MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (this "Agreement"),
dated
October 18, 2006, among FREMONT INVESTMENT & LOAN, a California
industrial bank
(the "Responsible Party"), CARRINGTON SECURITIES, LP, a Delaware
limited
partnership (the "Seller") and STANWICH ASSET ACCEPTANCE COMPANY,
L.L.C., a
Delaware limited liability company (the "Purchaser").
Preliminary Statement
The Seller intends to sell the Mortgage Loans (as hereinafter
identified)
to the Purchaser on the terms and subject to the conditions set
forth in this
Agreement. The Purchaser intends to deposit the Mortgage Loans into
a mortgage
pool comprising the Trust Fund. The Trust Fund will be evidenced by
a single
series of mortgage pass-through certificates designated as
Carrington Mortgage
Loan Trust, Series 2006-FRE2 Asset-Backed Pass-Through Certificates
(the
"Certificates"). The Certificates will consist of eighteen classes
of
certificates and will be issued pursuant to a Pooling and Servicing
Agreement,
dated as of October 1, 2006 (the "Pooling and Servicing
Agreement"), among the
Depositor as depositor, Fremont Investment & Loan as servicer
(the "Servicer")
and Wells Fargo Bank, N.A. as trustee (the "Trustee"). Capitalized
terms used
but not defined herein shall have the meanings set forth in the
Pooling and
Servicing Agreement.
The parties hereto agree as follows:
SECTION 1 Agreement to Purchase. The Seller agrees to sell and the
Purchaser agrees to purchase, on or before October 18, 2006 (the
"Closing
Date"), certain adjustable-rate and fixed-rate, interest-only,
balloon and
fully-amortizing, first lien and second lien, closed-end, subprime,
one- to
four- family residential mortgage loans purchased by the Seller
from the
Responsible Party (the "Mortgage Loans"), having a scheduled
principal balance
as of the close of business on October 1, 2006 (the "Cut-off Date")
of
$985,032,504 (the "Closing Balance"), after giving effect to all
payments due on
the Mortgage Loans on or before the Cut-off Date, whether or not
received
including the right to any Prepayment Charges payable by the
related Mortgagors
in connection with any Principal Prepayments on the Mortgage Loans,
on an
Originator servicing-retained basis.
SECTION 2 Mortgage Loan Schedule. The Purchaser and the Seller have
agreed upon which of the Mortgage Loans are to be purchased by the
Purchaser
pursuant to this Agreement and the Seller will prepare or cause to
be prepared
on or prior to the Closing Date a final schedule (the "Closing
Schedule") that
shall describe such Mortgage Loans and set forth all of the
Mortgage Loans to be
purchased under this Agreement, including the Prepayment Charges.
The Closing
Schedule will conform to the requirements set forth in this
Agreement and, with
respect to the Mortgage Loans subject to this Agreement, to the
definition of
"Mortgage Loan Schedule" under the Pooling and Servicing Agreement.
The Closing
Schedule shall be used as part of the Mortgage Loan Schedule under
the Pooling
and Servicing Agreement and shall be based on information provided
by the
Originator.
SECTION 3 Consideration.
(a)
In consideration for the Mortgage Loans to be purchased
hereunder the Purchaser shall, as described in Section 8, pay to or
upon the
order of the Seller in immediately available funds an amount (the
"Aggregate
Purchase Price") equal to (i) the net sale proceeds of the Class A
Certificates
and the Mezzanine Certificates and (ii) the Class CE Certificates
and the Class
P Certificates.
(b)
The Purchaser or any assignee, transferee or designee of the
Purchaser shall be entitled to all scheduled payments of principal
due after the
Cut-off Date, all other payments of principal due and collected
after the
Cut-off Date, and all payments of interest on the Mortgage Loans
allocable to
the period after the Cut-off Date. All scheduled payments of
principal and
interest due on or before the Cut-off Date and collected after the
Cut-off Date
shall belong to the Seller.
(c)
Pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign all of its right, title and interest in and
to the
Mortgage Loans, together with its rights under this Agreement, to
the Trustee
for the benefit of the Certificateholders.
