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Exhibit 99.8
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FLOW MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
LEHMAN BROTHERS BANK, FSB
(Initial Purchaser)
CITIMORTGAGE, INC.
(Seller and Servicer)
Fixed Rate Mortgage Loans
Dated and effective as of May 1, 2004
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MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a Mortgage Loan Purchase and Servicing Agreement (the
"Agreement"), dated and effective as of May 1, 2004, by and between Lehman
Brothers Bank, FSB, (the "Initial
Purchaser," and the
Initial Purchaser or
the
Person, if any, to which the Initial Purchaser has assigned its rights and
obligations hereunder as Purchaser with
respect to a Mortgage Loan, and each of
their respective successors and assigns,
the "Purchaser"), and CITIMORTGAGE,
INC. (the "Seller").
WITNESSETH:
WHEREAS,
Purchaser has agreed to purchase from Seller
from time to time,
and Seller has agreed to sell to Purchaser
from time to time,
certain mortgage
loans (the "Mortgage Loans") on a non-recourse,
servicing retained basis, and
which shall be delivered as whole loans on
various dates provided herein (each a
"Closing Date");
WHEREAS,
Each Mortgage Loan is secured by a mortgage,
deed of trust or
other instrument creating a first lien on a
residential dwelling
located in the
jurisdiction indicated on the Mortgage Loan
Schedule; and
WHEREAS,
Purchaser and Seller wish to prescribe the manner of the
purchase, conveyance, management, servicing
and control of the Mortgage Loans.
NOW THEREFORE, In consideration of the premises
and the mutual agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and
Seller agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section
1.01 Definitions.
Whenever
used herein, the following words and phrases, unless the context
otherwise requires, shall have the
following meanings:
Agency(ies): Fannie Mae and/or Freddie Mac.
Agency
Transfer: Any sale or transfer of some or all of the Mortgage
Loans
by the Purchaser to an Agency which sale or transfer is not a Pass-Through
Transfer or Whole Loan Transfer.
Agreement:
This Mortgage Loan Purchase and Servicing Agreement, including
all exhibits hereto, and all amendments
hereof and supplements hereto.
ALTA: The
American Land Title Association or any successor thereto.
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Appraised
Value: As to any Mortgage Loan, the value of the related
Mortgaged Property based upon the appraisal made at the origination of the
Mortgage Loan or the sales price of the
Mortgaged Property,
whichever is less,
provided, however, that in the case of a
Refinanced Mortgage Loan, such value is
based solely upon the appraisal made at the time of origination of such
Refinanced Mortgage Loan.
Assignment
and Conveyance: An
Assignment and Conveyance Agreement in the
form of Exhibit L hereto dated as of the
related Closing
Date, by and between
the Seller and the Purchaser.
Assignment
of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, that when
properly completed and
recorded, is sufficient under the laws of
the jurisdiction
wherein the related
Mortgaged Property is located to reflect of
record the sale of the Mortgage Loan
to Purchaser.
BIF: The
Bank Insurance Fund, or any successor thereto.
Business
Day: Any day other
than (i) a Saturday or Sunday, or (ii) a day
on which banking or savings and loan
institutions
in the States of New
York or
Missouri are authorized or obligated by law
or executive order to be closed.
Citibank:
Citibank (West), FSB and any successors or assigns.
Closing
Date: The date or
dates set forth on the related Assignment and
Conveyance 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.
Closing
Documents:
The documents required pursuant to Section 8.01.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged
Property, whether permanent or temporary,
partial or entire, by
exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related
Mortgage
Loan Documents.
Custodial
Account: The separate account or accounts created and
maintained
pursuant to Section 10.09.
Custodial
Agreement:
That certain Custodial Agreement, dated as of
September 1, 1999 by and between the
Purchaser and U.S. Bank Trust National
Association, as amended.
Custodian:
The Custodian under
the Custodial Agreement, or its successor
in interest or assigns or any successor to the Custodian under the Custodial
Agreement as provided therein.
Customary
Servicing Procedures:
With respect to any
Mortgage Loan, those
procedures (including collection
procedures) that Seller customarily employs and
exercises in servicing and administering
mortgage loans for its
own account and
which are in accordance with accepted
mortgage servicing practices of prudent
lending institutions which service mortgage loans of the
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same type as such Mortgage Loans in the
jurisdiction where the
related Mortgage
Property is located.
Cut-off
Date: The first day of the month in which the related Closing
Date
occurs.
Deleted
Mortgage Loan: A Mortgage Loan replaced or
to be replaced with a
Qualified Substitute Mortgage Loan in
accordance with this Agreement.
Determination Date:
The sixteenth (16th) day, or if such sixteenth (16th)
day is not a Business Day, the Business Day
immediately preceding such sixteenth
(16th) day, of the month of the related
Remittance Date.
Due Date:
The day of the month
of the related
Remittance
Date on which
each Monthly Payment is due on a Mortgage
Loan, exclusive of any days of grace.
Due
Period: With respect
to each Remittance Date, the period beginning on
the second day of the month preceding the month of the Remittance Date, and
ending on the first day of the month in
which the Remittance Date occurs.
Errors and
Omissions Insurance
Policy: An errors and omissions insurance
policy to be maintained by the Seller
pursuant to Section 10.16.
Escrow
Account: The separate
account or accounts
created and
maintained
pursuant to Section 10.11.
Escrow
Payments:
The amounts constituting ground rents, taxes,
assessments, water rates, PMI premiums,
fire and hazard
insurance premiums and
other payments required to be escrowed by the Mortgagor with the mortgagee
pursuant to any Mortgage Loan.
Event of
Default: Any one of the conditions or circumstances enumerated
in
Section 14.01.
Fannie
Mae: The Federal
National Mortgage
Association
or any successor
thereto.
Fannie
Mae Guides: The Fannie Mae Sellers' Guide and the Fannie Mae
Servicers' Guide and all amendments or
additions thereto.
FDIC:
The Federal Deposit Insurance Corporation or any successor
organization.
Fidelity
Bond: A fidelity bond required to be obtained by Seller
pursuant
to Section 10.16.
FICO
Score: A statistical
credit score
obtained by mortgage
lenders in
connection with the loan application to help assess a borrower's credit
worthiness.
First
Remittance Date: June 18, 2004.
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Freddie
Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto
Initial
Closing Date: May 25,
2004, or other such date as may be mutually
agreed to by Seller.
Initial
Purchaser: Lehman Brothers Bank, FSB.
Insurance
Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage
Loan or the related Mortgaged Property.
Liquidating Loan:
A Mortgage Loan as to which, prior to the close of
business on the Business Day next
preceding the Due
Date, (a) has become an REO
Property or (b) Seller and the Mortgagor
have agreed in writing that Seller will
accept a deed to the related Mortgaged
Property in lieu of
foreclosure in whole
or partial satisfaction of the Mortgage
Loan.
Liquidation Proceeds:
Cash (other than REO Disposition Proceeds) received
in connection with the liquidation of a
defaulted Mortgage Loan, whether through
the sale or assignment of the Mortgage
Loan, trustee's sale, foreclosure sale or
otherwise.
Loan-to-Value Ratio
or LTV: With respect to any Mortgage Loan, the
original principal balance of such Mortgage
Loan divided by the Appraised Value
of the related Mortgaged Property.
MERS(R) System:
The electronice
system of recording
transfers of
mortgages maintained by the Mortgage
Electronic
Registration Systems,
Inc. or
any successor or assigns thereof.
Monthly
Advance: The portion of Monthly Payment delinquent with respect
to
each Mortgage Loan at the close of business
on the Determination
Date required
to be advanced by the Seller pursuant to Section 11.03 on the Business Day
immediately preceding the Remittance Date
of the related month.
Monthly
Payment: With respect to any Mortgage Loan, the scheduled
combined
payment of principal and interest payable by a Mortgagor under the related
Mortgage Note on each Due Date.
Mortgage:
The mortgage, deed of trust or other instrument creating a
first
lien on, or first priority ownership interest in, an estate in fee simple in
real property securing a Mortgage Note, including any rider incorporated by
reference therein.
Mortgagee:
The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or
beneficiary.
Mortgage
File: The mortgage documents pertaining to a particular
Mortgage
Loan which are specified in Exhibit A hereto and any additional documents
required to be added to the Mortgage File
pursuant to this Agreement.
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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.
