EXHIBIT 4.1
================================================================================
WELLS FARGO ASSET SECURITIES CORPORATION,
Depositor
WELLS FARGO BANK, N.A.,
Servicer
WELLS FARGO BANK, N.A.,
Securities Administrator
and
HSBC Bank USA, National Association,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of December 21, 2006
Home Equity Asset-Backed Certificates, Series 2006-3
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined
Terms.....................................................
Section 1.02
Accounting........................................................
ARTICLE II
CONVEYANCE
OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01
Conveyance of Mortgage
Loans......................................
Section 2.02
Acceptance by
Custodian...........................................
Section 2.03
Repurchase or Substitution of Mortgage Loans by the
Depositor........................................................
Section 2.04
Representations and Warranties of the Depositor
with respect to the Mortgage
Loans...............................
Section 2.05
Representations, Warranties and Covenants of the
Servicer.........................................................
Section 2.06
Representations and Warranties of the
Depositor...................
Section 2.07 Issuance
of Certificates and the REMIC Regular
Interests........................................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer
to Act as Servicer.......................................
Section 3.02
Collection of Mortgage Loan
Payments..............................
Section 3.03
Realization Upon Defaulted Mortgage
Loans.........................
Section 3.04
Collection Account, Distribution Account, Excess
Reserve Fund Account and Supplemental Interest
Trust
Account....................................................
Section 3.05 Permitted
Withdrawals from the Collection Account.................
Section 3.06
Establishment of Escrow Accounts; Deposits in
Escrow
Accounts..................................................
Section 3.07 Permitted
Withdrawals From Escrow Account.........................
Section 3.08 Payment
of Taxes, Insurance and Other Charges;
Collections Thereunder; Primary Mortgage
Insurance...............
Section 3.09 Transfer
of Accounts..............................................
Section 3.10
Maintenance of Hazard
Insurance...................................
Section 3.11
Maintenance of Mortgage Impairment Insurance
Policy...............
Section 3.12 Fidelity
Bond, Errors and Omissions Insurance.....................
Section 3.13 Title,
Management and Disposition of REO Property.................
Section 3.14
Due-on-Sale Clauses; Assumption and Substitution
Agreements.......................................................
Section 3.15
Reserved..........................................................
Section 3.16 Optional
Purchases of 60+ Day Delinquent Loans....................
Section 3.17 Custodian
to Cooperate; Release of Files..........................
Section 3.18 Servicing
Compensation............................................
Section 3.19 Annual
Statement as to Compliance.................................
Section 3.20
Assessment of Servicing Compliance; Registered
Public Accounting Firm Attestation
Reports.......................
Section 3.21 Access to
Certain Documentation and Information
Regarding the Mortgage
Loans.....................................
Section 3.22
Obligations of the Servicer in Respect of
Compensating
Interest............................................
Section 3.23
Investment of Funds in the Collection Account and
the Distribution
Account.........................................
Section 3.24 Liability
of Servicer; Indemnification............................
Section 3.25 Reports
of Foreclosure and Abandonment of Mortgaged
Properties.......................................................
Section 3.26
Reserved..........................................................
Section 3.27 No
Personal Solicitation..........................................
Section 3.28 Exchange
Act Reports..............................................
Section 3.29 PMI
Policy; Claims Under the PMI Policy...........................
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest
Distributions............................................
Section 4.02
Distributions of Principal and Monthly Excess
Cashflow
Amounts.................................................
Section 4.03
Allocation of
Losses..............................................
Section 4.04 Method of
Distribution............................................
Section 4.05
Distributions on Book-Entry
Certificates..........................
Section 4.06
Statements........................................................
Section 4.07
Remittance Reports;
Advances......................................
Section 4.08 Tax
Treatment of Cap Carryover Amounts, the
Supplemental Interest Trust and the Interest Rate
Swap
Agreement...................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates..................................................
Section 5.02
Registration of Transfer and Exchange of
Certificates.....................................................
Section 5.03
Mutilated, Destroyed, Lost or Stolen
Certificates.................
Section 5.04 Persons
Deemed Owners.............................................
Section 5.05
Appointment of Paying
Agent.......................................
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability
of the Servicer and the Depositor.......................
Section 6.02 Merger or
Consolidation of, or Assumption of the
Obligations of, the Servicer or the
Depositor....................
Section 6.03
Limitation on Liability of the Servicer and
Others................
Section 6.04 Servicer
Not to Resign............................................
Section 6.05
Delegation of
Duties..............................................
ARTICLE VII
DEFAULT
Section 7.01 Servicer
Events of Termination....................................
Section 7.02 Trustee
to Act; Appointment of Successor..........................
Section 7.03 Waiver of
Defaults................................................
Section 7.04
Notification to
Certificateholders................................
Section 7.05 Survival
of Servicer Liabilities..................................
ARTICLE VIII
THE
TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01 Duties of
Trustee and Securities Administrator....................
Section 8.02 Certain
Matters Affecting the Trustee and the
Securities
Administrator.........................................
Section 8.03 Trustee
and Securities Administrator Not Liable for
Certificates or Mortgage
Loans...................................
Section 8.04 Trustee
and Securities Administrator May Own
Certificates.....................................................
Section 8.05 Trustee
and Securities Administrator Fees and
Expenses.........................................................
Section 8.06
Eligibility Requirements for Trustee and Securities
Administrator....................................................
Section 8.07
Resignation or Removal of Trustee and Securities
Administrator....................................................
Section 8.08 Successor
Trustee and Successor Securities
Administrator....................................................
Section 8.09 Merger or
Consolidation of Trustee or Securities
Administrator....................................................
Section 8.10
Appointment of Co-Trustee or Separate
Trustee.....................
Section 8.11
Limitation of
Liability...........................................
Section 8.12 Trustee
or Securities Administrator May Enforce
Claims Without Possession of
Certificates........................
Section 8.13 Suits for
Enforcement.............................................
Section 8.14 Waiver of
Bond Requirement........................................
Section 8.15 Waiver of
Inventory, Accounting and Appraisal
Requirement......................................................
Section 8.16
Appointment of
Custodian..........................................
Section 8.17
Indemnification of the Securities Administrator and
Depositor by the
Trustee.........................................
Section 8.18 Trustee
Errors and Omissions Policy...............................
Section 8.19
Securities Administrator Errors and Omissions
Policy...........................................................
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC
Administration..............................................
Section 9.02
Prohibited Transactions and
Activities............................
Section 9.03
Indemnification with Respect to Certain Taxes and
Loss of REMIC
Status.............................................
Section 9.04
[Reserved]........................................................
Section 9.05 Grantor
Trust Administration......................................
ARTICLE X
TERMINATION
Section 10.01
Termination.......................................................
Section 10.02 Additional Termination
Requirements...............................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01
Amendment.........................................................
Section 11.02 Recordation of Agreement;
Counterparts............................
Section 11.03 Limitation on Rights of
Certificateholders........................
Section 11.04 Governing Law;
Jurisdiction.......................................
Section 11.05
Notices...........................................................
Section 11.06 Severability of
Provisions........................................
Section 11.07 Article and Section
References....................................
Section 11.08 Notice to the Rating
Agencies.....................................
Section 11.09 Further
Assurances................................................
Section 11.10 Benefits of
Agreement.............................................
Section 11.11 Acts of
Certificateholders........................................
Section 11.12
Recharacterization................................................
Section 11.13 Regulation AB Compliance; Intent of Parties;
Reasonableness...................................................
<PAGE>
EXHIBITS:
Exhibit A-1 Form
of Class A-1 Certificates
Exhibit A-2 Form
of Class A-2 Certificates
Exhibit A-3 Form
of Class A-3 Certificates
Exhibit B-1 Form
of Class M-1 Certificates
Exhibit B-2 Form
of Class M-2 Certificates
Exhibit B-3 Form
of Class M-3 Certificates
Exhibit B-4 Form
of Class M-4 Certificates
Exhibit B-5 Form
of Class M-5 Certificates
Exhibit B-6 Form
of Class M-6 Certificates
Exhibit B-7 Form
of Class B-1 Certificates
Exhibit B-8 Form
of Class B-2 Certificates
Exhibit B-9 Form
of Class B-3 Certificates
Exhibit B-10 Form of
Class B-4 Certificates
Exhibit C-1 Form
of Class CE Certificates
Exhibit C-2 Form
of Class P Certificates
Exhibit C-3 Form
of Class R Certificate
Exhibit D
Addresses for Requesting Mortgage Loan Schedule
Exhibit E
Form of Request for Release
Exhibit F-1 Form
of Custodian's Initial Certification
Exhibit F-2 Form
of Custodian's Final Certification
Exhibit G
Form of Mortgage Loan Purchase Agreement
Exhibit H
Form of Lost Note Affidavit
Exhibit I
Form of ERISA Representation Letter
Exhibit J
Form of Rule 144A Investment Letter
Exhibit K
Form of Residual Certificate Transfer Affidavit
Exhibit L
Form of Transferor
Certificate for the B-4, Class CE,
Class P and Class R Certificates
Exhibit M
PMI Policy
Exhibit N-1 Form
of Interest Rate Swap Agreement
Exhibit N-2 Form
of Interest Rate Cap Agreement
Exhibit O
Form of Sarbanes-Oxley Certification
Exhibit P
Form of Certification of the Securities Administrator
to be Provided to Servicer
Exhibit Q
List of Recordation States
Exhibit R
Form of Custodial Agreement
Exhibit S
Servicing Criteria to be Addressed in Assessment of
Compliance
Exhibit T
Additional Form 10-D Disclosure
Exhibit U
Additional Form 10-K Disclosure
Exhibit V
Form 8-K Disclosure Information
Exhibit W
Additional Disclosure Notification
Exhibit W
Additional Disclosure Notification
<PAGE>
This Pooling and Servicing Agreement is dated as of December
21,
2006 (the "Agreement"), among WELLS FARGO ASSET SECURITIES
CORPORATION, as
depositor (the "Depositor"), WELLS FARGO BANK, N.A., as servicer
(the
"Servicer"), WELLS FARGO BANK, N.A., as securities administrator
(the
"Securities Administrator"), and HSBC BANK USA, NATIONAL
ASSOCIATION, as trustee
(the "Trustee").
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 Fund created hereunder. The Certificates will consist of
sixteen
Classes of Certificates, designated as (i) the Class A-1, Class A-2
and Class
A-3 Certificates, (ii) the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5
and Class M-6, (iii) the Class B-1, Class B-2, Class B-3 and Class
B-4
Certificates, (iv) the Class CE Certificates, (v) the Class P
Certificates and
(vi) the Class R Certificate.
The Trustee shall elect that five segregated asset pools within
the
Trust Fund (exclusive of (i) the Prepayment Penalties, the Servicer
Prepayment
Penalty Payment Amounts and the Originator Prepayment Penalty
Payment Amounts,
(ii) the Interest Rate Swap Agreement, (iii) the Interest Rate Cap
Agreement,
(iv) the Supplemental Interest Trust, (v) the Excess Reserve Fund
Account and
(vi) the right of the LIBOR Certificates to receive Cap Carryover
Amounts and
the obligation of the LIBOR Certificates to pay Class IO
Shortfalls) be treated
for federal income tax purposes as comprising five REMICs (each, a
"Trust REMIC"
or, in the alternative, "Pooling-Tier REMIC-1," "Pooling-Tier
REMIC-2,"
"Lower-Tier REMIC," "Upper-Tier REMIC" and "Class CE REMIC,"
respectively). The
Class CE Interest, Class IO Interest and each Class of LIBOR
Certificates (other
than (i) the right of each Class of LIBOR Certificates to receive
Cap Carryover
Amounts and the obligation to pay Class IO Shortfalls and (ii) the
right of the
Class CE Certificates to receive Net Swap Payments from the Swap
Provider and
Cap Payments from the Cap Provider, the obligation to pay Cap
Carryover Amounts
to Holders of the LIBOR Certificates and to pay Net Swap Payments
and Swap
Termination Payments to the Swap Provider, and the right to receive
Class IO
Shortfalls) represent ownership of one or more regular interests in
a REMIC for
purposes of the REMIC Provisions.
The Class R Certificate represents ownership of the sole class
of
residual interest in each of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the
Lower-Tier REMIC, the Upper-Tier REMIC and the Class CE REMIC for
purposes of
the REMIC Provisions.
The Start-up Day for each Trust REMIC is the Closing Date. The
latest possible maturity date for each regular interest is the
latest date
referenced in Section 9.01.
The Class CE REMIC shall hold as assets the Class UT-X Interest
and
the Class UT-IO Interest as set out below. The Upper-Tier REMIC
shall hold as
assets the several classes of uncertificated Lower-Tier Regular
Interests, set
out below. The Lower-Tier REMIC shall hold as assets the several
classes of
uncertificated Pooling-Tier REMIC-2 Regular Interests. Pooling-Tier
REMIC-2
shall hold as assets the several classes of uncertificated
Pooling-Tier REMIC-1
Regular Interests. Pooling-Tier REMIC-1 shall hold as assets the
assets of the
Trust Fund (exclusive of (i) the Prepayment Penalties, the Servicer
Prepayment
Penalty Payment Amounts and the Originator Prepayment Penalty
Payment Amounts,
(ii) the Interest Rate Swap Agreement, (iii) the Interest Rate Cap
Agreement,
(iv) the Supplemental Interest Trust, (v) the Excess Reserve Fund
Account, and
(vi) the right of the LIBOR Certificates to receive Cap Carryover
Amounts and
the obligation of the LIBOR Certificates to pay Class IO
Shortfalls).
For federal income tax purposes, each Class of LIBOR
Certificates,
the Class CE Certificates and the Class P Certificates represent
beneficial
ownership of portions of the Trust Fund which shall be treated as a
grantor
trust in accordance with Section 9.05.
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest is hereby designated
as a regular
interest in the Pooling-Tier REMIC-1. The Class PT1-R Interest is
hereby
designated as the sole class of residual interest in Pooling-Tier
REMIC-1. The
Class PT1-R Interest shall have no principal balance and no
interest rate.
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1
Initial Pooling-Tier
Regular Interest
Interest Rate
REMIC-1 Principal Amount
Class PT1-1
(1)
$56,550,677.00
Class PT1-2A
(2)
$4,009,769.75
Class PT1-2B
(3)
$4,009,769.75
Class PT1-3A
(2)
$11,605,231.54
Class PT1-3B
(3)
$11,605,231.54
Class PT1-4A
(2)
$11,975,124.84
Class PT1-4B
(3)
$11,975,124.84
Class PT1-5A
(2)
$12,306,905.76
Class PT1-5B
(3)
$12,306,905.76
Class PT1-6A
(2)
$12,599,223.48
Class PT1-6B
(3)
$12,599,223.48
Class PT1-7A
(2)
$12,850,865.45
Class PT1-7B
(3)
$12,850,865.45
Class PT1-8A
(2)
$13,060,998.13
Class PT1-8B
(3)
$13,060,998.13
Class PT1-9A
(2)
$13,228,936.29
Class PT1-9B
(3)
$13,228,936.29
Class PT1-10A
(2)
$13,353,993.15
Class PT1-10B
(3)
$13,353,993.15
Class PT1-11A
(2)
$13,436,169.57
Class PT1-11B
(3)
$13,436,169.57
Class PT1-12A
(2)
$13,474,527.18
Class PT1-12B
(3)
$13,474,527.18
Class PT1-13A
(2)
$13,470,317.13
Class PT1-13B
(3)
$13,470,317.13
Class PT1-14A
(2)
$13,419,103.29
Class PT1-14B
(3)
$13,419,103.29
Class PT1-15A
(2)
$13,217,040.62
Class PT1-15B
(3)
$13,217,040.62
Class PT1-16A
(2)
$12,972,765.30
Class PT1-16B
(3)
$12,972,765.30
Class PT1-17A
(2)
$12,705,710.51
Class PT1-17B
(3)
$12,705,710.51
Class PT1-18A
(2)
$12,417,267.88
Class PT1-18B
(3)
$12,417,267.88
Class PT1-19A
(2)
$12,112,722.64
Class PT1-19B
(3)
$12,112,722.64
Class PT1-20A
(2)
$11,451,242.14
Class PT1-20B
(3)
$11,451,242.14
Class PT1-21A
(2)
$10,787,794.84
Class PT1-21B
(3)
$10,787,794.84
Class PT1-22A
(2)
$10,148,448.18
Class PT1-22B
(3)
$10,148,448.18
Class PT1-23A
(2)
$9,547,812.35
Class PT1-23B
(3)
$9,547,812.35
Class PT1-24A
(2)
$8,964,273.04
Class PT1-24B
(3)
$8,964,273.04
Class PT1-25A
(2)
$8,436,190.39
Class PT1-25B
(3)
$8,436,190.39
Class PT1-26A
(2)
$7,939,825.35
Class PT1-26B
(3)
$7,939,825.35
Class PT1-27A
(2)
$7,473,221.43
Class PT1-27B
(3)
$7,473,221.43
Class PT1-28A
(2)
$7,082,733.16
Class PT1-28B
(3)
$7,082,733.16
Class PT1-29A
(2)
$15,226,250.07
Class PT1-29B
(3)
$15,226,250.07
Class PT1-30A
(2)
$14,118,528.26
Class PT1-30B
(3)
$14,118,528.26
Class PT1-31A
(2)
$11,804,552.10
Class PT1-31B
(3)
$11,804,552.10
Class PT1-32A
(2)
$9,887,963.80
Class PT1-32B
(3)
$9,887,963.80
Class PT1-33A
(2)
$8,299,552.31
Class PT1-33B
(3)
$8,299,552.31
Class PT1-34A
(2)
$6,982,245.66
Class PT1-34B
(3)
$6,982,245.66
Class PT1-35A
(2)
$5,889,084.49
Class PT1-35B
(3)
$5,889,084.49
Class PT1-36A
(2)
$4,984,049.50
Class PT1-36B
(3)
$4,984,049.50
Class PT1-37A
(2)
$4,232,528.74
Class PT1-37B
(3)
$4,232,528.74
Class PT1-38A
(2)
$3,605,708.36
Class PT1-38B
(3)
$3,605,708.36
Class PT1-39A
(2)
$2,841,489.27
Class PT1-39B
(3)
$2,841,489.27
Class PT1-40A
(2)
$2,289,499.03
Class PT1-40B
(3)
$2,289,499.03
Class PT1-41A
(2)
$1,906,815.31
Class PT1-41B
(3)
$1,906,815.31
Class PT1-42A
(2)
$1,626,847.83
Class PT1-42B
(3)
$1,626,847.83
Class PT1-43A
(2)
$1,413,758.15
Class PT1-43B
(3)
$1,413,758.15
Class PT1-44A
(2)
$1,246,331.40
Class PT1-44B
(3)
$1,246,331.40
Class PT1-45A
(2)
$1,111,323.18
Class PT1-45B
(3)
$1,111,323.18
Class PT1-46A
(2)
$1,000,221.26
Class PT1-46B
(3)
$1,000,221.26
Class PT1-47A
(2)
$937,202.20
Class PT1-47B
(3)
$937,202.20
Class PT1-48A
(2)
$884,052.37
Class PT1-48B
(3)
$884,052.37
Class PT1-49A
(2)
$15,663,783.39
Class PT1-49B
(3)
$15,663,783.39
----------
(1) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per
annum
rate (such rate, the
"Pooling-Tier REMIC-1 Interest Rate" for such Class)
equal to
the Pooling-Tier REMIC-1 WAC Rate.
(2) For any
Distribution Date (and the related Interest Accrual Period)
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per
annum
rate (such
rate, the "Pooling-Tier REMIC-1 Interest Rate" for such Class)
equal to
the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 WAC
Rate,
subject to
a maximum rate equal to the PT1 Cap.
(3) For any
Distribution Date (and the related Interest Accrual Period)
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per
annum
rate (such
rate, the "Pooling-Tier REMIC-1 Interest Rate" for such Class)
equal to
the excess, if any, of (A) the product of (i) 2 and (ii) the
Pooling-Tier REMIC-1 WAC Rate over (B) the PT1 Cap.
On each Distribution Date, the Securities Administrator shall
first
pay from the Trust Fund and charge as an expense of Pooling-Tier
REMIC-1 all
expenses of the Trust for such Distribution Date. Such expenses,
other than any
Servicing Fee and Insurer Fee, shall be allocated in the same
manner as Realized
Losses.
On each Distribution Date, the interest distributable in respect
of
the Mortgage Loans for such Distribution Date shall be deemed to be
distributed
to the Pooling-Tier REMIC-1 Regular Interests at the rates shown
above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries
and payments of principal in respect of the Mortgage Loans shall be
allocated to
the outstanding Pooling-Tier REMIC-1 Regular Interest with the
lowest numerical
denomination until the Pooling-Tier REMIC-1 Principal Amount of
such interest or
interests, as the case may be, is reduced to zero, provided that,
with respect
to Pooling-Tier REMIC-1 Regular Interests with the same numerical
denomination,
such Realized Losses, Subsequent Recoveries and payments of
principal shall be
allocated pro rata between such Pooling-Tier REMIC-1 Regular
Interests.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class
PT2-R
Interest, is hereby designated as a regular interest in
Pooling-Tier REMIC-2.
The Class PT2-R Interest is hereby designated as the sole class of
residual
interest in Pooling-Tier REMIC-2 and shall be represented by the
Class R
Certificate. The Class PT2-R Interest shall have no principal
balance and no
interest rate.
