<PAGE>
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This
is an Assignment, Assumption and Recognition Agreement (this
"AAR
Agreement") made as of January 1, 2007, among HSBC Bank, National
Association
(the "Assignor"), HSI Asset Securitization Corporation (the
"Assignee"),
CitiMortgage Inc. as Master Servicer (the "Master Servicer"),
Deutsche Bank
National Trust Company (the "Trustee") not individually but solely
as trustee on
behalf of the holders of the HSI Asset Loan Obligation Trust,
Series 2007-AR1,
Asset-Backed Certificates and Residential Funding Company, LLC (the
"Company").
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other
valuable consideration the receipt and sufficiency of which hereby
are
acknowledged, and of the mutual covenants herein contained, the
parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee
all
of the right, title and interest of the Assignor, as Owner in, and
to the
residential mortgage loans (the "Assigned Loans") listed on
Attachment 1 annexed
hereto (the "Assigned Loan Schedule") purchased by the Assignor
from the Company
pursuant to the certain Sale and Servicing Agreement, Adjustable
Rate Mortgage
Loans, dated as of July 1, 2006 by and between the Company and the
Assignor (the
"Servicing Agreement").
2. From and after the date hereof, the Company shall and does
hereby
recognize that the Assignee will transfer the Assigned Loans and
assign its
rights under the Servicing Agreement (solely to the extent set
forth herein) and
this AAR Agreement to HSI Asset Loan Obligation Trust 2007-AR1 (the
"Trust")
created pursuant to a Pooling and Servicing Agreement, dated as of
January 1,
2007 (the "Pooling Agreement"), among the Assignee as Depositor,
the Trustee,
the Master Servicer, Citibank, N.A. as Securities Administrator
(the "Securities
Administrator") and Wells Fargo Bank, N.A. as custodian (the
"Custodian"). The
Company hereby acknowledges and agrees that from and after the date
hereof (i)
the Trust will be the owner of the Assigned Loans, (ii) the Company
shall look
solely to the Trust for performance of any obligations of the
Assignor insofar
as they relate to the enforcement of the representations,
warranties and
covenants with respect to the Assigned Loans, and the Trust hereby
acknowledges
that it has assumed such representations, warranties and covenants
and that any
claim by the Company with respect thereto shall be made by written
notice to the
Trustee, (iii) the Trust shall have all the rights and remedies
available to the
Assignor, insofar as they relate to the Assigned Loans, under the
Servicing
Agreement, including, without limitation, the enforcement of the
document
delivery requirements and remedies with respect to breaches of
representations
and warranties set forth in the Servicing Agreement, and shall be
entitled to
enforce all of the obligations of the Company thereunder insofar as
they relate
to the Assigned Loans, and (iv) all references to the Purchaser
(insofar as they
relate to the rights, title and interest and, with respect to
obligations of the
Purchaser, only insofar as they relate to the enforcement of
the
representations, warranties and covenants of the Company) under the
Servicing
Agreement insofar as they relate to the Assigned Loans, shall be
deemed to refer
to the Trust. Neither the Company nor the Assignor shall amend or
agree to
amend, modify, waiver, or otherwise alter any of the terms or
provisions of the
Servicing Agreement which amendment,
1
<PAGE>
modification, waiver or other alteration would in any way affect
the Assigned
Loans or the Company's performance under the Servicing Agreement
with respect to
the Assigned Loans without the prior written consent of the
Assignee, the Master
Servicer and the Trustee. Any party requesting such amendment shall
provide to
the Assignee, the Master Servicer and the Trustee, at its own
expense, an
opinion of counsel stating that (i) such amendment is permitted
under the terms
of the Servicing Agreement and (ii) such amendment will not
materially and
adversely affect the interests of the holders of any securities
issued by the
Trust. The Company acknowledges that CitiMortgage, Inc. has been
appointed as
the Master Servicer of the Assigned Loans pursuant to this AAR
Agreement and
therefore has the right to enforce all obligations of the Company
as they relate
to the Assigned Loans under the Servicing Agreement and this AAR
Agreement.
3. The Assignor warrants and represents to, and covenants with,
the
Assignee, the Trust, the Company and the Master Servicer that:
(a) Attached hereto as Attachment 2 is a true and accurate copy
of the Servicing Agreement, which agreement is in full force and
effect as of
the date hereof and the provisions of which have not been waived,
amended or
modified in any respect, nor has any notice of termination been
given
thereunder;
(b) Assignor is the lawful owner of the Assigned Loans with
full
right to transfer the Assigned Loans and any and all of its
interests, rights
and obligations under the Servicing Agreement as they relate to the
Assigned
Loans, free and clear of any and all liens, claims and
encumbrances; and upon
the transfer of the Assigned Loans to Assignee as contemplated
herein, Assignee
shall have good title to each and every Assigned Loan, as well as
any and all of
Assignor's interests, rights and obligations under the Servicing
Agreement as
they relate to the Assigned Loans, free and clear of any and all
liens, claims
and encumbrances;
(c) Assignor has not received notice of, and has no knowledge
of,
any offsets, counterclaims or other defenses available to the
Company with
respect to the Assigned Loans or the Servicing Agreement;
(d) Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged sold or otherwise disposed of the
Mortgage Loans
or any interest in the Mortgage Loans to, or solicited any offer to
buy or
accept a transfer, pledge or other disposition of the Mortgage
Loans or any
interest in the Mortgage Loans from, or otherwise approached or
negotiated with
respect to the Mortgage Loans, any interest in the Mortgage Loans
with, any
Person in any manner, or made any general solicitation by means of
general
advertising or in any other manner, or taken any other action which
would
constitute a distribution of the Mortgage Loans under the
Securities Act of 1933
(the "Securities Act") or which would render the disposition of the
Mortgage
Loans a violation of Section 5 of the Securities Act or require
registration
pursuant thereto.
2
<PAGE>
(e) Assignor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
formation, and
has all requisite power and authority to acquire, own and sell the
Assigned
Loans;
(f) Assignor has full
power and authority to execute, deliver and
perform its obligations under this AAR Agreement, and to consummate
the
transactions set forth herein. The consummation of the transactions
contemplated
by this AAR Agreement is in the ordinary course of Assignor's
business and will
not conflict with, or result in a breach of, any of the terms,
conditions or
provisions of Assignor's charter or by-laws or any legal
restriction, or any
material agreement or instrument to which Assignor is now a party
or by which it
is bound, or result in the violation of any law, rule, regulation,
order,
judgment or decree to which Assignor or its property is subject.
The execution,
delivery and performance by Assignor of this AAR Agreement and the
consummation
by it of the transactions contemplated hereby, have been duly
authorized by all
necessary action on the part of Assignor. This AAR Agreement has
been duly
executed and delivered by Assignor and, upon the due authorization,
execution
and delivery by Assignee and Company, will constitute the valid and
legally
binding obligation of Assignor enforceable against Assignor in
accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization,
insolvency, moratorium or other similar laws now or hereafter in
effect relating
to creditors' rights generally, and by general principles of equity
regardless
of whether enforceability is considered in a proceeding in equity
or at law;
(g) No material consent, approval, order or authorization of,
or
declaration, filing or registration with, any governmental entity
is required to
be obtained or made by Assignor in connection with the execution,
delivery or
performance by Assignor of this AAR Agreement, or the consummation
by it of the
transactions contemplated hereby; and
(h) There is no action, suit, proceeding, investigation or
litigation pending or, to Assignor's knowledge, threatened, which
either in any
instance or in the aggregate, if determined adversely to Assignor,
would
adversely affect Assignor's execution or delivery of, or the
enforceability of,
this AAR Agreement, or the Assignor's ability to perform its
obligations under
this AAR Agreement.
4. The Assignee warrants and represents to, and covenants with,
the
Assignor, the Master Servicer, the Trustee and the Company pursuant
to Section
2.03 of the Servicing Agreement that:
(a) The Assignee agrees to be bound, as Owner by all of the
terms, covenants and conditions of the Servicing Agreement and the
Assigned
Loans and from and after the date hereof, the Assignee assumes for
the benefit
of each of the Company and the Assignor all of the Assignor's
obligations as
Owner thereunder;
(b) Assignee understands that the Assigned Loans have not been
registered under the Securities Act or the securities laws of any
state.
Assignee is acquiring the Assigned Loans not with a view to or for
sale or other
transfer in connection with any distribution of the Assigned Loans
in any manner
that would violate the Securities Act or any applicable state
securities law.
Assignee considers itself a substantial, sophisticated
institutional
3
<PAGE>
investor having such knowledge and experience in financial and
business matters
that it is capable of evaluating the merits and risks of investment
in the
Assigned Loans. Assignee has been furnished with all information
regarding the
Assigned Loans that it has requested from Assignor or the Company.
Neither the
Assignee nor anyone acting on its behalf has offered, transferred,
pledged, sold
or otherwise disposed of the Assigned Loans, any interest in the
Assigned Loans
to, or solicited any offer to buy or accept a transfer, pledge or
other
disposition of the Assigned Loans, any interest in the Assigned
Loans from, or
otherwise approached or negotiated with respect to the Assigned
Loans, any
interest in the Assigned Loans with, any Person in any manner, or
made any
general solicitation by means of general advertising or in any
other manner or
taken any other action, which would constitute a distribution of
the Assigned
Loans under the Securities Act or which would render the
disposition of the
Assigned Loans a violation of Section 5 of the Securities Act or
require
registration pursuant thereto, nor will it act, nor has it
authorized or will it
authorize any person to act, in such manner with respect to the
Assigned Loans;
(c) The Assignee is either (i) not an employee benefit plan
that
is subject to the Employee Retirement Income Security Act of 1974,
as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986 (the
"Code")(a
"Plan") and not a Person acting, directly or indirectly, on behalf
of or
investing with "plan assets" of any such Plan or (ii) an employee
benefit plan
that is subject to ERISA and the assignment contemplated herein
does not
constitute and will not result in a non-exempt prohibited
transaction under
Section 406 of ERISA or Section 4975 of the Code;
(d) The Assignee shall indemnify the Company and hold it
harmless
against any loss, liability or expense incurred in connection with
any claim,
demand, defense or assertion based on or grounded upon or resulting
from a
breach of the Assignee's representations, warranties and covenants
set forth in
this AAR Agreement.
(e) Assignee is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and
has all
requisite power and authority to acquire and own the Assigned
Loans;
(f) Assignee has full power and authority to execute, deliver
and
perform its obligations under this AAR Agreement, and to consummate
the
transactions set forth herein. The consummation of the transactions
contemplated
by this AAR Agreement is in the ordinary course of Assignee's
business and will
not conflict with, or result in a breach of, any of the terms,
conditions or
provisions of Assignee's organizational documentation or any legal
restriction,
or any material agreement or instrument to which Assignee is now a
party or by
which it is bound, or result in the violation of any law, rule,
regulation,
order, judgment or decree to which Assignee or its property is
subject. The
execution, delivery and performance by Assignee of this AAR
Agreement and the
consummation by it of the transactions contemplated hereby have
been duly
authorized by all necessary action on the part of Assignee. This
AAR Agreement
has been duly executed and delivered by Assignee and, upon the
due
authorization, execution and delivery by Assignor and Company, will
constitute
the valid and legally binding obligation of Assignee enforceable
against
Assignee in accordance with its terms except as enforceability may
be limited by
bankruptcy, reorganization, insolvency, moratorium or other similar
laws now or
hereafter in effect relating to creditors' rights generally, and by
general
4
<PAGE>
principles of equity regardless of whether enforceability is
considered in a
proceeding in equity or at law;
(g) No material consent, approval, order or authorization of,
or
declaration, filing or registration with, any governmental entity
is required to
be obtained or made by Assignee in connection with the execution,
delivery or
performance by Assignee of this AAR Agreement, or the consummation
by it of the
transactions contemplated hereby; and
(h) There is no action, suit, proceeding, investigation or
litigation pending or, to Assignee's knowledge, threatened, which
either in any
instance or in the aggregate, if determined adversely to Assignee,
would
adversely affect Assignee's execution or delivery of, or the
enforceability of,
this AAR Agreement, or the Assignee's ability to perform its
obligations under
this AAR Agreement.
