|
EXECUTION COPY
================================================================================
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
DATED AS OF DECEMBER 1, 2004,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of August 1, 2004
Mortgage Asset-Backed Pass-Through Certificates
Series 2004-QS16
================================================================================
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Article I
DEFINITIONS....................................................................4
Section 1.01.
Definitions..........................................................4
Section 1.02. Use of Words and
Phrases............................................15
Article II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL
ISSUANCE OF
CERTIFICATES...........................................................17
Section 2.01. Conveyance of Mortgage
Loans.......................................17
Section 2.02. Acceptance by Trustee. (See Section 2.02 of the
Standard
Terms)...............................................................17
Section 2.03. Representations, Warranties and Covenants of
the
Master Servicer and the
Company......................................17
Section 2.04. Representations and Warranties of
Sellers............................22
Section 2.05. Execution and Authentication of
Certificates/Issuance of
Certificates Evidencing Interests in REMIC I and REMIC
II............20
Section 2.06. Conveyance of Uncertificated REMIC I Regular
Interests and
REMIC II Regular Interests; Acceptance by the
Trustee................20
Section 2.07. Issuance of Certificates Evidencing Interests in
REMIC III...........20
Section 2.08. Purposes and Powers of the Trust (See Section 2.08
of the
Standard
Terms)......................................................20
Article III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS................................21
Article IV PAYMENTS TO
CERTIFICATEHOLDERS.................................................22
Section 4.01. Certificate Account. (See Section 4.01 of the
Standard Terms) .....22
Section 4.02. Distributions.
......................................................22
Section 4.03. Statements to Certificateholders; Statements to
the Rating
Agencies; Exchange Act Reporting (See Section 4.03 of the
Standard
Terms)......................................................30
Section 4.04. Distribution of Reports to the Trustee and the
Company;
Advances by the Master Servicer (See Section 4.04 of the
Standard
Terms)......................................................30
Section 4.05. Allocation of Realized Losses.
......................................30
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property.
(See Section 4.06 of the Standard
Terms).............................31
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
(See Section
4.07 of the Standard
Terms)..........................................31
Section 4.08. Surety Bond. (See Section 4.08 of the Standard
Terms)................31
Article V THE
CERTIFICATES................................................................32
Article VI THE COMPANY AND THE MASTER
SERVICER..........................................33
i
<PAGE>
Article VII
DEFAULT......................................................................34
Article VIII CONCERNING THE
TRUSTEE.......................................................35
Article IX
TERMINATION..................................................................36
Article X REMIC
PROVISIONS............................................................37
Section 10.01.REMIC Administration. (See Section 10.01 of the
Standard Terms).....37
Section 10.02.Master Servicer; REMIC Administrator and
Trustee
Indemnification. (See Section 10.02 of the Standard
Terms)..........37
Section 10.03.Designation of
REMICs................................................37
Section 10.04.Distributions on the Uncertificated REMIC I and
REMIC II
Regular
Interests....................................................37
Section 10.05.Compliance with Withholding
Requirements.............................37
Article XI MISCELLANEOUS
PROVISIONS......................................................38
Section 11.01.Amendment. (See Section 11.01 of the Standard
Terms)................38
Section 11.02.Recordation of Agreement; Counterparts. (See
Section 11.02 of
the Standard
Terms)..................................................38
Section 11.03.Limitation on Rights of Certificateholders. (See
Section 11.03
of the Standard
Terms)...............................................38
Section 11.04.Governing Laws. (See Section 11.04 of the Standard
Terms)...........38
Section
11.05.Notices..............................................................38
Section 11.06.Required Notices to Rating Agency and Subservicer.
(See
Section 11.06 of the Standard
Terms).................................39
Section 11.07.Severability of Provisions. (See Section 11.07 of
the Standard
Terms)...............................................................39
Section 11.08.Supplemental Provisions for Resecuritization. (See
Section
11.08 of the Standard
Terms).........................................39
Section 11.09.Allocation of Voting
Rights..........................................39
Section 11.10.No
Petition..........................................................39
ii
</TABLE>
<PAGE>
EXHIBITS
Exhibit One-I: Mortgage Loan Schedule (Group I Loans)
Exhibit One-II: Mortgage Loan Schedule (Group II Loans)
Exhibit Two: Schedule of Discount Fractions
Exhibit Three: Information to be Included in
Monthly Distribution Date Statement
Exhibit Four: Standard Terms of Pooling and Servicing
Agreement Dated as of August 1, 2004
iii
<PAGE>
This is a Series Supplement, dated as of December 1, 2004 (the
"Series
Supplement"), to the Standard Terms of Pooling and Servicing
Agreement, dated as
of August 1, 2004 and attached as Exhibit Four hereto (the
"Standard Terms" and,
together with this Series Supplement, the "Pooling and Servicing
Agreement" or
"Agreement"), among RESIDENTIAL ACCREDIT LOANS, INC., as the
company (together
with its permitted successors and assigns, the "Company"),
RESIDENTIAL FUNDING
CORPORATION, as master servicer (together with its permitted
successors and
assigns, the "Master Servicer"), and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as
Trustee (together with its permitted successors and assigns, the
"Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell mortgage asset-backed
pass-through
certificates (collectively, the "Certificates"), to be issued
hereunder in
multiple classes, which in the aggregate will evidence the
entire beneficial
ownership interest in the Mortgage Loans (as defined herein. As
provided herein,
the REMIC Administrator will make an election to treat the
entire segregated
pool of assets described in the definition of Trust Fund, and
subject to this
Agreement (including the Mortgage Loans), as three real estate
mortgage
investment conduits (each, a "REMIC") for federal income tax
purposes.
The terms and provisions of the Standard Terms are hereby
incorporated
by reference herein as though set forth in full herein. If any
term or provision
contained herein shall conflict with or be inconsistent with any
provision
contained in the Standard Terms, the terms and provisions of
this Series
Supplement shall govern. All capitalized terms not otherwise
defined herein
shall have the meanings set forth in the Standard Terms. The
Pooling and
Servicing Agreement shall be dated as of the date of this Series
Supplement.
1
<PAGE>
The following table sets forth the designation, type,
Pass-Through Rate,
aggregate Initial Certificate Principal Balance, Maturity Date,
initial ratings
and certain features for each Class of Certificates comprising
the interests in
the Trust Fund created hereunder.
<TABLE>
<CAPTION>
Aggregate Initial
Pass-Through Certificate Maturity Fitch/ Minimum
Designation Rate Principal Balance Features1 Date Moody's
Denominations2
<S> <C> <C> <C> <C> <C>
<C>
Class I-A-1 5.50% $325,000.,000.00 Senior/Fixed Rate December
25, 2034 AAA/Aaa $25,000.00
Class I-A-2 5.50% $15,000.,000.00 Senior/Fixed Rate December 25,
2034 AAA/Aaa $25,000.00
Class I-A-3 5.50% $17,496.,000.00 Senior/Fixed Rate December 25,
2034 AAA/Aaa $25,000.00
Senior/Interest Only/
Class I-A-4 6.00% $0.00(3) Fixed Rate December 25, 2034 AAA/Aaa
$2,000,000.00
Class I-A-5 5.50% $43,000.,000.00 Senior/Lockout/Fixed Rate
December 25, 2034 AAA/Aaa $25,000.00
Class II-A-1 5.00% $100,459,000.00 Senior/Fixed Rate December
25, 2019 AAA/Aaa $25,000.00
Class I-A-P 0.00% $9,107,012.76 Senior/Principal Only December
25, 2034 AAA/Aaa $25,000.00
Class I-A-V Variable $0.00 Senior/Interest Only/ December 25,
2034 AAA/Aaa $2,000,000.00
Rate(4) Variable Rate
Class II-A-P 0.00% $107,120.64 Senior/Principal Only December
25, 2019 AAA/Aaa $25,000.00
Class II-A-V Variable $0.00 Senior/Interest Only/ December 25,
2019 AAA/Aaa $2,000,000.00
Rate(5) Variable Rate
Class R-I 6.00% $100.00 Senior/Residual/Fixed Rate December 25,
2034 AAA/Aaa 6
Class R-II 5.00% $100.00 Senior/Residual/Fixed Rate December 25,
2019 AAA/Aaa 6
Class R-III 6.00% $100.00 Senior/Residual/Fixed Rate December
25, 2034 AAA/Aaa 6
Class I-M-1 6.00% $9,691,700.00 Mezzanine/Fixed Rate December
25, 2034 AA/NA $25,000.00
Class I-M-2 6.00% $3,876,400.00 Mezzanine/Fixed Rate December
25, 2034 A/NA $250,000.00
Class I-M-3 6.00% $2,153,600.00 Mezzanine/Fixed Rate December
25, 2034 BBB/NA $250,000.00
Class II-M-1 5.00% $2,496,200.00 Mezzanine/Fixed Rate December
25, 2019 AA/NA $25,000.00
Class II-M-2 5.00% $208,000.00 Mezzanine/Fixed Rate December 25,
2019 A/NA $250,000.00
Class II-M-3 5.00% $312,000.00 Mezzanine/Fixed Rate December 25,
2019 BBB/NA $250,000.00
Class I-B-1 6.00% $2,153,500.00 Subordinate/Fixed Rate December
25, 2034 BB/NA $250,000.00
Class I-B-2 6.00% $1,292,100.00 Subordinate/Fixed Rate December
25, 2034 B/NA $250,000.00
Class I-B-3 6.00% $1,938,287.73 Subordinate/Fixed Rate December
25, 2034 NA/NA $250,000.00
Class II-B-1 5.00% $156,000.00 Subordinate/Fixed Rate December
25, 2019 BB/NA (2)
Class II-B-2 5.00% $104,000.00 Subordinate/Fixed Rate December
25, 2019 B/NA (2)
Class II-B-3 5.00% $156,061.08 Subordinate/Fixed Rate December
25, 2019 NA/NA (2)
</TABLE>
--------
1 The Certificates, other than the Class B and Class R
Certificates, shall be
Book-Entry Certificates. The Class B and Class R Certificates
shall be
delivered to the holders thereof in physical form.
2 The Certificates, other than the Class R Certificates, shall
be issuable in
minimum dollar denominations as indicated above (by Certificate
Principal
Balance or Notional Amount, as applicable) and integral
multiples of $1 (or
$1,000 in the case of the Class I-A-P, Class II-A-P, Class
I-B-1, Class
I-B-2, Class I-B-3, Class II-B-1, Class II-B-2 and Class
II-B-3
Certificates) in excess thereof, except that one Certificate of
any of the
Class I-A-P, Class II-A-P, Class I-B-1, Class I-B-2, Class
I-B-3, Class
II-B-1, Class II-B-2 and Class II-B-3 Certificates that contain
an uneven
multiple of $1,000 shall be issued in a denomination equal to
the sum of
the related minimum denomination set forth above (or in the case
of the
Class II-B-1, Class II-B-2 and Class II-B-3 Certificates in
minimum
original denominations equal to the initial Certificate
Principal Balance
of such Certificate) and such uneven multiple for such Class or
the sum of
such denomination and an integral multiple of $1,000.
3 The Class I-A-4 Certificates do not have a principal balance.
For the
purpose of calculating interest payments, interest on the Class
I-A-4
Certificates will accrue on a notional amount equal to
aggregate
Certificate Principal Balance of the Class I-A-1, Class I-A-2,
Class I-A-3
and Class I-A-5 Certificates immediately prior to the related
Distribution
Date divided by 12.
2
<PAGE>
4 The initial Pass-Through Rate on the Class I-A-V Certificates
is 0.1672%.
5 The initial Pass-Through Rate on the Class II-A-V Certificates
is 0.4884%.
6 Each class of the Class R Certificates shall be issuable in
minimum
denominations of not less than a 20% Percentage Interest;
provided,
however, that one Class R Certificate of each Class will be
issuable to
Residential Funding as "tax matters person" pursuant to Section
10.01(c)
and (e) in a minimum denomination representing a Percentage
Interest of not
less than 0.01%.
The Group I Loans have an aggregate principal balance as of the
Cut-off
Date of $430,708,800.49. The Group II Loans have an aggregate
principal balance
as of the Cut-off Date of $103,998,481.72.
In consideration of the mutual agreements herein contained, the
Company,
the Master Servicer and the Trustee agree as follows:
ARTICLE I
3
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and
phrases, unless
the context otherwise requires, shall have the meanings
specified in this
Article.
Accrued Certificate Interest: With respect to each Distribution
Date, as
to any Class or Subclass of Certificates (other than any
Principal Only
Certificates), interest accrued during the related Interest
Accrual Period at
the related Pass-Through Rate on the Certificate Principal
Balance or Notional
Amount thereof immediately prior to such Distribution Date.
Accrued Certificate
Interest will be calculated on the basis of a 360-day year,
consisting of twelve
30-day months. In each case Accrued Certificate Interest on any
Class or
Subclass of Certificates will be reduced by the amount of:
(i) Prepayment Interest Shortfalls on all Mortgage Loans in
the
related Loan Group (to the extent not offset by the Master
Servicer with a payment of Compensating Interest as provided
in
Section 4.01),
(ii) the interest portion (adjusted to the Net Mortgage Rate (or
the
Modified Net Mortgage Rate in the case of a Modified
Mortgage
Loan)) of Realized Losses on all Mortgage Loans in the
related
Loan Group (including Excess Special Hazard Losses, Excess
Fraud
Losses, Excess Bankruptcy Losses and Extraordinary Losses)
not
allocated solely to one or more specific Classes of
Certificates
pursuant to Section 4.05,
(iii) the interest portion of Advances that were (A) previously
made
with respect to a Mortgage Loan or REO Property on the
Mortgage
Loans in the related Loan Group, which remained unreimbursed
following the Cash Liquidation or REO Disposition of such
Mortgage Loan or REO Property and (B) made with respect to
delinquencies that were ultimately determined to be Excess
Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy
Losses or Extraordinary Losses on the Mortgage Loans in the
related Loan Group and were not allocated solely to one or
more
specific Classes of Certificates pursuant to Section 4.05,
and
(iv) any other interest shortfalls not covered by the
subordination
provided by the related Class M Certificates and related Class
B
Certificates, including interest that is not collectible from
the
Mortgagor pursuant to the Servicemembers Civil Relief Act,
as
amended, or similar legislation or regulations as in effect
from
time to time,
with all such reductions allocated the related Senior Percentage
of such
reductions among the related Senior Certificates in the related
Certificate
Group in proportion to the amounts of Accrued Certificate
Interest payable from
the related Loan Group on such Distribution Date absent such
reductions, with
the remainder of such reductions allocated among the holders of
the related
Class M Certificates and related Class B Certificates in
proportion to their
respective amounts of Accrued Certificate Interest payable on
such Distribution
Date absent such reductions. In addition to that portion of the
reductions
4
<PAGE>
described in the preceding sentence that are allocated to any
Class of Class B
Certificates or any Class of Class M Certificates, Accrued
Certificate Interest
on such Class of Class B Certificates or such Class of Class M
Certificates will
be reduced by the interest portion (adjusted to the Net Mortgage
Rate) of
Realized Losses that are allocated solely to such Class of Class
B Certificates
or such Class of Class M Certificates pursuant to Section
4.05.
Affected Loan Group: As to any Excess Special Hazard Loss or
Excess
Fraud Loss, the Loan Group of the Mortgage Loan on which such
loss occurred.
Available Distribution Amount: As to any Distribution Date and
each Loan
Group, an amount equal to (a) the sum of (i) the amount relating
to the Mortgage
Loans on deposit in the Custodial Account as of the close of
business on the
immediately preceding Determination Date, including any
Subsequent Recoveries,
and amounts deposited in the Custodial Account in connection
with the
substitution of Qualified Substitute Mortgage Loans, (ii) the
amount of any
Advance made on the immediately preceding Certificate Account
Deposit Date,
(iii) any amount deposited in the Certificate Account on the
related Certificate
Account Deposit Date pursuant to the second paragraph of Section
3.12(a), (iv)
any amount deposited in the Certificate Account pursuant to
Section 4.07, (v)
any amount that the Master Servicer is not permitted to withdraw
from the
Custodial Account or the Certificate Account pursuant to Section
3.16(e), (vi)
any amount received by the Trustee pursuant to the Surety Bond
in respect of
such Distribution Date, (vii) the proceeds of any Pledged Assets
received by the
Master Servicer and (viii) any Diverted Amount allocated to such
Loan Group from
the non-related Loan Group pursuant to Section 4.05, reduced by
(b) the sum as
of the close of business on the immediately preceding
Determination Date of (w)
aggregate Foreclosure Profits, (x) the Amount Held for Future
Distribution, and
(y) amounts permitted to be withdrawn by the Master Servicer
from the Custodial
Account in respect of the Mortgage Loans in the related Loan
Group pursuant to
clauses (ii)-(x), inclusive, of Section 3.10(a) and (c) any
Diverted Amount
allocated from such Loan Group to the non-related Loan Group
pursuant to Section
4.05. Such amount shall be determined separately for each Loan
Group.
Bankruptcy Amount: With respect to each Loan Group as of any
date of
determination prior to the first anniversary of the Cut-off
Date, an amount
equal to the excess, if any, of (A) $186,749, in the case of
Loan Group I, and
$100,000, in the case of Loan Group II, over (B) the aggregate
amount of
Bankruptcy Losses allocated solely to one or more specific
Classes of
Certificates in the related Certificate Group in accordance with
Section 4.05 of
this Series Supplement. As of any date of determination on or
after the first
anniversary of the Cut-off Date, an amount equal to the excess,
if any, of
(1) the lesser of (a) the related Bankruptcy Amount calculated
as
of the close of business on the Business Day immediately
preceding the
most recent anniversary of the Cut-off Date coinciding with or
preceding
such date of determination (or, if such date of determination is
an
anniversary of the Cut-off Date, the Business Day immediately
preceding
such date of determination) (for purposes of this definition,
the
"Relevant Anniversary") and (b) the greater of
5
<PAGE>
(A) (i) if the aggregate principal balance of the
Non-Primary Residence Loans in the related Loan Group as of
the
Relevant Anniversary is less than 10% of the Stated
Principal
Balance of the Mortgage Loans in the related Loan Group as of
the
Relevant Anniversary, $0.00, or (ii) if the aggregate
principal
balance of the Non-Primary Residence Loans in the related
Loan
Group as of the Relevant Anniversary is equal to or greater
than
10% of the Stated Principal Balance of the Mortgage Loans in
the
related Loan Group as of the Relevant Anniversary, the sum of
(I)
the aggregate principal balance of the Non-Primary Residence
Loans in the related Loan Group with a Loan-to-Value Ratio
of
greater than 80.00% but less than or equal to 90.00% (other
than
Additional Collateral Loans), times 0.25%, (II) the
aggregate
principal balance of the Non-Primary Residence Loans in the
related Loan Group with a Loan-to-Value Ratio of greater
than
90.00% but less than or equal to 95.00% (other than
Additional
Collateral Loans), times 0.50%, and (III) the aggregate
principal
balance of the Non-Primary Residence Loans in the related
Loan
Group with a Loan-to-Value Ratio of greater than 95.00%
(other
than Additional Collateral Loans) times 0.75%, in each case as
of
the Relevant Anniversary; and
(B) the greater of (i) the product of (x) an amount equal
to the largest difference in the related Monthly Payment for
any
Non-Primary Residence Loan remaining in the related Loan
Group
(other than Additional Collateral Loans) which had an
original
Loan-to-Value Ratio of 80% or greater that would result if
the
Net Mortgage Rate thereof was equal to the weighted average
(based on the principal balance of the Mortgage Loans in the
related Loan Group as of the Relevant Anniversary) of the
Net
Mortgage Rates of all Mortgage Loans in the related Loan Group
as
of the Relevant Anniversary less 1.25% per annum, (y) a
number
equal to the weighted average remaining term to maturity, in
months, of all Non-Primary Residence Loans remaining in the
related Loan Group as of the Relevant Anniversary, and (z)
one
plus the quotient of the number of all Non-Primary Residence
Loans remaining in the related Loan Group divided by the
total
number of Outstanding Mortgage Loans in the related Loan Group
as
of the Relevant Anniversary, and (ii) $50,000,
over (2) the aggregate amount of Bankruptcy Losses on
Mortgage
Loans in the related Loan Group allocated solely to one or more
specific
Classes of related Certificates in accordance with Section 4.05
since
the Relevant Anniversary.
The Bankruptcy Amount for each Loan Group may be further reduced
by the
Master Servicer (including accelerating the manner in which such
coverage is
reduced) provided that prior to any such reduction, the Master
Servicer shall
(i) obtain written confirmation from each Rating Agency that
such reduction
shall not reduce the rating assigned to any Class of related
Certificates by
such Rating Agency below the lower of the then-current rating or
the rating
assigned to such Certificates as of the Closing Date by such
Rating Agency and
(ii) provide a copy of such written confirmation to the
Trustee.
Capitalization Reimbursement Amount: As to any Distribution Date
and
Loan Group, the amount of Advances or Servicing Advances that
were added to the
Stated Principal Balance of the Mortgage Loans in such Loan
Group during the
6
<PAGE>
prior calendar month and reimbursed to the Master Servicer or
Subservicer on or
prior to such Distribution Date pursuant to Section
3.10(a)(vii), plus the
related Capitalization Reimbursement Shortfall Amount remaining
unreimbursed
from any prior Distribution Date and reimbursed to the Master
Servicer or
Subservicer on or prior to such Distribution Date.
Capitalization Reimbursement Shortfall Amount: As to any
Distribution
Date and Loan Group, the amount, if any, by which the amount of
Advances or
Servicing Advances that were added to the Stated Principal
Balance of the
Mortgage Loans in such Loan Group during the preceding calendar
month exceeds
the amount of principal payments on the Mortgage Loans included
in the Available
Distribution Amount for that Loan Group and Distribution
Date.
Certificate: Any Class I-A-1, Class I-A-2, Class I-A-3, Class
I-A-4,
Class I-A-5, Class I-A-V, Class I-A-P, Class II-A-1, Class
II-A-V, Class II-A-P,
Class R-I, Class R-II, Class R-III, Class I-M-1, Class I-M-2,
Class I-M-3, Class
II-M-1, Class II-M-2, Class II-M-3, Class I-B-1, Class I-B-2,
Class I-B-3, Class
II-B-1, Class II-B-2 and Class II-B-3 Certificates.
Certificate Account: The separate account or accounts created
and
maintained pursuant to Section 4.01 of the Standard Terms, which
shall be
entitled "Deutsche Bank Trust Company Americas, as trustee, in
trust for the
registered holders of Residential Accredit Loans, Inc., Mortgage
Asset-Backed
Pass-Through Certificates, Series 2004-QS16" and which must be
an Eligible
Account.
Certificate Group: With respect to (i) Loan Group I, the Group I
Senior,
Class I-M, Class I-B-1, Class I-B-2 and Class I-B-3
Certificates; and (ii) Loan
Group II, the Group II Senior, Class II-M, Class II-B-1, Class
II-B-2 and Class
II-B-3 Certificates.
Certificate Policy: None.
Certificate Principal Balance: With respect to each Certificate
(other than
any Interest Only Certificate), on any date of determination, an
amount equal
to:
(i) the Initial Certificate Principal Balance of such
Certificate as
specified on the face thereof, plus
(ii) any Subsequent Recoveries added to the Certificate
Principal
Balance of such Certificate pursuant to Section 4.02, minus
(iii) the sum of (x) the aggregate of all amounts previously
distributed with respect to such Certificate (or any
predecessor
Certificate) and applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.02(a) and (y) the
aggregate
of all reductions in Certificate Principal Balance deemed to
have
occurred in connection with Realized Losses which were
previously
allocated to such Certificate (or any predecessor
Certificate)
pursuant to Section 4.05;
provided, that the Certificate Principal Balance of each
Certificate of the
Class of Subordinate Certificates with the Lowest Priority at
any given time
shall be further reduced by an amount equal to the Percentage
Interest
represented by such Certificate multiplied by the excess, if
any, of (A) the
then aggregate Certificate Principal Balance of all Classes of
Certificates in
the related Certificate Group then outstanding over (B) the then
aggregate
7
<PAGE>
Stated Principal Balance of the Mortgage Loans in the related
Loan Group;
provided, however, that the Certificate Principal Balance of the
Class of
Certificates in the related Certificate Group with the Lowest
Priority shall not
be reduced to the extent of the amount of any Excess Special
Hazard Losses or
Excess Fraud Losses to be covered by Diverted Amounts allocated
from the
non-related Loan Group pursuant to Section 4.05; provided,
further, that, on
each Distribution Date, the Certificate Principal Balance of a
Class of Class B
Certificates shall be reduced by the amount that the
Subordinated Principal
Distribution Amount of such Class has been reduced by Diverted
Amounts on such
Distribution Date.
Class A-P Collection Shortfall: With respect to the Cash
Liquidation or
REO Disposition of a Discount Mortgage Loan, any Distribution
Date and any Loan
Group, the excess of the amount described in clause (C)(1) of
the definition of
Class A-P Principal Distribution Amount for such Loan Group over
the amount
described in clause (C)(2) of such definition.
Class A-P Principal Distribution Amount: With respect to any
Distribution Date and Loan Group, an amount equal to the
aggregate of:
(A) the related Discount Fraction of the principal portion
of
each Monthly Payment on each Discount Mortgage Loan in the
related Loan
Group due during the related Due Period, whether or not received
on or
prior to the related Determination Date, minus the Discount
Fraction of
the principal portion of any related Debt Service Reduction
which
together with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
(B) the related Discount Fraction of the principal portion of
all
unscheduled collections on each Discount Mortgage Loan in the
related
Loan Group received during the preceding calendar month or, in
the case
of Principal Prepayments in Full, during the related Prepayment
Period
(other than amounts received in connection with a Cash
Liquidation or
REO Disposition of a Discount Mortgage Loan described in clause
(C)
below), including Principal Prepayments in Full,
Curtailments,
Subsequent Recoveries and repurchases (including deemed
repurchases
under Section 3.07(b)) of Discount Mortgage Loan in the related
Loan
Group (or, in the case of a substitution of a Deleted Mortgage
Loan in
the related Loan Group, the Discount Fraction of the amount of
any
shortfall deposited in the Custodial Account in connection with
such
substitution);
(C) in connection with the Cash Liquidation or REO Disposition
of
a Discount Mortgage Loan in the related Loan Group that occurred
during
the preceding calendar month (or was deemed to have occurred
during such
period in accordance with Section 3.07(b)) that did not result
in any
Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy
Losses or Extraordinary Losses, an amount equal to the lesser of
(1) the
applicable Discount Fraction of the Stated Principal Balance of
such
Discount Mortgage Loan immediately prior to such Distribution
Date and
(2) the aggregate amount of the collections on such Mortgage
Loan to the
extent applied as recoveries of principal;
8
<PAGE>
(D) any amounts allocable to principal for any previous
Distribution Date (calculated pursuant to clauses (A) through
(C) above)
that remain undistributed; and
(E) the amount of any Class A-P Collection Shortfalls for
such
Distribution Date and Loan Group and the amount of any Class
A-P
Collection Shortfalls for such Loan Group remaining unpaid for
all
previous Distribution Dates, but only to the extent of the
Eligible
Funds for such Distribution Date; minus
(F) the related Discount Fraction of the portion of the
Capitalization Reimbursement Amount for the related Loan Group
for such
Distribution Date, if any, related to each Discount Mortgage
Loan in the
related Loan Group.
Notwithstanding the foregoing, with respect to any Distribution
Date on
and after the Credit Support Depletion Date, the Class A-P
Principal
Distribution Amount for a Loan Group shall equal the excess of
(i) the sum of
(a) the related Discount Fraction of the principal portion of
each Monthly
Payment on each Discount Mortgage Loan in the related Loan Group
received or
advanced prior to the related Determination Date and not
previously distributed
minus the Discount Fraction of the principal portion of any
related Debt Service
Reduction which together with other Bankruptcy Losses exceeds
the Bankruptcy
Amount and (b) the aggregate amount calculated pursuant to
clauses (B) and (C)
above over (ii) the amount calculated pursuant to clause (F)
above.
Class A-P Certificates: The Class I-A-P Certificates and Class
II-A-P
Certificates.
Class A-V Certificates: The Class I-A-V Certificates and Class
II-A-V
Certificates.
Class B Certificates: The Class I-B-1, Class I-B-2, Class I-B-3,
Class
II-B-1, Class II-B-2 and Class II-B-3 Certificates.
Class M Certificates: The Class I-M-1, Class I-M-2, Class I-M-3,
Class
II-M-1, Class II-M-2 and Class II-M-3 Certificates.
Class R Certificate: Any one of the Class R-I, Class R-II and
Class R-III
Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed to the Standard Terms as Exhibit D and evidencing
an interest
designated as a "residual interest" in REMIC I for purposes of
the REMIC
Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates
executed
by the Trustee and authenticated by the Certificate Registrar
substantially in
the form annexed to the Standard Terms as Exhibit D and
evidencing an interest
designated as a "residual interest" in REMIC II for purposes of
the REMIC
Provisions.
Class R-III Certificate: Any one of the Class R-III
Certificates
executed by the Trustee and authenticated by the Certificate
Registrar
substantially in the form annexed to the Standard Terms as
Exhibit D and
evidencing an interest designated as a "residual interest" in
REMIC III for
purposes of the REMIC Provisions.
9
<PAGE>
Class I-A Percentage: As of any Distribution Date, the lesser of
100%
and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Certificate Principal Balance of the Group I Senior
Certificates
(other than the Class I-A-P Certificates) immediately prior to
such Distribution
Date and the denominator of which is the aggregate Stated
Principal Balance of
all of the Mortgage Loans (or related REO Properties) (other
than the related
Discount Fraction of each Discount Mortgage Loan) in Loan Group
I immediately
prior to such Distribution Date.
Class I-M Certificates: The Class I-M-1, Class I-M-2 and Class
I-M-3
Certificates.
Class II-A Percentage: As of any Distribution Date, the lesser
of 100%
and a fraction, expressed as a percentage, the numerator of
which is the
aggregate Certificate Principal Balance of the Group II Senior
Certificates
(other than the Class II-A-P Certificates) immediately prior to
such
Distribution Date and the denominator of which is the aggregate
Stated Principal
Balance of all of the Mortgage Loans (or related REO Properties)
(other than the
related Discount Fraction of each Discount Mortgage Loan) in
Loan Group II
immediately prior to such Distribution Date.
Class II-M Certificates: The Class II-M-1, Class II-M-2 and
Class II-M-3
Certificates.
Closing Date: December 29, 2004.
Compensating Interest: With respect to any Distribution Date and
each
Loan Group, an amount equal to Prepayment Interest Shortfalls
resulting from
Principal Prepayments in Full during the related Prepayment
Period and
Curtailments during the prior calendar month and included in the
Available
Distribution Amount for the such Loan Group on such Distribution
Date, but not
more than the lesser of (a) one-twelfth of 0.125% of the
aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan
Group immediately
preceding such Distribution Date and (b) the sum of the
Servicing Fee and all
income and gain on amounts held in the Custodial Account and the
Certificate
Account and payable to the Certificateholders with respect to
the Mortgage Loans
in the related Loan Group and such Distribution Date; provided
that for purposes
of this definition the amount of the Servicing Fee will not be
reduced pursuant
to Section 7.02(a) except as may be required pursuant to the
last sentence of
such Section.
