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Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings, Inc.,
Purchaser
and
Commercial Federal Mortgage Corporation,
Company
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SELLER'S WARRANTIES AND SERVICING AGREEMENT
Dated as of September 1, 2001
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Conventional Residential Fixed Mortgage Loans
Group No. 2001-1
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF DOCUMENTS
Page
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files; Maintenance of Servicing Files...11
Section 2.02 Books and Records; Transfers of Mortgage Loans...............................................12
Section 2.03 Delivery of Documents........................................................................13
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.......................................................13
Section 3.02 Representations and Warranties Regarding Individual Mortgage Loans...........................16
Section 3.03 Remedies for Breach of Representations and Warranties........................................25
Section 3.04 Early Payment Default........................................................................27
Section 3.05 Review of Mortgage Loans.....................................................................27
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer...................................................................28
Section 4.02 Liquidation of Mortgage Loans................................................................30
Section 4.03 Collection of Mortgage Loan Payments.........................................................31
Section 4.04 Establishment of and Deposits to Custodial Account...........................................31
Section 4.05 Permitted Withdrawals From Custodial Account.................................................32
Section 4.06 Establishment of and Deposits to Escrow Account..............................................34
Section 4.07 Permitted Withdrawals From Escrow Account....................................................34
Section 4.08 Payment of Taxes, Insurance and Other Charges................................................35
Section 4.09 Protection of Accounts.......................................................................35
Section 4.10 Maintenance of Hazard Insurance..............................................................36
Section 4.11 Maintenance of Mortgage Impairment Insurance.................................................37
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance..............................38
Section 4.13 Inspections..................................................................................38
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Section 4.14 Restoration of Mortgaged Property............................................................38
Section 4.15 Maintenance of PMI Policy and/or LPMI Policy; Claims.........................................39
Section 4.16 Title, Management and Disposition of REO Property............................................40
Section 4.17 Real Estate Owned Reports....................................................................41
Section 4.18 Liquidation Reports..........................................................................42
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property...............................42
Section 4.20 PMI and LPMI Obligations.....................................................................42
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances..................................................................................42
Section 5.02 Statements to Purchaser......................................................................43
Section 5.03 Monthly Advances by Company..................................................................43
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property..............................................................44
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files......................................45
Section 6.03 Servicing Compensation.......................................................................45
Section 6.04 Annual Statement as to Compliance............................................................45
Section 6.05 Annual Independent Public Accountants' Servicing Report......................................46
Section 6.06 Right to Examine Company Records.............................................................46
Section 6.07 Appointment and Designation of Master Servicer...............................................46
ARTICLE VII
AGENCY TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion Under this Agreement
Upon a Pass-Through Transfer or a Whole Loan Transfer on One or
More Reconstitution Dates....................................................................46
Section 7.02 Owner's Repurchase and Indemnification Obligations...........................................49
Section 7.03 Indemnification; Third Party Claims..........................................................50
ARTICLE VIII
COMPANY TO COOPERATE
Section 8.01 Provision of Information.....................................................................51
Section 8.02 Financial Statements; Servicing Facility.....................................................51
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ARTICLE IX
THE COMPANY
Section 9.01 Indemnification; Third Party Claims..........................................................52
Section 9.02 Merger or Consolidation of the Company.......................................................53
Section 9.03 Limitation on Liability of Company and Others................................................53
Section 9.04 Limitation on Resignation and Assignment by Company..........................................53
ARTICLE X
DEFAULT
Section 10.01 Events of Default............................................................................54
Section 10.02 Waiver of Defaults...........................................................................56
ARTICLE XI
TERMINATION
Section 11.01 Termination..................................................................................56
Section 11.02 Termination Without Cause....................................................................56
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.........................................................................57
Section 12.02 Amendment....................................................................................58
Section 12.03 Governing Law................................................................................58
Section 12.04 Duration of Agreement........................................................................58
Section 12.05 Notices......................................................................................58
Section 12.06 Severability of Provisions...................................................................59
Section 12.07 Relationship of Parties......................................................................59
Section 12.08 Execution; Successors and Assigns............................................................59
Section 12.09 Recordation of Assignments of Mortgage.......................................................59
Section 12.10 Assignment by Purchaser......................................................................59
Section 12.11 No Personal Solicitation.....................................................................60
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EXHIBITS
EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B CONTENTS OF EACH MORTGAGE FILE
EXHIBIT C MORTGAGE LOAN DOCUMENTS
EXHIBIT D-1 FORM OF CUSTODIAL ACCOUNT
CERTIFICATION
EXHIBIT D-2 FORM OF CUSTODIAL ACCOUNT
LETTER AGREEMENT
EXHIBIT E-1 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT E-2 FORM OF ESCROW ACCOUNT
LETTER AGREEMENT
EXHIBIT F FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I ACKNOWLEDGMENT AGREEMENT
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This is a Seller's Warranties and Servicing Agreement for conventional
fixed rate residential first lien mortgage loans, dated and effective as of
September 1, 2001, and is executed between Xxxxxx Capital, A Division of Xxxxxx
Brothers Holdings, Inc., as purchaser (the "Purchaser"), and Commercial Federal
Mortgage Corporation, as seller and servicer (the "Company").
W I T N E S S E T H:
WHEREAS, the Purchaser has agreed to purchase from the Company and the
Company has agreed to sell to the Purchaser certain Mortgage Loans;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule, which is
annexed hereto as Exhibit A; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the management, 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 context
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 such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Acknowledgment Agreement: The document, substantially in the form of
Exhibit I, to be executed by the Purchaser and the Company on or prior to each
Closing Date which document shall amend the Mortgage Loan Schedule attached as
Exhibit A hereto to reflect the addition of Mortgage Loans to such Exhibit A and
which document reflects the addition of Mortgage Loans which are subject to the
terms and conditions of this Agreement.
Agreement: This Seller's Warranties and Servicing Agreement and all
amendments hereof and supplements hereto.
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ALTA: The American Land Title Association or any successor thereto.
Ancillary Income: All fees derived from the Mortgage Loans, other than
Servicing Fees, including but not limited to, late charges, prepayment fees,
fees received with respect to checks or bank drafts returned by the related bank
for non-sufficient funds, assumption fees, optional insurance administrative
fees and all other incidental fees and charges. The Company shall retain all
Ancillary Income as part of the Servicing Fee to the extent not required to be
deposited into the Custodial Account.
Appraised Value: The value set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value
of the Mortgaged Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking Agency
shall have the meaning ascribed to it by Section 1813(q) of Title 12 of the
United States Code, as amended from time to time.
Approved Flood Policy Insurer: Any of the following insurers: Flood Data
Services, Inc., Flood Zone, Inc., GEOTrac, or Transamerica Flood Hazard
Certification.
Approved Tax Service Contract Provider: Any of the following providers:
First American, TransAmerica, Lereta or Fidelity
Assignment and Conveyance: An Assignment and Conveyance in the form of
Exhibit 6 to the Mortgage Loan Purchase Agreement dated as of the date hereof,
by and between the Seller and the Purchaser.
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.
Best Efforts: Efforts determined to be reasonably diligent by the Purchaser
or Company, as the case may be, in its sole discretion. Such efforts do not
require the Purchaser or Company, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Purchaser or Company, as the case may be, to advance or expend fees
or sums of money in addition to those specifically set forth in this Agreement.
BIF: The Bank Insurance Fund, or any successor thereto.
BPO: A broker's price opinion with respect to a Mortgaged Property.
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 State of New York are
authorized or obligated by law or executive order to be closed.
Closing Date: The date or dates set forth on the related Purchase Price and
Terms Letter on which the Purchaser from time to time shall purchase and the
Company from time to time shall sell, the Mortgage Loans listed on the related
Mortgage Loan Schedule.
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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.
Company: Commercial Federal Mortgage Corporation, or its successor in
interest or assigns, or any successor to the Company under this
Agreement appointed as herein provided.
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 or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.04.
Custodial Agreement: That certain Custodial Agreement, dated as of March 1,
1996 by and between the Purchaser and Xxxxx Fargo Bank Minnesota, formerly known
as Norwest Bank Minnesota, N.A.
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: The date set forth on the related Purchase Price and Terms
Letter.
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.
Determination Date: The 15th day (or if such 15th day is not a Business
Day, the Business Day immediately preceding such 15th day) of the month of the
related Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace. With respect to the Mortgage
Loans for which payment from the Mortgagor is due on a day other than the first
day of the month, such Mortgage Loans will be treated as if the Monthly Payment
is due on the first day of the month of such Due Date.
Due Period: With respect to each Remittance Date, the period commencing on
the first day of the month preceding the month of the Remittance Date and ending
on the last day of the month preceding the Remittance Date.
Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Determination Date in each month:
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(a) direct general obligations of, or obligations fully and unconditionally
guaranteed as to the timely payment of principal and interest by, the United
States or any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States, Federal Housing
Administration debentures, Xxxxxxx Mac senior debt obligations, and Xxxxxx Mae
senior debt obligations, but excluding any of such securities whose terms do not
provide for payment of a fixed dollar amount upon maturity or call for
redemption;
(b) Federal Housing Administration debentures; provided, that any such
investment shall be rated in one of the two highest ratings categories by each
Rating Agency;
(c) Xxxxxxx Mac participation certificates which guaranty timely payment of
principal and interest and senior debt obligations;
(d) Consolidated senior debt obligations of any Federal Home Loan Bank;
(e) Xxxxxx Mae mortgage-backed securities (other than stripped mortgage
securities which are valued greater than par on the portion of unpaid principal)
and senior debt obligations;
(f) Federal funds, certificates of deposit, time deposits, and bankers'
acceptances (having original maturities of not more than 365 days) of any
domestic bank, the short-term debt obligations of which have been rated F-1 or
better by Fitch, A-1 or better by Standard & Poor's and P-1 by Moody's;
(g) Deposits of any bank or savings and loan association (the long-term
deposit rating of which is Baa3 or better by Moody's and BBB by each of Standard
& Poor's and Fitch) which has combined capital, surplus and undivided profits of
at least $50,000,000 which deposits are insured by the FDIC and held up to the
limits insured by the FDIC;
(h) Investment agreements provided:
(i) The agreement is with a bank or insurance company which has
unsecured, uninsured and unguaranteed senior debt obligations rated Aa2
or better by Moody's and AA or better by each of Standard & Poor's and
Fitch, or is the lead bank of a parent bank holding company with an
uninsured, unsecured and unguaranteed senior debt obligation meeting
such rating requirements;
(ii) Moneys invested thereunder may be withdrawn without any
penalty, premium or charge upon not more than one day's notice
(provided such notice may be amended or canceled at any time prior to
the withdrawal date); (iii) The agreement is not subordinated to any
other obligations of such insurance company or bank;
(iv) The same guaranteed interest rate will be paid on any future
deposits made pursuant to such agreement; and
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(v) The Purchaser receives an opinion of counsel (at the expense of
the party requesting the investment) that such agreement is an
enforceable obligation of such insurance company or bank.
