Document/Exhibit Description Pages Size
1: 8-K Current Report 10 35K
2: EX-4.1 Pooling and Servicing Agreement 416 1.51M
3: EX-99.1 Mortgage Loan Purchase Agreement 44 149K
12: EX-99.10 Assignment, Assumption and Recognition Agreement 34 134K
13: EX-99.11 Seller's Warranties and Servicing Agreement 127 454K
14: EX-99.12 Assignment, Assumption and Recognition Agreement 23 79K
15: EX-99.13 Mortgage Servicing Purchase and Sale Agreement 118 332K
16: EX-99.14 Assignment, Assumption and Recognition Agreement 46 166K
17: EX-99.15 Assignment, Assumption and Recognition Agreement 3 16K
18: EX-99.16 Master Mortgage Loan Purchase and Servicing 91 301K
Agreement
19: EX-99.17 Assignment, Assumption and Recognition Agreement 45 155K
20: EX-99.18 Assignment, Assumption and Recognition Agreement 3 14K
21: EX-99.19 Mortgage Loan Flow Purchase, Sale & Servicing 48 230K
Agreement
4: EX-99.2 Assignment, Assumption and Recognition Agreement 27 91K
5: EX-99.3 Master Seller's Warranties and Servicing Agreement 125 492K
6: EX-99.4 Assignment, Assumption and Recognition Agreement 20 68K
7: EX-99.5 Mortgage Loan Purchase Agreement 44 144K
8: EX-99.6 Regulation Ab Amendment 13 44K
9: EX-99.7 Mortgage Loan Purchase Agreement 50 163K
10: EX-99.8 Servicing Agreement 60 223K
11: EX-99.9 Regulation Ab Amendment to Servicing Agreement 37 121K
EX-99.16 — Master Mortgage Loan Purchase and Servicing Agreement
Exhibit Table of Contents
EXHIBIT 99.16
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
among
MERRILL LYNCH MORTGAGE HOLDINGS INC.
Purchaser,
GREENPOINT MORTGAGE FUNDING INC.
Seller
and
TERWIN ADVISORS, LLC
Owner of Servicing Rights
Dated as of April 1, 2003
Conventional Fixed and Adjustable Rate Mortgage Loans
MLBUSA 2003-1
Flow Delivery Program
TABLE OF CONTENTS
[Download Table]
Page
----
SECTION 1. Definitions.................................................. 2
SECTION 2. Agreement to Purchase........................................ 16
SECTION 3. Mortgage Loan Schedules...................................... 16
SECTION 4. Purchase Price............................................... 16
SECTION 5. Examination of Mortgage Files................................ 16
SECTION 6. Conveyance from Seller to Initial Purchaser.................. 17
Subsection 6.01 Conveyance of Mortgage Loans; Possession of Servicing
Files................................................ 17
Subsection 6.02 Books and Records.................................... 18
Subsection 6.03 Delivery of Mortgage Loan Documents.................. 18
SECTION 7. Representations, Warranties and Covenants of the Seller:
Remedies for Breach.......................................... 19
Subsection 7.01 Representations and Warranties Respecting the
Seller............................................... 19
Subsection 7.02 Representations and Warranties Regarding Individual
Mortgage Loans....................................... 22
Subsection 7.03 Remedies for Breach of Representations and
Warranties........................................... 32
Subsection 7.04 Repurchase of Certain Mortgage Loans................. 34
SECTION 8. Closing...................................................... 35
SECTION 9. Closing Documents............................................ 35
SECTION 10. Costs........................................................ 36
SECTION 11. Seller's Servicing Obligations............................... 36
SECTION 12. Removal of Mortgage Loans from Inclusion under This Agreement
Upon a Whole Loan Transfer or a Pass-Through Transfer on One
or More Reconstitution Dates................................. 36
SECTION 13. The Seller................................................... 40
Subsection 13.01 Additional Indemnification by the Seller............. 40
Subsection 13.02 Merger or Consolidation of the Seller................ 41
Subsection 13.03 Limitation on Liability of the Seller and Others..... 41
Subsection 13.04 Seller Not to Resign................................. 41
Subsection 13.05 No Transfer of Servicing............................. 42
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[Download Table]
SECTION 14. Default...................................................... 42
Subsection 14.01 Events of Default.................................... 42
Subsection 14.02 Waiver of Defaults................................... 44
SECTION 15. Termination.................................................. 44
SECTION 16. Successor to the Seller...................................... 44
SECTION 17. Financial Statements......................................... 45
SECTION 18. Mandatory Delivery: Grant of Security Interest............... 46
SECTION 19. Notices...................................................... 46
SECTION 20. Severability Clause.......................................... 47
SECTION 21. Counterparts................................................. 47
SECTION 22. Governing Law................................................ 47
SECTION 23. Intention of the Parties..................................... 47
SECTION 24. Successors and Assigns....................................... 48
SECTION 25. Waivers...................................................... 48
SECTION 26. Exhibits..................................................... 48
SECTION 27. Nonsolicitation.............................................. 48
SECTION 28. General Interpretive Principles.............................. 49
SECTION 29. Reproduction of Documents.................................... 49
SECTION 30. Further Agreements........................................... 49
SECTION 32. Survival..................................................... 49
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EXHIBITS
EXHIBIT 1 SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 2 FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 3 SECURITY RELEASE CERTIFICATION
EXHIBIT 4 FORM OF WARRANTY BILL OF SALE
EXHIBIT 5 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 6 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 7 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 8 SERVICING ADDENDUM
EXHIBIT 9 FORM OF PURCHASE PRICE AND TERMS LETTER
EXHIBIT 10 ANNUAL CERTIFICATION
SCHEDULE I FINAL MORTGAGE LOAN SCHEDULE
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MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT (the
"Agreement"), dated as of April 1, 2003, by and among Merrill Lynch Mortgage
Holdings Inc., having an office at World Financial Center, South Tower, New
York, New York 10281 (the "Initial Purchaser", and the Initial Purchaser or the
Person, if any, to which the Initial Purchaser has assigned its rights and
obligations hereunder as Purchaser with respect to a Mortgage Loan, and each of
their respective successors and assigns, the "Purchaser"), Greenpoint Mortgage
Funding Inc., having an office at 100 Wood Hollow Drive, Novato, California
94945 (the "Seller") and Terwin Advisors, LLC, having an office at [__________]
("Terwin").
WITNESSETH:
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 conventional fixed and adjustable rate residential first lien
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 Final Mortgage Loan Schedule for
the related Mortgage Loan Package, which is to be annexed hereto on each Closing
Date as Schedule I;
WHEREAS, Terwin owns the servicing rights with respect to the Mortgage
Loans;
WHEREAS, the Purchaser, the Seller and Terwin wish to prescribe the
manner of the conveyance, servicing and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the Seller,
the Purchaser desires to sell some or all of the Mortgage Loans to one or more
purchasers as a whole loan transfer in a whole loan or participation format or a
public or private mortgage-backed securities transaction;
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, the Seller and
Terwin 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 such Adjustable Rate Mortgage Loan is adjusted in accordance with the
terms of the related Mortgage Note.
Agreement: This Master Mortgage Loan Purchase and Servicing Agreement
including all exhibits, schedules, amendments and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
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 Fannie Mae and Freddie Mac, 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 Fannie Mae and Freddie
Mac.
Approved Flood Policy Insurer: Any of the following insurers:
[______].
Approved Tax Service Contract Provider: Any of the following
providers:[______________________].
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 [California] or
the State of New York are authorized or obligated by law or executive order to
be closed.
Buydown Mortgage Loan: A Mortgage Loan in which buydown funds are used
to pay a portion of the interest payable on the Mortgage Loan for a specified
period of time.
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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 Final 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, and applicable U.S. Department of Treasury regulations issued pursuant
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.
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 "Greenpoint Mortgage Funding Inc., as servicer, in trust
for the Purchaser and various Mortgagors, Fixed and Adjustable Rate Mortgage
Loans", established at a financial institution acceptable to the Purchaser.
Custodial Agreement: The agreement between the Initial Purchaser and
the Custodian, governing the retention of the originals of the Mortgage Loan
Documents.
Custodian: The custodian designated by the Initial Purchaser under the
Custodial Agreement, or its successor in interest or assigns, or any successor
to the Custodian under the Custodial Agreement.
Cut-off Date: The first day of the month in which the related Closing
Date occurs.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
Determination Date: With respect to each Remittance Date, the
fifteenth (15th) day of the calendar month in which such Remittance Date occurs
or, if such fifteenth (15th) day is not a Business Day, the Business Day
immediately preceding such fifteenth (15th) day.
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Disqualified Organization: An organization defined as such in Section
860E(e) of the Code.
Due Date: With respect to each Remittance Date, the first day of the
calendar month in which such Remittance 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: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance Date.
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 S&P or Prime-1 by Moody's (or a comparable rating if another rating
agency is specified by the Initial 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 "Greenpoint
Mortgage Funding Inc., as servicer, in trust for the Purchaser and various
Mortgagors, Fixed and Adjustable Rate Mortgage Loans," established at a
financial institution acceptable to the Purchaser.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, municipal charges, Primary Insurance
Policy premiums, fire and hazard insurance premiums, condominium charges 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 15.01.
Fannie Mae: Fannie Mae or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final 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 floppy disk, 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;
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(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: single family residence, a 2-4 family residence, a condominium
unit or a unit in a planned unit development;
(6) the original months to maturity;
(7) the original date of the Mortgage Loan and the remaining months to
maturity from the Cut-off Date, based on the original amortization
schedule;
(8) the Loan-to-Value Ratio at origination;
(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 Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the close
of business on the Cut-off Date;
(17) with respect to each Adjustable Rate Mortgage Loan, the first
Mortgage Interest Rate Adjustment Date;
(18) with respect to each Adjustable Rate Mortgage Loan, the Gross
Margin;
(19) with respect to each Adjustable Rate Mortgage Loan, the Periodic
Rate Cap;
(20) a code indicating the purpose of the loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing);
(21) with respect to each Adjustable Rate Mortgage Loan, the Maximum
Mortgage Interest Rate under the terms of the Mortgage Note;
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(22) with respect to each Adjustable Rate Mortgage Loan, the Minimum
Mortgage Interest Rate under the terms of the Mortgage Note;
(23) the Mortgage Interest Rate at origination;
(24) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date immediately following the Cut-off Date;
(25) with respect to each Adjustable Rate Mortgage Loan, the Index;
(26) the date on which the first Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date;
(27) a code indicating whether the Mortgage Loan is an Adjustable Rate
Mortgage Loan or a Fixed Rate Mortgage Loan;
(28) a code indicating the documentation style (i.e., full,
alternative or reduced);
(29) a code indicating if the Mortgage Loan is subject to a Primary
Insurance Policy, and if it is, the PMI Policy certificate number and PMI
policy coverage percentage;
(30) a code indicating whether the Mortgage Loan is a Buydown Mortgage
Loan;
(31) a code indicating whether the Mortgage Loan is subject to the
Homeownership and Equity Protection Act of 1994;
(32) a code indicating whether the Mortgage Loan is subject to a
prepayment penalty and the term of such penalty;
(33) the Appraised Value of the Mortgaged Property;
(34) the sale price of the Mortgaged Property, if applicable;
(35) the date on which the Mortgage Loan was originated;
(36) the Mortgage Loan Remittance Rate as of the Cut-off Date, whether
or not collected;
With respect to the Mortgage Loan Package in the aggregate, the Final
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;
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(3) the weighted average Mortgage Interest Rate of the Mortgage Loans;
and
(4) the weighted average maturity of the Mortgage Loans.
Schedule I hereto shall be supplemented as of each Closing Date to
reflect the addition of the Final Mortgage Loan Schedule with respect to the
related Mortgage Loan Package.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller pursuant to this Agreement), a determination made by the Seller
that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Seller, in its reasonable good faith judgment, expects to
be finally recoverable in respect thereof have been so recovered. The Seller
shall maintain records, prepared by a servicing officer of the Seller, of each
Final Recovery Determination.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of
such Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation 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
Final 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.
HUD: The United States Department of Housing and Urban Development or
any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Final Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the interest rate thereon.
Initial Closing Date: The Closing Date on which the Initial Purchaser
purchases and the Seller sells the first Mortgage Loan Package hereunder.
Initial Purchaser: Merrill Lynch Mortgage Holdings Inc., or any
successor.
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 otherwise,
other than amounts received following the acquisition of REO Property.
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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 Final Mortgage Loan
Schedule and in the related Mortgage Note and is the maximum interest rate to
which the Mortgage Interest Rate on such Mortgage Loan may be increased.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the Seller
has designated or will designate MERS as, and has taken or will take such action
as is necessary to cause MERS to be, the mortgagee of record, as nominee for the
Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Custodian as the Investor on the MERS(R)
System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Final Mortgage Loan
Schedule and in the related Mortgage Note and is the minimum interest rate to
which the Mortgage Interest Rate on such Mortgage Loan may be decreased.
Monthly Advance: The aggregate of the advances made by the Seller on
any Remittance Date pursuant to Section 11.21.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
combined payment of principal and interest payable by a Mortgagor under the
related Mortgage Note on each Due Date.
Moody's: Moody's Investors Service, Inc. or its successor in interest.
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.
-8-
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit 5 annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement or the related
Purchase Price and Terms Letter.
