Exhibit 99.10b
EXECUTION COPY
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FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE
AND WARRANTIES AGREEMENT
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MORGAN STANLEY MORTGAGE CAPITAL INC.,
Purchaser
MORTGAGEIT, INC.,
Seller
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Dated as of March 1, 2006
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............................................16
SECTION 4.
PURCHASE
PRICE................................................16
SECTION 5.
EXAMINATION OF MORTGAGE
FILES.................................17
SECTION 6.
CONVEYANCE FROM SELLER TO
PURCHASER...........................17
SECTION 7.
SERVICING OF THE MORTGAGE
LOANS...............................20
SECTION 8.
[RESERVED]....................................................21
SECTION 9.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR
BREACH...................................21
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................47
SECTION 17.
NOTICES.......................................................47
SECTION 18.
SEVERABILITY
CLAUSE...........................................48
SECTION 19.
COUNTERPARTS..................................................48
SECTION 20.
INTENTION OF THE
PARTIES......................................48
SECTION 21.
SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE
AGREEMENT.....................................................49
SECTION 22.
WAIVERS.......................................................49
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SECTION 23.
EXHIBITS......................................................49
SECTION 24.
GENERAL INTERPRETIVE
PRINCIPLES...............................49
SECTION 25.
REPRODUCTION OF
DOCUMENTS.....................................50
SECTION 26.
FURTHER
AGREEMENTS............................................50
SECTION 27.
RECORDATION OF ASSIGNMENTS OF
MORTGAGE........................50
SECTION 28. NO
SOLICITATION...............................................50
SECTION 29.
WAIVER OF TRIAL BY
JURY.......................................51
SECTION 30.
GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF
PROCESS.......................................................51
SECTION 31.
AMENDMENT.....................................................52
SECTION 32.
CONFIDENTIALITY...............................................52
SECTION 33.
ENTIRE
AGREEMENT..............................................52
SECTION 34.
COMPLIANCE WITH REGULATION
AB.................................52
EXHIBITS
EXHIBIT A-1 MORTGAGE LOAN DOCUMENTS
EXHIBIT A-2 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B FORM
OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM
OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM
OF OPINION OF COUNSEL TO THE SELLER
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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FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE
AND WARRANTIES AGREEMENT
This FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT ("Agreement"), dated as of March 1, 2006, by
and between
Morgan Stanley Mortgage Capital Inc., a New York corporation (the
"Purchaser"),
and MortgageIT, Inc., a New York corporation (the "Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that
certain
Mortgage Loan Purchase and Warranties Agreement, dated as of
October 1, 2004,
as amended by that certain Amended and Restated Mortgage Loan
Purchase and
Warranties Agreement, dated as of May 1, 2005, as amended by that
certain
Second Amended and Restated Mortgage Loan Purchase and Warranties
Agreement,
dated as of March 1, 2005, as amended by that certain Third Amended
and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as
of December
1, 2005 (the "Original Purchase Agreement") and the Seller desires
to sell,
from time to time, to the Purchaser, and the Purchaser desires to
purchase,
from time to time, from the Seller, 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, the Purchaser and the Seller desire to enter into this
Agreement to amend and restate the Original Purchase Agreement to
make certain
modifications as set forth herein with respect to all Mortgage
Loans subject to
this Agreement or the Original Purchase Agreement.
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 which are in accordance with
accepted
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.
Act: The National Housing Act, as amended from time to time.
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Adjustable Rate Mortgage Loan: A Mortgage Loan purchased
pursuant
to this Agreement, the Mortgage Interest Rate of which is adjusted
from time to
time in accordance with the terms of the related Mortgage Note.
Affiliate: With respect to any specified Person, any other
Person
controlling or controlled by or under common control with such
specified
Person. For the purposes of this definition, "control" when used
with respect
to any specified Person means the power to direct the management
and policies
of such Person, directly or indirectly, whether through the
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 Fourth Amended and Restated Mortgage Loan
Purchase
and Warranties Agreement including all exhibits, schedules,
amendments and
supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Appraised Value: With respect to any Mortgaged Property, the
lesser
of (i) the value thereof as determined by an appraisal made for the
originator
of the Mortgage Loan at the time of origination of the Mortgage
Loan by a
Qualified Appraiser and (ii) the purchase price paid for the
related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan;
provided,
however, that in the case of a Refinanced Mortgage Loan, such value
of the
Mortgaged Property is based solely upon the value determined by an
appraisal
made for the originator of such Refinanced Mortgage Loan at the
time of
origination of such Refinanced Mortgage Loan by a Qualified
Appraiser.
Assignment and Conveyance Agreement: As defined in Subsection
6.01.
Assignment of Mortgage: An individual assignment of the
Mortgage,
notice of transfer or equivalent instrument in recordable form and
in blank,
sufficient under the laws of the jurisdiction in which the related
Mortgaged
Property is located to give record notice of the sale of the
Mortgage to the
Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only
payments of interest until the stated maturity date of the Mortgage
Loan or (b)
for which Monthly Payments of principal (not including the payment
due on its
stated maturity date) are based on an amortization schedule that
would be
insufficient to fully amortize the principal thereof by the stated
maturity
date of the Mortgage Loan.
Business Day: Any day other than (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 Interim Servicer'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
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any outstanding subordinate mortgages on the related Mortgaged
Property and
which provided incidental cash to the related Mortgagor of more
than 1% of the
original principal balance of such Mortgage Loan.
Closing Date: The date or dates on which the Purchaser from time
to
time shall purchase, and the Seller from time to time shall sell,
the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to
the related
Mortgage Loan Package.
Closing Documents: The documents required to be delivered on
each
Closing Date pursuant to Section 11.
CLTA: The California Land Title Association.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of (a) the 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: The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
Commission: The United States Securities and Exchange
Commission.
Condemnation Proceeds: All awards, compensation and settlements
in
respect of a taking of all or part of a Mortgaged Property, whether
permanent
or temporary, partial or entire, by exercise of the power of
condemnation or
the right of eminent domain, to the extent not required to be
released to a
Mortgagor in accordance with the terms of the related Mortgage Loan
Documents.
