EXECUTION VERSION
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CUSTODIAL AGREEMENT
Among
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
as Buyer
and
MORTGAGEIT, INC.,
as a Seller
and
MORTGAGEIT HOLDINGS, INC.,
as a Seller
and
MHL FUNDING CORP.,
as a Seller
and
NEXT AT BAT LENDING, INC.,
as a Seller
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Custodian
Dated as of October 14, 2005
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TABLE OF CONTENTS
Page
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Section 1.
Definitions........................................................1
Section 2.
Deposit of Mortgage Loans; Effecting a
Transaction.................6
Section 3.
Mortgage Loan Schedule or Exception
Report.........................7
Section 4.
Obligations of the
Custodian.......................................8
Section 5.
Additional Purchased Mortgage
Loans................................9
Section 6.
Future
Defects.....................................................9
Section 7.
Release for
Servicing..............................................9
Section 8.
Limitation on
Release.............................................10
Section 9.
Release for
Payment...............................................10
Section 10. Covenants of the
Seller...........................................12
Section 11. Repurchase
Date...................................................12
Section 12. Transfer of Purchased Mortgage Loans Upon Termination
of a Transaction................................................12
Section 13. Shipment of
Documents.............................................13
Section 14. Examination and Copies of Mortgage
Files..........................13
Section 15. Insurance of the
Custodian........................................13
Section 16. Periodic
Statements...............................................14
Section 17. Fees and Expenses of the
Custodian................................14
Section 18. Custodian
Representations.........................................14
Section 19. No Adverse Interest of the
Custodian..............................15
Section 20. Concerning the
Custodian..........................................15
Section 21.
Indemnification...................................................16
Section 22. Merger or Consolidation of
Custodian..............................17
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Section 23. Removal of the Custodian With Respect to Some or All
of the Purchased Mortgage Loans.................................17
Section 24. Termination by the
Custodian......................................18
Section 25. Successors and
Assigns............................................18
Section 26. Authorized
Representatives........................................18
Section 27.
Notices...........................................................19
Section 28. Reproduction of
Documents.........................................20
Section 29. Amendments; Entire
Agreement......................................20
Section 30. Entire Agreement;
Severability....................................21
Section 31. Governing Law;
Counterparts.......................................21
Section 32. WAIVER OF TRIAL BY
JURY...........................................21
Section 33. Submission to
Jurisdiction........................................21
EXHIBITS
--------
EXHIBIT 1
Mortgage File
EXHIBIT 2
Form of Trust Receipt
EXHIBIT 3
Form of Request for Release of Documents and Receipt
EXHIBIT 4
Authorized Representatives of the Custodian
EXHIBIT 5
Authorized Representatives of the Seller
EXHIBIT 6
Authorized Representatives of the Buyer
EXHIBIT 7
Form of Mortgage Loan Schedule
EXHIBIT 8
Form of Repurchase Release
EXHIBIT 9
Form of Lost Note Affidavit
EXHIBIT 10
Approved Takeout Investors
EXHIBIT 11
Form of Bailee Letter
EXHIBIT 12
Form of Bailee Violation Letter
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This CUSTODIAL AGREEMENT, dated as of October 14, 2005, among
JPMorgan
Chase Bank, National Association (the "Buyer"), MortgageIT, Inc., a
New York
corporation ("MortgageIT" and a "Seller"), MortgageIT Holdings,
Inc., a Maryland
corporation ("Holdings" and a "Seller"), MHL Funding Corp., a
Delaware
corporation ("MHL" and a "Seller"), Next at Bat Lending, Inc., a
Delaware
corporation ("NABL," and collectively with MortgageIT, Holdings,
and MHL the
"Sellers") and Deutsche Bank National Trust Company, as Custodian
(the
"Custodian").
W I T N E S S E T H:
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WHEREAS, the Buyer and the Sellers may, from time to time, enter
into
transactions (each, a "Transaction") in which the Buyer shall
purchase from the
Sellers certain Mortgage Loans, with a simultaneous agreement by
the Sellers to
repurchase such Purchased Mortgage Loans as provided in that
certain Master
Repurchase Agreement dated as of October 14, 2005 between the
Sellers and the
Buyer (the "Repurchase Agreement"); and
WHEREAS, the Buyer has requested the Custodian to act as custodian
on
behalf of the Buyer for purposes of holding the Purchased Mortgage
Loans
purchased by Buyer from the Sellers pursuant to the Repurchase
Agreement; and
WHEREAS, the Custodian is a national banking association, is
otherwise
authorized to act as the Custodian pursuant to this Agreement, and
has agreed to
act as custodian/bailee for hire for the Buyer, all as more
particularly set
forth herein; and
WHEREAS, the Sellers shall from time to time deliver Purchased
Mortgage
Loans to the Custodian that are subject to a Transaction, and has
agreed to
deliver or cause to be delivered to the Custodian certain documents
with respect
to the Purchased Mortgage Loans subject to each Transaction in
accordance with
the terms and conditions hereof;
NOW, THEREFORE, in consideration of the mutual undertakings herein
expressed, the parties hereto hereby agree as follows:
Section 1. Definitions.