5. The Company and the Assignor hereby agree to amend the terms of
the
Servicing Agreement solely with respect to the Assigned Loans as
follows:
(a) the following definition shall be added to Section 1.01
"Securities Administrator: Citibank, N.A.";
(b) the reference to "Owner" in the fourth paragraph of Section
3.02 shall be deleted and replaced with "Depositor, Master
Servicer
and Securities Administrator", and the reference to "Owner" in
the
fifth paragraph of Section 3.02 shall be replace with "Master
Servicer";
(c) the following shall be added as the last sentence of the
final paragraph of Section 3.03 "The Company shall provide
written
notice to the Depositor, the Master Servicer and the Securities
Administrator of any waiver of a Prepayment Charge.";
(d) the second sentence of Section 3.06 shall be deleted in its
entirety;
(e) the reference to "Owner" in Section 3.07(i) shall be
replaced
with "Master Servicer";
(f) the references to "Owner" in the tenth and thirteenth lines
of Section 3.12(b) shall be replaced with "Master Servicer";
(g) Section 3.12(c) shall be amended as follows:
(i) the phrase "Owner may, at the Owner's sole option" found
in the first and second lines thereof shall be replaced with
"Master Servicer or Depositor, each at its sole option, may";
(ii) the first reference to "Owner" found in the tenth line
thereof shall be replaced with "Master Servicer"; and
5
<PAGE>
(iii) the reference to "Owner" found at the beginning of the
last sentence thereof shall be replaced with phrase "Depositor
or
Master Servicer, as the case may be,";
(h) all references to "Owner" found in Section 3.13 shall be
replaced with "Master Servicer";
(i) the first paragraph of Section 4.01 shall be deleted in its
entirety and replaced with "On each Remittance Date, the Company
shall
distribute to the Master Servicer in accordance with the wire
transfer
instructions provided by the Master Servicer the Remittance
Amount.";
(j) the second paragraph of Section 4.01 shall be amended so
that
the reference to "Owner" found in the first, seventh and tenth line
of
that paragraph are replaced with "Master Servicer" and so that
the
reference to "Owner" in the third lines thereof shall be replaced
with
"Depositor";
(k) Section 4.02 shall be amended so that all references to
"Owner" shall be replaced with "Master Servicer";
(l) Section 4.03 shall be amended so that all references to
"Owner" shall be replaced with "Master Servicer";
(m) the reference to "Owner" found in the first line of Section
5.01(b) shall be replaced with "Depositor, Master Servicer and
Securities Administrator" and the reference to "Owner" found in
the
third line of Section 5.01(b) shall be replaced with
"Depositor,
Master Servicer or Securities Administrator";
(n) all
references to "Owner" in Sections 6.01(i) through (ix)
shall be replaced by "Master Servicer";
(o) the reference to "Owner" in the first and last line of
paragraph (i) of Section 6.01 shall be replaced with "Master
Servicer
or the Depositor" and the reference to "Owner" in the third and
last
line of paragraph (ii) of Section 6.01 shall be replaced with
"Master
Servicer or the Depositor"; and
(p) the reference to "Owner" in Section 7.01 shall be replaced
with "Master Servicer or Depositor."
6. Capitalized words and phrases used but not otherwise defined
in
this Assignment and Assumption Agreement shall have the respective
meanings
assigned to them in the Servicing Agreement.
6
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized
officers as of the
date first above written.
HSBC BANK USA, NATIONAL ASSOCIATION
Assignor
By:
---------------------------------
Name: Jon E. Voigtman
Title: Managing Director #14311
HSI Asset Securitization Corporation
By:
---------------------------------
Name: Andrea Lenox
Title: Vice President
Residential Funding Company, LLC
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Deutsche Bank National Trust Company,
as Trustee
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CitiMortgage, Inc., as Master
Servicer
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
7
<PAGE>
EXECUTION VERSION
RESIDENTIAL FUNDING CORPORATION,
THE COMPANY,
AND
HSBC BANK USA, NATIONAL ASSOCIATION,
THE INITIAL OWNER
STANDARD TERMS AND PROVISIONS OF
SALE AND SERVICING AGREEMENT
DATED AS OF JULY 1, 2006
RESIDENTIAL MORTGAGE LOANS
Series 2006-QWH20 (Initial Transaction)
<PAGE>
TABLE OF CONTENTS
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ARTICLE I
Definitions....................................................
1
Section 1.01.
Definitions.............................................
1
Section 1.02.
Calculations Respecting Accrued Interest................
13
ARTICLE II Conveyance of Mortgage
Loans.................................. 14
Section 2.01.
Conveyance of Mortgage Loans; Possession of Mortgage
Files...................................................
14
Section 2.02.
Acceptance by the Initial Owner; Repurchase.............
18
Section 2.03.
Assignment of Mortgage Loans............................
18
Section 2.04.
Representations and Warranties of the Company with
respect to the Mortgage Loans...........................
19
Section 2.05.
Representations, Warranties and Covenants of the
Initial Owner...........................................
31
Section 2.06.
Protection of Consumer Information......................
32
Section 2.07.
Repurchase of Certain Loans.............................
32
Section 2.08.
Purchase Price Protection...............................
32
Section 2.09.
Additional Representations and Warranties of the
Company.................................................
32
ARTICLE III Administration and Servicing of Mortgage
Loans............... 35
Section 3.01.
Company to Act as Servicer..............................
35
Section 3.02.
Agreements Between Company and Subservicer..............
35
Section 3.03.
Collection of Certain Mortgage Loan Payments and
Liquidation of Mortgage Loans...........................
36
Section 3.04.
Principal and Interest Accounts.........................
37
Section 3.05.
Escrow Accounts.........................................
37
Section 3.06.
Custodial Account.......................................
37
Section 3.07.
Permitted Withdrawals From the Custodial Account........
38
Section 3.08.
Permitted Instruments...................................
39
Section 3.09.
Primary Insurance Policies..............................
40
Section 3.10.
Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.........................
40
Section 3.11.
Enforcement of Due-On-Sale Clauses......................
41
Section 3.12.
Realization Upon Defaulted Mortgage Loans...............
43
Section 3.13.
Owner to Cooperate: Release of Mortgage Files...........
44
Section 3.14.
Annual Reports to the Owner.............................
45
Section 3.15.
REO Property............................................
46
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TABLE OF CONTENTS
(CONTINUED)
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Section 3.16.
Nonsolicitation.........................................
47
Section 3.17.
Tax Service Contract....................................
47
ARTICLE IV Payments to the
Owner......................................... 49
Section 4.01.
Distributions...........................................
49
Section 4.02.
Statements to the Owner.................................
49
Section 4.03.
Distribution Reports; Monthly Advances by the Company...
50
ARTICLE V The
Company....................................................
52
Section 5.01.
Liability of the Company and Others.....................
52
Section 5.02.
Merger or Consolidation of the Company..................
53
Section 5.03.
Company Resignation: Assignment of Agreement............
53
ARTICLE VI
Default.......................................................
53
Section 6.01.
Events of Default of the Company........................
53
Section 6.02.
Waiver of Defaults......................................
55
ARTICLE VII
Termination..................................................
55
Section 7.01.
Termination.............................................
55
ARTICLE VIII Compliance With Regulation
AB............................... 55
Section 8.01.
Intent of the Parties; Reasonableness...................
55
Section 8.02.
Additional Representations and Warranties of the
Company.................................................
56
Section 8.03.
Information to Be Provided by the Company...............
57
Section 8.04.
Use of Subservicers and Subcontractors..................
62
Section 8.05.
Indemnification; Remedies...............................
63
ARTICLE IX Miscellaneous
Provisions...................................... 67
Section 9.01.
Successor to the Company................................
67
Section 9.02.
Entire Agreement: Amendment.............................
67
Section 9.03.
GOVERNING LAW...........................................
67
Section 9.04.
Notices.................................................
67
Section 9.05.
Severability of Provisions..............................
68
Section 9.06. No
Partnership.......................................... 68
Section 9.07.
Exhibits................................................
68
Section 9.08.
Counterparts; Successors and Assigns....................
68
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(CONTINUED)
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EXHIBITS
EXHIBIT A - FORM OF REFERENCE AGREEMENT
EXHIBIT B - FORM OF SUBSERVICING AGREEMENT
EXHIBIT C - RESERVED
EXHIBIT D - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT E - FORM OF CERTIFICATION
EXHIBIT F - FORM OF REQUEST FOR RELEASE
EXHIBIT G - SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF
COMPLIANCE
EXHIBIT H - FORM OF ANNUAL CERTIFICATION
</TABLE>
-iii-
<PAGE>
This is a STANDARD TERMS AND PROVISIONS OF SALE AND SERVICING
AGREEMENT, Residential Mortgage Loans, Series 2006-QWH20, dated and
effective as
of July 1, 2006, by and between RESIDENTIAL FUNDING CORPORATION, as
seller and
master servicer (the "Company"), and HSBC BANK USA, NATIONAL
ASSOCIATION, as the
initial owner (the "Initial Owner"), together with all amendments
hereof and
supplements hereto (as it pertains to the Mortgage Pool and as
incorporated by
reference in and made a part of the Reference Agreement (as such
terms defined
below), the "Agreement").
PRELIMINARY STATEMENT
The Initial Owner has agreed to purchase from time to time from
the
Company and the Company has agreed to sell to the Initial Owner, on
a servicing
retained basis and without recourse, pools of adjustable rate
Mortgage Loans.
Each pool of Mortgage Loans will have the characteristics set forth
herein and
in the Reference Agreement, a form of which is attached as Exhibit
A hereto
(each, a "Reference Agreement"). The sale of the Mortgage Loans in
each Mortgage
Pool will be governed by the Reference Agreement together with this
Agreement,
which will be incorporated by reference into and made a part of the
Reference
Agreement.
In consideration of the premises and the mutual agreements
hereinafter
set forth, and intending to be legally bound, the Initial Owner and
the Company
agree hereby as follows:
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.
AAR: An Assignment and Assumption Agreement in the form of Exhibit
D
hereto.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those
mortgage servicing practices (including collection procedures) of
prudent
mortgage lending institutions that service loans of the same type
as such
Mortgage Loan in the jurisdiction where the related Mortgaged
Property is
located and in accordance with applicable law, the terms of the
Mortgage and
Mortgage Note and servicing practices acceptable to Fannie Mae for
MBS pool
mortgages.
Accrued Interest: With respect to each Remittance Date, one
month's
interest accrued at the then applicable Pass-Through Rate on the
aggregate
Principal Balance of the Mortgage Loans in the Mortgage Pool as of
the close of
business on the immediately preceding Remittance Date (or in the
case of the
first Remittance Date, the Cut-off Date). Accrued Interest will be
calculated on
the basis of a 360-day year consisting of twelve 30-day months. In
each case
Accrued Interest will be adjusted in accordance with Section
1.02.
<PAGE>
Acquisition Date: As defined in Section 3.15.
Adjustable Rate Mortgage Loan: A Mortgage Loan that provides
for
adjustment to the Mortgage Interest Rate applicable thereto on each
Adjustment
Date as set forth in the related Mortgage Note.
Adjustment Date: As to each Mortgage Loan, each date set forth in
the
related Mortgage Note on which an adjustment to the interest rate
on such
Mortgage Loan becomes effective.
