EXHIBIT 10.1
Form of Mortgage Loan Sale and
Servicing Agreement for Residential
Mortgage Pass-Through Certificates
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MORTGAGE LOAN SALE AND SERVICING AGREEMENT
between
[_______________________________________],
as Seller and as Servicer
and
MORGAN STANLEY MORTGAGE CAPITAL INC.,
as Purchaser
Dated as of [_________, 200__]
Conventional,
Fixed and Adjustable Rate,
Residential Mortgage Loans
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TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS...................................................1
SECTION 2. PURCHASE AND
CONVEYANCE......................................18
SECTION 3. MORTGAGE LOAN
SCHEDULE.......................................18
SECTION 4. PURCHASE
PRICE...............................................19
SECTION 5. EXAMINATION OF
MORTGAGE FILES................................19
SECTION 6. DELIVERY OF
MORTGAGE LOAN DOCUMENTS..........................19
Subsection 6.01
Possession of Mortgage
Files............................19
Subsection 6.02
Books and
Records.......................................20
Subsection 6.03
Delivery of Mortgage
Loan Documents.....................20
Subsection 6.04
MERS Designated
Loans...................................21
SECTION 7. REPRESENTATIONS,
WARRANTIES AND COVENANTS; REMEDIES FOR
BREACH.......................................................22
Subsection 7.01
Representations and
Warranties Regarding Individual
Mortgage Loans..........................................22
Subsection 7.02
Seller
Representations..................................36
Subsection 7.03
Remedies for Breach of
Representations and
Warranties..............................................39
Subsection 7.04
Repurchase of Mortgage
Loans with Early Payment
Defaults................................................42
Subsection 7.05
Premium
Recapture.......................................42
SECTION 8.
CLOSING......................................................42
SECTION 9. CLOSING
DOCUMENTS............................................42
SECTION 10.
COSTS........................................................44
SECTION 11. ADMINISTRATION AND
SERVICING OF THE MORTGAGE LOANS...........44
Subsection 11.01
Servicer to Act as Servicer.............................44
Subsection 11.02
Liquidation of Mortgage Loans...........................45
Subsection 11.03
Collection of Mortgage Loan Payments....................46
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Subsection 11.04
Establishment of Custodial Account; Deposits in
Custodial Account.......................................46
Subsection 11.05
Withdrawals From the Custodial Account..................47
Subsection 11.06
Establishment of Escrow Account; Deposits in Escrow
Account.................................................48
Subsection 11.07
Withdrawals From Escrow Account.........................49
Subsection 11.08
Payment of Taxes, Insurance and Other Charges;
Collections Thereunder..................................49
Subsection 11.09
Transfer of Accounts....................................51
Subsection 11.10
Maintenance of Hazard Insurance.........................51
Subsection 11.11
Fidelity Bond; Errors and Omissions Insurance...........51
Subsection 11.12
Title, Management and Disposition of REO Property.......52
Subsection 11.13
Servicing Compensation..................................53
Subsection 11.14
Distributions...........................................53
Subsection 11.15
Statements to the Purchaser.............................53
Subsection 11.16
Advances by the Servicer................................54
Subsection 11.17
Assumption Agreements...................................55
Subsection 11.18
Satisfaction of Mortgages and Release of Mortgage
Files...................................................55
Subsection 11.19 Annual Statement
as to Compliance.......................56
Subsection 11.20
Annual Independent Public Accountants' Servicing
Report or Attestation...................................56
Subsection 11.21
Servicer Shall Provide Access and Information as
Reasonably Required.....................................56
Subsection 11.22
Transfer of Servicing...................................57
Subsection 11.23
Notification of Maturity Date...........................59
Subsection 11.24
Notification of Adjustments.............................59
SECTION 12. THE
SERVICER.................................................59
Subsection 12.01
Indemnification; Third Party Claims.....................60
Subsection 12.02
Merger or Consolidation of the Servicer.................61
Subsection 12.03
Limitation on Liability of the Servicer and Others......61
Subsection 12.04
Seller and Servicer Not to Resign.......................62
SECTION 13.
DEFAULT......................................................62
Subsection 13.01
Events of Default.......................................62
Subsection 13.02
Waiver of Defaults......................................63
SECTION 14.
TERMINATION..................................................63
Subsection 14.01
Termination.............................................63
Subsection 14.02
Termination of the Servicer Without Cause...............64
Subsection 14.03
Successors to the Servicer..............................64
SECTION 15. COOPERATION OF SELLER
WITH A RECONSTITUTION..................65
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SECTION 16.
NOTICES......................................................67
SECTION 17. SEVERABILITY
CLAUSE..........................................68
SECTION 18. NO
PARTNERSHIP...............................................68
SECTION 19.
COUNTERPARTS.................................................68
SECTION 20. GOVERNING LAW
JURISDICTION; CONSENT TO SERVICE OF PROCESS....68
SECTION 21. MANDATORY DELIVERY;
GRANT OF SECURITY INTEREST...............69
SECTION 22. INTENTION OF THE
PARTIES.....................................69
SECTION 23. SUCCESSORS AND
ASSIGNS.......................................69
SECTION 24.
WAIVERS......................................................70
SECTION 25.
EXHIBITS.....................................................70
SECTION 26. GENERAL INTERPRETIVE
PRINCIPLES..............................70
SECTION 27. REPRODUCTION OF
DOCUMENTS....................................70
SECTION 28.
AMENDMENT....................................................70
SECTION 29.
CONFIDENTIALITY..............................................71
SECTION 30. ENTIRE
AGREEMENT.............................................71
SECTION 31. FURTHER
AGREEMENTS...........................................71
SECTION 32. NO
SOLICITATION..............................................71
SECTION 33. WAIVER OF JURY
TRIAL.........................................72
SECTION 34. COMPLIANCE WITH
REGULATION AB................................72
Subsection 34.01
Intent of the Parties; Reasonableness...................72
Subsection 34.02
Additional Representations and Warranties of the
Seller..................................................73
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Subsection 34.03
Information to Be Provided by the Seller................73
Subsection 34.04
Servicer Compliance Statement...........................78
Subsection 34.05
Report on Assessment of Compliance and Attestation......78
Subsection 34.06
Use of Subservicers and Subcontractors..................79
Subsection 34.07
Indemnification; Remedies...............................80
EXHIBITS
EXHIBIT 1 MORTGAGE LOAN
DOCUMENTS
EXHIBIT 2 CONTENTS OF EACH
MORTGAGE FILE
EXHIBIT 3 FORM OF
INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT 4 FORM OF
CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF
CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ESCROW
ACCOUNT CERTIFICATION
EXHIBIT 7 FORM OF ESCROW
ACCOUNT LETTER AGREEMENT
EXHIBIT 8 SELLER'S
UNDERWRITING GUIDELINES
EXHIBIT 9 FORM OF MONTHLY
REMITTANCE REPORT
EXHIBIT 10
FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 11
FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 12
FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT 13
FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT 14
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT 15
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT 16
FORM OF ANNUAL CERTIFICATION
EXHIBIT 17
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
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MORTGAGE LOAN SALE AND SERVICING AGREEMENT
THIS MORTGAGE LOAN SALE AND SERVICING AGREEMENT (the
"Agreement"),
dated as of [___________, 200__], is hereby executed by and between
MORGAN
STANLEY MORTGAGE CAPITAL INC., a New York corporation (the
"Purchaser"), and
[_____________________], a [_____________________], in its capacity
as seller
(the "Seller") and in its capacity as servicer (the
"Servicer").
W I T N E S S E T H:
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WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to
time, from the
Seller, certain conventional fixed and adjustable rate residential
first-lien
mortgage loans (the "Mortgage Loans") on a servicing-retained 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 lien on a residential
dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule
for the
related Mortgage Loan Package;
WHEREAS, the Purchaser, the Seller and the Servicer 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 pass-through 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, the
Seller and the Servicer 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 Procedures: Procedures (including collection
procedures) that the Servicer customarily employs and exercises in
servicing and
administering mortgage loans for its own account that are similar
to the
Mortgage Loans and which are in accordance with accepted mortgage
servicing
practices of prudent mortgage lending institutions which service
mortgage loans
of the same type as the Mortgage Loans in the jurisdictions where
the related
Mortgaged Properties are located.
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Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant
to
this Agreement, the Mortgage Interest Rate of which is adjusted
from time to
time in accordance with the terms of the related Mortgage Note.
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 Sale and Servicing Agreement
including
all exhibits, schedules, amendments and supplements hereto.
ALTA: The American Land Title Association.
Appraised Value: With respect to any Mortgaged Property, the
lesser
of (i) the value thereof as determined by an appraisal made for the
originator
of the Mortgage Loan at the time of origination of the Mortgage
Loan by a
Qualified Appraiser and (ii) the purchase price paid for the
related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan;
provided,
however, that in the case of a Refinanced Mortgage Loan, such value
of the
Mortgaged Property is based solely upon the value determined by an
appraisal
made for the originator of such Refinanced Mortgage Loan at the
time of
origination of such Refinanced Mortgage Loan by a Qualified
Appraiser.
Assignment and Conveyance Agreement: As defined in Section 2.
Assignment of Mortgage: An individual assignment of the
Mortgage,
notice of transfer or equivalent instrument in recordable form and
in blank,
sufficient under the laws of the jurisdiction in which the related
Mortgaged
Property is located to give record notice of 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 a Saturday or Sunday, or a day
on
which banking and savings and loan institutions in the state in
which (i) the
Servicer is located or (ii) the Custodial Account is maintained,
are authorized
or obligated by law or executive order to be closed.
Cash-Out Refinance: A Refinanced Mortgage Loan in which the
proceeds
received were in excess of the amount of funds required to repay
the principal
balance of any existing first mortgage on the related Mortgaged
Property, pay
related closing costs and satisfy
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any outstanding subordinate mortgages on the related Mortgaged
Property and
which provided incidental cash to the related Mortgagor of more
than 1% of the
original principal balance of such Mortgage Loan.
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.
Closing Documents: The documents required to be delivered on
each
Closing Date pursuant to Section 9.
CLTA: The California Land Title Association.
[CLTV: As of any date and as to any Second Lien Loan, the
ratio,
expressed as a percentage, of (a) the 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: The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
Commission: The United States Securities and Exchange
Commission.
Condemnation Proceeds: All awards, compensation and settlements
in
respect of a taking of all or part of a Mortgaged Property, whether
permanent or
temporary, partial or entire, by exercise of the power of
condemnation or the
right of eminent domain, to the extent not required to be released
to a
Mortgagor in accordance with the terms of the related Mortgage Loan
Documents.
Co-op: A private, cooperative housing corporation, having only
one
class of stock outstanding, which owns or leases land and all or
part of a
building or buildings, including apartments, spaces used for
commercial purposes
and common areas therein and whose board of directors authorizes
the sale of
stock and the issuance of a Co-op Lease.
Co-op Lease: With respect to a Co-op Loan, the lease with respect
to
a dwelling unit occupied by the Mortgagor and relating to the stock
allocated to
the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated
to a dwelling unit in a residential cooperative housing corporation
and a
collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as Covered pursuant
to
Appendix E of Standard & Poor's Glossary.
Custodial Account: As defined in Subsection 11.04.
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Custodial Agreement: The agreement 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: [__________], a [__________], 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.
