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MASTER
LOAN PURCHASE AND SERVICING AGREEMENT
INDYMAC BANK, F.S.B.
Seller and
Servicer
UBS REAL ESTATE SECURITIES INC.
Initial
Purchaser
Dated as of September 1, 2006
Fixed and Adjustable Rate Loans
TABLE OF CONTENTS
Page
SECTION 1.
Definitions..
1
SECTION 2.
Agreement to Purchase..
15
SECTION 3.
Loan Schedules.
15
SECTION 4.
Purchase Price..
15
SECTION 5.
Examination of Loan Files.
16
SECTION 6.
Conveyance from Seller to Initial
Purchaser.
16
Subsection 6.01.
Conveyance of Loans; Possession of Servicing
Files.
16
Subsection 6.02.
Books and Records.
16
Subsection 6.03.
Delivery of Loan Documents.
17
SECTION 7.
Representations, Warranties and Covenants;
Remedies for Breach.
18
Subsection 7.01.
Representations and Warranties Respecting the
Seller.
18
Subsection 7.02.
Representations and Warranties Regarding
Individual Loans.
20
Subsection 7.03.
Remedies for Breach of Representations and
Warranties.
32
Subsection 7.04.
Repurchase of Convertible Loans.
34
Subsection 7.05.
Repurchase of Certain Loans.
34
Subsection 7.06.
Purchase Price Protection.
35
SECTION 8.
Closing.
35
SECTION 9.
Closing Documents.
36
SECTION 10.
Costs.
37
SECTION 11.
Seller’s Servicing Obligations.
37
SECTION 12.
Whole Loan Transfer or a Securitization
Transaction on One or More Reconstitution Dates.
37
SECTION 13.
The Seller.
40
Subsection 13.01.
Additional Indemnification by the
Seller.
40
Subsection 13.02.
Merger or Consolidation of the Seller.
40
Subsection 13.03.
Limitation on Liability of the Seller and
Others.
40
Subsection 13.04.
Seller Not to Resign.
41
Subsection 13.05.
No Transfer of Servicing.
41
SECTION 14.
DEFAULT.
41
Subsection 14.01.
Events of Default.
41
Subsection 14.02.
Waiver of Defaults.
42
SECTION 15.
Termination..
43
SECTION 16.
Successor to the Seller.
43
SECTION 17.
Financial Statements.
44
SECTION 18.
Rights Cumulative.
44
SECTION 19.
Notices.
45
SECTION 20.
Severability Clause.
45
SECTION 21.
Counterparts..
46
SECTION 22.
GOVERNING LAW..
46
SECTION 23.
Intention of the Parties..
46
SECTION 24.
Successors and Assigns..
46
SECTION 25.
Waivers.
47
SECTION 26.
Exhibits.
47
SECTION 27.
Nonsolicitation.
47
SECTION 28.
Relationship of the Parties..
47
SECTION 29.
General Interpretive Principles.
47
SECTION 30.
Reproduction of Documents..
48
SECTION 31.
Further Agreements.
48
SECTION 32.
Third Party Beneficiary.
48
SECTION 33.
[Reserved].
48
SECTION 34.
Compliance With Regulation AB.
48
Subsection 34.01.
Intent of the Parties; Reasonableness.
48
Subsection 34.02.
Additional Representations and Warranties of the
Seller.
49
Subsection 34.03.
Information to Be Provided by the
Seller.
50
Subsection 34.04.
Servicer Compliance Statement.
56
Subsection 34.05.
Report on Assessment of Compliance and
Attestation.
56
Subsection 34.06.
Use of Subservicers and
Subcontractors.
58
Subsection 34.07.
Indemnification; Remedies.
59
Subsection 34.08.
Third Party Beneficiary.
62
EXHIBITS
EXHIBIT 1
SELLER’S OFFICER’S CERTIFICATE
EXHIBIT 2
FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 3
SECURITY RELEASE CERTIFICATION
EXHIBIT 4
ASSIGNMENT AND CONVEYANCE
EXHIBIT 5
CONTENTS OF EACH LOAN FILE
EXHIBIT 6
LOAN DOCUMENTS
EXHIBIT 7
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 8
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 9
SERVICING ADDENDUM
EXHIBIT 10
SELLER UNDERWRITING STANDARDS
EXHIBIT 11
FORM OF SERVICER’S OFFICER’S CERTIFICATE
EXHIBIT 12
FORM OF ANNUAL CERTIFICATION
EXHIBIT 13
SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE
EXHIBIT 14-1
STANDARD FILE LAYOUT – MASTER SERVICING
EXHIBIT 14-2
STANDARD FILE LAYOUT – DELINQUENCY REPORTING
EXHIBIT 14-3
FORM 332
MASTER LOAN PURCHASE AND SERVICING
AGREEMENT
This is a MASTER LOAN PURCHASE AND SERVICING AGREEMENT (the
"Agreement"), dated as of September 1, 2006, by and between UBS
Real Estate Securities Inc., having an office at 1285 Avenue of the
Americas, New York, New York 10019 (the "Initial Purchaser", and
the Initial Purchaser or the Person, if any, to which the Initial
Purchaser has assigned its rights and obligations hereunder as
Purchaser with respect to one or more Loans, and each of their
respective successors and assigns, the "Purchaser") and IndyMac
Bank, F.S.B., having an office at 3465 E. Foothill Blvd., 2nd
Floor, Pasadena, California 91107 (the "Seller").
W I T N E
S S E T H :
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser may purchase, from time to time, from
the Seller, certain conventional fixed rate and adjustable rate
residential first lien mortgage loans (the "Loans") and certain
fixed and adjustable rate first lien cooperative loans (the
"Cooperative Loans") as described herein on a servicing-retained
basis, which shall be delivered in groups of whole loans on various
dates as provided herein (each, a "Closing Date");
WHEREAS, each Loan is secured by a mortgage, deed of trust or
other security instrument creating a first lien on a residential
dwelling located in the jurisdiction indicated on the Loan Schedule
for the related Loan Package, which is to be annexed to the related
Assignment and Conveyance;
WHEREAS, each Cooperative Loan is secured by a pledge of shares
of stock issued by a Cooperative and the assignment of the
appurtenant proprietary lease, all relating to a specified dwelling
unit in an apartment building owned by the Cooperative and located
in the states indicated on the Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the
manner of the conveyance, servicing and control of the Loans and
Cooperative Loans; and
WHEREAS, following its purchase of the Loans and Cooperative
Loans from the Seller, the Purchaser desires to sell some or all of
the Loans and Cooperative Loans to one or more purchasers pursuant
to a whole loan transfer in a whole loan or participation format or
a public or private mortgage-backed securities transaction;
WHEREAS, the Agreement shall supersede all other agreements
between the Purchaser and the Seller;
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
Loan, those mortgage servicing practices (including collection
procedures) of prudent mortgage lending institutions which service
loans of the same type as such Loan in the jurisdiction where the
related Mortgaged Property or Cooperative Apartment is located and
in accordance with applicable law, and the terms of the Mortgage
and Note.
Adjustable Rate Loan : A Loan which provides for
the adjustment of the Loan Interest Rate payable in respect
thereto.
Adjustment Date : With respect to each Adjustable
Rate Loan, the date set forth in the related Note on which the Loan
Interest Rate on such Adjustable Rate Loan is adjusted in
accordance with the terms of the related Note.
Agreement : This Master Loan Purchase and Servicing
Agreement including all exhibits, schedules, amendments and
supplements hereto.
Appraised Value : With respect to any Mortgaged
Property, the lesser of (i) the value thereof as determined by the
appraisal in the related Loan File made for the originator of the
Loan at the time of origination of the Loan and (ii) the purchase
price paid for the related Mortgaged Property by the Mortgagor with
the proceeds of the Loan, provided, however, in the case of a
Refinanced Loan, such value of the Mortgaged Property is based
solely upon the value determined by an appraisal made for the
originator of such Refinanced Loan at the time of origination of
such Refinanced Loan.
Assignment and Conveyance : An assignment and
conveyance of the Loans purchased on a Closing Date in the form
annexed hereto as Exhibit 4 .
Assignment of Mortgage : With respect to each Loan
which is not a MERS Loan, an individual assignment of Mortgage,
notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related
Mortgaged Property is located to give record notice of the sale of
the Mortgage to the Purchaser.
Assignment of the Note and Pledge Agreement : With
respect to a Cooperative Loan, an assignment of the Note and Pledge
Agreement.
Assignment of Proprietary Lease : An assignment of
the Proprietary Lease.
Balloon Mortgage Loan : A Loan that provided on the
date of origination for an amortization schedule extending beyond
its maturity date.
Borrower : The obligor on a Note, the owner of the
Mortgaged Property and the grantor or borrower named in the related
Mortgage and such grantor’s or borrower’s successors in
title to the Mortgaged Property.
Business Day : Any day other than a Saturday or
Sunday, or a day on which banking and savings and loan institutions
in the State of New York or the State of California are authorized
or obligated by law or executive order to be closed.
Cash-Out Refinancing : A Refinanced Loan the
proceeds of which were in excess of the greater of $2,000 or 2% of
the principal balance of any existing first mortgage (and any
existing junior mortgages, if applicable) on the related Mortgaged
Property and related closing costs, and were used to pay any such
existing first mortgage (and any existing junior mortgages,
if applicable), related closing costs, subordinate mortgages
on the related Mortgaged Property and to provide additional
proceeds for the use of the Borrower.
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 to the Purchaser, the Loans listed on the
related Loan Schedule with respect to the related Loan Package.
Closing Documents : With respect to any Closing
Date, the documents required pursuant to Section 9.
Code : The Internal Revenue Code of 1986, 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 by exercise of the power of condemnation or the
right of eminent domain.
Confirmation : With respect to any Loan Package
purchased and sold on any Closing Date, the letter agreement
between the Purchaser and the Seller (including any exhibits,
schedules and attachments thereto), setting forth the terms and
conditions of such transaction and describing the Loans to be
purchased by the Purchaser on such Closing Date. A Confirmation may
relate to more than one Loan Package to be purchased on one or more
Closing Dates hereunder.
Consent : With respect to each Cooperative Loan, a
document executed by the Cooperative (i) consenting to the sale of
the Cooperative Apartment to the Mortgagor and (ii) certifying that
all maintenance charges relating to the Cooperative Apartment have
been paid.
Convertible Loan : A Loan that by its terms and
subject to certain conditions contained in the related Mortgage or
Note allows the Borrower to convert the adjustable Loan Interest
Rate on such Loan to a fixed Loan Interest Rate.
Cooperative : With respect to each Cooperative
Loan, the private, non-profit cooperative apartment corporation
which owns all of the real property that comprises the Project,
including the land, separate dwelling units and all common areas.
Cooperative Apartment : The specific dwelling unit
relating to a Cooperative Loan.
Cooperative Lien Search : With respect to each
Cooperative Loan, a search for (a) federal tax liens, mechanics'
liens, lis pendens, judgments of record or otherwise against (i)
the Cooperative, (ii) the seller of the Cooperative Apartment and
(iii) the Mortgagor if the Cooperative Loan is a Refinanced Loan,
(b) filings of Financing Statements and (c) the deed of the Project
into the Cooperative.
Cooperative Loan : Any Loan secured by Cooperative
Shares and the related Proprietary Lease conferring exclusive
occupancy rights to a cooperative unit.
Cooperative Shares : The shares of stock issued by
the Cooperative, owned by the Mortgagor, and allocated to a
Cooperative Apartment and represented by a Stock Certificate.
Custodial Account : The separate account or
accounts, each of which shall be an Eligible Account, created and
maintained pursuant to this Agreement, which shall be entitled
"IndyMac Bank, F.S.B., as servicer, in trust for the Purchaser,
Fixed and Adjustable Rate Loans."
Custodial Agreement : The agreement governing the
retention of the originals of each Note, Mortgage, Assignment of
Mortgage and other Loan Documents.
Custodian : The custodian under the Custodial
Agreement, or its successor in interest or assigns, or any
successor to the Custodian under the Custodial Agreement, as
therein provided.
Cut-off Date : The first day of the month in which
the related Closing Date occurs.
Deleted Loan : A Loan replaced or to be replaced by
a Qualified Substitute Loan.
Depositor : The depositor, as such term is defined in
Regulation AB, with respect to any Securitization Transaction.
Determination Date : With respect to each
Distribution Date, the fifteenth (15th) day of the calendar month
in which such Distribution Date occurs or, if such fifteenth (15th)
day is not a Business Day, the Business Day immediately preceding
such fifteenth (15th) day.
Distribution Date : The eighteenth (18th) day of
each month, commencing on the eighteenth day of the month next
following the month in which the related Cut-off Date occurs, or if
such eighteenth (18th) day is not a Business Day, the first
Business Day immediately preceding such eighteenth (18th) day.
