Exhibit 99.14b
EXECUTION COPY
MORTGAGE
LOAN PURCHASE AND WARRANTIES AGREEMENT
MORGAN
STANLEY MORTGAGE CAPITAL INC.
Purchaser
and
WILMINGTON
FINANCE INC.,
Seller
Dated
as of November 1, 2006
Conventional,
Fixed
and Adjustable Rate, Prime/Alt-A Residential Mortgage
Loans
TABLE
OF CONTENTS
Page
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SECTION
1.
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DEFINITIONS.
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1
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SECTION
2.
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AGREEMENT
TO PURCHASE.
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13
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SECTION
3.
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MORTGAGE
SCHEDULES.
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14
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SECTION
4.
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PURCHASE
PRICE.
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14
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SECTION
5.
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EXAMINATION
OF MORTGAGE FILES.
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15
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SECTION
6.
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CONVEYANCE
FROM SELLERS TO PURCHASER.
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15
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SECTION
7.
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SERVICING
OF THE MORTGAGE LOANS.
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17
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SECTION
8.
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TRANSFER
OF SERVICING.
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19
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SECTION
9.
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REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES FOR
BREACH.
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21
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SECTION
10.
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CLOSING.
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41
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SECTION
11.
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CLOSING
DOCUMENTS.
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41
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SECTION
12.
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COSTS.
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43
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SECTION
13.
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COOPERATION
OF SELLER WITH A RECONSTITUTION.
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43
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SECTION
14.
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THE
SELLER.
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44
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SECTION
15.
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FINANCIAL
STATEMENTS.
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46
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SECTION
16.
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MANDATORY
DELIVERY; GRANT OF SECURITY INTEREST.
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46
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SECTION
17.
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NOTICES.
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47
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SECTION
18.
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SEVERABILITY
CLAUSE.
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48
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SECTION
19.
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COUNTERPARTS.
|
48
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SECTION
20.
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GOVERNING
LAW.
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48
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SECTION
21.
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INTENTION
OF THE PARTIES.
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48
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SECTION
22.
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SUCCESSORS
AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
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49
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SECTION
24.
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EXHIBITS.
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49
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SECTION
25.
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GENERAL
INTERPRETIVE PRINCIPLES.
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49
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SECTION
26.
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REPRODUCTION
OF DOCUMENTS.
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50
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SECTION
27.
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FURTHER
AGREEMENTS.
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50
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SECTION
28.
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RECORDATION
OF ASSIGNMENTS OF MORTGAGE.
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50
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SECTION
29.
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NO
SOLICITATION.
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50
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SECTION
30.
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WAIVER
OF TRIAL BY JURY.
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51
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SECTION
31.
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GOVERNING
LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS.
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51
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SECTION
32.
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CONFIDENTIALITY.
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51
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SECTION
33.
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COMPLIANCE
WITH REGULATION AB.
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52
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EXHIBITS
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EXHIBIT
A
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CONTENTS
OF EACH MORTGAGE FILE
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EXHIBIT
C
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FORM
OF SELLER’S OFFICER’S CERTIFICATE
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EXHIBIT
E
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FORM
OF SECURITY RELEASE CERTIFICATION
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EXHIBIT
F
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FORM
OF SECURITY RELEASE CERTIFICATION
|
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EXHIBIT
G
|
FORM
OF ASSIGNMENT AND CONVEYANCE AGREEMENT
|
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EXHIBIT
H
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
I
|
FORM
OF ASSIGNMENT AND RECOGNITION AGREEMENT
|
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the “
Agreement ”), dated as of November 1, 2006, by
and between Morgan Stanley Mortgage Capital Inc., a New York
corporation, having an office at 1585 Broadway, 2 nd
Floor, New York, New York 10036 (the “ Purchaser
”) and WILMINGTON FINANCE INC., a Delaware corporation,
having an office at 401 Plymouth Road, Suite 400, Plymouth
Meeting, Pennsylvania 19462 (the “ Seller
”).
W I T N
E S S E
T H :
WHEREAS,
the Seller desires to sell, from time to time, to the
Purchaser on a nonexclusive basis, and the Purchaser desires
to purchase, from time to time, from the Seller, without
recourse to the Seller but subject to the terms of this
Agreement, certain first and second lien, adjustable-rate and
fixed-rate prime/Alt-A residential mortgage loans (the “
Mortgage Loans ”) on a servicing released basis
as described herein, and which shall be delivered in pools of
whole loans (each, a “ Mortgage Loan Package
”) on various dates as provided herein (each, a “
Closing Date ”);
WHEREAS,
each Mortgage Loan is secured by a mortgage, deed of trust or
other security instrument creating a first or second lien on a
residential dwelling located in the jurisdiction indicated on
the Mortgage Loan Schedule for the related Mortgage Loan
Package;
WHEREAS,
the Purchaser and the Seller wish to prescribe the manner of
the conveyance, servicing and control of the Mortgage Loans;
and
WHEREAS,
following its purchase of the Mortgage Loans from the Seller,
the Purchaser desires to sell some or all of the Mortgage
Loans to one or more purchasers as a whole loan transfer or a
public or private, rated or unrated mortgage Securitization
Transaction;
NOW,
THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Purchaser and the Seller agree as
follows:
SECTION
1.
Definitions.
For
purposes of this Agreement the following capitalized terms
shall have the respective meanings set forth
below.
Accepted Servicing Practices : With respect to any
Mortgage Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the
same type as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located.
Act : The National Housing Act, as amended from time
to time.
Adjustable Rate Mortgage Loan : An adjustable rate
Mortgage Loan purchased pursuant to this Agreement.
Affiliate : With respect to any specified Person,
any other Person controlling or controlled by or under common
control with such specified Person. For the purposes of
this definition, “control” when used with respect to
any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise and
the terms “controlling” and “controlled”
have meanings correlative to the foregoing.
Agency Transfer : A Fannie Mae Transfer or a Freddie
Mac Transfer.
Agreement : This Mortgage Loan Purchase and
Warranties Agreement and all amendments hereof and supplements
hereto.
ALTA : The American Land Title Association or any
successor thereto.
Appraised Value : The value set forth in an
appraisal made in connection with the origination of the related
Mortgage Loan as the value of the Mortgaged Property.
Assignment and Conveyance Agreement : As defined in
Subsection 6.01 .
Assignment of Mortgage : An assignment of the
Mortgage, notice of transfer or equivalent instrument in recordable
form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the
Mortgage to the Purchaser.
Balloon Mortgage Loan : Any Mortgage Loan (a) that
requires only payments of interest until the stated maturity date
of the Mortgage Loan or (b) for which Monthly Payments of principal
(not including the payment due on its stated maturity date) are
based on an amortization schedule that would be insufficient to
fully amortize the principal thereof by the stated maturity date of
the Mortgage Loan.
Business Day : Any day other than (i) a
Saturday or Sunday, (ii) a day on which banking and savings
and loan institutions, in the State of New York or the State in
which either Seller’s servicing operations are located or
(iii) the state in which the Custodian’s operations are
located, are authorized or obligated by law or executive order to
be closed.
Closing Date : The date or dates on which the
Purchaser from time to time shall purchase, and the Seller from
time to time shall sell, the Mortgage Loans listed on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
CLTV : As of any date and as to any Second Lien
Loan, the ratio, expressed as a percentage, of the (a) sum of
(i) the outstanding principal balance of the Second Lien Loan
and (ii) the outstanding principal balance as of such date of
any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the
same
Mortgaged
Property to (b) the Appraised Value as determined
pursuant to the Underwriting Guidelines of the related
Mortgaged Property as of the origination of the Second Lien
Loan.
Code : Internal Revenue Code of 1986, as
amended.
Commission : The United States Securities and
Exchange Commission.
Condemnation Proceeds : All awards or settlements in
respect of a Mortgaged Property, whether permanent or temporary,
partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a
Mortgagor in accordance with the terms of the related Mortgage Loan
Documents.
Covered Loan : A Mortgage Loan categorized as
Covered pursuant to Appendix E of Standard & Poor’s
Glossary.