SECTION 4 Transfer of the Mortgage Loans.
(a)
Possession of Mortgage Files. The Seller does hereby sell,
and in connection therewith hereby assigns, to the Purchaser,
effective as of
the Closing Date, without recourse but subject to the terms of this
Agreement,
all of its right, title and interest in, to and under the Mortgage
Loans,
including the related Prepayment Charges. The contents of each
Mortgage File not
delivered to the Purchaser or to any assignee, transferee or
designee of the
Purchaser on or prior to the Closing Date are and shall be held in
trust by the
Seller for the benefit of the Purchaser or any assignee, transferee
or designee
of the Purchaser. Upon the sale of the Mortgage Loans, the
ownership of each
Mortgage Note, the related Mortgage and the other contents of the
related
Mortgage File is vested in the Purchaser and the ownership of all
records and
documents with respect to the related Mortgage Loan prepared by or
that come
into the possession of the Seller on or after the Closing Date
shall immediately
vest in the Purchaser and shall be delivered immediately to the
Purchaser or as
otherwise directed by the Purchaser.
(b)
Delivery of Mortgage Loan Documents. The Seller will, on or
prior to the Closing Date, deliver or cause to be delivered to the
Purchaser or
any assignee, transferee or designee of the Purchaser each of the
following
documents for each Mortgage Loan:
(i)
the original Mortgage Note, endorsed in blank or in the
following form "Pay to the order of Wells Fargo Bank, N.A., as
Trustee
under the applicable agreement, without recourse," with all prior
and
intervening endorsements showing a complete chain of endorsement
from the
originator to the Person so endorsing to the Trustee;
(ii)
the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage was
executed
pursuant to a power of attorney, with evidence of recording
thereon;
(iii)
an original Assignment in blank;
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(iv)
the original recorded Assignment or Assignments showing a
complete chain of assignment from the originator to the Person
assigning
the Mortgage to the Trustee as contemplated by the immediately
preceding
clause (iii);
(v)
the original or copies of each assumption, modification or
substitution agreement, if any; and
(vi)
the original lender's title insurance policy or certified
copy thereof or, if the original title policy has not been issued,
the
irrevocable commitment to issue the same.
With respect to a maximum of approximately 2.0% of the Original
Mortgage
Loans, by outstanding principal balance of the Original Mortgage
Loans as of the
Cut-off Date, if any original Mortgage Note referred to in Section
4(b)(i) above
cannot be located, the obligations of the Seller to deliver such
documents shall
be deemed to be satisfied upon delivery to the Purchaser of a
photocopy of such
Mortgage Note, if available, with a lost note affidavit
substantially in the
form of Exhibit I attached to the Pooling and Servicing Agreement.
If any of the
original Mortgage Notes for which a lost note affidavit was
delivered to the
Purchaser is subsequently located, such original Mortgage Note
shall be
delivered to the Purchaser within three Business Days.
If any of the documents referred to in Sections 4(b)(ii), (iii) or
(iv)
above has, as of the Closing Date, been submitted for recording but
either (x)
has not been returned from the applicable public recording office
or (y) has
been lost or such public recording office has retained the original
of such
document, the obligations of the Seller to deliver such documents
shall be
deemed to be satisfied upon (1) delivery to the Purchaser of a copy
of each such
document certified by the Originator in the case of (x) above or
the applicable
public recording office in the case of (y) above to be a true and
complete copy
of the original that was submitted for recording and (2) if such
copy is
certified by the Originator, delivery to the Purchaser promptly
upon receipt
thereof of either the original or a copy of such document certified
by the
applicable public recording office to be a true and complete copy
of the
original. Notice shall be provided to the Purchaser, the Trustee
and the Rating
Agencies by the Seller if delivery pursuant to clause (2) above
will be made
more than 180 days after the Closing Date. If a certified copy or
the original
lender's title insurance policy was not delivered pursuant to
Section 4(b)(vi)
above, the Seller shall deliver or cause to be delivered to the
Purchaser,
promptly after receipt thereof, a certified copy or the original
lender's title
insurance policy. The Seller shall deliver or cause to be delivered
to the
Purchaser promptly upon receipt thereof any other original
documents
constituting a part of a Mortgage File received with respect to any
Mortgage
Loan, including, but not limited to, any original documents
evidencing an
assumption or modification of any Mortgage Loan.
