EXECUTION
RECONSTITUTION
AGREEMENT
This Reconstitution Agreement (this “
Agreement ”) dated as of November 1, 2006,
is by and among Greenwich Capital Financial Products, Inc. (“
GCFP ”), Greenwich Capital Acceptance, Inc.
(“ GCA ”) and Downey Savings and Loan
Association, F.A., as servicer (the “
Servicer ” or “
Downey ”), and acknowledged by Wells Fargo
Bank, N.A., as master servicer (in such capacity, the “
Master Servicer ”) and as securities
administrator (in such capacity, the “ Securities
Administrator ”) and Deutsche Bank National Trust
Company, as trustee (the “ Trustee ”)
of the HarborView Mortgage Loan Trust 2006-13 (the “
Trust Fund ”) created under the Pooling and
Servicing Agreement (defined below).
RECITALS
WHEREAS, GCFP has conveyed certain mortgage
loans listed on Exhibit Two hereto (the “ Mortgage
Loans ”) to GCA, which in turn has conveyed the
Mortgage Loans to the Trustee pursuant to a pooling and servicing
agreement dated as of November 1, 2006 (the “ Pooling
and Servicing Agreement ”), among GCFP, GCA, the
Master Servicer, the Securities Administrator, Clayton Fixed Income
Services Inc., as credit risk manager and the Trustee, in its
capacity as such and as custodian;
WHEREAS, the Mortgage Loans are currently being
serviced by Downey for GCFP pursuant to a Master Mortgage Loan
Purchase and Interim Servicing Agreement, dated as of December 31,
2005 (the “ Purchase Agreement ”),
between GCFP and Downey, as amended by Amendment Number One, dated
as of September 8, 2006, a copy of which is annexed hereto as
Exhibit Three;
WHEREAS, GCFP desires that Downey continue to
service the Mortgage Loans and Downey has agreed to do so, subject
to the rights of GCFP and the Trustee to terminate the rights and
obligations of Downey hereunder as set forth herein and to the
other conditions set forth herein;
WHEREAS, Section 25 of the Purchase Agreement
provides that, subject to certain conditions set forth therein,
GCFP may assign the Purchase Agreement to any person to whom any
“Mortgage Loan” (as such term is defined in the
Purchase Agreement) is transferred pursuant to a sale or financing.
Without limiting the foregoing, Downey has agreed, in Section 12
and Section 32 of the Purchase Agreement, to enter into additional
documents, instruments or agreements as may be reasonably necessary
in connection with any “Securitization Transaction” (as
such term is defined in the Purchase Agreement) contemplated by
GCFP pursuant to the Purchase Agreement;
WHEREAS, Downey and GCFP agree that this
Agreement shall constitute a “Reconstitution Agreement”
(as such term is defined in the Purchase Agreement) in connection
with a Securitization Transaction that shall govern the Mortgage
Loans for so long as such Mortgage Loans remain subject to the
provisions of the Pooling and Servicing Agreement;
WHEREAS, pursuant to this Purchase Agreement,
the Master Servicer, and any successor master servicer, shall be
obligated, among other things, to supervise the servicing of the
Mortgage Loans on behalf of the Trustee and the Trust Fund, and
shall have the right to terminate the rights and obligations of
Downey under the Purchase Agreement upon the occurrence of an Event
of Default (as defined by this Agreement);
NOW, THEREFORE, in consideration of the mutual
promises contained herein the parties hereto agree as
follows:
Definitions
Capitalized terms used herein and not defined in
this Agreement (including Exhibit One hereto) or in the Purchase
Agreement shall have the meanings ascribed to them in the Pooling
and Servicing Agreement.
Trust Cut-off Date
The parties hereto acknowledge that by operation
of Subsection 11.14 of the Servicing Addendum to the Purchase
Agreement (as modified by this Agreement), the remittance on
December 18, 2006, to be made to the Trust Fund is to include all
principal collections due after November 1, 2006 (the “
Trust Cut-off Date ”), plus interest thereon
at the weighted average Mortgage Interest Rate collected during the
immediately preceding Due Period, but exclusive of any portion
thereof allocable to a period prior to the Trust Cut-off Date, and
taking into account the adjustments specified in the first
paragraph of Subsection 11.14 of the Servicing Addendum.
Servicing
Downey agrees, with respect to the servicing of
the Mortgage Loans, to perform and observe the duties,
responsibilities and obligations that are to be performed and
observed by the Servicer under the provisions of the Purchase
Agreement, except as otherwise provided herein and on Exhibit One
hereto, as of the Trust Cut-off Date and that the provisions of the
Purchase Agreement, as so modified, are and shall be a part of this
Agreement to the same extent as if set forth herein in
full.
Servicing Fee
The
Servicing Fee for the Mortgage Loans for any Due Period shall be
the lesser of (a) the Servicing Fee, as defined in the Purchase
Agreement and (b) an amount equal to 0.375 % per annum (the
“ Servicing Fee Rate ”) multiplied by
the Pool Balance at the beginning of such Due Period. Such
fee shall be payable monthly 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 the
Servicing Addendum to the Purchase Agreement) of the related
Monthly Payment collected by the Servicer.
Master Servicing; Termination of
Servicer
Downey, including any successor servicer
hereunder, shall be subject to the supervision of the Master
Servicer, which Master Servicer shall be obligated to enforce
Downey’s obligation to service the Mortgage Loans in
accordance with the provisions of this Agreement. The Master
Servicer, acting on behalf of the Trustee and the Trust Fund, shall
have the same rights (but not the obligations) as the Purchaser to
enforce the obligations of Downey under the Purchase Agreement and
unless otherwise specified in Exhibit One to this Agreement,
references to the “Initial Purchaser” or the
“Purchaser” in the Purchase Agreement shall be deemed
to refer to the Master Servicer (including the Trustee and the
Trust Fund on whose behalf the Master Servicer is acting);
provided, however , that any obligation of the Purchaser
to pay or reimburse Downey shall be satisfied solely from funds
available for such purposes in the Custodial Account or the Trust
Fund pursuant to the Pooling and Servicing Agreement. The Master
Servicer shall be entitled to terminate the rights and obligations
of Downey under this Agreement upon the occurrence of an Event of
Default under Section 15.01 of the Purchase Agreement (as modified
by this Agreement). Notwithstanding anything herein to the
contrary, in no event shall the Master Servicer or the Trustee be
required to assume any of the obligations of the Purchaser under
the Purchase Agreement and, in connection with the performance of
the Master Servicer’s duties hereunder, the parties and other
signatories hereto agree that the Master Servicer shall be entitled
to all the rights, protections and limitations of liability
afforded to the Master Servicer under the Pooling and Servicing
Agreement.
Warranties
GCFP and Downey mutually warrant and represent
that, with respect to the Mortgage Loans, the Purchase Agreement is
in full force and effect as of the Trust Cut-off Date and has not
been amended or modified in any way with respect to the Mortgage
Loans and no notice of termination has been given
thereunder.
Representations
Pursuant to Section 12 of the Purchase
Agreement, Downey hereby represents and warrants, for the benefit
of GCFP, GCA, the Trustee and the Trust Fund (including the Trustee
and the Master Servicer acting on the Trust Fund’s behalf),
that (i) the representations and warranties set forth in Section
7.01 and Section 7.02 of the Purchase Agreement are true and
correct as of December 13, 2006 (the “Reconstitution
Date”) as if such representations and warranties were made on
such date.
Downey hereby acknowledges and agrees that the
remedies available to GCFP, GCA and the Trust Fund (including the
Trustee and the Master Servicer acting on the Trust Fund’s
behalf) in connection with any breach of the representations and
warranties made by Downey set forth above that materially and
adversely affects the value of that Mortgage Loan and the interests
of the Certificateholders or the Certificate Insurer in such
Mortgage Loan shall be as set forth in Section 7.03 of the Purchase
Agreement as if they were set forth herein (including without
limitation the repurchase and indemnity obligations set forth
therein). Notwithstanding anything to the contrary contained herein
or in the Purchase Agreement, it is understood by the parties
hereto that a breach of the representations and warranties set
forth in Subsections 7.02(viii), (xliv), (xlvii), (lv), (lvii),
(lviii), (lix), (lx), (lxii), (lxiii), (lxiv) or (lxxxiii) will be
deemed to materially and adversely affect the value of the related
Mortgage Loan or the interest of the Purchaser therein. Such
enforcement of a right or remedy by the Trustee shall have the same
force and effect as if the right or remedy had been enforced or
exercised by GCFP directly.
Assignment
Downey hereby acknowledges that the rights of
GCFP under the Purchase Agreement as amended by this Agreement will
be assigned to GCA under a Mortgage Loan Purchase Agreement and by
GCA to the Trust Fund under the Pooling and Servicing Agreement. In
addition, the Trust Fund will make a REMIC election. Downey hereby
consents to such assignment and assumption and acknowledges the
Trust Fund’s REMIC election.
Notices
1. All written information required to be
delivered to the Master Servicer hereunder shall be delivered to
the Master Servicer at the following address:
Attention: Corporate Trust Group, HarborView
2006-13
(or in the case of overnight
deliveries,
Columbia , Maryland
21045)
Telephone: (410) 884-2000
Facsimile: (410) 715-2380
2. All remittances required to be made to the
Master Servicer under this Agreement shall be on a
scheduled/scheduled basis and made to the following wire
account:
Account Name: SAS CLEARING
Account Number: 3970771416
For further credit to: HarborView 2006-13,
Account # 50972900
3. All written information required to be
delivered to the Trustee hereunder shall be delivered to the
Trustee at the following address:
Deutsche Bank
National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Trust Administration -
GC0613
Telephone: (714) 247-6000
Facsimile: (714) 247-6478
4.
All written information required to
be delivered to GCFP under the Purchase Agreement and under this
Agreement shall be delivered to GCFP at the following
address:
Greenwich
Capital Financial Products, Inc.
Greenwich, Connecticut 06830
Attention: Legal Department (HarborView
2006-13)
Telephone: (203) 625-6072
Facsimile: (203) 618-2163
Governing Law
THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Counterparts
This Agreement
may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original, but all of which
counterparts shall together constitute but one and the same
instrument.
Reconstitution
Downey and GCFP
agree that this Agreement is a Reconstitution Agreement executed in
connection with a Securitization Transaction and that the date
hereof is the Reconstitution Date.
Intended Third Party
Beneficiaries
Notwithstanding any provision herein to the
contrary, the parties to this Agreement agree that it is
appropriate, in furtherance of the intent of such parties as set
forth herein, that the Trustee, the Master Servicer and the
Securities Administrator receive the benefit of the provisions of
this Agreement as intended third party beneficiaries of this
Agreement to the extent of such provisions. Downey shall have the
same obligations to the Trustee, the Master Servicer and the
Securities Administrator as if the Trustee, the Master Servicer and
the Securities Administrator were each a party to this Agreement,
and the Trustee, the Master Servicer and the Securities
Administrator shall have the same rights and remedies to enforce
the provisions of this Agreement as if each were a party to this
Agreement. Notwithstanding the foregoing, all rights and
obligations of the Trustee hereunder (other than the right to
indemnification) shall terminate upon termination of the Trust Fund
pursuant to the Pooling and Servicing Agreement.
Limited Role of the
Trustee
The Trustee shall have no obligations or duties
under this Agreement except as expressly set forth herein. No
implied duties on the part of the Trustee shall be read into this
Agreement. Nothing herein shall be construed to be an assumption by
the Trustee of any duties or obligations of any party to this
Agreement or the Servicing Agreement, the duties of the Trustee
being solely those set forth in the Pooling and Servicing
Agreement. The Trustee is entering into this Agreement solely in
its capacity as Trustee under the Pooling and Servicing Agreement
and not individually, and there shall be no recourse against the
Trustee in its individual capacity hereunder or for the payment of
any obligations of the Trust Fund.
Executed as of the day and year first above
written.
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GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC.
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By:
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/s/ Shakti
Radhakishun
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Name:
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Title:
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GREENWICH CAPITAL ACCEPTANCE,
INC.
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By:
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Name:
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Title:
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DOWNEY
SAVINGS AND LOAN ASSOCIATION, F.A.,
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By:
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Name:
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Title:
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Executive Vice
President
Director of Secondary Marketing
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Acknowledged
By
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WELLS
FARGO BANK, N.A.,
as Master
Servicer and Securities Administrator
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By:
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/s/ Graham
Oglesby
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Name:
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Title:
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Assistant Vice
President
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DEUTSCHE BANK NATIONAL TRUST
COMPANY ,
not in its
individual capacity, but solely as Trustee
under the
Pooling and Servicing Agreement
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By:
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/s/ Karlene
Benvenuto
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Name:
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Title:
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Authorized
Signer
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EXHIBIT
ONE
Modifications to the Purchase
Agreement with respect to the Mortgage Loans only:
The following new definitions are added to
Section 1 in the appropriate alphabetical order to read as
follows:
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1.
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The definition
of “Business Day” in Section 1 is hereby amended in its
entirety to read as follows:
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Business
Day : Any day other than
a Saturday or Sunday, or a day on which banks and savings and loan
institutions in the State of Maryland, the State of Connecticut,
the State of Illinois, the State of Colorado, the State of
Minnesota, the State of Iowa, the State of California or the State
of New York are authorized or obligated by law or executive order
to be closed.
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2.
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The definition
of “Distribution Date” is hereby amended in its
entirety to read as follows:
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Distribution
Date : The 18
th calendar day of any month or, if such 18
th day is not a Business Day, the Business Day
immediately preceding such 18 th day.
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3.
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The
definition of "Eligible Account" in Section 1 is hereby amended in
its entirety to read as follows:
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Eligible Account : Any of
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(i)
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an account or
accounts maintained with a federal or state chartered depository
institution or trust company the short-term unsecured debt
obligations of which (or, in the case of a depository institution
or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding
company) are rated in the highest short term rating category of the
Rating Agency at the time any amounts are held on deposit
therein;
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(ii)
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a trust account
or accounts maintained with the trust department of a federal or
state chartered depository institution, national banking
association or trust company acting in its fiduciary
capacity,
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(iii)
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an account
otherwise acceptable to the Rating Agency without reduction or
withdrawal of its then current ratings of the Certificates (without
regards to the Certificate Insurance Policy) as evidenced by a
letter from the Rating Agency to the Trustee.
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Eligible
Accounts may bear interest, and any account with the depository
institution acting as Trustee hereunder may be an Eligible Account
so long as it otherwise satisfies the requirements of this
definition.
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4.
