|
Exhibit 99.12b
SECOND
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
MORGAN
STANLEY MORTGAGE CAPITAL INC.,
Purchaser
LYDIAN
PRIVATE BANK,
Seller
Dated
as of September 1, 2006
Conventional,
Fixed
and Adjustable Rate
Residential
Mortgage Loans
TABLE
OF CONTENTS
Page
|
SECTION
1.
|
DEFINITIONS.
|
1
|
| |
|
|
|
SECTION
2.
|
AGREEMENT
TO PURCHASE.
|
15
|
| |
|
|
|
SECTION
3.
|
MORTGAGE
SCHEDULES.
|
15
|
| |
|
|
|
SECTION
4.
|
PURCHASE
PRICE.
|
15
|
| |
|
|
|
SECTION
5.
|
EXAMINATION
OF MORTGAGE FILES.
|
16
|
| |
|
|
|
SECTION
6.
|
CONVEYANCE
FROM SELLER TO PURCHASER.
|
17
|
| |
|
|
|
SECTION
7.
|
SERVICING
OF THE MORTGAGE LOANS.
|
20
|
| |
|
|
|
SECTION
8.
|
[RESERVED].
|
20
|
| |
|
|
|
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.
|
42
|
| |
|
|
|
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.
|
INTENTION
OF THE PARTIES.
|
48
|
| |
|
|
|
SECTION
21.
|
SUCCESSORS
AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
|
48
|
| |
|
|
|
SECTION
22.
|
WAIVERS.
|
49
|
| |
|
|
|
SECTION
23.
|
EXHIBITS.
|
49
|
| |
|
|
|
SECTION
24.
|
GENERAL
INTERPRETIVE PRINCIPLES.
|
49
|
| |
|
|
|
SECTION
25.
|
REPRODUCTION
OF DOCUMENTS.
|
49
|
| |
|
|
|
SECTION
26.
|
FURTHER
AGREEMENTS.
|
50
|
| |
|
|
|
SECTION
27.
|
RECORDATION
OF ASSIGNMENTS OF MORTGAGE.
|
50
|
| |
|
|
|
SECTION
28.
|
NO
SOLICITATION.
|
50
|
| |
|
|
|
SECTION
29.
|
WAIVER
OF TRIAL BY JURY.
|
51
|
| |
|
|
|
SECTION
30.
|
GOVERNING
LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS.
|
51
|
| |
|
|
|
SECTION
31.
|
AMENDMENT.
|
51
|
| |
|
|
|
SECTION
32.
|
CONFIDENTIALITY.
|
52
|
| |
|
|
|
SECTION
33.
|
ENTIRE
AGREEMENT.
|
52
|
| |
|
|
|
SECTION
34.
|
COMPLIANCE
WITH REGULATION AB.
|
52
|
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
|
FORM
OF OPINION OF COUNSEL TO THE SELLER
|
|
EXHIBIT
G
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
H
|
FORM
OF ASSIGNMENT AND CONVEYANCE AGREEMENT
|
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 September 1, 2006, by and between Morgan Stanley
Mortgage Capital Inc., a New York corporation (the “
Purchaser ”), and Lydian Private Bank, a federal
savings bank (the “ Seller ”).
W I T N
E S S E T
H :
WHEREAS,
the Purchaser and the Seller are parties to that certain
Master Mortgage Loan Purchase and Warranties Agreement, dated
as of May 1, 2005, as amended and restated by that
certain First Amended and Restated Mortgage Loans Purchase and
Warranties Agreement, dated as of September 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 fixed and adjustable 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,
at the present time, the Purchaser and the Seller desire to
amend the Original Purchase Agreement to make certain
modifications with respect to all Mortgage Loans acquired by
the Purchaser pursuant 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 any
Mortgage Loan, those mortgage servicing practices which are in
accordance with accepted mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the
same type as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located.
Act : The National Housing Act, as amended from time
to time.
Adjustable Rate Mortgage Loan : A Mortgage Loan
purchased pursuant to this Agreement, the Mortgage Interest Rate of
which is adjusted from time to time in accordance with the terms of
the related Mortgage Note.
Affiliate : With respect to any specified Person,
any other Person controlling or controlled by or under common
control with such specified Person. For the purposes of
this definition, “control” when used with respect to
any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise and
the terms “controlling” and “controlled”
have meanings correlative to the foregoing.
Agency Transfer : A Fannie Mae Transfer or a Freddie
Mac Transfer.
Agreement : This Second Amended and Restated
Mortgage Loan Purchase and Warranties Agreement including all
exhibits, schedules, 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 individual assignment of
the Mortgage, notice of transfer or equivalent instrument in
recordable form and in blank, sufficient under the laws of the
jurisdiction in which the related Mortgaged Property is located to
give record notice of the sale of the Mortgage to the
Purchaser.
Balloon Mortgage Loan : Any Mortgage Loan
(a) that requires only payments of interest until the stated
maturity date of the Mortgage Loan or (b) for which Monthly
Payments of principal (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be
insufficient to fully amortize the principal thereof by the stated
maturity date of the Mortgage Loan.
Business Day : Any day other than (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 and which provided incidental cash to
the related Mortgagor of more than one percent (1%) (or, if
specified in the related Underwriting Guidelines applicable to such
Mortgage Loan, two percent (2%)) of the original principal balance
of such Mortgage Loan.
Closing Date : The date or dates on which the
Purchaser from time to time shall purchase, and the Seller from
time to time shall sell, the Mortgage Loans listed on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Closing Documents : The documents required to be
delivered on each Closing Date pursuant to Section 11
.
CLTA : The California Land Title
Association.
Code : The Internal Revenue Code of 1986, as
amended, or any successor statute thereto.
Commission : The United States Securities and
Exchange Commission.
Condemnation Proceeds : All awards, compensation and
settlements in respect of a taking of all or part of a Mortgaged
Property, whether permanent or temporary, partial or entire, by
exercise of the power of condemnation or the right of eminent
domain, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan
Documents.
