MORTGAGE LOAN PURCHASE
AGREEMENT
This is a Mortgage Loan Purchase Agreement (this
“Agreement”), dated as of April 5, 2007, among FREMONT
INVESTMENT & LOAN, a California industrial bank (the
“Responsible Party”), FREMONT GENERAL CORPORATION, a
Nevada corporation (the “Parent”), CARRINGTON
SECURITIES, LP, a Delaware limited partnership (the
“Seller”) and STANWICH ASSET ACCEPTANCE COMPANY,
L.L.C., a Delaware limited liability company (the
“Purchaser”).
Preliminary
Statement
The Seller intends to sell the Mortgage Loans
(as hereinafter identified) to the Purchaser on the terms and
subject to the conditions set forth in this Agreement. The
Purchaser intends to deposit the Mortgage Loans into a mortgage
pool comprising the Trust Fund. The Trust Fund will be evidenced by
a single series of mortgage pass-through certificates designated as
Carrington Mortgage Loan Trust, Series 2007-FRE1 Asset-Backed
Pass-Through Certificates (the “Certificates”). The
Certificates will consist of eighteen classes of certificates and
will be issued pursuant to a Pooling and Servicing Agreement, dated
as of April 1, 2007 (the “Pooling and Servicing
Agreement”), among the Depositor as depositor, EMC Mortgage
Corporation as servicer (the “Servicer”) and Wells
Fargo Bank, N.A. as trustee (the “Trustee”).
Capitalized terms used but not defined herein shall have the
meanings set forth in the Pooling and Servicing
Agreement.
The parties hereto agree as follows:
SECTION 1 Agreement to Purchase . The Seller agrees to sell and the Purchaser
agrees to purchase, on or before April 5, 2007 (the “Closing
Date”), certain adjustable-rate and fixed-rate,
interest-only, balloon and fully-amortizing, first lien and second
lien, closed-end, subprime, one- to four- family residential
mortgage loans purchased by the Seller from the Responsible Party
(the “Mortgage Loans”), having a scheduled principal
balance as of the close of business on April 1, 2007 (the
“Cut-off Date”) of $1,034,567,380 (the “Closing
Balance”), after giving effect to all payments due on the
Mortgage Loans on or before the Cut-off Date, whether or not
received including the right to any Prepayment Charges payable by
the related Mortgagors in connection with any Principal Prepayments
on the Mortgage Loans, on servicing-released basis.
SECTION 2 Mortgage Loan Schedule . The Purchaser and the Seller have agreed upon
which of the Mortgage Loans are to be purchased by the Purchaser
pursuant to this Agreement and the Seller will prepare or cause to
be prepared on or prior to the Closing Date a final schedule (the
“Closing Schedule”) that shall describe such Mortgage
Loans and set forth all of the Mortgage Loans to be purchased under
this Agreement, including the Prepayment Charges. The Closing
Schedule will conform to the requirements set forth in this
Agreement and, with respect to the Mortgage Loans subject to this
Agreement, to the definition of “Mortgage Loan
Schedule” under the Pooling and Servicing Agreement. The
Closing Schedule shall be used as part of the Mortgage Loan
Schedule under the Pooling and Servicing Agreement and shall be
based on information provided by the Originator.
SECTION 3 Consideration .
(a) In consideration for the Mortgage Loans to be
purchased hereunder the Purchaser shall, as described in Section 8,
pay to or upon the order of the Seller in immediately available
funds an amount (the “Aggregate Purchase Price”) equal
to (i) the net sale proceeds of the Class A Certificates and the
Mezzanine Certificates and (ii) the Class CE Certificates and the
Class P Certificates.
(b) The Purchaser or any assignee, transferee or
designee of the Purchaser shall be entitled to all scheduled
payments of principal due after the Cut-off Date, all other
payments of principal due and collected after the Cut-off Date, and
all payments of interest on the Mortgage Loans allocable to the
period after the Cut-off Date. All scheduled payments of principal
and interest due on or before the Cut-off Date and collected after
the Cut-off Date shall belong to the Seller.
(c) Pursuant to the Pooling and Servicing
Agreement, the Purchaser will assign all of its right, title and
interest in and to the Mortgage Loans, together with its rights
under this Agreement, including the Guaranty set forth in Section
20 hereof, to the Trustee for the benefit of the
Certificateholders.
SECTION 4 Transfer of the Mortgage Loans
.
(a) Possession of Mortgage Files
. The Seller does hereby sell, and
in connection therewith hereby assigns, to the Purchaser, effective
as of the Closing Date, without recourse but subject to the terms
of this Agreement, all of its right, title and interest in, to and
under the Mortgage Loans, including the related Prepayment Charges.