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The definition
of “Mortgage Interest Rate” in Section 1 is hereby
amended by adding the phrase “net of any Relief Act
Reduction” to the end of such definition.
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5.
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The definition
of “Opinion of Counsel” in Section 1 is hereby amended
in its entirety to read as follows:
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Opinion of
Counsel : A written
opinion of counsel, who may be an employee of Downey, that is
reasonably acceptable to the Master Servicer provided that any
Opinion of Counsel relating to (a) qualification of the Mortgage
Loans in a REMIC or (b) compliance with the REMIC Provisions, must
be an opinion of counsel reasonably acceptable to the Master
Servicer and GCFP, who (i) is in fact independent of Downey, (ii)
does not have any material direct or indirect financial interest in
Downey or in any affiliate of Downey and (iii) is not connected
with Downey as an officer, employee, director or person performing
similar functions.
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6.
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A new
definition of “Permitted Investments” is hereby added
to Section 1 immediately following the definition of
“Periodic Rate Cap” to read as follows:
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Permitted
Investments : Any one or
more of the following obligations or securities acquired at a
purchase price of not greater than par:
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(i)
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direct
obligations of, or obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United
States;
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(ii)
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(A) demand and
time deposits in, certificates of deposit of, bankers’
acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee, the Master
Servicer or their agents acting in their respective commercial
capacities) incorporated under the laws of the United States of
America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the
time of such investment or contractual commitment providing for
such investment, such depository institution or trust company or
its ultimate parent has a short-term uninsured debt rating in one
of the two highest available rating categories of S&P and the
highest available rating category of Moody’s and (B) any
other demand or time deposit or deposit which is fully insured by
the FDIC and are rated Prime-1 by Moody’s;
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(iii)
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repurchase
obligations with respect to any security described in clause
(i) above and entered into with a depository institution or
trust company (acting as principal) rated by S&P and
Moody’s, respectively, in the two highest applicable rating
categories;
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(iv)
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securities
bearing interest or sold at a discount that are issued by any
corporation incorporated under the laws of the United States of
America, the District of Columbia or any State thereof and that are
rated by the Rating Agency in its highest long-term unsecured
rating categories at the time of such investment or contractual
commitment providing for such investment;
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(v)
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commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations) that is rated by the Rating Agency in
its highest short-term unsecured debt rating available at the time
of such investment;
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(vi)
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units of money
market funds (which may be 12b-1 funds, as contemplated by the
Commission under the Investment Company Act of 1940) registered
under the Investment Company Act of 1940 including funds managed or
advised by the Trustee, the Master Servicer or an Affiliate thereof
having the highest applicable rating from the Rating Agency;
and
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(vii)
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if previously
confirmed in writing to the Trustee, any other demand, money market
or time deposit, or any other obligation, security or investment,
as may be acceptable to the Rating Agency in writing as a permitted
investment of funds backing securities having ratings equivalent to
its highest initial ratings of the Senior Certificates;
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provided , however , that no instrument
described hereunder shall evidence either the right to receive (a)
only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and
principal payments with respect to such instrument provide a yield
to maturity at par greater than 120% of the yield to maturity at
par of the underlying obligations.
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7.
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A new
definition of “Rating Agency” is hereby added to
Section 1 immediately following the definition of “Rate/Term
Refinancing” to read as follows:
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Rating
Agency : Any nationally
recognized statistical rating agency rating the securities issued
in a mortgage securitization as a result of a Securitization
Transaction.
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8.
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A new
definition of “Relief Act Reduction” is hereby added to
Section 1 immediately following the definition of “Refinanced
Mortgage Loan” to read as follows:
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Relief Act
Reduction : With respect
to any Mortgage Loan as to which there has been a reduction in the
amount of the interest collectible thereon as a result of the
application of the Servicemembers Civil Relief Act, or any similar
state law, any amount by which interest collectible on such
Mortgage Loan for the Due Date in the related Due Period is less
than the interest accrued thereon for the applicable one-month
period at the Mortgage Interest Rate without giving effect to such
reduction.
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9.
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A new
definition of “Remittance Date” is added in Section 1
immediately after the definition of “REMIC Provisions”
to read as follows:
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Remittance
Date : The 18
th calendar day of any month or, if such 18
th day is not a Business Day, the Business Day
immediately preceding such 18 th day.
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10.
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A new
definition of “Sarbanes Certifying Parties” is added to
Section 1 immediately before the definition of “Securities
Act” to read as follows:
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Sarbanes
Certifying Parties : The
Depositor and the Master Servicer.
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11.
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Subsection 7.03
(Remedies for Breach of Representations and Warranties) is hereby
amended as follows:
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(i)
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by adding the
words “(from its own funds)” to the first sentence of
the sixth paragraph after the word
“indemnify;”
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(ii)
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by replacing
the words “the Initial Purchaser and any subsequent Purchaser
and hold them” at the beginning of the second line of the
sixth paragraph with “GCFP, the Depositor, the Trustee, the
Master Servicer and the Trust Fund and hold each of
them;”
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(iii)
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by replacing
each of the references to “the Initial Purchaser and any
subsequent Purchaser” in the last sentence of the sixth
paragraph with “GCFP, the Depositor, the Trustee, the Master
Servicer and the Trust Fund;” and
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(iv)
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by replacing
each of the references to “the Purchaser” in the
seventh paragraph of Section 7.03 with “GCFP, the Depositor,
the Master Servicer or the Trustee.”
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12.
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Subsection
11.01 of the Servicing Addendum (Seller to Act as Interim Servicer)
is hereby amended as follows:
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(i)
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by adding the
following proviso at the end of the first paragraph to read as
follows:
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provided,
however , that the
Seller shall not knowingly or intentionally take any action, or
fail to take (or fail to cause to be taken) any action reasonably
within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC created under the
Pooling and Servicing Agreement to fail to qualify as a REMIC or
result in the imposition of a tax upon the Trust (including but not
limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC set
forth in Section 860G(d) of the Code) unless the Seller has
received an Opinion of Counsel (but not at the expense of the
Seller) to the effect that the contemplated action will not cause
any REMIC created under the Pooling and Servicing Agreement to fail
to qualify as a REMIC or result in the imposition of a tax upon any
such REMIC created thereunder.
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(ii)
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by adding the
following additional proviso at the end of the first sentence of
the second paragraph to read as follows:
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; provided,
further , no such modification shall be permitted unless the
Seller shall have provided to the Master Servicer an Opinion of
Counsel in writing to the effect that such modification, waiver or
amendment would not cause an Adverse REMIC Event (as defined in the
Pooling and Servicing Agreement). The costs of obtaining such
Opinion of Counsel shall be a reimbursable expense to the Seller to
be withdrawn from the Custodial Account pursuant to Subsection
11.05 of the Servicing Addendum. Promptly after the execution of
any modification of any Mortgage Loan, the Seller shall deliver to
the Master Servicer the originals of any documents evidencing such
modification.
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13.
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Subsection
11.04 of the Servicing Addendum (Establishment of Custodial
Accounts; Deposits in Custodial Accounts) is hereby amended as
follows:
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(i)
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by adding the
words “, entitled ‘in trust for the Holders of
HarborView Mortgage Loan Trust Mortgage Loan Pass-Through
Certificates, Series 2006-13’ ” at the end of the first
sentence of the first paragraph;
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(ii) by deleting clause (xi) and replacing it in its
entirety with the following:
“(xi)
with respect to each Principal Prepayment, an amount (to be paid by
the Seller out of its own funds, without reimbursement therefor
from the Purchaser, up to the amount of the product of (x) the
outstanding principal balance of such Mortgage Loan and (y) 0.125%
per annum) which, when added to all amounts allocable to interest
received in connection with such Principal Prepayment, equals one
month’s interest on the amount of principal so prepaid at the
Mortgage Interest Rate (net of the related Servicing Fee
Rate).”
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(iii)
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by adding the
following paragraph before the final paragraph of Subsection
11.04:
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“Funds on
deposit in the Custodial Account shall either (i) remain uninvested
or (ii) be invested in Permitted Investments, which Permitted
Investments shall mature or be subject to redemption or withdrawal
on or prior to the next occurring Remittance Date. If such funds
are deposited in Permitted Investments, any and all investment
earnings from any such Permitted Investments shall be for the
benefit of the Seller and the risk of loss of moneys required to be
remitted to the Master Servicer for deposit in the Distribution
Account resulting from such investments shall be borne by and be
the risk of the Seller.”
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14.
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Subsection
11.05 of the Servicing Addendum (Permitted Withdrawals From the
Custodial Account) is hereby amended by adding a new subclause (x)
to read as follows:
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(x) to
reimburse itself for unreimbursed Servicing Advances to the extent
that such amounts are nonrecoverable by the Servicer pursuant to
subclause (ii) above;
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15.
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Subsection
11.06 of the Servicing Addendum (Establishment of Escrow Accounts;
Deposits in Escrow Accounts) is hereby amended by adding the words
“, entitled ‘in trust for the Holders of HarborView
Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series
2006-13 and various mortgagors’ ” at the end of the
first sentence of the first paragraph.
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16.
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Subsection
11.14 of the Servicing Addendum (Distributions) is hereby amended
by deleting the words “the second Business Day
following” in the first sentence and by deleting the word
“second” in the second sentence of the third
paragraph.
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17.
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Subsection
11.15 of the Servicing Addendum (Remittance Reports) is hereby
amended in its entirety to read as follows:
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Subsection
11.15 Statements to Master Servicer
.
Not later than
the tenth calendar day of each month (or if such calendar day is
not a Business Day, the immediately succeeding Business Day), the
Seller shall furnish to the Master Servicer, including but not
limited to (i) a monthly remittance advice in written or electronic
format (or in such other format mutually agreed to between the
Seller and the Master Servicer) relating to the period ending on
the last day of the preceding calendar month in the form of
Exhibit Four (excluding the borrower’s name) or in
such form mutually agreed to in writing between the Seller and the
Master Servicer and (ii) all such information required pursuant to
clause (i) above on a magnetic tape or other similar media
reasonably acceptable to the Master Servicer. In addition, no later
than the close of business New York time on the fifth Business Day
prior to such Distribution Date, the Seller shall deliver or cause
to be delivered to the Master Servicer in addition to the
information provided in Exhibit Four (excluding the
borrower’s name), such other loan-level information
reasonably available to it with respect to the Mortgage Loans as
the Master Servicer may reasonably require to perform the
calculations necessary to make the distributions contemplated by
Section 5.01 of the Pooling and Servicing Agreement.
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18.
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Subsection
11.23 of the Servicing Addendum (Statement as to Compliance) is
hereby amended as follows:
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(i)
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by replacing
the references to “Purchaser” with “Sarbanes
Certifying Parties”, and
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(ii)
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by replacing
“not later than 75 days following the end of each fiscal year
of the Seller” with “on or before February 28 of each
year thereafter, beginning with February 28,
2007”.
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19.
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Subsection
11.24 of the Servicing Addendum (Independent Public
Accountants’ Servicing Report) is hereby amended as
follows:
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(i)
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by replacing
the references to “Purchaser” with “Sarbanes
Certifying Parties”
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(ii)
|
by replacing
“Not later than 75 days following the end of each fiscal year
of the Seller, the Seller at its expense shall cause a firm of
independent public accountants (which may also render other
services to the Seller) which is a member of the American Institute
of Certified Public Accountants to furnish” with “The
Seller at its expense shall cause a firm of independent public
accountants (which may also render other services to the Seller)
which is a member of the American Institute of Certified Public
Accountants to furnish, on or before March 30 of each year
thereafter, beginning with March 30, 2007,”.
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20.
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Subsection
11.33 of the Servicing Addendum (Monthly Advances by the Seller) is
hereby amended by replacing the words “net of the Servicing
Fee” in the first paragraph thereof with the words “net
of an amount equal to 0.375% per annum multiplied by the principal
balance of the related Mortgage Loan at the beginning of the
related Due Period”.
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21.
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Subsection
13.02 (Information to Be Provided by the Seller) is hereby amended
as follows:
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(i)
by adding the words “, any
Master Servicer “after the word “Purchaser” in
subclause (ii) of clause (v).
(ii)
by adding the following new
paragraph as clause (viii):
The Company
shall provide to the Purchaser, any Master Servicer and any
Depositor, evidence of the authorization of the person signing any
certification or statement, copies or other evidence of Fidelity
Bond Insurance and Errors and Omission Insurance policy, and
audited financial information related to the Company or any
Subservicer as may be reasonably requested by the Purchaser, any
Master Servicer or any Depositor.
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22.
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Subsection
13.05 (Report on Assessment of Compliance and Attestation) is
hereby amended by deleting paragraph (4) of clause (i) and the
paragraph immediately thereafter and replacing them with the
following:
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(4)
deliver and cause each Subservicer
and Subcontractor described in clause (3) to provide, to the
Purchaser, the Master Servicer and any Depositor a certification
signed by the appropriate officer of the company, in the form
attached hereto as Exhibit 14.
The Seller
acknowledges that the parties identified in clause (i)(4) above may
rely on the certification provided by the Seller pursuant to such
clause in signing the certification (a “Sarbanes
Certification”) required by Rules 13a-14(d) and 15d-14(d)
under the Exchange Act (pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002) on behalf of an asset-backed issuer
with respect to a Securitization Transaction and filing such with
the Commission. The Seller shall only be required to deliver a
certification under clause (i)(4) above if a Depositor is required
under the Exchange Act to file an annual report on Form 10-K with
respect to an issuing entity whose asset pool includes Mortgage
Loans.
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23.
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Subsection
13.07 (Indemnification; Remedies) is hereby amended by adding the
following words in the fourth line from the end of clause (b)(i)
after the word “Seller”:
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|
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(and if the
Company is servicing any of the Mortgage Loans in a Securitization
Transaction, appoint a successor servicer reasonably acceptable to
any Master Servicer for such Securitization Transaction)
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24.
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Subsection
14.01 (Additional Indemnification by the Seller) is hereby
amended:
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(i)
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by replacing
the reference to “the Initial Purchaser and any subsequent
Purchaser” with “the Trust Fund, the Trustee, the
Master Servicer, the Depositor and each successor in
interest.”
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(ii)
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by replacing
the word “them” with “the Trust Fund, the
Trustee, the Master Servicer and the Depositor.”
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25.
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Subsection
15.01 (Events of Default) is hereby amended as follows:
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(i)
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by adding the
words “subject to clause (x) of this Subsection 15.01,”
at the beginning of clause (ii); and
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(ii)
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by adding the
words “within the applicable cure period” after the
word “remedied” in the second line after clause
(x).
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26.