Corporate Trust Office: The principal office of the Trustee at
which at
any particular time its corporate trust business with respect to
this Agreement
shall be administered, which office at the date of the execution
of this
instrument is located at 1761 East St. Andrew Place, Santa Ana,
California
92705-4934, Attention: Residential Funding Corporation Series
2004-QS16.
Credit Support Depletion Date: With respect to Loan Group I, the
first
Distribution Date on which the Certificate Principal Balances of
the Class I-M,
Class I-B-1, Class I-B-2 and Class I-B-3 Certificates have been
reduced to zero.
With respect to Loan Group II, the first Distribution Date on
which the
Certificate Principal Balances of the Class II-M, Class II-B-1,
Class II-B-2 and
Class II-B-3 Certificates have been reduced to zero.
Credit Repository: Equifax, Transunion and Experian, or their
successors in
interest.
Cut-off Date: December 1, 2004.
10
<PAGE>
Determination Date: With respect to any Distribution Date, the
second
Business Day prior to each Distribution Date.
Discount Net Mortgage Rate: With respect to Loan Group I, 6.00%
per annum.
With respect to Loan Group II, 5.00% per annum.
Diverted Amount: On any Distribution Date on which Excess
Special Hazard
Losses or Excess Fraud Losses from the Affected Loan Group are
allocated to the
Class B Certificates related to the Unaffected Loan Group
pursuant to Section
4.05, or on any subsequent Distribution Date occurring before
such losses are
fully covered by a Diverted Amount, an amount equal to the least
of (a) the
aggregate amount of all Excess Special Hazard Losses or Excess
Fraud Losses from
the Affected Loan Group which occurred prior to the related
Distribution Date,
minus the aggregate amount of Diverted Amounts previously
distributed to the
Certificates related to the Affected Loan Group in respect of
such losses, (b)
the amounts otherwise payable in respect of principal to the
related Class B
Certificates related to the Unaffected Loan Group on such
Distribution Date, and
(c) the excess of (i) the sum of (1) the aggregate of the
Diverted Amounts for
all prior Distribution Dates corresponding to Excess Special
Hazard Losses or
Excess Fraud Losses, as applicable, for the Affected Group and
(2) the aggregate
Special Hazard Losses or Fraud Losses, as applicable, for such
Distribution Date
and all prior Distribution Dates for the Unaffected Loan Group
over (ii) the
Special Hazard Amount or Fraud Loss Amount, as applicable, for
the Unaffected
Loan Group.
Due Period: With respect to each Distribution Date, the calendar
month
in which such Distribution Date occurs.
Eligible Account: An account that is any of the following:
(i)
maintained with a depository institution the debt obligations of
which have been
rated by each Rating Agency in its highest rating available, or
(ii) an account
or accounts in a depository institution in which such accounts
are fully insured
to the limits established by the FDIC, provided that any
deposits not so insured
shall, to the extent acceptable to each Rating Agency, as
evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel
delivered to the
Trustee and each Rating Agency) the registered Holders of
Certificates have a
claim with respect to the funds in such account or a perfected
first security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of
any other
depositors or creditors of the depository institution with which
such account is
maintained, or (iii) in the case of the Custodial Account, a
trust account or
accounts maintained in the corporate trust department of U.S.
Bank, National
Association, or (iv) in the case of the Certificate Account, a
trust account or
accounts maintained in the corporate trust division of the
Trustee, or (v) an
account or accounts of a depository institution acceptable to
each Rating Agency
(as evidenced in writing by each Rating Agency that use of any
such account as
the Custodial Account or the Certificate Account will not reduce
the rating
assigned to any Class of Certificates by such Rating Agency
below the lower of
the then-current rating or the rating assigned to such
Certificates as of the
Closing Date by such Rating Agency).
Eligible Funds: With respect to any Distribution Date and Loan
Group, an
amount equal to the excess of the Available Distribution Amount
for such Loan
Group over the sum of (i) the aggregate amount of Accrued
Certificate Interest
on the related Senior Certificates, (ii) the related Senior
Principal
Distribution Amount (determined without regard to Section
4.02(a)(ii)(Y)(D)
11
<PAGE>
hereof), (iii) the related Class A-P Principal Distribution
Amount (determined
without regard to clause (E) of the definition of Class A-P
Principal
Distribution Amount) and (iv) the aggregate amount of Accrued
Certificate
Interest on the Class I-M, Class I-B-1 and Class I-B-2
Certificates, or the
Class II-M, Class II-B-1 and Class II-B-2 Certificates, as
applicable.
Excess Subordinate Principal Amount: With respect to any
Distribution
Date on which the aggregate Certificate Principal Balance of the
Class of
Subordinate Certificates in the Certificate Group related to a
Loan Group then
outstanding with the Lowest Priority is to be reduced to zero
and on which
Realized Losses are to be allocated to such Class or Classes,
the excess, if
any, of (i) the amount that would otherwise be distributable in
respect of
principal on such class or classes of Certificates on such
Distribution Date
over (ii) the excess, if any, of the aggregate Certificate
Principal Balance of
such Class or Classes of Certificates immediately prior to such
Distribution
Date over the aggregate amount of Realized Losses to be
allocated to such
Classes of Certificates on such Distribution Date as reduced by
any amount
calculated pursuant to clause (E) of the definition of Class A-P
Principal
Distribution Amount.
Fraud Loss Amount: With respect to each Loan Group as of any
date of
determination after the Cut-off Date, an amount equal to: (X)
prior to the first
anniversary of the Cut-off Date an amount equal to 3.00% (in the
case of Group I
Loans) or 2.25% (in the case of Group II Loans) of the aggregate
outstanding
principal balance of the Mortgage Loans in the related Loan
Group as of the
Cut-off Date minus the aggregate amount of Fraud Losses
allocated solely to one
or more specific Classes of related Certificates in accordance
with Section 4.05
of this Series Supplement since the Cut-off Date up to such date
of
determination, (Y) from the first to, but not including, the
second anniversary
12
<PAGE>
of the Cut-off Date, an amount equal to (1) the lesser of (a)
the Fraud Loss
Amount for such Loan Group as of the most recent anniversary of
the Cut-off Date
and (b) 2.00% (in the case of Group I Loans) or 1.50% (in the
case of Group II
Loans) of the aggregate outstanding principal balance of all of
the Mortgage
Loans in the related Loan Group as of the most recent
anniversary of the Cut-off
Date minus (2) the aggregate amount of Fraud Losses allocated
solely to one or
more specific Classes of related Certificates in accordance with
Section 4.05
since the most recent anniversary of the Cut-off Date up to such
date of
determination, and (Z) from the second to, but not including,
the fifth
anniversary of the Cut-off Date, an amount equal to (1) the
lesser of (a) the
Fraud Loss Amount for the related Loan Group as of the most
recent anniversary
of the Cut-off Date and (b) 1.00% of the aggregate outstanding
principal balance
of all of the Mortgage Loans in the related Loan Group as of the
most recent
anniversary of the Cut-off Date minus (2) the aggregate amount
of Fraud Losses
for the related Loan Group allocated solely to one or more
specific Classes of
Certificates in accordance with Section 4.05 since the most
recent anniversary
of the Cut-off Date up to such date of determination. On and
after the fifth
anniversary of the Cut-off Date, the Fraud Loss Amount for such
Loan Group shall
be zero.
The Fraud Loss Amount for a Loan Group may be further reduced by
the
Master Servicer (including accelerating the manner in which such
coverage is
reduced) provided that prior to any such reduction, the Master
Servicer shall
(i) obtain written confirmation from each Rating Agency that
such reduction
shall not reduce the rating assigned to any Class of related
Certificates by
such Rating Agency below the lower of the then-current rating or
the rating
assigned to such Certificates as of the Closing Date by such
Rating Agency and
(ii) provide a copy of such written confirmation to the
Trustee.
Group I Loans: The Mortgage Loans designated on the Mortgage
Loan
Schedule as Group I Loans.
Group II Loans: The Mortgage Loans designated on the Mortgage
Loan
Schedule as Group II Loans.
Group I Senior Certificates: The Class I-A-1, Class I-A-2, Class
I-A-3,
Class I-A-4, Class I-A-5, Class I-A-V, Class I-A-P, Class R-I
and Class R-III
Certificates.
Group II Senior Certificates: The Class II-A-1, Class II-A-V,
Class
II-A-P and Class R-II Certificates.
Highest Priority: As of any date of determination, the Class of
related
Subordinate Certificates then outstanding with a Certificate
Principal Balance
greater than zero, with the earliest priority for payments
pursuant to Section
4.02(a), in the following order: (a) for the Subordinate
Certificates related to
Loan Group I, Class I-M-1, Class I-M-2, Class I-M-3, Class
I-B-1, Class I-B-2
and Class I-B-3 Certificates and (b) for the Subordinate
Certificates related to
Loan Group II, Class II-M-1, Class II-M-2, Class II-M-3, Class
II-B-1, Class
II-B-2 and Class II-B-3 Certificates.
Initial Monthly Payment Fund: $56,158.34, representing
scheduled
principal amortization and interest at the Net Mortgage Rate
payable during the
January 2005 Due Period, for those Mortgage Loans for which the
Trustee will not
be entitled to receive such payment.
Initial Notional Amount: With respect to the Class I-A-V
Certificates,
the aggregate Cut-off Date Principal Balance of the Group I
Loans; with respect
to the Class II-A-V Certificates, the aggregate Cut-off Date
Principal Balance
of the Group II Loans; and with respect to the Class I-A-4
Certificates, an
amount equal to the aggregate Certificate Principal Balance of
the Class I-A-1,
Class I-A-2, Class I-A-3 and Class I-A-5 Certificates as of the
Cut-Off Date.
With respect to any Subclass issued pursuant to Section 5.01(c),
the aggregate
Stated Principal Balance of the Mortgage Loans corresponding to
such Subclass as
of the Cut-Off Date.
Initial Subordinate Class Percentage: With respect to each Class
of
related Subordinate Certificates, an amount which is equal to
the initial
aggregate Certificate Principal Balance of such related Class of
Subordinate
Certificates divided by the aggregate Stated Principal Balance
of all the
Mortgage Loans in the related Loan Group as of the Cut-off Date
as follows:
Class I-M-1: 2.25% Class I-B-1: 0.50%
Class I-M-2: 0.90% Class I-B-2: 0.30%
Class I-M-3: 0.50% Class I-B-3: 0.45%
Class II-M-1: 2.40% Class II-B-1: 0.15%
Class II-M-2: 0.20% Class II-B-2: 0.10%
Class II-M-3: 0.30% Class II-B-3: 0.15%
13
<PAGE>
Interest Accrual Period: With respect to any Class of
Certificates and
any Distribution Date, the calendar month preceding the month in
which such
Distribution Date occurs.
Interest Only Certificates: Any one of the Class I-A-V, Class
II-A-V and
Class I-A-4 Certificates. The Interest Only Certificates will
have no
Certificate Principal Balance.
Loan Group: Any of Loan Group I or Loan Group II.
Loan Group I: The group of Mortgage Loans comprised of the Group
I Loans.
Loan Group II: The group of Mortgage Loans comprised of the
Group II Loans.
Lockout Certificates: The Class A-5 Certificates.
Lockout Percentage: For any Distribution Date occurring prior to
the
Distribution Date in January 2010, 0%, and for any Distribution
Date thereafter,
as follows: 30% for any Distribution Date on or after January
2010 and prior to
January 2011; 40% for any Distribution Date on or after January
2011 and prior
to January 2012; 60% for any Distribution Date on or after
January 2012 and
prior to January 2013; 80% for any Distribution Date on or after
January 2013
and prior to January 2014; and 100% for any Distribution Date
thereafter.
Lower Priority: As of any date of determination and any Class
of
Subordinate Certificates, any other Class of related Subordinate
Certificates
then outstanding with a later priority for payments pursuant to
Section 4.02
(a).
Lowest Priority: As of any date of determination, the Class of
related
Subordinate Certificates then outstanding with a Certificate
Principal Balance
greater than zero, with the latest priority for payments
pursuant to Section
4.02(a), in the following order: (a) for the Subordinate
Certificates related to
Loan Group I, Class I-B-3, Class I-B-2, Class I-B-1, Class
I-M-3, Class I-M-2
and Class I-M-1 Certificates and (b) for the Subordinate
Certificates related to
Loan Group II, Class II-B-3, Class II-B-2, Class II-B-1, Class
II-M-3, Class
II-M-2 and Class II-M-1 Certificates .
Maturity Date: With respect to Certificates in the Certificate
Group
related to Loan Group I, December 25, 2034, the Distribution
Date immediately
following the latest scheduled maturity date of any Mortgage
Loan in Loan Group
I. With respect to Certificates in the Certificate Group related
to Loan Group
II, December 25, 2019, the Distribution Date immediately
following the latest
scheduled maturity date of any Mortgage Loan in Loan Group
II.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans
attached
hereto as Exhibit One-I (with respect to Loan Group I) and
Exhibit One-II (with
respect to Loan Group II) (in each case, as amended from time to
time to reflect
the addition of Qualified Substitute Mortgage Loans), which list
or lists shall
set forth the following information as to each Mortgage Loan in
the related Loan
Group:
(i) the Mortgage Loan identifying number ("RFC LOAN #");
14
<PAGE>
(ii) the maturity of the Mortgage Note ("MATURITY DATE");
(iii) the Mortgage Rate ("ORIG RATE");
(iv) the Subservicer pass-through rate ("CURR NET");
(v) the Net Mortgage Rate ("NET MTG RT");
(vi) the Pool Strip Rate ("STRIP");
(vii) the initial scheduled monthly payment of principal, if
any,
and interest ("ORIGINAL P & I");
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) the rate at which the Subservicing Fee accrues ("SUBSERV
FEE")
and at which the Servicing Fee accrues ("MSTR SERV FEE");
(xi) a code "T," "BT" or "CT" under the column "LN FEATURE,"
indicating that the Mortgage Loan is secured by a second or
vacation residence; and
(xii) a code "N" under the column "OCCP CODE," indicating that
the
Mortgage Loan is secured by a non-owner occupied residence.
Such schedule may consist of multiple reports that collectively
set forth all of
the information required.
Notional Amount: As of any Distribution Date, (i) with respect
to the
Class I-A-4 Certificates, an amount equal to the aggregate
Certificate Principal
Balance of the Class I-A-1, Class I-A-2, Class I-A-3 and Class
I-A-5
Certificates immediately prior to the related Distribution Date
divided by 12;
(ii) with respect to any Class I-A-V Certificates or Subclass
thereof issued
pursuant to Section 5.01(c), the aggregate Stated Principal
Balance of the Group
I Loans corresponding to the Uncertificated Class A-V REMIC
Regular Interests
represented by such Class or Subclass immediately prior to such
date; and (iii)
with respect to any Class II-A-V Certificates or Subclass
thereof issued
pursuant to Section 5.01(c), the aggregate Stated Principal
Balance of the Group
II Loans corresponding to the Uncertificated Class A-V REMIC
Regular Interests
represented by such Class or Subclass immediately prior to such
date.
Pass-Through Rate: With respect to the Senior Certificates
(other than
the Class A-V Certificates and Class A-P Certificates), Class M
Certificates and
Class B Certificates and any Distribution Date, the per annum
rates set forth in
the Preliminary Statement hereto.
With respect to each Class of Class A-V Certificates (other than
any
Subclass thereof) and any Distribution Date, a rate equal to the
weighted
average, expressed as a percentage, of the Pool Strip Rates of
all Mortgage
Loans in the related Loan Group as of the Due Date in the
related Due Period,
15
<PAGE>
weighted on the basis of the respective Stated Principal
Balances of such
Mortgage Loans as of the day immediately preceding such
Distribution Date (or,
with respect to the initial Distribution Date, at the close of
business on the
Cut-off Date). With respect to the Class I-A-V Certificates and
the Class II-A-V
Certificates and the initial Distribution Date the Pass-Through
Rate is equal to
0.1672% and 0.4884% per annum, respectively. With respect to any
Subclass of
Class A-V Certificates and any Distribution Date, a rate equal
to the weighted
average, expressed as a percentage, of the Pool Strip Rates of
all Mortgage
Loans in the related Loan Group corresponding to the
Uncertificated Class A-V
REMIC Regular Interests represented by such Subclass as of the
Due Date in the
related Due Period, weighted on the basis of the respective
Stated Principal
Balances of such Mortgage Loans as of the day immediately
preceding such
Distribution Date (or with respect to the initial Distribution
Date, at the
close of business on the Cut-off Date). The Class A-P
Certificates have no
Pass-Through Rate and are not entitled to Accrued Certificate
Interest.
Pool Strip Rate: With respect to each Mortgage Loan in any Loan
Group, a
per annum rate equal to the excess of (a) the Net Mortgage Rate
of such Mortgage
Loan over (b) the Discount Net Mortgage Rate for such Loan Group
(but not less
than 0.00%) per annum.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to timely payment of
principal and
interest by the United States or any agency or instrumentality
thereof
when such obligations are backed by the full faith and credit of
the
United States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing
not more than one month from the date of acquisition thereof,
provided
that the unsecured short-term debt obligations of the party
agreeing to
repurchase such obligations are at the time rated by each Rating
Agency
in its highest short-term rating available;
(iii)federal funds, certificates of deposit, demand deposits,
time deposits and
bankers' acceptances (which shall each have an original maturity
of not
more than 90 days and, in the case of bankers' acceptances,
shall in no
event have an original maturity of more than 365 days or a
remaining
maturity of more than 30 days) denominated in United States
dollars of any
U.S. depository institution or trust company incorporated under
the laws of
the United States or any state thereof or of any domestic branch
of a
foreign depository institution or trust company; provided that
the
short-term debt obligations of such depository institution or
trust company
(or, if the only Rating Agency is Standard & Poor's, in the
case of the
principal depository institution in a depository institution
holding
company, debt obligations of the depository institution holding
company) at
the date of acquisition thereof have been rated by each Rating
Agency in
its highest short-term rating available; and provided further
that, if the
only Rating Agency is Standard & Poor's and if the
depository or trust
company is a principal subsidiary of a bank holding company and
the debt
obligations of such subsidiary are not separately rated, the
applicable
rating shall be that of the bank holding company; and, provided
further
that, if the original maturity of such short-term debt
obligations of a
domestic branch of a foreign depository institution or trust
company shall
exceed 30 days, the short-term rating of such institution shall
be A-1+ in
the case of Standard & Poor's if Standard & Poor's is
the Rating Agency;
16
<PAGE>
(iv) commercial paper and demand notes (having original
maturities of not
more than 365 days) of any corporation incorporated under the
laws of
the United States or any state thereof which on the date of
acquisition
has been rated by each Rating Agency in its highest short-term
rating
available; provided that such commercial paper shall have a
remaining
maturity of not more than 30 days;
(v) any mutual fund, money market fund, common trust fund or
other pooled
investment vehicle, the assets of which are limited to
instruments that
otherwise would constitute Permitted Investments hereunder and
have been
rated by each Rating Agency in its highest short-term rating
available
(in the case of Standard & Poor's such rating shall be
either AAAm or
AAAm-G), including any such fund that is managed by the Trustee
or any
affiliate of the Trustee or for which the Trustee or any of
its
affiliates acts as an adviser; and
(vi) other obligations or securities that are acceptable to each
Rating
Agency as a Permitted Investment hereunder and will not reduce
the
rating assigned to any Class of Certificates by such Rating
Agency
(without giving effect to any Certificate Policy (as defined in
the
Series Supplement) in the case of Insured Certificates (as
defined in
the Series Supplement) below the lower of the then-current
rating or the
rating assigned to such Certificates as of the Closing Date by
such
Rating Agency, as evidenced in writing;
provided, however, no instrument shall be a Permitted Investment
if it
represents, either (1) the right to receive only interest
payments with respect
to the underlying debt instrument or (2) the right to receive
both principal and
interest payments derived from obligations underlying such
instrument and the
principal and interest payments with respect to such instrument
provide a yield
to maturity greater than 120% of the yield to maturity at par of
such underlying
obligations. References herein to the highest rating available
on unsecured
long-term rating category available shall mean AAA in the case
of Standard &
Poor's and Fitch and Aaa in the case of Moody's, and references
herein to the
highest rating available on unsecured commercial paper and
short-term rating
category available obligations shall mean A-1 in the case of
Standard & Poor's,
P-1 in the case of Moody's and either A-+ by Standard &
Poor's, P-1 by Moody's
or F-1 by Fitch in the case of Fitch; provided, further, that
any Permitted
Investment that is a short-term debt obligation rated A-1 by
Standard & Poor's
must satisfy the following additional conditions: (i) the total
amount of debt
from A-1 issuers must be limited to the investment of monthly
principal and
interest payments (assuming fully amortizing collateral); (ii)
the total amount
of A-1 investments must not represent more than 20% of the
aggregate outstanding
Certificate Principal Balance of the Certificates and each
investment must not
mature beyond 30 days; (iii) the terms of the debt must have a
predetermined
fixed dollar amount of principal due at maturity that cannot
vary; and (iv) if
the investments may be liquidated prior to their maturity or are
being relied on
to meet a certain yield, interest must be tied to a single
interest rate index
plus a single fixed spread (if any) and must move
proportionately with that
index.
Prepayment Assumption: With respect to Loan Group I, the
prepayment
assumption to be used for determining the accrual of original
issue discount and
premium and market discount on the related Certificates for
federal income tax
purposes, which assumes a constant prepayment rate of 10.0% per
annum of the
then outstanding principal balance of the Group I Loans in the
first month of
the life of such Group I Loans and an additional approximately
0.909090909% per
annum in each month thereafter until the twelfth month, and
beginning in the
twelfth month and in each month thereafter during the life of
the Group I Loans,
a constant prepayment rate of 20.0% per annum. With respect to
Loan Group II,
the prepayment assumption to be used for determining the accrual
of original
17
<PAGE>
issue discount and premium and market discount on the related
Certificates for
federal income tax purposes, which assumes a constant prepayment
rate of 8.0%
per annum of the then outstanding principal balance of the Group
II Loans in the
first month of the life of such Group II Loans and an additional
approximately
0.909090909% per annum in each month thereafter until the
twelfth month, and
beginning in the twelfth month and in each month thereafter
during the life of
the Group II Mortgage Loans, a constant prepayment rate of 18.0%
per annum.
Prepayment Distribution Percentage: With respect to any
Distribution
Date and each Class of Subordinate Certificates in the
Certificate Group for
each Loan Group, under the applicable circumstances set forth
below, the
respective percentages set forth below:
(i) For any Distribution Date prior to the Distribution Date
in
January 2010 (unless the Certificate Principal Balances of
the
related Senior Certificates (other than the related Class
A-P
Certificates), have been reduced to zero), 0%.
(ii) For any Distribution Date not discussed in clause (i) above
on
which any Class of related Subordinate Certificates are
outstanding:
(a) in the case of the Class of related Subordinate
Certificates then outstanding with the Highest Priority and
each
other Class of Subordinate Certificates for which the
related
Prepayment Distribution Trigger has been satisfied, a
fraction,
expressed as a percentage, the numerator of which is the
Certificate Principal Balance of such Class immediately prior
to
such date and the denominator of which is the sum of the
Certificate Principal Balances immediately prior to such date
of
(1) the Class of related Subordinate Certificates then
outstanding with the Highest Priority and (2) all other
Classes
of related Subordinate Certificates for which the respective
Prepayment Distribution Triggers have been satisfied; and
(b) in the case of each other Class of related Subordinate
Certificates for which the Prepayment Distribution Triggers
have
not been satisfied, 0%; and
(iii)Notwithstanding the foregoing, if the application of the
foregoing
percentages on any Distribution Date as provided in Section 4.02
of this
Series Supplement (determined without regard to the proviso to
the
definition of "Subordinate Principal Distribution Amount") would
result in
a distribution in respect of principal of any Class or Classes
of
Subordinate Certificates in an amount greater than the
remaining
Certificate Principal Balance thereof (any such class, a
"Maturing Class"),
then: (a) the Prepayment Distribution Percentage of each
Maturing Class
shall be reduced to a level that, when applied as described
above, would
exactly reduce the Certificate Principal Balance of such Class
to zero; (b)
the Prepayment Distribution Percentage of each other Class of
Subordinate
Certificates (any such Class, a "Non-Maturing Class") shall be
recalculated
in accordance with the provisions in paragraph (ii) above, as if
the
Certificate Principal Balance of each Maturing Class had been
reduced to
zero (such percentage as recalculated, the "Recalculated
Percentage"); (c)
the total amount of the reductions in the Prepayment
Distribution
Percentages of the Maturing Class or Classes pursuant to clause
(a) of this
sentence, expressed as an aggregate percentage, shall be
allocated among
the Non-Maturing Classes in proportion to their respective
Recalculated
Percentages (the portion of such aggregate reduction so
allocated to any
Non-Maturing Class, the "Adjustment Percentage"); and (d) for
purposes of
such Distribution Date, the Prepayment Distribution Percentage
of each
18
<PAGE>
Non-Maturing Class shall be equal to the sum of (1) the
Prepayment
Distribution Percentage thereof, calculated in accordance with
the
provisions in paragraph (ii) above as if the Certificate
Principal Balance
of each Maturing Class had not been reduced to zero, plus (2)
the related
Adjustment Percentage.
Prepayment Distribution Trigger: With respect to any
Distribution Date
and any Class of related Subordinate Certificates (other than
the Class I-M-1
Certificates and the Class II-M-1 Certificates), a test that
shall be satisfied
if the fraction (expressed as a percentage) equal to the sum of
the Certificate
Principal Balances of such Class and each Class of related
Subordinate
Certificates with a Lower Priority than such Class immediately
prior to such
Distribution Date divided by the aggregate Stated Principal
Balance of all of
the Mortgage Loans (or related REO Properties) in the related
Loan Group
immediately prior to such Distribution Date is greater than or
equal to the sum
of the related Initial Subordinate Class Percentages of such
Classes of related
Subordinate Certificates.
Principal Only Certificates: Any one of the Class A-P
Certificates.
Record Date: With respect to each Distribution Date and each
Class of
Certificates, the close of business on the last Business Day of
the month
preceding the month in which the related Distribution Date
occurs.
Related Classes: As to any Uncertificated REMIC I Regular
Interest,
those classes of Certificates identified as "Related Classes of
Certificates" to
such Uncertificated REMIC I Regular Interest in the definition
of Uncertificated
REMIC I Regular Interest. As to any Uncertificated REMIC II
Regular Interest,
those classes of Certificates identified as "Related Classes of
Certificates" to
such Uncertificated REMIC II Regular Interest in the definition
of
Uncertificated REMIC II Regular Interest.
REMIC I: The segregated pool of assets, with respect to which a
REMIC
election is to be made, consisting of:
(i) the Group I Loans and the related Mortgage Files,
(ii) all payments and collections in respect of the Group I
Loans due after the Cut-off Date (other than Monthly
Payments due in the month of the Cut-off Date) as shall be
on deposit in the Custodial Account or in the Certificate
Account and identified as belonging to the Trust Fund,
including the proceeds from the liquidation of Additional
Collateral for any Additional Collateral Loan, but not
including amounts on deposit in the Initial Monthly
Payment Fund,
19
<PAGE>
(iii) property which secured a Group I Loan and which has
been
acquired for the benefit of the Certificateholders by
foreclosure or deed in lieu of foreclosure,
(iv) the hazard insurance policies and Primary Insurance
Policies, if any, the Pledged Assets with respect to each
Pledged Asset Mortgage Loan, and the interest in the
Surety Bond transferred to the Trustee pursuant to Section
2.01 herein, in each case related to Group I Loans, and
(v) all proceeds of clauses (i) through (iv) above.
REMIC I Certificates: The Class R-I Certificates.
REMIC II: The segregated pool of assets, with respect to which a
REMIC
election is to be made, consisting of: (i) the Group II Loans
and the related
Mortgage Files,
(ii) all payments and collections in respect of the Group II
Loans due after the Cut-off Date (other than Monthly
Payments due in the month of the Cut-off Date) as shall be
on deposit in the Custodial Account or in the Certificate
Account and identified as belonging to the Trust Fund,
including the proceeds from the liquidation of Additional
Collateral for any Additional Collateral Loan, but not
including amounts on deposit in the Initial Monthly
Payment Fund,
(iii) property which secured a Group II Loan and which has
been
acquired for the benefit of the Certificateholders by
foreclosure or deed in lieu of foreclosure,
(iv) the hazard insurance policies and Primary Insurance
Policies, if any, the Pledged Assets with respect to each
Pledged Asset Mortgage Loan, and the interest in the
Surety Bond transferred to the Trustee pursuant to Section
2.01 herein, in each case related to Group II Loans, and
(v) all proceeds of clauses (i) through (iv) above.
REMIC II Certificates: The Class R-II Certificates.
REMIC III: The segregated pool of assets consisting of the
Uncertificated REMIC I Regular Interests and the Uncertificated
REMIC II Regular
Interests conveyed in trust to the Trustee for the benefit of
the holders of
each Class of Certificates (other than the Class R-I
Certificates and the Class
R-II Certificates) pursuant to Section 2.06, with respect to
which a separate
REMIC election is to be made.
20
<PAGE>
REMIC III Certificates: Any Class of Certificates (other than
the Class
R-I Certificates and the Class R-II Certificates).
Senior Accelerated Distribution Percentage: With respect to
any
Distribution Date occurring on or prior to the 60th Distribution
Date and any
Loan Group, 100%. With respect to any Distribution Date
thereafter and such Loan
Group, if applicable, as follows:
(i) for any Distribution Date after the 60th Distribution Date
but on or
prior to the 72nd Distribution Date, the related Senior
Percentage for
such Distribution Date plus 70% of the related Subordinate
Percentage
for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date
but on or
prior to the 84th Distribution Date, the related Senior
Percentage for
such Distribution Date plus 60% of the related Subordinate
Percentage
for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date
but on or
prior to the 96th Distribution Date, the related Senior
Percentage for
such Distribution Date plus 40% of the related Subordinate
Percentage
for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date
but on or
prior to the 108th Distribution Date, the related Senior
Percentage for
such Distribution Date plus 20% of the related Subordinate
Percentage
for such Distribution Date; and
(v) for any Distribution Date thereafter, the related Senior
Percentage for
such Distribution Date;
provided, however,
(i) that any scheduled reduction to the Senior Accelerated
Distribution
Percentage described above shall not occur as of any
Distribution Date unless
either:
(a)(1)(X) the outstanding principal balance of the Mortgage
Loans
in the related Loan Group delinquent 60 days or more (including
Mortgage
Loans which are in foreclosure, have been foreclosed or
otherwise
liquidated, or with respect to which the Mortgagor is in
bankruptcy and
any REO Property) averaged over the last six months, as a
percentage of
the aggregate outstanding Certificate Principal Balance of the
related
Subordinate Certificates, is less than 50% or (Y) the
outstanding
principal balance of Mortgage Loans in the related Loan Group
delinquent
60 days or more (including Mortgage Loans which are in
foreclosure, have
been foreclosed or otherwise liquidated, or with respect to
which the
Mortgagor is in bankruptcy and any REO Property) averaged over
the last
six months, as a percentage of the aggregate outstanding
principal
balance of all Mortgage Loans in the related Loan Group averaged
over
the last six months, does not exceed 2% and (2) Realized Losses
on the
Mortgage Loans in the related Loan Group to date for such
Distribution
Date if occurring during the sixth, seventh, eighth, ninth or
tenth year
(or any year thereafter) after the Closing Date are less than
30%, 35%,
40%, 45% or 50%, respectively, of the sum of the Initial
Certificate
Principal Balances of the related Subordinate Certificates;
or
21
<PAGE>
(b)(1) the outstanding principal balance of Mortgage Loans
in
the related Loan Group delinquent 60 days or more (including
Mortgage
Loans which are in foreclosure, have been foreclosed or
otherwise
liquidated, or with respect to which the Mortgagor is in
bankruptcy and
any REO Property) averaged over the last six months, as a
percentage of
the aggregate outstanding principal balance of all Mortgage
Loans in the
related Loan Group averaged over the last six months, does not
exceed 4%
and (2) Realized Losses on the Mortgage Loans in the related
Loan Group
to date for such Distribution Date, if occurring during the
sixth,
seventh, eighth, ninth or tenth year (or any year thereafter)
after the
Closing Date are less than 10%, 15%, 20%, 25% or 30%,
respectively, of
the sum of the Initial Certificate Principal Balances of the
related
Subordinate Certificates; and
(ii) that for any Distribution Date on which the related
Senior
Percentage is greater than the related Senior Percentage as of
the Closing Date,
the Senior Accelerated Distribution Percentage for such
Distribution Date shall
be 100%.
