LEHMAN BROTHERS HOLDINGS
INC.,
SELLER
and
STRUCTURED ASSET SECURITIES
CORPORATION,
PURCHASER
MORTGAGE LOAN SALE AND ASSIGNMENT
AGREEMENT
Dated as of February 1,
2007
BNC Mortgage Loan Trust
2007-1
Mortgage Pass-Through Certificates,
Series 2007-1
TABLE OF CONTENTS
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Page
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ARTICLE I.
CONVEYANCE OF MORTGAGE LOANS
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2
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3
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3
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Representations
and Warranties of the Seller
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3
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15
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15
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ARTICLE II.
MISCELLANEOUS PROVISIONS
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Binding Nature
of Agreement; Assignment
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15
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15
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15
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16
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Severability of
Provisions
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17
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17
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Headings Not to
Affect Interpretation
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17
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17
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SCHEDULE
A
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Mortgage Loan
Schedule (including Prepayment Charge Schedule)
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SCHEDULE
B
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Mortgage Loan
Schedule for First Payment Default Mortgage Loans
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SCHEDULE
B
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Mortgage Loan
Schedule for First Payment Default Mortgage Loans
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EXHIBIT
A
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Certain Defined
Terms
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SCHEDULE
B
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Form of Terms
Letter
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This MORTGAGE LOAN SALE AND ASSIGNMENT
AGREEMENT, dated as of February 1, 2007 (the
“Agreement”), is executed by and between Lehman
Brothers Holdings Inc. (“LBH” or the
“Seller”) and Structured Asset Securities Corporation
(the “Depositor”).
All capitalized terms not defined herein or in
Exhibit A attached hereto shall have the same meanings assigned to
such terms in that certain trust agreement (the “Trust
Agreement”) dated as of February 1, 2007, among the
Depositor, Aurora Loan Services LLC, as master servicer (the
“Master Servicer”), Wells Fargo Bank, N.A., as
securities administrator, Clayton Fixed Income Services Inc., as
credit risk manager and U.S. Bank National Association, as trustee
(the “Trustee”).
WITNESSETH:
WHEREAS, Lehman Brothers Bank, FSB (the
“Bank”) has purchased from BNC Mortgage, Inc. (the
“Originator”) certain mortgage loans, each as
identified on the Mortgage Loan Schedule attached hereto as
Schedule A (collectively, the “Mortgage
Loans”);
WHEREAS, pursuant to an assignment and
assumption agreement (the “Assignment and Assumption
Agreement”) dated as of February 1, 2007, between the
Bank, as assignor, and LBH, as assignee, the Bank has sold all of
its right, title and interest in and to the Mortgage Loans to LBH
and LBH has accepted such assignment;
WHEREAS, LBH is a party to the following
servicing agreements (collectively, the “Servicing
Agreements”) pursuant to which the Mortgage Loans are to be
initially serviced by certain servicers as indicated below (each, a
“Servicer,” and collectively, the
“Servicers”):
1. Securitization Servicing Agreement dated as of
February 1, 2007, by and among LBH, JPMorgan Chase Bank,
National Association, as servicer, and the Master Servicer, and
acknowledged by the Trustee;
2. Subservicing Agreement dated as of
February 1, 2007, by and among LBH, Option One Mortgage
Corporation, as servicer, and the Master Servicer, and acknowledged
by the Trustee; and
3. Securitization Subservicing Agreement dated as
of February 1, 2007, by and among LBH, Wells Fargo Bank, N.A.,
as servicer, and the Master Servicer, and acknowledged by the
Trustee;
WHEREAS, the Seller desires to sell, without
recourse, all of its rights, title and interest in and to the
Mortgage Loans to the Depositor and assign all of its rights and
interest under the Servicing Agreements (other than the servicing
rights) relating to the Mortgage Loans referred to above, and
delegate all of its obligations thereunder, to the Depositor;
and
WHEREAS, the Seller and the Depositor
acknowledge and agree that the Depositor will convey the Mortgage
Loans on the Closing Date to the Trust Fund created pursuant to the
Trust Agreement, assign all of its rights and delegate all of its
obligations hereunder to the Trustee for the benefit of the
Certificateholders, and that each reference herein to the Depositor
is intended, unless otherwise specified, to mean the Depositor or
the Trustee, as assignee, whichever is the owner of the Mortgage
Loans from time to time.
NOW, THEREFORE, in consideration of the mutual
agreements herein set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the Seller and the Depositor agree as
follows:
ARTICLE I.
CONVEYANCE OF MORTGAGE
LOANS
Section 1.01. Sale of Mortgage Loans .