Mortgage Interest Rate: With respect to each Fixed Rate Mortgage Loan,
the fixed annual rate of interest provided for in the related Mortgage Note and,
with respect to each Adjustable Rate Mortgage Loan, the annual rate that
interest accrues on such Adjustable Rate Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each first lien, residential mortgage loan, sold,
assigned and transferred to the Purchaser pursuant to this Agreement and the
related Purchase Price and Terms Letter and identified on the Final 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 following documents:
(1) The original Mortgage Note endorsed, "Pay to the order of
______________, without recourse" and signed in the name of the Seller by
an authorized officer of the Seller. If the Mortgage Loan was acquired by
the Seller in a merger or other type of acquisition, the endorsement must
be by "[Seller], successor [by merger to or in interest to, as applicable]
[name of predecessor]"; and if the Mortgage Loan was acquired or originated
by the Seller while doing business under another name, the endorsement must
be by "[Seller], successor in interest to [previous name]." The Mortgage
Note shall include all intervening endorsements showing a complete chain of
title from the originator to the Seller;
(2) The original recorded Mortgage, with evidence of recording
thereon, or, if the original Mortgage has not yet been returned from the
recording office, a copy of the original Mortgage certified by the previous
owner to be a true copy of the original of the Mortgage that has been
delivered for recording in the appropriate recording office of the
jurisdiction in which the Mortgaged Property is located;
(3) Except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording. The Assignment of Mortgage shall be
delivered in blank. If the Mortgage Loan was acquired by the Seller in a
merger, the Assignment of Mortgage must be made by "[Seller], successor by
merger to [name of predecessor]". If the Mortgage Loan was acquired or
originated by the Seller while doing business under another name, the
Assignment of Mortgage must be by "[Seller], formerly known as [previous
name]";
(4) The originals of all intervening assignments of mortgage (if any)
evidencing a complete chain of assignment from the Seller (or MERS with
respect to each MERS Designated Mortgage Loan) to the last endorsee with
evidence of recording
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thereon, or if any such intervening assignment has not been returned from
the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of mortgage, the
Seller shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay
caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing
attorney) stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for recordation and
that such original recorded intervening assignment of mortgage or a copy of
such intervening assignment of mortgage certified by the appropriate public
recording office to be a true and complete copy of the original recorded
intervening assignment of mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Seller; or (ii) in the case of an
intervening assignment where a public recording office retains the original
recorded intervening assignment or in the case where an intervening
assignment is lost after recordation in a public recording office, a copy
of such intervening assignment certified by such public recording office to
be a true and complete copy of the original recorded intervening
assignment;
(5) The original policy of title insurance (or a preliminary title
report if the original title insurance policy has not been received from
the title insurance company);
(6) With respect to a Mortgage Loan that, according to the Final
Mortgage Loan Schedule is covered by a primary mortgage insurance policy,
the original or a copy of the policy of primary mortgage insurance;
(7) The original of any guarantee executed in connection with the
Mortgage Note;
(8) The original of any security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage;
(9) Originals of all assumption, modification, consolidation or
extension agreements, if any; and
(10) Such other documents as the Purchaser may require.
Mortgage Loan Package: The Mortgage Loans listed on a Final Mortgage
Loan Schedule, delivered to the Custodian and the Purchaser 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 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.
-10-
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.
Net Mortgage Rate: With respect to any Mortgage Loan (or the related
REO Property), as of any date of determination, a per annum rate of interest
equal to the then applicable Mortgage Interest Rate for such Mortgage Loan minus
the Servicing Fee Rate.
Nonrecoverable Monthly Advance: Any Monthly Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Seller, will not, or, in the case of a
proposed Monthly Advance, would not be, ultimately recoverable from related late
payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
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, and delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be salaried
counsel for the Person on behalf of whom the opinion is being given, reasonably
acceptable to each Person to whom such opinion is addressed.
Pass-Through Transfer: The sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a trust to be formed as part of a publicly
issued or privately placed mortgage-backed securities transaction.
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 Final Mortgage Loan Schedule and in the related
Mortgage Note, which is the maximum amount by which the Mortgage Interest Rate
for such Adjustable Rate 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.
Person: An individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Preliminary Mortgage Loan Schedule:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
(3) the Mortgage Interest Rate at origination;
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(4) the Mortgage Interest Rate in effect immediately following the
Cut-off Date;
(5) the original months to maturity;
(6) the original date of the Mortgage Loan and the remaining months to
maturity from the Cut-off Date, based on the original amortization
schedule;
(7) the stated maturity date;
(8) the amount of the Monthly Payment at origination;
(9) the amount of the Monthly Payment as of the Cut-off Date;
(10) the Stated Principal Balance of the Mortgage Loan as of the close
of business on the Cut-off Date;
(11) a code indicating whether the Mortgaged Property is
owner-occupied; and
(12) a code indicating the documentation style.
Preliminary Servicing Period: With respect to any Mortgage Loans, the
period commencing on the related Closing Date and ending on the date the Seller
enters into Reconstitution Agreements which amend or restate the servicing
provisions of this Agreement.
Primary Insurance Policy: A policy of primary mortgage guaranty
insurance issued by a Qualified Insurer.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any prepayment penalty or premium thereon, which is not accompanied by an amount
of interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller pursuant to the related Purchase Price and Terms Letter
in exchange for the Mortgage Loans purchased on such Closing Date as calculated
as provided in Section 4.
Purchase Price and Terms Letter: With respect to any 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. A Purchase Price and Terms Letter may
relate to more than one Mortgage Loan Package to be purchased on one or more
Closing Dates hereunder.
Qualified Depository: A depository the accounts of which are insured
by the FDIC through the BIF or the SAIF and the debt obligations of which are
rated AA or better by Standard & Poor's Corporation.
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Qualified Insurer: An insurer acceptable to Fannie Mae and Freddie Mac
which is rated A-/VIII or better in the current Best's Key Rating Guide
("Best's").
Qualified Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Interest Rate not
less than (and not more than one percentage point in excess of) the Mortgage
Interest Rate of the Deleted Mortgage Loan, (iii) have a Net Mortgage Rate equal
to the Net Mortgage Rate of the Deleted Mortgage Loan, (iv) have a remaining
terms to maturity not greater than (and not more than one year less than) that
of the Deleted Mortgage Loan, (v) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (vi) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (vii) be covered under a Primary Insurance Policy
if such Qualified Substitute Mortgage Loan has a Loan-to-Value Ratio in excess
of 80%, (viii) conform to each representation and warranty set forth in Section
7.02 of this Agreement and (ix) be the same type of mortgage loan (i.e. fixed or
adjustable rate with the same Gross Margin and Index as the Deleted Mortgage
Loan). In the event that one or more mortgage loans are substituted for one or
more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates, the Net Mortgage Rates described in
clause (iii) hereof shall be satisfied as to each such mortgage loan, the terms
described in clause (iv) shall be determined on the basis of weighted average
remaining terms to maturity, the Loan-to-Value Ratios described in clause (vi)
hereof shall be satisfied as to each such mortgage loan and, except to the
extent otherwise provided in this sentence, the representations and warranties
described in clause (viii) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.
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.
Reconstitution Agreements: The agreement or agreements entered into by
the Seller and the Purchaser and/or certain third parties on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with a Whole Loan Transfer or a Pass-Through Transfer
as provided in Section 12.
Reconstitution Date: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Whole Loan Transfer or Pass-Through
Transfer pursuant to Section 12 hereof.
Record Date: With respect to each Remittance Date, the last Business
Day of the month immediately preceding the month in which such Remittance Date
occurs.
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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.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs, which appear in Sections 860A through 860G of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The eighteenth (18th) day of each month, commencing
on the eighteenth 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
first Business Day immediately following such eighteenth (18th) day.
REO Account: The separate trust account or accounts created and
maintained pursuant to this Agreement which shall be entitled "Greenpoint
Mortgage Funding Inc., in trust for the Purchaser, as of [date of acquisition of
title], Fixed and Adjustable Rate 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 Stated Principal Balance of such Mortgage Loan, 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 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 Fannie Mae eligible condominium project, or (iv) a
detached one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Servicing Addendum: The terms and conditions attached hereto as
Exhibit 8 which will govern the servicing of the Mortgage Loans by Seller during
the Preliminary Servicing Period.
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
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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 each Mortgage Loan, the amount of the
annual servicing fee the Purchaser shall pay to the Seller, which shall, for
each month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate
and (b) the unpaid principal balance of the Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of the same principal amount and period
respectively which any related interest payment on a Mortgage Loan is computed.
The obligation of the Purchaser to pay the Servicing Fee is limited to, and
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds and other proceeds, to the extent permitted
by Section 11.05) of related Monthly Payment collected by the Seller, or as
otherwise proved under Section 11.05. If the Preliminary Servicing Period
includes any partial month, the Servicing Fee for such month shall be pro rated
at a per diem rate based upon a 30-day month.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.375% per
annum.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Seller consisting of originals of all documents in the Mortgage File
which are not delivered to the Purchaser or the Custodian and copies of the
Mortgage Loan Documents.
Servicing Strip: With respect to each Mortgage Loan, the amount of the
fee the Seller shall pay to Terwin pursuant to Section 13, which shall, for each
month, be equal to the excess, if any, of the Servicing Fee, over the sum of (i)
the Subservicing Fee and (ii) any amounts paid in such month by the Seller
pursuant to Section 11.04(xi).
S&P: Standard & Poor's Ratings Services, a Division of the McGraw-Hill
Companies, Inc. or its successor in interest.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) 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, minus (ii)
all amounts previously distributed to the Purchaser with respect to the related
Mortgage Loan representing payments or recoveries of principal.
Subservicing Fee: With respect to each Mortgage Loan, the amount of
the fee retained by the Seller, as sub-servicer pursuant to Section 13, which
shall, for each month, be equal to $7.00 per Mortgage Loan serviced by the
Seller, as such fee may be modified pursuant to Section 13.
Termination Fee: [_____________________________].
Warranty Bill of Sale: A Warranty Bill of Sale with respect to the
Mortgage Loans purchased on a Closing Date in the form annexed hereto as Exhibit
4.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third party, which sale or transfer is not
a Pass-Through Transfer.
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SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the
Purchaser agrees to purchase, from time-to-time, Mortgage Loans having an
aggregate principal balance on the related Cut-off Date in an amount as set
forth in the related Purchase Price and Terms 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. The obligation of the Purchaser to purchase any Mortgage Loan from
the Seller on any particular Closing Date shall be subject to the satisfaction
of the conditions precedent to the Purchaser's obligation to purchase set forth
in Section 8.
SECTION 3. Mortgage Loan Schedules. Prior to the date on which the
Seller and the Purchaser execute a Purchase Price and Terms Letter, the Seller
shall provide the Purchaser with the Preliminary Mortgage Loan Schedule. The
Seller shall deliver the Final 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 the related Closing Date.
SECTION 4. Purchase Price. The Purchase Price for each Mortgage Loan
listed on the related Final Mortgage Loan Schedule shall be the percentage of
par as stated in the related Purchase Price and Terms 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 Purchase Price and
Terms Letter, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Initial
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 the
Net Mortgage Rate from the related Cut-off Date through the day prior to the
related Closing Date, both inclusive.
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
Remittance 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 Initial Purchaser under the related Purchase Price and Terms
Letter to underwrite the Mortgage Loans and review the Mortgage Files prior to
the Closing Date, prior to the related
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Closing Date, the Seller shall (a) deliver to the Custodian 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 Initial Purchaser for examination at the Seller's offices or
such other location as shall otherwise be agreed upon by the Initial Purchaser
and the Seller. Such examination may be made by the Initial Purchaser or its
designee at any reasonable time before or after the related Closing Date. If the
Initial Purchaser makes such examination prior to the related Closing Date and
identifies any Mortgage Loans that do not conform to the terms of the related
Purchase Price and Terms Letter or the Initial Purchaser's underwriting
standards, such Mortgage Loans may, at the Initial Purchaser's option, be
rejected for purchase by the Initial Purchaser. If not purchased by the Initial
Purchaser, such Mortgage Loans shall be deleted from the related Final Mortgage
Loan Schedule and may be replaced by a Qualified Substitute Mortgage Loan
pursuant to Section 7. The Initial 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 Initial
Purchaser has conducted or has determined not to conduct any partial or complete
examination of the Mortgage Files shall not affect the Initial 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 Initial Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of Servicing
Files. The Seller, simultaneously with the payment of the Purchase Price, shall
execute and deliver to the Initial Purchaser a Warranty Bill of Sale with
respect to the related Mortgage Loan Package in the form attached hereto as
Exhibit 4. 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.
The contents of each Mortgage File not delivered to the
[Custodian][Purchaser] are and shall be held in trust by the Seller for the
benefit of the Purchaser as the owner thereof. The Seller shall maintain a
Servicing File consisting of a copy of the contents of each Mortgage File and
the originals of the documents in each Mortgage File not delivered to the
[Custodian] [Purchaser]. The possession of each Servicing File by the Seller is
at the will of the Purchaser for the sole purpose of servicing the related
Mortgage Loan, and such retention and possession by the Seller is in a custodial
capacity only. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the related Mortgage File and Servicing
File shall vest immediately in the Purchaser, and the ownership of all records
and documents with respect to the related Mortgage Loan prepared by or which
come into the possession of the Seller shall vest immediately in the Purchaser
and shall be retained and maintained by the Seller, in trust, at the will of the
Purchaser and only in such custodial capacity. Each Servicing File shall be
segregated from the other books and records of the Seller and shall be marked
appropriately to reflect clearly the sale of the related Mortgage Loan to the
Purchaser. The Seller shall release its custody of the contents of any Servicing
File only in accordance with written instructions from
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the Purchaser, unless such release is required as incidental to the Seller's
servicing of the Mortgage Loans or is in connection with a repurchase of any
Mortgage Loan.
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, the Custodian 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.
The Seller shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Seller
shall note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be
made unless such transfer is in compliance with the terms hereof. For the
purposes of this Agreement, the Seller shall be under no obligation to deal with
any person with respect to this agreement or the Mortgage Loans unless the books
and records show such person as the owner of the Mortgage Loan. The Purchaser
may, subject to the terms of this Agreement, sell and transfer one or more of
the Mortgage Loans, provided, however, that (i) the transferee will not be
deemed to be a Purchaser hereunder binding upon the Seller unless such
transferee shall agree in writing to be bound by the terms of this Agreement and
an original counterpart of the instrument of hereto executed by the transferee
shall have been delivered to the Seller. The Purchaser also shall advise the
Seller of the transfer. Upon receipt of notice of the transfer, the Seller shall
mark its books and records to reflect the ownership of the Mortgage Loans of
such assignee, and shall release the previous Purchaser from its obligations
hereunder with respect to the Mortgage Loans sold or transferred.