<TABLE>
<CAPTION>
Corresponding
Pooling-Tier Initial Pooling-Tier
Corresponding
Pooling-Tier
Corresponding
Pooling-Tier REMIC-2
REMIC-2
REMIC-2 Principal Pooling-Tier
REMIC-2 REMIC-1
Regular
Scheduled Crossover
Regular
Interest Interest
Rate
Amount
IO Interest
Interest
Distribution Date
----------------------- ------------- --------------------
-------------------- --------------- -------------------
<S>
<C>
<C>
<C>
<C>
<C>
Class PT2-1
(1)
$56,550,677.00
N/A
N/A
N/A
Class PT2-2A
(2)
$4,009,769.75
Class PT2-IO-2
N/A
N/A
Class PT2-2B
(3)
$4,009,769.75
N/A
N/A
N/A
Class PT2-3A
(2)
$11,605,231.54
Class PT2-IO-3
N/A
N/A
Class PT2-3B
(3)
$11,605,231.54
N/A
N/A
N/A
Class PT2-4A
(2)
$11,975,124.84
Class PT2-IO-4
N/A
N/A
Class PT2-4B
(3)
$11,975,124.84
N/A
N/A
N/A
Class PT2-5A
(2)
$12,306,905.76
Class PT2-IO-5
N/A
N/A
Class PT2-5B
(3)
$12,306,905.76
N/A
N/A
N/A
Class PT2-6A
(2)
$12,599,223.48
Class PT2-IO-6
N/A
N/A
Class PT2-6B
(3)
$12,599,223.48
N/A
N/A
N/A
Class PT2-7A
(2)
$12,850,865.45
Class PT2-IO-7
N/A
N/A
Class PT2-7B
(3)
$12,850,865.45
N/A
N/A
N/A
Class PT2-8A
(2)
$13,060,998.13
Class PT2-IO-8
N/A
N/A
Class PT2-8B
(3)
$13,060,998.13
N/A
N/A
N/A
Class PT2-9A
(2)
$13,228,936.29
Class PT2-IO-9
N/A
N/A
Class PT2-9B
(3)
$13,228,936.29
N/A
N/A
N/A
Class PT2-10A
(2)
$13,353,993.15
Class PT2-IO-10
N/A
N/A
Class PT2-10B
(3)
$13,353,993.15
N/A
N/A
N/A
Class PT2-11A
(2)
$13,436,169.57
Class PT2-IO-11
N/A
N/A
Class PT2-11B
(3)
$13,436,169.57
N/A
N/A
N/A
Class PT2-12A
(2)
$13,474,527.18
Class PT2-IO-12
N/A
N/A
Class PT2-12B
(3)
$13,474,527.18
N/A
N/A
N/A
Class PT2-13A
(2)
$13,470,317.13
Class PT2-IO-13
N/A
N/A
Class PT2-13B
(3)
$13,470,317.13
N/A
N/A
N/A
Class PT2-14A
(2)
$13,419,103.29
Class PT2-IO-14
N/A
N/A
Class PT2-14B
(3)
$13,419,103.29
N/A
N/A
N/A
Class PT2-15A
(2)
$13,217,040.62
Class PT2-IO-15
N/A
N/A
Class PT2-15B
(3)
$13,217,040.62
N/A
N/A
N/A
Class PT2-16A
(2)
$12,972,765.30
Class PT2-IO-16
N/A
N/A
Class PT2-16B
(3)
$12,972,765.30
N/A
N/A
N/A
Class PT2-17A
(2)
$12,705,710.51
Class PT2-IO-17
N/A
N/A
Class PT2-17B
(3)
$12,705,710.51
N/A
N/A
N/A
Class PT2-18A
(2)
$12,417,267.88
Class PT2-IO-18
N/A
N/A
Class PT2-18B
(3)
$12,417,267.88
N/A
N/A
N/A
Class PT2-19A
(2)
$12,112,722.64
Class PT2-IO-19
N/A
N/A
Class PT2-19B
(3)
$12,112,722.64
N/A
N/A
N/A
Class PT2-20A
(2)
$11,451,242.14
Class PT2-IO-20
N/A
N/A
Class PT2-20B
(3)
$11,451,242.14
N/A
N/A
N/A
Class PT2-21A
(2)
$10,787,794.84
Class PT2-IO-21
N/A
N/A
Class PT2-21B
(3)
$10,787,794.84
N/A
N/A
N/A
Class PT2-22A
(2)
$10,148,448.18
Class PT2-IO-22
N/A
N/A
Class PT2-22B
(3)
$10,148,448.18
N/A
N/A
N/A
Class PT2-23A
(2)
$9,547,812.35
Class PT2-IO-23
N/A
N/A
Class PT2-23B
(3)
$9,547,812.35
N/A
N/A
N/A
Class PT2-24A
(2)
$8,964,273.04
Class
PT2-IO-24
N/A
N/A
Class PT2-24B
(3)
$8,964,273.04
N/A
N/A
N/A
Class PT2-25A
(2)
$8,436,190.39
Class PT2-IO-25
N/A
N/A
Class PT2-25B
(3)
$8,436,190.39
N/A
N/A
N/A
Class PT2-26A
(2)
$7,939,825.35
Class PT2-IO-26
N/A
N/A
Class PT2-26B
(3)
$7,939,825.35
N/A
N/A
N/A
Class PT2-27A
(2)
$7,473,221.43
Class PT2-IO-27
N/A
N/A
Class PT2-27B
(3)
$7,473,221.43
N/A
N/A
N/A
Class PT2-28A
(2)
$7,082,733.16
Class PT2-IO-28
N/A
N/A
Class PT2-28B
(3)
$7,082,733.16
N/A
N/A
N/A
Class PT2-29A
(2)
$15,226,250.07
Class PT2-IO-29
N/A
N/A
Class PT2-29B
(3)
$15,226,250.07
N/A
N/A
N/A
Class PT2-30A
(2)
$14,118,528.26
Class PT2-IO-30
N/A
N/A
Class PT2-30B
(3)
$14,118,528.26
N/A
N/A
N/A
Class PT2-31A
(2)
$11,804,552.10
Class PT2-IO-31
N/A
N/A
Class PT2-31B
(3)
$11,804,552.10
N/A
N/A
N/A
Class PT2-32A
(2)
$9,887,963.80
Class PT2-IO-32
N/A
N/A
Class PT2-32B
(3)
$9,887,963.80
N/A
N/A
N/A
Class PT2-33A
(2)
$8,299,552.31
Class PT2-IO-33
N/A
N/A
Class PT2-33B
(3)
$8,299,552.31
N/A
N/A
N/A
Class PT2-34A
(2)
$6,982,245.66
Class PT2-IO-34
N/A
N/A
Class PT2-34B
(3)
$6,982,245.66
N/A
N/A
N/A
Class PT2-35A
(2)
$5,889,084.49
Class PT2-IO-35
N/A
N/A
Class PT2-35B
(3)
$5,889,084.49
N/A
N/A
N/A
Class PT2-36A
(2)
$4,984,049.50
Class PT2-IO-36
N/A
N/A
Class PT2-36B
(3)
$4,984,049.50
N/A
N/A
N/A
Class PT2-37A
(2)
$4,232,528.74
Class PT2-IO-37
N/A
N/A
Class PT2-37B
(3)
$4,232,528.74
N/A
N/A
N/A
Class PT2-38A
(2)
$3,605,708.36
Class PT2-IO-38
N/A
N/A
Class PT2-38B
(3)
$3,605,708.36
N/A
N/A
N/A
Class PT2-39A
(2)
$2,841,489.27
Class PT2-IO-39
N/A
N/A
Class PT2-39B
(3)
$2,841,489.27
N/A
N/A
N/A
Class PT2-40A
(2)
$2,289,499.03
Class PT2-IO-40
N/A
N/A
Class PT2-40B
(3)
$2,289,499.03
N/A
N/A
N/A
Class PT2-41A
(2)
$1,906,815.31
Class PT2-IO-41
N/A
N/A
Class PT2-41B
(3)
$1,906,815.31
N/A
N/A
N/A
Class PT2-42A
(2)
$1,626,847.83
Class PT2-IO-42
N/A
N/A
Class PT2-42B
(3)
$1,626,847.83
N/A
N/A
N/A
Class PT2-43A
(2)
$1,413,758.15
Class PT2-IO-43
N/A
N/A
Class PT2-43B
(3)
$1,413,758.15
N/A
N/A
N/A
Class PT2-44A
(2)
$1,246,331.40
Class PT2-IO-44
N/A
N/A
Class PT2-44B
(3)
$1,246,331.40
N/A
N/A
N/A
Class PT2-45A
(2)
$1,111,323.18
Class PT2-IO-45
N/A
N/A
Class PT2-45B
(3)
$1,111,323.18
N/A
N/A
N/A
Class PT2-46A
(2)
$1,000,221.26
Class PT2-IO-46
N/A
N/A
Class PT2-46B
(3)
$1,000,221.26
N/A
N/A
N/A
Class PT2-47A
(2)
$937,202.20
Class PT2-IO-47
N/A
N/A
Class PT2-47B
(3)
$937,202.20
N/A
N/A
N/A
Class PT2-48A
(2)
$884,052.37
Class PT2-IO-48
N/A
N/A
Class PT2-48B
(3)
$884,052.37
N/A
N/A
N/A
Class PT2-49A
(2)
$15,663,783.39
Class PT2-IO-49
N/A
N/A
Class PT2-49B
(3)
$15,663,783.39
N/A
N/A
N/A
Class PT2-IO-2
(4)
(4)
N/A
Class PT1-2A
January 2007
Class PT2-IO-3
(4)
(4)
N/A
Class PT1-3A
February 2007
Class PT2-IO-4
(4)
(4)
N/A
Class PT1-4A
March 2007
Class PT2-IO-5
(4)
(4)
N/A
Class PT1-5A
April 2007
Class PT2-IO-6
(4)
(4)
N/A
Class PT1-6A
May 2007
Class PT2-IO-7
(4)
(4)
N/A
Class PT1-7A
June 2007
Class PT2-IO-8
(4)
(4)
N/A
Class PT1-8A
July 2007
Class PT2-IO-9
(4)
(4)
N/A
Class PT1-9A
August 2007
Class PT2-IO-10
(4)
(4)
N/A
Class PT1-10A September
2007
Class PT2-IO-11
(4)
(4)
N/A
Class PT1-11A
October 2007
Class PT2-IO-12
(4)
(4)
N/A
Class PT1-12A
November 2007
Class PT2-IO-13
(4)
(4)
N/A
Class PT1-13A
December 2007
Class PT2-IO-14
(4)
(4)
N/A
Class PT1-14A
January 2008
Class PT2-IO-15
(4)
(4)
N/A
Class PT1-15A
February 2008
Class PT2-IO-16
(4)
(4)
N/A
Class PT1-16A
March 2008
Class PT2-IO-17
(4)
(4)
N/A
Class PT1-17A
April 2008
Class PT2-IO-18
(4)
(4)
N/A
Class PT1-18A
May 2008
Class PT2-IO-19
(4)
(4)
N/A
Class PT1-19A
June 2008
Class PT2-IO-20
(4)
(4)
N/A
Class PT1-20A
July 2008
Class PT2-IO-21
(4)
(4)
N/A
Class PT1-21A
August 2008
Class PT2-IO-22
(4)
(4)
N/A
Class PT1-22A September
2008
Class PT2-IO-23
(4)
(4)
N/A
Class PT1-23A
October 2008
Class PT2-IO-24
(4)
(4)
N/A
Class PT1-24A
November 2008
Class PT2-IO-25
(4)
(4)
N/A
Class PT1-25A
December 2008
Class PT2-IO-26
(4)
(4)
N/A
Class PT1-26A
January 2009
Class PT2-IO-27
(4)
(4)
N/A
Class PT1-27A
February 2009
Class PT2-IO-28
(4)
(4)
N/A
Class PT1-28A
March 2009
Class PT2-IO-29
(4)
(4)
N/A
Class PT1-29A
April 2009
Class PT2-IO-30
(4)
(4)
N/A
Class PT1-30A
May 2009
Class PT2-IO-31
(4)
(4)
N/A
Class PT1-31A
June 2009
Class PT2-IO-32
(4)
(4)
N/A
Class PT1-32A
July 2009
Class PT2-IO-33
(4)
(4)
N/A
Class PT1-33A
August 2009
Class PT2-IO-34
(4)
(4)
N/A
Class PT1-34A September
2009
Class PT2-IO-35
(4)
(4)
N/A
Class PT1-35A
October 2009
Class PT2-IO-36
(4)
(4)
N/A
Class PT1-36A
November 2009
Class PT2-IO-37
(4)
(4)
N/A
Class PT1-37A
December 2009
Class PT2-IO-38
(4)
(4)
N/A
Class PT1-38A
January 2010
Class PT2-IO-39
(4)
(4)
N/A
Class PT1-39A
February 2010
Class PT2-IO-40
(4)
(4)
N/A
Class PT1-40A
March 2010
Class PT2-IO-41
(4)
(4)
N/A
Class PT1-41A
April 2010
Class PT2-IO-42
(4)
(4)
N/A
Class PT1-42A
May 2010
Class PT2-IO-43
(4)
(4)
N/A
Class PT1-43A
June 2010
Class PT2-IO-44
(4)
(4)
N/A
Class PT1-44A
July 2010
Class PT2-IO-45
(4)
(4)
N/A
Class PT1-45A
August 2010
Class PT2-IO-46
(4)
(4)
N/A
Class PT1-46A September
2010
Class PT2-IO-47
(4)
(4)
N/A
Class PT1-47A
October 2010
Class PT2-IO-48
(4)
(4)
N/A
Class PT1-48A
November 2010
Class PT2-IO-49
(4)
(4)
N/A
Class PT1-49A
December 2010
</TABLE>
---------
(1) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate (such
rate, the "Pooling-Tier REMIC-2 Interest Rate" for such Class)
equal to
the Pooling-Tier REMIC-1 WAC Rate.
(2) For any
Distribution Date (and the related Interest Accrual Period)
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate (such
rate, the "Pooling-Tier REMIC-2 Interest Rate" for such Class)
equal to
the weighted average of the Pooling-Tier REMIC-1 Interest Rates
on the
Pooling-Tier REMIC-1 Regular Interests having an "A" in their
class
designation, provided that, on each Distribution Date on which
interest is
distributable on the Corresponding Pooling-Tier REMIC-2 IO
Interest, this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate equal
to Swap LIBOR subject to a maximum rate equal to the weighted
average of
the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1
Regular Interests having an "A" in their class designation.
(3) For any
Distribution Date (and the related Interest Accrual Period)
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per
annum
rate (such
rate, the "Pooling-Tier REMIC-2 Interest Rate" for such Class)
equal to
the weighted average of the Pooling-Tier REMIC-1 Interest Rates
on the
Pooling-Tier REMIC-1 Regular Interests having a "B" in their
class
designation.
(4) Each
Pooling-Tier REMIC-2 IO Interest is an interest-only interest
and
does not
have a principal balance. From the Closing Date through and
including
the Corresponding Scheduled Crossover Distribution Date, each
Pooling-Tier REMIC-2 IO Interest shall be entitled to receive
interest
that accrues on
the Corresponding Pooling-Tier REMIC-1 Regular Interest at
a rate
equal to the excess, if any, of (i) the Pooling-Tier REMIC-1
Interest
Rate for the Corresponding Pooling-Tier REMIC-1 Regular
Interest
over (ii)
Swap LIBOR. After the Corresponding Scheduled Crossover
Distribution Date, the Pooling-Tier REMIC-2 IO Interest shall not
accrue
interest.
On each Distribution Date, the interest distributable in respect
of
the Mortgage Loans for such Distribution Date shall be distributed
to the
Pooling-Tier REMIC-2 Regular Interests at the Pooling-Tier REMIC-2
Interest
Rates shown above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries
and payments of principal in respect of the Mortgage Loans shall be
allocated to
the outstanding Pooling-Tier REMIC-2 Regular Interests (other than
the
Pooling-Tier REMIC-2 IO Interests) with the lowest numerical
denomination until
the Pooling-Tier REMIC-2 Principal Amount of such interest or
interests, as the
case may be, is reduced to zero, provided however that, for
Pooling-Tier REMIC-2
Regular Interests with the same numerical denomination, such
Realized Losses,
Subsequent Recoveries and payments of principal shall be allocated
pro rata
between such Pooling-Tier REMIC-2 Regular Interests.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and
each
such interest, other than the Class LT-R Interest, is hereby
designated as a
regular interest in the Lower-Tier REMIC. The Class LT-R Interest
is hereby
designated as the sole class of residual interest in the Lower-Tier
REMIC and
shall be represented by the Class R Certificate. The Class LT-R
Interest shall
have no principal balance and no interest rate.
<TABLE>
<CAPTION>
Corresponding
Upper-Tier REMIC
Lower-Tier Regular Interest Lower-Tier
Interest Rate Initial
Lower-Tier Principal Amount
Regular Interest
---------------------------
------------------------
-----------------------------------
----------------
<S>
<C>
<C>
<C>
Class LT-A-1
(1)
1/2 Principal Balance of Corresponding
A-1
Upper-Tier REMIC Regular Interest
Class LT-A-2
(1)
1/2 Principal Balance of Corresponding
A-2
Upper-Tier REMIC Regular Interest
Class LT-A-3
(1)
1/2 Principal Balance of Corresponding
A-3
Upper-Tier REMIC Regular Interest
Class LT-M-1
(1)
1/2 Principal Balance of Corresponding
M-1
Upper-Tier REMIC Regular Interest
Class LT-M-2
(1)
1/2 Principal Balance of Corresponding
M-2
Upper-Tier REMIC Regular Interest
Class LT-M-3
(1)
1/2 Principal Balance of Corresponding
M-3
Upper-Tier REMIC Regular Interest
Class LT-M-4
(1)
1/2 Principal Balance of Corresponding
M-4
Upper-Tier REMIC Regular Interest
Class LT-M-5
(1)
1/2 Principal Balance of Corresponding
M-5
Upper-Tier REMIC Regular Interest
Class LT-M-6
(1)
1/2 Principal Balance of Corresponding
M-6
Upper-Tier REMIC Regular Interest
Class
LT-B-1
(1)
1/2 Principal Balance of Corresponding
B-1
Upper-Tier REMIC Regular Interest
Class LT-B-2
(1)
1/2 Principal Balance of Corresponding
B-2
Upper-Tier REMIC Regular Interest
Class LT-B-3
(1)
1/2 Principal Balance of Corresponding
B-3
Upper-Tier REMIC Regular Interest
Class LT-B-4
(1)
1/2 Principal Balance of Corresponding
B-4
Upper-Tier REMIC Regular Interest
Class
LT-Accrual
(1)
1/2 Pool Balance plus 1/2
N/A
Overcollateralization Amount
Class LT-IO
(2)
(2)
N/A
</TABLE>
----------
(1) The interest
rate with respect to any Distribution Date for these
interests
is a per annum variable rate equal to the weighted average of
the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) This
Lower-Tier Regular Interest is an interest-only interest and does
not
have a
Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier
Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
Each
Lower-Tier Regular Interest is hereby designated as a regular
interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2,
Class LT-A-3,
Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class
LT-M-5, Class
LT-M-6, Class LT-B-1, Class LT-B-2, Class LT-B-3 and Class LT-B-4
Interests are
hereby designated the LT-Accretion Directed Classes (the
"LT-Accretion Directed
Classes").
On each Distribution Date, 50% of the increase in the
Overcollateralization Amount shall be payable as a reduction of the
Lower-Tier
Principal Amount of the LT-Accretion Directed Classes (each such
Class will be
reduced by an amount equal to 50% of any increase in the
Overcollateralization
Amount that is attributable to a reduction in the Principal Balance
of its
Corresponding Class) and shall be accrued and added to the
Lower-Tier Principal
Amount of the Class LT-Accrual Interest. On each Distribution Date,
the increase
in the Lower-Tier Principal Amount of the Class LT-Accrual Interest
shall not
exceed interest accruals for such Distribution Date for the Class
LT-Accrual
Interest. In the event that: (i) 50% of the increase in the
Overcollateralization Amount exceeds (ii) interest accruals on the
Class
LT-Accrual Interest for such Distribution Date, the excess for such
Distribution
Date (accumulated with all such excesses for all prior Distribution
Dates) will
be added to any increase in the Overcollateralization Amount for
purposes of
determining the amount of interest accrual on the Class LT-Accrual
Interest
payable as principal on the LT-Accretion Directed Classes on the
next
Distribution Date pursuant to the first sentence of this paragraph.
All payments
of scheduled principal and prepayments of principal generated by
the Mortgage
Loans and all Subsequent Recoveries allocable to principal shall be
allocated
(i) 50% to the Class LT-Accrual Interest and (ii) 50% to the
LT-Accretion
Directed Classes (such principal payments and Subsequent Recoveries
shall be
allocated among such LT-Accretion Directed Classes in an amount
equal to 50% of
the principal amounts and Subsequent Recoveries allocated to their
respective
Corresponding Classes), until paid in full. Notwithstanding the
above, principal
payments allocated to the Class UT-X Interest that result in the
reduction in
the Overcollateralization Amount shall be allocated to the Class
LT-Accrual
Interest (until paid in full). Realized Losses shall be applied so
that after
all distributions have been made on each Distribution Date (i) the
Lower-Tier
Principal Amount of each of the LT-Accretion Directed Classes is
equal to 50% of
the Principal Balance of their Corresponding Class, and (ii) the
Class
LT-Accrual Interest is equal to 50% of the Pool Balance plus 50% of
the
Overcollateralization Amount. Any increase in the Principal Balance
of a Class
of LIBOR Certificates as a result of a Subsequent Recovery shall
increase the
Lower-Tier Principal Amount of the Corresponding Lower-Tier Regular
Interest by
50% of such increase, and the remaining 50% of such increase shall
increase the
Lower-Tier Principal Amount of the Class LT-Accrual Interest.
Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following interests, and
each
such interest, other than the Class UT-R Interest, is hereby
designated as a
regular interest in the Upper-Tier REMIC. The Class UT-R Interest
is hereby
designated as the sole class of residual interests in the
Upper-Tier REMIC and
shall be represented by the Class R Certificate. The Class UT-R
Interest shall
have no principal balance and no interest rate.
<TABLE>
<CAPTION>
Upper-Tier REMIC
Initial Principal
Corresponding Class
Regular Interest Upper-Tier
Interest Rate Upper-Tier
Amount
of Certificates
----------------
------------------------
-----------------
-------------------
<S>
<C>
<C>
<C>
Class A-1
(1)
$338,723,000.00
Class A-1
Class A-2
(1)
$309,822,000.00
Class A-2
Class A-3
(1)
$20,730,000.00
Class A-3
Class M-1
(1)
$51,550,000.00
Class M-1
Class M-2
(1)
$43,478,000.00
Class M-2
Class M-3
(1)
$14,351,000.00
Class M-3
Class M-4
(1)
$17,034,000.00
Class M-4
Class M-5
(1)
$15,690,000.00
Class M-5
Class M-6
(1)
$10,759,000.00
Class M-6
Class B-1
(1)
$9,862,000.00
Class B-1
Class B-2
(1)
$8,517,000.00
Class B-2
Class B-3
(1)
$12,552,000.00
Class B-3
Class B-4
(1)
$13,897,000.00
Class B-4
Class UT-IO
(2)
(2)
N/A
Class UT-X
(3)
(3)
N/A
</TABLE>
----------
(1) For any
Distribution Date (and the related Interest Accrual Period),
this
interest
shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the Pool Cap) for the Corresponding
Class of
Certificates, and (ii)
the Upper-Tier REMIC WAC Rate.
