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NATIONSTAR HOME EQUITY LOAN TRUST 2006-B | JPMORGAN CHASE BANK | NATIONSTAR FUNDING LLC | NATIONSTAR MORTGAGE LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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POOLING AND SERVICING AGREEMENT Relating to
NATIONSTAR HOME EQUITY LOAN TRUST 2006-B Among
NATIONSTAR FUNDING LLC, as Depositor,
NATIONSTAR MORTGAGE
LLC,
NATIONSTAR MORTGAGE
LLC, and
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION Dated as of September 1, 2006
TABLE OF CONTENTS ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION 2 Section 1.01. Definitions. 2 Section 1.02. Use of Words and Phrases. 37 Section 1.03. Captions, Table of Contents. 37 Section 1.04. Opinions. 37 ARTICLE II ESTABLISHMENT AND ORGANIZATION OF THE TRUST 38 Section 2.01. Establishment of the Trust. 38 Section 2.02. Office. 38 Section 2.03. Purposes and Powers. 38 Section 2.04. Appointment of the Trustee; Declaration of Trust. 38 Section 2.05. Expenses of the Trust. 38 Section 2.06. Ownership of the Trust. 38 Section 2.07. Situs of the Trust. 39 Section 2.08. Designation of Interests in REMICs. 39 Section 2.09. Miscellaneous REMIC Provisions. 54 Section 2.10. Supplemental Interest Trust. 55
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEPOSITOR, THE SERVICER AND THE SELLER; COVENANT OF SELLER TO CONVEY HOME EQUITY LOANS 56
Section 3.01. Representations and Warranties of the Depositor. 56 Section 3.02. Representations and Warranties of the Servicer. 58 Section 3.03. Representations and Warranties of the Seller. 60 Section 3.04. Covenants of Seller to Take Certain Actions with Respect to the Home Equity Loans in Certain Situations. 62 Section 3.05. Sale Treatment of the Home Equity Loans and Qualified Replacement Mortgages. 72 Section 3.06. Acceptance by Trustee; Certain Substitutions of Home Equity Loans; Certification by Trustee. 77 Section 3.07. High-Cost Home Loans. 79 Section 3.08. Custodian. 79 Section 3.09. Cooperation Procedures. 79 Section 3.10. Payment of Taxes, Insurance and Other Charges. 80 ARTICLE IV ISSUANCE AND SALE OF CERTIFICATES 81 Section 4.01. Issuance of Certificates. 81 Section 4.02. Sale of Certificates. 81 ARTICLE V CERTIFICATES AND TRANSFER OF INTERESTS 82 Section 5.01. Terms. 82 Section 5.02. Forms. 82 Section 5.03. Execution, Authentication and Delivery. 82 Section 5.04. Registration and Transfer of Certificates. 83 Section 5.05. Mutilated, Destroyed, Lost or Stolen Certificates. 85 Section 5.06. Persons Deemed Owners. 86 Section 5.07. Cancellation. 86 Section 5.08. Limitation on Transfer of Ownership Rights. 86 Section 5.09. Assignment of Rights. 88 ARTICLE VI COVENANTS 89 Section 6.01. Distributions. 89 Section 6.02. Money for Distributions to be Held in Trust; Withholding. 89 Section 6.03. Protection of Trust Estate. 90 Section 6.04. Performance of Obligations. 91 Section 6.05. Negative Covenants. 91 Section 6.06. No Other Powers. 92 Section 6.07. Limitation of Suits. 92 Section 6.08. Unconditional Rights of Owners to Receive Distributions. 92 Section 6.09. Rights and Remedies Cumulative. 93 Section 6.10. Delay or Omission Not Waiver. 93 Section 6.11. Control by Owners. 93 Section 6.12. Indemnification by Nationstar Mortgage. 93 ARTICLE VII ACCOUNTS, DISBURSEMENTS AND RELEASES 95 Section 7.01. Collection of Money. 95 Section 7.02. Establishment of Accounts. 95 Section 7.03. Flow of Funds. 95 Section 7.04. Net WAC Cap Carryover Reserve Fund; WAC Excess. 98 Section 7.05. Investment of Accounts. 99 Section 7.06. Payment of Trust Expenses. 100 Section 7.07. Eligible Investments. 100 Section 7.08. Accounting and Directions by Trustee. 102 Section 7.09. Reports by Trustee to Owners. 103 Section 7.10. Reports by Trustee. 106 Section 7.11. Allocation of Losses. 107 Section 7.12. Swap Account. 107 Section 7.13. Tax Treatment of Swap Payments and Swap Termination Payments. 109 ARTICLE VIII SERVICING AND ADMINISTRATION OF HOME EQUITY LOANS 110 Section 8.01. Servicer and Sub-Servicers. 110 Section 8.02. Collection of Certain Home Equity Loan Payments. 111 Section 8.03. Sub-Servicing Agreements Between Servicer and Sub-Servicers. 112 Section 8.04. Successor Sub-Servicers. 112 Section 8.05. Liability of Servicer; Indemnification. 112 Section 8.06. No Contractual Relationship Between Sub-Servicer, Trustee or the Owners. 113 Section 8.07. Assumption or Termination of Sub-Servicing Agreement by Trustee. 113 Section 8.08. Principal and Interest Account. 113 Section 8.09. Delinquency Advances, Servicing Advances and Arrearages. 115 Section 8.10. Compensating Interest; Repurchase of Home Equity Loans. 117 Section 8.11. Maintenance of Insurance. 118 Section 8.12. Due-on-Sale Clauses; Assumption and Substitution Agreements. 119 Section 8.13. Realization Upon Defaulted Home Equity Loans; Workout of Home Equity Loans. 119 Section 8.14. Trustee to Cooperate; Release of Files. 121 Section 8.15. Servicing Compensation. 122 Section 8.16. Annual Statement as to Compliance. 122 Section 8.17. [Reserved]. 123 Section 8.18. Access to Certain Documentation and Information Regarding the Home Equity Loans. 123 Section 8.19. Assignment of Agreement. 123 Section 8.20. Removal of Servicer; Retention of Servicer; Resignation of Servicer. 123 Section 8.21. Inspections; Errors and Omissions Insurance. 127 Section 8.22. Additional Servicing Responsibilities for Second Mortgage Loans. 128 Section 8.23. The Adjustable Rate Home Equity Loans. 128 Section 8.24. Merger, Conversion, Consolidation or Succession to Business of Servicer. 128 Section 8.25. Notices of Material Events. 129 Section 8.26. Indemnification by the Servicer. 129 Section 8.27. Reports on Foreclosure and Abandonment of Properties. 130 Section 8.28. [Reserved]. 130 Section 8.29. Advance Facility. 130 ARTICLE IX TERMINATION OF TRUST 133 Section 9.01. Termination of Trust. 133 Section 9.02. Termination Upon Option of the Servicer. 133 Section 9.03. Disposition of Proceeds. 134 ARTICLE X THE TRUSTEE 135 Section 10.01. Certain Duties and Responsibilities. 135 Section 10.02. Removal of Trustee for Cause. 137 Section 10.03. Certain Rights of the Trustee. 138 Section 10.04. Not Responsible for Recitals or Issuance of Certificates. 140 Section 10.05. May Hold Certificates. 140 Section 10.06. Money Held in Trust. 141 Section 10.07. Compensation and Reimbursement. 141 Section 10.08. Corporate Trustee Required; Eligibility. 141 Section 10.09. Resignation and Removal; Appointment of Successor. 142 Section 10.10. Acceptance of Appointment by Successor Trustee. 143 Section 10.11. Merger, Conversion, Consolidation or Succession to Business of the Trustee. 143 Section 10.12. Reporting; Withholding. 144 Section 10.13. Indemnification and Liability of the Trustee. 144 Section 10.14. Appointment of Co-Trustee or Separate Trustee. 145 Section 10.15. Appointment of Custodians. 146 ARTICLE XI MISCELLANEOUS 147 Section 11.01. Compliance Certificates and Opinions. 147 Section 11.02. Form of Documents Delivered to the Trustee. 147 Section 11.03. Acts of Owners. 148 Section 11.04. Notices, etc. to Trustee. 148 Section 11.05. Notices and Reports to Owners; Waiver of Notices. 149 Section 11.06. Rules by Trustee. 149 Section 11.07. Successors and Assigns. 149 Section 11.08. Severability. 150 Section 11.09. Benefits of Agreement; Third-Party Beneficiaries. 150 Section 11.10. Legal Holidays. 150 Section 11.11. Governing Law; Submission to Jurisdiction. 150 Section 11.12. Counterparts. 151 Section 11.13. Usury. 151 Section 11.14. Amendment. 151 Section 11.15. Paying Agent; Appointment and Acceptance of Duties. 152 Section 11.16. REMIC Status. 153 Section 11.17. Additional Limitation on Action and Imposition of Tax. 155 Section 11.18. Appointment of Tax Matters Person. 156 Section 11.19. Notices. 156 Section 11.20. Rule 144A Information. 158 ARTICLE XII EXCHANGE ACT REPORTING 159 Section 12.01. Filing Obligations. 159 Section 12.02. Form 10-D Filings. 159 Section 12.03. Form 8-K Filings. 160 Section 12.04. Form 10-K Filings. 160 Section 12.05. Sarbanes-Oxley Certification. 161 Section 12.06. Form 15 Filing. 162 Section 12.07. Report on Assessment of Compliance and Attestation. 162 Section 12.08. Use of Subservicers and Subcontractors. 163 Section 12.09. Amendments. 164 SCHEDULE I-A SCHEDULE OF THE FIXED RATE HOME EQUITY LOANS SCHEDULE I-B SCHEDULE OF THE ADJUSTABLE RATE HOME EQUITY LOANS SCHEDULE I-C PREPAYMENT CHARGE SCHEDULE SCHEDULE I-D [RESERVED] SCHEDULE I-E SCHEDULE OF HOME EQUITY LOANS SCHEDULE I-F [RESERVED] SCHEDULE I-G INVESTMENT INSTRUCTIONS TO TRUSTEE SCHEDULE I-H SWAP AGREEMENT SCHEDULE OF NOTIONAL AMOUNTS EXHIBIT A-1 FORM OF CLASS AV-1 CERTIFICATE EXHIBIT A-2 FORM OF CLASS AV-2 CERTIFICATE EXHIBIT A-3 FORM OF CLASS AV-3 CERTIFICATE EXHIBIT A-4 FORM OF CLASS AV-4 CERTIFICATE EXHIBIT A-5 FORM OF CLASS M-1 CERTIFICATE EXHIBIT A-6 FORM OF CLASS M-2 CERTIFICATE EXHIBIT A-7 FORM OF CLASS M-3 CERTIFICATE EXHIBIT A-8 FORM OF CLASS M-4 CERTIFICATE EXHIBIT A-9 FORM OF CLASS M-5 CERTIFICATE EXHIBIT A-10 FORM OF CLASS M-6 CERTIFICATE EXHIBIT A-11 FORM OF CLASS M-7 CERTIFICATE EXHIBIT A-12 FORM OF CLASS M-8 CERTIFICATE EXHIBIT A-13 FORM OF CLASS M-9 CERTIFICATE EXHIBIT A-14 FORM OF CLASS M-10 CERTIFICATE EXHIBIT A-15 FORM OF CLASS M-11 CERTIFICATE EXHIBIT B-1 FORM OF CLASS X-IO CERTIFICATE EXHIBIT B-2 FORM OF CLASS P CERTIFICATE EXHIBIT C FORM OF CLASS R CERTIFICATE EXHIBIT D FORM OF CERTIFICATE RE: HOME EQUITY LOANS PREPAID IN FULL AFTER THE CUT-OFF DATE EXHIBIT E-1 FORM OF TRUSTEE’S ACKNOWLEDGEMENT OF RECEIPT EXHIBIT E-2 FORM OF CUSTODIAN’S ACKNOWLEDGEMENT OF RECEIPT EXHIBIT E-3 FORM OF DELAYED DELIVERY CERTIFICATION EXHIBIT F FORM OF POOL CERTIFICATION EXHIBIT G FORM OF DELIVERY ORDER EXHIBIT H FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE EXHIBIT I-1 FORM OF CERTIFICATE REGARDING TRANSFER (ACCREDITED INVESTOR) EXHIBIT I-2 FORM OF CERTIFICATE OF TRANSFER (RULE 144A) EXHIBIT J HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS EXHIBIT K [RESERVED] EXHIBIT L [RESERVED] EXHIBIT M [RESERVED] EXHIBIT N FORM OF REQUEST FOR RELEASE OF DOCUMENTS EXHIBIT O [RESERVED] EXHIBIT P [RESERVED] EXHIBIT Q [RESERVED] EXHIBIT R SWAP AGREEMENT EXHIBIT S [RESERVED] EXHIBIT T-1 FORM OF PERFORMANCE CERTIFICATION (TRUSTEE) EXHIBIT T-2 FORM OF PERFORMANCE CERTIFICATION (SUBSERVICER) EXHIBIT U FORM OF SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE STATEMENT EXHIBIT V LIST OF ITEM 1119 PARTIES EXHIBIT W FORM OF SARBANES-OXLEY CERTIFICATION
POOLING AND SERVICING AGREEMENT, relating to NATIONSTAR HOME EQUITY LOAN TRUST 2006-B, dated as of September 1, 2006 by and among NATIONSTAR FUNDING LLC, a Delaware limited liability company, in its capacity as the depositor (the “Depositor”), NATIONSTAR MORTGAGE LLC, a Delaware limited liability company, formerly Centex Home Equity Company, LLC, a Delaware limited liability company (“Nationstar Mortgage”) in its capacities as the seller (in such capacity, the “Seller”) and as the servicer (in such capacity, the “Servicer”), and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association, in its capacity as the trustee (the “Trustee”). WHEREAS, the Seller wishes to establish a trust and provide for the allocation and sale of the beneficial interests therein and the maintenance and distribution of the trust estate; WHEREAS, the Seller wishes to sell to the Depositor, the Depositor wishes to purchase from the Seller and to sell to the Trustee, and the Trustee wishes to purchase, the Home Equity Loans and all payments thereon, including all Prepayment Charges; WHEREAS, the Servicer has agreed to service the Home Equity Loans, which constitute the principal assets of the trust estate; WHEREAS, all things necessary to make the Certificates, when executed and authenticated by the Trustee, valid instruments, and to make this Agreement a valid agreement, in accordance with their and its terms, have been done; and WHEREAS, JPMorgan Chase Bank, National Association is willing to serve in the capacity of Trustee hereunder. NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Depositor, the Seller, the Servicer, and the Trustee hereby agree as follows: CONVEYANCE The Seller hereby bargains, sells, conveys, assigns and transfers to the Depositor, in trust, without recourse and for the exclusive benefit of the Owners of the Certificates, all of its right, title and interest in and to (a) all principal collected and interest due on the Home Equity Loans on and after the Cut-Off Date, and any and all other benefits accruing from the Home Equity Loans which the Depositor is causing to be delivered to the Custodian on behalf of the Trustee herewith, together with the related Home Equity Loan documents and the Depositor’s interest in any Property, and all payments thereon, including all Prepayment Charges, and proceeds of the conversion, voluntary or involuntary, of the foregoing, and (b) proceeds of all the foregoing (including, but not by way of limitation, all proceeds of any mortgage insurance, flood insurance, hazard insurance and title insurance policy relating to the Home Equity Loans, cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, rights to payment of any and every kind, and other forms of obligations and receivables which at any time constitute all or part of or are included in the proceeds of any of the foregoing) to pay the Certificates as specified herein (the “Home Equity Loan Assets”). The Depositor, concurrently with the execution and delivery hereof, hereby bargains, sells, conveys, assigns and transfers to the Trustee for the benefit of the Owners of the Certificates, without recourse, all the right, title and interest of the Depositor in and to the Trust Estate. The Trustee acknowledges such sale, accepts the trusts hereunder in accordance with the provisions hereof and agrees to perform the duties herein in accordance with the provisions of the Operative Documents.