Cut-off Date Principal Balance: The aggregate Stated Principal
Balance of the Mortgage Loans as of the applicable Cut-off Date
which is
determined after the application, to the reduction of principal, of
payments of
principal due on or before such Cut-off Date, whether or not
collected, and of
partial principal prepayments received before such Cut-off
Date.
Deemed Material and Adverse Representation: Each representation
and
warranty identified as such in Section 7.01 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or to
be
repurchased or replaced or to be replaced with a Qualified
Substitute Mortgage
Loan by the Seller in accordance with the terms of this
Agreement.
Delinquent Mortgage Loans: As defined in Subsection 11.01.
Depositor: The depositor, as such term is defined in Regulation
AB,
with respect to any Securitization Transaction.
Determination Date: With respect to each Remittance Date, the
[15th]
day (or, if such [15th] day is not a Business Day, the following
Business Day)
of the month in which such Remittance Date occurs.
Due Date: With respect to each Remittance Date, the first day of
the
calendar month in which such Remittance Date occurs, which is the
day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any
days of grace.
Due Period: With respect to each Remittance Date and any
Mortgage
Loan, the period beginning on the second day of the month preceding
such
Remittance Date through and including the first day of the month in
which such
Remittance Date occurs.
Eligible Investments: Any one or more of the following
obligations
or securities:
(a) obligations of or guaranteed as to principal and interest
by
Freddie Mac, Fannie Mae or any agency or instrumentality of the
United States
when such obligations are backed by the full faith and credit of
the United
States; provided, however, that such obligations of Freddie Mac or
Fannie Mae
shall be limited to senior debt obligations and mortgage
participation
certificates except that investments in mortgage-backed or
mortgage
participation
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securities with yields evidencing extreme sensitivity to the
rate
of principal payments on the underlying mortgages shall not
constitute Eligible
Investments hereunder;
(b) repurchase agreements on obligations specified in clause
(a)
maturing not more than one month from the date of acquisition
thereof;
(c) federal funds, certificates of deposit, demand deposits,
time
deposits and bankers' acceptances (which shall each have an
original maturity of
not more than ninety (90) days and, in the case of bankers'
acceptances, shall
in no event have an original maturity of more than 365 days or a
remaining
maturity of more than thirty (30) days) denominated in United
States dollars of
any United States depository institution or trust company
incorporated under the
laws of the United States or any state thereof or of any domestic
branch of a
foreign depository institution or trust company;
(d) commercial paper (having original maturities of not more
than
365 days) of any corporation incorporated under the laws of the
United States or
any state thereof which is rated not lower than "P-2" by Moody's
Investors
Service, Inc. and rated not lower than "A-2" by Standard &
Poor's; and
(e) a money market fund;
provided, however, that no instrument shall be an Eligible
Investment if it
represents, either (1) the right to receive only interest payments
with respect
to the underlying debt instrument or (2) the right to receive both
principal and
interest payments derived from obligations underlying such
instrument and the
principal and interest with respect to such instrument provide a
yield to
maturity greater than 120% of the yield to maturity at par of such
underlying
obligations.
Escrow Account: As defined in Subsection 11.06.
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.
Event of Default: Any one of the conditions or circumstances
enumerated in Subsection 13.01.
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, as amended or restated from time to time.
Fannie Mae Transfer: As defined in Section 15.
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FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
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.
Fidelity Bond: The fidelity bond required to be obtained by the
Servicer pursuant to Subsection 11.11.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement
Act of 1989, as amended and in effect from time to time.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage
on
the related Mortgaged Property.
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 15.
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, (b) classified as a "high cost
home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans"
as that term
was 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 state, federal 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 (c) a Mortgage Loan 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 a 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
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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
term 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: The proceeds 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, other than amounts received
following the
acquisition of REO Property, Insurance Proceeds and Condemnation
Proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, as of
any
date of determination, the ratio (expressed as a percentage) the
numerator of
which is the outstanding principal balance of the Mortgage Loan as
of the
related Cut-off Date (unless otherwise indicated), and the
denominator of which
is 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.
[LPMI Fee: With respect to each Mortgage Loan which has an LPMI
Policy, the portion of the Mortgage Interest Rate as set forth on
the related
Mortgage Loan Schedule (which shall be payable solely from the
interest portion
of Monthly Payments, Insurance Proceeds, Condemnation Proceeds or
Liquidation
Proceeds), which, during such period prior to the required
cancellation of the
LPMI Policy, shall be used to pay the premium due on the related
LPMI Policy.]
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[LPMI Loan: Any Mortgage Loan with respect to which Servicer is
responsible for paying the premium due on the related LPMI Policy
with the
proceeds generated by the LPMI Fee relating to such Mortgage Loan,
as set forth
on the related Mortgage Loan Schedule.]
[LPMI 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, pursuant
to which the related premium is to be paid by the Servicer of the
related
Mortgage Loan from payments of interest made by the Mortgagor in an
amount as is
set forth in the related Mortgage Loan Schedule.]
LTV: Loan-to-Value Ratio.
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 June 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 the 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: With respect to any Mortgage Loan, the
scheduled
payment of principal and interest payable by a Mortgagor under the
related
Mortgage Note on each Due Date.
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Mortgage: With respect to a Mortgage Loan that is not a Co-op
Loan,
the mortgage, deed of trust or other instrument securing a Mortgage
Note, which
creates a first lien [on the], [in the case of a First Lien Loan,
or a second
lien, in the case of a Second Lien Loan, on the related] Mortgaged
Property.
With respect to a Co-op Loan, the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage
Loan
Documents and the items listed in Exhibit 2 hereto and any
additional documents
required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from
time to time in
accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each mortgage loan sold, assigned and
transferred
pursuant to this Agreement and 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, REO Disposition Proceeds, 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: With respect to any Mortgage Loan, the
documents listed in Exhibit 1 hereto.
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 Remittance Rate: With respect to each Mortgage
Loan,
the annual rate of interest payable to the Purchaser, which shall
be equal to
the related Mortgage Interest Rate minus the related Servicing Fee
Rate.
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 social security number of the
Mortgagor; (4) 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; (5) the street address of the Mortgaged
Property including
the city, state and zip code; (6) a code indicating whether the
Mortgagor is
self-employed; (7) a code indicating whether the Mortgaged Property
is
owner-occupied, investment property or a second home; (8) a code
indicating the
number and type of residential units constituting the Mortgaged
Property (e.g.
single family residence, two-family residence, three-family
residence,
four-family residence, multifamily residence, condominium,
manufactured housing,
mixed-use property, raw land and other non-residential properties,
planned unit
development or cooperative stock in a cooperative housing
corporation); (9) 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
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schedule; (10) the Loan-to-Value Ratio [or CLTV, as applicable] at
origination;
(11) the Mortgage Interest Rate as of the related Cut-off Date;
(12) the date on
which the first Monthly Payment was due on the Mortgage Loan and,
if such date
is not consistent with the Due Date currently in effect, the Due
Date; (13) the
stated maturity date; (14) the amount of the Monthly Payment as of
the related
Cut-off Date; (15) the last payment date on which a payment was
actually applied
to the outstanding principal balance; (16) the schedule of the
payment
delinquencies in the prior 12 months; (17) the original principal
amount of the
Mortgage Loan; (18) 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;
(19) 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)]; (20) with respect to each Mortgage Loan
with a second
lien behind it, the combined principal balance of the Mortgage Loan
and the
applicable second lien 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; (21) a code indicating whether there is a
simultaneous
second; (22) with respect to Adjustable Rate Mortgage Loans, the
Interest Rate
Adjustment Date; (23) with respect to Adjustable Rate Mortgage
Loans, the Gross
Margin; (24) with respect to Adjustable Rate Mortgage Loans, the
Lifetime Rate
Cap under the terms of the Mortgage Note; (25) with respect to
Adjustable Rate
Mortgage Loans, a code indicating the type of Index, including the
methodology
for rounding (e.g. rounded upward, if necessary, to the nearest ten
thousandth
(.0001)) and the applicable time frame for determining the Index;
(26) the
product type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate
First Lien Loan
or Second Lien Loan); (27) a code indicating the purpose of the
loan (i.e.,
purchase, Rate/Term Refinance or Cash-Out Refinance), and with
respect to each
Second Lien Loan, the product type of the related first lien loan;
(28) a code
indicating the documentation style (i.e. no documents, full,
alternative,
reduced, no income/no asset, stated income, no ration, reduced or
NIV); (29)
asset verification (Y/N); (30) the loan credit classification (as
described in
the Underwriting Guidelines); (31) whether such Mortgage Loan
provides for a
Prepayment Penalty; (32) the Prepayment Penalty period of such
Mortgage Loan, if
applicable; (33) a description of the Prepayment Penalty, if
applicable; (34)
the Mortgage Interest Rate as of origination; (35) the credit risk
score (FICO
score); (36) the date of origination; (37) with respect to
Adjustable Rate
Mortgage Loans, the Mortgage Interest Rate adjustment period; (38)
with respect
to Adjustable Rate Mortgage Loans, the Mortgage Interest Rate
adjustment
percentage; (39) with respect to Adjustable Rate Mortgage Loans,
the Mortgage
Interest Rate floor; (40) the Mortgage Interest Rate calculation
method (i.e.,
30/360, simple interest, other); (41) with respect to Adjustable
Rate Mortgage
Loans, the Periodic Rate Cap as of the first Interest Rate
Adjustment Date; (42)
with respect to each Adjustable Rate Mortgage Loan, a code
indicating whether
the Mortgage Loan provides for negative amortization; (43) a code
indicating
whether the Mortgage Loan has negative amortization and the maximum
of such
negative amortization; (44) a code indicating whether the Mortgage
Loan is a
Balloon Mortgage Loan; (45) a code indicating whether the Mortgage
Loan by its
original terms or any modifications thereof provides for
amortization beyond its
scheduled maturity date; (46) the original Monthly Payment due;
(47) the
Appraised Value; (48) appraisal type; (49) appraisal date (50) a
code indicating
whether the Mortgage Loan is covered by a PMI Policy and, if so,
identifying the
PMI Policy provider; (51) the certificate number of the PMI Policy,
if
applicable;
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(52) the amount of coverage of the PMI Policy, if applicable; (53)
in connection
with a condominium unit, a code indicating whether the condominium
project where
such unit is located is low-rise or high-rise; (54) a code
indicating whether
the Mortgaged Property is a leasehold estate; (55) with respect to
the related
Mortgagor, the debt-to-income ratio; (56) sales price; (57)
automated valuation
model (AVM); (58) a code indicating whether the Mortgage Loan is a
MERS
Designated Mortgage Loan and the MERS Identification Number, if
applicable; (59)
a field indicating whether such Mortgage Loan is a Home Loan; and
(60) the DU or
LP number, if applicable. With respect to the Mortgage Loans in the
aggregate,
the related 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 average principal balance
of the
Mortgage Loans; (6) the applicable Cut-off Date; and (7) the
applicable Closing
Date.
Mortgage Note: The original executed note or other evidence of
the
Mortgage Loan indebtedness of a Mortgagor, including any riders or
addenda
thereto.
Mortgaged Property: With respect to a Mortgage Loan that is not
a
Co-op 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. With respect to a Co-op Loan, the stock
allocated to a
dwelling unit in the residential cooperative housing corporation
that was
pledged to secure such Co-op Loan and the related Co-op Lease.
