<PAGE>
CITICORP MORTGAGE SECURITIES, INC.
Depositor
CITIMORTGAGE, INC.
Servicer and Master Servicer
U.S. BANK NATIONAL ASSOCIATION
Trustee
CITIBANK, N.A.
Paying Agent, Certificate Registrar
and Authenticating Agent
--------------------------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
CITICORP MORTGAGE SECURITIES, INC.,
REMIC PASS-THROUGH CERTIFICATES,
SERIES 2006-2
--------------------------------------------------------------------------------
April 1, 2006
<PAGE>
CONTENTS
PARTIES
9
BACKGROUND
9
AGREEMENT
9
SERIES TERMS
9
12 THE SERIES
9
12.1
Establishment
9
12.2
General terms for
classes
10
12.3
Target rate
12
12.4
Ratio-stripped IO and
PO classes
12
12.5
Loss limits
12
12.6
Denominations
12
12.7
The mortgage loans
13
12.8
Right to repurchase
13
12.9
Book-entry and
definitive certificates
13
12.10 Voting
interests
13
12.11 Cash
deposit
13
13 PRINCIPAL BALANCES
13
13.1
Class balances
13
13.2
Certificate balances
14
14 ALLOCATIONS
14
14.1
Interest allocations
14
14.2
Principal allocations
14
14.3
Unscheduled principal
15
14.4
Maintenance of
subordination
16
15 ALLOCATIONS AMONG THE SENIOR CLASSES
16
15.1
Order of allocation
among senior target-rate classes
16
15.2
NAS classes
17
15.3
PAC and TAC classes
17
16 DISTRIBUTIONS
17
16.1
Types of distributions
17
16.2
Accrual and accrual
directed classes
18
16.3
Distribution
priorities
18
16.4
Distributions to
certificate holders
19
16.5
Final distribution on
the residual certificates
19
16.6
Wire transfer
eligibility
19
17 ADJUSTMENTS TO CLASS BALANCES
19
18 LOSS RECOVERIES
20
19 ADDITIONAL STRUCTURING FEATURES
21
20 LIBOR CLASSES
21
21 COMPOSITE AND COMPONENT CLASSES
22
22 MULTIPLE-POOL SERIES
22
22.1
Adjustment of
subordinated component class principal balances
22
22.2
Maintenance of
subordination
24
22.3
Distribution
shortfalls
24
22.4
Undersubordination
25
22.5
Undercollateralization
25
22.6
Non-subordinated
interest shortfalls
26
23 SUPER SENIOR CLASSES
27
24 RETAIL CLASSES
27
25 INSURED CLASSES
27
26 ADVANCE ACCOUNT
27
27 REMIC PROVISIONS
27
27.1
Constituent REMICs
27
27.2
The class P and class
L regular interests
28
27.3
Distributions to class
P and class L regular interests
28
27.4
REMIC accounts and
distributions
30
27.5
Tax matters person
31
2
<PAGE>
28 YIELD MAINTENANCE AGREEMENT
32
29 NOTICE ADDRESSES
32
30 INITIAL DEPOSITORIES
33
STANDARD TERMS
34
1 DEFINITIONS AND
USAGES
34
1.1
Defined terms
34
1.2
Usages
49
1.3
Calculations
respecting mortgage loans
50
2 TRANSFER OF MORTGAGE
LOANS AND ISSUANCE OF CERTIFICATES; REPURCHASE AND
SUBSTITUTION
50
2.1
Transfer of mortgage
loans
50
2.2
CMSI's representations
and warranties
54
2.3
Repurchase or
substitution of mortgage loans
56
3 SERVICING
58
3.1
CitiMortgage as
servicer and master servicer
58
3.2
Collections
59
3.3
Certificate and other
accounts
60
3.4
Prepayment interest
shortfalls
62
3.5
Advances
62
3.6
Distributions
65
3.7
Third-party servicing
67
3.8
Permitted withdrawals
from certificate account
68
3.9
Expenses
69
3.10
Primary mortgage
insurance
70
3.11
Hazard insurance
70
3.12
Realization on
defaulted mortgage loans
71
3.13
Release of mortgage
files
73
3.14
Reports to certificate
holders and others
73
3.15
Tax returns and
reports
75
3.16
Application of buydown
funds
76
3.17 Assumption and modification
agreements
76
3.18
Refinancings and
curtailments; loan modifications
77
3.19
Investment accounts
78
3.20
Paying Agent and
Certificate Registrar
81
3.21
Exchange Act reporting
82
4 CITIMORTGAGE
83
4.1
Liability of
CitiMortgage and others
83
4.2
Assumption of
CitiMortgage's obligations by affiliate
83
4.3
Maintenance of office
or agency
84
4.4
Servicer not to resign
84
4.5
Delegation of duties
84
4.6
Errors and omissions
insurance
84
5 THE CERTIFICATES
84
5.1
The certificates
84
5.2
Registration of
transfer and exchange of certificates
86
5.3
Mutilated, destroyed,
lost or stolen certificates
89
5.4
Persons deemed owners
89
5.5
Access to list of
certificate holders' names and addresses
90
5.6
Definitive
certificates
90
5.7
Notices to Clearing
Agency
90
6 [RESERVED]
91
7 DEFAULT
91
7.1
Events of Default
91
7.2
Trustee to act;
appointment of successor
92
8 THE TRUSTEE
92
8.1
Duties
92
3
<PAGE>
8.2
Liability
93
8.3
Trustee not liable for
certificates or mortgage loans
94
8.4
Trustee may own
certificates
94
8.5
Trustee's fees and
expenses
94
8.6
Eligibility
requirements for Trustee
95
8.7
Resignation or removal
of Trustee
96
8.8
Successor trustee
96
8.9
Merger or
consolidation of Trustee
97
8.10
Appointment of
co-trustee or separate trustee
97
8.11
Tax returns
98
8.12
Appointment of
authenticating agent
98
9 TERMINATION
100
9.1 Termination upon repurchase
by CMSI or liquidation of all
mortgage loans
100
10 GENERAL PROVISIONS
102
10.1
Amendments
102
10.2
Recordation of
Agreement
103
10.3
Limitation on rights
of certificate holders
103
10.4
Governing law
104
10.5
Maintenance of REMICs
104
10.6
Notices
104
10.7
Severability of
provisions
104
10.8
Assignment
104
10.9
Certificates
nonassessable and fully paid
104
11 DEPOSITORIES
104
11.1
Depositories
104
SIGNATURES AND ACKNOWLEDGMENTS
1
SCHEDULE 1: SERVICING CRITERIA TO BE ADDRESSED IN REPORT ON
ASSESSMENT OF
COMPLIANCE
APPENDIX 1: TRANSFEREE'S AFFIDAVIT
EXHIBIT A: FORMS OF CERTIFICATES
A-1
EXHIBIT B: MORTGAGE LOAN SCHEDULES
EXHIBIT C: FORM OF MORTGAGE DOCUMENT CUSTODIAL AGREEMENT
C-1
EXHIBIT D: FORM OF PURCHASER LETTER
D-1
EXHIBIT E: FORM OF ERISA LETTER
E-1
EXHIBIT F: YIELD MAINTENANCE AGREEMENTS
F-1
4
<PAGE>
DEFINED TERMS
accrual class,
18
accrual directed class,
18
accrual termination day,
34
advance account,
27
advance account advances,
27
advance account available advance amount,
27
advance account depository,
27
advance account depository agreement,
27
advance account funding date,
27
advance account trigger date,
27
affiliate,
34
affiliated mortgage loans,
58
affiliated Paying Agent advances,
64
affiliated servicing fee rate,
34
Agent,
86
aggregate outstanding advances,
34
allocated loss,
20
alternative certificate account,
105
alternative custodial accounts for P&I,
105
alternative escrow account,
105
alternative servicing account,
105
applicable constituent REMIC,
27
appraisal,
34
Authenticating Agent, 10,
98
Authorized Officer,
34
Bankruptcy Code,
34
bankruptcy coverage termination date,
34
bankruptcy loss,
34
bankruptcy loss limit,
34
beneficial owner,
35
book-entry certificates,
13
business day,
35
buydown account,
35
buydown funds,
35
buydown mortgage loan,
35
buydown subsidy agreement,
35
certificate account,
60
certificate holder,
35
certificate insurance policy,
27
certificate rate,
10
Certificate Register,
86
Certificate Registrar,
10
certificates,
9
Citibank banking affiliate,
35
CitiMortgage,
9
class,
35
class B-x,
9
class B-x certificates,
9
class IA-IO,
9
class IA-IO certificates,
9
class IA-PO,
9
class IA-PO certificates,
9
class IA-x,
9
class IA-x certificates,
9
class IIA-1,
9
class IIA-1 certificates,
9
class IIA-IO,
9
class IIA-IO certificates,
9
class IIA-PO,
9
class IIA-PO certificates,
9
class IIIA-1,
9
class IIIA-1 certificates,
9
class IIIA-IO,
9
class IIIA-IO certificates,
9
class IIIA-PO,
9
class IIIA-PO certificates,
9
class L regular interest,
28
class LR certificates,
9
class P regular interests,
28
class percentage,
35
class PR certificates,
9
class R certificates,
10
classes A-x through A-y,
36
classes B-x through B-y,
36
Clearing Agency,
36
Clearing Agency Participant,
36
closing date,
10
CMSI,
9
collected servicing fee,
36
component classes,
22
composite class,
22
constituent REMIC,
27
corporate trust office,
32
cumulative loss test,
15
current interest allocation,
14
custodial accounts for P&I,
61
custodial investment account,
79
cut-off date,
9
debt service reduction,
36
deficient valuation,
36
definitive certificates,
13
delegated servicer,
36
<PAGE>
delinquency test,
15
denominations,
12
Depository,
36
determination date,
37
discount loan,
37
disqualified organization,
86
distribution account,
65
distribution day,
10
distribution day statement,
66
distribution report,
73
Eligible Account,
37
Eligible Investments,
79
eligible substitute mortgage loan,
57
ERISA,
37
ERISA Prohibited holder,
87
ERISA Restricted Certificates,
37
escrow accounts,
61
Events of Default,
90
Exchange Act,
37
extraordinary event,
37
FDIC,
37
FHLMC,
37
Fitch,
37
fraud loss,
38
fraud loss limit,
37
Furnished Document,
93
GIC,
38
GNMA,
38
group, 22,
38
group target-rate class percentage,
38
Guide,
38
high-cost mortgage loan,
38
holder,
38
hypothetical mortgage loan,
38
impaired subordination level,
16
independent accountants,
38
Indirect Participant,
38
initial,
38
initial bankruptcy loss limit,
12
initial fraud loss amount,
12
initial special hazard loss limit,
12
insurance premium,
27
insurance proceeds,
38
insured class,
27
Insurer,
27
interest allocation,
14
interest allocation carryforward,
14
interest distribution,
17
interest portion of a liquidated loan loss,
39
interest portion of a realized loss,
46
Internal Revenue Code,
38
investment account,
38
Investment Income,
39
IO class,
39
IO loan,
39
IO strip,
39
last scheduled distribution day,
10
latest possible maturity date,
10
LIBOR,
21
LIBOR accrual period,
21
LIBOR classes,
21
liquidated loan,
39
liquidated loan loss,
39
liquidation expenses,
39
liquidation proceeds,
39
loss recovery,
40
lower-tier REMIC,
27
lower-tier REMIC account,
30
master servicer,
58
master servicing fee,
40
master servicing fee rate,
40
material breach,
56
MERS,
51
month,
40
monthly affiliated servicing fee rate,
34
monthly master servicing fee rate,
40
monthly pass-through rate,
43
monthly third-party servicing fee rate,
49
Moody's,
40
mortgage,
40
Mortgage Document Custodial Agreement,
51
Mortgage Document Custodian,
51
mortgage documents,
40
mortgage file,
40
mortgage loan,
40
mortgage loan schedule,
40
mortgage note,
40
Mortgage Note Custodian,
40
mortgage note rate,
40
mortgaged property,
40
mortgagor,
40
multiple-pool series,
40
NAS class,
17
net liquidation proceeds,
40
net Paying Agent advances,
41
net REO proceeds,
40
net voluntary advances,
41
non-accelerated senior class,
17
nonrecoverable advance,
41
non-subordinated losses,
41
6
<PAGE>
non-supported prepayment interest shortfall,
41
notional balance,
13
officer's certificate,
41
opinion of counsel,
41
order of seniority,
41
order of subordination,
41
original value,
41
Originator,
42
outstanding,
42
overcollateralized,
25
PAC class,
17
Participant,
43
pass-through rate,
43
Paying Agent,
10
Paying Agent failure,
27
Paying Agent failure advance,
27
percentage interest,
43
person,
43
planned amortization class,
17
PO class,
43
PO loan,
43
PO strip,
43
pool,
43
pool distribution amount,
43
pool I,
22
pool II,
22
pool III,
22
pooling REMIC,
27
pooling REMIC account,
30
predatory lending law,
44
Predecessor Certificates,
44
premium loan,
44
prepayment interest shortfall,
44
primary mortgage insurance certificate,
44
principal allocation,
14
principal balance,
13
principal distribution,
17
principal portion of a liquidated loan loss,
39
principal portion of a realized loss,
46
principal prepayment,
44
private certificates,
44
Proceeding,
44
property protection expenses,
44
Purchaser,
10
Qualified GIC,
44
Qualified Nominee,
45
rating agency,
10
ratio-stripped IO class,
45
ratio-stripped IO loan,
45
ratio-stripped PO class,
46
ratio-stripped PO loan,
46
realized losses,
46
record date,
46
reduction amount,
25
regular interests,
27
Regulation AB,
82
reimbursement,
18
relevant servicer,
46
Relieved interest,
64
REMIC,
46
REMIC Provisions,
46
remittance delinquency,
63
remittances on affiliated mortgage loans,
60
remittances on third-party loans,
62
REO loan,
46
REO proceeds,
46
REO property,
46
Required Amount of Certificates,
46
reserve fund,
27
residual certificates,
9
residual distribution,
18
residual interest,
28
Responsible Officer,
46
retail class,
27
retail reserve fund,
27
S&P,
46
scheduled monthly loan payment,
46
scheduled principal balance,
47
scheduled principal payments,
47
scheduled servicing fee,
47
Securities Act,
47
senior classes,
9
senior to,
47
Series Terms,
9
servicing account advances,
62
servicing accounts,
61
Servicing Officer,
47
Similar Law,
88
single certificate,
47
single-pool series,
47
special hazard loss,
47
special hazard loss limit,
48
special hazard percentage,
48
special serviced mortgage loans,
58
special servicer,
58
special servicing agreement,
58
Standard Terms,
9
startup day,
10
subordinate to,
48
subordinated classes,
9
7
<PAGE>
subordinated losses,
48
subordination depletion date,
48
subordination level,
16
substitution adjustment amount,
57
substitution day,
57
super senior classes,
27
super senior support classes,
27
TAC class,
17
target rate,
12
targeted amortization class,
17
target-rate class,
12
target-rate class percentage,
48
target-rate loan,
48
target-rate strip,
48
tax matters person,
31
third-party mortgage loans,
58
third-party Paying Agent advance,
64
third-party servicer,
58
third-party servicer advance,
63
third-party servicing agreement,
58
third-party servicing fee,
48
third-party servicing fee rate,
48
Transfer Instrument,
49
Trust,
9
Trust Fund,
49
Trustee,
9
U.S. person,
49
uncommitted cash,
49
uncommitted cash advances,
63
undercollateralized,
25
undersubordination,
25
Underwriter,
10
unscheduled principal payments,
49
upper-tier REMIC,
27
upper-tier REMIC account,
30
voluntary advance,
63
voting interest,
13
yield maintenance agreement,
31
yield maintenance payments,
32
yield maintenance provider,
32
8
<PAGE>
POOLING AND SERVICING AGREEMENT
April 1, 2006
PARTIES
o CITICORP
MORTGAGE SECURITIES, INC., a Delaware corporation (CMSI)
o
CITIMORTGAGE, INC., a New York corporation (CitiMortgage)
o U.S.
BANK NATIONAL ASSOCIATION, a national banking association, in
its
individual capacity and as Trustee
o
CITIBANK, N.A., a national banking association, in its individual
capacity
and
as Paying Agent, Certificate Registrar, and Authenticating
Agent
BACKGROUND
In the regular course of their business, affiliates of CMSI
originate and
acquire mortgage loans. CMSI, CitiMortgage and the Trustee wish to
set forth the
terms and conditions under which the Trust will acquire the
mortgage loans
listed in exhibit B, certificates will be issued to holders
evidencing ownership
interests in the Trust Fund, and CitiMortgage will manage and
service the
mortgage loans.
AGREEMENT
This Pooling and Servicing Agreement (this agreement) consists of
sections 1
through 11 (the Standard Terms) and sections 12 and following (the
Series
Terms). The Standard Terms follow the Series Terms. If there is a
conflict or
inconsistency between the Standard Terms and the Series Terms, the
Series Terms
will prevail.
SERIES TERMS
12 THE
SERIES
12.1 ESTABLISHMENT
A common law trust is established under New York law as of April 1,
2006 (the
cut-off date, to be called the "Citicorp Mortgage Securities Trust,
Series
2006-2" (the Trust). CMSI is the settlor of the Trust, and U.S.
Bank National
Association is the trustee (in such capacity, the Trustee).
The
Trust will issue a series of certificates designated as
"Citicorp
Mortgage Securities, Inc. REMIC Pass-Through Certificates, Series
2006-2"). The
certificates will consist of and be further designated as
(i)
25 senior classes of certificates individually designated as
o for each
integer x, from 1 through 17, inclusive, "Senior Class IA-x
Certificates" (the class IA-x certificates or class IA-x);
o "Senior
Class IIA-1 Certificates" (the class IIA-1 certificates or
class
IIA-1);
o "Senior
Class IIIA-1 Certificates" (the class IIIA-1 certificates or
class
IIIA-1);
o "Senior
Class IA-IO Certificates" (the class IA-IO certificates or
class
IA-IO);
o "Senior
Class IIA-IO Certificates" (the class IIA-IO certificates or
class
IIA-IO);
o "Senior
Class IIIA-IO Certificates" (the class IIIA-IO certificates or
class IIIA-IO);
o "Senior
Class IA-PO Certificates" (the class IA-PO certificates or
class
IA-PO);
o "Senior
Class IIA-PO Certificates" (the class IIA-PO certificates or
class
IIA-PO); and
"Senior Class IIIA-PO Certificates" (the class IIIA-PO certificates
or
class IIIA-PO);
(ii)
six subordinated classes of certificates designated, for each
integer
x, from 1 through 6, inclusive, as "Subordinated Class B-x
Certificates" (the
class B-x certificates or class B-x) (together with the senior
classes of
certificates, the certificates); and
(iii) three residual interests individually designated as
o "Class
PR Certificates" (the class PR certificates,
o "Class
LR Certificates" (the class LR certificates, and
o "Class R
Certificates" (the class R certificates.
9
<PAGE>
The
class PR, LR and R certificates together constitute the
residual
certificates.
The
Trustee hereby appoints Citibank, N.A. as Authenticating Agent.
CMSI, with the approval of the Trustee, hereby appoints the
corporate trust
department of Citibank, N.A. as Paying Agent and Certificate
Registrar.
The
Mortgage Document Custodian is Citibank (West), FSB.
The
Underwriter and the Purchaser for the series is HSBC Securities
(USA)
Inc.
The
certificates will be first executed, authenticated and delivered
on
April 27, 2006 (the closing date). The closing date will also be
the startup
day.
The
25th day of each month (or if the 25th is not a business day, the
next
succeeding business day), beginning in May 2006, will be a
distribution day. The
last scheduled distribution day for each class is specified in the
following
table. The latest possible maturity date of each class for purposes
of section
860G(a)(1) of the Internal Revenue Code and Treasury Regulations
section
1.860G-1(a)(4)(iii) will be April 25, 2036.