Capitalized terms used but not defined herein shall have the
meanings
assigned to them in the Repurchase Agreement. All references to
times herein
shall refer to eastern time.
"Additional Purchased Mortgage Loans" shall have the meaning set
forth
in Section 5 hereof.
"Agency" shall mean Freddie Mac, Fannie Mae or GNMA, as applicable.
"Agreement" shall mean this Custodial Agreement and all amendments
and
attachments hereto and supplements hereof.
"Anticipated Settlement Date" shall mean the anticipated settlement
date for any Takeout Commitment.
"Approved Takeout Investor" shall mean (i) any institution listed
on
Exhibit 12 which has made a Takeout Commitment and has been
approved by Buyer or
(ii) any other institution which has otherwise been approved in
writing by
Buyer.
"Assignment of Lease Agreement" shall mean the specific agreement
creating a first lien on and pledge of the Co-op Shares and the
appurtenant
Proprietary Lease securing the Co-op Loan.
"Assignment of Mortgage" shall mean an assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form
sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property
is located
to reflect the transfer of the Mortgage to the party indicated
therein.
"Assignment of Proprietary Lease" shall mean, with respect to a
Co-op
Loan, an assignment of the Proprietary Lease sufficient under the
laws of the
jurisdiction wherein the related Co-op Unit is located to reflect
the assignment
of such Proprietary Lease."
"Authorized Representative" shall have the meaning set forth in
Section
26 hereof.
"Bailee Letter" shall mean a master bailee letter, in the form of
Exhibit 13, for use by Custodian in connection with the delivery of
a Mortgage
File as contemplated in Section 9 hereof.
"Bailee Violation Letter" shall mean a letter in the form of
Exhibit 14
hereto.
"Business Day" shall mean any day excluding (i) Saturday, Sunday or
(ii) any day on which banks located in the States of New York or
California are
authorized or permitted to close for business or (iii) any day on
which the New
York Stock Exchange is closed.
"Buyer" shall mean JPMorgan Chase Bank, National Association or its
successor in interest or assigns.
"Committed Mortgage Loan" shall mean any Mortgage Loan which is the
subject of a Takeout Commitment with an Approved Takeout Investor.
"Co-op Corporation" shall mean, with respect to any Co-op Loan, the
cooperative apartment corporation that holds legal title to the
related Co-op
Project and grants occupancy rights to units therein to
stockholders through
Proprietary Leases or similar arrangements.
"Co-op Lien Search" shall mean a search for (a) federal tax liens,
mechanics' liens, lis pendens, judgments of record or otherwise
against (i) the
Co-op Corporation and (ii) the seller of the Co-op Unit, (b)
filings of
Financing Statements and (c) the deed of the Co-op Project into the
Co-op
Corporation.
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"Co-op Loan" shall mean a Mortgage Loan secured by the pledge of
stock
allocated to a dwelling unit in a residential cooperative housing
corporation
and collateral assignment of the related Proprietary Lease.
"Co-op Project" shall mean, with respect to any Co-op Loan, all
real
property and improvements thereto and rights therein and thereto
owned by a
Co-op Corporation including without limitation the land, separate
dwelling units
and all common elements.
"Co-op Shares" shall mean, with respect to any Co-op Loan, the
shares
of stock issued by a Co-op Corporation and allocated to a Co-op
Unit and
represented by a stock certificates.
"Co-op Unit" shall mean, with respect to any Co-op Loan, a specific
unit in a Co-op Project.
"Custodian" shall mean Deutsche Bank National Trust Company, or any
successor in interest or assigns, or any successor to the Custodian
under this
Agreement as herein provided.
"Electronic Agent" shall mean MERSCORP, Inc., or its successor in
interest or assigns.
"Estoppel Letter" shall mean a document executed by the Co-op
Corporation certifying, with respect to a Co-op Unit, (i) the
appurtenant
Proprietary Lease will be in full force and effect as of the date
of issuance
thereof, (ii) the related Stock Certificate was registered in the
Mortgagor's
name and the Co-op Corporation has not been notified of any lien
upon, pledge
of, levy of execution on or disposition of such Stock Certificate,
and (iii) the
Mortgagor is not in default under the appurtenant Proprietary Lease
and all
charges due the Co-op Corporation have been paid.