Mortgage
Loan: An individual mortgage loan which is the subject
of this
Agreement, each mortgage loan originally sold and subject to this
Agreement
being identified on the Mortgage Loan
Schedule. The term Mortgage Loan includes,
without limitation, the contents of the Mortgage File,
the Monthly
Payments,
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds, REO Disposition Proceeds and all
other rights, benefits, proceeds and
obligations arising from or in connection
with such Mortgage Loan.
Mortgage
Loan Documents: The documents listed in Exhibit H hereto
pertaining to any Mortgage Loan.
Mortgage
Loan Package: A pool
of Mortgage Loans listed on a Mortgage Loan
Schedule and sold to the Purchaser by the
Seller on a Closing Date.
Mortgage
Loan Remittance
Rate: As to each
Mortgage Loan, the annual rate
of interest payable to Purchaser, which shall be equal to the
related Mortgage
Interest Rate minus the related Servicing
Fee Rate.
Mortgage
Loan Schedule:
With respect to each
Mortgage Loan Package,
the
schedule of Mortgage Loans to be annexed hereto as Exhibit F on each
Closing
Date, such schedule setting forth the information agreed to by the parties
hereto.
Mortgage
Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged
Property: The real property securing repayment of the debt
evidenced by a Mortgage Note, consisting of a single parcel of property
considered to be real estate under the law of the state in
which it is located
improved by a residential dwelling.
Mortgagor:
The obligor on a Mortgage Note.
Officers'
Certificate:
A certificate signed
by the Chairman of the Board
or the Vice Chairman of the Board or the
President, a Senior Vice President or a
Vice President and by the Treasurer or the Secretary or one of the
Assistant
Treasurers or Assistant Secretaries of Seller, or by other duly authorized
officers or agents of Seller and
delivered to Purchaser as required by this
Agreement.
Opinion of
Counsel: A written opinion of counsel who may be an employee of
CitiMortgage reasonably acceptable to the
Purchaser.
Pass-Through Transfer: The sale or transfer of some or all of the
Mortgage
Loans to a trust to be formed as part of a publicly-issued and/or privately
placed, rated or unrated, mortgage
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pass-through transaction, retaining the Seller as "servicer"
(with or without a
master servicer) thereunder.
Person:
Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political
subdivision thereof.
PMI:
Private mortgage insurance.
Prepayment
Interest Shortfall Amount: With respect to any Mortgage
Loan
that was subject to a Principal Prepayment in full or in part during any
Due
Period, which Principal Prepayment was applied to such
Mortgage Loan prior to
such Mortgage Loan's Due Date in such Due
Period, the amount of
interest (net
the related Servicing Fee) that would have accrued on the amount of such
Principal Prepayment during the period commencing on
the date as of which such
Principal Prepayment was applied to such Mortgage Loan and ending on the day
immediately preceding such Due Date,
inclusive.
Principal
Prepayment:
Any payment or other
recovery of
principal on a
Mortgage Loan which is received in advance
of its scheduled Due Date and is not
accompanied by an amount of interest
representing scheduled
interest due on any
date or dates in any month or months
subsequent to the month of prepayment.
Purchase
Price: The price paid
on the Closing Date by Purchaser to Seller
in exchange for the Mortgage Loans purchased on the Closing Date as
calculated
as provided in Section 4.01.
Purchase
Price and Terms
Letter: With respect to each purchase of a
Mortgage Loan Package hereunder, that
certain letter agreement setting forth the
general terms and conditions of such transaction contemplated herein and
identifying the Mortgage Loans to be purchased hereunder, by and between the
Seller and the Purchaser.
Purchase
Price Percentage: As defined in Section 4.01.
Purchaser:
The Initial
Purchaser and any
subsequent permitted
holder or
holders of the Mortgage Loans.
Qualified
Depository:
A depository
the accounts of which
are insured by
the FDIC through the BIF or the SAIF and
the debt obligations of which are rated
AA or better by Standard & Poor's
Corporation.
Qualified
Insurer: Any insurer acceptable to Seller and qualified
to do
business in the state in which any related
Mortgaged Property is located.
Qualified
Substitute Mortgage
Loan: A mortgage loan substituted by Seller
for a Deleted Mortgage Loan which must, on the
date of such
substitution, (a)
have an outstanding 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
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principal balance), not in excess of the
Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any
shortfall will be distributed by Seller to
Purchaser in the month of substitution),
(b) have a Mortgage Interest Rate equal
to the Mortgage Interest Rate of the
Deleted Mortgage Loan, (c) have a remaining
term to maturity not greater than (and not
more than one year less than) that of
the Deleted Mortgage Loan, and (d) comply as
of the date of
substitution with
each representation and warranty set
forth in Section 6.01, and 6.02 and (e) be
a REMIC Eligible Mortgage Loan.
Rating
Agency: Any of Fitch, Moody's or Standard & Poor's or their
respective successors designed by the
Purchaser.
Reconstitution: A
Pass-Through
Transfer, a Whole Loan Transfer or an
Agency Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the
Seller and the Purchaser and/or certain
third parties on the Reconstitution Date
or Dates with respect to any or all of the
Mortgage Loans serviced hereunder, in
connection with a Reconstitution as
provided in Article 5.
Reconstitution Date: The date or dates on which any or all of the
Mortgage
Loans serviced under this Agreement shall be removed from this
Agreement and
reconstituted as part of a Reconstitution
pursuant to Article 5 hereof.
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.
REMIC: A
"real estate mortgage
investment conduit"
within the meaning of
Section 860D of the Code.
REMIC
Eligible Mortgage Loan: A Mortgage Loan held by a REMIC which
satisfies and/or complies with all
applicable REMIC Provisions.
REMIC
Provisions:
Provisions of the
federal income tax law relating to a
REMIC, which appear at Section 860A
through 86OG of
Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect
from
time to time.
Remittance
Date: The eighteenth (18th) day of any month,
, or if such
eighteenth (18th) day is not a Business Day,
the first Business Day immediately
following such eighteenth (18th) day
beginning with the First Remittance Date.
REO
Account: The account or accounts maintained pursuant to Section
10.17.
REO
Disposition: The final sale by Seller of a Mortgaged Property
acquired
by Seller in foreclosure or by deed in lieu
of foreclosure.
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REO
Disposition
Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 10.17.
REO
Property: A Mortgaged
Property acquired by Seller through foreclosure
or deed in lieu of foreclosure, as
described in Section 10.17.
Repurchase
Price: With respect to
any Mortgage Loan, a price equal to (a)
the product referenced in the Purchase
Price and Terms Letter, plus (b) interest
on such Stated Principal Balance at a rate
equal to the Mortgage Loan Remittance
Rate from the date to which
interest has last been paid and distributed to
Purchaser to the first day of the month
following the month of repurchase, less
amounts received or advanced in respect of
such repurchased
Mortgage Loan which
are being held in the Custodial Account for distribution in the month of
repurchase plus (c) any costs and damages
incurred by the
Purchaser or related
trust with respect to any securitization of
the Mortgage Loan in connection with
any violation by such Mortgage Loan of any
predatory- or abusive-lending law.
SAIF: The
Savings Association Insurance Fund, or any successor thereto.
Securities
Act of 1933 or the
1933 Act: The
Securities Act of
1933, as
amended.
Seller:
CitiMortgage, Inc., its successors and assigns.
Servicing
Advances: All customary, reasonable and necessary
out-of-pocket
costs and expenses incurred in the performance by Seller of its servicing
obligations, including, but not limited to, the cost of (a) the
inspection,
preservation, restoration and protection of the Mortgaged
Property, (b) any
enforcement or judicial proceedings,
including
foreclosures, (c) the management
and liquidation of the Mortgaged
Property if the
Mortgaged Property is acquired
in satisfaction of the Mortgage and (d) compliance
with the obligations
under
Section 10.13.
Servicing
Fee: With respect to each Mortgage Loan, the amount of the
annual fee Purchaser shall pay to Seller,
which shall, for each
month, be equal
to one-twelfth of the product of (a) the Servicing Fee Rate and (b) the
outstanding 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.
The obligation of 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 Section
10.10) of related Monthly Payments
collected by Seller, or as otherwise provided
under Section 10.10.
Servicing
Fee Rate: With respect to each Mortgage Loan
and each Mortgage
Loan Package, the Servicing Fee Rate set forth in the related
Assignment
and
Conveyance.