(2) This
interest is an interest-only interest and does not have a
principal
balance.
On each Distribution Date, the Class UT-IO Interest shall be
entitled
to receive all interest distributable on the Class LT-IO
Interest.
(3) The Class
UT-X Interest has an initial principal balance of
$29,585,677.00
but will
not accrue interest on such balance but will accrue interest on
a
notional
amount. As of any Distribution Date, the Class UT-X Interest
shall have
a notional amount equal to the aggregate of the Lower-Tier
Principal
Amounts of the Lower-Tier Regular Interests (other than the
Class
LT-IO Interest) as of the first day of the related Interest
Accrual
Period.
With respect to any Interest Accrual Period, the Class UT-X
Interest
shall bear interest at a rate equal to the excess, if any, of
the
Upper-Tier
REMIC WAC Rate over the product of (i) 2 and (ii) the weighted
average of
the Lower-Tier Interest Rates of the Lower-Tier REMIC Interests
(other
than the Class LT-IO Interest), where the Lower-Tier Interest
Rate
on the
Class LT-Accrual Interest is subject to a cap equal to zero and
each
LT-Accretion Directed Class is subject to a cap equal to the
Upper-Tier
Interest Rate on its Corresponding Class of Upper-Tier Regular
Interest.
With respect to any Distribution Date, interest that so accrues
on the
notional amount of the Class UT-X Interest shall be deferred in
an
amount
equal to any increase in the Overcollateralization Amount on
such
Distribution Date. Such deferred interest shall not itself bear
interest.
On each Distribution Date, interest distributable in respect of
the
Lower-Tier Interests for such Distribution Date shall be deemed to
be
distributed on the interests in the Upper-Tier REMIC at the rates
shown above,
provided that the Class UT-IO Interest shall be entitled to receive
interest
before any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the
Upper-Tier
Interests until the outstanding principal balance of each such
interest equals
the outstanding Principal Balance of the Corresponding Class of
Certificates as
of such Distribution Date.
Class CE REMIC
The Class CE REMIC shall issue the following classes of
interests.
The Class CE Interest and the Class IO Interest shall each
represent a regular
interest in the Class CE REMIC and the Class R Certificate shall
represent the
sole class of residual interest in the Class CE REMIC.
Class CE
Interest Class CE
REMIC
REMIC Designation
Rate
Principal
Amount
------------------- -------- ----------------
Class CE Interest
(1)
(1)
Class IO Interest
(2)
(2)
Class R-CE Interest (3)
(3)
----------
(1) The Class CE
Interest has an initial principal balance equal to the
initial
principal balance of the Class UT-X Interest and is entitled to
100% of
the interest and principal on the Class UT-X Interest on each
Distribution Date.
(2) This
interest is an interest-only interest and does not have a
principal
balance.
On each Distribution Date the Class IO Interest shall be
entitled
to receive
100% of the interest distributable on the Class UT-IO Interest.
(3) The Class
R-CE Interest does not have a principal balance or an interest
rate.
<PAGE>
Certificates
The following table sets forth (or describes) the Class
designation,
Original Principal Balance, the Pass-Through Rate and the Final
Scheduled
Distribution Date for each Class of Certificates comprising the
interests in the
Trust Fund created hereunder:
<TABLE>
<CAPTION>
============================ ==========================
=========================== =============================
Original Principal
Pass-Through
Final Scheduled
Class
Balance
Rate
Distribution Date*
---------------------------- --------------------------
--------------------------- -----------------------------
<S>
<C>
<C>
<C>
A-1
$338,723,000.00
(1)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
A-2
$309,822,000.00
(2)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
A-3
$20,730,000.00
(3)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
M-1
$51,550,000.00
(4)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
M-2
$43,478,000.00
(5)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
M-3
$14,351,000.00
(6)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
M-4
$17,034,000.00
(7)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
M-5
$15,690,000.00
(8)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
M-6
$10,759,000.00
(9)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
B-1
$9,862,000.00
(10)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
B-2
$8,517,000.00
(11)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
B-3
$12,552,000.00
(12)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
B-4
$13,897,000.00
(13)
January 25, 2037
---------------------------- --------------------------
--------------------------- -----------------------------
CE
(14)
(14)
N/A
---------------------------- --------------------------
--------------------------- -----------------------------
P
N/A
N/A
N/A
---------------------------- --------------------------
--------------------------- -----------------------------
R
N/A
N/A
N/A
---------------------------- --------------------------
--------------------------- -----------------------------
Total
$866,965,000.00
N/A
N/A
============================ ==========================
=========================== =============================
</TABLE>
*
Solely for purposes of Treasury Regulations Section
1.860G-1(a)(4)(iii),
the
Distribution Date following the maturity date for the Mortgage
Loan
with the
latest maturity date has been designated as the "latest
possible
maturity
date" for each Class of LIBOR Certificates, the Class CE
Interest
and the
Class IO Interest that represents one or more of the "regular
interests"
in the Upper-Tier REMIC.
(1) The
Pass-Through Rate for the Class A-1 Certificates during each
Interest
Accrual
Period is equal to the lesser of: (i) the Class A-1 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(2) The
Pass-Through Rate for the Class A-2 Certificates during each
Interest
Accrual
Period is equal to the lesser of: (i) the Class A-2 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(3) The
Pass-Through Rate for the Class A-3 Certificates during each
Interest
Accrual
Period is equal to the lesser of: (i) the Class A-3 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(4) The
Pass-Through Rate for the Class M-1 Certificates during each
Interest
Accrual
Period is equal to the lesser of: (i) the Class M-1 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(5) The
Pass-Through Rate for the Class M-2 Certificates during each
Interest
Accrual
Period is equal to the lesser of: (i) the Class M-2 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(6) The
Pass-Through Rate for the Class M-3 Certificates during each
Interest
Accrual
Period is equal to the lesser of: (i) the Class M-3 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(7) The
Pass-Through Rate for the Class M-4 Certificates during each
Interest
Accrual
Period is equal to the lesser of: (i) the Class M-4 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(8) The
Pass-Through Rate for the Class M-5 Certificates during each
Interest
Accrual
Period is equal to the lesser of: (i) the Class M-5 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(9) The
Pass-Through Rate for the Class M-6 Certificates during each
Interest
Accrual Period
is equal to the lesser of: (i) the Class M-6 Formula Rate
and (ii)
the Pool Cap for such Distribution Date.
(10) The Pass-Through
Rate for the Class B-1 Certificates during each Interest
Accrual
Period is equal to the lesser of: (i) the Class B-1 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(11) The Pass-Through
Rate for the Class B-2 Certificates during each Interest
Accrual
Period is equal to the lesser of: (i) the Class B-2 Formula
Rate
and (ii) the
Pool Cap for such Distribution Date.
(12) The Pass-Through
Rate for the Class B-3 Certificates during each Interest
Accrual
Period is equal to the lesser of: (i) the Class B-3 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(13) The Pass-Through
Rate for the Class B-4 Certificates during each Interest
Accrual
Period is equal to the lesser of: (i) the Class B-4 Formula
Rate
and (ii)
the Pool Cap for such Distribution Date.
(14) The Class CE
Certificates will represent beneficial ownership of (i) the
Class CE
Interest, (ii) the Class IO Interest, (iii) the right to
receive
Class IO
Shortfalls, (iv) amounts in the Supplemental Interest Trust,
including
the Interest Rate Cap Agreement and the Interest Rate Swap
Agreement
subject to the obligation to pay Net Swap Payments and Swap
Termination Payments to the Swap Provider and Cap Carryover Amounts
to the
LIBOR
Certificates and (v) amounts in the Excess Reserve Fund
Account,
subject to
the obligation to make payments from the Excess Reserve Fund
Account in
respect of Cap Carryover Amounts to the LIBOR Certificates. For
federal
income tax purposes, the Class CE Certificateholder's
obligation
to make
payments of Cap Carryover Amounts to the LIBOR Certificates
from
the Excess
Reserve Fund Account and the Supplemental Interest Trust shall
be treated
as payments made pursuant to a notional principal contract
between
the Class CE Certificateholders and each Class of LIBOR
Certificates. Such rights and obligations of the Class CE
Certificateholders and LIBOR Certificateholders shall be treated as
held
in a
portion of the Trust Fund that is treated as a grantor trust
under
subpart E,
Part I of subchapter J of the Code.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement or
in
the Preliminary Statement, the following words and phrases, unless
the context
otherwise requires, shall have the meanings specified in this
Article. Interest
on all LIBOR Certificates will be calculated on the basis of the
actual number
of days in the related Interest Accrual Period and a 360-day
year.
"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.
"Account" Any of the Collection Account, the Distribution
Account,
the Supplemental Interest Trust Account, the Excess Reserve Fund
Account or the
Escrow Account.
"Accrued Certificate Interest" With respect to each
Distribution
Date and Class of LIBOR Certificates, an amount equal to the
interest accrued at
the Pass-Through Rate set forth or described for such Class in the
table in the
Preliminary Statement under the caption "Certificates" during the
related
Interest Accrual Period on the Principal Balance of such Class of
Certificates,
reduced by such Class' Interest Percentage of any Current Interest
Shortfall for
such Distribution Date.
"Additional Form 10-D Disclosure" As defined in Section
3.28(a).
"Additional Form 10-K Disclosure" As defined in Section
3.28(b).
"Additional Servicer" As defined in Section 6.05.
"Adjustable Rate Mortgage Loan" A Mortgage Loan which has a rate
at
which interest accrues that adjusts based on the Index plus a
related Gross
Margin, as set forth and subject to the limitations in the related
Mortgage
Note.
"Adjustment Date" With respect to each Adjustable Rate Mortgage
Loan, each adjustment date on which the Mortgage Interest Rate
changes pursuant
to the related Mortgage Note. The first Adjustment Date following
the applicable
Cut-off Date as to each Adjustable Rate Mortgage Loan is set forth
in the
Mortgage Loan Schedule.
"Advance" As to any Mortgage Loan, any advance made by the
Servicer
in respect of any Distribution Date pursuant to Section 4.07 or if
the Servicer
fails to make any advance, by the Trustee pursuant to Section
7.01.
"Adverse REMIC Event" As defined in Section 9.01(f) hereof.
"Affiliate" With respect to any Person, any other Person
controlling, controlled by or under common control with such
Person. For
purposes of this definition, "control" means the power to direct
the management
and policies of a Person, directly or indirectly, whether through
ownership of
voting securities, by contract or otherwise and "controlling" and
"controlled"
shall have meanings correlative to the foregoing.
"Agreement" This Pooling and Servicing Agreement and all
amendments
and supplements hereto.
"Applicable Regulations" As to any Mortgage Loan, all federal,
state
and local laws, statutes, rules and regulations applicable
thereto.
"Applied Realized Loss Amount" With respect to each
Distribution
Date, the excess, if any, of (a) the aggregate of the Principal
Balances of the
Certificates (other than the Class CE, Class P and Residual
Certificates and
after giving effect to all distributions on such Distribution Date
and the
increase of any Principal Balances as a result of Subsequent
Recoveries) over
(b) the Pool Balance as of the end of the related Collection
Period.
"Assignment" An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient
under the laws of
the jurisdiction wherein the related Mortgaged Property is located
to reflect or
record the sale of the Mortgage.
"Available Funds" As to any Distribution Date, an amount equal
to
the excess of (i) the sum of: (a) the aggregate of the Monthly
Payments due
during the related Collection Period and received on or prior to
the related
Determination Date by the Servicer, (b) Liquidation Proceeds,
Insurance
Proceeds, Condemnation Proceeds, Principal Prepayments,
Substitution Adjustment
Amounts, the Purchase Price for any repurchased Mortgage Loan, the
Termination
Price with respect to the termination of the Trust pursuant to
Section 10.01
hereof and other unscheduled recoveries of principal and interest
(excluding
Prepayment Penalties, Originator Prepayment Penalty Payment Amounts
and Servicer
Prepayment Penalty Payment Amounts) in respect of the Mortgage
Loans during the
related Prepayment Period, (c) the aggregate of any amounts
received in respect
of an REO Property deposited in the Collection Account for such
Distribution
Date, (d) any Compensating Interest for such Distribution Date, (e)
the
aggregate of any Advances made by the Servicer or the Trustee for
such
Distribution Date and (f) any Reimbursement Amount or Subsequent
Recovery
deposited into the Collection Account during the related Prepayment
Period over
(ii) the sum of (a) amounts reimbursable or payable to the Servicer
pursuant to
Sections 3.05 or 6.03, (b) amounts reimbursable or payable to the
Trustee
pursuant to Section 7.01 or Section 8.05 and amounts reimbursable
or payable to
the Securities Administrator pursuant to Section 8.05 or Section
9.01(c), (c)
Stayed Funds, (d) the Servicing Fees and the Insurer Premium and
(e) amounts
deposited in the Collection Account or the Distribution Account, as
the case may
be, in error.
"Balloon Loan" A Mortgage Loan that provides for the payment of
the
unamortized principal balance of such Mortgage Loan in a single
payment at the
maturity of such Mortgage Loan that is substantially greater than
the preceding
monthly payment.
"Balloon Payment" A payment of the unamortized principal balance
of
a Mortgage Loan in a single payment at the maturity of such
Mortgage Loan that
is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code" Title 11 of the United States Code, as
amended.
"Book-Entry Certificates" Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the
ownership of which
is reflected on the books of the Depository or on the books of a
Person
maintaining an account with the Depository directly, as a
Depository
Participant, or indirectly, as an indirect participant in
accordance with the
rules of the Depository and as described in Section 5.02 hereof. On
the Closing
Date, the Class A-1, Class A-2, Class A-3, Class M-1, Class M-2,
Class M-3,
Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3
and Class B-4
Certificates shall be Book-Entry Certificates.
"Business Day" Any day other than (i) a Saturday or a Sunday or
(ii)
a legal holiday in the State of New York.
"Cap Carryover Amount" For any Distribution Date, the sum of (a)
if
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
Formula Rate,
over (ii) the amount of interest such Certificate received on such
Distribution
Date based on the Pool Cap, and (b) if the Pool Cap exceeds the
Upper-Tier REMIC
WAC Rate, the excess of (i) the lesser of the amount in clause
(a)(i) or clause
(a)(ii) over (ii) the amount of interest such Certificate would
have received on
such Distribution Date based on the Upper-Tier REMIC WAC Rate, in
each case
together with the unpaid portion of any such excess from prior
Distribution
Dates (and interest accrued thereon at the then applicable Formula
Rate on such
Certificate).
"Cap Early Termination" The occurrence of an early termination
under
the Interest Rate Cap Agreement.
"Cap Payment" With respect to any Distribution Date (other than
the
initial Distribution Date) up to and including the Distribution
Date in December
2010, the amount payable by the Cap Provider to the Supplemental
Interest Trust
pursuant to the Interest Rate Cap Agreement.
"Cap Provider" Barclays Bank PLC.
"Cap Termination Payment" The amount, if any, owed by the Cap
Provider to the Supplemental Interest Trust upon a Cap Early
Termination.
"Certificate" Any LIBOR Certificate, Class CE Certificate, Class
P
Certificate or Residual Certificate.
"Certificate Custodian" Initially, Wells Fargo Bank; thereafter
any
other Certificate Custodian acceptable to the Depository and
selected by the
Securities Administrator.
"Certificate Owner" With respect to each Book-Entry Certificate,
any
beneficial owner thereof.
"Certificate Register" and "Certificate Registrar" The register
maintained and registrar appointed pursuant to Section 5.02
hereof.
"Certificateholder" or "Holder" The Person in whose name a
Certificate is registered in the Certificate Register, except that
a
Disqualified Organization or non-U.S. Person shall not be a Holder
of a Residual
Certificate for any purpose hereof.
"Class" Collectively, Certificates or REMIC Regular Interests
which
have the same priority of payment and bear the same class
designation and the
form of which is identical except for variation in the Percentage
Interest
evidenced thereby.
"Class A Certificate" Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed
hereto as
Exhibit A-1, Exhibit A-2 and Exhibit A-3, executed by the
Securities
Administrator on behalf of the Trust and authenticated and
delivered by the
Certificate Registrar, representing the right to distributions as
set forth
herein and therein.
"Class A Certificateholders" Collectively, the Holders of the
Class
A Certificates.
"Class A-1 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.050% per annum, and (ii)
following the
Optional Termination Date, 0.100% per annum.
"Class A-1 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class A-1 Certificate Margin.
"Class A-2 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.150% per annum, and (ii)
following the
Optional Termination Date, 0.300% per annum.
"Class A-2 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class A-2 Certificate Margin.
"Class A-3 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.210% per annum, and (ii)
following the
Optional Termination Date, 0.420% per annum.
"Class A-3 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class A-3 Certificate Margin.
"Class B-1 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.750% per annum, and (ii)
following the
Optional Termination Date, 1.125% per annum.
"Class B-1 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class B-1 Certificate Margin.
"Class B-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 Principal
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
sum of the
Principal Balances of the Sequential Class M Certificates (after
taking into
account the payment of the Sequential Class M Principal
Distribution Amount on
such Distribution Date), (iii) the Principal 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), (iv) the Principal
Balance of
the Class M-5 Certificates (after taking into account the payment
of the Class
M-5 Principal Distribution Amount on such Distribution Date), (v)
the Principal
Balance of the Class M-6 Certificates (after taking into account
the payment of
the Class M-6 Principal Distribution Amount on such Distribution
Date) and (vi)
the Principal Balance of the Class B-1 Certificates immediately
prior to such
Distribution Date over (y) the lesser of (a) the product of (i)
85.60% and (ii)
the Pool Balance as of the last day of the related Collection
Period and (b) the
Overcollateralization Floor.
"Class B-1 Realized Loss Amortization Amount" As to the Class
B-1
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class B-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 4.02(b)(i) through (xx) hereof,
in each case
for such Distribution Date.
"Class B-2 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.900% per annum, and (ii)
following the
Optional Termination Date, 1.350% per annum.
"Class B-2 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class B-2 Certificate Margin.
"Class B-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 Principal
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
sum of the
Principal Balances of the Sequential Class M Certificates (after
taking into
account the payment of the Sequential Class M Principal
Distribution Amount on
such Distribution Date), (iii) the Principal 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), (iv) the Principal
Balance of
the Class M-5 Certificates (after taking into account the payment
of the Class
M-5 Principal Distribution Amount on such Distribution Date), (v)
the Principal
Balance of the Class M-6 Certificates (after taking payments into
account the
payments of the Class M-6 Principal Distribution Amount on such
Distribution
Date), (vi) the Principal Balance of the Class B-1 Certificates
(after taking
payments into account the payments of the Class B-1 Principal
Distribution
Amount on such Distribution Date) and (vii) the Principal Balance
of the Class
B-2 Certificates immediately prior to such Distribution Date over
(y) the lesser
of (a) the product of (i) 87.50% and (ii) the Pool Balance as of
the last day of
the related Collection Period and (b) the Overcollateralization
Floor.
"Class B-2 Realized Loss Amortization Amount" As to the Class
B-2
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class B-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 4.02(b)(i) through (xxiii)
hereof, in each
case for such Distribution Date.
"Class B-3 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 1.730% per annum, and (ii)
following the
Optional Termination Date, 2.595% per annum.
"Class B-3 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class B-3 Certificate Margin.
"Class B-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 Principal
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
sum of the
Principal Balances of the Sequential Class M Certificates (after
taking into
account the payment of the Sequential Class M Principal
Distribution Amount on
such Distribution Date), (iii) the Principal 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), (iv) the Principal
Balance of
the Class M-5 Certificates (after taking into account the payment
of the Class
M-5 Principal Distribution Amount on such Distribution Date), (v)
the Principal
Balance of the Class M-6 Certificates (after taking into account
the payment of
the Class M-6 Principal Distribution Amount on such Distribution
Date), (vi) the
Principal Balance of the Class B-1 Certificates (after taking into
account the
payment of the Class B-1 Principal Distribution Amount on such
Distribution
Date), (vii) the Principal Balance of the Class B-2 Certificates
(after taking
into account the payment of the Class B-2 Principal Distribution
Amount on such
Distribution Date) and (viii) the Principal Balance of the Class
B-3
Certificates immediately prior to such Distribution Date over (y)
the lesser of
(a) the product of (i) 90.30% and (ii) the Pool Balance as of the
last day of
the related Collection Period and (b) the Overcollateralization
Floor.
"Class B-3 Realized Loss Amortization Amount" As to the Class
B-3
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class B-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 4.02(b)(i) through (xxvi)
hereof, in each
case for such Distribution Date.
"Class B-4 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 2.250% per annum, and (ii)
following the
Optional Termination Date, 3.375% per annum.
"Class B-4 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class B-4 Certificate Margin.
"Class B-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 Principal
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
sum of the
Principal Balances of the Sequential Class M Certificates (after
taking into
account the payment of the Sequential Class M Principal
Distribution Amount on
such Distribution Date), (iii) the Principal 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), (iv) the Principal
Balance of
the Class M-5 Certificates (after taking into account the payment
of the Class
M-5 Principal Distribution Amount on such Distribution Date), (v)
the Principal
Balance of the Class M-6 Certificates (after taking into account
the payment of
the Class M-6 Principal Distribution Amount on such Distribution
Date), (vi) the
Principal Balance of the Class B-1 Certificates (after taking into
account the
payment of the Class B-1 Principal Distribution Amount on such
Distribution
Date), (vii) the Principal Balance of the Class B-2 Certificates
(after taking
into account the payment of the Class B-2 Principal Distribution
Amount on such
Distribution Date), (viii) the Principal Balance of the Class B-3
Certificates
(after taking into account the payment of the Class B-3 Principal
Distribution
Amount on such Distribution Date) and (ix) the Principal Balance of
the Class
B-4 Certificates immediately prior to such Distribution Date over
(y) the lesser
of (a) the product of (i) 93.40% and (ii) the Pool Balance as of
the last day of
the related Collection Period and (b) the Overcollateralization
Floor.