(a) Sale of Mortgage Loans . Concurrently with the execution and delivery
of this Agreement, the Seller does hereby transfer, assign, set
over, deposit with and otherwise convey to the Depositor, without
recourse, subject to Sections 1.03 and 1.04, (i) all the right,
title and interest of the Seller in and to the Mortgage Loans
identified on Schedule A hereto, having an aggregate principal
balance as of the Cut-off Date of $977,074,930.84 and (ii) all of
its rights and interest (other than the servicing rights) in the
Servicing Agreements. Such conveyance in clause (i) of the
preceding sentence includes, without limitation, the right to all
distributions of principal and interest received on or with respect
to the Mortgage Loans on and after the Cut-off Date, other than
payments of principal and interest due on or before such date, and
all such payments due after such date but received prior to such
date and intended by the related Mortgagors to be applied after
such date, all Prepayment Charges received on or with respect to
the Mortgage Loans on or after the Cut-off Date, together with all
of the Seller’s right, title and interest in and to each
related account and all amounts from time to time credited to and
the proceeds of such account, any REO Property and the proceeds
thereof, the Seller’s rights under any Insurance Policies
relating to the Mortgage Loans, the Seller’s security
interest in any collateral pledged to secure the Mortgage Loans,
including the Mortgaged Properties, and any proceeds of the
foregoing.
Concurrently with the execution hereof, the
Depositor tenders the purchase price set forth in that certain
terms letter dated as of the date hereof (the “Terms
Letter”), the form of which is attached as Exhibit B hereto
(the “Purchase Price”). The Depositor hereby accepts
such assignment and delegation, and shall be entitled to exercise
all the rights of the Seller under the Servicing Agreements, other
than any servicing rights thereunder, as if the Depositor had been
a party to such agreement.
(b) Schedules of Mortgage Loans
. The Depositor and the Seller have
agreed upon which of the Mortgage Loans owned by the Seller are to
be purchased by the Depositor pursuant to this Agreement and the
Seller will prepare on or prior to the Closing Date a final
schedule describing such Mortgage Loans (the “Mortgage Loan
Schedule”). The Mortgage Loan Schedule shall conform to the
requirements of the Depositor as set forth in this Agreement and to
the definition of “Mortgage Loan Schedule” under the
Trust Agreement. A copy of the final Mortgage Loan Schedule shall
be attached hereto as Schedule A.
Section
1.02. Delivery of Documents .
(a) In connection with such transfer and assignment
of the Mortgage Loans hereunder, the Seller shall, at least three
(3) Business Days prior to the Closing Date, deliver, or cause to
be delivered, to the Depositor (or its designee) the documents or
instruments with respect to each Mortgage Loan (each, a
“Mortgage File”) so transferred and assigned
hereunder.
(b) For Mortgage Loans (if any) that have been
prepaid in full on or after the Cut-off Date and prior to the
Closing Date, the Seller, in lieu of delivering the related
Mortgage Files, herewith delivers to the Depositor an
Officer’s Certificate which shall include a statement to the
effect that all amounts received in connection with such prepayment
that are required to be deposited in the Collection Account
maintained by the Master Servicer for such purpose have been so
deposited.
Section 1.03. Review of Documentation .
The Depositor, by execution and delivery hereof,
acknowledges receipt of the Mortgage Files pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule, subject to
review thereof by Deutsche Bank National Trust Company (the
“Custodian”), for the Depositor. The Custodian is
required to review, within 45 days following the Closing Date, each
Mortgage File. If in the course of such review the Custodian
identifies any Material Defect, the Seller shall be obligated to
cure such Material Defect or to repurchase the related Mortgage
Loan from the Depositor (or, at the direction of and on behalf of
the Depositor, from the Trust Fund), or to substitute a Qualifying
Substitute Mortgage Loan therefor, in each case to the same extent
and in the same manner as the Depositor is obligated to the Trustee
and the Trust Fund under Section 2.02(c) of the Trust
Agreement.
Section 1.04. Representations and Warranties of the
Seller .
