EXHIBIT 4.1
BANC OF AMERICA MORTGAGE SECURITIES, INC.,
as Depositor,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Servicer,
and
WELLS FARGO BANK, N.A.,
as Trustee
POOLING AND SERVICING AGREEMENT
Dated September 28, 2006
------------------------------------------------------------------------------
Banc of America Alternative Loan Trust 2006-7
Mortgage Pass-Through Certificates
Series 2006-7
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined
Terms............................................
Section 1.02 Interest
Calculations....................................
Section 1.03 Fiscal
Year..............................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01
Conveyance of Mortgage Loans.............................
Section 2.02
Acceptance by the Trustee of the Mortgage Loans..........
Section 2.03
Representations and Warranties of the Servicer...........
Section 2.04
Representations and Warranties of the Depositor as to the
Mortgage Loans..........................................
Section 2.05
Designation of Interests in the REMICs...................
Section 2.06
Designation of Start-up Day..............................
Section 2.07 REMIC
Certificate Maturity Date..........................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer
to Service Mortgage Loans.......................
Section 3.02
Subservicing; Enforcement of the Obligations of Servicer.
Section 3.03 Fidelity
Bond; Errors and Omissions Insurance............
Section 3.04 Access to
Certain Documentation..........................
Section 3.05
Maintenance of Primary Insurance Policy; Claims;
Collections of BPP Mortgage Loan Payments...............
Section 3.06 Rights of
the Depositor and the Trustee in Respect of the
Servicer................................................
Section 3.07 Trustee
to Act as Servicer...............................
Section 3.08
Collection of Mortgage Loan Payments; Servicer Custodial
Account; Certificate Account;...........................
Section 3.09
Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.........................................
Section 3.10 Access to
Certain Documentation and Information Regarding
the Mortgage Loans......................................
Section 3.11 Permitted
Withdrawals from the Servicer Custodial Account
and Certificate Account.................................
Section 3.12
Maintenance of Hazard Insurance..........................
Section 3.13
Enforcement of Due-On-Sale Clauses; Assumption Agreements
Section 3.14
Realization Upon Defaulted Mortgage Loans; REO Property..
Section 3.15 Trustee
to Cooperate; Release of Mortgage Files..........
Section 3.16
Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee.....................
Section 3.17 Servicing
Compensation...................................
Section 3.18 Annual
Statement as to Compliance........................
Section 3.19
Assessments of Servicing Compliance; Registered Public
Accounting Firm Attestation Reports.....................
Section 3.20
Advances.................................................
Section 3.21
Modifications, Waivers, Amendments and Consents..........
Section 3.22 Reports
to the Securities and Exchange Commission........
ARTICLE IV
SERVICER'S CERTIFICATE
Section 4.01
Servicer's Certificate...................................
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION
Section 5.01
Distributions............................................
Section 5.02
Priorities of Distributions..............................
Section 5.03
Allocation of Losses.....................................
Section 5.04
Statements to Certificateholders.........................
Section 5.05 Tax
Returns and Reports to Certificateholders............
Section 5.06 Tax
Matters Person.......................................
Section 5.07 Rights of
the Tax Matters Person in Respect of the
Trustee.................................................
Section 5.08 REMIC
Related Covenants..................................
Section 5.09 Grantor
Trust Administration.............................
Section 5.10 Cap
Carryover Reserve Account............................
Section 5.11 REMIC
Distributions......................................
ARTICLE VI
THE CERTIFICATES
Section 6.01 The
Certificates.........................................
Section 6.02
Registration of Transfer and Exchange of Certificates....
Section 6.03
Mutilated, Destroyed, Lost or Stolen Certificates........
Section 6.04 Persons
Deemed Owners....................................
ARTICLE VII
THE DEPOSITOR AND THE SERVICER
Section 7.01 Respective Liabilities of the Depositor and the
Servicer..
Section 7.02 Merger or Consolidation of the Depositor or the
Servicer..
Section 7.03 Limitation on Liability of the Depositor, the
Servicer
and Others..............................................
Section 7.04 Depositor
and Servicer Not to Resign.....................
Section 7.05
Assignment or Delegation of Duties by the Servicer.......
ARTICLE VIII
DEFAULT
Section 8.01 Events of
Default........................................
Section 8.02 Remedies
of Trustee......................................
Section 8.03
Directions by Certificateholders and Duties of Trustee
During Event of Default.................................
Section 8.04 Action
upon Certain Failures of the Servicer and upon
Event of Default........................................
Section 8.05 Trustee
to Act; Appointment of Successor.................
Section 8.06
Notification to Certificateholders.......................
ARTICLE IX
THE TRUSTEE
Section 9.01 Duties of
Trustee........................................
Section 9.02 Certain
Matters Affecting the Trustee....................
Section 9.03 Trustee
Not Liable for Certificates or Mortgage Loans....
Section 9.04 Trustee
May Own Certificates.............................
Section 9.05
Eligibility Requirements for Trustee.....................
Section 9.06
Resignation and Removal of Trustee.......................
Section 9.07 Successor
Trustee........................................
Section 9.08 Merger or
Consolidation of Trustee.......................
Section 9.09
Appointment of Co-Trustee or Separate Trustee............
Section 9.10
Authenticating Agents....................................
Section 9.11 Trustee's
Fees and Expenses..............................
Section 9.12
Appointment of Custodian.................................
Section 9.13 Paying
Agents............................................
Section 9.14
Limitation of Liability..................................
Section 9.15 Trustee
May Enforce Claims Without Possession of
Certificates............................................
Section 9.16 Suits for
Enforcement....................................
Section 9.17 Waiver of
Bond Requirement...............................
Section 9.18 Waiver of
Inventory, Accounting and Appraisal Requirement
ARTICLE X
TERMINATION
Section 10.01 Termination upon Purchase by the Call Right Holder
or
Liquidation of All Mortgage Loans.......................
Section 10.02 Additional Termination
Requirements......................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01
Amendment................................................
Section 11.02 Recordation of
Agreement.................................
Section 11.03 Limitation on Rights of
Certificateholders...............
Section 11.04 Governing
Law............................................
Section 11.05
Notices..................................................
Section 11.06 Severability of
Provisions...............................
Section 11.07 Certificates Nonassessable and Fully
Paid................
Section 11.08 Access to List of
Certificateholders.....................
Section 11.09
Recharacterization.......................................
Section 11.10
Insolvency...............................................
Section 11.11 Regulation AB Compliance; Intent of Parties;
Reasonableness..........................................
<PAGE>
EXHIBITS
--------
Exhibit A-A-1 - Form of Face of Class A-1
Certificate
Exhibit A-A-2 - Form of Face of Class A-2
Certificate
Exhibit A-A-3 - Form of Face of Class A-3
Certificate
Exhibit A-A-4 - Form of Face of Class A-4
Certificate
Exhibit A-A-5
- Form of Face of Class A-5
Certificate
Exhibit A-A-6 - Form of Face of Class A-6
Certificate
Exhibit B-1 -
Form of Face of Class
M-1 Certificate
Exhibit B-2 -
Form of Face of Class
M-2 Certificate
Exhibit B-3 -
Form of Face of Class
M-3 Certificate
Exhibit B-4 -
Form of Face of Class
M-4 Certificate
Exhibit B-5 -
Form of Face of Class
M-5 Certificate
Exhibit B-6 -
Form of Face of Class
CE Certificate
Exhibit B-7 -
Form of Face of Class
R Certificate
Exhibit C
- Form of Reverse of
all Certificates................
Exhibit D
- Addresses for
Requesting Mortgage Loan
Schedule .........................................
Exhibit E
- Request for Release
of Documents...................
Exhibit F
- Form of
Certification of Establishment of
Account...........................................
Exhibit G-1 -
Form of Transferor's
Certificate...................
Exhibit G-2A - Form 1 of Transferee's
Certificate.................
Exhibit G-2B - Form 2 of Transferee's
Certificate.................
Exhibit H
- Form of Transferee
Representation Letter for
ERISA Restricted Certificates.....................
Exhibit I
- Form of Affidavit Regarding
Transfer of
Residual Certificate..............................
Exhibit J
- Contents of
Servicing File.........................
Exhibit K
- Form of Special
Servicing Agreement................
Exhibit L
- List of Recordation
States.........................
Exhibit M
- Form of Initial
Certification of the Trustee.......
Exhibit N
- Form of Final
Certification of the Trustee.........
Exhibit O
- Form of
Sarbanes-Oxley Certification...............
Exhibit P
- Form of Trustee's
Certification....................
Exhibit Q
- Servicing
Criteria.................................
Exhibit R-1 -
Additional Form 10-D
Information ..................
Exhibit R-2 -
Additional Form 10-K
Information ..................
Exhibit R-3 -
Form 8-K Information
..............................
<PAGE>
POOLING AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, dated September 28, 2006,
is
hereby executed by and among BANC OF AMERICA MORTGAGE SECURITIES,
INC., as
depositor (together with its permitted successors and assigns, the
"Depositor"),
BANK OF AMERICA, NATIONAL ASSOCIATION, as servicer (together with
its permitted
successors and assigns, the "Servicer"), and WELLS FARGO BANK,
N.A., as trustee
(together with its permitted successors and assigns, the
"Trustee").
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee agree as follows:
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in
multiple Classes,
which in the aggregate will evidence the entire beneficial
ownership interest in
the Trust created hereunder. The Certificates will consist of
thirteen Classes
of Certificates, designated as (i) the Class A-1, Class A-2, Class
A-3, Class
A-4, Class A-5 and Class A-6 Certificates, (ii) the Class M-1,
Class M-2, Class
M-3, Class M-4 and Class M-5 Certificates, (iii) the Class CE
Certificates and
(iv) the Class R Certificate. The portion of the Trust Estate
consisting of the
Cap Carryover Reserve Account and the right of the Offered
Certificates to
receive amounts from the Cap Carryover Reserve Account shall not be
assets of
either REMIC created hereunder, but rather shall be assets of the
Grantor Trust.
REMIC 1
As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of the Mortgage Loans and
certain other
related assets subject to this Agreement (but exclusive of the Cap
Carryover
Amounts and the Cap Carryover Reserve Account) as a real estate
investment
conduit (a "REMIC") for federal income tax purposes, and such
segregated pool of
assets will be designated as "REMIC 1." The Class R-1 Interest will
represent
the sole class of "residual interests" in REMIC 1 for purposes of
the REMIC
Provisions under federal income tax law. The following table
irrevocably sets
forth the designation, the Uncertificated REMIC 1 Pass-Through
Rate, the initial
Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury
Regulations Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for
each of the REMIC 1 Regular Interests. None of the REMIC 1 Regular
Interests
will be certificated.
<PAGE>
Uncertificated
Initial
REMIC 1
Uncertificated
Latest Possible
Designation
Pass-Through Rate
Balance
Maturity Date
--------------------------------------------------------------------------------
LT1AA
Variable(2)
$328,609,886.00 October
25, 2036
LT1A1
Variable(2)
$1,258,220.00
October 25, 2036
LT1A2
Variable(2)
$364,850.00
October 25, 2036
LT1A3
Variable(2)
$488,370.00
October 25, 2036
LT1A4
Variable(2)
$370,880.00
October 25, 2036
LT1A5
Variable(2)
$121,075.00
October 25, 2036
LT1A6
Variable(2)
$600,550.00
October 25, 2036
LT1M1
Variable(2)
$65,385.00
October 25, 2036
LT1M2
Variable(2)
$16,765.00
October 25, 2036
LT1M3
Variable(2)
$16,765.00
October 25, 2036
LT1M4
Variable(2)
$16,765.00
October 25, 2036
LT1M5
Variable(2)
$16,765.00
October 25, 2036
LT1ZZ
Variable(2)
$3,369,934.00
October 25, 2036
LT1XX
Variable(2)
$335,316,211.00 October
25, 2036
(1) Solely for
purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii),
the
Distribution Date in the month following the maturity date for
the
Mortgage
Loan with the latest maturity date has been designated as the
"latest
possible maturity date" for each REMIC 1 Regular Interest.
(2) Calculated
in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Trustee shall make an election to treat
the
segregated pool of assets consisting of the REMIC 1 Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC 2." The Class R-2 Interest represents the sole
class of
"residual interests" in REMIC 2 for purposes of the REMIC
Provisions.
The following table sets forth characteristics of the
Certificates,
together with the minimum Denominations and integral multiples in
excess thereof
in which the Classes of Certificates shall be issuable:
Integral
Initial Class
Multiples in
Certificate
Certificate Minimum
Excess of
Classes
Balance
Interest Rate
Denomination Minimum
--------------------------------------------------------------------------------
Class A-1
$251,644,000.00
(1)
$1,000
$1
Class A-2
$72,970,000.00
(2)
$1,000
$1
Class A-3
$97,674,000.00
(3)
$1,000
$1
Class A-4
$74,176,000.00
(4)
$1,000
$1
Class A-5
$24,215,000.00
(5)
$1,000
$1
Class A-6
$120,110,000.00
(6)
$1,000
$1
Class M-1
$13,077,000.00
(7)
$25,000
$1
Class M-2
$3,353,000.00
(8)
$25,000
$1
Class M-3
$3,353,000.00
(9)
$25,000
$1
Class M-4
$3,353,000.00
(10)
$25,000
$1
Class M-5
$3,353,000.00
(11)
$25,000
$1
Class CE
(12)
(12)
(13)
N/A
Class R
N/A
N/A
(14)
N/A
Total
$667,278,000.00
------------
(1) Interest
will accrue on the Class A-1 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-1
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(2) Interest
will accrue on the Class A-2 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-2
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(3) Interest
will accrue on the Class A-3 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-3
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(4) Interest
will accrue on the Class A-4 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-4
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(5) Interest
will accrue on the Class A-5 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-5
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(6) Interest
will accrue on the Class A-6 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class A-6
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(7) Interest
will accrue on the Class M-1 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-1
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(8) Interest
will accrue on the Class M-2 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-2
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(9) Interest
will accrue on the Class M-3 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-3
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(10) Interest will
accrue on the Class M-4 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-4
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(11) Interest will
accrue on the Class M-5 Certificates during each Interest
Accrual
Period at a rate equal to the lesser of: (i) the Class M-5
Pass-Through Rate and (ii) the Pool Cap for such Distribution
Date.
(12) Solely for REMIC
purposes, the Class CE Certificates will (i) have an
Initial
Class Certificate Balance equal to the Initial
Overcollateralization Amount and (ii) will bear interest on its
Notional
Amount at
its Pass-Through Rate.
(13) The Class CE
Certificates are issuable only in minimum Percentage
Interests
of 10% and incremental Percentage Interests of 1% in excess
thereof.
(14) The Class R
Certificate is issuable only as a single certificate.
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement,
the
following words and phrases, unless the context otherwise requires,
shall have
the meanings specified in this Article:
10-K Filing Deadline: As defined in Section 3.22(c).
1933 Act: The Securities Act of 1933, as amended.
60+ Day Delinquent Loan: Each Mortgage Loan (including each
Mortgage
Loan in foreclosure and each Mortgage Loan for which the Mortgagor
has filed for
bankruptcy after the Closing Date) with respect to which any
portion of a
Monthly Payment is, as of the last day of the prior Collection
Period, two
months or more past due and each Mortgage Loan relating to an REO
Property.
Accrued Certificate Interest: With respect to each Distribution
Date
and Class of Certificates, an amount equal to the interest accrued
at the
Certificate Interest Rate for such Class in the Preliminary
Statement (or in the
case of the regular interests represented thereby, at the related
REMIC 2
Pass-Through Rate) during the related Interest Accrual Period on
the Class
Certificate Balance of such Class of Certificates, reduced by such
Class'
Interest Percentage of Relief Act Reductions for such Distribution
Date.
Additional Form 10-D Information: As defined in Section
3.22(b).
Additional Form 10-K Information: As defined in Section
3.22(c).
Additional Servicer: As defined in Section 3.02(e)
Advance: A Periodic Advance or a Servicing Advance.
Agreement: This Pooling and Servicing Agreement together with
all
amendments hereof and supplements hereto.
Amount Held for Future Distribution: As to any Distribution
Date,
the total of the amounts held in the Servicer Custodial Account at
the close of
business on the preceding Determination Date on account of (i)
Principal
Prepayments and Liquidation Proceeds received or made on the
Mortgage Loans in
the month of such Distribution Date and (ii) payments which
represent receipt of
Monthly Payments on the Mortgage Loans in respect of a Due Date or
Due Dates
subsequent to the related Due Date.
Ancillary Income: All prepayment premiums (if any), assumption
fees,
late payment charges and all other ancillary income and fees with
respect to the
Mortgage Loans.
Applied Realized Loss Amount: With respect to each Distribution
Date, the excess, if any, of the aggregate of (a) the Class
Certificate Balances
of the Certificates (after taking into account the distribution of
the Principal
Distribution Amount on such Distribution Date and any increase in
any Class
Certificate Balance as a result of Recoveries) over (b) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the
related Collection
Period after giving effect to Principal Prepayments received during
the calendar
month preceding the month of that Distribution Date.
Appraised Value: With respect to any Mortgaged Property, either
(i)
the lesser of (a) the appraised value determined in an appraisal
obtained by the
originator at origination of such Mortgage Loan or an automated
valuation model
or tax assessed value (if permitted by the applicable mortgage loan
program) and
(b) the sales price for such property, except that, in the case of
Mortgage
Loans the proceeds of which were used to refinance an existing
mortgage loan,
the Appraised Value of the related Mortgaged Property is the
appraised value
thereof determined either in an appraisal obtained at the time of
refinancing or
an automated valuation model or tax assessed value (if permitted by
the
applicable mortgage loan program), or (ii) the appraised value
determined in an
appraisal made at the request of a Mortgagor subsequent to
origination in order
to eliminate the Mortgagor's obligation to keep a Primary Insurance
Policy in
force.
Assignment of Mortgage: An individual assignment of the
Mortgage,
notice of transfer or equivalent instrument in recordable form,
sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property
is located
to give record notice of the sale of the Mortgage.
Authenticating Agents: As defined in Section 9.10.
Bank of America: Bank of America, National Association, a
national
banking association, or its successor in interest.
Book-Entry Certificate: Any Class of Certificates other than
the
Physical Certificates.
BPP Mortgage Loan: Any Mortgage Loan which includes a Borrowers
Protection Plan(R) addendum to the related Mortgage Note whereby
Bank of America
agrees to cancel (i) certain payments of principal and interest on
such Mortgage
Loan for up to twelve months upon the disability or involuntary
unemployment of
the Mortgagor or (ii) the outstanding principal balance of the
Mortgage Loan
upon the accidental death of the Mortgagor; provided that such
Borrowers
Protection Plan(R) has not been terminated in accordance with its
terms.
BPP Mortgage Loan Payment: With respect to any BPP Mortgage
Loan,
the Monthly Covered Amount or Total Covered Amount, if any, payable
by Bank of
America pursuant to Section 5 of the Mortgage Loan Purchase
Agreement.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii)
a day on which banking institutions in the State of North Carolina,
the State of
New York, the State of Minnesota, each state in which the servicing
offices of
the Servicer are located or each state in which the Corporate Trust
Office is
located are required or authorized by law or executive order to be
closed.
Call Right Holder: The Majority Class CE Certificateholders, or
if
such holder is the Seller, or an affiliate of the Seller, or if the
Majority
Class CE Certificateholders fail to exercise the option on the
Optional
Termination Date, the Depositor.
Cap Carryover Amount: If on any Distribution Date, the Accrued
Certificate Interest for any Certificate is based upon the Pool
Cap, the excess
of (i) the amount of interest such Certificate would have been
entitled to
receive on such Distribution Date based on the related Pass-Through
Rate, over
(ii) the amount of interest such Certificate received on such
Distribution Date
based on the Pool Cap, together with the unpaid portion of any such
excess from
prior Distribution Dates (and interest accrued thereon at the then
applicable
Pass-Through Rate on such Certificate).
Cap Carryover Reserve Account: The account or accounts created
and
maintained pursuant to Section 5.10 hereof.
Certificate: Any of the Banc of America Alternative Loan Trust
2006-7 Mortgage Pass-Through Certificates, Series 2006-7 that are
issued
pursuant to this Agreement.
Certificate Account: The Eligible Account created and maintained
by
the Trustee pursuant to Section 3.08(c) in the name of the Trustee
for the
benefit of the Certificateholders and designated "Wells Fargo Bank,
N.A., in
trust for registered holders of Banc of America Alternative Loan
Trust 2006-7
Mortgage Pass-Through Certificates, Series 2006-7." Funds in the
Certificate
Account shall be held in trust for the Holders of the Certificates
for the uses
and purposes set forth in this Agreement.
Certificate Balance: With respect to any Certificate at any
date
(other than a Class CE or Class R Certificate), the maximum dollar
amount of
principal to which the Holder thereof is then entitled hereunder,
such amount
being equal to the product of the Percentage Interest of such
Certificate and
the Class Certificate Balance of the Class of Certificates of which
such
Certificate is a part.
Certificate Custodian: Initially, Wells Fargo Bank, N.A.;
thereafter
any other Certificate Custodian acceptable to the Depository and
selected by the
Trustee.
Certificate Interest Rate: With respect to each Class of
Certificates, the per annum rate set forth or calculated in the
table under the
caption "REMIC 2" in the Preliminary Statement.
Certificate Owner: With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of a Book-Entry Certificate.
With respect to
any Definitive Certificate, the Certificateholder of such
Certificate.
Certificate Register: The register maintained pursuant to
Section
6.02.
Certificate Registrar: The registrar appointed pursuant to
Section
6.02.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the
purpose of
giving any consent pursuant to this Agreement, any Certificate
registered in the
name of the Depositor, the Servicer or any affiliate thereof shall
be deemed not
to be outstanding and the Percentage Interest and Voting Rights
evidenced
thereby shall not be taken into account in determining whether the
requisite
amount of Percentage Interests or Voting Rights, as the case may
be, necessary
to effect any such consent has been obtained, unless such entity is
the
registered owner of the entire Class of Certificates, provided that
the Trustee
shall not be responsible for knowing that any Certificate is
registered in the
name of such an affiliate unless one of its Responsible Officers
has actual
knowledge.
Certification: As defined in Section 3.22(c).
Class: As to the Certificates, the Class A-1, Class A-2, Class
A-3,
Class A-4, Class A-5, Class A-6, Class M-1, Class M-2, Class M-3,
Class M-4,
Class M-5, Class CE and Class R, as the case may be.
Class A-1 Pass-Through Rate: For each Distribution Date, a per
annum
rate equal to 5.8998%.
Class A-2 Pass-Through Rate: For each Distribution Date, a per
annum
rate equal to 5.7073%.
Class A-3 Pass-Through Rate: For each Distribution Date, a per
annum
rate equal to 5.9133%.
Class A-4 Pass-Through Rate: For each Distribution Date on and
prior
to the Optional Termination Date, a per annum rate equal to 5.9983%
and for each
Distribution Date after the Optional Termination Date, a per annum
rate equal to
6.4983%.
