<PAGE>
Exhibit 99.6
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
among
MERRILL LYNCH MORTGAGE HOLDINGS INC.
Purchaser,
GREENPOINT MORTGAGE FUNDING INC.
Seller
and
TERWIN ADVISORS, LLC
Owner of Servicing Rights
Dated as of April 1, 2003
Conventional Fixed and Adjustable Rate Mortgage Loans
MLBUSA 2003-1
Flow Delivery Program
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S>
<C>
<C>
SECTION 1.
Definitions................................................
3
SECTION 2. Agreement to
Purchase...................................... 33
SECTION 3. Mortgage Loan
Schedules.................................... 34
SECTION 4. Purchase
Price............................................. 34
SECTION 5. Examination of
Mortgage Files.............................. 36
SECTION 6. Conveyance from Seller
to Initial Purchaser................ 37
Subsection 6.01 Conveyance of Mortgage
Loans; Possession of
Servicing Files.................................... 37
Subsection 6.02 Books and
Records.................................. 38
Subsection 6.03 Delivery of Mortgage
Loan Documents................ 40
SECTION 7. Representations,
Warranties and Covenants of the Seller:
Remedies for Breach........................................
41
Subsection 7.01 Representations and
Warranties Respecting
the Seller......................................... 41
Subsection 7.02 Representations and
Warranties Regarding Individual
Mortgage Loans..................................... 48
Subsection 7.03 Remedies for Breach of
Representations and
Warranties......................................... 71
Subsection 7.04 Repurchase of Certain
Mortgage Loans............... 76
SECTION 8.
Closing....................................................
77
SECTION 9. Closing
Documents.......................................... 78
SECTION 10.
Costs......................................................
81
SECTION 11. Seller's Servicing
Obligations............................. 81
SECTION 12. Removal of Mortgage Loans
from Inclusion under This
Agreement Upon a Whole Loan Transfer or a Pass-Through
Transfer on One or More Reconstitution Dates...............
81
SECTION 13. The
Seller.................................................
89
Subsection 13.01
Additional
Indemnification by the Seller........... 90
Subsection 13.02
Merger or
Consolidation of the Seller.............. 91
Subsection 13.03
Limitation on
Liability of the Seller and Others... 92
Subsection 13.04
Seller Not to
Resign............................... 93
Subsection 13.05
No Transfer of
Servicing........................... 94
</TABLE>
-i-
<PAGE>
<TABLE>
<S>
<C>
<C>
SECTION 14.
Default....................................................
94
Subsection 14.01
Events of
Default.................................. 94
Subsection 14.02
Waiver of
Defaults................................. 98
SECTION 15.
Termination................................................
98
SECTION 16. Successor to the
Seller.................................... 100
SECTION 17. Financial
Statements....................................... 102
SECTION 18. Mandatory Delivery: Grant of
Security Interest............. 103
SECTION 19.
Notices....................................................
104
SECTION 20. Severability
Clause........................................ 105
SECTION 21.
Counterparts...............................................
106
SECTION 22. Governing
Law.............................................. 106
SECTION 23. Intention of the
Parties................................... 106
SECTION 24. Successors and
Assigns..................................... 106
SECTION 25.
Waivers....................................................
108
SECTION 26.
Exhibits...................................................
108
SECTION 27.
Nonsolicitation............................................
108
SECTION 28. General Interpretive
Principles............................ 109
SECTION 29. Reproduction of
Documents.................................. 110
SECTION 30. Further
Agreements......................................... 110
SECTION 32.
Survival...................................................
110
</TABLE>
-ii-
<PAGE>
EXHIBITS
<TABLE>
<S>
<C>
EXHIBIT 1 SELLER'S OFFICER'S
CERTIFICATE
EXHIBIT 2 FORM OF OPINION OF
COUNSEL TO THE SELLER
EXHIBIT 3 SECURITY RELEASE
CERTIFICATION
EXHIBIT 4 FORM OF WARRANTY BILL
OF SALE
EXHIBIT 5 CONTENTS OF EACH
MORTGAGE FILE
EXHIBIT 6 FORM OF CUSTODIAL
ACCOUNT CERTIFICATION
EXHIBIT 7 FORM OF ESCROW ACCOUNT
CERTIFICATION
EXHIBIT 8 SERVICING ADDENDUM
EXHIBIT 9 FORM OF PURCHASE PRICE
AND TERMS LETTER
EXHIBIT 10 ANNUAL CERTIFICATION
SCHEDULE I FINAL MORTGAGE LOAN
SCHEDULE
</TABLE>
-iii-
<PAGE>
MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
(the
"Agreement"), dated as of April 1, 2003, by
and among Merrill Lynch Mortgage
Holdings Inc., having an office at World
Financial Center, South Tower, New
York, New York 10281 (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"), Greenpoint Mortgage
Funding Inc., having an office at 100 Wood
Hollow Drive, Novato, California
94945 (the "Seller") and Terwin Advisors,
LLC, having an office at [__________]
("Terwin").
WITNESSETH:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to
purchase, from time to time, from the
Seller, certain conventional fixed and
adjustable rate residential first lien
mortgage loans, (the "Mortgage Loans") as
described herein on a
servicing-retained basis, and which shall
be delivered in groups of whole loans
on various dates as provided herein (each,
a "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or
other security instrument creating a first
lien on a residential dwelling
located in the jurisdiction indicated on
the Final Mortgage Loan Schedule for
the related Mortgage Loan Package, which is
to be annexed hereto on each Closing
Date as Schedule I;
WHEREAS, Terwin owns the servicing rights with respect to the
Mortgage
Loans;
WHEREAS, the Purchaser, the Seller and Terwin 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;
<PAGE>
NOW, THEREFORE, in consideration of the premises and mutual
agreements
set forth herein, and for other good and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the Purchaser, the Seller and
Terwin agree as follows:
SECTION 1. Definitions. For purposes of this Agreement the
following
capitalized terms shall have the respective
meanings set forth below:
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for
the
adjustment of the Mortgage Interest Rate
payable in respect thereto.
Adjustment Date: With respect to each Adjustable Rate Mortgage
Loan,
the date set forth in the related Mortgage
Note on which the Mortgage Interest
Rate on such Adjustable Rate Mortgage Loan
is adjusted in accordance with the
terms of the related Mortgage Note.
Agreement: This Master Mortgage Loan Purchase and Servicing
Agreement
including all exhibits, schedules,
amendments and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Appraised Value: With respect to any Mortgaged Property, the lesser
of
(i) the value thereof as determined by an
appraisal made for the originator of
the Mortgage Loan at the time of
origination of the Mortgage Loan by an
appraiser who met the minimum requirements
of Fannie Mae and Freddie Mac, 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.
Approved Flood Policy Insurer: Any of the following insurers:
[______].
Approved Tax Service Contract Provider: Any of the following
providers:[______________________].
Assignment of Mortgage: 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.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than a Saturday or Sunday, or a day
on
which banking and savings and loan
institutions in the State of [California] or
the State of New York are authorized or
obligated by law or executive order to
be closed.
Buydown Mortgage Loan: A Mortgage Loan in which buydown funds are
used
to pay a portion of the interest payable on
the Mortgage Loan for a specified
period of time.
-2-
<PAGE>
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of
which
were in excess of the principal balance of
any existing first mortgage on the
related Mortgaged Property and related
closing costs, and were used to pay any
such existing first mortgage, related
closing costs and subordinate mortgages on
the related Mortgaged Property.
Closing Date: The date or dates on which the Purchaser from time
to
time shall purchase and the Seller from
time to time shall sell to the
Purchaser, the Mortgage Loans listed on the
related Final 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, and applicable U.S. Department of
Treasury regulations issued pursuant
thereto.
Condemnation Proceeds: All awards, compensation and settlements
in
respect of a taking of all or part of a
Mortgaged Property by exercise of the
power of condemnation or the right of
eminent domain.
Convertible Mortgage Loan: A Mortgage Loan that by its terms
and
subject to certain conditions contained in
the related Mortgage or Mortgage Note
allows the Mortgagor to convert the
adjustable Mortgage Interest Rate on such
Mortgage Loan to a fixed Mortgage Interest
Rate.
Custodial Account: The separate account or accounts, each of
which
shall be an Eligible Account, created and
maintained pursuant to this Agreement,
which shall be entitled "Greenpoint
Mortgage Funding Inc., as servicer, in trust
for the Purchaser and various Mortgagors,
Fixed and Adjustable Rate Mortgage
Loans", established at a financial
institution acceptable to the Purchaser.
Custodial Agreement: The agreement between the Initial Purchaser
and
the Custodian, governing the retention of
the originals of the Mortgage Loan
Documents.
