FORM OF POOLING AND SERVICING AGREEMENT
EXHIBIT 4.1
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
Depositor,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
[--------------------------------]
Trustee
POOLING AND SERVICING AGREEMENT
DATED AS OF [_______________] 1, 200[_]
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
Series _______Trust
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
PAGE
Section 1.01.
Definitions................................................................................3
Section 1.02.
Determination of
LIBOR....................................................................48
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01.
Conveyance of Mortgage
Loans..............................................................49
Section 2.02.
Acceptance by
Trustee.....................................................................53
Section 2.03.
Representations, Warranties and Covenants of the Master Servicer
and the
Depositor.........................................................................54
Section 2.04.
Representations and Warranties of Residential
Funding.....................................56
Section 2.05.
Execution and Authentication of Certificates; Conveyance of REMIC
Regular
Interests.........................................................................58
Section 2.06.
Purposes and Powers of the
Trust..........................................................58
Section 2.07.
Agreement Regarding Ability to
Disclose...................................................59
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01.
Master Servicer to Act as
Servicer........................................................59
Section 3.02.
Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of Subservicers'
Obligations..................................................62
Section 3.03.
Successor
Subservicers....................................................................63
Section 3.04.
Liability of the Master
Servicer..........................................................64
Section 3.05.
No Contractual Relationship Between Subservicer and Trustee or
Certificateholders........................................................................64
Section 3.06.
Assumption or Termination of Subservicing Agreements by
Trustee...........................64
Section 3.07.
Collection of Certain Mortgage Loan Payments; Deposits to Custodial
Account...................................................................................65
Section 3.08.
Subservicing Accounts; Servicing
Accounts.................................................67
Section 3.09.
Access to Certain Documentation and Information Regarding the
Mortgage Loans..............69
Section 3.10.
Permitted Withdrawals from the Custodial
Account..........................................69
Section 3.11.
Maintenance of Primary Insurance
Coverage.................................................71
Section 3.12.
Maintenance of Fire Insurance and Omissions and Fidelity
Coverage.........................72
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TABLE OF CONTENTS
(continued)
PAGE
Section 3.13.
Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain
Assignments...........................................................73
Section 3.14.
Realization Upon Defaulted Mortgage
Loans.................................................75
Section 3.15.
Trustee to Cooperate; Release of Mortgage
Files...........................................77
Section 3.16.
Servicing and Other Compensation; Eligible Master Servicing
Compensation..............................................................................79
Section 3.17.
Reports to the Trustee and the
Depositor..................................................80
Section 3.18.
Annual Statement as to
Compliance.........................................................80
Section 3.19.
Annual Independent Public Accountants' Servicing
Report...................................80
Section 3.20.
Right of the Depositor in Respect of the Master
Servicer..................................81
Section 3.21.
Advance
Facility..........................................................................81
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01.
Certificate
Account.......................................................................85
Section 4.02.
Distributions.............................................................................86
Section 4.03.
Statements to Certificateholders; Statements to Rating Agencies;
Exchange Act
Reporting....................................................................92
Section 4.04.
Distribution of Reports to the Trustee and the Depositor; Advances
by
the Master
Servicer.......................................................................96
Section 4.05.
Allocation of Realized
Losses.............................................................98
Section 4.06.
Reports of Foreclosures and Abandonment of Mortgaged
Property............................100
Section 4.07.
Optional Purchase of Defaulted Mortgage
Loans............................................101
Section 4.08.
Limited Mortgage Loan Repurchase
Right...................................................101
Section 4.09.
The Yield Maintenance
Agreement..........................................................101
Section 4.10.
[Reserved]...............................................................................102
Section 4.11.
Derivative
Contracts.....................................................................102
Section 4.12.
Tax Treatment of Yield Maintenance
Payments..............................................103
ARTICLE V
THE CERTIFICATES
Section 5.01.
The
Certificates.........................................................................104
Section 5.02.
Registration of Transfer and Exchange of
Certificates....................................106
Section 5.03.
Mutilated, Destroyed, Lost or Stolen
Certificates........................................111
-ii-
TABLE OF CONTENTS
(continued)
PAGE
Section 5.04.
Persons Deemed
Owners....................................................................112
Section 5.05.
Appointment of Paying
Agent..............................................................112
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01.
Respective Liabilities of the Depositor and the Master
Servicer..........................112
Section 6.02.
Merger or Consolidation of the Depositor or the Master Servicer;
Assignment of Rights and Delegation of Duties by Master
Servicer.........................112
Section 6.03.
Limitation on Liability of the Depositor, the Master Servicer and
Others...................................................................................113
Section 6.04.
Depositor and Master Servicer Not to
Resign..............................................114
ARTICLE VII
DEFAULT
Section 7.01.
Events of
Default........................................................................114
Section 7.02.
Trustee or Depositor to Act; Appointment of
Successor....................................116
Section 7.03.
Notification to
Certificateholders.......................................................118
Section 7.04.
Waiver of Events of
Default..............................................................118
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01.
Duties of
Trustee........................................................................118
Section 8.02.
Certain Matters Affecting the
Trustee....................................................120
Section 8.03.
Trustee Not Liable for Certificates or Mortgage
Loans....................................121
Section 8.04.
Trustee May Own
Certificates.............................................................122
Section 8.05.
Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification......................122
Section 8.06.
Eligibility Requirements for
Trustee.....................................................123
Section 8.07.
Resignation and Removal of the
Trustee...................................................123
Section 8.08.
Successor
Trustee........................................................................124
Section 8.09.
Merger or Consolidation of
Trustee.......................................................124
Section 8.10.
Appointment of Co-Trustee or Separate
Trustee............................................125
Section 8.11.
Appointment of
Custodians................................................................126
Section 8.12.
Appointment of Office or
Agency..........................................................126
Section 8.13.
DTC Letter of
Representations............................................................126
Section 8.14.
Yield Maintenance
Agreement..............................................................126
-iii-
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE IX
TERMINATION
Section 9.01.
Termination Upon Purchase by Residential Funding or Liquidation
of All Mortgage
Loans....................................................................126
Section 9.02.
Additional Termination
Requirements......................................................131
ARTICLE X
REMIC PROVISIONS
Section 10.01.
REMIC
Administration.....................................................................131
Section 10.02.
Master Servicer, REMIC Administrator and Trustee
Indemnification.........................135
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01.
Amendment................................................................................136
Section 11.02.
Recordation of Agreement;
Counterparts...................................................138
Section 11.03.
Limitation on Rights of
Certificateholders...............................................139
Section 11.04.
Governing
Law............................................................................139
Section 11.05.
Notices..................................................................................140
Section 11.06.
Notices to Rating
Agencies...............................................................140
Section 11.07.
Severability of
Provisions...............................................................141
Section 11.08.
Supplemental Provisions for
Resecuritization.............................................141
Section 11.09.
[Reserved]...............................................................................142
Section 11.10.
Third Party
Beneficiaries................................................................142
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01.
Intent of the Parties;
Reasonableness....................................................142
Section 12.02.
Additional Representations and Warranties of
theTrustee..................................142
Section 12.03.
Information to Be Provided by the
Trustee................................................143
Section 12.04.
Report on Assessment of Compliance and
Attestation.......................................143
-iv-
EXHIBITS
Exhibit A
Form of Class A Certificate
Exhibit B
Form of Class M Certificate
Exhibit C
[Reserved]
Exhibit D
Form of Class SB Certificate
Exhibit E
Form of Class R Certificate
Exhibit F
Form of Custodial Agreement
Exhibit G
Mortgage Loan Schedule
Exhibit H
Forms of Request for Release
Exhibit I-1
Form of Transfer Affidavit and Agreement
Exhibit I-2
Form of Transferor Certificate
Exhibit J
Form of Investor Representation Letter
Exhibit K
Form of Transferor Representation Letter
Exhibit L
Text of Amendment to Pooling and Servicing Agreement Pursuant to
Section
11.01(e) for a Limited Guaranty
Exhibit M
Form of Limited Guaranty
Exhibit N
Form of Lender Certification for Assignment of Mortgage Loan
Exhibit O
Form of Rule 144A Investment Representation
Exhibit P
[Reserved]
Exhibit Q
Form of ERISA Representation Letter (Class M Certificates)
Exhibit R-1
Form 10-K Certification
Exhibit R-2
Form 10-K Back-up Certification
Exhibit S
Information to be Provided by the Master Servicer to the Rating
Agencies
Relating to Reportable Modified Mortgage Loans
Exhibit T
[Reserved]
Exhibit U
Yield Maintenance Agreement
Exhibit V
Servicing Criteria
-v-
This Pooling and Servicing Agreement, effective as of
[____________] 1,
200[_], among RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC., as
depositor
(together with its permitted successors and assigns, the
"Depositor"),
RESIDENTIAL FUNDING CORPORATION, as master servicer (together with
its permitted
successors and assigns, the "Master Servicer"), and
[___________________________________], a banking association
organized under the
laws of the United States, as trustee (together with its permitted
successors
and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell home equity loan pass-through
certificates
(collectively, the "Certificates"), to be issued hereunder in
sixteen Classes,
which in the aggregate will evidence the entire beneficial
ownership interest in
the Mortgage Loans (as defined herein) and certain other related
assets.
REMIC I
As provided herein, the REMIC Administrator will make an election
to treat
the segregated pool of assets consisting of the Mortgage Loans and
certain other
related assets (exclusive of the Yield Maintenance Agreement and
any payments
thereunder) subject to this Agreement as a real estate mortgage
investment
conduit (a "REMIC") for federal income tax purposes, and such
segregated pool of
assets will be designated as "REMIC I." The Class R-I Certificates
will
represent the sole Class of "residual interests" in REMIC I for
purposes of the
REMIC Provisions (as defined herein) under federal income tax law.
The following
table irrevocably sets forth the designation, remittance rate (the
"Uncertificated REMIC I Pass-Through Rate") and initial
Uncertificated Principal
Balance for each of the "regular interests" in REMIC I (the "REMIC
I Regular
Interests"). The "latest possible maturity date" (determined for
purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for the
REMIC I
Regular Interests shall be the 360th Distribution Date. The REMIC I
Regular
Interests will not be certificated.
UNCERTIFICATED
INITIAL UNCERTIFICATED
REMIC I
REMIC I
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
MATURITY DATE
-----------
-----------------
----------------------
---------------
[AA
(1)
$[_____________]
[_], 25, 200[_]
A-1
(1)
$[_____________]
[_], 25, 200[_]
A-2
(1)
$[_____________]
[_], 25, 200[_]
A-3
(1)
$[_____________]
[_], 25, 200[_]
M-1
(1)
$[_____________]
[_], 25, 200[_]
M-2
(1)
$[_____________]
[_], 25, 200[_]
M-3
(1)
$[_____________]
[_], 25, 200[_]
M-4
(1)
$[_____________]
[_], 25, 200[_]
M-5
(1)
$[_____________]
[_], 25, 200[_]
M-6
(1)
$[_____________]
[_], 25, 200[_]
M-7
(1)
$[_____________]
[_], 25, 200[_]
M-8
(1)
$[_____________]
[_], 25, 200[_]
M-9
(1)
$[_____________]
[_], 25, 200[_]
M-10
(1)
$[_____________]
[_], 25, 200[_]
ZZ]
(1)
$[_____________]
[_], 25, 200[_]
(1) Calculated as provided in the definition of Uncertificated
REMIC I
Pass-Through Rate.
REMIC II
As provided herein, the REMIC Administrator will elect to treat the
segregated pool of assets consisting of the REMIC I Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC II". The Class R-II Certificates will
represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC
Provisions
under federal income tax law. The following table irrevocably sets
forth the
designation, Pass-Through Rate, aggregate Initial Certificate
Principal Balance,
certain features, Final Scheduled Distribution Date and initial
ratings for each
Class of Certificates comprising the interests representing
"regular interests"
in REMIC II. The "latest possible maturity date" (determined for
purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii)) for
each Class of
REMIC II Regular Interests shall be the 360th Distribution Date.
AGGREGATE
INITIAL
CERTIFICATE
PASS-THROUGH
PRINCIPAL
FINAL SCHEDULED
DESIGNATION
TYPE
RATE
BALANCE
DISTRIBUTION DATE
INITIAL RATINGS
-------------
---------
------------
-----------
-----------------
-----------------------
[MOODY'S
S&P/FITCH]
[Class A-1(1)
Senior
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Aaa
AAA
Class A-2(1)
Senior
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Aaa
AAA
Class A-3(1)
Senior
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Aaa
AAA
Class M-1(1)
Mezzanine
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Aa1
AAA
Class M-2(1)
Mezzanine
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Aa2
AA+
Class M-3(1)
Mezzanine
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Aa3
AA+
Class M-4(1)
Mezzanine
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
A1
AA
Class M-5(1)
Mezzanine
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
A2
AA-
Class M-6(1)
Mezzanine
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
A3
A+
Class M-7(1)
Mezzanine
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Baa1
A
Class M-8(1)
Mezzanine
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Baa2
A-
Class M-9(1)
Mezzanine
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Baa3
BBB
2
Class M-10(1)
Subordinate
Adjustable(2)(3)
$[___________]
[_], 25, 200[_]
Ba1
BBB-
Class SB
Interest
Subordinate
Variable(4)
$[___________]
N/A
N/R
N/R
Class R-I
Residual
N/A
N/A
N/A
N/R
N/R
Class R-II]
Residual
N/A
N/A
N/A
N/R
N/R
(1) The Class A and Class M Certificates will represent ownership
of REMIC II
Regular Interests together with certain rights to payments to be
made from
amounts received under the Yield Maintenance Agreement which will
be treated as
an interest rate cap contract, the payments on which will be deemed
made for
federal income tax purposes outside of REMIC II.
(2) The REMIC II Regular Interests ownership of which is
represented by the
Class A and Class M Certificates, will accrue interest at a per
annum rate equal
to LIBOR plus the applicable Margin, each subject to payment caps
as described
in the definition of "Pass-Through Rate" and the provisions for the
payment of
Class A Basis Risk Shortfall Carry-Forward Amounts and Class M
Basis Risk
Shortfall Carry-Forward Amounts herein, which payments will not be
part of the
entitlement of the REMIC II Regular Interests related to such
Certificates.
(3) The Class A and Class M Certificates will also entitle their
holders to
certain payments from the Holder of the Class SB Certificates from
amounts to
which the related REMIC II Regular Interest is entitled and from
amounts
received under the Yield Maintenance Agreement, which will not be a
part of
their ownership of the REMIC II Regular Interests.
(4) The Class SB Certificates will accrue interest as described in
the
definition of Accrued Certificate Interest. The Class SB
Certificates will not
accrue interest on their Certificate Principal Balance. The Class
SB
Certificates will be comprised of two REMIC II regular interests, a
principal
only regular interest designated SB-PO and an interest only regular
interest
designated SB-IO, which will be entitled to distributions as set
forth herein.
The rights of the Holder of the Class SB Certificates to payments
from the Yield
Maintenance Agreement shall be outside and apart from its rights
under the REMIC
II Regular Interests SB-IO and SB-PO.
The Mortgage Loans have an aggregate Cut-off Date Principal Balance
equal
to $[_______________________]. The Mortgage Loans are fixed-rate
and
adjustable-rate, fully amortizing, first and junior lien mortgage
loans having
terms to maturity at origination or modification of generally not
more than 30
years.
In consideration of the mutual agreements herein contained, the
Depositor,
the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01.
Definitions.
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the meanings specified
in this
Article.
Accrued Certificate Interest: With respect to each Distribution
Date and
the Class A and Class M Certificates, interest accrued during the
related
Interest Accrual Period on the Certificate Principal Balance
thereof immediately
prior to such Distribution Date at the related Pass-Through Rate
for that
Distribution Date.
The amount of Accrued Certificate Interest on each Class of
Certificates
shall be reduced by the amount of Prepayment Interest Shortfalls on
the Mortgage
Loans during the prior calendar month (to the extent not covered by
Eligible
Master Servicing Compensation pursuant to Section
3
3.16) and by the amount of Relief Act Shortfalls on the Mortgage
Loans during
the related Due Period, in each case to the extent allocated to
that Class of
Certificates pursuant to Section 4.02(g). Accrued Certificate
Interest for each
Class on any Distribution Date shall be further reduced by the
interest portion
of Realized Losses allocated to any Class of Certificates pursuant
to Section
4.05.
With respect to each Distribution Date and the Class SB
Certificates,
interest accrued during the preceding Interest Accrual Period at
the related
Pass-Through Rate for that Distribution Date on the Uncertificated
Notional
Amount as specified in the definition of Pass-Through Rate,
immediately prior to
such Distribution Date, reduced by any interest shortfalls with
respect to the
Mortgage Loans, including Prepayment Interest Shortfalls to the
extent not
covered by Eligible Master Servicing Compensation pursuant to
Section 3.16 or by
the Excess Cash Flow pursuant to clauses (xvi) and (xvii) of
Section 4.02(c). In
addition, Accrued Certificate Interest with respect to each
Distribution Date,
as to the Class SB Certificates, shall be reduced by an amount
equal to the
interest portion of Realized Losses allocated to the
Overcollateralization
Amount pursuant to Section 4.05 hereof. Accrued Certificate
Interest on the
Class A and Class M Certificates shall accrue on the basis of a
360-day year and
the actual number of days in the related Interest Accrual Period.
Accrued
Certificate Interest on the Class SB Certificates shall accrue on
the basis of a
360 day year consisting of twelve 30 day months.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and any
date of
determination, the Mortgage Rate borne by the related Mortgage
Note, less the
related Subservicing Fee Rate.
Adjustment Date: With respect to each adjustable-rate Mortgage
Loan, each
date set forth in the related Mortgage Note on which an adjustment
to the
interest rate on such Mortgage Loan becomes effective.
Advance: With respect to any Mortgage Loan, any advance made by the
Master
Servicer, pursuant to Section 4.04.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with such first Person. For
the purposes
of this definition, "control" means the power to direct the
management and
policies of such Person, directly or indirectly, whether through
the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof
and supplements hereto.
Amount Held for Future Distribution: With respect to any
Distribution Date,
the total of the amounts held in the Custodial Account at the close
of business
on the preceding Determination Date on account of (i) Liquidation
Proceeds,
Subsequent Recoveries, REO Proceeds, Insurance Proceeds, Principal
Prepayments,
Mortgage Loan purchases made pursuant to Section 2.02, 2.03, 2.04,
4.07 or 4.08
and Mortgage Loan substitutions made pursuant to Section 2.03 or
2.04 received
or made in the month of such Distribution Date (other than such
Liquidation
Proceeds, Insurance Proceeds, REO Proceeds, Subsequent Recoveries
and purchases
4
of Mortgage Loans that the Master Servicer has deemed to have been
received in
the preceding month in accordance with Section 3.07(b)) and (ii)
payments which
represent early receipt of scheduled payments of principal and
interest due on a
date or dates subsequent to the Due Date in the related Due Period.
Appraised Value: With respect to any Mortgaged Property, one of the
following: (i) the lesser of (a) the appraised value of such
Mortgaged Property
based upon the appraisal made at the time of the origination of the
related
Mortgage Loan, and (b) the sales price of the Mortgaged Property at
such time of
origination, (ii) in the case of a Mortgaged Property securing a
refinanced or
modified Mortgage Loan, one of (1) the appraised value based upon
the appraisal
made at the time of origination of the loan which was refinanced or
modified,
(2) the appraised value determined in an appraisal made at the time
of
refinancing or modification or (3) the sales price of the Mortgaged
Property, or
(iii) with respect to the Mortgage Loans for which a broker's price
opinion was
obtained, the value contained in such opinion.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent
instrument, in recordable form, sufficient under the laws of the
jurisdiction
wherein the related Mortgaged Property is located to reflect of
record the sale
of the Mortgage Loan to the Trustee for the benefit of
Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in
the form of
one or more blanket assignments covering Mortgages secured by
Mortgaged
Properties located in the same county, if permitted by law and
accompanied by an
Opinion of Counsel to that effect.
Assignment Agreement: The Assignment and Assumption Agreement,
dated the
Closing Date, between Residential Funding and the Depositor
relating to the
transfer and assignment of the Mortgage Loans.
Available Distribution Amount: With respect to any Distribution
Date, an
amount equal to (a) the sum of (i) the amount relating to the
Mortgage Loans on
deposit in the Custodial Account as of the close of business on the
immediately
preceding Determination Date, including any Subsequent Recoveries,
and amounts
deposited in the Custodial Account in connection with the
substitution of
Qualified Substitute Mortgage Loans, (ii) the amount of any Advance
made on the
immediately preceding Certificate Account Deposit Date with respect
to the
Mortgage Loans, (iii) any amount deposited in the Certificate
Account on the
related Certificate Account Deposit Date pursuant to Section
3.12(a) in respect
of the Mortgage Loans, (iv) any amount that the Master Servicer is
not permitted
to withdraw from the Custodial Account pursuant to Section 3.16(e)
in respect of
the Mortgage Loans and (v) any amount deposited in the Certificate
Account
pursuant to Section 4.07 or 4.08 and any amounts deposited in the
Custodial
Account pursuant to Section 9.01, reduced by (b) the sum as of the
close of
business on the immediately preceding Determination Date of: (w)
any payments or
collections consisting of prepayment charges on the Mortgage Loans
that were
received during the related Prepayment Period, (x) the Amount Held
for Future
Distribution and (y) amounts permitted to be withdrawn by the
Master Servicer
from the Custodial Account pursuant to clauses (ii)-(x), inclusive,
of Section
3.10(a).
Balloon Loan: Each of the Mortgage Loans having an original term to
maturity that is shorter than the related amortization term.
5
Balloon Payment: With respect to any Balloon Loan, the related
Monthly
Payment payable on the stated maturity date of such Balloon Loan.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basis Risk Shortfall: Any Class A Basis Risk Shortfall or Class M
Basis
Risk Shortfall.
Basis Risk Shortfall Carry-Forward Amount: Any Class A Basis Risk
Shortfall
Carry-Forward Amount or Class M Basis Risk Shortfall Carry-Forward
Amount.
Book-Entry Certificate: Any Certificate registered in the name of
the
Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii)
a day
on which banking institutions in the States of California, New
York, Minnesota
or Illinois (and such other state or states in which the Custodial
Account or
the Certificate Account are at the time located) are required or
authorized by
law or executive order to be closed.
Call Rights: As defined in Section 9.01(e).
Capitalization Reimbursement Amount: With respect to any
Distribution Date,
the amount of unreimbursed Advances or Servicing Advances that were
added to the
Stated Principal Balance of the related Mortgage Loans during the
preceding
calendar month and reimbursed to the Master Servicer or Subservicer
pursuant to
Section 3.10(a)(vii) on or prior to such Distribution Date.
Cash Liquidation: With respect to any defaulted Mortgage Loan other
than a
Mortgage Loan as to which an REO Acquisition occurred, a
determination by the
Master Servicer that it has received all Insurance Proceeds,
Liquidation
Proceeds and other payments or cash recoveries which the Master
Servicer
reasonably and in good faith expects to be finally recoverable with
respect to
such Mortgage Loan.
Certificate: Any Class A Certificate, Class M Certificate, Class SB
Certificate or Class R Certificate.
Certificate Account: The account or accounts created and maintained
pursuant to Section 4.01, which shall be entitled "U.S. Bank
National
Association as trustee, in trust for the registered holders of
Residential
Mortgage Funding Securities II, Home Equity Loan Pass-Through
Certificates,
Series 200[_]-EFC[_]" and which account shall be held for the
benefit of the
Certificateholders and which must be an Eligible Account.
Certificate Account Deposit Date: With respect to any Distribution
Date,
the Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a Certificate
is
registered in the Certificate Register, except that neither a
Disqualified
Organization nor a Non-United States Person shall be a holder of a
Class R
Certificate for any purpose hereof. Solely for the purpose of
giving any consent
or direction pursuant to this Agreement, any Certificate, other
than a Class R
6
Certificate, registered in the name of the Depositor, the Master
Servicer or any
Subservicer or any Affiliate thereof shall be deemed not to be
outstanding and
the Percentage Interest or Voting Rights evidenced thereby shall
not be taken
into account in determining whether the requisite amount of
Percentage Interests
or Voting Rights necessary to effect any such consent or direction
has been
obtained. All references herein to "Holders" or
"Certificateholders" shall
reflect the rights of Certificate Owners as they may indirectly
exercise such
rights through the Depository and participating members thereof,
except as
otherwise specified herein; provided, however, that the Trustee
shall be
required to recognize as a "Holder" or "Certificateholder" only the
Person in
whose name a Certificate is registered in the Certificate Register.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who
is the beneficial owner of such Certificate, as reflected on the
books of an
indirect participating brokerage firm for which a Depository
Participant acts as
agent, if any, and otherwise on the books of a Depository
Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to any Class A or Class
M
Certificate, on any date of determination, an amount equal to (i)
the Initial
Certificate Principal Balance of such Certificate as specified on
the face
thereof minus (ii) the sum of (x) the aggregate of all amounts
previously
distributed with respect to such Certificate (or any predecessor
Certificate)
and applied to reduce the Certificate Principal Balance thereof
pursuant to
Section 4.02(c) and (y) the aggregate of all reductions in
Certificate Principal
Balance deemed to have occurred in connection with Realized Losses
which were
previously allocated to such Certificate (or any predecessor
Certificate)
pursuant to Section 4.05, provided, that with respect to any
Distribution Date,
the Certificate Principal Balance of each class of Class A and
Class M
Certificates to which a Realized Loss was previously allocated and
remains
unreimbursed will be increased, sequentially, as follows: first,
the Class A
Certificates on a pro rata basis, then the Class M-1, Class M-2,
Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9
and Class M-10
Certificates, in that order, to the extent of Realized Losses
previously
allocated thereto and remaining unreimbursed, but only to the
extent of
Subsequent Recoveries received during the previous calendar month
and available
for distribution pursuant to Section 4.02(c)(xiii). With respect to
each Class
SB Certificate, on any date of determination, an amount equal to
the Percentage
Interest evidenced by such Certificate times an amount equal to the
excess, if
any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans
over (B) the then aggregate Certificate Principal Balance of the
Class A and
Class M Certificates then outstanding. The Class R Certificates
will not have a
Certificate Principal Balance.
Certificate Register and Certificate Registrar: The register
maintained and
the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates or uncertificated
interests
bearing the same designation.
Class A Basis Risk Shortfall: With respect to each Class of the
Class A
Certificates and any Distribution Date for which the Pass-Through
Rate for any
such Class of Certificates is equal to the Net WAC Cap Rate, the
excess, if any,
of (x) Accrued Certificate Interest on that Class of Certificates
on such
Distribution Date, calculated at a rate equal to the lesser of (a)
LIBOR plus
the related Class A Margin, as calculated for such Distribution
Date, and (b)
the
7
Maximum Mortgage Loan Rate, over (y) Accrued Certificate Interest
on such Class
of Class A Certificates for such Distribution Date calculated at
the Net WAC Cap
Rate.
