<PAGE>
EXECUTION COPY
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FLOW MORTGAGE LOAN
SALE AND SERVICING AGREEMENT
between
BANK OF AMERICA, N.A.,
as Seller and as Servicer,
and
LEHMAN BROTHERS BANK, FSB,
as Purchaser
August 1, 2004
Performing, Conventional, Residential Mortgage Loans
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<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1.
DEFINITIONS...................................................
1
SECTION 2. PURCHASE AND
CONVEYANCE....................................... 13
SECTION 3. MORTGAGE LOAN
SCHEDULE........................................ 14
SECTION 4. PURCHASE
PRICE................................................ 14
SECTION 5. EXAMINATION OF MORTGAGE
FILES................................. 14
SECTION 6. DELIVERY OF MORTGAGE LOAN
DOCUMENTS........................... 14
Subsection 6.01 Possession
of Mortgage Files.......................... 14
Subsection 6.02 Books and
Records..................................... 15
Subsection 6.03 Delivery of
Mortgage Loan Documents................... 15
SECTION 7. REPRESENTATIONS, WARRANTIES AND
COVENANTS; REMEDIES FOR
BREACH...................................................................
16
Subsection 7.01
Representations and Warranties Regarding Individual
Mortgage Loans........................................ 16
Subsection 7.02 Seller and
Servicer Representations................... 26
Subsection 7.03 Remedies for
Breach of Representations and
Warranties............................................ 28
SECTION 8. CLOSING
CONDITIONS............................................ 30
SECTION 9. CLOSING
DOCUMENTS............................................. 31
Subsection 9.01 Initial
Closing Date.................................. 31
Subsection 9.02 Subsequent
Closing Dates.............................. 31
SECTION 10.
COSTS........................................................
32
SECTION 11. ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS .............. 32
Subsection 11.01 Servicer to
Act as Servicer; Subservicing............ 32
Subsection 11.02 Liquidation
of Mortgage Loans........................ 34
Subsection 11.03 Collection
of Mortgage Loan Payments................. 34
Subsection 11.04
Establishment of Custodial Account; Deposits in
Custodial Account.................................... 34
Subsection 11.05 Withdrawals
From the Custodial Account............... 36
Subsection 11.06
Establishment of Escrow Account; Deposits in Escrow
Account.............................................. 37
Subsection 11.07 Withdrawals
From Escrow Account...................... 38
Subsection 11.08 Payment of
Taxes, Insurance and Other Charges;
Collections Thereunder............................... 38
Subsection 11.09 Transfer of
Accounts................................. 39
Subsection 11.10 Maintenance
of Hazard Insurance...................... 39
Subsection 11.11 Maintenance
of Primary Mortgage Insurance Policy;
Claims............................................... 40
Subsection 11.12 Fidelity
Bond; Errors and Omissions Insurance........ 40
Subsection 11.13 Title,
Management and Disposition of REO Property.... 41
Subsection 11.14 Servicing
Compensation............................... 42
Subsection 11.15
Distributions........................................ 42
Subsection 11.16 Statements
to the Purchaser.......................... 43
Subsection 11.17 Advances by
the Servicer............................. 43
Subsection 11.18 Assumption
Agreements................................ 44
Subsection 11.19
Satisfaction of Mortgages and Release of Mortgage
Files................................................ 44
Subsection 11.20 Annual
Statement as to Compliance.................... 45
Subsection 11.21 Annual
Independent Public Accountants' Servicing
Report............................................... 45
Subsection 11.22 Servicer
Shall Provide Access and Information as
Reasonably Required.................................. 45
Subsection 11.23 Restoration
of Mortgaged Property.................... 46
Subsection 11.24 Master
Servicer...................................... 46
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Page
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Subsection 11.25 Fair Credit
Reporting Act............................ 46
Subsection 11.26 Compliance
with Safeguarding Customer Information
Requirements......................................... 47
SECTION 12. THE
SERVICER.................................................
47
Subsection 12.01
Indemnification; Third Party Claims.................. 47
Subsection 12.02 Merger or
Consolidation of the Servicer.............. 47
Subsection 12.03 Limitation
on Liability of the Servicer and Others... 48
Subsection 12.04 Seller and
Servicer Not to Resign.................... 48
SECTION 13.
DEFAULT......................................................
48
Subsection 13.01 Events of
Default.................................... 48
Subsection 13.02 Waiver of
Default.................................... 50
SECTION 14.
TERMINATION..................................................
50
Subsection 14.01
Termination.......................................... 50
Subsection 14.02 Termination
of the Servicer Without Cause............ 50
Subsection 14.03 Successors
to the Servicer........................... 51
SECTION 15.
NOTICES......................................................
52
SECTION 16. SEVERABILITY
CLAUSE.......................................... 52
SECTION 17. NO
PARTNERSHIP...............................................
53
SECTION 18.
COUNTERPARTS.................................................
53
SECTION 19. GOVERNING
LAW................................................ 53
SECTION 20. INTENTION OF THE
PARTIES..................................... 53
SECTION 21.
WAIVERS......................................................
54
SECTION 22.
EXHIBITS.....................................................
54
SECTION 23. GENERAL INTERPRETIVE
PRINCIPLES.............................. 54
SECTION 24. REPRODUCTION OF
DOCUMENTS.................................... 54
SECTION 25.
AMENDMENT....................................................
55
SECTION 26.
CONFIDENTIALITY..............................................
55
SECTION 27. ENTIRE
AGREEMENT............................................. 55
SECTION 28. FURTHER AGREEMENTS;
TRANSFERS................................ 56
SECTION 29. SUCCESSORS AND
ASSIGNS....................................... 56
SECTION 30.
NON-SOLICITATION.............................................
57
SECTION 31. PROTECTION OF CONSUMER
INFORMATION........................... 58
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EXHIBITS
EXHIBIT 1 MORTGAGE LOAN
DOCUMENTS
EXHIBIT 2 CONTENTS OF EACH
MORTGAGE FILE
EXHIBIT 3 UNDERWRITING
GUIDELINES
EXHIBIT 4 FORM OF SELLER'S AND
SERVICER'S OFFICER'S CERTIFICATE
EXHIBIT 5 FORM OF LOST NOTE
AFFIDAVIT
EXHIBIT 6 FORM OF MONTHLY
REMITTANCE REPORT
EXHIBIT 7 FORM OF ACKNOWLEDGMENT
AND CONVEYANCE AGREEMENT
EXHIBIT 8 FORM OF CERTIFICATION
TO BE PROVIDED BY THE SERVICER
EXHIBIT 9 FORM OF OPINION OF
COUNSEL
EXHIBIT 10 FORM OF CUSTODIAL ACCOUNT
CERTIFICATION
EXHIBIT 11 FORM OF ESCROW ACCOUNT
CERTIFICATION
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FLOW MORTGAGE LOAN
SALE AND SERVICING AGREEMENT
THIS FLOW
MORTGAGE LOAN SALE AND
SERVICING AGREEMENT
(the "Agreement"),
dated August 1, 2004, is hereby
executed by and
between LEHMAN
BROTHERS BANK,
FSB, a federally chartered savings bank, as purchaser (the
"Purchaser"),
and
BANK OF AMERICA, N.A., a national banking
association, as seller
(the "Seller")
and as servicer (the "Servicer").
WITNESSETH:
WHEREAS,
the Seller has agreed
to sell from time to time to the Purchaser,
and the Purchaser has agreed to purchase from time to time from the
Seller,
certain performing, conventional, residential, first lien mortgage loans (the
"Mortgage Loans") as described herein on a
servicing-retained
basis, and which
shall be delivered as whole loans as
provided herein; and
WHEREAS, the
Mortgage Loans will be sold by the Seller and purchased by the
Purchaser as pools or groups of whole loans, servicing retained (each, a
"Mortgage Loan Package") on the various
Closing Dates as provided herein; and
WHEREAS, each of
the Mortgage Loans will be secured by a mortgage, deed of
trust or other security instrument creating a first lien on a residential
dwelling located in the jurisdiction indicated on the related
Mortgage Loan
Schedule which will be annexed to an
Acknowledgment and Conveyance Agreement (as
defined herein) on the related Closing
Date; and
WHEREAS,
the Purchaser,
the Seller and the
Servicer wish to prescribe the
manner of the conveyance, servicing and
control of the Mortgage Loans;
NOW, THEREFORE,
in consideration of
the premises and mutual agreements set
forth herein, and for other good and valuable
consideration,
the receipt and
sufficiency of which are hereby
acknowledged, the
Purchaser, the Seller and the
Servicer agree as follows:
SECTION 1.
DEFINITIONS.
For purposes of
this Agreement, the
following capitalized terms shall have
the respective meanings set forth
below.
Acknowledgment
and Conveyance
Agreement: The
agreement,
substantially in
the form of Exhibit 7 hereto, to be prepared by the Purchaser and executed by
the Seller and the Purchaser on each
Closing Date.
Adjustable
Rate Mortgage Loan: A Mortgage Loan that
contains a provision
pursuant to which the Mortgage Interest
Rate is adjusted periodically.
Adjustment
Date: As to each
Adjustable
Rate Mortgage
Loan, the date on
which the Mortgage Interest Rate is
adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.