Servicing
File: With respect to each Mortgage
Loan, the file retained by
the Seller consisting of originals of all documents in
the Mortgage File which
are not delivered to the
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Custodian and copies of the Mortgage Loan Documents listed in Exhibit H the
originals of which are delivered to the
Custodian pursuant to Section 5.03.
Servicing
Officer: Any officer of the Seller
involved in or
responsible
for, the administration and servicing of the Mortgage
Loans whose name appears
on a list of servicing officers furnished by the Seller to the
Purchaser upon
request, as such list may from time to time
be amended.
Stated
Principal Balance: As to each Mortgage Loan, (a) the principal
balance of the Mortgage Loan at the Cut-off
Date after giving effect to payments
of principal due on or before such date,
whether or not received, minus (b) all
amounts previously distributed to Purchaser with respect to the
Mortgage Loan
representing payments or recoveries of
principal, or advances in lieu thereof.
Subservicer: Any
mortgage loan
servicing institution
other than Seller
which is responsible for the servicing and
administration
of any Mortgage
Loan
or any successor appointed pursuant to any
Subservicing Agreement.
Subservicing Account: As defined in Section 10.06.
Subservicing Agreement: Each agreement providing for the
servicing of any
of the Mortgage Loans by a Subservicer.
Subservicing Fee: As to each Mortgage Loan, the monthly fee payable
to the
Subservicer, paid by Seller from its
Servicing Fee.
Underwriting
Guidelines: The
underwriting guidelines of the Seller which
are subject to change from time to
time.
Whole Loan
Transfer: The sale or transfer of some or
all of the Mortgage
Loans to a third party purchaser in a whole
loan transaction.
Section
1.02 General Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly
provided or
unless the context otherwise requires:
(a)
the terms
defined in this
Agreement have the
meanings assigned
to
them in this Agreement and include the plural as well as the
singular, and the use
of any gender
herein shall be deemed to
include the other gender;
(b)
accounting
terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles;
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(c)
references
herein
to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a
document
are to designated Articles, Sections, Subsections, Paragraphs and
other subdivisions of this Agreement;
(d)
a reference to a
Subsection without
further reference to a
Section
is a reference to such
Subsection as
contained in the same Section
in which the reference
appears, and this rule shall also apply
to
Paragraphs and other subdivisions;
(e)
the words
"herein", "hereof", "hereunder" and other words of similar
import refer to this
Agreement as a whole and not to any particular
provision; and
(f)
the term
"include" or "including" shall mean without limitation by
reason of enumeration.
ARTICLE II
AGREEMENT TO PURCHASE
Section
2.01 Agreement to Purchase.
The Seller
agrees to sell,
and the Purchaser agrees to purchase, from
time-to-time, on a servicing-retained basis,
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 Letter,
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 the
related Closing
Date.
ARTICLE III
MORTGAGE LOAN SCHEDULE
Section
3.01 Mortgage Loan Schedule.
With
respect to each
Mortgage Loan
Package, Seller shall deliver the
Mortgage Loan Schedule to Purchaser at
least five (5) Business Days prior to the
related Closing Date.
ARTICLE IV
PURCHASE PRICE
Section
4.01 Purchase Price.
The
Purchase Price for the
Mortgage Loans in each
Mortgage Loan
Package
shall be the percentage of par as stated in
the related Purchase Price and Terms
Letter ( the "Purchase Price Percentage") multiplied by the aggregate
Stated
Principal Balance of the Mortgage Loans, as
of
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the related Cut-off Date. Purchaser will pay to Seller
accrued interest on
the
Stated Principal Balance of each Mortgage
Loan as of the related Cut-off Date at
its Mortgage Loan Remittance Rate from the related Cut-off Date up to and
including the day preceding the related
Closing Date, prorated on the basis of a
360 day year consisting of twelve (12)
months of thirty (30) days each.
Purchaser
shall own and be
entitled to receive with respect to each
Mortgage Loan purchased, (a) all scheduled
principal due after the Cut-off Date,
(b) all other recoveries of principal collected after the Cut-off Date
(provided, however, that all scheduled payments of principal due on or
before
the Cut-off Date and collected by Seller after the
Cut-off Date shall belong to
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 Cut-off Date).
The Stated Principal
Balance of each
Mortgage Loan as of the Cut-off Date is
determined
after application to the
reduction of principal of payments of principal due on or before the Cut-off
Date whether or not collected. Therefore, for the purposes of this
Agreement,
payments of scheduled principal and interest
prepaid for a Due Date
beyond the
Cut-off Date shall not be applied to the
principal balance as of the Cut-off
Date. Such prepaid amounts (minus the applicable Servicing Fee) shall be the
property of Purchaser. Seller shall deposit any such prepaid
amounts into the
Custodial Account, which account is established
for the benefit of
Purchaser,
for remittance by Seller to Purchaser on
the first Remittance Date. All payments
of principal and interest, less the applicable Servicing Fee,
due on a Due Date
following the Cut-off Date shall belong to
Purchaser.
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ARTICLE V
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF MORTGAGE
LOAN DOCUMENTS; TRANSFER OF MORTGAGE LOANS
Section
5.01 Conveyance of
Mortgage Loans; Possession of Mortgage Files.
Seller, on the related
Closing Date,
does hereby sell,
transfer,
assign, set over and convey to Purchaser,
without recourse,
but subject to the
terms of this Agreement, all the right, title and interest of Seller in
and to
the Mortgage Loans in the related Mortgage
Loan Package, and
Mortgage Files and
all rights and obligations arising under the documents
contained therein for
each Mortgage Loan in the related
Mortgage Loan Package. Pursuant to Section
5.03, the Seller shall deliver the Mortgage Loan Documents for each Mortgage
Loan to the Custodian prior to the related
Closing Date.
The
contents of each
Mortgage File not delivered to the Custodian are and
shall be held in trust by Seller for the benefit of Purchaser as the owner
thereof. The Seller shall maintain a
Servicing File consisting of a copy of the
contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the
Custodian. Seller's possession of the portion
of each Servicing File so retained is for the sole
purpose of
servicing the
related Mortgage Loan, and such retention and possession by Seller is in a
custodial capacity only. Upon the purchase
of the Mortgage Loans, the ownership
of each Mortgage Note, Mortgage and each related
Mortgage File is vested in
Purchaser and the ownership of all records and
documents with respect to each
related Mortgage Loan prepared by or which come into the
possession of
Seller
shall immediately vest in Purchaser and shall be
retained and
maintained, in
trust, by Seller in such custodial
capacity only. The
portion of each Mortgage
File so retained shall be appropriately marked to clearly reflect the sale of
the related Mortgage Loan to Purchaser. Seller shall release from its
custody
the contents of any Mortgage File only in
accordance with
written
instructions
from Purchaser, unless such release is required as incidental to Seller's
servicing of the Mortgage Loans or is in connection with a repurchase of any
Mortgage Loan pursuant to Section 6.03,
6.04 and 12.02.
Section
5.02 Books and
Records.
From and
after the sale of the Mortgage Loans to the Purchaser, all
rights
arising out of the Mortgage Loans including, but not limited to, all funds
received on or in connection with a Mortgage Loan shall be held by Seller
in
trust for the benefit of Purchaser
as the owner of the
Mortgage Loans and the
Seller shall retain record title to the related
Mortgages for the sole
purpose
of facilitating the servicing and the supervision of the servicing of the
Mortgage Loans.
The sale
of each Mortgage
Loan shall be
reflected on Seller's balance
sheet and other financial statements as a
sale of assets by Seller. Seller shall
be responsible for maintaining, and
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shall maintain, a complete set of books and
records for each Mortgage Loan which
shall be clearly marked to reflect the ownership of each Mortgage Loan by
Purchaser in Seller's computer system. In
particular, the Seller
shall maintain
in its possession, available for inspection by the
Purchaser, or its
designee
and shall deliver to the Purchaser upon
demand, evidence of
compliance with all
federal, state and local laws, rules and
regulations
The Seller
shall maintain
with respect to each
Mortgage Loan and shall
make available for inspection during Seller's normal business hours and upon
reasonable notice by any Purchaser or its
designee the related
Servicing File
during the time the Purchaser retains ownership of a Mortgage Loan and
thereafter in accordance with applicable
laws and regulations.
Section
5.03 Delivery of
Mortgage Loan Documents.
