|
Exhibit 99.9
================================================================================
MASTER MORTGAGE LOAN PURCHASE AND INTERIM SERVICING
AGREEMENT
HOMEBANC MORTGAGE CORPORATION
Seller and Servicer
CITIGROUP GLOBAL MARKETS REALTY CORP.
Initial Purchaser
Dated as of December 1, 2006
Fixed and Adjustable Rate
First and Second Lien Mortgage Loans
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1.
Definitions..............................................1
SECTION 2. Agreement to
Purchase...................................15
SECTION 3. Mortgage Loan
Schedules.................................15
SECTION 4. Purchase
Price..........................................15
SECTION 5. Examination of Mortgage
Files...........................15
SECTION 6. Conveyance from Seller to Initial
Purchaser.............16
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing
Files.................................................16
Subsection 6.02 Books and
Records.......................................16
Subsection 6.03 Delivery of Mortgage Loan
Documents.....................17
SECTION 7. Representations, Warranties and Covenants of the
Seller;
Remedies for Breach...................................17
Subsection 7.01 Representations and Warranties Respecting the
Seller....18
Subsection 7.02 Representations and Warranties Regarding
Individual
Mortgage Loans........................................20
Subsection 7.03 Remedies for Breach of Representations and
Warranties...35
Subsection 7.04 Prepayment-in-Full Premium
Recapture....................37
Subsection 7.05 Early Payment
Default...................................38
SECTION 8.
Closing.................................................38
SECTION 9. Closing
Documents.......................................38
SECTION 10.
Costs...................................................39
SECTION 11. Seller's Servicing
Obligations..........................40
SECTION 12. Removal of Mortgage Loans from Inclusion under
This
Agreement Upon a Whole Loan Transfer or a
Securitization Transaction on One or More
Reconstitution Dates..................................40
SECTION 13. COMPLIANCE WITH REGULATION
AB...........................42
Subsection 13.01 Intent of the Parties;
Reasonableness...................42
Subsection 13.02 Additional Representations and Warranties of
the
Seller................................................43
Subsection 13.03 Information to Be Provided by the
Seller................44
Subsection 13.04 Servicer Compliance
Statement...........................49
Subsection 13.05 Report on Assessment of Compliance and
Attestation......49
Subsection 13.06 Use of Subservicers and
Subcontractors..................50
Subsection 13.07 Indemnification;
Remedies...............................51
i
<PAGE>
SECTION 14. The
Seller..............................................54
Subsection 14.01 Additional Indemnification by the
Seller................54
Subsection 14.02 Merger or Consolidation of the
Seller...................54
Subsection 14.03 Limitation on Liability of the Seller and
Others........54
Subsection 14.04 Seller Not to
Resign....................................55
Subsection 14.05 No Transfer of
Servicing................................55
SECTION 15.
DEFAULT.................................................55
Subsection 15.01 Events of
Default.......................................55
Subsection 15.02 Waiver of
Defaults......................................57
SECTION 16.
Termination.............................................57
SECTION 17. Successor to the
Seller.................................57
SECTION 18. Financial
Statements....................................58
SECTION 19. Mandatory Delivery: Grant of Security
Interest..........58
SECTION 20.
Notices.................................................59
SECTION 21. Severability
Clause.....................................60
SECTION 22.
Counterparts............................................60
SECTION 23. Governing
Law...........................................60
SECTION 24. Intention of the
Parties................................61
SECTION 25. Successors and
Assigns..................................61
SECTION 26.
Waivers.................................................62
SECTION 27.
Exhibits................................................62
SECTION 28. General Interpretive
Principles.........................62
SECTION 29.
Nonsolicitation.........................................62
SECTION 30. Reproduction of
Documents...............................62
SECTION 31. Further
Agreements......................................63
SECTION 32. Entire
Agreement........................................63
SECTION 33. Third Party
Beneficiary.................................63
-ii-
<PAGE>
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 ACCOUNT LETTER AGREEMENT
EXHIBIT 7 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 8 SERVICING ADDENDUM
SCHEDULE A - SURVEILLANCE DATA
EXHIBIT 9 FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT 10 FORM OF INDEMNIFICATION AGREEMENT
EXHIBIT 11 FORM OF ANNUAL CERTIFICATION
EXHIBIT 12 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF
COMPLIANCE
-iii-
<PAGE>
MASTER MORTGAGE LOAN PURCHASE AND INTERIM SERVICING
AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND INTERIM SERVICING
AGREEMENT
(the "Agreement"), dated as of December 1, 2006, by and between
Citigroup Global
Markets Realty Corp., having an office at 390 Greenwich Street,
6th Floor, New
York, New York 10013 (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
HomeBanc Mortgage
Corporation, having an office at 2002 Summit Boulevard, Suite
100, Atlanta,
Georgia 30319 (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
and second lien
mortgage loans, including the right to any Prepayment Charges
payable by the
related Mortgagors as described herein, and the servicing rights
appurtenant
thereto, as described herein (the "Mortgage Loans"), on a
servicing- released
basis, and which shall be delivered in groups of whole loans on
various dates as
provided in the related Confirmation (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of
trust or
other security instrument creating a first or second 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 to the
related
Assignment and Conveyance on each Closing Date as Schedule
One;
WHEREAS, the Purchaser and the Seller wish to prescribe the
manner of the
conveyance, 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.
<PAGE>
Agreement: This Master Mortgage Loan Purchase and Interim
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 Fannie Mae and Freddie Mac
and the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 or as
determined by
use of an automated valuation model, 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 Fannie Mae and Freddie Mac 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
MOM 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.
Balloon Mortgage Loan: A Mortgage Loan that provided on the date
of
origination for an amortization schedule extending beyond its
maturity date.
Balloon Payment: With respect to any Balloon Mortgage Loan as of
any date
of determination, the Monthly Payment payable on the maturity of
such Mortgage
Loan.
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
Georgia or the State
of New York are authorized or obligated by law or executive
order to be closed.
Buydown Agreement: An agreement between the Seller and a
Mortgagor, or an
agreement among the Seller, a Mortgagor and a seller of a
Mortgaged Property or
a third party with respect to a Mortgage Loan which provides for
the application
of Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, any
amount
contributed by the seller of a Mortgaged Property subject to a
Buydown Mortgage
Loan, the buyer of such property, the Seller or any other
source, plus interest
earned thereon, in order to enable the Mortgagor to reduce the
payments required
to be made from the Mortgagor's funds in the early years of a
Mortgage Loan.
Buydown Mortgage Loan: Any Mortgage Loan in respect of which,
pursuant to a
Buydown Agreement, (i) the Mortgagor pays less than the full
monthly payments
specified in the Mortgage Note for a specified period and (ii)
the difference
between the payments required under such Buydown Agreement and
the Mortgage Note
is provided from Buydown Funds.
-2-
<PAGE>
Buydown Period: The period of time when a Buydown Agreement is
in effect
with respect to a related Buydown Mortgage Loan.
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of
which were
in excess of the principal balance of any existing first and
second mortgage on
the related Mortgaged Property and related closing costs by more
than the lesser
of two percent (2%) of the loan amount or $2,000, and were used
to pay any such
existing first and second 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.
Combined Loan-to-Value Ratio or CLTV: With respect to any Second
Lien
Mortgage Loan, the fraction, expressed as a percentage, the
numerator of which
is the sum of (a) the original principal balance of the Mortgage
Loan, plus (b)
the unpaid principal balance of any related senior mortgage loan
or loans
secured by the Mortgaged Property, and the denominator of which
is the Appraised
Value of the related Mortgaged Property.
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 Mortgage Loan Package
purchased and sold
on any Closing Date, the purchase price and terms 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.
Credit Score: The credit score of the Mortgagor provided by
Fair, Isaac &
Company, Inc. or such other organization providing credit scores
at the time of
the origination of a Mortgage Loan. If two credit scores are
obtained, the
Credit Score shall be the lower of the two credit scores. If
three credit scores
are obtained, the Credit Score shall be the middle of the three
credit scores.
-3-
<PAGE>
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 "HomeBanc Mortgage Corporation, 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. Each
Custodial Account shall be an Eligible Account.
Cut-off Date: The first day of the month in which the related
Closing Date
occurs, or as otherwise set forth in the related
Confirmation.
Data File: The data file provided by the Seller to the Purchaser
in
connection with the Mortgage Loans to be purchased on the
related Closing Date.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a
Qualified Substitute Mortgage 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
following 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 Mortgage Loan, the day of the
calendar month
on which each Monthly Payment is due on such Mortgage Loan
(including the
Balloon Payment with respect to a Balloon 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 that (a) is
incorporated under the laws of the United States of America or
any state
thereof, (b) is subject to supervision and examination by
federal or state
banking authorities and (c) has or is a subsidiary of a holding
company that has
an outstanding unsecured commercial paper or other short-term
unsecured debt
obligations that 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 or
(iii) a trust account or accounts maintained with the corporate
trust department
of a federal or state chartered depository institution or trust
company acting
in its fiduciary capacity. Eligible Accounts may bear
interest.