Custodial Agreement : The agreement(s) governing the
retention of the originals of each Mortgage Note, Mortgage,
Assignment of Mortgage and other Mortgage Loan
Documents. If more than one Custodial Agreement is in
effect at any given time, all of the individual Custodial
Agreements shall collectively be referred to as the “
Custodial Agreement. ”
Custodian : LaSalle Bank, National Association, a national
banking association, and its successors in interest or any
successor to the Custodian under the Custodial Agreement as therein
provided.
Cut-off Date : The date or dates designated as such
on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Deemed Material and Adverse Representation : Each
representation and warranty identified as such in
Subsection 9.02 of this Agreement.
Deleted Mortgage Loan : A Mortgage Loan that is
repurchased or replaced or to be replaced with a Qualified
Substitute Mortgage Loan by the Seller in accordance with the terms
of this Agreement.
Depositor : The depositor, as such term is defined
in Regulation AB, with respect to any Securitization
Transaction.
Determination Date : The second Business Day of the
month in which the related Remittance Date occurs.
Due Date : The day of the month on which the Monthly
Payment is due on a Mortgage Loan, exclusive of any days of
grace.
Eligible Account : Any of (i) an account
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 a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated A-1 by Standard
& Poor’s or Prime-1 by Moody’s (or a comparable
rating if another Rating Agency is
specified
by the Purchaser by written notice to the Seller) at the time
any amounts are held on deposit therein, (ii) an account
or accounts the deposits in which are fully insured by the
FDIC, or (iii) a trust account or accounts maintained
with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity.
Escrow Payments : With respect to any Mortgage Loan,
the amounts constituting ground rents, taxes, assessments, water
rates, sewer rents, municipal charges, mortgage insurance premiums,
fire and hazard insurance premiums, condominium charges, and any
other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to the Mortgage or any other
document.
Exchange Act : The Securities Exchange Act of 1934,
as amended.
Fannie Mae : The Federal National Mortgage
Association, or any successor thereto.
Fannie Mae Guides : The Fannie Mae Sellers’
Guide and the Fannie Mae Servicers’ Guide and all amendments
or additions thereto.
Fannie Mae Transfer : As defined in
Section 13 .
FHA : The Federal Housing Administration, an agency
within 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.
First Lien Loan : A Mortgage Loan secured by a first
lien Mortgage on the related Mortgaged Property.
Fitch : Fitch, Inc., or its successor in
interest.
Fixed Rate Mortgage Loan : A fixed rate mortgage
loan purchased pursuant to this Agreement.
Freddie Mac : The Federal Home Loan Mortgage
Corporation, or any successor thereto.
Freddie Mac Transfer : As defined in
Section 13 .
Gross Margin : With respect to each Adjustable Rate
Mortgage Loan, the fixed percentage amount set forth in the related
Mortgage Note which amount is added to the Index in accordance with
the terms of the related Mortgage Note to determine on each
Interest Rate Adjustment Date the Mortgage Interest Rate for such
Mortgage Loan.
High Cost Loan : A Mortgage Loan (a) covered by
the Home Ownership and Equity Protection Act of 1994 (“
HOEPA ”), (b) with an “annual percentage
rate” or total “points and fees”
payable by the related Mortgagor (as each such term is calculated
under HOEPA) that exceed the thresholds set forth by HOEPA and its
implementing regulations, including 12 C.F.R.
§
226.32(a)(1)(i) and (ii), (c) classified as a “high
cost home,” “threshold,”
“covered,” (excluding New Jersey “Covered
Home Loans” as that term is defined in clause (1)
of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), “high risk
home,” “predatory” or similar loan under any
other applicable federal, state or local law (or a similarly
classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high interest
rates, points and/or fees) or (d) categorized as High Cost
pursuant to Appendix E of Standard & Poor’s
Glossary. For avoidance of doubt, the parties agree
that this definition shall apply to any law regardless of
whether such law is presently, or in the future becomes, the
subject of judicial review or litigation.
Home Loan : A Mortgage Loan categorized as Home Loan
pursuant to Appendix E of Standard & Poor’s
Glossary.
HUD : The Department of Housing and Urban
Development, or any federal agency or official thereof which may
from time to time succeed to the functions thereof with regard to
Mortgage Insurance issued by the FHA. The term “
HUD ,” for purposes of this Agreement, is also deemed
to include subdivisions thereof such as the FHA and Government
National Mortgage Association.
Index : The index indicated in the related Mortgage
Note for each Adjustable Rate Mortgage Loan.
Insurance Proceeds : With respect to each Mortgage
Loan, proceeds of insurance policies insuring the Mortgage Loan or
the related Mortgaged Property.
Interest Rate Adjustment Date : With respect to each
Adjustable Rate Mortgage Loan, the date, specified in the related
Mortgage Note and the related Mortgage Loan Schedule, on which the
Mortgage Interest Rate is adjusted.
Interim Funder : With respect to each MERS
Designated Mortgage Loan, the Person named on the MERS System as
the interim funder pursuant to the MERS Procedures
Manual.
Investor : With respect to each MERS Designated
Mortgage Loan, the Person named on the MERS System as the investor
pursuant to the MERS Procedures Manual.
Lifetime Rate Cap : The provision of each Mortgage
Note related to an Adjustable Rate Mortgage Loan which provides for
an absolute maximum Mortgage Interest Rate
thereunder. The Mortgage Interest Rate during the terms
of each Adjustable Rate Mortgage Loan shall not at any time exceed
the Mortgage Interest Rate at the time of origination of such
Adjustable Rate Mortgage Loan by more than the amount per annum set
forth on the related Mortgage Loan Schedule.
Liquidation Proceeds : Cash received in connection
with the liquidation of a defaulted Mortgage Loan, whether through
the sale or assignment of such Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise or the sale of the related Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of
the Mortgage Loan.
Loan Performance Information : As defined in
Subsection 34.03(e).
Loan-to-Value Ratio or LTV : With respect to
any Mortgage Loan, the ratio (expressed as a percentage) of the
outstanding principal amount of the Mortgage Loan as of the related
Cut-off Date (unless otherwise indicated), to the lesser of
(a) the Appraised Value of the Mortgaged Property at
origination and (b) if the Mortgage Loan was made to finance
the acquisition of the related Mortgaged Property, the purchase
price of the Mortgaged Property.
Manufactured Home : A single family residential unit
that is constructed in a factory in sections in accordance with the
Federal Manufactured Home Construction and Safety Standards adopted
on July 15, 1976, by the Department of Housing and Urban
Development (“HUD Code”), as amended in 2000, which
preempts state and local building codes. Each unit is
identified by the presence of a HUD Plate/Compliance Certificate
label. The sections are then transported to the site and
joined together and affixed to a pre-built permanent foundation
(which satisfies the manufacturer’s requirements and all
state, county, and local building codes and
regulations). The manufactured home is built on a
non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of
the home may have running gear (wheels, axles, and brakes) that
enable it to be transported to the permanent site. The
wheels and hitch are removed prior to anchoring the unit to the
permanent foundation. The manufactured home must be
classified as real estate and taxed accordingly. The
permanent foundation may be on land owned by the mortgager or may
be on leased land.
MERS : Mortgage Electronic Registration Systems,
Inc., a Delaware corporation, and its successors in
interest.
MERS Designated Mortgage Loan : Mortgage Loans for
which (a) the Seller has designated or will designate MERS as,
and has taken or will take such action as is necessary to cause
MERS to be, the mortgagee of record, as nominee for the Seller, in
accordance with MERS Procedures Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the
MERS System.
MERS Procedures Manual : The MERS Procedures Manual,
as it may be amended, supplemented or otherwise modified from time
to time.
MERS Report : The report from the MERS System
listing MERS Designated Mortgage Loans and other
information.
MERS System : MERS mortgage electronic registry
system, as more particularly described in the MERS Procedures
Manual.
Monthly Payment : The scheduled monthly payment of
principal and interest on a Mortgage Loan.
Moody’s : Moody’s Investors Service,
Inc., and any successor thereto.