Notwithstanding the foregoing, upon the reduction of the
Certificate
Principal Balances of the related Senior Certificates (other
than the related
Class A-P Certificates, if any) to zero, the related Senior
Accelerated
Distribution Percentage shall thereafter be 0%.
Senior Certificate: Any one of the Group I Senior Certificates
or Group
II Senior Certificates, executed by the Trustee and
authenticated by the
Certificate Registrar substantially in the form annexed to the
Standard Terms as
Exhibit A and Exhibit D.
Senior Percentage: The Class I-A Percentage or Class II-A
Percentage, as
applicable.
Senior Principal Distribution Amount: With respect to any
Distribution
Date and Loan Group, the lesser of (a) the balance of the
related Available
Distribution Amount remaining after the distribution of all
amounts required to
be distributed therefrom pursuant to Section 4.02(a)(i) and
Section
4.02(a)(ii)(X) (excluding any amount distributable pursuant to
clause (E) of the
definition of "Class A-P Principal Distribution Amount"), and
(b) the sum of the
amounts required to be distributed to the Senior
Certificateholders of the
related Certificate Group on such Distribution Date pursuant to
Sections
4.02(a)(ii)(Y) and 4.02(a)(xvi).
Special Hazard Amount: As of any Distribution Date and Loan
Group, an
amount equal to (a) with respect to Loan Group I, $4,307,088 and
(b) with
respect to Loan Group II, 1,775,576, in each case minus the sum
of (i) the
aggregate amount of Special Hazard Losses allocated solely to
one or more
specific Classes of Certificates in the related Certificate
Group in accordance
with Section 4.05 of this Series Supplement and (ii) the
Adjustment Amount (as
defined below) as most recently calculated. For each anniversary
of the Cut-off
Date, the Adjustment Amount shall be equal to the amount, if
any, by which the
amount calculated in accordance with the preceding sentence
(without giving
effect to the deduction of the Adjustment Amount for such
anniversary) exceeds
the greater of (A) the greater of (i) the product of the related
Special Hazard
Percentage for such anniversary multiplied by the outstanding
principal balance
of all the Mortgage Loans in the related Loan Group on the
Distribution Date
immediately preceding such anniversary and (ii) twice the
outstanding principal
balance of the Mortgage Loan in the related Loan Group with the
largest
outstanding principal balance as of the Distribution Date
immediately preceding
such anniversary and (B) the greater of (i) the product of 0.50%
multiplied by
the outstanding principal balance of all Mortgage Loans in the
related Loan
Group on the Distribution Date immediately preceding such
anniversary multiplied
by a fraction, the numerator of which is equal to the aggregate
outstanding
22
<PAGE>
principal balance (as of the immediately preceding Distribution
Date) of all of
the Mortgage Loans in the related Loan Group secured by
Mortgaged Properties
located in the State of California divided by the aggregate
outstanding
principal balance (as of the immediately preceding Distribution
Date) of all of
the Mortgage Loans in the related Loan Group, expressed as a
percentage, and the
denominator of which is equal to 16.18%, in the case of Loan
Group I and 18.61%,
in the case of Loan Group II (which percentages are equal to the
respective
percentages of Mortgage Loans in the related Loan Group by
aggregate principal
balance initially secured by Mortgaged Properties located in the
State of
California) and (ii) the aggregate outstanding principal balance
(as of the
immediately preceding Distribution Date) of the largest Mortgage
Loan in the
related Loan Group secured by a Mortgaged Property (or, with
respect to a
Cooperative Loan, the related Cooperative Apartment) located in
the State of
California.
The related Special Hazard Amount may be further reduced by the
Master
Servicer (including accelerating the manner in which coverage is
reduced)
provided that prior to any such reduction, the Master Servicer
shall (i) obtain
written confirmation from each Rating Agency that such reduction
shall not
reduce the rating assigned to any Class of related Certificates
by such Rating
Agency below the lower of the then-current rating or the rating
assigned to such
Certificates as of the Closing Date by such Rating Agency and
(ii) provide a
copy of such written confirmation to the Trustee.
Special Hazard Percentage: With respect to each Loan Group as of
each
anniversary of the Cut-off Date, the greater of (i) 1.0% and
(ii) the largest
percentage obtained by dividing the aggregate outstanding
principal balance (as
of immediately preceding Distribution Date) of the Mortgage
Loans in the related
Loan Group secured by Mortgaged Properties located in a single,
five-digit zip
code area in the State of California by the outstanding
principal balance of all
the Mortgage Loans in the related Loan Group as of the
immediately preceding
Distribution Date.
Subordinate Certificate: With respect to Loan Group I, any one
of the
Class I-M Certificates or Class I-B-1, Class I-B-2 and Class
I-B-3 Certificates,
executed by the Trustee and authenticated by the Certificate
Registrar
substantially in the form annexed hereto as Exhibit B and
Exhibit C,
respectively. With respect to Loan Group II, any one of the
Class II-M
Certificates or Class II-B-1, Class II-B-2 and Class II-B-3
Certificates,
executed by the Trustee and authenticated by the Certificate
Registrar
substantially in the form annexed hereto as Exhibit B and
Exhibit C,
respectively.
Subordinate Class Percentage: With respect to any Distribution
Date and
any Class of Subordinate Certificates, a fraction, expressed as
a percentage,
the numerator of which is the aggregate Certificate Principal
Balance of such
Class of Subordinate Certificates immediately prior to such date
and the
denominator of which is the aggregate Stated Principal Balance
of all of the
Mortgage Loans in the related Loan Group (or related REO
Properties) (other than
the related Discount Fraction of each related Discount Mortgage
Loan)
immediately prior to such Distribution Date.
23
<PAGE>
Subordinate Percentage: With respect to either Loan Group, as of
any
date of determination a percentage equal to 100% minus the
related Senior
Percentage as of that date.
Subordinate Principal Distribution Amount: With respect to
any
Distribution Date and Loan Group and each Class of related
Subordinate
Certificates, (a) the sum of the following: (i) such Class's pro
rata share,
based on the Certificate Principal Balance of each Class of
related Subordinate
Certificates then outstanding, of the aggregate of the amounts
calculated
(without giving effect to the related Senior Percentages) for
such Distribution
Date for the related Loan Group under clauses (1), (2) and (3)
of Section
4.02(a)(ii)(Y)(A) to the extent not payable to the related
Senior Certificates;
(ii) such Class's pro rata share, based on the Certificate
Principal Balance of
each Class of related Subordinate Certificates then outstanding,
of the
principal collections described in Section 4.02(a)(ii)(Y)(B)(b)
for the related
Loan Group (without giving effect to the related Senior
Accelerated Distribution
Percentages) to the extent such collections are not otherwise
distributed to the
related Senior Certificates; (iii) the product of (x) the
related Prepayment
Distribution Percentage and (y) the aggregate of all Principal
Prepayments in
Full received in the related Prepayment Period and Curtailments
received in the
preceding calendar month for the related Loan Group (other than
the related
Discount Fraction of such Principal Prepayments in Full and
Curtailments with
respect to a related Discount Mortgage Loan) to the extent not
payable to the
related Senior Certificates; (iv) if such Class is the Class of
related
Subordinate Certificates with the Highest Priority, any related
Excess
Subordinate Principal Amount for the related Loan Group for such
Distribution
Date not paid to the related Senior Certificates; and (v) any
amounts described
in clauses (i), (ii) and (iii) as determined for any previous
Distribution Date,
that remain undistributed to the extent that such amounts are
not attributable
to Realized Losses which have been allocated to a Class of
related Subordinate
Certificates minus (b) the sum of (i) with respect to the Class
of Subordinate
Certificates with the Lowest Priority, any related Excess
Subordinate Principal
Amount for such Distribution Date; and (ii) the related
Capitalization
Reimbursement Amount for such Loan Group and Distribution Date,
other than the
related Discount Fraction of any portion of that amount related
to each related
Discount Mortgage Loan in the related Loan Group, multiplied by
a fraction, the
numerator of which is the Subordinate Principal Distribution
Amount for such
Class of related Subordinate Certificates, without giving effect
to this clause
(b)(ii), and the denominator of which is the sum of the
principal distribution
amounts for all Classes of Certificates in the related
Certificate Group (other
than the Class A-P Certificates), without giving effect to any
reductions for
the Capitalization Reimbursement Amount. In addition to the
foregoing, the
aggregate Subordinate Principal Distribution Amount of the Class
B Certificates
of a Certificate Group will be reduced by any Diverted Amount
required to be
paid to the Certificates of the other Certificate Group on the
Distribution Date
such Diverted Amount is required to be paid. Such Diverted
Amount will be
applied to (i) first reduce the Subordinate Principal
Distribution Amount
otherwise payable to the holders of the Class I-B-3 Certificates
or the Class
II-B-3 Certificates, as applicable, (ii) second to reduce the
Subordinate
Principal Distribution Amount otherwise payable to the holders
of the Class
I-B-2 Certificates or the Class II-B-2 Certificates, as
applicable, and (iii)
third to reduce the Subordinate Principal Distribution Amount
payable to the
holders of the Class I-B-1 Certificates or the Class II-B-1
Certificates, as
applicable.
Unaffected Loan Group: As to any Affected Loan Group, the other
Loan Group.
24
<PAGE>
Uncertificated Accrued Interest: With respect to each
Distribution Date,
(i) as to each Uncertificated REMIC I Regular Interest other
than each
Uncertificated REMIC I Regular Interest Z, an amount equal to
the aggregate
amount of Accrued Certificate Interest that would result under
the terms of the
definition thereof on the Related Classes of Certificates
(excluding any
Interest Only Certificates) if the Pass-Through Rate on such
Classes were equal
to the Uncertificated Pass-Through Rate on such Uncertificated
REMIC I Regular
Interest, (ii) as to each Uncertificated REMIC I Regular
Interest Z and each
Uncertificated REMIC III Regular Interest Z1, an amount equal to
one month's
interest at the Pool Strip Rate of the related Mortgage Loan on
the principal
balance of such Mortgage Loan reduced by such Interest's
pro-rata share of any
prepayment interest shortfalls or other reductions of interest
allocable to the
Class I-A-V Certificates, (iii) as to each Uncertificated REMIC
II Regular
Interest other than each Uncertificated REMIC II Regular
Interest Z, an amount
equal to the aggregate amount of Accrued Certificate Interest
that would result
under the terms of the definition thereof on the Related Classes
of Certificates
(excluding any Interest Only Certificates) if the Pass-Through
Rate on such
Classes were equal to the Uncertificated Pass-Through Rate on
such
Uncertificated REMIC II Regular Interest and (iv) as to each
Uncertificated
REMIC II Regular Interest Z and each Uncertificated REMIC III
Regular Interest
Z2, an amount equal to one month's interest at the Pool Strip
Rate of the
related Mortgage Loan on the principal balance of such Mortgage
Loan reduced by
such Interest's pro-rata share of any prepayment interest
shortfalls or other
reductions of interest allocable to the Class II-A-V
Certificates.
Uncertificated Pass-Through Rate: With respect to each of
the
Uncertificated REMIC I Regular Interests, other than the
Uncertificated REMIC I
Regular Interests Z, the per annum rate specified in the
definition of
Uncertificated REMIC I Regular Interests. With respect to each
Uncertificated
REMIC I Regular Interest Z and each Uncertificated REMIC III
Regular Interest
Z1, the Pool Strip Rate for the related Mortgage Loan. With
respect to each of
the Uncertificated REMIC II Regular Interests, other than the
Uncertificated
REMIC II Regular Interests Z, the per annum rate specified in
the definition of
Uncertificated REMIC II Regular Interests. With respect to each
Uncertificated
REMIC II Regular Interest Z and each Uncertificated REMIC III
Regular Interest
Z2, the Pool Strip Rate for the related Mortgage Loan.
Uncertificated Principal Balance: With respect to each
Uncertificated
REMIC I Regular Interest, as defined in the definition of
Uncertificated REMIC I
Regular Interest. With respect to each Uncertificated REMIC II
Regular Interest,
as defined in the definition of Uncertificated REMIC II Regular
Interest.
Uncertificated REMIC I Regular Interests: The Uncertificated
REMIC I
Regular Interests Z together with the interests identified in
the table below,
each representing an undivided beneficial ownership interest in
REMIC I, and
having the following characteristics:
1. The principal balance from time to time of each
Uncertificated REMIC I
Regular Interest identified in the table below shall be the
amount
identified as the Initial Principal Balance thereof in such
table,
minus the sum of (x) the aggregate of all amounts previously
deemed
distributed with respect to such interest and applied to reduce
the
Uncertificated Principal Balance thereof pursuant to Section
10.04(a)(ii) and (y) the aggregate of all reductions in
Certificate
Principal Balance deemed to have occurred in connection with
Realized
Losses that were previously deemed allocated to the
Uncertificated
Principal Balance of such Uncertificated REMIC I Regular
Interest
pursuant to Section 10.04(d), which equals the aggregate
principal
balance of the Classes of Certificates identified as related to
such
Uncertificated REMIC I Regular Interest in such table.
25
<PAGE>
2. The Uncertificated Pass-Through Rate for each
Uncertificated
REMIC I Regular Interest identified in the table below shall
be
the per annum rate set forth in the Pass-Through Rate column
of
such table.
3. The Uncertificated REMIC I Distribution Amount for each REMIC
I
Regular Interest identified in the table below shall be, for
any
Distribution Date, the amount deemed distributed with respect
to
such Uncertificated REMIC I Regular Interest on such
Distribution Date pursuant to the provisions of Section
10.04(a).
<TABLE>
<CAPTION>
----------------------- ---------------------------------
------------------ --------------------
Uncertificated REMIC Related Classes of Certificates
Pass-Through Rate Initial Principal
I Regular Interest Balance
----------------------- ---------------------------------
------------------ --------------------
----------------------- ---------------------------------
------------------ --------------------
<S> <C> <C> <C> <C>
W Class I-A-1, Class I-A-2, Class 6.00% $ 400,496,200.00
I-A-3, Class I-A-4, Class I-A-5
----------------------- ---------------------------------
------------------ --------------------
----------------------- ---------------------------------
------------------ --------------------
X Class I-A-P 0.00% $ 9,107,012.76
----------------------- ---------------------------------
------------------ --------------------
----------------------- ---------------------------------
------------------ --------------------
Y Class I-R-I, Class I-M-1, Class 6.00% $ 21,105,687.83
I-I-M-2, Class I-M-3, Class
I-B-1, Class I-B-2, Class I-B-3
----------------------- ---------------------------------
------------------ --------------------
</TABLE>
Uncertificated REMIC II Regular Interests: The Uncertificated
REMIC II
Regular Interests Z together with the interests identified in
the table below,
each representing an undivided beneficial ownership interest in
REMIC II, and
having the following characteristics:
1. The principal balance from time to time of each
Uncertificated
REMIC II Regular Interest identified in the table below shall
be
the amount identified as the Initial Principal Balance thereof
in
such table, minus the sum of (x) the aggregate of all
amounts
previously deemed distributed with respect to such interest
and
applied to reduce the Uncertificated Principal Balance
thereof
pursuant to Section [10.04(a)(ii)] and (y) the aggregate of
all
reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses that were
previously
deemed allocated to the Uncertificated Principal Balance of
such
Uncertificated REMIC II Regular Interest pursuant to Section
[10.04(d)], which equals the aggregate principal balance of
the
Classes of Certificates identified as related to such
Uncertificated REMIC II Regular Interest in such table.
2. The Uncertificated Pass-Through Rate for each
Uncertificated
REMIC II Regular Interest identified in the table below shall
be
the per annum rate set forth in the Pass-Through Rate column
of
such table.
3. The Uncertificated REMIC II Distribution Amount for each
REMIC
II Regular Interest identified in the table below shall be,
for
any Distribution Date, the amount deemed distributed with
respect to such Uncertificated REMIC II Regular Interest on
such
Distribution Date pursuant to the provisions of Section
10.04(a).
26
<PAGE>
<TABLE>
<CAPTION>
----------------------- ---------------------------------
------------------ --------------------
Uncertificated REMIC Related Classes of Certificates
Pass-Through Rate Initial Principal
II Regular Interest Balance
----------------------- ---------------------------------
------------------ --------------------
----------------------- ---------------------------------
------------------ --------------------
<S> <C> <C> <C>
W Class II-A-1 5.00% $ 100,459,000.00
----------------------- ---------------------------------
------------------ --------------------
----------------------- ---------------------------------
------------------ --------------------
X Class II-A-P 0.00% $ 107,120.64
----------------------- ---------------------------------
------------------ --------------------
----------------------- ---------------------------------
------------------ --------------------
Y Class R-II, Class II-M-1, Class 5.00% $ 3,432,361.08
II-M-2, Class II-M-3, Class
II-B-1, Class II-B-2, Class
II-B-3
----------------------- ---------------------------------
------------------ --------------------
</TABLE>
Uncertificated REMIC I Regular Interests Z: Each of the
2,650
uncertificated partial undivided beneficial ownership interests
in the Trust
Fund, numbered sequentially from 1 to 2,650, each relating to
the particular
Mortgage Loan identified by such sequential number on the
Mortgage Loan
Schedule, each having no principal balance, and each bearing
interest at the
respective Pool Strip Rate on the Stated Principal Balance of
the related
Mortgage Loan.
Uncertificated REMIC I Regular Interests Z Distribution Amount:
With
respect to any Distribution Date, the sum of the amounts deemed
to be
distributed on the Uncertificated REMIC I Regular Interests Z
for such
Distribution Date pursuant to Section 10.04(a).
Uncertificated REMIC I Regular Interest Distribution Amounts:
With
respect to each Uncertificated REMIC I Regular Interest, other
than the
Uncertificated REMIC I Regular Interests Z, the amount specified
as the
Uncertificated REMIC I Regular Interest Distribution Amount with
respect thereto
in the definition of Uncertificated REMIC I Regular Interests.
With respect to
the Uncertificated REMIC I Regular Interests Z, the
Uncertificated REMIC I
Regular Interests Z Distribution Amount.
Uncertificated REMIC II Regular Interests Z: Each of the 747
uncertificated partial undivided beneficial ownership interests
in the Trust
Fund, numbered sequentially from 1 to 747, each relating to the
particular
Mortgage Loan identified by such sequential number on the
Mortgage Loan
Schedule, each having no principal balance, and each bearing
interest at the
respective Pool Strip Rate on the Stated Principal Balance of
the related
Mortgage Loan.
Uncertificated REMIC II Regular Interests Z Distribution Amount:
With
respect to any Distribution Date, the sum of the amounts deemed
to be
distributed on the Uncertificated REMIC II Regular Interests Z
for such
Distribution Date pursuant to Section 10.04(a).
Uncertificated REMIC II Regular Interest Distribution Amounts:
With
respect to each Uncertificated REMIC II Regular Interest, other
than the
Uncertificated REMIC II Regular Interests Z, the amount
specified as the
Uncertificated REMIC II Regular Interest Distribution Amount
with respect
thereto in the definition of Uncertificated REMIC II Regular
Interests. With
respect to the Uncertificated REMIC II Regular Interests Z, the
Uncertificated
REMIC II Regular Interests Z Distribution Amount.
27
<PAGE>
Uncertificated REMIC III Regular Interests Z1: Each of the
2,650
uncertificated partial undivided beneficial ownership interests
in REMIC III
numbered sequentially from 1 through 2,650 each relating to the
identically
numbered Uncertificated REMIC I Regular Interests Z, each having
no principal
balance and bearing interest at a rate equal to the related Pool
Strip Rate on
the Stated Principal Balance of the Mortgage Loan related to the
identically
numbered Uncertificated REMIC I Regular Interests Z, comprising
such
Uncertificated REMIC III Regular Interests Z1's pro rata share
of the amount
distributed pursuant to Section 10.04(a).
Uncertificated REMIC III Regular Interests Z2: Each of the
747
uncertificated partial undivided beneficial ownership interests
in REMIC III
numbered sequentially from 1 through 747 each relating to the
identically
numbered Uncertificated REMIC II Regular Interests Z, each
having no principal
balance and bearing interest at a rate equal to the related Pool
Strip Rate on
the Stated Principal Balance of the Mortgage Loan related to the
identically
numbered Uncertificated REMIC II Regular Interests Z, comprising
such
Uncertificated REMIC III Regular Interests Z2's pro rata share
of the amount
distributed pursuant to Section 10.04(a).
Uncertificated REMIC III Regular Interests Distribution Amount:
With
respect to any Distribution Date, the sum of the amounts deemed
to be
distributed on the Uncertificated REMIC I Regular Interests Z
and Uncertificated
REMIC II Regular Interests Z for such Distribution Date pursuant
to Section
10.04(a).
Underwriters: Greenwich Capital Markets, Inc. and Citigroup
Global Markets
Inc.
Section 1.02. Use of Words and Phrases.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter"
and other equivalent words refer to the Pooling and Servicing
Agreement as a
whole. All references herein to Articles, Sections or
Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling
and Servicing
Agreement. The definitions set forth herein include both the
singular and the
plural.
28
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) (See Section 2.01(a) of the Standard Terms).
(b) (See Section 2.01(b) of the Standard Terms).
(c) The Company may, in lieu of delivering the original of the
documents
set forth in Section 2.01(b)(I)(ii), (iii), (iv) and (v) and
Section
(b)(II)(ii), (iv), (vii), (ix) and (x) (or copies thereof as
permitted by
Section 2.01(b)) to the Trustee or the Custodian or Custodians,
deliver such
documents to the Master Servicer, and the Master Servicer shall
hold such
documents in trust for the use and benefit of all present and
future
Certificateholders until such time as is set forth in the next
sentence. Within
thirty Business Days following the earlier of (i) the receipt of
the original of
all of the documents or instruments set forth in Section
2.01(b)(I)(ii), (iii),
(iv) and (v) and Section (b)(II)(ii), (iv), (vii), (ix) and (x)
(or copies
thereof as permitted by such Section) for any Mortgage Loan and
(ii) a written
request by the Trustee to deliver those documents with respect
to any or all of
the Mortgage Loans then being held by the Master Servicer, the
Master Servicer
shall deliver a complete set of such documents to the Trustee or
the Custodian
or Custodians that are the duly appointed agent or agents of the
Trustee.
The parties hereto agree that it is not intended that any
Mortgage Loan
be included in the Trust Fund that is either (i) a "High-Cost
Home Loan" as
defined in the New Jersey Home Ownership Act effective November
27, 2003, (ii) a
"High-Cost Home Loan" as defined in the New Mexico Home Loan
Protection Act
effective January 1, 2004 or (iii) a "High Cost Home Mortgage
Loan" as defined
in the Massachusetts Predatory Home Loan Practices Act effective
November 7,
2004.
(d) (See Section 2.01(d) of the Standard Terms).
(e) (See Section 2.01(e) of the Standard Terms).
(f) (See Section 2.01(f) of the Standard Terms).
(g) (See Section 2.01(g) of the Standard Terms).
(h) (See Section 2.01(h) of the Standard Terms).
Section 2.02. Acceptance by Trustee. (See Section 2.02 of the
Standard Terms)
Section 2.03. Representations, Warranties and Covenants
of the Master Servicer and the Company.
(a) For representations, warranties and covenants of the Master
Servicer,
see Section 2.03(a) of the Standard Terms.
29
<PAGE>
(b) The Company hereby represents and warrants to the Trustee
for the
benefit of Certificateholders that as of the Closing Date (or,
if
otherwise specified below, as of the date so specified):
(i) No Mortgage Loan is 30 or more days Delinquent in payment of
principal
and interest as of the Cut-off Date and no Mortgage Loan has
been so
Delinquent more than once in the 12-month period prior to the
Cut-off
Date;
(ii) The information set forth in Exhibit One hereto with
respect to each
Mortgage Loan or the Mortgage Loans, as the case may be, is true
and
correct in all material respects at the date or dates respecting
which
such information is furnished;
(iii) The Mortgage Loans are fully-amortizing (subject to
interest only
periods, if applicable), fixed-rate mortgage loans with level
Monthly
Payments due, with respect to a majority of the Mortgage Loans,
on the
first day of each month and terms to maturity at origination
or
modification of not more than 15 years, in the case of Group II
Loans,
and 30 years, in the case of Group I Loans;
(iv) To the best of the Company's knowledge, except in the case
of six
Group I Loans representing approximately 0.2% of the
aggregate
principal balance of the Group I Loans, if a Group I Loan is
secured
by a Mortgaged Property with a Loan-to-Value Ratio at
origination in
excess of 80%, such Mortgage Loan is the subject of a
Primary
Insurance Policy that insures (a) at least 35% of the Stated
Principal
Balance of the Mortgage Loan at origination if the Loan-to-Value
Ratio
is between 100.00% and 95.01%, (b) at least 30% of the
Stated
Principal Balance of the Mortgage Loan at origination if the
Loan-to-Value Ratio is between 95.00% and 90.01%, (c) at least
25% of
such balance if the Loan-to-Value Ratio is between 90.00% and
85.01%
and (d) at least 12% of such balance if the Loan-to-Value Ratio
is
between 85.00% and 80.01% and, except in the case of one Group
II Loan
representing approximately 0.2% of the aggregate principal
balance of
the Group II Loans, if a Group II Loan is secured by a
Mortgaged
Property with a Loan-to-Value Ratio at origination in excess of
80%,
such Mortgage Loan is the subject of a Primary Insurance Policy
that
insures (a) at least 30% of the Stated Principal Balance of
the
Mortgage Loan at origination if the Loan-to-Value Ratio is
between
100.00% and 95.01%, (b) at least 25% of the Stated Principal
Balance
of the Mortgage Loan at origination if the Loan-to-Value Ratio
is
between 95.00% and 90.01%, (c) at least 12% of such balance if
the
Loan-to-Value Ratio is between 90.00% and 85.01% and (d) at
least 6%
of such balance if the Loan-to-Value Ratio is between 85.00%
and
80.01%. To the best of the Company's knowledge, each such
Primary
Insurance Policy is in full force and effect and the Trustee
is
entitled to the benefits thereunder;
(v) The issuers of the Primary Insurance Policies are insurance
companies
whose claims-paying abilities are currently acceptable to each
Rating
Agency;
(vi) No more than 0.4% of the Group I Loans by aggregate Stated
Principal
Balance as of the Cut-off Date are secured by Mortgaged
Properties
located in any one zip code area in Nevada, and no more than
0.4% of
the Group I Loans by aggregate Stated Principal Balance as of
the
Cut-off Date are secured by Mortgaged Properties located in any
one
zip code area outside Nevada; no more than 0.9% of the Group II
Loans
by aggregate Stated Principal Balance as of the Cut-off Date
are
30
<PAGE>
secured by Mortgaged Properties located in any one zip code area
in
Massachusetts, and no more than 0.9% of the Group II Loans
by
aggregate Stated Principal Balance as of the Cut-off Date are
secured
by Mortgaged Properties located in any one zip code area
outside
Massachusetts;
(vii) The improvements upon the Mortgaged Properties are insured
against loss
by fire and other hazards as required by the Program Guide,
including
flood insurance if required under the National Flood Insurance
Act of
1968, as amended. The Mortgage requires the Mortgagor to
maintain such
casualty insurance at the Mortgagor's expense, and on the
Mortgagor's
failure to do so, authorizes the holder of the Mortgage to
obtain and
maintain such insurance at the Mortgagor's expense and to
seek
reimbursement therefor from the Mortgagor;
(viii) Immediately prior to the assignment of the Mortgage Loans
to the
Trustee, the Company had good title to, and was the sole owner
of, each
Mortgage Loan free and clear of any pledge, lien, encumbrance
or
security interest (other than rights to servicing and
related
compensation) and such assignment validly transfers ownership of
the
Mortgage Loans to the Trustee free and clear of any pledge,
lien,
encumbrance or security interest;
(ix) Approximately 43.3% of the Group I Loans by aggregate
Stated Principal
Balance as of the Cut-off Date were underwritten under a reduced
loan
documentation program, approximately 13.2% of the Group I Loans
by
aggregate Stated Principal Balance as of the Cut-off Date
were
underwritten under a no-stated income program, and approximately
3.5%
of the Group I Loans by aggregate Stated Principal Balance as of
the
Cut-off Date were underwritten under a no income/no asset
program and;
approximately 65.8% of the Group II Loans by aggregate
Stated
Principal Balance as of the Cut-off Date were underwritten under
a
reduced loan documentation program, approximately 21.1% of the
Group
II Loans by aggregate Stated Principal Balance as of the Cut-off
Date
were underwritten under a no-stated income program, and
approximately
3.8% of the Group II Loans were underwritten under a no
income/no
asset program;
(x) Except with respect to approximately 23.21% of the Group I
Loans by
aggregate Stated Principal Balance as of the Cut-off Date
and
approximately 27.5% of the Group II Loans by aggregate Stated
Principal
Balance as of the Cut-off Date, the Mortgagor represented in its
loan
application with respect to the related Mortgage Loan that the
Mortgaged
Property would be owner-occupied;
(xi) None of the Mortgage Loans is a Buy-Down Mortgage Loan;
(xii) Each Mortgage Loan constitutes a qualified mortgage under
Section
860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1);
31
<PAGE>
(xiii) A policy of title insurance was effective as of the
closing of each
Mortgage Loan and is valid and binding and remains in full force
and
effect, unless the Mortgaged Properties are located in the State
of Iowa
and an attorney's certificate has been provided as described in
the
Program Guide;
(xiv) None of the Mortgage Loans is a Cooperative Loan; with
respect to a
Mortgage Loan that is a Cooperative Loan, the Cooperative Stock
that is
pledged as security for the Mortgage Loan is held by a person as
a
tenant-stockholder (as defined in Section 216 of the Code) in
a
cooperative housing corporation (as defined in Section 216 of
the Code);
(xv) With respect to each Mortgage Loan originated under a
"streamlined"
Mortgage Loan program (through which no new or updated
appraisals of
Mortgaged Properties are obtained in connection with the
refinancing
thereof), the related Seller has represented that either (a) the
value
of the related Mortgaged Property as of the date the Mortgage
Loan was
originated was not less than the appraised value of such
property at
the time of origination of the refinanced Mortgage Loan or (b)
the
Loan-to-Value Ratio of the Mortgage Loan as of the date of
origination
of the Mortgage Loan generally meets the Company's
underwriting
guidelines;
(xvi) Interest on each Mortgage Loan is calculated on the basis
of a 360-day
year consisting of twelve 30-day months;
(xvii) None of the Mortgage Loans contain in the related
Mortgage File a
Destroyed Mortgage Note;
(xviii) None of the Mortgage Loans has been made to an
International Borrower,
and no such Mortgagor is a member of a foreign diplomatic
mission with
diplomatic rank;
(xix) No Mortgage Loan provides for payments that are subject to
reduction by
withholding taxes levied by any foreign (non-United States)
sovereign
government; and
(xx) None of the Mortgage Loans are Additional Collateral Loans
and none of
the Mortgage Loans are Pledged Asset Loans.
