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MORTGAGE LOAN PURCHASE AND SERVICING
AGREEMENT
dated as of April 1, 2007
among
DEUTSCHE ALT-A SECURITIES, INC., Purchaser
and
PHH MORTGAGE CORPORATION, a Seller and Servicer
and
BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST, a
Seller
TABLE OF CONTENTS
Page
ARTICLE I:
DEFINITIONS
2
Section 1.01
Defined Terms
2
ARTICLE II: SALE AND
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS
AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS 16
Section 2.01
Sale and Conveyance of Mortgage Loans
16
Section 2.02
Possession of Mortgage Files
17
Section 2.03
Books and Records
17
Section 2.04
Defective Documents; Delivery of Mortgage Loan Documents
17
Section 2.05
Transfer of Mortgage Loans
19
ARTICLE III:
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER; REPURCHASE
AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS 20
Section 3.01
Representations and Warranties of each Seller
20
Section 3.02
Representations and Warranties of the Servicer
22
Section 3.03
Representations and Warranties as to Individual Mortgage
Loans.
23
Section 3.04
Repurchase and Substitution
34
ARTICLE IV: CONDITIONS
PRECEDENT TO CLOSING
36
Section 4.01
Conditions Precedent to Closing
36
ARTICLE V:
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
37
Section 5.01
PHH Mortgage to Act as Servicer; Servicing Standards; Additional
Documents; Consent of the Purchaser 37
Section 5.02
Collection of Mortgage Loan Payments
39
Section 5.03
Notice of Foreclosure Sale
39
Section 5.04
Establishment of Collection Account; Deposits in Collection
Account
39
Section 5.05
Permitted Withdrawals from the Collection Account
40
Section 5.06
Establishment of Escrow Accounts; Deposits in Escrow
41
Section 5.07
Permitted Withdrawals From Escrow Accounts
42
Section 5.08
Payment of Taxes, Insurance and Other Charges; Maintenance of
Primary Insurance Policies; Collections Thereunder 42
Section 5.09
Transfer of Accounts
43
Section 5.10
Maintenance of Hazard Insurance
43
Section 5.11
Reserved
45
Section 5.12
Fidelity Bond; Errors and Omissions Insurance
45
Section 5.13
Realization Upon Specially Serviced Mortgage Loans and REO
Properties 45
Section 5.14
Management of REO Properties
47
Section 5.15
Sale of REO Properties
49
Section 5.16
Investment of Funds in the Collection Account
49
Section 5.17
MERS
50
Section 5.18
Compliance with REMIC Provisions.
50
Section 5.19
[Reserved]
50
ARTICLE VI: REPORTS;
REMITTANCES; ADVANCES
51
Section 6.01
Remittances
51
Section 6.02
Reporting
52
Section 6.03
Monthly Advances by the Servicer
52
Section 6.04
Non-recoverable Advances
53
Section 6.05
[Reserved]
53
ARTICLE VII: GENERAL
SERVICING PROCEDURE
53
Section 7.01
Enforcement of Due-on-Sale Clauses, Assumption Agreements
53
Section 7.02
Satisfaction of Mortgages and Release of Mortgage Files
54
Section 7.03
Servicing Compensation
55
Section 7.04
[Reserved]
55
Section 7.05
[Reserved]
55
Section 7.06
Purchaser’s Right to Examine Servicer Records
55
ARTICLE VIII:
56
Section 8.01
[Reserved]
56
ARTICLE IX: THE
SELLERS/SERVICER
56
Section 9.01
[Reserved]
56
Section 9.02
Merger or Consolidation of the Seller
56
Section 9.03
Limitation on Liability of the Sellers and the Servicer
56
Section 9.04
Servicer Not to Resign
57
ARTICLE X: DEFAULT
58
Section 10.01
Events of Default
58
ARTICLE XI:
TERMINATION
59
Section 11.01
Term and Termination
59
Section 11.02
Survival
60
ARTICLE XII: GENERAL
PROVISIONS
60
Section 12.01
Successor to the Servicer
60
Section 12.02
Governing Law
61
Section 12.03
Notices
61
Section 12.04
Severability of Provisions
62
Section 12.05
Schedules and Exhibits
62
Section 12.06
General Interpretive Principles
62
Section 12.07
Waivers and Amendments, Noncontractual Remedies; Preservation of
Remedies 63
Section 12.08
Captions
63
Section 12.09
Counterparts; Effectiveness
63
Section 12.10
Entire Agreement; Amendment
63
Section 12.11
Further Assurances
64
Section 12.12
Intention of the Parties
64
Section 12.13
Master Servicer as Third Party Beneficiary
64
ARTICLE XIII: THE
SECURITIZATION TRANSACTION
64
Section 13.01
Removal of Mortgage Loans from Inclusion under this Agreement
Upon the Securitization Transaction 64
ARTICLE XIIIA: COMPLIANCE WITH
REGULATION AB
66
Section 13A.01 Intent of the Parties; Reasonableness.
66
Section 13A.02 Additional Representations and Warranties
of the Servicer.
66
Section 13A.03 Information to Be Provided by the
Sellers.
67
Section 13A.04 Servicer Compliance Statement.
71
Section 13A.05 Report on Assessment of Compliance and
Attestation.
71
Section 13A.06 Use of Subservicers and Subcontractors.
72
Section 13A.07 Indemnification; Remedies.
73
Schedules
A.
Mortgage Loan Schedule
B.
Contents of Mortgage File
B-1 Collateral File
Exhibits
Exhibit 2.05
Form of Assignment, Assumption and Recognition Agreement for
Securitization Transaction
Exhibit 4
Standard & Poor’s LEVELS® Glossary
Exhibit 5.01(a)
Limited Power of Attorney
Exhibit 5.01(b)
Workout compensation
Exhibit 5.03
Form of Notice of Foreclosure
Exhibit 5.04
Form of Collection Account Letter Agreement
Exhibit 5.06
Form of Escrow Account Letter Agreement
Exhibit 6.02(a)
Report P-139 -- Monthly Statement of Mortgage Accounts
Exhibit 6.02(b)
Report S-50Y -- Private Pool Detail Report
Exhibit 6.02(c)
Report S-213 -- Summary of Curtailments Made Remittance
Report
Exhibit 6.02(d)
Report S-214 -- Summary of Paid in Full Remittance Report
Exhibit 6.02(e)
Report S-215 -- Consolidation of Remittance Report
Exhibit 6.02(f)
Report T-62C -- Monthly Accounting Report
Exhibit 6.02(g)
Report T-62E -- Liquidation Report
Exhibit 6.02(h)
Report P-4DL -- Delinquency Report
Exhibit 6.02(i)
Report P-195 -- Delinquency Report
Exhibit 11
Form of Sarbanes-Oxley Certification
Exhibit 12
Servicing Criteria to be addressed in Assessment of
Compliance
MORTGAGE LOAN PURCHASE & SERVICING
AGREEMENT
This Mortgage Loan Purchase & Servicing Agreement, dated as
of April 1, 2007, is entered into among Deutsche Alt-A Securities,
Inc., as the Purchaser ("Purchaser"), PHH Mortgage Corporation
("PHH Mortgage"), as a seller (in such capacity, a "Seller") and as
the servicer (in such capacity, the "Servicer"), and Bishop’s
Gate Residential Mortgage Trust ("Bishop’s Gate," together
with PHH Mortgage in its capacity as a Seller, the "Sellers" and
individually, each a "Seller").
PRELIMINARY STATEMENT
PHH Mortgage is engaged in the business, inter
alia , of making loans to individuals, the repayment of
which is secured by a first lien mortgage on such
individuals’ residences. Bishop’s Gate is engaged in
the business of purchasing such mortgage loans from PHH Mortgage
and selling same to investors.
PHH Mortgage has established certain terms, conditions and loan
programs, as described in the PHH Investor Manual (the " PHH
Guide "), which may be updated from time to time, and Purchaser
is willing to purchase mortgage loans that comply with the terms of
such terms, conditions and loan programs.
The Sellers intend 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 PHH
Alternative Mortgage Trust, Series 2007-2 Mortgage Pass-Through
Certificates (the "Certificates"). The Certificates will
consist of 24 classes of certificates. The Certificates will
be issued pursuant to a Pooling and Servicing Agreement, dated as
of April 1, 2007 (the "Pooling and Servicing Agreement"), among the
Purchaser as depositor, Wells Fargo Bank, N.A. as master servicer
(the "Master Servicer") and as securities administrator and HSBC
Bank USA, National Association as trustee (the "Trustee").
The Purchaser will sell the Class 1-A-1, Class 1-A-2, Class
1-A-3, Class 1-A-4, Class 1-A-5, Class 2-A-1, Class 2-A-2, Class
2-A-3, Class 2-A-4, Class 2-A-5, Class 2-A-6, Class 3-A-1, Class
3-A-2, Class 4-A-1, Class 2-X, Class 4-X, Class 2PO, Class 4PO,
Class II-AR, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4,
Class II-M, Class II-B-1, Class II-B-2 and Class II-B-3
Certificates to Deutsche Bank Securities Inc. ("DBSI"), pursuant to
the Amended and Restated Underwriting Agreement, dated as of August
1, 2003, as amended to and including April 25, 2007, between the
Purchaser and DBSI, and the Terms Agreement, dated April 25, 2007,
between the Purchaser and DBSI. The Purchaser will sell the
Class I-CE, Class I-R, Class II-B-4, Class II-B-5 and Class II-B-6
Certificates to DBSI pursuant to the Purchase Agreement dated as of
April 26, 2007 between the Purchaser and DBSI.
The Purchaser and the Sellers wish to prescribe the terms and
manner of purchase by the Purchaser and sale by the Sellers of the
Mortgage Loans, and the management and servicing of the Mortgage
Loans by the Servicer, in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, the Purchaser, the Sellers and the Servicer
agree as follows:
ARTICLE I:
DEFINITIONS
Section 1.01
Defined Terms
Whenever used in this Agreement, the following words and phrases
shall have the following meaning specified in this Article,
otherwise capitalized terms used herein but not defined herein
shall have the meanings set forth in the Pooling and Servicing
Agreement:
"Accounting Cut-off Date": April 1, 2007.
"Affiliate": When used with reference to a specified
Person, any Person that (i) directly or indirectly controls or is
controlled by or is under common control with the specified Person,
(ii) is an officer of, partner in or trustee of, or serves in a
similar capacity with respect to, the specified person or of which
the specified Person is an officer, partner or trustee, or with
respect to which the specified Person serves in a similar capacity,
or (iii) directly or indirectly is the beneficial owner of 10% or
more of any class of equity securities of the specified Person or
of which the specified person is directly or indirectly the owner
of 10% or more of any class of equity securities.
"Agreement": This Mortgage Loan Purchase & Servicing
Agreement among the Purchaser, the Servicer and the Sellers.
"ALTA": The American Land Title Association.
"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
that, in the case of a Refinanced Mortgage Loan, such value of the
Mortgaged Property shall be 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.
"ARM Loan": An "adjustable rate" Mortgage Loan, the Note
Rate of which is subject to periodic adjustment in accordance with
the terms of the Mortgage Note.
"Assignment": An individual assignment of a 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 reflect of record the sale or
transfer of the Mortgage Loan to the Purchaser or, in the case of a
MERS Mortgage Loan, an electronic transmission to MERS, identifying
a transfer of ownership of the related Mortgage to the Purchaser or
its designee.
"Assignment of Proprietary Lease": With respect to a
Cooperative Loan, an assignment of the Proprietary Lease sufficient
under the laws of the jurisdiction wherein the related Cooperative
Unit is located to reflect the assignment of such Proprietary
Lease.
