Exhibit 99.2
MASTER MORTGAGE LOAN PURCHASE AND INTERIM
SERVICING AGREEMENT
DOWNEY SAVINGS AND LOAN ASSOCIATION,
F.A.
Seller and Interim Servicer
GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC.
Initial Purchaser
Dated as of September 1, 2004
Fixed and Adjustable Rate Mortgage
Loans
TABLE OF CONTENTS
Page
SECTION 1.
Definitions .
-1-
SECTION 2.
Agreement to Purchase
.
-11-
SECTION 3.
Mortgage Loan Schedules
.
-11-
SECTION 4.
Purchase Price .
-11-
SECTION 5.
Examination of Mortgage
Files .
-12-
SECTION 6.
Conveyance from Seller to Initial
Purchaser .
-12-
Subsection 6.01.
Conveyance of Mortgage Loans;
Possession of Servicing Files .
-12-
Subsection 6.02.
Books and Records
.
-13-
Subsection 6.03.
Delivery of Mortgage Loan
Documents .
-13-
SECTION 7.
Representations, Warranties and
Covenants of the Seller: Remedies for
Breach .
-14-
Subsection 7.01.
Representations and Warranties
Respecting the Seller .
-14-
Subsection 7.02.
Representations and Warranties
Regarding Individual Mortgage
Loans .
-16-
Subsection 7.03.
Remedies for Breach of Representations
and Warranties .
-27-
Subsection 7.04.
Repurchase of Certain Mortgage
Loans .
-29-
SECTION 8.
Closing .
-29-
SECTION 9.
Closing Documents
.
-30-
SECTION 10.
Costs .
-31-
SECTION 11.
Seller’s Servicing
Obligations .
-31-
SECTION 12.
Removal of Mortgage Loans from
Inclusion under This Agreement Upon a
Whole Loan Transfer or a Pass-Through
Transfer on One or More
Reconstitution Dates
.
-32-
SECTION 13.
The Seller .
-34-
Subsection 13.01.
Additional Indemnification by the
Seller .
-34-
Subsection 13.02.
Merger or Consolidation of the
Seller .
-34-
Subsection 13.03.
Limitation on Liability of the Seller
and Others .
-34-
Subsection 13.04.
Seller Not to Resign
.
-35-
Subsection 13.05.
No Transfer of Servicing
.
-35-
SECTION 14.
Default .
-35-
Subsection 14.01.
Events of Default
.
-35-
Subsection 14.02.
Waiver of Defaults
.
-36-
SECTION 15.
Termination .
-37-
SECTION 16.
Successor to the Seller
.
-37-
SECTION 17.
Financial Statements
.
-38-
SECTION 18.
Mandatory Delivery: Grant of Security
Interest .
-38-
SECTION 19.
Notices .
-39-
SECTION 20.
Severability Clause
.
-39-
SECTION 21.
Counterparts .
-40-
SECTION 22.
Governing Law .
-40-
SECTION 23.
Intention of the Parties
.
-40-
SECTION 24.
Successors and Assigns
.
-40-
SECTION 25.
Waivers .
-41-
SECTION 26.
Exhibits .
-41-
SECTION 27.
Nonsolicitation
.
-41-
SECTION 28.
General Interpretive
Principles .
-41-
SECTION 29.
Reproduction of Documents
.
-42-
SECTION 30.
Further Agreements
.
-42-
SECTION 31.
Entire Agreement
.
-42-
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 MORTGAGE FILE
EXHIBIT 6
FORM OF CUSTODIAL AGREEMENT
EXHIBIT 7
FORM OF CUSTODIAL ACCOUNT LETTER
AGREEMENT
EXHIBIT 8
FORM OF ESCROW ACCOUNT LETTER
AGREEMENT
EXHIBIT 9
SERVICING ADDENDUM
EXHIBIT 10
FORM OF ASSIGNMENT AND RECOGNITION
AGREEMENT
EXHIBIT 11
FORM OF INDEMNIFICATION
AGREEMENT
SCHEDULE I
MORTGAGE LOAN SCHEDULE
SCHEDULE II
PREPAYMENT CHARGE SCHEDULE
MASTER MORTGAGE LOAN PURCHASE AND INTERIM
SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE
AND INTERIM SERVICING AGREEMENT (the “Agreement”),
dated as of September 1, 2004, by and between Greenwich Capital
Financial Products, Inc., having an office at 600 Steamboat Road,
Greenwich, Connecticut 06830 (the “Initial Purchaser”,
and the Initial Purchaser or the Person, if any, to which the
Initial Purchaser has assigned its rights and obligations hereunder
as Purchaser with respect to a Mortgage Loan, and each of their
respective successors and assigns, the “Purchaser”) and
Downey Savings and Loan Association, F.A., having an office at 3501
Jamboree Road, Newport Beach, California 92660 (the
“Seller”).
W I T N E S S E T H
:
WHEREAS, the Seller desires to sell, from
time to time, to the Purchaser, and the Purchaser desires to
purchase, from time to time, from the Seller, certain conventional
fixed and adjustable rate residential first lien mortgage loans,
including the right to any Prepayment Charges payable by the
related Mortgagors as described herein, (the “Mortgage
Loans”) as described herein on a servicing-released basis,
and which shall be delivered in groups of whole loans on various
dates as provided herein (each, a “Closing
Date”);
WHEREAS, each Mortgage Loan is secured by
a mortgage, deed of trust or other security instrument creating a
first lien on a residential dwelling located in the jurisdiction
indicated on the Mortgage Loan Schedule for the related Mortgage
Loan Package, which is to be annexed hereto on each Closing Date as
Schedule I;
WHEREAS, the Purchaser and the Seller
wish to prescribe the manner of the conveyance, interim servicing
and control of the Mortgage Loans; and
WHEREAS, following its purchase of the
Mortgage Loans from the Seller, the Purchaser desires to sell some
or all of the Mortgage Loans to one or more purchasers as a whole
loan transfer in a whole loan or participation format or a public
or private mortgage-backed securities transaction;
NOW, THEREFORE, in consideration of the
premises and mutual agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Purchaser and the Seller agree as
follows:
SECTION 1.
Definitions .
For purposes of this Agreement the
following capitalized terms shall have the respective meanings set
forth below.
Adjustable Rate Mortgage
Loan : A Mortgage Loan which
provides for the adjustment of the Mortgage Interest Rate payable
in respect thereto.
Adjustment Date
: With respect to each Adjustable Rate
Mortgage Loan, the date set forth in the related Mortgage Note on
which the Mortgage Interest Rate on such Adjustable Rate Mortgage
Loan is adjusted in accordance with the terms of the related
Mortgage Note.
Agreement : This Master Mortgage 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 an appraisal
made for the originator of the Mortgage Loan at the time of
origination of the Mortgage Loan by an appraiser who met the
minimum requirements of FNMA and FHLMC and the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989., and
(ii) the purchase price paid for the related Mortgaged Property by
the Mortgagor with the proceeds of the Mortgage Loan, provided,
however, in the case of a Refinanced Mortgage Loan, such value of
the Mortgaged Property is based solely upon the value determined by
an appraisal made for the originator of such Refinanced Mortgage
Loan at the time of origination of such Refinanced Mortgage Loan by
an appraiser who met the minimum requirements of FNMA and FHLMC and
the Financial Institutions Reform, Recovery, and Enforcement Act of
1989.
