on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS.
Assignment of Mortgage Note and Pledge Agreement: With respect to a
Cooperative Loan, an assignment of the Mortgage Note and Pledge Agreement.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Apartment is located to effect the
assignment of such Proprietary Lease.
Balloon Loan: A Mortgage Loan for which the Monthly Payments will not fully
amortize the loan by the end of the term, at which time the balance of the
principal is due in a lump sum.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in the states where the parties
are located, are authorized or obligated by law or executive order to be closed.
2
Buydown Agreement: An agreement between the Company and a Mortgagor, or an
agreement among the Company, a Mortgagor and a seller of a Mortgaged Property or
a third party with respect to a Mortgage Loan which provides for the application
of Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, any amount
contributed by the seller of a Mortgaged Property subject to a Buydown Mortgage
Loan, the buyer of such property, the Company or any other source, plus interest
earned thereon, in order to enable the Mortgagor to reduce the payments required
to be made from the Mortgagor's funds in the early years of a Mortgage Loan.
Buydown Mortgage Loan: Any Mortgage Loan in respect of which, pursuant to a
Buydown Agreement, (i) the Mortgagor pays less than the full monthly payments
specified in the Mortgage Note for a specified period, and (ii) the difference
between the payments required under such Buydown Agreement and the Mortgage Note
is provided from Buydown Funds.
Buydown Period: The period of time when a Buydown Agreement is in effect
with respect to a related Buydown Mortgage Loan.
Closing Date: The date or dates, set forth in the related Commitment
Letter, on which from time to time the Purchaser shall purchase and the company
shall sell the Mortgage Loans listed on the respective Mortgage Loan Schedule
for each Transaction.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Combined Loan-to-Value Ratio or CLTV: As to any Second Lien Mortgage Loan
at any date of determination, the ratio on such date of the principal balance of
such Mortgage Loan, plus the principal balance of any Superior Lien, to the
Appraised Value of the related Mortgaged Property.
Commission: The United States Securities and Exchange Commission.
Commitment Letter: The commitment letter between the Company and the
Purchaser which sets forth, among other things, the Purchase Price for certain
Mortgage Loans described therein to be sold by the Company and purchased by the
Purchaser on the Closing Date set forth therein.
Company: Xxxxx Fargo Bank, N.A., or its successor in interest or assigns,
or any successor to the Company under this Agreement appointed as herein
provided.
Company Information: As defined in Section 9.01(e)(i)(A).
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain
3
or condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Cooperative: The entity that holds title (fee or an acceptable leasehold
estate) to all of the real property that the related Project comprises,
including the land, separate dwelling units and all common areas.
Cooperative Apartment: The specific dwelling unit relating to a Cooperative
Loan.
Cooperative Lien Search: A search for (a) federal tax liens, mechanics'
liens, lis pendens, judgments of record or otherwise against (i) the
Cooperative, (ii) the seller of the Cooperative Apartment and (iii) the Company,
if the Cooperative Loan is a refinanced Mortgage Loan, (b) filings of financing
statements and (c) the deed of the Project into the Cooperative.
Cooperative Loan: A Mortgage Loan that is secured by Cooperative Shares and
a Proprietary Lease granting exclusive rights to occupy the related Cooperative
Apartment.
Cooperative Shares: The shares of stock issued by a Cooperative, owned by
the Mortgagor, and allocated to a Cooperative Apartment.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to the
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.6d, Appendix
E, as revised from time to time and in effect on each related Closing Date.
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.04.
Custodial Agreement: The agreement governing the retention of the originals
of each Mortgage Note, Assignment of Mortgage and other Mortgage Loan Documents,
if applicable, a form of which is annexed hereto as Exhibit B.
Custodial Mortgage File: With respect to each Mortgage Loan, the file
consisting of the Mortgage Loan Documents listed as items 1 through 5 of Exhibit
C attached hereto, which have been delivered to the Custodian as of the Closing
Date.
Custodian: The custodian under the Custodial Agreement, or its successor in
interest or assigns, or any successor to the Custodian under the Custodial
Agreement as provided therein.
Cut-off Date: With respect to each Transaction, the first day of the month
in which the Closing Date occurs.
Data File: The electronic data file prepared by the Company and delivered
to the Purchaser including the data fields set forth on Exhibit D with respect
to each Mortgage Loan, in relation to each Transaction.
4
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the Company
in accordance with the terms of this Agreement and which is, in the case of a
substitution pursuant to Section 3.03, replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Distressed Mortgage Loan: As of any Transfer Date, any Mortgage Loan that
was not in foreclosure, bankruptcy, actively participating in a repayment plan
or REO, but which is delinquent in payment for a period of ninety-one (91) days
or more, without giving effect to any grace period permitted by the related
Mortgage or Mortgage Note. Notwithstanding the prior sentence, any Mortgage Loan
being referred to foreclosure as of the Notice Date or in the month of the
Transfer Date shall be considered a Distressed Mortgage Loan. No Mortgage Loan
shall be considered delinquent for the purpose of this definition by virtue of
the related Mortgagor having made payment to a prior servicer.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing on
the second (2nd) day of the month preceding the month of the Remittance Date and
ending on the first (1st) day of the month of the Remittance Date.
Eligible Deposit Account: An account that is maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution.
Eligible Institution: Any of the following:
(i) an institution whose:
(A) commercial paper, short-term debt obligations, or other
short-term deposits are rated at least "A-1+" or long-term
unsecured debt obligations are rated at least "AA-" by S&P,
if the amounts on deposit are to be held in the account for
no more than 365 days; or
(B) commercial paper, short-term debt obligations, demand
deposits, or other short-term deposits are rated at least
"A-2" by S&P, if the amounts on deposit are to be held in
the account for no more than thirty (30) days and are not
intended to be used as credit enhancement. Upon the loss of
the required rating set forth in this clause (ii), the
accounts shall be transferred immediately to accounts which
have the required rating. Furthermore, commingling by the
Servicer is acceptable at the A-2 rating level if
5
the Company is a bank, thrift, or depository and provided
the Company has the capability to immediately segregate
funds and commence remittance to an Eligible Deposit Account
upon a downgrade; or
(ii) the corporate trust department of a federal depository
institution or state-chartered depository institution subject to
regulations regarding fiduciary funds on deposit similar to Title
12 of the U.S. Code of Federal Regulation Section 9.10(b), which,
in either case, has corporate trust powers and is acting in its
fiduciary capacity.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: The Federal National Mortgage Association, or any successor
thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Company pursuant to
Section 4.12.
First Lien: With respect to each Mortgaged Property, the lien on the
mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a first lien on the Mortgaged Property.
First Lien Mortgage Loan: A Mortgage Loan secured by a First Lien on the
Mortgage Property.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note which is added to the
Index in order to
6
determine the related Mortgage Interest Rate, as set forth in the respective
Mortgage Loan Schedule.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan under
the Home Ownership and Equity Protection Act of 1994, (b) a "high cost home,"
"threshold," "covered," "high risk home," "predatory" or similar loan under any
other applicable state, federal or local law or (c) a Mortgage Loan categorized
as "High Cost" pursuant to the Standard & Poor's Glossary for File Format for
LEVELS(R) Version 5.6d, Appendix E, as revised from time to time and in effect
on each related Closing Date.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the related Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the interest thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the interest-only period set forth in the
related Mortgage Note.
Liquidation Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any First Lien Mortgage Loan,
the ratio of the original loan amount of the Mortgage Loan at its origination
(unless otherwise indicated) to the Appraised Value of the Mortgaged Property.
LPMI Policy: A PMI Policy for which the Company pays all premiums from its
own funds, without reimbursement.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage or
Assignment of Mortgage has been registered with MERS on the MERS System.
MERS System: The system of recording transfers of mortgages electronically
maintained by MERS.
MIN: The eighteen digit Mortgage Identification Number.
Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be
7
advanced by the Company pursuant to Section 5.03 on the Business Day immediately
preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and interest on
a Mortgage Loan or in the case of an Interest Only Mortgage Loan, payments of
(i) interest, or (ii) principal and interest, as applicable, on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note, or the Pledge
Agreement securing the Mortgage Note for a Cooperative Loan.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note.
Mortgage Loan: An individual mortgage loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the related Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Retained Mortgage File, the Custodial Mortgage
File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the documents
listed on Exhibit C attached hereto.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
related Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: With respect to each Transaction, a schedule of
Mortgage Loans setting forth the following information with respect to each
Mortgage Loan: (1) the Company's Mortgage Loan number; (2) the city state and
zip code of the Mortgaged Property; (3) a code indicating whether the Mortgaged
Property is a single family residence, two-family residence, three-family
residence, four-family residence, planned unit development, Cooperative
Apartment or condominium; (4) the current Mortgage Interest Rate; (5) the
current net Mortgage Interest Rate; (6) the current Monthly Payment; (7) the
original term to maturity; (8) the scheduled maturity date; (9) the principal
balance of the Mortgage Loan as of the Cut-off Date after deduction of payments
of principal due on or before the Cut-off Date whether or not collected; (10)
the Loan-to-Value Ratio; (11) a code indicating the mortgage guaranty insurance
company; (12) the Servicing Fee Rate; (13) the Gross Margin; (14) the next
Adjustment Date, and (15) code indicating whether the loan is subject to LPMI,
together with an electronic data
8
tape containing the fields described in Exhibit D. The Mortgage Loan Schedule
for each Loan Package shall be an exhibit to the respective Assignment and
Conveyance Agreement.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note, or with respect to a Cooperative Loan, the related
Cooperative Apartment.
Mortgagor: The obligor on a Mortgage Note.
Non-Assigned Letter of Credit: A Letter of Credit in which the named
beneficiary is the Company.
Notice Date: The first Business Day of each calendar month, as applicable.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President and certified by the Treasurer or the Secretary or one
of the Assistant Treasurers or Assistant Secretaries of the Company, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of
the Company, reasonably acceptable to the Purchaser.
Periodic Interest Rate Cap: As to each Adjustable Rate Mortgage Loan, the
maximum increase or decrease in the Mortgage Interest Rate on any Adjustment
Date pursuant to the terms of the Mortgage Note.
Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Pledge Agreement: With respect to a Cooperative Loan, the specific
agreement creating a first lien on and pledge of the Cooperative Shares and the
appurtenant Proprietary Lease.
Pledge Holder: With respect to a Pledged Asset Mortgage Loan, the entity
that holds the Pledge Account, manages the Pledge Account and provides the
Letter of Credit.
Pledge Instruments: With respect to a Cooperative Loan, the Stock Power,
the Assignment of the Proprietary Lease and the Assignment of the Mortgage Note
and Pledge Agreement.
Pledged Asset Mortgage Loan: A Mortgage Loan for which the Mortgagor has
pledged financial assets as partial collateral for the Mortgage Loan, in lieu of
a cash down payment.
9
PMI Policy: A policy of primary mortgage guaranty insurance evidenced by an
electronic form and certificate number issued by a Qualified Insurer, as
required by this Agreement with respect to certain Mortgage Loans. The premiums
on a PMI Policy may be paid by the Mortgagor or by the Company from its own
funds, without reimbursement. If the premiums are paid by the Company, the PMI
Policy is an LPMI Policy.
Prepayment Penalty: Payments calculated pursuant to the Underwriting
Guidelines and due on a Mortgage Loan as the result of a Principal Prepayment in
full of the Mortgage Loan, not otherwise due thereon in respect of principal or
interest, which are intended to be a disincentive to prepayment.
Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Principal Prepayment Period: The calendar month preceding the month in
which the related Remittance Date occurs.
Project: With respect to a Cooperative Loan, all real property owned by the
related Cooperative including the land, separate dwelling units and all common
areas.
Proprietary Lease: With respect to a Cooperative Loan, a lease on a
Cooperative Apartment evidencing the possessory interest of the Mortgagor in
such Cooperative Apartment.
Purchase Price: The purchase price for each Loan Package shall be the
percentage of par as stated in the related Commitment Letter, multiplied by the
aggregate scheduled principal balance, as of the related Cut-off Date, of the
Mortgage Loans in the related Loan Package, after application of scheduled
payments of principal for such related Loan Package due on or before the related
Cut-off Date whether or not collected. The purchase price for a Loan Package may
be adjusted as stated in the related Commitment Letter.
Purchaser: Xxxxxx Brothers Bank, FSB, or its successor in interest or any
successor or assignee to the Purchaser under this Agreement as herein provided.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Company and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Company, in accordance with underwriting
guidelines designated by the Company ("Designated Guidelines") or guidelines
that do not vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above and were
acquired by the
10
Company within one hundred eighty (180) days after origination; (iii) either (x)
the Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Company in origination of mortgage loans of the same type as the
Mortgage Loans for the Company's own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Company on a consistent basis for use by lenders in originating mortgage loans
to be purchased by the Company; and (iv) the Company employed, at the time such
Mortgage Loans were acquired by the Company, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by the
Company.
Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by Xxxxxx Mae or Xxxxxxx Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after deduction
of all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) have a Mortgage Loan Remittance Rate not less
than, and not more than two percent (2%) greater than the Mortgage Loan
Remittance Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan; (iv) comply with each representation and warranty set
forth in Sections 3.01 and 3.02; and (v) be of the same type as the Deleted
Mortgage Loan.
Rating Agency or Agencies: Any nationally recognized statistical rating
agency, or its successor, including Standard & Poor's Ratings Services, Xxxxx'x
Investors Service, Inc. and Fitch Ratings.
Recognition Agreement: An agreement whereby a Cooperative and a lender with
respect to a Cooperative Loan (i) acknowledge that such lender may make, or
intends to make, such Cooperative Loan, and (ii) make certain agreements with
respect to such Cooperative Loan.
Reconstitution: Any Securitization Transaction, Agency Sale or Whole Loan
Transfer.
Reconstitution Agreement: The agreement or agreements entered into by the
Company and the Purchaser and/or certain third parties on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with an Agency Sale, Whole Loan Transfer or
Securitization Transaction.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement may be removed from this Agreement and
reconstituted as part of an Agency
11
Sale, Securitization Transaction or Whole Loan Transfer pursuant to Section 9.01
hereof. The Reconstitution Date shall be such date which the Purchaser shall
designate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any month.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf of the
Purchaser through foreclosure or by deed in lieu of foreclosure, as described in
Section 4.16.
Repurchase Price: Unless agreed otherwise by the Purchaser and the Company,
a price equal to (i) the Stated Principal Balance of the Mortgage Loan plus (ii)
interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate
from the date on which interest has last been paid and distributed to the
Purchaser to the last day of the month in which the repurchase occurs, less
amounts received or advanced in respect of such repurchased Mortgage Loan which
are being held in the Custodial Account for distribution in the month of
repurchase.
Retained Mortgage File: With respect to each Mortgage Loan, the file
consisting of the Mortgage Loan Documents listed as items 6 through 9 of Exhibit
C attached hereto, which is retained by the Company for the benefit of the
Purchaser in a custodial capacity only.
Second Lien: With respect to a Mortgaged Property, a lien of the mortgage,
deed of trust or other instrument securing a mortgage note which creates a
second lien on the Mortgaged Property.
12
Second Lien Mortgage Loan: A Mortgage Loan secured by the lien on the
Mortgaged Property, subject to one prior lien on such Mortgaged Property
securing financing obtained by the related Mortgagor.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (a) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (b) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
Servicer: As defined in Section 9.01(d)(iii).
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses other than Monthly Advances (including reasonable attorney's
fees and disbursements) incurred in the performance by the Company of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of any REO Property, (d) compliance with the obligations under
Section 4.08 (excluding the Company's obligation to pay the premiums on LPMI
Policies) and (e) force placing flood insurance in accordance with Section 4.10.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
fee the Purchaser shall pay to the Company, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate
and (b) the outstanding principal balance of such Mortgage Loan. Such fee shall
be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
received. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 4.05) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The per annum percentage for each Mortgage Loan, as
indicated on the Mortgage Loan Schedule attached to the respective Assignment
and Conveyance Agreement.
Servicing File: With respect to each Mortgage Loan, the file consisting of
the Mortgage Loan Documents listed as items 10 through 25 of Exhibit C attached
hereto plus copies of all Mortgage Loan Documents contained in the Custodial
Mortgage File and the Retained Mortgage File, which are retained by the Company.
13
Servicing Officer: Any officer of the Company involved in or responsible
for the administration and servicing of the Mortgage Loans whose name appears on
a list of servicing officers furnished by the Company to the Purchaser upon
request, as such list may from time to time be amended.
Special Servicer: Such Person designated by the Purchaser to assume the
servicing of Distressed Mortgage Loans pursuant to Section 11.03.
Stated Principal Balance: As to each Mortgage Loan and as of any date of
determination, (i) the principal balance of the Mortgage Loan at the Cut-off
Date after giving effect to payments of principal due on or before such date,
whether or not received, minus (ii) all amounts previously distributed to the
Purchaser with respect to the related Mortgage Loan representing payments or
recoveries of principal or advances in lieu thereof.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Stock Certificate: With respect to a Cooperative Loan, a certificate
evidencing ownership of the Cooperative Shares issued by the Cooperative.
Stock Power: With respect to a Cooperative Loan, an assignment of the Stock
Certificate or an assignment of the Cooperative Shares issued by the
Cooperative.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Subsidy Account: An account maintained by the Company specifically to hold
all Subsidy Funds to be applied to individual Subsidy Loans.
Subsidy Funds: With respect to any Subsidy Loans, funds contributed by the
employer of a Mortgagor in order to reduce the payments required from the
Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest subsidy
agreement pursuant to which the monthly interest payments made by the related
Mortgagor will be less than the scheduled monthly interest payments on such
Mortgage Loan, with the resulting difference in
14
interest payments being provided by the employer of the Mortgagor. Each Subsidy
Loan will be identified as such in the related Data File.
Superior Lien: With respect to any Second Lien Mortgage Loan, any other
mortgage loan relating to the corresponding Mortgaged Property that creates a
lien on the Mortgaged Property that is senior to such Second Lien Mortgage Loan.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Company.
Time$aver(R) Mortgage Loan: A Mortgage Loan which has been refinanced
pursuant to a Company program that allows a rate/term refinance of an existing
Company serviced loan with minimal documentation.
Transfer Date: The 18th calendar day of each month, or, if such day is not
a Business Day, the next succeeding Business Day. Each transfer of servicing on
a Transfer Date shall be deemed to be effective immediately following the close
of business on such Transfer Date.
Transfer Notice: A certification by the Company listing the Distressed
Mortgage Loans expected to be the subject of a servicing transfer on the related
Transfer Date, based on information available as of the related Notice Date.
Underwriting Guidelines: The underwriting guidelines of the Company which
are applicable to the Mortgage Loans in each Loan Package. A copy of the
Underwriting Guidelines for each Loan Package shall be provided to the Purchaser
prior to the respective Closing Date.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a third party, which sale or transfer is not a
Securitization Transaction or Agency Sale.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF CUSTODIAL MORTGAGE FILES; BOOKS
AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Custodial Mortgage
Files; Maintenance of Retained Mortgage File and Servicing Files.
Pursuant to each Assignment and Conveyance Agreement, on the related
Closing Date, the Company, simultaneously with the payment of the Purchase Price
by the Purchaser, shall thereby sell, transfer, assign, set over and convey to
the Purchaser, without recourse, but subject to the terms of this Agreement and
the related Assignment and Conveyance Agreement, all the right, title and
interest of the Company in and to the Mortgage Loans listed on the respective
Mortgage Loan Schedule annexed to such Assignment and Conveyance Agreement,
together
15
with the Retained Mortgage File and Custodial Mortgage File and all rights and
obligations arising under the documents contained therein. The Company shall
deliver the related Mortgage Loan Schedule and the related Data File to the
Purchaser at least two (2) Business Days before the respective Closing Date.
Pursuant to Section 2.03, the Company shall deliver the Custodial Mortgage File
for each Mortgage Loan comprising the related Loan Package to the Custodian.
The contents of each Retained Mortgage File not delivered to the Custodian
are and shall be held in trust by the Company for the benefit of the Purchaser
as the owner thereof. Additionally and separate to the Retained Mortgage File,
the Company shall maintain a Servicing File, for the sole purpose of servicing
the related Mortgage Loans, consisting of a copy of the contents of the
Custodial Mortgage File and the Retained Mortgage File. The possession of each
Servicing File and Retained Mortgage File held by the Company is at the will of
the Purchaser and such retention and possession by the Company is in a custodial
capacity only. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the related Custodial Mortgage File,
Retained Mortgage File and Servicing File shall vest immediately in the
Purchaser, and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only in
such custodial capacity. The Company shall release its custody of the contents
of any Retained Mortgage File and Servicing File only in accordance with written
instructions from the Purchaser, unless such release is required as incidental
to the Company's servicing of the Mortgage Loans, in the case of the Servicing
File, or is in connection with a repurchase of any Mortgage Loan pursuant to
Section 3.03 or 6.02. All such costs associated with the release, transfer and
re-delivery to the Company shall be the responsibility of the Purchaser.
In addition, in connection with the assignment of any MERS Mortgage Loan,
the Company agrees that it will cause the MERS System to indicate that such
Mortgage Loan has been assigned by the Company to the Purchaser in accordance
with this Agreement by including (or deleting, in the case of a Mortgage Loan
repurchased in accordance with this Agreement) in such computer files the
information required by the MERS System to identify the Purchaser as the
beneficial owner of such Mortgage Loan.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
From and after the sale to the Purchaser of the Mortgage Loans in the
related Loan Package on each Closing Date, all rights arising out of the
Mortgage Loans, including, but not limited to, all funds received on or in
connection with the Mortgage Loans, shall be received and held by the Company in
trust for the benefit of the Purchaser as owner of the Mortgage Loans, and the
Company shall retain record title to the related Mortgages for the sole purpose
of facilitating the servicing and the supervision of the servicing of the
Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the Company's balance
sheet and other financial statements as a sale of assets by the Company. The
Company shall be responsible for maintaining, and shall maintain, a complete set
of books and records for each Mortgage Loan which shall be marked clearly to
reflect the ownership of each Mortgage Loan by the Purchaser.
16
In particular, the Company shall maintain in its possession, available for
inspection by the Purchaser, or its designee, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of Xxxxxx Xxx or Xxxxxxx Mac, including
but not limited to documentation as to the method used in determining the
applicability of the provisions of the Flood Disaster Protection Act of 1973, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and eligibility of any condominium project for approval by Xxxxxx Mae or Xxxxxxx
Mac and records of periodic inspections as required by Section 4.13. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Company
may be in the form of microfilm or microfiche or such other reliable means of
recreating original documents, including but not limited to, optical imagery
techniques so long as the Company complies with the requirements of the Xxxxxx
Mae or Xxxxxxx Mac Selling and Servicing Guide, as amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and shall
make available for inspection by any Purchaser or its designee the related
Retained Mortgage File and Servicing File during the time the Purchaser retains
ownership of such Mortgage Loan and thereafter in accordance with applicable
laws and regulations.
The Company shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Company shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms hereof. For the purposes of
this Agreement, the Company shall be under no obligation to deal with any Person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such Person as the owner of the Mortgage Loan. The Purchaser may,
subject to the terms of this Agreement, sell and transfer one or more of the
Mortgage Loans. The Purchaser also shall advise the Company of the transfer.
Upon receipt of notice of the transfer, the Company shall xxxx its books and
records to reflect the ownership of the Mortgage Loans of such assignee, and
shall release the previous Purchaser from its obligations hereunder with respect
to the Mortgage Loans sold or transferred. Such notification of a transfer shall
include a final loan schedule which shall be received by the Company no fewer
than five (5) Business Days before the last Business Day of the month. If such
notification is not received as specified above, the Company's duties to remit
and report as required by Section 5 shall begin with the next Due Period.
Section 2.03 Custodial Agreement; Delivery of Documents.
On each Closing Date with respect to each Mortgage Loan comprising the
related Loan Package, the Company shall have delivered to the Custodian those
Mortgage Loan Documents contained in the related Custodial Mortgage File as
required by this Agreement with respect to each Mortgage Loan.
The Custodian has certified its receipt of all such Mortgage Loan Documents
in each Custodial Mortgage File required to be delivered pursuant to this
Agreement, as evidenced by the trust receipt and initial certification of the
Custodian in the form annexed to the Custodial
17
Agreement. The Company shall be responsible for recording the initial
Assignments of Mortgage. The Purchaser will be responsible for the fees and
expenses of its Custodian.
Upon the occurrence of the events described in Section 9.01 and Section
11.02 of this Agreement or in the event the Company fails to allow the Purchaser
access to the Retained Mortgage File as required pursuant to Section 2.04 (each
such occurrence, a "Delivery Event"), the Company shall deliver to the Custodian
or any other party per written instructions from the Purchaser, the additional
documents from its Retained Mortgage File required to be delivered pursuant to
Section 9.01 herein within ten (10) Business Days. All of the provisions of this
Section 2.03 relating to a failure to deliver required documentation, delays in
such delivery and the delivery of defective documentation shall apply equally to
any obligation on the part of the Company to deliver documents which arises
after the Closing Date upon the occurrence of a Delivery Event.
The Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one (1) week of
their execution, provided, however, that the Company shall provide the Custodian
with a certified true copy of any such document submitted for recordation within
ten (10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty (60) days of its submission for recordation.
In the event the public recording office is delayed in returning any
original document, which the Company is required to deliver at any time to the
Custodian in accordance with the terms of the Custodial Agreement or which the
Company is required to maintain in the Retained Mortgage File, the Company shall
deliver to the Custodian within 180 days of its submission for recordation, a
copy of such document and an Officer's Certificate, which shall (i) identify the
recorded document; (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay by the public recording office, (iii)
state the amount of time generally required by the applicable recording office
to record and return a document submitted for recordation, and (iv) specify the
date the applicable recorded document will be delivered to the Custodian. The
Company will be required to deliver the document to the Custodian by the date
specified in (iv) above. An extension of the date specified in (iv) above may be
requested from the Purchaser, which consent shall not be unreasonably withheld.
In the event that new, replacement, substitute or additional Stock
Certificates are issued with respect to existing Cooperative Shares, the Company
immediately shall deliver to the Custodian the new Stock Certificates, together
with the related Stock Powers in blank. Such new Stock Certificates shall be
subject to the related Pledge Instruments and shall be subject to all of the
terms, covenants and conditions of this Agreement.
Section 2.04 Examination of Mortgage Loan Documents.
Prior to the related Closing Date, the Company shall deliver the Mortgage
Loan Documents included in the Custodial Mortgage File to the Custodian. The
Purchaser or a
18
designee may review such Mortgage Loan Documents to verify that the documents
required to be included in each Custodial Mortgage File are available. If a
Custodial Mortgage File is incomplete or defective or a Mortgage Loan does not
conform to the requirements of this Agreement and such omission or defects
cannot be cured prior to the Closing Date, the Mortgage Loan shall be deleted
from the Mortgage Loan Schedule. If deleted, the Mortgage Loan may be replaced,
up to one (1) Business Day prior to the Closing Date, by one or more substitute
Mortgage Loans which satisfy the criteria set forth in this Agreement.