Class A Basis Risk Shortfall Carry-Forward Amount: With respect to
each
Class of Class A Certificates and any Distribution Date, the sum of
(a) the
aggregate amount of Class A Basis Risk Shortfall for such Class on
such
Distribution Date plus (b) any Class A Basis Risk Shortfall
Carry-Forward Amount
for such Class remaining unpaid from the preceding Distribution
Date, plus (c)
one month's interest on the amount in clause (b) (based on the
number of days in
the preceding Interest Accrual Period), to the extent previously
unreimbursed by
the Excess Cash Flow pursuant to Section 4.02(c)(xviii), at a rate
equal to the
related Pass-Through Rate.
Class A Certificate: Any one of the Class A-1, Class A-2 or Class
A-3
Certificates.
Class A Interest Distribution Amount: With respect to each Class of
Class A
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
of Class A
Certificates for such Distribution Date, plus any related Accrued
Certificate
Interest thereon remaining unpaid from any prior Distribution Date.
Class A Margin: With respect to the Class A-1 Certificates,
[_____]% per
annum. With respect to the Class A-2 Certificates, initially
[_____]% per annum,
and on any Distribution Date on or after the second Distribution
Date after the
possible Optional Termination Date, [_____]% per annum. With
respect to the
Class A-3 Certificates, initially [_____]% per annum, and on any
Distribution
Date on or after the second Distribution Date after the first
possible Optional
Termination Date, [_____]% per annum.
Class A Principal Distribution Amount: With respect to any
Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
Principal
Distribution Amount for that Distribution Date or (ii) on or after
the Stepdown
Date if a Trigger Event is not in effect for that Distribution
Date, the lesser
of:
(i) the Principal Distribution Amount for that Distribution
Date; and
(ii) the excess, if any, of (A) the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to
that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the
excess,
if any, of the aggregate Stated Principal Balance of the Mortgage
Loans
after giving effect to distributions to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class A-1 Certificate: Any one of the Class A-1 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit A, senior to the Class M, Class SB
and Class R
Certificates with respect to distributions and the allocation of
Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest
designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions
and (ii) the
right to receive the Class A Basis Risk Shortfall Carry-Forward
Amount from the
Excess Cash Flow to the extent described herein.
8
Class A-2 Certificate: Any one of the Class A-2 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit A, senior to the Class M, Class SB
and Class R
Certificates with respect to distributions and the allocation of
Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest
designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions
and (ii) the
right to receive the Class A Basis Risk Shortfall Carry-Forward
Amount from the
Excess Cash Flow to the extent described herein.
Class A-3 Certificate: Any one of the Class A-3 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit A, senior to the Class M, Class SB
and Class R
Certificates with respect to distributions and the allocation of
Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest
designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions
and (ii) the
right to receive the Class A Basis Risk Shortfall Carry-Forward
Amount from the
Excess Cash Flow to the extent described herein.
Class M Basis Risk Shortfall: With respect to the Class M-1, Class
M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9 and
Class M-10 Certificates and any Distribution Date for which the
Pass-Through
Rate for any such Class of Certificates is equal to the Net WAC Cap
Rate, the
excess, if any, of (x) Accrued Certificate Interest on that Class
of
Certificates on such Distribution Date, using the lesser of (a)
LIBOR plus the
related Class M Margin, as calculated for such Distribution Date,
and (b) the
Maximum Mortgage Loan Rate, over (y) Accrued Certificate Interest
on such Class
of Class M Certificates for such Distribution Date calculated at
the Net WAC Cap
Rate.
Class M Basis Risk Shortfall Carry-Forward Amount: With respect to
the
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7,
Class M-8, Class M-9 and Class M-10 Certificates and any
Distribution Date, the
sum of (a) the aggregate amount of Class M Basis Risk Shortfall for
each such
Class on such Distribution Date plus (b) any Class M Basis Risk
Shortfall
Carry-Forward Amount for such Classes remaining unpaid from the
preceding
Distribution Date, plus (c) one month's interest on the amount in
clause (b)
(based on the number of days in the preceding Interest Accrual
Period), to the
extent previously unreimbursed by the Excess Cash Flow pursuant to
Section
4.02(c)(xviii), at a rate equal to the related Pass-Through Rate.
Class M Certificate: Any one of the Class M-1, Class M-2, Class
M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 or Class
M-10
Certificates.
Class M Margin: With respect to the Class M-1 Certificates,
initially
[_____]% per annum, and on any Distribution Date on or after the
second
Distribution Date after the first possible Optional Termination
Date, [_____]%
per annum. With respect to the Class M-2 Certificates, initially
[_____]% per
annum, and on any Distribution Date on or after the second
Distribution Date
after the first possible Optional Termination Date, [_____]% per
annum. With
respect to the Class M-3 Certificates, initially [_____]% per
annum, and on any
Distribution Date on or after the second Distribution Date after
the first
possible Optional Termination Date, [_____]% per annum. With
respect to the
Class M-4 Certificates, initially [_____]% per annum, and on any
Distribution
Date on or after the second Distribution Date after the first
possible
9
Optional Termination Date, [_____]% per annum. With respect to the
Class M-5
Certificates, initially [_____]% per annum, and on any Distribution
Date on or
after the second Distribution Date after the first possible
Optional Termination
Date, [_____]% per annum. With respect to the Class M-6
Certificates, initially
[_____]% per annum, and on any Distribution Date on or after the
second
Distribution Date after the first possible Optional Termination
Date, [_____]%
per annum. With respect to the Class M-7 Certificates, initially
[_____]% per
annum, and on any Distribution Date on or after the second
Distribution Date
after the first possible Optional Termination Date, [_____]% per
annum. With
respect to the Class M-8 Certificates, initially [_____]% per
annum, and on any
Distribution Date on or after the second Distribution Date after
the first
possible Optional Termination Date, [_____]% per annum. With
respect to the
Class M-9 Certificates, initially [_____]% per annum, and on any
Distribution
Date on or after the second Distribution Date after the first
possible Optional
Termination Date, [_____]% per annum. With respect to the Class
M-10
Certificates, initially [_____]% per annum, and on any Distribution
Date on or
after the second Distribution Date after the first possible
Optional Termination
Date, [_____]% per annum.
Class M-1 Certificate: Any one of the Class M-1 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-2, Class
M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10,
Class SB and
Class R Certificates with respect to distributions and the
allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an
interest
designated as a "regular interest" in REMIC II for purposes of the
REMIC
Provisions and (ii) the right to receive the Class M Basis Risk
Shortfall
Carry-Forward Amount from the Excess Cash Flow to the extent
described herein.
Class M-1 Interest Distribution Amount: With respect to the Class
M-1
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any
Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
remaining Principal
Distribution Amount for that Distribution Date after distribution
of the Class A
Principal Distribution Amount or (ii) on or after the Stepdown Date
if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal
Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates (after
taking
into account the payment of the Class A Principal Distribution
Amount
for that Distribution Date) and (2) the Certificate Principal
Balance
of the Class M-1 Certificates immediately prior to that
Distribution
Date over (B) the lesser of (x) the product of (1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal
Balance
of the Mortgage Loans after giving effect to distributions to be
made
on that Distribution Date and (y) the excess, if any, of the
10
aggregate Stated Principal Balance of the Mortgage Loans after
giving
effect to distributions to be made on that Distribution Date, over
the
Overcollateralization Floor.
Class M-2 Certificate: Any one of the Class M-2 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-3, Class
M-4, Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class SB
and Class R
Certificates with respect to distributions and the allocation of
Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest
designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions
and (ii) the
right to receive the Class M Basis Risk Shortfall Carry-Forward
Amount from
Excess Cash Flow to the extent described herein.
Class M-2 Interest Distribution Amount: With respect to the Class
M-2
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any
Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
remaining Principal
Distribution Amount for that Distribution Date after distribution
of the Class A
Principal Distribution Amount and the Class M-1 Principal
Distribution Amount or
(ii) on or after the Stepdown Date if a Trigger Event is not in
effect for that
Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal
Distribution Amount and the Class M-1 Principal Distribution
Amount;
and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates and Class
M-1
Certificates (after taking into account the payment of the Class A
Principal Distribution Amount and the Class M-1 Principal
Distribution
Amount for that Distribution Date) and (2) the Certificate
Principal
Balance of the Class M-2 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the
excess,
if any, of the aggregate Stated Principal Balance of the Mortgage
Loans
after giving effect to distributions to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class M-3 Certificate: Any one of the Class M-3 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-4, Class
M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class M-10, Class SB and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
as set forth
in Section 4.05, and evidencing (i) an interest designated as a
"regular
interest" in REMIC II for purposes of the REMIC Provisions and (ii)
the right to
receive the Class M Basis Risk Shortfall Carry-Forward Amount from
Excess Cash
Flow to the extent described herein.
11
Class M-3 Interest Distribution Amount: With respect to the Class
M-3
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any
Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
remaining Principal
Distribution Amount for that Distribution Date after distribution
of the Class
A, Class M-1 and Class M-2 Principal Distribution Amounts or (ii)
on or after
the Stepdown Date if a Trigger Event is not in effect for that
Distribution
Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A, Class M-1 and
Class M-2 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1 and Class
M-2
Certificates (after taking into account the payment of the Class A,
Class M-1 and Class M-2 Principal Distribution Amounts for that
Distribution Date) and (2) the Certificate Principal Balance of the
Class M-3 Certificates immediately prior to that Distribution Date
over
(B) the lesser of (x) the product of (1) the applicable
Subordination
Percentage and (2) the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on
that
Distribution Date and (y) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-4 Certificate: Any one of the Class M-4 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-5, Class
M-6, Class M-7,
Class M-8, Class M-9, M-10, Class SB and Class R Certificates with
respect to
distributions and the allocation of Realized Losses as set forth in
Section
4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC
II for purposes of the REMIC Provisions and (ii) the right to
receive the Class
M Basis Risk Shortfall Carry-Forward Amount from the Excess Cash
Flow to the
extent described herein.
Class M-4 Interest Distribution Amount: With respect to the Class
M-4
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the
Stepdown
Date if a Trigger Event is in effect for that Distribution Date,
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of
the Class A, Class M-1, Class M-2 and Class M-3 Principal
Distribution Amounts
or (ii) on or after the Stepdown Date if a Trigger Event is not in
effect for
that Distribution Date, the lesser of:
12
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A, Class M-1,
Class
M-2 and Class M-3 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2
and
Class M-3 Certificates (after taking into account the payment of
the
Class A, Class M-1, Class M-2 and Class M-3 Principal Distribution
Amounts for that Distribution Date) and (2) the Certificate
Principal
Balance of the Class M-4 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on
that
Distribution Date, over the Overcollateralization Floor.
Class M-5 Certificate: Any one of the Class M-5 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-6, Class
M-7, Class M-8,
Class M-9, Class M-10, Class SB and Class R Certificates with
respect to
distributions and the allocation of Realized Losses as set forth in
Section
4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC
II for purposes of the REMIC Provisions and (ii) the right to
receive the Class
M Basis Risk Shortfall Carry-Forward Amount from Excess Cash Flow
to the extent
described herein.
Class M-5 Interest Distribution Amount: With respect to the Class
M-5
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any
Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
remaining Principal
Distribution Amount for that Distribution Date after distribution
of the Class
A, Class M-1, Class M-2, Class M-3 and Class M-4 Principal
Distribution Amounts
or (ii) on or after the Stepdown Date if a Trigger Event is not in
effect for
that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A, Class M-1,
Class
M-2, Class M-3 and Class M-4 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2,
Class M-3 and Class M-4 Certificates (after taking into account the
payment of the Class A, Class M-1, Class M-2, Class M-3 and Class
M-4
Principal Distribution Amounts for that Distribution Date) and (2)
the
Certificate Principal Balance of the Class M-5 Certificates
immediately
prior to that Distribution Date over (B) the lesser of (x) the
product
of (1) the applicable Subordination Percentage and (2) the
aggregate
Stated Principal Balance of the Mortgage Loans after giving effect
to
distributions to be made on that Distribution Date and (y) the
13
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on
that
Distribution Date, over the Overcollateralization Floor.
Class M-6 Certificate: Any one of the Class M-6 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-7, Class
M-8, Class M-9,
Class M-10, Class SB and Class R Certificates with respect to
distributions and
the allocation of Realized Losses as set forth in Section 4.05, and
evidencing
(i) an interest designated as a "regular interest" in REMIC II for
purposes of
the REMIC Provisions and (ii) the right to receive the Class M
Basis Risk
Shortfall Carry-Forward Amount from Excess Cash Flow to the extent
described
herein.
Class M-6 Interest Distribution Amount: With respect to the Class
M-6
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any
Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
remaining Principal
Distribution Amount for that Distribution Date after distribution
of the Class
A, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Principal
Distribution Amounts or (ii) on or after the Stepdown Date if a
Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A, Class M-1,
Class
M-2, Class M-3, Class M-4 and Class M-5 Principal Distribution
Amounts;
and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2,
Class M-3, Class M-4 and Class M-5 Certificates (after taking into
account the payment of the Class A, Class M-1, Class M-2, Class
M-3,
Class M-4 and Class M-5 Principal Distribution Amounts for that
Distribution Date) and (2) the Certificate Principal Balance of the
Class M-6 Certificates immediately prior to that Distribution Date
over
(B) the lesser of (x) the product of (1) the applicable
Subordination
Percentage and (2) the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on
that
Distribution Date and (y) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-7 Certificate: Any one of the Class M-7 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-8, Class
M-9, Class
M-10, Class SB and Class R Certificates with respect to
distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing (i)
an interest designated as a "regular interest" in REMIC II for
purposes of the
REMIC Provisions and (ii) the right to receive the Class M Basis
Risk Shortfall
Carry-Forward Amount from the Excess Cash Flow to the extent
described herein.
14
Class M-7 Interest Distribution Amount: With respect to the Class
M-7
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-7 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the
Stepdown
Date if a Trigger Event is in effect for that Distribution Date,
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of
the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5
and Class M-6
Principal Distribution Amounts or (ii) on or after the Stepdown
Date if a
Trigger Event is not in effect for that Distribution Date, the
lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A, Class M-1,
Class
M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Principal
Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5 and Class M-6 Certificates (after
taking into account the payment of the Class A, Class M-1, Class
M-2,
Class M-3, Class M-4, Class M-5 and Class M-6 Principal
Distribution
Amounts for that Distribution Date) and (2) the Certificate
Principal
Balance of the Class M-7 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the
excess,
if any, of the aggregate Stated Principal Balance of the Mortgage
Loans
after giving effect to distributions to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class M-8 Certificate: Any one of the Class M-8 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-9, Class
M-10, Class SB
and Class R Certificates with respect to distributions and the
allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an
interest
designated as a "regular interest" in REMIC II for purposes of the
REMIC
Provisions and (ii) the right to receive the Class M Basis Risk
Shortfall
Carry-Forward Amount from the Excess Cash Flow to the extent
described herein.
Class M-8 Interest Distribution Amount: With respect to the Class
M-8
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-8 Principal Distribution Amount: With respect to any
Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
remaining Principal
Distribution Amount for that Distribution Date after distribution
of the Class
A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6
and Class
M-7 Principal Distribution Amounts or (ii) on or after the Stepdown
Date if a
Trigger Event is not in effect for that Distribution Date, the
lesser of:
15
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A, Class M-1,
Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Principal
Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Certificates
(after taking into account the payment of the Class A, Class M-1,
Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Principal
Distribution Amounts for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-8 Certificates
immediately
prior to that Distribution Date over (B) the lesser of (x) the
product
of (1) the applicable Subordination Percentage and (2) the
aggregate
Stated Principal Balance of the Mortgage Loans after giving effect
to
distributions to be made on that Distribution Date and (y) the
excess,
if any, of the aggregate Stated Principal Balance of the Mortgage
Loans
after giving effect to distributions to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class M-9 Certificate: Any one of the Class M-9 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-10, Class
SB
Certificates and Class R Certificates with respect to distributions
and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing (i)
an interest designated as a "regular interest" in REMIC II for
purposes of the
REMIC Provisions and (ii) the right to receive the Class M Basis
Risk Shortfall
Carry-Forward Amount from Excess Cash Flow to the extent described
herein.
Class M-9 Interest Distribution Amount: With respect to the Class
M-9
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-9 Principal Distribution Amount: With respect to any
Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
remaining Principal
Distribution Amount for that Distribution Date after distribution
of the Class
A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7
and Class M-8 Principal Distribution Amounts or (ii) on or after
the Stepdown
Date if a Trigger Event is not in effect for that Distribution
Date, (a) the
lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A, Class M-1,
Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and
Class
M-8 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8
Certificates (after taking into account the payment of the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class
M-7 and Class M-8 Principal Distribution Amounts for that
Distribution
Date) and (2) the Certificate Principal Balance of the Class M-9
Certificates immediately prior to that Distribution Date over (B)
the
lesser of (x) the product of (1) the applicable
16
Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to
be made on that Distribution Date and (y) the excess, if any, of
the
aggregate Stated Principal Balance of the Mortgage Loans after
giving
effect to distributions to be made on that Distribution Date, over
the
Overcollateralization Floor.
Class M-10 Certificate: Any one of the Class M-10 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class SB
Certificates and Class
R Certificates with respect to distributions and the allocation of
Realized
Losses as set forth in Section 4.05, and evidencing (i) an interest
designated
as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and
(ii) the right to receive the Class M Basis Risk Shortfall
Carry-Forward Amount
from Excess Cash Flow to the extent provided herein.
Class M-10 Interest Distribution Amount: With respect to the Class
M-10
Certificates and any Distribution Date, the aggregate amount of
Accrued
Certificate Interest to be distributed to the holders of such Class
for such
Distribution Date, plus any related Accrued Certificate Interest
remaining
unpaid from any prior Distribution Date.
Class M-10 Principal Distribution Amount: With respect to any
Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
remaining Principal
Distribution Amount for that Distribution Date after distribution
of the Class
A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7,
Class M-8 and Class M-9 Principal Distribution Amounts or (ii) on
or after the
Stepdown Date if a Trigger Event is not in effect for that
Distribution Date,
(a) the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A, Class M-1,
Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
M-8
and Class M-9 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8
and
Class M-9 Certificates (after taking into account the payment of
the
Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class
M-6, Class M-7, Class M-8 and Class M-9 Principal Distribution
Amounts
for that Distribution Date) and (2) the Certificate Principal
Balance
of the Class M-10 Certificates immediately prior to that
Distribution
Date over (B) the lesser of (x) the product of (1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal
Balance
of the Mortgage Loans after giving effect to distributions to be
made
on that Distribution Date and (y) the excess, if any, of the
aggregate
Stated Principal Balance of the Mortgage Loans after giving effect
to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class R Certificate: Collectively, the Class R-I Certificates and
Class R
II Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit E
17
and evidencing an interest designated as a "residual interest" in
REMIC I for
purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit E and evidencing an interest
designated as a
"residual interest" in REMIC II for purposes of the REMIC
Provisions.
Class SB Certificate: Any one of the Class SB Certificates executed
by the
Trustee and authenticated by the Certificate Registrar
substantially in the form
annexed hereto as Exhibit D, subordinate to the Class A
Certificates and Class M
Certificates with respect to distributions and the allocation of
Realized Losses
as set forth in Section 4.05, and evidencing an interest comprised
of "regular
interests" in REMIC II together with certain rights to payments
under the Yield
Maintenance Agreement for purposes of the REMIC Provisions.
Closing Date: [________________], 200[_].
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Corporate Trust Office: The principal office of the Trustee at
which at any
particular time its corporate trust business with respect to this
Agreement
shall be administered, which office at the date of the execution of
this
instrument is located at [_______________________] Attn: RFMSII
Series _____
Trust.
Credit Repository: Equifax, Transunion and Experian, or their
successors in
interest.
Curtailment: Any Principal Prepayment made by a Mortgagor which is
not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and
maintained
pursuant to Section 3.07 in the name of a depository institution,
as custodian
for the holders of the Certificates, for the holders of certain
other interests
in mortgage loans serviced or sold by the Master Servicer and for
the Master
Servicer, into which the amounts set forth in Section 3.07 shall be
deposited
directly. Any such account or accounts shall be an Eligible
Account.
Custodial Agreement: An agreement that may be entered into among
the
Depositor, the Master Servicer, the Trustee and a Custodian in
substantially the
form of Exhibit F hereto.
Custodian: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date: [_____] 1, 200[_].
Cut-off Date Balance: $[_______________]
18
Cut-off Date Principal Balance: With respect to any Mortgage Loan,
the
unpaid principal balance thereof at the Cut-off Date after giving
effect to all
installments of principal due on or prior thereto (or due during
the month of
the Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of
competent
jurisdiction in a proceeding under the Bankruptcy Code, except such
a reduction
constituting a Deficient Valuation or any reduction that results in
a permanent
forgiveness of principal.
Deficient Valuation: With respect to any 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 any
reduction in
the amount of principal to be paid in connection with any scheduled
Monthly
Payment that constitutes a permanent forgiveness of principal,
which valuation
or reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any definitive, fully registered
Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be:
"30 to 59
days" or "30 or more days" delinquent when a payment due on any
scheduled due
date remains unpaid as of the close of business on the next
following monthly
scheduled due date; "60 to 89 days" or "60 or more days" delinquent
when a
payment due on any scheduled due date remains unpaid as of the
close of business
on the second following monthly scheduled due date; and so on. The
determination
as to whether a Mortgage Loan falls into these categories is made
as of the
close of business on the last business day of each month. For
example, a
Mortgage Loan with a payment due on July 1 that remained unpaid as
of the close
of business on August 31 would then be considered to be 30 to 59
days
delinquent. Delinquency information as of the Cut-off Date is
determined and
prepared as of the close of business on the last business day
immediately prior
to the Cut-off Date.
Depositor: As defined in the preamble hereto.
Depository: The Depository Trust Company, or any successor
Depository
hereafter named. The nominee of the initial Depository for purposes
of
registering those Certificates that are to be Book-Entry
Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation"
as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York and
a "clearing agency" registered pursuant to the provisions of
Section 17A of the
Exchange Act.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Derivative Contract: Any ISDA Master Agreement, together with the
related
Schedule and Confirmation, entered into by the Trustee and a
Derivative
Counterparty in accordance with Section 4.11.
19
Derivative Counterparty: Any counterparty to a Derivative Contract
as
provided in Section 4.11.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Determination Date: With respect to any Distribution Date, the 20th
day (or
if such 20th day is not a Business Day, the Business Day
immediately following
such 20th day) of the month of the related Distribution Date.
Disqualified Organization: Any organization defined as a
"disqualified
organization" under Section 860E(e)(5) of the Code, which includes
any of the
following: (i) the United States, any State or political
subdivision thereof,
any possession of the United States, or any agency or
instrumentality of any of
the foregoing (other than an instrumentality which is a corporation
if all of
its activities are subject to tax and, except for Freddie Mac, a
majority of its
board of directors is not selected by such governmental unit), (ii)
a foreign
government, any international organization, or any agency or
instrumentality of
any of the foregoing, (iii) any organization (other than certain
farmers'
cooperatives described in Section 521 of the Code) which is exempt
from the tax
imposed by Chapter 1 of the Code (including the tax imposed by
Section 511 of
the Code on unrelated business taxable income) and (iv) rural
electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the
Code. A
Disqualified Organization also includes any "electing large
partnership," as
defined in Section 775(a) of the Code and any other Person so
designated by the
Trustee based upon an Opinion of Counsel that the holding of an
Ownership
Interest in a Class R Certificate by such Person may cause any
REMIC or any
Person having an Ownership Interest in any Class of Certificates
(other than
such Person) to incur a liability for any federal tax imposed under
the Code
that would not otherwise be imposed but for the Transfer of an
Ownership
Interest in a Class R Certificate to such Person. The terms "United
States",
"State" and "international organization" shall have the meanings
set forth in
Section 7701 of the Code or successor provisions.
Distribution Date: The 25th day of any month beginning in the month
immediately following the month of the initial issuance of the
Certificates or,
if such 25th day is not a Business Day, the Business Day
immediately following
such 25th day.
DTC Letter: The Letter of Representations, dated
[________________],
200[_], between the Trustee, on behalf of the Trust Fund, and the
Depository.
Due Date: With respect to any Distribution Date and any Mortgage
Loan, the
day during the related Due Period on which the Monthly Payment is
due.
Due Period: With respect to any Distribution Date, the calendar
month of
such Distribution Date.
Eligible Account: An account that is any of the following: (i)
maintained
with a depository institution the debt obligations of which have
been rated by
each Rating Agency in its highest rating available, or (ii) an
account or
accounts in a depository institution in which such accounts are
fully insured to
the limits established by the FDIC, provided that any deposits not
so insured
shall, to the extent acceptable to each Rating Agency, as evidenced
in writing,
be
20
maintained such that (as evidenced by an Opinion of Counsel
delivered to the
Trustee and each Rating Agency) the registered Holders of
Certificates have a
claim with respect to the funds in such account or a perfected
first security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of any
other
depositors or creditors of the depository institution with which
such account is
maintained, or (iii) in the case of the Custodial Account, a trust
account or
accounts maintained in the corporate trust department of U.S. Bank
National
Association, or (iv) in the case of the Certificate Account, a
trust account or
accounts maintained in the corporate trust department of U.S. Bank
National
Association., or (v) an account or accounts of a depository
institution
acceptable to each Rating Agency (as evidenced in writing by each
Rating Agency
that use of any such account as the Custodial Account or the
Certificate Account
will not reduce the rating assigned to any Class of Certificates by
such Rating
Agency below the lower of the then-current rating or the rating
assigned to such
Certificates as of the Closing Date by such Rating Agency).
Eligible Master Servicing Compensation: With respect to any
Distribution
Date, an amount equal to Prepayment Interest Shortfalls resulting
from Principal
Prepayments in Full or Curtailments during the related Prepayment
Period, but
not more than the lesser of (a) one-twelfth of 0.125% of the Stated
Principal
Balance of the Mortgage Loans immediately preceding such
Distribution Date and
(b) the sum of the Servicing Fee, all income and gain on amounts
held in the
Custodial Account and the Certificate Account and amounts payable
to the
Certificateholders with respect to such Distribution Date and
servicing
compensation to which the Master Servicer may be entitled pursuant
to Section
3.10(a)(v) and (vi) provided that for purposes of this definition
the amount of
the Servicing Fee will not be reduced pursuant to Section 7.02(a)
except as may
be required pursuant to the last sentence of such Section 7.02(a).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: As defined in Section 7.01.
Excess Cash Flow: With respect to the Mortgage Loans and any
Distribution
Date, an amount equal to the sum of (A) the excess of (1) the
Available
Distribution Amount for that Distribution Date over (2) the sum of
(x) the
Interest Distribution Amount for that Distribution Date and (y) the
Principal
Remittance Amount for that Distribution Date, (B) the
Overcollateralization
Reduction Amount, if any, for that Distribution Date and (C) any
Yield
Maintenance Payment for that Distribution Date.