Assignment and Conveyance
: An assignment and conveyance of the
Mortgage Loans purchased on a Closing Date in the form annexed
hereto as Exhibit 4.
Assignment of Mortgage
: With respect to each Mortgage Loan
which is not a MERS Loan, an individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related
Mortgaged Property is located to give record notice of the sale of
the Mortgage to the Purchaser.
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
California or the State of New York are authorized or obligated by
law or executive order to be closed.
Cash-Out Refinancing
: A Refinanced Mortgage Loan the proceeds
of which were in excess of the principal balance of any existing
first mortgage on the related Mortgaged Property and related
closing costs, and were used to pay any such existing first
mortgage, related closing costs and subordinate mortgages on the
related Mortgaged Property.
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 Mortgage Loans listed on the related Mortgage
Loan Schedule with respect to the related Mortgage 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.
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 Mortgage 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 Mortgage Loans to be purchased
by the Purchaser on such Closing Date. A Confirmation may relate to
more than one Mortgage Loan Package to be purchased on one or more
Closing Dates hereunder.
Convertible Mortgage Loan
: A Mortgage Loan that by its terms and
subject to certain conditions contained in the related Mortgage or
Mortgage Note allows the Mortgagor to convert the adjustable
Mortgage Interest Rate on such Mortgage Loan to a fixed Mortgage
Interest Rate.
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 “Downey
Savings and Loan Association, F.A., as servicer, in trust for the
Purchaser and various Mortgagors, Fixed and Adjustable Rate
Mortgage Loans”, established at a financial institution
acceptable to the Purchaser.
Custodial Agreement
: The agreement governing the retention
of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents, a form of which
agreement is annexed hereto as Exhibit 6.
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 Mortgage Loan
: A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
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 following 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 Mortgage
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
: Either (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 A-1
by S&P or Prime-1 by Moody’s (or a comparable rating if
another rating agency is specified by the Initial Purchaser by
written notice to the Seller) at the time any amounts are held on
deposit therein, (ii) an account or accounts the deposits in which
are fully insured by the FDIC, (iii) a trust account or accounts
maintained with a federal or state chartered depository institution
or trust company acting in its fiduciary capacity or (iv) Downey
Savings and Loan Association, F.A., provided that the short-term
unsecured debt obligations of which are rated A-2 or higher by
S&P. Eligible Accounts may bear interest.
Escrow Account : The separate trust account or accounts created and
maintained pursuant to this Agreement which shall be entitled
“Downey Savings and Loan Association, F.A., as servicer, in
trust for the Purchaser and various Mortgagors, Fixed and
Adjustable Rate Mortgage Loans,” established at a financial
institution acceptable to the Purchaser.
Escrow Payments
: The amounts constituting ground rents,
taxes, assessments, water charges, sewer rents, Primary Insurance
Policy premiums, fire and hazard insurance premiums and other
payments required to be escrowed by the Mortgagor with the
Mortgagee pursuant to the terms of any Mortgage Note or
Mortgage.
Event of Default
: Any one of the events enumerated in
Subsection 14.01.
FDIC : The Federal Deposit Insurance Corporation, or any
successor thereto.
FHLMC : Freddie Mac or any successor thereto.
Final Recovery
Determination : With respect
to any defaulted Mortgage Loan or any REO Property (other than a
Mortgage 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.
Fixed Rate Mortgage Loan
: A Mortgage Loan with respect to which
the Mortgage Interest Rate set forth in the Mortgage Note is fixed
for the term of such Mortgage Loan.
Flood Zone Service Contract
: A transferable contract maintained for
the Mortgaged Property with a nationally recognized flood zone
service provider for the purpose of obtaining the current flood
zone status relating to such Mortgaged Property.
FNMA : Fannie Mae or any successor thereto.
Gross Margin : With respect to any Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note
and the related Mortgage Loan Schedule that is added to the Index
on each Adjustment Date in accordance with the terms of the related
Mortgage Note to determine the new Mortgage Interest Rate for such
Mortgage Loan.
HUD : The United States Department of Housing and-Urban
Development or any successor thereto.
Index : With respect to any Adjustable Rate Mortgage Loan,
the index identified on the Mortgage Loan Schedule and set forth in
the related Mortgage Note for the purpose of calculating the
interest rate thereon.
Initial Closing Date
: The Closing Date on which the Initial
Purchaser purchases and the Seller sells the first Mortgage Loan
Package hereunder.
Initial Purchaser
: Greenwich Capital Financial Products,
Inc., or any successor.
Insurance Proceeds
: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the
related Mortgaged Property.
Interim Servicing Period
: With respect to any Mortgage Loan,
thirty (30) after the related Closing Date, or such other period
mutually agreed to by the Seller and the Initial
Purchaser.
Liquidation Proceeds
: Amounts, other than Insurance Proceeds
and Condemnation Proceeds, received in connection with the
liquidation of a defaulted Mortgage Loan through trustee’s
sale, foreclosure sale or otherwise, other than amounts received
following the acquisition of REO Property.
Loan-to-Value Ratio or LTV
: With respect to any Mortgage Loan as of
any date of determination, the ratio on such date of the
outstanding principal amount of the Mortgage Loan, to the Appraised
Value of the Mortgaged Property.
Maximum Mortgage Interest
Rate : With respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the
related Mortgage Loan Schedule and in the related Mortgage Note and
is the maximum interest rate to which the Mortgage Interest Rate on
such Mortgage Loan may be increased on any Adjustment
Date.
MERS : Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of
Delaware, or any successor thereto.
MFRS® System
: The system of recording transfers of
Mortgages electronically maintained by MERS.
MIN : The Mortgage Identification Number of Mortgage
Loans registered with MERS on the MFRS® System.
Minimum Mortgage Interest
Rate : With respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the
related Mortgage Loan Schedule and in the related Mortgage Note and
is the minimum interest rate to which the Mortgage Interest Rate on
such Mortgage Loan may be decreased on any Adjustment
Date.
MOM Loan : Any Mortgage Loan where MERS acts as the mortgagee
of record of such Mortgage Loan, solely as nominee for the
originator of such Mortgage Loan and its successors and assigns, at
the origination thereof.
Monthly Payment
: With respect to any Mortgage Loan, the
scheduled combined payment of principal and interest payable by a
Mortgagor under the related Mortgage Note on each Due
Date.
Moody’s : Moody’s Investors Service, Inc. or its
successor in interest.
Mortgage : The mortgage, deed of trust or other instrument
creating a first lien on Mortgaged Property securing the Mortgage
Note.
Mortgage File : The items pertaining to a particular Mortgage Loan
referred to in Exhibit 5 annexed hereto, and any additional
documents required to be added to the Mortgage File pursuant to
this Agreement or the related Confirmation.
Mortgage Interest Rate
: With respect to each Fixed Rate
Mortgage Loan, the fixed annual rate of interest provided for in
the related Mortgage Note and, with respect to each Adjustable Rate
Mortgage Loan, the annual rate that interest accrues on such
Adjustable Rate Mortgage Loan from time to time in accordance with
the provisions of the related Mortgage Note.
Mortgage Loan : Each first lien, residential mortgage loan, sold,
assigned and transferred to the Purchaser pursuant to this
Agreement and the related Confirmation and identified on the
Mortgage Loan Schedule annexed to this Agreement on such Closing
Date, which Mortgage Loan includes without limitation the Mortgage
File, the Monthly Payments, Prepayment Charges, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage
Loan.
