McKee Nelson Draft No.
3
2/3/06
HSI ASSET SECURITIZATION CORPORATION,
Depositor
[
],
Servicer
[
],
Mortgage Loan Seller,
[
],
Master Servicer, Securities Administrator and Custodian
and
[
],
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of [
]
HSI ASSET SECURITIZATION CORPORATION
TRUST [
]
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES [
]
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01
Conveyance of Mortgage Loans
46
Section 2.02
Acceptance by the Trustee of the Mortgage
Loans
50
Section 2.03
Representations, Warranties and Covenants
of the Mortgage Loan Seller
and the Servicer; Remedies for Breaches
of Representations and
Warranties with Respect to the Mortgage
Loans
51
Section 2.04
Execution and Delivery of
Certificates
55
Section 2.05
REMIC Matters
55
Section 2.06
Representations and Warranties of the
Depositor
55
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01
Servicer to Service Mortgage
Loans
56
Section 3.02
Subservicing Agreements between Servicer
and Subservicers; Use of
Subcontractors
58
Section 3.03
Successor Subservicers
60
Section 3.04
Liability of the Servicer
60
Section 3.05
No Contractual Relationship between
Subservicers and the Master
Servicer
60
Section 3.06
Assumption or Termination of Subservicing
Agreements by Master
Servicer
61
Section 3.07
Collection of Certain Mortgage Loan
Payments
61
Section 3.08
Subservicing Accounts
64
Section 3.09
Collection of Taxes, Assessments and
Similar Items; Escrow Accounts
64
Section 3.10
Collection Account
65
Section 3.11
Withdrawals from the Collection
Account
66
Section 3.12
Investment of Funds in the Collection
Account, Escrow Accounts and
the Distribution Account
68
Section 3.13
Maintenance of Hazard Insurance and
Errors and Omissions and Fidelity
Coverage
69
Section 3.14
Enforcement of Due-On-Sale Clauses;
Assumption Agreements
70
Section 3.15
Realization upon Defaulted Mortgage
Loans
71
Section 3.16
Release of Mortgage Files
73
Section 3.17
Title, Conservation and Disposition of
REO Property
74
Section 3.18
Notification of Adjustments
75
Section 3.19
Access to Certain Documentation and
Information Regarding the
Mortgage Loans
76
Section 3.20
Documents, Records and Funds in
Possession of the Servicer to Be Held
for the Trustee
76
Section 3.21
Servicing Compensation
76
Section 3.22
Report on Assessment of Compliance with
Applicable Servicing
Criteria.
77
Section 3.23
Report on Attestation of Compliance with
Applicable Servicing Criteria.
78
Section 3.24
Annual Officer’s
Certificate.
78
Section 3.25
Master Servicer to Act as
Servicer
79
Section 3.26
Compensating Interest
80
Section 3.27
Credit Reporting; Gramm-Leach-Bliley
Act
80
Section 3.28
Maintenance of the Bulk PMI
Policy.
80
Section 3.29
Notification to Parties.
80
Section 3.30
Obligations of the Custodian;
Indemnification.
81
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01
Advances
82
Section 4.02
Priorities of Distribution
83
Section 4.03
Monthly Statements to
Certificateholders
88
Section 4.04
Certain Matters Relating to the
Determination of LIBOR
91
Section 4.05
Allocation of Applied Realized Loss
Amounts
92
Section 4.06
Supplemental Interest Trust.
92
Section 4.07
Rights of the Swap
Counterparty.
93
Section 4.08
Termination Receipts.
93
ARTICLE V
THE CERTIFICATES
Section 5.01
The Certificates
94
Section 5.02
Certificate Register; Registration of
Transfer and Exchange of
Certificates
95
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates
101
Section 5.04
Persons Deemed Owners
101
Section 5.05
Access to List of
Certificateholders’ Names and Addresses
101
Section 5.06
Maintenance of Office or
Agency
102
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01
Respective Liabilities of the Depositor
and the Servicer
102
Section 6.02
Merger or Consolidation of the Depositor
or the Servicer
102
Section 6.03
Limitation on Liability of the Depositor,
the Servicer and Others.
102
Section 6.04
Limitation on Resignation of the
Servicer.
103
Section 6.05
Additional Indemnification by the
Servicer; Third Party Claims.
103
Section 6.06
Compliance with Regulation AB;
Cooperation of Parties
104
ARTICLE VII
DEFAULT
Section 7.01
Events of Default
105
Section 7.02
Master Servicer to Act; Appointment of
Successor
107
Section 7.03
Notification to
Certificateholders
109
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01
Duties of the Trustee
109
Section 8.02
Certain Matters Affecting the
Trustee
110
Section 8.03
Trustee Not Liable for Certificates or
Mortgage Loans
111
Section 8.04
Trustee May Own
Certificates
112
Section 8.05
Trustee’s Fees Indemnification and
Expenses
112
Section 8.06
Eligibility Requirements for the
Trustee
113
Section 8.07
Resignation and Removal of the
Trustee
113
Section 8.08
Successor Trustee
114
Section 8.09
Merger or Consolidation of the
Trustee
114
Section 8.10
Appointment of Co-Trustee or Separate
Trustee
114
Section 8.11
Tax Matters
116
Section 8.12
Commission Reporting
120
Section 8.13
Tax Classification of the Excess Reserve
Fund Account and the
Supplemental Interest Trust
125
ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01
Duties of the Master Servicer;
Enforcement of Servicer Obligations.
126
Section 9.02
Assessment, Attestation Annual Statement
as to Compliance of the
Master Servicer
127
Section 9.03
[Reserved]
127
Section 9.04
Maintenance of Fidelity Bond and Errors
and Omissions Insurance.
127
Section 9.05
Representations and Warranties of the
Master Servicer
127
Section 9.06
Master Servicer Events of
Default
129
Section 9.07
Waiver of Default.
130
Section 9.08
Successor to the Master
Servicer.
130
Section 9.09
Compensation of the Master
Servicer.
131
Section 9.10
Merger or Consolidation.
132
Section 9.11
Resignation of the Master
Servicer.
132
Section 9.12
Assignment or Delegation of Duties by the
Master Servicer.
132
Section 9.13
Limitation on Liability of the Master
Servicer.
132
Section 9.14
Indemnification; Third Party
Claims.
133
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01
Duties of Securities
Administrator.
134
Section 10.02
Certain Matters Affecting the Securities
Administrator.
135
Section 10.03
Securities Administrator Not Liable for
Certificates or Mortgage Loans.
137
Section 10.04
Securities Administrator May Own
Certificates.
137
Section 10.05
Securities Administrator’s Fees and
Expenses.
137
Section 10.06
Eligibility Requirements for Securities
Administrator.
138
Section 10.07
Resignation and Removal of Securities
Administrator.
139
Section 10.08
Successor Securities
Administrator.
140
Section 10.09
Merger or Consolidation of Securities
Administrator.
140
Section 10.10
Assignment or Delegation of Duties by the
Securities Administrator.
140
Section 10.11
Attestation, Annual Statement of
Compliance of the Securities
Administrator
141
ARTICLE XI
TERMINATION
Section 11.01
Termination upon Liquidation or Purchase
of the Mortgage Loans
141
Section 11.02
Final Distribution on the
Certificates
142
Section 11.03
Additional Termination
Requirements
143
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01
Amendment
143
Section 12.02
Recordation of Agreement;
Counterparts
146
Section 12.03
Governing Law
146
Section 12.04
Intention of Parties
146
Section 12.05
Notices
147
Section 12.06
Severability of Provisions
148
Section 12.07
Assignment
148
Section 12.08
Limitation on Rights of
Certificateholders
149
Section 12.09
Inspection and Audit Rights
149
Section 12.10
Certificates Nonassessable and Fully
Paid
150
Section 12.11
Rule of Construction
150
Section 12.12
Waiver of Jury Trial
150
SCHEDULES
Schedule I
Mortgage Loan Schedule
Schedule II
Representations and Warranties of [
]
Schedule III
Representations and Warranties of the
Mortgage Loan Seller as to Corporate Matters
Schedule IV
Representations and Warranties of the
Mortgage Loan Seller with respect to the Individual Mortgage
Loans
EXHIBITS
Exhibit A
Form of Certificates
Exhibit B
Form of Certificates
Exhibit C
Form of Certificates
Exhibit D
Form of Certificates
Exhibit E
Form of Initial Certification of
Custodian
Exhibit F
Form of Document Certification and
Exception Report of Custodian
Exhibit G
Form of Residual Transfer
Affidavit
Exhibit H
Form of Transferor Certificate
Exhibit I
Form of Rule 144A Letter
Exhibit J
Form of Request for Release
Exhibit K
Form of Contents for Each Mortgage
File
Exhibit L
Form of Sarbanes-Oxley Certification to
be Provided by Master Servicer (or other Certification Party) with
Form 10-K
Exhibit M
Form of Servicer (or Servicing Function
Participant) Back-Up Certification
Exhibit N-1
Form of Monthly Remittance
Advice
Exhibit N-2
Standard Layout for Monthly Defaulted
Loan Report
Exhibit N-3
Form 332 Realized Loss Report
Exhibit O
Form of Swap Agreement
Exhibit P
[Reserved]
Exhibit Q
Master Mortgage Loan Purchase and
Servicing Agreement
Exhibit R
[Reserved]
Exhibit S
Form of Certification Regarding Servicing
Criteria to be Addressed in Report by each Servicing Function
Participant providing an Assessment of Compliance
Exhibit T
[Reserved]
Exhibit U
Form of Annual Compliance
Certificate
Exhibit V
Additional Form 10-D
Disclosure
Exhibit W
Additional Form 10-K
Disclosure
Exhibit X
Form 8-K Disclosure
Information
[The provisions of the Pooling and
Servicing Agreement for each series will be modified as
applicable.]
THIS POOLING AND SERVICING AGREEMENT,
dated as of [ ], among
HSI ASSET SECURITIZATION CORPORATION, as depositor (the “
Depositor ), [ ], a [
], as servicer (the “
Servicer ”), [ ],
as mortgage loan seller (the “ Mortgage Loan Seller
”), [ ], a [
], as master servicer (in such
capacity, the “ Master Servicer ”) as securities
administrator (in such capacity, the “ Securities
Administrator ”) and as custodian (in such capacity,
“the Custodian ”), and [
], a [
], as trustee
(the “ Trustee ”).
W I T N E S S E T H
:
In consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Securities Administrator on behalf of
the Trust shall elect that [two] segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising
[two] REMICs (each, a “ REMIC ” or, in the
alternative, the [Lower Tier] REMIC and the [Upper Tier] REMIC,
respectively). Each Class of Certificates (other than
the Class [P] and Class [R] Certificates), other than the
right of each Class of LIBOR Certificates to receive Basis
Risk Carryover Amounts and the right of the Class [X]
Certificates to receive payments from [the Cap Agreements],
represents ownership of a regular interest in the [Upper Tier]
REMIC for purposes of the REMIC Provisions. The
Class [R] Certificate represents ownership of the sole Class
of residual interest in each of the [Lower Tier] REMIC and the
[Upper Tier] REMIC for purposes of the REMIC Provisions. The
Startup Day for each REMIC described herein is the Closing Date.
The latest possible maturity date for each Certificate is the
latest date referenced in Section 2.05. The [Upper Tier]
REMIC shall hold as assets the several Classes of uncertificated
[Lower Tier] REMIC Regular Interests, set out below. Each
such [Lower Tier] REMIC Regular Interest is hereby designated as a
regular interest in the [Lower Tier] REMIC. The
Class [P] Certificates represent beneficial ownership of the
Prepayment Charges, each Class of LIBOR Certificates [and the
Class
[ ]
Certificates] represents beneficial ownership of a regular interest
in the [Upper Tier] REMIC, and the right to receive Basis Risk
Carryover Amounts in the case of the LIBOR Certificates, and the
Class [X] Certificates represent beneficial ownership of a regular
interest in the [Upper Tier] REMIC, [the Excess Reserve Fund
Account] and [the Cap Agreements].
|
[Lower Tier] REMIC
|
|
[Lower Tier]
REMIC
Class Designation
|
[Lower Tier]
REMIC
Interest Rate
|
Initial [Lower Tier]
REMIC Principal Amount
|
Corresponding
[Upper Tier]
REMIC
Regular Interest
|
|
Class [ ]
|
(1)
|
[ ]
|
[ ]
|
|
Class [ ]
|
(1)
|
[ ]
|
[ ]
|
|
Class [ ]-
[Group I]
|
(2)
|
[ ]
|
N/A
|
|
Class [ ]-
[Group II]
|
(3)
|
[ ]
|
N/A
|
|
Class [ ]-[R]
|
(4)
|
(4)
|
N/A
|
______________________________
(1)
The interest rate with
respect to any Distribution Date for these interests is a per annum
variable rate equal to the [Lower-Tier] REMIC WAC Cap.
(2)
The interest rate with
respect to any Distribution Date for the Class [
]-[Group I]
Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the [Group I]
Available Funds Cap.
(3)
The interest rate with
respect to any Distribution Date for the Class [
]-[Group II]
Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the [Group II]
Available Funds Cap.
(4)
The Class [
]-[R]
Interest is the sole Class of residual interest in the [Lower Tier]
REMIC and it does not have a principal amount or an interest
rate.
The [Lower Tier] REMIC shall hold as
assets all of the assets included in the Trust Fund other than
Prepayment Charges, [the Cap Agreements], [the Excess Reserve Fund
Account], [the Pre-Funding Account], [the Capitalized Interest
Account], and [the Lower Tier REMIC Regular Interests].
The Class LT-[
],
Class LT-[
] and
Class LT-[
] Interests
are hereby designated the [LT Accretion Directed Classes] (the
“[ LT Accretion Directed Classes] ”). On
each Distribution Date, [
]% of the
increase in the Overcollateralization Amount will be payable as a
reduction of the [Lower-Tier] REMIC Principal Amount of the [LT
Accretion Directed Classes] (each such Class will be reduced
by an amount equal to [
]% of any
increase in the Overcollateralization Amount that is attributable
to a reduction in the Class Certificate Balance of its
Corresponding Class) and will be accrued and added to the
[Lower-Tier] REMIC Principal Amount of the [Class LT-Accrual
Interest]. On each Distribution Date, the increase in the
[Lower-Tier] REMIC Principal Amount of the [Class LT-Accrual
Interest] may not exceed interest accruals for such Distribution
Date for the [Class LT-Accrual Interest]. All payments
of scheduled principal and prepayments of principal generated by
the Mortgage Loans and all Subsequent Recoveries allocable to
principal shall be allocated (i) [
]% to the
[Class LT-Accrual Interest], (ii) [
]% to the
[LT Accretion Directed Classes] (such principal payments and
Subsequent Recoveries shall be allocated among such
[LT Accretion Directed Classes] in an amount equal to [
]% of the
principal amounts allocated to their respective Corresponding
Classes), until paid in full and (iii) [
]% to
Class LT-[Group I(SUB) Interest],
Class LT-[Group I Interest],
Class LT-[Group II(SUB) Interest],
Class LT-[Group II Interest] and Class LT-[XX
Interest] (and further allocated among these [Lower-Tier] REMIC
Regular Interests in the manner described in the next sentence).
As among the Class LT-[Group I(SUB) Interest],
Class LT-[Group I Interest],
Class LT-[Group II(SUB) Interest],
Class LT-[Group II Interest] and Class LT-[XX
Interest], all payments of scheduled principal and prepayments of
principal generated by the Mortgage Loans and Subsequent Recoveries
referred to in clause (iii) of the previous sentence
shall be allocated (i) first, to the
Class LT-[Group I(SUB) Interest], and
Class LT-[Group II(SUB) Interest], each from the related
Loan Group, so that their respective [Lower-Tier] REMIC Principal
Amount (computed to at least eight decimal places) is equal to [
]% of the
related Group Subordinate Amount (except that if any such
amount is a larger number than in the preceding distribution
period, the least amount of principal shall be distributed to the
Class LT-[Group I(SUB) Interest] and
Class LT-[Group II(SUB) Interest], as applicable, such
that the [Lower Tier] REMIC Subordinate Balance Ratio is
maintained); (ii) second, to the Class LT-[Group I
Interest] and the Class LT-[Group II Interest] [
]% of the
principal collected in respect of the related Loan Group; and
(iii) third, any remaining amounts of principal shall be
distributed to the Class LT-[XX Interest].
Notwithstanding the above, principal payments allocated to
the Class [X] Interest that result in the reduction in the
Overcollateralization Amount shall be allocated (i) [
]% to the
Class [LT-Accrual Interest] (until paid in full) and
(ii) [
]% to the
Class LT-[Group I(SUB) Interest], the
Class LT-[Group II(SUB) Interest], the
Class LT-[Group I Interest], the
Class LT-[Group II Interest] and the Class LT-[XX
Interest] (and allocated among these [Lower-Tier] REMIC Regular
Interests in a manner similar to that described in the immediately
preceding sentence).
Reductions to [Lower-Tier] REMIC
Principal Amounts as a result of Realized Losses and increases in
[Lower-Tier] REMIC Principal Amounts as a result of Subsequent
Recoveries shall be applied so that after all distributions have
been made on each Distribution Date (i) the [Lower Tier] REMIC
Principal Amount of each [LT Accretion Directed Class] is
equal to [ ]%
of the Class Certificate Balance of its Corresponding Class,
(ii) the [Class LT-Accrual Interest] is equal to [
]% of the
aggregate Stated Principal Balance of the Mortgage Loans plus [
]% of the Overcollateralization Amount, (iii) the
Class LT-[Group I(SUB) Interest] is equal to [
]% of the
Group Subordinate Amount of the [Group I] Mortgage Loans,
(iv) the Class LT-[Group II(SUB) Interest] is equal
to [ ]% of
the Group Overcollateralization Amount of the [Group II]
Mortgage Loans, (v) the Class LT-[Group I Interest]
is equal to [
]% of the
aggregate Stated Principal Balance of the [Group I] Mortgage
Loans, (vi) the Class LT-[Group II Interest] is
equal to [ ]%
of the aggregate Stated Principal Balance of the [Group II]
Mortgage Loans and (vii) the remainder shall be applied to the
Class LT-[XX Interest].
The [Upper Tier] REMIC shall issue the
following Classes of [Upper Tier] REMIC Regular Interests and each
such interest, other than the [Class UT-R Interest], is hereby
designated as a regular interest in the [Upper Tier]
REMIC.
|
[Upper Tier] REMIC
|
|
[Upper Tier]
REMIC
Class Designation
|
[Upper Tier]
REMIC Interest
Rate and
Corresponding
Class Interest Rate
|
Initial [Upper
Tier] REMIC
Principal Amount
and Corresponding
Class Certificate
Balance
|
Corresponding
Class of Certificates
|
|
[ ]
|
(1)
|
$
[ ]
|
[ ]
|
|
[ ]
|
(2)
|
$
[ ]
|
[ ]
|
|
[ ]
|
(3)
|
$
[ ]
|
[ ]
|
|
[ ]
|
(4)
|
$
[ ]
|
[ ]
|
|
[ ]
|
(5)
|
$
[ ]
|
[ ]
|
|
[ ]
|
(6)
|
$
[ ]
|
[ ]
|
|
[ ]
|
(7)
|
$
[ ]
|
[ ]
|
|
[ ]
|
(8)
|
$
0
|
[ ]
|
|
Class [UT-R]
|
(9)
|
$
0
|
Class [R]
|
(1)
The Class [
] Interest
will bear interest during each Interest Accrual Period at a per
annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin and (ii) the [Group I] Available
Funds Cap or (b) after the Optional Termination Date, the
lesser of (i) LIBOR plus the applicable Pass-Through Margin
and (ii) the [Group I] Available Funds Cap.
(2
The Class [
] Interest
will bear interest during each Interest Accrual Period at a per
annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin and (ii) the [Group II] Available
Funds Cap or (b) after the Optional Termination Date, the
lesser of (i) LIBOR plus the applicable Pass-Through Margin
and (ii) the [Group II] Available Funds Cap.
(3)
The Class [
] Interest
will bear interest during each Interest Accrual Period at a per
annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin and (ii) the [Group II] Available
Funds Cap or (b) after the Optional Termination Date, the
lesser of (i) LIBOR plus the applicable Pass-Through Margin
and (ii) the [Group II] Available Funds Cap.
(4)
The Class [
] Interest
will bear interest during each Interest Accrual Period at a per
annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin and (ii) the [Group II] Available
Funds Cap or (b) after the Optional Termination Date, the
lesser of (i) LIBOR plus the applicable Pass-Through Margin
and (ii) the [Group II] Available Funds Cap.
(5)
The Class [
] Interest
will bear interest during each Interest Accrual Period at a per
annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin and (ii) the [Group II] Available
Funds Cap or (b) after the Optional Termination Date, the
lesser of (i) LIBOR plus the applicable Pass-Through Margin
and (ii) the [Group II] Available Funds Cap.
(6)
The Class [
] and
Class [
] Interests
will bear interest during each Interest Accrual Period at a per
annum rate equal to (a) on or prior to the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin and (ii) the Available Funds Cap or
(b) after the Optional Termination Date, the lesser of
(i) LIBOR plus the applicable Pass-Through Margin and
(ii) the Available Funds Cap.
(7)
The Class [
] Interest
will bear interest during each Interest Accrual Period at a per
annum rate equal to (a) on or prior to the Optional Termination
Date, the lesser of (i) [
]% and (ii)
the Available Funds Cap or (b) after the Optional Termination Date,
the lesser of (i) [
]% and (ii)
the Available Funds Cap.
(8)
The Class [X]
Interest has an initial principal balance of $[
]. The
Class [X] Interest will not accrue interest on its principal
balance from time to time, but will accrue interest on a notional
principal balance. As of any Distribution Date, the
Class [X] Interest shall have a notional principal balance
equal to the aggregate of the principal balances of the [Lower
Tier] REMIC Regular Interests as of the first day of the related
Interest Accrual Period. With respect to any Interest Accrual
Period, the Class [X] Interest shall bear interest at a rate
equal to the excess, if any, of the [Lower-Tier] REMIC WAC Cap over
the product of (i) [
] and
(ii) the weighted average [Lower Tier] REMIC Interest Rate of
the [Lower Tier] REMIC Regular Interests (other than
[Class LT-Group I(SUB)], [Class LT-Group I],
[Class LT-Group II(SUB)], [Class LT-Group II]
and [Class LT-XX Interests)], where the [Lower Tier] REMIC
Interest Rate on the [Class LT-Accrual Interest] is subject to
a cap equal to zero and each [LT Accretion Directed Class] is
subject to a cap equal to the Interest Rate on its Corresponding
Class (adjusted to reflect an actual/360 day count convention in
the case of Class [
]).
With respect to any Distribution Date, interest that so
accrues on the notional principal balance of the Class [X]
Interest shall be deferred in an amount equal to any increase in
the Overcollateralization Amount on such Distribution Date.
Such deferred interest shall not itself bear interest.
The Class [X] Certificates will represent beneficial
ownership of the Class [X] Interest, [the Cap Agreements], and
amounts in [the Excess Reserve Fund Account], subject to the
obligation to make payments from the [Excess Reserve Fund Account]
in respect of Basis Risk Carryover Amounts. For federal
income tax purposes, the Securities Administrator will treat a
Class [X] Certificateholder’s obligation to make
payments from the [Excess Reserve Fund Account] as payments made
pursuant to an interest rate cap contract written by the
Class [X] Certificateholders in favor of each Class of
LIBOR Certificates.
(9)
The Class [UT-R]
Interest is the sole Class of residual interest in the [Upper Tier]
REMIC. The Class [UT-R] Interest does not have an
interest rate.
(10)
Each of these
Certificates will represent not only the ownership of the
Corresponding Class of [Upper Tier] REMIC Regular Interest but
also the right to receive payments from the [Excess Reserve Fund
Account] in respect of any Basis Risk Carryover Amounts. For
federal income tax purposes, the Securities Administrator will
treat a Certificateholder’s right to receive payments from
the [Excess Reserve Fund Account] as payments made pursuant to an
interest rate cap contract written by the Class [X]
Certificateholders.