Co-op : A private, cooperative housing corporation,
having only one class of stock outstanding, which owns or leases
land and all or part of a building or buildings, including
apartments, spaces used for commercial purposes and common areas
therein and whose board of directors authorizes the sale of stock
and the issuance of a Co-op Lease.
Co-op Lease : With respect to a Co-op Loan, the
lease with respect to a dwelling unit occupied by the Mortgagor and
relating to the stock allocated to the related dwelling
unit.
Co-op Loan : A Mortgage Loan secured by the pledge
of stock allocated to a dwelling unit in a residential cooperative
housing corporation and a collateral assignment of the related
Co-op Lease.
Covered Loan : A Mortgage Loan categorized as
Covered pursuant to Appendix E of Standard & Poor’s
Glossary.
Custodial Account : 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 originals of each Mortgage Note, Mortgage,
Assignment of Mortgage and other Mortgage Loan
Documents. If more than one Custodial Agreement is in
effect at any given time, all of the individual Custodial
Agreements shall collectively be referred to as the
“Custodial Agreement.”
Custodian : 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 Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
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 to be repurchased or replaced or to be replaced with
a Qualified Substitute Mortgage Loan by the Seller in accordance
with the terms of this Agreement.
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.
FIRREA : The Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, as amended and in effect
from time to time.
Fixed Rate Mortgage Loan : A fixed rate mortgage
loan purchased pursuant to this Agreement.
Freddie Mac : The Federal Home Loan Mortgage
Corporation, or any successor thereto.
Freddie Mac Transfer : As defined in
Section 13 .
Gross Margin : With respect to each Adjustable Rate
Mortgage Loan, the fixed percentage amount set forth in the related
Mortgage Note which amount is added to the Index in accordance with
the terms of the related Mortgage Note to determine on each
Interest Rate Adjustment Date the Mortgage Interest Rate for such
Mortgage Loan.
High Cost Loan : A Mortgage Loan (a) covered by
the Home Ownership and Equity Protection Act of 1994 (“
HOEPA ”), (b) with an “annual percentage
rate” or total “points and fees” (as each such
term is calculated under HOEPA) payable by the related Mortgagor
that exceed the thresholds set forth by HOEPA and its implementing
regulations, including 12 C.F.R. § 226.32(a)(1)(i)
and (ii), (c) classified as a “high cost home,”
“threshold,” “covered,” (excluding New
Jersey “Covered Home Loans” as that term 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 Home Loan
pursuant to Appendix E of Standard & Poor’s
Glossary.
HUD : The Department of Housing and Urban
Development, or any federal agency or official thereof which may
from time to time succeed to the functions thereof with regard to
Mortgage Insurance issued by the FHA. The term
“HUD,” for purposes of this Agreement, is also deemed
to include subdivisions thereof such as the FHA and Government
National Mortgage Association.
Index : The index indicated in the related Mortgage
Note for each Adjustable Rate Mortgage Loan.
Insurance Proceeds : With respect to each Mortgage
Loan, proceeds of insurance policies insuring the Mortgage Loan or
the related Mortgaged Property.
Interest Rate Adjustment Date : With respect to each
Adjustable Rate Mortgage Loan, the date, specified in the related
Mortgage Note and the related Mortgage Loan Schedule, on which the
Mortgage Interest Rate is adjusted.
Interim Funder : With respect to each MERS
Designated Mortgage Loan, the Person named on the MERS System as
the interim funder pursuant to the MERS Procedures
Manual.
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.
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 term
of each Adjustable Rate Mortgage Loan shall not at any time exceed
the Mortgage Interest Rate at the time of origination of such
Adjustable Rate Mortgage Loan by more than the amount per annum set
forth on the related Mortgage Loan Schedule.
Liquidation Proceeds : The proceeds received in
connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan,
trustee’s sale, foreclosure sale or otherwise or the sale of
the related Mortgaged Property if the Mortgaged Property is
acquired in satisfaction of the Mortgage Loan, other than amounts
received following the acquisition of REO Property, Insurance
Proceeds and Condemnation Proceeds.
Loan-to-Value Ratio : With respect to any Mortgage
Loan, as of any date of determination, the ratio (expressed as a
percentage) the numerator of which is the outstanding principal
balance of the Mortgage Loan as of the related Cut-off Date (unless
otherwise indicated), and the denominator of which is the lesser of
(a) the Appraised Value of the Mortgaged Property at
origination and (b) if the Mortgage Loan was made to finance
the acquisition of the related Mortgaged Property, the purchase
price of the Mortgaged Property.
LTV : Loan-to-Value Ratio.
Manufactured Home : A single family residential unit
that is constructed in a factory in sections in accordance with the
Federal Manufactured Home Construction and Safety Standards adopted
on June 15, 1976, by the Department of Housing and Urban
Development (“ HUD Code ”), as amended in 2000,
which preempts state and local building codes. Each unit
is identified by the presence of a HUD Plate/Compliance Certificate
label. The sections are then transported to the site and
joined together and affixed to a pre-built permanent foundation
(which satisfies the manufacturer’s requirements and all
state, county, and local building codes and
regulations). The manufactured home is built on a
non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of
the home may have running gear (wheels, axles, and brakes) that
enable it to be transported to the permanent site. The
wheels and hitch are removed prior to anchoring the unit to the
permanent foundation. The manufactured home must be
classified as real estate and taxed accordingly. The
permanent foundation may be on land owned by the mortgager or may
be on leased land.
MERS : Mortgage Electronic Registration Systems,
Inc., a Delaware corporation, and its successors in
interest.
MERS Designated Mortgage Loan : Mortgage Loans for
which (a) the Seller has designated or will designate MERS as,
and has taken or will take such action as is necessary to cause
MERS to be, the mortgagee of record, as nominee for the Seller, in
accordance with MERS Procedures Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the
MERS System.