Custodian: The custodian designated by the Initial Purchaser under
the
Custodial Agreement, or its successor in
interest or assigns, or any successor
to the Custodian under the Custodial
Agreement.
Cut-off Date: The first day of the month in which the related
Closing
Date occurs.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by a
Qualified Substitute Mortgage Loan.
Determination Date: With respect to each Remittance Date, the
fifteenth (15th) day of the calendar month
in which such Remittance Date occurs
or, if such fifteenth (15th) day is not a
Business Day, the Business Day
immediately preceding such fifteenth (15th)
day.
-3-
<PAGE>
Disqualified Organization: An organization defined as such in
Section
860E(e) of the Code.
Due Date: With respect to each Remittance Date, the first day of
the
calendar month in which such Remittance
Date occurs, which is the day on which
the Monthly Payment is due on a Mortgage
Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month
preceding the month of the Remittance
Date and ending on the first day of the
month of the Remittance Date.
Eligible Account: Either (i) an account or accounts maintained with
a
federal or state chartered depository
institution or trust company the
short-term unsecured debt obligations of
which (or, in the case of a depository
institution or trust company that is the
principal subsidiary of a holding
company, the short-term unsecured debt
obligations of such holding company) are
rated A-1 by S&P or Prime-1 by Moody's
(or a comparable rating if another rating
agency is specified by the Initial
Purchaser by written notice to the Seller) at
the time any amounts are held on deposit
therein, (ii) an account or accounts
the deposits in which are fully insured by
the FDIC or (iii) a trust account or
accounts maintained with 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 "Greenpoint
Mortgage Funding Inc., as servicer, in
trust for the Purchaser and various
Mortgagors, Fixed and Adjustable Rate
Mortgage Loans," established at a
financial institution acceptable to the
Purchaser.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents,
municipal charges, Primary Insurance
Policy premiums, fire and hazard insurance
premiums, condominium charges 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.
Fannie Mae: Fannie Mae or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Final Mortgage Loan Schedule: With respect to each Mortgage
Loan
Package, the schedule of Mortgage Loans to
be annexed hereto as Schedule I (or a
supplement thereto) on each Closing Date
for the Mortgage Loan Package delivered
on such Closing Date in both hard copy and
floppy disk, such schedule setting
forth the following information with
respect to each Mortgage Loan in the
Mortgage Loan Package:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
-4-
<PAGE>
(3) the street address of the Mortgaged Property including the
state
and zip
code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged
Property: single
family residence, a 2-4 family residence, a condominium
unit or a unit
in a planned unit development;
(6) the original months to maturity;
(7) the original date of the Mortgage Loan and the remaining months
to
maturity from
the Cut-off Date, based on the original amortization
schedule;
(8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Interest Rate in effect immediately following
the
Cut-off
Date;
(10) the date on which the first Monthly Payment was due on the
Mortgage
Loan;
(11)
the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment as of the Cut-off Date;
(14) the last Due Date on which a Monthly Payment was actually
applied
to the unpaid
Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the
close
of business on
the Cut-off Date;
(17) with respect to each Adjustable Rate Mortgage Loan, the
first
Mortgage
Interest Rate Adjustment Date;
(18) with respect to each Adjustable Rate Mortgage Loan, the
Gross
Margin;
(19) with respect to each Adjustable Rate Mortgage Loan, the
Periodic
Rate Cap;
(20) a code indicating the purpose of the loan (i.e., purchase
financing,
Rate/Term Refinancing, Cash-Out Refinancing);
(21) with respect to each Adjustable Rate Mortgage Loan, the
Maximum
Mortgage
Interest Rate under the terms of the Mortgage Note;
-5-
<PAGE>
(22) with respect to each Adjustable Rate Mortgage Loan, the
Minimum
Mortgage
Interest Rate under the terms of the Mortgage Note;
(23) the Mortgage Interest Rate at origination;
(24) with respect to each Adjustable Rate Mortgage Loan, the
first
Adjustment Date
immediately following the Cut-off Date;
(25) with respect to each Adjustable Rate Mortgage Loan, the
Index;
(26) the date on which the first Monthly Payment was due on the
Mortgage Loan
and, if such date is not consistent with the Due Date
currently in
effect, such Due Date;
(27) a code indicating whether the Mortgage Loan is an Adjustable
Rate
Mortgage Loan or
a Fixed Rate Mortgage Loan;
(28) a code indicating the documentation style (i.e., full,
alternative or
reduced);
(29) a code indicating if the Mortgage Loan is subject to a
Primary
Insurance
Policy, and if it is, the PMI Policy certificate number and PMI
policy coverage
percentage;
(30) a code indicating whether the Mortgage Loan is a Buydown
Mortgage
Loan;
(31) a code indicating whether the Mortgage Loan is subject to
the
Homeownership
and Equity Protection Act of 1994;
(32) a code indicating whether the Mortgage Loan is subject to
a
prepayment
penalty and the term of such penalty;
(33) the Appraised Value of the Mortgaged Property;
(34) the sale price of the Mortgaged Property, if applicable;
(35) the date on which the Mortgage Loan was originated;
(36) the Mortgage Loan Remittance Rate as of the Cut-off Date,
whether
or not collected;
With respect to the Mortgage Loan Package in the aggregate, the
Final
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;
-6-
<PAGE>
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans;
and
(4) the weighted average maturity of the Mortgage Loans.
Schedule I hereto shall be supplemented as of each Closing Date
to
reflect the addition of the Final Mortgage
Loan Schedule with respect to the
related Mortgage Loan Package.
Final Recovery Determination: With respect to any defaulted
Mortgage
Loan or any REO Property (other than a
Mortgage Loan or REO Property purchased
by the Seller pursuant to this Agreement),
a determination made by the Seller
that all Insurance Proceeds, Liquidation
Proceeds and other payments or
recoveries which the Seller, in its
reasonable good faith judgment, expects to
be finally recoverable in respect thereof
have been so recovered. The Seller
shall maintain records, prepared by a
servicing officer of the Seller, of each
Final Recovery Determination.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which
the
Mortgage Interest Rate set forth in the
Mortgage Note is fixed for the term of
such Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation 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
Final 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 Final Mortgage Loan
Schedule and set forth in the related
Mortgage Note for the purpose of
calculating the interest rate thereon.
Initial Closing Date: The Closing Date on which the Initial
Purchaser
purchases and the Seller sells the first
Mortgage Loan Package hereunder.
Initial Purchaser: Merrill Lynch Mortgage Holdings Inc., or any
successor.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage
Loan or the related Mortgaged Property.
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.
-7-
<PAGE>
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as
of
any date of determination, the ratio on
such date of the outstanding principal
amount of the Mortgage Loan, to the
Appraised Value of the Mortgaged Property.
Maximum Mortgage Interest Rate: With respect to each Adjustable
Rate
Mortgage Loan, a rate that is set forth on
the related Final 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.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller
has designated or will designate MERS as,
and has taken or will take such action
as is necessary to cause MERS to be, the
mortgagee of record, as nominee for the
Seller, in accordance with MERS Procedure
Manual and (b) the Seller has
designated or will designate the Custodian
as the Investor on the MERS(R)
System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified
from time to time.
MERS Report: The report from the MERS System listing MERS
Designated
Mortgage Loans and other information.
MERS(R)System: MERS mortgage electronic registry system, as
more
particularly described in the MERS
Procedures Manual.
Minimum Mortgage Interest Rate: With respect to each Adjustable
Rate
Mortgage Loan, a rate that is set forth on
the related Final 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.
Monthly Advance: The aggregate of the advances made by the Seller
on
any Remittance Date pursuant to Section
11.21.
Monthly Payment: With respect to any Mortgage Loan, the
scheduled
combined payment of principal and interest
payable by a Mortgagor under the
related Mortgage Note on each Due Date.
Moody's: Moody's Investors Service, Inc. or its successor in
interest.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on Mortgaged Property securing
the Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and
the
successors and assigns of such mortgagee or
beneficiary.
-8-
<PAGE>
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
Purchase Price and Terms Letter.
Mortgage Interest Rate: With respect to each Fixed Rate Mortgage
Loan,
the fixed annual rate of interest provided
for in the related Mortgage Note and,
with respect to each Adjustable Rate
Mortgage Loan, the annual rate that
interest accrues on such Adjustable Rate
Mortgage Loan from time to time in
accordance with the provisions of the
related Mortgage Note.
Mortgage Loan: Each first lien, residential mortgage loan,
sold,
assigned and transferred to the Purchaser
pursuant to this Agreement and the
related Purchase Price and Terms Letter and
identified on the Final Mortgage
Loan Schedule annexed to this Agreement on
such Closing Date, which Mortgage
Loan includes without limitation the
Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition proceeds, and all
other rights, benefits, proceeds and
obligations arising from or in connection
with such Mortgage Loan.