Excess Overcollateralization Amount: With respect to any
Distribution Date,
the excess, if any, of (a) the Overcollateralization Amount on such
Distribution
Date over (b) the Required Overcollateralization Amount for such
Distribution
Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Fannie Mae: Fannie Mae, a federally chartered and privately owned
corporation organized and existing under the Federal National
Mortgage
Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
21
FHA: The Federal Housing Administration, or its successor.
Final Certification: As defined in Section 2.02.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant
to Section
9.01, which Final Distribution Date shall in no event be later than
the end of
the 90-day liquidation period described in Section 9.02.
Final Scheduled Distribution Date: Solely for purposes of the face
of the
Certificates, as follows: with respect to the Class A-1
Certificates, November
25, 2025; with respect to the Class A-2 Certificates, March 25,
2035; with
respect to the Class A-3 Certificates, October 25, 2035; with
respect to the
Class M-1 Certificates, October 25, 2035; with respect to the Class
M-2
Certificates, October 25, 2035; with respect to the Class M-3
Certificates,
October 25, 2035; with respect to the Class M-4 Certificates,
October 25, 2035;
with respect to the Class M-5 Certificates, October 25, 2035; with
respect to
the Class M-6 Certificates, October 25, 2035; with respect to the
Class M-7
Certificates, October 25, 2035; with respect to the Class M-8
Certificates,
October 25, 2035; with respect to the Class M-9 Certificates,
October 25, 2035;
with respect to the Class M-10 Certificates, October 25, 2035; and
with respect
to the Class SB Certificates, October 25, 2035. No event of default
under this
Agreement will arise or become applicable solely by reason of the
failure to
retire the entire Certificate Principal Balance of any Class of
Class A or Class
M Certificates on or before its Final Scheduled Distribution Date.
Foreclosure Profits: With respect to any Distribution Date or
related
Determination Date and any Mortgage Loan, the excess, if any, of
Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of all amounts
reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of each
Mortgage Loan or
REO Property for which a Cash Liquidation or REO Disposition
occurred in the
related Prepayment Period over the sum of the unpaid principal
balance of such
Mortgage Loan or REO Property (determined, in the case of an REO
Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest at
the Mortgage
Rate on such unpaid principal balance from the Due Date to which
interest was
last paid by the Mortgagor to the first day of the month following
the month in
which such Cash Liquidation or REO Disposition occurred.
Form 10-K Certification: As defined in Section 4.03(f).
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States created and existing under
Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Gross Margin: With respect to each adjustable rate Mortgage Loan,
the fixed
percentage set forth in the related Mortgage Note and indicated in
Exhibit G
hereto as the "NOTE MARGIN," which percentage is added to the
related Index on
each Adjustment Date to determine (subject to rounding in
accordance with the
related Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate
and the
Minimum Mortgage Rate) the interest rate to be borne by such
Mortgage Loan until
the next Adjustment Date.
Independent: When used with respect to any specified Person, means
such a
Person who (i) is in fact independent of the Depositor, the Master
Servicer and
the Trustee, or any Affiliate thereof, (ii) does not have any
direct financial
interest or any material indirect financial interest
22
in the Depositor, the Master Servicer or the Trustee or in an
Affiliate thereof,
and (iii) is not connected with the Depositor, the Master Servicer
or the
Trustee as an officer, employee, promoter, underwriter, trustee,
partner,
director or person performing similar functions.
Index: With respect to any adjustable rate Mortgage Loan and as to
any
Adjustment Date therefor, the related index as stated in the
related Mortgage
Note.
Initial Certificate Principal Balance: With respect to each Class
of
Certificates (other than the Class R Certificates), the Certificate
Principal
Balance of such Class of Certificates as of the Closing Date as set
forth in the
Preliminary Statement hereto.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant
to any Primary Insurance Policy or any other related insurance
policy covering a
Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under
the Mortgage, any Subservicer, the Master Servicer or the Trustee
and are not
applied to the restoration of the related Mortgaged Property or
released to the
Mortgagor in accordance with the procedures that the Master
Servicer would
follow in servicing mortgage loans held for its own account.
Interest Accrual Period: With respect to the Class A and Class M
Certificates, (i) with respect to the Distribution Date in November
200[_], the
period commencing on the Closing Date and ending on the day
preceding the
Distribution Date in November 200[_], and (ii) with respect to any
Distribution
Date after the Distribution Date in November 200[_], the period
commencing on
the Distribution Date in the month immediately preceding the month
in which such
Distribution Date occurs and ending on the day preceding such
Distribution Date.
With respect to the Class SB Certificates and any Distribution
Date, the prior
calendar month.
Interest Distribution Amount: The sum of the Class A, Class M-1,
Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9 and
Class M-10 Interest Distribution Amounts.
Interim Certification: As defined in Section 2.02.
Interested Person: As of any date of determination, the Depositor,
the
Master Servicer, the Trustee, any Mortgagor, any Manager of a
Mortgaged
Property, or any Person known to a Responsible Officer of the
Trustee to be an
Affiliate of any of them.
Late Collections: With respect to any Mortgage Loan, all amounts
received
during any Due Period, whether as late payments of Monthly Payments
or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late
payments or collections of Monthly Payments due but delinquent for
a previous
Due Period and not previously recovered.
LIBOR: With respect to any Distribution Date, the arithmetic mean
of the
London interbank offered rate quotations for one-month U.S. Dollar
deposits,
expressed on a per annum basis, determined in accordance with
Section 1.02.
LIBOR Business Day: Any day other than (i) a Saturday or Sunday or
(ii) a
day on which banking institutions in London, England are required
or authorized
to by law to be closed.
23
LIBOR Rate Adjustment Date: With respect to each Distribution Date,
the
second LIBOR Business Day immediately preceding the commencement of
the related
Interest Accrual Period.
Limited Repurchase Right Holder: RFC Asset Holdings II, Inc., or
its
successor.
Liquidation Proceeds: Amounts (other than Insurance Proceeds)
received by
the Master Servicer in connection with the taking of an entire
Mortgaged
Property by exercise of the power of eminent domain or condemnation
or in
connection with the liquidation of a defaulted Loan through
trustee's sale,
foreclosure sale or otherwise, other than REO Proceeds and
Subsequent
Recoveries.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance
of the
related Mortgage Loan at the date of determination (plus, in the
case of a
junior lien Mortgage Loan, the principal balance of the Senior
Mortgage Loan on
the Related Mortgaged Property) and the denominator of which is the
Appraised
Value of the related Mortgaged Property.
Marker Rate: With respect to the Class SB Certificates or the REMIC
II
Regular Interest SB-IO and any Distribution Date, a per annum rate
equal to two
(2) multiplied by the weighted average of the Uncertificated REMIC
I
Pass-Through Rates for each REMIC I Regular Interest (other than
the REMIC I
Regular Interest AA) with the rates on each such REMIC I Regular
Interest (other
than REMIC I Regular Interest ZZ) subject to a cap equal to the
Pass-Through
Rate for the corresponding Class for such REMIC I Regular Interest,
and the rate
on REMIC I Regular Interest ZZ subject to a cap of zero, in each
case for
purposes of this calculation.
Maturity Date: With respect to each Class of Certificates
representing
ownership of regular interest or Uncertificated Regular Interests
issued by each
of REMIC I and REMIC II the latest possible maturity date, solely
for purposes
of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, by
which the
Certificate Principal Balance of each such Class of Certificates
representing a
regular interest in the Trust Fund would be reduced to zero, which
is, for each
such regular interest, [____________] 25, 200[_], which is the
Distribution Date
occurring in the month following the last scheduled monthly payment
of the
Mortgage Loans.
Maximum Mortgage Loan Rate: With respect to the Class A and Class M
Certificates and any Interest Accrual Period, [_____]% per annum.
Maximum Mortgage Rate: With respect to any adjustable rate Mortgage
Loan,
the rate indicated in Exhibit G hereto as the "NOTE CEILING," which
rate is the
maximum interest rate that may be applicable to such adjustable
rate Mortgage
Loan at any time during the life of such Mortgage Loan.
Maximum Net Mortgage Rate: With respect to any adjustable rate
Mortgage
Loan and any date of determination, the Maximum Mortgage Rate minus
the sum of
(i) the Subservicing Fee Rate and (ii) the Servicing Fee Rate.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
24
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with
MERS on the MERS(R)System.
Minimum Mortgage Rate: With respect to any adjustable rate Mortgage
Loan,
the greater of (i) the Note Margin and (ii) the rate indicated in
Exhibit G
hereto as the "NOTE FLOOR", which rate may be applicable to such
adjustable rate
Mortgage Loan at any time during the life of such adjustable rate
Mortgage Loan.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject
of a
Servicing Modification.
Modified Mortgage Rate: With respect to any Mortgage Loan that is
the
subject of a Servicing Modification, the Mortgage Rate, minus the
rate per annum
by which the Mortgage Rate on such Mortgage Loan was reduced.
Modified Net Mortgage Rate: With respect to any Mortgage Loan that
is the
subject of a Servicing Modification, the Net Mortgage Rate, minus
the rate per
annum by which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee
of such Mortgage Loan, solely as nominee for the originator of such
Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any
REO
Property) and the Due Date in any Due Period, the payment of
principal and
interest due thereon in accordance with the amortization schedule
at the time
applicable thereto (after adjustment, if any, for Curtailments and
for Deficient
Valuations occurring prior to such Due Date but before any
adjustment to such
amortization schedule by reason of any bankruptcy, other than a
Deficient
Valuation, or similar proceeding or any moratorium or similar
waiver or grace
period and before any Servicing Modification that constitutes a
reduction of the
interest rate on such Mortgage Loan).
Moody's: Moody's Investors Service, Inc., or its successor in
interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage
Loan,
the mortgage, deed of trust or other comparable instrument creating
a first or
junior lien on an estate in fee simple or leasehold interest in
real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to
a particular Mortgage Loan and any additional documents required to
be added to
the Mortgage File pursuant to this Agreement.
Mortgage Loan Schedule: The lists of the Mortgage Loans attached
hereto as
Exhibit G (as amended from time to time to reflect the addition of
Qualified
Substitute Mortgage Loans), which lists shall set forth at a
minimum the
following information as to each Mortgage Loan:
25
(i) the Mortgage Loan identifying number ("RFC LOAN #");
(ii) [reserved];
(iii) the maturity of the Mortgage Note ("MATURITY DATE" or
"MATURITY DT") for Mortgage Loans;
(iv) the Mortgage Rate as of origination ("ORIG RATE");
(v) the Mortgage Rate as of the Cut-off Date for an adjustable
rate Mortgage Loan ("CURR RATE");
(vi) the Net Mortgage Rate as of the Cut-off Date ("CURR
NET");
(vii) the scheduled monthly payment of principal, if any, and
interest as of the Cut-off Date ("ORIGINAL P & I" or "CURRENT P
& I"
for the adjustable rate Mortgage Loans);
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) a code "T", "BT" or "CT" under the column "LN FEATURE,"
indicating that the Mortgage Loan is secured by a second or
vacation
residence (the absence of any such code means the Mortgage Loan is
secured by a primary residence);
(xi) a code "N" under the column "OCCP CODE", indicating that
the Mortgage Loan is secured by a non-owner occupied residence (the
absence of any such code means the Mortgage Loan is secured by an
owner
occupied residence);
(xii) the Maximum Mortgage Rate for the adjustable rate
Mortgage Loans ("NOTE CEILING");
(xiii) the Maximum Net Mortgage Rate for the adjustable rate
Mortgage Loans ("NET CEILING");
(xiv) the Note Margin for the adjustable rate Mortgage Loans
("NOTE MARGIN");
(xv) the first Adjustment Date after the Cut-off Date for the
adjustable rate Mortgage Loans ("NXT INT CHG DT");
(xvi) the Periodic Cap for the adjustable rate Mortgage Loans
("PERIODIC DECR" or "PERIODIC INCR"); and
(xvii) (the rounding of the semi-annual or annual adjustment
to the Mortgage Rate with respect to the adjustable rate Mortgage
Loans
("NOTE METHOD").
26
Such schedules may consist of multiple reports that collectively
set forth
all of the information required.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the
Trustee pursuant to Section 2.01 as from time to time are held or
deemed to be
held as a part of the Trust Fund, the Mortgage Loans originally so
held being
identified in the initial Mortgage Loan Schedule, and Qualified
Substitute
Mortgage Loans held or deemed held as part of the Trust Fund
including, without
limitation, each related Mortgage Note, Mortgage and Mortgage File
and all
rights appertaining thereto.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan,
together with any modification thereto.
Mortgage Rate: With respect to any Mortgage Loan, the interest rate
borne
by the related Mortgage Note, or any modification thereto other
than a Servicing
Modification. The Mortgage Rate on the adjustable rate Mortgage
Loans will
adjust on each Adjustment Date to equal the sum (rounded to the
nearest multiple
of one-eighth of one percent (0.125%) or up to the nearest
one-eighth of one
percent, which are indicated by a "U" on Exhibit G, except in the
case of the
adjustable rate Mortgage Loans indicated by an "X" on Exhibit G or
hereto under
the heading "NOTE METHOD"), of the related Index plus the Note
Margin, in each
case subject to the applicable Periodic Cap, Maximum Mortgage Rate
and Minimum
Mortgage Rate.
Mortgaged Property: The underlying real property securing a
Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: With respect to any Mortgage Loan as of any date
of
determination, a per annum rate equal to the Mortgage Rate for such
Mortgage
Loan as of such date minus the sum of (i) the related Servicing Fee
Rate and
(ii) the related Subservicing Fee Rate.
Net WAC Cap Rate: With respect to any Distribution Date and the
Class A
Certificates and Class M Certificates, the product of (A) the
weighted average
of the Net Mortgage Rates (or, if applicable, the Modified Net
Mortgage Rates)
on the Mortgage Loans using the Net Mortgage Rates in effect for
the Monthly
Payments due on such Mortgage Loans during the related Due Period,
weighted on
the basis of the respective Stated Principal Balances thereof on
the first day
of the related Due Period and (B) a fraction equal to 30 divided by
the actual
number of days in the related Interest Accrual Period. For federal
income tax
purposes, however, clause (A) above shall be the equivalent of that
which is
provided in such clause expressed as a per annum rate equal to the
weighted
average of the Uncertificated REMIC I Pass-Through Rates on the
REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal
Balance of each
such REMIC I Regular Interest.
Non-Primary Residence Loans: The Mortgage Loans designated as
secured by
second or vacation residences, or by non-owner occupied residences,
on the
Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States
Person.
27
Nonrecoverable Advance: Any Advance previously made or proposed to
be made
by the Master Servicer or Subservicer in respect of a Mortgage Loan
(other than
a Deleted Mortgage Loan) which, in the good faith judgment of the
Master
Servicer, will not, or, in the case of a proposed Advance, would
not, be
ultimately recoverable by the Master Servicer from related Late
Collections,
Insurance Proceeds, Liquidation Proceeds or REO Proceeds. To the
extent that any
Mortgagor is not obligated under the related Mortgage documents to
pay or
reimburse any portion of any Servicing Advances that are
outstanding with
respect to the related Mortgage Loan as a result of a modification
of such
Mortgage Loan by the Master Servicer, which forgives amounts which
the Master
Servicer or Subservicer had previously advanced, and the Master
Servicer
determines that no other source of payment or reimbursement for
such advances is
available to it, such Servicing Advances shall be deemed to be
Nonrecoverable
Advances. The determination by the Master Servicer that it has made
a
Nonrecoverable Advance shall be evidenced by an Officer's
Certificate delivered
to the Depositor, the Trustee and the Master Servicer setting forth
such
determination, which shall include any other information or reports
obtained by
the Master Servicer such as property operating statements, rent
rolls, property
inspection reports and engineering reports, which may support such
determinations. Notwithstanding the above, the Trustee shall be
entitled to rely
upon any determination by the Master Servicer that any Advance
previously made
is a Nonrecoverable Advance or that any proposed Advance, if made,
would
constitute a Nonrecoverable Advance.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time
of
reference thereto, is not subject to a Subservicing Agreement.
Note Margin: With respect to each adjustable rate Mortgage Loan,
the fixed
percentage set forth in the related Mortgage Note and indicated in
Exhibit G
hereto as the "NOTE MARGIN," which percentage is added to the Index
on each
Adjustment Date to determine (subject to rounding in accordance
with the related
Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the
Minimum
Mortgage Rate) the interest rate to be borne by such adjustable
rate Mortgage
Loan until the next Adjustment Date.
Notional Amount: With respect to the Class SB Certificates or the
REMIC II
Regular Interest SB-IO, immediately prior to any Distribution Date,
the
aggregate of the Uncertificated Principal Balances of the REMIC I
Regular
Interests.
Officers' Certificate: A certificate signed by the Chairman of the
Board,
the President, a Vice President, Assistant Vice President,
Director, Managing
Director, the Treasurer, the Secretary, an Assistant Treasurer or
an Assistant
Secretary of the Depositor or the Master Servicer, as the case may
be, and
delivered to the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the
Trustee
and the Master Servicer, who may be counsel for the Depositor or
the Master
Servicer, provided that any opinion of counsel (i) referred to in
the definition
of "Disqualified Organization" or (ii) relating to the
qualification of REMIC I
or REMIC II as REMICs or compliance with the REMIC Provisions must,
unless
otherwise specified, be an opinion of Independent counsel.
28
Optional Termination Date: Any Distribution Date on or after which
the
Stated Principal Balance (after giving effect to distributions to
be made on
such Distribution Date) of the Mortgage Loans is less than 10.00%
of the Cut-off
Date Balance.
Outstanding Mortgage Loan: With respect to the Due Date in any Due
Period,
a Mortgage Loan (including an REO Property) that was not the
subject of a
Principal Prepayment in Full, Cash Liquidation or REO Disposition
and that was
not purchased, deleted or substituted for prior to such Due Date
pursuant to
Section 2.02, 2.03, 2.04, 4.07 or 4.08.
Overcollateralization Amount: With respect to any Distribution
Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of
the Mortgage
Loans before giving effect to distributions of principal to be made
on such
Distribution Date over (b) the aggregate Certificate Principal
Balance of the
Class A and Class M Certificates as of such date, before taking
into account
distributions of principal to be made on that Distribution Date.
Overcollateralization Floor: An amount equal to the product of
0.50% and
the Cut-off Date Balance.
Overcollateralization Increase Amount: With respect to any
Distribution
Date, an amount equal to the lesser of (i) the Excess Cash Flow for
that
Distribution Date available to make payments pursuant to Section
4.02(c)(xv) and
(ii) the excess, if any, of (x) the Required Overcollateralization
Amount for
that Distribution Date over (y) the Overcollateralization Amount
for that
Distribution Date.
Overcollateralization Reduction Amount: With respect to any
Distribution
Date for which the Excess Overcollateralization Amount is, or would
be, after
taking into account all other distributions to be made on such
Distribution
Date, greater than zero, an amount equal to the lesser of (i) the
Excess
Overcollateralization Amount for that Distribution Date and (ii)
the Principal
Remittance Amount for such Distribution Date.
Ownership Interest: With respect to any Certificate, any ownership
or
security interest in such Certificate, including any interest in
such
Certificate as the Holder thereof and any other interest therein,
whether direct
or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to the Class A Certificates and
each
Interest Accrual Period, a per annum rate equal to the least of (i)
LIBOR plus
the related Class A Margin, (ii) the Maximum Mortgage Loan Rate and
(iii) the
Net WAC Cap Rate. With respect to the Class M Certificates and each
Interest
Accrual Period, a per annum rate equal to the least of (i) LIBOR
plus the
related Class M Margin, (ii) the Maximum Mortgage Loan Rate and
(iii) the Net
WAC Cap Rate.
With respect to the Class SB Certificates or the REMIC II Regular
Interest
SB-IO, a per annum rate equal to the percentage equivalent of a
fraction, the
numerator of which is (x) the sum, for each REMIC I Regular
Interest, of the
excess of the Uncertificated REMIC I Pass-Through Rate for such
REMIC I Regular
Interest over the Marker Rate, applied to the Uncertificated
Notional Amount and
the denominator of which is (y) the aggregate Uncertificated
Principal Balance
of the REMIC I Regular Interests.
29
Paying Agent: U.S. Bank National Association, or any successor
Paying Agent
appointed by the Trustee.
Percentage Interest: With respect to any Class A or Class M
Certificate,
the undivided percentage ownership interest in the related Class
evidenced by
such Certificate, which percentage ownership interest shall be
equal to the
Initial Certificate Principal Balance thereof divided by the
aggregate Initial
Certificate Principal Balance of all of the Certificates of the
same Class. The
Percentage Interest with respect to a Class SB Certificate or Class
R
Certificate shall be stated on the face thereof.
Periodic Cap: With respect to each adjustable rate Mortgage Loan,
the
periodic rate cap that limits the increase or the decrease of the
related
Mortgage Rate on any Adjustment Date pursuant to the terms of the
related
Mortgage Note.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States or any agency or instrumentality thereof when
such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition
thereof, provided that the unsecured obligations of the party
agreeing
to repurchase such obligations are at the time rated by each Rating
Agency in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of
bankers'
acceptances, shall in no event have an original maturity of more
than
365 days or a remaining maturity of more than 30 days) denominated
in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any
state
thereof or of any domestic branch of a foreign depository
institution
or trust company; provided that the debt obligations of such
depository
institution or trust company at the date of acquisition thereof
have
been rated by each Rating Agency in its highest short-term rating
available; and, provided further that, if the original maturity of
such
short-term obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term
rating of such institution shall be A-1+ in the case of Standard
&
Poor's if Standard & Poor's is a Rating Agency;
(iv) commercial paper and demand notes (having original
maturities of not more than 365 days) of any corporation
incorporated
under the laws of the United States or any state thereof which on
the
date of acquisition has been rated by each Rating Agency in its
highest
short-term rating available; provided that such commercial paper
and
demand notes shall have a remaining maturity of not more than 30
days;
(v) a money market fund or a qualified investment fund rated
by each Rating Agency in its highest long-term rating available
(which
may be managed by the Trustee or one of its Affiliates); and
30
(vi) other obligations or securities that are acceptable to
each Rating Agency as a Permitted Investment hereunder and will not
reduce the rating assigned to any Class of Certificates by such
Rating
Agency below the lower of the then-current rating or the rating
assigned to such Certificates as of the Closing Date by such Rating
Agency, as evidenced in writing;
provided, however, that no instrument shall be a Permitted
Investment if it
represents, either (1) the right to receive only interest payments
with respect
to the underlying debt instrument or (2) the right to receive both
principal and
interest payments derived from obligations underlying such
instrument and the
principal and interest payments with respect to such instrument
provide a yield
to maturity greater than 120% of the yield to maturity at par of
such underlying
obligations. References herein to the highest rating available on
unsecured
long-term debt shall mean AAA in the case of Standard & Poor's
and Aaa in the
case of Moody's, and for purposes of this Agreement, any references
herein to
the highest rating available on unsecured commercial paper and
short-term debt
obligations shall mean the following: A-1 in the case of Standard
& Poor's and
P-1 in the case of Moody's; provided, however, that any Permitted
Investment
that is a short-term debt obligation rated A-1 by Standard &
Poor's must satisfy
the following additional conditions: (i) the total amount of debt
from A-1
issuers must be limited to the investment of monthly principal and
interest
payments (assuming fully amortizing collateral); (ii) the total
amount of A-1
investments must not represent more than 20% of the aggregate
outstanding
Certificate Principal Balance of the Certificates and each
investment must not
mature beyond 30 days; (iii) the terms of the debt must have a
predetermined
fixed dollar amount of principal due at maturity that cannot vary;
and (iv) if
the investments may be liquidated prior to their maturity or are
being relied on
to meet a certain yield, interest must be tied to a single interest
rate index
plus a single fixed spread (if any) and must move proportionately
with that
index. Any Permitted Investment may be purchased by or through the
Trustee or
its Affiliates.
Permitted Transferee: Any Transferee of a Class R Certificate,
other than a
Disqualified Organization or Non-United States Person.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Pool Stated Principal Balance: With respect to any date of
determination,
the aggregate of the Stated Principal Balances of each Mortgage
Loan that was an
Outstanding Mortgage Loan on the Due Date immediately preceding the
Due Period
preceding such date of determination.
Prepayment Assumption: With respect to the Class A and Class M
Certificates, the prepayment assumption to be used for determining
the accrual
of original issue discount and premium and market discount on such
Certificates
for federal income tax purposes, which assumes a prepayment rate of
23% HEP with
respect to the fixed-rate Mortgage Loans, and 100% PPC with respect
to the
adjustable-rate Mortgage Loans.
Prepayment Interest Shortfall: With respect to any Distribution
Date and
any Mortgage Loan (other than a Mortgage Loan relating to an REO
Property) that
was the subject of (a) a Principal Prepayment in Full during the
related
Prepayment Period, an amount equal to the
31
excess of one month's interest at the related Net Mortgage Rate (or
Modified Net
Mortgage Rate in the case of a Modified Mortgage Loan) on the
Stated Principal
Balance of such Mortgage Loan over the amount of interest (adjusted
to the
related Net Mortgage Rate (or Modified Net Mortgage Rate in the
case of a
Modified Mortgage Loan)) paid by the Mortgagor for such Prepayment
Period to the
date of such Principal Prepayment in Full or (b) a Curtailment
during the prior
calendar month, an amount equal to one month's interest at the
related Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage
Loan) on the amount of such Curtailment.
Prepayment Period: With respect to any Distribution Date, the
calendar
month preceding the month of distribution.
Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance as indicated by a numeric code on Exhibit G with the
exception of
either code "23" or "96" under the column "MI CO CODE".