The Seller shall (at the expense of the Responsible Party) promptly
(within sixty Business Days following the later of the Closing Date
and the date
of receipt by the Seller of the recording information for a
Mortgage, but in no
event later than ninety days following the Closing Date) submit or
cause to be
submitted for recording, at no expense to the Trust Fund, the
Trustee or the
Purchaser, in the appropriate public office for real property
records, each
Assignment referred to in Sections 4(b)(iii) and (iv) above and the
Seller shall
execute each original Assignment or cause each original Assignment
to be
executed in the following form: "Wells Fargo Bank, N.A.,
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as Trustee under the applicable agreement." In the event that any
such
Assignment is lost or returned unrecorded because of a defect
therein, the
Seller shall promptly prepare or cause to be prepared a substitute
Assignment or
cure or cause to be cured such defect, as the case may be, and
thereafter cause
each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative
convenience and
facilitation of servicing and to reduce closing costs, the
Assignments shall not
be required to be submitted for recording (except with respect to
any Mortgage
Loan located in Maryland) unless the Trustee or the Purchaser
receives notice
that such failure to record would result in a withdrawal or a
downgrading by any
Rating Agency of the rating on any Class of Certificates; provided,
however, the
Seller shall submit or cause to be submitted each Assignment for
recording in
the manner described above, at the expense of the Responsible Party
and at no
expense to the Trust Fund or the Trustee, upon the earliest to
occur of: (i)
written direction by Holders of Certificates entitled to at least
25% of the
Voting Rights, (ii) the occurrence of a Servicer Event of Default,
(iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to
the Servicer,
(iv) the occurrence of a servicing transfer as described in Section
7.02 of the
Pooling and Servicing Agreement, (v) with respect to any one
Assignment, the
occurrence of a bankruptcy, insolvency or foreclosure relating to
the Mortgagor
under the related Mortgage and (vi) any Mortgage Loan that is 90
days or more
delinquent. Upon receipt of written notice that recording of the
Assignments is
required pursuant to one or more of the conditions set forth in the
preceding
sentence, the Seller shall be required to deliver such Assignments
or shall
cause such Assignments to be delivered within 30 days following
receipt of such
notice.
Each original document relating to a Mortgage Loan which is not
delivered
to the Purchaser or its assignee, transferee or designee, if held
by the Seller,
shall be so held for the benefit of the Purchaser, its assignee,
transferee or
designee.
(c)
Acceptance of Mortgage Loans. The documents delivered
pursuant to Section 4(b) hereof shall be reviewed by the Purchaser
or any
assignee, transferee or designee of the Purchaser at any time
before or after
the Closing Date (and with respect to each document permitted to be
delivered
after the Closing Date, within seven days of its delivery) to
ascertain that all
required documents have been executed and received and that such
documents
relate to the Mortgage Loans identified on the Mortgage Loan
Schedule.
(d)
Transfer of Interest in Agreements. The Purchaser has the
right to assign its interest under this Agreement, in whole or in
part, to the
Trustee, as may be required to effect the purposes of the Pooling
and Servicing
Agreement, without the consent of the Seller or the Responsible
Party, and the
assignee shall succeed to the rights and obligations hereunder of
the Purchaser.
Any expense reasonably incurred by or on behalf of the Purchaser or
the Trustee
in connection with enforcing any obligations of the Seller or the
Responsible
Party under this Agreement will be promptly reimbursed by the
Seller or the
Responsible Party, as applicable.
(e)
Examination of Mortgage Files. Prior to the Closing Date,
the Seller shall either (i) deliver in escrow to the Purchaser, or
to any
assignee, transferee or designee of the Purchaser for examination,
the Mortgage
File pertaining to each Mortgage Loan or (ii) make such Mortgage
Files available
to the Purchaser or to any assignee, transferee or designee of the
Purchaser for
examination. Such examination may be made by the Purchaser or the
Trustee, and
their respective designees, upon reasonable notice to the Seller
during normal
business hours
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before the Closing Date and within 60 days after the Closing Date.