"Assignment and Recognition Agreement": With respect to a
Cooperative Loan, an assignment of the Recognition Agreement
sufficient under the laws of the jurisdiction wherein the related
Cooperative Unit is located to reflect the assignment of such
Recognition Agreement.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (11
U.S.C. §§ 101-1330), as amended, modified, or
supplemented from time to time, and any successor statute, and all
rules and regulations issued or promulgated in connection
therewith.
"Business Day": Any day other than (i) a Saturday or
Sunday, or (ii) a day on which the Federal Reserve is closed or
(iii) a day on which banking and savings and loan institutions in
the State of New York, the State of New Jersey, the State of
Maryland and the State of Minnesota are authorized or obligated by
law or executive order to be closed.
"Certificateholder or Holder": The person in whose name a
Certificate is registered in the Certificate Register.
"Closing Date": April 26, 2007.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The trust account or accounts
created and maintained pursuant to Section 5.04 for the
benefit of the Certificateholders and designated "PHH Mortgage
Corporation, as servicer for the Purchaser pursuant to the Mortgage
Loan Purchase and Servicing Agreement, dated as of April
1, 2007, and various mortgagors" The Collection Account
must be an Eligible Account.
"Commission": The United States Securities and Exchange
Commission.
"Condemnation Proceeds": All awards or settlements in
respect of a taking of an entire Mortgaged Property or a part
thereof by exercise of the power of eminent domain or
condemnation.
"Consent": A document executed by the Cooperative
Corporation (i) consenting to the sale of the Cooperative Unit to
the Mortgagor and (ii) certifying that all maintenance charges
relating to the Cooperative Unit have been paid.
"Cooperative Corporation": With respect to any Cooperative
Loan, the cooperative apartment corporation that holds legal title
to the related Cooperative Project and grants occupancy rights to
units therein to stockholders through Proprietary Leases or similar
arrangements.
"Cooperative Lien Search": A search for (a) federal tax
liens, mechanics’ liens, lis pendens, judgments of record or
otherwise against (i) the Cooperative Corporation and (ii) the
seller of the Cooperative Unit, (b) filings of Financing Statements
and (c) the deed of the Cooperative Project into the Cooperative
Corporation.
"Cooperative Loan": A Mortgage Loan that is secured by a
first lien on and a perfected security interest in Cooperative
Shares and the related Proprietary Lease granting exclusive rights
to occupy the related Cooperative Unit in the building owned by the
related Cooperative Corporation.
"Cooperative Pledge Agreement": The specific agreement
creating a first lien on and pledge of the Cooperative Shares and
the appurtenant Proprietary Lease securing a Cooperative Loan.
"Cooperative Project": With respect to any Cooperative
Loan, all real property and improvements thereto and rights therein
and thereto owned by a Cooperative Corporation including without
limitation the land, separate dwelling units and all common
elements.
"Cooperative Shares": With respect to any Cooperative
Loan, the shares of stock issued by a Cooperative Corporation and
allocated to a Cooperative Unit and represented by stock
certificates.
"Cooperative Unit": With respect to any Cooperative Loan,
a specific unit in a Cooperative Project.
"Custodian": Wells Fargo Bank, N.A., or any successor
thereto, as custodian pursuant to the Custodial Agreement.
"Custodial Agreement": The Custodial Agreement, dated as of
April 1, 2007, among Wells Fargo, as custodian, the Trustee and the
Servicer.
"Cut-off Date": April 1, 2007.
"Defective Mortgage Loan": As defined in Section
3.04.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced with a Qualified Substitute Mortgage Loan.
"Depositor": The Purchaser.
"Determination Date": The 16th day of each calendar month,
commencing on the 16 th day of the month following
the Closing Date, or, if such 16th day is not a Business Day, the
Business Day immediately preceding such 16th day.
"Due Date": With respect to any Mortgage Loan, the day of
the month on which each Monthly Payment is due thereon, exclusive
of any days of grace.
"Due Period": With respect to each Remittance Date, the
period commencing on the second day of the month immediately
preceding the month of such Remittance Date and ending on the first
day of the month of such 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 of which) are
rated A-1 by S&P, Prime-1 by Moody’s or F1 by Fitch (or a
comparable rating if another rating agency is specified by the
Securities Administrator 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.
"Environmental Assessment": A "Phase I" environmental
assessment of a Mortgaged Property prepared by an Independent
Person who regularly conducts environmental assessments and who has
any necessary license(s) required by applicable law and has five
years experience in conducting environmental assessments.
"Environmental Conditions Precedent to Foreclosure": As
defined in Section 5.13.
"Environmental Laws": All federal, state, and local
statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees or other governmental restrictions relating to the
environment or to emissions, discharges or releases of pollutants,
contaminants or industrial, toxic or hazardous substances or wastes
into the environment, including ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or industrial,
toxic or hazardous substances or wastes or the cleanup or other
remediation thereof.
"Escrow Account": The separate Eligible Account or
accounts created and maintained pursuant to Section 5.06
which shall be entitled "PHH Mortgage Corporation, as servicer for
the Purchaser pursuant to the Mortgage Loan Purchase
and Servicing Agreement, dated as of April 1, 2007, and
various mortgagors."
"Escrow Payments": The amounts constituting ground rents,
taxes, assessments, mortgage insurance premiums, fire and hazard
insurance premiums and other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to any Mortgage Loan.
"Estoppel Letter": A document executed by the Cooperative
Corporation certifying, with respect to a Cooperative Unit, (i) the
appurtenant Proprietary Lease will be in full force and effect as
of the date of issuance thereof, (ii) the related Stock Certificate
was registered in the Mortgagor’s name and the Cooperative
Corporation has not been notified of any lien upon, pledge of, levy
of execution on or disposition of such Stock Certificate, and (iii)
the Mortgagor is not in default under the appurtenant Proprietary
Lease and all charges due the Cooperative Corporation have been
paid.
"Event of Default": Any one of the conditions or
circumstances enumerated in Section 10.01.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Fannie Mae": The Federal National Mortgage Association or
any successor organization.
"Fannie Mae Guide": The Fannie Mae Selling Guide and
Servicing Guide, collectively, in effect on and after the Closing
Date.
"FDIC": The Federal Deposit Insurance Corporation or any
successor organization.
"Fidelity Bond": A fidelity bond to be maintained by the
Servicer pursuant to Section 5.12.
"Financing Statement": A financing statement in the form
of a UCC-1 filed pursuant to the Uniform Commercial Code to perfect
a security interest in the Cooperative Shares and Pledge
Instruments.
"Financing Statement Change": A financing statement in the
form of a UCC-3 filed to continue, terminate, release, assign or
amend an existing Financing Statement.
"Foreclosure Profits": As to any Mortgage Loan, the
excess, if any, of Liquidation Proceeds, Insurance Proceeds and
proceeds from any REO Disposition (net of all amounts reimbursable
therefrom pursuant to Section 5.13, Section 5.14 and Section 5.15)
in respect of each Mortgage Loan or REO Property for which a Cash
Liquidation or REO Disposition occurred in the related prepayment
period over the sum of the Unpaid Principal Balance of such
Mortgage Loan or REO Property (determined, in the case of an REO
Disposition, in accordance with Section 5.13, Section 5.14 and
Section 5.15) plus accrued and unpaid interest at the Mortgage Rate
on such Unpaid Principal Balance from the Due Date to which
interest was last paid by the Mortgagor to the first day of the
month following the month in which such Cash Liquidation or REO
Disposition occurred.
"Freddie Mac": The Federal Home Loan Mortgage Corporation
or any successor organization.
"Freddie Mac Servicing Guide": The Freddie Mac
Sellers’ and Servicers’ Guide in effect on and after
the Closing Date.
"Gross Margin": With respect to each ARM Loan, the fixed
percentage added to the Index on each Rate Adjustment Date, as
specified in each related Mortgage Note and listed in the Mortgage
Loan Schedule.
"HUD": The United States Department of Housing and Urban
Development, or any successor thereto and including the Federal
Housing Commissioner and the Secretary of Housing and Urban
Development where appropriate under the FHA Regulations.
"Independent": With respect to any specified Person, such
Person who: (i) does not have any direct financial interest
or any material indirect financial interest in the applicable
Mortgagor, the Sellers, the Purchaser, or their Affiliates; and (b)
is not connected with the applicable Mortgagor, the Sellers, the
Purchaser, or their respective Affiliates as an officer, employee,
promoter, underwriter, trustee, member, partner, shareholder,
director, or Person performing similar functions.
"Index": With respect to each ARM Loan, on each Rate
Adjustment Date, the applicable rate index set forth on the
Mortgage Loan Schedule, which shall be an index described on such
Mortgage Loan Schedule.
"Insolvency Proceeding": With respect to any Person:
(i) any case, action, or proceeding with respect to such
Person before any court or other governmental authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up, or relief of debtors; or (ii) any general
assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of
the creditors generally of such Person or any substantial portion
of such Person’s creditors; in any case undertaken under
federal, state or foreign law, including the Bankruptcy Code.
"Insurance Proceeds": Proceeds of any Primary Insurance
Policy, title policy, hazard policy or other insurance policy
covering a Mortgage Loan, if any, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing mortgage
loans held for its own or its Affiliates’ account or managed
by it for third-party institutional investors.
"Legal Documents": Those documents, comprising part of the
Mortgage File, set forth in Schedule B-1 of this Agreement.
"Lender-Paid Mortgage Insurance Rate": With respect to any
Mortgage Loan, the Lender-Paid Mortgage Insurance Rate for any
"lender-paid"
Primary Insurance Policy shall be a per annum rate equal to the
percentage indicated on the Mortgage Loan Schedule.
"Liquidation Proceeds": Amounts, other than Insurance
Proceeds and Condemnation Proceeds, received by the Servicer 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 an REO Property
in accordance with the provisions hereof.
"Loan-to-Value Ratio" or "LTV": With respect to any
Mortgage Loan, the original principal balance of such Mortgage Loan
divided by the Appraised Value of the related Mortgaged Property,
subject to any applicable law for calculating the LTV.
"MAI Appraiser": With respect to any real property, a
member of the American Institute of Real Estate Appraisers with a
minimum of 5 years of experience appraising real property of a type
similar to the real property being appraised and located in the
same geographical area as the real property being appraised.
"Master Servicer": Wells Fargo Bank, N.A. or it successors
and assigns or any successor master servicer appointed under the
Pooling and Servicing Agreement.
"Maximum Rate": With respect to each ARM Loan, the rate
per annum set forth in the related Mortgage Note as the maximum
Note Rate thereunder. The Maximum Rate as to each ARM Loan is
set forth on the related Mortgage Loan Schedule.
"MERS": Mortgage Electronic Registration Systems, Inc., a
Delaware corporation, or any successor in interest thereto.
"MERS Eligible Mortgage Loan": Any Mortgage Loan that
under applicable law and investor requirements is recordable in the
name of MERS in the jurisdiction in which the related Mortgaged
Property is located.
"MERS Mortgage Loan": Any Mortgage Loan as to which the
related Mortgage, or an Assignment, has been recorded in the name
of MERS, as agent for the holder from time to time of the Mortgage
Note.
"Minimum Rate": With respect to each ARM Loan, the rate
per annum set forth in the related Mortgage Note as the minimum
Note Rate thereunder. The Minimum Rate as to each ARM Loan is
set forth on the related Mortgage Loan Schedule. The floor in
all cases will never be less than the margin.
"Monthly Advance": The aggregate amount of the advances
made by the Servicer on any Remittance Date pursuant to and as more
fully described in Section 6.03.
"Monthly Payment": The scheduled monthly payment of
principal and interest on a Mortgage Loan which is payable by a
Mortgagor under the related Mortgage Note.