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 Custodian
the Mortgage Loan Documents with respect to each Mortgage Loan to be purchased
and sold on the related Closing Date and set forth on the related Final Mortgage
Loan Schedule delivered with such Mortgage Loan Documents.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents for the related Closing Date, pursuant to an initial custody receipt
and initial certification of the Custodian.
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The Seller shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution, provided, however, that the Seller shall provide the Custodian
with a certified true copy of any such document submitted for recordation within
two 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 days of its submission for recordation.
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 date
hereof, as of the date of each respective Purchase Price and Terms Letter, and
as of each respective Closing Date or as of such date specifically provided
herein or in the applicable Warranty Bill of Sale:
(a) Due Organization and Authority. The Seller is duly organized,
validly existing and in good standing under the laws of the state of [________]
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 the Mortgage Loan in
accordance with the terms of this Agreement. 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;
(b) Ordinary Course of Business. 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 charter or articles of
incorporation or by-laws or any legal restriction 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. 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;
(c) Ability to Service. The Seller is an approved seller/servicer of
conventional residential Mortgage Loans for Fannie Mae and Freddie Mac, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of
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the same type as the Mortgage Loans. The Seller is in good standing to sell and
service mortgage loans for Fannie Mae and Freddie Mac and is a HUD approved
mortgagee pursuant to Section 203 of the National Housing Act. No event has
occurred, including but not limited to a change in insurance coverage, which
would make the Seller unable to comply with Fannie Mae, Freddie Mac or HUD
eligibility requirements or which would require notification to Fannie Mae,
Freddie Mac or HUD. The Seller is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the MERS Mortgage Loans for as long as such
Mortgage Loans are registered with MERS;
(d) Ability to Perform. 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. The Seller is solvent and the sale of the Mortgage
Loans is not undertaken to hinder, delay or defraud any of the Seller's
creditors;
(e) Documents Delivered to Custodian. The Mortgage Loan Documents have
been delivered to the Custodian. With respect to each Mortgage Loan, the Seller
is in possession of a complete Mortgage File in compliance with Exhibit 5,
except for such documents as have been delivered to the Custodian;
(f) Record Title. 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;
(g) No Litigation Pending. 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 the validity or enforceability of, this Agreement;
(h) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the 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 Closing Date;
(i) Ordinary Course of Business. 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 in effect in any jurisdiction;
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(j) Accurate Delinquency and Foreclosure Information. 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;
(k) No Untrue Information. 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;
(l) Selection Process. The Mortgage Loans were selected from among the
outstanding adjustable rate one- to four-family mortgage loans in the Seller's
portfolio at the Closing Date as to which the representations and warranties set
forth in Section 7.02 could be made and such selection was not made in a manner
so as to affect adversely the interests of the Purchaser;
(m) Pool Characteristics. The Pool Characteristics of the Mortgage
Loans purchased on each Closing Date shall conform to the characteristics
described in the Warranty Bill of Sale, attached as Exhibit 4 hereto.
(n) Sale Treatment. The Seller has determined that the disposition of
the Mortgage Loans pursuant to this Agreement will be afforded sale treatment
for accounting and tax purposes;
(o) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position at the end of each such period of the Seller and
its subsidiaries and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has delivered
information as to its loan gain and loss experience for the immediately
preceding three-year period, in each case with respect to mortgage loans owned
by it and such mortgage loans serviced for others during such period, and all
such information so delivered is true and correct in all material respects.
There has been no change in the business, operations, financial condition,
properties or assets of the Seller since the date of the Seller's financial
statements that would have a material adverse effect on its ability to perform
its obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(p) No Brokers' Fees. The Seller has not dealt with any broker,
investment banker, agent or other person that may be entitled to any commission
or compensation in connection with the sale of the Mortgage Loans;
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(q) Fair Consideration. The consideration received by the Seller upon
the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans; and
(r) Reasonable Servicing Fee. The Seller acknowledges and agrees that
the Servicing Fee, as calculated at the Servicing Fee Rate, represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Seller, for accounting and tax purposes,
as compensation for the servicing and administration of the Mortgage Loans
pursuant to this Agreement.
Subsection 7.02 Representations and Warranties Regarding Individual
Mortgage Loans. The Seller hereby represents and warrants to the Purchaser that,
as to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Final Mortgage Loan Schedule and the tape delivered to the Purchaser is
complete, true and correct;
(b) Mortgage Loans in Compliance with Purchase Price and Terms Letter.
The Mortgage Loan is in compliance with all requirements set forth in the
related Purchase Price and Terms Letter, and the characteristics of the related
Mortgage Loan Package as set forth in the related Purchase Price and Terms
Letter are true and correct;
(c) Payments Current. All payments required to be made up to the close
of business on the Closing Date for such Mortgage Loan under the terms of the
Mortgage Note have been made and credited; the Seller has not advanced funds, or
induced, solicited or knowingly received any advance of funds from a party other
than the owner of the related Mortgaged Property, directly or indirectly, for
the payment of any amount required by the Mortgage Note or Mortgage; and there
has been no delinquency, exclusive of any period of grace, in any payment by the
Mortgagor thereunder during the last twelve months;
(d) No Outstanding Charges. There are no defaults by the Seller or any
prior originator in complying with the terms of the Mortgage, and all taxes,
ground rents, governmental assessments, insurance premiums, leasehold payments,
water, sewer and municipal charges which previously became due and owing have
been paid, or escrow funds have been established in an amount sufficient to pay
for every such escrowed item which remains unpaid and which has been assessed
but is not yet due and payable. Neither the Seller or, to the best of the
Seller's knowledge, any prior originator or servicer has advanced funds, or
induced, solicited or knowingly received any advance from any party other than
the Mortgagor, directly or indirectly, for the payment of any amount due under
the Mortgage Loan;
(e) Original Terms Unmodified. The terms of the Mortgage Note and the
Mortgage have not been impaired, waived, altered or modified in any respect,
except by written instruments, recorded in the applicable public recording
office if necessary to maintain the lien priority of the Mortgage, and which
have been delivered to the Custodian; the substance of any such waiver,
alteration or modification has been approved by the insurer under the Primary
Insurance Policy, if any, and the title insurer, to the extent required by the
related policy, and is
-22-
reflected on the related Final 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, the title
insurer, to the extent required by the policy, and which assumption agreement
has been delivered to the Custodian and the terms of which are reflected in the
related Final Mortgage Loan Schedule;
(f) No Defenses. 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 Note
or 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, to the best of the Seller's knowledge, no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto; and the
Mortgagor was not a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(g) Hazard Insurance. All buildings or other customarily insured
improvements upon the Mortgaged Property are insured by a Qualified Insurer
acceptable to Fannie Mae and Freddie Mac and to lending institutions 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 are in full force and effect and 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 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
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering the common facilities of a planned unit development. The hazard
insurance policy is the valid and binding obligation of the insurer, is in full
force and effect, and will be in full force and effect and inure to the benefit
of the Purchaser upon the consummation of the transactions contemplated by this
Agreement. The Seller has not engaged in, and has no knowledge of the
Mortgagor's or any Subservicer's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
-23-
(h) Compliance with Applicable Law. 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 Loan have been complied with; the
Seller maintains, and shall maintain, evidence of such compliance as required by
applicable law or regulation and shall make such evidence available for
inspection at the Seller's office during normal business hours upon reasonable
advance notice;
(i) No Satisfaction of Mortgage. 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. The Seller has
not waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be in default,
nor has the Seller waived any default resulting from any action or inaction by
the Mortgagor;
(j) Valid First Lien. The Mortgage is a valid, existing and
enforceable first lien on the Mortgaged Property, including all improvements on
the Mortgaged Property, free and clear of all adverse claims, liens and
encumbrances having priority over the lien of the Mortgage, 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,
and (c) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, existing and enforceable first lien and first
priority security interest on the property described therein and the Seller has
full right to sell and assign the same to the Purchaser. The Mortgaged Property
was not, as of the date of origination of the Mortgage Loan, subject to a
mortgage, deed of trust, deed to secure debt or other security instrument
creating a lien subordinate to the lien of the Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the related
Mortgage are original and genuine and each is the legal, valid and binding
obligation of the maker thereof, enforceable in accordance with its terms. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact nor omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. To the best of the Seller's knowledge, no
fraud was committed in connection with the origination of the Mortgage Loan. The
Seller has reviewed all of the documents constituting the Servicing File and has
made such inquiries as it deems necessary to make and confirm the accuracy of
the representations set forth herein;
(l) Regarding the Mortgagor. To the best of the Seller's knowledge,
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
-24-
and the Mortgage have been duly and properly executed by such parties. The
Mortgagor is one or more natural persons and/or trustee for an Illinois land
trust or a trustee under a "living trust" and such "living trust" is in
compliance with Fannie Mae guidelines for such trusts;
(m) Full Disbursement of Proceeds. The proceeds of the Mortgage Loan
have been fully disbursed to or for the account of the Mortgagor and there is no
obligation for the Mortgagee to advance additional funds thereunder and any and
all requirements as to completion of any on-site or off-site improvement and as
to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage
Note or Mortgage;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) in
compliance with any and all applicable "doing business" and licensing
requirements of the laws of the state wherein the Mortgaged Property is located;
(o) Title Insurance. The Mortgage Loan is covered by an ALTA lender's
title insurance policy (which, in the case of an Adjustable Rate Mortgage Loan
has an adjustable rate mortgage endorsement in the form of ALTA 6.0 or 6.1)
acceptable to Fannie Mae and 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 (j) 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, with respect to any Adjustable Rate Mortgage Loan, against any loss by
reason of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment in the Mortgage Interest
Rate and Monthly Payment. Where required by the state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress 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. To the best of the Seller's knowledge, 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;
(p) No Defaults. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach, violation or
event of acceleration;
(q) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law
-25-
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;
(r) Location of Improvements; No Encroachments. 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. No improvement located on or being part of the Mortgage
Property is in violation of any applicable zoning law or regulation;
(s) Origination. The Mortgage Loan was originated by the Seller 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 pursuant
to Sections 203 and 211 of the National Housing Act. The Seller and all other
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;
(t) Payment Terms. Principal payments on the Mortgage Loan commenced
no more than sixty days after the proceeds of the Mortgage Loan were disbursed.
The Mortgage Loan bears interest at the Mortgage Interest Rate. With respect to
each Mortgage Loan, the Mortgage Note is payable on the first day of each month
in Monthly Payments, which, in the case of a Fixed Rate Mortgage Loan, are
sufficient to fully amortize the original principal balance over the original
term thereof and to pay interest at the related Mortgage Interest Rate, and, in
the case of an Adjustable Rate Mortgage Loan, are changed on each Adjustment
Date, and in any case, are sufficient to fully amortize the original principal
balance over the original term thereof and to pay interest at the related
Mortgage Interest Rate. The Index for each Adjustable Rate Mortgage Loan is as
defined in the related Purchase Price and Terms Letter. The Mortgage Note does
not permit negative amortization. No Mortgage Loan is a Convertible Mortgage
Loan and no Mortgage Loan is a simple interest Mortgage Loan;
(u) Collection Practices; Escrow Deposits; Interest Rate Adjustments.
