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Exhibit 99.12(b)
EXECUTION COPY
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FIRST AMENDED AND RESTATED MORTGAGE LOAN SALE AND SERVICING
AGREEMENT
between
THE HEMISPHERE NATIONAL BANK,
as Seller and as Servicer
and
MORGAN STANLEY MORTGAGE CAPITAL INC.,
as Purchaser
Dated as of December 1, 2005
Conventional,
Fixed and Adjustable Rate,
Residential Mortgage Loans
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<TABLE>
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TABLE OF CONTENTS
Page
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SECTION 1.
DEFINITIONS............................................................................1
SECTION 2. PURCHASE AND
CONVEYANCE...............................................................17
SECTION 3. MORTGAGE LOAN
SCHEDULE................................................................17
SECTION 4. PURCHASE
PRICE........................................................................18
SECTION 5. EXAMINATION OF MORTGAGE
FILES.........................................................18
SECTION 6. DELIVERY OF MORTGAGE LOAN
DOCUMENTS...................................................19
Subsection 6.01 Possession of Mortgage
Files..........................................................19
Subsection 6.02 Books and
Records.....................................................................19
Subsection 6.03 Delivery of Mortgage Loan
Documents...................................................20
Subsection 6.04 MERS Designated
Loans.................................................................21
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS; REMEDIES FOR
BREACH........................21
Subsection 7.01 Representations and Warranties Regarding Individual
Mortgage Loans....................21
Subsection 7.02 Seller
Representations................................................................32
Subsection 7.03 Remedies for Breach of Representations and
Warranties.................................36
Subsection 7.04 Repurchase of Mortgage Loans with Early Payment
Defaults..............................38
Subsection 7.05 Premium
Recapture.....................................................................39
SECTION 8.
CLOSING...............................................................................39
SECTION 9. CLOSING
DOCUMENTS.....................................................................39
SECTION 10.
COSTS.................................................................................41
SECTION 11. ADMINISTRATION AND SERVICING OF THE MORTGAGE
LOANS....................................41
Subsection 11.01 Servicer to Act as
Servicer...........................................................41
Subsection 11.02 Liquidation of Mortgage
Loans.........................................................42
Subsection 11.03 Collection of Mortgage Loan
Payments..................................................42
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Subsection 11.04 Establishment of Custodial Account; Deposits in
Custodial.............................42
Subsection 11.05 Withdrawals From the Custodial
Account................................................44
Subsection 11.06 Establishment of Escrow Account; Deposits in
Escrow Account...........................45
Subsection 11.07 Withdrawals From Escrow
Account.......................................................45
Subsection 11.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.................46
Subsection 11.09 Transfer of
Accounts..................................................................46
Subsection 11.10 Maintenance of Hazard
Insurance.......................................................46
Subsection 11.11 Fidelity Bond; Errors and Omissions
Insurance.........................................47
Subsection 11.12 Title, Management and Disposition of REO
Property.....................................47
Subsection 11.13 Servicing
Compensation................................................................49
Subsection 11.14
Distributions.........................................................................49
Subsection 11.15 Statements to the
Purchaser...........................................................50
Subsection 11.16 Advances by the
Servicer..............................................................51
Subsection 11.17 Assumption
Agreements.................................................................51
Subsection 11.18 Satisfaction of Mortgages and Release of Mortgage
Files...............................52
Subsection 11.19 Annual Statement as to
Compliance.....................................................52
Subsection 11.20 Annual Independent Public Accountants' Servicing
Report or Attestation................52
Subsection 11.21 Servicer Shall Provide Access and Information as
Reasonably Required..................52
Subsection 11.22 Transfer of
Servicing.................................................................53
Subsection 11.23 Notification of Maturity
Date.........................................................55
Subsection 11.24 Notification of
Adjustments...........................................................55
Subsection 11.25 Availability of
Information...........................................................56
SECTION 12. THE
SERVICER..........................................................................56
Subsection 12.01 Indemnification; Third Party
Claims...................................................56
Subsection 12.02 Merger or Consolidation of the
Servicer...............................................57
Subsection 12.03 Limitation on Liability of the Servicer and
Others....................................58
Subsection 12.04 Seller and Servicer Not to
Resign.....................................................58
Subsection 12.05 Inspection and Audit
Rights...........................................................58
SECTION 13.
DEFAULT...............................................................................59
Subsection 13.01 Events of
Default.....................................................................59
Subsection 13.02 Waiver of
Defaults....................................................................60
SECTION 14.
TERMINATION...........................................................................60
Subsection 14.01
Termination...........................................................................60
Subsection 14.02 Termination of the Servicer Without
Cause.............................................61
Subsection 14.03 Successors to the
Servicer............................................................61
SECTION 15. COOPERATION OF SELLER WITH A
RECONSTITUTION...........................................62
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SECTION 16.
NOTICES...............................................................................64
SECTION 17. SEVERABILITY
CLAUSE...................................................................65
SECTION 18. NO
PARTNERSHIP........................................................................66
SECTION 19.
COUNTERPARTS..........................................................................66
SECTION 20. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF
PROCESS.............................66
SECTION 21. MANDATORY DELIVERY; GRANT OF SECURITY
INTEREST........................................66
SECTION 22. INTENTION OF THE
PARTIES..............................................................67
SECTION 23. SUCCESSORS AND
ASSIGNS................................................................67
SECTION 24.
WAIVERS...............................................................................67
SECTION 25.
EXHIBITS..............................................................................67
SECTION 26. GENERAL INTERPRETIVE
PRINCIPLES.......................................................67
SECTION 27. REPRODUCTION OF
DOCUMENTS.............................................................68
SECTION 28.
AMENDMENT.............................................................................68
SECTION 29.
CONFIDENTIALITY.......................................................................68
SECTION 30. ENTIRE
AGREEMENT......................................................................69
SECTION 31. FURTHER
AGREEMENTS....................................................................69
SECTION 32. NO
SOLICITATION.......................................................................69
SECTION 33. WAIVER OF JURY
TRIAL..................................................................69
SECTION 34. COMPLIANCE WITH REGULATION
AB.........................................................70
Subsection 34.01 Intent of the Parties;
Reasonableness.................................................70
Subsection 34.02 Additional Representations and Warranties of the
Seller...............................70
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Subsection 34.03 Information to Be Provided by the
Seller..............................................71
Subsection 34.04 Servicer Compliance
Statement.........................................................75
Subsection 34.05 Report on Assessment of Compliance and
Attestation....................................76
Subsection 34.06 Use of Subservicers and
Subcontractors................................................77
Subsection 34.07 Indemnification;
Remedies.............................................................78
</TABLE>
EXHIBITS
EXHIBIT 1 MORTGAGE LOAN DOCUMENTS
EXHIBIT 2 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 3 FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT 4 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 7 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 8 SELLER'S UNDERWRITING GUIDELINES
EXHIBIT 9 FORM OF MONTHLY REMITTANCE REPORT
EXHIBIT 10 FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 11 FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 12 FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT 13 FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT 14 FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT 15 FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT 16 FORM OF ANNUAL CERTIFICATION
EXHIBIT 17 MONTHLY REO PROPERTY REPORT DATA FIELDS
EXHIBIT 18 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF
COMPLIANCE
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FIRST AMENDED AND RESTATED MORTGAGE LOAN SALE AND SERVICING
AGREEMENT
THIS FIRST AMENDED AND RESTATED MORTGAGE LOAN SALE AND
SERVICING
AGREEMENT (the "Agreement"), dated as of December 1, 2005, is
hereby executed
by and between MORGAN STANLEY MORTGAGE CAPITAL INC., a New York
corporation
(the "Purchaser"), and THE HEMISPHERE NATIONAL BANK, a national
banking
association, in its capacity as seller (the "Seller") and in its
capacity as
servicer (the "Servicer").
W I T N E S S E T H:
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WHEREAS, the Purchaser and the Seller are parties to that
certain
Mortgage Loan Sale and Servicing Agreement, dated as of May 1, 2005
(the
"Original Purchase Agreement"), and the Seller desires to sell,
from time to
time, to the Purchaser, and the Purchaser desires to purchase, from
time to
time, from the Seller, on a servicing-retained basis, certain
conventional
fixed and adjustable rate residential first lien mortgage loans
(the "Mortgage
Loans") on a servicing retained basis as described herein, and
which shall be
delivered in pools of whole loans (each, a "Mortgage Loan Package")
on various
dates as provided herein (each, a "Closing Date");
WHEREAS, at the present time, the Purchaser and the Seller desire
to
amend the Original Purchase Agreement to make certain
modifications.
NOW, THEREFORE, in consideration of the premises and mutual
agreements
set forth herein, and for other good and valuable consideration,
the receipt
and sufficiency of which are hereby acknowledged, the Purchaser,
the Seller
and the Servicer agree as follows:
Section 1. Definitions. For purposes of this Agreement, the
following
capitalized terms shall have the respective meanings set forth
below.
Accepted Servicing Procedures: Procedures (including collection
procedures) that the Servicer customarily employs and exercises in
servicing
and administering mortgage loans for its own account that are
similar to the
Mortgage Loans and which are in accordance with accepted mortgage
servicing
practices of prudent mortgage lending institutions which service
mortgage
loans of the same type as the Mortgage Loans in the jurisdictions
where the
related Mortgaged Properties are located.
Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant
to this
Agreement, the Mortgage Interest Rate of which is adjusted from
time to time
in accordance with the terms of the related Mortgage Note.
Affiliate: With respect to any specified Person, any other
Person
controlling or controlled by or under common control with such
specified
Person. For the purposes of this definition, "control" when used
with respect
to any specified Person means the power to direct the management
and policies
of such Person, directly or indirectly, whether through the
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ownership of voting securities, by contract or otherwise and the
terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
Agency Transfer: A Fannie Mae Transfer or a Freddie Mac
Transfer.
Agreement: This First Amended and Restated Mortgage Loan Sale
and
Servicing Agreement including all exhibits, schedules, amendments
and
supplements hereto.
ALTA: The American Land Title Association.
Applicable Law: A law applicable to the Seller or the Servicer, as
the
case may be, and specifically excluding any state or local laws
that are
preempted on the basis that any such Person is a national banking
association.
Appraised Value: With respect to any Mortgaged Property, the lesser
of
(i) the value thereof as determined by an appraisal made for the
originator of
the Mortgage Loan at the time of origination of the Mortgage Loan
by a
Qualified Appraiser and (ii) the purchase price paid for the
related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan;
provided,
however, that in the case of a Refinanced Mortgage Loan, such value
of the
Mortgaged Property is based solely upon the value determined by an
appraisal
made for the originator of such Refinanced Mortgage Loan at the
time of
origination of such Refinanced Mortgage Loan by a Qualified
Appraiser.
Assignment and Conveyance Agreement: As defined in Section 2.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice
of transfer or equivalent instrument in recordable form and in
blank,
sufficient under the laws of the jurisdiction in which the related
Mortgaged
Property is located to give record notice of the sale of the
Mortgage to the
Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only
payments
of interest until the stated maturity date of the Mortgage Loan or
(b) for
which Monthly Payments of principal (not including the payment due
on its
stated maturity date) are based on an amortization schedule that
would be
insufficient to fully amortize the principal thereof by the stated
maturity
date of the Mortgage Loan.
Business Day: Any day other than a Saturday or Sunday, or a day on
which
banking and savings and loan institutions in the state in which (i)
the
Servicer is located or (ii) the Custodial Account is maintained,
are
authorized or obligated by law or executive order to be closed.
Cash-Out Refinance: A Refinanced Mortgage Loan in which the
proceeds
received were in excess of the amount of funds required to repay
the principal
balance of any existing first mortgage on the related Mortgaged
Property, pay
related closing costs and satisfy any outstanding subordinate
mortgages on the
related Mortgaged Property and which provided incidental cash to
the related
Mortgagor of more than 1% of the original principal balance of such
Mortgage
Loan.
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Closing Date: The date or dates on which the Purchaser from time to
time
shall purchase, and the Seller from time to time shall sell, the
Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to
the related
Mortgage Loan Package.
Closing Documents: The documents required to be delivered on each
Closing
Date pursuant to Section 9.
CLTA: The California Land Title Association.
Code: The Internal Revenue Code of 1986, as amended, or any
successor
statute thereto.
Commission: The United States Securities and Exchange
Commission.
Condemnation Proceeds: All awards, compensation and settlements
in
respect of a taking of all or part of a Mortgaged Property, whether
permanent
or temporary, partial or entire, by exercise of the power of
condemnation or
the right of eminent domain, to the extent not required to be
released to a
Mortgagor in accordance with the terms of the related Mortgage Loan
Documents.
Co-op: A private, cooperative housing corporation, having only one
class
of stock outstanding, which owns or leases land and all or part of
a building
or buildings, including apartments, spaces used for commercial
purposes and
common areas therein and whose board of directors authorizes the
sale of stock
and the issuance of a Co-op Lease.
Co-op Lease: With respect to a Co-op Loan, the lease with respect
to a
dwelling unit occupied by the Mortgagor and relating to the stock
allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a
dwelling unit in a residential cooperative housing corporation and
a
collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix
E of Standard & Poor's Glossary.
Custodial Account: As defined in Subsection 11.04.
Custodial Agreement: The agreement governing the retention of
the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage
and other
Mortgage Loan Documents. If more than one Custodial Agreement is in
effect at
any given time, all of the individual Custodial Agreements shall
collectively
be referred to as the "Custodial Agreement."
Custodian: J.P. Morgan Trust Company, National Association, a
national
banking association, and its successors in interest, or any
successor to the
Custodian under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the
related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
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Cut-off Date Principal Balance: The aggregate Stated Principal
Balance of
the Mortgage Loans as of the applicable Cut-off Date which is
determined after
the application, to the reduction of principal, of payments of
principal due
on or before such Cut-off Date, whether or not collected, and of
partial
principal prepayments received before such Cut-off Date.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or to
be
repurchased or replaced or to be replaced with a Qualified
Substitute Mortgage
Loan by the Seller in accordance with the terms of this
Agreement.
Depositor: The depositor, as such term is defined in Regulation AB,
with
respect to any Securitization Transaction.
Determination Date: With respect to each Remittance Date, the 15th
day
(or, if such 15th day is not a Business Day, the following Business
Day) of
the month in which such Remittance Date occurs.
Due Date: With respect to each Remittance Date, the first day of
the
calendar month in which such Remittance Date occurs, which is the
day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any
days of grace.