Due Date : With respect to each Distribution Date,
the first day of the calendar month in which such Distribution Date
occurs, which is the day on which the Monthly Payment is due on a
Loan, exclusive of any days of grace.
Due Period : With respect to each Distribution
Date, the period commencing on the second day of the month
preceding the month of the Distribution Date and ending on the
first day of the month of the Distribution Date.
Eligible Account : Any of (i) an account or
accounts maintained with a federal or state chartered depository
institution or trust company, the short-term unsecured debt
obligations of which (or, in the case of a depository institution
or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding
company) are rated "P-1" by Moody’s and "A-1" by S&P (or
comparable ratings if Moody’s and S&P are not the Rating
Agencies) at the time any amounts are held on deposit therein, or
(ii) an account or accounts in a depository institution or trust
company in which such accounts are fully insured by the FDIC, or
(iii) a trust account or accounts maintained with (a) the trust
department of a federal or state chartered depository institution
or (b) a trust company, acting in its fiduciary capacity.
Escrow Account : The separate trust account or
accounts created and maintained pursuant to this Agreement, each of
which shall be an Eligible Account, and each of which shall be
entitled "IndyMac Bank, F.S.B., as servicer, in trust for the
Purchaser and various Borrowers, Fixed and Adjustable Rate
Loans."
Escrow Payments : The amounts constituting ground
rents, taxes, assessments, water charges, sewer rents, Primary
Insurance Policy premiums, LPMI Policy premiums, fire and hazard
insurance premiums and other payments required to be escrowed by
the Borrower with the Mortgagee pursuant to the terms of any Note
or Mortgage.
Exchange Act : The Securities Exchange Act of 1934, as
amended.
Event of Default : Any one of the events enumerated
in Section 14.01.
Fannie Mae : Fannie Mae, f/k/a Federal National
Mortgage Association, or any successor thereto.
Fannie Mae Guides : The Fannie Mae Sellers’
Guide and the Fannie Mae Servicers’ Guide and all amendments
or additions thereto.
FDIC : The Federal Deposit Insurance Corporation,
or any successor thereto.
Final Recovery Determination : With respect to any
defaulted Loan or any REO Property (other than a Loan or REO
Property purchased by the Seller pursuant to this Agreement), a
determination made by the Seller that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the
Seller, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered. The
Seller shall maintain records, prepared by a servicing officer of
the Seller, of each Final Recovery Determination.
Financing Statement : A financing statement in the
form of a UCC-1 filed pursuant to the Uniform Commercial Code to
perfect a security interest in the Cooperative Shares and Pledge
Instruments.
Fixed Rate Loan : A Loan with respect to which the
Loan Interest Rate set forth in the Note is fixed for the term of
such Loan.
Freddie Mac : Freddie Mac, f/k/a/The Federal Home
Loan Mortgage Corporation, or any successor thereto.
GAAP : Generally accepted accounting principals in
the United States of America in effect from time to time.
Gross Margin : With respect to any Adjustable Rate
Loan, the fixed percentage amount set forth in the related Note
that is added to the Index on each Adjustment Date in accordance
with the terms of the related Note to determine the new Loan
Interest Rate for such Loan.
HUD : The United States Department of Housing and
Urban Development or any successor thereto.
Index : With respect to any Adjustable Rate Loan,
the index set forth in the related Note for the purpose of
calculating the interest rate thereon.
Initial Closing Date : The Closing Date on which
the Initial Purchaser purchases and the Seller sells the first Loan
Package hereunder.
Initial Purchaser : UBS Real Estate Securities
Inc., or any successor.
Initial Rate Cap : With respect to each Adjustable
Rate Loan and the initial Adjustment Date therefor, a number of
percentage points per annum that is set forth in the related Note,
which is the maximum amount by which the Loan Interest Rate for
such Adjustable Rate Loan may increase or decrease on such
Adjustment Date from the Loan Interest Rate in effect immediately
prior to such Adjustment Date.
Insurance Proceeds : With respect to each Loan,
proceeds of insurance policies insuring the Loan or the related
Mortgaged Property.
Liquidation Proceeds : Amounts, other than
Insurance Proceeds and Condemnation Proceeds, received in
connection with the liquidation of a defaulted Loan through
trustee’s sale, foreclosure sale or otherwise, other than
amounts received following the acquisition of REO Property.
Loan : Each first lien, residential loan, sold,
assigned and transferred to the Purchaser pursuant to this
Agreement and the related Confirmation and identified on the Loan
Schedule, which Loan includes without limitation the Loan File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition
proceeds, and all other rights, benefits, proceeds and obligations
arising from or in connection with such Loan. Unless otherwise
indicated herein, all references to "Loans" or "Loan" shall include
Cooperative Loans.
Loan Documents : The documents listed in
Exhibit 6 annexed hereto pertaining to any Loan.
Loan File : The items pertaining to a particular
Loan referred to in Exhibit 5 annexed hereto, and any
additional documents required to be added to the Loan File pursuant
to this Agreement or the related Confirmation.
Loan Interest Rate : With respect to each Fixed
Rate Loan, the fixed annual rate of interest provided for in the
related Note and, with respect to each Adjustable Rate Loan, the
annual rate at which interest accrues on such Adjustable Rate Loan
from time to time in accordance with the provisions of the related
Note.
Loan Package : The Loans listed on a Loan Schedule,
delivered to the Custodian and the Purchaser at least two (2)
Business Days prior to the related Closing Date and attached to the
related Assignment and Conveyance on the related Closing Date.
Loan Schedule : With respect to each Loan Package,
the schedule of Loans to be annexed to the related Assignment and
Conveyance on each Closing Date for the Loan Package delivered on
such Closing Date, such schedule setting forth, but not limited to,
the following information with respect to each Loan in such Loan
Package: (1) the Loan identification number; (2) a code indicating
whether the Loan is an Adjustable Rate Loan or a fixed rate Loan;
(3) the Borrower’s first and last name; (4) the street
address of the Mortgaged Property or Cooperative Apartment
including the city, state and zip code; (5) the original principal
balance of the Loan; (6) the Stated Principal Balance of the Loan
as of the close of business on the Cut-off Date; (7) the actual
unpaid principal balance of the Loan as of the close of business on
the Cut-off Date; (8) the last scheduled Due Date on which a
Monthly Payment was applied to the Scheduled Principal Balance; (9)
the last Due Date on which a Monthly Payment was actually applied
to the actual unpaid principal balance; (10) the Loan Interest Rate
in effect immediately following origination; (11) the Loan Interest
Rate in effect immediately following the Cut-off Date (if different
from (10)); (12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment as of the Cut-off Date (if
different from (12)); (14) a code indicating whether the Mortgaged
Property or Cooperative Apartment is owner-occupied, a second home
or an investor property; (15) a code indicating whether the
Mortgaged Property is a single family residence, a two-family
residence, a three-family residence, a four-family residence, a
planned-unit development, or a condominium; (16) a code indicating
the loan purpose (i.e., purchase, rate/term refinance, cash-out
refinance); (17) the stated maturity date; (18) the original months
to maturity; (19) the remaining months to maturity from the Cut-off
Date based on the original amortization schedule and, if different,
the remaining months to maturity expressed in the same manner but
based on the actual amortization schedule; (20) the origination
date of the Loan; (21) the Appraised Value (including the purchase
price of the Mortgaged Property, if applicable) and Loan-to-Value
Ratio at origination; (22) the date on which the first Monthly
Payment was due on the Loan after the origination date; (23) with
respect to each Adjustable Rate Loan, the Index; (24) with respect
to each Adjustable Rate Loan, the type of Adjustable Rate Loan
(i.e., 1/1, 3/1, 5/1, etc.); (25) with respect to each Adjustable
Rate Loan, the Gross Margin; (26) with respect to each Adjustable
Rate Loan, the Periodic Rate Cap; (27) with respect to each
Adjustable Rate Loan, the Initial Rate Cap (if different from the
Periodic Rate Cap) (28) with respect to each Adjustable Rate Loan,
the Maximum Loan Interest Rate; (29) with respect to each
Adjustable Rate Loan, the Minimum Loan Interest Rate; (30) with
respect to each Adjustable Rate Loan, the first Adjustment Date
immediately following origination; (31) with respect to each
Adjustable Rate Loan, the first Adjustment Date immediately
following the Cut-off Date (if different from (30)); (32) a code
indicating the documentation style of the Loan; (33) a code
indicating if the Loan is subject to a Primary Insurance Policy or
LPMI Policy and, if so, the name of the Qualified Insurer, the
certificate number and the coverage amount of such policy; (34) the
Servicing Fee Rate; (35) a code indicating whether or not an
Adjustable Rate Loan is convertible to a fixed interest rate; (36)
the Seller’s program pursuant to which the Loan was
underwritten; (37) a code indicating whether the Loan is subject to
a prepayment penalty and, if so, the term of such prepayment
penalty; (38) the credit score (or mortgage score) of the Borrower;
(39) the
debt-to-income ratio of the Loan; (40) a code indicating whether
the Loan is a MERS Loan and, if so, the corresponding MIN; (41) a
code indicating the form of appraisal in the related Loan File
(i.e. form 1004, 2055, etc.); (42) a code indicating whether the
Loan is a "Home Loan" as defined in the current Standard &
Poor’s LEVELS® Glossary Revised, Appendix E (43) a code
indicating if the Loan is a Negative Amortization Loan and if so,
the Negative Amortization Cap and the Payment Adjustment Date; (44)
a code indicating if the Loan is an interest-only Loan (including
any Loans with any interest-only features) and, if so, the term of
the interest-only period of such Loan; (45) a code indicating the
payment history over the twelve month period prior to the related
Cut-off Date (i.e., 0x30, 1x30, 2x30, etc.) and (46) a code
indicating whether the Loan is a Cooperative Loan. The Loan
Schedule shall set forth the following information, in aggregate,
as of the related Cut-off Date: (1) the number of Loans; (2) the
original principal balance of the Loans; (3) the Scheduled
Principal Balance of the Loans; (4) the weighted average Loan
Interest Rate of the Loans; (5) the weighted average Net Loan Rate
of the Loans; (4) the weighted average remaining months to maturity
of the Loans; and (5) with respect to Adjustable Rate Loans, the
weighted average Gross Margin and the weighted average number of
months until the next Adjustment Date. A Loan Schedule will be
prepared for each Closing Date and will be attached to the
Assignment and Conveyance. The Loan Schedule shall be delivered to
the Initial Purchaser and the Custodian in electronic format.
Loan-to-Value Ratio or LTV : With respect to any
Loan as of any date of determination, the ratio on such date of the
outstanding principal amount of the Loan, to the Appraised Value of
the Mortgaged Property.
LPMI Policy : A policy of mortgage guaranty insurance
issued by a Qualified Insurer in which the owner or servicer of the
Loan is responsible for the premiums associated with such mortgage
insurance policy.
LPMI Rate : The per annum rate used to calculate
the monthly premium with respect to any related LPMI Policy.
Master Servicer : With respect to any
Securitization Transaction, the "master servicer," if any,
identified in the related transaction documents.
MERS : Mortgage Electronic Registration Systems,
Inc., a corporation organized and existing under the laws of the
State of Delaware, or any successor thereto.
MERS Loan : Any Loan registered with MERS on the
MERS System.
MERS System : The system of recording transfers of
mortgages electronically maintained by MERS.
Maximum Loan Interest Rate : With respect to each
Adjustable Rate Loan, a rate that is set forth in the related Note
which is the maximum interest rate to which the Loan Interest Rate
on such Loan may be increased on any Adjustment Date.
MIN : The Mortgage Identification Number for any
MERS Loan.
Minimum Loan Interest Rate : With respect to each
Adjustable Rate Loan, a rate that is set forth in the related Note
which is the minimum interest rate to which the Loan Interest Rate
on such Loan may be decreased on any Adjustment Date.
MOM Loan : Any Loan as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Loan and
its successors and assigns.
Monthly Advance : The aggregate of the advances
made by the Seller on any Distribution Date pursuant to Section
11.21.
Monthly Payment : With respect to any Loan, the
scheduled combined payment of principal and interest payable by a
Borrower under the related Note on each Due Date.
Moody’s : Moody’s Investors Service,
Inc. or its successor in interest.
Mortgage : With respect to each Loan, the mortgage,
deed of trust or other instrument (including the Pledge Agreement,
with respect to each Cooperative Loan) creating a first lien on the
Mortgaged Property securing the related Note.
Mortgagee : The mortgagee or beneficiary named in
the Mortgage and the successors and assigns of such mortgagee or
beneficiary.
Mortgaged Property : (a) With respect to each Loan,
the Borrower’s real property securing repayment of the
related Note, consisting of real property improved by a Residential
Dwelling and (b) with respect to each Cooperative Loan, the
Cooperative Shares and Proprietary Lease.