"Event of Default" shall mean any event of default under the
Repurchase
Agreement or any confirmation thereunder.
"Fannie Mae" shall mean Fannie Mae, and any successor thereto.
"Financing Statement" shall mean a financing statement in the form
of a
UCC-1 filed pursuant to the Uniform Commercial Code to perfect a
security
interest in the Co-op Shares and Pledge Instruments.
"Freddie Mac" shall mean Freddie Mac, and any successor thereto.
"GNMA" shall mean the Government National Mortgage Association, and
any
successor thereto.
"Indemnitee" shall have the meaning set forth in Section 21(a)
hereof.
"Last Endorsee" shall have the meaning set forth in Section 3
hereof.
"MERS" shall mean Mortgage Electronic Registration Systems, Inc.,
or
its successors or assigns.
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"MERS System" shall mean the Electronic Agent's mortgage electronic
registry system.
"Mortgage" shall mean the mortgage, deed of trust or other
instrument
securing a Mortgage Note, which creates a first or second lien on
the Mortgaged
Property described therein.
"Mortgage File" shall have the meaning set forth in Exhibit 1 and
Exhibit 1-A attached hereto.
"Mortgage Loan" shall mean any residential real estate secured
loan,
including, without limitation: (i) a promissory note, any
reformation thereof
and related deed of trust (or mortgage) and security agreement;
(ii) all
guaranties and insurance policies, including, without limitation,
all mortgage
and title insurance policies and all fire and extended coverage
insurance
policies and rights of the Sellers to return premiums or payments
with respect
thereto; and (iii) all right, title and interest of the Sellers in
the property
covered by such deed of trust (or mortgage).
"Mortgage Loan Schedule" shall mean a schedule in written and
computer
readable formats of Purchased Mortgage Loans, containing the
information set
forth in Exhibit 7 hereto and otherwise acceptable to the Buyer.
"Mortgage Loan Schedule and Exception Report" shall mean a list of
Purchased Mortgage Loans delivered by the Custodian to the Buyer,
reflecting the
Mortgage Loans held by the Custodian for the benefit of the Buyer,
which
includes codes indicating any exceptions with respect to each
Mortgage Loan
listed thereon. Each Mortgage Loan Schedule and Exception Report
shall contain a
list of exceptions with respect to the information set forth in the
first
paragraph of Section 3 hereof, with any updates thereto from time
to time last
delivered, with respect to the Mortgage Loans being purchased by
the Buyer on
any applicable Purchase Date as well as the Mortgage Loans
previously purchased
by the Buyer and held by the Custodian hereunder.
"Mortgage Note" shall mean the note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage, as the same may
be reformed
or amended from time to time.
"Mortgaged Property" shall mean the real property securing
repayment of
the debt evidenced by a Mortgage Note.
"Mortgagor" shall mean the obligor or obligors on a Mortgage Note,
including any Person who has assumed or guaranteed the obligations
of the
obligor thereunder.
"Notice of Bailment" shall mean a notice, in the form of Schedule 1
to
the Bailee Letter, delivered by Custodian to an Approved Takeout
Investor in
connection with each delivery to such Approved Takeout Investor of
the
applicable portion of each Mortgage File.
"Notice of Default" shall mean written notice delivered by the
Buyer to
the Custodian and the Sellers stating that an Event of Default has
occurred.
"Officer's Certificate" shall mean a certificate signed by a
Responsible Officer of the Person delivering such certificate and
delivered as
required by this Custodial Agreement.
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"Person" shall mean any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock
company, trust,
unincorporated organization, government or any agency or political
subdivision
thereof.
"Pledge Instruments" shall mean, with respect to each Co-op Loan,
the
Stock Power, the Assignment of Proprietary Lease, the assignment of
the Mortgage
Note and the acceptance of assignment of lease agreement.
"Primary Insurance Policy" shall mean a policy of primary mortgage
guaranty insurance issued by a Qualified Insurer, as required under
the
Repurchase Agreement with respect to certain Mortgage Loans.
"Proprietary Lease" shall mean the lease on a Co-op Unit evidencing
the
possessory interest of the owner of the Co-op Shares in such Co-op
Unit.
"Purchase Date" shall mean with respect to each Purchased Mortgage
Loan, the date on which such Purchased Mortgage Loan is purchased
by the Buyer
pursuant to the Repurchase Agreement.