"Mortgage": The mortgage, deed of trust or other
instrument securing a Mortgage Note, which creates a first lien on
either (i) with respect to a Mortgage Loan other than a Cooperative
Loan, an unsubordinated estate in fee simple in real property or
(ii) with respect to a Cooperative Loan, the Proprietary Lease and
related Cooperative Shares, which in either case secures the
Mortgage Note.
"Mortgaged Property": With respect to a Mortgage Loan, the
underlying real property securing repayment of a Mortgage Note,
consisting of any one of the following: (i) a one-family dwelling,
(ii) a two- to four-family dwelling, (iii) a one-family dwelling
unit in a FNMA eligible condominium project, or (iv) a one-family
dwelling in a planned unit development, none of which is
manufactured housing, a commercial property, an agricultural
property or a mixed use property.
"Mortgage File": With respect to a particular Mortgage
Loan, those origination and servicing documents, escrow documents,
and other documents as are specified on Schedule B-1 to this
Agreement. These documents shall be stored in a secure
manner using paper or electronic storage.
"Mortgage Loan": The Mortgage Loans subject to this
Agreement as identified on the Mortgage Loan Schedule.
"Mortgage Loan Schedule": The list of Mortgage Loans
identified on Schedule A hereto.
"Mortgage Note": The note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
"Mortgagor": The obligor on a Mortgage Note.
"Non-recoverable Advance": As of any date of
determination, any Monthly Advance or Servicing Advance previously
made or any Monthly Advance or Servicing Advance proposed to be
made in respect of a Mortgage Loan which, in the good faith
judgment of the Servicer and in accordance with the servicing
standard set forth in Section 5.01, will not or, in the case
of a proposed advance, would not be ultimately recoverable pursuant
to Section 5.05 (3) or (4) hereof. The determination by the
Servicer that it has made a Non-recoverable Advance or that any
proposed advance would constitute a Non-recoverable Advance shall
be evidenced by an Officer's Certificate satisfying the
requirements of Section 6.04 hereof and delivered to the
Purchaser on or before the Determination Date in any month.
"Note Rate": With respect to any Mortgage Loan at any time
any determination thereof is to be made, the annual rate at which
interest accrues thereon.
"Officers’ Certificate": A certificate signed by (i)
the President or a Vice President and (ii) the Treasurer or the
Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Servicer, and delivered by the Servicer 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.
"Payment Adjustment Date": The date on which Monthly
Payments shall be adjusted. Payment Adjustment Date shall
occur on the date which is eleven months from the first payment
date for the Mortgage Loan, unless otherwise specified in the
Mortgage Note, and on each anniversary of such first Payment
Adjustment Date.
"Payoff": With respect to any Mortgage Loan, any payment
or recovery received in advance of the last scheduled Due Date of
such Mortgage Loan, which payment or recovery consists of principal
in an amount equal to the outstanding principal balance of such
Mortgage Loan, all accrued and unpaid prepayment penalties,
premiums, and/or interest with respect thereto, and all other
unpaid sums due with respect to such Mortgage Loan.
"Periodic Rate Cap": With respect to each ARM Loan, the
maximum or minimum permissible percentage increases and decreases
in the Note Rate on any Rate Adjustment Date determined in
accordance with the related Mortgage Note.
"Permitted Investments": Investments that mature, unless
payable on demand, not later than the Business Day preceding the
related Remittance Date; provided that such investments
shall only consist of the following:
(i) direct obligations of, or obligations fully guaranteed
as to full and timely payment of principal and interest by, the
United States or any agency or instrumentality thereof, provided
such obligations are backed by the full faith and credit of the
United States;
(ii) repurchase obligations (the collateral for which is
held by a third party) with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as a
principal) rated "A" or higher by Moody’s, "A-1" or higher by
S&P and "F-1" or higher by Fitch, provided that the long-term
unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in one of
its two highest rating categories;
(iii) certificates of deposit, time deposits and
bankers’ acceptances of any bank or trust company
incorporated under the laws of the United States or any state,
provided that the long-term unsecured debt obligations of such bank
or trust company (or, in the case of the principal depository
institution of a depository institution holding company, the
long-term unsecured debt obligations of the depository institution
holding company) at the date of acquisition thereof have been rated
by each Rating Agency in one of its two highest rating
categories;
(iv) commercial paper (having original maturities of not
more than 365 days) of any corporation incorporated under the laws
of the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in its highest
rating category; and
(v) any other demand, money market or time deposit account
or obligation, or interest-bearing or other security or investment,
acceptable to the Purchaser (such acceptance evidenced in
writing);
provided further that "Permitted Investments"
shall not include any instrument described hereunder which
evidences either the right to receive (a) only interest with
respect to the obligations underlying such instrument or (b) both
principal and interest payments derived from obligations underlying
such instrument and the interest and principal payments with
respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations.
"Person": Any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"PHH Guide": As defined in paragraph 2 of the Preliminary
Statement to this Agreement.
"Pledge Instruments": With respect to each Cooperative
Loan, the Stock Power, the Assignment of the Proprietary Lease, the
Assignment of the Mortgage Note and the Cooperative Pledge
Agreement.
"Prepaid Monthly Payment": Any Monthly Payment received
prior to its scheduled Due Date and which is intended to be applied
to a Mortgage Loan on its scheduled Due Date.
"Prepayment Interest Shortfall Amount": With respect to
any Mortgage Loan that was subject to a voluntary (not including
discounted payoffs and short sales) Principal Prepayment in full or
in part during any Due Period, which Principal Prepayment was
applied to such Mortgage Loan prior to such Mortgage Loan’s
Due Date in such Due Period, the amount of interest (net of the
related Servicing Fee for Principal Prepayments in full only) that
would have accrued on the amount of such Principal Prepayment
during the period commencing on the date as of which such Principal
Prepayment was applied to such Mortgage Loan and ending on the day
immediately preceding such Due Date, inclusive.
"Primary Insurance Policy": Each primary policy of
mortgage insurance in effect with respect to a Mortgage Loan and as
so indicated on the Mortgage Loan Schedule, or any replacement
policy therefor obtained by the Servicer pursuant to Section
5.08.
"Principal Prepayment": Any payment or other recovery of
principal on a Mortgage Loan (including a Payoff), other than a
Monthly Payment or a Prepaid Monthly Payment 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 and
which is intended to reduce the principal balance of the Mortgage
Loan.
"Principal Prepayment Period": The Due Period preceding
the related Remittance Date.
"Proprietary Lease": The lease on a Cooperative Unit
evidencing the possessory interest of the owner of the Cooperative
Shares in such Cooperative Unit.
"Purchase Price": $596,478,385.
"Purchaser": Deutsche Alt-A Securities, Inc.
"Qualified Mortgage Insurer": A mortgage guaranty
insurance company duly qualified as such under the laws of the
states in which the Mortgaged Properties are located if such
qualification is necessary to issue the applicable insurance policy
or bond, duly authorized and licensed in such states to transact
the applicable insurance business and to write the insurance
provided, and approved as an insurer by Fannie Mae or Freddie Mac
(or with a different rating as may be required by a Rating Agency
in connection with a Securitization Transaction in order to achieve
the desired ratings for the securities to be issued).
"Qualified Correspondent": Any Person from which the
Sellers purchased Mortgage Loans, provided that the following
conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement among the Sellers and such Person that
contemplated that such Person would underwrite mortgage loans from
time to time, for sale to the Sellers, in accordance with
underwriting guidelines designated by the Sellers ("Designated
Guidelines") or guidelines that do not vary materially from such
Designated Guidelines; (ii) such Mortgage Loans were in fact
underwritten as described in clause (i) above and were acquired by
the Sellers within one hundred eighty (180) days after origination;
(iii) either (x) the Designated Guidelines were, at the time such
Mortgage Loans were originated, used by the Sellers in origination
of mortgage loans of the same type as the Mortgage Loans for the
Sellers’ own account or (y) the Designated Guidelines were,
at the time such Mortgage Loans were underwritten, designated by
the Sellers on a consistent basis for use by lenders in originating
mortgage loans to be purchased by the Sellers; and (iv) the Sellers
employed, at the time such Mortgage Loans were acquired by the
Sellers, pre-purchase or post-purchase quality assurance procedures
(which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it
purchased mortgage loans properly applied the underwriting criteria
designated by the Sellers.
"Qualified Substitute Mortgage Loan": A Mortgage Loan
substituted by a Seller for a Deleted Mortgage Loan which must, on
the date of such substitution, (i) have an outstanding principal
balance, after deduction of all scheduled payments due and received
in the month of substitution (or in the case of a substitution of
more than one Mortgage Loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Unpaid Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a
remaining term to maturity not greater than (and not less than)
that of the Deleted Mortgage Loan, (iii) have a Note Rate not less
than (and not more than one percentage point greater than) the Note
Rate of the Deleted Mortgage Loan, (iv) with respect to each ARM
Loan, have a Minimum Rate not less than that of the Deleted
Mortgage Loan, (v) with respect to each ARM Loan, have a Maximum
Rate not less than that of the Deleted Mortgage Loan and not more
than two (2) percentage points above that of the Deleted Mortgage
Loan, (vi) with respect to each ARM Mortgage Loan, have a Gross
Margin not less than that of the Deleted Mortgage Loan, (vii) with
respect to each ARM Loan, have a Periodic Rate Cap equal to that of
the Deleted Mortgage Loan, (viii) have a Loan-to-Value Ratio at the
time of substitution equal to or less than the Loan-to-Value Ratio
of the Deleted Mortgage Loan at the time of substitution, (ix) with
respect to each ARM Loan, have the same Rate Adjustment Date as
that of the Deleted Mortgage Loan, (x) with respect to each ARM
Loan, have the same Index as that of the Deleted Mortgage Loan,
(xi) comply as of the date of substitution with each representation
and warranty set forth in Sections 3.01, 3.02 and 3.03,
(xii) be in the same credit grade category as the Deleted Mortgage
Loan, (xiii) have the same prepayment penalty term and (xiv)
be covered under a Primary Insurance Policy if such Qualified
Substitute Mortgage Loan has a Loan-to-Value Ratio in excess of 80%
and the Deleted Mortgage Loan was covered under a Primary Insurance
Policy. 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 Note Rates described in clause
(iii) hereof shall be determined on the basis of weighted average
Note Rates and shall be satisfied as to each such mortgage loan,
the terms described in clause (ii) shall be determined on the basis
of weighted average remaining terms to maturity, the Loan-to-Value
Ratios described in clause (viii) 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 (xi) hereof must be satisfied as to each
Qualified Substitute Mortgage Loan or in the aggregate, as the case
may be. In addition, the substitution of more than one
Mortgage Loan pursuant to the previous sentence shall be subject to
the Purchaser’s approval in its sole discretion.
"Rate Adjustment Date": With respect to each ARM Loan, the
date on which the Note Rate adjusts.
"Rating Agency": Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Moody’s
Investors Service, Inc., and Fitch, Inc.
"Record Date": The close of business of the first Business
Day of the month of the related Remittance Date.
"Refinanced Mortgage Loan": A Mortgage Loan that was made
to a Mortgagor who owned the Mortgaged Property prior to the
origination of such Mortgage Loan and the proceeds of which were
used in whole or part to satisfy an existing mortgage.
"Regulation AB": Subpart 229.1100 - Asset Backed
Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have
been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70
Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff
from time to time.
"REMIC": A "real estate mortgage investment conduit"
within the meaning of Section 860D of the Internal Revenue Code or
any similar tax vehicle providing for the pooling of assets (such
as a Financial Asset Security Investment Trust).
"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 18th day of each calendar month,
commencing on the 18th day of the month following the Closing Date,
or, if such 18th day is not a Business Day, then the next Business
Day immediately preceding such 18th day.
"Remittance Rate": With respect to each Mortgage Loan, the
related Note Rate minus the Servicing Fee Rate.