The minimum denomination for each
Class of Certificates, other than the Class [P],
Class [R] and the Class [X] Certificates, will be $[
] with
integral multiples of $1 in excess thereof except that one
Certificate in each Class may be issued in a different amount.
The minimum denomination for each of the Class [P] and
Class [X] Certificates will be a [
]% Percentage
Interest in such Class, and the minimum denomination for the
Class [R] Certificates shall be [
]% Percentage
Interest in such Class.
Set forth below are designations of
Classes of Certificates to the categories used herein:
Book-Entry Certificates
All Classes of Certificates other than
the Physical Certificates.
Class [A] Certificates
Class [ ] and
Class [ ] Certificates.
Class [M] Certificates
Class [M] Certificates.
Delay Certificates
Class [ ]
Certificates.
ERISA-Restricted
Certificates
Class [ ], Class [P], Class [X] and
Class [R] Certificates; any Certificate with a rating which falls
below the lowest applicable permitted rating under the
Underwriters’ Exemption.
[ERISA-Restricted
Swap Certificates
Any Class [ ] or Class [ ]
Certificate prior to the termination of the Swap
Agreement.]
LIBOR Certificates
Collectively, Class [A] and
Class [M] Certificates.
Non-Delay Certificates
Class [ ],
Class [ ] and Class [X]
Certificates.
Offered Certificates
All Classes of Certificates other than
the Private Certificates.
Physical Certificates
Class [P], Class [X] and
Class [R] Certificates.
Private Certificates
Class [P], Class [X] and
Class [R] Certificates.
Rating Agencies
[Fitch, Moody’s and
Standard & Poor’s.]
Regular Certificates
All Classes of Certificates other than
the Class [R] Certificates.
Residual Certificates
Class [R] Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires,
shall have the following meanings:
10-K Filing Deadline
: As defined in Section
8.12(a)(ii).
Accepted Servicing
Practices : With respect
to any Mortgage Loan and the Servicer, the servicing and
administration of such Mortgage Loan (i) in the same manner in
which, and with the same care, skill, prudence and diligence with
which the Servicer generally services and administers similar
mortgage loans with similar mortgagors (A) for other third
parties, giving due consideration to customary and usual standards
of practice of prudent institutional residential mortgage lenders
servicing their own mortgage loans or (B) held in the
Servicer’s own portfolio, whichever standard is higher, and
(ii) in accordance with applicable local, state and federal
laws, rules and regulations.
Account : Any of the Collection Account, the
Distribution Account, any Escrow Account, [the Excess Reserve Fund
Account], [and with respect to the Supplemental Interest Trust, the
Supplemental Interest Trust Account]. Each Account shall be
an Eligible Account.
Additional Form 10-D
Disclosure : As defined
in Section 8.12(a)(i).
Additional Form 10-K
Disclosure : As defined
in Section 8.12(a)(ii).
Additional Servicer
: Any affiliate of the Servicer
that Services any of the Mortgage Loans and each Person who is not
an affiliate of the Servicer, who Services 10% or more of the
Mortgage Loans. For clarification purposes, for purposes of
this Agreement, the Master Servicer and the Securities
Administrator are Additional Servicers.
[Additional Termination
Event : As defined in
the Swap Agreement.]
Adjustable Rate Mortgage
Loan : A Mortgage Loan
which provides for the adjustment of the Mortgage Rate payable in
respect thereto.
Adjusted Lower TIER WAC
: For any Distribution Date (and
the related Accrual Period), an amount equal to (i) [
], multiplied by (ii) the weighted average of the
interest rates for such Distribution Date for the Class [
] Interests, weighted in proportion to their Class
Principal Amounts as of the beginning of the related Accrual Period
and computed by subjecting the rate on the Class [
] and [ ] Interest to a cap of [
]%, and by subjecting the rate on each of the
Class [ ], and [ ] Interests to a cap that
corresponds to the Interest Rate (determined by substituting the
[REMIC 2 Net Funds Cap] for the applicable Available Funds Cap) for
the Corresponding Class of Certificates; provided, however ,
that for each Class of [ ] Certificates, the
Certificate Interest Rate shall be multiplied by an amount equal to
(a) the actual number of days in the Interest Accrual Period,
divided by (b) [ ].
Adjustment Date
: As to any Adjustable Rate
Mortgage Loan, the first Due Date on which the related Mortgage
Rate adjusts as set forth in the related Mortgage Note and each Due
Date thereafter on which the Mortgage Rate adjusts as set forth in
the related Mortgage Note.
Advance : Any P&I Advance or Servicing
Advance.
[Affected Party
: As defined in the Swap
Agreement.]
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 or supplements hereto.
Amounts Held for Future
Distribution : As to the
Certificates on any Distribution Date, the aggregate amount held in
the Collection Account at the close of business on the related
Determination Date on account of (i) Principal Prepayments,
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
Subsequent Recoveries on the Mortgage Loans received after the end
of the related Prepayment Period and (ii) all Scheduled
Payments on the Mortgage Loans due after the end of the related Due
Period.
Applied Realized Loss
Amount : With respect to
any Distribution Date, the amount, if any, by which the aggregate
Class Certificate Balance of the LIBOR Certificates after
distributions of principal on such Certificates on such
Distribution Date exceeds the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date.
Appraised Value
: The value set forth in an
appraisal made in connection with the origination of the related
Mortgage Loan as the value of the Mortgaged Property.
Assignment of Mortgage
: An assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form
(other than the assignee’s name and recording information not
yet returned from the recording office), reflecting the sale of the
Mortgage to the Trustee.
Available Funds
: With respect to any Distribution
Date and the Mortgage Loans to the extent received by the Master
Servicer (x) the sum of (i) all scheduled installments of
interest (net of the related Expense Fees) and principal due on the
Due Date on such Mortgage Loans in the related Due Period and
received by the Servicer on or prior to the related Determination
Date, together with any P&I Advances in respect thereof;
(ii) all Condemnation Proceeds, Insurance Proceeds,
Liquidation Proceeds and Subsequent Recoveries received by the
Servicer during the related Prepayment Period (in each case, net of
unreimbursed expenses incurred in connection with a liquidation or
foreclosure and unreimbursed Advances, if any); (iii) all
partial or full prepayments on the Mortgage Loans received by the
Servicer during the related Prepayment Period together with all
Compensating Interest paid by the Servicer in connection therewith
(excluding any Prepayment Charges); (iv) all Substitution
Adjustment Amounts with respect to the substitutions of Mortgage
Loans that occur on or prior to the related Determination Date;
(v) all amounts received with respect to such Distribution
Date as the Repurchase Price in respect of a Mortgage Loan
repurchased by the Mortgage Loan Seller or the Sponsor on or prior
to the related Determination Date; and (vi) the proceeds with
respect to the termination of the Trust Fund pursuant to
clause (a) of Section 11.01; reduced by
(y) amounts in reimbursement for Advances previously made with
respect to the Mortgage Loans and other amounts as to which the
Servicer, the Depositor, the Master Servicer, the Securities
Administrator or the Trustee are entitled to be paid or reimbursed
pursuant to this Agreement.
Back-up Certification
: As defined in Section
3.24.
Basic Principal Payment
Amount : With respect to
any Distribution Date, the excess of (i) the Principal
Remittance Amount for such Distribution Date over (ii) the
Excess Overcollateralization Amount, if any, for such Distribution
Date.
Basis Risk Carryover Amount
: With respect to each Class of
LIBOR Certificates, as of any Distribution Date, the sum of
(A) if on such Distribution Date the Interest Rate for any
Class of LIBOR Certificates is based upon the [Group I]
Available Funds Cap, the [Group II] Available Funds Cap or the
[Class M] Available Funds Cap, as applicable, the excess of
(i) the amount of interest such Class of Certificates
would otherwise be entitled to receive on such Distribution Date
had such rate been calculated (x) as the sum of LIBOR and the
applicable Interest Margin on such Class of Certificates for
such Distribution Date, over (ii) the amount of interest
payable on such Class of Certificates at, with respect to the
Class [ ] Certificates, the [Group I]
Available Funds Cap, at, with respect to the Class [
] Certificates, the [Group II] Available Funds
Cap, and, at, with respect to the Class [ ]
Certificates, the [Class M] Available Funds Cap, as applicable, for
such Distribution Date and (B) the portion of any such excess
described in clause (A) for such Class of
Certificates from all previous Distribution Dates not previously
paid, together with interest thereon at a rate equal the applicable
Interest Rate for each such Class of Certificates for such
Distribution Date.
Basis Risk Payment
: For any Distribution Date, an
amount equal to the lesser of (i) the aggregate of the Basis
Risk Carryover Amounts for such Distribution Date and (ii) the
Class [X] Distributable Amount (prior to any reduction for
Basis Risk Payments).
Best’s : Best’s Key Rating Guide, as the same
shall be amended from time to time.
Book-Entry Certificates
: As specified in the Preliminary
Statement.
Business Day : Any day other than (i) Saturday or
Sunday, or (ii) a day on which banking and savings and loan
institutions, in (a) the States of New York, [
] (b) the State in which the
Servicer’s servicing operations are located, or (c) any
State in which the Corporate Trust Office is located, are
authorized or obligated by law or executive order to be
closed.
Certificate : Any one of the Certificates executed by the
Securities Administrator in substantially the forms attached hereto
as exhibits.
Certificate Balance
: With respect to any Class of
Certificates, other than the Class [X], Class [P] or
Class [R] Certificates, at any date, the maximum dollar amount
of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof
minus all distributions of principal previously made with respect
thereto and in the case of any Class [ ] Certificates,
reduced by any Applied Realized Loss Amounts allocated to such
Class of Certificates pursuant to Section 4.05;
provided, however , that immediately following the
Distribution Date on which a Subsequent Recovery is distributed,
the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized
Loss Amounts will be increased, in order of seniority, by the
amount of any Subsequent Recovery distributed on such Distribution
Date (up to the amount of Unpaid Realized Loss Amount for such
Class or Classes for such Distribution Date). The
Class [P] Certificates are issued with an initial Class [P]
Principal Amount of $[ ]. The
Class [X] and Class [R] Certificates have no Certificate
Balance.
Certificate Group
: The [Group I Certificates]
or the [Group II Certificates], as applicable.
Certificate Owner
: With respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such
Book-Entry Certificate.
Certificate Register
: The register maintained pursuant
to Section 5.02.
Certificateholder
or Holder : The person in
whose name a Certificate is registered in the Certificate Register,
except that, solely for the purpose of giving any consent pursuant
to this Agreement, any Certificate registered in the name of the
Depositor or any Affiliate of the Depositor shall be deemed not to
be Outstanding and the Percentage Interest evidenced thereby shall
not be taken into account in determining whether the requisite
amount of Percentage Interests necessary to effect such consent has
been obtained; provided, however , that if any such Person
(including the Depositor) owns 100.00% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall
be deemed to be Outstanding for purposes of any provision hereof
that requires the consent of the Holders of Certificates of a
particular Class as a condition to the taking of any action
hereunder. The Securities Administrator is entitled to rely
conclusively on a certification of the Depositor or any Affiliate
of the Depositor in determining which Certificates are registered
in the name of an Affiliate of the Depositor.
Certification Parties
: As defined in Section
3.24.
Certifying Person
: As defined in Section
3.24.
Class : All Certificates bearing the same class
designation as set forth in the Preliminary Statement.
Class [ ]
Certificates : All
Certificates bearing the Class designation of “Class [
]”.
Class [ ]
Certificates : All
Certificates bearing the Class designation of “Class [
]”.
Class [ ]
Certificates : All
Certificates bearing the Class designation of “Class [
]”.
Class [ ]
Certificates : All
Certificates bearing the Class designation of “Class [
]”.
Class [ ]
Certificates : All
Certificates bearing the Class designation of “Class [
]”.
Class [A] Certificates
: As specified in the Preliminary
Statement.
Class Certificate
Balance : With respect
to any Class of LIBOR Certificate and as to any date of
determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date. With respect
to the Class [X], Class [P] and Class [R] Certificates, zero.
With respect to any [Lower Tier Interest], the initial Class
Principal Balance as shown or described in the table set forth in
the Preliminary Statement to this Agreement for the issuing REMIC,
as reduced by any principal distributed with respect to such [Lower
Tier Interest] and Realized Losses allocated to such [Lower Tier
Interest].
Class [I] Shortfalls
: As defined in Section 8.11
hereof. For purposes of clarity, the Class [I] Shortfall for
any Distribution Date shall equal the amount payable to the Swap
Counterparty on such Distribution Date in excess of the amount
payable with respect to the Class [ ] interest in the
[Upper Tier REMIC] on such Distribution Date, all as further
provided in Section 8.11 hereof.
Class [M] Available Funds
Cap : With respect to
the Class [M] Certificates as of any Distribution Date, a per annum
rate equal to the weighted average of the [Group I] Available Funds
Cap and the [Group II] Available Funds Cap, weighted on the basis
of the Group Subordinate Amount for the [Group 1] Mortgage Loans
and the Group Subordinate Amount for the [Group II] Mortgage
Loans.
Class [M] Certificates
: As specified in the Preliminary
Statement.
Class [M] Principal Payment
Amount : With respect to
any Distribution Date and any Class of Class [M]
Certificates is the lesser of (i) the excess of (a) the
Principal Payment Amount over (b) the aggregate amount
distributed on that Distribution Date as principal to all Classes
of Certificates more senior than that Class of Class [M]
Certificates and (ii) the excess of (a) the sum of the aggregate
Class Certificate Balances of all Class of Certificates
more senior than that Class of Class [M] Certificates
(after giving effect to all amounts distributed on that
Distribution Date to those Classes of more senior certificates) and
the Class Certificate Balance of that Class of
Class [M] Certificates immediately prior to that Distribution
Date over (b) the lesser of:
(x)
the percentage set forth in the table
below for the applicable Class of Class M Certificates
multiplied by the aggregate Stated Principal Balance of the
Mortgage Loans for that Distribution Date:
|
Class
|
Percentage
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
|
[
]
|
[ ]%
|
and
(y)
the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for that
Distribution Date over [ ]% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date,
until the Class Certificate Balance of that Class of
Class [M] Certificates has been reduced to zero.
Class [ ]
Certificates : All
Certificates bearing the Class designation of “Class [
]”.
Class [P] Certificates
: All Certificates bearing the
Class designation of “Class [P]”.
Class [R] Certificates
: All Certificates bearing the
Class designation of “Class [R]”.
Class [P] Principal
Amount : As of the
Closing Date, $[ ].
Class [X] Certificates
: All Certificates bearing the
Class designation of “Class [X]”.
Class [X] Distributable
Amount : With respect to
any Distribution Date, the amount of interest that has accrued on
the Class [X] Notional Balance, as described in the Preliminary
Statement, but that has not been distributed prior to such date.
In addition, such amount shall include the initial
Overcollateralization Amount of $[ ] ($[ ]
less $[ ] of such amount allocated to the Class[P]
Certificates) to the extent such amount has not been distributed on
an earlier Distribution Date as part of the Overcollateralization
Reduction Amount.
Class [X] Notional Balance
: With respect to any Distribution
Date (and the related Interest Accrual Period) the aggregate
principal balance of the regular interests in [REMIC 3] as
specified in the Preliminary Statement hereto.
Closing Date : [
].
Code : The Internal Revenue Code of 1986, including
any successor or amendatory provisions.
Collection Account
: As defined in
Section 3.10(a).
Commission : The United States Securities and Exchange
Commission.
Compensating Interest
: For any Distribution Date, the
lesser of (a) the amount, if any, by which the Prepayment
Interest Shortfall, if any, for such Distribution Date, with
respect to all voluntary Principal Prepayments (excluding any
payments made upon liquidation of any Mortgage Loan) exceeds all
Prepayment Interest Excesses for such Distribution Date, and
(b) the aggregate amount of the Servicing Fee actually
retained by or paid to the Servicer for such Distribution
Date.
Condemnation Proceeds
: All awards or settlements in
respect of a Mortgaged Property, whether permanent or temporary,
partial or entire, by exercise of the power of eminent domain or
condemnation.
Controlling Person
: With respect to any Person, any
other Person who “controls” such Person within the
meaning of the Securities Act.
Corporate Trust Office
: With respect to the Securities
Administrator, (i) for transfer, presentation or surrender of
Certificates, the office at [
], Attention: [
], and (ii) for all other
purposes, [ ], Attention: [
] or at such other address as the
Securities Administrator may designate from time to time by notice
to the Certificateholders, the Depositor, the Master Servicer and
the Trustee. With respect to the Trustee, the designated
office of the Trustee in the State of [
] at which any particular
time its corporate trust business with respect to this Agreement is
administered, which office at the date of the execution of this
Agreement is located at [
], Attention: [
], and its
telephone number is [ ]
and which is also the address to which notices to and
correspondence with the Trustee under this Agreement should be
directed.
Corresponding Class
: As described in the Preliminary
Statement.
Credit Enhancement
Percentage : With
respect to any Distribution Date, the percentage obtained by
dividing (x) the sum of (i) the aggregate
Class Certificate Balance of the Class [ ] Certificates and
(ii) the Overcollateralization Amount (assuming the
Overcollateralization Amount is not less than zero and in each case
after taking into account the distributions of the Principal
Payment Amount for such Distribution Date [assuming no Trigger
Event has occurred]) by (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution
Date.
Credit Risk Manager
: Not applicable.
Credit Risk Management
Agreement : Not
applicable.
Credit Risk Manager’s Fee
Rate : Not
applicable.
Cumulative Loss Percentage
: With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of Realized Losses incurred from the
Cut-off Date to the last day of the calendar month preceding the
month in which such Distribution Date occurs and the denominator of
which is the Cut-off Date Pool Principal Balance of the Mortgage
Loans.
[Cumulative Loss Trigger
Event : If, with respect
to any Distribution Date, the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses
incurred since the Cut-off Date through the last day of the related
Prepayment Period, divided by (y) the Cut-off Date Pool
Principal Balance, exceeds the applicable loss percentages set
forth below with respect to such Distribution Date:
|
Distribution Date Occurring In:
|
Loss Percentage:
|
|
|
[
] through
[
]
|
[
]% for the first month, plus an additional 1/12th
of
[ ]% for each month thereafter
|
|
|
[
] through
[
]
|
[
]% for the first month, plus an additional 1/12th
of
[
]% for each month thereafter
|
|
|
[
] through
[
]
|
[
]% for the first month, plus an additional 1/12th
of
[
]% for each month thereafter
|
|
|
[
] through
[
]
|
[
]% for the first month, plus an additional 1/12th
of
[
]% for each month thereafter
|
|
|
[
] and
thereafter
|
[
]]%
|
|
|
|
|
Custodial File : The meaning assigned to such term in Section
2.01(a).
Custodian : Initially, [
], or any successor
custodian appointed hereunder.
Cut-off Date : [
].
Cut-off Date Pool Principal
Balance : The aggregate
Stated Principal Balances of all Mortgage Loans as of the Cut-off
Date.
Cut-off Date Principal
Balance : As to any
Mortgage Loan, the Stated Principal Balance thereof as of the close
of business on the Cut-off Date.
[Data Tape
Information : With
respect to each Mortgage Loan, the same information (provided as of
the Cut-off Date) included in the data fields specified under the
definition of “Mortgage Loan Schedule” in the Master
MLPSA, with such additions and modifications as agreed upon by the
Mortgage Loan Seller and the Depositor. A copy of the Master
MLPSA is attached as Exhibits Q hereto.]
Debt Service Reduction
: With respect to any Mortgage
Loan, a reduction by a court of competent jurisdiction in a
proceeding under the United States Bankruptcy Code in the Scheduled
Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness
of principal.
[Defaulting Party
: As defined in the Swap
Agreement.]
Deficient Valuation
: With respect to any Mortgage
Loan, a valuation of the related Mortgaged Property by a court of
competent jurisdiction in an amount less than then outstanding
principal balance of the Mortgage Loan, which valuation results
from a proceeding initiated under the United States Bankruptcy
Code.
Definitive Certificates
: Any Certificate evidenced by a
Physical Certificate and any Certificate issued in lieu of a
Book-Entry Certificate pursuant to Section 5.02(e).
Delay Certificates
: As specified in the Preliminary
Statement.
Deleted Mortgage Loan
: As defined in
Section 2.03.
Delinquency Rate
: For any calendar month, a
fraction, expressed as a percentage, the numerator of which is the
aggregate Stated Principal Balance of 60+ Day Delinquent Mortgage
Loans as of the close of business on the last day of such month,
and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans as of the close of business on the
last day of such month.
[Delinquency Trigger Event
: With respect to any Distribution
Date, the circumstances in which the Rolling Three Month
Delinquency Rate as of the last day of the immediately preceding
calendar month exceeds [ ]% of the Credit
Enhancement Percentage for the Class [ ]
Certificates.]
Denomination : With respect to each Certificate, the amount
set forth on the face thereof as the “Initial Certificate
Balance of this Certificate” or the Percentage Interest
appearing on the face thereof.
Depositor : HSI Asset Securitization Corporation, a
Delaware corporation, and its successors in interest.
Depository : The initial Depository shall be The
Depository Trust Company, the nominee of which is CEDE &
Co., as the registered Holder of the Book-Entry Certificates.
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.
Depository Institution
: Any depository institution or
trust company, including the Trustee and the Securities
Administrator, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject
to supervision and examination by federal or state banking
authorities and (c) has outstanding unsecured commercial paper
or other short-term unsecured debt obligations that are rated P-1
by Moody’s, F1+ by Fitch and A-1 by Standard &
Poor’s.
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.
Determination Date
: With respect to each Remittance
Date, the [ ] day (or if such day is not a
Business Day, the immediately preceding Business Day) in the
calendar month in which such Remittance Date occurs.
Disqualified Non-U.S.
Person : With respect to
a Class R Certificate, any Non-U.S. Person or agent thereof
other than (i) a Non-U.S. Person that holds the Class R
Certificate in connection with the conduct of a trade or business
within the United States and has furnished the transferor and the
Securities Administrator with an effective IRS Form W-8ECI or
(ii) a Non-U.S. Person that has delivered to both the
transferor and the Securities Administrator an opinion of a
nationally recognized tax counsel to the effect that the transfer
of the Class R Certificate to it is in accordance with the
requirements of the Code and the regulations promulgated thereunder
and that such transfer of the Class R Certificate will not be
disregarded for federal income tax purposes.
Distribution Account
: The separate Eligible Account
created and maintained by the Securities Administrator pursuant to
Section 3.07(d) in the name of the Securities Administrator as
paying agent for the benefit of the Trustee and the
Certificateholders and designated “[
] as paying agent
in trust for registered holders of [
]”.
Funds in the Distribution Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution Account Deposit
Date : As to any
Distribution Date, 12:00 noon New York City time on the [
] Business Day immediately preceding such
Distribution Date.
Distribution Date
: The [ ] day of
each calendar month, or if such day is not a Business Day, the next
succeeding Business Day, commencing in [
].
Document Certification and Exception
Report : The form of
report attached to Exhibit F hereto.
Due Date : The day of the month on which the Scheduled
Payment is due on a Mortgage Loan, exclusive of any days of
grace.
Due Period : With respect to any Distribution Date, the
period commencing on the second day of the calendar month preceding
the month in which such Distribution Date occurs and ending on the
first day of the calendar month in which such Distribution Date
occurs.
EDGAR : The Commission’s Electronic Data Gathering
and Retrieval System.
Eligible Account
: Either (i) an account
maintained with a federal or state-chartered depository institution
or trust company that complies with the definition of Eligible
Institution, (ii) an account maintained with the corporate trust
department of a federal depository institution or state-chartered
depository institution subject to regulations regarding fiduciary
funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate
trust powers and is acting in its fiduciary capacity or (iii) any
other account acceptable to each Rating Agency. Eligible
Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Securities
Administrator.
