CITIMORTGAGE,
INC.
Purchaser
ABN
AMRO
MORTGAGE GROUP, INC.
Seller
and Servicer
MORTGAGE
LOAN PURCHASE AND SERVICING AGREEMENT
This
is a
MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT (the "Agreement"), dated
as of
June 1, 2007, by and between CitiMortgage, Inc., having an office at 1000
Technology Drive, O’Fallon, MO 63368 (the "Purchaser") and ABN AMRO Mortgage
Group, Inc. having an office at 6300 Interfirst Drive, Ann Arbor, Michigan
48108
(the "Seller").
W
I T
N E S S E T H:
WHEREAS,
the Seller desires to sell, from time to time, to the Purchaser, and the
Purchaser desires to purchase, from time to time, from the Seller, certain
fixed
and adjustable rate Conventional, FHA Insured and VA Guaranteed mortgage
loans
(the "Mortgage Loans") as described herein on a servicing retained basis,
and
which shall be delivered in groups of whole loans on various dates as provided
herein (each a "Closing Date");
WHEREAS,
each Mortgage Loan 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 for the related Mortgage
Loan Package, which is to be annexed hereto on each Closing Date as Schedule
I;
WHEREAS,
following its purchase of the Mortgage Loans from Seller, Purchaser may
desire
to sell some or all of the Mortgage Loans in a whole loan transfer or to
securitize some or all of the Mortgage Loans through FNMA;
WHEREAS,
the Purchaser and the Seller wish to prescribe the manner of the conveyance,
servicing and control of the Mortgage Loans; and
NOW,
THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller
agree
as follows:
SECTION
1. Definitions.
For purposes of this Agreement the following capitalized terms shall have
the
respective meanings set forth below.
Adjustable
Rate Mortgage Loan: A Mortgage Loan which provides for the adjustment of the
Mortgage Interest Rate payable in respect thereto.
Adjustment
Date: With respect to each Adjustable Rate Mortgage Loan, the date set
forth
in the related Mortgage Note on which the Mortgage Interest Rate on the
Mortgage
Loan is adjusted in accordance with the terms of the Mortgage
Note.
Agreement: This
Mortgage Loan Purchase and Servicing Agreement including all exhibits,
schedules, amendments and supplements hereto.
Appraised
Value: With respect to any Mortgaged Property, the lesser of (i)
the value thereof as determined by an appraisal made for the originator
of the
Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser
who met the minimum requirements of FNMA and FHLMC, and (ii) the purchase
price
paid for the related Mortgaged Property by the Mortgagor with the proceeds
of
the Mortgage Loan; provided, however, in the case of a Refinanced Mortgage
Loan,
such value of the Mortgaged Property is based solely upon the value determined
by an appraisal made for the originator of such Refinanced Mortgage Loan
at the
time of origination of such Refinanced Mortgage Loan by an appraiser who
met the
minimum requirements of FNMA and FHLMC. Each appraisal was performed in
accordance with the requirements of the Financial Institutions Reform,
Recovery
and Enforcement Act of 1989.
Assignment
of Mortgage: An individual 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 give
record
notice of the sale of the Mortgage to the Purchaser.
BIF:
The Bank Insurance Fund, or any successor thereto.
Business
Day: Any day other than a Saturday or Sunday, or a day on which banking
and
savings and loan institutions in the State of Missouri, the State of Michigan
or
the State of New York are authorized or obligated by law or executive order
to
be closed.
Cash-Out
Refinancing: A Refinanced Mortgage Loan the proceeds of which
were in excess of the principal balance of any existing first mortgage
on the
related Mortgaged Property and related closing costs, and were used to
pay any
such existing first mortgage, related closing costs and subordinate mortgages
on
the related Mortgaged Property.
Closing
Date: The date or dates on which the Purchaser from time to time shall
purchase and the Seller from time to time shall sell to the Purchaser,
the
Mortgage Loans listed on the related Mortgage Loan Schedule with respect
to the
related Mortgage Loan Package.
Closing
Documents: With respect to any Closing Date, the documents
required pursuant to Section 9.
Code: The
Internal Revenue Code of 1986, or any successor statute thereto.
Condemnation
Proceeds: All awards, compensation and settlements in respect of
a taking of all or part of a Mortgaged Property by exercise of the power
of
condemnation or the right of eminent domain.
Commitment
Letter: With respect to the Mortgage Loan Package purchased and
sold on any Closing Date, the letter agreement between the Purchaser and
the
Seller, in the form annexed hereto as Exhibit 9 (including any exhibits,
schedules and attachments thereto), setting forth the terms and conditions
of
such transaction and describing the Mortgage Loans to be purchased by the
Purchaser on such Closing Date.
Conventional
Mortgage Loan: Any Mortgage Loan that is neither an FHA Loan nor a VA
Loan.
Convertible
Mortgage Loan: A Mortgage Loan that by its terms and subject to certain
conditions contained in the related Mortgage or Mortgage Note allows the
Mortgagor to convert the adjustable Mortgage Interest Rate on such Mortgage
Loan
to a fixed Mortgage Interest Rate.
Custodial
Account: The separate account or accounts, each of which shall be an
Eligible Account, created and maintained pursuant to this Agreement which
shall
be entitled "______., as servicer, in trust for the Purchaser and various
Mortgagors, Fixed and Adjustable Rate Conventional, FHA or VA Mortgage
Loans".
Custodial
Agreement: The custodian agreement attached hereto as Exhibit 5, if
applicable.
Custodian: The
custodian, which may be Seller or any affiliate of Seller, or its successor
in
interest or any successor to the Custodian under the Custodial Agreement
as
therein provided.
Cut-Off
Date: The day of the month referenced in the applicable Commitment
Letter.
Determination
Date: With respect to each Distribution Date, the fifteenth
(15th) day
of
the calendar month in which such Distribution Date occurs or, if such fifteenth
(15th) day
is
not a Business Day, the Business Day preceding such fifteenth (15th) day.
Distribution
Date: The eighteenth (18th)
day of each
month, commencing on the eighteenth (18th) day
of the month
next following the month in which the related Cut-off Date occurs, or if
such
eighteenth (18th) day
is not a
Business Day, the Business Day following such eighteenth (18th)
day..
Due
Date: With respect to each Distribution Date, the first day of the calendar
month in which such Distribution Date occurs, which is the day on which
the
Monthly Payment is due on a Mortgage Loan, exclusive of any days of
grace.
Due
Period: The period beginning on the second day of any month and ending on
the first day of next month.
Eligible
Account: Either (i) an account or accounts maintained with a federal or
state chartered depository institution or trust company the short-term
unsecured debt obligations of which (or, in the case of a depository institution
or trust company that is the principal subsidiary of a holding company,
the
short-term unsecured debt obligations of such holding company) are rated
A-1 by
Standard & Poor's Ratings Services or Prime-1 by Moody's Investors Service
(or a comparable rating if another rating agency is specified by the Purchaser
by written notice to the Seller) at the time any amounts are held on deposit
therein, (ii) an account or accounts the deposits in which are fully insured
by
the FDIC or (iii) a trust account or accounts maintained with a federal
or state
chartered depository institution or trust company acting in its fiduciary
capacity. Eligible Accounts may bear interest.
Escrow
Account: The separate trust account or accounts created and maintained
pursuant to this Agreement which shall be entitled "______., as servicer,
in
trust for the Purchaser and various Mortgagors, Fixed and Adjustable Rate
Conventional, FHA or VA Mortgage Loans."
Escrow
Payments: The amounts constituting ground rents, taxes, assessments, water
charges, sewer rents, Primary Insurance Policy premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the Mortgagee pursuant to the terms of any Mortgage Note or
Mortgage.
Event
of Default: Any one of the events enumerated in Section
13.01.
FDIC:
The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The
Federal Housing Administration, an agency within the United States Department
of
Housing and Urban Development, or any successor thereto and including the
Federal Housing Commissioner and the Secretary of Housing and Urban Development
where appropriate under the FHA Regulations.
FHA
Approved Mortgagee: Those institutions which are approved by FHA to act as
servicer and mortgagee of record pursuant to FHA Regulations.
FHA
Insurance Contract or FHA Insurance: The contractual
obligation of FHA respecting the insurance of an FHA Loan pursuant to the
National Housing Act, as amended.
FHA
Loan: A Mortgage Loan which is the subject of an FHA Insurance
Contract as evidenced by a Mortgage Insurance Certificate.
FHA
Regulations: Regulations promulgated by HUD under the National
Housing Act, codified in 24 Code of Federal Regulations, and other HUD
issuances relating to FHA Loans, including the related Handbooks, Circulars,
Notices and Mortgagee Letters.
FHLMC:
Federal Home Loan Mortgage Corporation or any successor
thereto.
Final
Closing Date: The Closing Date with respect to the purchase and
sale of the final Mortgage Loan Package purchased hereunder.
Fixed
Rate Mortgage Loan: A Mortgage Loan wherein the Mortgage Interest Rate set
forth in the Mortgage Note is fixed for the term of such Mortgage
Loan.
FNMA:
Federal National Mortgage Association or any successor thereto.
GNMA:
Government National Mortgage Association or any successor thereto.
Gross
Margin: With respect to any Adjustable Rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date
in
accordance with the terms of the related Mortgage Note to determine the
new
Mortgage Interest Rate for such Mortgage Loan, as provided in the related
Commitment Letter.
HUD:
The United States Department of Housing and Urban Development, or any successor
thereto.
Index:
With respect to any Adjustable Rate Mortgage Loan, a rate per annum, calculated
as specified in Exhibit A to the related Commitment Letter, to which the
Gross
Margin is added on each Adjustment Date to determine the new Mortgage Interest
Rate for such Mortgage Loan.
Insurance
Agreements: Collectively, the FHA Insurance Contracts and VA Guaranty
Agreements.
Insurance
Proceeds: With respect to each Mortgage Loan, proceeds of insurance policies
insuring the Mortgage Loan or the related Mortgaged Property.
Liquidation
Proceeds: Amounts, other than Insurance Proceeds and Condemnation Proceeds,
received in connection with the liquidation of a defaulted Mortgage Loan
through
trustee's sale, foreclosure sale or received pursuant to an FHA Insurance
Contract or a VA Guaranty Agreement or otherwise, other than amounts received
following the acquisition of REO Property.
Loan
Guaranty Certificate: The Certificate evidencing a VA Guaranty
Agreement.
Loan-to-Value
Ratio or LTV: With respect to any Mortgage Loan as of any date of
determination, the ratio on such date of the outstanding principal amount
of the
Mortgage Loan, to the Appraised Value of the Mortgaged
Property.
Maximum
Mortgage Interest Rate: With respect to each Adjustable Rate Mortgage Loan,
a rate that is set forth on the related Mortgage Loan Schedule and in the
related Mortgage Note and is the maximum interest rate to which the Mortgage
Interest Rate on such Adjustable Rate Mortgage Loan may be increased on
any
Adjustment Date, as provided in the related Commitment Letter.
Minimum
Mortgage Interest Rate: With respect to each Adjustable Rate Mortgage Loan,
a rate that is set forth on the related Mortgage Loan Schedule and in the
related Mortgage Note and is the minimum interest rate to which the Mortgage
Interest Rate on such Adjustable Rate Mortgage Loan may be decreased on
any
Adjustment Date, as provided in the related Commitment Letter.
Monthly
Payment: With respect to any Mortgage Loan, the scheduled combined payment
of principal and interest payable by a Mortgagor under the related Mortgage
Note
on each Due Date, which may be changed on any Adjustment Date as provided
in the
related Mortgage Note.
Mortgage:
The mortgage, deed of trust or other instrument creating a first lien on
Mortgaged Property securing the Mortgage Note.
Mortgagee: The
mortgagee or beneficiary named in the Mortgage and the successors and assigns
of
such mortgagee or beneficiary.
Mortgage
File: The items pertaining to a particular Mortgage Loan referred to in
Exhibit 4 annexed hereto, and any additional documents required to be
added to the Mortgage File pursuant to this Agreement or the related Commitment
Letter.
Mortgage
Insurance Certificate: The Certificate evidencing an FHA Insurance
Contract.
Mortgage
Interest Rate: With respect to each Fixed Rate Mortgage Loan, the fixed
annual rate of interest borne by the related Mortgage Note and set forth
in the
Mortgage Loan Schedule. With respect to each Adjustable Rate Mortgage Loan,
the
annual rate at which interest accrues on such Adjustable Rate Mortgage
Loan from
time to time in accordance with the provisions of the related Mortgage
Note,
which rate, (i) as of any date of determination until the first Adjustment
Date
following the related Cut-off Date shall be the rate set forth in the related
Mortgage Loan Schedule as the Mortgage Interest Rate in effect immediately
following the related Cut-off Date and (ii) as of any date of determination
thereafter shall be the rate as adjusted on the most recent Adjustment
Date, to
equal the sum of the applicable Index plus the related Gross Margin; provided
that the Mortgage Interest Rate on such Adjustable Rate Mortgage Loan on
any
Adjustment Date shall never be (a) more than the lesser of (1) the sum
of the
Mortgage Interest Rate in effect immediately prior to the Adjustment Date
plus
the related Periodic Rate Cap, if any, and (2) the related Maximum Mortgage
Interest Rate or, (b) less than the greater of (1) the remainder of the
Mortgage
Interest Rate in effect immediately prior to the
Adjustment
Date minus the related Periodic Rate Cap, if any, and (2) the related Minimum
Mortgage Interest Rate.
Mortgage
Loan: Each mortgage loan sold, assigned and transferred to the Purchaser
pursuant to this Agreement and the related Commitment Letter and identified
on
the Mortgage Loan Schedule annexed to this Agreement on such Closing Date,
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 4.
Mortgage
Loan Package: The Mortgage Loans listed on a Mortgage Loan
Schedule, delivered to the Purchaser or its Custodian at least five (5)
Business
Days prior to the related Closing Date and attached to this Agreement as
Schedule I on the related Closing Date.
Mortgage
Loan Schedule: With respect to each Mortgage Loan Package, the schedule of
Mortgage Loans to be annexed hereto as Schedule I (or a supplement
thereto) on each Closing Date for the Mortgage Loan Package delivered on
such
Closing Date in both hard copy and electronic format, such schedule setting
forth the following information with respect to each Mortgage Loan in the
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number;
(2)
the Mortgagor's first and last name; (3) the street address of the Mortgaged
Property including the state and zip code; (4) a code indicating whether
the
Mortgaged Property is owner-occupied; (5) the type of Residential Dwelling
constituting the Mortgaged Property; (6) the original months to maturity;
(7)
the original date of the Mortgage; (8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Interest Rate in effect immediately following the
Cut-off Date; (10) the date on which the first Monthly Payment was
due on the Mortgage Loan; (11) the stated maturity date; (12) the amount
of the
Monthly Payment at origination; (13) the amount of the Monthly Payment
as of the
Cut-off Date; (14) the last Due Date on which a Monthly Payment was actually
applied to the unpaid principal balance; (15) the original principal amount
of
the Mortgage Loan; (16) the unpaid principal balance of the Mortgage Loan
as of
the close of business on the Cut-off Date; (17) the Stated Principal Balance
as
of the Closing Date; (18) a code indicating the purpose of the loan (i.e.,
purchase financing, Rate/Term Refinancing, Cash-Out Refinancing); (19)
the
Mortgage Interest Rate at origination; (20) a code indicating the documentation
style (i.e., full, alternative or reduced); (21) a code indicating if the
Mortgage Loan is subject to a Primary Insurance Policy; (22) the Appraised
Value
of the Mortgaged Property; (23) the sale price of the Mortgaged Property,
if
applicable; (24) the Servicing Fee; (25) a code indicating the Metropolitan
Statistical Area in which the Mortgaged Property is located; (26) race
and
gender information (if available) for all Mortgagors; (27) a codeindicating
the
county in which the Mortgaged Property in located; (28) census tract in
which
the Mortgaged Property is located; (29) the combined annual income of the
Mortgagor’s household; and (30) with respect to each Adjustable Rate Mortgage
Loan: (i) the first Adjustment Date; (ii) the Gross Margin; (iii) the Maximum
Mortgage Interest Rate under the terms of the Mortgage Note; (iv) the Minimum
Mortgage Interest Rate under the terms of the Mortgage Note; (v) the Periodic
Rate Cap; (vi) the first Adjustment Date immediately following the Cut-off
Date;
(vii) the Index;
and
(viii) a code indicating whether the Mortgage Loan is a Convertible Mortgage
Loan. With respect to the Mortgage Loan Package in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of
the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
principal balance of the Mortgage Loans; (3) the aggregate Stated Principal
Balance of the Mortgage Loans; (4) the weighted average Mortgage Interest
Rate
of the Mortgage Loans; and (5) the weighted average maturity of the Mortgage
Loans. Schedule I hereto shall be supplemented as of each
Closing Date to reflect the addition of the Mortgage Loan Schedule with
respect
to the related Mortgage Loan Package.
Mortgage
Note: The original executed note or other evidence of the Mortgage Loan
indebtedness of a Mortgagor.
Mortgaged
Property: The Mortgagor's real property securing repayment of a related
Mortgage Note, consisting of a fee simple interest in a single parcel of
real
property improved by a Residential Dwelling.
Mortgagor:
The obligor on a Mortgage Note, the owner of the Mortgaged Property and
the
grantor or mortgagor named in the related Mortgage and such grantor's or
mortgagor's successor's in title to the Mortgaged Property.
Officer's
Certificate: A certificate signed by the Chairman of the Board or the Vice
Chairman of the Board or a President or a Vice President and by the Treasurer
or
the Secretary or one of the Assistant Treasurers or Assistant Secretaries
of the
Person on behalf of whom such certificate is being delivered.
Periodic
Rate Cap: With respect to each Adjustable Rate Mortgage Loan and any
Adjustment Date therefor, a number of percentage points per annum that
is set
forth in the related Mortgage Loan Schedule and in the related Mortgage
Note,
which is the maximum amount by which the Mortgage Interest Rate for such
Mortgage Loan may increase (without regard to the Maximum Mortgage Interest
Rate) or decrease (without regard to the Minimum Mortgage Interest Rate)
on such
Adjustment Date from the Mortgage Interest Rate in effect immediately prior
to
such Adjustment Date, as provided in the related Commitment Letter.
Person: An
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency
or
political subdivision thereof.
P&I
Advances: all payments not previously advanced by the Seller of principal
(due after the related Cut-off Date) and interest not allocable to the
period
prior to the related Cut-off Date, which were due on a Mortgage Loan during
the
related Due Period and which were delinquent at the close of business on
the
related Determination Date whether or not deferred.
Primary
Insurance Policy: A policy of primary mortgage guaranty insurance issued by
an insurer acceptable to FNMA and FHLMC.
Purchase
Price: The price paid on the related Closing Date by the Purchaser to the
Seller pursuant to the related Commitment Letter in exchange for the Mortgage
Loans purchased on such Closing Date calculated as provided in Section
4.
Purchaser:
CitiMortgage, Inc., or any successor thereto.
Rate/Term
Refinancing: A Refinanced Mortgage Loan, the proceeds of which
are not in excess of the existing first mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively to satisfy
the
then existing first mortgage loan of the Mortgagor on the related Mortgaged
Property and to pay related closing costs.
Record
Date: With respect to each Distribution Date, the last Business
Day of the month immediately preceding the month in which such Distribution
Date
occurs.
Refinanced
Mortgage Loan: A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
REMIC: A
"real estate mortgage investment conduit" within the meaning of Section
860D of
the Code.
REO
Account: The separate trust account or accounts created and maintained
pursuant to this Agreement which shall be entitled "[] in trust for the
Purchaser, as of [date of acquisition of title], Fixed and Adjustable Rate
Conventional, FHA Insured or VA Guaranteed Mortgage Loans".
