Current Report — Form 8-K Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: 8-K New Century Mortgage Securities LLC HTML 29K
2: EX-1.1 Underwriting Agreement HTML 143K
3: EX-3.1 Amended and Restated Trust Agreement HTML 308K
4: EX-4.1 Indenture HTML 1.27M
5: EX-99.1 Servicing Agreement HTML 7.59M
6: EX-99.2 Mortgage Loan Purchase Agreement HTML 160K
REPRESENTATIONS
AND WARRANTIES; REMEDIES FOR BREACH
Section
3.1
Representations
and Warranties
ARTICLE
IV
SELLER’S
COVENANTS
Section
4.1
Covenants
of the Seller
ARTICLE
V
INDEMNIFICATION
BY THE RESPONSIBLE PARTY
Section
5.1
Indemnification
ARTICLE
VI
TERMINATION
Section
6.1
Termination
ARTICLE
VII
MISCELLANEOUS
PROVISIONS
Section
7.1
Amendment
Section
7.2
Governing
Law
Section
7.3
Notices
Section
7.4
Severability
of Provisions
Section
7.5
Relationship
of Parties
Section
7.6
Counterparts
Section
7.7
Further
Agreements
Section
7.8
Intention
of the Parties
Section
7.9
Successors
and Assigns; Assignment of Purchase Agreement
Section
7.10
Survival
Section
7.11
Third
Party Beneficiary
EXHIBIT
A
MORTGAGE
LOAN SCHEDULEA-1
EXHIBIT
B
FORM
OF LOST NOTE AFFIDAVITB-1
This
MORTGAGE LOAN PURCHASE AGREEMENT (this “Agreement”), dated as of June 26, 2006,
is made among New Century Credit Corporation (the “Seller”), New Century
Mortgage Securities LLC (the “Purchaser”) and NC Capital Corporation (the
“Responsible Party”).
WITNESSETH:
WHEREAS,
the Seller owns the Mortgage Loans indicated on the Mortgage Loan Schedule
attached as Exhibit 1 hereto (the “Mortgage Loans”), including rights to (a) any
property acquired by foreclosure or deed in lieu of foreclosure or otherwise
and
(b) the proceeds of any insurance policies covering the Mortgage Loans;
and
WHEREAS,
the parties hereto desire that the Seller sell the Mortgage Loans to the
Purchaser, and that the Responsible Party make certain representations and
warranties on the Closing Date and undertake certain obligations on the Closing
Date with respect to such Mortgage Loans, in each case pursuant to the terms
of
this Agreement; and
WHEREAS,
pursuant to the terms of an Amended and Restated Trust Agreement dated as of
June 29, 2006 (the “Trust Agreement”), among the Purchaser, as depositor,
Wilmington Trust Company, as owner trustee (the “Owner Trustee”) and Deutsche
Bank National Trust Company, as certificate registrar and certificate paying
agent, the Purchaser will convey the Mortgage Loans to the Issuing Entity;
and
WHEREAS,
pursuant to the terms of a Servicing Agreement dated as of June 29, 2006 (the
“Servicing Agreement”), among New Century Mortgage Corporation as servicer (the
“Servicer”), a Trust Estate designated as New Century Home Equity Loan Trust
2006-2, a Delaware statutory trust (the “Issuing Entity”) and Deutsche Bank
National Trust Company (“Deutsche Bank”), as Indenture Trustee (the “Indenture
Trustee”), the Servicer will service the Mortgage Loans directly or through one
or more Sub-Servicers; and
WHEREAS,
pursuant to the terms of an Indenture dated as of June 29, 2006 (the
“Indenture”), between the Issuing Entity and the Indenture Trustee, the Issuing
Entity will pledge the Mortgage Loans to the Indenture Trustee and issue and
transfer to the Purchaser the Asset-Backed Notes, Series 2006-2, Class A-1,
Class A-2a, Class A-2b, Class A-2c, Class M-1, Class M-2, Class M-3, Class
M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Notes
(collectively, the “Notes”), representing debt of the Issuing Entity;
and
WHEREAS,
the parties intend these transactions to be treated for federal, state and
local
tax purposes as the retention by the Seller of ownership of the Mortgage Loans
and issuance by the Seller of secured indebtedness evidenced by the Notes,
and
have mutually covenanted to treat the transactions consistent with that intent
for all federal, state and local tax purposes;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1Definitions.
For all
purposes of this Mortgage Loan Purchase Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires, capitalized terms
not
otherwise defined herein shall have the meanings assigned to such terms in
the
Definitions attached to the Indenture as Appendix A, which is incorporated
by
reference herein. All other capitalized terms used herein shall have the
meanings specified herein.
ARTICLE
II
SALE
OF
MORTGAGE LOANS AND RELATED PROVISIONS
Section
2.1Sale
of Mortgage Loans.
(a) The
Seller, by the execution and delivery of this Agreement, does hereby sell,
assign, set over, and otherwise convey to the Purchaser, without recourse but
subject to the terms of this Agreement, all of the Seller’s right, title and
interest in, to and under the Mortgage Loans, after giving effect to all
payments due on the Mortgage Loans on or before the Cut-off Date, whether or
not
received including the right to any Prepayment Charges payable by the related
Mortgagors in connection with any Principal Prepayments on the Mortgage Loans,
whether now existing or hereafter acquired and wherever located, on the Closing
Date.
(b) In
connection with such conveyances by the Seller, the Seller shall on behalf
of
the Purchaser deliver to the Indenture Trustee, on or before the Closing Date,
the following documents or instruments with respect to each Mortgage
Loan:
(i) the
original Mortgage Note, endorsed in blank or in the following form “Pay to the
order of Deutsche Bank National Trust Company, as Indenture Trustee under the
applicable agreement, without recourse,” with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to
the
Person so endorsing to the Indenture Trustee;
(ii) the
original Mortgage with evidence of recording thereon, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of attorney,
with evidence of recording thereon;
(iii) an
original Assignment in blank;
(iv) the
original recorded Assignment or Assignments showing a complete chain of
assignment from the originator to the Person assigning the Mortgage to the
Indenture Trustee as contemplated by the immediately preceding clause
(iii);
(v) the
original or copies of each assumption, modification, written assurance or
substitution agreement, if any; and
(vi) the
original or a photocopy of the lender’s title insurance policy or, if the
original title policy has not been issued, the irrevocable commitment to issue
the same.