Eligible Institution
: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt
obligations, or other short-term deposits of which are rated at
least “A-1+” by Standard & Poor’s if the
amounts on deposit are to be held in the account for no more than
365 days (or at least “A-2” if the amounts on deposit
are to be held in the account for no more than 30 days),
“P-1” by Moody’s and “F1+” by Fitch
(or a comparable rating if another Rating Agency is specified by
the Depositor by written notice to each of the Servicer and the
Securities Administrator) or long-term unsecured debt obligations
are rated at least “AA-” by Standard & Poor’s
if the amounts on deposit are to be held in the account for no more
than 365 days.
ERISA : The Employee Retirement Income Security Act
of 1974, as amended.
ERISA-Qualifying
Underwriting : A best
efforts or firm commitment underwriting or private placement that
meets the requirements of Prohibited Transaction Exemption (“
PTE ”) [ ], [
], as amended by PTE [
], [ ], PTE [
], [ ]
and PTE [ ], [
] (or any successor
thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted
Certificate : As
specified in the Preliminary Statement.
[ERISA-Restricted Swap
Certificate : As
specified in the Preliminary Statement.]
Escrow Account : The Eligible Account or Accounts established
and maintained by the Servicer pursuant to
Section 3.09(b).
Escrow Payments
: As defined in
Section 3.09(b).
Event of Default
: As defined in
Section 7.01.
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 Overcollateralization Target Amount for such
Distribution Date.
[Excess Reserve Fund
Account : The separate
Eligible Account created and maintained by the Securities
Administrator pursuant to Sections 3.07(b) and 3.07(c) in the
name of the Securities Administrator as paying agent for the
benefit of the LIBOR Certificateholders and the Class [X]
Certificateholders and designated “[
] as paying agent
in trust for registered holders of [
]”.
Funds in the Excess Reserve Fund Account shall be held in
trust for such Certificateholders for the uses and purposes set
forth in this Agreement. Amounts on deposit in the Excess
Reserve Fund Account shall not be invested. The Excess
Reserve Fund Account shall be considered part of the Trust Fund but
not the part of any REMIC.
Exchange Act : The Securities Exchange Act of 1934, as
amended.
Excluded Trust Assets
: As defined in the Preliminary
Statement.
Expense Adjusted Mortgage
Rate : With respect to
any Distribution Date and as to each Mortgage Loan, the per annum
rate equal to the Mortgage Rate as of the first day of the related
Due Period less the Expense Fee Rate.
Expense Fee Rate
: As to each Mortgage Loan, a per
annum rate equal to the sum of the Servicing Fee Rate and the
Master Servicing Fee Rate.
Expense Fees : As to each Mortgage Loan and any Distribution
Date, the sum of the Servicing Fee and the Master Servicing
Fee.
[Extra Principal Payment
Amount : As of any
Distribution Date, the lesser of (x) the related Total Monthly
Excess Spread for such Distribution Date and (y) the related
Overcollateralization Deficiency for such Distribution
Date.]
Fannie Mae : The Federal National Mortgage Association, or
any successor thereto.
FDIC : The Federal Deposit Insurance Corporation, or
any successor thereto.
Final Recovery
Determination : With
respect to any defaulted Mortgage Loan or any REO Property (other
than a Mortgage Loan or REO Property purchased by the Mortgage Loan
Seller or the Sponsor as contemplated by this Agreement or the
Purchase Agreement, as applicable), a determination made by the
Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the
Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered.
The Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made
thereby.
Final Scheduled Distribution
Date : [
].
[Fitch : Fitch, Inc., or any successor thereto.
If Fitch is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 12.05(c) the address for
notices to Fitch shall be Fitch, Inc., One State Street Plaza, New
York, New York 10004, Attention: [
]or such
other address as Fitch may hereafter furnish to the Depositor and
the Securities Administrator.]
Fixed Rate Mortgage Loan
: A Mortgage Loan with respect to
which the Mortgage Rate set forth in the Mortgage Note is fixed for
the term of such Mortgage Loan.
Form 8-K Disclosure
Information : As
defined in Section 8.12(a)(iii).
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 amount set forth in the related Mortgage
Note to be added to the Index to determine the Mortgage
Rate.
[Group I] Available Funds
Cap : With respect to
the [Group I] Mortgage Loans as of any Distribution Date, the per
annum rate (subject to adjustment based on the actual number of
days elapsed in the related Interest Accrual Period equal to (x)
the weighted average of the Expense Adjusted Mortgage Rate for each
[Group I] Mortgage Loan then in effect on the beginning of the
related Due Period (not including for this purpose any [Group I]
Mortgage Loans for which Principal Prepayments in Full have been
received and distributed in the month prior to that Distribution
Date) minus (y) a percentage equal to the product of (i) a
fraction, the numerator of which is equal to the portion of the Net
Swap Payment or Swap Termination Payment allocated to the [Group I]
Mortgage Loans based on the applicable Group Percentage (other than
a Swap Termination Payment caused by the Swap Counterparty)
made to the Swap Counterparty and the denominator of which is equal
to the Stated Principal Balance of the [Group I] Mortgage Loans and
(ii) 12.
[Group I] Certificates
: The [ ]
Certificates.
[Group I] Mortgage
Loans : The Mortgage
Loans identified on the Mortgage Loan Schedule as [Group I]
Mortgage Loans.
[Group I] Principal Payment
Amount : With respect to
any Distribution Date prior to the Stepdown Date, the Principal
Payment Amount multiplied by the Group Principal Allocation
Percentage for the [Group I] Certificates.
[Group I] Senior Principal
Payment Amount : With
respect to any Distribution Date, the lesser of (i) the
[Group I] Principal Payment Amount for that Distribution Date
and (ii) the excess of (a) the aggregate
Class Certificate Balance of the [Group I] Certificates
immediately prior to that Distribution Date over (b) the
lesser of (x) [ ]% of the aggregate Stated
Principal Balance of the [Group I] Mortgage Loans for that
Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the [Group I] Mortgage Loans for
that Distribution Date over [ ]% of the aggregate State
Principal Balance of the [Group I] Mortgage Loans as of the
Cut-off Date.
[[Group II] Available Funds
Cap : With respect to
the [Group II] Mortgage Loans as of any Distribution Date, the per
annum rate (subject to adjustment based on the actual number of
days elapsed in the related Interest Accrual Period) equal to (x)
the weighted average of the Expense Adjusted Mortgage Rate of the
[Group II] Mortgage Loans then in effect at the beginning of the
related Due Period (not including for this purpose any [Group II]
Mortgage Loans for which Principal Prepayments in Full have been
received and distributed in the month prior to that Distribution
Date minus (y) a percentage equal to the product of (i) a
fraction, the numerator of which is equal to the portion of the Net
Swap Payment or Swap Termination Payment allocated to the [Group
II] Certificates based on the applicable Group Percentage (other
than a Swap Termination Payment caused by the Swap Counterparty)
made to the Swap Counterparty and the denominator of which is equal
to the aggregate Stated Principal Balance of the [Group II]
Mortgage Loans and (ii) 12.]
[Group II]
Certificates : The Class
[ ] Certificates, the Class [
] Certificates, Class [
] Certificates and the Class [
] Certificates,
collectively.
[Group II] Mortgage
Loans : The Mortgage
Loans identified on the Mortgage Loan Schedule as [Group II]
Mortgage Loans.
[Group II] Principal Payment
Amount : With respect to
any Distribution Date, the Principal Payment Amount multiplied by
the Group Principal Allocation Percentage for the
[Group II] Certificates.
[Group II] Senior Principal
Payment Amount : With
respect to any Distribution Date, the lesser of (i) the
[Group II] Principal Payment Amount for that Distribution Date
and (ii) the excess of (a) the aggregate
Class Certificate Balance of the [Group II] Certificates
immediately prior to that Distribution Date over (b) the
lesser of (x) [ ]% of the aggregate Stated
Principal Balance of the [Group II] Mortgage Loans for that
Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the [Group II] Mortgage Loans for
that Distribution Date over [ ]% of the aggregate State
Principal Balance of the [Group II] Mortgage Loans as of the
Cut-off Date.
[Group Available Funds
Cap : The [Group I]
Available Funds Cap or the [Group II] Available Funds Cap, as
applicable.]
Group Percentage
: For any Distribution Date and for
each of the [Group I] Mortgage Loans and the [Group II] Mortgage
Loans, a fraction (expressed as a percentage) the numerator of
which is the aggregate Stated Principal Balance of the Mortgage
Loans in such Loan Group and the denominator of which is equal to
the aggregate Stated Principal Balance of all the Mortgage Loans as
of such date.
Group Principal Allocation
Percentage : With
respect to any Distribution Date, the percentage equivalent of a
fraction, determined as follows:
(i)
with respect to the [Group I]
Certificates, a fraction, the numerator of which is the portion of
the Principal Remittance Amount for that Distribution Date that is
attributable to the principal received or advanced on the
[Group I] Mortgage Loans and the denominator of which is the
Principal Remittance Amount for that Distribution Date;
and
(ii)
with respect to the [Group II]
Certificates, a fraction, the numerator of which is the
portion of the Principal Remittance Amount for that Distribution
Date that is attributable to the principal received or advanced on
the [Group II] Mortgage Loans and the denominator of which is
the Principal Remittance Amount for that Distribution
Date.
Group Subordinate
Amount : For any
Distribution Date and (i) for the [Group I] Mortgage
Loans, the excess of the aggregate Stated Principal Balance of the
[Group I] Mortgage Loans as of the beginning of the related
Due Period over the Class Certificate Balance of the
Class [ ] Certificates immediately prior to the
current Distribution Date and (ii) for the [Group II]
Mortgage Loans, the excess of the aggregate Stated Principal
Balance of the [Group II] Mortgage Loans as of the beginning
of the related Due Period over the aggregate Class Certificate
Balance of the Class [ ] and Class [
] Certificates immediately prior to such Distribution
Date.
Independent : When used with respect to any accountants, a
Person who is “independent” within the meaning of Rule
2-01(B) of the Commission’s Regulation S-X. Independent
means, when used with respect to any other Person, a Person who (A)
is in fact independent of another specified Person and any
Affiliate of such other Person, (B) does not have any material
direct or indirect financial interest in such other Person or any
Affiliate of such other Person, (C) is not connected with such
other Person or any Affiliate of such other Person as an officer,
employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions and (D) is not a member of the
immediate family of a Person defined in clause (B) or (C)
above.
Index : As to each Adjustable Rate Mortgage Loan, the
[ ] index
from time to time in effect for the adjustment of the Mortgage Rate
as set forth in the related Mortgage Note.
Initial Certification
: As defined in
Section 2.02.
Initial Sale Date
: The date the Mortgage Loan was
purchased by the Sponsor from the Mortgage Loan Seller under the
Master MLPSA.
Insurance Policy
: With respect to any Mortgage Loan
included in the Trust Fund, any insurance policy, including, but
not limited to, any standard hazard insurance policy, flood
insurance policy, earthquake insurance policy, title insurance
policy or Primary Mortgage Insurance Policy, including all riders
and endorsements thereto in effect, including any replacement
policy or policies.
Insurance Proceeds
: With respect to each Mortgage
Loan, proceeds of Insurance Policies insuring the Mortgage Loan or
the related Mortgaged Property.
Interest Accrual Period
: With respect to each
Class of LIBOR Certificates and the Corresponding
Class of [Lower Tier] REMIC Regular Interests and any
Distribution Date, the period commencing on the Distribution Date
occurring in the month preceding the month in which the current
Distribution Date occurs and ending on the day immediately
preceding the current Distribution Date (or, in the case of the
first Distribution Date, the period from and including the Closing
Date to but excluding such first Distribution Date). For
purposes of computing interest accruals on each Class of LIBOR
Certificates, each Interest Accrual Period has the actual number of
days in such month and each year is assumed to have
360 days.
Interest Carry Forward
Amount : As of any
Distribution Date and any Class of LIBOR Certificates, the sum
of (i) the excess of (a) the sum of (x) the Interest Payment
Amount with respect to the current Distribution Date (excluding any
Basis Risk Carryover Amount with respect to such Class), plus (y)
the portion of the Interest Payment Amount from Distribution Dates
prior to the current Distribution Date remaining unpaid immediately
prior to the current Distribution Date, over (b) the amount
actually paid to such Class with respect to interest on such
prior Distribution Dates, and (ii) interest on the amount in clause
(i) above at the applicable Interest Rate (to the extent permitted
by applicable law).
Interest Margin
: Except as set forth in the
following sentence, with respect to each Class of Regular
Certificates, the following percentages: Class [
] Certificates, [ ]%; Class [ ]
Certificates, [ ]% and Class [ ]
Certificates, [ ]%. On the first
Distribution Date after the Optional Termination Date, the Interest
Margins shall increase to the following percentages: Class [
] Certificates, [ ]%; Class [ ]
Certificates, [ ]% and Class [ ]
Certificates, [ ]%.
Interest Payment Amount
: With respect to any Distribution
Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the
applicable Interest Rate on the related Class Certificate
Balance immediately prior to such Distribution Date, as reduced by
such Class’s share of Net Prepayment Interest Shortfalls and
Relief Act Interest Shortfalls for such Distribution Date allocated
to such Class pursuant to Section 4.02.
Interest Rate : For each Class of Certificates, each
Class of [Upper Tier] REMIC Regular Interest and each
Class of [Lower Tier] REMIC Regular Interest, the per annum
rate set forth or calculated in the manner described in the
Preliminary Statement.
Interest Remittance Amount
: With respect to any Distribution
Date and the Mortgage Loans in a Loan Group, that portion of
Available Funds attributable to interest relating to Mortgage Loans
in that Loan Group.
Investment Account
: As defined in
Section 3.12(a).
Investor : With respect to each MERS Designated Mortgage
Loan, the Person named on the MERS System as the investor pursuant
to the MERS Procedures Manual.
IRS : The Internal Revenue Service.
Late Collections
: With respect to any Mortgage Loan
and any Due Period, all amounts received after the Determination
Date immediately following such Due Period, whether as late
payments of Scheduled Payments or as Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds, Subsequent Recoveries
or otherwise, which represent late payments or collections of
principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but
delinquent for such Due Period and not previously
recovered.
LIBOR : With respect to any Interest Accrual Period
for the LIBOR Certificates, the rate determined by the Securities
Administrator on the related LIBOR Determination Date on the basis
of the offered rate for one-month U.S. dollar deposits as such rate
appears on Telerate Page 3750 as of 11:00 a.m. (London time)
on such date; provided , that if such rate does not appear
on Telerate Page 3750, the rate for such date will be
determined on the basis of the rates at which one-month U.S. dollar
deposits are offered by the Reference Banks at approximately
11:00 a.m. (London time) on such date to prime banks in the
London interbank market. In such event, the Securities
Administrator 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 for that date will
be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer
than two quotations are provided as requested, the rate for that
date will be the arithmetic mean of the rates quoted by major banks
in New York City, selected by the Securities Administrator (after
consultation with the Depositor), at approximately 11:00 a.m.
(New York City time) on such date for one-month U.S. dollar loans
to leading European banks.
LIBOR Certificates
: As specified in the Preliminary
Statement.
LIBOR Determination Date:
With respect to any Interest
Accrual Period for the LIBOR Certificates, the second London
Business Day preceding the commencement of such Interest Accrual
Period.
Liquidated Mortgage Loan
: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which
was liquidated in the calendar month preceding the month of such
Distribution Date and as to which the Servicer has certified to the
Securities Administrator that it has received all amounts it
expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an
REO Property.
Liquidation Proceeds
: Cash received in connection with
the liquidation of a Liquidated Mortgage Loan, whether through a
trustee’s sale, foreclosure sale or otherwise.
Loan Group : The [Group I] Mortgage Loans or the
[Group II] Mortgage Loans, as applicable.
Loan-to-Value Ratio
or LTV : As of any date and
as to any Mortgage Loan, the ratio (expressed as a
percentage) of the outstanding principal balance of the
Mortgage Loan to (a) in the case of a purchase, the lesser of
(i) the sale price of the Mortgaged Property and (ii) its
appraised value at the time of sale or (b) in the case of a
refinancing or modification, the appraised value of the Mortgaged
Property at the time of the refinancing or modification.
London Business Day
: Any day on which dealings in
deposits of United States dollars are transacted in the London
interbank market.
[Lower Tier REMIC
: As described in the Preliminary
Statement.]
Master MLPSA : The Master Loan Purchase and Servicing
Agreement among the Mortgage Loan Seller, the Servicer and the
Sponsor, dated [ ], which amends and
restates the Flow Sale and Servicing Agreement dated as of [
] among the same
parties.
Master Servicer
: [
], and if a successor master
servicer is appointed hereunder, such successor.
Master Servicer Event of
Default : As defined in
Section 9.06.
Master Servicing Fee
: As to any Distribution Date and
each Mortgage Loan, an amount equal to 1/12 th the
product of (a) the Master Servicing Fee Rate and (b) the
outstanding Stated Principal Balance of such Mortgage Loan as of
the prior Distribution Date (or as of the Cut-off Date in the case
of the first Distribution Date).
Master Servicing Fee Rate
: With respect to any Mortgage
Loan, a per annum rate equal to [
]%.
Master Servicing Officer
: Any officer of the Master
Servicer involved in, or responsible for, the administration and
master servicing of the Mortgage Loans.
Maximum Mortgage Rate
: With respect to each Adjustable
Rate Mortgage Loan, a rate that (i) is set forth on the Data
Tape Information and in the related Mortgage Note and (ii) is
the maximum interest rate to which the Mortgage Rate on such
Mortgage Loan may be increased during the lifetime of such Mortgage
Loan.
MERS : Mortgage Electronic Registration Systems,
Inc., a Delaware corporation, and its successors in
interest.
MERS Designated Mortgage
Loan : Mortgage Loans
for which (a) the Mortgage Loan Seller has designated or will
designate MERS as, and has taken or will take such action as is
necessary to cause MERS to be, the mortgagee of record, as nominee
for the Mortgage Loan Seller, in accordance with the MERS Procedure
Manual and (b) the Mortgage Loan Seller has designated or will
designate the Trustee as the Investor on the MERS
System.
MERS Procedure Manual
: The MERS Procedures Manual, as it
may be amended, supplemented or otherwise modified from time to
time.
MERS® System
: MERS mortgage electronic registry
system, as more particularly described in the MERS Procedures
Manual.
MIN : The Mortgage Identification Number of
Mortgage Loans registered with MERS on the MERS®
System.
Minimum Mortgage Rate
: With respect to each Adjustable
Rate Mortgage Loan, a rate that (i) is set forth on the Data
Tape Information and in the related Mortgage Note and (ii) is
the minimum interest rate to which the Mortgage Rate on such
Mortgage Loan may be decreased during the lifetime of such Mortgage
Loan.
Monthly Statement
: The statement delivered to the
Certificateholders pursuant to Section 4.03.
Moody’s : Moody’s Investors Service, Inc. If
Moody’s is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 12.05(c) the address for
notices to Moody’s shall be Moody’s Investors Service,
Inc., 99 Church Street, New York, New York 10007, Attention:
[ ], or such other
address as Moody’s may hereafter furnish to the Depositor and
the Securities Administrator.
Mortgage : The mortgage, deed of trust or other
instrument identified on the Mortgage Loan Schedule as securing a
Mortgage Note.
Mortgage File : The items pertaining to a particular Mortgage
Loan contained in either the Servicing File or Custodial
File.
Mortgage Loan : An individual Mortgage Loan that is the
subject of this Agreement, each Mortgage Loan originally sold and
subject to this Agreement being identified on the Mortgage Loan
Schedule, which Mortgage Loan includes, without limitation, the
Mortgage File, the Scheduled Payments, Principal Prepayments,
Liquidation Proceeds, Subsequent Recoveries, Condemnation Proceeds,
Insurance Proceeds, REO Disposition proceeds, Prepayment Charges,
and all other rights, benefits, proceeds and obligations arising
from or in connection with such Mortgage Loan, excluding replaced
or repurchased Mortgage Loans.
Mortgage Loan Schedule
: A schedule of Mortgage Loans
prepared by the Depositor, delivered to the Trustee on the Closing
Date and referred to on Schedule I, such schedule setting
forth for each Loan Group the Data Tape Information with respect to
each Mortgage Loan.
Mortgage Loan Seller
: [
], and its successors in
interest.
Mortgage Note : The note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate : The annual rate of interest borne on a
Mortgage Note, which shall be adjusted from time to
time.
Mortgaged Property
: With respect to each Mortgage
Loan, the real property (or leasehold estate, if applicable)
identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by the related Mortgage Note.
Mortgagor : The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash
Flow : For any
Distribution Date, the amount of interest and principal remaining
for distribution pursuant to subsection 4.02[ ]
(before giving effect to distributions pursuant to such
subsection).
Net Prepayment Interest
Shortfall : For any
Distribution Date, the amount by which the sum of the Prepayment
Interest Shortfalls for such Distribution Date exceeds the sum of
Compensating Interest payments made with respect to such
Distribution Date.
[Net Swap Payment
: With respect to each Swap Payment
Date, the net payment (not including any Swap Termination Payment)
required to be made pursuant to the terms of the Swap Agreement
plus any unpaid amounts due on previous Swap Payment Dates and
accrued interest thereon as provided in the Swap Agreement, as
calculated by the Swap Counterparty and furnished to the Securities
Administrator.]
Net WAC Rate : With respect to any Distribution Date (and
the related Interest Accrual Period), a per annum rate equal to the
weighted average of the Net Mortgage Rates of the Mortgage Loans as
of the first day of the related Due Period (not including for this
purpose Mortgage Loans for which Principal Prepayments in Full have
been received and distributed in the month prior to that
Distribution Date).
NIM Issuer : The entity established as the issuer of the
NIM Securities.
NIM Securities : Any debt securities secured or otherwise
backed by some or all of the Class [X] and Class [P]
Certificates that are rated by any Rating Agency.
NIM Trustee : The Indenture trustee for the NIM
Securities.
Non-Delay Certificates
: As specified in the Preliminary
Statement.
Non-Permitted Transferee
: A Person other than a Permitted
Transferee.
Non-U.S. Person
: A person that is not a U.S.
Person.
Nonrecoverable P&I
Advance : Any P&I
Advance previously made or proposed to be made in respect of a
Mortgage Loan or REO Property that, in the good faith business
judgment (taking into account Accepted Servicing Practices) of the
Servicer, the Master Servicer, as successor servicer, or any
successor master servicer including the Trustee, as applicable,
will not or, in the case of a proposed P&I Advance, would not
be ultimately recoverable from related Late Collections on such
Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing
Advance : Any Servicing
Advances previously made or proposed to be made in respect of a
Mortgage Loan or REO Property, which, in accordance with Accepted
Servicing Practices, will not or, in the case of a proposed
Servicing Advance, would not be ultimately recoverable from related
Late Collections.
Notice of Final
Distribution : The
notice to be provided by the Securities Administrator pursuant to
Section 11.02 to the effect that final distribution on any of
the Certificates shall be made only upon presentation and surrender
thereof.
Offered Certificates
: As specified in the Preliminary
Statement.
Officer’s Certificate
: A certificate signed by an
officer of the Servicer or the Master Servicer, as applicable, with
responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee and the Securities Administrator
pursuant to this Agreement.
Opinion of Counsel
: A written opinion of counsel, who
may be in-house counsel for the Servicer or any Subservicer,
reasonably acceptable to the Trustee and/or the Securities
Administrator, as applicable (and/or such other Persons as may be
set forth herein); provided , that any Opinion of Counsel
relating to (a) qualification of any REMIC created hereby or
(b) compliance with the REMIC Provisions, must be (unless
otherwise stated in such Opinion of Counsel) an opinion of counsel
who (i) is in fact independent of the Servicer or the Master
Servicer, (ii) does not have any material direct or indirect
financial interest in the Servicer or the Master Servicer or in an
affiliate of either and (iii) is not connected with the
Servicer or the Master Servicer as an officer, employee, director
or person performing similar functions.
