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Exhibit 99.10(b)
EXECUTION COPY
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FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
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MORGAN STANLEY MORTGAGE CAPITAL INC.,
Purchaser
NEW CENTURY MORTGAGE CORPORATION,
Seller
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Dated as of November 1, 2005
Conventional,
Fixed and Adjustable Rate Residential Mortgage Loans
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TABLE OF CONTENTS
Page
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SECTION 1.
DEFINITIONS...................................................1
SECTION 2. AGREEMENT TO
PURCHASE........................................15
SECTION 3. MORTGAGE
SCHEDULES...........................................15
SECTION 4. PURCHASE
PRICE...............................................16
SECTION 5. EXAMINATION OF MORTGAGE
FILES................................16
SECTION 6. CONVEYANCE FROM SELLER TO
PURCHASER..........................17
SECTION 7. SERVICING OF THE MORTGAGE
LOANS..............................19
SECTION 8. TRANSFER OF
SERVICING........................................19
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR BREACH..................................22
SECTION 10.
CLOSING......................................................41
SECTION 11. CLOSING
DOCUMENTS............................................42
SECTION 12.
COSTS........................................................43
SECTION 13. COOPERATION OF SELLER WITH A
RECONSTITUTION..................43
SECTION 14. THE
SELLER...................................................45
SECTION 15. FINANCIAL
STATEMENTS.........................................46
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY
INTEREST...............46
SECTION 17.
NOTICES......................................................47
SECTION 18. SEVERABILITY
CLAUSE..........................................47
SECTION 19.
COUNTERPARTS.................................................48
SECTION 20. GOVERNING
LAW................................................48
SECTION 21. INTENTION OF THE
PARTIES.....................................48
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE
AGREEMENT.....48
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SECTION 23.
WAIVERS......................................................49
SECTION 24.
EXHIBITS.....................................................49
SECTION 25. GENERAL INTERPRETIVE
PRINCIPLES..............................49
SECTION 26. REPRODUCTION OF
DOCUMENTS....................................49
SECTION 27. FURTHER
AGREEMENTS...........................................50
SECTION 28. RECORDATION OF ASSIGNMENTS OF
MORTGAGE.......................50
SECTION 29. NO
SOLICITATION..............................................50
SECTION 30. WAIVER OF TRIAL BY
JURY......................................50
SECTION 31. SUBMISSION TO JURISDICTION;
WAIVERS..........................51
SECTION 32. COMPLIANCE WITH REGULATION
AB................................51
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EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B [RESERVED]
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER AND
ORIGINATOR
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
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FLOW MORTGAGE LOAN
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PURCHASE AND WARRANTIES AGREEMENT
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This FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of November 1, 2005, by and between Morgan
Stanley
Mortgage Capital Inc., a New York corporation, having an office at
1585
Broadway, 2nd Floor, New York, New York 10036 (the "Purchaser") and
New
Century Mortgage Corporation, a California corporation, having an
office at
18400 Von Karman, Suite 1000, Irvine, CA 92612 (the "Seller").
W I T N E S S E T H:
WHEREAS, 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, certain conventional fixed and adjustable rate residential
first-lien
and second-lien mortgage loans (the "Mortgage Loans") on a
servicing released
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, each Mortgage Loan is secured by a mortgage, deed of
trust or other security instrument creating a first lien or
second-lien on a
residential dwelling located in the jurisdiction indicated on the
Mortgage
Loan Schedule for the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the
manner
of the conveyance, servicing by the Interim Servicer and control of
the
Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage
Loans to one
or more purchasers as a whole loan transfer or a public or private,
rated or
unrated mortgage Securitization Transaction.
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
and the Seller 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 Practices: With respect to any Mortgage
Loan,
those mortgage servicing practices of prudent mortgage lending
institutions
which service mortgage loans of the same type as such Mortgage Loan
in the
jurisdiction where the related Mortgaged Property is located and
incorporating
the Delinquency Collection Policies and Procedures.
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Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
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
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 Flow Mortgage Loan Purchase and Warranties
Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Ancillary Income: All late charges, assumption fees, escrow
account benefits, reinstatement fees, and similar types of fees
arising from
or in connection with any Mortgage, to the extent not otherwise
payable to the
Mortgagor under applicable law or pursuant to the terms of the
related
Mortgage Note.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the
value of
the Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection
6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice
of
transfer or equivalent instrument in recordable form, sufficient
under the
laws of the jurisdiction wherein the related Mortgaged Property is
located to
reflect the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original
terms or any modifications thereof provides for amortization beyond
its
scheduled maturity date.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii)
a
day on which banking and savings and loan institutions, in the
State of New
York or the State in which the Originator's servicing operations
are located
or (iii) the state in which the Custodian's operations are located,
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
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incidental cash to the related Mortgagor of more than 1% of the
original
principal balance of such Mortgage Loan.