Note : The original executed note or other evidence
of the Loan indebtedness of a Borrower.
Negative Amortization : With respect to each
Negative Amortization Loan, that portion of interest accrued at the
Mortgage Interest Rate in any month which exceeds the Monthly
Payment on the related Loan for such month and which, pursuant to
the terms of the Mortgage Note, is added to the principal balance
of the Loan.
Negative Amortization Cap : With respect to each
Negative Amortization Loan, the provision of each Mortgage Note
which provides for an absolute maximum percentage of the original
principal amount of such Loan that the outstanding principal amount
of the Loan may reach as a result of Negative Amortization as
specified on the Loan Schedule.
Negative Amortization Loan : Each Loan that is
identified on the Loan Schedule as a Loan that may be subject to
Negative Amortization.
Net Loan Rate : With respect to any Loan (or the
related REO Property), as of any date of determination, a per annum
rate of interest equal to the then applicable Loan Interest Rate
for such Loan minus the Servicing Fee Rate and the LPMI Rate, if
any.
Nonrecoverable Monthly Advance : Any Monthly
Advance previously made or proposed to be made in respect of a Loan
or REO Property that, in the good faith business judgment of the
Seller, will not, or, in the case of a proposed Monthly Advance,
would not be, ultimately recoverable from related late payments,
Insurance Proceeds or Liquidation Proceeds on such Loan or REO
Property as provided herein.
Officer’s Certificate : A certificate signed
by the Chairman of the Board or the Vice Chairman of the Board or a
President or a Vice President and by the Treasurer or the Secretary
or one of the Assistant Treasurers or Assistant Secretaries of the
Person on behalf of whom such certificate is being delivered.
Opinion of Counsel : A written opinion of counsel,
who may be an employee of the Person on behalf of whom the opinion
is being given, reasonably acceptable to each Person to whom such
opinion is addressed.
Payment Adjustment Date : With respect to each
Negative Amortization Loan, the date on which Monthly Payments
shall be adjusted. A Payment Adjustment Date with respect to
a Negative Amortization Loan shall occur on the dates specified on
the Loan Schedule.
Periodic Rate Cap : With respect to each Adjustable
Rate Loan and any Adjustment Date therefor, a number of percentage
points per annum that is set forth in the related Note, which is
the maximum amount by which the Loan Interest Rate for such
Adjustable Rate Loan may increase (without regard to the Maximum
Loan Interest Rate) or decrease (without regard to the Minimum Loan
Interest Rate) on such Adjustment Date from the Loan Interest Rate
in effect immediately prior to such Adjustment Date.
Person : An individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pledge Agreement : The specific agreement creating
a first lien on, and pledge of, the Cooperative Shares and the
appurtenant Proprietary Lease securing a Cooperative Loan.
Pledge Instruments : With respect to each
Cooperative Loan, the Stock Power, the Assignment of the
Proprietary Lease and the Assignment of the Note and Pledge
Agreement.
Primary Insurance Policy : A policy of primary
mortgage guaranty insurance issued by a Qualified Insurer.
Principal Prepayment : Any payment or other
recovery of principal on a Loan which is received in advance of its
scheduled Due Date, including any prepayment penalty or premium
thereon to the extent that the Purchaser is entitled to such
prepayment penalty or premium as set forth in the related
Confirmation and in the related Assignment and Conveyance, 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.
Project : With respect to each Cooperative Loan,
all real property owned by the Cooperative including the land,
separate dwelling units and all common areas.
Proprietary Lease : A lease on a Cooperative
Apartment evidencing the possessory interest of the Mortgagor in
such Cooperative Apartment.
Purchase Price : The price paid on the related
Closing Date by the Purchaser to the Seller pursuant to the related
Confirmation in exchange for the Loans purchased on such Closing
Date as calculated as provided in Section 4.
Qualified Correspondent : Any Person from which the
Seller purchased Loans, provided that the following conditions are
satisfied: (i) such Loans were originated pursuant to an agreement
between the Seller and such Person that contemplated that such
Person would underwrite mortgage loans from time to time, for sale
to the Seller, in accordance with underwriting guidelines
designated by the Seller ("Designated Guidelines") or guidelines
that do not vary materially from such Designated Guidelines; (ii)
such 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 Loans were originated, used by the Seller in
origination of mortgage loans of the same type as the Loans for the
Seller’s own account or (y) the Designated Guidelines were,
at the time such 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 Loans were acquired by the Seller, pre-purchase or
post-purchase quality assurance procedures (which may involve,
among other things, review of a sample of mortgage loans purchased
during a particular time period or through particular channels)
designed to ensure that Persons from which it purchased mortgage
loans properly applied the underwriting criteria designated by the
Seller.
Qualified Insurer : Any insurer duly authorized and
licensed where required by law to transact its business and which
meets the requirements of Fannie Mae and Freddie Mac.
Qualified Substitute Loan : A loan substituted for
a Deleted Loan pursuant to the terms of this Agreement which must,
on the date of such substitution, (i) have an outstanding
principal balance, after application of all scheduled payments of
principal and interest due during or prior to the month of
substitution, not in excess of the Stated Principal Balance of the
Deleted Loan as of the Due Date in the calendar month during which
the substitution occurs, (ii) have a Loan Interest Rate not
less than (and not more than one percentage point in excess of) the
Loan Interest Rate of the Deleted Loan, (iii) have a Net Loan Rate
equal to the Net Loan Rate of the Deleted Loan, (iv) have a
remaining term to maturity not greater than (and not more than one
year less than) that of the Deleted Loan, (v) have the same Due
Date as the Due Date on the Deleted Loan, (vi) have a Loan-to-Value
Ratio as of the date of substitution equal to or lower than the
Loan-to-Value Ratio of the Deleted Loan as of such date, (vii) be
covered under a Primary Insurance Policy if such Qualified
Substitute Loan has a Loan-to-Value Ratio in excess of 80%, (viii)
conform to each representation and warranty set forth in Section
7.02 of this Agreement and (ix) be the same type of loan (i.e.
fixed or adjustable rate with the same Gross Margin and Index as
the Deleted Loan). In the event that one or more loans are
substituted for one or more Deleted Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate
principal balances, the Loan Interest Rates described in clause
(ii) hereof shall be satisfied as to each such loan, the Net Loan
Rates described in clause (iii) hereof shall be satisfied as to
each such loan, the terms described in clause (iv) shall be
determined on the basis of weighted average remaining terms to
maturity, the Loan-to-Value Ratios described in clause (vi) hereof
shall be satisfied as to each such loan and, except to the extent
otherwise provided in this sentence, the representations and
warranties described in clause (viii) hereof must be satisfied as
to each Qualified Substitute Loan or in the aggregate, as the case
may be.
Rate/Term Refinancing : A Refinanced Loan, the
proceeds of which are not in excess of the greater of $2,000 or 2%
of the existing first lien loan (and any existing junior lien
loans, if applicable) of the related Mortgaged Property and related
closing costs, and were used exclusively to satisfy the then
existing first lien loan (and any existing junior lien loans, if
applicable) of the Borrower on the related Mortgaged Property and
to pay related closing costs.
Reconstitution : Any Securitization Transaction or Whole
Loan Transfer.
Recognition Agreement : An agreement whereby a
Cooperative and a lender with respect to a Cooperative Loan (i)
acknowledge that such lender may make, or intends to make, such
Cooperative Loan, and (ii) make certain agreements with respect to
such Cooperative Loan.
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 Loans serviced hereunder, in
connection with a Reconstitution as provided in Section 12;
provided , that, an assignment of this Agreement in
connection with a sale or transfer of any of the Loans shall not
constitute a "Reconstitution Agreement".
Reconstitution Date : The date or dates on which
any or all of the Loans serviced under this Agreement shall be
removed from this Agreement and reconstituted as part of a
Reconstitution pursuant to Section 12 hereof.
Record Date : With respect to each Distribution
Date, the last Business Day of the month immediately preceding the
month in which such Distribution Date occurs.
Refinanced Loan : A 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.
§§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 REMICs, which appear in Sections 860A through
860G of the Code; and related provisions, and proposed, temporary
and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Disposition : The final sale by the Seller of
any REO Property.
REO Property : A Mortgaged Property acquired as a
result of the liquidation of a Loan and, with respect to a
Cooperative Loan, the related Cooperative Apartment.
Repurchase Price : With respect to any Loan, a
price equal to (i) the product of (A) the Stated Principal Balance
of such Loan times (B) the greater of (x) the percentage of par
used to calculate the Purchase Price pursuant to the related
Confirmation and (y) 100%; provided, that if such Loan is subject
to a Securitization Transaction and the repurchase date occurs more
than one (1) year following the Closing Date the amount determined
under this clause (B) shall be 100%, plus (ii) interest on such
Stated Principal Balance at the Loan Interest Rate from and
including the last Due Date through which interest has been paid by
or on behalf of the Borrower to the first day of the month
following the date of repurchase, plus (iii) any costs and damages
incurred in connection with any violation of such Loan of any
predatory or abusive lending law; less amounts received in respect
of such repurchased Loan which are being held in the Custodial
Account for distribution in connection with such Loan.
Residential Dwelling : Any one of the following:
(i) a detached one-family dwelling, (ii) a detached two to
four-family dwelling, (iii) a one-family dwelling unit in a Fannie
Mae eligible condominium project, (iv) a detached one-family
dwelling in a planned unit development or (v) a Cooperative
Apartment, none of which is a mobile or manufactured home.
Sarbanes-Oxley Act : Means the Sarbanes-Oxley Act
of 2002 and the rules and regulations of the Commission promulgated
thereunder (including any interpretations thereof by the
Commission’s staff).
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 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 Loans.
Seller Information : As defined in Subsection
33.07(a).
Servicer : As defined in Subsection 33.03(c).
Servicing Addendum : The terms and conditions
attached hereto as Exhibit 9 which will govern the servicing
of the Loans by Seller.
Servicing Advances : All customary, reasonable and
necessary "out-of-pocket" costs and expenses incurred by the Seller
in the performance of its servicing obligations, including, but not
limited to, the cost of (i) preservation, restoration and repair of
a Mortgaged Property or, in the case of a Cooperative Loan, the
Cooperative Apartment, (ii) any enforcement or judicial proceedings
with respect to a Loan, including foreclosure actions and (iii) the
management and liquidation of REO Property.
Servicing Criteria : The "servicing criteria" set forth
in Item 1122(d) of Regulation AB, as such may be amended from time
to time.
Servicing Fee : With respect to each Loan, the
amount of the annual servicing fee the Purchaser shall pay to the
Seller, which shall, for each month, be equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the unpaid principal
balance of the Loan. Such fee shall be payable monthly, computed on
the basis of the same principal amount and period respecting which
any related interest payment on a Loan is computed. 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 and other proceeds, to the extent permitted by Section
11.05) of related Monthly Payments collected by the Seller.
Servicing Fee Rate : The per annum rate at which
the Servicing Fee accrues, which rate with respect to each Loan
shall be equal to the percentage specified as such on the Loan
Schedule.
Servicing File : With respect to each Loan, the
file retained by the Seller consisting of originals of all
documents in the Loan File which are not delivered to the Purchaser
or the Custodian and copies of the Loan Documents.
Standard
& Poor’s : Standard & Poor’s Rating
Services, a division of The McGraw-Hill Companies Inc., and its
successors in interest.
Stated Principal Balance : As to each Loan as of
any date of determination, (i) the principal balance of the Loan as
of the Cut-off Date after giving effect to payments of principal
due on or before such date, whether or not collected from the
Borrower on or before such date, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Loan
representing payments or recoveries of principal (or advances in
lieu thereof), plus (iii) the cumulative amount of any Negative
Amortization.
Static Pool Information : Static pool information as
described in Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Stock Certificates : With respect to each
Cooperative Loan, the certificates evidencing ownership of the
Cooperative Shares issued by the Cooperative.
Stock Power : With respect to each Cooperative
Loan, an assignment of the Stock Certificate or an assignment of
the Cooperative Shares issued by the Cooperative.
Subcontractor : Any vendor, subcontractor or other Person
that is not responsible for the overall servicing (as "servicing"
is commonly understood by participants in the mortgage-backed
securities market) of Loans but performs one or more discrete
functions identified in Item 1122(d) of Regulation AB with respect
to Loans under the direction or authority of the Seller or a
Subservicer.
Subservicer : Any Person that services Loans on behalf of
the Seller or any Subservicer and is responsible for the
performance (whether directly or through Subservicers or
Subcontractors) of a substantial portion of the material servicing
functions required to be performed by the Seller under this
Agreement or any Reconstitution Agreement that are identified in
Item 1122(d) of Regulation AB.
Subservicing Agreement : The written contract
between the Seller and a Subservicer relating to servicing and
administration of certain Loans as provided in Subsection 11.29 of
the Servicing Addendum.