Principal Distribution Amount: With respect to any Distribution
Date, the
lesser of (a) the excess of (i) the sum of (x) the Available
Distribution Amount
for such Distribution Date, plus (y) for inclusion in Excess Cash
Flow for
purposes of clauses (b)(v) and (b)(vi), the Yield Maintenance
Agreement
Principal Distributable Amount for such Distribution Date over (ii)
the Interest
Distribution Amount and (b) the sum of:
(i) the principal portion of each Monthly Payment received or
Advanced with respect to the related Due Period on each Outstanding
Mortgage Loan;
(ii) the Stated Principal Balance of any Mortgage Loan
repurchased during the related Prepayment Period (or deemed to have
been so repurchased in accordance with Section 3.07(b)) pursuant to
Section 2.02, 2.03, 2.04, 4.07 or 4.08, the amount of any shortfall
deposited in the Custodial Account in connection with the
substitution
of a Deleted Mortgage Loan pursuant to Section 2.03 or 2.04 during
the
related Prepayment Period and the Stated Principal Balance of
Mortgage
Loans purchased pursuant to Section 9.01 in connection with such
Distribution Date, if applicable;
(iii) the principal portion of all other unscheduled
collections, other than Subsequent Recoveries, on the Mortgage
Loans
(including, without limitation, Principal Prepayments in Full,
Curtailments, Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) received during the related Prepayment Period to the
extent
applied by the Master Servicer as recoveries of principal of the
Mortgage Loans pursuant to Section 3.14;
(iv) the lesser of (a) Subsequent Recoveries for such
Distribution Date and (b) the principal portion of any Realized
Losses
allocated to any Class of Certificates on a prior Distribution Date
and
remaining unreimbursed;
(v) the lesser of (a) Excess Cash Flow for that Distribution
Date (to the extent not used pursuant to clause (iv) of this
definition
on such Distribution Date) and (b) the principal portion of any
Realized Losses incurred (or deemed to have been incurred) on
32
any Mortgage Loans in the calendar month preceding such
Distribution
Date to the extent covered by Excess Cash Flow for that
Distribution
Date; and
(vi) the lesser of (a) the Excess Cash Flow for such
Distribution Date (to the extent not used to cover Realized Losses
pursuant to clause (iv) and (v) of this definition on such
Distribution
Date) and (b) the Overcollateralization Increase Amount for such
Distribution Date to the extent covered by Excess Cash Flow for
that
Distribution Date;
minus
(vii) the amount of any Overcollateralization Reduction Amount
for such Distribution Date; and
(viii) the amount of any Capitalization Reimbursement Amount
for such Distribution Date;
provided, however, that the Principal Distribution Amount on any
Distribution
Date shall not be less than zero or greater than the aggregate
Certificate
Principal Balance of the Class A and Class M Certificates.
Principal Prepayment: Any payment of principal or other recovery on
a
Mortgage Loan, including a recovery that takes the form of
Liquidation Proceeds
or Insurance Proceeds, which is received in advance of its
scheduled Due Date
and is not accompanied by an amount as to interest representing
scheduled
interest on such payment due on any date or dates in any month or
months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor
of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the sum
of the amounts described in clauses (b)(i), (b)(ii) and (b)(iii) of
the
definition of Principal Distribution Amount for that Distribution
Date.
Program Guide: The Residential Funding Seller Guide for mortgage
collateral
sellers that participate in Residential Funding's standard mortgage
programs,
and Residential Funding's Servicing Guide and any other
subservicing
arrangements which Residential Funding has arranged to accommodate
the servicing
of the Mortgage Loans.
Purchase Price: With respect to any Mortgage Loan (or REO Property)
required to be or otherwise purchased on any date pursuant to
Section 2.02,
2.03, 2.04, 4.07 or 4.08, an amount equal to the sum of (i) (a) if
such Mortgage
Loan (or REO Property) is being purchased pursuant to Sections
2.02, 2.03, 2.04
or 4.07 of this Agreement, 100% of the Stated Principal Balance
thereof plus the
principal portion of any related unreimbursed Advances or (b) if
such Mortgage
Loan (or REO Property) is being purchased pursuant to Section 4.08
of this
Agreement, the greater of (1) 100% of the Stated Principal Balance
thereof plus
the principal portion of any related unreimbursed Advances on such
Mortgage Loan
(or REO Property) and (2) the fair market value thereof plus the
principal
portion of any related unreimbursed Advances and (ii) unpaid
accrued interest at
the Adjusted Mortgage Rate (or Modified Net Mortgage Rate in the
33
case of a Modified Mortgage Loan) plus the rate per annum at which
the Servicing
Fee is calculated, or (b) in the case of a purchase made by the
Master Servicer,
at the Net Mortgage Rate (or Modified Net Mortgage Rate in the case
of a
Modified Mortgage Loan), in each case on the Stated Principal
Balance thereof
to, but not including, the first day of the month following the
month of
purchase from the Due Date to which interest was last paid by the
Mortgagor.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as
such under the laws of the state of its principal place of business
and each
state having jurisdiction over such insurer in connection with the
insurance
policy issued by such insurer, duly authorized and licensed in such
states to
transact a mortgage guaranty insurance business in such states and
to write the
insurance provided by the insurance policy issued by it, approved
as a FNMA- or
FHLMC-approved mortgage insurer or having a claims paying ability
rating of at
least "AA" or equivalent rating by a nationally recognized
statistical rating
organization. Any replacement insurer with respect to a Mortgage
Loan must have
at least as high a claims paying ability rating as the insurer it
replaces had
on the Closing Date.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by
Residential Funding or the Depositor for a Deleted Mortgage Loan
which must, on
the date of such substitution, as confirmed in an Officers'
Certificate
delivered to the Trustee, (i) have an outstanding principal
balance, after
deduction of the principal portion of the monthly payment due in
the month of
substitution (or in the case of a substitution of more than one
Mortgage Loan
for a Deleted Mortgage Loan, an aggregate outstanding principal
balance, after
such deduction), not in excess of the Stated Principal Balance of
the Deleted
Mortgage Loan (the amount of any shortfall to be deposited by
Residential
Funding, in the Custodial Account in the month of substitution);
(ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more
than 1% per
annum higher than the Mortgage Rate and Net Mortgage Rate,
respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iii) have a
Loan-to-Value
Ratio at the time of substitution no higher than that of the
Deleted Mortgage
Loan at the time of substitution; (iv) have a remaining term to
stated maturity
not greater than (and not more than one year less than) that of the
Deleted
Mortgage Loan; (v) comply with each representation and warranty set
forth in
Sections 2.03 and 2.04 hereof and Section 4 of the Assignment
Agreement; and
(vi) in the case of the adjustable rate Mortgage Loans, (w) have a
Mortgage Rate
that adjusts with the same frequency and based upon the same Index
as that of
the Deleted Mortgage Loan, (x) have a Note Margin not less than
that of the
Deleted Mortgage Loan; (y) have a Periodic Rate Cap that is equal
to that of the
Deleted Mortgage Loan; and (z) have a next Adjustment Date no later
than that of
the Deleted Mortgage Loan.
Rating Agency: Moody's and Standard & Poor's. If any agency or
a successor
is no longer in existence, "Rating Agency" shall be such
statistical credit
rating agency, or other comparable Person, designated by the
Depositor, notice
of which designation shall be given to the Trustee and the Master
Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property)
as to
which a Cash Liquidation or REO Disposition has occurred, an amount
(not less
than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan (or
REO Property) as of the date of Cash Liquidation or REO
Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the Net Mortgage
Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan)
from
34
the Due Date as to which interest was last paid or advanced to
Certificateholders up to the last day of the month in which the
Cash Liquidation
(or REO Disposition) occurred on the Stated Principal Balance of
such Mortgage
Loan (or REO Property) outstanding during each Due Period that such
interest was
not paid or advanced, minus (iii) the proceeds, if any, received
during the
month in which such Cash Liquidation (or REO Disposition) occurred,
to the
extent applied as recoveries of interest at the Net Mortgage Rate
(or Modified
Net Mortgage Rate in the case of a Modified Mortgage Loan) and to
principal of
the Mortgage Loan, net of the portion thereof reimbursable to the
Master
Servicer or any Subservicer with respect to related Advances,
Servicing Advances
or other expenses as to which the Master Servicer or Subservicer is
entitled to
reimbursement thereunder but which have not been previously
reimbursed. With
respect to each Mortgage Loan which is the subject of a Servicing
Modification,
(a) (1) the amount by which the interest portion of a Monthly
Payment or the
principal balance of such Mortgage Loan was reduced or (2) the sum
of any other
amounts owing under the Mortgage Loan that were forgiven and that
constitute
Servicing Advances that are reimbursable to the Master Servicer or
a
Subservicer, and (b) any such amount with respect to a Monthly
Payment that was
or would have been due in the month immediately following the month
in which a
Principal Prepayment or the Purchase Price of such Mortgage Loan is
received or
is deemed to have been received. With respect to each Mortgage Loan
which has
become the subject of a Deficient Valuation, the difference between
the
principal balance of the Mortgage Loan outstanding immediately
prior to such
Deficient Valuation and the principal balance of the Mortgage Loan
as reduced by
the Deficient Valuation. With respect to each Mortgage Loan which
has become the
object of a Debt Service Reduction, the amount of such Debt Service
Reduction.
Notwithstanding the above, neither a Deficient Valuation nor a Debt
Service
Reduction shall be deemed a Realized Loss hereunder so long as the
Master
Servicer has notified the Trustee in writing that the Master
Servicer 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 primary
hazard
insurance policy and any related escrow payments in respect of such
Mortgage
Loan are being advanced on a current basis by the Master Servicer
or a
Subservicer, in either case without giving effect to any Debt
Service Reduction.
Realized Losses allocated to the Class SB Certificates shall be
allocated
first to the REMIC II Regular Interest SB-IO in reduction of the
accrued but
unpaid interest thereon until such accrued and unpaid interest
shall have been
reduced to zero and then to the REMIC II Regular Interest SB-PO in
reduction of
the Principal Balance thereof.
Record Date: With respect to each Distribution Date and the Class A
Certificates and Class M Certificates which are Book-Entry
Certificates, the
close of business on the Business Day prior to such Distribution
Date.
With respect to each Distribution Date and the Certificates (other
than the
Class A and Class M Certificates), the close of business on the
last Business
Day of the month next preceding the month in which the related
Distribution Date
occurs, except in the case of the first Record Date, which shall be
the Closing
Date.
Reference Bank Rate: As defined in Section 1.02.
35
Regular Interest: Any one of the regular interests in the Trust
Fund.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time
to time, and
subject to such clarification and interpretation as have been
provided by the
Commission in the adopting release (Asset-Backed Securities,
Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005))
or by the
staff of the Commission, or as may be provided by the Commission or
its staff
from time to time.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans
resulting
from the Relief Act or similar legislation or regulations.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Code.
REMIC Administrator: Residential Funding Corporation. If
Residential
Funding Corporation is found by a court of competent jurisdiction
to no longer
be able to fulfill its obligations as REMIC Administrator under
this Agreement
the Master Servicer or Trustee acting as successor master servicer
shall appoint
a successor REMIC Administrator, subject to assumption of the REMIC
Administrator obligations under this Agreement.
REMIC I: The segregated pool of assets subject hereto (exclusive of
the
Yield Maintenance Agreement and any payments thereunder, which are
not assets of
any REMIC), constituting a portion of the primary trust created
hereby and to be
administered hereunder, with respect to which a separate REMIC
election is to be
made (other than with respect to the items in clause (v) and the
proceeds
thereof), consisting of: (i) the Mortgage Loans and the related
Mortgage Files;
(ii) all payments on and collections in respect of the Mortgage
Loans due after
the Cut-off Date (other than Monthly Payments due in the month of
the Cut-off
Date) as shall be on deposit in the Custodial Account or in the
Certificate
Account and identified as belonging to the Trust Fund; (iii)
property which
secured a Mortgage Loan and which has been acquired for the benefit
of the
Certificateholders by foreclosure or deed in lieu of foreclosure;
(iv) the
hazard insurance policies and Primary Insurance Policies pertaining
to the
Mortgage Loans, if any; and (v) all proceeds of clauses (i) through
(iv) above.
REMIC I Regular Interest: Any of the separate non-certificated
beneficial
ownership interests in REMIC I issued hereunder and designated as a
"regular
interest" in REMIC I. Each REMIC I Regular Interest shall accrue
interest at the
related Uncertificated REMIC I Pass-Through Rate in effect from
time to time,
and shall be entitled to distributions of principal, subject to the
terms and
conditions hereof, in an aggregate amount equal to its initial
Uncertificated
Principal Balance as set forth in the Preliminary Statement hereto.
The
designations for the respective REMIC I Regular Interests are set
forth in the
Preliminary Statement hereto.
REMIC I Interest Loss Allocation Amount: With respect to any
Distribution
Date, an amount equal to (a) the product of (i) the aggregate
Uncertificated
Principal Balance of the
36
REMIC I Regular Interests then outstanding and (ii) the
Uncertificated
Pass-Through Rate for REMIC I Regular Interest AA minus the Marker
Rate, divided
by (b) 12.
REMIC I Overcollateralized Amount: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal
Balances of the
REMIC I Regular Interests minus (ii) the aggregate Uncertificated
Principal
Balances of the REMIC I Regular Interests (other than REMIC I
Regular Interests
AA and ZZ), in each case as of such date of determination.
REMIC I Principal Loss Allocation Amount: With respect to any
Distribution
Date, an amount equal to the product of (i) the aggregate Stated
Principal
Balance of the Mortgage Loans then outstanding and (ii) 1 minus a
fraction, the
numerator of which is two times the sum of the Uncertificated
Principal Balances
of REMIC I Regular Interests A-1, A-2, A-3, M-1, M-2, M-3, M-4,
M-5, M-6, M-7,
M-8, M-9 and M-10 and the denominator of which is the sum of the
Uncertificated
Principal Balances of A-1, A-2, A-3, M-1, M-2, M-3, M-4, M-5, M-6,
M-7, M-8,
M-9, M-10 and ZZ.
REMIC I Regular Interest AA: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest A-1: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest A-2: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest A-3: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest M-1: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest M-2: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest M-3: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal
37
Balance, that bears interest at the related Uncertificated REMIC I
Pass-Through
Rate, and that has such other terms as are described herein.
REMIC I Regular Interest M-4: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest M-5: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest M-6: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest M-7: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest M-8: A regular interest in REMIC II that
is held
as an asset of REMIC II, that has an initial principal balance
equal to the
related Uncertificated Principal Balance, that bears interest at
the related
Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest M-9: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest M-10: A regular interest in REMIC I that
is held
as an asset of REMIC II, that has an initial principal balance
equal to the
related Uncertificated Principal Balance, that bears interest at
the related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest ZZ: A regular interest in REMIC I that is
held as
an asset of REMIC II, that has an initial principal balance equal
to the related
Uncertificated Principal Balance, that bears interest at the
related
Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are
described herein.
REMIC I Regular Interest ZZ Maximum Interest Deferral Amount: With
respect
to any Distribution Date, the excess of (i) Uncertificated Accrued
Interest
calculated with the REMIC I Regular Interest ZZ Uncertificated
Pass-Through Rate
and an Uncertificated Principal Balance equal to the excess of (x)
the
Uncertificated Principal Balance of REMIC I Regular Interest ZZ
over (y) the
REMIC I Overcollateralized Amount, in each case for such
Distribution Date, over
38
(ii) the sum of Uncertificated Accrued Interest on REMIC I Regular
Interest A-1
through REMIC I Regular Interest M-10, with the rate on each such
REMIC I
Regular Interest subject to a cap equal to the Pass-Through Rate
for the
corresponding Class for the purpose of this calculation.
REMIC II: The segregated pool of assets described in the
Preliminary
Statement.
REMIC II Regular Interest: Any "regular interest" issued by REMIC
II the
ownership of which is evidenced by a Class A Certificate and Class
M
Certificate, or the Class SB Certificate.
REMIC II Regular Interest SB-IO: A separate non-certificated
regular
interest of REMIC II designated as a REMIC II Regular Interest.
REMIC II Regular
Interest SB-IO shall have no entitlement to principal and shall be
entitled to
distributions of interest subject to the terms and conditions
hereof, in an
aggregate amount equal to interest distributable with respect to
the Class SB
Certificates pursuant to the terms and conditions hereof.
REMIC II Regular Interest SB-PO: A separate non-certificated
regular
interest of REMIC II designated as a REMIC II Regular Interest.
REMIC II Regular
Interest SB-PO shall have no entitlement to interest and shall be
entitled to
distributions of principal subject to the terms and conditions
hereof, in an
aggregate amount equal to principal distributable with respect to
the Class SB
Certificates pursuant to the terms and conditions hereof.
REMIC Provisions: Provisions of the federal income tax law relating
to real
estate mortgage investment conduits, which appear at Sections 860A
through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions,
and temporary
and final regulations (or, to the extent not inconsistent with such
temporary or
final regulations, proposed regulations) and published rulings,
notices and
announcements promulgated thereunder, as the foregoing may be in
effect from
time to time.
REMIC Regular Interests: the REMIC I Regular Interests and REMIC II
Regular
Interests.
REO Acquisition: The acquisition by the Master Servicer on behalf
of the
Trustee for the benefit of the Certificateholders of any REO
Property pursuant
to Section 3.14.
REO Disposition: With respect to any REO Property, a determination
by the
Master Servicer that it has received substantially all Insurance
Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and
recoveries (including
proceeds of a final sale) which the Master Servicer expects to be
finally
recoverable from the sale or other disposition of the REO Property.
REO Imputed Interest: With respect to any REO Property, for any
period, an
amount equivalent to interest (at a rate equal to the sum of the
Net Mortgage
Rate that would have been applicable to the related Mortgage Loan
had it been
outstanding) on the unpaid principal balance of the Mortgage Loan
as of the date
of acquisition thereof for such period.
REO Proceeds: Proceeds, net of expenses, received in respect of any
REO
Property (including, without limitation, proceeds from the rental
of the related
Mortgaged Property) which
39
proceeds are required to be deposited into the Custodial Account
only upon the
related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer,
on
behalf of the Trust Fund for the benefit of the Certificateholders
pursuant to
Section 3.14, through foreclosure or deed in lieu of foreclosure in
connection
with a defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has
been
subject to an interest rate reduction, (ii) has been subject to a
term extension
or (iii) has had amounts owing on such Mortgage Loan capitalized by
adding such
amount to the Stated Principal Balance of such Mortgage Loan;
provided, however,
that a Mortgage Loan modified in accordance with clause (i) above
for a
temporary period shall not be a Reportable Modified Mortgage Loan
if such
Mortgage Loan has not been delinquent in payments of principal and
interest for
six months since the date of such modification if that interest
rate reduction
is not made permanent thereafter.
Repurchase Event: As defined in the Assignment Agreement.
Request for Release: A request for release, the form of which is
attached
as Exhibit H hereto, or an electronic request in a form acceptable
to the
Custodian.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance
policy which is required to be maintained from time to time under
this
Agreement, the Program Guide or the related Subservicing Agreement
in respect of
such Mortgage Loan.
Required Overcollateralization Amount: As of any Distribution Date,
(a) if
such Distribution Date is prior to the Stepdown Date, 2.50% of the
Cut-off Date
Balance, or (b) if such Distribution Date is on or after the
Stepdown Date, the
greater of (i) 5.00% of the then current aggregate Stated Principal
Balance of
the Mortgage Loans as of the end of the related Due Period and (ii)
the
Overcollateralization Floor; provided, however, that if a Trigger
Event is in
effect, the Required Overcollateralization Amount shall be equal to
the Required
Overcollateralization Amount for the immediately preceding
Distribution Date.
The Required Overcollateralization Amount may be reduced so long as
written
confirmation is obtained from each Rating Agency that such
reduction shall not
result in a reduction or withdrawal of the then current rating of
any Class of
Certificates assigned by such Rating Agency.
Residential Funding: Residential Funding Corporation, a Delaware
corporation, in its capacity as seller of the Mortgage Loans to the
Depositor
and not in its capacity as Master Servicer, and any successor
thereto.
Responsible Officer: When used with respect to the Trustee, any
officer of
the Corporate Trust Department of the Trustee, including any Senior
Vice
President, any Vice President, any Assistant Vice President, any
Assistant
Secretary, any Trust Officer or Assistant Trust Officer, or any
other officer of
the Trustee in each case with direct responsibility for the
administration of
this Agreement.
RFC Exemption: As defined in Section 5.02(e)(ii).
40
Rule 144A: Rule 144A under the Securities Act of 1933, as in effect
from
time to time.
Securitization Transaction: Any transaction involving a sale or
other
transfer of mortgage loans directly or indirectly to an issuing in
connection
with an issuance of publicly offered or privately placed, rated or
unrated
mortgage-backed securities.
Senior Enhancement Percentage: For any Distribution Date, the
fraction,
expressed as a percentage, the numerator of which is (x) the sum of
(i) the
aggregate Certificate Principal Balance of the Class M Certificates
and (ii) the
Overcollateralization Amount, in each case prior to the
distribution of the
Principal Distribution Amount on such Distribution Date and the
denominator of
which is (y) the aggregate Stated Principal Balance of the Mortgage
Loans after
giving effect to distributions to be made on that Distribution
Date.
Servicing Accounts: The account or accounts created and maintained
pursuant
to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out of
pocket"
costs and expenses incurred in connection with a default,
delinquency or other
unanticipated event by the Master Servicer or a Subservicer in the
performance
of its servicing obligations, including, but not limited to, the
cost of (i) the
preservation, restoration and protection of a Mortgaged Property,
(ii) any
enforcement or judicial proceedings, including foreclosures,
including any
expenses incurred in relation to any such proceedings that result
from the
Mortgage Loan being registered on the MERS System, (iii) the
management and
liquidation of any REO Property, (iv) any mitigation procedures
implemented in
accordance with Section 3.07 and (v) compliance with the
obligations under
Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14, including, if the
Master Servicer
or any Affiliate of the Master Servicer provides services such as
appraisals and
brokerage services that are customarily provided by Persons other
than servicers
of mortgage loans, reasonable compensation for such services.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to any Mortgage Loan and Distribution
Date, the
fee payable monthly to the Master Servicer in respect of master
servicing
compensation that accrues at an annual rate equal to the Servicing
Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as
of the
related Due Date in the related Due Period, as may be adjusted
pursuant to
Section 3.16(e).
Servicing Fee Rate: With respect to any Mortgage Loan, the per
annum rate
designated on the Mortgage Loan Schedule as the "MSTR SERV FEE" as
may be
adjusted with respect to successor Master Servicers as provided in
Section 7.02,
which rate shall never be greater than the Mortgage Rate of such
Mortgage Loan.
Servicing Modification: Any reduction of the interest rate on or
the Stated
Principal Balance of a Mortgage Loan, any extension of the final
maturity date
of a Mortgage Loan, and any increase to the Stated Principal
Balance of a
Mortgage Loan by adding to the Stated Principal Balance unpaid
principal and
interest and other amounts owing under the Mortgage Loan, in each
case pursuant
to a modification of a Mortgage Loan that is in default, or for
which,
41
in the judgment of the Master Servicer, default is reasonably
foreseeable in
accordance with Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved in,
or
responsible for, the administration and servicing of the Mortgage
Loans whose
name and specimen signature appear on a list of servicing officers
furnished to
the Trustee on the Closing Date by the Master Servicer, as such
list may from
time to time be amended.
Sixty-Plus Delinquency Percentage: With respect to any Distribution
Date
and the Mortgage Loans, the arithmetic average, for each of the
three
Distribution Dates ending with such Distribution Date, of the
fraction,
expressed as a percentage, equal to (x) the aggregate Stated
Principal Balance
of the Mortgage Loans that are 60 or more days delinquent in
payment of
principal and interest for that Distribution Date, including
Mortgage Loans in
bankruptcy that are 60 or more days delinquent, foreclosure and REO
Properties,
over (y) the aggregate Stated Principal Balance of all of the
Mortgage Loans
immediately preceding that Distribution Date.
Standard & Poor's: Standard & Poor's Rating Services, a
division of The
McGraw-Hill Companies, Inc. or its successors in interest.
Startup Date: The day designated as such pursuant to Article X
hereof.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO
Property, at any given time, (i) the sum of (a) the Cut-off Date
Principal
Balance of the Mortgage Loan, (b) any amount by which the Stated
Principal
Balance of the Mortgage Loan has been increased pursuant to a
Servicing
Modification, minus (ii) the sum of (a) the principal portion of
the Monthly
Payments due with respect to such Mortgage Loan or REO Property
during each Due
Period commencing on the first Due Period after the Cut-Off Date
and ending with
the Due Period related to the most recent Distribution Date which
were received
or with respect to which an Advance was made, and (b) all Principal
Prepayments
with respect to such Mortgage Loan or REO Property, and all
Insurance Proceeds,
Liquidation Proceeds and REO Proceeds, to the extent applied by the
Master
Servicer as recoveries of principal in accordance with Section 3.14
with respect
to such Mortgage Loan or REO Property, in each case which were
distributed
pursuant to Section 4.02 or 4.03 on any previous Distribution Date,
and (c) any
Realized Loss incurred with respect to such Mortgage Loan allocated
to
Certificateholders with respect thereto for any previous
Distribution Date.
Stepdown Date: The Distribution Date which is the earlier to occur
of (i)
the Distribution Date immediately succeeding the Distribution Date
on which the
aggregate Certificate Principal Balance of the Class A Certificates
has been
reduced to zero or (ii) the later to occur of (x) the Distribution
Date
occurring in November 200[_] and (y) the first Distribution Date on
which the
Senior Enhancement Percentage is equal to or greater than [_____]%.
Subordination: The provisions described in Section 4.05 relating to
the
allocation of Realized Losses.
Subordination Percentage: With respect to the Class A Certificates,
[_____]%; with respect to the Class M-1 Certificates, [_____]%;
with respect to
the Class M-2 Certificates, [_____]%; with respect to the Class M-3
Certificates, [_____]%; with respect to the Class M-4
42
Certificates, [_____]%; with respect to the Class M-5 Certificates,
[_____]%;
with respect to the Class M-6 Certificates, [_____]%; with respect
to the Class
M-7 Certificates, [_____]%; with respect to the Class M-8
Certificates,
[_____]%; with respect to the Class M-9 Certificates, [_____]%; and
with respect
to the Class M-10 Certificates, [_____]%.
Subsequent Recoveries: As of any Distribution Date, amounts
received by the
Master Servicer (net of any related expenses permitted to be
reimbursed pursuant
to Section 3.10) or surplus amounts held by the Master Servicer to
cover
estimated expenses (including, but not limited to, recoveries in
respect of the
representations and warranties made by the related Seller pursuant
to the
applicable Seller's Agreement and assigned to the Trustee pursuant
to Section
2.04) specifically related to a Mortgage Loan that was the subject
of a Cash
Liquidation or an REO Disposition prior to the related Prepayment
Period and
that resulted in a Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference
thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered
into a
Subservicing Agreement and who generally satisfied the requirements
set forth in
the Program Guide in respect of the qualification of a Subservicer
as of the
date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and
interest
on a Mortgage Loan which is advanced by the related Subservicer
(net of its
Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in
accordance
with Section 3.08.
Subservicing Agreement: The written contract between the Master
Servicer
and any Subservicer relating to servicing and administration of
certain Mortgage
Loans as provided in Section 3.02, generally in the form of the
servicer
contract referred to or contained in the Program Guide or in such
other form as
has been approved by the Master Servicer and the Depositor.
Subservicing Fee: With respect to any Mortgage Loan, the fee
payable
monthly to the related Subservicer (or, in the case of a
Nonsubserviced Mortgage
Loan, to the Master Servicer) in respect of subservicing and other
compensation
that accrues with respect to each Distribution Date at an annual
rate equal to
the Subservicing Fee Rate multiplied by the Stated Principal
Balance of such
Mortgage Loan as of the related Due Date in the related Due Period.
Subservicing Fee Rate: The per annum rate designated on the
Mortgage Loan
Schedule as the "SUBSERV FEE".