Escrow Account: The separate trust account or accounts created
and
maintained pursuant to this Agreement which shall be entitled
"HomeBanc Mortgage
Corporation, as servicer, in trust for the Purchaser and various
Mortgagors,
-4-
<PAGE>
Fixed and Adjustable Rate Mortgage Loans", established at a
financial
institution acceptable to the Purchaser. Each Escrow Account
shall be an
Eligible Account.
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 Section
15.01.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Fannie Mae: Fannie Mae or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, 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
repurchased by
the Seller pursuant to this Agreement), a determination made by
the Seller that
all Condemnation Proceeds, 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.
First Lien: With respect to each Mortgaged Property, the lien of
the
mortgage, deed of trust or other instrument securing a Mortgage
Note which
creates a first lien on the Mortgaged Property.
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.
Freddie Mac: Freddie Mac 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.
-5-
<PAGE>
Initial Closing Date: The Closing Date on which the Initial
Purchaser
purchases and the Seller sells the first Mortgage Loan Package
hereunder.
Initial Purchaser: Citigroup Global Markets Realty Corp., 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, the
period
commencing on the related Closing Date and ending on the
thirtieth day after
such Closing Date (or if such day is not a Business Day, the
first Business Day
immediately following such day). The Interim Servicing Period
shall continue for
additional thirty (30) day periods following the expiration of
the prior thirty
(30) day period, unless the Purchaser notifies the Seller prior
to the
expiration of an Interim Servicing Period that the Seller shall
be terminated as
interim servicer at the expiration of the Interim Servicing
Period.
Lender Paid Mortgage Insurance Policy or LPMI Policy: A policy
of mortgage
guaranty insurance issued by a Qualified Insurer in which the
owner or servicer
of the Mortgage Loan is responsible for the premiums associated
with such
mortgage insurance policy.
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 and prior
to an REO Disposition.
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.
Master Servicer: The Master Servicer with respect to any
Securitization
Transaction.
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.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically
maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
-6-
<PAGE>
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 as to which MERS is acting 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 Advance: Any advance of scheduled principal and interest
on a
Mortgage Loan made by a subsequent servicer or the
Purchaser.
Monthly Payment: With respect to any Mortgage Loan, the
scheduled combined
payment of principal and interest (including any Balloon
Payment) 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
or second lien on Mortgaged Property securing the Mortgage
Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage
and the
successors and assigns of such mortgagee or beneficiary.
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 or second lien residential Mortgage
Loan, as set
forth in the related Confirmation, 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 the
related Closing
Date, which Mortgage Loan includes without limitation the
Mortgage File, the
Monthly Payments, Principal Prepayments, 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 described as the
"Mortgage Loan
Documents" in Exhibit 5 annexed hereto pertaining to any
Mortgage Loan.
Mortgage Loan Package: The Mortgage Loans listed on a Mortgage
Loan
Schedule, delivered to the Purchaser or its designee at least
five (5) Business
-7-
<PAGE>
Days prior to the related Closing Date and attached to the
Assignment and
Conveyance as Schedule One on the related Closing Date.
Mortgage Loan Schedule: With respect to each Mortgage Loan
Package, the
schedule of Mortgage Loans to be annexed to an Assignment and
Conveyance as
Schedule One on each Closing Date for the Mortgage Loan Package
delivered on
such Closing Date in both hard copy and electronic form, 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, county, city and zip code; (4) the
Cut-off Date;
(5) the type of Residential Dwelling constituting the Mortgaged
Property; (6)
the number of units in the related Mortgaged Property; (7) a
code indicating if
the Mortgage Loan is secured by a leasehold estate; (8) a code
indicating
whether the Mortgage Loan is a Buydown Mortgage Loan; (9) the
Mortgagor's income
at origination; (10) a code indicating whether the related
Mortgagor is
self-employed; (11) a code indicating whether the Mortgaged
Property is owner
occupied; (12) a code indicating the Credit Score of the
Mortgagor and the date
such Credit Score was obtained; (13) the Mortgagor's debt to
income ratio; (14)
the Mortgage Loan's payment history; (15) a code indicating
whether the Mortgage
Loan is prime/Alt-A or subprime; (16) the Mortgage Interest Rate
at origination;
(17) the current Mortgage Interest Rate; (18) a code indicating
any step-up in
the Servicing Fee; (19) the seasoning (age); (20) the original
months to
maturity; (21) the original date of the Mortgage Loan and the
remaining months
to maturity from the Cut-off Date, based on the original
amortization schedule;
(22) the Mortgage Interest Rate in effect immediately following
the related
Cut-off Date; (23) the product type (e.g., 2/28, 15 year fixed,
30 year fixed,
15/30, etc.); (24) a code indicating whether the Mortgaged
Property is subject
to a First Lien or a Second Lien; (25) a code indicating whether
the Second Lien
Mortgage Loan is a simultaneous second and the amount of the
Second Lien; (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) the interest paid-through date; (28) the stated
maturity date; (29)
the amount of the Monthly Payment at origination; (30) the
amount of the Monthly
Payment as of the Cut-off Date; (31) the last Due Date on which
a Monthly
Payment was actually applied to the unpaid Stated Principal
Balance; (32) the
Appraised Value of the Mortgaged Property and whether the
Appraised Value was
obtained using an automated valuation model; (33) a code
indicating the form of
appraisal (i.e. form 1004, 2055, etc.); (34) the sale price of
the Mortgaged
Property, if applicable; (35) the Loan to Value Ratio at
origination and the
Combined Loan-to-Value Ratio at origination; (36) reserved; (37)
the original
principal amount of the Mortgage Loan; (38) the Stated Principal
Balance of the
Mortgage Loan as of the close of business on the Cut-off Date;
(39) amortization
type (ie: fully amortizing, interest-only); (40) the amortized
original term to
maturity as of the Cut-off Date; (41) the Mortgage Interest Rate
at origination;
(42) a code indicating if the Mortgage Loan is an interest-only
Mortgage Loan
and, if so, the term of the interest-only period of such
Mortgage Loan; (43) a
code indicating whether the Mortgage Loan is a Balloon Mortgage
Loan and, if so,
the term of the Balloon Mortgage Loan and the amount of the
Balloon Payment
scheduled to be due at maturity assuming no Principal
Prepayments; (44) a code
indicating whether the Mortgage Loan is an Adjustable Rate
Mortgage Loan or a
Fixed Rate Mortgage Loan; (45) with respect to each Adjustable
Rate Mortgage
Loan, the first Adjustment Date; (46) with respect to each
Adjustable Rate
Mortgage Loan, the next Adjustment Date; (47) with respect to
each Adjustable
Rate Mortgage Loan, the Gross Margin; (48) with respect to each
Adjustable Rate
-8-
<PAGE>
Mortgage Loan, the Maximum Mortgage Interest Rate under the
terms of the
Mortgage Note; (49) with respect to each Adjustable Rate
Mortgage Loan, the
Minimum Mortgage Interest Rate under the terms of the Mortgage
Note; (50) with
respect to each Adjustable Rate Mortgage Loan, the Initial Rate
Cap; (51) with
respect to each Adjustable Rate Mortgage Loan, the Periodic Rate
Cap; (52) with
respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date
immediately following the Cut-off Date; (53) with respect to
each Adjustable
Rate Mortgage Loan, the Index; (54) with respect to each
Adjustable Rate
Mortgage Loan, a code indicating the frequency of adjustment of
the related
Mortgage Interest Rate; (55) a code indicating the purpose of
the loan (i.e.,
purchase financing, Rate/Term Refinancing, Cash Out
Refinancing); (56) a code
indicating the documentation style (i.e., full, alternative or
reduced); (57) a
code indicating if the Mortgage Loan is subject to a Primary
Insurance Policy or
LPMI Policy; and if so, the provider of such insurance, the
coverage percentage
of such insurance and the fee payable to the provider in respect
of such
insurance; (58) a code indicating whether the Mortgage Loan is
subject to a
Prepayment Charge, the term of such Prepayment Charge and a
description
(including the amount) of such Prepayment Charge; (59) a code
indicating whether
the Mortgage Loan is a MERS Mortgage Loan and, if so, the
corresponding MIN;
(60) the amount of any fees payable by the Mortgagor in
connection with the
origination of such Mortgage Loan; and (61) a code indicating
whether there is
flood insurance on the Mortgaged Property. 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.
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 or
leasehold estate
in a single parcel of real property improved by a Residential
Dwelling.
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 successors in title to the Mortgaged
Property.
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
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.