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Agency Transfer:
An exchange of the Mortgage Loans for agency securities.
Agreement: This
Mortgage Loan Sale and Servicing Agreement including all
exhibits, schedules, amendments and
supplements hereto.
ALTA: The
American Land Title Association.
Appraised Value:
With respect to any Mortgaged Property, the lesser of (i)
the value thereof as determined by a Qualified Appraiser at the time of
origination of the Mortgage Loan, and (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor
with the proceeds of
the Mortgage
Loan; provided, however, that in the case of a Refinanced
Mortgage Loan, such
value of the Mortgaged Property is based solely upon the
value determined by an
appraisal made for the originator of such
Refinanced
Mortgage Loan at the
time
of origination of such Refinanced Mortgage
Loan by a Qualified Appraiser.
Assignment
and Assumption: An assignment and assumption of
the Custodial
Agreement, prepared by the Purchaser and executed by the Seller and the
Purchaser on each Closing Date,
assigning all of the
Purchaser's rights as
the
"Servicer" thereunder to the Servicer.
Assignment of
Mortgage: An individual assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable
form and in blank,
sufficient
under the laws of the jurisdiction in which the related
Mortgaged Property is
located to give record notice of the sale
of the Mortgage to the Purchaser.
Balloon Mortgage
Loan: Any Mortgage Loan which by its original terms or any
modifications thereof provides for amortization
beyond its scheduled
maturity
date.
BPO: A broker's
price opinion with respect to a Mortgaged Property.
Business
Day: Any day other than a Saturday or
Sunday, or a day on
which
banking and savings and loan institutions
in the state in which (i) the Servicer
is located or (ii) the Custodial Account is maintained are authorized or
obligated by law or executive order to be
closed.
Closing Date:
The date or dates,
set forth in the
related
Acknowledgment
and Conveyance Agreement and/or Purchase
Price and Terms Agreement, on which the
Purchaser will purchase and the Seller will
sell the Mortgage
Loans identified
therein.
CLTA: The
California Land Title Association.
Code:
The Internal
Revenue Code of 1986, as amended, or any successor
statute thereto.
Condemnation
Proceeds: All awards,
compensation and settlements in respect
of a taking (whether permanent or temporary) of all or part of a Mortgaged
Property by exercise of the power of condemnation or the right of eminent
domain, to the extent not required to be
released to a Mortgagor in accordance
with the terms of the related Mortgage Loan
Documents.
Consumer
Information: Information including but not limited to all
personal
information about the Mortgagors that is
supplied to the Seller by or on behalf
of the Mortgagors.
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Convertible
Mortgage Loan: An Adjustable Rate Mortgage Loan that by its
terms and subject to certain conditions allows the Mortgagor to convert the
adjustable Mortgage Interest Rate thereon
to a fixed Mortgage Interest Rate.
Cooperative
Corporation: The
entity that holds title (fee or an acceptable
leasehold estate) to the real property and improvements constituting the
Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a
Cooperative Housing Corporation under
Section 216 of the Code.
Cooperative
Loan: Any Mortgage Loan secured by
Cooperative
Shares and a
Proprietary Lease.
Cooperative Loan
Documents: With
respect to any Cooperative Loan, (i) the
Cooperative Shares, together with a stock power in blank;
(ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of
the Recognition
Agreement
(or a blanket assignment of all Recognition
Agreements)
endorsed in blank;
(v)
the executed UCC-1 financing statement with
evidence of recording thereon, which
has been filed in all places required to perfect the
security interest in the
Cooperative Shares and the Proprietary
Lease; and (vi) the Seller's executed
UCC-3 financing statements (or copies thereof) or other appropriate UCC
financing statements required by state law, evidencing
a complete and unbroken
chain of title from the mortgagee to the Seller with evidence of recording
thereon (or in a form suitable for
recordation).
Cooperative
Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual
dwelling
units to the holders of the Cooperative
Shares of the Cooperative Corporation.
Cooperative
Shares: Shares issued by a Cooperative Corporation.
Cooperative
Unit: A single family dwelling located in a Cooperative
Property.
Custodial
Account: As defined in Subsection 11.04.
Custodial
Account Certification: As defined in Subsection 11.04.
Custodial
Agreement: That certain Custodial Agreement between Purchaser
and
Custodian dated as of September 1,
1999.
Custodian: U.S.
Bank Trust National Association, or any successor under the
Custodial Agreement.
Customary
Servicing
Procedures:
Procedures
(including
collection
procedures) that the Servicer customarily
employs and exercises in servicing and
administering mortgage loans for its own account that are similar to the
Mortgage Loans and which are in
accordance
with accepted
mortgage servicing
practices of prudent lending institutions
and the Fannie Mae Guides.
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Cut-off
Date: With respect to each Mortgage Loan, the first day of the
month of the related Closing Date as set
forth in the related Acknowledgment and
Conveyance Agreement and/or the related
Purchase Price and Terms Agreement.
Cut-off Date
Principal Balance:
The aggregate Stated
Principal Balance of
the Mortgage Loans as of the related
Cut-off Date which is determined after the
application, to the reduction of principal,
of payments of
principal due on or
before the related Cut-off Date, whether or not collected, and of Principal
Prepayments received before the related
Cut-off Date.
Deleted
Mortgage Loan: A Mortgage Loan replaced or to be replaced
with a
Substitute Mortgage Loan in accordance with
this Agreement.
Determination
Date: With respect to each Remittance Date, the 15th day (or,
if such 15th day is not a Business Day, the
following Business Day) of the month
in which such Remittance Date occurs.
Due Date: With respect to each Remittance Date, the first day of the
calendar month in which such Remittance
Date occurs,
which is the day on
which
the Monthly Payment is due on a Mortgage
Loan, exclusive of any days of grace.
Due Period:
With respect to each
Remittance Date, 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 of the
Remittance Date.
Eligible
Investments:
Any one or more of the following obligations or
securities:
(i) obligations
of or guaranteed as to principal and interest by
Freddie
Mac, Fannie Mae or any agency or instrumentality of the United
States when such
obligations are backed by the full faith and credit of the
United States;
provided, however, that such obligations of
Freddie Mac or
Fannie
Mae shall be limited to senior debt obligations and mortgage
participation
certificates
except that
investments in
mortgage-backed or
mortgage
participation
securities
with
yields evidencing extreme
sensitivity to
the rate of principal
payments on the underlying mortgages
shall not
constitute Eligible Investments hereunder;
(ii) repurchase
agreements
on obligations specified in clause (i)
maturing not
more than one month from the date of acquisition thereof;
(iii) federal funds,
certificates of deposit, demand deposits, time
deposits
and bankers' acceptances (which shall each have an original
maturity
of not more than
ninety (90) days and, in the case of bankers'
acceptances,
shall in no event have
an original maturity
of more than 365
days or a
remaining maturity of
more than thirty (30) days) denominated in
United States
dollars of any United States depository institution or trust
company
incorporated
under the laws of the United States or any state
thereof or of
any domestic branch of
a foreign depository
institution or
trust
company;
(iv) commercial paper (having original maturities of not more than
365
days) of any
corporation
incorporated under the
laws of the United States
or any state
thereof
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which is rated
not lower than "P-2" by Moody's Investors Service, Inc. and
rated not lower
than "A-2" by Standard & Poor's Ratings Service, a division
of The
McGraw-Hill Companies, Inc.; and
(v) a money market fund;
provided, however, that no instrument shall be an Eligible Investment if it
represents, either (1) the right to receive
only interest payments with respect
to the underlying debt instrument or (2)
the right to receive both principal and
interest payments derived from obligations underlying such instrument and
the
principal and interest with respect to such instrument provide a yield to
maturity greater than 120% of the yield to maturity
at par of such
underlying
obligations.
Escrow Account:
As defined in Subsection 11.06.
Escrow Account
Certification: As defined in Subsection 11.06.
Escrow Payments:
The amounts constituting ground rents, taxes, assessments,
Primary Mortgage Insurance Policy premiums (if
any), fire and hazard insurance
premiums, flood insurance premiums, condominium charges and other
payments as
may be required to be escrowed by the
Mortgagor with the
Mortgagee pursuant
to
the terms of any Mortgage Note or
Mortgage.
Event of
Default: Any one of the conditions or circumstances enumerated in
Subsection 13.01.
Fannie Mae:
The entity
formerly known as 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 thereto.
Fidelity
Bond: The fidelity bond required to be obtained by
the Servicer
pursuant to Subsection 11.12.
FIRREA: The
Financial Institutions Reform, Recovery, and Enforcement Act of
1989, as amended and in effect from time to
time.
First Remittance
Date: With respect to each Mortgage Loan Package, the 18th
day (or if such 18th day is not a Business
Day, the Business Day immediately
following such 18th day) of the month
following the related Closing Date.
Freddie Mac: The
entity formerly
known as the Federal
Home Loan Mortgage
Corporation or any successor thereto.
Freddie Mac
Guide: The Freddie Mac Single Family Seller/Servicer Guide and
all amendments or additions thereto.
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GAAP: Generally
accepted accounting principles consistently applied.
Gross Margin:
With respect to each Adjustable Rate Mortgage Loan, the fixed
percentage amount set forth in each related
Mortgage Note and Mortgage which is
added to the Index in order to determine
the related Mortgage Interest Rate.
