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<PAGE>
EXHIBIT 4.1
FREMONT MORTGAGE SECURITIES CORPORATION,
as Depositor,
FREMONT INVESTMENT & LOAN,
as Originator and Servicer,
WELLS FARGO BANK, N.A.,
as Master Servicer and Trust Administrator,
and
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2005
-------------------------------------------
FREMONT HOME LOAN TRUST 2005-A
MORTGAGE-BACKED CERTIFICATES,
SERIES 2005-A
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.01.
Definitions.................................................................................
5
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage
Loans................................................................
51
Section 2.02. Acceptance by the Trustee or Trust Administrator
of the Mortgage Loans...................... 55
Section 2.03. Representations, Warranties and Covenants of the
Originator and the Servicer................ 56
Section 2.04. Delivery of Opinion of Counsel in Connection with
Substitution; Non-Qualified Mortgages..... 59
Section 2.05. Execution and Delivery of
Certificates......................................................
60
Section 2.06. Representations and Warranties of the
Depositor............................................. 60
Section 2.07. Representations, Warranties and Covenants of the
Servicer, the Originator and the Master
Servicer....................................................................................
62
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Servicer to Service Mortgage
Loans..........................................................
66
Section 3.02. Subservicing Agreements between the Servicer and
Subservicers............................... 68
Section 3.03. Successor
Subservicers......................................................................
70
Section 3.04. Liability of the
Servicer...................................................................
70
Section 3.05. No Contractual Relationship between Subservicers
and the Trustee, Master Servicer, Trust
Administrator or
Certificateholder..........................................................
70
Section 3.06. Assumption or Termination of Subservicing
Agreements by Trustee or Trust Administrator...... 71
Section 3.07. Collection of Certain Mortgage Loan
Payments................................................ 71
Section 3.08. Subservicing
Accounts.......................................................................
72
Section 3.09. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts......................... 73
Section 3.10. Collection
Account..........................................................................
74
Section 3.11. Withdrawals from the Collection
Account..................................................... 75
Section 3.12. Investment of Funds in the Collection Account and
the Distribution Account.................. 76
Section 3.13. Maintenance of Hazard Insurance, Errors and
Omissions and Fidelity Coverage................. 78
Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption
Agreements................................... 79
Section 3.15. Realization upon Defaulted Mortgage
Loans................................................... 80
Section 3.16. Release of Mortgage
Files...................................................................
82
Section 3.17. Title, Conservation and Disposition of REO
Property......................................... 83
Section 3.18. Notification of
Adjustments.................................................................
84
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Section 3.19. Access to Certain Documentation and Information
Regarding the Mortgage Loans................ 85
Section 3.20. Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee....... 85
Section 3.21. Servicing
Compensation......................................................................
85
Section 3.22. Annual Statement as to
Compliance...........................................................
86
Section 3.23. Annual Independent Public Accountants' Servicing
Statement; Financial Statements............ 86
Section 3.24. Master Servicer to Act as
Servicer..........................................................
87
Section 3.25. Compensating
Interest.......................................................................
87
Section 3.26. Credit Reporting; Gramm-Leach-Bliley
Act.................................................... 88
Section 3.27. Net WAC Rate Carryover Reserve Account;
Distribution Account................................ 88
Section 3.28. Optional Purchase of Delinquent Mortgage
Loans.............................................. 89
Section 3.29. REMIC-Related
Covenants.....................................................................
89
Section 3A.01 Master
Servicer.............................................................................
90
Section 3A.02 REMIC-Related
Covenants.....................................................................
91
Section 3A.03 Monitoring of
Servicer......................................................................
91
Section 3A.04 Fidelity
Bond...............................................................................
92
Section 3A.05 Power to Act;
Procedures....................................................................
92
Section 3A.06 Due-on-Sale Clauses; Assumption
Agreements.................................................. 93
Section 3A.07 Documents, Records and Funds in Possession of
Master Servicer To Be Held for Trustee........ 93
Section 3A.08
[RESERVED]..................................................................................
93
Section 3A.09 Compensation for the Master
Servicer........................................................
94
Section 3A.10 Annual Officer's Certificate as to
Compliance............................................... 94
Section 3A.11 Annual Independent Accountant's Servicing
Report............................................ 94
Section 3A.12 Obligation of the Master Servicer in Respect of
Prepayment Interest Shortfalls.............. 95
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
Section 4.01.
Advances....................................................................................
95
Section 4.02. Priorities of
Distribution..................................................................
96
Section 4.03. Monthly Statements to
Certificateholders....................................................
106
Section 4.04. Certain Matters Relating to the Determination of
LIBOR...................................... 110
Section 4.05. Allocation of Realized Loss
Amounts.........................................................
111
Section 4.06. Compliance with Withholding
Requirements....................................................
111
Section 4.07. Commission
Reporting........................................................................
111
Section 4.08. REMIC Distributions and Allocation of
Losses................................................ 113
ARTICLE V
THE CERTIFICATES
Section 5.01. The
Certificates............................................................................
115
Section 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates................. 116
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates........................................... 121
Section 5.04. Persons Deemed
Owners.......................................................................
122
</TABLE>
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Section 5.05. Access to List of Certificateholders' Names and
Addresses................................... 122
Section 5.06. Maintenance of Office or
Agency.............................................................
122
ARTICLE VI
THE DEPOSITOR, THE ORIGINATOR, THE MASTER SERVICER AND THE
SERVICER
Section 6.01. Respective Liabilities of the Depositor, the
Originator, the Master Servicer and the
Servicer....................................................................................
122
Section 6.02. Merger or Consolidation of the Depositor, the
Originator, the Master Servicer or the
Servicer....................................................................................
123
Section 6.03. Limitation on Liability of the Depositor, the
Originator, the Master Servicer, the Trust
Administrator, the Servicer and
Others......................................................
123
Section 6.04. Limitation on Resignation of the
Servicer................................................... 124
Section 6.05. Additional Indemnification by the Servicer; Third
Party Claims.............................. 124
Section 6.06. Rights of the Depositor, the Master Servicer, the
Trust Administrator and the Trustee in
Respect of the
Servicer.....................................................................
125
Section 6.07. Limitation on Resignation of the Master
Servicer............................................ 126
Section 6.08. Assignment of Master
Servicing..............................................................
126
ARTICLE VII
DEFAULT
Section 7.01. Events of
Default...........................................................................
126
Section 7.02. Master Servicer to Act; Appointment of
Successor............................................ 132
Section 7.03. Notification to
Certificateholders..........................................................
133
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE TRUST ADMINISTRATOR
Section 8.01. Duties of the
Trustee.......................................................................
134
Section 8.02. Certain Matters Affecting the Trustee and the
Trust Administrator........................... 135
Section 8.03. Neither the Trustee Nor the Trust Administrator
Liable for Certificates or Mortgage Loans... 137
Section 8.04. Trustee and Trust Administrator May Own
Certificates........................................ 137
Section 8.05. Fees and Expenses of the Trustee and Trust
Administrator.................................... 137
Section 8.06. Eligibility Requirements for the Trustee and Trust
Administrator............................ 139
Section 8.07. Resignation and Removal of the Trustee or Trust
Administrator............................... 139
Section 8.08. Successor Trustee or Trust
Administrator....................................................
140
Section 8.09. Merger or Consolidation of the Trustee or the
Trust Administrator........................... 141
Section 8.10. Appointment of Co-Trustee or Separate
Trustee............................................... 141
Section 8.11. Representations and Warranties of the Trustee and
Trust Administrator....................... 142
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Purchase of the
Mortgage Loans.............................. 144
</TABLE>
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Section 9.02. Final Distribution on the
Certificates......................................................
144
Section 9.03. Additional Termination
Requirements.........................................................
145
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01.
Amendment...................................................................................
146
Section 10.02. Recordation of Agreement;
Counterparts......................................................
148
Section 10.03. Governing
Law...............................................................................
148
Section 10.04. Intention of
Parties........................................................................
148
Section 10.05.
Notices.....................................................................................
149
Section 10.06. Severability of
Provisions..................................................................
150
Section 10.07. Assignment; Sales; Advance
Facilities.......................................................
150
Section 10.08. Limitation on Rights of
Certificateholders..................................................
152
Section 10.09. Inspection and Audit
Rights.................................................................
152
Section 10.10. Certificates Nonassessable and Fully
Paid................................................... 153
Section 10.11. Waiver of Jury
Trial........................................................................
153
ARTICLE XI
REMIC PROVISIONS
Section 11.01. REMIC
Administration........................................................................
153
Section 11.02. Prohibited Transactions and
Activities......................................................
157
Section 11.03.
Indemnification.............................................................................
157
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Reserved
Schedule III Reserved
Schedule IV Representations and Warranties of Fremont Investment
& Loan as to the Mortgage Loans
EXHIBITS
Exhibit A Form of Class A and Class M Certificates
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class C Certificate
Exhibit E Form of Initial Certification of Trust
Administrator
Exhibit F Form of Document Certification and Exception Report of
Trust Administrator
Exhibit G Form of Residual Transfer Affidavit and Agreement
</TABLE>
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Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Power of Attorney
Exhibit M Form of Trust Administrator Certification
Exhibit N Form of Servicer Certification
Exhibit O Purchase Agreement
Exhibit P Standard & Poor's LEVELS(R) Glossary
Exhibit Q Form of Calculation of Realized Loss
</TABLE>
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<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of February 1,
2005, among
Fremont Mortgage Securities Corporation, as depositor (the
"Depositor"), FREMONT
INVESTMENT & LOAN, as originator and servicer (the
"Originator" and the
"Servicer", as applicable; and together "Fremont"), and Wells
Fargo Bank, N.A.,
as master servicer and trust administrator (the "Master
Servicer" and "Trust
Administrator" in such capacities, respectively), and HSBC BANK
USA, NATIONAL
ASSOCIATION, as trustee (the "Trustee"),
WITNESSETH:
In consideration of the mutual agreements herein contained, the
parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Issuer 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
eighteen Classes of
Certificates, designated as (i) the Class 1-A-1 and Class 1-A-2
Certificates,
(ii) the Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates,
(iii) the Class
M1, Class M2, Class M3, Class M4, Class M5, Class M6, Class M7,
Class M8, Class
M9 and Class M10 Certificates, (iv) the Class C Certificates,
(v) the Class P
Certificates and (vi) the Class R Certificate. The descriptions
of REMIC I and
REMIC II that follow are part of the Preliminary Statement. Any
inconsistencies
or ambiguities in this Agreement or in the administration of
this Agreement
shall be resolved in a manner that preserves the validity of
such REMIC
elections described below.
REMIC I
As provided herein, the Trust Administrator will make an
election to treat
the assets of the Trust Fund, other than the Certificate Cap
Agreement, the Net
WAC Rate Carryover Reserve Account and any Net WAC Rate
Carryover Amounts as a
real estate mortgage investment conduit (a "REMIC") for federal
income tax
purposes, and such segregated pool of assets will be designated
as "REMIC I."
The Class R-I Interest will represent the sole class of
"residual interests" in
REMIC I for purposes of the REMIC Provisions under federal
income tax law.
Interest on all Classes of REMIC I Regular Interests will be
calculated on the
basis of a 360-day year consisting of twelve 30-day months.
The following table irrevocably sets forth the designation,
the
Uncertificated REMIC I Pass-Through Rate, the initial
Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury
Regulations Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC I
Interests.
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UNCERTIFICATED REMIC INITIAL UNCERTIFICATED LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE
(1)
<S> <C> <C> <C>
LTAA Variable(2) $1,185,652,325.25 January 2035
LT1A1 Variable(2) $ 3,482,400.00 January 2035
LT1A2 Variable(2) $ 870,600.00 January 2035
LT2A1 Variable(2) $ 1,984,000.00 January 2035
LT2A2 Variable(2) $ 2,679,000.00 January 2035
LT2A3 Variable(2) $ 293,790.00 January 2035
LTM1 Variable(2) $ 556,530.00 January 2035
LTm2 Variable(2) $ 556,530.00 January 2035
LTM3 Variable(2) $ 260,120.00 January 2035
LTM4 Variable(2) $ 211,720.00 January 2035
LTM5 Variable(2) $ 199,630.00 January 2035
LTM6 Variable(2) $ 181,480.00 January 2035
LTM7 Variable(2) $ 181,480.00 January 2035
LTM8 Variable(2) $ 145,180.00 January 2035
LTM9 Variable(2) $ 157,280.00 January 2035
LTM10 Variable(2) $ 120,980.00 January 2035
LTZZ Variable(2) $ 12,316,266.23 January 2035
LTP Variable(2) $ 100 January 2035
</TABLE>
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(1) Solely for purposes of Treasury Regulations Section
1.860G-1(a)(4)(iii),
the Distribution Date in the month following the maturity date
for the
Mortgage Loan with the latest maturity date has been designated
as the
"latest possible maturity date" for each REMIC I Regular
Interest.
(2) Calculated in accordance with the definition of
"Uncertificated REMIC I
Pass-Through Rate" herein.
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REMIC II
As provided herein, the Trust Administrator shall make an
election to
treat the segregated pool of assets consisting of the REMIC I
Regular Interests
as a REMIC for federal income tax purposes, and such segregated
pool of assets
will be designated as "REMIC II." The Class R-II Interest
represents the sole
class of "residual interests" in REMIC II for purposes of the
REMIC Provisions.
Interest on all Regular Certificates will be calculated on the
basis of the
actual number of days in the related Interest Accrual Period and
a 360-day year.
The following table sets forth (or describes) the Class
designation,
Certificate Interest Rate and original Class Certificate Balance
for each Class
of Certificates comprising the interests in the Trust Fund
created hereunder:
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<CAPTION>
ORIGINAL CLASS CERTIFICATE ASSUMED FINAL
CLASS CERTIFICATE BALANCE INTEREST RATE MATURITY DATES (1)
----- ------------------- ------------- ------------------
<S> <C> <C> <C>
1-A-1 $ 348,240,000 (2) January 2035
1-A-2 87,060,000 (2) January 2035
2-A-1 198,400,000 (2) January 2035
2-A-2 267,900,000 (2) January 2035
2-A-3 29,379,000 (2) January 2035
M1 55,653,000 (2) January 2035
M2 55,653,000 (2) January 2035
M3 26,012,000 (2) January 2035
M4 21,172,000 (2) January 2035
M5 19,963,000 (2) January 2035
M6 18,148,000 (2) January 2035
M7 18,148,000 (2) January 2035
M8 14,518,000 (2) January 2035
M9 15,728,000 (2) January 2035
M10 12,098,000 (2) January 2035
C (3) (3) January 2035
P $ 100 (4) January 2035
R N/A N/A January 2035
</TABLE>
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(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, 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 Certificates,
each of
which represents one or more of the "regular interests" in REMIC
II.
(2) Calculated in accordance with the definition of
"Pass-Through Rate"
herein.
(3) The Class C Certificate will accrue interest at the Class C
Pass-Through
Rate on the Notional Amount of the Class C Certificates
outstanding from
time to time which shall equal the aggregate of the
Uncertificated
Principal Balances of the REMIC I Uncertificated Regular
Interests. The
Class C Certificate will have an initial Certificate Balance
equal to the
Initial Overcollateralization Amount. The Class C Certificate
will not
accrue interest on its Certificate Balance.
(4) The Class P Certificates do not bear interest. The Class P
Certificates
represent the right to receive payments in respect of Prepayment
Premiums.
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The minimum denomination for each Class of the Offered
Certificates will
be $25,000, with integral multiples of $1 in excess thereof
except that one
Certificate in each Class may be issued in a different amount.
The minimum
denomination for (a) each of the Class M10 Certificates will be
$100,000, with
integral multiples of $1 in excess thereof except that one
Certificate in each
Class may be issued in a different amount, (b) each of the Class
P and Class R
Certificates will be a 100% Percentage Interest in such Class
and (c) the Class
C Certificates will be a 10% Percentage Interest in such
Class.
Set forth below are designations of Classes of Certificates to
the
categories used herein:
<TABLE>
<S> <C>
Book-Entry Certificates........................ All Classes of
Certificates other than the Physical
Certificates.
ERISA-Restricted Certificates.................. Class R
Certificates, Class P Certificates, Class C
Certificates and Class M10 Certificates; and any other
certificate with a rating below the lowest applicable
permitted rating under the Underwriters' Exemption.
LIBOR Certificates............................. The Senior
Certificates and the Subordinated
Certificates.
Non-Delay Certificates......................... The Offered
Certificates, the Class M10 and the Class C
Certificates.
Offered Certificates........................... All Classes of
Certificates other than the Private
Certificates.
Physical Certificates.......................... Class C, Class P
and Class R Certificates.
Private Certificates........................... Class M10, Class
C, Class P and Class R Certificates.
Rating Agencies................................ Moody's and
Standard & Poor's.
Regular Certificates........................... All Classes of
Certificates other than the Class R
Certificates (exclusive of the right to any Net WAC
Rate Carryover Amounts) each of which represents a
regular interest in REMIC II for purposes of the REMIC
Provisions.
Residual Certificates.......................... Class R
Certificates.
Senior Certificates............................ Class 1-A-1,
Class 1-A-2, Class 2-A-1, Class 2-A-2 and
Class 2-A-3 Certificates.
Subordinated Certificates...................... Class M1, Class
M2, Class M3, Class M4, Class M5, Class M6,
Class M7, Class M8, Class M9 and Class M10 Certificates.
</TABLE>
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ARTICLE I
DEFINITIONS
Section 1.01.Definitions.
Whenever used in this Agreement, the following words and
phrases, unless
the context otherwise requires, shall have the following
meanings:
Accepted Master Servicing Practices: With respect to any
Mortgage Loan, as
applicable, (1) either (x) those mortgage master servicing
practices of prudent
mortgage lending institutions which master service mortgage
loans of the same
type and quality as such Mortgage Loan in the jurisdiction where
the related
Mortgaged Property is located to the extent applicable to the
Master Servicer
(except in its capacity as successor to the Servicer), or (y) as
provided in
Section 3A.01 hereof, but in no event below the standard set
forth in clause (x)
and (2) in accordance with applicable local, state and federal
laws, rules and
regulations.
Accepted Servicing Practices: With respect to any Mortgage Loan,
as
applicable, (1) either (x) those mortgage servicing practices of
prudent
mortgage lending institutions which service mortgage loans of
the same type and
quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged
Property is located to the extent applicable to the Servicer, or
(y) as provided
in Section 3.01 hereof, but in no event below the standard set
forth in clause
(x) and (2) in accordance with applicable local, state and
federal laws, rules
and regulations.
Account: Any of the Collection Account, the Distribution
Account, any
Escrow Account or the Net WAC Rate Carryover Reserve Account.
Each Account shall
be an Eligible Account.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased
pursuant to the Purchase Agreement.
Adjusted Net Maximum Mortgage Interest Rate: As to each Mortgage
Loan and
at any time, the per annum rate equal to the Maximum Mortgage
Interest Rate less
the Expense Fee Rate.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan
and at any
time, the per annum rate equal to the Mortgage Interest Rate
less the Expense
Fee Rate.
Adjustment Date: As to any Mortgage Loan, the first Due Date on
which the
related Mortgage Interest Rate adjusts as set forth in the
related Mortgage Note
and each Due Date thereafter on which the Mortgage Interest Rate
adjusts as set
forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section
10.07.
Advancing Person: The Person to whom the Servicer's rights under
this
Agreement to be reimbursed for any P&I Advances or Servicing
Advances have been
assigned pursuant to Section 10.07.
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Adverse REMIC Event: As defined in Section 11.01(f) hereof.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with such first Person.
For the purposes
of this definition, "control" means the power to direct the
management and
policies of such Person, directly or indirectly, whether through
the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments or
supplements hereto.
Applied Class 2-A Realized Loss Amount: With respect to any
Distribution
Date on or after the date on which the Certificate Balances of
the Subordinated
Certificates have been reduced to zero, the amount, if any, by
which the
aggregate Class Certificate Balance of the Class 2-A
Certificates after
distributions of principal on such Distribution Date exceeds the
aggregate
Stated Principal Balance of the Group 2 Mortgage Loans for such
Distribution
Date.
Applied Realized Loss Amount: With respect to any Distribution
Date, the
amount, if any, by which the aggregate Class Certificate Balance
of the LIBOR
Certificates after distributions of principal on such
Distribution Date exceeds
the aggregate Stated Principal Balance of the Mortgage Loans for
such
Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the value of
the
related Mortgaged Property based upon the appraisal made for the
originator at
the time of origination of such Mortgage Loan or the sales price
of such
Mortgaged Property at such time of origination, whichever is
less; provided,
however, that in the case of a refinanced Mortgage Loan, such
value is based
solely upon the appraisal made at the time of origination of
such refinanced
Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer
or equivalent instrument in recordable form (other than the
assignee's name and
recording information not yet returned from the recording
office), reflecting
the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage
Loans to the extent received by the Trust Administrator (x) the
sum of (i) all
scheduled installments of interest (net of the related Expense
Fees) and
principal due on the Due Date on such Mortgage Loans in the
related Due Period
and received on or prior to the related Determination Date,
together with any
P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance
Proceeds and Liquidation Proceeds during the related Prepayment
Period (in each
case, net of unreimbursed expenses incurred in connection with a
liquidation or
foreclosure and unreimbursed Advances, if any); (iii) all
partial or full
prepayments on the Mortgage Loans received during the related
Prepayment Period
together with all Compensating Interest thereon and any amounts
paid by the
Servicer or Master Servicer in respect of Prepayment Interest
Shortfalls for
such Distribution Date pursuant to Sections 3.25 and 3A.12,
respectively
(excluding in each case Prepayment Premiums and any Prepayment
Interest Excess);
(iv) any Subsequent Recoveries, and (v) amounts received with
respect to such
Distribution Date as the Substitution Adjustment
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Amount or purchase price in respect of a Deleted Mortgage Loan
or a Mortgage
Loan repurchased by the Originator or the Depositor as of such
Distribution
Date; reduced by (y) amounts in reimbursement for P&I
Advances and Servicing
Advances previously made with respect to the Mortgage Loans and
other amounts to
which the Servicer, the Master Servicer, the Depositor, the
Trust Administrator
or the Trustee (or co-trustee) are entitled to be paid or
reimbursed pursuant to
this Agreement.
Base Rate: For any Distribution Date and any Class of LIBOR
Certificates,
the sum of (i) one-month LIBOR plus (ii) the related
Pass-Through Margin.
Best's: Best's Key Rating Guide, as the same shall be amended
from time to
time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii)
a day on
which banking and savings and loan institutions, in (a) the
states of New York,
Maryland, Minnesota and California, (b) the state in which the
Servicer's
servicing operations are located, or (c) the state in which the
Trustee's
operations are located, are authorized or obligated by law or
executive order to
be closed.
Certificate: Any one of the Certificates executed by the
Trust
Administrator in substantially the forms attached hereto as
exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than
the Class C or Class R Certificates, at any date, the maximum
dollar amount of
principal to which the Holder thereof is then entitled
hereunder, such amount
being equal to the Denomination thereof minus all distributions
of principal
previously made with respect thereto and in the case of the
Subordinated
Certificates, reduced by any Applied Realized Loss Amounts
applicable to such
Class or in the case of any Class 2-A Certificates, reduced by
any Applied Class
2-A Realized Loss Amounts; provided, however, that the
Certificate Balances of
the Subordinated Certificates then outstanding will be increased
in direct order
of seniority by the amount of any Subsequent Recoveries
distributed to any Class
senior to such Class. With respect to the Class C Certificate
and any
Distribution Date, the excess, if any, of the then aggregate
Uncertificated
Principal Balances of the REMIC I Regular Interests over the
aggregate
Certificate Balance of the LIBOR Certificates and the Class P
Certificate then
outstanding. The Class R Certificates will not have a
Certificate Balance.
Certificate Cap Agreement: The cap agreement, dated as of
February 22,
2005, between the Trustee, on behalf of the Issuer, and the
Counterparty, having
an initial notional amount of $1,191,730,431.23.
Certificate Cap Agreement Payments: The payments made under
the
Certificate Cap Agreement.
Certificate Interest Rate: With respect to each Distribution
Date during
the Interest Accrual Period and each Class of LIBOR Certificates
and the Class C
Certificates, the related Pass-Through Rate.
Fremont 2005-A
Pooling & Servicing Agreement
7
<PAGE>
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificate Registrar: The registrar appointed pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a
Certificate is
registered in the Certificate Register, except that, solely for
the purpose of
giving any consent pursuant to this Agreement, any Certificate
registered in the
name of the Depositor, the Master Servicer or the Servicer or
any affiliate
thereof shall be deemed not to be Outstanding and the Percentage
Interest
evidenced thereby shall not be taken into account in determining
whether the
requisite amount of Percentage Interests necessary to effect
such consent has
been obtained; provided, however, that if any such Person
(including the
Depositor) owns 100% of the Percentage Interests evidenced by a
Class of
Certificates, such Certificates shall be deemed to be
Outstanding for purposes
of any provision hereof that requires the consent of the Holders
of Certificates
of a particular Class as a condition to the taking of any action
hereunder. The
Trustee and the Trust Administrator are entitled to rely
conclusively on a
certification of the Depositor or any affiliate of the Depositor
in determining
which Certificates are registered in the name of an affiliate of
the Depositor.
