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Exhibit 99.12(b)
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SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
--------------------
MORGAN STANLEY MORTGAGE CAPITAL INC.,
Purchaser
QUICKEN LOANS, INC.
Seller
--------------------
Dated as of June 1, 2006
Conventional,
Fixed and Adjustable Rate
Residential Mortgage Loans
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<TABLE>
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TABLE OF CONTENTS
Page
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SECTION 1.
DEFINITIONS.....................................................................................1
SECTION 2. AGREEMENT TO
PURCHASE..........................................................................14
SECTION 3. MORTGAGE
SCHEDULES.............................................................................14
SECTION 4. PURCHASE
PRICE.................................................................................14
SECTION 5. EXAMINATION OF MORTGAGE
FILES..................................................................15
SECTION 6. CONVEYANCE FROM SELLER TO
PURCHASER............................................................16
SECTION 7. SERVICING OF THE MORTGAGE
LOANS................................................................19
SECTION 8. REPRESENTATIONS AND WARRANTIES REGARDING THE
PURCHASER.........................................19
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH...................20
SECTION 10.
CLOSING........................................................................................40
SECTION 11. CLOSING
DOCUMENTS..............................................................................41
SECTION 12.
COSTS..........................................................................................43
SECTION 13. COOPERATION OF SELLER WITH A
RECONSTITUTION....................................................43
SECTION 14. THE
SELLER.....................................................................................44
SECTION 15. FINANCIAL
STATEMENTS...........................................................................46
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY
INTEREST.................................................46
SECTION 17.
NOTICES........................................................................................47
SECTION 18. SEVERABILITY
CLAUSE............................................................................48
SECTION 19.
COUNTERPARTS...................................................................................48
SECTION 20. GOVERNING
LAW..................................................................................48
SECTION 21. INTENTION OF THE
PARTIES.......................................................................48
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SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE
AGREEMENT.......................................49
SECTION 23.
WAIVERS........................................................................................49
SECTION 24.
EXHIBITS.......................................................................................49
SECTION 25. GENERAL INTERPRETIVE
PRINCIPLES................................................................49
SECTION 26. REPRODUCTION OF
DOCUMENTS......................................................................50
SECTION 27. FURTHER
AGREEMENTS.............................................................................50
SECTION 28. RECORDATION OF ASSIGNMENTS OF
MORTGAGE.........................................................50
SECTION 29. NO
SOLICITATION................................................................................50
SECTION 30. WAIVER OF TRIAL BY
JURY........................................................................51
SECTION 31. JURISDICTION; CONSENT TO SERVICE OF
PROCESS....................................................51
SECTION 32.
CONFIDENTIALITY................................................................................51
SECTION 33. ENTIRE
AGREEMENT...............................................................................52
SECTION 34. COMPLIANCE WITH REGULATION
AB..................................................................52
</TABLE>
EXHIBITS
EXHIBIT A-1 MORTGAGE LOAN DOCUMENTS
EXHIBIT A-2 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D [RESERVED]
EXHIBIT E FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
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SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
------------------------------------------------------
WARRANTIES AGREEMENT
--------------------
This SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT ("Agreement"), dated as of June 1, 2006, by
and between
Morgan Stanley Mortgage Capital Inc., a New York corporation
(the
"Purchaser"), and Quicken Loans, Inc., a Michigan corporation (the
"Seller").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Seller are parties to that
certain
Mortgage Loan Purchase and Warranties Agreement, dated as of June
1, 2004, as
amended and restated by that certain Amendment No. 1 dated October
1, 2004 as
amended and restated by that certain First Amended and Restated
Mortgage Loan
Purchase and Warranties Agreement, dated as of May 1, 2005 (the
"Original
Purchase Agreement") and the Seller desires to sell, from time to
time, to the
Purchaser, and the Purchaser desires to purchase, from time to
time, from the
Seller, certain conventional adjustable and fixed rate residential
first-lien
mortgage loans (the "Mortgage Loans") on a servicing released basis
as
described herein, and which shall be delivered in pools of whole
loans (each,
a "Mortgage Loan Package") on various dates as provided herein
(each, a
"Closing Date");
WHEREAS, the Purchaser and the Seller desire to enter into this
Agreement to amend and restate the Original Purchase Agreement to
make certain
modifications as set forth herein with respect to all Mortgage
Loans subject
to this Agreement or the Original Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable
consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Purchaser
and the Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms
shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to each Mortgage Loan
and
the Seller shall mean the servicing procedures which (i) conform to
customary
and usual standards of practice of prudent mortgage lenders and
mortgage loan
servicers, for mortgage loans similar to the Mortgage Loans, (ii)
follow the
policies and procedures that the Seller applies to similar mortgage
loans
serviced for third parties and for its own account, (iii) meet
the
requirements of Fannie Mae and Freddie Mac and (iv) comply with all
applicable
laws and follow collection practices with respect to the related
Mortgage
Loans that are in all material respects legal and customary.
Act: The National Housing Act, as amended from time to time.
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Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other
Person
controlling or controlled by or under common control with such
specified
Person. For the purposes of this definition, "control" when used
with respect
to any specified Person means the power to direct the management
and policies
of such Person, directly or indirectly, whether through the
ownership of
voting securities, by contract or otherwise and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Fannie Mae Transfer or a Freddie Mac
Transfer.
Agreement: This Third Amended and Restated Mortgage Loan Purchase
and
Warranties Agreement and all amendments and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Appraised Value: With respect to any Mortgaged Property, the
lesser
of (i) the value thereof as determined by an appraisal made for the
originator
of the Mortgage Loan at the time of origination of the Mortgage
Loan by a
Qualified Appraiser and (ii) the purchase price paid for the
related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan;
provided,
however, that in the case of a refinanced Mortgage Loan, such value
of the
Mortgaged Property is based solely upon the value determined by an
appraisal
made for the originator of such refinanced Mortgage Loan at the
time of
origination of such refinanced Mortgage Loan by a Qualified
Appraiser.
Assignment and Conveyance Agreement: As defined in Subsection
6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice
of
transfer or equivalent instrument in recordable form, sufficient
under the
laws of the jurisdiction wherein the related Mortgaged Property is
located to
reflect the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original
terms
or any modifications thereof provides for amortization beyond its
scheduled
maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day
on which banking and savings and loan institutions, in the State of
New York
or the State in which the Interim Servicer's servicing operations
are located
or (iii) the state in which the Custodian's operations are located,
are
authorized or obligated by law or executive order to be closed.
Cash-Out Refinance: A refinanced Mortgage Loan in which the
proceeds
received were in excess of the amount of funds required to repay
the principal
balance of any existing first mortgage on the related Mortgaged
Property, pay
related closing costs and satisfy any outstanding subordinate
mortgages on the
related Mortgaged Property as determined in accordance with
Seller's
Underwriting Guidelines.
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Closing Date: The date or dates on which the Purchaser from time
to
time shall purchase, and the Seller from time to time shall sell,
the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to
the related
Mortgage Loan Package.
Closing Documents: The documents required to be delivered on
each
Closing Date pursuant to Section 11.
Code: The Internal Revenue Code of 1986, as amended, or any
successor
statute thereto.
Commission: The United States Securities and Exchange
Commission.
Condemnation Proceeds: All awards or settlements in respect of
a
Mortgaged Property, whether permanent or temporary, partial or
entire, by
exercise of the power of eminent domain or condemnation, to the
extent not
required to be released to a Mortgagor in accordance with the terms
of the
related Mortgage Loan Documents.
Co-op: A private, cooperative housing corporation, having only
one
class of stock outstanding, which owns or leases land and all or
part of a
building or buildings, including apartments, spaces used for
commercial
purposes and common areas therein and whose board of directors
authorizes the
sale of stock and the issuance of a Co-op Lease.
Co-op Lease: With respect to a Co-op Loan, the lease with respect
to
a dwelling unit occupied by the Mortgagor and relating to the stock
allocated
to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated
to a dwelling unit in a residential cooperative housing corporation
and a
collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as Covered pursuant
to
Appendix E of Standard & Poor's Glossary.
Custodial Account: The separate trust account created and
maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement
(with respect
to each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of
the
Mortgage Loan Documents. If more than one Custodial Agreement is in
effect at
any given time, all of the individual Custodial Agreements shall
collectively
be referred to as the "Custodial Agreement."
Custodian: Deutsche Bank Trust Company Americas, a New York
banking
corporation, and its successors in interest, or any successor to
the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the
related
Purchase Price and Terms Agreement with respect to the related
Mortgage Loan
Package.