On or
before the date which is agreed upon by the Purchaser and the
Seller
in the related Purchase Price and Terms Letter, the Seller shall deliver to
Purchaser or the Custodian, as directed by Purchaser, the Mortgage Loan
Documents as required by Exhibit H hereto
for each Mortgage Loan in the Mortgage
Loan Package.
On or
prior to the related
Closing Date, the Custodian shall certify its
receipt of all such Mortgage Loan Documents
required to be delivered pursuant to
the Custodial Agreement, as evidenced by the Initial Certification of the
Custodian in the form annexed to the
Custodial Agreement.
Purchaser shall pay
all fees and expenses of the Custodian
Seller
shall forward to 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 of their execution; provided,
however, that Seller shall provide Purchaser
or its designee, with a certified true copy of any
such document
submitted for
recordation within two (2) weeks of its execution, and shall provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and
complete
copy of the original within 180 days of its
submission for
recordation. In
the
event Seller cannot deliver the original of such documents submitted for
recording due to a delay by the recording
office in the applicable jurisdiction,
Seller shall instead deliver a recording
receipt of such recording office or, if
such recording receipt is not available,
an Officer's
Certificate from
Seller
confirming that such documents have been accepted for recording. Any such
document shall be delivered to Purchaser or
its designee promptly
upon receipt
thereof from the related recording
office.
From time
to time Purchaser
shall deliver or cause to be
delivered to
Seller, as soon as practicable following receipt of a written request from
Seller and at no expense to Seller,
any Mortgage Loan
Document needed by Seller
in connection with the servicing of a Mortgage
Loan. Seller's
request for the
release of a Mortgage Loan Document shall specify in reasonable detail the
reason for Seller's request. During the time that any such Mortgage Loan
Document is in the possession of Seller,
such possession
shall be deemed to
be
in trust for the benefit of Purchaser and Seller shall promptly return to
Purchaser or its designee any Mortgage
Loan Document so released when
Seller's
need for such Mortgage Loan Document no
longer exists. Purchaser shall indemnify
and hold Seller harmless against any and
all claims, losses, damages,
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penalties, fines, forfeitures, reasonable and necessary legal
fees and related
costs, judgments, and any other costs, fees
and expenses that Seller may sustain
in connection with any third party claim in any
way related to
Purchaser's or
its designee's failure to release, in a timely manner, the Mortgage Loan
Documents requested by Seller. Purchaser shall pay all costs,
fees and expenses
in connection with the possession of the
Mortgage Loan Documents.
Purchaser
shall provide
Seller with written
notice at least fifteen (15)
days prior to any transfer of the Mortgage
Loan Documents.
Section
5.04 Transfer of Mortgage Loans.
The
Initial Purchaser shall have the right, without the consent of
Seller,
to assign its interest under this Agreement with respect to all or
some of the
Mortgage Loans, and designate any person to exercise any rights
of Purchaser
hereunder, and the assignee or designee shall accede to the rights and
obligations hereunder of Purchaser with respect to such Mortgage Loans;
provided, however, that Seller shall not be
required to recognize any assignment
to the extent that it would result in
Mortgage Loans in a
Mortgage Loan Package
being serviced for more than four (4)
separate
Reconstitutions, which
will be
reconstituted with no more than four (4)
separate and distinct
investors/master
servicers at any point in time hereunder. All references to Purchaser shall
be
deemed to include its assignee or
designee.
Seller
shall keep at its
servicing office books and records in which,
subject to such reasonable regulations as it may prescribe,
Seller shall note
transfers of the Mortgage Loans. No transfer of the Mortgage Loans
may be made
unless such transfer is in compliance with
the terms hereof. For the purposes of
this Agreement, Seller shall be under no
obligation to deal with any person with
respect to this Agreement or the Mortgage Loans unless the books and
records
show such person as Purchaser of the
Mortgage Loans.
Purchaser may, subject
to
the terms of this Agreement, sell and transfer, in whole or in part, the
Mortgage Loans, provided that no such sale and
transfer shall be
binding upon
Seller unless such transferee shall agree in writing in the form
of Assignment,
Assumption and Recognition Agreement attached hereto as Exhibit G, to
be bound
by the terms of this Agreement and an executed copy of such Assignment,
Assumption and Recognition Agreement shall have been
delivered to Seller.
Upon
receipt thereof, Seller shall mark its books and records to reflect the
ownership of the Mortgage Loans by such assignee, and the previous Purchaser
shall be released from its obligations
hereunder to the
extent such obligations
relate to Mortgage Loans sold by Purchaser.
This Agreement shall be binding upon
and inure to the benefit of Purchaser and
Seller and their respective permitted
successors, assignees and designees.
Section
5.05 Whole
Loan Transfers, Agency Transfers or Pass-Through
Transfers.
Seller
and Purchaser agree that with respect to some or all of the
Mortgage Loans, upon written notice to
Seller at least eleven (11) days prior to
the first Due Period of such Whole Loan Transfer, Agency Transfer or Pass
Through-Transfer, provided Purchaser
provides to Seller all information included
on Exhibit K hereto with such notice,
Purchaser may effect either one or more
Whole Loan Transfers, and/or one or more
Pass-Through Transfers.
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<PAGE>
(a)
Whole Loan
Transfers.
With respect to each Whole Loan Transfer
entered into by Purchaser, Seller agrees:
(i) to cooperate
reasonably
with Purchaser and any prospective
purchaser with respect to all reasonable requests; and
(ii) to execute
or acknowledge, at Purchaser's discretion, an
assignment in
the form of Exhibit G by Purchaser to a
successor purchaser
of some or all of the Mortgage Loans,
which Mortgage
Loans
will be assigned subject to the
representations and warranties set forth in this Agreement and
covenants to
service the Mortgage Loans on behalf of the
successor
purchaser in
accordance
with
the terms and
conditions of this Agreement or otherwise.
(b)
Pass Through
Transfers and Agency
Transfers.
Purchaser and
Seller
agree that in
connection
with the completion of a Pass-Through
Transfer or Agency Transfer, Seller shall:
(i) if
Seller is required to be a party to any of the
Reconstitution
Agreements, execute any Reconstitution
Agreement required to effectuate the foregoing;
(ii) provide,
at Purchaser's
expense, to any master servicer or
trustee, as applicable, and/or Purchaser any and all
publicly
available
information and
appropriate
verification
of
information which
may be reasonably available to Seller,
whether through
letters of its
auditors or otherwise, as
Purchaser, trustee
or a master servicer shall reasonably
request as to the related Mortgage Loans;
(iii) agree to service the Mortgage Loans in accordance with the
requirements of this
Agreement or in accordance with the
requirements of FNMA, or any successor thereto, or FHLMC, or
any successor thereto; subject to such waivers, variances, and
modifications as may
be agreed to between
FNMA or FHLMC, as
the case may be, the Seller and the master servicer; and
(iv) to cooperate
fully with the
Purchaser,
Fannie Mae,
Freddie
Mac, the trustee or a third party purchaser and any
prospective Purchaser,
at the Purchaser's expense, with
respect to
all reasonable requests and due diligence
procedures including
participating
in meetings
with rating
agencies, Fannie Mae, Freddie Mac, bond insurers, guarantors,
and such other parties
as the Purchaser shall
designate and
participating in meetings with prospective purchasers of the
Mortgage Loans or interests therein and providing information
contained in the Mortgage Loan Schedule including any diskette
or other related data tapes provided as reasonably
requested
by such Purchasers;
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<PAGE>
(v) to deliver
to the Purchaser
and to any Person
designated by
the Purchaser
(a) for inclusion in any prospectus or other
offering
material such
publicly available information
regarding the Seller, its financial condition and its mortgage
loan delinquency,
foreclosure
and loss experience and any
additional information
requested by the
Purchaser,
(b) any
similar non-public, unaudited financial information (which the
Purchaser may, at its option and at its cost, have audited by
certified public accountants) and such other information as is
reasonably requested
by the Purchaser and which the Seller is
capable of providing without unreasonable effort or expense,
and to
indemnify,through an
indemnification
agreement, the
Purchaser and
its affiliates for material misstatements
contained in such
information,
and if such
indemnification
from the Seller is provided, the Purchaser shall indemnify the
Seller for material misstatements contained in such prospectus
or offering material
that was not provided
by the Seller and
(c) such statements and audit letters of reputable, certified
public accountants
pertaining to information provided by the
Seller pursuant
to clause (a) above as shall be reasonably
requested by the Purchaser; and
(vi) provide all other
assistance reasonably requested by Purchaser
in connection with completion of the Pass Through Transfer.