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
-9-
<PAGE>
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 payable in connection with a Principal
Prepayment on such
Mortgage Loan pursuant to the terms of the related Mortgage
Note.
Prepayment Period: The calendar month preceding the month in
which the
related Distribution Date occurs.
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 or penalty thereon, 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 provided in Section
4.
Qualified Correspondent: Any Person from which the Seller
purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between
the Seller and
such Person that contemplated that such Person would underwrite
mortgage loans
from time to time, for sale to the Seller, in accordance with
underwriting
guidelines designated by the Seller ("Designated Guidelines") or
guidelines that
do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans
were in fact underwritten as described in clause (i) above and
were acquired by
the Seller within 180 days after origination; (iii) either (x)
the Designated
Guidelines were, at the time such Mortgage Loans were
originated, used by the
Seller in origination of mortgage loans of the same type as the
Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines
were, at the time
such Mortgage Loans were underwritten, designated by the Seller
on a consistent
basis for use by lenders in originating mortgage loans to be
purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage
Loans were
acquired by the Seller, pre-purchase or post-purchase quality
assurance
procedures (which may involve, among other things, review of a
sample of
mortgage loans purchased during a particular time period or
through particular
channels) designed to ensure that Persons from which it
purchased mortgage loans
properly applied the underwriting criteria designated by the
Seller.
Qualified Insurer: An insurance company duly qualified as such
under the
laws of the states in which the Mortgaged Property is located,
duly authorized
and licensed in such states to transact the applicable insurance
business and to
write the insurance provided, and approved as an insurer by
Fannie Mae and
Freddie Mac and whose claims paying ability is rated in the two
highest rating
-10-
<PAGE>
categories by any of the rating agencies with respect to primary
mortgage
insurance and in the two highest rating categories by Best's
with respect to
hazard and flood insurance.
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 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) be
covered under a Primary Insurance Policy if such Qualified
Substitute Mortgage
Loan has a Loan-to-Value Ratio in excess of 80% and the Deleted
Mortgage Loan
was covered under a Primary Insurance Policy, (vii) conform to
each
representation and warranty set forth in Subsection 7.02 of this
Agreement and
(viii) be the same type of mortgage loan (i.e. first or second,
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 (vii) hereof
must be
satisfied as to each Qualified Substitute Mortgage Loan or in
the aggregate, as
the case may be. In addition, the substitution of more than one
Mortgage Loan
pursuant to the previous sentence shall be subject to the
Purchaser's approval
in its sole discretion..
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds
of which
are not in excess of the existing first and second mortgage loan
on the related
Mortgaged Property and related closing costs and proceeds to the
Mortgagor not
to exceed the lesser of two percent (2%) of the loan amount or
$2,000, and were
used to satisfy the then existing first and second mortgage loan
of the
Mortgagor on the related Mortgaged Property and to pay related
closing costs.
Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
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 Securitization
Transaction as
provided in Section 12.
-11-
<PAGE>
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 Securitization
Transaction
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.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and
subject to such clarification and interpretation as have been
provided by the
Commission in the adopting release (Asset-Backed Securities,
Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff
of the Commission, or as may be provided by the Commission or
its staff from
time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to
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 Account: The separate trust account or accounts created and
maintained
pursuant to this Agreement which shall be entitled "HomeBanc
Mortgage
Corporation in trust for the Purchaser, as of [date of
acquisition of title],
Fixed and Adjustable Rate Mortgage Loans". The REO Account may
be a sub account
of the Custodial Account.
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 (a)
the greater of (x) the Purchase Price percentage used to
calculate the Purchase
Price as stated in the related Confirmation and (y) 100%, times
the Stated
Principal Balance of the Mortgage Loan so repurchased plus (b)
accrued interest
thereon at the Mortgage Interest Rate from the interest paid to
date, 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
(c) any unreimbursed Servicing Advances and Monthly Advances and
any unpaid
Servicing Fees allocable to such Mortgage Loan paid by or owed
to any party
other than the Seller, plus (d) 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.
-12-
<PAGE>
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 an eligible condominium project, or (iv) a
detached one-family
dwelling in a planned unit development, none of which is
manufactured housing, a
co-operative, a commercial property, an agricultural property, a
mixed use
property or a mobile home.
S&P: Standard & Poor's, a division of the McGraw-Hill
Companies, Inc. or
its successor in interest.
Second Lien: With respect to each Mortgaged Property, the lien
of the
mortgage, deed of trust or other instrument securing a Mortgage
Note which
creates a second lien on the Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1)
a sale or
other transfer of some or all of the Mortgage Loans directly or
indirectly to an
issuing entity in connection with an issuance of publicly
offered or privately
placed, rated or unrated mortgage-backed securities or (2) an
issuance of
publicly offered or privately placed, rated or unrated
securities, the payments
on which are determined primarily by reference to one or more
portfolios of
residential mortgage loans consisting, in whole or in part, of
some or all of
the Mortgage Loans.
Seller/Servicer Information: As defined in Subsection
13.07(a).
Servicer: As defined in Subsection 13.03(c).
Servicing Addendum: The terms and conditions attached hereto as
Exhibit 8
which will govern the interim servicing of the Mortgage Loans by
the 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 Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: The Servicing Fee shall be an amount equal to the
dollar
amount per Mortgage Loan set forth in the related Confirmation.
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.
Servicing File: With respect to each Mortgage Loan, the file
retained by
the Seller which may be in electronic media so long as original
documents are
not required for purposes of realization of Liquidation
Proceeds, Condemnation
Proceeds or Insurance Proceeds, consisting of all documents in
the Mortgage File
-13-
<PAGE>
which are not delivered to the Purchaser or its designee and
copies of the
Mortgage Loan Documents.
Servicing Transfer Date: The date or dates set forth in the
related
Confirmation upon which the actual transfer of servicing
responsibilities for
any Mortgage Loan being herein is transferred from the Seller to
the Purchaser
or its designee.
Stated Principal Balance: With respect 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, minus (ii) all amounts previously distributed to the
Purchaser with
respect to the related Mortgage Loan representing payments or
recoveries of
principal.
Static Pool Information: Static pool information as described in
Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subprime Underwriting Guidelines: The Underwriting Guidelines
used by the
Seller in connection the origination of subprime Mortgage
Loans.
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
Mortgage Loans but
performs one or more discrete functions identified in Item
1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or
authority of the Seller
or a Subservicer.
Subservicer: Any Person that services Mortgage 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
Mortgage Loans
as provided in Section 11.31 of Exhibit 8.
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.
Third-Party Originator: Each Person, other than a Qualified
Correspondent,
that originated Mortgage Loans acquired by the Seller.
Underwriting Guidelines: The Seller's written underwriting
guidelines in
the form delivered to the Purchaser, in effect with respect to
the Mortgage
Loans purchased by the Initial Purchaser on the Initial Closing
Date, as
amended, supplemented or modified from time to time thereafter
with prior
written notice to the Initial Purchaser.
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
Securitization Transaction.
-14-
<PAGE>
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and
the
Purchaser agrees to purchase, from time-to-time, Mortgage Loans
on a servicing
released basis, as set forth in the related Confirmation, 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 or within such other time frame as agreed
to between the
Seller and the Purchaser and set forth in the related Commitment
Letter.
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
related 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 (a) deliver to the
Purchaser or its
designee 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 upon providing reasonable
notice and at
Purchaser's expense. 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 Seller's Underwriting Guidelines,
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
-15-
<PAGE>
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.
The Initial Purchaser shall have the opportunity to conduct a
corporate due
diligence of the Seller, including but not limited to, on site
review of the
Seller's facilities and discussions with the Seller's
management. The Initial
Purchaser may conduct such review prior to or following the
Initial Closing
Date. In addition, the Initial Purchaser may perform additional
reviews as the
Initial Purchaser, in its sole discretion, deems necessary. All
such reviews
shall be at the sole expense of the Initial Purchaser.
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 Subsections 7.03 or 7.05.
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 or one or
more designees of the Purchaser, as the Purchaser shall
designate. Record title
to each Mortgage and the related Mortgage Note shall be
transferred by Seller to
Purchaser. Seller shall, at the option of Purchaser, either (i)
prepare and
cause to be recorded the Assignment of Mortgage for each
Mortgage Loan and
shall, promptly upon its receipt of each original recorded
Assignment of
Mortgage from the applicable recording office, deliver the same
to Purchaser, or
(ii) prepare and deliver to Purchaser an original Assignment of
Mortgage from
Seller to Purchaser or in blank. Seller shall bear the cost and
expense related
to (i) providing all Assignments of Mortgages and endorsements
of Mortgage Notes
for any transfer of record title required hereunder with respect
to the
obligations of the Mortgage Notes and the underlying security
interest related
to each Mortgage Loan and (ii) recording fees and fees for title
policy
endorsements.