Class: All Certificates bearing the same Class designation as
set forth in
the Preliminary Statement.
Class A Certificates: Any of the Class 1-A Certificates and the
Class 2-A
Certificates, as applicable.
Class 1-A Certificates: Any of the Class 1-A-1 Certificates and
the Class
1-A-2 Certificates, as applicable.
Class 1-A-1 Certificates: All Certificates bearing the Class
designation
of "Class 1-A-1 Certificates" representing the right to
distributions as set
forth herein and therein and representing a regular interest in
REMIC II.
Class 1-A-2 Certificates: All Certificates bearing the Class
designation
of "Class 1-A-2 Certificates" representing the right to
distributions as set
forth herein and therein and representing a regular interest in
REMIC II.
Class 2-A Certificates: Any of the Class 2-A-1 Certificates,
Class 2-A-2
Certificates and the Class 2-A-3 Certificates, as
applicable.
Class 2-A-1 Certificates: All Certificates bearing the Class
designation
of "Class 2-A-1 Certificates" representing the right to
distributions as set
forth herein and therein and representing a regular interest in
REMIC II.
Class 2-A-2 Certificates: All Certificates bearing the Class
designation
of "Class 2-A-2 Certificates" representing the right to
distributions as set
forth herein and therein and representing a regular interest in
REMIC II.
Fremont 2005-A
Pooling & Servicing Agreement
8
<PAGE>
Class 2-A-3 Certificates: All Certificates bearing the Class
designation
of "Class 2-A-3 Certificates" representing the right to
distributions as set
forth herein and therein and representing a regular interest in
REMIC II.
Class C Certificates: All Certificates bearing the Class
designation of
"Class C Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class Certificate Balance: With respect to any Class and as to
any date of
determination, the aggregate of the Certificate Balances of all
Certificates of
such Class as of such date.
Class C Distributable Amount: On any Distribution Date, the sum
of (i) the
interest accrued on such Class C Certificate at its Pass-Through
Rate calculated
on its Notional Amount less the amount (without duplication) of
any Net WAC Rate
Carryover Payments paid pursuant to Section 4.02(a)(iii) and
less the amount
applied as an Extra Principal Distribution Amount on such
Distribution Date,
(ii) any amount of the Certificate Balance of the Class C
Certificate that is
distributable as an Overcollateralization Release Amount and
(iii) the aggregate
of amounts remaining in the Net WAC Rate Carryover Reserve
Accounts after the
distributions in Sections 4.02(a)(iii)(N) and (O).
Class M1 Certificates: All Certificates bearing the Class
designation of
"Class M1 Certificates" representing the right to distributions
as set forth
herein and therein and representing an interest in REMIC II.
Class M1 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of the Senior
Principal Distribution Amount on such Distribution Date) and
(ii) the aggregate
Certificate Balance of the Class M1 Certificates immediately
prior to such
Distribution Date over (y) the lesser of (A) the product of (i)
63.10 % and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day
of the related Due Period (after giving effect to scheduled
payments of
principal due during the related Due Period, to the extent
received or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect
to scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus $6,049,247.06.
Class M2 Certificates: All Certificates bearing the Class
designation of
"Class M2 Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class M2 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of Senior
Principal Distribution Amount on such Distribution Date), (ii)
the aggregate
Certificate Balance of the Class M1 Certificates (after taking
into account the
distribution of the Class M1 Principal Distribution Amount on
such Distribution
Fremont 2005-A
Pooling & Servicing Agreement
9
<PAGE>
Date) and (iii) the aggregate Certificate Balance of the Class
M2 Certificates
immediately prior to such Distribution Date over (y) the lesser
of (A) the
product of (i) 72.30% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period
(after giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period) and (B) the aggregate
Stated Principal
Balance of the Mortgage Loans as of the last day of the related
Due Period
(after giving effect to scheduled payments of principal due
during the related
Due Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) minus
$6,049,247.06.
Class M3 Certificates: All Certificates bearing the Class
designation of
"Class M3 Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class M3 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of the Senior
Principal Distribution Amount on such Distribution Date), (ii)
the aggregate
Certificate Balance of the Class M1 Certificates (after taking
into account the
distribution of the Class M1 Principal Distribution Amount on
such Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date) and (iv) the
Certificate Balance
of the Class M3 Certificates immediately prior to such
Distribution Date over
(y) the lesser of (A) the product of (i) 76.60% and (ii) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due
Period (after giving effect to scheduled payments of principal
due during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day
of the related Due Period (after giving effect to scheduled
payments of
principal due during the related Due Period, to the extent
received or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) minus $6,049,247.06.
Class M4 Certificates: All Certificates bearing the Class
designation of
"Class M4 Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class M4 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of the Senior
Principal Distribution Amount on such Distribution Date), (ii)
the aggregate
Certificate Balance of the Class M1 Certificates (after taking
into account the
distribution of the Class M1 Principal Distribution Amount on
such Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the
aggregate Certificate
Balance of the Class M3 Certificates (after taking into account
the distribution
of the Class M3 Principal Distribution Amount on such
Distribution Date) and (v)
the aggregate Certificate Balance of the Class M4 Certificates
immediately prior
to such Distribution Date over (y) the lesser of (A) the product
of (i) 80.10%
and (ii) the aggregate Stated Principal Balance of the Mortgage
Loans as of the
last day of the
Fremont 2005-A
Pooling & Servicing Agreement
10
<PAGE>
related Due Period (after giving effect to scheduled payments of
principal due
during the related Due Period, to the extent received or
advanced, and
unscheduled collections of principal received during the related
Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect
to scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus $6,049,247.06.
Class M5 Certificates: All Certificates bearing the Class
designation of
"Class M5 Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class M5 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of the Senior
Principal Distribution Amount on such Distribution Date), (ii)
the aggregate
Certificate Balance of the Class M1 Certificates (after taking
into account the
distribution of the Class M1 Principal Distribution Amount on
such Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the
aggregate Certificate
Balance of the Class M3 Certificates (after taking into account
the distribution
of the Class M3 Principal Distribution Amount on such
Distribution Date), (v)
the aggregate Certificate Balance of the Class M4 Certificates
(after taking
into account the distribution of the Class M4 Principal
Distribution Amount on
such Distribution Date) and (vi) the aggregate Certificate
Balance of the Class
M5 Certificates immediately prior to such Distribution Date over
(y) the lesser
of (A) the product of (i) 83.40% and (ii) the aggregate Stated
Principal Balance
of the Mortgage Loans as of the last day of the related Due
Period (after giving
effect to scheduled payments of principal due during the related
Due Period, to
the extent received or advanced, and unscheduled collections of
principal
received during the related Prepayment Period) and (B) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of
the related Due
Period (after giving effect to scheduled payments of principal
due during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) minus
$6,049,247.06.
Class M6 Certificates: All Certificates bearing the Class
designation of
"Class M6 Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class M6 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of the Senior
Principal Distribution Amount on such Distribution Date), (ii)
the aggregate
Certificate Balance of the Class M1 Certificates (after taking
into account the
distribution of the Class M1 Principal Distribution Amount on
such Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the
aggregate Certificate
Balance of the Class M3 Certificates (after taking into account
the distribution
of the Class M3 Principal Distribution Amount on such
Fremont 2005-A
Pooling & Servicing Agreement
11
<PAGE>
Distribution Date), (v) the aggregate Certificate Balance of the
Class M4
Certificates (after taking into account the distribution of the
Class M4
Principal Distribution Amount on such Distribution Date), (vi)
the aggregate
Certificate Balance of the Class M5 Certificates (after taking
into account the
distribution of the Class M5 Principal Distribution Amount on
such Distribution
Date) and (vii) the aggregate Certificate Balance of the Class
M6 Certificates
immediately prior to such Distribution Date over (y) the lesser
of (A) the
product of (i) 86.40% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period
(after giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period) and (B) the aggregate
Stated Principal
Balance of the Mortgage Loans as of the last day of the related
Due Period
(after giving effect to scheduled payments of principal due
during the related
Due Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) minus
$6,049,247.06.
Class M7 Certificates: All Certificates bearing the Class
designation of
"Class M7 Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class M7 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of the Senior
Principal Distribution Amount on such Distribution Date), (ii)
the aggregate
Certificate Balance of the Class M1 Certificates (after taking
into account the
distribution of the Class M1 Principal Distribution Amount on
such Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the
aggregate Certificate
Balance of the Class M3 Certificates (after taking into account
the distribution
of the Class M3 Principal Distribution Amount on such
Distribution Date), (v)
the aggregate Certificate Balance of the Class M4 Certificates
(after taking
into account the distribution of the Class M4 Principal
Distribution Amount on
such Distribution Date), (vi) the aggregate Certificate Balance
of the Class M5
Certificates (after taking into account the distribution of the
Class M5
Principal Distribution Amount on such Distribution Date), (vii)
the aggregate
Certificate Balance of the Class M6 Certificates (after taking
into account the
distribution of the Class M6 Principal Distribution Amount on
such Distribution
Date) and (viii) the aggregate Certificate Balance of the Class
M7 Certificates
immediately prior to such Distribution Date over (y) the lesser
of (A) the
product of (i) 89.40% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period
(after giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period) and (B) the aggregate
Stated Principal
Balance of the Mortgage Loans as of the last day of the related
Due Period
(after giving effect to scheduled payments of principal due
during the related
Due Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) minus
$6,049,247.06.
Fremont 2005-A
Pooling & Servicing Agreement
12
<PAGE>
Class M8 Certificates: All Certificates bearing the Class
designation of
"Class M8 Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class M8 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of the Senior
Principal Distribution Amount on such Distribution Date), (ii)
the aggregate
Certificate Balance of the Class M1 Certificates (after taking
into account the
distribution of the Class M1 Principal Distribution Amount on
such Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the
aggregate Certificate
Balance of the Class M3 Certificates (after taking into account
the distribution
of the Class M3 Principal Distribution Amount on such
Distribution Date), (v)
the aggregate Certificate Balance of the Class M4 Certificates
(after taking
into account the distribution of the Class M4 Principal
Distribution Amount on
such Distribution Date), (vi) the aggregate Certificate Balance
of the Class M5
Certificates (after taking into account the distribution of the
Class M5
Principal Distribution Amount on such Distribution Date), (vii)
the aggregate
Certificate Balance of the Class M6 Certificates (after taking
into account the
distribution of the Class M6 Principal Distribution Amount on
such Distribution
Date), (viii) the aggregate Certificate Balance of the Class M7
Certificates
(after taking into account the distribution of the Class M7
Principal
Distribution Amount on such Distribution Date) and (ix) the
aggregate
Certificate Balance of the Class M8 Certificates immediately
prior to such
Distribution Date over (y) the lesser of (A) the product of (i)
91.80% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day
of the related Due Period (after giving effect to scheduled
payments of
principal due during the related Due Period, to the extent
received or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect
to scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus $6,049,247.06.
Class M9 Certificates: All Certificates bearing the Class
designation of
"Class M9 Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class M9 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of the Senior
Principal Distribution Amount on such Distribution Date), (ii)
the aggregate
Certificate Balance of the Class M1 Certificates (after taking
into account the
distribution of the Class M1 Principal Distribution Amount on
such Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the
aggregate Certificate
Balance of the Class M3 Certificates (after taking into account
the distribution
of the Class M3 Principal Distribution Amount on such
Distribution Date), (v)
the aggregate Certificate Balance of the Class M4 Certificates
(after taking
into account the distribution of the Class M4 Principal
Distribution Amount on
such
Fremont 2005-A
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13
<PAGE>
Distribution Date), (vi) the aggregate Certificate Balance of
the Class M5
Certificates (after taking into account the distribution of the
Class M5
Principal Distribution Amount on such Distribution Date), (vii)
the aggregate
Certificate Balance of the Class M6 Certificates (after taking
into account the
distribution of the Class M6 Principal Distribution Amount on
such Distribution
Date), (viii) the aggregate Certificate Balance of the Class M7
Certificates
(after taking into account the distribution of the Class M7
Principal
Distribution Amount on such Distribution Date), (ix) the
aggregate Certificate
Balance of the Class M8 Certificates (after taking into account
the distribution
of the Class M8 Principal Distribution Amount on such
Distribution Date) and (x)
the aggregate Certificate Balance of the Class M9 Certificates
immediately prior
to such Distribution Date over (y) the lesser of (A) the product
of (i) 94.40%
and (ii) the aggregate Stated Principal Balance of the Mortgage
Loans as of the
last day of the related Due Period (after giving effect to
scheduled payments of
principal due during the related Due Period, to the extent
received or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect
to scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus $6,049,247.06.
Class M10 Certificates: All Certificates bearing the Class
designation of
"Class M10 Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class M10 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution
of the Senior
Principal Distribution Amount on such Distribution Date), (ii)
the aggregate
Certificate Balance of the Class M1 Certificates (after taking
into account the
distribution of the Class M1 Principal Distribution Amount on
such Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the
aggregate Certificate
Balance of the Class M3 Certificates (after taking into account
the distribution
of the Class M3 Principal Distribution Amount on such
Distribution Date), (v)
the aggregate Certificate Balance of the Class M4 Certificates
(after taking
into account the distribution of the Class M4 Principal
Distribution Amount on
such Distribution Date), (vi) the aggregate Certificate Balance
of the Class M5
Certificates (after taking into account the distribution of the
Class M5
Principal Distribution Amount on such Distribution Date), (vii)
the aggregate
Certificate Balance of the Class M6 Certificates (after taking
into account the
distribution of the Class M6 Principal Distribution Amount on
such Distribution
Date), (viii) the aggregate Certificate Balance of the Class M7
Certificates
(after taking into account the distribution of the Class M7
Principal
Distribution Amount on such Distribution Date), (ix) the
aggregate Certificate
Balance of the Class M8 Certificates (after taking into account
the distribution
of the Class M8 Principal Distribution Amount on such
Distribution Date), (x)
the aggregate Certificate Balance of the Class M9 Certificates
(after taking
into account the distribution of the Class M9 Principal
Distribution Amount on
such Distribution Date) and (x) the aggregate Certificate
Balance of the Class
M10 Certificates immediately prior to such Distribution Date
over (y) the lesser
of (A) the product of (i) 96.40% and (ii) the aggregate Stated
Principal Balance
of the Mortgage Loans as of the last day of the
Fremont 2005-A
Pooling & Servicing Agreement
14
<PAGE>
related Due Period (after giving effect to scheduled payments of
principal due
during the related Due Period, to the extent received or
advanced, and
unscheduled collections of principal received during the related
Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect
to scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus $6,049,247.06.
Class P Certificates: All Certificates bearing the Class
designation of
"Class P Certificates" representing the right to distributions
as set forth
herein and therein and representing a regular interest in REMIC
II.
Class R Certificates: All Certificates bearing the Class
designation of
"Class R Certificates" and evidencing the ownership of the
"residual interest"
in each of REMIC I and REMIC II for purposes of the REMIC
Provisions. The Class
R Certificate represents the ownership of the Class R-I Interest
and the Class
R-II Interest.
Class R-I Interest: The residual interest in REMIC I .
Class R-II Interest: The residual interest in REMIC II.
Closing Date: On or about February 22, 2005.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: As defined in Section 3.10.
Compensating Interest: For any Distribution Date, the lesser of
(a) the
Prepayment Interest Shortfall, if any, for such Distribution
Date, with respect
to voluntary Principal Prepayments in full by the Mortgagor
(excluding any
payments made upon liquidation of the Mortgage Loan), and (b)
the amount of the
Servicing Fee payable to the Servicer for such Distribution
Date.
Condemnation Proceeds: All awards, compensation and/or
settlements in
respect of a Mortgaged Property, whether permanent or temporary,
partial or
entire, by exercise of the power of eminent domain or
condemnation.
Corporate Trust Office. The designated office of the Trustee or
the Trust
Administrator, as the case may be, at which at any particular
time its corporate
trust business with respect to this Agreement is administered,
which office at
the date of the execution of this Agreement is located at (i)
with respect to
the Trustee, HSBC Bank USA, National Association, 452 Fifth
Avenue, New York,
New York 10018, or at such other address as the Trustee may
designate from time
to time by notice to the Certificateholders, the Depositor, the
Servicer, the
Master Servicer, the Originator and the Trust Administrator, or
(ii) with
respect to the Trust Administrator, (A) for certificate transfer
purposes, Sixth
Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate
Trust Services-Fremont 2005-A and (B) for all other purposes,
9062 Old Annapolis
Road, Columbia, Maryland 21045 Attn: Client Manager-Fremont
2005-A, facsimile
Fremont 2005-A
Pooling & Servicing Agreement
15
<PAGE>
no. (410) 715-2380 and which is the address to which notices to
and
correspondence with the Trust Administrator should be
directed.
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:
<TABLE>
<CAPTION>
CORRESPONDING REMIC I CLASSES CORRESPONDING REMIC II CLASSES
----------------------------- ------------------------------
<S> <C>
LT1A1 Class 1-A-1 Certificates
LT1A2 Class 1-A-2 Certificates
LT2A1 Class 2-A-1 Certificates
LT2A2 Class 2-A-2 Certificates
LT2A3 Class 2-A-3 Certificates
LTM1 Class M1 Certificates
LTM2 Class M2 Certificates
LTM3 Class M3 Certificates
LTM4 Class M4 Certificates
LTM5 Class M5 Certificates
LTM6 Class M6 Certificates
LTM7 Class M7 Certificates
LTM8 Class M8 Certificates
LTM9 Class M9 Certificates
LTM10 Class M10 Certificates
LTP Class P Certificates
N/A Class C Certificate
</TABLE>
Counterparty: Royal Bank of Scotland PLC and its successors in
interest.
Credit Enhancement Percentage: With respect to any Distribution
Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate
Class
Certificate Balance of the
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<PAGE>
Subordinated Certificates and (ii) the Overcollateralized Amount
(in each case
after taking into account the distributions of the Principal
Distribution Amount
for such Distribution Date) by (y) the aggregate Stated
Principal Balance of the
Mortgage Loans for such Distribution Date.
Current Interest: With respect to any Distribution Date for each
Class of
the LIBOR Certificates, the amount of interest accrued during
the related
Interest Accrual Period at the applicable Pass-Through Rate on
the related Class
Certificate Balance immediately prior to such Distribution Date,
as reduced by
such Class's share of Net Prepayment Interest Shortfalls and
Relief Act Interest
Shortfalls for the related Due Period allocated to such Class
pursuant to
Section 4.02.
Custodial File: With respect to each Mortgage Loan, the file
retained by
the Trust Administrator consisting of items (a) - (h) as listed
on Exhibit K
hereto.
Cut-off Date: With respect to each Mortgage Loan (other than a
Substitute
Mortgage Loan), February 1, 2005. With respect to all Substitute
Mortgage Loans,
their respective dates of substitution. References herein to the
"Cut-off Date,"
when used with respect to more than one Mortgage Loan, shall be
to the
respective Cut-off Dates for such Mortgage Loans.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal
Balances of all Mortgage Loans as of the close of business on
the Cut-off Date
(after giving effect to payments of principal due on that
date).
Data Tape Information: The information provided by the
Originator as of
the Cut-off Date to the Depositor setting forth the following
information with
respect to each Mortgage Loan: (1) the Originator's Mortgage
Loan identifying
number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged
Property including the city, state and zip code; (4) a code
indicating whether
the Mortgaged Property is owner-occupied, a second home or
investment property;
(5) the number and type of residential units constituting the
Mortgaged Property
(i.e., a single family residence, a 2-4 family residence, a unit
in a
condominium project or a unit in a planned unit development,
manufactured
housing); (6) the original months to maturity or the remaining
months to
maturity from the Cut-off Date, in any case based on the
original amortization
schedule and, if different, the maturity expressed in the same
manner but based
on the actual amortization schedule; (7) the Loan-to-Value Ratio
at origination;
(8) the Mortgage Interest Rate as of the Cut-off Date; (9) the
date on which the
Scheduled Payment was due on the Mortgage Loan and, if such date
is not
consistent with the Due Date currently in effect, such Due Date;
(10) the stated
maturity date; (11) the amount of the Scheduled Payment as of
the Cut-off Date;
(12) the last payment date on which a Scheduled Payment was
actually applied to
pay interest and, if applicable, the outstanding principal
balance; (13) the
original principal amount of the Mortgage Loan; (14) the
principal balance of
the Mortgage Loan as of the close of business on the Cut-off
Date, after
deduction of payments of principal due and collected on or
before the Cut-off
Date; (15) with respect to Adjustable Rate Mortgage Loans, the
Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin; (17) with
respect to Adjustable Rate Mortgage Loans, the Lifetime Rate Cap
under the terms
of the Mortgage Note; (18) with respect to Adjustable Rate
Mortgage Loans, a
code indicating the type of Index; (19) with respect to
Adjustable Rate Mortgage
Loans, the Periodic Mortgage Interest Rate Cap under the terms
of the Mortgage
Note; (20) the type of Mortgage Loan (i.e., fixed rate,
adjustable
Fremont 2005-A
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<PAGE>
rate, first lien); (21) a code indicating the purpose of the
loan (i.e.,
purchase, rate and term refinance, equity take-out refinance);
(22) a code
indicating the documentation style (i.e., full documentation,
easy documentation
or stated income); (23) the loan credit classification (as
described in the
Underwriting Guidelines); (24) whether such Mortgage Loan
provides for a
Prepayment Premium; (25) the Prepayment Premium period of such
Mortgage Loan, if
applicable; (26) a description of the Prepayment Premium, if
applicable; (27)
the Mortgage Interest Rate as of origination; (28) the credit
risk score at
origination; (29) the date of origination; (30) the Mortgage
Interest Rate
adjustment period; (31)the Mortgage Interest Rate floor; (32)
the Mortgage
Interest Rate calculation method (i.e., 30/360, simple interest,
other); (33) a
code indicating whether the Mortgage Loan is a High Cost
Mortgage Loan; (34) a
code indicating whether the Mortgage Loan has been modified;
(35) the current
Loan-to-Value Ratio; (36) [Reserved]; (37) the Due Date for the
first Scheduled
Payment; (38) the original Scheduled Payment due; (39) with
respect to the
related Mortgagor, the debt-to-income ratio; (40) the Appraised
Value of the
Mortgaged Property; (41) the sales price of the Mortgaged
Property if the
Mortgage Loan was originated in connection with the purchase of
the Mortgaged
Property; (42) the MERS identification number; and (43) a code
indicating if a
Mortgage Loan is a 30-Day Delinquency. With respect to the
Mortgage Loans in the
aggregate: (1) the number of Mortgage Loans; (2) the current
aggregate
outstanding 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.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by
a court of competent jurisdiction in a proceeding under the
United States
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan
which became
final and non-appealable, except for such a reduction resulting
from a Deficient
Valuation or any reduction that results in a permanent
forgiveness of principal.
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, which
valuation results from a proceeding initiated under the United
States Bankruptcy
Code.
Definitive Certificates: Any Certificate evidenced by a
Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03(d).
Delinquency Rate: With respect to any month, the quotient
(expressed as a
percentage) of (1) the Stated Principal Balance of the 60+ Day
Delinquent
Mortgage Loans, divided by (2) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related month.
Denomination: With respect to each Certificate, the amount set
forth on
the face thereof as the "Initial Certificate Balance of this
Certificate" or the
Percentage Interest appearing on the face thereof.
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<PAGE>
Depositor: Fremont Mortgage Securities Corporation, a
Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company,
the nominee of which is CEDE & Co., as the registered Holder
of the Book-Entry
Certificates. The Depository shall at all times be a "clearing
corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of
New York.
Depository Institution: Any depository institution or trust
company,
including the Trustee, that (a) is incorporated under the laws
of the United
States of America or any State thereof, (b) is subject to
supervision and
examination by federal or state banking authorities and (c) has
outstanding
unsecured commercial paper or other short-term unsecured debt
obligations that
are rated P-1 by Moody's and A-1 by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a
Depository effects
book-entry transfers and pledges of securities deposited with
the Depository.
Determination Date: With respect to each Distribution Date, the
18th of
the calendar month in which such Distribution Date occurs or, if
such day is not
a Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained
by the Trust Administrator pursuant to Section 3.27(b) in the
name of the Trust
Administrator for the benefit of the Certificateholders and
designated "Wells
Fargo Bank, N.A. in trust for registered holders of Fremont Home
Loan Trust
2005-A Mortgage-Backed Certificates, Series 2005-A." Funds in
the Distribution
Account shall be held in trust for the Certificateholders for
the uses and
purposes set forth in this Agreement and may be invested in
Permitted
Investments.
Distribution Date: The 25th day of each calendar month after the
initial
issuance of the Certificates, or if such day is not a Business
Day, the next
succeeding Business Day, commencing in March, 2005.
Document Certification and Exception Report: The report attached
to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is
due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing
on the second day of the calendar month preceding the month in
which the
Distribution Date occurs and ending on the first day of the
calendar month in
which the Distribution Date occurs.