(c)
With
respect to any Pass-Through Transfer or Agency Transfer,
Purchaser shall be
entitled to include in any disclosure document
any unaltered
information
specifically requested
by Purchaser for
this purpose
and provided by Seller and Seller
acknowledges
and
agrees that the related investors will be permitted to
rely on such
information. If Purchaser determines that Seller is required to be
a
party to any
reconstitution
agreement, Seller
shall execute such
reconstitution
agreement within a reasonable period of time, but in
no event shall such time exceed ten (10) Business Days after mutual
agreement between Purchaser and Seller as to the terms thereof.
(d)
All of the
Mortgage Loans,
including those
Mortgage Loans that are
subject to a Pass-Through Transfer, Agency Transfer or a Whole
Loan
Transfer, shall
continue to be subject to this Agreement, and with
respect thereto,
this Agreement shall remain in full force and
effect. In no event shall a Whole Loan Transfer, Agency Transfer or
a Pass-Through
Transfer be deemed to relieve the Seller of its
obligations as set
forth in Article VI hereof nor to increase the
Seller's liabilities,
duties, obligations,
or responsibilities
as
set forth in this Agreement.
All
Mortgage Loans not sold or transferred pursuant to an Agency
Transfer,
Pass-Through Transfer or Whole Loan
Transfer and any and all Mortgage Loans
repurchased by the Purchaser pursuant to Section 5.06 below
with respect to an
Agency Transfer, Pass-Through Transfer or Whole Loan Transfer
shall be subject
to this Agreement and shall continue to be
serviced in accordance with the terms
of this Agreement and with respect
thereto this Agreement
shall remain in
full
force and effect. All Mortgage Loans not sold or transferred pursuant to an
Agency Transfer or Pass-Through
Transfer and any
Mortgage Loans
repurchased by
the Purchaser pursuant to
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<PAGE>
Section 6.03 of this Agreement or otherwise
directly or indirectly reacquired by
the Purchaser or its designee upon termination of an Agency Transfer or
Pass-Through Transfer, shall be subject to this Agreement
and shall continue to
be serviced in accordance with the terms of this
Agreement and with respect
thereto this Agreement shall remain in full
force and effect.
If
required at any time by the Rating Agencies, Purchaser or successor
Purchaser in connection with any Agency
Transfer, Pass-Through Transfer or Whole
Loan Transfer, the Seller shall deliver such additional documents from its
Servicing File within 10 days if provided
in an electronic
format and within 10
business days for a hard copy, to the
Custodian,
successor Purchaser or other
designee of the Purchaser as the Rating Agencies, Purchaser or successor
Purchaser may reasonably require.
Section
5.06 Purchaser's Repurchase and Indemnification Obligations.
Upon receipt by the Seller of notice from Fannie Mae, Freddie Mac
or
the trustee of a breach of any Purchaser
representation or warranty contained in
any Reconstitution Agreement or a request by Fannie
Mae, Freddie Mac or the
trustee, as the case may be, for the
repurchase of any Mortgage Loan transferred
to Fannie Mae or Freddie Mac pursuant to an Agency Transfer or to a trustee
pursuant to a Pass-Through Transfer, the Seller shall promptly notify the
Purchaser of same and shall, at the direction of the Purchaser, use its best
efforts to cure and correct any such breach and to satisfy the requests or
concerns of Fannie Mae, Freddie Mac, or the
trustee related to such deficiencies
of the related Mortgage Loans transferred to Fannie Mae, Freddie Mac, or the
trustee.
The Purchaser
shall repurchase from the Seller any Mortgage
Loan
transferred to Fannie Mae or Freddie Mac
pursuant to an Agency
Transfer or to a
trustee pursuant to a Pass-Through Transfer
with respect to which the Seller has
been required by Fannie Mae, Freddie Mac, or the trustee to
repurchase due to a
breach of a representation or warranty made
by the Purchaser with respect to the
Mortgage Loans, or the servicing thereof prior to the transfer date
to Fannie
Mae, Freddie Mac, or the trustee in any
Reconstitution
Agreement and not due to
a breach of the Seller's representations or obligations
thereunder or
pursuant
to this Agreement. The repurchase price to be paid by the
Purchaser to the
Seller shall equal that repurchase price paid by the Seller to Fannie
Mae,
Freddie Mac, or the third party purchaser
plus all reasonable costs and expenses
borne by the Seller in connection with the cure of said breach of a
representation or warranty made by the
Purchaser and in connection with the
repurchase of such Mortgage Loan from Fannie Mae,
Freddie Mac, or the
trustee,
including, but not limited to, reasonable
and necessary attorneys' fees.
At the time of
repurchase,
the Custodian and the Seller shall
arrange for the reassignment of the repurchased
Mortgage Loan to the
Purchaser
according to the Purchaser's instructions and the delivery to the Custodian
of
any documents held by Fannie Mae, Freddie Mac, or the trustee with
respect to
the repurchased Mortgage Loan pursuant to
the related Reconstitution Agreement.
In the event of a repurchase, the Seller shall, simultaneously with such
reassignment, give written notice to the Purchaser
that such repurchase has
taken place, and amend the related Mortgage Loan Schedule to reflect the
addition of the repurchased Mortgage Loan
to this Agreement. In
connection with
any such addition, the Seller and the Purchaser
shall
17
<PAGE>
be deemed to have made as to such
repurchased Mortgage
Loan the representations
and warranties set forth in this
Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section
6.01 Representations
and Warranties Regarding Individual Mortgage
Loans.
Seller
hereby represents and warrants to Purchaser that, as to each
Mortgage Loan, as of the related Closing Date (or such other date as may
be
specified herein):
(a)
The information set forth on the Mortgage Loan Schedule and the
magnetic tape or
diskette delivered to Purchaser by Seller is
complete, true and correct as of the Cut-off Date;
(b)
The Mortgage Note and the Mortgage have not been assigned or
pledged, and
Seller has good and
marketable
title thereto, and
Seller is the sole
owner and holder of the Mortgage Loan free and
clear of any and all
liens, claims, encumbrances, participation
interests, equities,
pledges, charges or
security interests of any
nature and has full right and authority, subject to no interest or
participation of, or
agreement with, any
other party, to sell
and
assign the same pursuant to this Agreement;
(c)
The Mortgage is a valid and
subsisting
first lien on the
property
therein described,
and the Mortgaged
Property is free and clear of
any and all adverse claims, encumbrances and liens having priority
over the first lien of
the Mortgage
except for (i) liens
for real
estate taxes and special assessments not yet due and
payable, (ii)
covenants, conditions and restrictions, rights of way, easements
and
other matters of
public record as of
the date of recording
being
acceptable to
mortgage lending institutions generally and
specifically referred
to in the lender's
title insurance policy
delivered to the
originator of the
Mortgage Loan and
which do not
adversely affect the Appraised Value of the Mortgaged Property,
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. Any security
agreement, chattel
mortgage or equivalent
document related to
the
Mortgage and delivered
to Purchaser
establishes in Seller
a valid
and subsisting first
lien on the property
described therein,
and
Seller has full right to sell and assign the same to Purchaser;
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<PAGE>
(d)
The terms of the Mortgage Note and the Mortgage have not been
impaired, waived,
altered or modified in
any respect, except by
a
written instrument which has been recorded, if required by law, or,
if necessary, to protect the interest of Purchaser. The substance
of
any such alteration
or modification is reflected on the Mortgage
Loan
Schedule and has been approved by the private mortgage guaranty
insurer, if any;
(e)
No instrument
of release,
alteration,
modification
or waiver has
been executed in connection with the Mortgage Loan, and no
Mortgagor
has been released, in whole or in part, except in connection with
an
assumption agreement which has been approved by the private
mortgage
guaranty insurer,
if any, and except such Mortgage Loan which
contains in the
related Mortgage File evidence of a release or
waiver or an assumption agreement discharging the original
borrower
from all of the debt
obligations in
connection
with the related
Mortgage Loan and
providing for the assumption of all such debt
obligations by the party assuming the obligations under the
Mortgage
Loan and, in each case, terms of which are reflected in the
Mortgage
Loan Schedule;
(f) Except as permitted
in clause (l) and as
to any defaults
regarding
payment of the
Mortgage Note,
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. 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 by the
Mortgage Note or
Mortgage, except for
interest accruing
from the
date of the Mortgage
Note or date of
disbursement of the
Mortgage
proceeds, whichever
is greater,
to the day which
precedes by one
month the Due
Date of the first installment of principal and
interest;
(g)
There
is no proceeding pending or threatened for the total or
partial condemnation
of the Mortgaged Property, nor is such a
proceeding currently
occurring,
and such property is
undamaged by
waste, fire, earthquake or earth movement, windstorm, flood,
tornado
or other casualty,
so as to affect
materially
and adversely the
value of the Mortgaged Property as security for the Mortgage Loan
or
the use for which the premises were intended;
(h)
There are no mechanics' or similar liens or claims which
have been
filed for work, labor
or material
(and no rights are
outstanding
that under law could give rise to such lien) affecting the
Mortgaged
Property which
are, or may be, liens prior or equal to, or