Mortgage Loan Documents
: The documents listed in Section 2 of
the Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Package
: The Mortgage Loans listed on a Mortgage
Loan Schedule, delivered to the Custodian and the Purchaser at
least five (5) Business Days prior to the related Closing Date and
attached to this Agreement as Schedule I on the related Closing
Date.
Mortgage Loan Schedule
: With respect to each Mortgage Loan
Package, the schedule of Mortgage Loans to be annexed hereto as
Schedule I (or a supplement thereto) on each Closing Date for the
Mortgage Loan Package delivered on such Closing Date in both hard
copy and floppy disk, such schedule setting forth the following
information with respect to each Mortgage Loan in the Mortgage Loan
Package: (1) the Seller’s Mortgage Loan identifying number;
(2) the Mortgagor’s first and last name; (3) the street
address of the Mortgaged Property including the state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied; (5) the type of Residential Dwelling constituting
the Mortgaged Property; (6) the original months to maturity; (7)
the original date of the Mortgage Loan and the remaining months to
maturity from the Cut-off Date, based on the original amortization
schedule; (8) the Loan-to-Value Ratio at origination; (9) the
Mortgage Interest Rate in effect immediately following the Cut-off
Date; (10) the date on which the first Monthly Payment was due on
the Mortgage Loan; (11) the stated maturity date; (12) the amount
of the Monthly Payment at origination; (13) the amount of the
Monthly Payment as of the Cut-off Date; (14) the last Due Date on
which a Monthly Payment was actually applied to the unpaid Stated
Principal Balance; (15) the original principal amount of the
Mortgage Loan; (16) the Stated Principal Balance of the Mortgage
Loan as of the close of business on the Cut-off Date; (17) with
respect to each Adjustable Rate Mortgage Loan, the first Adjustment
Date; (18) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (19) a code indicating the purpose of the loan (i.e.,
purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);
(20) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Interest Rate under the terms of the Mortgage
Note; (21) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Interest Rate under the terms of the Mortgage
Note; (22) the Mortgage Interest Rate at origination; (23) with
respect to each Adjustable Rate Mortgage Loan, the Periodic Rate
Cap; (24) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date immediately following the Cut-off Date; (25)
with respect to each Adjustable Rate Mortgage Loan, the Index; (26)
the date on which the first Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (27) a code indicating whether
the Mortgage Loan is an Adjustable Rate Mortgage Loan or a Fixed
Rate Mortgage Loan; (28) a code indicating the documentation style
(i.e., full, alternative or reduced); (29) a code indicating if the
Mortgage Loan is subject to a Primary Insurance Policy; (30) the
Appraised Value of the Mortgaged Property; (31) the sale price of
the Mortgaged Property, if applicable; (31) a code indicating
whether the Mortgage Loan is subject to a Prepayment Charge or
penalty; (32) the amount and the term of any Prepayment Charge or
penalty; and (33) with respect to each MERS Mortgage Loan, the
related MIN. With respect to the Mortgage Loan Package in the
aggregate, the Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans; and (4) the weighted average maturity of the
Mortgage Loans. Schedule I hereto shall be supplemented as of each
Closing Date to reflect the addition of the Mortgage Loan Schedule
with respect to the related Mortgage Loan Package.
Mortgage Note : The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor.
Mortgaged Property
: The Mortgagor’s real property
securing repayment of a related Mortgage Note, consisting of a fee
simple interest in a single parcel of real property improved by a
Residential Dwelling.
Mortgagee : The mortgagee or beneficiary named in the Mortgage
and the successors and assigns of such mortgagee or
beneficiary.
Mortgagor : The obligor on a Mortgage Note, the owner of the
Mortgaged Property and the grantor or mortgagor named in the
related Mortgage and such grantor’s or mortgagor’s
successor’s in title to the Mortgaged Property.
Negative Amortization
: With respect to each Negative
Amortization Mortgage Loan, that portion of interest accrued at the
Mortgage Interest Rate in any month which exceeds the Monthly
Payment on the related Mortgage Loan for such month and which,
pursuant to the terms of the Mortgage Note, is added to the
principal balance of the Mortgage Loan.
Negative Amortization Mortgage
Loan : Each Mortgage Loan that
is identified on the Mortgage Loan Schedule as a Mortgage Loan that
may be subject to Negative Amortization.
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 maybe
salaried counsel for the Person on behalf of whom the opinion is
being given, reasonably acceptable to each Person to whom such
opinion is addressed.
Pass-Through Transfer
: The sale or transfer of some or all of
the Mortgage Loans by the Purchaser to a trust to be formed as part
of a publicly issued or privately placed mortgage-backed securities
transaction.
Payment Adjustment Date
: With respect to each Negative
Amortization Mortgage Loan, the date on which Monthly Payments
shall be adjusted. A Payment Adjustment Date with respect to a
Negative Amortization Mortgage Loan shall occur on each anniversary
date of the first payment date for the Mortgage Loan.
Periodic Rate Cap
: With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, a number of
percentage points per annum that is set forth in the related
Mortgage Loan Schedule and in the related Mortgage Note, which is
the maximum amount by which the Mortgage Interest Rate for such
Adjustable Rate Mortgage Loan may increase (without regard to the
Maximum Mortgage Interest Rate) or decrease (without regard to the
Minimum Mortgage Interest Rate) on such Adjustment Date from the
Mortgage 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.
Prepayment Charge
: With respect to any Mortgage Loan, any
prepayment penalty or premium thereon payable in connection with a
Principal Prepayment on such Mortgage Loan pursuant to the terms of
the related Mortgage Note.
Prepayment Charge Schedule
: The schedule to be annexed hereto as
Schedule II indicating whether a Mortgage Loan is subject to a
Prepayment Charge and if so, the amount and term of such Prepayment
Charge.
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 Mortgage Loan which is received in advance of its
scheduled Due Date, including any Prepayment Charge, which is not
accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent
to the month of prepayment.
Purchase Price : The price paid on the related Closing Date by the
Purchaser to the Seller pursuant to the related Confirmation in
exchange for the Mortgage Loans purchased on such Closing Date as
calculated as provided in Section 4.
Qualified Insurer
: An insurance company which meets the
requirements of FNMA or FHLMC.
Qualified Substitute Mortgage
Loan : A mortgage loan
substituted for a Deleted Mortgage 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 Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a
Mortgage Interest Rate not less than (and not more than one
percentage point in excess of) the Mortgage Interest Rate of the
Deleted Mortgage Loan, (iii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (iv) have the same Due Date as the Due Date
on the Deleted Mortgage Loan, (v) 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 Mortgage Loan as of such date, (vi) conform to
each representation and warranty set forth in Subsection 7.02 of
this Agreement, (vii) be covered under a Primary Insurance Policy
if such Qualified Substitute Mortgage Loan has a Loan-to-Value
Ratio in excess of 80%, and (viii) be the same type of mortgage
loan (i.e. fixed or adjustable rate with the same Gross Margin and
Index as the Deleted Mortgage Loan). In the event that one or more
mortgage loans are substituted for one or more Deleted Mortgage
Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the
Mortgage Interest Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Mortgage Interest Rates
and shall be satisfied as to each such mortgage loan, the terms
described in clause (iii) shall be determined on the basis of
weighted average remaining terms to maturity, the Loan-to-Value
Ratios described in clause (v) hereof shall be satisfied as to each
such mortgage loan and, except to the extent otherwise provided in
this sentence, the representations and warranties described in
clause (vi) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may
be.