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Section 17
(Successor to the Seller) is hereby amended as follows:
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(i)
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by replacing
the words “Prior to” with “Upon” at the
beginning of the first sentence of the first paragraph;
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(ii)
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by replacing
the reference to “Sections 12, 15 or 16” with
“Sections 15 or 16” in the second line of the first
paragraph;
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(iii)
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by adding the
following new sentence immediately after the first sentence of the
first paragraph to read as follows:
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Any successor
to the Servicer shall be a FHLMC- or FNMA-approved servicer and
shall be subject to the approval of each Rating Agency, as
evidenced by a letter from each such Rating Agency delivered to the
Master Servicer that the transfer of servicing will not result in a
qualification, withdrawal or downgrade of the then-current rating
of any of the Certificates.
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(iv)
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by adding the
following proviso at the end of the third sentence of the first
paragraph immediately before the period to read as
follows:
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; provided,
however , that no such compensation shall be in excess of that
permitted the Servicer under this Agreement.
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(v)
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by replacing
the references to “the Purchaser” in the second and
sixth lines of the second paragraph with “the Master Servicer
and the Trustee;” and
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(vi)
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by adding the
following new paragraph as the fourth paragraph to read as
follows:
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Except as otherwise provided in this Section 17,
all reasonable costs and expenses incurred in connection with any
transfer of servicing hereunder (as a result of termination for
cause under Section 15.01 or resignation of the Servicer),
including, without limitation, the costs and expenses of the Master
Servicer or any other Person in appointing a successor servicer, or
of the Master Servicer in assuming the responsibilities of the
Servicer hereunder, or of transferring the Servicing Files and the
other necessary data, including the completion, correction or
manipulation of such servicing data as may be required to correct
any errors or insufficiencies in the servicing data, to the
successor servicer shall be paid by the terminated or resigning
Servicer from its own funds without reimbursement.
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27.
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Section 25
(Successors and Assigns) is hereby amended by replacing the last
sentence with:
|
“This
Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party (i) without the prior written consent of
GCFP and the Master Servicer, which consent shall not be
unreasonably withheld, and (ii) without prior written notice to
each Rating Agency” at the end of the paragraph.
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28.
|
A new Section
34 (Amendment) is hereby added to the Purchase Agreement to read as
follows:
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This Agreement
may be amended only by written agreement signed by the Seller, GCFP
and the Master Servicer. The party requesting such amendment shall,
at its own expense, provide the Master Servicer and Ambac Assurance
Corporation with an Opinion of Counsel that (i) such amendment is
permitted under the terms of this Agreement, (ii) the Seller has
complied with all applicable requirements of this Agreement, and
(iii) such Amendment will not materially adversely affect the
interest of the Certificateholders in the Mortgage Loans (without
taking into account the benefits under the certificate guaranty
insurance policy).
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29.
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A new Exhibit
14 attached hereto as Exhibit Five to this Agreement is hereby
added to the Purchase Agreement.
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30.
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A new Exhibit
15 attached hereto as Exhibit Six to this Agreement is hereby added
to the Purchase Agreement.
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EXHIBIT
TWO
List of Mortgage
Loans
EXHIBIT
THREE
Purchase Agreement
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MASTER MORTGAGE LOAN PURCHASE AND
INTERIM SERVICING AGREEMENT
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DOWNEY SAVINGS AND LOAN ASSOCIATION,
F.A.
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Seller and
Interim Servicer
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GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC.
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Initial
Purchaser
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Dated as of December 31,
2005
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First and Second Lien, Fixed and
Adjustable Rate Mortgage Loans
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TABLE OF CONTENTS
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Page
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1
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15
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15
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15
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Examination of
Mortgage Files
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15
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Conveyance from
Seller to Initial Purchaser.
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16
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Conveyance of Mortgage Loans; Possession of
Servicing Files.
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16
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16
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Delivery of Mortgage Loan Documents.
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17
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Quality Control Procedures
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17
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Representations, Warranties and Covenants of the
Seller: Remedies for Breach.
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18
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Representations and Warranties Respecting the
Seller
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18
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Representations and Warranties Regarding
Individual Mortgage Loans.
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20
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Remedies for Breach of Representations and
Warranties.
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34
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Repurchase of Certain Mortgage Loans.
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36
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36
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37
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38
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Seller's
Servicing Obligations
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38
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Removal of
Mortgage Loans from Inclusion under This Agreement Upon a Whole
Loan Transfer or a Securitization Transaction on One or More
Reconstitution Dates.
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39
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COMPLIANCE WITH
REGULATION AB
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40
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Intent of the Parties;
Reasonableness.
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40
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Additional Representations and Warranties of the
Seller.
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41
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Information to Be Provided by the
Seller.
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42
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Servicer Compliance Statement.
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47
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Report on Assessment of Compliance and
Attestation.
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47
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Use of Subservicers and
Subcontractors.
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49
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Indemnification; Remedies.
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50
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52
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Additional Indemnification by the
Seller.
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52
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Merger or Consolidation of the
Seller.
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52
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Limitation on Liability of the Seller and
Others.
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53
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53
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No Transfer of Servicing.
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54
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54
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54
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55
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55
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56
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57
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Mandatory
Delivery: Grant of Security Interest
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57
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57
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58
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59
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GOVERNING LAW;
SUBMISSION TO JURISDICTION
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59
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59
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59
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60
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60
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60
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General
Interpretive Principles
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60
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Reproduction of
Documents
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60
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61
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61
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61
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EXHIBITS
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EXHIBIT
1
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SELLER’S
OFFICER’S CERTIFICATE
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EXHIBIT
2
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FORM OF OPINION
OF COUNSEL TO THE SELLER
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EXHIBIT
3
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SECURITY
RELEASE CERTIFICATION
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EXHIBIT
4
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ASSIGNMENT AND
CONVEYANCE
|
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EXHIBIT
5
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CONTENTS OF
EACH MORTGAGE FILE
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EXHIBIT
6
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MORTGAGE LOAN
DOCUMENTS
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EXHIBIT
7
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FORM OF
CUSTODIAL ACCOUNT LETTER AGREEMENT
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EXHIBIT
8
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FORM OF ESCROW
ACCOUNT LETTER AGREEMENT
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EXHIBIT
9
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SERVICING
ADDENDUM
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EXHIBIT
10
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FORM OF
ASSIGNMENT AND RECOGNITION AGREEMENT
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EXHIBIT
11
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FORM OF
INDEMNIFICATION AGREEMENT
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EXHIBIT
12
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FORM OF BACK-UP
CERTIFICATION
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EXHIBIT
13
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FORM OF
REMITTANCE REPORT
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EXHIBIT
14
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FORM OF ANNUAL
CERTIFICATION
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EXHIBIT
15
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SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
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EXHIBIT
16
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SERVICER
COMPENSATION
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SCHEDULE
I
|
MORTGAGE LOAN
SCHEDULE
|
MASTER MORTGAGE LOAN PURCHASE AND
INTERIM SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND
INTERIM SERVICING AGREEMENT (the “Agreement”), dated as
of December 31, 2005, by and between Greenwich Capital Financial
Products, Inc., having an office at 600 Steamboat Road, Greenwich,
Connecticut 06830 (the “Initial Purchaser”, and the
Initial Purchaser or the Person, if any, to which the Initial
Purchaser has assigned its rights and obligations hereunder as
Purchaser with respect to a Mortgage Loan, and each of their
respective successors and assigns, the “Purchaser”) and
Downey Savings and Loan Association, F.A., having an office at 3501
Jamboree Road, Newport Beach, California 92660 (the
“Seller”).
WITNESSETH
:
WHEREAS, the Seller desires to sell, from time
to time, to the Initial Purchaser, and the Initial Purchaser
desires to purchase, from time to time, from the Seller, certain
conventional fixed and adjustable rate residential first and second
lien mortgage loans, including the right to any Prepayment Charges
payable by the related Mortgagors, (the “Mortgage
Loans”) as described herein on a servicing-released basis,
and which shall be delivered in groups of whole loans on various
dates as provided herein (each, a “Closing
Date”);
WHEREAS, each Mortgage Loan is secured by a
mortgage, deed of trust or other security instrument creating a
first or second lien on a residential dwelling located in the
jurisdiction indicated on the Mortgage Loan Schedule for the
related Mortgage Loan Package, which is to be annexed hereto on
each Closing Date as Schedule I ;
WHEREAS, the Initial Purchaser and the Seller
wish to prescribe the manner of the conveyance, interim 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 in a whole loan or participation format or a public or
private mortgage-backed securities 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 Initial Purchaser and the Seller agree as
follows:
SECTION 1. Definitions . For purposes of this Agreement the following
capitalized terms shall have the respective meanings set forth
below.
Accepted Servicing Practices
: With respect to any Mortgage Loan,
those mortgage servicing practices (including collection
procedures) of prudent mortgage banking institutions which service
mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located, which
are in accordance with Fannie Mae servicing practices and
procedures for MBS pool mortgages, as defined in the Fannie Mae
Guide including future updates, the terms of the Mortgage Loan
Documents and all applicable federal, state and local legal and
regulatory requirements.
Adjustable Rate Mortgage Loan
: A Mortgage Loan which provides for
the adjustment of the Mortgage Interest Rate payable in respect
thereto.
Adjustment Date : With respect to each Adjustable Rate Mortgage
Loan, the date set forth in the related Mortgage Note on which the
Mortgage Interest Rate on such Adjustable Rate Mortgage Loan is
adjusted in accordance with the terms of the related Mortgage
Note.
Agreement : This Master Mortgage Loan Purchase and Interim
Servicing Agreement including all exhibits, schedules, amendments
and supplements hereto.
Appraised Value : With respect to any Mortgaged Property, the
lesser of (i) the value thereof as determined by an appraisal made
for the originator of the Mortgage Loan at the time of origination
of the Mortgage Loan by an appraiser who met the minimum
requirements of Fannie Mae and Freddie Mac and the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989., and
(ii) the purchase price paid for the related Mortgaged Property by
the Mortgagor with the proceeds of the Mortgage Loan, provided,
however, 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
an appraiser who met the minimum requirements of Fannie Mae and
Freddie Mac and the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
Assignment and Conveyance
: An assignment and conveyance of
the Mortgage Loans purchased on a Closing Date in the form annexed
hereto as Exhibit 4.
Assignment of Mortgage : With respect to each Mortgage Loan which is
not a MERS Loan, an individual assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient
under the laws of the jurisdiction wherein the related Mortgaged
Property is located to give record notice of the sale of the
Mortgage to the Purchaser.
Balloon Mortgage Loan : A Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its
maturity date.
Balloon Payment : With respect to any Balloon Mortgage Loan as
of any date of determination, the Monthly Payment payable on the
maturity of such 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
of Connecticut, the State of California or the State of New York
are authorized or obligated by law or executive order to be
closed.
Cash-Out Refinancing : A Refinanced Mortgage Loan the proceeds of
which were in excess of the principal balance of any existing first
mortgage and any subordinate mortgages on the related Mortgaged
Property and related closing costs, and were used to pay any such
existing first mortgage, related closing costs and subordinate
mortgages on the related Mortgaged Property.
Closing Date : The date or dates on which the Initial
Purchaser from time to time shall purchase and the Seller from time
to time shall sell to the Initial Purchaser, the Mortgage Loans
listed on the related Mortgage Loan Schedule with respect to the
related Mortgage Loan Package.
Closing Documents : With respect to any Closing Date, the
documents required pursuant to Section 9.
Code :
The Internal Revenue Code of 1986, or any successor statute
thereto.
Combined Loan-to-Value Ratio or CLTV:
With respect to any Mortgage Loan as
of any date of determination, the ratio on such date of the
outstanding principal amount of the Mortgage Loan and any other
mortgage loan which is secured by a lien on the related Mortgaged
Property to the Appraised Value of the Mortgaged
Property.
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 by
exercise of the power of condemnation or the right of eminent
domain.
Confirmation : With respect to any Mortgage Loan Package
purchased and sold on any Closing Date, the letter agreement
between the Initial Purchaser and the Seller (including any
exhibits, schedules and attachments thereto), setting forth the
terms and conditions of such transaction and describing the
Mortgage Loans to be purchased by the Initial Purchaser on such
Closing Date. A Confirmation may relate to more than one Mortgage
Loan Package to be purchased on one or more Closing Dates
hereunder.
Convertible Mortgage Loan
: A Mortgage Loan that by its terms
and subject to certain conditions contained in the related Mortgage
or Mortgage Note allows the Mortgagor to convert the adjustable
Mortgage Interest Rate on such Mortgage Loan to a fixed Mortgage
Interest Rate.
Credit Score
: With respect to any
Mortgage Loan, the credit score of the related Mortgagor provided
by Fair, Isaac & Company, Inc. or such other organization
acceptable to the Initial Purchaser providing credit scores at the
time of the origination of such Mortgage Loan. If two credit scores
are obtained, the Credit Score shall be the lower of the two credit
scores. If three credit scores are obtained, the Credit Score shall
be the middle of the three credit scores.
Custodial Account : The separate account or accounts, each of
which shall be an Eligible Account, created and maintained pursuant
to this Agreement, which shall be entitled “Downey Savings
and Loan Association, F.A., as servicer, in trust for the
Purchaser, Fixed and Adjustable Rate Mortgage Loans”,
established at a financial institution acceptable to the
Purchaser.
Custodial Agreement : The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage
and other Mortgage Loan Documents.
Custodian : The custodian under the Custodial Agreement,
or its successor in interest or assigns, or any successor to the
Custodian under the Custodial Agreement, as therein
provided.
Cut-off Date : The first day of the month in which the
related Closing Date occurs.
Deleted Mortgage Loan : A Mortgage Loan replaced or to be replaced by
a Qualified Substitute Mortgage Loan.
Depositor : The depositor, as such term is defined in
Regulation AB, with respect to any Securitization
Transaction.
Determination Date : With respect to each Distribution Date, the
fifteenth (15th) day of the calendar month in which such
Distribution Date occurs or, if such fifteenth (15th) day is not a
Business Day, the Business Day immediately preceding such fifteenth
(15th) day.
Distribution Date : The eighteenth (18th) day of each month,
commencing on the eighteenth day of the month next following the
month in which the related Cut-off Date occurs, or if such
eighteenth (18th) day is not a Business Day, the first Business Day
immediately preceding such eighteenth (18th) day.
Due Date : With respect to each Mortgage Loan, the day of
the calendar month on which each Monthly Payment is due on such
Mortgage Loan (including the Balloon Payment with respect to a
Balloon Mortgage Loan), exclusive of any days of grace.