Appraised Value: With respect to any Mortgaged Property,
generally,
the lesser of (a) the appraised value of such Mortgaged Property
based on an
appraisal made at the time of the origination or modification of
the related
Mortgage Loan by an appraiser who met the minimum requirements of
Fannie Mae and
Freddie Mac and the Financial Institutions Reform, Recovery, and
Enforcement Act
of 1989 and (b) the sale 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.
Assignment of Mortgage: With respect to each Mortgage Loan that is
not
a MERS Loan, an individual assignment of the Mortgage, notice of
transfer or
equivalent instrument in recordable form, sufficient under the laws
of the
jurisdiction wherein the related Mortgaged Property is located to
give record
notice of the sale of the Mortgage to the Owner.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii)
a
day on which banking institutions in the State of Minnesota, the
State of
California, the State of New York or the State of Illinois (or such
other state
or states in which the Custodial Account is at the time located)
are required or
authorized by law or executive order to be closed.
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of
which
were in excess of the principal balance of any existing first
mortgage on the
related Mortgaged Property and related closing costs, and were used
to pay any
such existing first mortgage, related closing costs and subordinate
mortgages on
the related Mortgaged Property.
Cash Receipts: As defined in Section 3.15.
Closing Date: As defined in the Reference Agreement.
Code: The Internal Revenue Code of 1986.
Combined Loan-to-Value Ratio or CLTV: With respect to any
Mortgage
Loan as of any date of determination, the ratio on such date of the
outstanding
principal amount of the Mortgage Loan and any other mortgage loan
which is
secured by a lien on the related Mortgaged Property to the
Appraised Value of
the Mortgaged Property.
Commission: The United States Securities and Exchange
Commission.
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Company: Residential Funding Corporation, a Delaware corporation,
or
its successor in interest, or any successor as herein provided.
Company Information: As defined in Section 8.05(a).
Condemnation Proceeds: All awards, compensation and settlements
in
respect of a taking of all or part of a Mortgaged Property by
exercise of the
power of condemnation or the right of eminent domain.
Consumer Information: Information, including, but not limited to,
all
personal information about the Mortgagors that is supplied to the
Initial Owner
by or on behalf of the Company.
Convertible Mortgage Loan: Any Mortgage Loan which by its terms
grants
to the related Mortgagor the option to convert the interest rate
borne by such
Mortgage Loan from an adjustable interest rate to a fixed interest
rate.
Custodial Account: The custodial account created and maintained
pursuant to Section 3.06.
Custodial Agreement: An agreement providing for the custody of
certain
original documents relating to the Mortgage Loans.
Custodian: The custodian under the Custodial Agreement, or its
successor in interest or assigns, or any successor to the Custodian
under the
Custodian Agreement, as therein provided.
Cut-off Date: As defined in the Reference Agreement.
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.
Depositor: The depositor, as such term is defined in Regulation
AB,
with respect to any Securitization Transaction.
Determination Date: With respect to any Remittance Date, the 15th
day
(or if such 15th day is not a Business Day, the Business Day
immediately
succeeding such 15th day) of the month in which such Remittance
Date occurs.
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Due Date: With respect to any Remittance Date, the first day of
the
calendar month in which such Remittance Date occurs, which is the
day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any
days of grace.
Due Period: With respect to any Remittance Date, the period
commencing
on the second day of the month preceding the month of such
Remittance Date and
ending on the related Due Date.
Eligible Account: Either (i) an account or accounts maintained with
a
federal or state chartered depository institution or trust company
the
short-term unsecured debt obligations of which (or, in the case of
a depository
institution or trust company that is the principal subsidiary of a
holding
company, the short-term unsecured debt obligations of such holding
company) are
rated A-1 by Standard & Poor's or Prime-1 by Moody's Investors
Service (or a
comparable rating if another rating agency is specified by the
Initial Owner by
written notice to the Company) at the time any amounts are held on
deposit
therein, or (ii) a trust account or accounts maintained with a
federal or state
chartered depository institution or trust company acting in its
fiduciary
capacity. Eligible Accounts may bear interest.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, Primary Insurance Policy
premiums, fire
and hazard insurance premiums and other payments required to be
escrowed by the
Mortgagor with the Mortgagee pursuant to the terms of any Mortgage
Note or
Mortgage.
Exchange Act: The Securities Exchange Act of 1934, as amended.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: As defined in Section 6.01.
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.
Fannie Mae Guides: The Fannie Mae Selling Guide and the Fannie
Mae
Servicing Guide and all amendments or additions thereto, including,
but not
limited to, future updates thereof.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement
Act of 1989, as amended.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which
the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for
the term of
such Mortgage Loan.
Flood Zone Service Contract: A transferable contract maintained
for
the Mortgaged Property with a nationally recognized flood zone
service provider
for the purpose of obtaining the current flood zone status relating
to such
Mortgaged Property.
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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.
Full Prepayment: Any payment of the entire principal balance of
a
Mortgage Loan which is received in advance of its scheduled Due
Date and is not
accompanied by an amount of interest representing scheduled
interest due on any
date or dates in any month or months subsequent to the month of
prepayment.
Gross Margin: As to each Mortgage Loan, the fixed percentage set
forth
in the related Mortgage Note and indicated on the related Mortgage
Loan Schedule
as the "NOTE MARGIN", which percentage is added to the Index on
each Adjustment
Date to determine (subject to rounding in accordance with the
related Mortgage
Note, Maximum Interest Rate and Minimum Interest Rate) the interest
rate to be
borne by such Mortgage Loan until the next Adjustment Date
thereof.
HUD: The United States Department of Housing and Urban Development
or
any successor thereto.
Index: As defined in the Reference Agreement.
Insurance Proceeds: Proceeds paid in respect of any Mortgage
Loan
pursuant to any insurance policy covering such Mortgage Loan to the
extent such
proceeds are payable to the mortgagee under the Mortgage, any
Subservicer or the
Company and are not applied to the restoration of the related
Mortgaged Property
or released to the Mortgagor in accordance with the procedures set
forth in the
Program Guide.
Insured Expenses: Expenses covered by any mortgage insurance
policy,
any replacement insurance policy or policies or any other insurance
policy.
Liquidated Mortgage Loan: A Mortgage Loan as to which payment has
been
made to the Company of all Liquidation Proceeds and other payments
or recoveries
which the Company deems to be finally recoverable.
Liquidation Expenses: Expenses which are incurred by the Company
in
connection with the liquidation of any defaulted Mortgage Loan (to
the extent
such amount is reimbursable under the terms of this Agreement or
the Program
Guide) and not recovered by the Company under any insurance policy
for reasons
other than the Company's failure to comply with Section 3.09 or
3.10.
Liquidation Proceeds: Cash (including Insurance Proceeds and
Condemnation Proceeds, received in connection with the liquidation
of defaulted
Mortgage Loans, whether through trustee's sale, condemnation,
foreclosure sale
or otherwise, net of Liquidation Expenses.
Loan-to-Value Ratio: As of any date, the fraction, expressed as
a
percentage, the numerator of which is the 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.
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Master Servicer: With respect to any Securitization Transaction,
the
"master servicer," if any, identified in the related transaction
documents.
Maximum Interest Rate: As to any Mortgage Loan, the maximum
interest
rate that may be borne by such Mortgage Loan as set forth in the
related
Mortgage Note and indicated in the related Mortgage Loan Schedule
as the "NOTE
CEILING," which rate may be applicable to such Mortgage Loan at any
time during
the life of such Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
MERS Loan: Any Loan registered with MERS on the MERS System.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number of Mortgage Loans
registered
with MERS on the MERS(R) System.
Minimum Interest Rate: As to any Mortgage Loan, the greater of (i)
the
Gross Margin and (ii) the rate indicated in the related Mortgage
Loan Schedule
as the "NOTE FLOOR," which rate may be applicable to such Mortgage
Loan at any
time during the life of such Mortgage Loan.
Monthly Advance: The aggregate of the advances made by the
Company
with respect to any Remittance Date pursuant to Section 4.03, the
amount of any
such Monthly Advance being equal to the aggregate of the principal
portion of
such Monthly Payments on the Mortgage Loans which were due on the
related Due
Date but extended pursuant to Section 3.03 or delinquent (in whole
or in part)
as of the close of business on the Business Day immediately
preceding the
related Remittance Date, plus the interest portion of such Monthly
Payments
adjusted to the related Mortgage Loan Remittance Rates, and less
the amount of
any advances which the Company has determined would constitute
Nonrecoverable
Monthly Advances, if made.
Monthly Payment: With respect to any Mortgage Loan and any month,
the
scheduled monthly payment of principal and interest on such
Mortgage Loan which
is payable by a Mortgagor in such month under the related Mortgage
Note.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first or second lien on a fee simple interest in real property
securing a
Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and
the
successors and assigns of such mortgagee or beneficiary.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan which shall be delivered
to the
Custodian, as the duly appointed agent of the Owner, or as
otherwise agreed by
the parties to this Agreement and the Custodian, if any,
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<PAGE>
in writing, and any additional documents required to be added to
the Mortgage
File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues
on
any Mortgage Loan. The Mortgage Interest Rate for each Mortgage
Loan as of the
Cut-off Date will be the rate indicated as the "CURR RATE" on the
Mortgage Loan
Schedule and will be adjusted on each Adjustment Date to a rate
equal to the sum
of the Index applicable to such Adjustment Date and the Gross
Margin, rounded to
the nearest multiple of 0.125%, subject to the application of the
applicable
Maximum Interest Rate and Minimum Interest Rate.
Mortgage Loan: An individual mortgage loan which is the subject
of
this Agreement and identified on the Mortgage Loan Schedule.
Mortgage Loan Documents: The documents contained in a Mortgage
File.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan
and
Due Date occurring prior to the first Adjustment Date for such
Mortgage Loan
occurring after the Cut-off Date, the rate designated as the "NET
MTG RT" for
such Mortgage Loan on the related Mortgage Loan Schedule. With
respect to each
Mortgage Loan and each Due Date occurring on or after each
Adjustment Date, a
rate equal to the then-applicable Mortgage Interest Rate minus the
sum of the
then-applicable Servicing Fee Rate and Subservicing Fee Rate.