Rate/Term Refinancing
: A Refinanced Mortgage Loan, the
proceeds of which are not in excess of the existing first mortgage
loan on the related Mortgaged Property and related closing costs,
and were used exclusively to satisfy the then existing first
mortgage loan of the Mortgagor on the related Mortgaged Property
and to pay related closing costs.
Reconstitution Agreement
: The agreement or agreements entered
into by the Seller and the Purchaser and/or certain third parties
on the Reconstitution Date or Dates with respect to any or all of
the Mortgage Loans serviced hereunder, in connection with a Whole
Loan Transfer or a Pass-Through Transfer as provided in Section
12.
Reconstitution Date
: The date or dates on which any or all
of the Mortgage Loans serviced under this Agreement shall be
removed from this Agreement and reconstituted as part of a Whole
Loan Transfer or Pass-Through Transfer 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 Mortgage Loan
: A Mortgage Loan the proceeds of which
were not used to purchase the related Mortgaged
Property.
REMIC : A “real estate mortgage investment
conduit” within the meaning of Section 860D of the
Code.
REO Account : The separate trust account or accounts created and
maintained pursuant to this Agreement which shall be entitled
“Downey Savings and Loan Association, F.A., in trust for the
Purchaser, as of [date of acquisition of title], Fixed and
Adjustable Rate Mortgage Loans”.
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 Mortgage Loan.
Repurchase Price
: With respect to any Mortgage Loan, a
price equal to (i)(A) prior to the Reconstitution Date with respect
to such Mortgage Loan, the product of the Stated Principal Balance
of such Mortgage Loan times the greater of (x) the Purchase Price
percentage as stated in the related Confirmation and (y) 100%, and
(B) thereafter, the Stated Principal Balance of such Mortgage Loan,
plus (ii) interest on such Stated Principal Balance at the Mortgage
Interest Rate from and including the last Due Date through which
interest has been paid by or on behalf of the Mortgagor to the
first day of the month following the date of repurchase, less
amounts received in respect of such repurchased Mortgage Loan which
are being held in the Custodial Account for distribution in
connection with such Mortgage Loan, plus (iii) any unreimbursed
servicing advances and monthly advances (including nonrecoverable
monthly advances) and any unpaid servicing fees allocable to such
Mortgage Loan paid by any party other than the Seller, plus (iv)
any costs and expenses incurred by the Purchaser, the servicer,
master servicer or any trustee in respect of the breach or defect
giving rise to the repurchase obligation including, without
limitation, any costs and damages incurred by any such party in
connection with any violation by any such Mortgage Loan of any
predatory or abusive lending law.
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 FNMA eligible
condominium project, or (iv) a detached one-family dwelling in a
planned unit development, none of which is a co-operative, mobile
or manufactured home.
Servicing Addendum
: The terms and conditions attached
hereto as Exhibit 9 which will govern the servicing of the Mortgage
Loans by Seller during the Interim Servicing Period.
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, (ii) any enforcement or judicial
proceedings with respect to a Mortgage Loan, including foreclosure
actions and (iii) the management and liquidation of REO
Property.
Servicing Fee : With respect to each Mortgage Loan, an amount as
set forth in Exhibit 13. If the Interim Servicing Period includes
any partial month, the Servicing Fee for such month shall be pro
rated at a per diem rate based upon a 30-day month. The Servicing
Fee is payable solely from the interest portion of monthly payments
collected by the Seller.
Servicing File : With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in
the Mortgage File which are not delivered to the Purchaser or the
Custodian and copies of the Mortgage Loan Documents set forth in
Section 2 of the Custodial Agreement.
S&P : Standard & Poor’s Ratings Group or its
successor in interest.
Stated Principal Balance
: As to each Mortgage Loan as of any date
of determination, (i) the principal balance of the Mortgage Loan as
of the Cut-off Date after giving effect to payments of principal
received on or before such date, whether or not collected from the
Mortgagor on or before such date, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal.
Tax Service Contract
: A transferable contract maintained for
the Mortgaged Property with a tax service provider for the purpose
of obtaining current information from local taxing authorities
relating to such Mortgaged Property.
Whole Loan Transfer
: Any sale or transfer of some or all of
the Mortgage Loans by the Purchaser to a third party, which sale or
transfer is not a Pass-Through Transfer.
SECTION 2.
Agreement to Purchase
.
The Seller agrees to sell, and the
Purchaser agrees to purchase, from time-to-time, Mortgage 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 Mortgage Loans
accepted by the Purchaser on the related Closing Date.
SECTION 3.
Mortgage Loan Schedules
.
The Seller shall deliver the Mortgage
Loan Schedule for a Mortgage Loan Package to be purchased on a
particular Closing Date to the Purchaser at least five (5) Business
Days prior to the related Closing Date.
SECTION 4.
Purchase Price .
The Purchase Price for each Mortgage Loan
listed on the related Mortgage 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 Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as
described above, the Initial Purchaser shall pay to the Seller, at
closing, accrued interest on the Stated Principal Balance of each
Mortgage Loan as of the related Cut-off Date at its Mortgage
Interest Rate, net of the Servicing Fee, from the related Cut-off
Date through the day prior to the related Closing Date, both
inclusive.
The Purchaser shall own and be entitled
to receive with respect to each Mortgage Loan purchased, (1) all
recoveries of principal collected after the Cut-off Date, (2) all
payments of interest on the Mortgage Loans net of the Servicing Fee
during the Interim Servicing Period; and (3) all Prepayment Charges
on the Mortgage Loans collected on or after the Cut-Off
date.
SECTION 5.
Examination of Mortgage
Files .
In addition to the rights granted to the
Initial Purchaser under the related Confirmation to underwrite the
Mortgage Loans and review the Mortgage Files prior to the Closing
Date, prior to the related Closing Date, the Seller shall, at the
Purchaser’s option (a) deliver to the Custodian in escrow,
for examination with respect to each Mortgage Loan to be purchased
on such Closing Date, the related Mortgage File, including the
Assignment of Mortgage, pertaining to each Mortgage Loan, or (b)
make the related Mortgage 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 or after
the related Closing Date. If the Initial Purchaser makes such
examination prior to the related Closing Date and identifies any
Mortgage Loans that do not conform to the terms of the related
Confirmation or the Initial Purchaser’s underwriting
standards, such Mortgage Loans may, at the Initial
Purchaser’s option, be rejected for purchase by the Initial
Purchaser. If not purchased by the Initial Purchaser, such Mortgage
Loans shall be deleted from the related Mortgage Loan Schedule. The
Initial Purchaser may, at its option and without notice to the
Seller, purchase all or part of any Mortgage 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 Mortgage 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 Mortgage 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 Mortgage Loan Package in the form attached hereto as
Exhibit 4. The Servicing File retained by the Seller with respect
to each Mortgage Loan pursuant to this Agreement shall be
appropriately identified in the Seller’s computer system to
reflect clearly the sale of such related Mortgage Loan to the
Purchaser. The Purchaser shall be entitled to receive all
Prepayment Charges required to be paid by a Mortgagor under the
terms of any Mortgage Loan. The Seller shall release from its
custody the contents of any Servicing File retained by it only in
accordance with this Agreement, except when such release is
required in connection with a repurchase of any such Mortgage Loan
pursuant to Subsection 7.03 or 7.04.