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.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding
principal
balance of the Second Lien Loan and (ii) the outstanding principal
balance as
of such date of any mortgage loan or mortgage loans that are senior
or equal
in priority to the Second Lien Loan and which are secured by the
same
Mortgaged Property to (b) the Appraised Value as determined
pursuant to the
Underwriting Guidelines of the related Mortgaged Property as of
the
origination of the Second Lien Loan.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange
Commission.
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.
Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage
Loan purchased pursuant to this Agreement which contains a
provision whereby
the Mortgagor is permitted to convert the Adjustable Rate Mortgage
Loan to a
Fixed Rate Mortgage Loan in accordance with the terms of the
related Mortgage
Note.
Covered Loan: A Mortgage Loan categorized as Covered pursuant
to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and
maintained pursuant to Section 2.04 of the Servicing Agreement
(with respect
to each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) 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: Deutsche Bank Trust Company Americas, or the
Custodian's successor in interest or permitted assigns, 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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Deleted Mortgage Loan: A Mortgage Loan that is 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: The date specified in the Servicing
Agreement
(with respect to each Mortgage Loan, for an interim period, as
specified
therein).
Due Date: The day of the month 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 commencing on the day immediately succeeding the
Due Date for
such Mortgage Loan occurring in the month preceding the month of
the
Remittance Date and ending on the next Due Date.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used
to
refinance an existing mortgage loan, the proceeds of which were in
excess of
the outstanding principal balance of the existing mortgage
loan.
Escrow Account: The separate account created and maintained
pursuant to Section 2.06 of the Servicing Agreement (with respect
to each
Mortgage Loan, as specified therein).
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.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Fannie Mae: Fannie Mae, f/k/a 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.
Fannie Mae Transfer: As defined in Section 13 hereof.
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.
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FHA Approved Mortgagee: A corporation or institution approved as
a
mortgagee by the FHA under the Act, and applicable HUD regulations,
and
eligible to own and service mortgage loans such as the FHA mortgage
loans.
First Lien Loan: A Mortgage Loan secured by a first lien
Mortgage
on the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: Freddie Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Freddie Mac Transfer: As defined in Section 13 hereof.
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.
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 FHA Mortgage Insurance. 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.
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Insurance Proceeds: With respect to each Mortgage Loan,
proceeds
of insurance policies insuring the Mortgage Loan or the related
Mortgaged
Property.
Insured Depository Institution: Insured Depository Institution
shall have the meaning ascribed to such term by Section 1813(c)(2)
of Title 12
of the United States Code, as amended from time to time.
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.
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 terms
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 Lifetime Rate Cap set forth as an
amount per
annum on the related Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the
Originator generally originates Mortgage Loans principally on the
basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the
creditworthiness of
the Mortgagor.
Liquidation Proceeds: Cash 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.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan,
the
ratio (expressed as a percentage) of the outstanding principal
amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise
indicated), to
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.
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 Standards adopted on July
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 Mortgagor or may be on leased land.
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Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Moody's Investors Service, Inc., and any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument
securing
a Mortgage Note, which creates a first lien, in the case of a First
Lien Loan,
or a second lien, in the case of a Second Lien Loan, on an
unsubordinated
estate in fee simple in real property securing the Mortgage Note;
except that
with respect to real property located in jurisdictions in which the
use of
leasehold estates for residential properties is a widely-accepted
practice,
the mortgage, deed of trust or other instrument securing the
Mortgage Note may
secure and create, with respect to a First Lien Loan, a first lien,
and with
respect to a Second Lien Loan, a second lien, in each case, upon a
leasehold
estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage
Loan
referred to in Exhibit A annexed hereto, and any additional
documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment
as set
forth in 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 applicable Mortgage Loan
Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the
Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds,
Insurance Proceeds, Servicing Rights 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: The documents required to be delivered
to
the Custodian pursuant to Subsection 6.03 hereof with respect to
any Mortgage
Loan.