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
-16-
<PAGE>
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.
The Seller shall, at least five (5) Business Days prior to the
related
Closing Date, deliver and release to the Purchaser or its
designee the Mortgage
Loan Documents with respect to each Mortgage Loan to be
purchased and sold on
such Closing Date and set forth on the related Mortgage Loan
Schedule delivered
with such Mortgage Loan Documents.
The Seller shall forward to the Purchaser or its designee
original
documents evidencing an assumption, modification, consolidation
or extension of
any Mortgage Loan entered into in accordance with this Agreement
within two
weeks of their execution, provided, however, that the Seller
shall provide the
Purchaser or its designee 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 ninety days of its
submission for
recordation. If in connection with any assumption, modification,
consolidation
or extension of any Mortgage Loan, the applicable Seller has not
delivered or
caused to be delivered any original document evidencing an
assumption,
modification, consolidation or extension with evidence of
recording thereon
because of a delay caused by the public recording office where
such document has
been delivered for recordation or because such document has been
lost or because
such public recording office retains the original recorded
document, the Seller
shall deliver or cause to be delivered to the Purchaser, (i) in
the case of a
delay caused by the public recording office, a copy of such
document certified
by the applicable Seller, escrow agent, title insurer or closing
attorney to be
a true and complete copy of the original recorded document and
(ii) in the case
where a public recording office retains the original recorded
document or in the
case where a document is lost after recordation in a public
recording office, a
copy of such document certified by such public recording office
to be a true and
complete copy of the original recorded document.
In the event that the Seller does not comply with the delivery
requirements
set forth in this Section 6.03 with respect to any Mortgage
Loan, the related
Mortgage Loan shall, upon request of the Purchaser, be
repurchased by the Seller
at the Repurchase Price in accordance with Section 7.03.
SECTION 7. Representations, Warranties and Covenants of the
Seller;
Remedies for Breach.
-17-
<PAGE>
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 state of its formation 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 is located and
is and
will remain in compliance with the laws of each state in which
any
Mortgaged Property is located to the extent necessary to ensure
the
enforceability of each Mortgage Loan and the servicing of the
Mortgage 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
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 articles of incorporation 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;
-18-
<PAGE>
(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 Loan Documents and any other documents
required to
be delivered with respect to each Mortgage Loan have been
delivered to the
Purchaser all in compliance with the specific requirements of
this
Agreement;
(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 agency 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 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 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 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;
(xiii) 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;
(xiv) The transfer of the Mortgage Loans shall be treated as a
sale on
the books and records of Seller, and 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. Seller shall maintain a
complete set
-19-
<PAGE>
of books and records for each Mortgage Loan which shall be
clearly marked
to reflect the ownership of each Mortgage Loan by Purchaser;
(xv) The consideration received by the Seller upon the sale of
the
Mortgage Loans constitutes fair consideration and reasonably
equivalent
value for such Mortgage Loans; and
(xvi) 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.
Subsection 7.02. Representations and Warranties Regarding
Individual
Mortgage Loans.
The Seller hereby represents, warrants and covenants to the
Purchaser that,
as to each Mortgage Loan, as of the related Closing Date for
such Mortgage Loan:
(i) Mortgage Loans as Described. The information set forth in
the related
Mortgage Loan Schedule and the Mortgage Loan data delivered to
the Purchaser in
the Data File is complete, true and correct. 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;
(ii) Payments Current. 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; unless a Mortgage Loan is a
Buydown Mortgage Loan,
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. Unless otherwise set forth in the
related Commitment
Letter and Mortgage Loan Schedule, 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;
(iii) No Outstanding Charges. 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;
(iv) Location and Type of Mortgaged Property. The Mortgaged
Property is
located in the state identified in the related Mortgage Loan
Schedule and is
improved by a Residential Dwelling;
(v) Original Terms Unmodified. 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 or registered with the MERS System if necessary to
maintain the lien
priority of the Mortgage, and which have been delivered to the
Purchaser; the
substance of any such waiver, alteration or modification has
been approved by
the insurer under the Primary Insurance Policy or LPMI Policy,
if any, and the
-20-
<PAGE>
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 or LPMI Policy, if
any, the title
insurer, to the extent required by the policy, and which
assumption agreement
has been delivered to the Purchaser and the terms of which are
reflected in the
related Mortgage Loan Schedule;
(vi) No Defenses. 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/or
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;
(vii) Conformance with Underwriting Guidelines and Agency
Standards. The
Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines of
the Seller in effect at the time the Mortgage Loan was
originated; and the
Mortgage Note and Mortgage are on forms acceptable to Fannie Mae
and Freddie
Mac;
(viii) Hazard Insurance. All buildings upon the Mortgaged
Property are
insured by a Qualified Insurer acceptable to Fannie Mae and
Freddie Mac against
loss by fire, hazards of extended coverage and such other
hazards as are
customary in the area where the Mortgaged Property is located,
in an amount not
less than the lesser of (i) 100% of the replacement cost of all
improvements to
the Mortgaged Property and (ii) either (A) the outstanding
principal balance of
the Mortgage Loan with respect to each first lien Mortgage Loan
or (B) with
respect to each Second Lien Mortgage Loan, the sum of the
outstanding principal
balance of the related first lien mortgage loan and the
outstanding principal
balance of the Second Lien Mortgage Loan; provided, however, in
no event shall
the amount of insurance be less than the amount necessary to
avoid the operation
of any co-insurance provisions with respect to the Mortgaged
Property. 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 Fannie Mae and Freddie Mac. The Mortgage
obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's
cost and expense,
and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage
to maintain such insurance at Mortgagor's cost and expense and
to seek
reimbursement therefor from the Mortgagor;
(ix) Compliance with Laws. Any and all requirements of any
federal, state
or local law including, without limitation, usury, truth in
lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity,
fair housing, disclosure laws and all predatory, abusive and
fair lending laws
applicable to the origination and servicing of mortgage loans of
a type similar
to the Mortgage Loans have been complied with and the
consummation of the
transactions contemplated hereby will not involve the violation
of any such
laws, and the Seller shall maintain in its possession, available
for the
-21-
<PAGE>
inspection of the Purchaser or its designee, and shall deliver
to the Purchaser
or its designee, upon two Business Days' request, evidence of
compliance with
such requirements;
(x) No Satisfaction of Mortgage. Subject to representation and
warranty
(xi) below, 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;
(xi) Valid Lien. The related Mortgage is properly recorded and
is a valid,
existing and enforceable (A) first lien and first priority
security interest
with respect to each Mortgage Loan which is indicated by the
Seller to be a
First Lien (as reflected on the Mortgage Loan Schedule), or (B)
second lien and
second priority security interest with respect to each Mortgage
Loan which is
indicated by the Seller to be a Second Lien (as reflected on the
Mortgage Loan
Schedule), in either case, 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, (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 and (d) with
respect to each Mortgage Loan which is indicated by the Seller
to be a Second
Lien Mortgage Loan (as reflected on the Mortgage Loan Schedule)
a First Lien on
the 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 (A)
first lien and
first priority security interest with respect to each Mortgage
Loan which is
indicated by the Seller to be a First Lien (as reflected on the
Mortgage Loan
Schedule) or (B) second lien and second priority security
interest with respect
to each Mortgage Loan which is indicated by the Seller to be a
Second Lien
Mortgage Loan (as reflected on the Mortgage Loan Schedule), in
either case, on
the property described therein and the Seller has full right to
sell and assign
the same to the Purchaser. The Mortgaged Property was not, as of
the date of
origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to
secure debt or other security instrument creating a lien
subordinate to the lien
of the Mortgage;
(xii) Validity of Mortgage Loan Documents. 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;
(xiii) Legal Capacity. 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;
(xiv) Full Disbursement of Proceeds. Except with respect to de
minimis
completion escrows, the proceeds of the Mortgage Loan have been
fully disbursed
-22-
<PAGE>
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;