Eligible Account: Either (i) an account 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 a subsidiary of a holding company, the
short-term unsecured debt
obligations of such holding company) are rated A-1 by Standard
& Poor's and P-1
by Moody's (and a comparable rating if another Rating Agency is
specified by the
Depositor by written notice to the Servicer) at the time any
amounts are held on
deposit
Fremont 2005-A
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<PAGE>
therein, (ii) a trust account or accounts maintained with a
federal or state
chartered depository institution or trust company acting in its
fiduciary
capacity or (iii) any other account acceptable to each Rating
Agency. Eligible
Accounts may bear interest, and may include, if otherwise
qualified under this
definition, accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002)
(or any
successor thereto), or any substantially similar administrative
exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b) of this
Agreement.
Event of Default: Means any (i) Servicer Event of Default or
(ii) Master
Servicer Event of Termination, each as defined in Section
7.01.
Excess Cashflow: As to any Distribution Date, an amount equal to
the
excess if any, of (i) the interest collected on the Mortgage
Loans received by
the Servicer on or prior to the related Determination Date or
advanced by the
Servicer for the related Remittance Date (net of Expense Fees)
over (ii) the sum
of the amounts payable to the Classes of Certificates on such
Distribution Date
pursuant to Section 4.02(a)(i).
Excess Overcollateralized Amount: With respect to any
Distribution Date,
the excess, if any, of (a) the Overcollateralized Amount on such
Distribution
Date over (b) the Overcollateralization Target Amount for such
Distribution
Date.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate
equal to the
sum of the Servicing Fee Rate, the Master Servicing Fee Rate and
the Trust
Administration Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the
Master Servicing Fee and the Trust Administration Fee.
Extra Principal Distribution Amount: As of any Distribution
Date, the
lesser of (x) the Excess Cashflow for such Distribution Date and
(y) the related
Overcollateralization Deficiency for such Distribution Date.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property
purchased by the
Originator as
Fremont 2005-A
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20
<PAGE>
contemplated by this Agreement), a determination made by the
Servicer that all
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds
and other
payments or recoveries which the Servicer, in its reasonable
good faith
judgment, expects to be finally recoverable in respect thereof
have been so
recovered. The Servicer shall maintain records, prepared by a
Servicing Officer,
of each Final Recovery Determination made thereby and deliver a
certificate of a
Servicing Officer evidencing such determination to the Master
Servicer.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date
for each Class of Certificates is the Distribution Date
occurring in January
2035.
Formula Rate: With respect to each Class of LIBOR Certificates,
the lesser
of the related Base Rate for such Class and the Maximum Cap
Rate.
Fremont: Fremont Investment & Loan, a California state
chartered
industrial bank, and its successors in interest.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan, the
fixed percentage amount set forth in the related Mortgage Note
to be added to
the applicable Index to determine the Mortgage Interest
Rate.
Group 1 Allocation Percentage: For any Distribution Date, the
percentage
equivalent of a fraction, the numerator of which is (i) the
Principal Remittance
Amount for the Group 1 Mortgage Loans for such Distribution
Date, and the
denominator of which is (ii) the Principal Remittance Amount for
such
Distribution Date.
Group 1 Interest Remittance Amount: With respect to any
Distribution Date,
that portion of the Available Funds for such Distribution Date
attributable to
interest received or advanced with respect to the Group 1
Mortgage Loans,
reduced by the pro rata portion of the amounts specified in
clause (y) of the
definition of Available Funds for such Distribution Date.
Group 1 Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan
Schedule as Group 1 Mortgage Loans.
Group 1 Principal Distribution Amount: With respect to any
Distribution
Date is the sum of (i) the excess of (x) the Principal
Remittance Amount
relating to the Group 1 Mortgage Loans over (y) the
Overcollateralization
Release Amount multiplied by the Group 1 Allocation Percentage
for such
Distribution Date and (ii) the Extra Principal Distribution
Amount for such
Distribution Date multiplied by the Group 1 Allocation
Percentage.
Group 1 Senior Principal Distribution Amount: An amount equal to
the
excess of (x) the aggregate Certificate Balance of the Class 1-A
Certificates
immediately prior to such Distribution Date over (y) the lesser
of (A) the
product of (i) 53.90% and (ii) the aggregate Stated Principal
Balance of the
Group 1 Mortgage Loans as of the last day of the related Due
Period (after
giving effect to Scheduled Payments of principal due during the
related Due
Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) and (B)
the aggregate
Stated Principal Balance of the Group 1 Mortgage Loans as of the
last day of the
related Due Period (after giving effect to scheduled
Fremont 2005-A
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<PAGE>
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus $2,828,646.66.
Group 1 Sequential Trigger Event: With respect to any
Distribution Date, a
Group 1 Sequential Trigger Event exists if (1) before March
2008, the quotient
(expressed as a percentage) of (x) the aggregate amount of
Realized Losses
incurred since the Cut-off Date through the last day of the
related Prepayment
Period divided by (y) the Cut-off Date Pool Principal Balance,
exceeds 3.50%, or
(2) on or after March 2008, a Trigger Event is in effect.
Group 2 Allocation Percentage: For any Distribution Date, the
percentage
equivalent of a fraction, the numerator of which is (i) the
Principal Remittance
Amount for the Group 2 Mortgage Loans for such Distribution
Date, and the
denominator of which is (ii) the Principal Remittance Amount for
such
Distribution Date.
Group 2 Interest Remittance Amount: With respect to any
Distribution Date,
that portion of the Available Funds for such Distribution Date
attributable to
interest received or advanced with respect to the Group 2
Mortgage Loans,
reduced by the pro rata portion of the amounts specified in
clause (y) of the
definition of Available Funds for such Distribution Date.
Group 2 Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan
Schedule as Group 2 Mortgage Loans.
Group 2 Principal Distribution Amount: With respect to any
Distribution
Date is the sum of (i) the excess of (x) the Principal
Remittance Amount
relating to the Group 2 Mortgage Loans over (y) the
Overcollateralization
Release Amount multiplied by the Group 2 Allocation Percentage
for such
Distribution Date and (ii) the Extra Principal Distribution
Amount for such
Distribution Date multiplied by the Group 2 Allocation
Percentage.
Group 2 Senior Principal Distribution Amount: An amount equal to
the
excess of (x) the aggregate Certificate Balance of the Class 2-A
Certificates
immediately prior to such Distribution Date over (y) the lesser
of (A) the
product of (i) 53.90% and (ii) the aggregate Stated Principal
Balance of the
Group 2 Mortgage Loans as of the last day of the related Due
Period (after
giving effect to Scheduled Payments of principal due during the
related Due
Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) and (B)
the aggregate
Stated Principal Balance of the Group 2 Mortgage Loans as of the
last day of the
related Due Period (after giving effect to scheduled payments of
principal due
during the related Due Period, to the extent received or
advanced, and
unscheduled collections of principal received during the related
Prepayment
Period) minus $3,220,600.40.
High Cost Mortgage Loan: A Mortgage Loan classified as (a) a
"high cost"
loan under the Home Ownership and Equity Protection Act of 1994,
(b) a "high
cost," "threshold," "covered" or "predatory" loan under any
other applicable
state, federal or local law (or a similarly classified loan
using different
terminology under a law imposing heightened regulatory scrutiny
or additional
legal liability for residential mortgage loans having high
interest rates,
points and/or fees) or (c) a High Cost Loan or Covered Loan as
defined in the
Standard & Poor's
Fremont 2005-A
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<PAGE>
LEVELS(R) Glossary attached as Exhibit P (the "Glossary") where
(x) a "High Cost
Loan" is each loan identified in the column "Category under
applicable
anti-predatory lending law" of the table entitled "Standard
& Poor's High Cost
Loan Categorization" in the Glossary as each such loan is
defined in the
applicable anti-predatory lending law of the State or
jurisdiction specified in
such table and (y) "Covered Loan" is each loan identified in the
column
"Category under applicable anti-predatory lending law" of the
table entitled
"Standard & Poor's High Covered Loan Categorization" in the
Glossary as each
such loan is defined in the applicable anti-predatory lending
law of the State
of jurisdiction specified in such table.
Index: As to each Adjustable Rate Mortgage Loan, the index from
time to
time in effect for the adjustment of the Mortgage Interest Rate
set forth as
such on the related Mortgage Note.
Initial Overcollateralization Amount: $21,777,311.48.
Insurance Policy: With respect to any Mortgage Loan included in
the Trust
Fund, any insurance policy, including all riders and
endorsements thereto in
effect, including any replacement policy or policies for any
Insurance Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Accrual Period: With respect to each Class of REMIC I
Regular
Interests and any Distribution Date, the period commencing on
the Distribution
Date occurring in the month preceding the month in which the
current
Distribution Date occurs and ending on the day immediately
preceding the current
Distribution Date (or, in the case of the first Distribution
Date, the period
from and including the Closing Date to but excluding such first
Distribution
Date). For purposes of computing interest accruals on each Class
of LIBOR
Certificates, each Interest Accrual Period has the actual number
of days in such
month and each year is assumed to have 360 days.
Investment Account: As defined in Section 3.12(a).
Issuer: Fremont Home Loan Trust 2005-A,
Late Collections: With respect to any Mortgage Loan and any Due
Period,
all amounts received after the Remittance Date immediately
following such Due
Period, whether as late payments of Scheduled 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 for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the
LIBOR
Certificates, the rate determined by the Trust Administrator on
the related
LIBOR Determination Date on the basis of the offered rate for
one-month U.S.
dollar deposits as such rate appears on Telerate Page 3750 as of
11:00 a.m.
(London time) on such date; provided, that if such rate does not
appear on
Telerate Page 3750, the rate for such date will be determined on
the basis of
the rates at which one-month U.S. dollar deposits are offered by
the Reference
Banks at approximately 11:00 a.m. (London
Fremont 2005-A
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<PAGE>
time) on such date to prime banks in the London interbank
market. In such event,
the Trust Administrator will request the principal London office
of each of the
Reference Banks to provide a quotation of its rate. If at least
two such
quotations are provided, the rate for that date will be the
arithmetic mean of
the quotations (rounded upwards if necessary to the nearest
whole multiple of
1/16%). If fewer than two quotations are provided as requested,
the rate for
that date will be the arithmetic mean of the rates quoted by
major banks in New
York City, selected by the Trust Administrator (after
consultation with the
Depositor), at approximately 11:00 a.m. (New York City time) on
such date for
one-month U.S. dollar loan to leading European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for
the LIBOR Certificates, the second London Business Day preceding
the
commencement of such Interest Accrual Period.
Lifetime Rate Cap: The provision of each Mortgage Note related
to an
Adjustable Rate Mortgage Loan which provides for an absolute
maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the
terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage
Loan by more
than the amount per annum set forth on the Mortgage Loan
Schedule.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO Property) which was
liquidated in the
calendar month preceding the month of such Distribution Date and
as to which the
Servicer has certified (in accordance with this Agreement) that
it has received
all amounts it expects to receive in connection with the
liquidation of such
Mortgage Loan including the final disposition of any REO
Property.
Liquidation Event: With respect to any Mortgage Loan, any of the
following
events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery
Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is
removed from coverage under this Agreement by reason of its
being purchased,
sold or replaced pursuant to or as contemplated by this
Agreement. With respect
to any REO Property, either of the following events: (i) a Final
Recovery
Determination is made as to such REO Property; or (ii) such REO
Property is
removed from coverage under this Agreement by reason of its
being purchased
pursuant to this Agreement.
Liquidation Proceeds: The amounts, other than Insurance
Proceeds,
Condemnation Proceeds or those received following the
acquisition of REO
Property, received in connection with the liquidation of a
defaulted Mortgage
Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's
sale, foreclosure sale or otherwise.
Loan Group: The Group 1 Mortgage Loans and the Group 2 Mortgage
Loans, as
applicable.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan,
the ratio
(expressed as a percentage) of the original outstanding
principal amount of the
Mortgage Loan (or, in the case of a second-lien Mortgage Loan,
the combined
original outstanding principal amount of such Mortgage Loan and
any first-lien
mortgage loan on the same Mortgaged Property) as of the Cut-off
Date (unless
otherwise indicated), to either (a) if the Mortgage Loan was
made to finance the
acquisition of the related Mortgaged Property, the least of (i)
the purchase
price of the Mortgaged Property, or (ii) the Appraisal Value of
the
Fremont 2005-A
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<PAGE>
Mortgaged Property at origination, or (b) if the Mortgage Loan
was a refinancing
or modification, the Appraisal Value of the Mortgaged Property
at the time of
the refinancing or modification.
London Business Day: Any day on which dealings in deposits of
United
States dollars are transacted in the London interbank
market.
Marker Rate: With respect to the Class C Certificates and any
Distribution
Date, a per annum rate equal to two (2) times the weighted
average of the
Uncertificated REMIC I Pass-Through Rates for REMIC I Regular
Interest LT1A1,
REMIC I Regular Interest LT1A2, REMIC I Regular Interest LT2A1,
REMIC I Regular
Interest LT2A2, REMIC I Regular Interest LT2A3, REMIC I Regular
Interest LTM1,
REMIC I Regular Interest LTM2, REMIC I Regular Interest LTM3,
REMIC I Regular
Interest LTM4, REMIC I Regular Interest LTM5, REMIC I Regular
Interest LTM6,
REMIC I Regular Interest LTM7, REMIC I Regular Interest LTM8,
REMIC I Regular
Interest LTM9, REMIC I Regular Interest LTM10 and REMIC I
Regular Interest LTZZ,
(i) with the rate on each such REMIC I Regular Interest (other
than REMIC I
Regular Interest LTZZ) subject to a cap equal to the Formula
Rate of its
Corresponding Class (taking into account in determining any such
Formula Rate
the imposition of the Net WAC Rate, as applied through its
corresponding
Pass-Through Rate) for the purposes of this calculation and (ii)
with the rate
on REMIC I Regular Interest LTZZ subject to a cap of zero for
the purpose of
this calculation; provided, however, that for this purpose,
calculations of the
Uncertificated REMIC I Pass-Through Rate and the related caps
with respect to
each such REMIC I Regular Interest (other than REMIC I Regular
Interest LTZZ)
shall be multiplied by a fraction, the numerator of which is the
actual number
of days in the Interest Accrual Period and the denominator of
which is 30.
Master Servicer: As of the Closing Date, Wells Fargo Bank, N.A.
and
thereafter, its respective successors in interest who meet the
qualifications of
this Agreement. As long as a Master Servicer is required under
this Agreement,
the Master Servicer and the Trust Administrator shall at all
times be the same
Person.
Master Servicer Event of Termination: One or more of the events
described
in Section 7.01(c).
Master Servicing Fee: With respect to the Mortgage Loans and for
any
calendar month, an amount, payable as provided in Section 3A.09,
equal to the
Master Servicing Fee Rate accrued for one month on the same
principal amount on
which interest on each Mortgage Loan accrues for such calendar
month.
Master Servicing Fee Rate: 0.004% per annum; provided, however,
if Fremont
Investment & Loan has been removed as Servicer or has
resigned as Servicer, and
in either such case if a Master Servicer is no longer required
hereunder, then
the Master Servicing Fee Rate shall be 0.00% per annum.
Master Servicing Officer: Any employee of the Master Servicer
involved in,
or responsible for, the administration and servicing of the
Mortgage Loans,
whose name and specimen signature appear on a list of Master
Servicing Officers
furnished by the Master
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Servicer to the Trustee, the Trust Administrator, the Servicer
and the Depositor
on the Closing Date, as such list may from time to time be
amended.
Maximum Cap Rate: A per annum rate equal to (a) the weighted
average of
the Adjusted Net Maximum Mortgage Interest Rates then in effect
at the beginning
of the related Due Period on the Mortgage Loans (adjusted for
Prepayments during
such Due Period that were distributed on the Distribution Date
falling within
such Due Period), multiplied by (b) 30 divided by the actual
number of days in
the related Interest Accrual Period.
Maximum Mortgage Interest Rate: With respect to an Adjustable
Rate
Mortgage Loan, the specified maximum mortgage rate over the life
of such
mortgage loan; with respect to a Mortgage Loan with a fixed
rate, the Mortgage
Interest Rate.
Maximum LTZZ Uncertificated Accrued Interest Deferral Amount:
With respect
to any Distribution Date, the excess of (a) accrued interest at
the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I
Regular Interest
LTZZ for such Distribution Date on a balance equal to the
Uncertificated
Principal Balance of REMIC I Regular Interest LTZZ minus the
REMIC I
Overcollateralized Amount, in each case for such Distribution
Date, over (b)
REMIC I Regular Interest LT1A1, REMIC I Regular Interest LT1A2,
REMIC I Regular
Interest LT2A1, REMIC I Regular Interest LT2A2, REMIC I Regular
Interest LT2A3,
REMIC I Regular Interest LTM1, REMIC I Regular Interest LTM2,
REMIC I Regular
Interest LTM3, REMIC I Regular Interest LTM4, REMIC I Regular
Interest LTM5,
REMIC I Regular Interest LTM6, REMIC I Regular Interest LTM7,
REMIC I Regular
Interest LTM8, REMIC I Regular Interest LTM9 and REMIC I Regular
Interest LTM10,
each subject to a cap equal to the Formula Rate of its
Corresponding Class
(taking into account in determining any such Formula Rate the
imposition of the
Net WAC Rate, as applied through its corresponding Pass-Through
Rate) for the
purposes of this calculation; provided, however, that for this
purpose,
calculations of the Uncertificated REMIC I Pass-Through Rate and
the related
caps with respect to Uncertificated Accrued Interest on REMIC I
Regular Interest
LT1A1, REMIC I Regular Interest LT1A2, REMIC I Regular Interest
LT2A1, REMIC I
Regular Interest LT2A2, REMIC I Regular Interest LT2A3, REMIC I
Regular Interest
LTM1, REMIC I Regular Interest LTM2, REMIC I Regular Interest
LTM3, REMIC I
Regular Interest LTM4, REMIC I Regular Interest LTM5, REMIC I
Regular Interest
LTM6, REMIC I Regular Interest LTM7, REMIC I Regular Interest
LTM8, REMIC I
Regular Interest LTM9 and REMIC I Regular Interest LTM10
multiplied by a
fraction, the numerator of which is the actual number of days in
the Interest
Accrual Period and the denominator of which is 30.
MERS: As defined in Section 2.01.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Originator
has designated or will designate MERS as, and has taken or will
take such action
as is necessary to cause MERS to be, the mortgagee of record, as
nominee for the
Originator, in accordance with MERS Procedure Manual and (b) the
Originator has
designated or will designate the Trustee as the Investor on the
MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended,
supplemented or otherwise modified from time to time.
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MERS(R) System: MERS mortgage electronic registry system, as
more
particularly described in the MERS Procedures Manual.
Monthly Statement: The statement made available to the
Certificateholders
pursuant to Section 4.03.
Moody's: Moody's Investors Service, Inc. If Moody's is
designated as a
Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the
address for notices to Moody's shall be Moody's Investors
Service, Inc., 99
Church Street, New York, New York 10007, Attention: Residential
Mortgage
Pass-Through Group, or such other address as Moody's may
hereafter furnish to
the Depositor, the Servicer, the Master Servicer, the Trust
Administrator and
the Trustee.
Mortgage: The mortgage, deed of trust or other instrument
identified on
the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage
Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject
of this
Agreement, each Mortgage Loan originally sold and subject to
this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage
Loan includes,
without limitation, the Mortgage File, the Custodial File, the
Servicing File,
the Scheduled Payments, Principal Prepayments, Liquidation
Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition
proceeds, Prepayment
Premiums and all other rights, benefits, proceeds and
obligations arising from
or in connection with such Mortgage Loan, excluding replaced or
repurchased
Mortgage Loans.
Mortgage Loan Documents: The mortgage loan documents pertaining
to each
Mortgage Loan.
Mortgage Loan Schedule: As of any date, the list of Mortgage
Loans
included in the Trust Fund on such date, attached hereto as
Schedule I. The
Mortgage Loan Schedule shall set forth by Loan Group the
following information
with respect to each Mortgage Loan in such Loan Group :
(i) the Mortgagor's name and the Originator's Mortgage Loan
identifying number;
(ii) the street address of the Mortgaged Property including
the
state and zip code;
(iii) a code indicating whether the Mortgaged Property is
owner-occupied;
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(iv) the number and type of residential dwelling constituting
the
Mortgaged Property (i.e., a single family residence, a 2-4
family residence, a
unit in a condominium project or a unit in a planned unit
development,
manufactured housing);
(v) the original months to maturity;
(vi) the Loan-to-Value Ratio, at origination;
(vii) the Mortgage Interest Rate in effect immediately following
the
Cut-off Date;
(viii) the date on which the first monthly payment was due on
the
Mortgage Loan;
(ix) the stated maturity date of such Mortgage Loan;
(x) the amount of the monthly payment (a) at origination and
(b)
due on the first Due Date after the Cut-off Date;
(xi) the last Due Date on which a monthly payment was
actually
applied to the unpaid Stated Principal Balance;
(xii) the original principal amount of the Mortgage Loan as of
the
date of origination;
(xiii) the Stated Principal Balance of the Mortgage Loan as of
the
close of business on the Cut-off Date;
(xiv) with respect to each Adjustable Rate Mortgage Loan,
the
Applicable Index and Gross Margin;
(xv) a code indicating the purpose of the Mortgage Loan
(i.e.,
purchase financing, rate/term refinancing, cash-out
refinancing);
(xvi) with respect to each Adjustable Rate Mortgage Loan,
the
maximum Mortgage Interest Rate;
(xvii) with respect to each Adjustable Rate Mortgage Loan,
the
minimum Mortgage Interest Rate;
(xviii) the Mortgage Interest Rate at origination;
(xix) with respect to each Adjustable Rate Mortgage Loan,
the
Periodic Mortgage Interest Rate Cap and the maximum first
Adjustment Date
Mortgage Interest Rate adjustment;
(xx) a code indicating the documentation program;
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(xxi) with respect to each Adjustable Rate Mortgage Loan, the
first
Adjustment Date immediately following the Cut-off Date and the
Adjustment
Date frequency;
(xxii) the value of the Mortgaged Property used to calculate the
LTV
for the related Mortgage Loan;
(xxiii) the sale price of the Mortgaged Property, if
applicable;
(xxiv) the Originator's risk grade;
(xxv) the actual interest "paid to date" of the Mortgage Loan as
of
the Cut-off Date;
(xxvi) the number of years any Prepayment Premium is in
effect;
(xxvii) the loan type (i.e. fixed, adjustable; 2/28, 3/27,
etc.);
(xxviii) the actual unpaid principal balance of the Mortgage
Loan as
of the Cut-off Date;
(xxix) a code indicating whether such Mortgage Loan is a Group
1
Mortgage Loan or a Group 2 Mortgage Loan;
(xxx) a code indicating whether the Mortgage Loan is a MERS
Designated Mortgage Loan and, if so, its corresponding
mortgage
identification number; and
(xxxi) a code indicating whether the Mortgage Loan is subject to
a
Prepayment Premium, if any.
The Mortgage Loan Schedule shall set forth the following
information with
respect to the Mortgage Loans in the aggregate as of the Cut-off
Date: (1) the
number of Mortgage Loans; (2) the current 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 set forth the aggregate Stated Principal Balance
of the Mortgage
Loans. The Mortgage Loan Schedule shall be amended from time to
time by the
Depositor in accordance with the provisions of this Agreement.
With respect to
any Substitute Mortgage Loan, the Cut-off Date shall refer to
the related
Cut-off Date for such Mortgage Loan, determined in accordance
with the
definition of Cut-off Date herein.
Mortgage Note: The note or other evidence of the indebtedness of
a
Mortgagor under a Mortgage Loan.
Mortgaged Property: The real property (or leasehold estate, if
applicable)
identified on the Mortgage Loan Schedule as securing repayment
of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
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<PAGE>
Net Monthly Excess Cash Flow: For any Distribution Date the
amount
remaining for distribution pursuant to subsection 4.02(a)(iii)
(before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date,
the amount
by which the sum of the Prepayment Interest Shortfalls exceeds
the sum of the
Compensating Interest payments made on such Distribution
Date.
Net WAC Rate: A per annum rate equal to (a) the weighted average
of the
Adjusted Net Mortgage Interest Rates then in effect at the
beginning of the
related Due Period on the Mortgage Loans (adjusted for
prepayments during such
Due Period that were distributed on the Distribution Date
falling within such
Due Period), multiplied by (b) 30 divided by the actual number
of days in such
Interest Accrual Period.
Net WAC Rate Carryover Amount: With respect to each Class of
LIBOR
Certificates, as of any Distribution Date, if on such
Distribution Date the
Pass-Through Rate for any Class of LIBOR Certificates is based
upon the Net WAC
Rate, the sum of (A) the excess of the Formula Rate for that
Class of LIBOR
Certificates over the the Net WAC Rate, and (B) the Net WAC Rate
Carryover
Amount for such Class of Certificates for all previous
Distribution Dates not
previously paid, together with interest thereon at the
applicable Pass-Through
Rate for such Class (without giving effect to any such
limitations) of LIBOR
Certificates for such Distribution Date.
Net WAC Rate Carryover Payment: For any Distribution Date, an
amount equal
to the aggregate of the Net WAC Rate Carryover Amounts for such
Distribution
Date.