Mortgage Loan Documents: The following documents:
(1) The original Mortgage Note endorsed, "Pay to the order of
______________,
without recourse" and signed in the name of the Seller by
an authorized
officer of the Seller. If the Mortgage Loan was acquired by
the Seller in a
merger or other type of acquisition, the endorsement must
be by "[Seller],
successor [by merger to or in interest to, as applicable]
[name of
predecessor]"; and if the Mortgage Loan was acquired or
originated
by the Seller
while doing business under another name, the endorsement must
be by "[Seller],
successor in interest to [previous name]." The Mortgage
Note shall
include all intervening endorsements showing a complete chain
of
title from the
originator to the Seller;
(2) The original recorded Mortgage, with evidence of recording
thereon, or, if
the original Mortgage has not yet been returned from the
recording
office, a copy of the original Mortgage certified by the
previous
owner to be a
true copy of the original of the Mortgage that has been
delivered for
recording in the appropriate recording office of the
jurisdiction in
which the Mortgaged Property is located;
(3) Except with respect to each MERS Designated Mortgage Loan,
the
original
Assignment of Mortgage for each Mortgage Loan, in form and
substance
acceptable for recording. The Assignment of Mortgage shall be
delivered in
blank. If the Mortgage Loan was acquired by the Seller in a
merger, the
Assignment of Mortgage must be made by "[Seller], successor by
merger to [name
of predecessor]". If the Mortgage Loan was acquired or
originated by
the Seller while doing business under another name, the
Assignment of
Mortgage must be by "[Seller], formerly known as [previous
name]";
(4) The originals of all intervening assignments of mortgage (if
any)
evidencing a
complete chain of assignment from the Seller (or MERS with
respect to each
MERS Designated Mortgage Loan) to the last endorsee with
evidence of
recording
-9-
<PAGE>
thereon, or if
any such intervening assignment has not been returned from
the applicable
recording office or has been lost or if such public
recording office
retains the original recorded assignments of mortgage, the
Seller shall
deliver or cause to be delivered to the Custodian, a photocopy
of such
intervening assignment, together with (i) in the case of a
delay
caused by the
public recording office, an Officer's Certificate of the
Seller (or
certified by the title company, escrow agent, or closing
attorney)
stating that such intervening assignment of mortgage has been
dispatched to
the appropriate public recording office for recordation and
that such
original recorded intervening assignment of mortgage or a copy
of
such intervening
assignment of mortgage certified by the appropriate public
recording office
to be a true and complete copy of the original recorded
intervening
assignment of mortgage will be promptly delivered to the
Custodian upon
receipt thereof by the Seller; or (ii) in the case of an
intervening
assignment where a public recording office retains the original
recorded
intervening assignment or in the case where an intervening
assignment is
lost after recordation in a public recording office, a copy
of such
intervening assignment certified by such public recording office
to
be a true and
complete copy of the original recorded intervening
assignment;
(5) The original policy of title insurance (or a preliminary
title
report if the
original title insurance policy has not been received from
the title
insurance company);
(6) With respect to a Mortgage Loan that, according to the
Final
Mortgage Loan
Schedule is covered by a primary mortgage insurance policy,
the original or
a copy of the policy of primary mortgage insurance;
(7) The original of any guarantee executed in connection with
the
Mortgage
Note;
(8) The original of any security agreement, chattel mortgage or
equivalent
executed in connection with the Mortgage;
(9) Originals of all assumption, modification, consolidation or
extension
agreements, if any; and
(10) Such other documents as the Purchaser may require.
Mortgage Loan Package: The Mortgage Loans listed on a Final
Mortgage
Loan Schedule, delivered to the Custodian
and the Purchaser at least five (5)
Business Days prior to the related Closing
Date and attached to this Agreement
as Schedule I on the related Closing
Date.
Mortgage Note: The original executed note or other evidence of
the
Mortgage Loan indebtedness of a
Mortgagor.
Mortgaged Property: The Mortgagor's real property securing
repayment
of a related Mortgage Note, consisting of a
fee simple interest in a single
parcel of real property improved by a
Residential Dwelling.
-10-
<PAGE>
Mortgagor: The obligor on a Mortgage Note, the owner of the
Mortgaged
Property and the grantor or mortgagor named
in the related Mortgage and such
grantor's or mortgagor's successor's in
title to the Mortgaged Property.
Net Mortgage Rate: With respect to any Mortgage Loan (or the
related
REO Property), as of any date of
determination, a per annum rate of interest
equal to the then applicable Mortgage
Interest Rate for such Mortgage Loan minus
the Servicing Fee Rate.
Nonrecoverable Monthly Advance: Any Monthly Advance previously made
or
proposed to be made in respect of a
Mortgage Loan or REO Property that, in the
good faith business judgment of the Seller,
will not, or, in the case of a
proposed Monthly Advance, would not be,
ultimately recoverable from related late
payments, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or
REO Property as provided herein.
Officer's Certificate: A certificate signed by the Chairman of
the
Board or the Vice Chairman of the Board or
a President or a Vice President and
by the Treasurer or the Secretary or one of
the Assistant Treasurers or
Assistant Secretaries of the Person on
behalf of whom such certificate is being
delivered, and delivered to the Purchaser
as required by this Agreement.
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.
Pass-Through Transfer: The sale or transfer of some or all of
the
Mortgage Loans by the Purchaser to a trust
to be formed as part of a publicly
issued or privately placed mortgage-backed
securities transaction.
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 Final Mortgage
Loan Schedule and in the related
Mortgage Note, which is the maximum amount
by which the Mortgage Interest Rate
for such Adjustable Rate Mortgage Loan may
increase (without regard to the
Maximum Mortgage Interest Rate) or decrease
(without regard to the Minimum
Mortgage Interest Rate) on such Adjustment
Date from the Mortgage Interest Rate
in effect immediately prior to such
Adjustment Date.
Person: An individual, corporation, limited liability company,
partnership, joint venture, association,
joint-stock company, trust,
unincorporated organization or government
or any agency or political subdivision
thereof.
Preliminary Mortgage Loan Schedule:
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's first and last name;
(3) the Mortgage Interest Rate at origination;
-11-
<PAGE>
(4) the Mortgage Interest Rate in effect immediately following
the
Cut-off
Date;
(5) the original months to maturity;
(6) the original date of the Mortgage Loan and the remaining months
to
maturity from
the Cut-off Date, based on the original amortization
schedule;
(7) the stated maturity date;
(8) the amount of the Monthly Payment at origination;
(9) the amount of the Monthly Payment as of the Cut-off Date;
(10) the Stated Principal Balance of the Mortgage Loan as of the
close
of business on
the Cut-off Date;
(11) a code indicating whether the Mortgaged Property is
owner-occupied;
and
(12) a code indicating the documentation style.
Preliminary Servicing Period: With respect to any Mortgage Loans,
the
period commencing on the related Closing
Date and ending on the date the Seller
enters into Reconstitution Agreements which
amend or restate the servicing
provisions of this Agreement.
Primary Insurance Policy: A policy of primary mortgage guaranty
insurance issued by a Qualified
Insurer.
Principal Prepayment: Any payment or other recovery of principal on
a
Mortgage Loan which is received in advance
of its scheduled Due Date, including
any prepayment penalty or premium 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 Purchase Price and Terms Letter
in exchange for the Mortgage Loans
purchased on such Closing Date as calculated
as provided in Section 4.
Purchase Price and Terms Letter: With respect to any Mortgage
Loan
Package purchased and sold on any Closing
Date, the letter agreement between the
Purchaser and the Seller, in the form
annexed hereto as Exhibit 9 (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
Purchase Price and Terms Letter may
relate to more than one Mortgage Loan
Package to be purchased on one or more
Closing Dates hereunder.
Qualified Depository: A depository the accounts of which are
insured
by the FDIC through the BIF or the SAIF and
the debt obligations of which are
rated AA or better by Standard & Poor's
Corporation.
-12-
<PAGE>
Qualified Insurer: An insurer acceptable to Fannie Mae and Freddie
Mac
which is rated A-/VIII or better in the
current Best's Key Rating Guide
("Best's").