If
a
material defect in any Mortgage File is discovered which may materially and
adversely affect the value of the related Mortgage Loan, or the interests of
the
Indenture Trustee (as pledgee of the Mortgage Loans), the Noteholders or the
Certificateholders in such Mortgage Loan including if any document required
to
be delivered to the Indenture Trustee has not been delivered (provided that
a
Mortgage File will not be deemed to contain a defect for an unrecorded
assignment under clause (iii) above if the Seller has submitted such assignment
for recording pursuant to the terms of the following paragraph), the Responsible
Party shall cure such defect, repurchase the related Mortgage Loan at the
Purchase Price or substitute a Qualified Substitute Mortgage Loan for the
related Mortgage Loan upon the same terms and conditions set forth in Section
3.1 hereof for breaches of representations and warranties as to the Mortgage
Loans.
With
respect to a maximum of approximately 2.0% of the Mortgage Loans, by outstanding
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, if any
original Mortgage Note referred to in Section 2.1(b)(i) above cannot be located,
the obligations of the Seller to deliver such documents shall be deemed to
be
satisfied upon delivery to the Purchaser of a photocopy of such Mortgage Note,
if available, with a lost note affidavit substantially in the form of Exhibit
B
hereto. If any of the original Mortgage Notes for which a lost note affidavit
was delivered to the Purchaser is subsequently located, such original Mortgage
Note shall be delivered to the Purchaser within three Business
Days.
The
Seller promptly shall (within sixty Business Days following the later of the
Closing Date and the date of the receipt by the Seller of the recording
information for a Mortgage but in no event later than ninety days following
the
Closing Date) submit or cause to be submitted for recording, at no expense
to
the Purchaser (or the Trust Estate or the Indenture Trustee under the
Indenture), in the appropriate public office for real property records, each
Assignment referred to in clauses (b)(iii) and (b)(iv) of this Section 2.1
and
shall execute each original Assignment in the following form: “Deutsche Bank
National Trust Company, as Indenture Trustee under the applicable agreement.” In
the event that any such Assignment is lost or returned unrecorded because of
a
defect therein, the Seller promptly shall prepare a substitute Assignment or
cure such defect, as the case may be, and thereafter cause each such Assignment
to be duly recorded.
Notwithstanding
the foregoing, however, for administrative convenience and facilitation of
servicing and to reduce closing costs, the Assignments shall not be required
to
be submitted for recording (except with respect to any Mortgage Loan located
in
Maryland) unless such failure to record would result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Notes;
provided,
however,
each
Assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Purchaser, upon the earliest to occur
of:
(i) reasonable direction by Holders of Notes entitled to at least 25% of the
Voting Rights, (ii) the occurrence of a Servicer Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Servicer,
(iv) the occurrence of a servicing transfer as described in Section 6.02 of
the
Servicing Agreement, (v) with respect to any one Assignment, the occurrence
of a
bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage and (vi) any Mortgage Loan that is 90 days or more delinquent.
Upon (a) receipt of written notice that recording of the Assignments is required
pursuant to one or more of the conditions (excluding condition (vi) above)
set
forth in the preceding sentence or (b) upon the occurrence of condition (vi)
in
the preceding sentence, the Seller shall be required to deliver such Assignments
within 30 days following receipt of such notice.
If
any of
the documents referred to in Sections 2.1(b)(ii), (iii) or (iv) above has,
as of
the Closing Date, been submitted for recording but either (x) has not been
returned from the applicable public recording office or (y) has been lost or
such public recording office has retained the original of such document, the
obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Purchaser or its assignee, transferee or
designee of a copy of each such document certified by the Originator in the
case
of (x) above or the applicable public recording office in the case of (y) above
to be a true and complete copy of the original that was submitted for recording
and (2) if such copy is certified by the Originator, delivery to the Purchaser
or its assignee, transferee or designee promptly upon receipt thereof of either
the original or a copy of such document certified by the applicable public
recording office to be a true and complete copy of the original. Notice shall
be
provided to the Indenture Trustee and the Rating Agencies by the Seller if
delivery pursuant to clause (2) above will be made more than 180 days after
the
Closing Date. If the original lender’s title insurance policy was not delivered
pursuant to Section 2.1(b)(vi) above, the Seller shall deliver or cause to
be
delivered to the Purchaser or its assignee, transferee or designee promptly
after receipt thereof, the original lender’s title insurance policy. The Seller
shall deliver or cause to be delivered to the Purchaser or its assignee,
transferee or designee promptly upon receipt thereof any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption or modification of any Mortgage Loan.
Each
original document relating to a Mortgage Loan which is not delivered to the
Purchaser or its assignee, transferee or designee, if held by the Seller, shall
be so held for the benefit of the Purchaser, its assignee, transferee or
designee.
(c) The
parties hereto intend (other than for federal, state and local tax purposes)
that the transactions set forth herein, including the sale of the Mortgage
Loans
pursuant to this Agreement, constitute a sale by the Seller to the Purchaser
of
all the Seller’s right, title and interest in and to the Mortgage Loans and
other property as and to the extent described above. In the event the
transactions set forth herein are deemed not to be a sale, the Seller hereby
grants to the Purchaser a security interest in all of the Seller’s right, title
and interest in, to and under the Mortgage Loans and such other property, to
secure all of the Seller’s obligations hereunder, and this Agreement shall
constitute a security agreement under applicable law. The Seller agrees to
take
or cause to be taken such actions and to execute such documents, including
without limitation the filing of all necessary UCC-1 financing statements filed
in the State of California (which shall have been submitted for filing as of
the
Closing Date with respect to the Stated Principal Balance of the Mortgage
Loans), any continuation statements with respect thereto and any amendments
thereto required to reflect a change in the name or corporate structure of
the
Seller or the filing of any additional UCC-1 financing statements due to the
change in the principal office of the Seller, as are necessary to perfect and
protect the Purchaser’s interests in each Mortgage Loan and the proceeds
thereof.
Section
2.2Agreement
to Purchase.
The
Seller agrees to sell and the Purchaser agrees to purchase, on or before June29, 2006 (the “Closing Date”), certain fixed-rate and adjustable-rate, first
lien and second lien, conventional, one- to four-family, residential mortgage
loans (the “Mortgage Loans”), having an
aggregate principal balance as of the close of business on June 1, 2006, (the
“Cut-off Date”) of $1,192,746,592
(the “Closing Balance”), after giving effect to all payments due on the Mortgage
Loans on or before the Cut-off Date, whether or not received including the
right
to any Prepayment Charges payable by the related Mortgagors in connection with
any Principal Prepayments on the Mortgage Loans. The
purchase price payable in connection with such sale shall consist of (i) the
cash proceeds from the sale of the Notes and (ii) delivery of the Trust
Certificates to the Seller.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES; REMEDIES FOR BREACH
Section
3.1Representations
and Warranties.