coordinate with, the
lien of the related
Mortgage unless such lien
is insured under the related title insurance policy;
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<PAGE>
(i) All improvements
which were included
for the purpose of determining
the Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of the Mortgaged
Property
and, to Seller's knowledge, no improvements on adjoining
properties
encroach upon the Mortgaged Property (other than minor
encroachments
(i) which do not affect the value of the Mortgage Loan or the
Purchaser's interest therein and (ii) to which properties similar
to
the Mortgaged Property
within the same
jurisdiction
are commonly
subject and which do not interfere with the benefits of the
security
intended to be
provided by the related Mortgage or the use,
enjoyment, value
or marketability of the related Mortgaged
Property);
(j)
No improvement
located on or being part of the Mortgaged Property is
in violation of any
applicable
zoning law or
regulation
and 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 and the
Mortgaged Property is
lawfully occupied
under
applicable law;
(k)
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) (i) in
compliance
with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged
Property
is located,
and (ii) either (1)
organized under the laws of such
state, or (2) qualified to do business in such state, or (3)
federal
savings and loan
associations, federal
savings banks or national
banks having
authorized
offices in such
state, or (4) not doing
business in such state;
(l)
Unless as set
forth in the
Assignment and
Conveyance,
no payment
required under any
Mortgage Loan has been
thirty (30) days or more
delinquent at any time prior to or on the related Cut-off Date;
(m)
The Mortgage
File contains
each of the
documents and
instruments
specified to be included therein duly executed and in due and
proper
form, and each such document or instrument is in form acceptable to
the applicable federal or state regulatory agency, and each
Mortgage
Note, Mortgage,
and appraisal are on forms acceptable to the
applicable federal or state regulatory agency;
(n)
The Mortgage Note and the related
Mortgage are genuine,
and each is
the legal,
valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or affecting the enforcement of
creditors' rights and by general principles of equity. All parties
to the Mortgage Note and the Mortgage had legal capacity to execute
the Mortgage
Note and the
Mortgage, and each Mortgage Note and
Mortgage have been duly and properly executed by such parties;
(o)
As of the date of origination of the
20
<PAGE>
Mortgage Loans, any
and all requirements
of any federal, state
or
local law including,
without limitation,
usury,
truth-in-lending,
real estate settlement procedures, consumer credit protection,
equal
credit opportunity, disclosure laws and and all applicable
predatory
and abusive lending
laws or unfair and
deceptive practices laws
applicable to the
Mortgage Loan have been complied with; 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;
(p)
The proceeds of
the Mortgage Loan have been fully disbursed, there
is no requirement
for future
advances thereunder and any and all
requirements as
to completion of any on-site or off-site
improvements
and as to disbursements of any escrow funds therefor
have been complied
with. All costs, fees
and expenses incurred
in
making or closing
Mortgage Loans and the
recording of the Mortgage
were paid;
(q)
Any future advances made prior to the Cut-off Date have been
consolidated with the
outstanding principal
amount secured by
the
Mortgage, and the secured principal amount, as consolidated, bears
a
single interest
rate and single
repayment term reflected on the
Mortgage Loan
Schedule. 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
title evidence. The
consolidated
principal amount does
not exceed
the original principal amount of the Mortgage Loan;
(r)
All 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
customary in the
area where the Mortgaged Property is located, pursuant to insurance
policies conforming to the requirements of Section 10.15 hereof.
All
individual insurance policies (collectively, the "hazard insurance
policy") are the valid
and binding
obligation
of the insurer and
contain a standard
mortgagee clause insuring Seller, its successors
and assigns, as mortgagee. All premiums thereon have been
paid. The
Mortgage obligates
the Mortgagor thereunder to maintain all
such
insurance at
the Mortgagor's cost and expense, and upon the
Mortgagor's failure to
do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and
expense and to seek reimbursement therefor from the Mortgagor;
(s)
There is no
default, breach, violation or event of acceleration
existing under the
Mortgage or the
related Mortgage
Note and, to
Seller's knowledge, no event which, with the passage of time or
with
notice and
the expiration of any grace or cure period, would
constitute a default,
breach, violation or
event of
acceleration;
and Seller has not waived any default, breach, violation or event
of
acceleration;
(t)
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
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<PAGE>
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 the
defense of usury,
and no such right of
rescission,
set-off, counterclaim
or defense has been
asserted with respect
thereto; and no
Mortgagor (a) was a
debtor in any state or federal
bankruptcy or
insolvency
proceeding
or (b) had a foreclosure
proceeding commenced
against him, in each case, at the time the
Mortgage Loan was originated or in the twelve (12) months
preceding
the related origination date;
(u)
All PMI
policies remain in full force and effect
with no defaults
thereunder. No action,
inaction, or event has occurred and no state
of fact exists or has existed that has resulted, or will result in,
the exclusion
from, denial of, or defense to
coverage under any
applicable PMI policy
irrespective of the
cause of such failure of
coverage;
(v)
The Mortgage
Note is not secured by any collateral, pledged account
or other security except the lien of the corresponding Mortgage and
the security
interest of any applicable security agreement or
chattel mortgage referred to in Section 6.01(c);
(w)
The Mortgage
contains customary and enforceable
provisions
which
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, subject only to rights of
redemption, seizure
and other laws that would not materially
interfere with the
ultimate realization of the benefits of the
security;
(x)
No error,
omission,
misrepresentation,
negligence fraud or similar
occurrence with
respect to a Mortgage
Loan has taken place
on the
part
of Seller or the Mortgagor or, to the best of Seller's
knowledge, any
other party involved in the origination of the
Mortgage Loan;
including without
limitation
the Mortgagor, any
appraiser, any builder
or developer, or any other party involved in
the origination of the
Mortgage Loan or, in the application of any
insurance in
relation to such Mortgage Loan; no predatory or
deceptive lending
practices, including,
without limitation, the
extension of credit without regard to the ability of the borrower
to
repay and the
extension of credit which has no apparent benefit to
the borrower, were employed in the origination of the Mortgage
Loan;
(y)
The Mortgaged
Property is a fee simple property located in the state
identified in the Mortgage Loan Schedule and consists of a parcel
of
real property
with a detached single family residence erected
thereon, two-to-four family dwelling, an individual condominium
unit
in a low-rise
condominium
project, or an individual unit in a
planned unit development, provided, however, that any condominium
project or planned unit development shall conform with the
Seller's
Underwriting
Guidelines regarding such dwellings, and no residence
or dwelling is a mobile
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<PAGE>
home, a manufactured
dwelling, a modular home or rural property. No
portion of the Mortgaged Property is used for commercial
purposes;
(z)
There exist no
deficiencies
with respect to escrow deposits and
payments, if
such are required, for which customary arrangements for
repayment thereof
have not been made,
and no escrow
deposits or
payments of
other charges or payments due Seller have been
capitalized under the Mortgage or the related Mortgage Note;
(aa)
The collection
and servicing
practices used by
Seller with respect
to the Mortgage Note
and Mortgage have been
in all respects
legal
and customary
in the mortgage servicing business. All Escrow
Payments have been
collected in full compliance with state and
federal law. An escrow of funds is not prohibited by applicable law
and has been
established in an
amount sufficient to
pay for every
item which remains unpaid and which 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. With respect to escrow
deposits and
Escrow Payments, any
interest required to be paid pursuant to state
and local law has been properly paid and credited;
(bb)
The Mortgage Loan is covered by an ALTA or CLTA mortgage title
insurance policy, or such other generally acceptable form of policy
or insurance,
issued by and the
valid and binding
obligation of a
title insurer and qualified to do business in the jurisdiction
where
the Mortgaged Property
is located, insuring
Seller, its successors
and assigns, as to the
first priority
lien of the Mortgage
in the
original principal
amount of the Mortgage Loan and against any loss
by reason of the invalidity or unenforceability of the lien
resulting from the
provisions of the Mortgage. Such mortgage title
insurance policy
insures Seller, its successors and assigns as
mortgagee and the
assignment to
Purchaser of Seller's
interest in
such mortgage title insurance policy does not require the consent
of
or notification to the insurer, such mortgage title insurance
policy
is in full force and effect and will be in full force and effect
and
inure to the benefit
of Purchaser upon the consummation of the
transactions
contemplated by this
Agreement.
