Exhibit 99.11b
CWT Draft 6/1/06
SECOND
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES
AGREEMENT
_______________________________
MORGAN
STANLEY MORTGAGE CAPITAL INC.,
Purchaser
QUICKEN
LOANS, INC.
Seller
_______________________________
Dated
as of June 1, 2006
Conventional,
Fixed
and Adjustable Rate
Residential
Mortgage Loans
TABLE
OF CONTENTS
Page
|
SECTION
1.
|
DEFINITIONS.
|
1
|
|
SECTION
2.
|
AGREEMENT
TO PURCHASE.
|
14
|
|
SECTION
3.
|
MORTGAGE
SCHEDULES.
|
14
|
|
SECTION
4.
|
PURCHASE
PRICE.
|
14
|
|
SECTION
5.
|
EXAMINATION
OF MORTGAGE FILES.
|
15
|
|
SECTION
6.
|
CONVEYANCE
FROM SELLER TO PURCHASER.
|
16
|
|
SECTION
7.
|
SERVICING
OF THE MORTGAGE LOANS.
|
19
|
|
SECTION
8.
|
REPRESENTATIONS
AND WARRANTIES REGARDING THE PURCHASER.
|
19
|
|
SECTION
9.
|
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES FOR
BREACH.
|
20
|
|
SECTION
10.
|
CLOSING.
|
40
|
|
SECTION
11.
|
CLOSING
DOCUMENTS.
|
41
|
|
SECTION
12.
|
COSTS.
|
43
|
|
SECTION
13.
|
COOPERATION
OF SELLER WITH A RECONSTITUTION.
|
43
|
|
SECTION
14.
|
THE
SELLER.
|
44
|
|
SECTION
15.
|
FINANCIAL
STATEMENTS.
|
46
|
|
SECTION
16.
|
MANDATORY
DELIVERY; GRANT OF SECURITY INTEREST.
|
46
|
|
SECTION
17.
|
NOTICES.
|
47
|
|
SECTION
18.
|
SEVERABILITY
CLAUSE.
|
48
|
|
SECTION
19.
|
COUNTERPARTS.
|
48
|
|
SECTION
20.
|
GOVERNING
LAW.
|
48
|
|
SECTION
21.
|
INTENTION
OF THE PARTIES.
|
48
|
|
SECTION
22.
|
SUCCESSORS
AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
|
49
|
|
SECTION
23.
|
WAIVERS.
|
49
|
|
SECTION
24.
|
EXHIBITS.
|
49
|
|
SECTION
25.
|
GENERAL
INTERPRETIVE PRINCIPLES.
|
49
|
|
SECTION
26.
|
REPRODUCTION
OF DOCUMENTS.
|
50
|
|
SECTION
27.
|
FURTHER
AGREEMENTS.
|
50
|
|
SECTION
28.
|
RECORDATION
OF ASSIGNMENTS OF MORTGAGE.
|
50
|
|
SECTION
29.
|
NO
SOLICITATION.
|
50
|
|
SECTION
30.
|
WAIVER
OF TRIAL BY JURY.
|
51
|
|
SECTION
31.
|
JURISDICTION;
CONSENT TO SERVICE OF PROCESS
|
51
|
|
SECTION
32.
|
CONFIDENTIALITY.
|
51
|
|
SECTION
33.
|
ENTIRE
AGREEMENT.
|
52
|
|
SECTION
34.
|
COMPLIANCE
WITH REGULATION AB.
|
52
|
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
E
|
FORM
OF ASSIGNMENT AND RECOGNITION AGREEMENT
|
|
EXHIBIT
F
|
FORM
OF SECURITY RELEASE CERTIFICATION
|
|
EXHIBIT
G
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
H
|
FORM
OF ASSIGNMENT AND CONVEYANCE AGREEMENT
|
SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES
AGREEMENT
This
SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (“ Agreement ”), dated
as of June 1, 2006, by and between Morgan Stanley Mortgage
Capital Inc., a New York corporation (the “
Purchaser ”), and Quicken Loans, Inc., a Michigan
corporation (the “ Seller ”).
W I T N E S S E T H
:
WHEREAS,
the Purchaser and the Seller are parties to that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of
June 1, 2004, as amended and restated by that certain
Amendment No. 1 dated October 1, 2004 as amended and restated
by that certain First Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of May 1, 2005
(the “ Original Purchase Agreement ”) and
the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to
time, from the Seller, certain conventional adjustable and
fixed rate residential first-lien mortgage loans (the “
Mortgage Loans ”) on a servicing released basis
as described herein, and which shall be delivered in pools of
whole loans (each, a “ Mortgage Loan Package
”) on various dates as provided herein (each, a “
Closing Date ”);
WHEREAS,
the Purchaser and the Seller desire to enter into this
Agreement to amend and restate the Original Purchase Agreement
to make certain modifications as set forth herein with respect
to all Mortgage Loans subject to this Agreement or the
Original Purchase Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Purchaser and the Seller agree as
follows:
SECTION
1.
Definitions .
For purposes
of this Agreement the following capitalized terms shall have
the respective meanings set forth below.
Accepted Servicing Practices : With respect to each
Mortgage Loan and the Seller shall mean the servicing procedures
which (i) conform to customary and usual standards of practice of
prudent mortgage lenders and mortgage loan servicers, for mortgage
loans similar to the Mortgage Loans, (ii) follow the policies and
procedures that the Seller applies to similar mortgage loans
serviced for third parties and for its own account, (iii) meet the
requirements of Fannie Mae and Freddie Mac and (iv) comply with all
applicable laws and follow collection practices with respect to the
related Mortgage Loans that are in all material respects legal and
customary.
Act : The National Housing Act, as amended from time
to time.
Adjustable Rate Mortgage Loan : An adjustable rate
Mortgage Loan purchased pursuant to this Agreement.
Affiliate : With respect to any specified Person,
any other Person controlling or controlled by or under common
control with such specified Person. For the purposes of
this definition, “control” when used with respect to
any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise and
the terms “controlling” and “controlled”
have meanings correlative to the foregoing.
Agency Transfer : A Fannie Mae Transfer or a Freddie
Mac Transfer.
Agreement : This Third Amended and Restated Mortgage
Loan Purchase and Warranties Agreement and all amendments and
supplements hereto.
ALTA : The American Land Title Association or any
successor thereto.
Appraised Value : With respect to any Mortgaged
Property, the lesser of (i) the value thereof as determined by an
appraisal made for the originator of the Mortgage Loan at the time
of origination of the Mortgage Loan by a Qualified Appraiser and
(ii) the purchase price paid for the related Mortgaged Property by
the Mortgagor with the proceeds of the Mortgage Loan; provided,
however, that in the case of a refinanced Mortgage Loan, such value
of the Mortgaged Property is based solely upon the value determined
by an appraisal made for the originator of such refinanced Mortgage
Loan at the time of origination of such refinanced Mortgage Loan by
a Qualified Appraiser.
Assignment and Conveyance Agreement : As defined in
Subsection 6.01 .
Assignment of Mortgage : An assignment of the
Mortgage, notice of transfer or equivalent instrument in recordable
form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the
Mortgage to the Purchaser.
Balloon Mortgage Loan : Any Mortgage Loan which by
its original terms or any modifications thereof provides for
amortization beyond its scheduled maturity date.
Business Day : Any day other than (i) a
Saturday or Sunday, (ii) a day on which banking and savings
and loan institutions, in the State of New York or the State in
which the Interim Servicer’s servicing operations are located
or (iii) the state in which the Custodian’s operations
are located, are authorized or obligated by law or executive order
to be closed.
Cash-Out Refinance : A refinanced Mortgage Loan in
which the proceeds received were in excess of the amount of funds
required to repay the principal balance of any existing first
mortgage on the related Mortgaged Property, pay related closing
costs and satisfy any outstanding subordinate mortgages on the
related Mortgaged Property as determined in accordance with
Seller’s Underwriting Guidelines.
Closing Date : The date or dates on which the
Purchaser from time to time shall purchase, and the Seller from
time to time shall sell, the Mortgage Loans listed on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Closing Documents : The documents required to be
delivered on each Closing Date pursuant to Section 11
.