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, to the best of the Seller's knowledge, 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 and no such escrow deposits or Escrow
Payments are being held by the Seller for any work on a Mortgaged Property which
has not been completed. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage Note. Any interest required to be paid pursuant to state and local law
has been properly paid and credited;
-26-
(v) Mortgaged Property Undamaged; No Condemnation Proceedings There is
no proceeding pending or, to the Seller's knowledge, threatened for the total or
partial condemnation of the Mortgaged Property and such property is in good
repair and is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty, so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended;
(w) Customary Provisions. The Mortgage and related Mortgage Note
contain customary and enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided thereby, including,
(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;
(x) Conformance with Agency and Underwriting Guidelines. The Mortgage
Loan was underwritten in accordance with the underwriting guidelines of the
Seller in effect at the time the Mortgage Loan was originated, which
underwriting guidelines have been reviewed and approved by the Seller prior to
the related Closing Date. The Mortgage Note and Mortgage are on forms acceptable
to Fannie Mae and Freddie Mac;
(y) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage on
the Mortgaged Property and the security interest of any applicable security
agreement or chattel mortgage referred to in (j) above;
(z) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property which satisfied the standards of Fannie Mae and Freddie Mac
and was made and signed, prior to the approval of the Mortgage Loan application,
by a qualified appraiser, duly appointed by the Seller, who had no interest,
direct or indirect in the Mortgaged Property or in any loan made on the security
thereof, whose compensation is not affected by the approval or disapproval of
the Mortgage Loan and who met the minimum qualifications of Fannie Mae and
Freddie Mac. Each appraisal of the Mortgage Loan was made in accordance with the
requirements of Title XI of the Federal Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated;
(aa) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(bb) No Buydown Provisions; No Graduated Payments or Contingent
Interests. No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or
-27-
partially paid with funds deposited in any separate account established by the
Seller, the Mortgagor, or anyone on behalf of the Mortgagor, (b) paid by any
source other than the Mortgagor or (c) contains any other similar provisions
which may constitute a "buydown" provision. The Mortgage Loan is not a graduated
payment mortgage loan and the Mortgage Loan does not have a shared appreciation
or other contingent interest feature;
(cc) Mortgagor Acknowledgment. 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 fixed rate mortgage loans in the
case of Fixed Rate Mortgage Loans, and adjustable rate mortgage loans in the
case of Adjustable Rate Mortgage Loans and rescission materials with respect to
Refinanced Mortgage Loans, and such statement is and will remain in the Mortgage
File;
(dd) No Construction Loans. 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;
(ee) Acceptable Investment. 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;
(ff) LTV, PMI Policy. Each Mortgage Loan with an LTV at origination in
excess of 80% is and will be subject to a Primary Mortgage Insurance Policy,
issued by a Qualified Insurer, which insures that portion of the Mortgage Loan
in excess of the portion of the Appraised Value of the Mortgaged Property
required by Fannie Mae. 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;
(gg) Occupancy of Mortgaged Property. 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;
(hh) No Misrepresentation or Fraud. No error, omission,
misrepresentation, negligence, fraud or similar occurrence with respect to a
Mortgage Loan has taken place on the part of the Seller or, to the best of the
Seller's knowledge, 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;
-28-
(ii) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located (except with respect to
each MERS Designated Mortgage Loan ). Each original Mortgage was recorded and,
except for those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded. On or prior to the Closing Date,
Seller has provided the Custodian and the Purchaser with a MERS Report listing
the Custodian as the Investor with respect to each MERS Designated Mortgage
Loan. With respect to each MERS Designated Mortgage Loan, the Seller has
designated the Custodian as the Investor and no Person is listed as Interim
Funder on the MERS(R) System;
(jj) Mortgage File. With respect to each Mortgage Loan, the Seller is
in possession of a complete Mortgage File except for the documents which have
been delivered to the Purchaser or the Custodian or which have been submitted
for recording and not yet returned;
(kk) Ownership. Immediately prior to the payment of the Purchase
Price, the Seller was the sole owner and holder of the Mortgage Loans and the
indebtedness evidenced by the Mortgage Note. The Mortgage Loans, including the
Mortgage Note and the Mortgage, were not assigned or pledged by the Seller and
the Seller had good and marketable title thereto, and the Seller had full right
to transfer and sell the Mortgage Loans to the Purchaser free and clear of any
encumbrance, participation interest, lien, equity, pledge, claim or security
interest and had full right and authority subject to no interest or
participation in, or agreement with any other party to sell or otherwise
transfer the Mortgage Loans. Following the sale of the Mortgage Loan, the
purchaser will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to monitor, possess and control the
Mortgage Loan except in connection with the servicing of the Mortgage Loan by
the Seller as set forth in this Agreement. After the Closing Date, the Seller
will not have any right to modify or alter the terms of the sale of the Mortgage
Loan and the Seller will not have any obligation or right to repurchase the
Mortgage Loan, except as provided in this Agreement or as otherwise agreed to by
the Seller and the Purchaser;
(ll) Consolidated Future Advances. 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 Fannie Mae and Freddie Mac. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan;
(mm) No Balloon Payment. No Mortgage Loan has a balloon payment
feature;
(nn) Condominiums/ Planned Unit Developments. If the Residential
Dwelling on the Mortgaged Property is a condominium unit or a unit in a planned
unit development (other
-29-
than a de minimis planned unit development) such condominium or planned unit
development project meets the eligibility requirements of Fannie Mae and Freddie
Mac including Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;
(oo) Downpayment. The source of the down payment with respect to each
Mortgage Loan has been fully verified by the Seller;
(pp) Calculation of Interest. Interest on each Mortgage Loan is
calculated on the basis of a 360-day year consisting of twelve 30-day months;
(qq) Environmental Matters. The Mortgaged Property is in material
compliance with all applicable local, state and federal environmental laws,
rules or regulations 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 nor is there any pending action or proceeding directly
involving any Mortgaged Property of which the Seller is aware in which
compliance with any environmental law, rule or regulation is an issue;
(rr) Ground Leases. With respect to any ground lease to which a
Mortgaged Property may be subject: (A) the Mortgagor is the owner of a valid and
subsisting leasehold interest under such ground lease; (B) such ground lease is
in full force and effect, unmodified and not supplemented by any writing or
otherwise; (C) all rent, additional rent and other charges reserved therein have
been fully paid to the extent payable as of the Closing Date; (D) the Mortgagor
enjoys the quiet and peaceful possession of the leasehold estate; (E) the
Mortgagor is not in default under any of the terms of such ground lease, and
there are no circumstances which, with the passage of time or the giving of
notice, or both, would result in a default under such ground lease; (F) the
lessor under such ground lease is not in default under any of the terms or
provisions of such ground lease on the part of the lessor to be observed or
performed; (G) the lessor under such ground lease has satisfied any repair or
construction obligations due as of the Closing Date pursuant to the terms of
such ground lease; (H) the execution, delivery and performance of the Mortgage
do not require the consent (other than those consents which have been obtained
and are in full force and effect) under, and will not contravene any provision
of or cause a default under, such ground lease; and (I) the term of such lease
does not terminate earlier than the maturity date of the Mortgage Note;
(ss) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans are classified as (a) "high cost" loans under the Home Ownership
and Equity Protection Act of 1994 or (b) "high cost," "threshold," "covered," or
"predatory" loans under any other applicable state, federal or local law. no
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to repay and
the extension of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan;
-30-
(tt) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule and consists of a parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
condominium unit in a low-rise condominium project, or an individual unit in a
planned unit development, provided, however, that any condominium project or
planned unit development shall conform with the applicable Fannie Mae and
Freddie Mac requirements regarding such dwellings, and no residence or dwelling
is a mobile home or a manufactured dwelling. No portion of the Mortgaged
Property is used for commercial purposes;
(uu) Anti-Money Laundering Laws. The Seller has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws, including with respect to the legitimacy of
the applicable Mortgagor and the origin of the assets used by the said Mortgagor
to purchase the property in question, and maintains, and will maintain,
sufficient information to identify the applicable Mortgagor for purposes of the
Anti-Money Laundering Laws;
(vv) Due on Sale. The Mortgage contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of the Mortgage
Loan in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgage thereunder;
(ww) Soldiers' and Sailors' Relief Act. 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 or
any similar state or local law;
(xx) [Reserved];
(yy) [Reserved];
(zz) No Denial of Insurance. No action, inaction, or event has
occurred and no state of exists or has existed that has resulted or will result
in the exclusion from, denial of, or defense to coverage under any applicable
pool insurance policy, special hazard insurance policy, PMI Policy or bankruptcy
bond, irrespective of the cause of such failure of coverage. In connection with
the placement of any such insurance, no commission, fee, or other compensation
has been or will be received by the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance. The Seller has
caused or will cause to be performed any and all acts required to preserve the
rights and remedies of the Purchaser in any insurance policies applicable to the
Mortgage Loans including, without limitation, any necessary notifications of
insurers, assignments of policies or interests therein, and establishments of
coinsured, joint loss payee and mortgagee rights in favor of the Purchaser;
(aaa) Tax Service Contract The Seller has obtained a life of loan,
transferable real estate Tax Service Contract with an Approved Tax Service
Contract Provider on each
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Mortgage Loan and such contract is assignable without penalty, premium or cost
to the Purchaser;
(bbb) Flood Certification Contract. The Seller has obtained a life of
loan, transferable flood certification contract for each Mortgage Loan and such
contract is assignable without penalty, premium or cost to the Purchaser;
(ccc) [Reserved];
(ddd) Simple Interest Mortgage Loans. None of the Mortgage Loans are
simple interest Mortgage Loans;
(eee) Prepayment Penalty. With respect to each Mortgage Loan that has
a Prepayment Penalty feature, each such Prepayment Penalty is enforceable and
will be enforced by the Seller, and each Prepayment Penalty is permitted
pursuant to federal, state and local law. No Mortgage Loan will impose a
Prepayment Penalty for a term in excess of three years from the date such
Mortgage Loan was originated;
(fff) Credit Reporting. The Seller has fully furnished in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information on the Mortgagor credit files to Equifax, Experian and
Trans Union Credit Information Company on a monthly basis.
(ggg) Servicing Practices. Each Mortgage Loan has been serviced in all
material respects in compliance with those mortgage servicing practices
(including collection procedures) of prudent mortgage banking institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located; and
(hhh) Single-Premium Credit Life Insurance. None of the proceeds of
the Mortgage Loan were used to finance single-premium credit insurance policies.
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 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
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breach shall involve any representation or warranty set forth in Subsection 7.01
and such breach cannot be cured within 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. The Seller shall, at the request of the Purchaser and assuming that
Seller has a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan and substitute in its
place a Qualified Substitute Mortgage Loan or Loans; provided that such
substitution shall be effected not later than 120 days after the related Closing
Date. If the Seller has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan. 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 Remittance Date.
With respect to those representations and warranties set forth in
Section 7.02 which are made to the best of the Seller's knowledge, if it is
discovered by the Seller or the Purchaser that the substance of such
representation and warranty is inaccurate, notwithstanding the Seller's lack of
knowledge with respect to the substance of such representation and warranty,
such inaccuracy shall be deemed a breach of the applicable representation and
warranty.
At the time of repurchase of any deficient Mortgage Loan, 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 Custodian 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 Final Mortgage Loan
Schedule shall be amended to reflect the withdrawal of the repurchased Mortgage
Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser for such Qualified Substitute
Mortgage Loan or Loans the Mortgage Loan Documents with the Mortgage Note
endorsed as required herein. The Seller shall deposit in the Custodial Account
the Monthly Payment less the Servicing Fee due on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution will be retained by the Seller. For the month of
substitution, distributions to the Purchaser will include the Monthly Payment
due on such Deleted Mortgage Loan in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received by the
Seller in respect of such Deleted Mortgage Loan. The Seller shall give written
notice to the Purchaser that such substitution has taken place and shall amend
the Final Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of this Agreement and the substitution of the Qualified
Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall be subject to the terms of this Agreement in all
respects, and the Seller shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in Subsections 7.01 and
7.02.
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For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
will determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after application of scheduled principal payments due in the month of
substitution). An amount equal to the product of the amount of such shortfall
multiplied by the Repurchase Price shall be distributed by the Seller in the
month of substitution pursuant to the Servicing Addendum. Accordingly, on the
date of such substitution, the Seller will deposit from its own funds into the
Custodial Account an amount equal to such amount.
In addition to such cure, repurchase and substitution 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 30 days of such Due
Date, (ii) a Monthly Payment due prior to the related Cut-off Date is not made
within 30 days of the related Due Date or (iii) the principal balance due on a
Mortgage Loan is paid in full within six months following 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.
Subsection 7.05 [Reserved]
Subsection 7.06 Review of Mortgage Loans. From the Closing Date until
60 days after the Closing Date, the Purchaser shall have the right to review
each Mortgage File, to conduct property inspections, obtain appraisal
recertifications and otherwise to underwrite the Mortgage Loans and to reject
any Mortgage Loan which in the Purchaser's sole opinion is an unacceptable
investment. In the event that the Purchaser so rejects any Mortgage Loan, the
Seller shall, no later than the 60th day following the Closing Date, repurchase
the rejected Mortgage Loan in the manner prescribed in Section 7.04 at the
Repurchase Price. Any rejected Mortgage Loan shall be removed from the terms of
this Agreement.
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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:
(a) 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, the related Purchase Price and Terms Letter or the
related Warranty Bill of Sale;
(b) the Initial Purchaser shall have received, or the Initial
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;
(c) the Seller shall have delivered and released the Mortgage Loan
Documents to the Custodian; and
(d) all other terms and conditions of this Agreement shall have been
complied with.
Subject to the foregoing conditions, the Initial 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 Initial Purchaser fully executed originals
of the following documents:
1. this Agreement, in four counterparts;
2. a Custodial Account Certification in the form attached as Exhibit
6 hereto;
3. as Escrow Account Certification in the form attached as Exhibit 7
hereto;
4. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto;
5. an Opinion of Counsel to the Seller, in the form of Exhibit 2
hereto; and
6. the Seller's underwriting guidelines.
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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:
1. the related Purchase Price and Terms Letter;
2. the related Final Mortgage Loan Schedule;
3. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto;
4. if requested by the Initial Purchaser, an Opinion of Counsel to
the Seller, in the form of Exhibit 2 hereto;
5. a Security Release Certification, in the form of Exhibit 3 hereto
executed by any Person, as requested by the Initial 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;
6. 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;
7. a Warranty Bill of Sale in the form of Exhibit 4 hereto; and
8. a MERS Report reflecting the Custodian as Investor and no Person
as Interim Funder for each MERS Designated Mortgage Loan.
SECTION 10. Costs. The Purchaser shall pay any commissions due its
salesmen, 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 and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 11. Seller's Servicing Obligations. The Seller, as independent
contract servicer, shall service and administer the Mortgage Loans during the
Preliminary Servicing Period 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.
SECTION 12. Removal of Mortgage Loans from Inclusion under This
Agreement Upon a Whole Loan Transfer or a Pass-Through Transfer on One or More
Reconstitution Dates. The Seller and the Initial Purchaser agree that with
respect to some or all of the Mortgage Loans, the Initial Purchaser may effect
either:
(1) one or more Whole Loan Transfers; and/or
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(2) one or more Pass-Through Transfers.