ARTICLE I Section 1.01. Definitions. For all purposes of this Agreement, the following terms shall have the meanings set forth below, unless the context clearly indicates otherwise: “Account”: Any account established in accordance with Section 7.02 or 8.08 hereof. “Additional Designated Information”: As defined in Section 12.02. “Adjustable Rate Home Equity Loans”: With respect to the Home Equity Loans, the pool of adjustable rate Home Equity Loans identified in Schedule I-B hereto, including any Qualified Replacement Mortgages delivered in replacement thereof. “Advance Facility”: As defined in Section 8.29(a) hereof. “Advancing Person”: As defined in Section 8.29(a) hereof. “Affiliate”: With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “controlling” and “controlled” have meanings correlative to the foregoing. “Agreement”: This Pooling and Servicing Agreement, as it may be amended from time to time, including the Exhibits and Schedules hereto. “Applied Realized Loss Amounts”: As to any Distribution Date, an amount equal to the excess, if any, of (i) the aggregate Certificate Principal Balance of the Offered Certificates, after giving effect to all distributions on such Distribution Date over (ii) the Pool Balance as of the last day of the related Remittance Period. “Appraised Value”: The appraised value of any Property based upon the appraisal made at the time of the origination of the related Home Equity Loan, or, in the case of a Home Equity Loan which is a purchase money mortgage, the sales price of the Property, if such sales price is less than such appraised value. “Arrearage”: A Property Protection Arrearage and/or a Delinquency Arrearage, as the context requires. “Authorized Officer”: With respect to any Person, any officer of such Person who is authorized to act for such Person in matters relating to this Agreement, and whose action is binding upon such Person; with respect to the Depositor, the Seller and the Servicer, initially including those individuals whose names appear on the lists of Authorized Officers delivered at the Closing; with respect to the Trustee, any officer assigned to the Corporate Trust Office (or any successor thereto), including any Vice President, Assistant Vice President, Trust Officer, Assistant Secretary or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and having direct responsibility for the administration of this Agreement or any other officers of the Trustee to whom a matter arising under this Agreement may be referred. “Basic Principal Amount”: With respect to each Distribution Date shall be the sum of (without duplication): (a) the principal portion of all scheduled monthly payments on the Home Equity Loans actually received by the Servicer during the related Remittance Period and any Prepayments on the Home Equity Loans made on behalf of the obligors on Home Equity Loans actually received by the Servicer during the related Remittance Period in each case to the extent the amounts are received by the Trustee on or prior to the Monthly Remittance Date; (b) the outstanding principal balance of each Home Equity Loan that was purchased by the Seller or the Servicer on or prior to the related Monthly Remittance Date in each case to the extent the amounts are received by the Trustee on or prior to the Monthly Remittance Date; (c) any Substitution Amounts relating to principal, delivered by the Seller on the related Monthly Remittance Date in connection with a substitution of a Home Equity Loan, in each case to the extent the amounts are received by the Trustee on or prior to the Monthly Remittance Date; (d) all Net Liquidation Proceeds and Recoveries actually collected by or on behalf of the Servicer with respect to the Home Equity Loans during the related Remittance Period (to the extent the Net Liquidation Proceeds and Recoveries relate to principal) in each case to the extent the amounts are received by the Trustee on or prior to the Monthly Remittance Date; and (e) the principal portion of the proceeds received by the Trustee upon termination of the Trust. “Business Day”: Any day other than a Saturday, Sunday or a day on which commercial banking institutions in New York, New York, Dallas, Texas, the city in which the Corporate Trust Office is located or, with respect to the obligations of the Custodian hereunder, the State of Texas or any other state where the principal office of the Custodian is located, are authorized or obligated by law or executive order to be closed. “Certificate”: Any one of the Offered Certificates, the Class X-IO Certificates, the Class P Certificates or the Class R Certificates, each representing the interests and the rights described in this Agreement. “Certificate Account”: The segregated certificate account established in accordance with Section 7.02(a) hereof and maintained at the Corporate Trust Office entitled “JPMorgan Chase Bank, National Association, as Trustee on behalf of the Owners of the Nationstar Home Equity Loan Trust 2006-B, Nationstar Home Equity Loan Asset-Backed Certificates.” The Certificate Account shall be an Eligible Account. “Certificate Principal Balance”: As of the Startup Day as to each of the following Classes of Offered Certificates and Class P Certificates, the principal balances thereof, as follows:
As of any time of determination after the Startup Day, the Certificate Principal Balance of a Class of Offered Certificates and the Class P Certificates shall be the Certificate Principal Balance of such Class as of the Startup Day less the aggregate of all amounts actually distributed to such Class in reduction of such Class’s Certificate Principal Balance pursuant to Section 7.03 hereof on all prior Distribution Dates and, in the case of any Class of Subordinate Certificates, reduced by any Applied Realized Loss Amounts and increased by any Recoveries allocated to such Class on prior Distribution Dates. The Class X-IO Certificates and the Class R Certificates do not have a Certificate Principal Balance. “Certificate Rate”: Any of the Class AV-1 Certificate Rate, the Class AV-2 Certificate Rate, the Class AV-3 Certificate Rate, the Class AV-4 Certificate Rate, the Class M-1 Certificate Rate, the Class M-2 Certificate Rate, the Class M-3 Certificate Rate, the Class M-4 Certificate Rate, the Class M-5 Certificate Rate, the Class M-6 Certificate Rate, the Class M-7 Certificate Rate, the Class M-8 Certificate Rate, the Class M-9 Certificate Rate, the Class M-10 Certificate Rate or the Class M-11 Certificate Rate. “Certification Parties”: As defined in Section 12.05. “Certifying Person”: As defined in Section 12.05. “Class”: Any class of the Offered Certificates or the Class X-IO Certificates, the Class P Certificates or the Class R Certificates. “Class AV-1 Certificate”: Any one of the Certificates designated on the face thereof as a Class AV-1 Certificate, substantially in the form annexed hereto as Exhibit A-1 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class AV-1 Certificate Rate”: With respect to any Distribution Date and the Class AV-1 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.070% per annum (or 0.140% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class AV-2 Certificate”: Any one of the Certificates designated on the face thereof as a Class AV-2 Certificate, substantially in the form annexed hereto as Exhibit A-2 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class AV-2 Certificate Rate”: With respect to any Distribution Date and the Class AV-2 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.130% per annum (or 0.260% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class AV-3 Certificate”: Any one of the Certificates designated on the face thereof as a Class AV-3 Certificate, substantially in the form annexed hereto as Exhibit A-3 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class AV-3 Certificate Rate”: With respect to any Distribution Date and the Class AV-3 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.170% per annum (or 0.340% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class AV-4 Certificate”: Any one of the Certificates designated on the face thereof as a Class AV-4 Certificate, substantially in the form annexed hereto as Exhibit A-4 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class AV-4 Certificate Rate”: With respect to any Distribution Date and the Class AV-4 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.280% per annum (or 0.560% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class Interest Carryover Shortfall”: As to any Class of Offered Certificates and any Distribution Date, an amount equal to the sum of (i) the excess of the related Class Monthly Interest Amount for the preceding Distribution Date and any outstanding Class Interest Carryover Shortfall with respect to such Class on any preceding Distribution Date, over the amount in respect of interest that is actually distributed to the Owners of such Class on such preceding Distribution Date plus (ii) one month’s interest on such excess, to the extent permitted by law, at the Certificate Rate for such Class. “Class M-1 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-1 Certificate, substantially in the form annexed hereto as Exhibit A-5 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-1 Certificate Rate”: With respect to any Distribution Date and the Class M-1 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.330% per annum (or 0.495% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-1 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance of Class of the Senior Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to distributions of the Senior Principal Distribution Amount for such Distribution Date) and (B) the Certificate Principal Balance of the Class M-1 Certificates immediately prior to such Distribution Date over (2) the lesser of (A) 63.20% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-2 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-2 Certificate, substantially in the form annexed hereto as Exhibit A-6 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-2 Certificate Rate”: With respect to any Distribution Date and the Class M-2 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.360% per annum (or 0.540% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-2 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance of each of the Senior and Class M-1 Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to distributions of the Senior Principal Distribution Amount for such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to distribution of the Class M-1 Principal Distribution Amount for such Distribution Date) and (C) the Certificate Principal Balance of the Class M-2 Certificates immediately prior to such Distribution Date over (2) the lesser of (A) 72.10% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-3 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-3 Certificate, substantially in the form annexed hereto as Exhibit A-7 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-3 Certificate Rate”: With respect to any Distribution Date and the Class M-3 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.370% per annum (or 0.555% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-3 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance of each of the Senior, Class M-1 and Class M-2 Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to distributions of the Senior Principal Distribution Amount for such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to distribution of the Class M-1 Principal Distribution Amount for such Distribution Date), (C) the Certificate Principal Balance of the Class M-2 Certificates (after giving effect to distribution of the Class M-2 Principal Distribution Amount for such Distribution Date) and (D) the Certificate Principal Balance of the Class M-3 Certificates immediately prior to such Distribution Date over (2) the lesser of (A) 75.70% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-4 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-4 Certificate, substantially in the form annexed hereto as Exhibit A-8 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-4 Certificate Rate”: With respect to any Distribution Date and the Class M-4 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.440% per annum (or 0.660% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-4 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance of each of the Senior, Class M-1, Class M-2 and Class M-3 Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to distributions of the Senior Principal Distribution Amount for such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to distribution of the Class M-1 Principal Distribution Amount for such Distribution Date), (C) the Certificate Principal Balance of the Class M-2 Certificates (after giving effect to distribution of the Class M-2 Principal Distribution Amount for such Distribution Date), (D) the Certificate Principal Balance of the Class M-3 Certificates (after giving effect to distribution of the Class M-3 Principal Distribution Amount for such Distribution Date) and (E) the Certificate Principal Balance of the Class M-4 Certificates immediately prior to such Distribution Date over (2) the lesser of (A) 79.00% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-5 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-5 Certificate, substantially in the form annexed hereto as Exhibit A-9 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-5 Certificate Rate”: With respect to any Distribution Date and the Class M-5 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.500% per annum (or 0.750% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-5 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance of each of the Senior, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to distributions of the Senior Principal Distribution Amount for such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to distribution of the Class M-1 Principal Distribution Amount for such Distribution Date), (C) the Certificate Principal Balance of the Class M-2 Certificates (after giving effect to distribution of the Class M-2 Principal Distribution Amount for such Distribution Date), (D) the Certificate Principal Balance of the Class M-3 Certificates (after giving effect to distribution of the Class M-3 Principal Distribution Amount for such Distribution Date), (E) the Certificate Principal Balance of the Class M-4 Certificates (after giving effect to distribution of the Class M-4 Principal Distribution Amount for such Distribution Date) and (F) the Certificate Principal Balance of the Class M-5 Certificates immediately prior to such Distribution Date over (2) the lesser of (A) 82.20% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-6 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-6 Certificate, substantially in the form annexed hereto as Exhibit A-10 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-6 Certificate Rate”: With respect to any Distribution Date and the Class