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EXHIBIT 99.6
Mortgage Guaranty Insurance Corporation [GRAPHIC OMITTED]
250 E. Kilbourn Avenue
P.O. Box 488, Milwaukee, Wisconsin 53201-0488
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Declaration Page
for Use With
Mortgage Guaranty
Select Master Policy for
Multiple Loan
Transactions
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Mortgage Guaranty Insurance Corporation (a stock insurance company hereinafter
called the "Company") agrees to pay to the Insured identified below,
in
consideration of the premium or premiums to be paid as specified in this
Policy and in reliance on the Insured's Application for coverage under this
Policy any Loss due to the Default by a Borrower on a Loan, subject to the
terms and conditions in this Policy.
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Insured's Name and Mailing Address: Master Policy Number:
The Bank of New York Trust Co. N.A. as co-Trustee 04-355-5-3193
CWABS Asset-Backed Certificates, Series 2006-23
5730 Katella Avenue Effective
Date of Policy:
Cypress, California 90630 November 1,
2006
Security: CWABS Asset-Backed Certificates Trust 2006-23 Asset-Backed
Certificates, Series 2006-23
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Includes Terms and Conditions #71-70283 (2/05)
Includes Endorsement(s): #71-70304
(10/06)
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In Witness Whereof, the Company has caused its Corporate Seal to be hereto
affixed and these presents to be signed by its duly authorized officers in
facsimile to become effective as its original seal and signatures and binding
on the Company.
/s/ Patrick Sinks
[SEAL] /s/ Jeffrey H.
Lane
--------------------- [GRAPHIC
OMITTED] ----------------------
Patrick Sinks
Jeffrey H, Lane
MORTGAGE GUARANTY INSURANCE
CORPORATION
/s/ Steven
M. Thompson
----------------------------------
Steven M. Thompson,
Vice President
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Form #71-70282 (2/06)
<PAGE>
Mortgage Guaranty Insurance Corporation MGIC
250 E. Kilbourn Avenue
P.O. Box 488, Milwaukee, Wisconsin 53201-0488
--------------------------------------------
Endorsement to
Mortgage Guaranty Select
Master Policy For
Multiple Loan Transactions
--------------------------------------------
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Insured's Name and Mailing Address: Master Policy Number:
The Bank of New York Trust Co. N.A. as co-Trustee 04-355-5-3193
CWABS Asset-Backed Certificates, Series 2006-23
5730 Katella Avenue
Cypress, California 90630 Effective Date of
Endorsement:
November 1, 2006
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The purpose of this Endorsement is to amend terms and conditions of the Policy
as provided herein with respect to Loans insured under it. To the extent of any
inconsistency or conflict between the terms of the Policy and this Endorsement,
this Endorsement will control. The terms and conditions of the Policy shall
apply to a Loan, but with the Policy amended as follows:
Section 4.3 of the Policy and all references in the Policy to it are deleted in
their entirety.
All terms capitalized will have the meanings set forth in the Policy, except as
otherwise defined herein. Nothing herein contained will be held to vary, alter,
waive or extend any of the terms and conditions of the Policy, or any
amendments thereto, except as expressly set forth above.