It is understood and agreed that the representations and
warranties set forth in
this Section 2.03(b) shall survive delivery of the respective
Mortgage Files to
the Trustee or any Custodian.
Upon discovery by any of the Company, the Master Servicer, the
Trustee
or any Custodian of a breach of any of the representations and
warranties set
forth in this Section 2.03(b) that materially and adversely
affects the
interests of the Certificateholders in any Mortgage Loan, the
party discovering
such breach shall give prompt written notice to the other
parties (any Custodian
being so obligated under a Custodial Agreement); provided,
however, that in the
event of a breach of the representation and warranty set forth
in Section
2.03(b)(xii), the party discovering such breach shall give such
notice within
five days of discovery. Within 90 days of its discovery or its
receipt of notice
of breach, the Company shall either (i) cure such breach in all
material
respects or (ii) purchase such Mortgage Loan from the Trust Fund
at the Purchase
Price and in the manner set forth in Section 2.02; provided that
the Company
shall have the option to substitute a Qualified Substitute
Mortgage Loan or
Loans for such Mortgage Loan if such substitution occurs within
two years
32
<PAGE>
following the Closing Date; provided that if the omission or
defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as
defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur
within 90 days
from the date such breach was discovered. Any such substitution
shall be
effected by the Company under the same terms and conditions as
provided in
Section 2.04 for substitutions by Residential Funding. It is
understood and
agreed that the obligation of the Company to cure such breach or
to so purchase
or substitute for any Mortgage Loan as to which such a breach
has occurred and
is continuing shall constitute the sole remedy respecting such
breach available
to the Certificateholders or the Trustee on behalf of the
Certificateholders.
Notwithstanding the foregoing, the Company shall not be required
to cure
breaches or purchase or substitute for Mortgage Loans as
provided in this
Section 2.03(b) if the substance of the breach of a
representation set forth
above also constitutes fraud in the origination of the Mortgage
Loan.
Section 2.04. Representations and Warranties of Sellers.(See
Section 2.04
of the Standard Terms)
Section 2.05. Execution and Authentication of
Certificates/Issuance of
Certificates Evidencing Interests in REMIC I and REMIC II.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and
the delivery of the Mortgage Files to it, or any Custodian on
its behalf,
subject to any exceptions noted, together with the assignment to
it of all other
assets included in the Trust Fund and/or the applicable REMIC,
receipt of which
is hereby acknowledged. Concurrently with such delivery and in
exchange
therefor, the Trustee, pursuant to the written request of the
Company executed
by an officer of the Company, has executed and caused to be
authenticated and
delivered to or upon the order of the Company (i) the Class R-I
Certificates in
authorized denominations which together with the Uncertificated
REMIC I Regular
Interests, evidence the beneficial interest in REMIC I and (ii)
the Class R-II
Certificates in authorized denominations which together with the
Uncertificated
REMIC II Regular Interests, evidence the beneficial interest in
REMIC II.
Section 2.06. Conveyance of Uncertificated REMIC I Regular
Interests and REMIC II Regular Interests; Acceptance by
the Trustee.
The Company, as of the Closing Date, and concurrently with the
execution
and delivery hereof, does hereby assign without recourse all the
right, title
and interest of the Company in and to the Uncertificated REMIC I
Regular
Interests and the Uncertificated REMIC II Regular Interests to
the Trustee for
the benefit of the Holders of each Class of Certificates (other
than the Class
R-I Certificates and the Class R-II Certificates). The Trustee
acknowledges
receipt of the Uncertificated REMIC I Regular Interests and the
Uncertificated
REMIC II Regular Interests and declares that it holds and will
hold the same in
trust for the exclusive use and benefit of all present and
future Holders of
each Class of Certificates (other than the Class R-I
Certificates and the Class
R-II Certificates). The rights of the Holders of each Class of
Certificates
(other than the Class R-I Certificates and the Class R-II
Certificates) to
receive distributions from the proceeds of REMIC III in respect
of such Classes,
and all ownership interests of the Holders of such Classes in
such
distributions, shall be as set forth in this Agreement.
33
<PAGE>
Section 2.07. Issuance of Certificates Evidencing Interest in
REMIC III.
The Trustee acknowledges the assignment to it of the
Uncertificated
REMIC I Regular Interests and the Uncertificated REMIC II
Regular Interests and,
concurrently therewith and in exchange therefor, pursuant to the
written request
of the Company executed by an officer of the Company, the
Trustee has executed
and caused to be authenticated and delivered to or upon the
order of the
Company, all Classes of Certificates (other than the Class R-I
Certificates and
the Class R-II Certificates) in authorized denominations, which
evidence the
beneficial interest in the entire REMIC III.
Section 2.08. Purposes and Powers of the Trust. (See Section
2.08 of the
Standard Terms).
34
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
(SEE ARTICLE III OF THE STANDARD TERMS)
35
<PAGE>
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account. (See Section 4.01 of the
Standard Terms)
Section 4.02. Distributions.
(a) On each Distribution Date the Master Servicer on behalf of
the Trustee
(or the Paying Agent appointed by the Trustee) shall distribute
to the
Master Servicer, in the case of a distribution pursuant to
Section
4.02(a)(iii) below, and to each Certificateholder of record on
the next
preceding Record Date (other than as provided in Section 9.01
respecting
the final distribution) either in immediately available funds
(by wire
transfer or otherwise) to the account of such Certificateholder
at a
bank or other entity having appropriate facilities therefor, if
such
Certificateholder has so notified the Master Servicer or the
Paying
Agent, as the case may be, or, if such Certificateholder has not
so
notified the Master Servicer or the Paying Agent by the Record
Date, by
check mailed to such Certificateholder at the address of such
Holder
appearing in the Certificate Register such Certificateholder's
share
(which share (A) with respect to each Class of Certificates
(other than
any Subclass of the Class A-V Certificates), shall be based on
the
aggregate of the Percentage Interests represented by
Certificates of the
applicable Class held by such Holder or (B) with respect to any
Subclass
of the Class A-V Certificates, shall be equal to the amount (if
any)
distributed pursuant to Section 4.02(a)(i) below to each Holder
of a
Subclass thereof) of the following amounts, in the following
order of
priority (subject to the provisions of Section 4.02(b), (c) and
(e)
below and further subject to the provisions of Section 4.05 in
respect
of any Diverted Amounts), in each case to the extent of the
related
Available Distribution Amount remaining:
(i) (X) from the Available Distribution Amount related to the
Loan Group I,
to the holders of the Group I Senior Certificates (other than
the Class
I-A-P Certificates) Accrued Certificate Interest on such Class
of
Certificates (or Subclasses, if any, with respect to the Class
I-A-V
Certificates) for such Distribution Date, plus any Accrued
Certificate
Interest thereon remaining unpaid from any previous Distribution
Date
except as provided in the last paragraph of this Section
4.02(a); and
(Y) from the Available Distribution Amount related to the
Loan Group II, to the holders of the Group II Senior
Certificates (other
than the Class II-A-P Certificates) Accrued Certificate Interest
on such
Class of Certificates (or Subclasses, if any, with respect to
the Class
II-A-V Certificates) for such Distribution Date, plus any
Accrued
Certificate Interest thereon remaining unpaid from any
previous
Distribution Date except as provided in the last paragraph of
this
Section 4.02(a);
(ii) (X) to the Class I-A-P Certificates and the Class II-A-P
Certificates,
from the Available Distribution Amount for the related Loan
Group, the
Class A-P Principal Distribution Amount for the related Loan
Group
(applied to reduce the Certificate Principal Balance of the
related
Class A-P Certificates); and
36
<PAGE>
(Y) to the Senior Certificates (other than the Class A-P
Certificates and the Class A-V Certificates) of each Certificate
Group,
from the Available Distribution Amount for the related Loan
Group, in
the priorities and amounts set forth in Section 4.02(b) and (c),
the sum
of the following (applied to reduce the Certificate Principal
Balances
of such Senior Certificates, as applicable):
(A) the related Senior Percentage for such Distribution Date and
Loan
Group times the sum of the following:
(1) the principal portion of each Monthly Payment due during the
related Due
Period on each Outstanding Mortgage Loan in the related Loan
Group (other
than the related Discount Fraction of the principal portion of
such payment
with respect to a Discount Mortgage Loan), whether or not
received on or
prior to the related Determination Date, minus the principal
portion of any
Debt Service Reduction (other than the related Discount Fraction
of the
principal portion of such Debt Service Reductions with respect
to each
Discount Mortgage Loan) which together with other Bankruptcy
Losses exceeds
the related Bankruptcy Amount;
(2) the Stated Principal Balance of any Mortgage Loan in the
related Loan Group
repurchased during the preceding calendar month (or deemed to
have been so
repurchased in accordance with Section 3.07(b)) pursuant to
Section 2.02,
2.03, 2.04 or 4.07 and the amount of any shortfall deposited in
the
Custodial Account in connection with the substitution of a
Deleted Mortgage
Loan in such Loan Group pursuant to Section 2.03 or 2.04 during
the
preceding calendar month (other than the related Discount
Fraction of such
Stated Principal Balance or shortfall with respect to each
Discount
Mortgage Loan); and
(3) the principal portion of all other unscheduled collections
with respect to
the related Loan Group (other than Principal Prepayments in Full
and
Curtailments and amounts received in connection with a Cash
Liquidation or
REO Disposition of a Mortgage Loan described in Section
4.02(a)(ii)(Y)(B)
of this Series Supplement, including without limitation
Insurance Proceeds,
Liquidation Proceeds and REO Proceeds), including Subsequent
Recoveries,
received during the preceding calendar month (or deemed to have
been so
received in accordance with Section 3.07(b)) to the extent
applied by the
Master Servicer as recoveries of principal of the related
Mortgage Loan
pursuant to Section 3.14 of the Standard Terms (other than the
related
Discount Fraction of the principal portion of such unscheduled
collections,
with respect to each Discount Mortgage Loan in the related Loan
Group);
(B) with respect to each Mortgage Loan in the related Loan Group
for which
a Cash Liquidation or a REO Disposition occurred during the
preceding calendar
month (or was deemed to have occurred during such period in
accordance with
Section 3.07(b)) and did not result in any Excess Special Hazard
Losses, Excess
Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses,
an amount equal
to the lesser of (a) the related Senior Percentage for such
Distribution Date
times the Stated Principal Balance of such Mortgage Loan (other
than the related
Discount Fraction of such Stated Principal Balance, with respect
to each
Discount Mortgage Loan in the related Loan Group) and (b) the
related Senior
37
<PAGE>
Accelerated Distribution Percentage for such Distribution Date
times the related
unscheduled collections (including without limitation Insurance
Proceeds,
Liquidation Proceeds and REO Proceeds) to the extent applied by
the Master
Servicer as recoveries of principal of the related Mortgage Loan
pursuant to
Section 3.14 of the Standard Terms (in each case other than the
portion of such
unscheduled collections, with respect to a Discount Mortgage
Loan in the related
Loan Group, included in clause (C) of the definition of Class
A-P Principal
Distribution Amount;
(C) the related Senior Accelerated Distribution Percentage for
such
Distribution Date times the aggregate of all Principal
Prepayments in Full with
respect to the related Loan Group (including Diverted Amounts
that are treated
in the same manner as Principal Prepayments in Full pursuant to
Section 4.05)
received in the related Prepayment Period and Curtailments with
respect to the
related Loan Group received in the preceding calendar month
(other than the
related Discount Fraction of such Principal Prepayments in Full
and
Curtailments, with respect to each Discount Mortgage Loan in the
related Loan
Group);
(D) any portion of the Excess Subordinate Principal Amount for
such
Distribution Date allocated with respect to such Loan Group;
and
(E) any amounts described in subsection (ii)(Y), clauses (A),
(B) and (C)
of this Section 4.02(a), as determined for any previous
Distribution Date, which
remain unpaid after application of amounts previously
distributed pursuant to
this clause (E) to the extent that such amounts are not
attributable to Realized
Losses which have been allocated to the Subordinate
Certificates; minus
(F) the related Capitalization Reimbursement Amount for such
Distribution
Date, other than the related Discount Fraction of any portion of
that amount
related to each Discount Mortgage Loan in the related Loan
Group, multiplied by
a fraction, the numerator of which is the Senior Principal
Distribution Amount,
without giving effect to this clause (F), and the denominator of
which is the
sum of the principal distribution amounts for all Classes of
related
Certificates other than the related Class A-P Certificates,
payable from the
Available Distribution Amount for the related Loan Group without
giving effect
to any reductions for the Capitalization Reimbursement
Amount;
(iii)if the Certificate Principal Balances of the Subordinate
Certificates
relating to a Loan Group have not been reduced to zero, to the
Master
Servicer or a Subservicer, by remitting for deposit to the
Custodial
Account, to the extent of and in reimbursement for any Advances
or
Subservicer Advances previously made with respect to any related
Mortgage
Loan or REO Property which remain unreimbursed in whole or in
part
following the Cash Liquidation or REO Disposition of such
Mortgage Loan or
REO Property, minus any such Advances that were made with
respect to
delinquencies that ultimately constituted Excess Special Hazard
Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary
Losses;
38
<PAGE>
(iv) to the Holders of the Class I-M-1 Certificates or the Class
II-M-1
Certificates, as applicable, the Accrued Certificate Interest
thereon
for such Distribution Date, plus any Accrued Certificate
Interest
thereon remaining unpaid from any previous Distribution Date,
except as
provided below;
(v) to the Holders of the Class I-M-1 Certificates or the Class
II-M-1
Certificates, as applicable, an amount equal to (x) the related
Subordinate
Principal Distribution Amount for such Class of Certificates for
each Loan
Group for such Distribution Date, minus (y) the amount of any
related Class
A-P Collection Shortfalls for such Distribution Date or
remaining unpaid
for all previous Distribution Dates, to the extent the amounts
available
pursuant to clause (x) of Sections 4.02(a)(vii), (ix), (xi),
(xiii), (xiv)
and (xv) of this Series Supplement are insufficient therefor,
applied in
reduction of the Certificate Principal Balance of the Class
I-M-1
Certificates or the Class II-M-1 Certificates, as
applicable;
(vi) to the Holders of the Class I-M-2 Certificates or the Class
II-M-2
Certificates, as applicable, the Accrued Certificate Interest
thereon
for such Distribution Date, plus any Accrued Certificate
Interest
thereon remaining unpaid from any previous Distribution Date,
except as
provided below;
(vii)to the Holders of the Class I-M-2 Certificates or the Class
II-M-2
Certificates, as applicable, an amount equal to (x) the related
Subordinate
Principal Distribution Amount for such Class of Certificates for
each Loan
Group for such Distribution Date, minus (y) the amount of any
related Class
A-P Collection Shortfalls for such Distribution Date or
remaining unpaid
for all previous Distribution Dates, to the extent the amounts
available
pursuant to clause (x) of Sections 4.02(a) (ix), (xi), (xiii),
(xiv) and
(xv) are insufficient therefor, applied in reduction of the
Certificate
Principal Balance of the Class I-M-2 Certificates or the Class
II-M-2
Certificates, as applicable;
(viii) to the Holders of the Class I-M-3 Certificates or the
Class II-M-3
Certificates, as applicable, the Accrued Certificate Interest
thereon
for such Distribution Date, plus any Accrued Certificate
Interest
thereon remaining unpaid from any previous Distribution Date,
except as
provided below;
(ix) to the Holders of the Class I-M-3 Certificates or the Class
II-M-3
Certificates, as applicable, an amount equal to (x) the related
Subordinate
Principal Distribution Amount for such Class of Certificates for
each Loan
Group for such Distribution Date minus (y) the amount of any
related Class
A-P Collection Shortfalls for such Distribution Date or
remaining unpaid
for all previous Distribution Dates, to the extent the amounts
available
pursuant to clause (x) of Sections 4.02(a)(xi), (xiii), (xiv)
and (xv) are
insufficient therefor, applied in reduction of the Certificate
Principal
Balance of the Class I-M-3 Certificates or the Class II-M-3
Certificates,
as applicable;
39
<PAGE>
(x) to the Holders of the Class I-B-1 Certificates or the Class
II-B-1
Certificates, as applicable, the Accrued Certificate Interest
thereon
for such Distribution Date, plus any Accrued Certificate
Interest
thereon remaining unpaid from any previous Distribution Date,
except as
provided below;
(xi) to the Holders of the Class I-B-1 Certificates or the Class
II-B-1
Certificates, as applicable, an amount equal to (x) the related
Subordinate
Principal Distribution Amount for such Class of Certificates for
each Loan
Group for such Distribution Date minus (y) the amount of any
related Class
A-P Collection Shortfalls for such Distribution Date or
remaining unpaid
for all previous Distribution Dates, to the extent the amounts
available
pursuant to clause (x) of Sections 4.02(a)(xiii), (xiv) and (xv)
are
insufficient therefor, applied in reduction of the Certificate
Principal
Balance of the Class I-B-1 Certificates or the Class II-B-1
Certificates,
as applicable;
(xii) to the Holders of the Class I-B-2 Certificates or the
Class II-B-2
Certificates, as applicable, the Accrued Certificate Interest
thereon
for such Distribution Date, plus any Accrued Certificate
Interest
thereon remaining unpaid from any previous Distribution Date,
except as
provided below;
(xiii) to the Holders of the Class I-B-2 Certificates or the
Class II-B-2
Certificates, as applicable, an amount equal to (x) the
related
Subordinate Principal Distribution Amount for such Class of
Certificates
for each Loan Group for such Distribution Date minus (y) the
amount of
any related Class A-P Collection Shortfalls for such
Distribution Date
or remaining unpaid for all previous Distribution Dates, to the
extent
the amounts available pursuant to clause (x) of Sections
4.02(a)(xiv)
and (xv) are insufficient therefor, applied in reduction of
the
Certificate Principal Balance of the Class I-B-2 Certificates or
the
Class II-B-2 Certificates, as applicable;
(xiv) to the Holders of the Class I-B-3 Certificates or the
Class II-B-3
Certificates, as applicable, an amount equal to (x) the
Accrued
Certificate Interest thereon for such Distribution Date, plus
any
Accrued Certificate Interest thereon remaining unpaid from any
previous
Distribution Date, except as provided below, minus (y) the
amount of any
related Class A-P Collection Shortfalls for such Distribution
Date or
remaining unpaid for all previous Distribution Dates, to the
extent the
amounts available pursuant to clause (x) of Section 4.02(a)(xv)
are
insufficient therefor;
(xv) to the Holders of the Class I-B-3 Certificates or the Class
II-B-3
Certificates, as applicable, an amount equal to (x) the
related
Subordinate Principal Distribution Amount for such Class of
Certificates
for each Loan Group for such Distribution Date minus (y) the
amount of
any related Class A-P Collection Shortfalls for such
Distribution Date
or remaining unpaid for all previous Distribution Dates applied
in
reduction of the Certificate Principal Balance of the Class
I-B-3
Certificates or the Class II-B-3 Certificates, as
applicable;
(xvi)to the Senior Certificates, on a pro rata basis in
accordance with their
respective outstanding Certificate Principal Balances, the
portion, if any,
of the Available Distribution Amounts for the related Loan Group
remaining
after the foregoing distributions, applied to reduce the
Certificate
Principal Balances of such Senior Certificates, but in no event
more than
40
<PAGE>
the aggregate of the outstanding Certificate Principal Balances
of each
such Class of Senior Certificates, and thereafter, to each Class
of related
Subordinate Certificates then outstanding beginning with such
Class with
the Highest Priority, any portion of the related Available
Distribution
Amounts remaining after the related Senior Certificates have
been retired,
applied to reduce the Certificate Principal Balance of each such
Class of
related Subordinate Certificates, but in no event more than the
outstanding
Certificate Principal Balance of each such Class of
Subordinate
Certificates; and
(xvii) to the Class R-III Certificates, the balance, if any, of
the Available
Distribution Amounts for all Loan Groups.
Notwithstanding the foregoing, on any Distribution Date, with
respect to
the Class of related Subordinate Certificates outstanding on
such Distribution
Date with the Lowest Priority, or in the event the related
Subordinate
Certificates are no longer outstanding, the related Senior
Certificates, Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution
Date will be distributable only to the extent that (1) a
shortfall in the
amounts available to pay Accrued Certificate Interest on any
Class of
Certificates results from an interest rate reduction in
connection with a
Servicing Modification, or (2) such unpaid Accrued Certificate
Interest was
attributable to interest shortfalls relating to the failure of
the Master
Servicer to make any required Advance, or the determination by
the Master
Servicer that any proposed Advance would be a Nonrecoverable
Advance with
respect to the related Mortgage Loan where such Mortgage Loan
has not yet been
the subject of a Cash Liquidation or REO Disposition or the
related Liquidation
Proceeds, Insurance Proceeds and REO Proceeds have not yet been
distributed to
the Certificateholders.
(b) (I) Distributions of principal from the Available
Distribution
Amount for Loan Group I on each Distribution Date will be made
as
follows:
(i) first, the Class A-P Principal Distribution Amount for Loan
Group
I shall be distributed to the Class I-A-P Certificates, until
the
Certificate Principal Balance thereof has been reduced to
zero;
and
(ii) second, an amount equal to the Senior Principal
Distribution
Amount for Loan Group I shall be distributed as follows:
(A) first, to the Class R-I Certificates and Class R-III
Certificates, on a pro
rata basis in accordance with their respective Certificate
Principal
Balances, until the Certificate Principal Balances of those
classes have
been reduced to zero;
(B) second, any remaining amount to the Lockout Certificates,
until the
Certificate Principal Balance of the Lockout Certificates has
been reduced
to zero, an amount equal to the Lockout Percentage of the
Lockout
Certificates' pro rata share (based on the Certificate Principal
Balance
thereof relative to the aggregate Certificate Principal Balance
of the
Group I Senior, Class I-M, Class I-B-1, Class I-B-2 and Class
I-B-3
Certificates (other than the Class I-A-P Certificates)) of the
aggregate of
the collections described in clauses (A), (B), (C), (D) and (E)
(net of
amounts set forth in clause (F)) of Section 4.02(a)(ii)(Y),
without
application of the related Senior Percentage or the related
Senior
Accelerated Distribution Percentage; provided, however, that if
the
aggregate of the amounts set forth in clauses (A), (B), (C), (D)
and (E)
41
<PAGE>
(net of amounts set forth in clause (F)) of Section
4.02(a)(ii)(Y) is more
than the balance of the related Available Distribution Amount
remaining
after the related Senior Interest Distribution Amount and the
related Class
A-P Principal Distribution Amount have been distributed, the
amount paid to
the Lockout Certificates pursuant to this Section
4.02(b)(I)(ii)(B) shall
be reduced by an amount equal to the Lockout Certificates' pro
rata share
(based on the Certificate Principal Balance of the Lockout
Certificates
relative to the aggregate Certificate Principal Balance of the
Group I
Senior Certificates (other than the Class I-A-P Certificates))
of such
difference;
(C) third, any remaining amount to the Class I-A-1
Certificates,
until the Certificate Principal Balance of that class has
been
reduced to zero;
(D) fourth, any remaining amount to the Class I-A-2
Certificates,
until the Certificate Principal Balance of that class has
been
reduced to zero;
(E) fifth, any remaining amount to the Class I-A-3
Certificates,
until the Certificate Principal Balance of that class has
been
reduced to zero; and
(F) sixth, any remaining amount to the Class I-A-5
Certificates,
until the Certificate Principal Balance of that class has
been
reduced to zero; and
(II) Distributions of principal from the Available
Distribution
Amount for Loan Group II on each Distribution Date will be made
as
follows:
(i) first, the Class A-P Principal Distribution Amount for
Loan
Group II shall be distributed to the Class II-A-P Certificates,
until
the Certificate Principal Balance of that class has been reduced
to
zero; and
(ii) second, an amount equal to the Senior Principal
Distribution
Amount for Loan Group I shall be distributed as follows:
(A) first, to the Class R-II Certificates, until the
Certificate Principal Balance of that class has been reduced
to
zero; and
(B) second, any remaining amount to the Class II-A-1
Certificates, until the Certificate Principal Balance of
that
class has been reduced to zero.
(c) Notwithstanding Section 4.02(b)(I)(ii) and Section
4.02(b)(II)(ii), on or
after the related Credit Support Depletion Date, the Senior
Principal
Distribution Amount for the related Loan Group will be
distributed to the
remaining Senior Certificates in the related Certificate Group
(other than the
related Class A-P Certificates and the related Class A-V
Certificates) pro rata
in accordance with their respective outstanding Certificate
Principal Balances.
42
<PAGE>
(d) After the reduction of the Certificate Principal Balances of
all Classes of
Senior Certificates of a Certificate Group (other than the
related Class A-P
Certificates) to zero but prior to the related Credit Support
Depletion Date,
such Senior Certificates (other than the related Class A-P
Certificates) will be
entitled to no further distributions of principal thereon and
the applicable
Available Distribution Amount will be distributed solely to the
holders of the
related Class A-P Certificates, the related Class A-V
Certificates and the
related Subordinate Certificates, in each case as described
herein.
(e) In addition to the foregoing distributions, with respect to
any Subsequent
Recoveries, the Master Servicer shall deposit such funds into
the Custodial
Account pursuant to Section 3.07(b)(iii). If, after taking into
account such
Subsequent Recoveries, the amount of a Realized Loss is reduced,
the amount of
such Subsequent Recoveries will be applied to increase the
Certificate Principal
Balance of the Class of related Subordinate Certificates with a
Certificate
Principal Balance greater than zero with the highest payment
priority to which
Realized Losses, other than Excess Bankruptcy Losses, Excess
Fraud Losses,
Excess Special Hazard Losses and Extraordinary Losses, have been
allocated, but
not by more than the amount of Realized Losses previously
allocated to that
Class of Certificates pursuant to Section 4.05. The amount of
any remaining
Subsequent Recoveries will be applied to increase from zero the
Certificate
Principal Balance of the Class of related Certificates with the
next lower
payment priority, up to the amount of Realized Losses previously
allocated to
that Class of Certificates pursuant to Section 4.05. Any
remaining Subsequent
Recoveries will in turn be applied to increase from zero the
Certificate
Principal Balance of the Class of related Certificates with the
next lower
payment priority up to the amount of Realized Losses previously
allocated to
that Class of Certificates pursuant to Section 4.05, and so on.
Holders of such
Certificates will not be entitled to any payment in respect of
Accrued
Certificate Interest on the amount of such increases for any
Interest Accrual
Period preceding the Interest Accrual Period that relates to the
Distribution
Date on which such increase occurs. Any such increases shall be
applied to the
Certificate Principal Balance of each Certificate of such Class
in accordance
with its respective Percentage Interest.
(f) Each distribution with respect to a Book-Entry Certificate
shall be paid to
the Depository, as Holder thereof, and the Depository shall be
solely
responsible for crediting the amount of such distribution to the
accounts of its
Depository Participants in accordance with its normal
procedures. Each
Depository Participant shall be responsible for disbursing such
distribution to
the Certificate Owners that it represents and to each indirect
participating
brokerage firm (a "brokerage firm") for which it acts as agent.
Each brokerage
firm shall be responsible for disbursing funds to the
Certificate Owners that it
represents. None of the Trustee, the Certificate Registrar, the
Company or the
Master Servicer shall have any responsibility therefor.
(g) Except as otherwise provided in Section 9.01, if the Master
Servicer
anticipates that a final distribution with respect to any Class
of Certificates
will be made on the next Distribution Date, the Master Servicer
shall, no later
than the Determination Date in the month of such final
distribution, notify the
Trustee and the Trustee shall, no later than two (2) Business
Days after such
Determination Date, mail on such date to each Holder of such
Class of
Certificates a notice to the effect that: (i) the Trustee
anticipates that the
final distribution with respect to such Class of Certificates
will be made on
such Distribution Date but only upon presentation and surrender
of such
43
<PAGE>
Certificates at the office of the Trustee or as otherwise
specified therein, and
(ii) no interest shall accrue on such Certificates from and
after the end of the
related Interest Accrual Period. In the event that
Certificateholders required
to surrender their Certificates pursuant to Section 9.01(c) do
not surrender
their Certificates for final cancellation, the Trustee shall
cause funds
distributable with respect to such Certificates to be withdrawn
from the
Certificate Account and credited to a separate escrow account
for the benefit of
such Certificateholders as provided in Section 9.01(d).
Section 4.03. Statements to Certificateholders; Statements to
the Rating
Agencies; Exchange Act Reporting. (See Section 4.03 of the
Standard Terms)
Section 4.04. Distribution of Reports to the Trustee and the
Company; Advances
by the Master Servicer. (See Section 4.04 of the Standard
Terms)
Section 4.05. Allocation of Realized Losses.
Prior to each Distribution Date, the Master Servicer shall
determine the
total amount of Realized Losses, if any, that resulted from any
Cash
Liquidation, Servicing Modification, Debt Service Reduction,
Deficient Valuation
or REO Disposition that occurred during the related Prepayment
Period or, in the
case of a Servicing Modification that constitutes a reduction of
the interest
rate on a Mortgage Loan, the amount of the reduction in the
interest portion of
the Monthly Payment due during the related Due Period. The
amount of each
Realized Loss shall be evidenced by an Officers' Certificate.
All Realized
Losses on Mortgage Loans in a Loan Group, other than Excess
Special Hazard
Losses, Extraordinary Losses, Excess Bankruptcy Losses or Excess
Fraud Losses,
shall be allocated to the Certificates in the related
Certificate Group as
follows: first, to the Class I-B-3 Certificates or the Class
II-B-3
Certificates, as applicable, until the Certificate Principal
Balance thereof has
been reduced to zero; second, to the Class I-B-2 Certificates or
the Class
II-B-2 Certificates, as applicable, until the Certificate
Principal Balance
thereof has been reduced to zero; third, to the Class I-B-1
Certificates or the
Class II-B-1 Certificates, as applicable, until the Certificate
Principal
Balance thereof has been reduced to zero; fourth, to the Class
I-M-3
Certificates or the Class II-M-3 Certificates, as applicable,
until the
Certificate Principal Balance thereof has been reduced to zero;
fifth, to the
Class I-M-2 Certificates or the Class II-M-2 Certificates, as
applicable, until
the Certificate Principal Balance thereof has been reduced to
zero; sixth, to
the Class I-M-1 Certificates or the Class II-M-1 Certificates,
as applicable,
until the Certificate Principal Balance thereof has been reduced
to zero; and,
thereafter, if any such Realized Loss is on a Discount Mortgage
Loan, to the
related Class A-P Certificates in an amount equal to the related
Discount
Fraction of the principal portion of the Realized Loss until the
Certificate
Principal Balance of such Class A-P Certificates has been
reduced to zero, and
the remainder of such Realized Losses on the Discount Mortgage
Loans in the
related Loan Group and the entire amount of such Realized Losses
on Non-Discount
Mortgage Loans in the related Loan Group will be allocated among
the Group I
Senior Certificates, other than the Class I-A-P Certificates (in
the case of a
Group I Loan), or to the Group II Senior Certificates, other
than the Class
II-A-P Certificates (in the case of a Group II Loan) on a pro
rata basis, as
described below.