REO
Disposition: The final sale by the Seller of any REO
Property.
REO
Property: A Mortgaged Property acquired as a result of the
liquidation of a Mortgage Loan.
Repurchase
Price: With respect to any Mortgage Loan, a price equal to (i) (the product
of the Stated Principal Balance of such Mortgage Loan and the greater of
(x) the
Purchase Price percentage as stated in the related Commitment Letter and
(y)
100%, and plus (ii) interest on such Stated Principal Balance at the Mortgage
Interest Rate from and including the last Due Date through which interest
has
been paid by or on behalf of the Mortgagor to the first of day of the month
following the date of repurchase, less amounts received in respect of such
repurchased Mortgage Loan which are being held in the Custodial Account
for
distribution in connection with such Mortgage Loan.
Residential
Dwelling: Any one of the following: (i) a detached one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family
dwelling unit in a FNMA eligible condominium project, or (iv) a detached
one-family dwelling in a planned unit development, none of which is a
co-operative located outside of New York state, mobile or manufactured
home.
Seller:
ABN AMRO Mortgage Group, Inc.
Servicing
Addendum: The terms and conditions attached hereto as Exhibit 8
which will govern the servicing of the Mortgage Loans.
Servicing
Advances: All customary, reasonable and necessary "out-of-pocket"
costs and expenses incurred by the Seller in the performance of its servicing
obligations, including, but not limited to, the cost of (i) preservation,
restoration and repair of a Mortgaged Property, (ii) any enforcement or
judicial
proceedings with respect to a Mortgage Loan, including foreclosure actions
and
(iii) the management and liquidation of REO Property.
Servicing
Fee: With respect to any Mortgage Loan, the fee per calendar month as
provided in the related Commitment Letter (stated as a specified number
of
dollars or a percentage rate), payable monthly, in arrears.
Servicing
File: With respect to each Mortgage Loan, the file retained by the Seller,
consisting of documents set forth in Exhibit 4.
Stated
Principal Balance: As to each Mortgage Loan as of any date of determination,
the principal balance of the Mortgage Loan as of the Cut-Off Date after
giving
effect to payments of principal due on or before such date, whether or
not
collected from the Mortgagor on or before such date.
Term
Sheet: An assignment and conveyance of the Mortgage Loans
purchased on a Closing Date in the form annexed hereto as Exhibit
3.
VA: The
Veterans Administration, an agency of the United States of America, or
any
successor thereto including the Administrator of Veterans Affairs.
VA
Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA Loans.
VA
Guaranty Agreement: The obligation of the United States to pay a
specific percentage of a Mortgage Loan (subject to a maximum amount) upon
default of the Mortgagor pursuant to the Serviceman's Readjustment Act,
as
amended.
VA
Loan: A Mortgage Loan which is the subject of a VA Guaranty
Agreement as evidenced by a Loan Guaranty Certificate.
VA
Regulations: Regulations promulgated by the Veterans
Administration pursuant to the Serviceman's Readjustment Act, as amended,
codified in 36 Code of Federal Regulations, and other VA issuances relating
to
VA Loans, including related Handbooks, Circulars and Notices.
SECTION
2. Agreement
to Purchase. The Seller agrees to sell, and the Purchaser agrees to
purchase, from time-to-time on or before the Final Closing Date, Mortgage
Loans
having an aggregate principal balance on the related Cut-off Date in an
amount
as set forth in the related Commitment Letter, or in such other amount
as agreed
by the Purchaser and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on the related
Closing
Date.
SECTION
3. Mortgage
Loan Schedules. The Seller shall deliver the Mortgage Loan Schedule for a
Mortgage Loan Package to be purchased on a particular Closing Date to the
Purchaser at least five (5) Business Days prior to such Closing
Date.
SECTION
4. Purchase
Price. The
Purchase Price for each Mortgage Loan listed on the related Mortgage Loan
Schedule shall be the percentage of par as stated in the related Commitment
Letter (subject to adjustment as provided therein), multiplied by its Stated
Principal Balance as of the related Cut-off Date. If so provided in the
related
Commitment Letter, portions of the Mortgage Loans shall be priced
separately.
In
addition to the Purchase Price as described above, the Purchaser shall
pay to
the Seller, at closing, accrued interest on the Stated Principal Balance
of each
Mortgage Loan as of the related Cut-off Date at its Mortgage Interest Rate
from
the related Cut-off Date through the day prior to the related Closing Date,
both
inclusive, less the Servicing Fee, pro rated on the basis of a 30-day
month.
The
Purchaser shall own and be entitled to receive with respect to each Mortgage
Loan purchased, (1) all scheduled principal due after the related Cut-off
Date,
(2) all other recoveries of principal collected after the related Cut-off
Date
(provided, however, that all scheduled payments of principal due on or
before
the related Cut-off Date and collected by the Seller after the related
Cut-off
Date shall belong to the Seller), and (3) all payments of interest on the
Mortgage Loans net of the Servicing Fee (minus that portion of any such
interest
payment that is allocable to the period prior to the related Cut-off Date).
The
Stated Principal Balance of each Mortgage Loan as of the related Cut-off
Date is
determined after application to the reduction of principal of payments
of
principal due on or before the related Cut-off Date whether or not collected.
Therefore, for the purposes of this Agreement, payments of scheduled principal
and interest prepaid for a Due Date beyond the related Cut-off Date shall
not be
applied to the principal balance as of the related Cut-off Date. Such prepaid
amounts (minus the applicable Servicing Fee) shall be the property of the
Purchaser. The Seller shall deposit any such prepaid amounts into the Custodial
Account, which account is established for the benefit of the Purchaser,
for
remittance by the Seller to the Purchaser on the first related Distribution
Date. All payments of principal and interest, less the applicable
Servicing Fee, due on a Due Date following the related Cut-off Date shall
belong
to the Purchaser
SECTION
5. Examination
of Mortgage Files. In addition to the rights granted to the Purchaser under
the related Commitment Letter to underwrite the Mortgage Loans and review
the
Mortgage Files prior to the Closing Date, prior to the related Closing
Date, the
Seller shall (a) deliver to the Purchaser in escrow, for examination with
respect to each Mortgage Loan to be purchased on such Closing Date, the
related
Mortgage File, including the Assignment of Mortgage, pertaining to each
Mortgage
Loan, or (b) make the related Mortgage File available to the Purchaser
for
examination at the Seller's offices or such other location as shall otherwise
be
agreed upon by the Purchaser and the Seller. Such examination may be made
by the
Purchaser or its designee at any reasonable time before or after the related
Closing Date. If the Purchaser makes such examination prior to the
related Closing Date and identifies any Mortgage Loans which do not conform
to
the terms of the related Commitment Letter, such Mortgage Loans may, at
the
Purchaser's option, be rejected for purchase by the Purchaser. If not
purchased by the Purchaser, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule. The Purchaser may, at its option and
without notice to the Seller, purchase all or part of any Mortgage Loan
Package
without conducting any partial or complete examination. The fact that
the Purchaser has conducted or has determined not to conduct any partial
or
complete examination of the Mortgage Files shall not affect the Purchaser's
(or
any of its successors') rights to demand repurchase or other relief or
remedy
provided for in this Agreement.
SECTION
6. Conveyance from
Seller to
Purchaser
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Subsection
6.01.
Conveyance of Mortgage Loans; Possession of
ServicingFiles
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The
Seller, simultaneously with the payment of the Purchase Price, shall execute
and
deliver to the Purchaser a Term Sheet with respect to the related Mortgage
Loan
Package in the form attached hereto as Exhibit 3 The Servicing File
retained by the Seller with respect to each Mortgage Loan pursuant to this
Agreement shall be appropriately identified in the Seller's computer system
to
reflect clearly the sale of such related Mortgage Loan to the Purchaser.
The
Seller shall release from its custody the contents of any Servicing File
retained by it only in accordance with this Agreement, except when such
release
is required in connection with a repurchase of any such Mortgage Loan pursuant
to Subsection 7.03 or 7.04.
Subsection
6.02. Books
and Records.
Record
title to each Mortgage and the related Mortgage Note as of the related
Closing
Date shall be in the name of the Seller, the Purchaser, or one or more
designees
of the Purchaser, as the Purchaser shall designate. Notwithstanding the
foregoing, beneficial ownership of each Mortgage and the related Mortgage
Note
shall be vested solely in the Purchaser or the appropriate designee of
the
Purchaser, as the case may be. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received by the Seller after the
related Cut-off Date on or in connection with a Mortgage Loan as provided
in
Section 4 shall be vested in the Purchaser or one or more designees of
the
Purchaser; provided, however, that all such funds
received
on or in connection with a Mortgage Loan as provided in Section 4 shall
be
received and held by the Seller in trust for the benefit of the Purchaser
or the
assignee of the Purchaser, as the case may be, as the owner of the Mortgage
Loans pursuant to the terms of this Agreement.
It
is the
express intention of the parties that the transactions contemplated by
this
Agreement be, and be construed as, a sale of the Mortgage Loans by the
Seller
and not a pledge of the Mortgage Loans by the Seller to the Purchaser to
secure
a debt or other obligation of the Seller. Consequently, the sale of each
Mortgage Loan shall be reflected as a sale on the Seller's business records,
tax
returns and financial statements.
Subsection
6.03. Delivery
of Mortgage Loan Documents.
The
Seller shall from time to time in connection with each Closing Date, at
least
five (5) Business Days prior to such Closing Date, deliver and release
to the
Purchaser or to Purchaser’s Custodian, as Purchaser designates, the following
Mortgage Loan Documents as required by this Agreement with respect to each
Mortgage Loan to be purchased and sold on the related Closing Date and
set forth
on the related Mortgage Loan Schedule delivered with such Mortgage Loan
Documents:
(i)
The
original Mortgage Note endorsed, "Pay to the order of CitiMortgage, Inc.
without
recourse" and signed in the name of Seller by an authorized
officer. In the event that the Mortgage Loan was acquired by Seller
in a merger, the endorsement must be by "[Seller], successor by merger
to [name
of predecessor]"; and in the event that the Mortgage Loan was acquired
or
originated by Seller while doing business under another name, the endorsement
must be by "[Seller], formerly known as [previous name]".
(ii)
The
original Mortgage, or a copy of the Mortgage with evidence of recording
thereon
certified by the appropriate recording office to be a true copy of the
recorded
Mortgage, or, if the original Mortgage has not yet been returned from the
recording office, a copy of the original Mortgage together with a certificate
of
either the closing attorney, an officer of the title insurer which issued
the
related title insurance policy or an officer of Seller, certifying that
the copy
is a true copy of the original of the Mortgage which has been delivered
by such
officer or attorney for recording in the appropriate recording office of
the
jurisdiction in which the Mortgaged Property is located.
(iii)
The
original assignment of mortgage from Seller, prepared in blank, which assignment
shall be in form and substance acceptable for recording. In the event
that the Mortgage Loan was acquired by Seller in a merger, the assignment
must
be by "[Seller], successor by merger to [name of predecessor]"; and in
the event
that the Mortgage Loan was acquired or originated by Seller while doing
business
under another name, the assignment must be by "[Seller], formerly known
as
[previous name]”.
(iv)
The
original policy of title insurance, or, if the policy has not yet been
issued, a
written commitment or interim binder issued by the title insurance company,
dated and certified as of the date the Mortgage Loan was funded, with a
statement by the title insurance company or closing attorney on such binder
or
commitment that the priority of the lien of the related Mortgage during the
period between the date of the funding of the related Mortgage Loan and
the date
of the related title policy (which title policy shall be dated the date
of
recording of the related Mortgage) is insured.
(v)
Originals, or certified true copies from the appropriate recording office,
of
any intervening assignments of the Mortgage with evidence of recording
thereon,
or, if the original intervening assignment has not yet been returned from
the
recording office, a certified copy of such assignment.
(vi)
Originals or copies of all assumption and modification agreements, if
any.
(vii)
Original Primary Mortgage Insurance Policy, Loan Guaranty Certificate or
Mortgage Insurance Certificate, as applicable.
(viii)
Original power of attorney, if applicable.
The
Seller shall forward to the Purchaser or Purchaser’s Custodian, as Purchaser
designates, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance
with
this Agreement within two (2) weeks of their execution; provided, however,
that
the Seller shall provide the Purchaser or Purchaser’s Custodian, as Purchaser
designates, with a certified true copy of any such document submitted for
recordation within two (2) weeks 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 ninety (90) days of its submission for
recordation.
From
time
to time, if Seller is not Custodian, Purchaser shall deliver or cause to
be
delivered to Seller, as soon as practicable following receipt of a written
request from Seller and at no expense to Seller, any Mortgage Loan Document
needed by Seller in connection with the servicing of a Mortgage
Loan. Seller’s written request for the release of a Mortgage Loan
Document shall specify in reasonable detail the reason for Seller’s
request. During the time that any such Mortgage Loan Document is in
the possession of Seller, such possession shall be deemed to be in trust
for the
benefit of Purchaser and Seller shall promptly return to Purchaser or its
designee any Mortgage Loan Document so released when Seller’s need for such
Mortgage Loan Document no longer exists. Purchaser shall indemnify
and hold Seller harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that Seller may sustain
in
connection with any third party claim in any way related to Purchaser’s or its
designee’s failure to release, in a timely manner, the Mortgage Loan Documents
requested by Seller pursuant to this Section 6.03.
SECTION
7. Representations,
Warranties and Covenants of the Seller: Remedies for Breach
Subsection
7.01. Representations
and Warranties Respecting the Seller.
The
Seller represents, warrants and covenants to the Purchaser as of the initial
Closing Date and each subsequent Closing Date:
(i)The
Seller is duly organized, validly
existing and in good standing under the laws of Delaware and is and will
remain
in compliance with the laws of each state in which any Mortgaged Property
is
located to the extent necessary to ensure the enforceability of each Mortgage
Loan and the servicing of each Mortgage Loan in accordance with the terms
of
this Agreement;
(ii)The
Seller has the full power and
authority to hold each Mortgage Loan, to sell each Mortgage Loan, and to
execute, deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Seller has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and delivered
this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a legal, valid and binding obligation
of
the Seller, enforceable against it in accordance with its terms except
as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization;
(iii)The
execution and delivery of this
Agreement by the Seller and the performance of and compliance with the
terms of
this Agreement will not violate the Seller's articles of incorporation or
by-laws or constitute a default under or result in a breach or acceleration
of,
any material contract, agreement or other instrument to which the Seller
is a
party or which may be applicable to the Seller or its assets;
(iv)The
Seller is not in violation of,
and the execution and delivery of this Agreement by the Seller and its
performance and compliance with the terms of this Agreement will not constitute
a violation with respect to, any order or decree of any court or any order
or
regulation of any federal, state, municipal or governmental agency having
jurisdiction over the Seller or its assets, which violation might have
consequences that would materially and adversely affect the condition (financial
or otherwise) or the operation of the Seller or its assets or might have
consequences that would materially and adversely affect the performance
of its
obligations and duties hereunder;
(v)The
Seller is an approved
seller/servicer of Conventional Mortgage Loans for FNMA and FHLMC in good
standing and is a HUD approved mortgagee pursuant to Section 203 of the
National
Housing Act. The Seller is also an FHA Approved Mortgage in good standing
to
service FHA Loans, a VA Approved Lender, has not been suspended as a
mortgagee or servicer by the FHA or VA, and has facilities, procedures
and
experienced personnel necessary for the sound servicing of mortgage loans
of the
same type as the FHA Loans and the VA Loans. No event has occurred,
including but not limited to a change in insurance coverage,
which
would
make the Seller unable to comply with FNMA, FHLMC, HUD, FHA or VA eligibility
requirements or which would require notification to FNMA, FHLMC, HUD, FHA
or
VA;
(vi)The
Seller 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;
(vii)The
Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered
with
respect to each Mortgage Loan pursuant to this Agreement, have been delivered
to
the Purchaser all in compliance with the specific requirements of the this
Agreement. With respect to each Mortgage Loan, the Seller is in possession
of a
complete Mortgage File in compliance with Exhibit 4.
(viii)Immediately
prior to the payment of
the Purchase Price for each Mortgage Loan, the Seller was the owner of
record of
the related Mortgage and the indebtedness evidenced by the related Mortgage
Note
and upon the payment of the Purchase Price by the Purchaser, in the event
that
the Seller retains record title, the Seller shall retain such record title
to
each Mortgage, each related Mortgage Note and the related Mortgage Files
with
respect thereto in trust for the Purchaser as the owner thereof and only
for the
purpose of servicing and supervising the servicing of each Mortgage
Loan;
(ix)There
are no actions or proceedings
against, or investigations of, the Seller before any court, administrative
or
other tribunal (A) that might prohibit its entering into this Agreement,
(B)
seeking to prevent the sale of the Mortgage Loans or the consummation of
the
transactions contemplated by this Agreement or (C) that might prohibit
or
materially and adversely affect the performance by the Seller of its obligations
under, or validity or enforceability of, this Agreement;
(x)No
consent, approval, authorization
or order of any court or governmental agency or body is required for the
execution, delivery and performance by the Seller of, or compliance by
the
Seller with, this Agreement or the consummation of the transactions contemplated
by this Agreement, except for such consents, approvals, authorizations
or
orders, if any, that have been obtained prior to the related Closing
Date;
(xi)The
consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of
the
Seller, and the transfer, assignment and conveyance of the Mortgage Notes
and
the Mortgages by the Seller pursuant to this Agreement are not subject
to the
bulk transfer or any similar statutory provisions;
(xii)The
information delivered by the
Seller to the Purchaser with respect to the Seller's loan loss, foreclosure
and
delinquency experience for the twelve (12) months immediately preceding
the
Initial Closing Date on mortgage loans underwritten to the same standards
as the
Mortgage Loans and covering mortgaged properties similar to the Mortgaged
Properties, is true and correct in all material respects;
(xiii)Neither
this Agreement nor any
written statement, report or other document prepared and furnished or to
be
prepared and furnished by the Seller pursuant to this Agreement
or
in
connection with the transactions contemplated hereby contains any untrue
statement of material fact or omits to state a material fact necessary
to make
the statements contained herein or therein not misleading; and
(xiv)The
Seller used no adverse selection
procedures in selecting the Mortgage Loans from among the outstanding
Conventional, FHA insured or VA guaranteed mortgage loans in the Seller’s
portfolio at the related Closing Date as to which the representations and
warranties set forth in this Subsection 7.01 could be made.
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Subsection
7.02.