Co-op: A private, cooperative housing corporation, having only
one
class of stock outstanding, which owns or leases land and all or
part of a
building or buildings, including apartments, spaces used for
commercial
purposes and common areas therein and whose board of directors
authorizes the
sale of stock and the issuance of a Co-op Lease.
Co-op Lease: With respect to a Co-op Loan, the lease with
respect
to a dwelling unit occupied by the Mortgagor and relating to the
stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a dwelling unit in a residential cooperative housing
corporation
and a collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as Covered pursuant
to
Appendix E of Standard & Poor's Glossary.
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Custodial Account: The separate trust account created and
maintained pursuant to Subsection 2.04 of the Interim 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: LaSalle Bank National Association, a national
banking
association and its successors in interest, or any successor to the
Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the
related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Deemed Material and Adverse Representation: Each representation
and
warranty identified as such in Section 9.02 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or to
be
repurchased or replaced or to be replaced with a Qualified
Substitute Mortgage
Loan by the Seller in accordance with the terms of this
Agreement.
Depositor: The depositor, as such term is defined in Regulation
AB,
with respect to any Securitization Transaction.
Determination Date: The date specified in the Interim 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.
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: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie
Mae
Servicers' Guide, as amended or restated from time to time.
Fannie Mae Transfer: As defined in Section 13.
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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.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, as amended and in effect from time to
time.
First Lien Loan: A Mortgage Loan secured by a first lien
Mortgage
on the related Mortgaged Property.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: As defined in Section 13.
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 a 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 Mortgage Insurance issued by the
FHA. The term
"HUD," for purposes of this Agreement, is also deemed to include
subdivisions
thereof such as the FHA and Government National Mortgage
Association.
Index: The index indicated in the related Mortgage Note for
each
Adjustable Rate Mortgage Loan.
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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.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate
Mortgage Loan, the date, specified in the related Mortgage Note and
the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage
Loan,
the Person named on the MERS System as the interim funder pursuant
to the MERS
Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest, or any successor to the
Interim
Servicer under the Interim Servicing Agreement, as therein
provided.
Interim Servicing Agreement: The agreement to be entered into
by
the Purchaser and the Interim Servicer, providing for the Interim
Servicer to
service the Mortgage Loans as specified by the Interim Servicing
Agreement.
Investor: With respect to each MERS Designated Mortgage Loan,
the
Person named on the MERS System as the investor pursuant to the
MERS Procedures
Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related
to
an Adjustable Rate Mortgage Loan which provides for an absolute
maximum
Mortgage Interest Rate thereunder. The Mortgage Interest Rate
during the 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 amount per annum set forth on the related Mortgage
Loan
Schedule.
Liquidation Proceeds: The proceeds received in connection with
the
liquidation of a defaulted Mortgage Loan, whether through the sale
or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale
or otherwise
or the sale of the related Mortgaged Property if the Mortgaged
Property is
acquired in satisfaction of the Mortgage Loan, other than amounts
received
following the acquisition of REO Property, Insurance Proceeds and
Condemnation
Proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, as of
any
date of determination, the ratio (expressed as a percentage) the
numerator of
which is the outstanding principal balance of the Mortgage Loan as
of the
related Cut-off Date (unless otherwise indicated), and the
denominator of which
is the lesser of (a) the Appraised Value of the Mortgaged Property
at
origination and (b) if the Mortgage Loan was made to finance the
acquisition of
the related Mortgaged Property, the purchase price of the Mortgaged
Property.
LTV: Loan-to-Value Ratio.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the
Federal
Manufactured Home Construction and Safety Standards adopted on June
15, 1976,
by the Department of Housing and Urban Development
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("HUD Code"), as amended in 2000, which preempts state and local
building
codes. Each unit is identified by the presence of a HUD
Plate/Compliance
Certificate label. The sections are then transported to the site
and joined
together and affixed to a pre-built permanent foundation (which
satisfies the
manufacturer's requirements and all state, county, and local
building codes and
regulations). The manufactured home is built on a non-removable,
permanent
frame chassis that supports the complete unit of walls, floors, and
roof. The
underneath part of the home may have running gear (wheels, axles,
and brakes)
that enable it to be transported to the permanent site. The wheels
and hitch
are removed prior to anchoring the unit to the permanent
foundation. The
manufactured home must be classified as real estate and taxed
accordingly. The
permanent foundation may be on land owned by the mortgager or may
be on leased
land.
MERS: Mortgage Electronic Registration Systems, Inc., a
Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or
will take
such action as is necessary to cause MERS to be, the mortgagee of
record, as
nominee for the Seller, in accordance with MERS Procedures Manual
and (b) the
Seller has designated or will designate the Purchaser as the
Investor on the
MERS System.
MERS Procedures Manual: The MERS Procedures Manual, as it may
be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS
Designated Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: With respect to any Mortgage Loan, the
scheduled
payment of principal and interest payable by a Mortgagor under the
related
Mortgage Note on each Due Date.
Mortgage: With respect to a Mortgage Loan that is not a Co-op
Loan,
the mortgage, deed of trust or other instrument securing a Mortgage
Note, which
creates a first lien, in the case of a First Lien Loan, or a second
lien, in
the case of a Second Lien Loan, on the related Mortgaged Property.
With respect
to a Co-op Loan, the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage
Loan
Documents and the items listed in Exhibit A-2 hereto and any
additional
documents required to be added to the Mortgage File pursuant to
this Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from
time to time
in accordance with the provisions of the related Mortgage Note.
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.
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Mortgage Loan: Each mortgage loan sold, assigned and
transferred
pursuant to this Agreement and identified on the applicable
Mortgage Loan
Schedule, which Mortgage Loan includes, without limitation, the
Mortgage File,
the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation
Proceeds, Insurance Proceeds, 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: With respect to any Mortgage Loan, the
documents required to be delivered to the Custodian pursuant to
Subsection
6.03.