The contents of each Mortgage File not delivered to the Purchaser
or to any assignee, transferee or designee of the Purchaser on or
prior to the Closing Date are and shall be held in trust by the
Seller for the benefit of the Purchaser or any assignee, transferee
or designee of the Purchaser. Upon the sale of the Mortgage Loans,
the ownership of each Mortgage Note, the related Mortgage and the
other contents of the related Mortgage File is vested in the
Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or that come into
the possession of the Seller on or after the Closing Date shall
immediately vest in the Purchaser and shall be delivered
immediately to the Purchaser or as otherwise directed by the
Purchaser.
(b) Delivery of Mortgage Loan Documents
. The Seller will, on or prior to
the Closing Date, deliver or cause to be delivered to the Purchaser
or any assignee, transferee or designee of the Purchaser each of
the following documents for each Mortgage Loan:
(i) the original Mortgage Note, endorsed in blank
or in the following form “Pay to the order of Wells Fargo
Bank, N.A., as Trustee under the applicable agreement, without
recourse,” with all prior and intervening endorsements
showing a complete chain of endorsement from the originator to the
Person so endorsing to the Trustee;
(ii) the original Mortgage with evidence of
recording thereon, and the original recorded power of attorney, if
the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(iii) an original Assignment in blank;
(iv) the original recorded Assignment or Assignments
showing a complete chain of assignment from the originator to the
Person assigning the Mortgage to the Trustee as contemplated by the
immediately preceding clause (iii);
(v) the original or copies of each assumption,
modification or substitution agreement, if any; and
(vi) the original lender’s title insurance
policy or certified copy thereof or, if the original title policy
has not been issued, the irrevocable commitment to issue the
same.
With respect to a maximum of approximately 2.0%
of the Original Mortgage Loans, by outstanding principal balance of
the Original Mortgage Loans as of the Cut-off Date, if any original
Mortgage Note referred to in Section 4(b)(i) above cannot be
located, the obligations of the Seller to deliver such documents
shall be deemed to be satisfied upon delivery to the Purchaser of a
photocopy of such Mortgage Note, if available, with a lost note
affidavit substantially in the form of Exhibit I attached to the
Pooling and Servicing Agreement. If any of the original Mortgage
Notes for which a lost note affidavit was delivered to the
Purchaser is subsequently located, such original Mortgage Note
shall be delivered to the Purchaser within three Business
Days.
If any of the documents referred to in Sections
4(b)(ii), (iii) or (iv) above has, as of the Closing Date, been
submitted for recording but either (x) has not been returned from
the applicable public recording office or (y) has been lost or such
public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Purchaser of a copy
of each such document certified by the Originator in the case of
(x) above or the applicable public recording office in the case of
(y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the
Originator, delivery to the Purchaser promptly upon receipt thereof
of either the original or a copy of such document certified by the
applicable public recording office to be a true and complete copy
of the original. Notice shall be provided to the Purchaser, the
Trustee and the Rating Agencies by the Seller if delivery pursuant
to clause (2) above will be made more than 180 days after the
Closing Date. If a certified copy or the original lender’s
title insurance policy was not delivered pursuant to Section
4(b)(vi) above, the Seller shall deliver or cause to be delivered
to the Purchaser, promptly after receipt thereof, a certified copy
or the original lender’s title insurance policy. The Seller
shall deliver or cause to be delivered to the Purchaser promptly
upon receipt thereof any other original documents constituting a
part of a Mortgage File received with respect to any Mortgage Loan,
including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
The Seller shall (at the expense of the
Responsible Party) promptly (within sixty Business Days following
the later of the Closing Date and the date of receipt by the Seller
of the recording information for a Mortgage, but in no event later
than ninety days following the Closing Date) submit or cause to be
submitted for recording, at no expense to the Trust Fund, the
Trustee or the Purchaser, in the appropriate public office for real
property records, each Assignment referred to in Sections 4(b)(iii)
and (iv) above and the Seller shall execute each original
Assignment or cause each original Assignment to be executed in the
following form: “Wells Fargo Bank, N.A., as Trustee under the
applicable agreement.” In the event that any such Assignment
is lost or returned unrecorded because of a defect therein, the
Seller shall promptly prepare or cause to be prepared a substitute
Assignment or cure or cause to be cured such defect, as the case
may be, and thereafter cause each such Assignment to be duly
recorded.
Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to
reduce closing costs, the Assignments shall not be required to be
submitted for recording (except with respect to any Mortgage Loan
located in Maryland) unless the Trustee or the Purchaser receives
notice that such failure to record would result in a withdrawal or
a downgrading by any Rating Agency of the rating on any Class of
Certificates; provided , however , the Seller shall
submit or cause to be submitted each Assignment for recording in
the manner described above, at the expense of the Responsible Party
and at no expense to the Trust Fund or the Trustee, upon the
earliest to occur of: (i) written direction by Holders of
Certificates entitled to at least 25% of the Voting Rights, (ii)
the occurrence of a Servicer Event of Default, (iii) the occurrence
of a bankruptcy, insolvency or foreclosure relating to the
Servicer, (iv) the occurrence of a servicing transfer as described
in Section 7.02 of the Pooling and Servicing Agreement, (v) with
respect to any one Assignment, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the
related Mortgage and (vi) any Mortgage Loan that is 90 days or more
delinquent. Upon receipt of written notice that recording of the
Assignments is required pursuant to one or more of the conditions
set forth in the preceding sentence, the Seller shall be required
to deliver such Assignments or shall cause such Assignments to be
delivered within 30 days following receipt of such
notice.
Each original document relating to a Mortgage
Loan which is not delivered to the Purchaser or its assignee,
transferee or designee, if held by the Seller, shall be so held for
the benefit of the Purchaser, its assignee, transferee or
designee.
(c) Acceptance of Mortgage Loans
. The documents delivered pursuant
to Section 4(b) hereof shall be reviewed by the Purchaser or any
assignee, transferee or designee of the Purchaser at any time
before or after the Closing Date (and with respect to each document
permitted to be delivered after the Closing Date, within seven days
of its delivery) to ascertain that all required documents have been
executed and received and that such documents relate to the
Mortgage Loans identified on the Mortgage Loan Schedule.
(d) Transfer of Interest in Agreements
. The Purchaser has the right to
assign its interest under this Agreement, in whole or in part, to
the Trustee, as may be required to effect the purposes of the
Pooling and Servicing Agreement, without the consent of the Seller
or the Responsible Party, and the assignee shall succeed to the
rights and obligations hereunder of the Purchaser. Any expense
reasonably incurred by or on behalf of the Purchaser or the Trustee
in connection with enforcing any obligations of the Seller, the
Parent or the Responsible Party under this Agreement will be
promptly reimbursed by the Seller, the Parent or the Responsible
Party, as applicable.
(e) Examination of Mortgage Files
. Prior to the Closing Date, the
Seller shall either (i) deliver in escrow to the Purchaser, or to
any assignee, transferee or designee of the Purchaser for
examination, the Mortgage File pertaining to each Mortgage Loan or
(ii) make such Mortgage Files available to the Purchaser or to any
assignee, transferee or designee of the Purchaser for examination.
Such examination may be made by the Purchaser or the Trustee, and
their respective designees, upon reasonable notice to the Seller
during normal business hours before the Closing Date and within 60
days after the Closing Date. If any such person makes such
examination prior to the Closing Date and identifies any Mortgage
Loans that do not conform to the requirements of the Purchaser as
described in this Agreement, such Mortgage Loans shall be deleted
from the Closing Schedule. The Purchaser may, at its option and
without notice to the Seller, purchase all or part of the Mortgage
Loans without conducting any partial or complete examination. The
fact that the Purchaser or any person has conducted or has failed
to conduct any partial or complete examination of the Mortgage
Files shall not affect the rights of the Purchaser or any assignee,
transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Pooling and Servicing
Agreement.
SECTION 5 Representations, Warranties and Covenants of the
Responsible Party and the Seller .