(a) The Seller hereby represents and warrants to
the Depositor that as of the Closing Date:
(i) the Seller is a corporation duly organized,
validly existing and in good standing under the laws governing its
creation and existence and has full corporate power and authority
to own its property, carry on its business as presently conducted
and enter into and perform its obligations under the Assignment and
Assumption Agreement and this Agreement;
(ii) the execution and delivery by the Seller of the
Assignment and Assumption Agreement and this Agreement have been
duly authorized by all necessary corporate action on the part of
the Seller; neither the execution and delivery of the Assignment
and Assumption Agreement or this Agreement, nor the consummation of
the transactions therein or herein contemplated, nor compliance
with the provisions thereof or hereof, will conflict with or result
in a breach of, or constitute a default under, any of the
provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Seller or its properties or the
certificate of incorporation or bylaws of the Seller;
(iii) the execution, delivery and performance by the
Seller of the Assignment and Assumption Agreement and this
Agreement and the consummation of the transactions contemplated
thereby and hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any
other action in respect of, any state, federal or other
governmental authority or agency, except such as has been obtained,
given, effected or taken prior to the date hereof;
(iv) each of the Assignment and Assumption Agreement
and this Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by
the Bank, in the case of the Assignment and Assumption Agreement,
and the Depositor, in the case of this Agreement, constitutes a
valid and binding obligation of the Seller enforceable against it
in accordance with its respective terms, except as such
enforceability may be subject to (A) applicable bankruptcy and
insolvency laws and other similar laws affecting the enforcement of
the rights of creditors generally and (B) general principles of
equity regardless of whether such enforcement is considered in a
proceeding in equity or at law; and
(v) there are no actions, suits or proceedings
pending or, to the knowledge of the Seller, threatened or likely to
be asserted against or affecting the Seller, before or by any
court, administrative agency, arbitrator or governmental body (A)
with respect to any of the transactions contemplated by the
Assignment and Assumption Agreement or this Agreement or (B) with
respect to any other matter which in the judgment of the Seller
will be determined adversely to the Seller and will if determined
adversely to the Seller materially and adversely affect it or its
business, assets, operations or condition, financial or otherwise,
or adversely affect its ability to perform its obligations under
the Assignment and Assumption Agreement or this
Agreement.
(b) The Seller represents and warrants upon
delivery of the Mortgage Loans to the Depositor hereunder, as to
each, that, as of the Closing Date:
(i) The information set forth with respect to the
Mortgage Loans on the Mortgage Loan Schedule provides an accurate
listing of the Mortgage Loans, and the information with respect to
each Mortgage Loan on the Mortgage Loan Schedule is true and
correct in all material respects at the date or dates respecting
which such information is given;
(ii) There are no defaults (other than delinquency
in payment) in complying with the terms of any Mortgage, and the
Seller has no notice as to any taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing but
which have not been paid;
(iii) Except in the case of Cooperative Loans, if
any, each Mortgage requires all buildings or other improvements on
the related Mortgaged Property to be insured by a generally
acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where
the related Mortgaged Property is located pursuant to insurance
policies conforming to the requirements of the guidelines of Fannie
Mae or Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal
Register 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 Flood Insurance
Administration is in effect, which policy conforms to the
requirements of the current guidelines of the Federal Flood
Insurance Administration. Each Mortgage obligates the related
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, each Mortgagor has been
given an opportunity to choose the carrier of the required hazard
insurance, provided the policy is not a “master” or
“blanket” hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance
policy is the valid and binding obligation of the insurer, is in
full force and effect, and will be in full force and effect and
inure to the benefit of the Depositor upon the consummation of the
transactions contemplated by this Agreement;
(iv) Each Mortgage has not been satisfied,
cancelled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed
that would effect any such release, cancellation, subordination or
rescission;
(v) In the case of approximately 98.48% and 1.52%
of the Mortgage Loans (by Scheduled Principal Balance as of the
Cut-off Date), the related Mortgage evidences a valid, subsisting,
enforceable and perfected first lien or second lien, respectively,
on the related Mortgaged Property (including all improvements on
the Mortgaged Property). The lien of the Mortgage is subject only
to: (1) the first Mortgage, in the case of a Mortgaged Property
that is secured by a perfected second lien, (2) liens of current
real property taxes and assessments not yet due and payable and, if
the related Mortgaged Property is a condominium unit, any lien for
common charges permitted by statute, (3) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage acceptable to
mortgage lending institutions in the area in which the related
Mortgaged Property is located and specifically referred to in the
lender’s Title Insurance Policy or attorney’s opinion
of title and abstract of title delivered to the originator of such