(xv) Ownership. The Seller is the sole legal, beneficial and
equitable
owner of the Mortgage Note and the Mortgage. The Seller has full
right and
authority under all governmental and regulatory bodies having
jurisdiction over
such Seller, subject to no interest or participation of, or
agreement with, any
party, to transfer and sell the Mortgage Loan to the Purchaser
pursuant to this
Agreement free and clear of any encumbrance or right of others,
equity, lien,
pledge, charge, mortgage, claim, participation interest or
security interest of
any nature (collectively, a "Lien"); and immediately upon the
transfers and
assignments herein contemplated, the Seller shall have
transferred and sold all
of its right, title and interest in and to each Mortgage Loan
and the Purchaser
will hold good, marketable and indefeasible title to, and be the
owner of, each
Mortgage Loan subject to no Lien;
(xvi) Doing Business. All parties which have had any interest in
the
Mortgage Loan, whether as originator, mortgagee, assignee,
pledgee or otherwise,
are (or, during the period in which they held and disposed of
such interest,
were): (A) organized under the laws of such state, or (B)
qualified to do
business in such state, or (C) federal savings and loan
associations or national
banks having principal offices in such state, or (D) not doing
business in such
state so as to require qualification or licensing, or (E) not
otherwise required
to be licensed in such state. All parties which have had any
interest in the
Mortgage Loan 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 or were not required to be licensed in such
state;
(xvii) Title Insurance. The Mortgage Loan is covered by an
American Land
Title Association ("ALTA") ALTA lender's title insurance policy
acceptable to
Fannie Mae and Freddie Mac (which, in the case of an Adjustable
Rate Mortgage
Loan has an adjustable rate mortgage endorsement in the form of
ALTA 6.0 or
6.1), issued by a title insurer acceptable to Fannie Mae and
Freddie Mac and
qualified to do business in the jurisdiction where the Mortgaged
Property is
located, insuring (subject to the exceptions contained above in
(xi)(a) and (b)
and, with respect to each Mortgage Loan which is indicated by
the Seller to be a
Second Lien Mortgage Loan (as reflected on the Mortgage Loan
Schedule) clause
(d)) the Seller, its successors and assigns as to the first
priority lien of the
Mortgage in the original principal amount of the Mortgage Loan
and, with respect
to any Adjustable Rate Mortgage Loan, against any loss by reason
of the
invalidity or unenforceability of the lien resulting from the
provisions of the
Mortgage providing for adjustment in the Mortgage Interest Rate
and Monthly
Payment. 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;
-23-
<PAGE>
(xviii) No Defaults. 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. With respect to each Mortgage Loan which
is indicated by
the Seller to be a Second Lien Mortgage Loan (as reflected on
the Mortgage Loan
Schedule) (i) the First Lien is in full force and effect, (ii)
there is no
default, breach, violation or event of acceleration existing
under such First
Lien mortgage or the related mortgage note, (iii) 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
thereunder, and either (A) the First Lien mortgage contains a
provision which
allows or (B) applicable law requires, the mortgagee under the
Second Lien
Mortgage Loan to receive notice of, and affords such mortgagee
an opportunity to
cure any default by payment in full or otherwise under the First
Lien mortgage;
(xix) No Mechanics' Liens. 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;
(xx) Origination. 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) Payment Terms. Payments on the Mortgage Loan shall
commence (with
respect to any newly originated Mortgage Loans) or 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 Mortgage
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 Mortgage Loan,
are sufficient
to fully amortize the original principal balance over the
original term thereof
(other than with respect to a Mortgage Loan identified on the
related Mortgage
Loan Schedule as an interest-only Mortgage Loan during the
interest-only period
or a Mortgage Loan which is identified on the related Mortgage
Loan Schedule as
a Balloon Mortgage Loan) and to pay interest at the related
Mortgage Interest
Rate, and (B) in the case of an Adjustable Rate Mortgage 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 Mortgage Loan identified on the related Mortgage
Loan Schedule as
an interest-only Mortgage Loan during the interest-only period
or a Mortgage
Loan which is identified on the related Mortgage Loan Schedule
as a Balloon
Mortgage Loan) and to pay interest at the related Mortgage
Interest Rate. The
Index for each Adjustable Rate Mortgage Loan is as defined in
the related
Mortgage Loan Schedule. With respect to each Mortgage Loan
identified on the
Mortgage Loan Schedule as an interest-only Mortgage Loan, the
interest-only
period shall not exceed the period specified on the Mortgage
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 Mortgage Loan. With respect to
each Balloon
Mortgage Loan, the Mortgage Note requires a monthly payment
which is sufficient
to fully amortize the original principal balance over a term
greater than the
original term thereof and to pay interest at the related
Mortgage Interest Rate
and requires a final Monthly Payment substantially greater than
the preceding
-24-
<PAGE>
monthly payment which is sufficient to repay the remaining
unpaid principal
balance of the Balloon Mortgage Loan as of the Due Date of such
Monthly Payment.
No Balloon Mortgage Loan has an original stated maturity of less
than seven (7)
years. The Mortgage Note does not permit negative amortization.
No Mortgage Loan
had an original term to maturity of more than thirty (30)
years;
(xxii) Origination and Collection Practices; Escrow Deposits.
The
origination, servicing and collection practices used by the
Seller with respect
to each Mortgage Note and Mortgage, including without limitation
the
establishment, maintenance and servicing of the Escrow Accounts
and Escrow
Payments, if any, since origination 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 all applicable laws, rules and regulations, the
terms of the
Mortgage Note and Mortgage, and the Fannie Mae and Freddie Mac
servicing guides.
With respect to escrow deposits and Escrow Payments (other than
with respect to
each Mortgage Loan which is indicated by the Seller to be a
Second Lien Mortgage
Loan and for which the mortgagee under the First Lien is
collecting Escrow
Payments (as reflected on the Mortgage Loan Schedule)), 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, except with respect
to de minimis
completion escrows, 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) Mortgaged Property Undamaged. The Mortgaged Property is
free of
damage and waste and is in good repair, and there is no
proceeding pending or,
to the best of Seller's knowledge, threatened for the total or
partial
condemnation thereof nor is such a proceeding currently
occurring;
(xxiv) Customary Provisions. 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 has
not been subject
to any bankruptcy proceeding or foreclosure proceeding and the
Mortgagor has not
filed for protection under applicable bankruptcy laws. There is
no homestead or
other exemption 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) Appraisal. Unless otherwise set forth on the Mortgage Loan
Schedule,
the Mortgage File contains an appraisal of the related Mortgaged
Property which,
(a) with respect to First Lien Mortgage Loans, was on appraisal
form 1004 or
form 2055 with an interior inspection, or (b) with respect to
Second Lien
Mortgage Loans, was on appraisal form 704, 2065 or 2055 with an
exterior only
inspection, and (c) with respect to (a) or (b) above, 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
-25-
<PAGE>
compensation is not affected by the approval or disapproval of
the Mortgage Loan
and who met the minimum qualifications of Fannie Mae and Freddie
Mac. 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;
(xxvi) Deeds of Trust. 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;
(xxvii) Construction or Rehabilitation of Mortgaged Property. No
Mortgage
Loan was made in connection with (a) the construction or
rehabilitation of a
Mortgaged Property other than construction to permanent mortgage
loans which
have been converted to "permanent" mortgage loans or (b)
facilitating the
trade-in or exchange of a Mortgaged Property;
(xxviii) LTV; CLTV. The Loan-to-Value Ratio of any Mortgage Loan
at
origination was not more than 100% and the CLTV of any Mortgage
Loan at
origination was not more than 100%; Each Mortgage Loan (other
than any Mortgage
Loan underwritten pursuant to the Seller's Subprime Underwriting
Guidelines)
with an original Loan-to-Value Ratio at origination greater than
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 Fannie
Mae. 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 that
is not an LPMI 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. If a Mortgage Loan is identified on the Mortgage Loan
Schedule as
subject to a Lender Paid Mortgage Insurance Policy, such policy
insures that
portion of the Mortgage Loan set forth in the LPMI Policy. All
provisions of any
such LPMI Policy have been and are being complied with, such
policy is in full
force and effect, and all premiums due thereunder have been
paid;
(xxix) Occupancy of the Mortgaged Property. 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 and
fire
underwriting certificates, have been made or obtained from the
appropriate
authorities. No improvement located on or being part of any
Mortgaged Property
is in violation of any applicable zoning and subdivision law,
ordinance or
regulation;
(xxx) No Error, Omission, Fraud etc. 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 Seller,
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;
-26-
<PAGE>
(xxxi) Consolidation of Advances; Lien Priority. 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
reflected on the Mortgage Loan Schedule. The lien of the
Mortgage securing the
consolidated principal amount is expressly insured as having (A)
first lien
priority with respect to each Mortgage Loan which is indicated
by the Seller to
be a First Lien (as reflected on the Mortgage Loan Schedule), or
(B) second lien