The
Responsible Party (in the case of (a) and (c) below) and Seller (in the case
of
(b) below) hereby represents and warrants to the Purchaser as of the Closing
Date (or if otherwise specified below, as of the date so
specified):
(a)As
to
the Responsible Party:
(1) The
Responsible Party is duly organized, validly existing and in good standing
as a
corporation under the laws of the State of California with full corporate power
and authority to conduct its business as presently conducted by it to the extent
material to the consummation of the transactions contemplated herein. The
Responsible Party has the full corporate power and authority to execute and
deliver, engage in the transactions contemplated by, and perform and observe
the
terms and conditions of this Agreement.
(2) The
Responsible Party 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 Seller
and
the Purchaser, constitutes a legal, valid and binding obligation of the
Responsible Party, enforceable against it in accordance with its terms except
as
the enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or by general principles of equity.
(3) The
execution, delivery and performance of this Agreement by the Responsible Party
(x) does not conflict and will not conflict with, does not breach and will
not
result in a breach of and does not constitute and will not constitute a default
(or an event, which with notice or lapse of time or both, would constitute
a
default) under (A) any terms or provisions of the articles of incorporation
or
by-laws of the Responsible Party, (B) any term or provision of any material
agreement, contract, instrument or indenture, to which the Responsible Party
is
a party or by which the Responsible Party or any of its property is bound or
(C)
any law, rule, regulation, order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over the Responsible Party
or any of its property and (y) does not create or impose and will not result
in
the creation or imposition of any lien, charge or encumbrance which would have
a
material adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the value of the Mortgage Loans.
(4) No
consent, approval, authorization or order of, registration or filing with,
or
notice on behalf of the Responsible Party to any governmental authority or
court
is required, under federal laws or the laws of the State of California, for
the
execution, delivery and performance by the Responsible Party of, or compliance
by the Responsible Party with, this Agreement or the consummation by the
Responsible Party of any other transaction contemplated hereby and by the
Indenture; provided, however, that the Responsible Party makes no representation
or warranty regarding federal or state securities laws in connection with the
sale or distribution of the Notes and Certificates.
(5) This
Agreement does not contain any untrue statement of a material fact or omit
to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Responsible Party pursuant
to
this Agreement or in connection with the transactions contemplated hereby taken
in the aggregate do not contain any untrue statement of a material fact or
omit
to state a material fact necessary to make the statements contained therein
not
misleading.
(6) The
Responsible Party is not in violation of, and the execution and delivery of
this
Agreement by the Responsible Party 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 Responsible Party
or its assets, which violation might have consequences that would materially
and
adversely affect the condition (financial or otherwise) or the operation of
the
Responsible Party or its assets or might have consequences that would materially
and adversely affect the performance of its obligations and duties
hereunder.
(7) The
Responsible Party 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.
(8) There
are
no actions or proceedings against, or investigations known to it of, the
Responsible Party before any court, administrative or other tribunal (A) that
might prohibit its entering into this Agreement or any other Basic Agreement,
(B) seeking to prevent consummation of the transactions contemplated by this
Agreement or (C) that might prohibit or materially and adversely affect the
performance by the Responsible Party of its obligations under, or validity
or
enforceability of, this Agreement.
(9) There
is
no litigation currently pending or, to the best of the Responsible Party’s
knowledge without independent investigation, threatened against the Responsible
Party that would reasonably be expected to adversely affect the issuance of
the
Notes and Certificates or the execution, delivery, performance or enforceability
of this Agreement, or that would result in a material adverse change in the
financial condition of the Responsible Party.
(b)As
to
the Seller:
(1) The
Seller is duly organized, validly existing and in good standing as a corporation
under the laws of the State of California with full corporate power and
authority to conduct its business as presently conducted by it to the extent
material to the consummation of the transactions contemplated herein. The Seller
has the full corporate power and authority to own the Mortgage Loans and to
transfer and convey the Mortgage Loans to the Purchaser and has the full
corporate power and authority to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and conditions of this
Agreement.
(2) 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 Responsible Party
and
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 or by general
principles of equity.
(3) The
execution, delivery and performance of this Agreement by the Seller (x) does
not
conflict and will not conflict with, does not breach and will not result in
a
breach of and does not constitute and will not constitute a default (or an
event, which with notice or lapse of time or both, would constitute a default)
under (A) any terms or provisions of the articles of incorporation or by-laws
of
the Seller, (B) any term or provision of any material agreement, contract,
instrument or indenture, to which the Seller is a party or by which the Seller
or any of its property is bound or (C) any law, rule, regulation, order,
judgment, writ, injunction or decree of any court or governmental authority
having jurisdiction over the Seller or any of its property and (y) does not
create or impose and will not result in the creation or imposition of any lien,
charge or encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or securing the
Mortgage Loans.
(4) No
consent, approval, authorization or order of, registration or filing with,
or
notice on behalf of the Seller to any governmental authority or court is
required, under federal laws or the laws of the State of California, for the
execution, delivery and performance by the Seller of, or compliance by the
Seller with, this Agreement or the consummation by the Seller of any other
transaction contemplated hereby and by the Indenture; provided, however, that
the Seller makes no representation or warranty regarding federal or state
securities laws in connection with the sale or distribution of the Notes and
Certificates.
(5) This
Agreement does not contain any untrue statement of a material fact or omit
to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby taken
in
the aggregate do not contain any untrue statement of a material fact or omit
to
state a material fact necessary to make the statements contained therein not
misleading.
(6) 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.
(7) 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.
(8) Immediately
prior to the sale of the Mortgage Loans to the Purchaser as herein contemplated,
the Seller will be the owner of the related Mortgage and the indebtedness
evidenced by the related Mortgage Note, and, upon the payment to the Seller
of
the Mortgage Loan Purchase Price, in the event that the Seller retains or has
retained 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 from and after the
date
hereof.
(9) There
are
no actions or proceedings against, or investigations known to it 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 by the Seller 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.
(10) 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 are not subject
to the bulk transfer or any similar statutory provisions.