Class A-5 Pass-Through Rate: For each Distribution Date on and
prior
to the Optional Termination Date, a per annum rate equal to 6.2262%
and for each
Distribution Date after the Optional Termination Date, a per annum
rate equal to
6.7262%.
Class A-6 Pass-Through Rate: For each Distribution Date on and
prior
to the Optional Termination Date, a per annum rate equal to 5.8594%
and for each
Distribution Date after the Optional Termination Date, a per annum
rate equal to
6.3594%.
Class Certificate Balance: With respect to any Class (other than
the
Class CE and Class R Certificates) and any date of determination,
the Initial
Class Certificate Balance of such Class (A) reduced by the sum of
(i) all
distributions of principal made with respect thereto and (ii)
Applied Realized
Loss Amounts allocated thereto for previous Distribution Dates and
(B) increased
by any Recoveries allocated to such Class for previous Distribution
Dates. The
Class CE and Class R Certificates do not have a Class Certificate
Balance.
Class CE Distributable Amount: With respect to any Distribution
Date, (x) the sum of (i) the interest accrued on such Class CE
Certificate at
its Pass-Through Rate calculated on its Notional Amount less the
amount (without
duplication) of Cap Carryover Amounts and (ii) the
Overcollateralization Release
Amount.
Class CE Uncertificated Principal Balance: As of any date of
determination, the Initial Overcollateralization Amount minus the
sum of (i) any
Realized Losses allocated thereto and (ii) any amounts distributed
(or deemed
distributed) to the Class CE Certificates with respect thereto.
Class M Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4
and Class M-5 Certificates.
Class M-1 Pass-Through Rate: For each Distribution Date on and
prior
to the Optional Termination Date, a per annum rate equal to 6.0488%
and for each
Distribution Date after the Optional Termination Date, a per annum
rate equal to
6.5488%.
Class M-1 Principal Distribution Amount: As of any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event is not
in effect,
the excess of (x) the sum of (i) the sum of the Class Certificate
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date) and (ii)
the Class
Certificate Balance of the Class M-1 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (a) the product of (i)
95.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day
of the related Collection Period after giving effect to Principal
Prepayments
received during the calendar month preceding the month of that
Distribution Date
and (b) the amount by which the aggregate Stated Principal Balance
of the
Mortgage Loans as of the last day of the related Collection Period
after giving
effect to Principal Prepayments received during the calendar month
preceding the
month of that Distribution Date exceeds the product of (i) 0.50%
and (ii) the
aggregate Stated Principal Balance of the Mortgage Loans on the
Cut-off Date.
Class M-1 Realized Loss Amortization Amount: As to the Class
M-1
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 5.02(c)(i) through (iv) hereof,
in each case
for such Distribution Date.
Class M-2 Pass-Through Rate: For each Distribution Date on and
prior
to the Optional Termination Date, a per annum rate equal to 6.2465%
and for each
Distribution Date after the Optional Termination Date, a per annum
rate equal to
6.7465%.
Class M-2 Principal Distribution Amount: As of any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event is not
in effect,
the excess of (x) the sum of (i) the sum of the Class Certificate
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Class
Certificate Balance of the Class M-1 Certificates (after taking
into account the
payment of the Class M-1 Principal Distribution Amount on such
Distribution
Date) and (iii) the Class Certificate Balance of the Class M-2
Certificates
immediately prior to such Distribution Date over (y) the lesser of
(a) the
product of (i) 96.00% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Collection Period
after giving
effect to Principal Prepayments received during the calendar month
preceding the
month of that Distribution Date and (b) the amount by which the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related
Collection Period after giving effect to Principal Prepayments
received during
the calendar month preceding the month of that Distribution Date
exceeds the
product of (i) 0.50% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans on the Cut-off Date.
Class M-2 Realized Loss Amortization Amount: As to the Class
M-2
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 5.02(c)(i) through (vii)
hereof, in each
case for such Distribution Date.
Class M-3 Pass-Through Rate: For each Distribution Date on and
prior
to the Optional Termination Date, a per annum rate equal to 6.4432%
and for each
Distribution Date after the Optional Termination Date, a per annum
rate equal to
6.9432%.
Class M-3 Principal Distribution Amount: As of any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event is not
in effect,
the excess of (x) the sum of (i) the sum of the Class Certificate
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Class
Certificate Balance of the Class M-1 Certificates (after taking
into account the
payment of the Class M-1 Principal Distribution Amount on such
Distribution
Date), (iii) the Class Certificate Balance of the Class M-2
Certificates (after
taking into account the payment of the Class M-2 Principal
Distribution Amount
on such Distribution Date) and (iv) the Class Certificate Balance
of the Class
M-3 Certificates immediately prior to such Distribution Date over
(y) the lesser
of (a) the product of (i) 97.00% and (ii) the aggregate Stated
Principal Balance
of the Mortgage Loans as of the last day of the related Collection
Period after
giving effect to Principal Prepayments received during the calendar
month
preceding the month of that Distribution Date and (b) the amount by
which the
aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of
the related Collection Period after giving effect to Principal
Prepayments
received during the calendar month preceding the month of that
Distribution Date
exceeds the product of (i) 0.50% and (ii) the aggregate Stated
Principal Balance
of the Mortgage Loans on the Cut-off Date.
Class M-3 Realized Loss Amortization Amount: As to the Class
M-3
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 5.02(c)(i) through (x) hereof,
in each case
for such Distribution Date.
Class M-4 Pass-Through Rate: For each Distribution Date on and
prior
to the Optional Termination Date, a per annum rate equal to 6.8872%
and for each
Distribution Date after the Optional Termination Date, a per annum
rate equal to
7.3872%.
Class M-4 Principal Distribution Amount: As of any Distribution
Date
on or after the Stepdown Date and as long as a Trigger Event is not
in effect,
the excess of (x) the sum of (i) the sum of the Class Certificate
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
Class
Certificate Balance of the Class M-1 Certificates (after taking
into account the
payment of the Class M-1 Principal Distribution Amount on such
Distribution
Date), (iii) the Class Certificate Balance of the Class M-2
Certificates (after
taking into account the payment of the Class M-2 Principal
Distribution Amount
on such Distribution Date), (iv) the Class Certificate Balance of
the Class M-3
Certificates (after taking into account the payment of the Class
M-3 Principal
Distribution Amount on such Distribution Date) and (v) the Class
Certificate
Balance of the Class M-4 Certificates immediately prior to such
Distribution
Date over (y) the lesser of (a) the product of (i) 98.00% and (ii)
the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day
of the related
Collection Period after giving effect to Principal Prepayments
received during
the calendar month preceding the month of that Distribution Date
and (b) the
amount by which the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Collection Period after giving
effect to
Principal Prepayments received during the calendar month preceding
the month of
that Distribution Date exceeds the product of (i) 0.50% and (ii)
the aggregate
Stated Principal Balance of the Mortgage Loans on the Cut-off
Date.
Class M-4 Realized Loss Amortization Amount: As to the Class
M-4
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-4 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 5.02(c)(i) through (xiii)
hereof, in each
case for such Distribution Date.
Class M-5 Pass-Through Rate: For each Distribution Date on and
prior
to the Optional Termination Date, a per annum rate equal to 7.1000%
and for each
Distribution Date after the Optional Termination Date, a per annum
rate equal to
7.6000%.
Class M-5
Principal Distribution Amount: As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not
in effect,
the excess of (x) the sum of (i) the sum of the Class Balances of
the Senior
Certificates (after taking into account the payment of the Senior
Principal
Distribution Amount on such Distribution Date), (ii) the Class
Balance of the
Class M-1 Certificates (after taking into account the payment of
the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Class
Balance of the Class M-2 Certificates (after taking into account
the payment of
the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the
Class Balance of the Class M-3 Certificates (after taking into
account the
payment of the Class M-3 Principal Distribution Amount on such
Distribution
Date), (v) the Class Balance of the Class M-4 Certificates (after
taking into
account the payment of the Class M-4 Principal Distribution Amount
on such
Distribution Date) and (vi) the Class Balance of the Class M-5
Certificates
immediately prior to such Distribution Date over (y) the lesser of
(a) the
product of (i) 99.00% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Collection Period
after giving
effect to Principal Prepayments received during the calendar month
preceding the
month of that Distribution Date and (b) the amount by which the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related
Collection Period after giving effect to Principal Prepayments
received during
the calendar month preceding the month of that Distribution Date
exceeds the
product of (i) 0.50% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans on the Cut-off Date.
Class M-5 Realized Loss Amortization Amount: As to the Class
M-5
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-5 Certificates as of such
Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over
(ii) the sum
of the amounts described in Section 5.02(c)(i) through (xvi)
hereof, in each
case for such Distribution Date.
Class R Certificate: The Class R Certificate executed by the
Trustee
on behalf of the Trust, and authenticated and delivered by the
Certificate
Registrar, substantially in the form annexed hereto as Exhibit B-7
and
evidencing the ownership of the residual interest in each of REMIC
1 and REMIC
2. The Class R Certificate represents the ownership of the Class
R-1 Interest
and the Class R-2 Interest.
Class R-1 Interest: The uncertificated residual interest in REMIC
1.
Class R-2 Interest: The uncertificated residual interest in REMIC
2.
Closing Date: September 28, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Collection Period: With respect to any Distribution Date, the
period
from the second day of the calendar month preceding the month in
which such
Distribution Date occurs through the first day of the month in
which such
Distribution Date occurs.
Compensating Interest: With respect to any Distribution Date,
the
least of (a) the aggregate Servicing Fee for such Distribution Date
(before
giving effect to any reduction pursuant to Section 3.17), (b) the
Prepayment
Interest Shortfall for such Distribution Date and (c) one-twelfth
of 0.25% of
the aggregate Stated Principal Balance of the Mortgage Loans as of
the Due Date
in the month preceding the month of such Distribution Date.
Co-op Shares: Shares issued by private non-profit housing
corporations.
Corporate Trust Office: The principal corporate trust office of
the
Trustee at which at any particular time its corporate trust
business with
respect to this Agreement is conducted, which office at the date of
the
execution of this instrument is located at 9062 Old Annapolis Road,
Columbia,
Maryland 21045-1951, Attention: Corporate Trust Services - BOALT
2006-7, and for
certificate transfer purposes is located at Sixth Street and
Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Services -
BOALT
2006-7, or at such other address as the Trustee may designate from
time to time
by notice to the Certificateholders, the Depositor and the
Servicer.
Corresponding Classes: With respect to REMIC 1 and REMIC 2, the
following Classes shall be Corresponding Classes:
Corresponding REMIC 1 Classes
Corresponding REMIC 2 Classes
-----------------------------
-----------------------------
LT1A1
Class A-1 Certificates
LT1A2
Class A-2 Certificates
LT1A3
Class A-3 Certificates
LT1A4
Class A-4 Certificates
LT1A5
Class A-5 Certificates
LT1A6
Class A-6 Certificates
LT1M1
Class M-1 Certificates
LT1M2
Class M-2 Certificates
LT1M3
Class M-3 Certificates
LT1M4
Class M-4 Certificates
LT1M5
Class M-5 Certificates
Custodian: Initially, the Trustee, and thereafter the Custodian,
if
any, hereafter appointed by the Trustee pursuant to Section 9.12.
The Custodian
may (but need not) be the Trustee or any Person directly or
indirectly
controlling or controlled by or under common control of either of
them. Neither
the Servicer nor the Depositor, nor any Person directly or
indirectly
controlling or controlled by or under common control with any such
Person may be
appointed Custodian.
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Customary Servicing Procedures: With respect to the Servicer,
procedures (including collection procedures) that the Servicer
customarily
employs and exercises in servicing and administering mortgage loans
for its own
account and which are in accordance with accepted mortgage
servicing practices
of prudent lending institutions servicing mortgage loans of the
same type as the
Mortgage Loans in the jurisdictions in which the related Mortgaged
Properties
are located.
Cut-off Date: September 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate of the
Cut-off
Date Principal Balances of the Mortgage Loans, which is
$670,632,422.63.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
Cut-off Date,
reduced by all installments of principal due on or prior thereto
whether or not
paid.
Debt Service Reduction: As to any Mortgage Loan and any
Determination Date, the excess of (i) the Monthly Payment due on
the related Due
Date under the terms of such Mortgage Loan over (ii) the amount of
the monthly
payment of principal and/or interest required to be paid with
respect to such
Due Date by the Mortgagor as established by a court of competent
jurisdiction
(pursuant to an order which has become final and nonappealable) as
a result of a
proceeding initiated by or against the related Mortgagor under the
Bankruptcy
Code, as amended from time to time (11 U.S.C.); provided that no
such excess
shall be considered a Debt Service Reduction so long as (a) the
Servicer is
pursuing an appeal of the court order giving rise to any such
modification and
(b)(1) such Mortgage Loan is not in default with respect to payment
due
thereunder in accordance with the terms of such Mortgage Loan as in
effect on
the Cut-off Date or (2) Monthly Payments are being advanced by the
Servicer in
accordance with the terms of such Mortgage Loan as in effect on the
Cut-off
Date.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that
became
the subject of a Debt Service Reduction.
Defective Mortgage Loan: Any Mortgage Loan which is required to
be
cured, repurchased or substituted for pursuant to Section 2.02 or
2.04.
Deficient Valuation: As to any Mortgage Loan and any
Determination
Date, the excess of (i) the then outstanding indebtedness under
such Mortgage
Loan over (ii) the secured valuation thereof established by a court
of competent
jurisdiction (pursuant to an order which has become final and
nonappealable) as
a result of a proceeding initiated by or against the related
Mortgagor under the
Bankruptcy Code, as amended from time to time (11 U.S.C.), pursuant
to which
such Mortgagor retained such Mortgaged Property; provided that no
such excess
shall be considered a Deficient Valuation so long as (a) the
Servicer is
pursuing an appeal of the court order giving rise to any such
modification and
(b)(1) such Mortgage Loan is not in default with respect to
payments due
thereunder in accordance with the terms of such Mortgage Loan as in
effect on
the Cut-off Date or (2) Monthly Payments are being advanced by the
Servicer in
accordance with the terms of such Mortgage Loan as in effect on the
Cut-off
Date.
Deficient Valuation Mortgage Loan: Any Mortgage Loan that became
the
subject of a Deficient Valuation.
Definitive Certificates: As defined in Section 6.02(c)(iii).
Denomination: The amount, if any, specified on the face of each
Certificate representing the principal portion of the Initial Class
Certificate
Balance evidenced by such Certificate.
Depositor: Banc of America Mortgage Securities, Inc., a
Delaware
corporation, or its successor in interest, as depositor of the
Trust Estate.
Depository: The Depository Trust Company, the nominee of which
is
Cede & Co., as the registered Holder of the Book-Entry
Certificates or any
successor thereto appointed in accordance with this Agreement. The
Depository
shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of
the Uniform Commercial Code of the State of New York.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: As to any Distribution Date, the 16th day of
the
month of the related Distribution Date or, if such 16th day is not
a Business
Day, the Business Day immediately preceding such 16th day.
Distribution Date: The 25th day of each month beginning in
October
2006 (or, if such day is not a Business Day, the next Business
Day).
Due Date: As to any Distribution Date and each Mortgage Loan,
the
first day in the calendar month of such Distribution Date.
Eligible Account: Any of (i) an account or accounts maintained
with
(a) Bank of America, or (b) a federal or state chartered depository
institution
or trust company the short-term unsecured debt obligations of which
(or, in the
case of a depository institution or trust company that is the
principal
subsidiary of a holding company, the debt obligations of such
holding company)
have the highest short-term ratings of each Rating Agency at the
time any
amounts are held on deposit therein, or (ii) an account or accounts
in a
depository institution or trust company in which such accounts are
insured by
the FDIC (to the limits established by the FDIC) and the uninsured
deposits in
which accounts are otherwise secured such that, as evidenced by an
Opinion of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such
account or a
perfected first priority security interest against any collateral
(which shall
be limited to Permitted Investments) securing such funds that is
superior to
claims of any other depositors or creditors of the depository
institution or
trust company in which such account is maintained, or (iii) a trust
account or
accounts maintained with the trust department of a federal or state
chartered
depository institution or trust company, acting in its fiduciary
capacity or
(iv) any other account acceptable to each Rating Agency. Eligible
Accounts may
bear interest and may include, if otherwise qualified under this
definition,
accounts maintained with the Trustee or Bank of America.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Restricted Certificates: Any Class M, Class CE or Class R
Certificate.
Escrow Account: As defined in Section 3.09(a).
Escrow Payments: The amounts constituting taxes, assessments,
Primary Insurance Policy premiums, fire and hazard insurance
premiums and other
payments as may be required to be escrowed by the Mortgagor with
the mortgagee
pursuant to the terms of any Mortgage Note or Mortgage.
Events of Default: As defined in Section 8.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any Liquidation Proceeds of
such Mortgage
Loan received in the calendar month in which such Mortgage Loan
became a
Liquidated Mortgage Loan, net of any amounts previously reimbursed
to the
Servicer as Nonrecoverable Advance(s) with respect to such Mortgage
Loan
pursuant to Section 3.11(a)(iii), exceeds (i) the unpaid principal
balance of
such Liquidated Mortgage Loan as of the Due Date in the month in
which such
Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued
interest at
the Mortgage Interest Rate from the Due Date as to which interest
was last paid
or for which a Periodic Advance was made (and not reimbursed) up to
the Due Date
applicable to the Distribution Date immediately following the
calendar month
during which such liquidation occurred.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Extra Principal Distribution Amount: As of any Distribution
Date,
the lesser of (x) the Monthly Excess Interest Amount for such
Distribution Date
and (y) the Overcollateralization Deficiency for such Distribution
Date.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Final Distribution Date: The Distribution Date on which the
final
distribution in respect of the Certificates will be made pursuant
to Section
10.01.
Financial Market Service: Bloomberg Financial Service and any
other
financial information provider designated by the Depositor by
written notice to
the Trustee.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement
Act of 1989, as amended.
Form 8-K: As defined in Section 3.22(a).
Form 8-K Information: As defined in Section 3.22(d).
Form 10-D: As defined in Section 3.22(a).
Form 10-K: As defined in Section 3.22(a).
Grantor Trust: That portion of the Trust exclusive of the
REMICs
consisting of the right of the Offered Certificates to receive Cap
Carryover
Amounts and the obligation of the Class CE Certificates to pay Cap
Carryover
Amounts.
Holder: A Certificateholder.
Independent: When used with respect to any specified Person
means
such a Person who (i) is in fact independent of the Depositor and
the Servicer,
(ii) does not have any direct financial interest or any material
indirect
financial interest in the Depositor or the Servicer or in an
affiliate of either
of them, and (iii) is not connected with the Depositor or the
Servicer as an
officer, employee, promoter, underwriter, trustee, partner,
director or person
performing similar functions.
Initial Class Certificate Balance: With respect to each Class
of
Certificates, the Class Certificate Balance thereof on the Closing
Date, as set
forth opposite such Class in the Preliminary Statement, except with
respect to
(i) the Class R Certificate, which has an Initial Class Certificate
Balance of
zero and (ii) the Class CE Certificates, which, solely for REMIC
purposes, have
an Initial Class Certificate Balance equal to the Initial
Overcollateralization
Amount.
Initial Overcollateralization Amount: $3,354,422.63.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Estate, any related insurance policy, including all riders
and
endorsements thereto in effect, including any replacement policy or
policies for
any Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in
such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
any
other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: As to any Distribution Date and each
Class
of Offered Certificates, the period from and including the first
day of the
calendar month preceding the calendar month of such Distribution
Date to but not
including the first day of the calendar month of such Distribution
Date.
Interest Carry Forward Amount: For any Class of Certificates
(other
than the Class CE and Class R Certificates) and any Distribution
Date, the sum
of (a) the excess, if any, of the Accrued Certificate Interest for
such
Distribution Date over the amount in respect of interest actually
distributed on
such Class for such Distribution Date, (b) any remaining unpaid
Interest Carry
Forward Amount from prior Distribution Dates and (c) interest on
such remaining
Interest Carry Forward Amount referred to in clause (b) at the
applicable
Certificate Interest Rate for the related Interest Accrual
Period.
Interest Remittance Amount: As of any Distribution Date, the sum
of,
without duplication:
(i) the interest portion of any Monthly Payment on the Mortgage
Loans (net of the related Servicing Fee, amounts available for
reimbursement to
the Servicer of Advances and expenses pursuant to this Agreement
and amounts
reimbursable or payable to the Trustee pursuant to this Agreement)
and all
Periodic Advances with respect to the related Collection Period
which is
received by the Servicer on or prior to the related Determination
Date (or in
the case of any Monthly Covered Amount, the related Remittance
Date),
(ii) all Compensating Interest paid by the Servicer in respect
of
such Distribution Date and deposited to the Servicer Custodial
Account pursuant
to Section 3.08(b)(vii);
(iii) the portion of all Principal Prepayments (other than
Total
Covered Amounts) relating to interest received on the Mortgage
Loans during the
month preceding the month of such Distribution Date and deposited
to the
Servicer Custodial Account pursuant to Section 3.08(b)(i) during
such period and
all Total Covered Amounts received and deposited in the Servicer
Custodial
Account by the related Remittance Date;
(iv) the portion of any payment in connection with Liquidation
Proceeds (net of expenses) relating to interest received on the
Mortgage Loans
during the preceding calendar month and deposited to the Servicer
Custodial
Account pursuant to Section 3.08(b)(iii);
(v) in connection with Defective Mortgage Loans, the portion of
the
aggregate of the Repurchase Prices and Substitution Adjustment
Amounts relating
to interest received during the calendar month preceding the month
of that
Distribution Date deposited on the related Remittance Date pursuant
to Section
3.08(b)(vi);
(vi) any other amounts in the Servicer Custodial Account
deposited
therein pursuant to Sections 3.08(b)(iv) and (vii) in respect of
such
Distribution Date;
(vii) any Reimbursement Amount on the Mortgage Loans received
during
the calendar month preceding the month of that Distribution Date;
and
(viii) on the Distribution Date on which the Mortgage Loans and
related REO Property are purchased in accordance with Section 10.01
hereof, that
portion of the purchase price therefor in respect of interest with
respect to
such Distribution Date.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO Property) that was
liquidated in the
calendar month preceding the month of such Distribution Date and as
to which the
Servicer has certified (in accordance with this Agreement) that it
has received
all proceeds it expects to receive in connection with the
liquidation of such
Mortgage Loan including the final disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of
defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or
otherwise or
amounts received in connection with any condemnation or partial
release of a
Mortgaged Property and any other proceeds received in connection
with an REO
Property, less the sum of related unreimbursed Servicing Fees and
Advances.
Loan-to-Value Ratio: With respect to any Mortgage Loan and any
date
of determination, the fraction, expressed as a percentage, the
numerator of
which is the outstanding principal balance of the related Mortgage
Loan at the
date of determination and the denominator of which is the Appraised
Value of the
related Mortgaged Property.
Majority Class CE Certificateholders: The Holders of Class CE
Certificates evidencing at least a 51% Percentage Interest in the
Class CE
Certificates.