Code : The Internal Revenue Code of 1986, as
amended, or any successor statute thereto.
Commission : The United States Securities and
Exchange Commission.
Condemnation Proceeds : All awards or settlements in
respect of a Mortgaged Property, whether permanent or temporary,
partial or entire, by exercise of the power of eminent domain or
condemnation, to the extent not required to be released to a
Mortgagor in accordance with the terms of the related Mortgage Loan
Documents.
Co-op : A private, cooperative housing corporation,
having only one class of stock outstanding, which owns or leases
land and all or part of a building or buildings, including
apartments, spaces used for commercial purposes and common areas
therein and whose board of directors authorizes the sale of stock
and the issuance of a Co-op Lease.
Co-op Lease : With respect to a Co-op Loan, the
lease with respect to a dwelling unit occupied by the Mortgagor and
relating to the stock allocated to the related dwelling
unit.
Co-op Loan : A Mortgage Loan secured by the pledge
of stock allocated to a dwelling unit in a residential cooperative
housing corporation and a collateral assignment of the related
Co-op Lease.
Covered Loan : A Mortgage Loan categorized as
Covered pursuant to Appendix E of Standard & Poor’s
Glossary.
Custodial Account : The separate trust account
created and maintained pursuant to Subsection 2.04 of the
Interim Servicing Agreement (with respect to each Mortgage Loan, as
specified therein).
Custodial Agreement : The agreement(s) governing the
retention of the Mortgage Loan Documents. If more than
one Custodial Agreement is in effect at any given time, all of the
individual Custodial Agreements shall collectively be referred to
as the “Custodial Agreement.”
Custodian : Deutsche Bank Trust Company Americas, a New York
banking corporation, and its successors in interest, or any
successor to the Custodian under the Custodial Agreement as therein
provided.
Cut-off Date : The date or dates designated as such
on the related Purchase Price and Terms Agreement with respect to
the related Mortgage Loan Package.
Deemed Material and Adverse Representation : Each
representation and warranty identified as such in Section
9.02 of this Agreement.
Deleted Mortgage Loan : A Mortgage Loan that is
repurchased or replaced or to be replaced with a Qualified
Substitute Mortgage Loan by the Seller in accordance with the terms
of this Agreement.
Depositor : The depositor, as such term is defined
in Regulation AB, with respect to any Securitization
Transaction.
Determination Date : The date specified in the
Interim Servicing Agreement (with respect to each Mortgage Loan,
for an interim period, as specified therein).
Due Date : The day of the month on which the Monthly
Payment is due on a Mortgage Loan, exclusive of any days of
grace.
Escrow Payments : With respect to any Mortgage Loan,
the amounts constituting ground rents, taxes, assessments, water
rates, sewer rents, municipal charges, mortgage insurance premiums,
fire and hazard insurance premiums, condominium charges, and any
other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to the Mortgage or any other
document.
Exchange Act . The Securities Exchange Act of 1934,
as amended.
Fannie Mae : The Federal National Mortgage
Association, or any successor thereto.
Fannie Mae Guides : The Fannie Mae Sellers’
Guide and the Fannie Mae Servicers’ Guide, as amended or
restated from time to time.
Fannie Mae Transfer : As defined in Section
13 .
FHA : The Federal Housing Administration, an agency
within the United States Department of Housing and Urban
Development, or any successor thereto and including the Federal
Housing Commissioner and the Secretary of Housing and Urban
Development where appropriate under the FHA
Regulations.
Fixed Rate Mortgage Loan : A fixed rate mortgage
loan purchased pursuant to this Agreement.
Freddie Mac : The Federal Home Loan Mortgage
Corporation, or any successor thereto.
Freddie Mac Transfer : As defined in Section
13 .
Gross Margin : With respect to each Adjustable Rate
Mortgage Loan, the fixed percentage amount set forth in the related
Mortgage Note which amount is added to the Index in
accordance with the terms of
the related Mortgage Note to determine on each Interest Rate
Adjustment Date the Mortgage Interest Rate for such Mortgage
Loan.
High Cost Loan : A Mortgage Loan (a) covered by the
Home Ownership and Equity Protection Act of 1994 (“
HOEPA ”), (b) with an “annual percentage
rate” or total “points and fees” payable by the
related Mortgagor (as each such term is calculated under HOEPA)
that exceed the thresholds set forth by HOEPA and its implementing
regulations, including
12 C.F.R. § 226.32(a)(1)(i) and (ii), (c)
classified as a “high cost home,”
“threshold,” “covered,” (excluding New
Jersey “Covered Home Loans” as that term was defined in
clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), “high risk home,”
“predatory” or similar loan under any other applicable
state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage
loans having high interest rates, points and/or fees) or (d) a
Mortgage Loan categorized as High Cost pursuant to Appendix E of
Standard & Poor’s Glossary. For avoidance of
doubt, the parties agree that this definition shall apply to any
law regardless of whether such law is presently, or in the future
becomes, the subject of judicial review or litigation.
Home Loan : A Mortgage Loan categorized as a Home
Loan pursuant to Appendix E of the Standard & Poor’s
Glossary.
HUD : The Department of Housing and Urban
Development, or any federal agency or official thereof which may
from time to time succeed to the functions thereof with regard to
Mortgage Insurance issued by the FHA. The term
“HUD,” for purposes of this Agreement, is also deemed
to include subdivisions thereof such as the FHA and Government
National Mortgage Association.
Index : The index indicated in the related Mortgage
Note for each Adjustable Rate Mortgage Loan.
Insurance Proceeds : With respect to each Mortgage
Loan, proceeds of insurance policies insuring the Mortgage Loan or
the related Mortgaged Property.
Interest Rate Adjustment Date : With respect to each
Adjustable Rate Mortgage Loan, the date, specified in the related
Mortgage Note and the related Mortgage Loan Schedule, on which the
Mortgage Interest Rate is adjusted.
Interim Funder : With respect to each MERS
Designated Mortgage Loan, the Person named on the MERS System as
the interim funder pursuant to the MERS Procedures
Manual.
Interim Servicer : The servicer under the Interim
Servicing Agreement, or its successor in interest, or any successor
to the Interim Servicer under the Interim Servicing Agreement, as
therein provided.
Interim Servicing Agreement : The agreement to be
entered into by the Purchaser and the Interim Servicer, providing
for the Interim Servicer to service the Mortgage Loans as specified
by the Interim Servicing Agreement.
Investor : With respect to each MERS Designated
Mortgage Loan, the Person named on the MERS System as the investor
pursuant to the MERS Procedures Manual.
Lifetime Rate Cap : The provision of each Mortgage
Note related to an Adjustable Rate Mortgage Loan which provides for
an absolute maximum Mortgage Interest Rate
thereunder. The Mortgage Interest Rate during the terms
of each Adjustable Rate Mortgage Loan shall not at any time exceed
the Mortgage Interest Rate at the time of origination of such
Adjustable Rate Mortgage Loan by more than the amount per annum set
forth on the related Mortgage Loan Schedule.
Liquidation Proceeds : Cash received in connection
with the liquidation of a defaulted Mortgage Loan, whether through
the sale or assignment of such Mortgage Loan, trustee’s sale,
foreclosure sale or otherwise or the sale of the related Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of
the Mortgage Loan.
Loan-to-Value Ratio or LTV : With respect to any
Mortgage Loan, the ratio (expressed as a percentage) of the
outstanding principal amount of the Mortgage Loan as of the date of
origination (unless otherwise indicated), to the lesser of (a) the
Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the
related Mortgaged Property, the purchase price of the Mortgaged
Property.