Mortgage : The mortgage, deed of trust or other
instrument securing a Mortgage Note, which creates a first lien, in
the case of a First Lien Loan, or a second lien, in the case of a
Second Lien Loan, on the Mortgaged Property.
Mortgage File : The items pertaining to a particular
Mortgage Loan referred to in Exhibit A annexed hereto,
and any additional documents required to be added to the Mortgage
File pursuant to this Agreement.
Mortgage Interest Rate : The annual rate of interest
borne on a Mortgage Note with respect to each Mortgage
Loan.
Mortgage Interest Rate Cap : With respect to an
Adjustable Rate Mortgage Loan, the limit on each Mortgage Interest
Rate adjustment as set forth in the related Mortgage
Note.
Mortgage Loan : An individual Mortgage Loan which is
the subject of this Agreement, each Mortgage Loan originally sold
and subject to this Agreement being identified on the applicable
Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, Servicing Rights and all other rights, benefits, proceeds
and obligations arising from or in connection with such Mortgage
Loan, excluding replaced or repurchased mortgage
loans.
Mortgage Loan Documents : The documents required to
be delivered to the Custodian pursuant to
Subsection 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package : Each pool of Mortgage Loans,
which shall be purchased by the Purchaser from the Seller from time
to time on each Closing Date.
Mortgage Loan Schedule : The schedule of Mortgage
Loans setting forth the following information with respect to each
Mortgage Loan in the related Mortgage Loan
Package: (1) the Seller’s Mortgage Loan
identifying number; (2) the Mortgagor’s name;
(3) the street address of the Mortgaged Property including the
city, state and zip code; (4) a code indicating whether the
Mortgagor is self-employed; (5) a code indicating whether the
Mortgaged Property is owner-occupied; (6) the number and type
of residential units constituting the Mortgaged Property;
(7) the original months to maturity or the remaining months to
maturity from the related Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization
schedule; (8) with respect to each First Lien Loan, the
Loan-to-Value Ratio at origination, and with respect to each Second
Lien Loan, the CLTV at origination; (9) the Mortgage Interest
Rate as of the related Cut-off Date; (10) the date on which
the Monthly Payment was due on the Mortgage Loan and, if such date
is not consistent with the Due Date currently in effect, such Due
Date; (11) the stated maturity date; (12) the first payment
date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date on which a payment
was actually applied to the outstanding principal balance;
(15) the original principal amount of the Mortgage Loan;
(16) the principal balance of the Mortgage Loan as of the
close of business on the related Cut-off Date, after deduction of
payments of principal due and collected on or before the related
Cut-off Date; (17) delinquency status as of the related
Cut-off Date; (18) with respect to each Adjustable Rate
Mortgage Loan, the Interest Rate Adjustment Date; (19) with
respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(20) with respect to each Adjustable Rate Mortgage Loan, the
Lifetime Rate Cap under the terms of the Mortgage Note;
(21) with respect to each Adjustable Rate Mortgage Loan, a
code indicating the type of Index; (22) the
type
of Mortgage Loan (i.e., Fixed or Adjustable Rate Mortgage
Loan, First or Second Lien Loan); (23) a code indicating
the purpose of the loan (i.e., purchase, rate and term
refinance, equity take-out refinance); (24) a code
indicating the documentation style (i.e., full, alternative or
reduced); (25) asset verification (Y/N); (26) the
loan credit classification (as described in the Underwriting
Guidelines); (27) whether such Mortgage Loan provides for
a Prepayment Penalty and, if applicable, the Prepayment
Penalty period; (28) the Mortgage Interest Rate as of
origination; (29) the credit risk score (FICO score);
(30) the date of origination; (31) with respect to
Adjustable Rate Mortgage Loans, the Mortgage Interest Rate
adjustment period; (32) with respect to each Adjustable
Rate Mortgage Loan, the Mortgage Interest Rate adjustment
percentage; (33) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate floor;
(34) with respect to each Adjustable Rate Mortgage Loan,
the Mortgage Interest Rate Cap as of the first Interest Rate
Adjustment Date; (35) with respect to each Adjustable
Rate Mortgage Loan, the Periodic Rate Cap subsequent to the
first Interest Rate Adjustment Date; (36) with respect to
each Adjustable Rate Mortgage Loan, a code indicating whether
the Mortgage Loan provides for negative amortization;
(37) with respect to each Adjustable Rate Mortgage Loan
with negative amortization, the negative amortization limit;
(38) a code indicating whether the Mortgage Loan is a
Home Loan; (39) a code indicating whether the Mortgage
Loan is a Balloon Mortgage Loan; (40) the Due Date for
the first Monthly Payment; (41) the original Monthly
Payment due; (42) a code indicating the PMI Policy
provider and percentage of coverage, if applicable;
(43) Appraised Value; (44) appraisal type;
(45) automated valuation model (AVM); (46) appraisal
date; (47) with respect to the related Mortgagor, the
debt-to-income ratio; (48) whether the Mortgage Loan has
Monthly Payments that are interest-only for a period of time,
and the interest-only period, if applicable (and with respect
to each Second Lien Loan, whether the related first lien
mortgage loan has monthly payments that are interest-only for
a period of time, and the interest-only period, if
applicable); (49) the social security number of the Mortgagor;
(50) a code indicating whether the Mortgagor’s race
and/or ethnicity is (i) native American or Alaskan
native, (ii) Asian/Pacific islander, (iii) African
American, (iv) white, (v) Hispanic or Latino,
(vi) other minority, (vii) not provided by the
Mortgagor, (viii) not applicable (if the Mortgagor is an
entity) and (ix) unknown or missing; (51) a description
of the Prepayment Penalty, if applicable, including whether
the applicable Prepayment Penalty provision is
“hard” or “soft”; and (52) a code
indicating whether the Mortgage Loan is a MERS Designated
Mortgage Loan and the MERS Identification Number, if
applicable. With respect to the Mortgage Loans in
the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off
Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance
of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; (4) the weighted
average maturity of the Mortgage Loans; (5) the
applicable Cut-off Date; and (6) the applicable Closing
Date.
Mortgage Note : The note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged Property : With respect to each Mortgage
Loan, the Mortgagor’s real property securing repayment of a
related Mortgage Note, consisting of an unsubordinated estate in
fee simple or, with respect to real property located in
jurisdictions in which the use of leasehold estates for residential
properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a
Residential Dwelling.
Mortgagor : The obligor on a Mortgage
Note.
Officer’s Certificate : A certificate signed
by the Chairman of the Board or the Vice Chairman of the Board or a
President or a Vice President and by the Treasurer or the Secretary
or one of the Assistant Treasurers or Assistant Secretaries of the
Seller, and delivered to the Purchaser as required by this
Agreement.
Periodic Rate Cap : The provision of each Mortgage
Note related to an Adjustable Rate Mortgage Loan which provides for
an absolute maximum amount by which the Mortgage Interest Rate
therein may increase or decrease on an Interest Rate Adjustment
Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate
Mortgage Loan is the rate set forth as such on the related Mortgage
Loan Schedule.
Person : Any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any
agency or political subdivision thereof.
PMI Policy : A policy of primary mortgage guaranty
insurance issued by an insurer acceptable under the Underwriting
Guidelines and qualified to do business in the jurisdiction where
the Mortgaged Property is located.
Preliminary Mortgage Schedule : As defined in
Section 3 .
Prepayment Penalty : With respect to each Mortgage
Loan, the penalty if the Mortgagor prepays such Mortgage Loan as
provided in the related Mortgage Note or Mortgage.
Principal Prepayment : Any payment or other recovery
of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date, including any Prepayment Penalty or premium
thereon, and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment.
Purchase Price : The price paid on the related
Closing Date by the Purchaser to the Seller in exchange for the
Mortgage Loans purchased on such Closing Date as calculated in
Section 4 of this Agreement.
Purchase Price and Terms Agreement : Those certain
agreements setting forth the general terms and conditions of the
transactions consummated herein and identifying the Mortgage Loans
to be purchased from time to time hereunder, by and between the
Seller and the Purchaser.