Marker Rate: With respect to the Class CE Certificates and any
Distribution Date, a per annum rate equal to two (2) times the
weighted average
of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1
Regular Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1
Regular Interest LT1A4, REMIC 1 Regular Interest LT1A5, REMIC 1
Regular Interest
LT1A6, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1
Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest
LT1M5, and REMIC 1 Regular Interest LT1ZZ, (i) with the rate on
each such REMIC
Regular Interest (other than REMIC 1 Regular Interest LT1ZZ)
subject to a cap
equal to the Pass-Through Rate of its Corresponding Class (taking
into account
in determining any such Pass-through Rate the imposition of the
Pool Cap as
described in footnotes (1) through (11) to the table in the
Preliminary
Statement relating to the Certificates) for the purposes of this
calculation and
(ii) with the rate on REMIC 1 Regular Interest LT1ZZ subject to a
cap of zero
for the purpose of this calculation; provided, however, that for
this purpose,
calculations of the Uncertificated REMIC 1 Pass-Through Rate and
the related cap
with respect to each such REMIC Regular Interest (other than REMIC
1 Regular
Interest LT1ZZ) shall be multiplied by a fraction, the numerator of
which is the
actual number of days in the Interest Accrual Period and the
denominator of
which is 30.
Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount:
With
respect to any Distribution Date, the excess of (a) accrued
interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1
Regular Interest
LT1ZZ for such Distribution Date on a balance equal to the
Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1ZZ minus the REMIC
1
Overcollateralized Amount, in each case for such Distribution Date,
over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1A1,
REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest
LT1A4, REMIC 1 Regular Interest LT1A5, REMIC 1 Regular Interest
LT1A6, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4 and REMIC 1 Regular Interest
LT1M5 each
subject to a cap equal to the Pass-Through Rate of the related
Corresponding
Class for the purpose of this calculation; provided, however, that
for this
purpose, calculations of the Uncertificated REMIC 1 Pass-Through
Rate and the
related caps with respect to Uncertificated Accrued Interest on
REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3,
REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1A5,
REMIC 1 Regular
Interest LT1A6, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2,
REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4 and
REMIC 1
Regular Interest LT1M5 shall be multiplied by a fraction, the
numerator of which
is the actual number of days in the Interest Accrual Period and the
denominator
of which is 30.
MERS: As defined in Section 2.01(b)(iii).
Monthly Covered Amount: As defined in the Mortgage Loan
Purchase
Agreement.
Monthly Excess Cashflow Allocation: As defined in Section
5.02(c).
Monthly Excess Cashflow Amount: The sum of the Monthly Excess
Interest Amount, the Overcollateralization Release Amount and
(without
duplication) any portion of the Principal Distribution Amount
remaining after
principal distributions on the Offered Certificates.
Monthly Excess Interest Amount: With respect to each
Distribution
Date, the amount, if any, by which the Interest Remittance Amount
for such
Distribution Date exceeds the aggregate amount distributed on such
Distribution
Date pursuant to paragraphs (i) through (viii) under Section
5.02(a).
Monthly Payment: The scheduled monthly payment on a Mortgage
Loan
due on any Due Date allocable to principal and/or interest on such
Mortgage Loan
which, unless otherwise specified herein, shall give effect to any
related Debt
Service Reduction and any Deficient Valuation that affects the
amount of the
monthly payment due on such Mortgage Loan or the Monthly Covered
Amount
representing such scheduled monthly payment.
Moody's: Moody's Investors Service, Inc., or any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on a Mortgaged Property securing a Mortgage Note or
creating a first
lien on a leasehold interest.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan.
Mortgage Interest Rate: As to any Mortgage Loan, the per annum
rate
of interest at which interest accrues on the principal balance of
such Mortgage
Loan in accordance with the terms of the related Mortgage Note.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated September 28, 2006, between Bank of America, as
seller, and the
Depositor, as purchaser.
Mortgage Loan Schedule: The list delivered by the Servicer to
the
Trustee and the Custodian of Mortgage Loans (as from time to time
amended by the
Servicer to reflect the addition of Substitute Mortgage Loans and
the deletion
of Defective Mortgage Loans pursuant to the provisions of this
Agreement)
transferred to the Trustee as part of the Trust Estate and from
time to time
subject to this Agreement, setting forth the following information
with respect
to each Mortgage Loan: (i) the Mortgage Loan identifying number;
(ii) a code
indicating whether the Mortgaged Property is owner-occupied; (iii)
the property
type for each Mortgaged Property; (iv) the original months to
maturity or the
remaining months to maturity from the Cut-off Date; (v) the
Loan-to-Value Ratio
at origination; (vi) the Mortgage Interest Rate as of the Cut-off
Date; (vii)
the date on which the first Monthly Payment was due on the Mortgage
Loan, and,
if such date is not the Due Date currently in effect, such Due
Date; (viii) the
stated maturity date; (ix) the amount of the Monthly Payment as of
the Cut-off
Date; (x) the paid-through date; (xi) the original principal amount
of the
Mortgage Loan; (xii) the principal balance of the Mortgage Loan as
of the close
of business on the Cut-off Date, after application of payments of
principal due
on or before the Cut-off Date, whether or not collected, and after
deduction of
any payments collected of scheduled principal due after the Cut-off
Date; (xiii)
a code indicating the purpose of the Mortgage Loan; (xiv) a code
indicating the
documentation style; (xv) the Appraised Value; and (xvi) the
closing date of
such Mortgage Loan. With respect to the Mortgage Loans in the
aggregate, the
Mortgage Loan Schedule shall set forth the following information,
as of the
Cut-off Date: (i) the number of Mortgage Loans; (ii) the current
aggregate
outstanding principal balance of the Mortgage Loans; (iii) the
weighted average
Mortgage Interest Rate of the Mortgage Loans; and (iv) the weighted
average
months to maturity of the Mortgage Loans.
Mortgage Loans: Such of the mortgage loans transferred and
assigned
to the Trustee pursuant to Section 2.01 as from time to time are
held as a part
of the Trust Estate (including any Substitute Mortgage Loans and
REO Property),
the Mortgage Loans originally so held being identified in the
Mortgage Loan
Schedule.
Mortgage Note: The originally executed note or other evidence
of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan,
together with all riders thereto and amendments thereof.
Mortgaged Property: The underlying property securing a Mortgage
Loan, which may include Co-op Shares or residential long-term
leases.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Interest Rate: As to any Mortgage Loan and
Distribution
Date, such Mortgage Loan's Mortgage Interest Rate thereon on the
first day of
the month preceding the month of the related Distribution Date
reduced by (i)
the Servicing Fee Rate and (ii) the Trustee Fee Rate.
Non-U.S. Person: A Person other than a U.S. Person.
Nonrecoverable Advance: Any portion of an Advance previously made
or
proposed to be made in respect of a Mortgage Loan which has not
been previously
reimbursed and which, in the good faith judgment of the Servicer,
will not or,
in the case of a proposed Advance, would not be ultimately
recoverable from the
related Mortgagor, related Liquidation Proceeds, or other
recoveries in respect
of the related Mortgage Loan.
Notional Amount: With respect to any Distribution Date and the
Class
CE Interest and Class CE Certificates, an amount equal to the
aggregate
principal balance of the REMIC 1 Regular Interests for such
Distribution Date.
OCC: The Office of the Comptroller of the Currency.
Offered Certificates: The Senior and Class M Certificates.
Officer's Certificate: A certificate signed by the Chairman of
the
Board, Vice Chairman of the Board, President or a Vice President
and by the
Treasurer, the Secretary or one of the Assistant Treasurers or
Assistant
Secretaries, or any other duly authorized officer of the Depositor
or the
Servicer, as the case may be, and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel acceptable to
the
Trustee, who may be counsel for the Depositor or the Servicer,
except that any
opinion of counsel relating to the qualification of the Trust
Estate as two
separate REMICs or compliance with the REMIC Provisions must be an
opinion of
Independent counsel.
Optional Termination Date: The first Distribution Date on which
the
Call Right Holder may opt to terminate the Mortgage Pool pursuant
to Section
10.01.
OTS: The Office of Thrift Supervision.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
which
was not the subject of a Principal Prepayment in Full prior to such
Due Date,
which did not become a Liquidated Mortgage Loan prior to such Due
Date and which
was not purchased from the Trust prior to such Due Date pursuant to
Section 2.02
or 2.04.
Overcollateralization Amount: As of any Distribution Date, the
excess, if any, of (x) the aggregate Stated Principal Balance of
the Mortgage
Loans as of the last day of the related Collection Period after
giving effect to
Principal Prepayments received during the calendar month preceding
the month of
that Distribution Date over (y) the aggregate Class Certificate
Balance of all
Classes of Certificates (after taking into account all
distributions of
principal on such Distribution Date and the increase of any Class
Certificate
Balance as a result of Recoveries).
Overcollateralization Deficiency: As of any Distribution Date,
the
excess, if any, of (x) the Targeted Overcollateralization Amount
for such
Distribution Date over (y) the Overcollateralization Amount for
such
Distribution Date, calculated for this purpose after taking into
account the
reduction on such Distribution Date of the Class Certificate
Balances of all
Classes of Certificates resulting from the distribution of the
Principal
Distribution Amount (but not the Extra Principal Distribution
Amount) on such
Distribution Date, but prior to taking into account any Applied
Realized Loss
Amounts on such Distribution Date.
Overcollateralization Release Amount: With respect to any
Distribution Date on or after the Stepdown Date on which a Trigger
Event is not
in effect, the lesser of (x) the Principal Remittance Amount for
such
Distribution Date and (y) the excess, if any, of (i) the
Overcollateralization
Amount for such Distribution Date, assuming that 100% of the
Principal
Remittance Amount is applied as a principal distribution on the
Certificates on
such Distribution Date over (ii) the Targeted Overcollateralization
Amount for
such Distribution Date. With respect to any Distribution Date on
which a Trigger
Event is in effect, the Overcollateralization Release Amount will
be zero.
Ownership Interest: As to any Certificate, any ownership or
security
interest in such Certificate, including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: Any of the Class A-1 Pass-Through Rate, the
Class
A-2 Pass-Through Rate, the Class A-3 Pass-Through Rate, the Class
A-4
Pass-Through Rate, the Class A-5 Pass-Through Rate, the Class A-6
Pass-Through
Rate, the Class M-1 Pass-Through Rate, the Class M-2 Pass-Through
Rate, the
Class M-3 Pass-Through Rate, the Class M-4 Pass-Through Rate and
the Class M-5
Pass-Through Rate; and in the case of any Regular Interest, the
Pass-Through
Rate set forth in the definition thereof.
With respect to the Class CE Certificates and any Distribution
Date,
a per annum rate equal to the percentage equivalent of a fraction,
the numerator
of which is the sum of the amounts calculated pursuant to clauses
(A) through
(M) below, and the denominator of which is the aggregate of the
Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1
Regular Interest LT1A4, REMIC 1 Regular Interest LT1A5, REMIC 1
Regular Interest
LT1A6, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1
Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest
LT1M5 and REMIC 1 Regular Interest LT1ZZ. For purposes of
calculating the
Pass-Through Rate for the Class CE Certificates, the numerator is
equal to the
sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1AA minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A1 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A2 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A3 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A3;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A4 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A4;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A5 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A5;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1A6 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1A6;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M1 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M1;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M2 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M2;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M3 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M3;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M4 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M4;
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1M5 minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M5;
and
(M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular
Interest LT1ZZ minus the Marker Rate, applied to an amount equal to
the
Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1ZZ.
Paying
Agent: As defined in Section 9.13.
Percentage Interest: As to any Certificate (other than a Class
CE
and Class R Certificate), the percentage obtained by dividing the
initial
Certificate Balance of such Certificate by the Initial Class
Certificate Balance
of the Class of which such Certificate is a part. With respect to a
Class CE
Certificate, the portion of the Class evidenced thereby, expressed
as a
percentage, as stated on the face of such Certificate; provided,
however, that
the sum of all such percentages for each such Class totals 100%.
With respect to
a Residual Certificate, 100%.
Periodic Advance: The payment required to be made by the
Servicer
with respect to any Distribution Date pursuant to Section 3.20, the
amount of
any such payment being equal to the aggregate of Monthly Payments
(net of the
Servicing Fee) on the Mortgage Loans (including any REO Property)
that were due
on the related Due Date and not received as of the close of
business on the
related Determination Date, less the aggregate amount of any such
delinquent
payments that the Servicer has determined would constitute a
Nonrecoverable
Advance if advanced.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States, Freddie Mac, Fannie Mae or any agency or
instrumentality of the United States when such obligations are
backed by the full faith and credit of the United States;
provided
that such obligations of Freddie Mac or Fannie Mae shall be
limited
to senior debt obligations and mortgage participation
certificates
other than investments in mortgage-backed or mortgage
participation
securities with yields evidencing extreme sensitivity to the rate
of
principal payments on the underlying mortgages, which shall not
constitute Permitted Investments hereunder;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of
acquisition
thereof with a corporation incorporated under the laws of the
United
States or any state thereof rated not lower than "P-1" by
Moody's
and "A-1" by S&P;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have
an
original maturity of not more than 90 days and, in the case of
bankers' acceptances, shall in no event have an original maturity
of
more than 365 days or a remaining maturity of more than 30
days)
denominated in United States dollars of any U.S. depository
institution or trust company incorporated under the laws of the
United States or any state thereof, rated not lower than "P-1"
by
Moody's and "A-1" by S&P;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of
the
United States or any state thereof which is rated not lower
than
"P-1" by Moody's and "A-1" by S&P;
(v) investments in money market funds (including funds of the
Trustee or its affiliates, or funds for which an affiliate of
the
Trustee acts as advisor, as well as funds for which the Trustee
and
its affiliates may receive compensation) rated "Aaa" by
Moody's,
either "AAAm" or "AAAm G" by S&P or otherwise approved in
writing by
each Rating Agency; and
(vi) other obligations or securities that are acceptable to
each Rating Agency and, as evidenced by an Opinion of Counsel
obtained by the Servicer, will not affect the qualification of
the
Trust Estate as two separate REMICs;
provided, however, that no instrument shall be a Permitted
Investment if it
represents either (a) the right to receive only interest payments
with respect
to the underlying debt instrument or (b) the right to receive both
principal and
interest payments derived from obligations underlying such
instrument and the
principal and interest with respect to such instrument provide a
yield to
maturity greater than 120% of the yield to maturity at par of such
underlying
obligations.
Permitted Transferee: Any Person other than (i) the United
States,
or any State or any political subdivision thereof, or any agency
or
instrumentality of any of the foregoing, (ii) a foreign
government,
international organization or any agency or instrumentality of
either of the
foregoing, (iii) an organization which is exempt from tax imposed
by Chapter 1
of the Code (including the tax imposed by Section 511 of the Code
on unrelated
business taxable income) (except certain farmers' cooperatives
described in Code
Section 521), (iv) rural electric and telephone cooperatives
described in Code
Section 1381(a)(2)(C), (v) a Person with respect to whom the income
on the
Residual Certificate is allocable to a foreign permanent
establishment or fixed
base, within the meaning of an applicable income tax treaty, of
such Person or
any other Person, and (vi) any other Person so designated by the
Servicer based
on an Opinion of Counsel to the effect that any transfer to such
Person may
cause the Trust or any other Holder of the Residual Certificate to
incur tax
liability that would not be imposed other than on account of such
transfer. The
terms "United States," "State" and "international organization"
shall have the
meanings set forth in Code Section 7701 or successor
provisions.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Physical Certificates: The Class CE and Class R Certificates.
Plan: As defined in Section 6.02(e).
Pool Cap: For any Distribution Date and for the Offered
Certificates, a per annum rate equal to the weighted average of the
Net Mortgage
Interest Rates for the Mortgage Loans, weighted on the basis of the
Stated
Principal Balances of the Mortgage Loans as of the first day of the
related
Collection Period.
Prepayment Interest Shortfall: As to any Distribution Date and
each
Mortgage Loan subject to a Principal Prepayment received during the
calendar
month preceding such Distribution Date, the amount, if any, by
which one month's
interest at the related Mortgage Interest Rate (net of the
Servicing Fee) on
such Principal Prepayment exceeds the amount of interest paid in
connection with
such Principal Prepayment.
Principal
Distribution Amount: As to any Distribution Date, the sum
of (i) the Principal Remittance Amount minus the
Overcollateralization Release
Amount, if any, and (ii) the Extra Principal Distribution Amount,
if any.
Principal Remittance Amount: As of any Distribution Date, the
sum
(less amounts available for reimbursement to the Servicer of
Advances and
expenses pursuant to this Agreement and amounts reimbursable or
payable to the
Trustee and Servicer pursuant to this Agreement) of:
(i) the principal portion of the Monthly Payment on a Mortgage
Loan
and all Periodic Advances with respect to the related Collection
Period received
by the Servicer on or prior to the related Determination Date (or
in the case of
any Monthly Covered Amount, the related Remittance Date);
(ii) the principal portion of all Liquidation Proceeds (net of
expenses) received on the Mortgage Loans during the preceding
calendar month and
deposited to the Servicer Custodial Account pursuant to Section
3.08(b)(iii);
(iii) the portion of all Principal Prepayments (other than
Total
Covered Amounts) relating to principal received on the Mortgage
Loans during the
month preceding the month of such Distribution Date and deposited
to the
Servicer Custodial Account pursuant to Section 3.08(b)(i) during
such period and
all Total Covered Amounts received and deposited in the Servicer
Custodial
Account by the related Remittance Date;
(iv) in connection with Defective Mortgage Loans, the principal
portion of the aggregate of the Repurchase Prices and Substitution
Adjustment
Amounts received during the calendar month preceding the month of
that
Distribution Date;
(v) any Recoveries with respect to such Distribution Date; and
(vi) on the Distribution Date on which the Mortgage Loans and
related REO Property are purchased in accordance with Section 10.01
hereof, that
portion of the purchase price therefor in respect of principal with
respect to
such Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage
guaranty
insurance or any replacement policy therefor with respect to any
Mortgage Loan,
in each case issued by an insurer acceptable to Fannie Mae or
Freddie Mac.
Principal Prepayment: Any payment or other recovery of principal
on
a Mortgage Loan (other than Liquidation Proceeds) which is received
in advance
of its scheduled Due Date and is not accompanied by an amount of
interest
representing scheduled interest due on any date or dates in any
month or months
subsequent to the month of prepayment, including the principal
portion of any
Total Covered Amount.
Principal Prepayment in Full: Any Principal Prepayment of the
entire
principal balance of a Mortgage Loan.
Priority Amount: For any Distribution Date the lesser of (i)
the
Class Certificate Balance of the Class A-6 Certificates and (ii)
the product of
(a) the Priority Percentage, (b) the Shift Percentage and (c) the
Senior
Principal Distribution Amount.
Priority Percentage: For any Distribution Date (i) the Class
Certificate Balance of the Class A-6 Certificates divided by (ii)
the sum of the
Class Certificate Balances of the Senior Certificates.
Private Certificates: The Class CE and Class R Certificates.
Qualified Appraiser: An appraiser of a Mortgaged Property duly
appointed by the originator of the related Mortgage Loan, who had
no interest,
direct or indirect, in such Mortgaged Property or in any loan made
on the
security thereof, whose compensation is not affected by the
approval or
disapproval of the related Mortgage Loan and who met the minimum
qualifications
of Fannie Mae or Freddie Mac.
Rating Agency: Each of S&P and Moody's. If either such
organization
or a successor is no longer in existence, "Rating Agency" shall be
such
nationally recognized statistical rating organization, or other
comparable
Person, as is designated by the Depositor, notice of which
designation shall be
given to the Trustee. References herein to a given rating or rating
category of
a Rating Agency shall mean such rating category without giving
effect to any
modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an
amount as of the date of such liquidation, equal to (i) the unpaid
principal
balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus
(ii) interest at the Net Mortgage Interest Rate from the Due Date
as to which
interest was last paid or advanced (and not reimbursed) to
Certificateholders up
to the Due Date in the month in which Liquidation Proceeds are
required to be
distributed on the Stated Principal Balance of such Liquidated
Mortgage Loan
from time to time, minus (iii) the Liquidation Proceeds, if any,
received during
the month in which such liquidation occurred, to the extent applied
as
recoveries of interest at the Net Mortgage Interest Rate and to
principal of the
Liquidated Mortgage Loan. With respect to each Mortgage Loan that
has become the
subject of a Deficient Valuation, if the principal amount due under
the related
Mortgage Note has been reduced, the difference between the
principal balance of
the Mortgage Loan outstanding immediately prior to such Deficient
Valuation and
the principal balance of the Mortgage Loan as reduced by the
Deficient
Valuation. With respect to each Mortgage Loan that has become the
subject of a
Debt Service Reduction and any Distribution Date, the amount, if
any, by which
the principal portion of the related Monthly Payment has been
reduced.
Realized Loss Amortization Amount: Any of the Class M-1
Realized
Loss Amortization Amount, the Class M-2 Realized Loss Amortization
Amount, the
Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized
Loss
Amortization Amount and the Class M-5 Realized Loss Amortization
Amount.
Record Date: The last day of the month (or, if such day is not
a
Business Day, the preceding Business Day) preceding the month in
which the
related Distribution Date occurs.
Recovery: Any amount (net of reimbursable expenses) received on
a
Mortgage Loan subsequent to such Mortgage Loan being determined to
be a
Liquidated Mortgage Loan that resulted in a Realized Loss in a
prior month.
Refinance Mortgage Loan: Any Mortgage Loan the proceeds of
which
were not used to purchase the related Mortgaged Property.
Regular Certificates: Any of the Offered Certificates and the
Class
CE Certificates.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended from
time to time, and subject to such clarification and interpretation
as have been
provided by the Securities and Exchange 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 Securities and
Exchange
Commission, or as may be provided by the Securities and Exchange
Commission or
its staff from time to time.
Reimbursement Amount: As defined in Section 2.04.
Relevant Servicing Criteria: The Servicing Criteria applicable
to
the various parties, as set forth on Exhibit Q attached hereto.
For
clarification purposes, multiple parties can have responsibility
for the same
Relevant Servicing Criteria. With respect to a Servicing Function
Participant
engaged by the Trustee or the Servicer, the term "Relevant
Servicing Criteria"
may refer to a portion of the Relevant Servicing Criteria
applicable to the
Servicer or the Trustee.
Relief Act: The Servicemembers Civil Relief Act, as it may be
amended from time to time.
Relief Act Reduction: With respect to any Distribution Date, for
any
Mortgage Loan as to which there has been a reduction in the amount
of interest
collectible thereon for the most recently ended calendar month as a
result of
the application of the Relief Act or comparable state legislation,
the amount,
if any, by which (i) interest collectible on such Mortgage Loan for
the most
recently ended calendar month is less than (ii) interest accrued
pursuant to the
terms of the Mortgage Note on the same principal amount and for the
same period
as the interest collectible on such Mortgage Loan for the most
recently ended
calendar month.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC 1 Interest Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of
the sum of
the aggregate Principal Balance of the Mortgage Loans and related
REO Properties
then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through
Rate for REMIC
1 Regular Interest LT1AA minus the Marker Rate, divided by (b)
12.