Form #71-70304 (10/06) Page
1 of 1
<PAGE>
Table of
Contents
Mortgage Guaranty Select Master
Policy for Multiple Loan Transactions
1 Definitions
1.1 Application
1.2 Appropriate Proceedings
1.3 Borrower
1.4 Borrower's Own Funds
1.5 Borrower's Title
1.6 Certificate
1.7 Certificate Effective Date
1.8 Certificate Number
1.9 Certificate Schedule
1.10 Claim
1.11 Claim Amount
1.12 Collateral
1.13 Conveyance of Title
1.14 Default
1.15 Eligibility Criteria
1.16 Environmental Condition
1.17 Good and Merchantable Title
1.18 Insured
1.19
Loan
1.20 Loan File
1.21 Loss
1.22 Original LTV
1.23 Per Loan Loss Percentage
1.24 Perfected Claim
1.25 Person
1.26 Physical Damage
1.27 Policy
1.28 Possession of the Property
1.29 Primary First Layer Policy
1.30 Property
1.31 Residential
1.32 Security
1.33 Servicer
1.34 Settlement Period
1.35 Value
2 Obtaining Coverage and Payment of
Premiums
2.1 Obtaining Coverage
2.2 Representations of the Insured
2.3 Company's Remedies for Misrepresentation
2.4 Incontestability for Certain
Misrepresentations
2.5 Initial Premium and Term of Coverage
2.6 Renewal of Certificate and Termination for
Non-Payment of Renewal
Premium
2.7 Special Procedures for Receipt and Deposit
of Initial and Renewal
Premiums
2.8 Cancellation by the Insured of a
Certificate
2.9 Cancellation of Policy
2.10 Cancellation of Policy and Coverage of
Loans Upon Termination of
Security or Removal of
Loans from Security
2.11 Refund of Premium for Certain Circumstances
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Form #71-70283 (2/05)
Page i
<PAGE>
2.12 Post Underwriting Review and Copies of Loan
Files
3 Changes in Various Loan Terms,
Servicing and Insured; Coordination and
Duplication of Benefits
3.1 Loan Modifications
3.2 Open End Provisions
3.3 Assumptions
3.4 Servicing
3.5 Change of Insured of this Policy
3.6 Assignment of Coverage of a Loan under
this Policy
3.7 Coordination and Duplication of Insurance
Benefits
3.8 Indebtedness and Liens with Respect to
Collateral
4 Exclusions From Coverage
4.1 Balloon Payment
4.2 Effective Date
4.3
First Payment Default
4.4 Incomplete Construction
4.5 Fraud, Misrepresentation and Negligence
4.6 Non-Approved Servicer
4.7 Physical Damage (Other than Relating to
Pre-Existing Environmental
Conditions)
4.8 Pre-Existing Environmental Conditions
4.9 First Lien Status
4.10 Payment of the Full Benefit of the Primary
First Layer Policy
4.11 Non-Eligible Loans
4.12 Breach of the Insured's Obligations or
Failure to Comply with
Terms
5 Conditions Precedent to Payment of
Claim
5.1 Notice of Default
5.2 Monthly Reports
5.3 Company's Option to Accelerate Filing of a
Claim
5.4 Voluntary Conveyance
5.5 Appropriate Proceedings
5.6 Mitigation of Damages
5.7 Advances
5.8 Claim Information and Other Requirements
5.9 Acquisition of Borrower's Title Not
Required
5.10 Sale of a Property by the Insured Before
End of Settlement Period
5.11 Foreclosure Bidding Instructions Given by
the Company
5.12 Effect of Unexpired Redemption Period on
Payment of a Claim
5.13 Collection Assistance
6 Loss Payment Procedure
6.1 Filing of Claim
6.2 Calculation of Claim Amount
6.3 Payment of Loss; Company's Options
6.4 Claim Settlement Period
6.5 Payment by the Company After the
Settlement Period
6.6 Discharge of Obligation
7 Additional Conditions
7.1 Proceedings of Eminent Domain
7.2 Pursuit of Deficiencies
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Form #71-70283 (2/05) Page ii
<PAGE>
7.3 Subrogation
7.4 Policy for Exclusive Benefit of the
Insured
7.5 Effect of Borrower Insolvency or
Bankruptcy on Principal Balance
7.6 Arbitration of Disputes; Suits and Actions
Brought by the Insured
7.7 Release of Borrower; Defenses of Borrower
7.8 Amendments; No Waiver; Rights and
Remedies; Use of Term
"Including"
7.9 No Agency
7.10 Successors and Assigns
7.11 Applicable Law and Conformity to Law
7.12 Notice
7.13 Reports and Examinations
7.14 Electronic Media
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Form #71-70283 (2/05) Page iii
<PAGE>
Terms and
Conditions
1 Definitions
1.1 Application means only those documents,
materials, statements,
representations, warranties,
data and information (a) identified as
being included in the Application in a
notice to the Insured by the
Company prior to the issuance
of coverage on the applicable Loan,
and (b) submitted to the
Company by or on behalf of the Insured in
connection with the Insured's
request for insurance under this
Policy, irrespective of the
Person or Persons who prepared same.