"Class B-4 Realized Loss Amortization Amount" As to the Class
B-4
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class B-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 4.02(b)(i) through (xxix)
hereof, in each
case for such Distribution Date.
"Class CE Certificates" Any one of the Class CE Certificates as
designated on the face thereof substantially in the form annexed
hereto as
Exhibit C-1, executed by the Securities Administrator on behalf of
the Trust and
authenticated and delivered by the Certificate Registrar,
representing the right
to distributions as set forth herein and therein.
"Class CE Distributable Amount" With respect to any
Distribution
Date, the sum of (i) the interest accrued on the Class CE Interest
at its
Pass-Through Rate calculated on its Notional Amount less the amount
of Cap
Carryover Amounts paid pursuant to Section 4.02(b)(xxxi), any Net
Swap Payments
paid to the Swap Provider and any Swap Termination Payments paid to
the Swap
Provider pursuant to Section 4.02(b)(xxxii), and (ii) any
remaining
Overcollateralization Release Amounts.
"Class CE Interest" As defined in the Preliminary Statement.
"Class CE REMIC" As defined in the Preliminary Statement.
"Class IO Interest" As defined in the Preliminary Statement.
"Class IO Shortfalls" As defined in Section 4.08. For the
avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall
equal the
amount payable by the Class CE Certificates in respect of amounts
due to the
Swap Provider on such Distribution Date (other than any Swap
Termination Payment
resulting from a Swap Provider Trigger Event) in excess of the
amount payable on
the Class CE Interest (prior to any reduction for Cap Carryover
Amounts or Swap
Termination Payments) and the Class IO Interest on such
Distribution Date, all
as further provided in Section 4.08.
"Class LT-A-1 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-A-1 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-A-2 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-A-2 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-A-3 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-A-3 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-Accrual Interest" One of the separate
non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-Accrual
Interest shall accrue interest at the related 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
1/2 of the Pool
Balance plus 1/2 of the Overcollateralization Amount, as set forth
in the
Preliminary Statement hereto.
"Class LT-B-1 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-B-1 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-B-2 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-B-2 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-B-3 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-B-3 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-B-4 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-B-4 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-1 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-M-1 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-2 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-M-2 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-3 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-M-3 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-4 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-M-4 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-5 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-M-5 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-6 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class
LT-M-6 Interest
shall accrue interest at the related 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 1/2 of the
initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular
Interest as set
forth in the Preliminary Statement hereto.
"Class LT-IO Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued
hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. The Class
LT-IO
Interest is an interest-only interest and does not have a
Lower-Tier Principal
Amount. On each Distribution Date, the Class LT-IO Interest shall
be entitled to
receive all interest distributable on the Pooling-Tier REMIC-2 IO
Interest.
"Class LT-R Interest" The residual interest in the Lower-Tier
REMIC
as described in the Preliminary Statement.
"Class M Certificate" Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed
hereto as
Exhibit B-1, Exhibit B-2, Exhibit B-3, Exhibit B-4, Exhibit B-5 and
Exhibit B-6,
executed by the Securities Administrator on behalf of the Trust
and
authenticated and delivered by the Certificate Registrar,
representing the right
to distributions as set forth herein and therein.
"Class M Certificateholders" Collectively, the Holders of the
Class
M Certificates.
"Class M-1 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.230% per annum, and (ii)
following the
Optional Termination Date, 0.345% per annum.
"Class M-1 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class M-1 Certificate Margin.
"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 4.02(b)(i) and (ii) hereof, in
each case for
such Distribution Date.
"Class M-2 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.270% per annum, and (ii)
following the
Optional Termination Date, 0.405% per annum.
"Class M-2 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class M-2 Certificate Margin.
"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 4.02(b)(i) through (v) hereof,
in each case
for such Distribution Date.
"Class M-3 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.300% per annum, and (ii)
following the
Optional Termination Date, 0.450% per annum.
"Class M-3 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class M-3 Certificate Margin.
"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 4.02(b)(i) through (viii)
hereof, in each
case for such Distribution Date.
"Class M-4 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.360% per annum, and (ii)
following the
Optional Termination Date, 0.540% per annum.
"Class M-4 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class M-4 Certificate Margin.
"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 Principal
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
sum of the
Principal Balances of the Sequential Class M Certificates (after
taking into
account the payment of the Sequential Class M Principal
Distribution Amount on
such Distribution Date) and (iii) the Principal Balance of the
Class M-4
Certificates immediately prior to such Distribution Date over (y)
the lesser of
(a) the product of (i) 77.50% and (ii) the Pool Balance as of the
last day of
the related Collection Period and (b) the Overcollateralization
Floor.
"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 4.02(b)(i) through (xi) hereof,
in each case
for such Distribution Date.
"Class M-5 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.380% per annum, and (ii)
following the
Optional Termination Date, 0.570% per annum.
"Class M-5 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class M-5 Certificate Margin.
"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 Principal
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
sum of the
Principal Balances of the Sequential Class M Certificates (after
taking into
account the payment of the Sequential Class M Principal
Distribution Amount on
such Distribution Date), (iii) the Principal 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 (iv) the
Principal Balance of
the Class M-5 Certificates immediately prior to such Distribution
Date over (y)
the lesser of (a) the product of (i) 81.00% and (ii) the Pool
Balance as of the
last day of the related Collection Period and (b) the
Overcollateralization
Floor.
"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 4.02(b)(i) through (xiv)
hereof, in each
case for such Distribution Date.
"Class M-6 Certificate Margin" For each Distribution Date (i) on
or
prior to the Optional Termination Date, 0.420% per annum, and (ii)
following the
Optional Termination Date, 0.630% per annum.
"Class M-6 Formula Rate" For each Distribution Date, a rate per
annum equal to One-Month LIBOR applicable to the related Interest
Accrual
Period, plus the Class M-6 Certificate Margin.
"Class M-6 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 Principal
Balances of
the Senior Certificates (after taking into account the payment of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
sum of the
Principal Balances of the Sequential Class M Certificates (after
taking into
account the payment of the Sequential Class M Principal
Distribution Amount on
such Distribution Date), (iii) the Principal 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), (iv) the Principal
Balance of
the Class M-5 Certificates (after taking into account the payment
of the Class
M-5 Principal Distribution Amount on such Distribution Date) and
(v) the
Principal Balance of the Class M-6 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (a) the product of (i)
83.40% and (ii)
the Pool Balance as of the last day of the related Collection
Period and (b) the
Overcollateralization Floor.
"Class M-6 Realized Loss Amortization Amount" As to the Class
M-6
Certificates and as of any Distribution Date, the lesser of (x) the
Unpaid
Realized Loss Amount for the Class M-6 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 4.02(b)(i) through (xvii)
hereof, in each
case for such Distribution Date.
"Class P Certificate" Any one of the Certificates with a "P"
designated on the face thereof substantially in the form annexed
hereto as
Exhibit C-2, executed by the Securities Administrator on behalf of
the Trust and
authenticated and delivered by the Certificate Registrar,
representing the right
to distributions as set forth herein and therein.
"Class PT1-R Interest" The residual interest in Pooling-Tier
REMIC-1
as described in the Preliminary Statement.
"Class PT2-R Interest" The residual interest in Pooling-Tier
REMIC-2
as described in the Preliminary Statement.
"Class P Certificateholders" The holders of the Class P
Certificates.
"Class R Certificate" The Class R Certificate executed by the
Securities Administrator on behalf of the Trust, and authenticated
and delivered
by the Certificate Registrar, substantially in the form annexed
hereto as
Exhibit C-3 and evidencing the ownership of the Class R-CE
Interest, the Class
PT1-R Interest, the Class PT2-R Interest, the Class LT-R Interest
and the Class
UT-R Interest.
"Class R-CE Interest" The residual interest in the Class CE REMIC
as
described in the Preliminary Statement and the related footnote
thereto.
"Class UT-IO Interest" A regular interest in the Upper-Tier REMIC
as
described in the Preliminary Statement and the related footnote
thereto.
"Class UT-R Interest" The residual interest in the Upper-Tier
REMIC
as described in the Preliminary Statement.
"Class UT-X Interest" A regular interest in the Upper-Tier REMIC
as
described in the Preliminary Statement and the related footnote
thereto.
"Closing Date" December 21, 2006.
"Code" The
Internal Revenue Code of 1986, as it may be amended from
time to time.
"Collection Account" The segregated account or accounts created
and
maintained by the Servicer pursuant to Section 3.04(a), which shall
be entitled
"Collection Account, Wells Fargo Bank, N.A., as Servicer for HSBC
Bank USA,
National Association, as Trustee, in trust for registered Holders
of Wells Fargo
Home Equity Asset-Backed Securities 2006-3 Trust, Home Equity
Asset-Backed
Certificates, Series 2006-3," and which must be an Eligible
Account.
"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.
"Commission" The United States Securities and Exchange
Commission.
"Compensating Interest" As defined in Section 3.22 hereof.
"Condemnation Proceeds" All awards or settlements in respect of
a
taking of a Mortgaged Property by exercise of the power of eminent
domain or
condemnation.
"Corporate Trust Office" With respect to the Trustee, the
principal
corporate trust office of the Trustee at which at any particular
time its
corporate trust business in connection with this Agreement shall
be
administered, which office at the date of the execution of this
instrument is
located at 452 Fifth Avenue, New York, New York 10018, Attention:
WFHET 2006-3
or at such other address as the Trustee may designate from time to
time by
notice to the Certificateholders, the Depositor, the Securities
Administrator
and the Servicer. With respect to the Securities Administrator, the
corporate
trust office of the Securities Administrator at which at any
particular time its
corporate trust business in connection with this Agreement shall
be
administered, which office at the date of the execution of this
instrument is
located at (i) for certificate transfer purposes, Wells Fargo
Center, Sixth
Street and Marquette Avenue, Minneapolis, Minnesota, 55479-0113,
Attention:
Client Manager-WFHET, Series 2006-3 and (ii) for all other
purposes, 9062 Old
Annapolis Road, Columbia, Maryland 21045, Attention: Client
Manager-WFHET,
Series 2006-3 or at such other address as the Securities
Administrator may
designate from time to time by notice to the Certificateholders,
the Depositor,
the Trustee and the Servicer.
"Corresponding Class" The Class of interests in one Trust REMIC
created under this Agreement that corresponds to the Class of
interests in the
other Trust REMIC or to a Class of Certificates in the manner set
out below:
Corresponding
Upper-Tier
Corresponding
Lower-Tier Class
REMIC Regular
Class of
Designation
Interest
Certificates
----------------
-------------
-------------
Class
LT-A-1
Class A-1
Class A-1
Class
LT-A-2
Class A-2
Class A-2
Class
LT-A-3
Class A-3
Class A-3
Class
LT-M-1
Class M-1
Class M-1
Class
LT-M-2
Class M-2
Class M-2
Class
LT-M-3
Class M-3
Class M-3
Class
LT-M-4
Class M-4
Class M-4
Class
LT-M-5
Class M-5
Class M-5
Class
LT-M-6
Class M-6
Class M-6
Class
LT-B-1
Class B-1
Class B-1
Class
LT-B-2
Class B-2
Class B-2
Class
LT-B-3
Class B-3
Class B-3
Class
LT-B-4
Class B-4
Class B-4
"Corresponding Pooling-Tier REMIC-2 IO Interest" As defined in
the
Preliminary Statement.
"Corresponding Scheduled Crossover Distribution Date" The
Distribution Date, if any, in the month and year specified in the
Preliminary
Statement corresponding to a Pooling-Tier REMIC-2 IO Interest.
"Coverage Percentage" As defined in the PMI Policy.
"Covered Mortgage Loan" Each of the Mortgage Loans insured by
the
Insurer, as set forth on the Mortgage Loan Schedule.
"Current Interest Shortfall" With respect to any Distribution
Date,
the sum of (i) the aggregate amount of Relief Act Interest
Shortfalls, (ii) the
aggregate amount of Prepayment Interest Shortfalls attributable to
partial
Principal Prepayments and (iii) the amount, if any, by which (x)
the aggregate
amount of Prepayment Interest Shortfalls attributable to Principal
Prepayments
in full exceeds (y) the Compensating Interest for such Distribution
Date.
"Custodial Agreement" That certain Custodial Agreement, dated as
of
December 21, 2006, among the Custodian, the Depositor, the Servicer
and the
Trustee, in the form of Exhibit R attached hereto.
"Custodian" Wells Fargo Bank, as custodian pursuant to the
Custodial
Agreement, and any successor custodian, if any, hereafter appointed
by the
Trustee pursuant to Section 8.16. The Custodian may (but need not)
be the
Trustee, the Securities Administrator or the Servicer or any Person
directly or
indirectly controlling or controlled by or under common control of
any of them.
"Cut-off Date" With respect to each Mortgage Loan, the Due Date
occurring in December 2006.
"Cut-off Date Principal Balance" With respect to any Mortgage
Loan,
the unpaid principal balance thereof as of the applicable Cut-off
Date after
giving effect to any Monthly Payment due on such date and to the
application of
funds received or advanced on or before such date (or as of the
applicable date
of substitution with respect to an Eligible Substitute Mortgage
Loan).
"DBRS" Dominion Bond Rating Service, Inc. and its successors, and
if
such company shall for any reason no longer perform the functions
of a
securities rating agency, "DBRS" shall be deemed to refer to any
other
"nationally recognized statistical rating organization" as set
forth on the most
current list of such organizations released by the Commission.
"Debt Service Reduction" With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan
by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code,
except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan" A Mortgage Loan replaced or to be
replaced
by one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation" With respect to any Mortgage Loan, a
valuation
of the related Mortgaged Property by a court of competent
jurisdiction in an
amount less than the then outstanding principal balance of the
Mortgage Loan, or
any reduction in the amount of principal to be paid in connection
with any
scheduled Monthly Payment that results in a permanent forgiveness
of principal,
which valuation results from a proceeding initiated under the
Bankruptcy Code.
"Definitive Certificates" As defined in Section 5.02(c) hereof.
"Delinquent" Any Mortgage Loan with respect to which the
Monthly
Payment due on a Due Date is not made by the close of business on
the next
scheduled Due Date for such Mortgage Loan.
"Depositor" Wells Fargo Asset Securities Corporation, a
Delaware
corporation, or any successor in interest.
"Depository" The initial depository shall be The Depository
Trust
Company, whose nominee is Cede & Co., or any other organization
registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The
Depository
shall initially be the registered Holder of the Book-Entry
Certificates. The
Depository shall at all times be a "clearing corporation" as
defined in Section
8-102(a)(5) of the Uniform Commercial Code of the State of New
York.
"Depository Participant" A broker, dealer, bank or other
financial
institution or other person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date" With respect to any Distribution Date, the
17th
day of the calendar month in which such Distribution Date occurs
or, if such
17th day is not a Business Day, the Business Day immediately
preceding such 17th
day.
"Disqualified Organization" A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of:
(i) the United
States, any state or political subdivision thereof, any possession
of the United
States, any foreign government, any international organization, or
any agency or
instrumentality of any of the foregoing, (ii) any organization
(other than a
cooperative described in Section 521 of the Code) which is exempt
from the tax
imposed by Chapter 1 of the Code unless such organization is
subject to the tax
imposed by Section 511 of the Code, (iii) any organization
described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated
by the
Securities Administrator based upon an Opinion of Counsel provided
by nationally
recognized counsel to the Securities Administrator that the holding
of an
ownership interest in the Class R Certificate by such Person may
cause the Trust
Fund or any Person having an ownership interest in any Class of
Certificates
(other than such Person) to incur liability for any federal tax
imposed under
the Code that would not otherwise be imposed but for the transfer
of an
ownership interest in a Class R Certificate to such Person. A
corporation will
not be treated as an instrumentality of the United States or of any
state or
political subdivision thereof if all of its activities are subject
to tax and a
majority of its board of directors is not selected by a
governmental unit. The
term "United States," "state" and "international organization"
shall have the
meanings set forth in Section 7701 of the Code.
"Distribution Account" The segregated trust account or accounts
created and maintained by the Securities Administrator pursuant to
Section
3.04(b), which shall be entitled "Distribution Account, Wells Fargo
Bank, N.A.,
as Securities Administrator, in trust for the registered Holders of
Wells Fargo
Home Equity Asset-Backed Securities 2006-3 Trust, Home Equity
Asset-Backed
Certificates, Series 2006-3," and which must be an Eligible
Account.
"Distribution Date" The 25th day of any calendar month, or if
such
25th day is not a Business Day, the Business Day immediately
following such 25th
day, commencing in January 2007.
"Distribution Date Statement" As defined in Section 4.06(a)
hereof.
"Document Transfer Date" The 60th day following the occurrence of
a
Document Transfer Event.
"Document Transfer Event" The occurrence of either of the
following:
(i) Wells Fargo Bank is no longer the Servicer of any of the
Mortgage Loans or
(ii) the senior, unsecured long-term debt rating of Wells Fargo
& Company is
less than "BBB-" by Fitch.
"Due Date" With respect to each Mortgage Loan, the day of the
calendar month on which the Monthly Payment for such Mortgage Loan
was due in
accordance with the terms of the related Mortgage Note, exclusive
of any grace
period.
"Eligible Account" Any of (i) an account or accounts maintained
with
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 short-term unsecured debt obligations of such holding
company) are
rated "A-1+" by S&P, "F-1" by Fitch, "R-1" by DBRS and "P-1" by
Moody's (or
comparable ratings if S&P, Fitch, DBRS and Moody's are not the
Rating Agencies)
by each of the Rating Agencies at the time any amounts are held on
deposit
therein, (ii) an account or accounts the deposits in which are
fully insured by
the FDIC, (iii) a trust account or accounts maintained with the
trust department
of a federal or state chartered depository institution, national
banking
association or trust company acting in its fiduciary capacity or
(iv) an account
otherwise acceptable to each Rating Agency without reduction or
withdrawal of
their then current ratings of the Certificates as evidenced by a
letter from
each Rating Agency to the Securities Administrator and the Trustee.
Eligible
Accounts may bear interest.
"Eligible Investments" Any one or more of the following
obligations
or securities acquired at a purchase price of not greater than par,
regardless
of whether issued or managed by the Depositor, the Servicer, the
Securities
Administrator, the Trustee or any of their respective Affiliates or
for which an
Affiliate of the Trustee or the Securities Administrator serves as
an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States
or
any agency or instrumentality thereof, provided such obligations
are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee,
the
Securities Administrator or their respective agents acting in
their
respective commercial capacities) incorporated under the laws of
the
United States of America or any state thereof and subject to
supervision and examination by federal and/or state authorities,
so
long as, at the time of such investment or contractual
commitment
providing for such investment, such depository institution or
trust
company or its ultimate parent has a short term uninsured debt
rating in one of the two highest available rating categories of
S&P,
DBRS and Moody's and the highest available rating category of
Fitch
and provided that each such investment has an original maturity
of
no more than 365 days and (B) any other demand or time deposit
or
deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and
entered into with a depository institution or trust company
(acting
as principal) rated A or higher by S&P, DBRS and Fitch and A2
or
higher by Moody's, provided, however, that collateral
transferred
pursuant to such repurchase obligation must be of the type
described
in clause (i) above and must (A) be valued daily at current
market
prices plus accrued interest or (B) pursuant to such valuation,
be
equal, at all times, to 105% of the cash transferred by the
Trustee
or the Securities Administrator in exchange for such collateral
and
(C) be delivered to the Trustee, the Securities Administrator or,
if
the Trustee or the Securities Administrator is supplying the
collateral, an agent for the Trustee or the Securities
Administrator, as the case may be, in such a manner as to
accomplish
perfection of a security interest in the collateral by possession
of
certificated securities;
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of
the
United States of America or any State thereof and that are rated
by
each Rating Agency in its highest long-term unsecured rating
categories at the time of such investment or contractual
commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable
on
demand or on a specified date not more than 30 days after the
date
of acquisition thereof) that is rated by each Rating Agency in
its
highest short-term unsecured debt rating available at the time
of
such investment;
(vi) units of money market funds registered under the
Investment Company Act of 1940 (including funds managed or
advised
by the Trustee or the Securities Administrator or affiliates
thereof) that, if rated by each Rating Agency, are rated in its
highest rating category (if so rated by such Rating Agency);
and
(vii) if previously confirmed in writing to the Trustee and
the Securities Administrator, any other demand, money market or
time
deposit, or any other obligation, security or investment, as may
be
acceptable to the Rating Agencies in writing as an eligible
investment of funds backing securities having ratings equivalent
to
its highest initial rating of the Senior Certificates;
provided, that no instrument described hereunder shall evidence
either the right to receive (a) only interest with respect to the
obligations
underlying such instrument or (b) both principal and interest
payments derived
from obligations underlying such instrument and the interest and
principal
payments with respect to such instrument provide a yield to
maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations.