The principal portion of any Excess Bankruptcy Losses and
Extraordinary
Losses on Discount Mortgage Loans will be allocated to the
related Class A-P
Certificates in an amount equal to the related Discount Fraction
thereof. The
Class I-A Percentage or Class II-A Percentage (as applicable) of
the remainder
of the principal portion of such losses on Discount Mortgage
Loans and the Class
44
<PAGE>
I-A Percentage or Class II-A Percentage (as applicable) of the
entire amount of
the principal portion of such losses on Non-Discount Mortgage
Loans will be
allocated to the Group I Senior Certificates, other than the
Class I-A-P , Class
I-A-V and Class I-A-4 Certificates, on a pro rata basis (in the
case of a
Realized Loss on a Group I Loan), or to the Group II Senior
Certificates, other
than the Class II-A-P Certificates and Class II-A-V
Certificates, on a pro rata
basis (in the case of a Realized Loss on a Group II Loan). The
remainder of the
principal portion of such losses on Discount Mortgage Loans and
Non-Discount
Mortgage Loans will be allocated to the Class M Certificates in
the related
Certificate Group and Class B Certificates in the related
Certificate Group on a
pro rata basis. The interest portion of such losses will be
allocated to all of
the Certificates in the related Certificate Group on a pro rata
basis based on
the Accrued Certificate Interest thereon payable from the
related Loan Group in
respect of the related Distribution Date.
Any Excess Special Hazard Losses and Excess Fraud Losses will
be
allocated as follows: (a) in the case of a Group II Loan, first,
to the Class
I-B-3 Certificates, second, to the Class I-B-2 Certificates, and
third, to the
Class I-B-1 Certificates, and (b) in the case of a Group I Loan,
first, to the
Class II-B-3 Certificates, second, to the Class II-B-2
Certificates; and third,
to the Class II-B-1 Certificates; provided, however, that such
losses will be so
allocated pursuant to this provision only to the extent of (i)
the remaining
Special Hazard Amount or Fraud Loss Amount, as the case may be,
for the
Unaffected Loan Group and (ii) the aggregate Certificate
Principal Balance of
the applicable Class B Certificates, and thereafter shall be
allocated pro rata
among all the Certificates related to the Affected Loan Group;
and provided
further, that the related Discount Fraction of the principal
portion of such
losses on Discount Mortgage Loans in the Affected Loan Group
will be allocated
to the Class A-P Certificates in the related Certificate Group.
Allocations of
Excess Special Hazard Losses and Excess Fraud Losses will be
made to the
applicable Class B Certificateholders by allocating the Diverted
Amount from the
Available Distribution Amount of the Unaffected Loan Group to
the Available
Distribution Amount of the Affected Loan Group. For the purpose
of distributions
to the Certificateholders, Diverted Amounts will be treated in
the same manner
as Principal Prepayments in Full on the Mortgage Loans in the
Affected Loan
Group. The Certificate Principal Balance of the Class B
Certificateholders
related to the Unaffected Loan Group will be reduced by the
amount of such
Diverted Amounts on the Distribution Date that such amounts are
included in the
Available Distribution Amount of the Affected Loan Group.
As used herein, an allocation of a Realized Loss on a "pro rata
basis"
among two or more specified Classes of Certificates means an
allocation on a pro
rata basis, among the various Classes so specified, to each such
Class of
Certificates on the basis of their then outstanding Certificate
Principal
Balances prior to giving effect to distributions to be made on
such Distribution
Date in the case of the principal portion of a Realized Loss or
based on the
Accrued Certificate Interest thereon payable from the related
Loan Group in
respect of such Distribution Date and derived from the related
Loan Group
(without regard to any Compensating Interest allocated to the
Available
Distribution Amount of such Loan Group for such Distribution
Date) in the case
of an interest portion of a Realized Loss. Except as provided in
the following
sentence, any allocation of the principal portion of Realized
Losses (other than
Debt Service Reductions) to a Class of Certificates shall be
made by reducing
the Certificate Principal Balance thereof by the amount so
allocated, which
allocation shall be deemed to have occurred on such Distribution
Date; provided
that no such reduction shall reduce the aggregate Certificate
Principal Balance
of the Certificates in any Certificate Group below the aggregate
Stated
Principal Balance of the Mortgage Loans in the related Loan
Group. Any
allocation of the principal portion of Realized Losses (other
than Debt Service
Reductions) to the related Subordinate Certificates then
outstanding with the
Lowest Priority shall be made by operation of the definition of
"Certificate
Principal Balance" and by operation of the provisions of Section
4.02(a).
Allocations of the interest portions of Realized Losses (other
than any interest
45
<PAGE>
rate reduction resulting from a Servicing Modification) shall be
made in
proportion to the amount of Accrued Certificate Interest and by
operation of the
definition of "Accrued Certificate Interest" and by operation of
the provisions
of Section 4.02(a). Allocations of the interest portion of a
Realized Loss
resulting from an interest rate reduction in connection with a
Servicing
Modification shall be made by operation of the provisions of
Section 4.02(a).
Allocations of the principal portion of Debt Service Reductions
shall be made by
operation of the provisions of Section 4.02(a). All Realized
Losses and all
other losses allocated to a Class of Certificates hereunder will
be allocated
among the Certificates of such Class in proportion to the
Percentage Interests
evidenced thereby; provided that if any Subclasses of the Class
A-V Certificates
have been issued pursuant to Section 5.01(c), such Realized
Losses and other
losses allocated to the Class A-V Certificates shall be
allocated among such
Subclasses in proportion to the respective amounts of Accrued
Certificate
Interest payable on such Distribution Date that would have
resulted absent such
reductions.
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property.
(See Section 4.06 of the Standard Terms)
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
(See Section 4.07
of the Standard Terms)
Section 4.08. Surety Bond. (See Section 4.08 of the Standard
Terms)
46
<PAGE>
ARTICLE V
THE CERTIFICATES
(SEE ARTICLE V OF THE STANDARD TERMS)
47
<PAGE>
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
(SEE ARTICLE VI OF THE STANDARD TERMS)
48
<PAGE>
ARTICLE VII
DEFAULT
(SEE ARTICLE VII OF THE STANDARD TERMS)
49
<PAGE>
ARTICLE VIII
CONCERNING THE TRUSTEE
(SEE ARTICLE VIII OF THE STANDARD TERMS)
50
<PAGE>
ARTICLE IX
TERMINATION
(SEE ARTICLE IX OF THE STANDARD TERMS)
51
<PAGE>
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration. (See Section 10.01 of the
Standard Terms)
Section 10.02. Master Servicer; REMIC Administrator and Trustee
Indemnification.
(See Section 10.02 of the Standard Terms)
Section 10.03. Designation of REMICs.
The REMIC Administrator shall make an election to treat the
entire
segregated pool of assets described in the definition of REMIC
I, and subject to
this Agreement (including the Group I Loans) as a REMIC ("REMIC
I") for federal
income tax purposes. The REMIC Administrator shall make an
election to treat the
entire segregated pool of assets described in the definition of
REMIC II, and
subject to this Agreement (including the Group II Loans) as a
REMIC ("REMIC II")
for federal income tax purposes. The REMIC Administrator shall
make an election
to treat the entire segregated pool of assets comprised of the
Uncertificated
REMIC I Regular Interests and Uncertificated REMIC II Regular
Interests as a
REMIC ("REMIC III") for federal income tax purposes.
The Uncertificated REMIC I Regular Interests will be "regular
interests"
in REMIC I and the Class R-I Certificates will be the sole class
of "residual
interests" in REMIC I for purposes of the REMIC Provisions (as
defined herein)
under the federal income tax law. The Uncertificated REMIC II
Regular Interests
will be "regular interests" in REMIC II and the Class R-II
Certificates will be
the sole class of "residual interests" in REMIC II for purposes
of the REMIC
Provisions (as defined herein) under the federal income tax
law.
The Class I-A-1, Class I-A-2, Class I-A-3, Class I-A-4, Class
I-A-5,
Class II-A-1, Class I-A-P, Class II-A-P, Class I-M-1, Class
I-M-2, Class I-M-3,
Class I-B-1, Class I-B-2, Class I-B-3, Class II-M-1, Class
II-M-2, Class II-M-3,
Class II-B-1, Class II-B-2 and Class II-B-3 Certificates and the
Uncertificated
REMIC III Regular Interests Z1 and the Uncertificated REMIC III
Regular
Interests Z2, the rights in and to which will be represented by
the related
Class A-V Certificates, will be "regular interests" in REMIC
III, and the Class
R-III Certificates will be the sole class of "residual
interests" therein for
purposes of the REMIC Provisions (as defined herein) under
federal income tax
law. On and after the date of issuance of any Subclass of
related Class A-V
Certificates pursuant to Section 5.01(c) of the Standard Terms,
any such
Subclass will represent the related Uncertificated REMIC III
Regular Interest or
Interests Z1 or Interests Z2 specified by the initial Holder of
the related
Class A-V Certificates pursuant to said Section.
Section 10.04. Distributions on the Uncertificated REMIC I and
REMIC II Regular
Interests.
(a)On each Distribution Date the Trustee shall be deemed to
distribute
to itself, as the holder of the Uncertificated REMIC I Regular
Interests and
Uncertificated REMIC II Regular Interests, the Uncertificated
REMIC I Regular
Interest Distribution Amounts and the Uncertificated REMIC II
Regular Interest
Distribution Amounts, respectively, in the following order of
priority to the
extent of the related Available Distribution Amount, as reduced
by distributions
made to the Class R-I Certificates or the Class R-II
Certificates, as
applicable, pursuant to Section 4.02(a):
52
<PAGE>
(i) Uncertificated Accrued Interest on the Uncertificated REMIC
I
Regular Interests or the Uncertificated REMIC II Regular
Interests, as
applicable, for such Distribution Date, plus any Uncertificated
Accrued
Interest thereon remaining unpaid from any previous Distribution
Date;
and
(ii) In accordance with the priority set forth in Section
10.04(b), an amount equal to the sum of the amounts in respect
of
principal distributable on each Class of Certificates (other
than the
Class R-I Certificates and the Class R-II Certificates) under
Section
4.02(a), as allocated thereto pursuant to Section 4.02(b).
(b)The amount described in Section 10.04(a)(ii) in respect of
the
Uncertificated REMIC I Regular Interest Distribution Amounts
shall be deemed
distributed to (i) Uncertificated REMIC I Regular Interest W,
(ii)
Uncertificated REMIC I Regular Interest X and (iii)
Uncertificated REMIC I
Regular Interest Y with the amount to be distributed allocated
among such
interests in accordance with the priority assigned to each
Related Class of
Certificates (other than the Class R-I Certificates),
respectively, under
Section 4.02(b) until the Uncertificated Principal Balance of
each such interest
is reduced to zero. The amount described in Section 10.04(a)(ii)
in respect of
the Uncertificated REMIC II Regular Interest Distribution
Amounts shall be
deemed distributed to (i) Uncertificated REMIC II Regular
Interest W, (ii)
Uncertificated REMIC II Regular Interest X and (iii)
Uncertificated REMIC II
Regular Interest Y with the amount to be distributed allocated
among such
interests in accordance with the priority assigned to each
Related Class of
Certificates (other than the Class R-II Certificates),
respectively, under
Section 4.02(b) until the Uncertificated Principal Balance of
each such interest
is reduced to zero.
(c)The portion of the Uncertificated REMIC I Regular
Interest
Distribution Amounts described in Section 10.04(a)(ii) shall be
deemed
distributed by REMIC I to REMIC III or REMIC II to REMIC III, as
the case may
be, in accordance with the priority assigned to the REMIC III
Certificates
relative to that assigned to the REMIC I Certificates and the
REMIC II
Certificates under Section 4.02(b).
(d)In determining from time to time the Uncertificated REMIC I
Regular
Interest Distribution Amounts, the Uncertificated REMIC II
Regular Interest
Distribution Amounts and Uncertificated REMIC III Regular
Interest Distribution
Amounts:
(i) Realized Losses allocated to the Class A-V Certificates
under
Section 4.05 shall be deemed allocated to the Uncertificated
REMIC III
Regular Interests Z1, in the case of the Class I-A-V
Certificates, and
the Uncertificated REMIC III Regular Interests Z2, in the case
of the
Class I-A-V Certificates, pro rata according to the respective
amounts
of Uncertificated Accrued Interest that would have accrued on
such
Uncertificated REMIC III Regular Interests Z1 or Z2 for the
Distribution
Date for which such allocation is being made in the absence of
such
allocation;
53
<PAGE>
(ii) Realized Losses allocated to the Class I-A-1, Class
I-A-2,
Class I-A-3, Class I-A-4 and Class I-A-1 Certificates under
Section 4.05
shall be deemed allocated to Uncertificated REMIC I Regular
Interest W;
(iii) Realized Losses allocated to the Class II-A-1
Certificates
under Section 4.05 shall be deemed allocated to Uncertificated
REMIC II
Regular Interest W;
(iv) Realized Losses allocated to the Class I-A-P
Certificates
under Section 4.05 shall be deemed allocated to Uncertificated
REMIC I
Regular Interest X;
(v) Realized Losses allocated to the Class II-A-P
Certificates
under Section 4.05 shall be deemed allocated to Uncertificated
REMIC II
Regular Interest X;
(vi) Realized Losses allocated to the Class I-M-1, Class
I-M-2,
Class I-M-3, Class I-B-1, Class I-B-2, Class I-B-3 and Class
R-I
Certificates under Section 4.05 shall be deemed allocated to
Uncertificated REMIC I Regular Interest Y;
(vii) Realized Losses allocated to the Class II-M-1, Class
II-M-2, Class II-M-3, Class II-B-1, Class II-B-2, Class II-B-3
and Class
R-II Certificates under Section 4.05 shall be deemed allocated
to
Uncertificated REMIC II Regular Interest Y;
(viii) Realized Losses allocated to the Uncertificated REMIC
II
Regular Interests Z1 under clause (i), above, shall be deemed
allocated,
in each case, to the related Uncertificated REMIC I Regular
Interest Z;
and
(ix) Realized Losses allocated to the Uncertificated REMIC
II
Regular Interests Z2 under clause (i), above, shall be deemed
allocated,
in each case, to the related Uncertificated REMIC II Regular
Interest Z.
(e)On each Distribution Date the Trustee shall be deemed to
distribute
from REMIC III, in the priority set forth in Sections 4.02(a)
and (b), to the
Holders of each Class of Certificates (other than the Class R-I
Certificates and
the Class R-II Certificates) the amounts distributable thereon
from the
Uncertificated REMIC I Regular Interest Distribution Amounts and
the
Uncertificated REMIC II Regular Interest Distribution Amounts
deemed to have
been received by REMIC III from REMIC I and REMIC II under this
Section 10.04.
The amounts deemed distributed hereunder with respect to the
Class I-A-V
Certificates and the Class II-A-V Certificates shall be deemed
to have been
distributed in respect of the Uncertificated REMIC III Regular
Interests Z1 and
the Uncertificated REMIC III Regular Interests Z2, respectively,
in accordance
with their respective Uncertificated REMIC III Regular Interest
Distribution
Amounts, as such Uncertificated REMIC III Regular Interests Z1
and the
Uncertificated REMIC III Regular Interests Z2 comprise the Class
I-A-V
Certificates and the Class II-A-V Certificates,
respectively.
(f)Notwithstanding the deemed distributions on the
Uncertificated REMIC
I Regular Interests and the Uncertificated REMIC II Regular
Interests described
in this Section 10.04, distributions of funds from the
Certificate Account shall
be made only in accordance with Section 4.02.
54
<PAGE>
Section 10.05. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the
Trustee or any Paying Agent, as applicable, shall comply with
all federal
withholding requirements respecting payments to
Certificateholders, including
interest or original issue discount payments or advances thereof
that the
Trustee or any Paying Agent, as applicable, reasonably believes
are applicable
under the Code. The consent of Certificateholders shall not be
required for such
withholding. In the event the Trustee or any Paying Agent, as
applicable, does
withhold any amount from interest or original issue discount
payments or
advances thereof to any Certificateholder pursuant to federal
withholding
requirements, the Trustee or any Paying Agent, as applicable,
shall indicate the
amount withheld to such Certificateholder pursuant to the terms
of such
requirements.
55
<PAGE>
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment. (See Section 11.01 of the Standard
Terms)
Section 11.02. Recordation of Agreement; Counterparts. (See
Section 11.02 of the
Standard Terms)
Section 11.03. Limitation on Rights of Certificateholders. (See
Section 11.03 of
the Standard Terms)
Section 11.04. Governing Law. (See Section 11.04 of the Standard
Terms)
Section 11.05. Notices. All demands and notices hereunder shall
be in writing
and shall be deemed to have been duly given if personally
delivered at or mailed
by registered mail, postage prepaid (except for notices to the
Trustee which
shall be deemed to have been duly given only when received), to
the appropriate
address for each recipient listed in the table below or, in each
case, such
other address as may hereafter be furnished in writing to the
Master Servicer,
the Trustee and the Company, as applicable:
-------------------------------
-----------------------------------------------
RECIPIENT ADDRESS
-------------------------------
-----------------------------------------------
-------------------------------
-----------------------------------------------
Company 8400 Normandale Lake Boulevard
Suite 250, Minneapolis, Minnesota 55437,
Attention: President
-------------------------------
-----------------------------------------------
-------------------------------
-----------------------------------------------
Master Servicer 2255 N. Ontario Street, Suite 400
Burbank, California 91504-2130,
Attention: Managing Director/Master Servicing
-------------------------------
-----------------------------------------------
-------------------------------
-----------------------------------------------
Trustee Corporate Trust Office
1761 East St. Andrew Place
Santa Ana, California 92705-4934,
Attention: Residential Accredit Loans, Inc.
Series 2004-QS16
The Trustee designates its offices located at
c/o DTC Transfer Services, 55 Water Street,
Jeanette Street Park Entrance, New York, New
York 10041, for the purposes of Section 8.12
of the Standard Terms
-------------------------------
-----------------------------------------------
-------------------------------
-----------------------------------------------
Moody's Investors Service, Inc. 99 Church Street, 4th Floor
New York, New York 10004
-------------------------------
-----------------------------------------------
-------------------------------
-----------------------------------------------
Fitch Ratings One State Street Plaza
New York, New York 10041
-------------------------------
-----------------------------------------------
56
<PAGE>
Any notice required or permitted to be mailed to a
Certificateholder shall be
given by first class mail, postage prepaid, at the address of
such holder as
shown in the Certificate Register. Any notice so mailed within
the time
prescribed in this Agreement shall be conclusively presumed to
have been duly
given, whether or not the Certificateholder receives such
notice.
Section 11.06. Required Notices to Rating Agency and
Subservicer. (See Section
11.06 of the Standard Terms)
Section 11.07. Severability of Provisions. (See Section 11.07 of
the Standard
Terms)
Section 11.08. Supplemental Provisions for Resecuritization.
(See Section 11.08
of the Standard Terms)
Section 11.09. Allocation of Voting Rights.
95.5% of all of the Voting Rights shall be allocated among
Holders of Certificates, other than the Class A-V, Class I-A-4
and Class R
Certificates, in proportion to the outstanding Certificate
Principal Balances of
their respective Certificates; 1.0% of all Voting Rights shall
be allocated
among the Holders of each Class of Class A-V Certificates, in
accordance with
their respective Percentage Interests; 1.0% of all Voting Rights
shall be
allocated among the Holders of the Class I-A-4 Certificates, in
accordance with
their respective Percentage Interests; and 0.5% of all Voting
Rights shall be
allocated among the Holders of each Class of Class R
Certificates, in accordance
with their respective Percentage Interests.
Section 11.10. No Petition.
The Depositor, Master Servicer and the Trustee, by entering
into
this Agreement, and each Certificateholder, by accepting a
Certificate, hereby
covenant and agree that they will not at any time institute
against the Trust
Fund, or join in any institution against the Trust Fund of, any
bankruptcy
proceedings under any United States federal or state bankruptcy
or similar law
in connection with any obligation with respect to the
Certificates or this
Agreement.
57
<PAGE>
IN WITNESS WHEREOF, the Company, the Master Servicer and the
Trustee
have caused their names to be signed hereto by their respective
officers
thereunto duly authorized and their respective seals, duly
attested, to be
hereunto affixed, all as of the day and year first above
written.
RESIDENTIAL ACCREDIT LOANS, INC.
[Seal]
By: /s/ Joseph Orning
Name: Joseph Orning
Title: Vice President
Attest: /s/ Jeff Baines
Name: Jeff Baines
Title: Vice President
RESIDENTIAL FUNDING CORPORATION
[Seal]
By: /s/ Jeff Baines
Name: Jeff Baines
Title: Associate
Attest:/s/ Joseph Orning
Name: Joseph Orning
Title: Associate
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee
[Seal]
By: /s/ Brent Hoyler
Name: Brent Hoyler
Title: Associate
By: /s/ Barbara Campbell
Name: Barbara Campbell
Title: Assistant Vice President
Attest:/s/ Ronaldo Reyes
Name: Ronaldo Reyes
Title: Assistant Vice President
<PAGE>
STATE OF MINNESOTA
)
) ss.:
COUNTY OF HENNEPIN )
On the 29th day of December, 2004 before me, a notary public
in
and for said State, personally appeared Joseph Orning, known to
me to be a Vice
President of Residential Accredit Loans, Inc., one of the
corporations that
executed the within instrument, and also known to me to be the
person who
executed it on behalf of said corporation, and acknowledged to
me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my
official seal the day and year in this certificate first above
written.
/s/ Heidi L. Peterson
Notary Public
[Notarial Seal]
<PAGE>
STATE OF MINNESOTA
)
) ss.:
COUNTY OF HENNEPIN )
On the 29th day of December, 2004 before me, a notary public
in
and for said State, personally appeared Jeff Baines, known to me
to be a(n)
Associate of Residential Funding Corporation, one of the
corporations that
executed the within instrument, and also known to me to be the
person who
executed it on behalf of said corporation, and acknowledged to
me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my
official seal the day and year in this certificate first above
written.
/s/ Heidi L. Peterson
Notary Public
[Notarial Seal]
<PAGE>
STATE OF CALIFORNIA
)
) ss.:
COUNTY OF ORANGE )
On the 29th day of December, 2004 before me, a notary public
in
and for said State, personally appeared Brent Hoyler, known to
me to be a(n)
Associate of Deutsche Bank Trust Company Americas, the New York
banking
corporation that executed the within instrument, and also known
to me to be the
person who executed it on behalf of said banking corporation and
acknowledged to
me that such banking corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my
official seal the day and year in this certificate first above
written.
/s/ Amy Stoddard
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of December, 2004 before me, a notary public
in
and for said State, personally appeared Barbara Campbell, known
to me to be a(n)
Assistant Vice President of Deutsche Bank Trust Company
Americas, the New York
banking corporation that executed the within instrument, and
also known to me to
be the person who executed it on behalf of said banking
corporation and
acknowledged to me that such banking corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my
official seal the day and year in this certificate first above
written.
/s/ Amy Stoddard
Notary Public
[Notarial Seal]
<PAGE>
EXHIBIT ONE
MORTGAGE LOAN SCHEDULE
<PAGE>
EXHIBIT TWO
SCHEDULE OF DISCOUNT FRACTIONS
<PAGE>
EXHIBIT THREE
INFORMATION TO BE INCLUDED IN
MONTHLY DISTRIBUTION DATE STATEMENT
(i) (a) the amount of such distribution to the
Certificateholders of such
Class applied to reduce the Certificate Principal Balance
thereof, and
(b) the aggregate amount included therein representing
Principal
Prepayments;
(ii) the amount of such distribution to Holders of such Class of
Certificates
allocable to interest;
(iii) if the distribution to the Holders of such Class of
Certificates is less
than the full amount that would be distributable to such Holders
if
there were sufficient funds available therefor, the amount of
the
shortfall;
(iv) the amount of any Advance by the Master Servicer pursuant
to Section
4.04;
(v) the number and Pool Stated Principal Balance of the Mortgage
Loans after
giving effect to the distribution of principal on such
Distribution
Date, in the aggregate and for each Loan Group;
(vi) the aggregate Certificate Principal Balance of each Class
of
Certificates and each of the Senior Percentage and Subordinate
Class
Percentage, after giving effect to the amounts distributed on
such
Distribution Date, separately identifying any reduction thereof
due to
Realized Losses other than pursuant to an actual distribution
of
principal;
(vii) the related Subordinate Principal Distribution Amount and
Prepayment
Distribution Percentage, if applicable;
(viii) for both Loan Groups together and for each Loan Group
separately, on the
basis of the most recent reports furnished to it by
Subservicers, (a)
the number and aggregate principal balances of Mortgage Loans
that are
Delinquent (1) 30-59 days, (2) 60-89 days and (3) 90 or more
days and
the number and aggregate principal balance of Mortgage Loans
that are in
foreclosure, (b) the number and aggregate principal balances
of
Reportable Modified Mortgage Loans that are Delinquent (1) 30-59
days,
(2) 60-89 days and (3) 90 or more days and the number and
aggregate
principal balance of Reportable Modified Mortgage Loans that are
in
foreclosure and are REO Property, indicating in each case
capitalized
Mortgage Loans, other Servicing Modifications and totals, and
(c) for
all Reportable Modified Mortgage Loans, the number and aggregate
Stated
Principal Balance of Reportable Modified Mortgage Loans that
have been
liquidated, the subject of pay-offs and that have been
repurchased by
the Master Servicer or Seller;
(ix) for both Loan Groups together and for each Loan Group
separately, the
number, aggregate principal balance and book value of any
REO
Properties;
(x) the aggregate Accrued Certificate Interest remaining unpaid,
if any, for
each Class of Certificates, after giving effect to the
distribution made
on such Distribution Date;
<PAGE>
(xi) the Special Hazard Amount, Fraud Loss Amount and Bankruptcy
Amount as of
the close of business on such Distribution Date and a
description of any
change in the calculation of such amounts;
(xii) the weighted average Pool Strip Rate for such Distribution
Date and the
Pass-Through Rate with respect to the Class A-V Certificates and
each
Subclass, if any, thereof;
(xiii) the occurrence of the Credit Support Depletion Date;
(xiv) the related Senior Accelerated Distribution Percentage
applicable to
such distribution;
(xv) the related Senior Percentage for such Distribution
Date;
(xvi) for both Loan Groups together and for each Loan Group
separately, the
aggregate amount of Realized Losses for such Distribution
Date;
(xvii) for both Loan Groups together and for each Loan Group
separately, the
aggregate amount of any recoveries on previously foreclosed
loans from
Sellers due to a breach of a representation or warranty assigned
to the
Trustee pursuant to Section 2.04;
(xviii) for both Loan Groups together and for each Loan Group
separately, the
weighted average remaining term to maturity of the Mortgage
Loans after
giving effect to the amounts distributed on such Distribution
Date;
(xix) the Notional Amount with respect to each Class of Interest
Only
Certificates; and
(xx) for both Loan Groups together and for each Loan Group
separately, the
weighted average Mortgage Rates of the Mortgage Loans after
giving
effect to the amounts distributed on such Distribution Date.
In the case of information furnished pursuant to clauses (i) and
(ii)
above, the amounts shall be expressed as a dollar amount per
Certificate with a
$1,000 denomination.
The Trustee's internet website, and assistance in using the
website, can
be obtained by calling the Trustee's Shareholder Relations desk
at (800)
735-7777. To receive this statement via first class mail,
telephone the Trustee
at (800) 735-7777.
<PAGE>
EXHIBIT FOUR
STANDARD TERMS OF POOLING AND SERVICING
AGREEMENT DATED AS OF August 1, 2004
===============================================================================
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2004
Residential Accredit Loans, Inc.
Mortgage Asset-Backed Pass-Through Certificates
===============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
-ii-
<S> <C>
Article I
DEFINITIONS...............................................................2
Section 1.01.
Definitions...........................................................2
Section 1.02. Use of Words and
Phrases.............................................32
Article II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES..........33
Section 2.01. Conveyance of Mortgage
Loans.........................................33
Section 2.02. Acceptance by
Trustee................................................39
Section 2.03. Representations, Warranties and Covenants of the
Master
Servicer
and the
Company.............................................................40
Section 2.04. Representations and Warranties of
Sellers............................42
Section 2.05. Execution and Authentication of
Certificates/Issuance of
Certificates Evidencing Interests in REMIC I
Certificates...................44
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC II
Regular
Interests; Acceptance by the
Trustee........................................44
Section 2.07. Issuance of Certificates Evidencing Interests in
REMIC II............44
Section 2.08. Purposes and Powers of the
Trust.....................................44
Article III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS...........................45
Section 3.01. Master Servicer to Act as
Servicer...................................45
Section 3.02. Subservicing Agreements Between Master Servicer
and
Subservicers; Enforcement of Subservicers' and Sellers'
Obligations.........46
Section 3.03. Successor
Subservicers...............................................47
Section 3.04. Liability of the Master
Servicer.....................................48
Section 3.05. No Contractual Relationship Between Subservicer
and Trustee or
Certificateholders..........................................................48
Section 3.06. Assumption or Termination of Subservicing
Agreements by Trustee........
48
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to
Custodial
Account...........................................................49
Section 3.08. Subservicing Accounts; Servicing
Accounts............................51
Section 3.09. Access to Certain Documentation and Information
Regarding the
Mortgage
Loans..............................................................53
Section 3.10. Permitted Withdrawals from the Custodial
Account.....................53
i
<PAGE>
Section 3.11. Maintenance of the Primary Insurance Policies;
Collections
Thereunder..................................................................55
Section 3.12. Maintenance of Fire Insurance and Omissions and
Fidelity
Coverage....................................................................56
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption
and
Modification Agreements; Certain
Assignments................................57
Section 3.14. Realization Upon Defaulted Mortgage
Loans............................59
Section 3.15. Trustee to Cooperate; Release of Mortgage
Files......................63
Section 3.16. Servicing and Other Compensation; Compensating
Interest..............64
Section 3.17. Reports to the Trustee and the
Company...............................65
Section 3.18. Annual Statement as to
Compliance....................................65
Section 3.19. Annual Independent Public Accountants' Servicing
Report..............66
Section 3.20. Rights of the Company in Respect of the Master
Servicer..............66
Section 3.21. Administration of Buydown
Funds......................................67
Section 3.22 Advance
Facility.....................................................67
Article IV PAYMENTS TO
CERTIFICATEHOLDERS...........................................68
Section 4.01. Certificate
Account..................................................68
Section 4.02.