1.2 Appropriate Proceedings means any legal or
administrative action by
the Insured affecting either
a Loan or title to a Property,
including:
(a) Preserving a deficiency recovery by making a
bid at the
foreclosure sale and
pursuing a deficiency judgment until the
end of the Settlement
Period, where appropriate and
permissible and where
directed by the Company; or
(b) Enforcing the terms of the Loan as allowed
by the laws where
the Property is located
or those laws affecting either the
Loan or, if applicable, the Collateral; or
(c) Acquiring Borrower's Title or Good and
Merchantable Title to
the Property, as either
may be required under this Policy,
but excluding such
title as may be acquired by a voluntary
conveyance from the
Borrower; or
(d) Asserting the Insured's interest in the
Property in a
Borrower's bankruptcy.
1.3 Borrower means any Person legally obligated
to repay the debt
obligation created by a Loan,
including any co-signer or guarantor
of the Loan.
1.4 Borrower's Own Funds means any funds used by
the Borrower for the
purpose of making installment
payments, but will not include funds
provided directly or
indirectly by any Person (other than the
Borrower) who is or was a
party to the Loan or to the related
Property transaction, unless
expressly set forth in the
Application.
1.5 Borrower's Title means such title to a
Property as was vested in
the Borrower at the time of a
conveyance to the Insured arising out
of or pursuant to a
foreclosure of the Loan; provided, however, if
the Insured so elects, the
redemption period need not have expired.
Borrower's Title as conveyed
to the Insured may be, but need not
be, the equivalent of Good
and Merchantable Title, and the deed
evidencing Borrower's Title
need not be recorded unless required by
applicable law.
1.6 Certificate means the document issued by the
Company pursuant to
this Policy extending the
coverage indicated therein to one or more
Loans as listed on a
Certificate Schedule. A Certificate may take
the form, without limitation,
of a facsimile, electronic computer
file, or other agreed-upon
data interchange medium. As used in this
Policy, the term
"Certificate" shall mean the Certificate and the
Certificate Schedule attached
thereto and listing the Certificate
Number assigned to each Loan
to which coverage is extended.
1.7 Certificate Effective Date means 12:01 a.m.
on the date upon which
coverage of a Loan under this
Policy begins, as specified in the
Certificate.
1.8 Certificate Number means the identification
number issued by the
Company for a Loan to which
coverage is extended as shown on the
Certificate Schedule for such
Loan.
1.9 Certificate Schedule means a list of Loans
to which coverage has
been extended under this
Policy, and which is attached to the
Certificate.
1.10 Claim means the timely filed written request,
made on a form or in
a format provided or approved
by the Company, to receive the
benefits of this Policy.
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Form #71-70283 (2/05)
Page 1 of 21
<PAGE>
1.11 Claim Amount means the amount calculated in
accordance with Section
6.2 of this Policy.
1.12 Collateral means
(a) the stock or membership certificate issued
to a
tenant-stockholder or
resident-member by a completed fee
simple or leasehold
cooperative housing corporation; and
(b) the proprietary lease relating to one (1)
unit in the
cooperative housing corporation
executed by such
tenant-stockholder or
resident-member and any other rights of
such stockholder or
member relating to any of the foregoing.
1.13 Conveyance of Title means the transfer of
title to the Property
through
(a) voluntary conveyance to the Insured of
Borrower's Title;
(b) Appropriate Proceedings or exercise of
rights of redemption;
or
(c) approved sale of the Property.
1.14 Default means the failure by a Borrower
(a) to pay when due any monthly or other regular
periodic payment
under the terms of a
Loan; or
(b) to pay all amounts due on acceleration of
the Loan by the
Insured after breach by
the Borrower of a due-on-sale
provision in the Loan,
granting the Insured the right to
accelerate the Loan
upon transfer of title to, or an interest
in, the Property and to
institute Appropriate Proceedings.