Manufactured Home : A single family residential unit that is
constructed in a factory in sections in accordance with the Federal
Manufactured Home Construction and Safety Standards adopted on June
15, 1976, by the Department of Housing and Urban Development
(“ HUD Code ”), as amended in 2000, which
preempts state and local building codes. Each unit is
identified by the presence of a HUD Plate/Compliance Certificate
label. The sections are then transported to the site and
joined together and affixed to a pre-built permanent foundation
(which satisfies the manufacturer’s requirements and all
state, county, and local building codes and
regulations). The manufactured home is built on a
non-removable, permanent frame chassis that supports the complete
unit of walls, floors, and roof. The underneath part of
the home may have running gear (wheels, axles, and brakes) that
enable it to be transported to the permanent site. The
wheels and hitch are removed prior to anchoring the unit to the
permanent foundation. The manufactured home must be
classified as real estate and taxed accordingly. The
permanent foundation may be on land owned by the mortgager or may
be on leased land.
MERS : Mortgage Electronic Registration Systems,
Inc., a Delaware corporation, and its successors in
interest.
MERS Designated Mortgage Loan : Mortgage Loans for
which (a) the Seller has designated or will designate MERS as,
and has taken or will take such action as is necessary to cause
MERS to be, the mortgagee of record, as nominee for the Seller, in
accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the
MERS System.
MERS Procedure Manual : The MERS Procedures Manual,
as it may be amended, supplemented or otherwise modified from time
to time.
MERS Report : The report from the MERS System
listing MERS Designated Mortgage Loans and other
information.
MERS System : MERS mortgage electronic registry
system, as more particularly described in the MERS Procedures
Manual.
Monthly Payment : The scheduled monthly payment of
principal and interest on a Mortgage Loan.
Mortgage : The mortgage, deed of trust or other
instrument securing a Mortgage Note, which creates a first lien on
the Mortgaged Property. With respect to a Co-op Loan,
the Security Agreement.
Mortgage File : With respect to any Mortgage Loan,
the Mortgage Loan Documents and the items listed in Exhibit
A-2 annexed hereto and any additional documents required to be
added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate : The annual rate of interest
borne on a Mortgage Note with respect to each Mortgage
Loan.
Mortgage Interest Rate Cap : With respect to an
Adjustable Rate Mortgage Loan, the limit on each Mortgage Interest
Rate adjustment as set forth in the related Mortgage
Note.
Mortgage Loan : An individual Mortgage Loan which is
the subject of this Agreement, each Mortgage Loan originally sold
and subject to this Agreement being identified on the applicable
Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, Servicing Rights and all other rights, benefits, proceeds
and obligations arising from or in connection with such Mortgage
Loan, excluding replaced or repurchased mortgage
loans.
Mortgage Loan Documents : The documents required to
be delivered to the Custodian pursuant to Subsection 6.03
with respect to any Mortgage Loan.
Mortgage Loan Package : Each pool of Mortgage Loans,
which shall be purchased by the Purchaser from the Seller from time
to time on each Closing Date.
Mortgage Loan Schedule : The schedule of Mortgage
Loans setting forth the following information with respect to each
Mortgage Loan in the related Mortgage Loan Package: (1)
the Seller’s Mortgage Loan identifying number; (2) the
Mortgagor’s name; (3) the street address of the Mortgaged
Property including the city, state and zip code; (4) a code
indicating whether the Mortgagor is self-employed; (5) a code
indicating whether the Mortgaged Property is owner-occupied,
investment property or a second home; (6) the number and type of
residential units constituting the Mortgaged Property (e.g. single
family residence, a two- to four-family dwelling, condominium,
planned unit development or cooperative); (7) the
original
months
to maturity or the remaining months to maturity from the
related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual
amortization schedule; (8) the Loan-to-Value Ratio at
origination; (9) the Mortgage Interest Rate as of the related
Cut-off Date; (10) the date on which the first Monthly Payment
was due on the Mortgage Loan and, if such date is not
consistent with the Due Date currently in effect, the Due
Date; (11) the stated maturity date; (12) the amount of the
Monthly Payment as of the related Cut-off Date; (13) the last
payment date on which a payment was actually applied to the
outstanding principal balance; (14) the original principal
amount of the Mortgage Loan; (15) the principal balance of the
Mortgage Loan as of the close of business on the related
Cut-off Date, after deduction of payments of principal due and
collected on or before the related Cut-off Date; (16) with
respect to each First Lien Loan with a second lien behind it,
the combined principal balance of the Mortgage Loan as of the
close of business on the related origination date, after
deduction of payments of principal due and collected on or
before the related Cut-off Date; (17) [reserved]; (18) with
respect to Adjustable Rate Mortgage Loans, the Interest Rate
Adjustment Date; (19) with respect to Adjustable Rate Mortgage
Loans, the Gross Margin; (20) with respect to Adjustable Rate
Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (21) with respect to Adjustable Rate Mortgage
Loans, a code indicating the type of Index; (22) the type of
Mortgage Loan (i.e., Fixed Rate, Adjustable Rate); (23) a code
indicating the purpose of the loan (i.e., purchase, Rate/Term
Refinance or Cash-Out Refinance); (24) a code indicating the
documentation style (i.e. no documents, full, alternative,
reduced, no income/no asset, stated income, no ratio, reduced
or NIV); (25) asset verification (Y/N); (26) the loan credit
classification (as described in the Underwriting Guidelines);
(27) whether such Mortgage Loan provides for a Prepayment
Penalty; (28) the Prepayment Penalty period of such Mortgage
Loan, if applicable; (29) a description of the Prepayment
Penalty, if applicable; (30) the Mortgage Interest Rate as of
origination; (31) the credit risk score (FICO score); (32) the
date of origination; (33) with respect to Adjustable Rate
Mortgage Loans, the Mortgage Interest Rate adjustment period
with respect to (i) initial adjustment and (ii) periodic
adjustments following the initial adjustment; (34) with
respect to Adjustable Rate Mortgage Loans, the Mortgage
Interest Rate adjustment percentage with respect to (i)
initial adjustment and (ii) periodic adjustments following the
initial adjustment; (35) with respect to Adjustable Rate
Mortgage Loans, the Mortgage Interest Rate floor; (36) the
Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other); (37) with respect to Adjustable Rate
Mortgage Loans, the Periodic Rate Cap as of the first Interest
Rate Adjustment Date; (38) with respect to each Adjustable
Rate Mortgage Loan, a code indicating whether the Mortgage
Loan provides for negative amortization; (39) with respect to
each Adjustable Rate Mortgage Loan with negative amortization,
the negative amortization limit; (40) a code indicating
whether the Mortgage Loan is a High Cost Loan; (41) a code
indicating whether the Mortgage Loan is a Balloon Mortgage
Loan; (42) a code indicating whether the Mortgage Loan by its
original terms or any modifications thereof provides for
amortization beyond its scheduled maturity date; (43) the
original Monthly Payment due; (44) the Appraised Value; (45)
appraisal type; (46) appraisal date; (47) a code indicating
whether the Mortgage Loan is covered by a PMI Policy and, if
so, identifying the PMI Policy provider; (48) in connection
with a condominium unit, a code indicating whether the
condominium project where such unit is located is low-rise or
high-rise; (49) a code indicating whether the Mortgaged
Property is a leasehold estate; (50) with respect to the
related Mortgagor, the debt-to-income ratio; (51) sales price;
(52) automated valuation model (AVM); and (53) the MERS
Identification Number, if applicable. With
respect
to
the Mortgage Loans in the aggregate, the related Mortgage Loan
Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage
Loans; (2) the current aggregate outstanding principal balance
of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; (4) the weighted average
maturity of the Mortgage Loans; (5) the average principal
balance of the Mortgage Loans; (6) the applicable Cut-off
Date; and (7) the applicable Closing Date.
Mortgage Note : The note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged Property : With respect to a Mortgage Loan
that is not a Co-op Loan, the Mortgagor’s real property
securing repayment of a related Mortgage Note, consisting of an
unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold
estates for residential properties is a widely-accepted practice, a
leasehold estate, in a single parcel or multiple parcels of real
property improved by a Residential Dwelling. With respect to a
Co-op Loan, the stock allocated to a dwelling unit in the
residential cooperative housing corporation that was pledged to
secure such Co-op Loan and the related Co-op Lease.
Mortgagor : The obligor on the related Mortgage
Note.