Option to Purchase
: On the first Optional Termination
Date, the Master Servicer, at the option of and upon instruction by
the Depositor, shall purchase the Mortgage Loans. If the
Depositor fails to instruct the Master Servicer to purchase the
Mortgage Loan, the Master Servicer has the right and, at its own
option, may purchase the Mortgage Loans on the first Distribution
Date following the Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due Period is less than or equal to [ ]%
of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
Optional Termination Date
: Any Distribution Date on which
the aggregate Stated Principal Balance of the Mortgage Loans, as of
the last day of the related Due Period, is less than or equal to [
]% of the Cut-off Date Pool Principal
Balance.
OTS : Office of Thrift Supervision, and any
successor thereto.
Outstanding : With respect to the Certificates as of any
date of determination, all Certificates theretofore executed and
authenticated under this Agreement except:
(i)
Certificates theretofore canceled by the
Securities Administrator or delivered to the Securities
Administrator for cancellation; and
(ii)
Certificates in exchange for which or in
lieu of which other Certificates have been executed and delivered
by the Securities Administrator pursuant to this
Agreement.
Outstanding Mortgage Loan
: As of any Due Date, a Mortgage
Loan with a Stated Principal Balance greater than zero which was
not the subject of a Principal Prepayment in Full prior to such Due
Date and which did not become a Liquidated Mortgage Loan prior to
such Due Date.
Overcollateralization
Amount : As of any
Distribution Date, the excess, if any, of (a) the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date over (b) the aggregate of the
Class Certificate Balances of the LIBOR Certificates as of
such Distribution Date (after giving effect to the payment of the
Principal Remittance Amount on such Certificates on such
Distribution Date).
Overcollateralization
Deficiency : With
respect to any Distribution Date, the excess, if any, of
(a) the Overcollateralization Target Amount applicable to such
Distribution Date over (b) the Overcollateralization Amount
applicable to such Distribution Date.
Overcollateralization Reduction
Amount : With respect to
any Distribution Date, an amount equal to the lesser of
(a) the Excess Overcollateralization Amount and (b) the
Net Monthly Excess Cash Flow.
Overcollateralization Target
Amount : Prior to the
Stepdown Date, an amount equal to [ ]% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date. On and after the Stepdown Date, an amount equal to the
greater of (i) [ ]% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due
Period and (ii) $[ ]; provided, however , that
if, on any Distribution Date, a Trigger Event exists, the
Overcollateralization Target Amount shall not be reduced to the
applicable percentage of then current aggregate Stated Principal
Balance of the Mortgage Loans until the Distribution Date on which
a Trigger Event no longer exists but rather shall remain the
Overcollateralization Target Amount as determined for the
immediately preceding Distribution Date. When the
Class Certificate Balance of each Class of LIBOR
Certificates has been reduced to zero, the Overcollateralization
Target Amount will thereafter equal zero.
Ownership Interest
: As to any Residual Certificate,
any ownership 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.
P&I Advance
: As to any Mortgage Loan or REO
Property, any advance made by the Servicer in respect of any
Remittance Date representing the aggregate of all payments of
principal and interest, net of the Servicing Fee, that were due
during the related Due Period on the Mortgage Loans and that were
delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income
on the Mortgaged Properties acquired by foreclosure or deed in lieu
of foreclosure as determined pursuant to
Section 4.01.
PCAOB : The Public Company Accounting Oversight
Board.
Percentage Interest
: As to any Certificate, the
percentage interest evidenced thereby in distributions required to
be made on the related Class, such percentage interest being set
forth on the face thereof or equal to the percentage obtained by
dividing the Denomination of such Certificate by the aggregate of
the Denominations of all Certificates of the same Class.
Permitted Investments
: Any one or more of the following
obligations or securities acquired at a purchase price of not
greater than par, regardless of whether issued by the Servicer, the
Securities Administrator, the Trustee or any of their respective
Affiliates:
(i)
direct obligations of, or obligations
fully guaranteed as to timely payment of principal and interest by,
the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and credit
of the United States;
(ii)
demand and time deposits in, certificates
of deposit of, or 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 and issued
by, any Depository Institution and rated F1+ by Fitch, A-1+ by
Standard & Poor’s and P-1 by Moody’s;
(iii)
repurchase obligations with respect to
any security described in clause (i) above entered into
with a Depository Institution (acting as principal);
(iv)
securities bearing interest or sold at a
discount that are issued by any corporation incorporated under the
laws of the United States of America or any state thereof and that
are rated by Fitch, Moody’s and Standard & Poor’s
(in each case, to the extent they are designated as Rating Agencies
in the Preliminary Statement), and by each other Rating Agency that
rates such securities, in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v)
commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than
30 days after the date of acquisition thereof) that is rated
by Fitch, Moody’s and Standard & Poor’s (in each
case, to the extent they are designated as Rating Agencies in the
Preliminary Statement), and by each other Rating Agency that rates
such securities, in its highest short-term unsecured debt rating
available at the time of such investment;
(vi)
units of money market funds, including
money market funds managed or advised by the Trustee, the
Securities Administrator or an Affiliate thereof, that have been
rated “Aaa” by Moody’s, “AAA” by
Standard & Poor’s and, if rated by Fitch,
“AAA” by Fitch; and
(vii)
if previously confirmed in writing to the
Securities Administrator, any other demand, money market or time
deposit, or any other obligation, security or investment, as may be
acceptable to each of the Rating Agencies as a permitted investment
of funds backing “Aaa” or “AAA” rated
securities;
provided, however
, that no instrument described hereunder
shall evidence either the right to receive (a) only interest
with respect to the obligations underlying such instrument or
(b) both principal and interest payments derived from
obligations underlying such instrument and the interest and
principal payments with respect to such instrument provide a yield
to maturity at par greater than 120.00% of the yield to maturity at
par of the underlying obligations.
Permitted Transferee
: Any Person other than
(i) the United States, any State or political subdivision
thereof, or any agency or instrumentality of any of the foregoing,
(ii) a foreign government, international organization or any
agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers’ cooperatives described
in Section 521 of the Code) which is exempt from tax imposed
by Chapter 1 of the Code (including the tax imposed by
Section 511 of the Code on unrelated business taxable income)
on any excess inclusions (as defined in Section 860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural
electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code, (v) a Person that is a
Disqualified Non-U.S. Person or a U.S. Person with respect to whom
income from a Residual Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an
applicable income tax treaty, of such Person or any other U.S.
Person, (vi) an “electing large partnership”
within the meaning of Section 775 of the Code and
(vii) any other Person so designated by the Depositor based
upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause either
the Lower Tier REMIC or the Upper Tier REMIC to fail to qualify as
a REMIC at any time that the Certificates are outstanding.
The terms “United States”, “State”
and “international organization” shall have the
meanings set forth in Section 7701 of the Code or successor
provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of Freddie Mac, a majority
of its board of directors is not selected by such government
unit.
Person : Any individual, corporation, partnership,
joint venture, association, limited liability company, joint-stock
company, trust, unincorporated organization or government, or any
agency or political subdivision thereof.
Physical Certificates
: As specified in the Preliminary
Statement.
Pool Stated Principal
Balance : As to any
Distribution Date, the aggregate of the Stated Principal Balances
of the Mortgage Loans for such Distribution Date that were
Outstanding Mortgage Loans on the Due Date in the related Due
Period.
Prepayment Charge
: Any prepayment premium, penalty
or charge collected by the Servicer with respect to a Mortgage Loan
from a Mortgagor in connection with any Principal Prepayment
pursuant to the terms of the related Mortgage Note.
Prepayment Interest Excess
: With respect to any Distribution
Date, any interest collected by the Servicer with respect to any
Mortgage Loan as to which a Principal Prepayment occurs from the [
] day of the month through the [ ] day of the
month in which such Distribution Date occurs and that represents
interest that accrues from the 1st day of such month to the date of
such Principal Prepayment.
Prepayment Interest
Shortfall : With respect
to any Distribution Date, the sum of, for each Mortgage Loan that
was, during the portion of the related Prepayment Period from the
first day of such Prepayment Period through the last day of the
month preceding the month in which such Distribution Date occurs,
the subject of a Principal Prepayment which is not accompanied by
an amount equal to one month of interest that would have been due
on such Mortgage Loan on the Due Date that occurs during such
Prepayment Period and which was applied by the Servicer to reduce
the outstanding principal balance of such Mortgage Loan on a date
preceding such Due Date, an amount equal to the product of
(a) the Mortgage Rate net of the Servicing Fee Rate for such
Mortgage Loan, (b) the amount of the Principal Prepayment for
such Mortgage Loan, (c) 1/360 and (d) the number of days
commencing on the date on which such Principal Prepayment was
applied and ending on the last day of the calendar month in which
the related Prepayment Period begins.
Prepayment Period
: With respect to any Distribution
Date and any Principal Prepayment, the period commencing on the [
] day of the month preceding the month in which such
Distribution Date occurs (or in the case of the first Distribution
Date, commencing on the Cut-off Date) and ending on the [
]th day of the month in which that Distribution Date
occurs.
Primary Mortgage Insurance
Policy : Any mortgage
guaranty insurance, if any, on an individual Mortgage Loan as
evidenced by a policy or certificate, whether such policy is
obtained by the originator, the lender or the borrower.
Principal Payment Amount
: For any Distribution Date, the
sum of (i) the Basic Principal Payment Amount for such
Distribution Date and (ii) the Extra Principal Payment Amount
for such Distribution Date.
Principal Prepayment
: Any full or partial payment or
other recovery of principal on a Mortgage Loan (including upon
liquidation of a Mortgage Loan) that is received in advance of its
scheduled Due Date, excluding any Prepayment Charge thereon, and
that is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
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 amount equal to the sum of the following amounts (without
duplication) with respect to the related Due Period:
(i) each scheduled payment of principal on a Mortgage
Loan due during such Due Period and received by the Servicer on or
prior to the related Determination Date or advanced by the Servicer
for the related Remittance Date, (ii) all Principal
Prepayments received during the related Prepayment Period;
(iii) all net Liquidation Proceeds, Condemnation Proceeds and
Insurance Proceeds on the Mortgage Loans allocable to principal,
and all Subsequent Recoveries, actually collected by the Servicer
during the related Prepayment Period; (iv) the portion of the
Repurchase Price allocable to principal with respect to each
Mortgage Loan repurchased by the Mortgage Loan Seller or the
Sponsor, as the case may be, that was repurchased on or prior to
the related Determination Date; and (v) all Substitution
Adjustment Amounts allocable to principal with respect to the
substitutions of Mortgage Loans that occur on or prior to the
related Determination Date; (vi) the allocable portion of the
proceeds received with respect to the termination of the Trust Fund
pursuant to clause (a) of Section 11.01 (to the
extent such proceeds relate to principal).
Private Certificates
: As specified in the Preliminary
Statement.
Prospectus Supplement
: The Prospectus Supplement, dated
[ ], relating to the Offered
Certificates.
PTCE : As defined in
Section 5.02(b).
Purchase Agreement
: The mortgage loan purchase
agreement, dated as of [ ], between
the Depositor and the Sponsor.
Rating Agency : Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is
no longer in existence, “Rating Agency” shall be such
nationally recognized statistical rating organization, or other
comparable Person, as is designated by the Depositor, notice of
which designation shall be given to the Trustee and the Securities
Administrator. References herein to a given rating or rating
category of a Rating Agency shall mean such rating category without
giving effect to any modifiers. For purposes of
Section 12.05(c), the addresses for notices to each Rating
Agency shall be the address specified therefor in the definition
corresponding to the name of such Rating Agency, or such other
address as either such Rating Agency may hereafter furnish to the
Depositor and the Securities Administrator.
Realized Losses
: With respect to any date of
determination and any Liquidated Mortgage Loan, the amount, if any,
by which (a) the unpaid principal balance of such Liquidated
Mortgage Loan together with accrued and unpaid interest thereon
exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of the amount
of unreimbursed Servicing Advances with respect to such Liquidated
Mortgage Loan.
[Record Date : With respect to any Distribution Date, the
close of business on the Business Day immediately preceding such
Distribution Date; provided, however , that, for any
Certificate issued in definitive form, the Record Date shall be the
close of business on the last Business Day of the month preceding
the month in which such applicable Distribution Date occurs (or, in
the case of the first Distribution Date, the Closing
Date).]
Reference Bank : As defined in Section 4.04.
Regulation AB : Subpart [ ] –
Asset Backed Securities (Regulation AB), [ ] C.F.R.
§§[ ], 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. [ ], [ ] Fed. Reg. [
], [ ] ([
]) or by the staff of the
Commission, or as may be provided by the Commission or its staff
from time to time.
Regular Certificates
: As specified in the Preliminary
Statement.
Relevant Servicing Criteria
: The Servicing Criteria applicable to
the various parties, as set forth on Exhibit S attached hereto.
For clarification purposes, multiple parties can have
responsibility for the same Relevant Servicing Criteria. With
respect to a Servicing Function Participant engaged by the Master
Servicer, the Securities Administrator, the Custodian, the Trustee
or the Servicer, the term “Relevant Servicing Criteria”
may refer to a portion of the Relevant Servicing Criteria
applicable to such parties.
Relief Act Interest
Shortfall : With respect
to any Distribution Date and any Mortgage Loan, any reduction in
the amount of interest collectible on such Mortgage Loan for the
most recently ended Due Period as a result of the application of
the Servicemembers Civil Relief Act or any applicable similar state
statutes.
REMIC : Each pool of assets in the Trust Fund
designated as a REMIC pursuant to the Preliminary
Statement.
[REMIC 1 : As described in the Preliminary
Statement.]
[REMIC 2 : As described in the Preliminary
Statement.]
[REMIC 2 Net Funds Cap
: For any Distribution Date (and
the related Interest Accrual Period) and any Class of Certificates,
an amount equal to (i) the weighted average of the interest rates
on the Lower Tier Interests in REMIC 2 (other than any
interest-only regular interest), weighted in proportion to their
Class Principal Amounts as of the beginning of the related Interest
Accrual Period, multiplied by (ii) an amount equal to (a) 30,
divided by (b) the actual number of days in the Interest Accrual
Period.]
[REMIC 3 : As described in the Preliminary
Statement.]
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 regulations
promulgated thereunder, as the foregoing may be in effect from time
to time as well as provisions of applicable state laws.
Remittance Date
: With respect to any Distribution
Date, the [ ] day of the month in which such
Distribution Date occurs, or, if the [ ] is not a
Business Day, the immediately succeeding Business Day.
REO Disposition
: The final sale by the Servicer of
any REO Property.
REO Imputed Interest
: As to any REO Property, for any
period, an amount equivalent to interest (at the Mortgage Rate net
of the applicable Servicing Fee 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 (as such balance is reduced pursuant to
Section 3.17 by any income from the REO Property treated as a
recovery of principal).
REO Mortgage Loan
: A Mortgage Loan where title to
the related Mortgaged Property has been obtained by the Servicer in
the name of the Trustee on behalf of the
Certificateholders.
REO Property : A Mortgaged Property acquired by the Trust
Fund through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Mortgage Loan.
Replacement Receipts
: As defined in Section
4.08.
Replacement Receipts
Account : As defined in
Section 4.08.
Reportable Event
: As defined in Section
8.12(a)(iii).
Reporting Servicer
: As defined in Section
8.12(a)(ii).
Repurchase Price
: With respect to any Mortgage
Loan, an amount equal to the sum of (i) the unpaid principal
balance of such Mortgage Loan as of the date of repurchase,
(ii) interest on such unpaid principal balance of such
Mortgage Loan at the Mortgage Rate from the last date through which
interest has been paid to the date of repurchase, (iii) all
unreimbursed Servicing Advances and (iv) all expenses incurred
by the Master Servicer, the Servicer or Trustee arising out of the
Master Servicer’s, the Servicer’s or Trustee’s
enforcement of the Mortgage Loan Seller’s repurchase
obligation hereunder.
Request for Release
: The Request for Release submitted
by the Servicer to the Trustee, substantially in the form of
Exhibit J.
Residual Certificates
: As specified in the Preliminary
Statement.
Responsible Officer
: When used with respect to the
Trustee, the Securities Administrator, the Master Servicer, any
vice president, any assistant vice president, any assistant
secretary, any assistant treasurer, any associate, or any other
officer of the Trustee, the Securities Administrator or the Master
Servicer customarily performing functions similar to those
performed by any of the above designated officers who at such time
shall be officers to whom, with respect to a particular matter,
such matter is referred because of such officer’s knowledge
of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this
Agreement.
Rolling Three Month Delinquency
Rate : With respect to
any Distribution Date, the average of the Delinquency Rates for
each of the three (or one or two, in the case of the first and
second Distribution Dates) immediately preceding calendar
months.
Rule 144A Letter
: As defined in
Section 5.02(b).
Sarbanes-Oxley
Certification : As
defined in Section 3.24.
Scheduled Payment
: The scheduled monthly payment on
a Mortgage Loan due on any Due Date allocable to principal and/or
interest on such Mortgage Loan which, unless otherwise specified
herein, shall give effect to any related Debt Service Reduction and
any Deficient Valuation that affects the amount of the monthly
payment due on such Mortgage Loan.
Securities Act : The Securities Act of 1933, as
amended.
Securities Administrator
: [ ], and
if a successor securities administrator is appointed hereunder,
such successor.
Securities Administrator Float
Period : With respect to
the Distribution Date and the related amounts in the Distribution
Account, the period commencing on the Remittance Date immediately
preceding such Distribution Date and ending on such Distribution
Date.
Senior Interest Payment
Amount : With respect to
any Distribution Date and any Class of Class [A]
Certificates, the sum of the Interest Payment Amount and the
Interest Carry Forward Amount, if any, for that Distribution Date
for that Class.
Servicer : [ ], and its
successors in interest, and if a successor servicer is appointed
hereunder, such successor.
Servicer Remittance Report
: As defined in
Section 4.03(d).
Service(s)(ing)
: In accordance with Regulation AB,
the act of servicing and administering the Mortgage Loans or any
other assets of the Trust by an entity that meets the definition of
“servicer’ set forth in Item 1101 of Regulation AB and
is subject to the disclosure requirements set forth in Item 1108 of
Regulation AB. For clarification purposes, any uncapitalized
occurrence of this term in this Agreement shall have the meaning
commonly understood by participants in the residential
mortgage-backed securitization market.
Servicing Advances
: The reasonable
“out-of-pocket” costs and expenses (including legal
fees) incurred by the Servicer in the performance of its servicing
obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of
(i) the maintenance, preservation, restoration, inspection and
protection of a Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures and litigation, in
respect of a particular Mortgage Loan, (iii) the management
(including reasonable fees in connection therewith) and liquidation
of any REO Property and (iv) the performance of its
obligations under Sections 3.01, 3.09, 3.13 and 3.15.
The Servicing Advances shall also include any reasonable
“out-of-pocket” costs and expenses (including legal
fees) incurred by the Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or
Assignments of Mortgage in connection with any satisfaction or
foreclosure in respect of any Mortgage Loan to the extent not
recovered from the Mortgagor or otherwise payable under this
Agreement and obtaining or correcting any legal documentation
required to be included in the Mortgage File and necessary for the
Servicer to perform its obligations under this Agreement. The
Servicer shall not be required to make any Nonrecoverable Servicing
Advances.
Servicing Criteria
: The criteria set forth in
paragraph (d) of Item 1122 of Regulation AB, as such may be amended
from time to time.
Servicing Fee : With respect to each Mortgage Loan and for
any calendar month, an amount equal to one month’s interest
(or in the event of any payment of interest which accompanies a
Principal Prepayment made by the Mortgagor during such calendar
month, interest for the number of days covered by such payment of
interest) at the Servicing Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan as of the first day of such
calendar month. Such fee shall be payable monthly, and shall
be prorated for any portion of a month during which the Mortgage
Loan is serviced by the Servicer under this Agreement. The
Servicing Fee is payable solely from the interest portion
(including recoveries with respect to interest from Liquidation
Proceeds, Subsequent Recoveries, Insurance Proceeds, Condemnation
Proceeds and proceeds received with respect to REO Properties)
of such Scheduled Payment collected by the Servicer, or as
otherwise provided under Section 3.11.
Servicing Fee Rate
: [ ]% per
annum.
Servicing File : With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all
documents in the Mortgage File which are not delivered to the
Custodian on behalf of the Trustee in the Custodial File and copies
of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing Function
Participant : Any
Sub-Servicer, Subcontractor or any other Person, other than each
Servicer, the Master Servicer, the Trustee and the Securities
Administrator, that is performing any activities addressed by the
Servicing Criteria, unless such Person’s activities relate
only to 5% or less of the Mortgage Loans.
Servicing Officer
: Any officer of the Servicer
involved in, or responsible for, the administration and servicing
of the Mortgage Loans whose name and facsimile signature appear on
a list of servicing officers furnished to the Master Servicer and
the Trustee by the Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be
amended.
Similar Law : As defined in
Section 5.02(b).
60+ Day Delinquent Mortgage
Loan : Each Mortgage
Loan with respect to which any portion of a Scheduled Payment is,
as of the last day of the prior Due Period, two months or more past
due (without giving effect to any grace period), each Mortgage Loan
in foreclosure, each Mortgage Loan related to REO Property and each
Mortgage Loan where the related Mortgagor has filed for
bankruptcy.
Sponsor : [
],
a [
],
and its successors in interest.
Standard &
Poor’s :
Standard & Poor’s Ratings Services, a division
of The McGraw-Hill Companies, Inc. If Standard &
Poor’s is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 12.05(c) the address for
notices to Standard & Poor’s shall be
Standard & Poor’s, 55 Water Street, New York, New
York 10041, Attention: Residential Mortgage Surveillance
Group – [
],
or such other address as Standard & Poor’s may
hereafter furnish to the Depositor and the Securities
Administrator.
Standard & Poor’s
Glossary : The
Standard & Poor’s LEVELS® Glossary, as may be
in effect from time to time.
Startup Day : The Closing Date.
Stated Principal Balance
: As to each Mortgage Loan and as
of any date of determination, (i) the principal balance of the
Mortgage Loan at the Cut-off Date after giving effect to payments
of principal due on or before such date (whether or not received),
minus (ii) all amounts previously remitted to the Securities
Administrator with respect to the related Mortgage Loan
representing payments or recoveries of principal including advances
in respect of scheduled payments of principal. For purposes
of any Distribution Date, the Stated Principal Balance of any
Mortgage Loan will give effect to any scheduled payments of
principal received by the Servicer on or prior to the related
Determination Date or advanced by the Servicer for the related
Remittance Date and any unscheduled principal payments and other
unscheduled principal collections received during the related
Prepayment Period, and the Stated Principal Balance of any Mortgage
Loan that has prepaid in full or has become a Liquidated Mortgage
Loan during the related Prepayment Period shall be zero.
Stepdown Date : The earlier to occur of (i) the first
Distribution Date following the Distribution Date on which the
aggregate Class Certificate Balances of the Class [A]
Certificates have been reduced to zero and (ii) the later to occur
of (a) the Distribution Date in [
] and (b) the first
Distribution Date on which the Credit Enhancement Percentage for
the Class [A] Certificates (calculated for this purpose only after
taking into account payments of principal applied to reduce the
Stated Principal Balance of the Mortgage Loans for that
Distribution Date but prior to any applications of Principal
Payment Amounts to the Certificates on that Distribution Date) is
greater than or equal to [ ]%.
Subcontractor : Any vendor, subcontractor or other Person
that is not responsible for the overall servicing of the Mortgage
Loans but performs one or more discrete functions identified in
Item 1122(d) of Regulation AB with respect to Mortgage Loans under
the direction or authority of any Servicer (or a Sub-Servicer of
any Servicer), the Master Servicer, the Trustee or the Securities
Administrator.