Index:
With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the
related Mortgage
Note for the purpose of calculating
interest thereon.
Initial Rate
Cap: As to each
Adjustable Rate
Mortgage Loan,
the maximum
increase or decrease in the Mortgage
Interest Rate on the
first Adjustment Date
as provided in the related Mortgage
Note.
Insurance
Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage
Loan or the related Mortgaged Property.
Lifetime Rate
Cap: As to each
Adjustable Rate
Mortgage Loan, the
maximum
Mortgage Interest Rate which shall be as permitted in accordance with the
provisions of the related Mortgage
Note.
Liquidation
Proceeds: The proceeds received in connection with the
liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than amounts received
following the acquisition of REO
Property, Insurance Proceeds and
Condemnation Proceeds.
Loan-to-Value
Ratio: With respect to any Mortgage
Loan as of any date
of
determination, the ratio, expressed as a
percentage, the
numerator of which is
the outstanding principal balance of the Mortgage Loan at
origination (or on
such date, if a current Loan-to-Value Ratio is being calculated), and the
denominator of which is the Appraised Value
of the related Mortgaged Property.
LTV:
Loan-to-Value Ratio.
Monthly Payment:
With respect to any
Mortgage Loan, the scheduled payment
of principal and interest payable by a
Mortgagor under the related Mortgage Note
on each Due Date, which such payment may change on any Adjustment Date as
provided in the related Mortgage Note and Mortgage for any Adjustable Rate
Mortgage Loan.
Mortgage: With
respect to any Mortgage Loan that is not a Cooperative Loan,
the mortgage, deed of trust or other
instrument
creating a first lien
on the
Mortgaged Property securing the Mortgage
Note and, with respect to a Cooperative
Loan, the related Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the items listed in
Exhibit 2 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, including, but not limited to,
the limitations on such interest rate imposed by the Initial
Rate Cap, the
Periodic Rate Cap/Floor and the Lifetime
Rate Cap, if any.
Mortgage Loan:
Each mortgage loan sold, assigned and transferred
pursuant
to this Agreement and identified on the Mortgage Loan
Schedule annexed to
the
related Acknowledgment and Conveyance
Agreement, including,
without limitation,
the Mortgage File, the Monthly Payments, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds,
Insurance Proceeds,
REO Disposition Proceeds,
and all other rights, benefits, proceeds and obligations arising from or in
connection with such mortgage loan.
Mortgage Loan
Documents:
With respect to any
Mortgage Loan, the documents
listed in Exhibit 1 hereto.
Mortgage
Loan Package: The pool or group of whole loans
purchased on a
Closing Date, as described in the Mortgage
Loan Schedule annexed
to the related
Acknowledgment and Conveyance
Agreement.
Mortgage
Loan Remittance Rate: With respect to any Mortgage
Loan, the
annual rate of interest payable to the Purchaser, which shall be equal to the
related Mortgage Interest Rate minus the
related Servicing Fee Rate.
Mortgage Loan
Schedule: With respect to each Mortgage Loan Package,
the
schedule of Mortgage Loans annexed to the
related Acknowledgment
and Conveyance
Agreement (and delivered in electronic
format to the
Purchaser), setting
forth
the following information with respect to each Mortgage
Loan: (1) the Seller's
Mortgage Loan identifying number; (2) the Mortgagor's and
Co-Mortgagor's
(if
applicable) names; (3) the street address
of the Mortgaged
Property,
including
the city, state, zip code, county, lot
number, block number
and section number;
(4) a code indicating whether the Mortgaged Property is a single family
residence, a 2 family dwelling, a 3-4 family dwelling,
a manufactured home,
a
planned unit development, a townhouse, a unit in a condominium project, a
Cooperative Property, a mixed-use property,
land, or a non-residential property;
(5) a code indicating the loan is a fixed
rate or Adjustable Rate Mortgage Loan
(to be provided in accordance with Standard and Poor's loan type
requirements-Field 14); (6) product description (to be provided in accordance
with Standard and Poor's description
categories-Field 7);
(7) a code indicating
the lien status of the Mortgage Loan; (8)
the original months to maturity or the
remaining months to maturity from the 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; (9) the LTV at
origination; (10) the combined LTV at
origination; (11) the
Mortgage Interest
Rate as of the Cut-off Date; (12) the payment and rate
adjustment
frequencies
(if applicable); (13) the Index (if applicable);
(14) the initial
Adjustment
Date (if applicable); (15) the initial payment
Adjustment Date (if applicable);
(16) the next interest rate Adjustment Date (if applicable); (17) the next
payment Adjustment Date (if applicable);
(18) the Gross Margin
(if applicable);
(19) the minimum Mortgage Interest Rate
under the terms of the Mortgage Note (if
applicable); (20) Mortgage Interest Rate
adjustment frequencies (if applicable);
(21) the maximum Mortgage Interest Rate
under the terms of the Mortgage Note (if
applicable); (22) the Mortgage Interest
Rate adjustment cap at the
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<PAGE>
initial interest rate Adjustment Date (if applicable); (23) the Mortgage
Interest Rate adjustment cap at all
subsequent interest
rate Adjustment
Dates
(if applicable); (24) the Lifetime Rate Cap (if
applicable); (25) the
rounding
provisions under the terms of the Mortgage Note (if applicable); (26) the
lookback provisions (# of days) under the terms of the Mortgage Note (if
applicable); (27) negative amortization indicator and limit; (28) the date
on
which the first payment is due; (29) the original term of the Mortgage Loan;
(30) the stated maturity date; (31) the
amount of the Monthly Payment; (32) the
annual payment cap expressed as a
percentage (for Adjustable Rate Mortgage Loans
only); (33) the next due date as of the Cut-off Date; (34) the original
principal amount of the Mortgage Loan; (35)
the senior and subordinate balances
(if applicable); (36) the closing date of the
Mortgage Loan; (37) the principal
balance of the Mortgage Loan as of the close of business
on the Cut-off
Date;
after deduction of payments of principal actually received on or before the
Cut-off Date; (38) monthly payment
histories on current
and prior mortgages (24
months if available); (39) prior foreclosure
history (for the past
24 months);
(40) prior bankruptcy history (for the past 24 months);
(41) the loan
purpose
code; (42) the occupancy code; (43) the
loan documentation type, (to be provided
in conformance with Standard and Poor's
documentation
categories - Field
5);
(44) asset verification (purchase money loans only),
(yes or no); (45) a
code
indicating the credit grade of the Mortgage
Loan; (46) the debt to income ratio;
(47) the Mortgagor's and co-Mortgagor's (if
applicable) social security numbers;
(48) the Mortgagor's and co-Mortgagor's (if
applicable) original
FICO score and
the next generation FICO score for new
credit scores; (49)
the date of the FICO
score; (50) the Mortgagor's mailing address if different from
number (3) above;
(51) the Mortgagor's home telephone number; (52) the Mortgagor's business
telephone number; (53) the purchase price of the Mortgaged Property (if a
purchase); (54) the Appraisal date and the Appraised Value of the Mortgaged
Property; (55) the Mortgagor's and
co-Mortgagor's (if applicable) race; (56) the
Mortgagor's and co-Mortgagor's (if
applicable) gender;
(57) the Mortgagor's and
co-Mortgagor's (if applicable) date of
birth; (58) the number of bedrooms; (59)
rental income per unit; (60) the combined annual income; (61) the application
date; (62) the broker's name; (63) the
broker's firm name; (64) the appraiser's
name; (65) the appraiser's firm name; (66) the settlement agent; (67) the
origination channel (wholesale, retail, or
correspondent); (68)
flood insurance
contract provider; (69) tax service contract
provider; (70) number of units;
(71) as of date; (72) amortization term; (73) balloon flag; (74) prepayment
penalty flag; (75) prepayment penalty term and prepayment
penalty description
(i.e., 6 months interest, set percentage of UPB); (76)
payment history current
loan; (77) payment history previous loan
and all refinanced loans; (78) mortgage
insurance provider, or code for LPMI; (79) mortgage insurance coverage
percentage; (80) mortgage insurance cost; (81)
mortgage insurance
certificate
number; (82) number of borrowers; (83)
first time home buyer flag; (84) the year
in which the Mortgaged Property was built; (85) the monthly tax and
insurance
payment; (86) the monthly servicing fee; (87) the escrow balance as of the
Cut-off Date; (88) the MIN number assigned
to each Mortgage Loan, if applicable;
(89) a code indicating the Appraisal Type
(Tax Assessment,
BPO, Drive-By Form
704, URAR, Form 2065, Form 2055 (Exterior only), Form 2055 (Interior
Inspection), or AVM; (90) if the Appraisal Type in #89 is an AVM, then a
description of the AVM type; (91) a code
indicating
whether the
borrower(s) is
self-employed (yes or no); (92) a section
32 flag and the origination points and
or fees; (93) a code indicating if a loan is assumable
(yes or no); (94)
code
indicating whether the borrower's assets were
verified; (95) a code
indicating
whether the loan is a high cost or covered loan under applicable
state/jurisdiction anti-predatory lending laws; and
(96) Annual Percentage Rate
(APR). With respect to the Mortgage Loans
on the
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Mortgage Loan Schedule in the aggregate, the Mortgage Loan Schedule
shall set
forth the following information, as of the Cut-off Date: (i) the number of
Mortgage Loans; (ii) the Cut-off Date Principal Balance; (iii) the weighted
average Mortgage Interest Rate of the Mortgage
Loans; (iv) the weighted average
months to maturity of the Mortgage
Loans; (v) with respect to each
Adjustable
Rate Mortgage Loan, the weighted average Lifetime Rate Cap; and (vi) with
respect to each Adjustable Rate Mortgage Loan, the weighted average Gross
Margin.