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Deemed Material and Adverse Representation: Each representation
and
warranty identified as such in Section 9.02 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage
Loan by the
Seller in accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation
AB,
with respect to any Securitization Transaction.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim
period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on
a Mortgage Loan, exclusive of any days of grace.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer
rents,
municipal charges, mortgage insurance premiums, fire and hazard
insurance
premiums, condominium charges, and any other payments required to
be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any
other
document.
Exchange Act. The Securities Exchange Act of 1934, as amended.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie
Mae
Servicers' Guide, as amended or restated from time to time.
Fannie Mae Transfer: As defined in Section 13.
FHA: The Federal Housing Administration, an agency within the
United
States Department of Housing and Urban Development, or any
successor thereto
and including the Federal Housing Commissioner and the Secretary of
Housing
and Urban Development where appropriate under the FHA
Regulations.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Freddie Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Freddie Mac Transfer: As defined in Section 13.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the
fixed percentage amount set forth in the related Mortgage Note
which amount is
added to the Index in
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accordance with the terms of the related Mortgage Note to determine
on each
Interest Rate Adjustment Date the Mortgage Interest Rate for such
Mortgage
Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and
Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual
percentage rate"
or total "points and fees" payable by the related Mortgagor (as
each such term
is calculated under HOEPA) that exceed the thresholds set forth by
HOEPA and
its implementing regulations, including 12 C.F.R. ss.
226.32(a)(1)(i) and
(ii), (c) classified as a "high cost home," "threshold," "covered,"
(excluding
New Jersey "Covered Home Loans" as that term was defined in clause
(1) of the
definition of that term in the New Jersey Home Ownership Security
Act of 2002
that were originated between November 26, 2003 and July 7, 2004),
"high risk
home," "predatory" or similar loan under any other applicable
state, federal
or local law (or a similarly classified loan using different
terminology under
a law imposing heightened regulatory scrutiny or additional legal
liability
for residential mortgage loans having high interest rates, points
and/or fees)
or (d) a Mortgage Loan categorized as High Cost pursuant to
Appendix E of
Standard & Poor's Glossary. For avoidance of doubt, the parties
agree that
this definition shall apply to any law regardless of whether such
law is
presently, or in the future becomes, the subject of judicial review
or
litigation.
Home Loan: A Mortgage Loan categorized as a Home Loan pursuant
to
Appendix E of the Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any
federal
agency or official thereof which may from time to time succeed to
the
functions thereof with regard to Mortgage Insurance issued by the
FHA. The
term "HUD," for purposes of this Agreement, is also deemed to
include
subdivisions thereof such as the FHA and Government National
Mortgage
Association.
Index: The index indicated in the related Mortgage Note for
each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged
Property.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate
Mortgage Loan, the date, specified in the related Mortgage Note and
the
related Mortgage Loan Schedule, on which the Mortgage Interest Rate
is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage
Loan,
the Person named on the MERS System as the interim funder pursuant
to the MERS
Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement,
or its successor in interest, or any successor to the Interim
Servicer under
the Interim Servicing Agreement, as therein provided.
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Interim Servicing Agreement: The agreement to be entered into by
the
Purchaser and the Interim Servicer, providing for the Interim
Servicer to
service the Mortgage Loans as specified by the Interim Servicing
Agreement.
Investor: With respect to each MERS Designated Mortgage Loan,
the
Person named on the MERS System as the investor pursuant to the
MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to
an
Adjustable Rate Mortgage Loan which provides for an absolute
maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the
terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage
Interest Rate at the time of origination of such Adjustable Rate
Mortgage Loan
by more than the amount per annum set forth on the related Mortgage
Loan
Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale
or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale
or
otherwise or the sale of the related Mortgaged Property if the
Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan,
the
ratio (expressed as a percentage) of the outstanding principal
amount of the
Mortgage Loan as of the date of origination (unless otherwise
indicated), to
the lesser of (a) the Appraised Value of the Mortgaged Property at
origination
and (b) if the Mortgage Loan was made to finance the acquisition of
the
related Mortgaged Property, the purchase price of the Mortgaged
Property.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the
Federal
Manufactured Home Construction and Safety Standards adopted on June
15, 1976,
by the Department of Housing and Urban Development ("HUD Code"), as
amended in
2000, which preempts state and local building codes. Each unit is
identified
by the presence of a HUD Plate/Compliance Certificate label. The
sections are
then transported to the site and joined together and affixed to a
pre-built
permanent foundation (which satisfies the manufacturer's
requirements and all
state, county, and local building codes and regulations). The
manufactured
home is built on a non-removable, permanent frame chassis that
supports the
complete unit of walls, floors, and roof. The underneath part of
the home may
have running gear (wheels, axles, and brakes) that enable it to be
transported
to the permanent site. The wheels and hitch are removed prior to
anchoring the
unit to the permanent foundation. The manufactured home must be
classified as
real estate and taxed accordingly. The permanent foundation may be
on land
owned by the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a
Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or
will take
such action as is necessary to cause MERS to be, the mortgagee of
record, as
nominee for the Seller, in accordance with MERS Procedure Manual
and (b) the
Seller has designated or will designate the Purchaser as the
Investor on the
MERS System.
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MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS
Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing
a
Mortgage Note, which creates a first lien on the Mortgaged
Property. With
respect to a Co-op Loan, the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage
Loan
Documents and the items listed in Exhibit A-2 annexed hereto and
any
additional documents required to be added to the Mortgage File
pursuant to
this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment
as set
forth in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject
of
this Agreement, each Mortgage Loan originally sold and subject to
this
Agreement being identified on the applicable Mortgage Loan
Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the
Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds,
Insurance Proceeds, Servicing Rights and all other rights,
benefits, proceeds
and obligations arising from or in connection with such Mortgage
Loan,
excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered
to
the Custodian pursuant to Subsection 6.03 with respect to any
Mortgage Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall
be
purchased by the Purchaser from the Seller from time to time on
each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting
forth
the following information with respect to each Mortgage Loan in the
related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying
number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged
Property
including the city, state and zip code; (4) a code indicating
whether the
Mortgagor is self-employed; (5) a code indicating whether the
Mortgaged
Property is owner-occupied, investment property or a second home;
(6) the
number and type of residential units constituting the Mortgaged
Property (e.g.