M-6 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.550% per annum (or 0.825% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-6 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance of each of the Senior, Class M-1, Class M-2, Class M-3, Class M-4 and Class M 5 Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to distributions of the Senior Principal Distribution Amount for such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to distribution of the Class M-1 Principal Distribution Amount for such Distribution Date), (C) the Certificate Principal Balance of the Class M-2 Certificates (after giving effect to distribution of the Class M-2 Principal Distribution Amount for such Distribution Date), (D) the Certificate Principal Balance of the Class M-3 Certificates (after giving effect to distribution of the Class M-3 Principal Distribution Amount for such Distribution Date), (E) the Certificate Principal Balance of the Class M-4 Certificates (after giving effect to distribution of the Class M-4 Principal Distribution Amount for such Distribution Date), (F) the Certificate Principal Balance at the Class M-5 Certificates (after giving effect to distribution of the Class M-5 Principal Distribution Amount for such Distribution Date), and (G) the Certificate Principal Balance of the Class M-6 Certificates immediately prior to such Distribution Date over (2) the lesser of (A) 84.70% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-7 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-7 Certificate, substantially in the form annexed hereto as Exhibit A-11 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-7 Certificate Rate”: With respect to any Distribution Date and the Class M-7 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 0.900% per annum (or 1.350% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-7 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance of each of the Senior, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to distributions of the Senior Principal Distribution Amount for such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to distribution of the Class M-1 Principal Distribution Amount for such Distribution Date), (C) the Certificate Principal Balance of the Class M-2 Certificates (after giving effect to distribution of the Class M-2 Principal Distribution Amount for such Distribution Date), (D) the Certificate Principal Balance of the Class M-3 Certificates (after giving effect to distribution of the Class M-3 Principal Distribution Amount for such Distribution Date), (E) the Certificate Principal Balance of the Class M-4 Certificates (after giving effect to distribution of the Class M-4 Principal Distribution Amount for such Distribution Date), (F) the Certificate Principal Balance of the Class M-5 Certificates (after giving effect to distribution of the Class M-5 Principal Distribution Amount for such Distribution Date), (G) the Certificate Principal Balance of the Class M-6 Certificates (after giving effect to distribution of the Class M-6 Principal Distribution Amount for such Distribution Date) and (H) the Certificate Principal Balance of the Class M-7 Certificates immediately prior to such Distribution Date over (2) the lesser of (A) 87.10% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-8 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-8 Certificate, substantially in the form annexed hereto as Exhibit A-12 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-8 Certificate Rate”: With respect to any Distribution Date and the Class M-8 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 1.050% per annum (or 1.575% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-8 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance each Class of Senior Certificates, the Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6 Certificates and the Class M-7 Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to the distribution of the Senior Principal Distribution Amount on such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to the distribution of the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the Certificate Principal Balance of the Class M-2 Certificates (after giving effect to the distribution of the Class M-2 Principal Distribution Amount on such Distribution Date), (D) the Certificate Principal Balance of the Class M-3 Certificates (after giving effect to the distribution of the Class M-3 Principal Distribution Amount on such Distribution Date), (E) the Certificate Principal Balance of the Class M-4 Certificates (after giving effect to the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (F) the Certificate Principal Balance of the Class M-5 Certificates (after giving effect to the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (G) the Certificate Principal Balance of the Class M-6 Certificates (after giving effect to the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (H) the Certificate Principal Balance of the Class M-7 Certificates (after giving effect to the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date) and (I) the Certificate Principal Balance of the Class M-8 Certificates immediately prior to such Distribution Date, over (2) the lesser of (A) 89.00% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-9 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-9 Certificate, substantially in the form annexed hereto as Exhibit A-13 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-9 Certificate Rate”: With respect to any Distribution Date and the Class M-9 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 2.150% per annum (or 3.225% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-9 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance each Class of Senior Certificates, the Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6 Certificates, the Class M-7 Certificates and the Class M-8 Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to the distribution of the Senior Principal Distribution Amount on such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to the distribution of the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the Certificate Principal Balance of the Class M-2 Certificates (after giving effect to the distribution of the Class M-2 Principal Distribution Amount on such Distribution Date), (D) the Certificate Principal Balance of the Class M-3 Certificates (after giving effect to the distribution of the Class M-3 Principal Distribution Amount on such Distribution Date), (E) the Certificate Principal Balance of the Class M-4 Certificates (after giving effect to the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (F) the Certificate Principal Balance of the Class M-5 Certificates (after giving effect to the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (G) the Certificate Principal Balance of the Class M-6 Certificates (after giving effect to the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (H) the Certificate Principal Balance of the Class M-7 Certificates (after giving effect to the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date), (I) the Certificate Principal Balance of the Class M-8 Certificates (after giving effect to the distribution of the Class M-8 Principal Distribution Amount on such Distribution Date) and (J) the Certificate Principal Balance of the Class M-9 Certificates immediately prior to such Distribution Date, over (2) the lesser of (A) 91.50% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-10 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-10 Certificate, substantially in the form annexed hereto as Exhibit A-14 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-10 Certificate Rate”: With respect to any Distribution Date and the Class M-10 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 2.500% per annum (or 3.750% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-10 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date, (x) 100% of the Principal Distribution Amount if the Certificate Principal Balance each Class of Senior Certificates, the Class M-1 Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class M-5 Certificates, the Class M-6 Certificates, the Class M-7 Certificates, the Class M-8 Certificates and the Class M-9 Certificates has been reduced to zero and a Trigger Event exists, or (y) if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to the distribution of the Senior Principal Distribution Amount on such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to the distribution of the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the Certificate Principal Balance of the Class M-2 Certificates (after giving effect to the distribution of the Class M-2 Principal Distribution Amount on such Distribution Date), (D) the Certificate Principal Balance of the Class M-3 Certificates (after giving effect to the distribution of the Class M-3 Principal Distribution Amount on such Distribution Date), (E) the Certificate Principal Balance of the Class M-4 Certificates (after giving effect to the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (F) the Certificate Principal Balance of the Class M-5 Certificates (after giving effect to the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (G) the Certificate Principal Balance of the Class M-6 Certificates (after giving effect to the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (H) the Certificate Principal Balance of the Class M-7 Certificates (after giving effect to the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date), (I) the Certificate Principal Balance of the Class M-8 Certificates (after giving effect to the distribution of the Class M-8 Principal Distribution Amount on such Distribution Date) , (J) the Certificate Principal Balance of the Class M-9 Certificates (after giving effect to the distribution of the Class M-9 Principal Distribution Amount on such Distribution Date) , and (K) the Certificate Principal Balance of the Class M-10 Certificates immediately prior to such Distribution Date, over (2) the lesser of (A) 93.80% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Class M-11 Certificate”: Any one of the Certificates designated on the face thereof as a Class M-11 Certificate, substantially in the form annexed hereto as Exhibit A-15 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for purposes of the REMIC Provisions. “Class M-11 Certificate Rate”: With respect to any Distribution Date and the Class M-11 Certificates, the lesser of (A) the sum of (1) LIBOR and (2) 2.500% per annum (or 3.750% per annum for each Interest Period occurring after the Clean-Up Call Date) and (B) the Net WAC Cap for the Distribution Date. “Class M-11 Principal Distribution Amount”: As to any Distribution Date on or after the Stepdown Date and if a Trigger Event is not in effect, the excess of (1) the sum of (A) the aggregate Certificate Principal Balance of the Senior Certificates (after giving effect to the distribution of the Senior Principal Distribution Amount on such Distribution Date), (B) the Certificate Principal Balance of the Class M-1 Certificates (after giving effect to the distribution of the Class M-1 Principal Distribution Amount on such Distribution Date), (C) the Certificate Principal Balance of the Class M-2 Certificates (after giving effect to the distribution of the Class M-2 Principal Distribution Amount on such Distribution Date), (D) the Certificate Principal Balance of the Class M-3 Certificates (after giving effect to the distribution of the Class M-3 Principal Distribution Amount on such Distribution Date), (E) the Certificate Principal Balance of the Class M-4 Certificates (after giving effect to the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (F) the Certificate Principal Balance of the Class M-5 Certificates (after giving effect to the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (G) the Certificate Principal Balance of the Class M-6 Certificates (after giving effect to the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (H) the Certificate Principal Balance of the Class M-7 Certificates (after giving effect to the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date), (I) the Certificate Principal Balance of the Class M-8 Certificates (after giving effect to the distribution of the Class M-8 Principal Distribution Amount on such Distribution Date) , (J) the Certificate Principal Balance of the Class M-9 Certificates (after giving effect to the distribution of the Class M-9 Principal Distribution Amount on such Distribution Date) , (K) the Certificate Principal Balance of the Class M-10 Certificates (after giving effect to the distribution of the Class M-10 Principal Distribution Amount on such Distribution Date) , and (L) the Certificate Principal Balance of the Class M-11 Certificates immediately prior to such Distribution Date, over (2) the lesser of (A) 95.80% of the Pool Balance as of the last day of the related Remittance Period and (B) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor; provided, however, that after the Certificate Principal Balances of the Senior Certificates and the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates are reduced to zero, the Class M-11 Principal Distribution Amount for the applicable Distribution Date will equal 100% of the Principal Distribution Amount. “Class Monthly Interest Amount”: With respect to each Class of Offered Certificates means, with respect to any Distribution Date, the aggregate amount of interest accrued during the related Interest Period at the related Certificate Rate on the Certificate Principal Balance of the Class of Offered Certificates. “Class P Certificate”: Any one of the Certificates designated on the face thereof as a Class P Certificate, substantially in the form annexed hereto as Exhibit B-2 authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and each evidencing a percentage ownership of the Prepayment Charges. “Class Principal Carryover Shortfall”: As to any Class of Subordinate Certificates and any Distribution Date, the excess, if any, of (i) the sum of (x) the amount of the reduction in the Certificate Principal Balance of that Class of Subordinate Certificates on such Distribution Date as a result of the application of Applied Realized Loss Amounts and (y) the amount of such reductions on prior Distribution Dates over (ii) the sum of (x) the amount distributed in respect of the Class Principal Carryover Shortfall to such Class of Subordinate Certificates on prior Distribution Dates and (y) the amount of any increases in the Certificate Principal Balance of that Class of Subordinate Certificates on such Distribution Date and any prior Distribution Dates as a result of the application of Recoveries to such Class as provided in Section 7.11(b) hereof. “Class Principal Distribution Amount”: The Senior Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2 Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the Class M-4 Principal Distribution Amount, the Class M-5 Principal Distribution Amount, the Class M-6 Principal Distribution