The Company shall make the Retained Mortgage File available to the
Purchaser for examination at the Company's offices or such other location as
shall otherwise be agreed upon by the Purchaser and the Company. Such
examination may be made by the Purchaser at any time before or after such
Closing Date or by any prospective purchaser of the Mortgage Loans from the
Purchaser, at any time after the Closing Date upon prior written notice to the
Company. The fact that the Purchaser or any prospective purchaser of the
Mortgage Loans has conducted or has failed to conduct any partial or complete
examination of the Retained Mortgage File shall not affect the Purchaser's (or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided under this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company hereby represents and warrants to the Purchaser that, as of the
related Closing Date:
(a) Due Organization and Authority.
The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States and
has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the
type conducted by the Company, and in any event the Company is in
compliance with the laws of any such state to the extent necessary to
ensure the enforceability of the related Mortgage Loan and the
servicing of such Mortgage Loan in accordance with the terms of this
Agreement; the Company has the full power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by
the Company and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement evidences
the valid, binding and enforceable obligation of the Company; and all
19
requisite action has been taken by the Company to make this Agreement
valid and binding upon the Company in accordance with its terms;
(b) Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Company, who is in the
business of selling and servicing loans, and the transfer, assignment
and conveyance of the Mortgage Notes and the Mortgages by the Company
pursuant to this Agreement are not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction;
(c) No Conflicts.
Neither the execution and delivery of this Agreement, the acquisition
of the Mortgage Loans by the Company, the sale of the Mortgage Loans
to the Purchaser or the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement will conflict with or result in a breach of any of the
terms, articles of incorporation or by-laws or any legal restriction
or any agreement or instrument to which the Company is now a party or
by which it is bound, or constitute a default or result in the
violation of any law, rule, regulation, order, judgment or decree to
which the Company or its property is subject, or impair the ability of
the Purchaser to realize on the Mortgage Loans, or impair the value of
the Mortgage Loans;
(d) Ability to Service.
The Company is an approved seller/servicer of conventional residential
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, with the facilities,
procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans.
The Company is in good standing to sell mortgage loans to and service
mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, and no event has
occurred, including but not limited to a change in insurance coverage,
which would make the Company unable to comply with Xxxxxx Mae or
Xxxxxxx Mac eligibility requirements or which would require
notification to either Xxxxxx Mae or Xxxxxxx Mac;
(e) Reasonable Servicing Fee.
The Company acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by the Company, for accounting
and tax purposes, as compensation for the servicing and administration
of the Mortgage Loans pursuant to this Agreement;
(f) Ability to Perform.
20
The Company does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in
this Agreement. The Company is solvent and the sale of the Mortgage
Loans will not cause the Company to become insolvent. The sale of the
Mortgage Loans is not undertaken to hinder, delay or defraud any of
the Company's creditors;
(g) No Litigation Pending.
There is no action, suit, proceeding or investigation pending or
threatened against the Company which, either in any one instance or in
the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of the
Company, or in any material impairment of the right or ability of the
Company to carry on its business substantially as now conducted, or in
any material liability on the part of the Company, or which would draw
into question the validity of this Agreement or the Mortgage Loans or
of any action taken or to be contemplated herein, or which would be
likely to impair materially the ability of the Company to perform
under the terms of this Agreement;
(h) No Consent Required.
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Company of or compliance by the Company with
this Agreement or the sale of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the related Closing
Date;
(i) No Untrue Information.
Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any
untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading;
(j) Sale Treatment.
The Company has determined that the disposition of the Mortgage Loans
pursuant to this Agreement will be afforded sale treatment for
accounting and tax purposes;
(k) No Material Change.
There has been no material adverse change in the business, operations,
financial condition or assets of the Company since the date of the
Company's most recent financial statements;
21
(l) No Brokers' Fees.
The Company has not dealt with any broker, investment banker, agent or
other Person that may be entitled to any commission or compensation in
the connection with the sale of the Mortgage Loans;
(m) Fair Consideration.
The consideration received by the Company upon the sale of the
Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value of the Mortgage Loans;
(n) Low Income Borrowers.
The Company currently operates and actively participates in an
on-going business (i) to originate single family mortgage loans and/or
(ii) to make periodic purchases of mortgage loans from originators or
sellers, and/or (iii) to issue and/or purchase securities or bonds
supported by mortgage loans, a portion of which mortgage loans are
made to borrowers who are:
(A) low income families (families with incomes 80% or less of area
median income) living in low-income areas (a census tract or block
numbering area in which the median income does not exceed 80% of the
area median income); or
(B) very low income families (families with incomes 60% or less of
area median income); and
(o) MERS.
The Company is a member of MERS in good standing.
Section 3.02 Representations and Warranties Regarding Individual Mortgage Loans.
As to each Mortgage Loan, the Company hereby represents and warrants to the
Purchaser that as of the related Closing Date:
(a) Mortgage Loans as Described.
The information set forth in the respective Mortgage Loan Schedule and
the information contained on the respective Data File delivered to the
Purchaser is true and correct;
(b) Payments Current.
No payment required under any Mortgage Loan will be thirty (30) days
or more delinquent on the related Closing Date. No Mortgage Loan will
have been thirty
22
(30) days delinquent more than once during the twelve (12) months
preceding such Closing Date;
(c) No Outstanding Charges.
There are no defaults in complying with the terms of the Mortgages,
and all taxes, governmental assessments, insurance premiums, leasehold
payments, water, sewer and municipal charges, which previously became
due and owing have been paid, or an escrow of funds has been
established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and
payable. The Company has not advanced funds, or induced, or solicited
directly or indirectly, the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is later, to the day which precedes by one (1) month the Due
Date of the first installment of principal and interest;
(d) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the
interests of the Purchaser and which the Mortgage Note has been
delivered to the Custodian. The substance of any such waiver,
alteration or modification has been approved by the issuer of any
related PMI Policy and the title insurer, to the extent required by
the policy, and its terms are reflected on the related Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the issuer of
any related PMI Policy and the title insurer, to the extent required
by the policy, and which assumption agreement is part of the Custodial
Mortgage File delivered to the Custodian and the terms of which are
reflected in the respective Mortgage Loan Schedule;
(e) No Defenses.
The Mortgage Loan is not subject to any right of rescission, set-off,
counterclaim or defense, including without limitation the defense of
usury, nor will the operation of any of the terms of the Mortgage Note
or the Mortgage, or the exercise of any right thereunder, render
either the Mortgage Note or the Mortgage unenforceable, in whole or in
part, or subject to any right of rescission, set-off, counterclaim or
defense, including without limitation the defense of usury, and no
such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(f) No Satisfaction of Mortgage.
23
Neither the Mortgage nor the Mortgage Note has been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the respective lien of
the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation,
subordination or rescission;
(g) Validity of Mortgage Documents.
The Mortgage Note and the Mortgage and related documents are genuine,
and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms. All parties to the
Mortgage Note, the Mortgage and any other related document had legal
capacity to enter into the Mortgage Loan and to execute and deliver
the Mortgage Note, the Mortgage and any other related document, and
the Mortgage Note, the Mortgage and any other related document have
been duly and properly executed by such parties. The Company has
reviewed all of the documents constituting the Retained Mortgage File
and Custodial Mortgage File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set
forth herein;
With respect to each Cooperative Loan, the Mortgage Note, the
Mortgage, the Pledge Agreement, and related documents are genuine, and
each is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms. All parties to the Mortgage
Note, the Mortgage, the Pledge Agreement, the Proprietary Lease, the
Stock Power, Recognition Agreement and the Assignment of Proprietary
Lease had legal capacity to enter into the Mortgage Loan and to
execute and deliver such documents, and such documents have been duly
and properly executed by such parties;
(h) No Fraud.
All the documents executed in connection with the Mortgage Loan
including, but not limited to, the Mortgage Note and the Mortgage are
free of fraud and any misrepresentation, are signed by the persons
they purport to be signed by, and witnessed or, as appropriate,
notarized by the persons whose signatures appear as witnesses or
notaries, and each such document constitutes the valid and binding
legal obligation of the signatories and is enforceable in accordance
with its terms;
(i) Compliance with Applicable Laws.
Any and all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection and privacy, equal credit
opportunity, disclosure, or predatory and abusive lending laws
applicable to the Mortgage Loan have been complied with, and the
Company shall maintain in its possession, available for the
Purchaser's inspection, and shall deliver to the Purchaser upon
demand, evidence of compliance with all such requirements. The
consummation of the transactions
24
contemplated hereby will not violate any such laws or regulations. 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;
(j) Location and Type of Mortgaged Property.
The Mortgaged Property is located in the state identified in the
respective Mortgage Loan Schedule and consists of a contiguous parcel
of real property with a detached single family residence erected
thereon, or a two- to four-family dwelling, or a Cooperative
Apartment, or manufactured housing or an individual condominium unit
in a condominium project, or an individual unit in a planned unit
development or a townhouse and no residence or dwelling is a mobile
home. As of the respective appraisal date for each Mortgaged Property,
no portion of the Mortgaged Property was being used for commercial
purposes, except as allowed under the Underwriting Guidelines. If the
Mortgaged Property is a condominium unit or a planned unit development
(other than a de minimus planned unit development) such condominium or
planned unit development meets the requirements under the Underwriting
Guidelines;
(k) Valid First Lien.
Each First Lien Mortgage Loan is a valid, subsisting and enforceable
First Lien on the Mortgaged Property, including all buildings on the
Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or annexed
to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(1) the lien of current real property taxes and assessments not yet
due and payable;
(2) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of
recording 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 (i)
referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan and (ii) which do not adversely
affect the Appraised Value of the Mortgaged Property set forth in
such appraisal; and
(3) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security
intended to be
25
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 each First Lien Mortgage
Loan establishes and creates a valid, subsisting and enforceable First
Lien and first priority security interest on the property described
therein and the Company has full right to sell and assign the same to
the Purchaser;
(l) Full Disbursement of Proceeds.
The Mortgage Loan has been closed and the proceeds of the Mortgage
Loan have been fully disbursed, except for Mortgage Loans with escrow
holdbacks established or created due to seasonal weather conditions,
as allowed under the Underwriting Guidelines, and there is no
requirement for future advances thereunder. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled
to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(m) Consolidation of Future Advances.
Any future advances made prior to the Cut-off Date, have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
related Mortgage Loan Schedule. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first
lien priority (or second lien priority for each Mortgage Loan
identified on the such Mortgage Loan Schedule as being a Second Lien
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 Xxxxxx Mae or Xxxxxxx Mac; the
consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan; the Company shall not make future
advances after the Cut-off Date;
(n) Ownership.
The Company is the sole owner of record and holder of the Mortgage
Loan and the related Mortgage Note and the Mortgage are not assigned
or pledged, and the Company has good and marketable title thereto and
has full right and authority to transfer and sell the Mortgage Loan to
the Purchaser. The Company is transferring the Mortgage Loan free and
clear of any and all encumbrances, liens, pledges, equities,
participation interests, claims, charges or security interests of any
nature encumbering such Mortgage Loan;
(o) Origination/Doing Business.
26
The Mortgage Loan was originated by a savings and loan association, a
savings bank, a commercial bank, a credit union, an insurance company,
or similar institution that is supervised and examined by a federal or
state authority, or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable
licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and (2) organized under the laws of such state,
or (3) qualified to do business in such state, or (4) federal savings
and loan associations or national banks having principal offices in
such state, or (5) not doing business in such state;
(p) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title insurance
policy (or in the case of any Mortgage Loan secured by a Mortgaged
Property located in a jurisdiction where such policies are generally
not available, an opinion of counsel of the type customarily rendered
in such jurisdiction in lieu of title insurance and acceptable to
Xxxxxx Xxx or Xxxxxxx Mac) or other generally acceptable form of
policy of insurance acceptable to Xxxxxx Mae or Xxxxxxx Mac, issued by
a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Company, its successors and assigns, as to the
first priority lien (or second priority if such Mortgage Loan is a
Second Lien Mortgage Loan) of the Mortgage in the original principal
amount of the Mortgage Loan, subject only to the exceptions contained
in clauses (1), (2) and (3) of paragraph (k) of this Section 3.02, and
against any loss by reason of the invalidity or unenforceability of
the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. The
Company 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 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
Mortgage, including the Company, has done, by act or omission,
anything which would impair the coverage of such lender's title
insurance policy;
(q) No Defaults.
There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note or related documents
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 neither the Company
nor its predecessors have waived any default, breach, violation or
event of acceleration;
27
(r) No Mechanics' Liens.
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 the law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage which are not
insured against by the title insurance policy referenced in paragraph
(p) above;
(s) Location of Improvements; No Encroachments.
All improvements which were considered in determining the Appraised
Value of the Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property and except as
insured against by the title insurance policy referenced in paragraph
(p) above, no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or
regulation;
(t) Payment Terms.
Principal payments commenced no more than sixty (60) days after the
funds were disbursed to the Mortgagor in connection with the Mortgage
Loan. Each Mortgage Loan is payable in equal monthly installments of
principal and interest, with interest calculated and payable in
arrears, sufficient (except with respect to Balloon Loans and Interest
Only Mortgage Loans) to amortize the Mortgage Loan fully by the stated
maturity date set for in the Mortgage Note over an original term to
maturity of not more than thirty (30) years. With respect to each
Balloon Loan, the Mortgage Loan is payable in equal monthly
installments of principal and interest based on a fifteen (15) or
thirty (30) year amortization schedule, as set forth in the related
Mortgage Note, and a final lump sum payment substantially greater than
the preceding Monthly Payment is required which is sufficient to
amortize the remaining principal balance of the Balloon Loan. As to
each Adjustable Rate Mortgage Loan on each applicable Adjustment Date,
the Mortgage Interest Rate will be adjusted to equal the sum of the
Index plus the applicable Gross Margin, rounded up or down to the
nearest multiple of 0.125% indicated by the Mortgage Note; provided
that the Mortgage Interest Rate will not increase or decrease by more
than the Periodic Interest Rate Cap on any Adjustment Date, and will
in no event exceed the maximum Mortgage Interest Rate or be lower than
the minimum Mortgage Interest Rate listed on the Mortgage Note. As to
each Adjustable Rate Mortgage Loan that is not an Interest Only
Mortgage Loan, each Mortgage Note requires a monthly payment which is
sufficient, during the period prior to the first adjustment to the
Mortgage Interest Rate, to fully amortize the outstanding principal
balance as of the first day of such period over the then remaining
term of such Mortgage Note and to pay interest at
28
the related Mortgage Interest Rate. As to each Adjustable Rate
Mortgage Loan, if the related Mortgage Interest Rate changes on an
Adjustment Date, with respect to an Interest Only Mortgage Loan, on an
Adjustment Date following the related interest only period, the then
outstanding principal balance will be reamortized over the remaining
life of such Mortgage Loan. No Mortgage Loan contains terms or
provisions which would result in negative amortization;
(u) Customary Provisions.
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,
(i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure and upon
the exercise of such rights and remedies under the law, the holder of
the Mortgage and Mortgage Note will be able to deliver good and
merchantable title to the Mortgaged Property. There is no homestead or
other exemption available to a Mortgagor which would interfere with
the right to sell the Mortgaged Property at a trustee's sale or the
right to foreclose the Mortgage;
(v) Occupancy of the Mortgaged Property.
As of the date of origination, the Mortgaged Property was lawfully
occupied under applicable law;
(w) No Additional Collateral.
The Mortgage Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the corresponding
Mortgage and the security interest of any applicable security
agreement or chattel mortgage referred to in paragraphs (k) and (zz);
(x) Deeds of Trust.
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 Mortgagee to the
trustee under the deed of trust, except in connection with a trustee's
sale after default by the Mortgagor;
(y) Transfer of Mortgage Loans.
If the Mortgage Loan is not a MERS Mortgage Loan, the Assignment of
Mortgage upon the insertion of the name of the assignee and recording
information is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located;
29
(z) Mortgaged Property Undamaged.
The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to
affect adversely the value of the Mortgaged Property as security for
the Mortgage Loan or the use for which the premises were intended;
(aa) Collection Practices; Escrow Deposits.
The origination and collection practices used with respect to the
Mortgage Loan have been in accordance with Accepted Servicing
Practices, and have been in all material respects legal and proper.
With respect to escrow deposits and Escrow Payments, all such payments
are in the possession of the Company and there exist no deficiencies
in connection therewith for which customary arrangements for repayment
thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law. No escrow deposits or
Escrow Payments or other charges or payments due the Company have been
capitalized under the Mortgage Note;
(bb) No Condemnation.
There is no proceeding pending or to the best of the Company's
knowledge threatened for the total or partial condemnation of the
related Mortgaged Property;
(cc) The Appraisal.
The Mortgage Loan Documents contains an appraisal of the related
Mortgaged Property by an appraiser who is licensed in the state where
the Mortgaged Property is located, and 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 the appraisal and
the appraiser both satisfy the applicable requirements of Title XI of
the Financial Institution Reform, Recovery, and Enforcement Act of
1989 and the regulations promulgated thereunder, all as in effect on
the date the Mortgage Loan was originated;
(dd) Insurance.
The Mortgaged Property securing each Mortgage Loan is insured by an
insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement and such other hazards as are customary in the area where
the Mortgaged Property is located pursuant to insurance policies
conforming to the requirements of Section 4.10, in an amount which is
at least equal to the lesser of (a) 100% of the insurable value,
30
on a replacement cost basis, of the improvements on the related
Mortgaged Property, or (b) the greater of (i) either (1) the
outstanding principal balance of the Mortgage Loan with respect to
each First Lien Mortgage Loan or (2) with respect to each Second Lien
Mortgage Loan, the sum of the outstanding principal balance of the
First Lien on such Mortgage Loan and the outstanding principal balance
of such Second Lien Mortgage Loan, or (ii) an amount such that the
proceeds of such insurance shall be sufficient to avoid the
application to the Mortgagor or loss payee of any coinsurance clause
under the policy. If the Mortgaged Property is a condominium unit, it
is included under the coverage afforded by a blanket policy for the
project. If the improvements on the Mortgaged Property are in an area
identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards, a flood insurance policy
meeting the requirements of the current guidelines of the Federal
Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than
the least of (A) the outstanding principal balance of the Mortgage
Loan, (B) the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster Protection Act
of 1973, as amended. All individual insurance policies contain a
standard mortgagee clause naming the Company and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The
Mortgage obligates the Mortgagor thereunder to maintain a hazard
insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. The
hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and
effect and inure to the benefit of the Purchaser upon the consummation
of the transactions contemplated by this Agreement. The Company has
not acted or failed to act so as to impair the coverage of any such
insurance policy or the validity, binding effect and enforceability
thereof;
(ee) Servicemembers Civil Relief Act.
The Mortgagor has not notified the Company, and the Company has no
knowledge of any relief requested or allowed to the Mortgagor under
the Servicemembers Civil Relief Act, as amended;
(ff) No Graduated Payments, Contingent Interests.
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. The Mortgage Loan does not contain provisions
pursuant to which Monthly Payments are paid or partially paid with
funds deposited in any separate account established by the Company,
the Mortgagor, or any one on behalf of the Mortgagor, or paid by any
source other than the Mortgagor;
31
(gg) No Construction Loans.
No Mortgage Loan was made in connection with (i) the construction or
rehabilitation of a Mortgage Property or (ii) facilitating the
trade-in or exchange of a Mortgaged Property other than a
construction-to-permanent loan which has converted to a permanent
Mortgage Loan;
(hh) Underwriting.
Each Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines and the Mortgage Note and Mortgage are on
forms acceptable to Xxxxxxx Mac or Xxxxxx Mae;
(ii) Bankruptcy.
No Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding as of the date the Mortgage Loan was closed and
the proceeds of the Mortgage Loan were distributed;
(jj) Leasehold Estates.
With respect to Mortgage Loans that are secured by a leasehold estate,
the lease is valid, in full force and effect, and conforms to the
Underwriting Guidelines for leasehold estates;
(kk) Due on Sale.
The Mortgage or Mortgage Note contains an enforceable provision, to
the extent not prohibited by federal law, for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the
event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder;
(ll) The Mortgagor.
The Mortgagor is one or more natural persons and/or an Illinois land
trust or a "living trust" and such "living trust" is in compliance
with the Underwriting Guidelines;
(mm) Single Premium Credit Life Insurance.
No Mortgagor was required to purchase any single premium credit
insurance policy (e.g. life, 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,
disability, accident, unemployment or health insurance product) as
part of the
32
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;
(nn) Recordation.
Each original Mortgage has been, or is in the process of being duly
recorded in the appropriate recording office, and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been recorded, are in the process of being recorded or
will be recorded (in the event the original mortgage has not been
returned by the applicable recording office), in the appropriate
jurisdictions wherein such recordation is necessary to perfect the
respective lien thereof as against creditors of the Company;
(oo) No Violation of Environmental Laws.
There is no pending action or proceeding directly involving any
Mortgaged Property of which the Company is aware in which compliance
with any environmental law, rule or regulation is an issue; and to the
best of the Company's knowledge, nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use, value and enjoyment of said
property;
(pp) Primary Mortgage Insurance.
Each Mortgage Loan has an LTV or CLTV as set forth on the related
Mortgage Loan Schedule. Except as set forth on such Mortgage Loan
Schedule, each First Lien Mortgage Loan with an LTV of greater than
80% at the time of origination, a portion of the unpaid principal
balance of the Mortgage Loan is and will be insured as to payment
defaults by a PMI Policy. If the First Lien Mortgage Loan is insured
by a PMI Policy which is not an LPMI Policy, the coverage will remain
in place until (i) the LTV decreases to 78% or (ii) the PMI Policy is
otherwise terminated pursuant to the Homeowners Protection Act of
1998, 12 USC Section 4901, et seq. All provisions of such PMI Policy
or LPMI Policy have been and are being complied with, such policy is
in full force and effect, and all premiums due thereunder have been
paid. The Qualified Insurer has a claims paying ability acceptable to
Xxxxxx Xxx or Xxxxxxx Mac. Any Mortgage Loan subject to a PMI Policy
other than an LPMI Policy obligates the Mortgagor to maintain the PMI
Policy other than an LPMI Policy and to pay all premiums and charges
in connection therewith;
(qq) Servicing.
33
From and after the date of origination, each Mortgage Loan has been
serviced in accordance with the terms of all federal, state and local
laws and regulations, the terms of the Mortgage Note and Accepted
Servicing Practices in all respects;
(rr) No High Cost Loans.
No Mortgage Loan is a High Cost Loan or Covered Loan;
(ss) Delivery of Custodial Mortgage Files.
The Mortgage Note and any other documents required to be delivered by
the Company under this Agreement for the Mortgage Loans have been
delivered to the Custodian. The Company is in possession of a
complete, true and accurate Retained Mortgage File in compliance with
Exhibit C, except for such documents where the originals of which have
been sent for recordation;
(tt) Credit Reporting.
With respect to each Mortgage Loan, the Company has furnished complete
information on the related borrower credit files to Equifax, Experian
and Trans Union Credit Information Company, in accordance with the
Fair Credit Reporting Act and its implementing regulations;
(uu) Anti-Money Laundering Laws.
The Company has complied with all applicable anti-money laundering
laws and regulations, (the "Anti-Money Laundering Laws"), and has
established an anti-money laundering compliance program as required by
the Anti-Money Laundering Laws;
(vv) Contents of the Retained Mortgage File.
The Retained Mortgage File contains the documents listed as items 6
through 9 of Exhibit C attached hereto;
(ww) Texas Refinance Mortgage Loans.
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;
(xx) Prepayment Penalty.
With respect to each Mortgage Loan that has a Prepayment Penalty
feature, each such prepayment penalty shall be enforceable and will be
enforced by the
34
Company for the benefit of the Purchaser, and each Prepayment Penalty
shall be permitted pursuant to federal, state and local law. Each such
Prepayment Penalty is in an amount equal to the maximum amount
permitted under applicable law and no such Prepayment Penalty may be
imposed for a term in excess of five (5) years with respect to
Mortgage Loans originated on or after October 1, 2002;
(yy) No Arbitration.
No borrower with respect to any Mortgage Loan originated on or after
August 1, 2004, agreed to submit to arbitration to resolve any dispute
arising out of or relating in any way to the Mortgage Loan
transaction;
(zz) Valid Second Lien.
With respect to any Second Lien Mortgage Loan, such Mortgage is a
valid, subsisting and enforceable Second Lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect
to the foregoing. The lien of such Mortgage is subject only to:
(i) the lien of current real property taxes and assessments not yet
due and payable;
(ii) superior position mortgage lien(s) acceptable in accordance with
the Underwriting Guidelines;
(iii) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of
recording acceptable to mortgage lending institutions in
accordance with Accepted Servicing Practices and (i) referred to
or otherwise considered in the appraisal and (ii) which do not
adversely affect the Appraised Value; and
(iv) 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 such Mortgage Loan
establishes and creates a valid, subsisting, and enforceable Second
Lien and second lien security interest on the property described
therein and the Company has full right to sell and assign the same to
the Purchaser. With respect to each Second Lien Mortgage Loan: (a) the
First Lien is in full force and effect, (b) there is no default,
breach, violation or event of acceleration existing under such First
Lien Mortgage or the related Mortgage Note, (c) if the related First
Lien Mortgage Loan provides for negative
35
amortization, the LTV was calculated at the maximum principal balance
of such First Lien that could result upon application of such negative
amortization feature, (d) either no consent for the Second Lien
Mortgage Loan is required by the holder of the First Lien or such
consent has been obtained and is contained in the Mortgage Loan
Documents and (e) to the best of Company's knowledge, 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 or acceleration under the related First Lien Mortgage Loan;
(aaa) Cooperative Loans.