Violation by the Borrower of
any other term or condition of the
Loan which is a basis for
Appropriate Proceedings shall not be
considered to be a Default.
A Loan is deemed to be in
Default for that month as of the close of
business on the installment
due date for which a scheduled monthly
or other regular periodic
payment has not been made or as of the
close of business on the due
date stated in the notice of
acceleration given pursuant
to the due-on-sale provision in the
Loan. The Loan will be
considered to remain in Default until filing
of a Claim so long as such
periodic payment has not been made or
such basis for Appropriate
Proceedings remains. For example, a Loan
is "four (4) months in
Default" if the monthly installments due on
January 1 through April 1
remain unpaid as of the close of business
on April 1 or if a basis for
acceleration and Appropriate
Proceedings exists for a
continuous period of four months.
1.15 Eligibility Criteria means the requirements
established by the
Company for the insurability of a Loan
under this Policy and of
which the Company has
notified the Insured prior to issuance of the
Policy.
1.16 Environmental Condition means the presence of
environmental
contamination, including
nuclear reaction or radioactive waste,
toxic waste, poisoning, or
mold, contamination or pollution of the
Property or of the earth or
water subjacent to the Property or of
the atmosphere above the Property;
or the presence, on or under a
Property, of any
"Hazardous Substance" as that term is defined by
the federal Comprehensive
Environmental Response, Compensation, and
Liability Act (42 U.S.C. Sec.
9601 et. seq., as amended from time
to time) or as defined by any
similar state law, or of any
"Hazardous Waste"
or "Regulated Substance" as those terms are
defined by the federal
Resource Conservation and Recovery Act (42
U.S.C. sec. 6901, et seq., as
amended from time to time) or as
defined by any similar state
law. Environmental Condition does not
mean the presence of radon,
lead paint, or asbestos.
1.17 Good and Merchantable Title means title to a
Property (or, with
respect to the Collateral
securing a Loan, the title to both the
Collateral and the Property),
free and clear of all liens,
encumbrances, covenants,
conditions, restrictions, easements and
rights of redemption, except for any
of the following or as
permitted in writing by the
Company:
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Form #71-70283 (2/05) Page 2 of 21
<PAGE>
(a) Any lien established by public bond,
assessment or tax, when
no installment, call or
payment of or under such bond,
assessment or tax is
delinquent;
(b) Any
municipal and zoning ordinances and exceptions to title
waived by the
regulations of federal mortgage insurers and
guarantors with respect
to mortgages on one-to-four family
residences in effect on
the date on which the Loan was closed
and all documents were
executed;
(c) With respect to Collateral, a first mortgage
lien on the
entire real estate
owned by the cooperative housing
corporation which has
been disclosed to the Person
originating the Loan
secured by the Collateral; and
(d) Any other impediments which will not have a
materially
adverse effect on
either the transferability of the Property
or the sale thereof
(or, if applicable, the transferability
or sale of the
Collateral) to a bona fide purchaser.
Good and Merchantable Title
will not exist if (i) there is any lien
pursuant to the Comprehensive Environmental
Response, Compensation,
and Liability Act, or similar
federal or state law, as in effect
from time to time, providing
for liens in connection with the
removal and clean-up of
environmental conditions, or if notice has
been given of commencement of
proceedings which could result in
such a lien, or (ii) there
are limitations on ingress and egress to
the Property or on use of
utilities. Any action or proceeding after
a foreclosure sale relating
to establishing a deficiency judgment
will not be considered in
determining whether the Insured has
acquired Good and
Merchantable Title.
1.18 Insured means:
(a)
the Person designated on the face of this Policy; or
(b) any Person to whom coverage has been
assigned as permitted by
Sections 3.5 or 3.6
resulting in a change in the Insured
named on a Certificate
for a Loan in accordance with this
Policy.