Purchaser : Morgan Stanley Mortgage Capital Inc., a
New York corporation, and its successors in interest and assigns,
or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Appraiser : An appraiser, accepted by the
Seller, who had no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof,
and
whose
compensation was not affected by the approval or disapproval
of the Mortgage Loan, and such appraiser and the appraisal
made by such appraiser both satisfied the requirements of
Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated.
Qualified Correspondent : Any Person from which the
Seller purchased Mortgage Loans, provided that the following
conditions are satisfied: (i) such Mortgage Loans were
originated pursuant to an agreement between the Seller and such
Person that contemplated that such Person would underwrite mortgage
loans from time to time, for sale to the Seller, in accordance with
underwriting guidelines designated by the Seller (“
Designated Guidelines ”) or guidelines that do not
vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above
and were acquired by the Seller within 180 days after origination;
(iii) either (x) the Designated Guidelines were, at the time such
Mortgage Loans were originated, used by the Seller in origination
of mortgage loans of the same type as the Mortgage Loans for the
Seller’s own accounts or (y) the Designated Guidelines were,
at the time such Mortgage Loans were underwritten, designated by
the Seller on a consistent basis for use by lenders in originating
mortgage loans to be purchased by the Seller; and (iv) the Seller
employed, at the time such Mortgage Loans were acquired by the
Seller, pre-purchase or post-purchase quality assurance procedures
(which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it
purchased mortgage loans properly applied the underwriting criteria
designated by the Seller.
Qualified Substitute Mortgage Loan : A mortgage loan
eligible to be substituted by the 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 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
outstanding principal balance of the Deleted Mortgage Loan (the
amount of any shortfall will be remitted to the Purchaser by the
Seller in accordance with the terms of this Agreement in the month
of substitution); (ii) have a Mortgage Interest Rate not less
than and not more than 1% greater than the Mortgage Interest Rate
of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that
of the Deleted Mortgage Loan; (iv) be of the same type as the
Deleted Mortgage Loan (i.e., fixed rate or adjustable rate with
same Mortgage
Interest Rate Caps); and (v) comply with each representation
and warranty (respecting individual Mortgage Loans) set forth in
Section 9 .
Rating Agency : Any of Fitch, Moody’s or
Standard & Poor’s, or their respective successors
designated by the Purchaser.
Reconstitution : A Whole Loan Transfer or a
Securitization Transaction.
Reconstitution Agreement : As defined in
Section 13 .
Reconstitution Date : As defined in
Section 13 .
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. 1,506-1,631 (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.
Relief Act : The Servicemembers’ Civil Relief
Act.
REMIC : A “real estate mortgage investment
conduit” within the meaning of Section 860D of the
Code.
REMIC Provisions : Provisions of the federal income
tax law relating to a REMIC, which appear at Section 860A
through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions and
regulations, rulings or pronouncements promulgated thereunder, as
the foregoing may be in effect from time to time.
Remittance Date : The fifth Business Day of any
month, beginning with the first Remittance Date after the related
Closing Date.
Repurchase Price : With respect to any Mortgage
Loan, a price equal to (a) during the first year immediately
following the related Closing Date, an amount equal to the
percentage of par as stated in the related Purchase Price and Terms
Agreement multiplied by the then outstanding principal balance of
such Mortgage Loan as of the date of such repurchase, plus accrued
interest on such Mortgage Loan at the Mortgage Interest Rate from
the date to which interest had last been paid through the day
immediately preceding the date of such repurchase, plus the amount
of any outstanding advances owed to any servicer, plus all costs
and expenses incurred by the Purchaser arising out of or based upon
such breach, including without limitation costs and expenses
incurred in the enforcement of the Seller's repurchase obligation
hereunder, (b) during the second year following the Closing Date,
an amount equal to the product of (i) 100% plus an amount equal to
(A) a fraction, whose numerator is equal to 12 less the number of
months since the first anniversary of the Closing Date and whose
denominator is equal to 12, multiplied by (B) the percentage of par
as stated in the related Purchase Price and Terms Agreement less
100%, multiplied by (ii) the then outstanding principal balance of
such Mortgage Loan as of the date of such repurchase, plus accrued
interest on such Mortgage Loan at the Mortgage Interest Rate from
the date to which interest had last been paid through the day
immediately preceding the date of such repurchase, plus the amount
of any outstanding advances owed to any servicer, plus all costs
and expenses incurred by the Purchaser arising out of or based upon
such breach, including without limitation costs and expenses
incurred in the enforcement of the Seller's repurchase obligation
hereunder, and (c) thereafter, an amount equal to the then
outstanding principal balance of such Mortgage Loan as of the date
of such repurchase plus accrued interest on such Mortgage Loan at
the Mortgage Interest Rate from the date to which interest had last
been paid through the day immediately preceding the date of such
repurchase, plus the amount of any outstanding advances owed to any
servicer, plus all costs and expenses incurred by the Purchaser
arising out of or based upon such breach, including without
limitation costs and expenses incurred in the enforcement of the
Seller's repurchase obligation hereunder.
Residential Dwelling : Any one of the following:
(i) a detached one-family dwelling, (ii) a detached two-
to four-family dwelling, (iii) a one-family dwelling unit in a
condominium project or (iv) a one-family dwelling in a planned
unit development, none of which is a dwelling unit in a residential
cooperative housing corporation, mobile home or Manufactured
Home.
RESPA : Real Estate Settlement Procedures Act, as
amended from time to time.
Second Lien Loan: A Mortgage Loan secured by a
second lien Mortgage on the related Mortgaged
Property.
Securities Act : The Securities Act of 1933, as
amended.
Securitization Transaction : Any transaction
involving either (1) a sale or other transfer of some or all of the
Mortgage Loans directly or indirectly to an issuing entity in
connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an
issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by
reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Seller : As defined in the initial paragraph of the
Agreement, together with its successors in interest.
Sellers : As defined in the initial paragraph of the
Agreement.
Seller Information : As defined in Subsection
33.04(a).
Servicing File : With respect to each Mortgage Loan,
the file retained by the Seller consisting of originals of all
documents in the Mortgage File which are not delivered to the
Purchaser or the Custodian and copies of the Mortgage Loan
Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Representations and Warranties : The representations
and warranties set forth in Subsection 9.02(a), (f), (h), (ii),
(ll), (mm) and (qq).
Servicing Rights : Any and all of the
following: (a) any and all rights to service the
Mortgage Loans; (b) any payments to or monies received by the
Seller for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans;
(d) all agreements or documents creating, defining or
evidencing any such servicing rights to the extent they relate to
such servicing rights and all rights of the Seller thereunder;
(e) Escrow Payments or other similar payments with respect to
the Mortgage Loans and any amounts actually collected by the Seller
with respect thereto; (f) all accounts and other rights to
payment related to any of the property described in this paragraph;
and (g) any and all documents, files, records, servicing
files, servicing documents, servicing records, data tapes, computer
records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the
Mortgage Loans.
Sponsor : The sponsor, as such term is defined in
Regulation AB, with respect to any Securitization
Transaction.
Standard & Poor’s : Standard &
Poor’s Ratings Services, a division of The McGraw-Hill
Companies Inc., and any successor thereto.
Standard & Poor’s Glossary : The
Standard & Poor’s LEVELS ®
Glossary, as may be in effect from time to time.
Static Pool Information : Static pool information as
described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Successor Servicer : Any servicer of one or more
Mortgage Loans designated by the Purchaser as being entitled to the
benefits of the indemnifications set forth in Subsections 9.03 and
14.01.
Stated Principal Balance : As to each Mortgage Loan
on any date of determination, (i) the principal balance of
such Mortgage Loan at the related Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent
actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal on such
Mortgage Loan.
Third-Party Originator : Each Person, other than a
Qualified Correspondent, that originated Mortgage Loans acquired by
the Seller.
Transfer Date : The date on which the Purchaser, or
its designee, shall receive the transfer of servicing
responsibilities and begin to perform the servicing of the Mortgage
Loans with respect to the related Mortgage Loan Package, and the
Seller shall cease all servicing responsibilities. Such
date shall occur on the day indicated by the Purchaser to the
Seller in the related Purchase Price and Terms
Agreement.