Subsequent Recovery
: With respect to any Mortgage Loan
or related Mortgaged Property that became a Liquidated Mortgage
Loan or was otherwise disposed of, all amounts received in respect
of such Liquidated Mortgage Loan after an Applied Realized Loss
Amount related to such Mortgage Loan or Mortgaged Property is
allocated to reduce the Class Certificate Balance of any
Class of Class [M] Certificates. Any Subsequent
Recovery that is received during a Prepayment Period will be
included as part of the Principal Remittance Amount for the related
Distribution Date.
Sub-Servicer : Any Person that (i) is considered to be a
Servicing Function Participant, (ii) services Mortgage Loans on
behalf of any Servicer, and (iii) is responsible for the
performance (whether directly or through sub-servicers or
Subcontractors) of Servicing functions required to be performed
under this Agreement, any related servicing agreement or any
sub-servicing agreement that are identified in Item 1122(d) of
Regulation AB.
Subservicing Account
: As defined in
Section 3.08.
Subservicing Agreement
: As defined in
Section 3.02(a).
Substitute Mortgage Loan
: A Mortgage Loan substituted by
the Mortgage Loan Seller or the Sponsor for a Deleted Mortgage Loan
which must, on the date of such substitution, as confirmed in a
Request for Release, substantially in the form of Exhibit J,
(i) have a Stated Principal Balance, after deduction of all
Scheduled Payments due in the month of substitution, not in excess
of the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) be accruing interest at a rate not lower than and not
more than [1.00]% higher than that of the Deleted Mortgage Loan;
(iii) have a remaining term to maturity not greater than (and
not more than one year less than) that of the Deleted Mortgage
Loan; (iv) be of the same type as the Deleted Mortgage Loan;
and (v) comply with each representation and warranty set forth
in Section 2.03.
Substitution Adjustment
Amount : As defined
in Section 2.03.
Supplemental Interest Trust
: The corpus of a trust created
pursuant to Section 4.06 of this Agreement and designated as the
“Supplemental Interest Trust,” consisting of the Swap
Agreement, the Supplemental Interest Trust Account, the right to
receive the Class X Distributable Amount as provided in Section
4.02(a)(iii)(F), the Class LT3-I Interest in REMIC 3 and the right
to receive Class I Shortfalls.
Supplemental Interest Trust
Account : The account
created pursuant to Section 4.06 of this Agreement.
Supplemental Interest Trust
Amount : With respect to
each Distribution Date and the related Swap Payment Date, the sum
of any Net Swap Payment and any Swap Termination Payment deposited
into the Supplemental Interest Trust Account.
Swap Agreement : The interest rate swap agreement entered into
by the Supplemental Interest Trust, which agreement provides for,
among other things, a Net Swap Payment to be paid pursuant to the
conditions provided therein, together with any schedules,
confirmations or other agreements relating thereto, attached hereto
as Exhibit O.
Swap Counterparty
: The counterparty to the
Supplemental Interest Trust under the Swap Agreement, and any
successor in interest or assigns. Initially, the Swap
Counterparty shall be the [
].
Swap Counterparty Trigger
Event : A Swap
Counterparty Trigger Event shall have occurred if any of a Swap
Default with respect to which the Swap Counterparty is a Defaulting
Party, a Termination Event with respect to which the Swap
Counterparty is the sole Affected Party or an Additional
Termination Event with respect to which the Swap Counterparty is
the sole Affected Party has occurred.
Swap Default : Any of the circumstances constituting an
“Event of Default” under the Swap Agreement.
Swap LIBOR : With respect to any Distribution Date (and
the Accrual Period relating to such Distribution Date), the product
of (i) the Floating Rate Option (as defined in the Swap Agreement)
for the related Distribution Date, (ii) two, and (iii) the quotient
of (a) the actual number of days in the Accrual Period for the
LIBOR Certificates and (b) 30, as calculated by the Swap
Counterparty and furnished to the Securities
Administrator.
Swap Termination Payment
: Upon the designation of an
“Early Termination Date” as defined in the Swap
Agreement, the payment required to be made by the Supplemental
Interest Trust to the Swap Counterparty, or by the Swap
Counterparty to the Supplemental Interest Trust, as applicable,
pursuant to the terms of the Swap Agreement, and any unpaid amounts
due on previous Distribution Dates and accrued interest thereon as
provided in the Swap Agreement, as calculated by the Swap
Counterparty and furnished to the Securities
Administrator.
Tax Matters Person
: The Holder of the Class R
Certificates designated as “tax matters person” of each
REMIC created hereunder in the
manner provided under Treasury Regulations Section 1.860F–4(d) and Treasury Regulations
Section 301.6231(a)(7)–1.
Tax Service Contract
: As defined in
Section 3.09(a).
Telerate Page 3750
: The display page currently
so designated on the Bridge Telerate Service (or such other
page as may replace that page on that service for
displaying comparable rates or prices).
Termination Price
: As defined in
Section 11.01.
Termination Receipts
: As defined in Section
4.08.
Termination Receipts
Account : As defined in
Section 4.08.
Total Monthly Excess Spread
: As to any Distribution Date, an
amount equal to the excess, if any, of (i) the interest on the
Mortgage Loans (other than Prepayment Interest Excesses) received
by the Servicer on or prior to the related Determination Date or
advanced by the Servicer for the related Remittance Date (net of
Expense Fees) over (ii) the sum of the amounts payable to the
Certificates pursuant to Section 4.02[
] on such
Distribution Date.
Transfer : Any direct or indirect transfer or sale of
any Ownership Interest in a Residual Certificate.
Transfer Affidavit
: As defined in
Section 5.02(c).
Transferor Certificate
: As defined in
Section 5.02(b).
[Trigger Event : Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.]
Trust : The express trust created hereunder in
Section 2.01(c).
Trust Fund : The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and
principal with respect thereto received on or after the related
Cut-off Date, other than such amounts which were due on the
Mortgage Loans on or prior to the related Cut-off Date;
(ii) the Collection Account, [Excess Reserve Fund Account],
the Distribution Account, the Termination Receipts Amount and the
Replacement Receipts Amount and all amounts deposited therein
pursuant to the applicable provisions of this Agreement;
(iii) property that secured a Mortgage Loan and has been
acquired by foreclosure, deed-in-lieu of foreclosure or otherwise;
(iv) the Depositor’s rights under the Purchase
Agreement; (v) the Insurance Policies; and (vi) all
proceeds of the conversion, voluntary or involuntary, of any of the
foregoing.
Trustee : [
],
a [
],
and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Underwriters’
Exemption : Any
exemption listed under footnote 1 of, and amended by, Prohibited
Transaction Exemption [
], as
amended by [
], PTE [
] and PTE [
], or any
successor exemption.
Unpaid Realized Loss Amount
: With respect to any Class of
Class [M] Certificates and as to any Distribution Date, is the
excess of (i) Applied Realized Loss Amounts with respect to
such Class over (ii) the sum of (a) all
distributions in reduction of such Applied Realized Loss Amounts on
all previous Distribution Dates, and (b) the amount by which
the Class Certificate Balance of such Class has been
increased due to the distribution of any Subsequent Recoveries on
all previous Distribution Dates. Any amounts distributed to a
Class of Class M Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the
Class Certificate Balance of such Class.
[Upper Tier REMIC
: As described in the Preliminary
Statement.]
[Upper Tier REMIC Regular
Interest : As described
in the Preliminary Statement.]
U.S. Person : (i) A citizen or resident of the United
States; (ii) a corporation (or entity treated as a corporation
for tax purposes) created or organized in the United States or
under the laws of the United States or of any State thereof,
including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United
States or of any State thereof, including, for this purpose, the
District of Columbia (unless provided otherwise by future Treasury
regulations); (iv) an estate whose income is includible in
gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United
States is able to exercise primary supervision over the
administration of the trust and one or more U.S. Persons have
authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding
sentence, to the extent provided in Treasury regulations, certain
trusts in existence on August 20, 1996, and treated as U.S.
Persons prior to such date, may elect to continue to be U.S.
Persons.
Voting Rights : The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. As of
any date of determination, [ ]% of all Voting
Rights shall be allocated to each of the Class [X], Class [P]
and Class [R] Certificates, if any (such Voting Rights to be
allocated among the holders of Certificates of each such
Class in accordance with their respective Percentage
Interests) and the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in
proportion to the Certificate Balances of their respective
Certificates on such date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section
2.01
Conveyance of Mortgage
Loans . (a) The
Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys
to the Trustee for the benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and
to the Trust Fund.
Concurrently with the execution of this
Agreement, the Swap Agreement shall be delivered to the Securities
Administrator. In connection therewith, the Depositor hereby
directs the Securities Administrator (solely in its capacity as
Securities Administrator of the Supplemental Interest Trust) and
the Securities Administrator is hereby authorized to execute and
deliver the Swap Agreement (on behalf of the Supplemental Interest
Trust), for the benefit of Certificateholders. The Depositor,
the Sponsor, the Master Servicer, the Servicer, the Mortgage Loan
Seller and the Certificateholders (by their acceptance of such
Certificates) acknowledge and agree that the Securities
Administrator is executing and delivering the Swap Agreement solely
in its capacity as Securities Administrator of the Supplemental
Interest Trust and not in its individual capacity. The
Securities Administrator shall have no duty or responsibility to
enter into any other swap agreement upon the expiration or
termination of the Swap Agreement unless so directed by the
Depositor.
Concurrently with the execution and
delivery of this Agreement, the Depositor does hereby assign to the
Trustee all of its rights and interest under the Purchase
Agreement, including the right to enforce the Sponsor’s
obligation to repurchase or substitute defective Mortgage Loans
under Section 5 of the Purchase Agreement. The Trustee hereby
accepts such assignment, and as set forth herein in Section
2.03(k), shall be entitled to exercise all the rights of the
Depositor under the Purchase Agreement as if, for such purpose, it
were the Depositor.
(b)
In connection with the transfer and
assignment of each Mortgage Loan, the Depositor has delivered or
caused to be delivered to the Custodian for the benefit of the
Certificateholders the following documents or instruments with
respect to each Mortgage Loan so assigned:
(i)
the original Mortgage Note bearing all
intervening endorsements necessary to show a complete chain of
endorsements from the original payee, endorsed in blank, “Pay
to the order of _____________, without recourse”, and, if
previously endorsed, signed in the name of the last endorsee by a
duly qualified officer of the last endorsee;
(ii)
the original Assignment of Mortgage for
each Mortgage Loan, in form and substance acceptable for recording.
The Mortgage shall be assigned, with assignee’s name
left blank;
(iii)
the original of each guarantee executed
in connection with the Mortgage Note, if any;
(iv)
the original recorded Mortgage, with
evidence of recording thereon. If in connection with
any Mortgage Loan, the original Mortgage cannot be delivered with
evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office
retains the original recorded Mortgage, the Mortgage Loan Seller
shall deliver or cause to be delivered to the Custodian,
(A) in the case of a delay caused by the public recording
office, a copy of such Mortgage certified by the Mortgage Loan
Seller, escrow agent, title insurer or closing attorney to be a
true and complete copy of the original recorded Mortgage and
(B) in the case where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage;
(v)
originals or a certified copy of each
modification agreement, if any;
(vi)
the originals of all intervening
assignments of Mortgage with evidence of recording thereon
evidencing a complete chain of ownership from the originator of the
Mortgage Loan to the last assignee, or if any such intervening
assignment of Mortgage has not been returned from the applicable
public recording office or has been lost or if such public
recording office retains the original recorded intervening
assignments of Mortgage, a photocopy of such intervening assignment
of Mortgage, together with (A) in the case of a delay caused
by the public recording office, an officer’s certificate of
the Mortgage Loan Seller, escrow agent, closing attorney or the
title insurer insuring the Mortgage stating that such intervening
assignment of Mortgage has been delivered to the appropriate public
recording office for recordation and that such original recorded
intervening assignment of Mortgage or a copy of such intervening
assignment of Mortgage certified by the appropriate public
recording office to be a true and complete copy of the original
recorded intervening assignment of Mortgage will be promptly
delivered to the Custodian upon receipt thereof by the party
delivering the officer’s certificate or by the Mortgage Loan
Seller; or (B) in the case of an intervening assignment of
mortgage where a public recording office retains the original
recorded intervening assignment of Mortgage or in the case where an
intervening assignment of Mortgage is lost after recordation in a
public recording office, a copy of such intervening assignment of
Mortgage with recording information thereon certified by such
public recording office to be a true and complete copy of the
original recorded intervening assignment of Mortgage;
(vii)
if the Mortgage Note, the Mortgage, any
Assignment of Mortgage or any other related document has been
signed by a Person on behalf of the Mortgagor, the copy of the
power of attorney or other instrument that authorized and empowered
such Person to sign;
(viii)
the original lender’s title
insurance policy (or a marked title insurance commitment, in the
event that an original lender’s title insurance policy has
not yet been issued) in the form of an ALTA mortgage title
insurance policy, containing all required endorsements and insuring
the Trustee and its successors and assigns as to the first priority
lien of the Mortgage in the original principal amount of the
Mortgage Loan;
(ix)
the original of any Primary Mortgage
Insurance Policy or certificate or, an electronic certification,
evidencing the existence of the Primary Mortgage Insurance Policy
or certificate, if private mortgage guaranty insurance is required;
and
(x)
original of any security agreement,
chattel mortgage or equivalent document executed in connection with
the Mortgage, if any.
To the extent not previously delivered to
the Sponsor pursuant to the Master MLPSA, the Mortgage Loan Seller
shall promptly upon receipt from the respective recording office
cause to be delivered to the Custodian the original recorded
document described in clauses (iv) and (vi) above.
From time to time, the Mortgage Loan
Seller, the Depositor or the Servicer, as applicable, shall forward
to the Custodian additional original documents, additional
documents evidencing an assumption, modification, consolidation or
extension of a Mortgage Loan, in accordance with the terms of this
Agreement upon receipt of such documents. All such mortgage
documents held by the Custodian as to each Mortgage Loan shall
constitute the “ Custodial File ”.
To the extent not previously delivered to
the Sponsor pursuant to the Master MLPSA, on or prior to the
Closing Date, the Mortgage Loan Seller shall deliver to the
Custodian Assignments of Mortgages, in blank, for each Mortgage
Loan. No later than thirty (30) Business Days following the
later of the Closing Date and the date of receipt by the Servicer
of the complete recording information for a Mortgage, the Servicer
shall promptly submit or cause to be submitted for recording, at
the expense of the Mortgage Loan Seller and at no expense to the
Trust Fund, the Trustee, the Servicer or the Depositor, in the
appropriate public office for real property records, each
Assignment of Mortgage referred to in Section 2.01(b)(ii).
Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be
completed and submitted for recording with respect to any Mortgage
Loan if the Trustee and each Rating Agency have received an
Opinion of Counsel, satisfactory in form and substance to the
Trustee and each Rating Agency to the effect that the recordation
of such Assignments of Mortgage in any specific jurisdiction is not
necessary to protect the Trust Fund’s interest in the related
Mortgage Note. If the Assignment of Mortgage is to be
recorded, the Mortgage shall be assigned by the Mortgage Loan
Seller, at the expense of the Mortgage Loan Seller, to “[
],
as trustee under the Pooling and Servicing Agreement dated as of [
], for HSI Asset Securitization Corporation
Trust [ ]”.
In the event that any such Assignment of Mortgage is lost or
returned unrecorded because of a defect therein, the Mortgage Loan
Seller shall promptly cause to be delivered a substitute Assignment
of Mortgage to cure such defect and thereafter cause each such
assignment to be duly recorded at no expense to the Trust
Fund.
In the event that such original or copy
of any document submitted for recordation to the appropriate public
recording office is not so delivered to the Trustee within
180 days (or such other time period as may be required by any
Rating Agency) following the Closing Date, and in the event that
the Mortgage Loan Seller does not cure such failure within
30 days of discovery or receipt of written notification of
such failure from the Depositor, the related Mortgage Loan shall,
upon the request of the Depositor, be repurchased by the Mortgage
Loan Seller at the price and in the manner specified in
Section 2.03. The foregoing repurchase obligation shall
not apply in the event that the Mortgage Loan Seller cannot deliver
such original or copy of any document submitted for recordation to
the appropriate public recording office within the specified period
due to a delay caused by the recording office in the applicable
jurisdiction; provided , that the Mortgage Loan Seller shall
instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer’s
certificate of an officer of the Mortgage Loan Seller, confirming
that such document has been accepted for recording.
Notwithstanding anything to the contrary
contained in this Section 2.01, in those instances where the
public recording office retains or loses the original Mortgage or
assignment after it has been recorded, the obligations of the
Mortgage Loan Seller shall be deemed to have been satisfied upon
delivery by the Mortgage Loan Seller to the Trustee, prior to the
Closing Date of a copy of such Mortgage or assignment, as the case
may be, certified (such certification to be an original thereof) by
the public recording office to be a true and complete copy of the
recorded original thereof.
(c)
The Depositor does hereby establish,
pursuant to the further provisions of this Agreement and the laws
of the State of New York, an express trust (the “
Trust ”) to be known, for convenience, as “HSI
Asset Securitization Corporation Trust [
]” and [
] is hereby appointed as
Trustee and [ ] is appointed as
Securities Administrator in accordance with the provisions of this
Agreement. The parties hereto acknowledge and agree that it
is the policy and intention of the Trust to acquire only Mortgage
Loans meeting the requirements set forth in this Agreement,
including without limitation, the representations and warranties
set forth in the Schedules hereto.
(d)
The Trust shall have the capacity, power
and authority, and the Trustee on behalf of the Trust is hereby
authorized, to accept the sale, transfer, assignment, set over and
conveyance by the Depositor to the Trust of all the right, title
and interest of the Depositor in and to the Trust Fund (including,
without limitation, the Mortgage Loans) pursuant to
Section 2.01(a).
Section
2.02
Acceptance by the Trustee of the
Mortgage Loans . The
Custodian shall acknowledge, on the Closing Date, receipt by the
Custodian of the documents identified in the Initial Certification
in the form annexed hereto as Exhibit E (“ Initial
Certification ”), and declares that it holds and will
hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it holds or will hold such
other assets as are included in the Trust Fund, in trust for the
exclusive use and benefit of all present and future
Certificateholders. The Custodian shall maintain possession
of the related Mortgage Notes in the State of [
], unless otherwise
permitted by the Rating Agencies.
In connection with the Closing Date, the
Custodian shall be required to deliver via facsimile (with original
to follow the next Business Day) to the Depositor an Initial
Certification prior to the Closing Date, or, as the Depositor
agrees on the Closing Date, certifying receipt of a Mortgage Note
and Assignment of Mortgage for each Mortgage Loan. The
Custodian shall not be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodian
File.
Within 90 days after the Closing
Date, the Custodian shall ascertain that all documents identified
in the Document Certification and Exception Report in the form
attached hereto as Exhibit F are in its possession, and shall
deliver to the Depositor, the Mortgage Loan Seller and the Servicer
a Document Certification and Exception Report, in the form annexed
hereto as Exhibit F, to the effect that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in
such certification as an exception and not covered by such
certification): (i) all documents identified in the
Document Certification and Exception Report and required to be
reviewed by it are in its possession; (ii) such documents have
been reviewed by it and appear regular on their face and relate to
such Mortgage Loan; (iii) based on its examination and only as
to the foregoing documents, the information set forth in
items (1), (2), (3), (15), (18) and (22) of the Data Tape
Information respecting such Mortgage Loan is correct; and
(iv) each Mortgage Note has been endorsed as provided in
Section 2.01 of this Agreement. Neither the Trustee nor
the Custodian shall be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodial
File.
The Custodian shall retain possession and
custody of each Custodial File in accordance with and subject to
the terms and conditions set forth herein. The Servicer shall
promptly deliver to the Custodian, upon the execution or receipt
thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the
Servicer from time to time.
The Mortgage Loan Seller shall deliver to
the Servicer copies of all trailing documents required to be
included in the Custodial File at the same time the original or
certified copies thereof are delivered to the Custodian, including
but not limited to such documents as the title insurance policy and
any other Mortgage Loan documents upon return from the public
recording office. The documents shall be delivered by the
Mortgage Loan Seller at such Mortgage Loan Seller’s expense
to the Servicer.
Section
2.03
Representations, Warranties and
Covenants of the Mortgage Loan Seller and the Servicer; Remedies
for Breaches of Representations and Warranties with Respect to the
Mortgage Loans .
(a) [ ], in its capacity as
Servicer makes the representations and warranties set forth in
Schedule II hereto, to the Depositor, the Master
Servicer, the Securities Administrator and the Trustee as of the
Closing Date.
(b)
[
], in its capacity
as Mortgage Loan Seller, makes the representations and warranties
set forth in Schedule III and Schedule IV hereto, to the
Depositor, the Master Servicer, the Securities Administrator and
the Trustee as of the date specified therein.
(c)
It is understood and agreed by the
Servicer and the Mortgage Loan Seller that the representations and
warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee on
the Closing Date, and shall inure to the benefit of the Depositor,
the Trustee and the Trust Fund notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by the Mortgage Loan Seller, the
Depositor, the Securities Administrator, the Trustee, the Master
Servicer or the Servicer of a breach of any of the foregoing
representations and warranties, the party discovering such breach
shall give prompt written notice to the others.
(d)
Within 30 days of the earlier of
either discovery by or notice to the Mortgage Loan Seller that any
Mortgage Loan does not conform to the requirements as determined in
the Custodian’s review of the related Custodial File or
within 60 days of the earlier of either discovery by or notice
to the Mortgage Loan Seller of any breach of a representation or
warranty referred to in Section 2.03(b) that materially and
adversely affects the value of any Mortgage Loan or the interest of
the Trustee or the Certificateholders therein, the Mortgage Loan
Seller shall use its best efforts to cause to be remedied a
material defect in a document constituting part of a Mortgage File
or promptly to cure such breach in all material respects and, if
such defect or breach cannot be remedied, the Mortgage Loan Seller
shall, at the Depositor’s option as specified in writing and
provided to the Mortgage Loan Seller and the Trustee, (i) if
such 30- or 60-day period, as applicable, expires prior to the
second anniversary of the Closing Date, remove such Mortgage Loan
(a “ Deleted Mortgage Loan ”) from the Trust
Fund and substitute in its place a Substitute Mortgage Loan, in the
manner and subject to the conditions set forth in this
Section 2.03; or (ii) repurchase such Mortgage Loan at
the Repurchase Price; provided, however , that any such
substitution pursuant to clause (i) above shall not be
effected prior to the delivery to the Custodian of a Request for
Release substantially in the form of Exhibit J, and the
delivery of the Mortgage File to the Custodian for any such
Substitute Mortgage Loan. Notwithstanding the foregoing, a
breach (i) which causes a Mortgage Loan not to constitute a
“qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code or (ii) of any of the
representations and warranties set forth in clauses [
] of Schedule III
with respect to a Group I Mortgage Loan, will be deemed
automatically to materially and adversely affect the value of such
Mortgage Loan and the interests of the Trustee and
Certificateholders in such Mortgage Loan, requiring the repurchase
or substitution of such Mortgage Loan by the Mortgage Loan Seller.
In the event that the Trustee receives notice of a breach by
the Mortgage Loan Seller of any of the representations and
warranties described in the immediately preceding sentence, the
Trustee shall give notice of such breach to the Mortgage Loan
Seller and request the Mortgage Loan Seller to substitute such
Mortgage Loan or to repurchase such Mortgage Loan at the Repurchase
Price within sixty (60) days of the receipt of such notice.
The Mortgage Loan Seller shall repurchase each such Mortgage
Loan within 60 days of the earlier of discovery or receipt of
notice with respect to each such Mortgage Loan.