1.19 Loan means any note, bond, or other evidence
of indebtedness
secured by a mortgage, deed
of trust, or other similar instrument,
which constitutes or is
equivalent to a first lien or charge on a
Property and which the
Company has approved for insurance and to
which coverage under this
Policy has been extended.
1.20 Loan File means, with respect to a Loan,
copies of all documents
and information (irrespective
of form or medium) created or
received by any Person in
connection with the origination or
closing of the Loan,
including the Borrower's loan application,
purchase contract, appraisal
or other evidence of valuation, credit
report, verifications of
employment, income and deposit, and HUD-1
or other settlement
statement.
1.21 Loss means the liability of the Company with
respect to a Loan for
payment of a Perfected Claim
which is calculated in accordance with
Section 6.3. A Loss will be
deemed to have occurred when a Default
on a Loan occurs, even though
the amount of Loss is not then either
presently ascertainable or
due and payable.
1.22 Original LTV means the ratio of the principal
balance of a Loan at
its origination to the Value
of the Property.
1.23 Per Loan Loss Percentage means the indicated
percentage as set
forth for a Loan on the applicable
Certificate.
1.24 Perfected Claim means a Claim received by the
Company which
contains all information or
proof required by the Company and for
which all requirements of
this Policy applicable to payment of a
Claim are satisfied.
1.25 Person means any individual, corporation,
partnership, association
or other entity.
1.26 Physical Damage means any tangible injury to
a Property, whether
caused by accident, natural occurrence,
or any other reason,
including damage caused by
defects in construction, land
subsidence, earth movement or
slippage, fire, flood, earthquake,
riot, vandalism or any
Environmental Condition.
1.27 Policy means this contract of insurance and
all Applications,
endorsements, schedules, and
Certificates, which are incorporated
in this Policy, related to
Loans insured under this Policy.
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Form #71-70283 (2/05)
Page 3 of 21
<PAGE>
1.28 Possession of the Property means, if the
Company elects to acquire
the Property, physical and
undisputed occupancy and control of the
Property at the time of
acquisition, or in the case of a Loan
secured by Collateral,
subject to the terms of the proprietary
lease from the cooperative
housing corporation.
1.29 Primary First Layer Policy means the policy
or guarantee issued by
a mortgage guaranty insurance
company approved for insurance of
mortgage loans sold to either
the Federal National Mortgage
Association ("Fannie
Mae"), or the Federal Home Loan Mortgage
Corporation ("Freddie
Mac"), which for a Loan provides coverage (a)
in at least the coverage
percent set forth for such Loan on the
applicable Certificate, (b) that
is issued under a form of policy
issued by such company,
approved by Fannie Mae or Freddie Mac and
in general use for the
mortgage loans sold to Fannie Mae or Freddie
Mac, as applicable, and (c )
that is maintained in full force and
effect until cancellation
thereof is required under applicable law.
Upon the Company's request,
from time to time, the Insured shall
provide to the Company a copy
of the form of each Primary First
Layer Policy under which it obtains
coverage.
1.30 Property means a Residential real property
and all improvements
thereon which secure a Loan,
together with all easements and
appurtenances, all rights of
access, all rights to use common
areas, recreational and other
facilities, and all of their
replacements or additions. In
the case of a Loan secured by
Collateral, Property means
the Residential real property, including
all improvements thereon,
which is owned by the cooperative housing
corporation, and which is
leased to the Borrower who holds an
ownership or membership
interest in such cooperative housing
corporation, which lease and
interest secure the related Loan,
together with all easements
and appurtenances, all rights of
access, all rights to use
common areas, recreational and other
facilities, and all
replacements or additions to any of the
foregoing.
For purposes of this Policy,
wherever the term "Property" is used
in reference to the stock or
membership certificate, the lease, or
any other asset or right
related thereto (but not the physical
condition or structure of the
Property), it shall be deemed to be
changed to
"Collateral", including for purposes of provisions
relating to foreclosure,
Appropriate Proceedings, or redemption;
acquisition of title or other
status of title, lien or ownership
(including Borrower's Title
and Good and Merchantable Title); or
acquisition, disposition or
Conveyance of Title by any Person.