single family residence, a two- to four-family dwelling,
condominium, planned
unit development or cooperative); (7) the original
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months to maturity or the remaining months to maturity from the
related
Cut-off Date, in any case based on the original amortization
schedule and, if
different, the maturity expressed in the same manner but based on
the actual
amortization schedule; (8) the Loan-to-Value Ratio at origination;
(9) the
Mortgage Interest Rate as of the related Cut-off Date; (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, the Due Date;
(11) the
stated maturity date; (12) the amount of the Monthly Payment as of
the related
Cut-off Date; (13) the last payment date on which a payment was
actually
applied to the outstanding principal balance; (14) the original
principal
amount of the Mortgage Loan; (15) the principal balance of the
Mortgage Loan
as of the close of business on the related Cut-off Date, after
deduction of
payments of principal due and collected on or before the related
Cut-off Date;
(16) with respect to each First Lien Loan with a second lien behind
it, the
combined principal balance of the Mortgage Loan as of the close of
business on
the related origination date, after deduction of payments of
principal due and
collected on or before the related Cut-off Date; (17) [reserved];
(18) with
respect to Adjustable Rate Mortgage Loans, the Interest Rate
Adjustment Date;
(19) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin; (20)
with respect to Adjustable Rate Mortgage Loans, the Lifetime Rate
Cap under
the terms of the Mortgage Note; (21) with respect to Adjustable
Rate Mortgage
Loans, a code indicating the type of Index; (22) the type of
Mortgage Loan
(i.e., Fixed Rate, Adjustable Rate); (23) a code indicating the
purpose of the
loan (i.e., purchase, Rate/Term Refinance or Cash-Out Refinance);
(24) a code
indicating the documentation style (i.e. no documents, full,
alternative,
reduced, no income/no asset, stated income, no ratio, reduced or
NIV); (25)
asset verification (Y/N); (26) the loan credit classification (as
described in
the Underwriting Guidelines); (27) whether such Mortgage Loan
provides for a
Prepayment Penalty; (28) the Prepayment Penalty period of such
Mortgage Loan,
if applicable; (29) a description of the Prepayment Penalty, if
applicable;
(30) the Mortgage Interest Rate as of origination; (31) the credit
risk score
(FICO score); (32) the date of origination; (33) with respect to
Adjustable
Rate Mortgage Loans, the Mortgage Interest Rate adjustment period
with respect
to (i) initial adjustment and (ii) periodic adjustments following
the initial
adjustment; (34) with respect to Adjustable Rate Mortgage Loans,
the Mortgage
Interest Rate adjustment percentage with respect to (i) initial
adjustment and
(ii) periodic adjustments following the initial adjustment; (35)
with respect
to Adjustable Rate Mortgage Loans, the Mortgage Interest Rate
floor; (36) the
Mortgage Interest Rate calculation method (i.e., 30/360, simple
interest,
other); (37) with respect to Adjustable Rate Mortgage Loans, the
Periodic Rate
Cap as of the first Interest Rate Adjustment Date; (38) with
respect to each
Adjustable Rate Mortgage Loan, a code indicating whether the
Mortgage Loan
provides for negative amortization; (39) with respect to each
Adjustable Rate
Mortgage Loan with negative amortization, the negative amortization
limit;
(40) a code indicating whether the Mortgage Loan is a High Cost
Loan; (41) a
code indicating whether the Mortgage Loan is a Balloon Mortgage
Loan; (42) a
code indicating whether the Mortgage Loan by its original terms or
any
modifications thereof provides for amortization beyond its
scheduled maturity
date; (43) the original Monthly Payment due; (44) the Appraised
Value; (45)
appraisal type; (46) appraisal date; (47) a code indicating whether
the
Mortgage Loan is covered by a PMI Policy and, if so, identifying
the PMI
Policy provider; (48) in connection with a condominium unit, a code
indicating
whether the condominium project where such unit is located is
low-rise or
high-rise; (49) a code indicating whether the Mortgaged Property is
a
leasehold estate; (50) with respect to the related Mortgagor,
the
debt-to-income ratio; (51) sales price; (52) automated valuation
model (AVM);
and (53) the MERS Identification Number, if applicable. With
respect
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to the Mortgage Loans in the aggregate, the related Mortgage Loan
Schedule
shall set forth the following information, as of the related
Cut-off Date: (1)
the number of Mortgage Loans; (2) the current aggregate outstanding
principal
balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate
of the Mortgage Loans; (4) the weighted average maturity of the
Mortgage
Loans; (5) the average principal balance of the Mortgage Loans; (6)
the
applicable Cut-off Date; and (7) the applicable Closing Date.
Mortgage Note: The note or other evidence of the indebtedness of
a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to a Mortgage Loan that is not
a
Co-op Loan, the Mortgagor's real property securing repayment of a
related
Mortgage Note, consisting of an unsubordinated estate in fee simple
or, with
respect to real property located in jurisdictions in which the use
of
leasehold estates for residential properties is a widely-accepted
practice, a
leasehold estate, in a single parcel or multiple parcels of real
property
improved by a Residential Dwelling. With respect to a Co-op Loan,
the stock
allocated to a dwelling unit in the residential cooperative
housing
corporation that was pledged to secure such Co-op Loan and the
related Co-op
Lease.
Mortgagor: The obligor on the related Mortgage Note.
Nonrecoverable Advance: Any advance previously made or proposed to
be
made in respect of a Mortgage Loan which, in the good faith
judgment of the
Interim Servicer, will not or, in the case of a proposed advance,
would not,
be ultimately recoverable from related Insurance Proceeds,
Liquidation
Proceeds or otherwise. The determination by the Interim Servicer
that it has
made a Nonrecoverable Advance or that any proposed advance of
principal and
interest, if made, would constitute a Nonrecoverable Advance, shall
be
evidenced by an Officers' Certificate delivered to the
Purchaser.
Officer's Certificate: A certificate signed by the Chairman of
the
Board or the Vice Chairman of the Board or a President or a Vice
President and
by the Treasurer or the Secretary or one of the Assistant
Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser
as
required by this Agreement.
Periodic Rate Cap: The provision of each Mortgage Note related to
an
Adjustable Rate Mortgage Loan which provides for an absolute
maximum amount by
which the Mortgage Interest Rate therein may increase or decrease
on an
Interest Rate Adjustment Date above or below the Mortgage Interest
Rate
previously in effect. The Periodic Rate Cap for each Adjustable
Rate Mortgage
Loan is the rate set forth as such on the related Mortgage Loan
Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate
Mortgage
Loan, the provision of each Mortgage Note which provides for an
absolute
maximum amount by which the Mortgage Interest Rate therein may
decrease on an
Interest Rate Adjustment Date below the Mortgage Interest Rate
previously in
effect.
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Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company,
trust,
unincorporated organization, government or any agency or political
subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by
an insurer acceptable under the Underwriting Guidelines and
qualified to do
business in the jurisdiction where the Mortgaged Property is
located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the amount
of
any premium or penalty required to be paid by the Mortgagor if the
Mortgagor
prepays such Mortgage Loan as provided in the related Mortgage Note
or
Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a
Mortgage Loan which is received in advance of its scheduled Due
Date,
including any Prepayment Penalty thereon, and which is not
accompanied by an
amount of interest representing scheduled interest due on any date
or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by
the
Purchaser to the Seller in exchange for the Mortgage Loans
purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Those certain agreements
setting
forth the general terms and conditions of the transactions
consummated herein
and identifying the Mortgage Loans to be purchased from time to
time
hereunder, by and between the Seller and the Purchaser.
Purchaser: Morgan Stanley Mortgage Capital Inc., a New York
corporation, and its successors in interest and assigns, or any
successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller,
who
had no interest, direct or indirect, in the Mortgaged Property or
in any loan
made on the security thereof, and whose compensation was not
affected by the
approval or disapproval of the Mortgage Loan, and such appraiser
and the
appraisal made by such appraiser both satisfied the requirements of
Title XI
of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989
and the regulations promulgated thereunder, all as in effect on the
date the
Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller
purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the
Seller and
such Person that contemplated that such Person would underwrite
mortgage loans
from time to time, for sale to the Seller, in accordance with
underwriting
guidelines designated by the Seller ("Designated Guidelines") or
guidelines
that do not vary materially from such Designated Guidelines; (ii)
such
Mortgage Loans were in fact underwritten as described in clause (i)
above and
were acquired by the Seller within 180 days after origination;
(iii) either
(x) the Designated Guidelines were, at the time such
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Mortgage Loans were originated, used by the Seller in origination
of mortgage
loans of the same type as the Mortgage Loans for the Seller's own
account or
(y) the Designated Guidelines were, at the time such Mortgage Loans
were
underwritten, designated by the Seller on a consistent basis for
use by
lenders in originating mortgage loans to be purchased by the
Seller; and (iv)
the Seller employed, at the time such Mortgage Loans were acquired
by the
Seller, pre-purchase or post-purchase quality assurance procedures
(which may
involve, among other things, review of a sample of mortgage loans
purchased
during a particular time period or through particular channels)
designed to
ensure that Persons from which it purchased mortgage loans properly
applied
the underwriting criteria designated by the Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to
be
substituted by the Seller for a Deleted Mortgage Loan which must,
on the date
of such substitution, be approved by the Purchaser and (i) have an
unpaid
principal balance, after deduction of all scheduled payments due in
the month
of substitution (or in the case of a substitution of more than one
mortgage
loan for a Deleted Mortgage Loan, an aggregate principal balance),
not in
excess of the unpaid principal balance of the Deleted Mortgage Loan
(the
amount of any shortfall will be deposited in the Custodial Account
by the
Seller in the month of substitution); (ii) have a Mortgage Interest
Rate not
less than and not more than one percent (1%) greater than the
Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining
term to
maturity not greater than and not more than one (1) year less than
that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted
Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest
Rate Cap and
Index); (v) comply as of the date of substitution with each
representation and
warranty set forth in Section 9 of this Agreement; (vi) be current
in the
payment of principal and interest; (vii) be secured by a Mortgaged
Property of
the same type and occupancy status as secured the Deleted Mortgage
Loan; and
(viii) have payment terms that do not vary in any material respect
from those
of the Deleted Mortgage Loan.
Rate/Term Refinance: A refinanced Mortgage Loan, in which the
proceeds received were not in excess of the amount of funds
required to repay
the principal balance of any existing first mortgage loan on the
related
Mortgaged Property, pay related closing costs and satisfy any
outstanding
subordinate mortgages on the related Mortgaged Property, as
determined in
accordance with Seller's Underwriting Guidelines.
Reconstitution: Any Securitization Transaction or a Whole Loan
Transfer.