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 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
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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 LTV
or CLTV, as
applicable, 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) whether the
Mortgage Loan
has Monthly Payments that are interest-only for a period of time,
and the
interest-only period, if applicable (and with respect to each
Second Lien
Loan, whether the related first lien mortgage loan has monthly
payments that
are interest-only for a period of time, and the interest-only
period, if
applicable); (16) the last payment date on which a payment was
actually
applied to the outstanding principal balance; (17) the schedule of
the payment
delinquencies in the prior 12 months; (18) the Servicing Fee Rate;
(19) the
original principal amount of the Mortgage Loan; (20) 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; (21) 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, at origination, (22) a code indicating
whether
there is a simultaneous second; (23) with respect to Adjustable
Rate Mortgage
Loans, the Interest Rate Adjustment Date; (24) with respect to
Adjustable Rate
Mortgage Loans, the Gross Margin; (25) with respect to Adjustable
Rate
Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note;
(26) 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; (27) the product type of Mortgage
Loan (i.e.,
Fixed Rate, Adjustable Rate, First Lien Loan or Second Lien Loan),
and with
respect to each Second Lien Loan, the product type of the related
first lien
loan; (28) a code indicating the purpose of the loan (i.e.,
purchase,
Rate/Term Refinance or Cash-Out Refinance); (29) a code indicating
the
documentation style (i.e. no documents, full, alternative, reduced,
no
income/no asset, stated income, no ration, reduced or NIV); (30)
asset
verification (Y/N); (31) the loan credit classification (as
described in the
Underwriting Guidelines); (32) whether such Mortgage Loan provides
for a
Prepayment Penalty; (33) the Prepayment Penalty period of such
Mortgage Loan,
if applicable; (34) a description of the Prepayment Penalty, if
applicable;
(35) the Mortgage Interest Rate as of origination; (36) the credit
risk score
(FICO score); (37) the date of origination; (38) with respect to
Adjustable
Rate Mortgage Loans, the Mortgage Interest Rate adjustment period;
(39) with
respect to Adjustable Rate Mortgage Loans, the Mortgage Interest
Rate
adjustment percentage; (40) with respect to Adjustable Rate
Mortgage Loans,
the Mortgage Interest Rate floor; (41) the Mortgage Interest Rate
calculation
method (i.e., 30/360, simple interest, other); (42) with respect to
Adjustable
Rate Mortgage Loans, the Periodic Rate Cap as of the first Interest
Rate
Adjustment Date; (43) with respect to each Adjustable Rate Mortgage
Loan, a
code indicating whether the Mortgage Loan provides for negative
amortization;
(44) a code indicating whether the Mortgage Loan has negative
amortization and
the maximum of such negative amortization; (45) a code indicating
whether the
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Mortgage Loan is a Balloon Mortgage Loan; (46) a code indicating
whether the
Mortgage Loan by its original terms or any modifications thereof
provides for
amortization beyond its scheduled maturity date; (47) the original
Monthly
Payment due; (48) the Appraised Value; (49) appraisal type; (50)
appraisal
date; (51) a code indicating whether the Mortgage Loan is covered
by a PMI
Policy and, if so, identifying the PMI Policy provider; (54) 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 note or other evidence of the indebtedness of
a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
real
property (or leasehold estate, if applicable) securing repayment of
the debt
evidenced by the related Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Non-Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage Loan purchased pursuant to this Agreement which does not
contain a
provision pursuant to which the Mortgagor may convert the
Adjustable Rate
Mortgage Loan to a Fixed Rate Mortgage Loan.
Nonrecoverable Advance: Any advance previously made or proposed
to
be made in respect of a Mortgage Loan which, in the good faith
judgment of the
Originator, will not or, in the case of a proposed advance, would
not, be
ultimately recoverable from related Insurance Proceeds, Liquidation
Proceeds
or otherwise. The determination by the Originator that it has made
a
Nonrecoverable Advance or that any proposed advance of principal
and interest,
if made, would constitute a Nonrecoverable Advance, shall be
evidenced by an
Officers' Certificate delivered to the Purchaser.
OCC: Office of the Comptroller of the Currency, and any
successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of
the
Board or the Vice Chairman of the Board or a President or a Vice
President and
by the Treasurer or the
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Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the
Seller, and delivered to the Purchaser as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Seller, 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 any servicer of the
Mortgage
Loans or in an Affiliate of either and (iii) is not connected with
the Seller
or any servicer of the Mortgage Loans as an officer, employee,
director or
person performing similar functions.
Originator: New Century Mortgage Corporation, its successors in
interest and assigns.
Periodic Rate Cap: The provision of each Mortgage Note related
to
an Adjustable Rate Mortgage Loan which provides for an absolute
maximum amount
by which the Mortgage Interest Rate therein may increase or
decrease on an
Interest Rate Adjustment Date 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.
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.
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 or premium 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.
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Purchase Price and Terms Agreement: Those certain agreements
setting forth the general terms and conditions of the transactions
consummated
herein and identifying the Mortgage Loans to be purchased from time
to time
hereunder, by and between the Seller, the Originator and the
Purchaser.