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Representations
and Warranties Regarding IndividualMortgage
Loans
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The
Seller hereby represents and warrants to the Purchaser that, as to each
Mortgage
Loan and as of the related Closing Date for such Mortgage Loan:
(i)
The information set forth in the Mortgage Loan Schedule is complete, true
and
correct;
(ii) All
payments required to be made up to the close of business on the Cut-off
Date for
such Mortgage Loan under the terms of the Mortgage Note have been made;
the
Seller has not advanced funds, or induced, solicited or knowingly received
any
advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required
by the
Mortgage Note or Mortgage; and there has been no delinquency, exclusive
of any
period of grace, in any payment by the Mortgagor thereunder during the
last
twelve (12) months;
(iii) There
are no delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable in
future
installments or other outstanding charges affecting the related Mortgaged
Property;
(iv) The
terms of the Mortgage Note and the Mortgage have not been impaired, waived,
altered or modified in any respect, except (a) in the case of a Conventional
Mortgage Loan, by written instrument, recorded in the applicable public
recording office if necessary to maintain the lien priority of the Mortgage,
and
which have been delivered to the Purchaser; the substance of any such waiver,
alteration or modification has been approved by the insurer under the Primary
Insurance Policy, if any, and the title insurer, to the extent required
by the
related policy, and (b) in the case of an FHA Loan or a VA Loan, by written
instrument, and the substance of any such waiver, alteration or modification
has
been approved by the FHA or the VA, as the case may be, to the extent required
by the applicable Insurance Agreement, and in any event the substance of
any
waiver, alteration or modification is reflected on the Mortgage Loan
Schedule. No instrument of waiver, alteration or modification has
been executed, and no Mortgagor has been released, in whole or in part,
except
in connection with an assumption agreement approved by the insurer under
the
Primary Insurance Policy, if any, and the title insurer, to the extent
required
by the policy, and which assumption agreement has been delivered to the
Purchaser and the terms of which are reflected in the Mortgage Loan
Schedule;
(v) The
Mortgage Note and the Mortgage are not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will
the
operation of any of the terms of the Mortgage Note and the Mortgage, or
the
exercise of any right thereunder, render the Mortgage unenforceable, in
whole or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(vi) All
buildings 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 the Servicing
Addendum. All such insurance policies contain a standard mortgagee
clause naming the Seller, its successors and assigns as mortgagee and all
premiums thereon have been paid. If the Mortgaged Property is in an
area identified on a Flood Hazard Map or Flood Insurance Rate Map issued
by the
Federal Emergency Management Agency as having special flood hazards (and
such
flood insurance has been made available), a flood insurance policy meeting
the
requirements of the current guidelines of the Federal Insurance Administration
is in effect, which policy conforms to the requirements of FNMA and
FHLMC. The Mortgage obligates the Mortgagor thereunder to maintain
all such insurance at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to maintain such
insurance at Mortgagor's cost and expense and to seek reimbursement therefor
from the Mortgagor;
(vii) 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, fair housing or disclosure
laws
applicable to the origination and servicing of the Mortgage Loans have
been
complied with;
(viii) The
Mortgage has not been satisfied, cancelled, subordinated or rescinded,
in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed
that
would effect any such satisfaction, cancellation, subordination, rescission
or
release, except in connection with an assumption agreement which has been
delivered to the Purchaser and which has been approved (a) in the case
of a
Conventional Mortgage Loan, by the insurer under the Primary Insurance
Policy,
if any, and (b) in the case of an FHA Loan or a VA Loan, by the FHA or
the VA,
as the case may be, to the extent required by the applicable Insurance
Agreement; and, in any event, any such release is reflected on the Mortgage
Loan
Schedule;
(ix) The
Mortgage is a valid, existing and enforceable first lien on the Mortgaged
Property, including all improvements on the Mortgaged Property subject
only to
(a) the lien of current real property taxes and assessments not yet due
and
payable, (b) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording being
acceptable to mortgage lending institutions generally and the FHA or the
VA, as
the case may be, and specifically referred to in the lender's title insurance
policy delivered to the originator of the Mortgage Loan and which do not
adversely affect the Appraised Value of the Mortgaged Property, and (c)
other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be
provided
by
the
Mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property and which shall not in any way prevent realization of the benefits
of
any FHA Insurance Contract or VA Guaranty Agreement, if
applicable. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, existing and enforceable first lien and
first
priority security interest on the property described therein and the Seller
has
full right to sell and assign the same to the Purchaser. The
Mortgaged Property was not, as of the date of origination of the Mortgage
Loan,
subject to a mortgage, deed of trust, deed to secure debt or other security
instrument creating a lien subordinate to the lien of the Mortgage;
(x) The
Mortgage Note and the related Mortgage are genuine and each is the legal,
valid
and binding obligation of the maker thereof, enforceable in accordance
with its
terms;
(xi) All
parties to the Mortgage Note and the Mortgage had legal capacity to enter
into
the Mortgage Loan and to execute and deliver the Mortgage Note and the
Mortgage,
and the Mortgage Note and the Mortgage have been duly and properly executed
by
such parties. The Mortgagor is a natural person;
(xii) The
proceeds of the Mortgage Loan have been fully disbursed to or for the account
of
the Mortgagor and there is no obligation for the Mortgagee to advance additional
funds thereunder and any and all requirements as to completion of any on-site
or
off-site improvement and as to disbursements of any escrow funds therefor
have
been complied with. All costs, fees and expenses incurred in making or
closing
the Mortgage Loan and the recording of the Mortgage have been paid, and
the
Mortgagor is not entitled to any refund of any amounts paid or due to the
Mortgagee pursuant to the Mortgage Note or Mortgage;
(xiii) The
Seller is the sole legal, beneficial and equitable owner of the Mortgage
Note
and the Mortgage and has full right to transfer and sell the Mortgage Loan
to
the Purchaser free and clear of any encumbrance, equity, lien, pledge,
charge,
claim or security interest;
(xiv) 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) (a) in the case of a Conventional
Mortgage
Loan, in compliance with any and all applicable "doing business" and licensing
requirements of the laws of the state wherein the Mortgaged Property is
located
and (b) in the case of an FHA Loan or VA Loan, an FHA Approved Mortgagee
and a
VA Approved Lender;
(xv) The
Mortgage Loan is covered by an American Land Title Association lender's
title
insurance policy acceptable to FNMA or FHLMC, issued by a title insurer
acceptable to (a) FNMA and FHLMC, in the case of a Conventional Mortgage
Loan
and (b) the FHA or the VA, as the case may be, in the case of an FHA Loan
or a
VA Loan, and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained in (a)
and
(b) above) the Seller, its successors and assigns as to the first priority
lien
of the Mortgage in the original principal amount of the Mortgage Loan and
against any loss by reason of the invalidity or unenforceability of the
lien
resulting from, in the case of an Adjustable Rate Mortgage Loan, the provisions
of the related Mortgage providing for adjustment
in
the
Mortgage Interest Rate and Monthly Payment. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress
to and
from the Mortgaged Property, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller is the sole insured of
such lender's title insurance policy, and such lender's title insurance
policy
is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No
claims have been made under such lender's title insurance policy, and no
prior
holder of the related Mortgage, including the Seller, has done, by act
or
omission, anything which would impair the coverage of such lender's title
insurance policy;
(xvi) There
is no default, breach, violation or event of acceleration existing under
the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event of acceleration, and the Seller has
not
waived any default, breach, violation or event of acceleration; provided
that,
in the case of an FHA Loan or a VA Loan, a waiver may have been given if
it was
pursuant to a written instrument, and the substance of such waiver has
been
approved by the FHA or the VA, as the case may be, to the extent required
by the
applicable Insurance Agreement, and is reflected on the Mortgage Loan
Schedule;
(xvii) There
are no mechanics' or similar liens or claims which have been filed for
work,
labor or material (and no rights are outstanding that under law could give
rise
to such lien) affecting the related Mortgaged Property which are or may
be liens
prior to, or equal or coordinate with, the lien of the related
Mortgage;
(xviii) All
improvements which were considered in determining the Appraised Value of
the
related Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on adjoining
properties encroach upon the Mortgaged Property. Each appraisal has
been performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;
(xix) The
Mortgage Loan was originated by the Seller or by a savings and loan association,
a savings bank, a commercial bank or similar institution which is supervised
and
examined by a federal or state authority, or by a mortgagee approved as
such by
the Secretary of HUD;
(xx) Principal
payments on the Mortgage Loan commenced no more than sixty (60) days after
the
proceeds of the Mortgage Loan were disbursed. The Mortgage Loan bears
interest at the Mortgage Interest Rate. With respect to each Fixed
Rate Mortgage Loan, the Mortgage Note is payable on the first day of each
month
in equal monthly installments of principal and interest, with interest
in
arrears, providing for full amortization by maturity over a scheduled term
of
not more than thirty (30) years. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Note is payable on the first day of each month in Monthly
Payments which are changed on each Adjustment Date to an amount which will
fully
amortize the unpaid principal balance of the Mortgage Loan over its remaining
term at the Mortgage Interest Rate. The Mortgage Note does not permit negative
amortization;
(xxi) The
origination and collection practices used by the Seller with respect to
each
Mortgage Note and Mortgage have been in all respects legal, proper, prudent
and
customary in the mortgage origination and servicing industry. The
Mortgage Loan has been serviced by the Seller and any predecessor servicer
in
accordance with the terms of the Mortgage Note. With respect to
escrow deposits and Escrow Payments, if any, all such payments are in the
possession of, or under the control of, the Seller and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or Escrow
Payments or other charges or payments due the Seller have been capitalized
under
any Mortgage or the related Mortgage Note;
(xxii) The
Mortgaged Property is free of damage and waste and there is no proceeding
pending for the total or partial condemnation thereof;
(xxiii) The
Mortgage and related Mortgage Note contain customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate
for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (a) in the case of a Mortgage designated as
a deed
of trust, by trustee's sale, and (b) otherwise by judicial
foreclosure. The Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed
for protection under applicable bankruptcy laws. There is no
homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the
right
to foreclose the Mortgage. The Mortgagor has not notified the Seller
and the Seller has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940;
(xxiv) The
Mortgage Loan was underwritten in accordance with underwriting standards
which
are acceptable to FNMA, FHLMC and GNMA, as applicable, in accordance with
Seller’s guidelines in effect at the time the Mortgage Loan was originated. The
Mortgage Loan is saleable to FNMA, FHLMC and GNMA, as applicable, on a
non-recourse basis. The Mortgage Note and Mortgage are on forms acceptable
to
FNMA and FHLMC;
(xxv) The
Mortgage Note is not and has not been secured by any collateral except
the lien
of the corresponding Mortgage on the Mortgaged Property and the security
interest of any applicable security agreement or chattel mortgage referred
to in
(ix) above;
(xxvi) The
Mortgage File contains an appraisal of the related Mortgaged Property made
and
signed, prior to the approval of the Mortgage Loan application, by a qualified
appraiser, duly appointed by the Seller, who had no interest, direct or
indirect
in the Mortgaged Property or in any loan made on the security thereof,
whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan
and who met the minimum qualifications of FNMA and FHLMC;
(xxvii) 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;
(xxviii) No
Mortgage Loan contains provisions pursuant to which Monthly Payments are
(a)
paid or partially paid with funds deposited in any separate account established
by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor or (b)
paid
by any source other than the Mortgagor or contains any other similar provisions
which may constitute a "buydown" provision. The Mortgage Loan is not
a graduated payment mortgage loan and the Mortgage Loan does not have a
shared
appreciation or other contingent interest feature;
(xxix) The
Mortgagor has executed a statement to the effect that the Mortgagor has
received
all disclosure materials required by applicable law with respect to the
making
of adjustable rate mortgage loans and rescission materials with respect
to
Refinanced Mortgage Loans, and such statement is and will remain in the
Mortgage
File;
(xxx) No
Mortgage Loan was made in connection with (a) the construction or rehabilitation
of a Mortgaged Property or (b) facilitating the trade-in or exchange of
a
Mortgaged Property;
(xxxi) The
Seller has no knowledge of any circumstances or condition with respect
to the
Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's credit
standing that can reasonably be expected to cause the Mortgage Loan to
be an
unacceptable investment, cause the Mortgage Loan to become delinquent,
or
adversely affect the value of the Mortgage Loan;
(xxxii) Each
Mortgage Loan with an LTV at origination in excess of 80% is and will be
subject
to a Primary Insurance Policy, issued by an insurer acceptable to FNMA
and
FHLMC, which insures as to payment defaults that portion of the Mortgage
Loan in
excess of the portion of the Appraised Value of the Mortgaged Property
required
by FNMA. All provisions of such Primary Insurance Policy have been
and are being complied with, such policy is in full force and effect, and
all
premiums due thereunder have been paid. Any Mortgage subject to any
such Primary Insurance Policy obligates the Mortgagor thereunder to maintain
such insurance and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the Mortgage Loan does not
include any such insurance premium. In the case of an FHA Loan or VA Loan,
the
Mortgage is either guaranteed by the VA to the maximum extent permitted
by law
or is fully insured by the FHA and all necessary steps have been taken
to make
and keep such guaranty or insurance valid, binding and enforceable and
the
applicable Insurance Agreement is the binding, valid and enforceable obligation
of the VA or the FHA, as the case may be, to the full extent thereof, without
surcharge, set-off or defense;
(xxxiii) 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,
have been made or obtained from the appropriate authorities;
(xxxiv) (a) No
error, omission, misrepresentation, negligence, fraud or similar occurrence
with
respect to a Mortgage Loan has taken place on the part of any person, including
without limitation the Mortgagor, any appraiser, any builder or developer,
or
any other party involved in the origination of the Mortgage Loan or in
the
application of any insurance in relation to such Mortgage Loan, and (b)
no
action has been taken or failed to be taken, no event has occurred and
no state
of facts exists or has existed on or prior to the Closing Date (whether
or not
known to the Seller on or prior to such date) which has resulted or will
result
in an exclusion from, denial of, or defense to coverage under any Primary
Insurance Policy (including, without limitation, any exclusions, denials
or
defenses which would limit or reduce the availability of the timely payment
of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence,
or fraud
of the Seller, the related Mortgagor or any party involved in the application
for such coverage, including the appraisal, plans and specifications and
other
exhibits or documents submitted therewith to the insurer under such insurance
policy, or for any other reason under such coverage, but not including
the
failure of such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay;
(xxxv) 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;
(xxxvi) Any
principal advances made to the Mortgagor prior to the Cut-off Date have
been
consolidated with the outstanding principal amount secured by the Mortgage,
and
the 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 FNMA and
FHLMC.
The consolidated principal amount does not exceed the original principal
amount
of the Mortgage Loan;
(xxxvii) No
Mortgage Loan has a balloon payment feature;
(xxxviii) Interest
on each Mortgage Loan is calculated on the basis of a 360-day year consisting
of
twelve 30-day months;
(xxxix) If
the Residential Dwelling on the Mortgaged Property is a condominium unit
or a
unit in a planned unit development (other than a de minimis planned unit
development) such condominium or planned unit development project is acceptable
to FNMA and FHLMC;
(xl)
The Mortgage Loan was not prepaid in full prior to the related Closing
Date and
the Seller has not received any notification from a Mortgagor that a prepayment
in full shall be made after such Closing Date;
(xli)
The Mortgaged Property is in material compliance with all applicable
environmental laws pertaining to environmental hazards including, without
limitation, asbestos, and neither the Seller nor, to the Seller's knowledge,
the
related Mortgagor, has received any notice of any violation or potential
violation of such law and;
(xlii) No
Mortgage Loan is predatory loan, a high-cost loan, a HOEPA loan, a covered
loan
or a loan specially regulated under any state or local law due to its method
of
origination, terms, interest rate or points and fees paid;
(xliii) For
any Mortgage Loan, the total compensation paid to (i) the broker by the
Mortgagor and the lender and/or (ii) the lender by the Mortgagor did not
exceed
8% of the Mortgage Loan amount. For any Mortgage Loan, the total of points
and
fees charged to the Mortgagors did not exceed the greater of (i) 5% or
(ii)
$1000; and
(xliv) No
Mortgage Loan refinanced a loan made under a special financing program
to
promote homeownership with a rate significantly less than prevailing market
rates for borrowers with similar qualifications at the time the loan was
made.
Habitat for Humanity loans are examples of Below Market Rate
Loans. .
Subsection
7.03. Remedies
for Breach of Representations and Warranties.
It
is
understood and agreed that the representations and warranties set forth
in
Subsections 7.01 and 7.02 shall survive the sale of the Mortgage Loans
to the
Purchaser 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 lack of examination of any Mortgage File.
Upon
discovery by either the Seller 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 the Purchaser in the
related
Mortgage Loan in the case of a representation and warranty relating to
a
particular Mortgage Loan), the party discovering such breach shall give
prompt
written notice to the other.
Within
sixty (60) days of the earlier of either discovery by or notice to the
Seller of
any breach of a representation or warranty which materially and adversely
affects the value of a Mortgage Loan or the Mortgage Loans, the Seller
shall use
its best efforts promptly to cure such breach in all material respects
and, if
such breach cannot be cured, the Seller 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 Subsection
7.01
and such breach cannot be cured within sixty (60) days of the earlier of
either
discovery by or notice to the Seller of such breach, all of the Mortgage
Loans
shall, at the Purchaser's option, be repurchased by the Seller at the Repurchase
Price. Any such reconveyance by Purchaser to Seller shall be conducted
in the
same manner as provided in Section 6 of this Agreement. Any repurchase
of a
Mortgage Loan(s) pursuant to the foregoing provisions of this Subsection
7.03
shall occur on a date designated by the Purchaser and shall be accomplished
by
deposit in the Custodial Account of
the
amount of the Repurchase Price for distribution to the Purchaser on the
next
scheduled Distribution Date. In the event a Mortgage Loan is subject to
a FNMA
securitization at the time of the discovery of a breach of a representation
or
warranty under this Article 7, Seller shall adhere to any and all FNMA
requirements for notice, cure and repurchase, including, but not limited
to,
repurchasing the Mortgage Loan directly from FNMA.
At
the
time of repurchase, the Purchaser and the Seller shall arrange for the
reassignment of the repurchased Mortgage Loan to the Seller and the delivery
to
the Seller of any documents held by the Purchaser relating to the repurchased
Mortgage Loan. In the event the Repurchase Price is deposited in the Custodial
Account, the Seller shall, simultaneously with such deposit, give written
notice
to the Purchaser that such deposit has taken place. Upon such
repurchase the related Mortgage Loan Schedule shall be amended to reflect
the
withdrawal of the repurchased Mortgage Loan from this Agreement.
In
addition to such cure and repurchase obligation, the Seller shall indemnify
the
Purchaser and hold it harmless against any losses, damages, penalties,
fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense
or
assertion based on or grounded upon, or resulting from, a breach of the
Seller's
representations and warranties contained in this Section 7. It is understood
and
agreed that the obligations of the Seller set forth in this Subsection
7.03 to
cure or repurchase a defective Mortgage Loan and to indemnify the Purchaser
as
provided in this Subsection 7.03 constitute the sole remedies of the Purchaser
respecting a breach of the foregoing representations and
warranties.
Any
cause
of action against the Seller relating to or arising out of the breach of
any
representations and warranties made in Subsections 7.01 or 7.02 shall accrue
as
to any Mortgage Loan upon (i) discovery of such breach by the Purchaser
or
notice thereof by the Seller to the Purchaser, (ii) failure by the Seller
to
cure such breach or repurchase such Mortgage Loan as specified above, and
(iii)
demand upon the Seller by the Purchaser for compliance with the relevant
provisions of this Agreement.
Subsection
7.04 Repurchase
of Certain Mortgage Loans.
In
the
event that (i) the first Due Date for a Mortgage Loan is subsequent to
the
Cut-off Date and the initial Monthly Payment is not made within thirty
(30) days
of such Due Date, (ii) a Monthly Payment due on or prior to the related
Cut-off
Date is not made within thirty (30) days of the related Due Date or (iii)
the
principal balance due on a Mortgage Loan is paid in full within thirty
(30) days
of the related Closing Date, then, in each such case, the Seller shall
repurchase the affected Mortgage Loans at the Repurchase Price, which shall
be
paid as provided for in Subsection 7.03.
SECTION
8. Closing. The
closing for each Mortgage Loan Package shall take place on the related
Closing
Date. At the Purchaser's option, the closing shall be either by telephone,
confirmed by letter or wire as the parties shall agree, or conducted in
person,
at such place as the parties shall agree.
The
closing for the Mortgage Loans to be purchased on each Closing Date shall
be
subject to each of the following conditions:
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(a)
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all
of the representations and warranties of the Seller under this
Agreement
shall be true and correct as of the related Closing Date and
no event
shall have occurred which, with notice or the passage of time,
would
constitute a default under this
Agreement;
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(b)
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the
Purchaser shall have received, or the Purchaser's attorneys shall
have
received in escrow, all Closing Documents as specified in Section
9, in
such forms as are agreed upon and acceptable to the Purchaser,
duly
executed by all signatories other than the Purchaser as required
pursuant
to the terms hereof;
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(c)
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the
Seller shall have delivered and released to the Purchaser all
documents
required pursuant to this Agreement;
and
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(d)
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all
other terms and conditions of this Agreement shall have been
complied
with.