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 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
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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
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 original executed note or other evidence of
the
Mortgage Loan indebtedness of a Mortgagor, including any riders or
addenda
thereto.
Mortgaged Property: With respect to a Mortgage Loan that is not
a
Co-op Loan, the Mortgagor's real property securing repayment of a
related
Mortgage Note, consisting of an
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unsubordinated estate in fee simple or, with respect to real
property located
in jurisdictions in which the use of leasehold estates for
residential
properties is a widely-accepted practice, a leasehold estate, in a
single
parcel or multiple parcels of real property improved by a
Residential Dwelling.
With respect to a Co-op Loan, the stock allocated to a dwelling
unit in the
residential cooperative housing corporation that was pledged to
secure such
Co-op Loan and the related Co-op Lease.
Mortgagee: The mortgagee or beneficiary named in the Mortgage
and
the successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note, who is an owner of
the
Mortgaged Property and the grantor or mortgagor named in the
Mortgage and such
grantor's or mortgagor's successors in title to the Mortgaged
Property.
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
Interim Servicer, 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 Interim Servicer 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.
Officer's Certificate: A certificate signed by the Chairman of
the
Board or the Vice Chairman of the Board or a President or a Chief
Executive
Officer or a Chief Financial Officer or an Executive Vice President
and by the
Treasurer or the 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 the Interim Servicing
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.
Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage
Loan, the provision of each Mortgage Note which provides for an
absolute
maximum amount by which the Mortgage Interest Rate therein may
increase or
decrease on an Interest Rate Adjustment Date 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.
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Periodic Rate Floor: With respect to each Adjustable Rate
Mortgage
Loan, the provision of each Mortgage Note which provides for an
absolute
maximum amount by which the Mortgage Interest Rate therein may
decrease on an
Interest Rate Adjustment Date below the Mortgage Interest Rate
previously in
effect.
Person:
Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated
organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance
issued
by an insurer acceptable under the Underwriting Guidelines and
qualified to do
business in the jurisdiction where the Mortgaged Property is
located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the
amount
of any premium or penalty required to be paid by the Mortgagor if
the Mortgagor
prepays such Mortgage Loan as provided in the related Mortgage Note
or
Mortgage.
Principal Prepayment: Any payment or other recovery of principal
on
a Mortgage Loan which is received in advance of its scheduled Due
Date,
including any Prepayment Penalty thereon, and which is not
accompanied by an
amount of interest representing scheduled interest due on any date
or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by
the
Purchaser to the Seller in exchange for the Mortgage Loans
purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Each agreement setting
forth
the general terms and conditions of the purchase and sale of the
Mortgage Loans
to be purchased from time to time under this Agreement.
Purchase Price Percentage: The percentage of par (expressed as
a
decimal) set forth in the related Purchase Price and Terms
Agreement.
Purchaser: Morgan Stanley Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any
successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the
Seller,
who had no interest, direct or indirect, in the Mortgaged Property
or in any
loan made on the security thereof, and whose compensation was not
affected by
the approval or disapproval of the Mortgage Loan, and such
appraiser and the
appraisal made by such appraiser both satisfied the requirements of
Title XI of
FIRREA and the regulations promulgated thereunder, all as in effect
on the date
the Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller
purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such
Mortgage Loans were
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originated pursuant to an agreement between the Seller and such
Person that
contemplated that such Person would underwrite mortgage loans from
time to
time, for sale to the Seller, in accordance with underwriting
guidelines
designated by the Seller ("Designated Guidelines") or guidelines
that do not
vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were
in fact underwritten as described in clause (i) above and were
acquired by the
Seller within 180 days after origination; (iii) either (x) the
Designated
Guidelines were, at the time such Mortgage Loans were originated,
used by the
Seller in origination of mortgage loans of the same type as the
Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines were,
at the time
such Mortgage Loans were underwritten, designated by the Seller on
a consistent
basis for use by lenders in originating mortgage loans to be
purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage
Loans were
acquired by the Seller, pre-purchase or post-purchase quality
assurance
procedures (which may involve, among other things, review of a
sample of
mortgage loans purchased during a particular time period or through
particular
channels) designed to ensure that Persons from which it purchased
mortgage
loans properly applied the underwriting criteria designated by the
Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to
be
substituted by the Seller for a Deleted Mortgage Loan which must,
on the date
of such substitution, be approved by the Purchaser and (i) have an
unpaid
principal balance, after deduction of all scheduled payments due in
the month
of substitution (or in the case of a substitution of more than one
mortgage
loan for a Deleted Mortgage Loan, an aggregate principal balance),
not in
excess of the unpaid principal balance of the Deleted Mortgage Loan
(the amount
of any shortfall will be deposited in the Custodial Account by the
Seller in
the month of substitution); (ii) have a Mortgage Interest Rate not
less than
and not more than one percent (1%) greater than the Mortgage
Interest Rate of
the Deleted Mortgage Loan; (iii) have a remaining term to maturity
not greater
than and not more than one (1) year less than that of the Deleted
Mortgage
Loan; (iv) be of the same type as the Deleted Mortgage Loan (i.e.,
fixed rate
or adjustable rate with same Mortgage Interest Rate Cap and Index);
(v) comply
as of the date of substitution with each representation and
warranty set forth
in Section 9 of this Agreement; (vi) be current in the payment of
principal and
interest; (vii) be secured by a Mortgaged Property of the same type
and
occupancy status as secured the Deleted Mortgage Loan; and (viii)
have payment
terms that do not vary in any material respect from those of the
Deleted
Mortgage Loan.
Rate/Term Refinance: A Refinanced Mortgage Loan, in which the
proceeds received were not in excess of the amount of funds
required to repay
the principal balance of any existing first mortgage loan on the
related
Mortgaged Property, pay related closing costs and satisfy any
outstanding
subordinate mortgages on the related Mortgaged Property and did not
provide
incidental cash to the related Mortgagor of more than one percent
(1%) of the
original principal balance of such Mortgage Loan.
Reconstitution: Any Securitization Transaction or a Whole Loan
Transfer.