(a) The Responsible Party hereby represents,
warrants and covenants, to the Seller and the Purchaser, as of the
date hereof and as of the Closing Date, that:
(i) The Responsible Party is duly organized,
validly existing and in good standing under the laws of the state
of California and is and will remain in compliance with the laws of
each state in which any Mortgaged Property is located to the extent
necessary to ensure the enforceability of each Mortgage
Loan;
(ii) The Responsible Party has the full power and
authority to execute, deliver and perform, and to enter into and
consummate, all transactions contemplated by this Agreement. The
Responsible Party has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization,
execution and delivery by the Seller and the Purchaser, constitutes
a legal, valid and binding obligation of the Responsible Party,
enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization;
(iii) The execution and delivery of this Agreement by
the Responsible Party and the performance of and compliance with
the terms of this Agreement which are applicable to the Responsible
Party will not violate the Responsible Party’s articles of
incorporation or bylaws or constitute a default under or result in
a breach or acceleration of, any material contract, agreement or
other instrument to which the Responsible Party is a party or which
may be applicable to the Responsible Party or its
assets;
(iv) The Responsible Party is not in violation of,
and the execution and delivery of this Agreement by the Responsible
Party and its performance and compliance with the terms of this
Agreement will not constitute a violation with respect to, any
order or decree of any court or any order, except as otherwise set
forth in the Order (attached hereto as Exhibit 2, the
“Order”) or regulation of any federal, state, municipal
or governmental agency having jurisdiction over the Responsible
Party or its assets, which violation will likely have consequences
that would materially and adversely affect the condition (financial
or otherwise) or the operation of the Responsible Party or its
assets or might have consequences that would materially and
adversely affect the enforceability of the Mortgage Loans or this
Agreement or the performance of its obligations and duties
hereunder;
(v) The Responsible Party does not believe, nor
does it have any reason or cause to believe, that it cannot perform
each and every covenant of the Responsible Party contained in this
Agreement;
(vi) Except as otherwise set forth in the Order,
there are no actions or proceedings against, or investigations of,
pending or, to the best of its knowledge, threatened the
Responsible Party before any court, administrative or other
tribunal (A) that might prohibit its entering into this Agreement,
(B) seeking to prevent the consummation of the transactions
contemplated by this Agreement or (C) that is likely to prohibit or
materially and adversely affect the performance by the Responsible
Party of its obligations under, or the validity or enforceability
of, this Agreement
(vii) No consent, approval, authorization or order of
or registration or filing with, or notice to any court or
governmental agency or body including, without limitation, the
Federal Deposit Insurance Corporation and the California Department
of Financial Institutions, is required for the execution, delivery
and performance by the Responsible Party of, or compliance by the
Responsible Party with, this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date;
(viii) The consummation of the transactions
contemplated by this Agreement are in the ordinary course of
business of the Responsible Party;
(ix) Neither this Agreement nor any written
statement, report, tape, diskette, form or other document prepared
and furnished or to be furnished by the Responsible Party pursuant
to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of material fact;
and
(x) The Responsible Party will not violate the
terms and conditions of the Order in a manner that materially
affects this Agreement, the Mortgage Loans and the
Purchaser’s interest in the Mortgage Loans, and the
transaction contemplated by this Agreement will not cause the
Responsible Party to violate the Order.
(b) The Seller hereby represents and warrants to
the Responsible Party and the Purchaser, as of the date hereof and
as of the Closing Date, and covenants, that:
(i) The Seller is duly organized, validly existing
and in good standing as a limited partnership under the laws of the
State of Delaware with full limited partnership power and authority
to conduct its business as presently conducted by it to the extent
material to the consummation of the transactions contemplated
herein. The Seller has the full limited partnership power and
authority to own the Mortgage Loans and to transfer and convey the
Mortgage Loans to the Purchaser and has the full limited
partnership power and authority to execute and deliver, engage in
the transactions contemplated by, and perform and observe the terms
and conditions of this Agreement.
(ii) The Seller has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and
delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Responsible Party and
the Purchaser, constitutes a legal, valid and binding obligation of
the Seller, enforceable against it in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization.
(iii) The execution, delivery and performance of this
Agreement by the Seller (x) does not conflict and will not conflict
with, does not breach and will not result in a breach of and does
not constitute and will not constitute a default (or an event,
which with notice or lapse of time or both, would constitute a
default) under (A) any terms or provisions of the certificate of
formation or limited partnership agreement of the Seller, (B) any
term or provision of any material agreement, contract, instrument
or indenture, to which the Seller is a party or by which the Seller
or any of its property is bound or (C) any law, rule, regulation,
order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Seller or any
of its property and (y) does not create or impose and will not
result in the creation or imposition of any lien, charge or
encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or
securing the Mortgage Loans.
(iv) No consent, approval, authorization or order
of, registration or filing with, or notice on behalf of the Seller
to any governmental authority or court is required, under federal
laws or the laws of the State of Delaware, for the execution,
delivery and performance by the Seller of, or compliance by the
Seller with, this Agreement or the consummation by the Seller of
any other transaction contemplated hereby; provided, however, that
the Seller makes no representation or warranty regarding federal or
state securities laws in connection with the sale or distribution
of the Certificates.
(v) This Agreement does not contain any untrue
statement of material fact or omit to state a material fact
necessary to make the statements contained herein not misleading.
The written statements, reports and other documents furnished by
the Seller pursuant to this Agreement or in connection with the
transactions contemplated hereby taken in the aggregate do not
contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements contained therein
not misleading.
(vi) The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and its
performance and compliance with the terms of this Agreement will
not constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the
Seller or its assets, which violation might have consequences that
would materially and adversely affect the condition (financial or
otherwise) or the operation of the Seller or its assets or might
have consequences that would materially and adversely affect the
performance of its obligations and duties hereunder.
(vii) The Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement.