(i) Repurchase agreements collateralized by securities described in (a),
(c), or (e) above with any registered broker/dealer subject to the Securities
Investors Protection Corporation's jurisdiction and subject to applicable limits
therein promulgated by Securities Investors Protection Corporation or any
commercial bank, if such broker/dealer or bank has an uninsured, unsecured and
unguaranteed short-term or long-term obligation rated P-1 or Aa2, respectively,
or better by Moody's, A-1 or AA, respectively, or better by Standard & Poor's
and A-1 or AA, respectively, or better by Fitch, provided:
(i) A master repurchase agreement or specific written repurchase
agreement governs the transaction;
(ii) The securities are held free and clear of any lien by the
Purchaser or an independent third party acting solely as agent for the
Purchaser, and such third party is (a) a Federal Reserve Bank or (b) a
bank which is a member of the FDIC and which has combined capital,
surplus and undivided profits of not less than $125 million, and the
Purchaser shall have received written confirmation from such third
party that it holds such securities, free and clear of any lien, as
agent for the Purchaser;
(iii) A perfected first security interest under the Uniform
Commercial Code, or book entry procedures prescribed at 31 CFR 306.1 et
seq. or 31 CFR 350.0 et seq., in such securities is created for the
benefit of the Purchaser;
(iv) The repurchase agreement has a term of thirty days or less and
the Purchaser will value the collateral securities no less frequently
than monthly and will liquidate the collateral securities if any
deficiency in the required collateral percentage is not restored within
two business days of such valuation; and
(v) The fair market value of the collateral securities in relation
to the amount of the repurchase obligation, including principal and
interest, is equal to at least 106%;
(j) Commercial paper (having original maturities of not more than 270 days)
rated in the highest short-term rating categories of each Rating Agency;
(k) Investments in no load money market funds registered under the
Investment Company Act of 1940, whose shares are registered under the Securities
Act and rated Aaa by Moody's, AAAm or AAAm-G by Standard & Poor's and AAA, if
rated by Fitch; and
(l) such other investments bearing interest or sold at a discount approved
in writing by the Purchaser in its sole discretion provided that no instrument
described above shall evidence either the right to receive (a) only interest
with respect to the obligations underlying such instrument or (b) both principal
and interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provided a
yield to maturity at par greater than 120% of the yield to maturity at par of
the underlying obligations; and provided, further that all instruments described
hereunder shall mature at par on or prior to the next succeeding Payment Date
unless otherwise provided in this Agreement and that no instrument described
hereunder may be purchased at a price greater than par if such instrument may be
prepaid or called at a price less than its purchase price prior to stated
maturity.
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Notwithstanding anything herein to the contrary, with respect to Mortgage
Loans subject to a Whole Loan Transfer or a Pass-Through Transfer, in the event
that the applicable Reconstitution Agreement has a more limiting definition of
"Eligible Investments", then the definition contained in such Reconstitution
Agreement shall apply to such Mortgage Loans.
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.
Xxxxxx Xxx: The Federal National Mortgage Association, or any successor
thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions 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 Remittance Date: With respect to each Mortgage Loan, the 18th day of
the month following the month in which the related Closing Date occurs, or if
such 18th day is not a Business Day, the first Business Day immediately
following such 18th day.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
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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 Mortgage Loan, the ratio of
the Stated Principal Balance of the Mortgage Loan as of the related Cut-off Date
(unless otherwise indicated) to the lesser of (a) the Appraised Value of the
Mortgaged Property and (b) if the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property, expressed as a percentage.
LPMI Loan: A Mortgage Loan with a LPMI Policy.
LPMI Policy: A policy of primary mortgage guaranty insurance issued by
United Guaranty Corporation or another Qualified Insurer pursuant to
which the related premium is to be paid by the Company of the related Mortgage
Loan from payments of interest made by the Mortgagor in an amount as is set
forth in the related Trade Confirmation Letter and Mortgage Loan Schedule.
LPMI Fee: With respect to each LPMI Loan, the portion of the Mortgage
Interest Rate as set forth on the related Mortgage Loan Schedule (which shall be
payable solely from the interest portion of Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds), which, during such
period prior to the required cancellation of the LPMI Policy, shall be used to
pay the premium due on the related LPMI Policy.
Monthly Advance: With respect to each Remittance Date and each Mortgage
Loan, an amount equal to the Monthly Payment (with the interest portion of such
Monthly Payment, adjusted to the Mortgage Loan Remittance Rate) which was due on
the Mortgage Loan, and (i) which was delinquent at the close of business on the
immediately preceding Determination Date, and (ii) which was not the subject of
a previous Monthly Advance.
Monthly Payment: The scheduled monthly payment of principal and interest on
a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple or leasehold estate in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit B annexed hereto, and any additional documents required to be
added to the Mortgage File pursuant to this Agreement.
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.
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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 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: The documents listed in Exhibit C-1 hereto.
Mortgage Loan Package: A pool of Mortgage Loans sold to the Purchaser by
the Company on a Closing Date.
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
Mortgage Interest Rate minus (i) the Servicing Fee Rate and (ii) with respect to
LPMI Loans, the LPMI Fee.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package, a
schedule of Mortgage Loans annexed hereto as Exhibit A, such schedule setting
forth the following information with respect to each Mortgage Loan: (1) the
Company's Mortgage Loan identifying number; (2) the Mortgagor's and
Co-Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state, county, and the zip code; (4) the lot, block, and section
numbers of the Mortgaged Property; (5) a code indicating whether the loan was
originated through a correspondent, retail, or wholesale channel; (6) the broker
identification number; (7) a code indicating whether the Mortgaged Property is a
single family residence, a 2-4 family dwelling, a PUD, a townhouse or a unit in
a high-rise or low-rise condominium project; (8) the year in which the Mortgaged
Property was built; (9) the number of units for all Mortgaged Properties; (10)
the number of bedrooms and rents by unit; (11) the original months to maturity
or the remaining months to maturity from the related Cut-off Date, in any case
based on the original amortization schedule, and if different, the maturity
expressed in the same manner but based on the actual amortization schedule; (12)
a code indicating the lien status of the Mortgage Loan; (13) the Loan to Value
Ratio at origination; (14) the Combined Loan to Value Ratio at origination, if
applicable; (15) the Appraised Value and purchase price, if applicable, of the
Mortgaged Property; (16) the Mortgage Interest Rate at the time of origination;
(17) the Mortgage Interest Rate as of the related Cut-off Date; (18) the
application date of the Mortgage Loan; (19) the Mortgage Loan
approval/commitment date; (20) the origination date of the Mortgage Loan; (21)
the first payment date of the Mortgage Loan; (22) the stated maturity date of
the Mortgage Loan; (23) the amount of the Monthly Payment as of the related
Cut-off Date; (24) the amount of the Monthly Payment at the time of origination;
(25) the next Due Date of the Mortgage Loan; (26) a twelve month history for the
Mortgage Loan and the number of times thirty, sixty, and ninety days delinquent
in the past twelve months; (27) a code indicating the payment status of the
Mortgage Loan (i.e. bankruptcy, foreclosure, REO); (28) a twelve month history
for the prior Mortgage Loan and the number of times thirty, sixty, and ninety
days delinquent in the past twelve months; (29) the original principal amount of
the Mortgage Loan; (30) the original principal amount of any senior Mortgage
Loans; (31) the actual principal balance of the Mortgage Loan as of the close of
business on the related Cut-off Date, after deduction of payments of principal
actually collected on or before the related Cut-off Date; (32) the scheduled
principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date; after deduction of payments of principal due on or before
the related Cut-off Date, whether or not collected, if applicable; (33) the
Mortgage Loan purpose type; (34) the occupancy status of the Mortgaged Property
at the time of origination; (35) the Mortgagor's and Co-Mortgagor's FICO score;
(36) a code indicating the mortgage insurance provider (PMI or LPMI) and percent
of coverage, if applicable; (37) the mortgage insurance certificate number; a
code indicating the method of payment for mortgage insurance premiums and cost
(LPMI), if applicable; (38) the loan documentation type; (39) the back-end debt
to income ratio; (40) number of Mortgagors; (41) Mortgagor Social Security
Number; (42) co-Mortgagor Social Security Number; (43) Mortgagor date of birth;
(44) co-Mortgagor date of birth; (45) Mortgagor gender; (46) co-Mortgagor
gender; (47) Mortgagor race; (48) co-Mortgagor race; (49) combined annual
income; (50) a code indicating first time buyer; (51) a code indicating whether
the Mortgage Loan has a prepayment penalty; (52) a code indicating the
prepayment penalty term and the prepayment penalty amount of the Mortgage Loan,
if any; (53) the monthly Servicing Fee, if provided; (54) the tax service
contract provider; (55) the flood insurance certification contract provider;
(56) the monthly tax and insurance payment; (57) the escrow balance as of the
Cut-Off Date; and (58) the MIN #, if applicable. With respect to the Mortgage
Loans in each Mortgage Loan Package in the aggregate, the related Mortgage Loan
Schedule shall set forth the following information, as of the related Cut-off
Date: (1) the number of Mortgage Loans; (2) the current aggregate outstanding
principal balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans.
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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.
Mortgagor: The obligor on a Mortgage Note.
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 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.
Pass-Through Transfer: The sale or transfer of some or all of the Mortgage
Loans to (i) a trust to be formed as part of a publicly-issued and/or privately
placed, rated or unrated, mortgage pass-through transaction, or (ii) to Xxxxxx
Xxx, Xxxxxxx Mac or GNMA on a negotiated basis, in each case, retaining the
Company as "servicer" (with or without a master servicer) thereunder.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
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PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.
Prepayment Interest Shortfall Amount: With respect to any Mortgage Loan
that was subject to a Principal Prepayment in full or in part during any Due
Period, which Principal Prepayment was applied to such Mortgage Loan prior to
such Mortgage Loan's Due Date in such Due Period, the amount of interest (net of
the related Servicing Fee, and with respect to the LPMI Loans, the LPMI Fee)
that would have accrued on the amount of such Principal Prepayment during the
period commencing on the date as of which such Principal Prepayment was applied
to such Mortgage Loan and ending on the day immediately preceding such Due Date,
inclusive.
Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in the "Money Rates" section of 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 month preceding the month in which the
related Remittance Date occurs.
Purchaser: Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings, Inc. or
its successor in interest or any successor to the Purchaser under this Agreement
as herein provided.
Qualified Depository: A depository the accounts of which are insured by the
FDIC through the BIF or the SAIF and the debt obligations of which are rated AA
or better by Standard & Poor's Corporation.
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 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) if
applicable, have a Gross Margin not less than that of the Deleted Mortgage Loan;
(v) if applicable, have a maximum Lifetime Rate Cap not less than that of the
Deleted Mortgage Loan; (vi) if applicable, have a Periodic Rate Cap not less
than that of the Deleted Mortgage Loan; and (vii) comply with each
representation and warranty set forth in Sections 3.01 and 3.02.
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Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's or their
respective successors designed by the Purchaser.
Reconstitution Agreements: The agreement or agreements entered into by the
Purchaser, the Company, and certain third parties on the Reconstitution Date(s)
with respect to any or all of the Mortgage Loans serviced hereunder, in
connection with a Whole Loan Transfer or a Pass-Through Transfer as set forth in
Section 7.01, including, but not limited to, a pooling and servicing agreement
and/or a subservicing/master servicing agreement and related custodial/trust
agreement and related documents with respect to a Pass-Through Transfer. Such
agreement or agreements shall prescribe the rights and obligations of the
Company in servicing the related Mortgage Loans and shall provide for servicing
compensation to the Company (calculated on a weighted average basis for all the
related Mortgage Loans as of the Reconstitution Date), at least equal to the
Servicing Fee and Ancillary Income due the Company in accordance with this
Agreement or the servicing fee required pursuant to the Reconstitution
Agreement, whichever is greater. The form of relevant Reconstitution Agreement
to be entered into by the Purchaser and/or master servicer or trustee and the
Company with respect to Pass-Through Transfers and/or Whole Loan Transfers shall
be reasonably satisfactory in form and substance to the Purchaser and the
Company (giving due regard to any rating or master servicing requirements) and
servicing provisions contained therein shall be substantially similar to those
contained in this Agreement and shall not contain any obligations materially
more onerous than those contained herein that materially increase the expenses
or obligations of the Company, unless otherwise mutually agreed by the parties.