No claims have
been
made under such
mortgage title
insurance policy and, to Seller's
knowledge, no
prior holder of the related Mortgage, including
Seller, has done, by
act or omission,
anything which would
impair
the coverage of such mortgage title insurance policy;
(cc)
Principal payments on
the Mortgage Loan commenced no more than sixty
(60) days after the
proceeds of the Mortgage Loan were disbursed.
The Mortgage
Loan bears
interest at the
Mortgage Interest
Rate.
Except with respect to
Mortgage Loans
identified
on the Mortgage
Loan Schedule as balloon payment Mortgage Loans, the Mortgage Note
is payable on the first day of each month in Monthly Payments which
will fully amortize
the Stated
Principal Balance of the Mortgage
Loan over its
remaining term at the
Mortgage Interest
Rate. The
Mortgage Note does not permit negative amortization;
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<PAGE>
(dd)
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;
(ee)
At the time the
Mortgage Loan was
originated, the
originator was a
mortgagee approved by the Secretary of Housing and Urban
Development
pursuant to Sections
203 and 211 of the
National Housing Act
or a
savings and loan
association, a savings
bank, a commercial bank or
similar banking
institution
which is supervised
and examined by a
Federal or State
authority or a Fannie
Mae or Freddie Mac approved
mortgagee;
(ff) The Mortgage Loan was underwritten in accordance with the
Seller's
Underwriting
Guidelines in effect at the time the Mortgage Loan was
originated;
(gg)
As of the related
Closing Date 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;
(hh)
The Seller has no
knowledge of any
circumstances or conditions with
respect to the Mortgage, the Mortgaged Property, the Mortgagor or
the Mortgagor's
credit standing that
can reasonably be expected to
cause the Mortgage Loan to be an unacceptable investment,
cause the
Mortgage Loan to become delinquent, or adversely affect the value
of
the Mortgage Loan;
(ii)
If the Mortgaged
Property is a
condominium
unit or a planned
unit
development (other
than a de minimus planned unit development) such
condominium or planned
unit development project meets Seller's
Underwriting
Guidelines with respect to such condominium or planned
unit development;
(jj)
The Assignment of Mortgage is in
recordable form and is
acceptable
for recording
under the laws of the jurisdiction in which the
Mortgaged Property is located;
(kk)
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 Mortgagor thereunder;
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<PAGE>
(ll)
Unless as set forth in
the Assignment and
Conveyance, 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 currently in effect
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;
(mm)
Except with respect to Loans which were originated using an
alternative valuation
method that is
acceptable to Fannie
Mae and
Freddie Mac, the Servicing File contains an appraisal of the
related
Mortgaged Property
which satisfied the
standards of Fannie Mae and
Freddie Mac and was
made and 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;
whose compensation is not affected by the approval or disapproval
of
the Mortgage Loan and who met the minimum qualifications of Fannie
Mae and Freddie Mac. Each appraisal of the Loan was made in
accordance with
the relevant provisions of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989;
(nn)
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 of 2003;
(oo)
The Mortgaged Property is free from any and all
toxic or hazardous
substances and there
exists no violation of any local, state or
federal environmental
law, rule or
regulation. To the
best of the
Seller's knowledge, there is no pending action or proceeding
directly involving
any Mortgaged Property of which the Seller
is
aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's
knowledge,
nothing further
remains to be done to satisfy in full all
requirements of each
such law, rule or regulation consisting a
prerequisite to use and enjoyment of said property;
(pp)
No Mortgage Loan was
made in connection with (i) the construction or
rehabilitation of a
Mortgaged Property or (ii) facilitating the
trade-in or exchange of a Mortgaged Property;
(qq)
The Mortgagor is a natural
person or a trust that
is in compliance
with Fannie Mae guidelines for such trusts;
(rr)
None of the Mortgage
Loans are classified as (i) "high cost"
loans
under the Home
Ownership and Equity
Protection Act of 1994 or (ii)
"high cost,"
"threshold,"
"predatory" or "covered" loans under any
other applicable
state, federal or local law (or a similarly
classified loan using different terminology
25
<PAGE>
under a law imposing
heightened regulatory
scrutiny or
additional
legal liability for residential mortgage loans having high
interest
rates, points and/or fees);
(ss)
No Mortgage Loan is a "High Cost Home Loan" as defined in the
Georgia Fair
Lending Act, as amended (the "Georgia Act"). No
Mortgage Loan which is
a "home loan" subject to the Georgia Act and
secured by
owner occupied real property or an owner occupied
manufactured home located in the State of Georgia was originated
(or
modified) on or after October 1, 2002 through and including March
6,
2003;
(tt)
None of the Mortgage
Loans are simple interest Mortgage Loans;
(uu) No Mortgagor was required to purchase any credit life,
disability, accident
or health insurance
product as a condition of
obtaining the
extension of credit.
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)
The Seller has
obtained a life of loan, transferable real estate Tax
Service Contract on each Mortgage Loan except for a newly
originated
Mortgage Loan on a Mortgaged Property in California;
(ww)
With respect to each
Mortgage Loan that has a prepayment penalty
feature, each such
prepayment
penalty is enforceable
and will be
enforced by the Seller, and each prepayment is permitted pursuant
to
federal, state and
local law. No Mortgage Loan will impose a
prepayment penalty for
a term in excess of five years from the date
such Mortgage Loan was originated;
(xx)
Each original
Mortgage was recorded
and, except for those
Mortgage
Loans subject to the MERS(R) system, 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;
(yy)
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;
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<PAGE>
(zz) For each Mortgage Loan, the Seller or its designee has
accurately and fully furnished, in accordance with the Fair
Credit
Reporting Act and its implementing regulations, accurate and
complete information on its borrower credit files to each of
the
following credit repositories: Equifax Credit Information
Services,
Inc., Trans Union, LLC and Experian Information Solution, Inc., on
a
monthly basis;
(aaa) The Mortgage Loan is a "qualified mortgage" within the
meaning
of Section 860G(a)(3)(A) of the Code;
(bbb) The methodology used in underwriting the extension of
credit
for each Mortgage Loan employs objective mathematical
principles
which relate to the Mortgagor's income, assets and liabilities
to
the proposed payment and such underwriting methodology does not
rely
on the extent of the Mortgagor's equity in the collateral as
the
principal determining factor in approving such credit
extension.
Such underwriting methodology confirmed that at the time of
origination (application/approval) the Mortgagor had a
reasonable
ability to make timely payments on the Mortgage Loan;
(ccc) No Mortgagor was encouraged or required to select a
Mortgage
Loan product offered by the Seller or, to the best of Seller's
knowledge, a third party originator which is a higher cost
product
designed for less creditworthy borrowers, unless at the time of
the
Mortgage Loan's origination, such Mortgagor did not qualify
taking
into account credit history and debt to income ratios for a
lower
cost credit product then offered by the Mortgage Loan's
originator
or any affiliate of the Mortgage Loan's originator;
(ddd) With respect to any Mortgage Loan which is a Texas Home
Equity
Loan, any and all requirements of Section 50, Article XVI of
the
Texas Constitution applicable to Texas Home Equity Loans which
were
in effect at the time of the origination of the Mortgage Loan
have
been complied with. Specifically, without limiting the generality
of
the foregoing, any fees paid in connection with such Mortgage
Loan
in order for the Mortgagor to receive a reduced interest rate
are
not required to be included in the calculation of the aggregate
fees
pursuant to Section 50(a)(6)(E) of the Texas Constitution;
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<PAGE>
(eee) No Mortgage Loan is a "High-Cost Home Loan" as defined in
New
York Banking Law 6-1;
(fff) No Mortgage Loan is a "High-Cost Home Loan" as defined in
the
Arkansas Home Loan Protection Act effective July 16, 2003 (Act
1340
of 2003);
(ggg) No Mortgage Loan is a "High-Cost Home Loan" as defined in the
Kentucky high-cost home loan statute effective June 24, 2003
(Ky.