Due Period: With respect to each Remittance Date and any Mortgage
Loan,
the period beginning on the second day of the month preceding such
Remittance
Date through and including the first day of the month in which such
Remittance
Date occurs.
Eligible Account: Either (i) an account maintained with a federal
or
state chartered depository institution or trust company the
short-term
unsecured debt obligations of which (or, in the case of a
depository
institution or trust company that is a subsidiary of a holding
company, the
short-term unsecured debt obligations of such holding company) are
rated
"A-1+" by Standard & Poor's, "F-1" by Fitch and "P-1" by
Moody's (or a
comparable rating if another rating agency is specified by the
Purchaser by
written notice to the Seller) at the time any amounts are held on
deposit
therein, (ii) an account or accounts the deposits in which are
fully insured
by FDIC, (iii) a trust account or accounts maintained with a
federal or state
chartered depository institution or trust company acting in its
fiduciary
capacity or (iv) any other account acceptable to Standard &
Poor's, Fitch and
Moody's.
Eligible Investments: Any one or more of the following obligations
or
securities acquired at a purchase price of not greater than par,
regardless of
whether issued by the Purchaser, the Seller or any of their
respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as a
timely payment of principal and interest by, the United States or
any
agency or instrumentality thereof, provided such obligations are
backed
by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of,
or
bankers' acceptances (which shall each have an original maturity of
not
more than 90 days and, in the case of bankers' acceptances, shall
in no
event have an original maturity of more than 365 days or a
remaining
maturity of more than 30 days)
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denominated in United States dollars and issued by, and
Depository
Institution and rated "P-1" by Moody's, "F1+" by Fitch and "A-1+"
by
Standard & Poor's;
(iii) repurchase obligations with respect to any security
described
in clause (i) above entered into with a Depository Institution
(acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the
United
States of America or any State thereof and that are rated by each
rating
agency that rates such securities in its highest long-term
unsecured
rating categories at the time of such investment or contractual
commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount
obligations and interest-bearing obligations payable on demand or
on a
specified date not more than 30 days after the date of
acquisition
thereof) that is rated by each rating agency that rates such
securities
in its highest short-term unsecured debt rating available at the
time of
such investment;
(vi) units of money market funds, including money market funds
advised by the Purchaser or an Affiliate thereof, that have been
rated
"Aaa" by Moody's, "AAA" by Standard & Poor's and at least "AAA"
by Fitch;
and
(vii) if previously confirmed in writing to the Purchaser, any
other
demand, money market or time deposit, or any other obligation,
security
or investment, as may be acceptable to the rating agencies as a
permitted
investment of funds backing "Aaa" or "AAA rated securities;
provided, however, that no instrument described hereunder shall
evidence
either the right to receive (a) only interest with respect to the
obligations
underlying such instrument or (b) both principal and interest
payments derived
from obligations underlying such instrument and the interest and
principal
payments with respect to such instrument provide a yield to
maturity at par
greater than 120% of the yield to maturity at par of the
underlying
obligations.
Escrow Account: As defined in Subsection 11.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer
rents,
municipal charges, mortgage insurance premiums, fire and hazard
insurance
premiums, condominium charges, and any other payments required to
be escrowed
by the Mortgagor with the Mortgagee pursuant to the Mortgage or any
other
document.
Event of Default: Any one of the conditions or circumstances
enumerated
in Subsection 13.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Fannie Mae: The Federal National Mortgage Association or any
successor
thereto.
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<PAGE>
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie
Mae
Servicers' Guide, as amended or restated from time to time.
Fannie Mae Transfer: As defined in Section 15.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
FHA: The Federal Housing Administration, an agency within the
United
States Department of Housing and Urban Development, or any
successor thereto
and including the Federal Housing Commissioner and the Secretary of
Housing
and Urban Development where appropriate under the FHA
Regulations.
Fidelity Bond: The fidelity bond required to be obtained by the
Servicer
pursuant to Subsection 11.11.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act
of 1989, as amended and in effect from time to time.
Fitch: Fitch Ratings Inc., and any successor thereto.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant
to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor
thereto.
Freddie Mac Transfer: As defined in Section 15.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the
fixed percentage amount set forth in the related Mortgage Note
which amount is
added to the Index in accordance with the terms of the related
Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and
Equity Protection Act of 1994, (b) classified as a "high cost
home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans"
as that
term was defined in clause (1) of the definition of that term in
the New
Jersey Home Ownership Security Act of 2002 that were originated
between
November 26, 2003 and July 7, 2004), "high risk home," "predatory"
or similar
loan under any other applicable state, federal or local law (or a
similarly
classified loan using different terminology under a law imposing
heightened
regulatory scrutiny or additional legal liability for residential
mortgage
loans having high interest rates, points and/or fees) or (c) a
Mortgage Loan
categorized as High Cost pursuant to Appendix E of Standard &
Poor's Glossary.
For avoidance of doubt, the parties agree that this definition
shall apply to
any law regardless of whether such law is presently, or in the
future becomes,
the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix
E of Standard & Poor's Glossary.
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HUD: The Department of Housing and Urban Development, or any
federal
agency or official thereof which may from time to time succeed to
the
functions thereof with regard to Mortgage Insurance issued by the
FHA. The
term "HUD," for purposes of this Agreement, is also deemed to
include
subdivisions thereof such as the FHA and Government National
Mortgage
Association.
Index: The index indicated in the related Mortgage Note for
each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged
Property.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate
Mortgage Loan, the date, specified in the related Mortgage Note and
the
related Mortgage Loan Schedule, on which the Mortgage Interest Rate
is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the
Person named on the MERS System as the interim funder pursuant to
the MERS
Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person
named on the MERS System as the investor pursuant to the MERS
Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to
an
Adjustable Rate Mortgage Loan which provides for an absolute
maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the
term of each
Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage
Interest Rate at the time of origination of such Adjustable Rate
Mortgage Loan
by more than the amount per annum set forth on the related Mortgage
Loan
Schedule.
Liquidation Proceeds: The proceeds received in connection with
the
liquidation of a defaulted Mortgage Loan, whether through the sale
or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale
or
otherwise or the sale of the related Mortgaged Property if the
Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, other
than amounts
received following the acquisition of REO Property, Insurance
Proceeds and
Condemnation Proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, as of any
date of
determination, the ratio (expressed as a percentage) the numerator
of which is
the outstanding principal balance of the Mortgage Loan as of the
related
Cut-off Date (unless otherwise indicated), and the denominator of
which is the
lesser of (a) the Appraised Value of the Mortgaged Property at
origination and
(b) if the Mortgage Loan was made to finance the acquisition of the
related
Mortgaged Property, the purchase price of the Mortgaged
Property.
LTV: Loan-to-Value Ratio.
Manufactured Home: A single family residential unit that is
constructed
in a factory in sections in accordance with the Federal
Manufactured Home
Construction and Safety
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Standards adopted on June 15, 1976, by the Department of Housing
and Urban
Development ("HUD Code"), as amended in 2000, which preempts state
and local
building codes. Each unit is identified by the presence of a
HUD
Plate/Compliance Certificate label. The sections are then
transported to the
site and joined together and affixed to a pre-built permanent
foundation
(which satisfies the manufacturer's requirements and all state,
county, and
local building codes and regulations). The manufactured home is
built on a
non-removable, permanent frame chassis that supports the complete
unit of
walls, floors, and roof. The underneath part of the home may have
running gear
(wheels, axles, and brakes) that enable it to be transported to the
permanent
site. The wheels and hitch are removed prior to anchoring the unit
to the
permanent foundation. The manufactured home must be classified as
real estate
and taxed accordingly. The permanent foundation may be on land
owned by the
mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a
Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller
has designated or will designate MERS as, and has taken or will
take such
action as is necessary to cause MERS to be, the mortgagee of
record, as
nominee for the Seller, in accordance with MERS Procedures Manual
and (b) the
Seller has designated or will designate the Purchaser as the
Investor on the
MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended,
supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS
Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as
more
particularly described in the MERS Procedures Manual.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
payment
of principal and interest payable by a Mortgagor under the related
Mortgage
Note on each Due Date.
Moody's: Moody's Investors Service Inc., and any successor
thereto.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan,
the
mortgage, deed of trust or other instrument securing a Mortgage
Note, which
creates a first lien on the Mortgaged Property. With respect to a
Co-op Loan,
the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage
Loan
Documents and the items listed in Exhibit 2 hereto and any
additional
documents required to be added to the Mortgage File pursuant to
this
Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual
rate at which interest accrues on such Mortgage Loan from time to
time in
accordance with the provisions of the related Mortgage Note.
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Mortgage Loan: Each mortgage loan sold, assigned and transferred
pursuant
to this Agreement and identified on the applicable Mortgage Loan
Schedule,
which Mortgage Loan includes, without limitation, the Mortgage
File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds, and all
other rights,
benefits, proceeds and obligations arising from or in connection
with such
Mortgage Loan, excluding replaced or repurchased mortgage
loans.
Mortgage Loan Documents: With respect to any Mortgage Loan, the
documents
listed in Exhibit 1 hereto.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall
be
purchased by the Purchaser from the Seller from time to time on
each Closing
Date.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the
annual rate of interest payable to the Purchaser, which shall be
equal to the
related Mortgage Interest Rate minus the related Servicing Fee
Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting
forth the
following information with respect to each Mortgage Loan in the
related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying
number; (2)
the Mortgagor's name; (3) the social security number of the
Mortgagor; (4) a
code indicating whether the Mortgagor's race and/or ethnicity is
(i) native
American or Alaskan native, (ii) Asian/Pacific islander, (iii)
African
American, (iv) white, (v) Hispanic or Latino, (vi) other minority,
(vii) not
provided by the Mortgagor, (viii) not applicable (if the Mortgagor
is an
entity) and (ix) unknown or missing; (5) the street address of the
Mortgaged
Property including the city, state and zip code; (6) a code
indicating whether
the Mortgagor is self-employed; (7) a code indicating whether the
Mortgaged
Property is owner-occupied, investment property or a second home;
(8) a code
indicating the number and type of residential units constituting
the Mortgaged
Property (e.g. single family residence, two-family residence,
three-family
residence, four-family residence, multifamily residence,
condominium,
manufactured housing, mixed-use property, raw land and other
non-residential
properties, planned unit development or cooperative stock in a
cooperative
housing corporation); (9) the original months to maturity or the
remaining
months to maturity from the related Cut-off Date, in any case based
on the
original amortization schedule and, if different, the maturity
expressed in
the same manner but based on the actual amortization schedule; (10)
the
Loan-to-Value Ratio at origination; (11) the Mortgage Interest Rate
as of the
related Cut-off Date; (12) the date on which the first Monthly
Payment was due
on the Mortgage Loan and, if such date is not consistent with the
Due Date
currently in effect, the Due Date; (13) the stated maturity date;
(14) the
amount of the Monthly Payment as of the related Cut-off Date; (15)
the last
payment date on which a payment was actually applied to the
outstanding
principal balance; (16) the schedule of the payment delinquencies
in the prior
12 months; (17) the original principal amount of the Mortgage Loan;
(18) the
principal balance of the Mortgage Loan as of the close of business
on the
related Cut-off Date, after deduction of payments of principal due
and
collected on or before the related Cut-off Date; (19) whether the
Mortgage
Loan has Monthly Payments that are interest-only for a period of
time; (20)
with respect to each Mortgage Loan with a second lien behind it,
the combined
principal balance of the Mortgage Loan and the applicable second
lien loan, as
of the close of business on the related Cut-off Date, after
deduction of
payments of principal due and collected on or before the
related
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Cut-off Date; (21) a code indicating whether there is a
simultaneous second;
(22) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate
Adjustment Date; (23) with respect to Adjustable Rate Mortgage
Loans, the
Gross Margin; (24) with respect to Adjustable Rate Mortgage Loans,
the
Lifetime Rate Cap under the terms of the Mortgage Note; (25) with
respect to
Adjustable Rate Mortgage Loans, a code indicating the type of
Index, including
the methodology for rounding (e.g. rounded upward, if necessary, to
the
nearest ten thousandth (.0001)) and the applicable time frame for
determining
the Index; (26) the type of Mortgage Loan (i.e., Fixed Rate,
Adjustable Rate);
(27) a code indicating the purpose of the loan (i.e., purchase,
Rate/Term
Refinance or Cash-Out Refinance); (28) a code indicating the
documentation
style (i.e. no documents, full, alternative, reduced, no income/no
asset,
stated income, no ration, reduced or NIV); (29) asset verification
(Y/N); (30)
the loan credit classification (as described in the Underwriting
Guidelines);
(31) whether such Mortgage Loan provides for a Prepayment Penalty;
(32) the
Prepayment Penalty period of such Mortgage Loan, if applicable;
(33) a
description of the Prepayment Penalty, if applicable; (34) the
Mortgage
Interest Rate as of origination; (35) the credit risk score (FICO
score); (36)
the date of origination; (37) with respect to Adjustable Rate
Mortgage Loans,
the Mortgage Interest Rate adjustment period; (38) with respect to
Adjustable
Rate Mortgage Loans, the Mortgage Interest Rate adjustment
percentage; (39)
with respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate
floor; (40) the Mortgage Interest Rate calculation method (i.e.,
30/360,
simple interest, other); (41) with respect to Adjustable Rate
Mortgage Loans,
the Periodic Rate Cap as of the first Interest Rate Adjustment
Date; (42) with
respect to each Adjustable Rate Mortgage Loan, a code indicating
whether the
Mortgage Loan provides for negative amortization; (43) a code
indicating
whether the Mortgage Loan has negative amortization and the maximum
of such
negative amortization; (44) a code indicating whether the Mortgage
Loan is a
Balloon Mortgage Loan; (45) a code indicating whether the Mortgage
Loan by its
original terms or any modifications thereof provides for
amortization beyond
its scheduled maturity date; (46) the original Monthly Payment due;
(47) the
Appraised Value; (48) appraisal type; (49) appraisal date (50) a
code
indicating whether the Mortgage Loan is covered by a PMI Policy
and, if so,
identifying the PMI Policy provider; (51) the certificate number of
the PMI
Policy, if applicable; (52) the amount of coverage of the PMI
Policy, if
applicable; (53) in connection with a condominium unit, a code
indicating
whether the condominium project where such unit is located is
low-rise or
high-rise; (54) a code indicating whether the Mortgaged Property is
a
leasehold estate; (55) with respect to the related Mortgagor,
the
debt-to-income ratio; (56) sales price; (57) automated valuation
model (AVM);
(58) a code indicating whether the Mortgage Loan is a MERS
Designated Mortgage
Loan and the MERS Identification Number, if applicable; (59) a
field
indicating whether such Mortgage Loan is a Home Loan; and (60) the
DU or LP
number, if applicable. With respect to the Mortgage Loans in the
aggregate,
the related Mortgage Loan Schedule shall set forth the following
information,
as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the
current aggregate outstanding principal balance of the Mortgage
Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; (4)
the
weighted average maturity of the Mortgage Loans; (5) the average
principal
balance of the Mortgage Loans; (6) the applicable Cut-off Date; and
(7) the
applicable Closing Date.