The
nationally recognized statistical rating agencies for the
senior
classes are Moody's and Fitch, and the rating agency for classes
B-1 through B-5
is Fitch.
12.2 GENERAL TERMS FOR CLASSES
The classes will have the
following initial principal balances, certificate
rates, and for the subordinated classes, initial target-rate class
percentages
and initial subordination levels:
<TABLE>
<CAPTION>
initial
certificate
initial
initial
principal (or rate (per
target-rate class subordination
last
scheduled
class
notional) balance annum)
percentage (1) level (2)
distribution day
--------------------- -----------------
-----------
----------------- -------------- ----------------
<S>
<C>
<C>
<C>
<C>
<C>
IA-1
$ 20,000,000.00 5.75%
N/A
N/A
April 25, 2036
IA-2
$ 5,252,566.00
6.00%
N/A
N/A
April 25, 2036
IA-3
$ 53,090,169.00
(3)
N/A
N/A
April 25, 2036
IA-4
$108,090,169.00
(3)
N/A
N/A
April 25, 2036
(notional)(4)
IA-5
$ 55,000,000.00
(3)
N/A
N/A
April 25, 2036
IA-6
$
652,174.00
0%
N/A
N/A
April 25, 2036
IA-7
$ 92,635,837.00 5.75%
N/A
N/A
April 25,
2036
IA-8
$ 15,454,333.00 5.75%
N/A
N/A
April 25, 2036
IA-9
$
999,600.00 5.75%
N/A
N/A
April 25, 2036
IA-10
$ 31,507,513.00 5.75%
N/A
N/A
April 25, 2036
IA-11
$ 3,750,000.00
6.00%
N/A
N/A
April 25, 2036
IA-12
$ 3,750,000.00
6.00%
N/A
N/A
April 25, 2036
IA-13
$ 3,750,000.00
6.00%
N/A
N/A
April 25, 2036
IA-14
$ 1,875,000.00
5.50%
N/A
N/A
April 25, 2036
IA-15
$ 1,875,000.00
6.50%
N/A
N/A
April 25, 2036
IA-16
$ 35,250,561.00 5.75%
N/A
N/A
April 25, 2036
IA-17
$
228,373.00
0%
N/A
N/A
April 25, 2036
IA-PO
$ 2,180,431.00
0% (5)
N/A
N/A
April 25, 2036
IA-IO
$286,868,870.49
(7)
N/A
N/A
April 25, 2036
(notional)(6)
IIA-1
$ 54,950,155.00 5.50%
N/A
N/A
April 25, 2021
IIA-PO
$
687,381.00
0% (5)
N/A
N/A
April 25, 2021
IIA-IO
$ 44,295,654.49
(8)
N/A
N/A
April 25, 2021
(notional)(6)
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
initial
certificate
initial
initial
principal (or rate (per
target-rate class subordination
last
scheduled
class
notional) balance annum)
percentage (1) level (2)
distribution day
--------------------- -----------------
-----------
----------------- -------------- ----------------
<S>
<C>
<C>
<C>
<C>
<C>
IIIA-1
$ 26,289,136.00 5.5%
N/A
N/A
March 25, 2036
IIIA-PO
$
238,106.00
0% (5)
N/A
N/A
March 25, 2036
IIIA-IO
$ 21,684,059.94
(9)
N/A
N/A
March 25, 2036
(notional)(6)
B-1 (composite)
$ 6,953,545.00
Blended
1.662250646850%
1.200000581747%
April 25, 2036
IB-1 (component)
$
5,558,054.35
5.75%
1.660749795610%
N/A
N/A
IIB-1
(component) $
944,950.55
5.50%
1.670044944937%
N/A
N/A
IIIB-1 (component) $ 450,540.09
5.50%
1.664515480671%
N/A
N/A
B-2 (composite)
$ 1,896,422.00
Blended
0.453341237628%
0.750000470075%
April 25, 2036
IB-2 (component)
$
1,515,833.51
5.75%
0.452931914425%
N/A
N/A
IIB-2
(component) $
257,713.87
5.50%
0.455466956001%
N/A
N/A
IIIB-2
(component) $ 122,874.61
5.50%
0.453958919786%
N/A
N/A
B-3 (composite)
$ 1,264,281.00
Blended
0.302227412068%
0.450000474723%
April 25, 2036
IB-3 (component)
$
1,010,555.41
5.75%
0.301954530005%
N/A
N/A
IIB-3
(component) $
171,809.20
5.50%
0.303644557277%
N/A
N/A
IIIB-3
(component) $ 81,916.39
5.50%
0.302639200065%
N/A
N/A
B-4 (composite)
$
632,141.00 Blended
0.151113825560%
0.300000358403%
April 25,
2036
IB-4 (component)
$
505,278.10
5.75%
0.150977384420%
N/A
N/A
IIB-4
(component) $
85,904.67 5.50%
0.151822398724%
N/A
N/A
IIIB-4
(component) $ 40,958.23
5.50%
0.151319719721%
N/A
N/A
B-5 (composite)
$
632,141.00 Blended
0.151113825560%
0.150000242083%
April 25, 2036
IB-5 (component)
$
505,278.10 5.75%
0.150977384420%
N/A
N/A
IIB-5
(component) $
85,904.67 5.50%
0.151822398724%
N/A
N/A
IIIB-5
(component) $ 40,958.23
5.50%
0.151319719721%
N/A
N/A
B-6 (composite)
$
632,141.00 Blended
0.151113825560%
N/A
April 25, 2036
IB-6 (component)
$
505,278.10
5.75%
0.150977384420%
N/A
N/A
IIB-6
(component) $
85,904.67 5.50%
0.151822398724%
N/A
N/A
IIIB-6
(component) $ 40,958.23
5.50%
0.151319719721%
N/A
N/A
</TABLE>
----------
(1) The initial
target-rate class percentages are:
senior target-rate classes: 97.128839223138%
group I senior target-rate classes: 97.131431606700%
group II
senior target-rate classes: 97.115376345613%
group III senior target-rate classes: 97.124927240315%
subordinated classes: 2.871160776862%
(2) The initial
subordination level for the senior classes is 2.850000437536%.
(3) The annual
interest rates for the first LIBOR accrual period of April 25,
2006
through May 24, 2006, the formulas for the annual interest
rates
subsequent to the first LIBOR accrual period, and the maximum and
minimum
annual interest rates for each LIBOR and inverse LIBOR class are
as
follows:
| | Annual interest rate
11
<PAGE>
<TABLE>
<CAPTION>
LIBOR accrual
period beginning For first
Formula
for subsequent
Class
date
accrual period accrual
periods
Maximum
Minimum
-----
----------------- -------------- ----------------------
-------
-------
<S> <C>
<C>
<C>
<C>
<C>
IA-3 25th
day of month
5.27%
LIBOR + 0.45%
5.75%* 0.45%
IA-4 25th
day of month 0.42911656%
5.2% - LIBOR**
5.2%** 0%
IA-5 25th
day of month
5.37%
LIBOR + 0.55%
5.75%* 0.55%
</TABLE>
*
Classes IA-3 and IA-5 will benefit from two yield maintenance
agreements
with
The Bank of New York that may provide additional payments to
holders
of
class IA-3 certificates for distribution days for which LIBOR is
greater
than
5.3% and to holders of class IA-5 certificates for distribution
days
for
which LIBOR is greater than 5.2%.
**
If LIBOR is less than 5.3% for a distribution day, class IA-4
will
receive additional interest distributions for that distribution day
equal
to a
percentage rate per annum equal to the excess of 5.3% over LIBOR,
but
not
more than 0.1%, on the principal balance of class IA-3. Class IA-4
may
also
receive additional interest distributions under the yield
management
agreements.
(4) The notional
balance of class IA-4 on any distribution day will equal the
sum
of the principal balances of classes IA-3 and IA-5 on that
distribution
day.
(5) Classes IA-PO,
IIA-PO and IIA-PO are ratio-stripped PO classes and do not
bear
interest
(6) Classes IA-IO,
IIA-IO and IIIA-IO are ratio-stripped IO classes and have no
principal balance.
(7) The certificate
rate for class IA-IO for each month will equal the weighted
average pass-through rate of the premium loans in Group I on the
last day
of
that month, minus the target-rate. The initial certificate rate
for
class IA-IO is expected to be 0.3619731039% per annum.
(8) The certificate
rate for class IIA-IO for each month will equal the
weighted average pass-through rate of the premium loans in Group II
on the
last
day of that month, minus the target-rate. The initial certificate
rate
for
class IIA-IO is expected to be 0.1888023506% per annum.
(9) The certificate
rate for class IIIA-IO for each month will equal the
weighted average pass-through rate of the premium loans in Group
III on the
last
day of that month, minus the target-rate. The initial certificate
rate
for
class IIIA-IO is expected to be 0.1597923703% per annum.
12.3 TARGET RATE
The per annum target rates for the pools are
pool
I:
5.75%
pool
II:
5.50%
pool
III: 5.50%
Each
class other than any ratio-stripped IO or ratio-stripped PO class
is a
target-rate class.
12.4 RATIO-STRIPPED IO AND PO CLASSES
Each of classes IA-IO, IIA-IO and IIIA-IO, is a ratio-stripped IO
class. The
class IA-IO, IIA-IO and IIIA-IO certificates are private
certificates.
Each
of classes IA-PO, IIA-PO and IIIA-PO is a ratio-stripped PO
class.
12.5 LOSS LIMITS
There is no initial special hazard loss limit.
There is no initial bankruptcy loss limit.
There is no initial fraud loss amount.
12.6 DENOMINATIONS
The denominations of
o the
senior class certificates and the class B-1 through B-3
certificates
are
initial principal (or, for any IO classes, notional) balances of
$1,000
and
any whole dollar amount above $1,000,
o the
class B-4, B-5 and B-6 certificates are $100,000 initial
principal
balance and any larger integral multiple of $1,000, and
o the
residual certificates are percentage interests summing to 100%.
If
the initial principal or notional balance of a class is not a
permitted
denomination for a certificate of that class, one certificate
12
<PAGE>
of the class may be issued in a different denomination.
12.7 THE MORTGAGE LOANS
The mortgage loans in the Trust Fund are identified on the mortgage
loan
schedule. The mortgage loans in
o pool I
will consist primarily of 30-year fixed-rate conventional one-
to
four-family mortgage loans,
o pool II
will consist primarily of 12- to 15-year fixed-rate
conventional
one-
to four-family mortgage loans,
o pool III
will consist primarily of 30-year fixed-rate conventional one-
to
four-family mortgage loans originated through corporate
relocation
programs,
12.8 RIGHT TO REPURCHASE
CMSI cannot exercise its right to repurchase the mortgage loans
pursuant to
section 9.1(a) of the Standard Terms unless
o the
aggregate scheduled principal balance of the mortgage loans is
less
than
$42,142,700.66 at the time of repurchase, and
o if there
is an insured class outstanding and the exercise of such
repurchase right would result in a draw under any certificate
insurance
policy, the Insurer has previously consented.
12.9 BOOK-ENTRY AND DEFINITIVE CERTIFICATES
All senior class certificates (other than certificates of a
ratio-stripped IO
class that are private certificates) and the class B-1 through and
B-6
certificates will be issued as book-entry certificates. Book-entry
certificates
for a class or a group of classes will be represented by one or
more
certificates issued in the name of a depository. Any ratio-stripped
IO class
certificates that are private certificates, and the residual
certificates will
be issued in fully registered certificated form (definitive
certificates).
12.10 VOTING INTERESTS
Each IO class will have a 1% voting interest. The remaining voting
interest will
be allocated to the other classes in proportion to their principal
balances. The
voting interest of any class will be allocated among the
certificates of the
class in proportion to the certificates' principal or notional
balances, except
that an Insurer will be entitled to the voting interest of an
insured class for
as long as the insured class is outstanding and the Insurer is not
in default..
12.11 CASH DEPOSIT
No cash will be deposited into the certificate account on the
closing date.
13 PRINCIPAL
BALANCES
13.1 CLASS BALANCES
Each class that is not an IO class will have a principal balance,
and each IO
class will have a notional balance. The principal or notional
balance of
multiple classes (e.g., the senior classes) is the aggregate of the
principal or
notional balances of those classes.
The
initial principal or notional balance for each class is stated in
"The
series - General terms for classes" above. The principal balance of
each class
that is not an IO class will be adjusted on each distribution day,
as described
in "Adjustments to class balances" below.
The
notional balance of a ratio-stripped IO class for any day after
the
initial distribution day will equal the aggregate of the principal
balances for
that day of the hypothetical mortgage loans in its IO strip.
The
notional balance of each IO class that is not a ratio-stripped IO
class
will be adjusted on each distribution day as described in "The
series - General
terms for classes" above.
13
<PAGE>
13.2 CERTIFICATE BALANCES
The sum of the initial principal or notional balances stated on the
certificates
of each class will equal the initial principal or notional balance
of the class.
Except as may be provided in "Retail classes" below, the principal
or
notional balance of each certificate will equal its proportional
share, based on
the initial principal or notional balances stated on the
certificates of the
class, of the principal balance or notional balance of the class to
which the
certificate belongs.
14
ALLOCATIONS
14.1 INTEREST ALLOCATIONS
Beginning on the cut-off date, each class (other than any PO class)
will accrue
interest for each month on its principal or notional balance at the
certificate
rate for the class stated in "The series - General terms for
classes" above. In
calculating accrued interest,
o a
class's principal or notional balance on the last day of a month
will be
considered to be the class's principal or notional balance on every
day of
the
month, and
o interest
for a month will be calculated at 1/12 of the certificate rate,
regardless of the number of days in the month.
Example: Suppose that on January 1, a class has a principal balance
of
$1,020,000 and a certificate rate of 6% per annum. On the January
distribution
day, the class's principal balance is reduced by $20,000. As a
result, the
principal balance of the class on January 31 is $1 million. Then
the interest
accrued for the class during January (which is paid on the February
distribution
day) is 1/12 of 6% of $1 million = $5,000; that the principal
balance of the
class was greater than $1 million before the January distribution
day, and that
January has 31 days, are irrelevant.
A
class's interest allocation for a distribution day is the sum
of
o the
class's current interest allocation for the distribution day,
consisting of the class's accrued interest for the preceding month
minus
the
class's proportional share, based on accrued interest, of (1)
any
non-supported prepayment interest shortfall, and (2) the interest
portion
of
any non-subordinated losses, for the preceding month,
o plus any
excess of the class's interest allocation for the preceding
distribution day over the interest distributed to the class on
that
preceding distribution day (the interest allocation carryforward
from that
distribution day). (If the class is an insured class, for purposes
of
calculating allocations and distributions to the class, the
interest
allocation carryforward from a distribution day will be reduced by
any
payments to the class from the Insurer relating to the interest
allocation
carryforward, but will not be so reduced for purposes of effecting
the
Insurer's subrogation rights relative to the interest portion of
any
insured payment.)
14.2 PRINCIPAL ALLOCATIONS
The principal allocation for a distribution day is:
(a)
for any ratio-stripped PO class, the sum for that distribution day
of
scheduled and unscheduled principal payments on its PO strip for
that
distribution day.
(b)
for the senior target-rate classes collectively, the sum for
that
distribution day of
o the
target-rate class percentage for the senior target-rate classes
of
scheduled principal payments on the target-rate strip, and
o all
unscheduled principal payments on the target-rate strip allocated
to
the
senior target-rate classes pursuant to " - Unscheduled
principal"
below.
The
principal allocation for the senior target-rate classes will be
allocated among
14
<PAGE>
the individual senior target-rate classes pursuant to "Allocations
among the
senior classes" below.
(c)
for each subordinated class,
o the
class's target-rate class percentage of scheduled principal
payments on
the
target-rate strip for that distribution day,
o plus the
class's proportional share, based on the principal balances of
the
subordinated classes, of unscheduled principal payments on the
target-rate
strip for that distribution day that are not allocated to the
senior
target-rate classes pursuant to the preceding paragraph (b),
o plus or
minus any amounts that are reallocated to or from the class
pursuant to "- Maintenance of subordination" below.
14.3 UNSCHEDULED PRINCIPAL
For each distribution day, the following percentage of unscheduled
principal
payments on the target-rate strip received during the preceding
month will be
allocated to the senior target-rate classes:
o 100% if
the target-rate class percentage for all the senior target-rate
classes on the distribution day exceeds the initial target-rate
class
percentage for all the senior target-rate classes.
o
otherwise, and subject to the following proviso, the sum of (1)
the
target-rate class percentage for the senior target-rate classes,
plus (2)
the
following percentage of the target-rate class percentage for
the
subordinated classes:
DISTRIBUTION DAYS
PERCENTAGE
-------------------------------
1 through
60
100%
61 through
72
70%
73 through
84
60%
85 through
96
40%
97 through 108
20%
109 and after
0%
provided, that
o if the
distribution day is one on which the percentage shown in the
preceding table is to be reduced - that is, the 61st, 73rd, 85th
97th or
109th distribution day - and either the cumulative loss test or
the
delinquency test described below are not satisfied, then the
percentage
will
not be reduced on that distribution day or on any subsequent
distribution day until both the cumulative loss and delinquency
tests are
passed, and
o if the
cumulative loss test is not satisfied for a distribution day,
the
percentage of unscheduled principal payments allocated to the
senior
target-rate classes will be the greater of the percentage of
unscheduled
principal payments allocated to the senior target-rate classes for
that
distribution day calculated in accordance with the preceding rules
of this
section, or the
percentage of unscheduled principal payments allocated to
the
senior target-rate classes for the preceding distribution day.
The
cumulative loss test is satisfied for a distribution day if
cumulative
realized losses through that distribution day do not exceed the
following
percentages of the initial principal balance of the subordinated
classes:
PERCENTAGE OF
INITIAL PRINCIPAL
BALANCE OF
SUBORDINATED
DISTRIBUTION DAYS
CLASSES
--------------------------------------
61 through
72
30%
73 through
84
35%
85 through
96
40%
97 through 108
45%
109 and after
50%
The
delinquency test is satisfied for a distribution day if
CitiMortgage
certifies to the Trustee that the average of the aggregate
scheduled principal
balance of mortgage loans delinquent 60 days or more (including,
for this
purpose, mortgage loans in foreclosure and real estate owned by
the
15
<PAGE>
Trust as a result of mortgagor default) for that distribution day
and the
preceding five distribution days is either (1) less than 50% of the
average of
the principal balance of the subordinated classes for those
distribution days,
or (2) less than 2% of the average scheduled principal balance of
all of the
mortgage loans for those distribution days.
If
there are composite and component subordinated classes, only
the
composite subordinated classes are considered in the cumulative
loss and
delinquency tests.
14.4 MAINTENANCE OF SUBORDINATION
The subordination level for a class (other than a ratio-stripped IO
class) is
the sum of the class percentages of all classes that are
subordinate to that
class. If a class's subordination level on the day before a
distribution day is
less than the class's initial subordination level, then the class
will have an
impaired subordination level on that distribution day.
If a
subordinated class has an impaired subordination level on a
distribution day, then all principal originally allocated to the
subordinated
classes will be allocated to the most senior of the subordinated
classes with an
impaired subordination level and to those subordinated classes that
are senior
to the impaired class, in proportion to their principal balances,
up to those
classes' principal balances, and any remainder will be allocated to
the
remaining subordinated classes, in order of seniority, up to those
classes'
principal balances.