Mortgage Loan Schedule: With respect to each Mortgage Pool, the
schedule of Mortgage Loans annexed to each Reference Agreement in
both hard copy
and in electronic format acceptable to the Company and the Initial
Owner, such
schedule setting forth the following information with respect to
each Mortgage
Loan in the Mortgage Pool: (1) the Seller's Mortgage Loan
identifying number;
(2) the Mortgagor's first and last name; (3) the street address of
the Mortgaged
Property including the state and zip code; (4) a code indicating
whether the
Mortgaged Property is owner-occupied; (5) the type of Residential
Dwelling
constituting the Mortgaged Property; (6) the original months to
maturity; (7)
the original date of the Mortgage Loan; (8) the Loan-to-Value Ratio
or Combined
Loan-to-Value Ratio at origination; (9) the Mortgage Interest Rate
in effect
immediately following the Cut-off Date; (10) the date on which the
first Monthly
Payment was due on the Mortgage Loan; (11) the stated maturity
date; (12) the
amount of the Monthly Payment at origination; (13) the amount of
the Monthly
Payment as of the Cut-off Date; (14) the last Due Date on which a
Monthly
Payment was actually applied to the unpaid Stated Principal
Balance; (15) the
original principal amount of the Mortgage Loan; (16) the Stated
Principal
Balance of the Mortgage Loan; as of the close of business on the
Cut-off Date;
(17) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment
Date; (18) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin;
(19) a code indicating the purpose of the loan (i.e., purchase
financing,
Rate/Term Refinancing, Cash-Out Refinancing); (20) with respect to
each
Adjustable Rate Mortgage Loan, the Maximum Mortgage Interest Rate
under the
terms of the Mortgage Note; (21) with respect to each Adjustable
Rate Mortgage
Loan, the Minimum Mortgage Interest Rate under the terms of the
Mortgage Note;
(22) the Mortgage Interest Rate at origination; (23) with respect
to each
Adjustable Rate Mortgage Loan, the Periodic Rate Cap; (24) with
respect to each
Adjustable Rate Mortgage Loan, the first Adjustment Date
immediately following
the Cut-off Date; (25) with respect to each Adjustable Rate
Mortgage Loan, the
Index; (26) the date on which the
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first Monthly Payment was due on the Mortgage Loan and, if such
date is not
consistent with the Due Date currently in effect, such Due Date;
(27) a code
indicating the documentation style (i.e., full (providing two years
employment
verification - 2 years W-2's and current pay stub or 2 years 1040's
for self
employed borrowers), alternative or reduced); (28) a code
indicating whether the
Mortgage Loan is an Adjustable Rate Mortgage Loan or a Fixed Rate
Mortgage Loan;
(29) the Appraised Value of the Mortgaged Property; (30) the sale
price of the
Mortgaged Property, if applicable; (31) a code indicating whether
the Mortgage
Loan is subject to a Prepayment Charge or penalty; (32) the term of
any
Prepayment Charge or penalty; (33) with respect to each MERS
Mortgage Loan, the
related MIN; (34) reserved; (35) a code indicating if the Mortgage
Loan is an
interest-only Mortgage Loan and, if so, the term of the
interest-only period of
such Mortgage Loan; (36) a code indicating whether the Mortgage
Loan is a first
or second lien; (37) a code indicating whether the Mortgage Loan is
a Balloon
Mortgage Loan and, if so, the term of the Balloon Mortgage Loan;
and (38) a code
indicating if the Mortgage Loan is subject to a Primary Insurance
Policy, and if
so, the insurer. With respect to the Mortgage Loan Pool in the
aggregate, the
Mortgage Loan Schedule shall set forth the following information,
as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the
current
principal balance of the Mortgage Loans; (3) the weighted average
Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of
the Mortgage Loans.
Mortgage Note: The originally executed note evidencing the
indebtedness of a Mortgagor under a Mortgage Loan and any
modification thereto.
Mortgage Pool: Each pool of Mortgage Loans conveyed by the Company
to
the Initial Owner from time to time pursuant to a Reference
Agreement
referencing this Agreement.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: With respect to any Mortgage Loan (or the
related
REO Property), as of any date of determination, a per annum rate of
interest
equal to the then applicable Mortgage Interest Rate for such
Mortgage Loan minus
the Servicing Fee Rate.
Negative Amortization: With respect to each Negative
Amortization
Mortgage Loan, that portion of interest accrued at the Mortgage
Interest Rate in
any month that exceeds the Monthly Payment on the related Mortgage
Loan for such
month and which, pursuant to the terms of the Mortgage Note, is
added to the
principal balance of the Mortgage Loan.
Negative Amortization Cap: With respect to each Negative
Amortization
Mortgage Loan, the provision of each Mortgage Note that provides
for an absolute
maximum percentage of the original principal amount of such
Mortgage Loan that
the outstanding principal amount of the Mortgage Loan may reach as
a result of
Negative Amortization as specified on the Mortgage Loan
Schedule.
Negative Amortization Mortgage Loan: Each Mortgage Loan that is
identified on the Mortgage Loan Schedule as a Mortgage Loan that
may be subject
to Negative Amortization.
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<PAGE>
Nonrecoverable Monthly Advance: Any Monthly Advance previously made
or
proposed to be made by the Company which, in the good faith
judgment of the
Company, is not or, in the case of a proposed Monthly Advance,
would not be
ultimately recoverable by the Company from Liquidation Proceeds or
otherwise.
Opinion of Counsel: A written opinion of counsel, who may,
unless
otherwise provided herein, be counsel for the Company and which
opinion is
reasonably acceptable to each Person to whom such opinion is
addressed.
Owner: Any Person from time to time having an Ownership Interest
in
the Mortgage Loans.
Ownership Interest: The undivided ownership interest in a
Mortgage
Pool.
Partial Prepayment: Any payment of principal on a Mortgage Loan,
other
than a Full Prepayment, which is received in advance of its
scheduled Due Date
and is not accompanied by an amount of interest representing
scheduled interest
due on any date or dates in any month or months subsequent to the
month of
prepayment.
Pass-Through Rate: As to any Remittance Date, a rate equal to
the
weighted average, expressed as a percentage, of the Mortgage Loan
Remittance
Rates of all Mortgage Loans in a Mortgage Pool as of the close of
business on
the Due Date in the month preceding the month in which such
Remittance Date
occurs, weighted on the basis of the respective Principal Balances
of such
Mortgage Loans, which Principal Balances shall be the Principal
Balances of such
Mortgage Loans immediately prior to such Remittance Date.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan
and any Adjustment Date therefor, a number of percentage points per
annum that
is set forth in the related Mortgage Loan Schedule and in the
related Mortgage
Note, which is the maximum amount by which the Mortgage Interest
Rate for such
Adjustable Rate Mortgage Loan may increase (without regard to the
Maximum
Interest Rate) or decrease (without regard to the Minimum Interest
Rate) on such
Adjustment Date from the Mortgage Interest Rate in effect
immediately prior to
such Adjustment Date.
Permitted Instrument: As defined in Section 3.08.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint stock company, trust,
unincorporated
organization or government or any agency or political subdivision
thereof.
Plan: As defined in Section 2.03.
Prepayment Charge: With respect to any Mortgage Loan, the charges
or
premiums, if any, received or payable in connection with a full or
partial
prepayment of such Mortgage Loan in accordance with the terms of
the related
Mortgage Note or Mortgage.
Primary Mortgage Insurance Policy: Each policy of primary
mortgage
insurance or any replacement policy therefor issued by a Qualified
Insurer.
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Principal Balance: As to each Mortgage Loan, as of the time of
any
determination, (i) the principal balance remaining to be paid by
the Mortgagor
at the close of business on the Cut-off Date, after deduction of
all payments
allocable to principal due on or before the Cut-off Date whether or
not
collected from the Mortgagor on or before such date, minus (ii) all
amounts
distributed to the Owner with respect to such Mortgage Loan and
reported to the
Owner as allocable to principal, including the principal component
of any
Monthly Advances.
Principal Remittance Amount: With respect to any Remittance Date,
the
sum of (a) the principal component of any Monthly Advance for such
Remittance
Date; (b) any amount required to be deposited in the Custodial
Account pursuant
to Section 3.10(a); and (c) the amount on deposit in the Custodial
Account as of
the close of business on the Determination Date immediately
preceding such
Remittance Date which is allocable to payments on account of
principal of the
Mortgage Loans, which amount shall not include (i) Full Prepayments
and Partial
Prepayments and the principal portion of any Liquidation Proceeds,
Insurance
Proceeds or proceeds of the purchase of any Mortgage Loan pursuant
to Sections
2.02 and 2.04 received in the month in which such Remittance Date
occurs (other
than such Liquidation Proceeds, Insurance Proceeds or proceeds of
the purchase
of any Mortgage Loan pursuant to Sections 2.02 and 2.04 that the
Company has
deemed to have been received in the preceding month), (ii) payments
which
represent receipt of scheduled payments of principal due on a date
or dates
subsequent to the related Due Date and (iii) late payments of
principal which
have been the subject of a previous Monthly Advance and which are
eligible for
withdrawal pursuant to clauses (ii) or (vii) of Section 3.07.
Program Guide: Collectively, the Client Guide and the Servicer
Guide
for Residential Funding Corporation's mortgage loan purchase and
conduit
servicing program and all supplements and amendments thereto
published by
Residential Funding Corporation from time to time. As of the date
of this
Agreement the Program Guide is consistent with the Fannie Mae
Guides except as
previously reported in writing to the Initial Owner.
Purchase Price: As defined in the Reference Agreement.
Purchase Price Percentage: As defined in the Reference Agreement
or
related commitment letter.
Qualified Correspondent: Any Person from which the Company
purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the
Company and
such Person that contemplated that such Person would underwrite
mortgage loans
from time to time, for sale to the Company, in accordance with
underwriting
guidelines designated by the Company ("Designated Guidelines") or
guidelines
that do not vary materially from such Designated Guidelines; (ii)
such Mortgage
Loans were in fact underwritten as described in clause (i) above
and were
acquired by the Company within 180 days after origination; (iii)
either (x) the
Designated Guidelines were, at the time such Mortgage Loans were
originated,
used by the Company in origination of mortgage loans of the same
type as the
Mortgage Loans for the Company's own account or (y) the Designated
Guidelines
were, at the time such Mortgage Loans were underwritten, designated
by the
Company on a consistent basis for use by lenders in
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originating mortgage loans to be purchased by the Company; and (iv)
the Company
employed, at the time such Mortgage Loans were acquired by the
Company,
pre-purchase or post-purchase quality assurance procedures (which
may involve,
among other things, review of a sample of mortgage loans purchased
during a
particular time period or through particular channels) designed to
ensure that
Persons from which it purchased mortgage loans properly applied the
underwriting
criteria designated by the Company.
Qualified Insurer: An insurance company duly qualified as such
under
the laws of the states in which the Mortgaged Properties are
located, duly
authorized and licensed in such states to transact the applicable
insurance
business and to write the insurance provided by the insurance
policy issued by
it, approved as an insurer by Fannie Mae and Freddie Mac.
Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
Reconstitution Agreement: An agreement entered into by the Company
and
the Initial Owner and/or certain third parties in connection with
a
Reconstitution with respect to any or all of the Mortgage Loans
serviced under
this Agreement.
Record Date: With respect to each Remittance Date, the close of
business on the last Business Day of the month next preceding the
month in which
the related Remittance Date occurs.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which
were
not used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation
AB), 17 C.F.R. Sections 229.1100-229.1123, as such may be amended
from time to
time, and subject to such clarification and interpretation as have
been provided
by the Commission in the adopting release (Asset-Backed Securities,
Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the
staff of the Commission, or as may be provided by the Commission or
its staff
from time to time.
Remittance Amount: With respect to any Remittance Date, an
amount
equal to, subject to Section 1.02, (i) the Principal Remittance
Amount (if any)
for such Remittance Date, plus (ii) the Accrued Interest for such
Remittance
Date, minus (iii) any amounts payable to the Company pursuant to
Section 3.07
that are not taken into account in the adjustment of Accrued
Interest pursuant
to Section 1.02.
Remittance Date: The 18th day of any month, beginning in the
month
following the month in which the Cut-off Date occurs, or, if such
18th day is
not a Business Day, the first Business Day immediately
following.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to
the sum of (i) the product of the Principal Balance of such
Mortgage Loan,
multiplied by the greater of (x) the Purchase Price Percentage and
(y) 100%,
plus (ii) interest on such Principal Balance at the Mortgage
Interest Rate from
and including the last Due Date through which interest has been
paid by or on
behalf of the Mortgagor to the last day of the month in which such
repurchase
occurs, less amounts received in respect of such repurchased
Mortgage Loan that
are being held
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<PAGE>
in the Custodial Account for distribution in connection with such
Mortgage Loan,
plus (iii) any unreimbursed Servicing Advances and Monthly Advances
(including
Nonrecoverable Monthly Advances) and any unpaid servicing fees
allocable to such
Mortgage Loan paid by any party other than the Company, plus (iv)
any costs and
expenses incurred by the Owner, the servicer, master servicer or
any trustee in
respect of the breach or defect giving rise to the repurchase
obligation
including, without limitation, any costs and damages incurred by
any such party
in connection with any violation by any such Mortgage Loan of any
predatory or
abusive lending law.
REO Disposition: The final sale by the Company of any REO
Property.