Mortgagee: The mortgagee or beneficiary named in the Mortgage
and
the successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note, who is an owner of
the
Mortgaged Property and the grantor or mortgagor named in the
Mortgage and such
grantor's or mortgagor's successors in title to the Mortgaged
Property.
NAIC: The National Association of Insurance Commissioners or
any
successor thereto.
OCC: Office of the Comptroller of the Currency, or any
successor
thereto.
Officer's Certificate: A certificate signed by the Chairman of
the
Board, the Vice Chairman of the Board, a President or a Vice
President and by
the Treasurer, the Secretary, or one of the Assistant Treasurers or
the
Assistant Secretaries of the Person on behalf of whom such
certificate is being
delivered.
Opinion of Counsel: A written opinion of counsel, who may be
counsel
for the Seller or the Servicer, reasonably acceptable to the
Purchaser, provided
that any Opinion of Counsel relating to (a) the qualification of
any account
required to be maintained pursuant to this Agreement as an eligible
account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance
with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of
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Counsel) an opinion of counsel who (i) is in fact independent of
the Seller and
any servicer of the Mortgage Loans, (ii) does not have any material
direct or
indirect financial interest in the Seller or Servicer or in an
Affiliate of
either and (iii) is not connected with the Seller or Servicer as an
officer,
employee, director or person performing similar functions.
OTS: The Office of Thrift Supervision or any successor thereto.
Owner: As defined in Subsection 11.12.
P&I Advance: As defined in Subsection 11.16.
Payment Adjustment Date: As to each Adjustable Rate Mortgage
Loan,
the date on which an adjustment to the Monthly Payment on a
Mortgage Note
becomes effective.
Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage
Loan, the provision of each Mortgage Note 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.
Periodic Rate Floor: With respect to each Adjustable Rate
Mortgage
Loan, the provision of each Mortgage Note which provides for an
absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on
an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in
effect.
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
amount
of any premium or penalty required to be paid by the Mortgagor if
the Mortgagor
prepays such Mortgage Loan as provided in the related Mortgage Note
or Mortgage.
Prime Rate: The prime rate announced to be in effect from time
to
time, as published as the average rate in The Wall Street Journal
(Northeast
edition).
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 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.
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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: Each of those certain
agreements
setting forth the general terms and conditions of the purchase and
sale of the
Mortgage Loans to be purchased from time to time hereunder, each by
and between
the Seller and the Purchaser.
Purchase Price Percentage: The percentage of par (expressed as
decimal) set forth in the related Purchase Price and Terms
Agreement.
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, duly appointed by the Seller,
who
had no interest, direct or indirect, in the Mortgaged Property or
in any loan
made on the security thereof, 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
FIRREA 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 account 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, be approved by the Purchaser and (i) have an
unpaid 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 unpaid principal balance of the Deleted Mortgage Loan (the
amount of any
shortfall will be deposited in the Custodial Account by the Seller
in the month
of substitution);
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(ii) have a Mortgage Interest Rate not less than and not more than
one percent
(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 (1)
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 Cap and Index); (v) comply as of the date of
substitution
with each representation and warranty set forth in Subsection 7.01
of this
Agreement; (vi) be current in the payment of principal and
interest; (vii) be
secured by a Mortgaged Property of the same type and occupancy
status as secured
the Deleted Mortgage Loan; and (viii) have payment terms that do
not vary in any
material respect from those of the Deleted Mortgage Loan.
Rate/Term Refinance: A
Refinanced Mortgage Loan, in which the
proceeds received were not in excess of the amount of funds
required to repay
the principal balance of any existing first mortgage loan on the
related
Mortgaged Property, pay related closing costs and satisfy any
outstanding
subordinate mortgages on the related Mortgaged Property and did not
provide
incidental cash to the related Mortgagor of more than one percent
(1%) of the
original principal balance of such Mortgage Loan.
Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
Reconstitution Agreement: As defined in Section 15.
Record Date: The close of business of the last Business Day of
the
month preceding the month of the related Remittance Date.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which
were
not used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended from
time to time, and subject to such clarification and interpretation
as have been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan.
7, 2005)) or
by the staff of the Commission, or as may be provided by the
Commission or its
staff from time to time.
Remittance Date: No later than 1:00 p.m. New York time on the
18th
day of any month (or, if such 18th day is not a Business Day, the
following
Business Day).
REO Disposition: The final sale by the Servicer of an REO
Property.
REO Disposition Proceeds: All amounts received with respect to
an
REO Disposition pursuant to Subsection 11.12.
REO
Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure, as described in
Subsection 11.12.
Repurchase Price: With respect to any Mortgage Loan, a price
equal
to the sum of: (i) the product of (a) par (or, with respect to any
Mortgage Loan
required to be repurchased on or prior to the first anniversary of
the related
Closing Date, the greater of (1) par and (2) par
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plus the excess of the applicable Purchase Price Percentage over
par multiplied
by a fraction equal to (x) 365 minus the number of days from but
excluding the
related Closing Date, up through and including the date of such
repurchase,
divided by (y) 365) and (b) the unpaid principal balance of such
Mortgage Loan,
(ii) accrued interest on such unpaid principal balance at the
applicable
Mortgage Interest Rate from the applicable Cut-off Date through the
last day of
the month in which such repurchase takes place, (iii) the amount of
any
outstanding advances owed to any servicer if the Seller is not the
Servicer, and
(iv) all costs and expenses incurred by the Purchaser or any
servicer 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 co-operative,
mobile or
Manufactured Home.
[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.
Security Agreement: The agreement creating a security interest
in
the stock allocated to a dwelling unit in the residential
cooperative housing
corporation that was pledged to secure such Co-op Loan and the
related Co-op
Lease.
Seller: As defined in the initial paragraph of this Agreement,
together with its successors in interest.
Seller Information: As defined in Section 34.07(a).
Servicer: As defined in the initial paragraph of this
Agreement,
together with its successors and assigns as permitted under the
terms of this
Agreement, or with respect to Subsection 34.03(c), as defined
therein.
Servicing Advances: All customary, reasonable and necessary
out-of-pocket costs and expenses incurred in the performance by the
Servicer of
its servicing obligations, including, but not limited to, the cost
of (i) the
preservation, restoration and protection of the Mortgaged Property,
(ii) any
enforcement or judicial proceedings, including foreclosures, (iii)
the
management and liquidation of the Mortgaged Property if the
Mortgaged Property
is
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acquired in satisfaction of the Mortgage, and (iv) payments made by
the Servicer
with respect to a Mortgaged Property pursuant to Subsection
11.08.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to
time.
Servicing Fee: With respect to each Mortgage Loan, the amount of
the
annual fee the Purchaser shall pay to the Servicer, which shall,
for each month,
be equal to one-twelfth of (i) the product of the Servicing Fee
Rate and (ii)
the Stated Principal Balance of such Mortgage Loan. Such fee shall
be payable
monthly, computed on the basis of the same principal amount and
period
respecting which any related interest payment on a Mortgage Loan is
computed,
and shall be pro rated (based upon the number of days of the
related month the
Servicer so acted as Servicer relative to the number of days in
that month) for
each part thereof. The obligation of the Purchaser to pay the
Servicing Fee is
limited to, and payable solely from, the interest portion
(including recoveries
with respect to interest from Liquidation Proceeds and other
proceeds, to the
extent permitted by Subsection 11.05) of related Monthly Payments
collected by
the Servicer, or as otherwise provided under Subsection 11.05.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum rate set forth in the applicable Purchase Price and Terms
Agreement.
Servicing File: With respect to each Mortgage Loan, the portion
of
the Mortgage File, excluding the Mortgage Loan Documents, retained
by the
Servicer pursuant to the terms of this Agreement.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name appears on a list of servicing officers furnished to the
Purchaser by the
Servicer, as such list may be amended from time to time.
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.
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Standard & Poor's Glossary: The Standard & Poor's
LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan as to any date
of
determination, (i) the principal balance of the Mortgage Loan at
the related
Cut-off Date after giving effect to payments of principal due on or
before such
date, whether or not received, minus (ii) all amounts previously
distributed to
the Purchaser with respect to the related Mortgage Loan
representing payments or
recoveries of principal, or advances in lieu thereof on such
Mortgage Loan.
Static Pool Information: Static pool information as described
in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing (as "servicing" is commonly
understood by
participants in the mortgage-backed securities market) of Mortgage
Loans but
performs one or more discrete functions identified in Item 1122(d)
of Regulation
AB with respect to Mortgage Loans under the direction or authority
of the
Servicer or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf
of
the Servicer or any Subservicer and is responsible for the
performance (whether
directly or through Subservicers or Subcontractors) of a
substantial portion of
the material servicing functions required to be performed by the
Seller under
this Agreement or any Reconstitution Agreement that are identified
in Item
1122(d) 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 7.03 and 12.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Transfer Date: In the event the Servicer is terminated as
servicer
of a Mortgage Loan pursuant to Subsections 12.04, 13.01, 14.01(c)
or 14.02, the
date on which the Purchaser, or its designee, shall receive the
transfer of
servicing responsibilities and begin to perform the servicing of
such Mortgage
Loans, and the Seller, as Servicer, shall cease all servicing
responsibilities.
Underwriting Guidelines: The underwriting guidelines of the
Seller,
a copy of which is attached hereto as Exhibit 8 and a then-current
copy of which
shall be 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.
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Section 2. Purchase and Conveyance. The Seller agrees to sell
from
time to time, and the Purchaser agrees to purchase from time to
time, Mortgage
Loans having an aggregate principal balance on the related Cut-off
Date in an
amount as set forth in the related Purchase Price and Terms
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, together with the related Mortgage
Files and all
rights and obligations arising under the documents contained
therein. The
Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with
respect to the related Mortgage Loan Package to be purchased on
each Closing
Date, shall execute and deliver an Assignment and Conveyance
Agreement in the
form attached hereto as Exhibit 14 (the "Assignment and Conveyance
Agreement").
With respect to each Mortgage Loan purchased, the Purchaser
shall
own and be entitled to receive: (a) all scheduled principal due
after the
related Cut-off Date, (b) all other payments and/or recoveries of
principal
collected after the related Cut-off Date (provided, however, that
all scheduled
payments of principal due on or before the related Cut-off Date and
collected by
the Servicer after the related Cut-off Date shall belong to the
Seller), and (c)
all payments of interest on the Mortgage Loans, net of the
Servicing Fee (minus
that portion of any such interest payment that is allocable to the
period prior
to the related Cut-off Date).
For the purposes of this Agreement, payments of scheduled
principal
and interest prepaid for a Due Date beyond the related Cut-off Date
shall not be
applied to reduce the Stated Principal Balance as of the related
Cut-off Date.
Such prepaid amounts (minus the applicable Servicing Fee) shall be
the property
of the Purchaser. The Seller shall remit to the Servicer for
deposit any such
prepaid amounts into the Custodial Account, which account is
established for the
benefit of the Purchaser, for remittance by the Servicer to the
Purchaser on the
appropriate Remittance Date. All payments of principal and
interest, less the
applicable Servicing Fee, due on a Due Date following the related
Cut-off Date
shall belong to the Purchaser.
Section 3. Mortgage Loan Schedule. 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.
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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.