With respect to each Cooperative Loan:
(i) The Cooperative Shares are held by a person as a
tenant-stockholder in a Cooperative. Each original UCC financing
statement, continuation statement or other governmental filing
or recordation necessary to create or preserve the perfection
and priority of the first lien and security interest in the
Cooperative Loan and Proprietary Lease has been timely and
properly made. Any security agreement, chattel mortgage or
equivalent document related to the Cooperative Loan and
delivered to Purchaser or its designee establishes in Purchaser
a valid and subsisting perfected first lien on and security
interest in the Mortgaged Property described therein, and
Purchaser has full right to sell and assign the same. The
Proprietary Lease term expires no less than five (5) years after
the Mortgage Loan term or such other term acceptable to Xxxxxx
Mae or Xxxxxxx Mac;
(ii) A Cooperative Lien Search has been made by a company competent
to make the same which company is acceptable to Xxxxxx Mae or
Xxxxxxx Mac and qualified to do business in the jurisdiction
where the Cooperative is located;
(iii) (a) The term of the related Proprietary Lease is not less than
the terms of the Cooperative Loan; (b) there is no provision in
any Proprietary Lease which requires the Mortgagor to offer for
sale the Cooperative Shares owned by such Mortgagor first to the
Cooperative; (c) there is no prohibition in any Proprietary
Lease against pledging the Cooperative Shares or assigning the
Proprietary Lease; (d) the Cooperative has been created and
exists in full compliance with the requirements for residential
cooperatives in the jurisdiction in which the Project is located
and qualifies as a cooperative housing corporation under Section
210 of the Code; (e) the Recognition Agreement is on a form
published by Aztech Document Services, Inc. or includes similar
provisions; and (f) the Cooperative has good and marketable
title to the Project, and owns the Project either in fee simple
or under a leasehold that complies with the requirements of the
Xxxxxx Mae guidelines, Xxxxxxx Mac guidelines or the
36
Underwriting Guidelines; such title is free and clear of any
adverse liens or encumbrances, except the lien of any blanket
mortgage;
(iv) The Company has the right under the terms of the Mortgage Note,
Pledge Agreement and Recognition Agreement to pay any
maintenance charges or assessments owed by the Mortgagor;
(v) Each Stock Power (i) has all signatures guaranteed or (ii) if
all signatures are not guaranteed, then such Cooperative Shares
will be transferred by the stock transfer agent of the
Cooperative if the Company undertakes to convert the ownership
of the collateral securing the related Cooperative Loan;
(bbb) Buydown Mortgage Loans.
With respect to each Mortgage Loan that is a Buydown Mortgage Loan:
(i) On or before the date of origination of such Mortgage Loan, the
Company and the Mortgagor, or the Company, the Mortgagor and the
seller of the Mortgaged Property or a third party entered into a
Buydown Agreement. The Buydown Agreement provides that the
seller of the Mortgaged Property (or third party) shall deliver
to the Company temporary Buydown Funds in an amount equal to the
aggregate undiscounted amount of payments that, when added to
the amount the Mortgagor on such Mortgage Loan is obligated to
pay on each Due Date in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payment due on
such Mortgage Loan. The temporary Buydown Funds enable the
Mortgagor to qualify for the Buydown Mortgage Loan. The
effective interest rate of a Buydown Mortgage Loan if less than
the interest rate set forth in the related Mortgage Note will
increase within the Buydown Period as provided in the related
Buydown Agreement so that the effective interest rate will be
equal to the interest rate as set forth in the related Mortgage
Note. The Buydown Mortgage Loan satisfies the requirements of
Xxxxxx Mae guidelines, Xxxxxxx Mac guidelines or the
Underwriting Guidelines;
(ii) The Mortgage and Mortgage Note reflect the permanent payment
terms rather than the payment terms of the Buydown Agreement.
The Buydown Agreement provides for the payment by the Mortgagor
of the full amount of the Monthly Payment on any Due Date that
the Buydown Funds are available. The Buydown Funds were not used
to reduce the original principal balance of the Mortgage Loan or
to increase the Appraised Value of the Mortgage Property when
calculating the Loan-to-Value Ratios for purposes of the
Agreement and, if the Buydown Funds were provided by the Company
and if required under Xxxxxx Mae guidelines, Xxxxxxx Mac
guidelines or the Underwriting Guidelines, the terms of the
37
Buydown Agreement were disclosed to the appraiser of the
Mortgaged Property;
(iii) The Buydown Funds may not be refunded to the Mortgagor unless
the Mortgagor makes a principal payment for the outstanding
balance of the Mortgage Loan;
(iv) As of the date of origination of the Mortgage Loan, the
provisions of the related Buydown Agreement complied with the
Xxxxxx Mae guidelines, Xxxxxxx Mac guidelines or the
Underwriting Guidelines regarding buydown agreements; and
(ccc) Indiana.
There is no Mortgage Loan that was originated on or after January 1,
2005, which is a "high cost home loan" as defined under the Indiana
Home Loan Practices Act (I.C. 24-9).
Section 3.03 Repurchase.
It is understood and agreed that the representations and warranties set
forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to
the Purchaser and the delivery of the applicable Mortgage Loan Documents to the
Custodian and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Custodial Mortgage File or
Retained Mortgage File. Upon discovery by either the Company or the Purchaser of
a breach of any of the foregoing representations and warranties which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan) (in the case of any of the foregoing, a
"Breach"), the party discovering such Breach shall give prompt written notice to
the other.
Within sixty (60) days of the earlier of either discovery by or notice to
the Company of any Breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans, the Company shall use its
best efforts promptly to cure such Breach in all material respects (although, in
connection with such a breach of Section 3.02(tt), the cure period shall be
fifteen (15) days) and, if such Breach cannot be cured, the Company shall, at
the Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price.
In the event that a Breach shall involve any representation or warranty set
forth in Section 3.01, and such Breach cannot be cured within sixty (60) days of
the earlier of either discovery by or notice to the Company of such Breach, all
of the Mortgage Loans shall, at the Purchaser's option, be repurchased by the
Company at the Repurchase Price. However, if the Breach shall involve a
representation or warranty set forth in Section 3.02 and the Company discovers
or receives notice of any such Breach within one hundred twenty (120) days of
the related Closing Date, the Company shall, if the Breach cannot be cured, at
the Purchaser's option and provided that the Company has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan
38
as provided above, remove such Mortgage Loan (a "Deleted Mortgage Loan") and
substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided
that any such substitution shall be effected not later than one hundred twenty
(120) days after the related Closing Date. If the Company has no Qualified
Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan within
sixty (60) days of the written notice of the Breach or the failure to cure,
whichever is later. Any repurchase of a Mortgage Loan or Loans pursuant to the
foregoing provisions of this Section 3.03 shall be accomplished by deposit in
the Custodial Account of the amount of the Repurchase Price for distribution to
Purchaser on the Remittance Date immediately following the Principal Prepayment
Period in which such repurchase takes place, after deducting therefrom any
amount received in respect of such repurchased Mortgage Loan or Loans and being
held in the Custodial Account for future distribution.
At the time of repurchase or substitution, the Purchaser and the Company
shall arrange for the reassignment of the Deleted Mortgage Loan to the Company
and the delivery to the Company of any documents held by the Custodian relating
to the Deleted Mortgage Loan. If the Company repurchases a Mortgage Loan that is
a MERS Mortgage Loan, the Company shall cause MERS to designate on the MERS
System the removal of the Purchaser as beneficial holder with respect to the
Mortgage Loan. In the event of a repurchase or substitution, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser that
such repurchase or substitution has taken place, amend the related Mortgage Loan
Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this
Agreement, and, in the case of substitution, identify a Qualified Substitute
Mortgage Loan and amend the related Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Company shall be deemed to have made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such
substitution. The Company shall effect such substitution by delivering to the
Custodian for such Qualified Substitute Mortgage Loan the documents required by
Section 2.03, with the Mortgage Note endorsed as required by Section 2.03. No
substitution will be made in any calendar month after the Determination Date for
such month. The Company shall deposit in the Custodial Account the Monthly
Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or
Loans in the month following the date of such substitution. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Company. With respect to any Deleted Mortgage loan,
distributions to Purchaser shall include the Monthly Payment due on any Deleted
Mortgage Loan in the month of substitution, and the Company shall thereafter be
entitled to retain all amounts subsequently received by the Company in respect
of such Deleted Mortgage Loan.
For any month in which the Company substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Company shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by the Company in the month of
substitution pursuant to
39
Section 5.01. Accordingly, on the date of such substitution, the Company shall
deposit from its own funds into the Custodial Account an amount equal to the
amount of such shortfall.
In addition to such repurchase or substitution obligation, the Company
shall indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a Breach of
the Company representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Company set forth in this
Section 3.03 to cure, substitute for or repurchase a defective Mortgage Loan and
to indemnify the Purchaser as provided in this Section 3.03 constitute the sole
remedies of the Purchaser respecting a Breach of the foregoing representations
and warranties.
Any cause of action against the Company relating to or arising out of the
Breach of any representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) discovery of such Breach by the
Purchaser or notice thereof by the Company to the Purchaser, (ii) failures by
the Company to cure such Breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Company by the Purchaser for compliance with
this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as an independent contractor, shall service and administer the
Mortgage Loans and shall have full power and authority, acting alone or through
the utilization of a Subservicer or a Subcontractor, to do any and all things in
connection with such servicing and administration which the Company may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices. The Company shall be responsible for any and all
acts of a Subservicer and a Subcontractor, and the Company's utilization of a
Subservicer or a Subcontractor shall in no way relieve the liability of the
Company under this Agreement.
Consistent with the terms of this Agreement, the Company may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Company's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, the Company shall not make any future advances,
other than Servicing Advances, with respect to a Mortgage Loan. The Company
shall not permit any modification of any material term of any Mortgage Loan
including any modifications would change the Mortgage Interest Rate, defer or
forgive the payment of principal or interest, reduce or increase the outstanding
principal balance (except for actual payments of principal) or change the final
maturity date on such Mortgage Loan, unless the
40
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Company, imminent and the Company has obtained the prior
written consent of the Purchaser. In the event that no default exists or is
imminent, the Company shall request written consent from the Purchaser to permit
such a modification and the Purchaser shall provide written consent or notify
the Company of its objection to such modification within three (3) Business Days
of its receipt of the Company's request. In the event of any such modification
which permits the deferral of interest or principal payments on any Mortgage
Loan, the Company shall, on the Business Day immediately preceding the
Remittance Date in any month in which any such principal or interest payment has
been deferred, deposit in the Custodial Account from its own funds, in
accordance with Section 5.03, the difference between (a) such month's principal
and one month's interest at the Mortgage Loan Remittance Rate on the unpaid
principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Company shall be entitled to reimbursement for such advances to
the same extent as for all other advances made pursuant to Section 5.03. Without
limiting the generality of the foregoing, the Company shall continue, and is
hereby authorized and empowered, to execute and deliver on behalf of itself and
the Purchaser, all instruments of satisfaction or cancellation, or of partial or
full release, discharge and all other comparable instruments, with respect to
the Mortgage Loans and with respect to the Mortgaged Properties. If reasonably
required by the Company, the Purchaser shall furnish the Company with any powers
of attorney and other documents necessary or appropriate to enable the Company
to carry out its servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser's reliance on the Company.
The Company is authorized and empowered by the Purchaser, in its own name,
when the Company believes it appropriate in its reasonable judgment to register
any Mortgage Loan on the MERS(R) System, or cause the removal from MERS
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Purchaser, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns.
The Company shall cause to be maintained for each Cooperative Loan a copy
of the financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Purchaser.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not postponed
pursuant to Section 4.01 is not paid when the same becomes due and payable, or
in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such
41
failure continues beyond any applicable grace period, the Company shall take
such action as (1) the Company would take under similar circumstances with
respect to a similar mortgage loan held for its own account for investment, (2)
shall be consistent with Accepted Servicing Practices, (3) the Company shall
determine prudently to be in the best interest of Purchaser, and (4) is
consistent with any related PMI Policy. In the event that any payment due under
any Mortgage Loan is not postponed pursuant to Section 4.01 and remains
delinquent for a period of ninety (90) days or any other default continues for a
period of ninety (90) days beyond the expiration of any grace or cure period,
the Company shall commence foreclosure proceedings. In the event the Purchaser
objects to such foreclosure action, the Company shall not be required to make
Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03,
and the Company's obligation to make such Monthly Advances shall terminate on
the 90th day referred to above. In such connection, the Company shall from its
own funds make all necessary and proper Servicing Advances, provided, however,
that the Company shall not be required to expend its own funds in connection
with any foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to Purchaser after reimbursement to itself for such expenses and (b) that
such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 4.05) or through Insurance Proceeds
(respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
the Company has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how the Company shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Purchaser directs the Company to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Company, the Company shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Purchaser directs the Company not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Company shall be
reimbursed for all Servicing Advances made with respect to the related Mortgaged
Property from the Custodial Account pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
42
Continuously from the respective Cut-off Date until the principal and
interest on all Mortgage Loans are paid in full, the Company shall proceed
diligently to collect all payments due under each of the Mortgage Loans when the
same shall become due and payable and shall take special care in ascertaining
and estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loan and the Mortgaged Property, to the end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "Xxxxx Fargo Bank, N.A.,
in trust for the Purchaser and/or subsequent purchasers of Mortgage Loans - P &
I." The Custodial Account shall be established with an Eligible Institution. The
Custodial Account shall at all times be insured to the fullest extent allowed by
applicable law. Funds deposited in the Custodial Account may be drawn on by the
Company in accordance with Section 4.05. The creation of any Custodial Account
shall be evidenced by a certification in the case of an account established with
the Company, or by a letter agreement in the case of an account held by a
depository other than the Company each in the forms attached hereto as Exhibit
F. A copy of such certification or letter agreement shall be furnished to the
Purchaser or any subsequent purchaser, upon request.
The Company shall deposit in the Custodial Account within two (2) Business
Days of Company's receipt, and retain therein, the following collections
received by the Company and payments made by the Company after the Cut-off Date,
other than payments of principal and interest due on or before the Cut-off Date,
or received by the Company prior to the Cut-off Date but allocable to a period
subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans adjusted
to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 4.10 (other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14), Section 4.11 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 4.14;
43
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 4.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.03 and all amounts required to
be deposited by the Company in connection with a shortfall in
principal amount of any Qualified Substitute Mortgage Loan pursuant
to Section 3.03;
(viii) with respect to each Principal Prepayment an amount (to be paid by
the Company out of its funds) which, when added to all amounts
allocable to interest received in connection with the Principal
Prepayment, equals one month's interest on the amount of principal
so prepaid at the Mortgage Loan Remittance Rate;
(ix) any amounts required to be deposited by the Company pursuant to
Section 4.11 in connection with the deductible clause in any blanket
hazard insurance policy;
(x) any amounts received with respect to or related to any REO Property
and all REO Disposition Proceeds pursuant to Section 4.16;
(xi) with respect to each Subsidy Loan, an amount from the Escrow Account
that when added to the Mortgagor's payment will equal the full
monthly amount due under the related Mortgage Note;
(xii) with respect to each Buydown Mortgage Loan, an amount from the
Escrow Account that when added to the Mortgagor's payment will equal
the full monthly amount due under the related Mortgage Note; and
(xiii) with respect to each Pledged Asset Mortgage Loan, any amounts
required to be deposited by the Company pursuant to Section 4.29 of
this Agreement in connection with a Letter of Credit.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05.
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the manner
provided for in Section 5.01;
44
(ii) to reimburse itself for Monthly Advances of the Company's funds made
pursuant to Section 5.03, the Company's right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on
the related Mortgage Loan which represent late payments of principal
and/or interest respecting which any such advance was made, it being
understood that, in the case of any such reimbursement, the
Company's right thereto shall be prior to the rights of Purchaser,
except that, where the Company is required to repurchase a Mortgage
Loan pursuant to Section 3.03 or 6.02, the Company's right to such
reimbursement shall be subsequent to the payment to the Purchaser of
the Repurchase Price pursuant to such sections and all other amounts
required to be paid to the Purchaser with respect to such Mortgage
Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances, and for any
unpaid Servicing Fees, the Company's right to reimburse itself
pursuant to this subclause (iii) with respect to any Mortgage Loan
being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Company from the Mortgagor or otherwise relating to
the Mortgage Loan, it being understood that, in the case of any such
reimbursement, the Company's right thereto shall be prior to the
rights of Purchaser, except that where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02, in
which case the Company's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase Price
pursuant to such sections and all other amounts required to be paid
to the Purchaser with respect to such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial Account;
(v) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 8.01;
(vi) to pay any amount required to be paid pursuant to Section 4.16
related to any REO Property, it being understood that, in the case
of any such expenditure or withdrawal related to a particular REO
Property, the amount of such expenditure or withdrawal from the
Custodial Account shall be limited to amounts on deposit in the
Custodial Account with respect to the related REO Property;
(vii) to reimburse itself for any Servicing Advances or REO expenses after
liquidation of the Mortgaged Property not otherwise reimbursed
above;
(viii) to remove funds inadvertently placed in the Custodial Account by the
Company; and
(ix) to clear and terminate the Custodial Account upon the termination of
this Agreement.
45
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such withdrawn
funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"Xxxxx Fargo Bank, N.A., in trust for the Purchaser and/or subsequent purchasers
of Residential Mortgage Loans, and various Mortgagors - T & I." The Escrow
Accounts shall be established with an Eligible Institution, in a manner which
shall provide maximum available insurance thereunder. Funds deposited in the
Escrow Account may be drawn on by the Company in accordance with Section 4.07.
The creation of any Escrow Account shall be evidenced by a certification in the
case of an account established with the Company, or by a letter agreement in the
case of an account held by a depository other than the Company each in the forms
attached as Exhibit G. A copy of such certification or letter agreement shall be
furnished to the Purchaser or any subsequent purchaser, upon request.
The Company shall deposit in the Escrow Account or Accounts within two (2)
Business Days of Company's receipt, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any such items as required
under the terms of this Agreement;
(ii) all amounts representing Insurance Proceeds or Condemnation Proceeds
which are to be applied to the restoration or repair of any Mortgaged
Property;
(iii) all payments on account of Buydown Funds or Subsidy Funds; and
(iv) all Servicing Advances for Mortgagors whose Escrow Payments are
insufficient to cover escrow disbursements.
The Company shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
4.07. The Company shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Company
only:
46
(i) to effect timely payments of ground rents, taxes, assessments, water
rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage;
(ii) to reimburse the Company for any Servicing Advances made by the
Company pursuant to Section 4.08 with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan
which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to reduce the
principal balance of the Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;
(v) for application to the restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 4.14;
(vi) to pay to the Company, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to remove funds inadvertently placed in the Escrow Account by the
Company;
(viii) to clear and terminate the Escrow Account on the termination of this
Agreement; and
(ix) to transfer payment on account of Buydown Funds or Subsidy Funds to
the Custodial Account.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account (excluding the payment of LPMI Policy
premiums, which are to be paid from the Company's own funds without
reimbursement), which shall have been estimated and accumulated by the Company
in amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. The Company assumes full responsibility for the timely payment of all
such bills and shall effect timely payment of all such charges irrespective of
each Mortgagor's faithful performance in the payment of same or the making of
the Escrow Payments, and the Company shall make advances from its own funds to
effect such payments.
47
Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account, Subsidy Account or the
Escrow Account to a different Eligible Institution from time to time and shall
provide the Purchaser with notice of such transfer. The Company shall bear any
expenses, losses or damages sustained by the Purchaser because the Custodial
Account and/or the Escrow Account are not demand deposit accounts.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) 100% of the insurable value, on a replacement cost basis, of the
improvements on the related Mortgaged Property, or (ii) the greater of (i) the
outstanding principal balance of the Mortgage Loan or (ii) an amount such that
the proceeds of such insurance shall be sufficient to avoid the application to
the Mortgagor or loss payee of any coinsurance clause under the policy. In the
event a hazard insurance policy shall be in danger of being terminated, or in
the event the insurer shall cease to be acceptable to Xxxxxx Mae or Xxxxxxx Mac,
the Company shall notify the Purchaser and the related Mortgagor, and shall use
its best efforts, as permitted by applicable law, to obtain from another
qualified insurer a replacement hazard insurance policy substantially and
materially similar in all respects to the original policy. In no event, however,
shall a Mortgage Loan be without a hazard insurance policy at any time, subject
only to Section 4.11 hereof.
If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified by the Flood Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available)
the Company shall cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier acceptable to Xxxxxx
Mae or Xxxxxxx Mac in an amount representing coverage equal to the lesser of (i)
the minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the Company determines in accordance with the
applicable law and pursuant to the Xxxxxx Mae or Xxxxxxx Mac Seller/Servicer
Guide, that the Mortgaged Property is located in a special flood hazard area and
is not covered by flood insurance meeting the requirements of the Flood Disaster
Protection Act of 1973, as amended, the Company shall notify the related
Mortgagor that they must obtain such flood insurance coverage and if the
Mortgagor fails to provide proof of such coverage within forty-five (45) days of
such notice, the Company shall force place the required flood insurance on the
Mortgagor's behalf.
48
If a Mortgage is secured by a unit in a condominium project, the Company
shall verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current Xxxxxx Mae or Xxxxxxx Mac requirements, and secure
from the owner's association its agreement to notify the Company promptly of any
change in the insurance coverage or of any condemnation or casualty loss that
may have a material effect on the value of the Mortgaged Property as security.
In the event that any Purchaser or the Company shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the required amount of coverage for the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Company shall
immediately force place the required coverage on the Mortgagor's behalf.
All policies required hereunder shall name the Company as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least thirty (30) days prior written
notice of any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to Xxxxxx Mae and Xxxxxxx Mac and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Company shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.
Pursuant to Section 4.04, any amounts collected by the Company under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy provides
coverage in an amount equal to the amount required pursuant to Section 4.10 and
otherwise complies with all other requirements of Section 4.10, it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
4.10. The Company shall prepare and make any claims on the blanket policy as
deemed necessary by the Company in accordance with Accepted Servicing Practices.
Any amounts collected by the Company under any such policy relating to a
Mortgage Loan shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05. Such policy may contain a deductible
49
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the Company
shall deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company's funds, without reimbursement
therefor. Upon request of the Purchaser, the Company shall cause to be delivered
to such Purchaser a certificate of insurance and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty (30) days' prior written notice to such Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance.
The Company shall maintain with responsible companies, at its own expense,
a blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other Persons acting in any capacity
requiring such Persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth in
this Agreement. The minimum coverage under any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be acceptable to Xxxxxx Mae or Xxxxxxx Mac.
Upon the request of any Purchaser, the Company shall cause to be delivered to
such Purchaser a certificate of insurance for such Fidelity Bond and Errors and
Omissions Insurance Policy and a statement from the surety and the insurer that
such Fidelity Bond and Errors and Omissions Insurance Policy shall in no event
be terminated or materially modified without thirty (30) days' prior written
notice to the Purchaser.
Section 4.13 Inspections.
If any Mortgage Loan is more than sixty (60) days delinquent, the Company
shall inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Xxxxxx Mae or Accepted Servicing Practices or as may be required
by the primary mortgage guaranty insurer. The Company shall produce a report of
each such inspection upon written request by the Purchaser.
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. For claims greater than
$15,000, at a minimum the Company shall comply with the
50
following conditions in connection with any such release of Insurance Proceeds
or Condemnation Proceeds:
(i) the Company shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with
respect thereto;
(ii) the Company shall take all steps necessary to preserve the priority
of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan is not in default;
and
(iv) pending repairs or restoration, the Company shall place the Insurance
Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Section 4.15 Maintenance of PMI Policy; Claims.
Except as set forth on the respective Mortgage Loan Schedule, with respect
to each First Lien Mortgage Loan with an LTV of greater than 80% at the time of
origination, the Company shall, without any cost to the Purchaser, maintain or
cause the Mortgagor to maintain in full force and effect a PMI Policy insuring
that portion of the Mortgage Loan over 78% of value until terminated pursuant to
the Homeowners Protection Act of 1998, 12 USC Section 4901, et seq. In the event
that such PMI Policy shall be terminated other than as required by law, the
Company shall obtain from another Qualified Insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such terminated
PMI Policy. If the insurer shall cease to be a Qualified Insurer, the Company
shall determine whether recoveries under the PMI Policy are jeopardized for
reasons related to the financial condition of such insurer, it being understood
that the Company shall in no event have any responsibility or liability for any
failure to recover under the PMI Policy for such reason. If the Company
determines that recoveries are so jeopardized, it shall notify the Purchaser and
the Mortgagor, if required, and obtain from another Qualified Insurer a
replacement insurance policy. The Company shall not take any action which would
result in noncoverage under any applicable PMI Policy of any loss which, but for
the actions of the Company would have been covered thereunder. In connection
with any assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Company shall promptly notify the insurer under
the related PMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such PMI Policy and shall take all actions which
may be required by such insurer as a condition to the continuation of coverage
under such PMI Policy. If such PMI Policy is terminated as a result of such
assumption or substitution of liability, the Company shall obtain a replacement
PMI Policy as provided above.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy in a timely fashion in accordance with the terms of
such PMI Policy and, in this regard, to take such action
51
as shall be necessary to permit recovery under any PMI Policy respecting a
defaulted First Lien Mortgage Loan. Pursuant to Section 4.04, any amounts
collected by the Company under any PMI Policy shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 4.05.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Purchaser or the Purchaser's designee, or in
the event the Purchaser is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such Person
or Persons as shall be consistent with an Opinion of Counsel obtained by the
Company from any attorney duly licensed to practice law in the state where the
REO Property is located. The Person or Persons holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as nominee
for the Purchaser.
The Company shall manage, conserve, protect and operate each REO Property
for the Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Company deems to
be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event prior to the
close of the third calendar year beginning after the year in which title has
been taken to such REO Property, unless (i) a REMIC election has not been made
with respect to the arrangement under which the Mortgage Loans and the REO
Property are held, and (ii) the Company determines that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than three years is permitted under the foregoing sentence and is necessary to
sell any REO Property, (i) the Company shall report monthly to the Purchaser as
to the progress being made in selling such REO Property and (ii) if a purchase
money mortgage is taken in connection with such sale, such purchase money
mortgage shall name the Company as mortgagee, and such purchase money mortgage
shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Company and Purchaser shall be entered into
with respect to such purchase money mortgage.
The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
52
The disposition of REO Property shall be carried out by the Company at such
price, and upon such terms and conditions, as the Company deems to be in the
best interests of the Purchaser. The proceeds of sale of the REO Property shall
be promptly deposited in the Custodial Account. As soon as practical thereafter
the expenses of such sale shall be paid and the Company shall reimburse itself
for any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to Section 5.03. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw from the Custodial Account in accordance with
Section 4.05, the funds necessary for the proper operation management and
maintenance of the REO Property, including the cost of maintaining any hazard
insurance pursuant to Section 4.10 and the fees of any managing agent of the
Company, or the Company itself. The Company shall make monthly distributions on
each Remittance Date to the Purchaser of the net cash flow from the REO Property
(which shall equal the revenues from such REO Property net of the expenses
described in this Section 4.16 and of any reserves reasonably required from time
to time to be maintained to satisfy anticipated liabilities for such expenses).
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the Company
shall furnish to the Purchaser on or before the Remittance Date each month a
statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Company's efforts in connection with the
sale of such REO Property and any rental of such REO Property incidental to the
sale thereof for the previous month. That statement shall be accompanied by such
other information as the Purchaser shall reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the Company
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property,
the Company shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code. The Company shall file information reports with
respect to the receipt of mortgage interest received in a trade or business and
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property as required by the Code. Such reports shall be in form
and substance sufficient to meet the reporting requirements imposed by the Code.