Mortgage Note:
The original executed note or other evidence of the Mortgage
Loan indebtedness of a Mortgagor.
Mortgaged
Property: With respect to each Mortgage Loan that is not a
Cooperative Loan, the Mortgagor's real
property securing
repayment of a related
Mortgage Note, consisting of an unsubordinated estate in fee simple or, with
respect to real property located in jurisdictions in which
the use of leasehold
estates for residential properties is a widely accepted
practice, a leasehold
estate, in a single parcel or multiple
parcels of real
property improved by
a
Residential Dwelling. With respect to each Cooperative Loan, the Cooperative
Shares allocated to a Cooperative Unit in
the related
Cooperative
Corporation
that were pledged to secure such
Cooperative
Loan and the related
Proprietary
Lease.
Mortgagee:
The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or
beneficiary.
Mortgagor: The
obligor on a Mortgage Note, who is an owner of the Mortgaged
Property and the grantor or mortgagor
named in the Mortgage
and such grantor's
or mortgagor's successors in title to the
Mortgaged Property.
NAIC: The
National Association of Insurance Commissioners or any successor
organization.
Officer's
Certificate:
A certificate signed
by the Chairman of the Board,
the Vice Chairman of the Board, a President
or a Vice President of the Person on
behalf of whom such certificate is being
delivered.
Opinion of
Counsel: A written opinion of counsel, who may be an employee
of
the Seller or the Servicer, reasonably
acceptable to the Purchaser.
OTS: The Office
of Thrift Supervision or any successor thereto.
Owner: As
defined in Subsection 11.13.
P&I Advance:
As defined in Subsection 11.17.
Periodic Rate
Cap/Floor:
As to each
Adjustable
Rate Mortgage
Loan, the
maximum increase or decrease in the
Mortgage Interest
Rate, on any
Adjustment
Date as provided in the related Mortgage
Note.
9
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Person:
An individual, corporation, partnership, joint venture,
association, joint-stock
company,
limited
liability
company,
trust,
unincorporated organization or government
or any agency or political subdivision
thereof.
Primary Mortgage
Insurance Policy: A policy of primary
mortgage guaranty
insurance issued by an insurer acceptable
to Fannie Mae or Freddie Mac.
Principal
Prepayment:
Any payment or other recovery of principal on a
Mortgage Loan which is received in advance
of its scheduled Due Date that 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.
Proprietary
Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of
related
Cooperative Shares.
Purchase Price:
The price paid on the related Closing Date by the Purchaser
to the Seller pursuant to this Agreement in exchange for the Mortgage Loans
included in the related Mortgage Loan
Package, as calculated pursuant to Section
4 and the related Purchase Price and Terms
Agreement.
Purchase
Price and Terms
Agreement:
With respect to each purchase of a
Mortgage Loan Package hereunder, that certain letter agreement by and between
the Seller and the Purchaser, prepared by the Purchaser
substantially identical
to the form delivered in connection
with the purchase and
sale of the Mortgage
Loans on the initial Closing Date hereunder, setting forth the general
terms,
conditions and portfolio characteristics for each Mortgage Loan Package to
be
purchased hereunder as of the related
Closing Date.
Purchase
Price Percentage: For each Mortgage Loan included in
a Mortgage
Loan Package, the percentage of par set forth in
the related Purchase Price and
Terms Agreement that is used to calculate
the Purchase
Price of the
Mortgage
Loans included in such Mortgage Loan
Package.
Purchaser:
The Person listed as such in the initial paragraph of this
Agreement, together with its successors and
assigns as permitted under the terms
of this Agreement.
Qualified
Appraiser: An appraiser of a Mortgaged Property duly appointed
by
the originator of the related
Mortgage Loan, who had no interest, direct or
indirect, in such Mortgaged Property or in any loan made on the security
thereof, whose compensation is not affected by the approval or
disapproval of
the related Mortgage Loan and who met the
minimum qualifications
of Fannie Mae
or Freddie Mac and satisfied the
requirements of Title XI of FIRREA.
Qualified
Depository:
A deposit account or accounts maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the long-term
unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the long-term unsecured debt obligations of
such holding company) are rated AA by Standard
& Poor's Ratings
Group or Aa by
Moody's
10
<PAGE>
Investors Service, Inc. (or a comparable rating if another rating agency is
specified by the Purchaser by written notice to the Seller) at the time any
deposits are held on deposit therein.
Recognition
Agreement:
With respect to any
Cooperative Loan, an agreement
between the related Cooperative
Corporation and the
originator of such Mortgage
Loan to establish the rights of such originator in the related Cooperative
Property.
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.
Remittance
Date: The 18th day (or if such 18th day
is not a Business Day,
the first Business Day immediately following such 18th day) of any month,
beginning with the First Remittance
Date.
REO Disposition:
The final sale by the Servicer of an REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Subsection
11.13.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure,
as described in Subsection 11.13.
Repurchase
Price: With respect to any Mortgage Loan, an amount equal to
(A)
the Stated Principal Balance of such Mortgage Loan as
of the date of repurchase
plus (B) interest on such Stated Principal Balance at the Mortgage Loan
Remittance Rate from and including the last
Due Date through which interest has
been paid on behalf of the Mortgagor or advanced by the Servicer to the day
prior to such date of repurchase, less amounts received in respect of such
repurchased Mortgage Loan which are being held in the
Custodial Account for
distribution in connection with such
Mortgage Loan.
Residential
Dwelling: Any one of
the following: (i) a
detached one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family
dwelling unit in a condominium project or (iv) a one-family dwelling in a
planned unit development, except as set forth in the related
Purchase Price and
Terms Agreement, none of which is a Cooperative Property, mobile home or
manufactured home.
Securities:
The securities issued in connection with a Securitization
evidencing beneficial ownership interests
in a trust the assets of which include
the Mortgage Loans.
Securitization:
The transfer of the Mortgage Loans to a trust formed as
part of a publicly issued and/or privately placed, rated securitization,
including the issuance of the related
Securities.
Security
Agreement:
With respect to any
Cooperative
Loan, the
agreement
between the owner of the related
Cooperative
Shares and the
originator of the
related Mortgage Note that
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defines the terms of the security
interest in such
Cooperative
Shares and the
related Proprietary Lease.
Seller:
Bank of America,
N.A., a national banking association, or its
successor in interest or any successor to the Seller under this Agreement
appointed as herein provided.
Servicer:
Bank of America,
N.A., a national
banking association,
or its
successor in interest or any successor to the Servicer under this Agreement
appointed as herein provided.
Servicing
Advances: All customary, reasonable and necessary
out-of-pocket
costs and expenses incurred in the performance by the
Servicer of its servicing
obligations, including, but not limited to, the cost of
(a) the
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) payments made by the Servicer with respect to a
Mortgaged Property pursuant to Subsection
11.08.
Servicing Fee:
With respect to each Mortgage Loan, the amount of the annual
fee the Purchaser shall pay to the Servicer,
which shall,
for each month,
be
equal to one-twelfth of the product of (i)
the applicable Servicing Fee Rate and
(ii) the Stated Principal Balance of such Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of the same
principal amount and period
respecting which any related interest payment on a Mortgage Loan is
computed.
The obligation of the Purchaser to pay the Servicing Fee is limited to, and
payable solely from, the interest portion
(including recoveries
with respect to
interest from Liquidation Proceeds and other proceeds,
to the extent
permitted
by Subsection 11.05) of related Monthly
Payments collected by
the Servicer, or
as otherwise provided under Subsection
11.05.
Servicing Fee
Rate: With respect to
each Mortgage Loan, the per annum rate
set forth on the related Mortgage Loan
Schedule, or if not specified thereon, in
the related Purchase Price and Terms
Agreement.
Servicing
Officer: Any officer
of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage
Loans whose name appears
on a list of servicing officers
furnished to the
Purchaser by the Servicer, as
such list may be amended from time to
time.
Standard &
Poor's: Standard &
Poor's Rating
Service, a division of the
McGraw Hill Companies, Inc., or any
successor thereto.
Stated
Principal Balance: As to each Mortgage Loan as to any date of
determination, (i) the principal balance of the Mortgage
Loan at the
related
Cut-off Date after giving effect to the principal portion of any Monthly
Payments due on or before such date,
whether or not
received, as well as any
Principal Prepayments received before such date, minus (ii) all amounts
previously distributed to the Purchaser with respect to the Mortgage Loan
representing payments or recoveries of
principal, or advances in lieu thereof.