MERS Procedures Manual : The MERS Procedures Manual,
as it may be amended, supplemented or otherwise modified from time
to time.
MERS Report : The report from the MERS System
listing MERS Designated Mortgage Loans and other
information.
MERS System : MERS mortgage electronic registry
system, as more particularly described in the MERS Procedures
Manual.
Monthly Payment : With respect to any Mortgage Loan,
the scheduled payment of principal and interest payable by a
Mortgagor under the related Mortgage Note on each Due
Date.
Mortgage : With respect to a Mortgage Loan that is
not a Co-op Loan, the mortgage, deed of trust or other instrument
securing a Mortgage Note, which creates a first lien on the
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 hereto and any additional documents
required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Interest Rate : With respect to each
Mortgage Loan, the annual rate at which interest accrues on such
Mortgage Loan from time to time in accordance with the provisions
of the related Mortgage Note.
Mortgage 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 : Each mortgage loan sold, assigned
and transferred pursuant to this Agreement and identified on the
applicable Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, 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 : With respect to any
Mortgage Loan, the documents required to be delivered to the
Custodian pursuant to Subsection 6.03 .
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 social security number of the Mortgagor; (4) a
code indicating whether the Mortgagor’s race and/or ethnicity
is (i) native American or Alaskan native,
(ii) Asian/Pacific islander, (iii) African American,
(iv) white, (v) Hispanic or Latino, (vi) other
minority, (vii) not provided by the Mortgagor, (viii) not
applicable (if the Mortgagor is an entity) and (ix) unknown or
missing; (5) the street address of the Mortgaged Property
including the city, state and zip code; (6) a code indicating
whether the Mortgagor is self-employed; (7) a code indicating
whether the Mortgaged Property is owner-occupied, investment
property or a second home; (8) a code indicating the number
and type of residential units constituting the Mortgaged Property
(e.g. single family residence, two-family residence, three-family
residence, four-family residence, multifamily residence,
condominium, manufactured housing, mixed-use property, raw land and
other non-residential properties, planned unit development or
cooperative stock in a cooperative housing corporation);
(9) the original months to maturity or the remaining months to
maturity from the related Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization
schedule; (10) the Loan-to-Value Ratio at origination;
(11) the Mortgage Interest Rate as of the related Cut-off
Date; (12) the date on which the first Monthly Payment was due
on the Mortgage Loan and, if such date is not consistent with the
Due Date currently in effect, the Due Date; (13) the stated
maturity date; (14) the amount of the Monthly Payment as of
the related Cut-off Date; (15) whether the Mortgage Loan has
Monthly Payments that are interest-only for a period of time, and
the interest only period, if applicable; (16) the last payment
date on which a payment was actually applied to the outstanding
principal balance; (17) the schedule of the payment
delinquencies in the prior 12 months; (18) the Servicing Fee;
(19) the original principal amount of the Mortgage Loan;
(20) 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; (21) with respect to each Mortgage Loan with a
second lien behind it, the combined principal balance of the
Mortgage Loan and the applicable second lien loan, at origination,
(22) a code indicating whether there is a simultaneous second;
(23) with respect to Adjustable Rate Mortgage Loans, the
Interest Rate Adjustment Date; (24) with respect to Adjustable
Rate Mortgage Loans, the Gross Margin; (25) with respect to
Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the
terms of the Mortgage Note; (26) with respect to Adjustable
Rate Mortgage Loans, a code indicating the type of Index, including
the methodology for rounding (e.g. rounded upward, if necessary, to
the nearest ten thousandth (.0001)) and the applicable time frame
for determining the Index; (27) the product type of Mortgage
Loan (i.e., Fixed Rate, Adjustable Rate); (28) a code
indicating the purpose of the loan (i.e., purchase, Rate/Term
Refinance or Cash-Out Refinance); (29) a code indicating the
documentation style (i.e. no documents, full, alternative, reduced,
no income/no asset, stated income, no ration, reduced or NIV);
(30) asset verification (Y/N); (31) [Reserved];
(32) whether such Mortgage Loan provides for a Prepayment
Penalty; (33) the Prepayment Penalty period of such Mortgage
Loan, if applicable; (34) a description of the Prepayment
Penalty, if applicable, including whether the applicable Prepayment
Penalty provision is “hard” or “soft”;
(35) the Mortgage Interest Rate as of origination;
(36) the credit risk score (FICO score); (37) the date of
origination; (38) with respect to Adjustable Rate Mortgage
Loans, the Mortgage Interest Rate adjustment period;
(39) [Reserved]; (40) with respect to Adjustable Rate
Mortgage Loans, the
Mortgage
Interest Rate floor; (41) the Mortgage Interest Rate
calculation method (i.e., 30/360, simple interest, other);
(42) with respect to Adjustable Rate Mortgage Loans, the
Periodic Rate Cap as of the first Interest Rate Adjustment
Date; (43) with respect to each Adjustable Rate Mortgage
Loan, a code indicating whether the Mortgage Loan provides for
negative amortization; (44) a code indicating whether the
Mortgage Loan has negative amortization and the maximum of
such negative amortization; (45) a code indicating
whether the Mortgage Loan is a Balloon Mortgage Loan;
(46) a code indicating whether the Mortgage Loan by its
original terms or any modifications thereof provides for
amortization beyond its scheduled maturity date;
(47) [reserved]; (48) the original Monthly Payment
due; (49) the Appraised Value; (50) appraisal type;
(51) appraisal date; (52) a code indicating whether
the Mortgage Loan is covered by a PMI Policy and, if so,
identifying the PMI Policy provider; (54) the certificate
number of the PMI Policy, if applicable; (53) the amount
of coverage of the PMI Policy, if applicable; (54) in
connection with a condominium unit, a code indicating whether
the condominium project where such unit is located is low-rise
or high-rise; (55) a code indicating whether the
Mortgaged Property is a leasehold estate; (56) with
respect to the related Mortgagor, the debt-to-income ratio;
(57) sales price; (58) automated valuation model
(AVM); (59) a code indicating whether the Mortgage Loan
is a MERS Designated Mortgage Loan and the MERS Identification
Number, if applicable; (60) a field indicating whether
such Mortgage Loan is a Home Loan; and (61) the DU or LP
number, if applicable. With respect to the Mortgage
Loans in the aggregate, the related Mortgage Loan Schedule
shall set forth the following information, as of the related
Cut-off Date: (1) the number of Mortgage
Loans; (2) the current aggregate outstanding principal
balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; (4) the
weighted average maturity of the Mortgage Loans; (5) the
average principal balance of the Mortgage Loans; (6) the
applicable Cut-off Date; and (7) the applicable Closing
Date.