Reconstitution Date: The date or dates on which any or all of the Mortgage
Loans serviced under this Agreement shall be removed from this Agreement and
reconstituted as part of a Whole Loan Transfer or a Pass-Through Transfer
pursuant to Section 7.01 hereof. On such date or dates, the Mortgage Loans
transferred shall cease to be covered by this Agreement and the Company's
servicing responsibilities shall cease under this Agreement with respect to the
related transferred Mortgage Loans.
Record Date: The close of business of the last Business Day of the month
preceding the month of the related Remittance Date.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any month, beginning with the
First Remittance Date.
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
Purchasers through foreclosure or by deed in lieu of foreclosure, as described
in Section 4.16.
Repurchase Price: With respect to any Mortgage Loan, 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 date
of repurchase, 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.
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SAIF: The Savings Association Insurance Fund, or any successor thereto.
Securities Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses other than Monthly Advances (including reasonable attorneys'
fees and disbursements) incurred in the performance by the 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 and (d) compliance with the obligations
under Section 4.08.
Servicing Fee: With respect to each Mortgage Loan that has not been removed
from this Agreement as part of a Pass-Through Transfer or a Whole Loan Transfer
and with respect to each Mortgage Loan that has been removed from this agreement
as part of a Pass-Through Transfer or a Whole Loan Transfer and subsequently
repurchased by the Purchaser pursuant to Section 7.02 hereof and again becoming
subject to this Agreement, the monthly 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 computed.
Servicing Fee Rate: 0.25% per annum.
Servicing File: With respect to each Mortgage Loan, the file retained by
the Company consisting of originals of all documents in the Mortgage File which
are not delivered to the Custodian and copies of the Mortgage Loan Documents
listed in Exhibit C-1 the originals of which are delivered to the Custodian
pursuant to Section 2.01.
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.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the related Cut-off Date after giving effect to
payments of principal due on or before such date, whether or not received, minus
(ii) all amounts previously distributed to the Purchaser with respect to the
related Mortgage Loan representing payments or recoveries of principal or
advances in lieu thereof.
Underwriting Guidelines: The underwriting guidelines of the Company with
respect to jumbo prime Mortgage Loans, attached hereto as Exhibit H.
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Whole Loan Transfer: The sale or transfer of some or all of the Mortgage
Loans to a third party purchaser in a whole loan transaction pursuant to a
seller's warranties and servicing agreement or a participation and servicing
agreement, retaining the Company as "servicer" thereunder.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files.
The Company, on each Closing Date does hereby sell, transfer, assign, set
over and convey to the Purchaser, without recourse, but subject to the terms of
this Agreement, all the right, title and interest of the Company in and to the
Mortgage Loans in the related Mortgage Loan Package. Pursuant to Section 2.03,
the Company has delivered the Mortgage Loan Documents for each Mortgage Loan in
the Mortgage Loan Package to the Custodian.
The contents of each 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. The Company shall maintain a Servicing File consisting of a copy
of the contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the Custodian. The possession of each Servicing
File by the Company is at the will of the Purchaser for the sole purpose of
servicing the related Mortgage Loan, 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 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. Each Servicing File shall be segregated from the other books and
records of the Company and shall be marked appropriately to reflect clearly the
sale of the related Mortgage Loan to the Purchaser. The Company shall release
its custody of the contents of any 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 or is in connection
with a repurchase of any Mortgage Loan pursuant to Section 3.03, 3.06, or 6.02.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
From and after the sale of the Mortgage Loans to the Purchaser all rights
arising out of the Mortgage Loans in a Mortgage Loan Package 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 such 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.
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The sale of each Mortgage Loan in a Mortgage Loan Package 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. 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 Mae 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 and periodic inspection reports 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
Xxx 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
Servicing File during the time the Purchaser retains ownership of a 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, provided, however, that (i) the transferee will not be deemed to
be a Purchaser hereunder binding upon the Company unless such transferee shall
agree in writing to be bound by the terms of this Agreement and an original
counterpart of the instrument of transfer and an assignment and assumption of
this Agreement in the form of Exhibit G hereto executed by the transferee shall
have been delivered to the Company, and (ii) with respect to each Mortgage Loan
Package, in no event shall there be more than three Persons at any given time
having the status of "Purchaser" hereunder. 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.
Section 2.03 Delivery of Documents.
On or before the date which is five Business Days prior to the related
Closing Date, the Company shall deliver and release to the Custodian those
Mortgage Loan Documents as required by this Agreement with respect to each
Mortgage Loan in the related Mortgage Loan Package a list of which is attached
to the related Assignment and Conveyance.
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On or prior to the related Closing Date, the Custodian shall certify its
receipt of all such Mortgage Loan Documents required to be delivered pursuant to
the Custodial Agreement, as evidenced by the Initial Certification of the
Custodian in the form annexed to the Custodial Agreement. The Company shall be
responsible for maintaining the Custodial Agreement for the benefit of the
Purchaser. Purchaser shall pay all fees and expenses of the Custodian.
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 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 one
week 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
days of its submission for recordation.
On or prior to the date which is three Business Days prior to the related
Closing Date, the Seller shall deliver to the Purchaser the related Mortgage
Loan Schedule.
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company represents and warrants to the Purchaser that as of each
Closing Date:
(a) Due Organization and Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nebraska 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 corporate 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 requisite corporate 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, 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;
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(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, conditions or provisions of the
Company's charter 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 an acceleration under any of the foregoing, 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, as calculated at the Servicing Fee Rate, 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. 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 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 to the best of the Company's knowledge 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 taken in connection with the obligations of the
Company 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;
-16-
(i) Selection Process. The Mortgage Loans were selected from among the
outstanding fixed rate one- to four-family mortgage loans in the Company's
portfolio at the related Closing Date as to which the representations and
warranties set forth in Section 3.02 could be made and such selection was not
made in a manner so as to affect adversely the interests of the Purchaser;
(j) Pool Characteristics. With respect to each Mortgage Loan Package, the
Mortgage Loan characteristics set forth on Exhibit 2 to the related Assignment
and Conveyance are true and complete;
(k) 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;
(l) 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;
(m) Financial Statements. The Company has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position at the end of each such period of the Company and
its subsidiaries and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Company has delivered
information as to its mortgage loan payment delinquency experience for the
immediately preceding three-year period, in each case with respect to mortgage
loans owned by it during such period, and all such information so delivered is
true and correct in all material respects. The Company has delivered a comfort
letter from its auditors with respect to such delinquency information. There has
been no change in the business, operations, financial condition, properties or
assets of the Company since the date of the Company's financial statements that
would have a material adverse effect on its ability to perform its obligations
under this Agreement. The Company has completed any forms requested by the
Purchaser in a timely manner and in accordance with the provided instructions;
(n) 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 connection with the sale of the Mortgage Loans;
(o) Origination. The Company's decision to originate any mortgage loan or
to deny any mortgage loan application is an independent decision based upon
Company's Underwriting Guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated;
-17-
(p) 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 for the Mortgage Loans; and
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 related
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the related
Closing Date for the Mortgage Loan under the terms of the Mortgage Note have
been made and credited. No payment required under the Mortgage Loan has been 30
or more days delinquent at any time in the 12 months preceding the related
Closing Date. The first Monthly Payment shall be made with respect to the
Mortgage Loan on its Due Date or within the grace period, all in accordance with
the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with the
terms of the Mortgages, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
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, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for 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 greater, to the day which precedes by
one 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 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 Mortgage Loan File delivered to the
Custodian and the terms of which are reflected in the related Mortgage Loan
Schedule;
-18-
(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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all buildings
or other improvements upon the Mortgaged Property are insured by a generally
acceptable insurer against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where the Mortgaged Property is
located pursuant to insurance policies conforming to the requirements of Section
4.10. If upon origination of the Mortgage Loan, the Mortgaged Property was in an
area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards (and such flood insurance has been made
available) a flood insurance policy meeting the requirements of the current
guidelines of the Federal Flood Insurance Administration is in effect which
policy conforms to the requirements of Section 4.10. 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 the 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. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering the common facilities of a planned unit development. 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 engaged in, and has no knowledge of the
Mortgagor's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either, including without
limitation, no unlawful fee, unlawful commission, unlawful kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Company;
(g) 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,
equal credit opportunity or disclosure 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;
(h) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Company has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Company waived any default resulting from any action or inaction by the
Mortgagor;
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(i) Location and Type of Mortgaged Property. The Mortgaged Property is a
fee simple or leasehold property located in the state identified in the related
Mortgage Loan Schedule and consists of a parcel of real property with a detached
single family residence erected thereon. No residence or dwelling is a mobile
home or a manufactured dwelling. No portion of the Mortgaged Property is used
for commercial purposes;
(j) Valid First Lien. The Mortgage is a valid, subsisting, enforceable and
perfected first lien on the Mortgaged Property, including all buildings and
improvements on the Mortgaged Property, 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 to otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (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
provided by the mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and creates a
valid, 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. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secured debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the Mortgage 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 and the Mortgage and any other related agreement had legal capacity to
enter into the Mortgage Loan and to execute and deliver the Mortgage Note and
the Mortgage and any other related agreement, and the Mortgage Note and the
Mortgage have been duly and properly executed by such parties. The documents,
instruments and agreements submitted for loan underwriting were not falsified
and contain no untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading. No fraud was committed in connection with the
origination of the Mortgage Loan. The Company has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
-20-
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed and
the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Company is the sole owner of record and holder of the
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the Company has
good and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan therein to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;
(n) Doing Business. 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;
(o) LTV, PMI Policy. The Mortgage Loan has an LTV equal to or less than
103%. Any Mortgage Loan with an LTV over 80% has a PMI Policy insuring, as to
payment defaults, the excess LTV over 67% (or such other percentage as stated in
the related Purchase Price and Terms Letter) of the Appraised Value until the
LTV of such Mortgage Loan is reduced to 80%. All provisions of such PMI Policy
have been and are being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. No action, inaction, or event
has occurred and no state of facts exists that has, or will result in the
exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to
a PMI Policy obligates the Mortgagor thereunder to maintain the PMI Policy and
to pay all premiums and charges in connection therewith; provided, that, with
respect to LPMI Loans, the Company is obligated thereunder to maintain the LPMI
Policy and to pay all premiums and charges in connection therewith. The Mortgage
Interest Rate for the Mortgage Loan as set forth on the Mortgage Loan Schedule
is net of any such insurance premium;
-21-
(p) Title Insurance. The Mortgage Loan is covered by either (i) an
attorney's opinion of title and abstract of title the form and substance of
which is acceptable to mortgage lending institutions making mortgage loans in
the area where the Mortgaged Property is located or (ii) an ALTA lender's title
insurance policy or other generally acceptable form of policy of insurance
acceptable to Xxxxxx Xxx 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 of the Mortgage in the original principal
amount of the Mortgage Loan (or to the extent that a Mortgage Note provides for
negative amortization, the maximum amount of negative amortization in accordance
with the Mortgage), subject only to the exceptions contained in clauses (1), (2)
and (3) of paragraph (j) of this Section 3.02. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. 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 including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Company;
(q) No Defaults. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and neither the Company nor its predecessors have waived any
default, breach, violation or event of acceleration;
(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;
(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 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) Origination: Payment Terms. At the time the Mortgage Loan was
originated, the originator was a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Sections 203 and 211 of the National Housing
Act or a savings and loan association, a savings bank, a commercial bank or
similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is the fixed interest rate set forth
in the Mortgage Note. The Mortgage Note is payable each month in equal monthly
installments of principal and interest, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from commencement of
amortization. There is no negative amortization;
-22-
(u) Customary Provisions. The Mortgage contains 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. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on,
or trustee's sale of, the Mortgaged Property pursuant to the proper procedures,
the holder of the Mortgage Loan 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) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Company's Underwriting Guidelines for High
Loan-to-Value Mortgage Loans in effect at the time the Mortgage Loan was
originated. The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx
Mac or Xxxxxx Mae;
(w) Occupancy of the Mortgaged Property. As of the related Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities. The Mortgagor represented at the time of origination of
the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
referred to in (j) above;
(y) 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 Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(z) Acceptable Investment. The Company has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered for the
Mortgage Loan by the Company under this Agreement as set forth in Exhibit C
attached hereto have been delivered to the Custodian. The Company is in
possession of a complete, true and accurate Mortgage File in compliance with
Exhibit B, except for such documents the originals of which have been delivered
to the Custodian;
-23-
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(cc) Due on Sale. The Mortgage contains an enforceable provision 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 Mortgagor thereunder;
(dd) No Buydown Provisions; No Graduated Payments or Contingent Interests.