Mortgage Note: The original executed note or other evidence of
the
Mortgage Loan indebtedness of a Mortgagor, including any riders or
addenda
thereto.
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Mortgaged Property: With respect to a Mortgage Loan that is not a
Co-op
Loan, the Mortgagor's real property securing repayment of a related
Mortgage
Note, consisting of an unsubordinated estate in fee simple or, with
respect to
real property located in jurisdictions in which the use of
leasehold estates
for residential properties is a widely-accepted practice, a
leasehold estate,
in a single parcel or multiple parcels of real property improved by
a
Residential Dwelling. With respect to a Co-op Loan, the stock
allocated to a
dwelling unit in the residential cooperative housing corporation
that was
pledged to secure such Co-op Loan and the related Co-op Lease.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and
the
successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note, who is an owner of
the
Mortgaged Property and the grantor or mortgagor named in the
Mortgage and such
grantor's or mortgagor's successors in title to the Mortgaged
Property.
NAIC: The National Association of Insurance Commissioners or
any
successor thereto.
OCC: Office of the Comptroller of the Currency, or any successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board,
the Vice Chairman of the Board, a President or a Vice President and
by the
Treasurer, the Secretary, or one of the Assistant Treasurers or the
Assistant
Secretaries of the Person on behalf of whom such certificate is
being
delivered.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for
the Seller or the Servicer, reasonably acceptable to the Purchaser,
provided
that any Opinion of Counsel relating to (a) the qualification of
any account
required to be maintained pursuant to this Agreement as an eligible
account,
(b) qualification of the Mortgage Loans in a REMIC or (c)
compliance with the
REMIC Provisions, must be (unless otherwise stated in such Opinion
of Counsel)
an opinion of counsel who (i) is in fact independent of the Seller
and any
servicer of the Mortgage Loans, (ii) does not have any material
direct or
indirect financial interest in the Seller or Servicer or in an
Affiliate of
either and (iii) is not connected with the Seller or Servicer as an
officer,
employee, director or person performing similar functions.
OTS: The Office of Thrift Supervision or any successor thereto.
Owner: As defined in Subsection 11.12.
P&I Advance: As defined in Subsection 11.16.
Payment Adjustment Date: As to each Adjustable Rate Mortgage Loan,
the
date on which an adjustment to the Monthly Payment on a Mortgage
Note becomes
effective.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan,
the provision of each Mortgage Note which provides for an absolute
maximum
amount by which the Mortgage Interest Rate therein may increase or
decrease on
an Interest Rate Adjustment Date
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<PAGE>
above or below the Mortgage Interest Rate previously in effect. The
Periodic
Rate Cap for each Adjustable Rate Mortgage Loan is the rate set
forth as such
on the related Mortgage Loan Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan,
the provision of each Mortgage Note which provides for an absolute
maximum
amount by which the Mortgage Interest Rate therein may decrease on
an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in
effect.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company,
trust,
unincorporated organization, government or any agency or political
subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an
insurer acceptable under the Underwriting Guidelines and qualified
to do
business in the jurisdiction where the Mortgaged Property is
located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the amount
of any
premium or penalty required to be paid by the Mortgagor if the
Mortgagor
prepays such Mortgage Loan as provided in the related Mortgage Note
or
Mortgage.
Prime Rate: The prime rate announced to be in effect from time to
time,
as published as the average rate in The Wall Street Journal
(Northeast
edition).
Principal Prepayment: Any payment or other recovery of principal on
a
Mortgage Loan which is received in advance of its scheduled Due
Date,
including any Prepayment Penalty thereon, and which is not
accompanied by an
amount of interest representing scheduled interest due on any date
or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by
the
Purchaser to the Seller in exchange for the Mortgage Loans
purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: That certain agreement setting
forth
the general terms and conditions of the purchase and sale of the
Mortgage
Loans to be purchased hereunder, between the Seller and the
Purchaser.
Purchase Price Percentage: The percentage of par (expressed as
decimal)
set forth in the related Purchase Price and Terms Agreement.
Purchaser: Morgan Stanley Mortgage Capital Inc., a New York
corporation,
and its successors in interest and assigns, or any successor to the
Purchaser
under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller,
who had
no interest, direct or indirect, in the Mortgaged Property or in
any loan made
on the security thereof,
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and whose compensation was not affected by the approval or
disapproval of the
Mortgage Loan, and such appraiser and the appraisal made by such
appraiser
both satisfied the requirements of Title XI of FIRREA and the
regulations
promulgated thereunder, all as in effect on the date the Mortgage
Loan was
originated.
Qualified Correspondent: Any Person from which the Seller
purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the
Seller and
such Person that contemplated that such Person would underwrite
mortgage loans
from time to time, for sale to the Seller, in accordance with
underwriting
guidelines designated by the Seller ("Designated Guidelines") or
guidelines
that do not vary materially from such Designated Guidelines; (ii)
such
Mortgage Loans were in fact underwritten as described in clause (i)
above and
were acquired by the Seller within 180 days after origination;
(iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans
were
originated, used by the Seller in origination of mortgage loans of
the same
type as the Mortgage Loans for the Seller's own account or (y) the
Designated
Guidelines were, at the time such Mortgage Loans were underwritten,
designated
by the Seller on a consistent basis for use by lenders in
originating mortgage
loans to be purchased by the Seller; and (iv) the Seller employed,
at the time
such Mortgage Loans were acquired by the Seller, pre-purchase or
post-purchase
quality assurance procedures (which may involve, among other
things, review of
a sample of mortgage loans purchased during a particular time
period or
through particular channels) designed to ensure that Persons from
which it
purchased mortgage loans properly applied the underwriting criteria
designated
by the Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to
be
substituted by the Seller for a Deleted Mortgage Loan which must,
on the date
of such substitution, be approved by the Purchaser and (i) have an
unpaid
principal balance, after deduction of all scheduled payments due in
the month
of substitution (or in the case of a substitution of more than one
mortgage
loan for a Deleted Mortgage Loan, an aggregate principal balance),
not in
excess of the unpaid principal balance of the Deleted Mortgage Loan
(the
amount of any shortfall will be deposited in the Custodial Account
by the
Seller in the month of substitution); (ii) have a Mortgage Interest
Rate not
less than and not more than one percent (1%) greater than the
Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining
term to
maturity not greater than and not more than one (1) year less than
that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted
Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest
Rate Cap and
Index); (v) comply as of the date of substitution with each
representation and
warranty set forth in Subsection 7.01 of this Agreement; (vi) be
current in
the payment of principal and interest; (vii) be secured by a
Mortgaged
Property of the same type and occupancy status as secured the
Deleted Mortgage
Loan; and (viii) have payment terms that do not vary in any
material respect
from those of the Deleted Mortgage Loan.
Rate/Term Refinance: A Refinanced Mortgage Loan, in which the
proceeds
received were not in excess of the amount of funds required to
repay the
principal balance of any existing first mortgage loan on the
related Mortgaged
Property, pay related closing costs and satisfy any outstanding
subordinate
mortgages on the related Mortgaged Property and did not provide
incidental
cash to the related Mortgagor of more than one percent (1%) of the
original
principal balance of such Mortgage Loan.
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Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
Reconstitution Agreement: As defined in Section 15.
Record Date: The close of business of the last Business Day of the
month
preceding the month of the related Remittance Date.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which
were not
used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to
time, and subject to such clarification and interpretation as have
been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan.
7, 2005))
or by the staff of the Commission, or as may be provided by the
Commission or
its staff from time to time.
Remittance Date: No later than 1:00 p.m. New York time on the 18th
day of
any month (or, if such 18th day is not a Business Day, the
following Business
Day).
REO Disposition: The final sale by the Servicer of an REO
Property.
REO Disposition Proceeds: All amounts received with respect to an
REO
Disposition pursuant to Subsection 11.12.
REO Property: A Mortgaged Property acquired by the Servicer
through
foreclosure or deed in lieu of foreclosure, as described in
Subsection 11.12.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to the
unpaid principal balance of the Mortgage Loan to be repurchased,
plus accrued
interest thereon at the Mortgage Interest Rate and including the
last Due Date
through which interest had last been paid through the date of such
repurchase,
plus the amount of any outstanding advances owed to any servicer if
the Seller
is not the Servicer, plus all costs and expenses incurred by the
Purchaser or
any servicer arising out of or based upon such breach, including
without
limitation costs and expenses incurred in the enforcement of the
Seller's
repurchase obligation hereunder.
Residential Dwelling: Any one of the following: (i) a detached
one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family
dwelling unit in a condominium project, or (iv) a one-family
dwelling in a
planned unit development, none of which is a co-operative, mobile
or
Manufactured Home.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale
or other transfer of some or all of the Mortgage Loans directly or
indirectly
to an issuing entity in connection with an issuance of publicly
offered or
privately placed, rated or unrated mortgage-backed securities or
(2) an
issuance of publicly offered or privately placed, rated or unrated
securities,
the payments on which are determined primarily by reference to one
or more
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<PAGE>
portfolios of residential mortgage loans consisting, in whole or in
part, of
some or all of the Mortgage Loans.
Security Agreement: The agreement creating a security interest in
the
stock allocated to a dwelling unit in the residential cooperative
housing
corporation that was pledged to secure such Co-op Loan and the
related Co-op
Lease.
Seller: As defined in the initial paragraph of this Agreement,
together
with its successors in interest.
Seller Information: As defined in Section 34.07(a).
Servicer: As defined in the initial paragraph of this Agreement,
together
with its successors and assigns as permitted under the terms of
this
Agreement, or with respect to Subsection 34.03(c), as defined
therein.
Servicing Advances: All customary, reasonable and necessary
out-of-pocket
costs and expenses incurred in the performance by the Servicer of
its
servicing obligations, including, but not limited to, the cost of
(i) the
preservation, restoration and protection of the Mortgaged Property,
(ii) any
enforcement or judicial proceedings, including foreclosures, (iii)
the
management and liquidation of the Mortgaged Property if the
Mortgaged Property
is acquired in satisfaction of the Mortgage, and (iv) payments made
by the
Servicer with respect to a Mortgaged Property pursuant to
Subsection 11.08.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of
the
annual fee the Purchaser shall pay to the Servicer, which shall,
for each
month, be equal to one-twelfth of (i) the product of the Servicing
Fee Rate
and (ii) the Stated Principal Balance of such Mortgage Loan. Such
fee shall be
payable monthly, computed on the basis of the same principal amount
and period
respecting which any related interest payment on a Mortgage Loan is
computed,
and shall be pro rated (based upon the number of days of the
related month the
Servicer so acted as Servicer relative to the number of days in
that month)
for each part thereof. The obligation of the Purchaser to pay the
Servicing
Fee is limited to, and payable solely from, the interest portion
(including
recoveries with respect to interest from Liquidation Proceeds and
other
proceeds, to the extent permitted by Subsection 11.05) of related
Monthly
Payments collected by the Servicer, or as otherwise provided under
Subsection
11.05.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum
rate set forth in the applicable Purchase Price and Terms
Agreement.
Servicing File: With respect to each Mortgage Loan, the portion of
the
Mortgage File, excluding the Mortgage Loan Documents, retained by
the Servicer
pursuant to the terms of this Agreement.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name appears on a list of servicing
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<PAGE>
officers furnished to the Purchaser by the Servicer, as such list
may be
amended from time to time.
Servicing Rights: Any and all of the following: (a) any and all
rights to
service the Mortgage Loans; (b) any payments to or monies received
by the
Seller for servicing the Mortgage Loans; (c) any late fees,
penalties or
similar payments with respect to the Mortgage Loans; (d) all
agreements or
documents creating, defining or evidencing any such servicing
rights to the
extent they relate to such servicing rights and all rights of the
Seller
thereunder; (e) Escrow Payments or other similar payments with
respect to the
Mortgage Loans and any amounts actually collected by the Seller
with respect
thereto; (f) all accounts and other rights to payment related to
any of the
property described in this paragraph; and (g) any and all
documents, files,
records, servicing files, servicing documents, servicing records,
data tapes,
computer records, or other information pertaining to the Mortgage
Loans or
pertaining to the past, present or prospective servicing of the
Mortgage
Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The
McGraw-Hill Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as
may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan as to any date
of
determination, (i) the principal balance of the Mortgage Loan at
the related
Cut-off Date after giving effect to payments of principal due on or
before
such date, whether or not received, minus (ii) all amounts
previously
distributed to the Purchaser with respect to the related Mortgage
Loan
representing payments or recoveries of principal, or advances in
lieu thereof
on such Mortgage Loan.
Static Pool Information: Static pool information as described in
Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing (as "servicing" is commonly
understood
by participants in the mortgage-backed securities market) of
Mortgage Loans
but performs one or more discrete functions identified in Item
1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or
authority
of the Servicer or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of
the
Servicer or any Subservicer and is responsible for the performance
(whether
directly or through Subservicers or Subcontractors) of a
substantial portion
of the material servicing functions required to be performed by the
Seller
under this Agreement or any Reconstitution Agreement that are
identified in
Item 1122(d) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated
by the Purchaser as being entitled to the benefits of the
indemnifications set
forth in Subsections 7.03 and 12.01.
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Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Transfer Date: In the event the Servicer is terminated as servicer
of a
Mortgage Loan pursuant to Subsections 11.01, 12.04, 13.01, 14.01(c)
or 14.02,
the date on which the Purchaser, or its designee, shall receive the
transfer
of servicing responsibilities and begin to perform the servicing of
such
Mortgage Loans, and the Seller, as Servicer, shall cease all
servicing
responsibilities.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a
copy of which is attached hereto as Exhibit 8 and a then-current
copy of which
shall be attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage
Loans, other than a Securitization Transaction.