Amount, the Class M-7 Principal Distribution Amount, the Class M-8 Principal Distribution Amount, the Class M-9 Principal Distribution Amount, the Class M-10 Principal Distribution Amount or the Class M-11 Principal Distribution Amount, as the case may be. “Class R Certificate”: Any one of the Certificates designated on the face thereof as a Class R Certificate, substantially in the form annexed hereto as Exhibit C, authenticated and delivered by the Trustee, representing the right to distributions as set forth herein. For the purposes of the REMIC Provisions, the Class R Certificate shall evidence (i) an interest designated as the R-1 Interest, which is the “residual interest” in REMIC I, the R-2 Interest, which is the “residual interest” in REMIC II and (ii) an interest designated as the R-3 Interest, which is the “residual interest” in the Master REMIC. The Owner of the Class R Certificate shall be entitled to separate such Certificate into its component R-1 Interest, R-2 Interest and R-3 Interest parts, as further described in the Class R Certificate attached hereto as Exhibit C. “Class X-IO Certificate”: Any one of the Certificates designated on the face thereof as a Class X-IO Certificate, substantially in the form annexed hereto as Exhibit B-1, authenticated and delivered by the Trustee, representing the right to distributions as set forth herein, and evidencing ownership of an interest designated as a “regular interest” in the Master REMIC created hereunder for the purposes of the REMIC Provisions. “Class X-IO Distribution Amount”: With respect to any Distribution Date, the lesser of (i) the aggregate funds, if any, remaining after the making of all applications, transfers and disbursements described in Sections 7.03(b) clause 1. through clause 17. hereof and (ii) the amount described in footnote (17) of Section 2.08(g) for the current and for all prior Distribution Dates less amounts treated as distributed to the Class X-IO Certificates on prior Distribution Dates pursuant to Sections 7.03(b) clauses 18. and 23. “Class X-IO Shortfall Amount”: As defined in Section 7.12(e). “Clean-Up Call Date”: The first Distribution Date following the last day of the Remittance Period on which the Pool Balance has declined to 10% or less of the Pool Balance as of the Cut-Off Date. “Closing”: As defined in Section 4.02 hereof. “Code”: The Internal Revenue Code of 1986, as amended. “Commission”: The Securities and Exchange Commission. “Compensating Interest”: As defined in Section 8.10(a) hereof. “Corporate Trust Office”: The principal office of the Trustee at 4 New York Plaza, 6 th Floor, New York, New York 10004, Attention: Global Dept. Nationstar Home Equity Loan Trust 2006-B (as of the Startup Day), or at such other address as the Trustee may designate by notice to the Depositor, the Seller, the Servicer and the Owners, or the principal office of any successor Trustee hereunder. “Coupon Rate”: The rate of interest borne by each Note from time to time. “Cram Down Loss”: With respect to a Home Equity Loan, if a court of appropriate jurisdiction in an insolvency proceeding shall have issued an order reducing the Loan Balance of such Home Equity Loan, the amount of such reduction. A “Cram Down Loss” shall be deemed to have occurred on the date of issuance of such order. “Cumulative Loss Trigger Event”: With respect to any Distribution Date and the Home Equity Loans, shall have occurred if the fraction, expressed as a percentage, obtained by dividing (x) the aggregate amount of cumulative Realized Losses incurred on the Home Equity Loans from the Cut-Off Date through the last day of the related Remittance Period (less the aggregate amount of Recoveries during such period) by (y) the aggregate Loan Balance of the Home Equity Loans as of the Cut-Off Date, exceeds the applicable percentage described below with respect to such Distribution Date:
“Custodial Agreement”: The Custodial Agreement dated as of September 1, 2006 among the Custodian, the Servicer and the Trustee. “Custodian”: J.P. Morgan Trust Company, National Association, as Custodian on behalf of the Trustee pursuant to the Custodial Agreement and any successor Custodian. “Cut-Off Date”: The later of (i) the opening of business on September 1, 2006 and (ii) the date of origination with respect to a Home Equity Loan, but in no event later than the Startup Day. “Delayed Delivery Home Equity Loans”: The Home Equity Loans for which all or a portion of a related File is not delivered to the Trustee or the Custodian on behalf of the Trustee on the Startup Day. The number of Delayed Delivery Home Equity Loans shall not exceed 10% of the aggregate Loan Balance of the Home Equity Loans as of the Cut-Off Date. To the extent that Nationstar Mortgage shall be in possession of any Files with respect to any Delayed Delivery Home Equity Loan, until delivery of such File to the Trustee or the Custodian on behalf of the Trustee, as provided in Section 3.05, Nationstar Mortgage shall hold such files as Servicer hereunder, as agent and in trust for the Trustee. “Delinquency Advance”: As defined in Section 8.09(a) hereof. “Delinquency Arrearage”: With respect to any Home Equity Loan, advances made prior to the Cut-off Date by Nationstar Mortgage, as servicer, in respect of delinquent payments of interest, which remain unreimbursed as of the Cut-off Date. “Delinquency Event”: A Delinquency Event shall have occurred and be continuing if, at any time, the 60+ Delinquency Percentage (Rolling Three Month) exceeds 36.87% of the Senior Enhancement Percentage. “Delinquent”: A Home Equity Loan is “Delinquent” if any payment due thereon is not made by the Mortgagor by the close of business on the related Due Date; provided, however, if a Home Equity Loan has an Arrearage, such Home Equity Loan shall not be “Delinquent” due to such Arrearage. A Home Equity Loan is “30 days Delinquent” if such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31 st day of such month) then on the last day of such immediately succeeding month. Similarly for “60 days Delinquent,” “90 days Delinquent” and so on. “Delivery Order”: The delivery order in the form set forth as Exhibit G hereto and delivered by the Depositor to the Trustee on the Startup Day pursuant to Section 4.01 hereof. “Depositor”: Nationstar Funding LLC, a Delaware limited liability company, or any successor thereto. “Depository”: The Depository Trust Company, 7 Hanover Square, New York, New York, 10004, and any successor Depository. “Designated Depository Institution”: With respect to the Principal and Interest Account, a trust account maintained by the trust department of a federal or state chartered depository institution, acting in its fiduciary capacity, having combined capital and surplus of at least $100,000,000; provided, however, that if the Principal and Interest Account is not maintained with the Trustee, (i) such institution shall have a long-term debt rating of at least “A” by Standard & Poor’s, “A2” by Moody’s and, if rated by Fitch, “A” by Fitch and (ii) the Servicer shall provide the Trustee with a statement, which the Trustee will send to the Owners, identifying the location and account information of the Principal and Interest Account upon a change in the location of such account. “Direct Participant” or “DTC Participant”: Any broker-dealer, bank or other financial institution for which the Depository holds Offered Certificates from time to time as a securities depository. “Disqualified Organization”: The meaning set forth from time to time in the definition thereof at Section 860E(e)(5) of the Code (or any successor statute thereto). “Distribution Date”: Any date on which the Trustee is required to make distributions to the Owners, which shall be the 25 th day of each month or if such day is not a Business Day, the next Business Day thereafter, commencing in the month following the Startup Day. “Downgrade Provisions”: Provisions of the Swap Agreement which are triggered if the short-term or long-term credit ratings of the Swap Provider fall below certain levels specified in the Swap Agreement. “Due Date”: With respect to any Home Equity Loan, the date on which the Monthly Payment with respect to such Home Equity Loan is required to be paid pursuant to the related Note exclusive of any days of grace. “EDGAR”: The Commission’s Electronic Data Gathering, Analysis and Retrieval system. “Eligible Account”: Either (A) a segregated account or accounts maintained with an institution whose deposits are insured by the FDIC, the unsecured and uncollateralized debt obligations of which institution shall be rated “AA” or higher by Standard & Poor’s and, in the case of any institution other than JPMorgan Chase Bank, National Association, “Aa2” or higher by Moody’s and, if rated by Fitch, “AA” or higher by Fitch, (in the case of its long-term obligations), and in the highest short term rating category by each of Standard & Poor’s, Moody’s and, if rated by Fitch, Fitch (in the case of its short-term obligations), and which is (i) a federal savings and loan association duly organized, validly existing and in good standing under the federal banking laws, (ii) an institution duly organized, validly existing and in good standing under the applicable banking laws of any state, (iii) a national banking association duly organized, validly existing and in good standing under the federal banking laws, (iv) a principal subsidiary of a bank holding company, or (v) approved in writing by each of the Rating Agencies or (B) a segregated trust account or accounts maintained with the Corporate Trust Office of the Trustee, or the trust department of a federal or state chartered depository institution acceptable to each Rating Agency, having capital and surplus of not less than $100,000,000, acting in its fiduciary capacity. “Eligible Investments”: Those investments so designated pursuant to Section 7.07 hereof. “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 an Underwriter’s Exemption. “ERISA-Restricted Certificate”: Any Class M-10, Class M-11, Class X-IO, Class P and Class R Certificate and any Certificate with a rating below the lowest applicable rating permitted under an Underwriter’s Exemption. “ERISA-Restricted Swap Certificate”: Any Offered Certificate. “Events of Default”: Under the Swap Agreement (each a “Swap Default”), among others, the following standard events of default under the ISDA Master Agreement, as described in Sections 5(a)(i), 5(a)(vii) and 5(a)(viii) of the ISDA Master Agreement: · Failure to Pay or Deliver, · “Bankruptcy” (as amended in the Swap Agreement) and · “Merger without Assumption” (but only with respect to the Swap Provider). “Excess Interest”: As to any Distribution Date, the amounts remaining after the application of payments pursuant to clauses 1 through 15 of Section 7.03(b). “Excess Overcollateralization Amount”: As to any Distribution Date, the lesser of (i) the Basic Principal Amount for that Distribution Date and (ii) the excess, if any, of (x) the Overcollateralization Amount (assuming 100% of the Basic Principal Amount is distributed on the Offered Certificates) over (y) the Required Overcollateralization Amount. “Exchange Act”: The Securities Exchange Act of 1934, as amended. “Exchange Act Reports”: Any reports on Form 10-D, Form 8-K and Form 10-K required to be filed by the Depositor with respect to the Trust Estate under the Exchange Act. “FAS 140”: The Statement of Financial Accounting Standards No. 140 issued by the Financial Accounting Standards Board, dated September 2000. “FDIC”: The Federal Deposit Insurance Corporation, a corporate instrumentality of the United States, or any successor thereto. “FHLMC”: The Federal Home Loan Mortgage Corporation, a corporate instrumentality of the United States created pursuant to the Emergency Home Finance Act of 1970, as amended, or any successor thereof. “File”: The documents delivered to the Custodian on behalf of the Trustee pursuant to Section 3.05(b) hereof pertaining to a particular Home Equity Loan and any additional documents required to be added to the File pursuant to this Agreement. “Final Certification”: As defined in Section 3.06(c) hereof. “Final Recovery Determination”: With respect to any defaulted Home Equity Loan or REO Property (other than a Home Equity Loan purchased by the Seller, the Depositor or the Servicer), a determination made by the Servicer that all recoveries which the Servicer, in its reasonable business judgment, expects to be finally recoverable in respect thereof have been so recovered or that the Servicer believes in its reasonable business judgment the cost of obtaining any additional recoveries therefrom would exceed the amount of such recoveries. The Servicer shall maintain records of each Final Recovery Determination. “Final Scheduled Distribution Date”: As set out in Section 2.08(g) hereof with respect to each Certificate. “First Mortgage Loan”: A Home Equity Loan which constitutes a first priority mortgage lien with respect to any Property. “Fitch”: Fitch Ratings or any successor thereto. “Fixed Rate Home Equity Loan”: With respect to the Home Equity Loans, the pool of fixed rate Home Equity Loans identified in Schedule I-A hereto, including any Qualified Replacement Mortgages delivered in replacement thereof. “Fixed Swap Payment”: With respect to any Distribution Date, an amount equal to the product of (i) 5.30%, (ii) the lesser of (a) the related Scheduled Notional Amount (as set forth on Schedule I-H hereto), and (b) (x) the aggregate Certificate Principal Balance of the Offered Certificates as of such Distribution Date prior to giving effect to any payments on such Distribution Date divided by (y) 100, (iii) a fraction, the numerator of which is 30 and the denominator of which is 360 and (iv) the related Payment Factor (as set forth on Schedule I-H hereto). “Floating Swap Payment”: With respect to any Distribution Date, a floating amount equal to the product of (i) LIBOR (as determined pursuant to the Swap Agreement for such Distribution Date), (ii) the lesser of (a) the related Scheduled Notional Amount (as set forth on Schedule I-H hereto), and (b) (x) the aggregate Certificate Principal Balance of the Offered Certificates as of such Distribution Date prior to giving effect to any payments on such Distribution Date divided by (y) 100, (iii) a fraction, the numerator of which is the actual number of days elapsed from and including the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from and including the Startup Day to but excluding the first Distribution Date), and the denominator of which is 360 and (iv) the related Payment Factor (as set forth on Schedule I-H hereto). “FNMA”: The Federal National Mortgage Association, a federally-chartered and privately-owned corporation existing under the Federal National Mortgage Association Charter Act, as amended, or any successor thereof. “FNMA Guide”: FNMA’s Servicing Guide, as the same may be amended by FNMA from time to time. “Form 10-D Disclosure Item”: With respect to any Person, any material litigation or governmental