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 anyone on behalf of the Mortgagor,
or paid by any source other than the Mortgagor nor does it contain any other
similar provisions currently in effect which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;
(ee) Consolidation of Future Advances. Any future advances made prior to
the related 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. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title evidence
acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan;
(ff) Mortgaged Property Undamaged. There is no proceeding pending or, to
the best of the Company's knowledge, threatened for the total or partial
condemnation of the Mortgaged Property. 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;
and
(gg) 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 respects in compliance with
all applicable laws and regulations. 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. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay for
every item which remains unpaid and which has been assessed but is not yet due
and payable. No escrow deposits or Escrow Payments or other charges or payments
due the Company have been capitalized under the Mortgage or the Mortgage Note.
-24-
(hh) Appraisal. The Mortgage File contains an appraisal of the related
Mortgage Property signed prior to the approval of the Mortgage Loan application
by a Qualified Appraiser.
(ii) Soldiers' and Sailors' 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 Soldiers' and Sailors' Civil Relief Act of 1940;
(jj) Environmental Matters. To the best of the Company's knowledge, the
Mortgaged Property is free from any and all toxic or hazardous substances and
there exists no violation of any local, state or federal environmental law, rule
or regulation. To the best of the Company's knowledge, 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 consisting a prerequisite to use and enjoyment of said
property;
(kk) No Construction Loans. No Mortgage Loan was made in connection with
(i) the construction or rehabilitation of a Mortgaged Property or (ii)
facilitating the trade-in or exchange of a Mortgaged Property;
(ll) Insurance. The Company has caused or will cause to be performed any
and all acts required to preserve the rights and remedies of the Purchaser in
any insurance policies applicable to the Mortgage Loans including, without
limitation, any necessary notifications of insurers, assignments of policies or
interests therein, and establishments of coinsured, joint loss payee and
mortgagee rights in favor of the Purchaser; No action, inaction, or event has
occurred and no state of fact exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable pool insurance policy, special hazard insurance policy, PMI Policy or
bankruptcy bond, irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Company or any designee
of the Company or any corporation in which the Company or any officer, director,
or employee had a financial interest at the time of placement of such insurance;
(mm) Regarding the Mortgagor. The Mortgagor is one or more natural persons
and/or trustees for an Illinois land trust or a trustee under a "living trust"
and such "living trust" is in compliance with Xxxxxx Xxx guidelines for such
trusts.
(nn) Predatory Lending Regulations; High Cost Loans. None of the Mortgage
Loans are classified as (a) "high cost" loans under the Home Ownership and
Equity Protection Act of 1994 or (b) "high cost," "threshold," or "predatory"
loans under any other applicable state, federal or local law.
(oo) imple Interest Mortgage Loans. None of the Mortgage Loans are simple
interest Mortgage Loans.
(pp) Single Premium Credit Life Insurance. None of the proceeds of the
Mortgage Loan were used to finance single-premium credit life insurance
policies.
-25-
(qq) Tax Service Contract The Company has obtained a life of loan,
transferable real estate Tax Service Contract on each Mortgage Loan with an
Approved Tax Servicer Contract Provider and such contract is assignable without
penalty, premium or cost to the Purchaser;
(rr) Flood Certification Contract. The Company has obtained a life of loan,
transferable flood certification contract with an Approved Flood Policy Insurer
acceptable to Purchaser in its sole discretion for each Mortgage Loan and such
contract is assignable without penalty, premium or cost to the Purchaser;
(ss) FICO Scores. Each Mortgage Loan has a non-zero FICO score;
(tt) Prepayment Fee. With respect to each Mortgage Loan that has a
prepayment fee feature, each such prepayment fee is enforceable and will be
enforced by the Company, and each prepayment penalty in permitted pursuant to
federal, state and local law. No Mortgage Loan will impose a prepayment penalty
for a term in excess of five years from the date such Mortgage Loan was
originated. Except as otherwise set forth in the related Mortgage Loan Schedule,
with respect to each Mortgage Loan that contains a prepayment fee, such
prepayment fee is at least equal to the lesser of (A) the maximum amount
permitted under applicable law and (B) six months interest at the related
Mortgage Interest Rate on the amount prepaid in excess of 20% of the original
principal balance of such Mortgage Loan; and
(uu) Recordation. Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Company, or is in the process of being recorded.
(vv) Negative Amortization. No Mortgage Loan provides for negative
amortization.
(ww) Cash-out Refinance Mortgage Loans. No Mortgage Loan was a cash-out
refinance Mortgage Loan.
Section 3.03 Remedies for Breach of Representations and Warranties.
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 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 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.
-26-
With respect to those representations and warranties which are made to the
best of the Company's knowledge, if it is discovered by the Company or the
Purchaser that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of the related
Mortgage Loan or the interest of the Purchaser (or which materially and
adversely affects the value of a Mortgage Loan or the interests of the Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan), notwithstanding the Company's lack of
knowledge with respect to the substance of such representation and warranty,
such inaccuracy shall be deemed a breach of the applicable representation and
warranty.
Within 60 days of the earlier of either discovery by or notice to the
Company of any Breach of a representation or warranty, the Company shall use its
best efforts promptly to cure such Breach in all material respects 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 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;
provided, that if such Breach may be cured by the repurchase of one or more
individual Mortgage Loans, the Company may repurchase only those Mortgage Loans
necessary to cure the Breach. 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 120 days of the related Closing
Date, the Company shall, at the Purchaser's option and provided that the Company
has a Qualified Substitute Mortgage Loan, rather than repurchase the Mortgage
Loan 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 120 days
after the related Closing Date. If the Company has no Qualified Substitute
Mortgage Loan, it shall repurchase the deficient Mortgage Loan. 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 next scheduled
Remittance Date, 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. 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. For the month of substitution, 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.
-27-
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 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.
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.
Section 3.04 Early Payment Default.
With respect to any Mortgage Loan, if the related Mortgagor is 30 or more
days delinquent with respect to the Mortgage Loan's first or second Monthly
Payment due to the Purchaser after the related Closing Date, the Company shall,
upon receipt of notice from the Purchaser, promptly repurchase such Mortgage
Loan from the Purchaser in accordance with this Section 3.04; provided, that no
right to cure set forth therein shall apply.
Section 3.05 Review of Mortgage Loans.
From the related Closing Date until the date 30 days after the related
Closing Date, the Purchaser shall have the right to review the Mortgage Files
and obtain BPOs on the Mortgaged Properties relating to the Mortgage Loans
purchased on the related Closing Date, with the results of such BPO reviews to
be communicated to the Company for a period up to 30 days after the related
Closing Date. In addition, the Purchaser shall have the right to reject any
Mortgage Loan which in the Purchaser's sole determination (i) fails to conform
to Underwriting Guidelines, (ii) is underwritten without verification of the
Mortgagor's income and assets and there is no credit report or FICO Score, (iii)
the Purchaser deems the Mortgage Loan to not be an acceptable credit risk, or
(iv) the value of the Mortgaged Property pursuant to any BPO varies by more than
plus or minus 15% from the lesser of (A) the original appraised value of the
Mortgaged Property or (B) the purchase price of the Mortgaged Property as of the
date of origination. In the event that the Purchaser so rejects any Mortgage
Loan, the Company shall repurchase the rejected Mortgage Loan at the Repurchase
Price in the manner prescribed in Section 8(a) upon receipt of notice from the
Purchaser of the rejection of such Mortgage Loan. Any rejected Mortgage Loan
shall be removed from the terms of this Agreement. The Company shall make
available all files required by Purchaser in order to complete its review,
including all CRA/HMDA required data fields. To the extent that during the
course of the Purchaser's initial review, the Purchaser discovers that the
Mortgage Loans do not otherwise meet the Seller's Underwriting Guidelines or the
terms of the Purchase Transaction, the Purchaser shall have the right to carry
out additional due diligence reviews, which additional due diligence shall be at
the expense of the Company. Purchaser's decision to increase its due diligence
review or obtain additional BPO's or other property evaluations is at its sole
discretion. The additional review may be for any reason including but not
limited to credit quality, property valuations, and data integrity. Any review
performed by the Purchaser prior to the Closing Date does not limit the
Purchaser's rights or the Company's obligations under this section.
-28-
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, 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.
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
Purchasers, provided, however, that the Company shall not make any future
advances with respect to a Mortgage Loan and (unless the 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) the Company shall not permit any modification of any material term of
any Mortgage Loan including any modifications that would change the Mortgage
Interest Rate, defer or forgive the payment of principal or interest, reduce or
increase the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan. In the event
of any such modification which permits the deferral of interest or principal
payments on any Mortgage Loan, the 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 Purchasers, 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.
-29-
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.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan is not paid when
the same becomes due and payable, or in the event the Mortgagor fails to perform
any other covenant or obligation under the Mortgage Loan and such failure
continues beyond any applicable grace period, the Company shall take such action
as it shall deem to be in the best interest of the Purchaser, consistent with
any related PMI Policy or LPMI Policy. With respect to any defaulted Mortgage
Loan, the Company shall have the right to review the status of the related
forbearance plan and, subject to the second paragraph of Section 4.01, may
modify such forbearance plan; including extending the Mortgage Loan repayment
date for a period of one year. In connection with a foreclosure or other
conversion, the Company shall exercise such rights and powers vested in it
hereunder and use the same degree of care and skill in its exercise as prudent
mortgage servicers would exercise or use under the circumstances in the conduct
to their own affairs, including, without limitation, advancing funds for the
payment of taxes and insurance premiums. During this period and in the
administration of such defaulted Mortgage Loans, the Company shall be
responsible for making all customary Servicing Advances.
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 to be conducted by a qualified inspector. Upon completion of the
inspection, 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.