Distributions........................................................68
Section 4.03. Statements to Certificateholders; Statements to
Rating
Agencies; Exchange Act
Reporting............................................68
Section 4.04. Distribution of Reports to the Trustee and the
Company;
Advances by the Master
Servicer.............................................70
Section 4.05. Allocation of Realized
Losses........................................72
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property........72
Section 4.07. Optional Purchase of Defaulted Mortgage
Loans........................72
Section 4.08. Surety
Bond..........................................................72
Article V THE
CERTIFICATES.........................................................74
Section 5.01. The
Certificates.....................................................74
Section 5.02. Registration of Transfer and Exchange of
Certificates................76
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates....................81
Section 5.04. Persons Deemed
Owners................................................82
ii
<PAGE>
Section 5.05. Appointment of Paying
Agent..........................................82
Section 5.06. U.S.A. Patriot Act
Compliance........................................82
Article VI THE COMPANY AND THE MASTER
SERVICER......................................83
Section 6.01. Respective Liabilities of the Company and the
Master Servicer........83
Section 6.02. Merger or Consolidation of the Company or the
Master Servicer;
Assignment of Rights and Delegation of Duties by Master
Servicer............83
Section 6.03. Limitation on Liability of the Company, the Master
Servicer
and
Others....................................................................
84
Section 6.04. Company and Master Servicer Not to
Resign............................85
Article VII
DEFAULT..................................................................86
Section 7.01. Events of
Default....................................................86
Section 7.02. Trustee or Company to Act; Appointment of
Successor..................88
Section 7.03. Notification to
Certificateholders...................................89
Section 7.04. Waiver of Events of
Default..........................................89
Article VIII CONCERNING THE
TRUSTEE...................................................90
Section 8.01. Duties of
Trustee....................................................90
Section 8.02. Certain Matters Affecting the
Trustee................................91
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loans................93
Section 8.04. Trustee May Own
Certificates.........................................93
Section 8.05. Master Servicer to Pay Trustee's Fees and
Expenses;
Indemnification.............................................................93
Section 8.06. Eligibility Requirements for
Trustee.................................94
Section 8.07. Resignation and Removal of the
Trustee...............................95
Section 8.08. Successor
Trustee....................................................95
Section 8.09. Merger or Consolidation of
Trustee...................................96
Section 8.10. Appointment of Co-Trustee or Separate
Trustee........................96
Section 8.11. Appointment of
Custodians............................................97
Section 8.12. Appointment of Office or
Agency......................................98
Article IX TERMINATION OR OPTIONAL PURCHASE OF ALL
CERTIFICATES.....................99
Section 9.01. Optional Purchase by the Master Servicer of All
Certificates;
Termination Upon Purchase by the Master Servicer or Liquidation
of All
Mortgage
Loans..............................................................99
iii
<PAGE>
Section 9.02. Additional Termination
Requirements.................................102
Section 9.03. Termination of Multiple
REMICs......................................103
Article X REMIC
PROVISIONS........................................................104
Section 10.01.REMIC
Administration................................................104
Section 10.02.Master Servicer, REMIC Administrator and Trustee
Indemnification....107
Section 10.03.Designation of
REMIC(s).............................................108
Article XI MISCELLANEOUS
PROVISIONS................................................109
Section
11.01.Amendment...........................................................109
Section 11.02.Recordation of Agreement;
Counterparts..............................111
Section 11.03.Limitation on Rights of
Certificateholders..........................112
Section 11.04.Governing
Law.......................................................112
Section
11.05.Notices.............................................................113
Section 11.06.Required Notices to Rating Agency and
Subservicer...................114
Section 11.07.Severability of
Provisions..........................................114
Section 11.08.Supplemental Provisions for
Resecuritization........................114
Section 11.09.Allocation of Voting
Rights.........................................114
Section 11.10.No
Petition.........................................................114
iv
<PAGE>
EXHIBITS
Exhibit A: Form of Class A Certificate
Exhibit B: Form of Class M Certificate
Exhibit C: Form of Class B Certificate
Exhibit D: Form of Class R Certificate
Exhibit E: Form of Seller/Servicer Contract
Exhibit F: Forms of Request for Release
Exhibit G-1: Form of Transfer Affidavit and Agreement
Exhibit G-2: Form of Transferor Certificate
Exhibit H: Form of Investor Representation Letter
Exhibit I: Form of Transferor Representation Letter
Exhibit J: Form of Rule 144A Investment Representation
Letter
Exhibit K: Text of Amendment to Pooling and Servicing Agreement
Pursuant to
Section 11.01(e) for a Limited Guaranty
Exhibit L: Form of Limited Guaranty
Exhibit M: Form of Lender Certification for Assignment of
Mortgage Loan
Exhibit N: Request for Exchange Form
Exhibit O: Form of Form 10-K Certification
Exhibit P: Form of Back-Up Certification to Form 10-K
Certificate
Exhibit Q: Information to be Provided by the Master Servicer to
the Rating
Agencies Relating to Reportable Modified Mortgage Loans
</TABLE>
v
<PAGE>
This is the Standard Terms of Pooling and Servicing Agreement,
dated as
of August 1, 2004 (the "Standard Terms", and as incorporated by
reference into a
Series Supplement dated as of the Cut-off Date, the "Pooling and
Servicing
Agreement" or "Agreement"), among RESIDENTIAL ACCREDIT LOANS,
INC., as the
company (together with its permitted successors and assigns, the
"Company"),
RESIDENTIAL FUNDING CORPORATION, as master servicer (together
with its permitted
successors and assigns, the "Master Servicer"), and the trustee
named in the
applicable Series Supplement (together with its permitted
successors and
assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell certain mortgage asset-backed
pass-through
certificates (collectively, the "Certificates"), to be issued
under the
Agreement in multiple classes, which in the aggregate will
evidence the entire
beneficial ownership interest in the Mortgage Loans.
In consideration of the mutual agreements herein contained, the
Company,
the Master Servicer and the Trustee agree as follows:
1
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and
phrases, unless
the context otherwise requires, shall have the meanings
specified in this
Article.
Accretion Termination Date: As defined in the Series
Supplement.
Accrual Certificates: As defined in the Series Supplement.
Accrued Certificate Interest: With respect to each Distribution
Date, as
to any Class or Subclass of Certificates (other than any
Principal Only
Certificates), interest accrued during the related Interest
Accrual Period at
the related Pass-Through Rate on the Certificate Principal
Balance or Notional
Amount thereof immediately prior to such Distribution Date.
Accrued Certificate
Interest will be calculated on the basis of a 360-day year,
consisting of twelve
30-day months. In each case Accrued Certificate Interest on any
Class or
Subclass of Certificates will be reduced by the amount of:
(i) Prepayment Interest Shortfalls on all Mortgage Loans or, if
the
Mortgage Pool is comprised of two or more Loan Groups, on
the
Mortgage Loans in the related Loan Group (to the extent not
offset by the Master Servicer with a payment of Compensating
Interest as provided in Section 4.01),
(ii) the interest portion (adjusted to the Net Mortgage Rate (or
the
Modified Net Mortgage Rate in the case of a Modified
Mortgage
Loan)) of Realized Losses on all Mortgage Loans or, if the
Mortgage Pool is comprised of two or more Loan Groups, on
the
Mortgage Loans in the related Loan Group (including Excess
Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy
Losses and Extraordinary Losses) not allocated solely to one
or
more specific Classes of Certificates pursuant to Section
4.05,
(iii) the interest portion of Advances that were (A) previously
made
with respect to a Mortgage Loan or REO Property on all
Mortgage
Loans or, if the Mortgage Pool is comprised of two or more
Loan
Groups, on the Mortgage Loans in the related Loan Group,
which
remained unreimbursed following the Cash Liquidation or REO
Disposition of such Mortgage Loan or REO Property and (B)
made
with respect to delinquencies that were ultimately determined
to
be Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses, and
(iv) any other interest shortfalls not covered by the
subordination
provided by the Class M Certificates and Class B
Certificates,
including interest that is not collectible from the
Mortgagor
pursuant to the Servicemembers Civil Relief Act of 1940, as
amended, or similar legislation or regulations as in effect
from
time to time,
2
<PAGE>
with all such reductions allocated (A) among all of the
Certificates in
proportion to their respective amounts of Accrued Certificate
Interest payable
on such Distribution Date absent such reductions or (B) if the
Mortgage Pool is
comprised of two or more Loan Groups, the related Senior
Percentage of such
reductions among the related Senior Certificates in proportion
to the amounts of
Accrued Certificate Interest payable from the related Loan Group
on such
Distribution Date absent such reductions, with the remainder of
such reductions
allocated among the holders of the Class M Certificates and
Class B Certificates
in proportion to their respective amounts of Accrued Certificate
Interest
payable on such Distribution Date absent such reductions. In
addition to that
portion of the reductions described in the preceding sentence
that are allocated
to any Class of Class B Certificates or any Class of Class M
Certificates,
Accrued Certificate Interest on such Class of Class B
Certificates or such Class
of Class M Certificates will be reduced by the interest portion
(adjusted to the
Net Mortgage Rate) of Realized Losses that are allocated solely
to such Class of
Class B Certificates or such Class of Class M Certificates
pursuant to Section
4.05.
Addendum and Assignment Agreement: The Addendum and
Assignment
Agreement, dated as of January 31, 1995, between MLCC and the
Master Servicer.
Additional Collateral: Any of the following held, in addition to
the
related Mortgaged Property, as security for a Mortgage Loan: (i)
all money,
securities, security entitlements, accounts, general
intangibles, payment
rights, instruments, documents, deposit accounts, certificates
of deposit,
commodities contracts and other investment property and other
property of
whatever kind or description now existing or hereafter acquired
which is pledged
as security for the repayment of such Mortgage Loan, (ii)
third-party
guarantees, and (A) all money, securities, security
entitlements, accounts,
general intangibles, payment rights, instruments, documents,
deposit accounts,
certificates of deposit, commodities contracts and other
investment property and
other property of whatever kind or description now existing or
hereafter
acquired which is pledged as collateral for such guarantee or
(B) any mortgaged
property securing the performance of such guarantee, or (iii)
such other
collateral as may be set forth in the Series Supplement.
Additional Collateral Loan: Each Mortgage Loan that is supported
by
Additional Collateral.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and
any date
of determination, the Mortgage Rate borne by the related
Mortgage Note, less the
rate at which the related Subservicing Fee accrues.
Advance: As to any Mortgage Loan, any advance made by the
Master
Servicer, pursuant to Section 4.04.
Advance Facility: As defined in Section 3.22.
Advance Facility Notice: As defined in Section 3.22.
Advance Facility Trustee: As defined in Section 3.22.
Advancing Person: As defined in Section 3.22.
3
<PAGE>
Advance Reimbursement Amounts: As defined in Section 3.22.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with such first Person.
For the purposes
of this definition, "control" means the power to direct the
management and
policies of such Person, directly or indirectly, whether through
the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Ambac: Ambac Assurance Corporation (formerly known as AMBAC
Indemnity
Corporation).
Amount Held for Future Distribution: As to any Distribution Date
and,
with respect to any Mortgage Pool that is comprised of two or
more Loan Groups,
each Loan Group, the total of the amounts held in the Custodial
Account at the
close of business on the preceding Determination Date on account
of (i)
Liquidation Proceeds, Subsequent Recoveries, Insurance Proceeds,
Curtailments,
Mortgage Loan purchases made pursuant to Section 2.02, 2.03,
2.04 or 4.07 and
Mortgage Loan substitutions made pursuant to Section 2.03 or
2.04 received or
made in the month of such Distribution Date (other than such
Liquidation
Proceeds, Insurance Proceeds and purchases of Mortgage Loans
that the Master
Servicer has deemed to have been received in the preceding month
in accordance
with Section 3.07(b)), and Principal Prepayments in Full made
after the related
Prepayment Period, and (ii) payments which represent early
receipt of scheduled
payments of principal and interest due on a date or dates
subsequent to the
related Due Date.
Appraised Value: As to any Mortgaged Property, the lesser of (i)
the
appraised value of such Mortgaged Property based upon the
appraisal made at the
time of the origination of the related Mortgage Loan, and (ii)
the sales price
of the Mortgaged Property at such time of origination, except in
the case of a
Mortgaged Property securing a refinanced or modified Mortgage
Loan as to which
it is either the appraised value determined above or the
appraised value
determined in an appraisal at the time of refinancing or
modification, as the
case may be.
Assigned Contracts: With respect to any Pledged Asset Loan: the
Credit
Support Pledge Agreement; the Funding and Pledge Agreement,
among GMAC Mortgage
Corporation, National Financial Services Corporation and the
Mortgagor or other
person pledging the related Pledged Assets; the Additional
Collateral Agreement,
between GMAC Mortgage Corporation and the Mortgagor or other
person pledging the
related Pledged Assets; or such other contracts as may be set
forth in the
Series Supplement.
Assignment: An assignment of the Mortgage, notice of transfer
or
equivalent instrument, in recordable form, sufficient under the
laws of the
jurisdiction wherein the related Mortgaged Property is located
to reflect of
record the sale of the Mortgage Loan to the Trustee for the
benefit of
Certificateholders, which assignment, notice of transfer or
equivalent
instrument may be in the form of one or more blanket assignments
covering
Mortgages secured by Mortgaged Properties located in the same
county, if
permitted by law and accompanied by an Opinion of Counsel to
that effect.
4
<PAGE>
Assignment Agreement: The Assignment and Assumption Agreement,
dated the
Closing Date, between Residential Funding and the Company
relating to the
transfer and assignment of the Mortgage Loans.
Assignment of Proprietary Lease: With respect to a Cooperative
Loan, the
assignment of the related Cooperative Lease from the Mortgagor
to the originator
of the Cooperative Loan.
Available Distribution Amount: As to any Distribution Date and,
with
respect to any Mortgage Pool comprised of two or more Loan
Groups, each Loan
Group, an amount equal to (a) the sum of (i) the amount relating
to the Mortgage
Loans on deposit in the Custodial Account as of the close of
business on the
immediately preceding Determination Date, including any
Subsequent Recoveries,
and amounts deposited in the Custodial Account in connection
with the
substitution of Qualified Substitute Mortgage Loans, (ii) the
amount of any
Advance made on the immediately preceding Certificate Account
Deposit Date,
(iii) any amount deposited in the Certificate Account on the
related Certificate
Account Deposit Date pursuant to the second paragraph of Section
3.12(a), (iv)
any amount deposited in the Certificate Account pursuant to
Section 4.07, (v)
any amount that the Master Servicer is not permitted to withdraw
from the
Custodial Account or the Certificate Account pursuant to Section
3.16(e), (vi)
any amount received by the Trustee pursuant to the Surety Bond
in respect of
such Distribution Date and (vii) the proceeds of any Pledged
Assets received by
the Master Servicer, reduced by (b) the sum as of the close of
business on the
immediately preceding Determination Date of (w) aggregate
Foreclosure Profits,
(x) the Amount Held for Future Distribution, and (y) amounts
permitted to be
withdrawn by the Master Servicer from the Custodial Account in
respect of the
Mortgage Loans pursuant to clauses (ii)-(x), inclusive, of
Section 3.10(a). Such
amount shall be determined separately for each Loan Group.
Additionally, with
respect to any Mortgage Pool that is comprised of two or more
Loan Groups, if on
any Distribution Date Compensating Interest provided pursuant to
this Section
3.16(e) is less than Prepayment Interest Shortfalls incurred on
the Mortgage
Loans in connection with Principal Prepayments in Full and
Curtailments made in
the prior calendar month, such Compensating Interest shall be
allocated on such
Distribution Date to the Available Distribution Amount for each
Loan Group on a
pro rata basis in accordance with the respective amounts of such
Prepayment
Interest Shortfalls incurred on the Mortgage Loans in such Loan
Group in respect
of such Distribution Date.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a
Deficient
Valuation or Debt Service Reduction; provided, however, that
neither a Deficient
Valuation nor a Debt Service Reduction shall be deemed a
Bankruptcy Loss
hereunder so long as the Master Servicer has notified the
Trustee in writing
that the Master Servicer is diligently pursuing any remedies
that may exist in
connection with the representations and warranties made
regarding the related
Mortgage Loan and either (A) the related Mortgage Loan is not in
default with
regard to payments due thereunder or (B) delinquent payments of
principal and
interest under the related Mortgage Loan and any premiums on any
applicable
primary hazard insurance policy and any related escrow payments
in respect of
such Mortgage Loan are being advanced on a current basis by the
Master Servicer
or a Subservicer, in either case without giving effect to any
Debt Service
Reduction.
5
<PAGE>
Book-Entry Certificate: Any Certificate registered in the name
of the
Depository or its nominee, and designated as such in the
Preliminary Statement
to the Series Supplement.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a
day on which banking institutions in the State of New York, the
State of
Michigan, the State of California or the State of Illinois (and
such other state
or states in which the Custodial Account or the Certificate
Account are at the
time located) are required or authorized by law or executive
order to be closed.
Buydown Funds: Any amount contributed by the seller of a
Mortgaged
Property, the Company or other source in order to enable the
Mortgagor to reduce
the payments required to be made from the Mortgagor's funds in
the early years
of a Mortgage Loan. Buydown Funds are not part of the Trust Fund
prior to
deposit into the Custodial or Certificate Account.
Buydown Mortgage Loan: Any Mortgage Loan as to which a specified
amount
of interest is paid out of related Buydown Funds in accordance
with a related
buydown agreement.
Capitalization Reimbursement Amount: With respect to any
Distribution
Date and, with respect to any Mortgage Pool comprised of two or
more Loan
Groups, each Loan Group, the amount of Advances or Servicing
Advances that were
added to the Stated Principal Balance of all Mortgage Loans or,
if the Mortgage
Pool is comprised of two or more Loan Groups, on the Mortgage
Loans in the
related Loan Group, during the prior calendar month and
reimbursed to the Master
Servicer or Subservicer on or prior to such Distribution Date
pursuant to
Section 3.10(a)(vii), plus the Capitalization Reimbursement
Shortfall Amount
remaining unreimbursed from any prior Distribution Date and
reimbursed to the
Master Servicer or Subservicer on or prior to such Distribution
Date.
Capitalization Reimbursement Shortfall Amount: With respect to
any
Distribution Date and, with respect to any Mortgage Pool
comprised of two or
more Loan Groups, each Loan Group, the amount, if any, by which
the amount of
Advances or Servicing Advances that were added to the Stated
Principal Balance
of all Mortgage Loans (or, if the Mortgage Pool is comprised of
two or more Loan
Groups, on the Mortgage Loans in the related Loan Group) during
the preceding
calendar month exceeds the amount of principal payments on the
Mortgage Loans
included in the Available Distribution Amount (or, if the
Mortgage Pool is
comprised of two or more Loan Groups, Available Distribution
Amount for the
related Loan Group) for that Distribution Date.
Cash Liquidation: As to any defaulted Mortgage Loan other than
a
Mortgage Loan as to which an REO Acquisition occurred, a
determination by the
Master Servicer that it has received all Insurance Proceeds,
Liquidation
Proceeds and other payments or cash recoveries which the Master
Servicer
reasonably and in good faith expects to be finally recoverable
with respect to
such Mortgage Loan.
Certificate Account Deposit Date: As to any Distribution Date,
the
Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a
Certificate is
registered in the Certificate Register, and, in respect of any
Insured
Certificates, the Certificate Insurer to the extent of
Cumulative Insurance
6
<PAGE>
Payments, except that neither a Disqualified Organization nor a
Non-United
States Person shall be a holder of a Class R Certificate for
purposes hereof
and, solely for the purpose of giving any consent or direction
pursuant to this
Agreement, any Certificate, other than a Class R Certificate,
registered in the
name of the Company, the Master Servicer or any Subservicer or
any Affiliate
thereof shall be deemed not to be outstanding and the Percentage
Interest or
Voting Rights evidenced thereby shall not be taken into account
in determining
whether the requisite amount of Percentage Interests or Voting
Rights necessary
to effect any such consent or direction has been obtained. All
references herein
to "Holders" or "Certificateholders" shall reflect the rights of
Certificate
Owners as they may indirectly exercise such rights through the
Depository and
participating members thereof, except as otherwise specified
herein; provided,
however, that the Trustee shall be required to recognize as a
"Holder" or
"Certificateholder" only the Person in whose name a Certificate
is registered in
the Certificate Register.
Certificate Insurer: As defined in the Series Supplement.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
who is the beneficial owner of such Certificate, as reflected on
the books of an
indirect participating brokerage firm for which a Depository
Participant acts as
agent, if any, and otherwise on the books of a Depository
Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to each Certificate
(other
than any Interest Only Certificate), on any date of
determination, an amount
equal to:
(i) the Initial Certificate Principal Balance of such
Certificate as
specified on the face thereof, plus
(ii) any Subsequent Recoveries added to the Certificate
Principal
Balance of such Certificate pursuant to Section 4.02, plus
(iii) in the case of each Accrual Certificate, an amount equal
to the
aggregate Accrued Certificate Interest added to the
Certificate
Principal Balance thereof prior to such date of
determination,
minus
(iv) the sum of (x) the aggregate of all amounts previously
distributed with respect to such Certificate (or any
predecessor
Certificate) and applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.02(a) and (y) the
aggregate
of all reductions in Certificate Principal Balance deemed to
have
occurred in connection with Realized Losses which were
previously
allocated to such Certificate (or any predecessor
Certificate)
pursuant to Section 4.05;
provided, that the Certificate Principal Balance of each
Certificate of the
Class of Subordinate Certificates with the Lowest Priority at
any given time
shall be further reduced by an amount equal to the Percentage
Interest
represented by such Certificate multiplied by the excess, if
any, of (A) the
then aggregate Certificate Principal Balance of all Classes of
Certificates then
outstanding over (B) the then aggregate Stated Principal Balance
of the Mortgage
Loans.
7
<PAGE>
Certificate Register and Certificate Registrar: The register
maintained
and the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates bearing the
same
designation. The initial Class A-V Certificates and any Subclass
thereof issued
pursuant to Section 5.01(c) shall be a single Class for purposes
of this
Agreement.
Class A-P Certificate: Any one of the Certificates designated as
a Class
A-P Certificate.
Class A-P Collection Shortfall: With respect to the Cash
Liquidation or
REO Disposition of a Discount Mortgage Loan, any Distribution
Date and, with
respect to any Mortgage Pool comprised of two or more Loan
Groups, each Loan
Group, the excess of the amount described in clause (C)(1) of
the definition of
Class A-P Principal Distribution Amount (for the related Loan
Group, if
applicable) over the amount described in clause (C)(2) of such
definition.
Class A-P Principal Distribution Amount: With respect to any
Distribution Date and, with respect to any Mortgage Pool
comprised of two or
more Loan Groups, each Loan Group, an amount equal to the
aggregate of:
(A) the related Discount Fraction of the principal portion
of
each Monthly Payment on each Discount Mortgage Loan (or, with
respect to
any Mortgage Pool comprised of two or more Loan Groups, each
Discount
Mortgage Loan in the related Loan Group) due during the related
Due
Period, whether or not received on or prior to the related
Determination
Date, minus the Discount Fraction of the principal portion of
any
related Debt Service Reduction which together with other
Bankruptcy
Losses exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the principal portion of
all
unscheduled collections on each Discount Mortgage Loan (or, with
respect
to any Mortgage Pool comprised of two or more Loan Groups, each
Discount
Mortgage Loan in the related Loan Group) received during the
preceding
calendar month or, in the case of Principal Prepayments in Full,
during
the related Prepayment Period (other than amounts received in
connection
with a Cash Liquidation or REO Disposition of a Discount
Mortgage Loan
described in clause (C) below), including Principal Prepayments
in Full,
Curtailments, Subsequent Recoveries and repurchases (including
deemed
repurchases under Section 3.07(b)) of such Discount Mortgage
Loans (or,
in the case of a substitution of a Deleted Mortgage Loan, the
Discount
Fraction of the amount of any shortfall deposited in the
Custodial
Account in connection with such substitution);
(C) in connection with the Cash Liquidation or REO Disposition
of
a Discount Mortgage Loan (or, with respect to any Mortgage
Pool
comprised of two or more Loan Groups, each Discount Mortgage
Loan in the
related Loan Group) that occurred during the preceding calendar
month
(or was deemed to have occurred during such period in accordance
with
Section 3.07(b)) that did not result in any Excess Special
Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary
Losses, an amount equal to the lesser of (1) the applicable
Discount
Fraction of the Stated Principal Balance of such Discount
Mortgage Loan
immediately prior to such Distribution Date and (2) the
aggregate amount
of the collections on such Mortgage Loan to the extent applied
as
recoveries of principal;
8
<PAGE>
(D) any amounts allocable to principal for any previous
Distribution Date (calculated pursuant to clauses (A) through
(C) above)
that remain undistributed; and
(E) the amount of any Class A-P Collection Shortfalls for
such
Distribution Date and the related Loan Group, if applicable, and
the
amount of any Class A-P Collection Shortfalls (for the related
Loan
Group, if applicable) remaining unpaid for all previous
Distribution
Dates, but only to the extent of the Eligible Funds for such
Distribution Date; minus
(F) the related Discount Fraction of the portion of the
Capitalization Reimbursement Amount (for the related Loan Group,
if
applicable) for such Distribution Date, if any, related to each
Discount
Mortgage Loan (in the related Loan Group, if applicable).
Notwithstanding the foregoing, with respect to any Distribution
Date on
and after the Credit Support Depletion Date, the Class A-P
Principal
Distribution Amount (for a Loan Group, if applicable) shall
equal the excess of
(i) the sum of (a) the related Discount Fraction of the
principal portion of
each Monthly Payment on each Discount Mortgage Loan (in the
related Loan Group,
if applicable) received or advanced prior to the related
Determination Date and
not previously distributed minus the Discount Fraction of the
principal portion
of any related Debt Service Reduction which together with other
Bankruptcy
Losses exceeds the Bankruptcy Amount and (b) the related
Discount Fraction of
the aggregate amount of unscheduled collections described in
clauses (B) and (C)
above over (ii) the amount calculated pursuant to clause (F)
above.
Class A-V Certificate: Any one of the Certificates designated as
a Class
A-V Certificate, including any Subclass thereof.
Class B Certificate: Any one of the Certificates designated as a
Class
B-1 Certificate, Class B-2 Certificate or Class B-3
Certificate.
Class M Certificate: Any one of the Certificates designated as a
Class
M-1 Certificate, Class M-2 Certificate or Class M-3
Certificate.
Closing Date: As defined in the Series Supplement.
Code: The Internal Revenue Code of 1986, as amended.
Combined Collateral LLC: Combined Collateral LLC, a Delaware
limited
liability company.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date, an
amount
equal to Prepayment Interest Shortfalls resulting from Principal
Prepayments in
9
<PAGE>
Full during the related Prepayment Period and Curtailments
during the prior
calendar month and included in the Available Distribution Amount
for such
Distribution Date, but not more than the lesser of (a)
one-twelfth of 0.125% of
the Stated Principal Balance of the Mortgage Loans immediately
preceding such
Distribution Date and (b) the sum of the Servicing Fee and all
income and gain
on amounts held in the Custodial Account and the Certificate
Account and payable
to the Certificateholders with respect to such Distribution
Date; provided that
for purposes of this definition the amount of the Servicing Fee
will not be
reduced pursuant to Section 7.02(a) except as may be required
pursuant to the
last sentence of such Section.
Compliance With Laws Representation: The following
representation and
warranty (or any representation and warranty that is
substantially similar) made
by Residential Funding in Section 4 of Assignment Agreement:
"Each Mortgage Loan
at the time it was made complied in all material respects with
applicable local,
state, and federal laws, including, but not limited to, all
applicable
anti-predatory lending laws".
Cooperative: A private, cooperative housing corporation which
owns or
leases land and all or part of a building or buildings,
including apartments,
spaces used for commercial purposes and common areas therein and
whose board of
directors authorizes, among other things, the sale of
Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling
building
owned or leased by a Cooperative, which unit the Mortgagor has
an exclusive
right to occupy pursuant to the terms of a proprietary lease or
occupancy
agreement.
Cooperative Lease: With respect to a Cooperative Loan, the
proprietary
lease or occupancy agreement with respect to the Cooperative
Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock,
which lease or
agreement confers an exclusive right to the holder of such
Cooperative Stock to
occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of
a
Cooperative Apartment, evidenced by a Mortgage Note and secured
by (i) a
Security Agreement, (ii) the related Cooperative Stock
Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements
and (v) a stock
power (or other similar instrument), and ancillary thereto, a
recognition
agreement between the Cooperative and the originator of the
Cooperative Loan,
each of which was transferred and assigned to the Trustee
pursuant to Section
2.01 and are from time to time held as part of the Trust
Fund.
Cooperative Stock: With respect to a Cooperative Loan, the
single
outstanding class of stock, partnership interest or other
ownership instrument
in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative
Loan, the
stock certificate or other instrument evidencing the related
Cooperative Stock.
Credit Repository: Equifax, Transunion and Experian, or their
successors
in interest.
Credit Support Depletion Date: The first Distribution Date on
which the
Certificate Principal Balances of the Subordinate Certificates
have been reduced
to zero.
10
<PAGE>
Credit Support Pledge Agreement: The Credit Support Pledge
Agreement,
dated as of November 24, 1998, among the Master Servicer, GMAC
Mortgage
Corporation, Combined Collateral LLC and The First National Bank
of Chicago (now
known as Bank One, National Association), as custodian.
Cumulative Insurance Payments: As defined in the Series
Supplement.
Curtailment: Any Principal Prepayment made by a Mortgagor which
is not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created
and
maintained pursuant to Section 3.07 in the name of a depository
institution, as
custodian for the holders of the Certificates, for the holders
of certain other
interests in mortgage loans serviced or sold by the Master
Servicer and for the
Master Servicer, into which the amounts set forth in Section
3.07 shall be
deposited directly. Any such account or accounts shall be an
Eligible Account.
Custodial Agreement: An agreement that may be entered into among
the
Company, the Master Servicer, the Trustee and a Custodian
pursuant to which the
Custodian will hold certain documents relating to the Mortgage
Loans on behalf
of the Trustee.
Custodian: A custodian appointed pursuant to a Custodial
Agreement.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof at the Cut-off Date after giving
effect to all
installments of principal due on or prior thereto (or due during
the month of
the Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction
in the scheduled Monthly Payment for such Mortgage Loan by a
court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except
such a reduction
constituting a Deficient Valuation or any reduction that results
in a permanent
forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a
court of competent jurisdiction of the Mortgaged Property in an
amount less than
the then outstanding indebtedness under the Mortgage Loan, or
any reduction in
the amount of principal to be paid in connection with any
scheduled Monthly
Payment that constitutes a permanent forgiveness of principal,
which valuation
or reduction results from a proceeding under the Bankruptcy
Code.
Definitive Certificate: Any Certificate other than a
Book-Entry
Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be:
"30 to
59 days" or "30 or more days" delinquent when a payment due on
any scheduled due
date remains unpaid as of the close of business on the last
business day
immediately prior to the next following monthly scheduled due
date; "60 to 89
days" or "60 or more days" delinquent when a payment due on any
scheduled due
date remains unpaid as of the close of business on the last
business day
immediately prior to the second following monthly scheduled due
date; and so on.
11
<PAGE>
The determination as to whether a Mortgage Loan falls into these
categories is
made as of the close of business on the last business day of
each month. For
example, a Mortgage Loan with a payment due on July 1 that
remained unpaid as of
the close of business on July 31 would then be considered to be
30 to 59 days
delinquent. Delinquency information as of the Cut-off Date is
determined and
prepared as of the close of business on the last business day
immediately prior
to the Cut-off Date.