"Eligible Substitute Mortgage Loan" A mortgage loan substituted
for
a Defective Mortgage Loan pursuant to the terms of this Agreement
which must, on
the date of such substitution, (i) have an outstanding principal
balance, after
application of all scheduled payments of principal and interest due
during or
prior to the month of substitution, not in excess of, the
outstanding principal
balance of the Defective Mortgage Loan as of the Due Date in the
calendar month
during which the substitution occurs, (ii) have a Mortgage Interest
Rate, with
respect to a Fixed Rate Mortgage Loan, not less than the Mortgage
Interest Rate
of the Defective Mortgage Loan and not more than 1% in excess of
the Mortgage
Interest Rate of such Defective Mortgage Loan, (iii) if an
Adjustable Rate
Mortgage Loan, have a Rate Ceiling not less than the Rate Ceiling
for the
Defective Mortgage Loan, (iv) if an Adjustable Rate Mortgage Loan,
have a
Minimum Mortgage Interest Rate not less than the Minimum Mortgage
Interest Rate
of the Defective Mortgage Loan, (v) if an Adjustable Rate Mortgage
Loan, have a
Gross Margin equal to or greater than the Gross Margin of the
Defective Mortgage
Loan, (vi) if an Adjustable Rate Mortgage Loan, have the same Index
and
frequency of adjustment as the Defective Mortgage Loan, (vii) if an
Adjustable
Rate Mortgage Loan, have a next Adjustment Date not more than three
months later
than the next Adjustment Date on the Defective Mortgage Loan,
(viii) have an
original term to maturity not greater than (and not more than one
year less
than) that of the Defective Mortgage Loan, (ix) be current as of
the date of
substitution, (x) have a Loan-to-Value Ratio equal to or lower than
the
Loan-to-Value Ratio of the Defective Mortgage Loan, (xi) have a
risk grading at
least equal to the risk grading assigned on the Defective Mortgage
Loan, (xii)
have the same lien priority as the Defective Mortgage Loan, (xiii)
have a
Prepayment Penalty at least equal in amount and duration of that of
the
Defective Mortgage Loan and (xiv) conform to each representation
and warranty
set forth in Section 2.04 hereof applicable to the Defective
Mortgage Loan. In
the event that one or more mortgage loans are substituted for one
or more
Defective Mortgage Loans, the amounts described in clause (i)
hereof shall be
determined on the basis of aggregate principal balance, the
Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the
basis of
weighted average Mortgage Interest Rates, the risk gradings
described in clause
(xi) hereof shall be satisfied as to each such mortgage loan, the
terms
described in clause (viii) hereof shall be determined on the basis
of weighted
average remaining term to maturity, the Loan-to-Value Ratios
described in clause
(x) hereof shall be satisfied as to each such mortgage loan and,
except to the
extent otherwise provided in this sentence, the representations and
warranties
described in clause (xiv) hereof must be satisfied as to each
Eligible
Substitute Mortgage Loan or in the aggregate, as the case may
be.
"ERISA" The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Restricted Certificates" Any of the Class CE, Class P
and
Class R Certificates.
"Escrow Account" The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Agreement" An agreement between a Mortgagor and the
Servicer
relating to accounts constituting taxes and/or fire and hazard
insurance
premiums required to be escrowed.
"Escrow Payments" The amounts constituting taxes and/or fire
and
hazard insurance premiums required to be escrowed to an Escrow
Agreement.
"Estate in Real Property" A fee simple estate in a parcel of
real
property.
"Excess Reserve Fund Account" The segregated trust account
created
and maintained by the Securities Administrator pursuant to Section
3.04(g) which
shall be entitled "Excess Reserve Fund Account, Wells Fargo Bank,
N.A., as
Securities Administrator for HSBC Bank USA, National Association,
as Trustee, in
trust for registered Holders of the Class A, Class M and Class B
Certificates of
Wells Fargo Home Equity Asset-Backed Securities 2006-3 Trust, Home
Equity
Asset-Backed Certificates, Series 2006-3," and which must be an
Eligible
Account. Amounts on deposit in the Excess Reserve Fund Account
shall not be
invested. The Excess Reserve Fund Account shall not be an asset of
any REMIC
formed under this Agreement.
"Exchange Act" The Securities Exchange Act of 1934, as amended.
"Extra Principal Distribution Amount" With respect to any
Distribution Date, the lesser of (x) the Monthly Excess Interest
Amount for such
Distribution Date, after reduction (but not below zero) by any
Current Interest
Shortfall and (y) the Overcollateralization Deficiency for such
Distribution
Date.
"FDIC" Federal Deposit Insurance Corporation or any successor
thereto.
"Fidelity Bond" An insurance policy naming the Trustee, its
successors and assigns as loss payees relative to losses caused by
improper or
unlawful acts of the Servicer's personnel.
"Final Scheduled Distribution Date" As to each Class of
Certificates, the date set forth as such in the Preliminary
Statement.
"Fitch" Fitch Ratings and its successors, and if such company
shall
for any reason no longer perform the functions of a securities
rating agency,
"Fitch" shall be deemed to refer to any other "nationally
recognized statistical
rating organization" as set forth on the most current list of such
organizations
released by the Commission.
"Fixed Rate Mortgage Loan" A Mortgage Loan which has a constant
annual rate at which interest accrues in accordance with the
provisions of the
related Mortgage Note.
"Fixed Swap Payment" With respect to any Distribution Date up to
and
including the Distribution Date in December 2010, an amount equal
to the product
of (x) 5.155% per annum, (y) the Swap Notional Amount for such
Distribution Date
and (z) a fraction, the numerator of which is 30 (or, for the first
Distribution
Date, the number of days elapsed from the Closing Date to but
excluding the
first Distribution Date on a 30/360 basis), and the denominator of
which is 360.
"Floating Swap Payment" With respect to any Distribution Date up
to
and including the Distribution Date in December 2010, an amount
equal to the
product of (i) Swap LIBOR, (ii) the Swap Notional Amount for such
Distribution
Date and (iii) a fraction, the numerator of which is the actual
number of days
elapsed from and including the previous Distribution Date to but
excluding the
current Distribution Date (or, for the first Distribution Date, the
actual
number of days elapsed from the Closing Date to but excluding the
first
Distribution Date), and the denominator of which is 360.
"Foreclosure Price" The amount reasonably expected to be
received
from the sale of the related Mortgaged Property net of any expenses
associated
with foreclosure proceedings.
"Form 8-K" A Current Report on Form 8-K under the Exchange Act.
"Form 8-K Disclosure Information" As defined in Section
3.28(c).
"Form 10-D" An Asset-Backed Issuer Distribution Report on Form
10-D
under the Exchange Act.
"Form 10-K" An Annual Report on Form 10-K under the Exchange
Act.
"Form 10-K Filing Deadline" As defined in Section 3.28(b).
"Form 15" A Form 15 Suspension Notification under the Exchange
Act.
"Formula Rate" Any of the Class A-1 Formula Rate, the Class A-2
Formula Rate, the Class A-3 Formula Rate, the Class M-1 Formula
Rate, the Class
M-2 Formula Rate, the Class M-3 Formula Rate, the Class M-4 Formula
Rate, the
Class M-5 Formula Rate, the Class M-6 Formula Rate, the Class B-1
Formula Rate,
the Class B-2 Formula Rate, the Class B-3 Formula Rate and the
Class B-4 Formula
Rate.
"Grantor Trust" That portion of the Trust exclusive of
Pooling-Tier
REMIC-1, Pooling-Tier REMIC-2, Lower-Tier REMIC, Upper-Tier REMIC
and Class CE
REMIC consisting of (a) the Prepayment Penalties, any Originator
Prepayment
Penalty Payment Amounts, any Servicer Prepayment Penalty Payment
Amounts,
proceeds thereof in the Custodial Account or Distribution Account
and the right
of the Class P Certificateholders to receive such Prepayment
Penalties,
Originator Prepayment Penalty Payment Amounts and Servicer
Prepayment Penalty
Payment Amounts, (b) the right of the LIBOR Certificates to receive
Cap
Carryover Amounts and the obligation to pay Class IO Shortfalls,
(c) the
Interest Rate Swap Agreement, the Interest Rate Cap Agreement, the
Excess
Reserve Fund Account and the beneficial interest of the Class CE
Certificates
with respect thereto and (d) the obligation of the Class CE
Certificates to pay
Cap Carryover Amounts and the right to receive Class IO
Shortfalls.
"Gross Margin" With respect to each Adjustable Rate Mortgage
Loan,
the fixed percentage set forth in the related Mortgage Note that is
added to the
Index on each Adjustment Date in accordance with the terms of the
related
Mortgage Note used to determine the Mortgage Interest Rate for such
Mortgage
Loan.
"Independent" When used with respect to any specified Person,
any
such Person who (i) is in fact independent of the Depositor, the
Securities
Administrator, the Trustee, the Servicer and their respective
Affiliates, (ii)
does not have any direct financial interest in or any material
indirect
financial interest in the Depositor, the Securities Administrator,
the Trustee
or the Servicer, or any Affiliate thereof, and (iii) is not
connected with the
Depositor, the Securities Administrator, the Trustee or the
Servicer, or any
Affiliate thereof, as an officer, employee, promoter, underwriter,
trustee,
partner, director or Person performing similar functions; provided,
however,
that a Person shall not fail to be Independent of the Depositor,
the Securities
Administrator, the Trustee or the Servicer, or any Affiliate
thereof, merely
because such Person is the beneficial owner of 1% or less of any
class of
securities issued by the Depositor, the Securities Administrator,
the Trustee or
the Servicer, or any Affiliate thereof, as the case may be.
"Index" With respect to each Adjustable Rate Mortgage Loan and
with
respect to each related Adjustment Date, the index as specified in
the related
Mortgage Note.
"Initial Overcollateralization Amount" $29,585,676.69.
"Initial Principal Balance" With respect to any Certificate of
a
Class other than a Class CE, Class P or Residual Certificate, the
amount
designated "Initial Principal Balance" on the face thereof.
"Initial Pooling-Tier REMIC-1 Principal Amount" As described in
the
Preliminary Statement.
"Initial Pooling-Tier REMIC-2 Principal Amount" As described in
the
Preliminary Statement.
"Insurance Proceeds" Proceeds of any title policy, hazard policy
or
other insurance policy (including the PMI Policy) covering a
Mortgage Loan, to
the extent such proceeds are not to be applied to the restoration
of the related
Mortgaged Property or released to the Mortgagor in accordance with
the
procedures that the Servicer would follow in servicing mortgage
loans held for
its own account, subject to the terms and conditions of the related
Mortgage
Note and Mortgage.
"Insurer" Mortgage Guaranty Insurance Corporation, a Wisconsin
corporation, and its successors in interest.
"Insurer Fee" With respect to each Covered Mortgage Loan, an
amount
payable monthly and equal to the product of (a) 1/12th of the
Insurer Fee Rate
and (b) the scheduled principal balance of such Covered Mortgage
Loan as of the
first day of each month.
"Insurer Fee Rate" With respect to each Covered Mortgage Loan,
1.46%
per annum.
"Insurer Premium" With respect to each Covered Mortgage Loan,
an
amount equal to the aggregate of the Insurer Fees applicable to the
related
Covered Mortgage Loans.
"Interest Accrual Period" With respect to any Distribution Date,
the
period from and including the preceding Distribution Date to the
day prior to
the current Distribution Date (or, in the case of the first
Distribution Date,
the period from December 21, 2006 through January 25, 2007).
"Interest Carry Forward Amount" For any Class of LIBOR
Certificates
and any Distribution Date, the sum of (a) the excess, if any, of
(i) the Accrued
Certificate Interest for the prior Distribution Date and any
Interest Carry
Forward Amount for the prior Distribution Date, over (ii) the
amount in respect
of interest actually distributed on such Class on such prior
Distribution Date
and (b) interest on such excess at the applicable Pass-Through Rate
on the basis
of the actual number of days elapsed since the prior Distribution
Date.
"Interest Percentage" With respect to any Class of LIBOR
Certificates and any Distribution Date, the ratio (expressed as a
decimal
carried to at least six places) of the Accrued Certificate Interest
for such
Class to the sum of the Accrued Certificate Interest for all
Classes, in each
case with respect to such Distribution Date, without regard to
Current Interest
Shortfalls.
"Interest Rate Cap Agreement" The long-form confirmation (which
incorporates by reference a 1992 ISDA Master Agreement
(Multicurrency-Cross
Border)) dated as of December 21, 2006 between Barclays Bank PLC
and the
Securities Administrator acting on behalf of the Supplemental
Interest Trust,
substantially in the form attached hereto as Exhibit N-2. The
Interest Rate Cap
Agreement shall not be an asset of any REMIC formed under this
Agreement.
"Interest Rate Swap Agreement" The long-form confirmation
(which
incorporates by reference a 1992 ISDA Master Agreement
(Multicurrency-Cross
Border)) dated as of December 21, 2006 between Barclays Bank PLC
and the
Securities Administrator acting on behalf of the Supplemental
Interest Trust,
substantially in the form attached hereto as Exhibit N-1. The
Interest Rate Swap
Agreement shall not be an asset of any REMIC formed under this
Agreement.
"Interest Remittance Amount" As of any Distribution Date, an
amount
equal to (A) the sum, without duplication, of (i) all interest due
and collected
with respect to the related Collection Period on the Mortgage Loans
received by
the Servicer on or prior to the Determination Date for such
Distribution Date
and any interest advanced by the Servicer or the Trustee on the
Mortgage Loans
with respect to the related Collection Period (less the Servicing
Fee for the
Mortgage Loans and the Insurer Fee for the Covered Mortgage Loans,
amounts
available for reimbursement of Advances and Servicing Advances
pursuant to
Section 3.05 and expenses reimbursable pursuant to Section 6.03,
amounts
reimbursable or payable to the Trustee pursuant to this Agreement,
including,
without limitation, Sections 7.01 and 8.05 and amounts reimbursable
or payable
to the Securities Administrator pursuant to this Agreement,
including, without
limitation, Sections 8.05 and 9.01(c)), (ii) all Compensating
Interest paid by
the Servicer on such Distribution Date with respect to such
Mortgage Loans,
(iii) the portion of any payment in connection with any Principal
Prepayment,
substitution, Purchase Price, Termination Price, Insurance
Proceeds, Subsequent
Recoveries or Net Liquidation Proceeds relating to interest with
respect to such
Mortgage Loans received during the related Prepayment Period and
(iv) the
portion of any Reimbursement Amount relating to interest on such
Mortgage Loans
received during the related Prepayment Period less (B) any amounts
payable to
the Swap Provider (including any Net Swap Payment and any Swap
Termination
Payment owed to the Swap Provider other than any Swap Termination
Payment owed
to the Swap Provider resulting from a Swap Provider Trigger Event
and without
duplication of any previously paid Replacement Swap Provider
Payment).
"Investor-Based Exemption" Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent
"qualified
professional asset managers"), PTCE 91-38 (for transactions by bank
collective
investment funds), PTCE 90-1 (for transactions by insurance company
pooled
separate accounts), PTCE 95-60 (for transactions by insurance
company general
accounts) or PTCE 96-23 (for transactions effected by "in-house
asset
managers"), or any comparable exemption available under Similar
Law.
"Late Collections" With respect to any Mortgage Loan, all
amounts
received subsequent to the Determination Date immediately following
any related
Collection Period, whether as late payments of Monthly Payments or
as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise,
which
represent late payments or collections of principal and/or interest
due (without
regard to any acceleration of payments under the related Mortgage
and Mortgage
Note) but delinquent on a contractual basis for such Collection
Period and not
previously recovered.
"LIBOR Business Day" Any day on which banks in London, England
and
the City of New York are open and conducting transactions in
foreign currency
and exchange.
"LIBOR Certificates" The Class A, Class M and Class B
Certificates.
"LIBOR Determination Date" With respect to any Class of LIBOR
Certificates, (i) for the initial Distribution Date, the second
LIBOR Business
Day preceding the Closing Date and (ii) for each subsequent
Distribution Date,
the second LIBOR Business Day prior to the immediately preceding
Distribution
Date.
"Liquidated Mortgage Loan" As to any Distribution Date, any
Mortgage
Loan in respect of which the Servicer has determined, in accordance
with the
servicing procedures specified herein, as of the end of the related
Prepayment
Period, that all Liquidation Proceeds, Condemnation Proceeds and
Insurance
Proceeds which it expects to recover with respect to the
liquidation of the
Mortgage Loan or disposition of the related REO Property have been
recovered.
"Liquidation Proceeds" The amount (other than amounts received
in
respect of the rental of any REO Property prior to REO Disposition)
received by
the Servicer in connection with (i) the taking of all or a part of
a Mortgaged
Property by exercise of the power of eminent domain or condemnation
or (ii) the
liquidation of a defaulted Mortgage Loan by means of a trustee's
sale,
foreclosure sale or otherwise.
"Liquidation Report" The report with respect to a Liquidated
Mortgage Loan in such form as is agreed to by the Servicer, the
Trustee and the
Securities Administrator listing (i) the sale price of the related
Mortgaged
Property or amount of the REO Disposition, (ii) the amount of any
Realized Loss
(or gain) with respect to such Liquidated Mortgage Loan, (iii) the
expenses
relating to the liquidation of such Liquidated Mortgage Loan and
(iv) such other
information as is agreed to by the Servicer, the Trustee and the
Securities
Administrator.
"Loan-to-Value Ratio" For any Mortgage Loan, the ratio, expressed
as
a percentage, the numerator of which is the original loan amount
(unless
otherwise indicated) of a particular Mortgage Loan at origination
and the
denominator of which is the lesser of (x) the appraised value of
the related
Mortgaged Property determined in the appraisal used by the
originator at the
time of origination of such Mortgage Loan, and (y) if the Mortgage
is originated
in connection with a sale of the Mortgaged Property, the sale price
for such
Mortgaged Property.
"Losses" As defined in Section 9.03.
"Lost Note Affidavit" With respect to any Mortgage Loan as to
which
the original Mortgage Note has been permanently lost or destroyed
and has not
been replaced, an affidavit from the Seller certifying that the
original
Mortgage Note has been lost, misplaced or destroyed (together with
a copy of the
related Mortgage Note and indemnifying the Trust against any loss,
cost or
liability resulting from the failure to deliver the original
Mortgage Note) in
the form of Exhibit H hereto.
"Lower-Tier Interest Rate" With respect to each Lower-Tier
Regular
Interest, the Lower-Tier Interest Rate described in the Preliminary
Statement.
"Lower-Tier Principal Amount" With respect to each Lower-Tier
Regular Interest, the amount described in the Preliminary Statement
under the
caption "Lower-Tier REMIC."
"Lower-Tier Regular Interest" Each of the Class LT-A-1, Class
LT-A-2, Class LT-A-3, Class LT-M-1, Class LT-M-2, Class LT-M-3,
Class LT-M-4,
Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2, Class
LT-B-3, Class
LT-B-4, Class LT-IO and Class LT-Accrual Interests as described in
the
Preliminary Statement.
"Lower-Tier REMIC" As defined in the Preliminary Statement.
"LT-Accretion Directed Classes" As defined in the Preliminary
Statement.
"Majority Certificateholders" The Holders of Certificates
evidencing
at least 51% of the Voting Interests.
"Majority Class CE Certificateholder" The Holder of Class CE
Certificates evidencing at least a 51% Percentage Interest in the
Class CE
Certificates.
"MERS" The Mortgage Electronic Registration Systems, Inc.
"MERS Mortgage Loan" Any MOM Mortgage Loan or any other
Mortgage
Loan as to which MERS is (or is intended to be) the mortgagee of
record and as
to which a MIN has been assigned.
"MIN" A MERS Mortgage Identification Number assigned to a
Mortgage
Loan in accordance with the MERS Procedure Manual.
"Minimum Mortgage Interest Rate" With respect to each
Adjustable
Rate Mortgage Loan, the percentage set forth in the related
Mortgage Note as the
minimum Mortgage Interest Rate thereunder.
"MOM" A Mortgage Loan where the related Mortgage names MERS as
the
original mortgagee thereof, as to which a MIN has been assigned,
and which
Mortgage has not been assigned to any other person.
"Monthly Excess Cashflow Amount" The sum of (a) the Monthly
Excess
Interest Amount remaining after reduction (but not below zero) by
any Current
Interest Shortfall and any amounts used to fund any Extra Principal
Distribution
Amount, (b) the Overcollateralization Release Amount and (c) any
portion of the
Principal Distribution Amount (without duplication) remaining after
principal
distributions on the Certificates (other than the Class CE, Class P
and Residual
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 (xii) of Section 4.01.
"Monthly Payment" With respect to any Mortgage Loan, the
scheduled
monthly payment of principal and interest on such Mortgage Loan
which is payable
by the related Mortgagor from time to time under the related
Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation
and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any
reduction in
the amount of interest collectible from the related Mortgagor
pursuant to the
Relief Act or similar state laws; (b) without giving effect to any
extension
granted or agreed to by the Servicer pursuant to Section 3.01; and
(c) on the
assumption that all other amounts, if any, due under such Mortgage
Loan are paid
when due.
"Moody's" Moody's Investors Service, Inc., and its successors,
and
if such company shall for any reason no longer perform the
functions of a
securities rating agency, "Moody's" shall be deemed to refer to any
other
"nationally recognized statistical rating organization" as set
forth on the most
current list of such organizations released by the Commission.
"Mortgage" The mortgage, deed of trust or other instrument
creating
a first or second lien on, or first or second priority security
interest in, a
Mortgaged Property securing a Mortgage Note.
"Mortgage File" Either of the Owner Mortgage File or Retained
Mortgage File.
"Mortgage Interest Rate" With respect to each Mortgage Loan,
the
annual rate at which interest accrues on such Mortgage Loan from
time to time in
accordance with the provisions of the related Mortgage Note, which
rate (i) in
the case of each Fixed Rate Mortgage Loan shall remain constant at
the rate set
forth in the Mortgage Loan Schedule as the Mortgage Interest Rate
in effect
immediately following the applicable Cut-off Date and (ii) in the
case of each
Adjustable Rate Mortgage Loan (A) as of any date of determination
until the
first Adjustment Date following the applicable Cut-off Date shall
be the rate
set forth in the Mortgage Loan Schedule as the Mortgage Interest
Rate in effect
immediately following the applicable Cut-off Date and (B) as of any
date of
determination thereafter shall be the rate as adjusted on the most
recent
Adjustment Date, to equal the sum, rounded as provided in the
Mortgage Note, of
the Index, determined as set forth in the related Mortgage Note,
plus the
related Gross Margin subject to the limitations set forth in the
related
Mortgage Note. With respect to each Mortgage Loan that becomes an
REO Property,
as of any date of determination, the annual rate determined in
accordance with
the immediately preceding sentence as of the date such Mortgage
Loan became an
REO Property.
"Mortgage Loan" Each mortgage loan transferred and assigned to
the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to
time held as
a part of the Trust Fund, the Mortgage Loans so held being
identified in the
Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement" The agreement between the
Seller
and the Depositor, dated as of December 21, 2006, regarding the
transfer of the
Mortgage Loans by the Seller to or at the direction of the
Depositor, in the
form of Exhibit G attached hereto.