With respect to each Whole Loan Transfer or Pass-Through Transfer, as
the case may be, entered into by the Initial Purchaser, the Seller agrees:
(1) to cooperate fully with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due diligence
procedures and with respect to the preparation (including, but not limited
to, the endorsement, delivery, assignment, and execution) of the Mortgage
Loan Documents and other related documents, and with respect to servicing
requirements reasonably requested by the rating agencies and credit
enhancers;
(2) to execute all Reconstitution Agreements provided that each of the
Seller and the Purchaser is given an opportunity to review and reasonably
negotiate in good faith the content of such documents not specifically
referenced or provided for herein;
(3) with respect to any Whole Loan Transfer or Pass-Through Transfer,
the Seller shall make the representations and warranties regarding the
Seller and the Mortgage Loans set forth in Sections 7.01 and 7.02 herein as
of the date of the Whole Loan Transfer or Pass-Through Transfer, modified
to the extent necessary to accurately reflect the pool statistics of the
Mortgage Loans as of the date of such Whole Loan Transfer or Pass-Through
Transfer and any events or circumstances existing subsequent to the related
Closing Date(s);
(4) to deliver to the Purchaser for inclusion in any prospectus or
other offering material such publicly available information regarding the
Seller, its financial condition and its mortgage loan delinquency,
foreclosure and loss experience and any additional information requested by
the Purchaser, and to deliver to the Purchaser any similar non public,
unaudited financial information, in which case the Purchaser shall bear the
cost of having such information audited by certified public accountants if
the Purchaser desires such an audit, or as is otherwise reasonably
requested by the Purchaser and which the Seller is capable of providing
without unreasonable effort or expense;
(5) to deliver to the Purchaser and to any Person designated by the
Purchaser, at the Purchaser's expense, such statements and audit letters of
reputable, certified public accountants pertaining to information provided
by the Seller pursuant to clause 4 above as shall be reasonably requested
by the Purchaser;
(6) to deliver to the Purchaser, and to any Person designated by the
Purchaser, such legal documents and in-house Opinions of Counsel as are
customarily delivered by originators or servicers, as the case may be, and
reasonably determined by the Purchaser to be necessary in connection with
Whole Loan Transfers or Pass-Through Transfers, as the case may be, such
in-house Opinions of Counsel for a Pass-Through Transfer to be in the form
reasonably acceptable to the Purchaser, it being understood that the cost
of any opinions of outside special counsel that may be required for a Whole
Loan Transfer or Pass-Through Transfer, as the case may be, shall be the
responsibility of the Purchaser;
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(7) to negotiate and execute one or more subservicing agreements
between the Seller and any master servicer which is generally considered to
be a prudent master servicer in the secondary mortgage market, designated
by the Purchaser in its sole discretion after consultation with the Seller
and/or one or more custodial and servicing agreements among the Purchaser,
the Seller and a third party custodian/trustee which is generally
considered to be a prudent custodian/trustee in the secondary mortgage
market designated by the Purchaser in its sole discretion after
consultation with the Seller, in either case for the purpose of pooling the
Mortgage Loans with other Mortgage Loans for resale or securitization;
(8) in connection with any securitization of any Mortgage Loans, to
execute a pooling and servicing agreement, which pooling and servicing
agreement may, at the Purchaser's direction, contain contractual provisions
including, but not limited to, a 24-day certificate payment delay (54-day
total payment delay), servicer advances of delinquent scheduled payments of
principal and interest through liquidation (unless deemed non-recoverable)
and prepayment interest shortfalls (to the extent of the monthly servicing
fee payable thereto), certain REMIC requirements, servicing and mortgage
loan representations and warranties which in form and substance conform to
the representations and warranties in this Agreement and to secondary
market standards for securities backed by mortgage loans similar to the
Mortgage Loans and such provisions with regard to servicing
responsibilities, investor reporting, segregation and deposit of principal
and interest payments, custody of the Mortgage Loans, and other covenants
as are required by the Purchaser and one or more nationally recognized
rating agencies for "AAA" rated mortgage pass-through transactions which
are "mortgage related securities" for the purposes of the Secondary
Mortgage Market Enhancement Act of 1984, unless otherwise mutually agreed.
If the Purchaser deems it advisable at any time to pool the Mortgage Loans
with other mortgage loans for the purpose of resale or securitization, the
Seller agrees to execute one or more subservicing agreements between itself
(as servicer) and a master servicer designated by the Purchaser at its sole
discretion, and/or one or more servicing agreements among the Seller (as
servicer), the Purchaser and a trustee designated by the Purchaser at its
sole discretion, such agreements in each case incorporating terms and
provisions substantially identical to those described in the immediately
preceding paragraph;
(9) to transfer the servicing rights to the Purchaser or its designee
as described in Section 16 upon the direction of the Purchaser;
(10) In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to a Reconstitution Date the Seller or
its designee shall prepare an Assignment of Mortgage in blank from the
Seller, acceptable to Fannie Mae, Freddie Mac, the trustee or such third
party, as the case may be, for each Mortgage Loan that is part of a
Whole-Loan Transfer or Pass-Through Transfer and shall pay all preparation
and recording costs associated therewith. The Seller shall execute each
Assignment of Mortgage, track such Assignments of Mortgage to ensure they
have been recorded and deliver them as required by Fannie Mae, Freddie Mac,
the trustee or such third party, as the case may be, upon the Seller's
receipt thereof. Additionally, the Seller shall prepare
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and execute, at the direction of the Purchaser, any note endorsements in
connection with any and all Reconstitution Agreements; and
(11) To indemnify the Purchaser and each affiliate designated by the
Purchaser and each Person who controls the Purchaser or such affiliate and
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of
the Seller regarding the Seller, the Seller's servicing practices or
performance, the Mortgage Loans or the Seller's underwriting guidelines set
forth in any offering document prepared in connection with any Pass-Through
Transfer. For purposes of the previous sentence, "Purchaser" shall mean the
Person then acting as the Purchaser under this Agreement and any and all
Persons who previously were "Purchasers" under this Agreement.
With respect to any Mortgage Loans sold in a Pass-Through Transfer
where the Seller is a servicer, the Seller agrees that on or before March 10th
of each year beginning March 10, 2004, the Seller shall deliver to the
depositor, the master servicer (if any) and the trustee for the securitization
trust created in the Pass-Through Transfer, and their officers, directors and
affiliates, a certification in the form attached as Exhibit 10 hereto, executed
by the senior officer in charge of servicing at the Seller for use in connection
with any Form 10-K to be filed with the Securities and Exchange Commission with
respect to the securitization trust. The Seller shall indemnify and hold
harmless the depositor, the master servicer (if any), and the trustee, and their
respective officers, directors and affiliates, from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon any breach of the Seller's obligations under this paragraph or any material
misstatement or omission, negligence, bad faith or willful misconduct of the
Seller in connection therewith. If the indemnification provided for in the
preceding sentence is unavailable or insufficient to hold harmless any
indemnified party, then the Seller agrees that it shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities of such indemnified party in such proportion as is
appropriate to reflect the relative fault of such indemnified party, on the one
hand, and the Seller, on the other, in connection with a breach of the Seller's
obligations under this paragraph or any material misstatement or omission,
negligence, bad faith or willful misconduct of the Seller in connection
therewith.
With respect to any Mortgage Loans sold in a Pass-Through Transfer,
the Purchaser shall cooperate with Terwin to maintain the structure established
under this Agreement with respect to the payment of the Servicing Strip and the
Subservicing Fee, subject to secondary market standards for securities backed by
mortgage loans similar to the Mortgage Loans, REMIC requirements and the
requirements of nationally recognized rating agencies.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer or Pass-Through Transfer shall be subject to this Agreement and shall
continue to be serviced for the remainder of the Preliminary Servicing Period in
accordance with the terms of this Agreement and with respect thereto this
Agreement shall remain in full force and effect.
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SECTION 13. Servicing Rights.
Subsection 13.01 Servicing Rights Owned by Terwin. The parties hereto
acknowledge and agree that Terwin is the owner of all servicing rights with
respect to the Mortgage Loans, which rights are comprised of the rights with
respect to the transfer of servicing and the right to receive the Servicing
Strip, in each case, as set forth in this Section 13.
Subsection 13.02 Subservicing Fee. Each month the Seller, or any
successor servicer appointed hereunder, shall be entitled to retain the
Subservicing Fee portion of the Servicing Fee withdrawn by the Seller or such
successor servicer from the Collection Account pursuant to Section 11.05.
Subsection 13.03 Servicing Strip. Each month the Seller, or any
successor servicer appointed hereunder, shall pay Terwin an amount equal to the
Servicing Strip portion of the Servicing Fee withdrawn by the Seller or such
successor servicer from the Collection Account pursuant to Section 11.05.
Subsection 13.04 Rights to Transfer Servicing. Subject to the
provisions of Section 17, Terwin shall have the right to transfer servicing of
the Mortgage Loans from the Seller to a party mutually agreed upon by Terwin and
the Purchaser, in accordance with the servicing practices set forth in Section
11.01 and secondary market standards. Terwin shall receive all proceeds from any
such transfer of servicing.
Subsection 13.05 Rights and Obligations upon an Event of Default or
Seller's Resignation as Servicer. In the event the Seller or any successor
servicer appointed hereunder shall be terminated pursuant to Section 15 or shall
resign pursuant to 14.04, servicing of the Mortgage Loans shall transfer to a
party mutually agreed upon by Terwin and the Purchaser, in accordance with the
servicing practices set forth in Section 11.01 and secondary market standards.
If such successor servicer demands compensation in excess of the Subservicing
Fee, the Subservicing Fee shall be increased and the Servicing Strip shall be
reduced correspondingly. In no event shall the Servicing Fee be increased.
Subsection 13.06 No Transfer of Rights. Terwin shall not transfer,
assign, pledge, hypothecate or otherwise convey its rights under this Agreement
to any party.
Subsection 13.07 Claims With Respect to Servicing Rights. Terwin
hereby acknowledges and agrees that any claims or rights of Terwin under the
terms of this Agreement shall be solely against the Seller and that Terwin shall
have no such claims or rights against the Mortgage Loans or the Purchaser.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller. 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
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administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement entered into pursuant to Section 12,
unless such failure is due to the Purchaser's willful misconduct or gross
negligence.
Subsection 14.02 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 having a net worth of not
less than $[25,000,000] whose deposits are insured by the FDIC or a Seller or
entity whose business is the origination and servicing of mortgage loans, shall
be a Fannie Mae or Freddie Mac approved seller/servicer and shall satisfy any
requirements of Section 17 with respect to the qualifications of a successor to
the Seller.
Subsection 14.03 Limitation on Liability of the Seller and Others.
Neither the Seller nor any of the officers, employees or agents of the Seller
shall be under any liability to the Purchaser for any action taken or for
refraining from the taking of any action in good faith in connection with the
servicing of the Mortgage Loans pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Seller or
any such person against any breach of warranties or representations made herein,
or failure to perform its obligations in strict compliance with any standard of
care set forth in this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Seller and any officer, employee or agent of the Seller may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Seller shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its obligation to sell or duty to service the Mortgage Loans
in accordance with this Agreement and which in its opinion may result in its
incurring any expenses or liability; provided, however, that the Seller may,
with the consent of the Purchaser, undertake any such action which it may deem
necessary or desirable in respect to this Agreement and the rights and duties of
the parties hereto. In such event, the legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
for which the Purchaser shall be liable, the Seller shall be entitled to
reimbursement therefor from the Purchaser upon written demand except when such
expenses, costs and liabilities are subject to the Seller's indemnification
under Subsections 7.03 or 13.01.
Subsection 14.04 Seller Not to Resign. Subject to Section 13, the
Seller shall not assign this Agreement or resign from the obligations and duties
hereby imposed on it except by mutual consent of the Seller, Terwin and the
Purchaser or upon the determination that its
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servicing duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by the Seller in which event the Seller may
resign as servicer. Any such determination permitting the resignation of the
Seller as servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Purchaser and Terwin which Opinion of Counsel shall be in form
and substance acceptable to the Purchaser and Terwin and which shall be provided
at the cost of the Seller. No such resignation shall become effective until a
successor shall have assumed the Seller's responsibilities and obligations
hereunder in the manner provided in Section 17.
Subject to Section 13, without in any way limiting the generality of
this Section 14.04, in the event that the Seller either shall assign this
Agreement or the servicing responsibilities hereunder or delegate its duties
hereunder or any portion thereof or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written consent
of the Purchaser and Terwin, then the Purchaser and Terwin shall have the right
to terminate this Agreement upon notice, without any payment of any penalty or
damages and without any liability whatsoever to the Seller or any third party.
Subsection 14.05 Transfer of Servicing. Subject to Section 13, the
Seller acknowledges that the Purchaser and Terwin have 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, the 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 and
Terwin.
SECTION 15. Default.
Subsection 15.01 Events of Default. 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 one Business Day 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 days (except that such number of days shall be fifteen 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
-42-
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 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, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment
of its obligations or cease its normal business operations for more than
three Business Days; 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, but only to the extent such non-qualification materially and
adversely affects the Seller's ability to perform its obligations
hereunder; or
(vii) the Seller ceases to meet the qualifications of either a Fannie
Mae or Freddie Mac seller/servicer; or
(viii) 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; or
(ix) the Seller fails to maintain a minimum net worth of
$[25,000,000]; or
(x) the Seller ceases to be (a) licensed to service first lien
residential mortgage loans in each jurisdiction in which a Mortgaged
Property is located and such licensing is required, and (b) qualified to
transact business in any jurisdiction where it is currently so qualified,
and where such qualification is required, but only to the extent such
non-qualification materially and adversely affects the Seller's ability to
perform its obligations hereunder; or
(xi) there shall have been commenced against the Seller any
litigation, action, suit, arbitration, investigation or other legal or
arbitrable proceedings that claims that the Seller has violated any
consumer credit laws or other laws as a result of alleged predatory lending
practices relating to the Seller's origination or servicing operations, and
which claims an aggregate amount in excess of (or may result in liability
in the aggregate in excess of) [$__________];
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
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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 17.
Subsection 15.02 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 16. Termination. The respective obligations and
responsibilities of the Seller, as servicer, shall terminate upon the
distribution to the Purchaser of the final payment or liquidation with respect
to the last Mortgage Loan (or advances of same by the 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
unless terminated with respect to all or a portion of the Mortgage Loans on an
earlier date at the option of the Purchaser and Terwin pursuant to this Section
16 or pursuant to Section 13 or Section 14. 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.
Subject to Section 13, The Purchaser may terminate, at its sole
option, any rights the Seller may have hereunder, without cause. In the event
that the Purchaser terminates the Seller's rights on or before the date which is
one year after the related Closing Date, the Purchaser shall pay to the Seller
the related Termination Fee. Any such notice of termination shall be in writing
and delivered to the Seller by registered mail as provided in Section 20.
Notwithstanding and in addition to the foregoing, in the event that
(i) a Mortgage Loan becomes delinquent for a period of 90 days or more (a
"Delinquent Mortgage Loan") or (ii) a Mortgage Loan becomes an REO Property, the
Purchaser may at its election terminate this Agreement with respect to such
Delinquent Mortgage Loan or REO Property without payment of a Termination Fee
therefor, upon 15 days' written notice to the Seller.