priority with respect to each Mortgage Loan which is indicated
by the Seller to
be a Second Lien Mortgage Loan (as reflected on the Mortgage
Loan Schedule), in
either case, by a title insurance policy, an endorsement to the
policy insuring
the mortgagee's consolidated interest or by other title evidence
acceptable to
Fannie Mae and Freddie Mac. The consolidated principal amount
does not exceed
the original principal amount of the Mortgage Loan;
(xxxii) Environmental Matters. 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;
(xxxiii) HOEPA. No Mortgage Loan is (a) subject to the
provisions of the
Homeownership and Equity Protection Act of 1994 as amended
("HOEPA"), or has an
"annual percentage rate" or "total points and fees" payable by
the borrower (as
each such term is defined under HOEPA) that equals or exceeds
the applicable
thresholds defined under HOEPA (Section 32 of Regulation Z, 12
C.F.R. Section
226.32(a)(1)(i) and (ii)), (b) a "high cost" mortgage loan,
"covered" mortgage
loan (excluding home loans defined as "covered home loans" in
the New Jersey
Home Ownership Security Act of 2002 that were originated between
November 26,
2003 and July 7, 2004), "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, provided that this determination shall be
made with respect
to the relevant state or local law, regardless of the effect of
any available
federal preemption, other than exemptions specifically provided
for in the
relevant 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, assignee liability to holders of
such mortgage
loans or additional legal liability for mortgage loans having
high interest
rates, points and/or fees, or (d) a High Cost Loan or Covered
Loan, as
applicable (as such terms are defined in the current Standard
& Poor's LEVELS(R)
Glossary Revised, Appendix E);
(xxxiv) Due-On-Sale. Each Mortgage contains an enforceable
provision for
the acceleration of the payment of the unpaid principal balance
of the related
Mortgage Loan in the event the related Mortgaged Property is
sold or transferred
without the prior consent of the mortgagee thereunder;
(xxxv) Second Liens. With respect to each Mortgage Loan which is
a Second
Lien, (i) the related First Lien does not provide for negative
amortization,
(ii) either no consent for the Mortgage Loan is required by the
holder of the
First Lien or such consent has been obtained and is contained in
the Mortgage
File and (iii) such Second Lien is on a Residential Dwelling
that is (or will
be) the principal residence of the Mortgagor upon origination of
the Second
Lien;
-27-
<PAGE>
(xxxvi) Prepayment Charges in Mortgage Loan Documents. The
Mortgage Loan
Documents with respect to each Mortgage Loan subject to
Prepayment Charges
specifically authorizes such Prepayment Charges to be collected,
such Prepayment
Charges are permissible and enforceable in accordance with the
terms of the
related Mortgage Loan Documents and all federal, state and local
laws (except to
the extent that the enforceability thereof may be limited by
bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally or the collectability thereof may be
limited due to
acceleration in connection with a foreclosure) and each
Prepayment Charge was
originated in compliance with all federal, state and local
laws;
(xxxvii) Compliance with Patriot Act. 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"). If required by 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;
(xxxviii) MERS Mortgage Loans. No Mortgage Loan is a MERS
Mortgage Loan;
(xxxix) FACT Act. The sale or transfer of the Mortgage Loan by
the Seller
complies with all federal, state, and local laws, rules, and
regulations
governing such sale or transfer, including, without limitation,
the Fair and
Accurate Credit Transactions Act ("FACT Act") and the Fair
Credit Reporting Act,
each as may be amended from time to time, and the Seller has not
received any
actual or constructive notice of any identity theft, fraud, or
other
misrepresentation in connection with such Mortgage Loan or any
party thereto.
(xl) Qualified Mortgage. 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);
(xli) Condos and PUDs. 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 the
Seller;
(xlii) Appraised Value. 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
-28-
<PAGE>
unless otherwise affirmatively insured under an ALTA lender's
title insurance
policy issued in conformance with subsection (xvii) hereof;
(xliii) No Additional Collateral. 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 (xi) above;
(xliv) Buydown Mortgage Loans. With respect to each Buydown
Mortgage Loan:
(a) On or before the date of origination of such Mortgage Loan,
the
Seller and the Mortgagor, or the Seller, the Mortgagor and the
seller of
the Mortgaged Property or a third party entered into a Buydown
Agreement.
The Buydown Agreement provides that the seller of the Mortgaged
Property
(or third party) shall deliver to the Seller temporary Buydown
Funds in an
amount equal to the aggregate undiscounted amount of payments
that, when
added to the amount the Mortgagor on such Mortgage Loan is
obligated to pay
on each Due Date in accordance with the terms of the Buydown
Agreement, is
equal to the full scheduled Monthly Payment due on such Mortgage
Loan. The
temporary Buydown Funds enable the Mortgagor to qualify for the
Buydown
Mortgage Loan for the first two years of the term of such
Mortgage Loan at
an interest rate of not more than 2.0% less per annum than the
Mortgage
Interest Rate. The effective interest rate will increase in the
seventh
month of the Buydown Mortgage Loan so that the effective
interest rate will
be equal to the interest rate as set forth in the related
Mortgage Note.
(b) The Mortgage and Mortgage Note reflect the permanent payment
terms
rather than the payment terms of the Buydown Agreement. The
Buydown
Agreement provides for the payment by the Mortgagor of the full
amount of
the Monthly Payment on any Due Date that the Buydown Funds are
not
available. The Buydown Funds were not used to reduce the
original principal
balance of the Mortgage Loan or to increase the Appraised Value
of the
Mortgaged Property when calculating the Loan-to-Value Ratios for
purposes
of this Agreement and, if the Buydown Funds were provided by the
Seller and
if required under Agency Guidelines, the terms of the Buydown
Agreement
were disclosed to the appraiser of the Mortgaged Property;
(c) The Buydown Funds may not be refunded to the Mortgagor
unless the
Mortgagor makes a principal payment for the outstanding balance
of the
Mortgage Loan;
(d) As of the Cut-off Date, the Buydown Mortgage Loans are 5% or
less
of the aggregate Stated Principal Balance of the Mortgage Loans;
and
-29-
<PAGE>
(e) As of the date of origination of the Mortgage Loan, the
provisions
of the related Buydown Agreement complied with the requirements
of Fannie
Mae and Freddie Mac regarding buydown agreements;
(xlv) No Convertible Mortgage Loans; No Graduated Payments or
Contingent
Interests. No Mortgage Loan is a Convertible Mortgage Loan. 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;
(xlvi) Disclosure Materials. The Mortgagor has executed a
statement to the
effect that the Mortgagor has received all disclosure materials
required by 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;
(xlvii) Recordation of Mortgages. Each original Mortgage was
recorded, or
is in the process of being recorded, and all subsequent
assignments of the
original Mortgage (other than the assignment to the Purchaser)
have been
recorded, or are in the process of being recorded, in the
appropriate
jurisdictions wherein such recordation is necessary to perfect
the lien thereof
as against creditors of the Seller. With respect to each
Mortgage Loan, the
Assignment of Mortgage is in recordable form (except for the
name of the
assignee which is blank) and is acceptable for recording under
the laws of the
jurisdiction in which the Mortgaged Property is located;
(xlviii) Texas Refinance Loans. Each Mortgage Loan originated in
the state
of Texas pursuant to Article XVI, Section 50(a)(6) of the Texas
Constitution (a
"Texas Refinance Loan") has been originated in compliance with
the provisions of
Article XVI, Section 50(a)(6) of the Texas Constitution, Texas
Civil Statutes
and the Texas Finance Code. With respect to each Texas Refinance
Loan that is a
Cash Out Refinancing, the related Mortgage Loan Documents state
that the
Mortgagor may prepay such Texas Refinance Loan in whole or in
part without
incurring a Prepayment Charge. The Seller does not collect any
such Prepayment
Charges in connection with any such Texas Refinance Loan;
(xlix) Verification of Down Payment. Unless otherwise set forth
on the
Mortgage Loan Schedule, the source of the down payment with
respect to each
Mortgage Loan has been fully verified by the Seller;
(l) Tax Service Contracts. The Seller shall, at its own expense,
cause each
Mortgage Loan to be covered by a "life of loan" Tax Service
Contract which is
assignable to the Purchaser or its designee at no cost 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;
(li) Flood Zone Service Contracts. Each Mortgage Loan is covered
by a "life
of loan" Flood Zone Service Contract which is assignable to the
Purchaser or its
designee at no cost to the Purchaser or its designee or, for
each Mortgage Loan
-30-
<PAGE>
not covered by such Flood Zone Service Contract, the Seller
agrees to purchase
such Flood Zone Service Contract;
(lii) No Cooperatives; No Commercial Property; No Mixed Use
Property, No
Manufactured Housing. No Mortgage Loan is secured by cooperative
housing,
commercial property, manufactured housing, a mobile home or
mixed use property;
(liii) Secondary Market Sales. Each Mortgage Loan is eligible
for sale in
the secondary market or for inclusion in a Securitization
Transaction without
unreasonable credit enhancement as determined by the Purchaser
in its sole
reasonable discretion;
(liv) No Adverse Selection. No selection procedures were used by
the Seller
that identified the Mortgage Loans as being less desirable or
valuable than
other comparable mortgage loans in the Seller's portfolio;
(lv) Georgia. No Mortgage Loan originated or modified on or
after October
1, 2002 and prior to March 7, 2003 is secured by a Mortgaged
Property located in
the State of Georgia. No Mortgage Loan originated on or after
March 7, 2003 is a
"high cost home loan" as defined under the Georgia Fair Lending
Act.