Substitute
Mortgage Loan: A
mortgage loan
substituted by the Seller for a
Deleted Mortgage Loan which must, on the
date of such
substitution, (i) have
a
Stated Principal Balance,
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<PAGE>
after deduction of the principal portion of
the Monthly Payment due in the month
of substitution, not in excess of, and not
materially greater or less than, the
Stated Principal Balance of the Deleted
Mortgage Loan; (ii) have a Mortgage
Interest Rate, Gross Margin, Initial Rate Cap, Periodic Rate Cap/Floor and
Lifetime Rate Cap equal to that of the
Deleted Mortgage Loan; (iii) have a
Loan-to-Value Ratio not higher than that of
the Deleted Mortgage Loan; (iv) have
a remaining term to maturity not greater than (and not more
than one year less
than) that of the Deleted Mortgage Loan;
(v) comply with each representation and
warranty set forth in Subsection 7.01; (vi) be current in the payment of
principal and interest; and (vii) be
secured by a Mortgaged Property of the same
type and occupancy status as secured the
Deleted Mortgage Loan.
Transfers: As
defined in Section 28.
Underwriting
Guidelines: The underwriting guidelines of the Seller attached
hereto as Exhibit 3, as may be updated and
incorporated into Exhibit 3 from time
to time by providing such updates to the
Purchaser; provided,
however, any such
updates shall apply to the Mortgage
Loans in the related
Mortgage Loan
Package
which are subject to purchases and sales
occurring after such updates.
Whole Loan Transfer: Any sale or transfer of some or
all of the
Mortgage
Loans by the Purchaser to a third party,
which sale or transfer is not an Agency
Transfer or a Securitization.
SECTION 2.
PURCHASE AND CONVEYANCE.
On each related
Closing Date, the Seller, simultaneously with the execution
and delivery of the related Acknowledgment
and Conveyance Agreement, in exchange
for the payment of the applicable
Purchase Price by the Purchaser,
receipt of
which is hereby acknowledged, hereby sells, transfers, assigns, sets over and
conveys to the Purchaser, without recourse, but subject to the terms of
this
Agreement, all of its rights, title and
interest in and to the Mortgage Loans in
the related Mortgage Loan Package having an
aggregate principal
balance on the
related Cut-off Date in an amount as set
forth in the related Purchase Price and
Terms Agreement, or in such other amount as agreed by the
Purchaser and the
Seller as evidenced by the actual
aggregate principal balance of the Mortgage
Loan Package accepted by the Purchaser on the
related Closing
Date, together
with the related Mortgage Files and all
rights and obligations arising under the
documents contained therein.
With respect to
each Mortgage Loan
purchased, the
Purchaser shall own and
be entitled to receive: (a) all scheduled principal due after the applicable
Cut-off Date, (b) all other payments and/or
recoveries of principal collected on
or after the applicable Cut-off Date (provided, however, that all scheduled
payments of principal due on or before the
applicable Cut-off Date and collected
by the Servicer after the applicable Cut-off Date shall belong to the
Seller)
and (c) all payments of interest on the
Mortgage Loans net of
the Servicing Fee
(minus that portion of any such interest
payment that is allocable to the period
prior to the applicable Cut-off Date).
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<PAGE>
SECTION 3.
MORTGAGE LOAN SCHEDULE.
The Seller shall
deliver the Mortgage Loan Schedule (which will be annexed
to the related Acknowledgment and Conveyance Agreement) to the Purchaser at
least two (2) Business Days prior to the
related Closing Date.
SECTION 4.
PURCHASE PRICE.
The Purchase
Price shall be the
percentage of par as stated in the related
Purchase Price and Terms Agreement (subject to the adjustments as provided
therein), multiplied by the aggregate Cut-off Date Principal Balance of the
Mortgage Loans included in the related
Mortgage Loan Package, plus accrued
interest on the aggregate scheduled principal balance of the Mortgage Loan
Package at the weighted average Mortgage Loan Remittance Rate from
the related
Cut-off Date through the day immediately prior to the related Closing Date,
inclusive. The initial principal amount of the Mortgage Loans shall be the
aggregate principal balance of the Mortgage
Loans, so computed as of the related
Cut-off Date, after application of scheduled payments of principal due on
or
before the related Cut-off Date, whether or not collected. Subject to
satisfaction or waiver of the conditions set forth in Section 8 hereof, the
Purchaser shall pay the Purchase Price to
the Seller by 4:00 p.m. Eastern Time
on the related Closing Date. Such payment shall be made to the account
designated by the Seller by wire transfer
of immediately available funds.
SECTION 5.
EXAMINATION OF MORTGAGE FILES.
In addition to
any rights granted to the Purchaser hereunder to underwrite
the Mortgage Loans and review the Mortgage
Loan Documents
prior to the
related
Closing Date, the Seller shall, prior to the related Closing Date, make the
Mortgage Files available to the Purchaser for examination at the Seller's
offices. Such examination may be made by
the Purchaser or its designee, at its
expense, at any reasonable time before the related Closing Date. Such
underwriting by the Purchaser or its designee
shall not impair or
diminish the
rights of the Purchaser or any of its successors under this Agreement with
respect to a breach of the representations and warranties contained in this
Agreement. 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 successors' rights to demand
repurchase or other relief or remedy
provided for in this Agreement.
SECTION 6.
DELIVERY OF MORTGAGE LOAN DOCUMENTS.
Subsection 6.01
Possession of Mortgage Files.
The contents of
each Mortgage File
required to be retained by the Servicer
to service the Mortgage Loans pursuant to this Agreement
and thus not delivered
to the Purchaser or its designee are and
shall be held in trust by the Servicer
for the benefit of the Purchaser as the
owner thereof. The Servicer's possession
of any portion of each such Mortgage File is at the will of the
Purchaser for
the sole purpose of facilitating servicing of the Mortgage
Loans pursuant to
this Agreement, and such retention and possession
by the Servicer shall be in a
custodial capacity
14
<PAGE>
only. The ownership of each Mortgage
Note, each Mortgage and the contents
of
each Mortgage File is vested in the Purchaser
and the ownership of all records
and documents with respect to the related
Mortgage Loan prepared by or which
come into the possession of the Servicer
shall immediately vest in the Purchaser
and shall be retained and maintained, in trust, by the Servicer at the
will of
the Purchaser in such custodial capacity
only. The Mortgage File retained by the
Servicer with respect to each Mortgage Loan
pursuant to this Agreement shall be
appropriately identified in the Servicer's
computer system to reflect clearly
the ownership of such related Mortgage Loan
by the Purchaser. The Servicer shall
release from its custody the contents of
any Mortgage File
retained by it
only
in accordance with this Agreement, except when such release is required in
connection with a repurchase of any such Mortgage Loan pursuant to
Subsection
7.03 of this Agreement or if required under
applicable law or
court order. The
Servicer shall deliver to the Purchaser copies of any documents in a
Mortgage
File reasonably requested by the Purchaser
within two (2) days after the date of
such request at the expense of the
Purchaser.
Subsection 6.02
Books and Records.
All rights
arising out of the Mortgage Loans including, but not limited
to,
all funds received by the Servicer
after the Cut-off Date
on or in
connection
with a Mortgage Loan as provided in Section
2 shall be vested in the Purchaser;
provided, however, that all such funds received on or in connection with a
Mortgage Loan as provided in Section 2 shall be received and held by the
Servicer in trust for the benefit of the
Purchaser as the owner
of the Mortgage
Loans pursuant to the terms of this
Agreement.
As more fully
set forth in Section 20, it is the express intention of the
parties that the transactions contemplated by this Agreement be, and be
construed as, a sale of the Mortgage Loans
by the Seller and not a pledge of the
Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. Consequently,
the sale of each
Mortgage Loan shall be
reflected as a purchase on the Purchaser's business records, tax returns and
financial statements, and as a sale of assets on the
Seller's business records,
tax returns and financial statements.
Subsection 6.03
Delivery of Mortgage Loan Documents.
With respect to
each Mortgage Loan, the Seller shall deliver and release to
the Purchaser, its designee or the Custodian, (a) at least five (5) Business
Days prior to the related Closing Date (or such later date
as the Purchaser may
reasonably request), the original Mortgage Note endorsed in blank and the
original Assignment of Mortgage assigned in blank and (b) the
other Mortgage
Loan Documents no later than sixty (60)
days following the related Closing Date,
subject to the following paragraph. All documents shall be original
documents
or, in the case of Mortgage Loan Documents
delivered for
recording, either
the
original recorded documents or
clerk-certified copies.
In the event
that such original or
copy of any Mortgage
Loan Document is
not so delivered to the Purchaser or its designee within one hundred eighty
(180) days following the related
Closing Date, and in
the event that the Seller
does not cure such failure within sixty (60) days after 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 a
price and in the
15
<PAGE>
manner specified in Subsection 7.03. The
foregoing repurchase
obligation shall
not apply in the event the Seller
cannot cause the Servicer to deliver such
original or clerk-certified copy of any document submitted for recordation to
the appropriate public recording office within the specified
period due to a
delay caused by the recording office in the applicable
jurisdiction;
provided
that the Seller shall cause the Servicer
instead to deliver a recording receipt
of such recording office or, if such recording
receipt is not
available,
an
Officer's Certificate of a servicing
officer of the
Servicer, confirming
that
such document has been accepted for recording and that the Servicer shall
immediately deliver such document upon
receipt; and, provided
further, that if
the Seller cannot cause the Servicer to
deliver such original or clerk-certified
copy of any document submitted for recordation to the appropriate public
recording office within the specified time for any reason within one
hundred
eighty (180) days after receipt of written
notification of such failure from the
Purchaser, the Seller shall repurchase the related
Mortgage Loan at the
price
and in the manner specified in Subsection
7.03.