Depository: The Depository Trust Company, or any successor
Depository
hereafter named. The nominee of the initial Depository for
purposes of
registering those Certificates that are to be Book-Entry
Certificates is Cede &
Co. The Depository shall at all times be a "clearing
corporation" as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State
of New York and
a "clearing agency" registered pursuant to the provisions of
Section 17A of the
Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a
Depository effects
book-entry transfers and pledges of securities deposited with
the Depository.
Destroyed Mortgage Note: A Mortgage Note the original of which
was
permanently lost or destroyed and has not been replaced.
Determination Date: As defined in the Series Supplement.
Discount Fraction: With respect to each Discount Mortgage Loan,
the
fraction expressed as a percentage, the numerator of which is
the Discount Net
Mortgage Rate minus the Net Mortgage Rate (or the initial Net
Mortgage Rate with
respect to any Discount Mortgage Loans as to which the Mortgage
Rate is modified
pursuant to 3.07(a)) for such Mortgage Loan and the denominator
of which is the
Discount Net Mortgage Rate. The Discount Fraction with respect
to each Discount
Mortgage Loan is set forth as an exhibit attached to the Series
Supplement.
Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage
Rate (or
the initial Net Mortgage Rate) of less than the Discount Net
Mortgage Rate per
annum and any Mortgage Loan deemed to be a Discount Mortgage
Loan pursuant to
the definition of Qualified Substitute Mortgage Loan.
Discount Net Mortgage Rate: As defined in the Series
Supplement.
Disqualified Organization: Any organization defined as a
"disqualified
organization" under Section 860E(e)(5) of the Code, and if not
otherwise
included, any of the following: (i) the United States, any State
or political
subdivision thereof, any possession of the United States, or any
agency or
instrumentality of any of the foregoing (other than an
instrumentality which is
a corporation if all of its activities are subject to tax and,
except for the
Freddie Mac, a majority of its board of directors is not
selected by such
governmental unit), (ii) a foreign government, any international
organization,
or any agency or instrumentality of any of the foregoing, (iii)
any organization
(other than certain farmers' cooperatives described in Section
521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax
12
<PAGE>
imposed by Section 511 of the Code on unrelated business taxable
income), (iv)
rural electric and telephone cooperatives described in Section
1381(a)(2)(C) of
the Code, (v) any "electing large partnership," as defined in
Section 775(a) of
the Code and (vi) any other Person so designated by the Trustee
based upon an
Opinion of Counsel that the holding of an Ownership Interest in
a Class R
Certificate by such Person may cause the Trust Fund or any
Person having an
Ownership Interest in any Class of Certificates (other than such
Person) to
incur a liability for any federal tax imposed under the Code
that would not
otherwise be imposed but for the Transfer of an Ownership
Interest in a Class R
Certificate to such Person. The terms "United States", "State"
and
"international organization" shall have the meanings set forth
in Section 7701
of the Code or successor provisions.
Distribution Date: The 25th day of any month beginning in the
month
immediately following the month of the initial issuance of the
Certificates or,
if such 25th day is not a Business Day, the Business Day
immediately following
such 25th day.
Due Date: With respect to any Distribution Date and any Mortgage
Loan,
the day during the related Due Period on which the Monthly
Payment is due.
Due Period: With respect to any Distribution Date, the one-month
period
set forth in the Series Supplement.
Eligible Account: An account that is any of the following:
(i)
maintained with a depository institution the debt obligations of
which have been
rated by each Rating Agency in its highest rating available, or
(ii) an account
or accounts in a depository institution in which such accounts
are fully insured
to the limits established by the FDIC, provided that any
deposits not so insured
shall, to the extent acceptable to each Rating Agency, as
evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel
delivered to the
Trustee and each Rating Agency) the registered Holders of
Certificates have a
claim with respect to the funds in such account or a perfected
first security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of
any other
depositors or creditors of the depository institution with which
such account is
maintained, or (iii) in the case of the Custodial Account, a
trust account or
accounts maintained in the corporate trust department of Bank
One, National
Association, or (iv) in the case of the Certificate Account, a
trust account or
accounts maintained in the corporate trust division of the
Trustee, or (v) an
account or accounts of a depository institution acceptable to
each Rating Agency
(as evidenced in writing by each Rating Agency that use of any
such account as
the Custodial Account or the Certificate Account will not reduce
the rating
assigned to any Class of Certificates by such Rating Agency
below the lower of
the then-current rating or the rating assigned to such
Certificates as of the
Closing Date by such Rating Agency).
Event of Default: As defined in Section 7.01.
Excess Bankruptcy Loss: Any Bankruptcy Loss, or portion thereof,
which
exceeds the then applicable Bankruptcy Amount.
Excess Fraud Loss: Any Fraud Loss, or portion thereof, which
exceeds the
then applicable Fraud Loss Amount.
13
<PAGE>
Excess Special Hazard Loss: Any Special Hazard Loss, or portion
thereof,
that exceeds the then applicable Special Hazard Amount.
Excess Subordinate Principal Amount: With respect to any
Distribution
Date on which the aggregate Certificate Principal Balance of the
Class of
Subordinate Certificates then outstanding with the Lowest
Priority is to be
reduced to zero and on which Realized Losses are to be allocated
to such class
or classes, the excess, if any, of (i) the amount that would
otherwise be
distributable in respect of principal on such class or classes
of Certificates
on such Distribution Date over (ii) the excess, if any, of the
aggregate
Certificate Principal Balance of such class or classes of
Certificates
immediately prior to such Distribution Date over the aggregate
amount of
Realized Losses to be allocated to such classes of Certificates
on such
Distribution Date as reduced by any amount calculated pursuant
to clause (E) of
the definition of Class A-P Principal Distribution Amount. With
respect to any
Mortgage Pool that is comprised of two or more Loan Groups, the
Excess
Subordinate Principal Amount will be allocated between each Loan
Group on a pro
rata basis in accordance with the amount of Realized Losses
attributable to each
Loan Group and allocated to the Certificates on such
Distribution Date.
Exchange Act: The Securities and Exchange Act of 1934, as
amended.
Extraordinary Events: Any of the following conditions with
respect to a
Mortgaged Property (or, with respect to a Cooperative Loan, the
Cooperative
Apartment) or Mortgage Loan causing or resulting in a loss which
causes the
liquidation of such Mortgage Loan:
(a) losses that are of the type that would be covered by the
fidelity bond
and the errors and omissions insurance policy required to be
maintained
pursuant to Section 3.12(b) but are in excess of the coverage
maintained
thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all
whether controlled or uncontrolled, and whether such loss be
direct or
indirect, proximate or remote or be in whole or in part caused
by,
contributed to or aggravated by a peril covered by the
definition of the
term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war, including
action in
hindering, combating or defending against an actual, impending
or
expected attack:
1. by any government or sovereign power, de jure or de facto, or
by any
authority maintaining or using military, naval or air forces;
or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(d) any weapon of war employing atomic fission or radioactive
force whether
in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped
power or action
taken by governmental authority in hindering, combating or
defending
against such an occurrence, seizure or destruction under
quarantine or
customs regulations, confiscation by order of any government or
public
authority; or risks of contraband or illegal transportation or
trade.
14
<PAGE>
Extraordinary Losses: Any loss incurred on a Mortgage Loan
caused by or
resulting from an Extraordinary Event.
Fannie Mae: Federal National Mortgage Association, a federally
chartered
and privately owned corporation organized and existing under the
Federal
National Mortgage Association Charter Act, or any successor
thereto.
FASIT: A "financial asset securitization investment trust"
within the
meaning of Section 860L of the Code.
FDIC: Federal Deposit Insurance Corporation or any successor
thereto.
Final Distribution Date: The Distribution Date on which the
final
distribution in respect of the Certificates will be made
pursuant to Section
9.01, which Final Distribution Date shall in no event be later
than the end of
the 90-day liquidation period described in Section 9.02.
Fitch: Fitch Ratings or its successor in interest.
Foreclosure Profits: As to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess, if any, of
Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of all
amounts reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of each
Mortgage Loan or
REO Property for which a Cash Liquidation or REO Disposition
occurred in the
related Prepayment Period over the sum of the unpaid principal
balance of such
Mortgage Loan or REO Property (determined, in the case of an REO
Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest
at the Mortgage
Rate on such unpaid principal balance from the Due Date to which
interest was
last paid by the Mortgagor to the first day of the month
following the month in
which such Cash Liquidation or REO Disposition occurred.
Form 10-K Certification: As defined in Section 4.03(e).
Fraud Losses: Realized Losses on Mortgage Loans as to which
there was
fraud in the origination of such Mortgage Loan.
Freddie Mac: Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States created and existing under
Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Highest Priority: As of any date of determination, the Class
of
Subordinate Certificates then outstanding with a Certificate
Principal Balance
greater than zero, with the earliest priority for payments
pursuant to Section
4.02(a), in the following order: Class M-1, Class M-2, Class
M-3, Class B-1,
Class B-2 and Class B-3 Certificates.
Independent: When used with respect to any specified Person,
means such
a Person who (i) is in fact independent of the Company, the
Master Servicer and
the Trustee, or any Affiliate thereof, (ii) does not have any
direct financial
interest or any material indirect financial interest in the
Company, the Master
Servicer or the Trustee or in an Affiliate thereof, and (iii) is
not connected
with the Company, the Master Servicer or the Trustee as an
officer, employee,
promoter, underwriter, trustee, partner, director or person
performing similar
functions.
15
<PAGE>
Initial Certificate Principal Balance: With respect to each
Class of
Certificates, the Certificate Principal Balance of such Class of
Certificates as
of the Cut-off Date, as set forth in the Series Supplement.
Initial Monthly Payment Fund: An amount representing scheduled
principal
amortization and interest at the Net Mortgage Rate for the Due
Date in the first
Due Period commencing subsequent to the Cut-off Date for those
Mortgage Loans
for which the Trustee will not be entitled to receive such
payment, and as more
specifically defined in the Series Supplement.
Initial Notional Amount: With respect to any Class or Subclass
of
Interest Only Certificates, the amount initially used as the
principal basis for
the calculation of any interest payment amount, as more
specifically defined in
the Series Supplement.
Initial Subordinate Class Percentage: As defined in the
Series
Supplement.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans
pursuant to any Primary Insurance Policy or any other related
insurance policy
covering a Mortgage Loan (excluding any Certificate Policy (as
defined in the
Series Supplement)), to the extent such proceeds are payable to
the mortgagee
under the Mortgage, any Subservicer, the Master Servicer or the
Trustee and are
not applied to the restoration of the related Mortgaged Property
(or, with
respect to a Cooperative Loan, the related Cooperative
Apartment) or released to
the Mortgagor in accordance with the procedures that the Master
Servicer would
follow in servicing mortgage loans held for its own account.
Insurer: Any named insurer under any Primary Insurance Policy or
any
successor thereto or the named insurer in any replacement
policy.
Interest Accrual Period: As defined in the Series
Supplement.
Interest Only Certificates: A Class or Subclass of Certificates
not
entitled to payments of principal, and designated as such in the
Series
Supplement. The Interest Only Certificates will have no
Certificate Principal
Balance.
Interim Certification: As defined in Section 2.02.
International Borrower: In connection with any Mortgage Loan, a
borrower
who is (a) a United States citizen employed in a foreign
country, (b) a
non-permanent resident alien employed in the United States or
(c) a citizen of a
country other than the United States with income derived from
sources outside
the United States.
Junior Certificateholder: The Holder of not less than 95% of
the
Percentage Interests of the Junior Class of Certificates.
Junior Class of Certificates: The Class of Subordinate
Certificates
outstanding as of the date of the repurchase of a Mortgage Loan
pursuant to
Section 4.07 herein that has the Lowest Priority.
16
<PAGE>
Late Collections: With respect to any Mortgage Loan, all
amounts
received during any Due Period, whether as late payments of
Monthly Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late
payments or collections of Monthly Payments due but delinquent
for a previous
Due Period and not previously recovered.
Liquidation Proceeds: Amounts (other than Insurance Proceeds)
received
by the Master Servicer in connection with the taking of an
entire Mortgaged
Property by exercise of the power of eminent domain or
condemnation or in
connection with the liquidation of a defaulted Mortgage Loan
through trustee's
sale, foreclosure sale or otherwise, other than REO
Proceeds.
Loan Group: Any group of Mortgage Loans designated as a separate
loan
group in the Series Supplement. The Certificates relating to
each Loan Group
will be designated in the Series Supplement.
Loan-to-Value Ratio: As of any date, the fraction, expressed as
a
percentage, the numerator of which is the current principal
balance of the
related Mortgage Loan at the date of determination and the
denominator of which
is the Appraised Value of the related Mortgaged Property.
Lower Priority: As of any date of determination and any Class
of
Subordinate Certificates, any other Class of Subordinate
Certificates then
outstanding with a later priority for payments pursuant to
Section 4.02 (a).
Lowest Priority: As of any date of determination, the Class
of
Subordinate Certificates then outstanding with a Certificate
Principal Balance
greater than zero, with the latest priority for payments
pursuant to Section
4.02(a), in the following order: Class B-3, Class B-2, Class
B-1, Class M-3,
Class M-2 and Class M-1 Certificates.
Maturity Date: The latest possible maturity date, solely for
purposes of
Section 1.860G-1(a)(4)(iii) of the Treasury regulations, by
which the
Certificate Principal Balance of each Class of Certificates
(other than the
Interest Only Certificates which have no Certificate Principal
Balance) and each
Uncertificated REMIC Regular Interest would be reduced to zero,
as designated in
the Series Supplement.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware,
or any successor
thereto.
MERS(R) System: The system of recording transfers of
Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered
with MERS on the MERS(R) System.
MLCC: Merrill Lynch Credit Corporation, or its successor in
interest.
17
<PAGE>
Modified Mortgage Loan: Any Mortgage Loan that has been the
subject of a
Servicing Modification.
Modified Net Mortgage Rate: As to any Mortgage Loan that is the
subject
of a Servicing Modification, the Net Mortgage Rate minus the
rate per annum by
which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as
the
mortgagee of such Mortgage Loan, solely as nominee for the
originator of such
Mortgage Loan and its successors and assigns, at the origination
thereof.
Monthly Payment: With respect to any Mortgage Loan (including
any REO
Property) and any Due Date, the payment of principal and
interest due thereon in
accordance with the amortization schedule at the time applicable
thereto (after
adjustment, if any, for Curtailments and for Deficient
Valuations occurring
prior to such Due Date but before any adjustment to such
amortization schedule
by reason of any bankruptcy, other than a Deficient Valuation,
or similar
proceeding or any moratorium or similar waiver or grace period
and before any
Servicing Modification that constitutes a reduction of the
interest rate on such
Mortgage Loan).
Moody's: Moody's Investors Service, Inc., or its successor in
interest.
Mortgage: With respect to each Mortgage Note related to a
Mortgage Loan
which is not a Cooperative Loan, the mortgage, deed of trust or
other comparable
instrument creating a first lien on an estate in fee simple or
leasehold
interest in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining
to a particular Mortgage Loan and any additional documents
required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to
the Trustee pursuant to Section 2.01 as from time to time are
held or deemed to
be held as a part of the Trust Fund, the Mortgage Loans
originally so held being
identified in the initial Mortgage Loan Schedule, and Qualified
Substitute
Mortgage Loans held or deemed held as part of the Trust Fund
including, without
limitation, (i) with respect to each Cooperative Loan, the
related Mortgage
Note, Security Agreement, Assignment of Proprietary Lease,
Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights
appertaining
thereto, and (ii) with respect to each Mortgage Loan other than
a Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and
all rights
appertaining thereto.
Mortgage Loan Schedule: As defined in the Series Supplement.
Mortgage Note: The originally executed note or other evidence
of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan,
together with any modification thereto.
Mortgage Pool: The pool of mortgage loans, including all Loan
Groups, if
any, consisting of the Mortgage Loans.
18
<PAGE>
Mortgage Rate: As to any Mortgage Loan, the interest rate borne
by the
related Mortgage Note, or any modification thereto other than a
Servicing
Modification.
Mortgaged Property: The underlying real property securing a
Mortgage
Loan or, with respect to a Cooperative Loan, the related
Cooperative Lease and
Cooperative Stock.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, a per annum rate
of
interest equal to the Adjusted Mortgage Rate less the per annum
rate at which
the Servicing Fee is calculated.
Non-Discount Mortgage Loan: A Mortgage Loan that is not a
Discount
Mortgage Loan.
Non-Primary Residence Loans: The Mortgage Loans designated as
secured by
second or vacation residences, or by non-owner occupied
residences, on the
Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States
Person.
Nonrecoverable Advance: Any Advance previously made or proposed
to be
made by the Master Servicer or Subservicer in respect of a
Mortgage Loan (other
than a Deleted Mortgage Loan) which, in the good faith judgment
of the Master
Servicer, will not, or, in the case of a proposed Advance, would
not, be
ultimately recoverable by the Master Servicer from related Late
Collections,
Insurance Proceeds, Liquidation Proceeds, REO Proceeds or
amounts reimbursable
to the Master Servicer pursuant to Section 4.02(a) hereof. To
the extent that
any Mortgagor is not obligated under the related Mortgage
documents to pay or
reimburse any portion of any Servicing Advances that are
outstanding with
respect to the related Mortgage Loan as a result of a
modification of such
Mortgage Loan by the Master Servicer, which forgives amounts
which the Master
Servicer or Subservicer had previously advanced, and the Master
Servicer
determines that no other source of payment or reimbursement for
such advances is
available to it, such Servicing Advances shall be deemed to be
Nonrecoverable
Advances. The determination by the Master Servicer that it has
made a
Nonrecoverable Advance or that any proposed Advance would
constitute a
Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered
to the Company, the Trustee and any Certificate Insurer.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the
time of
reference thereto, is not subject to a Subservicing
Agreement.
Notional Amount: With respect to any Class or Subclass of
Interest Only
Certificates, an amount used as the principal basis for the
calculation of any
interest payment amount, as more specifically defined in the
Series Supplement.
Officers' Certificate: A certificate signed by the Chairman of
the
Board, the President or a Vice President or Assistant Vice
President, or a
Director or Managing Director, and by the Treasurer, the
Secretary, or one of
the Assistant Treasurers or Assistant Secretaries of the Company
or the Master
Servicer, as the case may be, and delivered to the Trustee, as
required by this
Agreement.
19
<PAGE>
Opinion of Counsel: A written opinion of counsel acceptable to
the
Trustee and the Master Servicer, who may be counsel for the
Company or the
Master Servicer, provided that any opinion of counsel (i)
referred to in the
definition of "Disqualified Organization" or (ii) relating to
the qualification
of any REMIC formed under the Series Supplement or compliance
with the REMIC
Provisions must, unless otherwise specified, be an opinion of
Independent
counsel.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage
Loan
(including an REO Property) which was not the subject of a
Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not
purchased,
deleted or substituted for prior to such Due Date pursuant to
Section 2.02,
2.03, 2.04 or 4.07.
Ownership Interest: As to any Certificate, any ownership or
security
interest in such Certificate, including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: As defined in the Series Supplement.
Paying Agent: The Trustee or any successor Paying Agent
appointed by the
Trustee.
Percentage Interest: With respect to any Certificate (other than
a Class
R Certificate), the undivided percentage ownership interest in
the related Class
evidenced by such Certificate, which percentage ownership
interest shall be
equal to the Initial Certificate Principal Balance thereof or
Initial Notional
Amount (in the case of any Interest Only Certificate) thereof
divided by the
aggregate Initial Certificate Principal Balance or the aggregate
of the Initial
Notional Amounts, as applicable, of all the Certificates of the
same Class. With
respect to a Class R Certificate, the interest in distributions
to be made with
respect to such Class evidenced thereby, expressed as a
percentage, as stated on
the face of each such Certificate.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to timely payment of
principal and
interest by the United States or any agency or instrumentality
thereof
when such obligations are backed by the full faith and credit of
the
United States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing
not more than one month from the date of acquisition thereof,
provided
that the unsecured short-term debt obligations of the party
agreeing to
repurchase such obligations are at the time rated by each Rating
Agency
in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits
and bankers' acceptances (which shall each have an original
maturity of
not more than 90 days and, in the case of bankers' acceptances,
shall in
no event have an original maturity of more than 365 days or a
remaining
maturity of more than 30 days) denominated in United States
dollars of
any U.S. depository institution or trust company incorporated
under the
laws of the United States or any state thereof or of any
domestic branch
of a foreign depository institution or trust company; provided
that the
short-term debt obligations of such depository institution or
trust
company (or, if the only Rating Agency is Standard & Poor's,
in the case
20
<PAGE>
of the principal depository institution in a depository
institution
holding company, debt obligations of the depository institution
holding
company) at the date of acquisition thereof have been rated by
each
Rating Agency in its highest short-term rating available; and
provided
further that, if the only Rating Agency is Standard & Poor's
and if the
depository or trust company is a principal subsidiary of a bank
holding
company and the debt obligations of such subsidiary are not
separately
rated, the applicable rating shall be that of the bank holding
company;
and, provided further that, if the original maturity of such
short-term
debt obligations of a domestic branch of a foreign
depository
institution or trust company shall exceed 30 days, the
short-term rating
of such institution shall be A-1+ in the case of Standard &
Poor's if
Standard & Poor's is the Rating Agency;
(iv) commercial paper and demand notes (having original
maturities of not
more than 365 days) of any corporation incorporated under the
laws of
the United States or any state thereof which on the date of
acquisition
has been rated by each Rating Agency in its highest short-term
rating
available; provided that such commercial paper shall have a
remaining
maturity of not more than 30 days;
(v) any mutual fund, money market fund, common trust fund or
other pooled
investment vehicle, the assets of which are limited to
instruments that
otherwise would constitute Permitted Investments hereunder and
have been
rated by each Rating Agency in its highest short-term rating
available
(in the case of Standard & Poor's such rating shall be
either AAAm or
AAAm-G), including any such fund that is managed by the Trustee
or any
affiliate of the Trustee or for which the Trustee or any of
its
affiliates acts as an adviser; and
(vi) other obligations or securities that are acceptable to each
Rating
Agency as a Permitted Investment hereunder and will not reduce
the
rating assigned to any Class of Certificates by such Rating
Agency
(without giving effect to any Certificate Policy (as defined in
the
Series Supplement) in the case of Insured Certificates (as
defined in
the Series Supplement) below the lower of the then-current
rating or the
rating assigned to such Certificates as of the Closing Date by
such
Rating Agency, as evidenced in writing;
provided, however, no instrument shall be a Permitted Investment
if it
represents, either (1) the right to receive only interest
payments with respect
to the underlying debt instrument or (2) the right to receive
both principal and
interest payments derived from obligations underlying such
instrument and the
principal and interest payments with respect to such instrument
provide a yield
to maturity greater than 120% of the yield to maturity at par of
such underlying
obligations. References herein to the highest rating available
on unsecured
long-term rating category available shall mean AAA in the case
of Standard &
Poor's and Fitch and Aaa in the case of Moody's, and references
herein to the
highest rating available on unsecured commercial paper and
short-term rating
category available obligations shall mean A-1 in the case of
Standard & Poor's,
P-1 in the case of Moody's and either A-+ by Standard &
Poor's, P-1 by Moody's
or F-1 by Fitch in the case of Fitch.
Permitted Transferee: Any Transferee of a Class R Certificate,
other
than a Disqualified Organization or Non-United States
Person.
21
<PAGE>
Person: Any individual, corporation, limited liability
company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Pledged Amount: With respect to any Pledged Asset Loan, the
amount of
money remitted to Combined Collateral LLC, at the direction of
or for the
benefit of the related Mortgagor.
Pledged Asset Loan: Any Mortgage Loan supported by Pledged
Assets or
such other collateral, other than the related Mortgaged
Property, set forth in
the Series Supplement.
Pledged Assets: With respect to any Mortgage Loan, all
money,
securities, security entitlements, accounts, general
intangibles, payment
intangibles, instruments, documents, deposit accounts,
certificates of deposit,
commodities contracts and other investment property and other
property of
whatever kind or description pledged by Combined Collateral LLC
as security in
respect of any Realized Losses in connection with such Mortgage
Loan up to the
Pledged Amount for such Mortgage Loan, and any related
collateral, or such other
collateral as may be set forth in the Series Supplement.
Pledged Asset Mortgage Servicing Agreement: The Pledged Asset
Mortgage
Servicing Agreement, dated as of February 28, 1996 between MLCC
and the Master
Servicer.
Pooling and Servicing Agreement or Agreement: With respect to
any
Series, this Standard Terms together with the related Series
Supplement.
Pool Stated Principal Balance: As to any Distribution Date,
the
aggregate of the Stated Principal Balances of each Mortgage
Loan.
Pool Strip Rate: With respect to each Mortgage Loan, a per annum
rate
equal to the excess of (a) the Net Mortgage Rate of such
Mortgage Loan over (b)
the Discount Net Mortgage Rate (but not less than 0.00%) per
annum.
Prepayment Distribution Trigger: With respect to any
Distribution Date
and any Class of Subordinate Certificates (other than the Class
M-1
Certificates), a test that shall be satisfied if the fraction
(expressed as a
percentage) equal to the sum of the Certificate Principal
Balances of such Class
and each Class of Subordinate Certificates with a Lower Priority
than such Class
immediately prior to such Distribution Date divided by the
aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO
Properties)
immediately prior to such Distribution Date is greater than or
equal to the sum
of the related Initial Subordinate Class Percentages of such
Classes of
Subordinate Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and
any
Mortgage Loan (other than a Mortgage Loan relating to an REO
Property) that was
the subject of (a) a Principal Prepayment in Full during the
portion of the
related Prepayment Period that falls during the prior calendar
month, an amount
equal to the excess of one month's interest at the Net Mortgage
Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan) on the
Stated Principal Balance of such Mortgage Loan over the amount
of interest
(adjusted to the Net Mortgage Rate (or Modified Net Mortgage
Rate in the case of
22
<PAGE>
a Modified Mortgage Loan)) paid by the Mortgagor for such month
to the date of
such Principal Prepayment in Full or (b) a Curtailment during
the prior calendar
month, an amount equal to one month's interest at the Net
Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan) on the
amount of such Curtailment.
Prepayment Period: As to any Distribution Date and Principal
Prepayment
in Full, the period commencing on the 16th day of the month
prior to the month
in which that Distribution Date occurs and ending on the 15th
day of the month
in which such Distribution Date occurs.
Primary Insurance Policy: Each primary policy of mortgage
guaranty
insurance or any replacement policy therefor referred to in
Section 2.03(b)(iv)
and (v).
Principal Only Certificates: A Class of Certificates not
entitled to
payments of interest, and more specifically designated as such
in the Series
Supplement.
Principal Prepayment: Any payment of principal or other recovery
on a
Mortgage Loan, including a recovery that takes the form of
Liquidation Proceeds
or Insurance Proceeds, which is received in advance of its
scheduled Due Date
and is not accompanied by an amount as to interest representing
scheduled
interest on such payment due on any date or dates in any month
or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment of the
entire
principal balance of a Mortgage Loan that is made by the
Mortgagor.
Program Guide: Collectively, the Client Guide and the Servicer
Guide for
Residential Funding's Expanded Criteria Mortgage Program.
Purchase Price: With respect to any Mortgage Loan (or REO
Property)
required to be or otherwise purchased on any date pursuant to
Section 2.02,
2.03, 2.04 or 4.07, an amount equal to the sum of (i) 100% of
the Stated
Principal Balance thereof plus the principal portion of any
related unreimbursed
Advances and (ii) unpaid accrued interest at the Adjusted
Mortgage Rate (or
Modified Net Mortgage Rate plus the rate per annum at which the
Servicing Fee is
calculated in the case of a Modified Mortgage Loan) (or at the
Net Mortgage Rate
(or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan) in the
case of a purchase made by the Master Servicer) on the Stated
Principal Balance
thereof to the Due Date in the Due Period related to the
Distribution Date
occurring in the month following the month of purchase from the
Due Date to
which interest was last paid by the Mortgagor.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted
by
Residential Funding or the Company for a Deleted Mortgage Loan
which must, on
the date of such substitution, as confirmed in an Officers'
Certificate
delivered to the Trustee, with a copy to the Custodian,
(i) have an outstanding principal balance, after deduction of
the
principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than
one
Mortgage Loan for a Deleted Mortgage Loan, an aggregate
outstanding principal balance, after such deduction), not in
excess of the Stated Principal Balance of the Deleted
Mortgage
Loan (the amount of any shortfall to be deposited by
Residential
Funding in the Custodial Account in the month of
substitution);
23
<PAGE>
(ii) have a Mortgage Rate and a Net Mortgage Rate no lower than
and
not more than 1% per annum higher than the Mortgage Rate and
Net
Mortgage Rate, respectively, of the Deleted Mortgage Loan as
of
the date of substitution;
(iii) have a Loan-to-Value Ratio at the time of substitution no
higher
than that of the Deleted Mortgage Loan at the time of
substitution;
(iv) have a remaining term to stated maturity not greater than
(and
not more than one year less than) that of the Deleted
Mortgage
Loan;
(v) comply with each representation and warranty set forth
in
Sections 2.03 and 2.04 hereof and Section 4 of the
Assignment
Agreement; and
(vi) have a Pool Strip Rate equal to or greater than that of
the
Deleted Mortgage Loan.
Notwithstanding any other provisions herein, (x) with respect to
any Qualified
Substitute Mortgage Loan substituted for a Deleted Mortgage Loan
which was a
Discount Mortgage Loan, such Qualified Substitute Mortgage Loan
shall be deemed
to be a Discount Mortgage Loan and to have a Discount Fraction
equal to the
Discount Fraction of the Deleted Mortgage Loan and (y) in the
event that the
"Pool Strip Rate" of any Qualified Substitute Mortgage Loan as
calculated
pursuant to the definition of "Pool Strip Rate" is greater than
the Pool Strip
Rate of the related Deleted Mortgage Loan
(i) the Pool Strip Rate of such Qualified Substitute Mortgage
Loan
shall be equal to the Pool Strip Rate of the related Deleted
Mortgage Loan for purposes of calculating the Pass-Through
Rate
on the Class A-V Certificates and
(ii) the excess of the Pool Strip Rate on such Qualified
Substitute
Mortgage Loan as calculated pursuant to the definition of
"Pool
Strip Rate" over the Pool Strip Rate on the related Deleted
Mortgage Loan shall be payable to the Class R Certificates
pursuant to Section 4.02 hereof.