Tax Returns: The federal income tax return on Internal Revenue
Service Form
1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders
of REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to
be filed on
behalf of any REMIC due to its classification as a REMIC under the
REMIC
Provisions, together with any and all other information, reports or
43
returns that may be required to be furnished to the
Certificateholders or filed
with the Internal Revenue Service or any other governmental taxing
authority
under any applicable provisions of federal, state or local tax
laws.
Telerate Screen Page 3750: As defined in Section 1.02.
Transaction Party: As specified in Section 12.05(a).
Transfer: Any direct or indirect transfer, sale, pledge,
hypothecation or
other form of assignment of any Ownership Interest in a
Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest
in a Certificate.
Transferor: Any Person who is disposing by Transfer of any
Ownership
Interest in a Certificate.
Trigger Event: A Trigger Event is in effect with respect to any
Distribution Date if either (i) (A) with respect to any
Distribution Date (other
than the first Distribution Date), the three-month average (or two
month-average
in the case of the second Distribution Date) of the Sixty-Plus
Delinquency
Percentage, as determined on that Distribution Date and the
immediately
preceding two Distribution Dates (or immediately preceding
Distribution Date in
the case of the second Distribution Date), equals or exceeds
[_____]% of the
Senior Enhancement Percentage or (B) with respect to the first
Distribution
Date, the Sixty-Plus Delinquency Percentage, as determined on that
Distribution
Date, equals or exceeds [_____]% of the Senior Enhancement
Percentage or (ii)
the aggregate amount of Realized Losses on the Mortgage Loans as a
percentage of
the Cut-off Date Balance exceeds the applicable amount set forth
below:
November 200[_] to October 200[_]............
[____]% with respect to November 200[_], plus an additional
1/12th of [_____]% for each month thereafter.
November 200[_] to October 200[_]............
[_____]% with respect to November 200[_], plus an additional
1/12th of [_____]% for each month thereafter.
November 200[_] to October 200[_]............
[_____]% with respect to November 200[_], plus an additional
1/12th of [_____]% for each month thereafter.
November 200[_] to October 200[_]............
[_____]% with respect to November 200[_], plus an additional
1/12th of [_____]% for each month thereafter.
November 200[_] and thereafter...............
[_____]%
Trust Fund: The segregated pool of assets subject hereto,
consisting of:
(i) the Mortgage Loans and the related Mortgage Files; (ii) all
payments on and
collections in respect of the Mortgage Loans due after the Cut-off
Date (other
than Monthly Payments due in the month of the Cut-off Date) as
shall be on
deposit in the Custodial Account or in the Certificate Account and
identified as
belonging to the Trust Fund; (iii) property which secured a
Mortgage Loan and
44
which has been acquired for the benefit of the Certificateholders
by foreclosure
or deed in lieu of foreclosure; (iv) the hazard insurance policies
and Primary
Insurance Policies pertaining to the Mortgage Loans, if any; (v)
rights under
the Yield Maintenance Agreement and any payments thereunder; and
(vi) all
proceeds of clauses (i) through (v) above.
Trustee Information: As specified in Section 12.05(a)(i)(A).
Uncertificated Accrued Interest: With respect to any REMIC I
Regular
Interest for any Distribution Date, one month's interest at the
related
Uncertificated REMIC I Pass-Through Rate for such Distribution
Date, accrued on
its Uncertificated Principal Balance immediately prior to such
Distribution
Date. Uncertificated Accrued Interest for the REMIC I Regular
Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day
months. For
purposes of calculating the amount of Uncertificated Accrued
Interest for the
REMIC I Regular Interests for any Distribution Date, any Prepayment
Interest
Shortfalls and Relief Act Shortfalls (to the extent not covered by
Compensating
Interest) relating to the Mortgage Loans for any Distribution Date
shall be
allocated first, to Uncertificated Accrued Interest payable to
REMIC I Regular
Interest AA and REMIC I Regular Interest ZZ up to an aggregate
amount equal to
the REMIC I Interest Loss Allocation Amount, 98% and 2%,
respectively, and
thereafter any remaining Prepayment Interest Shortfalls (to the
extent not
covered by Eligible Master Servicing Compensation) for any
Distribution Date
shall be allocated among REMIC I Regular Interest AA, REMIC I
Regular Interest
A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest A-3,
REMIC I Regular
Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC
I Regular Interest M-1, REMIC I Regular Interest M-4, REMIC I
Regular Interest
M-5, REMIC I Regular Interest M-6, REMIC I Regular Interest M-7,
REMIC I Regular
Interest M-8, REMIC I Regular Interest M-9, REMIC I Regular
Interest M-10 and
REMIC I Regular Interest ZZ, pro rata based on, and to the extent
of,
Uncertificated Accrued Interest, as calculated without application
of this
sentence.
Uncertificated Notional Amount: With respect to the REMIC II
Regular
Interest SB-IO component of the Class SB Certificates and any
Distribution Date,
an amount equal to the aggregate Uncertificated Principal Balance
of the REMIC I
Regular Interests for such Distribution Date.
Uncertificated Principal Balance: As of the Closing Date, the
Uncertificated Principal Balance of each REMIC I Regular Interest
shall equal
the amount set forth in the Preliminary Statement hereto as its
initial
Uncertificated Principal Balance. On each Distribution Date, the
Uncertificated
Principal Balance of each REMIC I Regular Interest shall be reduced
by all
distributions of principal deemed made on such REMIC Regular
Interest on such
Distribution Date pursuant to Section 4.02 and, if and to the
extent necessary
and appropriate, shall be further reduced on such Distribution Date
by Realized
Losses as provided in Section 4.05, and the Uncertificated
Principal Balance of
REMIC I Regular Interest ZZ shall be increased by the related
interest deferrals
as provided in Section 4.02. The Uncertificated Principal Balance
of each REMIC
I Regular Interest shall never be less than zero. With respect to
the REMIC II
Regular Interest SB-PO an initial amount equal to the amount set
forth in the
Preliminary Statement hereto as its initial Uncertificated
Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of
each REMIC II
Regular Interest shall be reduced by all distributions of principal
deemed made
on such REMIC Regular Interest on such Distribution
45
Date pursuant to Section 4.02 and, if and to the extent necessary
and
appropriate, shall be further reduced on such Distribution Date by
Realized
Losses as provided in Section 4.05.
Uncertificated REMIC I Pass-Through Rate: With respect to any
Distribution
Date, a per annum rate equal to the weighted average of the Net
Mortgage Rates
of the Mortgage Loans in effect for the scheduled Monthly Payments
due on such
Mortgage Loans during the related Due Period.
Uninsured Cause: Any cause of damage to property subject to a
Mortgage such
that the complete restoration of such property is not fully
reimbursable by the
hazard insurance policies.
United States Person: A citizen or resident of the United States, a
corporation, partnership or other entity (treated as a corporation
or
partnership for United States federal income tax purposes) created
or organized
in, or under the laws of, the United States, any state thereof, or
the District
of Columbia (except in the case of a partnership, to the extent
provided in
Treasury regulations) provided that, for purposes solely of the
restrictions on
the transfer of Class R Certificates, no partnership or other
entity treated as
a partnership for United States federal income tax purposes shall
be treated as
a United States Person unless all persons that own an interest in
such
partnership either directly or through any entity that is not a
corporation for
United States federal income tax purposes are required by the
applicable
operative agreement to be United States Persons, or an estate that
is described
in Section 7701(a)(30)(D) of the Code, or a trust that is described
in Section
7701(a)(30)(E) of the Code.
VA: The Veterans Administration, or its successor. --
Voting Rights: The portion of the voting rights of all of the
Certificates
which is allocated to any Certificate. 98.00% of all of the Voting
Rights shall
be allocated among Holders of the Class A and Class M Certificates,
in
proportion to the outstanding Certificate Principal Balances of
their respective
Certificates; 1% of all of the Voting Rights shall be allocated
among the
Holders of the Class SB Certificates; 0.50% and 0.50%, of all of
the Voting
Rights shall be allocated to each of the Holders of the Class R-I
and Class R-II
Certificates, respectively; in each case to be allocated among the
Certificates
of such Class in accordance with their respective Percentage
Interest.
Yield Maintenance Agreement: The yield maintenance agreement,
effective as
of [______________], 200[_], between the Yield Maintenance
Agreement Provider
and the Trustee, on behalf of the Trust, which agreement provides
for Yield
Maintenance Payments and Yield Maintenance Termination Payments to
be paid, as
provided therein, together with any schedules, confirmations or
other agreements
relating thereto, attached hereto as Exhibit U.
Yield Maintenance Agreement Notional Balance: With respect to any
Distribution Date specified below and the Yield Maintenance
Agreement, the
lesser of (1) the aggregate Certificate Principal Balance of the
Class A and
Class M Certificates immediately prior to that Distribution Date
and (2) the
amount specified below for that Distribution Date:
DISTRIBUTION DATE
NOTIONAL BALANCE ($)
DISTRIBUTION DATE
NOTIONAL BALANCE ($)
-----------------
-----------
-----------------
-----------
November 200[_].....
[___________]
May 200[_].............
[____________]
46
December 200[_].....
[___________]
June 200[_]............
[____________]
January 200[_]......
[___________]
July 200[_]............
[____________]
February 200[_].....
[___________]
August 200[_]..........
[____________]
March 200[_]........
[___________]
September 200[_].......
[____________]
April 200[_]........
[___________]
October 200[_].........
[____________]
May 200[_]..........
[___________]
November 200[_]........
[____________]
June 200[_].........
[___________]
December 200[_]........
[____________]
July 200[_].........
[___________]
January 200[_].........
[____________]
August 200[_].......
[___________]
February 200[_]........
[____________]
September 200[_]....
[___________]
March 200[_]...........
[____________]
October 200[_]......
[___________]
April 200[_]...........
[____________]
November 200[_].....
[___________]
May 200[_].............
[____________]
December 200[_].....
[___________]
June 200[_]............
[____________]
January 200[_]......
[___________]
July 200[_]............
[____________]
February 200[_].....
[___________]
August 200[_]..........
[____________]
March 200[_]........
[___________]
September 200[_].......
[____________]
April 200[_]........
[___________]
October 200[_].........
[____________]
May 200[_]..........
[___________]
November 200[_]........
[____________]
June 200[_].........
[___________]
December 200[_]........
[____________]
July 200[_].........
[___________]
January 200[_].........
[____________]
August 200[_].......
[___________]
February 200[_]........
[____________]
September 200[_]....
[___________]
March 200[_]...........
[____________]
October 200[_]......
[___________]
April 200[_]...........
[____________]
November 200[_].....
[___________]
May 200[_].............
[____________]
December 200[_].....
[___________]
June 200[_]............
[____________]
January 200[_]......
[___________]
July 200[_]............
[____________]
February 200[_].....
[___________]
August 200[_]..........
[____________]
March 200[_]........
[___________]
September 200[_].......
[____________]
April 200[_]........
[___________]
October 200[_]......
[____________]
November 200[_] and
thereafter....................N/A
Yield Maintenance Agreement Provider: The yield maintenance
agreement
provider under the Yield Maintenance Agreement required to make
payments to the
Trustee for payment to the Trust Fund pursuant to the terms of the
Yield
Maintenance Agreement, and any successor in interest or assign.
Initially, the
Yield Maintenance Agreement Provider shall be Bank of America, N.A.
Yield Maintenance Agreement Principal Distributable Amount: With
respect to
any Distribution Date, any Yield Maintenance Payment received by
the Trustee, on
behalf of the Trust Fund, under the Yield Maintenance Agreement for
such
Distribution Date and paid as part of the Principal Distribution
Amount for such
Distribution Date in accordance with Sections
47
4.02(c)(xiv) and (xv) in accordance with the allocation of Excess
Cash Flow
described in Section 4.02(f).
Yield Maintenance Agreement Termination Payment: Upon the
designation of an
"Early Termination Date" as defined in the Yield Maintenance
Agreement, the
payment to be made by the Yield Maintenance Agreement Provider to
the Trustee
for payment to the Trust Fund pursuant to the terms of the Yield
Maintenance
Agreement.
Yield Maintenance Payment: With respect to each Distribution Date,
any
payment received by the Trustee, on behalf of the Trust Fund, from
the Yield
Maintenance Agreement Provider pursuant to the terms of the Yield
Maintenance
Agreement, with respect to such Distribution Date, provided that
such payment
shall not include any payment received by the Trustee, on behalf of
the Trust
Fund, that is a Yield Maintenance Agreement Termination Payment,
except as set
forth in Section 4.09(e).
Section 1.02. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on the
Class A
and Class M Certificates for any Interest Accrual Period will be
determined on
each LIBOR Rate Adjustment Date. On each LIBOR Rate Adjustment
Date, or if such
LIBOR Rate Adjustment Date is not a Business Day, then on the next
succeeding
Business Day, LIBOR shall be established by the Trustee and, as to
any Interest
Accrual Period, will equal the rate for one month United States
dollar deposits
that appears on the Telerate Screen Page 3750 as of 11:00 A.M.,
London time, on
such LIBOR Rate Adjustment Date. "Telerate Screen Page 3750" means
the display
designated as page 3750 on the Bridge Telerate Service (or such
other page as
may replace page 3750 on that service for the purpose of displaying
London
interbank offered rates of major banks). If such rate does not
appear on such
page (or such other page as may replace that page on that service,
or if such
service is no longer offered, LIBOR shall be so established by use
of such other
service for displaying LIBOR or comparable rates as may be selected
by the
Trustee after consultation with the Master Servicer), the rate will
be the
Reference Bank Rate. The "Reference Bank Rate" will be determined
on the basis
of the rates at which deposits in U.S. Dollars are offered by the
reference
banks (which shall be any three major banks that are engaged in
transactions in
the London interbank market, selected by the Trustee after
consultation with the
Master Servicer) as of 11:00 A.M., London time, on the LIBOR Rate
Adjustment
Date to prime banks in the London interbank market for a period of
one month in
amounts approximately equal to the aggregate Certificate Principal
Balance of
the Class A and Class M Certificates then outstanding. The Trustee
shall request
the principal London office of each of the reference banks to
provide a
quotation of its rate. If at least two such quotations are
provided, the rate
will be the arithmetic mean of the quotations rounded up to the
next multiple of
1/16%. If on such date fewer than two quotations are provided as
requested, the
rate will be the arithmetic mean of the rates quoted by one or more
major banks
in New York City, selected by the Trustee after consultation with
the Master
Servicer, as of 11:00 A.M., New York City time, on such date for
loans in U.S.
Dollars to leading European banks for a period of one month in
amounts
approximately equal to the aggregate Certificate Principal Balance
of the Class
A and Class M Certificates then outstanding. If no such quotations
can be
obtained, the rate will be LIBOR for the prior Distribution Date;
provided
however, if, under the priorities described above, LIBOR for a
Distribution Date
would be based on LIBOR for the previous Distribution
48
Date for the third consecutive Distribution Date, the Trustee shall
select an
alternative comparable index (over which the Trustee has no
control), used for
determining one-month Eurodollar lending rates that is calculated
and published
(or otherwise made available) by an independent party. The
establishment of
LIBOR by the Trustee on any LIBOR Rate Adjustment Date and the
Trustee's
subsequent calculation of the Pass-Through Rates applicable to the
Class A and
Class M Certificates for the relevant Interest Accrual Period, in
the absence of
manifest error, will be final and binding. Promptly following each
LIBOR Rate
Adjustment Date the Trustee shall supply the Master Servicer with
the results of
its determination of LIBOR on such date. Furthermore, the Trustee
shall supply
to any Certificateholder so requesting by calling the Trustee at
1-800-934-6802
the Pass-Through Rate on the Class A and Class M Certificates for
the current
and the immediately preceding Interest Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof,
does hereby assign to the Trustee without recourse all the right,
title and
interest of the Depositor in and to (i) the Mortgage Loans,
including all
interest and principal on or with respect to the Mortgage Loans due
on or after
the Cut-off Date (other than Monthly Payments due on the Mortgage
Loans in the
month of the Cut-off Date); and (ii) all proceeds of the foregoing.
In addition,
on the Closing Date, the Trustee is hereby directed to enter into
the Yield
Maintenance Agreement on behalf of the Trust Fund with the Yield
Maintenance
Agreement Provider.
The Depositor, the Master Servicer and the Trustee agree that it is
not
intended that any mortgage loan be included in the Trust Fund that
is either (i)
a "High-Cost Home Loan" as defined in the New Jersey Home Ownership
Security Act
effective November 27, 2003, (ii) a "High-Cost Home Loan" as
defined in the New
Mexico Home Loan Protection Act effective January 1, 2004, (iii) a
"High Cost
Home Mortgage Loan" as defined in the Massachusetts Predatory Home
Loan
Practices Act effective November 7, 2004 or (iv) a "High-Cost Home
Loan" as
defined in the Indiana Home Loan Practices Act effective as of
January 1,
200[_].
(b) In connection with such assignment, and contemporaneously with
the
delivery of this Agreement, the Depositor delivered or caused to be
delivered
hereunder to the Trustee, the Yield Maintenance Agreement (the
delivery of which
shall evidence that the fixed payment for the Yield Maintenance
Agreement has
been paid and the Trustee and the Trust Fund shall have no further
payment
obligation thereunder and that such fixed payment has been
authorized hereby),
and except as set forth in Section 2.01(c) below and subject to
Section 2.01(d)
below, the Depositor does hereby deliver to, and deposit with, the
Trustee, or
to and with one or more Custodians, as the duly appointed agent or
agents of the
Trustee for such purpose, the following documents or instruments
(or copies
thereof as permitted by this Section) with respect to each Mortgage
Loan so
assigned:
(i) The original Mortgage Note, endorsed without recourse to the
order
of the Trustee and showing an unbroken chain of endorsements from
the
originator thereof to
49
the Person endorsing it to the Trustee, or with respect to any
Destroyed
Mortgage Note, an original lost note affidavit from the related
Seller or
Residential Funding stating that the original Mortgage Note was
lost,
misplaced or destroyed, together with a copy of the related
Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a
MOM Loan
if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated
thereon or, if the original Mortgage has not yet been returned from
the
public recording office, a copy of the original Mortgage with
evidence of
recording indicated thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R) System,
the Assignment (which may be included in one or more blanket
assignments if
permitted by applicable law) of the Mortgage to the Trustee with
evidence
of recording indicated thereon or a copy of such assignment with
evidence
of recording indicated thereon;
(iv) The original recorded assignment or assignments of the
Mortgage
showing an unbroken chain of title from the originator to the
Person
assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered
on the MERS(R) System and noting the presence of a MIN) with
evidence of
recordation noted thereon or attached thereto, or a copy of such
assignment
or assignments of the Mortgage with evidence of recording indicated
thereon; and
(v) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Mortgage Loan,
or a copy
of each modification, assumption agreement or preferred loan
agreement.
The Depositor may, in lieu of delivering the original of the
documents set
forth in Section 2.01(b)(ii), (iii), (iv) and (v) (or copies
thereof as
permitted by Section 2.01(b)) to the Trustee or the Custodian,
deliver such
documents to the Master Servicer, and the Master Servicer shall
hold such
documents in trust for the use and benefit of all present and
future
Certificateholders until such time as is set forth in the next
sentence. Within
thirty Business Days following the earlier of (i) the receipt of
the original of
all of the documents or instruments set forth in Section
2.01(b)(ii), (iii),
(iv) and (v) (or copies thereof as permitted by such Section) for
any Mortgage
Loan and (ii) a written request by the Trustee to deliver those
documents with
respect to any or all of the Mortgage Loans then being held by the
Master
Servicer, the Master Servicer shall deliver a complete set of such
documents to
the Trustee or the Custodian that is the duly appointed agent of
the Trustee.
(c) Notwithstanding the provisions of Section 2.01(b), in the event
that in
connection with any Mortgage Loan, if the Depositor cannot deliver
the original
of the Mortgage, any assignment, modification, assumption agreement
or preferred
loan agreement (or copy thereof as permitted by Section 2.01(b))
with evidence
of recording thereon concurrently with the execution and delivery
of this
Agreement because of (i) a delay caused by the public recording
office where
such Mortgage, assignment, modification, assumption agreement or
preferred loan
agreement as the case may be, has been delivered for recordation,
or (ii) a
delay in the receipt of certain information necessary to prepare
the related
assignments, the Depositor shall deliver or
50
cause to be delivered to the Trustee or the respective Custodian a
copy of such
Mortgage, assignment, modification, assumption agreement or
preferred loan
agreement.
The Depositor shall promptly cause to be recorded in the
appropriate public
office for real property records the Assignment referred to in
clause (iii) of
Section 2.01(b), except (a) in states where, in the Opinion of
Counsel
acceptable to the Master Servicer, such recording is not required
to protect the
Trustee's interests in the Mortgage Loan or (b) if MERS is
identified on the
Mortgage or on a properly recorded assignment of the Mortgage as
the mortgagee
of record solely as nominee for Residential Funding and its
successors and
assigns. If any Assignment is lost or returned unrecorded to the
Depositor
because of any defect therein, the Depositor shall prepare a
substitute
Assignment or cure such defect, as the case may be, and cause such
Assignment to
be recorded in accordance with this paragraph. The Depositor shall
promptly
deliver or cause to be delivered to the Trustee or the respective
Custodian such
Mortgage or Assignment, as applicable (or copy thereof as permitted
by Section
2.01(b)), with evidence of recording indicated thereon upon receipt
thereof from
the public recording office or from the related Subservicer or
Seller.
If the Depositor delivers to the Trustee or Custodian any Mortgage
Note or
Assignment of Mortgage in blank, the Depositor shall, or shall
cause the
Custodian to, complete the endorsement of the Mortgage Note and the
Assignment
of Mortgage in the name of the Trustee in conjunction with the
Interim
Certification issued by the Custodian, as contemplated by Section
2.02.
Any of the items set forth in Sections 2.01(b)(ii), (iii), (iv) and
(v)
that may be delivered as a copy rather than the original may be
delivered to the
Trustee or the Custodian.
In connection with the assignment of any Mortgage Loan registered
on the
MERS(R) System, the Depositor further agrees that it will cause, at
the
Depositor's own expense, within 30 Business Days after the Closing
Date, the
MERS(R) System to indicate that such Mortgage Loans have been
assigned by the
Depositor to the Trustee in accordance with this Agreement for the
benefit of
the Certificateholders by including (or deleting, in the case of
Mortgage Loans
which are repurchased in accordance with this Agreement) in such
computer files
(a) the code in the field which identifies the specific Trustee and
(b) the code
in the field "Pool Field" which identifies the series of the
Certificates issued
in connection with such Mortgage Loans. The Depositor further
agrees that it
will not, and will not permit the Master Servicer to, and the
Master Servicer
agrees that it will not, alter the codes referenced in this
paragraph with
respect to any Mortgage Loan during the term of this Agreement
unless and until
such Mortgage Loan is repurchased in accordance with the terms of
this
Agreement.
(d) It is intended that the conveyances by the Depositor to the
Trustee of
the Mortgage Loans as provided for in this Section 2.01 be
construed as a sale
by the Depositor to the Trustee of the Mortgage Loans for the
benefit of the
Certificateholders. Further, it is not intended that any such
conveyance be
deemed to be a pledge of the Mortgage Loans by the Depositor to the
Trustee to
secure a debt or other obligation of the Depositor. However, in the
event that
the Mortgage Loans are held to be property of the Depositor or of
Residential
Funding, or if for any reason this Agreement is held or deemed to
create a
security interest in the Mortgage Loans, then it is intended that
(a) this
Agreement shall also be deemed to be a security
51
agreement within the meaning of Articles 8 and 9 of the New York
Uniform
Commercial Code and the Uniform Commercial Code of any other
applicable
jurisdiction; (b) the conveyances provided for in this Section 2.01
shall be
deemed to be (1) a grant by the Depositor to the Trustee of a
security interest
in all of the Depositor's right (including the power to convey
title thereto),
title and interest, whether now owned or hereafter acquired, in and
to (A) the
Mortgage Loans, including (a) the related Mortgage Note and
Mortgage, and (b)
any insurance policies and all other documents in the related
Mortgage File, (B)
all amounts payable pursuant to the Mortgage Loans or the Yield
Maintenance
Agreement in accordance with the terms thereof and (C) any and all
general
intangibles, payment intangibles, accounts, chattel paper,
instruments,
documents, money, deposit accounts, certificates of deposit, goods,
letters of
credit, advices of credit and investment property and other
property of whatever
kind or description now existing or hereafter acquired consisting
of, arising
from or relating to any of the foregoing, and all proceeds of the
conversion,
voluntary or involuntary, of the foregoing into cash, instruments,
securities or
other property, including without limitation all amounts from time
to time held
or invested in the Certificate Account or the Custodial Account,
whether in the
form of cash, instruments, securities or other property and (2) an
assignment by
the Depositor to the Trustee of any security interest in any and
all of
Residential Funding's right (including the power to convey title
thereto), title
and interest, whether now owned or hereafter acquired, in and to
the property
described in the foregoing clauses (1)(A), (B), (C) and (D) granted
by
Residential Funding to the Depositor pursuant to the Assignment
Agreement; (c)
the possession by the Trustee, the Custodian or any other agent of
the Trustee
of Mortgage Notes or such other items of property as they
constitute
instruments, money, payment intangibles, negotiable documents,
goods, deposit
accounts, letters of credit, advices of credit, investment
property,
certificated securities or chattel paper shall be deemed to be
"possession by
the secured party," or possession by a purchaser or a person
designated by such
secured party, for purposes of perfecting the security interest
pursuant to the
Uniform Commercial Code as in effect in the States of New York and
Minnesota and
any other applicable jurisdiction; and (d) notifications to persons
holding such
property, and acknowledgments, receipts or confirmations from
persons holding
such property, shall be deemed notifications to, or
acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents
of, or persons
holding for, (as applicable) the Trustee for the purpose of
perfecting such
security interest under applicable law.