proceedings pending against such Person, or against any of the Trust Estate, the Depositor, the Trustee, the Servicer or any Subservicer that would have a materially adverse effect on the Certificateholders, if such Person has actual knowledge thereof. “Form 10-K Disclosure Item”: With respect to any Person, (a) any Form 10-D Disclosure Item and (b) any affiliations, or relationships entered into outside the ordinary course of business, between such Person and any Item 1119 Party. “Grantor Trust”: That portion of the Trust Estate, exclusive of any REMIC, that holds the rights of the Class P Certificateholders to receive Prepayment Charges. “Highest Lawful Rate”: As defined in Section 11.13 hereof. “Home Equity Loan Assets”: The meaning set forth under the heading “CONVEYANCE” herein. “Home Equity Loans”: The home equity loans listed on Schedule I-E hereto, together with any Qualified Replacement Mortgages substituted therefore in accordance with this Agreement, as from time to time are held as a part of the Trust Estate. Where applicable, the term “Home Equity Loan” includes (i) the terms “First Mortgage Loan” and “Second Mortgage Loan”, and (ii) any Home Equity Loan which is Delinquent, relates to a foreclosure or relates to a Property which is REO Property prior to such REO Property’s disposition by the Trust. Any home equity loan which, although intended by the parties hereto to have been, and which purportedly was, transferred and assigned to the Trust by the Depositor, in fact was not transferred and assigned to the Trust for any reason whatsoever, including, without limitation, the incorrectness of the statement set forth in Section 3.04(b)(x) hereof with respect to such home equity loan, shall nevertheless be considered a “Home Equity Loan” for all purposes of this Agreement. “Indirect Participant”: Any financial institution for whom any Direct Participant holds an interest in an Offered Certificate. “Initial Purchaser” Greenwich Capital Markets, Inc., Banc of America Securities LLC and Credit Suisse Securities (USA) LLC. “Insurance Policy”: Any hazard, flood, title or primary mortgage insurance policy relating to a Home Equity Loan plus any amount remitted under Section 8.11 hereof. “Interest Period”: With respect to each Distribution Date and the Offered Certificates, the period from and including the preceding Distribution Date (or the Startup Day in the case of the first Distribution Date) to and including the day preceding the related Distribution Date with interest accruing on the basis of the actual number of days elapsed in the related Interest Period and a year of 360 days. “Item 1119 Party”: The Depositor, the Seller, the Servicer, the Trustee, any Subservicer, any originator identified in the Prospectus Supplement and any other material transaction party, as identified in Exhibit V hereto, as updated pursuant to Section 12.04. “Latest Possible Maturity Date”: The date determined as of the Cut-Off Date that is the first Distribution Date following the third anniversary of the scheduled maturity of the Home Equity Loan with the latest scheduled maturity. “LIBOR”: With respect to any Interest Period for the Offered Certificates, the rate determined by the Trustee 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 Trustee will 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 Servicer, 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 Determination Date”: With respect to any Interest Period for the Offered Certificates, the second London Business Day preceding the commencement of such Interest Period. “Limited Exchange Act Reporting Obligations”: The obligations of the Servicer with respect to notice and information to be provided to the Depositor under Article XII (except Section 12.07(a)(i) and (ii)). “Liquidated Loan”: A Home Equity Loan as to which a Final Recovery Determination has been made. “Liquidation Proceeds”: With respect to any Liquidated Loan, all amounts (including the proceeds of any Insurance Policy) recovered by the Servicer in connection with such Liquidated Loan, whether through trustee’s sale, foreclosure sale or otherwise. “Loan Balance”: With respect to each Home Equity Loan and as of any date of determination, the actual outstanding principal balance thereof on the Cut-Off Date or relevant Replacement Cut-Off Date with respect to a Qualified Replacement Mortgage less any principal payments relating to such Home Equity Loan included in previous Monthly Remittance Amounts, provided, however, that the Loan Balance for any Home Equity Loan that has become a Liquidated Loan shall be zero as of the first day of the Remittance Period following the Remittance Period in which such Home Equity Loan becomes a Liquidated Loan, and at all times thereafter. “Loan Purchase Price”: With respect to any Home Equity Loan purchased from the Trust on or prior to a Monthly Remittance Date pursuant to Section 3.04, 3.06(b) or 8.10(b) hereof, an amount equal to the outstanding principal balance of such Home Equity Loan as of the date of purchase (assuming that the Monthly Remittance Amount remitted by the Servicer on such Monthly Remittance Date has already been remitted), plus all accrued and unpaid interest on such Home Equity Loan at the Coupon Rate to but not including the date of such purchase together with (without duplication) the aggregate amounts of (i) all unreimbursed Delinquency Advances and Servicing Advances theretofore made with respect to such Home Equity Loan, (ii) all Delinquency Advances which the Servicer has theretofore failed to remit with respect to such Home Equity Loan, (iii) all reimbursed Delinquency Advances and Servicing Advances to the extent that reimbursement is not made from the Mortgagor and (iv) any costs and damages incurred by the Trust in connection with any violation by the Home Equity Loan of any predatory or abusive lending law. “Loan-to-Value Ratio”: As of any particular date (i) with respect to any First Mortgage Loan, the percentage obtained by dividing the Appraised Value into the original principal balance of the Note relating to such First Mortgage Loan and (ii) with respect to any Second Mortgage Loan, the percentage obtained by dividing the Appraised Value as of the date of origination of such Second Mortgage Loan into an amount equal to the sum of (a) the remaining principal balance of the Senior Lien relating to such Second Mortgage Loan as of the date of origination of the related Second Mortgage Loan and (b) the original principal balance of the Note relating to such Second Mortgage Loan. “London Business Day”: Any day on which dealings in deposits of United States dollars are transacted in the London interbank market. “Manufactured Home”: A unit of manufactured housing, including all accessions thereto, securing the indebtedness of the Mortgagor under the related Home Equity Loan treated as real estate under applicable state law. “Master REMIC”: The segregated group of assets consisting of the REMIC II Regular Interests (as defined in Section 2.08 hereof) and constituting a REMIC created hereunder. “Maximum Rate”: With respect to any Home Equity Loan, means the maximum rate at which interest may accrue on such Home Equity Loan. “Monthly Payment”: With respect to any Home Equity Loan and any Remittance Period, the payment of principal, if any, and interest due on the Due Date in such Remittance Period pursuant to the related Note. “Monthly Remittance Amount”: As of any Monthly Remittance Date, (A) the sum, without duplication, of (i) all interest received (including any related Delinquency Advances) during the related Remittance Period with respect to the Home Equity Loans (net of the Servicing Fee), (ii) all Compensating Interest paid by the Servicer on such Monthly Remittance Date, (iii) the portion of the Loan Purchase Price amounts, and Substitution Amounts relating to interest on the Home Equity Loans paid by Nationstar Mortgage or the Servicer on or prior to such Monthly Remittance Date, (iv) the interest portion of all Net Liquidation Proceeds actually collected by the Servicer with respect to the Home Equity Loans during the related Remittance Period, (v) the principal actually collected by the Servicer with respect to Home Equity Loans during the related Remittance Period, (vi) the outstanding principal balance of each Home Equity Loan that was purchased from the Trustee on or prior to such Monthly Remittance Date, to the extent such outstanding principal balance was actually deposited in the Principal and Interest Account on or prior to such Monthly Remittance Date, (vii) any Substitution Amounts relating to principal delivered by Nationstar Mortgage in connection with a substitution of a Home Equity Loan, to the extent such Substitution Amounts were actually deposited in the Principal and Interest Account on or prior to such Monthly Remittance Date, (viii) the principal portion of all Net Liquidation Proceeds and Recoveries actually collected by the Servicer with respect to Home Equity Loans during the related Remittance Period, (ix) the amount of investment losses required to be deposited pursuant to Section 8.08(b), (x) any amounts required to be deposited by the Servicer pursuant to Section 8.02(b) and (xi) the Prepayment Charges actually collected by the Servicer with respect to Home Equity Loans during the related Remittance Period; minus (B) any amounts netted from the foregoing or withdrawn from the Principal and Interest Account by the Servicer as permitted by this Agreement. “Monthly Remittance Date”: The 18 th day of each month, or if the 18 th day is not a Business Day, the preceding Business Day. “Moody’s”: Moody’s Investors Service, Inc. or any successor thereto. “Mortgage”: The mortgage, deed of trust or other instrument creating a first or second lien on an estate in fee simple interest in real property securing a Note. “Mortgagor”: Each obligor on a Note. “Nationstar Mortgage”: Nationstar Mortgage LLC, a Delaware limited liability company. “Net Coupon Rate”: With respect to any Home Equity Loan, means a rate per annum equal to the Coupon Rate of such Home Equity Loan minus the sum of (i) the rate at which the Servicing Fee accrues and (ii) the rate at which the Trustee Fee accrues (each expressed as a per annum percentage of the aggregate Loan Balance of the Home Equity Loans). “Net Liquidation Proceeds”: As to any Liquidated Loan, Liquidation Proceeds net of expenses incurred by the Servicer (including unreimbursed Servicing Advances) in connection with the liquidation of such Home Equity Loan, unreimbursed Delinquency Advances relating to such Home Equity Loan and Arrearages relating to such Home Equity Loan, if any. In no event shall Net Liquidation Proceeds with respect to any Liquidated Loan be less than zero. “Net Subordination Deficiency” With respect to any Distribution Date, the excess, if any, of (1) the Subordination Deficiency for that Distribution Date over (2) the Excess Interest for that Distribution Date. “Net Swap Payment”: In the case of payments made by the Supplemental Interest Trust, the excess, if any, of (x) the Fixed Swap Payment over (y) the Floating Swap Payment. In the case of payments made by the Swap Provider, the excess, if any, of (x) the Floating Swap Payment over (y) the Fixed Swap Payment. In each case, the Net Swap Payment shall not be less than zero. “Net WAC Cap”: With respect to any Distribution Date, and for any Class of Offered Certificates, a rate per annum equal to the excess, if any, of (a) the weighted average of the Net Coupon Rates on the Home Equity Loans as of the beginning of the related Remittance Period over (b) the Swap Expense Fee Rate for that Distribution Date. “Net WAC Cap Carryover”: With respect to any Distribution Date, and for any Class of Offered Certificates, the sum of (A) the excess of (1) the amount of interest that such Class of Offered Certificates would otherwise be entitled to receive on the Distribution Date had the Certificate Rate for such Class been calculated at the Certificate Rate for such Class and Distribution Date without regard to the Net WAC Cap over (2) the amount of interest payable on such Class at the respective Certificate Rate for such Class for the Distribution Date and (B) the excess described in clause (A) for such Class for all previous Distribution Dates (including any interest accrued on that amount at the related Certificate Rate without regard to the Net WAC Cap) not previously paid to such Class. “Net WAC Cap Carryover Reserve Fund”: The Net WAC Cap Carryover Reserve Fund established pursuant to Section 7.02(a) and maintained as described in Section 7.04. “Nonrecoverable Advance”: With respect to any Home Equity Loan for which a Final Recovery Determination has been made, means any Delinquency Advance or Servicing Advance previously made and not reimbursed from proceeds on the related Home Equity Loan which the Servicer has determined, in good faith business judgment, as evidenced by an Officer’s Certificate delivered to the Trustee no later than the Business Day following such determination, would not be ultimately recovered. “Note”: The note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a Home Equity Loan. “OC Floor”: An amount equal to 0.50% of the Pool Balance as of the Cut-Off Date. “Offered Certificate”: Any one of the Class AV-1, Class AV-2, Class AV-3, Class AV-4, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates. “Officer’s Certificate”: A certificate signed by any Authorized Officer of any Person delivering such certificate and delivered to the Trustee. “Operative Documents”: Collectively, this Agreement, the Certificates and the Custodial Agreement. “Opinion of Counsel”: A written opinion of counsel acceptable, in form and substance, to the Trustee and delivered to the Trustee and the Rating Agencies. “Original Aggregate Loan Balance”: The aggregate Loan Balance of all the Home Equity Loans as of the Cut-Off Date, which is $1,000,480,177.64. “Outstanding”: With respect to all Certificates of a Class, as of any date of determination, all such Certificates theretofore executed and delivered hereunder except: (i) Certificates theretofore canceled by the Registrar or delivered to the Registrar for cancellation; (ii) Certificates or portions thereof for which full and final payment of money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent in trust for the Owners of such Certificates; (iii) Certificates in exchange for or in lieu of which other Certificates have been executed and delivered pursuant to this Agreement, unless proof satisfactory to the Trustee is presented that any such Certificates are held by a bona fide purchaser; (iv) Certificates alleged to have been destroyed, lost or stolen for which replacement Certificates have been issued as provided for in Section 5.05 hereof; and (v) Certificates as to which the Trustee has made the final distribution thereon, whether or not such Certificate is ever returned to the Trustee. “Overcollateralization Amount”: With respect to any Distribution Date, the excess, if any, of (1) the