Third-Party Originator : Each Person, other than a
Qualified Correspondent, that originated Loans acquired by the
Seller.
Whole Loan Transfer : Any sale or transfer of some
or all of the Loans, other than a Securitization Transaction.
SECTION 2.
Agreement to Purchase . The
Seller agrees to sell, and the Purchaser agrees to purchase, from
time-to-time, Loans having an aggregate principal balance on the
related Cut-off Date in an amount as set forth in the related
Confirmation, or in such other amount as agreed by the Purchaser
and the Seller as evidenced by the actual aggregate principal
balance of the Loans accepted by the Purchaser on the related
Closing Date.
SECTION 3.
Loan Schedules . The Seller shall
deliver the Loan Schedule for a Loan Package to be purchased on a
particular Closing Date to the Purchaser at least two (2) Business
Days prior to the related Closing Date in both hard copy and
electronic format.
SECTION 4.
Purchase Price . The Purchase
Price for each Loan listed on the related Loan Schedule shall be
the percentage of par as stated in the related Confirmation
(subject to adjustment as provided therein), multiplied by its
Stated Principal Balance as of the related Cut-off Date. If so
provided in the related Confirmation, portions of the Loans shall
be priced separately.
In addition to the Purchase Price as described above, (i) the
Initial Purchaser shall pay the Seller, at closing, accrued
interest on the Stated Principal Balance of each Loan as of the
related Cut-off Date at its Net Loan Rate from the related Cut-off
Date through the day prior to the related Closing Date, both
inclusive and (ii) the Seller shall pay to the Initial Purchaser
the costs and fees expected to be associated with the recording of
an Assignment of Mortgage or, with respect to a Cooperative Loan,
an Assignment of Note and Pledge Agreement, with respect to each
Loan (such amount may be set forth in the related
Confirmation).
The Purchaser shall own and be entitled to receive with respect
to each Loan purchased, (1) all scheduled principal due after the
related Cut-off Date, (2) all other recoveries of principal
collected after the related Cut-off Date (provided, however, that
all scheduled payments of principal due on or before the related
Cut-off Date and collected by the Seller after the related Cut-off
Date shall belong to the Seller), and (3) all payments of interest
on the Loans net of the Servicing Fee minus that portion of any
such interest payment that is allocable to the period prior to the
related Cut-off Date. The Stated Principal Balance of each Loan as
of the related Cut-off Date is determined after application to the
reduction of principal of payments of principal due on or before
the related Cut-off Date whether or not collected. Therefore, for
the purposes of this Agreement, payments of scheduled principal and
interest prepaid for a Due Date beyond the related Cut-off Date
shall not be applied to the principal balance as of the related
Cut-off Date. Such prepaid amounts (minus the applicable Servicing
Fee) shall be the property of the Purchaser. The Seller shall
deposit any such prepaid amounts into the Custodial Account, which
account is established for the benefit of the Purchaser, for
remittance by the Seller to the Purchaser on the first related
Distribution Date. All payments of principal and interest, less the
applicable Servicing Fee, due on a Due Date following the related
Cut-off Date shall belong to the Purchaser.
SECTION 5.
Examination of Loan Files . In
addition to the rights granted to the Initial Purchaser under the
related Confirmation to underwrite the Loans and review the Loan
Files prior to the Closing Date, prior to the related Closing Date,
the Seller shall make the related Loan File available to the
Initial Purchaser for examination at the Seller’s offices or
such other location as shall otherwise be agreed upon by the
Initial Purchaser and the Seller. Such examination may be made by
the Initial Purchaser or its designee at any reasonable time before
the related Closing Date. If the Initial Purchaser makes such
examination prior to the related Closing Date and identifies any
Loans that do not conform to the terms of the related Confirmation
or the Seller’s underwriting standards, such Loans may, at
the Initial Purchaser’s option, be rejected for purchase by
the Initial Purchaser. If not purchased by the Initial Purchaser,
such Loans shall be deleted from the related Loan Schedule. The
Initial Purchaser may, at its option and without notice to the
Seller, purchase all or part of any Loan Package without conducting
any partial or complete examination. The fact that the Initial
Purchaser has conducted or has determined not to conduct any
partial or complete examination of the Loan Files shall not affect
the Initial Purchaser’s (or any of its successors’)
rights to demand repurchase or other relief or remedy provided for
in this Agreement.
SECTION 6.
Conveyance from Seller to Initial
Purchaser .
Subsection 6.01.
Conveyance of Loans; Possession of Servicing
Files .
The Seller, simultaneously with the payment of the Purchase
Price, shall execute and deliver to the Initial Purchaser an
Assignment and Conveyance with respect to the related Loan Package
in the form attached hereto as Exhibit 4 . The
Servicing File retained by the Seller with respect to each Loan
pursuant to this Agreement shall be appropriately identified in the
Seller’s computer system to reflect clearly the sale of such
related Loan to the Purchaser. The Seller shall release from its
custody the contents of any Servicing File retained by it only in
accordance with this Agreement.
In addition, in connection with the assignment of any MERS Loan,
the Seller agrees that on or prior to each Closing Date it will
cause, at its own expense, the MERS System to indicate that the
related Loans have been assigned by the Seller to the Purchaser in
accordance with this Agreement by including in such computer files
the information required by the MERS System to identify the
Purchaser as owner of such Loans.
Subsection 6.02.
Books and Records .
Record title to each Note and the related Mortgage as of the
related Closing Date shall be in the name of the Seller, the
Purchaser or one or more designees of the Purchaser, as the
Purchaser shall designate. Notwithstanding the foregoing,
beneficial ownership of each Note and the related Mortgage shall be
vested solely in the Purchaser. All rights arising out of the Loans
including, but not limited to, all funds received by the Seller
after the related Cut-off Date on or in connection with a Loan as
provided in Section 4 shall be vested in the Purchaser or one or
more designees of the Purchaser; provided, however, that all such
funds received on or in connection with a Loan as provided in
Section 4 shall be received and held by the Seller in trust for the
benefit of the Purchaser as the owner of the Loans pursuant to the
terms of this Agreement.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of
the Loans by the Seller and not a pledge of the Loans by the Seller
to the Purchaser to secure a debt or other obligation of the
Seller. Consequently, the sale of each Loan shall be reflected as a
sale on the Seller’s business records, tax returns and
financial statements.
Subsection 6.03.
Delivery of Loan Documents .
The Seller shall from time to time in connection with each
Closing Date, at least five(5) Business Days prior to such Closing
Date, deliver and release to the Custodian the Loan Documents with
respect to each Loan to be purchased and sold on the related
Closing Date and set forth on the related Loan Schedule.
The Custodian shall certify its receipt of all such Loan
Documents for the related Closing Date, as evidenced by a trust
receipt and initial certification of the Custodian delivered to the
Initial Purchaser. The fees and expenses of the Custodian shall be
paid by the Purchaser.
The Seller shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension
of any Loan entered into in accordance with this Agreement within
two weeks of their execution, provided, however, that the Seller
shall provide the Custodian with a certified true copy of any such
document submitted for recordation within two weeks of its
execution.
The Seller shall provide the original of any document submitted
for recordation promptly upon return of such document from the
applicable recording office and in no event later than 180 days
following the related Closing Date, or in the case of an
assumption, modification, consolidation or extension pursuant to
the preceding paragraph, 180 days following the date of submission
of such document to the applicable recording office for
recordation. The Seller shall provide an original mortgagee
title insurance policy meeting the requirements of this Agreement
promptly upon the issuance thereof and in no event later than 180
days following the related Closing Date. To the extent that
the Seller fails to provide any such original document within the
time period set forth herein, and such failure materially and
adversely affects the value of the Loan or the Purchaser’s
interest in the Loan, the Purchaser may demand, and shall have the
right to, a remedy as for a breach pursuant to Subsection 7.03
hereof (it being understood that any cure period set forth in
Subsection 7.03 shall be deemed to have expired).
In the event that new, replacement, substitute or additional
Stock Certificates are issued with respect to existing Cooperative
Shares, the Seller shall within ten (10) Business Days deliver to
the Custodian the new Stock Certificates, together with the related
Stock Powers in blank. Such new Stock Certificates shall be
subject to the related Pledge Instruments and shall be subject to
all of the terms, covenants and conditions of this Agreement.
SECTION 7.
Representations, Warranties and Covenants;
Remedies for Breach .
Subsection 7.01.
Representations and Warranties Respecting the
Seller .
The Seller represents, warrants and covenants to the Purchaser
as of the initial Closing Date and each subsequent Closing Date or
as of such date specifically provided herein or in the applicable
Assignment and Conveyance:
(i)
The Seller is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization and has all licenses necessary to carry on its
business as now being conducted. It is licensed in, qualified to
transact business in and is in good standing under the laws of the
state in which any Mortgaged Property or Cooperative Apartment is
located except where the failure to be so licensed and qualified
would not have a material adverse effect on the Seller’s
business or operations or the enforceability of any Loan or the
Seller’s ability to service such Loan in accordance with the
terms of this Agreement. No licenses or approvals obtained by
Seller have been suspended or revoked by any court, administrative
agency, arbitrator or governmental body and no proceedings are
pending which might result in such suspension or
revocation;
(ii)
The Seller has the full power and authority to
hold each Loan, to sell each Loan, and to execute, deliver and
perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Seller has duly authorized the
execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming
due authorization, execution and delivery by the Purchaser,
constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization;
(iii)
The execution and delivery of this Agreement by
the Seller and the performance of and compliance with the terms of
this Agreement do not and will not violate the Seller’s
charter or by-laws or constitute a default under or result in a
breach or acceleration of, any material contract, agreement or
other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;
(iv)
The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and its
performance and compliance with the terms of this Agreement will
not constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the
Seller or its assets, which violation might have consequences that
would materially and adversely affect the condition (financial or
otherwise) or the operation of the Seller or its assets or might
have consequences that would materially and adversely affect the
performance of its obligations and duties hereunder;
(v)
The Seller is an approved seller/servicer for
Fannie Mae and Freddie Mac in good standing and is a HUD approved
mortgagee pursuant to Section 203 of the National Housing Act. No
event has occurred, including but not limited to a change in
insurance coverage, which would make the Seller unable to comply
with Fannie Mae, Freddie Mac or HUD eligibility requirements or
which would require notification to Fannie Mae, Freddie Mac or
HUD;
(vi)
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;
(vii)
The Note, the Mortgage, the Assignment of
Mortgage and any other documents required to be delivered with
respect to each Loan pursuant to this Agreement, have been
delivered to the Custodian all in compliance with the specific
requirements of this Agreement. With respect to each Loan, the
Seller is in possession of a complete Loan File in compliance with
Exhibit 5 , except for such documents as have been delivered
to the Custodian;
(viii)
Immediately following receipt of the Purchase
Price for each Loan, the Purchaser shall be the owner of the
related Mortgage and the indebtedness evidenced by the related Note
and upon the payment of the Purchase Price by the Purchaser, in the
event that the Seller retains record title, the Seller shall retain
such record title in trust for the Purchaser as the owner thereof
and only for the purpose of servicing and supervising the servicing
of each Loan;
(ix)
There are no actions or proceedings against, or
investigations of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this
Agreement, (B) seeking to prevent the sale of the Loans or the
consummation of the transactions contemplated by this Agreement or
(C) that might prohibit or materially and adversely affect the
performance by the Seller of its obligations under, or the validity
or enforceability of, this Agreement;
(x)
No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Seller of, or compliance
by the Seller with, this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have
been obtained prior to the related Closing Date;
(xi)
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 Notes
and the Mortgages by the Seller pursuant to this Agreement are not
subject to the bulk transfer or any similar statutory
provisions;
(xii)
Neither this Agreement nor any written statement,
report or other document prepared and furnished or to be prepared
and furnished by the Seller pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any
untrue statement of material fact or omits to state a material fact
necessary to make the statements contained herein or therein not
misleading;
(xiii)
The origination, servicing and collection
practices used by the Seller (and by any prior originator or
servicer) with respect to each Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage
origination and servicing industry and have been in accordance with
Accepted Servicing Practices. The Loan has been serviced by the
Seller and any predecessor servicer in accordance with the terms of
the Note. With respect to escrow deposits and Escrow Payments, if
any, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in
connection therewith for which customary arrangements for repayment
thereof have not been made. No escrow deposits or Escrow Payments
or other charges or payments due the Seller have been capitalized
under any Mortgage or the related Note and no such escrow deposits
or Escrow Payments are being held by the Seller for any work on a
Mortgaged Property or, in the case of a Cooperative Loan, the
Cooperative Apartment, which has not been completed;
(xiv)
The transfer of the Loans shall be treated as a
sale on the books and records of the Seller, and the Seller has
determined that, and will treat, the disposition of the Loans
pursuant to this Agreement for tax and accounting purposes as a
sale. The Seller shall maintain a complete set of books and records
for each Loan which shall be clearly marked to reflect the
ownership of such Loan by the Purchaser;
(xv)
The consideration received by the Seller upon the
sale of the Loans constitutes fair consideration and reasonably
equivalent value for such Loan;
(xvi)
The Seller is solvent and will not be rendered
insolvent by the consummation of the transactions contemplated
hereby. The Seller is not transferring any Loan with any intent to
hinder; delay or defraud any of its creditors;
(xvii)
The information delivered by the Seller to the
Purchaser with respect to the Seller’s loan loss, foreclosure
and delinquency experience for the twelve (12) months immediately
preceding the Initial Closing Date on loans underwritten to the
same standards as the Loans and covering properties similar to the
Mortgaged Properties, is true and correct in all material respects;
and
(xviii)
If the Seller is or becomes a member of MERS, the
Seller is in good standing, and will comply in all material
respects with the rules and procedures of MERS in connection with
the servicing of the MERS Loans for as long as such Loans are
registered with MERS.