Mortgage Note : The original executed note or other
evidence of the Mortgage Loan indebtedness of a Mortgagor,
including any riders or addenda thereto.
Mortgaged Property : With respect to a Mortgage Loan
that is not a Co-op Loan, the Mortgagor’s real property
securing repayment of a related Mortgage Note, consisting of an
unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold
estates for residential properties is a widely-accepted practice, a
leasehold estate, in a single parcel or multiple parcels of real
property improved by a Residential Dwelling. With
respect to a Co-op Loan, the stock allocated to a dwelling unit in
the residential cooperative housing corporation that was pledged to
secure such Co-op Loan and the related Co-op Lease.
Mortgagee : The mortgagee or beneficiary named in
the Mortgage and the successors and assigns of such mortgagee or
beneficiary.
Mortgagor : The obligor on a Mortgage Note, who is
an owner of the Mortgaged Property and the grantor or mortgagor
named in the Mortgage and such grantor’s or mortgagor’s
successors in title to the Mortgaged Property.
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.
Opinion of Counsel : A written opinion of counsel,
who may be counsel for the Seller, reasonably acceptable to the
Purchaser, provided that any Opinion of Counsel
relating to (a) the qualification of any account required to
be maintained pursuant to the Interim Servicing Agreement as an
Eligible Account (as defined in the Interim Servicing Agreement),
(b) qualification of the Mortgage Loans in a REMIC or
(c) compliance with the REMIC Provisions, must be (unless
otherwise stated in such Opinion of Counsel) an opinion of counsel
who (i) is in fact independent of the Seller and any servicer
of the Mortgage Loans, (ii) does not have any material direct
or indirect financial interest in the Seller or any servicer of the
Mortgage Loans or in an Affiliate of either and (iii) is not
connected with the Seller or any servicer of the Mortgage Loans as
an officer, employee, director or person performing similar
functions.
Periodic Rate Cap : With respect to each Adjustable
Rate Mortgage Loan, the provision of each Mortgage Note which
provides for an absolute maximum amount by which the Mortgage
Interest Rate therein may increase or decrease on an Interest Rate
Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Rate Cap for each
Adjustable Rate Mortgage Loan is the rate set forth as such on the
related Mortgage Loan Schedule.
Periodic Rate Floor : With respect to each
Adjustable Rate Mortgage Loan, the provision of each Mortgage Note
which provides for an absolute maximum amount by which the Mortgage
Interest Rate therein may decrease on an Interest Rate Adjustment
Date below the Mortgage Interest Rate previously in
effect.
Person : Any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any
agency or political subdivision thereof.
PMI Policy : A policy of primary mortgage guaranty
insurance issued by an insurer acceptable under the Underwriting
Guidelines and qualified to do business in the jurisdiction where
the Mortgaged Property is located.
Preliminary Mortgage Schedule : As defined in
Section 3 .
Prepayment Penalty : With respect to each Mortgage
Loan, the amount of any premium or penalty required to be paid by
the Mortgagor if the Mortgagor prepays such Mortgage Loan as
provided in the related Mortgage Note or Mortgage.
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 : Each agreement
setting forth the general terms and conditions of the purchase and
sale of the Mortgage Loans to be purchased from time to time under
this Agreement.
Purchase Price Percentage : The percentage of par
(expressed as decimal) set forth in the related Purchase Price and
Terms Agreement.
Purchaser : Morgan Stanley Mortgage Capital Inc., a
New York corporation, and its successors in interest and assigns,
or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Appraiser : An appraiser, duly appointed
by the Seller, who had no interest, direct or indirect, in the
Mortgaged Property or in any loan made on the security thereof, and
whose compensation was not affected by the approval or disapproval
of the Mortgage Loan, and such appraiser and the appraisal made by
such appraiser both satisfied the requirements of Title XI of
FIRREA and the regulations promulgated thereunder, all as in effect
on the date the Mortgage Loan was originated.
Qualified Correspondent : Any Person from which the
Seller purchased Mortgage Loans, provided that the following
conditions are satisfied: (i) such Mortgage Loans
were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite
mortgage loans from time to time, for sale to the Seller, in
accordance with underwriting guidelines designated by the Seller
(“ Designated Guidelines ”) or guidelines that
do not vary materially from such Designated Guidelines;
(ii) such Mortgage Loans were in fact underwritten as
described in clause (i) above and were acquired by the Seller
within 180 days after origination; (iii) either (x) the
Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Seller in origination of mortgage loans of
the same type as the Mortgage Loans for the Seller’s own
account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on
a consistent basis for use by lenders in originating mortgage loans
to be purchased by the Seller; and (iv) the Seller employed,
at the time such Mortgage Loans were acquired by the Seller,
pre-purchase or post-purchase quality assurance procedures (which
may involve, among other things, review of a sample of mortgage
loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it
purchased mortgage loans properly applied the underwriting criteria
designated by the Seller.