Purchaser: Morgan Stanley Mortgage Capital Inc., or its
successor
in interest or assigns or any successor to the Purchaser under this
Agreement
as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller
or
the Originator, who had no interest, direct or indirect, in the
Mortgaged
Property or in any loan made on the security thereof, 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 the Financial Institutions Reform,
Recovery, and
Enforcement Act of 1989 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 Insurer: An insurance company duly qualified as such
under the laws of the states in which the Mortgaged Properties are
located,
duly authorized and licensed in such states to transact the
applicable
insurance business and to write the insurance provided, approved as
an insurer
by Fannie Mae and Freddie Mac and whose claims paying ability is
rated in the
highest rating category by any of the Rating Agencies with respect
to primary
mortgage insurance and in the two highest rating categories by
Best's with
respect to hazard and flood insurance (or such other rating as may
be required
by a Rating Agency in connection with a Securitization Transaction
in order to
achieve the desired ratings for the securities to be issued in
connection with
such Securitization Transaction).
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, (i) have an outstanding principal balance,
after
deduction of all scheduled payments due in the month of
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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 outstanding 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 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 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 Caps); and (v) comply with
each
representation and warranty (respecting individual Mortgage Loans)
set forth
in Section 9 hereof.
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.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's,
or
their respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer or a Securitization
Transaction.
Reconstitution Agreements: The agreement or agreements entered
into by the Seller and/or the Originator and the Purchaser and/or
certain
third parties on the Reconstitution Date or Dates with respect to
any or all
of the Mortgage Loans sold hereunder, in connection with a Whole
Loan
Transfer, Agency Transfer or a Securitization Transaction pursuant
to Section
13, including, but not limited to, a seller's warranties and
servicing
agreement with respect to a Whole Loan Transfer, and a pooling and
servicing
agreement and/or seller/servicer agreements and related
custodial/trust
agreement and documents with respect to a Securitization
Transaction.
Reconstitution Date: As defined in Section 13.
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.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
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REMIC Provisions: Provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G 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 date specified in the Servicing Agreement
(with respect to each Mortgage Loan, as specified therein).
Repurchase Price: With respect to any Mortgage Loan, a price
equal
to the sum of: (i) the product of (a) par (or, with respect to any
Mortgage
Loan required to be repurchased on or prior to the first
anniversary of the
related Closing Date, the greater of (x) par and (y) the excess of
the
applicable Purchase Price Percentage over par multiplied by a
fraction equal
to (1) 360 minus the number of days from but excluding the related
Closing
Date, up through and including the date of such repurchase, divided
by (2)
360) and (b) the outstanding principal balance of such Mortgage
Loan, (ii)
accrued interest thereon at the applicable Mortgage Interest Rate
from the
last "interest paid to" date through the date of such repurchase,
(iii) the
amount of any outstanding advances owed to any servicer, and (iv)
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.
RESPA: Real Estate Settlement Procedures Act, as amended from
time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1)
a
sale or other transfer of some or all of the Mortgage Loans
directly or
indirectly to an issuing entity in connection with an issuance of
publicly
offered or privately placed, rated or unrated mortgage-backed
securities or
(2) an issuance of publicly offered or privately placed, rated or
unrated
securities, the payments on which are determined primarily by
reference to one
or more portfolios of residential mortgage loans consisting, in
whole or in
part, of some or all of the Mortgage Loans.
Seller: New Century Mortgage Corporation, its successors in
interest and assigns.
Seller Information: As defined in Subsection 32.04(a).
Servicing Agreement: The servicing agreement, dated as of
November
1, 2005, between the Purchaser and the Originator, providing for
the
Originator to service the Mortgage Loans as specified in the
Servicing
Agreement.
Servicing Fee: With respect to each Mortgage Loan subject to
the
Servicing Agreement, a fee payable monthly 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 and shall be
pro-rated
for any portion of a month during which the Mortgage Loan is
serviced by the
Originator under the Servicing Agreement. The obligation of the
Purchaser to
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pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely
from, the interest portion (including recoveries with respect to
interest from
Liquidation Proceeds, to the extent permitted by this Agreement) of
such
Monthly Payment collected by the Originator, or as otherwise
provided under
this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Originator consisting of originals of all documents
in the
Mortgage File which are not delivered to the Purchaser or the
Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the
Custodial
Agreement.
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.
Sponsor: The sponsor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
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 on any date
of
determination, (i) the principal balance of such Mortgage Loan at
the related
Cut-off Date after giving effect to payments of principal due on or
before
such date, to the extent actually received, minus (ii) all amounts
previously
distributed to the Purchaser with respect to the related Mortgage
Loan
representing payments or recoveries of principal on such Mortgage
Loan.