(e)
With respect to any Substitute Mortgage
Loan or Loans, the Mortgage Loan Seller shall deliver to the
Custodian for the benefit of the Certificateholders the Mortgage
Note, the Mortgage, the related assignment of the Mortgage, and
such other documents and agreements as are required by
Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution is
permitted to be made with respect to any Distribution Date after
the end of the related Prepayment Period. Scheduled Payments
due with respect to Substitute Mortgage Loans in the Due Period of
substitution shall not be part of the Trust Fund and will be
retained by the Mortgage Loan Seller on the next succeeding
Distribution Date. For the Due Period of substitution,
distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for such Due Period and
thereafter the Mortgage Loan Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage
Loan.
(f)
The Servicer shall amend the Mortgage
Loan Schedule for the benefit of the Certificateholders to reflect
the removal of such Deleted Mortgage Loan and the substitution of
the Substitute Mortgage Loan or Loans and the Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee and the
Custodian. Upon such substitution, the Substitute Mortgage
Loan or Loans shall be subject to the terms of this Agreement in
all respects, and the Mortgage Loan Seller shall be deemed to have
made with respect to such Substitute Mortgage Loan or Loans, as of
the date of substitution, the representations and warranties made
pursuant to Section 2.03(b) with respect to such Mortgage
Loan. Upon any such substitution and the deposit to the
Collection Account of the amount required to be deposited therein
in connection with such substitution as described in the following
paragraph, the Custodian shall release the Mortgage File held for
the benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the Mortgage Loan Seller and the Trustee, upon
receipt of a Request for Release certifying that all amounts
required to be deposited in accordance with this Section 2.03(f)
have been deposited in the Collection Account, shall execute and
deliver at the Mortgage Loan Seller’s direction such
instruments of transfer or assignment prepared by the Mortgage Loan
Seller in each case without recourse, as shall be necessary to vest
title in the Mortgage Loan Seller of the Trustee’s interest
in any Deleted Mortgage Loan substituted for pursuant to this
Section 2.03.
(g)
For any month in which the Mortgage Loan
Seller substitutes one or more Substitute Mortgage Loans for one or
more Deleted Mortgage Loans, the Servicer will determine the amount
(if any) by which the aggregate unpaid principal balance of all
such Substitute Mortgage Loans as of the date of substitution is
less than the aggregate unpaid principal balance of all such
Deleted Mortgage Loans. The amount of such shortage plus an
amount equal to the aggregate of any unreimbursed Advances with
respect to such Deleted Mortgage Loans (collectively, the “
Substitution Adjustment Amount ”) shall be remitted by
the Mortgage Loan Seller to the Servicer for deposit into the
Collection Account on or before the Distribution Account Deposit
Date for the Distribution Date in the month succeeding the calendar
month during which the related Mortgage Loan became required to be
purchased or replaced hereunder.
(h)
In addition to the repurchase or
substitution obligations referred to in Section 2.03(d) above
and Section 2.03 (k) below, the Mortgage Loan Seller or the
Sponsor, as applicable, shall indemnify the Depositor, any of its
Affiliates, the Master Servicer, the Servicer, the Securities
Administrator, the Trustee and the Trust and hold such parties
harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs,
judgments and other costs and expenses (including, without
limitation, any taxes payable by the Trust) resulting from any
third party claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach by the Mortgage Loan
Seller or the Sponsor, as applicable, of any of its representations
and warranties or obligations contained in this
Agreement.
(i)
The Servicer shall amend the Mortgage
Loan Schedule for the benefit of the Certificateholders to reflect
the removal of such Deleted Mortgage Loan and the Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee, the
Custodian, the Master Servicer and the Securities
Administrator.
(j)
In the event that a Mortgage Loan shall
have been repurchased pursuant to this Agreement or the Purchase
Agreement, the proceeds from such repurchase shall be deposited by
the Servicer in the Collection Account pursuant to
Section 3.10 on or before the Remittance Date for the
Distribution Date in the month following the month during which the
Mortgage Loan Seller or Sponsor became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Repurchase
Price, and receipt of a Request for Release in the form of
Exhibit J hereto, the Custodian shall release the related
Custodial File held for the benefit of the Certificateholders to
the Mortgage Loan Seller or the Sponsor, as applicable, as directed
by the Servicer, and the Trustee shall execute and deliver at such
Person’s direction such instruments of transfer or assignment
prepared by such Person, in each case without recourse, as shall be
necessary to transfer title from the Trustee. In accordance
with Section 12.05(a), the Securities Administrator shall
promptly notify each Rating Agency of a purchase of a Mortgage Loan
pursuant to this Section 2.03.
It is understood and agreed that the
obligation of the Mortgage Loan Seller under this Agreement to
cure, repurchase or substitute any Mortgage Loan as to which a
breach of a representation and warranty has occurred and is
continuing, together with any related indemnification obligations
of the Mortgage Loan Seller set forth in Section 2.03(h),
shall constitute the sole remedies against such Person respecting
such breach available to Certificateholders, the Depositor and any
of its Affiliates, or the Trustee on their behalf.
(k)
The Trustee acknowledges that, except as
provided in Section 5 of the Purchase Agreement, the Sponsor shall
not have any obligation or liability with respect to any breach of
a representation or warranty made by it with respect to a Mortgage
Loan sold by it, provided that such representation or
warranty was also made by the Mortgage Loan Seller with respect to
the related Mortgage Loan. It is understood and agreed that
the representations and warranties of the Sponsor set forth in
Section 4 of the Purchase Agreement and assigned to the Trustee by
the Depositor hereunder shall survive the transfer of the Mortgage
Loans by the Depositor to the Trustee on the Closing Date, and
shall inure to the benefit of the Trustee and the
Certificateholders notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment of Mortgage and
shall continue throughout the term of this Agreement. Upon
the discovery by any of the Sponsor, the Depositor, the Securities
Administrator, the Trustee, the Master Servicer or the Servicer of
a breach of any of the Sponsor’s representations and
warranties set forth in Section 4 of the Purchase Agreement, the
party discovering the breach shall give prompt written notice to
the others. Within [ ] days of the earlier
of either discovery by or notice to the Sponsor of any breach of
any of the foregoing representations or warranties that materially
and adversely affects the value of any Mortgage Loan or the
interest of the Trustee or the Certificateholders therein, the
Sponsor shall use its best efforts to cure such breach in all
material respects and, if such defect or breach cannot be remedied,
the Sponsor shall, at the Depositor’s instructions as
specified in writing and provided to the Sponsor and the Trustee,
(i) if such [ ]-day period expires prior to the
second anniversary of the Closing Date, remove such Mortgage Loan
from the Trust Fund and substitute in its place a Substitute
Mortgage Loan, in the same manner and subject to the same
conditions set forth in this Section 2.03 that apply to
repurchases or substitutions of Mortgage Loans by the Mortgage Loan
Seller or (ii) repurchase such Mortgage Loan at the Repurchase
Price; provided, however , that any such substitution
pursuant to clause (i) above shall not be effected prior
to the delivery to the Custodian of a Request for Release
substantially in the form of Exhibit J, and the delivery of
the Mortgage File to the Custodian for any such Substitute Mortgage
Loan. In the event of any such repurchase or substitution of
a Mortgage Loan by the Sponsor, the procedures set forth in
Sections 2.03(e), (f), (g), (h), (i) and (j) shall apply to the
Sponsor in the same manner and to the same extent that they are
applicable to the Mortgage Loan Seller. It is understood and
agreed that the obligations of the Sponsor under this Agreement to
cure, repurchase or substitute any Mortgage Loan as to which a
breach of a representation and warranty has occurred and is
continuing, together with any related indemnification obligations
of the Sponsor set forth in Section 2.03(h), shall constitute the
sole remedies against the Sponsor available to the
Certificateholders, the Depositor and any of its affiliates, or the
Trustee on their behalf.
The provisions of this Section 2.03
shall survive delivery of the respective Custodial Files to the
Custodian for the benefit of the Certificateholders.
Section
2.04
Execution and Delivery of
Certificates . The
Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, the
Securities Administrator has executed and delivered to, or upon the
order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the
Trust Fund and exercise the rights referred to above for the
benefit of all present and future Holders of the
Certificates.
Section
2.05
REMIC Matters . The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests
created hereby. The “ Startup Day ” for
purposes of the REMIC Provisions shall be the Closing Date.
The “ latest possible maturity date ” is
the Distribution Date occurring in [
], which is the
Distribution Date in the month following the month in which the
latest Mortgage Loan maturity date occurs.
Section
2.06
Representations and Warranties of the
Depositor . The
Depositor hereby represents, warrants and covenants to the other
parties to this agreement that as of the date of this Agreement or
as of such date specifically provided herein:
(a)
The Depositor is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware;
(b)
The Depositor has the power and authority
to convey the Mortgage Loans and to execute, deliver and perform,
and to enter into and consummate transactions contemplated by, this
Agreement;
(c)
This Agreement has been duly and validly
authorized, executed and delivered by the Depositor, all requisite
company action having been taken, and, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes or will constitute the legal, valid and binding
agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of creditors
generally, and by general equity principles (regardless of whether
such enforcement is considered in a proceeding in equity or at
law);
(d)
No consent, approval, authorization or
order of, or registration or filing with, or notice to, any
governmental authority or court is required for the execution,
delivery and performance of or compliance by the Depositor with
this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been received or
obtained on or prior to the Closing Date;
(e)
None of the execution and delivery of
this Agreement, the consummation of the transactions contemplated
hereby or thereby, or the fulfillment of or compliance with the
terms and conditions of this Agreement, (i) conflicts or will
conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result
in an acceleration under (A) the charter or bylaws of the
Depositor, or (B) of any term, condition or provision of any
material indenture, deed of trust, contract or other agreement or
instrument to which the Depositor or any of its subsidiaries is a
party or by which it or any of its subsidiaries is bound;
(ii) results or will result in a violation of any law, rule,
regulation, order, judgment or decree applicable to the Depositor
of any court or governmental authority having jurisdiction over the
Depositor or its subsidiaries; or (iii) results in the
creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any
documents or instruments evidencing or securing the Mortgage
Loans;
(f)
There are no actions, suits or
proceedings before or against or investigations of, the Depositor
pending, or to the knowledge of the Depositor, threatened, before
any court, administrative agency or other tribunal, and no notice
of any such action, which, in the Depositor’s reasonable
judgment, might materially and adversely affect the performance by
the Depositor of its obligations under this Agreement, or the
validity or enforceability of this Agreement;
(g)
The Depositor 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 that would materially and adversely affect its
performance hereunder; and
(h)
Immediately prior to the transfer and
assignment by the Depositor to the Trustee on the Closing Date, the
Depositor had good title to, and was the sole owner of each
Mortgage Loan, free of any interest of any other Person, and the
Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage
Note and the Mortgage as and in the manner contemplated by this
Agreement is sufficient either (i) fully to transfer to the
Trustee, for the benefit of the Certificateholders, all right,
title, and interest of the Depositor thereto as note holder and
mortgagee or (ii) to grant to the Trustee, for the benefit of
the Certificateholders, the security interest referred to in
Section 12.04.
It is understood and agreed that the
representations, warranties and covenants set forth in this
Section 2.06 shall survive delivery of the respective Mortgage
Files to the Custodian and shall inure to the benefit of the
Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section
3.01
Servicer to Service Mortgage
Loans .
(a) For and on behalf of the Certificateholders,
the Servicer shall service and administer the Mortgage Loans in
accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in
accordance with Accepted Servicing Practices, but without regard
to:
(i)
any relationship that the Servicer, any
Subservicer or any Affiliate of the Servicer or any Subservicer may
have with the related Mortgagor;
(ii)
the ownership or non-ownership of any
Certificate by the Servicer or any Affiliate of the
Servicer;
(iii)
the Servicer’s obligation to make
P&I Advances or Servicing Advances; or
(iv)
the Servicer’s or any
Subservicer’s right to receive compensation for its services
hereunder or with respect to any particular transaction.
To the extent consistent with the
foregoing, the Servicer shall seek to maximize the timely and
complete recovery of principal and interest on the Mortgage Notes.
Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans,
the Servicer shall have full power and authority, acting alone or
through Subservicers as provided in Section 3.02, to do or
cause to be done any and all things in connection with such
servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing,
the Servicer in its own name or in the name of a Subservicer is
hereby authorized and empowered by the Trustee when the Servicer
believes it appropriate in its best judgment in accordance with
Accepted Servicing Practices to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with
respect to the Mortgage Loans and the Mortgaged Properties and to
institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and
to hold or cause to be held title to such properties, on behalf of
the Trustee; provided, further , that upon the full release
or discharge, the Servicer shall notify the Custodian of the
Mortgage Loan of such full release or discharge. The Servicer
shall at its own expense be responsible for preparing and recording
all lien releases and mortgage satisfactions in accordance with
state and local regulations. The Servicer shall service and
administer the Mortgage Loans in accordance with applicable state
and federal law and shall provide to the Mortgagors any reports
required to be provided to them thereby. The Servicer shall
also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any
standard hazard insurance policy or any Primary Mortgage Insurance
Policy. Subject to Section 3.16, the Trustee shall
execute, at the written request of the Servicer, and furnish to the
Servicer and any Subservicer such documents provided to the Trustee
as are necessary or appropriate to enable the Servicer or any
Subservicer to carry out their servicing and administrative duties
hereunder, and the Trustee hereby grants to the Servicer, and this
Agreement shall constitute, a power of attorney to carry out such
duties including a power of attorney to take title to Mortgaged
Properties after foreclosure on behalf of the Trustee. The
Trustee shall execute a separate power of attorney, furnished to it
by the Servicer, in favor of the Servicer for the purposes
described herein to the extent necessary or desirable to enable the
Servicer to perform its duties hereunder. The Trustee shall
not be liable for the actions of the Servicer or any Subservicers
under such powers of attorney. Notwithstanding anything
contained herein to the contrary, no Servicer or Subservicer shall
without the Trustee’s consent: (i) initiate any action, suit
or proceeding solely under the Trustee’s name without
indicating the Servicer’s or Subservicer’s, as
applicable, representative capacity, or (ii) knowingly take any
action with the intent to, or which actually does cause, the
Trustee to be registered to do business in any state.
(b)
Subject to Section 3.09(b), in
accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary
for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from the
collection from the Mortgagors pursuant to Section 3.09(b),
and further as provided in Section 3.11. Any cost
incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not
be added to the unpaid principal balance of the related Mortgage
Loan, notwithstanding that the terms of such Mortgage Loan so
permit.
(c)
Notwithstanding anything in this
Agreement to the contrary, the Servicer may not make any future
advances with respect to a Mortgage Loan (except as provided in
Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change
the Mortgage Rate, reduce or increase the principal balance (except
for reductions resulting from actual payments of principal) or
change the final maturity date on such Mortgage Loan (except for a
reduction of interest payments resulting from the application of
the Servicemembers Civil Relief Act or any similar state statutes)
or (ii) permit any modification, waiver or amendment of any
term of any Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under
Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and (B) cause
either the [Upper Tier] REMIC or a [Lower Tier] REMIC to fail to
qualify as a REMIC under the Code or the imposition of any tax on
“prohibited transactions” or “contributions after
the startup day” under the REMIC Provisions, or
(iii) except as provided in Section 3.07(a), waive any
Prepayment Charges.
(d)
The Servicer may delegate its
responsibilities under this Agreement; provided, however ,
that no such delegation shall release the Servicer from the
responsibilities or liabilities arising under this
Agreement.
Section
3.02
Subservicing Agreements between
Servicer and Subservicers; Use of Subcontractors
. (a) The Servicer may enter into a
subservicing agreement with a Subservicer, for the servicing and
administration of the Mortgage Loans (“ Subservicing
Agreement ”) without obtaining the prior consent of the
Trustee, the Depositor, the Master Servicer, Securities
Administrator or other parties hereto to the utilization of any
such Subservicer, provided the provisions of such Subservicing
Agreement comply with the requirements set forth of this Section
3.02. None of the Trustee, the Master Servicer or the
Depositor shall be required to review or consent to such
Subservicing Agreement and shall have no liability in connection
therewith.
(b)
Each Subservicer shall be
(i) 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 (ii) a Freddie Mac or Fannie Mae
approved mortgage servicer. Each Subservicing Agreement must
impose on the Subservicer requirements conforming to the provisions
set forth in Sections 3.08, 3.22, 3.23, 3.24, 3.29, 6.05,
6.06, 7.01(i) and Exhibit S of this Agreement to the same extent as
if such Subservicer were the Servicer and otherwise provide for
servicing of the Mortgage Loans consistent with the terms of this
Agreement. The Servicer shall examine each Subservicing
Agreement and will be familiar with the terms thereof in order to
determine that the foregoing requirements have been incorporated
into the Subservicing Agreement and that the terms thereof are not
otherwise inconsistent with any of the provisions of this
Agreement. The Servicer and the Subservicers may enter into
and make amendments to the Subservicing Agreements or enter into
different forms of Subservicing Agreements; provided,
however , that any such amendments or different forms shall be
consistent with and not violate the provisions of this Agreement,
and that no such amendment or different form shall be made or
entered into which could be reasonably expected to be materially
adverse to the interests of the Trustee, the Master Servicer or the
Securities Administrator without their prior written consent.
Any variation without the consent of the Trustee, Depositor
and Master Servicer from the requirements set forth in
Sections 3.08, 3.22, 3.23, 3.24, 6.05, 6.06, 7.01(i) and
Exhibit S, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Servicer shall
deliver to the Master Servicer, the Securities Administrator, the
Trustee and the Depositor copies of all Subservicing Agreements,
and any amendments or modifications thereof, promptly upon the
Servicer’s execution and delivery of such
instruments.
(c)
As part of its servicing activities
hereunder, the Servicer (except as otherwise provided in the last
sentence of this paragraph) shall enforce the obligations of each
Subservicer under the related Subservicing Agreement, including,
without limitation, (i) any obligation to make advances in respect
of delinquent payments as required by a Subservicing Agreement and
(ii) the reporting obligations set forth under Section 3.22, 3.23,
3.24 and 3.29 hereof to the same extent as if such Subservicer were
the Servicer. The Servicer shall be responsible for obtaining
from each Subservicer and delivering to the Master Servicer, the
Securities Administrator and the Depositor (i) any servicer annual
compliance statement required to be delivered by such Subservicer
under Section 3.24(b); (ii) assessments and attestations of
compliance with Relevant Servicing Criteria required to be
delivered by the Subservicer pursuant to Sections 3.22 and 3.23;
and (iii) any certifications required to be delivered under Section
3.24(a) to the Master Servicer or such other Person that will be
responsible for signing the Sarbanes-Oxley Certification as and
where required to be delivered hereunder. Such enforcement,
including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements, 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 Servicer, in its good faith
business judgment, would require were it the owner of the related
Mortgage Loans. The 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 Loans or
(ii) from a specific recovery of costs, expenses or
attorneys’ fees against the party against whom such
enforcement is directed.
(d)
It shall not be necessary for the
Servicer to seek the consent of the Depositor, the Trustee, the
Master Servicer, the Securities Administrator or other parties
hereto to the utilization of a Subcontractor. The Servicer
shall give prior written notice to the Master Servicer and the
Depositor of the appointment of any Subcontractor and provide a
written description (in form and substance satisfactory to the
Depositor) of the role and function of each Subcontractor
specifying (i) the eligibility of each such Subcontractor, (ii)
which, if any, of such Subcontractors are Servicing Function
Participants, (iii) which elements of the Servicing Criteria set
forth under Item 1122(d) of Regulation AB will be addressed in
assessments and attestations of compliance with Relevant Servicing
Criteria provided by such Subcontractor identified pursuant to
clause (ii) of this paragraph.
(e)
As a condition to the utilization of any
Subcontractor determined to be a Servicing Function Participant,
the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) to comply with the provisions of
Sections 3.22, 3.23, 3.24, 3.29, 6.05, 6.06, 7.01(i) and Exhibit S
of this Agreement to the same extent as if such Subcontractor were
the Servicer. The Servicer shall be responsible for obtaining
from each Subcontractor and delivering the Securities
Administrator, the Master Servicer and the Depositor any
assessments and attestations of compliance required to be delivered
by such Subcontractor pursuant to Sections 3.22 and 3.23, in each
case as and when required to be delivered.
Section
3.03
Successor Subservicers
. The Servicer shall be entitled to
terminate any Subservicing Agreement and the rights and obligations
of any Subservicer pursuant to any Subservicing Agreement in
accordance with the terms and conditions of such Subservicing
Agreement. In the event of termination of any Subservicer,
all servicing obligations of such Subservicer shall be assumed
simultaneously by the Servicer without any act or deed on the part
of such Subservicer or Servicer, and the Servicer either shall
service directly the related Mortgage Loans or shall enter into a
Subservicing Agreement with a successor subservicer which qualifies
under Section 3.02.
Any Subservicing Agreement shall include
the provision that such agreement may be immediately terminated by
the Master Servicer without fee, in accordance with the terms of
this Agreement, in the event that the Servicer shall, for any
reason, no longer be the Servicer (including termination due to an
Event of Default).
Section
3.04
Liability of the Servicer
. Notwithstanding any subservicing
agreement or the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer,
Subcontractor or other third party or reference to actions taken
through a Subservicer, a Subcontractor, another third party or
otherwise, the Servicer shall remain obligated and primarily liable
to the Trustee and the Trust Fund for the servicing and
administering of the Mortgage Loans in accordance with the
provisions hereof without diminution of such obligation or
liability by virtue of any subservicing, subcontracting or
other agreements or arrangements or by virtue of indemnification
from a Subservicer, Subcontractor or a third party and to the same
extent and under the same terms and conditions as if the Servicer
alone were servicing the Mortgage Loans, including with respect to
compliance with Item 1122 of Regulation AB. The Servicer
shall be entitled to enter into any agreement with a Subservicer,
Subcontractor or other third party for indemnification of the
Servicer by such Subservicer, Subcontractor or third party and
nothing contained in the Agreement shall be deemed to limit or
modify such indemnification.
Section
3.05
No Contractual Relationship between
Subservicers and the Master Servicer . Any Subservicing Agreement that may be
entered into and any transactions or services relating to the
Mortgage Loans involving a Subservicer in its capacity as such
shall be deemed to be between the Subservicer and the Servicer
alone, and none of the Trustee, the Depositor, the Securities
Administrator, or the Master Servicer (nor any successor master
servicer) shall be deemed a party thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the
Subservicer except as set forth in Section 3.06. The
Servicer shall be solely liable for all fees owed by it to any
Subservicer, irrespective of whether the Servicer’s
compensation pursuant to this Agreement is sufficient to pay such
fees.
Section
3.06
Assumption or Termination of
Subservicing Agreements by Master Servicer . In the event the Servicer at any time shall
for any reason no longer be the Servicer (including by reason of
the occurrence of an Event of Default), the Master Servicer, or its
designee or the successor servicer if the successor is not the
Master Servicer, shall thereupon assume all of the rights and
obligations of the Servicer under each Subservicing Agreement that
the Servicer may have entered into, with copies thereof provided to
the Master Servicer or the successor servicer if the successor is
not the Master Servicer, prior to the Master Servicer or the
successor servicer if the successor is not the Master Servicer,
assuming such rights and obligations, unless the Master Servicer
elects to terminate any Subservicing Agreement in accordance with
its terms as provided in Section 3.03.
Upon such assumption, the Master
Servicer, its designee or the successor servicer shall be deemed,
subject to Section 3.03, to have assumed all of the
Servicer’s interest therein and to have replaced the Servicer
as a party to each Subservicing Agreement to the same extent as if
each Subservicing Agreement had been assigned to the assuming
party, except that (i) the Servicer shall not thereby be
relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and
(ii) none of the Trustee, the Depositor, the Master Servicer,
the Securities Administrator, their designees or any successor
servicer shall be deemed to have assumed any liability or
obligation of the Servicer that arose before it ceased to be the
Servicer.
The Servicer at its expense shall, upon
request of the Master Servicer, its designee or the successor
servicer deliver to the assuming party all documents and records
relating to the Subservicing Agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by
or on behalf of it, and otherwise use its best efforts to effect
the orderly and efficient transfer of the Subservicing Agreements
to the assuming party.