Qualified Substitute Mortgage Loan : A mortgage loan
eligible to be substituted by the Seller for a Deleted Mortgage
Loan which must, on the date of such substitution, be
approved
by the Purchaser and (i) have an unpaid principal
balance, after deduction of all scheduled payments due in the
month of substitution (or in the case of a substitution of
more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the unpaid
principal balance of the Deleted Mortgage Loan (the amount of
any shortfall will be deposited in the Custodial Account by
the Seller in the month of substitution); (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
kSection 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 and did not provide incidental cash
to the related Mortgagor of more than one percent (1%) (or, if
specified in the related Underwriting Guidelines applicable to such
Mortgage Loan, two percent (2%)) of the original principal balance
of such Mortgage Loan.
Reconstitution : Any Securitization Transaction or a
Whole Loan Transfer.
Reconstitution Agreements : The agreement or
agreements entered into by the Seller and the Purchaser and/or
certain third parties on the Reconstitution Date or Dates with
respect to any or all of the Mortgage Loans sold hereunder, in
connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transaction pursuant to Section 13 ,
including, but not limited to, a seller’s warranties and
servicing agreement with respect to a Whole Loan Transfer, and a
pooling and servicing agreement and/or seller/servicer agreements
and related custodial/trust agreement and documents with respect to
a Securitization Transaction.
Reconstitution Date : As defined in
Section 13 .
Refinanced Mortgage Loan : A Mortgage Loan the
proceeds of which were not used to purchase the related Mortgaged
Property.
Regulation AB : Subpart 229.1100 – Asset
Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have
been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70
Fed. Reg. 1,506, 1,531 (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.
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).
REO Property : A Mortgaged Property acquired by the
Interim Servicer through foreclosure or deed in lieu of
foreclosure.
Repurchase Price : With respect to any Mortgage
Loan, a price equal to: (a) during the first year
immediately following the applicable Closing Date, an amount equal
to the sum of (i) the product of (x) the applicable
Purchase Price Percentage and (y) the then aggregate unpaid
actual principal balance of such Mortgage Loan as of the date of
such repurchase, plus (ii) accrued interest on such Mortgage
Loan at the applicable Mortgage Interest Rate from the date to
which interest had last been paid through the date of such
repurchase, plus (iii) the amount of any outstanding escrow or
similar advances owed to the Purchaser or its designee, and
(b) after the first year, an amount equal to the sum of
(i) then aggregate unpaid actual principal balance of such
Mortgage Loan as of the date of such repurchase plus
(ii) accrued interest thereon at the Mortgage Interest Rate
from the date to which interest had last been paid through the date
of such repurchase, plus (iii) the amount of any outstanding
escrow or similar advances owed to the Purchaser or its
designee. In the event the Purchaser has securitized or
sold such Mortgage Loan, the price for such repurchase shall be as
set forth in clause (b) above.
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 : As to each Mortgage Loan Package,
the amount of the fee the Purchaser shall pay to the Seller for
servicing the Mortgage Loans in accordance with the terms of this
Agreement, which shall, with respect to each Mortgage Loan, be
equal to $5.00 per calendar month.
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® 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.
Static Pool Information : Static pool information as
described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Successor Servicer : Any servicer of one or more
Mortgage Loans designated by the Purchaser as being entitled to the
benefits of the indemnifications set forth in
Subsections 9.03 and 14.01 .
Third-Party Originator : Each Person, other than a
Qualified Correspondent, that originated Mortgage Loans acquired by
the Seller.
Transfer Date : In the event the Interim Servicer is
terminated as servicer of a Mortgage Loan pursuant to the Interim
Servicing Agreement, the date on which the Purchaser, or its
designee, shall receive the transfer of servicing responsibilities
and begin to perform the servicing of such Mortgage Loans, and the
Interim Servicer shall cease all servicing
responsibilities.
Underwriting Guidelines : The underwriting
guidelines of the Seller, a copy of which is attached hereto as
Exhibit G and a then-current 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 actual unpaid 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 unpaid 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 two (2) 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 and the related
Servicing Rights 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
actual unpaid principal balance, as of the related Cut-off
Date, of the Mortgage Loans listed on the related Mortgage
Loan Schedule, after application of scheduled payments of
principal due on or before the related Cut-off Date, but only
to the extent such payments were actually
received. The initial principal amount of the
related Mortgage Loans shall be the aggregate actual unpaid
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 and/or the Servicing Rights
shall be priced and paid for separately.
In
addition to the Purchase Price as described above, the
Purchaser shall pay to the Seller, at closing, accrued
interest from the last “interest paid to” date
through the day immediately preceding the related Closing
Date, inclusive, on the aggregate actual unpaid principal
amount of the related Mortgage Loans as of the related Cut-off
Date at the weighted average Mortgage Interest Rate of those
Mortgage Loans. The Purchase Price plus accrued
interest as set forth in the preceding paragraph shall be paid
to the Seller by wire transfer of immediately available funds
to an account designated by the Seller in
writing.
The
Purchaser shall be entitled to (1) all scheduled
principal due after the related Cut-off Date, (2) all
other recoveries of principal collected on or after the
related Cut-off Date, and (3) all payments of interest on
the Mortgage Loans 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 either (a) deliver to the
Purchaser or its designee in escrow, for examination with
respect to each Mortgage Loan to be purchased, the related
Mortgage File, pertaining to each Mortgage Loan, or
(b) make the related Mortgage File available to the
Purchaser for examination at such other location as shall
otherwise be acceptable to the Purchaser. Such
examination of the Mortgage Files may be made by the Purchaser
or its designee at any reasonable time before (or, if so
provided in the related Purchase Price and Terms Agreement,
after) the related Closing Date. If the Purchaser
makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans do
not conform to any of the requirements set forth in the
related Purchase Price and Terms Agreement, or as an Exhibit
annexed thereto, the Purchaser may delete such Mortgage Loans
from the related Mortgage Loan Schedule, and such Deleted
Mortgage Loan (or Loans) may be replaced by a Qualified
Substitute Mortgage Loan (or Loans) acceptable to the
Purchaser. The Purchaser may, at its option and
without notice to the Seller, purchase some or all of the
Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its
designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not impair in
any way the Purchaser’s (or any of its
successor’s) rights to demand repurchase, substitution
or other relief as provided in this Agreement. In
the event that the Seller fails to deliver the Mortgage File
with
respect
to any Mortgage Loan, the Seller shall, upon the request of
the Purchaser, repurchase such Mortgage Loan as the price and
in the manner specified in Subsection 9.03
.