Reconstitution Agreements: The agreement or agreements entered
into
by the Seller and the Purchaser and/or certain third parties on
the
Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans
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
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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.
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 Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified
therein).
REO Property: A Mortgaged Property acquired by the Interim
Servicer
through foreclosure or deed in lieu of foreclosure.
Repurchase Price: With respect to any Mortgage Loan, a price
equal
to the unpaid principal balance of the Mortgage Loan to be
repurchased, plus
accrued interest thereon at the Mortgage Interest Rate and
including the last
Due Date through which interest had last been paid through the date
of such
repurchase, plus the amount of any outstanding advances owed to any
servicer,
plus all costs and expenses incurred by the Purchaser or any
servicer arising
out of or based upon such breach, including without limitation
costs and
expenses incurred in the enforcement of the Seller's repurchase
obligation
hereunder.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a
one-family dwelling unit in a condominium project or (iv) a
one-family dwelling
in a planned unit development, none of which is a co-operative,
mobile or
Manufactured Home.
RESPA: The 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.
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<PAGE>
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.
Security Agreement: The agreement creating a security interest
in
the stock allocated to a dwelling unit in the residential
cooperative housing
corporation that was pledged to secure such Co-op Loan and the
related Co-op
Lease.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Seller Information: As defined in Subsection 34.04(a).
Servicing Fee:
With respect to each Mortgage Loan subject to the
Interim 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
Interim Servicer under the Interim Servicing Agreement. The
obligation of the
Purchaser to 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 Interim Servicer, or as
otherwise
provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the
Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer 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.
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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 Subsections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Transfer Date: In the event the Interim Servicer is terminated
as
servicer of a Mortgage Loan pursuant to the Interim Servicing
Agreement, the
date on which the Purchaser, or its designee, shall receive the
transfer of
servicing responsibilities and begin to perform the servicing of
such Mortgage
Loans, and the Interim Servicer shall cease all servicing
responsibilities.
Underwriting Guidelines: The underwriting guidelines of the
Seller,
a copy of which is attached hereto as Exhibit G and a then-current
copy of
which is attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. 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
unpaid principal balance of the Mortgage Loans accepted by the
Purchaser on
each Closing Date, together with the related Mortgage Files and all
rights and
obligations arising under the documents contained therein.
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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 shall deliver the related Mortgage Loan Schedule for
the
Mortgage Loans to be purchased on a particular Closing Date to the
Purchaser at
least five (5) Business Days prior to the related Closing Date. The
related
Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with
those Mortgage Loans which have not been funded prior to the
related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan and the related
Servicing
Rights 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 and/or the Servicing
Rights shall be
priced and paid for 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 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 (1) 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.
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SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing
Date,
the Seller shall either (a) deliver to the Purchaser or its
designee in escrow,
for examination with respect to each Mortgage Loan to be purchased,
the related
Mortgage File, including a copy of the Assignment of Mortgage,
pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available
to the
Purchaser for examination at such other location as shall otherwise
be
acceptable to the Purchaser. Such examination of the Mortgage Files
may be made
by the Purchaser or its designee at any reasonable time before or
after the
related Closing Date. If the Purchaser makes such examination prior
to the
related Closing Date and determines, in its sole discretion, that
any Mortgage
Loans do not conform to any of the requirements set forth in the
related
Purchase Price and Terms Agreement, or as an Exhibit annexed
thereto, the
Purchaser may delete such Mortgage Loans from the related Mortgage
Loan
Schedule, and such Deleted Mortgage Loan (or Loans) may be replaced
by a
Qualified Substitute Mortgage Loan (or Loans) acceptable to the
Purchaser. The
Purchaser may, at its option and without notice to the Seller,
purchase some or
all of the Mortgage Loans without conducting any partial or
complete
examination. The fact that the Purchaser or its designee has
conducted or has
failed to conduct any partial or complete examination of the
Mortgage Files
shall not impair in any way the Purchaser's (or any of its
successor's) rights
to demand repurchase, substitution or other relief as provided in
this
Agreement. In the event that the Seller fails to deliver the
Mortgage File with
respect to any Mortgage Loan, the Seller shall, upon the request of
the
Purchaser, repurchase such Mortgage Loan as the price and in the
manner
specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
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 ensure that the contents
of each
Servicing File, which are required to be retained by or delivered
to the
Interim Servicer to service the Mortgage Loans pursuant to the
Interim
Servicing Agreement and thus not delivered to the Purchaser, or its
designee,
are and shall be held in trust by the Interim Servicer for the
benefit of the
Purchaser as the owner thereof. The Seller agrees that the Interim
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 Interim
Servicer shall be in a custodial capacity only. The ownership of
each Mortgage
Note, each Mortgage and the contents of each Mortgage File is
vested in the
Purchaser and the ownership of all records and documents with
respect to the
related Mortgage Loan prepared by or which come into the possession
of the
Interim Servicer shall immediately vest in the Purchaser and shall
be retained
and maintained, in trust, by the Interim Servicer at the will of
the Purchaser
in such custodial capacity only. The Seller shall cause the
Servicing File
retained by the Interim Servicer 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 Interim Servicer to release
from its
custody the contents of any Servicing File retained by it
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only in accordance with this Agreement or the Interim Servicing
Agreement,
except when such release is required in connection with a
repurchase of any
such Mortgage Loan pursuant to Subsection 9.03 or if required under
applicable
law or court order.
Subsection 6.02 Books and Records.
Record title to each Mortgage and the related Mortgage Note as
of
the related Closing Date shall be in the name of the Seller, an
Affiliate of
the Seller, the Purchaser or one or more designees of the
Purchaser, as the
Purchaser shall select; provided, however, that if a Mortgage has
been recorded
in the name of MERS or its designee, the Seller is shown as the
owner of the
related Mortgage Loan on the records of MERS for purposes of the
system of
recording transfers of beneficial ownership of mortgages maintained
by MERS.