Section 5. Examination of Mortgage Files. At least [ten (10)]
Business Days prior to the related Closing Date, the Seller shall
either (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
such other location as shall otherwise be acceptable to the
Purchaser. Such
examination of the Mortgage Files 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
determines, in its sole discretion, that any Mortgage Loans do not
conform to
any of the requirements set forth in the related Purchase Price and
Terms
Agreement, or as an Exhibit annexed thereto, the Purchaser may
delete such
Mortgage Loans from the related Mortgage Loan Schedule, and such
Deleted
Mortgage Loan (or Loans) may be replaced 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 impair in any way the
Purchaser's
(or any of its successor's) rights to demand repurchase,
substitution or other
relief as provided in this Agreement. In the event that the Seller
fails to
deliver the Mortgage File with respect to any Mortgage Loan, the
Seller shall,
upon the request of the Purchaser, repurchase such Mortgage Loan as
the price
and in the manner specified in Subsection 7.03.
Section 6. Delivery of Mortgage Loan Documents.
Subsection 6.01 Possession of Mortgage Files. The contents of
each
Mortgage File required to be retained by or delivered to the
Servicer to service
the Mortgage Loans pursuant to this Agreement and thus not
delivered to the
Purchaser, or its designee, are and shall be held in trust by the
Servicer for
the benefit of the Purchaser as the owner thereof. The Servicer's
possession of
any portion of each such Mortgage File is at the will of the
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Purchaser for the sole purpose of facilitating servicing of the
Mortgage Loans
pursuant to this Agreement, and such retention and possession by
the Servicer
shall be in a custodial capacity only. The ownership of each
Mortgage Note, each
Mortgage and the contents of each Mortgage File is vested in the
Purchaser and
the ownership of all records and documents with respect to the
related Mortgage
Loan prepared by or which come into the possession of the Servicer
shall
immediately vest in the Purchaser and shall be retained and
maintained, in
trust, by the Servicer at the will of the Purchaser in such
custodial capacity
only. The Mortgage File retained by the Servicer with respect to
each Mortgage
Loan pursuant to this Agreement shall be appropriately identified
in the
Servicer's computer system and/or books and records to reflect
clearly the sale
of such related Mortgage Loan to the Purchaser. The Servicer shall
release from
its custody the contents of any Mortgage File retained by it only
in accordance
with this Agreement, except when such release is required in
connection with a
repurchase of any such Mortgage Loan pursuant to Subsection 7.03 or
if required
under applicable law or court order.
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; 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, ownership of each Mortgage and the
related
Mortgage Note shall be vested solely in the Purchaser or the
appropriate
designee of the Purchaser, as the case may be. All rights arising
out of the
Mortgage Loans including, but not limited to, all funds received by
the Servicer
after the related Cut-off Date on or in connection with a Mortgage
Loan as
provided in Section 2 shall be vested in the Purchaser or one or
more designees
of the Purchaser; provided, however, that all such funds received
on or in
connection with a Mortgage Loan as provided in Section 2 shall be
received and
held by the Servicer 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.
It is the express intention of the parties that the
transactions
contemplated by this Agreement be, and be construed as, a sale of
the related
Mortgage Loans by the Seller and not a pledge of such Mortgage
Loans by the
Seller to the Purchaser to secure a debt or other obligation of the
Seller.
Consequently, the sale of each Mortgage Loan shall be reflected as
a purchase on
the Purchaser's business records, tax returns and financial
statements, and as a
sale of assets on the Seller's business records, tax returns and
financial
statements.
Subsection 6.03 Delivery of Mortgage Loan Documents. The Seller
shall, at least two (2) Business Days prior to the related Closing
Date (or such
later date as the Purchaser may reasonably request), deliver and
release to the
Purchaser, or its designee, the Mortgage Loan Documents with
respect to each
Mortgage Loan pursuant to a bailee letter agreement. In connection
with the
foregoing, the Seller shall indemnify the Purchaser and its present
and former
directors, officers, employees and agents and any Successor
Servicer and its
present and former directors, officers, employees and agents, and
hold such
parties harmless against any losses, damages, penalties, fines,
forfeitures,
legal fees and expenses and related costs, judgments, and other
costs and
expenses based on or grounded upon, or resulting from, the fact
that any
Mortgage Loan is not covered by an ALTA or CLTA lender's title
insurance policy.
For purposes of the previous sentence, "Purchaser" shall mean the
Person then
acting as the
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Purchaser under this Agreement and any and all Persons who
previously were
"Purchasers" under this Agreement and "Successor Servicer" shall
mean any Person
designated as the Successor Servicer pursuant to this Agreement and
any and all
Persons who previously were "Successor Servicers" pursuant to this
Agreement.
To the extent received by it, the Servicer shall forward to the
Purchaser, or its designee, original documents evidencing an
assumption,
modification, consolidation or extension of any Mortgage Loan
entered into in
accordance with this Agreement within two (2) weeks after their
execution;
provided, however, that the Servicer shall provide the Purchaser,
or its
designee, with a copy, certified by the Servicer as a true copy, of
any such
document submitted for recordation within two (2) weeks after 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 to
be a true and complete copy of the original within two (2) weeks
following
receipt of the original document by the Servicer; provided,
however, that such
original recorded document or certified copy thereof shall be
delivered to the
Purchaser no later than 180 days following the related Closing
Date, unless
there has been a delay at the applicable recording office.
If the original or copy of any document submitted for recordation
to
the appropriate public recording office is not delivered to the
Purchaser or its
designee within 180 days following the related Closing Date, the
related
Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the
Seller at the price and in the manner specified in Subsection 7.03.
The
foregoing repurchase obligation shall not apply if the Seller
cannot cause the
Servicer to deliver such original or copy of any 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 (i) the Servicer 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 the Servicer,
confirming that
such document has been accepted for recording, and (ii) such
document is
delivered within twelve (12) months of the related Closing
Date.
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 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 listed as Interim Funder with
respect to
each MERS Designated Mortgage Loan.
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Section 7. Representations, Warranties and Covenants; Remedies
for
Breach.
Subsection 7.01 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
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;
(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 issuer of any related PMI
Policy and 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 any related PMI Policy and 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,
or subject to
any right of rescission, set-off, counterclaim or defense,
including without
limitation
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the defense of usury, 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 Underwriting
Guidelines. 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 with the Underwriting Guidelines. 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. The Seller
has not engaged in, and has no knowledge of the Mortgagor's having
engaged in,
any act or omission which would impair the coverage of any such
policy, the
benefits of the endorsement provided for herein, or the validity
and binding
effect of either including, without limitation, no unlawful fee,
commission,
kickback or other unlawful compensation or value of any kind has
been or will be
received, retained or realized by any attorney, firm or other
person or entity,
and no such unlawful items have been received, retained or realized
by the
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,
predatory and abusive lending, equal credit opportunity and
disclosure laws
applicable to the Mortgage Loan, including, without limitation, any
provisions
relating to a Prepayment Penalty 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;
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<PAGE>
(i) Type of Mortgaged Property. With respect to a Mortgage Loan
that
is not a Co-op Loan and is not secured by an interest in a
leasehold estate, the
Mortgaged Property is a fee simple estate 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,
with respect to each Co-op Loan, 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
(or underlying
Mortgaged Property, in the case of a Co-op Loan) 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. This
representation and
warranty is a Deemed Material and Adverse Representation;
(j) Valid First [or Second] Lien. The Mortgage is a valid,
subsisting, enforceable 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:
(i) [with respect to a Second Lien Loan only, the lien on the
first
mortgage
on the Mortgaged Property;]
(ii) the lien of current real property taxes and assessments not
yet
due and
payable;
(iii) 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
(iv) 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,
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enforceable 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 (with respect to a
Second Lien
Loan)] security interest on the property described therein and the
Seller has
full right to sell and assign the same to the Purchaser.
With respect to any Co-op Loan, the related Mortgage is a
valid,
subsisting and enforceable first priority security interest on the
related
cooperative shares securing the Mortgage Note, subject only to (a)
liens of the
related residential cooperative housing corporation for unpaid
assessments
representing the Mortgagor's pro rata share of the related
residential
cooperative housing corporation's payments for its blanket
mortgage, current and
future real property taxes, insurance premiums, maintenance fees
and other
assessments to which like collateral is commonly subject and (b)
other matters
to which like collateral is commonly subject which do not
materially interfere
with the benefits of the security interest intended to be provided
by the
related Security Agreement;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a
Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal,
valid and
binding obligation of the maker thereof enforceable in accordance
with its terms
(including, without limitation, any provisions therein relating to
Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any
other such
related agreement had legal capacity to enter into the Mortgage
Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and
the Mortgage Note, the Mortgage and any other such related
agreement have been
duly and properly executed by other such related parties. No fraud,
error,
omission, misrepresentation, negligence or similar occurrence with
respect to a
Mortgage Loan has taken place on the part of the Seller in
connection with the
origination of the Mortgage Loan or in the application of any
insurance in
relation to such Mortgage Loan. The documents, instruments and
agreements
submitted for loan underwriting were not falsified and contain no
untrue
statement of material fact or omit to state a material fact
required to be
stated therein or necessary to make the information and statements
therein not
misleading. No fraud, error, omission, misrepresentation,
negligence or similar
occurrence with respect to a Mortgage Loan has taken place on the
part of any
Person, including without limitation, the Mortgagor, any appraiser,
any builder
or developer, or any other party involved in the origination of the
Mortgage
Loan or in the application for any insurance in relation to such
Mortgage Loan.