Section 2. Purchase and Conveyance. The Seller agrees to sell from
time
to time, and the Purchaser agrees to purchase from time to time,
Mortgage
Loans having an aggregate principal balance on the related Cut-off
Date in an
amount as set forth in the related Purchase Price and Terms
Agreement, or in
such other amount as agreed by the Purchaser and the Seller as
evidenced by
the actual aggregate principal balance of the Mortgage Loans
accepted by the
Purchaser on each Closing Date, together with the related Mortgage
Files and
all rights and obligations arising under the documents contained
therein. The
Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with
respect to the related Mortgage Loan Package to be purchased on
each Closing
Date, shall execute and deliver an Assignment and Conveyance
Agreement in the
form attached hereto as Exhibit 14 (the "Assignment and
Conveyance
Agreement").
With respect to each Mortgage Loan purchased, the Purchaser shall
own and
be entitled to receive: (a) all scheduled principal due after the
related
Cut-off Date, (b) all other payments and/or recoveries of principal
collected
after the related Cut-off Date (provided, however, that all
scheduled payments
of principal due on or before the related Cut-off Date and
collected by the
Servicer after the related Cut-off Date shall belong to the
Seller), and (c)
all payments of interest on the Mortgage Loans, net of the
Servicing Fee
(minus that portion of any such interest payment that is allocable
to the
period prior to the related Cut-off Date).
For the purposes of this Agreement, payments of scheduled principal
and
interest prepaid for a Due Date beyond the related Cut-off Date
shall not be
applied to reduce the Stated Principal Balance as of the related
Cut-off Date.
Such prepaid amounts (minus the applicable Servicing Fee) shall be
the
property of the Purchaser. The Seller shall remit to the Servicer
for deposit
any such prepaid amounts into the Custodial Account, which account
is
established for the benefit of the Purchaser, for remittance by the
Servicer
to the Purchaser on the appropriate Remittance Date. All payments
of principal
and interest, less the applicable Servicing Fee, due on a Due Date
following
the related Cut-off Date shall belong to the Purchaser.
Section 3. Mortgage Loan Schedule. The Seller from time to time
shall
provide the Purchaser with certain information constituting a
preliminary
listing of the Mortgage
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Loans to be purchased on each Closing Date in accordance with the
related
Purchase Price and Terms Agreement and this Agreement (each, a
"Preliminary
Mortgage Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for
the
Mortgage Loans to be purchased on a particular Closing Date to the
Purchaser
at least five (5) Business Days prior to the related Closing Date.
The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with
those Mortgage Loans which have not been funded prior to the
related Closing
Date deleted.
Section 4. Purchase Price. The Purchase Price for each Mortgage
Loan
shall be the percentage of par as stated in the related Purchase
Price and
Terms Agreement (subject to adjustment as provided therein),
multiplied by the
aggregate principal balance, as of the related Cut-off Date, of the
Mortgage
Loans listed on the related Mortgage Loan Schedule, after
application of
scheduled payments of principal due on or before the related
Cut-off Date, but
only to the extent such payments were actually received. The
initial principal
amount of the related Mortgage Loans shall be the aggregate
principal balance
of the Mortgage Loans, so computed as of the related Cut-off Date.
If so
provided in the related Purchase Price and Terms Agreement,
portions of the
Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall
pay to the Seller, at closing, accrued interest on the current
principal
amount of the related Mortgage Loans as of the related Cut-off Date
at the
weighted average Mortgage Interest Rate of those Mortgage Loans.
The Purchase
Price plus accrued interest as set forth in the preceding paragraph
shall be
paid to the Seller by wire transfer of immediately available funds
to an
account designated by the Seller in writing.
Section 5. Examination of Mortgage Files. At least ten (10)
Business Days
prior to the related Closing Date, the Seller shall either (a)
deliver to the
Purchaser or its designee in escrow, for examination with respect
to each
Mortgage Loan to be purchased, the related Mortgage File, including
a copy of
the Assignment of Mortgage, pertaining to each Mortgage Loan, or
(b) make the
related Mortgage File available to the Purchaser for examination at
such other
location as shall otherwise be acceptable to the Purchaser. Such
examination
of the Mortgage Files may be made by the Purchaser or its designee
at any
reasonable time before or after the related Closing Date. If the
Purchaser
makes such examination prior to the related Closing Date and
determines, in
its sole discretion, that any Mortgage Loans do not conform to any
of the
requirements set forth in the related Purchase Price and Terms
Agreement, or
as an Exhibit annexed thereto, the Purchaser may delete such
Mortgage Loans
from the related Mortgage Loan Schedule, and such Deleted Mortgage
Loan (or
Loans) may be replaced by a Qualified Substitute Mortgage Loan (or
Loans)
acceptable to the Purchaser. The Purchaser may, at its option and
without
notice to the Seller, purchase some or all of the Mortgage Loans
without
conducting any partial or complete examination. The fact that the
Purchaser or
its designee has conducted or has failed to conduct any partial or
complete
examination of the Mortgage Files shall not impair in any way the
Purchaser's
(or any of its successor's) rights to demand repurchase,
substitution or other
relief as provided in this Agreement. In the event that the Seller
fails to
deliver the Mortgage File with respect to any Mortgage Loan, the
Seller shall,
upon the
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request of the Purchaser, repurchase such Mortgage Loan as the
price and in
the manner specified in Subsection 7.03.
Section 6. Delivery of Mortgage Loan Documents.
Subsection 6.01 Possession of Mortgage Files. The contents of
each
Mortgage File required to be retained by or delivered to the
Servicer to
service the Mortgage Loans pursuant to this Agreement and thus not
delivered
to the Purchaser, or its designee, are and shall be held in trust
by the
Servicer for the benefit of the Purchaser as the owner thereof. The
Servicer's
possession of any portion of each such Mortgage File is at the will
of the
Purchaser for the sole purpose of facilitating servicing of the
Mortgage Loans
pursuant to this Agreement, and such retention and possession by
the Servicer
shall be in a custodial capacity only. The ownership of each
Mortgage Note,
each Mortgage and the contents of each 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 which come into the possession
of the
Servicer shall immediately vest in the Purchaser and shall be
retained and
maintained, in trust, by the Servicer at the will of the Purchaser
in such
custodial capacity only. The Mortgage File retained by the Servicer
with
respect to each Mortgage Loan pursuant to this Agreement shall
be
appropriately identified in the Servicer's computer system and/or
books and
records to reflect clearly the sale of such related Mortgage Loan
to the
Purchaser. The Servicer shall release from its custody the contents
of any
Mortgage File retained by it only in accordance with this
Agreement, except
when such release is required in connection with a repurchase of
any such
Mortgage Loan pursuant to Subsection 7.03 or if required under
Applicable Law
or court order.
Subsection 6.02 Books and Records. Record title to each Mortgage
and the
related Mortgage Note as of the related Closing Date shall be in
the name of
the Seller; provided, however, that if a Mortgage has been recorded
in the
name of MERS or its designee, the Seller is shown as the owner of
the related
Mortgage Loan on the records of MERS for purposes of the system of
recording
transfers of beneficial ownership of mortgages maintained by
MERS.
Notwithstanding the foregoing, ownership of each Mortgage and the
related
Mortgage Note shall be vested solely in the Purchaser or the
appropriate
designee of the Purchaser, as the case may be. All rights arising
out of the
Mortgage Loans including, but not limited to, all funds received by
the
Servicer after the related Cut-off Date on or in connection with a
Mortgage
Loan as provided in Section 2 shall be vested in the Purchaser or
one or more
designees of the Purchaser; provided, however, that all such funds
received on
or in connection with a Mortgage Loan as provided in Section 2
shall be
received and held by the Servicer in trust for the benefit of the
Purchaser or
the appropriate designee of the Purchaser, as the case may be, as
the owner of
the Mortgage Loans pursuant to the terms of this Agreement.
It is the express intention of the parties that the
transactions
contemplated by this Agreement be, and be construed as, a sale of
the related
Mortgage Loans by the Seller and not a pledge of such Mortgage
Loans by the
Seller to the Purchaser to secure a debt or other obligation of the
Seller.
Consequently, the sale of each Mortgage Loan shall be reflected as
a purchase
on the Purchaser's business records, tax returns and financial
statements, and
as a sale of assets on the Seller's business records, tax returns
and
financial statements.
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Subsection 6.03 Delivery of Mortgage Loan Documents. The Seller
shall, at
least two (2) Business Days prior to the related Closing Date (or
such later
date as the Purchaser may reasonably request), deliver and release
to the
Purchaser, or its designee, the Mortgage Loan Documents with
respect to each
Mortgage Loan pursuant to a bailee letter agreement. In connection
with the
foregoing, the Seller shall indemnify the Purchaser and its present
and former
directors, officers, employees and agents and any Successor
Servicer and its
present and former directors, officers, employees and agents, and
hold such
parties harmless against any losses, damages, penalties, fines,
forfeitures,
legal fees and expenses and related costs, judgments, and other
costs and
expenses based on or grounded upon, or resulting from, the fact
that any
Mortgage Loan is not covered by an ALTA or CLTA lender's title
insurance
policy. For purposes of the previous sentence, "Purchaser" shall
mean the
Person then acting as the Purchaser under this Agreement and any
and all
Persons who previously were "Purchasers" under this Agreement and
"Successor
Servicer" shall mean any Person designated as the Successor
Servicer pursuant
to this Agreement and any and all Persons who previously were
"Successor
Servicers" pursuant to this Agreement.
To the extent received by it, the Servicer shall forward to the
Purchaser, or its designee, original documents evidencing an
assumption,
modification, consolidation or extension of any Mortgage Loan
entered into in
accordance with this Agreement within two (2) weeks after their
execution;
provided, however, that the Servicer shall provide the Purchaser,
or its
designee, with a copy, certified by the Servicer as a true copy, of
any such
document submitted for recordation within two (2) weeks after its
execution,
and shall promptly provide the original of any document submitted
for
recordation or a copy of such document certified by the appropriate
public
recording office to be a true and complete copy of the original
within two (2)
weeks following receipt of the original document by the Servicer;
provided,
however, that such original recorded document or certified copy
thereof shall
be delivered to the Purchaser no later than 180 days following the
related
Closing Date, unless there has been a delay at the applicable
recording
office.
If the original or copy of any document submitted for recordation
to the
appropriate public recording office is not delivered to the
Purchaser or its
designee within 180 days following the related Closing Date, the
related
Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the
Seller at the price and in the manner specified in Subsection 7.03.
The
foregoing repurchase obligation shall not apply if the Seller
cannot cause the
Servicer to deliver such original or copy of any document submitted
for
recordation to the appropriate public recording office within the
specified
period due to a delay caused by the recording office in the
applicable
jurisdiction; provided that (i) the Servicer shall instead deliver
a recording
receipt of such recording office or, if such recording receipt is
not
available, an officer's certificate of a servicing officer of the
Servicer,
confirming that such document has been accepted for recording, and
(ii) such
document is delivered within twelve (12) months of the related
Closing Date.
The Seller shall pay all initial recording fees, if any, for
the
Assignments of Mortgage and any other fees or costs in transferring
all
original documents to the Custodian or, upon written request of the
Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the
Purchaser's
designee shall be responsible for recording the Assignments of
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Mortgage and shall be reimbursed by the Seller for the costs
associated
therewith pursuant to the preceding sentence.
Subsection 6.04 MERS Designated Loans With respect to each MERS
Designated Mortgage Loan, the Seller shall, on or prior to the
related Closing
Date, designate the Purchaser as the Investor and the Custodian as
custodian,
and no Person shall be listed as Interim Funder on the MERS System.
In
addition, on or prior to the related Closing Date, Seller shall
provide the
Custodian and the Purchaser with a MERS Report listing the
Purchaser as the
Investor, the Custodian as custodian and no Person listed as
Interim Funder
with respect to each MERS Designated Mortgage Loan.
Section 7. Representations, Warranties and Covenants; Remedies
for
Breach.
Subsection 7.01 Representations and Warranties Regarding
Individual
Mortgage Loans. The Seller hereby represents and warrants to the
Purchaser
that, as to each Mortgage Loan, as of the related Closing Date for
such
Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related
Closing Date for the Mortgage Loan under the terms of the Mortgage
Note have
been made and credited. No payment required under the Mortgage Loan
is 30 days
or more delinquent nor has any payment under the Mortgage Loan been
30 days or
more delinquent at any time since the origination of the Mortgage
Loan;
(c) No Outstanding Charges. There are no defaults in complying with
the
terms of the Mortgage, and all taxes, governmental assessments,
insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground
rents which previously became due and owing have been paid, or an
escrow of
funds has been established in an amount sufficient to pay for every
such item
which remains unpaid and which has been assessed but is not yet due
and
payable. The Seller has not advanced funds, or induced, solicited
or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or
indirectly, for the payment of any amount required under the
Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or
date of
disbursement of the Mortgage Loan proceeds, whichever is earlier,
to the day
which precedes by one month the related Due Date of the first
installment of
principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note
and
Mortgage have not been impaired, waived, altered or modified in any
respect,
from the date of origination except by a written instrument which
has been
recorded, if necessary to protect the interests of the Purchaser,
and which
has been delivered to the Custodian or to such other Person as the
Purchaser
shall designate in writing, and the terms of which are reflected in
the
related Mortgage Loan Schedule. The substance of any such waiver,
alteration
or modification has been approved by the issuer of any related PMI
Policy and
the title insurer, if any, to the extent required by the policy,
and its terms
are reflected on the related Mortgage Loan Schedule, if applicable.
No
Mortgagor has been released, in whole or in part, except in
connection with an
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assumption agreement, approved by the issuer of any related PMI
Policy and the
title insurer, to the extent required by the policy, and which
assumption
agreement is part of the Mortgage Loan File delivered to the
Custodian or to
such other Person as the Purchaser shall designate in writing and
the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right
of
rescission, set-off, counterclaim or defense, including without
limitation the
defense of usury, nor will the operation of any of the terms of the
Mortgage
Note or the Mortgage, or the exercise of any right thereunder,
render either
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 without limitation the defense of usury, and no such
right of
rescission, set-off, counterclaim or defense has been asserted with
respect
thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage,
all
buildings or other improvements upon the Mortgaged Property are
insured by a
generally acceptable insurer against loss by fire, hazards of
extended
coverage and such other hazards as are provided for in the
Underwriting
Guidelines. If required by the National Flood Insurance Act of
1968, as
amended, each Mortgage Loan is covered by a flood insurance policy
meeting the
requirements of the current guidelines of the Federal Insurance
Administration
as in effect which policy conforms with the Underwriting
Guidelines. All
individual insurance policies contain a standard mortgagee clause
naming the
Seller and its successors and assigns as mortgagee, and all
premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain
the hazard insurance policy 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 such Mortgagor's cost and expense,
and to seek
reimbursement therefor from the Mortgagor. Where required by state
law or
regulation, the Mortgagor has been given an opportunity to choose
the carrier
of the required hazard insurance, provided the policy is not a
"master" or
"blanket" hazard insurance policy covering a condominium, or any
hazard
insurance policy covering the common facilities of a planned unit
development.