Mortgage Loan, and (4) such 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 the Mortgage. In the case of
approximately 98.48% of the Mortgage Loans (by Scheduled Principal
Balance as of the Cut-off Date), any security agreement, chattel
mortgage or equivalent document related to, and delivered to the
Trustee in connection with, a Mortgage Loan establishes a valid,
subsisting and enforceable first lien on the property described
therein and the Depositor has full right to sell and assign the
same to the Trustee;
(vi) Immediately prior to the transfer and
assignment of the Mortgage Loans to the Depositor, the Seller was
the sole owner of record and holder of each Mortgage Loan, and the
Seller had good and marketable title thereto, and has full right to
transfer and sell each Mortgage Loan to the Depositor free and
clear, except as described in paragraph (v) above, of any
encumbrance, equity, participation interest, lien, pledge, charge,
claim or security interest, and has full right and authority,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this
Agreement;
(vii) Each Mortgage Loan other than any Cooperative
Loan is covered by either (i) an attorney’s opinion of title
and abstract of title the form and substance of which is generally
acceptable to mortgage lending institutions originating mortgage
loans in the locality where the related Mortgaged Property is
located or (ii) an ALTA Mortgagee Title Insurance Policy or other
generally acceptable form of policy of insurance, issued by a title
insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the originator of the
Mortgage Loan, and its successors and assigns, as to the first
priority lien of the Mortgage in the original principal amount of
the Mortgage Loan (subject only to the exceptions described in
paragraph (v) above). If the Mortgaged Property is a condominium
unit located in a state in which a title insurer will generally
issue an endorsement, then the related Title Insurance Policy
contains an endorsement insuring the validity of the creation of
the condominium form of ownership with respect to the project in
which such unit is located. With respect to any Title Insurance
Policy, the originator is the sole insured of such mortgagee Title
Insurance Policy, such mortgagee Title Insurance Policy is in full
force and effect and will inure to the benefit of the Depositor
upon the consummation of the transactions contemplated by this
Agreement, no claims have been made under such mortgagee Title
Insurance Policy and no prior holder of the related Mortgage,
including the Seller, has done, by act or omission, anything that
would impair the coverage of such mortgagee Title Insurance
Policy;
(viii) No foreclosure action is being threatened or
commenced with respect to any Mortgage Loan. There is no proceeding
pending for the total or partial condemnation of any Mortgaged
Property (or, in the case of any Cooperative Loan, the related
cooperative unit) and each such property is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or
other casualty, so as to have a material adverse effect on the
value of the related Mortgaged Property as security for the related
Mortgage Loan or the use for which the premises were
intended;
(ix) There are no mechanics’ or similar liens
or claims which have been filed for work, labor or material (and no
rights are outstanding that under the law could give rise to such
liens) affecting the related Mortgaged Property which are or may be
liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(x) Each Mortgage Loan will have a CLTV of 100% or
less as of the Closing Date;
(xi) Each Mortgage Loan is a “qualified
mortgage” within the meaning of Section 860G of the Code and
Treas. Reg. §1.860G-2;
(xii) Each Mortgage Loan at the time it was
originated complied in all material respects with applicable local,
state and federal laws, including, but not limited to, all
applicable local, state and federal predatory, abusive and fair
lending laws; and, specifically, (a) no Mortgage Loan secured by a
Mortgaged Property located in New Jersey is a “High-Cost Home
Loan” as defined in the New Jersey Home Ownership Act
effective November 27, 2003 (N.J.S.A. 46:10B-22 et seq.); (b) no
Mortgage Loan secured by a Mortgaged Property located in New Mexico
is a “High-Cost Home Loan” as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004 (N.M. Stat. Ann.
§§ 58-21A-1 et. seq.); (c) no Mortgage Loan secured
by a Mortgaged Property located in Massachusetts is a
“High-Cost Home Mortgage Loan” as defined in the
Massachusetts Predatory Home Loan Practices Act effective November
7, 2004 (Mass. Ann. Laws Ch. 183C); and (d) no Mortgage Loan
secured by a Mortgaged Property located in Indiana is a “High
Cost Home Loan” as defined in the Indiana Home Loan Practices
Act effective January 1, 2005 (Ind. Code Ann. § 24-9-1 et
seq.);
(xiii) 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(d), Appendix E. In
addition, no Mortgage Loan is a “high-cost,”
“high-cost home,” “covered,”
“high-risk home” or “predatory” loan under
any applicable federal, state or local predatory or abusive lending
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);
(xiv) No Mortgage Loan is covered by the Home
Ownership and Equity Protection Act of 1994 (“HOEPA”)
and its implementing regulations, including 12 CFR §
226.32(a)(1)(i) and (ii). As part of its due diligence process,
Seller conducted a statistically relevant sampling of approximately
18.53% of the Mortgage Loans. The Mortgage Loans sampled include
refinance, home equity, and purchase loans. None of the Mortgage
Loans sampled exceeds the thresholds set by HOEPA. Seller confirms
that its sampling procedure is effective in identifying loans that
exceed the thresholds set by HOEPA. Seller is not aware that any of
Mortgage Loans that were not sampled exceed the thresholds set by
HOEPA;
(xv) The information set forth in the Prepayment
Charge Schedule, included as part of the Mortgage Loan Schedule at
Schedule A hereto (including the Prepayment Charge Summary attached
thereto) is complete, true and correct in all material respects on
the dat