Example: Suppose that on a distribution day, (a) each of classes
B-1
through B-6 had a principal balance on the preceding day of $1,000,
(b) the
aggregate principal allocation to the subordinated classes is
$3,120, and (c)
class B-2 has an impaired subordination level. Then on that
distribution day
(1)
the entire amount allocated to the subordinated classes will be
allocated to classes B-1 and B-2, in proportion to their principal
balances, up
to their principal balances, and
(2)
$1,000 of the remaining $1,120 will be allocated to class B-3,
reducing
its principal balance to zero, and
(3)
the remaining $120 will be allocated to class B-4.
15 ALLOCATIONS
AMONG THE SENIOR CLASSES
15.1 ORDER OF ALLOCATION AMONG SENIOR TARGET-RATE CLASSES
On each distribution day before the subordination depletion date,
the aggregate
scheduled and unscheduled principal allocated to the senior
target-rate classes
of a group will be allocated to the individual senior target-rate
classes of
that group as follows:
GROUP I: Principal allocated to the group I senior target-rate
classes from
the pool I target-rate strip will be allocated concurrently as
follows:
First, to classes IA-9 and IA-10, the amounts determined under
"NAS
classes" below.
Second, concurrently as follows:
A.
8.4681053828% to
class IA-1 until its principal balance is reduced to
zero, and
B.
91.5318946172%
sequentially as follows:
1. up to $1,132,982 concurrently as follows:
a. 97%
sequentially to classes IA-7 and IA-8, in that order,
until their principal balances are reduced to zero, and
b. 3%
concurrently to classes IA-3 and IA-5, in proportion to
their principal balances, until their principal balances are
reduced to zero;
16
<PAGE>
2. concurrently
to classes IA-3 and IA-5, in proportion to their
principal balances, until their principal balances are reduced
to
zero; and
3. sequentially
to classes IA-7 and IA-8, in that order, until their
principal balances are reduced to zero.
Third, concurrently as follows:
A.
72.2398827717% sequentially as follows:
1. concurrently
to classes IA-2 and IA-17, in proportion to their
principal balances, until their principal balances are reduced
to
zero, and
2.
to class IA-16
until its principal balance is reduced to zero;
and
B.
27.7601172283% concurrently as follows:
1.
95.8333328009% sequentially as follows:
a. sequentially
to classes IA-11, IA-12, and IA-13, in that
order, until their principal balances are reduced to zero,
and
b. concurrently
to classes IA-14 and IA-15, in proportion to
their principal balances, until their principal balances are
reduced to zero; and
2. 4.1666671991%
to class IA-6, until its principal balance is
reduced to zero.
Fourth, concurrently to classes IA-9 and IA-10 until their
principal
balances are reduced to zero.
GROUP II: Principal allocated to the group II senior target-rate
classes
from the pool II target-rate strip will be allocated to class IIA-1
until its
principal balance is reduced to zero.
GROUP III: Principal allocated to the group III senior target-rate
classes
from the pool III target-rate strip will be allocated to class
IIIA-1 until its
principal balance is reduced to zero.
Beginning on the subordination depletion date, the priorities
stated above
will cease to be in effect, and the principal allocation for the
senior
target-rate classes of each group will be allocated to the senior
target-rate
classes of the group in proportion to their principal balances on
the preceding
day.
15.2 NAS CLASSES
Classes IA-9 and IA-10 are non-accelerated senior, or NAS classes.
The principal
allocation for each NAS class will equal.
o
its
proportionate share, based on the principal balances of the
group's senior target-rate classes, of scheduled principal payments
on
the related pool's target-rate strip allocated to the group's
senior
target-rate classes for that distribution day, plus
o
the
following percentage of its proportionate share, based on
principal balances of the group's senior target-rate classes,
of
unscheduled principal payments on the related pool's target-rate
strip
allocated to the group's senior target-rate classes for that
distribution day:
distribution day
percentage
-----------------------------
0 -
60
0%
61 - 72
30%
73 - 84
40%
85 - 96
60%
97 - 108
80%
109 and after
100%
15.3 PAC AND TAC CLASSES
There are no planned amortization (or PAC) classes.
There are no targeted amortization (or TAC) classes.
16
DISTRIBUTIONS
16.1 TYPES OF DISTRIBUTIONS
Each distribution will be either an interest distribution, a
principal
distribution, a reim-
17
<PAGE>
bursement, or a residual distribution, as described in "-
Distribution
priorities" below.
16.2 ACCRUAL AND ACCRUAL DIRECTED CLASSES
There are no accrual classes or accrual directed classes.
16.3 DISTRIBUTION PRIORITIES
Subject to section 18, "loss recoveries," on each distribution day,
the pool
distribution amount will be first distributed to any Insurer to pay
any
insurance premium, and then to the outstanding classes in the
following priority
(and, if there are any insured classes, the insured payment and
amounts
withdrawn from the reserve fund will be applied to make payments to
the insured
class certificates as provided in "Insured classes" below):
(1)
To each senior class, first, its current interest allocation for
that
distribution day, and second its interest allocation carryforward
from the
preceding distribution day, except that an accrual class's
interest
distributions may be redirected as described in "- Accrual and
accrual directed
classes" above. Distributions of current allocations among the
senior classes
will be in proportion to current interest allocations for, and
distributions of
interest allocation carryforwards will be in proportion to interest
allocation
carryforwards to, that distribution day.
(2)
(a) To any ratio-stripped PO class, principal up to its
principal
allocation for that distribution day, and (b) to the senior
target-rate classes,
principal up to their aggregate principal allocation for that
distribution day,
to be distributed to the senior target-rate classes in the
priorities described
in "Allocations among the senior classes - Order of allocation
among senior
target-rate classes" above.
(3)
To each subordinated class, in order of seniority, first, interest
up
to its interest allocation for that distribution day, and second,
principal up
to its principal allocation for that distribution day, except that
a
subordinated class's principal distribution may be used to
reimburse a
ratio-stripped PO class, as described in the following
paragraph.
(4) Principal
distributed to the subordinated classes under the preceding
paragraph will be used to reimburse a ratio-stripped PO class up to
the amount
of (a) any realized subordinated losses previously allocated to
the
ratio-stripped PO class, and (b) any reduction to the
ratio-stripped PO class's
principal balance to reflect the excess of (i) the aggregate
principal
allocations to the ratio-stripped PO class over (ii) the aggregate
principal
distributions to the ratio-stripped classes, as described in
"Adjustments to
class balances" below, to the extent that such losses and
reductions were not
previously reimbursed under this paragraph (4) or "Loss recoveries"
below. Such
reimbursements will be taken from distributions to the subordinated
classes in
order of subordination.
(5)
To each class, in order of seniority, a reimbursement of any
reduction
to the classes' principal balances to reflect the excess of (a) the
aggregate
principal allocations to the classes over (b) the aggregate
principal
distributions to the classes, as described in "Adjustments to class
balances"
below, to the extent such reductions were not previously
reimbursed. Classes
with equal seniority will share in the reimbursement in proportion
to such
unreimbursed reductions.
(6)
To the residual certificates, a residual distribution of the
remaining
pool distribution amount.
A
class that is no longer outstanding cannot receive a
distribution.
18
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Notwithstanding anything to the contrary in this agreement, no
distribution
will be made to a subordinated class on a distribution day if on
that
distribution day the principal balance of a more senior class would
be reduced
by any part of the principal portion of a realized subordinated
loss.
16.4 DISTRIBUTIONS TO CERTIFICATE HOLDERS
On each distribution day, distributions to a class will be
distributed to the
holders of the certificates of the class in proportion to the
principal or
notional balances of their certificates.
16.5 FINAL DISTRIBUTION ON THE RESIDUAL CERTIFICATES
Upon termination of the Trust in accordance with section 9.1,
"Termination upon
repurchase by CMSI or liquidation of all mortgage loans," any class
PR
certificates, and if there are no class PR certificates, the LR
certificates
will receive all amounts remaining in the certificate account and
in any retail
reserve fund after all required distributions on the certificates,
and any
required distributions to any Insurer, have been made.
16.6 WIRE TRANSFER ELIGIBILITY
The minimum number of single certificates eligible for wire
transfer on each
distribution day, for the certificates, is 1,000 (representing a
$1,000,000
initial principal balance or initial notional balance) and, for the
residual
certificates, a 100% percentage interest.
17 ADJUSTMENTS
TO CLASS BALANCES
On each distribution day, the principal balance of each class that
is not an IO
class will be adjusted, in the following order, as follows:
(1)
The principal balance of any ratio-stripped PO class will be
reduced by
realized losses on its PO strip for the preceding month.
(2)
The aggregate principal balance of the target-rate classes will
be
reduced by the principal portion of realized non-subordinated
losses on the
target-rate strip for the preceding month. The reduction will first
be allocated
between the subordinated classes, collectively, and the senior
target-rate
classes, collectively, in proportion to aggregate principal
balances. The
reduction for the subordinated classes will be allocated to the
individual
subordinated classes in proportion to their principal balances. The
reduction
for the senior target-rate classes will be allocated to the
individual senior
target-rate classes in proportion to their principal balances,
except that the
principal balance of an accrual class will be deemed to be the
lesser of its
principal balance or its initial principal balance.
(3)
To the extent that on the distribution day an interest distribution
to
an accrual class is redirected to an accrual directed class, the
principal
balance of the accrual class will be increased.
(4)
The principal balance of each class will be reduced by its
principal
distributions for that distribution day, including
(a) principal
distributions to an accrual directed class that are redirected
from
interest distributions to an accrual class, and
(b) principal
distributions to a subordinated class, even if part or all of
those principal distributions are, pursuant to section 16.3(4),
used to
reimburse a
ratio-stripped PO class.
However, any portion of an accrual class's interest distribution
that, on the
distribution day before the class's accrual termination day, is
distributed as
principal to the accrual class itself, will neither increase nor
decrease the
class's principal balance.
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<PAGE>
(5)
The aggregate principal balance of the target-rate classes will
be
reduced by the principal portion of realized subordinated losses on
the
target-rate strip for the preceding month. The reductions will be
applied first
to the subordinated classes in order of subordination, in each case
until the
principal balance of the class is reduced to zero. If the realized
subordinated
losses exceed the principal balance of the subordinated classes,
the principal
balance of the senior target-rate classes will be reduced by the
amount of the
excess. The excess will be allocated among the senior target-rate
classes in
proportion to their principal balances, except that for this
allocation, the
principal balance of an accrual class will be deemed to be the
lesser of its
principal balance or its initial principal balance.
(6)
The principal balance of any ratio-stripped PO class will be
reduced by
the excess of (a) the class's principal allocation over (b) the
class's
principal distribution for that distribution day.
(7)
The principal balance of each target-rate class will be reduced,
in
order of subordination, in an aggregate amount equal to the excess
of (a) the
aggregate principal allocations to the target-rate classes over (b)
the
aggregate principal distributions to the target-rate classes.
Classes of equal
seniority will share in such reduction in proportion to the amounts
by which the
principal allocation to each such class exceeded its principal
distribution.
For
purposes of the preceding paragraphs (1) through (7),
o the
principal portion of a debt service reduction will not be
considered a
realized loss, and
o
references to the class principal balances in any paragraph mean
the
principal balances after the adjustments required by the preceding
numbered
paragraphs.
Where the principal balance of a class is reduced due to a realized
loss
under the preceding paragraphs (1), (2) or (5), the loss will be
said to be
allocated to the class (an allocated loss) to the extent of the
reduction.
18 LOSS
RECOVERIES
The following rules for loss recoveries supersede any conflicting
rules in
"Distributions" or "Adjustments to class balances" above.
On
each distribution day, the amount of any loss recovery for the
preceding
month will be distributed as follows:
First, to each senior class to the extent of and in proportion to
its
aggregate realized losses for that and all preceding months that
were not
previously reimbursed under this paragraph or, for a ratio-stripped
PO class,
paragraph 4 of "Distributions -- Distribution priorities"
above.
Second, to the target-rate classes in the same manner as a
distribution of
unscheduled principal.
Distributions made pursuant to paragraph First above will not
result in any
adjustments to class balances, but distributions made pursuant to
paragraph
Second above will result in the normal adjustments to the class
balances
described in paragraph 4 of "Adjustments to class balances"
above.
The
principal balances of the subordinated classes will be increased
in
order of seniority to the extent of their aggregate realized losses
for that and
all preceding months that were not previously reimbursed under this
paragraph,
up to an aggregate amount for all subordinated classes equal to the
loss
recovery less the amounts distributed to the senior classes under
paragraph
First above.
Example: In May, there is a $1,000 of loss recovery. On the
June
distribution day, prior to any distributions or adjustments, the
senior
20
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classes have aggregate unreimbursed losses of $100 and the
subordinated classes
have aggregate unreimbursed losses of $700. Then on the June
distribution day,
1
$100 of the loss recovery will be distributed to the senior classes
to
reimburse them for previously allocated losses, but the
distribution will not
reduce the principal balances of the senior classes.
2
The remaining $900 of the loss recovery will be distributed to
the
target-rate classes in the same manner as unscheduled principal,
and class
balances will be reduced by the amount of the distributions.
3
The principal balances of the subordinated classes will be
increased by
the remaining $900. (The increase may be less than $900 if any of
the
subordinated classes are no longer outstanding.)
If
expenses on the liquidated loans for any month exceed the
amounts
recovered on the liquidated loans for the month, the excess will be
treated as a
realized loss on the mortgage loans.
19 ADDITIONAL
STRUCTURING FEATURES
The preceding provisions for allocations and distributions, and for
adjustments
to class balances, are subject to the following sections on LIBOR
classes,
composite and component classes, multiple-pool series, retail
classes, and
insured classes.
20 LIBOR
CLASSES
Classes IA-3 through IA-5 are LIBOR classes.
Each
LIBOR class will have a monthly LIBOR accrual period from the day
of
the month indicated in the footnotes to the table in "The Series -
General terms
for classes" above through the day preceding the first day of the
next LIBOR
accrual period. The first LIBOR accrual period for a class will be
the latest
possible LIBOR accrual period that ends before the first
distribution day.
Example: The LIBOR accrual period for a LIBOR class begins on the
25th day
of the month, and the first distribution day is February 25, 200x.
Then the
first LIBOR accrual period for the class begins on January 25, 200x
and runs
through February 24, 200x, the second LIBOR accrual period begins
on February
25, 200x and runs through March 24, 200x, and so forth.
A
LIBOR class will not accrue interest for any period before its
first
LIBOR accrual period. The interest rate for each LIBOR class is
stated in "The
series - General terms for classes" above.
CMSI
will determine LIBOR for each LIBOR accrual period (after the
first
LIBOR accrual period) on the second business day before the
beginning of each
LIBOR accrual period as follows:
O LIBOR
for any determination day will be the British Bankers
Association
LIBOR rate for US dollar deposits with a one-month maturity at
11AM, London
time
on that day, as such rate appears on Telerate Page 3750,
Bloomberg
Page
BBAM, or another page of these or any other financial reporting
service in general use in the financial services industry, rounded
upward,
if
necessary, to the nearest multiple of 1/16 of 1%.
o If no
rate is so reported on that day, CMSI will determine LIBOR on
the
basis of the rates on that day at approximately 11AM, London time,
at which
deposits in U.S. Dollars with a maturity of one month in a
principal amount
of
not less than U.S. $1 million and representative for a single
transaction in that market at that time, are offered to prime banks
in the
London interbank market for at least four major banks in the
London
interbank market selected by CMSI. CMSI will request the principal
London
office of each such bank to provide a quotation of its rate. If at
least
two
such quotations are provided, LIBOR will be the arithmetic mean
of
those quotations.
21
<PAGE>
o If fewer
than two quotations are provided, LIBOR will be the arithmetic
mean
of the rates quoted at approximately 11AM, New York time, on that
day
by
three major banks in New York City selected by CMSI for loans in
U.S.
Dollars to leading European banks having a maturity of one month in
a
principal amount of not less than U.S. $1 million that is
representative
for
a single transaction in such market at such time. If the banks
selected
by
CMSI are not quoting such rates, LIBOR will be LIBOR for the
preceding
LIBOR accrual period.
CMSI
may designate an affiliate or a third party to determine LIBOR.
21 COMPOSITE AND
COMPONENT CLASSES
The composite classes of the series, and each composite class's
component
classes are shown in the table in "The series - General terms for
classes"
above.
Each
composite class is comprised of two or more component classes.
Certificates are only issued for composite classes. Component
classes cannot be
severed from their composite classes, and cannot be separately
transferred.
Component classes are, however, considered classes for all purposes
of the
preceding sections on allocations and distributions except that
all
distributions to the component classes of a composite class will
become
distributions to the composite class. A composite class is not
considered a
class for purposes of allocations and distributions, but instead
receives all
the distributions made to any of its component classes. Voting is
by composite,
not component, classes.
In a
multiple-pool series, each subordinated class is a composite
class
formed of two or more component classes. Unless otherwise
specified, references
to a "subordinated class" mean the composite class.
22 MULTIPLE-POOL
SERIES
This is a multiple-pool series. The mortgage loans of this series
are divided
into three pools. Pool I consists of the mortgage loans described
in exhibit
B-1, Pool II consists of the mortgage loans described in exhibit
B-2, and Pool
III consists of the mortgage loans described in exhibit B-3.
Each
class of this series (other than certain composite classes) belongs
to
a group of classes related to a specific pool. The designation of
each class in
a group bears the roman numeral prefix of its related pool, and the
group is
referred to by that prefix.
Example: Classes related to pool I bear the prefix "I," as IA-1,
IB-1,
etc., and are referred to collectively as "group I."
With
exceptions described below, the classes of each group are treated
like
a separate series, with allocations to the classes of the group
being based
solely on payments on the related pool. Any ratio-stripping will be
done on a
pool basis, so that there will be separate PO, IO and target-rate
strips for
each pool, with the related group having its own target-rate, and
ratio-stripped
IO and PO, classes.
The
subordinated classes of each group will be component classes. A
ratio-stripped IO or PO class of a group will only be a component
class if so
designated in "The series - General terms for classes" above.
22.1 ADJUSTMENT OF SUBORDINATED COMPONENT CLASS PRINCIPAL
BALANCES
On each distribution day, the aggregate amount of any
o realized
subordinated losses on the mortgage loans in a pool, or
o excess
of the aggregate principal allocations to the related group's
target-rate classes over the aggregate principal distributions to
those
classes,
that, in accordance with "Adjustments to class balances" above,
would
reduce the
22
<PAGE>
principal balances of the group's subordinated component classes in
order of
subordination if the pool and the related groups were considered a
separate
series, will instead reduce
o the
principal balances of the subordinated composite classes in order
of
subordination, and
o the
aggregate principal balance of the group's subordinated
component
classes, by that amount.
Such
reduction in the aggregate principal balance of a group's
subordinated
component classes will result in adjustments to the principal
balance of the
subordinated component classes of each group so the ratio of the
principal
balances of the component classes from each group will be the same
for each
subordinated composite class.
Example: Assume subordinated composite classes B-1 through B-6,
each with a
principal balance of $1,000. There are two groups, I and II, and
the aggregate
principal balance of each group's subordinated component classes is
$3,000. Then
for each subordinated composite class, the ratio of the principal
balance of its
group I component class to the principal balance of its group II
component class
must be 1 to 1. Consequently, both the group I and the group II
component class
of each subordinated composite class will have a principal balance
of $500.
Now
assume a $750 subordinated loss in pool I. Then
o the
principal balance of class B-6 will be reduced by $750, to $250,
which
will
reduce the aggregate principal balance of the subordinated
composite
classes to $5,250,
o the
aggregate principal balance of the group I subordinated
component
classes will be reduced by $750, to $2,250, while the aggregate
principal
balance of the group II subordinated component classes will remain
at
$3,000;
o the
ratio of the aggregate principal balance of the group I
subordinated
component classes to the aggregate principal balance of the group
II
subordinated component classes will be $2,250 to $3,000, or 3 to
4;
o for
classes B-1 through B-5, the principal balance of the composite
class
will
remain at $1,000, but the principal balance of its group I
component
class will be approximately $428.57, and the principal balance of
its group
II
component class will be approximately $571.43 (a ratio of 3 to 4);
and
o class
B-6's principal balance of $250 will be comprised of a group I
component class with a principal balance of approximately $107.14,
and a
group II component class with a principal balance of approximately
$142.86
(a
ratio of 3 to 4).