REO Property: A Mortgaged Property acquired by the Owner or the
Company on behalf of the Owner through foreclosure or deed in lieu
of
foreclosure.
Request for Release: A request for release, the form of which
is
attached as Exhibit F hereto, or an electronic request in a form
acceptable to
the Custodian.
Securities Act:
The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1)
a
sale or other transfer of some or all of the Mortgage Loans
directly or
indirectly to an issuing entity in connection with an issuance of
publicly
offered or privately placed, rated or unrated mortgage-backed
securities or (2)
an issuance of publicly offered or privately placed, rated or
unrated
securities, the payments on which are determined primarily by
reference to one
or more portfolios of residential mortgage loans consisting, in
whole or in
part, of some or all of the Mortgage Loans.
Seller: As to any Mortgage Loan, a Person that executed a
Seller's
Agreement applicable to such Mortgage Loan.
Seller's Agreement: An agreement for the origination and sale
of
Mortgage Loans in the form referred to in the Program Guide or in
such other
form as has been approved by the Company.
Servicer: As defined in Section 8.03(c).
Servicing Advances: All customary, reasonable and necessary
"out-of-pocket" costs and expenses incurred by the Company in the
performance of
its servicing obligations, including, but not limited to, the cost
of (i)
preservation, restoration and repair of a Mortgaged Property, (ii)
any
enforcement or judicial proceedings with respect to a Mortgage
Loan, including
foreclosure actions and (iii) the management and liquidation of REO
Property.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d)
of Regulation AB, as such may be amended from time to time.
Servicing Fee: As to each Mortgage Loan, the annual fee,
payable
monthly to the Company out of the interest portion of the Monthly
Payment or
other collections received on each Mortgage Loan.
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Servicing Fee Rate: As defined in the Reference Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained
by the Company consisting of originals of all documents in the
Mortgage File
that are not delivered to the Initial Owner or the Custodian and
copies of the
Mortgage Loan Documents.
Servicing Performance Test or Trigger: A percentage of
delinquencies
and/or losses realized on mortgage loans included in a
securitization
transaction that, if exceeded, permits a third party credit
enhancer to replace
the Company or a Servicer as master servicer or servicer.
Static Pool Information: Static pool information as described in
Item
1l05(a)(l)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing (as "servicing" is commonly
understood by
participants in the mortgage-backed securities market) of Mortgage
Loans but
performs one or more discrete functions identified in Item l122( d)
of
Regulation AB with respect to Mortgage Loans under the direction or
authority of
the Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of
the
Company or any Subservicer and is responsible for the performance
(whether
directly or through Subservicers or Subcontractors) of a
substantial portion of
the material servicing functions required to be performed by the
Company under
this Agreement or any Reconstitution Agreement that are identified
in Item
1122(d) of Regulation AB.
Subservicing Agreement: The written contract between the Company
and a
Subservicer as may be amended from time to time, a representative
form of which
is attached hereto as Exhibit B.
Subservicing Fee: The annual fee, payable monthly to the
Subservicer
out of the interest portion of the Monthly Payment received on each
Mortgage
Loan.
Subservicing Fee Rate: As defined in the Reference Agreement.
Successor Servicer: Any successor master servicer appointed
pursuant
to Section 9.01.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
Section 1.02 Calculations Respecting Accrued Interest. (a) Except
as
specifically provided in Section 3.06(viii), in the case of a
Partial
Prepayment, the Accrued Interest on the Remittance Date in the next
succeeding
month shall be reduced by one month's interest at the Mortgage Loan
Remittance
Rate on the amount of such Partial Prepayment. Except as
specifically provided
in Section 3.06(viii), in the case of a Full Prepayment, the
Accrued Interest on
the Remittance Date in the next succeeding month shall be reduced
by the excess,
if any, of (i) one month's interest at the applicable Mortgage Loan
Remittance
Rate on
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the Principal Balance of such Mortgage Loan, over (ii) the amount
of any payment
of interest which accompanied such Full Prepayment (after
adjustment for the
Servicing Fee and Subservicing Fee for the number of days covered
by such
payment of interest).
(b) In the event that the Liquidation Proceeds with respect to
any
Mortgage Loan (net of amounts payable or reimbursable therefrom
pursuant to
Sections 3.07(iii) and 3.07(iv)) are less than the Principal
Balance of such
Mortgage Loan, together with one month's interest thereon at the
applicable
Mortgage Loan Remittance Rate, the Accrued Interest on the
Remittance Date in
the next succeeding month shall be reduced by the amount of such
insufficiency.
(c) In the event that any amount or amounts shall be withdrawn
from
amounts attributable to the Mortgage Loans on deposit in the
Custodial Account
pursuant to clauses (ii), (iii) (other than for servicing
compensation), (iv),
(v), (vi), (vii), (viii) or (ix) of Section 3.07 and the related
withdrawal or
withdrawals shall not be reflected in any adjustment required
pursuant to
subsections (a) and (b) above, the Accrued Interest on the
immediately
succeeding Remittance Date shall be reduced by the total of such
amounts so
withdrawn to the extent such amounts would result in a shortfall of
Accrued
Interest.
(d) In the event that as of the end of any Due Period, for any
reason
(including, without limitation, acquisition of title to the
underlying Mortgaged
Property through foreclosure or acceptance of a deed in lieu of
foreclosure,
application of the Servicemembers' Civil Relief Act or similar
legislation or
regulations as in effect from time to time, or a Debt Service
Reduction or a
Deficient Valuation), less than the full amount of the interest
portion of the
Monthly Payment at the Mortgage Loan Remittance Rate due on the Due
Date in such
Due Period on any Mortgage Loan is deposited in the Custodial
Account and no
Monthly Advance is made or required to be made in respect thereof,
the Accrued
Interest on the immediately succeeding Remittance Date shall be
reduced by the
amount of such insufficiency.
(e) In the event that on or in the month of any Due Date (after
adjustment for the Subservicing Fee and Servicing Fee) more than
one month's
interest at the applicable Mortgage Loan Remittance Rate on the
Principal
Balance of any Mortgage Loan is deposited in the Custodial Account
as a result
of late recoveries of interest in respect of which no Monthly
Advance was made
in respect of such amount, the Accrued Interest on the immediately
succeeding
Remittance Date shall be increased by the amount of such
excess.
(f) All references to the Principal Balance of any Mortgage Loan
in
this Section 1.02 are to the Principal Balance of such Mortgage
Loan as of the
close of business on the Remittance Date immediately preceding the
Remittance
Date in respect of which the Accrued Interest thereon is being
adjusted pursuant
to the applicable subsection of this Section 1.02 or, in the case
of the first
Remittance Date, as of the Cut-off Date.
ARTICLE II
Conveyance of Mortgage Loans
Section 2.01 Conveyance of Mortgage Loans; Possession of
Mortgage
Files.
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<PAGE>
(a) The Company, simultaneously with the execution and delivery of
the
Reference Agreement and payment of the Purchase Price, shall hereby
sell,
transfer and assign, without recourse, to the Initial Owner the
Ownership
Interest comprising all the right, title and interest of the
Company in and to
the Mortgage Loans, including all interest at the applicable
Mortgage Loan
Remittance Rate and principal received on or with respect to the
Mortgage Loans
after the Cut-off Date defined in the applicable Reference
Agreement (other than
payments of principal and interest due on the Mortgage Loans on or
before the
Cut-off Date) on a servicing retained basis.
(b) Record title to each Note and the related Mortgage as of
the
Closing Date shall be in the name of the Company, the Initial Owner
or one or
more designees of the Initial Owner, as the Initial Owner shall
designate.
Notwithstanding the foregoing, beneficial ownership of each Note
and the related
Mortgage shall be vested solely in the Initial Owner. All rights
arising out of
the Mortgage Loans including, but not limited to, all funds
received by the
Company after the Cut-off Date on or in connection with a Mortgage
Loan shall be
vested in the Initial Owner or one or more designees of the Initial
Owner;
provided, however, that all such funds received on or in connection
with a
Mortgage Loan shall be received and held by the Company in trust
for the benefit
of the Owner as the owner of the Mortgage Loans pursuant to the
terms of this
Agreement.
It is the express intention of the parties that the
transactions
contemplated by this Agreement be, and be construed as, a sale of
the Mortgage
Loans by the Company and not a pledge of the Mortgage Loans by the
Company to
the Initial Owner to secure a debt or other obligation of the
Company.
Consequently, the sale of each Mortgage Loan shall be reflected as
a sale on the
Company's business records, tax returns and financial
statements.
(c) In connection with the Company's sale of the Mortgage Loans to
the
Initial Owner pursuant to the Reference Agreement, the Company
shall deliver to,
and deposit with, the Custodian, as the duly appointed agent of the
Owner for
such purpose, the following original documents or instruments (or
copies thereof
as permitted by this Section) with respect to each Mortgage Loan so
assigned:
(i) The original Mortgage Note, endorsed in blank by the
Company
without recourse, and showing an unbroken chain of endorsements
from the
originator thereof to the Company or an original lost note
affidavit from
the
related Seller or the Company 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
MERS Loan
if
the Mortgage Loan is a MERS 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 unrecorded original Assignment of Mortgage, in
recordable form,
from
the Company in blank;
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<PAGE>
(iv) The original recorded assignment or assignments of the
Mortgage showing an unbroken chain of title from the originator
thereof to
the
Company (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;
(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;
(vi) The original of each guarantee executed in connection with
the
Mortgage Note, if any; and
(vii) if the Mortgage Note, the Mortgage, any Assignment of
Mortgage or any other related document has been signed by a Person
on
behalf of the Mortgagor, the original power of attorney or other
instrument
that
authorized and empowered such Person to sign.
The Company may, in lieu of delivery of the original of the
documents
set forth in Section 2.01(c)(ii) through (vi) (or copies thereof as
permitted by
Section 2.01(c)) to the Custodian, retain such documents and hold
such documents
in trust for the use and benefit of all present and future Owners
until 30 days
following the receipt of the original of all of the documents or
instruments set
forth in Section 2.01(c)(ii) through (vi) (or copies thereof as
permitted by
such Section) for any Mortgage Loan. At such time, the Company
shall deliver a
complete set of such documents to the Custodian as the duly
appointed agent of
the Owner.
In the event that the Company has been notified by the Custodian
that
it has delivered to the Custodian any Mortgage Note endorsed in
blank or
Assignment of Mortgage in blank by a party other than the Company,
the Company
shall, or shall cause the Custodian to, complete the endorsement of
the Mortgage
Note and Assignment of Mortgage into the name of the Company and
deliver an
endorsement in blank by the Company and an Assignment of Mortgage
from the
Company in blank.
(d) Notwithstanding the provisions of Section 2.01(c), in the
event
that in connection with any Mortgage Loan the Company cannot
deliver the
original of the Mortgage, any assignment, modification, assumption
agreement or
preferred loan agreement (or a copy thereof as permitted by Section
2.01(c))
with evidence of recording thereon concurrently with the execution
and delivery
of this Agreement because of (i) a delay caused by a 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 to the Custodian a certified
copy of such
Mortgage, assignment, modification, assumption agreement or
preferred loan
agreement. The Company shall promptly deliver to the Custodian such
Mortgage,
assignment, modification, assumption agreement or preferred loan
agreement with
evidence of recording indicated thereon in accordance with Section
2.01(c).
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<PAGE>
(e) If the original or copy of any document submitted for
recordation
to the appropriate recording office is not delivered to the Initial
Owner or its
designee within 180 days following the related Closing Date due to
a delay at
the applicable recording office, the Company shall deliver to the
Initial Owner
an officer's written certification certifying that the delay in
delivering the
original recorded document to the Initial Owner is due to delays at
the
applicable recording office and that the Company shall deliver the
original
recorded documents no later than 270 days after the related Closing
Date.