SECTION
6.
Conveyance from Seller to Purchaser .
Subsection
6.01
Conveyance of Mortgage Loans .
The
Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to
be purchased on each Closing Date, shall execute and deliver
an Assignment and Conveyance Agreement in the form attached
hereto as Exhibit H (the “ Assignment and
Conveyance Agreement ”). The Seller shall
ensure that the contents of each Servicing File, which
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.
The
Seller shall be or shall cause the Interim Servicer to 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
or shall cause the Interim Servicer to 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 or the Interim Servicer may be in the
form of microfilm or microfiche so long as the Seller or the
Interim Servicer 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 ten (10) Business Days prior to the related Closing Date
those Mortgage Loan Documents set forth on
Exhibit A-1 hereto as required by the Custodial
Agreement with respect to each Mortgage Loan set forth on the
related Mortgage Loan Schedule.
The
Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial
Agreement for the related Closing Date, as evidenced by the
Initial Certification of the Custodian in the form annexed to
the Custodial Agreement. The Seller shall comply
with the terms of the Custodial Agreement and the Purchaser
shall pay all fees and expenses of the Custodian.
The
Seller shall or shall cause the Interim Servicer to 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 two (2)
weeks following receipt of the original document by the
Interim Servicer; provided , however , that
such original recorded document or certified copy thereof
shall be delivered to the Purchaser no later than
180 days following the related Closing Date, unless there
has been a delay at the applicable recording
office.
If
the original or copy of any document submitted for recordation
to the appropriate public recording office is not delivered to
the Purchaser or its designee within 180 days following
the related Closing Date, the related Mortgage Loan shall,
upon the request of the Purchaser, be repurchased by the
Seller at the price and in the manner specified in
Subsection 9.03 . The foregoing
repurchase obligation shall not apply if the Seller cannot
cause the Interim Servicer to deliver such original or copy of
any document submitted for recordation to the appropriate
public recording office within the specified period due to a
delay caused by the recording office in the applicable
jurisdiction; provided that (i) the
Seller shall instead deliver a recording receipt of such
recording office or, if such recording receipt is not
available, an officer’s certificate of a servicing
officer of the Seller, confirming that such document has been
accepted for recording, and (ii) such document is
delivered within twelve (12) months of the related
Closing Date.
The
Seller shall pay all initial recording fees, if any, for the
Assignments of Mortgage and any other fees or costs in
transferring all original documents to the Custodian or, upon
written request of the Purchaser, to the Purchaser or the
Purchaser’s designee. The Purchaser or the
Purchaser’s designee shall be responsible for recording
the Assignments of Mortgage and shall be reimbursed by the
Seller for the costs associated therewith pursuant to the
preceding sentence.
Subsection
6.04
Quality Control Procedures .
The
Seller shall, or shall cause the Interim Servicer to, have an
internal quality control program that verifies, on a regular
basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting
decisions. The program shall include evaluating and
monitoring the overall quality of the Seller loan production
and the servicing activities of the 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, no later than two Business Days after 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, no
later than two Business Days after 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 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 cause the Interim
Servicer to execute the Interim Servicing Agreement on the
initial Closing Date.
The
Seller shall cause the Interim Servicer to transfer the
servicing of the Mortgage Loans on each Transfer Date in
accordance with the terms of the Interim Servicing
Agreement.
SECTION
8. [
RESERVED ].
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 federal savings bank, validly existing, and in good
standing under the laws of the United States and has all
licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in
the states where the Mortgaged Property is located if the laws
of such state require licensing or qualification in order to
conduct business of the type conducted by the
Seller. The Seller has corporate power and
authority to execute and deliver this Agreement and to perform
its obligations hereunder; the execution, delivery and
performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement
has been duly executed and delivered and constitutes the
valid, legal, binding and enforceable obligation of the
Seller, except as enforceability may be limited by
(i) bankruptcy, insolvency, liquidation, receivership,
moratorium, reorganization or other similar laws affecting the
enforcement of the rights of creditors and (ii) general
principles of equity, whether enforcement is sought in a
proceeding in equity or at law. All requisite
corporate action has been taken by the Seller to make this
Agreement valid and binding upon the Seller in accordance with
its terms;
(b)
No Consent Required . No consent, approval,
authorization or order is required for the transactions
contemplated by this Agreement from any court, governmental
agency or body, or federal or state regulatory authority
having jurisdiction over the Seller is
required
or, if required, such consent, approval, authorization or
order has been or will, prior to the related Closing Date, be
obtained;
(c)
Ordinary Course of Business . The
consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the
Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable
jurisdiction;
(d)
No Conflicts . Neither the execution and
delivery of this Agreement, the acquisition or origination of
the Mortgage Loans by the Seller, the sale of the Mortgage
Loans to the Purchaser, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or
provisions of the Seller’s charter or by-laws or any
legal restriction or any agreement or instrument to which the
Seller is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Seller or
its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have
an adverse effect upon any of its properties pursuant to the
terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans,
or impair the ability of the Purchaser to realize the full
amount of any insurance benefits accruing pursuant to this
Agreement;
(e)
No Litigation Pending . There is no action,
suit, proceeding or investigation pending or threatened
against the Seller, before any court, administrative agency or
other tribunal asserting the invalidity of this Agreement,
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in
any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated
herein, or which would be likely to impair materially the
ability of the Seller to perform under the terms of this
Agreement;
(f)
Ability to Perform; Solvency . The Seller
does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant
contained in this Agreement. The Seller is solvent
and the sale of the Mortgage Loans will not cause the Seller
to become insolvent. The sale of the Mortgage Loans
is not undertaken with the intent to hinder, delay or defraud
any of Seller’s creditors;
(g)
Seller’s Origination . The
Seller’s decision to originate any mortgage loan or to
deny any mortgage loan application is an independent decision
based upon the Underwriting Guidelines, and is in no way made
as a result of Purchaser’s decision to purchase, or not
to purchase, or the price Purchaser may offer to pay for, any