Subsection 6.02.
Books and Records
.
Record title to each Mortgage and the
related Mortgage Note as of the related Closing Date shall be in
the name of the Seller, the Purchaser, the Custodian or one or more
designees of the Purchaser, as the Purchaser shall designate.
Notwithstanding the foregoing, beneficial ownership of each
Mortgage and the related Mortgage Note shall be vested solely in
the Purchaser or the appropriate designee of the Purchaser, as the
case may be. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received by the Seller
after the related Cut-off Date on or in connection with a Mortgage
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 Mortgage Loan as
provided in Section 4 shall be received and held by the Seller in
trust for the benefit of the Purchaser or the assignee of the
Purchaser, as the case may be, as the owner of the Mortgage 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 Mortgage Loans by the Seller and
not a pledge of the Mortgage Loans by the Seller to the Purchaser
to secure a debt or other obligation of the Seller. Consequently,
the sale of each Mortgage Loan shall be reflected as a sale on the
Seller’s business records, tax returns and financial
statements.
Subsection 6.03.
Delivery of Mortgage Loan
Documents .
Pursuant to the Custodial Agreement to be
executed among and delivered by the Initial Purchaser, the
Custodian and the Seller prior to the Initial Closing Date, 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 those Mortgage Loan Documents
as required by the Custodial Agreement with respect to each
Mortgage Loan to be purchased and sold on the related Closing Date
and set forth on the related Mortgage Loan Schedule delivered with
such Mortgage Loan Documents.
The Custodian shall certify its receipt
of all such Mortgage Loan Documents required to be delivered
pursuant to the Custodial Agreement for the related Closing Date,
as evidenced by the Trust Receipt and Initial Certification of the
Custodian in the form annexed to the Custodial Agreement. The
Initial Purchaser shall be responsible for maintaining the
Custodial Agreement during the Interim Servicing Period. The fees
and expenses of the Custodian shall be paid by the Initial
Purchaser.
The Seller shall forward to the Custodian
original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement within two weeks of their execution,
provided, however, that the Seller shall provide the Custodian with
a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide
the original of any document submitted for recordation or a copy of
such document certified by the appropriate public recording office
to be a true and complete copy of the original within two-hundred
and seventy (270) days of its submission for
recordation.
SECTION 7.
Representations, Warranties and
Covenants of the Seller: Remedies for Breach
.
Subsection 7.01.
Representations and Warranties
Respecting the Seller .
The Seller represents, warrants and
covenants to the Initial Purchaser and to any subsequent 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 a federal association duly
and validly existing under the laws of the United States of America
and all licenses necessary to carry out its business as now being
conducted. It is licensed and qualified to transact business in and
is in good standing under the laws of each state in which any
Mortgaged Property is located or is otherwise exempt under
applicable law from such licensing or qualification or is otherwise
not required under applicable law to effect such licensing or
qualification, and in any event the Seller is in compliance with
the laws of any such state to the extent necessary to ensure the
enforceability of each Mortgage Loan and the interim servicing of
the Mortgage Loans in accordance with the terms of this Agreement.
No licenses or approvals obtained by the 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 Mortgage Loan, to sell each Mortgage 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 will not violate the Seller’s
charter and other formation documents 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 FNMA and FHLMC 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 FNMA,
FHLMC or HUD eligibility requirements or which would require
notification to FNMA, FHLMC 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 Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be
delivered with respect to each Mortgage Loan pursuant to the
Custodial Agreement, have been delivered to the Custodian all in
compliance with the specific requirements of the Custodial
Agreement. With respect to each Mortgage Loan, the Seller is in
possession of a complete Mortgage File in compliance with Exhibit
5, except for such documents as have been delivered to the
Custodian;
(viii)
Immediately prior to the payment of the
Purchase Price for each Mortgage Loan, the Seller was the owner of
record of the related Mortgage and the indebtedness evidenced by
the related Mortgage 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 to each Mortgage,
each related Mortgage Note and the related Mortgage Files with
respect thereto in trust for the Purchaser as the owner thereof and
only for the purpose of servicing and supervising the servicing of
each Mortgage 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 Mortgage 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 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 Mortgage Notes and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer or any similar
statutory provisions;
(xii)
The transfer of the Mortgage 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 Mortgage 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 Mortgage Loan which shall be
clearly marked to reflect the ownership of each Mortgage Loan by
the Purchaser;
(xiii)
The consideration received by the Seller
upon the sale of the Mortgage Loans constitutes fair consideration
and reasonably equivalent value for such Mortgage Loans;
(xiv)
The Seller is solvent and will not be
rendered insolvent by the consummation of the transactions
contemplated hereby. The Seller is not transferring any Mortgage
Loan with any intent to hinder, delay or defraud any of its
creditors;
(xv)
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 mortgage loans
underwritten to the same standards as the Mortgage Loans and
covering mortgaged properties similar to the Mortgaged Properties,
is true and correct in all material respects;
(xvi)
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;
(xvii)
The Seller is a member of MERS in good
standing, will comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the Mortgage
Loans that are registered with MERS and is current in payment of
all fees and assessments imposed by MERS; and
(xviii)
The Seller will comply in all material
respects with the rules and procedures of MERS in connection with
the servicing of the Mortgage Loans that are registered with
MERS.
Subsection 7.02.
Representations and Warranties
Regarding Individual Mortgage Loans .