Section 4.20 Prepayment Penalty Waivers.
53
To the extent consistent with the terms of this Agreement, the Company may
waive (or permit a subservicer to waive) a Prepayment Penalty only under the
following circumstances: (i) such waiver is standard and customary in servicing
similar Mortgage Loans and (ii) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Company,
maximize recovery of total proceeds, taking into account the value of such
Prepayment Penalty and the related Mortgage Loan.
The Company shall pay the amount of any Prepayment Penalty (to the extent
not collected and remitted to the Purchaser) to the Purchaser or its assignees
if (1) the representation in Section 3.02(xx) is breached and such breach
materially and adversely affects the interests of the Purchaser or its assigns,
or (2) the Company waives any Prepayment Penalty other than as permitted under
this Section 4.20. The Company shall pay the amount of such Prepayment Penalty,
for the benefit of the Purchaser or any assignee of the Purchaser, by depositing
such amount into the Custodial Account at the time that the amount prepaid on
the related Mortgage Loan is required to be deposited into the Custodial
Account.
Section 4.21 Credit Reporting.
For each Mortgage Loan, the Company shall furnish on a monthly basis
complete information on the related borrower credit files to Equifax, Experian
and Trans Union Credit Information Company, in accordance with the Fair Credit
Reporting Act and its implementing regulations.
Section 4.22 Confidentiality/Protection of Customer Information.
The Company shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except to the extent that it is reasonable and necessary
for the Company to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies. Each party agrees that it shall
comply with all applicable laws and regulations regarding the privacy or
security of Customer Information shall maintain appropriate administrative,
technical and physical safeguards to protect the security, confidentiality and
integrity of Customer Information, including maintaining security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information, 66 Fed. Reg. 8616 (the
"Interagency Guidelines"). For purposes of this Section, the term "Customer
Information" shall have the meaning assigned to it in the Interagency
Guidelines.
Section 4.23 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Company shall
adjust the Mortgage Interest Rate on the related Adjustment Date in compliance
with the requirements of applicable law and the related Mortgage and Mortgage
Note. The Company shall execute and deliver any and all necessary notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate adjustments. Upon the discovery by
the Company or the receipt of notice from the Purchaser that the Company has
failed to adjust a Mortgage Interest Rate in accordance with the terms of the
related Mortgage
54
Note, the Company shall immediately deposit in the Custodial Account from its
own funds the amount of any interest loss or deferral caused the Purchaser
thereby.
Section 4.24 Establishment of and Deposits to Subsidy Account.
(a) The Company shall segregate and hold all Subsidy Funds collected and
received pursuant to the Subsidy Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Subsidy
Accounts, in the form of time deposit or demand accounts, titled "Xxxxx Fargo
Bank, N.A., in trust for the Purchaser, its successors or assigns, and/or
subsequent purchasers of Residential Mortgage Loans, and various Mortgagors."
The Subsidy Account shall be an eligible deposit account established with an
eligible institution.
(b) The Company shall, from time to time, withdraw funds from the Subsidy
Account for the following purposes:
(i) to deposit in the Custodial Account in the amounts and in the
manner provided for in Section 4.04(xi);
(ii) to transfer funds to another eligible institution in accordance
with Section 4.09 hereof;
(iii) to withdraw funds deposited in error; and
(iv) to clear and terminate the Subsidy Account upon the termination
of this Agreement.
(c) Notwithstanding anything to the contrary elsewhere in this Agreement,
the Company may employ the Escrow Account as the Subsidy Account to the extent
that the Company can separately identify any Subsidy Funds deposited therein.
Section 4.25 Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company under this
Agreement or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (a) of this Section 4.25. The Company shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Company under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (b) of this Section 4.25.
(a) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subservicer. The
Company shall cause any Subservicer used by the Company (or by any
Subservicer) for the benefit of the Purchaser and any Depositor to comply
with the provisions of this Section 4.25 and with Sections 6.04, 6.06,
9.01(d)(iii), 9.01(d)(v), 9.01(d)(vi) and 9.01(e) of this Agreement to
55
the same extent as if such Subservicer were the Company, and to provide the
information required with respect to such Subservicer under Section
9.01(d)(iv) of this Agreement. The Company shall be responsible for
obtaining from each Subservicer and delivering to the Purchaser and any
Depositor any servicer compliance statement required to be delivered by
such Subservicer under Section 6.04 and any assessment of compliance and
attestation required to be delivered by such Subservicer under Section 6.06
and any certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 6.06 as
and when required to be delivered.
(b) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subcontractor. The
Company shall promptly upon request provide to the Purchaser and any
Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance satisfactory to
the Purchaser and such Depositor) of the role and function of each
Subcontractor utilized by the Company or any Subservicer, specifying (i)
the identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
Servicing Criteria will be addressed in assessments of compliance provided
by each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06 and 9.01(e) of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section 6.06,
in each case as and when required to be delivered.
Section 4.26 Subordination of Second Lien Mortgage Loans.
The Company is authorized, without the prior approval of the Purchaser, to
consent to the refinancing of any Superior Lien on a Mortgaged Property,
provided, that the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing.
Where permitted by law and where the senior lienholder is required to
notify a junior lienholder be named as a party defendant in foreclosure
proceedings in order to foreclose such junior lienholder's equity of redemption,
the Company shall, at the reasonable expense of the Purchaser, file (or cause to
be filed) a request for notice of any action by a superior lienholder under a
related senior lien for the protection of the Purchaser's interest in the
related Second Lien Mortgage Loan.
If the Company is notified that any superior lienholder has accelerated or
intends to accelerate the obligations secured by the Superior Lien, or has
declared or intends to declare a default under the superior mortgage or the
promissory note secured thereby, or has filed or
56
intends to file an election to have the Mortgaged Property sold or foreclosed,
the Company shall take whatever actions are necessary to protect the interests
of the Purchaser, and/or to preserve the security of the related Mortgage Loan,
subject to any requirements applicable to real estate mortgage investment
conduits pursuant to the Code. The Company shall advance the funds necessary to
cure the default or reinstate the superior lien if the Company determines that
such advance is in the best interests of the Purchaser. The Company shall not
make such an advance except to the extent that it determines in its reasonable
good faith judgment that such advance will be recoverable from Liquidation
Proceeds on the related Mortgage Loan. The Company shall thereafter take such
action as is necessary to recover the amount so advanced.
Section 4.27 Application of Buydown Funds.
With respect to each Buydown Mortgage Loan, the Company shall have
deposited into the Escrow Account, no later than the last day of the month,
Buydown Funds in an amount equal to the aggregate undiscounted amount of
payments that, when added to the amount the Mortgagor on such Mortgage Loan is
obligated to pay on all Due Dates in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payments which are required to
be paid by the Mortgagor under the terms of the related Mortgage Note (without
regard to the related Buydown Agreement as if the Mortgage Loan were not subject
to the terms of the Buydown Agreement). With respect to each Buydown Mortgage
Loan, the Company will distribute to the Purchaser on each Remittance Date an
amount of Buydown Funds equal to the amount that, when added to the amount
required to be paid on such date by the related Mortgagor, pursuant to and in
accordance with the related Buydown Agreement, equals the full Monthly Payment
that would otherwise be required to be paid on such Mortgage Loan by the related
Mortgagor under the terms of the related Mortgage Note (as if the Mortgage Loan
were not a Buydown Mortgage Loan and without regard to the related Buydown
Agreement).
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan
during the Buydown Period and the Mortgaged Property securing such Buydown
Mortgage Loan is sold in the liquidation thereof (either by the Company or the
insurer under any related Primary Insurance Policy) the Company shall, on the
Remittance Date following the date upon which Liquidation Proceeds or REO
Disposition proceeds are received with respect to any such Buydown Mortgage
Loan, distribute to the Purchaser all remaining Buydown Funds for such Mortgage
Loan then remaining in the Escrow Account. Pursuant to the terms of each Buydown
Agreement, any amounts distributed to the Purchaser in accordance with the
preceding sentence will be applied to reduce the outstanding principal balance
of the related Buydown Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan
prepays such Mortgage Loan in it entirety during the related Buydown Period, the
Company shall be required to withdraw from the Escrow Account any Buydown Funds
remaining in the Escrow Account with respect to such Buydown Mortgage Loan in
accordance with the related Buydown Agreement. If a principal prepayment by a
Mortgagor on a Buydown Mortgage Loan during the related Buydown Period, together
with any Buydown Funds then remaining in the Escrow Account related to such
Buydown Mortgage Loan, would result in a principal prepayment of the entire
unpaid principal balance of the Buydown Mortgage Loan, the Company shall
distribute to the Purchaser on the Remittance Date occurring in the month
immediately succeeding the month in which such Principal Prepayment is
57
received, all Buydown Funds related to such Mortgage Loan so remaining in the
Escrow Account, together with any amounts required to be deposited into the
Custodial Account.
Section 4.28 Letter of Credit Compliance.
Notwithstanding any other provision of this Agreement, the Company shall
comply with all the requirements of any Letter of Credit so as to assure the
full benefit of such Letter of Credit to the Purchaser.
Section 4.29 Letter of Credit Draws.
The Company shall take all steps necessary to make draws under any Letter
of Credit in accordance with the provisions thereof and shall draw on each
Letter of Credit all amounts payable thereunder within the time frame required
by the Letter of Credit or such shorter time within which the Company can effect
such draw (not to exceed thirty (30) calendar days) following (i) the date the
related Pledged Asset Mortgage Loan becomes ninety (90) days or more delinquent
or (ii) the receipt of notice of non-renewal from the Pledge Holder at any time
prior to the date on which all amounts owed under the related Pledged Asset
Mortgage Loan are less than or equal to 80% of the Appraised Value of the
related Mortgaged Property. The Company shall notify the Purchaser promptly in
writing upon receipt of notice from the Pledge Holder of non-renewal of any
Letter of Credit. Upon receipt of any amounts as a result of a draw on a Letter
of Credit because of the non-renewal of such Letter of Credit or as a result of
the Pledged Asset Mortgage Loan continuing in default for ninety (90) or more
days, the Company shall deposit such amounts in the Custodial Account and such
amount shall be treated as a payment of principal.
Section 4.30 Assignment of the Letter of Credit.
Notwithstanding anything to the contrary in this Agreement (including,
without limitation, the termination or transfer of the servicing rights and/or
obligations of the Company pursuant to Articles X and XI hereof), the Company,
as beneficiary under any Non-Assigned Letters of Credit, shall transfer and
assign, at no cost to the Purchaser, each Non-Assigned Letter of Credit to the
Purchaser in accordance with the provisions thereof within ten (10) days of such
termination or transfer. In addition, the Company shall forward within one (1)
Business Day of receipt any notice received of non-renewal of any Letter of
Credit. Any funds received by the Company from draws on the Non-Assigned Letters
of Credit after the Company is no longer the servicer hereunder shall be
remitted by the Company to the successor servicer for deposit into the Custodial
Account.
Section 4.31 Pledge Holder Defaults.
Upon a default under the Letter of Credit by the Pledge Holder, the Company
shall take possession of the assets securing the Letter of Credit and shall
deposit such assets or the proceeds thereof in the Custodial Account and apply
them as a prepayment of the related Pledged Asset Mortgage Loan. If such default
described in the prior sentence occurs at any time that the Company is no longer
the servicer of the related Pledged Asset Mortgage Loan, the
58
Company shall, upon knowledge of such default or notice from the successor
servicer of such default with respect to any Non-Assigned Letter of Credit
forward such proceeds to the successor servicer for deposit into the Custodial
Account.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment Period
which amounts shall be remitted on the following Remittance Date, together with
any additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(ix);
minus (d) any amounts attributable to Monthly Payments collected but due on a
Due Date or Dates subsequent to the first day of the month of the Remittance
Date. All cash flows from Prepayment Penalties shall be passed through to the
Purchaser and shall not be waived by the Seller, except pursuant to Section
4.20.
With respect to any remittance received by the Purchaser after the second
(2nd) Business Day following the Business Day on which such payment was due, the
Company shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Company on the date such late payment is made and shall cover the
period commencing with the day following such second (2nd) Business Day and
ending with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Company of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Company.
Section 5.02 Statements to Purchaser.
Not later than the tenth (10th) calendar day of the month, the Company
shall furnish in an agreed upon electronic format to the Purchaser or its
designee, a monthly loan level scheduled remittance advice, trial balance report
and payment and payoff activity detail, as to the period ending on the last day
of the preceding month.
Section 5.03 Monthly Advances by Company.
59
On the Business Day immediately preceding each Remittance Date, the Company
shall deposit in the Custodial Account from its own funds or from amounts held
for future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 4.01. Any amounts held for future distribution and so used
shall be replaced by the Company by deposit in the Custodial Account on or
before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Purchaser required to be made
on such Remittance Date. The Company's obligation to make such Monthly Advances
as to any Mortgage Loan will continue through the last Monthly Payment due prior
to the payment in full of the Mortgage Loan, or through the last Remittance Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including REO Disposition Proceeds, Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan, provided,
however, that such obligation shall cease if the Company determines, in its sole
reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Company from Liquidation Proceeds, REO Disposition
Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise with respect
to a particular Mortgage Loan. In the event that the Company determines that any
such advances are non-recoverable, the Company shall provide the Purchaser with
a certificate signed by two officers of the Company evidencing such
determination. The Company shall not have an obligation to make such Monthly
Advances as to any Mortgage Loan with respect to shortfalls relating to the
Servicemembers Civil Relief Act or similar state and local laws.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the Person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Company shall not exercise such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy, if any.
If the Company reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the Person to whom such property has
been conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Company is unable under applicable law to require that the original
60
Mortgagor remain liable under the Mortgage Note and the Company has the prior
consent of the primary mortgage guaranty insurer, a substitution of liability
agreement with the purchaser of the Mortgaged Property pursuant to which the
original Mortgagor is released from liability and the purchaser of the Mortgaged
Property is substituted as Mortgagor and becomes liable under the Mortgage Note.
If an assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser's consent.
To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loan. If the credit worthiness of the proposed
transferee does not meet such underwriting criteria, the Company diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
Section 6.02 Satisfaction of Mortgages and Release of Retained Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Company shall notify the Purchaser in the
Monthly Remittance Advice as provided in Section 5.02, and may request the
release of any applicable Mortgage Loan Documents.
If the Company satisfies or releases the lien of the Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage
(other than as a result of a modification of the Mortgage pursuant to the terms
of this Agreement or liquidation of the Mortgaged Property pursuant to the terms
of this Agreement) or should the Company otherwise prejudice any rights the
Purchaser may have under the mortgage instruments, upon written demand of the
Purchaser, the Company shall repurchase the related Mortgage Loan at the
Repurchase Price by deposit thereof in the Custodial Account within two (2)
Business Days of receipt of such demand by the Purchaser. The Company shall
maintain the Fidelity Bond and Errors and Omissions Insurance Policy as provided
for in Section 4.12 insuring the Company against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be entitled
to retain from the interest payment the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of the
same unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the
61
interest portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by Section 4.05) of such Monthly Payments.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and late payment charges shall be retained by
the Company to the extent not required to be deposited in the Custodial Account.
The Company shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 6.04 Annual Statements as to Compliance.
On or before March 1 of each calendar year, commencing in 2007, the Company
shall deliver to the Purchaser and any Depositor a statement of compliance
addressed to the Purchaser and such Depositor and signed by an authorized
officer of the Company, to the effect that (i) a review of the Company's
activities during the immediately preceding calendar year (or applicable portion
thereof) and of its performance under this Agreement and any applicable
Reconstitution Agreement during such period has been made under such officer's
supervision, and (ii) to the best of such officer's knowledge, based on such
review, the Company has fulfilled all of its obligations under this Agreement
and any applicable Reconstitution Agreement in all material respects throughout
such calendar year (or applicable portion thereof) or, if there has been a
failure to fulfill any such obligation in any material respect, specifically
identifying each such failure known to such officer and the nature and status
thereof.
Section 6.05 Annual Independent Public Accountants' Servicing Report.
Except with respect to any Mortgage Loans that are the subject of a
Securitization Transaction, on or before March 1, of each calendar year,
commencing in 2007, the Company, at its expense, shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to furnish a statement to each Purchaser to the
effect that such firm has examined certain documents and records relating to the
servicing of the mortgage loans similar in nature and that such firm is of the
opinion that the provisions of this or similar agreements have been complied
with, and that, on the basis of such examination conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers,
nothing has come to their attention which would indicate that such servicing has
not been conducted in compliance therewith, except for (i) such exceptions as
such firm shall believe to be immaterial, and (ii) such other exceptions as
shall be set forth in such statement. By providing Purchaser a copy of a Uniform
Single Attestation Program Report from their independent public accountant's on
an annual basis, Company shall be considered to have fulfilled its obligations
under this Section 6.05.
Section 6.06 Report on Assessment of Compliance and Attestation.
With respect to any Mortgage Loans that are the subject of a Securitization
Transaction, on or before March 1 of each calendar year, commencing in 2007, the
Company shall:
62
(i) deliver to the Purchaser and any Depositor a report (in form and
substance reasonably satisfactory to the Purchaser and such
Depositor) regarding the Company's assessment of compliance with the
Servicing Criteria during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be addressed to the
Purchaser and such Depositor and signed by an authorized officer of
the Company, and shall address each of the Servicing Criteria
specified substantially in the form of Exhibit H hereto delivered to
the Purchaser at the time of any Securitization Transaction;
(ii) deliver to the Purchaser and any Depositor a report of a registered
public accounting firm reasonably acceptable to the Purchaser and
such Depositor that attests to, and reports on, the assessment of
compliance made by the Company and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities
Act and the Exchange Act;
(iii) cause each Subservicer and each Subcontractor, determined by the
Company pursuant to Section 4.25(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB,
to deliver to the Purchaser and any Depositor an assessment of
compliance and accountants' attestation as and when provided in
paragraphs (i) and (ii) of this Section 6.06; and
(iv) if requested by the Purchaser or any Depositor not later than
February 1 of the calendar year in which such certification is to be
delivered, deliver to the Purchaser, any Depositor and any other
Person that will be responsible for signing the certification (a
"Sarbanes Certification") required by Rules 13a-14(d) and 15d-14(d)
under the Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx
Act of 2002) on behalf of an asset-backed issuer with respect to a
Securitization Transaction a certification in the form attached
hereto as Exhibit I.
The Company acknowledges that the parties identified in clause (iv) above
may rely on the certification provided by the Company pursuant to such clause in
signing a Sarbanes Certification and filing such with the Commission. Neither
the Purchaser nor any Depositor will request delivery of a certification under
clause (iv) above unless a Depositor is required under the Exchange Act to file
an annual report on Form 10-K with respect to an issuing entity whose asset pool
includes Mortgage Loans.
Each assessment of compliance provided by a Subservicer pursuant to Section
6.06(i) shall address each of the Servicing Criteria specified substantially in
the form of Exhibit H hereto delivered to the Purchaser at the time of any
Securitization Transaction or, in the case of a Subservicer subsequently
appointed as such, on or prior to the date of such appointment. An assessment of
compliance provided by a Subcontractor pursuant to Section 6.06(iii) need not
address any elements of the Servicing Criteria other than those specified by the
Company pursuant to Section 4.25.
63
Section 6.07 Remedies.
(i) Any failure by the Company, any Subservicer, any Subcontractor or any
Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under Article IX,
Sections 4.25, 6.04 or 6.06, or any breach by the Company of a representation or
warranty set forth in Section 9.01(d)(vi)(A), or in a writing furnished pursuant
to Section 9.01(d)(vi)(B) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is not cured
by such closing date, or any breach by the Company of a representation or
warranty in a writing furnished pursuant to Section 9.01(d)(vi)(B) to the extent
made as of a date subsequent to such closing date, shall, except as provided in
sub-clause (ii) of this Section, immediately and automatically, without notice
or grace period, constitute an Event of Default with respect to the Company
under this Agreement and any applicable Reconstitution Agreement, and shall
entitle the Purchaser or Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company as servicer under this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Company; provided that to
the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
(ii) Any failure by the Company, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants' letter when and
as required under Sections 6.04 or 6.06, including (except as provided below)
any failure by the Company to identify any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten (10) calendar days after the date on which such
information, report, certification or accountants' letter was required to be
delivered shall constitute an Event of Default with respect to the Company under
this Agreement and any applicable Reconstitution Agreement, and shall entitle
the Purchaser or Depositor, as applicable, in its sole discretion to terminate
the rights and obligations of the Company under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding anything in
this Agreement to the contrary) of any compensation to the Company; provided
that to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to terminate the
rights and obligations of the Company pursuant to this Section 6.07(ii) if a
failure of the Company to identify a Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or functions of such Subcontractor with respect
to mortgage loans other than the Mortgage Loans.
(iii) The Company shall promptly reimburse the Purchaser (or any designee
of the Purchaser, such as a master servicer) and any Depositor, as applicable,
for all reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the
64
Mortgage Loans to a successor servicer. The provisions of this paragraph shall
not limit whatever rights the Purchaser or any Depositor may have under other
provisions of this Agreement and/or any applicable Reconstitution Agreement or
otherwise, whether in equity or at law, such as an action for damages, specific
performance or injunctive relief.
Section 6.08 Right to Examine Company Records.
The Purchaser, or its designee, shall have the right to examine and audit
any and all of the books, records, or other information of the Company, whether
held by the Company or by another on its behalf, with respect to or concerning
this Agreement or the Mortgage Loans, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice. The Purchaser shall pay its own expenses associated with such
examination.
Section 6.09 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Company shall not take
any action, cause the REMIC to take any action or fail to take any action that,
under the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of the REMIC as a REMIC or (ii) result in the imposition of
a tax upon the REMIC (including but not limited to the tax on "prohibited
transactions" as defined in Section 860F(a)(2) of the Code and the tax on
"contributions" to a REMIC set forth in Section 860G(d) of the Code) unless the
Company has received an Opinion of Counsel (at the expense of the party seeking
to take such action) to the effect that the contemplated action will not
endanger such REMIC status or result in the imposition of any such tax.
ARTICLE VII
COMPANY TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan provided for herein. All other special reports or information not provided
for herein as shall be necessary, reasonable, or appropriate with respect to the
Purchaser or any regulatory agency will be provided at the Purchaser's expense.
All such reports, documents or information shall be provided by and in
accordance with all reasonable instructions and directions which the Purchaser
may give.
The Company shall execute and deliver all such instruments and take all
such action as the Purchaser may reasonably request from time to time, in order
to effectuate the purposes and to carry out the terms of this Agreement.
65
Section 7.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective Purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two (2) fiscal years for which such
a statement is available, as well as a Consolidated Statement of Condition at
the end of the last two (2) fiscal years covered by such Consolidated Statement
of Operations. The Company, upon request, also shall make available any
comparable interim statements to the extent any such statements have been
prepared by or on behalf of the Company (and are available upon request to
members or stockholders of the Company or to the public at large).
The Company also shall make available to Purchaser or prospective Purchaser
a knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Company or the financial
statements of the Company, and to permit any prospective purchaser to inspect
the Company's servicing facilities for the purpose of satisfying such
prospective purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE VIII
THE COMPANY
Section 8.01 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and hold it harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Company to perform its duties, comply with its obligations and covenants under
the terms of this Agreement and service the Mortgage Loans all in strict
compliance with the terms of this Agreement. The Company immediately shall
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Company shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Company for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Company's
indemnification pursuant to Section 3.03, or the failure of the Company to
service and administer the Mortgage Loans in strict compliance with the terms of
this Agreement.
Section 8.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and franchises
and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or
66
shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided, however, that
the successor or surviving Person shall be an institution (i) having a net worth
of not less than $15,000,000 and (ii) which is a Xxxxxx Xxx/Xxxxxxx Mac-approved
seller/servicer in good standing. Furthermore, in the event the Company
transfers or otherwise disposes of all or substantially all of its assets to an
affiliate of the Company, such affiliate shall satisfy the condition above, and
shall also be fully liable to the Purchaser for all of the Company's obligations
and liabilities hereunder.
Section 8.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or agents
of the Company shall be under any liability to the Purchaser for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment, provided, however, that this
provision shall not protect the Company or any such Person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement or
any other liability which would otherwise be imposed under this Agreement. The
Company and any director, officer, employee or agent of the Company may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Company
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however, that the Company may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the Company shall be entitled to reimbursement from the
Purchaser of the reasonable legal expenses and costs of such action.
Section 8.04 Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy of
its servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Company shall neither assign this Agreement or the servicing rights hereunder or
sell or otherwise dispose of all of its property or assets without the prior
written consent of the Purchaser, which consent shall not be unreasonably
withheld by the Purchaser, with the understanding that any successor servicer
meet the requirements of this Agreement and be acceptable to the Rating Agencies
and trustee upon reconstitution.
67
The Company shall not resign from the obligations and duties hereby imposed
on it except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without in any way limiting the generality of this Section 8.04, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or sell or otherwise dispose of all or substantially
all of its property or assets, without the prior written consent of the
Purchaser, then the Purchaser shall have the right to terminate this Agreement
upon notice given as set forth in Section 10.01, without any payment of any
penalty or damages and without any liability whatsoever to the Purchaser or any
third party.
ARTICLE IX
AGENCY SALES, SECURITIZATION TRANSACTIONS AND WHOLE LOAN TRANSFERS
Section 9.01 Removal of Mortgage Loans from Inclusion Under this Agreement Upon
an Agency Sale, Whole Loan Transfer or Securitization Transaction
The Purchaser and the Company agree that with respect to some or all of the
Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers, Agency Sales or Securitization Transactions, retaining the Company as
the servicer thereof or subservicer if a master servicer is employed, or as
applicable the "seller/servicer." On the Reconstitution Date, the Mortgage Loans
transferred may cease to be covered by this Agreement; provided, however, that,
in the event that any Mortgage Loan transferred pursuant to this Section 9.01 is
rejected by the transferee, the Company shall continue to service such rejected
Mortgage Loan on behalf of the Purchaser in accordance with the terms and
provisions of this Agreement.