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Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on the
related Closing Date the Purchase Price, plus accrued interest pursuant
to
Section 4, by wire transfer of immediately available funds to the account
designated by the Seller.
SECTION
9. Closing
Documents.
(a)
On or
before the Initial Closing Date, the Seller shall submit to the Purchaser
fully
executed originals of the following documents:
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1.
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this
Agreement, in two counterparts;
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2.
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a
Custodial Account Agreement in the form attached as Exhibit 6
hereto;
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3.
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a
Escrow Account Letter Agreement in the form attached as Exhibit 7
hereto;
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4.
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an
Officer's Certificate, in the form of Exhibit 1 hereto, including
all attachments thereto.
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(b)
The
Closing Documents for the Mortgage Loans to be purchased on each Closing
Date
shall consist of fully executed originals of the following
documents:
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1.
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the
related Commitment Letter in the form of Exhibit 9
hereto;
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2.
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the
related Mortgage Loan Schedule, one copy to be attached
hereto;
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3.
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an
Officer's Certificate, in the form of Exhibit 1 hereto, including
all attachments thereto;
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4.
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a
Security Release Certification, in the form of Exhibit 2 hereto
executed by any Person, as requested by the Purchaser, if any
of the
Mortgage Loans has at any time been subject to any security interest,
pledge or hypothecation for the benefit of such
Person;
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5.
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a
certificate or other evidence of merger or change of name, signed
or
stamped by the applicable regulatory authority, if any of the
Mortgage
Loans were acquired by the Seller by merger or acquired or originated
by
the Seller while conducting business under a name other than
its present
name, if applicable; and
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6.
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a
Term Sheet in the form of Exhibit 3
hereto.
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SECTION
10. Costs. The
Purchaser shall pay any commissions due its salespersons and the legal
fees and
expenses of its attorneys. All other costs and expenses incurred in connection
with the transfer and delivery of the Mortgage Loans, including without
limitation recording fees, fees for title policy endorsements and continuations,
fees for recording Assignments of Mortgage, any costs and expenses for
delivery
of the Mortgage Loan Documents and any other Mortgage Loan-related documentation
to Purchaser and the Seller's attorney's fees, shall be paid by the
Seller.
SECTION
11. Seller's
Servicing Obligations. The Seller, as an independent contract
servicer, shall service and administer the Mortgage Loans in accordance
with the
terms and provisions set forth in the Servicing Addendum attached as Exhibit
8 which Servicing Addendum is incorporated herein by reference. Seller
shall
provide any information required in good faith by Purchaser as detailed
on
Exhibit 10.
SECTION
12. The
Seller and Purchaser.
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Subsection
12.01.
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Additional
Indemnification by the Seller/Indemnification by
Purchaser.
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In
addition to the indemnification provided in Subsection 7.03, the Seller
shall
indemnify the Purchaser and hold the Purchaser harmless against any and
all
claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary
legal fees and related costs, judgments, and any other costs, fees and
expenses
that the Purchaser may sustain in any way related to the failure of the
Seller
to perform its obligations under this Agreement including but not limited
to its
obligation to service and administer the Mortgage Loans in strict compliance
with the terms of this Agreement.
The
Purchaser shall indemnify the Seller and hold the Seller harmless against
any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable
and
necessary legal fees and related costs, judgments, and any other costs,
fees and
expenses that the Seller may sustain in any way related to the failure
of the
Purchaser to perform its obligations under this Agreement.
Subsection
12.02. Merger
or Consolidation of the Seller.
The
Seller shall keep in full force and effect its existence, rights and franchises
as a corporation under the laws of the state of its incorporation except
as
permitted herein, 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 enable the Seller to perform its duties
under this Agreement.
Any
Person into which the Seller may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Seller
shall
be a party, or any Person succeeding to the business of the Seller, shall
be the
successor of the Seller 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 whose deposits are insured by FDIC or a
company
whose business is the origination and servicing of mortgage loans, shall
be a
FNMA or FHLMC approved seller/servicer and shall satisfy any requirements
with
respect to the qualifications of a successor to the Seller.
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Subsection
12.03.
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No
Transfer of Servicing.
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With
respect to the retention of the Seller to service the Mortgage Loans, the
Seller
acknowledges that the Purchaser has acted in reliance upon the Seller's
independent status, the adequacy of its servicing facilities, plan, personnel,
records and procedures, its integrity, reputation and financial standing
and the
continuance thereof. Without in any way limiting the generality of this
Section,
Seller shall not either assign this Agreement or the servicing
hereunder
or
delegate its rights or 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 approval of the Purchaser, which consent will not be
unreasonably withheld.
SECTION
13. DEFAULT.
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Subsection
13.01.
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Events
of Default.
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In
case
one or more of the following Events of Default by the Seller shall occur
and be
continuing, that is to say:
(i) any
failure by the Seller to remit to the Purchaser any payment required to
be made
under the terms of this Agreement which continues unremedied for a period
of
three (3) Business Days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Seller
by the Purchaser; or
(ii) failure
on the part of the Seller duly to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Seller set forth
in this
Agreement which continues unremedied for a period of thirty (30) days (except
that such number of days shall be fifteen (15) in the case of a failure
to pay
any premium for any insurance policy required to be maintained under this
Agreement) after the date on which written notice of such failure, requiring
the
same to be remedied, shall have been given to the Seller by the Purchaser;
or
(iii) a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator
in
any insolvency, bankruptcy, readjustment of debt, marshalling of assets
and
liabilities or similar proceedings, or for the winding-up or liquidation
of its
affairs, shall have been entered against the Seller and such decree or
order
shall have remained in force undischarged or unstayed for a period of sixty
(60)
days; or
(iv) the
Seller shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of
assets and liabilities or similar proceedings of or relating to the Seller
or of
or relating to all or substantially all of its property; or
(v) the
Seller shall admit in writing its inability to pay its debts generally
as they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors,
or
voluntarily suspend payment of its obligations; or
(vi) failure
by the Seller to be in compliance with the "doing business" or licensing
laws of
any jurisdiction where a Mortgaged Property is located; or
(vii) the
Seller ceases to meet the qualifications of either a FNMA or FHLMC
seller/servicer; or
(viii) the
Seller ceases to be an FHA Approved Mortgagee or it is suspended as a Approved
Lender; or
(ix) the
Seller attempts to assign its right to servicing compensation hereunder
or the
Seller 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;
then,
and
in each and every such case, so long as an Event of Default shall not have
been
remedied, the Purchaser, by notice in writing to the Seller may, in addition
to
whatever rights the Purchaser may have at law or equity to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Seller as servicer under this Agreement. On or after
the
receipt by the Seller of such written notice, all authority and power of
the
Seller to service the Mortgage Loans under this Agreement shall on the
date set
forth in such notice pass to and be vested in the successor appointed pursuant
to Section 15.
Subsection
13.02. Waiver
of Defaults.
The
Purchaser may waive any default by the Seller in the performance of its
obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default
or
impair any right consequent thereon except to the extent expressly so
waived.
SECTION
14. Termination.
The respective obligations and responsibilities of the Seller, as servicer,
shall terminate in accordance with Section 14 unless terminated on an earlier
date at the option of the Purchaser or pursuant to Section 13. This
Agreement shall terminate upon either: (a) the later of the distribution
to
Purchaser of final payment or liquidation with respect to the last Mortgage
Loan
(or advances of same by Seller), or the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (b) mutual
consent of Seller and Purchaser in writing. Upon written request
from
the Purchaser in connection with any such termination, the Seller shall
prepare,
execute and deliver, any and all documents and other instruments, place
in the
Purchaser's possession all Mortgage Files, and do or accomplish all other
acts
or things necessary or appropriate to effect the purposes of such notice
of
termination, whether to complete the transfer and endorsement or assignment
of
the Mortgage Loans and related documents, or otherwise, at the Seller's
sole
expense. The Seller agrees to cooperate with the Purchaser and such successor
in
effecting the termination of the Seller's responsibilities and rights hereunder
as servicer, 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 Seller to the Custodial Account, REO Account or Escrow Account or thereafter
received with respect to the Mortgage Loans.
SECTION
15. Successor
to the Seller. Prior to termination of Seller's responsibilities
and duties under this Agreement pursuant to Section 13 or Section 14, the
Purchaser shall (i) succeed to and assume all of the Seller's responsibilities,
rights, duties and obligations under this Agreement, or (ii) appoint a
successor
which shall succeed to all rights and assume all of the responsibilities,
duties
and liabilities of the Seller as servicer under this Agreement. Any successor
to
the Seller shall be an FHA Approved Mortgagee or a VA Approved Lender in
the
case of an FHA Loan or a VA Loan or, in the case of a Conventional Mortgage
Loan, a servicer acceptable to FNMA and FHLMC. 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 Seller's duties, responsibilities
and liabilities as servicer under this Agreement should be terminated pursuant
to the aforementioned Sections, the Seller 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 the Purchaser or such successor. The termination of the Seller
as
servicer pursuant to the aforementioned Sections shall not become effective
until a successor shall be appointed pursuant to this Section 15 and shall
in no
event relieve the Seller of the representations and warranties made pursuant
to
Subsections 7.01 and 7.02 and the remedies available to the Purchaser under
Subsection 7.03 or 7.04, it being understood and agreed that the provisions
of
such Subsections 7.01, 7.02 and 7.03 and 7.04 shall be applicable to the
Seller
notwithstanding any such resignation or termination of the Seller, or the
termination of this Agreement.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Seller and to the Purchaser an instrument accepting such appointment,
whereupon such successor shall become fully vested with all the rights,
powers,
duties, responsibilities, obligations and liabilities of the Seller, with
like
effect as if originally named as a party to this Agreement provided, however,
that such successor shall not assume, and Seller shall indemnify such successor
for, any and all liabilities arising out of the Seller's acts as servicer.
Any
termination of the Seller as servicer pursuant to Section 13 and Section
14
shall not affect any claims that the Purchaser may have against the Seller
arising prior to any such termination or resignation or remedies with respect
to
such claims.
The
Seller shall timely deliver to the successor the funds in the Custodial
Account,
REO Account and the Escrow Account and the Mortgage Files and related documents
and statements held by it hereunder and the Seller shall account for all
funds.
The Seller shall execute and deliver such instruments and do such other
things
all as may reasonably be required to more fully and definitely vest and
confirm
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Seller as servicer. The successor shall make arrangements
as it may deem appropriate to reimburse the Seller for amounts the Seller
actually expended as servicer pursuant to this Agreement which the successor
is
entitled to retain hereunder and which would otherwise have been recovered
by
the Seller pursuant to this Agreement but for the appointment of the successor
servicer.
SECTION
16. Financial
Statements. The Seller understands that in connection with the
Purchaser's marketing of the Mortgage Loans, the Purchaser shall make available
to prospective purchasers the Seller's financial statements for the most
recently completed three (3) fiscal years respecting which such statements
are
available. The Seller also shall make available any comparable interim
statements to the extent any such statements have been prepared by the
Seller
(and are available upon request to members or stockholders of the Seller
or the
public at large). The Seller, if it has not already done so, agrees to
furnish
promptly to the Purchaser copies of the statements specified above. The
Seller
also shall make available information on its servicing performance with
respect
to mortgage loans serviced for others, including delinquency
ratios.
SECTION
17. Mandatory
Delivery: Grant of Security Interest. The sale and delivery of
each Mortgage Loan on or before the related Closing Date is mandatory from
and
after the date of the execution of the related Commitment Letter, it being
specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date thereof and that an award of money damages would
be
insufficient to compensate the Purchaser for the losses and damages incurred
by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver each of the related
Mortgage Loans or one or more Mortgage Loans otherwise acceptable to the
Purchaser on or before the related Closing Date. The Seller hereby grants
to the
Purchaser a lien on and a continuing security interest in each Mortgage
Loan and
each document and instrument evidencing each such Mortgage Loan to secure
the
performance by the Seller of its obligation hereunder, and the Seller agrees
that it holds such Mortgage Loans in custody for the Purchaser subject
to the
Purchaser's (i) right to reject any Mortgage Loan under the terms of this
Agreement and the related Commitment Letter, and (ii) obligation to pay
the
related Purchase Price for the Mortgage Loans. All rights and remedies
of the
Purchaser under this Agreement are distinct from, and cumulative with,
any other
rights or remedies under this Agreement or afforded by law or equity and
all
such rights and remedies may be exercised concurrently, independently or
successively.
SECTION
18. Notices. All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address as follows:
ABN
AMRO
Mortgage Group, Inc.
6300
Interfirst Drive
(ii) if
to the Purchaser:
CitiMortgage,
Inc.
1000
Technology Drive
Attn:
Capital Markets
With
a
copy to the CitiMortgage Legal Department
or
such
other address as may hereafter be furnished to the other party by like
notice.
Any such demand, notice or communication hereunder shall be deemed to have
been
received on the date delivered to or received at the premises of the addressee
(as evidenced, in the case of registered or certified mail, by the date
noted on
the return receipt).
SECTION
19. Severability
Clause. Any part, provision, representation or warranty of this
Agreement which is prohibited or which is held to be void or unenforceable
shall
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction
shall
be ineffective, as to such jurisdiction, to the extent of such prohibition
or
unenforceability without invalidating the remaining provisions hereof,
and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable
any
provision hereof. If the invalidity of any part, provision, representation
or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate,
in
good-faith, to develop a structure the economic effect of which is nearly
as
possible the same as the economic effect of this Agreement without regard
to
such invalidity.
SECTION
20. Counterparts. This
Agreement may be executed simultaneously in any number of counterparts.
Each
counterpart shall be deemed to be an original, and all such counterparts
shall
constitute one and the same instrument.
SECTION
21. Governing
Law. The Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the
parties
hereunder shall be determined in accordance with the laws of the State
of New
York, except to the extent preempted by Federal law. The parties agree
to waive
trial by jury in the event of any dispute under this Agreement.
SECTION
22. Intention
of the Parties. It is the intention of the parties that the
Purchaser is purchasing, and the Seller is selling, the Mortgage Loans
and not a
debt instrument of the Seller or another security. Accordingly, the parties
hereto each intend to treat the transaction for Federal income
tax
purposes
as a sale by the Seller, and a purchase by the Purchaser, of the Mortgage
Loans. The Purchaser shall have the right to review the Mortgage
Loans and the related Mortgage Loan Files to determine the characteristics
of
the Mortgage Loans which shall affect the Federal income tax consequences
of
owning the Mortgage Loans and the Seller shall cooperate with all reasonable
requests made by the Purchaser in the course of such review.
SECTION
23. Successors
and Assigns. This Agreement shall bind and inure to the benefit
of and be enforceable by the Seller and the Purchaser and the respective
successors and assigns of the Seller and the Purchaser.
SECTION
24. Waivers. No
term or provision of this Agreement may be waived or modified unless such
waiver
or modification is in writing and signed by the party against whom such
waiver
or modification is sought to be enforced.
SECTION
25. Exhibits. The
exhibits to this Agreement are hereby incorporated and made a part hereof
and
are an integral part of this Agreement.
SECTION
26. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of
any
gender herein shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c) references
herein to "Articles," "Sections," "Subsections," "Paragraphs," and other
Subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) reference
to a Subsection without further reference to a Section is a reference to
such
Subsection as contained in the same Section in which the reference appears,
and
this rule shall also apply to Paragraphs and other subdivisions;
(e) the
words "herein," "hereof," "hereunder" and other words of similar import
refer to
this Agreement as a whole and not to any particular provision; and
(f) the
term "include" or "including" shall mean without limitation by reason of
enumeration.
SECTION
27. Reproduction
of Documents. This Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications
which may
hereafter be executed, (b) documents received by any party at the closing,
and
(c) financial statements, certificates and other information previously
or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process.
The
parties agree that any such reproduction shall be admissible in evidence
as the
original itself in any judicial or administrative proceeding, whether or
not the
original is in existence and whether or not such reproduction was made
by a
party in the regular course of business, and that any enlargement, facsimile
or
further reproduction of such reproduction shall likewise be admissible
in
evidence.
SECTION
28. Non-Solicitation.
(a) Seller
agrees that all Mortgagors are the exclusive customers of the Purchaser.
Neither
Seller nor any of its affiliates shall solicit Mortgagors for any purposes,
including, but not limited to, financial services, insurance coverage or
prepayment of Mortgage Loans. Seller shall not sell or distribute any customer
list incorporating the names of Mortgagors and shall not itself use any
such
list to solicit or promote, or to allow any other person to solicit or
promote,
the sale of any services or products to any Mortgagor.
(b) The
restrictions under Section 28(a) above shall not apply to:
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(i)
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an
advertising campaign by or on behalf of the Seller offering financial
services, including mortgage or insurance-related products and
services,
directed to the general public or any segment thereof provided
such
segment does not target the Mortgagors;
or
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(ii)
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a
solicitation for financial services, other than first mortgage
or
mortgage-insurance related products and services, to any Mortgagor
with
whom Seller or an affiliate has a customer relationship unrelated
to the
Mortgage Loan existing as of the applicable Closing Date, provided
that
such solicitation is part of a solicitation program not directed
primarily
to the Mortgagors.
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(c) Neither
Seller nor any of its affiliates may circumvent the intent of this Section
28 by
selling or distributing a customer list incorporating the names of the
Mortgagors to any other person or entity.
SECTION
29. Further
Agreements. The Seller and the Purchaser each agree to execute
and deliver to the other such reasonable and appropriate additional documents,
instruments or agreements as may be necessary or appropriate to effectuate
the
purposes of this Agreement.
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be
signed hereto by their respective officers thereunto duly authorized as
of the
date first above written.
CITIMORTGAGE,
INC.
(Purchaser)
By:
Name:
Title:
ABN
AMRO
MORTGAGE GROUP, INC.
By:
Name:
Title:
EXHIBIT
1
SELLER'S
OFFICER'S CERTIFICATE
I,
________________________, hereby certify that I am the duly elected
______________ of _____, a ______________ corporation (the "Seller"), and
further certify, on behalf of the Seller as follows:
1. No
proceedings looking toward merger, liquidation, dissolution or bankruptcy
of the
Seller are pending or contemplated.
2. Each
person who, as an officer or attorney-in-fact of the Seller, signed (a)
the
Mortgage Loan Purchase and Servicing Agreement (the "Purchase Agreement"),
dated
as of [MONTH] 1, 2007, by and between the Seller and CitiMortgage, Inc.
(the "Purchaser"); (b) the Commitment Letter, dated _____________ 2007,
between
the Seller and the Purchaser (the "Commitment"); and (c) any other document
delivered prior hereto or on the date hereof in connection with the sale
and
servicing of the Mortgage Loans in accordance with the Purchase Agreement
and
the Commitment was, at the respective times of such signing and
delivery, and is as of the date hereof, duly elected or appointed, qualified
and
acting as such officer or attorney-in-fact, and the signatures of such
persons
appearing on such documents are their genuine signatures.
3. All
of the representations and warranties of the Seller contained in Subsections
7.01 and 7.02 of the Purchase Agreement were true and correct in all material
respects as of the date of the Purchase Agreement and are true and correct
in
all material respects as of the date hereof.
4. The
Seller has performed all of its duties and has satisfied all the material
conditions on its part to be performed or satisfied prior to the related
Closing
Date pursuant to the Purchase Agreement and the related Commitment
.
All
capitalized terms used herein and not otherwise defined shall have the
meaning
assigned to them in the Purchase Agreement.
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
the
Seller.