If any such
person makes such examination prior to the Closing Date and
identifies any
Mortgage Loans that do not conform to the requirements of the
Purchaser as
described in this Agreement, such Mortgage Loans shall be deleted
from the
Closing Schedule. The Purchaser may, at its option and without
notice to the
Seller, purchase all or part of the Mortgage Loans without
conducting any
partial or complete examination. The fact that the Purchaser or any
person has
conducted or has failed to conduct any partial or complete
examination of the
Mortgage Files shall not affect the rights of the Purchaser or any
assignee,
transferee or designee of the Purchaser to demand repurchase or
other relief as
provided herein or under the Pooling and Servicing Agreement.
SECTION 5 Representations, Warranties and Covenants of the
Responsible Party and the Seller.
(a)
The Responsible Party hereby represents, warrants and
covenants, to the Seller and the Purchaser, as of the date hereof
and as of the
Closing Date, that:
(i)
The Responsible Party is duly organized, validly existing
and in good standing under the laws of the state of California 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;
(ii)
The Responsible Party has the full power and authority to
execute, deliver and perform, and to enter into and consummate, all
transactions contemplated by this Agreement. The Responsible Party
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 Seller
and the
Purchaser, constitutes a legal, valid and binding obligation of the
Responsible Party, enforceable against it in accordance with its
terms
except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization;
(iii)
The execution and delivery of this Agreement by the
Responsible Party and the performance of and compliance with the
terms of
this Agreement which are applicable to the Responsible Party will
not
violate the Responsible Party's articles of incorporation or bylaws
or
constitute a default under or result in a breach or acceleration
of, any
material contract, agreement or other instrument to which the
Responsible
Party is a party or which may be applicable to the Responsible
Party or
its assets;
(iv)
The Responsible Party is not in violation of, and the
execution and delivery of this Agreement by the Responsible Party
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 Responsible Party
or its
assets, which violation will likely have consequences that would
materially and adversely affect the condition (financial or
otherwise) or
the operation of the Responsible Party or its assets or might have
consequences that would materially and adversely affect the
enforceability
of the Mortgage Loans or this Agreement or the performance of its
obligations and duties hereunder;
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(v)
The Responsible Party does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant
of the Responsible Party contained in this Agreement;
(vi)
There are no actions or proceedings against, or
investigations of, pending or, to the best of its knowledge,
threatened
the Responsible Party before any court, administrative or other
tribunal
(A) that might prohibit its entering into this Agreement, (B)
seeking to
prevent the consummation of the transactions contemplated by this
Agreement or (C) that is likely to prohibit or materially and
adversely
affect the performance by the Responsible Party of its obligations
under,
or the validity or enforceability of, this Agreement
(vii)
No consent, approval, authorization or order of or
registration or filing with, or notice to any court or governmental
agency
or body is required for the execution, delivery and performance by
the
Responsible Party of, or compliance by the Responsible Party 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;
(viii)
The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Responsible
Party;
and
(ix)
Neither this Agreement nor any written statement, report,
tape, diskette, form or other document prepared and furnished or to
be
furnished by the Responsible Party pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any
untrue
statement of material fact.
(b)
The Seller hereby represents and warrants to the Responsible
Party and the Purchaser, as of the date hereof and as of the
Closing Date, and
covenants, that:
(i)
The Seller is duly organized, validly existing and in good
standing as a limited partnership under the laws of the State of
Delaware
with full limited partnership power and authority to conduct its
business
as presently conducted by it to the extent material to the
consummation of
the transactions contemplated herein. The Seller has the full
limited
partnership power and authority to own the Mortgage Loans and to
transfer
and convey the Mortgage Loans to the Purchaser and has the full
limited
partnership power and authority to execute and deliver, engage in
the
transactions contemplated by, and perform and observe the terms and
conditions of this Agreement.