(11) [intentionally
omitted]
(12) The
Seller has not dealt with any broker, investment banker, agent or other person,
except for the Purchaser or any of its affiliates, that may be entitled to
any
commission or compensation in connection with the sale of the Mortgage Loans
(except that an entity that previously financed the Seller’s ownership of the
Mortgage Loans may be entitled to a fee to release its security interest in
the
Mortgage Loans, which fee shall have been paid and which security interest
shall
have been released on or prior to the Closing Date).
(13) There
is
no litigation currently pending or, to the best of the Seller’s knowledge
without independent investigation, threatened against the Seller that would
reasonably be expected to adversely affect the transfer of the Mortgage Loans,
the issuance of the Notes and Certificates or the execution, delivery,
performance or enforceability of this Agreement, or that would result in a
material adverse change in the financial condition of the Seller.
(c)As
to
each Mortgage Loan:
(1) The
information set forth in the Mortgage Loan Schedule, including the field
concerning any related Prepayment Charge, is complete, true and correct as
of
the Cut-off Date;
(2) [intentionally
omitted]
(3) (a)
All
payments required to be made on or before the first day of the month prior
to
the month of the Closing Date, with respect to such Mortgage Loan under the
terms of the Mortgage Note have been made; (b) none of the Seller, the
Responsible Party or the Originator has 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 (c) as of March 1, 2006,
the payment required under any Mortgage Loan will not and has not been 30 or
more days delinquent more than once during the last twelve months;
(4) 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;
(5) The
terms
of the Mortgage Note and the Mortgage have not been impaired, waived, altered
or
modified in any respect, except by written instruments, recorded in the
applicable public recording office if necessary to maintain the lien priority
of
the Mortgage; the substance of any such waiver, alteration or modification
has
been approved by the title insurer, to the extent required by the related
policy, and is reflected on the Mortgage Loan Schedule. No instrument of waiver,
alteration or modification has been executed by the Responsible Party or the
Originator or any other person in the chain of title from the Originator to
the
Responsible Party to the Seller to the Purchaser, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by the policy, and the
terms of which are reflected in the Mortgage Loan Schedule;
(6) 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;
(7) 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
Agreement. All such insurance policies contain a standard mortgagee clause
naming the Originator, its successors and assigns as mortgagee and all premiums
thereon have been paid. If upon origination of the Mortgage Loan, the Mortgaged
Property was 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 Fannie Mae and Freddie Mac. 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 the Mortgagor’s cost and expense and to seek reimbursement
therefor from the Mortgagor;
(8) Any
and
all requirements of any federal, state or local law including, without
limitation, all applicable predatory and abusive lending laws, usury, truth
in
lending, real estate settlement procedures, consumer credit protection, equal
credit opportunity or disclosure laws applicable to the origination and
servicing of the Mortgage Loan have been complied with. Any and all statements
or acknowledgments required to be made by the Mortgagor relating to such
requirements are and will remain in the Mortgage File;
(9) The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, cancellation, subordination, rescission
or
release;
(10) The
Mortgage is a valid, existing and enforceable first or second 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 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, (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 (d) the first lien on the
Mortgaged Property, in the case of the Mortgages that are second liens. 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 or second lien and first or second priority
security interest, as applicable, on the property described therein and the
Seller had full right to contribute 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;
(11) 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;
(12) 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 who is a party to the Mortgage
Note and the Mortgage is in an individual capacity or family trust that is
guaranteed by a natural person;
(13) 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;
(14) As
of the
Closing Date and prior to the sale of the Mortgage Loan to the Purchaser, the
Seller was 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;
(15) 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) in compliance with any and all applicable
“doing business” and licensing requirements of the laws of the state wherein the
Mortgaged Property is located;
(16) The
Mortgage Loan is covered by an ALTA lender’s title insurance policy, and with
respect to each adjustable-rate Mortgage Loan, an adjustable rate mortgage
endorsement in an amount at least equal to the balance of the Mortgage Loan
as
of the Cut-off Date, such endorsement substantially in the form of ALTA Form
6.0
or 6.1, acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae and Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject to
the
exceptions contained in (x)(a) and (b) above) the Originator, its successors
and
assigns as to the first or second 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 the provisions of
the
Mortgage providing for adjustment in the Mortgage Rate and monthly payment.
Additionally, such lender’s title insurance policy affirmatively insures ingress
and egress to and from the Mortgaged Property, and against encroachments by
or
upon the Mortgaged Property or any interest therein. The Originator 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 Originator, the Responsible
Party and the Seller, has done, by act or omission, anything which would impair
the coverage of such lender’s title insurance policy;
(17) Other
than as specified in paragraph (3) above, if applicable, there is no default,
breach, violation or event of acceleration existing under the Mortgage or the
Mortgage Note and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and neither the Originator nor the Seller
has waived any default, breach, violation or event of acceleration;
(18) 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;
(19) All
improvements which were considered in determining the 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;
(20) The
Mortgage Loan was (i) originated by the Originator or by a savings and loan
association, a savings bank, a commercial bank or similar banking institution
which is supervised and examined by a federal or state authority, or by a
mortgagee approved as such by the Secretary of HUD or (ii) acquired by the
Originator directly through loan brokers or correspondents such that (a) the
Mortgage Loan was originated in conformity with the Originator’s underwriting
guidelines and (b) the Originator approved the Mortgage Loan prior to
funding;
(21) Principal
payments on the Mortgage Loan commenced no more than two months after the
proceeds of the Mortgage Loan were disbursed. The Mortgage Loan bears interest
at the Mortgage Rate. With respect to the Adjustable-Rate Mortgage Loans, 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 amortize
the
Stated Principal Balance of the Mortgage Loan over its remaining term at the
Mortgage Rate. Interest on the Mortgage Loan is calculated on the basis of
a
360-day year consisting of twelve 30-day months. The Mortgage Note does not
permit negative amortization. No Adjustable-Rate Mortgage Loan permits the
Mortgagor to convert the Mortgage Rate thereon to a fixed Mortgage
Rate;
(22) The
origination and collection practices used by the Servicer 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 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 Servicer 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 Servicer have been capitalized under any
Mortgage or the related Mortgage Note;
(23) The
Mortgaged Property is free of damage and waste and there is no proceeding
pending for the total or partial condemnation thereof;
(24) 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. Since the
date of origination of the Mortgage Loan, 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. To the best of the Seller’s knowledge, the Mortgagor
has not notified the Originator or the Servicer of any relief requested or
allowed to the Mortgagor under the Servicemembers Civil Relief Act and, to
the
best of the Responsible Party’s knowledge, no such request has been made or
allowance granted.