Reconstitution Agreements: As defined in Section 13 hereof.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to
time, and subject to such clarification and interpretation as have
been
provided by the Commission in the adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(January 7,
2005)) or by the staff of the Commission, or as may be provided by
the
Commission or its staff from time to time.
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REMIC: A "real estate mortgage investment conduit" within the
meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating
to a REMIC, which appear at Section 860A through 860G of Subchapter
M of
Chapter 1, Subtitle A of the Code, and related provisions and
regulations,
rulings or pronouncements promulgated thereunder, as the foregoing
may be in
effect from time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified
therein).
Repurchase Price: As defined in the related Purchase Price and
Terms
Agreement.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a
one-family dwelling unit in a condominium project or (iv) a
one-family
dwelling in a planned unit development, none of which is a
co-operative,
mobile or manufactured home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to
time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1)
a
sale or other transfer of some or all of the Mortgage Loans
directly or
indirectly to an issuing entity in connection with an issuance of
publicly
offered or privately placed, rated or unrated mortgage-backed
securities or
(2) an issuance of publicly offered or privately placed, rated or
unrated
securities, the payments on which are determined primarily by
reference to one
or more portfolios of residential mortgage loans consisting, in
whole or in
part, of some or all of the Mortgage Loans.
Security Agreement: The agreement creating a security interest in
the
stock allocated to a dwelling unit in the residential cooperative
housing
corporation that was pledged to secure such Co-op Loan and the
related Co-op
Lease.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Seller Information: As defined in Subsection 34.04(a).
Servicing Fee: With respect to each Mortgage Loan, a fee
payable
monthly equal to one-twelfth of the product of (a) the Servicing
Fee Rate and
(b) the outstanding principal balance of such Mortgage Loan. Such
fee shall be
payable monthly and shall be pro-rated for any portion of a month
during which
the Mortgage Loan is serviced by the Seller under this Agreement.
The
obligation of the Purchaser to pay the Servicing Fee is limited to,
and the
Servicing Fee is payable solely from, the interest portion
(including
recoveries with respect to interest from Liquidation Proceeds, to
the extent
permitted by this Agreement) of such Monthly Payment collected by
the Seller,
or as otherwise provided under this Agreement.
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Servicing Fee Rate: An amount per annum as set forth in the
related
Purchase Price and Terms Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained
by the Interim Servicer consisting of originals of all documents in
the
Mortgage File which are not delivered to the Purchaser or the
Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the
Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies
received
by the Seller for servicing the Mortgage Loans; (c) any late fees,
penalties
or similar payments with respect to the Mortgage Loans; (d) all
agreements or
documents creating, defining or evidencing any such servicing
rights to the
extent they relate to such servicing rights and all rights of the
Seller
thereunder; (e) Escrow Payments or other similar payments with
respect to the
Mortgage Loans and any amounts actually collected by the Seller
with respect
thereto; (f) all accounts and other rights to payment related to
any of the
property described in this paragraph; and (g) any and all
documents, files,
records, servicing files, servicing documents, servicing records,
data tapes,
computer records, or other information pertaining to the Mortgage
Loans or
pertaining to the past, present or prospective servicing of the
Mortgage
Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB,
with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of
The McGraw-Hill Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary,
as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan on any date
of
determination, (i) the principal balance of such Mortgage Loan at
the related
Cut-off Date after giving effect to payments of principal due on or
before
such date, to the extent actually received, minus (ii) all amounts
previously
distributed to the Purchaser with respect to the related Mortgage
Loan
representing payments or recoveries of principal on such Mortgage
Loan.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of
the
indemnifications set forth in Subsections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the
Seller.
Transfer Date: The date on which the Purchaser, or its
designee,
shall receive the transfer of servicing responsibilities and begin
to perform
the servicing of the Mortgage Loans with respect to the related
Mortgage Loan
Package, and the Interim Servicer shall cease all servicing
responsibilities.
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Underwriting Guidelines: The underwriting guidelines of the Seller,
a
copy of which is attached as an exhibit to the related Assignment
and
Conveyance.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees
to purchase from time to time, Mortgage Loans having an aggregate
principal
balance on the related Cut-off Date in an amount as set forth in
the related
Purchase Price and Terms Agreement, or in such other amount as
agreed by the
Purchaser and the Seller as evidenced by the actual aggregate
principal
balance of the Mortgage Loans accepted by the Purchaser on each
Closing Date,
together with the related Mortgage Files and all rights and
obligations
arising under the documents contained therein.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain
information constituting a preliminary listing of the Mortgage
Loans to be
purchased on each Closing Date in accordance with the related
Purchase Price
and Terms Agreement and this Agreement (each, a "Preliminary
Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for
the
Mortgage Loans to be purchased on a particular Closing Date to the
Purchaser
at least five (5) Business Days prior to the related Closing Date.
The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage
Schedule with
those Mortgage Loans which have not been funded prior to the
related Closing
Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage
of
par as stated in the related Purchase Price and Terms Agreement
(subject to
adjustment as provided therein), multiplied by the aggregate
principal
balance, as of the related Cut-off Date, of the Mortgage Loans
listed on the
related Mortgage Loan Schedule, after application of scheduled
payments of
principal due on or before the related Cut-off Date, whether or not
received
by the Seller. The initial principal amount of the related Mortgage
Loans
shall be the aggregate principal balance of the Mortgage Loans, so
computed as
of the related Cut-off Date. If so provided in the related Purchase
Price and
Terms Agreement, portions of the Mortgage Loans shall be priced
separately.
In addition to the Purchase Price as described above, the
Purchaser
shall pay to the Seller, on the related Closing Date, accrued
interest on the
current principal amount of the related Mortgage Loans as of the
related
Cut-off Date at the weighted average Mortgage Interest Rate of
those Mortgage
Loans. The Purchase Price plus accrued interest as set forth in
the
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preceding paragraph shall be paid to the Seller by wire transfer
of
immediately available funds to an account designated by the Seller
in writing.
Upon Seller's receipt of the related Purchase Price, the
Purchaser
shall be entitled to (1) all scheduled principal due after the
related Cut-off
Date, (2) all other recoveries of principal collected on or after
the related
Cut-off Date, and (3) all payments of interest on the Mortgage
Loans net of
applicable Servicing Fees (minus that portion of any such payment
which is
allocable to the period prior to the related Cut-off Date). The
outstanding
principal balance of each Mortgage Loan as of the related Cut-off
Date is
determined after application of payments of principal due on or
before the
related Cut-off Date, to the extent actually collected, together
with any
unscheduled principal prepayments collected prior to such Cut-off
Date;
provided, however, that payments of scheduled principal and
interest paid
prior to such Cut-off date, but to be applied on a Due Date beyond
the related
Cut-off Date shall not be applied to the principal balance as of
the related
Cut-off Date. Such prepaid amounts shall be the property of the
Purchaser. The
Seller shall deposit any such prepaid amounts into the Custodial
Account,
which account is established for the benefit of the Purchaser for
subsequent
remittance by the Seller to the Purchaser..
SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing
Date,
the Seller shall (a) deliver to the Purchaser or its designee in
escrow, for
examination with respect to each Mortgage Loan to be purchased, the
related
Mortgage File, including a copy of the Assignment of Mortgage,
pertaining to
each Mortgage Loan, or (b) make the related Mortgage File available
to the
Purchaser for examination at such other location as shall otherwise
be
acceptable to the Purchaser. Such examination may be made by the
Purchaser or
its designee at any reasonable time before or after the related
Closing Date.
If the Purchaser makes such examination prior to the related
Closing Date and
determines, in its sole reasonable discretion, that any Mortgage
Loans do not
conform to the requirements of this Agreement and/or the related
Purchase
Price and Terms Agreement, the Purchaser shall provide notice to
the Seller
describing such defect. The Seller, at its option, may cure the
defect or the
applicable Mortgage Loans shall be deleted from the related
Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage
Loan (or
Loans) acceptable to the Purchaser. The Purchaser may, at its
option and
without notice to the Seller, purchase some or all of the Mortgage
Loans
without conducting any partial or complete examination. The fact
that the
Purchaser or its designee has conducted or has failed to conduct
any partial
or complete examination of the Mortgage Files shall not affect the
Purchaser's
(or any of its successor's) rights to demand repurchase,
substitution or other
relief as provided herein.
Each of the Purchaser and the Seller agree that all mortgage
loan
application documents requiring the Mortgagor's signature and other
related
documents and disclosures may be provided by the Seller and
executed by the
Mortgagor, as applicable, electronically in compliance with the
federal
Electronic Signatures in Global and National Commerce Act and the
state
Uniform Electronic Transactions Acts, as applicable.