Nonrecoverable Advance : Any advance previously made
or proposed to be made in respect of a Mortgage Loan which, in the
good faith judgment of the Interim Servicer, will not or, in the
case of a proposed advance, would not, be ultimately recoverable
from related Insurance Proceeds, Liquidation Proceeds or
otherwise. The determination by the Interim Servicer
that it has made a Nonrecoverable Advance or that any proposed
advance of principal and interest, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officers’
Certificate delivered to the Purchaser.
Officer’s Certificate : A certificate signed
by the Chairman of the Board or the Vice Chairman of the Board or a
President or a Vice President and by the Treasurer or the Secretary
or one of the Assistant Treasurers or Assistant Secretaries of the
Seller, and delivered to the Purchaser as required by this
Agreement.
Periodic Rate Cap : The provision of each Mortgage
Note related to an Adjustable Rate Mortgage Loan which provides for
an absolute maximum amount by which the Mortgage Interest Rate
therein may increase or decrease on an Interest Rate Adjustment
Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate
Mortgage Loan is the rate set forth as such on the related Mortgage
Loan Schedule.
Periodic Rate Floor : With respect to each
Adjustable Rate Mortgage Loan, the provision of each Mortgage Note
which provides for an absolute maximum amount by which the Mortgage
Interest Rate therein may decrease on an Interest Rate Adjustment
Date below the Mortgage Interest Rate previously in
effect.
Person : Any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any
agency or political subdivision thereof.
PMI Policy : A policy of primary mortgage guaranty
insurance issued by an insurer acceptable under the Underwriting
Guidelines and qualified to do business in the jurisdiction where
the Mortgaged Property is located.
Preliminary Mortgage Schedule : As defined in
Section 3 .
Prepayment Penalty : With respect to each Mortgage
Loan, the amount of any premium or penalty required to be paid by
the Mortgagor if the Mortgagor prepays such Mortgage Loan as
provided in the related Mortgage Note or Mortgage.
Principal Prepayment : Any payment or other recovery
of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date, including any Prepayment Penalty thereon, and
which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Purchase Price : The price paid on the related
Closing Date by the Purchaser to the Seller in exchange for the
Mortgage Loans purchased on such Closing Date as calculated in
Section 4 of this Agreement.
Purchase Price and Terms Agreement : Those certain
agreements setting forth the general terms and conditions of the
transactions consummated herein and identifying the Mortgage Loans
to be purchased from time to time hereunder, by and between the
Seller and the Purchaser.
Purchaser : Morgan Stanley Mortgage Capital Inc., a
New York corporation, and its successors in interest and assigns,
or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Appraiser : An appraiser, duly appointed
by the Seller, who had no interest, direct or indirect, in the
Mortgaged Property or in any loan made on the security thereof, and
whose compensation was not affected by the approval or disapproval
of the Mortgage Loan, and such appraiser and the appraisal made by
such appraiser both satisfied the requirements of Title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989 and the regulations promulgated thereunder, all as in effect
on the date the Mortgage Loan was originated.
Qualified Correspondent : Any Person from which the
Seller purchased Mortgage Loans, provided that the following
conditions are satisfied: (i) such Mortgage Loans were
originated pursuant to an agreement between the Seller and such
Person that contemplated that such Person would underwrite mortgage
loans from time to time, for sale to the Seller, in accordance with
underwriting guidelines designated by the Seller (“
Designated Guidelines ”) or guidelines that do not
vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above
and were acquired by the Seller within 180 days after origination;
(iii) either (x) the Designated Guidelines were, at the time
such
Mortgage
Loans were originated, used by the Seller in origination of
mortgage loans of the same type as the Mortgage Loans for the
Seller’s own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten,
designated by the Seller on a consistent basis for use by
lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such
Mortgage Loans were acquired by the Seller, pre-purchase or
post-purchase quality assurance procedures (which may involve,
among other things, review of a sample of mortgage loans
purchased during a particular time period or through
particular channels) designed to ensure that Persons from
which it purchased mortgage loans properly applied the
underwriting criteria designated by the Seller.
Qualified Substitute Mortgage Loan : A mortgage loan
eligible to be substituted by the Seller for a Deleted Mortgage
Loan which must, on the date of such substitution, be approved by
the Purchaser and (i) have an unpaid principal balance, after
deduction of all scheduled payments due in the month of
substitution (or in the case of a substitution of more than one
mortgage loan for a Deleted Mortgage Loan, an aggregate principal
balance), not in excess of the unpaid principal balance of the
Deleted Mortgage Loan (the amount of any shortfall will be
deposited in the Custodial Account by the Seller in the month of
substitution); (ii) have a Mortgage Interest Rate not less
than and not more than one percent (1%) greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a
remaining term to maturity not greater than and not more than one
(1) year less than that of the Deleted Mortgage Loan; (iv) be
of the same type as the Deleted Mortgage Loan (i.e., fixed rate or
adjustable rate with same Mortgage Interest Rate Cap and Index);
(v) comply as of the date of substitution with each
representation and warranty set forth in Section 9 of this
Agreement; (vi) be current in the payment of principal and
interest; (vii) be secured by a Mortgaged Property of the same type
and occupancy status as secured the Deleted Mortgage Loan; and
(viii) have payment terms that do not vary in any material respect
from those of the Deleted Mortgage Loan.
Rate/Term Refinance : A refinanced Mortgage Loan, in
which the proceeds received were not in excess of the amount of
funds required to repay the principal balance of any existing first
mortgage loan on the related Mortgaged Property, pay related
closing costs and satisfy any outstanding subordinate mortgages on
the related Mortgaged Property, as determined in accordance with
Seller’s Underwriting Guidelines.
Reconstitution : Any Securitization Transaction or a
Whole Loan Transfer.
Reconstitution Agreements : As defined in Section
13 hereof.
Reconstitution Date : As defined in Section
13 .
Regulation AB: Subpart 229.1100 –
Asset Backed Securities (Regulation AB), 17 C.F.R.
§§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).
Repurchase Price : As defined in the related
Purchase Price and Terms Agreement.
Residential Dwelling : Any one of the following:
(i) a detached one-family dwelling, (ii) a detached two-
to four-family dwelling, (iii) a one-family dwelling unit in a
condominium project or (iv) a one-family dwelling in a planned unit
development, none of which is a co-operative, mobile or
manufactured home.
RESPA : Real Estate Settlement Procedures Act, as
amended from time to time.
Securities Act : The Securities Act of 1933, as
amended.
Securitization Transaction : Any transaction
involving either (1) a sale or other transfer of some or all
of the Mortgage Loans directly or indirectly to an issuing entity
in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an
issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by
reference to one or more portfolios of residential mortgage loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Security Agreement : The agreement creating a
security interest in the stock allocated to a dwelling unit in the
residential cooperative housing corporation that was pledged to
secure such Co-op Loan and the related Co-op Lease.
Seller : As defined in the initial paragraph of the
Agreement, together with its successors in interest.
Seller Information : As defined in Subsection
34.04(a) .
Servicing Fee : With respect to each Mortgage Loan,
a fee payable monthly equal to one-twelfth of the product of
(a) the Servicing Fee Rate and (b) the outstanding
principal balance of such Mortgage Loan. Such fee shall
be payable monthly and shall be pro-rated for any portion of a
month during which the Mortgage Loan is serviced by the Seller
under this Agreement. The obligation of the Purchaser to
pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries
with respect to interest from Liquidation Proceeds, to the extent
permitted by this Agreement) of such Monthly Payment collected by
the Seller, or as otherwise provided under this
Agreement.
Servicing Fee Rate : An amount per annum as set
forth in the related Purchase Price and Terms
Agreement.
Servicing File : With respect to each Mortgage Loan,
the file retained by the Interim Servicer consisting of originals
of all documents in the Mortgage File which are not delivered to
the Purchaser or the Custodian and copies of the Mortgage Loan
Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights : Any and all of the
following: (a) any and all rights to service the
Mortgage Loans; (b) any payments to or monies received by the
Seller for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans;
(d) all agreements or documents creating, defining or evidencing
any such servicing rights to the extent they relate to such
servicing rights and all rights of the Seller thereunder;
(e) Escrow Payments or other similar payments with respect to
the Mortgage Loans and any amounts actually collected by the Seller
with respect thereto; (f) all accounts and other rights to payment
related to any of the property described in this paragraph; and (g)
any and all documents, files, records, servicing files, servicing
documents, servicing records, data tapes, computer records, or
other information pertaining to the Mortgage Loans or pertaining to
the past, present or prospective servicing of the Mortgage
Loans.