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 Net Mortgage Rate equal
to the Net Mortgage Rate of the Deleted
Mortgage Loan, (iv) have a remaining
terms to maturity not greater than (and not
more than one year less than) that
of the Deleted Mortgage Loan, (v) have the
same Due Date as the Due Date on the
Deleted Mortgage Loan, (vi) have a
Loan-to-Value Ratio as of the date of
substitution equal to or lower than the
Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (vii) be
covered under a Primary Insurance Policy
if such Qualified Substitute Mortgage Loan
has a Loan-to-Value Ratio in excess
of 80%, (viii) conform to each
representation and warranty set forth in Section
7.02 of this Agreement and (ix) be the same
type of mortgage loan (i.e. fixed or
adjustable rate with the same Gross Margin
and Index as the Deleted Mortgage
Loan). In the event that one or more
mortgage loans are substituted for one or
more Deleted Mortgage Loans, the amounts
described in clause (i) hereof shall be
determined on the basis of aggregate
principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall
be determined on the basis of
weighted average Mortgage Interest Rates,
the Net Mortgage Rates described in
clause (iii) hereof shall be satisfied as
to each such mortgage loan, the terms
described in clause (iv) shall be
determined on the basis of weighted average
remaining terms to maturity, the
Loan-to-Value Ratios described in clause (vi)
hereof shall be satisfied as to each such
mortgage loan and, except to the
extent otherwise provided in this sentence,
the representations and warranties
described in clause (viii) hereof must be
satisfied as to each Qualified
Substitute Mortgage Loan or in the
aggregate, as the case may be.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds
of
which are not in excess of the existing
first mortgage loan on the related
Mortgaged Property and related closing
costs, and were used exclusively to
satisfy the then existing first mortgage
loan of the Mortgagor on the related
Mortgaged Property and to pay related
closing costs.
Reconstitution Agreements: The agreement or agreements entered into
by
the Seller and the Purchaser and/or certain
third parties on the Reconstitution
Date or Dates with respect to any or all of
the Mortgage Loans serviced
hereunder, in connection with a Whole Loan
Transfer or a Pass-Through Transfer
as provided in Section 12.
Reconstitution Date: The date or dates on which any or all of
the
Mortgage Loans serviced under this
Agreement shall be removed from this
Agreement and reconstituted as part of a
Whole Loan Transfer or Pass-Through
Transfer pursuant to Section 12 hereof.
Record Date: With respect to each Remittance Date, the last
Business
Day of the month immediately preceding the
month in which such Remittance Date
occurs.
-13-
<PAGE>
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which
were
not used to purchase the related Mortgaged
Property.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of Section 860D of the Code.
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.
Remittance Date: The eighteenth (18th) day of each month,
commencing
on the eighteenth day of the month next
following the month in which the related
Cut-off Date occurs, or if such eighteenth
(18th) day is not a Business Day, the
first Business Day immediately following
such eighteenth (18th) day.
REO Account: The separate trust account or accounts created and
maintained pursuant to this Agreement which
shall be entitled "Greenpoint
Mortgage Funding Inc., in trust for the
Purchaser, as of [date of acquisition of
title], Fixed and Adjustable Rate Mortgage
Loans".
REO Disposition: The final sale by the Seller of any REO
Property.
REO Property: A Mortgaged Property acquired as a result of the
liquidation of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to
(i) the Stated Principal Balance of such
Mortgage Loan, plus (ii) interest on
such Stated Principal Balance at the
Mortgage Interest Rate from and including
the last Due Date through which interest
has been paid by or on behalf of the
Mortgagor to the first day of the month
following the date of repurchase, less
amounts received in respect of such
repurchased Mortgage Loan which are being
held in the Custodial Account for
distribution in connection with such Mortgage
Loan.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two-
to four-family dwelling, (iii) a
one-family dwelling unit in a Fannie Mae
eligible condominium project, or (iv) a
detached one-family dwelling in a planned
unit development, none of which is a
co-operative, mobile or manufactured
home.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Servicing Addendum: The terms and conditions attached hereto as
Exhibit 8 which will govern the servicing
of the Mortgage Loans by Seller during
the Preliminary 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
-14-
<PAGE>
Property, (ii) any enforcement or judicial
proceedings with respect to a
Mortgage Loan, including foreclosure
actions and (iii) the management and
liquidation of REO Property.
Servicing Fee: With respect to each Mortgage Loan, the amount of
the
annual servicing fee the Purchaser shall
pay to the Seller, which shall, for
each month, be equal to one-twelfth of the
product of (a) the Servicing Fee Rate
and (b) the unpaid principal balance of the
Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of
the same principal amount and period
respectively which any related interest
payment on a Mortgage Loan is computed.
The obligation of the Purchaser to pay the
Servicing Fee is limited to, and
payable solely from, the interest portion
(including recoveries with respect to
interest from Liquidation Proceeds and
other proceeds, to the extent permitted
by Section 11.05) of related Monthly
Payment collected by the Seller, or as
otherwise proved under Section 11.05. If
the Preliminary 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 Fee Rate: With respect to each Mortgage Loan, 0.375%
per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained
by the Seller consisting of originals of
all documents in the Mortgage File
which are not delivered to the Purchaser or
the Custodian and copies of the
Mortgage Loan Documents.
Servicing Strip: With respect to each Mortgage Loan, the amount of
the
fee the Seller shall pay to Terwin pursuant
to Section 13, which shall, for each
month, be equal to the excess, if any, of
the Servicing Fee, over the sum of (i)
the Subservicing Fee and (ii) any amounts
paid in such month by the Seller
pursuant to Section 11.04(xi).
S&P: Standard & Poor's Ratings Services, a Division of the
McGraw-Hill
Companies, Inc. or its successor in
interest.
Stated Principal Balance: As to each Mortgage Loan as of any date
of
determination, (i) the principal balance of
the Mortgage Loan as of the Cut-off
Date after giving effect to payments of
principal due on or before such date,
whether or not collected from the Mortgagor
on or before such date, minus (ii)
all amounts previously distributed to the
Purchaser with respect to the related
Mortgage Loan representing payments or
recoveries of principal.
Subservicing Fee: With respect to each Mortgage Loan, the amount
of
the fee retained by the Seller, as
sub-servicer pursuant to Section 13, which
shall, for each month, be equal to $7.00
per Mortgage Loan serviced by the
Seller, as such fee may be modified
pursuant to Section 13.
Termination Fee: [_____________________________].
Warranty Bill of Sale: A Warranty Bill of Sale with respect to
the
Mortgage Loans purchased on a Closing Date
in the form annexed hereto as Exhibit
4.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third
party, which sale or transfer is not
a Pass-Through Transfer.
-15-
<PAGE>
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and
the
Purchaser agrees to purchase, from
time-to-time, Mortgage Loans having an
aggregate principal balance on the related
Cut-off Date in an amount as set
forth in the related Purchase Price and
Terms Letter, 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. The obligation of the
Purchaser to purchase any Mortgage Loan from
the Seller on any particular Closing Date
shall be subject to the satisfaction
of the conditions precedent to the
Purchaser's obligation to purchase set forth
in Section 8.
SECTION 3. Mortgage Loan Schedules. Prior to the date on which
the
Seller and the Purchaser execute a Purchase
Price and Terms Letter, the Seller
shall provide the Purchaser with the
Preliminary Mortgage Loan Schedule. The
Seller shall deliver the Final Mortgage
Loan Schedule for a Mortgage Loan
Package to be purchased on a particular
Closing Date to the Purchaser at least
five (5) Business Days prior to the related
Closing Date.
SECTION 4. Purchase Price. The Purchase Price for each Mortgage
Loan
listed on the related Final Mortgage Loan
Schedule shall be the percentage of
par as stated in the related Purchase Price
and Terms Letter (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 Purchase Price and
Terms Letter, 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 the
Net Mortgage Rate 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
scheduled principal due after the related
Cut-off Date, (2) all other recoveries of
principal collected after the related
Cut-off Date (provided, however, that all
scheduled payments of principal due on
or before the related Cut-off Date and
collected by the Seller after the related
Cut-off Date shall belong to the Seller),
and (3) all payments of interest on
the Mortgage Loans net of the Servicing Fee
(minus that portion of any such
interest payment that is allocable to the
period prior to the related Cut-off
Date). The Stated Principal Balance of each
Mortgage Loan as of the related
Cut-off Date is determined after
application to the reduction of principal of
payments of principal due on or before the
related Cut-off Date whether or not
collected. Therefore, for the purposes of
this Agreement, payments of scheduled
principal and interest prepaid for a Due
Date beyond the related Cut-off Date
shall not be applied to the principal
balance as of the related Cut-off Date.
Such prepaid amounts (minus the applicable
Servicing Fee) shall be the property
of the Purchaser. The Seller shall deposit
any such prepaid amounts into the
Custodial Account, which account is
established for the benefit of the
Purchaser, for remittance by the Seller to
the Purchaser on the first related
Remittance Date. All payments of principal
and interest, less the applicable
Servicing Fee, due on a Due Date following
the related Cut-off Date shall belong
to the Purchaser.