Net WAC Rate Carryover Reserve Account: The separate Eligible
Account
created and maintained by the Trustee pursuant to Sections
3.27(a) in the name
of the Trust Administrator for the benefit of the Holders of
Regular
Certificates and designated "Wells Fargo Bank, N.A. in trust for
registered
holders of Fremont Home Loan Trust 2005-A, Mortgage-Backed
Certificates, Series
2005-A." Funds in the Net WAC Rate Carryover Reserve Account
shall be held in
trust for the Holders of Regular Certificates for the uses and
purposes set
forth in this Agreement. Amounts on deposit in the Net WAC Rate
Carryover
Reserve Account shall not be invested. The Net WAC Rate
Carryover Reserve
Account shall not be an asset of REMIC I or REMIC II.
NIM Trust: Fremont NIM Trust 2005-A, a Delaware statutory
trust.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Nonrecoverable P&I Advance: Any P&I Advance previously
made or proposed to
be made in respect of a Mortgage Loan or REO Property that, in
the good faith
business judgment of the Servicer, will not or, in the case of a
proposed P&I
Advance, would not be ultimately recoverable from related late
payments,
Insurance Proceeds, Condemnation Proceeds or Liquidation
Proceeds on such
Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously made
or proposed to be made in respect of a Mortgage Loan or REO
Property, which, in
the good faith
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<PAGE>
business judgment of the Servicer, will not or, in the case of a
proposed
Servicing Advance, would not, be ultimately recoverable from
related Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant
to
Section 9.02 to the effect that final distribution on any of the
Certificates
shall be made only upon presentation and surrender thereof.
Notional Amount: With respect to the Class C Certificates, a
notional
amount equal to the aggregate principal balance of the REMIC I
Regular Interests
(other than REMIC I Regular Interest LTP).
Offered Certificates: As defined in the Preliminary
Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer
with responsibility for the servicing of the Mortgage Loans
required to be
serviced by the Servicer and listed on a list delivered to the
Trustee or Trust
Administrator, as applicable, pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house
counsel for the Servicer or a Subservicer, the Master Servicer,
the Originator
or the Depositor, reasonably acceptable to the Trustee and the
Trust
Administrator; provided, that any Opinion of Counsel relating to
(a)
qualification of any Trust REMIC as a REMIC or (b) compliance
with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of
Counsel) an
opinion of counsel who (i) is in fact independent of the
Servicer of the
Mortgage Loans, (ii) does not have any material direct or
indirect financial
interest in the Servicer of the Mortgage Loans or in an
affiliate of either and
(iii) is not connected with the Servicer of the Mortgage Loans
as an officer,
employee, director or person performing similar functions.
Optional Termination Date: Any Distribution Date when the
aggregate Stated
Principal Balance of the Mortgage Loans, as of the last day of
the related Due
Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance that
has been designated as an Optional Termination Date by the
Servicer or holder of
the Class R Certificate.
Originator: Fremont.
OTS: Office of Thrift Supervision, and any successor
thereto.
Outstanding: With respect to the Certificates as of any date
of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or the
Trust
Administrator or delivered to the Trustee or the Trust
Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other
Certificates have been executed and delivered by the Trustee or
the Trust
Administrator pursuant to this Agreement.
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<PAGE>
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a
Stated Principal Balance greater than zero which was not the
subject of a
Principal Prepayment in Full prior to such Due Date and which
did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the
excess, if
any, of (a) the aggregate Stated Principal Balance of the
Mortgage Loans and REO
Properties for such Distribution Date over (b) the aggregate of
the Class
Certificate Balances of the LIBOR Certificates and the Class P
Certificate as of
such Distribution Date (after giving effect to the payment of
the Principal
Remittance Amount on such Certificates on such Distribution
Date).
Overcollateralization Deficiency: With respect to any
Distribution Date,
the excess, if any, of (a) the Overcollateralization Target
Amount applicable to
such Distribution Date over (b) the Overcollateralized Amount
applicable to such
Distribution Date.
Overcollateralization Floor: With respect to any Distribution
Date, 0.50%
of the aggregate Stated Principal Balance of the Mortgage Loans
as of the
Cut-off Date.
Overcollateralization Release Amount: With respect to any
Distribution
Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount
and (b) the Excess Cashflow.
Overcollateralization Target Amount: With respect to any
Distribution Date
(i) prior to the Stepdown Date, an amount equal to 1.80% of the
Cut-off Date
Pool Principal Balance, (ii) on and after the Stepdown Date
provided a Trigger
Event is not in effect, an amount equal to the greater of (A)
the lesser of (x)
3.60% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the
last day of the related Due Period (after giving effect to
scheduled payments of
principal due during the related Due Period, to the extent
received or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) and (y) 1.80% of the aggregate Cut-off Date Pool
Principal Balance of
all of the Mortgage Loans and (B) 0.50% of the aggregate Cut-off
Date Pool
Principal Balance of all of the Mortgage Loans and (iii) on or
after the
Stepdown Date if a Trigger Event is in effect, the
Overcollateralization Target
Amount for the immediately preceding Distribution Date.
Ownership Interest: As to any Residual Certificate, any
ownership interest
in such Certificate including any interest in such Certificate
as the Holder
thereof and any other interest therein, whether direct or
indirect, legal or
beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any
advance made by
the Servicer in respect of any Remittance Date representing the
aggregate of all
payments of principal and interest, net of the Servicing Fee,
that were due
during the related Due Period on the Mortgage Loans and that
were delinquent on
the related Remittance Date, plus certain amounts representing
assumed payments
not covered by any current net income on the Mortgaged
Properties acquired by
foreclosure or deed in lieu of foreclosure as determined
pursuant to Section
4.01.
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<PAGE>
Pass-Through Margin: With respect to each Class of LIBOR
Certificates, the
following percentages:
<TABLE>
<CAPTION>
PRIOR TO OPTIONAL ON AND AFTER OPTIONAL
TERMINATION DATE TERMINATION DATE
----------------- ---------------------
<S> <C> <C>
Class 1-A-1 Certificates 0.245% 0.490%
Class 1-A-2 Certificates 0.280% 0.560%
Class 2-A-1 Certificates 0.110% 0.220%
Class 2-A-2 Certificates 0.240% 0.480%
Class 2-A-3 Certificates 0.350% 0.700%
Class M1 Certificates 0.430% 0.645%
Class M2 Certificates 0.460% 0.690%
Class M3 Certificates 0.490% 0.735%
Class M4 Certificates 0.680% 1.020%
Class M5 Certificates 0.700% 1.050%
Class M6 Certificates 0.780% 1.170%
Class M7 Certificates 1.200% 1.800%
Class M8 Certificates 1.350% 2.025%
Class M9 Certificates 2.000% 3.000%
Class M10 Certificates 2.500% 3.750%
</TABLE>
Pass-Through Rate: For any Distribution Date and with respect to
each of
the LIBOR Certificates, a rate equal to the lesser of (i) the
related Formula
Rate for such Class and (ii) the Net WAC Rate; and in the case
of any REMIC I
Regular Interest, the Uncertificated REMIC I Pass-Through
Rate.
With respect to the Class C Certificates and any Distribution
Date, a per
annum rate equal to the percentage equivalent of a fraction, the
numerator of
which is the sum of the amounts calculated pursuant to clauses
(A) through (R)
below, and the denominator of which is the aggregate of the
Uncertificated
Principal Balances of REMIC I Regular Interest LTAA, REMIC I
Regular Interest
LT1A1, REMIC I Regular Interest LT1A2, REMIC I Regular Interest
LT2A1, REMIC I
Regular Interest LT2A2, REMIC I Regular Interest LT2A3, REMIC I
Regular Interest
LTM1, REMIC I Regular Interest LTM2, REMIC I Regular Interest
LTM3, REMIC I
Regular Interest LTM4, REMIC I Regular Interest LTM5, REMIC I
Regular Interest
LTM6, REMIC I Regular Interest LTM7, REMIC I Regular Interest
LTM8, REMIC I
Regular Interest LTM9, REMIC I Regular Interest LTM10 and REMIC
I Regular
Interest LTZZ. For purposes of calculating the Pass-Through Rate
for the Class C
Certificates, the numerator is equal to the sum of the following
components:
(A)the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTAA minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTAA;
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(B) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT1A1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT1A1;
(C) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT1A2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT1A2;
(D) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT2A1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT2A1;
(E) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT2A2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT2A2;
(F) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT2A3 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT2A3;
(G) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM1;
(H) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM2;
(I) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM3 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM3;
(J) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM4 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM4;
(K) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM5 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM5;
(L) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM6 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM6;
(M) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM7 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM7;
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(N) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM8 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM8;
(O) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM9 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM9;
(P) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM10 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM10; and
(Q) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTZZ minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTZZ; and
(R) 100% of the Interest on REMIC I Regular Interest LTP.
Percentage Interest: As to any Certificate, the percentage
interest
evidenced thereby in distributions required to be made on the
related Class,
such percentage interest being set forth on the face thereof or
equal to the
percentage obtained by dividing the Denomination of such
Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Periodic Mortgage Interest Rate Cap: With respect to each
Adjustable Rate
Mortgage Loan, the provision of each Mortgage Note which
provides for an
absolute maximum amount by which the Mortgage Interest Rate
therein may increase
or decrease on an Adjustment Date above or below the Mortgage
Interest Rate
previously in effect. The Periodic Mortgage Interest Rate Cap
for each
Adjustable Rate Mortgage Loan is the rate set forth on the
Mortgage Loan
Schedule.
Periodic Mortgage Interest Rate Floor: With respect to each
Adjustable
Rate Mortgage Loan, the provision of each Mortgage Note which
provides for an
absolute minimum amount by which the Mortgage Interest Rate
therein may increase
or decrease on an Adjustment Date above or below the Mortgage
Interest Rate
previously in effect. The Periodic Mortgage Interest Rate Floor
for each
Adjustable Rate Mortgage Loan is the rate set forth on the
Mortgage Loan
Schedule.
Permitted Investments: Any one or more of the following
obligations or
securities acquired at a purchase price of not greater than par,
regardless of
whether issued by the Depositor, the Servicer, the Master
Servicer, the Trust
Administrator, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed
as
to timely payment of principal and interest by, the United
States or
any agency or instrumentality thereof, provided such obligations
are
backed by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit
of,
or bankers' acceptances (which shall each have an original
maturity
of not more than 90 days and, in
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<PAGE>
the case of bankers' acceptances, shall in no event have an
original
maturity of more than 365 days or a remaining maturity of more
than
30 days) denominated in United States dollars and issued by
any
Depository Institution and rated P-1 by Moody's and A-1+ by
Standard
& Poor's;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of
the
United States of America or any state thereof and that are rated
by
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories at the time of such
investment
or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable
on
demand or on a specified date not more than 30 days after the
date
of acquisition thereof) that is rated by each Rating Agency
that
rates such securities in its highest short-term unsecured
debt
rating available at the time of such investment;
(vi) units of money market funds, including money market
funds
advised or managed by the Depositor, the Trustee or the
Trust
Administrator or an Affiliate thereof, that have been rated
"Aaa" by
Moody's, "AAAm" or "AAAMG" by Standard & Poor's; and
(vii) if previously confirmed in writing to the Trustee and
the Trust Administrator, any other demand, money market or
time
deposit, or any other obligation, security or investment, as may
be
acceptable to the Rating Agencies as a permitted investment of
funds
backing "Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall
evidence either
the right to receive (a) only interest with respect to the
obligations
underlying such instrument or (b) both principal and interest
payments derived
from obligations underlying such instrument and the interest and
principal
payments with respect to such instrument provide a yield to
maturity at par
greater than 120% of the yield to maturity at par of the
underlying obligations.
Permitted Transferee: Any Person other than (i) the United
States, any
State or political subdivision thereof, or any agency or
instrumentality of any
of the foregoing, (ii) a foreign government, international
organization or any
agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in Section 521
of the Code)
which is exempt from tax imposed by Chapter 1 of the Code
(including the tax
imposed by Section 511 of the Code on unrelated business taxable
income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code)
with respect to
any Residual Certificate, (iv) rural electric and telephone
cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person
that is not a U.S.
Person or a U.S. Person with respect to whom income from a
Residual Certificate
is attributable to a foreign permanent establishment or fixed
base (within the
meaning of an applicable income tax treaty) of such Person or
any other U.S.
Person,
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(vi) an "electing large partnership" within the meaning of
Section 775 of the
Code and (vii) any other Person so designated by the Depositor
based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in
a Residual
Certificate to such Person may cause any Trust REMIC to fail to
qualify as a
REMIC at any time that the Certificates are outstanding. The
terms "United
States," "State" and "international organization" shall have the
meanings set
forth in Section 7701 of the Code or successor provisions. A
corporation will
not be treated as an instrumentality of the United States or of
any State or
political subdivision thereof for these purposes if all of its
activities are
subject to tax and, with the exception of Freddie Mac, a
majority of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balances of the Mortgage Loans for such
Distribution
Date that were Outstanding Mortgage Loans on the Due Date in the
related Due
Period.
Prepayment Interest Excess: With respect to any Remittance Date,
the sum
of, for each Mortgage Loan that was, during the related
Prepayment Period, the
subject of a Principal Prepayment in Full that was applied by
the Servicer to
reduce the outstanding principal balance of such Mortgage Loan
on a date
preceding the Due Date in the succeeding Prepayment Period, an
amount equal to
the product of (a) the Mortgage Interest Rate net of the
Servicing Fee Rate for
such Mortgage Loan, (b) the amount of the Principal Prepayment
in Full for such
Mortgage Loan, (c) 1/360 and (d) the number of days commencing
on the first day
of the calendar month in which such Remittance Date occurs and
ending on the
date on which such Principal Prepayment in Full was applied.
Prepayment Interest Shortfall: With respect to any Remittance
Date, the
sum of, for each Mortgage Loan that was, during the related
Prepayment Period,
the subject of a Principal Prepayment in Full that was applied
by the Servicer
to reduce the outstanding principal balance of such Mortgage
Loan on a date
preceding the Due Date in the succeeding Prepayment Period, an
amount equal to
the product of (a) the Mortgage Interest Rate net of the
Servicing Fee Rate for
such Mortgage Loan, with respect to the Servicer's obligation in
respect of any
Prepayment Interest Shortfall, or the sum of the Servicing Fee
Rate and the
Master Servicing Fee Rate, with respect to the Master Servicer's
obligation in
respect of any Prepayment Interest Shortfall, (b) the amount of
the Principal
Prepayment for such Mortgage Loan, (c) 1/360 and (d) the number
of days
commencing on the date on which such Principal Prepayment was
applied and ending
on the last day of the related Prepayment Period.
Prepayment Period: With respect to any Remittance Date, (a) with
respect
to a Principal Prepayment in Full, the period from and including
the 16th day of
the month preceding the month in which such Remittance Date
occurs to and
including the 15th day of the month in which such Remittance
Date occurs, and
(b) with respect to Principal Prepayments in part, the calendar
month prior to
such Remittance Date.
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Prepayment Premium: Any prepayment premium, penalty or charge
collected by
the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with
any voluntary Principal Prepayment in Full pursuant to the terms
of the related
Mortgage Note.
Principal Distribution Amount: For any Distribution Date, the
sum of (i)
the Group 1 Principal Distribution Amount for such Distribution
Date and (ii)
the Group 2 Principal Distribution Amount for such Distribution
Date
Principal Prepayment: Any partial payment or other recovery of
principal
on a Mortgage Loan (including upon liquidation of a Mortgage
Loan) which is
received in advance of its scheduled Due Date, excluding any
Prepayment Premium
and which is not accompanied by an amount of interest
representing scheduled
interest due on any date or dates in any month or months
subsequent to the month
of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor
of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution
Date, the
amount equal to the sum of the following amounts (without
duplication) with
respect to the related Due Period: (i) each scheduled payment of
principal on a
Mortgage Loan due during such Due Period and received by the
Servicer on or
prior to the Determination Date or advanced by the Servicer
prior to the related
Remittance Date (including the portion of Insurance Proceeds or
Condemnation
Proceeds allocable to principal), and all Principal Prepayments
received during
the related Prepayment Period, (ii) the Liquidation Proceeds on
the Mortgage
Loans allocable to principal actually collected by the Servicer
during the
related Prepayment Period, (iii) the portion of the purchase
price allocable to
principal with respect to each Deleted Mortgage Loan, the
repurchase obligation
for which arose during the related Prepayment Period, that was
repurchased
during the period from the prior Distribution Date through the
Remittance Date
for the current Distribution Date, (iv) the principal portion of
all
Substitution Adjustment Amounts with respect to the
substitutions of Mortgage
Loans that occur during the calendar month in which such
Distribution Date
occurs and (v) the allocable portion of the proceeds received
with respect to
the termination of the Trust Fund (to the extent such proceeds
relate to
principal), less any amounts payable or reimbursable to the
Servicer, the Master
Servicer, the Trust Administrator or the Trustee hereunder on
such Distribution
Date to the extent not already reimbursed or paid from the Group
1 Interest
Remittance Amount or the Group 2 Interest Remittance Amount.
Private Certificates: As defined in the Preliminary
Statement.
Prospectus Supplement: The Prospectus Supplement, dated February
[ ],
2005, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreement: The Mortgage Loan Purchase Agreement, dated
as of
February 1, 2005, by and between Fremont and the Depositor.
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Rating Agency: Each of the Rating Agencies specified in the
Preliminary
Statement. If such organization or a successor is no longer in
existence,
"Rating Agency" shall be such nationally recognized statistical
rating
organization, or other comparable Person, as is designated by
the Depositor,
notice of which designation shall be given to the Trustee.
References herein to
a given rating or rating category of a Rating Agency shall mean
such rating
category without giving effect to any modifiers. For purposes of
Section
10.05(c), the addresses for notices to each Rating Agency shall
be the address
specified therefor in the definition corresponding to the name
of such Rating
Agency, or such other address as either such Rating Agency may
hereafter furnish
to the Depositor and the Servicer.
Realized Loss Percentage: For purposes of the Servicer
Termination Test
and the Servicer Enhanced Review Test, the percentage produced
by the following
calculation: (i) (a) the aggregate amount of cumulative Realized
Losses incurred
on the Mortgage Loans since the Cut-off Date through the last
day of the related
Due Period, minus (b) any amount received with respect to
Realized Losses on the
Mortgage Loans subsequent to a Final Recovery Determination
being made with
respect to the Mortgage Loans, divided by (ii) the aggregate
Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date; provided
however, that for
purposes of this definition, the term "Realized Losses" shall
not include Debt
Service Reductions or Deficient Valuations.
Realized Losses: With respect to any date of determination and
any
Liquidated Mortgage Loan, the amount, if any, by which (a) the
unpaid principal
balance of such Liquidated Mortgage Loan together with accrued
and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with
respect thereto net
of the expenses incurred by the Servicer in connection with the
liquidation of
such Liquidated Mortgage Loan and net of any amount of
unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business
on the Business Day immediately preceding such Distribution
Date; provided,
however, that for any Certificate issued in definitive form, the
Record Date
shall be the close of business on the last day of the month
immediately
preceding the related Distribution Date (or if such day is not a
Business Day,
on the immediately preceding Business Day).
Reference Bank: As defined in Section 4.04.
Regular Certificates: As defined in the Preliminary
Statement.
Relief Act Interest Shortfall: With respect to any Distribution
Date and
any Mortgage Loan, any reduction in the amount of interest
collectible on such
Mortgage Loan for the most recently ended Due Period as a result
of the
application of the Servicemembers Civil Relief Act, as amended,
or any similar
state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Code.
REMIC I Interest Loss Allocation Amount: With respect to any
Distribution
Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance
of the Mortgage Loans and
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<PAGE>
related REO Properties then outstanding and (ii) the
Uncertificated REMIC I
Pass-Through Rate for REMIC I Regular Interest LTAA minus the
Marker Rate,
divided by (b) 12.
REMIC I Overcollateralization Target Amount: 1.0% of the
Target
Overcollateralization Amount.
REMIC I Overcollateralized Amount: With respect to any date
of
determination, (i) the aggregate Uncertificated Principal
Balances of the REMIC
I Regular Interests minus (ii) the aggregate of the
Uncertificated Principal
Balances of REMIC I Regular Interest REMIC I Regular Interest
LT1A1, REMIC I
Regular Interest LT1A2, REMIC I Regular Interest LT2A1, REMIC I
Regular Interest
LT2A2, REMIC I Regular Interest LT2A3, REMIC I Regular Interest
LTM1, REMIC I
Regular Interest LTM2, REMIC I Regular Interest LTM3, REMIC I
Regular Interest
LTM4, REMIC I Regular Interest LTM5, REMIC I Regular Interest
LTM6, REMIC I
Regular Interest LTM7, REMIC I Regular Interest LTM8, REMIC I
Regular Interest
LTM9, REMIC I Regular Interest LTM10 and REMIC I Regular
Interest LTP, in each
case as of such date of determination.
REMIC I Principal Loss Allocation Amount: With respect to any
Distribution
Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance
of the Mortgage Loans and related REO Properties then
outstanding and (ii) 1
minus a fraction, the numerator of which is two times the
aggregate of the
Uncertificated Principal Balances of REMIC I Regular Interest
LT1A1, REMIC I
Regular Interest LT1A2, REMIC I Regular Interest LT2A1, REMIC I
Regular Interest
LT2A2, REMIC I Regular Interest LT2A3, REMIC I Regular Interest
LTM1, REMIC I
Regular Interest LTM2, REMIC I Regular Interest LTM3, REMIC I
Regular Interest
LTM4, REMIC I Regular Interest LTM5, REMIC I Regular Interest
LTM6, REMIC I
Regular Interest LTM7, REMIC I Regular Interest LTM8, REMIC I
Regular Interest
LTM9 and REMIC I Regular Interest LTM10 and the denominator of
which is the
aggregate of the Uncertificated Principal Balances of REMIC I
Regular Interest
LT1A1, REMIC I Regular Interest LT1A2, REMIC I Regular Interest
LT2A1, REMIC I
Regular Interest LT2A2, REMIC I Regular Interest LT2A3, REMIC I
Regular Interest
LTM1, REMIC I Regular Interest LTM2, REMIC I Regular Interest
LTM3, REMIC I
Regular Interest LTM4, REMIC I Regular Interest LTM5, REMIC I
Regular Interest
LTM6, REMIC I Regular Interest LTM7, REMIC I Regular Interest
LTM8, REMIC I
Regular Interest LTM9, REMIC I Regular Interest LTM10 and REMIC
I Regular
Interest LTZZ.
REMIC I Regular Interest LTAA: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTAA shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT1A1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LT1A1 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT1A2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LT1A2 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and
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shall be entitled to distributions of principal, subject to the
terms and
conditions hereof, in an aggregate amount equal to its initial
Uncertificated
Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest LT2A1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LT2A1 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT2A2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LT2A2 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT2A3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LT2A3 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM1 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM2 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM3 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM4 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM5 shall accrue
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<PAGE>
interest at the related Uncertificated REMIC I Pass-Through Rate
in effect from
time to time, and shall be entitled to distributions of
principal, subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I Regular Interest LTM3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM6 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM4: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM7 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM5: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM8 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM6: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM9 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM7: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM10 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM8: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in
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REMIC I for purposes of the REMIC Provisions. REMIC I Regular
Interest LTM8
shall accrue interest at the related Uncertificated REMIC I
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions
of principal,
subject to the terms and conditions hereof, in an aggregate
amount equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
REMIC I Regular Interest LTM9: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM9 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM10: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTM10 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTP: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTP shall accrue interest at the related
Uncertificated REMIC I
Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTZZ: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC
Provisions. REMIC I
Regular Interest LTZZ shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interests: REMIC I Regular Interest LTAA, REMIC
I Regular
Interest LT1A1, REMIC I Regular Interest LT1A2, REMIC I Regular
Interest LT2A1,
REMIC I Regular Interest LT2A2, REMIC I Regular Interest LT2A3,
REMIC I Regular
Interest LTM1, REMIC I Regular Interest LTM2, REMIC I Regular
Interest LTM3,
REMIC I Regular Interest LTM4, REMIC I Regular Interest LTM5,
REMIC I Regular
Interest LTM6, REMIC I Regular Interest LTM7, REMIC I Regular
Interest LTM8,
REMIC I Regular Interest LTM9, REMIC I Regular Interest LTM10,
REMIC I Regular
Interest LTP and REMIC I Regular Interest LTZZ.
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REMIC Provisions: Provisions of the federal income tax law
relating to
real estate mortgage investment conduits, which appear at
Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
regulations promulgated thereunder, as the foregoing may be in
effect from time
to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, no later
than
12:00 PM, Central Time on the Business Day immediately preceding
such
Distribution Date.
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount
equivalent to interest (at the Mortgage Interest Rate net of the
Servicing Fee
Rate that would have been applicable to the related Mortgage
Loan had it been
outstanding) on the unpaid principal balance of the Mortgage
Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to
Section 3.15 by
any income from the REO Property treated as a recovery of
principal).
REO Property: A Mortgaged Property acquired by the Trust Fund
through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
Reporting Date: The 18th day of each calendar month or the
immediately
preceding Business Day if the 18th is not a Business Day.