Dated:
[Seal]
[NAME
IN
CAPS]
By:
Name:
Title: Vice
President
I,
_______________________, Secretary of _______________________________,
hereby
certify that _________________________ is the duly elected, qualified and
acting
Vice President of the Seller and that the signature appearing above is
his
genuine signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
Dated:
[Seal]
[NAME
IN
CAPS]
By:
Name:
Title: [Assistant]
Secretary
EXHIBIT
2
SECURITY
RELEASE CERTIFICATION
I. Release
of Security Interest
______________________________________,
hereby relinquishes any and all right, title and interest it may have in
and to
the Mortgage Loans described in Exhibit A attached hereto upon purchase
thereof
by CitiMortgage, Inc. from the Seller named below pursuant to that certain
Mortgage Loan Purchase and Servicing Agreement, dated as of [MONTH] 1,
2007, as
of the date and time of receipt by ______________________________ of $__________
for such Mortgage Loans (the "Date and Time of Sale"), and certifies that
all
notes, mortgages, assignments and other documents in its possession relating
to
such Mortgage Loans have been delivered and released to the Seller named
below
or its designees as of the Date and Time of Sale.
Name
and
Address of Financial Institution
(Name)
(Address)
By:
II. Certification
of Release
The
Seller named below hereby certifies to CitiMortgage, Inc. that, as of the
Date
and Time of Sale of the above mentioned Mortgage Loans to CitiMortgage,
Inc.,
the security interests in the Mortgage Loans released by the above named
corporation comprise all security interests relating to or affecting any
and all
such Mortgage Loans. The Seller warrants that, as of such time, there are
and
will be no other security interests affecting any or all of such Mortgage
Loans.
[NAME
IN
CAPS]
Seller
By:
Name:
Title:
EXHIBIT
3
TERM
SHEET
This
Term Sheet (the “Term Sheet”) is dated ______, 2007,
by________, a ___ corporation (the “Seller”) and CITIMORTGAGE, INC., a New York
corporation (the “Purchaser”).
This
Term
Sheet is made pursuant to the terms and conditions of the Mortgage Loan
Purchase
and Servicing Agreement (the “Agreement”), dated as of ________, 2007, among
Seller and the Purchaser, the provisions of which are incorporated here,
as such
terms may be modified or supplemented here. All capitalized terms
shall have the meanings ascribed to them in the Agreement, unless otherwise
defined here.
The
Purchaser hereby purchases from Seller and Seller hereby sells to the Purchaser,
all of Seller’s right, title and interest in and to the Mortgage Loans described
on the Mortgage Loan Schedule attached as Schedule I, in accordance
with the terms of the Agreement, as such terms may be supplemented or modified
by this Term Sheet.
1. DEFINITIONS
For
purposes of the Mortgage Loans to be sold pursuant to this Term Sheet,
the
following terms shall have the following meanings:
Aggregate
Principal Balance
(as
of
the Cut-Off Date): $
Aggregate
Principal Balance by Product Type: $
Closing
Date:
Cut-off
Date:
Initial
Weighted Average
Mortgage
Loan Rate:
Mortgage
Loan Product Type:
Purchase
Price Percentage:
Servicing
Fee:
Buyup/Buydown
Factor:
2. Additional
Closing Conditions:
a. In
addition to the conditions specified in the Agreement, the obligation of
the
Seller and the Purchaser is subject to the fulfillment of the following
additional conditions:
3. Additional
Loan Documents:
a. In
addition to the contents of the Mortgage File specified in the Agreement,
the
following documents shall be delivered with respect to the Mortgage
Loans:
4. [Additional]
[Modification of] Representations and Warranties:
a. [In
addition to the representations and warranties set forth in the Agreement,
as of
the date hereof, each of the Sellers makes the following additional
representations and warranties with respect to the Mortgage Loans:
TO
WITNESS THIS, the parties have caused their names to be signed by their
respective duly authorized officers as of the date first written
above.
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______________________________________
a
_____ corporation
By: _________________________________
Name:_________________________________
Title: _________________________________
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CITIMORTGAGE,
INC.
a
New York corporation
By: _________________________________
Name:_________________________________
Title: _________________________________
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EXHIBIT
4
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of
the
following items, which shall be delivered to the Purchaser:
Collateral
File Contents
Originals
(unless otherwise indicated) of the following Collateral documents shall
be
delivered to the Purchaser:
1. The
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of CitiMortgage, Inc.” and signed in the name of the Seller by an
authorized officer.
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2.
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The
original Mortgage/Deed of Trust with evidence of recording
thereon.
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3.
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The
original assignment of mortgage, prepared in
blank.
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4.
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The
originals of all intervening assignments of mortgage with evidence
of
recording thereon.
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5.
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The
original mortgagee title insurance
policy.
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6.
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MIC,
LGC or PMI certificate, if
applicable
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7.
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Modification,
Assumption and Buydown Agreements, if
applicable
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8.
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Power
of Attorney, if applicable
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Servicing
File Contents
Copies
of
the following documents shall be delivered to the Purchaser.
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1.
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Security
Instrument – Mortgage/Deed of Trust and applicable riders and
addendum
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2.
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Recorded
assignments (intermediate, if any)
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3.
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Note,
riders and allonges
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4.
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Title
insurance policy or Attorney’s Opinion with applicable
endorsements
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5.
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MIC,
LGC or PMI Certificate (if
applicable)
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6.
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Power
of Attorney (if applicable)
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7.
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Modification
and Buydown Agreements (if
applicable)
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8.
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Documentation
of full or partial releases of security or any waivers of
liability
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9.
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Assumption
documents and history
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10.
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Proof
of borrower name change (death certificate, marriage certificate,
etc.)
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11.
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Truth
in Lending and RESPA disclosures, including applicable agency
(OTS, OCC,
etc.) disclosures or customer receipt of variable rate
disclosures
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12.
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Closing
statement (HUD-1 including addendum), if
escrowed
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13.
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Escrow
assignments (if required)
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14.
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Name
affidavit (if applicable)
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15.
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Right
of Rescission (if applicable)
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16.
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Copy
of credit package including loan application, verifications of
income,
verifications of deposit, verifications of liabilities, credit
report,
transmittal summary, appraisal with all addendum, final inspection,
DU/LP
findings, etc.
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17.
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Proof
of Claim for any Mortgage Loan in
bankruptcy
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18.
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any
and all other origination, closing, pooling and servicing documentation
available but not listed above
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EXHIBIT
5
CUSTODIAL
AGREEMENT (IF APPLICABLE)
EXHIBIT
6
CUSTODIAL
ACCOUNT LETTER AGREEMENT
________________________
__, 2007
To:
(the
"Depository")
As
Seller
under the Mortgage Loan Purchase and Servicing Agreement, dated as of [MONTH]
1,
2007, we hereby authorize and request you to establish an account, as a
Custodial Account, to be designated as "[Initial Caps Name] in trust for
the
Purchaser and various Mortgagors, Fixed Rate and Adjustable Rate Conventional,
FHA Insured and VA Guaranteed Mortgage Loans." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Seller. 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.
[NAME
IN
CAPS]
By:
Name:
Title:
Date:
The
undersigned, as Depository, hereby certifies that the above-described account
has been established under Account Number ___________ at the office of
the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account
will be insured by the Federal Deposit Insurance Corporation through the
Bank
Insurance Fund ("BIF").
Depository
By:
Name:
Title:
Date:
EXHIBIT
7
ESCROW
ACCOUNT LETTER AGREEMENT
,
2007
(the
"Depository")
As
Seller
under the Mortgage Loan Purchase and Servicing Agreement, dated as of [MONTH]
1,
2007, we hereby authorize and request you to establish an account, as an
Escrow
Account, to be designated as "[Initial Caps Name] in trust for the Purchaser
and
various Mortgagors, Fixed Rate and Adjustable Rate Conventional, FHA Insured
and
VA Guaranteed Mortgage Loans." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Seller. 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.
[NAME
IN
CAPS]
By:
Name:
Title:
Date:
The
undersigned, as Depository, hereby certifies that the above-described account
has been established under Account Number ___________ at the office of
the
Depository indicated above, and agrees to honor withdrawals on such account
as
provided above. The full amount deposited at any time in the account
will be insured by the Federal Deposit Insurance Corporation through the
Bank
Insurance Fund ("BIF").
Depository
By:
Name:
Title:
Date:
EXHIBIT
8
SERVICING
ADDENDUM
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8.01
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Seller
to Act as Servicer.
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The
Seller, as independent contract servicer, shall service and administer
the
Mortgage Loans in accordance with this Agreement, with FNMA guidelines
for
Conventional Loans and with HUD and GNMA guidelines for FHA Loans and VA
Loans.
Seller shall have full power and authority, acting alone, to do or cause
to be
done any and all things in connection with such servicing and administration
which the Seller may deem necessary or desirable and consistent with the
terms
of this Agreement, including, in the case of FHA Loans and VA Loans, taking
all
actions that a mortgagee is permitted or required to take by the FHA or
the VA,
as the case may be.
Consistent
with the terms of this Agreement, the Seller 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
Seller's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Purchaser;
provided,
however, that the Seller shall not permit any modification with respect
to any
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive
the
payment thereof or of any principal or interest payments, reduce the outstanding
principal amount (except for actual payments of principal), make additional
advances of additional principal or extend the final maturity date on such
Mortgage Loan, or, in the case of FHA Loans and VA Loans, affect the FHA
Insurance Contract or VA Guaranty Agreement, as the case may be, with respect
to
such Mortgage Loan. Without limiting the generality of the foregoing,
the Seller shall continue, and is hereby authorized and empowered, to execute
and deliver on behalf of itself, and the Purchaser, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and
all other comparable instruments, with respect to the Mortgage Loans and
with
respect to the Mortgaged Property. If reasonably required by the
Seller, the Purchaser shall furnish the Seller with any powers of attorney
and
other documents necessary or appropriate to enable the Seller to carry
out its
servicing and administrative duties under this Agreement.
In
servicing and administering FHA Loans and VA Loans, the Seller shall comply
strictly with the National Housing Act, the FHA Regulations, the Servicemen's
Readjustment Act and the VA Regulations and administrative guidelines issued
thereunder or pursuant thereto (insofar as the same apply to any Mortgage
Loan)
and, to the extent permitted hereunder, promptly discharge all of the
obligations of the mortgagee thereunder and under each Mortgage including
the
timely giving of notices, the essence hereof being that the full benefits
of
each FHA Insurance Contract and VA Guaranty Agreement inure to the Seller
and
the Purchaser.
In
servicing and administering the Mortgage Loans, the Seller shall comply
with all
federal, state and local law and regulations and the Mortgage Loan Documents
and
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
mortgage
servicing practices of prudent lending institutions, the FHA Insurance
Contracts
and the VA Guaranty Agreements, where applicable, and the Purchaser's reliance
on the Seller.
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8.02
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Collection
of Mortgage Loan Payments/P&I
Advances.
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Continuously
from the date hereof, the Seller shall proceed diligently to collect all
payments due under each Mortgage Loan when the same shall become due and
payable
and shall, to the extent such procedures shall be consistent with this
Agreement
and the terms and provisions of any related Primary Insurance Policy, follow
such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. In the event
the
Mortgage Loan becomes eligible for rights under the Soldiers’ and Sailors’
Relief Act of 1940 and the Mortgage Interest Rate is reduced, Purchaser
shall
only be entitled to receive such reduced interest and Seller shall not
be
required to advance any additional interest during the period such Mortgage
Loan
is entitled to such rights. Further, the Seller shall take special care
in
ascertaining and estimating annual ground rents, taxes, assessments, water
rates, fire and hazard insurance premiums, mortgage insurance premiums,
and all
other charges that, as provided in the Mortgage, will become due and payable
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.
Not
later
than the close of business on the Business Day preceding each Distribution
Date,
the Seller shall deposit into the Custodial Account an amount equal to
all
P&I Advances. This deposit may be offset by amounts by funds held for a
future distribution not yet due on the current Distribution Date. The Seller
shall be entitled to be reimbursed from the Custodial Account for all P&I
Advances of its own funds made pursuant to this paragraph as provided in
paragraph 8.5. The obligation of the Seller to make such P&I Advances is
mandatory (unless Seller believes in good faith that such P&I Advances will
be non-recoverable), and, with respect to any Mortgage Loan or REO Property,
shall continue through the earlier of (i) the date on which all Liquidations
Proceeds, Condemnation Proceeds and Insurance Proceeds are received and
an REO
Disposition in connection with such Mortgage Loan is made and (ii) the
due date
of the last Monthly Payment due prior to the payment in full of such Mortgage
Loan.
Notwithstanding
anything herein to the contrary, no P&I Advance shall be required to be made
hereunder by the Seller if Seller determines in its good faith judgment
such
P&I Advance will not be ultimately recoverable from the Mortgagor or
Liquidation Proceeds.
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8.03
|
Realization
Upon Defaulted Mortgage Loans.
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The
Seller shall use its best efforts, consistent with the procedures that
the
Seller would use in servicing loans for its own account, to foreclose upon
or
otherwise comparably convert the ownership of such Mortgaged Properties as
come into and continue in default and as to which no satisfactory arrangements
can be made for collection of delinquent payments pursuant to
8.01. The Seller shall use its best efforts to realize upon defaulted
Mortgage Loans in such a manner as will maximize the receipt of principal
and
interest by the Purchaser, taking into account, among other things, the
timing
of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Seller shall not be required to expend its own funds toward
the
restoration of such property in excess of $2,000 unless it shall determine
in
its discretion (i) that such restoration will increase the proceeds
of
liquidation
of the related Mortgage Loan to Purchaser after reimbursement to itself for
such expenses, and (ii) that such expenses will be recoverable by the
Seller through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in 8.05. In the event that any
payment due under any Conventional 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 Seller shall take such action as it
shall deem to be in the best interest of the Purchaser. In the event
that any payment due under any Conventional Mortgage Loan remains
delinquent for a period of ninety (90) days or more, the Seller shall commence
foreclosure proceedings, provided that prior to commencing foreclosure
proceedings, the Seller shall notify the Purchaser in writing of the Seller's
intention to do so, and the Seller shall not commence foreclosure
proceedings if the Purchaser objects to such action within ten (10)
Business Days of receiving such notice. The Seller shall notify the
Purchaser in writing of the commencement of foreclosure
proceedings. In such connection, the Seller shall be responsible
for all costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the related
Mortgaged Property, as contemplated in 8.05. In the event that any payment
due
under any FHA Loan becomes delinquent, the Seller shall take all such actions
as
are in the best interests of the Purchaser and permitted under any applicable
FHA loss mitigation proceedings, including, but not limited to, requesting
the
FHA to accept an assignment of such FHA Loan, and, upon the direction of
the
Purchaser, commencing foreclosure proceedings. With respect to each VA
Loan, no
later than 120 days after such VA Loan becomes delinquent, the Seller shall
diligently seek to mitigate losses by utilizing all remedies available
in the VA
Regulations.
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8.04
|
Establishment
of Custodial Accounts; Deposits in Custodial
Accounts.
|
The
Seller shall segregate and hold all funds collected and received pursuant
to
each 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. The creation of any
Custodial Account shall be evidenced by a Custodial Account Letter Agreement
in
the form of Exhibit 6.
The
Seller shall deposit in the Custodial Account on a daily basis, and retain
therein the following payments and collections received by it subsequent
to the
Cut-off Date, or received by it prior to the Cut-off Date but allocable
to a
period subsequent thereto, other than in respect of principal and interest
on
the Mortgage Loans due on or before the Cut-off Date:
(i) all
payments on account of principal on the Mortgage Loans;
(ii) all
payments on account of interest on the Mortgage Loans;
(iii) all
Liquidation Proceeds;
(iv) all
Insurance Proceeds including amounts required to be deposited pursuant
to 8.10
and 8.11, 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 the Seller's normal servicing procedures, the loan documents
or applicable law;
(v) all
Condemnation Proceeds affecting any Mortgaged Property which are not
released to the Mortgagor in accordance with the Seller's normal servicing
procedures, the loan documents or applicable law;
(vi) all
proceeds of any Mortgage Loan repurchased in accordance with Section 7.03
or
7.04;
(vii) any
amounts required to be deposited by the Seller pursuant to 8.11 in connection
with the deductible clause in any blanket hazard insurance
policy. Such deposit shall be made from the Seller's own funds,
without reimbursement therefor;
(viii) any
amounts required to be deposited by the Seller in connection with any REO
Property pursuant to 8.13;
(ix) any
amounts required to be deposited in the Custodial Account pursuant to 8.19
or
8.20; and
(x) on
the day prior to the Distribution Date, all P&I Advances.
The
foregoing requirements for deposit in the Custodial Account shall be exclusive,
it being understood and agreed that, without limiting the generality of
the
foregoing, payments in the nature of late payment charges and assumption
fees,
to the extent permitted by 8.01, need not be deposited by the Seller in the
Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit
of
the Seller and the Seller shall be entitled to retain and withdraw such
interest
from the Custodial Account pursuant to 8.05(iii).
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8.05
|
Permitted
Withdrawals From the Custodial
Account.
|
The
Seller may, from time to time, withdraw from the Custodial Account for
the
following purposes:
(i) to
make distributions to the Purchaser in the amounts and in the manner provided
for in 8.15;
(ii) to
reimburse itself for unreimbursed Servicing Fees, Servicing Advances and
all
P&I Advances, the Seller's right to reimburse itself pursuant to this
subclause (ii) with respect to Servicing Advances on any Mortgage Loan
being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Seller from
the
Mortgagor or otherwise relating to the Mortgage Loan, it being understood
that,
in the case of such reimbursement, the Seller's right thereto shall be
prior to
the rights of the Purchaser, except that, where the Seller is required
to
repurchase a Mortgage Loan, pursuant to Section 7.03 or 7.04, the Seller's
right to such reimbursement shall be subsequent to the payment to the Purchaser
of the repurchase price pursuant to Section 7.03 or 7.04, as the case may
be,
and all other amounts required to be paid to the Purchaser with respect
to such
Mortgage Loans.;
(iii) to
pay to itself as servicing compensation (a) any interest earned on funds
in the
Custodial Account (all such interest to be withdrawn monthly not later
than each
Distribution Date) and (b) the Servicing Fee from that portion of any payment
or
recovery as to interest on a particular Mortgage Loan;
(iv) to
pay to itself with respect to each Mortgage Loan that has been repurchased
pursuant to Section 7.03 or 7.04 all amounts received thereon and not
distributed as of the date on which the related repurchase price is determined:
and
(v) to
withdraw amounts deposited in error.
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8.06
|
Establishment
of Escrow Accounts; Deposits in Escrow
Accounts.
|
The
Seller shall segregate and hold all funds collected and received pursuant
to
each Mortgage Loan which constitute 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. The
creation of any Escrow Account shall be evidenced by Escrow Account Letter
Agreement in the form of Exhibit 7.
The
Seller shall deposit in the Escrow Account or Accounts on a daily basis,
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 Insurance Proceeds which
are to
be applied to the restoration or repair of any Mortgaged
Property. The Seller shall make withdrawals therefrom only to effect
such payments as are required under this Agreement, and for such other
purposes
as shall be as set forth or in accordance with 8.08. The Seller 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 and, to the extent required by law, the
Seller
shall pay interest on escrowed funds to the Mortgagor notwithstanding that
the Escrow Account is non-interest bearing or that interest paid thereon
is
insufficient for such purposes.
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8.07
|
Permitted
Withdrawals From Escrow
Account.
|
Withdrawals
from the Escrow Account may be made by the Seller (i) to effect timely
payments
of ground rents, taxes, assessments, water rates, hazard insurance premiums,
Primary Insurance Policy premiums, if applicable, and comparable items,
(ii) to
reimburse the Seller for any Servicing Advance made by the Seller with
respect
to a related Mortgage Loan but only from amounts received on the related
Mortgage Loan which represent late payments or collections of Escrow Payments
thereunder, (iii) to refund to the Mortgagor any funds as may be determined
to
be overages, (iv) for transfer to the Custodial Account in accordance with
the terms of this Agreement, (v) for application to restoration or repair
of the
Mortgaged Property, (vi) to pay to the Seller, or to the 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 or (viii) in the case of FHA Loans and VA Loans, for transfer
to the
Custodial Account, fire and hazard insurance proceeds and Escrow Payments
with
respect to any Mortgage Loan where the FHA or VA, as the case may be, has
directed application of such funds as a credit against the proceeds of
the FHA
Insurance Contract or the VA Guaranty Agreement.