aggregate Loan Balance of the Home Equity Loans as of the close of business on the last day of the preceding Remittance Period over (2) the aggregate outstanding Certificate Principal Balance of the Offered Certificates and the Class P Certificates as of that Distribution Date (after taking into account the payment of the Principal Distribution Amount on that Distribution Date). “Owner” or “Certificateholder”: The Person in whose name a Certificate is registered in the Register. “Paying Agent”: Initially, the Trustee, and thereafter, the Trustee or any other Person that meets the eligibility standards for the Paying Agent specified in Section 11.15 hereof and is authorized by the Trustee and the Depositor to make payments on the Certificates on behalf of the Trustee. “Percentage Interest”: With respect to any Offered Certificates of any Class, a fraction, expressed as a decimal, the numerator of which is the principal balance represented by such Offered Certificate as of the Startup Day and the denominator of which is the Certificate Principal Balance represented by all the Offered Certificates of such Class as of the Startup Day. With respect to the Class X-IO, Class P or Class R Certificates, the portion of the Class evidenced thereby, expressed as a percentage, as stated on the face of such Certificate, all of which shall total 100% with respect to the related Class. “Performance Certification”: As defined in Section 12.05. “Person”: Any individual, corporation, limited partnership, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. “Pool Balance”: With respect to any date, the aggregate of the Loan Balance of all Home Equity Loans as of such date. “Prepayment”: Any payment of principal of a Home Equity Loan which is received by the Servicer which is not a Scheduled Principal Payment and which is not accompanied by an amount of interest representing the full amount of scheduled interest due on any Due Date in any month or months subsequent to the month of prepayment, the portion of Substitution Amounts representing principal, the portion of the Loan Purchase Price of any Home Equity Loan purchased from the Trust pursuant to Section 3.04, 3.06(b) or 8.10(b) hereof representing principal and the proceeds of any Insurance Policy which are to be applied as a payment of principal on the related Home Equity Loan shall be deemed to be Prepayments for all purposes of this Agreement. “Prepayment Charge”: With respect to any Prepayment, any prepayment premium, penalty or charge payable by a Mortgagor in connection with any Prepayment on a Home Equity Loan pursuant to the terms of the related Note, as set forth on the Prepayment Charge Schedule. “Prepayment Charge Schedule ”: As of any date, the list of Home Equity Loans providing for a Prepayment Charge included in the Trust Fund on such date, attached hereto as Schedule I-C (including the prepayment charge summary attached thereto). The Prepayment Charge Schedule shall set forth the following information with respect to each Prepayment Charge: (i) the Home Equity Loan identifying number; (ii) a code indicating the type of Prepayment Charge; (iii) the date on which the first Monthly Payment was due on the related Home Equity Loan; (iv) the term of the related Prepayment Charge; (v) the original Loan Balance of the related Home Equity Loan; (vi) the Loan Balance of the related Home Equity Loan as of the Cut-Off Date; and (viii) the Loan Balance of the related Home Equity Loan as of September 1, 2006. “Preservation Expenses”: Expenditures made by the Servicer in connection with a foreclosed Home Equity Loan prior to the liquidation thereof, including, without limitation, expenditures for real estate property taxes, hazard insurance premiums, property restoration or preservation. “Principal and Interest Account”: The principal and interest account created by the Servicer pursuant to Section 8.08(a) hereof. The Principal and Interest Account shall be an Eligible Account. “Principal Distribution Amount”: As to any Distribution Date, the lesser of (a) the aggregate Certificate Principal Balance of the Offered Certificates immediately preceding such Distribution Date and (b) the sum of (i) the Basic Principal Amount for such Distribution Date minus the Excess Overcollateralization Amount, if any, for such Distribution Date and (ii) the Subordination Increase Amount, if any, for such Distribution Date. “Prohibited Transaction”: The meaning set forth from time to time in the definition thereof at Section 860F(a)(2) of the Code (or any successor statute thereto) and applicable to the Trust. “Property”: The underlying property securing a Home Equity Loan. “Property Protection Arrearage”: With respect to any Home Equity Loan, all “out-of-pocket” costs and expenses incurred in the performance of Nationstar Mortgage, as servicer, prior to the Cut-off Date with respect to its servicing obligations, including, but not limited to, (i) the cost of any enforcement or judicial proceedings, (ii) advances made for the payment of taxes, amounts due with respect to senior liens, and insurance premiums, and (iii) expenses incurred in connection with protecting a junior lien and or preserving the security of the related Home Equity Loan, to the extent that any superior lienholder has accelerated or intends to accelerate the obligations under a senior lien, or has declared or intends to declare a default under the mortgage or the promissory note secured thereby, or has filed or intends to file an election to have the mortgaged property sold or foreclosed, in each case which remain unreimbursed as of the Cut-off Date. “Prospectus”: The Depositor’s Prospectus dated September 8, 2006 constituting part of the Registration Statement. “Prospectus Supplement”: The Nationstar Home Equity Loan Trust 2006-B Prospectus Supplement dated September 13, 2006 to the Prospectus. “QSPE”: A qualifying special purpose entity that meets the requirements of FAS 140. “Qualified Liquidation”: The meaning set forth from time to time in the definition thereof at Section 860F(a)(4) of the Code (or any successor statute thereto) and applicable to the Trust. “Qualified Mortgage”: The meaning set forth from time to time in the definition thereof at Section 860G(a)(3) of the Code (or any successor statute thereto) and applicable to the Trust. “Qualified Replacement Mortgage”: A Home Equity Loan substituted for another pursuant to Section 3.04, 3.05(b) or 3.06(b) hereof, which (i) has a Coupon Rate at least equal to the Coupon Rate of the Home Equity Loan being replaced, (ii) is secured by Property that is of the same or better property type as, or is a single family dwelling and the same or better occupancy status as, the Property securing the Home Equity Loan being replaced or is a primary residence, (iii) shall mature no later than the latest Final Scheduled Distribution Date, (iv) has a Loan-to-Value Ratio as of the Replacement Cut-Off Date no higher than the Loan-to-Value Ratio of the replaced Home Equity Loan at such time, (v) shall be of the same or higher credit quality classification (determined in accordance with the Seller’s credit underwriting guidelines set forth in the Seller’s underwriting manual) as the Home Equity Loan which such Qualified Replacement Mortgage replaces, (vi) shall be a First Mortgage Loan if the Home Equity Loan which such Qualified Replacement Mortgage replaces was a First Mortgage Loan and shall be a First Mortgage Loan or Second Mortgage Loan if the Home Equity Loan which such Qualified Replacement Mortgage replaces was a Second Mortgage Loan, (vii) has an outstanding principal balance as of the related Replacement Cut-Off Date equal to or less than the outstanding principal balance of the replaced Home Equity Loan as of such Replacement Cut-Off Date, (viii) shall not provide for a “balloon” payment if the related Home Equity Loan did not provide for a “balloon” payment (and if such related Home Equity Loan provided for a “balloon” payment, such Qualified Replacement Mortgage shall have an original maturity of not less than the original maturity of such related Home Equity Loan), (ix) shall be a fixed rate Home Equity Loan if the Home Equity Loan being replaced is a Fixed Rate Home Equity Loan or an adjustable rate Home Equity Loan if the Home Equity Loan being replaced is an Adjustable Rate Home Equity Loan, (x) satisfies the criteria set forth from time to time in the definition thereof at Section 860G(a)(4) of the Code (or any successor statute thereto) and applicable to the Trust, (xi) satisfies the representations and warranties set forth in Section 3.04(b) hereof, (xii) shall not be 30 days or more Delinquent and (xiii) if such Home Equity Loan being replaced is an Adjustable Rate Home Equity Loan, shall adjust based on the same index as, have no lower margin than, have the same interval between adjustment dates as and have a maximum Coupon Rate no lower than, and a minimum Coupon Rate no lower than, the Home Equity Loan being replaced. “Rating Agencies”: Collectively, Moody’s and Standard & Poor’s. “Realized Loss”: As to any Liquidated Loan (or, in the case of a Cram Down Loss, a Home Equity Loan that is not a Liquidated Loan), the amount (not less than zero), if any, by which (A) the sum of (x) the Loan Balance thereof as of the date of liquidation, (y) the amount of accrued but unpaid interest thereon and (z) the amount of any Cram Down Loss with respect thereto is in excess of (B) the Net Liquidation Proceeds, if any, realized thereon. “Record Date”: With respect to (i) any Distribution Date and the Class R and Class P Certificates, the last Business Day of the calendar month immediately preceding the calendar month in which such Distribution Date occurs and (ii) any Distribution Date and each Class of Offered Certificates and the Class X-IO Certificates, the Business Day immediately preceding such Distribution Date, or if definitive Offered Certificates have been issued, the last Business Day of the calendar month immediately preceding the calendar month in which such Distribution Date occurs. “Recoveries”: With respect to any Liquidated Loan, an amount received in respect of principal on that Liquidated Loan, which amount has previously been allocated as an Applied Realized Loss Amount to a Class or Classes of Subordinate Certificates, net of reimbursable expenses due and owing to the Servicer. “Reference Banks”: Bankers Trust Company, Barclays Bank PLC, The Bank of Tokyo and National Westminster Bank PLC, provided that if any of the foregoing banks are not suitable to serve as a Reference Bank, then any leading banks selected by Nationstar Mortgage which are engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) which are not Affiliates of the Seller, (iii) whose quotations appear on Telerate Page 3750 on the relevant LIBOR Determination Date and (iv) which have been designated as such by the Seller. “Register”: The register maintained by the Registrar in accordance with Section 5.04 hereof, in which the names of the Owners are set forth. “Registrar”: The Trustee, acting in its capacity as Registrar appointed pursuant to Section 5.04 hereof, or any duly appointed and eligible successor thereto. “Registration Statement”: The Registration Statement filed by the Depositor with the Commission (Registration Number 333-130642), including all amendments thereto and including the Prospectus and Prospectus Supplement relating to the Offered Certificates. “Regulation AB”: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time. “REMIC”: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code. “REMIC I”: The segregated group of assets consisting of all of the assets of the Trust Estate other than the Net WAC Cap Carryover Reserve Fund and the REMIC interests issued by REMIC I, REMIC II and the Master REMIC as defined in Section 2.08 hereof, and constituting a REMIC created hereunder. “REMIC II”: The segregated group of assets consisting of all the interests issued by REMIC I as defined in Section 2.08 hereof, and constituting a REMIC created hereunder. “REMIC Opinion”: As defined in Section 3.04 hereof. “REMIC Provisions”: Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Section 860A through 860G of subchapter M of chapter 1 of the Code, and related provisions, and regulations and revenue rulings promulgated thereunder, as the foregoing may be in effect from time to time. “Remittance Period”: With respect to each Monthly Remittance Date, the calendar month immediately preceding such Monthly Remittance Date. “REO Property”: A Property acquired by the Servicer on behalf of the Trust through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Home Equity Loan. “Replacement Cut-Off Date”: With respect to any Qualified Replacement Mortgage, the opening of business of the first day of the calendar month in which such Qualified Replacement Mortgage is conveyed to the Trust. “Reportable Event”: Any event required to be reported on Form 8-K and, in any event, the following: (a) entry into a definitive agreement related to the Trust Estate, the Certificates or the Home Equity Loans, or an amendment to a Transaction Document, only if the Depositor is not a party to such agreement (e.g., a servicing agreement with a servicer contemplated by Item 1108(a)(3) of Regulation AB); (b) termination of a Transaction Document (other than by expiration of the agreement on its stated termination date or as a result of all parties completing their obligations under such agreement), only if the Depositor is not a party to such agreement (e.g., a servicing agreement with a servicer contemplated by Item 1108(a)(3) of Regulation AB); (c) with respect to the Servicer only, if the Servicer becomes aware of any bankruptcy or receivership with respect to the Sponsor, the Depositor, the Servicer, any Subservicer, the Trustee, any enhancement or support provider contemplated by Items 1114(b) or 1115 of Regulation AB, or any other material party contemplated by Item 1101(d)(1) of Regulation AB; (d) with respect to the Trustee, the Servicer and the Depositor only, the occurrence of an early amortization, performance trigger other than those that are of the type disclosed on Form 10-D, including an Event of Default of which a responsible officer has actual knowledge under this Agreement;