If
subordinated losses on a mortgage pool for a distribution day
exceed the
aggregate principal balance of the subordinated component classes
of the related
group, the aggregate principal balance of such component classes
will be reduced
to zero, and the aggregate principal balance of the subordinated
component
classes of the other groups will be reduced by the excess.
Example: Suppose that in the series in the preceding example, the
group I
subordinated component classes and the group II subordinated
component classes
each have an aggregate initial principal balance of $3,000, and
that each
subordinated composite class, B-1 through B-6 has a principal
balance of $1,000.
Now suppose that there are $4,000 of subordinated losses on the
mortgage loans
in pool II's target-rate strip, but no losses on the mortgage loans
in pool I's
target-rate strip. Then the entire $4,000 of losses will be
allocated to the
subordinated classes, reducing the principal balance of classes B-3
through B-6
to zero. Classes B-1 and B-2 will each retain a principal balance
of $1,000,
comprised of a group I component class with a principal balance of
$1,000 and a
group II component class with a principal balance of $0. The
principal balance
of the subordinated group I component classes will thus be reduced
by
23
<PAGE>
$1,000 even though there are no losses on the pool I target-rate
strip.
Subject to "- Undercollateralization" below, if realized
subordinated
losses on a distribution day exceed the aggregate principal balance
of the
subordinated classes, the aggregate principal balance of the senior
classes in
each group will be reduced by the group's proportional share of the
excess
losses, based on the proportions of all the losses for that
distribution day in
the mortgage loan pools.
Example: Assume that for a distribution day, there are $2,250 of
realized
subordinated losses in pool I and $4,500 of realized subordinated
losses in pool
II. The aggregate principal balance of the subordinated classes is
only $6,000.
Then the principal balance of the subordinated classes will be
reduced to $0,
and the remaining $750 of losses will reduce the aggregate
principal balance of
the senior classes of group I by $250 (or 1/3 of $750), and will
reduce the
aggregate principal balance of the senior classes of group II by
$500 (or 2/3 of
$750). The principal balances of the component classes of the
subordinated
classes are irrelevant for these purposes.
22.2 MAINTENANCE OF SUBORDINATION
Impairment of subordination for subordinated classes of a
multiple-pool series
will be determined based on composite, not component, classes. In
determining
whether a composite class has an impaired subordination level, the
principal
balance of the composite class will equal the sum of the principal
balances of
its component classes. If a subordinated composite class has an
impaired
subordination level, then principal will be allocated among the
subordinated
composite classes pursuant to "Allocations - Maintenance of
subordination"
above, and, for purposes of adjusting principal balances, will be
further
allocated to the component classes in proportion to their principal
balances.
22.3 DISTRIBUTION SHORTFALLS
If on a distribution day, payments on the mortgage loans in the
target-rate
strip for a pool are not sufficient to permit payments of any
insurance premium
due to an Insurer, and all interest and principal allocated to the
senior
target-rate classes of the related group, then the pool may receive
insurance
premium, interest and principal distributions from payments on the
mortgage
loans in another pool once any insurance premium due is paid to the
Insurer, and
full interest and principal distributions are made to the senior
target-rate
classes of the group related to the other pool.
Example: Suppose that there are two groups of classes and that on
a
distribution day, cash available for distribution to the group I
senior-target
rate classes from payments on the pool I mortgage loans is $1,000
less than the
aggregate interest and principal allocations to group I's senior
target-rate
classes, while cash available for distribution to the group II
senior-target
rate classes from payments on the pool II mortgage loans exceeds
the aggregate
interest and principal allocations to group II's senior target-rate
classes by
$1,500. Then $1,000 of the extra $1,500 available to group II will
be used to
make full interest and principal distributions to the group I
senior target-rate
classes, and only the remaining $500 will be distributed to the
group II
subordinated component classes.
If
there are several pools for which mortgage loan payments do not
provide
enough cash for full distributions to the senior target-rate
classes and any
Insurer, the related groups will receive cash from other pools in
proportion to
the aggregate amount by which any insurance premium due to an
Insurer, and
interest and principal distributions would otherwise fall short of
interest and
principal allocations. If there are several pools where mortgage
loan payments
provide cash in excess of the amount required
24
<PAGE>
for full distributions, they will provide cash to the senior
target-rate
classes, and any Insurer, of those groups related to the other
pools in
proportion to the amounts of the excess.
22.4 UNDERSUBORDINATION
If on a distribution day before the subordination depletion date,
the principal
balances of all the senior target-rate classes of any group (but
not the
principal balances of all the group's subordinated component
classes) have been
reduced to zero, and there is undersubordination (as defined
below), then on
that distribution day, before any distributions are made,
o the pool
distribution amount of the group will be reduced by an amount
(the
reduction amount) equal to the lesser of (1) unscheduled principal
payments
on
the related pool's target-rate strip received by the Trust during
the
preceding month and (2) the excess, determined without regard to
this
section "- Undersubordination," of the pool distribution amount
over the
amount required to be used to reimburse any ratio-stripped PO
classes,
o the
principal allocation to each class in the group will be reduced by
the
class's proportionate share, based on principal balances, of the
reduction
amount,
o the pool
distribution amount of each group whose senior target-rate
classes
have
not been reduced to zero will be increased by a proportionate share
of
the
reduction amount based on the aggregate principal balance of the
senior
target-rate classes of each such group, and
o the
aggregate principal allocation for the senior target-rate classes
of
each
group whose senior target-rate classes have not been reduced to
zero
will
be increased by the portion of the reduction amount added to its
pool
distribution amount, which increased aggregate allocation will be
further
allocated among the senior target-rate classes in accordance with
the rules
in
"Allocations among the senior target-rate classes" above.
There is undersubordination on a distribution day if either
o the
subordination level of the senior classes (without regard to group)
on
that distribution day
is less than 200% of the initial subordination level
of
the senior classes, or
o the
aggregate scheduled principal balance of the mortgage loans in any
pool
that
are delinquent 60 days or more (including for this purpose
mortgage
loans in foreclosure and real estate owned by the Trust as a result
of
Mortgagor default), averaged over the last six months, is 50% or
more of
the
principal balance of the related group's subordinated component
classes.
22.5 UNDERCOLLATERALIZATION
Because losses on a mortgage loan may be allocated in part to the
subordinated
component classes of a different group, the scheduled principal
balance of a
pool's target-rate strip could differ from the aggregate principal
balance of
the related group's target-rate classes. If the scheduled principal
balance of a
pool's target-rate strip is less than the aggregate principal
balance of the
related group's target-rate classes, the group will be
undercollateralized by
the amount of the difference; conversely, if the scheduled
principal balance of
a pool's target-rate strip is more than the aggregate principal
balance of the
related group's target-rate classes, the group will be
overcollateralized by the
amount of the difference.
If a group is
undercollateralized, the normal distribution rules will be
adjusted as follows:
(1)
To the extent that scheduled interest payments on the target-rate
strip
of a pool related to an overcollateralized group ex-
25
<PAGE>
ceed the aggregate interest allocations to that groups' target-rate
classes,
plus any insurance premium due to an Insurer, that excess, up to
the amount of
any interest allocation carryforwards that the undercollateralized
group would
otherwise experience on that distribution day and the insurance
premium, will be
deducted from the pool distribution amount for the
overcollateralized group and
added to the pool distribution amounts for the undercollateralized
group. If
there is more than one such undercollateralized group, or more than
one
overcollateralized group, then (a) amounts will be deducted from
the pool
distribution amounts for the groups that are overcollateralized in
proportion to
such excess interest payments, up to the aggregate amount of such
interest
allocation carryforwards and the insurance premium for the
undercollateralized
groups, and (b) amounts will be added to the pool distribution
amounts of the
undercollateralized groups in proportion to the amount of such
interest
allocation carryforwards and insurance premium.
(2)
Before the subordination depletion date, if one or more groups
is
undercollateralized and the principal balance of each of the
groups'
subordinated component classes has been reduced to zero, then (a)
all amounts
that (after required reimbursements to any ratio-stripped PO
classes) would
otherwise be distributed as principal to the subordinated component
classes of
the other groups, up to the aggregate amount by which such
undercollateralized
groups are undercollateralized, will, in proportion to the
aggregate principal
balance of the subordinated component classes of such other groups,
be deducted
from the pool distribution amount and the principal allocations to
the
subordinated component classes of such other groups, and (b) such
amount will be
added to the pool distribution amounts and the principal
allocations of the
target-rate classes of such undercollateralized groups, in
proportion to the
amount by which such groups are undercollateralized.
(3)
After the subordination depletion date, if a group is
undercollateralized, then
o once a
group's target-rate classes are all reduced to zero, principal
payments on the related pool's target-rate strip will be added to
the pool
distribution amount and to
the principal allocations of the target-rate
classes of the undercollateralized groups, in proportion to the
amount by
which they are undercollateralized, and
o realized
losses on the target-rate strips of the pools related to the
overcollateralized groups will, up to the amount by which the group
is
overcollateralized, not reduce the principal balances of the
target-rate
classes of those groups, but will instead reduce the principal
balances of
the target-rate
classes of the undercollateralized groups, in proportion to
the
amount by which they are undercollateralized, and in accordance
with
"Adjustments to class balances" above. If there is more than
one
overcollateralized group, the losses that will not reduce principal
balance
will
be in proportion to the amount by which each group is
overcollateralized. If there is more than one undercollateralized
group,
the
aggregate reductions in principal balances for each group will be
in
proportion to the amounts by which such groups are
undercollateralized.
22.6 NON-SUBORDINATED INTEREST SHORTFALLS
Prior to the subordination depletion date, reductions to interest
allocations
due to (a) interest shortfalls due to the federal Servicemembers
Civil Relief
Act or any comparable state laws and (b) non-supported prepayment
interest
shortfalls will be allocated pro-rata to all the classes of all the
groups,
26
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regardless of the pools in which the shortfalls originate.
From
and after the subordination depletion date,
o interest
shortfalls due to the federal Servicemembers Civil Relief Act
or
any
comparable state laws will be separately calculated for each pool,
and
will
be allocated solely to the classes of the related group, and
o the
compensating cap and non-supported prepayment interest shortfalls
will
be
separately calculated for each pool, and non-supported
prepayment
interest shortfalls for a pool will be allocated solely to the
classes of
the
related group.
23 SUPER SENIOR
CLASSES
The following table lists the super senior classes, and their
respective super
senior support classes.
Super senior
Super senior support
------------
--------------------
IA-10
IA-9
After the subordination depletion date, any loss (other than a
non-subordinated
loss) on a target-rate strip that would otherwise reduce the
principal balance
of a super senior class will instead reduce the principal balance
of its super
senior support classes until the principal balance of its super
senior support
classes is reduced to zero.
For
these purposes, the principal balance of a super senior support
class
on a distribution day will be determined after giving effect to the
adjustments
described in paragraphs (2) through (5) of section 17, "Adjustments
to class
balances," for that distribution day (which include the reductions
for
non-subordinated losses, principal distributions and realized
subordinated
losses), but before the adjustments required by this section
23.
24 RETAIL
CLASSES
There are no retail classes. There is no retail reserve fund.
25 INSURED
CLASSES
There are no insured classes. There is no Insurer, certificate
insurance policy,
insurance premium, or reserve fund.
26 ADVANCE
ACCOUNT
There is/are no advance account, advance account advances, advance
account
available advance amount, advance account depository, advance
account depository
agreement, advance account funding date, or advance account trigger
date, Paying
Agent failure, or Paying Agent failure advance.
27 REMIC
PROVISIONS
27.1 CONSTITUENT REMICS
(a) CMSI and the Trustee will make the appropriate elections to
treat the Trust
Fund, and the affairs of the Trust Fund will be conducted so as to
qualify the
Trust Fund, for federal income tax purposes as three separate
constituent REMICs
- the pooling REMIC, the lower-tier REMIC, and the upper-tier
REMIC. The pooling
REMIC will be the applicable constituent REMIC for purposes of
section 3.21.
The
assets of the pooling REMIC will consist of the mortgage loans,
such
amounts as may from time to time be held in the certificate
account, any
insurance policies relating to a mortgage loan, and property that
secured a
mortgage loan and that has been acquired by foreclosure or deed in
lieu of
foreclosure and all proceeds thereof. Classes IA-IO, IIA-IO,
IIIA-IO, IA-PO,
IIA-PO and IIIA-PO and the class P regular interests described
below, are
designated as the regular interests in the pooling REMIC within the
meaning of
Internal Revenue Code Section 860G(a)(1). Class PR is designated as
the
27
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residual interest in the pooling REMIC within the meaning of
Internal Revenue
Code Section 860G(a)(2).
The
assets of the lower-tier REMIC will consist of the class P
regular
interests described below, the Trustee's rights under any
certificate insurance
policy and reserve fund, any retail reserve fund, and any assets in
the
lower-tier REMIC account described below. Classes IA-1, IA-2, IA-6
through
IA-17, IIA-1, IIIA-1 and B-1 through B-6, and the class L regular
interests
described below, are designated as the regular interests in the
lower-tier
REMIC. Class LR is designated as the residual interest in the
lower-tier REMIC.
The
assets of the upper-tier REMIC will consist of the class L
regular
interests described below, and any assets in the upper-tier REMIC
account
described below. Classes IA-3 through IA-5 are designated as the
regular
interests in the upper-tier REMIC. Class R is designated as the
residual
interest in the upper-tier REMIC.
27.2 THE CLASS P AND CLASS L REGULAR INTERESTS
There are six uncertificated class P regular interests, each
designated as
"Citicorp Mortgage Securities Trust REMIC Pass-Through
Certificates, Series
2006-2," and further individually designated as a
o "PI-M
regular interest,"
o "PI-Q
regular interest,"
o "PII-M
regular interest,"
o "PII-Q
regular interest,"
o "PIII-M
regular interest," and
o "PIII-Q
regular interest,"
There are two uncertificated class L regular interest, designated
as
"Citicorp Mortgage Securities Trust. remic Pass-Through
Certificates, Series
2006-2," and further designated as the "LI-3 regular interest" and
"LI-5 regular
interest."
The
initial principal or notional balances and certificate rates of
the
class P and class L regular interests are:
initial principal
Regular (or
notional)
certificate
interest
balance
rate (per annum)
--------
------------------- ----------------
PI-M $
960.027812
5.75%
PI-Q
$334,670,444.092188
5.75%
PII-M $
163.218764
5.50%
PII-Q $
56,582,179.421236
5.50%
PIII-M $
77.820577
5.50%
PIII-Q $
27,067,263.949423
5.50%
LI-3 $
53,090,169.00
5.75%
LI-5 $
55,000,000.00
5.75%
The
Trustee acknowledges that it is holding the class P regular
interests
as assets of the lower-tier REMIC and the class L regular interests
as assets of
the upper-tier REMIC.
27.3 DISTRIBUTIONS TO CLASS P AND CLASS L REGULAR INTERESTS
On each distribution day, each regular interest will receive a
principal
distribution, or allocation of the principal portion of realized
losses, equal
in the aggregate to the principal distribution, or allocation of
the principal
portion of realized losses, for that day on,
o for the
PI-M and PI-Q regular interests, the pool I target-rate strip;
o for the
PII-M and PII-Q regular interests, the pool II target-rate
strip,
o for the
PIII-M and PIII-Q regular interests, the pool II target-rate
strip,
o for the
class LI-3 regular interest, class IA-3, and
o for the
class LI-5 regular interest, class IA-5.
Recoveries of previously allocated realized losses of principal
will be
allocated to the class P and any class L regular interests in the
same manner as
realized losses were allocated to them.
For
each distribution day, and for each pool x and y, the Px-M
regular
interest will receive distributions of principal, or alloca-
28
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tion of the principal portion of realized losses on the related
target-rate
strip, so as to keep its principal balance (computed to $.000001)
equal to 0.01%
of the aggregate principal balance of the subordinated component
classes of the
related group. However, if the ratio of the principal balance of
the Px-M
regular interest to the principal balance of the Py-M regular
interest is not
the same as the ratio of the aggregate principal balance of the
component
classes xB-1 through xB-6 to the aggregate principal balance of the
component
classes yB-1 through yB-6, then the least amount of principal will
be
distributed to the Px-M or Py-M regular interest, as applicable, so
that the
ratio of the principal balance of the Px-M regular interest to the
principal
balance of the Py-M regular interest will be the same as the ratio
of the
aggregate principal balance of the component classes xB-1 through
xB-6 to the
aggregate principal balance of the component classes yB-1 through
yB-6. Also,
for such distribution day, the Px-Q regular interest will receive
the balance of
the principal distribution, and allocation of the principal portion
of realized
losses on its related target-rate strip.
As
of any date,
o the
principal balance of the class LI-3 regular interest will equal
the
principal balance of class IA-3, and
o the
principal balance of the class LI-5 regular interest will equal
the
principal balance of class IA-5.
On
each distribution day, each class P and any class L regular
interest
will receive an interest distribution at its certificate rate, and
interest
shortfalls and the interest portion of realized losses for the
related
target-rate strip will be allocated to such regular interest in the
same
proportion as interest is allocated to them, provided that
o (a)
prior to the subordination depletion date, non-supported
prepayment
interest shortfalls will be allocated pro-rata to all the class P
regular
interests, regardless of the pool in which the shortfalls
originate, and
(b)
from and after the subordination depletion date, non-supported
prepayment interest shortfalls for any pool x (where x is a
variable for
pool
designations I, II, etc.) will be allocated solely to the Px-M
and
Px-Q
regular interests, and
o (a)
prior to the subordination depletion date, any class L regular
interest
will
be allocated its proportional share, based on accrued interest of
any
lower-tier REMIC regular interests, of non-supported prepayment
interest
shortfalls, regardless of the pool in which the shortfalls
originate, and
(b)
from and after the subordination depletion date, any class L
regular
interest will be allocated its proportional share, based on
accrued
interest of any class L regular interests and the other lower-tier
REMIC
regular interests designated class xA, of non-supported prepayment
interest
shortfalls for pool x.
No
interest shortfall amount or unpaid interest shortfall on any class
P or
class L regular interest will bear interest.
The
certificate rate for the class LI-3 regular interests is comprised
of
the sum of LIBOR plus 0.45% per annum payable on the class IA-3
certificates,
and 5.3% per annum minus LIBOR payable on that part of the notional
balance of
the class IA-4 certificates that equals the principal balance of
the class IA-3
certificates. The certificate rate for the class LI-5 regular
interests is
comprised of the sum of LIBOR plus 0.55% per annum payable on the
class IA-5
certificates, and 5.2% per annum minus LIBOR payable on that part
of the
notional balance of the class IA-4 certificates that equals the
principal
balance of the class IA-5 certificates.
29
<PAGE>
27.4 REMIC ACCOUNTS AND DISTRIBUTIONS
CitiMortgage, the Trustee and the Paying Agent will
o perform
their duties in a manner consistent with the REMIC provisions
of
the
Internal Revenue Code, and will not knowingly take or fail to take
any
action that would adversely affect the continuing treatment of the
Trust
Fund
as segregated asset pools and the treatment of each such
segregated
asset pool as a REMIC or would result in the imposition of a tax on
the
Trust Fund, or any constituent REMIC, and
o carry
out their covenants in this agreement and the elections and
reporting
required in section 3.15 on behalf of each constituent REMIC,
including
maintaining the following segregated accounts:
o
the
certificate account,
o
if there
is a pooling REMIC, a pooling REMIC account,
o
a
lower-tier REMIC account, and
o if there is an
upper-tier REMIC, an upper-tier REMIC account.