Rev. Stat. Section 360.100);
(hhh) No Mortgage Loan is a "High-Cost Home Loan" as defined in
the
New Jersey Home Ownership Act effective November 27, 2003
(N.J.S.A.
46:10B-22 et seq.);
(iii) No
Mortgage Loan is a "High-Cost Home Loan" as defined in the
New Mexico Home Loan Protection Act effective January 1, 2004
(N.M.
Stat. Ann. Sections. 58-21A-1 et seq.);
(jjj) No Mortgage Loan is a "High-Risk Home Loan" as defined in
the
Illinois High-Risk Home Loan Act effective January 1, 2004 (815
Ill.
Comp. Stat. 137/1 et seq.);
(kkk) All points and fees related to each Mortgage Loan were
disclosed in writing to the borrower in accordance with
applicable
state and federal law and regulation. Except in the case of a
Mortgage Loan in an original principal amount of less than
$60,000
which would have resulted in an unprofitable origination, no
borrower was charged "points and fees" (whether or not financed)
in
an amount
greater than 5% of the principal amount of such loan, such
5% limitation is calculated in accordance with Fannie Mae's
anti-predatory lending requirements as set forth in the Fannie
Mae
Selling Guide;
(lll) The Mortgage Note, the
Mortgage, the Assignment of Mortgage
and any other documents required to be delivered for the
Mortgage
Loan by the Seller under this Agreement as set forth in Exhibit
H
attached hereto have been delivered to the Custodian. The Seller
is
in possession of a complete, true and accurate Mortgage File in
compliance with Exhibit A, except for such documents the
originals
of which have been delivered to the Custodian; and
(mmm) The documents, instruments and agreements submitted for
loan
underwriting were not falsified by the Seller or, by any other
party
and contain no
28
<PAGE>
untruestatement 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. 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. The term of this
representation shall expire five (5) years following the
related
Closing Date.
Section 6.02 Representations and Warranties Regarding Seller.
Seller
hereby represents and warrants to Purchaser as of the Closing
Date:
(a)
Seller is duly
organized,
validly existing and in good standing
under the laws of Delaware and is and will remain in compliance
with
the laws of each state in which any Mortgaged Property is located
to
the extent necessary to ensure the enforceability of each Mortgage
Loan and the servicing of the Mortgage Loan in accordance with the
terms of this Agreement. Seller has all licenses necessary
to carry
on its business as now being conducted;
(b)
Seller has power
and authority to execute and deliver this Agreement
and to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of
transfer
to be delivered
pursuant to this Agreement) by Seller and the
consummation of the transactions contemplated hereby have been
duly
and validly authorized; this Agreement evidences the
valid, binding
and enforceable obligation of Seller, subject to applicable law;
and
all requisite corporate action has been taken by Seller to make
this
Agreement valid and
binding upon Seller in accordance with its
terms;
(c)
No approval of
the transactions
contemplated by this Agreement from
any federal or state regulatory authority having jurisdiction over
Seller is required or, if required, such approval has been or
will,
prior to the related Closing Date, be obtained;
(d)
The consummation
of the transactions
contemplated by this Agreement
are in the ordinary course of business of Seller and will not
result
in the breach of any term or provision of the charter or
by-laws of
Seller
or result in the breach of any term or provision of, or
conflict with or
constitute
a default under or result in the
acceleration of any obligation under, any agreement, indenture or
loan or credit
agreement or other instrument to which Seller or its
property is subject,
or result in the
violation of any law,
rule,
regulation, order,
judgment or decree to which Seller or its
property is subject;
(e) The transfer, assignment and conveyance of the Mortgage Notes
and
the Mortgage
Loans by Seller
pursuant to this
Agreement are not
subject to the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction;
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<PAGE>
(f)
There is no
action, suit, proceeding or investigation pending or, to
the best knowledge
of Seller,
threatened
against Seller which,
either individually
or in the aggregate, would result in any
material adverse
change in the business, operations, financial
condition, properties
or assets of Seller, or in any material
impairment of the
right or ability of Seller to carry on its
business substantially
as now conducted 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 Seller contemplated
herein, or which would materially impair the
ability of Seller to perform under the terms of this Agreement;
(g)
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 is not
undertaken to
hinder, delay or defraud any of the
Seller's creditors;
(h)
The Seller is an approved seller/servicer of conventional
residential mortgage
loans for Fannie Mae
or Freddie Mac, with 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
in good standing to sell mortgage loans to and
service mortgage
loans for Fannie Mae
or Freddie Mac, and no event
has occurred,
including but not limited to a change in
insurance
coverage, which would
make the Seller unable
to comply with Fannie
Mae or Freddie Mac
eligibility
requirements or which would require
notification to either Fannie Mae or Freddie Mac;
(i)
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution,
delivery
and performance
by the Seller of or
compliance by the
Seller with
this Agreement or the sale of the Mortgage Loans as evidenced by
the
consummation of the transactions contemplated by this Agreement,
or
if required, such
approval has been
obtained prior to the
related
Closing Date;
(j)
The Mortgage
Loans were
selected from among
the fixed rate 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 Section 6.01 could be made and such selection was not made
in a manner
so as to affect adversely the interests of the
Purchaser;
(k) Neither this Agreement nor
any statement,
report or other
document
furnished or to be
furnished pursuant to this Agreement or in
connection with the
transactions
contemplated hereby
contains any
untrue statement of
fact or omits to state a fact necessary to make
the statements contained therein not misleading;
(l)
The Seller has
determined that the disposition of the Mortgage Loans
pursuant to this
Agreement will be
afforded sale treatment for
accounting and tax purposes;
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<PAGE>
(m)
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;
(n)
There
has been no
change in the
business, operations, financial
condition, properties
or assets of the Seller since the date of the
Seller's most recent financial statements that would have a
material
adverse effect on its ability to perform its obligations
under this
Agreement;
(o)
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;
(p)
The Seller's
decision to originate
any mortgage loan or to deny any
mortgage loan
application is an
independent
decision based upon
Seller's 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; and
(q)
The Seller acknowledges and agrees that the Servicing Fee, as
calculated at
the Servicing Fee Rate, 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.
Section 6.03 Remedies
for Breach of Representations and Warranties.
It is
understood and agreed
that the
representations and
warranties set
forth in Sections 6.01 and 6.02 shall
survive delivery of
the Mortgage Loans to
Purchaser and shall inure to the benefit of Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination of any Mortgage
File.
Upon
discovery by either Seller or Purchaser of a breach of any of
the
foregoing representations and warranties
which materially and adversely affects
the value of the Mortgage Loans or the interest of Purchaser (or which
materially and adversely affects the interest of Purchaser in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan), the party
discovering such
breach shall give prompt
written notice to the others. Purchaser agrees to give written
notice of any
such breach, outlining with specificity the section of this Agreement which
Purchaser claims has been violated. Within sixty (60) days of the earlier
of
either discovery by it or notice to it of
any such breach,
Seller shall use its
best efforts to promptly cure such breach
in all material
respects and, if such
breach cannot be cured during such sixty (60) day
period, Seller shall, at
Purchaser's option and not later than 120
days after its discovery or receipt of
notice of such breach, repurchase such
Mortgage Loan at the Repurchase Price. In
the event of a breach of the representation
and warranty set forth in Section
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<PAGE>
6.01(jj), the Seller will cure (by providing
an original Assignment of Mortgage
in blank, with original signatures) within three (3) business days of
Seller's
receipt of notification of such breach or
will promptly repurchase such Mortgage
Loan at the Repurchase Price.
In the
event that any such
breach shall
involve any
representation
or
warranty set forth in Section 6.02, and
such breach cannot be cured within sixty
(60) days of the earlier of either discovery by or notice to Seller of such
breach, all the Mortgage Loans shall, at
Purchaser's option, be
repurchased by
Seller at the Repurchase Price. However, if the breach shall involve a
representation or warranty set forth in
Section 6.01 and the Seller discovers or
receives notice of such breach within 120
days of the related Closing Date, the
Seller may, at its option and assuming that Seller has a Qualified
Substitute
Mortgage Loan, rather than repurchase any Mortgage Loan as provided above,
remove such Mortgage Loan and substitute in its place a Qualified
Substitute
Mortgage Loan or Loans, provided, however