Notwithstanding the foregoing, ownership of each Mortgage and
related Mortgage
Note shall be vested solely in the Purchaser or the appropriate
designee of the
Purchaser, as the case may be. All rights arising out of the
Mortgage Loans
including, but not limited to, all funds received by the Seller or
the Interim
Servicer 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
Interim
Servicer in trust for the benefit of the Purchaser or the
appropriate designee
of the Purchaser, as the case may be, as the owner of the Mortgage
Loans
pursuant to the terms of this Agreement.
The Seller shall be or shall cause the Interim Servicer 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 Interim Servicer 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 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 the Interim Servicer may be in the form of microfilm or
microfiche so long
as the Seller or the Interim Servicer complies with the
requirements of the
Fannie Mae Guides.
It is the express intention of the parties that the
transactions
contemplated by this Agreement be, and be construed as, a sale of
the related
Mortgage Loans by the Seller and not a pledge of such Mortgage
Loans by the
Seller to the Purchaser to secure a debt or other obligation of the
Seller.
Consequently, the sale of each Mortgage Loan shall be reflected as
a purchase
on the Purchaser's business records, tax returns and financial
statements, and
as a sale of assets on the Seller's business records, tax returns
and financial
statements.
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Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later
than
two (2) Business Days prior to the related Closing Date those
Mortgage Loan
Documents set forth on Exhibit A-1 hereto as required by the
Custodial
Agreement with respect to each Mortgage Loan set forth on the
related Mortgage
Loan Schedule.
In connection with the foregoing, the Seller shall indemnify
the
Purchaser and its present and former directors, officers, employees
and agents
and any Successor Servicer and its present and former directors,
officers,
employees and agents, and hold such parties harmless against any
losses,
damages, penalties, fines, forfeitures, legal fees and expenses and
related
costs, judgments, and other costs and expenses based on or grounded
upon, or
resulting from, the fact that any Mortgage Loan is not covered by
an ALTA or
CLTA lender's title insurance policy. For purposes of the previous
sentence,
"Purchaser" shall mean the Person then acting as the Purchaser
under this
Agreement and any and all Persons who previously were "Purchasers"
under this
Agreement and "Successor Servicer" shall mean any Person designated
as the
Successor Servicer pursuant to this Agreement and any and all
Persons who
previously were "Successor Servicers" pursuant to this
Agreement.
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 Interim Servicer 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 two (2) weeks following
receipt of the
original document by the Interim Servicer; provided, however, that
such
original recorded document or certified copy thereof shall be
delivered to the
Purchaser no later than 180 days following the related Closing
Date, unless
there has been a delay at the applicable recording office.
If the original or copy of any document submitted for
recordation
to the appropriate public recording office is not delivered to the
Purchaser or
its designee within 180 days following the related Closing Date,
the related
Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the
Seller at the price and in the manner specified in Subsection 9.03.
The
foregoing repurchase obligation shall not apply if the Seller
cannot cause the
Interim Servicer to deliver such original or copy of any document
submitted for
recordation to the appropriate public recording office within the
specified
period due to a delay caused by the recording office in the
applicable
jurisdiction; provided that (i) the Seller shall instead deliver a
recording
receipt of such recording office or, if such recording receipt is
not
available, an
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officer's certificate of a servicing officer of the Seller,
confirming that
such document has been accepted for recording, and (ii) such
document is
delivered within twelve (12) months of the related Closing
Date.
The Seller shall pay all initial recording fees, if any, for
the
Assignments of Mortgage and any other fees or costs in transferring
all
original documents to the Custodian or, upon written request of the
Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the
Purchaser's
designee shall be responsible for recording the Assignments of
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 Interim Servicer 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 Seller's loan production
and the
servicing activities of the Interim Servicer. The program is to
ensure that the
Mortgage Loans are originated in accordance with the Underwriting
Guidelines;
guard against dishonest, fraudulent, or negligent acts; and guard
against
errors and omissions by officers, employees, or other authorized
persons.
Subsection 6.05 MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the
Purchaser as the
Investor and the Custodian as custodian, and no Person shall be
listed as
Interim Funder on the MERS System. In addition, on or prior to the
related
Closing Date, Seller shall provide the Custodian and the Purchaser
with a MERS
Report listing the Purchaser as the Investor, the Custodian as
custodian and no
Person as Interim Funder with respect to each MERS Designated
Mortgage Loan.
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 Interim 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 Interim Servicer as contract
servicer of the Mortgage Loans for an interim period pursuant to
and in
accordance with the terms and conditions contained in the Interim
Servicing
Agreement (with respect to each Mortgage Loan, for an interim
period, as
specified therein). The Seller shall cause the Interim Servicer to
execute the
Interim Servicing Agreement on the initial Closing Date.
The Seller shall cause the Interim Servicer to transfer the
servicing of the Mortgage Loans on each Transfer Date in accordance
with the
terms of the Interim Servicing Agreement.
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SECTION 8. [RESERVED].