Subsection 7.02.
Representations and Warranties Regarding
Individual Loans .
The Seller hereby represents and warrants to the Purchaser that,
as to each Loan, as of the related Closing Date (or such other date
specified herein) for such Loan:
(i)
The information set forth in the related Loan
Schedule is complete, true and correct as of the related Cut-off
Date;
(ii)
The Loan is in compliance with all requirements
set forth in the related Confirmation, and the characteristics of
the related Loan Package as set forth in the related Confirmation
are true and correct;
(iii)
All payments required to be made prior to the
related Cut-off Date for such Loan have been made; the Seller has
not advanced funds, or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the related
Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Note or Mortgage; other than disclosed on
the related Loan Schedule, there has been no delinquency, exclusive
of any period of grace, in any payment by the Borrower thereunder
during the last twelve months; no Borrower has been sixty days past
due on a payment on a Loan at any time during the twelve month
period prior to the related Closing Date; and, if the Loan is a
Cooperative Loan, no foreclosure action or private or public sale
under the Uniform Commercial Code has ever been threatened or
commenced with respect to the Cooperative Loan;
(iv)
There are no delinquent taxes, ground rents,
water charges, sewer rents, assessments, insurance premiums,
leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related
Mortgaged Property, Cooperative Apartment or Project;
(v)
The terms of the Note, the Mortgage and, with
respect to each Cooperative Loan, the Pledge Agreement, the
Proprietary Lease, and the Pledge Instruments, have not been
impaired, waived, altered or modified in any respect, except by
written instruments, recorded in the applicable public recording
office if necessary to maintain the lien priority of the Mortgage,
and which have been delivered to the Custodian; the substance of
any such waiver, alteration or modification has been approved by
the insurer under the Primary Insurance Policy or LPMI Policy, if
any, and the title insurer, to the extent required by the related
policy, and is reflected on the related Loan Schedule. No
instrument of waiver, alteration or modification has been executed,
and no Borrower has been released, in whole or in part, except in
connection with an assumption agreement approved by the insurer
under the Primary Insurance Policy or LPMI Policy, if any, and the
title insurer, to the extent required by the policy, and which
assumption agreement has been delivered to the Custodian and the
terms of which are reflected in the related Loan Schedule. The
Financing Statements with respect to each Cooperative Loan are in
full force and effect;
(vi)
The Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including
the defense of usury, nor will the operation of any of the terms of
the Note or the Mortgage or the exercise of any right thereunder,
render the Mortgage or unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(vii)
With respect to each Loan that is not a
Cooperative Loan, each building upon the Mortgaged Property and
with respect to each Coopertive Loan, the Project, is insured by an
insurer acceptable to Fannie Mae or Freddie Mac against loss by
fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property or Project, as
applicable, is located, pursuant to insurance policies conforming
to the requirements of the Servicing Addendum. All such insurance
policies contain a standard mortgagee clause naming the Seller, its
successors and assigns as mortgagee and all premiums thereon have
been paid. If the Mortgaged Property or Project, as applicable, is
in an area identified on a Flood Hazard Map or Flood Insurance Rate
Map issued by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance has been made
available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in
effect which policy conforms to the requirements of Fannie Mae and
Freddie Mac. The Mortgage obligates the Borrower thereunder to
maintain all such insurance at the Borrower’s cost and
expense, and on the Borrower’s failure to do so, authorizes
the holder of the Mortgage to maintain such insurance at
Borrower’s cost and expense and to seek reimbursement
therefor from the Borrower. No prior holder of the related
Mortgage, including the Seller, has done, by act or omission,
anything which would impair the coverage of such insurance
policies;
(viii)
Each Loan and, if any, the related prepayment
penalty complied in all material respects with any and all
requirements of any federal, state or local law including, without
limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity,
fair housing, disclosure, or predatory, fair and abusive lending
laws applicable to the origination and servicing of loans of a type
similar to the Loans and the consummation of the transactions
contemplated hereby will not involve the violation of any such
laws;
(ix)
The Mortgage has not been satisfied, cancelled,
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 satisfaction, cancellation, subordination,
rescission or release;
(x)
The Mortgage (including any Negative Amortization
which may arise thereunder) is a valid, existing and enforceable
first lien on the Mortgaged Property, including all improvements on
the Mortgaged Property or Cooperative Apartment, as applicable,
subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of the
public record as of the date of recording being acceptable to
mortgage lending institutions generally and specifically referred
to in the lender’s title insurance policy delivered to the
originator of the Loan and which do not adversely affect the
Appraised Value of the Mortgaged Property or Cooperative Apartment,
as applicable, and (c) 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 or Cooperative Apartment, as applicable. Any security
agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Loan establishes and creates a
valid, existing and enforceable first lien and first priority
security interest on the property described therein and the Seller
has full right to sell and assign the same to the
Purchaser;
(xi)
The Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms;
(xii)
All parties to the Note and the Mortgage had
legal capacity to enter into the Loan and to execute and deliver
the Note and the Mortgage, and the Note and the Mortgage have been
duly and properly executed by such parties. With respect to each
Cooperative Loan, all parties to the Note and the Pledge Agreement
had legal capacity to execute and deliver the Note, the Pledge
Agreement, the Proprietary Lease, the Stock Power, the Recognition
Agreement, the Financing Statement and the Assignment of the
Proprietary Lease and such documents have been duly and properly
executed by such parties. Each Stock Power (i) has all
signatures guaranteed or (ii) if all signatures are not guaranteed,
then such Cooperative Shares will be transferred by the stock
transfer agent of the Cooperative if the Seller undertakes to
convert the ownership of the collateral securing the related
Cooperative Loan. The Borrower is either a natural person or
an inter vivos trust acceptable under the Fannie Mae
Guides;
(xiii)
The proceeds of the Loan have been fully
disbursed to or for the account of the Borrower and there is no
obligation for the Mortgagee to advance additional funds thereunder
and any and all requirements as to completion of any on-site or
off-site improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Loan and the recording of the
Mortgage have been paid, and the Borrower is not entitled to any
refund of any amounts paid or due to the Mortgagee pursuant to the
Note or Mortgage;
(xiv)
The Seller is the sole legal, beneficial and
equitable owner of the Note and the Mortgage and has full right to
transfer and sell the Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security
interest;
(xv)
All parties which have had any interest in the
Loan, whether as mortgagee, assignee or otherwise, are (or, during
the period in which they held and disposed of such interest, were)
in compliance with any and all applicable "doing business" and
licensing requirements of the laws of the state wherein the
Mortgaged Property or Cooperative Apartment, as applicable, is
located;
(xvi)
The Loan is covered by an ALTA lender’s
title insurance policy (which, in the case of an Adjustable Rate
Loan has an adjustable rate mortgage endorsement in the form of
ALTA 6.0 or 6.1) acceptable to Fannie Mae or Freddie Mac, issued by
a title insurer acceptable to Fannie Mae or Freddie Mac and
qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained
in (x)(a) and (b) above) the Seller, its successors and assigns as
to the first priority lien of the Mortgage in the original
principal amount of the Loan (including, if the Loan provides for
Negative Amortization, the maximum amount of Negative Amortization
in accordance with the Mortgage) and, with respect to any
Adjustable Rate Loan, against any loss by reason of the invalidity
or unenforceability of the lien resulting from the provisions of
the Mortgage providing for adjustment in the Loan Interest Rate and
Monthly Payment and Negative Amortization provisions of the
Mortgage Note. Additionally, such lender’s title insurance
policy affirmatively insures ingress and egress to and from the
Mortgaged Property, and against encroachments by or upon the
Mortgaged Property or any interest therein. The Seller is the sole
insured of such lender’s title insurance policy, and such
lender’s title insurance policy is in full force and effect
and will be in full force and effect upon the consummation of the
transactions contemplated by this Agreement. 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;
(xvii)
There is no default, breach, violation or event
of acceleration existing under the Note, the Mortgage or, if
applicable, the Proprietary Lease, and no event which, with the
passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach, violation or event
of acceleration, and the Seller has not waived any default, breach,
violation or event of acceleration;
(xviii)
There are no mechanics’ or similar liens or
claims which have been filed for work, labor or material (and no
rights are outstanding that under law could give rise to such lien)
affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related
Mortgage;
(xix)
All improvements which were considered in
determining the Appraised Value of the related Mortgaged Property
lay wholly within the boundaries and building restriction lines of
the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property unless otherwise disclosed and
are affirmatively insured by the title insurance policy referred to
in (xvi) above;
(xx)
The Loan was originated by a mortgagee approved
as such by the Secretary of HUD pursuant to Section 203 and 211 of
the National Housing Act, a savings and loan association, a savings
bank, a commercial bank or similar banking institution which is
supervised and examined by a federal or state authority;
(xxi)
Principal payments on the Loan commenced no more
than sixty days after the proceeds of the Loan were disbursed. The
Loan bears interest at the Loan Interest Rate. With respect to each
Loan which is not a Negative Amortization Loan, the Mortgage Note
is payable on the first day of each month in Monthly Payments,
which, (A) in the case of a Fixed Rate Loan, are sufficient to
fully amortize the original principal balance over the original
term thereof (other than with respect to a Loan identified on the
related Loan Schedule as an interest-only Loan during the
interest-only period or a Loan which is identified on the related
Loan Schedule as a Balloon Mortgage Loan) and to pay interest at
the related Loan Interest Rate, (B) in the case of an Adjustable
Rate Loan, are changed on each Adjustment Date, and in any case,
are sufficient to fully amortize the original principal balance
over the original term thereof (other than with respect to a Loan
identified on the related Loan Schedule as an interest-only Loan
during the interest-only period or a Loan which is identified on
the related Loan Schedule as a Balloon Mortgage Loan), and (C) in
the case of a Balloon Mortgage Loan, are based on a fifteen (15) or
thirty (30) year amortization schedule, as set forth in the related
Mortgage Note, and a final monthly payment substantially greater
than the preceding monthly payment which is sufficient to amortize
the remaining principal balance of the Balloon Mortgage Loan and to
pay interest at the related Mortgage Interest Rate. No
Balloon Mortgage Loan has an original stated maturity of less than
seven (7) years. With respect to each Negative Amortization
Loan, the related Mortgage Note requires a Monthly Payment which is
sufficient during the period following each Payment Adjustment
Date, to fully amortize the outstanding principal balance as of the
first day of such period (including any Negative Amortization) over
the then remaining term of such Mortgage Note and to pay interest
at the related Mortgage Interest Rate; provided, that the Monthly
Payment shall not increase to an amount that exceeds 107.5% of the
amount of the Monthly Payment that was due immediately prior to the
Payment Adjustment Date; provided, further, that the payment
adjustment cap shall not be applicable with respect to the
adjustment made to the Monthly Payment that occurs in a year in
which the Loan has been outstanding for a multiple of five (5)
years and in any such year the Monthly Payment shall be adjusted to
fully amortize the Loan over the remaining term. With respect
to each Loan identified on the Loan Schedule as an interest-only
Loan, the interest-only period does not exceed fifteen (15) years
(or such lesser period specified on the Loan Schedule) and
following the expiration of such interest-only period, the
remaining Monthly Payments shall be sufficient to fully amortize
the original principal balance over the remaining term of the Loan.
The Index for each Adjustable Rate Loan is as defined in the
related Confirmation and set forth in the related Loan Schedule.
No Loan provides for the capitalization or forbearance of
interest. No Loan is a Convertible Loan;
(xxii)
With respect to each Loan, the Mortgaged
Property, and with respect to each Cooperative Loan, the related
Cooperative Apartment and Project, is free of damage and waste and
there is no proceeding pending for the total or partial
condemnation thereof;
(xxiii)
The Mortgage and related Note contain customary
and enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided
thereby, including, (a) in the case of a Mortgage designated as a
deed of trust, by trustee’s sale, and (b) otherwise by
judicial foreclosure. The Borrower has not filed for protection
under applicable bankruptcy laws since the origination of the Loan.