The Seller has reviewed all of the documents constituting the
Servicing File and
has made such inquiries as it deems necessary to make and confirm
the accuracy
of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed
and the proceeds of the Mortgage Loan have been fully disbursed and
there is no
requirement for future advances thereunder, and any and all
requirements as to
completion of any on-site or off-site improvement and as to
disbursements of any
escrow funds therefor have been complied with. All costs, fees and
expenses
incurred in making or closing the Mortgage Loan and the recording
of the
Mortgage were paid, and the Mortgagor is not entitled to any refund
of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder
of
the Mortgage Loan and the indebtedness evidenced by each Mortgage
Note and upon
the sale of the
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Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or
any part thereof with respect thereto not delivered to the
Custodian, the
Purchaser or the Purchaser's designee, in trust only for the
purpose of
servicing and supervising the servicing of each Mortgage Loan. The
Mortgage Loan
is not assigned or pledged, and the Seller has good, indefeasible
and marketable
title thereto, and has full right to transfer and sell the Mortgage
Loan to the
Purchaser free and clear 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
and following the sale of each Mortgage Loan, the Purchaser will
own such
Mortgage Loan free and clear of any encumbrance, equity,
participation interest,
lien, pledge, charge, claim or security interest, except as may be
required of
the Seller in its capacity as interim servicer of such Mortgage
Loan prior to
the Transfer Date. The Seller intends to relinquish all rights to
possess,
control and monitor the Mortgage Loan, except as may be required of
the Seller
in its capacity as Servicer of such Mortgage Loan. After the
related Closing
Date, the Seller will have no right to modify or alter the terms of
the sale of
the Mortgage Loan and the Seller will have no obligation or right
to repurchase
the Mortgage Loan or substitute another Mortgage Loan, except as
provided in
this Agreement;
(n) Doing Business. All parties which have had any interest in
the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or,
during the period in which they held and disposed of such interest,
were) (1) in
compliance with any and all applicable licensing requirements of
the laws of the
state wherein the Mortgaged Property is located, and (2) either (i)
organized
under the laws of such state, or (ii) qualified to do business in
such state, or
(iii) a federal savings and loan association, a savings bank or a
national bank
having a principal office in such state, or (3) not doing business
in such
state;
(o) [CLTV,] LTV, PMI Policy. [No Mortgage Loan that is a Second
Lien
Loan has a CLTV greater than 100%.] No Mortgage Loan has an LTV
greater than
100%. Any Mortgage Loan that had at the time of origination an LTV
in excess of
80% is insured as to payment defaults by a PMI Policy. Any PMI
Policy in effect
covers the related Mortgage Loan for the life of such Mortgage
Loan. All
provisions of such PMI Policy have been and are being complied
with, such policy
is in full force and effect, and all premiums due thereunder have
been paid. No
action, inaction, or event has occurred and no state of facts
exists that has,
or will result in the exclusion from, denial of, or defense to
coverage. Any
Mortgage Loan subject to a PMI Policy obligates the Mortgagor
thereunder to
maintain the PMI Policy and to pay all premiums and charges in
connection
therewith. The Mortgage Interest Rate for the Mortgage Loan as set
forth on the
related Mortgage Loan Schedule is net of any such insurance premium
if the
related PMI Policy is lender-paid;
(p) Title Insurance. With respect to a Mortgage Loan which is not
a
Co-op Loan, the Mortgage Loan is covered by an ALTA lender's title
insurance
policy or other generally acceptable form of policy or insurance
acceptable
under the Underwriting Guidelines and each such title insurance
policy is issued
by a title insurer acceptable under the Underwriting Guidelines and
qualified to
do business in the jurisdiction where the Mortgaged Property is
located,
insuring the Seller, its successors and assigns, as to the first
[(with respect
to a First Lien Loan) or second (with respect to a Second Lien
Loan)] priority
lien of the Mortgage in the original principal amount of the
Mortgage Loan (or
to the extent a Mortgage Note provides for
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negative amortization, the maximum amount of negative amortization
in accordance
with the Mortgage), subject only to the exceptions contained in
clauses (i) and
(ii) of clause (j) of this Subsection 7.02, and in the case of
Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or
unenforceability
of the lien resulting from the provisions of the Mortgage providing
for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where
required by
state law or regulation, the Mortgagor has been given the
opportunity to choose
the carrier of the required mortgage title insurance. Additionally,
such
lender's title insurance policy affirmatively insures ingress and
egress, and
against encroachments by or upon the Mortgaged Property or any
interest therein.
The Seller, its successor and assigns, are the sole insureds of
such lender's
title insurance policy, and such lender's title insurance policy is
valid and
remains in full force and effect and will be in force and effect
upon the
consummation of the transactions contemplated by this Agreement. No
claims have
been made under such lender's title insurance policy, and no prior
holder of the
related Mortgage, including the Seller, has done, by act or
omission, anything
which would impair the coverage of such lender's title insurance
policy,
including without limitation, no unlawful fee, commission, kickback
or other
unlawful compensation or value of any kind has been or will be
received,
retained or realized by any attorney, firm or other person or
entity, and no
such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. Other than payments due but not yet 30 days or
more
delinquent, there is no default, breach, violation or event which
would permit
acceleration existing under the Mortgage or the Mortgage Note and
no event
which, with the passage of time or with notice and the expiration
of any grace
or cure period, would constitute a default, breach, violation or
event which
would permit acceleration, and neither the Seller nor any of its
affiliates nor
any of their respective predecessors, have waived any default,
breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens
or
claims which have been filed for work, labor or material (and no
rights are
outstanding that under law 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;
(s) Location of Improvements; No Encroachments. All
improvements
which were considered in determining the Appraised Value of the
Mortgaged
Property lay wholly within the boundaries and building restriction
lines of the
Mortgaged Property, and no improvements on adjoining properties
encroach upon
the Mortgaged Property. No improvement located on or being part of
the Mortgaged
Property is in violation of any applicable zoning law or
regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated
by
a mortgagee approved by the Secretary of Housing and Urban
Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and
loan
association, a savings bank, a commercial bank, credit union,
insurance company
or other similar institution which is supervised and examined by a
federal or
state authority. Principal payments on the Mortgage Loan commenced
no more than
seventy days after funds were disbursed in connection with the
Mortgage Loan.
The Mortgage Interest Rate as well as, in the case of an Adjustable
Rate
Mortgage Loan, the Lifetime Rate Cap and the Periodic Rate Cap and
the Periodic
Rate Floor are
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as set forth on the related Mortgage Loan Schedule. The Mortgage
Interest Rate
is adjusted, with respect to Adjustable Rate Mortgage Loans, on
each Interest
Rate Adjustment Date to equal the Index plus the Gross Margin
(rounded up or
down to the nearest 0.125%), subject to the Periodic Rate Cap. The
Mortgage Note
is payable in equal monthly installments of principal and interest,
which
installments of interest, with respect to Adjustable Rate Mortgage
Loans, are
subject to change due to the adjustments to the Mortgage Interest
Rate on each
Interest Rate Adjustment Date, with interest calculated and payable
in arrears,
sufficient to amortize the Mortgage Loan fully by the stated
maturity date, over
an original term of not more than thirty (30) years from
commencement of
amortization. Unless otherwise specified on the related Mortgage
Loan Schedule,
the Mortgage Loan is payable on the first day of each month. The
Mortgage Loan
does not require a balloon payment on its stated maturity date; and
by its
original terms or any modification thereof, does not provide for
amortization
beyond its scheduled maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of
the holder
thereof adequate for the realization against the Mortgaged Property
of the
benefits of the security provided thereby, including, (i) in the
case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage
Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property
pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to
deliver good
and merchantable title to the Mortgaged Property. There is no
homestead or other
exemption available to a Mortgagor which would interfere with the
right to sell
the Mortgaged Property at a trustee's sale or the right to
foreclose the
Mortgage, subject to applicable federal and state laws and judicial
precedent
with respect to bankruptcy and right of redemption or similar
law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines (a
copy of which is attached to the related Assignment and Conveyance
as Exhibit
C). The Mortgage Note and Mortgage are on forms acceptable to
Freddie Mac or
Fannie Mae and no representations have been made to a Mortgagor
that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. The Mortgaged Property
is
lawfully occupied under applicable law. All inspections, licenses
and
certificates required to be made or issued with respect to all
occupied portions
of the Mortgaged Property and, with respect to the use and
occupancy of the
same, including but not limited to certificates of occupancy and
fire
underwriting certificates, have been made or obtained from the
appropriate
authorities. Unless otherwise specified on the related Mortgage
Loan Schedule,
the Mortgagor represented at the time of origination of the
Mortgage Loan that
the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary
residence;
(x) No Additional Collateral. The Mortgage Note is not and has
not
been secured by any collateral except the lien of the corresponding
Mortgage and
the security interest of any applicable security agreement or
chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed
of
trust, a trustee, authorized and duly qualified under applicable
law to serve as
such, has been properly designated and currently so serves and is
named in the
Mortgage, and no fees or expenses are or
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will become payable by the Purchaser to the trustee under the deed
of trust,
except in connection with a trustee's sale after default by the
Mortgagor;
(z) Acceptable Investment. There are no circumstances or
conditions
with respect to the Mortgage, the Mortgaged Property, the
Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can
reasonably be expected
to cause private institutional investors who invest in prime
mortgage loans
similar to the Mortgage Loan to regard the Mortgage Loan as an
unacceptable
investment, cause the Mortgage Loan to become delinquent, or
adversely affect
the value or marketability of the Mortgage Loan, or cause the
Mortgage Loan to
prepay during any period materially faster or slower than the
mortgage loans
originated by the Seller generally. No Mortgaged Property is
located in a state,
city, county or other local jurisdiction which the Purchaser has
determined in
its sole good faith discretion would cause the related Mortgage
Loan to be
ineligible for whole loan sale or securitization in a transaction
consistent
with the prevailing sale and securitization industry (including,
without
limitation, the practice of the rating agencies) with respect to
substantially
similar mortgage loans;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents
required to be
delivered under this Agreement for each Mortgage Loan have been
delivered to the
Custodian. The Seller is in possession of a complete, true and
accurate Mortgage
File in compliance with Exhibit 2 attached hereto, except for such
documents the
originals of which have been delivered to the Custodian;
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage
(except
with respect to any Mortgage that has been recorded in the name of
MERS or its
designee) with respect to each Mortgage Loan is in recordable form
and is
acceptable for recording under the laws of the jurisdiction in
which the
Mortgaged Property is located;
(cc) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan,
the
Mortgage contains an enforceable provision for the acceleration of
the payment
of the unpaid principal balance of the Mortgage Loan in the event
that the
Mortgaged Property is sold or transferred without the prior written
consent of
the Mortgagee thereunder;
(dd) Assumability. With respect to each Adjustable Rate
Mortgage
Loan, the Mortgage Loan Documents provide that after the related
first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed
if the party
assuming such Mortgage Loan meets certain credit requirements
stated in the
Mortgage Loan Documents;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant
to which
Monthly Payments are paid or partially paid with funds deposited in
any separate
account established by the Seller, the Mortgagor, or anyone on
behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does
it contain
any other similar provisions which may constitute a "buydown"
provision. The
Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan
does not have a shared appreciation or other contingent interest
feature;
(ff) Consolidation of Future Advances. Any future advances made
to
the Mortgagor prior to the applicable Cut-off Date have been
consolidated with
the outstanding
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principal amount secured by the Mortgage, and the secured principal
amount, as
consolidated, bears a single interest rate and single repayment
term. The lien
of the Mortgage securing the consolidated principal amount is
expressly insured
as having first [(with respect to a First Lien Loan) or second
(with respect to
a Second Lien Loan)] lien priority by a title insurance policy, an
endorsement
to the policy insuring the Mortgagee's consolidated interest or by
other title
evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal
amount does not exceed the original principal amount of the
Mortgage Loan;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or
partial
condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by
waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other
casualty so as to affect adversely the value of the Mortgaged
Property as
security for the Mortgage Loan or the use for which the premises
were intended
and each Mortgaged Property is in good repair. There have not been
any
condemnation proceedings with respect to the Mortgaged Property and
the Seller
has no knowledge of any such proceedings in the future;
(hh) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices
used by the
Seller with respect to the Mortgage Loan have been in all respects
in compliance
with Accepted Servicing Practices, applicable laws and regulations,
and have
been in all respects legal and proper. With respect to escrow
deposits and
Escrow Payments, all such payments are in the possession of, or
under the
control of, the Seller and there exist no deficiencies in
connection therewith
for which customary arrangements for repayment thereof have not
been made. All
Escrow Payments have been collected in full compliance with state
and federal
law and the provisions of the related Mortgage Note and Mortgage.