(viii) Immediately prior to the sale of the Mortgage
Loans to the Purchaser as herein contemplated, the Seller will be
the owner of the related Mortgage and the indebtedness evidenced by
the related Mortgage Note, and, upon the payment to the Seller of
the Aggregate Purchase Price, in the event that the Seller retains
or has retained record title, the Seller shall retain such record
title to each Mortgage, each related Mortgage Note and the related
Mortgage Files with respect thereto in trust for the Purchaser as
the owner thereof from and after the date hereof.
(ix) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court,
administrative or other tribunal (A) that might prohibit its
entering into this Agreement, (B) seeking to prevent the sale of
the Mortgage Loans by the Seller or the consummation of the
transactions contemplated by this Agreement or (C) that might
prohibit or materially and adversely affect the performance by the
Seller of its obligations under, or validity or enforceability of,
this Agreement.
(x) The consummation of the transactions
contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance
of the Mortgage Notes and the Mortgages by the Seller are not
subject to the bulk transfer or any similar statutory
provisions.
(xi) The Seller has not dealt with any broker,
investment banker, agent or other person, except for the Purchaser
or any of its affiliates, that may be entitled to any commission or
compensation in connection with the sale of the Mortgage
Loans.
(xii) There is no litigation currently pending or, to
the best of the Seller’s knowledge without independent
investigation, threatened against the Seller that would reasonably
be expected to adversely affect the transfer of the Mortgage Loans,
the issuance of the Certificates or the execution, delivery,
performance or enforceability of this Agreement, or that would
result in a material adverse change in the financial condition of
the Seller.
(xiii) The Seller is solvent and will not be rendered
insolvent by the consummation of the transactions contemplated
hereby. The Seller is not transferring any Mortgage loan with any
intent to hinder, delay or defraud any of its creditors.
(xiv) The Seller makes each of the additional
representations and warranties set forth on Schedule I
hereto.
SECTION 6 Representations and Warranties of the
Responsible Party Relating to the Mortgage Loans
.
The Responsible Party hereby represents and
warrants to the Seller and the Purchaser that as to each Mortgage
Loan as of the Closing Date or as of such other date as specified
herein:
(1) The information set forth in the Mortgage Loan
Schedule and the historical delinquency information described in
Item 1100(b) of Regulation AB as provided in Schedule II hereto
related to the Mortgage Pool is complete, true and correct as of
the Cut-off Date;
(2) Each document or instrument in the related
Mortgage File is in a form generally acceptable to prudent mortgage
lenders that regularly originate or purchase mortgage loans
comparable to the Mortgage Loans for sale to prudent investors in
the secondary market that invest in mortgage loans such as the
Mortgage Loans;
(3) Except for payments in the nature of Escrow
Payments, including without limitation, taxes and insurance
payments, the Originator has not advanced funds, or induced,
solicited or knowingly received any advance of funds from a party
other than the owner of the related Mortgaged Property, directly or
indirectly, for the payment of any amount required by the Mortgage
Note or Mortgage, except for interest accruing from the date of the
Mortgage Note or the date of disbursement of the Mortgage proceeds,
whichever is greater, to the day which precedes by one month the
Due Date of the first installment of principal and interest. No
payment of principal and/or interest under the Mortgage Loan has
ever been thirty (30) days past due, nor has any payment of
principal and/or interest under the Mortgage Loan been more than
thirty (30) days past due at any time since origination. The first
Monthly Payment was or shall be made with respect to the Mortgage
Loan on its Due Date or within the grace period, all in accordance
with the terms of the related Mortgage Note;
(4) There are no delinquent taxes, ground rents,
water and municipal charges, sewer rents, assessments, fire and
hazard insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding
charges affecting the related Mortgaged Property;
(5) The terms of the Mortgage Note and the Mortgage
have not been impaired, waived, altered or modified in any respect,
except by written instruments, recorded, or in the process of being
recorded, in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been
delivered or will be delivered to the Trustee on behalf of the
Purchaser; the substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent
required by the related policy, and is reflected on the Mortgage
Loan Schedule. No instrument of waiver, alteration or modification
has been executed, and no Mortgagor has been released, in whole or
in part, except in connection with an assumption agreement approved
by the title insurer, to the extent required by the policy, and
which assumption agreement has been delivered to the Purchaser and
the terms of which are reflected in the Mortgage Loan
Schedule;
(6) The Mortgage Note and the Mortgage are not
subject to any right of rescission, set-off, counterclaim or
defense, including, without limitation, the defense of usury, nor
will the operation of any of the terms of the Mortgage Note and/or