The Seller hereby represents and warrants
to the Initial Purchaser and to any subsequent Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such
Mortgage Loan:
(i)
The information set forth in the related
Mortgage Loan Schedule is complete, true and correct;
(ii)
The Mortgage Loan is in compliance with
all requirements set forth in the related Confirmation, and the
characteristics of the related Mortgage Loan Package as set forth
in the related Confirmation are true and correct, provided,
however, that in the event of any conflict between the terms of any
Confirmation and this Agreement, the terms of this Agreement shall
control;
(iii)
All payments required to be made up to
the close of business on the Closing Date for such Mortgage Loan
under the terms of the Mortgage Note 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 Mortgage Note or Mortgage; and there has
been no delinquency, exclusive of any period of grace, in any
payment by the Mortgagor thereunder since the origination of the
Mortgage 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;
(v)
The terms of the Mortgage Note and the
Mortgage 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, if
any, and the title insurer, to the extent required by the related
policy, and is reflected on the related Mortgage Loan Schedule. No
instrument of waiver, alteration or modification has been executed,
and no Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement approved by the insurer
under the Primary Insurance 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 Mortgage Loan
Schedule;
(vi)
The Mortgage 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 Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense
of usury and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto. Each Prepayment
Charge or penalty with respect to any Mortgage Loan is permissible,
enforceable and collectible under applicable federal, state and
local law;
(vii)
All buildings upon the Mortgaged Property
are insured by an insurer acceptable to FNMA and FHLMC against loss
by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located,
pursuant to insurance policies conforming to the requirements of
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 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 FNMA and FHLMC. The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the
Mortgagor’s cost and expense, and on the Mortgagor’s
failure to do so, authorizes the holder of the Mortgage to maintain
such insurance at Mortgagor’s cost and expense and to seek
reimbursement therefor from the Mortgagor;
(viii)
Any and all requirements of any federal,
state or local law including, without limitation, usury, truth in
lending, real estate settlement procedures, predatory and abusive
lending, consumer credit protection, equal credit opportunity, fair
housing or disclosure laws applicable to the origination and
servicing of mortgage loans of a type similar to the Mortgage Loans
have been complied with;
(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 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 Mortgage Loan
and which do not adversely affect the Appraised Value of the
Mortgaged Property, 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. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, existing and enforceable
first lien and first priority security interest on the property
described therein and the Seller has full right to sell and assign
the same to the Purchaser;
(xi)
The Mortgage Note and the related
Mortgage are genuine and each is the legal, valid and binding
obligation of the maker thereof, enforceable in accordance with its
terms;
(xii)
All parties to the Mortgage Note and the
Mortgage had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage, and the
Mortgage Note and the Mortgage have been duly and properly executed
by such parties. The Mortgagor is a natural person;
(xiii)
The proceeds of the Mortgage Loan have
been fully disbursed to or for the account of the Mortgagor and
there is no obligation for the Mortgagee to advance additional
funds thereunder and any and all requirements as to completion of
any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due to the Mortgagee
pursuant to the Mortgage Note or Mortgage;
(xiv)
The Seller is the sole legal, beneficial
and equitable owner of the Mortgage Note and the Mortgage and has
full right to transfer and sell the Mortgage 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 Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and
disposed of such interest, were) in compliance with any and all
applicable “doing business” and licensing requirements
of the laws of the state wherein the Mortgaged Property is
located;
(xvi)
The Mortgage Loan is covered by an ALTA
lender’s title insurance policy (which, has an adjustable
rate mortgage endorsement in the form of ALTA 6.0 or 6.1)
acceptable to FNMA or FHLMC, issued by a title insurer acceptable
to FNMA or FHLMC 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 Mortgage Loan and
against any loss by reason of the invalidity or unenforceability of
the lien resulting from the provisions of the Mortgage providing
for adjustment in the Mortgage Interest Rate, 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 Mortgage or the Mortgage
Note and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a
default, breach, violation or event 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;
(xx)
The Mortgage Loan was originated by the
Seller or by a savings and loan association, a savings bank, a
commercial bank or similar banking institution which is supervised
and examined by a federal or state authority, or by a mortgagee
approved as such by the Secretary of HUD;
(xxi)
Principal payments on the Mortgage Loan
commenced no more than sixty days after the proceeds of the
Mortgage Loan were disbursed. The Mortgage Loan bears interest at
the Mortgage Interest Rate. With respect to each Adjustable Rate
Mortgage Loan which is not a Negative Amortization Loan, the
Mortgage Note is payable on the first day of each month in Monthly
Payments, which, are changed on each Adjustment Date, and are
sufficient to fully amortize the original principal balance over
the original term thereof and to pay interest at the related
Mortgage Interest Rate. With respect to each Negative Amortization
Mortgage 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 Mortgage Loan has been outstanding
for a multiple of 5 years or the negative amortization limit is
reached and in any such year the Monthly Payment shall be adjusted
to fully amortize the Mortgage Loan over the remaining term. The
Index for each Mortgage Loan is as defined in the related
Confirmation. No Mortgage Loan is a Convertible Mortgage
Loan;
(xxii)
The origination and collection practices
used by the Seller with respect to each Mortgage Note and Mortgage
have been in all respects legal, proper, prudent and customary in
the mortgage origination and servicing industry. The Mortgage Loan
has been serviced by the Seller and any predecessor servicer in
accordance with the terms of the Mortgage 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
Mortgage Note and no such escrow deposits or Escrow Payments are
being held by the Seller for any work on a Mortgaged Property which
has not been completed;
(xxiii)
The Mortgaged Property is free of damage
and waste and there is no proceeding pending for the total or
partial condemnation thereof;
(xxiv)
The Mortgage and related Mortgage Note
contain customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the
security provided thereby, including, (a) in the case of a Mortgage
designated as a deed of trust, by trustee’s sale, and (b)
otherwise by judicial foreclosure. The Mortgaged Property is not
subject to any bankruptcy proceeding or foreclosure proceeding and
the Mortgagor has not filed for protection under applicable
bankruptcy laws. There is no homestead or other exemption available
to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee’s sale or the right to
foreclose the’ Mortgage. The Mortgagor has not notified the
Seller and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Servicemembers Civil Relief
Act;
(xxv)
The Mortgage Loan was underwritten in
accordance with the underwriting standards of the Seller in effect
at the time the Mortgage Loan was originated; and the Mortgage Note
and Mortgage are on forms acceptable to FNMA and FHLMC;
(xxvi)
The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding
Mortgage on the Mortgaged Property and the security interest of any
applicable security agreement or chattel mortgage referred to in
(x) above;
(xxvii)
Except as set forth on the
Mortgage Loan Schedule, the Mortgage File contains an appraisal of
the related Mortgaged Property which satisfied the standards of
FNMA or FHLMC, was on appraisal form 1004 or form 2055 with an
interior inspection and was made and signed, prior to the approval
of the Mortgage Loan application, by a qualified appraiser, duly
appointed by the Seller, who had no interest, direct or indirect in
the Mortgaged Property or in any loan made on the security thereof,
whose compensation is not affected by the approval or disapproval
of the Mortgage Loan and who met the minimum qualifications of FNMA
and FHLMC. Each appraisal of the Mortgage Loan was made in
accordance with the relevant provisions of the Financial
Institutions Reform, Recovery, and Enforcement Act of
1989;
(xxviii)
In the event the Mortgage
constitutes a deed of trust, a trustee, duly qualified under
applicable law to serve as such, has been properly designated and
currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a
trustee’s sale after default by the Mortgagor;
(xxix)
No Mortgage 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 Mortgagor, or anyone on behalf of the Mortgagor, (b)
paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a
“buydown” provision. The Mortgage Loan is not a
graduated payment mortgage loan and the Mortgage Loan does not have
a shared appreciation or other contingent interest