(ii)
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 Responsible Party and the Purchaser, constitutes a
legal,
valid and binding obligation of the Seller, enforceable against it
in
accordance with its terms except as the enforceability thereof may
be
limited by bankruptcy, insolvency or reorganization.
(iii)
The execution, delivery and performance of this Agreement by
the Seller (x) does not conflict and will not conflict with, does
not
breach and will not result in a
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breach of and does not constitute and will not constitute a default
(or an
event, which with notice or lapse of time or both, would constitute
a
default) under (A) any terms or provisions of the certificate of
formation
or limited partnership agreement of the Seller, (B) any term or
provision
of any material agreement, contract, instrument or indenture, to
which the
Seller is a party or by which the Seller or any of its property is
bound
or (C) any law, rule, regulation, order, judgment, writ, injunction
or
decree of any court or governmental authority having jurisdiction
over the
Seller or any of its property and (y) does not create or impose and
will
not result in the creation or imposition of any lien, charge or
encumbrance which would have a material adverse effect upon the
Mortgage
Loans or any documents or instruments evidencing or securing the
Mortgage
Loans.
(iv)
No consent, approval, authorization or order of,
registration or filing with, or notice on behalf of the Seller to
any
governmental authority or court is required, under federal laws or
the
laws of the State of Delaware, for the execution, delivery and
performance
by the Seller of, or compliance by the Seller with, this Agreement
or the
consummation by the Seller of any other transaction contemplated
hereby;
provided, however, that the Seller makes no representation or
warranty
regarding federal or state securities laws in connection with the
sale or
distribution of the Certificates.
(v)
This Agreement does not contain any untrue statement of
material fact or omit to state a material fact necessary to make
the
statements contained herein not misleading. The written statements,
reports and other documents furnished by the Seller pursuant to
this
Agreement or in connection with the transactions contemplated
hereby taken
in the aggregate do not contain any untrue statement of material
fact or
omit to state a material fact necessary to make the statements
contained
therein not misleading.
(vi)
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.
(vii)
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.
(viii)
Immediately prior to the sale of the Mortgage Loans to the
Purchaser as herein contemplated, the Seller will be the owner of
the
related Mortgage and the indebtedness evidenced by the related
Mortgage
Note, and, upon the payment to the Seller of the Aggregate Purchase
Price,
in the event that the Seller retains or has retained 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 from and after the date
hereof.
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(ix)
There are no actions or proceedings against, or
investigations known to it 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 by
the
Seller 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 validity
or
enforceability of, this Agreement.
(x)
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 are not subject to the bulk transfer or any
similar statutory provisions.
(xi)
The Seller has not dealt with any broker, investment banker,
agent or other person, except for the Purchaser or any of its
affiliates,
that may be entitled to any commission or compensation in
connection with
the sale of the Mortgage Loans.
(xii)
There is no litigation currently pending or, to the best of
the Seller's knowledge without independent investigation,
threatened
against the Seller that would reasonably be expected to adversely
affect
the transfer of the Mortgage Loans, the issuance of the
Certificates or
the execution, delivery, performance or enforceability of this
Agreement,
or that would result in a material adverse change in the financial
condition of the Seller.
(xiii)
The Seller is solvent and will not be rendered insolvent by
the consummation of the transactions contemplated hereby. The
Seller is
not transferring any Mortgage loan with any intent to hinder, delay
or
defraud any of its creditors.
(xiv)
The Seller makes each of the additional representations and
warranties set forth on Schedule I hereto.
SECTION 6 Representations and Warranties of the Responsible Party
Relating to the Mortgage Loans.