An escrow of
funds is not prohibited by applicable law and has been established
in an amount
sufficient to pay for every item that remains unpaid and has been
assessed but
is not yet due and payable. No escrow deposits or Escrow Payments
or other
charges or payments due the Seller have been capitalized under the
Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been
made in
strict compliance with state and federal law and the terms of the
related
Mortgage and Mortgage Note on the related Interest Rate Adjustment
Date. If,
pursuant to the terms of the Mortgage Note, another index was
selected for
determining the Mortgage Interest Rate, the same index was used
with respect to
each Mortgage Note which required a new index to be selected, and
such selection
did not conflict with the terms of the related Mortgage Note. The
Seller
executed and delivered any and all notices required under
applicable law and the
terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest
Rate and the Monthly Payment adjustments. Any interest required to
be paid
pursuant to state, federal and local law has been properly paid and
credited;
(ii)
Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert
the Mortgage
Interest Rate from an adjustable rate to a fixed rate;
(jj) Other Insurance Policies; No Defense to Coverage. No
action,
inaction or event has occurred and no state of facts exists or has
existed on or
prior to the Closing Date that has resulted or will result in the
exclusion
from, denial of, or defense to coverage under any applicable hazard
insurance
policy, PMI Policy or bankruptcy bond (including, without
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limitation, any exclusions, denials or defenses which would limit
or reduce the
availability of the timely payment of the full amount of the loss
otherwise due
thereunder to the insured), irrespective of the cause of such
failure of
coverage. The Seller has caused or will cause to be performed any
and all acts
required to preserve the rights and remedies of the Purchaser in
any insurance
policies applicable to the Mortgage Loans including, without
limitation, any
necessary notifications of insurers, assignments of policies or
interests
therein, and establishments of coinsured, joint loss payee and
mortgagee rights
in favor of the Purchaser. In connection with the placement of any
such
insurance, no commission, fee, or other compensation has been or
will be
received by the Seller or by any officer, director, or employee of
the Seller or
any designee of the Seller or any corporation in which the Seller
or any
officer, director, or employee had a financial interest at the time
of placement
of such insurance;
(kk) No Violation of Environmental Laws. To the best of the
Seller's
knowledge, there is no pending action or proceeding directly
involving the
Mortgaged Property in which compliance with any environmental law,
rule or
regulation is an issue; there is no violation of any environmental
law, rule or
regulation with respect to the Mortgage Property; and nothing
further remains to
be done to satisfy in full all requirements of each such law, rule
or regulation
constituting a prerequisite to use and enjoyment of said
property;
(ll) Servicemembers Civil Relief Act. The Mortgagor has not
notified
the Seller, and the Seller has no knowledge of any relief requested
or allowed
to the Mortgagor under the Servicemembers Civil Relief Act or other
similar
state statute;
(mm) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the origination of the
Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller,
who had no
interest, direct or indirect in the Mortgaged Property or in any
loan made on
the security thereof, and whose compensation is not affected by the
approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser
both satisfy
the requirements of Fannie Mae or Freddie Mac and Title XI of
FIRREA and the
regulations promulgated thereunder, all as in effect on the date
the Mortgage
Loan was originated;
(nn) Disclosure Materials. The Mortgagor has executed a statement
to
the effect that the Mortgagor has received all disclosure materials
required by,
and the Seller has complied with, all applicable law with respect
to the making
of the Mortgage Loans. The Seller shall maintain such statement in
the Mortgage
File;
(oo) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other
than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property
or
facilitating the trade-in or exchange of a Mortgaged Property;
(pp) Escrow Analysis. If applicable, with respect to each
Mortgage
Loan, the Seller has within the last twelve months (unless such
Mortgage was
originated within such twelve month period) analyzed the required
Escrow
Payments for each Mortgage and adjusted the amount of such payments
so that,
assuming all required payments are timely made, any
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deficiency will be eliminated on or before the first anniversary of
such
analysis, or any overage will be refunded to the Mortgagor, in
accordance with
RESPA and any other applicable law;
(qq) Credit Information. As to each consumer report (as defined
in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information
furnished by the Seller to the Purchaser, that Seller has full
right and
authority and is not precluded by law or contract from furnishing
such
information to the Purchaser and the Purchaser is not precluded
from furnishing
the same to any subsequent or prospective purchaser of such
Mortgage. The Seller
has and shall in its capacity as servicer, for each Mortgage Loan,
fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union
Credit
Information Company (three of the credit repositories), on a
monthly basis. This
representation and warranty is a Deemed Material and Adverse
Representation;
(rr) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the
ground lease
will not terminate earlier than five years after the maturity date
of the
Mortgage Loan; (3) the ground lease does not provide for
termination of the
lease in the event of lessee's default without the Mortgagee being
entitled to
receive written notice of, and a reasonable opportunity to cure the
default; (4)
the ground lease permits the mortgaging of the related Mortgaged
Property; (5)
the ground lease protects the Mortgagee's interests in the event of
a property
condemnation; (6) all ground lease rents, other payments, or
assessments that
have become due have been paid; and (7) the use of leasehold
estates for
residential properties is a widely accepted practice in the
jurisdiction in
which the Mortgaged Property is located;
(ss) Prepayment Penalty. Each Mortgage Loan that is subject to
a
Prepayment Penalty as provided in the related Mortgage Note is
identified on the
related Mortgage Loan Schedule. With respect to each Mortgage Loan
that has a
Prepayment Penalty feature, each such Prepayment Penalty is
enforceable and will
be enforced by the Seller during the period the Seller is acting as
Interim
Servicer for the benefit of the Purchaser, and each Prepayment
Penalty is
permitted pursuant to federal, state and local law. Each such
Prepayment Penalty
is in an amount not more than the maximum amount permitted under
applicable law
and no such Prepayment Penalty may be imposed for a term in excess
of five (5)
years with respect to Mortgage Loans originated prior to October,
1, 2002. With
respect to Mortgage Loans originated on or after October 1, 2002,
the duration
of the Prepayment Penalty period shall not exceed three (3) years
from the date
of the Mortgage Note unless the Mortgage Loan was modified to
reduce the
Prepayment Penalty period to no more than three (3) years from the
date of the
related Mortgage Note and the Mortgagor was notified in writing of
such
reduction in Prepayment Penalty period. With respect to any
Mortgage Loan that
contains a provision permitting imposition of a premium upon a
prepayment prior
to maturity: (i) prior to the Mortgage Loan's origination, the
Mortgagor agreed
to such premium in exchange for a monetary benefit, including but
not limited to
a rate or fee reduction, (ii) prior to the Mortgage Loan's
origination, the
Mortgagor was offered the option of obtaining a mortgage loan that
did not
require payment of such a premium, and (iii) the Prepayment Penalty
is disclosed
to the Mortgagor in the mortgage loan documents pursuant to
applicable state,
local and federal law. This representation and warranty is a Deemed
Material and
Adverse Representation;
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(tt) Predatory Lending Regulations. No Mortgage Loan is a High
Cost
Loan or Covered Loan, as applicable. No Mortgage Loan is covered by
the Home
Ownership and Equity Protection Act of 1994 and no Mortgage Loan is
in violation
of any comparable state or local law. The Mortgaged Property is not
located in a
jurisdiction where a breach of this representation with respect to
the related
Mortgage Loan may result in additional assignee liability to the
Purchaser, as
determined by Purchaser in its reasonable discretion. This
representation and
warranty is a Deemed Material and Adverse Representation;
(uu)
Single-premium credit life insurance policy. No Mortgagor was
required to purchase any single premium credit insurance policy
(e.g., life,
mortgage, disability, property, accident, unemployment or health
insurance
product) or debt cancellation agreement as a condition of obtaining
the
extension of credit. No Mortgagor obtained a prepaid single-premium
credit
insurance policy (e.g., life, mortgage, disability, property,
accident,
unemployment, mortgage or health insurance) in connection with the
origination
of the Mortgage Loan. No proceeds from any Mortgage Loan were used
to purchase
single premium credit insurance policies or debt cancellation
agreements as part
of the origination of, or as a condition to closing, such Mortgage
Loan. This
representation and warranty is a Deemed Material and Adverse
Representation;
(vv) Qualified Mortgage. The Mortgage Loan is a qualified
mortgage
under Section 860G(a)(3) of the Code;
(ww) Tax Service Contract. Each Mortgage Loan [is either (x) a
First
Lien Loan covered by a paid in full, life of loan, tax service
contract issued
by First American Real Estate Tax Service, and such contract is
transferable, or
(y) a Second Lien Loan subordinate to a First Lien Loan which, to
the best of
Seller's knowledge,] is covered by a paid in full, life of loan,
tax service
contract issued by First American Real Estate Tax Service, and such
contract is
transferable;
(xx) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without
regard to the
ability of the Mortgagor to repay and the extension of credit which
has no
apparent benefit to the Mortgagor, were employed in the origination
of the
Mortgage Loan;
(yy) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the
assignment to
the Purchaser) have been recorded in the appropriate jurisdictions
wherein such
recordation is necessary to perfect the lien thereof as against
creditors of the
Seller, or is in the process of being recorded;
(zz) Co-op Loans. With respect to a Mortgage Loan that is a
Co-op
Loan, the stock that is pledged as security for the Mortgage Loan
is held by a
person as a tenant-stockholder (as defined in Section 216 of the
Code) in a
cooperative housing corporation (as defined in Section 216 of the
Code);
(aaa) Mortgagor Bankruptcy. On or prior to the date 60 days
after
the related Closing Date, the Mortgagor has not filed and will not
file a
bankruptcy petition or has not become the subject and will not
become the
subject of involuntary bankruptcy proceedings or
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has not consented to or will not consent to the filing of a
bankruptcy
proceeding against it or to a receiver being appointed in respect
of the related
Mortgaged Property;
(bbb) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(ccc) Georgia Fair Lending Act. There is no Mortgage Loan that
was
originated (or modified) on or after October 1, 2002 and before
March 7, 2003
which is secured by property located in the State of Georgia. There
is no
Mortgage Loan that was originated on or after March 7, 2003 that is
a "high cost
home loan" as defined under the Georgia Fair Lending Act. This
representation
and warranty is a Deemed Material and Adverse Representation;
(ddd) No Arbitration. No Mortgagor with respect to any Mortgage
Loan
originated on or after August 1, 2004 agreed to submit to
arbitration to resolve
any dispute arising out of or relating in any way to the mortgage
loan
transaction. This representation and warranty is a Deemed Material
and Adverse
Representation;
(eee) Flood Service Contract. Each Mortgage Loan is covered by
a
paid in full, life of loan, flood service contract issued by First
American Real
Estate Tax Service or Fidelity, and such contract is
transferable;
(fff) Origination Practices/No Steering. No Mortgagor was
encouraged
or required to select a mortgage loan product offered by the
Mortgage Loan's
originator which is a higher cost product designed for less
creditworthy
borrowers, unless at the time of the Mortgage Loan's origination,
such Mortgagor
did not qualify taking into account credit history and
debt-to-income ratios for
a lower-cost credit product then offered by the Mortgage Loan's
originator or
any affiliate of the Mortgage Loan's originator. If, at the time of
loan
application, the Mortgagor may have qualified for a lower-cost
credit product
then offered by any mortgage lending affiliate of the Mortgage
Loan's
originator, the Mortgage Loan's originator referred the Mortgagor's
application
to such affiliate for underwriting consideration. This
representation and
warranty is a Deemed Material and Adverse Representation;
(ggg) Underwriting Methodology. The methodology used in
underwriting
the extension of credit for each Mortgage Loan employs, in part,
objective
mathematical principles which relate the Mortgagor's income, assets
and
liabilities to the proposed payment and such underwriting
methodology does not
rely on the extent of the Mortgagor's equity in the collateral as
the principal
determining factor in approving such credit extension. Such
underwriting
methodology confirmed that at the time of origination
(application/approval) the
Mortgagor had a reasonable ability to make timely payments on the
Mortgage Loan.