such mortgage loan, if originated;
(h)
Anti-Money Laundering Laws . The Seller has
complied with all applicable anti-money laundering laws,
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
three complete fiscal years and any later quarter ended more
than 60 days prior to the execution of this
Agreement. All such financial statements fairly
present the pertinent results of operations and changes in
financial position for each of such periods and the financial
position at the end of each such period of the Seller and its
subsidiaries and have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as set forth in the
notes thereto. In addition, the Seller has
delivered information as to its loan gain and loss experience
in respect of foreclosures and its loan delinquency experience
for the immediately preceding three-year period, in each case
with respect to mortgage loans owned by it and such mortgage
loans serviced for others during such period, and all such
information so delivered shall be true and correct in all
material respects. There has been no change in the
business, operations, financial condition, properties or
assets of the Seller since the date of the Seller’s
financial statements that would have a material adverse effect
on its ability to perform its obligations under this
Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in
accordance with the provided instructions;
(j)
Selection Process . The Mortgage Loans were
selected from among the outstanding one- to four-family
mortgage loans in the Seller’s portfolio at the related
Closing Date as to which the representations and warranties
set forth in Subsection 9.02 could be made and
such selection was not made in a manner so as to affect
adversely the interests of the Purchaser;
(k)
Delivery to the Custodian . The Mortgage
Note, the Mortgage, the Assignment of Mortgage and any other
documents required to be delivered with respect to each
Mortgage Loan pursuant to the Custodial Agreement shall be
delivered to the Custodian all in compliance with the specific
requirements of the Custodial Agreement. With
respect to each Mortgage Loan, the Seller will be in
possession of a complete Mortgage File in compliance with
Exhibit A hereto, except for such documents as
will be delivered to the Custodian;
(l)
Mortgage Loan Characteristics . The
characteristics of the related Mortgage Loan Package are as
set forth on the description of the pool characteristics for
the applicable Mortgage Loan Package delivered pursuant to
Section 11 on the related Closing Date in the form
attached as Exhibit B to each related Assignment and
Conveyance Agreement;
(m)
No Untrue Information . Neither this
Agreement nor any information, statement, tape, diskette,
report, form, or other document furnished or to be furnished
pursuant to this Agreement or any Reconstitution Agreement or
in connection with the transactions contemplated hereby
(including any Securitization Transaction or Whole Loan
Transfer) contains or will contain any untrue statement of
fact or omits or will omit to state a fact necessary to make
the statements contained herein or therein not
misleading;
(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)
Reasonable Purchase Price . The
consideration received by the Seller upon the sale of the
Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage
Loans; and
(q)
Insured Depository Institution Representations
. Seller is an “insured depository
institution” as that term is defined in
Section 1813(c)(2) of Title 12 of the United States
Code, as amended, and accordingly, Seller makes the following
additional representations and warranties:
|
|
(i)
|
This
Agreement between Purchaser and Seller conforms to all applicable
statutory and regulatory requirements; and
|
|
|
(ii)
|
This
Agreement is (1) executed contemporaneously with the agreement
reached by Purchaser and Seller, (2) approved by a specific
corporate or banking association resolution by the Seller’s
board of directors, which approval shall be reflected in the
minutes of said board, and (3) an official record of the
Seller. A copy of such resolution, certified by a vice
president or higher officer of Seller has been provided to
Purchaser.
|
Subsection
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
and in the payment histories provided by the Seller with
respect to Mortgage Loans originated more than 12 months prior
to the related Closing Date 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 more recent of the origination date of
the Mortgage Loan or the date which is 12 months prior to the
related Closing Date;
(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, with respect to Mortgage Loans that provide Escrow
Payments, escrow of funds has been established in an amount
sufficient to pay for every such item on an annual
basis. The Seller has not advanced funds, or
induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage
Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by
one month the related Due Date of the first installment of
principal and interest;
(d)
Original Terms Unmodified . The terms of the
Mortgage Note and Mortgage have not been impaired, waived,
altered or modified in any respect, from the date of
origination except by a written instrument which has been
recorded, if necessary to protect the interests of the
Purchaser, and which has been delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing,
and the terms of which are reflected in the related Mortgage
Loan Schedule. The substance of any such waiver,
alteration or modification has been approved by the issuer of
any related PMI Policy and the title insurer, if any, to the
extent required by the policy, and its terms are reflected on
the related Mortgage Loan Schedule, if
applicable. No Mortgagor has been released, in
whole or in part, except in connection with an assumption
agreement, approved by the issuer of any related PMI Policy
and the title insurer, to the extent required by the policy,
and which assumption agreement is part of the Mortgage Loan
File delivered to the Custodian or to such other Person as the
Purchaser shall designate in writing and the terms of which
are reflected in the related Mortgage Loan
Schedule;
(e)
No Defenses . The Mortgage Loan is not
subject to any right of rescission, set-off, counterclaim or
defense, including without limitation the defense of usury,
nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder,
render either the Mortgage Note or the Mortgage unenforceable,
in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including without limitation
the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with
respect thereto;
(f)
Hazard Insurance . Pursuant to the terms of
the Mortgage, all buildings or other improvements upon the
Mortgaged Property are insured by a generally acceptable
insurer against loss by fire, hazards of extended coverage and
such other hazards as are provided for in the Underwriting
Guidelines. If required by the National Flood
Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance
Administration as in effect which policy
conforms
with the Underwriting Guidelines. All individual
insurance policies contain a standard mortgagee clause naming
the Seller and its successors and assigns as mortgagee, and
all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard
insurance policy at the Mortgagor’s cost and expense,
and on the Mortgagor’s failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor’s cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required
hazard insurance, provided the policy is not a “
master ” or “ blanket ” hazard
insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned
unit development. The hazard insurance policy is
the valid and binding obligation of the insurer, is in full
force and effect, and will be in full force and effect and
inure to the benefit of the Purchaser upon the consummation of
the transactions contemplated by this
Agreement. The Seller has not engaged in, and has
no knowledge of the Mortgagor’s having engaged in, any