(lvi) New Jersey Manufactured Housing Loans. No Mortgage Loan is
a
"manufactured housing loan" pursuant to the NJ Act, and one
hundred percent of
the amount financed of any purchase money Second Lien Mortgage
Loan subject to
the NJ Act was used for the purchase of the related Mortgaged
Property;
(lvii) MERS. No Mortgage Loan is a MERS Mortgage Loan;
(lviii) Ground Leases. With respect to each Mortgage Loan that
is secured
in whole or in part by the interest of the Mortgagor as a lessee
under a ground
lease of the related Mortgaged Property (a "Ground Lease") and
not by a fee
interest in such Mortgaged Property:
(a) The Mortgagor 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 Mortgage Loan by at least five years;
-31-
<PAGE>
(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;
(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;
(j) The Mortgagor has not commenced any action or given or
received
any notice for the purpose of terminating the Ground Lease;
(k) No lessor, as debtor in possession or by a trustee for such
lessor
has give any notice of, and the Mortgagor has not consented to,
any attempt
to transfer the related Mortgaged Property free and clear of
such Ground
Lease under section 363(f) of the Bankruptcy Code; and
(l) No lessor is subject to any voluntary or involuntary
bankruptcy,
reorganization or insolvency proceeding and no Mortgaged
Property is an
asset in any voluntary or involuntary bankruptcy, reorganization
or
insolvency proceeding.
(lix) Massachusetts Refinanced Mortgage Loans. No Mortgage 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
Massachusetts House Bill
4880 (2004)) unless either (1) (a) the related Mortgage Interest
Rate (that
would be effective once the introductory rate expires, with
respect to
Adjustable Rate Mortgage Loans) did or would not exceed by more
than 2.25% the
yield on United States Treasury securities having comparable
periods of maturity
to the maturity of the related Mortgage 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 Mortgage
Loan is an
"open-end home loan" (as such term is used in the Massachusetts
House Bill 4880
(2004)) and the related Mortgage Note provides that the related
Mortgage
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, or (2)
such Mortgage Loan
is in the "borrower's interest," as documented by a "borrower's
interest
worksheet" for the particular Mortgage Loan, which worksheet
incorporates the
-32-
<PAGE>
factors set forth in Massachusetts House Bill 4880 (2004) and
the regulations
promulgated thereunder for determining "borrower's interest,"
and otherwise
complies in all material respects with the laws of the
Commonwealth of
Massachusetts; (lx) Broker Fees. 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;
(lxi) Acceptable Investment. 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, cause the Mortgage Loan to not be
paid in full when
due, or adversely affect the value of the Mortgage Loan;
(lxii) No Notification of Prepayments in Full. 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;
(lxiii) Prepayment Charges. With respect to any Mortgage Loan
that contains
a provision permitting imposition of a Prepayment Charge upon a
Principal
Prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the
Mortgagor agreed to such Prepayment Charge in exchange for a
monetary benefit,
including but not limited to a Mortgage Interest 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 a
Prepayment Charge
and the originator of the Mortgage Loan had a written policy of
offering
borrowers, or requiring third-party brokers to offer borrowers,
the option of
obtaining a mortgage loan that did not require the payment of a
Prepayment
Charge, (iii) the Prepayment Charge is disclosed to the
Mortgagor in the
Mortgage Loan Documents pursuant to state and federal law, (iv)
for Mortgage
Loans originated on or after October 1, 2002, the duration of
the prepayment
period shall not exceed three (3) years from the date of the
Mortgage Note,
unless the Mortgage Loan was modified to reduce the prepayment
period to no more
than three years from the date of the Mortgage Note and the
Mortgagor was
notified in writing of such reduction in the prepayment period,
(v) no Mortgage
Loan originated prior to October 1, 2002 has a Prepayment Charge
longer than
five years and (vi) notwithstanding any state or federal law to
the contrary,
the Seller shall not impose such Prepayment Charge in any
instance when the
Mortgage Loan is accelerated or paid off in connection with the
workout of a
delinquent mortgage or due to the Mortgagor's default. Each
Prepayment Charge is
permissible, collectable and enforceable.
(lxiv) No Predatory Lending. No predatory, abusive 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 tangible net
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 Fannie Mae's Selling
Guide. No
Mortgagor was encouraged or required to select a Mortgage Loan
product offered
by the Mortgage Loan's originator which is a higher cost product
designed for
less creditworthy borrowers, unless at the time of the Mortgage
Loan's
origination, such Mortgagor did not qualify taking into account
credit history
and debt to income ratios for a lower cost credit product then
offered by the
-33-
<PAGE>
Mortgage Loan's originator or any affiliate of the Mortgage
Loan's originator.
If, at the time of the related loan application, the Mortgagor
may have
qualified for a lower cost credit product then offered by any
mortgage lending
affiliate of the Mortgage Loan's originator, the Mortgage Loan's
originator
referred the Mortgagor's application to such affiliate for
underwriting
consideration;
(lxv) Underwriting Methodology. The methodology used in
underwriting the
extension of credit for each Mortgage Loan employs objective
mathematical
principles which relate the Mortgagor's income, credit history,
assets and
liabilities to the proposed payment and such underwriting
methodology did and
does not rely solely 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;
(lxvi) Points and Fees Disclosed. All points, fees and charges,
including
finance charges (whether or not financed, assessed, collected or
to be
collected), in connection with the origination and servicing of
any Mortgage
Loan were disclosed in writing to the related Mortgagor in
accordance with state
and federal laws and regulations and no related Mortgagor 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 or (2) $1,000. For the
purposes of this
representation, "points and fees" (a) include origination,
underwriting, broker
and finder's fees and charges that the lender imposed as a
condition of making
the Mortgage Loan, whether they are paid to the lender or a
third party; and (b)
exclude bona fide discount points, fees paid for actual services
rendered in
connection with the origination of the Mortgage Loan (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) and 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);
(lxvii) Full File Credit Reporting (Fannie Mae). 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;
(lxviii) No Credit Life Policies. No Mortgagor was required to
purchase any
single premium credit insurance policy (e.g. life, mortgage,
disability,
accident, unemployment, or health insurance product) or debt
cancellation
agreement as a condition of obtaining the extension of credit.
No Mortgagor
obtained a prepaid single premium credit insurance policy (e.g.
life, mortgage,
disability, accident, unemployment, or health insurance product)
in connection
with the origination of the Mortgage Loan, and no proceeds from
any Mortgage
Loan were used to purchase single-premium credit insurance
policies or debt
cancellation agreements as part of the origination of, or as a
condition to
closing, such Mortgage Loan;
(lxix) Full File Credit Reporting (Past Practice; Future
Practice). The
Seller and any predecessor servicer has fully furnished, in
accordance with the
-34-
<PAGE>
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; and the Seller will
fully furnish,
in accordance with the Fair Credit Reporting Act and its
implementing
regulations, accurate and complete information (e.g., favorable
and unfavorable)
on its borrower credit files to Equifax, Experian and Trans
Credit Information
Company (three of the credit repositories), on a monthly basis;
and
(lxx) No Arbitration. With respect to each Mortgage Loan,
neither the
related Mortgage nor the related Mortgage Note requires the
Mortgagor to submit
to arbitration to resolve any dispute arising out of or relating
in any way to
the Mortgage Loan; No Mortgagor agreed to submit to arbitration
to resolve any
dispute arising out of or relating in any way to the Mortgage
Loan.
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 the Seller or the Purchaser of a breach
of any of the
foregoing representations and warranties (notwithstanding any
representation and
warranty given to the best of Seller's knowledge) 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
within two (2)
Business Days following the 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, all
of the Mortgage
Loans shall, at the Purchaser's option, be repurchased by the
Seller at the
Repurchase Price. With respect to any representations and
warranties made by the
Seller, in the event that it is discovered that the
circumstances with respect
to the Mortgage Loan are not accurately reflected in such
representation and
warranty notwithstanding the actual knowledge or lack of
knowledge of Seller,
then, notwithstanding that such representation and warranty is
made "to the best
of the Seller's knowledge," or in reliance on or based on other
information,
there shall be a breach of such representation and Seller shall
cure such breach
or repurchase the affected Mortgage Loan as provided in this
Subsection 7.03.
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
-35-
<PAGE>
deficient Mortgage Loan. Notwithstanding anything to the
contrary contained
herein, it is understood by the parties hereto that a breach of
the
representations and warranties made in Subsections 7.02 (ix),
(xxxiii), (xl),
(lii), (lv), (lvi), (lxiv), (lxv), (lxvi), (lxvii), (lxix),
(lxx) and (lxxi)
will be deemed to materially and adversely affect the value of
the related
Mortgage Loan or the interest of the Purchaser therein.