The Depositor and, at the Depositor's direction, Residential
Funding and
the Trustee shall, to the extent consistent with this Agreement,
take such
reasonable actions as may be necessary to ensure that, if this
Agreement were
deemed to create a security interest in the Mortgage Loans and the
other
property described above, such security interest would be deemed to
be a
perfected security interest of first priority under applicable law
and will be
maintained as such throughout the term of this Agreement. Without
limiting the
generality of the foregoing, the Depositor shall prepare and
deliver to the
Trustee not less than 15 days prior to any filing date and, the
Trustee shall
forward for filing, or shall cause to be forwarded for filing, at
the expense of
the Depositor, all filings necessary to maintain the effectiveness
of any
original filings necessary under the Uniform Commercial Code as in
effect in any
jurisdiction to perfect the Trustee's security interest in or lien
on the
Mortgage Loans, as evidenced by an Officers' Certificate of the
Depositor,
including without limitation (x) continuation statements, and (y)
such other
statements as may be occasioned by (1) any change of name of
Residential
Funding, the Depositor or the Trustee (such preparation and filing
shall be at
the expense of the Trustee, if occasioned by a change in the
Trustee's name),
(2) any change of location of the place of
52
business or the chief executive office of Residential Funding or
the Depositor
or (3) any transfer of any interest of Residential Funding or the
Depositor in
any Mortgage Loan.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage
Loans
subject to a Custodial Agreement, and based solely upon a receipt
or
certification executed by the Custodian, receipt by the respective
Custodian as
the duly appointed agent of the Trustee) of the documents referred
to in Section
2.01(b)(i) above (except that for purposes of such acknowledgment
only, a
Mortgage Note may be endorsed in blank and an Assignment of
Mortgage may be in
blank) and declares that it, or a Custodian as its agent, holds and
will hold
such documents and the other documents constituting a part of the
Mortgage Files
delivered to it, or a Custodian as its agent, in trust for the use
and benefit
of all present and future Certificateholders. The Trustee or
Custodian (such
Custodian being so obligated under a Custodial Agreement) agrees,
for the
benefit of Certificateholders, to review each Mortgage File
delivered to it
pursuant to Section 2.01(b) within 45 days after the Closing Date
to ascertain
that all required documents (specifically as set forth in Section
2.01(b)), have
been executed and received, and that such documents relate to the
Mortgage Loans
identified on the Mortgage Loan Schedule, as supplemented, that
have been
conveyed to it, and to deliver to the Trustee a certificate (the
"Interim
Certification") to the effect that all documents required to be
delivered
pursuant to Section 2.01(b) above have been executed and received
and that such
documents relate to the Mortgage Loans identified on the Mortgage
Loan Schedule,
except for any exceptions listed on Schedule A attached to such
Interim
Certification. Upon delivery of the Mortgage Files by the Depositor
or the
Master Servicer, the Trustee shall acknowledge receipt (or, with
respect to
Mortgage Loans subject to a Custodial Agreement, and based solely
upon a receipt
or certification (the "Final Certification") executed by the
Custodian, receipt
by the respective Custodian as the duly appointed agent of the
Trustee) of the
documents referred to in Section 2.01(c) above.
If the Custodian, as the Trustee's agent, finds any document or
documents
constituting a part of a Mortgage File to be missing or defective,
the Trustee
shall promptly so notify the Master Servicer and the Depositor.
Pursuant to
Section 2.3 of the Custodial Agreement, the Custodian will notify
the Master
Servicer, the Depositor and the Trustee of any such omission or
defect found by
it in respect of any Mortgage File held by it in respect of the
items reviewed
by it pursuant to the Custodial Agreement. If such omission or
defect materially
and adversely affects the interests of the Certificateholders, the
Master
Servicer shall promptly notify Residential Funding of such omission
or defect
and request Residential Funding to correct or cure such omission or
defect
within 60 days from the date the Master Servicer was notified of
such omission
or defect and, if Residential Funding does not correct or cure such
omission or
defect within such period, require Residential Funding to purchase
such Mortgage
Loan from the Trust Fund at its Purchase Price, within 90 days from
the date the
Master Servicer was notified of such omission or defect; provided
that if the
omission or defect would cause the Mortgage Loan to be other than a
"qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such
cure or
repurchase must occur within 90 days from the date such breach was
discovered.
The Purchase Price for any such Mortgage Loan shall be deposited or
caused to be
deposited by the Master Servicer in the Custodial Account
maintained by it
pursuant to Section 3.07 and, upon receipt by the Trustee of
written
notification of such deposit signed by a Servicing Officer, the
Trustee or any
Custodian, as the case may be, shall release to Residential Funding
the related
Mortgage File
53
and the Trustee shall execute and deliver such instruments of
transfer or
assignment prepared by the Master Servicer, in each case without
recourse, as
shall be necessary to vest in Residential Funding or its designee
any Mortgage
Loan released pursuant hereto and thereafter such Mortgage Loan
shall not be
part of the Trust Fund. It is understood and agreed that the
obligation of
Residential Funding to so cure or purchase any Mortgage Loan as to
which a
material and adverse defect in or omission of a constituent
document exists
shall constitute the sole remedy respecting such defect or omission
available to
Certificateholders or the Trustee on behalf of the
Certificateholders.
Section 2.03. Representations, Warranties and Covenants of the
Master
Servicer and the Depositor.
(a) The Master Servicer hereby represents and warrants to the
Trustee for
the benefit of the Certificateholders that:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws governing its creation
and
existence and is or will be in compliance with the laws of each
state in
which any Mortgaged Property is located to the extent necessary to
ensure
the enforceability of each Mortgage Loan in accordance with the
terms of
this Agreement;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not violate the Master Servicer's Certificate of
Incorporation or Bylaws or constitute a material default (or an
event
which, with notice or lapse of time, or both, would constitute a
material
default) under, or result in the material breach of, any material
contract,
agreement or other instrument to which the Master Servicer is a
party or
which may be applicable to the Master Servicer or any of its
assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Depositor, constitutes a valid,
legal and
binding obligation of the Master Servicer, enforceable against it
in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general
principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any
order
or decree of any court or any order, regulation or demand of any
federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the
condition
(financial or other) or operations of the Master Servicer or its
properties
or might have consequences that would materially adversely affect
its
performance hereunder;
(v) No litigation is pending or, to the best of the Master
Servicer's
knowledge, threatened against the Master Servicer which would
prohibit its
entering into this Agreement or performing its obligations under
this
Agreement;
54
(vi) The Master Servicer shall comply in all material respects in
the
performance of this Agreement with all reasonable rules and
requirements of
each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement
furnished
in writing or report delivered to the Depositor, any Affiliate of
the
Depositor or the Trustee by the Master Servicer will, to the
knowledge of
the Master Servicer, contain any untrue statement of a material
fact or
omit a material fact necessary to make the information,
certificate,
statement or report not misleading;
(viii) The Master Servicer has examined each existing, and will
examine each new, Subservicing Agreement and is or will be familiar
with
the terms thereof. The terms of each existing Subservicing
Agreement and
each designated Subservicer are acceptable to the Master Servicer
and any
new Subservicing Agreements will comply with the provisions of
Section
3.02; and
(ix) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures
of MERS
in connection with the servicing of the Mortgage Loans that are
registered
with MERS.
It is understood and agreed that the representations and warranties
set
forth in this Section 2.03(a) shall survive delivery of the
respective Mortgage
Files to the Trustee or any Custodian. Upon discovery by either the
Depositor,
the Master Servicer, the Trustee or any Custodian of a breach of
any
representation or warranty set forth in this Section 2.03(a) which
materially
and adversely affects the interests of the Certificateholders in
any Mortgage
Loan, the party discovering such breach shall give prompt written
notice to the
other parties (any Custodian being so obligated under a Custodial
Agreement).
Within 90 days of its discovery or its receipt of notice of such
breach, the
Master Servicer shall either (i) cure such breach in all material
respects or
(ii) to the extent that such breach is with respect to a Mortgage
Loan or a
related document, purchase such Mortgage Loan from the Trust Fund
at the
Purchase Price and in the manner set forth in Section 2.02;
provided that if the
breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as
defined in Section 860G(a)(3) of the Code, any such cure or
repurchase must
occur within 90 days from the date such breach was discovered. The
obligation of
the Master Servicer to cure such breach or to so purchase such
Mortgage Loan
shall constitute the sole remedy in respect of a breach of a
representation and
warranty set forth in this Section 2.03(a) available to the
Certificateholders
or the Trustee on behalf of the Certificateholders.
(b) The Depositor hereby represents and warrants to the Trustee for
the
benefit of the Certificateholders that as of the Closing Date (or,
if otherwise
specified below, as of the date so specified): (i) the information
set forth in
Exhibit G hereto with respect to each Mortgage Loan or the Mortgage
Loans, as
the case may be, is true and correct in all material respects at
the respective
date or dates which such information is furnished; (ii) immediately
prior to the
conveyance of the Mortgage Loans to the Trustee, the Depositor had
good title
to, and was the sole owner of, each Mortgage Loan free and clear of
any pledge,
lien, encumbrance or security interest (other than rights to
servicing and
related compensation) and such conveyance validly transfers
ownership of the
Mortgage Loans to the Trustee free and clear of any pledge, lien,
55
encumbrance or security interest; and (iii) each Mortgage Loan
constitutes a
qualified mortgage under Section 860G(a)(3)(A) of the Code and
Treasury
Regulations Section 1.860G-2(a)(1).
It is understood and agreed that the representations and warranties
set
forth in this Section 2.03(b) shall survive delivery of the
respective Mortgage
Files to the Trustee or any Custodian.
Upon discovery by any of the Depositor, the Master Servicer, the
Trustee or
any Custodian of a breach of any of the representations and
warranties set forth
in this Section 2.03(b) which materially and adversely affects the
interests of
the Certificateholders in any Mortgage Loan, the party discovering
such breach
shall give prompt written notice to the other parties (any
Custodian being so
obligated under a Custodial Agreement); provided, however, that in
the event of
a breach of the representation and warranty set forth in Section
2.03(b)(iii),
the party discovering such breach shall give such notice within
five days of
discovery. Within 90 days of its discovery or its receipt of notice
of breach,
the Depositor shall either (i) cure such breach in all material
respects or (ii)
purchase such Mortgage Loan from the Trust Fund at the Purchase
Price and in the
manner set forth in Section 2.02; provided that the Depositor shall
have the
option to substitute a Qualified Substitute Mortgage Loan or Loans
for such
Mortgage Loan if such substitution occurs within two years
following the Closing
Date; provided that if the omission or defect would cause the
Mortgage Loan to
be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the
Code, any such cure, substitution or repurchase must occur within
90 days from
the date such breach was discovered. Any such substitution shall be
effected by
the Depositor under the same terms and conditions as provided in
Section 2.04
for substitutions by Residential Funding. It is understood and
agreed that the
obligation of the Depositor to cure such breach or to so purchase
or substitute
for any Mortgage Loan as to which such a breach has occurred and is
continuing
shall constitute the sole remedy respecting such breach available
to the
Certificateholders or the Trustee on behalf of the
Certificateholders.
Section 2.04. Representations and Warranties of Residential
Funding.
The Depositor, as assignee of Residential Funding under the
Assignment
Agreement, hereby assigns to the Trustee for the benefit of the
Certificateholders all of its right, title and interest in respect
of the
Assignment Agreement applicable to a Mortgage Loan. Insofar as the
Assignment
Agreement relates to the representations and warranties made by
Residential
Funding in respect of such Mortgage Loan and any remedies provided
thereunder
for any breach of such representations and warranties, such right,
title and
interest may be enforced by the Master Servicer on behalf of the
Trustee and the
Certificateholders.
Upon the discovery by the Depositor, the Master Servicer, the
Trustee or
any Custodian of a breach of any of the representations and
warranties made in
the Assignment Agreement in respect of any Mortgage Loan or of any
Repurchase
Event which materially and adversely affects the interests of the
Certificateholders in such Mortgage Loan, the party discovering
such breach
shall give prompt written notice to the other parties (any
Custodian being so
obligated under a Custodial Agreement). The Master Servicer shall
promptly
notify Residential Funding of such breach or Repurchase Event and
request that
Residential Funding either (i) cure such breach or Repurchase Event
in all
material respects within 90 days from the date the Master Servicer
was notified
of such breach or Repurchase Event or (ii) purchase such Mortgage
Loan from the
Trust Fund at the Purchase Price and in the manner set forth in
Section 2.02;
provided that,
56
Residential Funding shall have the option to substitute a Qualified
Substitute
Mortgage Loan or Loans for such Mortgage Loan if such substitution
occurs within
two years following the Closing Date; provided that if the breach
would cause
the Mortgage Loan to be other than a "qualified mortgage" as
defined in Section
860G(a)(3) of the Code, any such cure or substitution must occur
within 90 days
from the date the breach was discovered. If the breach of
representation and
warranty that gave rise to the obligation to repurchase or
substitute a Mortgage
Loan pursuant to Section 4 of the Assignment Agreement was the
representation
and warranty set forth in clause (bb) of Section 4 thereof, then
the Master
Servicer shall request that Residential Funding pay to the Trust
Fund,
concurrently with and in addition to the remedies provided in the
preceding
sentence, an amount equal to any liability, penalty or expense that
was actually
incurred and paid out of or on behalf of the Trust Fund, and that
directly
resulted from such breach, or if incurred and paid by the Trust
Fund thereafter,
concurrently with such payment. In the event that Residential
Funding elects to
substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage
Loan pursuant to this Section 2.04, Residential Funding shall
deliver to the
Trustee for the benefit of the Certificateholders with respect to
such Qualified
Substitute Mortgage Loan or Loans, the original Mortgage Note, the
Mortgage, an
Assignment of the Mortgage in recordable form, and such other
documents and
agreements as are required by Section 2.01, with the Mortgage Note
endorsed as
required by Section 2.01. No substitution will be made in any
calendar month
after the Determination Date for such month. Monthly Payments due
with respect
to Qualified Substitute Mortgage Loans in the month of substitution
shall not be
part of the Trust Fund and will be retained by the Master Servicer
and remitted
by the Master Servicer to Residential Funding on the next
succeeding
Distribution Date. For the month of substitution, distributions to
the
Certificateholders will include the Monthly Payment due on a
Deleted Mortgage
Loan for such month and thereafter Residential Funding shall be
entitled to
retain all amounts received in respect of such Deleted Mortgage
Loan. The Master
Servicer shall amend or cause to be amended the Mortgage Loan
Schedule for the
benefit of the Certificateholders to reflect the removal of such
Deleted
Mortgage Loan and the substitution of the Qualified Substitute
Mortgage Loan or
Loans and the Master Servicer shall deliver the amended Mortgage
Loan Schedule
to the Trustee and the Custodian. Upon such substitution, the
Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of
this
Agreement and the related Subservicing Agreement in all respects,
and
Residential Funding shall be deemed to have made the
representations and
warranties with respect to the Qualified Substitute Mortgage Loan
contained in
Section 4 of the Assignment Agreement, as of the date of
substitution, and the
covenants, representations and warranties set forth in this Section
2.04, and in
Section 2.03 hereof and in Section 4 of the Assignment Agreement,
and the Master
Servicer shall be obligated to repurchase or substitute for any
Qualified
Substitute Mortgage Loan as to which a Repurchase Event (as defined
in the
Assignment Agreement) has occurred pursuant to Section 4 of the
Assignment
Agreement.
In connection with the substitution of one or more Qualified
Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer shall
determine the amount (if any) by which the aggregate principal
balance of all
such Qualified Substitute Mortgage Loans as of the date of
substitution is less
than the aggregate Stated Principal Balance of all such Deleted
Mortgage Loans
(in each case after application of the principal portion of the
Monthly Payments
due in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). Residential
Funding shall
deposit the amount of such shortfall into the Custodial Account on
the day of
substitution, without any reimbursement therefor. Residential
57
Funding shall give notice in writing to the Trustee of such event,
which notice
shall be accompanied by an Officers' Certificate as to the
calculation of such
shortfall and (subject to Section 10.01(f)) by an Opinion of
Counsel to the
effect that such substitution will not cause (a) any federal tax to
be imposed
on the Trust Fund, including without limitation, any federal tax
imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or
on
"contributions after the startup date" under Section 860G(d)(1) of
the Code or
(b) any portion of any REMIC created hereunder to fail to qualify
as a REMIC at
any time that any Certificate is outstanding.
It is understood and agreed that the obligation of Residential
Funding to
cure such breach or purchase (or in the case of Residential Funding
to
substitute for) such Mortgage Loan as to which such a breach has
occurred and is
continuing and to make any additional payments required under the
Assignment
Agreement in connection with a breach of the representation and
warranty in
clause (bb) of Section 4 thereof shall constitute the sole remedy
respecting
such breach available to the Certificateholders or the Trustee on
behalf of the
Certificateholders. If the Master Servicer is Residential Funding,
then the
Trustee shall also have the right to give the notification and
require the
purchase or substitution provided for in the second preceding
paragraph in the
event of such a breach of a representation or warranty made by
Residential
Funding in the Assignment Agreement. In connection with the
purchase of or
substitution for any such Mortgage Loan by Residential Funding, the
Trustee
shall assign to Residential Funding all of the right, title and
interest in
respect of the Assignment Agreement applicable to such Mortgage
Loan.
Section 2.05. Execution and Authentication of Certificates;
Conveyance of
REMIC Regular Interests.
(a) The Trustee acknowledges the assignment to it of the Mortgage
Loans and
the delivery of the Mortgage Files to it, or any Custodian on its
behalf,
subject to any exceptions noted, together with the assignment to it
of all other
assets included in the Trust Fund, receipt of which is hereby
acknowledged.
Concurrently with such delivery and in exchange therefor, the
Trustee, pursuant
to the written request of the Depositor executed by an officer of
the Depositor,
has executed and caused to be authenticated and delivered to or
upon the order
of the Depositor the Certificates in authorized denominations which
evidence
ownership of the entire Trust Fund.
(b) The Depositor concurrently with the execution and delivery
hereof, does
hereby transfer, assign, set over and otherwise convey in trust to
the Trustee
without recourse all the right, title and interest of the Depositor
in and to
the REMIC I Regular Interests, for the benefit of the holders of
the REMIC II
Regular Interests and the Class R-II Certificates. The Trustee
acknowledges
receipt of the REMIC I Regular Interests (each of which are
uncertificated) and
declares that it holds and will hold the same in trust for the
exclusive use and
benefit of the holders of the REMIC II Regular Interests and the
Class R-II
Certificates. The interests evidenced by the Class R-II
Certificates, together
with the REMIC II Regular Interests, constitute the entire
beneficial ownership
interest in REMIC II.
Section 2.06. Purposes and Powers of the Trust.
The purpose of the trust, as created hereunder, is to engage in the
following activities:
58
(a) To sell the Certificates to the Depositor in exchange for the
Mortgage
Loans;
(b) To enter into and perform its obligations under this Agreement
and the
Yield Maintenance Agreement;
(c) To engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental hereto or
connected
therewith; and
(d) Subject to compliance with this Agreement, to engage in such
other
activities as may be required in connection with conservation of
the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing
activities.
Notwithstanding the provisions of Section 11.01, the trust shall
not engage in
any activity other than in connection with the foregoing or other
than as
required or authorized by the terms of this Agreement while any
Certificate is
outstanding, and this Section 2.06 may not be amended, without the
consent of
the Certificateholders evidencing a majority of the aggregate
Voting Rights of
the Certificates.
Section 2.07. Agreement Regarding Ability to Disclose.
The Depositor, the Master Servicer and the Trustee hereby agree,
notwithstanding any other express or implied agreement to the
contrary, that any
and all Persons, and any of their respective employees,
representatives, and
other agents may disclose, immediately upon commencement of
discussions, to any
and all Persons, without limitation of any kind, the tax treatment
and tax
structure of the transaction and all materials of any kind
(including opinions
or other tax analyses) that are provided to any of them relating to
such tax
treatment and tax structure. For purposes of this paragraph, the
terms "tax
treatment" and "tax structure" are defined under Treasury
Regulation ss.
1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the Mortgage
Loans in
accordance with the terms of this Agreement and the respective
Mortgage Loans,
following such procedures as it would employ in its good faith
business judgment
and which are normal and usual in its general mortgage servicing
activities, and
shall have full power and authority, acting alone or through
Subservicers as
provided in Section 3.02, to do any and all things which it may
deem necessary
or desirable in connection with such servicing and administration.
Without
limiting the generality of the foregoing, the Master Servicer in
its own name or
in the name of a Subservicer is hereby authorized and empowered by
the Trustee
when the Master Servicer or the Subservicer, as the case may be,
believes it
appropriate in its best judgment, to execute and deliver, on behalf
of the
Certificateholders and the Trustee or any of them, any and all
instruments of
satisfaction or cancellation, or of partial or full release or
discharge, or of
consent to assumption or modification in connection with a proposed
conveyance,
or of assignment of any Mortgage and Mortgage Note in connection
with the
repurchase of a Mortgage Loan and all other comparable instruments,
or with
respect to the modification or re-recording of a Mortgage
59
for the purpose of correcting the Mortgage, the subordination of
the lien of the
Mortgage in favor of a public utility company or government agency
or unit with
powers of eminent domain, the taking of a deed in lieu of
foreclosure, the
commencement, prosecution or completion of judicial or non-judicial
foreclosure,
the conveyance of a Mortgaged Property to the related insurer, the
acquisition
of any property acquired by foreclosure or deed in lieu of
foreclosure, or the
management, marketing and conveyance of any property acquired by
foreclosure or
deed in lieu of foreclosure with respect to the Mortgage Loans and
with respect
to the Mortgaged Properties. The Master Servicer further is
authorized and
empowered by the Trustee, on behalf of the Certificateholders and
the Trustee,
in its own name or in the name of the Subservicer, when the Master
Servicer or
the Subservicer, as the case may be, believes it is appropriate in
its best
judgment to register any Mortgage Loan on the MERS(R) System, or
cause the
removal from the registration of any Mortgage Loan on the MERS(R)
System, to
execute and deliver, on behalf of the Trustee and the
Certificateholders or any
of them, any and all instruments of assignment and other comparable
instruments
with respect to such assignment or re-recording of a Mortgage in
the name of
MERS, solely as nominee for the Trustee and its successors and
assigns. Any
expenses incurred in connection with the actions described in the
preceding
sentence shall be borne by the Master Servicer in accordance with
Section
3.16(c), with no right of reimbursement; provided, that if, as a
result of MERS
discontinuing or becoming unable to continue operations in
connection with the
MERS(R) System, it becomes necessary to remove any Mortgage Loan
from
registration on the MERS(R) System and to arrange for the
assignment of the
related Mortgages to the Trustee, then any related expenses shall
be
reimbursable to the Master Servicer as set forth in Section
3.10(a)(ii).
Notwithstanding the foregoing, subject to Section 3.07(a), the
Master Servicer
shall not permit any modification with respect to any Mortgage Loan
that would
both constitute a sale or exchange of such Mortgage Loan within the
meaning of
Section 1001 of the Code and any proposed, temporary or final
regulations
promulgated thereunder (other than in connection with a proposed
conveyance or
assumption of such Mortgage Loan that is treated as a Principal
Prepayment in
Full pursuant to Section 3.13(d) hereof) and cause any REMIC
created hereunder
to fail to qualify as a REMIC under the Code. The Trustee shall
furnish the
Master Servicer with any powers of attorney and other documents
necessary or
appropriate to enable the Master Servicer to service and administer
the Mortgage
Loans. The Trustee shall not be liable for any action taken by the
Master
Servicer or any Subservicer pursuant to such powers of attorney or
other
documents. In servicing and administering any Nonsubserviced
Mortgage Loan, the
Master Servicer shall, to the extent not inconsistent with this
Agreement,
comply with the Program Guide as if it were the originator of such
Mortgage Loan
and had retained the servicing rights and obligations in respect
thereof.
If the Mortgage relating to a Mortgage Loan did not have a lien
senior to
the Mortgage Loan on the related Mortgaged Property as of the
Cut-off Date, then
the Master Servicer, in such capacity, may not consent to the
placing of a lien
senior to that of the Mortgage on the related Mortgaged Property.
If the
Mortgage relating to a Mortgage Loan had a lien senior to the
Mortgage Loan on
the related Mortgaged Property as of the Cut-off Date, then the
Master Servicer,
in such capacity, may consent to the refinancing of the prior
senior lien,
provided that the following requirements are met:
(i) (A) the Mortgagor's debt-to-income ratio resulting from such
refinancing is less than the original debt-to-income ratio as set
forth on the
Mortgage Loan
60
Schedule; provided, however, that in no instance shall the
resulting
Loan-to-Value Ratio of such Mortgage Loan be higher than that
permitted by the
Program Guide; or
(B) the resulting Loan-to-Value Ratio of such
Mortgage Loan is no higher than the Loan-to-Value Ratio prior to
such
refinancing; provided, however, if such refinanced mortgage loan is
a "rate and
term" mortgage loan (meaning, the Mortgagor does not receive any
cash from the
refinancing), the Loan-to-Value Ratio may increase to the extent of
either (x)
the reasonable closing costs of such refinancing or (y) any
decrease in the
value of the related Mortgaged Property, if the Mortgagor is in
good standing as
defined by the Program Guide;
(ii) the interest rate, or, in the case of an adjustable rate
existing senior lien, the maximum interest rate, for the loan
evidencing the
refinanced senior lien is no more than 2.0% higher than the
interest rate or the
maximum interest rate, as the case may be, on the loan evidencing
the existing
senior lien immediately prior to the date of such refinancing;
provided, however
(A) if the loan evidencing the existing senior lien prior to the
date of
refinancing has an adjustable rate and the loan evidencing the
refinanced senior
lien has a fixed rate, then the current interest rate on the loan
evidencing the
refinanced senior lien may be up to 2.0% higher than the
then-current loan rate
of the loan evidencing the existing senior lien and (B) if the loan
evidencing
the existing senior lien prior to the date of refinancing has a
fixed rate and
the loan evidencing the refinanced senior lien has an adjustable
rate, then the
maximum interest rate on the loan evidencing the refinanced senior
lien shall be
less than or equal to (x) the interest rate on the loan evidencing
the existing
senior lien prior to the date of refinancing plus (y) 2.0%; and
(iii) the loan evidencing the refinanced senior lien is not
subject to negative amortization.
(b) The Master Servicer shall, to the extent consistent with the
servicing
standards set forth herein, take whatever actions as may be
necessary to file a
claim under or enforce or allow the Trustee to file a claim under
or enforce any
title insurance policy with respect to any Mortgage Loan including,
without
limitation, joining in or causing any Subservicer (or any other
party in
possession of any title insurance policy) to join in any claims
process,
negotiations, actions or proceedings necessary to make a claim
under or enforce
any title insurance policy. Notwithstanding anything in this
Agreement to the
contrary, the Master Servicer shall not (unless the Mortgagor is in
default with
respect to the Mortgage Loan or such default is, in the judgment of
the Master
Servicer, reasonably foreseeable) make or permit any modification,
waiver, or
amendment of any term of any Mortgage Loan that would both (i)
effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of
the Code (or
final, temporary or proposed Treasury regulations promulgated
thereunder) (other
than in connection with a proposed conveyance or assumption of such
Mortgage
Loan that is treated as a Principal Prepayment in Full pursuant to
Section
3.13(d) hereof) and cause any REMIC created hereunder to fail to
qualify as a
REMIC under the Code or the imposition of any tax on "prohibited
transactions"
or "contributions" after the startup date under the REMIC
Provisions.
(c) In connection with servicing and administering the Mortgage
Loans, the
Master Servicer and any Affiliate of the Master Servicer (i) may
perform
services such as appraisals and brokerage services that are
customarily provided
by Persons other than servicers of mortgage
61
loans, and shall be entitled to reasonable compensation therefor in
accordance
with Section 3.10 and (ii) may, at its own discretion and on behalf
of the
Trustee, obtain credit information in the form of a "credit score"
from a credit
repository.