REMIC 1 Marker Allocation Percentage: 50% of any amount payable
from
or loss attributable to the Mortgage Loans, which shall be
allocated to REMIC 1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1A4, REMIC 1
Regular Interest LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1
Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1
Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5 and REMIC 1
Regular
Interest LT1ZZ.
REMIC 1 Overcollateralization Target Amount: 0.50% of the
Targeted
Overcollateralization Amount.
REMIC 1 Overcollateralized Amount: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal
Balances of
the REMIC 1 Regular Interests minus (ii) the aggregate of the
Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1A4, REMIC 1
Regular Interest LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1
Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1
Regular Interest LT1M4 and REMIC 1 Regular Interest LT1M5, in each
case as of
such date of determination.
REMIC 1 Principal Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of
the
aggregate Principal Balance of the Mortgage Loans and related REO
Properties
then outstanding and (ii) 1 minus a fraction, the numerator of
which is two
times the aggregate of the Uncertificated Principal Balances of
REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3,
REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest LT1A5,
REMIC 1 Regular
Interest LT1A6, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2,
REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4 and
REMIC 1
Regular Interest LT1M5 and the denominator of which is the
aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1A1, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest
LT1A4, REMIC 1 Regular Interest LT1A5, REMIC 1 Regular Interest
LT1A6, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest
LT1M5 and REMIC
1 Regular Interest LT1ZZ.
REMIC 1 Regular Interest LT1AA: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1AA shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1A1: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A1 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1A2: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A2 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance asset forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1A3: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A3 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance asset forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1A4: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A4 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance asset forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1A5: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A5 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance asset forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1A6: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A6 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance asset forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1M1: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M1 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1M2: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M2 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1M3: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M3 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1M4: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M4 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1M5: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M5 shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1XX: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1XX shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interest LT1ZZ: One of the separate
non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and
designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1ZZ shall
accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC 1 Regular Interests: REMIC 1 Regular Interest LT1AA, REMIC
1
Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1
Regular Interest
LT1A3, REMIC 1 Regular Interest LT1A4, REMIC 1 Regular Interest
LT1A5, REMIC 1
Regular Interest LT1A6, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular Interest LT1XX and REMIC 1
Regular
Interest LT1ZZ.
REMIC 1 Sub WAC Allocation Percentage: 50% of any amount payable
or
loss attributable from the Mortgage Loans, which shall be allocated
to REMIC 1
Regular Interest LT1XX.
REMIC Regular Interest: Any REMIC 1 Regular Interest or any of
the
Certificates (other than the Class R Certificate).
REMIC Certificate Maturity Date: The "latest possible maturity
date"
of the Regular Certificates as that term is defined in Section
2.07.
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 promulgated thereunder, as the foregoing may be in
effect from
time to time, as well as provisions of applicable state laws.
Remittance Date: As to any Distribution Date, by 2:00 p.m.
Eastern
time on the Business Day immediately preceding such Distribution
Date.
REO Disposition Period: As defined in Section 3.14.
REO Proceeds: Proceeds, net of any related expenses of the
Servicer,
received in respect of any REO Property (including, without
limitation, proceeds
from the rental of the related Mortgaged Property) which are
received prior to
the final liquidation of such Mortgaged Property.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure in
connection with a defaulted Mortgage Loan.
Reportable Event: As defined in Section 3.22(d).
Repurchase Price: As to any Defective Mortgage Loan repurchased
on
any date pursuant to Section 2.02 or 2.04, an amount equal to the
sum of (i) the
unpaid principal balance thereof and (ii) the unpaid accrued
interest thereon at
the applicable Mortgage Interest Rate from the Due Date to which
interest was
last paid by the Mortgagor to the first day of the month following
the month in
which such Mortgage Loan became eligible to be repurchased.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee or the Custodian on behalf of the Trustee,
substantially
in the form of Exhibit E.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy which is required to be maintained from time to
time under this
Agreement in respect of such Mortgage Loan.
Residual Certificate: The Class R Certificate.
Responsible Officer: When used with respect to the Trustee, any
officer of the Corporate Trust Department of the Trustee, including
any Senior
Vice President, any Vice President, any Assistant Vice President,
any Assistant
Secretary, any Trust Officer or Assistant Trust Officer, or any
other officer of
the Trustee customarily performing functions similar to those
performed by any
of the above designated officers and having responsibility for
the
administration of this Agreement.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies,
Inc., or any successor thereto.
Seller: Bank of America, a national banking association, or its
successor in interest, as seller of the Mortgage Loans under the
Mortgage Loan
Purchase Agreement.
Senior Certificates: The Class A-1, Class A-2, Class A-3, Class
A-4,
Class A-5 and Class A-6 Certificates.
Senior Enhancement Percentage: For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate
Class
Certificate Balance of the Subordinate Certificates before taking
into account
the distribution of the Principal Distribution Amount on such
Distribution Date
and (ii) the Overcollateralization Amount after taking into account
the
distribution of the Principal Distribution Amount as of the prior
Distribution
Date by (y) the aggregate Stated Principal Balance of the Mortgage
Loans as of
the last day of the related Collection Period after giving effect
to Principal
Prepayments received during the calendar month preceding the month
of that
Distribution Date.
Senior Principal Distribution Amount: With respect to any
Distribution Date (i) before the Stepdown Date or as to which a
Trigger Event is
in effect, the Principal Distribution Amount and (ii) on or after
the Stepdown
Date and as long as a Trigger Event is not in effect, the excess of
(a) the
Class Certificate Balance of the Senior Certificates immediately
prior to that
Distribution Date over (b) the lesser of (x) the product of (1)
91.10% and (2)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day
of the related Collection Period after giving effect to Principal
Prepayments
received during the calendar month preceding the month of that
Distribution Date
and (y) the amount by which the aggregate Stated Principal Balance
of the
Mortgage Loans as of the last day of the related Collection Period
after giving
effect to Principal Prepayments received during the calendar month
preceding the
month of that Distribution Date exceeds the product of (1) 0.50%
and (2) the
aggregate Stated Principal Balance of the Mortgage Loans on the
Cut-off Date.
Servicer: Bank of America, a national banking association, or
its
successor in interest, in its capacity as servicer of the Mortgage
Loans, or any
successor servicer appointed as herein provided.
Servicer Advance Date: As to any Distribution Date, 11:30 a.m.,
Eastern time, on the Business Day immediately preceding such
Distribution Date.
Servicer Custodial Account: The separate Eligible Account or
Accounts created and maintained by the Servicer pursuant to Section
3.08(b).
Servicer Custodial Account Reinvestment Income: For each
Distribution Date, all income and gains net of any losses realized
since the
preceding Distribution Date from Permitted Investments of funds in
the Servicer
Custodial Account.
Servicer's Certificate: The monthly report required by Section
4.01.
Servicing Advances: All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred in the performance by the
Servicer of its
servicing obligations, including, but not limited to (i) the
preservation,
restoration and protection of a Mortgaged Property, (ii) expenses
reimbursable
to the Servicer pursuant to Section 3.14 and any enforcement or
judicial
proceedings, including foreclosures, (iii) the management and
liquidation of any
REO Property and (iv) compliance with the obligations under Section
3.12.
Servicing Compensation: With respect to each Distribution Date,
the
sum of (i) the aggregate Servicing Fee for such Distribution Date
subject to
reduction as provided in Section 3.17, (ii) any Ancillary Income,
(iii) Excess
Proceeds for the preceding month and (iv) the Servicer Custodial
Account
Reinvestment Income for such Distribution Date.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time,
which as of
the Closing Date are listed on Exhibit Q hereto.
Servicing Fee: With respect to each Mortgage Loan and
Distribution
Date, the amount of the fee payable to the Servicer, which shall,
for such
Distribution Date, be equal to one-twelfth of the product of the
Servicing Fee
Rate with respect to such Mortgage Loan and the Stated Principal
Balance of such
Mortgage Loan. Such fee shall be payable monthly, computed on the
basis of the
same Stated Principal Balance and period respecting which any
related interest
payment on a Mortgage Loan is computed. The Servicer's right to
receive the
Servicing Fee is limited to, and payable solely from, the interest
portion
(including recoveries with respect to interest from Liquidation
Proceeds and
other proceeds, to the extent permitted by Section 3.11) of related
Monthly
Payments collected by the Servicer, or as otherwise provided under
Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.250%
per
annum.
Servicing File: The items pertaining to a particular Mortgage
Loan
referred to in Exhibit J hereto, and any additional documents
required to be
added to the Servicing File pursuant to the Agreement.
Servicing Function Participant: Any affiliate, third party vendor
or
Subservicer engaged by the Servicer or the Trustee that is
participating in the
servicing function with respect to the Mortgage Loans, within the
meaning of
Item 1122 of Regulation AB.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name appears on a list of servicing officers furnished to the
Trustee by the
Servicer, as such list may from time to time be amended.
Servicing Transfer Costs: All reasonable costs and expenses
incurred
by the Trustee in connection with the transfer of servicing from a
predecessor
servicer, including, without limitation, any costs or expenses
associated with
the complete transfer of all servicing data and the completion,
correction or
manipulation of such servicing data as may be required by the
Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to
enable the
Trustee to service the Mortgage Loans properly and effectively.
Shift Percentage: As to any Distribution Date, the percentage
indicated below:
Distribution Date Occurring In
Shift Percentage
---------------------------------------------------------
October 2006 through
September 2009.................
0%
October 2009 through
September 2011.................
45%
October 2011 through
September 2012.................
80%
October 2012 through
September
2013................. 100%
October 2013 and thereafter......
300%
Similar Law: As
defined in Section 6.02(e).
Sponsor: Bank of America, National Association.
Stated Principal Balance: As to any Mortgage Loan and date, the
unpaid principal balance of such Mortgage Loan as of the specified
Due Date or,
if not specified, as of the Due Date immediately preceding such
date as
specified in the amortization schedule at the time relating thereto
(before any
adjustment to such amortization schedule by reason of any
moratorium or similar
waiver or grace period) after giving effect to any previous partial
Principal
Prepayments and Liquidation Proceeds allocable to principal (other
than with
respect to any Liquidated Mortgage Loan) and to the payment of
principal due on
such Due Date and irrespective of any delinquency in payment by the
related
Mortgagor, and after giving effect to any Deficient Valuation.
Stepdown Date: The earlier to occur of (i) the Distribution
Date
following the Distribution Date on which the aggregate Class
Certificate Balance
of the Senior Certificates is reduced to zero and (ii) the later to
occur of (x)
the Distribution Date in October 2009 and (y) the Distribution Date
on which the
Senior Enhancement Percentage is greater than or equal to
8.90%.
Subordinate Certificates: The Class M, Class CE and Class R
Certificates.
Subordination Depletion Date: The date on which the aggregate
Class
Certificate Balance of the Class M Certificates is reduced to
zero.
Subservicer: Any Person with which the Servicer has entered into
a
Subservicing Agreement and which satisfies the requirements set
forth therein.
Subservicing Agreement: Any subservicing agreement (which, in
the
event the Subservicer is an affiliate of the Servicer, need not be
in writing)
between the Servicer and any Subservicer relating to servicing
and/or
administration of certain Mortgage Loans as provided in Section
3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted for a
Defective Mortgage Loan which must, on the date of such
substitution (i) have a
Stated Principal Balance, after deduction of the principal portion
of the
Monthly Payment due in the month of substitution, not in excess of,
and not more
than 10% less than, the Stated Principal Balance of the Defective
Mortgage Loan;
(ii) have a Net Mortgage Interest Rate equal to that of the
Defective Mortgage
Loan; (iii) have a Loan-to-Value Ratio not higher than that of the
Defective
Mortgage Loan; (iv) have a remaining term to maturity not greater
than (and not
more than one year less than) that of the Defective Mortgage Loan;
and (v)
comply with each Mortgage Loan representation and warranty set
forth in this
Agreement relating to the Defective Mortgage Loan. More than one
Substitute
Mortgage Loan may be substituted for a Defective Mortgage Loan if
such
Substitute Mortgage Loans meet the foregoing attributes in the
aggregate.
Substitution Adjustment Amount: As defined in Section 2.02.
Targeted Overcollateralization Amount: As of any Distribution
Date,
(x) prior to the Stepdown Date, 0.50% of the aggregate Stated
Principal Balance
of the Mortgage Loans as of the Cut-off Date and (y) on and after
the Stepdown
Date, (i) if a Trigger Event has not occurred, the greater of (a)
1.00% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of
the related Collection Period and (b) 0.50% of the aggregate Stated
Principal
Balance of the Mortgage Loans as of the Cut-off Date and (ii) if a
Trigger Event
has occurred, the Targeted Overcollateralization Amount for the
immediately
preceding Distribution Date.
Tax Matters Person: Any person designated as "tax matters person"
in
accordance with Section 5.06 and the manner provided under Treasury
Regulation
ss. 1.860F-4(d) and Treasury Regulation ss. 301.6231(a)(7)-1.
Total Covered Amount: As defined in the Mortgage Loan Purchase
Agreement.
Treasury Regulations: The final and temporary regulations
promulgated under the Code by the U.S. Department of the
Treasury.
Trigger Event: A Trigger Event has occurred on a Distribution
Date
if (i) the three-month rolling average of 60+ Day Delinquent Loans
(as a
percentage of the Stated Principal Balance of the Mortgage Loans as
of the last
day of the related Collection Period) equals or exceeds 50% of the
Senior
Enhancement Percentage or (ii) the aggregate amount of Realized
Losses on the
Mortgage Loans incurred since the Cut-off Date through the last day
of the
related Collection Period (reduced by the aggregate amount of
Recoveries
received since the Cut-off Date through the last day of the related
Collection
Period) divided by the aggregate Stated Principal Balance of the
Mortgage Loans
as of the Cut-off Date exceeds the applicable percentages set forth
below with
respect to such Distribution Date:
Distribution Date
Occurring In
Percentage
------------------------------
----------------------------------
October 2008 through September 2009
0.15% for the first month, plus an
additional 1/12th of
0.20% for
each month thereafter
October 2009 through September 2010
0.35% for the first month, plus an
additional 1/12th of
0.30% for
each month thereafter
October 2010 through September 2011
0.65% for the first month, plus an
additional 1/12th of
0.25% for
each month thereafter
October 2011 through September 2012
0.90% for the first month, plus an
additional 1/12th of
0.15% for
each month thereafter
October 2012 and thereafter
1.05%
Trust: The trust created by this Agreement.
Trust Estate: The corpus of the Trust created to the extent
described herein, consisting of the Mortgage Loans, such assets as
shall from
time to time be identified as deposited in the Servicer Custodial
Account, the
Certificate Account or the Cap Carryover Reserve Account, in
accordance with
this Agreement, REO Property, the Primary Insurance Policies, any
other Required
Insurance Policy, the right to receive any BPP Mortgage Loan
Payment.
Trustee: Wells Fargo Bank, N.A., and any successors-in-interest
and,
if a successor trustee is appointed hereunder, such successor, as
trustee.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the aggregate
Stated Principal
Balance of the Mortgage Loans as of the Due Date in the month
preceding the
month in which such Distribution Date occurs.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.00325%
per
annum.
Uncertificated Accrued Interest: With respect to each REMIC 1
Regular Interest on each Distribution Date, an amount equal to one
month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on
the
Uncertificated Principal Balance of such REMIC Regular
Interest.
Uncertificated Principal Balance: The amount of any REMIC 1
Regular
Interest outstanding as of any date of determination. As of the
Closing Date,
the Uncertificated Balance of each REMIC 1 Regular Interest shall
equal the
principal amount set forth in the Preliminary Statement hereto as
its initial
uncertificated balance. On each Distribution Date, the
Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall be reduced by all
distributions
of principal made on such REMIC 1 Regular Interest on such
Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and
appropriate,
shall be further reduced on such Distribution Date by Realized
Losses as
provided in Section 5.11(b). The Uncertificated Balance of REMIC 1
Regular
Interest LT1ZZ shall be increased by interest deferrals as provided
in Section
5.11. The Uncertificated Balance of each REMIC 1 Regular Interest
shall never be
less than zero.
Uncertificated REMIC 1 Pass-Through Rate: With respect to REMIC
1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1A4, REMIC 1
Regular Interest LT1A5, REMIC 1 Regular Interest LT1A6, REMIC 1
Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1
Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1
Regular Interest
LT1ZZ and REMIC 1 Regular Interest LT1XX, the weighted average of
the Net
Mortgage Interest Rates for the Mortgage Loans, weighted on the
basis of the
Stated Principal Balances of the Mortgage Loans as of the first day
of the
related Collection Period.
Underwriting Guidelines: The underwriting guidelines of Bank of
America.
Unpaid Realized Loss Amount: For any of the Class M-1, Class
M-2,
Class M-3, Class M-4 and Class M-5 Certificates and as to any
Distribution Date,
the excess of (x) the aggregate Applied Realized Loss Amounts
allocated to such
Class for all prior Distribution Dates over (y) the sum of (a) the
aggregate
amount of any Recoveries allocated to such Class and (b) the
aggregate Realized
Loss Amortization Amounts with respect to such Class for all prior
Distribution
Dates.
U.S. Person: A citizen or resident of the United States, a
corporation or partnership (unless, in the case of a partnership,
Treasury
Regulations are adopted that provide otherwise) created or
organized in or under
the laws of the United States, any state thereof or the District of
Columbia,
including an entity treated as a corporation or partnership for
federal income
tax purposes, an estate whose income is subject to United States
federal income
tax regardless of its source, or a trust if a court within the
United States is
able to exercise primary supervision over the administration of
such trust, and
one or more such U.S. Persons have the authority to control all
substantial
decisions of such trust (or, to the extent provided in applicable
Treasury
Regulations, certain trusts in existence on August 20, 1996 which
are eligible
to elect to be treated as U.S. Persons).
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 Holders of
the Class CE Certificates, (b) 1% of all Voting Rights shall be
allocated to the
Holder of the Residual Certificate and (c) the remaining Voting
Rights shall be
allocated among Holders of the remaining Classes of Certificates in
proportion
to the Certificate Balances of their respective Certificates on
such date.
Section 1.02 Interest Calculations. All calculations of
interest
will be made on a 360-day year consisting of twelve 30-day months.
All dollar
amounts calculated hereunder shall be rounded to the nearest penny
with one-half
of one penny being rounded down.
Section 1.03 Fiscal Year. The fiscal year of the Trust will be
the
calendar year.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee on behalf
of the Trust
for the benefit of the Certificateholders, without recourse, all
the right,
title and interest of the Depositor in and to the Mortgage Loans,
including all
interest and principal received on or with respect to the Mortgage
Loans (other
than payments of principal and interest due and payable on the
Mortgage Loans on
or before the Cut-off Date). The foregoing sale, transfer,
assignment and set
over does not and is not intended to result in a creation of an
assumption by
the Trustee of any obligation of the Depositor or any other Person
in connection
with the Mortgage Loans or any agreement or instrument relating
thereto, except
as specifically set forth herein. In addition, the Depositor,
concurrently with
the execution and delivery hereof, hereby sells, transfers,
assigns, sets over
and otherwise conveys to the Trustee on behalf of the Trust for the
benefit of
the Certificateholders, without recourse, the Depositor's rights to
receive any
BPP Mortgage Loan Payment. It is agreed and understood by the
parties hereto
that it is not intended that any mortgage loan be included in the
Trust that is
a "High-Cost Home Loan" as defined in any of (i) the New Jersey
Home Ownership
Act effective November 27, 2003, (ii) the New Mexico Home Loan
Protection Act
effective January 1, 2004, (iii) the Massachusetts Predatory Home
Loan Practices
Act effective November 7, 2004 or (iv) the Indiana Home Loan
Practices Act,
effective January 1, 2005.
(b) In connection with such transfer and assignment, the
Depositor
shall deliver or
cause to be delivered to the Trustee, for the benefit of the
Certificateholders, the following documents or instruments with
respect to
each Mortgage
Loan so assigned:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature
in the following form: "Pay to the order of Wells Fargo Bank,
N.A., as trustee
for the holders of the Banc of America Alternative Loan
Trust
2006-7 Mortgage Pass-Through Certificates, Series 2006-7,
without
recourse,"
with all necessary intervening endorsements showing a complete
chain of
endorsement from the originator to the Trustee (each such
endorsement being sufficient to transfer all right, title and
interest of
the party
so endorsing, as noteholder or assignee thereof, in and to that
Mortgage
Note);
(ii) except as provided below, the original recorded Mortgage
with
evidence
of a recording thereon, or if any such Mortgage has not been
returned
from the applicable recording office or has been lost, or if
such
public
recording office retains the original recorded Mortgage, a copy
of
such
Mortgage certified by the Depositor as being a true and correct
copy
of the
Mortgage;
(iii) subject to the provisos at the end of this paragraph, a
duly
executed
Assignment of Mortgage to "Wells Fargo Bank, N.A., as trustee
for
the
holders of the Banc of America Alternative Loan Trust 2006-7
Mortgage
Pass-Through Certificates, Series 2006-7" (which may be included in
a
blanket
assignment or assignments), together with, except as provided
below,
originals of all interim recorded assignments of such mortgage or
a
copy of
such interim assignment certified by the Depositor as being a
true
and
complete copy of the original recorded intervening assignments
of
Mortgage
(each such assignment, when duly and validly completed, to be
in
recordable
form and sufficient to effect the assignment of and transfer to
the
assignee thereof, under the Mortgage to which the assignment
relates);
provided
that, if the related Mortgage has not been returned from the
applicable
public recording office, such Assignment of Mortgage may
exclude
the information to be provided by the recording office; and
provided,
further, if the related Mortgage has been recorded in the name
of
Mortgage Electronic Registration Systems, Inc. ("MERS") or its
designee,
no Assignment of Mortgage in favor of the Trustee will be
required
to be prepared or delivered and instead, the Servicer shall
take
all
actions as are necessary to cause the Trust to be shown as the
owner
of the
related Mortgage Loan on the records of MERS for purposes of
the
system of
recording transfers of beneficial ownership of mortgages
maintained
by MERS;
(iv) the originals of all assumption, modification, consolidation
or
extension
agreements, if any, with evidence of recording thereon, if any;
(v) any of (A) the original or duplicate original mortgagee
title
insurance
policy and all riders thereto, (B) a title search showing no
lien
(other than standard exceptions of the type described in Section
2.04
(viii)) on
the Mortgaged Property senior to the lien of the Mortgage or
(C) an
opinion of counsel of the type customarily rendered in the
applicable
jurisdiction in lieu of a title insurance policy;
(vi) the original of any guarantee executed in connection with
the
Mortgage
Note;
(vii) for each Mortgage Loan, if any, which is secured by a
residential long-term lease, a copy of the lease with evidence
of
recording
indicated thereon, or, if the lease is in the process of being
recorded,
a photocopy of the lease, certified by an officer of the
respective prior
owner of such Mortgage Loan or by the applicable title
insurance
company, closing/settlement/escrow agent or company or closing
attorney
to be a true and correct copy of the lease transmitted for
recordation;
(viii) the original of any security agreement, chattel mortgage
or
equivalent
document executed in connection with the Mortgage; and
(ix) for each Mortgage Loan secured by Co-op Shares, the
originals
of the
following documents or instruments:
(A) The stock certificate;
(B) The stock power executed in blank;
(C) The executed proprietary lease;
(D) The executed recognition agreement;
(E) The executed assignment of recognition agreement, if any;
(F) The executed UCC-1 financing statement with evidence of
recording thereon; and
(G) Executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law, evidencing a
complete and unbroken line from the mortgagee to the Trustee
with
evidence of recording thereon (or in a form suitable for
recordation);
provided, however, that on the Closing Date, with respect to item
(iii), the
Depositor has delivered to the Trustee a copy of such Assignment of
Mortgage in
blank and has caused the Servicer to retain the completed
Assignment of Mortgage
for recording as described below, unless such Mortgage has been
recorded in the
name of MERS or its designee. In addition, if the Depositor is
unable to deliver
or cause the delivery of any original Mortgage Note due to the loss
of such
original Mortgage Note, the Depositor may deliver a copy of such
Mortgage Note,
together with a lost note affidavit, and shall thereby be deemed to
have
satisfied the document delivery requirements of this Section
2.01(b).