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 New York
corporation, validly existing, and in good standing under the laws
of its
jurisdiction of incorporation or formation and has all licenses
necessary to
carry on its business as now being conducted and is licensed,
qualified and in
good standing in the states where the Mortgaged Property is located
if the laws
of such state require licensing or qualification in order to
conduct business
of the type conducted by the Seller. The Seller has corporate power
and
authority to execute and deliver this Agreement and to perform its
obligations
hereunder; the execution, delivery and performance of this
Agreement (including
all instruments of transfer to be delivered pursuant to this
Agreement) by the
Seller and the consummation of the transactions contemplated hereby
have been
duly and validly authorized; this Agreement has been duly executed
and
delivered and constitutes the valid, legal, binding and enforceable
obligation
of the Seller, except as enforceability may be limited by (i)
bankruptcy,
insolvency, liquidation, receivership, moratorium, reorganization
or other
similar laws affecting the enforcement of the rights of creditors
and (ii)
general principles of equity, whether enforcement is sought in a
proceeding in
equity or at law. All requisite corporate action has been taken by
the Seller
to make this Agreement valid and binding upon the Seller in
accordance with its
terms;
(b) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this
Agreement from any
court, governmental agency or body, or federal or state regulatory
authority
having jurisdiction over the Seller is required or, if required,
such consent,
approval, authorization or order has been or will, prior to the
related Closing
Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary
course of
business of the Seller, and the transfer, assignment and conveyance
of the
Mortgage Notes and the Mortgages by the Seller pursuant to this
Agreement are
not subject to the bulk transfer or any similar statutory
provisions in effect
in any applicable jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by
the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation
of the
transactions contemplated hereby, nor the fulfillment of or
compliance with the
terms and conditions of this Agreement, will conflict with or
result in a
breach of any of the terms, conditions or provisions of the
Seller's charter or
by-laws or any legal restriction or any agreement or instrument to
which the
Seller is now a party or by which it is bound, or constitute a
default or
result in an acceleration under any of the foregoing, or result in
the
violation of any law, rule, regulation, order, judgment or decree
to which the
Seller or its
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<PAGE>
property is subject, or result in the creation or imposition of any
lien,
charge or encumbrance that would have an adverse effect upon any of
its
properties pursuant to the terms of any mortgage, contract, deed of
trust or
other instrument, or impair the ability of the Purchaser to realize
on the
Mortgage Loans, impair the value of the Mortgage Loans, or impair
the ability
of the Purchaser to realize the full amount of any insurance
benefits accruing
pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding
or
investigation pending or, to the knowledge of the Seller,
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;
(f) Ability to Perform; Solvency. The Seller does not believe,
nor
does it have any reason or cause to believe, that it cannot perform
each and
every covenant contained in this Agreement. The Seller is solvent
and the sale
of the Mortgage Loans will not cause the Seller to become
insolvent. The sale
of the Mortgage Loans is not undertaken with the intent to hinder,
delay or
defraud any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate
any
mortgage loan or to deny any mortgage loan application is an
independent
decision based upon the Underwriting Guidelines, and is in no way
made as a
result of Purchaser's decision to purchase, or not to purchase, or
the price
Purchaser may offer to pay for, any such mortgage loan, if
originated;
(h) Anti-Money Laundering Laws. The Seller has complied with
all
applicable anti-money laundering laws, executive orders and
regulations,
including without limitation the USA Patriot Act of 2001
(collectively, the
"Anti-Money Laundering Laws"); the Seller has established an
anti-money
laundering compliance program as required by the Anti-Money
Laundering Laws,
has conducted the requisite due diligence in connection with the
origination of
each Mortgage Loan for purposes of the Anti-Money Laundering Laws,
including
with respect to the legitimacy of the applicable Mortgagor and the
origin of
the assets used by the said Mortgagor to purchase the property in
question, and
maintains, and will maintain, sufficient information to identify
the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws;
(i) Financial Statements. 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, in all material respects,
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
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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;
(j) Selection Process. The Mortgage Loans were selected from
among
the outstanding one- to four-family mortgage loans in the Seller's
portfolio at
the related Closing Date as to which the representations and
warranties set
forth in Subsection 9.02 could be made and such selection was not
made in a
manner so as to affect adversely the interests of the
Purchaser;
(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, in light of the
circumstances
in which it was made, not misleading;
(m) 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;
(n) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally
accepted
accounting principles the transfer of the Mortgage Loans will be
treated as a
sale on the books and records of the Seller and the Seller has
determined that
the disposition of the Mortgage Loans pursuant to this Agreement
will be
afforded sale treatment for tax and accounting purposes; and
(o) Reasonable Purchase Price. The consideration received by
the
Seller upon the sale of the Mortgage Loans under this Agreement
constitutes
fair consideration and reasonably equivalent value for the Mortgage
Loans.
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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
have been made and credited. No payment required under the Mortgage
Loan is 30
days or more delinquent nor has any payment under the Mortgage Loan
been 30
days or more delinquent at any time since the origination of the
Mortgage Loan;
(c) No
Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments,
insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground
rents which previously became due and owing have been paid, or an
escrow of
funds has been established in an amount sufficient to pay for every
such item
which remains unpaid and which has been assessed but is not yet due
and
payable. The Seller has not advanced funds, or induced, solicited
or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or
indirectly, for the payment of any amount required under the
Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or
date of
disbursement of the Mortgage Loan proceeds, whichever is earlier,
to the day
which precedes by one month the related Due Date of the first
installment of
principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note
and
Mortgage have not been impaired, waived, altered or modified in any
respect,
from the date of origination except by a written instrument which
has been
recorded, if necessary to protect the interests of the Purchaser,
and which has
been delivered to the Custodian or to such other Person as the
Purchaser shall
designate in writing, and the terms of which are reflected in the
related
Mortgage Loan Schedule. The substance of any such waiver,
alteration or
modification has been approved by the issuer of any related PMI
Policy and the
title insurer, if any, to the extent required by the policy, and
its terms are
reflected on the related Mortgage Loan Schedule, if applicable. No
Mortgagor
has been released, in whole or in part, except in connection with
an assumption
agreement, approved by the issuer of any related PMI Policy and the
title
insurer, to the extent required by the policy, and which assumption
agreement
is part of the Mortgage Loan File delivered to the Custodian or to
such other
Person as the Purchaser shall designate in writing and the terms of
which are
reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right