1.31 Residential means a type of building or a portion
thereof which is
designed for occupancy by not
more than four (4) families, or a
single-family condominium, or
a unit in a planned unit development.
In the case of a cooperative
housing corporation, Residential means
a type of building or a
portion thereof which is designed for
occupancy by more than one
family, with ownership by a cooperative
housing corporation.
1.32 Security means a bond, certificate or other
security instrument for
which a Loan is security or
in which a Loan is otherwise included
and which is identified on
the face of this Policy.
1.33 Servicer means that Person acting on behalf
of the Insured of a
Loan (or on behalf of the
Insured's designee, if any) to service
the Loan. The Servicer acts
as a representative of the Insured of
the Loan (and the Insured's
designee, if any) and will bind the
Insured and its designee for
all purposes of this Policy, including
providing information to the
Company, receiving any notices, paying
premiums, accepting Loss
payments, and performing any other acts
under this Policy. For
purposes of the Policy, the term "Servicer"
shall include the master
servicer for a Loan of whom the Company
has been notified, as well as
any servicer acting on behalf of the
master servicer of whom the
Company has been notified. References
in this Policy to a Servicer's obligations
will not be construed as
relieving the Insured or its
designee of responsibility for the
Servicer's performance.
1.34 Settlement Period means the sixty (60) day
period as determined
under Section 6.4, at the end
of the which a Loss is payable by the
Company; provided that if the
Company pays a Loss prior to
expiration of such sixty (60)
day period, the Settlement Period
ends with such payment.
1.35 Value means the lesser of the sales price of
a Property (only
applicable in the case of a
Loan to finance the purchase of such
Property) or the value of the
Property as determined from an
appraisal or other method of
valuation, as set forth in the
Certificate.
Any pronouns, when used in this
Policy, will mean the singular or plural,
masculine or feminine, as the case
may be.
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Form #71-70283 (2/05)
Page 4 of 21
<PAGE>
2 Obtaining Coverage and Payment of
Premiums
2.1 Obtaining Coverage - This Policy shall
extend to each Loan which
the Insured submits for coverage under
this Policy, provided that
it is made in accordance with
the terms and provisions of this
Policy, including the
Eligibility Criteria, and is accepted for
insurance by the Company, as
evidenced by a Certificate issued by
the Company. In order to
obtain coverage under this Policy for a
Loan, the Insured or the
Person acting on its behalf must submit a
duly completed Application to
the Company and notify the Company of
the Servicer of the Loan, all
of which must be acceptable to the
Company. If all applicable
requirements are satisfied, extension of
coverage to a Loan under this
Policy shall be evidenced by issuance
of a Certificate Number on
the Certificate Schedule.
2.2 Representations of the Insured - The Insured
represents that:
(a) all statements made and information provided
to the Company
in the Application
(including as such is related to
continuation of
coverage upon assumption of a Loan) are
supported by statements
and information in the Loan File;
(b) all statements made and information in the
Application when
provided to the Company
are not false in any material respect
as of the date
provided; and
(c) the Loan complies with the Eligibility
Criteria, if any,
applicable to the Loan.
For purposes of this subparagraph
(c), Section 2.4 of
this Policy shall not apply to a
determination as to
whether a Loan complies with the
Eligibility Criteria.
The foregoing representations
will apply to all statements and
information provided to the
Company in the Application, whether
made or submitted by the
Insured, the Borrower or any other Person,
and will be deemed to have
been made and provided for and on behalf
of the Insured. The foregoing
representations shall be effective
whether or not they are made
by the Insured or other Person with
the intent to deceive or
mislead, or with the knowledge that they
are not true and correct.