Due Period : With respect to each Distribution Date, the
period commencing on the second day of the month preceding the
month of the Distribution Date and ending on the first day of the
month of the Distribution Date.
Eligible Account : Either (i) an account or accounts maintained
with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in
the case of a depository institution or trust company that is the
principal subsidiary of a holding company, the short-term unsecured
debt obligations of such holding company) are rated A-1 by S&P
or Prime-1 by Moody's (or a comparable rating if another rating
agency is specified by the Initial Purchaser by written notice to
the Seller) at the time any amounts are held on deposit therein,
(ii) an account or accounts the deposits in which are fully insured
by the FDIC, (iii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company
acting in its fiduciary capacity, or (iv) Downey Savings and Loan
Association, F.A., provided that the short-term unsecured debt
obligations of which are rated A-2 or higher by S&P. Eligible
Accounts may bear interest.
Escrow Account : The separate trust account or accounts created
and maintained pursuant to this Agreement which shall be entitled
“Downey Savings and Loan Association, F.A., as servicer, in
trust for the Purchaser and various Mortgagors, Fixed and
Adjustable Rate Mortgage Loans”, established at a financial
institution acceptable to the Purchaser.
Escrow Payments : The amounts constituting ground rents, taxes,
assessments, water charges, sewer rents, Primary Insurance Policy
premiums, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the Mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.
Event of Default : Any one of the events enumerated in
Subsection 15.01.
Exchange Act : The Securities Exchange Act of 1934, as
amended.
Fannie Mae : Fannie Mae or any successor
thereto.
Fannie Mae Guide
: The Fannie Mae
Servicing Guide and all amendments or additions thereto.
FDIC :
The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination
: With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or
REO Property purchased by the Seller pursuant to this Agreement), a
determination made by the Seller that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the
Seller, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered. The
Seller shall maintain records, prepared by a servicing officer of
the Seller, of each Final Recovery Determination.
Fixed Rate Mortgage Loan : A Mortgage Loan with respect to which the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for
the term of such Mortgage Loan.
Flood Zone Service Contract
: A transferable contract maintained
for the Mortgaged Property with a nationally recognized flood zone
service provider for the purpose of obtaining the current flood
zone status relating to such Mortgaged Property.
Freddie Mac : Freddie Mac or any successor
thereto.
Gross Margin : With respect to any Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage
Note and the related Mortgage Loan Schedule that is added to the
Index on each Adjustment Date in accordance with the terms of the
related Mortgage Note to determine the new Mortgage Interest Rate
for such Mortgage Loan.
HUD :
The United States Department of Housing and Urban Development or
any successor thereto.
Index : With respect to any Adjustable Rate Mortgage
Loan, the index identified on the Mortgage Loan Schedule and set
forth in the related Mortgage Note for the purpose of calculating
the interest rate thereon.
Initial Closing Date : The Closing Date on which the Initial
Purchaser purchases and the Seller sells the first Mortgage Loan
Package hereunder.
Insurance Proceeds : With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interim Servicing Period : With respect to any Mortgage Loan, the period
commencing on the related Closing Date and ending on the thirtieth
day following the Closing Date or such other period mutually agreed
to by the Seller and the Initial Purchaser.
Lender Paid Mortgage Insurance Policy
or LPMI Policy : A policy of
mortgage guaranty insurance issued by a Qualified Insurer in which
the owner or servicer of the Mortgage Loan is responsible for the
premiums associated with such mortgage insurance policy.
Liquidation Proceeds : Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received in connection with the liquidation
of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than amounts received following the
acquisition of REO Property.
Loan-to-Value Ratio or LTV : With respect to any Mortgage
Loan as of any date of determination, the ratio on such date of the
outstanding principal amount of the Mortgage Loan to the Appraised
Value of the Mortgaged Property.
LPMI Fee : The portion of the Mortgage
Interest Rate relating to an LPMI Loan which is used to pay the
premium due on the LPMI Policy with respect to such LPMI
Loan.
LPMI
Loan : Any Mortgage Loan
with respect to which Seller or the subsequent owner or 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.
Master Servicer : With respect to any Securitization
Transaction, the “master servicer”, if any, specified
by the Purchaser and identified in the related transaction
documents.
Maximum Mortgage Interest Rate
: With respect to each Adjustable
Rate Mortgage Loan, a rate that is set forth on the related
Mortgage Loan Schedule and in the related Mortgage Note and is the
maximum interest rate to which the Mortgage Interest Rate on such
Mortgage Loan may be increased during the term of the Mortgage
Loan.
MERS :
Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS® System : The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN :
The Mortgage Identification Number of Mortgage Loans registered
with MERS on the MERS® System.
Minimum Mortgage Interest Rate
: With respect to each Adjustable
Rate Mortgage Loan, a rate that is set forth on the related
Mortgage Loan Schedule and in the related Mortgage Note and is the
minimum interest rate to which the Mortgage Interest Rate on such
Mortgage Loan may be decreased during the term of the Mortgage
Loan.
MOM Loan : Any Mortgage Loan where MERS acts as the
mortgagee of record of such Mortgage Loan, solely as nominee for
the originator of such Mortgage Loan and its successors and
assigns, at the origination thereof.
Monthly
Advance : The aggregate
of the advances made by the Seller on any Distribution Date
pursuant to Subsection 11.33 of the Servicing Addendum.
Monthly Payment : With respect to any Mortgage Loan, the
scheduled combined payment of principal and interest (including any
Balloon Payment) payable by a Mortgagor under the related Mortgage
Note on each Due Date.
Moody's : Moody's Investors Service, Inc. or its
successor in interest.
Mortgage : The mortgage, deed of trust or other
instrument creating a first or second lien on Mortgaged Property
securing the Mortgage Note.
Mortgage File : The items pertaining to a particular Mortgage
Loan referred to in Exhibit 5 annexed hereto, and any
additional documents required to be added to the Mortgage File
pursuant to this Agreement or the related Confirmation.
Mortgage Interest Rate : With respect to each Fixed Rate Mortgage Loan,
the fixed annual rate of interest provided for in the related
Mortgage Note and, with respect to each Adjustable Rate Mortgage
Loan, the annual rate that interest accrues on such Adjustable Rate
Mortgage Loan from time to time in accordance with the provisions
of the related Mortgage Note.
Mortgage Loan : Each first or second lien, residential
mortgage loan, sold, assigned and transferred to the Purchaser
pursuant to this Agreement and the related Confirmation and
identified on the Mortgage Loan Schedule annexed to this Agreement
on such Closing Date, which Mortgage Loan includes without
limitation the Mortgage File, the Monthly Payments, Prepayment
Charges, 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.
Mortgage Loan Documents : The documents listed on Exhibit 6 to this
Agreement pertaining to any Mortgage Loan.
Mortgage Loan Package : The Mortgage Loans listed on a Mortgage Loan
Schedule, delivered to the Custodian and the Initial Purchaser at
least five (5) Business Days prior to the related Closing Date and
attached to this Agreement as Schedule I on the related
Closing Date.
Mortgage Loan Schedule : With respect to each Mortgage Loan Package,
the schedule of Mortgage Loans to be annexed hereto as Schedule
I (or a supplement thereto) on each Closing Date for the
Mortgage Loan Package delivered on such Closing Date in both hard
copy and in electronic format acceptable to the Seller and
Purchaser, such schedule setting forth the following information
with respect to each Mortgage Loan in the Mortgage Loan Package:
(1) the Seller's Mortgage Loan identifying number; (2) the
Mortgagor's first and last name; (3) the street address of the
Mortgaged Property including the city, state and zip code; (4) the
original months to maturity; (5) the stated maturity date; (6) the
original principal amount of the Mortgage Loan and, with respect to
second liens, the related first lien on the Mortgaged Property; (7)
the Stated Principal Balance of the Mortgage Loan and, with respect
to second liens, the principal balance of the related first lien on
the Mortgaged Property as of the close of business on the Cut-off
Date; (8) the original date of the Mortgage Loan and the remaining
months to maturity from the Cut-off Date, based on the original
amortization schedule; (9) [Reserved]; (10) 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, such
Due Date; (11) the Mortgage Interest Rate at origination; (12) the
Mortgage Interest Rate in effect immediately following the Cut-off
Date; (13) the Servicing Fee; (14) [Reserved]; (15) the amount of the
Monthly Payment at origination and as of the Cut-off Date; (16) the
last Due Date on which a Monthly Payment was actually applied to
the unpaid Stated Principal Balance; (17) a code indicating whether
the Mortgage Loan is an Adjustable Rate Mortgage Loan or a Fixed
Rate Mortgage Loan; (18) with respect to each Adjustable Rate
Mortgage Loan, the initial Adjustment Date; (19) with respect to
each Adjustable Rate Mortgage Loan, the Gross Margin; (20) with
respect to each Adjustable Rate Mortgage Loan, the Maximum Mortgage
Interest Rate under the terms of the Mortgage Note; (21) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage
Interest Rate under the terms of the Mortgage Note; (22) with
respect to each Adjustable Rate Mortgage Loan, the Periodic Rate
Cap; (23) with respect to each Adjustable Rate Mortgage Loan, the
first Adjustment Date immediately following the Cut-off Date; (24)
with respect to each Adjustable Rate Mortgage Loan, the Index; (25)
a code indicating the purpose of the loan (i.e., purchase
financing, Rate/Term Refinancing, Cash-Out Refinancing); (26) a
code indicating the documentation style (i.e., full, alternative or
reduced); (27) a code indicating the occupancy status of the
Mortgaged Property (i.e., owner-occupied, second home or investor
property); (28) the type of Residential Dwelling constituting the
Mortgaged Property (including the number of units if the
Residential Dwelling is a two- to four-family property);
(29) product type (i.e.
fixed, adjustable, 3/1, 5/1, etc.); (30) the debt-to-income ratio
of the related Mortgagor at the time of origination of the Mortgage
Loan; (31) a code indicating the Credit
Score of the Mortgagor at the time of origination of the Mortgage
Loan; (32) the Appraised Value of the Mortgaged Property;
(33) the sale price of the Mortgaged Property, if applicable; (34)
the Loan-to-Value Ratio and Combined Loan-to-Value Ratio, if
applicable, at origination; (35) a code indicating whether the
Mortgage Loan is subject to a Prepayment Charge; (36) the amount
and the original term of any Prepayment Charge; (37) a code
indicating whether any Prepayment Charge is required to be paid
only upon the refinancing of the related Mortgage Loan (i.e., a
“soft prepayment charge”) or upon the sale of the
related Mortgaged Property or any other prepayment in full of the
related Mortgage Loan (i.e., a “hard prepayment
charge”); (38) with respect to each MERS Mortgage Loan, the
related MIN; (39) a code indicating if the Mortgage Loan is a
Negative Amortization Mortgage Loan and if so, the Negative
Amortization Cap and the Payment Adjustment Date; (40) a code
indicating if the Mortgage Loan is an interest-only Mortgage Loan
and, if so, the term of the interest-only period of such Mortgage
Loan; (41) a code indicating whether the Mortgage Loan is a first
or second lien; (42) a code indicating whether the Mortgage Loan is
a Balloon Mortgage Loan and, if so, the term of the Balloon
Mortgage Loan and the amount of the Balloon Payment scheduled to be
due at maturity assuming no Principal Prepayments; (43) a code
indicating if the Mortgage Loan is subject to a Primary Insurance
Policy or LPMI Policy, and if so, the insurer; and (44) the LPMI
Fee, if applicable. With respect to the Mortgage Loan Package in
the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off Date: (1) the
number of Mortgage Loans; (2) the current principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of
the Mortgage Loans; and (4) the weighted average maturity of the
Mortgage Loans. Schedule I hereto shall be supplemented as
of each Closing Date to reflect the addition of the Mortgage Loan
Schedule with respect to the related Mortgage Loan
Package.
Mortgage Note : The original executed note or other evidence
of the Mortgage Loan indebtedness of a Mortgagor.
Mortgaged Property : The Mortgagor's real property securing
repayment of a related Mortgage Note, consisting of a fee simple
interest in a single parcel of real property improved by a
Residential Dwelling.
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, the owner of
the Mortgaged Property and the grantor or mortgagor named in the
related Mortgage and such grantor's or mortgagor's successor's in
title to the Mortgaged Property.
Negative Amortization : With respect to each Negative Amortization
Mortgage Loan, that portion of interest accrued at the Mortgage
Interest Rate in any month which exceeds the Monthly Payment on the
related Mortgage Loan for such month and which, pursuant to the
terms of the Mortgage Note, is added to the principal balance of
the Mortgage Loan.
Negative Amortization Cap
: With respect to each Negative
Amortization Mortgage Loan, the provision of each Mortgage Note
which provides for an absolute maximum percentage of the original
principal amount of such Mortgage Loan that the outstanding
principal amount of the Mortgage Loan may reach as a result of
Negative Amortization as specified on the Mortgage Loan
Schedule.
Negative Amortization Mortgage Loan
: Each Mortgage Loan that is
identified on the Mortgage Loan Schedule as a Mortgage Loan that
may be subject to Negative Amortization.
Nonrecoverable Monthly Advance
: Any Monthly Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Seller,
will not, or, in the case of a proposed Monthly Advance, would not
be, ultimately recoverable from related late payments, Insurance
Proceeds or Liquidation Proceeds on such Mortgage Loan or REO
Property as provided herein.
Officer's Certificate : A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice
President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Person on
behalf of whom such certificate is being delivered.
Opinion of Counsel : A written opinion of counsel, who may be
salaried counsel for the Person on behalf of whom the opinion is
being given, reasonably acceptable to each Person to whom such
opinion is addressed.
Payment Adjustment Date : With respect to each Negative Amortization
Mortgage Loan, the date on which Monthly Payments shall be
adjusted. A Payment Adjustment Date with respect to a Negative
Amortization Mortgage Loan shall occur on each anniversary date of
the first payment for the Mortgage Loan.
Periodic Rate Cap : With respect to each Adjustable Rate Mortgage
Loan and any Adjustment Date therefor, a number of percentage
points per annum that is set forth in the related Mortgage Loan
Schedule and in the related Mortgage Note, which is the maximum
amount by which the Mortgage Interest Rate for such Adjustable Rate
Mortgage Loan may increase (without regard to the Maximum Mortgage
Interest Rate) or decrease (without regard to the Minimum Mortgage
Interest Rate) on such Adjustment Date from the Mortgage Interest
Rate in effect immediately prior to such Adjustment
Date.