This representation and warranty is a Deemed Material and
Adverse
Representation;
(hhh) Points and Fees. No Mortgagor was charged "points and
fees"
(whether or not financed) in an amount greater than (i) $1,000, or
(ii) 5% of
the principal amount of such Mortgage Loan, whichever is greater.
For purposes
of this representation, such 5% limitation is calculated in
accordance with
Fannie Mae's anti-predatory lending requirements as set forth in
the Fannie Mae
Guides and "points and fees" (x) include origination, underwriting,
broker and
finder fees and charges that the mortgagee imposed as a condition
of making the
Mortgage Loan,
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whether they are paid to the mortgagee or a third party; and (y)
exclude bona
fide discount points, fees paid for actual services rendered in
connection with
the origination of the Mortgage Loan (such as attorneys' fees,
notaries fees and
fees paid for property appraisals, credit reports, surveys, title
examinations
and extracts, flood and tax certifications, and home inspections),
the cost of
mortgage insurance or credit-risk price adjustments, the costs of
title, hazard,
and flood insurance policies, state and local transfer taxes or
fees, escrow
deposits for the future payment of taxes and insurance premiums,
and other
miscellaneous fees and charges that, in total, do not exceed 0.25%
of the
principal amount of such Mortgage Loan. This representation and
warranty is a
Deemed Material and Adverse Representation;
(iii) Fees Charges. All points, fees and charges (including
finance
charges) and whether or not financed, assessed, collected or to be
collected in
connection with the origination and servicing of each Mortgage Loan
have been
disclosed in writing to the Mortgagor in accordance with applicable
state and
federal law and regulation. This representation and warranty is a
Deemed
Material and Adverse Representation; [and]
(jjj) [Second Lien Loans. With respect to each Second Lien
Loan:
(i) No Negative
Amortization of Related First Lien Loan. The
related first lien loan does not permit negative amortization;
(ii) Request for
Notice; No Consent Required. Where required or
customary in the jurisdiction in which the Mortgaged Property
is located, the original lender has filed for record a request
for notice of any action by the related senior lienholder, and
the Seller has notified such senior lienholder in writing of
the existence of the Second Lien Loan and requested
notification of any action to be taken against the Mortgagor
by such senior lienholder. Either (a) no consent for the
Second Lien Loan is required by the holder of the related
first lien loan or (b) such consent has been obtained and is
contained in the related Mortgage File;
(iii) No Default Under First Lien. To the best of Seller's
knowledge, the related first lien loan is in full force and
effect, and there is no default lien, breach, violation or
event which would permit acceleration existing under such
first lien mortgage or mortgage note, and no event which, with
the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration under such
first lien loan;
(iv) Right to Cure
First Lien. The related first lien mortgage
contains a provision which provides for giving notice of
default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related
first lien mortgage; and
(v) Principal
Residence. The related Mortgaged Property was the
Mortgagor's principal residence at the time of the origination
of such
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Second Lien Loan. This representation and warranty is a Deemed
Material and Adverse Representation.
Subsection 7.02 Seller Representations. The Seller hereby
represents
and warrants to the Purchaser that, as of the related Closing
Date:
(a) Due Organization and Authority. The Seller is a
[___________],
validly existing, and in good standing under the laws of its
jurisdiction of
incorporation or formation and 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 corporate 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
corporate 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 or by-laws
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
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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 and regulations, including
without
limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering
Laws"); the Seller has established an anti-money laundering
compliance program
as required by the Anti-Money Laundering Laws, has conducted the
requisite due
diligence in connection with the origination of each Mortgage Loan
for purposes
of the Anti-Money Laundering Laws, including with respect to the
legitimacy of
the applicable Mortgagor and the origin of the assets used by the
said Mortgagor
to purchase the property in question, and maintains, and will
maintain,
sufficient information to identify the applicable Mortgagor for
purposes of the
Anti-Money Laundering Laws
(i) Financial Statements; Other Information. 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 consistently applied throughout the
periods
involved, except as set forth in the notes thereto. In addition,
the Seller has
delivered information as to its loan gain and loss experience in
respect of
foreclosures and its loan delinquency experience for the
immediately preceding
three year period, in each case with respect to mortgage loans
owned by it and
such mortgage loans
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serviced for others during such period, and all such information so
delivered
shall be true and correct in all material respects. There has been
no change in
the business, operations, financial condition, properties or assets
of the
Seller since the date of the Seller's financial Statements that
would have a
material adverse effect on its ability to perform its obligations
under this
Agreement. The Seller has completed any forms requested by the
Purchaser in a
timely manner and in accordance with the provided instructions;
(j) Ability to Service. Seller has the facilities, procedures,
and
experienced personnel necessary for the sound servicing of mortgage
loans of the
same type as the Mortgage Loans. The Seller is duly qualified,
licensed,
registered and otherwise authorized under all applicable federal,
state and
local laws, and regulations, if applicable, meets the minimum
capital
requirements set forth by HUD, the OTS, the OCC or the FDIC, if
applicable, and
is in good standing to enforce, originate, sell mortgage loans to,
and service
mortgage loans in the jurisdiction wherein the Mortgaged Properties
are located;
(k) Reasonable Servicing Fee. The Seller acknowledges and
agrees
that the Servicing Fee represents reasonable compensation for
performing such
services and that the entire Servicing Fee shall be treated by the
Seller, for
accounting and tax purposes, as compensation for the servicing
and
administration of the Mortgage Loans pursuant to this
Agreement;
(l) 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 7.01 could be made and such selection was not
made in a
manner so as to affect adversely the interests of the
Purchaser;
(m) 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 2 hereto,
except for such documents as will be delivered to the
Custodian;
(n) 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 9 on the related Closing Date in the form attached as
Exhibit B to each
related Assignment and Conveyance Agreement;
(o) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other
document
furnished or to be furnished 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
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;
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(p) 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;
(q) 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 pursuant to this Agreement
will be
afforded sale treatment for tax and accounting purposes;
(r) 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; and
(s) [Insured Depository Institution Representations. Seller is
an
"insured depository institution" as that term is defined in Section
1813(c)(2)
of Title 12 of the United States Code, as amended, and accordingly,
Seller makes
the following additional representations and warranties:
(i) This Agreement between Purchaser and Seller conforms to all
applicable
statutory and regulatory requirements; and
(ii) This Agreement is (1) executed contemporaneously with the
agreement
reached by Purchaser and Seller, (2) approved by a specific
corporate
or banking association resolution by the Seller's board of
directors,
which approval shall be reflected in the minutes of said board,
and (3) an
official record of the Seller. A copy of such resolution,
certified
by a vice president or higher officer of Seller has been
provided
to Purchaser.]
Subsection 7.03 Remedies for Breach of Representations and
Warranties. It is understood and agreed that the representations
and warranties
set forth in Subsections 7.01 and 7.02 shall survive the sale of
the Mortgage
Loans to the Purchaser and shall inure to the benefit of the
Purchaser,
notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any
Mortgage
File. With respect to any representation or warranty contained in
Subsections
7.01 or 7.02 hereof that is made to the Seller's knowledge, if it
is discovered
by the Purchaser that the substance of such representation and
warranty was
inaccurate as of the related Closing Date and such inaccuracy
materially and
adversely affects the value of the related Mortgage Loan, then
notwithstanding
the Seller's lack of knowledge with respect to the inaccuracy at
the time the
representation or warranty was made, such inaccuracy shall be
deemed a breach of
the applicable representation or warranty. Upon discovery by either
the Seller,
the Servicer or the Purchaser of a breach of any of the
foregoing
representations and warranties, the party discovering such breach
shall give
prompt written notice to the other relevant parties.
Within sixty (60) days after the earlier of either discovery by
or
notice to the Seller of any breach of a representation or warranty,
which
materially and adversely affects the value of the Mortgage Loans or
the interest
of the Purchaser therein (or which materially and
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adversely affects the value of the applicable Mortgage Loan or the
interest of
the Purchaser therein in the case of a representation and warranty
relating to a
particular Mortgage Loan), the Seller shall use its best efforts
promptly to
cure such breach in all material respects and, if such breach
cannot be cured,
the Seller shall, at the Purchaser's option, repurchase such
Mortgage Loan or
Mortgage Loans at the Repurchase Price. Notwithstanding the above
sentence, (i)
within sixty (60) days after the earlier of either discovery by, or
notice to,
the Seller of any breach of the representation and warranty set
forth in clause
(vv) of Subsection 7.01, the Seller shall repurchase such Mortgage
Loan at the
Repurchase Price and (ii) any breach of a Deemed Material and
Adverse
Representation shall automatically be deemed to materially and
adversely affects
the value of the Mortgage Loans or the interest of the Purchaser
therein. In the
event that a breach shall involve any representation or warranty
set forth in
Subsection 7.02, and such breach cannot be cured within 60 days of
the earlier
of either discovery by or notice to the Seller of such breach, all
of the
Mortgage Loans affected by such breach shall, at the Purchaser's
option, be
repurchased by the Seller at the Repurchase Price. However, if the
breach, shall
involve a representation or warranty set forth in Subsection 7.01
(except as
provided in the second sentence of this paragraph with respect to
certain
breaches for which no substitution is permitted) and the Seller
discovers or
receives notice of any such breach within 120 days of the related
Closing Date,
the Seller shall, at the Purchaser's option and provided that the
Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as
provided above, remove such Mortgage Loan and substitute in its
place a
Qualified Substitute Mortgage Loan or Qualified Substitute Mortgage
Loans;
provided, however, that any such substitution shall be effected
within such one
hundred twenty (120) days after the related Closing Date. If the
Seller has no
Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage
Loan at the Repurchase Price. Any repurchase of a Mortgage Loan
pursuant to the
foregoing provisions of this Subsection 7.03 shall occur on a date
designated by
the Purchaser, and acceptable to the Seller, and shall be
accomplished by the
Seller remitting to the Servicer for deposit the amount of the
Repurchase Price
in the Custodial Account for distribution to the Purchaser on the
next scheduled
Remittance Date.
At the time of repurchase of any deficient Mortgage Loan (or
removal
of any Deleted Mortgage Loan), the Purchaser and the Seller shall
arrange for
the assignment of the repurchased Mortgage Loan (or Deleted
Mortgage Loan) to
the Seller or its designee and the delivery to the Seller of any
documents held
by the Purchaser relating to the repurchased Mortgage Loan in the
manner
required by this Agreement with respect to the purchase and sale of
such
Mortgage Loan on the related Closing Date. In the event the
Repurchase Price is
deposited in the Custodial Account, the Seller shall,
simultaneously with its
remittance to the Servicer of such Repurchase Price for deposit,
give written
notice to the Purchaser that such deposit has taken place. Upon
such repurchase,
the Seller shall amend the related Mortgage Loan Schedule to
reflect the
withdrawal of the repurchased Mortgage Loan from this
Agreement.