Any
pooling REMIC account, the lower-tier REMIC account, and any
upper-tier
REMIC account will be established in the same manner as the
certificate account.
CitiMortgage, on behalf of the Trustee, will deposit daily in
the
certificate account in accordance with section 3.3 all remittances
received by
it, any amounts required to be deposited in the certificate account
pursuant to
section 3.2, all other deposits required to be made to the
certificate account
other than those amounts specifically designated to be deposited in
any pooling
REMIC account, the lower-tier REMIC account, or any upper-tier
REMIC account in
this section, "REMIC accounts and distributions," and all
investments made with
moneys on deposit in the certificate account, including all income
or gain from
such investments, if any. Funds on deposit in the certificate
account will be
held and invested in accordance with the applicable provisions of
section 3.2
and 3.20. Distributions from the certificate account will be made
in accordance
with sections 3.6, 3.8 and these Series Terms to make payments in
respect of the
regular and residual interests in any pooling remic, the lower-tier
REMIC, and
any upper-tier REMIC and to pay servicing fees in accordance with
section 3.6(h)
and any insurance premium.
Notwithstanding anything herein to the contrary, regular and
residual
interests in any pooling REMIC, the lower-tier REMIC, and any
upper-tier REMIC
will not receive distributions directly from the certificate
account. On each
distribution day,
o if there
is a pooling REMIC, CitiMortgage, on behalf of the Trustee,
will
withdraw from the certificate account and deposit by 12 noon in the
pooling
REMIC account all distributions to be made on such distribution day
in
respect of interest on or in reduction of the principal balance of
any
class P regular interests, and
o if there
is no pooling REMIC, CitiMortgage, on behalf of the Trustee,
will
withdraw from the certificate account and deposit by 12 noon in
the
lower-tier REMIC account all distributions to be made on such
distribution
day
in respect of interest on or in reduction of the principal balance
of
the
regular interests in the lower-tier REMIC.
If
there is an upper-tier REMIC, CitiMortgage, on behalf of the
Trustee,
will immediately thereafter withdraw from the lower-tier REMIC
account and
deposit in the upper-tier REMIC account all distributions to be
made on such
distribution day in respect of interest on or in reduction of the
principal
balance of any class L regular interests.
The
Trustee will cause to be distributed from the lower-tier REMIC
account
and any upper-tier REMIC account, to the extent
30
<PAGE>
funds are on deposit therefor, all amounts required to be
distributed with
respect to the regular and residual interests in the lower-tier
REMIC and any
upper-tier REMIC as specified in these Series Terms.
To the extent that any
part of the lower-tier REMIC account or any
upper-tier REMIC account is designated in these Series Terms as an
investment
account, the provisions in section 3.19 applicable to the
investment of funds
will apply to such REMIC accounts. In addition, section 3.3(a)
regarding
commingling will apply to such REMIC accounts.
(b)
CitiMortgage will maintain books for constituent REMICs on a
calendar
year taxable year and on the accrual method of accounting.
(c)
The Trustee will not create, or permit the creation of, any
"interests"
in any constituent REMIC within the meaning of Internal Revenue
Code Section
860D(a)(2) other than the interests represented by the certificates
or, if there
are multiple REMICs, the uncertificated regular interests in any
pooling REMIC
or (if there is an upper-tier REMIC) the lower-tier REMIC.
(d)
Except as otherwise provided in the Internal Revenue Code,
CitiMortgage
will not grant, and neither CitiMortgage nor the Trustee will
accept, property
unless (i) substantially all of the property held by each
constituent REMIC
constitutes either "qualified mortgages" or "permitted investments"
as defined
in Internal Revenue Code Sections 860G(a)(3) and (5), respectively,
and (ii) no
property will be granted to a constituent REMIC after the startup
day, unless
the grant would not subject the constituent REMIC to the 100% tax
on
contributions to a REMIC after the startup day imposed by Internal
Revenue Code
Section 860G(d).
(e)
The Trustee will not accept on behalf of the Trust Fund or a
constituent REMIC any fee or other compensation for services and
will not accept
on behalf of the Trust Fund any income from assets other than those
permitted to
be held by a REMIC.
(f)
Neither CitiMortgage nor the Trustee will sell or permit the sale
of
all or any portion of the mortgage loans, or of an Eligible
Investment held in
the certificate account or in any REMIC account (other than in
accordance with
sections 2.2, 2.3, 2.4 and 3.19(a)) unless such sale is pursuant to
a "qualified
liquidation" as defined in Internal Revenue Code Section
860F(a)(4)(A) and is in
accordance with section 9.1.
27.5 TAX MATTERS PERSON
If in any taxable year there will be more than one holder of any
class of
residual certificates, a tax matters person may be designated for
the related
REMIC, who will have the same duties for the related REMIC as those
of a "tax
matters partner" under Subchapter C of Chapter 63 of Subtitle F of
the Internal
Revenue Code, and who will be, in order of priority, (i)
CitiMortgage or an
affiliate of CitiMortgage, if CitiMortgage or such affiliate is the
holder of a
residual certificate of the related REMIC at any time during the
taxable year or
at the time the designation is made, (ii) if CitiMortgage is not a
holder of a
residual certificate of the related REMIC at the relevant time,
CitiMortgage as
agent for the holder of the residual certificate of the related
REMIC, if the
designation is permitted to be made under the Internal Revenue
Code, or (iii)
the holder of a residual certificate of the related REMIC or person
who may be
designated a tax matters person in the same manner in which a tax
matters
partner may be designated under applicable Treasury Regulations,
including
Treasury Regulations Section 1.860F-4(d) and temporary Treasury
Regulations
Section 301.6231(a)(7)-1T.
31
<PAGE>
28 YIELD
MAINTENANCE AGREEMENTS
28.1 AGREEMENTS
The Trustee is hereby directed to enter into two yield maintenance
agreements
with The Bank of New York (the yield maintenance provider) in
substantially the
form attached as exhibit F. The yield maintenance agreements are
assets of the
Trust, but not of any constituent REMIC.
Under the yield maintenance agreements, the yield maintenance
provider will
make certain payments (yield maintenance payments) to the Trustee
for the
benefit of the holders of the classes IA-3 and IA-5 certificates.
Yield
maintenance payments received by the Trustee will be forwarded to
the Paying
Agent for distribution to the holders of the class IA-3 and IA-5
certificates in
proportion to the principal balances of their certificates.
Payments to the yield maintenance provider will be made by the
Underwriter,
and the Trustee will have no responsibility for such payments.
The
Trustee may direct the yield maintenance provider and yield
maintenance
guarantor to make yield maintenance payments directly to the Paying
Agent.
If a
yield maintenance payment is made for the benefit of the holders
of
the class IA-3 or IA-5 certificates on a distribution day, and the
payment is
based on a "Notional Amount" for the class (as defined in the yield
maintenance
agreement for the class) that exceeds the principal balance of the
class on the
distribution day, that part of the payment allocable to the excess
shall be paid
to the holders of the class IA-4 certificates, in proportion to the
notional
principal balances of their certificates on the distribution day,
rather than to
the holders of the class IA-3 or IA-5 certificates.
28.2 TAX TREATMENT
The Trustee will treat the portion of the Trust that holds the
yield maintenance
agreements as a grantor trust for federal income tax purposes. The
Trustee will
treat the holders of the class IA-3 and IA-5 certificates as the
beneficial
owners of their respective yield maintenance agreements, and will
treat the
holders of the class IA-4 certificates as the beneficial owners of
an interest
in both yield maintenance agreements, in each case to the extent of
their
respective entitlements. The Trustee will account for and report
annually to the
holders of the class IA-3, IA-4 and IA-5 certificates and to the
IRS (as
attachments to Form 1041 or other applicable form) their allocable
shares of
income and expense with respect to the yield maintenance
agreements. The Trustee
will not vary the investment of the holders of the class IA-3, IA-4
and IA-5
certificates to take advantage of variations in market rates of
interest to
improve their rates of return.
29 NOTICE
ADDRESSES
Notices should be sent:
To
the Trustee at its corporate trust office at One Federal Street,
3rd
Floor, Boston, Massachusetts 02110, Attention: Corporate Trust
Services.
To
CMSI at Citicorp Mortgage Securities, Inc., 1000 Technology
Drive,
O'Fallon, Missouri 63368, Attention: Larry Kent Slough.
To
CitiMortgage at CitiMortgage, Inc., 1000 Technology Drive,
O'Fallon,
Missouri 63368, Attention: Larry Kent Slough.
To
S&P at 55 Water Street, 41st Floor, New York, New York 10041,
Attention:
RMBS Surveillance.
To
Moody's at 99 Church Street, New York, New York 10007.
To
Fitch at Residential Mortgage Pass-Through Monitoring, Fitch
Ratings,
One
32
<PAGE>
State Street Plaza, 30th Floor, New York, New York 10004.
To
Citibank, N.A. at (a) for certificate transfer and presentment
of
certificates for final distribution, at 111 Wall Street, 15th
floor, New York,
NY 1005, Attention: 15th floor window, and (b) for all other
purposes, at 388
Greenwich Street, 14th Floor, New York, NY 10013, Attention: Agency
and Trust,
CMSI.
To
the Mortgage Document Custodian at Citibank (West), FSB, 5280
Corporate
Drive, M/C 0005, Frederick, Maryland 21703, Attention: Loretta
Badgett.
To
any Insurer, at the address given for the Insurer in the first
paragraph
of "Insured classes" above.
The
Paying Agent, any Insurer, CMSI and CitiMortgage may each change
their
address for notices by written notice to the others. The Trustee
may change its
corporate trust office by written notice to CMSI, CitiMortgage, any
Insurer, and
all certificate holders.
30 INITIAL
DEPOSITORIES
The initial Depository for the certificate and servicing accounts
for the
mortgage loans will be Citibank (West), FSB.
33
<PAGE>
STANDARD TERMS
1
DEFINITIONS AND USAGES
1.1 DEFINED TERMS
In this agreement, the following words and phrases have the
following meanings:
accrual termination day: For an accrual class, the earlier of (1)
the first
distribution day on which the principal balance of each of its
accrual directed
classes on the preceding day is zero, or (2) the subordination
depletion date.
affiliate: For a specified person, any other person that controls,
is
controlled by or is under common control with the specified person.
In this
definition, "control" of a specified person means the power to
direct the
management and policies of the person, directly or indirectly,
whether through
the ownership of voting securities, by contract or otherwise; and
the terms
"controlling" and "controlled" have correlative meanings.
affiliated servicing fee rate: 0.25% per annum. The monthly
affiliated
servicing fee rate is one-twelfth of the affiliated servicing fee
rate.
aggregate outstanding advances: For a determination date, the
aggregate of
net servicing account advances, net voluntary advances, net Paying
Agent
advances and advance account advances made from the cut-off date to
the
determination date, plus any uncommitted cash advances to be made
on the next
distribution day.
appraisal: For a mortgage loan, the appraisal conducted in
connection with
the origination of the mortgage loan, whether originated upon the
purchase of
the related mortgaged property or in connection with a
refinancing.
Authorized Officer: For CitiMortgage or CMSI, the Chairman of the
Board of
Directors, the President, any Executive Vice President, Senior Vice
President,
Vice President, Assistant Vice President, Controller, Assistant
Controller,
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer,
or any other
natural person designated in an officer's certificate signed by any
of the
foregoing officers and furnished to the Trustee and, solely in the
case of a
statement given pursuant to section 3.22, any Servicing
Officer.
Bankruptcy Code: The United States Bankruptcy Code of 1978.
bankruptcy coverage termination date: If there is a bankruptcy loss
limit,
the distribution day on which the bankruptcy loss limit has been
reduced to zero
or a negative number (or the subordination depletion date, if
earlier).
bankruptcy loss:
For a mortgage loan, (1) a debt service reduction or (2) a
deficient valuation, unless, in either case, CitiMortgage has
notified the
Trustee that CitiMortgage is diligently pursuing any remedies that
may exist in
connection with the representations and warranties made regarding
the related
mortgage loan and either (A) the related mortgage loan is not in
default with
regard to payments due thereunder, or (B) delinquent payments of
principal and
interest under the related mortgage loan, and any premiums on any
applicable
hazard insurance policy and any related escrow payments for the
mortgage loan,
are being advanced on a current basis without giving effect to any
debt service
reduction.
bankruptcy loss limit: If an initial bankruptcy loss limit is
stated in the
Series Terms, for a distribution day, the initial bankruptcy loss
limit minus
the aggregate amount of bankruptcy losses since the cut-off date.
The bankruptcy
loss limit may be further reduced by CitiMortgage (including
accelerating the
manner in which such coverage is reduced) provided that prior to
the reduction,
each rating agency confirms in
34
<PAGE>
writing to CitiMortgage (with a copy to the Trustee) that the
reduction will not
adversely affect the rating agency's then-current rating of the
certificates.
beneficial owner: For a certificate held by a Clearing Agency, the
person
who is the beneficial owner of the certificate as reflected on the
Clearing
Agency's books or on the books of a person maintaining an account
with the
Clearing Agency (directly or as an Indirect Participant, in
accordance with the
Clearing Agency's rules).
business day: Any day other than a Saturday, a Sunday or a day on
which
banking institutions in New York, New York or in the cities where
the Trustee,
the Paying Agent, CMSI, CitiMortgage, any Insurer (but only to the
extent that
the Insurer is required under this agreement to make or receive a
payment on
that day), any delegated servicers, and (but only if the
third-party servicer is
depositing funds received on third-party mortgage loans with
CitiMortgage or the
Paying Agent on that day) the third-party servicer is located are
authorized or
obligated by law or executive order to be closed or, in the case of
a
distribution day and if there are book-entry certificates, any day
on which the
relevant Clearing Agency is closed. For purposes of determining
LIBOR for any
LIBOR classes, a business day is a day on which banks in London and
New York are
open for the transaction of international business.
buydown account: The deposit account or accounts, which may bear
interest,
created and maintained in the name of the Trustee for the benefit
of the
mortgagors, subject to the rights of the Trustee pursuant to the
buydown subsidy
agreements.
buydown funds: Funds contributed at origination by the seller or
buyer of a
property subject to a buydown mortgage loan, or by any other
source, plus
interest earned thereon, in order to reduce the payments required
from the
mortgagor for a specified period in specified amounts.
buydown mortgage loan: Any mortgage loan for which, pursuant to a
buydown
subsidy agreement, (i) the mortgagor pays less than the full
monthly payments
specified in the mortgage note for a specified period, and (ii) the
difference
between the payments required under the buydown subsidy agreement
and the
mortgage note is provided from buydown funds.
buydown subsidy agreement: The agreement relating to a buydown
mortgage
loan pursuant to which an Originator may apply the buydown funds to
a
mortgagor's payments.
certificate holder or holder: The person in whose name a
certificate is
registered in the Certificate Register.
Citibank banking affiliate: An affiliate of Citibank, N.A. that is
either
(i) a federal savings and loan association duly organized, validly
existing and
in good standing under the federal banking laws, (ii) an
institution duly
organized, validly existing and in good standing under the
applicable banking
laws of any state, or (iii) a national banking association duly
organized,
validly existing and in good standing under the federal banking
laws.
class: For
certificates, any certificates designated as a class in the
Series Terms, for any class L or class P regular interests, the
regular
interests in the constituent REMIC designated as such in "REMIC
provisions"
above, and for residual certificates, all residual certificates
having the same
class designation. A "class" will be understood not to include a
residual class
of certificates unless otherwise expressly stated.
class percentage: For one or more classes, the ratio of the
aggregate of
the principal balances of the classes to the aggregate of the
principal balances
of all classes of the series, expressed as a percentage.
35
<PAGE>
classes A-x through A-y: For a positive integer x and a greater
integer y,
each class A-z for all integers z from x through y, inclusive.
Example: "classes
A-3 through A-5" means each of classes A-3, A-4, and A-5. If a
class is
designated with an integer and letter pair, then such class follows
the class
with the same integer x and precedes the class of the next greater
integer y.
Example: "classes A-3 through A-5" means, if there are classes A-4A
and A-4B,
each of classes A-3, A-4, A-4A, A-4B, and A-5.
classes B-x through B-y: For a positive integer x and any greater
integer
y, each class B-z for all integers z from x through y, inclusive.
Example:
"classes B-3 through B-5" means each of classes B-3, B-4 and
B-5.
Clearing Agency: An organization registered as a "clearing agency"
pursuant
to Section 17A of the Exchange Act. The initial Clearing Agency
will be The
Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank other
financial
institution or other person for whom a Clearing Agency effects
book-entry
transfers and pledges of securities deposited with the Clearing
Agency.
collected servicing fee on a mortgage loan: For any month, the
excess of
the interest payment received on the mortgage loan for the month
(including
accrued interest due but not received from liquidation or insurance
proceeds for
liquidated loans) over the amount of interest on the mortgage loan
for the month
at the pass-through rate, up to the servicing fee CitiMortgage is
permitted to
retain under this agreement.
debt
service reduction: For a mortgage loan, a reduction in the
scheduled
monthly loan payment for the mortgage loan by a court of competent
jurisdiction
in a proceeding under the Bankruptcy Code or any similar state law,
except a
reduction that would constitute a deficient valuation. If the court
proceeding
results in an increase in the scheduled payment for a month (for
example, a
final balloon payment or a payment in a month after the originally
scheduled
maturity of the mortgage loan), the increased payment will be
considered a
scheduled payment and not a debt service reduction.
Example: Suppose a homeowner has a mortgage loan with an
outstanding
principal balance of $50,000 and an interest rate of 7%. The loan
has 10 years
to run. The homeowner files for bankruptcy, and the bankruptcy
court (1) reduces
the outstanding principal balance to $40,000, (2) reduces the
interest rate to
6%, and (3) stretches the payments out to 20 years. Then
o the
$10,000 reduction in principal owed is a bankruptcy loss, and
o the
difference between the monthly payment the homeowner would have
made on
the
remaining $40,000 at the original interest rate and maturity, and
the
monthly payment the homeowner is now required to make on the new
lower
interest rate and extended maturity, is a debt service reduction,
and
o payments
in the final 10 years (that is, after the originally scheduled
maturity) will be scheduled payments.
deficient valuation: For a mortgage loan, a valuation by a court
of
competent jurisdiction of the mortgaged property in an amount less
than the
then-outstanding indebtedness under the mortgage loan, or a
reduction in the
scheduled monthly principal payment that results in a permanent
forgiveness of
principal, which valuation or reduction results from a proceeding
under the
Bankruptcy Code or any similar state law.
delegated servicer: A person or persons, including a special
servicer, to
whom CitiMortgage delegates some or all of its servicing
obligations pursuant to
section 4.5.
Depository: The bank or banks or savings and loan association
or
associations or trust company or companies (which may be the
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Trustee or which may be Citibank, N.A. or a Citibank banking
affiliate ) at
which the certificate account, buydown account, escrow account,
custodial
account for P&I and servicing account are established or
maintained pursuant to
section 3.2, 3.3 or 3.3. Each Depository must meet the requirements
of section
11.2.
determination
date: For each distribution day, the close of business on the
18th day (or, if that day is not a business day, the preceding
business day) of
the month in which the distribution day occurs.
discount loan: A mortgage loan that has a pass-through rate less
than the
target rate.