Person : An individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
Prepayment Charge : With respect to any Mortgage Loan, any
prepayment penalty or premium thereon payable in connection with a
Principal Prepayment on such Mortgage Loan pursuant to the terms of
the related Mortgage Note.
Primary Insurance Policy : A policy of primary mortgage guaranty
insurance issued by a Qualified Insurer.
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 Charge, which is not accompanied by
an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of
prepayment.
Purchase Price : The price paid on the related Closing Date by
the Initial Purchaser to the Seller pursuant to the related
Confirmation in exchange for the Mortgage Loans purchased on such
Closing Date as calculated as provided in
Section 4.
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 Insurer : A n insurance
company duly qualified as such under the laws of the states in
which the Mortgaged Property is located, duly authorized and
licensed in such states to transact the applicable insurance
business and to write the insurance provided, and approved as an
insurer by Fannie Mae or Freddie Mac and whose claims paying
ability is rated in the two highest rating categories by the
nationally recognized rating agencies with respect to primary
mortgage insurance and in the two highest rating categories by AM
Best’s with respect to hazard and flood
insurance.
Qualified Substitute Mortgage Loan
: A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which
must, on the date of such substitution, (i) have an outstanding
principal balance, after application of all scheduled payments of
principal and interest due during or prior to the month of
substitution, not in excess of the Stated Principal Balance of the
Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Interest
Rate not less than (and not more than one percentage point in
excess of) the Mortgage Interest Rate of the Deleted Mortgage Loan,
(iii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan,
(iv) have the same Due Date as the Due Date on the Deleted Mortgage
Loan, (v) have a Loan-to-Value Ratio, and in the case of a second
lien Mortgage Loan, a Combined Loan-to-Value Ratio as of the date
of substitution equal to or lower than the Loan-to-Value Ratio and
Combined Loan-to-Value Ratio of the Deleted Mortgage Loan as of
such date, (vi) have a Credit Score for the related Mortgagor not
lower than that of the Mortgagor under the Deleted Mortgage Loan;
(vii) conform to each representation and warranty set forth in
Subsection 7.02 of this Agreement, (viii) be covered under a
Primary Insurance Policy if such Qualified Substitute Mortgage Loan
has a Loan-to-Value Ratio in excess of 80%; and (ix) be the same
type of mortgage loan (i.e., lien status, fixed or adjustable rate
with the same Gross Margin, Periodic Rate Cap and Index as the
Deleted Mortgage Loan, and if an Adjustable Rate Mortgage Loan, the
same type (e.g., 3/1, 5/1).
Rate/Term Refinancing : A Refinanced Mortgage Loan, the proceeds of
which are not in excess of the existing first mortgage loan and any
subordinate mortgage loan of the Mortgagor on the related Mortgaged
Property and related closing costs, and were used exclusively to
satisfy the then existing first mortgage loan and any subordinate
mortgage loan of the Mortgagor on the related Mortgaged Property
and to pay related closing costs and provide cash to the related
Mortgagor in an amount equal to the lesser of (i) $2,000 or (ii) 2%
of the principal balance of such Refinanced Mortgage
Loan.
Reconstitution : Any Securitization Transaction or Whole Loan
Transfer.
Reconstitution Agreement : The agreement or agreements entered into by
the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans serviced hereunder, in connection with a Whole Loan
Transfer or a Securitization Transaction as provided in
Section 12.
Reconstitution Date : The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from
this Agreement and reconstituted as part of a Whole Loan Transfer
or Securitization Transaction pursuant to Section 12
hereof.
Record Date : With respect to each Distribution Date, the
last Business Day of the month immediately preceding the month in
which such Distribution Date occurs.
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. §§229.1100-229.1123, as such
may be amended from time to time, and subject to such clarification
and interpretation as have been provided by the Commission in the
adopting release (Asset-Backed Securities, Securities Act Release
No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
REMIC : A “real estate mortgage investment
conduit” within the meaning of Section 860D of the
Code.
REMIC Provisions : Provisions of the federal income tax law
relating to REMIC’s, which appear in Sections 860A through
860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Account : The separate trust account or accounts created
and maintained pursuant to this Agreement which shall be entitled
“Downey Savings and Loan Association, F.A. in trust for the
Purchaser, as of [date of acquisition of title], Fixed and
Adjustable Rate Mortgage Loans”.
REO Disposition : The final sale by the Seller of any REO
Property.
REO Property : A Mortgaged Property acquired as a result of
the liquidation of a Mortgage Loan.
Repurchase Price : With respect to any Mortgage Loan, a price
equal to (i) the Stated Principal Balance of such Mortgage Loan,
plus (ii) interest on such Stated Principal Balance at the Mortgage
Interest Rate from and including the last Due Date through which
interest has been paid by or on behalf of the Mortgagor to the
first day of the month following the date of repurchase, less
amounts received in respect of such repurchased Mortgage Loan which
are being held in the Custodial Account for distribution in
connection with such Mortgage Loan, plus (iii) any unreimbursed
servicing advances and monthly advances (including nonrecoverable
monthly advances) and any unpaid servicing fees allocable to such
Mortgage Loan paid by any party other than the Seller, plus (iv)
any costs and expenses incurred by the Purchaser, the servicer,
master servicer or any trustee in respect of the breach or defect
giving rise to the repurchase obligation including without
limitation any costs and damages incurred by any such party in
connection with any violation by any such Mortgage Loan of any
predatory or abusive lending law.
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 Fannie Mae eligible
condominium project, or (iv) a detached one-family dwelling in a
planned unit development, none of which is a co-operative, mobile
or manufactured home.
Securities Act : The Securities Act of 1933, as
amended.
Securitization Transaction
: Any transaction involving either
(1) a sale or other transfer of some or all of the Mortgage Loans
directly or indirectly to an issuing entity in connection with an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered
or privately placed, rated or unrated securities, the payments on
which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller Information : As defined in Section 13.07(a)(i).
Servicer : As defined in Section 13.03(iii).
Servicing Addendum : The terms and conditions attached hereto as
Exhibit 9 which will govern the servicing of the Mortgage Loans by
Seller during the Interim Servicing Period.
Servicing Advances : All customary, reasonable and necessary
“out-of-pocket” costs and expenses incurred by the
Seller in the performance of its servicing obligations, including,
but not limited to, the cost of (i) preservation, restoration and
repair of a Mortgaged Property, (ii) any enforcement or judicial
proceedings with respect to a Mortgage Loan, including foreclosure
actions and (iii) the management and liquidation of REO
Property.
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, an amount
as set forth in Exhibit 16. 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 the Servicing Addendum) of
related Monthly Payment collected by the Seller, or as otherwise
provided under Subsection 11.05 of the Servicing Addendum. If
the Interim Servicing Period includes any partial month, the
Servicing Fee for such month shall be pro rated at a per diem rate
based upon a 30-day month.
Servicing File : With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in
the Mortgage File which are not delivered to the Purchaser or the
Custodian and copies of the Mortgage Loan Documents.
S&P : Standard & Poor's Ratings Group or its
successor in interest.
Stated Principal Balance : As to each Mortgage Loan as of any date of
determination, (i) the principal balance of the Mortgage Loan as of
the Cut-off Date after giving effect to payments of principal due
on or before such date, whether or not collected from the
Mortgagor, minus (ii) all amounts previously distributed to the
Purchaser with respect to the related Mortgage Loan representing
payments or recoveries of principal, plus (iii) the cumulative
amount of any Negative Amortization.
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 Seller or a Subservicer.
Subservicer : Any Person that services Mortgage Loans on
behalf of the Seller 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.
Sub-Servicing Agreement : The written contract between the Seller and a
Subservicer relating to servicing and administration of certain
Mortgage Loans as provided in Subsection 11.29 of the Servicing
Addendum.
Tax Service Contract : A transferable contract maintained for the
Mortgaged Property with a tax service provider for the purpose of
obtaining current information from local taxing authorities
relating to such Mortgaged Property.
Third-Party Originator : Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller. A wholesale broker for the Seller shall not be deemed for
purposes of this Agreement to be a Third-Party
Originator.
Underwriting Guidelines : The Seller’s written underwriting
guidelines in the form delivered to the Initial Purchaser, in
effect with respect to the Mortgage Loans purchased by the Initial
Purchaser on the Initial Closing Date, as amended, supplemented or
modified from time to time thereafter with prior written notice to
the Initial Purchaser.
Whole Loan Transfer : Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction
SECTION 2. Agreement to Purchase . The Seller agrees to sell, and the Initial
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 Confirmation, or in such
other amount as agreed by the Initial Purchaser and the Seller as
evidenced by the actual aggregate principal balance of the Mortgage
Loans accepted by the Initial Purchaser on the related Closing
Date.
SECTION 3. Mortgage Loan Schedules . The Seller shall deliver the Mortgage Loan
Schedule for a Mortgage Loan Package to be purchased on a
particular Closing Date to the Initial Purchaser at least five (5)
Business Days prior to the related Closing Date.
SECTION 4. Purchase Price .
The Purchase
Price for each Mortgage Loan listed on the related Mortgage Loan
Schedule shall be the percentage of par as stated in the related
Confirmation (subject to adjustment as provided therein),
multiplied by its Stated Principal Balance as of the related
Cut-off Date. If so provided in the related Confirmation, certain
Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described
above, the Initial Purchaser shall pay to the Seller, at closing,
accrued interest on the Stated Principal Balance of each Mortgage
Loan as of the related Cut-off Date at its Mortgage Interest Rate,
net of the Servicing Fee, from the related Cut-off Date through the
day prior to the related Closing Date, both inclusive.
The Purchaser shall own and be entitled to
receive with respect to each Mortgage Loan purchased, (1) all
scheduled principal due after the related Cut-off Date, (2) all
other recoveries of principal and any Prepayment Charges 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 Seller after the related Cut-off
Date shall belong to the Seller), and (3) 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). The Stated Principal Balance of each
Mortgage Loan as of the related Cut-off Date is determined after
application to the reduction of principal of payments of principal
due on or before the related Cut-off Date whether or not collected.
Therefore, 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 the 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 deposit any such prepaid amounts into the
Custodial Account, which account is established for the benefit of
the Purchaser, for remittance by the Seller to the Purchaser on the
first related Distribution Date. All payments of principal and
interest, less the applicable Servicing Fee and any LPMI Fee, due
on a Due Date following the related Cut-off Date shall belong to
the Purchaser.
SECTION 5. Examination of Mortgage Files
. In addition to the rights granted
to the Initial Purchaser under the related Confirmation to
underwrite the Mortgage Loans and review the Mortgage Files prior
to the Closing Date, prior to the related Closing Date, the Seller
shall, at the Initial Purchaser’s option (a) deliver to the
Custodian in escrow, for examination with respect to each Mortgage
Loan to be purchased on such Closing Date, the related Mortgage
File, including the Assignment of Mortgage, pertaining to each
Mortgage Loan, or (b) make the related Mortgage File available to
the Initial Purchaser for examination at the Seller's offices or
such other location as shall otherwise be agreed upon by the
Initial Purchaser and the Seller. Such examination may be made by
the Initial Purchaser or its designee at any reasonable time before
or after the related Closing Date. If the Initial Purchaser makes
such examination prior to the related Closing Date and identifies
any Mortgage Loans that do not conform to the terms of the related
Confirmation (and any trade stipulations), the terms of this
Agreement or the Underwriting Guidelines, such Mortgage Loans may,
at the Initial Purchaser's option, be rejected for purchase by the
Initial Purchaser. If not purchased by the Initial Purchaser, such
Mortgage Loans shall be deleted from the related Mortgage Loan
Schedule. The Initial Purchaser may, at its option and without
notice to the Seller, purchase all or part of any Mortgage Loan
Package without conducting any partial or complete examination. The
fact that the Initial Purchaser has conducted or has determined not
to conduct any partial or complete examination of the Mortgage
Files shall not affect the Purchaser's (or any of its successors')
rights to demand repurchase or other relief or remedy provided for
in this Agreement.
SECTION 6. Conveyance from Seller to Initial
Purchaser .
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Servicing Files .
The Seller, simultaneously with the payment of
the Purchase Price, shall execute and deliver to the Initial
Purchaser an Assignment and Conveyance with respect to the related
Mortgage Loan Package in the form attached hereto as Exhibit
4 . The Servicing File retained by the Seller with respect to
each Mortgage Loan pursuant to this Agreement shall be
appropriately identified in the Seller's computer system to reflect
clearly the sale of such related Mortgage Loan to the Purchaser.
The Purchaser shall be entitled to receive all Prepayment Charges
required to be paid by a Mortgagor under the terms of any Mortgage
Loan. The Seller shall release from its custody the contents of any
Servicing File retained by it only in accordance with this
Agreement.
Subsection 6.02. Books and Records .
Record title to each Mortgage and the related
Mortgage Note as of the related Closing Date shall be in the name
of the Seller, the Initial Purchaser, the Custodian or one or more
designees of the Initial Purchaser, as the Initial Purchaser shall
designate. Notwithstanding the foregoing, beneficial 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 Seller
after the related Cut-off Date on or in connection with a Mortgage
Loan as provided in Section 4 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 4 shall be received and held by the Seller
in trust for the benefit of the Purchaser or the assignee 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 Mortgage Loans by the Seller and not a
pledge of the 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 sale on the
Seller's business records, tax returns and financial
statements.
Subsection 6.03. Delivery of Mortgage Loan Documents
.
Pursuant to the Custodial Agreement to be
executed among and delivered by the Initial Purchaser, the
Custodian and the Seller prior to the Initial Closing Date, the
Seller shall from time to time in connection with each Closing
Date, at least five (5) Business Days prior to such Closing Date,
deliver and release to the Custodian the Mortgage Loan Documents
with respect to each Mortgage Loan to be purchased and sold on the
related Closing Date and set forth on the related Mortgage Loan
Schedule delivered with such Mortgage Loan Documents.
The Custodian shall certify its receipt of all
such Mortgage Loan Documents required to be delivered pursuant to
the Custodial Agreement for the related Closing Date, as evidenced
by the Trust Receipt and Initial Certification of the Custodian in
the form annexed to the Custodial Agreement. The Initial Purchaser
shall be responsible for maintaining the Custodial Agreement during
the Interim Servicing Period. The fees and expenses of the
Custodian shall be paid by the Purchaser.
The Seller shall forward to the Custodian
original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement within two weeks of their execution,
provided, however, that the Seller shall provide the Custodian with
a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall 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 hundred
seventy (270) days of its submission for recordation. In the event the Seller cannot deliver the original
recorded Mortgage or an original policy of title insurance on the
related Closing Date, the Seller shall, promptly upon receipt
thereof and in any case not later than 180 days from the related
Closing Date, deliver such original recorded Mortgage or original
policy of title insurance, as applicable, to the Custodian.