Underwriting Guidelines : The underwriting
guidelines of the Seller, a copy of which is attached as an exhibit
to the related Assignment and Conveyance.
Whole Loan Transfer : Any sale or transfer of some
or all of the Mortgage Loans, other than a Securitization
Transaction.
SECTION
2.
Agreement to Purchase.
The
Seller agrees to sell from time to time on a nonexclusive
basis, and the Purchaser agrees to purchase from time to time
without recourse to the Seller but subject to the
representations and warranties and terms contained in this
Agreement, Mortgage Loans having an aggregate principal
balance on the related Cut-off Date in an amount as set forth
in the related Purchase Price and Terms Agreement, or in such
other amount as agreed by the Purchaser and the Seller as
evidenced by the actual aggregate principal balance of the
Mortgage Loans accepted by the Purchaser on each Closing
Date.
SECTION
3.
Mortgage Schedules.
The
Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the
Mortgage Loans to be purchased on each Closing Date in
accordance with the related Purchase Price and Terms Agreement
and this Agreement (each, a “ Preliminary Mortgage
Schedule ”).
The
Seller shall deliver the related Mortgage Loan Schedule for
the Mortgage Loans to be purchased on a particular Closing
Date to the Purchaser at least five (5) Business Days prior to
the related Closing Date. The related Mortgage Loan
Schedule shall be the related Preliminary Mortgage Schedule
with those Mortgage Loans which have not been funded prior to
the related Closing Date deleted.
SECTION
4.
Purchase Price.
The
Purchase Price for each Mortgage Loan shall be the percentage
of par as stated in the related Purchase Price and Terms
Agreement (subject to adjustment as provided therein),
multiplied by the aggregate principal balance, as of the
related Cut-off Date, of the Mortgage Loans listed on the
related Mortgage Loan Schedule, after application of scheduled
payments of principal due on or before the related Cut-off
Date, but only to the extent such payments were actually
received. The initial principal amount of the
related Mortgage Loans shall be the aggregate principal
balance of the Mortgage Loans, so computed as of the related
Cut-off Date. If so provided in the related
Purchase Price and Terms Agreement, portions of the Mortgage
Loans shall be priced separately.
In
addition to the Purchase Price as described above, the
Purchaser shall pay to the Seller, at closing, accrued
interest on the current principal amount of the related
Mortgage Loans as of the related Cut-off Date at the weighted
average Mortgage Interest Rate of those Mortgage
Loans. The Purchase Price plus accrued interest as
set forth in the preceding paragraph shall be paid to the
Seller by wire transfer of immediately available funds to an
account designated by the Seller in writing.
The
Purchaser shall be entitled to (1) all scheduled
principal due after the related Cut-off Date, (2) all
other recoveries of principal collected on or after the
related Cut-off Date, and (3) all payments of interest on
the Mortgage Loans (minus that portion of any such payment
which is allocable to the period prior to the related Cut-off
Date). The outstanding principal balance of each
Mortgage Loan as of the related Cut-off Date is determined
after application of payments of principal due on or before
the related Cut-off Date, to the extent actually collected,
together with any unscheduled principal prepayments collected
prior to such Cut-off Date; provided, however, that payments
of scheduled principal and interest paid prior to such Cut-off
date, but to be applied on a Due Date beyond the related
Cut-off Date shall not be applied to the principal balance as
of the related Cut-off Date. Such prepaid amounts
shall be the property of the Purchaser and shall be remitted
by the Seller to the Purchaser on the next Remittance
Date.
SECTION
5.
Examination of Mortgage Files.
At
least ten (10) Business Days prior to the related Closing
Date, the Seller shall (a) deliver to the Purchaser or
its designee in escrow, for examination with respect to each
Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage File
available to the Purchaser for examination at the
Seller’s place of business in Plymouth Meeting,
Pennsylvania. Such examination may be made by the
Purchaser or its designee at any reasonable time before or
after the related Closing Date. If the Purchaser
makes such examination prior to the related Closing Date and
reasonably determines, in good faith, that any Mortgage Loans
are unacceptable to the Purchaser for any reason, such
Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule, and may be replaced, at the Seller’s option,
by a Qualified Substitute Mortgage Loan (or Loans) acceptable
to the Purchaser. The Purchaser may, at its option
and without notice to the Seller, purchase some or all of the
Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its
designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect
the Purchaser’s (or any of its successor’s) rights
to demand repurchase, substitution or other relief as provided
herein.
SECTION
6.
Conveyance from Sellers to Purchaser.
Subsection
6.01 Conveyance
of Mortgage Loans.
The
Seller shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit G (the
“ Assignment and Conveyance Agreement
”). The Seller shall cause the Servicing File
retained by the Seller pursuant to this Agreement to be
appropriately identified in the Seller’s computer system
and/or books and records, as appropriate, to clearly reflect
the sale of the related Mortgage Loan to the
Purchaser. The Seller shall release from their
custody the contents of any Servicing File retained by it only
in accordance with this Agreement.
Subsection
6.02
Books and Records .
Record
title to each Mortgage and the related Mortgage Note as of the
related Closing Date shall be in the name of the Seller, an
Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select;
provided , however , that if a Mortgage has
been recorded in the name of MERS or its designee, the Seller
is shown as the owner of the related Mortgage Loan on the
records of MERS for purposes of the system of recording
transfers of beneficial ownership of mortgages maintained by
MERS. Notwithstanding the foregoing, each Mortgage
and related Mortgage Note shall be possessed solely by the
Purchaser or the appropriate designee of the Purchaser, as the
case may be. All rights arising out of the Mortgage
Loans including, but not limited to, all funds received by the
Seller after the related Cut-off Date on or in connection with
a Mortgage Loan shall be vested in the Purchaser or one or
more designees of the Purchaser; provided ,
however , that all funds received on or in connection
with a Mortgage Loan shall be received and held by the Seller
in trust for the benefit of the Purchaser or the appropriate
designee of the Purchaser, as the case may be, as the owner of
the Mortgage Loans pursuant to the terms of this
Agreement.
The
Seller shall be responsible for maintaining, and shall
maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the
Purchaser. In particular, the Seller shall maintain
in their possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of prudent mortgage
lenders who originate mortgage loans similar to the Mortgage
Loans in the jurisdiction where the Mortgaged Property is
located, including but not limited to documentation as to the
method used in determining the applicability of the provisions
of the National Flood Insurance Act of 1968, as amended, to
the Mortgaged Property and documentation evidencing insurance
coverage. To the extent that original documents are
not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the
Seller may be in the form of microfilm or microfiche so long
as the Seller complies with the requirements of the Fannie Mae
Guides or prudent mortgage lenders who originate mortgage
loans similar to the Mortgage Loans in the jurisdiction where
the Mortgaged Property is located.
The
sale of each Mortgage Loan shall be reflected on the
Seller’s balance sheet and other financial statements as
a sale of assets by the Seller.
Subsection
6.03
Delivery of Mortgage Loan Documents .
The
Seller shall deliver and release to the Custodian no later
than two (2) Business Days prior to the related Closing Date
those Mortgage Loan Documents set forth on
Exhibit A hereto as required by the Custodial
Agreement with respect to each Mortgage Loan set forth on the
related Mortgage Loan Schedule.
The
Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial
Agreement for the related Closing Date, as evidenced by the
Initial Certification of the Custodian in the form annexed to
the Custodial Agreement. The Seller shall comply
with the terms of the Custodial Agreement and the Purchaser
shall pay all fees and expenses of the Custodian.
The
Seller shall forward to the Custodian, or after the related
Closing Date, to such other Person as the Purchaser shall
designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that
the Seller shall provide the Custodian, or to such other
Person as the Purchaser shall designate in writing, with a
certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall
promptly provide the original of any document submitted for
recordation or a copy of such document certified by the
appropriate public recording office or title closing agent to
be a true and complete copy of the original within ninety days
of its submission for recordation.