Eligible Account: Either
(A)
a segregated account or accounts maintained at Citibank, N.A. or
a
Citibank banking affiliate, provided that the short-term unsecured
debt
obligations of Citibank, N.A. or the Citibank banking affiliate are
rated at
least "A-1+" by S&P if S&P is a rating agency, "F-l" by
Fitch if Fitch is a
rating agency, and "P-1" by Moody's if Moody's is a rating agency,
or
(B)
a segregated account or accounts maintained with an institution
o whose
deposits are insured by the FDIC,
o the
unsecured and uncollateralized debt obligations of which are rated
at
least "AA" by S&P if S&P is a rating agency, "AA" by Fitch
if Fitch is a
rating agency, and "Aa" by Moody's if Moody's is a rating
agency,
o that has
a short term rating of at least "A-1+" by S&P if S&P is a
rating
agency, "F-1" by Fitch if Fitch is a rating agency, and "P-1" by
Moody's if
Moody's is a rating agency, and
o is
either (i) a federal savings and loan association duly
organized,
validly existing and in good standing under the federal banking
laws, (ii)
an
institution duly organized, validly existing and in good standing
under
the
applicable banking laws of any state, (iii) a national banking
association duly organized, validly existing and in good standing
under the
federal banking laws and (iv) a principal subsidiary of a bank
holding
company, or
(C)
a trust account (which will be a "special deposit account")
maintained
with the trust department of a federal or state chartered
depository institution
or of a trust company, having capital and surplus of not less than
$50 million,
acting in its fiduciary capacity.
Any
Eligible Account maintained with the Trustee will conform to
the
preceding clause (C).
ERISA: The Employee Retirement Income Security Act of 1974.
ERISA Restricted Certificates: The B-4, B-5 and B-6 certificates
and each
class of ratio-stripped IO certificates.
Exchange Act: The Securities Exchange Act of 1934.
extraordinary event: Any of the following events: (i) hostile or
warlike
action in time of peace or war; (ii) the use of any weapon of war
employing
atomic fission or radioactive force whether in time of peace or
war; or (iii)
insurrection, rebellion, revolution, civil war or any usurped power
or action
taken by any governmental authority in preventing such occurrences
(but not
including looting or rioting occurring not in time of war).
FDIC: The Federal Deposit Insurance Corporation.
FHLMC: The Federal Home Loan Mortgage Corporation.
Fitch: Fitch Ratings.
fraud loss limit: If an initial fraud loss limit is stated in the
Series
Terms, for a distribution day,
(X)
prior to the second anniversary of the cut-off date, the initial
fraud
loss limit minus the aggregate amount of fraud losses since the
cut-off date,
and
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(Y)
from the second through fifth anniversary of the cut-off date, (1)
the
lesser of (a) the fraud loss limit as of the most recent
anniversary of the
cut-off date and (b) 0.50% of the aggregate scheduled principal
balance of all
the mortgage loans as of the most recent anniversary of the cut-off
date, minus
(2) the aggregate amount of fraud losses since the most recent
anniversary of
the cut-off date.
After the fifth anniversary of the cut-off date the fraud loss
limit will
be zero.
fraud loss: A liquidated loan loss as to which there was fraud in
the
origination of the mortgage loan.
GIC:
A guaranteed investment contract or surety bond.
GNMA: the Government National Mortgage Association.
group: In a multiple-pool series, the classes related to a pool; in
a
single-pool series, all the classes.
group target-rate class percentage: For one or more target-rate
classes of
a group, the ratio of the classes' principal balance to the
principal balance of
all target-rate classes of the group, expressed as a percentage.
For a single
pool series, the group target-rate class percentage is the same as
the
target-rate class percentage.
Guide: The CitiMortgage, Inc. Servicing Guide, being the manual
relating to
CitiMortgage's mortgage loan purchase program, as revised or
supplemented from
time to time.
high-cost mortgage loan: A "high cost loan," "high-rate,
high-fee
mortgage," "covered loan," or similar loan under any predatory
lending law, if
the law contains provisions that may result in liability of the
Trust Fund as a
purchaser or assignee of the loan.
holder: Has the same meaning as "certificate holder."
hypothetical mortgage loan: A non-existent mortgage loan that,
combined
with one or more other hypothetical mortgage loans, would have the
same interest
and principal payments as an actual mortgage loan.
Example: A mortgage loan having a principal balance of $100,000 and
a
pass-through rate of 8% could be divided into two hypothetical
mortgage loans,
the first having a $100,000 principal balance and a pass-through
rate of 7% per
annum, and the second an IO loan having a $100,000 principal
balance and a
pass-through rate of 1% per annum. References to the hypothetical
mortgage loans
in the target-rate strip will include those actual mortgage loans
whose
pass-through rates equal the target rate.
independent accountants: Accountants who are "independent" within
the
meaning of Rule 2-01(b) of the Securities and Exchange Commission's
Regulation
S-X under the Exchange Act.
Indirect Participant: An organization that participates in the
Clearing
Agency by clearing through or by maintaining a custodial account
with a
Participant.
initial: As applied to a principal or notional balance, target-rate
class
percentage, or subordination level, means the principal or notional
balance,
target-rate class percentage, or subordination level as of the
cut-off date.
insurance proceeds: Proceeds of
o a
primary mortgage insurance policy,
o a hazard
insurance policy to the extent not applied to restore the
mortgaged property or released to the mortgagor in accordance
with
CitiMortgage's normal servicing procedures or, for a third-party
servicer,
the
Guide, and
o any
other insurance policy or bond relating to the mortgage loans or
their
servicing.
Internal Revenue Code: The Internal Revenue Code of 1986.
investment account: The certificate account (but only if so stated
in the
Series Terms) and any other account or any portion
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thereof that consists of cash or Eligible Investments.
Investment Income: Any and all investment income and gains, net of
any
losses, actually received on the investment of funds on deposit in
all
investment accounts.
IO
class: A class that has a certificate rate but no principal
balance,
receives interest distributions on its notional balance, but does
not receive
principal distributions.
IO
loan: A mortgage loan having only a "notional balance." Such a
mortgage
loan would pay interest (usually at a variable rate) on its
notional balance,
but would not pay principal.
IO
strip: The ratio-stripped IO loans for all the premium loans.
liquidated loan: A mortgage loan for which
o the
related mortgaged property has been acquired, liquidated or
foreclosed,
and the relevant servicer
determines that all liquidation proceeds it
expects to recover have been recovered, or
o the
related mortgaged property is retained or sold by the mortgagor,
and
the
relevant servicer has accepted payment from the mortgagor in
consideration for the release of the mortgage in an amount that is
less
than
the outstanding principal balance of the mortgage loan as a result
of
a
determination by the relevant servicer that the potential
liquidation
expenses for the mortgage loan would exceed the amount by which the
cash
portion of such payment is less than the outstanding principal
balance of
the
mortgage loan.
liquidated loan loss: For a distribution day, the aggregate losses
for each
mortgage loan that became a liquidated loan prior to the first day
of the month
that contains the distribution day, which for each such liquidated
loan will
equal the excess of
o (A) the
unpaid principal balance of the mortgage loan on the first day
of
the preceding month,
plus (B) accrued interest in accordance with the
amortization schedule at the time applicable to the mortgage loan
at the
applicable mortgage note rate from the first day of the month as to
which
interest was last paid on the mortgage loan through the last day of
the
month in which the mortgage loan became a liquidated loan, over
o the net
liquidation proceeds for the mortgage loan.
Each
liquidated loan loss will have an interest portion and a
principal
portion. If net liquidation proceeds for the mortgage loan exceed
the accrued
interest described in clause (B) above, the interest portion of the
liquidated
loan loss will be zero; otherwise, the interest portion of the
liquidated loan
loss will be the excess of the accrued interest described in clause
(B) above
over such net liquidation proceeds. The principal portion of a
liquidated loan
loss will equal the liquidated loan loss minus the interest portion
of the
liquidated loan loss.
liquidation expenses: For a liquidated loan, out-of-pocket expenses
paid or
incurred by or for the account of the relevant servicer or the
Trust Fund for
(a) property protection expenses, (b) property sales expenses, (c)
foreclosure
costs, including court costs and reasonable attorneys' fees, (d)
similar
expenses reasonably paid or incurred in connection with the
liquidation of the
liquidated loan, (e) servicing fees not previously paid on the
liquidated loan,
and (f) any tax imposed on the Trust Fund with respect to a
liquidated loan or
property received by deed in lieu of foreclosure.
liquidation proceeds: For a period, the amounts received by the
relevant
servicer in connection with the liquidation of a liquidated loan,
whether
through judicial or non-judicial foreclosure, proceeds of insurance
policies,
condemnation proceeds, proceeds of a deficiency action (less
amounts retained by
CitiMortgage pursuant to sec-
39
<PAGE>
tion 3.12), or otherwise, including payments received from the
mortgagor for the
liquidated loan, other than amounts required to be paid to the
mortgagor
pursuant to the terms of the liquidated loan or to be applied
otherwise pursuant
to law.
loss
recovery: For a liquidated loan, any amounts received on the
liquidated loan (net of expenses on the liquidated loan) for any
month after the
month in which the mortgage loan becomes a liquidated loan, that
are not applied
to the reduction of aggregate outstanding advances for the
liquidated loan.
master servicing fee: The amount payable to CitiMortgage pursuant
to
section 3.7.
master servicing fee rate: The per annum rate agreed between
CitiMortgage
and a third-party servicer for calculating the master servicing
fee. The monthly
master servicing fee rate will be one-twelfth of the master
servicing fee rate.
month: A calendar month.
Moody's: Moody's Investors Service, Inc.
mortgage: For a mortgage loan, the mortgage or deed of trust
creating a
first lien on and an interest (a) for a mortgage loan relating to a
cooperative
apartment in a cooperative housing corporation, in the mortgagor's
interest
therein securing a mortgage note, and (b) for other cases, in real
property
securing a mortgage note.
mortgage documents: All documents contained in the mortgage
file.
mortgage file: The mortgage documents listed in section 2.1
pertaining to a
particular mortgage loan and any additional documents required to
be added to
such documents pursuant to this agreement.
mortgage loan: At any time, the indebtedness of a mortgagor
evidenced by a
mortgage note that is secured by real property (or shares
evidencing ownership
interest in a cooperative apartment in a cooperative housing
corporation) and
that is sold and assigned to the Trustee and held at such time in
the Trust Fund
pursuant to this agreement, the mortgage loans originally so held
being
identified in the mortgage loan schedule.
mortgage loan schedule: The list of mortgage loans transferred to
the
Trustee as part of the Trust Fund, attached as exhibit B, or
separately
delivered, in physical or electronic form, to the Trustee.
mortgage note: For a mortgage loan, the promissory note or other
evidence
of indebtedness of the mortgagor.
Mortgage Note Custodian: The Mortgage Document Custodian is also
designated
by CMSI as the Mortgage Note Custodian. At any time that the rating
agencies'
respective rating of Citigroup Inc.'s long-term senior debt is
below the
respective rating assigned by each such rating agency to the
certificates, the
Mortgage Note Custodian may not be an affiliate of CMSI.
mortgage note rate: For a mortgage loan, the annual rate per annum
at which
interest accrues on the mortgage loan.
mortgaged property: Any real property subject to a mortgage, or
any
cooperative apartment in a cooperative housing corporation.
mortgagor: The obligor on a mortgage note.
multiple-pool series: A series in which the mortgage loans are
divided into
two or more pools for purposes of allocations and distributions.
Each series is
either a single-pool series or a multiple-pool series.
net
liquidation proceeds: For a period, the aggregate amount of
liquidation
proceeds for a liquidated loan, net of related liquidation expenses
not
previously recovered.
net
REO proceeds: For a REO loan, REO proceeds net of any related
expenses
of the relevant servicer.
net
Paying Agent advances: For a period, the amount (which may be
negative)
ob-
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tained by subtracting the amount of any reimbursements for Paying
Agent advances
received in the period from the aggregate amount of Paying Agent
advances made
in the period.
net
voluntary advances: For a period, the amount (which may be
negative)
obtained by subtracting the amount of any reimbursements for
voluntary advances
received in the period from the aggregate amount of voluntary
advances made in
the period.
nonrecoverable advance: Any portion of a voluntary advance or
Paying Agent
advance previously made or proposed to be made in respect of a
mortgage loan
that has not been previously reimbursed to the relevant servicer or
the Paying
Agent and that, in the good faith judgment of such person, would
not be
ultimately recoverable from liquidation proceeds or other
recoveries in respect
of the related mortgage loan. Nonrecoverable advances also include
any advance
by CitiMortgage of part or all of the shortfall in interest
collections on a
mortgage loan due to the federal Servicemembers Civil Relief Act or
any similar
state legislation that cannot be recouped from later payments on
the mortgage
loan. The determination by such person that it has made a
nonrecoverable advance
or that any proposed advance, if made, would be a nonrecoverable
advance, will
be evidenced by a certification of a Servicing Officer delivered to
the Trustee
and the Paying Agent and detailing the basis for such
determination, but any
delay or failure to send such certification will not impair such
person's right
to withhold or recover such advance.
non-subordinated losses: (1) Special hazard, fraud or bankruptcy
losses
that exceed the then-applicable limit for that type of loss, (2)
realized losses
from extraordinary events, and (3) interest shortfalls due to
limitations on
interest rates mandated by the federal Servicemembers Civil Relief
Act or any
comparable state laws.
non-supported prepayment interest shortfall: For a distribution day
and a
class (other than a PO class), the class's proportional share,
based on interest
accrued, of the sum of (1) for affiliated mortgage loans, the
excess, if any, of
the prepayment interest shortfalls on such mortgage loans for that
distribution
day over the amount deposited in the distribution account by
CitiMortgage
pursuant to section 3.4 in connection with prepayment interest
shortfalls, and
(2) for third-party mortgage loans, any excess of the prepayment
interest
shortfalls on such mortgage loans for that distribution day over
the aggregate
amount deposited in the certificate account in respect thereof by
the applicable
third-party servicers as required by section 3.4 and the Guide.
officer's certificate: A certification signed by an Authorized
Officer of
CitiMortgage or CMSI and delivered to the Trustee or Paying
Agent.
opinion of counsel: A written opinion of counsel, who (unless
otherwise
specified herein) may be counsel for, or an employee of, CMSI or an
affiliate of
CMSI, which counsel will be reasonably acceptable to the
Trustee.
order of seniority: For the target-rate classes, the following
order: the
senior classes, followed by classes B-1, B-2, B-3, B-4, B-5 and
B-6.
order of subordination: For the target-rate classes, the following
order:
classes B-6, B-5, B-4, B-3, B-2 and B-1, followed by the senior
classes.
original value: For the mortgaged property underlying a mortgage
loan, the
lesser of
o the
sales price of the mortgaged property and
o its
appraisal value determined pursuant to an appraisal made in
connection
with
origination of the mortgage loan, except
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that
the original appraisal of the mortgaged property may be used for
a
refinanced mortgage loan the unpaid principal balance of which,
after
refinancing, does not exceed the unpaid principal balance of the
original
mortgage loan at the time of refinancing by an amount greater than
the
amount of the closing costs associated with the refinancing.
The
original value of a mortgage loan is the original value of the
mortgaged property underlying the mortgage loan plus the value of
any other
property securing the mortgage loan.
Originator: The affiliate or affiliates of CMSI, or the
third-party
originators, from which CMSI is acquiring the mortgage loans.
outstanding: (1) For certificates as of any date, all
certificates
previously authenticated and delivered under this agreement
except:
(i)
certificates that have been canceled by the Certificate Registrar
or
delivered to the Certificate Registrar for cancellation;
(ii)
certificates for which money for a distribution in the
necessary
amount to reduce the principal balance to zero has been deposited
with the
Paying Agent in trust for the holders of such certificates;
provided, however,
that if a distribution in reduction of the principal balance of
such
certificates to zero will be made, notice of the distribution has
been duly
given pursuant to this agreement or provision therefor,
satisfactory to the
Trustee, has been made;
(iii) certificates in exchange for or in lieu of which other
certificates
have been authenticated and delivered pursuant to this agreement
unless proof
satisfactory to the Certificate Registrar is presented that any
such
certificates are held by a protected purchaser under Article 8 of
the Uniform
Commercial Code in effect in the applicable jurisdiction; and
(iv)
certificates alleged to have been destroyed, lost or stolen for
which
replacement certificates have been issued as provided for in
section 5.3 and
authenticated and delivered pursuant to this agreement;
provided, however, that in determining whether the holders of the
requisite
percentage of the aggregate principal balance or percentage
interest of any
outstanding certificates or of the outstanding certificates of any
one or more
classes have given any request, demand, authorization, direction,
notice,
consent or waiver, such percentage will be based on the principal
balance of
such certificate and provided, further, certificates owned by CMSI
or any other
obligor upon the certificates or any affiliate of CMSI or such
other obligor
will be disregarded and deemed not to be outstanding, except that,
in
determining whether the Trustee will be protected in relying upon
any such
request, demand, authorization, direction, notice, consent, or
waiver, only
certificates which the Trustee knows to be so owned will be so
disregarded and
except that where CMSI or any other obligor upon the certificates
or any
affiliate of CMSI or such other obligor will be owner of 100% of
the aggregate
principal balance or percentage interest of any outstanding
certificates, CMSI
or such other obligor or affiliate will be permitted to give any
request,
demand, authorization, direction, notice, consent or waiver
hereunder.
Certificates so owned that have been pledged in good faith may be
regarded as
outstanding if the pledgee establishes to the satisfaction of the
Trustee the
pledgee's right so to act with respect to such certificates and
that the pledgee
is not CMSI or any other obligor upon the certificates or any
affiliate of CMSI
or such other obligor.
(2)
for a class for any day, a class with a non-zero principal balance
or
non-zero notional balance on that day, and
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(3)
for a mortgage loan, for the first day of a month, a mortgage
loan
that, prior to such first day, was not the subject of a principal
prepayment in
full, did not become a liquidated loan, and was not purchased
pursuant to
section 2.2 or 2.3.
Participant: A participating organization in the Clearing
Agency.
pass-through rate: For a mortgage loan for any date or period,
the
applicable mortgage note rate, minus
o for an
affiliated mortgage loan, the affiliated servicing fee rate,
and
o for a
third-party mortgage loan, the sum of the third-party servicing
fee
rate
and the master servicing fee rate.
Any regular monthly remittance of interest at the pass-through rate
for a
mortgage loan is based upon annual interest at that rate on the
scheduled
principal balance as of the first day of the month of the mortgage
loan divided
by twelve. Interest at the pass-through rate will be computed on
the basis of a
360-day year, each month being assumed to have 30 days. The monthly
pass-through
rate will be one-twelfth of the pass-through rate.
(Any
partial remittance of interest at such rate by reason of a full
principal prepayment is based upon annual interest at that rate on
the prepaid
principal balance of the related mortgage loan, multiplied by a
fraction the
numerator of which is the actual number of days elapsed in the
month of the
prepayment to the date of the prepayment, and the denominator of
which is 360.
For affiliated mortgage loans, and some or all of the third-party
mortgage
loans, the mortgagor is not required to pay interest on a partial
principal
prepayment that is received during a month. The amounts required to
be paid
pursuant to section 3.4 are in addition to any interest payments
made by
mortgagors and passed through on full and partial prepayments.)
percentage interest: For a class of residual certificates, if the
residual
certificate has a principal balance as specified in the Series
Terms, the ratio
of the initial principal balance of the residual certificate to the
aggregate
initial principal balance of the entire class, expressed as a
percentage; if the
residual certificate does not have a principal balance, the portion
represented
by such residual certificate (expressed as a percentage) of the
total ownership
interest in the applicable constituent REMIC represented by all
residual
certificates of the class. For a certificate of an IO class, the
ratio of the
notional balance of the certificate to the aggregate notional
balance of the
entire class.
person: Any legal person, including any individual,
corporation,
partnership, joint venture, association, joint stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
PO
class: A class that has a principal balance and receives
principal
distributions, but does not have a certificate rate and does not
receive
interest distributions.