Repurchase Price: With respect to any Mortgage Loan, an amount
equal to
the sum of (i) the unpaid principal balance of such Mortgage
Loan as of the date
of repurchase, (ii) interest on such unpaid principal balance of
such Mortgage
Loan at the Mortgage Interest Rate from the last date through
which interest has
been paid and distributed to the Trustee to the date of
repurchase, (iii) all
unreimbursed Servicing Advances and (iv) all expenses incurred
by the Servicer,
the Trust, the Trust Administrator or the Trustee, as the case
may be, in
respect of a breach or defect, including, without limitation,
(a) expenses
arising out of the Servicer's, the Trust Administrator's or
Trustee's, as the
case may be, enforcement of the Originator's repurchase
obligation, to the
extent not included in clause (iii), and (b) any costs and
damages incurred by
the Trust in connection with any violation by such Mortgage Loan
of any
predatory lending law or abusive lending law.
Request for Release: The Request for Release submitted by the
Servicer to
the Trust Administrator, substantially in the form of Exhibit
J.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee means
any
officer in the Corporate Trust Office with direct responsibility
for the
administration of this Agreement and any other officer to whom a
particular
matter is referred because of such officer's knowledge of and
familiarity with
the particular subject; and when used with respect to the Trust
Administrator
means any vice president, any assistant vice president, any
assistant secretary,
any assistant treasurer, any associate or any other officer of
the Trustee or
the Trust Administrator customarily performing functions similar
to those
performed by any of the above designated officers who at such
time shall be
officers to whom, with respect to a particular matter, such
matter is referred
Fremont 2005-A
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because of such officer's knowledge of and familiarity with the
particular
subject and who shall have direct responsibility for the
administration of this
Agreement.
Rolling Three-Month Delinquency Rate: With respect to any
Distribution
Date, the weighted average of the Delinquency Rates for each of
three calendar
months immediately preceding such Distribution Date; provided,
that with respect
to the first two Distribution Dates, it shall refer to the
preceding one or two
calendar months, as appropriate.
Rule 144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on
any Due Date allocable to principal and/or interest on such
Mortgage Loan which,
unless otherwise specified herein, shall give effect to any
related Debt Service
Reduction and any Deficient Valuation that affects the amount of
the monthly
payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Senior Principal Distribution Amount: With respect to any
Distribution
Date, the sum of the Group 1 Senior Principal Distribution
Amount and Group 2
Senior Principal Distribution Amount, as applicable.
Servicer: Fremont, and if a successor servicer is appointed
hereunder,
such successor servicer.
Servicer Certification: A written certification signed by an
officer of
the Servicer that complies with (i) the Sarbanes-Oxley Act of
2002, as amended
from time to time, and (ii) the February 21, 2003 Statement by
the Staff of the
Division of Corporation Finance of the Securities and Exchange
Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act
Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after
the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement
referred to in
clause (ii) is modified or superseded by any subsequent
statement, rule or
regulation of the Securities and Exchange Commission or any
statement of a
division thereof, or (c) any future releases, rules and
regulations are
published by the Securities and Exchange Commission from time to
time pursuant
to the Sarbanes-Oxley Act of 2002, which in any such case
affects the form or
substance of the required certification and results in the
required
certification being, in the reasonable judgment of the Servicer,
materially more
onerous than the form of the required certification as of the
Closing Date, the
Servicer Certification shall be as agreed to by the Servicer and
the Depositor
following a negotiation in good faith to determine how to comply
with any such
new requirements.
Servicer Enhanced Review Test: With respect to any Distribution
Date, the
Servicer will fail the Servicer Enhanced Review Test if both (i)
the outstanding
rating by Moody's of Fremont as a servicer of residential
mortgage loans is not
"SQ2" or better (including any +/- designation), and (ii) the
Realized Loss
Percentage for the Mortgage Loans exceeds the applicable
percentages set forth
below:
Fremont 2005-A
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<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
------------------------------ ----------
<S> <C>
March 2006 through February 2007 1.50%
March 2007 through February 2008 2.50%
March 2008 through February 2009 3.50%
March 2009 through February 2010 5.25%
March 2010 through February 2011 6.75%
March 2011 and thereafter 7.30%
</TABLE>
Servicer Event of Default: One or more of the events described
in Section
7.01(a).
Servicer Remittance Report: As defined in Section 4.03(d).
Servicer Termination Test: With respect to any Distribution
Date, the
Servicer will fail the Servicer Termination Test if the Realized
Loss Percentage
for the Mortgage Loans exceeds the applicable percentages set
forth below or
such other higher amounts as set by any of the Rating Agencies
with respect to
such Distribution Date:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
------------------------------ ----------
<S> <C>
March 2006 through February 2007 1.75%
March 2007 through February 2008 2.75%
March 2008 through February 2009 3.75%
March 2009 through February 2010 5.50%
March 2010 through February 2012 7.00%
March 2011 through February 2012 8.00%
March 2012 and thereafter 8.00%
</TABLE>
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses
(including legal fees) incurred by the Servicer in the
performance of its
servicing obligations in connection with a default, delinquency
or other
unanticipated event, including, but not limited to, the cost of
(i) the
preservation, restoration, inspection and protection of a
Mortgaged Property,
(ii) any enforcement or judicial proceedings, including
foreclosures and
litigation, in respect of a particular Mortgage Loan, (iii) the
management
(including reasonable fees in connection therewith) and
liquidation of any REO
Property, and (iv) the performance of its obligations under
Sections 3.01, 3.09,
3.13 and 3.15. Servicing Advances also include any reasonable
"out-of-pocket"
costs and expenses (including legal fees) incurred by the
Servicer in connection
with executing and recording instruments of satisfaction, deeds
of reconveyance
or Assignments of Mortgage in connection with any satisfaction
or foreclosures
in respect of any Mortgage Loan to the extent not recovered from
the Mortgagor
or otherwise payable under this Agreement. The Servicer shall
not be required to
make any Nonrecoverable Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and any
Distribution
Date, an amount equal to the product of (i) one-twelfth of the
Servicing Fee
Rate, and (ii) the Stated Principal Balance of such Mortgage
Loan as of the
first day of the calendar month preceding the month in which
such Distribution
Date occurs. Such fee shall be payable monthly, and shall be pro
rated for any
portion of a month during which the Mortgage Loan is serviced by
the Servicer
under this Agreement. The Servicing Fee is payable solely from
the interest
portion (including
Fremont 2005-A
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<PAGE>
recoveries with respect to interest from Liquidation Proceeds,
Insurance
Proceeds, Condemnation Proceeds and proceeds received with
respect to REO
Properties, to the extent permitted by Section 3.11) of such
Scheduled Payment
collected by the Servicer or as otherwise provided under Section
3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by
the Servicer consisting of originals or copies of all documents
in the Mortgage
File which are not delivered to the Trust Administrator in the
Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing Officer: Any officer of the Servicer involved in, or
responsible
for, the administration and servicing of the Mortgage Loans
whose name and
facsimile signature appear on a list of servicing officers
furnished to the
Trustee, the Master Servicer, the Trust Administrator and the
Depositor by the
Servicer on the Closing Date pursuant to this Agreement, as such
list may from
time to time be amended.
Servicing Rights: Any and all of the following: (a) all rights
and
obligations to service the Mortgage Loans; (b) any compensation
for servicing
the Mortgage Loans; (c) any late fees, penalties or similar
payments with
respect to the Mortgage Loans (other than prepayment penalties);
(d) all
agreements or documents creating, defining or evidencing any
such servicing
rights to the extent they relate to such servicing rights; (e)
any interest on
Escrow Accounts allowed by law or other similar payments with
respect to the
Mortgage Loans and any amounts actually collected with respect
thereto; (f) all
accounts and other rights to payment related to any of the
property described in
this paragraph; (g) the right to possess and use any and all
servicing files,
servicing records, data tapes, computer records, or other
information pertaining
to the Mortgage Loans to the extent relating to the past,
present or prospective
servicing of the Mortgage Loans; and (h) all rights, powers and
privileges
incident to any of the foregoing.
Servicing Transfer Costs: All reasonable out-of-pocket costs and
expenses
(including all extraordinary expenses) incurred by the Master
Servicer in
connection with the transfer of servicing from a terminated
Servicer, including,
without limitation, any such costs or expenses associated with
the complete
transfer of all servicing data and the completion, correction or
manipulation of
such servicing data as may be required by the Master Servicer to
correct any
errors or insufficiencies in the servicing data or otherwise to
enable the
Master Servicer (or any successor Servicer appointed pursuant to
Section 7.02)
to service the Mortgage Loans properly and effectively.
Six-Month LIBOR Index: With respect to each applicable
Adjustable Rate
Mortgage Loan, the rate as determined on the basis of rates at
which six-month
U.S. dollar deposits are offered to prime banks in the London
interbank market
on such date as provided in the related Mortgage Note.
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with
respect to which
any portion of a Scheduled Payment is, as of the last day of the
prior Due
Period, two months or
Fremont 2005-A
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<PAGE>
more past due (without giving effect to any grace period), each
Mortgage Loan in
foreclosure, all REO Property and each Mortgage Loan for which
the Mortgagor has
filed for bankruptcy.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The
McGraw-Hill Companies, Inc. If Standard & Poor's is
designated as a Rating
Agency in the Preliminary Statement, for purposes of Section
10.05(b) the
address for notices to Standard & Poor's shall be Standard
& Poor's, 55 Water
Street, New York, New York 10041, Attention: Residential
Mortgage Surveillance
Group - Fremont 2005-A, or such other address as Standard &
Poor's may hereafter
furnish to the Depositor, the Servicer, the Master Servicer, the
Trust
Administrator and the Trustee.
Start-up Day: As defined in Section 11.01(b).
Stated Principal Balance: As to each Mortgage Loan and as of any
date of
determination, (i) the principal balance of the Mortgage Loan at
the Cut-off
Date after giving effect to payments of principal due on or
before such date,
minus (ii) all amounts previously remitted to the Trustee with
respect to the
related Mortgage Loan representing payments or recoveries of
principal including
advances in respect of scheduled payments of principal. For
purposes of any
Distribution Date, the Stated Principal Balance of any Mortgage
Loan will give
effect to any scheduled payments of principal received by the
Servicer on or
prior to the related Determination Date or advanced by the
Servicer for the
related Remittance Date and any unscheduled principal payments
and other
unscheduled principal collections received during the related
Prepayment Period.
Stepdown Date: The earlier to occur of (a) the date on which the
aggregate
Class Certificate Balances of the Senior Certificates have been
reduced to zero,
and (b) the later to occur of (i) the Distribution Date in March
2008, and (ii)
the first Distribution Date on which the Credit Enhancement
Percentage
(calculated for this purpose only after taking into account
distributions of
principal on the Mortgage Loans but prior to distribution of the
Group 1
Principal Distribution Amount and the Group 2 Principal
Distribution Amount to
the holders of the Certificates then entitled to distributions
of principal on
such Distribution Date) is greater than or equal to 46.10%
Subordinated Certificates: As specified in the Preliminary
Statement.
Subsequent Recovery: Amounts recovered by the Servicer in
respect of a
liquidated Mortgage Loan in regard to which a Realized Loss has
occurred.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Originator
for a Deleted Mortgage Loan which must, on the date of such
substitution, as
confirmed in a Request for Release, substantially in the form of
Exhibit J, (i)
have a Stated Principal Balance, after deduction of the
principal portion of the
Scheduled Payment due in the month of substitution, not
Fremont 2005-A
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<PAGE>
in excess of the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) be
accruing interest at a rate no lower than and not more than
1.00% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a
Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (iv) have a
remaining term to
maturity no greater than (and not more than one year less than
that of) the
Deleted Mortgage Loan; and (v) comply with each representation
and warranty set
forth in Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant
to Section 2.03(g).
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on
the Bridge
Telerate Service (or such other page as may replace that page on
that service
for displaying comparable rates or prices).
Termination Price: As defined in Section 9.01.
30-Day Delinquency: Each Mortgage Loan with respect to which any
portion
of a Scheduled Payment is, as of the last day of the prior Due
Period, one month
past due (without giving effect to any grace period).
Transfer: Any direct or indirect transfer or sale of any
Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a Trigger
Event
exists if (i) the Rolling Three Month Delinquency Rate as of the
last day of the
related Due Period, equals or exceeds 34.70% of the Credit
Enhancement
Percentage as of the last day of the prior Due Period or (ii)
the quotient
(expressed as a percentage) of (x) the aggregate amount of
Realized Losses
incurred since the Cut-off Date through the last day of the
related Prepayment
Period divided by (y) the Cut-off Date Pool Principal Balance,
exceeds the
applicable percentages set forth below with respect to such
Distribution Date:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN LOSS PERCENTAGE
--------------------------------
---------------------------------------------
<S> <C>
March 2008 through February 2009 3.50% for the first month, plus
an additional
1/12th of 1.75% for each month thereafter
March 2009 through February 2010 5.25% for the first month, plus
an additional
1/12th of 1.50% for each month thereafter
March 2010 through February 2011 6.75% for the first month, plus
an additional
1/12th of 0.55% for each month thereafter
March 2011 and thereafter 7.30%
</TABLE>
Trust: The express trust created hereunder in Section
2.01(c).
Fremont 2005-A
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<PAGE>
Trust Administration Fee: As to each Mortgage Loan and any
Distribution
Date, an amount equal to the product of (i) one-twelfth of the
Trust
Administration Fee Rate, and (ii) the Stated Principal Balance
of such Mortgage
Loan as of the first day of the calendar month preceding the
month in which such
Distribution Date occurs.
Trust Administration Fee Rate: 0.002% per annum.
Trust Administrator: Wells Fargo Bank, N.A., and its successors
in
interest and, if a successor trust administrator is appointed
hereunder, such
successor.
Trust Fund: The corpus of the trust created hereunder consisting
of (i)
the Mortgage Loans and all interest and principal received on or
with respect
thereto after the related Cut-off Date, other than such amounts
which were due
on the Mortgage Loans on or before the related Cut-off Date;
(ii) the Collection
Account, Net WAC Rate Carryover Reserve Account, the
Distribution Account, and
all amounts deposited therein pursuant to the applicable
provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has
been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the
Certificate Cap
Agreement, and (v) all proceeds of the conversion, voluntary or
involuntary, of
any of the foregoing.
Trust REMIC: Either of REMIC I and REMIC II.
Trustee: HSBC Bank USA, National Association, and its successors
in
interest and, if a successor trustee is appointed hereunder,
such successor.
Uncertificated Accrued Interest: With respect to each REMIC I
Regular
Interest on each Distribution Date, an amount equal to one
month's interest at
the related Uncertificated REMIC I Pass-Through Rate on the
Uncertificated
Principal Balance of such REMIC I Regular Interest. In each
case, Uncertificated
Accrued Interest will be reduced by any Prepayment Interest
Shortfalls and
Relief Act Interest Shortfalls (allocated to such REMIC I
Regular Interests
based on their respective entitlements to interest irrespective
of any
Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls for such
Distribution Date).
Uncertificated Principal Balance: The amount of any REMIC I
Regular
Interest outstanding as of any date of determination. As of the
Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest
shall equal the
amount set forth in the Preliminary Statement hereto as its
initial
uncertificated balance. On each Distribution Date, the
Uncertificated Principal
Balance of each REMIC I Regular Interest shall be reduced by all
distributions
of principal made on such REMIC I Regular Interest on such
Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and
appropriate,
shall be further reduced on such Distribution Date by Realized
Losses as
provided in Section 4.08. The Uncertificated Balance of REMIC I
Regular Interest
LTZZ shall be increased by interest deferrals as provided in
Section 4.08. The
Uncertificated Balance of each REMIC I Regular Interest shall
never be less than
zero.
Uncertificated REMIC I Pass-Through Rate: With respect to REMIC
I Regular
Interest LTAA, REMIC I Regular Interest LT1A1, REMIC I Regular
Interest LT1A2,
REMIC I Regular Interest LT2A1, REMIC I Regular Interest LT2A2,
REMIC I Regular
Interest LT2A3, REMIC I
Fremont 2005-A
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<PAGE>
Regular Interest LTM1, REMIC I Regular Interest LTM2, REMIC I
Regular Interest
LTM3, REMIC I Regular Interest LTM4, REMIC I Regular Interest
LTM5, REMIC I
Regular Interest LTM6, REMIC I Regular Interest LTM7, REMIC I
Regular Interest
LTM8, REMIC I Regular Interest LTM9, REMIC I Regular Interest
LTM10, REMIC I
Regular Interest LTZZ, and REMIC I Regular Interest LTP, the Net
WAC Rate.
Underwriters' Exemption: Any exemption listed in footnote 1 of,
and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed.
Reg. 54487 (2002),
or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to
the
Purchase Agreement.
Unpaid Interest Amounts: As of any Distribution Date and any
Class of
Certificates, the sum of (a) the portion of the Current Interest
from prior
Distribution Dates remaining unpaid and (b) interest on such
unpaid amount at
the applicable Pass-Through Rate (to the extent permitted by
applicable law).
U.S. Person: (i) A citizen or resident of the United States;
(ii) a
corporation (or entity treated as a corporation for tax
purposes) created or
organized in the United States or under the laws of the United
States or of any
State thereof, including, for this purpose, the District of
Columbia; (iii) a
partnership (or entity treated as a partnership for tax
purposes) organized in
the United States or under the laws of the United States or of
any state
thereof, including, for this purpose, the District of Columbia
(unless provided
otherwise by future Treasury regulations); (iv) an estate whose
income is
includible in gross income for United States income tax purposes
regardless of
its source; or (v) a trust, if a court within the United States
is able to
exercise primary supervision over the administration of the
trust and one or
more U.S. Persons have authority to control all substantial
decisions of the
trust. Notwithstanding the last clause of the preceding
sentence, to the extent
provided in Treasury regulations, certain trusts in existence on
August 20,
1996, and treated as U.S. Persons prior to such date, may elect
to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates
which is allocated to any Certificate. As of any date of
determination, (a) 1%
of all Voting Rights shall be allocated to the Class C
Certificates, if any
(such Voting Rights to be allocated among the holders of
Certificates of each
such Class in accordance with their respective Percentage
Interests), (b) 1% of
all Voting Rights shall be allocated to the Class P
Certificates, if any, and
(c) the remaining Voting Rights shall be allocated among Holders
of the
remaining Classes of Certificates in proportion to the
Certificate Balances of
their respective Certificates on such date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, hereby
sells, transfers, assigns, sets over and otherwise conveys to
the Trustee for
the benefit of the
Fremont 2005-A
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<PAGE>
Certificateholders, without recourse, all the right, title and
interest of the
Depositor in and to the Trust Fund, together with all rights of
the Depositor
under the Certificate Cap Agreement (if any), and the Trustee,
on behalf of the
Trust, hereby accepts the Trust Fund.
(a) In connection with the transfer and assignment of each
Mortgage Loan,
the Depositor has delivered or caused to be delivered to the
Trustee or the
Trust Administrator, as applicable, for the benefit of the
Certificateholders,
the following documents or instruments with respect to each
Mortgage Loan so
assigned:
(i) the original Mortgage Note bearing all intervening
endorsements
showing a complete chain of endorsement from the originator to
the last
endorsee, endorsed "Pay to the order of _________, without
recourse" and
signed (which may be by facsimile signature) in the name of the
last
endorsee by an authorized officer. To the extent that there is
no room on
the face of the Mortgage Notes for endorsements, the endorsement
may be
contained on an allonge, if state law so allows and the Trustee
is so
advised by the Depositor that state law so allows;
(ii) the original of any guarantee executed in connection with
the
Mortgage Note;
(iii) with respect to each Mortgage Loan, the original Mortgage
with
evidence of recording thereon or a certified true copy of such
Mortgage
submitted for recording. If in connection with any Mortgage
Loan, the
Originator cannot deliver or cause to be delivered the original
Mortgage
with evidence of recording thereon on or prior to the Closing
Date because
of a delay caused by the public recording office where such
Mortgage has
been delivered for recordation or because such Mortgage has been
lost or
because such public recording office retains the original
recorded
Mortgage, the Originator (to the extent that it has not
previously
delivered the same to the Depositor, the Trustee or the
Trust
Administrator) shall deliver or cause to be delivered to the
Trustee or
Trust Administrator, (1) a photocopy of such Mortgage, certified
by the
Originator (or certified by the title company, escrow agent, or
closing
attorney) to be a true and complete copy of such Mortgage
dispatched to
the appropriate public recording office for recordation; and (2)
upon
receipt thereof by the Originator, the original recorded
Mortgage, or, in
the case of a Mortgage where a public recording office retains
the
original recorded Mortgage or in the case where a Mortgage is
lost after
recordation in a public recording office, a copy of such
Mortgage
certified by such public recording office to be a true and
complete copy
of the original recorded Mortgage;
(iv) the originals of all assumption, modification,
consolidation or
extension agreements (if provided), with evidence of recording
thereon or
a certified true copy of such agreement submitted for
recording;
(v) except with respect to each MERS Designated Mortgage Loan,
the
original Assignment of Mortgage for each Mortgage Loan endorsed
in blank
and in recordable form;
Fremont 2005-A
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<PAGE>
(vi) with respect to each Mortgage Loan, the originals of
all
intervening Assignments of Mortgage (if any) evidencing a
complete chain
of assignment from the applicable originator (or MERS with
respect to each
MERS Designated Mortgage Loan) to the last endorsee with
evidence of
recording thereon, or if any such intervening assignment has not
been
returned from the applicable recording office or has been lost
or if such
public recording office retains the original recorded
Assignments of
Mortgage, the Originator (to the extent that it has not
previously
delivered the same to the Depositor, the Trustee or the
Trust
Administrator) shall deliver or cause to be delivered to the
Trustee or
the Trust Administrator, (1) a photocopy of such intervening
assignment,
certified by the Originator (or certified by the title company,
escrow
agent, or closing attorney) to be a complete copy of such
intervening
Assignment of Mortgage dispatched to the appropriate public
recording
office for recordation upon receipt thereof by the Originator,
and (2) the
original recorded intervening assignment or in the case where
an
intervening assignment is lost after recordation in a public
recording
office, a copy of such intervening assignment certified by such
public
recording office to be a true and complete copy of the original
recorded
intervening assignment;
(vii) the original or duplicate lender's title policy and any
riders
thereto or, any one of an original title binder, an original or
copy of
the preliminary title report or an original or copy of the
title
commitment, and if, copies then certified by the title
company;
(viii) a security agreement, chattel mortgage or equivalent
document
executed in connection with the Mortgage (if provided); and
(ix) original powers of attorney, if applicable, with evidence
of
recording thereon, if required.
Each Mortgage Loan for which a Mortgage Note is missing shall be
evidenced
by a lost note affidavit as of the Closing Date. In the event,
for purposes of
the Closing Date, one or more lost note affidavits are provided
to cover
multiple missing Mortgage Notes, the Originator shall deliver to
the Trustee or
the Trust Administrator the applicable individual lost note
affidavits within
ten (10) Business Days of the Closing Date. If the Originator
fails to deliver
the required individual lost note affidavits within the
specified period of
time, the Trustee or the Trust Administrator shall notify the
Originator to take
such remedial actions, including, without limitation, the
repurchase by the
Originator of such Mortgage Loan within 30 days of the Closing
Date.
The Originator shall deliver to the Trustee or the Trust
Administrator the
applicable recorded document promptly upon receipt from the
respective recording
office but in no event later than 150 days from the Closing
Date.
If any Mortgage has been recorded in the name of Mortgage
Electronic
Registration System, Inc. ("MERS") or its designee, no
Assignment of Mortgage in
favor of the Trustee will be required to be prepared or
delivered and instead,
the Servicer shall take all reasonable actions as are necessary
at the expense
of the Depositor to cause the Trustee to be shown as the owner
of
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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.
From time to time, the Originator shall forward with respect to
the
Mortgage Loans, to the Trustee or the Trust Administrator
additional original
documents, and additional documents evidencing an assumption,
modification,
consolidation or extension of a Mortgage Loan approved by the
Originator in
accordance with the terms of this Agreement. All such mortgage
documents held by
the Trustee or the Trust Administrator as to each Mortgage Loan
shall constitute
the "Custodial File."
The requirements of this paragraph relate only to Mortgage Loans
that are
not MERS Designated Mortgage Loans. On or prior to the Closing
Date, the
Originator shall deliver to the Trustee or Trust Administrator
Assignments of
Mortgages, in blank, for each Mortgage Loan (except with respect
to each MERS
Designated Mortgage Loan). The Originator shall cause such
Assignments of
Mortgage with completed recording information to be provided to
the Trustee or
the Trust Administrator in a reasonably acceptable manner. No
later than thirty
(30) Business Days following the later of the Closing Date and
the date of
receipt by the Servicer of the fully completed Assignments of
Mortgages in
recordable form, the Servicer shall promptly submit or cause to
be submitted for
recording, at the expense of the Originator at no expense to the
Trust Fund, the
Master Servicer, the Trust Administrator, the Trustee or the
Depositor in the
appropriate public office for real property records, each
Assignment of Mortgage
referred to in Section 2.01(a)(vi). Notwithstanding the
foregoing, however, for
administrative convenience and facilitation of servicing and to
reduce closing
costs, the Assignments of Mortgage shall not be required to be
completed and
submitted for recording with respect to any Mortgage Loan if the
Trustee, the
Trust Administrator and each Rating Agency have received an
opinion of counsel,
satisfactory in form and substance to the Trustee and Trust
Administrator and
each Rating Agency, to the effect that the recordation of such
Assignments of
Mortgage in any specific jurisdiction is not necessary to
protect the Trustee's
interest in the related Mortgage Note. If the Assignment of
Mortgage is to be
recorded, the Mortgage shall be assigned by the Originator at
the Originator's
expense to "HSBC Bank USA, National Association, as trustee
under the Pooling
and Servicing Agreement dated as of February 1, 2005, Fremont
Home Loan Trust
2005-A." In the event that any such assignment is lost or
returned unrecorded
because of a defect therein, the Originator shall promptly
prepare a substitute
assignment to cure such defect and thereafter cause each such
assignment to be
duly recorded.