The hazard insurance policy is the valid and binding obligation of
the
insurer, is in full force and effect, and will be in full force and
effect and
inure to the benefit of the Purchaser upon the consummation of
the
transactions contemplated by this Agreement. The Seller has not
engaged in,
and has no knowledge of the Mortgagor's having engaged in, any act
or omission
which would impair the coverage of any such policy, the benefits of
the
endorsement provided for herein, or the validity and binding effect
of either
including, without limitation, no unlawful fee, commission,
kickback or other
unlawful compensation or value of any kind has been or will be
received,
retained or realized by any attorney, firm or other person or
entity, and no
such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements
of
Applicable Law, including, without limitation, usury,
truth-in-lending, real
estate settlement procedures, consumer credit protection, predatory
and
abusive lending, equal credit opportunity and disclosure laws
applicable to
the Mortgage Loan, including, without limitation, any provisions
relating to a
Prepayment Penalty, have been complied with, the consummation of
the
transactions contemplated hereby will not involve the violation of
any such
laws or regulations, and the Seller 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;
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<PAGE>
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied,
canceled, 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 release,
cancellation, subordination or rescission. The Seller has not
waived the
performance by the Mortgagor of any action, if the Mortgagor's
failure to
perform such action would cause the Mortgage Loan to be in default,
nor has
the Seller waived any default resulting from any action or inaction
by the
Mortgagor;
(i) Type of Mortgaged Property. With respect to a Mortgage Loan
that is
not a Co-op Loan and is not secured by an interest in a leasehold
estate, the
Mortgaged Property is a fee simple estate that consists of a single
parcel of
real property with a detached single family residence erected
thereon, or a
two- to four-family dwelling, or an individual residential
condominium unit in
a condominium project, or an individual unit in a planned unit
development
(or, with respect to each Co-op Loan an individual unit in a
residential
cooperative housing corporation); provided, however, that any
condominium
unit, planned unit development or residential cooperative housing
corporation
shall conform with the Underwriting Guidelines. No portion of the
Mortgaged
Property (or underlying Mortgaged Property, in the case of a Co-op
Loan) is
used for commercial purposes, and since the date of origination, no
portion of
the Mortgaged Property has been used for commercial purposes;
provided, that
Mortgaged Properties which contain a home office shall not be
considered as
being used for commercial purposes as long as the Mortgaged
Property has not
been altered for commercial purposes and is not storing any
chemicals or raw
materials other than those commonly used for homeowner repair,
maintenance
and/or household purposes. None of the Mortgaged Properties are
Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique
property types;
(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable
and perfected, first lien 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:
(i) the lien of current real property taxes and assessments not
yet
due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date
of
recording acceptable to prudent mortgage lending institutions
generally
and specifically referred to in the lender's title insurance
policy
delivered to the originator of the Mortgage Loan and (a)
specifically
referred to or otherwise considered in the appraisal made for
the
originator of the Mortgage Loan or (b) which do not adversely
affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal;
and
(iii) 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.
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<PAGE>
Any security agreement, chattel mortgage or equivalent document
related
to and delivered in connection with the Mortgage Loan establishes
and creates
a valid, subsisting, enforceable and perfected first lien and first
priority
security interest on the property described therein and the Seller
has full
right to sell and assign the same to the Purchaser.
With respect to any Co-op Loan, the related Mortgage is a
valid,
subsisting and enforceable first priority security interest on the
related
cooperative shares securing the Mortgage Note, subject only to (a)
liens of
the related residential cooperative housing corporation for unpaid
assessments
representing the Mortgagor's pro rata share of the related
residential
cooperative housing corporation's payments for its blanket
mortgage, current
and future real property taxes, insurance premiums, maintenance
fees and other
assessments to which like collateral is commonly subject and (b)
other matters
to which like collateral is commonly subject which do not
materially interfere
with the benefits of the security interest intended to be provided
by the
related Security Agreement;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage
and any other agreement executed and delivered by a Mortgagor in
connection
with a Mortgage Loan are genuine, and each is the legal, valid and
binding
obligation of the maker thereof enforceable in accordance with its
terms
(including, without limitation, any provisions therein relating to
Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any
other such
related agreement had legal capacity to enter into the Mortgage
Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such
agreement,
and the Mortgage Note, the Mortgage and any other such related
agreement have
been duly and properly executed by other such related parties. No
fraud,
error, omission, misrepresentation, negligence or similar
occurrence with
respect to a Mortgage Loan has taken place on the part of the
Seller in
connection with the origination of the Mortgage Loan or in the
application of
any insurance in relation to such Mortgage Loan. 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. No fraud, error, omission,
misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan
has taken
place on the part of any Person, including without limitation, the
Mortgagor,
any appraiser or any other party involved in the origination of the
Mortgage
Loan, or to the best of Seller's knowledge, on the part of any
builder or
developer or any other Person involved in the application for any
insurance in
relation to such Mortgage Loan. In making the representations set
forth in
this clause (k), the Seller has reviewed all of the documents
constituting the
Servicing File and has made such inquiries as it deems necessary to
make and
confirm the accuracy of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and
the proceeds of the Mortgage Loan have been fully disbursed and
there is no
requirement for future advances 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 were paid, and the Mortgagor is not entitled to any
refund of any
amounts paid or due under the Mortgage Note or Mortgage;
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<PAGE>
(m) Ownership. The Seller is the sole owner of record and holder of
the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note
and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will
retain the
Mortgage Files or any part thereof with respect thereto not
delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only
for the
purpose of servicing and supervising the servicing of each Mortgage
Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has
good,
indefeasible and marketable title thereto, and has full right to
transfer and
sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance,
equity, participation interest, lien, pledge, charge, claim or
security
interest, and has full right and authority subject to no interest
or
participation of, or agreement with, any other party, to sell and
assign each
Mortgage Loan pursuant to this Agreement and following the sale of
each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and
clear of any
encumbrance, equity, participation interest, lien, pledge, charge,
claim or
security interest. The Seller intends to relinquish all rights to
possess,
control and monitor the Mortgage Loan, except as may be required of
the Seller
in its capacity as Servicer of such Mortgage Loan. After the
related Closing
Date, the Seller will have no right to modify or alter the terms of
the sale
of the Mortgage Loan and the Seller will have no obligation or
right to
repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as
provided in this Agreement;
(n) Doing Business. All parties which have had any interest in
the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or,
during the period in which they held and disposed of such interest,
were) (1)
in compliance with any and all applicable licensing requirements of
the laws
of the state wherein the Mortgaged Property is located, and (2)
either (i)
organized under the laws of such state, or (ii) qualified to do
business in
such state, or (iii) a federal savings and loan association, a
savings bank or
a national bank having a principal office in such state, or (3) not
doing
business in such state;
(o) LTV, PMI Policy. No Mortgage Loan has an LTV greater than 100%.
Any
Mortgage Loan that had at the time of origination an LTV in excess
of 80% is
insured as to payment defaults by a PMI Policy. Any PMI Policy in
effect
covers the related Mortgage Loan for the life of such Mortgage
Loan. All
provisions of such PMI Policy have been and are being complied
with, such
policy is in full force and effect, and all premiums due thereunder
have been
paid. No action, inaction, or event has occurred and no state of
facts exists
that has, or will result in the exclusion from, denial of, or
defense to
coverage. Any Mortgage Loan subject to a PMI Policy obligates the
Mortgagor
thereunder to maintain the PMI Policy and to pay all premiums and
charges in
connection therewith. The Mortgage Interest Rate for the Mortgage
Loan as set
forth on the related Mortgage Loan Schedule is net of any such
insurance
premium;
(p) Title Insurance. With respect to a Mortgage Loan which is not a
Co-op
Loan, the Mortgage Loan is covered by an ALTA lender's title
insurance policy
or other generally acceptable form of policy or insurance
acceptable under the
Underwriting Guidelines and each such title insurance policy is
issued by a
title insurer acceptable under the Underwriting Guidelines and
qualified to do
business in the jurisdiction where the Mortgaged Property is
located, insuring
the Seller, its successors and assigns, as to the first priority
lien of the
Mortgage in the original principal amount of the Mortgage Loan (or
to the
extent a Mortgage Note provides for negative amortization, the
maximum amount
of negative amortization in accordance with the Mortgage), subject
only to the
exceptions contained in clauses (i) and (ii) of clause (j) of this
Subsection
7.02, and in the case of Adjustable Rate Mortgage Loans, against
any loss by
reason
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of the invalidity or unenforceability of the lien resulting from
the
provisions of the Mortgage providing for adjustment to the Mortgage
Interest
Rate and Monthly Payment. Where required by state law or
regulation, the
Mortgagor has been given the opportunity to choose the carrier of
the required
mortgage title insurance. Additionally, such lender's title
insurance policy
affirmatively insures ingress and egress, and against encroachments
by or upon
the Mortgaged Property or any interest therein. The Seller, its
successor and
assigns, are the sole insureds 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 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 Seller, 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 Seller;
(q) No Defaults. Other than payments due but not yet 30 days or
more
delinquent, there is no default, breach, violation or event which
would permit
acceleration existing under the Mortgage or the Mortgage Note and
no event
which, with the passage of time or with notice and the expiration
of any grace
or cure period, would constitute a default, breach, violation or
event which
would permit acceleration, and neither the Seller nor any of its
affiliates
nor any of their respective predecessors, have waived any default,
breach,
violation or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens
or
claims which have been filed for work, labor or material (and no
rights are
outstanding that under law could give rise to such liens) affecting
the
related Mortgaged Property which are or may be liens prior to, or
equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which
were considered in determining the Appraised Value of the Mortgaged
Property
lay wholly within the boundaries and building restriction lines of
the
Mortgaged Property, and no improvements on adjoining properties
encroach upon
the Mortgaged Property. No improvement located on or being part of
the
Mortgaged Property is in violation of any applicable zoning law or
regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a
mortgagee approved by the Secretary of Housing and Urban
Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and
loan
association, a savings bank, a commercial bank, credit union,
insurance
company or other similar institution which is supervised and
examined by a
federal or state authority. Principal payments on the Mortgage Loan
commenced
no more than seventy days after funds were disbursed in connection
with the
Mortgage Loan. The Mortgage Interest Rate as well as, in the case
of an
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the
Periodic Rate Cap
and the Periodic Rate Floor are as set forth on the related
Mortgage Loan
Schedule. The Mortgage Interest Rate is adjusted, with respect to
Adjustable
Rate Mortgage Loans, on each Interest Rate Adjustment Date to equal
the Index
plus the Gross Margin (rounded up or down to the nearest 0.125%),
subject to
the Periodic
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Rate Cap. The Mortgage Note is payable in equal monthly
installments of
principal and interest, which installments of interest, with
respect to
Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments
to the Mortgage Interest Rate on each Interest Rate Adjustment
Date, with
interest calculated and payable in arrears, sufficient to amortize
the
Mortgage Loan fully by the stated maturity date, over an original
term of not
more than thirty (30) years from commencement of amortization.
Unless
otherwise specified on the related Mortgage Loan Schedule, the
Mortgage Loan
is payable on the first day of each month. The Mortgage Loan does
not require
a balloon payment on its stated maturity date; and by its original
terms or
any modification thereof, does not provide for amortization beyond
its
scheduled maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable
provisions such as to render the rights and remedies of the holder
thereof
adequate for the realization against the Mortgaged Property of the
benefits of
the security provided thereby, including, (i) in the case of a
Mortgage
designated as a deed of trust, by trustee's sale, and (ii)
otherwise by
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. There is no
homestead
or other exemption available to a Mortgagor which would 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 right of
redemption or
similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage
Loan was underwritten in accordance with the Underwriting
Guidelines (a copy
of which is attached to the related Assignment and Conveyance as
Exhibit C).
The Mortgage Note and Mortgage are on forms acceptable to Freddie
Mac or
Fannie Mae and no representations have been made to a Mortgagor
that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. The Mortgaged Property
is
lawfully occupied under applicable law. All inspections, licenses
and
certificates required to be made or issued with respect to all
occupied
portions of the Mortgaged Property and, with respect to the use and
occupancy
of the same, including but not limited to certificates of occupancy
and fire
underwriting certificates, have been made or obtained from the
appropriate
authorities. Unless otherwise specified on the related Mortgage
Loan Schedule,
the Mortgagor represented at the time of origination of the
Mortgage Loan that
the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary
residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been
secured by any collateral except the lien of the corresponding
Mortgage and
the security interest of any applicable security agreement or
chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed
of
trust, a trustee, authorized and 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;
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(z) Acceptable Investment. The Seller has no knowledge of any
circumstances or conditions with respect to the related Mortgage,
the
Mortgaged Property, the Mortgagor, the Mortgage File or the
related
Mortgagor's credit standing that can reasonably be expected to
cause private
institutional investors that invest in prime mortgage loans similar
to the
Mortgage Loan to regard the Mortgage Loan as an unacceptable
investment. No
Mortgaged Property is located in a state, city, county or other
local
jurisdiction which the Purchaser has determined in its sole good
faith
discretion would cause the related Mortgage Loan to be ineligible
for whole
loan sale or securitization in a transaction consistent with the
prevailing
sale and securitization industry (including, without limitation,
the practice
of the rating agencies) with respect to substantially similar
mortgage loans;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the
Assignment of Mortgage and any other documents required to be
delivered under
this Agreement for each Mortgage Loan have been delivered to the
Custodian.