If in connection with any Mortgage Loans, the Depositor cannot
deliver (A) the Mortgage, (B) all interim recorded assignments, (C)
all
assumption, modification, consolidation or extension agreements, if
any, or (D)
the lender's title policy, if any, (together with all riders
thereto) satisfying
the requirements of clause (ii), (iii), (iv) or (v) above,
respectively,
concurrently with the execution and delivery hereof because such
document or
documents have not been returned from the applicable public
recording office in
the case of clause (ii), (iii) or (iv) above, or because the title
policy, if
any, has not been delivered to either the Servicer or the Depositor
by the
applicable title insurer in the case of clause (v) above, the
Depositor shall
promptly deliver or cause to be delivered to the Trustee or the
Custodian on
behalf of the Trustee, in the case of clause (ii), (iii) or (iv)
above, such
Mortgage, such interim assignment or such assumption,
modification,
consolidation or extension agreement, as the case may be, with
evidence of
recording indicated thereon upon receipt thereof from the public
recording
office, but in no event shall any such delivery of any such
documents or
instruments be made later than one year following the Closing Date,
unless, in
the case of clause (ii), (iii) or (iv) above, there has been a
continuing delay
at the applicable recording office or, in the case of clause (v),
there has been
a continuing delay at the applicable insurer and the Depositor has
delivered the
Officer's Certificate to such effect to the Trustee. The Depositor
shall forward
or cause to be forwarded to the Trustee (1) from time to time
additional
original documents evidencing an assumption or modification of a
Mortgage Loan
and (2) any other documents required to be delivered by the
Depositor or the
Servicer to the Trustee or the Custodian on the Trustee's behalf.
In the event
that the original Mortgage is not delivered and in connection with
the payment
in full of the related Mortgage Loan the public recording office
requires the
presentation of a "lost instruments affidavit and indemnity" or any
equivalent
document, because only a copy of the Mortgage can be delivered with
the
instrument of satisfaction or reconveyance, the Servicer shall
prepare, execute
and deliver or cause to be prepared, executed and delivered, on
behalf of the
Trust, such a document to the public recording office.
As promptly as practicable subsequent to such transfer and
assignment, and in any event, within 30 days thereafter, the
Servicer shall
(except for any Mortgage which has been recorded in the name of
MERS or its
designee) (I) cause each Assignment of Mortgage to be in proper
form for
recording in the appropriate public office for real property
records within 30
days of the Closing Date and (II) at the Depositor's expense, cause
to be
delivered for recording in the appropriate public office for real
property
records the Assignments of the Mortgages to the Trustee, except
that, with
respect to any Assignment of a Mortgage as to which the Servicer
has not
received the information required to prepare such assignment in
recordable form,
the Servicer's obligation to do so and to deliver the same for such
recording
shall be as soon as practicable after receipt of such information
and in any
event within 30 days after the receipt thereof and, no recording of
an
Assignment of Mortgage will be required in a state if either (i)
the Depositor
furnishes to the Trustee an unqualified Opinion of Counsel
reasonably acceptable
to the Trustee to the effect that recordation of such assignment is
not
necessary under applicable state law to preserve the Trustee's
interest in the
related Mortgage Loan against the claim of any subsequent
transferee of such
Mortgage Loan or any successor to, or creditor of, the Depositor or
the
originator of such Mortgage Loan or (ii) the recordation of an
Assignment of
Mortgage in such state is not required by either Rating Agency in
order to
obtain the initial ratings on the Certificates on the Closing Date.
Set forth on
Exhibit L attached hereto is a list of all states where recordation
is required
by either Rating Agency to obtain the initial ratings of the
Certificates. The
Trustee may rely and shall be protected in relying upon the
information
contained in such Exhibit L.
In the case of Mortgage Loans that have been prepaid in full as
of
the Closing Date, the Depositor, in lieu of delivering the above
documents to
the Trustee, or the Custodian on the Trustee's behalf, will cause
the Servicer
to deposit in the Servicer Custodial Account the portion of such
payment that is
required to be deposited in the Servicer Custodial Account pursuant
to Section
3.08.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
Subject to the provisions of the following paragraph, the Trustee
declares that
it, or the Custodian as its agent, will hold the documents referred
to in
Section 2.01 and the other documents delivered to it constituting
the Mortgage
Files, and that it will hold such other assets as are included in
the Trust
Estate, in trust for the exclusive use and benefit of all present
and future
Certificateholders. Upon execution and delivery of this document,
the Trustee
shall deliver or cause the Custodian to deliver to the Depositor,
the Trustee
and the Servicer a certification in the form of Exhibit M hereto
(the "Initial
Certification") to the effect that, except as may be specified in a
list of
exceptions attached thereto, it has received the original Mortgage
Note relating
to each of the Mortgage Loans listed on the Mortgage Loan
Schedule.
Within 90 days after the execution and delivery of this
Agreement,
the Trustee shall review, or cause the Custodian to review, the
Mortgage Files
in its possession, and shall deliver to the Depositor, the Trustee
and the
Servicer a certification in the form of Exhibit N hereto (the
"Final
Certification") to the effect that, as to each Mortgage Loan listed
in the
Mortgage Loan Schedule, except as may be specified in a list of
exceptions
attached to such Final Certification, such Mortgage File contains
all of the
items required to be delivered pursuant to Section 2.01(b).
If, in the course of such review, the Trustee or the Custodian
finds
any document constituting a part of a Mortgage File which does not
meet the
requirements of Section 2.01 or is omitted from such Mortgage File,
the Trustee
shall promptly so notify the Servicer and the Depositor, or shall
cause the
Custodian to promptly so notify the Servicer and the Depositor. In
performing
any such review, the Trustee or the Custodian may conclusively rely
on the
purported genuineness of any such document and any signature
thereon. It is
understood that the scope of the Trustee's or the Custodian's
review of the
Mortgage Files is limited solely to confirming that the documents
listed in
Section 2.01 have been received and further confirming that any and
all
documents delivered pursuant to Section 2.01 appear on their face
to have been
executed and relate to the Mortgage Loans identified in the
Mortgage Loan
Schedule based solely upon the review of items (i) and (xi) in the
definition of
Mortgage Loan Schedule. Neither the Trustee nor the Custodian shall
have any
responsibility for determining whether any document is valid and
binding,
whether the text of any assignment or endorsement is in proper or
recordable
form, whether any document has been recorded in accordance with the
requirements
of any applicable jurisdiction, or whether a blanket assignment is
permitted in
any applicable jurisdiction. The Depositor hereby covenants and
agrees that it
will promptly correct or cure such defect within 90 days from the
date it was so
notified of such defect and, if the Depositor does not correct or
cure such
defect within such period, the Depositor will either (a) substitute
for the
related Mortgage Loan a Substitute Mortgage Loan, which
substitution shall be
accomplished in the manner and subject to the conditions set forth
below or (b)
purchase such Mortgage Loan from the Trustee at the Repurchase
Price for such
Mortgage Loan; provided, however, that in no event shall such a
substitution
occur more than two years from the Closing Date; provided, further,
that such
substitution or repurchase shall occur within 90 days of when such
defect was
discovered if such defect will cause the Mortgage Loan not to be a
"qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code.
With respect to each Substitute Mortgage Loan the Depositor
shall
deliver to the Trustee, for the benefit of the Certificateholders,
the Mortgage
Note, the Mortgage, the related Assignment of Mortgage (except for
any Mortgage
which has been recorded in the name of MERS or its designee), and
such other
documents and agreements as are otherwise required by Section 2.01,
with the
Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No
substitution is permitted to be made in any calendar month after
the
Determination Date for such month. Monthly Payments due with
respect to any such
Substitute Mortgage Loan in the month of substitution shall not be
part of the
Trust Estate and will be retained by the Depositor. For the month
of
substitution, distributions to Certificateholders will include the
Monthly
Payment due for such month on any Defective Mortgage Loan for which
the
Depositor has substituted a Substitute Mortgage Loan.
The Servicer shall amend the Mortgage Loan Schedule for the
benefit
of the Certificateholders to reflect the removal of each Mortgage
Loan that has
become a Defective Mortgage Loan and the substitution of the
Substitute Mortgage
Loan or Loans and the Servicer shall deliver the amended Mortgage
Loan Schedule
to the Trustee and the Custodian. Upon such substitution, each
Substitute
Mortgage Loan shall be subject to the terms of this Agreement in
all respects,
and the Depositor shall be deemed to have made to the Trustee with
respect to
such Substitute Mortgage Loan, as of the date of substitution,
the
representations and warranties made pursuant to Section 2.04. Upon
any such
substitution and the deposit to the Servicer Custodial Account of
any required
Substitution Adjustment Amount (as described in the next paragraph)
and receipt
of a Request for Release, the Trustee shall release, or shall
direct the
Custodian to release, the Mortgage File relating to such Defective
Mortgage Loan
to the Depositor and shall execute and deliver at the Depositor's
direction such
instruments of transfer or assignment prepared by the Depositor, in
each case
without recourse, as shall be necessary to vest title in the
Depositor, or its
designee, to the Trustee's interest in any Defective Mortgage Loan
substituted
for pursuant to this Section 2.02.
For any month in which the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Defective Mortgage Loans,
the amount
(if any) by which the aggregate principal balance of all such
Substitute
Mortgage Loans as of the date of substitution is less than the
aggregate Stated
Principal Balance of all such Defective Mortgage Loans (after
application of the
principal portion of the Monthly Payments due in the month of
substitution) (the
"Substitution Adjustment Amount") plus an amount equal to the
aggregate of any
unreimbursed Advances with respect to such Defective Mortgage Loans
shall be
deposited into the Servicer Custodial Account by the Depositor on
or before the
Remittance Date for the Distribution Date in the month succeeding
the calendar
month during which the related Mortgage Loan is required to be
purchased or
replaced hereunder.
The Trustee shall retain or shall cause the Custodian to retain
possession and custody of each Mortgage File in accordance with and
subject to
the terms and conditions set forth herein. The Servicer shall
promptly deliver
to the Trustee, upon the execution or, in the case of documents
requiring
recording, receipt thereof, the originals of such other documents
or instruments
constituting the Mortgage File as come into the Servicer's
possession from time
to time.
It is understood and agreed that the obligation of the Depositor
to
substitute for or to purchase any Mortgage Loan which does not meet
the
requirements of Section 2.01 shall constitute the sole remedy
respecting such
defect available to the Trustee and any Certificateholder against
the Depositor.
The Trustee or the Custodian, on behalf of the Trustee, shall
be
under no duty or obligation (i) to inspect, review or examine any
such
documents, instruments, certificates or other papers to determine
that they are
genuine, enforceable, or appropriate for the represented purpose or
that they
are other than what they purport to be on their face or (ii) to
determine
whether any Mortgage File should include any of the documents
specified in
Section 2.01(b)(iv), (vi), (vii), (viii) and (ix). In connection
with making the
certifications required hereunder, to the extent a title search or
opinion of
counsel has been provided in lieu of a title policy for any
Mortgage Loan, the
Trustee shall only be responsible for confirming that a title
search or opinion
of counsel has been provided for such Mortgage Loan and shall not
be deemed to
have certified that the content of such title search or opinion of
counsel is
sufficient to meet the requirements of Section 2.01(b)(v).
Section 2.03 Representations and Warranties of the Servicer.
The
Servicer hereby makes the following representations and warranties
to the
Depositor and the Trustee, as of the Closing Date:
(i) The Servicer is a national banking association duly
organized,
validly
existing, and in good standing under the federal laws of the
United
States of America and has all licenses necessary to carry on
its
business
as now being conducted and is licensed, qualified and in good
standing
in each of the states where a Mortgaged Property is located if
the laws
of such state require licensing or qualification in order to
conduct
business of the type conducted by the Servicer. The Servicer
has
power and
authority to execute and deliver this Agreement and to perform
in
accordance herewith; the execution, delivery and performance of
this
Agreement
(including all instruments of transfer to be delivered pursuant
to this
Agreement) by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly
authorized.
This
Agreement, assuming due authorization, execution and delivery by
the
other
parties hereto, evidences the valid, binding and enforceable
obligation
of the Servicer, subject to applicable law except as
enforceability may be limited by (A) bankruptcy, insolvency,
liquidation,
receivership, moratorium, reorganization or other similar laws
affecting
the
enforcement of creditors' rights generally or creditors of
national
banks and
(B) general principles of equity, whether enforcement is sought
in a
proceeding in equity or at law. All requisite corporate action
has
been taken
by the Servicer to make this Agreement valid and binding upon
the
Servicer in accordance with its terms.
(ii) No consent, approval, authorization or order is required
for
the
transactions contemplated by this Agreement from any court,
governmental agency or body, or federal or state regulatory
authority
having
jurisdiction over the Servicer is required or, if required,
such
consent,
approval, authorization or order has been or will, prior to the
Closing
Date, be obtained.
(iii) The consummation of the transactions contemplated by this
Agreement
are in the ordinary course of business of the Servicer and will
not result
in the breach of any term or provision of the charter or
by-laws of
the Servicer or result in the breach of any term or provision
of, or
conflict with or constitute a default under or result in the
acceleration of any obligation under, any agreement, indenture or
loan or
credit
agreement or other instrument to which the Servicer or its
property
is
subject, or result in the violation of any law, rule,
regulation,
order,
judgment or decree to which the Servicer or its property is
subject.
(iv) There is no action, suit, proceeding or investigation
pending
or, to the
best knowledge of the Servicer, threatened against the Servicer
which,
either individually or in the aggregate, would result in any
material
adverse change in the business, operations, financial
condition,
properties
or assets of the Servicer, or in any material impairment of the
right or
ability of the Servicer to carry on its business substantially
as
now
conducted or which would draw into question the validity of
this
Agreement
or the Mortgage Loans or of any action taken or to be taken in
connection with
the obligations of the Servicer contemplated herein, or
which
would materially impair the ability of the Servicer to perform
under
the terms
of this Agreement.
The representations and warranties made pursuant to this
Section
2.03 shall survive delivery of the respective Mortgage Files to the
Trustee for
the benefit of the Certificateholders. Upon discovery by any of the
Depositor,
the Servicer or the Trustee of a breach of any of the
representations or
warranties set forth in this Section 2.03, the party discovering
such breach
shall give prompt written notice to the other parties.
Section 2.04 Representations and Warranties of the Depositor as
to
the Mortgage Loans. The Depositor hereby represents and warrants to
the Trustee
with respect to the Mortgage Loans or each Mortgage Loan, as the
case may be, as
of the date hereof or such other date set forth herein that as of
the Closing
Date:
(i) The information set forth in the Mortgage Loan Schedule is
true
and
correct in all material respects.
(ii) There are no delinquent taxes, ground rents, governmental
assessments, insurance premiums, leasehold payments, including
assessments
payable in
future installments or other outstanding charges affecting the
lien
priority of the related Mortgaged Property.
(iii) The terms of the Mortgage Note and the Mortgage have not
been
impaired,
waived, altered or modified in any respect, except by written
instruments,
recorded in the applicable public recording office if
necessary
to maintain the lien priority of the Mortgage, and which have
been
delivered to the Trustee; the substance of any such waiver,
alteration
or modification has been approved by the insurer under the
Primary
Insurance Policy, if any, the title insurer, to the extent
required
by the related policy, and is reflected on the Mortgage Loan
Schedule.
No instrument of waiver, alteration or modification has been
executed,
and no Mortgagor has been released, in whole or in part, except
in
connection with an assumption agreement approved by the insurer
under
the
Primary Insurance Policy, if any, the title insurer, to the
extent
required
by the policy, and which assumption agreement has been
delivered
to the
Trustee.
(iv) The Mortgage Note and the Mortgage are not subject to any
right
of
rescission, set-off, counterclaim or defense, including the defense
of
usury, nor will
the operation of any of the terms of the Mortgage Note and
the
Mortgage, or the exercise of any right thereunder, render either
the
Mortgage
Note or the Mortgage unenforceable, in whole or in part, or
subject to
any right of rescission, set-off, counterclaim or defense,
including
the defense of usury and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto.
(v) All buildings upon the Mortgaged Property are insured by an
insurer
generally acceptable to prudent mortgage lending institutions
against
loss by fire, hazards of extended coverage and such other
hazards
as are
customary in the area the Mortgaged Property is located,
pursuant
to
insurance policies conforming to the requirements of Customary
Servicing
Procedures and this Agreement. All such insurance policies
contain a
standard mortgagee clause naming the originator of the Mortgage
Loan, its
successors and assigns as mortgagee and all premiums thereon
have been
paid. If the Mortgaged Property is in an area identified on a
flood
hazard map or flood insurance rate map issued by the Federal
Emergency
Management Agency as having special flood hazards (and such
flood
insurance has been made available), a flood insurance policy
meeting
the
requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the
requirements of
Fannie Mae
or Freddie Mac. The Mortgage obligates the Mortgagor thereunder
to
maintain all such insurance at the Mortgagor's cost and expense,
and on
the
Mortgagor's failure to do so, authorizes the holder of the Mortgage
to
maintain
such insurance at Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
(vi) Any and all requirements of any federal, state or local
law
including,
without limitation, usury, truth in lending, real estate
settlement
procedures, consumer credit protections, all applicable
predatory
and abusive lending laws, equal credit opportunity or
disclosure
laws
applicable to the origination and servicing of Mortgage Loan
have
been
complied with.
(vii) The Mortgage has not been satisfied, canceled, subordinated
or
rescinded,
in whole or in part (other than as to Principal Prepayments in
full which
may have been received prior to the Closing Date), and the
Mortgaged
Property has not been released from the lien of the Mortgage,
in
whole or
in part, nor has any instrument been executed that would effect
any such
satisfaction, cancellation, subordination, rescission or
release.
(viii) The Mortgage is a valid, existing and enforceable first
lien
on the
Mortgaged Property, including all improvements on the Mortgaged
Property
subject only to (A) the lien of current real property taxes and
assessments not yet due and payable, (B) covenants, conditions
and
restrictions, rights of way, easements and other matters of the
public
record as
of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in the lender's
title
insurance
policy delivered to the originator of the Mortgage Loan and
which do
not adversely affect the Appraised Value of the Mortgaged
Property,
(C) if the Mortgaged Property consists of Co-op Shares, any
lien
for
amounts due to the cooperative housing corporation for unpaid
assessments or charges or any lien of any assignment of rents
or
maintenance expenses secured by the real property owned by the
cooperative
housing
corporation, and (D) other matters to which like properties are
commonly
subject which do not materially interfere with the benefits of
the
security intended to be provided by the Mortgage or the use,
enjoyment,
value or marketability of the related Mortgaged Property. Any
security
agreement, chattel mortgage or equivalent document related to
and
delivered
in connection with the Mortgage Loan establishes and creates a
valid,
existing and enforceable first lien and first priority security
interest
on the property described therein and the Depositor has the
full
right to
sell and assign the same to the Trustee.
(ix) The Mortgage Note and the related Mortgage are genuine and
each
is the
legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as enforceability
may be
limited by
(A) bankruptcy, insolvency, liquidation, receivership,
moratorium, reorganization or other similar laws affecting the
enforcement
of the
rights of creditors and (B) general principles of equity,
whether
enforcement is sought in a proceeding in equity or at law.
(x) All parties to the Mortgage Note and the Mortgage had legal
capacity
to enter into the Mortgage Loan and to execute and deliver the
Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage
have been
duly and properly executed by such parties.
(xi) The proceeds of the Mortgage Loan have been fully disbursed
to
or for the
account of the Mortgagor and there is no obligation for the
Mortgagee
to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site
improvements and
as to
disbursements of any escrow funds therefor have been complied
with.
All costs,
fees and expenses incurred in making or closing the Mortgage
Loan and
the recording of the Mortgage have been paid, and the Mortgagor
is not
entitled to any refund of any amounts paid or due to the
Mortgagee
pursuant
to the Mortgage Note or Mortgage.
(xii) To the best of the Depositor's knowledge, all parties
which
have had
any interest in the Mortgage Loan, whether as mortgagee,
assignee,
pledgee or otherwise, are (or, during the period in which they
held and
disposed of such interest, were) in compliance with any and all
applicable
"doing business" and licensing requirements of the laws of the
state
wherein the Mortgaged Property is located.
(xiii) (A) The Mortgage Loan is covered by an ALTA lender's
title
insurance
policy, acceptable to Fannie Mae or Freddie Mac, issued by a
title
insurer acceptable to Fannie Mae or Freddie Mac and qualified to
do
business
in the jurisdiction where the Mortgaged Property is located,
insuring
(subject to the exceptions contained in (viii)(A) and (B)
above)
the
Seller, its successors and assigns as to the first priority lien
of
the
Mortgage in the original principal amount of the Mortgage Loan, (B)
a
title
search has been done showing no lien (other than the exceptions
contained
in (viii)(A) and (B) above) on the related Mortgaged Property
senior to
the lien of the Mortgage or (C) in the case of any Mortgage
Loan
secured by
a Mortgaged Property located in a jurisdiction where such
policies
are generally not available, an opinion of counsel of the type
customarily rendered in such jurisdiction in lieu of title
insurance is
instead
received. For each Mortgage Loan covered by a title insurance
policy (x)
the Depositor is the sole insured of such lender's title
insurance
policy, and such lender's title insurance policy is in full
force and
effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement and
(y) no
claims
have been made under such lender's title insurance policy, and
the
Depositor
has not done, by act or omission, anything which would impair
the
coverage of such lender's title insurance policy.
(xiv) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and
no event
which,
with the passage of time or with notice and the expiration of
any
grace or
cure period, would constitute a default, breach, violation or
event of
acceleration, and the Seller has not waived any default,
breach,
violation
or event of acceleration.
(xv) As of the date of origination of the Mortgage Loan, there
had
been no
mechanics' or similar liens or claims filed for work, labor or
material
(and no rights are outstanding that under law could give rise
to
such lien)
affecting the related Mortgaged Property which are or may be
liens
prior to, or equal or coordinate with, the lien of the related
Mortgage.