of
rescission, set-off, counterclaim or defense, including without
limitation the
defense of usury, nor will the operation of any of the terms of the
Mortgage
Note or the Mortgage, or the exercise of any right thereunder,
render either
the Mortgage Note or the Mortgage unenforceable, in whole or in
part, or
subject to any right of rescission, set-off, counterclaim or
defense, including
without limitation
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<PAGE>
the defense of usury, and no such right of rescission, set-off,
counterclaim or
defense has been asserted with respect thereto;
(f)
Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are
insured by a
generally acceptable insurer against loss by fire, hazards of
extended coverage
and such other hazards as are provided for in the Underwriting
Guidelines. If
required by the National Flood Insurance Act of 1968, as amended,
each Mortgage
Loan is covered by a flood insurance policy meeting the
requirements of the
current guidelines of the Federal Insurance Administration as in
effect which
policy conforms with the Underwriting Guidelines. All individual
insurance
policies contain a standard mortgagee clause naming the Seller and
its
successors and assigns as mortgagee, and all premiums thereon have
been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the
hazard
insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain
and maintain
such insurance at such Mortgagor's cost and expense, and to seek
reimbursement
therefor from the Mortgagor. Where required by state law or
regulation, the
Mortgagor has been given an opportunity to choose the carrier of
the required
hazard insurance, provided the policy is not a "master" or
"blanket" hazard
insurance policy covering a condominium, or any hazard insurance
policy
covering the common facilities of a planned unit development. The
hazard
insurance policy is the valid and binding obligation of the
insurer, is in full
force and effect, and will be in full force and effect and inure to
the benefit
of the Purchaser upon the consummation of the transactions
contemplated by this
Agreement. The Seller has not engaged in, and has no knowledge
(based upon
reasonable and diligent inquiry) of the Mortgagor's having engaged
in, any act
or omission which would impair the coverage of any such policy, the
benefits of
the endorsement provided for herein, or the validity and binding
effect of
either including, without limitation, no unlawful fee, commission,
kickback or
other unlawful compensation or value of any kind has been or will
be received,
retained or realized by any attorney, firm or other person or
entity, and no
such unlawful items have been received, retained or realized by the
Seller;
(g) Compliance with Applicable Laws. Any and all requirements
of
any federal, state or local law including, without limitation,
usury,
truth-in-lending, real estate settlement procedures, consumer
credit
protection, predatory and abusive lending, equal credit opportunity
and
disclosure laws applicable to the Mortgage Loan, including, without
limitation,
any provisions relating to a Prepayment Penalty have been complied
with, the
consummation of the transactions contemplated hereby will not
involve the
violation of any such laws or regulations, and the Seller shall
maintain in its
possession, available for the Purchaser's inspection, and shall
deliver to the
Purchaser upon demand, evidence of compliance with all such
requirements. This
representation and warranty is a Deemed Material and Adverse
Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in
part, and the
Mortgaged Property has not been released from the lien of the
Mortgage, in
whole or in part, nor has any instrument been executed that would
effect any
such release, cancellation, subordination or rescission. The Seller
has not
waived the performance by the Mortgagor of any action, if the
Mortgagor's
failure to perform such action would cause the Mortgage Loan to be
in default,
nor has the Seller waived any default resulting from any action or
inaction by
the Mortgagor;
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<PAGE>
(i) Type of Mortgaged Property. With respect to a Mortgage Loan
that is not a Co-op Loan and is not secured by an interest in a
leasehold
estate, the Mortgaged Property is a fee simple estate that consists
of a single
parcel of real property with a detached single family residence
erected
thereon, or a two- to four-family dwelling, or an individual
residential
condominium unit in a condominium project, or an individual unit in
a planned
unit development (or, with respect to each Co-op Loan, an
individual unit in a
residential cooperative housing corporation); provided, however,
that any
condominium unit, planned unit development or residential
cooperative housing
corporation shall conform with the Underwriting Guidelines. No
portion of the
Mortgaged Property (or underlying Mortgaged Property, in the case
of a Co-op
Loan) is used for commercial purposes, and since the date of
origination, no
portion of the Mortgaged Property has been used for commercial
purposes;
provided, that Mortgaged Properties which contain a home office
shall not be
considered as being used for commercial purposes as long as the
Mortgaged
Property has not been altered for commercial purposes and is not
storing any
chemicals or raw materials other than those commonly used for
homeowner repair,
maintenance and/or household purposes. None of the Mortgaged
Properties are
Manufactured Homes, log homes, mobile homes, geodesic domes or
other unique
property types. This representation and warranty is a Deemed
Material and
Adverse Representation;;
(j) Valid First or
Second Lien. The Mortgage is a valid,
subsisting, enforceable and perfected, first lien (with respect to
a First Lien
Loan) or second lien (with respect to a Second Lien Loan) on the
Mortgaged
Property, including all buildings and improvements on the Mortgaged
Property
and all installations and mechanical, electrical, plumbing, heating
and air
conditioning systems located in or annexed to such buildings, and
all
additions, alterations and replacements made at any time with
respect to the
foregoing. The lien of the Mortgage is subject only to:
(i) with respect
to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(ii) the lien of
current real property taxes and assessments not
yet due and payable;
(iii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the
date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator
of the Mortgage Loan and (A) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(iv) other matters to
which like properties are commonly subject
which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
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<PAGE>
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and
creates a valid, subsisting, enforceable and perfected first lien
(with respect
to a First Lien Loan) or second lien (with respect to a Second Lien
Loan) and
first priority (with respect to a First Lien Loan) or second
priority (with
respect to a Second Lien Loan) security interest on the property
described
therein and the Seller has full right to sell and assign the same
to the
Purchaser.
With respect to any Co-op Loan, the related Mortgage is a
valid,
subsisting and enforceable first priority security interest on the
related
cooperative shares securing the Mortgage Note, subject only to (a)
liens of the
related residential cooperative housing corporation for unpaid
assessments
representing the Mortgagor's pro rata share of the related
residential
cooperative housing corporation's payments for its blanket
mortgage, current
and future real property taxes, insurance premiums, maintenance
fees and other
assessments to which like collateral is commonly subject and (b)
other matters
to which like collateral is commonly subject which do not
materially interfere
with the benefits of the security interest intended to be provided
by the
related Security Agreement;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a
Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal,
valid and
binding obligation of the maker thereof enforceable in accordance
with its
terms (including, without limitation, any provisions therein
relating to
Prepayment Penalties). All parties to the Mortgage Note, the
Mortgage and any
other such related agreement had legal capacity to enter into the
Mortgage Loan
and to execute and deliver the Mortgage Note, the Mortgage and any
such
agreement, and the Mortgage Note, the Mortgage and any other such
related
agreement have been duly and properly executed by other such
related parties.