As
to any Deleted Mortgage Loan for which the Seller substitutes
one
or more Qualified Substitute Mortgage Loans, the Seller shall be
deemed to have
made the representations and warranties set forth in this Agreement
except that
all such representations and warranties set forth in this Agreement
shall be
deemed made as of the date of such substitution. No substitution
will be made in
any calendar month after the Determination Date for such month. The
Seller shall
effect such substitution by delivering to the Purchaser for each
Qualified
Substitute Mortgage Loan the Mortgage Note, the Mortgage, the
Assignment of
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Mortgage and such other documents and agreements as are required by
Subsection
6.03. The Seller shall remit to the Servicer for deposit in the
Custodial
Account the Monthly Payment less the Servicing Fee due on each
Qualified
Substitute Mortgage Loan in the month following the date of such
substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the
month of substitution shall be retained by the Seller. For the
month of
substitution, distributions to the Purchaser shall include the
Monthly Payment
due on any Deleted Mortgage Loan in the month of substitution, and
the Seller
shall thereafter be entitled to retain all amounts subsequently
received by the
Seller in respect of such Deleted Mortgage Loan. The Seller shall
give written
notice to the Purchaser that such substitution has taken place and
shall amend
the related Mortgage Loan Schedule to reflect the removal of such
Deleted
Mortgage Loan from the terms of this Agreement and the substitution
of the
Qualified Substitute Mortgage Loan. Upon such substitution, each
Qualified
Substitute Mortgage Loan shall be subject to the terms of this
Agreement in all
respects, and the Seller shall be deemed to have made with respect
to such
Qualified Substitute Mortgage Loan, as of the date of substitution,
the
covenants, representations and warranties set forth in Subsections
7.01 and
7.02.
For any month in which the Seller substitutes one or more
Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the Seller
shall determine the amount (if any) by which the aggregate
principal balance of
all such Qualified Substitute Mortgage Loans as of the date of
substitution is
less than the aggregate Stated Principal Balance of all such
Deleted Mortgage
Loans (after application of scheduled principal payments due in the
month of
substitution). The amount of such shortfall shall be remitted to
the Servicer by
the Seller for distribution by the Servicer in the month of
substitution
pursuant to Subsection 11.04. Accordingly, on the date of such
substitution, the
Seller will remit to the Servicer from its own funds for deposit
into the
Custodial Account an amount equal to the amount of such shortfall
plus one
month's interest thereon at the Mortgage Loan Remittance Rate.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former
directors,
officers, employees and agents and any Successor Servicer and its
present and
former directors, officers, employees and agents and hold such
parties harmless
against any losses, damages, penalties, fines, forfeitures, legal
fees and
expenses and related costs, judgments, and other costs and expenses
resulting
from any claim, demand, defense or assertion based on or grounded
upon, or
resulting from, a breach of the Seller representations and
warranties contained
in this Agreement or any Reconstitution Agreement. For purposes of
this
paragraph, "Purchaser" shall mean the Person then acting as the
Purchaser under
this Agreement and any and all Persons who previously were
"Purchasers" under
this Agreement and "Successor Servicer" shall mean any Person
designated as the
Successor Servicer pursuant to this Agreement and any and all
Persons who
previously were "Successor Servicers" pursuant to this Agreement.
It is
understood and agreed that the obligations of the Seller set forth
in this
Subsection 7.03 to cure, repurchase or substitute for a defective
Mortgage Loan,
and to indemnify the Purchaser and Successor Servicer under
Subsection 12.01
constitute the sole remedies of the Purchaser and Successor
Servicer respecting
a breach of the representations and warranties set forth in
Subsections 7.01 and
7.02.
Any cause of action against the Seller relating to or arising out
of
the breach of any representations and warranties made in
Subsections 7.01 and
7.02 shall accrue as to any Mortgage Loan upon (i) discovery of
such breach by
the Purchaser or notice thereof by the Seller
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to the Purchaser, (ii) failure by the Seller to cure such breach,
substitute a
Qualified Substitute Mortgage Loan, or repurchase such Mortgage
Loan as
specified above and (iii) demand upon the Seller by the Purchaser
for compliance
with this Agreement.
Subsection 7.04 Repurchase of Mortgage Loans with Early Payment
Defaults. If the related Mortgagor is delinquent with respect to
any of the
Mortgage Loan's first three (3) Monthly Payments at any time either
(i) after
origination of such Mortgage Loan, or (ii) after the related
Closing Date, the
Seller, at the Purchaser's option, shall repurchase such Mortgage
Loan from the
Purchaser at a price equal to the Repurchase Price. The Seller
shall repurchase
such delinquent Mortgage Loan within thirty (30) days of such
request.
Subsection 7.05 Premium Recapture. With respect to any Mortgage
Loan
without Prepayment Penalties that prepays in full during the first
six months
following the related Closing Date, and with respect to any
Mortgage Loan that
is repurchased pursuant to Subsection 7.04, the Seller shall pay
the Purchaser,
within three (3) Business Days after such prepayment in full or
repurchase, an
amount equal to the excess of the Purchase Price Percentage for
such Mortgage
Loan over par, multiplied by the outstanding principal balance of
such Mortgage
Loan as of the related Cut-off Date.
Section 8. Closing. The closing for the purchase and sale of
each
Mortgage Loan Package shall take place on the related Closing Date.
At the
Purchaser's option, each closing shall be either: by telephone,
confirmed by
letter or wire as the parties shall agree, or conducted in person,
at such place
as the parties shall agree. Each closing shall be subject to each
of the
following conditions:
(a) at least two Business Days prior to the related Closing
Date,
the Seller shall deliver to the Purchaser a magnetic diskette, or
transmit by
modem, a listing on a loan-level basis of the necessary information
to compute
the Purchase Price of the Mortgage Loans delivered on such Closing
Date
(including accrued interest), and prepare a Mortgage Loan
Schedule;
(b) all of the representations and warranties of the Seller in
this
Agreement shall be true and correct as of the related Closing Date
and no event
shall have occurred which, with notice or the passage of time,
would constitute
an Event of Default under this Agreement;
(c) the Purchaser's attorneys shall have received in escrow,
all
Closing Documents as specified in Section 9, in such forms as are
agreed upon
and acceptable to the Purchaser, duly executed by all signatories
as required
pursuant to the terms hereof; and
(d) all other terms and conditions of this Agreement shall have
been
complied with.
Section 9. Closing Documents. On the related Closing Date, the
Seller shall deliver to the Purchaser's attorneys in escrow fully
executed
originals of:
(a) this Agreement (to be executed and delivered only for the
initial Closing Date);
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(b) the related Purchase Price and Terms Agreement, executed in
four
(4) counterparts;
(c) with respect to the initial Closing Date, the Custodial
Agreement, dated as of the initial Cut-off Date;
(d) with respect to the initial Closing Date, a Custodial
Account
Certification in the form attached as Exhibit 4 hereto or a
Custodial Account
Letter Agreement in the form attached as Exhibit 5 hereto;
(e) with respect to the initial Closing Date, an Escrow Account
Certification in the form attached as Exhibit 6 hereto or an Escrow
Account
Letter Agreement in the form attached as Exhibit 7 hereto;
(f) the related Mortgage Loan Schedule, segregated by Mortgage
Loan
Package, one copy to be attached hereto, one copy to be attached to
the
Custodian's counterpart of the Custodial Agreement, and one copy to
be attached
to the related Assignment and Conveyance as the Mortgage Loan
Schedule thereto;
(g) with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit 10 hereto with respect to the
Seller,
including all attachments thereto and with respect to subsequent
Closing Dates,
an Officer's Certificate upon request of the Purchaser; and
(h) with respect to the initial Closing Date, an Opinion of
Counsel
of the Seller (who may be an employee of the Seller), in the form
of Exhibit 11
hereto and with respect to subsequent Closing Dates, an Opinion of
Counsel of
the Seller upon request of the Purchaser;
(i) with respect to the initial Closing Date, an Opinion of
Counsel
of the Custodian (who may be an employee of the Custodian), in the
form of an
exhibit to the Custodial Agreement, if required;
(j) a Security Release Certification, in the form of Exhibit 12
or
Exhibit 13, as applicable, hereto executed by any person, as
requested by the
Purchaser, if any of the Mortgage Loans have at any time been
subject to any
security interest, pledge or hypothecation for the benefit of such
person;
(k) a certificate or other evidence of merger or change of
name,
signed or stamped by the applicable regulatory authority, if any of
the Mortgage
Loans were acquired by the Seller by merger or acquired or
originated by the
Seller while conducting business under a name other than its
present name, if
applicable;
(l) with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit 8 and with respect to
each
subsequent Closing Date, the Underwriting Guidelines to be attached
to the
related Assignment and Conveyance;
(m) Assignment and Conveyance Agreement in the form of Exhibit
14
hereto, including all exhibits thereto;
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(n) a [Custodian's Certification], as required under the
Custodial
Agreement, in the form of Exhibit [__] to the Custodial Agreement;
and
(o) a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for each
MERS Designated
Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its
attorneys.
Section 10. Costs. The Purchaser shall pay any commissions due
its
salesmen and the legal fees and expenses of its attorneys and
custodial fees.
All other costs and expenses incurred in connection with the
transfer and
delivery of the Mortgage including recording fees, fees for title
policy
endorsements and continuations, fees for recording Assignments of
Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
Section 11. Administration and Servicing of the Mortgage Loans.
Subsection 11.01 Servicer to Act as Servicer. The Servicer
shall
service and administer the Mortgage Loans in accordance with this
Agreement and
Accepted Servicing Procedures and the terms of the Mortgage Notes
and Mortgages,
and shall have full power and authority, acting alone or through
sub-servicers
or agents, to do or cause to be done any and all things in
connection with such
servicing and administration which the Servicer may deem necessary
or desirable
and consistent with the terms of this Agreement. The Servicer may
perform its
servicing responsibilities through agents or independent
contractors, but shall
not thereby be released from any of its responsibilities
hereunder.
Consistent with the terms of this Agreement, the Servicer may
waive,
modify or vary any term of any Mortgage Loan or consent to the
postponement of
strict compliance with any such term or in any manner grant
indulgence to any
Mortgagor; provided, however, that (unless the Mortgagor is in
default with
respect to the Mortgage Loan, or such default is, in the judgment
of the
Servicer, imminent, and the Servicer has the consent of the
Purchaser) the
Servicer shall not permit any modification with respect to any
Mortgage Loan
which materially and adversely affects the Mortgage Loan, including
without
limitation, any modification that would defer or forgive the
payment of any
principal or interest, change the outstanding principal amount
(except for
actual payments of principal), make any future advances, extend the
final
maturity date or change the Mortgage Interest Rate, as the case may
be, with
respect to such Mortgage Loan. Notwithstanding the foregoing, the
Servicer shall
not waive any Prepayment Penalty or portion thereof unless (i)
the
enforceability thereof shall have been limited by bankruptcy,
insolvency,
moratorium, receivership or other similar laws relating to
creditors' rights
generally or is otherwise prohibited by law, or (ii) the
enforceability thereof
shall have been permanently limited due to acceleration in
connection with a
foreclosure or other involuntary payment or (iii) in the Servicer's
reasonable
judgment, (x) such waiver relates to a
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default or a reasonably foreseeable default, (y) such waiver would
maximize
recovery of total proceeds taking into account the value of such
Prepayment
Penalty and related Mortgage Loan and (z) doing so is standard and
customary in
servicing Mortgage Loans (including any waiver of a Prepayment
Penalty in
connection wit