SECTION 17. Successor to the Seller. Subject to Section 13, prior to
termination of Seller's responsibilities and duties under this Agreement
pursuant to Section 12, 13, 14, 15 or 16 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
-44-
servicer under this Agreement. In connection with such appointment and
assumption, the Purchaser may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor shall
agree. In the event that the 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 17 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, 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 12, 13, 14, 15 or 16 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 18. 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 financial statements of the
Seller and the Seller's parent Seller, if applicable, for the most recently
completed three 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.
-45-
The Seller also shall make available information on its servicing performance
with respect to mortgage loans serviced for others, including delinquency
ratios.
The Seller also agrees to allow access to knowledgeable financial,
accounting, origination and servicing officers of the Seller for the purpose of
answering questions asked by any prospective purchaser regarding recent
developments affecting the Seller, its loan origination or servicing practices
or the financial statements of the Seller and to permit any prospective
Purchaser to inspect the Seller's servicing facilities for the purpose of
satisfying such prospective Purchaser that the Seller has the ability to service
the Mortgage Loans as provided in this Agreement.
SECTION 19. 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 Purchase Price
and Terms Letter, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Initial Purchaser for the losses
and damages incurred by the Initial Purchaser (including damages to prospective
purchasers of the Mortgage Loans) in the event of the Seller's failure to
deliver (i) each of the related Mortgage Loans, (ii) one or more Qualified
Substitute Mortgage Loans delivered pursuant to Section 7, or (iii) one or more
Mortgage Loans otherwise acceptable to the Initial Purchaser on or before the
related Closing Date. The Seller hereby grants to the Initial 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 Initial Purchaser subject to the Initial
Purchaser's (i) right to reject any Mortgage Loan under the terms of this
Agreement and the related Purchase Price and Terms 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 20. 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:
(i) if to the Purchaser:
Merrill Lynch Mortgage Holdings Inc.
World Financial Center
South Tower
New York, New York 10281
Attn: Gregory Amoroso
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(ii) if to the Seller:
Greenpoint Mortgage Funding Inc.
100 Wood Hollow Drive
Novato, California 94945
Attention: [_____________________]
(iii) if to Terwin:
[_____________________]
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 21. 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 22. 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 23. GOVERNING LAW. THE AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICTS OF LAW PROVISIONS 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.
SECTION 24. Intention of the Parties. It is the intention of the
parties that the Initial 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
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the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Initial Purchaser shall
have the right to review the Mortgage Loans and the related Mortgage File 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 Initial Purchaser in
the course of such review.
SECTION 25. 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. The
Purchaser may assign this Agreement to any Person to whom any Mortgage Loan is
transferred whether pursuant to a sale or financing and to any Person to whom
the servicing or master servicing of any Mortgage Loan is sold or transferred.
Upon any such assignment, the Person to whom such assignment is made shall
succeed to all rights and obligations of the Purchaser under this Agreement to
the extent of the related Mortgage Loan or Mortgage Loans and this Agreement, to
the extent of the related Mortgage Loan or Loans, shall be deemed to be a
separate and distinct Agreement between the Seller, Terwin and such Purchaser,
and a separate and distinct Agreement between the Seller and each other
Purchaser to the extent of the other related Mortgage Loan or Loans. In the
event that this Agreement is assigned to any Person to whom the servicing or
master servicing of any Mortgage Loan is sold or transferred, the rights and
benefits under this agreement which inure to the Purchaser shall inure to the
benefit of both the Person to whom such Mortgage Loan is transferred and the
Person to whom the servicing or master servicing of the Mortgage Loan has been
transferred; provided that, the right to require a Mortgage Loan to be
repurchased by the Seller pursuant to Subsection 7.03 or 7.04 shall be retained
solely by the Purchaser. This Agreement shall not be assigned, pledged or
hypothecated by either the Seller or Terwin to a third party without the consent
of the Purchaser.
SECTION 26. 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 27. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
SECTION 28. Nonsolicitation. The Seller covenants and agrees that it
shall not take any action or permit or cause any action to be taken by any of
its agents or affiliates, or by any independent contractors on the Seller's
behalf, to personally, by telephone or mail, solicit the refinancing of any
Mortgage Loan following the date hereof or provide information to any other
entity to solicit the refinancing of any Mortgage Loan. It is understood and
agreed that all rights and benefits relating to the solicitation of any
Mortgagors and the attendant rights, title and interest in and to the list of
such Mortgagors and data relating to their Mortgages (including insurance
renewal dates) shall be transferred to the Purchaser pursuant hereto on Closing
Date and the Company shall take no action to undermine these rights and
benefits. Notwithstanding the foregoing, it is understood and agreed that the
foregoing shall not preclude the Seller from engaging in solicitations to the
general public by newspaper, radio, television or other media which are not
directed toward the Mortgagors or from refinancing the Mortgage Loan of any
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Mortgagor who, without solicitation, contacts the Seller to request the
refinancing of the related Mortgage Loan.
SECTION 29. 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 30. 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 31. Further Agreements. The Seller, Terwin 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.
SECTION 32. Survival. The Seller agrees that the representations,
warranties and agreements made by the Seller herein and in any certificate or
other instrument delivered pursuant hereto shall be deemed to be relied upon by
the Purchaser, notwithstanding any investigation heretofore or hereafter made by
the Purchaser or on the Purchaser's behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such
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certificate or other instrument shall survive the delivery and payment for the
Mortgage Loans for each Transaction.
-50-
IN WITNESS WHEREOF, the Seller, Terwin 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.
GREENPOINT MORTGAGE FUNDING INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TERWIN ADVISORS, LLC
(Owner of Servicing Rights)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MERRILL LYNCH MORTGAGE HOLDINGS INC.
(Initial Purchaser)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 1
SELLER'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly elected
______________ of Greenpoint Mortgage Funding Inc., a ______________ (the
"Seller"), and further certify, on behalf of the Seller as follows:
1. Attached hereto as Attachment I are a true and correct copy of the
Certificate of Incorporation and by-laws of the Seller as are in full force
and effect on the date hereof.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the Seller,
signed (a) the Master Mortgage Loan Purchase and Servicing Agreement (the
"Purchase Agreement"), dated as of April 1, 2003, by and between the Seller
and Merrill Lynch Mortgage Holdings Inc. (the "Purchaser"); (b) the
Purchase Price and Terms Letter, dated April [2], 2003, between the Seller
and the Purchaser (the "Purchase Price and Terms Letter"); 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 Purchase Price and Terms Letter was, at the
respective times of such signing and delivery, and is as of the date
hereof, duly elected or appointed, qualified and acting as such officer or
attorney-in-fact, and the signatures of such persons appearing on such
documents are their genuine signatures.
4. Attached hereto as Attachment II is a true and correct copy of the
resolutions duly adopted by the board of directors of the Seller on
________________, 2003 (the "Resolutions") with respect to the
authorization and approval of the sale and servicing of the Mortgage Loans;
said Resolutions have not been amended, modified, annulled or revoked and
are in full force and effect on the date hereof.
5. Attached hereto as Attachment III is a Certificate of Good Standing
of the Seller dated April [__], 2003. No event has occurred since April
[__], 2003 which has affected the good standing of the Seller under the
laws of the State of ___________.
6. 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.
7. 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
Purchase Price and Terms Letter.
Ex. 1-1
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]
GREENPOINT MORTGAGE FUNDING INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: Vice President
I, _______________________, Secretary of the Seller, hereby certify
that _________________________ is the duly elected, qualified and acting Vice
President of the Seller and that the signature appearing above is genuine.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
------------------------------
[Seal]
GREENPOINT MORTGAGE FUNDING INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: [Assistant] Secretary
Ex. 1-2
EXHIBIT 2
[FORM OF OPINION OF COUNSEL TO THE SELLER]
________________
(Date)
Merrill Lynch Mortgage Holdings Inc.
World Financial Center
South Tower
New York, New York 10281
Re: Master Mortgage Loan Purchase and Servicing Agreement, dated as of
April 1, 2003
Gentlemen:
I have acted as counsel to Greenpoint Mortgage Funding Inc., a
_________________ (the "Seller"), in connection with the sale of certain
mortgage loans by the Seller to Merrill Lynch Mortgage Holdings Inc. (the
"Purchaser") pursuant to the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of April 1, 2003, between the Seller and the Purchaser (the
"Purchase Agreement") and the Purchase Price and Terms Letter, dated April [2],
2003, between the Seller and the Purchaser (the "Purchase Price and Terms
Letter"). Capitalized terms not otherwise defined herein have the meanings set
forth in the Purchase Agreement.
In connection with rendering this opinion letter, I, or attorneys
working under my direction, have examined, among other things, originals,
certified copies or copies otherwise identified to my satisfaction as being true
copies of the following:
A. The Purchase Agreement;
B. The Purchase Price and Terms Letter;
C. The Seller's Certificate of Incorporation and by-laws, as amended
to date; and
D. Resolutions adopted by the Board of Directors of the Seller with
specific reference to actions relating to the transactions
covered by this opinion (the "Board Resolutions").
For the purpose of rendering this opinion, I have made such
documentary, factual and legal examinations as I deemed necessary under the
circumstances. As to factual matters, I have relied upon statements,
certificates and other assurances of public officials and of officers and other
representatives of the Seller, and upon such other certificates as I deemed
appropriate, which factual matters have not been independently established or
verified by me. I have also assumed, among other things, the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to me as originals, and the conformity to
Ex. 2-1
original documents of all documents submitted to me as copies and the
authenticity of the originals of such copied documents.
On the basis of and subject to the foregoing examination, and in
reliance thereon, and subject to the assumptions, qualifications, exceptions and
limitations expressed herein, I am of the opinion that:
1. The Seller has been duly incorporated and is validly existing and
in good standing under the laws of the State of __________ with corporate power
and authority to own its properties and conduct its business as presently
conducted by it. The Seller has the corporate power and authority to service the
Mortgage Loans, and to execute, deliver, and perform its obligations under the
Purchase Agreement and the Purchase Price and Terms Letter (sometimes
collectively, the "Agreements").
2. The Purchase Agreement and the Purchase Price and Terms Letter have
been duly and validly authorized, executed and delivered by the Seller.
3. The Purchase Agreement and the Purchase Price and Terms Letter
constitute valid, legal and binding obligations of the Seller, enforceable
against the Seller in accordance with their respective terms.
4. No consent, approval, authorization or order of any state or
federal court or government agency or body is required for the execution,
delivery and performance by the Seller of the Purchase Agreement and the
Purchase Price and Terms Letter, or the consummation of the transactions
contemplated by the Purchase Agreement and the Purchase Price and Terms Letter,
except for those consents, approvals, authorizations or orders which previously
have been obtained.
5. Neither the servicing of the Mortgage Loans by the Seller as
provided in the Purchase Agreement and the Purchase Price and Terms Letter, nor
the fulfillment of the terms of or the consummation of any other transactions
contemplated in the Purchase Agreement and the Purchase Price and Terms Letter
will result in a breach of any term or provision of the certificate of
incorporation or by-laws of the Seller, or, to the best of my knowledge, will
conflict with, result in a breach or violation of, or constitute a default
under, (i) the terms of any indenture or other agreement or instrument known to
me to which the Seller is a party or by which it is bound, (ii) any State of
____________ or federal statute or regulation applicable to the Seller, or (iii)
any order of any State of ____________ or federal court, regulatory body,
administrative agency or governmental body having jurisdiction over the Seller,
except in any such case where the default, breach or violation would not have a
material adverse effect on the Seller or its ability to perform its obligations
under the Purchase Agreement.
6. There is no action, suit, proceeding or investigation pending or,
to the best of my knowledge, threatened against the Seller which, in my
judgment, either in any one instance or in the aggregate, would draw into
question the validity of the Purchase Agreement or which would be likely to
impair materially the ability of the Seller to perform under the terms of the
Purchase Agreement.
Ex. 2-2
7. The sale of each Mortgage Note and Mortgage as and in the manner
contemplated by the Purchase Agreement is sufficient fully to transfer to the
Purchaser all right, title and interest of the Seller thereto as noteholder and
mortgagee.
8. The Assignments of Mortgage are in recordable form and upon
completion will be acceptable for recording under the laws of the State of
___________. When endorsed, as provided in the Purchase Agreement, the Mortgage
Notes will be duly endorsed under ______________ law.
The opinions above are subject to the following additional
assumptions, exceptions, qualifications and limitations:
A. I have assumed that all parties to the Agreements other than the
Seller have all requisite power and authority to execute, deliver and perform
their respective obligations under each of the Agreements, and that the
Agreements have been duly authorized by all necessary corporate action on the
part of such parties, have been executed and delivered by such parties and
constitute the legal, valid and binding obligations of such parties.
B. My opinion expressed in paragraphs 3 and 7 above is subject to the
qualifications that (i) the enforceability of the Agreements may be limited by
the effect of laws relating to (1) bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, including, without limitation, the effect of
statutory or other laws regarding fraudulent conveyances or preferential
transfers, and (2) general principles of equity upon the specific enforceability
of any of the remedies, covenants or other provisions of the Agreements and upon
the availability of injunctive relief or other equitable remedies and the
application of principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) as such principles relate to,
limit or affect the enforcement of creditors' rights generally and the
discretion of the court before which any proceeding for such enforcement may be
brought; and (ii) I express no opinion herein with respect to the validity,
legality, binding effect or enforceability of (a) provisions for indemnification
in the Agreements to the extent such provisions may be held to be unenforceable
as contrary to public policy or (b) Section 19 of the Purchase Agreement.
C. I have assumed, without independent check or certification, that
there are no agreements or understandings among the Seller, the Purchaser and
any other party which would expand, modify or otherwise affect the terms of the
documents described herein or the respective rights or obligations of the
parties thereunder.
I am admitted to practice in the State of ___________, and I render no
opinion herein as to matters involving the laws of any jurisdiction other than
the State of _________ and the Federal laws of the United States of America.