PO
loan: A mortgage loan that has a principal balance, but on which
no
interest is paid by the mortgagor. PO strip: The ratio-stripped PO
loans for all
the discount loans.
pool: A pool of mortgage loans.
pool
distribution amount: For a distribution day and a mortgage loan
pool,
the funds eligible for distribution to the related classes on that
distribution
day, being all amounts deposited into the certificate account
relating to that
pool, but excluding the following:
(a)
uncommitted cash that will not be used on the distribution day for
an
uncommitted cash advance;
(b)
all permitted withdrawals from the certificate account pursuant
to
section 3.8; and
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<PAGE>
(c)
all income from Eligible Investments that are held in an
investment
account.
predatory lending law: The Georgia Fair Lending Act, the Maine
Consumer
Credit Code - Truth-in-Lending, the New Jersey Home Ownership
Security Act of
2002, the New Mexico Home Loan Protection Act, the New York
Predatory Lending
Act, or any similar state, local or federal law that regulates
high-cost
mortgage loans.
Predecessor
Certificates: For a particular certificate of a class, every
previous certificate of that class evidencing all or a portion of
the same
principal balance, notional balance or percentage interest as that
evidenced by
the particular certificate; for the purpose of this definition, any
certificate
authenticated and delivered under section 5.3 in lieu of a lost,
destroyed or
stolen certificate will be deemed to evidence the same principal
balance,
notional balance or percentage interest, as the case may be, as the
lost,
destroyed or stolen certificate.
premium loan: A mortgage loan having a pass-through rate equal to
or
greater than the target rate.
prepayment interest shortfall: For a mortgage loan that was the
subject of
a principal prepayment applied during the preceding month, an
amount equal to
(1) one month of interest on the principal prepayment at the
pass-through rate,
less (2) the amount of any interest (adjusted to the pass-through
rate) on the
principal prepayment received from the mortgagor.
primary mortgage insurance certificate: The certificate of primary
mortgage
insurance relating to a particular mortgage loan to the extent
initially set
forth in the mortgage loan schedule.
principal prepayment: For a mortgage loan, a payment of principal
on the
mortgage loan that is received in advance of the date it is
scheduled to be paid
and that is not accompanied by an amount representing scheduled
interest for any
month subsequent to the month of prepayment, but excluding any
proceeds of or
advances on a liquidated loan.
private certificates: The residual certificates and certificates of
classes
B-4 through B-6 and, unless otherwise stated in the Series Terms,
any
ratio-stripped IO classes.
Proceeding: Any suit in equity, action at law or other judicial
or
administrative proceeding.
property protection expenses: For mortgage loans, expenses paid or
incurred
by or for the account of CitiMortgage or the Trust Fund in
accordance with the
related mortgages for (a) real estate property taxes and property
repair,
replacement protection and preservation expenses, and (b) similar
expenses
reasonably paid or incurred to preserve or protect the value of the
mortgages.
Qualified GIC: A GIC, assigned to the Trustee or Paying Agent, or
entered
into by the Trustee or Paying Agent at the direction of CMSI, on or
before the
closing date, providing for the investment of funds insuring a
minimum or fixed
rate of return on investments of such funds, which contract or
surety bond will
(a)
be an obligation of an insurance company, trust company,
commercial
bank (which may be Citibank, N.A. or a Citibank banking affiliate)
or other
entity whose credit standing is confirmed in writing as acceptable
by each
rating agency;
(b)
provide that the Trustee or the Paying Agent may exercise all of
the
rights of CMSI under such contract or surety bond without the
necessity of the
taking of any action by CMSI;
(c)
provide that if at any time (subject to the second proviso of
this
section (c)) the then current credit standing of the obligor under
such
guaranteed investment contract is such that continued investment
pursuant to
such contract of funds included in the
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<PAGE>
Trust Fund would result in a downgrading of any rating of any class
of the
certificates, the Trustee or the Paying Agent may terminate such
contract and be
entitled to the return of all funds previously invested thereunder,
together
with accrued interest thereon at the interest rate provided under
such contract
through the date of delivery of such funds to the Trustee or the
Paying Agent,
provided that the Trustee or the Paying Agent will not be charged
with knowledge
of any such potential downgrading unless it will have received
written notice of
such potentiality from the provider of the GIC which must be
obligated to give
such notice at least once per year; provided, further, that upon
any such event
CMSI, by written notice to the Trustee or the Paying Agent, may
replace such
contract with a substitute GIC having substantially the same terms
(including
without limitation a rate of return at least as high as the
contract being
replaced) so long as such substitute contract has an obligor with a
credit
standing no less than the credit standing of the obligor under the
contract to
be replaced at the time the contract was executed and such fact is
certified by
CMSI to the Trustee or the Paying Agent;
(d)
provide that the Trustee's interest therein will be transferable to
any
successor trustee hereunder;
(e)
provide that the funds invested thereunder and accrued interest
thereon
be available not later than the day prior to any distribution day
on which such
funds may be required for distribution hereunder; and
(f)
meet such other standards as may be specified in the Series
Terms.
Qualified Nominee: A person (who may not be CMSI or an affiliate of
CMSI)
in whose name Eligible Investments held by the Trustee or Paying
Agent may be
registered as nominee of the Trustee or the Paying Agent in lieu of
registration
in the name of the Trustee or the Paying Agent, provided that the
following
conditions will be satisfied in connection with such
registration:
(a)
the instruments governing the creation and operation of the
nominee
provide that neither the nominee nor any owner of an interest in
the nominee
(other than the Trustee or the Paying Agent) will have any
interest, beneficial
or otherwise, in any Eligible Investments held in the name of the
nominee,
except for the purpose of transferring and holding legal title
thereto;
(b)
the nominee and the Trustee or the Paying Agent have entered into
a
binding agreement in substantially the form to be provided by CMSI
establishing
that any Eligible Investments held in the name of the nominee are
to be held by
the nominee as agent (other than commission agent or broker) or
nominee for the
account of the Trustee; and
(c)
in connection with the registration of any Eligible Investment in
the
name of the nominee, all requirements under applicable governmental
regulations
necessary to effect a valid registration of transfer of such
Eligible Investment
are complied with as evidenced to the Trustee and the Paying Agent
upon its
request by an opinion of counsel.
ratio-stripped IO class: An IO class with an initial notional
balance equal
to the initial notional balance of one or more IO strips, and that
receives
interest distributions solely from distribution on those
strips.
ratio-stripped IO loan: For any premium loan with a pass-through
rate
greater than the target rate, a single hypothetical IO loan that,
combined with
a single hypothetical target-rate loan, has the same interest and
principal
payments as the premium loan.
Example: For a premium loan with a $100,000 principal balance and
a
pass-through rate 1% per annum greater than the target rate, the
(hypothetical)
ratio-stripped IO loan will
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have a notional balance of $100,000 and a pass-through rate of 1%
per annum, and
the (hypothetical) target-rate loan will have a principal balance
of $100,000
and a pass-through rate equal to the target rate.
ratio-stripped PO class: A PO class whose initial principal balance
equals
the initial principal balance of one or more PO strips (rounded
down to the
nearest whole dollar), and that receives principal distributions
solely from
distribution on those strips, or from reimbursements from
subordinated classes.
ratio-stripped PO loan: For any discount loan, a single
hypothetical PO
loan that, combined with a single hypothetical target-rate loan,
has the same
interest and principal payments as the original discount loan.
Example: For a discount loan with a $100,000 principal balance and
a
pass-through rate 1% per annum less than the target rate of 5% per
annum, the
(hypothetical) ratio-stripped PO loan will have a principal balance
of $20,000
and a pass-through rate of 0%, and the (hypothetical) target-rate
loan will have
a principal balance of $80,000 and a pass-through rate equal to the
target rate.
realized losses: For a distribution day, liquidated loan losses
(including
special hazard losses and fraud losses) and bankruptcy losses
incurred in the
preceding month. For a realized loss consisting of a liquidated
loan loss, the
interest and principal portions of the realized loss will equal the
interest and
principal portions of the liquidated loan loss.
record date: For a distribution day, the close of business on (a)
for a
LIBOR class, the last day (whether or not a business day) of its
last LIBOR
accrual period preceding the distribution day, and (b) for any
other class, the
last day of the preceding month.
relevant servicer: CitiMortgage or a third-party servicer, as the
context
requires.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Internal Revenue Code Section 860D. References to the "REMIC" are
to the
constituent REMICs constituted by the Trust Fund.
REMIC Provisions: The provisions of the federal income tax law
relating to
REMICs, which appear at Sections 860A through 860G of the Internal
Revenue Code.
REO
loan: A mortgage loan that is not a liquidated loan and as to which
the
related mortgaged property is held as part of the Trust Fund.
REO
proceeds: Proceeds, net of any related expenses, received in
respect of
any REO loan (including, without limitation, proceeds from the
rental of the
related mortgaged property).
REO
property: A mortgaged property acquired by the Trust Fund
through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted
mortgage loan or otherwise treated as having been acquired pursuant
to the REMIC
Provisions.
Required Amount of Certificates: (i) 2/3 or more of the aggregate
voting
interest of the outstanding certificates, if affected by the
occurrence of an
Event of Default and (ii) 2/3 or more of the aggregate outstanding
percentage
interest of the residual certificates, if affected by such an Event
of Default.
Responsible Officer of the Trustee means an officer who is employed
in the
Corporate Trust Department or a similar group for the Trustee with
direct
responsibility for the administration of this agreement.
S&P: Standard and Poor's Ratings Services, a division of The
McGraw- Hill
Companies, Inc.
scheduled monthly loan payment: For a mortgage loan (including a
REO loan)
and a distribution day, the payment of principal and interest due
on the first
day of the month in which the distribution day occurs
46
<PAGE>
in accordance with the amortization schedule applicable to the
mortgage loan at
that time (after adjustment for any partial principal prepayments
or deficient
valuations occurring prior to such first day of the month but
before any
adjustment to such amortization schedule other than deficient
valuations by
reason of any bankruptcy, or similar proceeding or any moratorium
or similar
waiver or grace period).
scheduled principal balance: For one or more mortgage loans on a
date, the
initial principal balance of the loans, less the sum of (a) the
aggregate of the
principal portion of all scheduled monthly loan payments required
to be made on
the loans on or before the first day of the month in which the date
falls
(whether or not received), provided that after the bankruptcy
coverage
termination date, the scheduled principal balance will not be
reduced by the
principal portion of any debt service reductions, and (b) any
principal
prepayments on the loans received or posted before the close of
business on the
last business day of the preceding month.
scheduled principal payments: For one or more mortgage loans for
a
distribution day, the principal portion of the scheduled monthly
loan payments
on the loans for the distribution day.
scheduled
servicing fee: For any month, a fee equal to
o for each
affiliated mortgage loan, the scheduled principal balance of
the
mortgage loan as of the close of business on the last day of the
preceding
month, multiplied by the monthly affiliated servicing fee rate,
and
o for each
third-party mortgage loan, the scheduled principal balance of
the
mortgage loan as of the close of business on the first day of the
month,
multiplied by the relevant monthly third-party servicing fee
rate.
Securities Act: The Securities Act of 1933.
senior to: A target-rate class is senior to another target-rate
class if it
is ranked above it in order of seniority.
Servicing Officer: Any officer of CitiMortgage, a delegated
servicer or a
third-party servicer involved in, or responsible for, the
administration and
servicing of the Trust Fund whose name appears on a list of
servicing officers
attached to an officer's certificate furnished to the Trustee by
CitiMortgage,
as such list may from time to time be amended.
single certificate: A single certificate evidences (a) for a
residual
certificate, 1% percentage interest, (b) for a certificate of an IO
class,
$1,000 initial notional balance, and (c) for a certificate of any
other class,
$1,000 initial principal balance.
single-pool series. A series in which the mortgage loans are not
divided
into two or more pools for purposes of allocations and
distributions. Each
series is either a single-pool series or a multiple-pool
series.
special hazard loss: (i) A liquidated loan loss suffered by a
mortgaged
property on account of direct physical loss, exclusive of (a) any
loss covered
by a hazard policy or a flood insurance policy maintained for the
mortgaged
property pursuant to section 3.11, and (b) any loss caused by or
resulting from:
(1)
normal wear and tear;
(2)
infidelity, conversion or other dishonest act on the part of
the
Trustee, CitiMortgage or any of their agents, employees or
delegees; or
(3)
errors in design, faulty workmanship or faulty materials, unless
the
collapse of the property or a part thereof ensues; or
(ii)
a liquidated loan loss suffered by the Trust Fund arising from
or
related to the presence or suspected presence of hazardous wastes
or hazardous
substances on a mortgaged property, unless the loss to a mortgaged
property is
covered by a hazard
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<PAGE>
policy or a flood insurance policy maintained for the mortgaged
property
pursuant to section 3.11.
special hazard loss limit: If an initial special hazard loss limit
is
stated in the Series Terms, for a distribution day, the initial
special hazard
loss limit minus the sum of (i) the aggregate amount of special
hazard losses
and (ii) the Adjustment Amount (as defined below) as most recently
calculated.
For each anniversary of the cut-off date, the Adjustment Amount
will be the
excess of the amount calculated in accordance with the preceding
sentence
(without giving effect to the deduction of the Adjustment Amount
for such
anniversary) over the greater of (A) the product of the special
hazard
percentage for such anniversary multiplied by the aggregate
scheduled principal
balance of all the mortgage loans on the distribution day
immediately preceding
such anniversary and (B) twice the scheduled principal balance of
the mortgage
loan in the Trust Fund which has the largest scheduled principal
balance on the
distribution day immediately preceding such anniversary.
special hazard percentage: As of each anniversary of the cut-off
date, the
greater of (i) 1% and (ii) the largest percentage obtained by
dividing the
aggregate scheduled principal balances (as of the immediately
preceding
distribution day) of the mortgage loans secured by mortgaged
properties located
in a single, five-digit ZIP code area in the State of California by
the
aggregate scheduled principal balance of all the mortgage loans as
of such
anniversary.
subordinated losses: Realized losses other than non-subordinated
losses.
subordinate to: A target-rate class is subordinate to another
target-rate
class if it is ranked below it in order of seniority.
subordination depletion date: The first distribution day for which
the
principal balance of the subordinated classes on the preceding day
is zero.
target-rate class percentage: For one or more target-rate classes,
the
ratio of the classes' principal balance to the principal balance of
all
target-rate classes, expressed as a percentage.
target-rate loan: For any mortgage loan, a single hypothetical
mortgage
loan that has a pass-through rate equal to the target rate, and
(i)
if the mortgage loan has a pass-through rate equal to or greater
than
the target rate, has the same principal balance as the mortgage
loan, and
(ii)
if the mortgage loan is a discount loan, has a principal balance
equal
to the product of (A) the principal balance of the mortgage loan
and (B) the
ratio of the pass-through rate for the mortgage loan to the
target-rate.
target-rate strip: The mortgage loan pool formed of the target-rate
loans
for all the mortgage loans.
third-party servicing fee: For any month, a fee for each
third-party
mortgage loan equal to the lesser of (a) the scheduled principal
balance of the
mortgage loan as of the close of business on the first day of the
month,
multiplied by the relevant monthly third-party servicing fee rate,
and (b) the
excess of the interest payment received on the mortgage loan for
the month
(including interest payments included in liquidation or insurance
proceeds) over
the amount of the interest payment to be deposited in the
certificate account.
third-party servicing fee rate: For a third-party mortgage loan
other than
a special serviced mortgage loan, the per annum rate specified as
such on
schedule B-TP to exhibit B under the heading "Sub Fee," reduced
(but not below
zero) by any applicable master servicing fee rate, and for a
special serviced
mortgage loan, the per annum
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<PAGE>
servicing fee rate for the special servicer provided for in the
special
servicing agreement. The monthly third-party servicing fee rate
will be
one-twelfth of the relevant third-party servicing fee rate.
Transfer Instrument: A deed transferring an interest in property
subject to
a mortgage.
Trust Fund: The corpus of the trust created by this agreement,
consisting
of the mortgage loans, the certificate account, any pooling,
lower-tier, or
upper-tier REMIC account, REO property and the primary mortgage
insurance
certificates, any other insurance policies for the mortgage loans,
any retail
reserve fund and the rights of the Trustee under any reserve fund
and any
certificate insurance policy.
uncommitted cash: For a distribution day, any cash in the
certificate
account representing principal prepayments posted or liquidation
proceeds
deposited on or after the first day of the month immediately
preceding such
distribution day and all related payments of interest and all
payments which
represent early receipt of scheduled payments of principal and
interest due on a
date or dates subsequent to such first day of the month.
unscheduled principal payments: For one or more mortgage loans for
a
distribution day, the sum of
o all
principal prepayments on the mortgage loans received by
CitiMortgage or
a
third-party servicer during the month preceding the distribution
day, up
to
the scheduled principal balance, in each case, of the mortgage
loan,
o the
greater of (1) aggregate net liquidation proceeds from any of
the
mortgage loans that became a Liquidated Loan during the month
preceding
such
distribution day, minus (a) the portion of such proceeds
representing
interest, and (b) any unreimbursed advances of principal made by
the
CitiMortgage, a third-party servicer, or the Paying Agent on such
mortgage
loans, and (2) the aggregate scheduled principal balances of such
mortgage
loans for the distribution day, and
o the
scheduled principal balance of any of the mortgage loans that
was
repurchased by CMSI during such month pursuant to section 2.3,
"Repurchase
or
substitution of mortgage loans" below.
U.S.
person: A citizen or resident of the United States of America,
a
corporation or partnership (unless, in the case of a partnership,
Treasury
regulations are adopted that provide otherwise) created or
organized in or under
the laws of the United States of America, any state thereof or the
District of
Columbia, including an entity treated as a corporation or
partnership for
federal income tax purposes, an estate whose income is subject to
U.S. federal
income tax regardless of its source, or a trust if a court within
the United
States is able to exercise primary supervision over the
administration of such
trust, and one or more such U.S. persons have the authority to
control all
substantial decisions of such trust (or, to the extent provided in
applicable
Treasury regulations, certain trusts in existence on August 20,
1996 which are
eligible to elect to be treated as U.S. persons).
1.2 USAGES
In this agreement and the certificates, unless otherwise stated or
the context
otherwise clearly requires, the following usages apply:
o "This
agreement," "herein," "hereof" and words of similar import when
used
in
this agreement will refer to this agreement.
o In
computing periods from a specified date to a later specified date,
the
words "from" and "commencing on" (and the like) mean "from and
including,"
and
the words "to," "until" and "ending on" (and the like) mean "to
but
excluding."
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<PAGE>
o An
action permitted under this agreement may be taken at any time and
from
time
to time. Except as otherwise indicated, a permitted action may
be
taken in the actor's sole discretion. References to a person's
taking
action include the person's refraining from action. Thus, a
statement that
a
person "may take any action that ... " means that a person may take
or
refrain from taking any action that ....
o All
indications of time of day mean New York City time.
o
"Including" means "including, but not limited to." "A or B" means
"A or B
or
both."
o
References to an agreement (including this agreement) will refer to
the
agreement as amended at the relevant time.
o
References to numbered sections or paragraphs in this agreement
will refer
to
sections or paragraphs of this agreement, and such section
references
will
include all included sections. For example, a reference to section
6
will
be to section 6 of this agreement, and also to sections 4.1, 4.2,
etc.
o
References to an exhibit in this agreement will refer to all
included
numbered subdivisions of the exhibit. For example, references to
exhibit A
will
also refer to subdivisions A-1, A-2, etc.
o
References to a statute include all regulations promulgated under
or
implementing the statute, as in effect at the relevant time.
References to
a
specific provision of a statute includes successor provisions.
o
References to any governmental or quasi-governmental agency or
authority
will
include any successor agency or authority.
o Where a
decimal appears that has been shortened, it will be rounded
according to the usual rules; that is, if the decimal is only shown
to x
places, the last number (in the xth place) will be raised by one if
the
following number (in the x+1st place) is 5, 6, 7, 8 or 9.