In
the event any document required to be delivered to the
Custodian in the Custodial Agreement, including an original or
copy of any document submitted for recordation to the
appropriate public recording office, is not so delivered to
the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related
Closing
Date
(other than with respect to the Assignments of Mortgage which
shall be delivered to the Custodian in blank and recorded
subsequently by the Purchaser or its designee), and in the
event that the Seller does not cure such failure within 30
days of discovery or receipt of written notification of such
failure from the Purchaser, the related Mortgage Loan shall,
upon the request of the Purchaser, be repurchased by such
Seller at the price and in the manner specified in
Subsection 9.03 . The foregoing
repurchase obligation shall not apply in the event that such
Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within
the specified period due to a delay caused by the recording
office in the applicable jurisdiction; provided that such
Seller shall instead deliver a recording receipt of such
recording office or, if such recording receipt is not
available, an officer’s certificate of a servicing
officer of such Seller, confirming that such documents have
been accepted for recording; provided that, upon request of
the Purchaser and delivery by the Purchaser to the Seller of a
schedule of the related Mortgage Loans, such Seller shall
reissue and deliver to the Purchaser or its designee said
officer’s certificate.
The
Seller shall pay all initial recording fees, if any, for the
assignments of mortgage and any other fees or costs in
transferring all original documents to the Custodian or, upon
written request of the Purchaser, to the Purchaser or the
Purchaser’s designee. The Purchaser or the
Purchaser’s designee shall be responsible for recording
the Assignments of Mortgage and shall be reimbursed by the
Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection
6.04
Quality Control Procedures .
The
Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of
the legal documents, credit documents, property appraisals,
and underwriting decisions. The program shall
include evaluating and monitoring the overall quality of the
Seller’s loan production and servicing
activities. The program is to ensure that the
Mortgage Loans are originated in accordance with the
Underwriting Guidelines; guard against dishonest, fraudulent,
or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
Subsection
6.05
MERS Designated Loans .
With
respect to each MERS Designated Mortgage Loan, the Seller
shall, on or prior to the related Closing Date, designate the
Purchaser as the Investor and the Custodian as custodian, and
no Person shall be listed as Interim Funder on the MERS
System. In addition, on or prior to the related
Closing Date, Seller shall provide the Custodian and the
Purchaser with a MERS Report listing the Purchaser as the
Investor, the Custodian as custodian and no Person as Interim
Funder with respect to each MERS Designated Mortgage
Loan.
SECTION
7.
Servicing of the Mortgage Loans.
The
Mortgage Loans have been sold by the Seller to the Purchaser
on a servicing released basis. Subject to, and upon
the terms and conditions of this Agreement, the Seller hereby
sells, transfers, assigns, conveys and delivers to the
Purchaser the Servicing Rights.
The
Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in
accordance with the terms and conditions set forth in this
section provided that if the related Transfer Date has not
occurred on or prior to the date which is 60 days after the
related Closing Date, the Purchaser and the Seller hereby
agrees to negotiate in good faith and enter into a more
detailed interim servicing agreement mutually acceptable to
the parties. The Seller shall service the Mortgage
Loans on an “actual/actual” basis and otherwise in
accordance with the Accepted Servicing Practices and the
following provisions of this section. The Seller
shall not be entitled to a servicing fee in connection with
the servicing of any Mortgage Loan hereunder.
In
servicing the Mortgage Loans, the Seller shall comply with all
applicable laws, rules and regulations with respect
thereto. The Seller shall take no action with
respect to any Mortgage Loan, including entering into any
litigation, or any agreement with the related Mortgagor,
without the prior written consent of the
Purchaser. The Seller shall promptly notify the
Purchaser in writing of any action which should be taken with
respect to any Mortgage Loan in accordance with Accepted
Servicing Practices. The Seller shall take no
action, and shall not refrain from taking action, which, in
either case, (a) would impair the ability of the
Purchaser to realize on or enforce the Mortgage Note or the
lien of the Mortgage or any other document related thereto or
(b) would jeopardize the rights or remedies available to
the Purchaser with respect to any Mortgage Loan or otherwise
impair the ability of the Purchaser to realize on the
Mortgaged Property with respect to such Mortgage
Loan.
The
Seller shall be obligated to make all advances on the Mortgage
Loans with respect to taxes and insurance premiums due and
owing (the “ T&I Servicing Advances
”). Any other servicing advances in excess of
$500 shall be made with the prior written consent of the
Purchaser. The Seller shall be required to notify
the Purchaser in writing of all advances in excess of $500
required to be made in order to further protect and preserve
the Purchaser’s interest in the Mortgage Loans and the
underlying Mortgaged Property (the “ Other Servicing
Advances ,” together with the T&I Servicing
Advances, the “ Servicing Advances ”), and
shall make such Other Servicing Advances in a timely fashion
unless otherwise instructed by the Purchaser. The
Seller shall be entitled to reimbursement for all Servicing
Advances from the Purchaser within 15 Business Days following
the Transfer Date.
The
Seller shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans, including Escrow
Payments, separate and apart from any of their own funds and
general assets in one or more Eligible Accounts.
The
Seller shall remit to the Purchaser on each Remittance Date
all amounts received from any source with respect to the
Mortgage Loans. On or prior to each Remittance Date
the Seller shall deliver to the Purchaser a remittance advice
in electronic format acceptable to the Purchaser as to the
accompanying remittance and the period ending on the related
Determination Date and shall additionally specify the number
of days which each Mortgage Loan is delinquent, and shall
contain an explanation of all Servicing Advances made, the
status of all Mortgage Loans in foreclosure or otherwise the
subject of litigation, and the status of all other collection
efforts with respect to each Mortgage Loan.
SECTION
8.
Transfer of Servicing.
On
the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and
the Seller shall cease all servicing responsibilities related
to, the related Mortgage Loans subject to such Transfer
Date. The Transfer Date shall be the date
determined in accordance with Section 7
herein.
On
or prior to the applicable Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary
or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or
its designee, including but not limited to the
following:
(a)
Notice to Mortgagors . The Seller shall mail
to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of
the related Mortgage Loan to the Purchaser, or its designee,
in accordance with the Cranston Gonzales National Affordable
Housing Act of 1990; provided, however, the content and format
of the letter shall have the prior approval of the
Purchaser. The Seller shall provide the Purchaser
with copies of all such related notices no later than the
Transfer Date.
(b)
Notice to Insurance Companies . The Seller
shall transmit to the applicable insurance companies
(including primary mortgage insurance policy insurers, if
applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions
to deliver all notices, tax bills and insurance statements, as
the case may be, to the Purchaser from and after the Transfer
Date. The Seller shall provide the Purchaser with
copies of all such notices no later than the Transfer
Date.
(c)
Delivery of Servicing Records . The Seller
shall forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Seller’s
possession relating to each related Mortgage
Loan.
(d)
Escrow Payments . The Seller shall provide
the Purchaser, or its designee, with immediately available
funds by wire transfer in the amount of the net Escrow
Payments and suspense balances and all loss draft balances
associated with the related Mortgage Loans. The
Seller shall provide the Purchaser with an accounting
statement, in electronic format acceptable to the Purchaser in
its sole discretion, of Escrow Payments and suspense balances
and loss draft balances sufficient to enable the Purchaser to
reconcile the amount of such payment with the accounts of the
Mortgage Loans. Additionally, the Seller shall wire
transfer to the Purchaser the amount of any agency, trustee or
prepaid Mortgage Loan payments and all other similar amounts
held by the Seller.
(e)
Payoffs and Assumptions . The Seller shall
provide to the Purchaser, or its designee, copies of all
assumption and payoff statements generated by the Seller on
the related Mortgage Loans from the related Cut-off Date to
the Transfer Date.
(f)
Mortgage Payments Received Prior to Transfer Date
. Prior to the Transfer Date all payments received
by the Seller on each related Mortgage Loan shall be properly
applied by the Seller to the account of the particular
Mortgagor.