The Seller is in possession of a complete, true and accurate
Mortgage File in
compliance with Exhibit 2 attached hereto, except for such
documents the
originals of which have been delivered to the Custodian;
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with
respect to any Mortgage that has been recorded in the name of MERS
or its
designee) with respect to each Mortgage Loan is in recordable form
and is
acceptable for recording under the laws of the jurisdiction in
which the
Mortgaged Property is located;
(cc) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan,
the
Mortgage contains an enforceable provision for the acceleration of
the payment
of the unpaid principal balance of the Mortgage Loan in the event
that the
Mortgaged Property is sold or transferred without the prior written
consent of
the Mortgagee thereunder, and to the best of the Seller's
knowledge, such
provision is enforceable;
(dd) Assumability. With respect to each Adjustable Rate Mortgage
Loan,
the Mortgage Loan Documents provide that after the related first
Interest Rate
Adjustment Date, a related Mortgage Loan may only be assumed if the
party
assuming such Mortgage Loan meets certain credit requirements
stated in the
Mortgage Loan Documents;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant
to which
Monthly Payments are paid or partially paid with funds deposited in
any
separate account established by the Seller, the Mortgagor, or
anyone on behalf
of the Mortgagor, or paid by any source other than the Mortgagor
nor does it
contain 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;
(ff) Consolidation of Future Advances. Any future advances made to
the
Mortgagor prior to the applicable Cut-off Date have been
consolidated with the
outstanding principal amount secured by the Mortgage, and the
secured
principal amount, as consolidated, bears a single interest rate and
single
repayment term. The lien of the Mortgage securing the consolidated
principal
amount is expressly insured as having first lien priority by a
title insurance
policy, an endorsement to the policy insuring the Mortgagee's
consolidated
interest or by other
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title evidence acceptable to Fannie Mae and Freddie Mac. The
consolidated
principal amount does not exceed the original principal amount of
the Mortgage
Loan;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is
no proceeding pending or, to the Seller's knowledge, threatened for
the total
or partial condemnation of the Mortgaged Property. The Mortgaged
Property is
undamaged by waste, fire, earthquake or earth movement, windstorm,
flood,
tornado or other casualty so as to materially and adversely affect
the value
of the Mortgaged Property as security for the Mortgage Loan or the
use for
which the premises were intended and each Mortgaged Property is in
good
repair. There have not been any condemnation proceedings with
respect to the
Mortgaged Property and the Seller has no knowledge of any such
proceedings in
the future;
(hh) Collection Practices; Escrow Deposits; Interest Rate
Adjustments.
The origination, servicing and collection practices used by the
Seller with
respect to the Mortgage Loan have been in all respects in
compliance with
Accepted Servicing Practices and Applicable Laws, and have been in
all
respects legal and proper. With respect to escrow deposits and
Escrow
Payments, all such payments are in the possession of, or under the
control of,
the Seller and there exist no deficiencies in connection therewith
for which
customary arrangements for repayment thereof have not been made.
All Escrow
Payments have been collected in full compliance with state and
federal law and
the provisions of the related Mortgage Note and Mortgage. An escrow
of funds
is not prohibited by applicable law and has been established in an
amount
sufficient to pay for every item that remains unpaid and has been
assessed but
is not yet due and payable. No escrow deposits or Escrow Payments
or other
charges or payments due the Seller have been capitalized under the
Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been
made in
strict compliance with state and federal law and the terms of the
related
Mortgage and Mortgage Note on the related Interest Rate Adjustment
Date. If,
pursuant to the terms of the Mortgage Note, another index was
selected for
determining the Mortgage Interest 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
Seller executed and delivered any and all notices required under
Applicable
Law and the terms of the related Mortgage Note and Mortgage
regarding the
Mortgage Interest 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;
(ii) Conversion to Fixed Interest Rate. The Mortgage Loan does
not
contain a provision whereby the Mortgagor is permitted to convert
the Mortgage
Interest Rate from an adjustable rate to a fixed rate;
(jj) Other Insurance Policies; No Defense to Coverage. No
action,
inaction or event has occurred and no state of facts exists or has
existed on
or prior to the Closing Date that has resulted or will result in
the exclusion
from, denial of, or defense to coverage under any applicable hazard
insurance
policy, PMI Policy or bankruptcy bond (including, without
limitation, any
exclusions, denials or defenses which would limit or reduce the
availability
of the timely payment of the full amount of the loss otherwise due
thereunder
to the insured), irrespective of the cause of such failure of
coverage. The
Seller has caused or will cause to be performed any and all acts
required to
preserve the rights and remedies of the Purchaser in any insurance
policies
applicable to the Mortgage Loans including, without limitation, any
necessary
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notifications of insurers, assignments of policies or interests
therein, and
establishments of coinsured, joint loss payee and mortgagee rights
in favor of
the Purchaser. In connection with the placement of any such
insurance, no
commission, fee, or other compensation has been or will be received
by the
Seller or by any officer, director, or employee of the Seller or
any designee
of the Seller or any corporation in which the Seller or any
officer, director,
or employee had a financial interest at the time of placement of
such
insurance;
(kk) No Violation of Environmental Laws. To the best of the
Seller's
knowledge, there is no pending action or proceeding directly
involving the
Mortgaged Property in which compliance with any environmental law,
rule or
regulation is an issue; there is no violation of any environmental
law, rule
or regulation with respect to the Mortgage Property; and nothing
further
remains to be done to satisfy in full all requirements of each such
law, rule
or regulation constituting a prerequisite to use and enjoyment of
said
property;
(ll) Servicemembers Civil Relief Act. The Mortgagor has not
notified the
Seller, and the Seller has no knowledge of any relief requested or
allowed to
the Mortgagor under the Servicemembers Civil Relief Act or other
similar state
statute;
(mm) Appraisal. The Mortgage File contains an appraisal of the
related
Mortgaged Property signed prior to the approval of the Mortgage
Loan
application by a Qualified Appraiser, duly appointed by the Seller,
who had no
interest, direct or indirect in the Mortgaged Property or in any
loan made on
the security thereof, and whose compensation is not affected by the
approval
or disapproval of the Mortgage Loan, and the appraisal and
appraiser both
satisfy the requirements of Fannie Mae or Freddie Mac and Title XI
of FIRREA
and the regulations promulgated thereunder, all as in effect on the
date the
Mortgage Loan was originated;
(nn) Disclosure Materials. The Mortgagor has executed a statement
to the
effect that the Mortgagor has received all disclosure materials
required by,
and the Seller has complied with, all Applicable Law with respect
to the
making of the Mortgage Loans. The Seller shall maintain such
statement in the
Mortgage File;
(oo) Construction or Rehabilitation of Mortgaged Property. No
Mortgage
Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property
or
facilitating the trade-in or exchange of a Mortgaged Property;
(pp) Escrow Analysis. If applicable, with respect to each Mortgage
Loan,
the Seller has within the last twelve months (unless such Mortgage
was
originated within such twelve month period) analyzed the required
Escrow
Payments for each Mortgage and adjusted the amount of such payments
so that,
assuming all required payments are timely made, any deficiency will
be
eliminated on or before the first anniversary of such analysis, or
any overage
will be refunded to the Mortgagor, in accordance with RESPA and any
other
Applicable Law;
(qq) Credit Information. As to each consumer report (as defined in
the
Fair Credit Reporting Act, Public Law 91-508) or other credit
information
furnished by the Seller to the Purchaser, that Seller has full
right and
authority and is not precluded by law or contract from
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furnishing such information to the Purchaser and the Purchaser is
not
precluded from furnishing the same to any subsequent or prospective
purchaser
of such Mortgage. The Seller has and shall in its capacity as
servicer, for
each Mortgage Loan, fully furnished, in accordance with the Fair
Credit
Reporting Act and its implementing regulations, accurate and
complete
information (e.g., favorable and unfavorable) on its borrower
credit files to
Equifax, Experian and Trans Union Credit Information Company (three
of the
credit repositories), on a monthly basis;
(rr) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate,
(1) the ground lease is assignable or transferable; (2) the ground
lease will
not terminate earlier than five years after the maturity date of
the Mortgage
Loan; (3) the ground lease does not provide for termination of the
lease in
the event of lessee's default without the Mortgagee being entitled
to receive
written notice of, and a reasonable opportunity to cure the
default; (4) the
ground lease permits the mortgaging of the related Mortgaged
Property; (5) the
ground lease protects the Mortgagee's interests in the event of a
property
condemnation; (6) all ground lease rents, other payments, or
assessments that
have become due have been paid; and (7) the use of leasehold
estates for
residential properties is a widely accepted practice in the
jurisdiction in
which the Mortgaged Property is located;
(ss) Prepayment Penalty. Each Mortgage Loan that is subject to
a
Prepayment Penalty as provided in the related Mortgage Note is
identified on
the related Mortgage Loan Schedule. With respect to Mortgage Loans
originated
prior to October 1, 2002, no such Prepayment Penalty may be imposed
for a term
in excess of five (5) years following origination. With respect to
Mortgage
Loans originated on or after October 1, 2002, no such Prepayment
Penalty may
be imposed for a term in excess of three (3) years following
origination;
(tt) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan
or Covered Loan, as applicable. No Mortgage Loan is covered by the
Home
Ownership and Equity Protection Act of 1994 and no Mortgage Loan is
in
violation of any comparable state or local law. The Mortgaged
Property is not
located in a jurisdiction where a breach of this representation
with respect
to the related Mortgage Loan may result in additional assignee
liability to
the Purchaser, as determined by Purchaser in its reasonable
discretion;
(uu) Single-premium credit life insurance policy. No Mortgagor
was
required to purchase any single premium credit insurance policy
(e.g., life,
disability, property, accident, unemployment or health insurance
product) or
debt cancellation agreement as a condition of obtaining the
extension of
credit. No Mortgagor obtained a prepaid single-premium credit
insurance policy
(e.g., life, disability, property, accident, unemployment, mortgage
or health
insurance) in connection with the origination of the Mortgage Loan.
No
proceeds from any Mortgage Loan were used to purchase single
premium credit
insurance policies as part of the origination of, or as a condition
to
closing, such Mortgage Loan;
(vv) Qualified Mortgage. The Mortgage Loan is a qualified mortgage
under
Section 860G(a)(3) of the Code;
(ww) Tax Service Contract. Each Mortgage Loan is covered by a paid
in
full, life of loan, tax service contract issued by First American
Real Estate
Tax Service, and such contract is transferable;
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<PAGE>
(xx) Origination. No predatory or deceptive lending practices,
including,
without limitation, the extension of credit without regard to the
ability of
the Mortgagor to repay and the extension of credit which has no
apparent
benefit to the Mortgagor, were employed in the origination of the
Mortgage
Loan;
(yy) Recordation. Each original Mortgage was recorded and all
subsequent
assignments of the original Mortgage (other than the assignment to
the
Purchaser) have been recorded in the appropriate jurisdictions
wherein such
recordation is necessary to perfect the lien thereof as against
creditors of
the Seller, or is in the process of being recorded;
(zz) Co-op Loans. With respect to a Mortgage Loan that is a Co-op
Loan,
the stock that is pledged as security for the Mortgage Loan is held
by a
person as a tenant-stockholder (as defined in Section 216 of the
Code) in a
cooperative housing corporation (as defined in Section 216 of the
Code);
(aaa) Mortgagor Bankruptcy. On or prior to the date 60 days after
the
related Closing Date, the Mortgagor has not filed and will not file
a
bankruptcy petition or has not become the subject and will not
become the
subject of involuntary bankruptcy proceedings or has not consented
to or will
not consent to the filing of a bankruptcy proceeding against it or
to a
receiver being appointed in respect of the related Mortgaged
Property;
(bbb) No Prior Offer. If the Mortgage Loan has previously been
offered
for sale, such Mortgage Loan was not rejected from being purchased
by such
offeree as a result of the offeree's due diligence, unless such
deficiency has
since been cured;
(ccc) Georgia Fair Lending Act. There is no Mortgage Loan that
was
originated (or modified) on or after October 1, 2002 and before
March 7, 2003
which is secured by property located in the State of Georgia. There
is no
Mortgage Loan that was originated on or after March 7, 2003 that is
a "high
cost home loan" as defined under the Georgia Fair Lending Act;
(ddd) No Arbitration. No Mortgagor with respect to any Mortgage
Loan
originated on or after August 1, 2004 agreed to submit to
arbitration to
resolve any dispute arising out of or relating in any way to the
mortgage loan
transaction; and
(eee) Flood Service Contract. Each Mortgage Loan is covered by a
paid in
full, life of loan, flood service contract issued by First American
Real
Estate Tax Service or Fidelity, and such contract is
transferable.
Subsection 7.02 Seller Representations. The Seller hereby
represents and
warrants to the Purchaser that, as of the related Closing Date:
(a) Due Organization and Authority. The Seller is a national
banking
association, validly existing, and in good standing under the laws
of its
jurisdiction of incorporation or formation and has all licenses
necessary to
carry on its business as now being conducted and is licensed,
qualified and in
good standing in the states where the Mortgaged Property is located
if the
laws of such state require licensing or qualification in order to
conduct
business of the type conducted by the Seller. The Seller has
corporate power
and authority to execute and deliver this Agreement and to perform
its
obligations hereunder; the execution,
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delivery and performance of this Agreement (including all
instruments of
transfer to be delivered pursuant to this Agreement) by the Seller
and the
consummation of the transactions contemplated hereby have been duly
and
validly authorized; this Agreement has been duly executed and
delivered and
constitutes the valid, legal, binding and enforceable obligation of
the
Seller, except as enforceability may be limited by (i) bankruptcy,
insolvency,
liquidation, receivership, moratorium, reorganization or other
similar laws
affecting the enforcement of the rights of creditors and (ii)
general
principles of equity, whether enforcement is sought in a proceeding
in equity
or at law. All requisite corporate action has been taken by the
Seller to make
this Agreement valid and binding upon the Seller in accordance with
its terms;
(b) No Consent Required. No consent, approval, authorization or
order is
required for the transactions contemplated by this Agreement from
any court,
governmental agency or body, or federal or state regulatory
authority having
jurisdiction over the Seller is required or, if required, such
consent,
approval, authorization or order has been or will, prior to the
related
Closing Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions
contemplated by this Agreement are in the ordinary course of
business of the
Seller, and the transfer, assignment and conveyance of the Mortgage
Notes and
the Mortgages by the Seller pursuant to this Agreement are not
subject to the
bulk transfer or any similar statutory provisions in effect in any
applicable
jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement,
the acquisition or origination of the Mortgage Loans by the Seller,
the sale
of the Mortgage Loans to the Purchaser, the consummation of the
transactions
contemplated hereby, nor the fulfillment of or compliance with the
terms and
conditions of this Agreement, will conflict with or result in a
breach of any
of the terms, conditions or provisions of the Seller's charter or
by-laws or
any legal restriction or any agreement or instrument to which the
Seller is
now a party or by which it is bound, or constitute a default or
result in an
acceleration under any of the foregoing, or result in the violation
of any
law, rule, regulation, order, judgment or decree to which the
Seller or its
property is subject, or result in the creation or imposition of any
lien,
charge or encumbrance that would have an adverse effect upon any of
its
properties pursuant to the terms of any mortgage, contract, deed of
trust or
other instrument, or impair the ability of the Purchaser to realize
on the
Mortgage Loans, impair the value of the Mortgage Loans, or impair
the ability
of the Purchaser to realize the full amount of any insurance
benefits accruing
pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding
or
investigation pending or threatened against the Seller, before any
court,
administrative agency or other tribunal asserting the invalidity of
this
Agreement, seeking to prevent the consummation of any of the
transactions
contemplated by this Agreement or which, either in any one instance
or in the
aggregate, may result in any material adverse change in the
business,
operations, financial condition, properties or assets of the
Seller, or in any
material impairment of the right or ability of the Seller to carry
on its
business substantially as now conducted, or in any material
liability on the
part of the Seller, or which would draw into question the validity
of this
Agreement or the Mortgage Loans or of any action taken or to be
taken in
connection with the obligations of the Seller contemplated herein,
or which
would be likely to impair materially the ability of the Seller to
perform
under the terms of this Agreement;
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(f) Ability to Perform; Solvency. The Seller does not believe, nor
does
it have any reason or cause to believe, that it cannot perform each
and every
covenant contained in this Agreement. The Seller is solvent and the
sale of
the Mortgage Loans will not cause the Seller to become insolvent.