(25) The
related Mortgaged Property is not a leasehold estate or, if such Mortgaged
Property is a leasehold estate, the remaining term of such lease is at least
ten
(10) years greater than the remaining term of the related Mortgage
Note;
(26) 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
(10) above;
(27) 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, approved by the Originator or the Responsible Party, 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
Fannie Mae and Freddie Mac;
(28) 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;
(29) 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 Originator, the Responsible Party, the Seller, the Mortgagor, or anyone
on behalf of the Mortgagor, (b) paid by any source other than the Mortgagor
or
(c) contains any other similar provisions which may constitute a “buydown”
provision. The Mortgage Loans are not graduated payment mortgage loans and
the
Mortgage Loans do not have shared appreciation or other contingent interest
features;
(30) With
respect to the Adjustable-Rate Mortgage Loans, 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 if the Mortgage Loan is a Refinanced Mortgage Loan, the
Mortgagor has received all disclosure and rescission materials required by
applicable law with respect to the making of a Refinanced Mortgage Loan, and
evidence of such receipt is and will remain in the Mortgage File;
(31) 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;
(32) [Reserved];
(33) 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;
(34) 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;
(35) Each
Assignment is in recordable form and is acceptable for recording under the
laws
of the jurisdiction in which the Mortgaged Property is located;
(36) 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 or second 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 Fannie Mae and
Freddie Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(37) No
Mortgage Loan has a balloon payment feature;
(38) If
the
Residential Dwelling on the Mortgaged Property is a condominium unit or a unit
in a planned unit development (other than a de minimis planned unit development)
such condominium or planned unit development project meets the Fannie Mae’s
eligibility requirements;
(39) [Reserved];
(40) [Reserved];
(41) The
Mortgage Loan was not intentionally selected in a manner intended to adversely
affect the interest of the Purchaser;
(42) [Reserved];
(43) The
Mortgaged Property consists of a parcel of real property of not more than ten
acres with a single family residence erected thereon, or a two to four-family
dwelling, or a multi-family property, or an individual condominium unit in
a
low-rise or high-rise condominium project, or an individual unit in a planned
unit development. The Mortgaged Property is improved with a Residential
Dwelling. Without limiting the foregoing, the Mortgaged Property does not
consist of any of the following property types: (a) co-operative units, (b)
log
homes, (c) earthen homes, (d) underground homes, (e) mobile homes and (f)
manufactured homes (as defined in the Fannie Mae Originator-Servicer’s Guide),
except when the appraisal indicates that the home is of comparable construction
to a stick or beam construction home, is readily marketable, has been
permanently affixed to the site and is not in a mobile home “park.” The
Mortgaged Property is either a fee simple estate or a long-term residential
lease. If the Mortgage Loan is secured by a long-term residential lease, unless
otherwise specifically disclosed in the Mortgage Loan Schedule, (A) the terms
of
such lease expressly permit the mortgaging of the leasehold estate, the
assignment of the lease without the lessor’s consent (or the lessor’s consent
has been obtained and such consent is the Mortgage File) and the acquisition
by
the holder of the Mortgage of the rights of the lessee upon foreclosure or
assignment in lieu of foreclosure or provide the holder of the Mortgage with
substantially similar protection; (B) the terms of such lease do not (x) allow
the termination thereof upon the lessee’s default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to cure,
such default or (y) prohibit the holder of the Mortgage from being insured
under
the hazard insurance policy relating to the Mortgaged Property; (C) the original
term of such lease is not less than 15 years; (D) the term of such lease does
not terminate earlier than ten years after the maturity date of the Mortgage
Note; and (E) the Mortgaged Property is located in a jurisdiction in which
the
use of leasehold estates for residential properties is an accepted practice.
Furthermore, no manufactured housing units underlie the security;
(44) At
the
time of origination, the Loan-To-Value Ratio of the Mortgage Loan was not
greater than 100.00%;
(45) The
Mortgage, and if required by applicable law the related Mortgage Note, contains
a provision for the acceleration of the payment of the unpaid principal balance
of the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the Mortgagee, at the option
of
the Mortgagee;
(46) The
Mortgage Loan either contains a customary due-on-sale clause or may be assumed
by a creditworthy purchaser of the related Mortgaged Property;
(47) As
of any
Adjustment Date for any Adjustable-Rate Mortgage Loan, the Index applicable
to
the determination of the Mortgage Rate on such Mortgage Loan will be the average
of the interbank offered rates for six-month or one-month United States dollar
deposits in the London market, generally as published in The
Wall Street Journal
and as
most recently available as of either (i) the first business day 45 days prior
to
such Adjustment Date or (ii) the first business day of the month preceding
the
month of such Adjustment Date, as specified in the related Mortgage
Note;
(48) Each
Mortgage Loan is a “qualified mortgage” under Section 860G(a)(3) of the
Code;
(49) The
Originator is a HUD approved mortgagee pursuant to Section 203 and Section
211
of the National Housing Act. No event has occurred, including but not limited
to
a change in insurance coverage, that would make such Originator unable to comply
with HUD eligibility requirements or that would require notification to
HUD;
(50) No
Mortgage Loan is covered by the Home Ownership and Equity Protection Act of
1994
(“HOEPA”) and no Mortgage Loan is in violation of any comparable state
law;
(51) No
Mortgage Loan that was originated on or after October 1, 2002 and before March7, 2003 is secured by property located in the State of Georgia;
(52) No
Mortgage Loan that was originated on or after March 7, 2003, is a “high cost
home loan” as defined under the Georgia Fair Lending Act;
(53) (a)
No
Mortgage Loan is a “high cost home,”“covered,” (excluding home loans defined as
“covered home loans” in the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), “high risk home” or
“predatory” loan under any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees);
(54) With
respect to each Mortgage Loan, no borrower obtained a prepaid single-premium
credit-life, credit disability, credit unemployment or credit property insurance
policy in connection with the origination of the Mortgage Loan;
(55) Each
Mortgage Loan at the time it was made complied in all material respects with
applicable local, state, and federal laws, including, but not limited to, all
applicable predatory and abusive lending laws;
(56) Each
Prepayment Charge is enforceable and was originated in compliance with all
applicable federal, state and local laws (except
to the extent that the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws affecting creditor’s
rights generally or the collectability thereof may be limited due to
acceleration in connection with a foreclosure);
(57) None
of
the Mortgage Loans are High Cost as defined by the applicable predatory and
abusive lending laws;
(58) No
Mortgage Loan is a high cost loan or a covered loan, as applicable (as such
terms are defined in Standard & Poor’s LEVELS Version 5.6(b) Glossary
Revised, Appendix E;
(59) The
original Stated Principal Balance of each Group I Mortgage Loan is within