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|
8.08
|
Payment
of Taxes, Insurance and Other Charges; Maintenance of Primary
Insurance Policies; Collections
Thereunder.
|
With
respect to each Mortgage Loan, the Seller shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates
and other
charges which are or may become a lien upon the Mortgaged Property and
the
status of Primary Insurance Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment
of such
charges, including insurance renewal premiums and shall effect payment
thereof
prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such
purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated
and accumulated by the Seller in amounts sufficient for such purposes,
as
allowed under the terms of the Mortgage and applicable law. To
the extent that the Mortgage does not provide for Escrow Payments, the
Seller
shall determine that any such payments are made by the Mortgagor at the
time
they first become due. The Seller assumes full responsibility for the
timely payment of all such bills and shall effect timely payments of all
such
bills irrespective of the Mortgagor's faithful performance in the payment
of
same or the making of the Escrow Payments and shall make advances from
its own
funds to effect such payments.
The
Seller shall maintain in full force and effect, a Primary Insurance Policy,
issued by an insurer acceptable to FNMA and FHLMC, with respect to each
Mortgage
Loan for which such coverage is required. Such coverage shall be
maintained until the Loan-to-Value Ratio of the related Mortgage Loan is
reduced
to 75% or less or otherwise as required by federal, state or local
law. The Seller will not cancel or refuse to renew any Primary
Insurance Policy in effect on the Closing Date that is required to be kept
in
force under this Agreement unless a replacement Primary Insurance Policy
for
such cancelled or non- renewed policy is obtained from and maintained with
an
insurer acceptable to FNMA and FHLMC. The Seller shall not take any
action which would result in non-coverage under any applicable Primary
Insurance
Policy of any loss which, but for the actions of the Seller, would have
been
covered thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to 8.19, the Seller
shall
promptly notify the insurer under the related Primary Insurance Policy,
if any,
of such assumption or substitution of liability in accordance with the
terms of such policy and shall take all actions which may be required by
such
insurer as a condition to the continuation of coverage under the Primary
Insurance Policy. If such Primary Insurance Policy is terminated as a
result of such assumption or substitution of liability, the Seller shall
obtain
a replacement Primary Insurance Policy as provided above.
In
connection with its activities as servicer, the Seller agrees to prepare
and
present, on behalf of itself, and the Purchaser, claims to the insurer
under any
Primary Insurance Policy in a timely fashion in accordance with the terms
of
such policies and, in this regard, to take such action as shall be necessary
to
permit recovery under any Primary Insurance Policy respecting a
defaulted
Mortgage Loan. Pursuant to 8.04, any amounts collected by the Seller
under any Primary Insurance Policy shall be deposited in the Custodial
Account,
subject to withdrawal pursuant to 8.05.
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|
8.09
|
Transfer
of Accounts.
|
The
Seller may transfer the Custodial Account or the Escrow Account to a different
depository institution from time to time. Such transfer shall be made
only upon obtaining the consent of the Purchaser, which consent shall not
be unreasonably withheld. In any case, the Custodial Account and
Escrow Account shall be Eligible Accounts.
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8.10
|
Maintenance
of Hazard Insurance.
|
The
Seller shall cause to be maintained for each Mortgage Loan fire and hazard
insurance with extended coverage as is customary in the area where the
Mortgaged
Property is located in an amount which is at least equal to the lesser
of (i)
the amount necessary to fully compensate for any damage or loss to the
improvements which are a part of such property on a replacement cost basis
or (ii) the outstanding principal balance of the Mortgage Loan, in each
case in an amount not less than such amount as is necessary to prevent
the
Mortgagor and/or the Mortgagee from becoming a co-insurer. If the
Mortgaged Property is in an area identified on a Flood Hazard Boundary Map
or Flood Insurance Rate Map issued by the Flood Emergency Management Agency
as
having special flood hazards and such flood insurance has been made available,
the Seller will cause to be maintained a flood insurance policy meeting
the
requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage not less than the lesser of (i) the outstanding principal
balance of the Mortgage Loan or (ii) the maximum amount of insurance which
is
available under the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended. The Seller also shall maintain on
any REO Property, fire and hazard insurance with extended coverage in an
amount
which is at least equal to the lesser of (i) the maximum insurable value
of the
improvements which are a part of such property and (ii) the outstanding
principal balance of the related Mortgage Loan at the time it became an
REO
Property plus accrued interest at the Mortgage Interest Rate and related
Servicing Advances, liability insurance and, to the extent required and
available under the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, flood insurance in an amount as provided
above. Pursuant to 8.04, any amounts collected by the Seller under
any such policies other than amounts to be deposited in the Escrow Account
and
applied to the restoration or repair of the Mortgaged Property or REO
Property, or released to the Mortgagor in accordance with the Seller's
normal servicing procedures, shall be deposited in the Custodial Account,
subject to withdrawal pursuant to 8.05. Any cost incurred by the
Seller in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Purchaser, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of
such
Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance need be required by the Seller
of the
Mortgagor or maintained on property acquired in respect of the Mortgage
Loan,
other than pursuant to such applicable laws and regulations as shall at any
time be in force and as shall require such additional insurance. All
such policies shall be endorsed with standard mortgagee clauses with loss
payable to the Seller, or upon request to the Purchaser, and shall provide
for
at least thirty (30) days prior written notice of any cancellation, reduction
in
the
amount
of, or material change in, coverage to the Seller. The Seller shall
not interfere with the Mortgagor's freedom of choice in selecting either
his
insurance carrier or agent, provided, however, that the Seller shall not
accept any such insurance policies from insurance companies unless such
companies currently reflect a General Policy Rating of A:VI or better in
Best's
Key Rating Guide and are licensed to do business in the state wherein the
property subject to the policy is located.
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8.11
|
Maintenance
of Mortgage Impairment Insurance
Policy.
|
In
the
event that the Seller shall obtain and maintain a mortgage impairment or
blanket policy issued by an issuer that has a Best rating of A:VI insuring
against hazard losses on all of Mortgaged Properties securing the Mortgage
Loans, then, to the extent such policy provides coverage in an amount equal
to
the amount required pursuant to 8.10 and otherwise complies with all other
requirements of 8.10, the Seller shall conclusively be deemed to have satisfied
its obligations as set forth in8.10, it being understood and agreed that
such
policy may contain a deductible clause, in which case the Seller shall,
in the
event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with 8.10, and there shall
have been
one or more losses which would have been covered by such policy, deposit
in the
Custodial Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities
as servicer of the Mortgage Loans, the Seller agrees to prepare and present,
on
behalf of the Purchaser, claims under any such blanket policy in a timely
fashion in accordance with the terms of such policy. Upon request of
the Purchaser, the Seller shall cause to be delivered to the Purchaser a
certified true copy of such policy and a statement from the insurer thereunder
that such policy shall in no event be terminated or materially modified
without
thirty (30) days prior written notice to the Purchaser.
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8.12
|
Fidelity
Bond, Errors and Omissions
Insurance.
|
The
Seller shall maintain, at its own expense, a blanket fidelity bond and
an errors
and omissions insurance policy, with broad coverage with responsible companies
that would meet the requirements of FNMA or FHLMC on all officers, employees
or
other persons acting in any capacity with regard to the Mortgage Loan to
handle
funds, money, documents and papers relating to the Mortgage Loan. The
fidelity bond and errors and omissions insurance shall be in the form of
the
Mortgage Banker's Blanket Bond and shall protect and insure the Seller
against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons. Such fidelity bond
shall also protect and insure the Seller against losses in connection with
the
failure to maintain any insurance policies required pursuant to this Agreement
and the release or satisfaction of a Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of
this 8.12 requiring the fidelity bond and errors and omissions insurance
shall
diminish or relieve the Seller 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 FNMA in the FNMA Servicing Guide or by FHLMC in the FHLMC Sellers'
and Servicers' Guide. Upon request of the Purchaser, the Seller shall
cause to be delivered to the Purchaser a certified true copy of the fidelity
bond and insurance policy and a statement from the surety and the insurer
that
such fidelity bond or insurance policy shall in no event be terminated
or
materially modified without thirty (30) days' prior written notice to the
Purchaser.
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8.13
|
Title,
Management and Disposition of REO
Property.
|
In
the
event that title to the Mortgaged Property is acquired in foreclosure or
by deed
in lieu of foreclosure, the deed or certificate of sale shall be taken
in the
name of the person designated by the Purchaser, or in the event such person
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 Seller from an attorney
duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as
nominee
for the benefit of the Purchaser.
The
Seller shall either itself or through an agent selected by the Seller,
manage,
conserve, protect and operate each REO Property (and may temporarily rent
the
same) 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. If a REMIC election is or is to be made with respect to the
arrangement under which the Mortgage Loans and any REO property are held,
the
Seller shall manage, conserve, protect and operate each REO Property in
a manner
which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result
in the
receipt by such REMIC of any "income from non-permitted assets" within
the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" within the meaning of Section 860G(c)(2) of the Code. The
Seller shall cause each REO Property to be inspected promptly upon the
acquisition of title thereto and shall cause each REO Property to be inspected
at least monthly thereafter. The Seller shall make or cause to be
made a written report of each such inspection. Such reports shall be
retained in the Mortgage File and copies thereof shall be forwarded by
the
Seller to the Purchaser. The Seller 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 one year after title has been taken to such REO Property,
unless the Seller determines, and gives appropriate notice to the
Purchaser, that a longer period is necessary for the orderly liquidation of
such REO Property. If a period longer than one year is necessary to
sell any REO property, (i) the Seller 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
Seller as mortgagee, and a servicing agreement among the Seller and the
Purchaser shall be entered into with respect to such purchase money
mortgage. Notwithstanding the foregoing, if a REMIC election is made
with respect to the arrangement under which the Mortgage Loans and the
REO
Property are held, such REO Property shall be disposed of within two years
or
such other period as may be permitted under Section 860G(a)(8) of the
Code.
With
respect to each REO Property, the Seller shall segregate and hold all funds
collected and received in connection with the operation of the REO Property
separate and apart from its own funds or general assets and shall establish
and
maintain a separate REO Account for each REO Property in the form of a
non-interest bearing demand account, unless an Opinion of Counsel is obtained
by
the Seller to the effect that the classification as a grantor trust or
REMIC
for
federal income tax purposes of the arrangement under which the Mortgage
Loans
and the REO Property is held will not be adversely affected by holding
such
funds in another manner. Each REO Account shall be established with the
Seller
or, with the prior consent of the Purchaser, with a commercial bank, a
mutual
savings bank or a savings association.
The
Seller shall deposit or cause to be deposited, on a daily basis in each
REO
Account all revenues received with respect to the related REO Property
and shall
withdraw therefrom funds necessary for the proper operation, management
and
maintenance of the REO Property, including the cost of maintaining any
hazard insurance pursuant to 8.10 hereof and the fees of any managing agent
acting on behalf of the Seller. The Seller shall not be entitled to
retain interest paid or other earnings, if any, on funds deposited in such
REO
Account. On or before each Determination Date, the Seller shall
withdraw from each REO Account and deposit into the Custodial Account the
net
income from the REO Property on deposit in the REO Account.
The
Seller shall furnish to the Purchaser on each Distribution Date, an operating
statement for each REO Property covering the operation of each REO Property
for the previous month. Such operating statement shall be accompanied
by such other information as the Purchaser shall reasonably
request.
Each
REO
Disposition shall be carried out by the Seller at such price and upon such
terms
and conditions as the Seller deems to be in the best interest of the Purchaser
only with the prior written consent of the Purchaser. If as of the
date title to any REO Property was acquired by the Seller there were outstanding
unreimbursed Servicing Advances with respect to the REO Property, the Seller,
upon an REO Disposition of such REO Property, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances from
proceeds received in connection with such REO Disposition. The
proceeds from the REO Disposition, net of any payment to the Seller as
provided
above, shall be deposited in the REO Account and shall be transferred to
the
Custodial Account on the Determination Date in the month following receipt
thereof for distribution on the succeeding Distribution Date. At
Purchaser’s sole discretion, Purchaser may notify Seller to transfer servicing
on any REO Property to Purchaser or its designee. In the event of such
transfer,
Seller obligations to service such REO Property shall terminate upon such
transfer.
8.14
Notification of Adjustments.
On
each
Adjustment Date, the Seller shall make interest rate adjustments for each
Mortgage Loan in compliance with the requirements of the related Mortgage
and
Mortgage Note. The Seller shall execute and deliver the notices required
by each
Mortgage and Mortgage Note regarding interest rate adjustments. The Seller
also
shall provide timely notification to the Purchaser of all applicable data
and
information regarding such interest rate adjustments and the Seller's methods
of
implementing such interest rate adjustments. Upon the discovery by the
Seller or
the Purchaser that the Seller has failed to adjust a Mortgage Interest
Rate or a
Monthly Payment pursuant to the terms of the related Mortgage Note and
Mortgage,
the Seller shall immediately deposit in the Custodial Account from its
own funds
the amount of any interest loss caused thereby without reimbursement
therefor.
On
each Distribution Date,
Seller shall remit by wire transfer of immediately available funds to the
account designated in writing by Purchaser (a) all amounts deposited in
the
Custodial Account as of the close of business on the preceding Determination
Date (net of all amounts withdrawable therefrom pursuant to 8.05), plus
(b) all
P&I Advances, if any, which Seller is obligated to distribute, minus (c)
any
amounts attributable to Monthly Payments collected but due on a Due Date
or
Dates subsequent to the related Due Period, minus (d) any amounts attributable
to principal prepayments received after the last day of the calendar month
preceding the month of the Distribution Date, which amounts shall be remitted
on
the following Distribution Date, together with interest up to the Mortgage
Interest Rate but not more than the aggregate Servicing Fee in connection
with
such principal prepayments minus (e) any amounts attributable to reimbursement
for unreimbursed Servicing Advances, advance of Seller funds, and unpaid
Servicing Fees, and minus (f) any amounts attributable to reimbursement
for
subsequent trailing bills related to a previously disposed of REO Property
in
which distribution of net cash proceeds has occurred.
To
the extent that the amount of a
remittance or distribution to Purchaser made hereunder is in greater than
the
amount thereof properly to be remitted pursuant to the terms of this Agreement,
Seller will give prompt written notice thereof to Purchaser after Seller's
discovery thereof, including the amount of such remittance or distribution
that
was paid in error. If, by the Distribution Date immediately following such
notice, Purchaser has not reimbursed the Custodial Account or Seller, as
applicable, for the amount of such erroneous remittance or distribution
(without
any liability on the part of Purchaser for interest thereon), Seller shall
be
entitled to withhold such amount from the remittance to be made on such
Distribution Date.
With
respect to any remittance received by the Purchaser on or after the second
Business Day following the Business Day on which such payment was due,
the
Seller shall pay to the Purchaser interest on any such late payment at
an annual
rate equal to the rate of interest as is publicly announced from time to
time at
its principal office by Citibank, N.A., New York, New York, as its prime
lending
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 paid by the Seller to the Purchaser 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 such late payment. The payment by the Seller of
any such interest shall not be deemed an extension of time for payment
or a
waiver of any Event of Default by the Seller.
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8.16
|
Statements
to the Purchaser.
|
Not
later
than each Distribution Date, the Seller will furnish to the Purchaser a
Monthly
Remittance Advice in the form shown in Exhibit 8-1 hereto, as to the preceding
remittance and the period ending on the preceding Determination Date which
shall include period-end loan level and summary trial balance of unpaid
principal balances and weighted average interest rates.
Not
later than each Distribution Date,
the Seller will furnish to the Purchaser a monthly delinquency report as
to the
preceding remittance and the period ending on the preceding Determination
Date.
This report will show delinquency by aging category.
In
addition, not more than sixty (60) days after the end of each calendar
year, the
Seller shall furnish to each Person who was the Purchaser at any time during
such calendar year, (i) as to the aggregate of remittances for the applicable
portion of such year, an annual statement in accordance with the
requirements of applicable federal income tax law, and (ii) listing of the
principal balances of the Mortgage Loans outstanding at the end of
such calendar year.
The
Seller shall prepare and file any and all tax returns, information statements
or
other filings required to be delivered to any governmental taxing authority
or
to any Purchaser pursuant to any applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby. In
addition, the Seller 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 any Purchaser may reasonably request from time
to time.
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8.17
|
Real
Estate Owned Reports.
|
Together
with the statement furnished pursuant to 8.16, with respect to any REO
Property,
the Seller shall furnish to the Purchaser a statement covering the Seller'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,
together with the operating statement. Such statement shall be
accompanied by such other information as the Purchaser shall reasonably
request.
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|
8.18
|
Liquidation
Reports.
|
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by
the
Purchaser pursuant to a deed-inlieu of foreclosure, the Seller shall submit
to the Purchaser a liquidation report with respect to such Mortgaged
Property.
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|
8.19
|
Assumption
Agreements.
|
The
Seller shall, to the extent it has knowledge of any conveyance or prospective
conveyance by any Mortgagor of the Mortgaged Property (whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
or
is to remain liable under the Mortgage Note and/or the Mortgage), exercise
its
rights to accelerate the maturity of such Mortgage Loan under any "due-on-sale"
clause applicable thereto; provided, however, that the Seller shall not
exercise
any 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
Primary
Insurance Policy, if any. If the Seller reasonably believes it is
unable under applicable law to enforce such "due-on-sale" clause, the Seller
shall enter into an assumption agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed, pursuant to which
such
person becomes liable under the Mortgage Note and, to the extent permitted
by
applicable state law, the Mortgagor remains liable thereon. Where an
assumption is allowed pursuant to this 8.01, the Seller, with the prior
written
consent of the insurer under the Primary Insurance Policy, if any, is authorized
to enter into a substitution of liability agreement with the
person
to
whom the Mortgaged Property has been conveyed or is proposed to be conveyed
pursuant to which the original Mortgagor is released from liability and
such
Person is substituted as Mortgagor and becomes liable under the related
Mortgage
Note. Any such substitution of liability agreement shall be in lieu
of an assumption agreement.
In
connection with any such assumption or substitution of liability, the Seller
shall follow the underwriting practices and procedures of prudent mortgage
lenders in the state in which the related Mortgaged Property is
located. With respect to an assumption or substitution of liability,
Mortgage Interest Rate, the amount of the Monthly Payment, and the final
maturity date of such Mortgage Note may not be changed. The Seller
shall notify the Purchaser that any such substitution of liability or assumption
agreement has been completed by forwarding to the Purchaser the original of
any such substitution of liability or assumption agreement, which
document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent
as all
other documents and instruments constituting a part thereof. Any fee
collected by the Seller for entering into an assumption or substitution
of
liability agreement in excess of 1% of the outstanding principal balance
of the
Mortgage Loan shall be deposited in the Custodial Account pursuant to
8.04.
Notwithstanding
the foregoing paragraphs of this Section or any other provision of this
Agreement, the Seller shall not be deemed to be in default, breach or any
other
violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Seller may
be
restricted by law from preventing, for any reason whatsoever. For
purposes of this 8.19, the term "assumption" is deemed to also include a
sale of the Mortgaged Property subject to the Mortgage that is not accompanied
by an assumption or substitution of liability agreement.