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SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller shall, simultaneously with the delivery of the
Mortgage
Loan Schedule with respect to the related Mortgage Loan Package to
be
purchased on each Closing Date, execute and deliver an Assignment
and
Conveyance Agreement in the form attached hereto as Exhibit H (the
"Assignment
and Conveyance Agreement") and, upon Seller's receipt of the
Purchase Price,
ownership of the related Mortgage Loan shall vest in the Purchaser.
The Seller
shall ensure that the contents of each Servicing File, which is
required to be
retained by or delivered to the Interim Servicer to service the
Mortgage Loans
pursuant to the Interim Servicing Agreement and thus not delivered
to the
Purchaser, or its designee, are and shall be held in trust by the
Interim
Servicer for the benefit of the Purchaser as the owner thereof. The
Seller
agrees that the Interim Servicer's possession of any portion of
each such
Mortgage File is at the will of the Purchaser for the sole purpose
of
facilitating servicing of the Mortgage Loans pursuant to this
Agreement, and
such retention and possession by the Interim Servicer shall be in a
custodial
capacity only. The ownership of each Mortgage Note, each Mortgage
and the
contents of each Mortgage File is vested in the Purchaser and the
ownership of
all records and documents with respect to the related Mortgage Loan
prepared
by or which come into the possession of the Interim Servicer shall
immediately
vest in the Purchaser and shall be retained and maintained, in
trust, by the
Interim Servicer at the will of the Purchaser in such custodial
capacity only.
The Seller shall cause the Servicing File retained by the Interim
Servicer
pursuant to this Agreement to be appropriately identified in the
Seller's
computer system and/or books and records, as appropriate, to
clearly reflect
the sale of the related Mortgage Loan to the Purchaser. The Seller
shall cause
the Interim Servicer to release from its custody the contents of
any Servicing
File retained by it only in accordance with this Agreement or the
Interim
Servicing Agreement, except when such release is required in
connection with a
repurchase of any such Mortgage Loan pursuant to Subsection 9.03 or
if
required under applicable law or court order
Subsection 6.02 Books and Records.
Record title to each Mortgage and the related Mortgage Note as of
the
related Closing Date shall be in the name of the Seller, an
Affiliate of the
Seller, the Purchaser or one or more designees of the Purchaser, as
the
Purchaser shall select; provided, however, that if a Mortgage has
been
recorded in the name of MERS or its designee, the Seller is shown
as the owner
of the related Mortgage Loan on the records of MERS for purposes of
the system
of recording transfers of beneficial ownership of mortgages
maintained by
MERS. Notwithstanding the foregoing, ownership of each Mortgage and
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
or the Interim Servicer after the related Cut-off Date on or in
connection
with a Mortgage Loan shall be vested in the Purchaser or one or
more designees
of the Purchaser; provided, however, that all funds received on or
in
connection with a Mortgage Loan shall be received and held by the
Seller or
the Interim Servicer in trust for the benefit of the Purchaser or
the
appropriate designee of the Purchaser, as the case may be, as the
owner of the
Mortgage Loans pursuant to the terms of this Agreement.
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The Seller shall be responsible for maintaining, and shall
maintain,
a complete set of books and records for each Mortgage Loan which
shall be
marked clearly to reflect the ownership of each Mortgage Loan by
the
Purchaser. In particular, the Seller shall maintain in its
possession,
available for inspection by the Purchaser, and shall deliver to the
Purchaser
upon demand, evidence of compliance with all federal, state and
local laws,
rules and regulations, and requirements of Fannie Mae or Freddie
Mac,
including but not limited to documentation as to the method used
in
determining the applicability of the provisions of the National
Flood
Insurance Act of 1968, as amended, to the Mortgaged Property,
documentation
evidencing insurance coverage and periodic inspection reports, as
required by
the Fannie Mae Guides. To the extent that original documents are
not required
for purposes of realization of Liquidation Proceeds or Insurance
Proceeds,
documents maintained by the Seller may be in the form of microfilm
or
microfiche so long as the Seller complies with the requirements of
the Fannie
Mae Guides.
It is the express intention of the parties that the
transactions
contemplated by this Agreement be, and be construed as, a sale of
the related
Mortgage Loans by the Seller and not a pledge of such Mortgage
Loans by the
Seller to the Purchaser to secure a debt or other obligation of the
Seller.
Consequently, the sale of each Mortgage Loan shall be reflected as
a purchase
on the Purchaser's business records, tax returns and financial
statements, and
as a sale of assets on the Seller's business records, tax returns
and
financial statements.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later
than
two (2) Business Days prior to the related Closing Date those
Mortgage Loan
Documents set forth on Exhibit A-2 hereto with respect to each
Mortgage Loan
set forth on the related Mortgage Loan Schedule.
The Purchaser acknowledges that the Seller may deliver the
Mortgage
Loan Documents to the Custodian and the Purchaser in the form of
copies
reproduced from electronic images of original documents ("Original
Documents")
stored on CD ROM or magnetic tape ("Imaged Documents"), not to
include any
documents the originals of which are required to be delivered
pursuant to this
Agreement.
The Seller shall promptly, upon the reasonable request of the
Purchaser and at the Seller's expense, produce true, correct,
complete, clear
and legible copies of the Original Documents or a certified true
copy of the
Original Documents regarding any Original Document for which the
Imaged
Document is unclear, illegible, incorrect, incomplete, unable to
be
transmitted or electronically read or downloaded by Purchaser, or
an untrue
copy. Seller shall, upon Purchaser's reasonable request and at
Seller's
expense, fully cooperate with Purchaser and take any reasonable and
customary
actions in connection with the introduction into evidence of any
Imaged
Document in any judicial or administrative proceeding, including,
but not
limited to, an arbitration or mediation, including producing
appropriate
qualified and knowledgeable personnel to testify as necessary to
qualify the
Imaged Documents as evidence.
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
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evidenced by the Initial Certification of the Custodian in the form
annexed to
the Custodial Agreement. The Purchaser shall pay all fees and
expenses of the
Custodian.
The Seller shall forward to the Custodian, or to such other Person
as
the Purchaser shall designate in writing, original documents
evidencing an
assumption, modification, consolidation or extension of any
Mortgage Loan
entered into in accordance with this Agreement within two weeks of
their
execution, provided, however, that the Seller shall provide the
Custodian, or
to such other Person as the Purchaser shall designate in writing,
with a
certified true copy of any such document submitted for recordation
within two
weeks of its execution, and shall promptly provide the original of
any
document submitted for recordation or a copy of such document
certified by the
appropriate public recording office to be a true and complete copy
of the
original within one hundred twenty days of its submission for
recordation.
In the event any document required to be delivered to the
Custodian
in accordance with this Agreement, including an original or imaged
copy of any
document submitted for recordation to the appropriate public
recording office,
is not delivered to the Custodian, or to such other Person as the
Purchaser
shall designate in writing, within 120 days following the related
Closing Date
(other than with respect to the Assignments of Mortgage which shall
be
delivered to the Custodian in blank and recorded subsequently by
the Purchaser
or its designee, provided that the foregoing proviso does not apply
to the
MERS Designated Loans, and in the event that the Seller does not
cure such
failure within 30 days of discovery or receipt of written
notification of such
failure from the Purchaser, the related Mortgage Loan shall, upon
the request
of the Purchaser, be repurchased by the Seller at the price and in
the manner
specified in Subsection 9.03. The foregoing repurchase obligation
shall not
apply in the event that the Seller cannot deliver the Mortgage Loan
Documents
as set forth on Exhibit A hereto, submitted for recordation to the
appropriate
public recording office within the specified period due to a delay
caused by
the recording office in the applicable jurisdiction; provided that
the Seller
shall instead deliver a recording receipt, or an imaged copy
thereof, as
applicable, of such recording office or, if such recording receipt
is not
available, an officer's certificate of a servicing officer of the
Seller,
confirming that such documents have been accepted for recording;
provided
that, upon request of the Purchaser and delivery by the Purchaser
to the
Seller of a schedule of the related Mortgage Loans, the Seller
shall reissue
and deliver to the Purchaser or its designee said officer's
certificate.
The Seller shall pay all initial recording fees, if any, for
the
Assignments of Mortgage and any other fees or costs in transferring
all
Mortgage Loan Documents to the Custodian or, upon written request
of the
Purchaser, to the Purchaser or the Purchaser's designee. The
Purchaser or the
Purchaser's designee shall be responsible for recording the
Assignments of
Mortgage (with respect to the Mortgage Loans other than the MERS
Designated
Loans) and shall be reimbursed by the Seller for the costs
associated
therewith pursuant to the preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the
legal
documents, credit documents, property appraisals, and underwriting
decisions.