The Company shall cooperate with the Purchaser in connection with each
Whole Loan Transfer, Agency Sale or Securitization Transaction in accordance
with this Section 9.01. In connection therewith:
(a) the Company shall make all representations and warranties with respect
to the Mortgage Loans as of the Closing Date and with respect to the
Company itself as of the closing date of each Whole Loan Transfer,
Agency Sale or Securitization Transaction;
(b) the Company shall negotiate in good faith and execute any
seller/servicer agreements required to effectuate the foregoing
provided such agreements create
68
no greater obligation or cost on the part of the Company than
otherwise set forth in this Agreement;
(c) the Company shall provide such additional representations, warranties,
covenants, opinions of counsel or certificates of officers of the
Company as are reasonably believed necessary by the trustee, any
rating agency, guarantor or the Purchaser, as the case may be, in
connection with such Whole Loan Transfers, Agency Sales or
Securitization Transactions. The Purchaser shall pay all third party
costs associated with the preparation of such information. The Company
shall execute any seller/servicer agreements required within a
reasonable period of time after receipt of such seller/servicer
agreements which time shall be sufficient for the Company and
Company's counsel to review such seller/servicer agreements. Under
this Agreement, the Company shall retain a Servicing Fee for each
Mortgage Loan at the Servicing Fee Rate;
(d) in connection with any Securitization Transaction, the Company shall
(1) within five (5) Business Days following request by the Purchaser
or any Depositor, provide to the Purchaser and such Depositor (or, as
applicable, cause each Third-Party Originator and each Subservicer to
provide), in writing and in form and substance reasonably satisfactory
to the Purchaser and such Depositor, the information and materials
specified in paragraphs (i), (ii), (iii) and (vii) of this subsection
(d), and (2) as promptly as practicable following notice to or
discovery by the Company, provide to the Purchaser and any Depositor
(in writing and in form and substance reasonably satisfactory to the
Purchaser and such Depositor) the information specified in paragraph
(iv) of this subsection (d).
(i) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding (1) the Company, as
originator of the Mortgage Loans (including as an acquirer of
Mortgage Loans from a Qualified Correspondent), or (2) each
Third-Party Originator, and (3) as applicable, each Subservicer,
as is requested for the purpose of compliance with Items
1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and
how long the originator has been engaged in originating
residential mortgage loans, which description shall include
a discussion of the originator's experience in originating
mortgage loans of a similar type as the Mortgage Loans;
information regarding the size and composition of the
originator's origination portfolio; and information that may
be material, in the good faith judgment of the Purchaser or
any Depositor, to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting
or underwriting criteria for mortgage loans of similar
type(s) as the
69
Mortgage Loans and such other information as the Purchaser
or any Depositor may reasonably request for the purpose of
compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against
the Company, each Third-Party Originator and each
Subservicer; and
(D) a description of any affiliation or relationship (of a type
described in Item 1119 of Regulation AB) between the
Company, each Third-Party Originator, each Subservicer and
any of the following parties to a Securitization
Transaction, as such parties are identified to the Company
by the Purchaser or any Depositor in writing in advance of a
Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(ii) If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party
Originator to provide) Static Pool Information with respect to
the mortgage loans (of a similar type as the Mortgage Loans, as
reasonably identified by the Purchaser as provided below)
originated by (1) the Company, if the Company is an originator
of Mortgage Loans (including as an acquirer of Mortgage Loans
from a Qualified Correspondent), and/or (2) each Third-Party
Originator. Such Static Pool Information shall be prepared by
the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of
Item 1105(a)(1)-(3) of Regulation AB. To the extent that there
is reasonably available to the Company (or Third-Party
Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be
entitled to specify whether some or all of such information
shall be provided pursuant to this paragraph. The content of
such Static Pool Information may be in the form customarily
provided by the Company, and need not be customized for the
Purchaser or any Depositor. Such Static Pool Information for
each vintage origination year or prior securitized pool, as
applicable, shall be presented in increments no less frequently
than quarterly over the life of the mortgage loans included in
the vintage origination year or prior securitized pool. The most
recent periodic
70
increment must be as of a date no later than one hundred
thirty-five (135) days prior to the date of the prospectus or
other offering document in which the Static Pool Information is
to be included or incorporated by reference. The Static Pool
Information shall be provided in an electronic format that
provides a permanent record of the information provided, such as
a portable document format (pdf) file, or other such electronic
format reasonably required by the Purchaser or the Depositor, as
applicable.
Promptly following notice or discovery of a material error in
Static Pool Information provided pursuant to the immediately
preceding paragraph (including an omission to include therein
information required to be provided pursuant to such paragraph),
the Company shall provide corrected Static Pool Information to
the Purchaser or any Depositor, as applicable, in the same
format in which Static Pool Information was previously provided
to such party by the Company.
If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party
Originator to provide), at the expense of the requesting party
(to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably
acceptable to the Purchaser or Depositor, as applicable,
pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January
1, 2006 or, in the case of Static Pool Information with respect
to the Company's or Third-Party Originator's originations or
purchases, to calendar months commencing January 1, 2006, as the
Purchaser or such Depositor shall reasonably request. Such
letters shall be addressed to and be for the benefit of such
parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any sponsor, any Depositor
and any broker dealer acting as underwriter, placement agent or
initial purchaser with respect to a Securitization Transaction.
Any such statement or letter may take the form of a standard,
generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the
Purchaser or such Depositor.
(iii) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding the Company, as
servicer of the Mortgage Loans, and each Subservicer (each of
the Company and each Subservicer, for purposes of this
paragraph, a "Servicer"), as is requested for the purpose of
compliance with Items 1108 of Regulation AB. Such information
shall include, at a minimum:
(A) the Servicer's form of organization;
71
(B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the
Servicer's experience in servicing assets of any type as
well as a more detailed discussion of the Servicer's
experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution
Agreements; information regarding the size, composition and
growth of the Servicer's portfolio of residential mortgage
loans of a type similar to the Mortgage Loans and
information on factors related to the Servicer that may be
material, in the good faith judgment of the Purchaser or any
Depositor, to any analysis of the servicing of the Mortgage
Loans or the related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of mortgage loans of
a type similar to the Mortgage Loans involving the
Servicer have defaulted or experienced an early
amortization or other performance triggering event
because of servicing during the three-year period
immediately preceding the related Securitization
Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable Servicing Criteria
with respect to other securitizations of residential
mortgage loans involving the Servicer as a servicer
during the three-year period immediately preceding the
related Securitization Transaction;
(4) whether the Servicer has been terminated as servicer in
a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing
performance test or trigger; and
(5) such other information as the Purchaser or any
Depositor may reasonably request for the purpose of
compliance with Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during the three-year
period immediately preceding the related Securitization
Transaction to the Servicer's policies or procedures with
respect to the servicing function it will perform under this
Agreement and any Reconstitution Agreements for mortgage
loans of a type similar to the Mortgage Loans;
72
(D) information regarding the Servicer's financial condition, to
the extent that there is a material risk that an adverse
financial event or circumstance involving the Servicer could
have a material adverse effect on the performance by the
Company of its servicing obligations under this Agreement or
any Reconstitution Agreement;
(E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing
portfolio of residential mortgage loans for the three-year
period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an
authorized officer of the Servicer to the effect that the
Servicer has made all advances required to be made on
residential mortgage loans serviced by it during such
period, or, if such statement would not be accurate,
information regarding the percentage and type of advances
not made as required, and the reasons for such failure to
advance;
(F) a description of the Servicer's processes and procedures
designed to address any special or unique factors involved
in servicing loans of a similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as
through liquidation of mortgaged properties, sale of
defaulted mortgage loans or workouts; and
(H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any
grace period, re-aging, restructuring, partial payments
considered current or other practices with respect to
delinquency and loss experience.
(iv) If so requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the
Exchange Act with respect to any class of asset-backed
securities, the Company shall (or shall cause each Subservicer
and Third-Party Originator to) (1) notify the Purchaser and any
Depositor in writing of (A) any material litigation or
governmental proceedings pending against the Company, any
Subservicer or any Third-Party Originator and (B) any
affiliations or relationships that develop following the closing
date of a Securitization Transaction between the Company, any
Subservicer or any Third-Party Originator and any of the parties
specified in Section 9.01(d)(i)(D) (and any other parties
identified in writing by the requesting party) with respect to
such Securitization Transaction, and (2) provide to the
Purchaser and any Depositor a description of such proceedings,
affiliations or relationships.
73
(v) As a condition to the succession to the Company or any
Subservicer as servicer or Subservicer under this Agreement or
any Reconstitution Agreement by any Person (i) into which the
Company or such Subservicer may be merged or consolidated, or
(ii) which may be appointed as a successor to the Company or any
Subservicer, the Company shall provide to the Purchaser and any
Depositor, at least fifteen (15) calendar days prior to the
effective date of such succession or appointment, (x) written
notice to the Purchaser and any Depositor of such succession or
appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all
information reasonably requested by the Purchaser or any
Depositor in order to comply with is reporting obligation under
Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
(vi) (A) The Company shall be deemed to represent to the Purchaser
and to any Depositor, as of the date on which information is
first provided to the Purchaser under this Section 9.01(d) that,
except as disclosed in writing to the Purchaser or such
Depositor prior to such date: (1) the Company is not aware and
has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Company;
(2) the Company has not been terminated as servicer in a
residential mortgage loan securitization, either due to a
servicing default or to application of a servicing performance
test or trigger; (3) no material noncompliance with the
applicable Servicing Criteria with respect to other
securitizations of residential mortgage loans involving the
Company as servicer has been disclosed or reported by the
Company; (4) no material changes to the Company's policies or
procedures with respect to the servicing function it will
perform under this Agreement and any Reconstitution Agreement
for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the
related Securitization Transaction; (5) there are no aspects of
the Company's financial condition that could have a material
adverse effect on the performance by the Company of its
servicing obligations under this Agreement or any Reconstitution
Agreement; (6) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the
Company, any Subservicer or any Third-Party Originator; and (7)
there are no affiliations, relationships or transactions
relating to the Company, any Subservicer or any Third-Party
Originator with respect to any Securitization Transaction and
any party thereto identified by the related Depositor of a type
described in Item 1119 of Regulation AB.
(B) If so requested by the Purchaser or any Depositor on any
date following the date on which information is first provided
to the Purchaser or any Depositor under this Section 9.01(d),
the Company shall, within five (5) Business Days following such
request, confirm in writing the
74
accuracy of the representations and warranties set forth in sub
clause (A) above or, if any such representation and warranty is
not accurate as of the date of such request, provide reasonably
adequate disclosure of the pertinent facts, in writing, to the
requesting party.
(vii) In addition to such information as the Company, as servicer, is
obligated to provide pursuant to other provisions of this
Agreement, if so requested by the Purchaser or any Depositor,
the Company shall provide such information reasonably available
to the Company regarding the performance or servicing of the
Mortgage Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item 1121
of Regulation AB. Such information shall be provided
concurrently with the monthly reports otherwise required to be
delivered by the servicer under this Agreement, commencing with
the first such report due not less than ten (10) Business Days
following such request.
(e) The Company shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each
Person responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act
with respect to such Securitization Transaction; each broker dealer
acting as underwriter, placement agent or initial purchaser, each
Person who controls any of such parties or the Depositor (within the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act); and the respective present and former directors,
officers, employees and agents of each of the foregoing and of the
Depositor, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification,
accountants' letter or other material provided in written or
electronic form under Sections 4.25, 6.04, 6.06, 9.01(c) and (d)
by or on behalf of the Company, or provided under Sections 4.25,
6.04, 6.06, 9.01(c) and (d) by or on behalf of any Subservicer,
Subcontractor or Third-Party Originator (collectively, the
"Company Information"), or (B) the omission or alleged omission
to state in the Company Information a material fact required to
be stated in the Company Information or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Company Information and not
to any other information communicated in connection with a sale
or purchase of securities, without regard to whether the
75
Company Information or any portion thereof is presented together
with or separately from such other information;
(ii) any failure by the Company, any Subservicer, any Subcontractor
or any Third-Party Originator to deliver any information,
report, certification, accountants' letter or other material
when and as required under Sections 4.25, 6.04, 6.06, 9.01(c)
and (d), including any failure by the Company to identify any
Subcontractor "participating in the servicing function" within
the meaning of Item 1122 of Regulation AB; or
(iii) any breach by the Company of a representation or warranty set
forth in Section 9.01(d)(vi)(A) or in a writing furnished
pursuant to Section 9.01(d)(vi)(B) and made as of a date prior
to the closing date of the related Securitization Transaction,
to the extent that such breach is not cured by such closing
date, or any breach by the Company of a representation or
warranty in a writing furnished pursuant to Section
9.01(d)(vi)(B) to the extent made as of a date subsequent to
such closing date.
In the case of any failure of performance described in sub-clause (ii)
of this Section 9.01(e), the Company shall promptly reimburse the
Purchaser, any Depositor, as applicable, and each Person responsible
for the preparation, execution or filing of any report required to be
filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to
such Securitization Transaction, for all costs reasonably incurred by
each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as
required by the Company, any Subservicer, any Subcontractor or any
Third-Party Originator.
(f) The Purchaser and each Person who controls the Purchaser (within the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act) shall indemnify the Company, each affiliate of the
Company, each Person who controls any of such parties or the Company
(within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act) and the respective present and former directors,
officers, employees and agents of each of the foregoing and of the
Company, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based upon:
(i) any untrue statement of a material fact contained or alleged to
be contained in any offering materials related to a
Securitization Transaction, including without limitation the
registration statement, prospectus, prospectus supplement, any
private placement memorandum, any freewriting prospectuses, any
ABS informational and computational material, any offering
circular, any computational material, and any
76
amendments or supplements to the foregoing (collectively, the
"Securitization Materials") or
(ii) the omission or alleged omission to state in the Securitization
Materials a material fact required to be stated in the
Securitization Materials or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading,
but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is other than a statement or
omission arising out of, resulting from, or based upon the Company
Information.
(g) in the event the Mortgage Loans become subject to a Xxxxxxx Mac
securitization, negotiate in good faith the terms of such
reconstitution agreements as may be required.
The Purchaser and the Company acknowledge and agree that the purpose of
Section 9.01(d) is to facilitate compliance by the Purchaser and any Depositor
with the provisions of Regulation AB and related rules and regulations of the
Commission. Although Regulation AB is applicable by its terms only to offerings
of asset-backed securities that are registered under the Securities Act, the
Company acknowledges that investors in privately offered securities may require
that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder (or
provision in a private offering of disclosure comparable to that required under
the Securities Act). The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with requests made by the Purchaser or any Depositor in good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any Securitization
Transaction, the Company shall cooperate fully with the Purchaser to deliver to
the Purchaser (including any of its assignees or designees) and any Depositor,
any and all statements, reports, certifications, records and any other
information necessary in the good faith determination of the Purchaser or any
Depositor to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Company, any Subservicer, any Third-Party Originator and the Mortgage Loans, or
the servicing of the Mortgage Loans, reasonably believed by the Purchaser or any
Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall cooperate
with the Company by providing timely notice of requests for information under
these provisions and by
77
reasonably limiting such requests to information required, in the Purchaser's
reasonable judgment, to comply with Regulation AB.
In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to the Reconstitution Date the Company shall
prepare an Assignment of Mortgage in blank or to the trustee from the Company
acceptable to the trustee for each Mortgage Loan that is part of the Whole Loan
Transfers, Agency Sales or Securitization Transactions. The Purchaser shall pay
all preparation and recording costs associated therewith, unless the Assignment
of Mortgage is the initial Assignment of Mortgage delivered pursuant to Section
2.03. The Company shall execute each Assignment of Mortgage, track such
Assignments of Mortgage to ensure they have been recorded and deliver them as
required by the trustee upon the Company's receipt thereof. Additionally, the
Company shall prepare and execute, at the direction of the Purchaser, any note
endorsements in connection with any and all seller/servicer agreements. If
required at any time by the Rating Agencies, Purchaser or successor purchaser in
connection with any Whole Loan Transfer, Agency Sale or Securitization
Transaction, the Company shall deliver such additional documents from its
Retained Mortgage File within ten (10) Business Days to the Custodian, successor
purchaser or other designee of the Purchaser as the Rating Agencies, Purchaser
or successor purchaser may require.
Notwithstanding any provisions of this Agreement to the contrary, all
Mortgage Loans sold or transferred to an Agency, shall be serviced in accordance
with the guidelines of the respective Agency. All Mortgage Loans (i) not sold or
transferred pursuant to Whole Loan Transfers, Agency Sales or Securitization
Transactions or (ii) that are subject to a Securitization Transaction for which
the related trust is terminated for any reason, shall remain subject to this
Agreement and shall continue to be serviced in accordance with the terms of this
Agreement and with respect thereto this Agreement shall remain in full force and
effect.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part of
the Company:
(i) any failure by the Company to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of five (5) days after the date upon which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Purchaser; or
(ii) failure by the Company duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the
Company set forth in this Agreement or in the Custodial Agreement
which continues unremedied for a period of thirty (30) days after the
date on which written notice of such failure,
78
requiring the same to be remedied, shall have been given to the
Company by the Purchaser or by the Custodian; or
(iii) failure by the Company to maintain its license to do business in any
jurisdiction where the Mortgaged Property is located if such license
is required; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, including
bankruptcy, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Company and such decree or order
shall have remained in force undischarged or unstayed for a period of
sixty (60) days; or
(v) the Company shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to the Company or of or relating to all or substantially all
of its property; or
(vi) the Company shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of
any applicable insolvency, bankruptcy or reorganization statute, make
an assignment for the benefit of its creditors, voluntarily suspend
payment of its obligations or cease its normal business operations
for three (3) Business Days; or
(vii) the Company ceases to meet the qualifications of a Xxxxxx Mae/Xxxxxxx
Mac servicer; or
(x) the Company attempts to assign its right to servicing compensation
hereunder or to assign this Agreement or the servicing
responsibilities hereunder in violation of Section 8.04; or
(xi) an Event of Default as defined in Section 6.07.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatever rights the Purchaser may have at law or
equity to damages, including injunctive relief and specific performance, the
Purchaser, by notice in writing to the Company, may terminate all the rights and
obligations of the Company under this Agreement and in and to the Mortgage Loans
and the proceeds thereof.
Upon receipt by the Company of such written notice, all authority and power
of the Company under this Agreement, whether with respect to the Mortgage Loans
or otherwise, shall pass to and be vested in the successor appointed pursuant to
Section 12.01. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor's
possession all Retained Mortgage Files, and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, including but
79
not limited to the transfer and endorsement or assignment of the Mortgage Loans
and related documents, at the Company's sole expense. The Company shall
cooperate with the Purchaser and such successor in effecting the termination of
the Company's responsibilities and rights hereunder, including without
limitation, the transfer to such successor for administration by it of all cash
amounts which shall at the time be credited by the Company to the Custodial
Account, Subsidy Account or Escrow Account or thereafter received with respect
to the Mortgage Loans.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the Company in
the performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Company and the Purchaser in writing.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the Company may
have hereunder, without cause as provided in this Section 11.02. Any such notice
of termination shall be in writing and delivered to the Company by registered
mail as provided in Section 12.05.
The Company shall be entitled to receive, as such liquidated damages, upon
the transfer of the servicing rights, an amount equal to 1.50% of the aggregate
outstanding principal amount of the Mortgage Loans as of the termination date
paid by the Purchaser to the Company with respect to all of the Mortgage Loans
for which a servicing fee rate of .50% is paid per annum. In the event that it
is terminated pursuant to this Section 11.02, the Company shall be required, at
the expense of the Purchaser, to deliver to the Custodian the entire contents of
the Retained Mortgage File, to the extent such contents were not previously
delivered to the Custodian pursuant to this Agreement or the Custodial
Agreement.
Section 11.03 Termination of Distressed Mortgage Loans.
80
Notwithstanding Section 11.02, the Purchaser may terminate, at its sole
option, this Agreement with respect to the servicing of those Mortgage Loans
that are determined to be Distressed Mortgage Loans as of the Notice Date. At
such time as the aggregate unpaid principal balance of all Mortgage Loans
delinquent in payment for a period of ninety-one (91) days or more, divided by
the aggregate unpaid principal balance of all Mortgage Loans equals or exceeds
six percent (6%), the servicing of all Distressed Mortgage Loans shall transfer
to the Special Servicer.
On each Notice Date, the Company shall send by facsimile or electronic mail
a Transfer Notice to the Special Servicer and Purchaser's designee (if so
requested) and shall mail to the Mortgagor of each Mortgage Loans listed in such
Transfer Notice a letter advising each such Mortgagor of the transfer of the
servicing of the related Mortgage Loan to the Special Servicer, in accordance
with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990; provided,
however, the content and format of such letter shall have the prior approval of
the Special Servicer. The Company shall promptly provide the Special Servicer
with copies of all such notices. On each Transfer Date, the Company shall
transfer the servicing of Distressed Mortgage Loans to the Special Servicer.
Not later than two (2) Business Days immediately following the Transfer
Date, the Company shall deliver to the Special Servicer, with respect to the
Distressed Mortgage Loans that were transferred to the Special Servicer on such
Transfer Date, all related Servicing Files and a loan level tape or other
electronic media containing loan set-up information in form reasonably
acceptable to the Special Servicer. Within five (5) Business Days following such
Transfer Date, the Company shall deliver a final trial balance (subject to
invoices received after such date for Servicing Advances previously paid by the
Company) in form reasonably acceptable to the Special Servicer, and commensurate
with generally acceptable industry standards, detailing the amount of any
unreimbursed Monthly Advances, Servicing Advances and accrued and unpaid
Servicing Fees on a loan level basis. Should the Special Servicer desire a loan
level tape or other electronic media containing information which is not readily
extractable from the Company's servicing system, the Company shall reasonably
cooperate to make such loan level data available to the Special Servicer. In
addition, no more than five (5) Business Days after the Transfer Date, the
Company shall transfer to the Special Servicer any funds held in an Escrow
Account or Custodial Account related to the Distressed Mortgage Loans listed in
the related Transfer Notice. Upon reasonable compliance by the Company with the
provisions of this Section regarding the transfer of servicing for Distressed
Mortgage Loans, the Special Servicer shall reimburse the Company within five
Business Days of the related Transfer Date for any unreimbursed Monthly
Advances, Servicing Advances and accrued and unpaid Servicing Fees with respect
to such Distressed Mortgage Loans which have been properly documented.
Notwithstanding anything herein to the contrary, the transfer of servicing for
Distressed Mortgage Loans shall not require the payment of a termination fee
therefor.
In connection with the transfer of any Distressed Mortgage Loan, the
Company will be responsible for servicing the Distressed Mortgage Loan until the
effective date of transfer of servicing to the Special Servicer, but shall have
no right or obligation to service such Distressed Mortgage Loan from and after
the effective date of the transfer of servicing to the Special Servicer.
81
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 10.01, 11.01 (ii) or pursuant to
Section 11.02 the Purchaser shall, (i) succeed to and assume all of the
Company's responsibilities, rights, duties and obligations under this Agreement,
or (ii) appoint a successor having the characteristics set forth in Section 8.02
and which shall succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Company under this Agreement prior to the
termination of Company's responsibilities, duties and liabilities under this
Agreement. In connection with such appointment and assumption, the Purchaser may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree. In the event that the
Company's duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the Company shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation or
removal of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Section 3.03, it being understood and agreed that the provisions
of such Sections 3.01, 3.02, 3.03 and 8.01 shall be applicable to the Company
notwithstanding any such sale, assignment, resignation or termination of the
Company, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.01, except for subsection (h) with respect to the sale of
the Mortgage Loans and subsections (i) and (k) thereof, whereupon such successor
shall become fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Company, with like effect as if originally
named as a party to this Agreement. Any termination or resignation of the
Company or termination of this Agreement pursuant to Section 8.04, 10.01, 11.01
or 11.02 shall not affect any claims that any Purchaser may have against the
Company arising out of the Company's actions or failure to act prior to any such
termination or resignation.
The Company shall deliver promptly to the successor servicer the funds in
the Custodial Account, Subsidy Account and Escrow Account and all Retained
Mortgage Files and related documents and statements held by it hereunder and the
Company shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Company.
82
Upon a successor's acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.
Section 12.02 Amendment.
This Agreement may be amended from time to time by written agreement signed
by the Company and the Purchaser.
Section 12.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Each of the Company and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect of any litigation based on, or arising out of, under, or in connection
with, this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing, statements
(whether oral or written), or actions of the Company or the Purchaser. This
provision is a material inducement for the Purchaser to enter into this
Agreement.
Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
(i) if to the Company with respect to servicing or investor reporting
issues:
Xxxxx Fargo Bank, N.A.
1 Home Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2401-042
Fax: 515/000-0000
If to the Company with respect to all other issues:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
00
Xxxxxxxxx, XX 00000
Attention: Structured Finance Manager, MAC X3906-012
Fax: 301/000-0000
In each instance with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel, MAC # X2401-06T
Fax: 515/000-0000
or such other address as may hereafter be furnished to the Purchaser
in writing by the Company;
(ii) if to Purchaser:
Xxxxxx Brothers Bank, FSB
000 0xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Fax: (000)000-0000
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Company shall be rendered as an independent contractor and not as agent for the
Purchaser.
Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Company and the Purchaser
and their respective successors and assigns. The parties agree that this
Agreement and signature pages thereof may be transmitted between them by
facsimile and that faxed
84
signatures may constitute original signatures and that a faxed signature page
containing the signature (faxed or original) is binding on the parties.
Section 12.09 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Company's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option. The
Company shall only be responsible for the costs of recording the initial
Assignments of Mortgage. In no event shall the Company be responsible for the
cost of recording Assignments of Mortgage in connection with a subsequent sale
or transfer of the Mortgage Loans by the Purchaser.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any Person to exercise any
rights of the Purchaser hereunder, by executing an Assignment, Assumption and
Recognition Agreement substantially in the form attached as Exhibit J, and the
assignee or designee shall accede to the rights and obligations hereunder of the
Purchaser with respect to such Mortgage Loans. All references to the Purchaser
in this Agreement shall be deemed to include its assignee or designee.
Section 12.11 Solicitation of Mortgagor.
Neither party shall, after the respective Closing Date, take any action to
solicit the refinancing of any Mortgage Loan. It is understood and agreed that
neither (i) promotions undertaken by the either party or any affiliate of such
party which are directed to the general public at large, including, without
limitation, mass mailings based upon commercially acquired mailing lists,
newspaper, radio, television advertisements nor (ii) serving the refinancing
needs of a Mortgagor who, without solicitation, contacts either party in
connection with the refinance of such Mortgage or Mortgage Loan, shall
constitute solicitation under this Section.
[Intentionally Blank - Next Page Signature Page]
85
IN WITNESS WHEREOF, the Company and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
XXXXXX BROTHERS BANK, FSB XXXXX FARGO BANK, N.A.