the Mortgage, or the exercise of any right thereunder, render the
Mortgage Note or the Mortgage unenforceable, in whole or in part,
or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto and no Mortgagor was a debtor in any state or
federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated;
(7) All buildings or other improvements upon the
Mortgaged Property are insured by an insurer acceptable to prudent
lenders in the secondary mortgage market against loss by fire,
hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located,
pursuant to insurance policies conforming to the requirements of
the Pooling and Servicing Agreement. All such insurance policies
contain a standard mortgagee clause naming Fremont Investment &
Loan, its successors and assigns as mortgagee and all premiums
thereon have been paid. If the Mortgaged Property is in an area
identified on a flood hazard map or flood insurance rate map issued
by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available), a flood
insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration with a generally acceptable
insurance carrier, in the amount described in the Pooling and
Servicing Agreement (and to the extent required in the Pooling and
Servicing Agreement) is in effect. The Mortgage obligates the
Mortgagor thereunder to obtain and maintain all such insurance at
the Mortgagor’s cost and expense, and on the
Mortgagor’s failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at Mortgagor’s
cost and expense and to seek reimbursement therefor from the
Mortgagor. The hazard insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be
in full force and effect and inure to the benefit of the Servicer
upon the consummation of the transactions contemplated by this
Agreement. The Originator has not engaged in, and has no knowledge
of the Mortgagor’s having engaged in, any act or omission
which would impair the coverage of any such policy, the benefits of
the endorsement provided for herein, or the validity and binding
effect of either, including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any
kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the
Originator;
(8) Any and all requirements of any federal, state
or local law including, without limitation, all applicable
predatory and abusive lending laws, usury, truth in lending, real
estate settlement procedures, consumer credit protection, equal
credit opportunity, fair housing or disclosure laws applicable to
the origination and servicing of mortgage loans of a type similar
to the Mortgage Loans have been complied with and the consummation
of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Originator shall
maintain in its possession, available for the Purchaser’s
inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements;
(9) The Mortgage has not been satisfied, cancelled,
subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would
effect any such satisfaction, cancellation, subordination,
rescission or release. Neither the Originator nor the Servicer has
waived the performance by the Mortgagor of any action, if the
Mortgagor’s failure to perform such action would cause the
Mortgage Loan to be in default, nor has the Originator or the
Servicer waived any default resulting from any action or inaction
by the Mortgagor;
(10) The related Mortgage is properly recorded and
is a valid, existing and enforceable (A) first lien and first
priority security interest with respect to each Mortgage Loan which
is indicated by to be a first lien (as reflected on the Mortgage
Loan Schedule), or (B) second lien and second priority security
interest with respect to each Mortgage Loan which is indicated by
the Servicer to be a second lien Mortgage Loan (as reflected on the
Mortgage Loan Schedule), in either case, on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property
and all installations and mechanical, electrical, plumbing, heating
and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at
any time with respect to the foregoing. The lien of the Mortgage is
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
prudent mortgage lending institutions generally and specifically
referred to in the lender’s title insurance policy delivered
to the Responsible Party by the Originator and which do not
adversely affect the Value of the Mortgaged Property, (c) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property and (d) a first
lien on the Mortgaged Property with respect to each Mortgage Loan
which is indicated by the Servicer to be a first lien (as reflected
on the Mortgage Loan Schedule) or a second lien on the Mortgaged
Property with respect to each Mortgage Loan which is indicated by
the Servicer to be a second lien (as reflected on the Mortgage Loan
Schedule). 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 (A)
first lien and first priority security interest with respect to
each Mortgage Loan which is indicated to be a first lien (as
reflected on the Mortgage Loan Schedule), or (B) second lien and
second priority security interest with respect to each Mortgage
Loan which is indicated by the Servicer to be a second lien
Mortgage Loan (as reflected on the Mortgage Loan Schedule), in
either case, on the property described therein and the Responsible
Party had full right to sell and assign the same to the Seller. The
Mortgaged Property was not, as of the date of origination of the
Mortgage Loan, subject to a mortgage, deed of trust, deed to secure
debt or other security instrument creating a lien subordinate to
the lien of the Mortgage (other than subordinate loans originated