"Mortgage Loan Schedule" As of any date with respect to the
Mortgage
Loans, the lists of such Mortgage Loans included in the Trust Fund
on such date,
separately identifying the Fixed Rate Mortgage Loans and the
Adjustable Rate
Mortgage Loans delivered by the Depositor to the Trustee, the
Servicer, the
Securities Administrator and the Custodian. The Mortgage Loan
Schedule shall set
forth the following information with respect to each Mortgage
Loan:
(1) the Mortgage Loan identifying number;
(2) the city, state and zip code of the Mortgaged Property;
(3) the type of property;
(4) the Mortgage Interest Rate;
(5) the Net Mortgage Interest Rate;
(6) the Monthly Payment;
(7) the original number of months to maturity;
(8) the scheduled maturity date;
(9) the Cut-off Date Principal Balance;
(10) the Loan-to-Value Ratio at origination;
(11) whether such Mortgage Loan is covered by primary mortgage
insurance;
(12) whether such Mortgage Loan is a Covered Mortgage Loan;
(13) the applicable Servicing Fee Rate;
(14) with respect to each Covered Mortgage Loan, the Coverage
Percentage;
(15) the Index;
(16) the Gross Margin;
(17) the Periodic Cap;
(18) the first Adjustment Date;
(19) the Rate Ceiling; and
(20) a code indicating whether the Mortgage Loan has a
Prepayment
Penalty and the Prepayment Penalty term.
The Mortgage Loan Schedule shall set forth the following
information, as of the applicable Cut-off Date, with respect to the
Mortgage
Loans in the aggregate: (1) the number of Mortgage Loans; (2) the
current unpaid
principal balance of the Mortgage Loans; (3) the weighted average
Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of
the Mortgage Loans. The Mortgage Loan Schedule shall be amended
from time to
time in accordance with the provisions of this Agreement. With
respect to any
Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the
applicable
date of substitution.
"Mortgage Note" The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
"Mortgage Pool" The pool of Mortgage Loans, identified on the
Mortgage Loan Schedule from time to time, and any REO Properties
acquired in
respect thereof.
"Mortgaged Property" The underlying property securing a
Mortgage
Loan, including any REO Property, consisting of an Estate in Real
Property
improved by a Residential Dwelling.
"Mortgagor" The obligor on a Mortgage Note.
"Net Liquidation Proceeds" With respect to any Liquidated
Mortgage
Loan or any other disposition of related Mortgaged Property
(including REO
Property) the related Liquidation Proceeds net of unreimbursed
Advances,
unreimbursed Servicing Advances, unpaid Servicing Fees and any
other accrued and
unpaid servicing fees received and retained in connection with the
liquidation
of such Mortgage Loan or Mortgaged Property.
"Net Mortgage Interest Rate" With respect to any Mortgage Loan,
the
Mortgage Interest Rate borne by such Mortgage Loan minus the
Servicing Fee Rate
and with respect to any Covered Mortgage Loan, the Insurer Fee Rate
(including
any state and local tax on the Insurer Fee Rate).
"Net Swap Payment" In the case of (i) payments made by the
Supplemental Interest Trust to the Swap Provider on any
Distribution Date up to
and including the Distribution Date in December 2010, the excess,
if any, of (x)
the Fixed Swap Payment for such Distribution Date over (y) the
Floating Swap
Payment for such Distribution Date and (ii) payments made by the
Swap Provider
to the Supplemental Interest Trust on any Distribution Date up to
and including
the Distribution Date in December 2010, the excess, if any, of (x)
the Floating
Swap Payment for such Distribution Date over (y) the Fixed Swap
Payment for such
Distribution Date.
"Nonrecoverable Advance" Any Advance or Servicing Advance
previously
made or proposed to be made in respect of a Mortgage Loan that, in
the good
faith business judgment of the Servicer (or the Trustee, in the
case of any
Advance made by the Trustee pursuant to Section 7.01), will not or,
in the case
of a proposed Advance or Servicing Advance, would not be ultimately
recoverable
from Late Collections on such Mortgage Loan as provided herein.
"Notional Amount" With respect to Class CE Interest, an amount
equal
to the aggregate of the Lower-Tier Principal Amounts of the
Lower-Tier Regular
Interests (other than the Class LT-IO Interest) as of the first day
of the
related Interest Accrual Period.
"NYCEMA" A New York Consolidation, Extension and Modification
Agreement.
"Officer's Certificate" A certificate signed by the Chairman of
the
Board, the Vice Chairman of the Board, the President, a vice
president (however
denominated), and by the Treasurer, the Secretary, or one of the
assistant
treasurers or assistant secretaries or any other duly authorized
officer of the
Servicer, the Securities Administrator, the Trustee, the Insurer or
the
Depositor, as applicable.
"One-Month LIBOR" With respect to the initial Interest Accrual
Period, 5.35% per annum. With respect to each Interest Accrual
Period (other
than the initial Interest Accrual Period), the rate determined by
the Securities
Administrator on the related LIBOR Determination Date on the basis
of the
British Bankers' Association ("BBA") "Interest Settlement Rate" for
one-month
deposits in U.S. Dollars as found on Telerate Page 3750 as of 11:00
A.M. London
time on such LIBOR Determination Date. If no such quotations are
available on a
LIBOR Determination Date, One-Month LIBOR for the related Interest
Accrual
Period will be established by the Securities Administrator as the
higher of:
(i) One-Month LIBOR as determined on the previous LIBOR
Determination Date; and
(ii) the rate per annum which the Securities Administrator
determines
to be either (A) the arithmetic mean (rounding such arithmetic
mean
upwards if necessary to the nearest whole multiple of 1/16%) of
the
one-month
U.S. Dollar lending rates that New York City banks selected by
the
Securities Administrator are quoting, on the relevant LIBOR
Determination Date, to the principal London offices of at least
two
leading
banks in the London interbank market or (B) in the event that
the
Securities
Administrator can determine no such arithmetic mean, the lowest
one-month
U.S. Dollar lending rate that the New York City banks selected
by the
Securities Administrator are quoting on such LIBOR
Determination
Date to
leading European banks.
"Opinion of Counsel" A written opinion of counsel, who may,
without
limitation, be a salaried counsel for the Depositor, the
Securities
Administrator, the Trustee or the Servicer except that any opinion
of counsel
relating to (a) the qualification of any REMIC as a REMIC or (b)
compliance with
the REMIC Provisions must be an opinion of Independent counsel.
"Optional Termination Date" The first Distribution Date on which
the
Majority Class CE Certificateholder or, if there is no Majority
Class CE
Certificateholder, the Depositor, may opt to terminate the Mortgage
Pool
pursuant to Section 10.01.
"Original Principal Balance" With respect to each Class of
Certificates, the Principal Balance thereof on the Closing Date, as
set forth
opposite such Class in the table in the Preliminary Statement under
the caption
"Certificates," except with respect to (i) the Class P and
Residual
Certificates, which have an Original Principal Balance of zero and
(ii) the
Class CE Certificates, which, solely for REMIC purposes, have an
Original
Principal Balance equal to the Initial Overcollateralization
Amount.
"Originator" Wells Fargo Bank and its successors.
"Originator Prepayment Penalty Payment Amount" The amount payable
by
the Originator pursuant to Section 5(b) of the Mortgage Loan
Purchase Agreement.
"Overcollateralization Amount" As of any Distribution Date, the
excess, if any, of (x) the Pool Balance as of the last day of the
related
Collection Period over (y) the aggregate Principal Balance of all
Classes of
Certificates (other than the Class CE, Class P and Residual
Certificates) after
taking into account all distributions of principal on such
Distribution Date and
the increase of any Principal Balance as a result of Subsequent
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 Principal Balances of
all Classes of
Certificates (other than the Class CE, Class P and Residual
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 Amount on such
Distribution Date.
"Overcollateralization Floor" As of any Distribution Date, the
amount by which the Pool Balance as of the last day of the related
Collection
Period exceeds the product of (i) 0.50% and (ii) the Pool Balance
as of the
Cut-off 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 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
payment on the Certificates (other than the Class CE, Class P and
Residual
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.
"Owner Mortgage File" A file maintained by the Custodian for
each
Mortgage Loan that contains the documents specified in Section
2.01(a) and any
additional documents required to be added to the Owner Mortgage
File pursuant to
this Agreement.
"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" For each Class of LIBOR Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2
Regular
Interest, each Lower-Tier Regular Interest, each Upper-Tier Regular
Interest,
and each Class CE REMIC Regular Interest, the per annum rate set
forth or
calculated in the manner described in the Preliminary
Statement.
"Paying Agent" Any paying agent appointed pursuant to Section
5.05.
"Paying Agent Agreement" As defined in Section 5.05.
"Percentage Interest" With respect to any Certificate (other than
a
Class CE, Class P and Residual Certificate), a fraction, expressed
as a
percentage, the numerator of which is the initial Principal
Balance, as the case
may be, represented by such Certificate and the denominator of
which is the
Original Principal Balance of the related Class. With respect to a
Class CE or
Class P 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
the Class R Certificate, 100%.
"Periodic Cap" With respect to each Adjustable Rate Mortgage
Loan,
the applicable limit on adjustment of the Mortgage Interest Rate
for each
Adjustment Date specified in the applicable Mortgage Note and
designated as such
in the Mortgage Loan Schedule.
"Permitted Transferee" Any transferee of a Residual Certificate
other than a Disqualified Organization, a non-U.S. Person or a U.S.
Person with
respect to whom income on the Residual Certificate is attributable
to a foreign
permanent establishment or fixed base, within the meaning of an
applicable
income tax treaty, of such Person or any other U.S. Person.
"Person" Any individual, corporation, partnership, joint
venture,
association, joint stock company, trust, limited liability
company,
unincorporated organization or government or any agency or
political subdivision
thereof.
"PMI Policy" The Primary Mortgage Insurer Policy No.
22-400-4-3707,
with respect to the Covered Mortgage Loans, issued by the Insurer,
and all
endorsements thereto, as supplemented by the commitment letter,
dated December
13, 2006, between the Insurer and the Securities Administrator, a
copy of which
is attached hereto as Exhibit M.
"Pool Balance" As of any date of determination, the aggregate
unpaid
principal balance of the Mortgage Loans.
"Pool Cap" With respect to any Distribution Date and the LIBOR
Certificates (a) a per annum rate (subject to adjustment based on
the actual
number of days elapsed in the related Interest Accrual Period)
equal to the
weighted average of the Net Mortgage Interest Rates for the
Mortgage Loans,
weighted on the basis of the unpaid principal balance of the
Mortgage Loans as
of the first day of the related Collection Period minus (b) a
percentage,
expressed as a per annum rate (subject to an adjustment based on
the actual
number of days elapsed in the related Interest Accrual Period),
calculated as a
fraction, the numerator of which is the sum of (i) any Net Swap
Payment owed by
the Supplemental Interest Trust to the Swap Provider and (ii) any
Swap
Termination Payment (other than any Swap Termination Payment
resulting from a
Swap Provider Trigger Event) payable by the Supplemental Interest
Trust solely
from Available Funds and the denominator of which is the Pool
Balance as of the
first day of the related Collection Period.
"Pooling-Tier REMIC-1" As described in the Preliminary
Statement.
"Pooling-Tier REMIC-1 Interest Rate" As described in the
Preliminary
Statement.
"Pooling-Tier REMIC-1 Regular Interest" As described in the
Preliminary Statement.
"Pooling-Tier REMIC-1 WAC Rate" As of any Distribution Date, a
per
annum rate equal to (a) the weighted average of the Net Mortgage
Interest Rates
then in effect on the beginning of the related Collection Period
multiplied by
(b) 30 divided by the actual number of days in the related Interest
Accrual
Period.
"Pooling-Tier REMIC-2" As described in the Preliminary
Statement.
"Pooling-Tier REMIC-2 Interest Rate" As described in the
Preliminary
Statement.
"Pooling-Tier REMIC-2 IO Interest" Any of the Pooling-Tier
REMIC-2
Regular Interests with the designation "IO" in its name.
"Pooling-Tier REMIC-2 Regular Interest" As described in the
Preliminary Statement.
"Prepayment Interest Shortfall" With respect to any
Distribution
Date, for each Mortgage Loan that was the subject of a Principal
Prepayment
during the related Prepayment Period that was applied by the
Servicer to reduce
the outstanding Principal Balance of such Mortgage Loan on a date
preceding the
related Due Date, an amount equal to interest at the applicable Net
Mortgage
Interest Rate on the amount of such Principal Prepayment for the
number of days
commencing on the date on which the Principal Prepayment is applied
and ending
on the last day of the calendar month in which applied.
"Prepayment Penalty" With respect to any Prepayment Period, any
Prepayment Penalty, penalty or charge collected by the Servicer
from a Mortgagor
in connection with any voluntary Principal Prepayment in full
pursuant to the
terms of the related Mortgage Note as from time to time held as a
part of the
Trust Fund, the Prepayment Penalties so held being determined in
accordance with
the guidelines for Prepayment Penalty provisions set forth in the
Seller
underwriting standards. The defined term "Prepayment Penalty" shall
not include
any Servicer Prepayment Penalty Payment Amount or Originator
Prepayment Penalty
Payment Amount.
"Prepayment Period" With respect to any Distribution Date, the
one
month period ending on the last day of the calendar month preceding
the month in
which such Distribution Date occurs.
"Prime Rate" The prime rate announced to be in effect from time
to
time, as published as the average rate in The Wall Street Journal
(Northeast
edition).
"Principal Balance" With respect to any Class of Certificates
(other
than the Class CE, Class P and Residual Certificates) and any
Distribution Date,
the Original Principal Balance (a) reduced by the sum of (i) all
amounts
actually distributed in respect of principal of such Class on all
prior
Distribution Dates and (ii) Applied Realized Loss Amounts allocated
thereto for
previous Distribution Dates and (b) increased by any Subsequent
Recoveries
allocated to such Class for previous Distribution Dates. The Class
CE, Class P
and Residual Certificates do not have a Principal Balance. With
respect to any
Certificate (other than a Class CE, Class P or Residual
Certificate) of a Class
and any Distribution Date, the portion of the Principal Balance of
such Class
represented by such Certificate equal to the product of the
Percentage Interest
evidenced by such Certificate and the Principal Balance of such
Class.
"Principal Distribution Amount" With respect to any
Distribution
Date, (a) the sum of (i) the Principal Remittance Amount and (ii)
the Extra
Principal Distribution Amount, if any, minus (b) the
Overcollateralization
Release Amount.
"Principal Prepayment" Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its
scheduled Due
Date and which is not accompanied by an amount of interest
representing the full
amount of scheduled interest due on any Due Date in any month or
months
subsequent to the month of prepayment.
"Principal Remittance Amount" With respect to any Distribution
Date,
to the extent of funds available therefor, an amount equal to (A)
the sum (less
amounts available for reimbursement of Advances and Servicing
Advances pursuant
to Section 3.05 and expenses reimbursable pursuant to Section 6.03
and amounts
reimbursable or payable to the Securities Administrator or Trustee
pursuant to
this Agreement, including, without limitation, Sections 8.05 and
Section
9.01(c)) of (i) each payment of principal on a Mortgage Loan due
during the
related Collection Period and received by the Servicer on or prior
to the
related Determination Date, and any Advances with respect thereto
(other than
any payment received on an Eligible Substitute Mortgage Loan
substituted during
the related Collection Period), (ii) all full and partial Principal
Prepayments
received by the Servicer during the related Prepayment Period,
(iii) Subsequent
Recoveries, Insurance Proceeds and Net Liquidation Proceeds
allocable to
principal actually collected by the Servicer during the related
Prepayment
Period, (iv) with respect to Defective Mortgage Loans repurchased
with respect
to such Prepayment Period, the portion of the Purchase Price
allocable to
principal, (v) any Substitution Adjustment Amounts received during
the related
Prepayment Period and (vi) on the Distribution Date on which the
Trust is to be
terminated in accordance with Section 10.01 hereof, that portion of
the
Termination Price in respect of principal; less (B) to the extent
any amounts
payable to the Swap Provider (including any Net Swap Payment and
any Swap
Termination Payment owed to the Swap Provider but excluding any
Swap Termination
Payment owed to the Swap Provider resulting from a Swap Provider
Trigger Event
and without duplication of any previously paid Replacement Swap
Provider
Payment) exceed the Interest Remittance Amount for such
Distribution Date
(without giving effect to clause (B) of the definition of "Interest
Remittance
Amount"), the amount of such excess.
"Private Certificates" Any of the Class B-4, Class CE, Class P
and
Class R Certificates.
"Private Placement Memorandum" That certain private placement
memorandum dated December 18, 2006 relating to the private
placement of the
Class B-4, Class CE and Class P Certificates.
"Prospectus" That certain Prospectus, dated December 18, 2006,
as
supplemented by the Prospectus Supplement.
"Prospectus Supplement" That certain Prospectus Supplement,
dated
December 18, 2006 relating to the public offering of the LIBOR
Certificates
(other than the Class B-4 Certificates).
"PT1 Cap" With respect to any Distribution Date, 10.310%.
"Purchase Price" With respect to any Mortgage Loan or REO
Property
to be purchased pursuant to or as contemplated by Section 2.01,
2.03 or 3.16, an
amount equal to the sum of (i) 100% of the unpaid principal balance
thereof as
of the date of purchase, (ii) in the case of a Mortgage Loan,
accrued interest
on such unpaid principal balance at the applicable Mortgage
Interest Rate in
effect from time to time from the Due Date as to which interest was
last covered
by a payment by the Mortgagor or an Advance by the Servicer, which
payment or
Advance had as of the date of purchase been distributed pursuant to
Section
4.01, through the end of the calendar month in which the purchase
is to be
effected, (iii) any unreimbursed Servicing Advances and Advances
and any unpaid
Servicing Fees allocable to such Mortgage Loan or REO Property,
(iv) any amounts
previously withdrawn from the Collection Account in respect of such
Mortgage
Loan or REO Property pursuant to Section 3.13 and (v) in the case
of a Mortgage
Loan required to be purchased pursuant to Section 2.03, expenses
reasonably
incurred or to be incurred by the Servicer, the Securities
Administrator or the
Trustee in respect of the breach or defect giving rise to the
purchase
obligation.
"Rate Ceiling" With respect to each Adjustable Rate Mortgage
Loan,
the maximum per annum Mortgage Interest Rate permitted under the
related
Mortgage Note.
"Rating Agency or Rating Agencies" Moody's, Fitch, S&P and
DBRS, or
their respective successors. If such agencies or their successors
are no longer
in existence, "Rating Agencies" shall be such nationally recognized
statistical
rating organizations as set forth on the most current list of such
organizations
released by the Commission and designated by the Depositor, notice
of which
designation shall be given to the Trustee, the Securities
Administrator and the
Servicer.
"Realized Loss" With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the
Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the
principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a
Deficient
Valuation or a reduction in the Principal Balance thereof resulting
from a
Servicer Modification.
"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, the Class M-5 Realized Loss Amortization
Amount, the Class
M-6 Realized Loss Amortization Amount, the Class B-1 Realized Loss
Amortization
Amount, the Class B-2 Realized Loss Amortization Amount, the Class
B-3 Realized
Loss Amortization Amount and the Class B-4 Realized Loss
Amortization Amount.
"Record Date" With respect to any Distribution Date and (i) the
Class CE, Class P and Residual Certificates, the last Business Day
of the
preceding month and (ii) any Class of Book-Entry Certificates, the
Business Day
immediately preceding such Distribution Date; provided, however,
that if any
Book-Entry Certificate becomes a Definitive Certificate, the Record
Date for
such Class shall be the last Business Day of the immediately
preceding month.
"Reference Banks" Initially, the Reference Banks shall be
Deutsche
Bank International, Bank of America, N.A., Citibank, N.A., and The
Fuji Bank,
Limited. If any of these banks are not available, the Securities
Administrator
shall select from one of the following banks a substitute Reference
Bank:
Westdeutsche Landesbank Girozentrale, The J.P. Morgan Chase Bank or
National
Westminster Bank Plc. If any of these banks are not available, the
Securities
Administrator shall in its discretion select another Reference
Bank.
"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
publicly provided by the Commission in the adopting release
(Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506,
1,531 (Jan.
7, 2005)) or by the staff of the Commission, or as may be provided
by the
Commission or its staff from time to time.
"Regulation FD" Regulation FD, 17 C.F.R. ss.ss.243.100-243.103,
as
such may be amended from time to time.
"Reimbursement Amount" With respect to any Mortgage Loan, any
costs
or damages incurred by the Trust in connection with a breach of the
Depositor's
representations set forth in Section 2.04(i) and (dd) hereof.
"Related Documents" With respect to any Mortgage Loan, the
related
Mortgage Notes, Mortgages and other related documents.
"Relevant Servicing Criteria" The Servicing Criteria applicable
to
the Securities Administrator, the Trustee, the Custodian or the
Servicer, as set
forth on Exhibit S attached hereto. For clarification purposes,
multiple parties
can have responsibility for the same Relevant Servicing Criteria.
With respect
to a Servicing Function Participant engaged by the Securities
Administrator, the
Trustee, the Custodian or the Servicer, the term "Relevant
Servicing Criteria"
refers to the portion of the Relevant Servicing Criteria applicable
to the party
engaging such Servicing Function Participant insofar as the
functions required
to be performed by such party are to be performed by the Servicing
Function
Participant.
"Relief Act" The Servicemembers Civil Relief Act, as it may be
amended from time to time.
"Relief Act Interest Shortfall" With respect to any
Distribution
Date, for any Mortgage Loan with respect to which there has been a
reduction in
the amount of interest collectible thereon for the most recently
ended
Collection Period as a result of the application of the Relief Act
or similar
state laws, the amount by which (i) interest collectible on such
Mortgage Loan
during such Collection Period is less than (ii) one month's
interest on the
principal balance of such Mortgage Loan at the Mortgage Interest
Rate for such
Mortgage Loan before giving effect to the application of the Relief
Act or
similar state laws.
"REMIC" A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC Provisions" Provisions of the federal income tax law
relating
to real estate mortgage investment conduits which appear at Section
860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
regulations and rulings promulgated thereunder, as the foregoing
may be in
effect from time to time.
"REMIC Regular Interest" Any Pooling-Tier REMIC-1 Regular
Interest,
Pooling-Tier REMIC-2 Regular Interest, Lower-Tier REMIC Regular
Interest or
Upper-Tier REMIC Regular Interest, the Class CE Interest or the
Class IO
Interest.