Very truly yours,
Ex. 2-3
EXHIBIT 3
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 Merrill Lynch Mortgage Holdings Inc.
from the Seller named below pursuant to that certain Master Mortgage Loan
Purchase and Servicing Agreement, dated as of April 1, 2003, 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:
---------------------------------
Ex. 3-1
II. Certification of Release
The Seller named below hereby certifies to Merrill Lynch Mortgage
Holdings Inc. that, as of the Date and Time of Sale of the above mentioned
Mortgage Loans to Merrill Lynch Mortgage Holdings 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.
Greenpoint Mortgage Funding Inc.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Ex. 3-2
EXHIBIT 4
WARRANTY BILL OF SALE
On this _______ day of ________, 20___, Greenpoint Mortgage Funding
Inc. ("Seller") as the Seller under that certain Master Mortgage Loan Purchase
and Servicing Agreement, dated as of April 1, 2003 (the "Agreement") does hereby
sell, transfer, assign, set over and convey to Merrill Lynch Mortgage Holdings
Inc. as Purchaser under the Agreement, without recourse, but subject to the
terms of the Agreement, all rights, title and interest of the Seller in and to
the Mortgage Loans listed on the Final Mortgage Loan Schedule attached hereto,
together with the related Mortgage Files and all rights and obligations arising
under the documents contained therein. Pursuant to Section 6.03 of the
Agreement, the Seller has delivered to the Custodian the documents for each
Mortgage Loan to be purchased as set forth in the Agreement. The contents of
each related Servicing File required to be retained by the Seller to service the
Mortgage Loans pursuant to the Agreement and thus not delivered to the Purchaser
are and shall be held in trust by the Seller for the benefit of the Purchaser as
the owner thereof. The Seller's possession of any portion of each such Servicing
File is at the will of the Purchaser for the sole purpose of facilitating
servicing of the related Mortgage Loan pursuant to the Agreement, and such
retention and possession by the Seller shall be in a custodial capacity only.
The ownership of each Mortgage Note, Mortgage, and the contents of the Mortgage
File and Servicing File is vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Seller shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Seller at the
will of the Purchaser in such custodial capacity only.
The Seller confirms to the Purchaser that the representation and
warranties set forth in Subsections 7.01 and 7.02 of the Agreement are true and
correct as of the date hereof, and that all statements made in the Seller's
Officer's Certificates and all Attachments thereto remain complete, true and
correct in all respects as of the date hereof, and makes the following
additional representations and warranties to the Purchaser, which additional
representations and warranties are hereby incorporated into Subsection 7.02 of
the Agreement:
(1)______ When measured by aggregate Stated Principal Balance as of
the Cut-off Date, no more than ____________ percent (__%) of the Mortgage
Loans are Rate/Term Refinancings and no more than _____________ percent
(__%) of the Mortgage Loans are Cash-Out Refinancings.
(2) When measured by aggregate Stated Principal Balance as of the
Cut-off Date, (i) no less than ______________ percent (__%) of the Mortgage
Loans are secured by detached one-family dwellings or detached one-family
dwellings in planned unit developments, (ii) no more than ____________
percent (__%) of the Mortgage Loans are secured by attached one-family
dwellings in a planned unit development, (iii) no more than ______ percent
(__%) of the Mortgage Loans are secured by individual condominium units,
and (iv) no more than _____ percent (__%) of the Mortgage Loans are secured
by detached two-to-four family dwellings;
Ex. 4-1
(3) When measured by aggregate Stated Principal Balance as of the
Cut-off Date, no more than ______ percent (__%) of the Mortgage Loans had
Loan-to-Value Ratio at origination in excess of 80%, and the weighted
average Loan-to-Value Ratio for all Mortgage Loans at origination did not
exceed __%;
(4) With respect to all of the Mortgage Loans, at the time that the
Mortgage Loan was made, the Mortgagor represented that the Mortgagor would
occupy the Mortgaged Property as the Mortgagor's primary residence;
(5) No Mortgage Loan had a principal balance at origination in excess
of $______ and the average principal balance of the Mortgage Loans on the
Cut-off Date was not in excess of $______. When measured by the aggregate
Stated Principal Balance as of the Cut-off Date, no more than __% of the
Mortgage Loans had a principal balance at origination in excess of
$_________;
(6) Each Mortgage Loan has a Mortgage Interest Rate of at least
______%. The Mortgage Loans have a weighted average Mortgage Interest Rate
of ______% as of the Cut-off Date;
(7) All of the Mortgage Loans had an original term to maturity of 30
years;
(8) With respect to the aggregate Closing Date Principal Balance of
the Mortgage Loans: (a) __% of the Mortgaged Properties will be located in
[_______]; (b) __% of the Mortgaged Properties will be located in [______]
and (c) not more than __% of the Mortgaged Properties will be located in
any other single state. When measured by aggregate Closing Date Principal
Balance as of the Cut-off Date, no more than five percent (5%) of the
Mortgage Loans are secured by Mortgaged Properties located in the same
United States postal zip code;
(9) With respect to the aggregate unpaid principal balance of the
Mortgage Loans, the weighted average FICO Score shall be at least _______.
No Mortgage Loan shall have a FICO Score less than ___; and
(10) The Mortgage Loans have a weighted average remaining term of ___
months.
Ex. 4-2
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
GREENPOINT MORTGAGE FUNDING INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Ex. 4-3
EXHIBIT 5
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Seller or delivered to the
Custodian:
1. Mortgage Loan Documents.
2. Residential loan application.
3. Mortgage Loan closing statement.
4. Verification of employment and income.
5. Verification of acceptable evidence of source and amount of
downpayment.
6. Credit report on Mortgagor.
7. Residential appraisal report.
8. Photograph of the Mortgaged Property.
9. Survey of the Mortgaged Property.
10. Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title
policy, i.e., map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
11. All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
12. If available, termite report, structural engineer's report, water
potability and septic certification.
13. Sales Contract, if applicable.
14. Hazard insurance policy.
15. Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files,
correspondence, current and historical computerized data files,
and all other processing, underwriting and closing papers and
records which are customarily contained in a mortgage loan file
and which are required to document the Mortgage Loan or to
service the Mortgage Loan.
Ex. 5-1
16. Amortization schedule, if available.
17. Payment history for Mortgage Loans that have been closed for more
than 90 days.
18. With respect to each Mortgage Loan which is subject to the
provisions of the Homeownership and Equity Protection Act of
1994, a copy of a notice to each entity which was a purchaser or
assignee of the Mortgage Loan, satisfying the provisions of the
Act and regulations issued thereunder, to the effect that the
Mortgage Loan is subject to special truth in lending rules.
Ex. 5-2
EXHIBIT 6
CUSTODIAL ACCOUNT CERTIFICATION
______________ __, 20___
To: _________________________________
_________________________________
_________________________________
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of April 1, 2003, we hereby authorize and request you to
establish an account, as a Custodial Account, to be designated as "Greenpoint
Mortgage Funding Inc. in trust for the Purchaser and various Mortgagors, Fixed
and Adjustable Rate 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.
GREENPOINT MORTGAGE FUNDING INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Ex. 6-1
The undersigned, as Depository, hereby certifies that the
above-described account has been established under Account Number ___________ at
the office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured to the full extent required by law by the Federal
Deposit Insurance Corporation through the Bank Insurance Fund ("BIF") or the
Savings Association Insurance Fund ("SAIF").
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Ex. 6-2
EXHIBIT 7
ESCROW ACCOUNT CERTIFICATION
______________ __, 20___
To: _________________________________
_________________________________
_________________________________
(the "Depository")
As Seller under the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of April 1, 2003, we hereby authorize and request you to
establish an account, as an Escrow Account, to be designated as "Greenpoint
Mortgage Funding Inc. in trust for the Purchaser and various Mortgagors, Fixed
and Adjustable Rate 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.
GREENPOINT MORTGAGE FUNDING INC.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Ex. 7-1
The undersigned, as Depository, hereby certifies that the
above-described account has been established under Account Number ___________ at
the office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Ex. 7-2
EXHIBIT 8
SERVICING ADDENDUM
Section 11.01 Seller to Act as Servicer. The Seller, as independent
contract servicer, shall service and administer the Mortgage Loans in accordance
with this Agreement and 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.
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, without the prior
written consent of the Purchaser, 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. 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 the Mortgage Loans, the Seller shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Purchaser's reliance
on the Seller.
Section 11.02 Collection of Mortgage Loan Payments. Continuously from
the date hereof until the principal and interest on all Mortgage Loans are paid
in full, 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. 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.
Ex. 8-1
Section 11.02. Realization Upon Defaulted Mortgage Loans. 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 Section 11.01. 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 Section 11.05. In the
event that any payment due under any Mortgage Loan is not paid when the same
becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the 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 Mortgage Loan remains delinquent for a period of 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 Section 11.05.
(a) Notwithstanding the foregoing provisions of this Section 11.03,
with respect to any Mortgage Loan as to which the Seller has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property the Seller shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action,
with respect to, such Mortgaged Property if, as a result of any such action, the
Purchaser would be considered to hold title to, to be a mortgagee-in-possession
of, or to be an owner or operator of such Mortgaged Property within the meaning
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Seller has
also previously determined, based on its reasonable judgment and a prudent
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Purchaser to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
Ex. 8-2
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Purchaser to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 11.03 shall be advanced by the Seller, subject to the Seller's right to
be reimbursed therefor from the Custodial Account as provided in Section
11.05(vi).
If the Seller determines, as described above, that it is in the best
economic interest of the Purchaser to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes, or
petroleum-based materials affecting any such Mortgaged Property, then the Seller
shall take such action as it deems to be in the best economic interest of the
Purchaser. The cost of any such compliance, containment, cleanup or remediation
shall be advanced by the Seller, subject to the Seller's right to be reimbursed
therefor from the Custodial Account as provided in Section 11.05(vi).
(a) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds in respect of any Mortgage Loan, will
be applied in the following order of priority: first, to reimburse the Seller
for any related unreimbursed Servicing Advances, pursuant to Section 11.05(iii);
second, to accrued and unpaid interest on the Mortgage Loan, to the date of the
Final Recovery Determination, or to the Due Date prior to the Remittance Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Seller as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
Section 11.04 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 Certification in the
form of Exhibit 6.
Ex. 8-3
The Seller shall deposit in the Custodial Account within 24 hours of
receipt, 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 Sections 11.10 and 11.11, 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 Monthly Advances;
(vii) all proceeds of any Mortgage Loan repurchased in accordance with
Subsections 7.03 and 7.04 and all amounts required to be deposited by the Seller
in connection with shortfalls in principal amount of Qualified Substitute
Mortgage Loans pursuant to Subsection 7.03;
(viii) any amounts required to be deposited by the Seller pursuant to
Section 11.11 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;
(ix) any amounts required to be deposited by the Seller in connection
with any REO Property pursuant to Section 11.13;
(x) any amounts required to be deposited in the Custodial Account
pursuant to Sections 11.19 or 11.20; and
(xi) with respect to each Principal Prepayment in full, an amount (to
be paid by the Seller out of its own funds without reimbursement therefor)
which, when added to all amounts allocable to interest received in connection
with such Principal Prepayment, equals one month's interest on the amount of
principal so prepaid at the Mortgage Interest Rate, provided, however, that in
no event shall the aggregate of deposits made by the Seller pursuant to this
clause (xi) exceed the aggregate amount of the Seller's servicing compensation
in the calendar month in which such deposits are required.
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,
Ex. 8-4
payments in the nature of late payment charges and assumption fees, to the
extent permitted by Section 11.01, need not be deposited by the Seller in the
Custodial Account. Such Custodial Account shall be an Eligible Account. Any
interest or earnings 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 Section 11.05(iii). The Seller shall give notice to the
Purchaser of the location of the Custodial Account when established and prior to
any change thereof.
If the balance on deposit in the Custodial Account exceeds $75,000 as
of the commencement of business on any Business Day and the Custodial Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of Eligible Account, the Seller shall, on or before twelve o'clock noon Eastern
time on such Business Day, withdraw from the Custodial Account any and all
amounts payable to the Purchaser and remit such amounts to the Purchaser by wire
transfer of immediately available funds.
Section 11.05 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 Section 11.14;
(ii) to reimburse itself for Monthly Advances, the Seller's right to
reimburse itself pursuant to this subclause (ii) being limited to amounts
received on the related Mortgage Loan which represent late collections (net of
the related Servicing Fees) respecting which any such advance was made it being
understood that, in the case of such reimbursement, the Seller's right thereto
shall be prior to the rights of Purchaser, except that, where the Seller is
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03, the
Seller's right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to Subsection 7.03, and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loans;
(iii) to reimburse itself for unreimbursed Servicing Advances, the
Seller's right to reimburse itself pursuant to this subclause (iii) with respect
to any Mortgage Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be collected by the
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 Subsection 7.03, the
Seller's right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to Subsection 7.03 and all other
amounts required to be paid to the Purchaser with respect to such Mortgage
Loans;
(iv) to pay to (1) itself pursuant to Section 11.22 and Section 13 as
servicing compensation (a) any interest earned on funds in the Custodial Account
(all such interest to be withdrawn monthly not later than each Remittance Date),
and (b) the Subservicing Fee portion of the Servicing Fee from that portion of
any payment or recovery as to interest on a particular Mortgage Loan, and (2)
Terwin, pursuant to Section 13, the Servicing Strip portion of the
Ex. 8-5
Servicing Fee from that portion of any payment or recovery as to interest on a
particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that has been
repurchased pursuant to Subsection 7.03 all amounts received thereon and not
distributed as of the date on which the related Repurchase Price is determined;
(vi) to reimburse the Seller for any Monthly Advance previously made
which the Seller has determined to be a Nonrecoverable Monthly Advance;
(vii) to pay, or to reimburse the Seller for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to Section
11.03(b), but only to the extent of amounts received in respect of the Mortgage
Loans to which such expense is attributable;
(viii) to clear and terminate the Custodial Account on the termination
of this Agreement.