Sponsor : The sponsor, as such term is defined in
Regulation AB, with respect to any Securitization
Transaction.
Standard & Poor’s : Standard &
Poor’s Ratings Services, a division of The McGraw-Hill
Companies Inc., and any successor thereto.
Standard & Poor’s Glossary : The Standard
& Poor’s LEVELS® Glossary, as may be in effect from
time to time.
Stated Principal Balance : As to each Mortgage Loan
on any date of determination, (i) the principal balance of
such Mortgage Loan at the related Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent
actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal on such
Mortgage Loan.
Successor Servicer : Any servicer of one or more
Mortgage Loans designated by the Purchaser as being entitled to the
benefits of the indemnifications set forth in Subsections
9.03 and 14.01 .
Third-Party Originator : Each Person, other than a
Qualified Correspondent, that originated Mortgage Loans acquired by
the Seller.
Transfer
Date : The date on which the Purchaser, or its
designee, shall receive the transfer of servicing
responsibilities and begin to perform the servicing of the
Mortgage Loans with respect to the related Mortgage Loan
Package, and the Interim Servicer shall cease all servicing
responsibilities.
Underwriting Guidelines : The underwriting
guidelines of the Seller, a copy of which is attached as an exhibit
to the related Assignment and Conveyance.
Whole Loan Transfer : Any sale or transfer of some
or all of the Mortgage Loans, other than a Securitization
Transaction.
SECTION
2.
Agreement to Purchase .
The Seller
agrees to sell from time to time, and the Purchaser agrees to
purchase from time to time, Mortgage Loans having an
aggregate principal balance on the related Cut-off Date in an
amount as set forth in the related Purchase Price and Terms
Agreement, or in such other amount as agreed by the Purchaser
and the Seller as evidenced by the actual aggregate principal
balance of the Mortgage Loans accepted by the Purchaser on
each Closing Date, together with the related Mortgage Files
and all rights and obligations arising under the documents
contained therein.
SECTION
3.
Mortgage Schedules .
The Seller
from time to time shall provide the Purchaser with certain
information constituting a preliminary listing of the
Mortgage Loans to be purchased on each Closing Date in
accordance with the related Purchase Price and Terms
Agreement and this Agreement (each, a “ Preliminary
Mortgage Schedule ”).
The Seller
shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date
to the Purchaser at least five (5) Business Days prior to the
related Closing Date. The related Mortgage Loan
Schedule shall be the related Preliminary Mortgage Schedule
with those Mortgage Loans which have not been funded prior to
the related Closing Date deleted.
SECTION
4.
Purchase Price .
The Purchase
Price for each Mortgage Loan shall be the percentage of par
as stated in the related Purchase Price and Terms Agreement
(subject to adjustment as provided therein), multiplied by
the aggregate principal balance, as of the related Cut-off
Date, of the Mortgage Loans listed on the related Mortgage
Loan Schedule, after application of scheduled payments of
principal due on or before the related Cut-off Date, whether
or not received by the Seller. The initial
principal amount of the related Mortgage Loans shall be the
aggregate principal balance of the Mortgage Loans, so
computed as of the related Cut-off Date. If so
provided in the related Purchase Price and Terms Agreement,
portions of the Mortgage Loans shall be priced
separately.
In addition
to the Purchase Price as described above, the Purchaser shall
pay to the Seller, on the related Closing Date, accrued
interest on the current principal amount of the related
Mortgage Loans as of the related Cut-off Date at the weighted
average Mortgage Interest Rate of those Mortgage
Loans. The Purchase Price plus accrued interest as
set forth in the
preceding paragraph shall be
paid to the Seller by wire transfer of immediately available
funds to an account designated by the Seller in
writing.
Upon
Seller’s receipt of the related Purchase Price, the
Purchaser shall be entitled to (1) all scheduled
principal due after the related Cut-off Date, (2) all
other recoveries of principal collected on or after the
related Cut-off Date, and (3) all payments of interest
on the Mortgage Loans net of applicable Servicing Fees (minus
that portion of any such payment which is allocable to the
period prior to the related Cut-off Date). The
outstanding principal balance of each Mortgage Loan as of the
related Cut-off Date is determined after application of
payments of principal due on or before the related Cut-off
Date, to the extent actually collected, together with any
unscheduled principal prepayments collected prior to such
Cut-off Date; provided, however, that payments of scheduled
principal and interest paid prior to such Cut-off date, but
to be applied on a Due Date beyond the related Cut-off Date
shall not be applied to the principal balance as of the
related Cut-off Date. Such prepaid amounts shall
be the property of the Purchaser. The Seller shall
deposit any such prepaid amounts into the Custodial Account,
which account is established for the benefit of the Purchaser
for subsequent remittance by the Seller to the
Purchaser..
SECTION
5.
Examination of Mortgage Files .
At least ten
(10) Business Days prior to the related Closing Date, the
Seller shall (a) deliver to the Purchaser or its
designee in escrow, for examination with respect to each
Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to
each Mortgage Loan, or (b) make the related Mortgage
File available to the Purchaser for examination at such other
location as shall otherwise be acceptable to the
Purchaser. Such examination may be made by the
Purchaser or its designee at any reasonable time before or
after the related Closing Date. If the Purchaser
makes such examination prior to the related Closing Date and
determines, in its sole reasonable discretion, that any
Mortgage Loans do not conform to the requirements of this
Agreement and/or the related Purchase Price and Terms
Agreement, the Purchaser shall provide notice to the Seller
describing such defect. The Seller, at its option,
may cure the defect or the applicable Mortgage Loans shall be
deleted from the related Mortgage Loan Schedule, and may be
replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at
its option and without notice to the Seller, purchase some or
all of the Mortgage Loans without conducting any partial or
complete examination. The fact that the Purchaser
or its designee has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall
not affect the Purchaser’s (or any of its
successor’s) rights to demand repurchase, substitution
or other relief as provided herein.
Each of the
Purchaser and the Seller agree that all mortgage loan
application documents requiring the Mortgagor’s
signature and other related documents and disclosures may be
provided by the Seller and executed by the Mortgagor, as
applicable, electronically in compliance with the federal
Electronic Signatures in Global and National Commerce Act and
the state Uniform Electronic Transactions Acts, as
applicable.
SECTION
6.
Conveyance from Seller to Purchaser .
Subsection
6.01
Conveyance of Mortgage Loans .
The Seller
shall, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to
be purchased on each Closing Date, execute and deliver an
Assignment and Conveyance Agreement in the form attached
hereto as Exhibit H (the “ Assignment
and Conveyance Agreement ”) and, upon
Seller’s receipt of the Purchase Price, ownership of
the related Mortgage Loan shall vest in the
Purchaser. The Seller shall ensure that the
contents of each Servicing File, which is required to be
retained by or delivered to the Interim Servicer to service
the Mortgage Loans pursuant to the Interim Servicing
Agreement and thus not delivered to the Purchaser, or its
designee, are and shall be held in trust by the Interim
Servicer for the benefit of the Purchaser as the owner
thereof. The Seller agrees that the Interim
Servicer’s possession of any portion of each such
Mortgage File is at the will of the Purchaser for the sole
purpose of facilitating servicing of the Mortgage Loans
pursuant to this Agreement, and such retention and possession
by the Interim Servicer shall be in a custodial capacity
only. The ownership of each Mortgage Note, each
Mortgage and the contents of each Mortgage File is vested in
the Purchaser and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or
which come into the possession of the Interim Servicer shall
immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Interim Servicer at the will of
the Purchaser in such custodial capacity only. The
Seller shall cause the Servicing File retained by the Interim
Servicer pursuant to this Agreement to be appropriately
identified in the Seller’s computer system and/or books
and records, as appropriate, to clearly reflect the sale of
the related Mortgage Loan to the Purchaser. The
Seller shall cause the Interim Servicer to release from its
custody the contents of any Servicing File retained by it
only in accordance with this Agreement or the Interim
Servicing Agreement, except when such release is required in
connection with a repurchase of any such Mortgage Loan
pursuant to Subsection 9.03 or if required under
applicable law or court order
Subsection
6.02
Books and Records .