Notwithstanding the foregoing, in the event an original Mortgage is
not available or a Mortgage Loan for which the original Mortgage
and/or the original policy of title insurance has not been
delivered, becomes subject to a Whole Loan Transfer or a
Securitization Transaction and any such transfer requires delivery
of such original documents, the Seller shall provide a copy of such
Mortgage certified by the applicable Seller, escrow agent, title
insurer or closing attorney to be a true and complete copy of the
original recorded Mortgage and/or a marked insurance commitment, as
applicable, within thirty (30) days of such
request.
Subsection 6.04 Quality Control Procedures
.
The Seller shall have an internal quality
control program that verifies, on a regular basis, the existence
and accuracy of the legal documents, credit documents, property
appraisals, and underwriting decisions. The program shall include
evaluating and monitoring the overall quality of the Seller’s
loan production and the servicing activities of the Seller. The
program is to ensure that the Mortgage Loans are originated and
serviced in accordance with Accepted Servicing Standards and the
Underwriting Guidelines; guard against dishonest, fraudulent, or
negligent acts; and guard against errors and omissions by officers,
employees, or other authorized persons.
SECTION 7. Representations, Warranties and Covenants of the
Seller: Remedies for Breach .
Subsection 7.01. Representations and Warranties Respecting the
Seller
The Seller represents, warrants and covenants to
the Initial Purchaser and to any subsequent Purchaser as of the
Initial Closing Date and each subsequent Closing Date or as of such
date specifically provided herein or in the applicable Assignment
and Conveyance:
(i) The Seller is a federal association duly
organized, validly existing and in good standing under the laws of
the United States of America. The Seller has all licenses necessary
to carry out its business as now being conducted, and is licensed
and qualified to transact business in and is in good standing under
the laws of each state in which any Mortgaged Property is located
or is otherwise exempt under applicable law from such licensing or
qualification or is otherwise not required under applicable law to
effect such licensing or qualification and no demand for such
licensing or qualification has been made upon the Seller by any
such state, and in any event the Seller is in compliance with the
laws of any such state, to the extent such laws are applicable to
the Seller, to the extent necessary to ensure the enforceability of
each Mortgage Loan and the servicing of the Mortgage Loans in
accordance with the terms of this Agreement. No licenses or
approvals obtained by the Seller have been suspended or revoked by
any court, administrative agency, arbitrator or governmental body
and no proceedings are pending which might result in such
suspension or revocation;
(ii) The Seller has the full power and authority to
hold each Mortgage Loan, to sell each Mortgage Loan, and to
execute, deliver and perform, and to enter into and consummate, all
transactions contemplated by this Agreement. The Seller has duly
authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this
Agreement, assuming due authorization, execution and delivery by
the Purchaser, constitutes a legal, valid and binding obligation of
the Seller, enforceable against it in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization;
(iii) The execution and delivery of this Agreement by
the Seller and the performance of and compliance with the terms of
this Agreement will not violate the Seller's charter and other
formation documents or constitute a default under or result in a
breach or acceleration of, any material contract, agreement or
other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;
(iv) The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and its
performance and compliance with the terms of this Agreement will
not constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the
Seller or its assets, which violation might have consequences that
would materially and adversely affect the condition (financial or
otherwise) or the operation of the Seller or its assets or might
have consequences that would materially and adversely affect the
performance of its obligations and duties hereunder;
(v) The Seller is an approved seller/servicer for
Fannie Mae and Freddie Mac in good
standing and is a HUD approved mortgagee pursuant to
Section 203 of the National Housing Act. No event has
occurred, including but not limited to a change in insurance
coverage, which would make the Seller unable to comply with Fannie
Mae, Freddie Mac or HUD
eligibility requirements or which would require notification to
Fannie Mae, Freddie Mac or
HUD;
(vi) 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;
(vii) 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,
have been delivered to the Custodian all in compliance with the
specific requirements of the Custodial Agreement. With respect to
each Mortgage Loan, the Seller is in possession of a complete
Mortgage File in compliance with Exhibit 5 , except for such
documents as have been delivered to the Custodian;
(viii) Immediately prior to the payment of the
Purchase Price for each Mortgage Loan, the Seller was the owner of
record of the related Mortgage and the indebtedness evidenced by
the related Mortgage Note and upon the payment of the Purchase
Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage,
each related Mortgage Note and the related Mortgage Files with
respect thereto in trust for the Purchaser as the owner thereof and
only for the purpose of servicing and supervising the servicing of
each Mortgage Loan;
(ix) There are no actions or proceedings against, or
investigations of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this
Agreement, (B) seeking to prevent the sale of the Mortgage Loans or
the consummation of the transactions contemplated by this Agreement
or (C) that might prohibit or materially and adversely affect the
performance by the Seller of its obligations under, or the validity
or enforceability of, this Agreement;
(x) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by the Seller of, or compliance
by the Seller with, this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date;
(xi) 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;
(xii) The transfer of the Mortgage Loans shall be
treated as a sale on the books and records of the Seller, and the
Seller has determined that, and will treat, the disposition of the
Mortgage Loans pursuant to this Agreement for tax and accounting
purposes as a sale. The Seller shall maintain a complete set of
books and records for each Mortgage Loan which shall be clearly
marked to reflect the ownership of each Mortgage Loan by the
Purchaser;
(xiii) The consideration received by the Seller upon
the sale of the Mortgage Loans constitutes fair consideration and
reasonably equivalent value for such Mortgage Loans;
(xiv) The Seller is solvent and will not be rendered
insolvent by the consummation of the transactions contemplated
hereby. The Seller is not transferring any Mortgage Loan with any
intent to hinder, delay or defraud any of its creditors;
(xv) The information delivered by the Seller to the
Purchaser with respect to the Seller's loan loss, foreclosure and
delinquency experience for the twelve (12) months immediately
preceding the Initial Closing Date on mortgage loans underwritten
to the same standards as the Mortgage Loans and covering mortgaged
properties similar to the Mortgaged Properties, is true and correct
in all material respects;
(xvi) Neither this Agreement nor any written
statement, report or other document prepared and furnished or to be
prepared and furnished by the Seller pursuant to this Agreement or
in connection with the transactions contemplated hereby contains
any untrue statement of material fact or omits to state a material
fact necessary to make the statements contained herein or therein
not misleading;
(xvii) 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; and
(xviii) The Seller will comply in all material respects
with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with
MERS.
Subsection 7.02. Representations and Warranties Regarding
Individual Mortgage Loans .
The Seller hereby represents and warrants to the
Initial Purchaser and to any subsequent Purchaser that, as to each
Mortgage Loan, as of the related Closing Date for such Mortgage
Loan:
(i) The information set forth in the related
Mortgage Loan Schedule is complete, true and correct;
(ii) The Mortgage Loan is in compliance with all
requirements set forth in the related Confirmation, and the
characteristics of the related Mortgage Loan Package as set forth
in the related Confirmation are true and correct; provided,
however, that in the event of any conflict between the terms of any
Confirmation and this Agreement, the terms of this Agreement shall
control;
(iii) All payments required to be made up to the
close of business on the Closing Date for such Mortgage Loan under
the terms of the Mortgage Note have been made; the Seller has not
advanced funds, or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the related
Mortgaged Property, directly or indirectly, for the payment of any
amount required by the Mortgage Note or Mortgage; no Mortgage Loan
is thirty (30) or more days delinquent as of the Closing Date and
there has been no delinquency, exclusive of any period of grace, in
any payment by the Mortgagor thereunder since the origination of
the Mortgage Loan;
(iv) There are no delinquent taxes, ground rents,
water charges, sewer rents, assessments, insurance premiums,
leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related
Mortgaged Property;
(v) The terms of the Mortgage Note and the Mortgage
have not been impaired, waived, altered or modified in any respect,
except by written instruments, recorded in the applicable public
recording office if necessary to maintain the lien priority of the
Mortgage, and which have been delivered to the Custodian; the
substance of any such waiver, alteration or modification has been
approved by the insurer under the Primary Insurance Policy, if any,
and has been approved by the title insurer, to the extent required
by the related policy, and is reflected on the related Mortgage
Loan Schedule. No instrument of waiver, alteration or modification
has been executed, and no Mortgagor has been released, in whole or
in part, except in connection with an assumption agreement approved
by the insurer under the Primary
Insurance Policy, if any, and by the title insurer, to the
extent required by the policy, and which assumption agreement has
been delivered to the Custodian and the terms of which are
reflected in the related Mortgage Loan Schedule;
(vi) The Mortgage Note and the Mortgage are not
subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, nor will the operation of
any of the terms of the Mortgage Note and the Mortgage, or the
exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense
of usury and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto. Each Prepayment
Charge or penalty with respect to any Mortgage Loan is permissible,
enforceable and collectible by the Purchaser under applicable
law;
(vii) All buildings upon the Mortgaged Property are
insured by a Qualified Insurer against loss by fire, hazards of
extended coverage and such other hazards as are customary in the
area where the Mortgaged Property is located, pursuant to insurance
policies providing coverage in an amount not less than the greater
of (i) the lesser of (A) 100% of the replacement cost of all
improvements to the Mortgaged Property or (B) either (x) the
outstanding principal balance of the Mortgage Loan with respect to
each first lien Mortgage Loan or (y) with respect to each second
lien Mortgage Loan, the sum of the outstanding principal balance of
the related first lien mortgage loan and the outstanding principal
balance of the second lien Mortgage Loan, or (ii) the amount
necessary to avoid the operation of any co-insurance provisions
with respect to the Mortgaged Property, and consistent with the
amount that would have been required as of the date of origination
in accordance with the Underwriting Guidelines. All such insurance
policies contain a standard mortgagee clause naming the Seller, its
successors and assigns as mortgagee and all premiums thereon have
been paid. If the Mortgaged Property is in an area identified on a
Flood Hazard Map or Flood Insurance Rate Map issued by the Federal
Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available) a flood insurance
policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms
to the requirements of Fannie Mae and Freddie Mac . The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to maintain such
insurance at Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;
(viii) Any and all requirements of any federal, state
or local law including, without limitation, usury, truth in
lending, real estate settlement procedures, predatory and abusive
lending, consumer credit protection, equal credit opportunity, fair
housing or disclosure laws applicable to each Mortgage Loan at
origination and applicable, at origination, to any prepayment
penalty associated with the Mortgage Loans at origination, have
been complied with;
(ix) The Mortgage has not been satisfied, cancelled,
subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would
effect any such satisfaction, cancellation, subordination,
rescission or release;
(x) The Mortgage (including any Negative
Amortization which may arise thereunder) is a valid, existing and
enforceable (A) first lien and first priority security interest
with respect to each Mortgage Loan which is indicated by the Seller
to be a first lien (as reflected on the Mortgage Loan Schedule), or
(B) second lien and second priority security interest with respect
to each Mortgage Loan which is indicated by the Seller to be a
second lien (as reflected on the Mortgage Loan Schedule), in either
case, on the Mortgaged Property, including all improvements on the
Mortgaged Property subject only to (a) the lien of current real
property taxes and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not
adversely affect the Appraised Value of the Mortgaged Property, (c)
with respect to each Mortgage Loan which is indicated by the Seller
to be a second lien Mortgage Loan (as reflected on the Mortgage
Loan Schedule) a first lien on the Mortgaged Property; and (d)
other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment,
value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related
to and delivered in connection with the Mortgage Loan establishes
and creates a valid, existing and enforceable first or second lien
and first or second priority security interest (in each case, as
indicated on the Mortgage Loan Schedule) on the property described
therein and the Seller has full right to sell and assign the same
to the Purchaser;
(xi) The Mortgage Note and the related Mortgage are
genuine and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms;
(xii) All parties to the Mortgage Note and the
Mortgage had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage, and the
Mortgage Note and the Mortgage have been duly and properly executed
by such parties. The Mortgagor is a natural person or a revocable
inter vivos trust that is in compliance with Fannie Mae’s
requirements, or, if the Mortgaged Property is located in Illinois,
an Illinois land trust that is in compliance with Fannie
Mae’s requirements. In the event that the Mortgagor is a
revocable inter vivos trust or an Illinois land trust, the Mortgage
Loan is guaranteed by a natural person or a natural person is a
co-borrower under the related Mortgage Loan;
(xiii) The proceeds of the Mortgage Loan have been
fully disbursed to or for the account of the Mortgagor and there is
no obligation for the Mortgagee to advance additional funds
thereunder and any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due to the Mortgagee
pursuant to the Mortgage Note or Mortgage;
(xiv) The Seller is the sole legal, beneficial and
equitable owner of the Mortgage Note and the Mortgage and has full
right to transfer and sell the Mortgage Loan to the Purchaser free
and clear of any encumbrance, equity, lien, pledge, charge, claim
or security interest;
(xv) 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) in compliance with any and all
applicable “doing business” and licensing requirements
of the laws of the state wherein the Mortgaged Property is located
to the extent such laws are applicable to such parties;
(xvi) The Mortgage Loan is covered by an American
Land Title Association (“ALTA”) lender’s title
insurance policy (which, in the case of an Adjustable Rate Mortgage
Loan has an adjustable rate mortgage endorsement in the form of
ALTA 6.0 or 6.1) acceptable to Fannie Mae and Freddie Mac , issued by a Qualified Insurer,
insuring (subject to the exceptions contained in (x)(a) and (b),
and with respect to any second lien Mortgage Loan (c), above) the
Seller, its successors and assigns as to the first or second
priority lien (as indicated on the Mortgage Loan Schedule) of the
Mortgage in the original principal amount of the Mortgage Loan
(including, if the Mortgage Loan provides for Negative
Amortization, the maximum amount of Negative Amortization in
accordance with the Mortgage) and, with respect to any Adjustable
Rate Mortgage Loan, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment in the Mortgage Interest Rate and
Monthly Payment and Negative Amortization provisions of the
Mortgage Note. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller is the sole insured of
such lender's title insurance policy, and such lender’s title
insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such
lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission,
anything which would impair the coverage of such lender's title
insurance policy;
(xvii) There is no default, breach, violation or event
of 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 of acceleration, and the Seller has not
waived any default, breach, violation or event of acceleration.