The Responsible Party hereby represents and warrants to the Seller
and the
Purchaser that as to each Mortgage Loan as of the Closing Date or
as of such
other date as specified herein:
(1)
The information set forth in the Mortgage Loan Schedule and
the historical delinquency information described in Item 1100(b) of
Regulation
AB as provided in Schedule II hereto related to the Mortgage Pool
is complete,
true and correct as of the Cut-off Date;
(2)
Each document or instrument in the related Mortgage File is
in a form generally acceptable to prudent mortgage lenders that
regularly
originate or purchase mortgage loans comparable to the Mortgage
Loans for sale
to prudent investors in the secondary market that invest in
mortgage loans such
as the Mortgage Loans;
(3)
Except for payments in the nature of Escrow Payments,
including without limitation, taxes and insurance payments, the
Originator has
not advanced funds, or induced,
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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, except for
interest
accruing from the date of the Mortgage Note or the date of
disbursement of the
Mortgage proceeds, whichever is greater, to the day which precedes
by one month
the Due Date of the first installment of principal and interest. No
payment of
principal and/or interest under the Mortgage Loan has ever been
thirty (30) days
past due, nor has any payment of principal and/or interest under
the Mortgage
Loan been more than thirty (30) days past due at any time since
origination. The
first Monthly Payment was or shall be made with respect to the
Mortgage Loan on
its Due Date or within the grace period, all in accordance with the
terms of the
related Mortgage Note;
(4)
There are no delinquent taxes, ground rents, water and
municipal charges, sewer rents, assessments, fire and hazard
insurance premiums,
leasehold payments, including assessments payable in future
installments or
other outstanding charges affecting the related Mortgaged Property;
(5)
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, or in the process of being recorded, in the
applicable
public recording office if necessary to maintain the lien priority
of the
Mortgage, and which have been delivered or will be delivered to the
Trustee on
behalf of the Purchaser; the substance of any such waiver,
alteration or
modification has been approved by the title insurer, to the extent
required by
the related policy, and is reflected on the 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 title insurer, to the extent
required by
the policy, and which assumption agreement has been delivered to
the Purchaser
and the terms of which are reflected in the Mortgage Loan Schedule;
(6)
The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including,
without
limitation, the defense of usury, nor will the operation of any of
the terms of
the Mortgage Note and/or 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 no such right of rescission, set-off,
counterclaim or
defense has been asserted with respect thereto and no Mortgagor was
a debtor in
any state or federal bankruptcy or insolvency proceeding at the
time the
Mortgage Loan was originated;
(7)
All buildings or other improvements upon the Mortgaged
Property are insured by an insurer acceptable to prudent lenders in
the
secondary mortgage market 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
Pooling and Servicing Agreement. All such insurance policies
contain a standard
mortgagee clause naming Fremont Investment & Loan, 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
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Federal Insurance Administration with a generally acceptable
insurance carrier,
in the amount described in the Pooling and Servicing Agreement (and
to the
extent required in the Pooling and Servicing Agreement) is in
effect. The
Mortgage obligates the Mortgagor thereunder to obtain and 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 obtain and maintain
such
insurance at Mortgagor's cost and expense and to seek reimbursement
therefor
from the Mortgagor. 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 Servicer upon the
consummation
of the transactions contemplated by this Agreement. The Originator
has not
engaged in, and has no knowledge of the Mortgagor's having engaged
in, any act
or omission which would impair the coverage of any such policy, the
benefits of
the endorsement provided for herein, or the validity and binding
effect of
either, including, without limitation, no unlawful fee, commission,
kickback or
other unlawful compensation or value of any kind has been or will
be received,
retained or realized by any attorney, firm or other person or
entity, and no
such unlawful items have been received, retained or realized by the
Originator;
(8)
Any and all requirements of any federal, state or local law
including, without limitation, all applicable predatory and abusive
lending
laws, 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 mortgage loans of a
type similar
to the Mortgage Loans have been complied with and the consummation
of the
transactions contemplated hereby will not involve the violation of
any such laws
or regulations, and the Originator shall maintain in its
possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand,
evidence of compliance with all such requirements;
(9)
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. Neither the Originator nor
the Servicer
has 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 Originator or the Servicer waived any default resulting
from any
action or inaction by the Mortgagor;
(10)
The related Mortgage is properly recorded and is a valid,
existing and enforceable (A) first lien and first priority security
interest
with respect to each Mortgage Loan which is indicated by to be a
first lien (as
reflected on the Mortgage Loan Schedule), or (B) second lien and
second priority
security interest with respect to each Mortgage Loan which is
indicated by the
Servicer to be a second lien Mortgage Loan (as reflected on the