SECTION 5. Examination of Mortgage Files. In addition to the
rights
granted to the Initial Purchaser under the
related Purchase Price and Terms
Letter to underwrite the Mortgage Loans and
review the Mortgage Files prior to
the Closing Date, prior to the related
-16-
<PAGE>
Closing Date, the Seller shall (a) deliver
to the Custodian in escrow, for
examination with respect to each Mortgage
Loan to be purchased on such Closing
Date, the related Mortgage File, including
the Assignment of Mortgage,
pertaining to each Mortgage Loan, or (b)
make the related Mortgage File
available to the Initial Purchaser for
examination at the Seller's offices or
such other location as shall otherwise be
agreed upon by the Initial Purchaser
and the Seller. Such examination may be
made by the Initial Purchaser or its
designee at any reasonable time before or
after the related Closing Date. If the
Initial Purchaser makes such examination
prior to the related Closing Date and
identifies any Mortgage Loans that do not
conform to the terms of the related
Purchase Price and Terms Letter or the
Initial Purchaser's underwriting
standards, such Mortgage Loans may, at the
Initial Purchaser's option, be
rejected for purchase by the Initial
Purchaser. If not purchased by the Initial
Purchaser, such Mortgage Loans shall be
deleted from the related Final Mortgage
Loan Schedule and may be replaced by a
Qualified Substitute Mortgage Loan
pursuant to Section 7. The Initial
Purchaser may, at its option and without
notice to the Seller, purchase all or part
of any Mortgage Loan Package without
conducting any partial or complete
examination. The fact that the Initial
Purchaser has conducted or has determined
not to conduct any partial or complete
examination of the Mortgage Files shall not
affect the Initial Purchaser's (or
any of its successors') rights to demand
repurchase or other relief or remedy
provided for in this Agreement.
SECTION 6. Conveyance from Seller to Initial Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans; Possession of
Servicing
Files. The Seller, simultaneously with the
payment of the Purchase Price, shall
execute and deliver to the Initial
Purchaser a Warranty Bill of Sale 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 Seller
shall release from its custody the
contents of any Servicing File retained by
it only in accordance with this
Agreement, except when such release is
required in connection with a repurchase
of any such Mortgage Loan pursuant to
Subsection 7.03 or 7.04.
The contents of each Mortgage File not delivered to the
[Custodian][Purchaser] are and shall be
held in trust by the Seller for the
benefit of the Purchaser as the owner
thereof. The Seller shall maintain a
Servicing File consisting of a copy of the
contents of each Mortgage File and
the originals of the documents in each
Mortgage File not delivered to the
[Custodian] [Purchaser]. The possession of
each Servicing File by the Seller is
at the will of the Purchaser for the sole
purpose of servicing the related
Mortgage Loan, and such retention and
possession by the Seller is in a custodial
capacity only. Upon the sale of the
Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the
related Mortgage File and Servicing
File shall vest immediately in the
Purchaser, and the ownership of all records
and documents with respect to the related
Mortgage Loan prepared by or which
come into the possession of the Seller
shall vest immediately in the Purchaser
and shall be retained and maintained by the
Seller, in trust, at the will of the
Purchaser and only in such custodial
capacity. Each Servicing File shall be
segregated from the other books and records
of the Seller and shall be marked
appropriately to reflect clearly the sale
of the related Mortgage Loan to the
Purchaser. The Seller shall release its
custody of the contents of any Servicing
File only in accordance with written
instructions from
-17-
<PAGE>
the Purchaser, unless such release is
required as incidental to the Seller's
servicing of the Mortgage Loans or is in
connection with a repurchase of any
Mortgage Loan.
Subsection 6.02 Books and Records. Record title to each Mortgage
and
the related Mortgage Note as of the related
Closing Date shall be in the name of
the Seller, the Purchaser, the Custodian or
one or more designees of the
Purchaser, as the Purchaser shall
designate. Notwithstanding the foregoing,
beneficial ownership of each Mortgage and
the related Mortgage Note shall be
vested solely in the Purchaser or the
appropriate designee of the Purchaser, as
the case may be. All rights arising out of
the Mortgage Loans including, but not
limited to, all funds received by the
Seller after the related Cut-off Date on
or in connection with a Mortgage Loan as
provided in Section 4 shall be vested
in the Purchaser or one or more designees
of the Purchaser; provided, however,
that all such funds received on or in
connection with a Mortgage Loan as
provided in Section 4 shall be received and
held by the Seller in trust for the
benefit of the Purchaser or the assignee of
the Purchaser, as the case may be,
as the owner of the Mortgage Loans pursuant
to the terms of this Agreement.
It is the express intention of the parties that the
transactions
contemplated by this Agreement be, and be
construed as, a sale of the Mortgage
Loans by the Seller and not a pledge of the
Mortgage Loans by the Seller to the
Purchaser to secure a debt or other
obligation of the Seller. Consequently, the
sale of each Mortgage Loan shall be
reflected as a sale on the Seller's business
records, tax returns and financial
statements.
The Seller shall keep at its servicing office books and records
in
which, subject to such reasonable
regulations as it may prescribe, the Seller
shall note transfers of Mortgage Loans. No
transfer of a Mortgage Loan may be
made unless such transfer is in compliance
with the terms hereof. For the
purposes of this Agreement, the Seller
shall be under no obligation to deal with
any person with respect to this agreement
or the Mortgage Loans unless the books
and records show such person as the owner
of the Mortgage Loan. The Purchaser
may, subject to the terms of this
Agreement, sell and transfer one or more of
the Mortgage Loans, provided, however, that
(i) the transferee will not be
deemed to be a Purchaser hereunder binding
upon the Seller unless such
transferee shall agree in writing to be
bound by the terms of this Agreement and
an original counterpart of the instrument
of hereto executed by the transferee
shall have been delivered to the Seller.
The Purchaser also shall advise the
Seller of the transfer. Upon receipt of
notice of the transfer, the Seller shall
mark its books and records to reflect the
ownership of the Mortgage Loans of
such assignee, and shall release the
previous Purchaser from its obligations
hereunder with respect to the Mortgage
Loans sold or transferred.
Subsection 6.03 Delivery of Mortgage Loan Documents. The Seller
shall
from time to time in connection with each
Closing Date, at least five (5)
Business Days prior to such Closing Date,
deliver and release to the Custodian
the Mortgage Loan Documents with respect to
each Mortgage Loan to be purchased
and sold on the related Closing Date and
set forth on the related Final Mortgage
Loan Schedule delivered with such Mortgage
Loan Documents.
The Custodian shall certify its receipt of all such Mortgage
Loan
Documents for the related Closing Date,
pursuant to an initial custody receipt
and initial certification of the
Custodian.
-18-
<PAGE>
The Seller shall forward to the Custodian original documents
evidencing an assumption, modification,
consolidation or extension of any
Mortgage Loan entered into in accordance
with this Agreement within two weeks of
their execution, provided, however, that
the Seller shall provide the Custodian
with a certified true copy of any such
document submitted for recordation within
two weeks of its execution, and shall
provide the original of any document
submitted for recordation or a copy of such
document certified by the
appropriate public recording office to be a
true and complete copy of the
original within ninety days of its
submission for recordation.
SECTION 7. Representations, Warranties and Covenants of the
Seller:
Remedies for Breach.
Subsection 7.01 Representations and Warranties Respecting the
Seller.