"REO Disposition": The final sale by the Servicer of any
REO Property.
"REO Disposition Proceeds": All amounts received with
respect to any REO Disposition.
"REO Property": A Mortgaged Property acquired by the
Servicer on behalf of the Purchaser as described in Section
5.14.
"Repurchase Price": As to (a) any Defective Mortgage Loan
required to be repurchased hereunder with respect to which a breach
occurred or (b) any Mortgage Loan required to be repurchased
pursuant to Section 3.04 and/or Section 7.02, an
amount equal to the Unpaid Principal Balance of such Mortgage Loan
at the time of repurchase; plus (2) interest on such
Mortgage Loan at the applicable Note Rate from the last date
through which interest has been paid and distributed to the
Purchaser hereunder to the date of repurchase; minus (3) any
amounts received in respect of such Defective Mortgage Loan which
are being held in the Collection Account for future remittance.
"Scheduled Principal Balance": With respect to any
Mortgage Loan, (i) the outstanding principal balance as of the
Closing Date after application of principal payments due on or
before such date whether or not received, minus (ii) all amounts
previously remitted to the Purchaser with respect to such Mortgage
Loan representing (a) payments or other recoveries of principal, or
(b) advances of principal made pursuant to Section 6.03.
"Securities Act": The Securities Act of 1933, as
amended.
"Securitization Transaction": The sale or other transfer
of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with the issuance of the
Certificates.
"Sellers": PHH Mortgage Corporation, a New Jersey
corporation and Bishop’s Gate Residential Mortgage Trust, a
Delaware business trust, each solely in its capacity as a Seller
hereunder and in no other capacity, or their successors in interest
or any successor under this Agreement appointed as herein
provided.
"Servicer": PHH Mortgage Corporation, a New Jersey
corporation, solely in its capacity as a servicer hereunder, and
not as a Seller hereunder, and its successors and assigns.
"Servicing Advances": All "out of pocket" costs and
expenses that are customary, reasonable and necessary which are
incurred by the Servicer in the performance of its servicing
obligations hereunder, including (without duplication) (i)
reasonable attorneys’ fees and (ii) the cost of (a) the
preservation, restoration and protection of the Mortgaged Property,
(b) any enforcement or judicial proceedings, including
foreclosures, (c) the servicing, management and liquidation of any
Specially Serviced Mortgaged Loans and/or any REO Property, and (d)
compliance with the Servicer’s obligations under
Section 5.08.
"Servicing Criteria": The "servicing criteria" set forth
in Item 1122(d) of Regulation AB, as such may be amended from time
to time.
"Servicing Event": Any of the following events with
respect to any Mortgage Loan: (i) any Monthly Payment being
more than 60 days delinquent; (ii) any filing of an Insolvency
Proceeding by or on behalf of the related Mortgagor, any consent by
or on behalf of the related Mortgagor to the filing of an
Insolvency Proceeding against such Mortgagor, or any admission by
or on behalf of such Mortgagor of its inability to pay such
Person’s debts generally as the same become due; (iii) any
filing of an Insolvency Proceeding against the related Mortgagor
that remains undismissed or unstayed for a period of 60 days after
the filing thereof; (iv) any issuance of any attachment or
execution against, or any appointment of a conservator, receiver or
liquidator with respect to, all or substantially all of the assets
of the related Mortgagor or with respect to any Mortgaged Property;
(v) any receipt by the Servicer of notice of the foreclosure or
proposed foreclosure of any other lien on the related Mortgaged
Property; (vi) any proposal of a material modification (as
reasonably determined by the Seller) to such Mortgage Loan due to a
default or imminent default under such Mortgage Loan; or (vii) in
the reasonable judgment of the Servicer, the occurrence, or likely
occurrence within 60 days, of a payment default with respect to
such Mortgage Loan that is likely to remain uncured by the related
Mortgagor within 60 days thereafter.
"Servicing Fee": The annual fee, payable monthly to the
Servicer out of the interest portion of the Monthly Payment and/or
Payoff actually received on each Mortgage Loan. The Servicing
Fee with respect to each Mortgage Loan for any calendar month (or a
portion thereof) shall be 1/12 of the product of (i) the Unpaid
Principal Balance of the Mortgage Loan and (ii) the Servicing Fee
Rate applicable to such Mortgage Loan.
"Servicing Fee Rate": Unless otherwise specified on the
Mortgage Loan Schedule, (i) with respect to any ARM Loan, 0.375%
per annum; provided that, prior to the first Rate Adjustment
Date with respect to any such Mortgage Loan, such rate may be, at
the Servicer’s option, not less than 0.25% per annum; and
(ii) with respect to any Mortgage Loan other than an ARM Loan,
0.25% per annum.
"Servicing Officer": Any officer of the Servicer involved
in, or responsible for, the administration and servicing of the
Mortgage Loans whose name appears on a written list of servicing
officers furnished by the Servicer to the Purchaser upon request
therefor by the Purchaser, as such list may from time to time be
amended.
"Specially Serviced Mortgage Loan": A Mortgage Loan as to
which a Servicing Event has occurred and is continuing.
"Stock Certificate": With respect to a Cooperative Loan,
the certificates evidencing ownership of the Cooperative Shares
issued by the Cooperative Corporation.
"Stock Power": With respect to a Cooperative Loan, an
assignment of the Stock Certificate or an assignment of the
Cooperative Shares issued by the Cooperative Corporation.
"Subcontractor": Any vendor, subcontractor or other Person
that is not responsible for the overall servicing (as "servicing"
is commonly understood by participants in the mortgage-backed
securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with
respect to Mortgage Loans under the direction or authority of the
Servicer or a Subservicer.
"Subservicer": Any Person that services Mortgage Loans on
behalf of the Servicer or any Subservicer and is responsible for
the performance (whether directly or through Subservicers or
Subcontractors) of a substantial portion of the material servicing
functions required to be performed by the Servicer under this
Agreement that are identified in Item 1122(d) of Regulation AB.
"Third-Party Originator": Each Person, other than a
Qualified Correspondent, that originated Mortgage Loans acquired by
the Sellers.
"Trustee": HSBC Bank USA, National Association, a national
banking association, or its successor in interest, or any successor
trustee appointed under the Pooling and Servicing Agreement.
"Uniform Commercial Code": The Uniform Commercial Code as
in effect on the date hereof in the State of New York; provided
that if by reason of mandatory provisions of law, the perfection or
the effect of perfection or non-perfection of the security interest
in any collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than New York, "Uniform
Commercial Code" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or
non-perfection.
"Unpaid Principal Balance": With respect to any Mortgage
Loan, at any time, the actual outstanding principal balance then
payable by the Mortgagor under the terms of the related Mortgage
Note.
ARTICLE II:
SALE AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE
FILES; BOOKS AND RECORDS; DELIVERY OF MORTGAGE LOAN
DOCUMENTS
Section 2.01
Sale and Conveyance of Mortgage Loans
Seller agrees to sell and Purchaser agrees to purchase those
certain Mortgage Loans identified on the Mortgage Loan Schedule, at
the Purchase Price and on the terms set forth herein.
The closing shall, at Purchaser’s option be either: by
telephone, confirmed by letter or wire as the parties shall agree;
or conducted in person at such place as the parties shall agree. On
the Closing Date and subject to the terms and conditions of this
Agreement, each Seller will sell, transfer, assign, set over and
convey to the Purchaser, without recourse except as set forth in
this Agreement, and the Purchaser will purchase, all of the right,
title and interest of the applicable Seller in and to the Mortgage
Loans.
Examination of the Mortgage Files may be made by Purchaser or
its designee as follows. No later than 5 Business Days prior to the
Closing Date, Seller will deliver to Purchaser or its custodian,
Legal Documents required pursuant to Schedule B-1. Purchaser may,
at its option and without notice to Seller, purchase all or part of
the Mortgage Loans without conducting any partial or complete
examination. The fact that Purchaser has conducted or has
failed to conduct any partial or complete examination of the
Mortgage Loan files shall not affect Purchaser’s rights to
demand repurchase, substitution or other relief as provided
herein.
The Purchaser shall have the opportunity to conduct a corporate
due diligence of the Sellers, including but not limited to, on site
review of the Sellers’ facilities and discussions with either
Seller’s management. The Purchaser may conduct such review
prior to the Closing Date.
On the Closing Date, subject to the terms herein, the Purchaser
will pay to the Sellers by 4:00 p.m. Eastern Standard Time by wire
transfer of immediately available funds, the Purchase Price,
together with interest, if any, accrued from the Cut-off Date
through the day immediately preceding the Closing Date, according
to the instructions to be provided, respectively, by PHH Mortgage
and Bishop’s Gate.
The Purchaser shall be entitled to all scheduled principal due
after the Cut-off Date, all other recoveries of principal collected
after the Cut-off Date and all payments of interest on the Mortgage
Loans (minus that portion of any such payment which is allocable to
the period prior to the Cut-off Date). Notwithstanding the
foregoing, on the first Remittance Date after the Closing Date the
Purchaser shall be entitled to receive the interest accrued from
the Cut-off Date through the day immediately preceding the Closing
Date. The principal balance of each Mortgage Loan as of the
Cut-off Date is determined after application of payments of
principal due on or before the Cut-off Date whether or not
collected. Therefore, payments of scheduled principal and interest
prepaid for a due date beyond the Cut-off Date shall not be applied
to the principal balance as of the Cut-off Date. Such prepaid
amounts shall be the property of Purchaser. Seller shall hold any
such prepaid amounts for the benefit of the Purchaser for
subsequent remittance by the Sellers to the Purchaser. All
scheduled payments of principal due on or before the Cut-off Date
and collected by the Servicer or the Sellers after the Cut-off Date
shall belong to the applicable Seller.
Section 2.02
Possession of Mortgage Files
Upon the sale of any Mortgage Loan, the ownership of such
Mortgage Loan, including the Mortgage Note, the Mortgage, the
contents of the related Mortgage File and all rights, benefits,
payments, proceeds and obligations arising therefrom or in
connection therewith, shall then be vested in the Purchaser, and
the ownership of all records and documents with respect to such
Mortgage Loan prepared by or which come into the possession of each
Seller shall immediately vest in the Purchaser and, to the extent
retained by either Seller, shall be retained and maintained, in
trust, by the applicable Seller at the will of the Purchaser in a
custodial capacity only. The books and records of the applicable
Seller shall clearly reflect the sale of the related Mortgage Loans
to the Purchaser.
Any documents released to the Servicer in connection with the
foreclosure or servicing of any Mortgage Loan shall be held by the
Servicer in trust for the benefit of the Purchaser in accordance
with this Section 2.02. Such Person shall return to
the Purchaser such documents when the Servicer’s need
therefor in connection with such foreclosure or servicing no longer
exists (unless sooner requested by the Purchaser); provided
that, if such Mortgage Loan is liquidated, then, upon the delivery
by the Servicer to the Purchaser of a request for the release of
such documents and a certificate certifying as to such liquidation,
the Purchaser shall promptly release and, to the extent necessary,
deliver to the Servicer such documents.
Section 2.03
Books and Records
The sale by each Seller of its Mortgage Loans shall be reflected
on the applicable Seller’s balance sheet and other financial
statements as a sale of assets by the applicable Seller. Each
Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for the Mortgage Loans it
conveyed to the Purchaser which shall be clearly marked to reflect
the sale of each Mortgage Loan to the Purchaser and the ownership
of each Mortgage Loan by the Purchaser.