The sale of
the Mortgage Loans is not undertaken with the intent to hinder,
delay or
defraud any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate any
mortgage
loan or to deny any mortgage loan application is an independent
decision based
upon the Underwriting Guidelines, and is in no way made as a result
of
Purchaser's decision to purchase, or not to purchase, or the price
Purchaser
may offer to pay for, any such mortgage loan, if originated;
(h) Anti-Money Laundering Laws. The Seller has complied with
all
applicable anti-money laundering laws and regulations, including
without
limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money
Laundering Laws"); the Seller has established an anti-money
laundering
compliance program as required by the Anti-Money Laundering Laws,
has
conducted the requisite due diligence in connection with the
origination of
each Mortgage Loan for purposes of the Anti-Money Laundering Laws,
including
with respect to the legitimacy of the applicable Mortgagor and the
origin of
the assets used by the said Mortgagor to purchase the property in
question,
and maintains, and will maintain, sufficient information to
identify the
applicable Mortgagor for purposes of the Anti-Money Laundering
Laws;
(i) Financial Statements; Other Information. The Seller has
delivered to
the Purchaser financial statements as to its last three complete
fiscal years
and any later quarter ended more than 60 days prior to the
execution of this
Agreement. All such financial statements fairly present the
pertinent results
of operations and changes in financial position for each of such
periods and
the financial position at the end of each such period of the Seller
and its
subsidiaries and have been prepared in accordance with generally
accepted
accounting principles consistently applied throughout the periods
involved,
except as set forth in the notes thereto. In addition, the Seller
has
delivered information as to its loan gain and loss experience in
respect of
foreclosures and its loan delinquency experience for the
immediately preceding
three year period, in each case with respect to mortgage loans
owned by it and
such mortgage loans serviced for others during such period, and all
such
information so delivered shall be true and correct in all material
respects.
There has been no change in the business, operations, financial
condition,
properties or assets of the Seller since the date of the Seller's
financial
Statements that would have a material adverse effect on its ability
to perform
its obligations under this Agreement. The Seller has completed any
forms and
provided any other information reasonably requested by the
Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Ability to Service. Seller has the facilities, procedures,
and
experienced personnel necessary for the sound servicing of mortgage
loans of
the same type as the Mortgage Loans. The Seller is duly qualified,
licensed,
registered and otherwise authorized under all applicable federal,
state and
local laws, and regulations, if applicable, meets the minimum
capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if
applicable,
and is in good standing to enforce, originate, sell mortgage loans
to, and
service mortgage loans in the jurisdiction wherein the Mortgaged
Properties
are located. No event has occurred, including but not limited to, a
change in
insurance coverage, which would make the Seller unable to
comply
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with Fannie Mae or Freddie Mac eligibility requirements or which
would require
notification to Fannie Mae/Freddie Mac. The Seller is a member of
MERS in good
standing, and will comply in all material respects with the rules
and
procedures of MERS in connection with the servicing of the MERS
Mortgage Loans
for as long as such Mortgage Loans are registered with MERS;
(k) Reasonable Servicing Fee. The Seller acknowledges and agrees
that the
Servicing Fee represents reasonable compensation for performing
such services
and that the entire Servicing Fee shall be treated by the Seller,
for
accounting and tax purposes, as compensation for the servicing
and
administration of the Mortgage Loans pursuant to this
Agreement;
(l) Selection Process. The Mortgage Loans were selected from among
the
outstanding one- to four-family mortgage loans in the Seller's
portfolio at
the related Closing Date as to which the representations and
warranties set
forth in Subsection 7.01 could be made and such selection was not
made in a
manner so as to affect adversely the interests of the
Purchaser;
(m) Delivery to the Custodian. The Mortgage Note, the Mortgage,
the
Assignment of Mortgage and any other documents required to be
delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement,
shall be
delivered to the Custodian all in compliance with the specific
requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the
Seller will
be in possession of a complete Mortgage File in compliance with
Exhibit 2
hereto, except for such documents as will be delivered to the
Custodian;
(n) Mortgage Loan Characteristics. The characteristics of the
related
Mortgage Loan Package are as set forth on the description of the
pool
characteristics for the applicable Mortgage Loan Package delivered
pursuant to
Section 9 on the related Closing Date in the form attached as
Exhibit B to
each related Assignment and Conveyance Agreement;
(o) No Untrue Information. Neither this Agreement nor any
information,
statement, tape, diskette, report, form, or other document
furnished or to be
furnished pursuant to this Agreement or any Reconstitution
Agreement or in
connection with the transactions contemplated hereby (including
any
Securitization Transaction or Whole Loan Transfer) contains or will
contain
any untrue statement of fact or omits or will omit to state a fact
necessary
to make the statements contained herein or therein not
misleading;
(p) No Brokers. The Seller has not dealt with any broker,
investment
banker, agent or other person that may be entitled to any
commission or
compensation in connection with the sale of the Mortgage Loans for
which any
Person other than Seller will be liable;
(q) Sale Treatment. The Seller expects to be advised by its
independent
certified public accountants that under generally accepted
accounting
principles the transfer of the Mortgage Loans will be treated as a
sale on the
books and records of the Seller and the Seller has determined that
the
disposition of the Mortgage Loans pursuant to this Agreement will
be afforded
sale treatment for tax and accounting purposes;
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(r) Reasonable Purchase Price. The consideration received by the
Seller
upon the sale of the Mortgage Loans under this Agreement
constitutes fair
consideration and reasonably equivalent value for the Mortgage
Loans; and
(s) Insured Depository Institution Representations. Seller is an
"insured
depository institution" as that term is defined in Section
1813(c)(2) of Title
12 of the United States Code, as amended, and accordingly, Seller
makes the
following additional representations and warranties:
(i) This Agreement between Purchaser and Seller conforms to all
applicable statutory and regulatory requirements; and
(ii) This Agreement is (1) executed contemporaneously with the
agreement reached by Purchaser and Seller, (2) approved by a
specific corporate or banking association resolution by the
Seller's board of directors, which approval shall be reflected
in the minutes of said board, and (3) an official record of the
Seller. A copy of such resolution, certified by a vice
president or higher officer of Seller has been provided to
Purchaser.
Subsection 7.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth
in Subsections 7.01 and 7.02 shall survive the sale of the Mortgage
Loans to
the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or
Assignment of
Mortgage or the examination or failure to examine any Mortgage
File. With
respect to any representation or warranty contained in Subsections
7.01 or
7.02 hereof that is made to the Seller's knowledge, if it is
discovered by the
Purchaser that the substance of such representation and warranty
was
inaccurate as of the related Closing Date and such inaccuracy
materially and
adversely affects the value of the related Mortgage Loan, then
notwithstanding
the Seller's lack of knowledge with respect to the inaccuracy at
the time the
representation or warranty was made, such inaccuracy shall be
deemed a breach
of the applicable representation or warranty. Upon discovery by
either the
Seller, the Servicer or the Purchaser of a breach of any of the
foregoing
representations and warranties, the party discovering such breach
shall give
prompt written notice to the other relevant parties.
Within sixty (60) days after the earlier of either discovery by or
notice
to the Seller of any breach of a representation or warranty, which
materially
and adversely affects the value of the Mortgage Loans or the
interest of the
Purchaser therein (or which materially and adversely affects the
value of the
applicable Mortgage Loan or the interest of the Purchaser therein
in the case
of a representation and warranty relating to a particular Mortgage
Loan), the
Seller shall use its best efforts promptly to cure such breach in
all material
respects and, if such breach cannot be cured, the Seller shall, at
the
Purchaser's option, repurchase such Mortgage Loan or Mortgage Loans
at the
Repurchase Price. Notwithstanding the above sentence, within sixty
(60) days
after the earlier of either discovery by, or notice to, the Seller
of any
breach of the representations or warranties set forth in clause
(qq), (ss),
(tt), (uu), (vv), (ccc) or (ddd) of Subsection 7.01, the Seller
shall
repurchase such Mortgage Loan at the Repurchase Price. In the event
that a
breach shall involve any representation or warranty set forth in
Subsection
7.02, and
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such breach cannot be cured within (sixty) 60 days of the earlier
of either
discovery by or notice to the Seller of such breach, all of the
Mortgage Loans
affected by such breach shall, at the Purchaser's option, be
repurchased by
the Seller at the Repurchase Price. However, if the breach, shall
involve a
representation or warranty set forth in Subsection 7.01 (except as
provided in
the second sentence of this paragraph with respect to certain
breaches for
which no substitution is permitted) and the Seller discovers or
receives
notice of any such breach within 120 days of the related Closing
Date, the
Seller shall, at the Purchaser's option and provided that the
Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan
as provided above, remove such Mortgage Loan and substitute in its
place a
Qualified Substitute Mortgage Loan or Qualified Substitute Mortgage
Loans;
provided, however, that any such substitution shall be effected
within such
one hundred twenty (120) days after the related Closing Date. If
the Seller
has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient
Mortgage Loan at the Repurchase Price. Any repurchase of a Mortgage
Loan
pursuant to the foregoing provisions of this Subsection 7.03 shall
occur on a
date designated by the Purchaser, and acceptable to the Seller, and
shall be
accomplished by the Seller remitting to the Servicer for deposit
the amount of
the Repurchase Price in the Custodial Account for distribution to
the
Purchaser on the next scheduled Remittance Date.
At the time of repurchase of any deficient Mortgage Loan (or
removal of
any Deleted Mortgage Loan), the Purchaser and the Seller shall
arrange for the
assignment of the repurchased Mortgage Loan (or Deleted Mortgage
Loan) to the
Seller or its designee and the delivery to the Seller of any
documents held by
the Purchaser relating to the repurchased Mortgage Loan in the
manner required
by this Agreement with respect to the purchase and sale of such
Mortgage Loan
on the related Closing Date. In the event the Repurchase Price is
deposited in
the Custodial Account, the Seller shall, simultaneously with its
remittance to
the Servicer of such Repurchase Price for deposit, give written
notice to the
Purchaser that such deposit has taken place. Upon such repurchase,
the Seller
shall amend the related Mortgage Loan Schedule to reflect the
withdrawal of
the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes
one or
more Qualified Substitute Mortgage Loans, the Seller shall be
deemed to have
made the representations and warranties set forth in this Agreement
except
that all such representations and warranties set forth in this
Agreement shall
be deemed made as of the date of such substitution. No substitution
will be
made in any calendar month after the Determination Date for such
month. The
Seller shall effect such substitution by delivering to the
Purchaser for each
Qualified Substitute Mortgage Loan the Mortgage Note, the Mortgage,
the
Assignment of Mortgage and such other documents and agreements as
are required
by Subsection 6.03. The Seller shall remit to the Servicer for
deposit in the
Custodial Account the Monthly Payment less the Servicing Fee due on
each
Qualified Substitute Mortgage Loan in the month following the date
of such
substitution. Monthly Payments due with respect to Qualified
Substitute
Mortgage Loans in the month of substitution shall be retained by
the Seller.
For the month of substitution, distributions to the Purchaser shall
include
the Monthly Payment due on any Deleted Mortgage Loan in the month
of
substitution, and the Seller shall thereafter be entitled to retain
all
amounts subsequently received by the Seller in respect of such
Deleted
Mortgage Loan. The Seller shall give written notice to the
Purchaser that such
substitution has taken place and shall amend the related Mortgage
Loan
Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms
of this Agreement and the substitution of the Qualified Substitute
Mortgage
Loan. Upon
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such substitution, each Qualified Substitute Mortgage Loan shall be
subject to
the terms of this Agreement in all respects, and the Seller shall
be deemed to
have made with respect to such Qualified Substitute Mortgage Loan,
as of the
date of substitution, the covenants, representations and warranties
set forth
in Subsections 7.01 and 7.02.
For any month in which the Seller substitutes one or more
Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the Seller
shall determine the amount (if any) by which the aggregate
principal balance
of all such Qualified Substitute Mortgage Loans as of the date of
substitution
is less than the aggregate Stated Principal Balance of all such
Deleted
Mortgage Loans (after application of scheduled principal payments
due in the
month of substitution). The amount of such shortfall shall be
remitted to the
Servicer by the Seller for distribution by the Servicer in the
month of
substitution pursuant to Subsection 11.04. Accordingly, on the date
of such
substitution, the Seller will remit to the Servicer from its own
funds for
deposit into the Custodial Account an amount equal to the amount of
such
shortfall plus one month's interest thereon at the Mortgage Loan
Remittance
Rate.
In addition to such repurchase or substitution obligation, the
Seller
shall indemnify the Purchaser and its present and former directors,
officers,
employees and agents and any Successor Servicer and its present and
former
directors, officers, employees and agents and hold such parties
harmless
against any losses, damages, penalties, fines, forfeitures, legal
fees and
expenses and related costs, judgments, and other costs and expenses
resulting
from any claim, demand, defense or assertion based on or grounded
upon, or
resulting from, a breach of the Seller representations and
warranties
contained in this Agreement or any Reconstitution Agreement. For
purposes of
this paragraph, "Purchaser" shall mean the Person then acting as
the Purchaser
under this Agreement and any and all Persons who previously were
"Purchasers"
under this Agreement and "Successor Servicer" shall mean any Person
designated
as the Successor Servicer pursuant to this Agreement and any and
all Persons
who previously were "Successor Servicers" pursuant to this
Agreement. It is
understood and agreed that the obligations of the Seller set forth
in this
Subsection 7.03 to cure, repurchase or substitute for a defective
Mortgage
Loan, and to indemnify the Purchaser and Successor Servicer under
Subsection
12.01 constitute the sole remedies of the Purchaser and Successor
Servicer
respecting a breach of the representations and warranties set forth
in
Subsections 7.01 and 7.02.