"Purchased Mortgage Loan" shall mean each Mortgage Loan, and/or any
other evidence of ownership of a Mortgage Loan mutually agreed upon
by the Buyer
and the Sellers and identified to the Custodian transferred or
caused to be
transferred by the Sellers to the Buyer or its designee (including
the
Custodian) in a Transaction under the Repurchase Agreement and any
Additional
Purchased Mortgage Loans delivered pursuant to this Agreement.
"Qualified Insurer" shall mean a mortgage guaranty insurance
company
duly authorized and licensed where required by law to transact
mortgage guaranty
insurance business and acceptable under each Seller's underwriting
guidelines.
"Recognition Agreement" shall mean an agreement among a Co-op
Corporation, a lender and a Mortgagor with respect to a Co-op Loan
whereby such
parties (i) acknowledge that such lender may make, or intends to
make, such
Co-op Loan, and (ii) make certain agreements with respect to such
Co-op Loan.
"Repurchase Agreement" shall have the meaning set forth in the
first
paragraph of the recitals hereto.
"Repurchase Date" shall mean, with respect to each Purchased
Mortgage
Loan, the date on which such Purchased Mortgage Loan is to be
repurchased by
each Seller pursuant to the Repurchase Agreement.
"Repurchase Release" shall have the meaning set forth in Section 11
hereof.
"Request for Release" shall have the meaning set forth in Section 7
hereof.
"Responsible Officer" shall mean, with respect to the Custodian,
any
officer, including any managing director, principal, vice
president, assistant
vice president, assistant treasurer, assistant secretary, trust
officer or any
other officer of the Custodian customarily performing
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functions similar to those performed by any of the above designated
officers and
having direct responsibility for the administration of this
Agreement, and also,
with respect to a particular matter, any other officer, to whom
such matter is
referred because of such officer's knowledge and familiarity with
the particular
subject.
"Seller" shall mean each of MortgageIT, Holdings, MHL and NABL or
their
successors in interest or assigns.
"Stock Certificate" shall mean, with respect to a Co-op Loan, the
certificates evidencing ownership of the Co-op Shares issued by the
Co-op
Corporation.
"Stock Power" shall mean, with respect to a Co-op Loan, an
assignment
of the Stock Certificate or an assignment of the Co-op Shares
issued by the
Co-op Corporation.
"Takeout Commitment" shall mean a commitment of a Seller to sell
one or
more Mortgage Loans to an Approved Takeout Investor and the
corresponding
Approved Takeout Investor's commitment back to a Seller to
effectuate the
foregoing.
"Transaction" shall have the meaning set forth in the first
paragraph
of the recitals hereto.
"Trust Receipt" shall mean a trust receipt issued by the Custodian
evidencing the Purchased Mortgage Loans it holds, in the form
attached hereto as
Exhibit 2 and delivered to the Buyer by the Custodian in accordance
with Section
2 hereof.
"Written Instructions" shall mean written communications received
by
the Custodian from an Authorized Representative of the Buyer or the
Sellers,
including communications received by facsimile, or other
telecommunications
device capable of transmitting or creating a written record.
Section 2.
Deposit of Mortgage Loans; Effecting a Transaction.
(a) With respect to each Purchased Mortgage Loan, no later than
4:00
p.m. (New York City time) one Business Day prior to each Purchase
Date, each
Seller shall deliver or cause to be delivered to the Custodian (i)
the Mortgage
Files with respect to the related Purchased Mortgage Loans and (ii)
the related
Mortgage Loan Schedule. No more than 200 Purchased Mortgage Loans
shall be
delivered to the Custodian on any one Business Day.
The Custodian shall deliver to the Buyer via electronic mail in a
format acceptable to the Buyer (with the original to follow by
overnight
courier), no later than 3:00 p.m. (New York City time) on the
Purchase Date, a
Mortgage Loan Schedule and Exception Report and (ii) a Trust
Receipt, in respect
of all Mortgage Loans then held or to be held by the Custodian for
the Buyer's
benefit (including Mortgage Loans to be purchased on such Purchase
Date to the
extent that the Custodian has timely received the items required by
this Section
2(a)).
(b) On each Purchase Date with respect to Purchased Mortgage Loans,
upon receipt of the Mortgage Loan Schedule and Exception Report
from the
Custodian, in form and substance acceptable to the Buyer, the Buyer
shall
transfer to each Seller immediately available funds in an amount
equal to the
related Purchase Price.
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(c) On and after the Purchase Date for any Mortgage Loan, until the
related Repurchase Date, as such date may be extended by Written
Instructions
signed by both the Buyer and a Seller and delivered to the
Custodian, or until
the Custodian shall receive a Notice of Default, the Custodian
shall hold the
Purchased Mortgage Loans related to such Transaction as the
custodian and bailee
for hire for the exclusive benefit of the Buyer and shall not act
upon
instructions of a Seller to deliver the Purchased Mortgage Loans
other than as
expressly provided in this Agreement.