Static Pool Information: Static pool information as described
in
Item 1105(a)(1)-(3) and 1105(c) 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 Sections 9.03 and 14.01.
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Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Transfer Date: The date on which the Purchaser, or its
designee,
shall receive the transfer of servicing responsibilities and begin
to perform
the servicing of the Mortgage Loans with respect to the related
Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities.
Such date
shall occur on the day indicated by the Purchaser to the Seller in
accordance
with the Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the
Originator, a copy of which is attached hereto as Exhibit G and a
then-current
copy of which shall be attached as an exhibit to the related
Assignment and
Conveyance.
VA Approved Lender: Those lenders which are approved by the VA
to
act as a lender in connection with the origination of VA mortgage
loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of
a
Whole Loan Transfer.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an
aggregate
actual unpaid 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 actual unpaid principal balance of the Mortgage Loans
accepted by
the Purchaser on each Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the
Mortgage 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 is obligated to deliver those Mortgage Loans owned
by
the Seller and funded by the Originator pursuant to the original
terms of the
Originator's commitment to the mortgagor. 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 two (2) 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.
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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 actual
unpaid
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 actual unpaid
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
from the last
"interest paid to" date through the day immediately preceding the
related
Closing Date, inclusive, on the aggregate actual unpaid 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.
The Purchaser shall be entitled to (l) all scheduled principal
due
after the related Cut-off Date, (2) all other recoveries of
principal
collected on or after the related Cut-off Date, and (3) all
payments of
interest on the Mortgage Loans net of applicable Servicing Fees
(minus that
portion of any such payment which is allocable to the period prior
to the
related Cut-off Date). The outstanding principal balance of each
Mortgage Loan
as of the related Cut-off Date is determined after application of
payments of
principal due on or before the related Cut-off Date, to the extent
actually
collected, together with any unscheduled principal prepayments
collected prior
to such Cut-off Date; provided, however, that payments of scheduled
principal
and interest paid prior to such Cut-off Date, but to be applied on
a Due Date
beyond the related Cut-off Date shall not be applied to the
principal balance
as of the related Cut-off Date. Such prepaid amounts shall be the
property of
the Purchaser. The Seller shall deposit any such prepaid amounts
into the
Custodial Account, which account is established for the benefit of
the
Purchaser for subsequent remittance by the Seller to the
Purchaser.
SECTION 5. Examination of Mortgage Files.
At least three (3) Business Days prior to the related Closing
Date, the Seller shall (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 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
are unacceptable to the Purchaser for any reason, such Mortgage
Loans shall be
deleted from the related Mortgage Loan Schedule, and 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
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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 affect the Purchaser's (or any of
its
successor's) rights to demand repurchase, substitution or other
relief as
provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing Files.
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 H (the "Assignment
and
Conveyance Agreement"). The Seller shall cause the Servicing File
retained by
the Originator pursuant to this Agreement to be appropriately
identified in
the Seller's computer system and/or books and records, as
appropriate, to
clearly reflect the sale of the related Mortgage Loan to the
Purchaser. The
Seller shall cause the Originator to release from its custody the
contents of
any Servicing File retained by it only in accordance with this
Agreement or
the Servicing Agreement, except when such release is required in
connection
with a repurchase of any such Mortgage Loan pursuant to Subsection
9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the related Closing Date
shall
be in the name of the Seller, an Affiliate of the Seller, the
Purchaser or one
or more designees of the Purchaser, as the Purchaser shall
select.
Notwithstanding the foregoing, each Mortgage and related Mortgage
Note shall
be possessed solely by 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 Seller or
the
Originator after the related Cut-off Date on or in connection with
a Mortgage
Loan shall be vested in the Purchaser or one or more designees of
the
Purchaser; provided, however, that all funds received on or in
connection with
a Mortgage Loan shall be received and held by the Seller or the
Originator 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.
The sale of each Mortgage Loan shall be reflected on the
Seller's
balance sheet and other financial statements as a sale of assets by
the
Seller.
The Seller shall or shall cause the Originator to be
responsible
for maintaining, and shall maintain, a complete set of books and
records for
each Mortgage Loan which shall be marked clearly to reflect the
ownership of
each Mortgage Loan by the Purchaser. In particular, the Seller
shall or shall
cause the Originator to maintain in its possession, available for
inspection
by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of
compliance with all federal, state and local laws, rules and
regulations, and
requirements of Fannie Mae or Freddie Mac, including but not
limited to
documentation as to the method used in determining the
applicability of the
provisions of the National Flood Insurance Act of 1968, as amended,
to the
Mortgaged Property, documentation evidencing insurance coverage and
periodic
inspection
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reports, as required by the Fannie Mae Guides. To the extent that
original
documents are not required for purposes of realization of
Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Seller or
Originator may be
in the form of microfilm or microfiche so long as the Seller or
Originator
complies with the requirements of the Fannie Mae Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later
than three (3) Business Days prior to the related Closing Date
those Mortgage
Loan Documents set forth on Exhibit A hereto as required by the
Custodial
Agreement with respect to each Mortgage Loan set forth on the
related Mortgage
Loan Schedule.