To the extent
received by it, the
Servicer shall
promptly forward to
the
Purchaser, or its designee, original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage
Loan entered into
in
accordance with this Agreement.
SECTION 7.
REPRESENTATIONS, WARRANTIES AND COVENANTS; REMEDIES FOR BREACH.
Subsection
7.01 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller and,
solely if specified below, the Servicer, hereby represent
and warrant to the Purchaser that, as to each Mortgage Loan included in the
related Mortgage Loan Package, as of the
related Closing Date or such other date
specified herein:
(a) The information set forth in the Mortgage Loan Schedule annexed
to
the related Acknowledgment and Conveyance Agreement and the related
Mortgage
Loan Documents is true, correct and complete in all material
respects.
(b) There are no
defaults by the
Seller, the
Servicer or any
prior
originator
in complying with the terms of the Mortgage, and all taxes,
ground
rents, governmental assessments, insurance premiums, leasehold
payments,
water, sewer and municipal charges which previously became
due
and owing
have been paid,
or escrow funds have been established in an
amount
sufficient to pay for
every such escrowed item which remains unpaid
and which has
been assessed but is not yet due and payable.
(c) The terms of the
Mortgage Note and the Mortgage have not been
impaired,
waived, altered or modified in any
respect, except by written
instruments
which have been
recorded in the
applicable public
recording
office required
by law or if necessary to maintain the lien priority of the
Mortgage, and
which have been delivered to the Purchaser; the substance of
any such
waiver, alteration or modification has been approved by the
insurer under
the Primary Mortgage
Insurance Policy, if
any, by the title
insurer,
to the extent required
by the related policy, and is reflected on
the related Mortgage Loan Schedule. No other instrument of waiver,
alteration or
modification
has been executed, and no Mortgagor has been
released, in
whole or in part, except in
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<PAGE>
connection with
an assumption
agreement approved by
the insurer under the
Primary Mortgage
Insurance Policy, if any, by the title insurer,
to the
extent required
by the policy, and which assumption agreement is a part of
the Mortgage
File and is reflected on the related Mortgage Loan Schedule.
(d) The Mortgage Note and the Mortgage are not subject to any right
of
rescission,
set-off,
counterclaim
or defense, including, without
limitation,
the defense of usury, nor will the operation of any of the
terms of the
Mortgage Note and the
Mortgage, or the
exercise of any right
thereunder,
render either the
Mortgage Note or the Mortgage unenforceable,
in whole or in part, or subject to any right of rescission, set-off,
counterclaim
or defense,
including,
without limitation, the defense of
usury,
and no such right of
rescission, set-off,
counterclaim or
defense
has been
asserted with respect thereto; and the Mortgagor was not a
debtor
in any state or
federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan
was originated.
(e) All buildings or other customarily insured improvements upon the
Mortgaged
Property are insured by an insurer generally acceptable to
Fannie
Mae, Freddie Mac
and prudent mortgage lending institutions against loss by
fire,
hazards of extended
coverage and such
other hazards as are provided
for in the
Fannie Mae Guides and Freddie Mac Guide as well as all
additional
requirements set forth
herein, pursuant to an
insurance policy
conforming
to the requirements of Customary Servicing Procedures and
providing
coverage in an amount equal to the lesser of (i) the full
insurable value
of the Mortgaged Property or (ii) the outstanding principal
balance
owing on the Mortgage Loan. If the Mortgaged Property is a
condominium
unit, it is included
under the coverage
afforded by a blanket
policy.
All such insurance policies are in full force and effect and
contain a
standard mortgagee
clause naming the
originator of the Mortgage
Loan, its
successors and assigns as mortgagee and all premiums thereon
have
been paid.
If the Mortgaged
Property is in an area
identified on a
flood
hazard
map or flood
insurance rate map issued by the
Federal Emergency
Management
Agency as having special flood hazards (and such flood
insurance
has been made
available), a flood insurance policy meeting the requirements
of the current
guidelines of the
Federal Insurance
Administration
is in
effect which
policy conforms to the
requirements of Fannie
Mae or Freddie
Mac. The
Mortgage obligates the
Mortgagor thereunder
to maintain all such
insurance
at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do
so, authorizes
the holder of the
Mortgage to maintain
such
insurance
at the Mortgagor's cost and expense and to seek
reimbursement
therefor from
the Mortgagor.
(f) 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,
fair housing or
disclosure laws applicable to the origination
and servicing of
the Mortgage Loans
have been complied
with; the Servicer
maintains,
and shall maintain,
evidence of such
compliance as required by
applicable
law or regulation
and shall make such
evidence available for
inspection
at the Servicer's office during normal business hours upon
reasonable
advance notice.
(g)
The Mortgage has not been satisfied, canceled, subordinated or
rescinded,
in whole or in part
(other than as to Principal Prepayments in
full which
may
17
<PAGE>
have been
received on or after
the related Cut-off
Date and prior to
the
related
Closing Date), and the Mortgaged Property has not been released
from the lien of
the Mortgage, in whole
or in part, nor has any instrument
been
executed that would effect any such satisfaction, cancellation,
subordination,
rescission or release.
Neither the Seller nor
the Servicer
has waived the performance by the Mortgagor of any action, if the
Mortgagor's
failure to perform such action would cause the Mortgage Loan to
be in
default, and neither the Seller nor the Servicer has waived any
default.
(h) The Mortgage is a valid, existing, perfected and enforceable
first
lien on the
Mortgaged Property, including all improvements on the Mortgaged
Property,
free and clear of all
adverse claims, liens and encumbrances
having priority
over the lien of the Mortgage, subject only to (i) the lien
of current real
property taxes and assessments not yet due and payable,
(ii) covenants,
conditions and
restrictions, rights
of way, easements and
other
matters of the public record as of the date of recording being
acceptable
to mortgage lending institutions generally and either (A)
specifically
referred to in the
lender's title insurance policy delivered
to the
originator of the Mortgage Loan or (B) 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 individually
or in
the aggregate 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 and delivered in
connection with
the Mortgage Loan establishes and creates a valid, existing
and enforceable first lien and first priority security interest on the
property
described therein and the Seller has the full right
to sell and
assign the same
to the Purchaser. With respect to any Cooperative Loan, the
Security
Agreement is a valid,
subsisting and
enforceable first
priority
security
interest on the related Cooperative Shares securing the Mortgage
Note,
subject only to (a) liens of the
related residential Cooperative
Corporation for
unpaid assessments
representing
the Mortgagor's pro
rata
share of the
related residential Cooperative Corporation's payments for its
blanket
mortgage, current and future real property taxes, insurance
premiums,
maintenance fees and
other assessments to
which like collateral
is commonly subject and (b) other matters to which like collateral is
commonly subject
which do not materially interfere with the benefits of the
security
interest
intended to be provided by the related Security
Agreement.
(i) The Mortgage
Note, the related Mortgage and, in the case of a
Cooperative
Loan, the related Security Agreement, are original and genuine
and each is the
legal, valid and
binding obligation of
the maker thereof,
enforceable
in all respects in accordance with its terms except as
enforceability
may be limited by (i) bankruptcy, insolvency, liquidation,
receivership,
moratorium,
reorganization
or other similar laws
affecting
the enforcement of the rights of
creditors and (ii) general principles of
equity,
whether enforcement is sought in a
proceeding in equity or at law
and the Seller
has taken all action
necessary to transfer
such rights of
enforceability
to the Purchaser.
(j) All parties to the Mortgage Note, the Mortgage and, in the case
of
a Cooperative
Loan, the related Security Agreement, had the legal capacity
to enter into
the Mortgage
Loan and to execute
and deliver the
Mortgage
Note and the Mortgage,
and the
18
<PAGE>
Mortgage Note
and the Mortgage have been duly and properly executed by such
parties.
Either
the Mortgagor is a natural person or the related
co-borrower or
guarantor is a natural person.
(k) The proceeds of the Mortgage Loan have been fully disbursed to or
for the
account of the Mortgagor and there is no obligation for the
Mortgagee
to advance additional funds thereunder and any and all
requirements as
to completion of any on-site or off-site improvement and as
to disbursements of any escrow funds
therefor have been complied with. All
costs,
fees and expenses
incurred in making or
closing the Mortgage
Loan
and the
recording of the Mortgage have been paid, and the Mortgagor is not
entitled to any
refund of any amounts paid or due to the Mortgagee pursuant
to the Mortgage
Note or Mortgage.
(l) The Seller and all other 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) in compliance
with any and all applicable "doing business"
and licensing
requirements
of the laws of the
state wherein the Mortgaged
Property is
located.