With respect to each second lien Mortgage Loan (i) the first lien
mortgage loan is in full force and effect, (ii) there is no
default, breach, violation or event of acceleration existing under
such first lien mortgage or the related mortgage note, (iii) no
event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration thereunder, (iv) either
(A) the first lien mortgage contains a provision which allows or
(B) applicable law requires, the mortgagee under the second lien
Mortgage Loan to receive notice of, and affords such mortgagee an
opportunity to cure any default by payment in full or otherwise
under the first lien mortgage, (v) the related first lien does not
provide for or permit negative amortization under such first lien
Mortgage Loan, and (vi) either no consent for the Mortgage Loan is
required by the holder of the first lien or such consent has been
obtained and is contained in the Mortgage File;
(xviii) 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 lien)
affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related
Mortgage;
(xix) All improvements which were considered in
determining the Appraised Value of the related Mortgaged Property
lay wholly within the boundaries and building restriction lines of
the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property;
(xx) The Mortgage Loan was originated by the Seller
or by a savings and loan association, a savings bank, a commercial
bank or similar banking institution which is supervised and
examined by a federal or state authority, or by a mortgagee
approved as such by the Secretary of HUD;
(xxi) Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the proceeds of the
Mortgage Loan were disbursed. The Mortgage Loan bears interest at
the Mortgage Interest Rate. With respect to each Mortgage Loan
which is not a Negative Amortization Loan, the Mortgage Note is
payable on the first day of each month in Monthly Payments, which,
in the case of a Fixed Rate Mortgage Loan, are sufficient to fully
amortize the original principal balance over the original term
thereof (other than with respect to a Mortgage Loan identified on
the related Mortgage Loan Schedule as an interest-only Mortgage
Loan during the interest-only period or a Mortgage Loan which is
identified on the related Mortgage Loan Schedule as a Balloon
Mortgage Loan) and to pay interest at the related Mortgage Interest
Rate, and, in the case of an Adjustable Rate Mortgage Loan, are
changed on each Adjustment Date, and in any case, are sufficient to
fully amortize the original principal balance over the original
term thereof (other than with respect to a Mortgage Loan identified
on the related Mortgage Loan Schedule as an interest-only Mortgage
Loan during the interest-only
period or a
Mortgage Loan which is identified on the related Mortgage Loan
Schedule as a Balloon Mortgage Loan) and to pay interest at the
related Mortgage Interest Rate. With respect to each Negative
Amortization Mortgage Loan, the related Mortgage Note requires a
Monthly Payment which is sufficient during the period following
each Payment Adjustment Date, to fully amortize the outstanding
principal balance as of the first day of such period (including any
Negative Amortization) over the then remaining term of such
Mortgage Note and to pay interest at the related Mortgage Interest
Rate; provided, that the Monthly Payment shall not increase to an
amount that exceeds 107.5% of the amount of the Monthly Payment
that was due immediately prior to the Payment Adjustment Date;
provided, further, that the payment adjustment cap shall not be
applicable with respect to the adjustment made to the Monthly
Payment that occurs in a year in which the Mortgage Loan has been
outstanding for a multiple of five (5) years and in any such year
the Monthly Payment shall be adjusted to fully amortize the
Mortgage Loan over the remaining term. With respect to each
Mortgage Loan identified on the Mortgage Loan Schedule as an
interest-only Mortgage Loan, the interest-only period shall not
exceed ten (10) years (or such other period specified on the
Mortgage Loan Schedule) and following the expiration of such
interest-only period, the remaining Monthly Payments shall be
sufficient to fully amortize the original principal balance over
the remaining term of the Mortgage Loan and to pay interest at the
related Mortgage Interest Rate. With respect to each Balloon
Mortgage Loan, the Mortgage Note requires a monthly payment which
is sufficient to fully amortize the original principal balance over
the original term thereof and to pay interest at the related
Mortgage Interest Rate and requires a final Monthly Payment
substantially greater than the preceding monthly payment which is
sufficient to repay the remaining unpaid principal balance of the
Balloon Mortgage Loan at the Due Date of such monthly payment. The
Index for each Adjustable Rate Mortgage Loan is as set forth on the
Mortgage Loan Schedule. No Mortgage Loan is a Convertible Mortgage
Loan. No Balloon Mortgage Loan has an original stated maturity of
less than seven (7) years;
(xxii) The origination, servicing and collection
practices used with respect to each Mortgage Note and Mortgage
including, without limitation, the establishment, maintenance and
servicing of the Escrow Accounts and Escrow Payments, if any, since
origination, have been in all respects legal, proper, prudent and
customary in the mortgage origination and servicing industry. The
Mortgage Loan has been serviced by the Seller and any predecessor
servicer in accordance with the terms of the Mortgage Note and
Accepted Servicing Practices. With respect to escrow deposits and
Escrow Payments, if any, all such payments are in the possession
of, or under the control of, the Seller and there exist no
deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow
deposits or Escrow Payments or other charges or payments due the
Seller have been capitalized under any Mortgage or the related
Mortgage Note and no such escrow deposits or Escrow Payments are
being held by the Seller for any work on a Mortgaged Property which
has not been completed;
(xxiii) The Mortgaged Property is free of damage and
waste and there is no proceeding pending for the total or partial
condemnation thereof;
(xxiv) The Mortgage and related Mortgage Note contain
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, (a) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (b) otherwise
by judicial foreclosure. The Mortgaged Property is not subject to
any bankruptcy proceeding or foreclosure proceeding and the
Mortgagor has not filed for protection under applicable bankruptcy
laws in the two years preceding the origination of the Mortgage
Loan. There is no homestead or other exemption available to the
Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose
the Mortgage. 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;
(xxv) The Mortgage Loan was underwritten in
accordance with the Underwriting Guidelines in effect at the time
the Mortgage Loan was originated; and the Mortgage Note and
Mortgage are on forms acceptable to Fannie Mae and Freddie Mac ;
(xxvi) The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding
Mortgage on the Mortgaged Property and the security interest of any
applicable security agreement or chattel mortgage referred to in
(x) above;
(xxvii) Except as set forth on the Mortgage Loan
Schedule, the Mortgage File contains an appraisal of the related
Mortgaged Property which satisfied the standards of Fannie Mae and
Freddie Mac , was on an appraisal
form acceptable to Fannie Mae and Freddie Mac and was made and
signed, prior to the approval 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, whose compensation is not
affected by the approval or disapproval of the Mortgage Loan and
who met the minimum qualifications of Fannie Mae and Freddie Mac . Each appraisal of the Mortgage
Loan was made in accordance with the relevant provisions of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989;
(xxviii) In the event the Mortgage constitutes a deed of
trust, a trustee, 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 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;
(xxix) No Mortgage Loan contains provisions pursuant
to which Monthly Payments are (a) paid or partially paid with funds
deposited in any separate account established by the Seller, the
Mortgagor, or anyone on behalf of the Mortgagor, (b) paid by any
source other than the Mortgagor or (c) contains any other similar
provisions which may constitute a “buydown” provision.
The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(xxx) The Mortgagor has received all disclosure
materials required by applicable law with respect to the making of
fixed rate mortgage loans in the case of Fixed Rate Mortgage Loans,
and adjustable rate mortgage loans in the case of Adjustable Rate
Mortgage Loans and rescission materials with respect to Refinanced
Mortgage Loans, and such statement is and will remain in the
Mortgage File;
(xxxi) No Mortgage Loan was made in connection with
(a) the construction or rehabilitation of a Mortgaged Property or
(b) facilitating the trade-in or exchange of a Mortgaged
Property;
(xxxii) The Seller has no knowledge of any
circumstances or condition with respect to the Mortgage, the
Mortgaged Property, the Mortgagor or the Mortgagor's credit
standing that can reasonably be expected to cause the Mortgage Loan
to be an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value of the Mortgage
Loan;
(xxxiii) No Mortgage Loan had an LTV or a CLTV at
origination in excess of 97%. Each Mortgage Loan with an LTV at
origination in excess of 80% is and will be subject to a Primary
Insurance Policy, issued by a Qualified Insurer, which insures that
portion of the Mortgage Loan in excess of the portion of the
Appraised Value of the Mortgaged Property as required by Fannie
Mae. With respect to any Mortgage Loan which allows Negative
Amortization, such Primary Insurance Policy contains provisions to
cover the potential Negative Amortization of such Mortgage Loan.
All provisions of such Primary Insurance Policy have been and are
being complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. Any Mortgage subject to
any such Primary Insurance Policy obligates the Mortgagor
thereunder to maintain such insurance and to pay all premiums and
charges in connection therewith. The Mortgage Interest Rate for the
Mortgage Loan does not include any such insurance premium. Except
to the extent specified on the Mortgage Loan Schedule, no Mortgage
Loan is subject to a lender paid primary mortgage insurance policy.
The Mortgage Interest Rate specified on the Mortgage Loan Schedule
is net of any LPMI Fee;
(xxxiv) 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, have been made or obtained from the appropriate
authorities;
(xxxv) No error, omission, misrepresentation,
negligence, fraud 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 of any insurance in relation to such Mortgage
Loan;
(xxxvi) The Assignment of Mortgage is in recordable
form, except for the name of the assignee which is blank, and is
acceptable for recording under the laws of the jurisdiction in
which the Mortgaged Property is located;
(xxxvii) Any principal advances made to the Mortgagor
prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the
secured principal amount, as consolidated, bears a single interest
rate and single repayment term. The lien of the Mortgage securing
the consolidated principal amount is expressly insured as having
first or second (as indicated on the Mortgage Loan Schedule) 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 or Freddie Mac . The consolidated principal
amount does not exceed the original principal amount of the
Mortgage Loan plus any Negative Amortization;
(xxxviii) If the Residential Dwelling on the Mortgaged
Property is a condominium unit or a unit in a planned unit
development (other than a de minimis planned unit development) such
condominium or planned unit development project meets the
eligibility requirements of Fannie Mae and Freddie Mac ;
(xl) Interest on each Mortgage Loan is calculated on
the basis of a 360-day year consisting of twelve 30-day
months;
(xli) The Mortgaged Property is in material
compliance with all applicable environmental laws pertaining to
environmental hazards including, without limitation, asbestos, and
neither the Seller nor, to the Seller’s knowledge, the
related Mortgagor, has received any notice of any violation or
potential violation of such law;
(xlii) The Seller shall, at its own expense, cause
each Mortgage Loan to be covered by a Tax Service Contract which is
assignable to the Purchaser or its designee; provided however, that
if the Seller fails to purchase such Tax Service Contract, the
Seller shall be required to reimburse the Purchaser for all costs
and expenses incurred by the Purchaser in connection with the
purchase of any such Tax Service Contract;
(xliii) Each Mortgage Loan is covered by a Flood Zone
Service Contract which is assignable to the Purchaser or its
designee or, for each Mortgage Loan not covered by such Flood Zone
Service Contract, the Seller agrees to purchase such Flood Zone
Service Contract;
(xliv) No Mortgage Loan is (a)(1) subject to the
provisions of the Homeownership and Equity Protection Act of 1994
as amended (“HOEPA”) or (2) has an APR or total points
and fees that are equal to or exceeds the HOEPA thresholds (as
defined in 12 CFR 226.32 (a)(1)(i) and (ii)), (b) a “high
cost” mortgage loan, “covered” mortgage loan,
“high risk home” mortgage loan, or
“predatory” mortgage loan or any other comparable term,
no matter how defined under any federal, state or local law, (c)
subject to any comparable federal, state or local statutes or
regulations, or any other statute or regulation providing for
heightened regulatory scrutiny or assignee liability to holders of
such mortgage loans, or (d) a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in the current Standard &
Poor’s LEVELS® Glossary Revised, Appendix E);
(xlv) No predatory, abusive, or deceptive lending
practices, including but not limited to, the extension of credit to
a Mortgagor without regard for the Mortgagor’s ability to
repay the Mortgage Loan and the extension of credit to a Mortgagor
which has no apparent benefit to the Mortgagor, were employed in
connection with the origination of the Mortgage Loan. Each Mortgage
Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of the Fannie Mae Guide;
(xlvi) The debt-to-income ratio of the related
Mortgagor was not greater than 60% at the origination of the
related Mortgage Loan;
(xlvii) No Mortgagor was required to purchase any
credit insurance product (e.g., life, mortgage, disability,
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, accident,
unemployment or health insurance) or debt cancellation agreement 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;
(xlviii) The Mortgage Loans were not selected from the
outstanding one- to four-family mortgage loans in the
Seller’s portfolio as to which the representations and
warranties set forth in this Agreement could be made at the related
Closing Date in a manner so as to affect adversely the interests of
the Purchaser;
(xlix) 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;
(li) The information set forth in the Mortgage Loan
Schedule as to Prepayment Charges is complete, true and correct in
all material respects and each Prepayment Charge is permissible,
enforceable and collectable in accordance with its terms upon the
Mortgagor’s full and voluntary principal payment under
applicable law;
(lii) The Mortgage Loan was not prepaid in full prior
to the Closing Date;
(liii) No Mortgage Loan is secured by cooperative
housing, commercial property or mixed use property;
(liv) As of the related Closing Date, each Mortgage
Loan is eligible for sale in the secondary market or for inclusion
in a Securitization Transaction;
(lv) Except as set forth on the related Mortgage
Loan Schedule, none of the Mortgage Loans are subject to a
Prepayment Charge. For any Mortgage Loan originated prior to
October 1, 2002 that is subject to a Prepayment Charge, such
Prepayment Charge does not extend beyond five (5) years after the
date of origination. For any Mortgage Loan originated on or
following October 1, 2002 that is subject to a Prepayment Charge,
such Prepayment Charge does not extend beyond three (3) years after
the date of origination. 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) if required by law, 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, (iii)
the prepayment premium is disclosed to the Mortgagor in the loan
documents pursuant to applicable law, and (iv) notwithstanding any
state or federal law to the contrary, the Seller shall not impose
such Prepayment Charge in any instance when the mortgage debt is
accelerated as the result of the Mortgagor's default in making the
loan payments;
(lvi) 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
Mortgaged Property, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of
the Anti-Money Laundering Laws. No Mortgage Loan is subject to
nullification pursuant to Executive Order 13224 (the
“Executive Order”) or the regulations promulgated by
the Office of Foreign Assets Control of the United States
Department of the Treasury (the “OFAC Regulations”) or
in violation of the Executive Order or the OFAC Regulations, and no
Mortgagor is subject to the provisions of such Executive Order or
the OFAC Regulations nor listed as a “blocked person”
for purposes of the OFAC Regulations;
(lvii) 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. With respect to any Mortgage Loan, the
Mortgagor was assigned the highest credit grade available with
respect to a mortgage loan product offered by such Mortgage
Loan’s originator, based on a comprehensive assessment of
risk factors, including the Mortgagor’s credit
history;
(lviii) The methodology used in underwriting the
extension of credit for each Mortgage Loan employs 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;
(lix) With respect to each Mortgage Loan, the Seller
has fully and accurately furnished complete information (i.e.,
favorable and unfavorable) on the related borrower credit files to
Equifax, Experian and Trans Union Credit Information Company, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, on a monthly basis and, for each Mortgage Loan, the
Seller will furnish, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete
information on its borrower credit files to Equifax, Experian, and
Trans Union Credit Information Company, on a monthly
basis;
(lx) All points and fees related to each Mortgage
Loan were disclosed in writing to the related Borrower in
accordance with applicable state and federal laws and regulations.