concurrently therewith);
(11) The Mortgage Note and the related Mortgage are
genuine and each is the legal, valid and binding obligation of the
Mortgagor and enforceable by the Purchaser against such Mortgagor
in accordance with its terms, except only as such enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’
rights generally and by law;
(12) All parties to the Mortgage Note, the Mortgage
and any other related agreement had legal capacity to enter into
the Mortgage Loan, to execute and deliver the Mortgage Note, the
Mortgage and any other related agreement and to pledge, grant or
convey the interest therein purported to be conveyed, and the
Mortgage Note, the Mortgage and any other related agreement have
been duly and properly executed by such parties. The Mortgagor is a
natural person;
(13) The proceeds of the Mortgage Loan have been
fully disbursed to or for the account of the Mortgagor and there is
no obligation for the Mortgagee to advance additional funds
thereunder and any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due to the Mortgagee
pursuant to the Mortgage Note or Mortgage;
(14) No proceeds from any Mortgage Loan were used to
purchase single-premium credit insurance policies;
(15) All parties which have had any interest in the
Mortgage Loan (other than the Seller), whether as originator,
mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were): (A)
organized under the laws of such state, or (B) qualified to do
business in such state, or (C) federal savings and loan
associations or national banks having principal offices in such
state, or (D) not doing business in such state so as to require
qualification or licensing, or (E) not otherwise required to be
licensed in such state. All parties which have had any interest in
the Mortgage Loan were in compliance with any and all applicable
“doing business” and licensing requirements of the laws
of the state wherein the Mortgaged Property is located or were not
required to be licensed in such state;
(16) On the date of its origination and on the
Closing Date, the Mortgage Loan was and is covered by an American
Land Title Association (“ALTA”) lender’s title
insurance policy (which, in the case of an Adjustable-Rate Mortgage
Loan has an adjustable rate mortgage endorsement in the form of
ALTA 6.0 or 6.1) issued by a title insurer acceptable to prudent
lenders in the secondary mortgage market and qualified to do
business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained above in
Section (10)(a), (b) and (d)) the Servicer, its successors and
assigns as to the first priority lien or second priority lien, as
the case may be, of the Mortgage in the original principal amount
of the Mortgage Loan and, with respect to any Adjustable-Rate
Mortgage Loan, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment in the Mortgage Rate and Monthly
Payment. Additionally, such lender’s title insurance policy
affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Servicer is the sole insured
of such lender’s title insurance policy, and such
lender’s title insurance policy is valid and remains in full
force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No
claims have been made under such lender’s title insurance
policy, and no prior holder of the related Mortgage, including the
Originator, has done, by act or omission, anything which would
impair the coverage of such lender’s title insurance policy
including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have
been received, retained or realized by the Originator;
(17) There is no default, breach, violation or event
of acceleration existing under the Mortgage or the Mortgage Note
and, except with respect to a payment under a Mortgage Loan that is
less than thirty (30) days past due, no event which, with the
passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach, violation or event
of acceleration, and neither the Originator nor the Servicer nor
any other entity involved in originating or servicing a Mortgage
Loan has waived any default, breach, violation or event of
acceleration. With respect to each Mortgage Loan which is indicated
by the Servicer to be a second lien Mortgage Loan (as reflected on
the Mortgage Loan Schedule) (i) the first lien 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, and 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;
(18) There are no mechanics’ or similar liens
or claims which have been filed for work, labor or material (and no
rights are outstanding that under law could give rise to such lien)
affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related
Mortgage;
(19) As of the date of origination of the Mortgage
Loan, all improvements which were considered in determining the
Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property;
(20) The Mortgage Loan was originated by Fremont
Investment & Loan or by a savings and loan association, a
savings bank, a commercial bank or similar banking institution
which is supervised and examined by a federal or state authority,
or by a mortgagee approved as such by the Secretary of HUD. The
documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be
stated therein or necessary to make the information and statements
therein not misleading;
(21) Except with regards to interest only loans,
principal payments on the Mortgage Loan shall commence (with
respect to any newly originated Mortgage Loans) or commenced no
more than sixty days after the proceeds of the Mortgage Loan were
disbursed. The Mortgage Loan bears interest at the Mortgage Rate.