(d) In addition to the foregoing, on the initial Purchase Date, the
Custodian shall deliver to the Buyer, no later than 3:00 p.m. (New
York City
time), a Trust Receipt with a Mortgage Loan Schedule and Exception
Report
attached thereto (provided that the Custodian has timely received
the items
pursuant to Section 2(a) herein). Each Mortgage Loan Schedule and
Exception
Report delivered by the Custodian to the Buyer shall supersede and
cancel the
Mortgage Loan Schedule and Exception Report previously delivered by
the
Custodian to the Buyer hereunder, and shall replace the then
existing Mortgage
Loan Schedule and Exception Report to be attached to the Trust
Receipt.
Notwithstanding anything to the contrary set forth herein, in the
event that the
Mortgage Loan Schedule and Exception Report attached to the Trust
Receipt is
different from the most recently delivered Mortgage Loan Schedule
and Exception
Report, then the most recently delivered Mortgage Loan Schedule and
Exception
Report shall control and be binding upon the parties thereto.
Section 3. Mortgage Loan Schedule or Exception Report.
On each Purchase Date (provided that the Custodian has timely
received
the items required pursuant to Section 2(a) herein), the Custodian
shall issue
and deliver to the Buyer in accordance with Section 2(a) hereof a
Mortgage Loan
Schedule and Exception Report relating to the Purchased Mortgage
Loans to the
effect that with respect to each such Purchased Mortgage Loan,
except as noted
in any attached exception report, (i) all of the documents in
paragraphs (a),
(c), (e), (f), (g), and, to the extent provided, (b), (d), and (h)
on Exhibit 1
attached hereto are in its possession, (ii) all of the documents in
paragraphs
(a), (b), (c), (d), (e), (f), (g), (h) and, to the extent provided,
(i) and (j)
on Exhibit 1-A attached hereto are in its possession (iii) such
documents have
been reviewed by it and appear regular on their face and relate to
such Mortgage
Loan; (iv) based on its examination and only as to the foregoing
documents, the
information set forth in the Mortgage Loan Schedule respecting such
Mortgage
Loan accurately reflects the information contained in the documents
in the
Mortgage File as to (A) the name of the mortgagor, (B) the address
of the
Mortgaged Property, (C) the interest rate on the Mortgage Note, (D)
the original
principal amount of the Mortgage Note, and (E) the maturity date of
the Mortgage
Note; (v) the Mortgage Note and the Mortgage, each bears an
original signature
or signatures purporting to be the signature or signatures of the
person or
persons named as the maker and mortgagor or grantor; or, in the
case of
certified copies of the Mortgage, if any, such copies bear a
reproduction of
such signature or signatures; (vi) all signatures on the Mortgage
properly
relate to the Mortgage Note, as applicable, and the Custodian has
examined the
Mortgage for the completions of any required notarization and has
verified that
any rider or addendum properly relates to the Mortgage and that the
signatures
on any rider or addendum match the signatures on the Mortgage;
(vii) the
original principal amount of the indebtedness secured by the
Mortgage is
identical to the original principal amount of the Mortgage Note;
(viii) if the
Mortgage Note does not name the Seller as the holder or payee, the
Mortgage Note
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bears original endorsements that complete the chain of ownership
from the
original holder or payee to the last endorsee (the "Last
Endorsee"); (ix) if the
Mortgage does not name the Seller or MERS as the mortgagee or
beneficiary, the
original of the Assignment of Mortgage from the named mortgagee or
beneficiary
bears the original signature purporting to be the signature of the
named
mortgagee or beneficiary (including any subsequent assignors) or in
the case of
copies certified by the Seller, such copies bear a reproduction of
such
signature or signatures and that the Assignment of Mortgage and any
intervening
assignments of mortgage complete the chain of title from the
originator to the
Last Endorsee; (x) the Mortgagor name on the Assignment of Mortgage
agrees with
the related Mortgage Loan Schedule; (xi) each Mortgage Note in its
possession
has been endorsed as provided in Exhibit 1 and Exhibit 1-A hereto,
as
applicable; and (xii) each Assignment of Mortgage, Assignment of
Lease Agreement
and Assignment of Proprietary Lease have been executed as provided
in Exhibit 1
and Exhibit 1-A hereto, as applicable.
With respect to any modifications or revisions occurring after the
Purchase Date, not later than the Business Day following each
Purchase Date, the
Custodian shall deliver to the Buyer a revised Mortgage Loan
Schedule and
Exception Report relating to the Purchased Mortgage Loans.