There is no homestead or other exemption available to the
Borrower which would interfere with the right to sell the Mortgaged
Property at a trustee’s sale or the right to foreclose the
Mortgage. The Borrower has not notified the Seller requesting
relief under the Soldiers’ and Sailors’ Civil Relief
Act of 1940 or the Servicemembers Civil Relief Act, and the Seller
has no knowledge of any relief requested or allowed to the Borrower
under the Soldiers’ and Sailors’ Civil Relief Act of
1940 or the Servicemembers Civil Relief Act or any similar state
laws;
(xxiv)
The Loan complies with the underwriting
guidelines of the Seller subject to the exception guidelines and
processes they include. Such underwriting standards have been
provided to the Purchaser prior to the related Closing Date.
The Note and Mortgage are on forms substantially similar to
forms acceptable to Fannie Mae and Freddie Mac;
(xxv)
The Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel
mortgage referred to in (x) above;
(xxvi)
The Loan File contains an appraisal of the
related Mortgaged Property which is on appraisal form 1004 or form
2055 with an interior inspection, which satisfied the standards of
Fannie Mae or Freddie Mac and was made and signed, prior to the
approval of the Loan application, by a qualified appraiser, who had
no interest, direct or indirect in the Mortgaged Property or in any
loan made on the security thereof; whose compensation is not
affected by the approval or disapproval of the Loan and who met the
minimum qualifications of Fannie Mae or Freddie Mac. Each appraisal
of the Loan was made in accordance with the relevant provisions of
the Financial Institutions Reform, Recovery, and Enforcement Act of
1989;
(xxvii)
In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become
payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee’s sale after default by
the Borrower;
(xxviii)
No Loan contains provisions pursuant to which
Monthly Payments are (a) paid or partially paid with funds
deposited in any separate account established by the Seller, the
Borrower, or anyone on behalf of the Borrower or (b) paid by any
source other than the Borrower. The Loan is not a graduated payment
loan and the Loan does not have a shared appreciation or other
contingent interest feature. No Loan contains any provisions
which may constitute buydown provisions;
(xxix)
The Borrower has executed a statement to the
effect that the Borrower has received all disclosure materials
required by applicable law with respect to the making of fixed rate
loans in the case of Fixed Rate Loans, and adjustable rate loans in
the case of Adjustable Rate Loans and rescission materials with
respect to Refinanced Loans, and such statement is and will remain
in the Loan File;
(xxx)
No Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property unless the
related Loan has converted to a permanent closed-end fully
amortizing Loan and a completion certificate has been issued with
respect to the related Mortgaged Property or (b) facilitating the
trade-in or exchange of a Mortgaged Property;
(xxxi)
The Seller has no knowledge of any circumstances
or condition with respect to the Mortgaged Property, the Borrower,
the Borrower’s credit standing, the Cooperative Apartment,
the Project or the Mortgage that can reasonably be expected to
cause the Loan to be an unacceptable investment, cause the Loan to
become delinquent, or adversely affect the value of the
Loan;
(xxxii)
Each Loan with an LTV at origination in excess of
80% is and will be subject to a Primary Insurance Policy or LPMI
Policy, as identified on the related Loan Schedule, issued by a
Qualified Insurer, which insures that portion of the Loan in excess
of the portion of the Appraised Value of the Mortgaged Property
required by Fannie Mae or Freddie Mac. All provisions of such
policy have been and are being complied with, such policy is in
full force and effect, and all premiums due thereunder have been
paid. Any Mortgage subject to any Primary Insurance Policy
obligates the Borrower thereunder to maintain such insurance and to
pay all premiums and charges in connection therewith. No Loan
requires payment of such Primary Insurance Policy premiums, in
whole or in part, by the Purchaser. The Loan Interest Rate for the
Loan does not include any Primary Insurance Policy or LPMI Policy
insurance premium. No Loan had an LTV at origination in
excess of 95%;
(xxxiii)
The Mortgaged Property or, with respect to a
Cooperative Loan, the Cooperative Apartment, is lawfully occupied
under applicable law; all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions
of the Mortgaged Property or, with respect to a Cooperative Loan,
the Cooperative Apartment and the Project, and, with respect to the
use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the
appropriate authorities;
(xxxiv)
No error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Loan has
taken place on the part of any person, including without limitation
the Borrower, any appraiser, any builder or developer, or any other
party involved in the origination of the Loan or in the application
of any insurance in relation to such Loan;
(xxxv)
With respect to each Loan that is not a
Cooperative Loan, the Assignment of Mortgage is in recordable form
and is acceptable for recording under the laws of the jurisdiction
in which the Mortgaged Property is located; With respect to each
Cooperative Loan, the Assignment of Note and Pledge Agreement is in
recordable form and is acceptable for recording under the laws of
the jurisdiction in which the Cooperative Apartment is
located;
(xxxvi)
Any principal advances made to the Borrower prior
to the Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien priority
by a title insurance policy, an endorsement to the policy insuring
the mortgagee’s consolidated interest or by other title
evidence acceptable to Fannie Mae or Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of
the Loan plus any Negative Amortization;
(xxxvii)
[Reserved];
(xxxviii)
If the Residential Dwelling on the Mortgaged
Property is a condominium unit or unit in a planned unit
development (other than a de minimis planned unit development) such
condominium or planned unit development project meets the
eligibility requirements of Fannie Mae and Freddie Mac;
(xxxix)
Each Loan constitutes a qualified mortgage under
Section 860(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1);
(xl)
No Loan is (a) subject to, covered by or in
violation of the Home Ownership and Equity Protection Act of 1994
("HOEPA"), (b) classified as "high cost," "covered," "high risk
home", "threshold", or "predatory" loans under HOEPA or any other
applicable state, federal or local law, including any predatory or
abusive lending laws (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), (c) a High
Cost Loan or Covered Loan, as applicable (as such terms are defined
in the current Standard & Poor’s LEVELS® Glossary,
Appendix E) or (d) in violation of any state law or ordinance
comparable to HOEPA. No Loan (including purchase money loans
or refinance transactions) has an "annual percentage rate" or
"total points and fees" payable by the Borrower (as each such term
is defined under HOEPA) that equal or exceed the applicable
thresholds defined under HOEPA (Section 32 of Regulation Z, 12
C.F.R. Section 226.32(a)(1)(i) and (ii));
(xli)
No Borrower was required to purchase any credit
life, disability, accident, unemployment, property or health
insurance product or debt cancellation agreement as a condition of
obtaining the extension of credit. No Borrower obtained a
prepaid single premium credit life, disability, unemployment,
property, mortgage, accident or health insurance policy in
connection with the origination of the Loan. No proceeds from
any Loan were used to finance or purchase single-premium credit
insurance policies or debt cancellation agreements as part of the
origination of or as a condition to closing, such Loan;
(xlii)
Interest on each Loan is calculated on the basis
of a 360-day year consisting of twelve 30-day months;
(xliii)
The Mortgaged Property and, in the case of a
Cooperative Loan, the Cooperative Apartment and Project, is in
compliance with all applicable environmental laws pertaining to
environmental hazards including, without limitation, asbestos, and
neither the Seller nor, to the Seller’s knowledge, the
related Borrower, has received any notice of any violation or
potential violation of such law;
(xliv)
With respect to each Loan, the Seller has fully
and accurately furnished complete information (e.g., favorable and
unfavorable) on the related borrower credit files to Equifax,
Experian and Trans Union Credit Information Company (three of the
credit repositories), in accordance with the Fair Credit Reporting
Act and its implementing regulations, on a monthly basis and the
Seller will furnish for each Loan, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the credit repositories), on a
monthly basis;
(xlv)
Except as set forth on the related Loan Schedule,
none of the Loans are subject to a prepayment penalty. For any Loan
that is subject to a prepayment penalty, such prepayment penalty
does not extend beyond five years after the date of origination.
Any such prepayment penalty is permissible and enforceable in
accordance with its terms upon the mortgagor’s full and
voluntary principal prepayment under applicable law, except to the
extent that: the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights; the collectability thereof may
be limited due to acceleration in connection with a foreclosure or
other involuntary prepayment; or subsequent changes in applicable
law may limit or prohibit enforceability thereof under applicable
law. With respect to any Loan that contains a provision
permitting imposition of a penalty upon a prepayment prior to
maturity: (i) the Loan provides some benefit to the Borrower (e.g.,
a rate or fee reduction) in exchange for accepting such prepayment
penalty; (ii) the Loan’s originator had a written policy of
offering the Borrower, or requiring third-party brokers to offer
the Borrower, the option of obtaining a Loan that did not require
payment of such a prepayment penalty and the Borrower was offered
such a product by the Loan’s originator; (iii) the prepayment
penalty was adequately disclosed to the Borrower in the loan
documents pursuant to applicable state and federal law; and (iv)
such prepayment penalty shall not be imposed in any instance where
the Loan is accelerated or paid off in connection with the workout
of a delinquent mortgage or due to the Borrower’s default,
notwithstanding that the terms of the Loan or state or federal law
might permit the imposition of such prepayment penalty;
(xlvi)
The Seller has complied with all applicable
anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 200l (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 Loan for
purposes of the Anti-Money Laundering Laws, including with respect
to the legitimacy of the applicable Borrower and the origin of the
assets used by the said Borrower to purchase the property in
question, and maintains, and will maintain, sufficient information
to identify the applicable Borrower for purposes of the Anti-Money
Laundering Laws. No Loan is subject to nullification pursuant
to Executive Order 13224 (the "Executive Order") or the regulations
promulgated by the Office of Foreign Assets Control of the United
States Department of the Treasury (the "OFAC Regulations") or in
violation of the Executive Order or the OFAC Regulations, and no
Borrower is subject to the provisions of such Executive Order or
the OFAC Regulations nor listed as a "blocked person" for purposes
of the OFAC Regulations;
(xlvii)
With respect to each Loan secured in whole or in
part by the interest of the Borrower as a lessee under a ground
lease of a Mortgaged Property (a "Ground Lease") the real property
securing such Loan is located in a jurisdiction in which the use of
leasehold estates for residential properties is a widely-accepted
practice and:
(a)
The Borrower is the owner of a valid and
subsisting interest as tenant under the Ground Lease;
(b)
The Ground Lease is in full force and effect,
unmodified and not supplemented by any writing or
otherwise;
(c)
The mortgagor is not in default under any of the
terms thereof and there are no circumstances which, with the
passage of time or the giving of notice or both, would constitute
an event of default thereunder;
(d)
The lessor under the Ground Lease is not in
default under any of the terms or provisions thereof on the part of
the lessor to be observed or performed;
(e)
The term of the Ground Lease exceeds the maturity
date of the related Loan by at least five years;
(f)
The Ground Lease or a memorandum thereof has been
recorded and by its terms permits the leasehold estate to be
mortgaged. The Ground Lease grants any leasehold mortgagee
standard protection necessary to protect the security of a
leasehold mortgagee;
(g)
The Ground Lease does not contain any default
provisions that could give rise to forfeiture or termination of the
Ground Lease except for the non-payment of the Ground Lease
rents;
(h)
The execution, delivery and performance of the
Mortgage do not require the consent (other than those consents
which have been obtained and are in full force and effect) under,
and will not contravene any provision of or cause a default under,
the Ground Lease; and
(i)
The Ground Lease provides that the leasehold can
be transferred, mortgaged and sublet an unlimited number of times
either without restriction or on payment of a reasonable fee and
delivery of reasonable documentation to the lessor.