Section
3.07
Collection of Certain Mortgage Loan
Payments .
(a) The 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 applicable Insurance Policies, follow such collection
procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account.
Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge
or, if applicable, any penalty interest, or (ii) extend the
due dates for the Scheduled Payments due on a Mortgage Note for a
period of not greater than 180 days; provided , that
any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes
of any computation hereunder, except as provided below. In
the event of any such arrangement pursuant to
clause (ii) above, the Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to
Section 4.01 and in accordance with the amortization schedule
of such Mortgage Loan without modification thereof by reason of
such arrangements, subject to Section 4.01(d) pursuant to
which the Servicer shall not be required to make any such advances
that are Nonrecoverable P&I Advances. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or in
the judgment of the Servicer, such default is reasonably
foreseeable, the Servicer, consistent with the standards set forth
in Section 3.01, may also waive, modify or vary any term of
such Mortgage Loan (including modifications that would change the
Mortgage Rate, forgive the payment of principal or interest, extend
the final maturity date of such Mortgage Loan or waive, in whole or
in part, a Prepayment Charge), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in
final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor (any and all such waivers,
modifications, variances, forgiveness of principal or interest,
postponements, or indulgences collectively referred to herein as
“ Forbearance ”); provided, however ,
that the Servicer’s approval of a modification of a Due Date
shall not be considered a modification for purposes of this
sentence; provided, further , that the final maturity date
of any Mortgage Loan may not be extended beyond the Final Scheduled
Distribution Date for the LIBOR Certificates. The
Servicer’s analysis supporting any Forbearance and the
conclusion that any Forbearance meets the standards of Section 3.01
shall be reflected in writing in the Servicing File or on the
Servicer’s servicing records. In addition,
notwithstanding the foregoing, the Servicer may also waive (or
permit a Subservicer to waive), in whole or in part, a Prepayment
Charge if such waiver would, in the Servicer’s judgment,
maximize recoveries on the related Mortgage Loan or if such
Prepayment Charge is (i) not permitted to be collected by
applicable law, or the collection of the Prepayment Charge would be
considered “predatory” pursuant to written guidance
published by any applicable federal, state or local regulatory
authority having jurisdiction over such matters, or (ii) the
enforceability of such Prepayment Charge is limited (1) by
bankruptcy, insolvency, moratorium, receivership or other similar
laws relating to creditors’ rights or (2) due to
acceleration in connection with a foreclosure or other involuntary
payment. If a Prepayment Charge is waived other than as
permitted in this Section 3.07(a), then the Servicer is
required to pay the amount of such waived Prepayment Charge, for
the benefit of the Holders of the Class [P] Certificates, by
depositing such amount into the Collection Account together with
and at the time that the amount prepaid on the related Mortgage
Loan is required to be deposited into the Collection Account;
provided, however , that the Servicer shall not have an
obligation to pay the amount of any uncollected Prepayment Charge
if the failure to collect such amount is the direct result of
inaccurate or incomplete information on the Mortgage Loan Schedule
in effect at such time. The Master Servicer shall have no
responsibility for verifying the accuracy of the amount of
Prepayment Charges waived or remitted by the Servicer.
(b)
(i)
The Securities Administrator shall
establish and maintain the Excess Reserve Fund Account, on behalf
of the Class [X] Certificateholders, to receive any Basis Risk
Payment and to secure their limited recourse obligation to pay to
the LIBOR Certificateholders Basis Risk Carryover
Amounts.
(ii)
On each Distribution Date, the Securities
Administrator shall deposit the amount of any Basis Risk Payment
for such date into the [Excess Reserve Fund Account].
(c)
(i)
On each Distribution Date on which there
exists a Basis Risk Carryover Amount on any Class of
Certificates, the Securities Administrator shall (1) withdraw
from the Distribution Account and deposit in the Excess Reserve
Fund Account, as set forth in Section 4.02[ ], the
lesser of (x) the Class [X] Distributable Amount (without
regard to the reduction in the definition thereof with respect to
the Basis Risk Payment (to the extent remaining after the
distributions specified in Sections 4.02[
]) and (y) the aggregate Basis Risk
Carryover Amounts for such Distribution Date and (2) withdraw
from the [Excess Reserve Fund Account] amounts necessary to pay to
such Class or Classes of LIBOR Certificates the Basis Risk
Carryover Amount. Such payments shall be allocated to those
Classes on a pro rata basis based upon the amount of
Basis Risk Carryover Amount owed to each such Class and shall
be paid in the priority set forth in Sections 4.02[
].
(ii)
[The Securities Administrator shall
account for the [Excess Reserve Fund Account] as an asset of a
grantor trust under subpart E, Part I of
subchapter J of the Code and not as an asset of any REMIC
created pursuant to this Agreement. The beneficial owners of
the Excess Reserve Fund Account are the Class [X]
Certificateholders. For all federal tax purposes, amounts
transferred by the [Upper Tier] REMIC to the Excess Reserve Fund
Account shall be treated as distributions by the Securities
Administrator to the Class [X] Certificateholders.]
(iii)
Any Basis Risk Carryover Amounts paid by
the Securities Administrator to the LIBOR Certificateholders shall
be accounted for by the Securities Administrator as amounts paid
first to the Holders of the Class [X] Certificates and then to
the respective Class or Classes of LIBOR Certificates.
In addition, the Securities Administrator shall account for
such Certificateholders’ rights to receive payments of Basis
Risk Carryover Amounts as rights in a limited recourse notional
principal contract written by the Class [X] Certificateholders
in favor of such Certificateholders.
(iv)
[Notwithstanding any provision contained
in this Agreement, the Securities Administrator shall not be
required to make any payments to and from the Excess Reserve Fund
Account except as expressly set forth in this Section 3.07(c)
and Sections 4.02[ ].]
(d)
The Securities Administrator shall
establish and maintain the Distribution Account on behalf of the
Certificateholders. The Master Servicer shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the
following:
(i)
the aggregate amount remitted by the
Servicer to the Master Servicer pursuant to
Section 3.11;
(ii)
any amount deposited by the Servicer
pursuant to Section 3.12(b) in connection with any losses on
Permitted Investments; and
(iii)
any other amounts deposited hereunder
which are required to be deposited in the Distribution
Account.
In the event that the Servicer shall
remit any amount not required to be remitted, it may at any time
direct the Securities Administrator in writing to withdraw such
amount from the Distribution Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished
by delivering notice to the Securities Administrator which
describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account
shall be held by the Securities Administrator in trust for the
Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with Section 4.02.
(e)
The Securities Administrator may invest
the funds in the Distribution Account during the Securities
Administrator Float Period in one or more Permitted Investments in
accordance with Section 3.12. The Securities
Administrator may withdraw from the Distribution Account any income
or gain earned from the investment of funds deposited therein for
its own benefit.
(f)
The Servicer shall give notice to the
Securities Administrator of any proposed change of the location of
the Collection Account not later than 30 days and not more
than 45 days prior to any change thereof and the Securities
Administrator shall forward such notice to each Rating Agency and
the Depositor.
(g)
In order to comply with its duties under
the USA Patriot Act of 2001, the Trustee shall obtain and verify
certain information and documentation from the other parties to
this Agreement, including, but not limited to, each such
party’s name, address and other identifying
information.
Section
3.08
Subservicing Accounts
. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing
Agreement, the Subservicer will be required to establish and
maintain one or more segregated accounts (collectively, the “
Subservicing Account ”). The Subservicing
Account shall be an Eligible Account and shall otherwise be
acceptable to the Servicer. The Subservicer shall deposit in
the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on
a daily basis, and in no event more than one Business Day after the
Subservicer’s receipt thereof, all proceeds of Mortgage Loans
received by the Subservicer less its servicing compensation to the
extent permitted by the Subservicing Agreement, and shall
thereafter deposit such amounts in the Subservicing Account, in no
event more than two Business Days after the deposit of such funds
into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not
later than two Business Days after the deposit of such amounts in
the Subservicing Account. For purposes of this Agreement, the
Servicer shall be deemed to have received payments on the Mortgage
Loans when the Subservicer receives such payments.
Section
3.09
Collection of Taxes, Assessments and
Similar Items; Escrow Accounts . (a) The Servicer shall enforce the
obligations under each paid-in-full, life-of-the-loan tax service
contract in effect with respect to each Mortgage Loan (each, a
“ Tax Service Contract ”). Each Tax
Service Contract shall be assigned to a successor servicer, at the
Servicer’s expense in the event that the Servicer is
terminated as the Servicer of the related Mortgage Loan.
(b)
To the extent that the services described
in this paragraph (b) are not otherwise provided pursuant
to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform
such functions. To the extent the related Mortgage provides
for Escrow Payments, the Servicer shall establish and maintain, or
cause to be established and maintained, one or more segregated
accounts (the “ Escrow Accounts ”), which shall
be Eligible Accounts. The Servicer shall deposit in the
clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on
a daily basis, and in no event more than one Business Day after the
Servicer’s receipt thereof, all collections from the
Mortgagors (or related advances from Subservicers) for the payment
of taxes, assessments, hazard insurance premiums and comparable
items for the account of the Mortgagors (“ Escrow
Payments ”) collected on account of the Mortgage Loans
and shall thereafter deposit such Escrow Payments in the Escrow
Accounts, in no event more than two Business Days after the deposit
of such funds in the clearing account, for the purpose of effecting
the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from an Escrow Account may
be made only to (i) effect payment of taxes, assessments,
hazard insurance premiums, and comparable items;
(ii) reimburse the Servicer (or a Subservicer to the extent
provided in the related Subservicing Agreement) out of the
collection for any advances made pursuant to Section 3.01
(with respect to taxes and assessments) and Section 3.13 (with
respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest,
if required and as described below, to Mortgagors on balances in
the Escrow Account; (v) clear and terminate the Escrow Account
at the termination of the Servicer’s obligations and
responsibilities in respect of the Mortgage Loans under this
Agreement; or (vi) recover amounts deposited in error.
As part of its servicing duties, the Servicer or Subservicers
shall pay to the Mortgagors interest on funds in Escrow Accounts,
to the extent required by law and, to the extent that interest
earned on funds in the Escrow Accounts is insufficient, to pay such
interest from its or their own funds, without any reimbursement
therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Servicer shall determine whether any such
payments are made by the Mortgagor in a manner and at a time that
avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure of a tax lien. The Servicer assumes full
responsibility for the payment of all such bills within such time
and shall effect payments of all such bills irrespective of the
Mortgagor’s faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its
own funds to effect such payments; provided, however , that
such advances are deemed to be Servicing Advances.
Section
3.10
Collection Account
. (a) On behalf of the
Trustee, the Servicer shall establish and maintain, or cause to be
established and maintained, one or more segregated Eligible
Accounts (such account or accounts, the “ Collection
Account ”), held in trust for the benefit of the Trustee.
On behalf of the Trustee, the Servicer shall deposit or cause
to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan
servicing activities on a daily basis, and in no event more than
one Business Day after the Servicer’s receipt thereof, and
shall thereafter deposit into the Collection Account, in no event
more than two Business Days after the deposit of such funds into
the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made
by it subsequent to the Cut-off Date (other than in respect of
principal or interest on the related Mortgage Loans due on or
before the Cut-off Date), or payments (other than Principal
Prepayments) received by it on or prior to the Cut-off Date but
allocable to a Due Period subsequent thereto:
(i)
all payments on account of principal,
including Principal Prepayments, on the Mortgage Loans;
(ii)
all payments on account of interest (net
of the related Servicing Fee) on each Mortgage Loan;
(iii)
all Insurance Proceeds and Condemnation
Proceeds to the extent such Insurance Proceeds and Condemnation
Proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the related Mortgagor in
accordance with the express requirements of law or in accordance
with Accepted Servicing Practices, Liquidation Proceeds and
Subsequent Recoveries;
(iv)
any amounts required to be deposited
pursuant to Section 3.12 in connection with any losses
realized on Permitted Investments with respect to funds held in the
Collection Account;
(v)
any amounts required to be deposited by
the Servicer pursuant to the second paragraph of
Section 3.13(a) in respect of any blanket policy
deductibles;
(vi)
all proceeds of any Mortgage Loan
repurchased or purchased in accordance with this Agreement;
and
(vii)
all Prepayment Charges collected by the
Servicer.
The foregoing requirements for deposit in
the Collection Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing,
payments in the nature of late payment charges, NSF fees,
reconveyance fees, assumption fees and other similar fees and
charges need not be deposited by the Servicer in the Collection
Account and shall, upon collection, belong to the Servicer as
additional compensation for its servicing activities. In the
event the Servicer shall deposit in the Collection Account any
amount not required to be deposited therein, it may at any time
withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
(b)
Funds in the Collection Account may be
invested in Permitted Investments in accordance with the provisions
set forth in Section 3.12. The Servicer shall give
notice to the Securities Administrator, the Master Servicer, the
Trustee and the Depositor of the location of the Collection Account
maintained by it when established and prior to any change
thereof.
Section
3.11
Withdrawals from the Collection
Account . (a) The
Servicer shall, from time to time, make withdrawals from the
Collection Account maintained by it for any of the following
purposes or as described in Section 4.01:
(i)
on or prior to each Remittance Date, to
remit to the Master Servicer (A) the Master Servicing Fee with
respect to such Distribution Date and (B) all Available Funds
in respect of the related Distribution Date together with all
amounts representing Prepayment Charges (payable to the
Class P Certificateholders) from the Mortgage Loans received
during the related Prepayment Period;
(ii)
to reimburse the Servicer for P&I
Advances, but only to the extent of amounts received which
represent Late Collections (net of the related Servicing Fees) of
Scheduled Payments on Mortgage Loans with respect to which such
P&I Advances were made by the Servicer in accordance with the
provisions of Section 4.01 and (B) any unreimbursed P&I
Advances to the extent of funds held in the Collection Account for
a future Distribution Date that were not included in Available
Funds for the preceding Distribution Date;
(iii)
to pay the Servicer or any Subservicer
(A) any unpaid Servicing Fees or (B) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to
the extent of any Late Collections or other amounts as may be
collected by the Servicer from a Mortgagor, or otherwise received
with respect to such Mortgage Loan (or the related REO
Property);
(iv)
to pay to the Servicer as servicing
compensation (in addition to the Servicing Fee) on each Remittance
Date any interest or investment income earned on funds deposited in
the Collection Account;
(v)
to pay to the Mortgage Loan Seller, with
respect to each Mortgage Loan that has previously been repurchased
or replaced pursuant to this Agreement, all amounts received
thereon subsequent to the date of purchase or substitution, as the
case may be;
(vi)
to reimburse the Servicer for (A) any
P&I Advance or Servicing Advance previously made which the
Servicer has determined to be a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance in accordance with the provisions
of Section 4.01 and (B) any unpaid Servicing Fees to the
extent not recoverable from Late Collections or other amounts
received with respect to the related Mortgage Loan under Section
3.11(a)(iii);
(vii)
to pay, or to reimburse the Servicer for
Servicing Advances in respect of, expenses incurred in connection
with any Mortgage Loan pursuant to Section 3.15;
(viii)
to reimburse the Master Servicer, the
Servicer, the Depositor, the Securities Administrator or the
Trustee for expenses incurred by or reimbursable to the Master
Servicer, the Servicer, the Depositor, the Securities Administrator
or the Trustee, as the case may be, pursuant to Section 6.03,
Section 7.02, Section 8.05, Section 9.13 or
Section 10.02;
(ix)
to reimburse the Master Servicer, the
Servicer or the Trustee, as the case may be, for expenses
reasonably incurred in respect of the breach or defect giving rise
to the repurchase obligation of the Mortgage Loan Seller or the
Sponsor under this Agreement that were included in the Repurchase
Price of the Mortgage Loan, including any expenses arising out of
the enforcement of the repurchase obligation, to the extent not
otherwise paid pursuant to the terms hereof;
(x)
to withdraw any amounts deposited in the
Collection Account in error; and
(xi)
to clear and terminate the Collection
Account upon termination of this Agreement.
(b)
The Servicer shall keep and maintain
separate accounting, on a Mortgage Loan by Mortgage Loan basis, for
the purpose of justifying any withdrawal from the Collection
Account, to the extent held by or on behalf of it, pursuant to
subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and
(ix) above. The Servicer shall provide written
notification (as set forth in Section 4.01(d)) to the Master
Servicer, on or prior to the next succeeding Remittance Date, upon
making any withdrawals from the Collection Account pursuant to
subclause (a)(vi) above.
Section
3.12
Investment of Funds in the Collection
Account, Escrow Accounts and the Distribution Account
. (a) The Servicer may
invest the funds in the Collection Account maintained by it and the
Escrow Accounts (to the extent permitted by law and the related
Mortgage Loan documents) and the Securities Administrator may
invest funds in the Distribution Account during the Securities
Administrator’s Float Period and shall invest such funds in
the Distribution Account (for purposes of this Section 3.12,
each such Account is referred to as an “ Investment
Account ”), in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on
demand, no later than the Business Day immediately preceding the
date on which such funds are required to be withdrawn from such
account pursuant to this Agreement; provided, however , that
any such Permitted Investment managed by or advised by the
Securities Administrator or any of its Affiliates may mature,
unless payable on demand, no later than the date on which such
funds are required to be withdrawn from such account pursuant to
this Agreement. All such Permitted Investments shall be held
to maturity, unless payable on demand. Any investment of
funds in an Investment Account shall be made in the name of the
Servicer or the Securities Administrator, as applicable. The
Servicer or the Securities Administrator, as applicable, shall be
entitled to sole possession over each such investment, and any
certificate or other instrument evidencing any such investment
shall be delivered directly to the Servicer or the Securities
Administrator or its agent, as applicable, together with any
document of transfer necessary to transfer title to such investment
to the Servicer or the Securities Administrator or its agent, as
applicable. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable
on demand, the Servicer or the Securities Administrator, as
applicable, may:
(x)
consistent with any notice required to be
given thereunder, demand that payment thereon be made on the last
day such Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y)
demand payment of all amounts due
thereunder that such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter on deposit in
an Investment Account.
(b)
All income and gain realized from the
investment of funds deposited in the Collection Account or Escrow
Account, as applicable, held by or on behalf of the Servicer, shall
be for the benefit of the Servicer and shall be subject to its
withdrawal in the manner set forth in Section 3.11. The
Servicer shall deposit in the Collection Account or Escrow Account,
as applicable, the amount of any loss of principal incurred in
respect of any such Permitted Investment made with funds in such
accounts immediately upon realization of such loss.
(c)
All income and gain realized from the
investment of funds deposited in the Distribution Account held by
the Securities Administrator during the Securities
Administrator’s Float Period, shall be for the benefit of the
Securities Administrator, and shall be subject to the Securities
Administrator’s withdrawal in the manner set forth in
Section 3.07(d). Notwithstanding anything in this
Section 3.12(c), the Securities Administrator shall be liable to
the Trust for any such loss on any funds it has invested under this
Section 3.12(c) only during the Securities Administrator Float
Period, and the Securities Administrator shall deposit in the
Distribution Account the amount of any loss of principal incurred
in respect of any such Permitted Investment made with funds in such
account immediately upon realization of such loss.
(d)
Except as otherwise expressly provided in
this Agreement, if any default occurs in the making of a payment
due under any Permitted Investment of funds held in the Escrow
Account or any Collection Account, or if a default occurs in any
other performance required under any Permitted Investment of funds
held in the Escrow Account or any Collection Account, the Servicer
or the Securities Administrator, as applicable, shall take such
action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of
appropriate proceedings.
(e)
The Securities Administrator or its
Affiliates are permitted to receive additional compensation that
could be deemed to be in the Securities Administrator’s
economic self-interest for (i) serving as investment adviser,
administrator, shareholder, servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments,
(ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in
certain Permitted Investments. Such compensation shall not be
considered an amount that is reimbursable for payable pursuant to
this Agreement.
Section
3.13
Maintenance of Hazard Insurance and
Errors and Omissions and Fidelity Coverage . (a) The Servicer shall cause to be
maintained for each Mortgage Loan fire insurance with extended
coverage on the related Mortgaged Property in an amount which is at
least equal to the least of (i) the outstanding principal
balance of such Mortgage Loan, (ii) the amount necessary to
fully compensate for any damage or loss to the improvements that
are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which
are a part of such Mortgaged Property, in each case in an amount
not less than such amount as is necessary to avoid the application
of any coinsurance clause contained in the related hazard
insurance policy. The Servicer shall also cause to be
maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of
(i) the maximum insurable value of the improvements which are
a part of such property and (ii) the outstanding principal
balance of the related Mortgage Loan at the time it became an
REO Property, plus accrued interest at the Mortgage Rate and
related Servicing Advances. The Servicer will comply in the
performance of this Agreement with all reasonable rules and
requirements of each insurer under any such hazard policies.
Any amounts to be collected by the Servicer under any such
policies (other than amounts required to be deposited in the Escrow
Account and applied to the restoration or repair of the property
subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would
follow in servicing loans held for its own account, subject to the
terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal
pursuant to Section 3.11. Any cost incurred by the
Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Master Servicer, be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any
time be in force and as shall require such additional insurance.
If the Mortgaged Property or REO Property is at any time in
an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood
insurance has been made available, the Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of
(i) the unpaid principal balance of the related Mortgage Loan
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 Servicer shall
obtain and maintain a blanket policy with an insurer having a
general policy rating of A:VI or better in Best’s (or such
other rating that is comparable to such rating) 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 two sentences of this Section 3.13, it being understood
and agreed that such policy may contain a deductible clause, in
which case the Servicer shall, in the event that there shall not
have been maintained on the related Mortgaged Property or REO
Property a policy complying with the first two sentences of this
Section 3.13, and there shall have been one or more losses
which would have been covered by such policy, deposit to the
Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause.
In connection with its activities as administrator and
servicer of the Mortgage Loans, the Servicer agrees to prepare and
present, on behalf of itself and the Trustee, claims under any such
blanket policy in a timely fashion in accordance with the terms of
such policy.
(b)
The Servicer shall keep in force during
the term of this Agreement a policy or policies of insurance
covering errors and omissions for failure in the performance of the
Servicer’s obligations under this Agreement, which, policy or
policies shall be in such form and amount consistent with Accepted
Servicing Practices. The Servicer shall also maintain a
fidelity bond in the form and amount that would be consistent with
Accepted Servicing Practice. The Servicer shall provide the
Master Servicer with copies of any such insurance policies and
fidelity bond. The Servicer shall be deemed to have complied
with this provision if an Affiliate of the Servicer has such errors
and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder
extends to the Servicer. Any such errors and omissions policy
and fidelity bond shall by its terms not be cancelable without
thirty days’ prior written notice to the Master
Servicer. The Servicer shall also cause each Subservicer to
maintain a policy of insurance covering errors and omissions and a
fidelity bond which would meet such requirements.
Section
3.14
Enforcement of Due-On-Sale Clauses;
Assumption Agreements .
The Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by
any Mortgagor (whether by absolute conveyance or by contract of
sale, and whether or not the Mortgagor remains or is to remain
liable under the Mortgage Note and/or the Mortgage), exercise its
rights to accelerate the maturity of such Mortgage Loan under the
“due-on-sale” clause, if any, applicable thereto;
provided, however , that the Servicer shall not exercise any
such rights if prohibited by law from doing so or if the exercise
of such rights would impair or threaten to impair recovery under
the related Primary Mortgage Insurance Policy, if any. If the
Servicer believes it is unable under applicable law to enforce such
“due-on-sale” clause or if any of the other
conditions set forth in the proviso to the preceding sentence
apply, the Servicer will enter into either (i) an assumption
and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant
to which such person becomes liable under the Mortgage Note and, to
the extent permitted by applicable state law, the Mortgagor remains
liable thereon or (ii) a substitution agreement as provided in
the succeeding sentence. The Servicer is also authorized to
enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability
and such person is substituted as the Mortgagor and becomes liable
under the Mortgage Note, provided , that no such
substitution shall be effective unless such person satisfies the
underwriting criteria of the Mortgage Loan Seller and has a credit
risk rating at least equal to that of the original Mortgagor.