It is understood and agreed
that such statements and information in
the Application in the
aggregate are, and in certain instances
individually may be, material
to the Company's decision to offer or
provide coverage of the
related Loan; the Company issues the
related Certificate in
reliance on the accuracy and completeness of
such statements and
information submitted to it; and the Company's
reliance on the
representations in this Section 2.2 survive the
issuance of a Certificate or
such continuation of coverage and any
later review or audit of the
Insured's files by the Company.
2.3 Company's Remedies for Misrepresentation -
Subject to Section 2.4,
if any of the Insured's
representations as described in Section 2.2
are materially false with
respect to a Loan, the Company will have,
at its option, the right to
defend against a Claim, or to the
extent permitted by
applicable law, to cancel or rescind coverage
for such Loan under the
Certificate retroactively to commencement
of coverage (or if the
misrepresentation occurs with respect to
continuation of coverage upon assumption
of a Loan, to so defend,
cancel or rescind
retroactively to the date of such continuation).
In the case of such
cancellation or rescission, the Company shall
return at that time all paid
premiums for such Loan retroactively
to such applicable date.
2.4 Incontestability for Certain
Misrepresentations --- Notwithstanding
Sections 2.2 or 2.3, no Claim
for Loss will be denied or adjusted,
nor will the Certificate's coverage be
rescinded or canceled, by
reason of any
misrepresentations contained in an Application,
provided that all of the
following requirements, conditions and
circumstances, to the extent
not waived in writing at the option
of the Company, are
satisfied:
(a) The misrepresentation must not have been:
(1) knowingly made, or knowingly participated
in, by
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Form #71-70283 (2/05)
Page 5 of 21
<PAGE>
(i) the Insured or any other Person which
originated
the Loan;
(ii) a correspondent lender, mortgage loan broker
or
other
intermediary underwriting or processing the
Loan on
behalf of the Insured or any other Person
which originated the Loan; or
(iii) an escrow
or closing agent, or any other agent
of, or
broker for, the Insured or any other
Person
which originated the Loan acting with
respect to
the Loan or the related Property
transaction; or
(2) made, whether or not knowingly, by an
appraiser,
provider of an
automated valuation model, or any other
Person providing
a valuation of the Property that is
used in
underwriting, processing or originating the
Loan and that is
submitted to the Company for the
purpose of establishing
the Value of the Property.
(b) This Section 2.4 shall not be construed to
limit the
applicability of
Section 4.5(b) to a misrepresentation which
is subject to this
Section 2.4, except to the extent
otherwise agreed to in
writing by the Company and the
Insured.
(c) The Company's payment of a Claim will not
limit any rights
which the Company has
against the Borrower or any other
Person (other than the
Insured) for any misrepresentation.
2.5 Initial Premium and Term of Coverage -
Within fifteen (15) days
from the Certificate
Effective Date, or such other date as the
Company and the Insured may
agree to in writing, the Insured must
forward to the Company the
appropriate initial premium. Payment of
the initial premium shall be
a condition precedent to coverage
being extended to the Loan.
Subject to cancellation by the Insured
or the Company as provided in
this Policy, coverage shall remain in
full force and effect for the
period covered by the initial
premium.
2.6 Renewal of Certificate and Termination for
Non-Payment of Renewal
Premium - The Insured is
obligated to continue coverage in effect
and pay any premium which is
due, as required by Section 2.7 of
this Policy. The entire
premium for all Loans (including all Loans
then in Default) must be paid
within a forty-five (45) day grace
period (or such longer grace
period generally allowed by the
Company) after the due date
for payment. Upon payment of the entire
premium for all Loans within
such grace period, this Policy will be
in effect for the applicable
period of coverage and a Default on a
Loan occurring within said
grace period which is not cured, and
which results in a Claim being filed, will be
covered. If the
entire premium for all Loans
is not paid within the grace period,
at the option of the Company,
the coverage of this Policy and the
Company's liability as to all
Loans will terminate effective as of
12:01 a.m. on the first day
following the date through which the
applicable premium has been
paid and as a result, any future
Defaults on any of the Loans
will not be covered under this Policy.