The program shall include evaluating and monitoring the overall
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quality of the Seller's loan production and the servicing
activities of the
Seller as Interim Servicer. The program is to ensure that the
Mortgage Loans
are originated in accordance with the Underwriting Guidelines;
guard against
dishonest, fraudulent, or negligent acts; and guard against errors
and
omissions by officers, employees, or other authorized persons.
Subsection 6.05 MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall,
on the first Business Day following the related Closing Date,
designate the
Purchaser as the Investor and the Custodian as custodian, and no
Person shall
be listed as Interim Funder on the MERS System. In addition, on or
prior to
the related Closing Date, Seller shall provide the Custodian and
the Purchaser
with a MERS Report listing the Purchaser as the Investor, the
Custodian as
custodian and no Person as Interim Funder with respect to each MERS
Designated
Mortgage Loan.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a
servicing released basis. Subject to and upon the terms and
conditions of this
Agreement and the Interim Servicing Agreement (with respect to each
Mortgage
Loan, for an interim period, as specified therein), the Seller
hereby sells,
transfers, assigns, conveys and delivers to the Purchaser the
Servicing
Rights.
The Purchaser shall retain the Seller as Interim Servicer as
contract
servicer of the Mortgage Loans for an interim period pursuant to
and in
accordance with the terms and conditions contained in the Interim
Servicing
Agreement (with respect to each Mortgage Loan, for an interim
period, as
specified therein). The Seller shall execute the Interim Servicing
Agreement
on the initial Closing Date.
The Seller shall transfer the servicing of the Mortgage Loans on
each
Transfer Date in accordance with the terms of the Interim Servicing
Agreement.
SECTION 8. Representations and Warranties Regarding the
Purchaser.
The Purchaser represents, warrants and covenants to the Seller
that
as of each Closing Date:
(a) Due Organization and Authority. The Purchaser is a
corporation
duly organized, validly existing and in good standing under the
laws of the
state of New York and has all licenses necessary to carry on its
business as
now being conducted. The execution, delivery and performance of
this Agreement
by the Purchaser and the consummation of the transactions
contemplated hereby
and thereby have been duly and validly authorized; this Agreement
and all
agreements contemplated hereby have been duly executed and
delivered and
constitute the valid, legal, binding and enforceable obligations of
the
Purchaser, regardless of whether such enforcement is sought in a
proceeding in
equity or at law; and all requisite corporate action has been taken
by the
Purchaser to make this Agreement and all agreements contemplated
hereby valid
and binding upon the Purchaser in accordance with their terms;
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<PAGE>
(b) No Conflicts. Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby
and
thereby, nor the fulfillment of or compliance with the terms and
conditions of
this Agreement, will conflict with or result in a breach of any of
the terms,
conditions or provisions of the Purchaser's charter or by-laws or
any legal
restriction or any agreement or instrument to which the Purchaser
is now a
party or by which it is bound;
(c) No Litigation Pending. No litigation or administrative
proceeding
of or before any court, tribunal or governmental body is currently
pending or
to the knowledge of the Purchaser threatened, against the Purchaser
or with
respect to this Agreement, which if adversely determined would have
a material
adverse effect on the transactions contemplated by this
Agreement;
(d) No Consent Required. No consent, approval, authorization or
order
of, or registration or filing with, or notice to any court or
governmental
agency or body is required for the execution, delivery and
performance by the
Purchaser of or compliance by the Purchaser with this Agreement or
the
consummation of the transactions contemplated by this Agreement, or
if
required, such approval has been obtained prior to the related
Closing Date;
(e) No Brokers. The Seller has not dealt with any broker,
investment
banker, agent or other person that may be entitled to any
commission or
compensation in connection with the sale of the Mortgage Loans;
(f) Ordinary Course of Business. The consummation of the
transactions
contemplated by this Agreement is in the ordinary course of
business of the
Purchaser; and
(g) Privacy. Purchaser agrees and acknowledges that as to all
nonpublic personal information received or obtained by it with
respect to any
related Mortgagor: (i) such information is and shall be held by
Purchaser in
accordance with all applicable law, including but not limited to
the privacy
provisions of the Gramm-Leach-Bliley Act; (ii) such information is
received in
connection with a proposed or actual secondary market sale related
to a
transaction of the Mortgagor for purposes of 16
C.F.R.ss.313.14(a)(3); and
(iii) Purchaser is hereby prohibited from disclosing or using any
such
information other than to carry out the express provisions of this
Agreement,
or as otherwise permitted by applicable law;
SECTION 9. Representations, Warranties and Covenants of the
Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser
that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a Michigan
corporation, validly existing, and in good standing under the laws
of its
jurisdiction of incorporation or formation and has all licenses
necessary to
carry on its business as now being conducted and is licensed,
qualified and in
good standing in the states where the Mortgaged Property is located
if
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the laws of such state require licensing or qualification in order
to conduct
business of the type conducted by the Seller. The Seller has
corporate power
and authority to execute and deliver this Agreement and to perform
its
obligations hereunder; the execution, delivery and performance of
this
Agreement (including all instruments of transfer to be delivered
pursuant to
this Agreement) by the Seller and the consummation of the
transactions
contemplated hereby have been duly and validly authorized; this
Agreement has
been duly executed and delivered and constitutes the valid, legal,
binding and
enforceable obligation of the Seller, except as enforceability may
be limited
by (i) bankruptcy, insolvency, liquidation, receivership,
moratorium,
reorganization or other similar laws affecting the enforcement of
the rights
of creditors and (ii) general principles of equity, whether
enforcement is
sought in a proceeding in equity or at law. All requisite corporate
action has
been taken by the Seller to make this Agreement valid and binding
upon the
Seller in accordance with its terms;
(b) No Consent Required. No consent, approval, authorization or
order
is required for the transactions contemplated by this Agreement
from any
court, governmental agency or body, or federal or state regulatory
authority
having jurisdiction over the Seller is required or, if required,
such consent,
approval, authorization or order has been or will, prior to the
related
Closing Date, be obtained;
(c) Ordinary Course of Business. The consummation of the
transactions
contemplated by this Agreement are in the ordinary course of
business of the
Seller, and the transfer, assignment and conveyance of the Mortgage
Notes and
the Mortgages by the Seller pursuant to this Agreement are not
subject to the
bulk transfer or any similar statutory provisions in effect in any
applicable
jurisdiction;
(d) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by
the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation
of the
transactions contemplated hereby, nor the fulfillment of or
compliance with
the terms and conditions of this Agreement, will conflict with or
result in a
breach of any of the terms, conditions or provisions of the
Seller's charter
or by-laws or any legal restriction or any agreement or instrument
to which
the Seller is now a party or by which it is bound, or constitute a
default or
result in an acceleration under any of the foregoing, or result in
the
violation of any law, rule, regulation, order, judgment or decree
to which the
Seller or its property is subject, or result in the creation or
imposition of
any lien, charge or encumbrance that would have an adverse effect
upon any of
its properties pursuant to the terms of any mortgage, contract,
deed of trust
or other instrument, or impair the ability of the Purchaser to
realize on the
Mortgage Loans, impair the value of the Mortgage Loans, or impair
the ability
of the Purchaser to realize the full amount of any insurance
benefits accruing
pursuant to this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding
or
investigation pending or threatened against the Seller, before any
court,
administrative agency or other tribunal asserting the invalidity of
this
Agreement, seeking to prevent the consummation of any of the
transactions
contemplated by this Agreement or which, either in any one instance
or in the
aggregate, may result in any material adverse change in the
business,
operations, financial condition, properties or assets of the
Seller, or in any
material impairment of the right or ability of the Seller to carry
on its
business substantially as now conducted, or in any material
liability on the
part of the Seller, or which would draw into question the validity
of this
Agreement or the
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<PAGE>
Mortgage Loans or of any action taken or to be taken in connection
with the
obligations of the Seller contemplated herein, or which would be
likely to
impair materially the ability of the Seller to perform under the
terms of this
Agreement;
(f) Ability to Perform; Solvency. The Seller does not believe,
nor
does it have any reason or cause to believe, that it cannot perform
each and
every covenant contained in this Agreement. The Seller is solvent
and the sale
of the Mortgage Loans will not cause the Seller to become
insolvent. The sale
of the Mortgage Loans is not undertaken with the intent to hinder,
delay or
defraud any of Seller's creditors;
(g) Seller's Origination. The Seller's decision to originate
any
mortgage loan or to deny any mortgage loan application is an
independent
decision based upon the Underwriting Guidelines, and is in no way
made as a
result of Purchaser's decision to purchase, or not to purchase, or
the price
Purchaser may offer to pay for, any such mortgage loan, if
originated;
(h) Anti-Money Laundering Laws. The Seller has complied with
all
applicable anti-money laundering laws, executive orders and
regulations,
including without limitation the USA Patriot Act of 2001
(collectively, the
"Anti-Money Laundering Laws"); the Seller has established an
anti-money
laundering compliance program as required by the Anti-Money
Laundering Laws,
has conducted the requisite due diligence in connection with the
origination
of each Mortgage Loan for purposes of the Anti-Money Laundering
Laws,
including with respect to the legitimacy of the applicable
Mortgagor and the
origin of the assets used by the said Mortgagor to purchase the
property in
question, and maintains, and will maintain, sufficient information
to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering
Laws;
(i) Financial Statements. The Seller has delivered to the
Purchaser
financial statements as to its last two complete fiscal years and
any later
quarter ended more than 60 days prior to the execution of this
Agreement. All
such financial statements fairly present the pertinent results of
operations
and material changes in financial position for each of such periods
and the
financial position at the end of each such period of the Seller and
its
subsidiaries and have been prepared in accordance with generally
accepted
accounting principles consistently applied throughout the periods
involved,
except as set forth in the notes thereto. There has been no change
in the
business, operations, financial condition, properties or assets of
the Seller
since the date of the Seller's financial statements that would have
a material
adverse effect on its ability to perform its obligations under this
Agreement.