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
Purchaser 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.
If the Seller repurchases a Mortgage Loan that is a MERS
Mortgage Loan, the
Seller shall either (i) cause MERS to execute and deliver an
Assignment of
Mortgage in recordable form to transfer the Mortgage from MERS
to the Seller and
shall cause such Mortgage to be removed from registration on the
MERS System in
accordance with MERS' rules and regulations or (ii) cause MERS
to designate on
the MERS System the Seller or its designee as the beneficial
holder of such
Mortgage Loan.
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 this
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.
-36-
<PAGE>
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 equal to the product of the amount of
such shortfall
multiplied by the greater of 100% or the Purchase Price
percentage specified in
the related Confirmation 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.
In addition to such cure, repurchase and substitution
obligation, 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, substitute for or repurchase a
defective Mortgage
Loan 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. The indemnification
obligation of the
Seller set forth herein shall survive the termination of this
Agreement
notwithstanding any applicable statute of limitations, which the
Seller hereby
expressly waives.
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 Mortgage 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 Mortgage Loan as
specified above,
and (iii) demand upon the Seller by the Purchaser for compliance
with the
relevant provisions of this Agreement.
In addition to the foregoing, within 60 days of the earlier of
discovery by
Seller or receipt of notice by Seller of a breach of any
representation of any
Seller which materially and adversely affects the interests of
any Prepayment
Charge, the Seller shall pay the amount of the scheduled
Prepayment Charge to
the Purchaser.
Subsection 7.04 Prepayment-in-Full Premium Recapture.
In the event that any Mortgage Loans prepay-in-full within three
(3) months
of the related Closing Date, the Seller shall remit to the
Purchaser within five
(5) Business Days following receipt of notice from the Purchaser
of a
prepayment-in-full, the greater of (i) an amount equal to the
product of (A) the
excess of the related purchase price percentage over 100% and
(B) the Stated
Principal Balance of such prepaid Mortgage Loan as of the
related Closing Date
or (ii) the amount of any prepayment penalty fees paid with
respect to such
Mortgage Loan.
-37-
<PAGE>
Subsection 7.05 Early Payment Default.
In the event that any Mortgagor fails to make the first, second
or third
scheduled Monthly Payment due on a Mortgage Loan or due to
Purchaser within the
calendar month such payment is due, Seller shall repurchase such
Mortgage Loan
at the Repurchase Price within five (5) Business Days following
receipt of
notice from the Purchaser of such payment default.
SECTION 8. Closing. The closing for each Mortgage 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 Mortgage 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
Purchaser 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 6
hereto;
3. as Escrow Account Letter Agreement in the form attached as
Exhibit 7
hereto;
-38-
<PAGE>
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.
(b) The Closing Documents for the Mortgage 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 Mortgage Loan Schedule;
3. an Officer's Certificate, in the form of Exhibit 1 hereto,
including
all attachments thereto;
4. if requested by the Initial Purchaser, an Opinion of Counsel
to the
Seller, in the form of Exhibit 2 hereto;
5. a Security Release Certification, in the form of Exhibit 3
hereto
executed by any Person, as requested by the Initial Purchaser,
if any
of the Mortgage Loans has at any time been subject to any
security
interest, pledge or hypothecation for the benefit of such
Person;
6. a certificate or other evidence of merger or change of name,
signed or
stamped by the applicable regulatory authority, if any of the
Mortgage
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
7. an Assignment and Conveyance in the form of Exhibit 4
hereto.
(c) In addition, to the extent that the Underwriting Guidelines
are
modified, amended or supplemented at any time following the
Initial Closing
Date, the Seller shall notify the Purchaser of such change and
provide the
Purchaser a copy in both electronic and hard copy of such
modification,
amendment or supplement at the time the Seller presents a bid
for a future
trade.
(d) In addition, the Seller agrees to provide to the Purchaser
on the
Servicing Transfer Date historical delinquency information with
respect to the
Mortgage Loans during the Interim Servicing Period.
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
Mortgage 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.
-39-
<PAGE>
SECTION 11. Seller's Servicing Obligations. The Seller, as
independent
contract servicer, shall service and administer the Mortgage
Loans during the
Interim Servicing Period in accordance with the terms and
provisions set forth
in the Servicing Addendum attached hereto as Exhibit 8, which
Servicing Addendum
is incorporated herein by reference. The Seller agrees to act
reasonably, in
good faith and in accordance with all applicable laws and
regulations and to do
all things necessary to effect the transfer of the servicing of
the Mortgage
Loans to Purchaser.
SECTION 12. Removal of Mortgage Loans from Inclusion under
This
Agreement Upon a 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 Mortgage 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,
at the Purchaser's sole expense, 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 Mortgage 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 agreements required to be executed by the
Seller in
connection with such Whole Loan Transfer or Securitization
Transaction, including without limitation any Reconstitution
Agreements, the Assignment and Recognition Agreement
substantially in
the form set forth as Exhibit 9 attached hereto, and the
Indemnification Agreement substantially in the form set forth
as
Exhibit 10 attached hereto, 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 the Mortgage Loans as of the date of the Whole
Loan
Transfer or Securitization Transaction, modified to the
extent
necessary to accurately reflect the pool statistics of the
Mortgage
Loans as of the date of such Whole Loan Transfer or
Securitization
Transaction and supplemented by additional representations
and
warranties that are not unreasonable under the circumstances as
of the
date of such Whole Loan Transfer or Securitization Transaction,
to the
-40-
<PAGE>
extent that any events or circumstances, including changes in
law
occurring subsequent to the related Closing Date(s), would
render a
related Mortgage Loan unmarketable to a material segment of
the
secondary mortgage or mortgage-backed securities market;
(4) to deliver to the Purchaser for inclusion in any prospectus
or other
offering material such publicly available information regarding
the
Seller, its underwriting guidelines, its financial condition and
its
mortgage loan delinquency, foreclosure and loss experience and
any
additional information requested by the Purchaser, and to
deliver to
the Purchaser any similar non public, unaudited financial
information,
in which case the Purchaser shall bear the cost of having
such
information audited by certified public accountants if the
Purchaser
desires such an audit, or as is otherwise reasonably requested
by the
Purchaser and which the Seller is capable of providing
without
unreasonable effort or expense, and to indemnify the Purchaser
and its
affiliates for misstatements or omissions or any alleged
misstatements
or omissions contained (i) in such information and (ii) on
the
Mortgage Loan Schedule;
(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; and
(7) with respect to each Whole Loan Transfer and
Securitization
Transaction, the Seller shall establish and maintain one or
more
Custodial Accounts and Escrow Accounts with respect to the
Mortgage
Loans sold pursuant to such Whole Loan Transfer or
Securitization
Transaction, which accounts shall be established and maintained
in
addition to, and separate and apart from, any other Custodial
Account
or Custodial Accounts and Escrow Account or Escrow Accounts
established and maintained pursuant to this Agreement. The sale
or
transfer of the Mortgage Loans pursuant to a Whole Loan Transfer
or
Securitization Transaction shall be deemed to create a separate
and
distinct servicing agreement by the Seller with respect to
such
-41-
<PAGE>
Mortgage Loan or Loans. In connection therewith, the obligation
of the
Seller in respect of compensating interest payments for
Prepayment
Interest Shortfalls with respect to the Mortgage Loans sold
pursuant
to a Whole Loan Transfer or Securitization Transaction, or
sold
pursuant to one Whole Loan Transfer or Securitization
Transaction and
separated by loan group (each, a "Loan Group"), shall accrue
with
respect to the related Mortgage Loans or Loan Group, and shall
not be
made on an aggregate basis with all of the Mortgage Loans
purchased
pursuant to or in connection with this Agreement or with the
Mortgage
Loans of a different Loan Group. In addition, any reimbursement
of the
Seller in respect of Monthly Advances, Servicing Advances
and
unreimbursed Servicing Fees shall be reimbursed first on a loan
by
loan basis and, if reimbursed out of general collections on
the
related Mortgage Loans, shall be reimbursed from collections on
the
Mortgage Loans sold pursuant to the related Whole Loan Transfer
or
Securitization Transaction or, with respect to Mortgage Loans
sold
pursuant to one Whole Loan Transfer or Securitization
Transaction and
separated by Loan Group, out of collections of the Mortgage
Loans in
the related Loan Group..
All Mortgage Loans not sold or transferred pursuant to a Whole
Loan
Transfer or Securitization Transaction shall be subject to this
Agreement and
shall continue to be serviced for the remainder of the Interim
Servicing Period,
in accordance with the terms of this Agreement and with respect
thereto this
Agreement shall remain in full force and effect.
SECTION 13. COMPLIANCE WITH REGULATION AB
Subsection 13.01 Intent of the Parties; Reasonableness.
The Pu
| 