Each Seller shall be solely responsible for providing each and
every
document required for each Mortgage File to the Custodian in a
timely manner and
for completing or correcting any missing, incomplete or
inconsistent documents,
and the Custodian shall not be responsible or liable for taking any
such action,
causing any Seller or any other person or entity to do so or
notifying any
Person (other than the Buyer to the extent specifically required in
this
Agreement) that any such action has or has not been taken. The
Custodian makes
no representations as to and shall not be responsible to determine
or verify (i)
the validity, legality, enforceability, sufficiency, due
authorization, filing
of recording status or history, recordability, or genuineness of
any document in
any Mortgage File or any of the Purchased Mortgage Loans identified
on the
Mortgage Loan Schedule and Exception Report or (ii) the
collectability,
insurability, effectiveness or suitability of any such Purchased
Mortgage Loan.
The Custodian shall not be required to review the content (except
as necessary
to certify its presence or absence) of any document described in
the preceding
paragraph except as expressly required herein in order to deliver
the Mortgage
Loan Schedule and Exception Report.
Section 4. Obligations of the Custodian.
(a) With respect to the Mortgage Files delivered to the Custodian
or
which come into the possession of the Custodian, following the
related transfer
pursuant to Section 2(b) above until the interests of the Buyer
have been
released pursuant to this Agreement, the Custodian is the custodian
for the
Buyer, exclusively. The Custodian shall, following the related
transfer pursuant
to Section 2(b) above until the interests of the Buyer have been
released
pursuant to this Agreement, hold all documents received by it for
the exclusive
use and benefit of the Buyer and shall make disposition thereof
only in
accordance with this Agreement and the Written Instructions
furnished by the
Buyer. The Custodian shall segregate and maintain continuous
custody of the
Mortgage Files in secure and fire-resistant facilities in
accordance with
customary standards for such custody.
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(b) The Custodian shall promptly notify the Buyer if (i) any Seller
fails to pay any amount due to the Custodian under this Agreement
or (ii) a
Responsible Officer of the Custodian has actual knowledge that any
Mortgage,
pledge, lien, security interest or other charge or encumbrance has
been placed
on the Mortgage Files.
Section 5. Additional Purchased Mortgage Loans.
(a) Each Seller may, from time to time, deliver to the Custodian
one or
more additional Mortgage Loans (each an "Additional Purchased
Mortgage Loans")
as an addition to the Purchased Mortgage Loans already held by the
Custodian
with respect to a Transaction. In such event, such Seller shall
deliver to the
Custodian the Mortgage File for each Additional Purchased Mortgage
Loans
together with a Mortgage Loan Schedule, with a copy to the Buyer,
stating that
the Additional Purchased Mortgage Loan is being delivered with
respect to an
identified Transaction. It is expressly understood and agreed that
the Custodian
shall have no duty to perform any valuation of collateral and shall
have no
responsibility to ascertain the adequacy of any Additional
Purchased Mortgage
Loans other than undertaking a review of the related Mortgage File
in accordance
with Section 3 hereof.
(b) The Custodian shall deliver to the Buyer no later than one
Business
Day after receipt of such Additional Purchased Mortgage Loan and
Mortgage Loan
Schedule from such Seller, a Mortgage Loan Schedule and Exception
Report that
reflects the delivery of each Additional Purchased Mortgage Loan;
provided that
in the event that the Custodian does not receive the items required
to be
delivered pursuant to Section 5(a) above by no later than 3:00 p.m.
(New York
City time) on the Business Day prior to the date of delivery, then
the Custodian
shall deliver such Mortgage Loan Schedule and Exception Report
within one
Business Day after the date of delivery. In issuing such Mortgage
Loan Schedule
and Exception Report, the Custodian shall employ the same
procedures as set
forth in Section 3 in reviewing the Mortgage Files.
Section 6. Future Defects.
During the term of this Agreement, if the Custodian discovers any
defect with respect to any Mortgage File, the Custodian shall give
written
specification of such defect to the Seller and the Buyer. For
purposes of this
Section, "defect" shall mean a failure of a document to correspond
to the
information set forth in the applicable Mortgage Loan Schedule or
the absence of
a Mortgage File or any part thereof or any other document required
pursuant to
this Agreement. Each Seller shall be solely responsible for
completing or
correcting any missing, incomplete or inconsistent documents, and
the Custodian
shall not be responsible or liable for taking any such action,
causing such
Seller or any other person or entity to do so or notifying any
Person that any
such action has or has not been taken.
Section 7. Release for Servicing.