Section 2.04
Defective Documents; Delivery of Mortgage Loan Documents
If, subsequent to the Closing Date, the Purchaser or either
Seller finds any document or documents constituting a part of a
Mortgage File to be defective or missing in any material respect
(in this Section 2.04, a "Defect"), the party discovering such
Defect shall promptly so notify the other parties. If the
Defect pertains to the Mortgage Note or the Mortgage, then the
applicable Seller shall have a period of 60 days within which to
correct or cure any such defect after the earlier of such
Seller’s discovery of same or such Seller being notified of
same. If such Defect can ultimately be cured but is not
reasonably expected to be cured within such 60 day period, such
Seller shall have such additional time as is reasonably determined
by the Purchaser to cure or correct such Defect provided that such
Seller has commenced curing or correcting such Defect and is
diligently pursuing same. If the Defect pertains to any other
document constituting a part of a Mortgage File, then such Seller
shall have a period of 60 days within which to correct or cure any
such Defect after the earlier of such Seller’s discovery of
same or such Seller being notified of same. If such Defect
can ultimately be cured but is not reasonably expected to be cured
within the 60 day period, then such Seller shall have such
additional time as is reasonably determined by the Purchaser to
cure or correct such Defect provided such Seller has commenced
curing or correcting such Defect and is diligently pursuing same.
PHH Mortgage hereby covenants and agrees that, if any
material defect cannot be corrected or cured, the related Mortgage
Loan shall automatically constitute, upon the expiration of the
applicable cure period described above and without any further
action by any other party, a Defective Mortgage Loan, whereupon PHH
Mortgage shall repurchase such Mortgage Loan within 5 Business Days
by paying to the Purchaser the Repurchase Price therefor in
accordance with Section 3.04 (it being understood that any
cure period set forth in Section 3.04 shall be deemed to have
expired).
The applicable Seller will, with respect to each Mortgage
Loan, deliver and release to the Purchaser the Legal Documents
as set forth in Section 2.01. If the applicable Seller cannot
deliver an original Mortgage with evidence of recording thereon,
original assumption, modification and substitution agreements with
evidence of recording thereon or an original intervening assignment
with evidence of recording thereon within the applicable time
periods, then such Seller shall deliver to the Purchaser, or the
Purchaser’s custodian, such original Mortgages and original
intervening assignments with evidence of recording indicated
thereon upon receipt thereof from the public recording official,
except in cases where the original Mortgage or original intervening
assignments are retained permanently by the recording office, in
which case, such Seller shall deliver a copy of such Mortgage or
intervening assignment, as the case may be, certified to be a true
and complete copy of the recorded original thereof. If the
applicable Seller cannot deliver the original security instrument
or if an original intervening assignment has been lost, then the
applicable Seller will deliver a copy of such security instrument
or intervening assignment, certified by the local public recording
official. If the original title policy has been lost, the
applicable Seller will deliver a duplicate original title policy.
If the original Mortgage was not delivered pursuant to the
preceding paragraph, then the applicable Seller shall use its best
efforts to promptly secure the delivery of such originals and shall
cause such originals to be delivered to the Purchaser, or the
Purchaser’s custodian, promptly upon receipt thereof.
Notwithstanding the foregoing, if the original Mortgage,
original assumption, modification, and substitution agreements, the
original of any intervening assignment or the original policy of
title insurance is not so delivered to the Purchaser or the
Custodian, within 120 days following the Closing Date, then,
upon written notice by the Purchaser or the Custodian to PHH
Mortgage, the Purchaser or the Custodian may, in their sole
discretion, then elect (by providing written notice to PHH
Mortgage) to treat such Mortgage Loan as a Defective Mortgage Loan,
whereupon PHH Mortgage shall repurchase such Mortgage Loan by
paying to the Purchaser the Repurchase Price therefor in accordance
with Section 3.04 (it being understood that any cure period
set forth in Section 3.04 shall be deemed to have expired).
It is understood that from time to time certain local
recording offices become backlogged with document volume. It is
agreed that the Seller will provide an Officer’s Certificate
to document that the Seller has performed all necessary tasks to
insure delivery of the required documentation within 180 days and
the delay beyond 180 is caused by the backlog. If the delay
exceeds 360 days, regardless of the backlog, the Purchaser or the
Custodian may elect to collect the documents with its own resources
with the reasonable cost and expense to be borne by the Seller. The
fact that the Purchaser or the Custodian has conducted or failed to
conduct any partial or complete examination of the Mortgage Files
shall not affect its right to demand repurchase or any other
remedies provided in this Agreement.
At the Purchaser’s or the Custodian’s request, the
Assignments shall be promptly recorded in the name of the Purchaser
or in the name of a Person designated by the Purchaser in all
appropriate public offices for real property records. If any
such Assignment is lost or returned unrecorded because of a defect
therein, then the applicable Seller shall promptly prepare a
substitute Assignment to cure such defect and thereafter cause each
such Assignment to be duly recorded. All recording fees
related to such a one-time recordation of the Assignments to or by
a Seller shall be paid by the applicable Seller.
Section 2.05
Transfer of Mortgage Loans
Subject to the provisions of this Section 2.05, the
Purchaser shall assign the Mortgage Loans and its interest under
this Agreement to the Trustee for the benefit of the
Certificateholders, the Trustee for the benefit of the
Certificateholders may exercise any rights of the Purchaser
hereunder, and the Trustee for the benefit of the
Certificateholders shall accede to the rights hereunder of the
Purchaser with respect to the Mortgage Loans.
All of the provisions of this Agreement shall inure to the
benefit of the Trustee for the benefit of the Certificateholders.
All references to the Purchaser shall be deemed to include
the Trustee for the benefit of the Certificateholders. The
applicable Seller shall cooperate in the assignment of the Mortgage
Loans and this Agreement.
The Servicer shall remit payments to the Securities
Administrator for the benefit of the Certificateholders on the
Remittance Date after the transfer of the Mortgage Loans, unless
the Servicer was notified in writing of the new record owner of the
Mortgage Loans 3 Business Days prior to the Record Date, in which
case, the Servicer shall remit to the new record owner (or trustee,
custodian or master servicer, as the case may be) of the Mortgage
Loans.
The Servicer shall enter into an Assignment, Assumption and
Recognition Agreement, substantially in the form of Exhibit 2.05
attached hereto. The Servicer shall mark its books and
records to reflect the ownership of the Mortgage Loans by the
Trustee for the benefit of the Certificateholders. This
Agreement shall be binding upon and inure to the benefit of the
Purchaser and the Servicer and their permitted successors,
assignees and designees.
ARTICLE III:
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER; REPURCHASE
AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS
Section 3.01
Representations and Warranties of each Seller
Each Seller, as to itself, represents, warrants and covenants to
the Purchaser and the Trustee for the benefit of the
Certificateholders as the assignee of the Purchaser that as of the
Closing Date or as of such date specifically provided herein:
(1) Due Organization
. The Seller is an entity duly
organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and has all licenses necessary to
carry on its business now being conducted and is licensed,
qualified and in good standing under the laws of each state where a
Mortgaged Property is located or is otherwise exempt under
applicable law from such qualification or is otherwise not required
under applicable law to effect such qualification; no demand for
such qualification has been made upon the Seller by any state
having jurisdiction and in any event the Seller is or will be in
compliance with the laws of any such state to the extent necessary
to enforce each Mortgage Loan and with respect to PHH Mortgage,
service each Mortgage Loan in accordance with the terms of this
Agreement.
(2) Due Authority . The
Seller had the full power and authority and legal right to
originate the Mortgage Loans that it originated, if any, and to
acquire the Mortgage Loans that it acquired. 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, subject to applicable
bankruptcy, reorganization, receivership, conservatorship,
insolvency, moratorium and other laws relating to or affecting
creditors’ rights generally or the rights of creditors of
banks and to the general principles of equity (whether such
enforceability is considered in a proceeding in equity or at law).
(3) No Conflict . The
execution and delivery of this Agreement, the acquisition or
origination, as applicable, of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans, the consummation of the
transactions contemplated hereby, or the fulfillment of or
compliance with the terms and conditions of this Agreement, will
not conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller’s organizational
documents and bylaws or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which the
Seller is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation
of any law, rule, regulation, order, judgment or decree to which
the Seller or its property is subject, or impair the ability of the
Purchaser to realize on the Mortgage Loans;
(4) 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;
(5) No Material Default .
Neither the Seller nor any of its Affiliates is in material
default under any agreement, contract, instrument or indenture of
any nature whatsoever to which the Seller or any of its Affiliates
is a party or by which it (or any of its assets) is bound, which
default would have a material adverse effect on the ability of the
Seller to perform under this Agreement, nor, to the best of the
Seller’s knowledge, has any event occurred which, with
notice, lapse of time or both, would constitute a default under any
such agreement, contract, instrument or indenture and have a
material adverse effect on the ability of the Seller to perform its
obligations under this Agreement;
(6) [Reserved];
(7) [Reserved];
(8) No Litigation
Pending . There is no action, suit,
proceeding or investigation pending or, to the best of the
Seller’s knowledge, threatened, against the Seller, which,
either in any one instance or in the aggregate, if determined
adversely to the Seller would adversely affect the sale of the
Mortgage Loans to the Purchaser or the execution, delivery or
enforceability of this Agreement or result in any material
liability of the Seller, or draw into question the validity of this
Agreement, or have a material adverse effect on the financial
condition of the Seller;
(9) 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, the delivery of the Mortgage Files to the
Purchaser, the sale of the Mortgage Loans to the Purchaser or the
consummation of the transactions contemplated by this Agreement or,
if required, such approval has been obtained prior to the Closing
Date;
(10) Ordinary Course of Business . The consummation of the transactions contemplated
by this Agreement is 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 applicable jurisdiction;
(11) [Reserved];
(12) No Untrue
Information . Neither this Agreement
nor any statement, report or other agreement, document or
instrument furnished or to be furnished pursuant to this Agreement
contains or will contain any materially untrue statement of facts
or omits or will omit to state a fact necessary to make the
statements contained therein not misleading;
(13) Non-solicitation .
Each Seller covenants and agrees that it shall not take any
action to solicit the refinancing of any Mortgage Loan following
the date hereof or provide information to any other entity to
solicit the refinancing of any Mortgage Loan; provided that, the
foregoing shall not preclude such Seller from engaging in
solicitations to the general public by newspaper, radio, television
or other media which are not directed toward the Mortgagors or from
refinancing the Mortgage Loan of any Mortgagor who, without
solicitation, contacts such Seller to request the refinancing of
the related Mortgage Loan;
(14) Privacy . The
Seller agrees and acknowledges that as to all nonpublic personal
information received or obtained by it with respect to any
Mortgagor: (a) such information is and shall be held by Seller in
accordance with all applicable law, including but not limited to
the privacy provisions of the Gramm-Leach Bliley Act; (b) such
information is in connection with a proposed or actual secondary
market sale related to a transaction of the Mortgagor for purposes
of 16 C.F.R.§313.14(a)(3); and (c) Seller is hereby prohibited
from disclosing or using any such information other than to carry
out the express provisions of this Agreement, or as otherwise
permitted by applicable law; and
(15) Adequacy of Consideration . The consideration received by the Seller upon the
sale of the Mortgage Loans constitutes fair consideration and
reasonably equivalent value for such Mortgage Loans.
Section 3.02
Representations and Warranties of the Servicer
The Servicer represents warrants and covenants to the Purchaser
that as of the Closing Date or as of such date specifically
provided herein:
(1) Ability to Service
. The Servicer is an approved
seller/servicer for Fannie Mae and Freddie Mac and is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant
to Section 203 of the National Housing Act, with facilities,
procedures and experienced personnel necessary for the servicing of
mortgage loans of the same type as the Mortgage Loans. No
event has occurred that would make the Servicer unable to comply
with Fannie Mae or Freddie Mac eligibility requirements or that
would require notification to either Fannie Mae or Freddie
Mac;
(2) No Litigation Pending .