The Company shall provide to each of the Initial Owner and the
Custodian a notice containing a list of authorized servicing
personnel (each, an
"Authorized Representative") for the purpose of giving and
receiving notices,
requests and instructions and delivering certificates and documents
in
connection with this Agreement. Such notice shall contain the
specimen signature
for each Authorized Representative. From time to time, the Company
may, by
delivering to the others a revised notice, change the information
previously
given pursuant to this Section, but each of the parties hereto
shall be entitled
to rely conclusively on the then current notice until receipt of a
superseding
notice.
The Custodian shall certify its receipt of all such Mortgage
Loan
Documents required to be delivered pursuant to this Agreement for
the related
Closing Date, as evidenced by the Trust Receipt and Initial
Certification of the
Custodian in the form annexed to the Custodial Agreement.
The Company shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension
of any
Mortgage Loan entered into in accordance with this Agreement within
two weeks of
their execution, provided, however, that the Company shall provide
the Custodian
with a certified true copy of any such document submitted for
recordation within
two weeks of its execution, and shall provide the original of any
document
submitted for recordation or a copy of such document certified by
the
appropriate public recording office to be a true and complete copy
of the
original within one year of its submission for recordation.
In connection with the assignment of any Mortgage Loan registered
on
the MERS(R) System, the Company further agrees that it will, at the
Owner's
request and sole cost and expense, cause the MERS(R) System to
indicate that
such Mortgage Loans have been assigned by the Company to the Owner
by including
(or, if applicable, deleting, in the case of Mortgage Loans which
are
repurchased in accordance with this Agreement) in such computer
files the code
in the field "Pool Field" which identifies the series in which such
loans were
sold. The Company further agrees that it will not alter the code
referenced in
this paragraph with respect to any Mortgage Loan during the term of
this
Agreement unless and until such Mortgage Loan is repurchased in
accordance with
the terms of this Agreement.
(f) Any documents required to be delivered to the Custodian by
the
Company pursuant to this Section 2.01 which are in the possession
or control of
the Company or a Subservicer and which are not delivered to the
Custodian or are
requested from the Custodian in connection with the servicing of
the Mortgage
Loans are and shall be held by the Company, either directly or
through the
related Subservicer, in trust for the benefit of the Owner.
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<PAGE>
The sale of each Mortgage Loan shall be reflected on the
Company's
balance sheet and other financial statements as a sale of assets by
the Company.
The Company shall be responsible for maintaining, and shall
maintain records for
each Mortgage Loan which shall be clearly marked to reflect the
ownership of
each Mortgage Loan by the Owner.
Section 2.02. Acceptance by the Initial Owner; Repurchase. The
Initial
Owner hereby directs the Company to deliver the documents referred
to in Section
2.01 above to Wells Fargo Bank, National Association, as Custodian
for the
Initial Owner, and acknowledges that the Custodian as its agent,
holds and will
hold such documents and the other documents constituting a part of
the Mortgage
Files in trust for the use and benefit of the Initial Owner and any
other future
Owner.
If any document or documents constituting a part of the Mortgage
File
are missing or defective, the Owner shall notify the Company of
such omission or
defect which it finds in respect of any Mortgage Loan. If such
omission or
defect materially and adversely affects the interests of the Owner,
the Company
shall promptly correct or cure such omission or defect within 30
days from the
date the Company was notified of such omission or defect, and if
such omission
or defect is not corrected or cured within such period, the Company
shall
repurchase such Mortgage Loan at the Repurchase Price. If on the
date that is
270 days after the Closing Date any Mortgage File does not contain
any required
documents, the Company shall repurchase the related Mortgage Loan
for the
Repurchase Price.
Section 2.03. Assignment of Mortgage Loans. The Initial Owner or
Owner
shall have the right to assign its interest under this Agreement
with respect to
the Mortgage Loans and designate any person to exercise any rights
of the Owner
hereunder with respect to the Mortgage Loans, and the assignee or
designee shall
accede to the rights and obligations hereunder of the Owner with
respect to the
Mortgage Loans; provided, however, that the Mortgage Loans shall at
all times be
subject to the terms of this Agreement. Prior to assigning its
interests under
this Agreement, the Owner shall deliver a copy of this Agreement to
such
assignee or designee. Each assignee or designee may assign its
interest in the
Mortgage Loans owned by it. No sale or transfer of the Mortgage
Loans or
assignment of this Agreement shall be binding upon the Company for
any purpose
under this Agreement unless the Owner proposing to make such sale,
transfer or
assignment and its prospective assignee have executed and delivered
to the
Company an assignment and assumption agreement in the form of
Exhibit D annexed
hereto and the Company has acknowledged such agreement. If required
by any
nationally recognized rating agency rating securities backed by the
Mortgage
Loans, the Company will amend this Agreement to provide that the
Custodial
Account shall be a segregated account into which only funds
relating to the
Mortgage Loan will be deposited. No sale of the Mortgage Loans
shall be made to
any employee benefit plan or other plan that is subject to ERISA or
Section 4975
of the Code (each, a "Plan") or to any person or entity that is
investing on
behalf of or with "plan assets" of any Plan or to any insurance
company, other
than an insurance company investing with funds held in its general
account (if
such funds do not include "plan assets" of any Plan), unless the
Owner's
prospective assignee provides the Company with a certification or
Opinion of
Counsel or both, which establishes to the Company's satisfaction
that such
disposition will not constitute or result in a non-exempt
prohibited transaction
under Section 406 of ERISA and Section 4975 of the Code. The
Company shall not
be required to pay any costs or expenses incurred in connection
with obtaining
such Opinion of Counsel. The Company may require that
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<PAGE>
such prospective assignee certify to the Company in writing the
facts
establishing that such disposition will not violate the prohibited
transaction
provisions of Section 406 of ERISA and Section 4975 of the
Code.
The sale of the Mortgage Loans has not been registered or
qualified
under the Securities Act or any state securities law. No sale,
transfer, pledge
or other disposition of the Mortgage Loans or any interest therein
shall be made
unless such disposition is made pursuant to an effective
registration statement
under the Securities Act and effective registration or
qualification under
applicable state securities laws, or is made in a transaction which
does not
require such registration or qualification. The Company is not
obligated to
register or qualify the Mortgage Loans under the Securities Act or
any other
securities law or to take any action not otherwise required under
this Agreement
to permit the transfer of the Mortgage Loans without registration
or
qualification.
Upon compliance with the foregoing conditions and receipt of an
assignment and assumption agreement executed by the Owner and its
prospective
assignee and acknowledged by the Company, the Company shall make
the appropriate
notations in its books to reflect the sale of the affected Mortgage
Loans to
such assignee, such assignee shall accede to the rights and the
obligations of
the Owner hereunder with respect to such Mortgage Loans, and the
Owner shall be
released from its obligations hereunder with respect to such
Mortgage Loans that
have been sold in accordance with this Agreement. For the purposes
of this
Agreement, the Company shall be under no obligation to deal with
any Person with
respect to this Agreement or the Mortgage Loans unless the books
and records of
the Company show such Person as the Owner of such Mortgage Loans.
The Company
shall not be responsible for expenses incurred by the Owner or any
transferee in
connection with any sale or transfer pursuant to this Section
2.03.
Section 2.04. Representations and Warranties of the Company
with
respect to the Mortgage Loans. The Company hereby represents and
warrants to the
Owner that as of the Closing Date or such other date specifically
provided for
herein, unless otherwise specified in the applicable Reference
Agreement, with
respect to each Mortgage Loan:
(a) The information set forth in the related Mortgage Loan
Schedule,
as of the dates set forth therein, is complete, true and
correct;
(b) The Mortgage Note and the Mortgage are not subject to any right
of
rescission, set off, counterclaim or defense, including, without
limitation, the
defense of usury, nor will the operation of any of the terms of the
Mortgage
Note or the Mortgage, or the exercise of any right thereunder,
render the
Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any
right of rescission, set off, counterclaim or defense, including
the defense of
usury, and no such right of rescission, set off, counterclaim or
defense has
been asserted with respect thereto; and the Mortgagor was not a
debtor in any
state or federal bankruptcy or insolvency proceeding at the time
the Mortgage
Loan was originated;
(c) All buildings upon the Mortgaged Property are insured by an
insurer acceptable under the Fannie Mae Guides, against loss by
fire, hazards of
extended coverage and such other hazards as are provided for in the
Fannie Mae
Guides or by the Freddie Mac Guides, in an amount representing
coverage that is
at least equal to the lesser of (i) the amount necessary
19
<PAGE>
to fully compensate for any damage or loss to the improvements that
are a part
of such property on a replacement cost basis or (ii) the
outstanding principal
balance of the Mortgage Loan plus with respect to any second lien
Mortgage Loan,
the outstanding principal balance of the related first lien
mortgage loan, in
each case in an amount not less than such amount as is necessary to
prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer. If the
Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a
blanket policy for the project. All such standard hazard policies
are in full
force and effect and on the date of origination contained a
standard mortgagee
clause naming the Company and its successors in interest and
assigns as loss
payee and such clause is still in effect and all premiums due
thereon have been
paid. If required by the Flood Disaster Protection Act of 1973, as
amended, the
Mortgage Loan is covered by a flood insurance policy meeting the
requirements of
the current guidelines of the Federal Insurance Administration
which policy
conforms to Fannie Mae and Freddie Mac requirements, in an amount
not less than
the amount required by the Flood Disaster Protection Act of 1973,
as amended.
Such policy was issued by an insurer acceptable under Fannie Mae or
Freddie Mac
guidelines. The Mortgage obligates the Mortgagor thereunder to
maintain all such
insurance at the Mortgagor's cost and expense, and upon the
Mortgagor's failure
to do so, authorizes the holder of the Mortgage to maintain such
insurance at
the Mortgagor's cost and expense and to seek reimbursement therefor
from the
Mortgagor;
(d) At origination of the Mortgage Loan, any and all requirements
of
any federal, state or local law, including, without limitation,
usury, truth in
lending, real estate settlement procedures, consumer credit
protection, equal
credit opportunity, fair housing, predatory and abusive lending,
fair lending or
disclosure laws applicable to the origination and servicing of the
Mortgage Loan
have been complied with in all material respects;
(e) The Mortgage is a valid and existing (i) first lien with
respect
to each Mortgage Loan that is indicated by the Company to be a
first lien (as
reflected on the Mortgage Loan Schedule), or (ii) second lien with
respect to
each Mortgage Loan that is indicated by the Company to be a second
lien (as
reflected on the Mortgage Loan Schedule), in either case, on the
Mortgaged
Property, including all improvements on the Mortgaged Property
subject only to
(A) the lien of current real property taxes and assessments not yet
due and
payable, (B) covenants, conditions and restrictions, rights of way,
easements
and other matters of the public record as of the date of recording
being
acceptable to mortgage lending institutions generally and
specifically referred
to in the lender's title insurance policy delivered to the
originator of the
Mortgage Loan and which do not adversely affect the Appraised Value
of the
Mortgaged Property, (C) with respect to each Mortgage Loan which is
indicated by
the Company to be a second lien Mortgage Loan (as reflected on the
Mortgage Loan
Schedule), a first lien on the Mortgaged Property; and (D) other
matters to
which like properties are commonly subject which do not materially
interfere
with the benefits of the security intended to be provided by the
Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged
Property. Any
security agreement, chattel mortgage or equivalent document related
to and
delivered in connection with the Mortgage Loan establishes and
creates a valid,
existing and enforceable first or second lien and first or second
priority
security interest (in each case, as indicated on the Mortgage Loan
Schedule) on
the property described therein and the Company has full right to
sell and assign
the same to the Owner;
20
<PAGE>
(f) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the
maker
thereof, enforceable in all respects in accordance with its terms
subject to
bankruptcy, insolvency, moratorium, reorganization and other laws
of general
application affecting the rights of creditors and by general
equitable
principles and the Company has taken all action necessary to
transfer such
rights of enforceability to the Initial Owner. All parties to the
Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage
Loan and to
execute and deliver the Mortgage Note and the Mortgage. The
Mortgage Note and
the Mortgage have been duly and properly executed by such parties
or pursuant to
a valid power-of-attorney. No Mortgagor has been released from the
Mortgage.