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Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof 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 "Commercial Federal
Mortgage Corporation in trust for the Purchaser of Conventional Residential
Conventional Residential Fixed Rate Mortgage Loans, Group No. 2001-1 and various
Mortgagors". The Custodial Account shall be established with a Qualified
Depository acceptable to the Purchaser. Any funds deposited in the Custodial
Account shall at all times be fully insured to the full extent permitted under
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 form of Exhibit D-1 hereto, in the
case of an account established with the Company, or by a letter agreement in the
form of Exhibit D-2 hereto, in the case of an account held by a depository other
than the Company. A copy of such certification or letter agreement shall be
furnished to the Purchaser and, upon request, to any subsequent Purchaser.
The Company shall deposit in the Custodial Account within 48 hours of
receipt, and retain therein, the following collections received by the Company
and payments made by the Company after the related Cut-off Date, (other than
payments of principal and interest due on or before the related Cut-off Date, or
received by the Company prior to the related 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;
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(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;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 4.01, 4.09, 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 or 3.06 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 in full or in part,
the Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from the Company's own funds,
without reimbursement therefor up to a maximum amount per month of the
Servicing Fee actually received for such month for the Mortgage Loans;
(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; and
(x) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to Section 4.16.
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 (a) Servicing Fees which are payable
solely from the interest portion of Monthly Payments, Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds, or (b) Ancillary Income, 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.
Additionally, any other benefit derived from the Custodial Account associated
with the receipt, disbursement and accumulation of principal, interest, taxes,
hazard insurance, mortgage blanket insurance, etc. shall accrue to the Company.
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;
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(ii) with respect to each LPMI Loan, in the amount of LPMI Fee, to
make payments with respect to premiums for LPMI Policies;
(iii) 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, 3.06 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;
(iv) 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 where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03, 3.06 or 6.02, in which
case the Company's right to such reimbursement shall be subsequent to the
payment to the Purchasers of the Repurchase Price pursuant to such sections
and all other amounts required to be paid to the Purchasers with respect to
such Mortgage Loan;
(v) to pay itself interest on funds deposited in the Custodial
Account;
(vi) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 9.01;
(vii) 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;
(viii) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(ix) to withdraw funds deposited in error.
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.
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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,
"Commercial Federal Mortgage Corporation, in trust for the Purchaser of
Conventional Residential Fixed Rate Mortgage Loans, Group No. 2001-1 and various
Mortgagors". The Escrow Accounts shall be established with a Qualified
Depository, 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 form of Exhibit E-1 hereto, in the case of
an account established with the Company, or by a letter agreement in the form of
Exhibit E-2 hereto, in the case of an account held by a depository other than
the Company. A copy of such certification shall be furnished to the Purchaser
and, upon request, to any subsequent Purchaser.
The Company shall deposit in the Escrow Account or Accounts within 48 hours
or 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; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The 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:
(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;
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(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 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 clear and terminate the Escrow Account on the termination of
this Agreement; and
(viii) to withdraw funds deposited in error.
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 and LPMI Policy premiums and fire and
hazard insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Company in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. To the extent that a
Mortgage does not provide for Escrow Payments, the Company shall determine that
any such payments are made by the Mortgagor at the time they first become due.
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.
Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time. Such transfer shall be made
only upon obtaining the consent of the Purchaser, which consent shall not be
withheld unreasonably; provided, however, if the Purchaser does not respond
within 30 days after receipt of request for consent, the Purchaser shall have
been deemed to consent to 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.
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Amounts on deposit in the Custodial Account and the Escrow Account may at
the option of the Company be invested in Eligible Investments; provided that in
the event that amounts on deposit in the Custodial Account or the Escrow Account
exceed the amount fully insured by the FDIC (the "Insured Amount") the Company
shall be obligated to invest the excess amount over the Insured Amount in
Eligible Investments on the same Business Day as such excess amount becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Determination Date next following the
date of such Eligible Investment, provided, however, that if such Eligible
Investment is an obligation of a Qualified Depository (other than the Company)
that maintains the Custodial Account or the Escrow Account, then such Eligible
Investment may mature on such Remittance Date. Any such Eligible Investment
shall be made in the name of the Company in trust for the benefit of the
Purchaser. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Company and may be withdrawn at any time by the
Company. Any losses incurred in respect of any such investment shall be
deposited in the Custodial Account or the Escrow Account, by the Company out of
its own funds immediately as realized.
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 a
generally acceptable insurer rated B:III or better in the current Best's Key
Rating Guide ("Best's") 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
maximum insurable value of the improvements securing such Mortgage Loan and (ii)
the greater of (a) the outstanding principal balance of the Mortgage Loan and
(b) an amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect with a
generally acceptable insurance carrier rated B:III or better in Best's 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 applicable law and
pursuant to the Xxxxxx Xxx Guides that a Mortgaged Property is located in a
special flood hazard area and is not covered by flood insurance or is covered in
an amount less than the amount required by the Flood Disaster Protection Act of
1973, as amended, the Company shall notify the related Mortgagor that the
Mortgagor must obtain such flood insurance coverage, and if said Mortgagor fails
to obtain the required flood insurance coverage within forty-five (45) days
after such notification, the Company shall immediately force place the required
flood insurance on the Mortgagor's behalf.
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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 Xxx 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.
The Company shall cause to be maintained on each Mortgaged Property any
additional insurance as may be required pursuant to applicable laws.
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, in accordance with Accepted
Servicing Practices, provide notice of such to the Mortgagor.
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 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 rated B:III or better in Best's 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. The Company shall furnish to the Mortgagor a formal notice
of expiration of any such insurance in sufficient time for the Mortgagor to
arrange for renewal coverage by the expiration date.
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 Force Placed Insurance.
Each Mortgage obligates the Mortgagor thereunder to maintain the required
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the Company to obtain and maintain such
insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. Upon any failure of the Mortgagor to maintain the
required hazard insurance, the Company shall obtain and maintain such force
placed hazard insurance at the Mortgagor's cost and expense.
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Section 4.12 Section 3.13 Force Placed Insurance.
Each Mortgage obligates the Mortgagor thereunder to maintain the required
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the Company to obtain and maintain such
insurance at such Mortgagor's cost and expense, and to seek reimbursement
therefor from the Mortgagor. Upon any failure of the Mortgagor to maintain the
required hazard insurance, the Company shall obtain and maintain such force
placed hazard insurance at the Mortgagor's cost and expense.
Section 4.13 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 3.14 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 bond and insurance policy shall be at least equal to the corresponding
amounts required by Xxxxxx Mae in the Xxxxxx Xxx Guides or by Xxxxxxx Mac in the
Xxxxxxx Xxx Xxxxxxx' & Companys' Guide. Upon the request of any Purchaser, the
Company shall cause to be delivered to such Purchaser a certified true copy of
such fidelity bond and insurance policy and a statement from the surety and the
insurer that such fidelity bond and insurance policy shall in no event be
terminated or materially modified without using commercially reasonable efforts
to provide 30 days' prior written notice to the Purchaser.
Section 4.14 Inspections.
The Company shall inspect the Mortgaged Property as often as deemed
necessary by the Company to assure itself that the value of the Mortgaged
Property is being preserved. In addition, if any Mortgage Loan is more than 90
days delinquent, the Company immediately shall inspect the Mortgaged Property
and shall conduct subsequent inspections in accordance with Accepted Servicing
Practices. The Company shall keep an electronic report of each such inspection.
Section 4.15 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. At a minimum, with respect
to claims greater than $10,000, the Company shall comply with the following
conditions in connection with any such release of Insurance Proceeds or
Condemnation Proceeds:
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(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 60 or
more days delinquent; and
(iv) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
With respect to claims of $10,000 or less, the Company shall comply with
the following conditions in connection with any such release of Insurance
Proceeds or Condemnation Proceeds:
(i) the related Mortgagor shall provide an affidavit verifying the
completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Company shall verify the total amount of the claim with the
applicable insurance company; and
(iii) 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 4.16 Maintenance of PMI Policy and/or LPMI Policy; Claims.
With respect to each Mortgage Loan with a LTV in excess of 80%, the Company
shall:
(i) with respect to Mortgage Loans which are not LPMI Loans, 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 in excess of 67% (or such other percentage as stated in the related
Acknowledgment Agreement) of value, and shall pay or shall cause the
Mortgagor to pay the premium thereon on a timely basis, until the LTV of
such Mortgage Loan is reduced to 80%. In the event that such PMI Policy
shall be terminated, 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, at substantially the same
fee level. 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 6.02, 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.
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(ii) with respect to LPMI Loans, maintain in full force and effect an
LPMI Policy insuring that portion of the Mortgage Loan in excess of 67% (or
such other percentage as stated in the related Acknowledgment Agreement) of
value, and from time to time, withdraw the LPMI Fee with respect to such
LPMI Loan from the Custodial Account in order to pay the premium thereon on
a timely basis, until the LTV of such Mortgage Loan is reduced to 80%. In
the event that the interest payments made with respect to any LPMI Loan are
less than the LPMI Fee, the Company shall advance from its own funds the
amount of any such shortfall in the LPMI Fee, in payment of the premium on
the related LPMI Policy. Any such advance shall be a Servicing Advance
subject to reimbursement pursuant to the provisions on Section 3.05. In the
event that such LPMI Policy shall be terminated, the Company shall obtain
from another Qualified Insurer a comparable replacement policy, with a
total coverage equal to the remaining coverage of such terminated LPMI
Policy, at substantially the same fee level. The Company shall not take any
action which would result in noncoverage under any applicable LPMI 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 6.02, the
Company shall promptly notify the insurer under the related LPMI Policy, if
any, of such assumption or substitution of liability in accordance with the
terms of such LPMI 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 LPMI Policy is terminated as a result of such
assumption or substitution of liability, the Company shall obtain a
replacement LPMI 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 or LPMI Policy in a timely fashion in accordance
with the terms of such PMI Policy or LPMI Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any PMI Policy or
LPMI Policy respecting a defaulted Mortgage Loan. Pursuant to Section 4.04, any
amounts collected by the Company under any PMI Policy or LPMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
Section 4.17 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 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.
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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 within three
years after 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,
and gives an appropriate notice to the Purchaser to such effect, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
period longer than one and a half 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, with the written consent of the Purchaser, 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 an amount which is at least equal to the
lesser of (a) 100% of the maximum insurable value of the improvements which are
a part of such property, or (b) unpaid principal balance of the related Mortgage
Loan at the time it becomes an REO 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.
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, and 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.
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The Company shall withdraw the Custodial Account funds necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 4.10 and the fees
of any managing agent of the Company, or the Company itself. The REO management
fee shall be an amount that is reasonable and customary in the area where the
Mortgaged Property is located. The Company shall make monthly distributions on
each Remittance Date to the Purchasers of the net cash flow from the REO
Property (which shall equal the revenues from such REO Property net of the
expenses described in the Section 4.16 and of any reserves reasonably required
from time to time to be maintained to satisfy anticipated liabilities for such
expenses).
Notwithstanding the foregoing, at any time and from time to time, the
Purchaser may at its election terminate this Agreement with respect to one or
more REO Properties as provided by Section 11.02.
Section 4.18 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the Company
shall furnish to the Purchaser upon request 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 4.19 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 4.20 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. Section 4.21 PMI and LPMI Obligations.
The Company shall comply with all provisions of applicable state and
federal law relating to the cancellation of, or collection of premiums with
respect to, PMI Policies and LPMI Policies, including, but not limited to, the
provisions of the Homeowners Protection Act of 1998, and all regulations
promulgated thereunder, as amended from time to time. The Company shall be
obligated to make premium payments with respect to (a) LPMI Policies, and (b) if
the Mortgagor fails to pay any PMI Policy premium, such PMI Policy.