No fraud, error, omission, misrepresentation, negligence or similar
occurrence
with respect to a Mortgage Loan has taken place on the part of the
Seller in
connection with the origination of the Mortgage Loan or in the
application of
any insurance in relation to such Mortgage Loan. The documents,
instruments and
agreements submitted for loan underwriting were not falsified and
contain no
untrue statement of material fact or omit to state a material fact
required to
be stated therein or necessary to make the information and
statements therein
not misleading. No fraud, error, omission, misrepresentation,
negligence or
similar occurrence with respect to a Mortgage Loan has taken place
on the part
of any Person, including without limitation, the Mortgagor, any
appraiser, any
builder or developer, or any other party involved in the
origination of the
Mortgage Loan or in the application for any insurance in relation
to such
Mortgage Loan. The Seller has reviewed all of the documents
constituting the
Servicing File and has made such inquiries as it deems necessary to
make and
confirm the accuracy of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully
disbursed and
there is no requirement for future advances thereunder, and any and
all
requirements as to completion of any on-site or off-site
improvement and as to
disbursements of any escrow funds therefor have been complied with.
All costs,
fees and expenses incurred in making or closing the Mortgage Loan
and the
recording of the Mortgage were paid, and the Mortgagor is not
entitled to any
refund of any amounts paid or due under the Mortgage Note or
Mortgage;
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(m) Ownership. The Seller is the sole owner of record and holder
of
the Mortgage Loan and the indebtedness evidenced by each Mortgage
Note and upon
the sale of the Mortgage Loans to the Purchaser, the Seller will
retain the
Mortgage Files or any part thereof with respect thereto not
delivered to the
Custodian, the Purchaser or the Purchaser's designee, in trust only
for the
purpose of servicing and supervising the servicing of each Mortgage
Loan. The
Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible
and marketable title thereto, and has full right to transfer and
sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity,
participation interest, lien, pledge, charge, claim or security
interest, and
has full right and authority subject to no interest or
participation of, or
agreement with, any other party, to sell and assign each Mortgage
Loan pursuant
to this Agreement and following the sale of each Mortgage Loan,
such Mortgage
Loan will be free and clear of any encumbrance, equity,
participation interest,
lien, pledge, charge, claim or security interest. The Seller
intends to
relinquish all rights to possess, control and monitor the Mortgage
Loan, except
as may be required of the Seller in its Mortgage capacity as
Servicer of such
Mortgage Loan. After the related Closing Date, the Seller will have
no right to
modify or alter the terms of the sale of the Mortgage Loan and the
Seller will
have no obligation or right to repurchase the Mortgage Loan or
substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in
the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or,
during the period in which they held and disposed of such interest,
were) (1)
in compliance with any and all applicable licensing requirements of
the laws of
the state wherein the Mortgaged Property is located, and (2) either
(i)
organized under the laws of such state, or (ii) qualified to do
business in
such state, or (iii) a federal savings and loan association, a
savings bank or
a national bank having a principal office in such state, or (3) not
doing
business in such state;
(o) CLTV, LTV and PMI Policy. No Mortgage Loan that is a Second
Lien Loan has a CLTV greater than 100%. No Mortgage Loan has an LTV
greater
than 100%. Any Mortgage Loan that had at the time of origination an
LTV in
excess of 80% is insured as to payment defaults by a PMI Policy.
Any PMI Policy
in effect covers the related Mortgage Loan for the life of such
Mortgage Loan.
All provisions of such PMI Policy have been and are being complied
with, such
policy is in full force and effect, and all premiums due thereunder
have been
paid. No action, inaction, or event has occurred and no state of
facts exists
that has, or will result in the exclusion from, denial of, or
defense to
coverage. Any Mortgage Loan subject to a PMI Policy obligates the
Mortgagor
thereunder to maintain the PMI Policy and to pay all premiums and
charges in
connection therewith. The Mortgage Interest Rate for the Mortgage
Loan as set
forth on the related Mortgage Loan Schedule is net of any such
insurance
premium if the related PMI Policy is lender-paid;
(p) Title Insurance. With respect to a Mortgage Loan which is not
a
Co-op Loan, the Mortgage Loan is covered by an ALTA lender's title
insurance
policy or other generally acceptable form of policy or insurance
acceptable
under the Underwriting Guidelines and each such title insurance
policy is
issued by a title insurer acceptable under the Underwriting
Guidelines and
qualified to do business in the jurisdiction where the Mortgaged
Property is
located, insuring the Seller, its successors and assigns, as to the
first (with
respect to a First Lien Loan) or second (with respect to a Second
Lien Loan)
priority lien of the Mortgage in the original principal amount of
the Mortgage
Loan (or to the extent a Mortgage Note provides for
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negative amortization, the maximum amount of negative amortization
in
accordance with the Mortgage), subject only to the exceptions
contained in
clauses (i), (ii), (iii) and (iv) of paragraph (j) of this
Subsection 9.02, and
in the case of Adjustable Rate Mortgage Loans, against any loss by
reason of
the invalidity or unenforceability of the lien resulting from the
provisions of
the Mortgage providing for adjustment to the Mortgage Interest Rate
and Monthly
Payment. Where required by state law or regulation, the Mortgagor
has been
given the opportunity to choose the carrier of the required
mortgage title
insurance. Additionally, such lender's title insurance policy
affirmatively
insures ingress and egress, and against encroachments by or upon
the Mortgaged
Property or any interest therein. The Seller, its successor and
assigns, are
the sole insured of such lender's title insurance policy, and such
lender's
title insurance policy is valid and remains in full force and
effect and will
be in force and effect upon the consummation of the transactions
contemplated
by this Agreement. No claims have been made under such lender's
title insurance
policy, and no prior holder of the related Mortgage, including the
Seller, has
done, by act or omission, anything which would impair the coverage
of such
lender's title insurance policy, including without limitation, no
unlawful fee,
commission, kickback or other unlawful compensation or value of any
kind has
been or will be received, retained or realized by any attorney,