(d) All costs incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on the
properties subject
to the Mortgage Loans shall not, for the purpose of calculating
monthly
distributions to the Certificateholders, be added to the amount
owing under the
related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loan so
permit, and such costs shall be recoverable to the extent permitted
by Section
3.10(a)(ii).
(e) The Master Servicer may enter into one or more agreements in
connection
with the offering of pass-through certificates evidencing interests
in one or
more of the Certificates providing for the payment by the Master
Servicer of
amounts received by the Master Servicer as servicing compensation
hereunder and
required to cover certain Prepayment Interest Shortfalls on the
Mortgage Loans,
which payment obligation will thereafter be an obligation of the
Master Servicer
hereunder.
(f) The relationship of the Master Servicer (and of any successor
to the
Master Servicer) to the Depositor under this Agreement is intended
by the
parties to be that of an independent contractor and not that of a
joint
venturer, partner or agent.
Section 3.02. Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' Obligations.
(a) The Master Servicer may continue in effect Subservicing
Agreements
entered into by Residential Funding and Subservicers prior to the
execution and
delivery of this Agreement, and may enter into new Subservicing
Agreements with
Subservicers, for the servicing and administration of all or some
of the
Mortgage Loans. Each Subservicer shall be either (i) an institution
the accounts
of which are insured by the FDIC or (ii) another entity that
engages in the
business of originating or servicing mortgage loans, and in either
case shall be
authorized to transact business in the state or states in which the
related
Mortgaged Properties it is to service are situated, if and to the
extent
required by applicable law to enable the Subservicer to perform its
obligations
hereunder and under the Subservicing Agreement, and in either case
shall be a
Freddie Mac, Fannie Mae or HUD approved mortgage servicer. In
addition, any
Subservicer of a Mortgage Loan insured by the FHA must be an
FHA-approved
servicer, and any Subservicer of a Mortgage Loan guaranteed by the
VA must be a
VA-approved servicer. Each Subservicer of a Mortgage Loan shall be
entitled to
receive and retain, as provided in the related Subservicing
Agreement and in
Section 3.07, the related Subservicing Fee from payments of
interest received on
such Mortgage Loan after payment of all amounts required to be
remitted to the
Master Servicer in respect of such Mortgage Loan. For any Mortgage
Loan that is
a Nonsubserviced Mortgage Loan, the Master Servicer shall be
entitled to receive
and retain an amount equal to the Subservicing Fee from payments of
interest.
Unless the context otherwise requires, references in this Agreement
to actions
taken or to be taken by the Master Servicer in servicing the
Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of
the Master
Servicer. Each Subservicing Agreement will be upon such terms and
conditions as
are generally required by, permitted by or consistent with the
Program Guide and
are not inconsistent with this
62
Agreement and as the Master Servicer and the Subservicer have
agreed. With the
approval of the Master Servicer, a Subservicer may delegate its
servicing
obligations to third-party servicers, but such Subservicer will
remain obligated
under the related Subservicing Agreement. The Master Servicer and a
Subservicer
may enter into amendments thereto or a different form of
Subservicing Agreement,
and the form referred to or included in the Program Guide is merely
provided for
information and shall not be deemed to limit in any respect the
discretion of
the Master Servicer to modify or enter into different Subservicing
Agreements;
provided, however, that any such amendments or different forms
shall be
consistent with and not violate the provisions of either this
Agreement or the
Program Guide in a manner which would materially and adversely
affect the
interests of the Certificateholders. The Program Guide and any
other
Subservicing Agreement entered into between the Master Servicer and
any
Subservicer shall require the Subservicer to accurately and fully
report its
borrower credit files to each of the Credit Repositories in a
timely manner.
(b) As part of its servicing activities hereunder, the Master
Servicer, for
the benefit of the Trustee and the Certificateholders, shall use
its best
reasonable efforts to enforce the obligations of each Subservicer
under the
related Subservicing Agreement, to the extent that the
non-performance of any
such obligation would have a material and adverse effect on a
Mortgage Loan,
including, without limitation, the obligation to purchase a
Mortgage Loan on
account of defective documentation, as described in Section 2.02,
or on account
of a breach of a representation or warranty, as described in
Section 2.04. Such
enforcement, including, without limitation, the legal prosecution
of claims,
termination of Subservicing Agreements, as appropriate, and the
pursuit of other
appropriate remedies, shall be in such form and carried out to such
an extent
and at such time as the Master Servicer would employ in its good
faith business
judgment and which are normal and usual in its general mortgage
servicing
activities. The Master Servicer shall pay the costs of such
enforcement at its
own expense, and shall be reimbursed therefor only (i) from a
general recovery
resulting from such enforcement to the extent, if any, that such
recovery
exceeds all amounts due in respect of the related Mortgage Loan or
(ii) from a
specific recovery of costs, expenses or attorneys' fees against the
party
against whom such enforcement is directed. For purposes of
clarification only,
the parties agree that the foregoing is not intended to, and does
not, limit the
ability of the Master Servicer to be reimbursed for expenses that
are incurred
in connection with the enforcement of a Seller's obligations and
are
reimbursable pursuant to Section 3.10(a)(vii).
Section 3.03. Successor Subservicers.
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and
conditions of such
Subservicing Agreement and without any limitation by virtue of this
Agreement;
provided, however, that in the event of termination of any
Subservicing
Agreement by the Master Servicer or the Subservicer, the Master
Servicer shall
either act as servicer of the related Mortgage Loan or enter into a
Subservicing
Agreement with a successor Subservicer which will be bound by the
terms of the
related Subservicing Agreement. If the Master Servicer or any
Affiliate of
Residential Funding acts as servicer, it will not assume liability
for the
representations and warranties of the Subservicer which it
replaces. If the
Master Servicer enters into a Subservicing Agreement with a
successor
Subservicer, the Master Servicer shall use reasonable efforts to
have the
successor Subservicer assume liability for the representations and
warranties
made by the terminated Subservicer in respect of the related
63
Mortgage Loans and, in the event of any such assumption by the
successor
Subservicer, the Master Servicer may, in the exercise of its
business judgment,
release the terminated Subservicer from liability for such
representations and
warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions
of this
Agreement relating to agreements or arrangements between the Master
Servicer or
a Subservicer or reference to actions taken through a Subservicer
or otherwise,
the Master Servicer shall remain obligated and liable to the
Trustee and
Certificateholders for the servicing and administering of the
Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution
of such
obligation or liability by virtue of such Subservicing Agreements
or
arrangements or by virtue of indemnification from the Subservicer
or the
Depositor and to the same extent and under the same terms and
conditions as if
the Master Servicer alone were servicing and administering the
Mortgage Loans.
The Master Servicer shall be entitled to enter into any agreement
with a
Subservicer for indemnification of the Master Servicer and nothing
contained in
this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05. No Contractual Relationship Between Subservicer and
Trustee
or Certificateholders.
Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a
Subservicer
in its capacity as such and not as an originator shall be deemed to
be between
the Subservicer and the Master Servicer alone and the Trustee and
Certificateholders shall not be deemed parties thereto and shall
have no claims,
rights, obligations, duties or liabilities with respect to the
Subservicer in
its capacity as such except as set forth in Section 3.06. The
foregoing
provision shall not in any way limit a Subservicer's obligation to
cure an
omission or defect or to repurchase a Mortgage Loan as referred to
in Section
2.02 hereof.
Section 3.06. Assumption or Termination of Subservicing Agreements
by
Trustee.
(a) In the event the Master Servicer shall for any reason no longer
be the
master servicer (including by reason of an Event of Default), the
Trustee, as
successor Master Servicer, its designee or its successor shall
thereupon assume
all of the rights and obligations of the Master Servicer under each
Subservicing
Agreement that may have been entered into. The Trustee, its
designee or the
successor servicer for the Trustee shall be deemed to have assumed
all of the
Master Servicer's interest therein and to have replaced the Master
Servicer as a
party to the Subservicing Agreement to the same extent as if the
Subservicing
Agreement had been assigned to the assuming party except that the
Master
Servicer shall not thereby be relieved of any liability or
obligations under the
Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but at
the
expense of the Master Servicer, deliver to the assuming party all
documents and
records relating to each Subservicing Agreement and the Mortgage
Loans then
being serviced and an accounting of amounts collected and held by
it and
otherwise use its best efforts to effect the orderly and efficient
transfer of
each Subservicing Agreement to the assuming party.
64
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to
Custodial Account.
(a) The Master Servicer shall make reasonable efforts to collect
all
payments called for under the terms and provisions of the Mortgage
Loans, and
shall, to the extent such procedures shall be consistent with this
Agreement and
the terms and provisions of any related Primary Insurance Policy,
follow such
collection procedures as it would employ in its good faith business
judgment and
which are normal and usual in its general mortgage servicing
activities.
Consistent with the foregoing, the Master Servicer may in its
discretion
(subject to the terms and conditions of the Assignment Agreement)
(i) waive any
late payment charge or any prepayment charge or penalty interest in
connection
with the prepayment of a Mortgage Loan and (ii) extend the Due Date
for payments
due on a Mortgage Loan in accordance with the Program Guide,
provided, however,
that the Master Servicer shall first determine that any such waiver
or extension
will not impair the coverage of any related Primary Insurance
Policy or
materially adversely affect the lien of the related Mortgage.
Notwithstanding
anything in this Section to the contrary, the Master Servicer or
any Subservicer
shall not enforce any prepayment charge to the extent that such
enforcement
would violate any applicable law. In the event of any such
arrangement, the
Master Servicer shall make timely advances on the related Mortgage
Loan during
the scheduled period in accordance with the amortization schedule
of such
Mortgage Loan without modification thereof by reason of such
arrangements unless
otherwise agreed to by the Holders of the Classes of Certificates
affected
thereby; provided, however, that no such extension shall be made if
any advance
would be a Nonrecoverable Advance. Consistent with the terms of
this Agreement,
the Master Servicer may also waive, modify or vary any term of any
Mortgage Loan
or consent to the postponement of strict compliance with any such
term or in any
manner grant indulgence to any Mortgagor if in the Master
Servicer's
determination such waiver, modification, postponement or indulgence
is not
materially adverse to the interests of the Certificateholders
(taking into
account any estimated Realized Loss that might result absent such
action),
provided, however, that the Master Servicer may not modify
materially or permit
any Subservicer to modify any Mortgage Loan, including without
limitation any
modification that would change the Mortgage Rate, forgive the
payment of any
principal or interest (unless in connection with the liquidation of
the related
Mortgage Loan or except in connection with prepayments to the
extent that such
reamortization is not inconsistent with the terms of the Mortgage
Loan),
capitalize any amounts owing on the Mortgage Loan by adding such
amount to the
outstanding principal balance of the Mortgage Loan, or extend the
final maturity
date of such Mortgage Loan, unless such Mortgage Loan is in default
or, in the
judgment of the Master Servicer, such default is reasonably
foreseeable. For
purposes of delinquency calculations, any capitalized Mortgage Loan
shall be
deemed to be current as of the date of the related Servicing
Modification. No
such modification shall reduce the Mortgage Rate (i) with respect
to a fixed
rate Mortgage Loan, (A) below one-half of the Mortgage Rate as in
effect on the
Cut-off Date or (B) below the sum of the rates at which the
Servicing Fee and
the Subservicing Fee with respect to such Mortgage Loan accrue or
(ii) with
respect to an adjustable rate Mortgage Loan, (A) below the greater
of (1)
one-half of the Mortgage Rate as in effect on the Cut-off Date and
(2) one-half
of the Mortgage Rate as in effect on the date of the Servicing
Modification or
(B) below the sum of the rates at which the Servicing Fee and the
Subservicing
Fee with respect to such Mortgage Loan accrue. The final maturity
date for any
Mortgage Loan shall not be extended beyond the Maturity Date. Also,
the Stated
Principal Balance of all Reportable Modified Mortgage Loans subject
to Servicing
Modifications (measured at the time of the Servicing
65
Modification and after giving effect to any Servicing Modification)
can be no
more than five percent of the aggregate Cut-off Date Principal
Balance of the
Mortgage Loans, unless such limit is increased from time to time
with the
consent of the Rating Agencies. In addition, any amounts owing on a
Mortgage
Loan added to the outstanding principal balance of such Mortgage
Loan must be
fully amortized over the term of such Mortgage Loan, and such
amounts may be
added to the outstanding principal balance of a Mortgage Loan only
once during
the life of such Mortgage Loan. Also, the addition of such amounts
described in
the preceding sentence shall be implemented in accordance with the
Program Guide
and may be implemented only by Subservicers that have been approved
by the
Master Servicer for such purposes. In connection with any
Curtailment of a
Mortgage Loan, the Master Servicer, to the extent not inconsistent
with the
terms of the Mortgage Note and local law and practice, may permit
the Mortgage
Loan to be re-amortized such that the Monthly Payment is
recalculated as an
amount that will fully amortize the remaining Stated Principal
Balance thereof
by the original Maturity Date based on the original Mortgage Rate;
provided,
that such reamortization shall not be permitted if it would
constitute a
reissuance of the Mortgage Loan for federal income tax purposes.
(b) The Master Servicer shall establish and maintain a Custodial
Account in
which the Master Servicer shall deposit or cause to be deposited on
a daily
basis, except as otherwise specifically provided herein, the
following payments
and collections remitted by Subservicers or received by it in
respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in
respect of Monthly
Payments due before or in the month of the Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the
principal
component of any Subservicer Advance or of any REO Proceeds
received in
connection with an REO Property for which an REO Disposition has
occurred;
(ii) All payments on account of interest at the Adjusted Mortgage
Rate
on the Mortgage Loans, including the interest component of any
Subservicer
Advance or of any REO Proceeds received in connection with an REO
Property
for which an REO Disposition has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds (net of any related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to
Section
2.02, 2.03, 2.04, 4.07, 4.08 or 9.01 (including amounts received
from
Residential Funding pursuant to the last paragraph of Section 4 of
the
Assignment Agreement in respect of any liability, penalty or
expense that
resulted from a breach of the representation and warranty set forth
in
clause (bb) of Section 4 of the Assignment Agreement) and all
amounts
required to be deposited in connection with the substitution of a
Qualified
Substitute Mortgage Loan pursuant to Section 2.03 or 2.04; and
(v) Any amounts required to be deposited pursuant to Section
3.07(c)
and any payments or collections received in the nature of
prepayment
charges.
66
The foregoing requirements for deposit in the Custodial Account
shall be
exclusive, it being understood and agreed that, without limiting
the generality
of the foregoing, payments on the Mortgage Loans which are not part
of the Trust
Fund (consisting of Monthly Payments due before or in the month of
the Cut-off
Date) and payments or collections consisting of late payment
charges or
assumption fees may but need not be deposited by the Master
Servicer in the
Custodial Account. In the event any amount not required to be
deposited in the
Custodial Account is so deposited, the Master Servicer may at any
time withdraw
such amount from the Custodial Account, any provision herein to the
contrary
notwithstanding. The Custodial Account may contain funds that
belong to one or
more trust funds created for mortgage pass-through certificates of
other series
and may contain other funds respecting payments on mortgage loans
belonging to
the Master Servicer or serviced or master serviced by it on behalf
of others.
Notwithstanding such commingling of funds, the Master Servicer
shall keep
records that accurately reflect the funds on deposit in the
Custodial Account
that have been identified by it as being attributable to the
Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO
Proceeds,
Subsequent Recoveries and the proceeds of the purchase of any
Mortgage Loan
pursuant to Sections 2.02, 2.03, 2.04, 4.07 and 4.08 received in
any calendar
month, the Master Servicer may elect to treat such amounts as
included in the
Available Distribution Amount for the Distribution Date in the
month of receipt,
but is not obligated to do so. If the Master Servicer so elects,
such amounts
will be deemed to have been received (and any related Realized Loss
shall be
deemed to have occurred) on the last day of the month prior to the
receipt
thereof.
(c) The Master Servicer shall use its best efforts to cause the
institution
maintaining the Custodial Account to invest the funds in the
Custodial Account
attributable to the Mortgage Loans in Permitted Investments which
shall mature
not later than the Certificate Account Deposit Date next following
the date of
such investment (with the exception of the Amount Held for Future
Distribution)
and which shall not be sold or disposed of prior to their
maturities. All income
and gain realized from any such investment shall be for the benefit
of the
Master Servicer as additional servicing compensation and shall be
subject to its
withdrawal or order from time to time. The amount of any losses
incurred in
respect of any such investments attributable to the investment of
amounts in
respect of the Mortgage Loans shall be deposited in the Custodial
Account by the
Master Servicer out of its own funds immediately as realized.
(d) The Master Servicer shall give written notice to the Trustee
and the
Depositor of any change in the location of the Custodial Account
and the
location of the Certificate Account prior to the use thereof.
Section 3.08. Subservicing Accounts; Servicing Accounts.
(a) In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Master Servicer shall
cause the
Subservicer, pursuant to the Subservicing Agreement, to establish
and maintain
one or more Subservicing Accounts which shall be an Eligible
Account or, if such
account is not an Eligible Account, shall generally satisfy the
requirements of
the Program Guide and be otherwise acceptable to the Master
Servicer and each
Rating Agency. The Subservicer will be required thereby to deposit
into the
Subservicing Account on a daily basis all proceeds of Mortgage
Loans received by
the Subservicer, less its Subservicing Fees and unreimbursed
advances and
expenses, to the extent permitted by the
67
Subservicing Agreement. If the Subservicing Account is not an
Eligible Account,
the Master Servicer shall be deemed to have received such monies
upon receipt
thereof by the Subservicer. The Subservicer shall not be required
to deposit in
the Subservicing Account payments or collections in the nature of
late charges
or assumption fees, or payments or collections received in the
nature of
prepayment charges to the extent that the Subservicer is entitled
to retain such
amounts pursuant to the Subservicing Agreement. On or before the
date specified
in the Program Guide, but in no event later than the Determination
Date, the
Master Servicer shall cause the Subservicer, pursuant to the
Subservicing
Agreement, to remit to the Master Servicer for deposit in the
Custodial Account
all funds held in the Subservicing Account with respect to each
Mortgage Loan
serviced by such Subservicer that are required to be remitted to
the Master
Servicer. The Subservicer will also be required, pursuant to the
Subservicing
Agreement, to advance on such scheduled date of remittance amounts
equal to any
scheduled monthly installments of principal and interest less its
Subservicing
Fees on any Mortgage Loans for which payment was not received by
the
Subservicer. This obligation to advance with respect to each
Mortgage Loan will
continue up to and including the first of the month following the
date on which
the related Mortgaged Property is sold at a foreclosure sale or is
acquired by
the Trust Fund by deed in lieu of foreclosure or otherwise. All
such advances
received by the Master Servicer shall be deposited promptly by it
in the
Custodial Account.
(b) The Subservicer may also be required, pursuant to the
Subservicing
Agreement, to remit to the Master Servicer for deposit in the
Custodial Account
interest at the Adjusted Mortgage Rate (or Modified Net Mortgage
Rate plus the
rate per annum at which the Servicing Fee accrues in the case of a
Modified
Mortgage Loan) on any Curtailment received by such Subservicer in
respect of a
Mortgage Loan from the related Mortgagor during any month that is
to be applied
by the Subservicer to reduce the unpaid principal balance of the
related
Mortgage Loan as of the first day of such month, from the date of
application of
such Curtailment to the first day of the following month. Any
amounts paid by a
Subservicer pursuant to the preceding sentence shall be for the
benefit of the
Master Servicer as additional servicing compensation and shall be
subject to its
withdrawal or order from time to time pursuant to Sections
3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate
Account, the
Master Servicer shall for any Nonsubserviced Mortgage Loan, and
shall cause the
Subservicers for Subserviced Mortgage Loans to, establish and
maintain one or
more Servicing Accounts and deposit and retain therein all
collections from the
Mortgagors (or advances from Subservicers) for the payment of
taxes,
assessments, hazard insurance premiums, Primary Insurance Policy
premiums, if
applicable, or comparable items for the account of the Mortgagors.
Each
Servicing Account shall satisfy the requirements for a Subservicing
Account and,
to the extent permitted by the Program Guide or as is otherwise
acceptable to
the Master Servicer, may also function as a Subservicing Account.
Withdrawals of
amounts related to the Mortgage Loans from the Servicing Accounts
may be made
only to effect timely payment of taxes, assessments, hazard
insurance premiums,
Primary Insurance Policy premiums, if applicable, or comparable
items, to
reimburse the Master Servicer or Subservicer out of related
collections for any
payments made pursuant to Sections 3.11 (with respect to the
Primary Insurance
Policy) and 3.12(a) (with respect to hazard insurance), to refund
to any
Mortgagors any sums as may be determined to be overages, to pay
interest, if
required, to Mortgagors on balances in the Servicing Account or to
clear and
terminate the Servicing Account at the termination of this
Agreement in
accordance
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with Section 9.01 or in accordance with the Program Guide. As part
of its
servicing duties, the Master Servicer shall, and the Subservicers
will, pursuant
to the Subservicing Agreements, be required to pay to the
Mortgagors interest on
funds in this account to the extent required by law.
(d) The Master Servicer shall advance the payments referred to in
the
preceding subsection that are not timely paid by the Mortgagors or
advanced by
the Subservicers on the date when the tax, premium or other cost
for which such
payment is intended is due, but the Master Servicer shall be
required so to
advance only to the extent that such advances, in the good faith
judgment of the
Master Servicer, will be recoverable by the Master Servicer out of
Insurance
Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation and Information
Regarding the
Mortgage Loans.
In the event that compliance with this Section 3.09 shall make any
Class of
Certificates legal for investment by federally insured savings and
loan
associations, the Master Servicer shall provide, or cause the
Subservicers to
provide, to the Trustee, the Office of Thrift Supervision or the
FDIC and the
supervisory agents and examiners thereof access to the
documentation regarding
the Mortgage Loans required by applicable regulations of the Office
of Thrift
Supervision, such access being afforded without charge but only
upon reasonable
request and during normal business hours at the offices designated
by the Master
Servicer. The Master Servicer shall permit such representatives to
photocopy any
such documentation and shall provide equipment for that purpose at
a charge
reasonably approximating the cost of such photocopying to the
Master Servicer.
Section 3.10. Permitted Withdrawals from the Custodial Account.
(a) The Master Servicer may, from time to time as provided herein,
make
withdrawals from the Custodial Account of amounts on deposit
therein pursuant to
Section 3.07 that are attributable to the Mortgage Loans for the
following
purposes:
(i) to remit to the Trustee for deposit into the Certificate
Account
in the amounts and in the manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for previously
unreimbursed Advances, Servicing Advances or other expenses made
pursuant
to Sections 3.01, 3.07(a) 3.08, 3.11, 3.12(a), 3.14 and 4.04 or
otherwise
reimbursable pursuant to the terms of this Agreement, such
withdrawal right
being limited to amounts received on the related Mortgage Loans
(including,
for this purpose, REO Proceeds, Insurance Proceeds, Liquidation
Proceeds
and proceeds from the purchase of a Mortgage Loan pursuant to
Section 2.02,
2.03, 2.04, 4.07, 4.08 or 9.01) which represent (A) Late
Collections of
Monthly Payments for which any such advance was made in the case of
Subservicer Advances or Advances pursuant to Section 4.04 and (B)
late
recoveries of the payments for which such advances were made in the
case of
Servicing Advances;
(iii) to pay to itself or the related Subservicer (if not
previously
retained by such Subservicer) out of each payment received by the
Master
Servicer on account of interest on a Mortgage Loan as contemplated
by
Sections 3.14 and 3.16, an amount equal
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to that remaining portion of any such payment as to interest (but
not in
excess of the Servicing Fee and the Subservicing Fee, if not
previously
retained) which, when deducted, will result in the remaining amount
of such
interest being interest at a rate per annum equal to the Net
Mortgage Rate
(or Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan) on
the amount specified in the amortization schedule of the related
Mortgage
Loan as the principal balance thereof at the beginning of the
period
respecting which such interest was paid after giving effect to any
previous
Curtailments;
(iv) to pay to itself as additional servicing compensation any
interest or investment income earned on funds deposited in the
Custodial
Account that it is entitled to withdraw pursuant to Section
3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure Profits, and any amounts remitted by Subservicers as
interest
in respect of Curtailments pursuant to Section 3.08(b);
(vi) to pay to itself, a Subservicer, Residential Funding, the
Depositor or any other appropriate Person, as the case may be, with
respect
to each Mortgage Loan or property acquired in respect thereof that
has been
purchased or otherwise transferred pursuant to Section 2.02, 2.03,
2.04,
4.07, 4.08 or 9.01, all amounts received thereon and not required
to be
distributed to Certificateholders as of the date on which the
related
Stated Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any
Nonrecoverable Advance or Advances in the manner and to the extent
provided
in subsection (c) below, and any Advance or Servicing Advance made
in
connection with a modified Mortgage Loan that is in default or, in
the
judgment of the Master Servicer, default is reasonably foreseeable
pursuant
to Section 3.07(a), to the extent the amount of the Advance or
Servicing
Advance was added to the Stated Principal Balance of the Mortgage
Loan in
the preceding calendar month;
(viii) to reimburse itself or the Depositor for expenses incurred
by
and reimbursable to it or the Depositor pursuant to Section
3.14(c), 6.03,
10.01 or otherwise;
(ix) to reimburse itself for amounts expended by it (a) pursuant to
Section 3.14 in good faith in connection with the restoration of
property
damaged by an Uninsured Cause, and (b), in connection with the
liquidation
of a Mortgage Loan or disposition of an REO Property to the extent
not
otherwise reimbursed pursuant to clause (ii) or (viii) above; and
(x) to withdraw any amount deposited in the Custodial Account that
was
not required to be deposited therein pursuant to Section 3.07,
including
any payoff fees or penalties or any other additional amounts
payable to the
Master Servicer or Subservicer pursuant to the terms of the
Mortgage Note.
(b) Since, in connection with withdrawals pursuant to clauses (ii),
(iii),
(v) and (vi), the Master Servicer's entitlement thereto is limited
to
collections or other recoveries on the related Mortgage Loan, the
Master
Servicer shall keep and maintain separate accounting, on a
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Mortgage Loan by Mortgage Loan basis, for the purpose of justifying
any
withdrawal from the Custodial Account pursuant to such clauses.
(c) The Master Servicer shall be entitled to reimburse itself or
the
related Subservicer for any advance made in respect of a Mortgage
Loan that the
Master Servicer determines to be a Nonrecoverable Advance by
withdrawal from the
Custodial Account of amounts on deposit therein attributable to the
Mortgage
Loans on any Certificate Account Deposit Date succeeding the date
of such
determination. Such right of reimbursement in respect of a
Nonrecoverable
Advance relating to an Advance made pursuant to Section 4.04 on any
such
Certificate Account Deposit Date shall be limited to an amount not
exceeding the
portion of such advance previously paid to Certificateholders (and
not
theretofore reimbursed to the Master Servicer or the related
Subservicer).