There is no action, suit, proceeding or investigation pending
or, to the best of the Servicer’s knowledge, threatened,
against the Servicer which, either in any one instance or in the
aggregate, if determined adversely to the Servicer would adversely
affect the ability of the Servicer to service the Mortgage Loans
hereunder in accordance with the terms hereof or have a material
adverse effect on the financial condition of the Servicer;
and
(3) Collection Practices .
The collection practices used by the Servicer with respect to
each Mortgage Note and Mortgage have been in all respects legal,
proper and prudent in the mortgage servicing business.
(4) MERS . The Servicer
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.
(5) Non-solicitation .
In the event the Servicer chooses to solicit any Mortgagors
(in writing or otherwise) to refinance any of the Mortgage Loans
during the term of this Agreement, such solicitations shall be
directed at all of the Servicer’s customers and will not be
exclusively directed towards the Mortgagors relating to the
Mortgage Loans sold hereunder; and
(6) Privacy . The
Servicer agrees and acknowledges that as to all nonpublic personal
information received or obtained by it with respect to any
Mortgagor: (a) such information is and shall be held by Servicer in
accordance with all applicable law, including but not limited to
the privacy provisions of the Gramm-Leach Bliley Act; (b) such
information is in connection with a proposed or actual secondary
market sale related to a transaction of the Mortgagor for purposes
of 16 C.F.R.§313.14(a)(3); and (c) Servicer is hereby
prohibited from disclosing or using any such information other than
to carry out the express provisions of this Agreement, or as
otherwise permitted by applicable law.
Section 3.03
Representations and Warranties as to Individual Mortgage
Loans.
With respect to each Mortgage Loan, the applicable Seller hereby
makes the following representations and warranties to the Purchaser
and the Trustee for the benefit of the Certificateholders on which
each of the Purchaser and the Trustee for the benefit of the
Certificateholders specifically relies in purchasing such Mortgage
Loan. Such representations and warranties speak as of the
Closing Date unless otherwise indicated:
(1) Mortgage Loan as
Described . Such Mortgage Loan
complies with the terms and conditions set forth herein, and all of
the information set forth with respect thereto on the Mortgage Loan
Schedule and data tape is true and correct in all material
respects;
(2) Complete Mortgage Files .
The instruments and documents specified in Section
2.02 with respect to such Mortgage Loan have been delivered to
the Purchaser or its designee in compliance with the requirements
of Article II. The Seller is in possession of a
Mortgage File respecting such Mortgage Loan, except for such
documents as have been previously delivered to the Purchaser or its
designee;
(3) Owner of Record .
The Mortgage relating to such Mortgage Loan has been duly
recorded in (or sent for recording to) the appropriate recording
office, and the applicable Seller or Servicer is the owner of
record of such Mortgage Loan and the indebtedness evidenced by the
related Mortgage Note;
(4) Payments Current .
No Monthly Payment required to be made under any Mortgage
Loan has been contractually delinquent by one month or more at any
time preceding the date such Mortgage Loan was purchased by the
Purchaser;
(5) No Outstanding Charges .
There are no delinquent taxes, insurance premiums,
assessments, including assessments payable in future installments,
or other outstanding charges affecting the Mortgaged Property
related to such Mortgage Loan;
(6) Original Terms Unmodified . The terms of the Mortgage Note and the Mortgage
related to such Mortgage Loan (and the Proprietary Lease and the
Pledge Instruments with respect to each Cooperative Loan) have not
been impaired, waived, altered or modified in any material 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 Purchaser’s
custodian; the substance of any such waiver, alteration or
modification has been approved by the insurer under the Primary
Insurance Policy or "lender-paid" Primary Insurance Policy, if any,
and the title insurer, to the extent required by the related
policy, and is reflected on the related Mortgage Loan Schedule.
No instrument of waiver, alteration or modification has been
executed, and no Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement approved by the
insurer under the Primary Insurance Policy or "lender-paid" Primary
Insurance Policy, if any, the title insurer, to the extent required
by the policy, and which assumption agreement has been delivered to
the Purchaser’s custodian and the terms of which are
reflected in the related Mortgage Loan Schedule;
(7) No Defenses . The
Mortgage Note and the Mortgage related to such Mortgage Loan (and
the Cooperative Pledge Agreement related to each Cooperative Loan)
are not subject to any right of rescission, set-off or defense,
including the defense of usury, nor will the operation of any of
the terms of such Mortgage Note and such Mortgage, or the exercise
of any right thereunder, render such Mortgage unenforceable, in
whole or in part, or subject to any right of rescission, set-off or
defense, including the defense of usury and no such right of
rescission, set-off or defense has been asserted with respect
thereto;
(8) Hazard Insurance .
The buildings and improvements on the Mortgaged Property are
insured against loss by fire and hazards of extended coverage
(excluding earthquake insurance) in an amount which is at least
equal to the lesser of (i) the amount necessary to compensate for
any damage or loss to the improvements which are a part of such
property on a replacement cost basis or (ii) the outstanding
principal balance of the Mortgage Loan as of the Closing Date.
To the best of the applicable Seller’s knowledge, 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. All such insurance policies
contain a standard mortgagee clause naming the originator of the
Mortgage Loan, its successors and assigns as mortgagee and the
applicable Seller has not engaged in any act or omission which
would impair the coverage of any such insurance policies. Except as
may be limited by applicable law, 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;
(9) Compliance With Applicable Laws . Each Mortgage Loan and the related prepayment
charge complied in all material respects with any and all
requirements of any federal, state or local law (including usury,
truth in lending, real estate settlement procedures, consumer
credit protection, predatory and abusive lending, equal credit
opportunity, fair housing or disclosure laws) applicable to the
origination and servicing of such Mortgage Loan have been complied
with in all material respects and the consummation of the
transactions contemplated hereby will not involve the violation of
any such laws;
(10) No Fraud . No
error or omission, misrepresentation, negligence or fraud in
respect of such Mortgage Loan has taken place on the part of any
Person in connection with the origination and servicing of such
Mortgage Loan.
(11) No Satisfaction of Mortgage . The Mortgage related to such Mortgage Loan has
not been satisfied, canceled or subordinated, in whole or in part,
or rescinded, and the related Mortgaged Property has not been
released from the lien of such Mortgage, in whole or in part, nor
has any instrument been executed that would effect any such
release, cancellation, subordination or rescission;
(12) Valid First Lien .
The Mortgage related to such Mortgage Loan is a valid,
subsisting and enforceable perfected first lien on the related
Mortgaged Property with respect to each Mortgage Loan, including
all improvements on the related Mortgaged Property, which Mortgaged
Property is free and clear of any encumbrances and liens having
priority over the first lien of the Mortgage subject only to (a)
the lien of current real estate taxes and special 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 of such Mortgage which are acceptable to
mortgage lending institutions generally, are referred to in the
lender’s title insurance policy and do not adversely affect
the market value or intended use of the related Mortgaged Property,
and (c) other matters to which like properties are commonly subject
which do not individually or in the aggregate materially interfere
with the benefits of the security intended to be provided by such
Mortgage or the use, enjoyment, or market value of the related
Mortgaged Property; with respect to each Cooperative Loan, each
Cooperative Pledge Agreement creates a valid, enforceable and
subsisting first security interest in the collateral securing the
related Mortgage Note subject only to (a) the lien of the related
Cooperative Corporation for unpaid assessments representing the
obligor's pro rata share of the Cooperative Corporation’s
payments for its blanket mortgage, current and future real property
taxes, insurance premiums, maintenance fees and other assessments
to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not
materially interfere with the benefits of the security intended to
be provided by the Cooperative Pledge Agreement; provided, however,
that the appurtenant Proprietary Lease may be subordinated or
otherwise subject to the lien of any mortgage on the Cooperative
Project;
(13) Validity of Documents .
The Mortgage Note and the Mortgage related to such Mortgage
Loan (and the Cooperative Pledge Agreement with respect to each
Cooperative Loan) are genuine and each is the legal, valid and
binding obligation of the maker thereof, enforceable in accordance
with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors’ rights generally and
general equitable principles (regardless whether such enforcement
is considered in a proceeding in equity or at law);
(14) Valid Execution of Documents . All parties to the Mortgage Note and the Mortgage
related to such Mortgage Loan had legal capacity to enter into such
Mortgage Loan and to execute and deliver the related Mortgage Note
and the related Mortgage and the related Mortgage Note and the
related Mortgage have been duly and properly executed by such
parties; with respect to each Cooperative Loan, all parties to the
Mortgage Note and the Mortgage Loan had legal capacity to execute
and deliver the Mortgage Note, the Cooperative Pledge Agreement,
the Proprietary Lease, the Stock Power, the Recognition Agreement,
the Financing Statement and the Assignment of Proprietary Lease and
such documents have been duly and properly executed by such
parties; each Stock Power (i) has all signatures guaranteed or (ii)
if all signatures are not guaranteed, then such Cooperative Shares
will be transferred by the stock transfer agent of the Cooperative
Corporation if the Seller undertakes to convert the ownership of
the collateral securing the related Cooperative Loan;
(15) Full Disbursement of Proceeds . Such Mortgage Loan has closed and the proceeds of
such Mortgage Loan have been fully disbursed prior to the Closing
Date; provided that, with respect to any Mortgage Loan
originated within the previous 120 days, alterations and repairs
with respect to the related Mortgaged Property or any part thereof
may have required an escrow of funds in an amount sufficient to pay
for all outstanding work within 120 days of the origination of such
Mortgage Loan, and, if so, such funds are held in escrow by the
Seller, a title company or other escrow agent;
(16) Ownership . The
Mortgage Note and the Mortgage related to such Mortgage Loan have
not been assigned, pledged or otherwise transferred by the
applicable Seller, in whole or in part, and the Seller has good and
marketable title thereto, and the Seller is the sole legal,
beneficial and equitable owner thereof (and with respect to any
Cooperative Loan, the sole legal, beneficial and equitable owner of
the related Cooperative Pledge Agreement) and has full right and
authority to transfer and sell such Mortgage Loan, and is
transferring such Mortgage Loan to the Purchaser free and clear of
any encumbrance, equity, lien, pledge, charge, claim or security
interest;
(17) Doing Business .
All parties that have had any interest in the Mortgage Loan,
whether as originator, mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such
interest, were): (a) organized under the laws of the state where
the related Mortgaged Property is located, or (b) qualified to do
business in such state, or (c) federal savings and loan
associations or national banks having principal offices in such
state, or (d) not doing business in such state so as to require
qualification or licensing, or (e) not otherwise required to be
licensed in such state. All parties which have had any
interest in the Mortgage Loan were in compliance with any and all
applicable "doing business" and licensing requirements of the laws
of the state wherein the related Mortgaged Property is located or
were not required to be licensed in such state;
(18) Title Insurance .