feature;
(xxx)
The Mortgagor has received all disclosure
materials required by applicable law with respect to the making of
fixed rate mortgage loans in the case of Fixed Rate Mortgage Loans,
and adjustable rate mortgage loans in the case of Adjustable Rate
Mortgage Loans and rescission materials with respect to Refinanced
Mortgage Loans, and such statement is and will remain in the
Mortgage File;
(xxxi)
No Mortgage Loan was made in connection
with (a) the construction or rehabilitation of a Mortgaged Property
or (b) facilitating the trade-in or exchange of a Mortgaged
Property;
(xxxii)
The Seller has no knowledge of any
circumstances or condition with respect to the Mortgage, the
Mortgaged Property, the Mortgagor or the Mortgagor’s credit
standing that can reasonably be expected to cause the Mortgage Loan
to be an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value of the Mortgage
Loan;
(xxxiii)
No Mortgage Loan had an LTV
at origination in excess of 95%. Each Mortgage Loan with an LTV at
origination in excess of 80% is and will be subject to a Primary
Insurance Policy, issued by a Qualified Insurer, which insures that
portion of the Mortgage Loan in excess of the portion of the
Appraised Value of the Mortgaged Property as required by FNMA. All
provisions of such Primary Insurance 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
such Primary Insurance Policy obligates the Mortgagor thereunder to
maintain such insurance and to pay all premiums and charges in
connection therewith. The Mortgage Interest Rate for the Mortgage
Loan does not include any such insurance premium;
(xxxiv)
The Mortgaged Property is lawfully
occupied under applicable law; all inspections, licenses and
certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the
appropriate authorities;
(xxxv)
No error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any person, including without
limitation the Mortgagor, any appraiser, any builder or developer,
or any other party involved in the origination of the Mortgage Loan
or in the application of any insurance in relation to such Mortgage
Loan;
(xxxvi)
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;
(xxxvii)
Any principal advances made to the
Mortgagor 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 FNMA or FHLMC. The
consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan plus any Negative
Amortization;
(xxxviii)
No Mortgage Loan has a balloon payment
feature;
(xxxix)
If the Residential Dwelling
on the Mortgaged Property is a condominium unit or a 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 FNMA or FHLMC;
(xl)
Reserved;
(xli)
Interest on each Mortgage Loan is
calculated on the basis of a 360-day year consisting of twelve
30-day months;
(xlii)
The Mortgaged Property is in material
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 Mortgagor, has received any notice of any violation or
potential violation of such law;
(xliii)
The Seller shall, at its own expense,
cause each Mortgage Loan to be covered by a Tax Service Contract
which is assignable to the Purchaser or its designee; provided
however, that if the Seller fails to purchase such Tax Service
Contract, the Seller shall be required to reimburse the Purchaser
for all costs and expenses incurred by the Purchaser in connection
with the purchase of any such Tax Service Contract;
(xliv)
Each Mortgage Loan is covered by a Flood
Zone Service Contract which is assignable to the Purchaser or its
designee or, for each Mortgage Loan not covered by such Flood Zone
Service Contract, the Seller agrees to purchase such Flood Zone
Service Contract;
(xlv)
No Mortgage Loan is (a) subject to the
provisions of the Homeownership and Equity Protection Act of 1994
as amended (“HOEPA”), (b) a “high cost”
mortgage loan, “covered” mortgage loan, “high
risk home” mortgage loan or “predatory” mortgage
loan or any other comparable term, no matter how defined under any
federal, state or local law (c) subject to any comparable federal,
state or local statutes or regulations, or any other statute or
regulation providing for heightened regulatory scrutiny or assignee
liability to holders of such mortgage loans, or (d) a High Cost
Loan or Covered Loan, as applicable (as such terms are defined in
the current Standard & Poor’s LEVELS® Glossary
Revised, Appendix E);
(xlvi)
No predatory or deceptive lending
practices, including but not limited to, the extension of credit to
a mortgagor without regard for the mortgagor’s ability to
repay the Mortgage Loan and the extension of credit to a mortgagor
which has no apparent benefit to the mortgagor, were employed in
connection with the origination of the Mortgage Loan. Each Mortgage
Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of the FNMA Guides;
(xlvii)
The debt-to-income ratio of the related
Mortgagor was not greater than 60% at the origination of the
related Mortgage Loan;
(xlviii)
No Mortgagor was required to purchase any
credit life, disability, accident or health insurance product as a
condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid single premium credit life, disability, accident
or health insurance policy in connection with the origination of
the Mortgage Loan. No proceeds from any Mortgage Loan were used to
purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage
Loan;
(xlix)
The Mortgage Loans were not selected from
the outstanding one to four-family mortgage loans in the
Seller’s portfolio at the related Closing Date as to which
the representations and warranties set forth in this Agreement
could be made in a manner so as to affect adversely the interests
of the Purchaser;
(l)
The Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written
consent of the mortgagee thereunder;
(li)
The Mortgage Loan complies with all
applicable consumer credit statutes and regulations, including,
without limitation, the respective Uniform Consumer Credit Code
laws in effect in Colorado, Idaho, Indiana, Iowa, Kansas, Maine,
Oklahoma, South Carolina, Utah and Wyoming, has been originated by
a properly licensed entity, and in all other respects, complies
with all of the material requirements of any such applicable
laws;
(lii)
The information set forth in the
Prepayment Charge Schedule is complete, true and correct in all
material respects and each Prepayment Charge is permissible,
enforceable and collectable under applicable federal and state
law;
(liii)
The Mortgage Loan was not prepaid in full
prior to the Closing Date and the Seller has not received
notification from a Mortgagor that a prepayment in full shall be
made after the Closing Date;
(liv)
No Mortgage Loan is secured by
cooperative housing, commercial property or mixed use
property;
(lv)
Each Mortgage Loan is eligible for sale
in the secondary market or for inclusion in a Pass-Through
Transfer;
(lvi)
Except as set forth on the related
Mortgage Loan Schedule, none of the Mortgage Loans are subject to a
prepayment penalty. For any Mortgage Loan originated prior to
October 1, 2002 that is subject to a prepayment penalty, such
prepayment penalty does not extend beyond five years after the date
of origination. For any Mortgage Loan originated on or following
October 1, 2002 that is subject to a prepayment penalty, such
prepayment penalty does not extend beyond three years after the
date of origination. With respect to any Mortgage Loan that
contains a provision permitting imposition of a premium upon a
prepayment prior to maturity: (i) prior to the Mortgage
Loan’s origination, the Mortgagor agreed to such premium in
exchange for a monetary benefit, including but not limited to a
rate or fee reduction, (ii) prior to the Mortgage Loan’s
origination, the Mortgagor was offered the option of obtaining a
Mortgage Loan that did not require payment of such a premium, (iii)
the prepayment premium is disclosed to the Mortgagor in the loan
documents pursuant to applicable state and federal law, and (iv)
notwithstanding any state or federal law to the contrary, the
Seller shall not impose such prepayment premium in any instance
when the mortgage debt is accelerated as the result of the
Mortgagor’s default in making the loan payments;
(lvii)
The Seller has complied with all
applicable anti-money laundering laws and regulations, including
without limitation the USA Patriot Act of 2001 (collectively, the
“ Anti-Money Laundering Laws ”); the Seller has
established an anti-money laundering compliance program as required
by the Anti-Money Laundering Laws, has conducted the requisite due
diligence in connection with the origination of each Mortgage Loan
for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the
origin of the assets used by the said Mortgagor to purchase the
property in question, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of
the Anti-Money Laundering Laws. No Mortgage 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 Mortgagor 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;
(lviii)
The methodology used in underwriting the
extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the Mortgagor’s income,
assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the
Mortgagor’s equity in the collateral as the principal
determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the Mortgagor had a reasonable ability to
make timely payments on the Mortgage Loan;
(lix)
With respect to each Mortgage Loan, the
Seller has fully and accurately furnished complete information on
the related borrower credit files to Equifax, Experian and Trans
Union Credit Information Company, in accordance with the Fair
Credit Reporting Act and its implementing regulations, on a monthly
basis and the Seller for each Loan will furnish, in accordance with
the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information on its borrower credit files to
Equifax, Experian, and Trans Union Credit Information Company, on a
monthly basis;
(lx)
All points and fees related to each
Mortgage Loan were disclosed in writing to the related Borrower in
accordance with applicable state and federal law and regulation.