The Seller shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Custodial Account pursuant to such subclauses (ii) - (vii) above. The Seller
shall provide written notification in the form of an Officers' Certificate to
the Purchaser, on or prior to the next succeeding Remittance Date, upon making
any withdrawals from the Custodial Account pursuant to subclause (vi) above.
Section 11.06 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 Certification in the form of Exhibit 7.
The Seller shall deposit in the Escrow Account or Accounts within 24
hours of receipt, and retain therein, (i) all Escrow Payments collected on
account of the Mortgage Loans, for the purpose of effecting timely payment of
any such items as required under the terms of this Agreement, and (ii) all
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 Section 11.08. 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.
Section 11.07 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
Ex. 8-6
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, or (vii) to clear and terminate the Escrow
Account on the termination of this Agreement.
Section 11.08 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 a Qualified Insurer, 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 that
amount for which Fannie Mae no longer requires such insurance to be maintained.
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 a Qualified Insurer. 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 Section 11.19, 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
Ex. 8-7
take such action as shall be necessary to permit recovery under any Primary
Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to Section
11.04, any amounts collected by the Seller under any Primary Insurance Policy
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 11.05.
Section 11.09 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.
Section 11.10 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 Section 11.04, 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 Section 11.05. 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 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
Ex. 8-8
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.
Section 11.11 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 Section 11.10 and otherwise complies with all
other requirements of Section 11.10, the Seller shall conclusively be deemed to
have satisfied its obligations as set forth in Section 11.10, 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 Section
11.10, 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 days prior written notice to the Purchaser.
Section 11.12 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 Fannie Mae or Freddie Mae on all officers,
employees or other persons acting in any capacity with regard to the Mortgage
Loans to handle funds, money, documents and papers relating to the Mortgage
Loans. 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 Section 11.12
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 Fannie Mae in the
Fannie Mae Servicing Guide or by Freddie Mac in the Freddie Mac 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 days' prior written notice to the Purchaser.
Ex. 8-9
Section 11.13 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 annually 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 separate servicing agreement between 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.
Ex. 8-10
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 creation of any REO Account shall be evidenced by a letter
agreement substantially in the form of the Custodial Account Certification
attached as Exhibit 6 hereto. An original of such letter agreement shall be
furnished to any Purchaser upon request.
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 Section 11.10 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 Remittance 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 Remittance Date in accordance with Section 11.14.
Section 11.14 Distributions. On each Remittance Date, the Seller shall
distribute to the Purchaser all amounts credited to the Custodial Account as of
the close of business on the preceding Determination Date, net of charges
against or withdrawals from the Custodial Account pursuant to Section 11.05;
plus (ii) all Monthly Advances, if any, which the Seller is obligated to
distribute pursuant to Section 11.21, minus (iii) any amounts attributable to
Principal Prepayments received after the last day of the calendar month
immediately preceding the related Remittance Date and (iv) any amounts
attributable to Monthly Prepayments collected but due on a Due Date or Dates
subsequent to the preceding Determination Date.
All distributions made to the Purchaser on each Remittance Date will
be made to the Purchaser of record on the preceding Record Date, and shall be
based on the Mortgage Loans owned and held by the Purchaser, and shall be made
by wire transfer of immediately available funds to the account of the Purchaser
at a bank or other entity having appropriate facilities therefor, if the
Purchaser shall have so notified the Seller or by check mailed to the address of
the Purchaser.
Ex. 8-11
With respect to any remittance received by the Purchaser on or after
the second Business Day following the Business Day on which suchb 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 The Chase Manhattan Bank, 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.
Section 11.15 Remittance Reports. No later than the tenth Business Day
of each month, the Seller shall furnish to the Purchaser or its designee a file
via computer tape, email or modem containing, and a hard copy of, the monthly
data. On the Business Day following each Determination Date, the Seller shall
deliver to the Purchaser or its designee by telecopy (or by such other means as
the Seller and the Purchaser may agree from time to time) a computer tape
containing, and a hard copy of, the determination data with respect to the
related Remittance Date, together with such other information with respect to
the Mortgage Loans as the Purchaser may reasonably require to allocate
distributions made pursuant to this Agreement and provide appropriate statements
with respect to such distributions. On the same date, the Seller shall forward
to the Purchaser by overnight mail a computer readable magnetic tape containing
the information reasonably requested by the Purchaser with respect to the
related Remittance Date.
Section 11.16 Statements to the Purchaser. With respect to the
Mortgage Loans, the Seller shall provide the Purchaser on the Remittance Date, a
report that shall set forth for the prior month for each Mortgage Loan: (i) the
status of the Custodial Account as of the close of business on such Remittance
Date and showing, for the period covered by such statement, the aggregate amount
of deposits into and withdrawals from the Custodial Account of each category of
deposit specified in Section 11.04 and each category of withdrawal specified in
Section 11.05; (ii) the Mortgage Interest Rate; (iii) the amount of any
shortfall in the Servicing Fee due to delinquencies; (iv) the amount of any
delinquency in the scheduled payment of principal and interest delineated at 30
days, 60 days and greater than 90 days past due; and (v) such other information
as may be reasonably requested by the Purchaser.
In addition, not more than sixty 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
Ex. 8-12
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.
Section 11.17 Real Estate Owned Reports. Together with the statement
furnished pursuant to Section 11.02, 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.
Section 11.18 Liquidation Reports. Upon the foreclosure sale of any
Mortgaged Property or the acquisition thereof by the Purchaser pursuant to a
deed-in-lieu of foreclosure, the Seller shall submit to the Purchaser a
liquidation report with respect to such Mortgaged Property.
Section 11.19 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 Section 11.19, 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, the
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
Ex. 8-13
balance of the Mortgage Loan shall be deposited in the Custodial Account
pursuant to Section 11.04.
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 Section 11.19, 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.
Section 11.20 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 of the Seller (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 Section 11.04 have been or
will be so deposited, and shall request execution of any document necessary to
satisfy the Mortgage Loan and delivery to it 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 remit to the
Purchaser the then outstanding principal balance of the related Mortgage Loan by
deposit thereof in the Custodial Account. 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 servicing 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
Ex. 8-14
that such Mortgage Loan was liquidated, the servicing receipt shall be released
by the Purchaser to the Seller.
Section 11.21 Monthly Advances by the Seller. Not later than the close
of business on the Business Day preceding each Remittance Date, the Seller shall
deposit in the Custodial Account an amount equal to all payments not previously
advanced by the Seller, whether or not deferred pursuant to Section 11.01, of
principal (due after the Cut-off Date) and interest not allocable to the period
prior to the Cut-off Date, at the Mortgage Interest Rate net of the Servicing
Fee, which were due on a Mortgage Loan and delinquent at the close of business
on the related Determination Date.
(a) The obligation of the Seller to make such Monthly Advances is
mandatory, notwithstanding any other provision of this Agreement, and, with
respect to any Mortgage Loan or REO Property, shall continue through foreclosure
of the Mortgaged Property; provided that, notwithstanding anything herein to the
contrary, no Monthly Advance shall be required to be made hereunder by the
Seller if such Monthly Advance would, if made, constitute a Nonrecoverable
Monthly Advance. The determination by the Seller that it has made a
Nonrecoverable Monthly Advance or that any proposed Monthly Advance, if made,
would constitute a Nonrecoverable Monthly Advance, shall be evidenced by an
Officers' Certificate delivered to the Purchaser.
Section 11.22 Servicing Compensation. As compensation for its services
hereunder, the Seller shall, subject to Section 11.04(xi), Section 11.05 and
Section 13, be entitled to withdraw from the Custodial Account or to retain from
interest payments on the Mortgage Loans the amounts provided for as the portion
of the Servicing Fee equal to the Subservicing Fee. Additional servicing
compensation in the form of assumption fees, as provided in Section 11.19, and
late payment charges or otherwise shall be retained by the Seller to the extent
not required to be deposited in the Custodial Account. The Seller shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder and shall not be entitled to reimbursement therefor except
as specifically provided for.
Section 11.23 Notification of Adjustments. On each Adjustment Date,
the Seller shall make interest rate adjustments for each Adjustable Rate
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 Owner 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 Owner 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.
Section 11.24 Statement as to Compliance. The Seller will deliver to
the Purchaser not later than 90 days following the end of each fiscal year of
the Seller, which as of the Closing Date ends on the last day in December in
each calendar year, an Officers' Certificate stating, as to each signatory
thereof, that (i) a review of the activities of the Seller during the
Ex. 8-15
preceding year and of performance under this Agreement has been made under such
officers' 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 throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of such statement shall be
provided by the Purchaser to any Person identified as a prospective purchaser of
the Mortgage Loans.
Section 11.25 Independent Public Accountants' Servicing Report. Not
later than 90 days following the end of each fiscal year of the Seller, the
Seller at its expense shall cause a firm of independent public accountants
(which may also render other services to the Seller) which is a member of the
American Institute of Certified Public Accountants to furnish a statement to the
Purchaser or its designee to the effect that such firm has examined certain
documents and records relating to the servicing of the Mortgage Loans under this
Agreement or of mortgage loans under pooling and servicing agreements (including
the Mortgage Loans and this Agreement) substantially similar one to another
(such statement to have attached thereto a schedule setting forth the pooling
and servicing agreements covered thereby) and that, on the basis of such
examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm confirms that such servicing
has been conducted in compliance with such pooling and servicing agreements
except for such significant exceptions or errors in records that, in the opinion
of such firm, the Uniform Single Attestation Program for Mortgage Bankers
requires it to report. Copies of such statement shall be provided by the
Purchaser to any Person identified as a prospective purchaser of the Mortgage
Loans.
Section 11.26 Access to Certain Documentation. The Seller shall
provide to the Office of Thrift Supervision, the FDIC and any other federal or
state banking or insurance regulatory authority that may exercise authority over
the Purchaser access to the documentation regarding the Mortgage Loans serviced
by the Seller required by applicable laws and regulations. Such access shall be
afforded without charge, but only upon reasonable request and during normal
business hours at the offices of the Seller. In addition, access to the
documentation will be provided to the Purchaser and any Person identified to the
Seller by the Purchaser without charge, upon reasonable request during normal
business hours at the offices of the Seller.
Section 11.27 Reports and Returns to be Filed by the Seller. The
Seller shall file information reports with respect to the receipt of mortgage
interest received in a trade or business, reports of foreclosures and
abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Section 11.28 Compliance with REMIC Provisions. If a REMIC election
has been made with respect to the arrangement under which the Mortgage Loans and
REO Property are held, the Seller shall not take any action, cause the REMIC to
take any action or fail to take (or fail to cause to be taken) any action that,
under the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of the REMIC as a REMIC or (ii) result in the imposition of
a tax upon the REMIC (including but not limited to the tax on "prohibited
transactions" as defined in Section 860F(a)(2) of the Code and the tax on
"contributions" to a
Ex. 8-16
REMIC set forth in Section 860G(d) of the Code) unless the Seller has received
an Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such REMIC status
or result in the imposition of any such tax.
Section 11.29 Inspections. The Seller shall inspect the Mortgaged
Property as often as deemed necessary by the Seller to assure itself that the
value of the Mortgaged Property is being preserved. In addition, if any Mortgage
Loan is more than 60 days delinquent, the Seller immediately shall inspect the
Mortgaged Property and shall conduct subsequent inspections in accordance with
Accepted Servicing Practices or as may be required by the primary mortgage
guaranty insurer. The Seller shall keep a written report of each such
inspection.
Section 11.30 Credit Reporting. The Seller shall fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information on the Mortgagor credit files to Equifax,
Experian and Trans Union Credit Information Company on a monthly basis.
Section 11.31 Compliance with Safeguarding Customer Information
Requirements. The Seller has implemented and will maintain security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information published in final form on
February 1, 2001, 66 Fed. Reg. 8616, and the rules promulgated thereunder, as
amended from time to time (the "Guidelines"). The Seller shall promptly provide
Purchaser with information regarding such security measures upon the reasonable
request of Purchaser which information shall include, but not be limited to, any
SAS 70 report covering the Seller's operations, and any other audit reports,
summaries of test results or equivalent measures taken by the Seller with
respect to its security measures.
Ex. 8-17
EXHIBIT 9
FORM OF PURCHASE PRICE AND TERMS LETTER
Ex. 9-1
EXHIBIT 11
ANNUAL CERTIFICATION
Re: [_______________] (the "Trust"), Mortgage Pass-Through Certificates,
Series [_____], issued pursuant to the Pooling and Servicing
Agreement, dated as of [_____], 2003 (the "Pooling and Servicing
Agreement"), among [_____], as depositor (the "Depositor"), [_____],
as trustee (the "Trustee"), [_____], as servicer (the "Servicer"), and
[_____], as responsible party
I, [identify the certifying individual], certify to the Depositor and the
Trustee, and their officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
1. The servicing information required to be provided to the Trustee by
the Servicer under the Pooling and Servicing Agreement has been so
provided;
2. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon my
knowledge and the annual compliance review required under the Pooling and
Servicing Agreement, and except as disclosed in the annual compliance
statement required to be delivered to the Trustee in accordance with the
terms of the Pooling and Servicing Agreement (which has been so delivered
to the Trustee), the Servicer has fulfilled its obligations under the
Pooling and Servicing Agreement; and
3. All significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards for purposes of the report provided by
an independent public accountant, after conducting a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar procedure, as set forth in the Pooling and Servicing Agreement,
have been disclosed to such accountant and are included in such report.
Date:
-------------------------------
-------------------------------------
[Signature]
-------------------------------------
[Title]
Ex. 9-1
SCHEDULE ONE
FINAL MORTGAGE LOAN SCHEDULE
Sch. One - 1
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘8-K’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 10/16/06 | | | | | | | None on these Dates |
| For Period End: | | 9/1/06 |
| | 3/10/04 | | 43 |
| | 4/1/03 | | 1 | | 70 |
| | 2/1/01 | | 88 |
| List all Filings |
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