The Seller has completed any forms requested by the Purchaser in a
timely
manner and in accordance with the provided instructions;
(j) Selection Process. The Mortgage Loans were selected from
among
the outstanding one- to four-family mortgage loans in the Seller's
portfolio
at the related Closing Date as to which the representations and
warranties set
forth in Subsection 9.02 could be made and such selection was not
made in a
manner so as to affect adversely the interests of the
Purchaser;
(k) Delivery to the Custodian. The Mortgage Note, the Mortgage,
the
Assignment of Mortgage and any other documents required to be
delivered with
respect to each
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<PAGE>
Mortgage Loan shall be delivered to the Custodian all in compliance
with the
specific requirements of this Agreement. With respect to each
Mortgage Loan,
the Seller will be in possession of a complete Mortgage File in
compliance
with Exhibit A hereto, except for such documents as will be
delivered to the
Custodian;
(l) Mortgage Loan Characteristics. The characteristics of the
related
Mortgage Loan Package are as set forth on the description of the
pool
characteristics for the applicable Mortgage Loan Package delivered
pursuant to
Section 11 on the related Closing Date in the form attached as
Exhibit B to
each related Assignment and Conveyance Agreement;
(m) No Untrue Information. To the Seller's knowledge, neither
this
Agreement nor any information, statement, tape, diskette, report,
form, or
other document furnished or to be furnished pursuant to this
Agreement or in
connection with the transactions contemplated hereby (including
any
Securitization Transaction or Whole Loan Transfer) contains or will
contain
any untrue statement of fact or omits or will omit to state a fact
necessary
to make the statements contained herein or therein not
misleading;
(n) No Brokers. The Seller has not dealt with any broker,
investment
banker, agent or other person that may be entitled to any
commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale Treatment. The Seller expects to be advised by its
independent certified public accountants that under generally
accepted
accounting principles the transfer of the Mortgage Loans will be
treated as a
sale on the books and records of the Seller and the Seller has
determined that
the disposition of the Mortgage Loans pursuant to this Agreement
will be
afforded sale treatment for tax and accounting purposes;
(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note,
except for the
Assignments of Mortgage which have been sent for recording, and
upon
recordation the Seller will be the owner of record of each Mortgage
and the
indebtedness evidenced by each Mortgage Note, and upon the sale of
the
Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files
with respect thereto in trust only for the purpose of servicing
and
supervising the servicing of each Mortgage Loan;
(q) Reasonable Purchase Price. The consideration received by
the
Seller upon the sale of the Mortgage Loans under this Agreement
constitutes
fair consideration and reasonably equivalent value for the Mortgage
Loans;
(r) Ability to Service. The Seller is an approved servicer of
conventional residential mortgage loans for Fannie Mae or Freddie
Mac, with
the facilities, procedures, and experienced personnel necessary for
the sound
servicing of mortgage loans of the same type as the Mortgage Loans.
The Seller
is in good standing to enforce and sell mortgage loans to and
service mortgage
loans in the jurisdictions wherein the Mortgaged Properties are
located and
for Fannie Mae or Freddie Mac, and 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 or Freddie
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<PAGE>
Mac eligibility requirements or which would require notification to
either
Fannie Mae or Freddie Mac;
(s) Reasonable Servicing Fee. The Seller acknowledges and agrees
that
the Servicing Fee represents reasonable compensation for performing
such
services and that the entire Servicing Fee shall be treated by the
Seller, for
accounting and tax purposes, as compensation for the servicing
and
administration of the Mortgage Loans pursuant to this Agreement;
and
(t) Fair Credit Reporting Act. The Seller has fully furnished
(or
caused to be furnished), in accordance with the Fair Credit
Reporting Act and
its implementing regulations, accurate and complete information
(e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian
and Trans Union Credit Information Company, or any their successors
and
assigns (three of the credit repositories), on a monthly basis.
Subsection 9.02 Representations and Warranties Regarding
Individual
Mortgage Loans. The Seller hereby represents and warrants to the
Purchaser
that, as to each Mortgage Loan, as of the related Closing Date for
such
Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in
the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to
the
related Closing Date for the Mortgage Loan under the terms of the
Mortgage
Note have been made and credited. No payment required under the
Mortgage Loan
is 30 days or more delinquent nor has any payment under the
Mortgage Loan been
30 days or more delinquent at any time since the origination of the
Mortgage
Loan;
(c) No Outstanding Charges. There are no defaults in complying
with
the terms of the Mortgage, and all taxes, governmental assessments,
insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground
rents which previously became due and owing have been paid, or an
escrow of
funds has been established in an amount sufficient to pay for every
such item
which remains unpaid and which has been assessed but is not yet due
and
payable. The Seller has not advanced funds, or induced, solicited
or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or
indirectly, for the payment of any amount required under the
Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or
date of
disbursement of the Mortgage Loan proceeds, whichever is earlier,
to the day
which precedes by one month the related Due Date of the first
installment of
principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note
and
Mortgage have not been impaired, waived, altered or modified in any
respect,
from the date of origination except by a written instrument which
has been
recorded, if necessary to protect the interests of the Purchaser,
and which
has been delivered to the Custodian or to such other Person as the
Purchaser
shall designate in writing, and the terms of which are reflected in
the
related Mortgage Loan Schedule. The substance of any such waiver,
alteration
or modification has been approved by the issuer of any related PMI
Policy and
the title insurer, if any, to the extent
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<PAGE>
required by the policy, and its terms are reflected on the related
Mortgage
Loan Schedule, if applicable. No Mortgagor has been released, in
whole or in
part, except in connection with an assumption agreement, approved
by the
issuer of any related PMI Policy and the title insurer, to the
extent required
by the policy, and which assumption agreement is part of the
Mortgage Loan
File delivered to the Custodian or to such other Person as the
Purchaser shall
designate in writing and the terms of which are reflected in the
related
Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right
of
rescission, set-off, counterclaim or defense, including without
limitation the
defense of usury, nor will the operation of any of the terms of the
Mortgage
Note or the Mortgage, or the exercise of any right thereunder,
render either
the Mortgage Note or the Mortgage unenforceable, in whole or in
part, or
subject to any right of rescission, set-off, counterclaim or
defense,
including without limitation the defense of usury, and no such
right of
rescission, set-off, counterclaim or defense has been asserted with
respect
thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage,
all
buildings or other improvements upon the Mortgaged Property are
insured by a
generally acceptable insurer against loss by fire, hazards of
extended
coverage and such other hazards as are provided for in the
Underwriting
Guidelines. If required by the National Flood Insurance Act of
1968, as
amended, each Mortgage Loan is covered by a flood insurance policy
meeting the
requirements of the current guidelines of the Federal Insurance
Administration
as in effect which policy conforms with the Underwriting
Guidelines. All
individual insurance policies contain a provision that names the
Purchaser and
its successors and assigns as mortgagee upon the transfer of the
Mortgage File
to the Custodian, and all premiums thereon have been paid. The
Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance
policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to
do so,
authorizes the holder of the Mortgage to obtain and maintain such
insurance at
such Mortgagor's cost and expense, and to seek reimbursement
therefor from the
Mortgagor. Where required by state law or regulation, the Mortgagor
has been
given an opportunity to choose the carrier of the required hazard
insurance,
provided the policy is not a "master" or "blanket" hazard insurance
policy
covering a condominium, or any hazard insurance policy covering the
common
facilities of a planned unit development. The hazard insurance
policy is the
valid and binding obligation of the insurer, is in full force and
effect, and
will be in full force and effect and inure to the benefit of the
Purchaser
upon the consummation of the transactions contemplated by this
Agreement. The
Seller has not engaged in, and has no knowledge of the Mortgagor's
having
engaged in, any act or omission which would impair the coverage of
any such
policy, the benefits of the endorsement provided for herein, or the
validity
and binding effect of either including, without limitation, no
unlawful fee,
commission, kickback or other unlawful compensation or value of any
kind has
been or will be received, retained or realized by any attorney,
firm or other
person or entity, and no such unlawful items have been received,
retained or
realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
any
federal, state or local law including, without limitation,
usury,
truth-in-lending, real estate settlement procedures, consumer
credit
protection, predatory, abusive and fair lending, equal credit
opportunity and
disclosure laws applicable to the Mortgage Loan, including,
without
limitation, any provisions relating to a Prepayment Penalty have
been complied
with, the consummation of the transactions contemplated hereby will
not
involve the violation of any such
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<PAGE>
laws or regulations, and the Seller shall maintain in its
possession,
available for the Purchaser's inspection, and shall deliver to the
Purchaser
upon demand, evidence of compliance with all such requirements.