Freddie Mac’s dollar amount limits for conforming one- to four-family mortgage
loans;
(60) With
respect to any Mortgage Loan originated on or after August 1, 2004, neither
the
related Mortgage nor the related Mortgage Note requires the borrower to submit
to arbitration to resolve any dispute arising out of or relating in any way
to
the mortgage loan transaction;
(61) The
methodology used in underwriting the extension of credit for each Group I
Mortgage Loan in the trust employs objective mathematical principles which
relate the borrower’s income, assets and liabilities to the proposed payment and
such underwriting methodology does not rely on the extent of the borrower’s
equity in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology confirmed that at the time
of
origination (application/approval) the borrower had a reasonable ability to
make
timely payments on the related mortgage loan;
(62) With
respect to the Group I Mortgage Loans, the originator offered the borrower
mortgage loan products offered by the originator or any affiliate of such
originator, for which the borrower was qualified;
(63) With
respect to any Group I Mortgage Loan that contains a provision permitting
imposition of a premium upon a prepayment prior to maturity: (a) prior to the
mortgage loan’s origination, the borrower agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction; (b)
prior to the mortgage loan’s origination, the borrower was offered the option of
obtaining a mortgage loan that did not require payment of such a premium unless
the mortgage loan that did not require payment of such a premium would be a
mortgage loan that is a HOEPA loan or a high-cost home loan under any applicable
state or local law and prohibited by the originator's underwriting guidelines;
(c) the prepayment premium is adequately disclosed to the borrower pursuant
to
applicable state and federal law; (d) no subprime loan originated on or after
October 1, 2002 will impose a prepayment premium for a term in excess of three
years, and any loans originated prior to such date and any non-subprime loans
will not impose prepayment penalties in excess of five years; in each case
unless the loan was modified to reduce the prepayment period to no more than
three years from the date of the note and the borrower was notified in writing
of such reduction in prepayment period; and (e) notwithstanding any state or
federal law to the contrary, the servicer shall not impose such prepayment
premium in any instance when the mortgage loan is accelerated or paid off in
connection with the workout of a delinquent mortgage or due to the borrower’s
default;
(64) No
borrower under any Group I Mortgage Loan was charged “points and fees” in an
amount greater than (a) $1,000 or (b) 5% of the principal amount of such
mortgage loan, whichever is greater. For purposes of this representation,
“points and fees” (x) include origination, underwriting, broker and finder’s
fees and charges that the lender imposed as a condition of making the mortgage
loan, whether they are paid to the lender or a third party; and (y) exclude
bona
fide discount points, fees paid for actual services rendered in connection
with
the origination of the mortgage (such as attorneys’ fees, notaries fees and fees
paid for property appraisals, credit reports, surveys, title examinations and
extracts, flood and tax certifications, and home inspections); the cost of
mortgage insurance or credit-risk price adjustments; the costs of title, hazard,
and flood insurance policies; state and local transfer taxes or fees; escrow
deposits for the future payment of taxes and insurance premiums; and other
miscellaneous fees and charges that, in total, do not exceed 0.25 percent of
the
loan amount. All points, fees and charges, whether financed or assessed,
collected or to be collected in connection with origination and servicing of
each mortgage loan, have been disclosed in writing to the borrower in accordance
with applicable state and federal law and regulation;
(65) With
respect to any subordinate lien Group I Mortgage Loans underlying the security,
such lien is on a one- to four-family residence that is (or will be) the
principal residence of the borrower upon origination of the subordinate
lien;
(66) With
respect to any subordinate lien Group I Mortgage Loans underlying
the security, such mortgage loan has an original principal balance that exceeds
one-half of the one-unit limitation for first lien mortgage loans, or $208,500
(in Alaska, Guam, Hawaii or Virgin Islands: $312,750), without regard to the
number of units; and
(67) With
respect to any first lien Group I Mortgage Loans, the original principal balance
of such mortgage loan plus the original principal balance of any subordinate
lien mortgage loans relating to the same mortgaged property does not exceed
the
applicable Freddie Mac loan limit for first lien mortgage loans for that
property type.
Upon
discovery by the Responsible Party or upon notice from the Purchaser, the
Issuing Entity, the Owner Trustee, the Servicer or the Indenture Trustee, as
applicable, of any materially defective document in, or that a document was
not
transferred by the Seller (as listed on the Indenture Trustee’s preliminary
exception report) as part of any Mortgage File, or of a breach of any
representation or warranty in this Section which materially and adversely
affects the interests of the Noteholders or the Certificateholders, as
applicable, (it
being
understood that with respect to the representations and warranties set forth
in
(48), (50), (51), (52), (53), (54), (55), (59), (60), (61), (62), (63), (64)
and
(65) of Section 3.1(c) herein, a breach of any such representation or warranty
shall in and of itself be deemed to materially adversely affect the interest
therein of the Purchaser and the Purchaser’s assignee, transferee or designee)
in any Mortgage Loan, the Responsible Party shall, within 60 days of its
discovery or its receipt of notice of such breach, deliver such missing document
or cure such defect or breach in all material respects or, in the event the
Responsible Party cannot deliver such missing document or cannot cure such
defect or breach (it
being
understood that with respect to the representations and warranties set forth
in
(48), (50), (51), (52), (53), (54), (55), (59), (60), (61), (62), (63), (64)
and
(65) of Section 3.1(c) herein, a breach of any such representation or warranty
shall in and of itself be deemed to materially adversely affect the interest
therein of the Purchaser and the Purchaser’s assignee, transferee or designee),
the Responsible Party shall, within ninety (90) days of its discovery or receipt
of notice, either (i) repurchase the affected Mortgage Loan at the Purchase
Price (as such term is defined in the Indenture) or (ii) pursuant to the
provisions of the Indenture, cause the removal of such Mortgage Loan from the
Trust and substitute one or more Qualified Substitute Mortgage Loans; provided,
however, the Responsible Party may not substitute a Qualified Substitute
Mortgage Loan for any Deleted Mortgage Loan that violates any predatory or
abusive lending law. The Responsible Party shall amend the Closing Schedule
to
reflect the withdrawal of such Mortgage Loan from the terms of this Agreement
and the Indenture. The Responsible Party shall deliver to the Purchaser such
amended Closing Schedule and shall deliver such other documents as are required
by this Agreement within five (5) days of any such amendment. Any repurchase
pursuant to this Section 3.1(c) shall be accomplished by transfer to an account
designated by the Purchaser of the amount of the Purchase Price (as such term
is
defined in the Indenture) in accordance with Section 2.03 of the Servicing
Agreement. Any repurchase required by this Section 3.1(c) shall be made in
a
manner consistent with Section 2.03 of the Servicing Agreement. The Purchase
Price for any such Mortgage Loan repurchased by the Responsible Party shall
be
paid by the Responsible Party to the Servicer for deposit in the Collection
Account maintained by it pursuant to Section 3.10 of the Servicing
Agreement.