"Remittance Report" A report prepared by the Servicer and
delivered
to the Securities Administrator pursuant to Section 4.07,
containing the
information agreed to between the Servicer and the Securities
Administrator
necessary for the Securities Administrator to prepare each
Distribution Date
Statement.
"Rents from Real Property" With respect to any REO Property,
gross
income of the character described in Section 856(d) of the
Code.
"REO Disposition" The sale or other disposition of an REO
Property
on behalf of the Trust.
"REO Disposition Fee" The REO Disposition Fee shall be the
greater
of one percent (1%) of the gross sales price of the REO Property or
$1,500.00 up
to a maximum fee of $10,000 per REO Property.
"REO
Imputed Interest" As to any REO Property, for any Collection
Period, an amount equivalent to interest (at the Net Mortgage
Interest Rate that
would have been applicable to the related Mortgage Loan had it been
outstanding)
for such Collection Period on the unpaid principal balance of the
Mortgage Loan
as of the date of acquisition.
"REO Mortgage Loan" Any Mortgage Loan which is not a Liquidated
Mortgage Loan and as to which the indebtedness evidenced by the
related Mortgage
Note is discharged and the related Mortgaged Property is held as
part of the
Trust Fund.
"REO Principal Amortization" With respect to any REO Property,
for
any calendar month, the aggregate of all amounts received in
respect of such REO
Property during such calendar month, whether in the form of rental
income, sale
proceeds (including, without limitation, that portion of the
Termination Price
paid in connection with a purchase of all of the Mortgage Loans and
REO
Properties pursuant to Section 10.01 that is allocable to such REO
Property) or
otherwise, net of any portion of such amounts (i) payable pursuant
to Section
3.13 in respect of the proper operation, management and maintenance
of such REO
Property or (ii) payable or reimbursable to the Servicer pursuant
to Section
3.13 for unpaid Servicing Fees in respect of the related Mortgage
Loan and
payable and reimbursable to the Servicer or the Trustee for
unreimbursed
Servicing Advances and Advances in respect of such REO Property or
the related
Mortgage Loan.
"REO Property" A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure, as
described in Section 3.13.
"Replacement Swap Provider Payment" As defined in Section
3.04(m).
"Reportable Event" As defined in Section 3.28(c).
"Request for Release" A release signed by a Servicing Officer,
in
the form of Exhibit E attached hereto.
"Residential Dwelling" Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a
one-family dwelling unit in a condominium project, (iv) a
manufactured home, or
(v) a detached one-family dwelling in a planned unit development,
none of which
is a co-operative or mobile home.
"Residual Certificate" The Class R Certificate.
"Residual Interest" The sole Class of "residual interests" in
each
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer" When used with respect to the Trustee,
the
Securities Administrator, the Custodian or the Paying Agent, any
officer of the
Corporate Trust Department of the Trustee, the Securities
Administrator, the
Custodian or the Paying Agent having direct responsibility for
the
administration of this Agreement, 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 employee of the
Trustee, the
Securities Administrator, the Custodian or the Paying Agent
customarily
performing functions similar to those performed by any of the
above-designated
officers and in each case having direct responsibility for the
administration of
this Agreement. When used with respect to a Servicer, a Servicing
Officer.
"Retained Mortgage File" A file maintained by Wells Fargo Bank
prior
to any Document Transfer Date for each Mortgage Loan that contains
the documents
specified in Section 2.01(b) and any additional documents required
to be added
to the Retained Mortgage File pursuant to this Agreement.
"S&P" Standard & Poor's, a division of The McGraw-Hill
Companies,
Inc., and its successors, and if such company shall for any reason
no longer
perform the functions of a securities rating agency, "S&P"
shall be deemed to
refer to any other "nationally recognized statistical rating
organization" as
set forth on the most current list of such organizations released
by the
Commission.
"Sarbanes Oxley Certification" As defined in Section 3.28(b)
hereof.
"Securities Administrator" Wells Fargo Bank, or any successor
Securities Administrator appointed as herein provided.
"Securities Administrator Errors and Omissions Policy" An
insurance
policy covering losses caused by errors or omissions of the
Securities
Administrator and its personnel.
"Seller" Wells Fargo Bank, or its successor in interest, in its
capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Certificates" The Class A Certificates.
"Senior Enhancement Percentage" For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate
Principal
Balance of the Class M and Class B Certificates after taking into
account the
distribution of the Principal Distribution Amount on such
Distribution Date and
(ii) the Overcollateralization Amount as of such Distribution Date
by (y) the
Pool Balance as of the last day of the related Collection
Period.
"Senior Principal Distribution Amount" With respect to any
Distribution Date, the excess of (a) the aggregate Principal
Balance of the
Senior Certificates immediately prior to such Distribution Date
over (b) the
lesser of (x) the product of (1) 49.30% and (2) the aggregate
unpaid principal
balance of the Mortgage Loans as of the last day of the related
Collection
Period and (y) the Overcollateralization Floor.
"Senior Specified Enhancement Percentage" On any date of
determination thereof, 50.70%.
"Sequential Class M 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
Principal
Balances of the Senior Certificates (after taking into account the
payment of
the Senior Principal Distribution Amount on such Distribution Date)
and (ii) the
sum of the Principal Balances of the Sequential Class M
Certificates immediately
prior to such Distribution Date over (y) the lesser of (a) the
product of (i)
73.70% and (ii) the Pool Balance as of the last day of the related
Collection
Period and (b) the Overcollateralization Floor.
"Servicer" Wells Fargo Bank, or any successor servicer appointed
as
herein provided, in its capacity as Servicer hereunder. Initially
the servicing
functions performed by Wells Fargo Bank shall be performed by the
Wells Fargo
Home Mortgage division of Wells Fargo Bank.
"Servicer Errors and Omissions Policy" An insurance policy
covering
losses caused by errors or omissions of the Servicer and its
personnel,
including, but not limited to losses caused by the failure to pay
insurance
premiums or taxes, to record or perfect liens, to effect valid
transfers of
Mortgage Notes, or to properly service Mortgage Loans.
"Servicer Event of Termination" One or more of the events
described
in Section 7.01.
"Servicer Modification" A modification to the terms of a
Mortgage
Loan, in accordance with the terms of Section 3.01, as to which the
Mortgagor is
in default or as to which, in the judgment of the Servicer, default
is
reasonably foreseeable.
"Servicer Prepayment Penalty Payment Amount" The amount payable
by
the Servicer in respect of any waived Prepayment Penalties pursuant
to Section
3.01, which amount shall be equal to the difference between the
amount of
Prepayment Penalty due by a Mortgagor before any waiver and the
actual amount of
the Prepayment Penalty that was paid by the Mortgagor.
"Servicer Remittance Date" With respect to any Distribution
Date,
three Business Days prior to such Distribution Date.
"Servicing Advances" All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred by the Servicer (including
reasonable
attorneys' fees and disbursements) in the performance of its
servicing
obligations, including, but not limited to, the cost of (i) the
preservation,
restoration, inspection and protection of the Mortgaged Property,
(ii) any
enforcement or judicial proceedings, including foreclosures, (iii)
the
management and liquidation of the REO Property and (iv) compliance
with the
obligations under Section 3.08.
"Servicing Criteria" The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to
time.
"Servicing Fee" With respect to each Mortgage Loan (including
each
REO Property) and for any calendar month, an amount equal to one
month's
interest (or in the event of any payment of interest which
accompanies a
Principal Prepayment in full made by the Mortgagor during such
calendar month,
interest for the number of days covered by such payment of
interest) at the
Servicing Fee Rate on the same principal amount on which interest
on such
Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate" With respect to each Mortgage Loan, 0.50%
per
annum.
"Servicing Function Participant" Any Subservicer, Subcontractor
or
any other Person, other than the Securities Administrator, the
Trustee, the
Custodian and the Servicer, that is performing activities addressed
by the
Servicing Criteria.
"Servicing Officer" Any officer of the Servicer involved in, or
responsible for, the administration and servicing of Mortgage
Loans, whose name
and specimen signature appear on a list of servicing officers
furnished by the
Servicer to the Trustee, the Securities Administrator and the
Depositor, as such
list may from time to time be amended.
"Servicing
Standards" The standards set forth in Section 3.01.
"Similar Law" As defined in Section 5.02(d) hereof.
"Startup Day" As defined in Section 9.01(b) hereof.
"Stayed Funds" Any payment required to be made under the terms
of
the Certificates and this Agreement but which is not remitted by
the Servicer
because the Servicer is the subject of a proceeding under the
Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of
the Bankruptcy
Code.
"Stepdown Date" The earlier to occur of (i) the Distribution
Date
following the Distribution Date on which the aggregate Principal
Balance of the
Senior Certificates is reduced to zero and (ii) the later to occur
of (x) the
Distribution Date in January 2010 and (y) the Distribution Date on
which the
Senior Enhancement Percentage for the prior Distribution Date is
greater than or
equal to the Senior Specified Enhancement Percentage.
"Subcontractor" Any vendor, subcontractor or other Person that
is
not responsible for the overall servicing of Mortgage Loans but
performs one or
more discrete functions identified in Item 1122(d) of Regulation AB
with respect
to Mortgage Loans under the direction or authority of the Servicer
(or a
Subservicer of the Servicer), the Securities Administrator, the
Trustee or the
Custodian.
"Subordination Depletion Date" The Distribution Date on which
the
aggregate Principal Balance of the Class M and Class B Certificates
is reduced
to zero and the Overcollateralization Amount is reduced to
zero.
"Subsequent 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.
"Subservicer" Any Person that (i) services Mortgage Loans on
behalf
of the Servicer, and (ii) is responsible for the performance
(whether directly
or through Subservicers or Subcontractors) of a substantial portion
of the
material servicing functions required to be performed under this
Agreement or
any sub-servicing agreement that are identified in Item 1122(d) of
Regulation
AB.
"Substitution Adjustment Amount" As defined in Section 2.03(d)
hereof.
"Supplemental Interest Trust" The corpus of a trust created
pursuant
to this Agreement, consisting of the Supplemental Interest Trust
Account created
pursuant to Section 3.04(h) of this Agreement, the Interest Rate
Swap Agreement,
the Interest Rate Cap Agreement and the right to receive Class IO
Shortfalls,
subject to the obligation to pay amounts specified in Section
3.04(h).
"Supplemental Interest Trust Account" The segregated trust
account
created and maintained by the Securities Administrator pursuant to
Section
3.04(h) which shall be entitled "Supplemental Interest Trust
Account, Wells
Fargo Bank, N.A., as Securities Administrator for HSBC Bank USA,
National
Association, as Trustee, in trust for registered Holders of the
LIBOR
Certificates of Wells Fargo Home Equity Asset-Backed Securities
2006-3 Trust,
Home Equity Asset-Backed Certificates, Series 2006-3," and which
must be an
Eligible Account. Amounts on deposit in the Supplemental Interest
Trust Account
shall not be invested. The Supplemental Interest Trust Account
shall not be an
asset of any REMIC formed under this Agreement.
"Swap Early Termination" The occurrence of an early termination
under the Interest Rate Swap Agreement.
"Swap LIBOR" As to any Distribution Date, LIBOR as determined
pursuant to the Interest Rate Swap Agreement with respect to such
Distribution
Date.
"Swap Notional Amount" The swap notional amount set forth on
Schedule I of the Interest Rate Swap Agreement.
"Swap Provider" Barclays Bank PLC.
"Swap Provider Trigger Event" The occurrence of any of the
following: (i) an "Event of Default" under the Interest Rate Swap
Agreement with
respect to the Swap Provider, (ii) a "Termination Event" under the
Interest Rate
Swap Agreement (other than illegality or a tax event) with respect
to which the
Swap Provider is the sole Affected Party (as defined in the
Interest Rate Swap
Agreement) or (iii) an "Additional Termination Event" under the
Interest Rate
Swap Agreement with respect to which the Swap Provider is the sole
"Affected
Party."
"Swap Termination Payment" The amount, if any, owed by the
Supplemental Interest Trust to the Swap Provider or by the Swap
Provider to the
Supplemental Interest Trust upon a Swap Early Termination.
"Targeted Overcollateralization Amount" As of any Distribution
Date,
(x) prior to the Stepdown Date, 3.30% of the Pool Balance as of the
Cut-off Date
and (y) on and after the Stepdown Date, (i) if a Trigger Event has
not occurred
for such Distribution Date, the greater of (A) 6.60% of the Pool
Balance as of
the last day of the related Collection Period and (B) 0.50% of the
Pool Balance
as of the Cut-off Date and (ii) if a Trigger Event has occurred for
such
Distribution Date, the Targeted Overcollateralization Amount for
the immediately
preceding Distribution Date.
"Tax Matters Person" With respect to each Trust REMIC, the
Person
designated as the "tax matters person" for each such Trust REMIC in
Section
9.01(e) hereof, in each case in the manner provided under Treasury
Regulations
Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1.
"Tax Returns" The federal income tax returns on Internal
Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit
Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual
Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any
successor
forms, to be filed on behalf of the Trust for each of the five
REMICs created
pursuant to this Agreement under the REMIC Provisions, together
with any and all
other information reports or returns that may be required to be
furnished to the
Certificateholders or filed with the Internal Revenue Service or
any other
governmental taxing authority under any applicable provisions of
federal, state
or local tax laws.
"Telerate Page 3750" The display page currently so designated on
the
Moneyline Telerate Service (or such other page as may replace the
Telerate Page
3750 page on the Moneyline Telerate Service for the purpose of
displaying London
interbank offered rates of major banks).
"Termination Price" As defined in Section 10.01(a) hereof.
"Trigger Event" With respect to any Distribution Date, if (i)
the
three-month rolling average of 60+ Day Delinquent Loans (as a
percentage of the
Pool Balance as of the last day of the related Collection Period)
equals or
exceeds 31.56% of the Senior Enhancement Percentage for the prior
Distribution
Date or (ii) the aggregate amount of Realized Losses incurred since
the
applicable Cut-off Date through the last day of the related
Collection Period
(reduced by the aggregate amount of Subsequent Recoveries received
since the
applicable Cut-off Date through the end of the last day of the
related
Collection Period) divided by the Pool Balance on the Cut-off Date
exceeds the
applicable percentages set forth below with respect to such
Distribution Date:
<TABLE>
<CAPTION>
Distribution Date Occurring In
Percentage
---------------------------------------------
----------------------------------------------------------
<S>
<C>
January 2009 through December 2009
1.400% for the first month, plus an additional 1/12th of
1.650% for each month thereafter
January 2010 through December 2010
3.050% for the first month, plus an additional 1/12th of
1.750% for each month thereafter
January 2011 through December 2011
4.800% for the first month, plus an additional 1/12th of
1.400% for each month thereafter
January 2012 through December 2012
6.200% for the first month, plus an additional 1/12th of
0.750% for each month thereafter
January 2013 and thereafter
6.950%
</TABLE>
"Trust" Wells Fargo Home Equity Asset-Backed Securities 2006-3
Trust, the New York common law trust created hereunder.
"Trustee Errors and Omissions Policy" An insurance policy
covering
losses caused by errors or omissions of the Trustee and its
personnel.
"Trust Fund" The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be
administered hereunder,
with respect to a portion of which five REMIC elections are to be
made, such
entire Trust Fund consisting of: (i) such Mortgage Loans as from
time to time
are subject to this Agreement, together with the Mortgage Files
relating
thereto, and together with all collections thereon and proceeds
thereof, (ii)
any REO Property, together with all collections thereon and
proceeds thereof,
(iii) the Trustee's rights with respect to the Mortgage Loans under
all
insurance policies required to be maintained pursuant to this
Agreement and any
proceeds thereof, (iv) the Depositor's rights under the Mortgage
Loan Purchase
Agreement (including any security interest created thereby), (v)
the Securities
Administrator's rights under the Interest Rate Swap Agreement, (vi)
the Interest
Rate Swap Agreement, (vii) the Securities Administrator's rights
under the
Interest Rate Cap Agreement, (viii) the Interest Rate Cap Agreement
and (ix) the
Collection Account, the Distribution Account, the Excess Reserve
Fund Account,
the Supplemental Interest Trust Account and such assets that are
deposited
therein from time to time and any investments thereof, together
with any and all
income, proceeds and payments with respect thereto.
"Trust REMIC" As defined in the Preliminary Statement.
"Trustee" HSBC Bank USA, National Association, a national
banking
association, in its capacity as trustee hereunder, or any successor
Trustee
appointed as herein provided.
"United States Person" or "U.S. Person" (i) A citizen or resident
of
the United States, (ii) a corporation, partnership or other entity
treated as a
corporation or partnership for United States federal income tax
purposes
organized in or under the laws of the United States or any state
thereof or the
District of Columbia (unless, in the case of a partnership,
Treasury Regulations
provide otherwise), (iii) an estate the income of which is
includible in gross
income for United States tax purposes, regardless of its source, or
(iv) a trust
if a court within the United States is able to exercise primary
supervision over
the administration of the trust and one or more United States
persons have
authority to control all substantial decisions of the trust.
Notwithstanding the
preceding sentence, to the extent provided in Treasury Regulations,
certain
Trusts in existence on August 20, 1996, and treated as United
States persons
prior to such date, that elect to continue to be treated as United
States
persons will also be a U.S. Person; provided, that for purposes of
the
definition of a "Permitted Transferee," a U.S. Person shall not
include any
person whose income is attributable to a foreign permanent
establishment or
fixed base, within the meaning of an applicable income tax treaty,
of such
Person or any other Person.
"Unpaid Realized Loss Amount" For any Class of Class M and Class
B
Certificates and as to any Distribution Date, the excess of (x) the
aggregate
Applied Realized Loss Amounts applied with respect to such Class
for all prior
Distribution Dates over (y) the sum of (a) the cumulative amount of
any
Subsequent Recoveries allocated to such Class, (b) the cumulative
amount of
related Realized Loss Amortization Amounts with respect to such
Class for all
prior Distribution Dates and (c) the cumulative amount of Unpaid
Realized Loss
Amounts reimbursed to such Class for all prior Distribution Dates
pursuant to
Section 3.04(h)(i) clause seventh.
"Upper-Tier Interest Rate" As described in the Preliminary
Statement.
"Upper-Tier REMIC" As described in the Preliminary Statement.
"Upper-Tier REMIC Regular Interest" As described in the
Preliminary
Statement.
"Upper-Tier REMIC WAC Rate" For any Distribution Date, the
weighted
average of the Lower-Tier Interest Rates on the Lower-Tier Regular
Interests
(other than the Class LT-IO Interest), as of the first day of the
related
Interest Accrual Period, weighted on the basis of the Lower-Tier
Principal
Amounts of such Lower-Tier Regular Interests as of the first day of
the related
Interest Accrual Period.
"Value" With respect to any Mortgaged Property, the value thereof
as
determined by an independent appraisal made at the time of the
origination of
the related Mortgage Loan or the sale price, if the appraisal is
not available.
"Voting Interests" The portion of the voting rights of all of
the
Certificates which is allocated to any Certificate. The Voting
Interests
allocated among Holders of the LIBOR Certificates shall be 98%, and
shall be
allocated among each such Class according to the fraction,
expressed as a
percentage, the numerator of which is the aggregate Principal
Balance of all the
Certificates of such Class then outstanding and the denominator of
which is the
aggregate Principal Balance of all the LIBOR Certificates then
outstanding. The
Voting Interests allocated to each such Class of Certificates shall
be allocated
among all holders of each such Class in proportion to the
outstanding Principal
Balance of such Certificates; provided, however, that any
Certificate registered
in the name of the Servicer, the Depositor, the Securities
Administrator or the
Trustee or any of their respective affiliates shall not be included
in the
calculation of Voting Interests; provided that only such
Certificates as are
known by a Responsible Officer of the Securities Administrator to
be so
registered will be so excluded. One percent of all the Voting
Interests will be
allocated to the Holders of each of the Class CE and Class P
Certificates. The
Class R Certificate shall have no Voting Interest.
"Wells Fargo Bank" Wells Fargo Bank, N.A., a national banking
association, or its successor in interest.
"Wells Fargo Bank Correspondents" The entities identified on a
list
provided by Wells Fargo Bank to the Servicer, from which Wells
Fargo Bank
purchased the Mortgage Loans.
"Written Order to Authenticate" A written order of the
Depositor
directing the Securities Administrator to execute, authenticate and
deliver the
Certificates.
Section 1.02 Accounting. Unless otherwise specified herein, for
the
purpose of any definition or calculation, whenever amounts are
required to be
netted, subtracted or added or any distributions are taken into
account such
definition or calculation and any related definitions or
calculations shall be
determined without duplication of such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, does hereby
transfer,
assign, set over and otherwise convey to the Trustee, on behalf of
the Trust,
without recourse for the benefit of the Certificateholders all the
right, title
and interest of the Depositor, including any security interest
therein for the
benefit of the Depositor, in and to (i) each Mortgage Loan
identified on the
Mortgage Loan Schedule, including the related Cut-off Date
Principal Balance,
all interest accruing thereon after the applicable Cut-off Date and
all
collections in respect of interest and principal due after the
applicable
Cut-off Date; (ii) property which secured each such Mortgage Loan
and which has
been acquired by foreclosure or deed in lieu of foreclosure; (iii)
its interest
in any insurance policies in respect of the Mortgage Loans; (iv)
all other
assets included or to be included in the Trust Fund; (v) all
proceeds of any of
the foregoing; and (vi) the rights of the Depositor under the
Mortgage Loan
Purchase Agreement. Such assignment includes all interest and
principal due to
the Depositor or the Servicer after the applicable Cut-off Date
with respect to
the Mortgage Loans. It is agreed and understood by the Depositor
and the Trustee
that it is not intended that any mortgage loan be included in the
Trust Fund
that is a "High-Cost Home Loan" as defined in (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.