PURCHASER COMPANY
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------------- ------------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxx
Title: Vice President Title: Vice President
86
STATE OF )
) ss:
COUNTY OF ___________ )
On the _____ day of _______________, 20___ before me, a Notary Public in
and for said State, personally appeared ________, known to me to be _________ of
Xxxxx Fargo Bank, N.A., the national banking association that executed the
within instrument and also known to me to be the person who executed it on
behalf of said bank, and acknowledged to me that such bank executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
________________________________________
Notary Public
My Commission expires __________________
87
STATE OF )
) ss:
COUNTY OF ____________)
On the _____ day of _______________, 20___ before me, a Notary Public in
and for said State, personally appeared _____________________________________,
known to me to be the ______________________________ of
______________________________, the corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
________________________________________
Notary Public
My Commission expires __________________
88
EXHIBIT A
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this _____ day of __________ 20___, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Xxxxx Fargo Bank, N.A. (the "Seller") as the Seller under that certain Master
Mortgage Loan Purchase Agreement, ("Purchase Agreement") and as the Company
under that certain Master Seller's Warranties and Servicing Agreement (the
"Servicing Agreement") each dated as of May 1, 2006, (collectively, the
"Agreements") does hereby sell, transfer, assign, set over and convey to Xxxxxx
Brothers Bank, FSB as the Purchaser (the "Purchaser") under the Agreements, and
Purchaser hereby accepts from Seller, without recourse, but subject to the terms
of the Agreements, all right, title and interest of, in and to each of the
Mortgage Loans listed on the related Mortgage Loan Schedule attached hereto as
Schedule I, together with the Custodial Mortgage Files and all rights and
obligations arising under the documents contained therein. Pursuant to Section
2.03 of the Servicing Agreement, the Seller has delivered to the Custodian the
documents required to be delivered under the Agreements for each Mortgage Loan
to be purchased. The Servicing Files and the Retained Mortgage Files retained by
the Seller pursuant to Section 2.01 of the Servicing Agreement shall be
appropriately marked to clearly reflect the sale of the related Mortgage Loans
to the Purchaser.
The Seller hereby makes the representations and warranties set forth
in Section 3.01 and for each of the Mortgage Loans, Section 3.02 of the
Servicing Agreement as of the date hereof.
Attached hereto as Exhibit A is a copy of the Underwriting Guidelines
relating to the Mortgage Loans listed on the Mortgage Loan Schedule attached
hereto as Schedule I.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreements.
This Assignment and Conveyance Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
an original, and all such counterparts shall constitute one and the same
instrument.
XXXXXX BROTHERS BANK, FSB XXXXX FARGO BANK, N.A.
Purchaser Seller
By: By:
--------------------------------- -----------------------------------
Name: Name:
------------------------------- ---------------------------------
Title: Title:
------------------------------ --------------------------------
SCHEDULE I
Mortgage Loan Schedule
EXHIBIT A
Underwriting Guidelines
EXHIBIT B
CUSTODIAL AGREEMENT
EXHIBIT C
CONTENTS OF EACH CUSTODIAL MORTGAGE FILE,
RETAINED MORTGAGE FILE AND SERVICING FILE
With respect to each Mortgage Loan, the Retained and Custodial Mortgage
Files shall include each of the following items, which shall be available for
inspection by the Purchaser and any prospective Purchaser, and which shall be
retained by the Company in the Retained Mortgage File or Servicing File or
delivered to the Custodian pursuant to Sections 2.01 and 2.03 of the Seller's
Warranties and the Servicing Agreement to which this Exhibit is attached (the
"Agreement"):
WITH RESPECT TO EACH CUSTODIAL MORTGAGE FILE:
1. The original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _______ without recourse" and signed in
the name of the Company by an authorized officer (in the event that
the Mortgage Loan was acquired by the Company in a merger, the
signature must be in the following form: "[Company], successor by
merger to [name of predecessor]"; and in the event that the Mortgage
Loan was acquired or originated by the Company while doing business
under another name, the signature must be in the following form:
"[Company], formerly known as [previous name]").
2. The originals or certified true copies of any document sent for
recordation of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon.
3. The original Assignment of Mortgage for each Mortgage Loan, in form
and substance acceptable for recording (except for the insertion of
the name of the assignee and recording information). The Assignment of
Mortgage must be duly recorded only if recordation is either necessary
under applicable law or commonly required by private institutional
mortgage investors in the area where the Mortgaged Property is located
or on direction of the Purchaser. If the Mortgage Loan was acquired by
the Company in a merger, the Assignment of Mortgage must be made by
"[Company], successor by merger to [name of predecessor]." If the
Mortgage Loan was acquired or originated by the Company while doing
business under another name, the Assignment of Mortgage must be by
"[Company], formerly know as [previous name]."
4. The original of any guarantee executed in connection with the Mortgage
Note.
5. Copy of powers of attorney, if applicable.
WITH RESPECT TO EACH RETAINED MORTGAGE FILE:
6. The original Mortgage, with evidence of recording thereon or a
certified true and correct copy of the Mortgage sent for recordation.
If in connection with any Mortgage Loan, the Company cannot deliver or
cause to be delivered the original Mortgage with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by
the public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such
public recording office retains the original recorded Mortgage, the
Company shall deliver or cause to be delivered to the Custodian, a
photocopy of such Mortgage, together with (i) in the case of a delay
caused by the public recording office, an Officer's Certificate of the
Company stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the
original recorded Mortgage or a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the Custodian
upon receipt thereof by the Company; or (ii) in the case of a Mortgage
where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public
recording office or by the title insurance company that issued the
title policy to be a true and complete copy of the original recorded
Mortgage..
7. For any Mortgage Loan not recorded in the name of MERS, originals or
certified true copies of documents sent for recordation of all
intervening assignments of the Mortgage with evidence of recording
thereon, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of
mortgage, the Company shall deliver or cause to be delivered to the
Custodian, a photocopy of such intervening assignment, together with
(i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the Company stating that such intervening
assignment of mortgage has been dispatched to the appropriate public
recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office or by the title insurance company that issued the title policy
to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian
upon receipt thereof by the Company; or (ii) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original
recorded intervening assignment.
8. The original mortgagee policy of title insurance or other evidence of
title such as a copy of the title commitment or copy of the
preliminary title commitment.
9. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
With respect to each Mortgage Loan, the Servicing File shall include
each of the following items to the extent required by the Underwriting
Guidelines:
10. The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.
11. Residential loan application.
12. Mortgage Loan closing statement.
13. Verification of employment and income, unless originated under the
Company's Limited Documentation program, Xxxxxx Xxx Timesaver Plus.
14. Verification of acceptable evidence of source and amount of down
payment.
15. Credit report on the Mortgagor.
16. Residential appraisal report.
17. Photograph of the Mortgaged Property.
18. Survey of the Mortgage property, if required by the title company or
applicable law.
19. Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy,
i.e. map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
20. All required disclosure statements.
21. If available, termite report, structural engineer's report, water
potability and septic certification.
22. Sales contract, if applicable.
23. Evidence of payment of taxes and insurance premiums, insurance claim
files, correspondence, current and historical computerized data files,
and all other processing, underwriting and closing papers and records
which are customarily contained in a mortgage loan file and which are
required to document the Mortgage Loan or to service the Mortgage
Loan.
24. Amortization schedule, if available.
25. Payment history for any Mortgage Loan that has been closed for more
than ninety (90) days.
In the event an Officer's Certificate of the Company is delivered to the
Custodian because of a delay caused by the public recording office in returning
any recorded document, the Company shall deliver to the Custodian, within 240
days of the Closing Date, an Officer's Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to the
Custodian. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested from the Purchaser, which
consent shall not be unreasonably withheld.
EXHIBIT D
ELECTRONIC DATA FILE
(1) the Company's Mortgage Loan identifying number;
(2) the street address of the Mortgaged Property including the city,
state, county and zip code;
(3) a code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a PUD, a cooperative, a townhouse,
manufactured housing or a unit in a condominium project;
(4) the Mortgage Interest Rate as of the Cut-off Date;
(5) the current Monthly Payment;
(6) loan term, number of months;
(7) the stated maturity date;
(8) the Stated Principal Balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal
due on or before the Cut-off Date;
(9) the Loan-to-Value Ratio;
(10) a code indicating whether the Mortgage Loan is an Interest Only
Mortgage Loan;
(11) a code indicating whether the Mortgage Loan is a temporary buydown (Y
or N);
(12) the Servicing Fee Rate;
(13) a code indicating the mortgage insurance provider and percent of
coverage, if applicable;
(14) a code indicating whether the Mortgage Loan is covered by lender-paid
mortgage insurance (Y or N);
(15) a code indicating whether the Mortgage Loan is a Time$aver(R) Mortgage
Loan (Y or N);
(16) the Mortgagor's first and last name;
(17) a code indicating whether the Mortgaged Property is owner-occupied;
(18) the remaining months to maturity from the Cut-off Date, based on the
original amortization schedule;
(19) the date on which the first Monthly Payment was due on the Mortgage
Loan;
(20) the actual next Due Date of the Mortgage Loan;
(21) the last Due Date on which a Monthly Payment was actually applied to
the actual principal balance;
(22) the original principal amount of the Mortgage Loan;
(23) a code indicating the purpose of the loan (i.e., purchase, financing,
rate/term refinancing, cash-out refinancing);
(24) the Mortgage Interest Rate at origination;
(25) the amount on which the first Monthly Payment was due on the Mortgage
Loan;
(26) a code indicating the documentation style (i.e., full (providing two
years employment verification - 2 years W-2's and current pay stub or
2 years 1040's for self employed borrowers), alternative or reduced);
(27) a code indicating if the Mortgage Loan is subject to a PMI Policy;
(28) the Appraised Value of the Mortgage Property;
(29) the sale price of the Mortgaged Property, if applicable;
(30) the Mortgagor's Underwriting FICO Score;
(31) term of Prepayment Penalty in years;
(32) a code indicating the product type;
(33) a code indicating the credit grade of the Mortgage Loan;
(34) the unpaid balance of the Mortgage Loan as of the close of business on
the Cut-off Date, after deduction of all payments of principal;
(35) the Note date of the Mortgage Loan;
(36) the mortgage insurance certificate number and percentage of coverage,
if applicable;
(37) the Mortgagor's and Co-Mortgagor's (if any) date of birth;
(38) if the Mortgage Loan is a MERS Mortgage Loan, the MIN Number for each
MERS Mortgage Loan;
(39) employer name;
(40) subsidy program code;
(41) servicer name;
(42) the combined Loan-to-Value Ratio;
(43) the total Loan-to-Value Ratio;
(44) whether the Mortgage Loan is convertible (Y or N);
(45) a code indicating whether the Mortgage Loan is a relocation loan (Y or
N);
(46) a code indicating whether the Mortgage Loan is a leasehold loan (Y or
N);
(47) a code indicating whether the Mortgage Loan is an Alt A loan (Y or N);
(48) a code indicating whether the Mortgage Loan is a no ratio loan (Y or
N);
(49) a code indicating whether the Mortgage Loan is a Pledged Asset
Mortgage Loan (Y or N);
(50) effective LTV percentage for Pledged Asset Mortgage Loans;
(51) citizenship type code;
(52) a code indicating whether the Mortgage Loan is a conforming or
non-conforming loan, based on the original loan balance;
(53) the name of the client for which the Mortgage Loan was originated;
(54) the program code;
(55) the loan sub doc code;
(56) a code indicating amortization type (1 or 2);
(57) interest only note payment;
(58) first full amortization payment date;
(59) interest only term, number of months;
(60) remaining interest only term, number of months;
(61) a code indicating whether the Mortgage Loan is a 2nd lien (Y or N);
(62) a code indicating borrower VOA or lender VOA (L or B);
(63) combined current loan balance;
The Company shall provide the following
For the Home Mortgage Disclosure Act (HMDA):
(64) the Mortgagor's and co-Mortgagor's (if applicable) ethnicity;
(65) the Mortgagor's and co-Mortgagor's (if applicable) race;
(66) lien status;
(67) for cash-out refinance loans, the cash purpose;
(68) the Mortgagor's and co-Mortgagor's (if applicable) gender;
(69) the Mortgagor's and co-Mortgagor's (if applicable) social security
numbers;
(70) the number of units for the property;
(71) the year in which the property was built;
(72) the qualifying monthly income of the Mortgagor;
(73) the number of bedrooms contained in the property;
(74) a code indicating first time buyer (Y or N);
(75) the total rental income, if any;
The Company shall provide the following
for the adjustable rate Mortgage Loans (if applicable):
(76) the maximum Mortgage Interest Rate under the terms of the Mortgage
Note;
(77) the Periodic Interest Rate Cap;
(78) the Index;
(79) the next interest rate and payment Adjustment Date;
(80) the Mortgage Interest Rate adjustment cap and all subsequent interest
rate Adjustment Dates;
(81) the Gross Margin; and
(82) the lifetime interest rate cap.
EXHIBIT E
UNDERWRITING GUIDELINES
EXHIBIT F
FORMS OF CUSTODIAL ACCOUNT CERTIFICATIONS
CUSTODIAL ACCOUNT CERTIFICATION
________________, 20___
Xxxxx Fargo Bank, N.A. hereby certifies that it has established the account
described below as a Custodial Account pursuant to Section 4.04 of the Seller's
Warranties and Servicing Agreement, dated as of ________________, 20___,.
Title of Account: Xxxxx Fargo Bank, N.A. in trust for the Purchaser and/or
subsequent purchasers of Mortgage Loans - P & I
Address of office or branch
of the Company at which
Account is maintained: __________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
XXXXX FARGO BANK, N.A.
Company
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
CUSTODIAL ACCOUNT LETTER AGREEMENT
________________, 20___
To:
__________________________
__________________________
__________________________
(the "Depository")
As Company under the Seller's Warranties and Servicing Agreement, dated as
of ___________, 20 _____, (the "Agreement"), we hereby authorize and request you
to establish an account, as a Custodial Account pursuant to Section 4.04 of the
Agreement, to be designated as "Xxxxx Fargo Bank, N.A., in trust for the
Purchaser and/or subsequent purchasers of Mortgage Loans - P & I". All deposits
in the account shall be subject to withdrawal therefrom by order signed by the
Company.. This letter is submitted to you in duplicate. Please execute and
return one original to us.
XXXXX FARGO BANK, N.A.
Company
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
Date:
--------------------------------------------
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number ___________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above.
--------------------------------------------------
Depository
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
Date:
--------------------------------------------
EXHIBIT G
FORMS OF ESCROW ACCOUNT CERTIFICATIONS
ESCROW ACCOUNT CERTIFICATION
________________, 20___
Xxxxx Fargo Bank, N.A. hereby certifies that it has established the account
described below as an Escrow Account pursuant to Section 4.06 of the Seller's
Warranties and Servicing Agreement, dated as of ________________________, 20
_____,.
Title of Account: Xxxxx Fargo Bank, N.A. in trust for the Purchaser and/or
subsequent purchasers of Mortgage Loans, and various
Mortgagors - T & I
Address of office or branch
of the Company at which
Account is maintained: __________________________________________________
__________________________________________________
__________________________________________________
XXXXX FARGO BANK, N.A.
Company
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
ESCROW ACCOUNT LETTER AGREEMENT
________________, 20___
To:
__________________________
__________________________
__________________________
(the "Depository")
As Company under the Seller's Warranties and Servicing Agreement, dated as
of ___________, 20 _____, (the "Agreement"), we hereby authorize and request you
to establish an account, as an Escrow Account pursuant to Section 4.06 of the
Agreement, to be designated as "Xxxxx Fargo Bank, N.A., in trust for the
Purchaser and/or subsequent purchasers of Mortgage Loans, and various Mortgagors
- T & I". All deposits in the account shall be subject to withdrawal therefrom
by order signed by the Company. This letter is submitted to you in duplicate.
Please execute and return one original to us.
XXXXX FARGO BANK, N.A.
Company
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
Date:
--------------------------------------------
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number ____________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above.
--------------------------------------------------
Depository
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
Date:
--------------------------------------------
EXHIBIT H
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company][Name of
Subservicer] shall address, as a minimum, the criteria identified below as
"Applicable Servicing Criteria"
REG AB APPLICABLE INAPPLICABLE
REFERENCE SERVICING CRITERIA SERVICING CRITERIA SERVICING CRITERIA
---------------- ----------------------------------------------------------------------- ------------------ ------------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or X
other triggers and events of default in accordance with the transaction
agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, X
policies and procedures are instituted to monitor the third party's
performance and compliance with such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up X
servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the X
party participating in the servicing function throughout the reporting
period in the amount of coverage required by and otherwise in
accordance with the terms of the transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate custodial X
bank accounts and related bank clearing accounts no more than two
business days following receipt, or such other number of days specified
in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to an X
investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or X
distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve accounts X
or accounts established as a form of overcollateralization, are
separately maintained (e.g., with respect to commingling of cash) as
set forth in the transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured depository X
institution as set forth in the transaction agreements. For purposes of
this criterion, "federally insured depository institution" with respect
to a foreign financial institution means a foreign financial
institution that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. X
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed X
securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30 calendar days after the
bank statement cutoff date, or such other number of days specified in
the transaction agreements; (C) reviewed and approved by someone other
than the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items are
resolved within 90 calendar days of their original identification, or
such other number of days specified in the transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the Commission, X
are maintained in accordance with the transaction agreements and
applicable Commission requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms set forth in the
transaction agreements; (B) provide information calculated in
accordance with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and regulations;
and (D) agree with investors' or the trustee's records as to the total
unpaid principal balance and number of mortgage loans serviced by the
Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance with X
timeframes, distribution priority and other terms set forth in the
transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two business days X
to the Servicer's investor records, or such other number of days
specified in the transaction
agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with X
cancelled checks, or other form of payment, or custodial bank
statements.
REG AB APPLICABLE INAPPLICABLE
REFERENCE SERVICING CRITERIA SERVICING CRITERIA SERVICING CRITERIA
---------------- ----------------------------------------------------------------------- ------------------ ------------------
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required by X
the transaction agreements or related mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by the X
transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, X
reviewed and approved in accordance with any conditions or requirements
in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in accordance X
with the related mortgage loan documents are posted to the Servicer's
obligor records maintained no more than two business days after
receipt, or such other number of days specified in the transaction
agreements, and allocated to principal, interest or other items (e.g.,
escrow) in accordance with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the X
Servicer's records with respect to an obligor's unpaid principal
balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's mortgage X
loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction
agreements and related pool asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements established by the
transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during the period X
a mortgage loan is delinquent in accordance with the transaction
agreements. Such records are maintained on at least a monthly basis, or
such other period specified in the transaction agreements, and describe
the entity's activities in monitoring delinquent mortgage loans
including, for example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary (e.g., illness or
unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans X
with variable rates are computed based on the related mortgage loan
documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or such
other period specified in the transaction agreements; (B) interest on
such funds is paid, or credited, to obligors in accordance with
applicable mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full repayment
of the related mortgage loans, or such other number of days specified
in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance X
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the servicer
at least 30 calendar days prior to these dates, or such other number of
days specified in the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made on X
behalf of an obligor are paid from the Servicer's funds and not charged
to the obligor, unless the late payment was due to the obligor's error
or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two X
business days to the obligor's records maintained by the servicer, or
such other number of days specified in the transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized X
and recorded in accordance with the transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item X
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as
set forth in the transaction agreements.
EXHIBIT I
SARBANES CERTIFICATION
Re: The [__] agreement dated as of [__], 200[_] (the "Agreement"), among
[IDENTIFY PARTIES]
I, ________________________________, the _______________________ of [Name of
Servicer] (the "Servicer"), certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers, with
the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Servicer's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by the Servicer during 200[ ] that were delivered by the
Servicer to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee] pursuant to the Agreement (collectively, the "Servicer Servicing
Information");
(2) Based on my knowledge, the Servicer Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light
of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Servicer Servicing
Information;
(3) Based on my knowledge, all of the Servicer Servicing Information
required to be provided by the Servicer under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(4) I am responsible for reviewing the activities performed by the Servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the Compliance Statement, the Servicing Assessment or the Attestation
Report, the Servicer has fulfilled its obligations under the Agreement; and
(5) The Compliance Statement required to be delivered by the Servicer
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Servicer and by each Subservicer ad
Subcontractor pursuant to the Agreement have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the
[Depositor] [Master Servicer]. Any material instance of noncompliance with
the Servicing Criteria has been disclosed in such reports.
Date:
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT J
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
_________________, 20__
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
___________________, 20__ between _________________, a _________________
corporation having an office at _________________ ("Assignor") and
_________________, having an office at _________________ ("Assignee"):
For and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledge, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all of the
right, title and interest of Assignor, as Purchaser, in, to and under that
certain Seller's Warranties and Servicing Agreement, (the "Seller's Warranties
and Servicing Agreement"), dated as of _________________, by and between
_________________ (the "Purchaser"), and _________________ (the "Company"), and
the Mortgage Loans delivered thereunder by the Company to the Assignor, and that
certain Custodial Agreement, (the "Custodial Agreement"), dated as of
_________________, by and among the Company, the Purchaser and _________________
(the "Custodian").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no knowledge of,
any offsets, counterclaims or other defenses available to the Company with
respect to the Seller's Warranties and Servicing Agreement or the Mortgage
Loans;
c. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Seller's Warranties and
Servicing Agreement, the Custodial Agreement or the Mortgage Loans, including
without limitation the transfer of the servicing obligations under the Seller's
Warranties and Servicing Agreement. The Assignor has no knowledge of, and has
not received notice of, any waivers under or amendments or other modifications
of, or assignments of rights or obligations under, the Seller's Warranties and
Servicing Agreement or the Mortgage Loans; and
d. Neither the Assignor nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any
other similar security from, or otherwise approached or negotiated with respect
to the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action
which would constitute a distribution of the Mortgage Loans under the Securities
Act of 1933 (the "33 Act") or which would render the disposition of the Mortgage
Loans a violation of Section 5 of the 33 Act or require registration pursuant
thereto.
3. That Assignee warrants and represent to, and covenants with, the
Assignor and the Company pursuant to Section 12.10 of the Seller's Warranties
and Servicing Agreement that:
a. The Assignee agrees to be bound, as Purchaser, by all of the terms,
covenants and conditions of the Seller's Warranties and Servicing Agreement, the
Mortgage Loans and the Custodial Agreement, and from and after the date hereof,
the Assignee assumes for the benefit of each of the Company and the Assignor all
of the Assignor's obligations as purchaser thereunder;
b. The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the Mortgage
Loans are in excess of $250,000.00 and will be paid by cash remittance of the
full purchase price within sixty (60) days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment for its
own account only and not for any other person. In this connection, neither the
Assignee nor any person authorized to act therefor has offered to Mortgage Loans
by means of any general advertising or general solicitation within the meaning
of Rule 502(c) of US Securities and Exchange Commission Regulation D,
promulgated under the 1933 Act;
e. The Assignee considers itself a substantial sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
f. The Assignee has been furnished with all information regarding the
Mortgage Loans that it has requested from the Assignor or the Company;
g. Neither the Assignee nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner which would constitute a distribution of the Mortgage Loans
under the 33 Act or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 33 Act or require registration pursuant thereto,
nor will it act, nor has it authorized or will it authorize any person to act,
in such manner with respect to the Mortgage Loans; and
h. Either (1) the Assignee is not an employee benefit plan ("Plan")
within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the meaning of
section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and the
Assignee is not directly or indirectly purchasing the Mortgage Loans on behalf
of, investment manager of, as named fiduciary of, as Trustee of, or with assets
of, a Plan; or (2) the
Assignee's purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
i. The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Seller's Warranties and
Servicing Agreements is:
_______________________________________
_______________________________________
_______________________________________
Attention: ________________
The Assignee's wire transfer instructions for purposes of all remittances
and payments related to the Mortgage Loans and the Seller's Warranties and
Servicing Agreement is:
_______________________________________
_______________________________________
_______________________________________
Attention: ________________
4. From and after the date hereof, the Company shall note the transfer of
the Mortgage Loans to the Assignee in its books and records, the Company shall
recognize the Assignee as the owner of the Mortgage Loans and the Company shall
service the Mortgage Loans for the benefit of the Assignee pursuant to the
Seller's Warranties and Servicing Agreement, the terms of which are incorporated
herein by reference. It is the intention of the Assignor, the Company and the
Assignee that the Seller's Warranties and Servicing Agreement shall be binding
upon and inure to the benefit of the Company and the Assignee and their
respective successors and assigns.
[Signatures Follow]
IN WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement to be executed by their duly authorized officers as of the
date first above written.
------------------------------------- ----------------------------------------
Assignor Assignee
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Its: Its:
-------------------------------- -----------------------------------
Acknowledged and agreed to by:
XXXXX FARGO BANK, N.A.
Servicer
By:
---------------------------------
Name:
-------------------------------
Its:
--------------------------------
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Master Mortgage Loan Purchase Agreement (the "Agreement"), dated
as of May 1, 2006 by and between Xxxxxx Brothers Bank, FSB, having an office at
000 Xxxxxxx Xxxxxx 0xx Xxxxx, Xxx Xxxx, XX 00000 (the "Purchaser") and Xxxxx
Fargo Bank, N.A., having an xxxxxx xx 0 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000-0000
(the "Seller").
WITNESSETH
WHEREAS, the Seller agrees to sell, and the Purchaser agrees to purchase,
from time to time certain fixed rate and adjustable rate, first and second lien,
residential mortgage loans (the "Mortgage Loans") on a servicing retained basis
as described herein:
WHEREAS, the Mortgage Loans shall be delivered as pools of whole loans
(each a "Loan Package") on various dates as provided herein (each a "Closing
Date"); and
WHEREAS, the parties intend hereby to set forth the terms and conditions
upon which the proposed Transactions will be effected.
NOW THEREFORE, in consideration of the promises and the mutual agreements
set forth herein, the parties hereto agree as follows:
SECTION 1. All capitalized terms not otherwise defined herein have the
respective meanings set forth in the Master Seller's Warranties and Servicing
Agreement, dated as of the date herewith (the "Seller's Warranties and Servicing
Agreement").
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the
Purchaser agrees to purchase from time to time, Mortgage Loans in Loan Packages
having aggregate principal balances on the related Cut-off Date in an amount as
set forth in the respective Commitment Letters, or in such other amount as
agreed to by the Purchaser and the Seller as evidenced by the aggregate
scheduled principal balance of the Mortgage Loans in the related Loan Package
accepted by the Purchaser on the related Closing Date. The Mortgage Loans will
be delivered pursuant to a Seller's Warranties and Servicing Agreement, between
the Purchaser and the Seller.
SECTION 3. Mortgage Schedule. The Seller will provide the Purchaser with
certain information constituting a listing of the Mortgage Loans to be purchased
under this Agreement for each Transaction (the "Mortgage Loan Schedule"). Each
Mortgage Loan Schedule shall conform to the definition of "Mortgage Loan
Schedule" under the Seller's Warranties and Servicing Agreement.
SECTION 4. Purchase Price. The purchase price for each Loan Package (the
"Purchase Price") shall be the percentage of par as stated in the related
Commitment Letter, multiplied by the aggregate scheduled principal balance, as
of the related Cut-off Date, of the Mortgage Loans in the related Loan Package,
after application of scheduled payments of principal due on or
before such Cut-off Date whether or not collected. The Purchase Price for a Loan
Package may be adjusted as stated in the related Commitment Letter.