On or prior to the Closing Date, the Depositor shall deliver to
the
Trustee, the Servicer and the Trust Administrator a copy of the
Data Tape
Information in an electronic, machine readable medium in a form
mutually
acceptable to the Depositor, the Servicer, the Master Servicer,
the Trust
Administrator and the Trustee. Within ten (10) Business Days of
the Closing
Date, the Depositor shall deliver a copy of the complete
Mortgage Loan Schedule
to the Trustee, the Master Servicer, the Trust Administrator and
the Servicer.
In the event, with respect to any Mortgage Loans, that such
original or
copy of any document submitted for recordation to the
appropriate public
recording office is not so delivered to the Trustee or the Trust
Administrator
within 150 days following the Closing Date, and in the event
that the Originator
does not cure such failure within 30 days of discovery or
receipt of written
notification of such failure from the Depositor, the related
Mortgage Loan
shall, upon the
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request of the Depositor, be repurchased by the Originator at
the price and in
the manner specified in Section 2.03. The foregoing repurchase
remedy shall not
apply in the event that the Originator cannot deliver such
original or copy of
any document submitted for recordation to the appropriate public
recording
office within the specified period due to a delay caused by the
recording office
in the applicable jurisdiction; provided, that the Originator
shall instead
deliver a recording receipt of such recording office or, if such
recording
receipt is not available, an officer's certificate of an officer
of the
Originator confirming that such document has been accepted for
recording.
Notwithstanding anything to the contrary contained in this
Section 2.01,
in those instances where the public recording office retains or
loses the
original Mortgage or assignment after it has been recorded, the
obligations of
the Originator shall be deemed to have been satisfied upon
delivery by the
Originator to the Trustee or the Trust Administrator prior to
the Closing Date
of a copy of such Mortgage or assignment, as the case may be,
certified (such
certification to be an original thereof) by the public recording
office to be a
true and complete copy of the recorded original thereof.
(b) The Depositor does hereby establish, pursuant to the
further
provisions of this Agreement and the laws of the State of New
York, an express
trust (the "Trust") to be known, for convenience, as "Fremont
Home Loan Trust
2005-A" and HSBC Bank USA, N.A. is hereby appointed as Trustee
in accordance
with the provisions of this Agreement.
(c) The Trust shall have the capacity, power and authority, and
the
Trustee on behalf of the Trust is hereby authorized, to accept
the sale,
transfer, assignment, set over and conveyance by the Depositor
to the Trust of
all the right, title and interest of the Depositor in and to the
Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to
Section 2.01(a)
and, solely in its capacity as Trustee on behalf of the
Certificateholders, to
enter into the Certificate Cap Agreement.
Section 2.02. Acceptance by the Trustee or Trust Administrator
of the
Mortgage Loans.
The Trustee or the Trust Administrator on its behalf
acknowledges receipt
of the documents identified in its initial certification in the
form annexed
hereto as Exhibit E (the "Initial Certification"), and declares
that it, or the
Trust Administrator on its behalf, holds and will hold such
documents and the
other documents delivered to it pursuant to Section 2.01, and
that it holds or
will hold such other assets as are included in the Trust Fund,
in trust for the
exclusive use and benefit of all present and future
Certificateholders. Each of
the Trustee and the Trust Administrator, as applicable, on its
behalf
acknowledges that it will maintain possession of the related
Mortgage Notes in
any of the states of Minnesota, California or Utah, unless
otherwise permitted
by the Rating Agencies.
Prior to and as a condition to the Closing, the Trustee shall
deliver, or
cause the Trust Administrator to deliver, via facsimile (with
original to follow
the next Business Day) to the Depositor, the Master Servicer and
the Servicer
the Initial Certification prior to the Closing Date, or as the
Depositor agrees,
on the Closing Date, certifying receipt of a Mortgage Note and
Assignment of
Mortgage for each Mortgage Loan with any exceptions thereon. The
Trustee or
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the Trust Administrator, as applicable, shall not be responsible
to verify the
validity, sufficiency or genuineness of any document in any
Custodial File.
On the Closing Date, the Trustee or the Trust Administrator,
as
applicable, shall ascertain that all documents required to be
reviewed by it are
in its possession, and shall deliver to the Depositor, the
Master Servicer and
the Servicer the Initial Certification and shall deliver to the
Depositor and
the Servicer a Document Certification and Exception Report, in
the form annexed
hereto as Exhibit F, within 90 days after the Closing Date to
the effect that,
as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any
Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such
certification as an exception and not covered by such
certification): (i) all
documents required to be received by it are in its possession;
(ii) such
documents have been reviewed by it and appear regular on their
face and relate
to such Mortgage Loan; (iii) based on its examination and only
as to the
foregoing documents, the information set forth in items (i),
(ii) and (xii) of
the Mortgage Loan Schedule and items (1), (2), (3) and (13) of
the Data Tape
Information respecting such Mortgage Loan is correct; and (iv)
each Mortgage
Note has been endorsed as provided in Section 2.01 of this
Agreement. The
Trustee or Trust Administrator, as applicable, shall not be
responsible to
verify the validity, sufficiency or genuineness of any document
in any Custodial
File.
The Trustee or the Trust Administrator, as applicable, shall
retain
possession and custody of each Custodial File in accordance with
and subject to
the terms and conditions set forth herein. The Servicer shall
promptly deliver
to the Trustee or the Trust Administrator, as applicable, upon
the execution or
receipt thereof, the originals of such other documents or
instruments
constituting the Custodial File as come into the possession of
the Servicer from
time to time.
The Originator shall deliver to the Servicer copies of all
trailing
documents required to be included in the Custodial File at the
same time the
original or certified copies thereof are delivered to the
Trustee or the Trust
Administrator, as applicable, including but not limited to such
documents as the
title insurance policy and any other Mortgage Loan documents
upon return from
the public recording office. The documents shall be delivered by
the Originator
at the Originator's expense to the Servicer and in no event
shall the Servicer
be responsible for such expense.
Section 2.03. Representations, Warranties and Covenants of the
Originator
and the Servicer.
(a) The Originator hereby makes the representations and
warranties set
forth in Schedule IV hereto to the Depositor, the Trust
Administrator and the
Trustee as of the Closing Date.
(b) It is understood and agreed that the representations and
warranties
set forth in this Section 2.03 shall survive the transfer of the
Mortgage Loans
by the Depositor to the Trustee, and shall inure to the benefit
of the
Depositor, the Trust Administrator and the Trustee
notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or
Assignment of
Mortgage or the examination or failure to examine any Mortgage
File. Upon
discovery by any of the Originator, the Depositor, the Trustee,
the Trust
Administrator, the Master Servicer or
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the Servicer of a breach of any of the foregoing representations
and warranties,
the party discovering such breach shall give prompt written
notice to the
others.
(c) Within 30 days of the earlier of either discovery by or
notice to the
Originator that any Mortgage Loan does not conform to the
requirements as
determined in the Trustee's or the Trust Administrator's review
of the related
Custodial File or within 60 days of the earlier of either
discovery by or notice
to the Originator of any breach of a representation or warranty
set forth in
Section 2.03(b), that materially and adversely affects the value
of any Mortgage
Loan or the interest of the Trustee or the Certificateholders
therein, the
Originator shall use its best efforts to cause to be remedied a
material defect
in a document constituting part of a Mortgage File or promptly
to cure such
breach in all material respects and, if such defect or breach
cannot be
remedied, the Originator shall, (i) if such 30- or 60-day
period, as applicable,
expires prior to the second anniversary of the Closing Date,
remove such related
Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund
and substitute in
its place a Substitute Mortgage Loan, in the manner and subject
to the
conditions set forth in this Section 2.03, or (ii) repurchase
such Mortgage Loan
at the Repurchase Price; provided, however, that any such
substitution pursuant
to clause (i) above shall not be effected prior to the delivery
to the Trustee
and the Trust Administrator of the Opinion of Counsel required
by Section 2.04,
if any, and a Request for Release substantially in the form of
Exhibit J, and
the Mortgage File for any such Substitute Mortgage Loan;
provided, further, that
with respect to any representations and warranties which are
made to the best of
the Originator's knowledge, if it is discovered by the
Originator, the Servicer,
the Master Servicer, the Trust Administrator, the Depositor or
the Trustee that
the substance of such representation and warranty is inaccurate
and such
inaccuracy materially and adversely affects the value of the
related Mortgage
Loans or materially and adversely affects the interests of the
Trustee or the
Certificateholders therein or such inaccuracy materially and
adversely affects
the value of the related Mortgage Loan or materially and
adversely affects the
interests of the Trustee or the Certificateholders therein in
the case of a
representation and warranty relating to a particular Mortgage
Loan,
notwithstanding the Originator's lack of knowledge with respect
to the substance
of such representation and warranty, such inaccuracy shall be
deemed a breach of
the applicable representation and warranty. In the event that a
breach which
materially and adversely affects the value of the related
Mortgage Loan or
Mortgage Loans, as the case may be, or the interests of the
Trustee or the
Certificateholders therein, shall involve any representation or
warranty set
forth in Schedule IV, and such breach cannot be cured within 60
days of the
earlier of either discovery by or notice to the Originator of
such breach, all
of the Mortgage Loans shall, at the Depositor's option, be
repurchased by the
Originator at the Repurchase Price. Notwithstanding the
foregoing, a breach
which causes a Mortgage Loan not to constitute a "qualified
mortgage" within the
meaning of Section 860G(a)(3) of the Code, or by the Originator
of any of the
representations and warranties set forth in clauses I(tt), I(uu)
or I(lll) of
Schedule IV, in each case, will be deemed automatically to
materially and
adversely affect the value of such Mortgage Loan and the
interests of the
Trustee and Certificateholders in such Mortgage Loan. In the
event that the
Trustee or the Trust Administrator receives notice of a breach
by the Originator
of any of the representations and warranties set forth in
clauses I(tt), I(uu)
or I(lll) of Schedule IV, the Trustee shall give notice of such
breach to the
Originator and request the Originator to repurchase the Mortgage
Loan at the
Repurchase Price within sixty (60) days of the Originator's
receipt of such
notice. The
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Originator shall repurchase each such Deleted Mortgage Loan
within 60 days of
the earlier of discovery or receipt of notice with respect to
each such Deleted
Mortgage Loan.
(d) With respect to any Substitute Mortgage Loan or Loans, the
Originator
shall deliver to the Trustee or the Trust Administrator for the
benefit of the
Certificateholders, the Mortgage Note, the Mortgage, the related
assignment of
the Mortgage, and such other documents and agreements as are
required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned
as required by
Section 2.01. No substitution is permitted to be made in any
calendar month
after the Determination Date for such month. Scheduled Payments
due with respect
to Substitute Mortgage Loans in the Due Period of substitution
shall not be part
of the Trust Fund and will be retained by the Originator on the
next succeeding
Distribution Date. For the Due Period of substitution,
distributions to
Certificateholders will include the Scheduled Payment due on any
Deleted
Mortgage Loan for such Due Period and thereafter the Originator
shall be
entitled to retain all amounts received in respect of such
Deleted Mortgage
Loan.
(e) In connection with any repurchase or substitution of a
Mortgage Loan
pursuant to this Section 2.03, the Servicer shall, based on
information provided
by the Originator, amend the Mortgage Loan Schedule for the
benefit of the
Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the
substitution of the Substitute Mortgage Loan or Loans and the
Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee, the
Trust
Administrator and the Master Servicer. Upon such substitution,
the Substitute
Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all
respects, and the Originator shall be deemed to have made with
respect to such
Substitute Mortgage Loan or Loans, as of the date of
substitution, the
representations and warranties made pursuant to Section 2.03(b)
with respect to
such Mortgage Loan. Upon any such substitution and the deposit
to the Collection
Account of the amount required to be deposited therein in
connection with such
substitution as described in the following paragraph, the
Trustee or the Trust
Administrator, as applicable, shall release the Mortgage File
held for the
benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the
Originator and shall execute and deliver at the direction of the
Originator such
instruments of transfer or assignment prepared by the Originator
in each case
without recourse, as shall be necessary to vest title in the
Originator or its
designee, the Trustee's interest in any Deleted Mortgage Loan
substituted for
pursuant to this Section 2.03.
(f) For any month in which the Originator substitutes one or
more
Substitute Mortgage Loans for one or more Deleted Mortgage
Loans, the Servicer
will determine the amount (if any) by which the aggregate unpaid
principal
balance of all such Substitute Mortgage Loans as of the date of
substitution is
less than the aggregate Stated Principal Balance of all such
Deleted Mortgage
Loans (after application of the scheduled principal portion of
the Scheduled
Payments due in the Due Period of substitution). The amount of
such shortage
(the "Substitution Adjustment Amount") plus an amount equal to
the aggregate of
any unreimbursed Advances with respect to such Deleted Mortgage
Loans shall be
remitted by the Originator to the Servicer for deposit into the
Collection
Account on or before the next Remittance Date.
(g) In addition to such repurchase or substitution obligations,
the
Originator shall indemnify the Depositor, any of its Affiliates,
the Servicer,
the Master Servicer, the Trust Administrator and the Trustee and
hold such
parties harmless against any losses, damages, penalties, fines,
forfeitures,
reasonable and necessary legal fees and related costs,
judgments, and
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other costs and expenses resulting from any claim, demand,
defense or assertion
based on or grounded upon, or resulting from, a breach by the
Originator of any
of its representations and warranties contained in this
Agreement.
(h) In the event that a Mortgage Loan shall have been
repurchased pursuant
to this Agreement, the proceeds from such repurchase shall be
deposited in the
Collection Account by the Servicer pursuant to Section 3.10 on
or before the
next Remittance Date and upon such deposit of the Repurchase
Price, the delivery
of the Opinion of Counsel required by Section 2.04, if
applicable, and receipt
of a Request for Release in the form of Exhibit J hereto, the
Trustee or the
Trust Administrator, as applicable, shall release the related
Custodial File
held for the benefit of the Certificateholders to such Person as
directed by the
Servicer, and the Trustee shall execute and deliver at such
Person's direction
such instruments of transfer or assignment prepared by such
Person, in each case
without recourse, as shall be necessary to transfer title from
the Trustee. It
is understood and agreed that the obligation under this
Agreement of any Person
to cure, repurchase or replace any Mortgage Loan as to which a
breach has
occurred and is continuing, together with any related
indemnification
obligations, shall constitute the sole remedy against such
Persons respecting
such breach available to Certificateholders, the Depositor, the
Servicer, the
Master Servicer, the Trust Administrator or the Trustee on their
behalf.
The representations and warranties made pursuant to this Section
2.03 shall
survive delivery of the respective Custodial Files to the
Trustee or Trust
Administrator for the benefit of the Certificateholders.
Section 2.04. Delivery of Opinion of Counsel in Connection
with
Substitution; Non-Qualified Mortgages.
(a) Notwithstanding any contrary provision of this Agreement,
no
substitution pursuant to Section 2.03 shall be made more than 90
days after the
Closing Date unless the Originator delivers to the Trustee and
the Trust
Administrator an Opinion of Counsel, which Opinion of Counsel
shall not be at
the expense of either the Trustee, the Trust Administrator or
the Trust Fund,
addressed to the Trustee and the Trust Administrator, to the
effect that such
substitution will not (i) result in the imposition of the tax on
"prohibited
transactions" on any Trust REMIC or contributions after the
Start-up Day, as
defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively or (ii)
cause any Trust REMIC to fail to qualify as a REMIC at any time
that any
Certificates are outstanding.
(b) Upon discovery by the Depositor, the Originator, the Master
Servicer,
the Trust Administrator, the Servicer 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 promptly (and
in any event
within five (5) Business Days of discovery) give written notice
thereof to the
other parties. In connection therewith, the Trustee shall
require the Originator
to repurchase the affected Mortgage Loan within 30 days of the
earlier of
discovery or receipt of notice in the same manner as it would a
Mortgage Loan
for a breach of representation or warranty made pursuant to
Section 2.03. The
Trustee shall reconvey to the Originator the Mortgage Loan to be
released
pursuant hereto in the same manner, and on
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the same terms and conditions, as it would a Mortgage Loan
repurchased for
breach of a representation or warranty contained in Section
2.03.
Section 2.05. Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the Trust
Fund and, concurrently with such transfer and assignment, the
Trust
Administrator has executed and delivered to or upon the order of
the Depositor,
the Certificates in authorized denominations evidencing directly
or indirectly
the entire ownership of the Trust Fund. The Trustee agrees to
hold the Trust
Fund and exercise the rights referred to above for the benefit
of all present
and future Holders of the Certificates.
Section 2.06. Representations and Warranties of the
Depositor.
The Depositor hereby represents, warrants and covenants to the
Trustee, the
Trust Administrator, the Master Servicer, the Servicer and the
Originator that
as of the date of this Agreement or as of such date specifically
provided
herein:
(a) The Depositor is a corporation duly organized, validly
existing and in
good standing under the laws of the state of Delaware;
(b) The Depositor has the corporate power and authority to
convey the
Mortgage Loans and to execute, deliver and perform, and to enter
into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized,
executed and
delivered by the Depositor, all requisite corporate action
having been taken,
and, assuming the due authorization, execution and delivery
hereof by the
Servicer, the Originator and the Trustee, constitutes or will
constitute the
legal, valid and binding agreement of the Depositor, enforceable
against the
Depositor in accordance with its terms, except as such
enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar
laws relating to or affecting the rights of creditors generally,
and by general
equity principles (regardless of whether such enforcement is
considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or
filing with, or notice to, any governmental authority or court
is required for
the execution, delivery and performance of or compliance by the
Depositor with
this Agreement or the consummation by the Depositor of any of
the transactions
contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation
of the transactions contemplated hereby or thereby, or the
fulfillment of or
compliance with the terms and conditions of this Agreement, (i)
conflicts or
will conflict with or results or will result in a breach of, or
constitutes or
will constitute a default or results or will result in an
acceleration under (A)
the charter or bylaws of the Depositor, or (B) of any term,
condition or
provision of any material indenture, deed of trust, contract or
other agreement
or instrument to which the Depositor or any of its subsidiaries
is a party or by
which it or any of its subsidiaries is bound;
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(ii) results or will result in a violation of any law, rule,
regulation, order,
judgment or decree applicable to the Depositor of any court or
governmental
authority having jurisdiction over the Depositor or its
subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or
encumbrance which
would have a material adverse effect upon the Mortgage Loans or
any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or
investigations of, the Depositor pending, or to the knowledge of
the Depositor,
threatened, before any court, administrative agency or other
tribunal, and no
notice of any such action, which, in the Depositor's reasonable
judgment, might
materially and adversely affect the performance by the Depositor
of its
obligations under this Agreement, or the validity or
enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of
any court or any order, regulation or demand of any federal,
state, municipal or
governmental agency that may materially and adversely affect its
performance
hereunder;
(h) Immediately prior to the transfer and assignment by the
Depositor to
the Trustee on the Closing Date, the Depositor had good title
to, and was the
sole owner of each Mortgage Loan, free of any interest of any
other Person, and
the Depositor has transferred all right, title and interest in
each Mortgage
Loan to the Trustee. The transfer of each Mortgage Note and each
Mortgage as and
in the manner contemplated by this Agreement is sufficient
either (i) fully to
transfer to the Trustee, for the benefit of the
Certificateholders, all right,
title, and interest of the Depositor thereto as note holder and
mortgagee or
(ii) to grant to the Trustee, for the benefit of the
Certificateholders, the
security interest referred to in Section 10.04;
(i) None of the Mortgage Loans has a prepayment penalty period
in excess of
three years;
It is understood and agreed that the representations, warranties
and
covenants set forth in this Section 2.06 shall survive delivery
of the
respective Custodial Files to the Trustee or to a custodian, as
the case may be,
and shall inure to the benefit of the Trustee.
Within 60 days of the earlier of either discovery by or notice
to the
Depositor of a breach of the representations and warranties set
forth in clause
(h) or (i) above that materially and adversely affects the value
of any Mortgage
Loan or the interest of the Trustee or the Certificateholders
therein, the
Depositor shall use its best efforts to promptly cure such
breach in all
material respects and if such defect or breach cannot be
remedied, the Depositor
shall either (i) if such 60-day period expires prior to the
second anniversary
of the Closing Date, remove such Deleted Mortgage Loan from the
Trust Fund and
substitute in its place a Substitute Mortgage Loan, in the
manner and subject to
the conditions set forth in Section 2.03, or (ii) repurchase
such Mortgage Loan
at the Repurchase Price. The obligations of the Depositor to
cure such breach or
to substitute or purchase any Mortgage Loan constitute the sole
remedies
respecting a material breach of any such representation or
warranty to the
Holders of the Certificates and the Trustee.
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Section 2.07. Representations, Warranties and Covenants of the
Servicer,
the Originator and the Master Servicer.
(a) The Servicer hereby represents, warrants and covenants to
the Trustee,
the Trust Administrator, the Master Servicer, the Originator and
the Depositor
that as of the Closing Date or as of such date specifically
provided herein:
(i) The Servicer is a state chartered industrial bank duly
organized,
validly existing and in good standing under the laws of the
State of
California and is duly authorized and qualified to transact any
and all
business contemplated by this Agreement to be conducted by the
Servicer in
any state in which a Mortgaged Property related to a Mortgage
Loan is
located or is otherwise not required under applicable law to
effect such
qualification and, in any event, is in compliance with the doing
business
laws of any such State, to the extent necessary to ensure its
ability to
enforce each Mortgage Loan serviced and to service the Mortgage
Loans in
accordance with the terms of this Agreement;
(ii) The Servicer has the full power and authority to service
each
Mortgage Loan which the Servicer is required to service
hereunder, and to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by this Agreement and has duly
authorized by all
necessary action on the part of the Servicer the execution,
delivery and
performance of this Agreement; and this Agreement, assuming the
due
authorization, execution and delivery thereof by the Depositor,
the
Originator, the Master Servicer, the Trust Administrator and the
Trustee,
constitutes a legal, valid and binding obligation of the
Servicer,
enforceable against the Servicer in accordance with its terms,
except to
the extent that (a) the enforceability hereof may be limited by
bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally and (b) the remedy of specific
performance and
injunctive and other forms of equitable relief may be subject to
the
equitable defenses and to the discretion of the court before
which any
proceeding therefor may be brought;
(iii) The execution and delivery of this Agreement by the
Servicer,
the servicing of the Mortgage Loans by the Servicer hereunder,
the
consummation by the Servicer of any other of the transactions
herein
contemplated, and the fulfillment of or compliance with the
terms hereof
are in the ordinary course of business of the Servicer and will
not (A)
result in a breach of any term or provision of the
organizational documents
of the Servicer or (B) conflict with, result in a breach,
violation or
acceleration of, or result in a default under, the terms of any
other
material agreement or instrument to which the Servicer is a
party or by
which it may be bound, or any statute, order or regulation
applicable to
the Servicer of any court, regulatory body, administrative
agency or
governmental body having jurisdiction over the Servicer; and the
Servicer
is not a party to, bound by, or in breach or violation of any
indenture or
other agreement or instrument, or subject to or in violation of
any
statute, order or regulation of any court, regulatory body,
administrative
agency or governmental body having jurisdiction over it, which
materially
and adversely affects or, to the Servicer's knowledge, would in
the future
materially and adversely affect, (x) the ability of the Servicer
to perform
its obligations under this Agreement or (y) the business,
operations,
financial condition, properties or assets of the Servicer taken
as a whole;
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(iv) The Servicer is a HUD-approved non-supervised mortgagee
pursuant
to Section 203 and Section 211 of the National Housing Act, and
no event
has occurred, including but not limited to a change in insurance
coverage,
that would make the Servicer unable to comply with HUD
eligibility
requirements or which would require notification to HUD;
(v) No litigation is pending or, to the best knowledge of
the
Servicer, threatened against the Servicer that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement or the ability of the Servicer to service the Mortgage
Loans or
to perform any of its other obligations hereunder in accordance
with the
terms hereof;
(vi) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery and
performance by the Servicer of, or compliance by the Servicer
with, this
Agreement or the consummation by the Servicer of the
transactions
contemplated by this Agreement, except for such consents,
approvals,
authorizations or orders, if any, that have been obtained prior
to the
Closing Date;
(vii) The Servicer will not waive any Prepayment Premium or part
of a
Prepayment Premium unless such waiver would, in the reasonable
opinion of
the Servicer, maximize recovery of total proceeds taking into
account the
value of such Prepayment Premium and related Mortgage Loan and
doing so is
standard and customary in servicing mortgage loans similar to
the Mortgage
Loans (including any waiver of a Prepayment Premium in
connection with a
refinancing of a Mortgage Loan that is related to a default or
an imminent
default), and in no event will it waive a Prepayment Premium in
connection
with a refinancing of a Mortgage Loan that is not related to a
default or
an imminent default. Notwithstanding the previous sentence, if
the Servicer
has not received any document or information necessary for the
Servicer to
verify the existence or amount of the related Prepayment Premium
or if the
Servicer determines that any Prepayment Premium is not legally
enforceable
under the circumstances in which the related Principal
Prepayment occurs,
then the Servicer shall not be required to attempt to collect
the
applicable Prepayment Premium, and shall have no liability or
obligation
with respect to such Prepayment Premium pursuant to Section
3.07(a) hereof;
(viii) For each Mortgage Loan, the Servicer will accurately,
fully and
in a timely manner report its borrower credit files to each of
the three
credit repositories; and
(ix) the Servicer is a member of MERS in good standing and will
comply
in all material respects with the rules and procedures of MERS
in
connection with the servicing of the MERS Designated Mortgage
Loans for as
long as such Mortgage Loans are registered with MERS.