This
representation and warranty is a Deemed Material and Adverse
Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied,
canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged
Property has not been released from the lien of the Mortgage, in
whole or in
part, nor has any instrument been executed that would effect any
such release,
cancellation, subordination or rescission. The Seller has not
waived the
performance by the Mortgagor of any action, if the Mortgagor's
failure to
perform such action would cause the Mortgage Loan to be in default,
nor has
the Seller waived any default resulting from any action or inaction
by the
Mortgagor;
(i) Type of Mortgaged Property. With respect to a Mortgage Loan
that
is not a Co-op Loan and is not secured by an interest in a
leasehold estate,
the Mortgaged Property is a fee simple estate that consists of a
single parcel
of real property with a detached single family residence erected
thereon, or a
two- to four-family dwelling, or an individual residential
condominium unit in
a condominium project, or an individual unit in a planned unit
development, or
an individual unit in a residential cooperative housing
corporation; provided,
however, that any condominium unit, planned unit development or
residential
cooperative housing corporation shall conform with the
Underwriting
Guidelines. No portion of the Mortgaged Property (or underlying
Mortgaged
Property, in the case of a Co-op Loan) is used for commercial
purposes, and
since the date of origination, no portion of the Mortgaged Property
has been
used for commercial purposes; provided, that Mortgaged Properties
which
contain a home office shall not be considered as being used for
commercial
purposes as long as the Mortgaged Property has not been altered for
commercial
purposes and is not storing any chemicals or raw materials other
than those
commonly used for homeowner repair, maintenance and/or household
purposes.
None of the Mortgaged Properties are Manufactured Homes, log homes,
mobile
homes, geodesic domes or other unique property types. This
representation and
warranty is a Deemed Material and Adverse Representation;
(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property,
including all
buildings and improvements on the Mortgaged Property and all
installations and
mechanical, electrical, plumbing, heating and air conditioning
systems located
in or annexed to such buildings, and all additions, alterations
and
replacements made at any time with respect to the foregoing. The
lien of the
Mortgage is subject only to:
(i) the lien of current real property taxes and
assessments not yet due and payable;
(ii) covenants, conditions and restrictions, rights of
way, easements and other matters of the public
record as of the date of recording acceptable to
prudent mortgage lending institutions generally and
specifically referred to in the lender's title
insurance policy delivered to the originator of the
Mortgage Loan and (a) specifically
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<PAGE>
referred to or otherwise considered in the
appraisal made for the originator of the Mortgage
Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth
in such appraisal; and
(iii) other matters to which like properties are commonly
subject which do not materially interfere with the
benefits of the security intended to be provided by
the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and
creates a valid, subsisting, enforceable and perfected first lien
and first
priority security interest on the property described therein and
the Seller
has full right to sell and assign the same to the Purchaser.
With respect to any Co-op Loan, the related Mortgage is a
valid,
subsisting and enforceable first priority security interest on the
related
cooperative shares securing the Mortgage Note, subject only to (a)
liens of
the related residential cooperative housing corporation for unpaid
assessments
representing the Mortgagor's pro rata share of the related
residential
cooperative housing corporation's payments for its blanket
mortgage, current
and future real property taxes, insurance premiums, maintenance
fees and other
assessments to which like collateral is commonly subject and (b)
other matters
to which like collateral is commonly subject which do not
materially interfere
with the benefits of the security interest intended to be provided
by the
related Security Agreement;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a
Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal,
valid and
binding obligation of the maker thereof enforceable in accordance
with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance,
reorganization, moratorium, receivership or other laws relating to
or
affecting creditors' rights generally, and to general principles of
equity
(regardless of whether enforcement is sought in a proceeding at law
or in
equity). All parties to the Mortgage Note, the Mortgage and any
other such
related agreement had legal capacity to enter into the Mortgage
Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such
agreement,
and the Mortgage Note, the Mortgage and any other such related
agreement have
been duly and properly executed by other such related parties. No
fraud,
error, omission, misrepresentation, negligence or similar
occurrence with
respect to a Mortgage Loan has taken place on the part of the
Seller in
connection with the origination of the Mortgage Loan or in the
application of
any insurance in relation to such Mortgage Loan. To Seller's
knowledge, the
documents, instruments and agreements submitted for loan
underwriting were not
falsified and contain no untrue statement of material fact or omit
to state a
material fact required to be stated therein or necessary to make
the
information and statements therein not misleading. To Seller's
knowledge, no
fraud, error, omission, misrepresentation, negligence or similar
occurrence
with respect to a Mortgage Loan has taken place on the part of any
Person,
including without limitation, the Mortgagor, any appraiser, any
builder or
developer, or any other party involved in the origination of the
Mortgage Loan
or in the application for any insurance in relation to such
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<PAGE>
Mortgage Loan. The Seller has reviewed all of the documents
constituting the
Servicing File and has made such inquiries as it deems necessary to
make and
confirm the accuracy of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed
and the proceeds of the Mortgage Loan have been fully disbursed and
there is
no requirement for future advances thereunder, and any and all
requirements as
to completion of any on-site or off-site improvement and as to
disbursements
of any escrow funds therefor have been complied with. All costs,
fees and
expenses incurred in making or closing the Mortgage Loan and the
recording of
the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder
of
the Mortgage Loan and the indebtedness evidenced by each Mortgage
Note and
upon the payment of the Purchase Price, as defined in the related
Purchase
Price and Terms Agreement, by the Purchaser, and with respect to
the
applicable Mortgage Loans, the Seller will retain the Mortgage
Files or any
part thereof with respect thereto not delivered to the Custodian,
the
Purchaser or the Purchaser's designee, in trust only for the
purpose of
servicing and supervising the servicing of each Mortgage Loan. The
Mortgage
Loan is not assigned or pledged, and the Seller has good,
indefeasible and
marketable title thereto, and has full right to transfer and sell
the Mortgage
Loan to the Purchaser free and clear of any encumbrance, equity,
participation
interest, lien, pledge, charge, claim or security interest, and has
full right
and authority subject to no interest or participation of, or
agreement with,
any other party, to sell and assign each Mortgage Loan pursuant to
this
Agreement and upon the payment of the Purchase Price, as defined in
the
related Purchase Price and Terms Agreement, by the Purchaser, and
with respect
to the applicable Mortgage Loans, the Purchaser will own such
Mortgage Loan
free and clear of any encumbrance, equity, participation interest,
lien,
pledge, charge, claim or security interest. The Seller intends to
relinquish
all rights to possess, control and monitor the Mortgage Loan,
except as may be
required of the Seller in its capacity as Interim Servicer of such
Mortgage
Loan. Upon the payment of the Purchase Price, as defined in the
related
Purchase Price and Terms Agreement, by the Purchaser, and with
respect to the
applica
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