Without limiting the representations and warranties in paragraph
(i) below,
neither the Mortgage Note nor the Mortgage have been modified,
waived, forborne,
released or otherwise impaired except as shown on a writing
included in the
related Mortgage File and no such modification, waiver,
forbearance, release or
impairment impairs or reduces any title insurance, mortgage
insurance or other
insurance coverage with respect to such Mortgage Loan, Mortgage
Note, Mortgage
or Mortgaged Property and all consents from any such insurer
necessary to
maintain such insurance coverage unimpaired have been obtained. The
Mortgaged
Property has not been released from the lien of the Mortgage, in
whole or in
part, nor has any instrument been executed that would effect any
such
satisfaction, cancellation, subordination, rescission or release.
No fraud,
negligence, misrepresentation or similar occurrence with respect to
a Mortgage
Loan has taken place on the part of the Company or the Mortgagor,
or, on the
part of any other party involved in the origination or servicing of
the Mortgage
Loan. The proceeds of the Mortgage Loan have been fully disbursed
to or for the
account of the Mortgagor, there is no requirement for future
advances thereunder
and any and all requirements as to completion of any on site or off
site
improvements and as to disbursements of any escrow funds therefor
have been
complied with (except for escrow funds for exterior items which
could not be
completed due to weather and escrow funds for the completion of
swimming pools).
All costs, fees and expenses incurred in making or closing the
Mortgage Loan and
the recording of the Mortgage were paid or are in the process of
being paid, and
the Mortgagor is not entitled to any refund of any amounts paid or
due under the
Mortgage Note or Mortgage;
(g) The Company is the sole legal, beneficial and equitable owner
and
holder of the Mortgage Loan and the indebtedness evidenced by the
Mortgage Note,
and upon recordation the Owner or its designee will be the sole
owner of the
Mortgage and the indebtedness evidenced by the Mortgage Note.
Immediately prior
to the transfer and assignment to the Initial Owner on the Closing
Date, the
Mortgage Loan, including the Mortgage Note and the Mortgage, were
not subject to
an assignment or pledge, and the Company had title to and was the
sole owner
thereof and had full right to transfer and sell the Mortgage Loan
to the Initial
Owner free and clear of any encumbrance, equity, lien, pledge,
charge, claim or
security interest and has the full right and authority subject to
no interest or
participation of, or agreement with, any other party, to sell and
assign the
Mortgage Loan pursuant to this Agreement and following the sale of
the Mortgage
Loan, the Initial Owner will own such Mortgage Loan free and clear
of any
encumbrance, equity, participation interest, lien, pledge, charge,
claim or
security interest. The Company intends to relinquish all rights to
possess,
control and monitor the Mortgage Loan. Either the Mortgagor is a
natural person
or the Mortgagor is a revocable inter-vivos trust acceptable to
Fannie Mae;
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<PAGE>
(h) Each Mortgage Loan is covered by an ALTA lender's title
insurance
policy (including an adjustable rate mortgage endorsement in the
form of ALTA
6.0 or 6.1) or other form of title policy or insurance acceptable
to Fannie Mae,
in either case, issued by a title insurer acceptable to Fannie Mae
or Freddie
Mac and qualified to do business in the jurisdiction where the
Mortgaged
Property is located, insuring (subject to the exceptions contained
in (e)(A) and
(B) and, with respect to any second lien Mortgage Loan, (C) above)
the Company,
its successors and assigns, as to the first or second priority lien
of the
Mortgage in the original principal amount of the Mortgage Loan and
against any
loss by reason of the invalidity or unenforceability of the lien
resulting from
the provisions of the Mortgage providing for adjustment in the
Mortgage Interest
Rate and Monthly Payment. Additionally, such policy affirmatively
insures
ingress and egress to and from the Mortgaged Property. The Company,
its
successors and assigns, are the sole insureds of such lender's
title insurance
policy, such title insurance policy has been duly and validly
endorsed to the
Initial Owner or the assignment to the Initial Owner of the
Company's interest
therein does not require the consent of or notification to the
insurer and such
lender's title insurance policy is in full force and effect and
will be in full
force and effect upon the consummation of the transactions
contemplated by this
Agreement;
(i) Neither the Company nor any servicer has threatened or
commenced
any foreclosure action with respect to the Mortgage Loan;
(j) There is no default, breach, violation or event of
acceleration
existing under the Mortgage or the related Mortgage Note (other
than a
delinquency by a mortgagor in making a Monthly Payment which
delinquency did not
last more than thirty (30) days and did not occur more than once in
the
preceding twelve (12) month period), no event exists which, with
notice and
expiration of any grace or cure period, would constitute a default,
breach,
violation or event of acceleration under the Mortgage or the
related Mortgage
Note; and neither the Company nor any servicer or prior mortgagee
has waived any
default, breach, violation or event permitting acceleration or
granted any
forbearance with respect to any of the foregoing. With respect to
each second
lien Mortgage Loan (i) the first lien mortgage loan is in full
force and effect,
(ii) there is no default, breach, violation or event of
acceleration existing
under such first lien mortgage or the related mortgage note, (iii)
no event
which, with the passage of time or with notice and the expiration
of any grace
or cure period, would constitute a default, breach, violation or
event of
acceleration thereunder, (iv) either (A) the first lien mortgage
contains a
provision which allows or (B) applicable law requires, the
mortgagee under the
second lien Mortgage Loan to receive notice of, and affords such
mortgagee an
opportunity to cure any default by payment in full or otherwise
under the first
lien mortgage, (v) the related first lien does not provide for or
permit
Negative Amortization under such first lien Mortgage Loan, and (vi)
either no
consent for the Mortgage Loan is required by the holder of the
first lien or
such consent has been obtained and is contained in the Mortgage
File;
(k) There are no mechanics' or similar liens or claims which have
been
filed for work, labor or material (and no rights are outstanding
that under law
could give rise to such liens) affecting the related Mortgaged
Property which
are or may be liens prior to or equal to the lien of the related
Mortgage;
(l) All improvements subject to the Mortgage which were considered
in
determining the Appraised Value of the Mortgaged Property lie
wholly within the
boundaries
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<PAGE>
and building restriction lines of the Mortgaged Property (and
wholly within the
project with respect to a condominium unit) and no improvements on
adjoining
properties encroach upon the Mortgaged Property except for de
minimis
encroachments permitted by the Fannie Mae Guides or the Freddie Mac
Guides and
except those encroachments which are insured against by the title
insurance
policy referred to in clause (h) above; and all improvements on the
property
comply with all applicable zoning and subdivision laws and
ordinances;
(m) Each Mortgage Loan was originated pursuant to the Program
Guide
and such Mortgage Loan was originated by or for the Company. The
Company has
delivered the Program Guide to the Initial Owner and the Mortgage
Loan complies
with all the terms, conditions and requirements of such Program
Guide. The
Mortgage Notes and Mortgages (exclusive of any riders) are on forms
acceptable
to Fannie Mae or Freddie Mac. The Mortgage Loan bears interest at
the Mortgage
Interest Rate set forth in the related Mortgage Loan Schedule, and
Monthly
Payments under the Mortgage Note are due and payable on the first
day of each
month. The Mortgage contains the usual and enforceable provisions
for the
acceleration of the payment of the unpaid principal amount of the
Mortgage Loan
if the related Mortgaged Property is sold without the prior consent
of the
mortgagee thereunder;
(n) The Mortgaged Property is not subject to any material damage
by
waste, fire, earthquake, windstorm, flood or other casualty. At
origination of
the Mortgage Loan there was, and there currently is, no proceeding
pending for
the total or partial condemnation of the Mortgaged Property. There
have not been
any condemnation proceedings with respect to the Mortgaged
Property;
(o) The related Mortgage contains customary and enforceable
provisions
such as to render the rights and remedies of the holder thereof
adequate for the
realization against the Mortgaged Property of the benefits of the
security
provided thereby, including realization by judicial foreclosure
(subject to any
limitation arising from any bankruptcy, insolvency or other law for
the relief
of debtors). The Mortgaged Property has not been subject to any
bankruptcy
proceeding or foreclosure proceeding and the Mortgagor has not
filed for
protection under applicable bankruptcy laws. Either (i) each person
or entity
with an interest or a potential interest in the Mortgaged Property
has signed
the Mortgage and any related security agreement (if permitted by
applicable
law), or (ii) there is no homestead, dower, courtesy or other
similar rights or
exemptions available to the Mortgagor or any other person or entity
with an
interest or a potential interest in the Mortgaged Property which
would interfere
with the right to sell the Mortgaged Property at a trustee's sale
or the right
to foreclose the Mortgage;
(p) If the Mortgage constitutes a deed of trust, a trustee,
authorized
and duly qualified if required under applicable law to act as such,
has been
properly designated and currently so serves and is named in the
Mortgage, and no
fees or expenses are or will become payable by the Owner to the
trustee under
the deed of trust, except in connection with a trustee's sale or
attempted sale
after default by the Mortgagor;
(q) The Mortgage File contains an appraisal of the related
Mortgaged
Property which was signed prior to the final approval of the
mortgage loan
application by a qualified appraiser, who had no interest, direct
or indirect,
in the Mortgaged Property or in any loan made on the security
thereof, and whose
compensation is not affected by the approval or disapproval of
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<PAGE>
the Mortgage Loan, and the appraiser and the appraisal satisfy the
requirements
of Fannie Mae or Freddie Mac and Title XI of FIRREA and the
regulations
promulgated thereunder, all as in effect on the date the Mortgage
Loan was
originated. The appraisal is in a form acceptable to Fannie Mae or
Freddie Mac;
(r) All parties which have had any interest in the Mortgage,
other
than the Initial Owner, whether as mortgagee, assignee, pledgee or
otherwise,
are (or, during the period in which they held and disposed of such
interest,
were) (A) in compliance with any and all applicable licensing
requirements of
the laws of the state wherein the Mortgaged Property is located,
and (B) (1)
organized under the laws of such state, or (2) qualified to do
business in such
state, or (3) federal savings and loan associations or national
banks or a
Federal Home Loan Bank or savings bank having principal offices in
such state,
(4) not doing business in such state or (5) not required to be
licensed in such
state;
(s) The related Mortgage Note is not and has not been secured by
any
collateral except the lien of the corresponding Mortgage and the
security
interest of any applicable security agreement or chattel mortgage
referred to in
(e) above;
(t) The Mortgage Loan does not contain "graduated payment"
features
and does not have a shared appreciation or other contingent
interest feature. No
Mortgage Loan contains provisions pursuant to which Monthly
Payments are (i)
paid or partially paid with funds deposited in any separate account
established
by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor,
(ii) paid by
any source other than the Mortgagor or (iii) contains any other
similar
provisions that may constitute a "buydown" provision;
(u) As of the date of origination of the Mortgage Loan, the
related
Mortgagor was not in bankruptcy;
(v) Principal payments on the Mortgage Loan commenced no more
than
sixty (60) days after the proceeds of the Mortgage Loan were
disbursed. The
Mortgage Loans are payment option adjustable rate loans having an
original term
to maturity of not more than 30 years, with interest payable in
arrears on the
first day of each month. The Due Date for each Monthly Payment is
the first day
of each month. No Mortgage Loan is a Convertible Mortgage Loan. No
Balloon
Mortgage Loan has an original stated maturity of less than seven
(7) years.