Record title
to each Mortgage and the related Mortgage Note as of the
related Closing Date shall be in the name of the Seller, an
Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select;
provided, however , that if a Mortgage has been
recorded in the name of MERS or its designee, the Seller is
shown as the owner of the related Mortgage Loan on the
records of MERS for purposes of the system of recording
transfers of beneficial ownership of mortgages maintained by
MERS. Notwithstanding the foregoing, ownership of
each Mortgage and related Mortgage Note shall be vested
solely in the Purchaser or the appropriate designee of the
Purchaser, as the case may be. All rights arising
out of the Mortgage Loans including, but not limited to, all
funds received by the Seller or the Interim Servicer after
the related Cut-off Date on or in connection with a Mortgage
Loan shall be vested in the Purchaser or one or more
designees of the Purchaser; provided, however , that
all funds received on or in connection with a Mortgage Loan
shall be received and held by the Seller or the Interim
Servicer in trust for the benefit of the Purchaser or the
appropriate designee of the Purchaser, as the case may be, as
the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
The Seller
shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Mortgage Loan
which shall be marked clearly to reflect the ownership of
each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession,
available for inspection by the Purchaser, and shall deliver
to the Purchaser upon demand, evidence of compliance with all
federal, state and local laws, rules and regulations, and
requirements of Fannie Mae or Freddie Mac, including but not
limited to documentation as to the method used in determining
the applicability of the provisions of the National Flood
Insurance Act of 1968, as amended, to the Mortgaged Property,
documentation evidencing insurance coverage and periodic
inspection reports, as required by the Fannie Mae
Guides. To the extent that original documents are
not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the
Seller may be in the form of microfilm or microfiche so long
as the Seller complies with the requirements of the Fannie
Mae Guides.
It is the
express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a
sale of the related Mortgage Loans by the Seller and not a
pledge of such Mortgage Loans by the Seller to the Purchaser
to secure a debt or other obligation of the
Seller. Consequently, the sale of each Mortgage
Loan shall be reflected as a purchase on the
Purchaser’s business records, tax returns and financial
statements, and as a sale of assets on the Seller’s
business records, tax returns and financial
statements.
Subsection
6.03
Delivery of Mortgage Loan Documents .
The Seller
shall deliver and release to the Custodian no later than two
(2) Business Days prior to the related Closing Date those
Mortgage Loan Documents set forth on Exhibit A-2
hereto with respect to each Mortgage Loan set forth on the
related Mortgage Loan Schedule.
The
Purchaser acknowledges that the Seller may deliver the
Mortgage Loan Documents to the Custodian and the Purchaser in
the form of copies reproduced from electronic images of
original documents (“Original Documents”) stored
on CD ROM or magnetic tape (“Imaged Documents”),
not to include any documents the originals of which are
required to be delivered pursuant to this
Agreement.
The Seller
shall promptly, upon the reasonable request of the Purchaser
and at the Seller’s expense, produce true, correct,
complete, clear and legible copies of the Original Documents
or a certified true copy of the Original Documents regarding
any Original Document for which the Imaged Document is
unclear, illegible, incorrect, incomplete, unable to be
transmitted or electronically read or downloaded by
Purchaser, or an untrue copy. Seller shall, upon
Purchaser’s reasonable request and at Seller’s
expense, fully cooperate with Purchaser and take any
reasonable and customary actions in connection with the
introduction into evidence of any Imaged Document in any
judicial or administrative proceeding, including, but not
limited to, an arbitration or mediation, including producing
appropriate qualified and knowledgeable personnel to testify
as necessary to qualify the Imaged Documents as
evidence.
The
Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial
Agreement for the related Closing Date, as
evidenced
by the Initial Certification of the Custodian in the form
annexed to the Custodial Agreement. The Purchaser
shall pay all fees and expenses of the Custodian.
The Seller
shall forward to the Custodian, or to such other Person as
the Purchaser shall designate in writing, original documents
evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance
with this Agreement within two weeks of their execution,
provided, however , that the Seller shall provide
the Custodian, or to such other Person as the Purchaser shall
designate in writing, with a certified true copy of any such
document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any
document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a
true and complete copy of the original within one hundred
twenty days of its submission for recordation.
In the event
any document required to be delivered to the Custodian in
accordance with this Agreement, including an original or
imaged copy of any document submitted for recordation to the
appropriate public recording office, is not delivered to the
Custodian, or to such other Person as the Purchaser shall
designate in writing, within 120 days following the related
Closing Date (other than with respect to the Assignments of
Mortgage which shall be delivered to the Custodian in blank
and recorded subsequently by the Purchaser or its designee,
provided that the foregoing proviso does not apply to the
MERS Designated Loans, and in the event that the Seller does
not cure such failure within 30 days of discovery or receipt
of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the
Purchaser, be repurchased by the Seller at the price and in
the manner specified in Subsection 9.03
. The foregoing repurchase obligation shall not
apply in the event that the Seller cannot deliver the
Mortgage Loan Documents as set forth on Exhibit A
hereto, submitted for recordation to the appropriate public
recording office within the specified period due to a delay
caused by the recording office in the applicable
jurisdiction; provided that the Seller shall instead deliver
a recording receipt, or an imaged copy thereof, as
applicable, of such recording office or, if such recording
receipt is not available, an officer’s certificate of a
servicing officer of the Seller, confirming that such
documents have been accepted for recording; provided that,
upon request of the Purchaser and delivery by the Purchaser
to the Seller of a schedule of the related Mortgage Loans,
the Seller shall reissue and deliver to the Purchaser or its
designee said officer’s certificate.
The Seller
shall pay all initial recording fees, if any, for the
Assignments of Mortgage and any other fees or costs in
transferring all Mortgage Loan Documents to the Custodian or,
upon written request of the Purchaser, to the Purchaser or
the Purchaser’s designee. The Purchaser or
the Purchaser’s designee shall be responsible for
recording the Assignments of Mortgage (with respect to the
Mortgage Loans other than the MERS Designated Loans) and
shall be reimbursed by the Seller for the costs associated
therewith pursuant to the preceding sentence.
Subsection
6.04
Quality Control Procedures .
The Seller
shall have an internal quality control program that verifies,
on a regular basis, the existence and accuracy of the legal
documents, credit documents, property appraisals, and
underwriting decisions. The program shall include
evaluating and monitoring the overall
quality
of the Seller’s loan production and the servicing
activities of the Seller as Interim Servicer. The
program is to ensure that the Mortgage Loans are originated in
accordance with the Underwriting Guidelines; guard against
dishonest, fraudulent, or negligent acts; and guard against
errors and omissions by officers, employees, or other
authorized persons.
Subsection
6.05
MERS Designated Loans .
With respect
to each MERS Designated Mortgage Loan, the Seller shall, on
the first Business Day following the related Closing Date,
designate the Purchaser as the Investor and the Custodian as
custodian, and no Person shall be listed as Interim Funder on
the MERS System. In addition, on or prior to the
related Closing Date, Seller shall provide the Custodian and
the Purchaser with a MERS Report listing the Purchaser as the
Investor, the Custodian as custodian and no Person as Interim
Funder with respect to each MERS Designated Mortgage
Loan.
SECTION
7.
Servicing of the Mortgage Loans .
The Mortgage
Loans have been sold by the Seller to the Purchaser on a
servicing released basis. Subject to and upon the
terms and conditions of this Agreement and the Interim
Servicing Agreement (with respect to each Mortgage Loan, for
an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the
Purchaser the Servicing Rights.
The
Purchaser shall retain the Seller as Interim Servicer as
contract servicer of the Mortgage Loans for an interim period
pursuant to and in accordance with the terms and conditions
contained in the Interim Servicing Agreement (with respect to
each Mortgage Loan, for an interim period, as specified
therein). The Seller shall execute the Interim
Servicing Agreement on the initial Closing Date.