(a) From time to time and as appropriate for the servicing of any
of
the Purchased Mortgage Loans, the Custodian shall, upon receipt of
a Request for
Release of Documents and Receipt in the form of Exhibit 3 attached
hereto
("Request for Release"), release or cause to be released to Sellers
or the
Sellers' Authorized Representative the related Mortgage File or the
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documents of the related Mortgage File set forth in such Request
for Release.
Each Seller shall send a copy of any such Request for Release to
the Buyer. Any
document released to a Seller or such Seller's Authorized
Representative
pursuant to a Request for Release shall be returned to the
Custodian no later
than 10 Business Days from the date on such Request for Release,
and the
Custodian shall notify the Buyer of any failure by a Seller to so
return any
such document.
All Mortgage Files or documents from Mortgage Files released by the
Custodian to a Seller or, upon such Seller's Written Instructions,
such Seller's
Authorized Representative, pursuant to this Section 7 shall be held
by a Seller
or such Seller's Authorized Representative, as applicable, in trust
for the
benefit of the Buyer. Each Seller or such Seller's Authorized
Representative, as
applicable, shall return to the Custodian the Mortgage File or
other such
documents from Mortgage Files when the need therefor in connection
with such
servicing no longer exists (but in any event no later than 10
Business Days from
the date on such Request for Release), unless the Mortgage Loan
shall be
liquidated, in which case, a Seller or, if the Mortgage File or
documents were
released to such Seller's Authorized Representative, such Seller's
Authorized
Representative shall deliver to the Custodian an additional Request
for Release
that has been acknowledged and agreed to by the Buyer certifying
such
liquidation. Upon receipt of the related Mortgage File or other
such documents
from a Seller, the Custodian shall return the related Request for
Release to
such Seller, with a copy to the Buyer, acknowledging receipt of
such Mortgage
File or other such documents.
Section 8. Limitation on Release.
The foregoing Section 7 shall be operative only to the extent that
at
any time the Custodian shall not have released to a Seller or such
Seller's
Authorized Representative in total active Mortgage Files or
documents (including
those requested) pertaining to ten Mortgage Loans at the time being
held by the
Custodian under this Agreement. If ten Mortgage Loans or more have
been, and
remain released to a Seller at the time of request, the Mortgage
Note and/or
Assignment of Mortgage or any additional Mortgage Files or
documents requested
to be released by such Seller or such Seller's Authorized
Representative may be
released only upon the written acknowledgment of the Request for
Release by the
Buyer. The limitations of this paragraph shall not apply to the
release of
Mortgage Files to a Seller or, upon such Seller's Written
Instructions, such
Seller's Authorized Representative, under Section 9 below.
Section 9. Release for Payment; Takeout Provisions; Funding by a
Takeout
Investor.
(a) Release for Payment. Upon the payment in full, liquidation
or repurchase of any Mortgage Loan, and upon receipt by the
Custodian
of a Request for Release certifying that all proceeds related to
such
payment in full, liquidation, or repurchase have been received
(provided that a Seller shall have delivered a copy of such Request
for
Release to the Buyer and the Custodian shall not have received a
Notice
of Default from the Buyer), the Custodian shall promptly release
the
related Mortgage File to such Seller or, upon such Seller's Written
Instructions, such Seller's Authorized Representative. After such
release the Custodian shall amend the Mortgage Loan Schedule and
Exception Report to reflect the release of the applicable Mortgage
Loan
and shall deliver to the Buyer such amended Mortgage Loan Schedule
and
Exception Report.
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(b) Takeout Provisions. Funding by a Takeout Investor.
(i) Each Seller shall provide to Custodian a completed Request
for Release (signed by such Seller and acknowledged by the Buyer)
with
respect to the related Committed Mortgage Loans. The Mortgage Files
relating to the Committed Mortgage Loans included in a Request for
Release shall be sent for delivery by Custodian to the applicable
Approved Takeout Investor specified by such Seller to Buyer and
Custodian in writing by 5:00 p.m. (New York City time) on the
Business
Day following the Business Day on which the completed Request for
Release is received by Custodian. In the event that the Request for
Release is not received prior to 12 noon New York City time,
Custodian
shall use reasonable efforts to effect same day shipment of the
related
Mortgage Files, but in any event shall send such Mortgage Files on
the
following Business Day. Such Mortgage Files shall be sent via
overnight
courier at such Seller's expense in accordance with such Seller's
delivery instructions on the Request for Release and under cover of
a
fully completed Notice of Bailment prepared by Custodian in
accordance
with the terms of the Bailee Letter. Custodian shall not deliver
any
Mortgage File to any potential Approved Takeout Investor unless
such
Approved Takeout Investor was identified by a Seller to Buyer and
Custodian on the Purchase Date in the Mortgage Loan Schedule or as
otherwise agreed to in writing by Buyer (with a copy to Custodian)
pursuant to the terms hereof. Custodian shall deliver such
documents
accompanied by a Bailee Letter (to be prepared by a Seller and sent
to
Buyer and Custodian for execution) to the Approved Takeout
Investor.