act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein,
or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or
will be received, retained or realized by any attorney, firm
or other person or entity, and no such unlawful items have
been received, retained or realized by the
Seller;
(g)
Compliance with Applicable Laws . Any and
all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, predatory
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 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, the Mortgaged Property is a fee simple estate
(except with respect to each Mortgage Loan secured by an
interest in an leasehold estate) that consists of a single
parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling,
or an individual residential condominium unit in a condominium
project, or an individual unit in a planned unit development
(or, with respect to each Co-op Loan, an individual unit in a
residential cooperative housing corporation);
provided , however , that any condominium
unit, planned unit development or residential cooperative
housing corporation shall conform with the
Underwriting
Guidelines. No portion of the Mortgaged Property
(or underlying Mortgaged Property, in the case of a Co-op
Loan) is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been
used for commercial purposes; provided ,
that Mortgaged Properties which contain a home office
shall not be considered as being used for commercial purposes
as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the
Mortgaged Properties are Manufactured Homes, log homes, mobile
homes, geodesic domes or other unique property
types. This representation and warranty is a Deemed
Material and Adverse Representation;
(j)
Valid First 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 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 (including, without limitation, any
provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the
Mortgage and any other such related agreement had legal
capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other
such related agreement have been duly and properly executed by
other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of
the Seller in connection with the origination of the Mortgage
Loan or in the application of any insurance in relation to
such Mortgage Loan. The documents, instruments and
agreements submitted for loan underwriting were not falsified
and contain no untrue statement of material fact or omit to
state a material fact required to be stated therein or
necessary to make the information and statements therein not
misleading. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any
Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan or in the
application for any insurance in relation to such Mortgage
Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as
it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l)
Full Disbursement of Proceeds . The Mortgage
Loan has been closed and the proceeds of the Mortgage Loan
have been fully disbursed and there is no requirement for
future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in
making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(m)
Ownership . The Seller is the sole owner of
record and holder of the Mortgage Loan and the indebtedness
evidenced by each Mortgage Note and upon the sale of the
Mortgage Loans to the Purchaser, the Seller will retain the
Mortgage Files or any part thereof with respect thereto not
delivered to the Custodian, the Purchaser or the
Purchaser’s designee, in trust only for the purpose of
servicing and supervising the servicing of each Mortgage
Loan. The Mortgage Loan is not assigned or pledged,
and the Seller has good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage
Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to
no interest or participation of, or agreement with, any other
party, to sell and assign each Mortgage Loan pursuant to this
Agreement and following the sale of each Mortgage Loan, the
Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest. 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 prior to the Transfer Date. After the related
Closing Date, the Seller will have no right to modify or alter
the terms of the sale of the Mortgage Loan
and
the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as
provided in this Agreement;
(n)
Doing Business . All parties which have had
any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were)
(1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged
Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do
business in such state, or (iii) a federal savings and
loan association, a savings bank or a national bank, or
(3) not doing business in such state;
(o)
LTV, PMI Policy . No Mortgage Loan has an
LTV greater than 100%. Any Mortgage Loan that had
at the time of origination an LTV in excess of 80% is insured
as to payment defaults by a PMI Policy. Any PMI
Policy in effect covers the related Mortgage Loan for the life
of such Mortgage Loan. All provisions of such PMI
Policy have been and are being complied with, such policy is
in full force and effect, and all premiums due thereunder have
been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result
in the exclusion from, denial of, or defense to
coverage. Any Mortgage Loan subject to a PMI Policy
obligates the Mortgagor thereunder to maintain the PMI Policy
and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the
Mortgage Loan as set forth on the related Mortgage Loan
Schedule is net of any such insurance premium if the related
PMI Policy is lender-paid;
(p)
Title Insurance . With respect to a Mortgage
Loan which is not a Co-op Loan, the Mortgage Loan is covered
by an ALTA or CLTA lender’s title insurance policy or
other generally acceptable form of policy or insurance
acceptable under the Underwriting Guidelines and each such
title insurance policy is issued by a title insurer acceptable
under the Underwriting Guidelines and qualified to do business
in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the
first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan (or to the extent a Mortgage Note
provides for negative amortization, the maximum amount of
negative amortization in accordance with the Mortgage),
subject only to the exceptions contained in clauses (i)
and (ii) of clause (j) of this
Subsection 9.02 , and in the case of Adjustable
Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the
Mortgage Interest Rate and Monthly Payment. Where
required by state law or regulation, the Mortgagor has been
given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such
lender’s title insurance policy affirmatively insures
ingress and egress, and against encroachments by or upon the
Mortgaged Property or any interest therein. The
Seller, its successor and assigns, are the sole insured of
such lender’s title insurance policy, and such
lender’s title insurance policy is valid and remains in
full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this
Agreement. No claims have been made under such
lender’s title insurance policy, and no prior holder of
the related Mortgage, including the Seller, has done, by act
or omission, anything which would impair the coverage of such
lender’s title insurance policy, including without
limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has
been
or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items
have been received, retained or realized by the
Seller;
(q)
No Defaults . Other than payments due but
not yet 30 days or more delinquent, there is no default,
breach, violation or event which would permit acceleration
existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit
acceleration, and neither the Seller nor any of its affiliates
nor any of their respective predecessors, have waived any
default, breach, violation or event which would permit
acceleration;
(r)
No Mechanics’ Liens . There are no
mechanics’ or similar liens or claims which have been
filed for work, labor or material (and
|