The Seller
shall transfer the servicing of the Mortgage Loans
on each Transfer Date in accordance with the terms of the
Interim Servicing Agreement.
SECTION
8.
Representations and Warranties Regarding the Purchaser
.
The
Purchaser represents, warrants and covenants to the Seller
that as of each Closing Date:
(a)
Due Organization and Authority . The Purchaser is a
corporation duly organized, validly existing and in good standing
under the laws of the state of New York and has all licenses
necessary to carry on its business as now being
conducted. The execution, delivery and performance of
this Agreement by the Purchaser and the consummation of the
transactions contemplated hereby and thereby have been duly and
validly authorized; this Agreement and all agreements contemplated
hereby have been duly executed and delivered and constitute the
valid, legal, binding and enforceable obligations of the Purchaser,
regardless of whether such enforcement is sought in a proceeding in
equity or at law; and all requisite corporate action has been taken
by the Purchaser to make this Agreement and all agreements
contemplated hereby valid and binding upon the Purchaser in
accordance with their terms;
(b)
No Conflicts . Neither the execution and delivery of
this Agreement, the consummation of the transactions contemplated
hereby and thereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or
result in a breach of any of the terms, conditions or provisions of
the Purchaser’s charter or by-laws or any legal restriction
or any agreement or instrument to which the Purchaser is now a
party or by which it is bound;
(c)
No Litigation Pending . No litigation or
administrative proceeding of or before any court, tribunal or
governmental body is currently pending or to the knowledge of the
Purchaser threatened, against the Purchaser or with respect to this
Agreement, which if adversely determined would have a material
adverse effect on the transactions contemplated by this
Agreement;
(d)
No Consent Required . No consent, approval,
authorization or order of, or registration or filing with, or
notice to any court or governmental agency or body is required for
the execution, delivery and performance by the Purchaser of or
compliance by the Purchaser with this Agreement or the consummation
of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the related Closing
Date;
(e)
No Brokers . The Seller has not dealt with any
broker, investment banker, agent or other person that may be
entitled to any commission or compensation in connection with the
sale of the Mortgage Loans;
(f)
Ordinary Course of Business . The consummation of
the transactions contemplated by this Agreement is in the ordinary
course of business of the Purchaser; and
(g)
Privacy . Purchaser agrees and acknowledges that as
to all nonpublic personal information received or obtained by it
with respect to any related Mortgagor: (i) such information is and
shall be held by Purchaser in accordance with all applicable law,
including but not limited to the privacy provisions of the
Gramm-Leach-Bliley Act; (ii) such information is received in
connection with a proposed or actual secondary market sale related
to a transaction of the Mortgagor for purposes of 16
C.F.R.§313.14(a)(3); and (iii) Purchaser is hereby prohibited
from disclosing or using any such information other than to carry
out the express provisions of this Agreement, or as otherwise
permitted by applicable law;
SECTION
9.
Representations, Warranties and Covenants of the Seller; Remedies
for Breach .
Subsection
9.01
Representations and Warranties Regarding the Seller
.
The Seller
represents, warrants and covenants to the Purchaser that as
of the date hereof and as of each Closing Date:
(a)
Due Organization and Authority . The Seller is a Michigan
corporation, validly existing, and in good standing under the laws
of its jurisdiction of incorporation or formation and has all
licenses necessary to carry on its business as now being conducted
and is licensed, qualified and in good standing in the states where
the Mortgaged Property is located if
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 two complete
fiscal years and any later quarter ended more than 60 days prior to
the execution of this Agreement. All such financial
statements fairly present the pertinent results of operations and
material changes in financial position for each of such periods and
the financial position at the end of each such period of the Seller
and its subsidiaries and have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as set forth in the notes
thereto. There has been no change in the business,
operations, financial condition, properties or assets of the Seller
since the date of the Seller’s financial statements that
would have a material adverse effect on its ability to perform its
obligations under this Agreement. The Seller has
completed any forms requested by the Purchaser in a timely manner
and in accordance with the provided instructions;
(j)
Selection Process . The Mortgage Loans were selected
from among the outstanding one- to four-family mortgage loans in
the Seller’s portfolio at the related Closing Date as to
which the representations and warranties set forth in Subsection
9.02 could be made and such selection was not made in a manner
so as to affect adversely the interests of the
Purchaser;
(k)
Delivery to the Custodian . The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents
required to be delivered with respect to each
Mortgage
Loan shall be delivered to the Custodian all in compliance
with the specific requirements of this
Agreement. With respect to each Mortgage
Loan, the Seller will be in possession of a complete Mortgage
File in compliance with Exhibit A hereto, except for
such documents as will be delivered to the
Custodian;
(l)
Mortgage Loan Characteristics . The characteristics
of the related Mortgage Loan Package are as set forth on the
description of the pool characteristics for the applicable Mortgage
Loan Package delivered pursuant to Section 11 on the related
Closing Date in the form attached as Exhibit B to each
related Assignment and Conveyance Agreement;
(m)
No Untrue Information . To the Seller’s
knowledge, neither this Agreement nor any information, statement,
tape, diskette, report, form, or other document furnished or to be
furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby (including any Securitization
Transaction or Whole Loan Transfer) contains or will contain any
untrue statement of fact or omits or will omit to state a fact
necessary to make the statements contained herein or therein not
misleading;
(n)
No Brokers . The Seller has not dealt with any
broker, investment banker, agent or other person that may be
entitled to any commission or compensation in connection with the
sale of the Mortgage Loans;
(o)
Sale Treatment . The Seller expects to be advised by
its independent certified public accountants that under generally
accepted accounting principles the transfer of the Mortgage Loans
will be treated as a sale on the books and records of the Seller
and the Seller has determined that the disposition of the Mortgage
Loans pursuant to this Agreement will be afforded sale treatment
for tax and accounting purposes;
(p)
Owner of Record . The Seller is the owner of record
of each Mortgage and the indebtedness evidenced by each Mortgage
Note, except for the Assignments of Mortgage which have been sent
for recording, and upon recordation the Seller will be the owner of
record of each Mortgage and the indebtedness evidenced by each
Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect
thereto in trust only for the purpose of servicing and supervising
the servicing of each Mortgage Loan;
(q)
Reasonable Purchase Price . The consideration
received by the Seller upon the sale of the Mortgage Loans under
this Agreement constitutes fair consideration and reasonably
equivalent value for the Mortgage Loans;
(r)
Ability to Service . The Seller is an approved servicer of
conventional residential mortgage loans for Fannie Mae or Freddie
Mac, with the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans. The Seller is in good
standing to enforce and sell mortgage loans to and service mortgage
loans in the jurisdictions wherein the Mortgaged Properties are
located and for Fannie Mae or Freddie Mac, and no event has
occurred, including but not limited to a change in insurance
coverage, which would make the Seller unable to comply with Fannie
Mae or Freddie
Mac
eligibility requirements or which would require notification
to either Fannie Mae or Freddie Mac;
(s)
Reasonable Servicing Fee . The Seller acknowledges and agrees
that the Servicing Fee represents reasonable compensation for
performing such services and that the entire Servicing Fee shall be
treated by the Seller, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement; and
(t)
Fair Credit Reporting Act . The Seller has fully
furnished (or caused to be furnished), in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and Trans Union Credit
Information Company, or any their successors and assigns (three of
the credit repositories), on a monthly basis.