Mortgage Loan
Schedule), in either case, on the Mortgaged Property, including all
buildings
and improvements on the Mortgaged Property and all installations
and mechanical,
electrical, plumbing, heating and air conditioning systems located
in or annexed
to such buildings, and all additions, alterations and replacements
made at any
time with respect to the foregoing. The lien of the Mortgage is
subject only to
(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 prudent mortgage lending institutions generally and
specifically
referred to in the lender's title insurance policy delivered to the
Responsible
Party by the Originator and which do not adversely affect the Value
of the
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Mortgaged Property, (c) other matters to which like properties are
commonly
subject which do not materially interfere with the benefits of the
security
intended to be provided by the Mortgage or the use, enjoyment,
value or
marketability of the related Mortgaged Property and (d) a first
lien on the
Mortgaged Property with respect to each Mortgage Loan which is
indicated by the
Servicer to be a first lien (as reflected on the Mortgage Loan
Schedule) or a
second lien on the Mortgaged Property with respect to each Mortgage
Loan which
is indicated by the Servicer to be a second lien (as reflected on
the Mortgage
Loan Schedule). Any security agreement, chattel mortgage or
equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and
creates a valid, existing and enforceable (A) first lien and first
priority
security interest with respect to each Mortgage Loan which is
indicated to be a
first lien (as reflected on the Mortgage Loan Schedule), or (B)
second lien and
second priority security interest with respect to each Mortgage
Loan which is
indicated by the Servicer to be a second lien Mortgage Loan (as
reflected on the
Mortgage Loan Schedule), in either case, on the property described
therein and
the Responsible Party had full right to sell and assign the same to
the Seller.
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
(other than subordinate loans originated concurrently therewith);
(11)
The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the Mortgagor
and enforceable
by the Purchaser against such Mortgagor in accordance with its
terms, except
only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of
creditors' rights generally and by law;
(12)
All parties to the Mortgage Note, the Mortgage and any other
related agreement had legal capacity to enter into the Mortgage
Loan, to execute
and deliver the Mortgage Note, the Mortgage and any other related
agreement and
to pledge, grant or convey the interest therein purported to be
conveyed, and
the Mortgage Note, the Mortgage and any other related agreement
have been duly
and properly executed by such parties. The Mortgagor is a natural
person;
(13)
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;
(14)
No proceeds from any Mortgage Loan were used to purchase
single-premium credit insurance policies;
(15)
All parties which have had any interest in the Mortgage Loan
other than the Seller), whether as originator, mortgagee, assignee,
pledgee or
otherwise, are (or, during the period in which they held and
disposed of such
interest, were): (A) organized under the laws of such state, or (B)
qualified to
do business in such state, or (C) federal savings and loan
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associations or national banks having principal offices in such
state, or (D)
not doing business in such state so as to require qualification or
licensing, or
(E) not otherwise required to be licensed in such state. All
parties which have
had any interest in the Mortgage Loan were in compliance with any
and all
applicable "doing business" and licensing requirements of the laws
of the state
wherein the Mortgaged Property is located or were not required to
be licensed in
such state;
(16)
On the date of its origination and on the Closing Date, the
Mortgage Loan was and is covered by an American Land Title
Association ("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) issued by a title insurer acceptable to prudent lenders
in the
secondary mortgage market and qualified to do business in the
jurisdiction where
the Mortgaged Property is located, insuring (subject to the
exceptions contained
above in Section (10)(a), (b) and (d)) the Servicer, its successors
and assigns
as to the first priority lien or second priority lien, as the case
may be, 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 Rate and Monthly
Payment.
Additionally, such lender's title insurance policy affirmatively
insures ingress
and egress to and from the Mortgaged Property, and against
encroachments by or
upon the Mortgaged Property or any interest therein. The Servicer
is the sole
insured of such lender's title insurance policy, and such lender's
title
insurance policy is valid and remains in full force and effect and
will be in
full force and effect upon the consummation of the transactions
contemplated by
this Agreement. No claims have been made under such lender's title
insurance
policy, and no prior holder of the related Mortgage, including the
Originator,
has done, by act or omission, anything which would impair the
coverage of such
lender's title insurance policy including, without limitation, no
unlawful fee,
commission, kickback or other unlawful compensation or value of any
kind has
been or will be received, retained or realized by any attorney,
firm or other
person or entity, and no such unlawful items have been received,
retained or
realized by the Originator;
(17)
There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and,
except with
respect to a payment under a Mortgage Loan that is less than thirty
(30) days
past due, 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 neither the Originator nor
the Servicer
nor any other entity involved in originating or servicing a
Mortgage Loan has
waived any default, breach, violation or event of acceleration.