(xvi) All improvements which were considered in determining the
Appraised
Value of the related Mortgaged Property lay wholly within the
boundaries
and building restriction lines of the Mortgaged Property, and
no
improvements on adjoining properties encroach upon the
Mortgaged
Property.
(xvii) The Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union,
insurance
company,
or similar institution which is supervised and examined by a
federal or
state authority, or by a mortgagee approved by the Secretary of
Housing
and Urban Development pursuant to sections 203 and 211 of the
National
Housing Act.
(xviii) Principal payments on the Mortgage Loan commenced no
more
than sixty
days after the proceeds of the Mortgaged Loan were disbursed.
The
Mortgage Loans are 20 to 30-year fixed rate mortgage loans having
an
original
term to maturity of not more than 30 years, with interest
payable
in arrears
on the first day of the month. Each Mortgage Note requires a
monthly payment
which is sufficient to fully amortize the original
principal
balance over the original term thereof and to pay interest at
the
related Mortgage Interest Rate. The Mortgage Note does not
permit
negative
amortization.
(xix) There is no proceeding pending or, to the Depositor's
knowledge,
threatened for the total or partial condemnation of the
Mortgaged
Property. The Mortgaged Property is in good repair and is
undamaged
by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or
other casualty, so as to affect adversely the value of the
Mortgaged
Property as security for the Mortgage Loan or the use for which
the
premises were intended.
(xx) The Mortgage and related Mortgage Note contain customary
and
enforceable provisions such as to render the rights and remedies of
the
holder
thereof adequate for the realization against the Mortgaged
Property
of the
benefits of the security provided thereby, including (A) in the
case of a
Mortgage designated as a deed of trust, by trustee's sale, and
(B)
otherwise by judicial foreclosure. To the best of the
Depositor's
knowledge,
following the date of origination of the Mortgage Loan, the
Mortgaged
Property has not been subject to any bankruptcy proceeding or
foreclosure proceeding and the Mortgagor has not filed for
protection
under
applicable bankruptcy laws. There is no homestead or other
exemption
or right
available to the Mortgagor or any other person which would
interfere
with the right to sell the Mortgaged Property at a trustee's
sale or
the right to foreclose the Mortgage.
(xxi) Other than any Borrowers Protection Plan(R) addendum to
the
Mortgage
Note of a BPP Mortgage Loan, the Mortgage Note and Mortgage are
on forms
acceptable to Fannie Mae or Freddie Mac.
(xxii) The Mortgage Note is not and has not been secured by any
collateral
except the lien of the corresponding Mortgage on the Mortgaged
Property
and the security interest of any applicable security agreement
or
chattel
mortgage referred to in (viii) above.
(xxiii) Each appraisal of the related Mortgaged Property, is in
a
form
acceptable to Fannie Mae or Freddie Mac and such appraisal
complies
with the
requirements of FIRREA, and was made and signed, prior to the
approval
of the Mortgage Loan application, by a Qualified Appraiser.
(xxiv) In the event the Mortgage constitutes a deed of trust, a
trustee,
duly qualified under applicable law to serve as such, has been
properly
designated and currently so serves, and no fees or expenses are
or will
become payable by the Trustee to the trustee under the deed of
trust,
except in connection with a trustee's sale after default by the
Mortgagor.
(xxv) No Mortgage Loan is a graduated payment mortgage loan, no
Mortgage
Loan has a shared appreciation or other contingent interest
feature,
and no Mortgage Loan contains any "buy-down" feature.
(xxvi) The Mortgagor has received all disclosure materials
required
by
applicable law with respect to the making of mortgage loans of the
same
type as
the Mortgage Loan and rescission materials required by
applicable
law if the
Mortgage Loan is a Refinance Mortgage Loan.
(xxvii) Each Primary Insurance Policy to which any Mortgage Loan
is
subject
will be issued by an insurer acceptable to Fannie Mae or
Freddie
Mac, which
insures that portion of the Mortgage Loan in excess of the
portion of
the Appraised Value of the Mortgaged Property required by
Fannie
Mae. All provisions of such Primary Insurance Policy have been
and
are being
complied with, such policy is in full force and effect, and all
premiums
due thereunder have been paid. Any Mortgage subject to any such
Primary
Insurance Policy obligates the Mortgagor thereunder to maintain
such
insurance and to pay all premiums and charges in connection
therewith
at least
until Loan-to-Value Ratio of such Mortgage Loan is reduced to
less than
80%. The Mortgage Interest Rate for the Mortgage Loan does not
include
any such insurance premium.
(xxviii) To the best of the Depositor's knowledge as of the date
of
origination of the Mortgage Loan, (A) the Mortgaged Property is
lawfully
occupied
under applicable law, (B) all inspections, licenses and
certificates required to be made or issued with respect to all
occupied
portions
of the Mortgaged Property and, with respect to the use and
occupancy
of the same, including but not limited to certificates of
occupancy,
have been made or obtained from the appropriate authorities and
(C) no
improvement located on or part of the Mortgaged Property is in
violation
of any zoning law or regulation.
(xxix) The Assignment of Mortgage (except with respect to any
Mortgage that has been
recorded in the name of MERS or its designee) is in
recordable
form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(xxx) All payments required to be made prior to the Cut-off Date
for
such
Mortgage Loan under the terms of the Mortgage Note have been made
and
no more
than 0.20% (by Cut-off Date Principal Balance) of the Mortgage
Loan have
been more than 30 days delinquent more than once in the twelve
month
period immediately prior to the Cut-off Date.
(xxxi) With respect to each Mortgage Loan, the Depositor or
Servicer
is in
possession of a complete Mortgage File except for the documents
which have
been delivered to the Trustee or which have been submitted for
recording
and not yet returned.
(xxxii) Immediately prior to the transfer and assignment
contemplated herein, the Depositor was the sole owner and holder of
the
Mortgage
Loans. The Mortgage Loans were not assigned or pledged by the
Depositor
and the Depositor had good and marketable title thereto, and
the
Depositor
had full right to transfer and sell the Mortgage Loans to the
Trustee
free and clear of any encumbrance, participation interest,
lien,
equity,
pledge, claim or security interest and had full right and
authority
subject to no interest or participation in, or agreement with
any other
party to sell or otherwise transfer the Mortgage Loans.
(xxxiii) Any future advances made prior to the Cut-off Date
have
been
consolidated with the outstanding principal amount secured by
the
Mortgage,
and the secured principal amount, as consolidated, bears a
single
interest rate and single repayment term. The lien of the
Mortgage
securing
the consolidated principal amount is expressly insured as
having
first lien
priority by a title insurance policy, an endorsement to the
policy
insuring the mortgagee's consolidated interest or by other
title
evidence
acceptable to Fannie Mae and Freddie Mac. The consolidated
principal
amount does not exceed the original principal amount of the
Mortgage
Loan.
(xxxiv) The Mortgage Loan was underwritten in accordance with
the
applicable
Underwriting Guidelines in effect at the time of origination
with
exceptions thereto exercised in a reasonable manner.
(xxxv) If the Mortgage Loan is secured by a long-term
residential
lease, (1)
the lessor under the lease holds a fee simple interest in the
land; (2)
the terms of such lease expressly permit the mortgaging of the
leasehold
estate, the assignment of the lease without the lessor's
consent
and the
acquisition by the holder of the Mortgage of the rights of the
lessee
upon foreclosure or assignment in lieu of foreclosure or
provide
the holder
of the Mortgage with substantially similar protections; (3) the
terms of
such lease do not (a) allow the termination thereof upon the
lessee's
default without the holder of the Mortgage being entitled to
receive
written notice of, and opportunity to cure, such default, (b)
allow the
termination of the lease in the event of damage or destruction
as long as
the Mortgage is in existence, (c) prohibit the holder of the
Mortgage
from being insured (or receiving proceeds of insurance) under
the
hazard
insurance policy or policies relating to the Mortgaged Property
or
(d) permit
any increase in the rent other than pre-established increases
set forth
in the lease; (4) the original term of such lease is not less
than 15
years; (5) the term of such lease does not terminate earlier
than
five years
after the maturity date of the Mortgage Note; and (6) the
Mortgaged
Property is located in a jurisdiction in which the use of
leasehold
estates in transferring ownership in residential properties is
a
widely
accepted practice.
(xxxvi) No more than 0.25% (by Cut-off Date Principal Balance)
of
the
Mortgage Loans are secured by long-term residential leases.
(xxxvii) The Mortgaged Property is located in the state
identified
in the
Mortgage Loan Schedule and consists of a parcel of real
property
with a
detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit, or an
individual
unit in a
planned unit development, or, in the case of Mortgage Loans
secured by
Co-op Shares, leases or occupancy agreements; provided,
however,
that any condominium project or planned unit development
generally
conforms with the applicable Underwriting Guidelines regarding
such
dwellings, and no residence or dwelling is a mobile home or a
manufactured dwelling.
(xxxviii) The Depositor used no adverse selection procedures in
selecting
the Mortgage Loan for inclusion in the Trust Estate.
(xxxix) Each Mortgage Loan is a "qualified mortgage" within the
meaning of
Section 860G(a)(3) of the Code.
(xl) With respect to each Mortgage where a lost note affidavit
has
been
delivered to the Trustee in place of the related Mortgage Note,
the
related
Mortgage Note is no longer in existence.
(xli) No Mortgage Loan is a "high cost" loan as defined under
any
federal,
state or local law applicable to such Mortgage Loan at the time
of its
origination.
(xlii) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable
(as such terms are defined in the then-current S&P's
LEVELS(R)
Glossary
which is now Version 5.7, Appendix E) and no Mortgage Loan
originated
on or after October 1, 2002 through March 6, 2003 is governed
by the
Georgia Fair Lending Act.
(xliii) No Mortgage Loan is subject to the provisions of the
Home
Ownership
and Equity Protection Act of 1994, as amended.
Notwithstanding the foregoing, no representations or warranties
are
made by the Depositor as to the environmental condition of any
Mortgaged
Property; the absence, presence or effect of hazardous wastes or
hazardous
substances on any Mortgaged Property; any casualty resulting from
the presence
or effect of hazardous wastes or hazardous substances on, near or
emanating from
any Mortgaged Property; the impact on Certificateholders of any
environmental
condition or presence of any hazardous substance on or near any
Mortgaged
Property; or the compliance of any Mortgaged Property with any
environmental
laws, nor is any agent, Person or entity otherwise affiliated with
the Depositor
authorized or able to make any such representation, warranty or
assumption of
liability relative to any Mortgaged Property. In addition, no
representations or
warranties are made by the Depositor with respect to the absence or
effect of
fraud in the origination of any Mortgage Loan.
It is understood and agreed that the representations and
warranties
set forth in this Section 2.04 shall survive delivery of the
respective Mortgage
Files to the Trustee or the Custodian and shall inure to the
benefit of the
Trustee, notwithstanding any restrictive or qualified endorsement
or assignment.
Upon discovery by any of the Depositor, the Servicer, the Trustee
or
the Custodian that any of the representations and warranties set
forth in this
Section 2.04 is not accurate (referred to herein as a "breach") and
that such
breach materially and adversely affects the interests of the
Certificateholders
in the related Mortgage Loan, the party discovering such breach
shall give
prompt written notice to the other parties (any Custodian being so
obligated
under a custodial agreement); provided that any such breach that
causes the
Mortgage Loan not to be a "qualified mortgage" within the meaning
of Section
860G(a)(3) of the Code shall be deemed to materially and adversely
affect the
interests of the Certificateholders. Within 90 days of its
discovery or its
receipt of notice of any such breach, the Depositor shall cure such
breach in
all material respects or shall either (i) repurchase the Mortgage
Loan or any
property acquired in respect thereof from the Trustee at a price
equal to the
Repurchase Price or (ii) if within two years of the Closing Date,
substitute for
such Mortgage Loan in the manner described in Section 2.02;
provided that if the
breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as
defined in Section 860G(a)(3) of the Code, any such repurchase or
substitution
must occur within 90 days from the date the breach was discovered.
In addition
to the foregoing, if a breach of the representation set forth in
clause (vi) or
(xlii) of this Section 2.04 occurs as a result of a violation of an
applicable
predatory or abusive lending law, the Depositor shall reimburse the
Trust for
all costs or damages incurred by the Trust as a result of the
violation of such
law (such amount, the "Reimbursement Amount"). The Repurchase Price
of any
repurchase described in this paragraph, the Substitution Adjustment
Amount, if
any, and any Reimbursement Amount shall be deposited in the
Servicer Custodial
Account. It is understood and agreed that, except with respect to
the second
preceding sentence, the obligation of the Depositor to repurchase
or substitute
for any Mortgage Loan or Mortgaged Property as to which such a
breach has
occurred and is continuing shall constitute the sole remedy
respecting such
breach available to Certificateholders, or to the Trustee on behalf
of
Certificateholders, and such obligation shall survive until
termination of the
Trust hereunder.
Section 2.05 Designation of Interests in the REMICs. The
Trustee
acknowledges the issuance of the uncertificated REMIC 1 Regular
Interests and
declares that it holds such regular interests as assets of REMIC 2.
The Trustee
acknowledges the obligation of the Class CE Certificates to pay Cap
Carryover
Amounts, and declares that it shall hold the same as assets of the
Grantor Trust
on behalf of the Holders of the Class A-1, Class A-2, Class A-3,
Class A-4,
Class A-5, Class A-6, Class M-1, Class M-2, Class M-3, Class M-4
and Class M-5
Certificates, which shall be treated as beneficially owning the
right to receive
the Cap Carryover Amounts from the Grantor Trust. In addition to
the assets
described in the preceding sentence, the assets of the Grantor
Trust shall also
include the Cap Carryover Reserve Account and the beneficial
interest of the
Class CE Certificates with respect thereto, subject to the
obligation to pay Cap
Carryover Amounts. The interests evidenced by the Certificates
constitute the
entire beneficial ownership interest in the Trust.
Section 2.06 Designation of Start-up Day. The Closing Date is
hereby
designated as the "start-up day" of each of the REMICs within the
meaning of
Section 860G(a)(9) of the Code.
Section 2.07 REMIC Certificate Maturity Date. Solely for purposes
of
satisfying Section 1.860G-1(a)(4)(iii) of the Treasury Regulations,
the "latest
possible maturity date" of the regular interests in the REMIC is
October 25,
2036.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. For and on
behalf
of the Certificateholders, the Servicer shall service and
administer the
Mortgage Loans, all in accordance with the terms of this Agreement,
Customary
Servicing Procedures, applicable law and the terms of the Mortgage
Notes and
Mortgages. In connection with such servicing and administration,
the Servicer
shall have full power and authority, acting alone and/or through
Subservicers as
provided in Section 3.02, to do or cause to be done any and all
things that it
may deem necessary or desirable in connection with such servicing
and
administration including, but not limited to, the power and
authority, subject
to the terms hereof, (a) to execute and deliver, on behalf of
the
Certificateholders and the Trustee, customary consents or waivers
and other
instruments and documents, (b) to consent, with respect to the
Mortgage Loans it
services, to transfers of any Mortgaged Property and assumptions of
the Mortgage
Notes and related Mortgages (but only in the manner provided in
this Agreement),
(c) to collect any Insurance Proceeds and other Liquidation
Proceeds relating to
the Mortgage Loans it services, and (d) to effectuate foreclosure
or other
conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan
it services. The Servicer shall represent and protect the interests
of the Trust
in the same manner as it protects its own interests in mortgage
loans in its own
portfolio in any claim, proceeding or litigation regarding a
Mortgage Loan and
shall not make or permit any modification, waiver or amendment of
any term of
any Mortgage Loan, except as provided pursuant to Section 3.21.
Without limiting
the generality of the foregoing, the Servicer, in its own name or
in the name of
any Subservicer or the Depositor and the Trustee, is hereby
authorized and
empowered by the Depositor and the Trustee, when the Servicer or
any
Subservicer, as the case may be, believes it appropriate in its
reasonable
judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the
Certificateholders or any of them, any and all instruments or
agreements of
satisfaction, cancellation, default, assumption, modification,
discharge,
partial or full release, and all other comparable instruments and
agreements,
with respect to the Mortgage Loans it services, and with respect to
the related
Mortgaged Properties held for the benefit of the
Certificateholders. To the
extent that the Servicer is not permitted to execute and deliver
such documents
pursuant to the preceding sentence, the Servicer shall prepare and
deliver to
the Depositor and/or the Trustee such documents requiring execution
and delivery
by either or both of them as are necessary or appropriate to enable
the Servicer
to service and administer the Mortgage Loans it services. Upon
receipt of such
documents, the Depositor and/or the Trustee, upon the direction of
the Servicer,
shall promptly execute such documents and deliver them to the
Servicer.
Alternatively, upon the request of the Servicer, the Trustee shall
execute and
deliver to the Servicer any additional powers of attorney and other
documents
prepared by the Servicer that are reasonably necessary or
appropriate to enable
the Servicer to carry out its servicing and administrative duties
under this
Agreement.
In accordance with the standards of the preceding paragraph,
the
Servicer shall advance or cause to be advanced funds as necessary
for the
purpose of effecting the payment of taxes and assessments on the
Mortgaged
Properties relating to the Mortgage Loans it services, which
Servicing Advances
shall be reimbursable in the first instance from related
collections from the
Mortgagors pursuant to Section 3.09, and further as provided in
Section 3.11.
The costs incurred by the Servicer, if any, in effecting the timely
payments of
taxes and assessments on the Mortgaged Properties and related
insurance premiums
shall not, for the purpose of calculating monthly distributions to
the
Certificateholders, be added to the Stated Principal Balances of
the related
Mortgage Loans, notwithstanding that the terms of such Mortgage
Loans so permit.
The relationship of the Servicer (and of any successor to the
Servicer as servicer under this Agreement) to the Trustee under
this Agreement
is intended by the parties to be that of an independent contractor
and not that
of a joint venturer, partner or agent.
Section 3.02 Subservicing; Enforcement of the Obligations of
Servicer. (a) The Servicer may arrange for the subservicing of any
Mortgage Loan
it services by a Subservicer pursuant to a Subservicing Agreement;
provided,
however, that such subservicing arrangement and the terms of the
related
Subservicing Agreement must provide for the servicing of such
Mortgage Loan in a
manner consistent with the servicing arrangements contemplated
hereunder.
Notwithstanding the provisions of any Subservicing Agreement, any
of the
provisions of this Agreement relating to agreements or arrangements
between the
Servicer and a Subservicer or reference to actions taken through a
Subservicer
or otherwise, the Servicer shall remain obligated and liable to the
Depositor,
the Trustee and the Certificateholders for the servicing and
administration of
the Mortgage Loans it services in accordance with the provisions of
this
Agreement without diminution of such obligation or liability by
virtue of such
Subservicing Agreements or arrangements or by virtue of
indemnification from the
Subservicer and to the same extent and under the same terms and
conditions as if
the Servicer alone were servicing and administering those Mortgage
Loans. All
actions of each Subservicer performed pursuant to the related
Subservicing
Agreement shall be performed as agent of the Servicer with the same
force and
effect as if performed directly by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed
to
have received
any collections, recoveries or payments with respect to the
Mortgage Loans
it services that are received by a Subservicer regardless of
whether such
payments are remitted by the Subservicer to the Servicer.
(c) As part of its servicing activities hereunder, the Servicer,
for
the benefit of
the Trustee and the Certificateholders, shall use its best
reasonable
efforts to enforce the obligations of each Subservicer engaged
by
the Servicer
under the related Subservicing Agreement, to the extent that
the
non-performance
of any such obligation would have a material and adverse
effect on a
Mortgage Loan. Such enforcement, including, without limitation,
the legal
prosecution of claims, termination of Subservicing Agreements
and
the pursuit of
other appropriate remedies, shall be in such form and carried
out to such an
extent and at such time as the Servicer, in its good faith
business
judgment, would require were it the owner of the related
Mortgage
Loans. The
Servicer shall pay the costs of such enforcement at its own
expense, and
shall be reimbursed therefor only (i) from a general recovery
resulting from
such enforcement to the extent, if any, that such recovery
exceeds all
amounts due in respect of the related Mortgage Loan or (ii)
from
a specific
recovery of costs, expenses or attorneys fees against the party
against whom
such enforcement is directed.
(d) Any Subservicing Agreement entered into by the Servicer
shall
provide that it
may be assumed or terminated by the Trustee, if the Trustee
has assumed the
duties of the Servicer, or any successor Servicer, at the
Trustee's or
successor Servicer's option, as applicable, without cost or
obligation to
the assuming or terminating party or the Trust Estate, upon the
assumption by
such party of the obligations of the Servicer pursuant to
Section
8.05.
(e) Notwithstanding the foregoing, to the extent the Servicer
engages any
affiliate or third party vendor, including any Subservicer, in
connection with
the performance of any of its duties under this Agreement,
the Servicer
shall immediately notify the Depositor in writing of such
engagement. To
the extent the Depositor notifies the Servicer and the Trustee
that it has
determined that any such affiliate, third party vendor or
Subservicer is a
Servicing Function Participant, the Servicer shall cause
such Servicing
Function Participant to prepare a separate assessment and
attestation
report, as contemplated by Section 3.19 of this Agreement and
deliver such
report to the Trustee as set forth in Section 3.22 of this
Agreement. In
addition, to the extent the Depositor notifies the Servicer and
the Trustee that
it has determined that any such Servicing Function
Participant
would be a "servicer" within the meaning of Item 1101 of
Regulation AB
and meets the criteria in Item 1108(a)(2)(i), (ii) or (iii) of
Regulation AB
(an "Additional Servicer"), the Servicer shall cause such
Additional
Servicer to prepare a separate compliance statement as
contemplated by
Section 3.18 of this Agreement and deliver such statement to
the Trustee as
set forth in Section 3.22 of this Agreement. In addition, if
the Depositor
determines any such Servicing Function Participant would be a
"servicer"
within the meaning of Item 1101 of Regulation AB, the Servicer
shall cause such
Servicing Function Participant to provide the Depositor and
the Trustee the
information required by Section 1108(b) and 1108(c) of
Regulation AB
within two Business Days following such engagement. To the
extent the
Servicer terminates any such Servicing Function Participant
that
the Depositor
has determined is a "servicer" within the meaning of Item 1101
of Regulation
AB, the Servicer shall provide the Depositor and the Trustee
the information
required to enable the Trustee to accurately and timely
report such
event under Item 6.02 of Form 8-K (if the Trust's Exchange Act
reporting
requirements have not been suspended pursuant to Section 15(d)
of
the Exchange Act
as set forth in 3.22(g)).