The location of the Approved Takeout Investor's office specified on
the
Notice of Bailment may only be changed with the prior written
approval
of Buyer.
(ii) At any time following the delivery of a Request for
Release, in the event Custodian becomes aware of any defect with
respect to a related Mortgage File or the related forms, including
the
return of documents to Custodian from an Approved Takeout Investor
due
to a defect in such documents, the Custodian shall give prompt oral
or
electronic notice of such defect to Buyer, followed by a written
specification thereof to Buyer within one Business Day. In
addition,
Custodian shall provide a Bailee Violation Letter to Buyer and the
Approved Takeout Investor in the event that Buyer notifies
Custodian
that any documents remain in the possession of an Approved Takeout
Investor for thirty days and the related Mortgage Loans have not
been
purchased by Approved Takeout Investor prior to such date.
(iii) On the Anticipated Settlement Date, unless Custodian
receives on or prior to such Anticipated Settlement Date a Notice
of
Default or Written Instructions from both Buyer and each Seller
that
the Anticipated Settlement Date has been extended, Buyer
irrevocably
instructs Custodian to release to the Approved Takeout Investor the
Purchased Mortgage Loans with respect to such Transaction with a
fully
completed Notice of Bailment. Notwithstanding anything to the
contrary
herein, in the event the Purchased Mortgage Loans are repurchased
prior
to the related Anticipated Settlement Date pursuant to the
Repurchase
Agreement, Buyer irrevocably instructs Custodian, upon receipt of
written notice thereof from Buyer, to release to such Seller such
Purchased Mortgage Loans as more particularly described in Section
9(a)
above.
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(iv) In the event that an Approved Takeout Investor rejects a
Mortgage Loan for purchase pursuant to a Takeout Commitment for any
reason whatsoever, Custodian shall promptly notify Buyer and each
Seller upon receipt of the returned Mortgage File or notification
from
the Approved Takeout Investor (and Custodian shall provide to Buyer
the
loan identification number).
Section 10. Covenants of the Seller.
Each Seller covenants to the Buyer as of the date that any Mortgage
File documents are released to such Seller or such Seller's
subservicer pursuant
to a Request for Release that:
(a) if the Request for Release has been submitted for the release
of a
Purchased Mortgage Loan that has been paid in full, all amounts
received in
connection with the payment in full of the Purchased Mortgage Loan
have been
credited to the Buyer as provided in the Repurchase Agreement;
(b) if item No. 1 has been checked on the Request for Release, the
Repurchase Price for the applicable Purchased Mortgage Loan has
been credited to
the Buyer as provided in the Repurchase Agreement; and
(c) if item No. 4 has been checked on the Request for Release, all
proceeds of foreclosure, insurance, condemnation or other
liquidation have been
finally received and credited to the Buyer pursuant to the
Repurchase Agreement.
Section 11. Repurchase Date.
Each Seller shall provide the Buyer and the Custodian with Written
Instructions prior to 10:00 a.m. (New York City time) on each
Repurchase Date on
which such Seller intends to remove Purchased Mortgage Loans from
the repurchase
facility governed by the Repurchase Agreement, which Written
Instructions shall
include a schedule of Purchased Mortgage Loans to be removed on
such date
(unless all Purchased Mortgage Loans are to be removed, in which
case the
Written Instructions shall indicate this fact). The Buyer shall
send a
Repurchase Release in the form of Exhibit 8 hereto (a "Repurchase
Release") to
each Seller and the Custodian by 10:00 a.m. (New York City time) on
the
Repurchase Date listing the Purchased Mortgage Loans to be released
on such
Repurchase Date. On the Repurchase Date for each Transaction,
unless the
Custodian receives on the Business Day prior to such Repurchase
Date a Notice of
Default from the Buyer or Written Instructions from both the Buyer
and each
Seller that the Repurchase Date has been extended, the Buyer hereby
irrevocably
instructs the Custodian to release to each Seller or its designee
the Purchased
Mortgage Loans designated in such Repurchase Release upon receipt
of
notification by the Custodian from the Buyer that it has received
the Repurchase
Price. The Buyer shall notify the Custodian immediately upon
confirmation that
each Seller has transmitted the Repurchase Price.
Section 12. Transfer of Purchased Mortgage Loans Upon Termination
of a
Transaction.
If the Custodian is furnished with Written Instructions in the form
of
Exhibi