(xlviii)
No predatory or deceptive lending practices,
including but not limited to, the extension of credit to the
applicable Borrower without regard for said Borrower’s
ability to repay the Loan and the extension of credit to said
Borrower which has no apparent benefit to said Borrower, were
employed by the originator of the Loan in connection with the
origination of the Loan. Each Loan is in compliance with the
anti-predatory lending eligibility for purchase requirements of the
Fannie Mae Guides;
(xlix)
No Loan is a "High Cost Home Loan" as defined in
the Georgia Fair Lending Act, as amended (the "Georgia Act") or the
New York Banking Law 6-1. No Loan secured by owner occupied
real property or an owner occupied manufactured home located in the
State of Georgia was originated (or modified) on or after October
1, 2002 through and including March 6, 2003;
(l)
No Borrower was encouraged or required to select
a Loan product offered by the Loan’s originator which is a
higher cost product designed for less creditworthy borrowers,
taking into account such facts as, without limitation, the mortgage
loan’s requirements and the Borrower’s credit history,
income, assets and liabilities. Any Borrower who sought
financing through Loan originator’s higher-priced subprime
lending channel was directed towards or offered the Loan
originator’s standard mortgage line if the Borrower was able
to qualify for one of the standard products. If, at the time
of loan application, the Borrower may have qualified for a lower
cost credit product then offered by any mortgage lending affiliate
of the Loan’s originator, the Loan’s originator
referred the Borrower’s application to such affiliate for
underwriting consideration;
(li)
The methodology used in underwriting the
extension of credit for each Loan did not rely solely on the extent
of the Borrower’s equity in the collateral as the principal
determining factor in approving such extension of credit. The
methodology employed objective criteria such as the
Borrower’s income, assets and liabilities, to the proposed
mortgage payment and, based on such methodology, the Loan’s
originator made a reasonable determination that at the time of
origination the Borrower had the ability to make timely payments on
the Loan;
(lii)
All points and fees related to each Loan were
disclosed in writing to the Borrower in accordance with applicable
state and federal law and regulation. No Borrower was charged
"points and fees" (whether or not financed) in an amount that
exceeds the greater of (1) 5% of the principal amount of such Loan
(such 5% limitation is calculated in accordance with Fannie
Mae’s requirements as set forth in the Fannie Mae Selling
Guide) or (2) $1,000;
(liii)
All points, fees and charges (including finance
charges) and whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing of each
Loan has been disclosed in writing to the Borrower in accordance
with applicable state and federal law and regulation;
(liv)
The Seller will transmit full-file credit
reporting data for each Loan pursuant to Fannie Mae Guide
Announcement 95-19 and for each Loan, Seller agrees it shall report
one of the following statuses each month as follows: new
origination, current, delinquent (30-, 60-, 90-days, etc.),
foreclosed, or charged-off;
(lv)
No Loan is a "High-Cost Home Loan" as defined in
the New Jersey Home Ownership Security Act of 2002 (the "NJ Act");
and each Loan subject to the NJ Act is considered under the NJ Act
as, either, a (1) purchase money Home Loan, (2) purchase money
Covered Loan (with respect to Loans which were originated between
November 26, 2003 and July 7, 2004), or (3) a rate/term refinance
Home Loan;
(lvi)
No Borrower agreed in the Mortgage or the related
Mortgage Note to submit to mandatory arbitration to resolve any
dispute arising out of or relating in any way to the Loan
transaction;
(lvii)
The Borrower has not made or caused to be made
any payment in the nature of an ‘average’ or
‘yield spread premium’ to a mortgage broker or a like
Person which has not been fully disclosed to the
Borrower;
(lviii)
No Loan secured by a Mortgaged Property located
in the Commonwealth of Massachusetts was made to pay off or
refinance an existing loan or other debt of the related borrower
(as the term "borrower" is defined in the regulations promulgated
by the Massachusetts Secretary of State in connection with the
Massachusetts General Laws Chapter 183, Section 28C) unless (a) the
related Loan Interest Rate (that would be effective once the
introductory rate expires, with respect to Adjustable Rate Loans)
did or would not exceed by more than 2.50% the yield on United
States Treasury securities having comparable periods of maturity to
the maturity of the related Loan as of the fifteenth day of the
month immediately preceding the month in which the application for
the extension of credit was received by the related lender or (b)
the Loan is an "open-end home loan" (as such term is used in the
Massachusetts General Laws Chapter 183, Section 28C or the
regulations promulgated in connection therewith) and the related
Note provides that the related Loan Interest Rate may not exceed at
any time the Prime rate index as published in the Wall Street
Journal plus a margin of one percent;
(lix)
With respect to each Cooperative Loan:
(a) the term of the related Proprietary Lease is longer than the
term of the Cooperative Loan;
(b) there is no provision in any Proprietary Lease which
requires the Borrower to offer for sale the Cooperative Shares
owned by such Borrower first to the Cooperative;
(c) there is no prohibition in any Proprietary Lease against
pledging the Cooperative Shares or assigning the Proprietary
Lease;
(d) the Pledge Agreement contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of
the Note in the event the Cooperative Apartment is transferred or
sold without the consent of the holder thereof; and
(e) a Cooperative Lien Search has been made by a company
competent to make the same which company is acceptable to FNMA and
qualified to do business in the jurisdiction where the Cooperative
Apartment is located.
(lx)
No Borrower was charged "points and fees" in an
amount greater than (a) $1,000 or (b) 5% of the principal amount of
the related Loan, whichever is greater. For purposes of this
representation, "points and fees" (x) include origination,
underwriting, broker and finder’s fees and charges that the
lender imposed as a condition of making the Loan, whether they are
paid to the lender or a third party; and (y) exclude bona fide
discount points, fees paid for actual services rendered in
connection with the origination of the Mortgage (such as
attorneys’ fees, notaries fees and fees paid for property
appraisals, credit reports, surveys, title examinations and
extracts, flood and tax certifications, and home inspections); the
cost of mortgage insurance or credit-risk price adjustments; the
costs of title, hazard, and flood insurance policies; state and
local transfer taxes or fees; escrow deposits for the future
payment of taxes and insurance premiums; and other miscellaneous
fees and charges, which miscellaneous fees and charges, in total,
do not exceed 0.25 percent of the loan amount; and
(lxi)
With respect to each Loan, the related
Residential Dwelling is not a manufactured housing unit.
Subsection 7.03.
Remedies for Breach of Representations and
Warranties .
It is understood and agreed that the representations and
warranties set forth in Subsections 7.01 and 7.02 shall survive the
sale of the Loans to the Purchaser and shall inure to the benefit
of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Note, Assignment of Mortgage or Assignment of
Note and Pledge Agreement, or the examination or lack of
examination of any Loan File. Upon discovery by either the Seller
or the Purchaser of a breach of any of the foregoing
representations and warranties which materially and adversely
affects the value of the Loans or the interest of the Purchaser (or
which materially and adversely affects the value of a Loan or the
interests of the Purchaser in the related Loan in the case of a
representation and warranty relating to a particular Loan), the
party discovering such breach shall give prompt written notice to
the other.
Within 60 days of the earlier of either discovery by or notice
to the Seller of any breach of a representation or warranty which
materially and adversely affects the value of a Loan or the Loans,
the Seller shall use its best efforts promptly to cure such breach
in all material respects and, if such breach cannot be cured, the
Seller shall, at the Purchaser’s option, repurchase such Loan
at the Repurchase Price; provided that the Purchaser’s demand
for such repurchase shall be exercised within a reasonable amount
of time from notice to the Purchaser of the related breach and
expiration of the related cure period. In the event that a breach
shall involve any representation or warranty set forth in
Subsection 7.01 and such breach cannot be cured within 60 days of
the earlier of either discovery by or notice to the Seller of such
breach, such Loans effected by the breach shall, at the
Purchaser’s option, be repurchased by the Seller at the
Repurchase Price in order to cure such breach. The Seller shall, at
the request of the Purchaser and assuming that Seller has a
Qualified Substitute Loan, rather than repurchase the Loan as
provided above, remove such Loan and substitute in its place a
Qualified Substitute Loan or Loans; provided that such substitution
shall be effected not later than 120 days after the related Closing
Date. If the Seller has no Qualified Substitute Loan, it shall
repurchase the deficient Loan. Any repurchase of a Loan(s) pursuant
to the foregoing provisions of this Subsection 7.03 shall occur on
a date designated by the Purchaser and shall be accomplished by
deposit in the Custodial Account of the amount of the Repurchase
Price for distribution to the Purchaser on the next scheduled
Distribution Date. It is understood by the parties hereto
that a breach of the representations and warranties made in
Subsections 7.02 (v), (viii), (xxxix), (xl), (xli), (xliv), (xlv),
(xlix), (l), (li), (liii), (lvi), (lx) or (lxi) will be deemed to
materially and adversely affect the value of the related Loan or
the interest of the Purchaser therein.
At the time of repurchase of any deficient Loan, the Purchaser
and the Seller shall arrange for the reassignment of the
repurchased Loan to the Seller and the delivery to the Seller of
any documents held by the Custodian relating to the repurchased
Loan. In the event the Repurchase Price is deposited in the
Custodial Account, the Seller shall, simultaneously with such
deposit, give written notice to the Purchaser that such deposit has
taken place. Upon such repurchase the related Loan Schedule shall
be amended to reflect the withdrawal of the repurchased Loan from
this Agreement.
As to any Deleted Loan for which the Seller substitutes a
Qualified Substitute Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser for such Qualified
Substitute Loan or Loans the Note, the Mortgage, the Assignment of
Mortgage and such other documents and agreements as are required by
this Agreement, with the Note endorsed as required therein. The
Seller shall deposit in the Custodial Account the Monthly Payment
less the Servicing Fee due on such Qualified Substitute Loan or
Loans in the month following the date of such substitution. Monthly
Payments due with respect to Qualified Substitute Loans in the
month of substitution will be retained by the Seller. For the month
of substitution, distributions to the Purchaser will include the
Monthly Payment due on such Deleted Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain
all amounts subsequently received by the Seller in respect of such
Deleted Loan. The Seller shall give written notice to the Purchaser
that such substitution has taken place and shall amend the Loan
Schedule to reflect the removal of such Deleted Loan from the terms
of this Agreement and the substitution of the Qualified Substitute
Loan. Upon such substitution, such Qualified Substitute Loan or
Loans shall be subject to the terms of this Agreement in all
respects, and the Seller shall be deemed to have made with respect
to such Qualified Substitute Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set
forth in Sections 7.01 and 7.02.
For any month in which the Seller substitutes one or more
Qualified Substitute Loans for one or more Deleted Loans, the
Seller will determine the amount (if any) by which the aggregate
principal balance of all such Qualified Substitute Loans as of the
date of substitution is less than the aggregate Stated Principal
Balance of all such Deleted Loans (after application of scheduled
principal payments due in the month of substitution). An amount
equal to the product of the amount of such shortfall multiplied by
the percentage of par set forth in the definition of "Repurchase
Price" shall be distributed by the Seller in the month of
substitution pursuant to the Servicing Addendum. Accordingly, on
the date of such substitution, the Seller will deposit from its own
funds into the Custodial Account an amount equal to such
amount.
Notwithstanding the foregoing, within 90 days of the earlier of
discovery by the Seller or receipt of notice by the Seller of a
breach of any representation or warranty by the Seller which
materially and adversely affects the interests of the Purchaser in
any prepayment charge or penalty, the Seller shall pay the amount
of such prepayment charge or penalty to the Purchaser.
In addition to such cure, repurchase, payment and substitution
obligations, the Seller shall indemnify the Purchaser and hold it
harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs,
judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or
resulting from, a breach of the Seller’s representations and
warranties contained in this Section 7. It is understood and agreed
that the obligations of the Seller set forth in this Subsection
7.03 to cure or repurchase a defective Loan, to pay the amount of
certain prepayment penalties and to indemnify the Purchaser as
provided in this Subsection 7.03 constitute the sole remedies of
the Purchaser respecting a breach of the foregoing representations
and warranties.
Any cause of action against the Seller relating to or arising
out of the breach of any representations and warranties made in
Subsections 7.01 or 7.02 shall accrue as to any Loan upon (i)
discovery of such breach by the Purchaser or notice thereof by the
Seller to the Purchaser, (ii) failure by the Seller to cure such
breach or repurchase such Loan as specified above, and (iii) demand
upon the Seller by the Purchaser for compliance with the relevant
provisions of this Agreement.
Subsection 7.04.
Repurchase of Convertible Loans
.
In the event the Borrower under any Convertible Loan elects to
convert said Note to a fixed interest rate Note, as provided in
said Note, then the Seller shall, prior to the effective date of
said conversion, repurchase such Convertible Loan from the
Purchaser in accordance with Subsection 7.03 hereof. In connection
with any such repurchase, if the record title to the related
Mortgage is not in the name of the Seller, then the Purchaser
agrees to pay the recording costs to transfer the record title of
the Mortgage to the Seller.
Subsection 7.05.
Repurchase of Certain Loans .
In the event that a Monthly Payment becomes thirty days past due
at any time on or prior to the first day of the first calendar
month following the related Closing Date (or such other date set
forth in the related Confirmation), then the Seller, at the
Purchaser’s option, shall (a) promptly repurchase the related
Loan from the Purchaser in accordance with the procedures set forth
in Subsection 7.03 hereof and any such repurchase shall be made at
the Repurchase Price, (b) indemnify the Purchaser in accordance
with Subsection 13.01 hereof, or (c) substitute a mortgage loan
acceptable to the Purchaser in accordance with Subsection 7.03
hereof. The request to repurchase a Loan due to early payment
default must be made within ninety (90) days of Purchaser’s
receipt of notice from the Seller of such early payment default.
After the ninety (90) day period elapses, the option to
request repurchase of any such Loan for early payment default
reasons irrevocably expires.
Subsection 7.06.
Purchase Price Protection .