Any cause of action against the Seller relating to or arising out
of the
breach of any representations and warranties made in Subsections
7.01 and 7.02
shall accrue as to any Mortgage Loan upon (i) discovery of such
breach by the
Purchaser or notice thereof by the Seller to the Purchaser, (ii)
failure by
the Seller to cure such breach, substitute a Qualified Substitute
Mortgage
Loan, or repurchase such Mortgage Loan as specified above and (iii)
demand
upon the Seller by the Purchaser for compliance with this
Agreement.
Subsection 7.04 Repurchase of Mortgage Loans with Early Payment
Defaults.
If the related Mortgagor is delinquent with respect to any of the
Mortgage
Loan's first three (3) Monthly Payments at any time either (i)
after
origination of such Mortgage Loan, or (ii) after the related
Closing Date, the
Seller, at the Purchaser's option, shall repurchase such Mortgage
Loan from
the Purchaser at a price equal to the Repurchase Price. The Seller
shall
repurchase such delinquent Mortgage Loan within thirty (30) days of
such
request.
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Subsection 7.05 Premium Recapture. With respect to any Mortgage
Loan
without Prepayment Penalties that prepays in full during the first
four months
following the related Closing Date, and with respect to any
Mortgage Loan that
is repurchased pursuant to Subsection 7.04, the Seller shall pay
the
Purchaser, within ten (10) Business Days after such prepayment in
full or
repurchase, an amount equal to the excess of the Purchase Price
Percentage for
such Mortgage Loan over par, multiplied by the outstanding
principal balance
of such Mortgage Loan as of the related Cut-off Date.
Section 8. Closing. The closing for the purchase and sale of each
Mortgage
Loan Package shall take place on the related Closing Date. At the
Purchaser's
option, each closing shall be either: by telephone, confirmed by
letter or
wire as the parties shall agree, or conducted in person, at such
place as the
parties shall agree. Each closing shall be subject to each of the
following
conditions:
(a) at least two Business Days prior to the related Closing Date,
the
Seller shall deliver to the Purchaser a magnetic diskette, or
transmit by
modem, a listing on a loan-level basis of the necessary information
to compute
the Purchase Price of the Mortgage Loans delivered on such Closing
Date
(including accrued interest), and prepare a Mortgage Loan
Schedule;
(b) all of the representations and warranties of the Seller in
this
Agreement shall be true and correct as of the related Closing Date
and no
event shall have occurred which, with notice or the passage of
time, would
constitute an Event of Default under this Agreement;
(c) the Purchaser's attorneys shall have received in escrow, all
Closing
Documents as specified in Section 9, in such forms as are agreed
upon and
acceptable to the Purchaser, duly executed by all signatories as
required
pursuant to the terms hereof; and
(d) all other terms and conditions of this Agreement shall have
been
complied with.
Section 9. Closing Documents. On the related Closing Date, the
Seller
shall deliver to the Purchaser's attorneys in escrow fully executed
originals
of:
(a) this Agreement (to be executed and delivered only for the
initial
Closing Date);
(b) the related Purchase Price and Terms Agreement, executed in
four (4)
counterparts;
(c) with respect to the initial Closing Date, the Custodial
Agreement,
dated as of the initial Cut-off Date;
(d) with respect to the initial Closing Date, a Custodial
Account
Certification in the form attached as Exhibit 4 hereto or a
Custodial Account
Letter Agreement in the form attached as Exhibit 5 hereto;
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(e) with respect to the initial Closing Date, an Escrow Account
Certification in the form attached as Exhibit 6 hereto or an Escrow
Account
Letter Agreement in the form attached as Exhibit 7 hereto;
(f) the related Mortgage Loan Schedule, segregated by Mortgage
Loan
Package, one copy to be attached hereto, one copy to be attached to
the
Custodian's counterpart of the Custodial Agreement, and one copy to
be
attached to the related Assignment and Conveyance as the Mortgage
Loan
Schedule thereto;
(g) with respect to the initial Closing Date, an Officer's
Certificate,
in the form of Exhibit 10 hereto with respect to the Seller,
including all
attachments thereto and with respect to subsequent Closing Dates,
an Officer's
Certificate upon request of the Purchaser; and
(h) with respect to the initial Closing Date, an Opinion of Counsel
of
the Seller (who may be an employee of the Seller), in the form of
Exhibit 11
hereto and with respect to subsequent Closing Dates, an Opinion of
Counsel of
the Seller upon request of the Purchaser;
(i) with respect to the initial Closing Date, an Opinion of Counsel
of
the Custodian (who may be an employee of the Custodian), in the
form of an
exhibit to the Custodial Agreement, if required;
(j) a Security Release Certification, in the form of Exhibit 12
or
Exhibit 13, as applicable, hereto executed by any person, as
requested by the
Purchaser, if any of the Mortgage Loans have at any time been
subject to any
security interest, pledge or hypothecation for the benefit of such
person;
(k) a certificate or other evidence of merger or change of name,
signed
or stamped by the applicable regulatory authority, if any of the
Mortgage
Loans were acquired by the Seller by merger or acquired or
originated by the
Seller while conducting business under a name other than its
present name, if
applicable;
(l) with respect to the initial Closing Date, the Underwriting
Guidelines
to be attached hereto as Exhibit 8 and with respect to each
subsequent Closing
Date, the Underwriting Guidelines to be attached to the related
Assignment and
Conveyance;
(m) Assignment and Conveyance Agreement in the form of Exhibit 14
hereto,
including all exhibits thereto;
(n) a Custodian's Certification, as required under the
Custodial
Agreement, in the form attached to the Custodial Agreement; and
(o) a MERS Report reflecting the Purchaser as Investor, the
Custodian as
custodian and no Person as Interim Funder for each MERS Designated
Mortgage
Loan.
The Seller shall bear the risk of loss of the closing documents
until
such time as they are received by the Purchaser or its
attorneys.
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Section 10. Costs. The Purchaser shall pay any commissions due
its
salesmen and the legal fees and expenses of its attorneys and
custodial fees.
All other costs and expenses incurred in connection with the
transfer and
delivery of the Mortgage including recording fees, fees for title
policy
endorsements and continuations, fees for recording Assignments of
Mortgage,
and the Seller's attorney's fees, shall be paid by the Seller.
Section 11. Administration and Servicing of the Mortgage Loans.
Subsection 11.01 Servicer to Act as Servicer. The Servicer shall
service
and administer the Mortgage Loans in accordance with this Agreement
and
Accepted Servicing Procedures and the terms of the Mortgage Notes
and
Mortgages, and shall have full power and authority, acting alone or
through
sub-servicers or agents, to do or cause to be done any and all
things in
connection with such servicing and administration which the
Servicer may deem
necessary or desirable and consistent with the terms of this
Agreement. The
Servicer may perform its servicing responsibilities through agents
or
independent contractors, but shall not thereby be released from any
of its
responsibilities hereunder.
Consistent with the terms of this Agreement, the Servicer may
waive,
modify or vary any term of any Mortgage Loan or consent to the
postponement of
strict compliance with any such term or in any manner grant
indulgence to any
Mortgagor; provided, however, that (unless the Mortgagor is in
default with
respect to the Mortgage Loan, or such default is, in the judgment
of the
Servicer, imminent, and the Servicer has the consent of the
Purchaser) the
Servicer shall not permit any modification with respect to any
Mortgage Loan
which materially and adversely affects the Mortgage Loan, including
without
limitation, any modification that would defer or forgive the
payment of any
principal or interest, change the outstanding principal amount
(except for
actual payments of principal), make any future advances, extend the
final
maturity date or change the Mortgage Interest Rate, as the case may
be, with
respect to such Mortgage Loan. Without limiting the generality of
the
foregoing, the Servicer in its own name or acting through
sub-servicers or
agents is hereby authorized and empowered by the Purchaser when the
Servicer
believes it appropriate and reasonable in its best judgment, to
execute and
deliver, on behalf of itself and the Purchaser, all instruments
of
satisfaction or cancellation, or of partial or full release,
discharge and all
other comparable instruments, with respect to the Mortgage Loans
and the
Mortgaged Properties and to institute foreclosure proceedings or
obtain a
deed-in-lieu of foreclosure so as to convert the ownership of such
properties,
and to hold or cause to be held title to such properties, on behalf
of the
Purchaser pursuant to the provisions of Subsection 11.12. The
Servicer shall
make all required Servicing Advances and shall service and
administer the
Mortgage Loans in accordance with applicable state and federal law
and shall
provide to the Mortgagors any reports required to be provided to
them thereby.
The Purchaser shall furnish to the Servicer any powers of attorney
and other
documents reasonably necessary or appropriate to enable the
Servicer to carry
out its servicing and administrative duties under this
Agreement.
Notwithstanding anything to the contrary in this Agreement, the
Purchaser
may at any time and from time to time, in its sole discretion, upon
written
notice to the Seller, with respect to (1) any REO Property or (2)
all Mortgage
Loans that are 90 or more days delinquent as of the date of such
notice and
any Mortgage Loans that subsequently become 90 or more days
delinquent
following the date of such notice (for the purposes of this
paragraph such
Mortgage
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Loans, "Delinquent Mortgage Loans"), either (i) terminate the
Seller's
servicing obligations hereunder with respect to such REO Properties
and
Delinquent Mortgage Loans, upon reimbursement of any unremibursed
advances
owed to the Servicer and payment of the termination fee referred to
in
Subsection 14.02, or (ii) assume the absolute right to direct the
Seller to
take such actions with respect to such REO Property and Delinquent
Mortgage
Loans as the Seller would otherwise be able to undertake pursuant
to
Subsection 11.12. Upon the effectiveness of any such termination of
the
Seller's servicing obligations with respect to any such REO
Property or
Delinquent Mortgage Loan, the Seller shall deliver all agreements,
documents,
and instruments related thereto to the Purchaser, in accordance
with Accepted
Servicing Procedures and applicable law and shall transfer
servicing to the
Purchaser's designee in accordance with Acceptable Servicing
Procedures.
Subsection 11.02 Liquidation of Mortgage Loans. If any payment due
under
any Mortgage Loan is not paid when the same becomes due and
payable, or in the
event the Mortgagor fails to perform any other covenant or
obligation under
the Mortgage Loan and such failure continues beyond any applicable
grace
period, the Servicer shall take such action as it reasonably
believes to be in
the best interest of the Purchaser. If any payment due under any
Mortgage Loan
remains delinquent for a period of ninety (90) days or more, the
Servicer
shall commence foreclosure proceedings in accordance with the
guidelines set
forth by Fannie Mae or Freddie Mac. In such event, the Servicer
shall from its
own funds make all necessary and proper Servicing Advances.
Subsection 11.03 Collection of Mortgage Loan Payments. Continuously
from
the date hereof until the principal and interest on all Mortgage
Loans are
paid in full, the Servicer will proceed diligently, in accordance
with this
Agreement, to collect all payments due under each of the Mortgage
Loans when
the same shall become due and payable. Further, the Servicer will
in
accordance with Accepted Servicing Procedures ascertain and
estimate taxes,
assessments, fire and hazard insurance premiums, and all other
charges that,
as provided in any Mortgage, will become due and payable to the end
that the
installments payable by the Mortgagors will be sufficient to pay
such charges
as and when they become due and payable.
Subsection 11.04 Establishment of Custodial Account; Deposits
in
CustodialAccount. The Servicer shall segregate and hold all funds
collected
and received pursuant to each Mortgage Loan separate and apart from
any of its
own funds and general assets and shall establish and maintain one
or more
Custodial Accounts (collectively, the "Custodial Account"), titled
"The
Hemisphere National Bank, in trust for Morgan Stanley Mortgage
Capital Inc. as
Purchaser of Mortgage Loans and various Mortgagors." Such Custodial
Account
shall be an Eligible Account established with a commercial bank, a
savings
bank or a savings and loan association (which may be a depository
affiliate of
the Servicer) which meets the guidelines set forth by Fannie Mae or
Freddie
Mac as an eligible depository institution for custodial accounts.
In any case,
the Custodial Account shall be insured by the FDIC in a manner
which shall
provide maximum available insurance thereunder and which may be
drawn on by
the Servicer. The creation of any Custodial Account shall be
evidenced by (i)
a certification in the form of Exhibit 4 hereto, in the case of an
account
established with a depository affiliate of the Servicer, or (ii) a
letter
agreement in the form of Exhibit 5 hereto, in the case of an
account held by a
depository other than an affiliate of the Servicer. In either case,
a copy of
such certification or letter agreement shall be furnished to the
Purchaser
upon request.
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The Servicer shall deposit in the Custodial Account on a daily
basis on
the Business Day following receipt thereof, and retain therein the
following
payments and collections received or made by it subsequent to the
related
Cut-off Date (other than in respect of principal and interest on
the Mortgage
Loans due on or before the related Cut-off Date):
(a) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(b) all payments on account of interest on the Mortgage Loans
adjusted to
the Mortgage Loan Remittance Rate;
(c) all Liquidation Proceeds;
(d) all proceeds received by the Servicer under any title
insurance
policy, hazard insurance policy, or other insurance policy other
than proceeds
to be held in the Escrow Account and applied to the restoration or
repair of
the Mortgaged Property or released to the Mortgagor in accordance
with
Accepted Servicing Procedures;
(e) all awards or settlements in respect of condemnation
proceedings or
eminent domain affecting any Mortgaged Property which are not
released to the
Mortgagor in accordance with Accepted Servicing Procedures;
(f) any amount required to be deposited in the Custodial Account
pursuant
to Subsections 11.14, 11.16 and 11.18;
(g) any amount required to be deposited by the Servicer in
connection
with any REO Property pursuant to Subsection 11.12;
(h) any amounts payable in connection with the repurchase of any
Mortgage
Loan pursuant to Subsection 7.03, and all amounts required to be
deposited by
the Servicer in connection with shortfalls in principal amount
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