In addition to the Purchase Price, the Purchaser shall pay to the Seller,
at closing, accrued interest on the aggregate scheduled principal amount of the
related Mortgage Loans at the weighted average Mortgage Loan Remittance Rate for
each Loan Package from the related Cut-off Date through the day prior to the
related Closing Date, inclusive.
With respect to each Loan Package, the Purchaser shall be entitled to (1)
all scheduled principal due after the related Cut-off Date, (2) all other
recoveries of principal collected after the related Cut-off Date (provided,
however, that all scheduled payments of principal due on or before the related
Cut-off Date and collected by the Seller after the related Cut-off Date shall
belong to the Seller), and (3) all payments of interest on the Mortgage Loans at
the Mortgage Loan Remittance Rate (minus that portion of any such payment which
is allocable to the period prior to the related Cut-off Date). The principal
balance of each Mortgage Loan as of the related Cut-off Date is determined after
application of payments of principal due on or before the related Cut-off Date
whether or not collected. Therefore, payments of scheduled principal and
interest prepaid for a Due Date beyond the related Cut-off Date shall not be
applied to the principal balance as of the related Cut-off Date. Such prepaid
amounts (minus interest at the Servicing Fee Rate) shall be the property of the
Purchaser. The Seller shall deposit any such prepaid amounts into the Custodial
Account, which account is established for the benefit of the Purchaser for
subsequent remittance by the Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files. Prior to the related Closing
Date, the Seller shall (a) deliver to the Purchaser in escrow, for examination,
the Custodial Mortgage File for each Mortgage Loan, including a copy of the
Assignment of Mortgage, pertaining to each Mortgage Loan, or (b) make the
Custodial Mortgage Files and the Retained Mortgage Files available to the
Purchaser for examination at the Seller's offices or such other location as
shall otherwise be agreed upon by the Purchaser and the Seller. Such examination
may be made by the Purchaser at any time before or after the related Closing
Date and by any prospective purchaser of the Mortgage Loans from the Purchaser
after the related Closing Date, upon prior reasonable notice to the Seller. The
fact that the Purchaser or any prospective purchaser of the Mortgage Loans has
conducted or has failed to conduct any partial or complete examination of the
Custodial Mortgage Files and the Retained Mortgage Files shall not affect the
Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief or remedy as provided under the related Seller's
Warranties and Servicing Agreement.
Prior to Seller's receipt of the Purchase Price, the Purchaser shall cause
the Custodian to act as bailee for the sole and exclusive benefit of the Seller
pursuant to the Custodial Agreement and act only in accordance with Seller's
instructions. Upon the Seller's receipt of the Purchase Price, the Seller shall
provide notification to the Custodian to release ownership of the Mortgage Loan
Documents specified above to the Purchaser. Such notification shall be in a form
of a written notice by facsimile or other electronic media, with a copy sent to
the Purchaser. Subsequent to such release, such Mortgage Loan Documents shall be
retained by the Custodian for the benefit of the Purchaser. All Mortgage Loan
Documents related to Mortgage Loans not purchased by the Purchaser on the
related Closing Date, shall be maintained by the Custodian for
2
the benefit of the Seller and shall be returned to the Seller within two (2)
Business Days after such Closing Date.
SECTION 6. Representations, Warranties and Agreements of Seller. The Seller
agrees and acknowledges that it shall, as a condition to the consummation of the
transactions contemplated hereby, make the representations and warranties
specified in Section 3.01 and 3.02 of the Seller's Warranties and Servicing
Agreement, as of the Closing Date. The meaning of the term "Agreement" as used
in Sections 3.01 and 3.02 of the Seller's Warranties and Servicing Agreement
shall include this Agreement. The Seller, without conceding that the Mortgage
Loans are securities, hereby makes the following additional representations,
warranties and agreements which shall be deemed to have been made as of the
related Closing Date:
a) neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loans, any
interest in any Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loans, any interest in any Mortgage Loans or
any other similar security from, or otherwise approached or negotiated with
respect to any Mortgage Loans, any interest in any Mortgage Loans or any
other similar security with, any Person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act or which would render the
disposition of any Mortgage Loans a violation of Section 5 of the
Securities Act or require registration pursuant thereto, nor will it act,
nor has it authorized or will it authorize any Person to act, in such
manner with respect to the Mortgage Loans; and
b) the Seller has not dealt with any broker or agent or anyone else who
might be entitled to a fee or commission in connection with this
transaction other than the Purchaser.
SECTION 7. Representation, Warranties and Agreement of Purchaser. The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall have
been deemed to have been made as of the related Closing Date.
a) the Purchaser understands that the Mortgage Loans have not been
registered under the Securities Act or the securities laws of any state;
b) the Purchaser is acquiring the Mortgage Loans for its own account only
and not for any other Person;
c) the Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Mortgage Loans;
d) the Purchaser has been furnished with all information regarding the
Mortgage Loans which it has requested from the Seller or the Company; and
3
e) neither the Purchaser nor anyone acting on its behalf offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loan, any
interest in any Mortgage Loan or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loan, any interest in any Mortgage Loan or any
other similar security from, or otherwise approached or negotiated with
respect to any Mortgage Loan, any interest in any Mortgage Loan or any
other similar security with, any Person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act or which would render the
disposition of any Mortgage Loan a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any Person to act, in such manner with
respect to the Mortgage Loans.
SECTION 8. Closing. The closing for the purchase and sale of each Loan
Package, shall take place on the related Closing Date. At the Purchaser's
option, the Closing shall be either: by telephone, confirmed by letter or wire
as the parties shall agree; or conducted in Person, at such place as the parties
shall agree.
The closing shall be subject to each of the following conditions:
a) all of the representations and warranties of the Seller under this
Agreement and under the Seller's Warranties and Servicing Agreement shall
be true and correct as of the Closing Date and no event shall have occurred
which, with notice or the passage of time, would constitute a default under
this Agreement or an Event of Default under the related Seller's Warranties
and Servicing Agreement;
b) the Purchaser shall have received, or the Purchaser's attorneys shall
have received in escrow, all Closing Documents as specified in Section 9 of
this Agreement, in such forms as are agreed upon and acceptable to the
Purchaser, duly executed by all signatories other than the Purchaser as
required pursuant to the respective terms thereof;
c) the Seller shall have delivered and released to the Custodian all
documents required under the Seller's Warranties and Servicing Agreement;
and
d) all other terms and conditions of this Agreement and the Seller's
Warranties and Servicing Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the Seller
on such Closing Date the related Purchase Price, plus accrued interest pursuant
to Section 4 of this Agreement, by wire transfer of immediately available funds
to the account designated by the Seller.
SECTION 9. Closing Documents. With respect to the initial closing date, the
closing documents shall consist of the following documents:
1. the Seller's Warranties and Servicing Agreement, in three
counterparts;
4
2. this Agreement in three counterparts;
3. an originally executed Side Letter (the "Side Letter") for the related
Loan Package regarding repurchase price by and between the Seller and
the Purchaser dated as of May 1, 2006;
4. the originally executed Custodial Assignment and Assumption Agreement
by and between the Purchaser and Seller dated as of May 30, 2006 in
three counter-parts assigning the Purchaser's rights as Initial
Servicer under the Custodial Agreement, dated as of April 1, 2000, by
and between the Purchaser, as owner and the Initial Servicer and Xxxxx
Fargo Bank, N.A., successor by merger to Xxxxx Fargo Bank Minnesota,
N.A. (the "Custodian");
5. the Mortgage Loan Schedule for the related Loan Package, one copy to
be attached to each counterpart of the related Assignment and
Conveyance Agreement and to each counterpart of the Custodial
Agreement, as the Mortgage Loan Schedule thereto;
6. an Officer's Certificate of the Seller;
7. a trust receipt and certification, as required under the Custodial
Agreement;
8. an Opinion of Counsel of the Seller, in the form of Exhibit 1 hereto;
9. an Escrow Account Certification;
10. a Custodial Account Certification; and
11. an Assignment and Conveyance Agreement for the related Mortgage Loans.
On each subsequent Closing Date, the following documents:
1. the Mortgage Loan Schedule for the related Loan Package;
2. an Assignment and Conveyance Agreement of Mortgage Loans for the
related Loan Package;
3. a trust receipt and/or an initial certification, as required under the
Custodial Agreement;
4. an originally executed Side Letter (the "Side Letter") for the related
Loan Package regarding repurchase price by and between the Seller and
the Purchaser;
5. if requested by the Purchaser, an Opinion of Counsel of the Seller, in
the form of Exhibit 1 hereto;
5
6. if requested by the Purchaser, an Officer's Certificate of the Seller;
and
7. the originally executed Custodial Assignment and Assumption Agreement
by and between the Purchase and Seller dated as of the respective
Closing Date in three counter-parts assigning the Purchaser's rights
as Initial Servicer under the Custodial Agreement, dated as of April
1, 2000, by and between the Purchaser, as owner and the Initial
Servicer and Xxxxx Fargo Bank, N.A., successor by merger to Xxxxx
Fargo Bank Minnesota, N.A. (the "Custodian");.
SECTION 10. Costs. The Purchaser shall pay any commissions due its
salesmen, the legal fees and expenses of its attorneys and the costs and
expenses associated with the Custodian. The Seller shall be responsible for
reasonable costs and expenses associated with any preparation and recording of
the initial Assignments of Mortgage. All other costs and expenses incurred in
connection with the transfer and delivery of the Mortgage Loans, including fees
for title policy endorsements and continuations and the Seller's attorney fees,
shall be paid by the Seller.
SECTION 11. Servicing The Mortgage Loans shall be serviced by the Seller in
accordance with the terms of the applicable Seller's Warranties and Servicing
Agreement. The Seller shall be entitled to servicing fees calculated as provided
therein, at the Servicing Fee Rate shown on the first page of this Agreement
unless otherwise agreed by the parties.
SECTION 12. Financial Statements. The Seller understands that in connection
with the Purchaser's marketing of the Mortgage Loans, the Purchaser may request
from the Seller and make available to prospective purchasers a Consolidated
Statement of Operations of the Seller for the most recently completed two (2)
fiscal years respecting which such a statement is available, as well as a
Consolidated Statement of Condition at the end of the last two (2) fiscal years
covered by such Consolidated Statement of Operations. The Purchaser, upon
request, shall also make available any comparable interim statements to the
extent any such statements have been prepared by the Seller in a format intended
or otherwise suitable for the public at large. The Seller, upon request, agrees
to furnish promptly to the Purchaser copies of the statements specified above.
The Seller shall also make available information on its servicing performance
with respect to loans in its own portfolio and loans serviced for others (if
any), including foreclosure and delinquency ratios.
The Seller also agrees to allow access to a knowledgeable (as shall be
determined by the Seller) financial or accounting officer for the purpose of
answering questions asked by any prospective purchaser regarding recent
developments affecting the Seller or the financial statements of the Seller.
SECTION 13. Mandatory Delivery. The sale and delivery on each Closing Date
of the related Mortgage Loans described on the respective Mortgage Loan Schedule
is mandatory, it being 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 (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver the
6
Mortgage Loans on or before such Closing Date. 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.
SECTION 14. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party at the address shown on the first page hereof,
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice of communication hereunder shall be deemed to
have been received on the date delivered to or 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).
SECTION 15. Severability Clause. Any part, provision, representation or
warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
SECTION 16. Counterparts. This Agreement may be executed simultaneously in
any number of counterparts. Each counterpart shall be deemed to be an original,
and all such counterparts shall constitute one and the same instrument. The
parties agree that this Agreement and signature pages thereof may be transmitted
between them by facsimile and that faxed signatures may constitute original
signatures and that a faxed signature page containing the signature of an
authorized individual (faxed or original) is binding on the respective parties.
XXXXXXX 00. Xxxxx of Delivery and Governing Law. This Agreement shall be
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the laws of the State of New York, except to the extent
preempted by Federal Law.
Each of the Seller and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect of any litigation based on, or arising out of, under, or in connection
with, this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing,
7
statements (whether oral or written), or actions of the Seller or the Purchaser.
This provision is a material inducement for the Purchaser to enter into this
Agreement.
SECTION 18. Further Agreements. The Purchaser and the Seller each agree to
execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Without limiting the generality of the foregoing, the Seller shall
reasonably cooperate with the Purchaser in connection with the initial resales
of the Mortgage Loans by the Purchaser. In that connection, the Seller shall
provide to the Purchaser: (i) any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request, and (ii) such
additional representations, warranties, covenants, opinions of counsel, letters
from auditors and certificates of public officials or officers of the Seller as
are reasonably believed necessary by the Purchaser in connection with such
resales. Prior to incurring any out-of-pocket expenses pursuant to this
paragraph, the Seller shall notify the Purchaser in writing of the estimated
amount of such expense. The Purchaser shall reimburse the Seller for any such
expense following its receipt of appropriate details thereof.
SECTION 19. Intention of the Parties. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, an undivided 100%
ownership interest in the Mortgage Loans and not a debt instrument of the Seller
or another security. Accordingly, the parties hereto each intend to treat the
transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have the
right to review the Mortgage Loans and the related Custodial Mortgage Files to
determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 20. Successors and Assigns; Assignment of Purchase Agreement. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the Seller
and the Purchaser. This Agreement shall not be assigned, pledged or hypothecated
by the Seller to a third party without the consent of the Purchaser.
SECTION 21. Waivers; Other Agreements. No term or provision of this
Agreement may be waived or modified unless such waiver or modification is in
writing and signed by the party against whom such waiver or modification is
sought to be enforced.
SECTION 22. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
SECTION 23. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
8
a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
b) accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with generally accepted accounting principles;
c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
d) a reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular
provision; and
f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 24. Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
[Signatures Follow]
9
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the date first above written.
XXXXXX BROTHERS BANK, FSB
(Purchaser)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX FARGO BANK, N.A.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
10
EXHIBIT 1
FORM OF OPINION OF COUNSEL
@
@
@
@
Re: Mortgage Loan Sale by Xxxxx Fargo Bank, N.A. (the "Company") to Xxxxxx
Brothers Bank, FSB (the "Purchaser") of fixed rate and adjustable rate, first
and second lien mortgage loans (the "Mortgage Loans") pursuant to that certain
Master Seller's Warranties and Servicing Agreement and Master Mortgage Loan
Purchase Agreement by and between the Company and the Purchaser, dated as of May
1, 2006.
Dear Sir/Madam:
I am Associate General Counsel of Xxxxx Fargo Bank, N.A. and have acted as
counsel to Xxxxx Fargo Bank, N.A. (the "Company"), with respect to certain
matters in connection with the sale by the Company of Mortgage Loans pursuant to
that certain Master Seller's Warranties and Servicing Agreement and Master
Mortgage Loan Purchase Agreement by and between the Company and Xxxxxx Brothers
Bank, FSB (the "Purchaser"), dated as of May 1, 2006, (the "Agreements"), which
sale is in the form of whole Mortgage Loans. Capitalized terms not otherwise
defined herein have the meanings set forth in the Master Seller's Warranties and
Servicing Agreement.
I have examined the following documents:
1. the Master Seller's Warranties and Servicing Agreement;
2. the Master Mortgage Loan Purchase Agreement;
3. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as I have deemed necessary and
relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreements. I
have assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based upon the foregoing, it is my opinion that:
1. The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States and is
qualified to transact business.
2. The Company has the power to engage in the transactions contemplated by the
Agreements, the Custodial Agreement and all requisite power, authority and
legal right to execute and deliver the Agreements, the Custodial Agreement
and the Mortgage Loans, and to perform and observe the terms and conditions
of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Company, signed
(a) the Agreements, each dated as of May 1, 2005, by and between the
Company and the Purchaser, and (b) any other document delivered prior
hereto or on the date hereof in connection with the sale and servicing of
the Mortgage Loans in accordance with the Agreements was, at the respective
times of such signing and delivery, and is, as of the date hereof, duly
elected or appointed, qualified and acting as such officer or
attorney-in-fact, and the signatures of such persons appearing on such
documents are their genuine signatures.
4. Each of the Agreements, the Custodial Agreement, and the Mortgage Loans,
has been duly authorized, executed and delivered by the Company and is a
legal, valid and binding agreement enforceable in accordance with its terms
against the Company, subject to the effect of insolvency, liquidation,
conservatorship and other similar laws administered by the Federal Deposit
Insurance Corporation affecting the enforcement of contract obligations of
insured banks and subject to the application of the rules of equity,
including those respecting the availability of specific performance, none
of which will materially interfere with the realization of the benefits
provided thereunder or with the Purchaser's ownership of the Mortgage
Loans.
5. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original or facsimile signature in order
to complete the transactions contemplated by the Agreements and the
Custodial Agreement in order to execute the endorsements to the Mortgage
Notes and the assignments of the Mortgages, and the original or facsimile
signature of the officer at the Company executing the Agreements, the
Custodial Agreement, the endorsements to the Mortgage Notes and the
assignments of the Mortgages represents the legal and valid signature of
said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreements, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated by the
Agreements and the Custodial Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreements and the Custodial Agreement,
will conflict with or results in or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws of
the Company, the terms of any indenture or other agreement or instrument to
which the Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Company which, in my opinion,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties
or assets of the Company or in any material impairment of the right or
ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which
would draw into question the validity of the Agreements, and the Custodial
Agreement, or of any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform under the terms of the
Agreements and the Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be "threatened"
unless the potential litigant or governmental authority has manifested to
the legal department of the Company or an employee of the Company
responsible for the receipt of process a present intention to initiate such
proceedings; nor have I regarded any legal or governmental actions,
investigations or proceedings as including those that are conducted by
state or federal authorities in connection with their routine regulatory
activities. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient fully to transfer all
right, title and interest of the Company thereto as noteholder and
mortgagee, apart from the rights to service the Mortgage Loans pursuant to
the Agreements.
10. The form of endorsement that is to be used with respect to the Mortgage
Loans is legally valid and sufficient to duly endorse the Mortgage Notes to
the Purchaser. Upon the completion of the endorsement of the Mortgage Notes
and the completion of the assignments of the Mortgages, and the recording
thereof, the endorsement of the
Mortgage Notes, the delivery to the Custodian of the completed assignments
of the Mortgages, and the delivery of the original endorsed Mortgage Notes
to the Custodian would be sufficient to permit the entity to which such
Mortgage Note is initially endorsed at the Purchaser's direction, and to
whom such assignment of Mortgages is initially assigned at the Purchaser's
direction, to avail itself of all protection available under applicable law
against the claims of any present or future creditors of the Company, and
would be sufficient to prevent any other sale, transfer, assignment, pledge
or hypothecation of the Mortgages and the Mortgage Notes by the Company
from being enforceable.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
@
@
@/@
AMENDMENT NO. 1
TO THE MASTER SELLER'S WARRANTIES AND SERVICING AGREEMENT
This is Amendment No. 1 (the "Amendment"), dated as of August 1, 2006 (the
"Amendment Date"), by and among XXXXXX BROTHERS BANK, FSB (the "Purchaser") and
XXXXX FARGO BANK, N.A. (the "Company") to that certain Master Seller's
Warranties and Servicing Agreement (the "Master SWSA"), dated as of May 1, 2006,
between the Purchaser and the Company.
WITNESSETH
WHEREAS, the Company and the Purchaser have agreed, subject to the terms
and conditions of this Amendment that the Master SWSA be amended to reflect
certain agreed upon revisions to the terms of the Master SWSA.
Accordingly, the Company and the Purchaser hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the Master
SWSA is hereby amended as follows:
1. A new definition is hereby added to Article I (Definitions) of the Master
SWSA:
Company Mortgage Loans: A Mortgage Loan that has been underwritten in
accordance with the Underwriting Guidelines.
2. A new definition is hereby added to Article I (Definitions) of the Master
SWSA:
Exception Mortgage Loans: A Mortgage Loan that has been underwritten in
accordance with the Underwriting Guidelines, but for which one or more
exceptions to those guidelines have been allowed. Each Exception Mortgage
Loan, along with the applicable exceptions, shall be identified on Schedule
II attached hereto.
3. The definition of "Mortgage Loan" in Article I (Definitions) of the Master
SWSA is amended by inserting the sentence "The Mortgage Loans shall include the
Exception Mortgage Loans." at the end of the definition:
4. The definition of "Retained Mortgage File" in Article I (Definitions) of the
Master SWSA is amended by deleting the language "items 6 through 9 of Exhibit C"
and inserting in its place "items 6 through 10 of Exhibit C".
3. The definition of "Servicing File" in Article I (Definitions) of the Master
SWSA is amended by deleting the language "items 10 through 25 of Exhibit C" and
inserting in its place "items 11 through 26 of Exhibit C".
4. Section 3.02 (Representations and Warranties Regarding Individual Mortgage
Loans) of the Master SWSA is amended by deleting the following language thereof:
"(vv) Contents of the Retained Mortgage File.
The Retained Mortgage File contains the documents listed as items 6 through
9 of Exhibit C attached hereto;"
and inserting in its place:
"(vv) Contents of the Retained Mortgage File.
The Retained Mortgage File contains the documents listed as items 6 through
10 of Exhibit C attached hereto;"
5. Section 6.05 (Annual Independent Public Accountant's Servicing Report) of the
Master SWSA is amended by deleting the following language thereof:
"Except with respect to any Mortgage Loans that are the subject of a
Securitization Transaction, on or before March 1, of each calendar year,
commencing in 2007, the Company, at its expense, shall cause a firm of
independent public accountants which is a member of the American Institute
of Certified Public Accountants to furnish a statement to each Purchaser to
the effect that such firm has examined certain documents and records
relating to the servicing of the mortgage loans similar in nature and that
such firm is of the opinion that the provisions of this or similar
agreements have been complied with, and that, on the basis of such
examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, nothing has come to their
attention which would indicate that such servicing has not been conducted
in compliance therewith, except for (i) such exceptions as such firm shall
believe to be immaterial, and (ii) such other exceptions as shall be set
forth in such statement. By providing Purchaser a copy of a Uniform Single
Attestation Program Report from their independent public accountant's on an
annual basis, Company shall be considered to have fulfilled its obligations
under this Section 6.05."
and inserting in its place:
"[RESERVED]"
6. Exhibit C (Contents of Each Custodial Mortgage File, Retained Mortgage File
and Servicing File) of the Master SWSA is amended by inserting the following
under the heading "With respect to each Retained Mortgage File":
"10. For each Cooperative Loan, the original or a seller certified true
copy of the following:
The original Pledge Agreement entered into by the Mortgagor with
respect to such Cooperative Loan;
2
UCC-3 assignment in blank (or equivalent instrument), sufficient under
the laws of the jurisdiction where the related Cooperative Apartment
is located to reflect of record the sale and assignment of the
Cooperative Loan to the Purchaser;
Original assignment of Pledge Agreement in blank showing a complete
chain of assignment from the originator of the related Cooperative
Loan to the Company;
Original Form UCC-1 and any continuation statements with evidence of
filing thereon with respect to such Cooperative Loan;
Cooperative Shares with a Stock Certificate in blank attached;
Original Proprietary Lease;
Original Assignment of Proprietary Lease, in blank, and all
intervening assignments thereof;
Original recognition agreement of the interests of the mortgagee with
respect to the Cooperative Loan by the Cooperative, the stock of which
was pledged by the related Mortgagor to the originator of such
Cooperative Loan; and
Originals of any assumption, consolidation or modification agreements
relating to any of the items specified above."
6. Exhibit C (Contents of Each Custodial Mortgage File, Retained Mortgage File
and Servicing File) of the Master SWSA is amended by renumbering items 10
through 25 with 11 through 26.
7. The Master SWSA is hereby further modified by replacing each reference to
"Underwriting Guidelines" with "Underwriting Guidelines (other than exceptions
made for Exception Mortgage Loans)".
7. Except as expressly amended and modified by this Amendment, the Master SWSA
shall continue to be, and shall remain, in full force and effect in accordance
with its terms.
8. This Amendment shall be construed in accordance with the laws of the State of
New York, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
9. This Amendment may be executed in one or more counterparts and by different
parties hereto on separate counterparts, each of which, when so executed, shall
constitute one and the same agreement.
10. This Amendment shall insure to the benefit of and be binding upon the
Purchaser and the Company under the Master SWSA, and their respective successors
and permitted assigns.
11. Any capitalized term, not otherwise herein defined, shall have the meaning
set forth in the Master SWSA.
3
IN WITNESS WHEREOF, the parties have caused their names to be signed hereto
by their respective officers thereunto duly authorized as of the day and year
first above written.
XXXXXX BROTHERS BANK, FSB XXXXX FARGO BANK, N.A.
PURCHASER COMPANY
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxx
------------------------------------ ---------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxxxxx X. Xxxx
Title: Vice President Title: Assistant Vice President
4
ASSIGNMENT AND ASSUMPTION AGREEMENT
August 25, 2006
ASSIGNMENT AND ASSUMPTION, dated August 25, 2006, between Xxxxxx
Capital, A Division of Xxxxxx Brothers Holdings Inc., a New York corporation
having an office at 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Assignor") and Xxxxxxxxx Mortgage Home Loans, Inc. having an office at 000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xx, Xxx Xxxxxx 00000 ("Assignee") and
acknowledged by Xxxxx Fargo Bank, N.A. (the "Company"):
For and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledge, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all
of the right, title and interest of Assignor, as Purchaser, in, to and under
that certain Master Seller's Warranties and Servicing Agreement, dated as of May
1, 2006, by and between Xxxxxx Brothers Bank, FSB (the "Purchaser") and the
Company, as amended by Amendment No. 1 to the Master Seller's Warranties and
Servicing Agreement dated as of August 1, 2006, by and between the Purchaser and
the Company and the Assignment and Conveyance Agreement (06-W67) dated as of
August 18, 2006, by and between the Purchaser and the Company (collectively, the
"Seller's Warranties and Servicing Agreement"), and the mortgage loans attached
hereto as Exhibit A (the "Mortgage Loans") delivered thereunder by the Company
to the Assignor; provided that Assignor expressly excludes from such assignment
the provisions of the Seller's Warranties and Servicing Agreement which provide
for the servicing of mortgage loans other than the Mortgage Loans. The Mortgage
Loans were transferred from the Purchaser to the Assignor pursuant to an
Assignment and Assumption Agreement dated August 25, 2006, by and between the
Purchaser, Assignor and acknowledged by the Company.