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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(viii),
and 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, which amounts shall be remitted on the Remittance Date next succeeding the
Due Period for such amounts.
With respect to any remittance received by the Purchaser after the second
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 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.
(a) Not later than the tenth calendar day of each month, the Company shall
furnish to the Purchaser a monthly statement (a "Monthly Remittance Advice")
containing such information in the form required by the Purchaser, or its
designee, in hard copy or electronic medium mutually acceptable to the parties
as to the accompanying remittance and the period ending on the preceding
Determination Date.
(b) In addition, such Monthly Remittance Advice shall track, on a monthly
basis, the Mortgage Interest Rate and the delinquency status of the Mortgage
Loans. A cumulative delinquency report shall be provided to the Purchaser upon
the Purchaser's request.
(c) Not more than 60 days after the end of each calendar year, commencing
December 31, 2001, the Company shall furnish to each Person who was an Purchaser
of the Mortgage Loans at any time during such calendar year an annual statement
in accordance with the requirements of applicable federal income tax law as to
the aggregate of remittances for the applicable portion of such year. Such
obligation of the Company shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Company
pursuant to any requirements of the Internal Revenue Code as from time to time
are in force.
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Beginning with calendar year 2001, the Company shall prepare and file any
and all tax returns, information statements or other filings for the tax year
2001 and subsequent tax years required to be delivered to any governmental
taxing authority or to the Purchaser pursuant to any applicable law with respect
to the Mortgage Loans and the transactions contemplated hereby. In addition, the
Company shall provide the Purchaser with such information concerning the
Mortgage Loans as is necessary for the Purchaser to prepare its federal income
tax return as the Purchaser may reasonably request from time to time.
Section 5.03 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, the Company
shall deposit in the Custodial Account from its own funds 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. 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 Insurance Proceeds and Condemnation Proceeds) with respect
to the Mortgage Loan unless the Company deems such Monthly Advances to be
unrecoverable, as evidenced by an Officer's Certificate of the Company delivered
to the Purchaser.
Section 5.04 Due Dates Other Than the First of the Month.
Mortgage Loans having Due Dates other than the first day of a month,
including Mortgage Loans permitting semi-annual amortization of principal, shall
be accounted for as described in this Section 5.04. Any payment due on a day
other than the first day of each month shall be considered due on the first day
of the month in which that payment is due as if such payment were due on the
first day of said month. For example, a payment due on August 15 shall be
considered to be due on August 1 of said month. With respect to a Mortgage Note
permitting semi-annual amortization of principal, the Company shall be required
to remit monthly scheduled principal and interest based on a monthly
amortization schedule. Any payment collected on a Mortgage Loan after the
Cut-off Date shall be deposited in the Custodial Account. For Mortgage Loans
with Due Dates on the first day of a month, deposits to the Custodial Account
begin with the payment due on the first of the month following the Cut-off Date.
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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; provided that,
if in the Company's prudent business judgment, it determines that an assumption
of the Mortgage Loan is in the best interests of the Purchaser, it shall deliver
notice of such determination to the Purchaser and may permit such assumption if
approved by the Purchaser. When the Mortgaged Property has been conveyed by the
Mortgagor, the Company shall, to the extent it has knowledge of such conveyance
or the Purchaser's consent otherwise in accordance with the preceding sentence,
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 be required to take such action if the Company, in its prudent
business judgment, believes it is not in the best interests of the Purchaser and
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 or LPMI Policy, if any.
If the Company reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause or if the Purchaser approves such assumption
pursuant to the preceding paragraph, 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 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; provided
that no such substitutions should be permitted unless such person satisfies the
underwriting criteria of the Company and has a credit risk rating at least equal
to that of the original Mortgagor. The Mortgage Loan, as assumed, shall conform
in all respects to the requirements, representations and warranties of this
Agreement. The Company shall notify the Purchaser that any such assumption or
substitution agreement has been contemplated by forwarding to the Purchaser the
original copy of such assumption or substitution agreement (indicating the
Mortgage File to which it relates) which copy shall be added by the Purchaser to
the related Mortgage File and which shall, for all purposes, be considered part
of such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. The Company shall be responsible for recording any
such assumption or substitution agreements. In connection with any such
assumption or substitution agreement, the Monthly Payment on the related
Mortgage Loan shall not be changed but shall remain as in effect immediately
prior to the assumption or substitution, the Mortgage Interest Rate, the stated
maturity or the outstanding principal amount of such Mortgage Loan shall not be
changed nor shall any required monthly payments of principal or interest be
deferred or forgiven. Any assumption fee collected by the Company for entering
into an assumption agreement shall 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 nor the outstanding principal amount of the Mortgage Loan shall be
changed.
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Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan the Company shall notify the
Purchaser in the Monthly Remittance Advice as provided in Section 5.02, and may
request the release of any Mortgage Loan documents. Upon receipt of such
request, the Custodian shall, within five (5) Business Days, release the related
Mortgage File to the Company; provided, that the Company shall use its best
efforts to obtain the release of the related Mortgage File from the Custodian.
The Custodian shall indemnify the Company out of its own funds for any loss,
liability or expense incurred by the Company as a direct result of the failure
of the Custodian to release the related Mortgage File as provided in this
paragraph.
If the Company satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage 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 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 withdraw from the Custodial Account or to retain from interest payments on
the Mortgage Loans the amount of its Servicing Fee. The Servicing Fee shall be
payable monthly and shall be computed on the basis of the same unpaid principal
balance and for the period respecting which any related interest payment on a
Mortgage Loan is computed.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and Ancillary Income 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 Independent Public Accountants' Servicing Report.
On or before July 31st of each year beginning July 31, 2002, 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 and this
Agreement and that such firm is of the opinion that the provisions of Article II
and Article IV have been complied with, and that, on the basis of such
examination conducted substantially in compliance with the 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.
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Section 6.05 Right to Examine Company Records.
The Purchaser 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.
Section 6.06 Appointment and Designation of Master Servicer.
The Purchaser hereby appoints and designates Aurora Loan Services, Inc. as
its master servicer (the "Master Servicer") for the Mortgage Loans subject to
this Agreement. The Company is hereby authorized and instructed to take any and
all instructions with respect to servicing the Mortgage Loans hereunder as if
the Master Servicer were the Purchaser hereunder. The authorization and
instruction set forth herein shall remain in effect until such time as the
Company shall receive written instruction from the Purchaser that such
authorization and instruction is terminated.
Section 6.07 Servicing Tape.
Not later than the tenth calendar day of each month, the Company shall
deliver or cause to be delivered to the Purchaser and the Purchaser's designee,
a file in an electronic reporting format as shall be mutually agreed on by the
Purchaser and Company, containing servicing information, including without
limitation, those fields specified by the Purchaser from time to time and
reasonably available to the Company, on a loan-by-loan basis and in the
aggregate, with respect to the Mortgage Loans serviced hereunder.
ARTICLE VII
AGENCY TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon a Pass-Through Transfer or a Whole Loan
Transfer on One or More Reconstitution Dates.
(a) The Purchaser and the Company agree that with respect to some or all of
the Mortgage Loans, from time to time the Purchaser shall:
(1) Effect a Whole Loan Transfer, and/or
(2) Effect a Pass-Through Transfer,
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in each case retaining the Company as the servicer thereof, or as
applicable the "seller/servicer". On the related Reconstitution Date, the
Mortgage Loans transferred shall cease to be covered by this Agreement.
(b) With respect to each Whole Loan Transfer or Pass-Through Transfer, as
the case may be, entered into by the Purchaser, the Company agrees to cooperate
fully with the Purchaser, the Purchaser's designee, any prospective purchaser,
or any rating agency with respect to all reasonable requests and due diligence
procedures and to use its Best Efforts to facilitate such Whole Loan Transfer or
Pass-Through Transfer, as the case may be.
(c) The Company acknowledges that with respect to some or all of the
Mortgage Loans, the Purchaser intends to effect one or more Whole Loan Transfers
and/or one or more Pass-Through Transfers. With respect to each Whole Loan
Transfer or Pass-Through Transfer, as the case may be, entered into by the
Purchaser, the Company agrees:
(i) to negotiate and to execute all agreements executed in connection
with such Whole Loan Transfer or Pass-Through Transfer that govern the
servicing and administration of the Mortgage Loans (and any agreements and
other documents incidental thereto) as the Purchaser shall reasonably
request, provided that the servicing provisions contained therein shall be
substantially similar to those contained in this Agreement and shall not
contain any obligations materially more onerous than those contained herein
that increase the expenses or obligations of the Company, unless otherwise
mutually agreed by the parties (provided, that each of the Company and the
Purchaser is given an opportunity to review and reasonably negotiate in
good faith the content of such documents not specifically referenced or
provided herein), which governing documents, in the case of a Pass-Through
Transfer, shall contain provisions customarily included in publicly issued
or privately placed rated secondary mortgage market transactions;
(ii) to cooperate fully with the Purchaser and any prospective
purchaser, at the Purchaser's expense, with respect to all reasonable
requests and due diligence procedures including participating in meetings
with rating agencies, bond insurers and such other parties as the Purchaser
shall designate and participating in meetings with prospective purchasers
of the Mortgage Loans or interests therein and providing information
contained in the Mortgage Loan Schedule including any diskette or other
related data tapes provided as reasonably requested by such purchasers;
(iii) to negotiate and execute one or more master servicing agreements
between the Company and any third party servicer which is servicing loans
on behalf of the Purchaser providing for such third party servicer to
master service such Mortgage Loans on behalf of the Purchaser;
(iv) to negotiate and execute one or more subservicing agreements
between the Company and any master servicer which is generally considered
to be a prudent master servicer in the secondary mortgage market designated
by the Purchaser in its sole discretion after consultation with the Company
and/or one or more custodial and servicing agreements among the Purchaser
or an affiliate of the Purchaser, the Company and a third party
custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by the
Purchaser in its sole discretion after consultation with the Company, in
either case for the purpose of pooling the Mortgage Loans with other
mortgage loans for resale or securitization;
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(v) in connection with a Pass-Through Transfer, a Whole Loan Transfer,
or any securitization of any Mortgage Loans, to negotiate and execute a
pooling and servicing agreement, which pooling and servicing agreement may,
at the Purchaser's direction, contain contractual provisions including, but
not limited to, a 24-day certificate payment delay (54-day total payment
delay), servicer advances of delinquent scheduled payments of principal and
interest through liquidation (unless deemed non-recoverable) and payment of
compensating interest with respect to prepayment interest shortfalls (to
the extent of the monthly servicing fee payable thereto), servicing
representations and warranties which in form and substance conform to
secondary market standards for securities backed by mortgage loans similar
to the Mortgage Loans, and such provisions with regard to servicing
responsibilities, investor reporting, segregation and deposit of principal
and interest payments, custody of the Mortgage Loans, and other covenants
as are required by the Purchaser and one or more nationally recognized
rating agencies for "AAA" rated mortgage pass-through transactions which
are "mortgage related securities" for purposes of the Secondary Mortgage
Market Enhancement Act of 1984, unless otherwise mutually agreed;
(vi) to deliver to the Purchaser and to any Person designated by the
Purchaser (a) for inclusion in any prospectus or other offering material
such publicly available information regarding the Company, its financial
condition and its mortgage loan delinquency, foreclosure and loss
experience and any additional information requested by the Purchaser, (b)
any similar non-public, unaudited financial information (which the
Purchaser may, at its option and at its cost, have audited by certified
public accountants) and such other information as is reasonably requested
by the Purchaser and which the Company is capable of providing without
unreasonable effort or expense, and to indemnify the Purchaser and its
affiliates for material misstatements contained in such information, and
(c) such statements and audit letters of reputable, certified public
accountants pertaining to information provided by the Company pursuant to
clause (a) above as shall be reasonably requested by the Purchaser; and
(vii) to deliver to the Purchaser, and to any Person designated by the
Purchaser, such legal documents and opinions of counsel (which may be
in-house opinions of counsel) in a form reasonably acceptable to the
Purchaser as are customarily delivered and reasonably determined by the
Purchaser to be necessary in connection with Whole Loan Transfers or
Pass-Through Transfers, as the case may be, it being understood that the
cost of any opinions of outside special counsel that may be required for a
Whole Loan Transfer or Pass-Through Transfer, as the case may be, shall be
the responsibility of the Purchaser.