(g)
Mortgage Payments Received after Transfer Date
. The amount of any related Monthly Payments
received by the Sellers after the Transfer Date shall be
forwarded to the Purchaser by overnight mail on the Business
Day following the date of receipt. The Seller shall
notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller
forwards with their payment sufficient information to permit
appropriate processing of the payment by the
Purchaser. The Seller shall assume full
responsibility for the necessary and appropriate legal
application of such Monthly Payments received by the Seller
after the Transfer Date with respect to related Mortgage Loans
then in foreclosure or bankruptcy; provided, for purposes of
this Agreement, necessary and appropriate legal application of
such Monthly Payments shall include, but not be limited to,
endorsement of a Monthly Payment to the Purchaser with the
particulars of the payment such as the account number, dollar
amount, date received and any special Mortgagor application
instructions and the Seller shall comply with the foregoing
requirements with respect to all Monthly Payments received by
the Seller after the Transfer Date.
(h)
Misapplied Payments . Misapplied payments
shall be processed as follows:
(i) All
parties shall cooperate in correcting misapplication
errors;
(ii) The
party receiving notice of a misapplied payment occurring prior
to the applicable Transfer Date and discovered after the
Transfer Date shall immediately notify the other
party;
(iii) If
a misapplied payment which occurred prior to the Transfer Date
cannot be identified and said misapplied payment has resulted
in a shortage, the Seller shall be liable for the amount of
such shortage. The Seller shall reimburse the
Purchaser for the amount of such shortage within thirty
(30) days after receipt of written demand therefor from
the Purchaser;
(iv) If
a misapplied payment which occurred prior to the Transfer Date
has created an improper Purchase Price as the result of an
inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment
application within seven (7) Business Days after notice
thereof by the other party; and
(v) Any
check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the
corresponding Seller and/or the Purchaser Mortgage Loan
identification number and an explanation of the allocation of
any such payments.
(i)
Books and Records . On the Transfer Date,
the books, records and accounts of the Seller with respect to
the related Mortgage Loans shall be in accordance with all
applicable Purchaser requirements.
(j)
Reconciliation . The Seller shall, on or
before the Transfer Date, reconcile principal balances and
make any monetary adjustments required by the
Purchaser. Any such monetary adjustments will be
transferred between the Seller and the Purchaser as
appropriate.
(k)
IRS Forms . The Seller shall file all IRS
forms 1099, 1099A, 1098 or 1041 and K-1 which are
required to be filed on or before the Transfer Date in
relation to the servicing and ownership of the related
Mortgage Loans. The Seller shall provide copies of
such forms to the Purchaser upon request and shall reimburse
the Purchaser for any costs or penalties incurred by the
Purchaser due to either Seller’s failure to comply with
this paragraph.
SECTION
9.
Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection
9.01
Representations and Warranties Regarding the Seller
.
The
Seller represents, warrants and covenants to the Purchaser
that as of the date hereof and as of each Closing
Date:
(a)
Due Organization and Authority . The Seller
is a Delaware corporation, validly existing, and in good
standing under the laws of its jurisdiction of
incorporation. The Seller has all licenses
necessary to carry on its business as now being conducted and
is licensed, qualified and in good standing in the states
where the Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct
business of the type conducted by the Seller. The
Seller has power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; the
execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered
pursuant to this Agreement) by the Seller and the consummation
of the transactions contemplated hereby have been duly and
validly authorized; this Agreement has been duly executed and
delivered and constitutes the valid, legal, binding and
enforceable obligation of the Seller, except as enforceability
may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other
similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether
enforcement is sought in a proceeding in equity or at
law. All requisite action has been taken by the
Seller to make this Agreement valid and binding upon the
Seller in accordance with its terms;
(b)
No Consent Required . No consent, approval,
authorization or order is required for the transactions
contemplated by this Agreement from any court, governmental
agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is required or, if
required, such consent, approval, authorization or order has
been or will, prior to the related Closing Date, be
obtained;
(c)
Ordinary Course of Business . The
consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the
Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable
jurisdiction;
(d)
No Conflicts . Neither the execution and
delivery of this Agreement, the acquisition or origination of
the Mortgage Loans by the Seller, the sale of the Mortgage
Loans to the Purchaser, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with
or result in a
breach
of any of the terms, conditions or provisions of the
Seller’s charter, by-laws or other organizational
documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it
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 result in the creation
or imposition of any lien, charge or encumbrance that would
have an adverse effect upon any of its properties pursuant to
the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans,
or impair the ability of the Purchaser to realize the full
amount of any insurance benefits accruing pursuant to this
Agreement;
(e)
No Litigation Pending . There is no action,
suit, proceeding or investigation pending or threatened
against the Seller, before any court, administrative agency or
other tribunal asserting the invalidity of this Agreement,
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in
any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated
herein, or which would be likely to impair materially the
ability of the Seller to perform under the terms of this
Agreement;
(f)
Ability to Perform; Solvency . The Seller
does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant
contained in this Agreement. The Seller is solvent
and the sale of the Mortgage Loans will not cause the Seller
to become insolvent. The sale of the Mortgage Loans
is not undertaken with the intent to hinder, delay or defraud
any of Seller’s creditors;
(g)
Seller’s Origination . The
Seller’s decision to originate any mortgage loan or to
deny any mortgage loan application is an independent decision
based upon the Underwriting Guidelines, and is in no way made
as a result of Purchaser’s decision to purchase, or not
to purchase, or the price Purchaser may offer to pay for, any
such mortgage loan, if originated;
(h)
Anti-Money Laundering Laws . The Seller has
complied with all applicable anti-money laundering laws,
regulations and executive orders, including without limitation
the USA Patriot Act of 2001 (collectively, the “
Anti-Money Laundering Laws ”); the Seller has
established an anti-money laundering compliance program as
required by the Anti-Money Laundering Laws, has conducted (or
the originator of the Mortgage Loan has conducted) the
requisite due diligence in connection with the origination of
each Mortgage Loan required by the Anti-Money Laundering Laws,
and has obtained and will maintain information identifying the
applicable Mortgagor as required by the Anti-Money Laundering
Laws. Additionally, no Mortgage Loan is subject to
nullification pursuant to Executive Order 13224 (the “
Executive Order ”) or the regulations promulgated
by the Office of Foreign Assets Control of the United States
Department of Treasury (the “ OFAC Regulations
”) or in violation of the Executive Order or the OFAC
Regulations; and no Mortgagor is subject to the provisions of
such
Executive
Order or the OFAC Regulations nor listed as a “blocked
person” for purposes of the OFAC
Regulations;
(i)
Financial Statements . The Seller has
delivered to the Purchaser financial statements as to its last
three complete fiscal years and any later quarter ended more
than 60 days prior to the execution of this
Agreement. All such financial statements fairly
present the pertinent results of operations and changes in
financial position for each of such periods and the financial
position at the end of each such period of the Seller and its
subsidiaries and have been prepared in accordance with
generally accepted accounting principles of the United States
consistently applied throughout the periods involved, except
as set forth in the notes thereto. There has been
no change in the business, operations, financial condition,
properties or assets of the Seller since the date of the
Seller’s financial statements that would have a material
adverse effect on its ability to perform its obligations under
this Agreement. The Seller has completed any forms
reasonably requested by the Purchaser in a timely manner and
in accordance with the provided instructions;
(j)
Selection Process . The Mortgage Loans were
selected from among the outstanding one- to four-family
mortgage loans in the Seller’s portfolio at the related
Closing Date as to which the representations and warranties
set forth in Subsection 9.02 could be made and
such selection was not made in a manner so as to affect
adversely the interests of the Purchaser;
(k)
Delivery to the Custodian . The Mortgage
Note, the Mortgage, the Assignment of Mortgage and any other
documents required to be delivered with respect to each
Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific
requirements of the Custodial Agreement. With
respect to each Mortgage Loan, the Seller will be in
possession of a complete Mortgage File in compliance with
Exhibit A hereto, except for such documents as
will be delivered to the Custodian;
(l)
Mortgage Loan Characteristics . The
characteristics of the related Mortgage Loan Package are as
set forth on the description of the pool characteristics for
the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form
attached as Exhibit B to each related Assignment
and Conveyance Agreement;
(m)
No Untrue Information . Neither this
Agreement nor any information, statement, tape, diskette,
report, form, or other document furnished or to be furnished
by or on behalf of the Seller pursuant to this Agreement or
any Reconstitution Agreement or in connection with the
transactions contemplated hereby (including any Securitization
Transaction or Whole Loan Transfer) contains or (up to the
applicable Transfer Date) will contain any untrue statement of
fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not
misleading;
(n)
No Brokers . The Seller has not dealt with
any broker, investment banker, agent or other person that may
be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans;
(o)
Sale Treatment . The Seller expects to be advised by
its independent certified public accountants that under
generally accepted accounting principles the transfer of the
Mortgage Loans will be treated as a sale on the books and
records of the Seller and the Seller has determined that the
disposition of the Mortgage Loans to the Purchaser pursuant to
this Agreement will be afforded sale treatment for tax and
accounting purposes;
(p)
Owner of Record . The Seller is the owner of
record of each Mortgage and the indebtedness evidenced by each
Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller
will be the owner of record of each Mortgage and the
indebtedness evidenced by each Mortgage Note, and upon the
sale of the Mortgage Loans to the Purchaser, the Seller will
retain the Mortgage Files with respect thereto in trust only
for the purpose of servicing and supervising the servicing of
each Mortgage Loan; and
(q)
Reasonable Purchase Price . The
consideration received by the Seller upon the sale of the
Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage
Loans.