Except in the case of a Mortgage Loan in an original principal
amount of less than $60,000 which would have resulted in an
unprofitable origination, no related Borrower was charged
“points and fees” (whether or not financed) in an
amount greater than 5% of the principal amount of such loan, such
5% limitation is calculated in accordance with Fannie Mae’s
anti-predatory lending requirements as set forth in the Fannie Mae
Selling Guide. All 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 such Mortgage
Loan were disclosed in writing to the related Mortgagor in
accordance with applicable state and federal laws and
regulations;
(lxi)
The Seller will transmit full-file credit
reporting data for each Mortgage Loan pursuant to Fannie Mae Guide
Announcement 95-19 and for each Mortgage 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;
(lxii)
Each Mortgage Loan constitutes a
“qualified mortgage” under Section 860G(a)(3)(A) of the
Code and Treasury Regulation Section 1.860G-2(a)(1);
(lxiii)
No Mortgage Loan is secured by real
property or secured by a manufactured home located in the state of
Georgia unless (x) such Mortgage Loan was originated prior to
October 1, 2002 or after March 6, 2003, or (y) the property
securing the Mortgage Loan is not, nor will be, occupied by the
Mortgagor as the Mortgagor’s principal dwelling. No Mortgage
Loan is a “High Cost Home Loan” as defined in the
Georgia Fair Lending Act, as amended (the “ Georgia
Act ”). Each Mortgage Loan that is a “Home
Loan” under the Georgia Act complies with all applicable
provisions of the Georgia Act. No Mortgage 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;
(lxiv)
No Mortgage Loan is a
“High-Cost” loan as defined under the New York Banking
Law Section 6-1, effective as of April 1, 2003;
(lxv)
No Mortgage Loan (a) is secured by
property located in the State of New York; (b) had an unpaid
principal balance at origination of $300,000 or less, and (c) has
an application date on or after April 1, 2003, the terms of which
Mortgage Loan equal or exceed either the APR or the points and fees
threshold for “high-cost home loans”, as defined in
Section 6-1 of the New York State Banking Law;
(lxvi)
No Mortgage Loan is a “High Cost
Home Loan” as defined in the Arkansas Home Loan Protection
Act effective July 16, 2003 (Act 1340 or 2003);
(lxvii)
No Mortgage Loan is a “High Cost
Home Loan” as defined in the Kentucky high-cost loan statute
effective June 24, 2003 (Ky. Rev. Stat. Section
360.100);
(lxviii)
No Mortgage Loan secured by property
located in the State of Nevada is a “home loan” as
defined in the Nevada Assembly Bill No. 284;
(lxix)
No Mortgage Loan is a “manufactured
housing loan” or “home improvement home loan”
pursuant to the New Jersey Home Ownership Act. No Mortgage Loan is
a “High-Cost Home Loan” or a refinanced “Covered
Home Loan,” in each case, as defined in the New Jersey Home
Ownership Act effective November 27, 2003 (N.J.S.A. 46;10B-22 et
seq.);
(lxx)
No Mortgage Loan is a subsection 10
mortgage under the Oklahoma Home Ownership and Equity protection
Act;
(lxxi)
No Mortgage Loan is a “High-Cost
Home Loan” as defined in the New Mexico Home Loan Protection
Act effective January 1, 2004 (N.M. Stat. Ann. §§
58-21A-1 et seq.);
(lxxii)
No Mortgage Loan is a “High-Risk
Home Loan” as defined in the Illinois High-Risk Home Loan Act
effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et
seq.);
(lxxiii)
No Mortgage Loan originated in the City
of Los Angeles is subject to the City of Los Angeles California
Ordinance 175008 as a “home loan”;
(lxxiv)
No Mortgage Loan originated in the City
of Oakland is subject to the City of Oakland, California Ordinance
12361 as a “home loan”;
(lxxvii)
No Loan that is secured by property
located within the State of Maine meets the definition of a (i)
“high-rate, high-fee” mortgage loan under Article VIII,
Title 9-A of the Maine Consumer Credit Code or (ii)
“High-Cost Home Loan” as defined under the Maine House
Bill 383 L.D. 494, effective as of September 13, 2003;
(lxxviii)
With respect to any Loan for which a
mortgage loan application was submitted by the Mortgagor after
April 1, 2004, no such Loan secured by Mortgaged Property in the
State of Illinois which has a Loan Interest Rate in excess of 8.0%
per annum has lender-imposed fees (or other charges) in excess of
3.0% of the original principal balance of the Loan;
(lxxix)
The Mortgagor 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
Mortgagor;
(lxxv)
With respect to each MOM Loan, a MIN has
been assigned by MERS and such MIN is accurately provided on the
Mortgage Loan Schedule. The related Assignment of Mortgage to MFRS
has been duly and properly recorded, or has been delivered for
recording to the applicable recording office;
(lxxvi)
With respect to each MOM Loan, Seller has
not received any notice of liens or legal actions with respect to
such Mortgage Loan and no such notices have been electronically
posted by MERS; and
(lxxvii)
No Mortgagor agreed to submit to
arbitration to resolve any dispute arising out of or relating in
any way to the Mortgage Loan transaction.
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 Mortgage Loans to the Purchaser
and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or lack of examination of
any Mortgage 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
Mortgage Loans or the interest of the Purchaser (or which
materially and adversely affects the interests of the Purchaser in
the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the
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 Mortgage Loan or the Mortgage 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 Mortgage
Loan at the Repurchase Price. 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, all of
the Mortgage Loans shall, at the Purchaser’s option, be
repurchased by the Seller at the Repurchase Price. The Seller
shall, at the request of the Purchaser and assuming that Seller has
a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage 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 Mortgage Loan, it shall repurchase the
deficient Mortgage Loan. Any repurchase of a Mortgage 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 (i) during the Interim Servicing Period by deposit in
the Custodial Account of the amount of the Repurchase Price for
distribution to the Purchaser on the next scheduled Distribution
Date and (ii) following the Interim Servicing Period, by wire
transfer of immediately available funds on the repurchase date to
an account designated by the Purchaser.
At the time of repurchase of any
deficient Mortgage Loan, the Purchaser and the Seller shall arrange
for the reassignment of the repurchased Mortgage Loan to the Seller
and the delivery to the Seller of any documents held by the
Custodian relating to the repurchased Mortgage 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 Mortgage Loan Schedule shall be amended to
reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement.
As to any Deleted Mortgage Loan for which
the Seller substitutes a Qualified Substitute Mortgage Loan or
Loans, the Seller shall effect such substitution by delivering to
the Purchaser for such Qualified Substitute Mortgage Loan or Loans
the Mortgage Note, the Mortgage, the Assignment of Mortgage and
such other documents and agreements as are required by the
Custodial Agreement, with the Mortgage 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 Mortgage Loan or Loans in the month following the date
of such substitution. Monthly Payments due with respect to
Qualified Substitute Mortgage 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 Mortgage 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
Mortgage Loan. The Seller shall give written notice to the
Purchaser that such substitution has taken place and shall amend
the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution
of the Qualified Substitute Mortgage Loan. Upon such substitution,
such Qualified Substitute Mortgage 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 Mortgage Loan or Loans, as of the date of substitution,
the covenants, representations and warranties set forth in
Subsections 7.01 and 7.02.
For any month in which the Seller
substitutes one or more Qualified Substitute Mortgage Loans for one
or more Deleted Mortgage Loans, the Seller will determine the
amount (if any) by which the aggregate principal balance of all
such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of
all such Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). An
amount