The Custodian shall certify its receipt of all such Mortgage
Loan
Documents required to be delivered pursuant to the Custodial
Agreement for the
related Closing Date, as evidenced by the Initial Certification of
the
Custodian in the form annexed to the Custodial Agreement. The
Seller shall
comply with the terms of the Custodial Agreement and the Purchaser
shall pay
all fees and expenses of the Custodian.
The Seller shall or shall cause the Originator to forward to
the
Custodian, or to such other Person as the Purchaser shall designate
in
writing, original documents evidencing an assumption,
modification,
consolidation or extension of any Mortgage Loan entered into in
accordance
with this Agreement within two weeks of their execution, provided,
however,
that the Seller shall provide the Custodian, or to such other
Person as the
Purchaser shall designate in writing, with a certified true copy of
any such
document submitted for recordation within two weeks of 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 ninety
days of
its submission for recordation.
In the event any document required to be delivered to the
Custodian in the Custodial Agreement, including an original or copy
of any
document submitted for recordation to the appropriate public
recording office,
is not so delivered to the Custodian, or to such other Person as
the Purchaser
shall designate in writing, within 90 days following the related
Closing Date
(other than with respect to the Assignments of Mortgage which shall
be
delivered to the Custodian in blank and recorded subsequently by
the Purchaser
or its designee), and in the event that the Seller does not cure
such failure
within 30 days of discovery or receipt of written notification of
such failure
from the Purchaser, 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 9.03. The foregoing repurchase obligation
shall not
apply in the event that the Seller cannot deliver an original
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 the Seller 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 Seller,
confirming that such documents have been accepted for recording;
provided
that, upon request of the Purchaser and delivery by the Purchaser
to the
Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue
and deliver to the Purchaser or its designee said officer's
certificate.
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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
Mortgage and
shall be reimbursed by the Seller for the costs associated
therewith pursuant
to the preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Originator to, have an
internal quality control program that verifies, on a regular basis,
the
existence and accuracy of the legal documents, credit documents,
property
appraisals, and underwriting decisions. The program shall include
evaluating
and monitoring the overall quality of the Originator's loan
production and the
servicing activities of the Originator. The program is to ensure
that the
Mortgage Loans are originated and serviced in accordance with
Accepted
Servicing Standards and the Underwriting Guidelines; guard against
dishonest,
fraudulent, or negligent acts; and guard against errors and
omissions by
officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the
Purchaser
on a servicing released basis. Subject to, and upon the terms and
conditions
of this Agreement and the Servicing Agreement (with respect to each
Mortgage
Loan, for an interim period, as specified therein), the Seller
hereby sells,
transfers, assigns, conveys and delivers to the Purchaser the
Servicing
Rights. The Purchaser shall retain the Originator as independent
contract
servicer of the Mortgage Loans pursuant to and in accordance with
the terms
and conditions contained in the Servicing Agreement. Pursuant to
the Servicing
Agreement, the Originator shall begin servicing the Mortgage Loans
on behalf
of the Purchaser and shall be entitled to the Servicing Fee and any
Ancillary
Income with respect to such Mortgage Loans from the related Closing
Date until
the termination of the Servicing Agreement with respect to any of
the Mortgage
Loans as set forth in the Servicing Agreement. The Seller shall
cause the
Originator to service the Mortgage Loans in accordance with the
terms of the
Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its
designee,
shall assume all servicing responsibilities related to, and the
Seller shall
cause the Originator to cease all servicing responsibilities
related to the
related Mortgage Loans subject to such Transfer Date. The Transfer
Date shall
be the date determined in accordance with Section 6.03 of the
Servicing
Agreement (with respect to each Mortgage Loan, for an interim
period, as
specified therein).