Each Mortgage Loan is covered by either (a) an
attorney’s opinion of title and abstract of title the form
and substance of which is acceptable to mortgage lending
institutions making mortgage loans in the area where the Mortgaged
Property is located or (b) a valid and binding American Land Title
Association lender's title insurance policy issued by a title
insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located. No claims have been filed under such
lender's title insurance policy, and the applicable Seller has not
done, by act or omission, anything that would impair the coverage
of the lender's title insurance policy;
(19) No Defaults . (a)
There is no default, breach, violation or event of acceleration
existing under the Mortgage, the Mortgage Note, or any other
agreements, documents, or instruments related to such Mortgage
Loan; (b) to the best of the Seller’s knowledge, there is no
event that, with the lapse of time, the giving of notice, or both,
would constitute such a default, breach, violation or event of
acceleration; (c) the Mortgagor(s) with respect to such Mortgage
Loan is not the subject of an Insolvency Proceeding; (d) no
event of acceleration has previously occurred, and no notice of
default has been sent, with respect to such Mortgage Loan; (e) in
no event has the Seller waived any of its rights or remedies in
respect of any default, breach, violation or event of acceleration
under the Mortgage, the Mortgage Note, or any other agreements,
documents, or instruments related to such Mortgage Loan; and (f)
with respect to each Cooperative Loan, there is no default in
complying with the terms of the Mortgage Note, the Cooperative
Pledge Agreement and the Proprietary Lease and all maintenance
charges and assessments (including assessments payable in the
future installments, which previously became due and owing) have
been paid, and the Seller has the right under the terms of the
Mortgage Note, Cooperative Pledge Agreement and Recognition
Agreement to pay any maintenance charges or assessments owed by the
Mortgagor;
(20) No Mechanics’ Liens . There are no mechanics’ or similar liens,
except such liens as are expressly insured against by a title
insurance policy, or claims that have been filed for work, labor or
material (and no rights are outstanding that under law could give
rise to such lien) affecting the related Mortgaged Property that
are or may be liens prior to, or equal or coordinate with, the lien
of the related Mortgage;
(21) Location of Improvements; No Encroachments
. All improvements that were considered
in determining the Appraised Value of the related Mortgaged
Property lie wholly within the boundaries and building restriction
lines of such Mortgaged Property, and no improvements on adjoining
properties encroach upon such Mortgaged Property except as
permitted under the terms of the Fannie Mae Guide and the Freddie
Mac Servicer Guide; no improvement located on or part of any
Mortgaged Property is in violation of any applicable zoning law or
regulation, and all inspections, licenses and certificates required
to be made or issued with respect to all occupied portions of such
Mortgaged Property, and with respect to the use and occupancy of
the same, including certificates of occupancy, have been made or
obtained from the appropriate authorities;
(22) Origination; Payment Terms . Principal payments on such Mortgage Loan
commenced or will commence no more than 60 days after funds
were disbursed in connection with such Mortgage Loan. If the
interest rate on the related Mortgage Note is adjustable, the
adjustment is based on the Index set forth on the related Mortgage
Loan Schedule. The related Mortgage Note is payable on the first
day of each month in arrears, in accordance with the payment terms
described on the related Mortgage Loan Schedule. No Mortgage
Loan is a convertible Mortgage Loan;
(23) Due On Sale . The
related Mortgage contains the usual and customary "due-on-sale"
clause or other similar provision for the acceleration of the
payment of the Unpaid Principal Balance of such Mortgage Loan if
the related Mortgaged Property or any interest therein is sold or
transferred without the prior consent of the mortgagee
thereunder;
(24) Prepayment Penalty .
No Mortgage Loan is not subject to any Prepayment
Penalty;
(25) Mortgaged Property Undamaged; No Condemnation
. The related Mortgaged Property (and
with respect to a Cooperative Loan, the related Cooperative Project
and Cooperative Unit) is free of material damage and waste and
there is no proceeding pending for the total or partial
condemnation thereof;
(26) Customary Provisions .
The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder
thereof adequate for the realization against the related 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) in the case of a Mortgage,
otherwise by judicial foreclosure;
(27) Conformance With Underwriting Standards
. Such Mortgage Loan was underwritten in
accordance with the PHH Guide in effect at the time the Mortgage
Loan was originated;
(28) Appraisal . The
Mortgage File contains an appraisal of the related Mortgaged
Property on forms and with riders approved by Fannie Mae and
Freddie Mac, signed prior to the approval of such Mortgage Loan
application by an appraiser, duly appointed by the originator of
such Mortgage Loan, whose compensation is not affected by the
approval or disapproval of such Mortgage Loan and who met the
minimum qualifications of Fannie Mae and Freddie Mac for
appraisers. Each appraisal of the Mortgage Loan was made in
accordance with the relevant provisions of the Financial
Institutions Reform, Recovery, and Enforcement Act of
1989;
(29) Deeds of Trust .
If the related Mortgage constitutes a deed of trust, then a
trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable
by the Purchaser to the trustee under such deed of trust, except in
connection with a trustee’s sale after default by the related
Mortgagor;
(30) LTV; Primary Mortgage Insurance Policy
. With respect to any Mortgage Loan with
an original Loan-to-Value Ratio greater than 80%, the Mortgage Loan
is insured by a primary mortgage guaranty insurance policy, issued
by an insurer which meets the requirements of Fannie Mae and
Freddie Mac, 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 mortgage guaranty 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 mortgage guaranty insurance policy obligates
the Mortgagor thereunder to maintain such insurance for the time
period required by law and to pay all premiums and charges in
connection therewith. The Note Rate for the Mortgage Loan
does not include any such insurance premium;
(31) Occupancy . The
related Mortgaged Property (or with respect to a Cooperative Loan,
the related Cooperative Unit) is lawfully occupied under applicable
law and all inspections, licenses and certificates required to be
made or issued with respect to all occupied portions of the
Mortgaged Property (or with respect to a Cooperative Loan, the
related Cooperative Unit) 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;
(32) Supervision and Examination by a Federal or State
Authority . Each Mortgage Loan
either was (a) closed in the name of PHH Mortgage, or (b) closed in
the name of another entity that is either a savings and loan
association, a savings bank, a commercial bank, credit union,
insurance company or an institution which is supervised and
examined by a federal or state authority, or a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act (a "HUD Approved
Mortgagee"), and was so at the time such Mortgage Loan was
originated (PHH Mortgage or such other entity, the "Originator") or
(c) closed in the name of a loan broker under the circumstances
described in the following sentence. If such Mortgage Loan
was originated through a loan broker, such Mortgage Loan met the
Originator’s underwriting criteria at the time of origination
and was originated in accordance with the Originator’s
policies and procedures and the Originator acquired such Mortgage
Loan from the loan broker contemporaneously with the origination
thereof. The Mortgage Loans that Bishop’s Gate is
selling to Purchaser were originated by or on behalf of PHH
Mortgage and subsequently assigned to Bishop’s
Gate.
(33) Adjustments . All
of the terms of the related Mortgage Note pertaining to interest
rate adjustments, payment adjustments and adjustments of the
outstanding principal balance, if any, are enforceable and such
adjustments will not affect the priority of the lien of the related
Mortgage; all such adjustments on such Mortgage Loan have been made
properly and in accordance with the provisions of such Mortgage
Loan;
(34) Insolvency Proceedings; The Servicemembers Civil
Relief Act . The related Mortgagor (1) is
not the subject of any Insolvency Proceeding; and (2) has not
notified the Seller and the Seller has no knowledge of any relief
or allowed to the Mortgagor under the Servicemembers Civil
Relief Act;
(35) Fannie Mae/Freddie Mac Documents . Such Mortgage Loan was closed on standard Fannie
Mae or Freddie Mac documents or on such documents otherwise
acceptable to them;
(36) Payments . No
Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or
anyone on behalf of the Mortgagor, (b) paid by any source other
than the Mortgagor or (c) contains any other similar provisions
which may constitute a "buydown" provision. The Mortgage Loan is
not a graduated payment mortgage loan and the Mortgage Loan does
not have a shared appreciation or other contingent interest
feature;
(37) The Assignment of Mortgage . The Assignment is in recordable form and is
acceptable for recording under the laws of the jurisdiction in
which the Mortgaged Property is located;
(38) No 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 reflected on the Mortgage Loan Schedule. The lien of the
Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy,
an endorsement to the policy insuring the mortgagee’s
consolidated interest or by other title evidence acceptable to FNMA
and FHLMC. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(39) Balloon Loans .
Unless otherwise disclosed in the Mortgage Loan Schedule, no
Mortgage Loan has a balloon payment feature. With respect to
any Mortgage Loan with a balloon payment feature, the Mortgage Note
is payable in Monthly Payments based on a thirty year amortization
schedule and has a final Monthly Payment substantially greater than
the preceding Monthly Payment which is sufficient to amortize the
remaining principal balance of the Mortgage Loan and to pay
interest at the related Note Rate. No Balloon Loan has an
original stated maturity of less than seven (7) years;
(40) Condominium Units/PUDs .
If the residential dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other
than a de minimis planned unit development) such condominium or
planned unit development project meets the eligibility requirements
of the PHH Guide;
(41) High Cost Mortgage Loans . No Mortgage Loan is (a) subject to, covered
by or in violation of the provisions of the Homeownership and
Equity Protection Act of 1994, as amended, (b) a "high cost",
"covered", "abusive", "predatory", "home loan", "Oklahoma Section
10" or "high risk" mortgage loan (or a similarly designated loan
using different terminology) under any federal, state or local law,
including without limitation, the provisions of the Georgia Fair
Lending Act, New York Banking Law, Section 6-1, the Arkansas Home
Loan Protection Act, effective as of June 14, 2003, Kentucky State
Statute KRS 360.100, effective as of June 25, 2003, the New Jersey
Home Ownership Security Act of 2002 (the "NJ Act"), the New Mexico
Home Loan Protection Act (N.M. Stat. Ann. §§ 58-21A-1 et
seq.), the Illinois High-Risk Home Loan Act (815 Ill. Comp. Stat.
137/1 et seq.), the Oklahoma Home Ownership and Equity Protection
Act, Nevada Assembly Bill No. 284, effective as of Oct. 1, 2003,
the Minnesota Residential Mortgage Originator and Servicer
Licensing Act (MN Stat. §58.137), the South Carolina High-Cost
and Consumer Home Loans Act, effective January 1, 2004, the
Massachusetts Predatory Home Loan Practices Act, effective November
7, 2004 (Mass. Ann. Laws Ch. 183C) or any other statute or
regulation providing assignee liability to holders of such mortgage
loans, or (c) subject to or in violation of any such or comparable
federal, state or local statutes or regulations;
(42) No Rehabilitation Loan .
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;
(43) No Adverse Conditions .
The Seller has no knowledge of any circumstances or condition
with respect to the Mortgage, the Mortgage Property (or with
respect to a Cooperative Loan, the Cooperative Pledge Agreement,
the Cooperative Unit or the Cooperative Project), 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;
(44) Scheduled Interest .
Interest on each Mortgage Loan is calculated on the basis of
a 360-day year consisting of twelve 30-day months;
(45) Environmental Laws .
The Mortgaged Property is in material compliance with all
applicable environmental laws pertaining to environmental hazards
including, without limitation, asbestos, and neither the Seller
nor, to the Seller’s knowledge, the related Mortgagor, has
received any notice of any violation or potential violation of such
law;
(46) Negative Amortization .
No Mortgage Loan is subject to negative amortization or
permits the deferral of accrued interest;
(47) Cooperative Lien Search . With respect to each Cooperative Loan, a
Cooperative Lien Search has been made by a company competent to
make the same which company is acceptable to Fannie Mae and Freddie
Mac and qualified to do business in the jurisdiction where the
Cooperative Unit is located;
(48) Cooperative Loan- Proprietary Lease
. With respect to each Cooperative Loan,
(i) the terms of the related Proprietary Lease is longer than the
terms of the Cooperative Loan, (ii) there is no provision in any
Proprietary Lease which requires the Mortgagor to offer for sale
the Cooperative Shares owned by such Mortgagor first to the
Cooperative Corporation, (iii) there is no prohibition in any
Proprietary Lease against pledging the Cooperative Shares or
assigning the Proprietary Lease and (iv) the Recognition Agreement
is on a form of agreement published by the Aztech Document Systems,
Inc. or includes provisions which are no less favorable to the
lender than those contained in such agreement;
(49) Cooperative Loan- UCC Financing Statement
. With respect to each Cooperative Loan,
each original UCC financing statement, continuation statement or
other governmental filing or recordation necessary to create or
preserve the perfection and priority of the first priority lien and
security interest in the Cooperative Shares and Proprietary Lease
has been timely and properly made. Any security agreement,
chattel mortgage or equivalent document related to the Cooperative
Loan and delivered to the Mortgagor or its designee establishes in
the Mortgagor a valid and subsisting perfected first lien on and
security interest in the Mortgaged Property described therein, and
the Mortgagor has full right to sell and assign the
same;
(50) Cooperative Loan- Cooperative Pledge
Agreement . With respect to each
Cooperative Loan, each Cooperative Pledge Agreement contains
enforceable provisions such as to render the rights and remedies of
the holder thereof adequate for the realization of the benefits of
the security provided thereby. The Cooperative Pledge
Agreement contains an enforceable provision for the acceleration of
the payment of the Unpaid Principal Balance of the Mortgage Note in
the event the Cooperative Unit is transferred or sold without the
consent of the holder thereof;
(51) Imaging . Each
imaged document represents a true, complete, and correct copy of
the original document in all respects, including, but not limited
to, all signatures conforming with signatures contained in the
original document, no information having been added or deleted, and
no imaged document having been manipulated or altered in any
manner. Each imaged document is clear and legible, including,
but not limited to, accurate reproductions of photographs. No
original documents have been or will be altered in any
manner;
(52) Qualified Mortgage .
Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860-2(a)(1);
(53) [reserved];
(54) Origination and
Servicing Practices . The
origination and servicing practices used by the Seller with respect
to the 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 all
applicable laws, rules and regulations, the terms of the Mortgage
Note and Mortgage, and the Fannie Mae and Freddie Mac servicing
guides. With respect to escrow deposits and Escrow Payments,
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 material work on a Mortgaged Property which has not
been completed;
(55) Texas Refinance Loan s.
Each Mortgage Loan originated in the state of Texas pursuant
to Article XVI, Section 50(a)(6) of the Texas Constitution (a
"Texas Refinance Loan") has been originated in compliance with the
provisions of Article XVI, Section 50(a)(6) of the Texas
Constitution, Texas Civil Statutes and the Texas Finance Code.
With respect to each Texas Refinance Loan that is a Cash Out
Refinancing, the related Mortgage Loan Documents state that the
Mortgagor may prepay such Texas Refinance Loan in whole or in part
without incurring a prepayment charge. The Seller does not
collect any such prepayment charges in connection with any such
Texas Refinance Loan.
(56) Tax Service Contract .
The Seller shall, at its own expense, cause each Mortgage
Loan to be covered by a "life of loan" tax service contract which
is assignable to the Purchaser or its designee at no cost to the
Purchaser or its designee; provided however, that if the Seller
fails to purchase such tax service contract, the Seller shall be
required to reimburse the Purchaser for all costs and expenses
incurred by the Purchaser in connection with the purchase of any
such tax service contract;
(57) Flood Zone Service Contract . Each Mortgage Loan is covered by a "life of loan"
Flood Zone Service Contract which is assignable to the Purchaser or
its designee at no cost to the Purchaser or its designee or, for
each Mortgage Loan not covered by such Flood Zone Service Contract,
the Seller agrees to purchase such Flood Zone Service
Contract;
(58) No Adverse Selection .
No selection procedures were used by the Seller that
identified the Mortgage Loans as being less desirable or valuable
than other comparable mortgage loans in the Seller’s
portfolio;
(59) Maximum LTV . The
Loan-to-Value Ratio of any Mortgage Loan at origination was not
more than 100%;
(60) Credit Score .
Each Mortgage Loan has a valid and original credit score,
with a minimum credit score as set forth in the related Mortgage
Loan Schedule;
(61) Maximum Maturity .
No Mortgage Loan had an original term to maturity of more
than thirty (30) years;
(62) Mortgagor Life Insurance . No Mortgagor was required to purchase any credit
life, disability, accident or health insurance product or debt
cancellation agreement as a condition of obtaining the extension of
credit. No Mortgagor obtained a prepaid single premium credit
life, disability, accident or health insurance policy in connection
with the origination of the Mortgage Loan, and no proceeds from any
Mortgage Loan were used to finance single-premium credit insurance
policies or debt cancellation agreements as part of the origination
of, or as a condition to closing, such Mortgage Loan;
(63) Georgia Mortgages .
No Mortgage Loan originated or modified on or after October
1, 2002 and prior to March 7, 2003 is secured by a Mortgaged
Property located in the State of Georgia;
(64) Credit Reporting .
The Servicer and any predecessor servicer has fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company (three of the
credit repositories) on a quarterly basis; and the Seller will
fully furnish, in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information
(e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Credit Information Company (three of
the credit repositories), on a quarterly basis;
(65) Predatory Lending Practices . No predatory, abusive or deceptive lending
practices, including but not limited to, the extension of credit to
a Mortgagor without regard for the Mortgagor’s ability to
repay the Mortgage Loan, were employed in connection with the
origination of the Mortgage Loan. Each Mortgage Loan is in
compliance with the anti-predatory lending eligibility for purchase
requirements of Fannie Mae’s Selling Guide;
(66) 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;
(67) Origination Practices .
No Mortgagor was encouraged or required to select a Mortgage
Loan product offered by the Seller which is a higher cost product
designed for less creditworthy borrowers, unless at the time of the
related Mortgage Loan’s origination, such Mortgagor did not
qualify taking into account credit history and debt to income
ratios for a lower cost credit product then offered by the Seller
or any affiliate of the Seller. If, at the time of the
related loan application, the Mortgagor may have qualified for a
lower cost credit product then offered by any mortgage lending
affiliate of the Seller, the Seller referred the Mortgagor’s
application to such affiliate for underwriting
consideration;
(68) Points, Fees and Charges . All points, fees and charges, including finance
charges (whether or not financed, assessed, collected or to be
collected), in connection with the origination and servicing of
each Mortgage Loan were disclosed in writing to the related
Mortgagor in accordance with applicable state and federal law and
regulation;
(69) No Manufactured Housing Loans . No Mortgage Loan is a "manufactured housing loan"
pursuant to the NJ Act;
(70) MERS Mortgage Loans .
With respect to each MERS Mortgage Loan, a MIN has been
assigned by MERS and such MIN is accurately provided on the related
Mortgage Loan Schedule. The related assignment of Mortgage to MERS
has been duly and properly recorded;
(71) MERS Mortgage Loan Notices . With respect to each MERS Mortgage Loan, the
Seller has not received any notice of liens or legal actions with
respect to such Mortgage Loan and no such notices have been
electronically posted by MERS;
(72) Ground Leases .
Any Mortgage Loan secured in whole or in part by the interest
of the Mortgagor as a lessee under a ground lease of the related
Mortgaged Property meets the eligibility for purchase requirements
of Fannie Mae’s Selling Guide.
(73) Principally Secured .
Each Mortgage Loan is an obligation which is principally
secured by an interest in real property within the meaning of
Treasury Regulation section 1.860G 2(a);
(74) No High Cost Loans or Covered Loan
. No Mortgage Loan is a High Cost Loan
or Covered Loan, as applicable (as such terms are defined in the
then current Standard & Poor’s LEVELS® Glossary which
is now Version 5.7 Revised, Appendix E (attached hereto as Exhibit
4)) and no Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act;
and
(75) Cooperative Loans .
The Mortgage Note, with respect to a Cooperative Loan, is not
and has not been secured by any collateral except the lien of the
Cooperative Share and the Proprietary Lease.
Section 3.04
Repurchase and Substitution
The representations and warranties contained in Sections 3.01 or
3.03 shall not be impaired by any review and examination of the
Mortgage Files or other documents evidencing or relating to the
Mortgage Loans or any failure on the part of the Sellers, the
Purchaser or the Custodian to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee
of the Purchaser, including the Trustee for the benefit of the
Certificateholders. With respect to the representations and
warranties contained herein as to which the Sellers have no
knowledge, if it is discovered that the substance of any such
representation and warranty was inaccurate as of the date such
representation and warranty was made or deemed to be made, and such
inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interest therein of the Purchaser or
the Purchaser’s assignee, transferee or designee, then
notwithstanding the lack of knowledge by the Sellers with respect
to the substance of such representation and warranty being
inaccurate at the time the representation and warranty was made,
the Sellers shall take such action described in the following
paragraph in respect of such Mortgage Loan.
It is understood and agreed that the representations and
warranties set forth in Sections 3.01 and 3.03 shall survive the
sale of the Mortgage Loans to the Purchaser and from the Purchaser
to the Trustee for the benefit of the Certificateholders and shall
inure to the benefit of the Purchaser and the Trustee for the
benefit of the Certificateholders, notwithstanding any restrictive
or qualified endorsement on any Mortgage Note or Assignment or the
examination of any Mortgage File.
Upon discovery by either of the Sellers or the Purchaser or the
Trustee for the benefit of the Certificateholders of any materially
defective document in, or that any material document was not
transferred by the applicable Seller (as listed on the related
Custodian’s preliminary exception reports, as described in
the Custodial Agreement) as part of any Mortgage File or of a
breach of any of the representations and warranties contained in
Sections 3.01 or 3.03 that materially and adversely affects the
interests of the Purchaser or the Trustee for the benefit of the
Certificateholders, as assignee of the Purchaser, in the related
Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other.
Unless permitted a greater period of time to cure as set forth
in Section 2.04, the applicable Seller shall have a period of 60
days from the earlier of either discovery by or receipt of written
notice from the Purchaser or the Trustee as assignee of the
Purchaser to the Seller of any such missing documentation that was
not transferred by the Seller as described above, or of a
materially defective document or of any breach of any of the
representations and warranties contained in Sections 3.01 or 3.03
that materially and adversely affects the interests of the
Purchaser or the Trustee as assignee of the Purchaser in the
related Mortgage Loan (a "Defective Mortgage Loan"; provided that
"Defective Mortgage Loan" shall also include any Mortgage Loan
treated or designated as such in accordance with Section 2.04)
within which to deliver such missing document or correct or cure
such defect or breach. If such missing document cannot be delivered
or such defect or breach can ultimately be cured but is not
reasonably expected to be cured within the 60-day period, then the
applicable Seller shall have such additional time, if any, as is
reasonably determined by the Purchaser or the Trustee as assignee
of the Purchaser to cure such breach provided that such Seller has
commenced curing or correcting such breach and is diligently
pursuing same. Each Seller hereby covenants and agrees with
respect to each Mortgage Loan conveyed by it that, if any missing
document cannot be delivered or any breach or defect relating
thereto cannot be corrected or cured within the applicable cure
period or such additional time, if any, as is reasonably determined
by the Purchaser or Trustee as assignee of the Purchaser, then such
Seller shall, at the direction of the Purchaser or Trustee as
assignee of the Purchaser, either (i) repurchase the Defective
Mortgage Loan at the applicable Repurchase Price or (ii) remove
such Mortgage Loan ("Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, if any.
As to any Deleted Mortgage Loan for which the applicable Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, the
applicable Seller shall effect such substitution by delivering to
the Purchaser or the Trustee as assignee of the Purchaser for such
Qualified Substitute Mortgage Loan or Loans the Legal Documents as
are required by Section 2. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and the applicable Seller
shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans, as of the date of substitution,
the covenants, representations and warranties set forth in Sections
3.01 and 3.03.
For any month in which the applicable Seller substitutes one or
more Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans, the applicable Seller will determine the amount (if
any) by which the aggregate principal balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution (after
application of scheduled principal payments due in the month of
substitution which have been received or as to which an advance has
been made) is less than the aggregate outstanding principal balance
of all such Deleted Mortgage Loans. The amount of such
shortfall shall be paid by the applicable Seller on the date of
such substitution) by wire transfer of immediately available funds
directly to the Collection Account or the Trustee as assignee of
the Purchaser.
Any repurchase of a Defective Mortgage Loan required hereunder
shall be accomplished by payment of the applicable Repurchase Price
within 3 Business Days of expiration of the applicable time period
ref
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