(c) It
is
understood and agreed that the obligations of the Responsible Party set forth
in
this Section 3.1 to cure or repurchasea
defective Mortgage Loan shall, except to the extent provided in Section 5.1
of
this Agreement, constitute the sole remedies of the Purchaser, the Issuing
Entity, the Certificateholders (or the Owner Trustee on behalf of the
Certificateholders) and the Noteholders (or the Indenture Trustee, or the
Servicer, acting pursuant to the Servicing Agreement, on behalf of the
Noteholders) against the Responsible Party respecting a missing document or
a
breach of the representations and warranties contained in this Section 3.1.
It
is understood and agreed that the representations and warranties set forth
in
this Section 3.1 shall survive delivery of the respective Mortgage Files to
the
Issuing Entity.
ARTICLE
IV
SELLER’S
COVENANTS
Section
4.1Covenants
of the Seller.
The
Seller hereby covenants that, except for the transfer hereunder with respect
to
the Mortgage Loans, the Seller will not sell, pledge, assign or transfer to
any
other Person, or grant, create, incur or assume any Lien on, any Mortgage Loan,
whether now existing or hereafter created, or any interest therein; the Seller
will notify the Issuing Entity, as assignee of the Purchaser, of the existence
of any Lien (other than as provided above) on any Mortgage Loan immediately
upon
discovery thereof; and the Seller will defend the right, title and interest
of
each of the Issuing Entity and the Indenture Trustee, as assignee of the
Purchaser and the Issuing Entity, respectively, in, to and under the Mortgage
Loans, whether now existing or hereafter created, against all claims of third
parties claiming through or under the Seller.
ARTICLE
V
INDEMNIFICATION
BY THE RESPONSIBLE PARTY
Section
5.1Indemnification.
The
Responsible Party shall indemnify and hold harmless each of (i) the Purchaser,
(ii) the Underwriters, (iii) the Person, if any, to which the Purchaser assigns
its rights in and to a Mortgage Loan and each of their respective successors
and
assigns and (iv) each person, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act of 1933, as amended (the “1933 Act”)
((i) through (iv) collectively, the “Indemnified Party”) against any and all
losses, claims, expenses, damages or liabilities to which the Indemnified Party
may become subject, under the 1933 Act or otherwise, insofar as such losses,
claims, expenses, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (a) any untrue statement or alleged untrue statement
of
any material fact contained in the Prospectus Supplement or the omission or
the
alleged omission to state therein the material fact necessary in order to make
the statements therein not misleading, in each case to the extent, but only
to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with (i)
information furnished in writing to the Purchaser or any of its affiliates
by
the Originator or any of its affiliates specifically for use therein, which
shall include, with respect to the Prospectus Supplement, the information set
forth under the captions “Summary—The Mortgage Loans,”“Risk Factors” (to the
extent of information concerning the Mortgage Loans contained therein), “The
Mortgage Pool”, or (ii) the data files containing information with respect to
the Mortgage Loans as transmitted by modem to the Purchaser by the Responsible
Party or any of its affiliates (as such transmitted information may have been
amended in writing by the Responsible Party or any of its affiliates with the
written consent of the Purchaser subsequent to such transmission), (b) any
representation, warranty or covenant made by the Responsible Party or any
affiliate of the Responsible Party herein or in the Servicing Agreement, on
which the Purchaser has relied, being, or alleged to be, untrue or incorrect
or
(c) any updated collateral information provided by any Underwriter to a
purchaser of the Notes or Certificates derived from the data contained in clause
(ii) and the Remittance Report or a current collateral tape obtained from the
Responsible Party or an affiliate of the Responsible Party, including the
current principal balances of the Mortgage Loans; provided, however, that to
the
extent that any such losses, claims, expenses, damages or liabilities to which
the Indemnified Party may become subject arise out of or are based upon both
(1)
statements, omissions, representations, warranties or covenants of the Seller
described in clause (a), (b) or (c) above and (2) any other factual basis,
the
Responsible Party shall indemnify and hold harmless the Indemnified Party only
to the extent that the losses, claims, expenses, damages, or liabilities of
the
person or persons asserting the claim are determined to rise from or be based
upon matters set forth in clause (1) above and do not result from the gross
negligence or willful misconduct of such Indemnified Party. This indemnity
shall
be in addition to any liability that the Responsible Party may otherwise
have.
ARTICLE
VI
TERMINATION
Section
6.1Termination.
The
respective obligations and responsibilities of the Seller and the Purchaser
created hereby shall terminate, except for the Responsible Party’s indemnity
obligations as provided herein, upon the termination of the Issuing Entity
pursuant to the terms of the Trust Agreement.
ARTICLE
VII
MISCELLANEOUS
PROVISIONS
Section
7.1Amendment.
This
Agreement may be amended from time to time by the Seller and the Purchaser
by
written agreement signed by the Seller and the Purchaser, which consent shall
not be unreasonably withheld.
Section
7.2Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Section
7.3Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given when delivered addressed as follows:
Section
7.4Severability
of Provisions.
If any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
Section
7.5Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or joint
venture between the parties hereto, and the services of the Seller shall be
rendered as an independent contractor and not as agent for the
Purchaser.
Section
7.6Counterparts.
This
Agreement may be executed in two or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original and such counterparts together shall constitute
one
and the same agreement.
Section
7.7Further
Agreements.
The
Purchaser, the Responsible Party and the Seller each agree to execute and
deliver to the other such additional documents, instruments or agreements as
may
be necessary or appropriate to effectuate the purposes of this
Agreement.
Section
7.8Intention
of the Parties.
It is
the intention of the parties that the Purchaser is purchasing, and the Seller
is
selling, the Mortgage Loans, rather than a loan by the Purchaser to the Seller
secured by the Mortgage Loans. Accordingly, the parties hereto each intend
to
treat this transaction with respect to the Mortgage Loans for federal income
tax
purposes as a sale by the Seller, and a purchase by the Purchaser, of the
Mortgage Loans. The Purchaser will have the right to review the Mortgage Loans
and the Related Documents to determine the characteristics of the Mortgage
Loans
which will affect the federal income tax consequences of owning the Mortgage
Loans and the Seller will cooperate with all reasonable requests made by the
Purchaser in the course of such review.