Section 3.11. Maintenance of Primary Insurance Coverage.
(a) The Master Servicer shall not take, or permit any Subservicer
to take,
any action which would result in noncoverage under any applicable
Primary
Insurance Policy of any loss which, but for the actions of the
Master Servicer
or Subservicer, would have been covered thereunder. To the extent
coverage is
available, the Master Servicer shall keep or cause to be kept in
full force and
effect each such Primary Insurance Policy until the principal
balance of the
related Mortgage Loan secured by a Mortgaged Property is reduced to
80% or less
of the Appraised Value at origination in the case of such a
Mortgage Loan having
a Loan-to-Value Ratio at origination in excess of 80%, provided
that such
Primary Insurance Policy was in place as of the Cut-off Date and
the Master
Servicer had knowledge of such Primary Insurance Policy. The Master
Servicer
shall not cancel or refuse to renew any such Primary Insurance
Policy applicable
to a Nonsubserviced Mortgage Loan, or consent to any Subservicer
canceling or
refusing to renew any such Primary Insurance Policy applicable to a
Mortgage
Loan subserviced by it, that is in effect at the date of the
initial issuance of
the Certificates and is required to be kept in force hereunder
unless the
replacement Primary Insurance Policy for such canceled or
non-renewed policy is
maintained with an insurer whose claims-paying ability is
acceptable to each
Rating Agency for mortgage pass-through certificates having a
rating equal to or
better than the lower of the then-current rating or the rating
assigned to the
Certificates as of the Closing Date by such Rating Agency.
(b) In connection with its activities as administrator and servicer
of the
Mortgage Loans, the Master Servicer agrees to present or to cause
the related
Subservicer to present, on behalf of the Master Servicer, the
Subservicer, if
any, the Trustee and Certificateholders, claims to the insurer
under any Primary
Insurance Policies, in a timely manner in accordance with such
policies, and, in
this regard, to take or cause to be taken such reasonable action as
shall be
necessary to permit recovery under any Primary Insurance Policies
respecting
defaulted Mortgage Loans. Pursuant to Section 3.07, any Insurance
Proceeds
collected by or remitted to the Master Servicer under any Primary
Insurance
Policies shall be deposited in the Custodial Account, subject to
withdrawal
pursuant to Section 3.10.
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Section 3.12. Maintenance of Fire Insurance and Omissions and
Fidelity
Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan
fire insurance with extended coverage in an amount which is equal
to the lesser
of the principal balance owing on such Mortgage Loan (together with
the
principal balance of any mortgage loan secured by a lien that is
senior to the
Mortgage Loan) or 100 percent of the insurable value of the
improvements;
provided, however, that such coverage may not be less than the
minimum amount
required to fully compensate for any loss or damage on a
replacement cost basis.
To the extent it may do so without breaching the related
Subservicing Agreement,
the Master Servicer shall replace any Subservicer that does not
cause such
insurance, to the extent it is available, to be maintained. The
Master Servicer
shall also cause to be maintained on property acquired upon
foreclosure, or deed
in lieu of foreclosure, of any Mortgage Loan, fire insurance with
extended
coverage in an amount which is at least equal to the amount
necessary to avoid
the application of any co-insurance clause contained in the related
hazard
insurance policy. Pursuant to Section 3.07, any amounts collected
by the Master
Servicer under any such policies (other than amounts to be applied
to the
restoration or repair of the related Mortgaged Property or property
thus
acquired or amounts released to the Mortgagor in accordance with
the Master
Servicer's normal servicing procedures) shall be deposited in the
Custodial
Account, subject to withdrawal pursuant to Section 3.10. Any cost
incurred by
the Master Servicer in maintaining any such insurance shall not,
for the purpose
of calculating monthly distributions to Certificateholders, be
added to the
amount owing under the Mortgage Loan, notwithstanding that the
terms of the
Mortgage Loan so permit. Such costs shall be recoverable by the
Master Servicer
out of related late payments by the Mortgagor or out of Insurance
Proceeds and
Liquidation Proceeds to the extent permitted by Section 3.10. It is
understood
and agreed that no earthquake or other additional insurance is to
be required of
any Mortgagor or maintained on property acquired in respect of a
Mortgage Loan
other than pursuant to such applicable laws and regulations as
shall at any time
be in force and as shall require such additional insurance.
Whenever the
improvements securing a Mortgage Loan are located at the time of
origination of
such Mortgage Loan in a federally designated special flood hazard
area, the
Master Servicer shall cause flood insurance (to the extent
available) to be
maintained in respect thereof. Such flood insurance shall be in an
amount equal
to the lesser of (i) the amount required to compensate for any loss
or damage to
the Mortgaged Property on a replacement cost basis and (ii) the
maximum amount
of such insurance available for the related Mortgaged Property
under the
national flood insurance program (assuming that the area in which
such Mortgaged
Property is located is participating in such program).In the event
that the
Master Servicer shall obtain and maintain a blanket fire insurance
policy with
extended coverage insuring against hazard losses on all of the
Mortgage Loans,
it shall conclusively be deemed to have satisfied its obligations
as set forth
in the first sentence of this Section 3.12(a), it being understood
and agreed
that such policy may contain a deductible clause, in which case the
Master
Servicer shall, in the event that there shall not have been
maintained on the
related Mortgaged Property a policy complying with the first
sentence of this
Section 3.12(a) and there shall have been a loss which would have
been covered
by such policy, deposit in the Certificate Account the amount not
otherwise
payable under the blanket policy because of such deductible clause.
Any such
deposit by the Master Servicer shall be made on the Certificate
Account Deposit
Date next preceding the Distribution Date which occurs in the month
following
the month in which payments under any such policy would have been
deposited in
the Custodial Account. In connection with its activities as
administrator and
servicer of the
72
Mortgage Loans, the Master Servicer agrees to present, on behalf of
itself, the
Trustee and Certificateholders, claims under any such blanket
policy.
(b) The Master Servicer shall obtain and maintain at its own
expense and
keep in full force and effect throughout the term of this Agreement
a blanket
fidelity bond and an errors and omissions insurance policy covering
the Master
Servicer's officers and employees and other persons acting on
behalf of the
Master Servicer in connection with its activities under this
Agreement. The
amount of coverage shall be at least equal to the coverage that
would be
required by Fannie Mae or Freddie Mac, whichever is greater, with
respect to the
Master Servicer if the Master Servicer were servicing and
administering the
Mortgage Loans for Fannie Mae or Freddie Mac. In the event that any
such bond or
policy ceases to be in effect, the Master Servicer shall obtain a
comparable
replacement bond or policy from an issuer or insurer, as the case
may be,
meeting the requirements, if any, of the Program Guide and
acceptable to the
Depositor. Coverage of the Master Servicer under a policy or bond
obtained by an
Affiliate of the Master Servicer and providing the coverage
required by this
Section 3.12(b) shall satisfy the requirements of this Section
3.12(b).
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the
Master
Servicer or Subservicer, to the extent it has knowledge of such
conveyance,
shall enforce any due-on-sale clause contained in any Mortgage Note
or Mortgage,
to the extent permitted under applicable law and governmental
regulations, but
only to the extent that such enforcement will not adversely affect
or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the
foregoing: (i)
the Master Servicer shall not be deemed to be in default under this
Section
3.13(a) by reason of any transfer or assumption which the Master
Servicer is
restricted by law from preventing; and (ii) if the Master Servicer
determines
that it is reasonably likely that any Mortgagor will bring, or if
any Mortgagor
does bring, legal action to declare invalid or otherwise avoid
enforcement of a
due-on-sale clause contained in any Mortgage Note or Mortgage, the
Master
Servicer shall not be required to enforce the due-on-sale clause or
to contest
such action.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause
to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged
Property is to be conveyed to a Person by a Mortgagor, and such
Person is to
enter into an assumption or modification agreement or supplement to
the Mortgage
Note or Mortgage which requires the signature of the Trustee, or if
an
instrument of release signed by the Trustee is required releasing
the Mortgagor
from liability on the Mortgage Loan, the Master Servicer is
authorized, subject
to the requirements of the sentence next following, to execute and
deliver, on
behalf of the Trustee, the assumption agreement with the Person to
whom the
Mortgaged Property is to be conveyed and such modification
agreement or
supplement to the Mortgage Note or Mortgage or other instruments as
are
reasonable or necessary to carry out the terms of the Mortgage Note
or Mortgage
or otherwise to comply with any applicable laws regarding
assumptions or the
transfer of the Mortgaged Property to such Person; provided,
however, none of
such terms and requirements shall both constitute a "significant
modification"
effecting an exchange or reissuance of such Mortgage Loan under the
Code (or
final, temporary or proposed Treasury regulations promulgated
thereunder) and
cause any REMIC created hereunder to fail to qualify
73
as REMICs under the Code or the imposition of any tax on
"prohibited
transactions" or "contributions" after the startup date under the
REMIC
Provisions. The Master Servicer shall execute and deliver such
documents only if
it reasonably determines that (i) its execution and delivery
thereof will not
conflict with or violate any terms of this Agreement or cause the
unpaid balance
and interest on the Mortgage Loan to be uncollectible in whole or
in part, (ii)
any required consents of insurers under any Required Insurance
Policies have
been obtained and (iii) subsequent to the closing of the
transaction involving
the assumption or transfer (A) the Mortgage Loan will continue to
be secured by
a first mortgage lien (or junior lien of the same priority in
relation to any
senior mortgage loan, with respect to any Mortgage Loan secured by
a junior
Mortgage) pursuant to the terms of the Mortgage, (B) such
transaction will not
adversely affect the coverage under any Required Insurance
Policies, (C) the
Mortgage Loan will fully amortize over the remaining term thereof,
(D) no
material term of the Mortgage Loan (including the interest rate on
the Mortgage
Loan) will be altered nor will the term of the Mortgage Loan be
changed and (E)
if the seller/transferor of the Mortgaged Property is to be
released from
liability on the Mortgage Loan, the buyer/transferee of the
Mortgaged Property
would be qualified to assume the Mortgage Loan based on generally
comparable
credit quality and such release will not (based on the Master
Servicer's or
Subservicer's good faith determination) adversely affect the
collectability of
the Mortgage Loan. Upon receipt of appropriate instructions from
the Master
Servicer in accordance with the foregoing, the Trustee shall
execute any
necessary instruments for such assumption or substitution of
liability as
directed by the Master Servicer. Upon the closing of the
transactions
contemplated by such documents, the Master Servicer shall cause the
originals or
true and correct copies of the assumption agreement, the release
(if any), or
the modification or supplement to the Mortgage Note or Mortgage to
be delivered
to the Trustee or the Custodian and deposited with the Mortgage
File for such
Mortgage Loan. Any fee collected by the Master Servicer or such
related
Subservicer for entering into an assumption or substitution of
liability
agreement will be retained by the Master Servicer or such
Subservicer as
additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may
be,
shall be entitled to approve a request from a Mortgagor for a
partial release of
the related Mortgaged Property, the granting of an easement thereon
in favor of
another Person, any alteration or demolition of the related
Mortgaged Property
without any right of reimbursement or other similar matters if it
has
determined, exercising its good faith business judgment in the same
manner as it
would if it were the owner of the related Mortgage Loan, that the
security for,
and the timely and full collectability of, such Mortgage Loan would
not be
adversely affected thereby and that each REMIC created hereunder
would continue
to qualify as a REMIC under the Code as a result thereof and that
no tax on
"prohibited transactions" or "contributions" after the Startup Date
would be
imposed on any REMIC created hereunder as a result thereof. Any fee
collected by
the Master Servicer or the related Subservicer for processing such
a request
will be retained by the Master Servicer or such Subservicer as
additional
servicing compensation.
(d) Subject to any other applicable terms and conditions of this
Agreement,
the Master Servicer shall be entitled to approve an assignment in
lieu of
satisfaction with respect to any Mortgage Loan, provided the
obligee with
respect to such Mortgage Loan following such proposed assignment
provides the
Master Servicer with a "Lender Certification for Assignment of
Mortgage Loan" in
the form attached hereto as Exhibit N, in form and substance
satisfactory to the
Master Servicer, providing the following: (i) that the Mortgage
Loan is secured
by
74
Mortgaged Property located in a jurisdiction in which an assignment
in lieu of
satisfaction is required to preserve lien priority, minimize or
avoid mortgage
recording taxes or otherwise comply with, or facilitate a
refinancing under, the
laws of such jurisdiction; (ii) that the substance of the
assignment is, and is
intended to be, a refinancing of such Mortgage Loan and that the
form of the
transaction is solely to comply with, or facilitate the transaction
under, such
local laws; (iii) that the Mortgage Loan following the proposed
assignment will
have a rate of interest at least 0.25 percent below or above the
rate of
interest on such Mortgage Loan prior to such proposed assignment;
and (iv) that
such assignment is at the request of the borrower under the related
Mortgage
Loan. Upon approval of an assignment in lieu of satisfaction with
respect to any
Mortgage Loan, the Master Servicer shall receive cash in an amount
equal to the
unpaid principal balance of and accrued interest on such Mortgage
Loan and the
Master Servicer shall treat such amount as a Principal Prepayment
in Full with
respect to such Mortgage Loan for all purposes hereof.
Section 3.14. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall foreclose upon or otherwise
comparably
convert (which may include an REO Acquisition) the ownership of
properties
securing such of the Mortgage Loans as come into and continue in
default and as
to which no satisfactory arrangements can be made for collection of
delinquent
payments pursuant to Section 3.07. Alternatively, the Master
Servicer may take
other actions in respect of a defaulted Mortgage Loan, which may
include (i)
accepting a short sale (a payoff of the Mortgage Loan for an amount
less than
the total amount contractually owed in order to facilitate a sale
of the
Mortgaged Property by the Mortgagor) or permitting a short
refinancing (a payoff
of the Mortgage Loan for an amount less than the total amount
contractually owed
in order to facilitate refinancing transactions by the Mortgagor
not involving a
sale of the Mortgaged Property), (ii) arranging for a repayment
plan or (iii)
agreeing to a modification in accordance with Section 3.07. In
connection with
such foreclosure or other conversion or action, the Master Servicer
shall,
consistent with Section 3.11, follow such practices and procedures
as it shall
deem necessary or advisable, as shall be normal and usual in its
general
mortgage servicing activities and as shall be required or permitted
by the
Program Guide; provided that the Master Servicer shall not be
liable in any
respect hereunder if the Master Servicer is acting in connection
with any such
foreclosure or other conversion or action in a manner that is
consistent with
the provisions of this Agreement. The Master Servicer, however,
shall not be
required to expend its own funds or incur other reimbursable
charges in
connection with any foreclosure, or attempted foreclosure which is
not
completed, or towards the correction of any default on a related
senior mortgage
loan, or towards the restoration of any property unless it shall
determine (i)
that such restoration and/or foreclosure will increase the proceeds
of
liquidation of the Mortgage Loan to Holders of Certificates of one
or more
Classes after reimbursement to itself for such expenses or charges
and (ii) that
such expenses and charges will be recoverable to it through
Liquidation
Proceeds, Insurance Proceeds, or REO Proceeds (respecting which it
shall have
priority for purposes of withdrawals from the Custodial Account
pursuant to
Section 3.10, whether or not such expenses and charges are actually
recoverable
from related Liquidation Proceeds, Insurance Proceeds or REO
Proceeds). In the
event of such a determination by the Master Servicer pursuant to
this Section
3.14(a), the Master Servicer shall be entitled to reimbursement of
its funds so
expended pursuant to Section 3.10. In addition, the Master Servicer
may pursue
any remedies that may be available in connection with a breach of a
representation and warranty with respect to any such Mortgage Loan
in accordance
with Sections
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2.03 and 2.04. However, the Master Servicer is not required to
continue to
pursue both foreclosure (or similar remedies) with respect to the
Mortgage Loans
and remedies in connection with a breach of a representation and
warranty if the
Master Servicer determines in its reasonable discretion that one
such remedy is
more likely to result in a greater recovery as to the Mortgage
Loan. Upon the
occurrence of a Cash Liquidation or REO Disposition, following the
deposit in
the Custodial Account of all Insurance Proceeds, Liquidation
Proceeds and other
payments and recoveries referred to in the definition of "Cash
Liquidation" or
"REO Disposition," as applicable, upon receipt by the Trustee of
written
notification of such deposit signed by a Servicing Officer, the
Trustee or any
Custodian, as the case may be, shall release to the Master Servicer
the related
Mortgage File and the Trustee shall execute and deliver such
instruments of
transfer or assignment prepared by the Master Servicer, in each
case without
recourse, as shall be necessary to vest in the Master Servicer or
its designee,
as the case may be, the related Mortgage Loan, and thereafter such
Mortgage Loan
shall not be part of the Trust Fund. Notwithstanding the foregoing
or any other
provision of this Agreement, in the Master Servicer's sole
discretion with
respect to any defaulted Mortgage Loan or REO Property as to either
of the
following provisions, (i) a Cash Liquidation or REO Disposition may
be deemed to
have occurred if substantially all amounts expected by the Master
Servicer to be
received in connection with the related defaulted Mortgage Loan or
REO Property
have been received, and (ii) for purposes of determining the amount
of any
Liquidation Proceeds, Insurance Proceeds, REO Proceeds or other
unscheduled
collections or the amount of any Realized Loss, the Master Servicer
may take
into account minimal amounts of additional receipts expected to be
received or
any estimated additional liquidation expenses expected to be
incurred in
connection with the related defaulted Mortgage Loan or REO
Property.
(b) In the event that title to any Mortgaged Property is acquired
by the
Trust Fund as an REO Property by foreclosure or by deed in lieu of
foreclosure,
the deed or certificate of sale shall be issued to the Trustee or
to its nominee
on behalf of Certificateholders. Notwithstanding any such
acquisition of title
and cancellation of the related Mortgage Loan, such REO Property
shall (except
as otherwise expressly provided herein) be considered to be an
Outstanding
Mortgage Loan held in the Trust Fund until such time as the REO
Property shall
be sold. Consistent with the foregoing for purposes of all
calculations
hereunder so long as such REO Property shall be considered to be an
Outstanding
Mortgage Loan it shall be assumed that, notwithstanding that the
indebtedness
evidenced by the related Mortgage Note shall have been discharged,
such Mortgage
Note and the related amortization schedule in effect at the time of
any such
acquisition of title (after giving effect to any previous
Curtailments and
before any adjustment thereto by reason of any bankruptcy or
similar proceeding
or any moratorium or similar waiver or grace period) remain in
effect.
(c) In the event that the Trust Fund acquires any REO Property as
aforesaid
or otherwise in connection with a default or imminent default on a
Mortgage
Loan, the Master Servicer on behalf of the Trust Fund shall dispose
of such REO
Property within three full years after the taxable year of its
acquisition by
the Trust Fund for purposes of Section 860G(a)(8) of the Code (or
such shorter
period as may be necessary under applicable state (including any
state in which
such property is located) law to maintain the status of each REMIC
created
hereunder as a REMIC under applicable state law and avoid taxes
resulting from
such property failing to be foreclosure property under applicable
state law) or,
at the expense of the Trust Fund, request, more than 60 days before
the day on
which such grace period would otherwise expire, an
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extension of such grace period unless the Master Servicer obtains
for the
Trustee an Opinion of Counsel, addressed to the Trustee and the
Master Servicer,
to the effect that the holding by the Trust Fund of such REO
Property subsequent
to such period will not result in the imposition of taxes on
"prohibited
transactions" as defined in Section 860F of the Code or cause any
REMIC created
hereunder to fail to qualify as a REMIC (for federal (or any
applicable State or
local) income tax purposes) at any time that any Certificates are
outstanding,
in which case the Trust Fund may continue to hold such REO Property
(subject to
any conditions contained in such Opinion of Counsel). The Master
Servicer shall
be entitled to be reimbursed from the Custodial Account for any
costs incurred
in obtaining such Opinion of Counsel, as provided in Section 3.10.
Notwithstanding any other provision of this Agreement, no REO
Property acquired
by the Trust Fund shall be rented (or allowed to continue to be
rented) or
otherwise used by or on behalf of the Trust Fund in such a manner
or pursuant to
any terms that would (i) cause such REO Property to fail to qualify
as
"foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or
(ii) any subject REMIC created hereunder to the imposition of any
federal income
taxes on the income earned from such REO Property, including any
taxes imposed
by reason of Section 860G(c) of the Code, unless the Master
Servicer has agreed
to indemnify and hold harmless the Trust Fund with respect to the
imposition of
any such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or
purchase or
repurchase of any Mortgage Loan pursuant to the terms of this
Agreement, as well
as any recovery (other than Subsequent Recoveries) resulting from a
collection
of Liquidation Proceeds, Insurance Proceeds or REO Proceeds, will
be applied in
the following order of priority: first, to reimburse the Master
Servicer or the
related Subservicer in accordance with Section 3.10(a)(ii); second,
to the
Certificateholders to the extent of accrued and unpaid interest on
the Mortgage
Loan, and any related REO Imputed Interest, at the Net Mortgage
Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan), to the Due
Date in the related Due Period prior to the Distribution Date on
which such
amounts are to be distributed; third, to the Certificateholders as
a recovery of
principal on the Mortgage Loan (or REO Property); fourth, to all
Servicing Fees
and Subservicing Fees payable therefrom (and the Master Servicer
and the
Subservicer shall have no claims for any deficiencies with respect
to such fees
which result from the foregoing allocation); and fifth, to
Foreclosure Profits.
(e) In the event of a default on a Mortgage Loan one or more of
whose
obligors is not a United States Person, in connection with any
foreclosure or
acquisition of a deed in lieu of foreclosure (together,
"foreclosure") in
respect of such Mortgage Loan, the Master Servicer shall cause
compliance with
the provisions of Treasury Regulation Section 1.1445-2(d)(3) (or
any successor
thereto) necessary to assure that no withholding tax obligation
arises with
respect to the proceeds of such foreclosure except to the extent,
if any, that
proceeds of such foreclosure are required to be remitted to the
obligors on such
Mortgage Loan.
Section 3.15. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage
Loan, or
upon the receipt by the Master Servicer of a notification that
payment in full
will be escrowed in a manner customary for such purposes, the
Master Servicer
shall immediately notify the Trustee (if it holds the related
Mortgage File) or
the Custodian by a certification of a Servicing Officer (which
certification
shall include a statement to the effect that all amounts received
or to be
received in
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connection with such payment which are required to be deposited in
the Custodial
Account pursuant to Section 3.07 have been or will be so
deposited),
substantially in one of the forms attached hereto as Exhibit H
requesting
delivery to it of the Mortgage File. Upon receipt of such
certification and
request, the Trustee shall promptly release, or cause the Custodian
to release,
the related Mortgage File to the Master Servicer. The Master
Servicer is
authorized to execute and deliver to the Mortgagor the request for
reconveyance,
deed of reconveyance or release or satisfaction of mortgage or such
instrument
releasing the lien of the Mortgage, together with the Mortgage Note
with, as
appropriate, written evidence of cancellation thereon and to cause
the removal
from the registration on the MERS(R) System of such Mortgage and to
execute and
deliver, on behalf of the Trustee and the Certificateholders or any
of them, any
and all instruments of satisfaction or cancellation or of partial
or full
release, including any applicable UCC termination statements. No
expenses
incurred in connection with any instrument of satisfaction or deed
of
reconveyance shall be chargeable to the Custodial Account or the
Certificate
Account.
(b) From time to time as is appropriate for the servicing or
foreclosure of
any Mortgage Loan, the Master Servicer shall deliver to the
Custodian, with a
copy to the Trustee, a certificate of a Servicing Officer
substantially in one
of the forms attached as Exhibit H hereto, requesting that
possession of all, or
any document constituting part of, the Mortgage File be released to
the Master
Servicer and certifying as to the reason for such release and that
such release
will not invalidate any insurance coverage provided in respect of
the Mortgage
Loan under any Required Insurance Policy. Upon receipt of the
foregoing, the
Trustee shall deliver, or cause the Custodian to deliver, the
Mortgage File or
any document therein to the Master Servicer. The Master Servicer
shall cause
each Mortgage File or any document therein so released to be
returned to the
Trustee, or the Custodian as agent for the Trustee when the need
therefor by the
Master Servicer no longer exists, unless (i) the Mortgage Loan has
been
liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been
deposited in the Custodial Account or (ii) the Mortgage File or
such document
has been delivered directly or through a Subservicer to an
attorney, or to a
public trustee or other public official as required by law, for
purposes of
initiating or pursuing legal action or other proceedings for the
foreclosure of
the Mortgaged Property either judicially or non-judicially, and the
Master
Servicer has delivered directly or through a Subservicer to the
Trustee a
certificate of a Servicing Officer certifying as to the name and
address of the
Person to which such Mortgage File or such document was delivered
and the
purpose or purposes of such delivery. In the event of the
liquidation of a
Mortgage Loan, the Trustee shall deliver the Request for Release
with respect
thereto to the Master Servicer upon the Trustee's receipt of
notification from
the Master Servicer of the deposit of the related Liquidation
Proceeds in the
Custodial Account.
(c) The Trustee or the Master Servicer on the Trustee's behalf
shall
execute and deliver to the Master Servicer, if necessary, any court
pleadings,
requests for trustee's sale or other documents necessary to the
foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal
action brought
to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or
rights
provided by the Mortgage Note or Mortgage or otherwise available at
law or in
equity. Together with such documents or pleadings (if signed by the
Trustee),
the Master Servicer shall deliver to the Trustee a certificate of a
Servicing
Officer requesting that such pleadings or documents be executed by
the Trustee
and certifying as to the reason such documents or pleadings are
required
78
and that the execution and delivery thereof by the Trustee shall
not invalidate
any insurance coverage under any Required Insurance Policy or
invalidate or
otherwise affect the lien of the Mortgage, except for the
termination of such a
lien upon completion of the foreclosure or trustee's sale.
Section 3.16. Servicing and Other Compensation; Eligible Master
Servicing
Compensation.
(a) The Master Servicer, as compensation for its activities
hereunder,
shall be entitled to receive on each Distribution Date the amounts
provided for
by clauses (iii), (iv), (v) and (vi) of Section 3.10(a), subject to
clause (e)
below. The amount of servicing compensation provided for in such
clauses shall
be accounted for on a Mortgage Loan-by-Mortgage Loan basis. In the
event that
Liquidation Proceeds, Insurance Proceeds and REO Proceeds (net of
amounts
reimbursable therefrom pursuant to Section 3.10(a)(ii)) in respect
of a Cash
Liquidation or REO Disposition exceed the unpaid principal balance
of such
Mortgage Loan plus unpaid interest accrued thereon (including REO
Imputed
Interest) at a per annum rate equal to the related Net Mortgage
Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan), the