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(d) The Company shall provide to the Purchaser or issuer, as the case may
be, and any other participants in such Whole Loan Transfer or Pass-Through
Transfer, any and all information with respect to itself, its servicing
portfolio or the Mortgage Loans and appropriate verification of information
which may be reasonably available to the Company, whether through letters of its
auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request upon reasonable demand.
(e) In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to a Reconstitution Date the Purchaser or its
designee shall prepare an Assignment of Mortgage in blank from the Purchaser,
acceptable to the trustee or such third party, as the case may be, for each
Mortgage Loan that is part of a Whole Loan Transfer or Pass-Through Transfer and
shall pay all preparation and recording costs associated therewith. 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 or
such third party, as the case may be, upon the Company's receipt thereof.
Additionally, the Company shall prepare and execute, at the direction and
expense of the Purchaser, any note endorsements in connection with any and all
Reconstitution Agreements.
(f) All Mortgage Loans not sold or transferred pursuant to a Pass-Through
Transfer or Whole Loan Transfer and any and all Mortgage Loans repurchased by
the Purchaser pursuant to Section 7.02 below with respect to a Pass-Through
Transfer or Whole Loan Transfer shall be 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.
Section 7.02 Purchaser's Repurchase and Indemnification Obligations.
Upon receipt by the Company of notice from the trustee of a Breach of any
Purchaser representation or warranty contained in any Reconstitution Agreement
or a request by the trustee for the repurchase of any Mortgage Loan transferred
to a trustee pursuant to a Pass-Through Transfer or to a third party purchaser
pursuant to a Whole Loan Transfer, the Company shall promptly notify the
Purchaser of same and shall, at the direction of the Purchaser, use its Best
Efforts to cure and correct any such Breach and to satisfy the requests or
concerns of the trustee or the third party purchaser related to such
deficiencies of the related Mortgage Loans transferred to the trustee or other
such third party purchaser.
The Purchaser shall repurchase from the Company any Mortgage Loan
transferred to a trustee pursuant to a Pass-Through Transfer or to a third party
purchaser pursuant to a Whole Loan Transfer with respect to which the Company
has been required by the trustee or such third party purchaser to repurchase due
to a Breach of a representation or warranty made by the Purchaser with respect
to the Mortgage Loans, or the servicing thereof prior to the transfer date to
the trustee or any third party purchaser in any Reconstitution Agreement and not
due to a breach of the Company's obligations thereunder or pursuant to this
Agreement. The repurchase price to be paid by the Purchaser to the Company shall
equal that repurchase price paid by the Company to the third party purchaser
plus all reasonable costs and expenses borne by the Company in connection with
the cure of said Breach of a representation or warranty made by the Purchaser
and in connection with the repurchase of such Mortgage Loan from the trustee or
the third party purchaser, including, but not limited to, reasonable and
necessary attorneys' fees.
At the time of repurchase, the Custodian and the Company shall arrange for
the reassignment of the repurchased Mortgage Loan to the Purchaser according to
the Purchaser's instructions and the delivery to the Custodian of any documents
held by the trustee or other relevant third party purchaser with respect to the
repurchased Mortgage Loan pursuant to the related Reconstitution Agreement. In
the event of a repurchase, the Company shall, simultaneously with such
reassignment, give written notice to the Purchaser that such repurchase has
taken place, and amend the Mortgage Loan Schedule to reflect the addition of the
repurchased Mortgage Loan to this Agreement. In connection with any such
addition, the Company and the Purchaser shall be deemed to have made as to such
repurchased 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 repurchase.
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ARTICLE VIII
COMPANY TO COOPERATE
Section 8.01 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, whether or not provided for herein, as shall be necessary, reasonable, or
appropriate with respect to the Purchaser, any regulatory requirement pertaining
to the Purchaser or the purposes of this Agreement. All such reports, documents
or information shall be provided by and in accordance with all reasonable
instructions and directions which the Purchaser may give. Any special reports or
information delivered shall be at the Purchaser's expense.
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.
Section 8.02 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 five fiscal years for which such a
statement is available, as well as a Consolidated Statement of Condition at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. Purchaser shall not make such statement available to any prospective
Purchaser unless such prospective Purchaser has signed a confidentiality
agreement with respect to the information provided with respect to Company. The
Company 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). If it has not already done so, the Company shall furnish
promptly to the Purchaser copies of the statement specified above.
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.
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ARTICLE IX
THE COMPANY
Section 9.01 Indemnification; Third Party Claims.
(a) Breaches of Representations and Warranties. The Company agrees to
indemnify the Purchaser and hold it harmless from and against any and all
claims, losses, damages, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Purchaser may
sustain in any way related any assertion based on, grounded upon resulting from
a Breach of any of the Company's representations and warranties contained
herein. The Company shall immediately notify the Purchaser if a claim is made by
a third party with respect to this Agreement or the Mortgage Loans, assume (with
the consent of the Purchaser and with counsel reasonably satisfactory to 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 but failure to so notify the Purchaser shall not limit its
obligations hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the consent of the Purchaser unless such
settlement includes an unconditional release of the Purchaser from all liability
that is the subject matter of such claim. In addition to the obligations of the
Company set forth in this Section 9.01(a), the Purchaser may pursue any and all
remedies otherwise available at law or in equity, including, but not limited to,
the right to seek damages. The provisions of this Section 9.01(a) shall survive
termination of this Agreement.
It is understood and agreed that the obligations of the Company set forth
in Sections 3.03 and 9.01(a) to cure, substitute for or repurchase a defective
Mortgage Loan and to indemnify the Purchaser constitute the sole remedies of the
Purchaser respecting a Breach of the representations and warranties set forth in
Section 3.01 and 3.02.
(b) Servicing. The Company shall indemnify the Purchaser and hold it
harmless against any and all claims, losses, damages, penalties, fines, and
forfeitures, including, but not limited to 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 (a)
perform its duties and service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 7.01, and/or (b) comply with applicable law. The Company immediately
shall notify the Purchaser if a claim is made by a third party with respect to
this Agreement or any Reconstitution Agreement or the Mortgage Loans, shall
promptly notify Xxxxxx Xxx, Xxxxxxx Mac, or the trustee with respect to any
claim made by a third party with respect to any Reconstitution Agreement, 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 (a) service and administer the Mortgage Loans in
strict compliance with the terms of this Agreement or any Reconstitution
Agreement, and/or (b) comply with applicable law.
-52-
Section 9.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and franchises
as a corporation, and shall obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Company may be merged or consolidated, or any
Person 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 $25,000,000, and (ii) which is a Xxxxxx Mae- and Xxxxxxx
Mac-approved servicer in good standing.
Section 9.03 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 liability which would otherwise be imposed by reason of any breach of the
terms and conditions of 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.
-53-
Section 9.04 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, plant, 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
hereunder or delegate its rights or duties hereunder or any portion hereof (to
other than a third party in the case of outsourcing routine tasks such as taxes,
insurance and property inspection, in which case the Company shall be fully
liable for such tasks as if the Company performed them itself) or sell or
otherwise dispose of all or substantially all of its property or assets without
the prior written consent of the Purchaser, which consent shall be granted or
withheld in the reasonable discretion of the Purchaser, provided, however, that
the Company may assign its rights and obligations hereunder without prior
written consent of the Purchaser to any entity that is directly owned or
controlled by the Company, and the Company guarantees the performance of such
entity hereunder. In the event of such assignment by the Company, the Company
shall provide the Purchaser with a written statement guaranteeing the successor
entity's performance of the Company's obligations under the Agreement.
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 9.04, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its property
or assets, without the prior written consent of 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 Company or any third party.
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 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 which continues unremedied for a period of 30
days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Company by the Purchaser;
or
-54-
(iii) failure by the Company to maintain its license to do business in
any jurisdiction where the Mortgage Property is located; 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 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 Business
Days; or
(vii) the Company ceases to meet the qualifications of a Xxxxxx Xxx
lender; or
(viii) the Company fails to maintain a minimum net worth of
$25,000,000; or
(ix) the Company attempts to assign its right to servicing
compensation hereunder or the Company attempts, without the consent of the
Purchaser, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any
portion thereof (to other than a third party in the case of outsourcing
routine tasks such as taxes, insurance and property inspection, in which
case the Company shall be fully liable for such tasks as if the Company
performed them itself) in violation of Section 9.04.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatsoever 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.
-55-
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 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 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 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, upon thirty days notice or 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 Purchaser
and the Company shall comply with the termination procedures set forth in
Section 12.01 hereof.
In the event the Purchaser terminates the Company without cause with
respect to some or all of the Mortgage Loans, the Purchaser shall be required to
pay to the Company a Termination Fee in an amount equal to the product of (a)
2.00% and (b) the outstanding principal balance of each such Mortgage Loan.
In connection with any such termination referred under this Section 11.02,
the Purchaser will be responsible for reimbursing the Company for all
unreimbursed out-of-pocket Servicing Advances within 15 Business Days following
the date of termination and other reasonable and necessary out-of-pocket costs
associated with any transfer of servicing.
-56-
Notwithstanding and in addition to the foregoing, in the event that (i) a
Mortgage Loan becomes delinquent for a period of 90 days or more (a "Delinquent
Mortgage Loan") or (ii) a Mortgage Loan becomes an REO Property, the Purchaser
may at its election terminate this Agreement with respect to such Delinquent
Mortgage Loan or REO Property without payment of a termination fee therefor,
upon 15 days' written notice to the Company, provided, that upon termination of
the Agreement with respect to such Delinquent Mortgage Loan or REO Property, the
Purchaser shall reimburse the Company for all outstanding Servicing Advances or
Servicing Fees.
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 9.04, 10.01, 11.01 (ii) or pursuant to
Section 11.02 after the 90 day period has expired, 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 clauses (i) through (iii) of Section 9.02 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 Sections 3.03, and 3.06, it being understood and agreed that the
provisions of such Sections 3.01, 3.02, 3.03, and 3.06 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 subsections (f), (h), (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
9.04, 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.
-57-
The Company shall deliver promptly to the successor servicer the Funds in
the Custodial Account and Escrow Account and all 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.
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 the Company and the
Purchaser 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.
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:
Commercial Federal Mortgage Corporation
00000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxx Xxxx
or such other address as may hereafter be furnished to the Purchaser
in writing by the Company;
-58-
(ii) if to Purchaser:
Lehman Capital, A Division of Xxxxxx Brothers Holdings Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Contract Finance
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.