(b) The Originator hereby represents, warrants and covenants to
the
Trustee, the Trust Administrator, the Master Servicer, the
Servicer and the
Depositor that as of the Closing Date or as of such date
specifically provided
herein:
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(i) The Originator is a state chartered industrial bank duly
organized, validly existing and in good standing under the laws
of the
state of California;
(ii) The Originator has full power and authority to own its
property,
to carry on its business as presently conducted and to enter
into and
perform its obligations under this Agreement;
(iii) The execution and delivery by the Originator of this
Agreement
have been duly authorized by all necessary corporate action on
the part of
the Originator; and neither the execution and delivery of this
Agreement,
nor the consummation of the transactions contemplated herein,
nor
compliance with the provisions hereof, will conflict with or
result in a
breach of, or constitute a default under, any of the provisions
of any law,
governmental rule, regulation, judgment, decree or order binding
on the
Originator or its properties or the certificate of incorporation
or by-laws
of the Originator, except those conflicts, breaches or defaults
which would
not reasonably be expected to have a material adverse effect on
the
Originator's ability to enter into this Agreement and to
consummate the
transactions contemplated hereby;
(iv) The execution, delivery and performance by the Originator
of this
Agreement and the consummation of the transactions contemplated
hereby do
not require the consent or approval of, the giving of notice to,
the
registration with, or the taking of any other action in respect
of, any
state, federal or other governmental authority or agency, except
those
consents, approvals, notices, registrations or other actions as
have
already been obtained, given or made and, in connection with
the
recordation of the Mortgages, powers of attorney or assignments
of
Mortgages not yet completed;
(v) This Agreement has been duly executed and delivered by
the
Originator and, assuming due authorization, execution and
delivery by the
Trustee, the Servicer, the Master Servicer, the Trust
Administrator and the
Depositor, constitutes a valid and binding obligation of the
Originator,
enforceable against it in accordance with its terms (subject to
applicable
bankruptcy and insolvency laws and other similar laws affecting
the
enforcement of the rights of creditors generally);
(vi) There are no actions, litigation, suits or proceedings
pending
or, to the knowledge of the Originator, threatened against the
Originator
before or by any court, administrative agency, arbitrator or
governmental
body (i) with respect to any of the transactions contemplated by
this
Agreement or (ii) with respect to any other matter which in the
judgment of
the Originator if determined adversely to the Originator would
reasonably
be expected to materially and adversely affect the Originator's
ability to
perform its obligations under this Agreement; and the Originator
is not in
default with respect to any order of any court, administrative
agency,
arbitrator or governmental body so as to materially and
adversely affect
the transactions contemplated by this Agreement;
(vii) The Originator hereby makes the representations and
warranties
set forth in Exhibit A to the Mortgage Loan Purchase Agreement,
as of the
Closing Date, or the date specified therein, with respect to the
Mortgage
Loans identified on Schedule I hereto; and
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(viii) The Originator is a member of MERS in good standing and
will
comply in all material respects with the rules and procedures of
MERS in
connection with the servicing of the MERS Mortgage Loans for as
long as
such Mortgage Loans are registered with MERS.
(c) The Master Servicer hereby represents, warrants and
covenants to the
Servicer, the Originator, the Depositor and the Trustee, for the
benefit of each
of the Trustee and the Certificateholders, that as of the
Closing Date or as of
such date specifically provided herein:
(i) The Master Servicer is a national banking association duly
formed,
validly existing and in good standing under the laws of the
United States
of America and is duly authorized and qualified to transact any
and all
business contemplated by this Agreement to be conducted by the
Master
Servicer;
(ii) The Master Servicer has the full power and authority to
conduct
its business as presently conducted by it and to execute,
deliver and
perform, and to enter into and consummate, all transactions
contemplated by
this Agreement. The Master Servicer has duly authorized the
execution,
delivery and performance of this Agreement, has duly executed
and delivered
this Agreement, and this Agreement, assuming due authorization,
execution
and delivery by the Depositor, the Originator, the Servicer and
the
Trustee, constitutes a legal, valid and binding obligation of
the Master
Servicer, enforceable against it in accordance with its terms
except as the
enforceability thereof may be limited by bankruptcy,
insolvency,
reorganization or similar laws affecting the enforcement of
creditors'
rights generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by the
Master
Servicer, the consummation by the Master Servicer of any other
of the
transactions herein contemplated, and the fulfillment of or
compliance with
the terms hereof are in the ordinary course of business of the
Master
Servicer and will not (A) result in a breach of any term or
provision of
charter and by-laws of the Master Servicer or (B) conflict with,
result in
a breach, violation or acceleration of, or result in a default
under, the
terms of any other material agreement or instrument to which the
Master
Servicer is a party or by which it may be bound, or any statute,
order or
regulation applicable to the Master Servicer of any court,
regulatory body,
administrative agency or governmental body having jurisdiction
over the
Master Servicer; and the Master Servicer is not a party to,
bound by, or in
breach or violation of any indenture or other agreement or
instrument, or
subject to or in violation of any statute, order or regulation
of any
court, regulatory body, administrative agency or governmental
body having
jurisdiction over it, which materially and adversely affects or,
to the
Master Servicer's knowledge, would in the future materially and
adversely
affect, the ability of the Master Servicer to perform its
obligations under
this Agreement;
(iv) The Master Servicer does not believe, nor does it have any
reason
or cause to believe, that it cannot perform each and every
covenant made by
it and contained in this Agreement;
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(v) No litigation is pending against the Master Servicer that
would
materially and adversely affect the execution, delivery or
enforceability
of this Agreement or the ability of the Master Servicer to
perform any of
its other obligations hereunder in accordance with the terms
hereof;
(vi) There are no actions or proceedings against, or
investigations
known to it of, the Master Servicer before any court,
administrative or
other tribunal (A) that might prohibit its entering into this
Agreement,
(B) seeking to prevent the consummation of the transactions
contemplated by
this Agreement or (C) that might prohibit or materially and
adversely
affect the performance by the Master Servicer of its obligations
under, or
validity or enforceability of, this Agreement; and
(vii) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery and
performance by the Master Servicer of, or compliance by the
Master Servicer
with, this Agreement or the consummation by it of the
transactions
contemplated by this Agreement, except for such consents,
approvals,
authorizations or orders, if any, that have been obtained prior
to the
Closing Date.
(d) It is understood and agreed that the representations,
warranties and
covenants set forth in this Section 2.07 shall survive delivery
of the Mortgage
Files to the Trustee. Upon discovery by any of the Depositor,
the Originator,
the Master Servicer, the Trust Administrator, the Servicer or
the Trustee of a
breach of any of the foregoing representations, warranties and
covenants which
materially and adversely affects the value of any Mortgage Loan,
Prepayment
Premium or the interests therein of the Certificateholders, the
party
discovering such breach shall give prompt written notice (but in
no event later
than two Business Days following such discovery) to the other
such parties. The
obligation of the Originator set forth in Section 2.03(d) to
cure breaches shall
constitute the sole remedy against the Originator available to
the
Certificateholders, the Depositor, the Trust Administrator or
the Trustee on
behalf of the Certificateholders respecting a breach of the
Originator's
representations, warranties and covenants contained in paragraph
(b)(vii) of
this Section 2.07. The obligation of the Servicer set forth in
Section 3.07(a)
to pay the amount of any waived Prepayment Premium shall
constitute the sole
remedy against the Servicer available to the Certificateholders,
the Depositor,
the Trust Administrator or the Trustee on behalf of the
Certificateholders
respecting a breach of the Servicer's representations,
warranties and covenants
contained in paragraph (a)(vii) of this Section 2.07.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Servicer to Service Mortgage Loans.
(a) For and on behalf of the Certificateholders, the Servicer
shall service
and administer the Mortgage Loans in accordance with the terms
of this Agreement
and the respective Mortgage Loans, to the extent consistent with
such terms and
in accordance with Accepted Servicing Practices but without
regard to:
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(i) any relationship that the Servicer, any Subservicer or
any
Affiliate of the Servicer or any Subservicer may have with the
related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer
or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or
Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation
for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall
seek to
maximize the timely and complete recovery of principal and
interest on the
related Mortgage Notes. Subject only to the above-described
servicing standards
and the terms of this Agreement and of the respective Mortgage
Loans, the
Servicer shall have full power and authority, acting alone or
through
Subservicers as provided in Section 3.02, to do or cause to be
done any and all
things in connection with such servicing and administration
which it may deem
necessary or desirable. Without limiting the generality of the
foregoing, the
Servicer in its own name or in the name of a Subservicer is
hereby authorized
and empowered by the Trustee when the Servicer believes it
appropriate in its
best judgment in accordance with the Accepted Servicing
Practices, to execute
and deliver any and all instruments of satisfaction or
cancellation, or of
partial or full release or discharge, and all other comparable
instruments, with
respect to the Mortgage Loans and the Mortgaged Properties and
to institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure
so as to convert
the ownership of such properties, and to hold or cause to be
held title to such
properties, on behalf of the Trustee. The Servicer shall service
and administer
the Mortgage Loans in accordance with applicable state and
federal law and shall
provide to the Mortgagors any reports required to be provided to
them thereby.
The Servicer shall also comply in the performance of this
Agreement with all
reasonable rules and requirements of each insurer under any
standard hazard
insurance policy. Subject to Section 3.16, the Trustee shall
execute, at the
written request of the Servicer, and furnish to the Servicer and
any Subservicer
such documents as are necessary or appropriate to enable the
Servicer or any
Subservicer to carry out their servicing and administrative
duties hereunder,
and the Trustee hereby grants to the Servicer, and this
Agreement shall
constitute, a power of attorney to carry out such duties
including a power of
attorney to take title to Mortgaged Properties after foreclosure
on behalf of
the Trustee. The Trustee shall execute any power of attorney, in
the form
annexed hereto as Exhibit L, furnished to it by the Servicer in
favor of the
Servicer for the purposes described herein to the extent
necessary or desirable
to enable the Servicer to perform its duties hereunder. The
Trustee shall not be
liable for the actions of the Servicer or any Subservicers under
such powers of
attorney.
(b) Subject to Section 3.09(b), in accordance with Accepted
Servicing
Practices, the Servicer shall advance or cause to be advanced
funds as necessary
for the purpose of effecting the timely payment of taxes and
assessments on the
Mortgaged Properties, which advances shall be Servicing Advances
reimbursable in
the first instance from related collections from the Mortgagors
pursuant to
Section 3.09(b), and further as provided in Section 3.11. Any
cost incurred by
the Servicer or by Subservicers in effecting the timely payment
of taxes and
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assessments on a Mortgaged Property shall not be added to the
unpaid principal
balance of the related Mortgage Loan, notwithstanding that the
terms of such
Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary,
the
Servicer may not make any future advances with respect to a
Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not
(i) permit any
modification with respect to any Mortgage Loan that would change
the Mortgage
Interest Rate, reduce or increase the principal balance (except
for reductions
resulting from actual payments of principal) or change the final
maturity date
on such Mortgage Loan (except for (A) a reduction of interest
payments resulting
from the application of the Servicemembers Civil Relief Act, as
amended, or any
similar state statutes or (B) as provided in Section 3.07, if
the Mortgagor is
in default with respect to the Mortgage Loan or such default is,
in the judgment
of the Servicer, reasonably foreseeable) or (ii) permit any
modification, waiver
or amendment of any term of any Mortgage Loan that would both
(A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001
of the Code (or
final, temporary or proposed Treasury regulations promulgated
thereunder) and
(B) cause any Trust REMIC to fail to qualify as a REMIC under
the Code or the
imposition of any tax on "prohibited transactions" or
"contributions after the
start-up day" under the REMIC Provisions, or (iii) except as
provided in Section
3.07(a), waive any Prepayment Premiums.
(d) The Servicer may delegate its responsibilities under this
Agreement;
provided, however, that no such delegation shall release the
Servicer from the
responsibilities or liabilities arising under this
Agreement.
(e) In the event of any change in the outstanding rating by
Moody's of the
Servicer as a servicer of residential mortgage loans, the
Servicer shall provide
written notice of such change to the Master Servicer within five
(5) Business
Days of such change.
(f) If, on any date of determination, the Servicer fails the
Servicer
Enhanced Review Test, the Servicer shall promptly submit a
completed form in the
form of Exhibit Q to the Master Servicer with respect to any
Realized Losses,
together with any supporting documentation reasonably requested
by the Master
Servicer, and shall continue to submit completed forms in the
form of Exhibit Q,
and related supporting documentation as requested by the Master
Servicer, in
connection with any subsequent Realized Losses.
Section 3.02. Subservicing Agreements between the Servicer
and
Subservicers.
(a) The Servicer may enter into subservicing agreements with
subservicers
(each, a "Subservicer"), for the servicing and administration of
the Mortgage
Loans ("Subservicing Agreements").
(b) Each Subservicer shall be (i) authorized to transact
business in the
state or states in which the related Mortgaged Properties it is
to service are
situated, if and to the extent required by applicable law to
enable the
Subservicer to perform its obligations hereunder and under the
Subservicing
Agreement and (ii) an institution approved as a mortgage loan
originator by the
Federal Housing Administration or an institution that has
deposit accounts
insured by the FDIC. Each Subservicing Agreement must impose on
the Subservicer
requirements conforming to the provisions set forth in Section
3.08 and provide
for servicing of the Mortgage Loans
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consistent with the terms of this Agreement. The Servicer will
examine each
Subservicing Agreement and will be familiar with the terms
thereof. The terms of
any Subservicing Agreement will not be inconsistent with any of
the provisions
of this Agreement. The Servicer and the Subservicers may enter
into and make
amendments to the Subservicing Agreements or enter into
different forms of
Subservicing Agreements; provided, however, that any such
amendments or
different forms shall be consistent with and not violate the
provisions of this
Agreement, and that no such amendment or different form shall be
made or entered
into which could be reasonably expected to be materially adverse
to the
interests of the Trustee, without the consent of the Trustee.
Any variation
without the consent of the Trustee from the provisions set forth
in Section 3.08
relating to insurance or priority requirements of Subservicing
Accounts, or
credits and charges to the Subservicing Accounts or the timing
and amount of
remittances by the Subservicers to the Servicer, are
conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The
Servicer shall
deliver to the Trustee, the Master Servicer, the Trust
Administrator and the
Depositor copies of all Subservicing Agreements, and any
amendments or
modifications thereof, promptly upon the Servicer's execution
and delivery of
such instruments.
Any Subservicing Agreement and any other transactions or
services relating
to the Mortgage Loans involving a Subservicer shall be deemed to
be between the
Subservicer and the Servicer alone, and the Depositor, the
Master Servicer and
the Trust Administrator and the Trustee shall have no
obligations, duties or
liabilities with respect to a Subservicer including no
obligation, duty or
liability of the Depositor, the Master Servicer and the Trust
Administrator or
Trustee, to pay a Subservicer's fees and expenses.
For purposes of this Agreement, the Servicer shall be deemed to
have
received any collections, recoveries or payments with respect to
the related
Mortgage Loans that are received by a related Subservicer
regardless of whether
such payments are remitted by the Subservicer to the
Servicer.
(c) As part of its servicing activities hereunder, the Servicer
(except as
otherwise provided in the last sentence of this paragraph), for
the benefit of
the Trustee, shall enforce the obligations of each Subservicer
under the related
Subservicing Agreement to which the Servicer is a party,
including, without
limitation, any obligation to make advances in respect of
delinquent payments as
required by a Subservicing Agreement. Such enforcement,
including, without
limitation, the legal prosecution of claims, termination of
Subservicing
Agreements, and the pursuit of other appropriate remedies, shall
be in such form
and carried out to such an extent and at such time as the
Servicer, in its good
faith business judgment, would require were it the owner of the
related Mortgage
Loans. The Servicer shall pay the costs of such enforcement at
its own expense,
and shall be reimbursed therefor only (i) from a general
recovery resulting from
such enforcement, to the extent, if any, that such recovery
exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a
specific recovery of
costs, expenses or attorneys' fees against the party against
whom such
enforcement is directed.
The Servicer shall pay all fees, expenses or penalties necessary
in order
to terminate the rights and responsibilities of its Subservicer
from the
Servicer's own funds without any right of reimbursement from the
Depositor, the
Trustee, the Master Servicer, the Trust Administrator or the
Collection Account.
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Section 3.03. Successor Subservicers.
The Servicer shall be entitled to terminate any Subservicing
Agreement to
which the Servicer is a party and the rights and obligations of
any Subservicer
pursuant to any Subservicing Agreement in accordance with the
terms and
conditions of such Subservicing Agreement. In the event of
termination of any
Subservicer, all servicing obligations of such Subservicer shall
be assumed
simultaneously by the Servicer party to the related Subservicing
Agreement
without any act or deed on the part of such Subservicer or the
Servicer, and the
Servicer either shall service directly the related Mortgage
Loans or shall enter
into a Subservicing Agreement with a successor Subservicer which
qualifies under
Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement
may be immediately terminated by the Master Servicer, the
Trustee or the Trust
Administrator without fee, in accordance with the terms of this
Agreement, in
the event that the Servicer (or the Master Servicer, the Trust
Administrator or
the Trustee, if then acting as Servicer) shall, for any reason,
no longer be the
Servicer (including termination due to a Servicer Event of
Default).
Section 3.04. Liability of the Servicer.
Notwithstanding any Subservicing Agreement, any of the
provisions of this
Agreement relating to agreements or arrangements between the
Servicer and a
Subservicer or reference to actions taken through a Subservicer
or otherwise,
the Servicer shall remain obligated and primarily liable to the
Trustee for the
servicing and administering of the Mortgage Loans in accordance
with the
provisions of Section 3.01 without diminution of such obligation
or liability by
virtue of such Subservicing Agreements or arrangements or by
virtue of
indemnification from the Subservicer and to the same extent and
under the same
terms and conditions as if the Servicer alone were servicing and
administering
such Mortgage Loans. The Servicer shall be entitled to enter
into any agreement
with a Subservicer for indemnification of the Servicer by such
Subservicer and
nothing contained in this Agreement shall be deemed to limit or
modify such
indemnification.
Section 3.05. No Contractual Relationship between Subservicers
and the
Trustee, Master Servicer, Trust Administrator or
Certificateholder.
Any Subservicing Agreement that may be entered into and any
transactions or
services relating to the Mortgage Loans involving a Subservicer
in its capacity
as such shall be deemed to be between the Subservicer and the
Servicer alone,
and the Trustee, the Master Servicer, the Trust Administrator
and the
Certificateholder (or any successor to the Servicer) shall not
be deemed a party
thereto and shall have no claims, rights, obligations, duties or
liabilities
with respect to the Subservicer except as set forth in Section
3.06. The
Servicer shall be solely liable for all fees owed by it to any
Subservicer,
irrespective of whether the Servicer's compensation pursuant to
this Agreement
is sufficient to pay such fees.
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Section 3.06. Assumption or Termination of Subservicing
Agreements by
Trustee or Trust Administrator.
In the event the Servicer at any time shall for any reason no
longer be the
Servicer (including by reason of the occurrence of a Servicer
Event of Default),
the Master Servicer or any other successor to Servicer pursuant
to this
Agreement, shall thereupon assume all of the rights and
obligations of the
Servicer under each Subservicing Agreement that the Servicer may
have entered
into, with copies thereof provided to the Master Servicer prior
to the Master
Servicer assuming such rights and obligations, unless the Master
Servicer elects
to terminate any Subservicing Agreement in accordance with its
terms as provided
in Section 3.03.
Upon such assumption, the Master Servicer, its designee or the
successor
servicer shall be deemed, subject to Section 3.03, to have
assumed all of the
Servicer's interest therein and to have replaced the Servicer as
a party to each
Subservicing Agreement to the same extent as if each
Subservicing Agreement had
been assigned to the assuming party, except that (i) the
Servicer shall not
thereby be relieved of any liability or obligations under any
Subservicing
Agreement that arose before it ceased to be the Servicer and
(ii) none of the
Trustee, the Trust Administrator, the Master Servicer, their
designees or any
successor to the Servicer shall be deemed to have assumed any
liability or
obligation of the Servicer that arose before it ceased to be the
Servicer.
The Servicer at its expense shall, upon request of the Master
Servicer, the
Trust Administrator or the Trustee, deliver to the assuming
party all documents
and records relating to each Subservicing Agreement and the
Mortgage Loans then
being serviced by it and an accounting of amounts collected and
held by or on
behalf of it, and otherwise use its best efforts to effect the
orderly and
efficient transfer of the Subservicing Agreements to the
assuming party.
Section 3.07. Collection of Certain Mortgage Loan Payments.
(a) The Servicer shall make reasonable efforts to collect all
payments
called for under the terms and provisions of the Mortgage Loans
and shall, to
the extent such procedures shall be consistent with this
Agreement and the terms
and provisions of any applicable Insurance Policies, follow such
collection
procedures as it would follow with respect to mortgage loans
comparable to the
Mortgage Loans and held for its own account. Consistent with the
foregoing and
Accepted Servicing Practices, the Servicer may (i) waive any
late payment charge
or, if applicable, any penalty interest, or (ii) extend the due
dates for the
Scheduled Payments due on a Mortgage Note for a period of not
greater than 180
days; provided, that any extension pursuant to clause (ii) above
shall not
affect the amortization schedule of any Mortgage Loan for
purposes of any
computation hereunder, except as provided below. In the event of
any such
arrangement pursuant to clause (ii) above, the Servicer shall
make timely
advances on such Mortgage Loan during such extension pursuant to
Section 4.01
and in accordance with the amortization schedule of such
Mortgage Loan without
modification thereof by reason of such arrangements, subject to
Section 4.01(d)
pursuant to which the Servicer shall not be required to make any
such advances
that are Nonrecoverable P&I Advances. Notwithstanding the
foregoing, in the
event that any Mortgage Loan is in default or is a 60+ Day
Delinquent Mortgage
Loan, the Servicer, consistent with the standards set forth in
Section 3.01, may
also waive, modify or vary any term of such Mortgage Loan
(including
modifications that would change the Mortgage Interest Rate,
forgive
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the payment of principal or interest, extend the final maturity
date of such
Mortgage Loan or waive, in whole or in part, a Prepayment
Premium), accept
payment from the related Mortgagor of an amount less than the
Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent
to the
postponement of strict compliance with any such term or
otherwise grant
indulgence to any Mortgagor (any and all such waivers,
modifications, variances,
forgiveness of principal or interest, postponements, or
indulgences collectively
referred to herein as "forbearance"); provided, however, that
the Servicer's
approval of a modification of a Due Date shall not be considered
a modification
for purposes of this sentence; provided, further, that the final
maturity date
of any Mortgage Loan may not be extended beyond the Final
Scheduled Distribution
Date for the Offered Certificates. The Servicer's analysis
supporting any
forbearance and the conclusion that any forbearance meets the
standards of
Section 3.01 shall be reflected in writing in the applicable
Servicing File. In
addition, notwithstanding the foregoing, the Servicer may also
waive, in whole
or in part, a Prepayment Premium if such Prepayment Premium is
(i) not permitted
to be collected by applicable law or the collection thereof
would be considered
"predatory" pursuant to written guidance published by any
applicable federal,
state or local regulatory authority having jurisdiction over
such matters, or
(ii) the enforceability thereof is limited (1) by bankruptcy,
insolvency,
moratorium, receivership or other similar laws relating to
creditor's rights or
(2) due to acceleration in connection with a foreclosure or
other involuntary
payment. In order to waive a Prepayment Premium other than as
permitted above,
then the Servicer, as a condition to any such waiver of
Prepayment Premium, is
required to first pay the amount of such waived Prepayment
Premium, for the
benefit of the Holders of the Class P Certificates, by
depositing such amount
into the Collection Account together with and at the time that
the amount
prepaid on the related Mortgage Loan is required to be deposited
into the
Collection Account; provided, however, that the Servicer shall
not have an
obligation to pay the amount of any uncollected Prepayment
Premium if the
failure to collect such amount is the direct result of
inaccurate or incomplete
information on the Mortgage Loan Schedule in effect at such
time.