The Seller represents, warrants and
covenants to the Purchaser as of the date
hereof, as of the date of each respective
Purchase Price and Terms Letter, and
as of each respective Closing Date or as of
such date specifically provided
herein or in the applicable Warranty Bill
of Sale:
(a) Due Organization and Authority. The Seller is duly
organized,
validly existing and in good standing under
the laws of the state of [________]
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. 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;
(b) Ordinary Course of Business. The execution and delivery of
this
Agreement by the Seller and the performance
of and compliance with the terms of
this Agreement will not violate the
Seller's charter or articles of
incorporation or by-laws or any legal
restriction 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. 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;
(c) Ability to Service. The Seller is an approved seller/servicer
of
conventional residential Mortgage Loans for
Fannie Mae and Freddie Mac, with the
facilities, procedures, and experienced
personnel necessary for the sound
servicing of mortgage loans of
-19-
<PAGE>
the same type as the Mortgage Loans. The
Seller is in good standing to sell and
service mortgage loans for Fannie Mae and
Freddie Mac 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. The Seller is a member
of MERS in good standing, and will
comply in all material respects with the
rules and procedures of MERS in
connection with the servicing of the MERS
Mortgage Loans for as long as such
Mortgage Loans are registered with
MERS;
(d) Ability to Perform. The Seller does not believe, nor does it
have
any reason or cause to believe, that it
cannot perform each and every covenant
contained in this Agreement. The Seller is
solvent and the sale of the Mortgage
Loans is not undertaken to hinder, delay or
defraud any of the Seller's
creditors;
(e) Documents Delivered to Custodian. The Mortgage Loan Documents
have
been delivered to the Custodian. With
respect to each Mortgage Loan, the Seller
is in possession of a complete Mortgage
File in compliance with Exhibit 5,
except for such documents as have been
delivered to the Custodian;
(f) Record Title. 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;
(g) No Litigation Pending. There are no actions or proceedings
against, or investigations of, the Seller
before any court, administrative or
other tribunal (A) that might prohibit its
entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage
Loans or the consummation of the
transactions contemplated by this Agreement
or (C) that might prohibit or
materially and adversely affect the
performance by the Seller of its obligations
under, or the validity or enforceability
of, this Agreement;
(h) No Consent Required. No consent, approval, authorization or
order
of any court or governmental agency or body
is required for the execution,
delivery and performance by the Seller of,
or compliance by the Seller with,
this Agreement or the consummation of the
transactions contemplated by this
Agreement, except for such consents,
approvals, authorizations or orders, if
any, that have been obtained prior to the
Closing Date;
(i) Ordinary Course of Business. The consummation of the
transactions
contemplated by this Agreement are in the
ordinary course of business of the
Seller, and the transfer, assignment and
conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to
this Agreement are not subject to the
bulk transfer or any similar statutory
provisions in effect in any jurisdiction;
-20-
<PAGE>
(j) Accurate Delinquency and Foreclosure Information. 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;
(k) No Untrue Information. 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;
(l) Selection Process. The Mortgage Loans were selected from among
the
outstanding adjustable rate one- to
four-family mortgage loans in the Seller's
portfolio at the Closing Date as to which
the representations and warranties set
forth in Section 7.02 could be made and
such selection was not made in a manner
so as to affect adversely the interests of
the Purchaser;
(m) Pool Characteristics. The Pool Characteristics of the
Mortgage
Loans purchased on each Closing Date shall
conform to the characteristics
described in the Warranty Bill of Sale,
attached as Exhibit 4 hereto.
(n) Sale Treatment. The Seller has determined that the disposition
of
the Mortgage Loans pursuant to this
Agreement will be afforded sale treatment
for accounting and tax purposes;
(o) Financial Statements. The Seller has delivered to the
Purchaser
financial statements as to its last three
complete fiscal years and any later
quarter ended more than 60 days prior to
the execution of this Agreement. All
such financial statements fairly present
the pertinent results of operations and
changes in financial position at the end of
each such period of the Seller and
its subsidiaries and have been prepared in
accordance with generally accepted
accounting principles consistently applied
throughout the periods involved,
except as set forth in the notes thereto.
In addition, the Seller has delivered
information as to its loan gain and loss
experience for the immediately
preceding three-year period, in each case
with respect to mortgage loans owned
by it and such mortgage loans serviced for
others during such period, and all
such information so delivered is true and
correct in all material respects.
There has been no change in the business,
operations, financial condition,
properties or assets of the Seller since
the date of the Seller's financial
statements that would have a material
adverse effect on its ability to perform
its obligations under this Agreement. The
Seller has completed any forms
requested by the Purchaser in a timely
manner and in accordance with the
provided instructions;
(p) No Brokers' Fees. The Seller has not dealt with any broker,
investment banker, agent or other person
that may be entitled to any commission
or compensation in connection with the sale
of the Mortgage Loans;
-21-
<PAGE>
(q) Fair Consideration. The consideration received by the Seller
upon
the sale of the Mortgage Loans under this
Agreement constitutes fair
consideration and reasonably equivalent
value for the Mortgage Loans; and
(r) Reasonable Servicing Fee. The Seller acknowledges and agrees
that
the Servicing Fee, as calculated at the
Servicing Fee Rate, represents
reasonable compensation for performing such
services and that the entire
Servicing Fee shall be treated by the
Seller, for accounting and tax purposes,
as compensation for the servicing and
administration of the Mortgage Loans
pursuant to this Agreement.
Subsection 7.02 Representations and Warranties Regarding
Individual
Mortgage Loans. The Seller hereby
represents and warrants to the Purchaser that,
as to each Mortgage Loan, as of the related
Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in
the
related Final Mortgage Loan Schedule and
the tape delivered to the Purchaser is
complete, true and correct;
(b) Mortgage Loans in Compliance with Purchase Price and Terms
Letter.
The Mortgage Loan is in compliance with all
requirements set forth in the
related Purchase Price and Terms Letter,
and the characteristics of the related
Mortgage Loan Package as set forth in the
related Purchase Price and Terms
Letter are true and correct;
(c) 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 and credited;
the Seller has not advanced funds, or
induced, solicited or knowingly received
any advance of funds from a party other
than the owner of the related Mortgaged
Property, directly or indirectly, for
the payment of any amount required by the
Mortgage Note or Mortgage; and there
has been no delinquency, exclusive of any
period of grace, in any payment by the
Mortgagor thereunder during the last twelve
months;
(d) No Outstanding Charges. There are no defaults by the Seller or
any
prior originator in complying with the
terms of the Mortgage, and all taxes,
ground rents, governmental assessments,
insurance premiums, leasehold payments,
water, sewer and municipal charges which
previously became due and owing have
been paid, or escrow funds have been
established in an amount sufficient to pay
for every such escrowed item which remains
unpaid and which has been assessed
but is not yet due and payable. Neither the
Seller or, to the best of the
Seller's knowledge, any prior originator or
servicer has advanced funds, or
induced, solicited or knowingly received
any advance from any party other than
the Mortgagor, directly or indirectly, for
the payment of any amount due under
the Mortgage Loan;
(e) 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 if necessary to maintain the lien
priority of the Mortgage, and which
have been delivered to the Custodian; the
substance of any such waiver,
alteration or modification has been
approved by the insurer under the Primary
Insurance Policy, if any, and the title
insurer, to the extent required by the
related policy, and is
-22-
<PAGE>
reflected on the related Final Mortgage
Loan Schedule. No instrument of waiver,
alteration or modification has been
executed, and no Mortgagor has been
released, in whole or in part, except in
connection with an assumption agreement
approved by the insurer under the Primary
Insurance Policy, if any, the title
insurer, to the extent required by the
policy, and which assumption agreement
has been delivered to the Custodian and the
terms of which are reflected in the
related Final Mortgage Loan Schedule;
(f) 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
the Mortgage, or the exercise of any right
thereunder, render the Mortgage Note
or the Mortgage unenforceable, in whole or
in part, or subject to any right of
rescission, set-off, counterclaim or
defense, including the defense of usury
and, to the best of the Seller's knowledge,
no such right of rescission,
set-off, counterclaim or defense has been
asserted with respect thereto; and the
Mortgagor was not a debtor in any state or
federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan
was originated;
(g) Hazard Insurance. All buildings or other customarily
insured
improvements upon the Mortgaged Property
are insured by a Qualified Insurer
acceptable to Fannie Mae and Freddie Mac
and to lending institutions against
loss by fire, hazards of extended coverage
and such other hazards as are
customary in the area where the Mortgaged
Property is located, pursuant to
insurance policies conforming to the
requirements of the Servicing Addendum. All
such insurance policies are in full force
and effect and 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. Where required by state law or
regulation, the Mortgagor has been
given an opportunity to choose the carrier
of the required hazard insurance,
provided the policy is not a "master" or
"blanket" hazard insurance policy
covering the common facilities of a planned
unit development. The hazard
insurance policy is the valid and binding
obligation of the insurer, is in full
force and effect, and will be in full force
and effect and inure to the benefit
of the Purchaser upon the consummation of
the transactions contemplated by this
Agreement. The Seller has not engaged in,
and has no knowledge of the
Mortgagor's or any Subservicer's having
engaged in, any act or omission which
would impair the coverage of any such
policy, the benefits of the endorsement