With respect to
each Mortgage Loan which is indicated by the Servicer to be a
second lien
Mortgage Loan (as reflected on the Mortgage Loan Schedule) (i) the
first lien is
in full force and effect, (ii) there is no default, breach,
violation or event
of acceleration existing under such first lien mortgage or the
related mortgage
note, (iii) no event which, with the passage of time or with notice
and the
expiration of any grace or cure period, would constitute a default,
breach,
violation or event of acceleration thereunder, and either (A) the
first lien
mortgage contains a provision which allows or (B) applicable law
requires, the
mortgagee under the second lien Mortgage Loan to receive notice of
and affords
such mortgagee an opportunity to cure any default by payment in
full or
otherwise under the first lien mortgage;
(18)
There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are
outstanding that
under law could give rise to such
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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;
(19)
As of the date of origination of the Mortgage Loan, all
improvements which were considered in determining the 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;
(20)
The Mortgage Loan was originated by Fremont Investment &
Loan 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. The
documents, instruments and agreements submitted for loan
underwriting were not
falsified and contain no untrue statement of material fact or omit
to state a
material fact required to be stated therein or necessary to make
the information
and statements therein not misleading;
(21)
Except with regards to interest only loans, principal
payments on the Mortgage Loan shall commence (with respect to any
newly
originated Mortgage Loans) or commenced no more than sixty days
after the
proceeds of the Mortgage Loan were disbursed. The Mortgage Loan
bears interest
at the Mortgage 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 Loans, are sufficient to fully amortize
the original
principal balance over the original term thereof, of not more than
30 years, and
to pay interest at the related Mortgage 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
Rate. The
Index for each Adjustable-Rate Mortgage Loan is as defined in the
Mortgage Loan
Schedule. The Mortgage Note does not permit negative amortization.
No Mortgage
Loan is a convertible Mortgage Loan;
(22)
The origination practices used by the Originator and
collection practices used by the Servicer 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 Servicer and any predecessor servicer in accordance with the
terms of the
Mortgage Note. With respect to escrow deposits and Escrow Payments
(other than
with respect to each Mortgage Loan which is indicated by the
Servicer to be a
second lien Mortgage Loan and of which the mortgagee under the
first lien is
collecting Escrow Payments (as reflected on the Mortgage Loan
Schedule)), if
any, all such payments are in the possession of, or under the
control of, the
Servicer and there exist no deficiencies in connection therewith
for which
customary arrangements for repayment thereof have not been made. An
escrow of
funds is not prohibited by applicable law with respect to any
Mortgage Loan for
which such escrow of funds has been established. All Mortgage Rate
adjustments
have been made in strict compliance with state and federal law and
the terms of
the related Mortgage Note. If, pursuant to the terms of the
Mortgage Note,
another index was selected for determining the Mortgage Rate, the
same index was
used with respect to each Mortgage Note which required a new index
to be
selected, and such selection did not conflict with the terms of the
related
Mortgage Note. The Originator or an Affiliate executed and
delivered any and all
notices
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required under applicable law and the terms of the related Mortgage
Note and
Mortgage regarding the Mortgage Rate and the monthly payment
adjustments. Any
interest required to be paid pursuant to state, federal and local
law has been
properly paid and credited. No escrow deposits or Escrow Payments
or other
charges or payments due the Servicer have been capitalized under
any Mortgage or
the related Mortgage Note and no such escrow deposits or Escrow
Payments are
being held by the Servicer for any work on a Mortgaged Property
which has not
been completed;
(23)
The Mortgaged Property is undamaged by waste, 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 and the