Section
7.9Successors
and Assigns; Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Responsible Party, the Purchaser and their respective successors
and
assigns. The obligations of the Seller and the Responsible Party under this
Agreement cannot be assigned or delegated to a third party without the consent
of the Purchaser, which consent shall be at the Purchaser’s sole discretion. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of selling them to the Issuing Entity who will in turn pledge
the Mortgage Loans to the Indenture Trustee for the benefit of the Noteholders.
As an inducement to the Purchaser to purchase the Mortgage Loans, the Seller
and
the Responsible Party acknowledge and consent to (i) the assignment by the
Purchaser to the Issuing Entity of all of the Purchaser’s rights against the
Seller and the Responsible Party pursuant to this Agreement and to the
enforcement or exercise of any right or remedy against the Seller and the
Responsible Party pursuant to this Agreement as assigned by the Purchaser and
(ii) the assignment by the Issuing Entity to the Indenture Trustee of such
rights and to the enforcement or exercise of any right or remedy by the
Indenture Trustee, or the Servicer acting pursuant to the Servicing Agreement,
against the Seller and the Responsible Party pursuant to this Agreement as
assigned by the Issuing Entity. Such enforcement of a right or remedy by the
Issuing Entity, the Owner Trustee, the Servicer or the Indenture Trustee, as
applicable, shall have the same force and effect as if the right or remedy
had
been enforced or exercised by the Purchaser directly.
Section
7.10Survival.
The
representations and warranties made herein by the Seller and the Responsible
Party and the provisions of Article V hereof shall survive the purchase of
the
Mortgage Loans hereunder.
Section
7.11Third
Party Beneficiary.
The
Indenture Trustee shall be deemed a third-party beneficiary of this Agreement
to
the same extent as if it were a party hereto, and shall have the right to
enforce the provisions of this Agreement.
IN
WITNESS WHEREOF, the Seller, the Responsible Party and the Purchaser have caused
their names to be signed to this Mortgage Loan Purchase Agreement by their
respective officers thereunto duly authorized as of the day and year first
above
written.
NEW
CENTURY MORTGAGE SECURITIES
LLC
as
Purchaser
By:
/s/
Kevin Cloyd
Name:
Kevin
Cloyd
Title:
President
NEW
CENTURY CREDIT CORPORATION
as
Seller
By:
/s/
Kevin Cloyd
Name:
Kevin
Cloyd
Title:
President
NC
CAPITAL CORPORATION
as
Responsible Party
By:
/s/
Kevin Cloyd
Name:
Kevin
Cloyd
Title:
President
EXHIBIT
A
MORTGAGE
LOAN SCHEDULE
SEE
EXHIBIT A TO SERVICING AGREEMENT
EXHIBIT
B
FORM
OF
LOST NOTE AFFIDAVIT
Loan
#:
____________
Borrower:
_____________
LOST
NOTE
AFFIDAVIT
I,
as
____________________ of ______________________, a _______________ corporation
am
authorized to make this Affidavit on behalf of _____________________ (the
“Seller”). In connection with the administration of the Mortgage Loans held by
____________________, a _________________ corporation as Seller on behalf of
New
Century Mortgage Securities, Inc. (the “Purchaser”), _____________________ (the
“Deponent”), being duly sworn, deposes and says that:
1.
The
Seller’s address is:
_____________________
_____________________
_____________________
2.
The
Seller previously delivered to the Purchaser a signed Initial
Certification with respect to such Mortgage and/or Assignment of
Mortgage.
3.
Such
Mortgage Note and/or Assignment of Mortgage was assigned or sold
to the
Purchaser by ________________________, a ____________ corporation
pursuant
to the terms and provisions of a Mortgage Loan Purchase Agreement
dated as
of __________ __, _____.
4.
Such
Mortgage Note and/or Assignment of Mortgage is not outstanding pursuant
to
a request for release of Documents.
5.
Aforesaid
Mortgage Note and/or Assignment of Mortgage (the “Original”) has been
lost.
6.
Deponent
has made or caused to be made a diligent search for the Original
and has
been unable to find or recover same.
7.
The
Seller was the Seller of the Original at the time of the
loss.
8.
Deponent
agrees that, if said Original should ever come into Seller’s possession,
custody or power, Seller will immediately and without consideration
surrender the Original to the Purchaser.
9.
Attached
hereto is a true and correct copy of (i) the Note, endorsed in blank
by
the Mortgagee and (ii) the Mortgage or Deed of Trust (strike one)
which
secures the Note, which Mortgage or Deed of Trust is recorded in
the
county where the property is located.
10.
Deponent
hereby agrees that the Seller (a) shall indemnify and hold harmless
the
Purchaser, its successors and assigns, against any loss, liability
or
damage, including reasonable attorney’s fees, resulting from the
unavailability of any Notes, including but not limited to any loss,
liability or damage arising from (i) any false statement contained
in this
Affidavit, (ii) any claim of any party that has already purchased
a
mortgage loan evidenced by the Lost Note or any interest in such
mortgage
loan, (iii) any claim of any borrower with respect to the existence
of
terms of a mortgage loan evidenced by the Lost Note on the related
property to the fact that the mortgage loan is not evidenced by an
original note and (iv) the issuance of a new instrument in lieu thereof
(items (i) through (iv) above hereinafter referred to as the “Losses”) and
(b) if required by any Rating Agency in connection with placing such
Lost
Note into a securitization, shall obtain a surety from an insurer
acceptable to the applicable Rating Agency to cover any Losses with
respect to such Lost Note.
11.
This
Affidavit is intended to be relied upon by the Purchaser, its successors
and assigns. _____________________, a ______________ corporation
represents and warrants that is has the authority to perform its
obligations under this Affidavit of Lost
Note.
Executed
this ____ day, of ___________ _____.
SELLER
By:
Name:
Title:
On
this
_____ day of ________, _____, before me appeared _________________ to me
personally known, who being duly sworn did say that he is the
_____________________ of ____________________ a ______________ corporation
and
that said Affidavit of Lost Note was signed and sealed on behalf of such
corporation and said acknowledged this instrument to be the free act and deed
of
said corporation.
Signature:
[Seal]
Dates Referenced Herein and Documents Incorporated by Reference