provided for herein, or the validity and
binding effect of either, including
without limitation, no unlawful fee,
commission, kickback or other unlawful
compensation or value of any kind has been
or will be received, retained or
realized by any attorney, firm or other
person or entity, and no such unlawful
items have been received, retained or
realized by the Seller;
-23-
<PAGE>
(h) Compliance with Applicable Law. Any and all requirements of
any
federal, state or local law including,
without limitation, usury, truth in
lending, real estate settlement procedures,
consumer credit protection, equal
credit opportunity, fair housing or
disclosure laws applicable to the
origination and servicing of the Mortgage
Loan have been complied with; the
Seller maintains, and shall maintain,
evidence of such compliance as required by
applicable law or regulation and shall make
such evidence available for
inspection at the Seller's office during
normal business hours upon reasonable
advance notice;
(i) No Satisfaction of Mortgage. 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. The Seller has
not waived the performance by the Mortgagor
of any action, if the Mortgagor's
failure to perform such action would cause
the Mortgage Loan to be in default,
nor has the Seller waived any default
resulting from any action or inaction by
the Mortgagor;
(j) Valid First Lien. The Mortgage is a valid, existing and
enforceable first lien on the Mortgaged
Property, including all improvements on
the Mortgaged Property, free and clear of
all adverse claims, liens and
encumbrances having priority over the lien
of the Mortgage, subject only to (a)
the lien of current real property taxes and
assessments not yet due and payable,
(b) covenants, conditions and restrictions,
rights of way, easements and other
matters of the public record as of the date
of recording being acceptable to
mortgage lending institutions generally and
specifically referred to in the
lender's title insurance policy delivered
to the originator of the Mortgage Loan
and which do not adversely affect the
Appraised Value of the Mortgaged Property,
and (c) other matters to which like
properties are commonly subject which do not
materially interfere with the benefits of
the security intended to be provided
by the Mortgage or the use, enjoyment,
value or marketability of the related
Mortgaged Property. Any security agreement,
chattel mortgage or equivalent
document related to and delivered in
connection with the Mortgage Loan
establishes and creates a valid, existing
and enforceable first lien and first
priority security interest on the property
described therein and the Seller has
full right to sell and assign the same to
the Purchaser. 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;
(k) Validity of Mortgage Documents. The Mortgage Note and the
related
Mortgage are original and genuine and each
is the legal, valid and binding
obligation of the maker thereof,
enforceable in accordance with its terms. The
documents, instruments and agreements
submitted for loan underwriting were not
falsified and contain no untrue statement
of material fact nor omit to state a
material fact required to be stated therein
or necessary to make the information
and statements therein not misleading. To
the best of the Seller's knowledge, no
fraud was committed in connection with the
origination of the Mortgage Loan. The
Seller has reviewed all of the documents
constituting the Servicing File and has
made such inquiries as it deems necessary
to make and confirm the accuracy of
the representations set forth herein;
(l) Regarding the Mortgagor. To the best of the Seller's
knowledge,
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
-24-
<PAGE>
and the Mortgage have been duly and
properly executed by such parties. The
Mortgagor is one or more natural persons
and/or trustee for an Illinois land
trust or a trustee under a "living trust"
and such "living trust" is in
compliance with Fannie Mae guidelines for
such trusts;
(m) Full Disbursement of Proceeds. The proceeds of the Mortgage
Loan
have been fully disbursed to or for the
account of the Mortgagor and there is no
obligation for the Mortgagee to advance
additional funds thereunder and any and
all requirements as to completion of any
on-site or off-site improvement and as
to disbursements of any escrow funds
therefor have been complied with. All
costs, fees and expenses incurred in making
or closing the Mortgage Loan and the
recording of the Mortgage have been paid,
and the Mortgagor is not entitled to
any refund of any amounts paid or due to
the Mortgagee pursuant to the Mortgage
Note or Mortgage;
(n) Doing Business. All parties which have had any interest in
the
Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or,
during the period in which they held and
disposed of such interest, were) in
compliance with any and all applicable
"doing business" and licensing
requirements of the laws of the state
wherein the Mortgaged Property is located;
(o) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's
title insurance policy (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)
acceptable to Fannie Mae and Freddie Mac,
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 in (j) above) the Seller, its
successors and assigns as to the first
priority lien of the Mortgage in the
original principal amount of the Mortgage
Loan and, with respect to any Adjustable
Rate Mortgage Loan, against any loss by
reason of the invalidity or
unenforceability of the lien resulting from the
provisions of the Mortgage providing for
adjustment in the Mortgage Interest
Rate and Monthly Payment. Where required by
the state law or regulation, the
Mortgagor has been given the opportunity to
choose the carrier of the required
mortgage title insurance. Additionally,
such lender's title insurance policy
affirmatively insures ingress and egress 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. To the best of the Seller's
knowledge, 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;
(p) 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;
(q) 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
-25-
<PAGE>
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;
(r) Location of Improvements; No Encroachments. 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. No improvement
located on or being part of the Mortgage
Property is in violation of any applicable
zoning law or regulation;
(s) 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 pursuant
to Sections 203 and 211 of the National
Housing Act. The Seller and all other
parties which have had any interest in the
Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or,
during the period in which they held
and disposed of such interest, were) in
compliance with any and all applicable
"doing business" and licensing requirements
of the laws of the state wherein the
Mortgaged Property is located;
(t) Payment Terms. Principal payments on the Mortgage Loan
commenced
no more than sixty days after the proceeds
of the Mortgage Loan were disbursed.
The Mortgage Loan bears interest at the
Mortgage Interest Rate. With respect to
each Mortgage Loan, the Mortgage Note is
payable on the first day of each month
in Monthly Payments, which, in the case of
a Fixed Rate Mortgage Loan, are
sufficient to fully amortize the original
principal balance over the original
term thereof and to pay interest at the
related Mortgage Interest Rate, and, 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 and
to pay interest at the related
Mortgage Interest Rate. The Index for each
Adjustable Rate Mortgage Loan is as
defined in the related Purchase Price and
Terms Letter. The Mortgage Note does
not permit negative amortization. No
Mortgage Loan is a Convertible Mortgage
Loan and no Mortgage Loan is a simple
interest Mortgage Loan;
(u) Collection Practices; Escrow Deposits; Interest Rate
Adjustments.
The origination and collection practices
used by the Seller with respect to each
Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and
customary in the mortgage origination and
servicing industry. The Mortgage Loan
has been serviced by the Seller and, to the
best of the Seller's knowledge, any
predecessor servicer in accordance with the
terms of the Mortgage Note. With
respect to escrow deposits and Escrow
Payments, if any, all such payments are in
the possession of, or under the control of,
the Seller and there exist no
deficiencies in connection therewith for
which customary arrangements for
repayment thereof have not been made. No
escrow deposits or Escrow Payments or
other charges or payments due the Seller
have been capitalized under any
Mortgage or the related Mortgage Note and
no such escrow deposits or Escrow
Payments are being held by the Seller for
any work on a Mortgaged Property which
has not been completed. All Mortgage
Interest Rate adjustments have been made in
strict compliance with state and federal
law and the terms of the related
Mortgage Note. Any interest required to be
paid pursuant to state and local law
has been properly paid and credited;
-26-
<PAGE>
(v) Mortgaged Property Undamaged; No Condemnation Proceedings There
is
no proceeding pending or, to the Seller's
knowledge, threatened for the total or
partial condemnation of the Mortgaged
Property and such property is in good
repair and is undamaged by waste, fire,
earthquake or earth movement, windstorm,
flood, tornado or other casualty, so as to
affect adversely the value of the
Mortgaged Property as security for the
Mortgage Loan or the use for which the
premises were intended;
(w) 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;
(x) Conformance with Agency and Underwriting Guidelines. The
Mortgage
Loan was underwritten in accordance with
the underwriting guidelines of the
Seller in effect at the time the Mortgage
Loan was originated, which
underwriting guidelines have been reviewed
and approved by the Seller prior to
the related Closing Date. The Mortgage Note
and Mortgage are on forms acceptable
to Fannie Mae and Freddie Mac;
(y) 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 (j) above;
(z) Appraisal. The Mortgage File contains an appraisal of the
related
Mortgaged Property which satisfied the
standards of Fannie Mae and Freddie Mac
and was made and signed, prior to the
approval of the Mortgage Loan application,
by a qualified appraiser, duly appointed by
the Seller, who had no interest,
direct or indirect in the Mortgaged
Property or in any loan made on the security
thereof, whose compensation is not affected
by the approval or disapproval of
the Mortgage Loan and who met the minimum
qualifications of Fannie Mae and
Freddie Mac. Each appraisal of the Mortgage
Loan was made in accordance with the
requirements of Title XI of the Federal
Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in
effect on the date the Mortgage Loan was
originated;
(aa) 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;
(bb) No Buydown Provisions; No Graduated Payments or Contingent
Interests. No Mortgage Loan contains
provisions pursuant to which Monthly
Payments are (a) paid or
-27-
<PAGE>
partially paid with funds deposited in any
separate account established by the
Seller, the Mortgagor, or anyone on behalf
of the Mortgagor, (b) paid by any
source other than the Mortgagor or (c)
contains any other similar provisions
which may constitute a "buydown" provision.