The Mortgage Loan, as assumed, shall conform in all respects
to the requirements, representations and warranties of this
Agreement. The Servicer shall not take or enter into any
assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received
confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy, or a new policy meeting the
requirements of this Section is obtained. Any fee
collected by the Servicer in respect of an assumption or
substitution of liability agreement will be retained by the
Servicer as additional servicing compensation. In connection
with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the
amount of the Scheduled Payment) may be amended or modified, except
as otherwise required pursuant to the terms thereof. The
Servicer shall notify the Master Servicer that any such
substitution, modification or assumption agreement has been
completed and shall forward to the Custodian the executed original
of such substitution or assumption agreement, which document shall
be added to the related Mortgage File and shall, for all purposes,
be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part
thereof.
Notwithstanding the foregoing
paragraph or any other provision of this Agreement, the
Servicer shall not be deemed to be in default, breach or any other
violation of its obligations hereunder by reason of any assumption
of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
For purposes of this Section 3.14, the term
“assumption” is deemed to also include a sale (of the
Mortgaged Property) subject to the Mortgage that is not accompanied
by an assumption or substitution of liability agreement.
Section
3.15
Realization upon Defaulted Mortgage
Loans . The Servicer
shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert (which
may include an acquisition of REO Property) 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, and which are not released from this Agreement
pursuant to any other provision hereof. The Servicer shall
use reasonable efforts to realize upon such defaulted Mortgage
Loans in such manner as will maximize the receipt of principal and
interest by the Securities Administrator, taking into account,
among other things, the timing of foreclosure proceedings.
The foregoing is subject to the provisions that the Servicer
shall not be required to expend its own funds in connection with
foreclosure or other conversion, correction of a default on a
senior mortgage or restoration of any property unless it shall
determine in its sole discretion (i) that such foreclosure,
correction or restoration will increase the net Liquidation
Proceeds of the related Mortgage Loan to the Securities
Administrator, after reimbursement to itself for such expenses and
(ii) that such expenses will be recoverable by the Servicer
through Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds or Subsequent Recoveries from the related Mortgaged
Property, as contemplated in Section 3.11. The Servicer
shall be responsible for all other costs and expenses incurred by
it in any such proceedings; provided, however , that it
shall be entitled to reimbursement thereof from the related
property, as contemplated in Section 3.11.
The proceeds of any liquidation or REO
Disposition, as well as any recovery resulting from a partial
collection of Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds or Subsequent Recoveries or any income from an
REO Property, will be applied in the following order of priority:
first , to reimburse the Servicer or any Subservicer
for any related unreimbursed Servicing Advances, pursuant to
Section 3.11 or 3.17; second , to reimburse the
Servicer for any related unreimbursed P&I Advances, pursuant to
Section 3.11; third , to accrued and unpaid interest on
the Mortgage Loan or REO Imputed Interest, at the Mortgage Rate, to
the date of the liquidation or REO Disposition, or to the Due Date
prior to the Remittance Date on which such amounts are to be
distributed if not in connection with a liquidation or REO
Disposition; and fourth , as a recovery of principal of the
Mortgage Loan. If the amount of the recovery so allocated to
interest is less than a full recovery thereof, that amount will be
allocated as follows: first , to unpaid Servicing
Fees; and second , as interest at the Mortgage Rate (net of
the Servicing Fee Rate). The portion of the recovery so
allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Subservicer pursuant to Section 3.11 or 3.17.
The portions of the recovery so allocated to interest at the
Mortgage Rate (net of the Servicing Fee Rate) and to principal of
the Mortgage Loan shall be applied as follows: first
, to reimburse the Servicer or any Subservicer for any related
unreimbursed Servicing Advances in accordance with
Section 3.11 or 3.17, and second , to the Securities
Administrator in accordance with the provisions of
Section 4.02, subject to paragraph (e) of
Section 3.17 with respect to certain excess recoveries from an
REO Disposition.
Notwithstanding anything to the contrary
contained herein, in connection with a foreclosure or acceptance of
a deed in lieu of foreclosure, in the event the Servicer has
received actual notice of, or has actual knowledge of the presence
of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee or the Master Servicer
otherwise requests, the Servicer shall cause an environmental
inspection or review of such Mortgaged Property to be conducted by
a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee, the Master Servicer
and the Depositor with a written report of the environmental
inspection.
After reviewing the environmental
inspection report, the Servicer shall determine consistent with
Accepted Servicing Practices how to proceed with respect to the
Mortgaged Property. In the event (a) the environmental
inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and
(b) the Servicer proceeds with foreclosure or acceptance of a
deed in lieu of foreclosure, the Servicer shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance
of a deed in lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation
Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Servicer, the Servicer shall be entitled to be
reimbursed from amounts in the Collection Account pursuant to
Section 3.11. In the event the Servicer does not proceed
with foreclosure or acceptance of a deed in lieu of foreclosure,
the Servicer shall be reimbursed from general collections for all
Servicing Advances made with respect to the related Mortgaged
Property from the Collection Account pursuant to Section 3.11.
The Trustee shall not be responsible for any determination
made by the Servicer pursuant to this paragraph or
otherwise.
Section
3.16
Release of Mortgage Files
. (a) Upon the payment
in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full shall be escrowed in a manner
customary for such purposes, the Servicer will, within five
(5) Business Days of the payment in full, notify the Custodian
by a certification (which certification shall include a statement
to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in
the Collection Account pursuant to Section 3.10 have been or
will be so deposited) of a Servicing Officer and shall request
delivery to it of the Custodial File by submitting a Request for
Release, which Request for Release may be in an electronic format
in a form acceptable to the Custodian, to the Custodian. Upon
receipt of such certification and Request for Release, the
Custodian shall promptly release the related Custodial File to the
Servicer within five (5) Business Days. No expenses incurred
in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account.
(b)
From time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, including, for
this purpose, collection under any Insurance Policy relating to the
Mortgage Loans, the Custodian shall, upon request of the Servicer
and delivery to the Custodian of a Request for Release, which
Request for Release may be in an electronic format in a form
acceptable to the Custodian, release the related Custodial File to
the Servicer, and the Custodian shall, at the direction of the
Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings and the Servicer shall retain
the Mortgage File in trust for the benefit of the Trustee.
Such Request for Release shall obligate the Servicer to
return each and every document previously requested from the
Custodial File to the Custodian when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Collection Account or the Mortgage
File or such document has been delivered 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 Servicer has delivered to the
Custodian 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. Upon receipt of a certificate of a Servicing
Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such
liquidation that are required to be deposited into the Collection
Account have been so deposited, or that such Mortgage Loan has
become an REO Property, a copy of the Request for Release shall be
released by the Custodian to the Servicer or its
designee.
Upon written certification of a Servicing
Officer, the Trustee shall execute and deliver to the Servicer
copies of any court pleadings, requests for trustee’s sale or
other documents reasonably 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, or
shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on
its behalf. Each such certification shall include a request
that such pleadings or documents be executed by the Trustee and a
statement as to the reason such documents or pleadings are required
and that the execution and delivery thereof by the Trustee will not
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
3.17
Title, Conservation and Disposition of
REO Property .
(a) This Section shall apply only to REO
Properties acquired for the account of the Trustee and shall not
apply to any REO Property relating to a Mortgage Loan which was
purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property
is acquired, the deed or certificate of sale shall be issued to the
Trust, or if not permitted by law, to [
] (or, if applicable, the name
of the successor Trustee) as Trustee for HSI Asset Securitization
Corporation Trust [ ] Mortgage
Pass-Through Certificates, Series [ ], or
to its nominee, for the benefit of the
Certificateholders.
(b)
The Servicer shall manage, conserve,
protect and operate each REO Property for the Trustee solely
for the purpose of its prompt disposition and sale. The
Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO
Property in the same manner that it manages, conserves, protects
and operates other foreclosed property for its own account, and in
the same manner that similar property in the same locality as the
REO Property is managed. The Servicer shall attempt to sell
the same (and may temporarily rent the same for a period not
greater than one year, except as otherwise provided below) on such
terms and conditions as the Servicer deems to be in the best
interest of the Trustee on behalf of the Certificateholders.
The Servicer shall notify the Trustee from time to time as to
the status of each REO Property.
(c)
The Servicer shall segregate and hold all
funds collected and received in connection with the operation of
any REO Property separate and apart from its own funds and general
assets and shall deposit such funds in the Collection
Account.
(d)
The Servicer shall deposit net of
reimbursement to the Servicer for any related outstanding Servicing
Advances and unpaid Servicing Fees provided in Section 3.11,
or cause to be deposited in the Collection Account, in no event
later than two Business Days after the deposit of such funds into
the clearing account, all revenues received with respect to the
related REO Property and shall withdraw therefrom funds necessary
for the proper operation, management and maintenance of the REO
Property.
(e)
The Servicer, upon an REO Disposition,
shall be entitled to reimbursement for any related unreimbursed
Servicing Advances as well as any unpaid Servicing Fees from
proceeds received in connection with the REO Disposition, as
further provided in Section 3.11.
(f)
Any net proceeds from an REO Disposition
which are in excess of the unpaid principal balance of the related
Mortgage Loan plus all unpaid REO Imputed Interest thereon through
the date of the REO Disposition shall be retained by the Servicer
as additional servicing compensation.
(g)
The Servicer shall use Accepted Servicing
Practices to sell, or cause the Subservicer to sell, in accordance
with Accepted Servicing Practices, any REO Property as soon as
possible, but in no event later than the conclusion of the third
calendar year beginning after the year of its acquisition by the
[Lower Tier] REMIC unless (i) the Servicer applies for an
extension of such period from the Internal Revenue Service pursuant
to the REMIC Provisions and Code Section 856(e)(3), in which
event such REO Property shall be sold within the applicable
extension period, or (ii) the Servicer obtains for the Trustee
an Opinion of Counsel, addressed to the Depositor, the Trustee and
the Servicer, to the effect that the holding by the REMIC 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
under this Agreement to fail to qualify as a REMIC under the REMIC
Provisions or comparable provisions of relevant state laws at any
time. The Servicer shall manage, conserve, protect and
operate each REO Property for the Trustee solely for the purpose of
its prompt disposition and sale in a manner which does not cause
such REO Property to fail to qualify as “foreclosure
property” within the meaning of Section 860G(a)(8) or
result in the receipt by any REMIC created hereunder of any
“income from non-permitted assets” within the meaning
of Section 860F(a)(2)(B) of the Code or any “net income
from foreclosure property” which is subject to taxation under
Section 860G(a)(1) of the Code. Pursuant to its efforts
to sell such REO Property, the Servicer shall either itself or
through an agent selected by the Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary
in the locality where such REO Property is located and may,
incident to its conservation and protection of the interests of the
Trustee on behalf of the Certificateholders, rent the same, or any
part thereof, as the Servicer deems to be in the best interest of
the Trustee on behalf of the Certificateholders for the period
prior to the sale of such REO Property; provided, however ,
that any rent received or accrued with respect to such REO Property
qualifies as “rents from real property” as defined in
Section 856(d) of the Code.
Section
3.18
Notification of Adjustments
. With respect to each Adjustable
Rate Mortgage Loan, the Servicer shall adjust the Mortgage Rate on
the related Adjustment Date and shall adjust the Scheduled Payment
on the related mortgage payment adjustment date, if applicable, in
compliance with the requirements of applicable law and the related
Mortgage and Mortgage Note. In the event that an Index
becomes unavailable or otherwise unpublished, the Servicer shall
select a comparable alternative index over which it has no direct
control and which is readily verifiable. The Servicer shall
execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Rate and Scheduled Payment
adjustments. The Servicer shall promptly, upon written
request therefor, deliver to the Master Servicer such notifications
and any additional applicable data regarding such adjustments and
the methods used to calculate and implement such adjustments.
Upon the discovery by the Servicer or the receipt of notice
from the Master Servicer that the Servicer has failed to adjust a
Mortgage Rate or Scheduled Payment in accordance with the terms of
the related Mortgage Note, the Servicer shall deposit in the
Collection Account from its own funds the amount of any interest
loss caused as such interest loss occurs.
Section
3.19
Access to Certain Documentation and
Information Regarding the Mortgage Loans . The Servicer shall provide, or cause the
Subservicer to provide, to the Depositor, the Trustee, the OTS or
the FDIC and the examiners and supervisory agents thereof, access
to the documentation regarding the Mortgage Loans in its possession
required by applicable regulations of the OTS. Such access
shall be afforded without charge, but only upon 10 days (or, if an
Event of Default has occurred and is continuing, 3 Business Days)
prior written request and during normal business hours at the
offices of the Servicer or, if applicable, any Subservicer.
Nothing in this Section shall derogate from the obligation of
any such party to observe any applicable law prohibiting disclosure
of information regarding the Mortgagors and the failure of any such
party to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this
Section.
Nothing in this Section 3.19 shall
require the Servicer to collect, create, collate or otherwise
generate any information that it does not generate in its usual
course of business. The Servicer shall not be required to
make copies of or to ship documents to any Person who is not a
party to this Agreement, and then only if provisions have been made
for the reimbursement of the costs thereof.
Section
3.20
Documents, Records and Funds in
Possession of the Servicer to Be Held for the Trustee
. Not later than thirty days
after each Distribution Date, the Servicer shall forward to the
Trustee, the Master Servicer and the Securities Administrator a
statement prepared by the Servicer setting forth the status of the
Collection Account as of the close of business on the last day of
the calendar month relating to such Distribution Date and showing,
for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the Collection Account of each
category of deposit specified in Section 3.10(a) and each
category of withdrawal specified in Section 3.11. Such
statement shall be provided substantially in the form of
Exhibit N-1 hereto. Copies of such statement shall be
provided by the Securities Administrator to any Certificateholder
and to any Person identified to the Securities Administrator as a
prospective transferee of a Certificate, upon the request and at
the expense of the requesting party, provided such statement is
delivered by the Servicer to the Securities
Administrator.
Section
3.21
Servicing Compensation
. (a) As compensation
for its activities hereunder, the Servicer shall, with respect to
each Mortgage Loan, be entitled to retain from deposits to the
Collection Account and from Liquidation Proceeds, Condemnation
Proceeds, Insurance related Proceeds, Subsequent Recoveries and REO
Proceeds related to such Mortgage Loan, the Servicing Fee with
respect to each Mortgage Loan (less any portion of such amounts
retained by any Subservicer). In addition, the Servicer shall
be entitled to recover unpaid Servicing Fees out of related Late
Collections and as otherwise permitted under Section 3.11.
The right to receive the Servicing Fee may not be transferred
in whole or in part except in connection with the transfer of all
of the Servicer’s responsibilities and obligations under this
Agreement; provided, however , that the Servicer may pay
from the Servicing Fee any amounts due to a Subservicer pursuant to
a Subservicing Agreement entered into under
Section 3.02.
(b)
Additional servicing compensation in the
form of assumption or modification fees, late payment charges, NSF
fees, reconveyance fees and other similar fees and charges (other
than Prepayment Charges) shall be retained by the Servicer only to
the extent such fees or charges are received by the Servicer.
The Servicer shall also be entitled pursuant to
Section 3.11(a)(iv) to withdraw from the Collection Account,
as additional servicing compensation, interest or other income
earned on deposits therein. The Servicer shall also be
entitled as additional servicing compensation, to interest or other
income earned on deposits in the Escrow Account (to the extent
permitted by law and the related Mortgage Loan documents) in
accordance with Section 3.12. The Servicer shall also be
entitled to retain net Prepayment Interest Excesses (to the extent
not required to offset Prepayment Interest Shortfalls), but only to
the extent such amounts are received by the Servicer.
(c)
The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities
hereunder (including payment of premiums for any blanket policy
insuring against hazard losses pursuant to Section 3.13,
servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants
and any agents appointed by the Servicer), and shall not be
entitled to reimbursement therefor from the Trust Fund except as
specifically provided in Section 3.11.
Section
3.22
Report on Assessment of Compliance
with Relevant Servicing Criteria . On or prior to the Closing Date, the Servicer
shall deliver to the Sponsor, the Master Servicer, the Securities
Administrator and the Depositor a certification in the form of
Exhibit S attached hereto regarding the items it will address in
its assessment of compliance with the Servicing Criteria under this
Section 3.22. On or before March [1] of each calendar year,
beginning with March [1], 20[ ], the Servicer shall deliver
to the Master Servicer, the Securities Administrator and the
Depositor a report (in form and substance reasonably satisfactory
to the Depositor and the Securities Administrator) regarding its
assessment of compliance with the Relevant Servicing Criteria
identified in Exhibit S attached hereto, as of and for the period
ending the end of the fiscal year ending no later than [December
31] of the year prior to the year of delivery of the report, with
respect to asset-backed security transactions taken as a whole in
which the Servicer is performing any of the Servicing Criteria
specified in Exhibit S and that are backed by the same asset type
backing such asset-backed securities. Each such report shall
include (a) a statement of the party’s responsibility for
assessing compliance with the Relevant Servicing Criteria
applicable to such party, (b) a statement that such party used the
criteria identified in Item 1122(d) of Regulation AB (§
229.1122(d)) to assess compliance with the Relevant Servicing
Criteria, (c) disclosure of any material instance of noncompliance
identified by such party, and (d) a statement that a registered
public accounting firm has issued an attestation report on such
party’s assessment of compliance with the Relevant Servicing
Criteria, which report shall be delivered by the Servicer as
provided in Section 3.23 hereto. In addition, on or before
March 1 st of each calendar year, beginning with March
[1], 20[ ], the Servicer shall, at its own expense, furnish
to the Master Servicer a report meeting the requirements set forth
above regarding the assessment of compliance of any Subservicer or
Subcontractor which is a Servicing Function Participant (each,
without respect to any threshold limitations in Instruction 2 to
Item 1122 of Regulation AB).
Promptly after receipt of each such
report on assessment of compliance, (i) the Depositor shall review
each such report and, if applicable, consult with the Master
Servicer, the Securities Administrator, the Trustee and any
Servicing Function Participant engaged by such parties as to the
nature of any material instance of noncompliance with the Relevant
Servicing Criteria by each such party, and (ii) the Securities
Administrator shall confirm that the assessments, taken as a whole,
address all of the Servicing Criteria and taken individually
address the Relevant Servicing Criteria for each party as set forth
on Exhibit S and on any similar exhibit set forth in any servicing
or sub-servicing agreement in respect of any Servicing Function
Participant and notify the Depositor of any exceptions. None
of such parties shall be required to deliver any such assessments
until [April 15] in any given year so long as it has received
written confirmation from the Depositor that a Form 10-K is not
required to be filed with the Commission in respect of the Trust
for the preceding calendar year.
Section
3.23
Report on Attestation of Compliance
with Relevant Servicing Criteria . On or before [March 1 st ] of each
calendar year, beginning with [March 1], 20[ ], the Servicer
shall, at its own expense, cause a firm of independent public
accountants (who may also render other services to Servicer), which
is a member of the American Institute of Certified Public
Accountants, to furnish to the Master Servicer, the Securities
Administrator and the Depositor (i) year-end audited (if available)
financial statements of the Servicer and (ii) a report to the
effect that such firm that attests to, and reports on, the
assessment made by such asserting party pursuant to Section 3.22
above, which report shall be made in accordance with standards for
attestation engagements issued or adopted by the PCAOB. In
addition, on or before March [1 st ] of each calendar
year, beginning with [March 1], 20[ ], the Servicer shall, at
its own expense, furnish to the Master Servicer a report meeting
the requirements of clause (ii) above regarding the attestation of
any Subservicer or Subcontractor which is a Servicing Function
Participant (each, without respect to any threshold limitations in
Instruction 2. to Item 1122 of Regulation AB).
Promptly after receipt of such report
from the Servicer, the Master Servicer, the Securities
Administrator or any Servicing Function Participant engaged by such
parties, (i) the Depositor shall review the report and, if
applicable, consult with such parties as to the nature of any
defaults by such parties, in the fulfillment of any of each such
party’s obligations hereunder or under any other applicable
agreement, and (ii) the Securities Administrator shall confirm that
each assessment submitted pursuant to Section 3.22 is coupled with
an attestation meeting the requirements of this Section and notify
the Depositor of any exceptions. None of the Master Servicer,
the Securities Administrator, the Trustee or any Servicing Function
Participant engaged by such parties shall be required to deliver or
cause the delivery of such reports until [April 15] in any given
year so long as it has received written confirmation from the
Depositor that a Form 10-K is not required to be filed in respect
of the Trust for the preceding fiscal year.
Section
3.24
Annual Officer’s
Certificates . (a) Each
Form 10-K filed with the Commission shall include a certification
(the “ Sarbanes-Oxley Certification ”), exactly
as set forth in Exhibit L attached hereto, required to be included
therewith pursuant to the Sarbanes-Oxley Act. The Servicer
and the Securities Administrator shall, and shall cause any
Servicing Function Participant engaged by it to, provide to the
Master Servicer or any Person who signs the Sarbanes-Oxley
Certification (the “ Certifying Person ”), by
[March 10] of each year in which the Trust is subject to the
reporting requirements of the Exchange Act and otherwise within a
reasonable period of time upon request, a certification (each, a
“ Back-Up Certification ”), in the form attached
hereto as Exhibit M, upon which the Certifying Person, the entity
for which the Certifying Person acts as an officer, and such
entity’s officers, directors and Affiliates (collectively
with the Certifying Person, “ Certification Parties
”) can reasonably rely. In the event the Master
Servicer, the Securities Administrator, the Trustee or any
Servicing Function Participant engaged by parties is terminated or
resigns pursuant to the terms of this Agreement, or any applicable
sub-servicing agreement, as the case may be, such party shall
provide a Back-Up Certification to the Certifying Person pursuant
to this Section 3.24 with respect to the period of time it was
subject to this Agreement or any applicable sub-servicing
agreement, as the case may be.
(b)
On or before [March 1 st ] of
each year, beginning with [March 1], 20[ ], the Servicer, at
its own expense, will deliver to the Securities Administrator and
the Depositor with respect to the period ending on the immediately
preceding [December 31], a Servicing Officer’s certificate in
the form of Exhibit U hereto.
(c)
The Servicer shall indemnify and hold
harmless the Trustee, the Master Servicer, the Securities
Administrator, the Depositor and their respective officers,
directors, agents and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out
of or based upon a breach by the Servicer or any of its officers,
directors, agents or affiliates of its obligations under this
Section 3.24 or the negligence, bad faith or willful misconduct of
the Servicer in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless
the Trustee, the Master Servicer, the Securities Administrator and
the Depositor, then the Servicer agrees that it shall contribute to
the amount paid or payable by the Trustee, the Master
Servicer, the Securities Administrator, the Depositor or their
respective officers, directors, agents or affiliates as a result of
the losses, claims, damages or liabilities of any such party in
such proportion as is appropriate to reflect the relative fault of
the such party or parties on the one hand and the Servicer on the
other in connection with a breach of the Servicer’s
obligations under this Section 3.24 or the Servicer’s
negligence, bad faith or willful misconduct in connection
therewith.
Section 3.25
Master Servicer to Act as
Servicer .
(a) Subject to Section 7.02, in the event
that the Servicer shall for any reason no longer be the Servicer
hereunder (including by reason of an Event of Default), the Master
Servicer or its successor shall thereupon assume all of the rights
and obligations of the Servicer hereunder arising thereafter,
except that the Master Servicer shall not be (i) liable for
losses of the predecessor Servicer pursuant to Section 3.10 or
any acts or omissions of the predecessor Servicer hereunder,
(ii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including but not limited to repurchases
or substitutions pursuant to Section 2.03,
(iii) responsible for expenses of the predecessor Servicer
pursuant to Section 2.03 or (iv) deemed to have made any
representations and warranties of the Servicer hereunder. Any
such assumption shall be subject to Section 7.02.