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.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company but
subject to the limit set forth in Section 2.02 hereof, 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 and Assumption Agreement substantially in
the form of Exhibit G hereto. Upon such assignment of rights and assumption of
obligations, the assignee or designee shall accede to the rights and obligations
hereunder of the Purchaser with respect to such Mortgage Loans and the Purchaser
as assignor shall be released from all obligations hereunder with respect to
such Mortgage Loans from and after the date of such assignment and assumption.
All references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee.
-59-
Section 12.11 No Personal Solicitation.
From and after the related Closing Date, the Company hereby agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Company's behalf,
to personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
It is understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors and the attendant rights, title and interest in
and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the related Closing Date and the Company shall take no action
to undermine these rights and benefits. Notwithstanding the foregoing, it is
understood and agreed that (a) engaging in general solicitations to its customer
base, including by mass mailing or as part of monthly or periodic statements
mailed to its borrowers or to holders of deposit or other accounts, (b)
promotions undertaken by the Company or any affiliate of the Company which are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists, and newspaper, radio,
television and other media advertisements or (c) refinancing the Mortgage Loan
of any Mortgagor who, without solicitation, contacts the Seller to request the
refinancing of the related Mortgage Loan, shall not constitute solicitation
under this Section 12.11.
-60-
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 CAPITAL, A DIVISION OF XXXXXX BROTHERS HOLDINGS INC.
By: _____________________________________________________
Name: ___________________________________________________
Title: __________________________________________________
COMMERCIAL FEDERAL MORTGAGE CORPORATION
By: _____________________________________________________
Name: ___________________________________________________
Title: __________________________________________________
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the __ day of ________, 200_ before me, a Notary Public in and for said
State, personally appeared ________, known to me to be Vice President of Xxxxxx
Capital, A Division of Xxxxxx Brothers Holdings, Inc., the federal savings
association 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 _______________________________
STATE OF )
) ss.:
COUNTY OF )
On the __ day of _______, 200_ before me, a Notary Public in and for said
State, personally appeared __________, known to me to be ______________ of
Commercial Federal Mortgage Corporation 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 _______________________________
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
A-1
EXHIBIT B
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File 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
Servicing File or delivered to the Custodian pursuant to Section 2.01 and 2.03
of the Seller's Warranties and Servicing Agreement to which this Exhibit is
attached (the "Agreement"):
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: "Commercial Federal Mortgage
Corporation, 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: "Commercial Federal Mortgage Corporation, formerly
known as [previous name]").
2. The original of any guarantee executed in connection with the Mortgage
Note (if any).
3. The original Mortgage, with evidence of recording thereon. 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 related 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.
4. The originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon.
5. The original Assignment of Mortgage for each Mortgage Loan, in form
and substance acceptable for recording, delivered in blank. If the
Mortgage Loan was acquired by the Company in a merger, the Assignment
of Mortgage must be made by "Commercial Federal Mortgage Corporation,
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 "Commercial
Federal Mortgage Corporation, formerly known as [previous name]."
6. Originals 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.
7. The original PMI Policy, LPMI Policy or certificate of insurance,
where required pursuant to the Agreement.
8. The original mortgagee policy of title insurance or attorney's opinion
of title and abstract of title.
9. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
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.
14. Verification of acceptable evidence of source and amount of
downpayment.
B-2
15. Credit report on the Mortgagor.
16. Residential appraisal report.
17. Photograph of the Mortgaged Property.
18. Survey of the Mortgaged Property.
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.
23. Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, 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.
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 60
days of the related 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.
B-3
EXHIBIT C-1
MORTGAGE LOAN DOCUMENTS
The Mortgage Loan Documents for each Mortgage Loan shall include each of
the following items, which shall be delivered to the Custodian pursuant to
Section 2.01 of the Seller's Warranties and Servicing Agreement to which this
Exhibit is annexed (the "Agreement"):
(a) 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. To the extent that there is no
room on the face of the Mortgage Note for endorsements, the endorsement may be
contained on an allonge, if state law so allows. If the Mortgage Loan was
acquired by the Company in a merger, the endorsement must be by "Commercial
Federal Mortgage Corporation, 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 endorsement must be by "Commercial Federal Mortgage
Corporation, formerly known as [previous name]";
(b) the original of any guarantee executed in connection with the Mortgage
Note;
(c) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon;
(d) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording, delivered in blank. If the Mortgage Loan was
acquired by the Company in a merger, the Assignment of Mortgage must be made by
"Commercial Federal Mortgage Corporation, 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
"Commercial Federal Mortgage Corporation, formerly known as [previous name];"
(f) the originals of all intervening assignments of mortgage with evidence
of recording thereon, including warehousing assignments, if any;
(g) the original PMI or LPMI Policy or certificate, if private mortgage
guaranty insurance is required pursuant to the Agreement;
(h) the original mortgagee title insurance policy;
C-4-1
(i) the original of any security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage; and
(j) such other documents as the Purchaser may require.
X-0-0
XXXXXXX X-0
CUSTODIAL ACCOUNT CERTIFICATION
_____________________, 200_
Commercial Federal Mortgage Corporation 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
September 1, 2001, Conventional Residential Fixed Rate Mortgage Loans, Group No.
2001-1.
Title of Account: Commercial Federal Mortgage Corporation in trust for the
Purchaser, Group No. 2001-1
Account Number: __________________
Address of office or branch
of the Company at
which Account is maintained: _________________________________________
_________________________________________
_________________________________________
_________________________________________
COMMERCIAL FEDERAL MORTGAGE CORPORATION
Company
By: _____________________________________
Name: ___________________________________
Title: __________________________________
X-0-0
XXXXXXX X-0
CUSTODIAL ACCOUNT LETTER AGREEMENT
_________________, 200_
To: ____________________________
____________________________
____________________________
(the "Depository")
As Company under the Seller's Warranties and Servicing Agreement, dated as
of September 1, 2001, Conventional Residential Fixed Rate Mortgage Loans, Group
No. 2001-1(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 "Commercial Federal Mortgage Corporation, in trust for the
Purchaser - Conventional Residential Fixed Rate Mortgage Loans - Group No.
2001-1." All deposits in the account shall be subject to withdrawal therefrom by
order signed by the Company. You may refuse any deposit which would result in
violation of the requirement that the account be fully insured as described
below. This letter is submitted to you in duplicate. Please execute and return
one original to us.
COMMERCIAL FEDERAL MORTGAGE CORPORATION
Company
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Date:____________________________________
D-2-1
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number __________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above. The full amount deposited at any time in the account will be
insured up to the applicable limits for such insurance as in effect from time to
time established by the Federal Deposit Insurance Corporation through the Bank
Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF") or
will be invested in Permitted Investments as defined in the Agreement which such
insurance is exceeded.
_________________________________________
Depository
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Date:____________________________________
D-2-2
EXHIBIT E-1
ESCROW ACCOUNT CERTIFICATION
__________________, 200_
Commercial Federal Mortgage Corporation 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 September
1, 2001, Conventional Residential Fixed Rate Mortgage Loans, Group No. 2001-1.
Title of Account: "Commercial Federal Mortgage Corporation in trust for the
Purchaser, Group No. 2001-1, and various Mortgagors."
Account Number: __________________
Address of office or branch
of the Company at
which Account is maintained: _________________________________________
_________________________________________
_________________________________________
_________________________________________
COMMERCIAL FEDERAL MORTGAGE CORPORATION
Company
By: _____________________________________
Name: ___________________________________
Title: __________________________________
X-0-0
X-0-0
XXXXXXX X-0
ESCROW ACCOUNT LETTER AGREEMENT
___________________, 200_
To: ____________________________
____________________________
____________________________
(the "Depository")
As Company under the Seller's Warranties and Servicing Agreement, dated as
of May 1, 2001, Conventional Residential Fixed Rate Mortgage Loans, Group No.
2001-1 (the "Agreement"), we hereby authorize and request you to establish an
account, as an Escrow Account pursuant to Section 4.07 of the Agreement, to be
designated as "Commercial Federal Mortgage Corporation, in trust for the
Purchaser - Conventional Residential Fixed Rate Mortgage Loans - Group No.
2001-1." All deposits in the account shall be subject to withdrawal therefrom by
order signed by the Company. You may refuse any deposit which would result in
violation of the requirement that the account be fully insured as described
below. This letter is submitted to you in duplicate. Please execute and return
one original to us.
COMMERCIAL FEDERAL MORTGAGE CORPORATION
Company
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Date:____________________________________
E-2-1
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number ______, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above. The full amount deposited at any time in the account will be
insured up to the applicable limits for such insurance as in effect from time to
time established by the Federal Deposit Insurance Corporation through the Bank
Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF") or
will be invested in Permitted Investments as defined in the Agreement which such
insurance is exceeded.
_________________________________________
Depository
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Date:____________________________________
E-2-2
EXHIBIT F
MONTHLY REMITTANCE ADVICE
[INTENTIONALLY OMITTED]
F-1
EXHIBIT G
ASSIGNMENT AND ASSUMPTION
_________________, 200_
ASSIGNMENT AND ASSUMPTION, dated __________, between _____________________,
a ___________________ corporation having an office at __________________________
("Assignor") and _________________________________, a __________________________
corporation having an office at __________________ ("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, 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, Conventional Residential
Fixed Rate Mortgage Loans, Group No. 2001-1 (the "Seller's Warranties and
Servicing Agreement"), dated as of September 1, 2001, by and between Xxxxxx
Capital, A Division of Xxxxxx Brothers Holdings, Inc. (the "Purchaser"), and
Commercial Federal Mortgage Corporation (the "Company"), and the Mortgage Loans
Group No. 2001-1 delivered thereunder by the Company to the Assignor.
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.
G-1
3. The Assignee warrants and represents to, and covenants with, the
Assignor and the Company 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 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 U.S. 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
Agreement 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 are:
_________________________
_________________________
_________________________
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
to be executed by their duly authorized officers as of the date first above
written.
____________________________ ____________________________
Assignor Assignee
By:_________________________ By: ________________________
Its:________________________ Its: _______________________
EXHIBIT H
UNDERWRITING GUIDELINES
[INTENTIONALLY OMITTED]
G-1
EXHIBIT I
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, 200_, Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings, Inc., (the "Purchaser") as the Purchaser under that
certain Seller's Warranties and Servicing Agreement dated as of September 1,
2001, (the "Agreement"), does hereby contract with Commercial Federal Mortgage
Corporation (the "Company") as Company under the Agreement, for the servicing
responsibilities related to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto. The Company hereby accepts the servicing
responsibilities transferred hereby and on the date hereof assumes all servicing
responsibilities related to the Mortgage Loans identified on the attached
Mortgage Loan Schedule all in accordance with the Agreement. The contents of
each Servicing File required to be delivered to service the Mortgage Loans
pursuant to the Agreement have been or shall be delivered to the Company by the
Purchaser in accordance with the terms of the Agreement.
With respect to the Mortgage Loans made subject to the Agreement hereby,
the related Closing Date shall be ____________________.
All other terms and conditions of this transaction shall be governed by the
Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
G-1
This Acknowledgment Agreement may be executed simultaneously in any number
of counterparts. Each counterpart shall be deemed to be an original, and all
such counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Purchaser and the Company have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
PURCHASER:
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
SELLER:
COMMERCIAL FEDERAL MORTGAGE CORPORATION
By:______________________________________
Name:____________________________________
Title:___________________________________