(m) The Mortgage
Loan is covered by an
ALTA or CLTA lender's
title
insurance
policy, acceptable to Fannie Mae or Freddie
Mac, issued by a
title
insurer acceptable to Fannie Mae or
Freddie Mac and qualified to do
business
in the jurisdiction where the Mortgaged Property is located,
insuring
(subject to the
exceptions
contained in (h)(i),
(ii) and (iii)
above) the
Seller, its successors and assigns as to the first priority
lien
of the Mortgage
in the original
principal amount of the Mortgage Loan and,
with respect to
any Adjustable
Rate Mortgage Loan, against any loss by
reason of the
invalidity or unenforceability of the lien resulting from the
provisions
of the Mortgage providing for adjustment in the Mortgage
Interest Rate or
Monthly Payment. The Seller and its successors and assigns
are the sole
insureds of such lender's title insurance policy, and such
lender's title
insurance policy is in
full force and effect and will be in
full
force and effect upon the consummation of the transactions
contemplated
by this Agreement and will inure to the benefit of the
Purchaser and
its assigns without any further act. No claims have been made
under such
lender's title insurance policy, and the Seller has not done,
by
act or omission,
anything which would
impair the coverage of such lender's
title insurance
policy.
(n) There is no default, breach, violation or event of acceleration
existing
under the Mortgage or
the Mortgage Note and no event which, with
the passage of time or
with notice and the
expiration of any grace or cure
period, would
constitute a default,
breach, violation or
event permitting
acceleration,
and neither the Seller nor the Servicer has waived any
default, breach,
violation or event permitting acceleration.
(o) There are no, and,
as of the related
Closing Date,
neither the
Seller nor the
Servicer has received any notice of any, mechanics' or
similar
liens or claims filed
for work, labor or
material (and no
rights
are outstanding
that under law could
give rise to such lien) affecting the
related
Mortgaged Property
which are or may be liens prior to, or equal or
coordinate with,
the lien of the related Mortgage.
19
<PAGE>
(p) All improvements which were considered in determining the
Appraised
Value of the related
Mortgaged Property lay wholly within the
boundaries and
building restriction lines of the Mortgaged Property, and no
improvements on
adjoining properties encroach upon the Mortgaged Property.
(q) The Mortgage Loan was originated by a commercial
bank or similar
banking
institution which is
supervised and examined by a federal or state
authority, or by
a mortgagee approved by the Secretary of HUD.
(r) Principal
payments on the
Mortgage Loan
commenced no more
than
sixty (60) days
after the proceeds of the Mortgage Loan were disbursed. The
Mortgage
Loans identified on the related Mortgage Loan Schedule have an
original term to
maturity of not more than thirty (30) years, with interest
payable in
arrears on the first
day of the month.
As to each
Adjustable
Rate
Mortgage Loan, on each applicable Adjustment Date, the Mortgage
Interest
Rate will be
adjusted to equal the sum of the Index plus the
applicable
Gross Margin, rounded up or down as provided in
the Mortgage
Note; provided,
however, that the
Mortgage Interest Rate will not increase
or decrease by
more than the Initial Rate Cap on the first Adjustment Date
or the Periodic
Rate Cap/Floor on any subsequent Adjustment Date, and will
in no event
exceed the Lifetime Rate Cap. Each Mortgage Note evidencing a
Mortgage
Loan that is not both an Adjustable Rate Mortgage Loan and a
Balloon
Mortgage Loan requires a Monthly Payment which is sufficient to
amortize
the original principal balance fully over the original term
thereof and to
pay interest at the related Mortgage Interest Rate. Each
Mortgage Note
evidencing
an Adjustable Rate Mortgage Loan that is not
a
Balloon
Mortgage Loan requires
a Monthly Payment
which is sufficient
(i)
during the
period prior to the first adjustment to the Mortgage Interest
Rate,
to amortize the
original principal
balance fully over the
original
term thereof and
to pay interest at the related Mortgage Interest Rate, and
(ii) during the
period following
each Adjustment Date, to amortize the
outstanding
principal balance fully as of the first day of such period over
the then
remaining term of such Mortgage Note and to pay interest
at the
related
Mortgage Interest Rate. No Mortgage Note
evidencing an Adjustable
Rate Mortgage
Loan permits negative amortization. Interest on the Mortgage
Note is
calculated
on the basis of a
360-day year
consisting
of twelve
30-day months.
Unless otherwise indicated on the Mortgage Loan Schedule, no
Mortgage Loan is
a Convertible Mortgage Loan.
(s) There is no
proceeding pending
or, to the
Seller's knowledge,
threatened for
the total or partial
condemnation of the Mortgaged Property
and such
property is in good repair and is undamaged by waste, fire,
earthquake or
earth movement,
windstorm, flood, tornado or other casualty,
so as to affect
adversely the value of
the Mortgaged Property
as security
for the Mortgage
Loan or the use for which the premises were intended.
(t) The Mortgage and
related Mortgage
Note contain customary and
enforceable
provisions
such as to render the
rights and remedies
of the
holder thereof
adequate for the realization against the Mortgaged Property
of the benefits
of the security provided thereby, including (i) in the case
of a Mortgage
designated as a deed
of trust, by trustee's
sale, and (ii)
otherwise by
judicial foreclosure. To the best of the Seller's
20
<PAGE>
knowledge,
following the date of
origination
of the Mortgage
Loan, the
Mortgaged
Property has not been
subject to any
bankruptcy proceeding
or
foreclosure
proceeding and the Mortgagor has not filed for protection under
applicable
bankruptcy
laws. There is no homestead or other
exemption or
right
available to the
Mortgagor or any other person which would interfere
with the right
to sell the Mortgaged
Property at a
trustee's sale or
the
right to
foreclose the
Mortgage, subject to
applicable federal and
state
laws and
judicial precedent with respect to bankruptcy and right of
redemption or
similar law.
(u) The Mortgage Note
and Mortgage are on forms acceptable to Fannie
Mae or Freddie
Mac.
(v) The Mortgage Note is not and has not been secured by any
collateral
except the lien of the
corresponding Mortgage
on the Mortgaged
Property and the
security interest of any applicable security agreement or
chattel mortgage
referred to in (h) above.
(w) The Mortgage File
contains an appraisal of the related Mortgaged
Property,
in a form acceptable to Fannie Mae or Freddie Mac, and such
appraisal
complies with the requirements of FIRREA, and was made and
signed,
prior to the
approval of the Mortgage Loan application, by a
Qualified
Appraiser.
(x) In the
event the Mortgage
constitutes a deed of trust, a trustee,
duly
qualified under applicable law to serve as such, has been
properly
designated
and currently so serves and is named
in the Mortgage,
and no
fees or expenses
are or will become payable by the Purchaser to the trustee
under the deed
of trust, except in
connection with a
trustee's sale after
default by the
Mortgagor.
(y) 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, nor does it contain any
"buydown" provision which is
currently in
effect.
(z) The Mortgage contains an enforceable provision for the
acceleration of
the payment of the unpaid principal balance of the Mortgage
Loan in the
event that the Mortgaged Property is sold or transferred
without the
prior written consent of the mortgagee thereunder.
(aa) The Mortgagor has received all disclosure materials required by
applicable
law with respect to the making of
mortgage loans of the same
type as the
Mortgage Loan and rescission materials required by applicable
law if the
Mortgage Loan is a Refinanced Mortgage Loan and has
acknowledged
receipt of such
materials to the extent required by applicable law and such
documents will
remain in the Mortgage File.
(bb) Each Mortgage Loan with an LTV at origination in excess of 80%,
if any, will be
subject to a Primary Mortgage Insurance Policy, issued by
an insurer acceptable to Fannie Mae or Freddie Mac at the time of
origination,
which insures that portion of the
Mortgage Loan in excess of
the portion of the
Appraised Value of the Mortgaged Property as required by
Fannie Mae and
Freddie Mac
guidelines.
All provisions of such Primary
Mortgage
Insurance Policy have been and are being complied
21
<PAGE>
with,
such policy is in full force and effect, and all premiums due
thereunder
have been paid. Any Mortgage subject to any such Primary
Mortgage
Insurance Policy
obligates the
Mortgagor thereunder
to maintain
such insurance
and to pay all premiums and charges in connection therewith
at least until
the LTV of such
Mortgage Loan is
reduced to less than 80%.
The Mortgage
Interest Rate for the
Mortgage Loan does not include any such
insurance premium. No Mortgage Loan requires payment
of such premiums,
in
whole or in
part, by the Purchaser.
(cc) As of the date of
origination
of the Mortgage Loan, (i) the
Mortgaged
Property is lawfully
occupied under applicable law, (ii) 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, have been
made or obtained from the appropriate
authorities
and (iii) no
improvement
located on or part of
the Mortgaged
Property is in
violation of any zoning law or regulation.
(dd) 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.
(ee) All payments
required to be made
prior to the related
Cut-off
Date for such
Mortgage Loan under
the terms of the Mortgage Note have been
made,
the Mortgage Loan has not been dishonored, there are no material
defaults under
the terms of the Mortgage Loan and no Mortgage Loan has been
thirty
(30) days or more delinquent in the twelve (12) month period
immediately
prior to the related Cut-off Date.
(ff) None of the
Seller, the
Servicer or any prior originator or
servicer has
advanced funds, or
induced, solicited or
knowingly received
any advance from any party other than the Mortgagor, directly or
indirectly, for
the payment of any amount due under the Mortgage Loan.
(gg) With respect to each Mortgage Loan, the Seller is in possession
of a
complete Mortgage File except for the documents which have been
delivered to the
Purchaser or which
have been submitted
for recording and
not yet
returned.