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|
8.20
|
Satisfaction
of Mortgages and Release of Mortgage
Files.
|
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Seller of a
notification that payment in full will be escrowed in a manner customary
for
such purposes, the Seller will immediately notify the Purchaser by a
certification of a Servicing Officer, which certification shall include
a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Custodial
Account pursuant to 8.04 have been or will be so deposited, and shall
request execution of any document necessary to satisfy the Mortgage Loan
and
delivery to it of the portion of the Mortgage File held by the Purchaser
or the
Purchaser's Designee. Upon receipt of such certification and request,
the Purchaser, shall promptly release the related mortgage documents to
the
Seller and the Seller shall prepare and process any satisfaction or
release. No expense incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Purchaser.
In
the
event the Seller satisfies or releases a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage or should it
otherwise prejudice any right the Purchaser may have under the mortgage
instruments, the Seller, upon written demand, shall repurchasethe Mortgage
Loan in accordance with Subsection 7.03 hereof.. The Seller shall maintain
the
fidelity bond insuring the Seller against any loss it may sustain with
respect
to any Mortgage Loan not satisfied in accordance with the procedures set
forth
herein.
From
time
to time and as appropriate for the service or foreclosure of the Mortgage
Loan,
including for this purpose collection under any Primary Insurance Policy,
the
Purchaser shall, upon request of the Seller and delivery to the Purchaser
of a
servicing receipt signed by a Servicing Officer, release the requested
portion
of the Mortgage File held by the Purchaser to the Seller. Such
servicing receipt shall obligate the Seller to return the related Mortgage
documents to the Purchaser when the need therefor by the Seller no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Custodial
Account or the Mortgage File or such document has been delivered to an
attorney,
or to a public trustee or other public official as required by law, for
purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the
Seller
has delivered to the Purchaser a certificate of a Servicing Officer certifying
as to the name and address of the Person to which such Mortgage File or
such
document was delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer
stating that such Mortgage Loan was liquidated, the servicing receipt shall
be
released by the Purchaser to the Seller.
With
respect to some or all of the Mortgage Loans, the Purchaser, at its sole
option,
upon 30 days’ prior written notice to Seller may effect one or more whole loan
transfers with respect to Mortgage Loans purchased on any Closing Date,
retaining the Seller as the servicer.
With
respect to some or all of the Mortgage Loans, the Purchaser may, by giving
thirty (30) days’ prior written notice thereof to Seller, effect one or more
securitizations through FNMA. A securitization through FNMA may be effected
by
the sale by the Purchaser to Fannie Mae of such Mortgage Loans retaining
the
Servicer as the servicer. Upon receipt of
such
notice, the Seller shall reasonably cooperate with the Purchaser and FNMA
to
effect the requested securitization. Sellers shall deliver to FNMA, on
behalf of
the Purchaser, data regarding one or more pools of Mortgage Loans for
securitization into mortgage-backed securities (“MBS”), provided that each such
pool shall consist of Mortgage Loans identified by the Purchaser meeting
the
requirements of FNMA. Promptly after any MBS has been structured with FNMA,
the
Purchaser shall inform Seller of the terms of the MBS. The method of
delivery of such Mortgage Loans to FNMA on behalf of the Purchaser shall
comply
with FNMA's requirements. All customary fees (including but not
limited to any guaranty fees) associated with the securitization shall
be borne
by Seller. Seller will instruct FNMA to deliver the related MBS directly
to
Purchaser, provided the Purchaser provides such Seller with applicable
wiring
instructions.
In
connection with any securitization, Seller shall provide Purchaser with
any and
all information and appropriate verification of information regarding the
Mortgage Loans being securitized that is in Seller’s possession or control and
is reasonably necessary in order to effect such securitization. In
addition, in connection with each securitization permitted hereunder, upon
the
request of the Purchaser, Seller shall provide an officer’s certificate to the
effect that the representations and warranties made by such Seller in Section
7.01 are true and correct as of the date of such certificate. The
information required to be supplied by a Seller will be that which
is
customary
for the issuance of MBS by FNMA. Seller agrees to cooperate with the Purchaser
and promptly supply any information which the Purchaser determines is required
to be disclosed. Purchaser shall provide Seller with all drafts of the
applicable information when produced and shall revise the information in
accordance with such Seller’s reasonable comments to correct any information
therein at the Purchaser’s cost. Seller (i) will indemnify and hold harmless the
transferee under any permitted securitization, the Purchaser and each Person,
if
any, who controls such transferee, if any, or the Purchaser within the
meaning
of the Securities Act of 1933, as amended (an “Indemnified Party”),
against any losses, claims, damages or liabilities to which such Indemnified
Party may become subject, under the Securities Act of 1933, as amended,
or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon any untrue statement of
any
material fact contained in Seller’s information included in the prospectus
supplement prepared in connection with any permitted securitization
(collectively, the “Disclosure Documents”) and (ii) will reimburse each
Indemnified Party for any legal or other expenses reasonably incurred by
such
Indemnified Party in connection with investigating or defending any such
loss,
claim, damage, liability or action. Seller agrees to execute an indemnification
agreement in connection with any securitization containing the foregoing
indemnity.
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|
8.23
|
Compliance
with Regulation AB.
|
Seller,
upon request from Purchaser, shall provide the information to Purchaser
listed
on Exhibit 10.
SCHEDULE
I
MORTGAGE
LOAN SCHEDULE
REMITTANCE
REPORT 8-1
The
Remittance Report shall contain the following information:
Mortgage
Loan Number
LPI
Date
Scheduled
P&I
Scheduled
Mortgage Interest Rate
Scheduled
S/F Rate
Unpaid
Principal Balance
Ending
Scheduled Balance
Scheduled
Principal
Unscheduled
Principal
Scheduled
Interest
EXHIBIT
9
FORM
OF COMMITMENT LETTER
[name]
[address]
RE: Commitment
Letter Outlining Terms of Purchase of $_______ of _____________
Dear
[name]:
_______
(a “Seller” and “Servicer”) hereby agree to sell, and CitiMortgage, Inc.
(“Purchaser”) hereby agrees to purchase, the _____ mortgage loans described on
Exhibit A hereto (the “Mortgage Loans”) In accordance with the Mortgage Loan
Purchase and Servicing Agreement dated ____, 2007 (the “Agreement”) by and
between Seller and Purchaser. The Mortgage Loans will be sold on a whole
loan
basis servicing retained by the Seller. The purchase and sale of the Mortgage
Loans shall be subject to the terms and conditions set forth in this letter
(the
“Commitment Letter”).
Amount
of
|
Mortgage
Loans:
|
The
aggregate principal balance of the Mortgage Loans, as of the
Cut-off Date,
will be $________
|
|
Balance
by Product Type:
|
The
aggregate principal balance of the Mortgage Loans, as of the
Cut-Off Date,
will be $____ for (product type), $____ for (product type) and
$__ for
product type.
|
|
Purchase
Price
|
The
Purchase Price for each Mortgage Loan listed on the Exhibit A
the Purchase
Price Percentage multiplied by the unpaid principal balance as
of the
Cut-off Date.
|
|
Purchase
Price Percentage:
|
______%
|
|
Buyup/Buydown
Factor:
|
_______
|
|
Payment
of Purchase Price:
|
The
Purchase Price shall be paid to the Seller in immediately available
Federal Funds by Wire Transfer on the Closing Date by 3:00 p.m.
EDT.
|
Initial
Weighted Average
Mortgage
Loan
Rate: The
initial weighted average Mortgage Loan rate will be $___-
|
Closing
Date:
|
The
date on which the Mortgage Loans will be sold by the Seller to
the
Purchaser which shall be _____________ or such other date as
mutually
agreed upon by the Seller and the
Purchaser.
|
Paid-To
Date: ________________
Cut-off
Date: ________
or such other date as mutually agreed upon by the Seller
and the Purchaser.
|
Mortgage
Loans:
|
Each
Mortgage Loan is secured by a first lien on a residential 1-4
family
property located in ____.
|
|
Mortgage
Loans:
|
Purchaser
shall have the right to conduct an underwriting review of mortgage
files
relating to the Mortgage Loans to ensure conformity with the
Agreement (as
defined below). Such review (or waiver of review if Purchaser
so chooses) shall not affect the Seller’s representations and warranties
regarding the Mortgage Loans in the
Agreement.
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|
Underwriting:
|
Each
Mortgage Loan was underwritten in accordance with underwriting
standards
which are acceptable to FNMA, FHLMC and GNMA, as applicable,
in accordance
with Seller’s guidelines in effect at the time the Mortgage Loan was
originated. The Mortgage Loan is saleable to FNMA, FHLMC and
GNMA, as
applicable, on a non-recourse basis. The Mortgage Note and Mortgage
are on
forms acceptable to FNMA and FHLMC.
|
|
Delinquencies:
|
All
Mortgage Loans are current and no Mortgage Loan has been more
than 30 days
delinquent in the last twelve months as of the Closing
Date.
|
|
Cooperation:
|
Purchaser
and Seller shall each cooperate with the other and each shall
use their
best efforts to meet targeted deadlines for a timetable established
by
Seller in connection with the sale of the Mortgage
Loans.
|
|
|
Please
acknowledge your agreement and acceptance of this Commitment
Letter on or
before _______ by signing and faxing the executed document to
the
attention of:
|
{Name}
{Address}
{Fax
Number}
|
Very
truly yours,
{Name}
|
|
This
Commitment Letter is hereby Agreed to and Accepted on __________,
2007:
CitiMortgage,
Inc.
|
|
Name:
Title:
|
Name:
Kent Slough
|
| |
|
Title: Vice
President
|
|
|
EXHIBIT
A
Mortgage
Loans
The
Mortgage Loan listing shall be grouped by product and
include the loan number, current unpaid principal balance, the current
note rate
and the purchase price. The listing shall total by product and in the
aggregate.
EXHIBIT
10
Regulation
AB Requirements
DEFINED
TERMS
Commission: The
United States Securities and Exchange Commission.
Seller
Information: As defined in this Exhibit.
Depositor: The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Exchange
Act. The Securities Exchange Act of 1934, as
amended.
Qualified
Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such Mortgage Loans were originated pursuant to an
agreement between the Seller and such Person that contemplated that such
Person
would underwrite mortgage loans from time to time, for sale to the Seller,
in
accordance with underwriting guidelines designated by the Seller (“Designated
Guidelines”) or guidelines that do not vary materially from such Designated
Guidelines; (ii) such Mortgage Loans were in fact underwritten as described
in
clause (i) above and were acquired by the Seller within 180 days after
origination; (iii) either (x) the Designated Guidelines were, at the time
such
Mortgage Loans were originated, used by the Seller in origination of mortgage
loans of the same type as the Mortgage Loans for the Seller’s own account or (y)
the Designated Guidelines were, at the time such Mortgage Loans were
underwritten, designated by the Seller on a consistent basis for use by
lenders
in originating mortgage loans to be purchased by the Seller; and (iv) the
Seller
employed, at the time such Mortgage Loans were acquired by the Seller,
pre-purchase or post-purchase quality assurance procedures (which may involve,
among other things, review of a sample of mortgage loans purchased during
a
particular time period or through particular channels) designed to ensure
that
Persons from which it purchased mortgage loans properly applied the underwriting
criteria designated by the Seller.
Reconstitution: Any
Securitization Transaction or Whole Loan Transfer.
Regulation
AB: Subpart 229.1100 – Asset Backed Securities (Regulation
AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided
by
the Commission in the adopting release (Asset-Backed Securities, Securities
Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff
of the Commission, or as may be provided by the Commission or its staff
from
time to time.
Securities
Act: The Securities Act of 1933, as
amended.
Securitization
Transaction. Any transaction involving either (1) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly
to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance
of
publicly offered or privately placed, rated or unrated securities, the
payments
on which are determined primarily by reference to one or more portfolios
of
residential mortgage loans consisting, in whole or in part, of some or
all of
the Mortgage Loans.
Servicer: As
defined in this Exhibit.
Servicing
Criteria: The “servicing criteria” set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Static
Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or
more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Seller or a
Subservicer.
Subservicer: Any
Person that services Mortgage Loans on behalf of the Seller or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Seller under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
Third-Party
Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Whole
Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
Section
1.01. Intent of the Parties;
Reasonableness.
The
Purchaser and the Seller
acknowledge and agree that the purpose of this Exhibit to this Agreement
is to
facilitate compliance by the Purchaser and any Depositor with the provisions
of
Regulation AB and related rules and regulations of the Commission. Although
Regulation AB is applicable by its terms only to offerings of asset-backed
securities that are registered under the Securities Act, the Seller acknowledges
that investors in privately offered securities may require that the Purchaser
or
any Depositor provide comparable disclosure in unregistered
offerings. References in this Agreement to compliance with Regulation
AB include provision of comparable disclosure in private offerings.
Neither
the Purchaser nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder
(or the
provision in a private offering of disclosure comparable to that required
under
the Securities Act). The Seller acknowledges that interpretations of
the requirements of Regulation AB may change over time, whether due to
interpretive guidance provided by the Commission or its staff, consensus
among
participants in the asset-backed securities markets, advice of counsel,
or
otherwise, and agrees to comply with requests made by the Purchaser or
any
Depositor in good faith for delivery of information under these provisions
on
the basis of evolving interpretations of Regulation AB. In connection
with any Securitization Transaction, the Seller shall cooperate fully with
the
Purchaser to deliver to the Purchaser (including any of its assignees or
designees) and any Depositor, any and all statements, reports, certifications,
records and any other information necessary in the good faith determination
of
the Purchaser or any Depositor to permit the Purchaser or such Depositor
to
comply with the provisions of Regulation AB, together with such disclosures
relating to the Seller, any Subservicer, any Third-Party Originator and
the
Mortgage Loans, or the servicing of the Mortgage Loans, reasonably believed
by
the Purchaser or any Depositor to be necessary in order to effect such
compliance.
The
Purchaser (including any of its assignees or designees) shall cooperate
with the
Seller by providing timely notice of requests for information under these
provisions and by reasonably limiting such requests to information required,
in
the Purchaser’s reasonable judgment, to comply with Regulation AB.
Section
1.02. Additional Representations and Warranties of the
Seller.
(a) The
Seller shall be deemed to represent to the Purchaser and to any Depositor,
as of
the date on which information is first provided to the Purchaser or any
Depositor under Section 1.03 that, except as disclosed in writing to the
Purchaser or such Depositor prior to such date: (i) the Seller is not aware
and
has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other securitization
due to
any act or failure to act of the Seller; (ii) the Seller has not
been
terminated
as servicer in a residential mortgage loan securitization, either due to
a
servicing default or to application of a servicing performance test or
trigger;
(iii) no material noncompliance with the applicable servicing criteria
with
respect to other securitizations of residential mortgage loans involving
the
Seller as servicer has been disclosed or reported by the Seller; (iv) no
material changes to the Seller’s policies or procedures with respect to the
servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Seller’s financial
condition that could have a material adverse effect on the performance
by the
Seller of its servicing obligations under this Agreement or any Reconstitution
Agreement; (vi) there are no material legal or governmental proceedings
pending
(or known to be contemplated) against the Seller, any Subservicer or any
Third-Party Originator; and (vii) there are no affiliations, relationships
or
transactions relating to the Seller, any Subservicer or any Third-Party
Originator with respect to any Securitization Transaction and any party
thereto
identified by the related Depositor of a type described in Item 1119 of
Regulation AB.
(b) If
so requested by the Purchaser or any Depositor on any date following the
date on
which information is first provided to the Purchaser or any Depositor under
Section 1.03, the Seller shall, within five Business Days following such
request, confirm in writing the accuracy of the representations and warranties
set forth in paragraph (a) of this Section or, if any such representation
and
warranty is not accurate as of the date of such request, provide reasonably
adequate disclosure of the pertinent facts, in writing, to the requesting
party.
Section
1.03. Information to Be Provided by the
Seller.
In
connection with any Securitization Transaction the Seller shall (i) within
five
Business Days following request by the Purchaser or any Depositor, provide
to
the Purchaser and such Depositor (or, as applicable, cause each Third-Party
Originator and each Subservicer to provide), in writing and in form and
substance reasonably satisfactory to the Purchaser and such Depositor,
the
information and materials specified in paragraphs (a), (b), (c) and (f)
of this
Section, and (ii) as promptly as practicable following notice to or discovery
by
the Seller, provide to the Purchaser and any Depositor (in writing and
in form
and substance reasonably satisfactory to the Purchaser and such Depositor)
the
information specified in paragraph (d) of this Section.
(a) If
so requested by the Purchaser or any Depositor, the Seller shall provide
such
information regarding (i) the Seller, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
or
(ii) each Third-Party Originator, and (iii) as applicable, each Subservicer,
as
is requested for the purpose of compliance with Items 1103(a)(1), 1105,
1110,
1117 and 1119 of Regulation AB. Such information shall include, at a
minimum:
(A) the
originator’s form of organization;
(B) a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description
shall include a discussion of the originator’s experience in originating
mortgage loans of a similar type as the Mortgage Loans; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the good faith judgment of the Purchaser
or
any Depositor, to an analysis of the performance of the Mortgage Loans,
including the originators’ credit-granting or underwriting criteria for mortgage
loans of similar type(s) as the Mortgage Loans and such other information
as the
Purchaser or any Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a
description of any material legal or governmental proceedings pending (or
known
to be contemplated) against the Seller, each Third-Party Originator and
each
Subservicer; and
(D) a
description of any affiliation or relationship between the Seller, each
Third-Party Originator, each Subservicer and any of the following parties
to a
Securitization Transaction, as such parties are identified to the Seller
by the
Purchaser or any Depositor in writing in advance of such Securitization
Transaction:
(7) any
significant obligor;
(8) any
enhancement or support provider; and
(9) any
other material transaction party.
(b) If
so requested by the Purchaser or any Depositor, the Seller shall provide
(or, as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage
Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information
shall be prepared by the Seller (or Third-Party Originator) on the basis
of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably available to
the Seller (or Third-Party Originator) Static Pool Information with respect
to
more than one mortgage loan type, the Purchaser or any Depositor shall
be
entitled to specify whether some or all of such information shall be provided
pursuant to this paragraph. The content of such Static Pool
Information may be in the form customarily provided by the Seller, and
need not
be customized for the Purchaser or any Depositor. Such Static Pool
Information for each vintage origination year or prior securitized pool,
as
applicable, shall be presented in increments no less frequently than quarterly
over the life of the mortgage loans included in the vintage origination
year or
prior securitized pool. The most recent periodic
increment
must be as of a date no later than 135 days prior to the date of the prospectus
or other offering document in which the Static Pool Information is to be
included or incorporated by reference. The Static Pool Information
shall be provided in an electronic format that provides a permanent record
of
the information provided, such as a portable document format (pdf) file,
or
other such electronic format reasonably required by the Purchaser or the
Depositor, as applicable.
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an
omission
to include therein information required to be provided pursuant to such
paragraph), the Seller shall provide corrected Static Pool Information
to the
Purchaser or any Depositor, as applicable, in the same format in which
Static
Pool Information was previously provided to such party by the
Seller.
If
so
requested by the Purchaser or any Depositor, the Seller shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense
of the
requesting party (to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon procedures
letters
of certified public accountants reasonably acceptable to the Purchaser
or
Depositor, as applicable, pertaining to Static Pool Information relating
to
prior securitized pools for securitizations closed on or after January
1, 2007
or, in the case of Static Pool Information with respect to the Seller’s or
Third-Party Originator’s originations or purchases, to calendar months
commencing January 1, 2007, as the Purchaser or such Depositor shall reasonably
request. Such letters shall be addressed to and be for the benefit of
such parties as the Purchaser or such Depositor shall designate, which
may
include, by way of example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect
to a
Securitization Transaction. Any such statement or letter may take the
form of a standard, generally applicable document accompanied by a reliance
letter authorizing reliance by the addressees designated by the Purchaser
or
such Depositor.