Subsection
9.02
Representations and Warranties Regarding Individual
Mortgage Loans .
The
Seller hereby represents and warrants to the Purchaser that,
as to each Mortgage Loan, as of the related Closing Date for
such Mortgage Loan:
(a)
Mortgage Loans as Described . The
information set forth in the related Mortgage Loan Schedule is
complete, true and correct;
(b)
Payments Current . All payments required to
be made up to the related Closing Date for the Mortgage Loan
under the terms of the Mortgage Note, other than payments not
yet 30 days delinquent, have been made and
credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor has any payment under
the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan. The
first Monthly Payment shall be made with respect to the
Mortgage Loan on its related Due Date or within thirty (30)
days thereafter, all in accordance with the terms of the
related Mortgage Note;
(c)
No Outstanding Charges . There are no
defaults in complying with the terms of the Mortgage, and all
taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground
rents which previously became due and owing have been paid, or
an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and
which has been assessed but is not yet due and
payable. The Seller has not advanced funds, or
induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage
Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of
principal and interest;
(d)
Original Terms Unmodified . The terms of the
Mortgage Note and Mortgage have not been impaired, waived,
altered or modified in any respect, from the date of
origination except by a written instrument which has been
recorded, if necessary to protect the interests of the
Purchaser, and which has been delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing,
and the terms of which are reflected in the related Mortgage
Loan Schedule. The substance of any such waiver,
alteration or modification has been approved by the title
insurer, if any, to the extent required by the policy, and its
terms are reflected on the related Mortgage Loan Schedule, if
applicable. No Mortgagor has been released, in
whole or in part, except in connection with an assumption
agreement, approved by the issuer of the title insurer, to the
extent required by the policy, and which assumption agreement
is part of the Mortgage Loan File delivered to the Custodian
or to such other Person as the Purchaser shall designate in
writing and the terms of which are reflected in the related
Mortgage Loan Schedule;
(e)
No Defenses . The Mortgage Loan is not
subject to any right of rescission, set-off, counterclaim or
defense, including without limitation the defense of usury,
nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder,
render either the Mortgage Note or the Mortgage unenforceable,
in whole or in part and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect
thereto;
(f)
Hazard Insurance . Pursuant to the terms of
the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable
insurer against loss by fire, hazards of extended coverage and
such other hazards as are provided for in the Fannie Mae
Guides or by Freddie Mac or those of prudent mortgage lenders
who originate mortgage loans similar to the Mortgage Loans in
the jurisdiction where the related Mortgaged Property is
located. If required by the National Flood
Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance
Administration as in effect which policy conforms to Fannie
Mae and Freddie Mac requirements or those of prudent mortgage
lenders who originate mortgage loans similar to the Mortgage
Loans in the jurisdiction where the related Mortgaged Property
is located. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy
at the Mortgagor’s cost and expense, and on the
Mortgagor’s failure to do so, authorizes the holder of
the Mortgage to obtain and maintain such insurance at such
Mortgagor’s cost and expense, and to seek reimbursement
therefor from the Mortgagor. Where required by
state law or regulation, the Mortgagor has been given an
opportunity to choose the carrier of the required hazard
insurance, provided the policy is not a “ master
” or “ blanket ” hazard insurance
policy covering a condominium, or any hazard insurance policy
covering the common facilities of a planned unit
development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force
and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the
transactions contemplated by this
Agreement. Neither the Seller nor the related
Mortgagor has engaged in any act or omission which would
impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding
effect of either including, without limitation, no unlawful
fee, commission, kickback or other unlawful compensation or
value of any kind has been or will be
received,
retained or realized by any attorney, firm or other person or
entity, and no such unlawful items have been received,
retained or realized by the Seller;
(g)
Compliance with Applicable Laws . Any and
all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal
credit opportunity, disclosure and all predatory, abusive and
fair lending laws applicable to the Mortgage Loan, including,
without limitation, any provisions relating to the Illinois
Interest Act and Prepayment Penalties, have been complied
with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or
regulations, and the Seller shall maintain in its possession,
available for the Purchaser’s inspection, and shall
deliver to the Purchaser upon demand, evidence of compliance
with all such requirements. This representation and
warranty is a Deemed Material and Adverse
Representation;
(h)
No Satisfaction of Mortgage . The Mortgage
has not been satisfied, canceled, subordinated or rescinded,
in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part,
nor has any instrument been executed that would effect any
such release, cancellation, subordination or
rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the
Mortgagor’s failure to perform such action would cause
the Mortgage Loan to be in default, nor has the Seller waived
any default resulting from any action or inaction by the
Mortgagor;
(i)
Type of Mortgaged Property . The Mortgaged
Property is a fee simple estate, or a leasehold estate located
in a jurisdiction in which the use of a leasehold estate for
residential properties is a widely-accepted practice, that
consists of a single parcel of real property with a detached
single family residence erected thereon, or a two- to
four-family dwelling, or an individual residential condominium
unit in a condominium project, or an individual unit in a
planned unit development, or an individual unit in a
residential cooperative housing corporation; provided,
however, that any condominium unit, planned unit development
or residential cooperative housing corporation shall conform
with the Underwriting Guidelines. No portion of the
Mortgaged Property is used for commercial purposes, and since
the date of origination, no portion of the Mortgaged Property
has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be
considered as being used for commercial purposes as long as
the Mortgaged Property has not been altered for commercial
purposes and is not storing any chemicals or raw materials
other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the
Mortgaged Properties are Manufactured Homes, log homes, mobile
homes, geodesic domes or other unique property
types;
(j)
Valid First or Second Lien . The Mortgage is
a valid, subsisting, enforceable, except only as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by
general principles of equity (whether considered in a
proceeding or action in equity or at law) and perfected, first
lien (with respect to a First Lien Loan) or second lien (with
respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or
annexed to such buildings, and all
additions,
alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject
only to:
(A) with
respect to a Second Lien Loan only, the lien of the first
mortgage on the Mortgaged Property;
(B) the
lien of current real property taxes and assessments not yet
due and payable;
(C) covenants,
conditions and restrictions, rights of way, easements and
other matters of the public record as of the date of recording
acceptable to prudent mortgage lending institutions generally
and specifically referred to in the lender’s title
insurance policy delivered to the originator of the Mortgage
Loan and (A) specifically referred to or otherwise
considered in the appraisal made for the originator of the
Mortgage Loan or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(D) other
matters to which like properties are commonly subject which do
not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment,
value or marketability of the related Mortgaged
Property.
Any
security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting, enforceable,
except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally
and by general principles of equity (whether considered in a
proceeding or action in equity or at law), and perfected first
lien (with respect to a First Lien Loan) or second lien (with
respect to a Second Lien Loan) and first priority (with
respect to a First Lien Loan) or second priority
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