(hh) Immediately
prior to the payment
of the related Purchase Price,
the Seller was the sole owner and holder of the Mortgage Loans and the
indebtedness
evidenced by the
Mortgage Note. The Mortgage Loans, including
the Mortgage Note and the Mortgage, were not assigned or pledged by
the
Seller and the
Seller had good and marketable title thereto, and the Seller
had full right
to transfer and sell
the Mortgage
Loans to the
Purchaser
free and clear
of any encumbrance,
participation
interest, lien,
equity,
pledge, claim or
security interest and had full right and authority subject
to no interest
or participation
in, or agreement
with any other party
to
sell or
otherwise transfer the
Mortgage Loans.
Following the sale of
the
Mortgage Loans,
the Purchaser will own such Mortgage Loan free and clear of
any encumbrance,
equity, participation interest, lien, pledge, charge,
claim or
security interest. The
Seller intends to relinquish all rights to
monitor,
possess and control
the Mortgage Loan except in connection with
the servicing of the Mortgage Loan by the Servicer as set forth
in this
Agreement. After
the
22
<PAGE>
related
Closing Date, neither the Seller nor the
Servicer will have
any
right to modify
or alter the terms of
the sale of the
Mortgage Loans and
neither the
Seller nor the Servicer will have any obligation or right to
repurchase the
Mortgage Loans,
except as provided in
this Agreement or as
otherwise agreed
to by the Seller, the Servicer and the Purchaser.
(ii) Any future
advances made prior to the related Cut-off Date have
been
consolidated
with the outstanding principal amount secured by the
Mortgage, and
the secured principal amount, as consolidated, bears a single
interest rate
and single repayment term. The lien of the Mortgage securing
the consolidated
principal amount is expressly insured as having first lien
priority by a
title insurance policy, an endorsement to the policy insuring
the mortgagee's
consolidated interest or by other title evidence acceptable
to Fannie Mae
and Freddie Mac. The
consolidated principal
amount does not
exceed the
original principal amount of the Mortgage Loan.
(jj) The Mortgage Loan was underwritten in accordance with the
Underwriting
Guidelines
in effect at the time of origination with
exceptions
thereto exercised in a reasonable manner, which exceptions will
have no material
adverse effects on the Purchaser.
(kk) With respect to a Mortgage Loan that is not a Cooperative Loan
and is not
secured by an interest
in a leasehold
estate, the Mortgaged
Property is located in the state
identified
in the related
Mortgage Loan
Schedule and
consists of a parcel of real property with a detached single
family residence
erected thereon, or a two- to four-family dwelling, or an
individual
condominium
unit, or an individual unit in a planned unit
development;
provided, however, that any condominium project or planned
unit
development
generally conforms with the Underwriting Guidelines
regarding such
dwellings (or underlying Cooperative Property, in the case
of a
Cooperative
Loan), and except as set forth in the
related Mortgage
Loan
Schedule, no residence or dwelling is a
mobile home or
manufactured
dwelling.
As of the date of origination, no portion of the Mortgaged
Property was
used for commercial
purposes and, to the Seller's knowledge,
since the date
of origination,
no portion of the
Mortgaged Property has
been used for
commercial purposes;
provided, that Mortgaged Properties
which
contain a home
office shall not be considered as being used for
commercial
purposes as long as
the Mortgaged Property has not been altered
for commercial purposes and is not storing any
chemicals or raw materials
other than those
commonly used for
homeowner repair,
maintenance
and/or
household
purposes.
(ll) If the Mortgaged Property is a condominium unit or a planned
unit
development
(other than a de minimis planned unit development) such
condominium or
planned unit development project meets Fannie Mae or Freddie
Mac eligibility
requirements for sale
to Fannie Mae or Freddie Mac, as the
case may be, or
is located in a
condominium or planned
unit development
project which
has received Fannie Mae or Freddie Mac project approval or as
to which Fannie
Mae's and Freddie Mac's eligibility requirements have been
waived.
23
<PAGE>
(mm) The Seller used no adverse selection procedures in selecting the
Mortgage Loan
from among the outstanding first lien, residential mortgage
loans owned by
it which were available for inclusion in the Mortgage Loans.
(nn) Each Mortgage Loan is a "qualified mortgage" within the meaning
of Section
860G(a)(3) of the Code.
(oo) With respect to each Mortgage where a lost note affidavit has
been
delivered to the Purchaser or its designee in place of the
related
Mortgage
Note, the related
Mortgage Note is no
longer in existence.
Each
such lost note
affidavit is
substantially in the
form attached hereto
as
Exhibit 5.
(pp) No fraud was
committed by the
Seller or the Servicer or, to the
Seller's or the
Servicer's knowledge,
any other person in
connection with
the origination
of the Mortgage Loan.
(qq) The origination
practices used by the
Seller and the collection
and servicing
practices used by the
Servicer with respect to each Mortgage
Loan have been
in all respects legal, proper, prudent and customary in the
mortgage
origination
and servicing industry and the collection and
servicing
practices used by the Servicer have been acceptable to Fannie
Mae
and Freddie
Mac.
(rr) The Mortgagor
is not in bankruptcy and is not insolvent and
neither the
Seller nor the Servicer have any knowledge of any circumstances
or condition
with respect to the
Mortgage, the Mortgaged Property, the
Mortgagor or the
Mortgagor's
credit standing that could reasonably be
expected to
cause investors to
regard the Mortgage Loan as an unacceptable
investment,
cause the Mortgage
Loan to become
delinquent
or materially
adversely affect
the value or the marketability of the Mortgage Loan.
(ss) The Mortgagor has
not notified the Seller or the Servicer, and
neither the
Seller nor the Servicer has knowledge of any relief
requested
by the Mortgagor
under the Servicemembers Civil Relief Act.
(tt) 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.
(uu) To the best of the Seller's knowledge, there exists no violation
of any local,
state or federal
environmental
law, rule or regulation in
respect of the
Mortgaged Property
which violation has
had or would have a
material
adverse effect on the market value of such
Mortgaged Property.
There is no
pending action or proceeding directly involving any Mortgaged
Property of
which the Seller or the Servicer is aware in which
compliance
with any
environmental law, rule or regulation is an issue.
(vv) No action,
inaction, or event has occurred and no state of
affairs
exists or has
existed that has resulted or will result in the
exclusion
from, denial of, or defense to
coverage under any applicable
special hazard
insurance policy, Primary Mortgage
24
<PAGE>
Insurance Policy
(if any) or bankruptcy bond, irrespective of the cause of
such
failure of coverage.
In connection with the placement of any such
insurance,
no commission,
fee, or other
compensation has been
or will be
received by the
Seller or the Servicer or any designee of the Seller or the
Servicer
or any corporation in which the Seller, the Servicer or any
officer,
director, or employee of the Seller or the Servicer had a
financial
interest at the time of placement of such insurance.
(ww) With respect to
any ground lease to
which a Mortgaged
Property
may be subject:
(A) the Mortgagor is the owner of a valid
and subsisting
leasehold
interest under such ground lease; (B) such ground lease is in
full force and
effect, unmodified and
not supplemented
by any writing or
otherwise; (C)
all rent, additional rent and other charges reserved therein
have been fully
paid to the extent payable as of the related Closing Date;
(D) the
Mortgagor enjoys the quiet and peaceful possession of the
leasehold
estate;
(E) the Mortgagor is
not in default under any of the terms of such
ground
lease, and, to the best of the
Seller's knowledge, there are no
circumstances
which, with the passage of time or the
giving of notice, or
both,
would result in a
default under such
ground lease;
(F) the lessor
under
such ground lease is not in default under any of the terms or
provisions of
such ground lease on the part of the lessor to be observed or
performed;
(G) the lessor under
such ground lease has satisfied any repair
or construction
obligations due as of
the related Closing Date pursuant to
the terms of such ground lease; and (H) the execution, delivery and
performance
of the Mortgage do not require the
consent (other than
those
consents
which have been
obtained and are in full force and effect) under,
and will not
contravene
any provision of or
cause a default under,
such
ground
lease.
(xx) With respect to escrow deposits and payments that the Servicer
is
entitled to
collect, all such
payments are in the
possession of, or under
the control of
the Servicer, and
there exist no deficiencies in connection
therewith for
which customary
arrangements for repayment thereof have not
been made. All
escrow payments have
been collected in full compliance with
state and
federal law and the
provisions of the related Mortgage Note and
Mortgage.
As to any Mortgage
Loan that is the subject of an escrow, escrow
of funds is not
prohibited by applicable law and has been established in an
amount
sufficient to pay for
every escrowed item
that remains unpaid
and
has been
assessed but is not
yet due and payable.
No escrow deposits
or
other charges or
payments due under the Mortgage Note have been capitalized
under any
Mortgage or the related Mortgage Note.
(yy) The Mortgage Loan
characteristics set
forth in Section 4 of the
related
Purchase Price and Terms Agreement are true and complete in all
material
respects.
(zz) No Mortgage Loan is (i) covered by the Home Ownership and Equity
Protection
Act of 1994,
as amended
("HOEPA"),
(ii) in violation of any
comparable
state law or (iii)
considered a "high cost" mortgage loan under
Section 32 of
HOEPA or a "high cost," "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 regul