With respect to any Loan that prepays in full on or prior to the
last day of the first full month following the related Closing Date
(or such other date set forth in the related Confirmation), the
Seller shall reimburse the Purchaser an amount equal to the product
of (a) the excess of the Purchase Price percentage paid by the
Purchaser to the Seller for such Loan over 100%, times (b) the
outstanding principal balance of the Loan as of the date of such
prepayment in full. Such payment shall be made within thirty (30)
days of such payoff. Upon any assignment of a Loan and/or
this Agreement, the Purchaser may at its option retain its rights
under this Section 7.06 notwithstanding such assignment. The
request to repurchase a Loan due to premium recapture must be made
within ninety (90) days of Purchaser’s receipt of notice from
the Seller that such Loan has prepaid in full. After the
ninety (90) day period elapses, the option to request repurchase of
any such Loan for premium recapture reasons irrevocably
expires.
SECTION 8.
Closing . The closing for the
sale and purchase of each Loan Package shall take place on the
related Closing Date. At the Purchaser’s option, the closing
shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the
parties shall agree.
The closing for the Loans to be purchased on each Closing Date
shall be subject to each of the following conditions:
(a)
all of the representations and warranties of the
Seller under this Agreement shall be true and correct as of the
related Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default under
this Agreement;
(b)
the Initial Purchaser shall have received, or the
Initial Purchaser’s attorneys shall have received in escrow,
all Closing Documents as specified in Section 9, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed by
all signatories other than the Purchaser as required pursuant to
the terms hereof,
(c)
the Seller shall have delivered and released to
the Custodian all documents required pursuant to this Agreement;
and
(d)
all other terms and conditions of this Agreement
shall have been complied with.
Subject to the foregoing conditions, the Initial Purchaser shall
pay to the Seller on the related Closing Date the Purchase Price,
plus accrued interest pursuant to Section 4, by wire transfer of
immediately available funds to the account designated by the
Seller.
SECTION 9.
Closing Documents .
(a)
On or before the Initial Closing Date, the Seller
shall submit to the Initial Purchaser fully executed originals of
the following documents:
1.
this Agreement, in four counterparts;
2.
a Custodial Account Letter Agreement in the form attached as
Exhibit 7 hereto;
3.
an Escrow Account Letter Agreement in the form attached as
Exhibit 8 hereto;
4.
an Officer’s Certificate, in the form of
Exhibit 1 hereto, including all attachments
thereto;
5.
an Opinion of Counsel to the Seller, in the form of Exhibit
2 hereto; and
6.
the Seller’s underwriting guidelines, to be attached as
Exhibit 10 hereto.
(b)
The Closing Documents for the Loans to be
purchased on each Closing Date shall consist of fully executed
originals of the following documents:
1.
the related Confirmation;
2.
the related Loan Schedule as the Loan Schedule thereto;
3.
a Custodian’s Trust Receipt and Initial Certification, as
required under the Custodial Agreement, in a form acceptable to the
Initial Purchaser;
4.
if requested by the Initial Purchaser, an Officer’s
Certificate, in the form of Exhibit 1 hereto, including
all attachments thereto;
5.
if requested by the Initial Purchaser, an Opinion of Counsel to
the Seller, in the form of Exhibit 2 hereto;
6.
if any of the Loans has at any time been subject to any security
interest, pledge or hypothecation for the benefit of any Person, a
Security Release Certification, in the form of Exhibit 3
hereto, executed by such Person;
7.
a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if any of
the Loans were acquired by the Seller by merger or acquired or
originated by the Seller while conducting business under a name
other than its present name, if applicable; and
8.
an Assignment and Conveyance in the form of Exhibit 4
hereto.
SECTION 10.
Costs . The Purchaser shall pay
any commissions due its salesmen and the legal fees and expenses of
its attorneys. All other costs and expenses incurred in connection
with the transfer and delivery of the Loans, including without
limitation recording fees, fees for title policy endorsements and
continuations, fees for recording Assignments of Mortgage and the
Seller’s attorney’s fees, shall be paid by the
Seller.
SECTION 11.
Seller’s Servicing Obligations .
The Seller, as independent contract servicer, shall service
and administer the Loans directly, or through one or more
Subservicers, in accordance with the terms and provisions set
forth in the Servicing Addendum attached as Exhibit 9 ;
which Servicing Addendum is incorporated herein by reference.
SECTION 12.
Whole Loan Transfer or a Securitization
Transaction on One or More Reconstitution Dates .
The Seller and the Initial Purchaser agree that with respect to
some or all of the Loans, the Initial Purchaser may effect
either:
(1)
one or more Whole Loan Transfers; and/or
(2)
one or more Securitization Transactions.
With respect to each Whole Loan Transfer or Securitization
Transaction, as the case may be, entered into by the Initial
Purchaser, the Seller agrees:
(1)
to cooperate fully with the Purchaser and any prospective
purchaser with respect to all reasonable requests and due diligence
procedures and with respect to the preparation (including, but not
limited to, the endorsement, delivery, assignment, and execution)
of the Loan Documents and other related documents, and with respect
to servicing requirements reasonably requested by the rating
agencies and credit enhancers;
(2)
to execute all Reconstitution Agreements provided that each of
the Seller and the Purchaser is given an opportunity to review and
reasonably negotiate in good faith the content of such documents
not specifically referenced or provided for herein;
(3)
with respect to any Whole Loan Transfer or Securitization
Transaction, the Seller shall make the representations and
warranties regarding the Seller and, if such Whole Loan Transfer or
Securitization Transaction occurs within 12 months of the related
Closing Date or such later period as specified in the related
Confirmation, the Loans as of the date of such Whole Loan Transfer
or Securitization Transaction, modified to the extent necessary to
accurately reflect the pool statistics of the Loans as of the date
of such Whole Loan Transfer or Securitization Transaction and any
events or circumstances existing subsequent to the related Closing
Date;
(4)
to make available (x) to the Purchaser and to any Person
designated by the Purchaser for inclusion in any prospectus or
other offering material such publicly available information
regarding the Seller, its financial condition and its mortgage loan
delinquency, foreclosure and loss experience and any additional
information reasonably requested by the Purchaser, and which the
Seller is capable of providing without unreasonable effort or
expense, and (y) to the Purchaser any similar non public, unaudited
financial information (which the Purchaser may, at its option and
at its cost, have audited by certified public accountants); and to
indemnify the Purchaser and any related underwriter and their
affiliates for any untrue statement or alleged untrue statement of
any material fact contained in such information that is included in
any prospectus or other offering materials or an omission or
alleged omission to state in such information a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(5)
to deliver to the Purchaser and to any Person designated by the
Purchaser, at the Purchaser’s expense, such statements and
audit letters of reputable, certified public accountants pertaining
to information provided by the Seller pursuant to clause (4) above
as shall be reasonably requested by the Purchaser;
(6)
to deliver to the Purchaser, and to any Person designated by the
Purchaser, such legal documents and in-house Opinions of Counsel as
are customarily delivered by originators or servicers, as the case
may be, and reasonably determined by the Purchaser to be necessary
in connection with Whole Loan Transfers or Securitization
Transactions, as the case may be, such in-house Opinions of Counsel
for a Securitization Transaction to be in the form reasonably
acceptable to the Purchaser, it being understood that the cost of
any opinions of outside special counsel that may be required for a
Whole Loan Transfer or Securitization Transaction, as the case may
be, shall be the responsibility of the Purchaser;
(7)
to negotiate and execute one or more subservicing agreements
between the Seller and any master servicer which is generally
considered to be a prudent master servicer in the secondary
mortgage market, designated by the Purchaser in its sole discretion
after consultation with the Seller and/or one or more custodial and
servicing agreements among the Purchaser, the Seller and a third
party custodian/trustee which is generally considered to be a
prudent custodian/trustee in the secondary mortgage market
designated by the Purchaser in its sole discretion after
consultation with the Seller, in either case for the purpose of
pooling the Loans with other Loans for resale or
securitization;
(8)
in connection with any securitization of any Loans, to execute a
pooling and servicing agreement, which pooling and servicing
agreement may, at the Purchaser’s direction, contain
contractual provisions including, but not limited to, a 24-day
certificate payment delay (54-day total payment delay), servicer
advances of delinquent scheduled payments of principal and interest
through liquidation (unless deemed non-recoverable) and prepayment
interest shortfalls (to the extent of the monthly servicing fee
payable thereto), servicing and loan representations and warranties
which in form and substance conform to the representations and
warranties in this Agreement and to secondary market standards for
securities backed by loans similar to the Loans and such provisions
with regard to servicing responsibilities, investor reporting,
segregation and deposit of principal and interest payments, custody
of the Loans, a requirement that the master servicer and any
servicer provide backup certifications as to all matters required
to be certified to the Securities and Exchange Commission ("SEC")
pursuant to the provisions of the Sarbanes-Oxley Act and the
regulations issued thereunder, in a form reasonably required by the
depositor, and to indemnify the depositor, the trustee, their
officers, directors and affiliates and any other entity making such
certifications to the SEC for any errors or omission in such
certification, and such provisions with regard to servicing
responsibilities, investor reporting, segregation and deposit of
principal and interest payments, custody of the Loans, and other
covenants as are required by the Purchaser and one or more
nationally recognized rating agencies for "AAA" rated mortgage
pass-through transactions which are "mortgage related securities"
for the purposes of the Secondary Mortgage Market Enhancement Act
of 1984, unless otherwise mutually agreed. If the Purchaser deems
it advisable at any time to pool the Loans with other loans for the
purpose of resale or securitization, the Seller agrees to execute
one or more subservicing agreements between itself (as servicer)
and a master servicer designated by the Purchaser at its sole
discretion, and/or one or more servicing agreements among the
Seller (as servicer), the Purchaser and a trustee designated by the
Purchaser at its sole discretion, such agreements in each case
incorporating terms and provisions substantially identical to those
described in the immediately preceding paragraph; and
(9)
to transfer the servicing rights to the Purchaser or its
designee as described in Section 15 upon the direction of the
Purchaser.
Unless otherwise agreed to between the Seller and the Purchaser,
with respect to any Loan Package, the Seller will not be obligated
to enter into any Reconstitution Agreement in excess of any express
restrictions set forth in the related Assignment and Conveyance and
related Confirmation.
All Loans not sold or transferred pursuant to a Securitization
Transaction shall be subject to this Agreement and shall continue
to be serviced in accordance with the terms of this Agreement and
with respect thereto this Agreement shall remain in full force and
effect.
SECTION 13.
The Seller .
Subsection 13.01.
Additional Indemnification by the
Seller .
In addition to the indemnification provided in Subsection 7.03,
the Seller shall indemnify the Purchaser and hold the Purchaser
harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that the
Purchaser may sustain in any way related to the failure of the
Seller to perform its obligations under this Agreement including
but not limited to its obligation to service and administer the
Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 12.
Subsection 13.02.
Merger or Consolidation of the Seller
.
The Seller shall keep in full force and effect its existence,
rights and franchises as a federal savings bank under the laws of
the United States of America except as permitted herein, and shall
obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of
this Agreement or any of the Loans, and to enable the Seller to
perform its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated,
or any corporation resulting from any merger, conversion or
consolidation to which the Seller shall be a party, or any Person
succeeding to the business of the Seller, shall be the successor of
the Seller hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however,
that the successor or surviving Person shall be an institution
having a GAAP net worth of not less than $25,000,000 and whose
deposits are insured by FDIC or a company whose primary business is
the origination and servicing of loans, shall be a Fannie Mae or
Freddie Mac approved seller/servicer in good standing and shall
satisfy any requirements of Section 16 with respect to the
qualifications of a successor to the Seller.
Subsection 13.03.
Limitation on Liability of the Seller and
Others .
Neither the Seller nor any of the officers, employees or agents
of the Seller shall be under any liability to the Purchaser for any
action taken or for refraining from the taking of any action in
good faith in connection with the servicing of the Loans pursuant
to this Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Seller or any such person
against any breach of warranties or representations made herein, or
failure to perform its obligations in strict compliance with any
standard of care set forth in this Agreement, or any liability
which would otherwise be imposed by reason of any breach of the
terms and conditions of this Agreement. The Seller and any officer,
employee or agent of the Seller may rely in good faith on any
document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Seller
shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its obligation to sell
or duty to service the Loans in accordance with this Agreement and
which in its opinion may result in its incurring any expenses or
liability; provided, however, that the Seller may, with the consent
of the Purchaser, undertake any such action which it may deem
necessary or desirable in respect to this Agreement and the rights
and duties of the parties hereto. In such event, the legal expenses
and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities for which the Purchaser
shall be liable, the Seller shall be entitled to reimbursement
therefor from the Purchaser upon written demand except when such
expenses, costs and liabilities are subject to the Seller’s
indemnification under Subsections 7.03 or 13.01.
Subsection 13.04.
Seller Not to Resign .
The Seller shall not assign this Agreement or res
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