Subsection
9.02
Representations and Warranties Regarding Individual Mortgage
Loans . The Seller hereby represents and warrants to
the Purchaser that, as to each Mortgage Loan, as of the related
Closing Date for such Mortgage Loan:
(a)
Mortgage Loans as Described . The information set
forth in the related Mortgage Loan Schedule is complete, true and
correct;
(b)
Payments Current . All payments required to be made
up to the related Closing Date for the Mortgage Loan under the
terms of the Mortgage Note have been made and
credited. No payment required under the Mortgage Loan is
30 days or more delinquent nor has any payment under the
Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan;
(c)
No Outstanding Charges . There are no defaults in
complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for every
such item which remains unpaid and which has been assessed but is
not yet due and payable. The Seller has not advanced
funds, or induced, solicited or knowingly received any advance of
funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or
date of disbursement of the Mortgage Loan proceeds, whichever is
earlier, to the day which precedes by one month the related Due
Date of the first installment of principal and
interest;
(d)
Original Terms Unmodified . The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any
respect, from the date of origination except by a written
instrument which has been recorded, if necessary to protect the
interests of the Purchaser, and which has been delivered to the
Custodian or to such other Person as the Purchaser shall designate
in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. The substance of any such
waiver, alteration or modification has been approved by the issuer
of any related PMI Policy and the title insurer, if any, to the
extent
required
by the policy, and its terms are reflected on the related
Mortgage Loan Schedule, if applicable. No Mortgagor
has been released, in whole or in part, except in connection
with an assumption agreement, approved by the issuer of any
related PMI Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part
of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the related Mortgage
Loan Schedule;
(e)
No Defenses . The Mortgage Loan is not subject to
any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage,
or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject
to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(f)
Hazard Insurance . Pursuant to the terms of the
Mortgage, all buildings or other improvements upon the Mortgaged
Property are insured by a generally acceptable insurer against loss
by fire, hazards of extended coverage and such other hazards as are
provided for in the Underwriting Guidelines. If required
by the National Flood Insurance Act of 1968, as amended, each
Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance
Administration as in effect which policy conforms with the
Underwriting Guidelines. All individual insurance
policies contain a provision that names the Purchaser and its
successors and assigns as mortgagee upon the transfer of the
Mortgage File to the Custodian, and all premiums thereon have been
paid. The Mortgage obligates the Mortgagor thereunder to
maintain the hazard insurance policy at the Mortgagor’s cost
and expense, and on the Mortgagor’s failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such
insurance at such Mortgagor’s cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been given
an opportunity to choose the carrier of the required hazard
insurance, provided the policy is not a “ master
” or “ blanket ” hazard insurance policy
covering a condominium, or any hazard insurance policy covering the
common facilities of a planned unit development. The
hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and
effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this
Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor’s having engaged in, any act or
omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity
and binding effect of either including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the
Seller;
(g)
Compliance with Applicable Laws . Any and all
requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, predatory, abusive and fair
lending, equal credit opportunity and disclosure laws applicable to
the Mortgage Loan, including, without limitation, any provisions
relating to a Prepayment Penalty have been complied with, the
consummation of the transactions contemplated hereby will not
involve the violation of any such
laws
or regulations, and the Seller shall maintain in its
possession, available for the Purchaser’s inspection,
and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements. This
representation and warranty is a Deemed Material and Adverse
Representation;
(h)
No Satisfaction of Mortgage . The Mortgage has not
been satisfied, canceled, subordinated or rescinded, in whole or in
part, and the Mortgaged Property has not been released from the
lien of the Mortgage, in whole or in part, nor has any instrument
been executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the
Mortgagor’s failure to perform such action would cause the
Mortgage Loan to be in default, nor has the Seller waived any
default resulting from any action or inaction by the
Mortgagor;
(i)
Type of Mortgaged Property . With respect to a
Mortgage Loan that is not a Co-op Loan and is not secured by an
interest in a leasehold estate, the Mortgaged Property is a fee
simple estate that consists of a single parcel of real property
with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual residential condominium
unit in a condominium project, or an individual unit in a planned
unit development, or an individual unit in a residential
cooperative housing corporation; provided, however, that any
condominium unit, planned unit development or residential
cooperative housing corporation shall conform with the Underwriting
Guidelines. No portion of the Mortgaged Property (or
underlying Mortgaged Property, in the case of a Co-op Loan) is used
for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home
office shall not be considered as being used for commercial
purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair,
maintenance and/or household purposes. None of the
Mortgaged Properties are Manufactured Homes, log homes, mobile
homes, geodesic domes or other unique property
types. This representation and warranty is a Deemed
Material and Adverse Representation;
(j)
Valid First Lien . The Mortgage is a valid,
subsisting, enforceable and perfected, first lien on the Mortgaged
Property, including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or
annexed to such buildings, and all additions, alterations and
replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only
to:
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(i)
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the
lien of current real property taxes and assessments not yet due and
payable;
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(ii)
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covenants,
conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording acceptable
to prudent mortgage lending institutions generally and specifically
referred to in the lender’s title insurance policy delivered
to the originator of the Mortgage Loan and
(a) specifically
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referred
to or otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
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(iii)
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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.
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Any security
agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting, enforceable and
perfected first lien and first priority security interest on
the property described therein and the Seller has full right
to sell and assign the same to the Purchaser.
With respect
to any Co-op Loan, the related Mortgage is a valid,
subsisting and enforceable first priority security interest
on the related cooperative shares securing the Mortgage Note,
subject only to (a) liens of the related residential
cooperative housing corporation for unpaid assessments
representing the Mortgagor’s pro rata share of the
related residential cooperative housing corporation’s
payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and
other assessments to which like collateral is commonly
subject and (b) other matters to which like collateral is
commonly subject which do not materially interfere with the
benefits of the security interest intended to be provided by
the related Security Agreement;
(k)
Validity of Mortgage Documents . The Mortgage Note
and the Mortgage and any other agreement executed and delivered by
a Mortgagor in connection with a Mortgage Loan are genuine, and
each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, receivership or other laws relating to
or affecting creditors’ rights generally, and to general
principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity). All parties to the
Mortgage Note, the Mortgage and any other such related agreement
had legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note, the Mortgage and any such agreement,
and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such
related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to
a Mortgage Loan has taken place on the part of the Seller in
connection with the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage
Loan. To Seller’s knowledge, the documents,
instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary
to make the information and statements therein not
misleading. To Seller’s knowledge, no fraud,
error, omission, misrepresentation, negligence or similar
occurrence with respect to a Mortgage Loan has taken place on the
part of any Person, including without limitation, the Mortgagor,
any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan or in the
application for any insurance in relation to such
Mortgage
Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as
it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l)
Full Disbursement of Proceeds . The Mortgage Loan
has been closed and the proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances
thereunder, and any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor
is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;
(m)
Ownership . The Seller is the sole owner of record
and holder of the Mortgage Loan and the indebtedness evidenced by
each Mortgage Note and upon the payment of the Purchase Price, as
defined in the related Purchase Price and Terms Agreement, by the
Purchaser, and with respect to the applicable Mortgage Loans, the
Seller will retain the Mortgage Files or any part thereof with
respect thereto not delivered to the Custodian, the Purchaser or
the Purchaser’s designee, in trust only for the purpose of
servicing and supervising the servicing of each Mortgage
Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good, indefeasible and marketable title thereto, and
has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and has
full right and authority subject to no interest or participation
of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and upon the payment of
the Purchase Price, as defined in the related Purchase Price and
Terms Agreement, by the Purchaser, and with respect to the
applicable Mortgage Loans, the Purchaser will own such Mortgage
Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security
interest. The Seller intends to relinquish all rights to
possess, control and monitor the Mortgage Loan, except as may be
required of the Seller in its capacity as Interim Servicer of such
Mortgage Loan. Upon the payment of the Purchase Price,
as defined in the related Purchase Price and Terms Agreement, by
the Purchaser, and with respect to the applicable Mortgage Loans,
the Seller will have no right to modify or alter the terms of the
sale of the Mortgage Loan and the Seller will have no obligation or
right to repurchase the Mortgage Loan or substitute another
Mortgage Loan, except as provided in this Agreement;
(n)
Doing Business . All parties which have had any
interest in the Mortgage Loan, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) (1) in compliance with
any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and
(2) either (i) organized under the laws of such state, or
(ii) qualified to do business in such state, or (iii) a
federal savings and loan association, a savings bank or a national
bank having a principal office in such state, or (3) not doing
business in such state;
(o)
LTV, PMI Policy . No Mortgage Loan has an LTV
greater than 100%. Unless otherwise referenced in the
related Purchase Price and Terms Agreement, 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
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