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no knowledge
of, any offsets, counterclaims or other defenses available to the Company with
respect to the Seller's Warranties and Servicing Agreement or the Mortgage
Loans;
c. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Seller's Warranties and
Servicing Agreement, the Custodial Agreement or the Mortgage Loans, including
without limitation the transfer of the servicing obligations under the Seller's
Warranties and Servicing Agreement. The Assignor has no knowledge of, and has
not received notice of, any waivers under or amendments or other modifications
of, or assignments of rights or obligations under, the Seller's Warranties and
Servicing Agreement or the Mortgage Loans;
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition of
the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action which
would constitute a distribution of the Mortgage Loans under the Securities Act
of 1933 (the "33 Act") or which would render the disposition of the Mortgage
Loans a violation of Section 5 of the 33 Act or require registration pursuant
thereto;
e. The representations and warranties set forth in Section 3.02
of the Seller's Warranties and Servicing Agreement are true and correct for the
period from, but not including, August 18, 2006, the Closing Date as defined in
the Seller's Warranties and Servicing Agreement, to and including the date
hereof, and are incorporated herein by reference;
f. None of the Mortgage Loans are Pledged Asset Mortgage Loans or
Time$aver(R) Mortgage Loans; and
g. No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place, in any
material respect, on the part of the Company, or the Mortgagor, or to the best
of the Company's knowledge, any appraiser, any builder, or any developer, or any
other third party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan.
3. That Assignee warrants and represent to, and covenants with, the
Assignor and the Company pursuant to Section 12.10 of the Seller's Warranties
and Servicing Agreement that:
a. The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Seller's Warranties and Servicing
Agreement, the Mortgage Loans and the Custodial Agreement, and from and after
the date hereof, the Assignee assumes for the benefit of each of the Company and
the Assignor all of the Assignor's obligations as purchaser thereunder;
b. The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the Mortgage
Loans are in excess of $250,000.00 and will be paid by cash remittance of the
full purchase price within 60 days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person. In this connection,
neither the Assignee nor any person authorized to act therefor has offered the
Mortgage Loans by means of any general advertising or general solicitation
within the meaning of Rule 502(c) of US Securities and Exchange Commission
Regulation D, promulgated under the 1933 Act;
2
e. The Assignee considers itself a substantial sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
f. The Assignee has been furnished with all information regarding
the Mortgage Loans that it has requested from the Assignor or the Company;
g. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition of
the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
with, any person in any manner which would constitute a distribution of the
Mortgage Loans under the 33 Act or which would render the disposition of the
Mortgage Loans a violation of Section 5 of the 33 Act or require registration
pursuant thereto, nor will it act, nor has it authorized or will it authorize
any person to act, in such manner with respect to the Mortgage Loans;
h. Either (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and
the Assignee is not directly or indirectly purchasing the Mortgage Loans on
behalf of, investment manager of, as named fiduciary of, as Trustee of, or with
assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not
result in a prohibited transaction under section 406 of ERISA or section 4975 of
the Code; and
i. The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Seller's Warranties and
Servicing Agreement is:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xx, Xxx Xxxxxx 87501
Attention: Xxxxxxx X. Xxxxx
4. From and after the date hereof, the Company shall note the transfer
of the Mortgage Loans to the Assignee in its books and records, the Company
shall recognize the Assignee as the owner of the Mortgage Loans and the Company
shall service the Mortgage Loans for the benefit of the Assignee pursuant to the
Seller's Warranties and Servicing Agreement, as amended herein. It is the
intention of the Assignor, the Company and the Assignee that the Seller's
Warranties and Servicing Agreement shall be binding upon and inure to the
benefit of the Company and the Assignee and their respective successors and
assigns.
5. The Company and the Assignee hereby agree that the Seller's
Warranties and Servicing Agreement is hereby amended as follows:
3
a. Section 4.01 (Company to Act as Servicer) is hereby amended by
deleting the words "three (3)" in the second paragraph and replacing them with
"five (5)".
b. Section 4.16 (Title, Management and Disposition of REO
Property) is modified as follows:
(1) by adding the following sentence after the first
sentence of the fifth paragraph:
"Notwithstanding any other provision in this Section 4.16, no REO
Property shall be marketed for less than the appraisal value of the
related Mortgaged Property without the prior consent of the Purchaser,
and no REO Property shall be sold for less than ninety percent (90%)
of its appraised value without the prior written consent of the
Purchaser."
(2) by adding the following as the last paragraph:
"The Purchaser shall have the option to manage and operate the REO
Property provided the Purchaser gives written notice of its intention
to do so within thirty (30) days after such REO Property is acquired
in foreclosure or by deed in lieu of foreclosure. The election by the
Purchaser to manage the REO Property shall not constitute a
termination of any rights of the Company pursuant to Section 11.02."
c. Section 5.02 (Statements to Purchaser) is hereby amended by
replacing the language with the following:
"Not later than the tenth (10th) calendar day of each month (of if
such tenth (10th) day is not a Business Day, the first Business Day
immediately preceding such tenth (10th) day), the Company shall
furnish reports in the electronic format attached hereto as Exhibit K
(Exhibit B of this Assignment and Assumption Agreement), or such other
format mutually agreed to by the Company and the Master Servicer, with
a listing of the outstanding Mortgage Loans to include, among other
things, the Mortgage Loan number, the scheduled balance, the scheduled
paid-through dates, the Mortgage Interest Rate and principal and
interest payment, and shall furnish to the Purchaser a Monthly
Remittance Advice, with a trial balance report attached thereto as to
the period ending on the last day of the preceding month."
d. Section 7.01 (Provision of Information) is modified to add the
following at the end of the first paragraph:
4
"In addition, during the term of this Agreement, the Company shall
provide to regulatory authorities supervising the Purchaser or any of
Purchaser's assigns (including beneficial owners of securities issued
in Securitization Transactions backed by the Mortgage Loans) and the
examiners and supervisory agents of such authorities, access to the
documentation required by applicable regulations of such authorities
with respect to the Mortgage Loans. Such access shall be afforded
without charge, but only upon reasonable and prior written request and
during normal business hours at the offices designated by the
Company."
e. Section 8.03 (Limitation on Liability of Company and Others)
is modified to add the following at the end of the last sentence:
", unless any such costs result from a breach of the Company's
representations and warranties made herein or its failure to perform
its obligations in strict compliance with this Agreement."
f. Section 10.01 (Events of Default) is hereby amended by:
(1) replacing the words "five (5) days" in Section 10.01(i)
with the words "two (2) Business Days"; and
(2) adding the phrase ", except as otherwise provided in
Section 6.07," following the words "thirty (30) days," in Section 10.01(ii).
g. Section 11.01 (Termination) is modified by adding the
following sentence to the end of the paragraph:
"The representations and warranties and indemnification provisions
contained herein shall survive the termination of this Agreement."
h. Section 11.03 (Termination of Distressed Mortgage Loans) and
any definitions related to Distressed Mortgage Loans are deleted in its
entirety.
i. Exhibit C (Contents of Each Custodial Mortgage File, Retained
Mortgage File and Servicing File) is hereby amended in number 8, by adding the
phrase "(or in the case of any Mortgage Loan secured by a Mortgaged Property
located in a jurisdiction where such policies are generally not available, an
opinion of counsel of the type customarily rendered in such jurisdiction in lieu
of title insurance)" after the words "title insurance" in the first line and
deleting "other evidence of title such as a copy of the title commitment or copy
of the preliminary title commitment."
6. The Company and the Assignee have executed and delivered to the
other party on or prior to the date hereof the Servicing Control Agreement in
the form attached hereto as Exhibit C.
5
7. The contact information for the Assignee's document custodian is:
La Salle Bank, National Association
0000 Xxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Operations Manager
Telephone: 000-000-0000
Fax: 000-000-0000
Email: Xxxxx.xxxxxxxx@xxxxxxx.xxx
6
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
XXXXXX CAPITAL, A DIVISION OF XXXXXXXXX MORTGAGE HOME LOANS, INC.
XXXXXX BROTHERS HOLDINGS INC. Assignee
Assignor
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------------------------ ---------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxx
Title: Managing Director Title: Senior Vice President
Its: Its:
----------------------------------- --------------------------------
XXXXX FARGO BANK, N.A.
Company
By: /s/ Xxxxx Xxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxx Xxxxxx
Title: Assistant Vice President
Its:
-----------------------------------
7
EXHIBIT A
Mortgage Loans
(delivered to the Assignee in electronic format)
A-1
EXHIBIT B
New Exhibit K to Seller's Warranties and Servicing Agreement
Standard File Layout - Master Servicing
Column Name Description Decimal Format Comment Max Size
---------------------- ---------------------------------------------------------- ------- ------------------------- --------
SER_INVESTOR_NBR A value assigned by the Servicer to define a group of Text up to 10 digits 20
loans.
LOAN_NBR A unique identifier assigned to each loan by the investor. Text up to 10 digits 10
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer. This Text up to 10 digits 10
may be different than the LOAN_NBR.
BORROWER_NAME The borrower name as received in the file. It is not Maximum length of 30 30
separated by first and last name. (Last, First)
SCHED_PAY_AMT Scheduled monthly principal and scheduled interest payment 2 No commas(,) or dollar 11
that a borrower is expected to pay, P&I constant. signs ($)
NOTE_INT_RATE The loan interest rate as reported by the Servicer. 4 Max length of 6 6
NET_INT_RATE The loan gross interest rate less the service fee rate as 4 Max length of 6 6
reported by the Servicer.
SERV_FEE_RATE The servicer's fee rate for a loan as reported by the 4 Max length of 6 6
Servicer.
SERV_FEE_AMT The servicer's fee amount for a loan as reported by the 2 No commas(,) or dollar 11
Servicer. signs ($)
NEW_PAY_AMT The new loan payment amount as reported by the Servicer. 2 No commas(,) or dollar 11
signs ($)
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6 6
ARM_INDEX_RATE The index the Servicer is using to calculate a forecasted 4 Max length of 6 6
rate.
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the beginning 2 No commas(,) or dollar 11
of the processing cycle. signs ($)
ACTL_END_PRIN_BAL The borrower's actual principal balance at the end of the 2 No commas(,) or dollar 11
processing cycle. signs ($)
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that the MM/DD/YYYY 10
borrower's next payment is due to the Servicer, as
reported by Servicer.
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or dollar 11
signs ($)
SERV_CURT_DATE_1 The curtailment date associated with the first curtailment MM/DD/YYYY 10
amount.
CURT_ADJ_ AMT_1 The curtailment interest on the first curtailment amount, 2 No commas(,) or dollar 11
if applicable. signs ($)
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or dollar 11
signs ($)
SERV_CURT_DATE_2 The curtailment date associated with the second MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_ AMT_2 The curtailment interest on the second curtailment amount, 2 No commas(,) or dollar 11
if applicable. signs ($)
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar 11
signs ($)
SERV_CURT_DATE_3 The curtailment date associated with the third curtailment MM/DD/YYYY 10
amount.
CURT_ADJ_AMT_3 The curtailment interest on the third curtailment amount, 2 No commas(,) or dollar 11
if applicable. signs ($)
PIF_AMT The loan "paid in full" amount as reported by the 2 No commas(,) or dollar 11
Servicer. signs ($)
PIF_DATE The paid in full date as reported by the Servicer. MM/DD/YYYY 10
ACTION_CODE The standard FNMA numeric code used to indicate the Action Code Key: 2
default/delinquent status of a particular loan. 15=Bankruptcy,
30=Foreclosure, 60=PIF,
63=Substitution,
65=Repurchase, 70=REO
INT_ADJ_AMT The amount of the interest adjustment as reported by the 2 No commas(,) or dollar 11
Servicer. signs ($)
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if applicable. 2 No commas(,) or dollar 11
signs ($)
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,) or dollar 11
signs ($)
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, if 2 No commas(,) or dollar 11
applicable. signs ($)
B-1
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount due at the 2 No commas(,) or dollar 11
beginning of the cycle date to be passed through to signs ($)
investors.
SCHED_END_PRIN_BAL The scheduled principal balance due to investors at the 2 No commas(,) or dollar 11
end of a processing cycle. signs ($)
SCHED_PRIN_AMT The scheduled principal amount as reported by the Servicer 2 No commas(,) or dollar 11
for the current cycle -- only applicable for signs ($)
Scheduled/Scheduled Loans.
SCHED_NET_INT The scheduled gross interest amount less the service fee 2 No commas(,) or dollar 11
amount for the current cycle as reported by the Servicer signs ($)
-- only applicable for Scheduled/Scheduled Loans.
ACTL_PRIN_AMT The actual principal amount collected by the Servicer for 2 No commas(,) or dollar 11
the current reporting cycle -- only applicable for signs ($)
Actual/Actual Loans.
ACTL_NET_INT The actual gross interest amount less the service fee 2 No commas(,) or dollar 11
amount for the current reporting cycle as reported by the signs ($)
Servicer -- only applicable for Actual/Actual Loans.
PREPAY_PENALTY_ AMT The penalty amount received when a borrower prepays on 2 No commas(,) or dollar 11
his loan as reported by the Servicer. signs ($)
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan waived by the 2 No commas(,) or dollar 11
servicer. signs ($)
MOD_DATE The Effective Payment Date of the Modification for the MM/DD/YYYY 10
loan.
MOD_TYPE The Modification Type. Varchar - value can be 30
alpha or numeric
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and interest advances 2 No commas(,) or dollar 11
made by Servicer. signs ($)
B-2
EXHIBIT : CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET
NOTE: DO NOT NET OR COMBINE ITEMS. SHOW ALL EXPENSES INDIVIDUALLY AND ALL
CREDITS AS SEPARATE LINE ITEMS. CLAIM PACKAGES ARE DUE ON THE REMITTANCE
REPORT DATE. LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT BEING PASSED UNTIL
THE FOLLOWING MONTH. THE SERVICER IS RESPONSIBLE TO REMIT ALL FUNDS PENDING
LOSS APPROVAL AND /OR RESOLUTION OF ANY DISPUTED ITEMS.
The numbers on the 332 form correspond with the numbers listed below.
LIQUIDATION AND ACQUISITION EXPENSES:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
2. The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made
as agreed. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period of coverage, base tax,
interest, penalty. Advances prior to default require evidence of
servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all
payments
* REO repairs > $1500 require explanation
* REO repairs > $3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and
WFB's approved Servicing Officer certification
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
B-3
CREDITS:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds
and line (18b) for Part B/Supplemental proceeds.
TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis (__).
B-4
EXHIBIT 3A: CALCULATION OF REALIZED LOSS/GAIN FORM 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address: _____________________
----------------- ------------- ----------------
|Servicer Loan No.| |Servicer Name| |Servicer Address|
| | | | | |
----------------- ------------- ----------------
XXXXX FARGO BANK, N.A. LOAN NO._____________________________
Borrower's Name: __________________________________________________________
Property Address: _________________________________________________________
LIQUIDATION TYPE: REO SALE 3RD PARTY SALE SHORT SALE CHARGE OFF
WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN YES NO
If "Yes", provide deficiency or cramdown amount ________________________
LIQUIDATION AND ACQUISITION EXPENSES:
(1) Actual Unpaid Principal Balance of
Mortgage Loan $_______________ (1)
(2) Interest accrued at Net Rate _______________ (2)
(3) Accrued Servicing Fees _______________ (3)
(4) Attorney's Fees _______________ (4)
(5) Taxes (see page 2) _______________ (5)
(6) Property Maintenance _______________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) _______________ (7)
(8) Utility Expenses _______________ (8)
(9) Appraisal/BPO _______________ (9)
(10) Property Inspections _______________ (10)
(11) FC Costs/Other Legal Expenses _______________ (11)
(12) Other (itemize) _______________ (12)
Cash for Keys________________________ _______________ (12)
HOA/Condo Fees_______________________ _______________ (12)
_____________________________________ _______________ (12)
TOTAL EXPENSES $_______________ (13)
CREDITS:
(14) Escrow Balance $_______________ (14)
(15) HIP Refund _______________ (15)
(16) Rental Receipts _______________ (16)
(17) Hazard Loss Proceeds _______________ (17)
(18) Primary Mortgage Insurance / Gov't
Insurance _______________ (18a)HUD
Part A
_______________ (18b)HUD
Part B
(19) Pool Insurance Proceeds _______________ (19)
(20) Proceeds from Sale of Acquired Property _______________ (20)
(21) Other (itemize) _______________ (21)
B-5
_________________________________________ _______________ (21)
TOTAL CREDITS $_______________ (22)
TOTAL REALIZED LOSS (OR AMOUNT OF GAIN) $_______________ (23)
B-6
ESCROW DISBURSEMENT DETAIL
TYPE PERIOD OF BASE
(TAX /INS.) DATE PAID COVERAGE TOTAL PAID AMOUNT PENALTIES INTEREST
----------- --------- --------- ---------- ------ --------- --------
B-7
EXHIBIT : STANDARD FILE LAYOUT - DELINQUENCY REPORTING
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
--------------------------- ------------------------------------------------------------- ------- --------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer. This
may be different than the LOAN_NBR
LOAN_NBR A unique identifier assigned to each loan by the originator.
CLIENT_NBR Servicer Client Number
SERV_INVESTOR_NBR Contains a unique number as assigned by an external servicer
to identify a group of loans in their system.
BORROWER_FIRST_NAME First Name of the Borrower.
BORROWER_LAST_NAME Last name of the borrower.
PROP_ADDRESS Street Name and Number of Property
PROP_STATE The state where the property located.
PROP_ZIP Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment is due to MM/DD/YYYY
the servicer at the end of processing cycle,
as reported by Servicer.
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR The case number assigned by the court to the bankruptcy
filing.
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been approved MM/DD/YYYY
by the courts
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either by MM/DD/YYYY
Dismissal, Discharged and/or a Motion For Relief Was
Granted.
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The Servicer MM/DD/YYYY
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such As;
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To End/Close MM/DD/YYYY
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer MM/DD/YYYY
with instructions to begin foreclosure proceedings.
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue Foreclosure MM/DD/YYYY
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a Foreclosure MM/DD/YYYY
Action
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to occur. MM/DD/YYYY
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,)
or dollar
signs ($)
EVICTION_START_DATE The date the servicer initiates eviction of the borrower. MM/DD/YYYY
EVICTION_COMPLETED_DATE The date the court revokes legal possession of the property MM/DD/YYYY
from the borrower.
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
LIST_DATE The date an REO property is listed at a particular price. MM/DD/YYYY
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
OFFER_DATE_TIME The date an offer is received by DA Admin or by the Servicer. MM/DD/YYYY
REO_CLOSING_DATE The date the REO sale of the property is scheduled to close. MM/DD/YYYY
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
OCCUPANT_CODE Classification of how the property is occupied.
B-8
PROP_CONDITION_CODE A code that indicates the condition of the property.
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
CURR_PROP_VAL The current "as is" value of the property based on brokers 2
price opinion or appraisal.
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or appraisal.
IF APPLICABLE:
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
DELINQ_REASON_CODE The circumstances which caused a borrower to stop paying
on a loan. Code indicates the reason why the loan is
in default for this cycle.
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The Pool MM/DD/YYYY
Insurer
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
B-9
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
B-10
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:
DELINQUENCY
CODE DELINQUENCY DESCRIPTION
----------- -----------------------
001 FNMA-Death of principal mortgagor
002 FNMA-Illness of principal mortgagor
003 FNMA-Illness of mortgagor's family member
004 FNMA-Death of mortgagor's family member
005 FNMA-Marital difficulties
006 FNMA-Curtailment of income
007 FNMA-Excessive Obligation
008 FNMA-Abandonment of property
009 FNMA-Distant employee transfer
011 FNMA-Property problem
012 FNMA-Inability to sell property
013 FNMA-Inability to rent property
014 FNMA-Military Service
015 FNMA-Other
016 FNMA-Unemployment
017 FNMA-Business failure
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
023 FNMA-Servicing problems
026 FNMA-Payment adjustment
027 FNMA-Payment dispute
029 FNMA-Transfer of ownership pending
030 FNMA-Fraud
031 FNMA-Unable to contact borrower
INC FNMA-Incarceration
B-11
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:
STATUS CODE STATUS DESCRIPTION
----------- ------------------
09 Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Modification
29 Charge-Off
30 Third Party Sale
31 Probate
32 Military Indulgence
43 Foreclosure Started
44 Deed-in-Lieu Started
49 Assignment Completed
61 Second Lien Considerations
62 Veteran's Affairs-No Bid
63 Veteran's Affairs-Refund
64 Veteran's Affairs-Buydown
65 Chapter 7 Bankruptcy
66 Chapter 11 Bankruptcy
67 Chapter 13 Bankruptcy
B-12
EXHIBIT C
SERVICING CONTROL AGREEMENT
Xxxxxxxxx Mortgage Home Loans, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xx, Xxx Xxxxxx 00000
_______________, 2006
[SERVICER]
[ADDRESS]
Re: Servicing Control Agreement
Gentlemen:
__________ ("Servicer") is servicing certain mortgage loans (the
"Mortgage Loans") for Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx") pursuant
to that certain [servicing agreement (the "Servicing Agreement") [dated
________, 200_] between the Servicer and Xxxxxxxxx]. Xxxxxxxxx obtains financing
from various lenders (each, as further defined below, a "Lender" and
individually and collectively, the "Lenders"), secured by the Mortgage Loans and
related assets, including proceeds thereof (collectively, the "Collateral").
This letter agreement confirms the agreement among the Servicer, Xxxxxxxxx and
the Lenders as to the matters set forth herein.
Servicer may be notified from time to time of the identity of Lenders
by delivery to Servicer of a Lender Notice in the form of Annex 1 attached
hereto, and upon delivery of such Lender Notice to Servicer the lender
identified in such Lender Notice shall be a Lender hereunder entitled to all of
the rights and benefits hereof, until such time as a Lender Termination Notice
in the form of Annex 2 executed by the Lender shall have been delivered to
Servicer with respect to such Lender. Servicer agrees to acknowledge receipt of
each Lender Notice and Lender Termination Notice by executing such Lender Notice
or Lender Termination Notice, as applicable, and delivering it to the applicable
Lender, with a copy to Xxxxxxxxx.
Servicer acknowledges that the Collateral may include Xxxxxxxxx'x
right, title and interest in, to and under the Servicing Agreement, and that
upon an event of default under the applicable financing arrangements, the
applicable Lender shall be entitled to exercise and enforce Xxxxxxxxx'x rights
under the Servicing Agreement, including termination thereof to the extent
provided in the Servicing Agreement. Xxxxxxxxx agrees to pay all termination
fees or other amounts due to Servicer in connection with any termination of the
Servicing Agreement and transfer of the servicing by Lender.
Servicer further agrees that, unless otherwise agreed in writing by
Xxxxxxxxx and all of the Lenders, Servicer shall remit all amounts collected on
account of the Mortgage Loans,
C-1
after deduction of amounts which Servicer is entitled to retain in accordance
with the Servicing Agreement, solely to the following account(s):
(a) with respect to Mortgage Loans that are master serviced by
Xxxxx Fargo as master servicer, to the account specified by such master servicer
for such purposes; and
(b) in all other cases, to the following account:
ABA # 000000000
LaSalle CHGO/CTR/BNF:/LaSalle Trust
Account No. 0000000
Attn: Xxxx Xxxxx
(000) 000-0000
The provisions of the letter agreement shall apply to each Mortgage
Loan from the time Servicer commences servicing of such Mortgage Loan pursuant
to the Servicing Agreement until Servicer has received a Loan Termination Notice
in the form of Annex 3 attached hereto executed by the Lender relating to such
Mortgage Loan.
Xxxxxxxxx shall indemnify and hold the Servicer harmless for any and
all claims asserted against it for any actions taken in good faith by the
Servicer in accordance with this agreement.
Notices or other communications hereunder shall be given or made in
writing (including without limitation by email, telex or telecopy) delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof or in the applicable Lender Notice; or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when transmitted by
telecopy or personally delivered or, in the case of a mailed notice, upon
receipt.
No provision of this letter agreement may be modified, amended or
revoked without the prior written consent of Xxxxxxxxx and each Lender.
This letter agreement shall not be assignable by any party without the
prior written consent of the other parties, shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns, and
shall be governed by and construed in accordance with the internal laws of the
State of New York without reference to principles of conflicts of laws.
C-2
Please acknowledge acceptance and agreement to the foregoing by
signing and returning the enclosed copy of this letter.
Very truly yours,
XXXXXXXXX MORTGAGE HOME LOANS,
INC.
By
-------------------------------------
Name
-----------------------------------
Title
----------------------------------
Address for Notices:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xx, Xxx Xxxxxx 00000
Attention: Xen Stanhope
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Attention: Xxxx Xxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
ACCEPTED AND AGREED TO:
[SERVICER]
By
----------------------------------
Name:
Title:
Address for Notices:
Attention:
Telecopier:
Telephone:
X-0
XXXXX 0
XXXXXX XXXXXX
Xxxxxxxxx:
You are hereby notified that the undersigned is a Lender as defined
in, and subject to the rights and benefits of, the Servicing Control Agreement
between Xxxxxxxxx Mortgage Home Loans, Inc. and the Servicer identified below.
Please acknowledge receipt of this Lender Notice by executing a copy
hereof as provided below and delivering it to Lender, with a copy to Xxxxxxxxx.
XXXXXXXXX MORTGAGE HOME
LOANS, INC.
By:
------------------------------------
Name:
Title:
[LENDER]
By:
------------------------------------
Name:
Title:
Address for Notices:
________________________________________
________________________________________
________________________________________
Attention:
Telecopier:
Telephone:
ACKNOWLEDGED AND AGREED:
[SERVICER]
By:
----------------------------------
Name:
Title:
X-0
XXXXX 0
XXXXXX XXXXXXXXXXX NOTICE
To: [SERVICER]
Re: Letter Agreement dated ___________, 2006 between _____________
("Servicer"), Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx")
and the Lenders from time to time party thereto (the "Servicing
Control Agreement")
Gentlemen:
You are hereby notified that the undersigned Lender is no longer a
Lender as defined in the above referenced Servicing Control Agreement.
Please acknowledge receipt of this Lender Termination Notice by
executing a copy hereof as provided below and delivering it to the undersigned,
with a copy to Xxxxxxxxx.
XXXXXXXXX MORTGAGE HOME LOANS, INC.
By:
------------------------------------
Name:
Title:
[LENDER]
By:
------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
[SERVICER]
By:
----------------------------------
Name:
Title:
X-0
XXXXX 0
XXXX XXXXXXXXXXX NOTICE
To: [SERVICER]
Re: Letter Agreement dated ___________, 2006 between _____________
("Servicer"), Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx")
and the Lenders from time to time party thereto (the "Servicing
Control Agreement")
Gentlemen:
You are hereby instructed, effective on _____________ (the "Servicing
Transfer Date"), to service the Mortgage Loans listed on Exhibit A attached
hereto to _______________.
From and after the Servicing Transfer Date, the Mortgage Loans listed
on Exhibit A shall no longer be subject to the provisions of the Servicing
Control Agreement.
XXXXXXXXX MORTGAGE HOME LOANS, INC.
By:
------------------------------------
Name:
Title:
[LENDER 1]
By:
------------------------------------
Name:
Title:
[LENDER 2]
By:
------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
[SERVICER]
By:
---------------------------------
Name:
Title:
D-3