1.3 CALCULATIONS RESPECTING MORTGAGE LOANS
(a) In connection with all calculations required to be made
pursuant to this
agreement for remittances on any mortgage loan, any payments on the
mortgage
loans or any payments on any other assets included in a Trust Fund,
the rules
set forth in this section 1.2 will be applied.
(b)
Calculations for remittances on mortgage loans will be made on
a
mortgage-loan-by-mortgage-loan basis, based upon current
information as to the
terms of such mortgage loans and reports of payments received on
such mortgage
loans supplied to CitiMortgage by the person responsible for the
servicing
thereof and satisfying such requirement, if any, as may be set
forth in section
3.
(c) Each remittance
receivable on a mortgage loan will be assumed to be
received on the first day of the month.
2 TRANSFER
OF MORTGAGE LOANS AND ISSUANCE OF CERTIFICATES; REPURCHASE AND
SUBSTITUTION
2.1 TRANSFER OF MORTGAGE LOANS
(a) CMSI, as of the closing date, hereby transfers and assigns to
the Trustee,
without recourse, all of CMSI's right, title and interest in and
to
o the
mortgage loans, including all remittances received or receivable
by
CMSI
on or with respect to the mortgage loans (other than payments
of
principal and interest due and payable on the mortgage loans, and
principal
prepayments thereon received, on or before the cut-off date),
and
o the
proceeds of any title, primary mortgage, hazard or other
insurance
policies related to the mortgage loans.
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<PAGE>
Such
transfer and assignment is absolute, is made in exchange for
the
certificates described in section 12, and is intended by the
parties to be a
sale. Nonetheless, to the extent such transfer is held not to be a
sale under
applicable law, it is intended that this agreement shall be a
security agreement
under applicable law, and CMSI shall be deemed to have granted to
the Trustee,
for the benefit of the certificate holders and any Insurer, a
security interest
in the Trust Fund, including the mortgage loans, mortgage notes and
related
documents. CMSI will, at its own expense, take any action
reasonably requested
by the Trustee to confirm, perfect, and protect the priority of,
the security
interest granted hereby, including the filing of Uniform Commercial
Code
financing statements in the appropriate jurisdictions.
CMSI
will not transfer any other property to the Trust Fund except
as
expressly permitted by this agreement.
The
Trustee acknowledges receipt of the documents and other
property
referred to in section 2.1, and declares that the Trustee will hold
such
documents and other property, including property yet to be received
in the Trust
Fund, in trust, upon the trusts herein set forth, for the benefit
of all present
and future certificate holders and any Insurer.
(b)
The Trustee and CitiMortgage have entered into a Mortgage
Document
Custodial Agreement substantially in the form of exhibit C with the
Mortgage
Document Custodian named in section 12.1. The Mortgage Document
Custodian will
hold the mortgage documents in trust for the Trustee and the
benefit of the
Trustee, any Insurer and all present and future certificate
holders. The
Mortgage Document Custodian may be the Trustee, any affiliate of
the Trustee, an
affiliate of CMSI, or an independent entity.
The
Trustee may at any time remove the initial or any successor
Mortgage
Document Custodian, and enter into a Mortgage Document Custodial
Agreement
substantially in the form of exhibit C hereto pursuant to which the
Trustee
appoints a successor Mortgage Document Custodian to hold the
Mortgage Documents
in trust for the Trustee and the benefit of the Trustee, all
present and future
certificate holders, and any Insurer, which Agreement may provide
that the
Mortgage Document Custodian shall conduct the review of each
Mortgage File
required under the first paragraph of this section 2.1, except
that, if the
Mortgage Document Custodian so appointed is CMSI or an affiliate of
CMSI, the
Trustee may conduct such review.
(c)
CMSI will on or before the closing date deliver to the Mortgage
Document Custodian on behalf of the Trustee to be held in trust the
following
documents or instruments for each mortgage loan (other than
mortgage loans
secured by shares in a cooperative housing corporation) (except to
the extent
CMSI is complying with section 2.1(f)):
(i)
The mortgage note, endorsed by manual or facsimile signature
without
recourse by the Originator or an affiliate of the Originator in
blank or to the
Trustee showing a complete chain of endorsements from the named
payee to the
Trustee or from the named payee to the affiliate of the Originator
and from such
affiliate to the Trustee, except that endorsement is not required
where Mortgage
Electronic Registration Systems, Inc. (MERS) is the named payee or
the nominee
of the named payee.
(ii)
The original recorded mortgage, with evidence of recording thereon
or
a copy of the mortgage certified by the public recording office in
those
jurisdictions where the public recording office retains the
original.
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<PAGE>
(iii) Any original assumption, modification, buydown or
conversion-to-fixed-interest-rate agreement applicable to the
mortgage.
(iv)
An assignment from the Originator or an affiliate of the Originator
to
the Trustee in recordable form of the mortgage which may be
included, where
permitted by local law, in a blanket assignment or assignments of
the mortgage
to the Trustee, including any intervening assignments and showing a
complete
chain of title from the original mortgagee named under the mortgage
to the
Originator or an affiliate of the Originator and to the Trustee,
except that (x)
if the mortgage is registered with MERS, only assignments from the
origination
of the mortgage to its assignment to MERS will be required, and (y)
if the
mortgage was originated with MERS as the original mortgagee (a "MOM
loan"), no
interim assignment will be required.
(v)
The original or a copy of the title insurance policy (which may be
a
certificate or a short form policy relating to a master policy of
title
insurance) pertaining to the mortgaged property, or in the event
such original
title policy is unavailable, a copy of the preliminary title report
and the
lender's recording instructions, with the original to be delivered
within 180
days of the closing date or other evidence of title.
(vi)
Any related primary mortgage insurance certificate and related
policy
or a copy thereof.
(d)
CMSI will on or before the closing date deliver to the Mortgage
Document Custodian on behalf of the Trustee to be held in trust the
following
documents or instruments for each mortgage loan secured by shares
in a
cooperative housing corporation (except to the extent CMSI is
complying with
section 2.1(f)):
(i)
The mortgage note, endorsed by manual or facsimile signature
without
recourse by the Originator or an affiliate of the Originator in
blank or to the
Trustee showing a complete chain of endorsements and assignments
from the named
payee to the Trustee or from the named payee to the affiliate of
the Originator
and from such affiliate to the Trustee.
(ii)
The original mortgage, with evidence of recording thereon (if
recordation was required under applicable law).
(iii) Any original assumption, modification, buydown or
conversion-to-fixed-interest-rate agreement applicable to the
mortgage.
(iv)
The original stocks, shares, membership certificate or other
contractual agreement evidencing ownership;
(v)
The original stock power executed in blank.
(vi)
The original executed security agreement or similar document and
all
assignments thereof showing a complete chain of assignment from the
named
secured party to the Trustee.
(vii) The original executed proprietary lease or occupancy
agreement and
all assignments thereof showing a complete chain of assignment from
the named
secured party to the Trustee.
(viii) The original executed recognition agreement and any
executed
assignments of recognition agreement showing a complete chain of
assignment from
the named secured party to the Trustee.
(ix)
(Except for mortgage loans (x) secured by mortgaged properties in
the
State of New Jersey or (y) originated prior to October 1988 and
secured by
mortgaged properties in the State of New York) the executed UCC-1
financing
statement with evidence of recording thereon and executed original
UCC-3
financing statements or other appropriate UCC financing statements
required by
state law, evidencing a complete and unbroken chain from the
52
<PAGE>
mortgagee to the Trustee with evidence of recording thereon (or in
a form
suitable for recordation).
(x)
Any related primary mortgage insurance certificate and related
policy.
(e)
CMSI will, on or before the closing date, deposit in the
certificate
account
o all
payments on the mortgage loans that CMSI receives after the
cut-off
date
and before the closing date, to the extent such payments are
being
transferred and assigned to the Trustee under this agreement,
except any
portion of such payments on mortgage loans (including servicing
fees) of a
type
not required to be deposited therein as specified in section 11 or
the
Series Terms, and
o any
amount required to be so deposited under the Series Terms.
(f)
If CMSI is required under this section 2.1 to deliver an
original
recorded mortgage or a completed assignment in recordable form to
the Mortgage
Document Custodian by the closing date, but cannot do so because of
a delay in
recording the mortgage, CMSI may instead
o deliver
a copy of the mortgage, provided that CMSI certifies that the
original mortgage has been delivered to a title insurance company
for
recordation after receipt of its policy of title insurance or
binder
therefor (which may be a certificate relating to a master policy of
title
insurance), and
o an
assignment to the Trustee completed except for recording
information.
In
all such instances, CMSI will deliver the original recorded
mortgage and
completed assignment (if applicable) to the Mortgage Document
Custodian promptly
upon receipt of such mortgage.
If
an original recorded mortgage has been lost or misplaced, CMSI or
the
related title insurance company may deliver, in lieu of the
mortgage, a copy of
the mortgage bearing recordation information and certified as true
and correct
by the office in which the original mortgage was recorded.
If
CMSI cannot deliver the original or a copy of a title insurance
policy
(which may be a certificate relating to a master policy of title
insurance) for
a mortgaged property to the Mortgage Document Custodian by the
closing date
because the policy is not yet available, CMSI may instead deliver a
binder for
the policy, and deliver the original or a copy of the policy to the
Trustee when
available.
If
CMSI cannot deliver an original assumption, modification, buydown
or
conversion-to-fixed-interest-rate agreement to the Mortgage
Document Custodian
by the closing date, CMSI may instead deliver a certified copy
thereof. CMSI
will deliver the original assumption, modification, buydown or
conversion-to-fixed-interest-rate agreement to the Trustee promptly
upon receipt
thereof.
CMSI
will, at its own expense, prepare and deliver to the Mortgage
Document
Custodian each assignment referred to in clause (a)(iv) or (b)(vi)
and (b)(ix)
above as soon as practicable but not later than 60 days after the
date of
initial issuance of the certificates. For each mortgage relating to
a mortgaged
property located in a state for which the rating agencies require
recordation of
such assignments (as will be specified in the Series Terms or a
CMSI officer's
certificate), CMSI intends to record the assignment in the
appropriate public
office for real property records (or supply the Mortgage Document
Custodian with
evidence of recordation) as soon as practicable after the initial
issuance of
the certificates. Except as provided in this section, neither CMSI
nor any
Originator or affiliate of any Originator will have any obligation
to record any
assignment of any mortgage in order to name the Trustee as
mortgagee of record.
The preceding sentence will not be in derogation of the obliga-
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tion of CMSI, the Originators and affiliates of the Originators to
record (and
supply the Mortgage Document Custodian with evidence thereof)
assignments of
mortgages required in order that CMSI, an Originator or an
affiliate of an
Originator be shown as mortgagee of record of each mortgage.
CMSI
will, at its own expense, record any UCC-3 financing statements
not
previously recorded, and will supply the Mortgage Document
Custodian with
evidence of the recordation. CMSI intends to effect recordation in
the
appropriate public office as soon as practicable after the initial
issuance of
the certificates.
For
mortgage loans that have been prepaid in full after the cut-off
date
and prior to the closing date, CMSI, in lieu of delivering the
above documents
to the Mortgage Document Custodian, will on the closing date
deliver a
certification of a Servicing Officer as set forth in section
3.13.
(g) Concurrently with
the transfer and assignment to the Trustee of the
mortgage loans, the Trustee or the Authenticating Agent will, in
accordance with
a written order or request signed in CMSI's name by an Authorized
Officer,
authenticate and deliver to or upon CMSI's order, duly
authenticated
certificates in authorized denominations evidencing the entire
ownership of the
Trust Fund. The Trustee acknowledges that to the extent it holds
any class P or
class L regular interests, it holds such regular interests as
assets of the
lower-tier or upper-tier REMIC, as described in the Series
Terms.
(h)
CMSI and the Trustee agree and understand that it is not intended
that
any mortgage loan be included in the Trust that is a "High-Cost
Home Loan," as
defined in either the Indiana High Cost Home Loan Law, effective
January 1,
2005, the New Jersey Home Ownership Security Act of 2002, effective
November 27,
2003, or the New Mexico Home Loan Protection Act, effective January
1, 2004, or
a "high cost home mortgage loan," as defined in the Massachusetts
Predatory Home
Loan Practices Act, effective November 9, 2004.
2.2 CMSI'S REPRESENTATIONS AND WARRANTIES
CMSI represents and warrants to the Trustee and any Insurer
that:
(i)
The information in exhibit B was true and correct in all
material
respects as of the dates respecting which such information is
furnished, and the
information provided to the rating agencies, including the
loan-level detail, is
true and correct according to rating agency requirements.
(ii) As of the closing date,
each mortgage will be a valid first lien on
the property securing the related mortgage note subject only to
o the lien
of current real property taxes and assessments as limited in
clause (vi) below, o covenants, conditions and restrictions, rights
of way,
easements and other matters of public record as of the date of
recording of
the
mortgage, which exceptions appearing of record are acceptable
to
mortgage lending institutions generally or specifically reflected
in the
appraisal obtained in connection with the origination of the
related
mortgage loan,
o other
matters to which like properties are commonly subject that do not
in
the
aggregate materially interfere with the benefits of the
security
intended to be provided by the mortgage, and
o for a
mortgage on a cooperative apartment in a cooperative housing
corporation, the right of the related cooperative to cancel the
related
shares and terminate the proprietary lease for unpaid assessments
(general
and
special) owed by the mortgagor;
(iii) Immediately before the transfer and assignment of the
mortgage loans
to the
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Trustee, CMSI has good title to, and is the sole legal owner of,
each mortgage
loan (except as set forth in clause (v) below) and immediately upon
the transfer
and assignment, CMSI will have taken all steps necessary so that
the Trustee
will have good title to, and will be the sole legal owner of, each
mortgage loan
(except as set forth in clause (v) below);
(iv)
As of the cut-off date, no payment of principal of or interest on
any
mortgage loan was 30 days or more past due (a mortgage loan being
considered 30
days past due in a given month when payment due on the first day of
the prior
month has not been made on or before the last day of such prior
month) or has
been 30 days or more past due more than once for the twelve months
preceding the
cut-off date;
(v)
As of the closing date, there is no mechanics' lien or claim for
work,
labor or material affecting the mortgaged property that is or may
be a lien
prior to, or equal with, the lien of the mortgage except those that
are insured
against by the title insurance policy referred to in (x) below;
(vi)
As of the closing date, there is no delinquent tax or assessment
lien
against any mortgaged property;
(vii) As of the closing date, there is no valid offset, defense
or
counterclaim to any mortgage note or mortgage, including the
obligation of the
mortgagor to pay the unpaid principal and interest on the mortgage
note;
(viii) As of the closing date, each mortgaged property is free of
material
damage and is in good repair;
(ix)
Each mortgage at the time it was originated complied in all
material
respects with applicable state, local and federal laws, including,
without
limitation, all applicable usury, equal credit opportunity,
recording,
disclosure and predatory lending laws. No mortgage loan is a high
cost loan
under the predatory lending law of any jurisdiction in which a
mortgaged
property is located, no mortgage loan is a "High Cost Loan" or
"Covered Loan,"
as such terms are defined in the current version of Standard &
Poor's LEVELS(R)
Glossary, (Version 5.6 Revised, Appendix E), and no mortgage loan
originated on
or after October 1, 2002 through March 6, 2003 is governed by the
Georgia Fair
Lending Act;
(x)
A lender's title insurance policy or binder approved as such by
Fannie
Mae or the FHLMC, or other assurance of title customary in the
relevant
jurisdiction, was issued on the date of the origination of each
mortgage loan
(other than a mortgage loan for a cooperative apartment), and, as
of the closing
date, each such policy, binder or assurance is valid and in full
force and
effect;
(xi)
The mortgage loans conform in all material respects with their
descriptions in the prospectus relating to the certificates;
(xii) Each mortgage loan with an original principal balance
exceeding 80%
(or, for certain mortgage loans originated before 1995, 90%) of its
original
value is covered by primary mortgage insurance at least until its
outstanding
principal balance is less than or equal to 80% of the original
value, either
through principal payments by the mortgagor or as determined by a
new appraisal
delivered subsequent to origination. So long as it is in effect,
the primary
mortgage insurance covers losses from defaults in an amount equal
to the excess,
of the outstanding principal balance of the mortgage loan over 75%
of the
original value of the mortgage loan;
(xiii) The original principal balance of each mortgage loan was not
more
than 95% of the original value of the mortgage loan;
(xiv) For each buydown mortgage loan, the buydown funds deposited
in the
buydown account, if any, will be sufficient, after crediting
interest at the
rate per annum,
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if any, specified in the buydown agreement compounded monthly to
the buydown
account and adding the amounts required to be paid by the
mortgagor, to make the
scheduled payments stated in the mortgage note for the term of the
buydown
subsidy agreement;
(xv)
Each mortgage loan is a "qualified mortgage" within the meaning
of
Section 860G(a)(3) of the Internal Revenue Code.
The
representations and warranties in this section 2.2 will survive
delivery of the mortgage files to the Trustee.
2.3 REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS
(a)
Each of CMSI, CitiMortgage and the Trustee will promptly notify
the
other parties if it discovers a breach of any of the
representations and
warranties in section 2.2 that materially and adversely affects the
interests of
the certificate holders or any Insurer in a mortgage loan
(including a mortgage
loan substituted for a nonconforming mortgage loan pursuant to
section 2.4) (a
material breach).
(b)
Pursuant to the Mortgage Document Custodial Agreement, the
Mortgage
Document Custodian will review each mortgage file within 90 days
after the
closing date to ascertain that all required documents have been
executed,
received and recorded, if applicable, and that such documents
relate to the
mortgage loans identified in exhibit B. If the Mortgage Document
Custodian finds
that a document in a mortgage file is missing or materially
defective, the
Mortgage Document Custodian will promptly notify CitiMortgage and
CMSI by
e-mail.
(c)
If CMSI is notified of a material breach, CMSI will have 60 days
after
the notice (or a longer period approved in advance in writing by a
Responsible
Officer of the Trustee) to cure the breach in all material
respects, or to
repurchase the mortgage loan or substitute eligible substitute
mortgage loans,
as provided in this section 2.3.
If
CMSI is notified by the Mortgage Document Custodian that the
documentation for a mortgage loan is defective, CMSI will have 180
days after
the notice to cure the breach in all material respects, or to
repurchase the
mortgage loan or substitute eligible substitute mortgage loans, as
provided in
this section 2.3, except that CMSI will only have 90 days after the
notice to
cure, cure, repurchase, or substitute if the defect causes the
mortgage loan to
fail to be a "qualified mortgage" under Internal Revenue Code
section
860G(a)(3).
(d)
Any repurchase by CMSI of a mortgage loan will be at a price equal
to
(i)
100% of the scheduled principal balance of the mortgage loan on
the
date of repurchase, plus
(ii)
accrued and unpaid interest thereon at the pass-through rate to
the
first day of the following month, plus
(iii) any costs and damages incurred by the Trust Fund in
connection with
any violation by such mortgage loan of any predatory lending law,
plus
(iv)
aggregate outstanding advances for the mortgage loan, to the
extent
not recovered in (ii) above.
(e)
CMSI will pay the repurchase price to CitiMortgage, which will
promptly
deposit the repurchase price in the certificate account. A
repurchase of a
mortgage loan under this section 2.3 will be considered a
prepayment in full of
the mortgage loan on the date of repurchase. Upon the Trustee's
receipt of
written notice of the deposit signed by an Authorized Officer of
CitiMortgage,
the Trustee will direct the Mortgage Document Custodian to release
the related
mortgage file to CMSI and will execute and deliver such instruments
of transfer
or assignment furnished to the Trustee, in each case without
recourse, as CMSI
reasonably
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requests, to vest the mortgage loan in CMSI. Repurchase of the
mortgage loan by
CMSI will be deemed to include the right t