No related Borrower was charged “points and fees”
(whether or not financed) in an amount greater than (a) $1,000 or
(b) 5% of the principal amount of such loan, whichever is greater,
such 5% limitation is calculated in accordance with Fannie
Mae’s anti-predatory lending requirements as set forth in the
Fannie Mae Guides. For purposes of this representation,
“points and fees” (a) include origination,
underwriting, broker and finder’s fees and other charges that
the lender imposed as a condition of making the loan, whether they
are paid to the lender or a third party, and (b) exclude bona fide
discount points, fees paid for actual services rendered in
connection with the origination of the mortgage (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 percent of the
loan amount. 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 were disclosed in writing to the related Mortgagor in
accordance with applicable state and federal laws and
regulations;
(lxi) The Seller will transmit full-file credit
reporting data for each Mortgage Loan pursuant to Fannie Mae Guide
Announcement 95-19 and for each Mortgage Loan, Seller agrees it
shall report one of the following statuses each month as follows:
new origination, current, delinquent (30-, 60-, 90-days, etc.),
foreclosed, or charged-off;
(lxii) With respect to any Mortgage Loan which is
secured by manufactured housing, if such Mortgage Loans are
permitted hereunder, such Mortgage Loan satisfies the requirements
for inclusion in residential mortgage backed securities
transactions rated by S&P and such manufactured housing is the
principal residence of the Mortgagor at the time of the origination
of the Mortgage Loan;
(lxiii) Each Mortgage Loan constitutes a
“qualified mortgage” under Section 860G(a)(3)(A)
of the Code and Treasury Regulation
Section 1.860G-2(a)(1);
(lxiv) No Mortgage Loan is secured by real property or
secured by a manufactured home located in the state of Georgia
unless (x) such Mortgage Loan was originated prior to October 1,
2002 or after March 6, 2003, or (y) the property securing the
Mortgage Loan is not, nor will be, occupied by the Mortgagor as the
Mortgagor’s principal dwelling. No Mortgage Loan is a
“High Cost Home Loan” as defined in the Georgia Fair
Lending Act, as amended (the “Georgia Act”). Each
Mortgage Loan that is a “Home Loan” under the Georgia
Act complies with all applicable provisions of the Georgia Act. No
Mortgage Loan secured by owner occupied real property or an owner
occupied manufactured home located in the State of Georgia was
originated (or modified) on or after October 1, 2002 through and
including March 6, 2003;
(lxv) No Mortgage Loan is a “High-Cost”
loan as defined under the New York Banking Law Section 6-1,
effective as of April 1, 2003;
(lxvi) No Mortgage Loan (a) is secured by property
located in the State of New York; (b) had an unpaid principal
balance at origination of $300,000 or less, and (c) has an
application date on or after April 1, 2003, the terms of which
Mortgage Loan equal or exceed either the APR or the points and fees
threshold for “high-cost home loans”, as defined in
Section 6-1 of the New York State Banking Law;
(lxvii) No Mortgage Loan is a “High Cost Home
Loan” as defined in the Arkansas Home Loan Protection Act
effective July 16, 2003 (Act 1340 or 2003);
(lxviii) No Mortgage Loan is a “High Cost Home
Loan” as defined in the Kentucky high-cost loan statute
effective June 24, 2003 (Ky. Rev. Stat.
Section 360.100);
(lxix) No Mortgage Loan secured by property located in
the State of Nevada is a “home loan” as defined in the
Nevada Assembly Bill No. 284;
(lxx) No Mortgage Loan is a “manufactured
housing loan” or “home improvement home loan”
pursuant to the New Jersey Home Ownership Act. No Mortgage Loan is
a “High-Cost Home Loan” or a refinanced “Covered
Home Loan,” in each case, as defined in the New Jersey Home
Ownership Act effective November 27, 2003 (N.J.S.A. 46;10B-22 et
seq.);
(lxxi) No Mortgage Loan is a subsection 10 mortgage
under the Oklahoma Home Ownership and Equity protection
Act;
(lxxii) No Mortgage Loan is a “High-Cost Home
Loan” as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004 (N.M. Stat. Ann. §§ 58-21A-1 et
seq.);
(lxxiii) No Mortgage Loan is a “High-Risk Home
Loan” as defined in the Illinois High-Risk Home Loan Act
effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et
seq.);
(lxxiv) No Loan that is secured by property located
within the State of Maine meets the definition of a (i)
“high-rate, high-fee” mortgage loan under Article VIII,
Title 9-A of the Maine Consumer Credit Code or (ii)
“High-Cost Home Loan” as defined under the Maine House
Bill 383 L.D. 494, effective as of September 13, 2003;
(lxxv) With respect to any Loan for which a mortgage
loan application was submitted by the Mortgagor after April 1,
2004, no such Loan secured by Mortgaged Property in the State of
Illinois which has a Loan Interest Rate in excess of 8.0% per annum
has lender-imposed fees (or other charges) in excess of 3.0% of the
original principal balance of the Loan;
(lxxvi) No Mortgage Loan is a “High Cost Home
Mortgage Loan” as defined in the Massachusetts Predatory Home
Loan Practices Act, effective November 7, 2004 (Mass. Ann. Laws Ch.
183C). No Mortgage Loan secured by a Mortgaged Property located in
the Commonwealth of Massachusetts was made to pay off or refinance
an existing loan or other debt of the related borrower (as the term
“borrower” is defined in the regulations promulgated by
the Massachusetts Secretary of State in connection with
Massachusetts House Bill 4880 (2004)) unless either (1) (a) the
related Mortgage Interest Rate (that would be effective once the
introductory rate expires, with respect to Adjustable Rate Mortgage
Loans) did or would not exceed by more than 2.25% the yield on
United States Treasury securities having comparable periods of
maturity to the maturity of the related Mortgage Loan as of the
fifteenth day of the month immediately preceding the month in which
the application for the extension of credit was received by the
related lender or (b) the Mortgage Loan is an “open-end home
loan” (as such term is used in the Massachusetts House Bill
4880 (2004)) and the related Mortgage Note provides that the
related Mortgage Interest Rate may not exceed at any time the Prime
rate index as published in The Wall Street Journal plus a margin of
one percent, or (2) such Mortgage Loan is in the "borrower's
interest," as documented by a "borrower's interest worksheet" for
the particular Mortgage Loan, which worksheet incorporates the
factors set forth in Massachusetts House Bill 4880 (2004) and the
regulations promulgated thereunder for determining "borrower's
interest," and otherwise complies in all material respects with the
laws of the Commonwealth of Massachusetts;
(lxxvii) No Loan is a “High Cost Home Loan”
as defined by the Indiana Home Loan Practices Act, effective
January 1, 2005 ( Ind. Code Ann. §§ 24-9-1 et
seq.);
(lxxviii) The Mortgagor has not made or caused to be made
any payment in the nature of an “average” or
“yield spread premium” to a mortgage broker or a like
Person which has not been fully disclosed to the
Mortgagor;
(lxxix) The sale or transfer of the Mortgage Loan by
the Seller complies with all applicable federal, state, and local
laws, rules, and regulations governing such sale or transfer,
including, without limitation, the Fair and Accurate Credit
Transactions Act (“FACT Act”) and the Fair Credit
Reporting Act, each as may be amended from time to time, and the
Seller has not received any actual or constructive notice of any
identity theft, fraud, or other misrepresentation in connection
with such Mortgage Loan or any party thereto;
(lxxx) With respect to each MOM Loan, a MIN has been
assigned by MERS and such MIN is accurately provided on the
Mortgage Loan Schedule. The related Assignment of Mortgage to MERS
has been duly and properly recorded, or has been delivered for
recording to the applicable recording office;
(lxxxi) With respect to each MOM Loan, Seller has not
received any notice of liens or legal actions with respect to such
Mortgage Loan and no such notices have been electronically posted
by MERS;
(lxxxii) With respect to each second lien Mortgage Loan,
either no consent for the Mortgage Loan is required by the holder
of the first lien or such consent has been obtained and is
contained in the Mortgage File; and
(lxxxiii) No Mortgagor agreed to submit to arbitration to
resolve any dispute arising out of or relating in any way to the
Mortgage Loan transaction. No Mortgage Loan is subject to any
mandatory arbitration.
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 lack of examination of
any Mortgage File. Upon discovery by the Seller of a breach of any
of the foregoing representations and warranties which materially
and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely
affects the value of a Mortgage Loan or the interests of the
Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage
Loan), or in the event that any Mortgagor fails to make the first
payment due to the Purchaser following the Closing Date, the Seller
shall give prompt written notice to the Purchaser.
Within 60 days of the earlier of either
discovery by the Seller, or notice to the Seller, of any breach of
a representation or warranty which materially and adversely affects
the value of a Mortgage Loan or the Mortgage Loans or the
Purchaser’s interest in a Mortgage Loan or the Mortgage
Loans, 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 at the Repurchase Price. In the event
that a breach shall involve any representation or warranty set
forth in Subsection 7.01 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 shall, at the
Purchaser’s option, be repurchased by the Seller at the
Repurchase Price. The Seller shall, at the request of the Purchaser
and assuming that 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 Loans; provided that such substitution
shall be effected not later than 120 days after the related Closing
Date. If the Seller has no Qualified Substitute Mortgage Loan, it
shall repurchase the deficient Mortgage Loan. Any repurchase of a
Mortgage Loan(s) pursuant to the foregoing provisions of this
Subsection 7.03 shall occur on a date designated by the
Purchaser and shall be accomplished (i) during the Interim
Servicing Period by deposit in the Custodial Account of the amount
of the Repurchase Price for distribution to the Purchaser on the
next scheduled Distribution Date and (ii) following the Interim
Servicing Period, by wire transfer of immediately available funds
on the repurchase date to an account designated by the Purchaser.
Notwithstanding anything to the contrary contained herein, it is
understood by the parties hereto that a breach of the
representations and warranties made in Subsections 7.02(viii),
(xliv), (xlvii), (lv), (lvii), (lviii), (lix), (lx), (lxii),
(lxiii), (lxiv) or (lxxxiii) will be deemed to materially and
adversely affect the value of the related Mortgage Loan or the
interest of the Purchaser therein.
At the time of repurchase of any deficient
Mortgage Loan, the Purchaser and the Seller shall arrange for the
reassignment of the repurchased Mortgage Loan to the Seller and the
delivery to the Seller of any documents held by the Custodian
relating to the repurchased Mortgage Loan. In the event the
Repurchase Price is deposited in the Custodial Account, the Seller
shall, simultaneously with such deposit, give written notice to the
Purchaser that such deposit has taken place. Upon such repurchase
the related Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this
Agreement.
As to any Deleted Mortgage Loan for which the
Seller substitutes a Qualified Substitute Mortgage Loan or Loans,
the Seller shall effect such substitution by delivering to the
Purchaser for such Qualified Substitute Mortgage Loan or Loans the
Mortgage Note, the Mortgage, the Assignment of Mortgage and such
other documents and agreements as are required by the Custodial
Agreement, with the Mortgage Note endorsed as required therein. The
Seller shall deposit in the Custodial Account the Monthly Payment
less the Servicing Fee due on such Qualified Substitute Mortgage
Loan or Loans in the month following the date of such substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution will be retained by the Seller.
For the month of substitution, distributions to the Purchaser will
include the Monthly Payment due on such 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 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, such Qualified Substitute Mortgage
Loan or Loans 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 or Loans, 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 will determine the amount (if
any) by which the aggregate principal balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution 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). An amount equal to the product
of the amount of such shortfall multiplied by the greater of 100%
or the Purchase Price percentage specified in the related
Confirmation shall be distributed by the Seller in the month of
substitution pursuant to the Servicing Addendum. Accordingly, on
the date of such substitution, the Seller will deposit from its own
funds into the Custodial Account an amount equal to such
amount.
In addition to such cure, repurchase and
substitution obligation, the Seller shall indemnify the Initial
Purchaser and any subsequent Purchaser and hold them harmless
against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees 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's representations and warranties contained
in this Section 7. It is understood and agreed that the
obligations of the Seller set forth in this Subsection 7.03 to
cure or repurchase a defective Mortgage Loan and to indemnify the
Initial Purchaser and any subsequent Purchaser as provided in this
Subsection 7.03 constitute the sole remedies of the Initial
Purchaser and any subsequent Purchaser respecting a breach of the
foregoing representations and warranties.
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 or 7.02 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Purchaser or
notice thereof by the Seller to the Purchaser and (ii) demand upon
the Seller by the Purchaser for compliance with the relevant
provisions of this Agreement.
In addition to the foregoing, in the event that
a breach of any representation of the Seller materially and
adversely affects the interests of the Purchaser in any Prepayment
Charge or the collectability of such Prepayment Charge, the Seller
shall pay the amount of the scheduled Prepayment Charge to the
Purchaser upon the payoff of any related Mortgage Loan.
Subsection 7.04. Repurchase of Certain Mortgage Loans; Premium
Protection .
(a) In the event that (i) the first Due Date for a
Mortgage Loan is prior to the Cut-off Date and the initial Monthly
Payment is not made by the related Mortgagor within thirty (30)
days of such Due Date or (ii) the first Monthly Payment on any
Mortgage Loan due following the Cut-off Date is not made by the
related Mortgagor within thirty (30) days of the related Due Date,
then, in each such case, the Seller shall repurchase the affected
Mortgage Loans at the Repurchase Price, which shall be paid as
provided for in Subsection 7.03. The Seller shall notify the
Purchaser of any such default under this Subsection 7.04(a) within
thirty (30) days of any such Mortgage Loan becoming thirty (30)
days delinquent.
(b) In the event that any Mortgage Loan
prepays-in-full within three (3) months following the related
Closing Date, Seller shall remit to the Initial Purchaser an amount
equal to the product of (i) the excess of (A) the percentage of par
as stated in the related Confirmation as the purchase price
percentage (subject to adjustment as provided therein) over (B)
100%, times (ii) the outstanding
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