The Mortgage Loan is not a graduated
payment mortgage loan and the Mortgage Loan
does not have a shared appreciation
or other contingent interest feature;
(cc) Mortgagor Acknowledgment. The Mortgagor has executed a
statement
to the effect that the Mortgagor has
received all disclosure materials required
by applicable law with respect to the
making of fixed rate mortgage loans in the
case of Fixed Rate Mortgage Loans, and
adjustable rate mortgage loans in the
case of Adjustable Rate Mortgage Loans and
rescission materials with respect to
Refinanced Mortgage Loans, and such
statement is and will remain in the Mortgage
File;
(dd) No Construction Loans. No Mortgage Loan was made in
connection
with (a) the construction or rehabilitation
of a Mortgaged Property or (b)
facilitating the trade-in or exchange of a
Mortgaged Property;
(ee) 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, or adversely
affect the value of the Mortgage Loan;
(ff) LTV, PMI Policy. Each Mortgage Loan with an LTV at origination
in
excess of 80% is and will be subject to a
Primary Mortgage 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
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 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;
(gg) Occupancy of 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, have been made or
obtained from the appropriate
authorities;
(hh) No Misrepresentation or Fraud. No error, omission,
misrepresentation, negligence, fraud or
similar occurrence with respect to a
Mortgage Loan has taken place on the part
of the Seller or, to the best of the
Seller's knowledge, any person, including
without limitation the Mortgagor, any
appraiser, any builder or developer, or any
other party involved in the
origination of the Mortgage Loan or in the
application of any insurance in
relation to such Mortgage Loan;
-28-
<PAGE>
(ii) Transfer of Mortgage Loans. The Assignment of Mortgage is
in
recordable form and is acceptable for
recording under the laws of the
jurisdiction in which the Mortgaged
Property is located (except with respect to
each MERS Designated Mortgage Loan ). Each
original Mortgage was recorded and,
except for those Mortgage Loans subject to
the MERS identification system, all
subsequent assignments of the original
Mortgage (other than the assignment to
the Purchaser) have been recorded in the
appropriate jurisdictions wherein such
recordation is necessary to perfect the
lien thereof as against creditors of the
Seller, or is in the process of being
recorded. On or prior to the Closing Date,
Seller has provided the Custodian and the
Purchaser with a MERS Report listing
the Custodian as the Investor with respect
to each MERS Designated Mortgage
Loan. With respect to each MERS Designated
Mortgage Loan, the Seller has
designated the Custodian as the Investor
and no Person is listed as Interim
Funder on the MERS(R) System;
(jj) Mortgage File. With respect to each Mortgage Loan, the Seller
is
in possession of a complete Mortgage File
except for the documents which have
been delivered to the Purchaser or the
Custodian or which have been submitted
for recording and not yet returned;
(kk) Ownership. Immediately prior to the payment of the
Purchase
Price, the Seller was the sole owner and
holder of the Mortgage Loans and the
indebtedness evidenced by the Mortgage
Note. The Mortgage Loans, including the
Mortgage Note and the Mortgage, were not
assigned or pledged by the Seller and
the Seller had good and marketable title
thereto, and the Seller had full right
to transfer and sell the Mortgage Loans to
the Purchaser free and clear of any
encumbrance, participation interest, lien,
equity, pledge, claim or security
interest and had full right and authority
subject to no interest or
participation in, or agreement with any
other party to sell or otherwise
transfer the Mortgage Loans. Following the
sale of the Mortgage Loan, the
purchaser will own such Mortgage Loan free
and clear of any encumbrance, equity,
participation interest, lien, pledge,
charge, claim or security interest. The
Seller intends to relinquish all rights to
monitor, possess and control the
Mortgage Loan except in connection with the
servicing of the Mortgage Loan by
the Seller as set forth in this Agreement.
After the Closing Date, the Seller
will not have any right to modify or alter
the terms of the sale of the Mortgage
Loan and the Seller will not have any
obligation or right to repurchase the
Mortgage Loan, except as provided in this
Agreement or as otherwise agreed to by
the Seller and the Purchaser;
(ll) Consolidated Future Advances. Any principal advances made to
the
Mortgagor prior to the Cut-off Date have
been consolidated with the outstanding
principal amount secured by the Mortgage,
and the secured principal amount, as
consolidated, bears a single interest rate
and single repayment term. The lien
of the Mortgage securing the consolidated
principal amount is expressly insured
as having first lien priority by a title
insurance policy, an endorsement to the
policy insuring the mortgagee's
consolidated interest or by other title evidence
acceptable to Fannie Mae and Freddie Mac.
The consolidated principal amount does
not exceed the original principal amount of
the Mortgage Loan;
(mm) No Balloon Payment. No Mortgage Loan has a balloon payment
feature;
(nn) Condominiums/ Planned Unit Developments. If the
Residential
Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned
unit development (other
-29-
<PAGE>
than a de minimis planned unit development)
such condominium or planned unit
development project meets the eligibility
requirements of Fannie Mae and Freddie
Mac including Fannie Mae eligibility
requirements for sale to Fannie Mae or is
located in a condominium or planned unit
development project which has received
Fannie Mae project approval and the
representations and warranties required by
Fannie Mae with respect to such condominium
or planned unit development have
been made and remain true and correct in
all respects;
(oo) Downpayment. The source of the down payment with respect to
each
Mortgage Loan has been fully verified by
the Seller;
(pp) Calculation of Interest. Interest on each Mortgage Loan is
calculated on the basis of a 360-day year
consisting of twelve 30-day months;
(qq) Environmental Matters. The Mortgaged Property is in
material
compliance with all applicable local, state
and federal environmental laws,
rules or regulations 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 nor is there any
pending action or proceeding directly
involving any Mortgaged Property of which
the Seller is aware in which
compliance with any environmental law, rule
or regulation is an issue;
(rr) Ground Leases. With respect to any ground lease to which a
Mortgaged Property may be subject: (A) the
Mortgagor is the owner of a valid and
subsisting leasehold interest under such
ground lease; (B) such ground lease is
in full force and effect, unmodified and
not supplemented by any writing or
otherwise; (C) all rent, additional rent
and other charges reserved therein have
been fully paid to the extent payable as of
the Closing Date; (D) the Mortgagor
enjoys the quiet and peaceful possession of
the leasehold estate; (E) the
Mortgagor is not in default under any of
the terms of such ground lease, and
there are no circumstances which, with the
passage of time or the giving of
notice, or both, would result in a default
under such ground lease; (F) the
lessor under such ground lease is not in
default under any of the terms or
provisions of such ground lease on the part
of the lessor to be observed or
performed; (G) the lessor under such ground
lease has satisfied any repair or
construction obligations due as of the
Closing Date pursuant to the terms of
such ground lease; (H) the execution,
delivery and performance of the Mortgage
do not require the consent (other than
those consents which have been obtained
and are in full force and effect) under,
and will not contravene any provision
of or cause a default under, such ground
lease; and (I) the term of such lease
does not terminate earlier than the
maturity date of the Mortgage Note;
(ss) Predatory Lending Regulations; High Cost Loans. None of
the
Mortgage Loans are classified as (a) "high
cost" loans under the Home Ownership
and Equity Protection Act of 1994 or (b)
"high cost," "threshold," "covered," or
"predatory" loans under any other
applicable state, federal or local law. no
predatory or deceptive lending practices,
including, without limitation, the
extension of credit without regard to the
ability of the Mortgagor to repay and
the extension of credit which has no
apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage
Loan;
-30-
<PAGE>
(tt) Location and Type of Mortgaged Property. The Mortgaged
Property
is a fee simple property located in the
state identified in the Mortgage Loan
Schedule and consists of a parcel of real
property with a detached single family
residence erected thereon, or a two- to
four-family dwelling, or an individual
condominium unit in a low-rise condominium
project, or an individual unit in a
planned unit development, provided,
however, that any condominium project or
planned unit development shall conform with
the applicable Fannie Mae and
Freddie Mac requirements regarding such
dwellings, and no residence or dwelling
is a mobile home or a manufactured
dwelling. No portion of the Mortgaged
Property is used for commercial
purposes;
(uu) Anti-Money Laundering Laws. The Seller has complied with
all
applicable anti-money laundering laws and
regulations, including without
limitation the USA Patriot Act of 2001
(collectively, the "Anti-Money Laundering
Laws"); the Seller has established an
anti-money laundering compliance program
as required by the Anti-Money Laundering
Laws, has conducted the requisite due
diligence in connection with the
origination of each Mortgage Loan for purposes
of the Anti-Money Laundering Laws,
including with respect to the legitimacy of
the applicable Mortgagor and the origin of
the assets used by the said Mortgagor
to purchase the property in question, and
maintains, and will maintain,
sufficient information to identify the
applicable Mortgagor for purposes of the
Anti-Money Laundering Laws;
(vv) Due on Sale. The Mortgage contains an