(c) If
so requested by the Purchaser or any Depositor, the Seller shall provide
such
information regarding the Seller, as servicer of the Mortgage Loans, and
each
Subservicer (each of the Seller and each Subservicer, for purposes of this
paragraph, a “Servicer”), as is requested for the purpose of compliance with
Item 1108 of Regulation AB. Such information shall include, at a
minimum:
(A) the
Servicer’s form of organization;
(B) a
description of how long the Servicer has been servicing residential mortgage
loans; a general discussion of the Servicer’s experience in servicing assets of
any type as well as a more detailed discussion of the Servicer’s experience in,
and procedures for, the servicing function it will perform under this Agreement
and any Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer’s portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the
Servicer
that may be material, in the good faith judgment of the Purchaser or any
Depositor, to any analysis of the servicing of the
Mortgage
Loans or the related asset-backed securities, as applicable, including,
without
limitation:
(1) whether
any prior securitizations of mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing during the three-year
period immediately preceding the related Securitization
Transaction;
(2) the
extent of outsourcing the Servicer utilizes;
(3) whether
there has been previous disclosure of material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential
mortgage
loans involving the Servicer as a servicer during the three-year period
immediately preceding the related Securitization Transaction;
(4) whether
the Servicer has been terminated as servicer in a residential mortgage
loan
securitization, either due to a servicing default or to application of
a
servicing performance test or trigger; and
(5) such
other information as the Purchaser or any Depositor may reasonably request
for
the purpose of compliance with Item 1108(b)(2) of Regulation AB;
(C) a
description of any material changes during the three-year period immediately
preceding the related Securitization Transaction to the Servicer’s policies or
procedures with respect to the servicing function it will perform under
this
Agreement and any Reconstitution Agreements for mortgage loans of a type
similar
to the Mortgage Loans;
(D) information
regarding the Servicer’s financial condition, to the extent that there is a
material risk that an adverse financial event or circumstance involving
the
Servicer could have a material adverse effect on the performance by the
Seller
of its servicing obligations under this Agreement or any Reconstitution
Agreement;
(E) information
regarding advances made by the Servicer on the Mortgage Loans and the Servicer’s
overall servicing portfolio of residential mortgage loans for the three-year
period immediately preceding the related Securitization Transaction, which
may
be limited to a statement by an authorized officer of the Servicer to the
effect
that the Servicer has made all advances required to be made on residential
mortgage loans serviced by it during such period, or, if such statement
would
not be accurate, information regarding the percentage and type of advances
not
made as required, and the reasons for such failure to advance;
(F) a
description of the Servicer’s processes and procedures designed to address any
special or unique factors involved in servicing loans of a similar type
as the
Mortgage Loans;
(G) a
description of the Servicer’s processes for handling delinquencies, losses,
bankruptcies and recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts; and
(H) information
as to how the Servicer defines or determines delinquencies and charge-offs,
including the effect of any grace period, re-aging, restructuring,
partial
payments
considered current or other practices with respect to delinquency and loss
experience.
(d) If
so requested by the Purchaser or any Depositor for the purpose of satisfying
its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Seller shall (or shall cause each Subservicer
and
Third-Party Originator to) (i) notify the Purchaser and any Depositor in
writing
of (A) any material litigation or governmental proceedings pending against
the
Seller, any Subservicer or any Third-Party Originator and (B) any affiliations
or relationships that develop following the closing date of a Securitization
Transaction between the Seller, any Subservicer or any Third-Party Originator
and any of the parties specified in clause (D) of paragraph (a) of this
Section
(and any other parties identified in writing by the requesting party) with
respect to such Securitization Transaction, and (ii) provide to the Purchaser
and any Depositor a description of such proceedings, affiliations or
relationships.
(e) As
a condition to the succession to the Seller or any Subservicer as servicer
or
subservicer under this Agreement or any Reconstitution Agreement by any
Person
(i) into which the Seller or such Subservicer may be merged or consolidated,
or
(ii) which may be appointed as a successor to the Seller or any Subservicer,
the
Seller shall provide to the Purchaser and any Depositor, at least [15]
calendar
days prior to the effective date of such succession or appointment, (x)
written
notice to the Purchaser and any Depositor of such succession or appointment
and
(y) in writing and in form and substance reasonably satisfactory to the
Purchaser and such Depositor, all information reasonably requested by the
Purchaser or any Depositor in order to comply with its reporting obligation
under Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
(f) In
addition to such information as the Seller, as servicer, is obligated to
provide
pursuant to other provisions of this Agreement, if so requested by the
Purchaser
or any Depositor, the Seller shall provide such information regarding the
performance or servicing of the Mortgage Loans as is reasonably required
to
facilitate preparation of distribution reports in accordance with Item
1121 of
Regulation AB. Such information shall be provided concurrently with
the monthly reports otherwise required to be delivered by the servicer
under
this Agreement, commencing with the first such report due not less than
ten
Business Days following such request.
Section
1.04. Servicer Compliance Statement.
On
or
before March 1 of each calendar year, commencing in 2007, the Seller shall
deliver to the Purchaser and any Depositor a statement of compliance addressed
to the Purchaser and such Depositor and signed by an authorized officer
of the
Seller, to the effect that (i) a review of the Seller’s activities during the
immediately preceding calendar year (or applicable portion thereof) and
of its
performance under this Agreement and any applicable Reconstitution Agreement
during such period has been made under such officer’s supervision, and (ii) to
the best of such officers’ knowledge, based on such review, the Seller has
fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar
year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such
obligation
in any material respect, specifically identifying each such failure known
to
such officer and the nature and the status thereof.
Section
1.05. Report on Assessment of Compliance and
Attestation.
(a) On
or before March 1 of each calendar year, commencing in 2007, the Seller
shall:
(i) deliver
to the Purchaser and any Depositor a report (in form and substance reasonably
satisfactory to the Purchaser and such Depositor) regarding the Seller’s
assessment of compliance with the Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Purchaser and such Depositor and signed by an authorized
officer of the Seller, and shall address each of the Servicing Criteria
specified on a certification substantially in the form of Attachment 2
hereto
delivered to the Purchaser concurrently with the execution of this
Agreement;
(ii) deliver
to the Purchaser and any Depositor a report of a registered public accounting
firm reasonably acceptable to the Purchaser and such Depositor that attests
to,
and reports on, the assessment of compliance made by the Seller and delivered
pursuant to the preceding paragraph. Such attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act;
(iii) cause
each Subservicer, and each Subcontractor determined by the Seller pursuant
to
Section 1.06(b) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, to deliver to the Purchaser and
any
Depositor an assessment of compliance and accountants’ attestation as and when
provided in paragraphs (a) and (b) of this Section; and
(iv) if
requested by the Purchaser or any Depositor not later than February 1 of
the
calendar year in which such certification is to be delivered, deliver to
the
Purchaser, any Depositor and any other Person that will be responsible
for
signing the certification (a “Sarbanes Certification”) required by Rules
13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302
of the
Sarbanes-Oxley Act of 2002) on behalf of an asset-backed issuer with respect
to
a Securitization Transaction a certification in the form attached hereto
as
Attachment 1.
The
Seller acknowledges that the parties identified in clause (a)(iv) above
may rely
on the certification provided by the Seller pursuant to such clause in
signing a
Sarbanes Certification and filing such with the Commission. Neither
the Purchaser nor any Depositor will request delivery of a certification
under
clause (a)(iv) above unless a Depositor is required under the Exchange
Act to
file an annual report on Form 10-K with respect to an issuing entity whose
asset
pool includes Mortgage Loans.
(b) Each
assessment of compliance provided by a Subservicer pursuant to Section
1.05(a)(i) shall address each of the Servicing Criteria specified on a
certification substantially in the form of Attachment 2 hereto delivered
to the
Purchaser concurrently
with
the
execution of this Agreement or, in the case of a Subservicer subsequently
appointed as such, on or prior to the date of such appointment. An
assessment of compliance provided by a Subcontractor pursuant to Section
1.05(a)(iii) need not address any elements of the Servicing Criteria other
than
those specified by the Seller pursuant to Section 1.06.
Section
1.06. Use of Subservicers and
Subcontractors.
The
Seller shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Seller as servicer under this Agreement
or
any Reconstitution Agreement unless the Seller complies with the provisions
of
paragraph (a) of this Section. The Seller shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Seller as servicer under this Agreement or any
Reconstitution Agreement unless the Seller complies with the provisions
of
paragraph (b) of this Section.
(a) It
shall not be necessary for the Seller to seek the consent of the Purchaser
or
any Depositor to the utilization of any Subservicer. The Seller shall
cause any Subservicer used by the Seller (or by any Subservicer) for the
benefit
of the Purchaser and any Depositor to comply with the provisions of this
Section
and with Sections 1.02, 1.03(c) and (e), 1.04, 1.05 and 1.07 of this Agreement
to the same extent as if such Subservicer were the Seller, and to provide
the
information required with respect to such Subservicer under Section 1.03(d)
of
this Agreement. The Seller shall be responsible for obtaining from
each Subservicer and delivering to the Purchaser and any Depositor any
servicer
compliance statement required to be delivered by such Subservicer under
Section
1.04, any assessment of compliance and attestation required to be delivered
by
such Subservicer under Section 1.05 and any certification required to be
delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 1.05 as and when required to be
delivered.
(b) It
shall not be necessary for the Seller to seek the consent of the Purchaser
or
any Depositor to the utilization of any Subcontractor. The Seller
shall promptly upon request provide to the Purchaser and any Depositor
(or any
designee of the Depositor, such as a master servicer or administrator)
a written
description (in form and substance satisfactory to the Purchaser and such
Depositor) of the role and function of each Subcontractor utilized by the
Seller
or any Subservicer, specifying (i) the identity of each such Subcontractor,
(ii)
which (if any) of such Subcontractors are “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, and (iii) which
elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause
(ii) of
this paragraph.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Seller shall cause any such Subcontractor used by the
Seller
(or by any Subservicer) for the benefit of the Purchaser and any Depositor
to
comply with the provisions of Sections 1.05 and 1.07 of this Agreement
to the
same extent as if such Subcontractor were the Seller.
The
Seller shall be responsible for obtaining from each Subcontractor and delivering
to the Purchaser and any Depositor any assessment of compliance and attestation
required to be delivered by such Subcontractor under Section 1.05, in each
case
as and when required to be delivered.
Section
1.07. Indemnification; Remedies.
(a) The
Seller shall indemnify the Purchaser, each affiliate of the Purchaser,
and each
of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible
for the preparation, execution or filing of any report required to be filed
with
the Commission with respect to such Securitization Transaction, or for
execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction; each broker
dealer
acting as underwriter, placement agent or initial purchaser, each Person
who
controls any of such parties or the Depositor (within the meaning of Section
15
of the Securities Act and Section 20 of the Exchange Act); and the respective
present and former directors, officers, employees and agents of each of
the
foregoing and of the Depositor, and shall hold each of them harmless from
and
against any losses, damages, penalties, fines, forfeitures, legal fees
and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i)(A) any
untrue statement of a material fact contained or alleged to be contained
in any
information, report, certification, accountants’ letter or other material
provided in written or electronic form under this Exhibit by or on behalf
of the
Seller, or provided under this Exhibit by or on behalf of any Subservicer,
Subcontractor or Third-Party Originator (collectively, the “Seller
Information”), or (B) the omission or alleged omission to state in the Seller
Information a material fact required to be stated in the Seller Information
or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by way
of clarification, that clause (B) of this paragraph shall be construed
solely by reference to the Seller Information and not to any other information
communicated in connection with a sale or purchase of securities, without
regard
to whether the Seller Information or any portion thereof is presented together
with or separately from such other information;
(ii) any
failure by the Seller, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Exhibit, including
any
failure by the Seller to identify pursuant to Section 1.06(b) any Subcontractor
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB; or
(iii) any
breach by the Seller of a representation or warranty set forth in Section
1.02(a) or in a writing furnished pursuant to Section 1.02(b) and made
as of a
date prior to the closing date of the related Securitization Transaction,
to the
extent that such breach is not cured by such closing date, or any breach
by the
Seller of a representation or warranty in a writing furnished pursuant
to
Section 1.02(b) to the extent made as of a date subsequent to such closing
date.
In
the
case of any failure of performance described in clause (a)(ii) of this
Section,
the Seller shall promptly reimburse the Purchaser, any Depositor, as applicable,
and each Person responsible for the preparation, execution or filing of
any
report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant
to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Seller, any Subservicer,
any
Subcontractor or any Third-Party Originator.
(b) (i) Any
failure by the Seller, any Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report, certification, accountants’
letter or other material when and as required under this Article, or any
breach
by the Seller of a representation or warranty set forth in Section 1.02(a)
or in
a writing furnished pursuant to Section 1.02(b) and made as of a date prior
to
the closing date of the related Securitization Transaction, to the extent
that
such breach is not cured by such closing date, or any breach by the Seller
of a
representation or warranty in a writing furnished pursuant to Section 1.02(b)
to
the extent made as of a date subsequent to such closing date, shall, except
as
provided in clause (ii) of this paragraph, immediately and automatically,
without notice or grace period, constitute an Event of Default with respect
to
the Seller under this Agreement and any applicable Reconstitution Agreement,
and
shall entitle the Purchaser or Depositor, as applicable, in its sole discretion
to terminate the rights and obligations of the Seller as servicer under
this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Seller; provided
that to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain
rights
or obligations following termination of the Seller as servicer, such provision
shall be given effect.
(ii) Any
failure by the Seller, any Subservicer or any Subcontractor to deliver
any
information, report, certification or accountants’ letter when and as required
under Section 1.04 or 1.05, including (except as provided below) any failure
by
the Seller to identify pursuant to Section 1.06(b) any Subcontractor
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, which continues unremedied for ten calendar days after the
date
on which such information, report, certification or accountants’ letter was
required to be delivered shall constitute an Event of Default with respect
to
the Seller under this Agreement and any applicable Reconstitution Agreement,
and
shall entitle the Purchaser or Depositor, as applicable, in its sole discretion
to terminate the rights and obligations of the Seller as servicer under
this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any compensation
to the Seller; provided that to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly provides
for
the survival of certain rights or obligations following termination of
the
Seller as servicer, such provision shall be given effect.
Neither
the Purchaser nor any Depositor shall be entitled to terminate the rights
and
obligations of the Seller pursuant to this subparagraph (b)(ii) if a failure
of
the Seller to identify a Subcontractor “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB was attributable solely
to the
role or functions of such Subcontractor with respect to mortgage loans
other
than the Mortgage Loans.
(iii) The
Seller shall promptly reimburse the Purchaser (or any designee of the Purchaser,
such as a master servicer) and any Depositor, as applicable, for all reasonable
expenses incurred by the Purchaser (or such designee) or such Depositor,
as such
are incurred, in connection with the termination of the Seller as servicer
and
the transfer of servicing of the Mortgage Loans to a successor
servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of
this
Agreement and/or any applicable Reconstitution Agreement or otherwise,
whether
in equity or at law, such as an action for damages, specific performance
or
injunctive relief.
ATTACHMENT
1
FORM
OF ANNUAL CERTIFICATION
|
|
Re:
|
The
[ ]
agreement dated as of [ ], 200[
] (the “Agreement”), among [IDENTIFY
PARTIES]
|
I,
________________________________, the _______________________ of [NAME
OF
SELLER], certify to [the Purchaser], [the Depositor], and the [Master Servicer]
[Securities Administrator] [Trustee], and their officers, with the knowledge
and
intent that they will rely upon this certification, that:
(1) I
have reviewed the servicer compliance statement of the Seller provided
in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
report on assessment of the Seller’s compliance with the servicing criteria set
forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934,
as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing
Assessment”), the registered public accounting firm’s attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and
Section 1122(b) of Regulation AB (the “Attestation Report”), and all servicing
reports, officer’s certificates and other information relating to the servicing
of the Mortgage Loans by the Seller during 200[ ] that were delivered by
the
Seller to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee]
pursuant to the Agreement (collectively, the “Seller Servicing
Information”);
(2) Based
on my knowledge, the Seller Servicing Information, taken as a whole, does
not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances
under
which such statements were made, not misleading with respect to the period
of
time covered by the Seller Servicing Information;
(3) Based
on my knowledge, all of the Seller Servicing Information required to be
provided
by the Seller under the Agreement has been provided to the [Depositor]
[Master
Servicer] [Securities Administrator] [Trustee];
(4) I
am responsible for reviewing the activities performed by the Seller as
servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed
in the
Compliance Statement, the Servicing Assessment or the Attestation Report,
the
Seller has fulfilled its obligations under the Agreement in all material
respects; and
(5) The
Compliance Statement required to be delivered by the Seller pursuant to
the
Agreement, and the Servicing Assessment and Attestation Report required
to be
provided by the Seller and by any Subservicer or Subcontractor pursuant
to the
Agreement, have been provided to the [Depositor] [Master
Servicer]. Any material instances of noncompliance described in such
reports have been disclosed to the [Depositor] [Master Servicer]. Any
material instance of noncompliance with the Servicing Criteria has been
disclosed in such reports.
Date: _________________________
By:
Name: ________________________________
Title: ________________________________
ATTACHMENT
2
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the Seller] [Name of Subservicer]
shall address, at a minimum, the criteria identified as below as “Applicable
Servicing Criteria”:
|
SERVICING
CRITERIA
|
APPLICABLE
SERVICING CRITERIA
|
|
Reference
|
Criteria
|
|
|
|
General
Servicing Considerations
|
|
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on
the party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
|
|
|
Cash
Collection and Administration
|
|
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial
bank
accounts and related bank clearing accounts no more than two
business days
following receipt, or such other number of days specified in
the
transaction agreements.
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
|
|
SERVICING
CRITERIA
|
APPLICABLE
SERVICING CRITERIA
|
|
Reference
|
Criteria
|
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are
made,
reviewed and approved as specified in the transaction
agreements.
|
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are
separately
maintained (e.g., with respect to commingling of cash) as set
forth in the
transaction agreements.
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities
Exchange
Act.
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank
clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling
items. These
reconciling items are resolved within 90 calendar days of their
original
identification, or such other number of days specified in the
transaction
agreements.
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SERVICING
CRITERIA
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APPLICABLE
SERVICING CRITERIA
|
|
Reference
|
Criteria
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|
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|
Investor
Remittances and Reporting
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1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and
applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the
terms specified in the transaction agreements; (C) are filed
with the
Commission as required by its rules and regulations; and (D)
agree with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
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1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
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1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
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1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
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Pool
Asset Administration
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1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the
transaction
agreements or related mortgage loan documents.
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1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the
transaction
agreements
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1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
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SERVICING
CRITERIA
|
APPLICABLE
SERVICING CRITERIA
|
|
Reference
|
Criteria
|
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance
with the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements,
and
allocated to principal, interest or other items (e.g., escrow)
in
accordance with the related mortgage loan documents.
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1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
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1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's mortgage
loans (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
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1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions,
as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
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1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including,
for example,
phone calls, letters and payment rescheduling plans in cases
where
delinquency is deemed temporary (e.g., illness or
unemployment).
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1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with
variable
rates are computed based on the related mortgage loan
documents.
|
|
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SERVICING
CRITERIA
|
APPLICABLE
SERVICING CRITERIA
|
|
Reference
|
Criteria
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period
specified in
the transaction agreements; (B) interest on such funds is paid,
or
credited, to obligors in accordance with applicable mortgage
loan
documents and state laws; and (C) such funds are returned to
the obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction
agreements.
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1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that
such support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
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1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
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1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of
days
specified in the transaction agreements.
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1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
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1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
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[NAME
OF
SELLER] [NAME OF SUBSERVICER]
Date: _________________________
By:
Name: ________________________________
Title: _____________________________