With respect to each Mortgage Loan, the Mortgage Note is payable on
the first day of each month in Monthly Payments, which, in the case
of a Fixed-Rate Mortgage Loans, are sufficient to fully amortize
the original principal balance over the original term thereof, of
not more than 30 years, and to pay interest at the related Mortgage
Rate, and, in the case of an Adjustable-Rate Mortgage Loan, are
changed on each Adjustment Date, and in any case, are sufficient to
fully amortize the original principal balance over the original
term thereof and to pay interest at the related Mortgage Rate. The
Index for each Adjustable-Rate Mortgage Loan is as defined in the
Mortgage Loan Schedule. The Mortgage Note does not permit negative
amortization. No Mortgage Loan is a convertible Mortgage
Loan;
(22) The origination practices used by the
Originator and collection practices used by the Servicer with
respect to each Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage
origination and servicing industry. The Mortgage Loan has been
serviced by the Servicer and any predecessor servicer in accordance
with the terms of the Mortgage Note. With respect to escrow
deposits and Escrow Payments (other than with respect to each
Mortgage Loan which is indicated by the Servicer to be a second
lien Mortgage Loan and of which the mortgagee under the first lien
is collecting Escrow Payments (as reflected on the Mortgage Loan
Schedule)), if any, all such payments are in the possession of, or
under the control of, the Servicer and there exist no deficiencies
in connection therewith for which customary arrangements for
repayment thereof have not been made. An escrow of funds is not
prohibited by applicable law with respect to any Mortgage Loan for
which such escrow of funds has been established. All Mortgage Rate
adjustments have been made in strict compliance with state and
federal law and the terms of the related Mortgage Note. If,
pursuant to the terms of the Mortgage Note, another index was
selected for determining the Mortgage Rate, the same index was used
with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the
related Mortgage Note. The Originator or an Affiliate executed and
delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the
Mortgage Rate and the monthly payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has
been properly paid and credited. No escrow deposits or Escrow
Payments or other charges or payments due the Servicer have been
capitalized under any Mortgage or the related Mortgage Note and no
such escrow deposits or Escrow Payments are being held by the
Servicer for any work on a Mortgaged Property which has not been
completed;
(23) The Mortgaged Property is undamaged by waste,
earthquake or earth movement, windstorm, flood, tornado or other
casualty, so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the
premises were intended and there is no proceeding pending or
threatened for the total or partial condemnation thereof nor is
such a proceeding currently occurring;
(24) The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the security
provided thereby, including, (a) in the case of a Mortgage
designated as a deed of trust, by trustee’s sale, and (b)
otherwise by judicial or non-judicial foreclosure. Upon default by
a Mortgagor on a Mortgage Loan and foreclosure on, or
trustee’s sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to
deliver good and merchantable title to the Mortgaged Property. The
Mortgaged Property has not been subject to any bankruptcy
proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no
homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property
at a trustee’s sale or the right to foreclose the Mortgage
subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and rights of redemption. The Mortgagor
has not notified the Originator or the Servicer and neither the
Originator nor the Servicer has any knowledge of any relief
requested or allowed to the Mortgagor under the Servicemembers
Civil Relief Act;
(25) The Mortgage Loan was underwritten in
accordance with the underwriting guidelines of Fremont Investment
& Loan in effect at the time the Mortgage Loan was originated;
and the Mortgage Note and Mortgage are on forms acceptable to
prudent mortgage lending institutions in the secondary
market;
(26) The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding
Mortgage on the Mortgaged Property and the security interest of any
applicable security interest or chattel mortgage referred to in
(10) above;
(27) The Mortgage Note is comprised of one original
promissory note and each such promissory note constitutes an
“instrument” for purposes of Section 102(a)(47) of the
Uniform Commercial Code;
(28) The Mortgage File contains an appraisal of the
related Mortgaged Property which (A) satisfied the standards of
prudent mortgage lending institutions, (B) was conducted generally
in accordance with the Fremont Investment & Loan’s
underwriting guidelines and included an assessment of the fair
market value of the related Mortgaged Property at the time of such
appraisal, and (C) was made and signed, prior to the approval of
the Mortgage Loan application, by a qualified appraiser, duly
appointed by the Originator or the Servicer, who had no interest,
direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, whose compensation is not affected by the
approval or disapproval of the Mortgage Loan and who met the
minimum qualifications of prudent mortgage lending institutions.
Each appraisal of the Mortgage Loan was made in accordance with the
relevant provisions of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989;
(29) In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become
payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee’s sale after default by
the Mortgagor;
(30) No Mortgage Loan contains provisions pursuant
to which Monthly Payments are (a) paid or partially paid with funds
deposited in any separate account established by the Originator,
the Servicer, the Mortgagor, or anyone on behalf of the Mortgagor,
(b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a
“buydown” provision. The Mortgage Loan is not a
graduated payment mortgage loan and the Mortgage Loan does not have
a shared appreciation or other contingent interest
feature;
(31) The Mortgagor has executed a statement to the
effect that the Mortgagor has received all disclosure materials
required by and the Originator has complied with all 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;
(32) No Mortgage Loan was made in connection with
(a) the construction or rehabilitation of a Mortgaged Property or
(b) facilitating the trade-in or exchange of a Mortgaged
Property;
(33) The Mortgaged Property is lawfully occupied
under applicable law; all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities. No improvement located
on or being part of any Mortgaged Property is in violation of any
applicable zoning law or regulation;
(34) No error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to the
origination, modification or amendment of any Mortgage Loan has
taken place on the part of any person, including without limitation
the Mortgagor, any appraiser, any builder or developer, or any
other party involved in the origination of the Mortgage Loan or in
the application of any insurance in relation to such Mortgage Loan;
provided, however, that the Responsible Party shall not be
responsible for facts or circumstances pursuant to this subsection
in the event that the Purchaser does not notify the Responsible
Party of such instance within five (5) years of the Closing Date.
The Originator has reviewed all of the documents constituting the
Mortgage File and has made such inquiries as it deems necessary to
make and confirm the accuracy of the representations set forth
herein;
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