On or prior to the applicable Transfer Date, the Seller shall
cause the Originator shall, at its sole cost and expense, take such
steps as
may be necessary or appropriate to effectuate and evidence the
transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its
designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall cause the Originator
to
mail to the Mortgagor of each related Mortgage Loan a letter
advising such
Mortgagor of the transfer of the
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servicing of the related Mortgage Loan to the Purchaser, or its
designee, in
accordance with the Cranston Gonzales National Affordable Housing
Act of 1990;
provided, however, the content and format of the letter shall have
the prior
approval of the Purchaser. The Seller shall cause the Originator to
provide
the Purchaser with copies of all such related notices no later than
the
Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The
Seller shall cause the Originator to transmit to the applicable
taxing
authorities and insurance companies (including primary mortgage
insurance
policy insurers, if applicable) and/or agents, notification of the
transfer of
the servicing to the Purchaser, or its designee, and instructions
to deliver
all notices, tax bills and insurance statements, as the case may
be, to the
Purchaser from and after the related Transfer Date. The Seller
shall cause the
Originator to provide the Purchaser with copies of all such notices
no later
than such Transfer Date.
(c) Delivery of Servicing Records. The Seller shall cause the
Originator to forward to the Purchaser, or its designee, all
servicing records
and the Servicing File in the Originator's possession relating to
each related
Mortgage Loan including the information enumerated in the Servicing
Agreement
(with respect to each such Mortgage Loan, for an interim period, as
specified
therein).
(d) Escrow Payments. The Seller shall cause the Originator to
provide the Purchaser, or its designee, with immediately available
funds by
wire transfer in the amount of the net Escrow Payments and suspense
balances
and all loss draft balances associated with the related Mortgage
Loans. The
Seller shall cause the Originator to provide the Purchaser with an
accounting
statement of Escrow Payments and suspense balances and loss draft
balances
sufficient to enable the Purchaser to reconcile the amount of such
payment
with the accounts of the Mortgage Loans. Additionally, the Seller
shall cause
the Originator to wire transfer to the Purchaser the amount of any
agency,
trustee or prepaid Mortgage Loan payments and all other similar
amounts held
by the Originator.
(e) Payoffs and Assumptions. The Seller shall cause the
Originator
to provide to the Purchaser, or its designee, copies of all
assumption and
payoff statements generated by the Originator on the related
Mortgage Loans
from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to
the Transfer Date all payments received by the Originator on each
related
Mortgage Loan shall be properly applied by the Originator to the
account of
the particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The Seller
shall cause the amount of any related Monthly Payments received by
the
Originator after the Transfer Date to be forwarded to the Purchaser
by
overnight mail on the date of receipt. The Seller shall cause the
Originator
to notify the Purchaser of the particulars of the payment, which
notification
requirement shall be satisfied if the Originator forwards with its
payment
sufficient information to permit appropriate processing of the
payment by the
Purchaser. The Seller shall cause the Originator to assume full
responsibility
for the necessary and appropriate legal application of such Monthly
Payments
received by the Originator after the Transfer Date with respect to
related
Mortgage Loans then in foreclosure or bankruptcy; provided, for
purposes of
this Agreement,
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necessary and appropriate legal application of such Monthly
Payments shall
include, but not be limited to, endorsement of a Monthly Payment to
the
Purchaser with the particulars of the payment such as the account
number,
dollar amount, date received and any special Mortgagor
application
instructions and the Seller shall comply with the foregoing
requirements with
respect to all Monthly Payments received by the it after the
Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed
as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and discovered
after such Transfer Date shall immediately notify the other
party;
(3) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment
has
resulted in a shortage in a Custodial Account or Escrow
Account,
the Seller shall or the Seller shall cause the Originator to be
liable for the amount of such shortage. The Seller shall or the
Seller shall cause the Originator to reimburse the Purchaser
for
the amount of such shortage within thirty (30) days after
receipt
of written demand therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the
result
of an inaccurate outstanding principal balance, a check shall
be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section
8(h) shall be accompanied by a statement indicating the
corresponding Seller and/or the Purchaser Mortgage Loan
identification number and an explanation of the allocation of
any
such payments.
(i) Books and Records. On the Transfer Date, the books, records
and accounts of the Originator with respect to the related Mortgage
Loans
shall be in accordance with all applicable Purchaser
requirements.
(j) Reconciliation. The Seller shall or shall cause the
Originator
to, on or before the Transfer Date, reconcile principal balances
and make any
monetary adjustments required by the Purchaser. Any such monetary
adjustments
will be transferred between the Seller, the Originator and the
Purchaser as
appropriate.
(k) IRS Forms. The Seller shall or shall cause the Originator
to
file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are
required to be
filed on or before the Transfer Date in relation to the servicing
and
ownership of the related Mortgage Loans. The Seller or Originator
shall
provide copies of such forms to the Purchaser upon request and
shall
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reimburse the Purchaser for any costs or penalties incurred by the
Purchaser
due to the Seller's or Originator's failure to comply with this
paragraph.