Rating Agency: Each of the statistical credit rating agencies
specified
in the Preliminary Statement of the Series Supplement. If any
agency or a
successor is no longer in existence, "Rating Agency" shall be
such statistical
credit rating agency, or other comparable Person, designated by
the Company,
notice of which designation shall be given to the Trustee and
the Master
Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO
Property):
(a) as to which a Cash Liquidation or REO Disposition has
occurred,
an amount (not less than zero) equal to (i) the Stated
Principal
Balance of the Mortgage Loan (or REO Property) as of the date
of
Cash Liquidation or REO Disposition, plus (ii) interest (and
REO
Imputed Interest, if any) at the Net Mortgage Rate from the
Due
Date as to which interest was last paid or advanced to
24
<PAGE>
Certificateholders up to the Due Date in the Due Period
related
to the Distribution Date on which such Realized Loss will be
allocated pursuant to Section 4.05 on the Stated Principal
Balance of such Mortgage Loan (or REO Property) outstanding
during each Due Period that such interest was not paid or
advanced, minus (iii) the proceeds, if any, received during
the
month in which such Cash Liquidation (or REO Disposition)
occurred, to the extent applied as recoveries of interest at
the
Net Mortgage Rate and to principal of the Mortgage Loan, net
of
the portion thereof reimbursable to the Master Servicer or
any
Subservicer with respect to related Advances, Servicing
Advances
or other expenses as to which the Master Servicer or
Subservicer
is entitled to reimbursement thereunder but which have not
been
previously reimbursed,
(b) which is the subject of a Servicing Modification, (i) (1)
the
amount by which the interest portion of a Monthly Payment or
the
principal balance of such Mortgage Loan was reduced or (2)
the
sum of any other amounts owing under the Mortgage Loan that
were
forgiven and that constitute Servicing Advances that are
reimbursable to the Master Servicer or a Subservicer, and
(ii)
any such amount with respect to a Monthly Payment that was
or
would have been due in the month immediately following the
month
in which a Principal Prepayment or the Purchase Price of
such
Mortgage Loan is received or is deemed to have been
received,
(c) which has become the subject of a Deficient Valuation,
the
difference between the principal balance of the Mortgage
Loan
outstanding immediately prior to such Deficient Valuation and
the
principal balance of the Mortgage Loan as reduced by the
Deficient Valuation, or
(d) which has become the object of a Debt Service Reduction,
the
amount of such Debt Service Reduction.
Notwithstanding the above, neither a Deficient Valuation nor a
Debt Service
Reduction shall be deemed a Realized Loss hereunder so long as
the Master
Servicer has notified the Trustee in writing that the Master
Servicer is
diligently pursuing any remedies that may exist in connection
with the
representations and warranties made regarding the related
Mortgage Loan and
either (A) the related Mortgage Loan is not in default with
regard to payments
due thereunder or (B) delinquent payments of principal and
interest under the
related Mortgage Loan and any premiums on any applicable primary
hazard
insurance policy and any related escrow payments in respect of
such Mortgage
Loan are being advanced on a current basis by the Master
Servicer or a
Subservicer, in either case without giving effect to any Debt
Service Reduction.
To the extent the Master Servicer receives Subsequent Recoveries
with respect to
any Mortgage Loan, the amount of the Realized Loss with respect
to that Mortgage
Loan will be reduced to the extent such recoveries are applied
to reduce the
Certificate Principal Balance of any Class of Certificates on
any Distribution
Date.
25
<PAGE>
Record Date: With respect to each Distribution Date, the close
of
business on the last Business Day of the month next preceding
the month in which
the related Distribution Date occurs.
Regular Certificate: Any of the Certificates other than a Class
R
Certificate.
Reimbursement Amounts: As defined in Section 3.22.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Code.
REMIC Administrator: Residential Funding Corporation. If
Residential
Funding Corporation is found by a court of competent
jurisdiction to no longer
be able to fulfill its obligations as REMIC Administrator under
this Agreement
the Master Servicer or Trustee acting as Master Servicer shall
appoint a
successor REMIC Administrator, subject to assumption of the
REMIC Administrator
obligations under this Agreement.
REMIC Provisions: Provisions of the federal income tax law
relating to
real estate mortgage investment conduits, which appear at
Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
temporary and final regulations (or, to the extent not
inconsistent with such
temporary or final regulations, proposed regulations) and
published rulings,
notices and announcements promulgated thereunder, as the
foregoing may be in
effect from time to time.
REO Acquisition: The acquisition by the Master Servicer on
behalf of the
Trustee for the benefit of the Certificateholders of any REO
Property pursuant
to Section 3.14.
REO Disposition: As to any REO Property, a determination by the
Master
Servicer that it has received all Insurance Proceeds,
Liquidation Proceeds, REO
Proceeds and other payments and recoveries (including proceeds
of a final sale)
which the Master Servicer expects to be finally recoverable from
the sale or
other disposition of the REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount
equivalent to interest (at the Net Mortgage Rate that would have
been applicable
to the related Mortgage Loan had it been outstanding) on the
unpaid principal
balance of the Mortgage Loan as of the date of acquisition
thereof for such
period.
REO Proceeds: Proceeds, net of expenses, received in respect of
any REO
Property (including, without limitation, proceeds from the
rental of the related
Mortgaged Property or, with respect to a Cooperative Loan, the
related
Cooperative Apartment) which proceeds are required to be
deposited into the
Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master
Servicer
through foreclosure or deed in lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i)
has been
subject to an interest rate reduction, (ii) has been subject to
a term extension
or (iii) has had amounts owing on such Mortgage Loan capitalized
by adding such
amount to the Stated Principal Balance of such Mortgage Loan;
provided, however,
26
<PAGE>
that a Mortgage Loan modified in accordance with clause (i)
above for a
temporary period shall not be a Reportable Modified Mortgage
Loan if such
Mortgage Loan has not been delinquent in payments of principal
and interest for
six months since the date of such modification if that interest
rate reduction
is not made permanent thereafter.
Request for Release: A request for release, the forms of which
are
attached as Exhibit F hereto, or an electronic request in a form
acceptable to
the Custodian.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy which is required to be maintained from time to
time under this
Agreement, the Program Guide or the related Subservicing
Agreement in respect of
such Mortgage Loan.
Required Surety Payment: With respect to any Additional
Collateral Loan
that becomes a Liquidated Mortgage Loan, the lesser of (i) the
principal portion
of the Realized Loss with respect to such Mortgage Loan and (ii)
the excess, if
any, of (a) the amount of Additional Collateral required at
origination with
respect to such Mortgage Loan over (b) the net proceeds realized
by the
Subservicer from the related Additional Collateral.
Residential Funding: Residential Funding Corporation, a
Delaware
corporation, in its capacity as seller of the Mortgage Loans to
the Company and
any successor thereto.
Responsible Officer: When used with respect to the Trustee, any
officer
of the Corporate Trust Department of the Trustee, including any
Senior Vice
President, any Vice President, any Assistant Vice President, any
Assistant
Secretary, any Trust Officer or Assistant Trust Officer with
particular
responsibility for this transaction, or any other officer of the
Trustee
customarily performing functions similar to those performed by
any of the above
designated officers to whom, with respect to a particular
matter, such matter is
referred.
Retail Certificates: A Senior Certificate, if any, offered in
smaller
minimum denominations than other Senior Certificates, and
designated as such in
the Series Supplement.
Schedule of Discount Fractions: The schedule setting forth the
Discount
Fractions with respect to the Discount Mortgage Loans, attached
as an exhibit to
the Series Supplement.
Security Agreement: With respect to a Cooperative Loan, the
agreement
creating a security interest in favor of the originator in the
related
Cooperative Stock.
Seller: As to any Mortgage Loan, a Person, including any
Subservicer,
that executed a Seller's Agreement applicable to such Mortgage
Loan.
Seller's Agreement: An agreement for the origination and sale
of
Mortgage Loans generally in the form of the Seller Contract
referred to or
contained in the Program Guide, or in such other form as has
been approved by
the Master Servicer and the Company, each containing
representations and
warranties in respect of one or more Mortgage Loans consistent
in all material
respects with those set forth in the Program Guide.
27
<PAGE>
Senior Accelerated Distribution Percentage: With respect to
any
Distribution Date occurring on or prior to the 60th Distribution
Date and, with
respect to any Mortgage Pool comprised of two or more Loan
Groups, any Loan
Group, 100%. With respect to any Distribution Date thereafter
and any such Loan
Group, if applicable, as follows:
(i) for any Distribution Date after the 60th Distribution Date
but on or
prior to the 72nd Distribution Date, the related Senior
Percentage for
such Distribution Date plus 70% of the related Subordinate
Percentage
for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date
but on or
prior to the 84th Distribution Date, the related Senior
Percentage for
such Distribution Date plus 60% of the related Subordinate
Percentage
for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date
but on or
prior to the 96th Distribution Date, the related Senior
Percentage for
such Distribution Date plus 40% of the related Subordinate
Percentage
for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date
but on or
prior to the 108th Distribution Date, the related Senior
Percentage for
such Distribution Date plus 20% of the related Subordinate
Percentage
for such Distribution Date; and
(v) for any Distribution Date thereafter, the Senior Percentage
for such
Distribution Date;
provided, however,
(i) that any scheduled reduction to the Senior Accelerated
Distribution
Percentage described above shall not occur as of any
Distribution Date unless
either
(a)(1)(X) the outstanding principal balance of the Mortgage
Loans
delinquent 60 days or more averaged over the last six months, as
a
percentage of the aggregate outstanding Certificate Principal
Balance of
the Subordinate Certificates, is less than 50% or (Y) the
outstanding
principal balance of Mortgage Loans delinquent 60 days or more
averaged
over the last six months, as a percentage of the aggregate
outstanding
principal balance of all Mortgage Loans averaged over the last
six
months, does not exceed 2% and (2) Realized Losses on the
Mortgage Loans
to date for such Distribution Date if occurring during the
sixth,
seventh, eighth, ninth or tenth year (or any year thereafter)
after the
Closing Date are less than 30%, 35%, 40%, 45% or 50%,
respectively, of
the sum of the Initial Certificate Principal Balances of the
Subordinate
Certificates or
(b)(1) the outstanding principal balance of Mortgage Loans
delinquent 60 days or more averaged over the last six months, as
a
percentage of the aggregate outstanding principal balance of
all
Mortgage Loans averaged over the last six months, does not
exceed 4% and
(2) Realized Losses on the Mortgage Loans to date for such
Distribution
Date, if occurring during the sixth, seventh, eighth, ninth or
tenth
year (or any year thereafter) after the Closing Date are less
than 10%,
15%, 20%, 25% or 30%, respectively, of the sum of the
Initial
Certificate Principal Balances of the Subordinate Certificates,
and
28
<PAGE>
(ii) that for any Distribution Date on which the Senior
Percentage is
greater than the Senior Percentage as of the Closing Date, the
Senior
Accelerated Distribution Percentage for such Distribution Date
shall be 100%,
or, if the Mortgage Pool is comprised of two or more Loan
Groups, for any
Distribution Date on which the weighted average of the Senior
Percentages for
each Loan Group, weighted on the basis of the Stated Principal
Balances of the
Mortgage Loans in the related Loan Group (excluding the Discount
Fraction of the
Discount Mortgage Loans in such Loan Group) exceeds the weighted
average of the
initial Senior Percentages (calculated on such basis) for each
Loan Group, each
of the Senior Accelerated Distribution Percentages for such
Distribution Date
will equal 100%.
Notwithstanding the foregoing, upon the reduction of the
Certificate Principal
Balances of the related Senior Certificates (other than the
Class A-P
Certificates, if any) to zero, the related Senior Accelerated
Distribution
Percentage shall thereafter be 0%.
Senior Certificate: As defined in the Series Supplement.
Senior Percentage: As defined in the Series Supplement.
Senior Support Certificate: A Senior Certificate that
provides
additional credit enhancement to certain other classes of Senior
Certificates
and designated as such in the Preliminary Statement of the
Series Supplement.
Series: All of the Certificates issued pursuant to a Pooling
and
Servicing Agreement and bearing the same series designation.
Series Supplement: The agreement into which this Standard Terms
is
incorporated and pursuant to which, together with this Standard
Terms, a Series
of Certificates is issued.
Servicing Accounts: The account or accounts created and
maintained
pursuant to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred in connection with a
default, delinquency or
other unanticipated event by the Master Servicer or a
Subservicer in the
performance of its servicing obligations, including, but not
limited to, the
cost of (i) the preservation, restoration and protection of a
Mortgaged Property
or, with respect to a Cooperative Loan, the related Cooperative
Apartment, (ii)
any enforcement or judicial proceedings, including foreclosures,
including any
expenses incurred in relation to any such proceedings that
result from the
Mortgage Loan being registered on the MERS System, (iii) the
management and
liquidation of any REO Property, (iv) any mitigation procedures
implemented in
accordance with Section 3.07, and (v) compliance with the
obligations under
Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14, including, if the
Master Servicer
or any Affiliate of the Master Servicer provides services such
as appraisals and
brokerage services that are customarily provided by Persons
other than servicers
of mortgage loans, reasonable compensation for such
services.
Servicing Advance Reimbursement Amounts: As defined in Section
3.22.
29
<PAGE>
Servicing Fee: With respect to any Mortgage Loan and
Distribution Date,
the fee payable monthly to the Master Servicer in respect of
master servicing
compensation that accrues at an annual rate designated on the
Mortgage Loan
Schedule as the "MSTR SERV FEE" for such Mortgage Loan, as may
be adjusted with
respect to successor Master Servicers as provided in Section
7.02.
Servicing Modification: Any reduction of the interest rate on or
the
outstanding principal balance of a Mortgage Loan, any extension
of the final
maturity date of a Mortgage Loan, and any increase to the
outstanding principal
balance of a Mortgage Loan by adding to the Stated Principal
Balance unpaid
principal and interest and other amounts owing under the
Mortgage Loan, in each
case pursuant to a modification of a Mortgage Loan that is in
default, or for
which, in the judgment of the Master Servicer, default is
reasonably foreseeable
in accordance with Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved
in, or
responsible for, the administration and servicing of the
Mortgage Loans whose
name and specimen signature appear on a list of servicing
officers furnished to
the Trustee by the Master Servicer, as such list may from time
to time be
amended.
Special Hazard Loss: Any Realized Loss not in excess of the cost
of the
lesser of repair or replacement of a Mortgaged Property (or,
with respect to a
Cooperative Loan, the related Cooperative Apartment) suffered by
such Mortgaged
Property (or Cooperative Apartment) on account of direct
physical loss,
exclusive of (i) any loss of a type covered by a hazard policy
or a flood
insurance policy required to be maintained in respect of such
Mortgaged Property
pursuant to Section 3.12(a), except to the extent of the portion
of such loss
not covered as a result of any coinsurance provision and (ii)
any Extraordinary
Loss.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The
McGraw-Hill Companies, Inc., or its successor in interest.
Stated Principal Balance: With respect to any Mortgage Loan or
related
REO Property, as of any Distribution Date, (i) the sum of (a)
the Cut-off Date
Principal Balance of the Mortgage Loan plus (b) any amount by
which the Stated
Principal Balance of the Mortgage Loan has been increased
pursuant to a
Servicing Modification, minus (ii) the sum of (a) the principal
portion of the
Monthly Payments due with respect to such Mortgage Loan or REO
Property during
each Due Period ending with the Due Period related to the
previous Distribution
Date which were received or with respect to which an Advance was
made, and (b)
all Principal Prepayments with respect to such Mortgage Loan or
REO Property,
and all Insurance Proceeds, Liquidation Proceeds and REO
Proceeds, to the extent
applied by the Master Servicer as recoveries of principal in
accordance with
Section 3.14 with respect to such Mortgage Loan or REO Property,
in each case
which were distributed pursuant to Section 4.02 on any previous
Distribution
Date, and (c) any Realized Loss allocated to Certificateholders
with respect
thereto for any previous Distribution Date.
Subclass: With respect to the Class A-V Certificates, any
Subclass
thereof issued pursuant to Section 5.01(c). Any such Subclass
will represent the
30
<PAGE>
Uncertificated Class A-V REMIC Regular Interest or Interests
specified by the
initial Holder of the Class A-V Certificates pursuant to Section
5.01(c).
Subordinate Certificate: Any one of the Class M Certificates or
Class B
Certificates, executed by the Trustee and authenticated by the
Certificate
Registrar substantially in the form annexed hereto as Exhibit B
and Exhibit C,
respectively.
Subordinate Class Percentage: With respect to any Distribution
Date and
any Class of Subordinate Certificates, a fraction, expressed as
a percentage,
the numerator of which is the aggregate Certificate Principal
Balance of such
Class of Subordinate Certificates immediately prior to such date
and the
denominator of which is the aggregate Stated Principal Balance
of all of the
Mortgage Loans (or related REO Properties) (other than the
related Discount
Fraction of each Discount Mortgage Loan) immediately prior to
such Distribution
Date.
Subordinate Percentage: As of any Distribution Date and, with
respect to
any Mortgage Pool comprised of two or more Loan Groups, any Loan
Group, 100%
minus the related Senior Percentage as of such Distribution
Date.
Subsequent Recoveries: As of any Distribution Date, amounts
received by
the Master Servicer (net of any related expenses permitted to be
reimbursed
pursuant to Section 3.10) or surplus amounts held by the Master
Servicer to
cover estimated expenses (including, but not limited to,
recoveries in respect
of the representations and warranties made by the related Seller
pursuant to the
applicable Seller's Agreement and assigned to the Trustee
pursuant to Section
2.04) specifically related to a Mortgage Loan that was the
subject of a Cash
Liquidation or an REO Disposition prior to the related
Prepayment Period that
resulted in a Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time
of
reference thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has
entered into a
Subservicing Agreement and who generally satisfied the
requirements set forth in
the Program Guide in respect of the qualification of a
Subservicer as of the
date of its approval as a Subservicer by the Master
Servicer.
Subservicer Advance: Any delinquent installment of principal
and
interest on a Mortgage Loan which is advanced by the related
Subservicer (net of
its Subservicing Fee) pursuant to the Subservicing
Agreement.
Subservicing Account: An account established by a Subservicer
in
accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master
Servicer
and any Subservicer relating to servicing and administration of
certain Mortgage
Loans as provided in Section 3.02, generally in the form of the
servicer
contract referred to or contained in the Program Guide or in
such other form as
has been approved by the Master Servicer and the Company. With
respect to
Additional Collateral Loans subserviced by MLCC, the
Subservicing Agreement
shall also include the Addendum and Assignment Agreement and the
Pledged Asset
31
<PAGE>
Mortgage Servicing Agreement. With respect to any Pledged Asset
Loan subserviced
by GMAC Mortgage Corporation, the Addendum and Assignment
Agreement, dated as of
November 24, 1998, between the Master Servicer and GMAC Mortgage
Corporation, as
such agreement may be amended from time to time.
Subservicing Fee: As to any Mortgage Loan, the fee payable
monthly to
the related Subservicer (or, in the case of a Nonsubserviced
Mortgage Loan, to
the Master Servicer) in respect of subservicing and other
compensation that
accrues at an annual rate equal to the excess of the Mortgage
Rate borne by the
related Mortgage Note over the rate per annum designated on the
Mortgage Loan
Schedule as the "CURR NET" for such Mortgage Loan.
Successor Master Servicer: As defined in Section 3.22.
Surety: Ambac, or its successors in interest, or such other
surety as
may be identified in the Series Supplement.
Surety Bond: The Limited Purpose Surety Bond (Policy No.
AB0039BE),
dated February 28, 1996 in respect to Mortgage Loans originated
by MLCC, or the
Surety Bond (Policy No. AB0240BE), dated March 17, 1999 in
respect to Mortgage
Loans originated by Novus Financial Corporation, in each case
issued by Ambac
for the benefit of certain beneficiaries, including the Trustee
for the benefit
of the Holders of the Certificates, but only to the extent that
such Surety Bond
covers any Additional Collateral Loans, or such other Surety
Bond as may be
identified in the Series Supplement.
Tax Returns: The federal income tax return on Internal Revenue
Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual
Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed
on behalf of any REMIC formed under the Series Supplement and
under the REMIC
Provisions, together with any and all other information, reports
or returns that
may be required to be furnished to the Certificateholders or
filed with the
Internal Revenue Service or any other governmental taxing
authority under any
applicable provisions of federal, state or local tax laws.
Transfer: Any direct or indirect transfer, sale, pledge,
hypothecation
or other form of assignment of any Ownership Interest in a
Certificate.
Transferee: Any Person who is acquiring by Transfer any
Ownership
Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any
Ownership
Interest in a Certificate.
Trust Fund: The segregated pool of assets related to a Series,
with
respect to which one or more REMIC elections are to be made
pursuant to this
Agreement, consisting of:
(i) the Mortgage Loans and the related Mortgage Files and
collateral
securing such Mortgage Loans,
32
<PAGE>
(ii) all payments on and collections in respect of the Mortgage
Loans due
after the Cut-off Date as shall be on deposit in the Custodial
Account
or in the Certificate Account and identified as belonging to the
Trust
Fund, including the proceeds from the liquidation of
Additional
Collateral for any Additional Collateral Loan or Pledged Assets
for any
Pledged Asset Loan, but not including amounts on deposit in the
Initial
Monthly Payment Fund,
(iii) property that secured a Mortgage Loan and that has been
acquired for the
benefit of the Certificateholders by foreclosure or deed in lieu
of
foreclosure,
(iv) the hazard insurance policies and Primary Insurance
Policies, if any,
the Pledged Assets with respect to each Pledged Asset Loan, and
the
interest in the Surety Bond transferred to the Trustee pursuant
to
Section 2.01, and
(v) all proceeds of clauses (i) through (iv) above.
Uniform Single Attestation Program for Mortgage Bankers: The
Uniform
Single Attestation Program for Mortgage Bankers, as published by
the Mortgage
Bankers Association of America and effective with respect to
fiscal periods
ending on or after December 15, 1995.
Uninsured Cause: Any cause of damage to property subject to a
Mortgage
such that the complete restoration of such property is not fully
reimbursable by
the hazard insurance policies.
United States Person or U.S. Person: (i) A citizen or resident
of the
United States, (ii) a corporation, partnership or other entity
treated as a
corporation or partnership for United States federal income tax
purposes
organized in or under the laws of the United States or any state
thereof or the
District of Columbia (unless, in the case of a partnership,
Treasury regulations
provide otherwise), provided that, for purposes solely of the
restrictions on
the transfer of residual interests, no partnership or other
entity treated as a
partnership for United States federal income tax purposes shall
be treated as a
United States Person or U.S. Person unless all persons that own
an interest in
such partnership either directly or indirectly through any chain
of entities no
one of which is a corporation for United States federal income
tax purposes are
required by the applicable operating agreement to be United
States Persons,
(iii) an estate the income of which is includible in gross
income for United
States tax purposes, regardless of its source, or (iv) a trust
if a court within
the United States is able to exercise primary supervision over
the
administration of the trust and one or more United States
persons have authority
to control all substantial decisions of the trust.
Notwithstanding the preceding
sentence, to the extent provided in Treasury regulations,
certain Trusts in
existence on August 20, 1996, and treated as United States
persons prior to such
date, that elect to continue to be treated as United States
persons will also be
a U.S. Person.
U.S.A. Patriot Act: Uniting and Strengthening America by
Providing
Appropriate Tools to Intercept and Obstruct Terrorism Act of
2001, as amended.
Voting Rights: The portion of the voting rights of all of
the
Certificates which is allocated to any Certificate, and more
specifically
designated in Article XI of the Series Supplement.
33
<PAGE>
Section 1.02. Use of Words and Phrases.
"Herein," "hereby," "hereunder," `hereof," "hereinbefore,"
"hereinafter"
and other equivalent words refer to the Pooling and Servicing
Agreement as a
whole. All references herein to Articles, Sections or
Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling
and Servicing
Agreement. The definitions set forth herein include both the
singular and the
plural.
34
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Company, concurrently with the execution and delivery
hereof, does
hereby assign to the Trustee for the benefit of the
Certificateholders
without recourse all the right, title and interest of the
Company in and
to the Mortgage Loans, including all interest and principal
received on
or with respect to the Mortgage Loans after the Cut-off Date
(other than
payments of principal and interest due on the Mortgage Loans in
the
month of the Cut-off Date). In connection with such transfer
and
assignment, the Company does hereby deliver to the Trustee
the
Certificate Policy (as defined in the Series Supplement), if any
for the
benefit of the Holders of the Insured Certificates (as defined
in the
Series Supplement).
(b) In connection with such assignment, except as set forth in
Section
2.01(c) and subject to Section 2.01(d) below, the Company does
hereby
deliver to, and deposit with, the Trustee, or to and with one or
more
Custodians, as the duly appointed agent or agents of the Trustee
for
such purpose, the following documents or instruments (or copies
thereof
as permitted by this Section) (I) with respect to each Mortgage
Loan so
assigned (other than a Cooperative Loan):
(i) The original Mortgage Note, endorsed without recourse in
blank or to the
order of the Trustee, and showing an unbroken chain of
endorsements from
the originator thereof to the Person endorsing it to the
Trustee, or
with respect to any Destroyed Mortgage Note, an original lost
note
affidavit from the related Seller or Residential Funding stating
that
the original Mortgage Note was lost, misplaced or destroyed,
together
with a copy of the related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of
the Mortgage
Loan and language indicating that the Mortgage Loan is a MOM
Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording
indicated
thereon or a copy of the Mortgage with evidence of recording
indicated
thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R)
System, an
original Assignment of the Mortgage to the Trustee with evidence
of
recording indicated thereon or a copy of such assignment with
evidence
of recording indicated thereon;
(iv) The original recorded assignment or assignments of the
Mortgage showing
an unbroken chain of title from the originator thereof to the
Person
assigning it to the Trustee (or to MERS, if the Mortgage Loan
is
registered on the MERS(R) System and noting the presence of a
MIN) with
evidence of recordation noted thereon or attached thereto, or a
copy of
such assignment or assignments of the Mortgage with evidence
of
recording indicated thereon; and
35
<PAGE>
(v) The original of each modification, assumption agreement or
preferred
loan agreement, if any, relating to such Mortgage Loan or a copy
of each
modification, assumption agreement or preferred loan
agreement.
and (II) with respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the
order of
the Trustee and showing an unbroken chain of endorsements from
the
originator thereof to the Person endorsing it to the Trustee, or
with
respect to any Destroyed Mortgage Note, an original lost note
affidavit
from the related Seller or Residential Funding stating that the
original
Mortgage Note was lost, misplaced or destroyed, together with a
copy of
the related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment
of Proprietary
Lease to the originator of the Cooperative Loan with
intervening
assignments showing an unbroken chain of title from such
originator to
the Trustee;
(iii) The related Cooperative Stock Certificate, representing
the related
Cooperative Stock pledged with respect to such Cooperative
Loan,
together with an undated stock power (or other similar
instrument)
executed in blank;
(iv) The original recognition agreement by the Cooperative of
the interests
of the mortgagee with respect to the related Cooperative
Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation
statements, filed by the originator of such Cooperative Loan as
secured
party, each with evidence of recording thereof, evidencing the
interest
of the originator under the Security Agreement and the
Assignment of
Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security
interest
referenced in clause (vi) above showing an unbroken chain of
title from
the originator to the Trustee, each with evidence of recording
thereof,
evidencing the interest of the originator under the Security
Agreement
and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator
in the Security
Agreement, Assignment of Proprietary Lease and the recognition
agreement
referenced in clause (iv) above, showing an unbroken chain of
title from
the originator to the Trustee;
(ix) The original of each modification, assumption agreement or
preferred
loan agreement, if any, relating to such Cooperative Loan;
and
(x) A duly completed UCC-1 financing statement showing the
Master Servicer
as debtor, the Company as secured party and the Trustee as
assignee and
a duly completed UCC-1 financing statement showing the Company
as debtor
and the Trustee as secured party, each in a form sufficient for
filing,
evidencing the interest of such debtors in the Cooperative
Loans.
36
<PAGE>
(c) The Company may, in lieu of delivering the original of the
documents
set forth in Section 2.01(b)(I)(ii), (iii), (iv) and (v) and
Section
(b)(II)(ii), (iv), (vii), (ix) and (x) (or copies thereof as
permitted by
Section 2.01(b)) to the Trustee or the Custodian or Custodians,
deliver such
documents to the Master Servicer, and the Master Servicer shall
hold such
documents in trust for the use and benefit of all present and
future
Certificateholders until such time as is set forth in the next
sentence. Within
thirty Business Days following the earlier of (i) the receipt of
the original of
all of the documents or instruments set forth in Section
2.01(b)(I)(ii), (iii),
(iv) and (v) and Section (b)(II)(ii), (iv), (vii), (ix) and (x)
(or copies
thereof as permitted by such Section) for any Mortgage Loan and
(ii) a written
request by the Trustee to deliver those documents with respect
to any or all of
the Mortgage Loans then being held by the Master Servicer, the
Master Servicer
shall deliver a complete set of such documents to the Trustee or
the Custodian
or Custodians that are the duly appointed agent or agents of the
Trustee.
The parties hereto agree that it is not intended that any
Mortgage Loan
be included in the Trust Fund that is either (i) a "High-Cost
Home Loan" as
defined in the New Jersey Home Ownership Act effective November
27, 2003 or (ii)
a "High-Cost Home Loan" as defined in the New Mexico Home Loan
Protection Act
effective January 1, 2004.
(d) Notwithstanding the provisions of Section 2.01(c), in
connection
with any Mortgage Loan, if the Company cannot deliver the
original of the
Mortgage, any assignment, modification, assumption agreement or
preferred loan
agreement (or copy thereof as permitted by Section 2.01(b)) with
evidence of
recording thereon concurrently with the execution and delivery
of this Agreement
because of (i) a delay caused by the public recording office
where such
Mortgage, assignment, modification, assumption agreement or
preferred loan
agreement as the case may be, has been delivered for
recordation, or (ii) a
delay in the receipt of certain information necessary to prepare
the related
assignments, the Company shall deliver or cause to be delivered
to the Trustee
or the respective Custodian a copy of such Mortgage, assignment,
modification,
assumption agreement or preferred loan agreement.
The Company shall promptly cause to be recorded in the
appropriate
public office for real property records the Assignment referred
to in clause
(I)(iii) of Section 2.01(b), except (a) in states where, in the
opinion of
counsel acceptable to the Trustee and the Master Servicer, such
recording is not
required to protect the Trustee's interests in the Mortgage Loan
against the
claim of any subsequent transferee or any successor to or
creditor of the
Company or the originator of such Mortgage Loan or (b) if MERS
is identified on
the Mortgage or on a properly recorded assignment of the
Mortgage as the
mortgagee of record solely as nominee for the Seller and its
successors and
assigns, and shall promptly cause to be filed the Form UCC-3
assignment and
UCC-1 financing statement referred to in clause (II)(vii) and
(x), respectively,
of Section 2.01(b). If any Assignment, Form UCC-3 or Form UCC-1,
as applicable,
is lost or returned unrecorded to the Company because of any
defect therein, the
Company shall prepare a substitute Assignment, Form UCC-3 or
Form UCC-1, as
applicable, or cure such defect, as the case may be, and cause
such Assignment
to be recorded in accordance with this paragraph. The Company
shall promptly
deliver or cause to be delivered to the Trustee or the
respective Custodian such
37
<PAGE>
Mortgage or Assignment or Form UCC-3 or Form UCC-1, as
applicable, (or copy
thereof as permitted by Section 2.01(b)) with evidence of
recording indicated
thereon at the time specified in Section 2.01(c). In connection
with its
servicing of Cooperative Loans, the Master Servicer will use its
best efforts to
file timely continuation statements with regard to each
financing statement and
assignment relating to Cooperative Loans as to which the related
Cooperative
Apartment is located outside of the State of New York.
If the Company delivers to the Trustee or Custodian any Mortgage
Note or
Assignment of Mortgage in blank, the Company shall, or shall
cause the Custodian
to, complete the endorsement of the Mortgage Note and the
Assignment of Mortgage
in the name of the Trustee in conjunction with the Interim
Certification issued
by the Custodian, as contemplated by Section 2.02.
Any of the items set forth in Sections 2.01(b)(I)(ii), (iii),
(iv) and
(v) and (II)(vi) and (vii) and that may be delivered as a copy
rather than the
original may be delivered to the Trustee or the Custodian.
In connection with the assignment of any Mortgage Loan
registered on the
MERS(R) System, the Company further agrees that it will cause,
at th
| 