(e) the resignation, removal, replacement, substitution of the Servicer, any Subservicer or the Trustee; (f) with respect to the Servicer only, if the Servicer becomes aware that (i) any material enhancement or support specified in Item 1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB that was previously applicable regarding one or more Classes of the Certificates has terminated other than by expiration of the contract on its stated termination date or as a result of all parties completing their obligations under such agreement; (ii) any material enhancement specified in Item 1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB has been added with respect to one or more classes of the Certificates; or (iii) any existing material enhancement or support specified in Item 1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB with respect to one or more Classes of the Certificates has been materially amended or modified; and (g) with respect to the Trustee, the Servicer and the Depositor only, a required distribution to Certificateholders is not made as of the required Distribution Date under this Agreement. “Reporting Subcontractor”: With respect to the Servicer or the Trustee, any Subcontractor determined by such Person pursuant to Section 12.08(b) to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB. References to a Reporting Subcontractor shall refer only to the Subcontractor of such Person and shall not refer to Subcontractors generally. “Representation Letter”: Letters to, or agreements with, the Depository to effectuate a book-entry system with respect to the Offered Certificates registered in the Register under the nominee name of the Depository. “Required Overcollateralization Amount”: As to any Distribution Date (1) prior to the Stepdown Date, the product of (x) 2.10%, and (y) the Pool Balance as of the Cut-Off Date; and (2) on and after the Stepdown Date, the greater of (i) the lesser of (x) the product of 2.10% and the Pool Balance as of the Cut-Off Date, and (y) the product of 4.20% and the Pool Balance as of the end of the related Remittance Period and (ii) the OC Floor; provided, however, that on each Distribution Date during the continuance of a Trigger Event the Required Overcollateralization Amount will equal the Required Overcollateralization Amount in effect as of the Distribution Date immediately preceding the date on which such Trigger Event first occurred. “Sarbanes-Oxley Certification”: As defined in Section 12.05. “Schedule of Home Equity Loans”: Schedule I-A hereto, Schedule I-B hereto or Schedule I-E hereto, as the context may require. “Scheduled Notional Amount”: The amount set forth with respect to each Distribution Date on Schedule I-H hereto. “Scheduled Principal Payment”: As of any date of calculation, with respect to a Home Equity Loan, the then stated scheduled monthly installment of principal payable thereunder which, if timely paid, would result in the full amortization of principal over the term thereof (or, in the case of a “balloon” Note, the term to the nominal maturity date for amortization purposes, without regard to the actual maturity date), without taking into account any Prepayment made on such Home Equity Loan during the then-current Remittance Period. “Second Mortgage Loan”: A Home Equity Loan which constitutes a second priority mortgage lien with respect to the related Property. “Securities Act”: The Securities Act of 1933, as amended. “Seller”: Nationstar Mortgage LLC, a Delaware limited liability company. “Senior Certificate”: Any one of the Class AV-1, Class AV-2, Class AV-3 or Class AV-4 Certificates. “Senior Enhancement Percentage”: As to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the sum of (i) the aggregate Certificate Principal Balance of the Subordinate Certificates and (ii) the Overcollateralization Amount (in each case, after taking into account the distribution of the Principal Distribution Amount on that Distribution Date) and the denominator of which is the Pool Balance as of the last day of the related Remittance Period. “Senior Lien”: With respect to any Second Mortgage Loan, the home equity loan relating to the corresponding Property having a first priority lien. “Senior Principal Distribution Amount”: With respect to (a) any Distribution Date prior to the Stepdown Date or during the continuance of a Trigger Event, the lesser of (i) 100% of the Principal Distribution Amount and (ii) the aggregate Certificate Principal Balance of the Senior Certificates immediately prior to that Distribution Date, and (b) any other Distribution Date, the lesser of (x) 100% of the Principal Distribution Amount and (y) the excess, if any, of (i) the aggregate Certificate Principal Balance of the Senior Certificates immediately prior to that Distribution Date over (ii) the lesser of (x) the product of 56.60% and the Pool Balance as of the last day of the related Remittance Period and (y) the Pool Balance as of the last day of the related Remittance Period minus the OC Floor. “Servicer”: Nationstar Mortgage LLC, a Delaware limited liability company, and its permitted successors and assigns. “Servicer Termination Event”: As defined in Section 8.20(a) hereof. “Servicing Advance”: As defined in Section 8.09(b) and Section 8.13(a) hereof. “Servicing Fee”: With respect to any Remittance Period, an amount retained by the Servicer as compensation for servicing and administration duties relating to the Home Equity Loans pursuant to Section 8.15 hereof and equal to one month’s interest at 0.50% per annum of the then aggregate outstanding Loan Balance of such Home Equity Loans as of the first day of each Remittance Period payable on a monthly basis; provided, however, that if a successor Servicer is appointed pursuant to Section 8.20 hereof, the Servicing Fee shall be the amount as agreed upon by the Trustee and the successor Servicer, and the per annum rate at which the Servicing Fee is calculated shall not exceed 0.50% per annum. “60-Day Delinquent Loan”: With respect to any Remittance Period, and without duplication, (i) all REO Properties as of the last day of such Remittance Period, (ii) each Home Equity Loan with respect to which any portion of a Monthly Payment is, as of the last day of such Remittance Period 60 or more days Delinquent (without giving effect to any grace period), (iii) each Home Equity Loan in foreclosure as of the last day of such Remittance Period and (iv) each Home Equity Loan described in clause (ii) that is also in bankruptcy. “60+ Delinquency Percentage (Rolling Three Month)”: With respect to any Distribution Date, the average of the percentage equivalents of the fractions determined for each of the three immediately preceding Remittance Periods (or such fewer number of Remittance Periods since the Cut-Off Date, in the case of the first two Distribution Dates) the numerator of each of which is equal to the sum of (without duplication) the aggregate Loan Balance of 60-Day Delinquent Loans for such Remittance Period, and the denominator of which is the Loan Balance of all of the Home Equity Loans as of the end of such Remittance Period. “Standard & Poor’s”: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or any successor thereto. “Startup Day”: September 14, 2006. “Stepdown Date”: The earlier to occur of (1) the Distribution Date after which the aggregate Certificate Principal Balance of the Senior Certificates is reduced to zero, and (2) the later to occur of (A) the Distribution Date in October 2009, and (B) the first Distribution Date on which the Senior Enhancement Percentage (after giving effect to the distribution of the Principal Distribution Amount on such Distribution Date) is at least equal to 43.40%. “Subcontractor”: Any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the mortgage-backed securities market) of Home Equity Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Home Equity Loans under the direction or authority of the Servicer or a Subservicer or the Trustee, as the case may be. “Subordinate Certificates”: Any of the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 or Class M-11 Certificates. “Subordination Deficiency”: As to any Distribution Date, the excess, if any, of (1) the Required Overcollateralization Amount for such Distribution Date over (2) the Overcollateralization Amount for such Distribution Date after giving effect to the distribution of the Basic Principal Amount on such Distribution Date. “Subordination Increase Amount”: As to any Distribution Date, the lesser of (1) the Subordination Deficiency and (2) the Excess Interest. “Sub-Servicer”: Any Person with whom the Servicer has entered into a Sub-Servicing Agreement and who satisfies any requirements set forth in Section 8.03 hereof in respect of the qualification of a Sub-Servicer. “Sub-Servicing Agreement”: The written contract between the Servicer and any Sub-Servicer relating to servicing and/or administration of certain Home Equity Loans as permitted by Section 8.03. “Substitution Amount”: With respect to the substitution of any Qualified Replacement Mortgage for any Home Equity Loan, as of the related Replacement Cut-Off Date, an amount equal to the excess, if any, of the outstanding principal balance of such Home Equity Loan over the outstanding principal balance of the Qualified Replacement Mortgage, together with (without duplication) the aggregate amount of (1) all unreimbursed Delinquency Advances and unreimbursed Servicing Advances made, (2) all accrued and unpaid interest, and (3) any costs and damages incurred by the Trust in connection with any violation of any predatory or abusive lending law, with respect to such Home Equity Loan. “Supplemental Interest Trust”: The trust established pursuant to Section 2.10. “Supplemental Interest Trustee”: JPMorgan Chase Bank, National Association, a national banking association, not in its individual capacity but solely as Supplemental Interest Trustee under this Agreement, and any successor hereunder. “Swap Account”: The segregated swap account established in accordance with Section 7.02(a) hereof and maintained in accordance with Section 7.12 hereof at the Corporate Trust Office of the Supplemental Interest Trustee entitled “JPMorgan Chase Bank, National Association, as Supplemental Interest Trustee on behalf of the Owners of the Nationstar Home Equity Loan Trust 2006-B, Nationstar Home Equity Loan Asset-Backed Certificates.” The Swap Account shall be an Eligible Account. “Swap Agreement”: The Swap Agreement entered into with the Swap Provider and attached hereto as Exhibit R. “Swap Default”: An Event of Default under the Swap Agreement. “Swap Early Termination”: The occurrence of an Early Termination Date (as defined in the Swap Agreement) under the Swap Agreement. “Swap LIBOR”: A per annum rate equal to the floating rate payable by the Swap Provider under the Swap Agreement. “Swap Provider”: The Royal Bank of Scotland plc and any successor thereto. “Swap Provider Trigger Event”: A Swap Termination Payment that is triggered upon: (i) an Event of Default under the Swap Agreement with respect to which the Swap Provider is the Defaulting Party (as defined in the Swap Agreement), (ii) a Termination Event under the Swap Agreement with respect to which the Swap Provider is the sole Affected Party (as defined in the Swap Agreement) or (iii) an “Additional Termination Event” (as defined in the Swap Agreement) under the Swap Agreement with respect to which the Swap Provider is the sole Affected Party. “Swap Termination Payment”: The amount, if any, owed by the Supplemental Interest Trust or the Swap Provider upon a Swap Early Termination. “Swap Expense Fee Rate”: With respect to each Distribution Date, a per annum rate, equal to the product of (x) the sum of (i) any Net Swap Payment owed to the Swap Provider for that Distribution Date and (ii) any Swap Termination Payment for that Distribution Date (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) payable by the Supplemental Interest Trust, and (y) 12 divided by the aggregate Loan Balance of the Home Equity Loans as of the first day of the related Remittance Period. “Tangible Net Worth”: Shall mean the difference between: (A) the tangible assets of the Seller or Servicer, as applicable, and its Affiliates calculated in accordance with generally accepted accounting principles, as reduced by adequate reserves in each case where a reserve is appropriate; and (B) all indebtedness, including subordinated debt, of the Seller or Servicer, as applicable, and its Affiliates; provided, however, that (i) intangible assets such as patents, trademarks, trade names, copyrights, licenses, good will, organization costs, advances or loans to, or receivables from, directors, officers, employees or affiliates, prepaid assets, amounts relating to covenants not to compete, pension assets, deferred charges or treasury stock of any securities unless the same are readily marketable in the United States of America or are entitled to be used as a credit against federal income tax liabilities, shall not be included in the calculation of (A) above, (ii) securities included as tangible assets shall be valued at their current market price or cost, whichever is lower and (iii) any write-up in book value of any assets shall not be taken into account. “Tax Matters Person”: The Person designated pursuant to Section 11.18 hereof to act as the Tax Matters Person under the Code (or where the context requires, the Trustee acting as agent for the Tax Matters Person). “Telerate Page 3750”: The display designated as page “3750” on the Bridge Telerate Service (or such other page as may replace page 3750 on that report for the purpose of displaying London interbank offered rates of major banks). “Termination Event”: Under the Swap Agreement, the following standard events under the ISDA Master Agreement: · “Illegality” (which generally relates to changes in law causing it to become unlawful for either party to perform its obligations under the Swap Agreement), · “Tax Event” (which generally relates to either party to the Swap Agreement receiving a payment under the Swap Agreement from which an amount has been deducted or withheld for or on account of taxes) and · “Tax Event Upon Merger” (solely with respect to the Swap Provider as merging party) (which generally relates to the Swap Provider’s receiving a payment under the Swap Agreement from which an amount has been deducted or withheld for or on account of taxes resulting from a merger), as described in Sections 5(b)(i), 5(b)(ii) and 5(b)(iii) of the ISDA Master Agreement. In addition, there are “Additional Termination Events” (as defined in the Swap Agreement) including if this Agreement or other transaction documents are amended or modified without the prior written consent of the Swap Provider where written consent is required or if, pursuant to the terms of Section 9.02 of this Agreement, the Servicer exercises its option to purchase the Home Equity Loans. With respect to the Swap Provider, an Additional Termination Event will occur if the Swap Provider fails to comply with the Downgrade Provisions or if the Swap Provider fails to comply with certain obligations with respect to Regulation AB, as described in the Swap Agreement. “Termination Price”: Means, with respect to Sections 9.02 and 9.03 hereof, and on any date of determination thereof, an amount equal to the greater of (A) the sum of (x) the aggregate outstanding Loan Balance of the Home Equity Loans (other than those described in clause (y) below), including accrued interest thereon, as of such date and (y) in the case of any REO Property and Home Equity Loans with respect to which foreclosure proceedings have been initiated or are otherwise 120 days or more Delinquent as of such date, the fair market value of such REO Property and Home Equity Loans (disregarding accrued interest