If the applicable premium on
a Loan in Default has been paid for a
renewal term following the
renewal term during which such Default
occurred, and if such Default
is not cured and results in a Claim,
such premium paid shall be refunded in
connection with the
settlement of the Claim. If
such premium on such Loan in Default is
not paid, coverage on such
Loan shall be cancelled retroactive to
the date through which the
premium has been paid, but a Claim
resulting from a Default
which occurred before the date through
which the applicable premium
has been paid shall be covered,
subject to the terms and
conditions of this Policy.
2.7 Special Procedures for Receipt and Deposit
of Initial and Renewal
Premiums - The Insured
acknowledges that the Company deposits
initial and renewal premium
checks immediately upon receipt and
agrees that the receipt and
deposit of a premium check by the
Company after the time
specified in this Policy for receipt, does
not constitute a waiver of
the requirements of this Policy for
timely receipt or an
acceptance of premium by the Company. The
Company will have the right
to return such late premium payment,
but only within sixty (60)
days after receipt, in which case
coverage of all Loans
(including all Loans then in Default) will
be cancelled retroactively to the
Certificate Effective Date for
a late initial premium, or to
the last day of the period covered
by the previous premium
payment for a late renewal premium.
Receipt, deposit and retention
of a premium check will not
constitute a waiver of any
defenses with respect to any other
matters which the Company may
have under this Policy.
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Form #71-70283 (2/05)
Page 6 of 21
<PAGE>
2.8 Cancellation by the Insured of a Certificate
- Notwithstanding any
provision to the contrary in
this Policy, the Insured shall be
obligated to maintain
coverage of a Certificate for a Loan (and to
pay corresponding premiums
for continuation of such coverage for
each month or partial month
coverage is in effect) unless or until
(a) the Loan is paid in full
or (b) the ratio of the outstanding
principal balance of the Loan
to the Value (as defined in Section
1.35 of this Policy) of the
Property securing the Loan is at least
five (5) percentage points
less than the Original LTV minus the
product of the Per Loan Loss
Percentage and the Original LTV for
such Loan under this Policy
or (c) otherwise permitted in writing
by the Company. Subject to
the foregoing obligation of the Insured
to maintain coverage, the Insured may
obtain cancellation of
coverage on a Loan by making
a written notification in the case of
(a) or (b) above or a written
request in the case of (c) above.
However, no refund will be
paid upon cancellation of coverage on a
Loan. Cancellation of
coverage on a Loan will not cancel this
Policy.
2.9 Cancellation of Policy - Either the Insured
or the Company may
cancel their respective right
or obligation to receive or issue new
Certificates immediately upon
written notice of cancellation of
this Policy. However,
Certificates issued prior to such
cancellation of this Policy
will continue in force so long as all
premiums are paid and all
other terms and conditions of this Policy
for coverage are complied
with by the Insured.
Notwithstanding the
foregoing, at the Insured's option, the Insured
may cancel coverage on all,
but not less than all, Loans (which
must include all Loans in
Default), if the financial strength
rating of the Company is
either withdrawn or downgraded below "AA-"
by Standard & Poor's
Rating Services or "Aa3" by Moody's Investors
Service. Upon cancellation of
this Policy as provided herein, no
refund of premium will be
paid and the Company shall have no
liability for any Default
existing at the time of cancellation
other than Defaults on Loans for which a
Claim had been filed in
accordance with Section 6.1
of this Policy prior to the date of
cancellation of coverage.
2.10 Cancellation of Policy and Coverage of Loans
Upon Termination of
Security or Removal of Loans
from Security - Except as otherwise
specified below, in the event
that
(a) the bonds, certificates or other security
instruments
designated or referred
to in this Policy as the Security are
redeemed, paid in full,
cancelled or otherwise terminated, or
the trust created in
connection with the issuance of the
Security is terminated
for any reason (individually, a
"Redemption"), or
(b) there are no longer any Loans that are
security for, or
represented by, the
Security,
this Policy and the coverage
of all Loans under this Policy shall
automatically be terminated
without further action being required
by either the Insured or the
Company, and the Company shall hav