In connection with such assignment, the Depositor shall, with
respect to each Mortgage Loan, deliver, or cause to be delivered,
to the
Custodian, on or before the Closing Date the following documents or
instruments
with respect to each Mortgage Loan:
(i) The original Mortgage Note either (A) endorsed in blank or
(B)
endorsed
as provided in Section 2.01(d), with all prior and intervening
endorsements as may be necessary to show a complete chain of
endorsements
or with
respect to any Mortgage Loan as to which the original Mortgage
Note has
been permanently lost or destroyed and has not been replaced, a
lost note
affidavit with a copy of the Mortgage Note and, in the case of
any
Mortgage Loan originated in the State of New York documented by
a
NYCEMA,
the NYCEMA, the new Mortgage Note, if applicable, the
consolidated
Mortgage
Note and the consolidated Mortgage;
(ii) A recorded original assignment of the related Mortgage
from
Wells
Fargo Bank assigning the related Mortgage to the Trustee,
certified
by the
recording office, or, if such assignment is in the process of
being
recorded,
a copy of the related Mortgage transmitted for recordation
certified
by an officer of Wells Fargo Bank or applicable Wells Fargo
Bank
Correspondent to be a true and correct copy of such assignment
submitted
for
recordation; provided, however, if recordation is not required
as
described
below, an assignment in recordable form (which may be assigned
in blank)
with respect to the related Mortgage;
(iii) The original of each assumption agreement, modification,
written
assurance or substitution agreement pertaining to such Mortgage
Note, if
any; and
(iv) For each Mortgage Loan secured by Co-op Shares, the
originals
of the
following documents or instruments:
(A) The loan security agreement;
(B) The stock certificate;
(C) The stock power, executed in blank;
(D) The executed proprietary lease;
(E) The executed recognition agreement;
(F) The executed UCC-1 financing statement with evidence of
recording thereon; and
(G) The executed UCC-3 financing statements or other
appropriate UCC financing statements required by state law,
evidencing a complete and unbroken chain from the mortgagee to
the
Trustee with evidence of recording thereon (or in a form
suitable
for recordation).
(b) The Securities Administrator shall promptly notify the
Depositor, the Trustee and the Custodian of the occurrence of any
Document
Transfer Event of which the Securities Administrator had knowledge.
Following
the receipt of such notice, the Depositor shall, with respect to
each Mortgage
Loan, deliver, or cause to be delivered, to the Custodian, no later
than the
Document Transfer Date, copies (which may be in electronic form
mutually agreed
upon by the Depositor and the Custodian) of the following
additional documents
or instruments with respect to each Mortgage Loan; provided,
however, that
originals of such documents or instruments shall be delivered to
the Custodian
if originals are required under the law in which the related
Mortgaged Property
is located in order to exercise all remedies available to the Trust
under
applicable law following default by the related Mortgagor:
(i) The original recorded Mortgage with evidence of recordation
noted
thereon or attached thereto, together with any addenda or
riders
thereto,
or a copy of such recorded Mortgage with such evidence of
recordation certified to be true and correct by the appropriate
governmental recording office; or a copy of such recorded Mortgage
with
such
evidence of recordation, or if the original Mortgage has been
submitted
for recordation but has not been returned from the applicable
public
recording office, a copy of the Mortgage certified by an officer
of
Wells
Fargo Bank or the applicable Wells Fargo Bank Correspondent to be
a
true and
correct copy of the original Mortgage submitted for
recordation;
(ii) The original of each assumption agreement, modification,
written
assurance or substitution agreement pertaining to such
Mortgage,
if any,
or, if such document is in the process of being recorded, a
copy
of such
document, certified by an officer of Wells Fargo Bank or the
applicable
Wells Fargo Bank Correspondent of such Mortgage Loan or by the
applicable
title insurance company, closing agent, settlement agent,
escrow
agent or closing attorney to be a true and correct copy of such
document
transmitted for recordation, if any;
(iii) For each MERS Mortgage Loan that is not a MOM Mortgage
Loan,
the
original assignment showing MERS as the assignee of the Mortgage,
with
evidence
of recording thereon or copies thereof certified by an officer
of
Wells
Fargo Bank or the applicable Wells Fargo Bank Correspondent to
have
been
submitted for recordation;
(iv) Each original recorded intervening assignment of the
Mortgage
as may be
necessary to show a complete chain of title from the Mortgage
Loan
originator to Wells Fargo Bank or Wells Fargo Home Mortgage,
Inc.,
with
evidence of recordation noted thereon or attached thereto, or a
copy
of such
assignment with such evidence of recordation to be true and
correct by
the appropriate governmental recording office, or, if any such
assignment
has been submitted for recordation but has not been returned
from the
applicable public recording office or is not otherwise
available,
a copy of
such assignment certified by an officer of Wells Fargo Bank or
the
applicable Wells Fargo Bank Correspondent to be a true and
correct
copy of
the recorded assignment submitted for recordation; and
(v) The original policy of the title insurance or certificate
of
title
insurance or a written commitment to issue such a title
insurance
policy or
certificate of title insurance, or a copy of such title
insurance
certified as true and correct by the applicable insurer or any
attorney's
certificate of title with an Officer's Certificate of Wells
Fargo Bank
or the applicable Wells Fargo Bank Correspondent that such
attorney's
certificate of title is customarily used in lieu of a title
insurance
policy in the jurisdiction in which the related mortgage
property
is located.
(c) If any assignment of a Mortgage to the Trustee is in the
process
of being recorded on the Closing Date, the Depositor shall use its
best efforts
to cause each such original recorded document or certified copy
thereof to be
delivered to the Custodian promptly following its recordation, but
in no event
later than one (1) year following the Closing Date. If any Mortgage
has been
recorded in the name of 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
Fund to be
shown as the owner of the related Mortgage Loan on the records of
MERS for the
purpose of the system of recording transfers of beneficial
ownership of
mortgages maintained by MERS. The Depositor shall also cause to be
delivered to
the Custodian any other original mortgage loan document included in
the Owner
Mortgage File (and, if applicable, the Retained Mortgage File) if a
copy thereof
has been delivered. The Depositor shall pay from its own funds,
without any
right of reimbursement therefor, the amount of any costs,
liabilities and
expenses incurred by the Trust by reason of the failure of the
Depositor to
cause to be delivered to the Custodian within one (1) year
following the Closing
Date any assignment of a Mortgage (except with respect to any
Mortgage recorded
in the name of MERS) not delivered to the Custodian on the Closing
Date.
In lieu of recording an assignment of any Mortgage the
Depositor
may, deliver or cause to be delivered to the Custodian the
assignment of the
Mortgage Loan to the Trustee in a form suitable for recordation, if
(i) with
respect to a particular state the Trustee and the Custodian have
received an
Opinion of Counsel acceptable to it that such recording is not
required to make
the assignment effective against the parties to the Mortgage or
subsequent
purchasers or encumbrancers of the Mortgaged Property or (ii) the
Depositor has
been advised by each Rating Agency that non recordation in a state
will not
result in a reduction of the rating assigned by that Rating Agency
at the time
of initial issuance of the Certificates. Set forth on Exhibit Q
attached hereto
is a list of all states where recordation is required by any Rating
Agency to
obtain the initial ratings of the Certificates. The Custodian may
rely and shall
be protected in relying upon the information contained in such
Exhibit Q. In the
event that the Custodian receives notice that recording is required
to protect
the right, title and interest of the Trustee in and to any such
Mortgage Loan
for which recordation of an assignment has not previously been
required, the
Custodian shall promptly notify the Trustee and the Custodian shall
within five
Business Days (or such other reasonable period of time mutually
agreed upon by
the Custodian and the Trustee) of its receipt of such notice
deliver each
previously unrecorded assignment to the related Servicer for
recordation.
(d) Except for Mortgage Notes endorsed in blank, endorsements
shall
comply with the following format:
WITHOUT RECOURSE
PAY TO THE ORDER OF:
HSBC BANK USA, NATIONAL ASSOCIATION, AS
TRUSTEE under the pooling and servicing
agreement dated as of December 21, 2006.
and its successors and assigns,
[Wells Fargo Bank, N.A.][Wells Fargo Home Mortgage, Inc.]
[Signature of Officer]
[Officer's Name and Title]
Except where assignments in blank are authorized or in the case
of
any Mortgage registered in the name of MERS, assignments of any
Mortgage shall
comply with the following:
HSBC BANK USA, NATIONAL ASSOCIATION, AS
TRUSTEE
and its successors and assigns
(e) Concurrently with the execution and delivery of this
Agreement,
the Depositor shall deliver the Mortgage Loan Schedule to the
Trustee, the
Securities Administrator, the Servicer and the Custodian. The
Depositor and the
Securities Administrator shall provide a copy of the Mortgage Loan
Schedule to
any Certificateholders upon written request made to it at the
addresses set
forth on Exhibit D, as the same may be amended from time to time by
written
notice from such party to the other parties hereto.
(f) The Securities Administrator shall monitor the rating of
Wells
Fargo & Company and upon the occurrence of a Document Transfer
Event relating to
such rating, shall promptly notify the Servicer, Depositor, Trustee
and
Custodian of the occurrence of such Document Transfer Event.
Section 2.02 Acceptance by Custodian. The Custodian, on behalf
of
the Trustee, acknowledges the receipt of, subject to the provisions
of Section
2.01 and subject to the review described below and any exceptions
noted on the
exception report described in the next paragraph below, the
documents referred
to in Section 2.01 above and all other assets included in the
definition of
"Trust Fund" and declares that it holds and will hold such
documents and the
other documents delivered to it constituting the Owner Mortgage
File (and in the
case of a Document Transfer Event, the Retained Mortgage File), and
that it
holds or will hold all such assets and such other assets included
in the
definition of "Trust Fund" in trust for the exclusive use and
benefit of all
present and future Certificateholders.
The Custodian, for the benefit of the Certificateholders, shall
execute and deliver to the Servicer, the Securities Administrator,
the Trustee
and the Depositor on or prior to the Closing Date an initial
certification in
the form attached hereto as Exhibit F-1 hereto, to the effect that,
except as
may be specified in a list of exceptions attached thereto, it has
received the
original Mortgage Notes (described in Section 2.01(a)(i)) relating
to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan
that has been paid in full, liquidated or otherwise released as of
the date of
such certification, and subject to any exceptions specifically
identified in the
exception report annexed to such certification).
The Custodian will review each Owner Mortgage File within 45
days
after execution of this Agreement. The Custodian will deliver no
later than 30
days after completion of such review to the Servicer, the
Securities
Administrator, the Trustee and the Depositor a final certification
in the form
of Exhibit F-2 hereto to the effect that, except as may be
specified in a list
of exceptions attached thereto, all required documents set forth in
Section
2.01(a) have been executed and received and appear regular on their
face, and
that such documents relate to the Mortgage Loans identified in the
Mortgage Loan
Schedule based on a comparison of the Mortgage Loan identifying
number,
Mortgagor name and street address, and in so doing the Custodian
may rely on the
purported due execution and genuineness of any such document and on
the
purported genuineness of any signature thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to
above, the
Custodian finds any document or documents constituting a part of a
Mortgage File
to be missing or defective in any material respect, at the
conclusion of its
review the Custodian shall so notify the Depositor, the Trustee,
the Securities
Administrator and the Servicer.
The Securities Administrator is hereby directed to execute and
deliver, on behalf of the Supplemental Interest Trust, the Interest
Rate Swap
Agreement and the Interest Rate Cap Agreement.
If the Interest Rate
Swap Agreement or Interest Rate Cap Agreement
is terminated, the Securities Administrator shall enter into a
replacement
interest rate swap agreement or interest rate cap agreement, as
applicable, upon
written direction of the Depositor.
Section 2.03 Repurchase or Substitution of Mortgage Loans by
the
Depositor. (a) Upon discovery or receipt of written notice of any
materially
defective document in, or that a document is missing from, an Owner
Mortgage
File (or, if applicable, a Retained Mortgage File) or of a breach
of a
representation of warranty of the Depositor in Section 2.04 hereof,
in respect
of any Mortgage Loan and such breach materially adversely affects
the value of
such Mortgage Loan, Prepayment Penalty or the interest therein of
the
Certificateholders, the Trustee (or the Custodian) shall promptly
(and in no
event more than 30 days after completion of the review) notify the
Depositor and
the Servicer of such defect, missing document or breach and request
that the
Depositor cure such defect or breach or deliver such missing
document within 60
days from the date the Depositor was notified of such missing
document, breach
or defect. If the Depositor does not deliver such missing document
or cure such
defect or cure such breach in all material respects during such
period, the
Depositor shall repurchase such Mortgage Loan from the Trust Fund
at the
Purchase Price on or prior to the Determination Date following the
expiration of
such period (subject to Section 2.03(d) and the last paragraph of
this Section
2.03(a)). The Purchase Price for the repurchased Mortgage Loan
shall be
deposited in the Collection Account, and the Custodian, upon
receipt of written
notice from the Servicer of such deposit, shall release to the
Depositor the
Owner Mortgage File (and, if applicable, Retained Mortgage File) of
the Mortgage
Loan being repurchased. The Trustee shall execute and deliver such
instruments
of transfer or assignment (or, in the case of a Mortgage Loan
registered in the
name of MERS or its designee, the Servicer shall reflect such
assignment on the
records of MERS), in each case without recourse, as the Depositor
shall furnish
to it and as shall be necessary to vest in the Depositor any
Mortgage Loan
released pursuant hereto and the Custodian and the Trustee shall
have no further
responsibility with regard to such Owner Mortgage File (and, if
applicable,
Retained Mortgage File). In lieu of repurchasing any such Mortgage
Loan as
provided above, the Depositor may cause such Mortgage Loan to be
removed from
the Trust Fund (in which case it shall become a Defective Mortgage
Loan) and
substitute one or more Eligible Substitute Mortgage Loans in the
manner and
subject to the limitations set forth in Section 2.03(d).
It is understood and agreed that the representations and
warranties
set forth in Section 2.04 hereof shall survive delivery of the
Owner Mortgage
Files (and, if applicable, Retained Mortgage Files) to the
Custodian and shall
inure to the benefit of the Certificateholders notwithstanding any
restrictive
or qualified endorsement or assignment. It is understood and agreed
that the
obligations of the Depositor set forth in this Section 2.03(a) to
cure,
substitute for or repurchase a Mortgage Loan and to pay the
Reimbursement Amount
constitute the sole remedies available to the Certificateholders
and to the
Trustee on their behalf respecting a breach of the representations
and
warranties in Section 2.04 hereof.
(b) In addition to the foregoing, in the case of a breach of
the
Depositor's representation set forth in Section 2.04(i) and (dd)
hereof, the
Depositor shall pay to the Trust the Reimbursement Amount. The
Reimbursement
Amount shall be delivered to the Servicer for deposit into the
Collection
Account within 10 days from the date the Depositor was notified by
the Trustee
of the amount of such costs and damages.
(c) Within 90 days of the earlier of discovery by the Servicer
or
receipt of notice by the Servicer of the breach of any
representation, warranty
or covenant of the Servicer set forth in Section 2.05 which
materially and
adversely affects the interests of the Certificateholders in any
Mortgage Loan,
the Servicer shall cure such breach in all material respects.
(d) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be
effected prior
to the last Business Day that is within two years after the Closing
Date. As to
any Defective Mortgage Loan for which the Depositor substitutes an
Eligible
Substitute Mortgage Loan or Loans, such substitution shall be
effected by the
Depositor delivering to the Custodian, on the Trustee's behalf for
such Eligible
Substitute Mortgage Loan or Loans, the documents required by
Section 2.01,
together with an Officer's Certificate providing that each such
Eligible
Substitute Mortgage Loan satisfies the definition thereof and
specifying the
Substitution Adjustment Amount, if any, in connection with such
substitution.
The Custodian shall acknowledge receipt for such Eligible
Substitute Mortgage
Loan or Loans and, within ten Business Days thereafter, the
Custodian shall
review such documents as specified in Section 2.02 and deliver to
the Servicer
and the Trustee, with respect to such Eligible Substitute Mortgage
Loan or
Loans, a certification substantially in the form attached hereto as
Exhibit F-1,
with any applicable exceptions noted thereon. Within one year of
the date of
substitution, the Custodian shall deliver to the Servicer and the
Trustee a
certification substantially in the form of Exhibit F-2 hereto with
respect to
such Eligible Substitute Mortgage Loan or Loans, with any
applicable exceptions
noted thereon. Monthly Payments due with respect to Eligible
Substitute Mortgage
Loans in the month of substitution are not part of the Trust Fund
and will be
retained by the Depositor. For the month of substitution,
distributions to
Certificateholders will reflect the collections and recoveries in
respect of
such Defective Mortgage Loan in the Collection Period or Prepayment
Period, as
applicable, preceding the date of substitution and the Depositor
shall
thereafter be entitled to retain all amounts subsequently received
in respect of
such Defective Mortgage Loan. The Depositor shall give or cause to
be given
written notice to the Certificateholders that such substitution has
taken place,
shall amend the Mortgage Loan Schedule to reflect the removal of
such Defective
Mortgage Loan from the terms of this Agreement and the substitution
of the
Eligible Substitute Mortgage Loan or Loans and shall deliver a copy
of such
amended Mortgage Loan Schedule to the Trustee, the Servicer, the
Securities
Administrator and the Custodian. Upon such substitution, such
Eligible
Substitute Mortgage Loan or Loans shall constitute part of the
Mortgage Pool and
shall be subject in all respects to the terms of this Agreement,
including all
applicable representations and warranties as of the date of
substitution.
For any month in which the Depositor substitutes one or more
Eligible Substitute Mortgage Loans for one or more Defective
Mortgage Loans, the
Servicer will determine the amount (the "Substitution Adjustment
Amount"), if
any, by which the aggregate Purchase Price of all such Defective
Mortgage Loans
exceeds the aggregate, as to each such Eligible Substitute Mortgage
Loan, of the
principal balance thereof as of the date of substitution, together
with one
month's interest on such principal balance at the applicable Net
Mortgage
Interest Rate. On the date of such substitution, the Depositor will
deliver or
cause to be delivered to the Servicer for deposit in the Collection
Account an
amount equal to the Substitution Adjustment Amount, if any, and the
Custodian,
on behalf of the Trustee, upon receipt of the related Eligible
Substitute
Mortgage Loan or Loans and notice by the Servicer of such deposit,
shall release
to the Depositor the related Owner Mortgage File (and, if
applicable, Retained
Mortgage File) and the Trustee shall execute and deliver such
instruments of
transfer or assignment, in each case without recourse, as the
Depositor shall
deliver to it and as shall be necessary to vest therein any
Defective Mortgage
Loan released pursuant hereto.
The Depositor shall determine the Purchase Price or the
eligibility
of any Eligible Substitute Mortgage Loan and the Trustee shall be
protected in
relying on such determination.
(e) Upon discovery by the Depositor, the Seller, the Servicer,
the
Securities Administrator, the Custodian or the Trustee that any
Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of
Section
860G(a)(3) of the Code, the party discovering such fact shall
within two
Business Days give written notice thereof to the other parties. In
connection
therewith, the Depositor shall repurchase or, subject to the
limitations set
forth in Section 2.03(d), substitute one or more Eligible
Substitute Mortgage
Loans for the affected Mortgage Loan within 60 days of the earlier
of discovery
or receipt of such notice with respect to such affected Mortgage
Loan. In
addition, upon discovery that a Mortgage Loan is defective in a
manner that
would cause it to be a "defective obligation" within the meaning of
Treasury
Regulations relating to REMICs, the Depositor shall cure the defect
or make the
required purchase or substitution no later than 60 days after the
discovery of
the defect. Any such repurchase or substitution shall be made in
the same manner
as set forth in Section 2.03(a). The Trustee shall reconvey to the
Depositor the
Mortgage Loan to be released pursuant hereto in the same manner,
and on the same
terms and conditions, as it would a Mortgage Loan repurchased for
breach of a
representation or warranty.
(f) The Trustee shall be responsible for enforcing the
Depositor's
obligations under this Section 2.03. If the Trustee receives
written notice from
the Custodian or the Securities Administrator that the defect is
not cured by
the Depositor within 60 days after the Trustee's notice, the
Trustee shall
enforce the Depositor's obligation to repurchase such Mortgage Loan
or
substitute for such Mortgage Loan in accordance with the provisions
of this
Section 2.03. In connection with any substitution permitted by this
Section
2.03, the Trustee shall verify that the unpaid principal balance
and the
Loan-to-Value Ratio of the Eligible Substitute Mortgage Loan
satisfy the
requirements of this Section 2.03.
Section 2.04 Representations and Warranties of the Depositor
with
respect to the Mortgage Loans. The Depositor hereby represents and
warrants to
the Trustee for the benefit of the Certificateholders that as of
the Closing
Date or as of such other date specifically provided herein:
(a) The information set forth in the Mortgage Loan Schedule was
true
and correct in all material respects, including, without
limitation, the
information regarding any Prepayment Penalty, at the date or dates
respecting
which such information was furnished as specified in the Mortgage
Loan Schedule;
(b) Immediately prior to the transfer and assignment
contemplated
herein, the Depositor was the sole owner and holder of the Mortgage
Loan free
and clear of any and all liens, pledges, charges or security
interests of any
nature and has full right and authority to sell and assign the
same;
(c) All payments required to be made up to the Due Date for
such
Mortgage Loan immediately preceding the Closing Date under the
terms of the
related Mortgage Note have been made and no Mortgage Loan had more
than one
delinquency in the 12 months preceding the applicable Cut-off
Date;
(d) The Mortgage Note, the related Mortgage and other
agreements
executed in connection therewith are genuine, and each is the
legal, valid and
binding obligation of the maker thereof, enforceable in accordance
with its
terms, except as such enforcement may be limited by bankruptcy,
insolvency,
reorganization or other similar laws affecting the enforcement of
creditors'
rights generally and by general equity principles (regardless of
whether such
enforcement is considered in a proceeding in equity or at law);
and, to the best
of the Depositor's knowledge, all parties to the Mortgage Note and
the Mortgage
had legal capacity to execute the Mortgage Note and the Mortgage
and each
Mortgage Note and Mortgage has been duly and properly executed by
the Mortgagor;
(e) All taxes, governmental assessments, insurance premiums,
and
water, sewer and municipal charges, which previously became due and
owing have
been paid, or an escrow of funds has been established, to the
extent permitted
by law, in an amount sufficient to pay for every such item which
remains unpaid;
and neither the Servicer nor the Depositor has advanced funds, or
received any
advance of funds by a party other than the Mortgagor, directly or
indirectly for
the payment of any amount required by the Mortgage, except for
interest accruing
from the date of the Mortgage Note or date of disbursement of the
Mortgage Loan
proceeds, whichever is later, to the day which precedes by thirty
days the first
Due Date under the related Mortgage Note;