thereon) and (B) the sum of (w) the aggregate outstanding Certificate Principal Balance of the Offered Certificates (other than any Class Principal Carryover Shortfalls), (x) all accrued and unpaid interest on the Offered Certificates (other than any Net WAC Cap Carryover) , (y) the sum of the aggregate amount of any unreimbursed Delinquency Advances, unreimbursed Servicing Advances, unreimbursed Delinquency Advances which the Servicer has theretofore failed to remit and (z) any Net Swap Payments or Swap Termination Payment payable to the Swap Provider then remaining unpaid or which are due to the exercise of such option. “Transaction Documents”: This Agreement, the Swap Agreement and any other document or agreement entered into in connection with the Trust Estate, the Certificates or the Home Equity Loans. “Transition Expenses”: Expenses incurred by the Trustee in connection with the transfer of servicing upon the termination of the Servicer for a Servicer Termination Event; provided that the amount shall not exceed $50,000 in the aggregate in any one calendar year (and no more than $100,000 in the aggregate during the term of the Trust). “Trigger Event”: The existence of a Delinquency Event or Cumulative Loss Trigger Event. “Trust”: Nationstar Home Equity Loan Trust 2006-B, the trust created under this Agreement. “Trust Estate”: (a) The Home Equity Loan Assets, (b) such amounts as may be held by the Trustee in the Certificate Account together with investment earnings on such amounts, (c) such amounts as may be held by the Trustee in the Net WAC Cap Carryover Reserve Fund together with investment earnings on such amounts, (d) any amounts received by the Supplemental Interest Trustee on the Swap Agreement and such amounts as may be held by the Supplemental Interest Trustee in the Swap Account, excluding any investment earnings on such amounts, (e) such amounts as may be held in the name of the Trustee in the Principal and Interest Account, if any, inclusive of investment earnings thereon, whether in the form of cash, instruments, securities or other properties (including any Eligible Investments held by the Servicer) and (f) the Prepayment Charges. “Trustee”: JPMorgan Chase Bank, National Association, a national banking association, not in its individual capacity but solely as Trustee under this Agreement, and any successor hereunder. “Trustee Fee”: The fee payable monthly to the Trustee on each Distribution Date in an amount equal to $1,000.00. “Trustee Reimbursable Expenses”: As of any Distribution Date, the sum of (a) any Trustee Fee and Transition Expenses not paid pursuant to clause 1. of Section 7.03(b) on such Distribution Date and (b) any amounts owed to the Trustee pursuant to Sections 2.05, 6.12, 7.06, 8.20(o), 10.07, 10.13 and 11.16(a)(v) hereof, and, if the Trustee is acting as Custodian, any related custodial fees (including all attorney fees and expenses). “Underwriters”: Greenwich Capital Markets, Inc., Banc of America Securities LLC and Credit Suisse Securities (USA) LLC. “Underwriter’s Exemption”: Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any substantially similar administrative exemption granted by the U.S. Department of Labor. “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, (a) 1% of all Voting Rights shall be allocated to the Class X-IO Certificates (such Voting Rights to be allocated among the Owners of Certificates of such Class in accordance with their respective Percentage Interests), (b) 1% of all Voting Rights shall be allocated to the Class P Certificates (such Voting Rights to be allocated among the Owners of Certificates of such Class in accordance with their respective Percentage Interests), (c)1% of all Voting Rights shall be allocated to the Class R Certificates in the aggregate, or if separate R-1 and R-3 Interests are issued, 1/2 to each such Class of Interests (such Voting Rights to be allocated among the Owners of Certificates of each such Class in accordance with their respective Percentage Interests), and (d) the remaining Voting Rights shall be allocated among Owners of the Classes of Offered Certificates in proportion to the Certificate Principal Balances of their respective Offered Certificates on such date. “WAC Excess”: The aggregate Net WAC Cap Carryover allocable to each of the Offered Certificates. Section 1.02. Use of Words and Phrases. “Herein,” “hereby,” “hereunder,” “hereof,” “hereinbefore,” “hereinafter” and other equivalent words refer to this Agreement as a whole and not solely to the particular section of this Agreement in which any such word is used. The definitions set forth in Section 1.01 hereof include both the singular and the plural. Whenever used in this Agreement, any pronoun shall be deemed to include both singular and plural and to cover all genders. Section 1.03. Captions, Table of Contents. The captions or headings in this Agreement and the Table of Contents are for convenience only and in no way define, limit or describe the scope and intent of any provisions of this Agreement. Section 1.04. Opinions. Each opinion with respect to the validity, binding nature and enforceability of documents or Certificates may be qualified to the extent that the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (whether considered in a proceeding or action in equity or at law) and may state that no opinion is expressed on the availability of the remedy of specific enforcement, injunctive relief or any other equitable remedy. Any opinion required to be furnished by any Person hereunder must be delivered by counsel upon whose opinion the addressee of such opinion may reasonably rely, and such opinion may state that it is given in reasonable reliance upon an opinion of another, a copy of which must be attached, concerning the laws of a foreign jurisdiction. Any opinion delivered hereunder shall be addressed to the Rating Agencies and the Trustee. END OF ARTICLE I
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST Section 2.01. Establishment of the Trust. The parties hereto do hereby create and establish, pursuant to the laws of the State of New York and this Agreement, the Trust, which, for convenience, shall be known as “Nationstar Home Equity Loan Trust 2006-B”. Section 2.02. Office. The office of the Trust shall be in care of the Trustee, addressed to JPMorgan Chase Bank, National Association, at its Corporate Trust Office. Section 2.03. Purposes and Powers. The purpose of the Trust is to engage in the following activities and only such activities: (i) the issuance of the Certificates and the acquiring, owning and holding of Home Equity Loans and the Trust Estate (including the Swap Agreement) in connection therewith; (ii) activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith, including the investment of moneys in accordance with this Agreement; and (iii) such other activities as may be required in connection with conservation of the Trust Estate and distributions to the Owners in accordance with the provisions of this Agreement; provided, however, that nothing contained herein shall permit the Trustee to take any action which would adversely affect the status of any REMIC created hereunder. Section 2.04. Appointment of the Trustee; Declaration of Trust. The Depositor hereby appoints the Trustee as trustee of the Trust effective as of the Startup Day, to have all the rights, powers and duties set forth herein. The Trustee hereby acknowledges and accepts such appointment, represents and warrants its eligibility as of the Startup Day to serve as Trustee pursuant to Section 10.08 hereof and declares that it will hold the Trust Estate in trust upon and subject to the conditions set forth herein for the benefit of the Owners. Section 2.05. Expenses of the Trust. All expenses of the Trust, including (i) the fees and reimbursable expenses of the Trustee in connection with the performance of its duties hereunder and (ii) to the extent not set forth herein, any other expenses of the Trustee that have been reviewed and approved by the Seller, which review shall not be required in connection with the enforcement of a remedy by the Trustee resulting from a default under this Agreement, shall be paid pursuant to Section 7.03(b). Section 2.06. Ownership of the Trust. On the Startup Day the ownership interests in the Trust shall be transferred as set forth in Section 4.02 hereof, such transfer to be evidenced by sale of the Certificates as described therein. Thereafter, transfer of any ownership interest shall be governed by Sections 5.04 and 5.08 hereof. Section 2.07. Situs of the Trust. It is the intention of the parties hereto that the Trust constitute a trust under the laws of the State of New York. The Trust will be created in the State of New York. The Trust’s only office will be at the office of the Trustee as set forth in Section 2.02 hereof. Section 2.08. Designation of Interests in REMICs. (a) As provided herein, the Trustee shall elect that the Trust Estate (exclusive of the assets held in the Net WAC Cap Carryover Reserve Fund and the Swap Account) be treated for federal income tax purposes as comprising three real estate mortgage investment conduits (each a “REMIC” or, in the alternative, “REMIC I,” “REMIC II” and the “Master REMIC”). Each Certificate, other than the Class R and Class P Certificates, represents ownership of a regular interest in the Master REMIC for purposes of the REMIC Provisions. Each Certificate, other than the Class X-IO, Class R and Class P Certificates, also represents rights with respect to payments to be made from the Net WAC Cap Carryover Reserve Fund as further described in Section 7.04 of this Agreement. The Class X-IO Certificates also evidence ownership of the assets held from time to time in the Net WAC Cap Carryover Reserve Fund, as further described in Section 7.04 hereof. The Class R Certificate represents ownership of the sole class of residual interest in each REMIC for purposes of the REMIC Provisions. (b) The Master REMIC shall hold as its assets the several classes of uncertificated REMIC II Interests, other than the R-2 Interest, and each such REMIC II Interest (other than the R-2 Interest) is hereby designated as a regular interest in REMIC II for purposes of the REMIC Provisions. REMIC II shall hold as its assets the several classes of uncertificated REMIC I Interests, other than the R-1 Interest, and each such REMIC I Interest (other than the R-1 Interest) is hereby designated as a regular interest in REMIC I for purposes of the REMIC Provisions. REMIC I shall hold as its assets the Home Equity Loans and all collections and accounts related thereto, other than the Net WAC Cap Carryover Reserve Fund and the Swap Account. (c) For purposes of the REMIC Provisions, the latest possible maturity date for each regular interest in each REMIC created hereby is the Latest Possible Maturity Date. (d) [Reserved]. (e) REMIC I. The following table sets forth (or describes) the class designation, interest rate, and initial principal balance for each REMIC I Interest (each such Interest other than the R-1 Interest, a “REMIC I Regular Interest”): REMIC I: The following table sets forth the designations, principal balances, and interest rates for each interest in REMIC I, each of which (other than the R-1 interest) is hereby designated as a regular interest in REMIC I (the “REMIC I Regular Interests”):
(1) The interest rate with respect to any Distribution Date (and the related Interest Period) for the T1-A Interest is a per annum rate equal to the weighted average of the Net Coupon Rates of all the Home Equity Loans as of the first day of the related Remittance Period, weighted on their outstanding loan balances of such day and adjusted to take into account any prepayments occurring after such day that were distributed in the prior calendar month (the “REMIC Net WAC Rate”). (2) The interest rate with respect to any Distribution Date (and the related Interest Period) for each of these interests is a per annum rate equal to the lesser of (i) 10.6%, and (ii) the product of (a) the REMIC Net WAC Rate and (b) 2. (3) For any Distribution Date (and the related Interest Period) the interest rate for each of these Lower Tier Interests shall be the excess, if any, of (i) the product of (a) the REMIC Net WAC Rate and (b) 2, over (ii) 10.6%. (4) The R-I interest shall not have a principal balance and shall not bear interest. The R-I interest is hereby designated as the sole class of residual interest in REMIC I. (5) The T1-Arrearage interest shall not bear interest. The T1-Arrearage interest shall have an Initial Principal Balance equal to the aggregate Arrearage amount as of the Cut-off Date. On the Business Day prior to each Distribution Date, all Realized Losses and all payments of principal shall be allocated in the following order of priority: (i) First, to the T1-A interest until the outstanding principal balance of such interest is reduced to zero, and (ii) Second, to the outstanding T1 interest with the lowest numerical denomination until such interest is reduced to zero; provided that in the case of T1 interests with the same numerical denomination, principal shall be allocated equally between such interests. On the Business Day prior to each Distribution Date, all Prepayment Charges shall be allocated to the Class T1-V73 interest and all amounts paid with respect to unreimbursed Arrearages shall be allocated to the Class T1-Arrearage interest. (f) REMIC II: The following table sets forth the designations, principal balances, and interest rates for each interest in REMIC II, each of which (other than the R-2 interest) is hereby designated as a regular interest in REMIC II (the “REMIC II Regular Interests”):
(1) The interest rate for each of these interests (the “REMIC Maximum Rate”) with respect to any Distribution Date (and the related Interest Period) is a per annum rate equal to the weighted average of the interest rates on the REMIC I Regular Interests, provided , however , that for any Distribution Date on which the Class T2-IO Interest is entitled to a portion of the interest accruals on a REMIC I interest having an “F” in its class designation, as described in footnote two below, such weighted average shall be computed by first subjecting the rate on such REMIC I interest to a cap equal to the product of the interest rate used to compute the Swap Counterparty Payment adjusted to reflect the day count convention used for such interest rate (“Swap LIBOR”) for such Distribution Date and 2 (the “REMIC II Net WAC”). (2) The Class T2-IO is an interest only class that does not have a principal balance. For only those Distribution Dates listed in the first column in the table below, the Class T2-IO shall be entitled to interest accrued on the REMIC I interest listed in the second column in the table below at a per annum rate equal to the excess, if any, of (i) the interest rate for such REMIC I interest for such Distribution Date over (ii) the product of Swap LIBOR for such Distribution Date and 2.
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