SECTION 9. Representations, Warranties and Covenants of the
Seller; Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser
that as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation
duly organized, validly existing and in good standing under the
laws of the
state of California and has all licenses necessary to carry on its
business as
now being conducted and is licensed, qualified and in good standing
in each
state wherein it owns or leases any material properties or where a
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, and in any event the Seller is in compliance with the laws
of any such
state to the extent necessary to ensure the enforceability of the
related
Mortgage Loan and the servicing of such Mortgage Loan in accordance
with the
terms of this Agreement and the Servicing Agreement; the Seller has
the full
corporate power, authority and legal right to hold, transfer and
convey the
Mortgage Loans and to execute and deliver this Agreement and to
perform its
obligations hereunder and thereunder; the execution, 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 and thereby have been duly and
validly
authorized; this Agreement and all agreements contemplated hereby
have been
duly executed and delivered and constitute the valid, legal,
binding and
enforceable obligations of the Seller, regardless of whether such
enforcement
is sought in a proceeding in equity or at law; and all requisite
corporate
action has been taken by the Seller to make this Agreement and all
agreements
contemplated hereby valid and binding upon the Seller in accordance
with their
terms;
(b) 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;
(c) 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 and thereby, 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
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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;
(d) Ability to Service. Originator has the facilities,
procedures,
and experienced personnel necessary for the sound servicing of
mortgage loans
of the same type as the Mortgage Loans. The Originator 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 each jurisdiction wherein the
Mortgaged
Properties are located;
(e) Reasonable Servicing Fee. The Originator 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 Originator, for accounting and tax purposes, as compensation
for the
servicing and administration of the Mortgage Loans pursuant to this
Agreement
and the Servicing Agreement;
(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) 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;
(h) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court
or
governmental agency or body including HUD, the FHA or the
Department of
Veterans Affairs is required for the execution, delivery and
performance by
the Seller of or compliance by the Seller with this Agreement or
the Mortgage
Loans, the delivery of a portion of the Mortgage Files to the
Custodian or the
sale of the Mortgage Loans or the consummation of the
transactions
contemplated by this Agreement, or if required, such approval has
been
obtained prior to the related Closing Date;
(i) 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
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Date as to which the representations and warranties set forth in
Subsection
9.02 could be made and such selection was not made in a manner so
as to affect
adversely the interests of the Purchaser;
(j) 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 A
hereto, except for such documents as will be delivered to the
Custodian;
(k) 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 11 on the related Closing Date in the form attached as
Exhibit B to
each related Assignment and Conveyance Agreement;
(l) 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;
(m) Financial Statements. 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
requested by the Purchaser in a timely manner and in accordance
with the
provided instructions;
(n) 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;
(o) Sale Treatment. The Seller intends to reflect the transfer
of
the Mortgage Loans as a sale on the books and records of the Seller
and the
Seller has determined that the
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<PAGE>
disposition of the Mortgage Loans pursuant to this Agreement will
be afforded
sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note,
except for the
Assignments of Mortgage which have been sent for recording, and
upon
recordation the Seller will be the owner of record of each Mortgage
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
with respect thereto in trust only for the purpose of servicing
and
supervising the servicing of each Mortgage Loan;
(q) Origination. The Originator's decision to originate any
mortgage loan or to deny any mortgage loan application is an
independent
decision based upon Originator'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;
(r) Compliance with 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"); and
(s) Credit Reporting. The Seller shall cause the Originator, as
servicer, to fully furnish, 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. Additionally, the Seller shall cause the
Originator, as
servicer, to transmit full-file credit reporting data for each
Mortgage Loan
pursuant to Fannie Mae Guide Announcement 95-19 and that for each
Mortgage
Loan, the Seller shall cause the Originator, as servicer, to report
one of the
following statuses each month as follows: new origination, current,
delinquent
(30-, 60-, 90-days, etc.), foreclosed, or charged-off.
Subsection 9.02 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, other than payments not yet 30 days delinquent, 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.
The first
Monthly Payment shall be made with respect to the Mortgage Loan on
its related
Due Date or within the grace period, all in accordance with the
terms of the
related Mortgage Note;
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<PAGE>
(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
assumption agreement, approved by the issuer of any related PMI
Policy and the
issuer of 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 and no
such right of rescission, set-off, counterclaim or defense has been
asserted
with respect thereto, and no Mortgagor was a debtor in any state or
Federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan
was
originated;
(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 Fannie
Mae Guides
or by Freddie Mac, as well as all additional requirements set forth
in Section
2.10 of the Servicing Agreement. If required by the National Flood
Insurance
Act of 1968, as amended, each Mortgage Loan is covered by a flood
insurance
polic
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