Section 3.03 Fidelity Bond; Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket fidelity
bond and an
errors and omissions insurance policy, with broad coverage on all
officers,
employees or other persons acting in any capacity requiring such
persons to
handle funds, money, documents or papers relating to the Mortgage
Loans it
services. These policies must insure the Servicer against losses
resulting from
dishonest or fraudulent acts committed by the Servicer's personnel,
any
employees of outside firms that provide data processing services
for the
Servicer, and temporary contract employees or student interns. Such
fidelity
bond shall also protect and insure the Servicer against losses in
connection
with the release or satisfaction of a Mortgage Loan without having
obtained
payment in full of the indebtedness secured thereby. No provision
of this
Section 3.03 requiring such fidelity bond and errors and omissions
insurance
shall diminish or relieve the Servicer from its duties and
obligations as set
forth in this Agreement. The minimum coverage under any such bond
and insurance
policy shall be at least equal to the corresponding amounts
required by Fannie
Mae in the Fannie Mae Servicing Guide or by Freddie Mac in the
Freddie Mac
Sellers' & Servicers' Guide, as amended or restated from time
to time, or in an
amount as may be permitted to the Servicer by express waiver of
Fannie Mae or
Freddie Mac.
Section 3.04 Access to Certain Documentation. The Servicer
shall
provide to the OCC, the OTS, the FDIC and to comparable regulatory
authorities
supervising Holders of Certificates and the examiners and
supervisory agents of
the OCC, the OTS, the FDIC and such other authorities, access to
the
documentation required by applicable regulations of the OCC, the
OTS, the FDIC
and such other authorities with respect to the Mortgage Loans. Such
access shall
be afforded upon reasonable and prior written request and during
normal business
hours at the offices designated by the Servicer; provided that the
Servicer
shall be entitled to be reimbursed by each such Certificateholder
for actual
expenses incurred by the Servicer in providing such reports and
access. Nothing
in this Section 3.04 shall limit the obligation of the Servicer to
observe any
applicable law and the failure of the Servicer to provide access as
provided in
this Section 3.04 as a result of such obligation shall not
constitute a breach
of this Section 3.04.
Section 3.05 Maintenance of Primary Insurance Policy; Claims;
Collections of BPP Mortgage Loan Payments. (a) With respect to each
Mortgage
Loan with a Loan-to-Value Ratio in excess of 80% or such other
Loan-to-Value
Ratio as may be required by law that was originated with a Primary
Insurance
Policy, the Servicer shall, without any cost to the Trust Estate,
maintain or
cause the Mortgagor to maintain in full force and effect a Primary
Insurance
Policy insuring that portion of the Mortgage Loan in excess of a
percentage in
conformity with Fannie Mae requirements. The Servicer shall pay or
shall cause
the Mortgagor to pay the premium thereon on a timely basis, at
least until the
Loan-to-Value Ratio of such Mortgage Loan is reduced to 80% or such
other
Loan-to-Value Ratio as may be required by law. If such Primary
Insurance Policy
is terminated, the Servicer shall obtain from another insurer a
comparable
replacement policy, with a total coverage equal to the remaining
coverage of
such terminated Primary Insurance Policy. If the insurer shall
cease to be an
insurer acceptable to Fannie Mae or Freddie Mac, the Servicer shall
notify the
Trustee in writing, it being understood that the Servicer shall not
have any
responsibility or liability for any failure to recover under the
Primary
Insurance Policy for such reason. If the Servicer determines that
recoveries
under the Primary Insurance Policy are jeopardized by the financial
condition of
the insurer, the Servicer shall obtain from another insurer which
meets the
requirements of this Section 3.05 a replacement insurance policy.
The Servicer
shall not take any action that would result in noncoverage under
any applicable
Primary Insurance Policy of any loss that, but for the actions of
the Servicer,
would have been covered thereunder. In connection with any
assumption or
substitution agreement entered into or to be entered into pursuant
to Section
3.13, the Servicer shall promptly notify the insurer under the
related Primary
Insurance Policy, if any, of such assumption or substitution of
liability in
accordance with the terms of such Primary Insurance Policy and
shall take all
actions which may be required by such insurer as a condition to the
continuation
of coverage under such Primary Insurance Policy. If such Primary
Insurance
Policy is terminated as a result of such assumption or substitution
of
liability, the Servicer shall obtain a replacement Primary
Insurance Policy as
provided above.
In connection with its activities as servicer, the Servicer
agrees
to prepare and present, on behalf of itself, the Trustee and
the
Certificateholders, claims to the insurer under any Primary
Insurance Policy in
a timely fashion in accordance with the terms of such Primary
Insurance Policy
and, in this regard, to take such action as shall be necessary to
permit
recovery under any Primary Insurance Policy respecting a defaulted
Mortgage
Loan. Pursuant to Section 3.09(a), any amounts collected by the
Servicer under
any Primary Insurance Policy shall be deposited in the related
Escrow Account,
subject to withdrawal pursuant to Section 3.09(b).
The Servicer will comply with all provisions of applicable state
and
federal law relating to the cancellation of, or collection of
premiums with
respect to, Primary Mortgage Insurance, including, but not limited
to, the
provisions of the Homeowners Protection Act of 1998, and all
regulations
promulgated thereunder, as amended from time to time.
(b) The Servicer shall take all actions necessary to collect,
on
behalf of the
Trust, any BPP Mortgage Loan Payments required to be made to
the Trust
pursuant to the Mortgage Loan Purchase Agreement.
Section 3.06 Rights of the Depositor and the Trustee in Respect
of
the Servicer. The Depositor may, but is not obligated to, enforce
the
obligations of the Servicer hereunder and may, but is not obligated
to, perform,
or cause a designee to perform, any defaulted obligation of the
Servicer
hereunder and in connection with any such defaulted obligation to
exercise the
related rights of the Servicer hereunder; provided that the
Servicer shall not
be relieved of any of its obligations hereunder by virtue of such
performance by
the Depositor or its designee. Neither the Trustee nor the
Depositor shall have
any responsibility or liability for any action or failure to act by
the Servicer
nor shall the Trustee or the Depositor be obligated to supervise
the performance
of the Servicer hereunder or otherwise.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a
Subservicer
in its capacity as such shall be deemed to be between the
Subservicer and the
Servicer alone, and the Trustee and Certificateholders shall not be
deemed
parties thereto and shall have no claims, rights, obligations,
duties or
liabilities with respect to the Subservicer except as set forth in
Section 3.07.
The Servicer shall be solely liable for all fees owed by it to any
Subservicer,
irrespective of whether the Servicer's compensation pursuant to
this Agreement
is sufficient to pay such fees.
Section 3.07 Trustee to Act as Servicer. If the Servicer shall
for
any reason no longer be the Servicer hereunder (including by reason
of an Event
of Default), the Trustee shall within 90 days of such time, assume,
if it so
elects, or shall appoint a successor Servicer to assume, all of the
rights and
obligations of the Servicer hereunder arising thereafter (except
that the
Trustee shall not be (a) liable for losses of the Servicer pursuant
to Section
3.12 or any acts or omissions of the predecessor Servicer
hereunder, (b)
obligated to make Advances if it is prohibited from doing so by
applicable law
or (c) deemed to have made any representations and warranties of
the Servicer
hereunder). Any such assumption shall be subject to Sections 7.02
and 8.05. If
the Servicer shall for any reason no longer be the Servicer
(including by reason
of any Event of Default), the Trustee or the successor Servicer may
elect to
succeed to any rights and obligations of the Servicer under each
Subservicing
Agreement or may terminate each Subservicing Agreement. If it has
elected to
assume the Subservicing Agreement, the Trustee or the successor
Servicer shall
be deemed to have assumed all of the Servicer's interest therein
and to have
replaced the Servicer as a party to any Subservicing Agreement
entered into by
the Servicer as contemplated by Section 3.02 to the same extent as
if the
Subservicing Agreement had been assigned to the assuming party
except that the
Servicer shall not be relieved of any liability or obligations
under any such
Subservicing Agreement.
The Servicer that is no longer the Servicer hereunder shall,
upon
request of the Trustee, but at the expense of such predecessor
Servicer, deliver
to the assuming party all documents and records relating to each
Subservicing
Agreement or substitute servicing agreement and the Mortgage Loans
then being
serviced thereunder and an accounting of amounts collected or held
by it and
otherwise use its best efforts to effect the orderly and efficient
transfer of
such substitute Subservicing Agreement to the assuming party. The
Trustee shall
be entitled to be reimbursed from the predecessor Servicer (or the
Trust if the
predecessor Servicer is unable to fulfill its obligations
hereunder) for all
Servicing Transfer Costs.
Section 3.08 Collection of Mortgage Loan Payments; Servicer
Custodial Account; Certificate Account;. (a) Continuously from the
date hereof
until the principal and interest on all Mortgage Loans are paid in
full, the
Servicer will proceed diligently, in accordance with this
Agreement, to collect
all payments due under each of the Mortgage Loans it services when
the same
shall become due and payable. Further, the Servicer will in
accordance with all
applicable law and Customary Servicing Procedures ascertain and
estimate taxes,
assessments, fire and hazard insurance premiums, mortgage insurance
premiums and
all other charges with respect to the Mortgage Loans it services
that, as
provided in any Mortgage, will become due and payable to the end
that the
installments payable by the Mortgagors will be sufficient to pay
such charges as
and when they become due and payable. Consistent with the
foregoing, the
Servicer may in its discretion (i) waive any late payment charge or
any
prepayment charge or penalty interest in connection with the
prepayment of a
Mortgage Loan it services and (ii) extend the due dates for
payments due on a
Mortgage Note for a period not greater than 120 days; provided,
however, that
the Servicer cannot extend the maturity of any such Mortgage Loan
past the date
on which the final payment is due on the latest maturing Mortgage
Loan as of the
Cut-off Date. In the event of any such arrangement, the Servicer
shall make
Periodic Advances on the related Mortgage Loan in accordance with
the provisions
of Section 3.20 during the scheduled period in accordance with the
amortization
schedule of such Mortgage Loan without modification thereof by
reason of such
arrangements. The Servicer shall not be required to institute or
join in
litigation with respect to collection of any payment (whether under
a Mortgage,
Mortgage Note or otherwise or against any public or governmental
authority with
respect to a taking or condemnation) if it reasonably believes that
enforcing
the provision of the Mortgage or other instrument pursuant to which
such payment
is required is prohibited by applicable law.
(b) The Servicer shall establish and maintain the Servicer
Custodial
Account. The
Servicer shall deposit or cause to be deposited into the
Servicer
Custodial Account, all on a daily basis within one Business Day
of
receipt, except
as otherwise specifically provided herein, the following
payments and
collections remitted by Subservicers or received by the
Servicer
in respect of
the Mortgage Loans subsequent to the Cut-off Date (other than
in respect of
principal and interest due on the Mortgage Loans on or before
the Cut-off
Date) and the following amounts required to be deposited
hereunder with
respect to the Mortgage Loans it services:
(i) all payments on account of principal of the Mortgage Loans,
including
Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net
of the
Servicing Fee;
(iii) (A) all Insurance Proceeds and Liquidation Proceeds,
other
than
Insurance Proceeds to be (1) applied to the restoration or repair
of
the
Mortgaged Property, (2) released to the Mortgagor in accordance
with
Customary
Servicing Procedures or (3) required to be deposited to an
Escrow
Account pursuant to Section 3.09(a), and other than any Excess
Proceeds
and (B) any Insurance Proceeds released from an Escrow Account
pursuant
to Section 3.09(b)(iv);
(iv) any amount required to be deposited by the Servicer pursuant
to
Section
3.08(d) in connection with any losses on Permitted Investments
with
respect to the Servicer Custodial Account;
(v) any amounts required to be deposited by the Servicer pursuant
to
Section
3.14;
(vi) all Repurchase Prices, all Substitution Adjustment Amounts
and
all
Reimbursement Amounts, to the extent received by the Servicer;
(vii) Periodic Advances made by the Servicer pursuant to
Section
3.20 and
any Compensating Interest;
(viii) any Recoveries; and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for deposits to the Servicer
Custodial
Account by the Servicer shall be exclusive it being understood and
agreed that,
without limiting the generality of the foregoing, Ancillary Income
need not be
deposited by the Servicer. If the Servicer shall deposit in the
Servicer
Custodial Account any amount not required to be deposited, it may
at any time
withdraw or direct the institution maintaining the Servicer
Custodial Account to
withdraw such amount from the Servicer Custodial Account, any
provision herein
to the contrary notwithstanding. The Servicer Custodial Account may
contain
funds that belong to one or more trust funds created for mortgage
pass-through
certificates of other series and may contain other funds respecting
payments on
mortgage loans belonging to the Servicer or serviced by the
Servicer on behalf
of others. Notwithstanding such commingling of funds, the Servicer
shall keep
records that accurately reflect the funds on deposit in the
Servicer Custodial
Account that have been identified by it as being attributable to
the Mortgage
Loans it services. The Servicer shall maintain adequate records
with respect to
all withdrawals made pursuant to this Section 3.08. All funds
required to be
deposited in the Servicer Custodial Account shall be held in trust
for the
Certificateholders until withdrawn in accordance with Section
3.11.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Certificate Account. The Trustee shall,
promptly upon
receipt, deposit
in the Certificate Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the
Trustee
pursuant
to Section 3.11(a)(viii);
(ii) any amount paid by the Trustee pursuant to Section 3.08(d)
in
connection
with any losses on Permitted Investments with respect to the
Certificate Account; and
(iii) any other amounts deposited hereunder which are required to
be
deposited
in the Certificate Account.
If the Servicer shall remit any amount not required to be
remitted,
it may at any time direct the Trustee to withdraw such amount from
the
Certificate Account, any provision herein to the contrary
notwithstanding. Such
direction may be accomplished by delivering an Officer's
Certificate to the
Trustee which describes the amounts deposited in error in the
Certificate
Account. All funds required to be deposited in the Certificate
Account shall be
held by the Trustee in trust for the Certificateholders until
disbursed in
accordance with this Agreement or withdrawn in accordance with
Section 3.11. In
no event shall the Trustee incur liability for withdrawals from the
Certificate
Account at the direction of the Servicer.
(d) Each institution at which the Servicer Custodial Account or
the
Certificate
Account is maintained shall invest the funds therein as
directed
in writing by
the Servicer, in the case of the Servicer Custodial Account, or
the Trustee, in
the case of the Certificate Account, in Permitted
Investments,
which shall mature not later than (i) in the case of the
Servicer
Custodial Account, the Business Day next preceding the related
Remittance Date
(except that if such Permitted Investment is an obligation of
the institution
that maintains such account, then such Permitted Investment
shall mature not
later than such Remittance Date) and (ii) in the case of the
Certificate
Account, the Business Day next preceding the Distribution Date
(except that if
such Permitted Investment is an obligation of the institution
that maintains
such account, then such Permitted Investment shall mature not
later than such
Distribution Date) and, in each case, shall not be sold or
disposed of
prior to its maturity. All such Permitted Investments shall be
made in the name
of the Trustee, for the benefit of the Certificateholders.
All Servicer
Custodial Account Reinvestment Income shall be for the benefit
of the Servicer
as part of its Servicing Compensation and shall be retained
by it monthly as
provided herein. All income or gain (net of any losses)
realized from
any such investment of funds on deposit in the Certificate
Account shall be
for the benefit of the Trustee as additional compensation
and shall be
retained by it monthly as provided herein. The amount of any
losses realized
in the Servicer Custodial Account or the Certificate Account
incurred in any
such account in respect of any such investments shall
promptly be
deposited by the Servicer in the Servicer Custodial Account or
by
the Trustee in
the Certificate Account, as applicable.
(e) The Servicer shall give notice to the Trustee of any
proposed
change of the
location of the Servicer Custodial Account maintained by the
Servicer not
later than 30 days and not more than 45 days prior to any
change
thereof. The
Trustee shall give notice to the Servicer, each Rating Agency
and the
Depositor of any proposed change of the location of the
Certificate
Account not
later than 30 days after and not more than 45 days prior to any
change thereof.
The creation of the Servicer Custodial Account shall be
evidenced by a
certification substantially in the form of Exhibit F hereto. A
copy of such
certification shall be furnished to the Trustee.
Section 3.09
Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) To the extent required by the related Mortgage
Note and not
violative of current law, the Servicer shall segregate and hold all
funds
collected and received pursuant to each Mortgage Loan which
constitute Escrow
Payments in trust separate and apart from any of its own funds and
general
assets and for such purpose shall establish and maintain one or
more escrow
accounts (collectively, the "Escrow Account"), titled "Bank of
America, National
Association, in trust for registered holders of Banc of America
Alternative Loan
Trust 2006-7 Mortgage Pass-Through Certificates, Series 2006-7 and
various
Mortgagors." The Escrow Account shall be established with a
commercial bank, a
savings bank or a savings and loan association that meets the
guidelines set
forth by Fannie Mae or Freddie Mac as an eligible institution for
escrow
accounts and which is a member of the Automated Clearing House. In
any case, the
Escrow Account shall be insured by the FDIC to the fullest extent
permitted by
law. The Servicer shall deposit in the appropriate Escrow Account
on a daily
basis, and retain therein: (i) all Escrow Payments collected on
account of the
Mortgage Loans, (ii) all amounts representing proceeds of any
hazard insurance
policy which are to be applied to the restoration or repair of any
related
Mortgaged Property and (iii) all amounts representing proceeds of
any Primary
Insurance Policy. Nothing herein shall require the Servicer to
compel a
Mortgagor to establish an Escrow Account in violation of applicable
law.
(b) Withdrawals of amounts so collected from the Escrow Accounts
may
be made by the
Servicer only (i) to effect timely payment of taxes,
assessments,
mortgage insurance premiums, fire and hazard insurance
premiums,
condominium or
PUD association dues, or comparable items constituting Escrow
Payments for the
related Mortgage, (ii) to reimburse the Servicer out of
related Escrow
Payments made with respect to a Mortgage Loan for any
Servicing
Advance made by the Servicer pursuant to Section 3.09(c) with
respect to such
Mortgage Loan, (iii) to refund to any Mortgagor any sums
determined to be
overages, (iv) for transfer to the Servicer Custodial
Account upon
default of a Mortgagor or in accordance with the terms of the
related Mortgage
Loan and if permitted by applicable law, (v) for application
to restore or
repair the Mortgaged Property, (vi) to pay to the Mortgagor, to
the extent
required by law, any interest paid on the funds deposited in
the
Escrow Account,
(vii) to pay to itself any interest earned on funds deposited
in the Escrow
Account (and not required to be paid to the Mortgagor), (viii)
to the extent
permitted under the terms of the related Mortgage Note and
applicable law,
to pay late fees with respect to any Monthly Payment which is
received after
the applicable grace period, (ix) to withdraw suspense
payments that
are deposited into the Escrow Account, (x) to withdraw any
amounts
inadvertently deposited in the Escrow Account or (xi) to clear
and
terminate the
Escrow Account upon the termination of this Agreement in
accordance with
Section 10.01. Any Escrow Account shall not be a part of the
Trust
Estate.
(c) With respect to each Mortgage Loan, the Servicer shall
maintain
accurate records
reflecting the status of taxes, assessments and other
charges which
are or may become a lien upon the Mortgaged Property and the
status of
Primary Insurance Policy premiums and fire and hazard insurance
coverage. The
Servicer shall obtain, from time to time, all bills for the
payment of such
charges (including renewal premiums) and shall effect payment
thereof prior to
the applicable penalty or termination date and at a time
appropriate for
securing maximum discounts allowable, employing for such
purpose deposits
of the Mortgagor in the Escrow Account, if any, which shall
have been
estimated and accumulated by the Servicer in amounts sufficient
for
such purposes,
as allowed under the terms of the Mortgage. To the extent that
a Mortgage does
not provide for Escrow Payments, the Servicer shall determine
that any such
payments are made by the Mortgagor. The Servicer assumes full
responsibility
for the timely payment of all such bills and shall effect
timely payments
of all such bills irrespective of each Mortgagor's faithful
performance in
the payment of same or the making of the Escrow Payments. The
Servicer shall
advance any such payments that are not timely paid, but the
Servicer shall
be required so to advance only to the extent that such
Servicing
Advances, in the good faith judgment of the Servicer, will be
recoverable by
the Servicer out of Insurance Proceeds, Liquidation Proceeds
or
otherwise.
Section 3.10 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Servicer shall afford the Trustee
reasonable
access to all records and documentation regarding the Mortgage
Loans and all
accounts, insurance information and other matters relating to this
Agreement,
such access being afforded without charge, but only upon reasonable
request and
during normal business hours at the office designated by the
Servicer.
Section 3.11 Permitted Withdrawals from the Servicer Custodial
Account and Certificate Account. (a) The Servicer may from time to
time make
withdrawals from the Servicer Custodial Account, for the following
purposes:
(i) to pay to the Servicer (to the extent not previously
retained),
the
Servicing Compensation to which it is entitled pursuant to
Section
3.17;
(ii) to reimburse the Servicer for unreimbursed Advances made by
it,
such right
of reimbursement pursuant to this clause (ii) being limited to
amounts
received on the Mortgage Loan(s) (including amounts received in
respect of
BPP Mortgage Loan Payments for such Mortgage Loan) in respect
of which
any such Advance was made;
(iii) to reimburse the
Servicer for any Nonrecoverable Advance
previously
made;
(iv) to reimburse the Servicer for Insured Expenses from the
related
Insurance
Proceeds;
(v) to pay to the purchaser, with respect to each Mortgage Loan
or
REO
Property that has been purchased pursuant to Section 2.02 or 2.04,
all
amounts
received thereon after the date of such purchase;
(vi) to reimburse the Servicer or the Depositor for expenses
incurred
by any of them and reimbursable pursuant to Section 7.03;
(vii) to withdraw any amount deposited in the Servicer
Custodial
Account
and not required to be deposited therein;
(viii) on or prior to the Remittance Date, to withdraw an
amount
equal to
the related Interest Remittance Amount and Principal Remittance
Amount for
such Distribution Date, to the extent on deposit, and remit
such
amount in immediately available funds to the Trustee for deposit
in
the
Certificate Account; and
(ix) to clear and terminate the Servicer Custodial Account upon
termination of this Agreement pursuant to Section 10.01.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying
any
withdrawal from the Servicer Custodial Account pursuant to clauses
(i), (ii),
(iv) and (v). Prior to making any withdrawal from the Servicer
Custodial Account
pursuant to clause (iii), the Servicer shall deliver to the Trustee
an Officer's
Certificate of a Servicing Officer indicating the amount of any
previous Advance
determined by the Servicer to be a Nonrecoverable Advance and
identifying the
related Mortgage Loan(s) and their respective portions of such
Nonrecoverable
Advance. The Servicer shall notify the Depositor and the Trustee of
the amount,
purpose and party paid pursuant to clause (vi) above.
(b) The Trustee shall be deemed to withdraw funds from the
Certificate Account for distributions to Certificateholders in the
manner
specified in this Agreement. In addition, the Trustee may from time
to time make
withdrawals from the Certificate Account for the following
purposes:
(i) to pay to itself the Trustee Fee, to the extent not paid
under
Section
5.02(a);
(ii) to pay to itself as additional compensation earnings on or
investment
income with respect to funds in the Certificate Account and any
other
amounts (other than the Trustee Fee) due to it under this
Agreement
for the
related Distribution Date;
(iii) to withdraw and return to the Servicer any amount deposited
in
the
Certificate Account and not required to be deposited therein;
and
(iv) to clear and terminate the Certificate Account upon
termination
of this
Agreement pursuant to Section 10.01.