(w) If a Mortgage Loan has an LTV greater than 80%, the Mortgage
Loan
will have mortgage insurance in accordance with the terms of the
Fannie Mae
Guides and will be insured as to payment defaults by a Primary
Mortgage
Insurance Policy issued by a Qualified Insurer. All provisions of
such Primary
Mortgage Insurance Policy have been and are being complied with,
such policy is
in full force and effect, and all premiums due thereunder have been
paid. Any
Mortgage Loan subject to a Primary Mortgage Insurance Policy
obligates the
Mortgagor thereunder to maintain the Primary Mortgage Insurance
Policy and to
pay all premiums and charges in connection therewith. The Mortgage
Interest Rate
for the Mortgage Loan as set forth on the related Mortgage Loan
Schedule is net
of any such insurance premium. No Mortgage Loan is subject to a
lender-paid
mortgage insurance policy;
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<PAGE>
(x) As to any Mortgage Loan which is not a MERS Mortgage Loan,
the
Assignment of Mortgage is in recordable form and is acceptable for
recording
under the laws of the jurisdiction in which the Mortgaged Property
is located;
(y) The Mortgaged Property consists of a single parcel of real
property with a detached or attached one-to-four family residence
erected
thereon, or a townhouse, or a two-to four-family dwelling, or an
individual
condominium unit in a condominium project, or an individual unit in
a planned
unit development or a de minimis planned unit development, or a
single parcel of
real property with a cooperative housing corporation erected
thereon; provided,
however, that no residence or dwelling is a manufactured or mobile
home. As of
the date of origination, no portion of the Mortgaged Property was
used for
commercial purposes;
(z) No Mortgage Loan is subject to a Prepayment Charge unless
such
Prepayment Charge (i) is permitted by and complies with all
applicable federal,
state and local law, (ii) is enforceable only during the first five
years
following origination of the Mortgage Loan and (iii) does not
become due on
default.
(aa) As of the date of origination of each Mortgage Loan (and, to
the
best of the Company's knowledge, as of the Closing Date), the
related Mortgaged
Property was lawfully occupied under applicable law. All
inspections, licenses
and certificates required to be made or issued with respect to all
occupied
portions of each Mortgaged Property and, with respect to the use
and occupancy
of the same, including but not limited to certificates of occupancy
and fire
underwriting certificates, have been made or obtained from the
appropriate
authorities;
(bb) If the Mortgaged Property is a condominium unit or a planned
unit
development (other than a de minimis planned unit development), or
stock in a
cooperative housing corporation, such condominium, cooperative or
planned unit
development project meets the eligibility requirements of Fannie
Mae and Freddie
Mac;
(cc) There is no violation of any environmental law, rule or
regulation pertaining to environmental hazards including, without
limitation,
asbestos, with respect to the Mortgaged Property. Nothing further
remains to be
done to satisfy in full all requirements of each such law, rule or
regulation
constituting a prerequisite to use and enjoyment of said property
and the
Company has not received any notice of any violation or potential
violation of
such law;
(dd) The Mortgagor has not notified the Company requesting
relief
under the Servicemembers Civil Relief Act, and the Company has no
knowledge of
any relief requested by or allowed to the Mortgagor under the
Servicemembers
Civil Relief Act or any similar state laws;
(ee) No Mortgage Loan was made in connection with (i) the
construction
or rehabilitation of the Mortgaged Property or (ii) facilitating
the trade-in or
exchange of a Mortgaged Property;
(ff) The Mortgage Loan is not secured by a leasehold interest;
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<PAGE>
(gg) The Mortgage Loan was originated by a mortgagee approved by
the
Secretary of Housing and Urban Development pursuant to sections 203
and 211 of
the National Housing Act, a savings and loan association, a savings
bank, a
commercial bank, credit union, insurance company or similar banking
institution
which is supervised and examined by a federal or state
authority;
(hh) 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);
(ii) Except as set forth in Section 2.01, the Mortgage Note,
the
Mortgage, the Assignment of Mortgage and the other Mortgage Loan
Documents and
required to be delivered on the Closing Date have been delivered to
the Initial
Owner or its designee all in compliance with the specific
requirements of this
Agreement;
(jj) No Mortgage Loan had a Loan-to-Value Ratio or CLTV at the time
of
origination of more than 100%;
(kk) No Mortgage Loan is (i) subject to, covered by or in violation
of
the Home Ownership and Equity Protection Act of 1994 ("HOEPA"), and
no Mortgage
Loan has an "annual percentage rate" or "total points and fees"
payable by the
borrower (as each such term is defined under HOEPA) that exceed the
applicable
thresholds defined under HOEPA (Section 32 of Regulation Z, 12
C.F.R. Section
226.32(a)(1)(i) and (ii)), (ii) classified as a "high cost,"
"covered," "high
risk home", "high-rate, high-fee," "threshold," or "predatory" loan
under HOEPA
or any other applicable state, federal or local law, including any
predatory or
abusive lending laws (or a similarly classified loan using
different terminology
under a law imposing heightened scrutiny or additional legal
liability for a
residential mortgage loan having high interest rates, points and/or
fees), (iii)
a High Cost Loan or Covered Loan, as applicable (as such terms are
defined in
the Standard & Poor's LEVELS(R) Glossary Revised, Appendix E,
as in effect on
the Cut-off Date) or (iv) in violation of any state law or
ordinance comparable
to HOEPA;
(ll) No Mortgage Loan finances and no Mortgagor was required to
purchase any credit life, credit disability, credit unemployment,
or any other
prepaid accident, life or health insurance product, or debt
cancellation
agreement as a condition of obtaining the extension of credit. No
Mortgagor
obtained a prepaid single-premium credit insurance policy (e.g.,
life,
disability, property, accident, unemployment, mortgage or health
insurance) in
connection with the origination of the Mortgage Loan. No proceeds
from any
Mortgage Loan were used to purchase single premium credit insurance
policies as
part of the origination of, or as a condition to closing, such
Mortgage Loan;
(mm) Any principal advances made to the Mortgagor prior to the
Closing
Date have been consolidated with the outstanding principal amount
secured by the
Mortgage, and the secured principal amount, as consolidated, bears
a single
interest rate and single repayment term. The lien of the Mortgage
securing the
consolidated principal amount is expressly insured as having first
lien priority
by a title insurance policy complying with clause (h) above
insuring the
mortgagee's consolidated interest;
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<PAGE>
(nn) Interest on each Mortgage Loan is calculated on the basis of
a
360-day year consisting of twelve 30-day months;
(oo) The Company and each originator have complied with all
applicable
anti-money laundering laws and regulations, including without
limitation the USA
Patriot Act of 2001 (collectively, the "Anti-Money Laundering
Laws"); the
Company and each originator have established an anti-money
laundering compliance
program as required by the Anti-Money Laundering Laws, has
conducted the
requisite due diligence in connection with the origination of each
Mortgage Loan
for purposes of the Anti-Money Laundering Laws, including with
respect to the
legitimacy of the applicable Mortgagor and the origin of the assets
used by the
said Mortgagor to purchase the Mortgaged Property, and maintains,
and will
maintain, sufficient information to identify the applicable
Mortgagor for
purposes of the Anti-Money Laundering Laws. No Mortgage Loan is
subject to
nullification pursuant to Executive Order 13224 (the "Executive
Order") or the
regulations promulgated by the Office of Foreign Assets Control of
the United
States Department of the Treasury (the "OFAC Regulations") or in
violation of
the Executive Order or the OFAC Regulations, and no Mortgagor is
subject to the
provisions of such Executive Order or the OFAC Regulations nor
listed as a
"blocked person" for purposes of the OFAC Regulations;
(pp) No Mortgage Loan is a "High Cost Home Loan" as defined in
the
Georgia Fair Lending Act, as amended (the "Georgia Act"). No
Mortgage Loan
secured by owner occupied real property or an owner occupied
manufactured home
located in the State of Georgia was originated (or modified) on or
after October
1, 2002 through and including March 7, 2003;
(qq) All fees and charges (including finance charges) and whether
or
not financed, assessed, collected or to be collected in connection
with the
origination and servicing of each Mortgage Loan have been disclosed
in writing
to the Mortgagor in accordance with applicable state and federal
law and
regulation;
(rr) If the Mortgage Loan has been held or serviced by the Company
or
any servicer for 90 or more days, the Company or such servicer, as
applicable,
has reported at least quarterly to Equifax, Experian and Trans
Union Credit
Information Company, the favorable and unfavorable payment history
information
of the related Mortgagor on payments due under such Mortgage Loan
for the period
the Company owned or such servicer serviced the Mortgage Loan;
(ss) None of the Company, any servicer or any originator has
solicited
or provided information to another party for the purpose of
soliciting the
refinance of any Mortgage Loan. The term "solicit" as used in this
paragraph
means a direct request or offer to refinance a Mortgage Loan and
does not
include general solicitations, advertisements or promotions
directed to the
public at large;
(tt) No taxes, governmental assessments, insurance premiums,
water,
sewer and municipal charges, leasehold payments or ground rents
relating to the
Mortgage Loan are delinquent, and none of the Company, any servicer
nor any
originator has advanced funds, or received any advance of funds by
a party other
than the Mortgagor, directly or indirectly for the payment of any
amount
required by the Mortgage, except for interest accruing from the
date of
27
<PAGE>
the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds,
whichever is later, to the day which precedes by thirty days the
first due date
under the related Mortgage Note;
(uu) The representations and warranties of the Company contained
in
the related AAR are true and correct in all material respects;
(vv) In the event that the Mortgagor is an inter vivos "living"
trust,
(i) such trust is in compliance with Fannie Mae or Freddie Mac
standards for
inter vivos trusts and (ii) holding title to the Mortgaged Property
in such
trust will not diminish any rights as a creditor including the
right to full
title to the Mortgaged Property in the event foreclosure
proceedings are
initiated;
(ww) No subprime Mortgage Loan originated on or after October 1,
2002
will impose a prepayment premium for a term in excess of three
years;
(xx) No Mortgage Loan originated on or after August 1, 2004
requires
the Mortgagor to submit to arbitration to resolve any dispute
arising out of or
relating in any way to the Mortgage Loan transaction; and
(yy) The origination, servicing and collection practices used
with
respect to each Mortgage Note and Mortgage including, without
limitation, the
establishment, maintenance and servicing of the escrow accounts and
Escrow
Payments, if any, since origination, have been in all respects
legal and
consistent with Accepted Servicing Practices. The Mortgage Loan has
been
serviced by the Company and any predecessor servicer in accordance
with the
terms of the Mortgage Note and Accepted Servicing Practices. With
respect to
escrow deposits and Escrow Payments, if any, all such payments are
in the
possession of, or under the control of, the Company and there exist
no
deficiencies in connection therewith for which customary
arrangements for
repayment thereof have not been made. No escrow deposits or Escrow
Payments or
other charges or payments due the Company have been capitalized
under any
Mortgage or the related Mortgage Note and no such escrow deposits
or Escrow
Payments are being held by the Company for any work on a Mortgaged
Property
which has not been completed;
(zz) The Mortgagor has executed a statement to the effect that
the
Mortgagor has received all disclosure materials required by
applicable law with
respect to the making of fixed rate mortgage loans in the case of
Fixed Rate
Mortgage Loans, and adjustable rate mortgage loans in the case of
Adjustable
Rate Mortgage Loans and rescission materials with respect to
Refinanced Mortgage
Loans, and such statement is and will remain in the Mortgage
File;
(aaa) Any principal advances made to the Mortgagor prior to the
Cut-off Date have been consolidated with the outstanding principal
amount
secured by the Mortgage, and the secured principal amount, as
consolidated,
bears a single interest rate and single repayment term. The lien of
the Mortgage
securing the consolidated principal amount is expressly insured as
having first
or second (as indicated on the Mortgage Loan Schedule) lien
priority by a title
insurance polic