The Trustee shall notify the Depositor and the Servicer of the
amount and purpose of any payments made pursuant to clause (ii)
above (other
than any earnings or investment income with respect to funds in the
Certificate
Account).
Section 3.12 Maintenance of Hazard Insurance. The Servicer
shall
cause to be maintained for each Mortgage Loan, fire and hazard
insurance with
extended coverage customary in the area where the Mortgaged
Property is located
in an amount which is at least equal to the lesser of (a) the full
insurable
value of the Mortgaged Property or (b) the greater of (i) the
outstanding
principal balance owing on the Mortgage Loan and (ii) an amount
such that the
proceeds of such insurance shall be sufficient to avoid the
application to the
Mortgagor or loss payee of any coinsurance clause under the policy.
If the
Mortgaged Property is in an area identified in the Federal Register
by the
Federal Emergency Management Agency as having special flood hazards
(and such
flood insurance has been made available) the Servicer will cause to
be
maintained a flood insurance policy meeting the requirements of the
current
guidelines of the Federal Insurance Administration and the
requirements of
Fannie Mae or Freddie Mac. The Servicer shall also maintain on REO
Property,
fire and hazard insurance with extended coverage in an amount which
is at least
equal to the maximum insurable value of the improvements which are
a part of
such property, liability insurance and, to the extent required,
flood insurance
in an amount required above. Any amounts collected by the Servicer
under any
such policies (other than amounts to be deposited in an Escrow
Account and
applied to the restoration or repair of the property subject to the
related
Mortgage or property acquired in liquidation of the Mortgage Loan,
or to be
released to the Mortgagor in accordance with Customary Servicing
Procedures)
shall be deposited in the Servicer Custodial Account, subject to
withdrawal
pursuant to Section 3.11(a). It is understood and agreed that no
earthquake or
other additional insurance need be required by the Servicer of any
Mortgagor or
maintained on REO Property, other than pursuant to such applicable
laws and
regulations as shall at any time be in force and as shall require
such
additional insurance. All policies required hereunder shall be
endorsed with
standard mortgagee clauses with loss payable to the Servicer, and
shall provide
for at least 30 days' prior written notice of any cancellation,
reduction in
amount or material change in coverage to the Servicer.
The hazard insurance policies for each Mortgage Loan secured by
a
unit in a condominium development or planned unit development shall
be
maintained with respect to such Mortgage Loan and the related
development in a
manner which is consistent with Fannie Mae requirements.
Notwithstanding the foregoing, the Servicer may maintain a
blanket
policy insuring against hazard losses on all of the Mortgaged
Properties
relating to the Mortgage Loans in lieu of maintaining the required
hazard
insurance policies for each Mortgage Loan and may maintain a
blanket policy
insuring against special flood hazards in lieu of maintaining any
required flood
insurance. Any such blanket policies shall (A) be consistent with
prudent
industry standards, (B) name the Servicer as loss payee, (C)
provide coverage in
an amount equal to the aggregate unpaid principal balance on the
related
Mortgage Loans without co-insurance, and (D) otherwise comply with
the
requirements of this Section 3.12. Any such blanket policy may
contain a
deductible clause; provided that if any Mortgaged Property is not
covered by a
separate policy otherwise complying with this Section 3.12 and a
loss occurs
with respect to such Mortgaged Property which loss would have been
covered by
such a policy, the Servicer shall deposit in the Servicer Custodial
Account the
difference, if any, between the amount that would have been payable
under a
separate policy complying with this Section 3.12 and the amount
paid under such
blanket policy.
Section 3.13 Enforcement of Due-On-Sale Clauses; Assumption
Agreements. (a) Except as otherwise provided in this Section 3.13,
when any
Mortgaged Property subject to a Mortgage has been conveyed by the
Mortgagor, the
Servicer shall use reasonable efforts, to the extent that it has
actual
knowledge of such conveyance, to enforce any due-on-sale clause
contained in any
Mortgage Note or Mortgage, to the extent permitted under applicable
law and
governmental regulations, but only to the extent that such
enforcement will not
adversely affect or jeopardize coverage under any Required
Insurance Policy.
Notwithstanding the foregoing, the Servicer is not required to
exercise such
rights with respect to a Mortgage Loan if the Person to whom the
related
Mortgaged Property has been conveyed or is proposed to be conveyed
satisfies the
terms and conditions contained in the Mortgage Note and Mortgage
related thereto
and the consent of the mortgagee under such Mortgage Note or
Mortgage is not
otherwise required under such Mortgage Note or Mortgage as a
condition to such
transfer. If (i) the Servicer is prohibited by law from enforcing
any such
due-on-sale clause, (ii) coverage under any Required Insurance
Policy would be
adversely affected, (iii) the Mortgage Note does not include a
due-on-sale
clause or (iv) nonenforcement is otherwise permitted hereunder, the
Servicer is
authorized, subject to Section 3.13(b), to take or enter into an
assumption and
modification agreement from or with the Person to whom such
Mortgaged Property
has been or is about to be conveyed, pursuant to which such Person
becomes
liable under the Mortgage Note and, unless prohibited by applicable
state law,
the Mortgagor remains liable thereon; provided that the Mortgage
Loan shall
continue to be covered (if so covered before the Servicer enters
such agreement)
by the applicable Required Insurance Policies. The Servicer,
subject to Section
3.13(b), is also authorized with the prior approval of the insurers
under any
Required Insurance Policies to enter into a substitution of
liability agreement
with such Person, pursuant to which the original Mortgagor is
released from
liability and such Person is substituted as Mortgagor and becomes
liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer
shall not be
deemed to be in default under this Section 3.13 by reason of any
transfer or
assumption which the Servicer reasonably believes it is restricted
by law from
preventing, for any reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale
clause
to the extent
set forth in Section 3.13(a), in any case in which a Mortgaged
Property has
been conveyed to a Person by a Mortgagor, and such Person is to
enter into an
assumption agreement or modification agreement or supplement to
the Mortgage
Note or Mortgage or if an instrument of release is required
releasing the
Mortgagor from liability on the Mortgage Loan, the Servicer
shall prepare
and execute the assumption agreement with the Person to whom
the Mortgaged
Property is to be conveyed and such modification agreement or
supplement to
the Mortgage Note or Mortgage or other instruments as are
reasonable or
necessary to carry out the terms of the Mortgage Note or
Mortgage or
otherwise to comply with any applicable laws regarding
assumptions or
the transfer of the Mortgaged Property to such Person. In
connection with
any such assumption, no material term of the Mortgage Note
may be changed.
In addition, the substitute Mortgagor and the Mortgaged
Property must be
acceptable to the Servicer in accordance with its
underwriting
standards as then in effect. Together with each such
substitution,
assumption or other agreement or instrument, the Servicer shall
execute an
Officer's Certificate signed by a Servicing Officer stating
that
the requirements
of this subsection have been met. The Servicer shall notify
the Trustee that
any such substitution or assumption agreement has been
completed by
forwarding to the Trustee (or at the direction of the Trustee,
the Custodian)
the Officer's Certificate described in the previous sentence
and the original
of such substitution or assumption agreement, which in the
case of the
original shall be added to the related Mortgage File and shall,
for all
purposes, be considered a part of such Mortgage File to the
same
extent as all
other documents and instruments constituting a part thereof.
Any fee
collected by the Servicer for entering into an assumption or
substitution of
liability agreement may be retained by the Servicer as
additional
Servicing Compensation.
Section 3.14
Realization Upon Defaulted Mortgage Loans; REO
Property. Subject to Section 3.21, the Servicer shall use
reasonable efforts to
foreclose upon or otherwise comparably convert the ownership of
Mortgaged
Properties securing such of the Mortgage Loans as come into and
continue in
default and as to which no satisfactory arrangements can be made
for collection
of delinquent payments. In connection with such foreclosure or
other conversion,
the Servicer shall follow Customary Servicing Procedures and shall
meet the
requirements of the insurer under any Required Insurance Policy;
provided,
however, that the Servicer may enter into a special servicing
agreement with an
unaffiliated Holder of 100% Percentage Interest of a Class of
Subordinate
Certificates or a holder of a class of securities representing
interests in the
Subordinate Certificates alone or together with other subordinated
mortgage
pass-through certificates. Such agreement shall be substantially in
the form
attached hereto as Exhibit K or subject to each Rating Agency's
acknowledgment
that the ratings of the Certificates in effect immediately prior to
the entering
into such agreement would not be qualified, downgraded or withdrawn
and the
Certificates would not be placed on credit review status (except
for possible
upgrading) as a result of such agreement. Any such agreement may
contain
provisions whereby such holder may instruct the Servicer to
commence or delay
foreclosure proceedings with respect to delinquent Mortgage Loans
and will
contain provisions for the deposit of cash by the holder that would
be available
for distribution to Certificateholders if Liquidation Proceeds are
less than
they otherwise may have been had the Servicer acted in accordance
with its
normal procedures. Notwithstanding the foregoing, the Servicer
shall not be
required to expend its own funds in connection with any foreclosure
or towards
the restoration of any Mortgaged Property unless it shall determine
(i) that
such restoration and/or foreclosure will increase the proceeds of
liquidation of
the Mortgage Loan after reimbursement to itself of such expenses
and (ii) that
such expenses will be recoverable to it through proceeds of the
liquidation of
the Mortgage Loan (respecting which it shall have priority for
purposes of
withdrawals from the Servicer Custodial Account). Any such
expenditures shall
constitute Servicing Advances for purposes of this Agreement.
With respect to any REO Property, the deed or certificate of
sale
shall be taken in the name of the Trustee for the benefit of
the
Certificateholders, or its nominee, on behalf of the
Certificateholders. The
Trustee's name shall be placed on the title to such REO Property
solely as the
Trustee hereunder and not in its individual capacity. The Servicer
shall ensure
that the title to such REO Property references this Agreement and
the Trustee's
capacity hereunder. Pursuant to its efforts to sell such REO
Property, the
Servicer shall either itself or through an agent selected by the
Servicer
manage, conserve, protect and operate such REO Property in the same
manner that
it manages, conserves, protects and operates other foreclosed
property for its
own account and in the same manner that similar property in the
same locality as
the REO Property is managed. Incident to its conservation and
protection of the
interests of the Certificateholders, the Servicer may rent the
same, or any part
thereof, as the Servicer deems to be in the best interest of
the
Certificateholders for the period prior to the sale of such REO
Property. The
Servicer shall prepare for and deliver to the Trustee a statement
with respect
to each REO Property that has been rented, if any, showing the
aggregate rental
income received and all expenses incurred in connection with the
management and
maintenance of such REO Property at such times as is necessary to
enable the
Trustee to comply with the reporting requirements of the REMIC
Provisions;
provided, however, that the Servicer shall have no duty to rent any
REO Property
on behalf of the Trust. The net monthly rental income, if any, from
such REO
Property shall be deposited in the Servicer Custodial Account no
later than the
close of business on each Determination Date. The Servicer shall
perform, with
respect to the Mortgage Loans, the tax reporting and withholding
required by
Sections 1445 and 6050J of the Code with respect to foreclosures
and
abandonments, the tax reporting required by Section 6050H of the
Code with
respect to the receipt of mortgage interest from individuals and,
if required by
Section 6050P of the Code with respect to the cancellation of
indebtedness by
certain financial entities, by preparing such tax and information
returns as may
be required, in the form required.
If the Trust acquires any Mortgaged Property as described above
or
otherwise in connection with a default or a default which is
reasonably
foreseeable on a Mortgage Loan, the Servicer shall dispose of such
Mortgaged
Property prior to the end of the third calendar year following the
year of its
acquisition by the Trust (such period, the "REO Disposition
Period") unless (A)
the Trustee shall have been supplied by the Servicer with an
Opinion of Counsel
to the effect that the holding by the Trust of such Mortgaged
Property
subsequent to the REO Disposition Period will not result in the
imposition of
taxes on "prohibited transactions" (as defined in Section 860F of
the Code) on
either REMIC 1 or REMIC 2 or cause either REMIC created hereunder
to fail to
qualify as a REMIC at any time that any Certificates are
outstanding, or (B) the
Trustee (at the Servicer's expense) or the Servicer shall have
applied for,
prior to the expiration of the REO Disposition Period, an extension
of the REO
Disposition Period in the manner contemplated by Section 856(e)(3)
of the Code.
If such an Opinion of Counsel is provided or such an exemption is
obtained, the
Trust may continue to hold such Mortgaged Property (subject to any
conditions
contained in such Opinion of Counsel) for the applicable period.
Notwithstanding
any other provision of this Agreement, no Mortgaged Property
acquired by the
Trust shall be rented (or allowed to continue to be rented) or
otherwise used
for the production of income by or on behalf of the Trust in such a
manner or
pursuant to any terms that would (i) cause such Mortgaged Property
to fail to
qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of
the Code or (ii) subject either REMIC created hereunder to the
imposition of any
federal, state or local income taxes on the income earned from such
Mortgaged
Property under Section 860G(c) of the Code or otherwise, unless the
Servicer has
agreed to indemnify and hold harmless the Trust with respect to the
imposition
of any such taxes. The Servicer shall identify to the Trustee any
Mortgaged
Property relating to a Mortgage Loan held by the Trust for 30
months for which
no plans to dispose of such Mortgaged Property by the Servicer have
been made.
After delivery of such identification, the Servicer shall proceed
to dispose of
any such Mortgaged Property by holding a commercially reasonable
auction for
such property.
The income earned from the management of any REO Properties, net
of
reimbursement to the Servicer for expenses incurred (including any
property or
other taxes) in connection with such management and net of
unreimbursed
Servicing Fees, Periodic Advances and Servicing Advances, shall be
applied to
the payment of principal of and interest on the related defaulted
Mortgage Loans
(solely for the purposes of allocating principal and interest,
interest shall be
treated as accruing as though such Mortgage Loans were still
current) and all
such income shall be deemed, for all purposes in this Agreement, to
be payments
on account of principal and interest on the related Mortgage Notes
and shall be
deposited into the Servicer Custodial Account. To the extent the
net income
received during any calendar month is in excess of the amount
attributable to
amortizing principal and accrued interest at the related Mortgage
Interest Rate
on the related Mortgage Loan for such calendar month, such excess
shall be
considered to be a partial prepayment of principal of the related
Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as
any
income from an REO Property, will be applied in the following order
of priority:
first, to reimburse the Servicer for any related unreimbursed
Servicing Advances
and Servicing Fees; second, to reimburse the Servicer for any
unreimbursed
Periodic Advances and to reimburse the Servicer Custodial Account
for any
Nonrecoverable Advances (or portions thereof) that were previously
withdrawn by
the Servicer pursuant to Section 3.11(a)(iii) that related to such
Mortgage
Loan; third, to accrued and unpaid interest (to the extent no
Periodic Advance
has been made for such amount or any such Periodic Advance has been
reimbursed)
on the Mortgage Loan or related REO Property, at the Mortgage
Interest Rate to
the Due Date occurring in the month in which such amounts are
required to be
distributed; and fourth, as a recovery of principal of the Mortgage
Loan. Excess
Proceeds, if any, from the liquidation of a Liquidated Mortgage
Loan will be
retained by the Servicer as additional Servicing Compensation
pursuant to
Section 3.17.
Section 3.15 Trustee to Cooperate; Release of Mortgage Files.
Upon
the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a
notification that payment in full will be escrowed in a manner
customary for
such purposes, the Servicer will immediately notify the Trustee
(or, at the
direction of the Trustee, the Custodian) by delivering, or causing
to be
delivered, two copies (one of which will be returned to the
Servicer with the
Mortgage File) of a Request for Release (which may be delivered in
an electronic
format acceptable to the Trustee and the Servicer). Upon receipt of
such
request, the Trustee or the Custodian, as applicable, shall within
seven
Business Days release the related Mortgage File to the Servicer.
The Trustee
shall deliver to the Servicer the Mortgage Note with written
evidence of
cancellation thereon. If the Mortgage has been recorded in the name
of MERS or
its designee, the Servicer shall take all necessary action to
reflect the
release of the Mortgage on the records of MERS. Expenses incurred
in connection
with any instrument of satisfaction or deed of reconveyance shall
be chargeable
to the related Mortgagor. From time to time and as shall be
appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such
purpose
collection under any policy of flood insurance, any fidelity bond
or errors or
omissions policy, or for the purposes of effecting a partial
release of any
Mortgaged Property from the lien of the Mortgage or the making of
any
corrections to the Mortgage Note or the Mortgage or any of the
other documents
included in the Mortgage File, the Trustee or the Custodian, as
applicable,
shall, upon delivery to the Trustee (or, at the direction of the
Trustee, the
Custodian) of a Request for Release signed by a Servicing Officer,
release the
Mortgage File within seven Business Days to the Servicer. Subject
to the further
limitations set forth below, the Servicer shall cause the Mortgage
File so
released to be returned to the Trustee or the Custodian, as
applicable, when the
need therefor by the Servicer no longer exists, unless the Mortgage
Loan is
liquidated and the proceeds thereof are deposited in the Servicer
Custodial
Account, in which case the Servicer shall deliver to the Trustee or
the
Custodian, as applicable, a Request for Release, signed by a
Servicing Officer.
Upon prepayment in full of any Mortgage Loan or the receipt of
notice that funds for such purpose have been placed in escrow, the
Servicer
shall give an instrument of satisfaction (or Assignment of Mortgage
without
recourse) regarding the Mortgaged Property relating to such
Mortgage Loan, which
instrument of satisfaction or Assignment of Mortgage, as the case
may be, shall
be delivered to the Person entitled thereto against receipt of the
prepayment in
full. If the Mortgage is registered in the name of MERS or its
designee, the
Servicer shall take all necessary action to reflect the release on
the records
of MERS. In lieu of executing such satisfaction or Assignment of
Mortgage, or if
another document is required to be executed by the Trustee, the
Servicer may
deliver or cause to be delivered to the Trustee, for signature, as
appropriate,
any court pleadings, requests for trustee's sale or other documents
necessary to
effectuate such foreclosure or any legal action brought to obtain
judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to
obtain a
deficiency judgment or to enforce any other remedies or rights
provided by the
Mortgage Note or the Mortgage or otherwise available at law or in
equity.
Section 3.16 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. The Servicer shall transmit to
the Trustee
or, at the direction of the Trustee, the Custodian as required by
this Agreement
all documents and instruments in respect of a Mortgage Loan coming
into the
possession of the Servicer from time to time and shall account
fully to the
Trustee for any funds received by the Servicer or which otherwise
are collected
by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any
Mortgage Loan. The documents constituting the Servicing File shall
be held by
the Servicer as custodian and bailee for the Trustee. All Mortgage
Files and
funds collected or held by, or under the control of, the Servicer
in respect of
any Mortgage Loans, whether from the collection of principal and
interest
payments or from Liquidation Proceeds, including but not limited
to, any funds
on deposit in the Servicer Custodial Account, shall be held by the
Servicer for
and on behalf of the Trustee and shall be and remain the sole and
exclusive
property of the Trustee, subject to the applicable provisions of
this Agreement.
The Servicer also agrees that it shall not knowingly create, incur
or subject
any Mortgage File or any funds that are deposited in the Servicer
Custodial
Account, Certificate Account or any Escrow Account, or any funds
that otherwise
are or may become due or payable to the Trustee for the benefit of
the
Certificateholders, to any claim, lien, security interest,
judgment, levy, writ
of attachment or other encumbrance created by the Servicer, or
assert by legal
action or otherwise any claim or right of setoff against any
Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan,
except, however,
that the Servicer shall be entitled to set off against and deduct
from any such
funds any amounts that are properly due and payable to the Servicer
under this
Agreement.
Section 3.17 Servicing Compensation. The Servicer shall be
entitled
out of each payment of interest on a Mortgage Loan (or portion
thereof) and
included in the Trust Estate to retain or withdraw from the
Servicer Custodial
Account an amount equal to the Servicing Fee for such Distribution
Date;
provided, however, that the aggregate Servicing Fee for the
Servicer relating to
the Mortgage Loans shall be reduced (but not below zero) by an
amount equal to
the Compensating Interest.
Any additional Servicing Compensation shall be retained by the
Servicer to the extent not required to be deposited in the Servicer
Custodial
Account pursuant to Section 3.08(b). The Servicer shall be required
to pay all
expenses incurred by it in connection with its servicing activities
hereunder
and shall not be entitled to reimbursement therefor except as
specifically
provided in this Agreement.
Section 3.18 Annual Statement as to Compliance. The Trustee and
the
Servicer shall deliver, and the Servicer shall cause each
Additional Servicer
engaged by it to deliver, in electronic form to the Depositor, the
Trustee and
each Rating Agency on or before March 5 of each year or if such day
is not a
Business Day, the next Business Day (with a 10 calendar day cure
period, but in
no event later than March 15), followed by a hard copy within 10
calendar days,
commencing in March 2007, a certificate in the form required by
Item 1123 of
Regulation AB, to the effect that (i) an authorized officer of the
Trustee, the
Servicer or the Additional Servicer, as the case may be, has
reviewed (or a
review has been made under his or her supervision of) such party's
activities
under this Agreement or such other applicable agreement in the case
of an
Additional Servicer, during the prior calendar year or portion
thereof and (ii)
to the best of such officer's knowledge, based on such review, such
party has
fulfilled all of its obligations under this Agreement, or such
other applicable
agreement in the case of an Additional Servicer, in all material
respects
throughout the prior calendar year or portion thereof or, if there
has been a
failure to fulfill any such obligation in any material respect,
specifying each
such failure known to such officer and the nature and status
thereof. Promptly
after receipt of each such certificate, the Depositor shall review
such
certificate and, if applicable, consult with the Servicer and the
Trustee as to
the nature of any failure to fulfill any obligation under the
Agreement, or such
other applicable agreement in the case of an Additional Servicer,
in any
material respect.
Section 3.19 Assessments of Servicing Compliance; Registered
Public
Accounting Firm Attestation Reports. (a) Each of the Servicer
and
the Trustee,
at its own expense, shall furnish, and shall cause any Servicing
Function
Participant engaged by it to furnish, at such party's expense, to
the Trustee
and the Depositor in electronic form, not later than March 5 of
each year or if
such day is not a Business Day, the next Business Day (with a 10
calendar day
cure period, but in no event later than March 15), followed by a
hard copy
within 10 calendar days, commencing in March 2007, a report on an
assessment of
compliance with the Servicing Criteria applicable to it that
contains (A) a
statement by such party of its responsibility for assessing
compliance with the
Servicing Criteria applicable to it, (B) a statement that such
party used the
Servicing Criteria to assess compliance with the Servicing Criteria
applicable
to it, (C) such party's assessment of compliance with the Servicing
Criteria
applicable to it as of and for the fiscal year covered by the Form
10-K required
to be filed pursuant to Section 3.22, including, if there has been
any material
instance of noncompliance with the Servicing Criteria applicable to
it, an
identification of each such failure and the nature and status
thereof, and (D) a
statement that a registered public accounting firm has issued an
attestation
report on such party's assessment of compliance with the Servicing
Criteria
applicable to such party as of and for such period.
Each such assessment of compliance report shall be addressed to
the
Depositor and the Servicer and signed by an autho