(b) The Servicer shall give notice to the Trustee, the Trust
Administrator,
the Master Servicer, each Rating Agency and the Depositor of any
proposed change
of the location of the Collection Account within a reasonable
period of time
prior to any change thereof.
Section 3.08. Subservicing Accounts.
In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to
a Subservicing Agreement, the Subservicer will be required to
establish and
maintain one or more accounts (collectively, the "Subservicing
Account"). The
Subservicing Account shall be an Eligible Account and shall
otherwise be
acceptable to the Servicer. The Subservicer shall deposit in the
clearing
account (which account must be an Eligible Account) in which it
customarily
deposits payments and collections on mortgage loans in
connection with its
mortgage loan servicing activities on a daily basis, and in no
event more than
one Business Day after the Subservicer's receipt thereof, all
proceeds of
Mortgage Loans received by the Subservicer less its servicing
compensation to
the extent permitted by the Subservicing Agreement, and shall
thereafter deposit
such amounts in the Subservicing Account, in no event more than
two Business
Days after the deposit of such funds into the clearing account.
The Subservicer
shall thereafter deposit such proceeds in the Collection Account
of the Servicer
or remit such proceeds to the Servicer for deposit in the
Collection Account of
the Servicer not later
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than two Business Days after the deposit of such amounts in the
Subservicing
Account. For purposes of this Agreement, the Servicer shall be
deemed to have
received payments on the Mortgage Loans when the Subservicer
receives such
payments.
Section 3.09. Collection of Taxes, Assessments and Similar
Items; Escrow
Accounts.
(a) The Servicer shall ensure that each of the related Mortgage
Loans shall
be covered by a paid-in-full, life-of-the-loan tax service
contract in effect
with respect to each related Mortgage Loan (each, a "Tax Service
Contract").
Each Tax Service Contract shall be assigned to the Trustee, or
its designee, at
the Servicer's expense in the event that the Servicer is
terminated as Servicer
of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b) are not
otherwise provided pursuant to the Tax Service Contracts
described in paragraph
(a) hereof, the Servicer undertakes to perform such functions.
To the extent the
related Mortgage Loan provides for Escrow Payments, the Servicer
shall establish
and maintain, or cause to be established and maintained, one or
more accounts
(the "Escrow Accounts"), which shall be Eligible Accounts. The
Servicer shall
deposit in the clearing account (which account must be an
Eligible Account) in
which it customarily deposits payments and collections on
mortgage loans in
connection with its mortgage loan servicing activities on a
daily basis, and in
no event more than one Business Day after the Servicer's receipt
thereof, all
collections from the Mortgagors (or related advances from
Subservicers) for the
payment of taxes, assessments, hazard insurance premiums and
comparable items
for the account of the Mortgagors ("Escrow Payments") collected
on account of
the Mortgage Loans and shall thereafter deposit such Escrow
Payments in the
Escrow Accounts, in no event more than two Business Days after
the deposit of
such funds in the clearing account, for the purpose of effecting
the payment of
any such items as required under the terms of this Agreement.
Withdrawals of
amounts from an Escrow Account may be made only to (i) effect
payment of taxes,
assessments, hazard insurance premiums, and comparable items;
(ii) reimburse the
Servicer (or a Subservicer to the extent provided in the related
Subservicing
Agreement) out of related collections for any advances made
pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.13
(with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be
determined to
be overages; (iv) apply to the restoration or repair of the
Mortgaged Property
in accordance with the Section 3.13; (v) transfer to the
Collection Account and
application to reduce the principal balance of the Mortgage Loan
in accordance
with the terms of the related Mortgage and Mortgage Note; (vi)
pay interest to
the Servicer and, if required and as described below, to
Mortgagors on balances
in the Escrow Account; (vii) clear and terminate the Escrow
Account at the
termination of the Servicer's obligations and responsibilities
in respect of the
related Mortgage Loans under this Agreement; or (viii) recover
amounts deposited
in error. As part of its servicing duties, the Servicer or
Subservicers shall
pay to the Mortgagors interest on funds in Escrow Accounts, to
the extent
required by law and, to the extent that interest earned on funds
in the Escrow
Accounts is insufficient, to pay such interest from its or their
own funds,
without any reimbursement therefor. To the extent that a
Mortgage does not
provide for Escrow Payments, the Servicer shall use commercially
reasonable
efforts consistent with Accepted Servicing Practices to
determine whether any
such payments are made by the Mortgagor in a manner and at a
time that avoids
the loss of the Mortgaged Property due to a tax sale or the
foreclosure as a
result of a tax lien. The Servicer assumes full responsibility
for the payment
of all such bills within such time and shall
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effect payments of all such bills irrespective of the
Mortgagor's faithful
performance in the payment of same or the making of the Escrow
Payments and
shall make advances from its own funds to effect such payments;
provided,
however, that such advances are deemed to be Servicing
Advances.
Section 3.10. Collection Account.
(a) On behalf of the Trustee, the Servicer shall establish and
maintain, or
cause to be established and maintained, one or more Eligible
Accounts (such
account or accounts, the "Collection Account"), held in trust
for the benefit of
the Trustee. On behalf of the Trustee, the Servicer shall
deposit or cause to be
deposited in the clearing account (which account must be an
Eligible Account) in
which it customarily deposits payments and collections on
mortgage loans in
connection with its mortgage loan servicing activities on a
daily basis, and in
no event more than one Business Day after the Servicer's receipt
thereof, and
shall thereafter deposit in the Collection Account, in no event
more than two
Business Days after the deposit of such funds into the clearing
account, as and
when received or as otherwise required hereunder, the following
payments and
collections received or made by it subsequent to the Cut-off
Date (other than in
respect of principal or interest on the related Mortgage Loans
due on or before
the Cut-off Date), or payments (other than Principal
Prepayments) received by it
on or prior to the related Cut-off Date but allocable to a Due
Period subsequent
thereto:
(i) all payments on account of principal, including
Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the Servicing
Fee) on
each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds (to the
extent
such Insurance Proceeds and Condemnation Proceeds are not to be
applied to
the restoration of the related Mortgaged Property or released to
the
related Mortgagor in accordance with the express requirements of
law or in
accordance with prudent and customary servicing practices) and
all
Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section
3.12 in
connection with any losses realized on Permitted Investments
with respect
to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer
pursuant to
the second paragraph of Section 3.13(a) in respect of any
blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in
accordance with this Agreement;
(vii) all Substitution Shortfall Amounts; and
(viii) all Prepayment Premiums collected by the Servicer.
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The foregoing requirements for deposit in the Collection Account
shall be
exclusive, it being understood and agreed that, without limiting
the generality
of the foregoing, payments in the nature of late payment
charges, NSF fees,
reconveyance fees, assumption fees and other similar fees and
charges need not
be deposited by the Servicer in the Collection Account and
shall, upon
collection, belong to the Servicer as additional compensation
for its servicing
activities. In the event the Servicer shall deposit in the
Collection Account
any amount not required to be deposited therein, it may at any
time withdraw
such amount from the Collection Account, any provision herein to
the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in
Permitted
Investments in accordance with the provisions set forth in
Section 3.12. The
Servicer shall give notice to the Trust Administrator, the
Master Servicer and
the Depositor of the location of the Collection Account
maintained by it when
established and prior to any change thereof.
Section 3.11. Withdrawals from the Collection Account.
(a) The Servicer shall, from time to time, make withdrawals from
the
Collection Account for any of the following purposes or as
described in Section
4.01:
(i) on or prior to the Remittance Date, to remit to the
Trust
Administrator for deposit into the Distribution Account all
Available Funds
in respect of the related Distribution Date together with all
amounts
representing Prepayment Premiums from the Mortgage Loans
received during
the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only to
the
extent of amounts received which represent Late Collections (net
of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans
with
respect to which such P&I Advances were made in accordance
with the
provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (A) any unpaid
Servicing
Fees or (B) any unreimbursed Servicing Advances with respect to
each
Mortgage Loan, but only to the extent of any Late Collections,
Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds or other
amounts as may
be collected by the Servicer from a Mortgagor, or otherwise
received with
respect to such Mortgage Loan (or the related REO Property);
(iv) to pay to the Servicer as servicing compensation (in
addition to
the Servicing Fee) on the Remittance Date any interest or
investment income
earned on funds deposited in the Collection Account;
(v) to pay to the Originator, with respect to each Mortgage Loan
that
has previously been repurchased or replaced pursuant to this
Agreement all
amounts received thereon subsequent to the date of purchase
or
substitution, as the case may be;
(vi) to reimburse the Servicer for (A) any P&I Advance or
Servicing
Advance previously made which the Servicer has determined to be
a
Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance in
accordance with the provisions of Section 4.01
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and (B) any unpaid Servicing Fees to the extent not recoverable
from
Liquidation Proceeds, Insurance Proceeds or other amounts
received with
respect to the related Mortgage Loan under Section
3.11(a)(iii);
(vii) to pay, or to reimburse the Servicer for advances in
respect
of, expenses incurred in connection with any Mortgage Loan
pursuant to
Section 3.15;
(viii) to reimburse the Servicer, the Depositor, the Master
Servicer, the Trust Administrator or the Trustee for expenses
incurred by
or reimbursable to the Servicer, the Depositor, the Trustee, the
Master
Servicer or the Trust Administrator, as the case may be,
pursuant to this
Agreement;
(ix) to reimburse the Servicer, the Master Servicer, the
Trust
Administrator or the Trustee, as the case may be, for expenses
reasonably
incurred in respect of the breach or defect giving rise to the
repurchase
obligation under Section 2.03 of this Agreement that were
included in the
Repurchase Price of the Mortgage Loan, including any expenses
arising out
of the enforcement of the repurchase obligation, to the extent
not
otherwise paid pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection Account
in
error; and
(xi) to clear and terminate the Collection Account upon
termination
of this Agreement.
To the extent that the Servicer does not timely make the
remittance
referred to in clause (i) above, the Servicer shall pay the
Trust Administrator
for the account of the Trust Administrator interest on any
amount not timely
remitted at the prime rate, from and including the applicable
Remittance Date to
but excluding the date such remittance is actually made.
(b) The Servicer shall keep and maintain separate accounting, on
a
Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any
withdrawal from the Collection Account, to the extent held by or
on behalf of
it, pursuant to subclauses (a)(ii), (iii), (iv), (v), (vi),
(vii), (viii) and
(ix) above. The Servicer shall provide written notification to
the Depositor, on
or prior to the next succeeding Remittance Date, upon making any
withdrawals
from the Collection Account pursuant to subclause (a)(vi)
above.
Section 3.12. Investment of Funds in the Collection Account and
the
Distribution Account.
(a) The Servicer may invest the funds in the Collection Account
and the
Trust Administrator may invest funds in the Distribution Account
(for purposes
of this Section 3.12, each such Account is referred to as an
"Investment
Account"), in one or more Permitted Investments bearing interest
or sold at a
discount, and maturing, unless payable on demand, no later than
the Business Day
on which such funds are required to be withdrawn from such
account pursuant to
this Agreement. All such Permitted Investments shall be held to
maturity, unless
payable on demand. Any investment of funds in an Investment
Account shall be
made in the name of the Trust Administrator. The Trust
Administrator shall be
entitled to sole possession
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(except with respect to investment direction of funds held in
the Collection
Account and any income and gain realized thereon) over each such
investment, and
any certificate or other instrument evidencing any such
investment shall be
delivered directly to the Trust Administrator or its agent,
together with any
document of transfer necessary to transfer title to such
investment to the Trust
Administrator. In the event amounts on deposit in an Investment
Account are at
any time invested in a Permitted Investment payable on demand,
the Trust
Administrator may:
(x) consistent with any notice required to be given
thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on
such
date; and
(y) demand payment of all amounts due thereunder to the
extent
that such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter on
deposit
in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in
the Collection Account and Escrow Account held by or on behalf
of the Servicer,
shall be for the benefit of the Servicer and shall be subject to
its withdrawal
in the manner set forth in Section 3.11. Any other benefit
derived from the
Collection Account and Escrow Account associated with the
receipt, disbursement
and accumulation of principal, interest, taxes, hazard
insurance, mortgage
blanket insurance, and like sources, shall accrue to the benefit
of the
Servicer, except that the Servicer shall not realize any
economic benefit from
any forced charging of services. The Servicer shall deposit in
the Collection
Account and Escrow Account the amount of any loss of principal
incurred in
respect of any such Permitted Investment made with funds in such
accounts
immediately upon realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in
the Distribution Account held by the Trust Administrator, shall
be for the
benefit of the Trust Administrator. The Trust Administrator
shall deposit in the
Distribution Account the amount of any loss of principal
incurred in respect of
any such Permitted Investment made with funds in such accounts
immediately upon
realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if
any
default occurs in the making of a payment due under any
Permitted Investment, or
if a default occurs in any other performance required under any
Permitted
Investment, the Trustee shall take such action as may be
appropriate to enforce
such payment or performance, including the institution and
prosecution of
appropriate proceedings.
(e) The Trustee and the Trust Administrator or their respective
Affiliates
are permitted to receive additional compensation that could be
deemed to be in
their respective economic self-interest for (i) serving as
investment adviser,
administrator, shareholder, servicing agent, custodian or
sub-custodian with
respect to certain of the Permitted Investments, (ii) using
Affiliates to effect
transactions in certain Permitted Investments and (iii)
effecting transactions
in certain Permitted Investments.
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Section 3.13. Maintenance of Hazard Insurance, Errors and
Omissions and
Fidelity Coverage.
(a) The Servicer shall cause to be maintained for each Mortgage
Loan fire
insurance with extended coverage on the related Mortgaged
Property in an amount
which is at least equal to the least of (i) the current
principal balance of
such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage
or loss to the improvements that are a part of such property on
a replacement
cost basis, (iii) the maximum insurable value of the
improvements which are a
part of such Mortgaged Property, and (iv) the amount determined
by applicable
federal or state law, in each case in an amount not less than
such amount as is
necessary to avoid the application of any coinsurance clause
contained in the
related hazard insurance policy. The Servicer shall also cause
to be maintained
fire insurance with extended coverage on each REO Property in an
amount which is
at least equal to the lesser of (i) the maximum insurable value
of the
improvements which are a part of such property and (ii) the
outstanding
principal balance of the related Mortgage Loan at the time it
became an REO
Property, plus accrued interest at the Mortgage Interest Rate
and related
Servicing Advances. The Servicer will comply in the performance
of this
Agreement with all reasonable rules and requirements of each
insurer under any
such hazard policies. Any amounts to be collected by any
Servicer under any such
policies (other than amounts to be applied to the restoration or
repair of the
property subject to the related Mortgage or amounts to be
released to the
Mortgagor in accordance with the procedures that the Servicer
would follow in
servicing loans held for its own account, subject to the terms
and conditions of
the related Mortgage and Mortgage Note) shall be deposited in
the Collection
Account, subject to withdrawal pursuant to Section 3.11. If the
Mortgagor fails
to provide Mortgage Loan hazard insurance coverage after thirty
(30) days of
Servicer's written notification, the Servicer shall put in place
such hazard
insurance coverage on the Mortgagor's behalf. Any out-of-pocket
expense or
advance made by the Servicer on such force placed hazard
insurance coverage
shall be deemed a Servicing Advance. Any cost incurred by any
Servicer in
maintaining any such insurance shall not, for the purpose of
calculating
distributions to the Trustee, be added to the unpaid principal
balance of the
related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so
permit. It is understood and agreed that no earthquake or other
additional
insurance is to be required of any Mortgagor other than pursuant
to such
applicable laws and regulations as shall at any time be in force
and as shall
require such additional insurance. If the Mortgaged Property or
REO Property is
at any time in an area identified in the Federal Register by the
Federal
Emergency Management Agency as having special flood hazards and
flood insurance
has been made available, the Servicer will cause to be
maintained a flood
insurance policy in respect thereof. Such flood insurance shall
be in an amount
equal to the lesser of (i) the minimum amount required, under
the terms of
coverage, to compensate for any damage or loss on a replacement
cost basis (or
the unpaid principal balance of the related Mortgage Loan if
replacement cost
coverage is not available for the type of building insured) and
(ii) the maximum
amount of insurance which is available under the Flood Disaster
Protection Act
of 1973, as amended. If at any time during the term of the
Mortgage Loan, the
Servicer determines in accordance with applicable law and
pursuant to the
Federal Emergency Management Agency Guides that a Mortgaged
Property is located
in a special flood hazard area and is not covered by flood
insurance or is
covered in an amount less than the amount required by the Flood
Disaster
Protection Act of 1973, as amended, the Servicer shall notify
the related
Mortgagor to obtain such flood insurance coverage, and if said
Mortgagor fails
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to obtain the required flood insurance coverage within
forty-five (45) days
after such notification, the Servicer shall immediately force
place the required
flood insurance on the Mortgagor's behalf. Any out-of-pocket
expense or advance
made by the Servicer on such force placed flood insurance
coverage shall be
deemed a Servicing Advance.
In the event that any Servicer shall obtain and maintain a
blanket policy
with an insurer having a General Policy Rating of "B" or better
in Best's (or
such other rating that is comparable to such rating) insuring
against hazard
losses on all of the Mortgage Loans, it shall conclusively be
deemed to have
satisfied its obligations as set forth in the first two
sentences of this
Section 3.13, it being understood and agreed that such policy
may contain a
deductible clause, in which case the Servicer shall, in the
event that there
shall not have been maintained on the related Mortgaged Property
or REO Property
a policy complying with the first two sentences of this Section
3.13, and there
shall have been one or more losses which would have been covered
by such policy,
deposit to the Collection Account from its own funds the amount
not otherwise
payable under the blanket policy because of such deductible
clause. In
connection with its activities as administrator and servicer of
the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of
itself, the
Trustee claims under any such blanket policy in a timely fashion
in accordance
with the terms of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a
policy or policies of insurance covering errors and omissions
for failure in the
performance of the Servicer's obligations under this Agreement.
The Servicer
shall provide the Trustee or Trust Administrator upon request
with copies of any
such insurance policies and fidelity bond. The Servicer shall be
deemed to have
complied with this provision if an Affiliate of the Servicer has
such errors and
omissions and fidelity bond coverage and, by the terms of such
insurance policy
or fidelity bond, the coverage afforded thereunder extends to
the Servicer. Any
such errors and omissions policy and fidelity bond shall by its
terms not be
cancelable without thirty days' prior written notice to the
Trustee. The
Servicer shall also cause each Subservicer to maintain a policy
of insurance
covering errors and omissions and a fidelity bond which would
meet such
requirements.
Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
The Servicer will, to the extent it has knowledge of any
conveyance or
prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not
the Mortgagor
remains or is to remain liable under the Mortgage Note and/or
the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage
Loan under the
"due-on-sale" clause, if any, applicable thereto; provided,
however, that the
Servicer shall not be required to take such action if, in its
sole business
judgment, the Servicer believes it is not in the best interests
of the Trust
Fund and shall not exercise any such rights if prohibited by law
from doing so.
If the Servicer reasonably believes it is unable under
applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set
forth in the
proviso to the preceding sentence apply, the Servicer will enter
into an
assumption and modification agreement from or with the person to
whom such
property has been conveyed or is proposed to be conveyed,
pursuant to which such
person becomes liable under the Mortgage Note, and, to the
extent permitted by
applicable state law, the Mortgagor remains liable thereon. The
Servicer is also
authorized to enter into a substitution of liability agreement
with such
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person, pursuant to which the original Mortgagor is released
from liability and
such person is substituted as the Mortgagor and becomes liable
under the
Mortgage Note; provided, that no such substitution shall be
effective unless
such person satisfies the underwriting criteria of the Servicer
and such
substitution is in the best interest of the Certificateholders
as determined by
the Servicer. In connection with any assumption, modification or
substitution,
the Servicer shall apply such underwriting standards and follow
such practices
and procedures as shall be normal and usual in its general
mortgage servicing
activities and as it applies to other mortgage loans owned
solely by it. The
Servicer shall not take or enter into any assumption and
modification agreement,
however, unless (to the extent practicable in the circumstances)
it shall have
received confirmation, in writing, of the continued
effectiveness of any
applicable hazard insurance policy, or a new policy meeting the
requirements of
this Section is obtained. Any fee collected by the Servicer in
respect of an
assumption or substitution of liability agreement will be
retained by the
Servicer as additional servicing compensation. In connection
with any such
assumption, no material term of the Mortgage Note (including but
not limited to
the related Mortgage Interest Rate and the amount of the
Scheduled Payment) may
be amended or modified, except as otherwise required pursuant to
the terms
thereof and in accordance with Section 3.01(c) herein. The
Servicer shall notify
the Trustee that any such substitution, modification or
assumption agreement has
been completed by forwarding to the Trustee the executed
original of such
substitution or assumption agreement, which document shall be
added to the
related Mortgage File and shall, for all purposes, be considered
a part of such
Mortgage File to the same extent as all other documents and
instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this
Agreement, the Servicer shall not be deemed to be in default,
breach or any
other violation of its obligations hereunder by reason of any
assumption of a
Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any
assumption which the Servicer may be restricted by law from
preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term
"assumption" is
deemed to also include a sale (of the Mortgaged Property)
subject to the
Mortgage that is not accompanied by an assumption or
substitution of liability
agreement.
Section 3.15. Realization upon Defaulted Mortgage Loans.
The Servicer shall use its best efforts, consistent with
Accepted
Servicing Practices, to foreclose upon or otherwise comparably
convert (which
may include an acquisition of REO Property) the ownership of
properties securing
such of the Mortgage Loans as come into and continue in default
and as to which
no satisfactory arrangements can be made for collection of
delinquent payments
pursuant to Section 3.07, and which are not released from this
Agreement
pursuant to any other provision hereof. The Servicer shall use
reasonable
efforts to realize upon such defaulted Mortgage Loans in such
manner as will
maximize the receipt of principal and interest by the Trustee,
taking into
account, among other things, the timing of foreclosure
proceedings. The
foregoing is subject to the provisions that, in any case in
which a Mortgaged
Property shall have suffered damage from an uninsured cause, the
Servicer shall
not be required to expend its own funds toward the restoration
of such property
unless it shall determine in its sole discretion (i) that such
restoration will
increase the net proceeds of liquidation of the related Mortgage
Loan to the
Trustee, after reimbursement to itself for such expenses, and
(ii) that such
expenses will be recoverable by the Servicer through Insurance
Proceeds,
Condemnation Proceeds or Liquidation Proceeds from the related
Mortgaged
Property,
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as contemplated in Section 3.11. The Servicer shall be
responsible for all other
costs and expenses incurred by it in any such proceedings;
provided, however,
that it shall be entitled to reimbursement thereof from the
related property, as
contemplated in Section 3.11.
The proceeds of any Liquidation Event or REO Disposition, as
well as any
recovery resulting from a partial collection of Insurance
Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO
Property, will be
applied in the following order of priority: first, to reimburse
the Servicer or
any Subservicer for any related unreimbursed Servicing Advances,
pursuant to
Section 3.11 or 3.17; second, to accrued and unpaid interest on
the Mortgage
Loan or REO Imputed Interest, at the Mortgage Interest Rate, to
the date of the
liquidation or REO Disposition, or to the Due Date prior to the
Remittance Date
on which such amounts are to be distributed if not in connection
with a
Liquidation Event or REO Disposition; third, to reimburse any
Servicer for any
related unreimbursed P&I Advances, pursuant to Section 3.11;
and fourth, as a
recovery of principal of the Mortgage Loan. If the amount of the
recovery so
allocated to interest is less than a full recovery thereof, that
amount will be
allocated as follows: first, to unpaid Servicing Fees; and
second, as interest
at the Mortgage Interest Rate (net of the Servicing Fee Rate).
The portion of
the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the
Servicer or any Subservicer pursuant to Section 3.11 or 3.17.
The portions of
the recovery so allocated to interest at the Mortgage Interest
Rate (net of the
Servicing Fee Rate) and to principal of the Mortgage Loan shall
be applied as
follows: first, to reimburse the Servicer or any Subservicer for
any related
unreimbursed Servicing Advances in accordance with Section 3.11
or 3.17, and
second, to the Trust Administrator for distribution in
accordance with the
provisions of Section 4.02, subject to the last paragraph of
Section 3.17 with
respect to certain excess recoveries from an REO
Disposition.
Notwithstanding anything to the contrary contained herein, in
connection
with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event
the Servicer has received actual notice of, or has actual
knowledge of the
presence of, hazardous or toxic substances or wastes on the
related Mortgaged
Property, or if the Trustee otherwise requests, the Servicer
shall cause an
environmental inspection or review of such Mortgaged Property to
be conducted by
a qualified inspector. Upon completion of the inspection, the
Servicer shall
promptly provide the Trustee and the Depositor with a written
report of the
environmental inspection.
After reviewing the environmental inspection report, the
Depositor shall
determine how the Servicer shall proceed with respect to the
Mortgaged Property.
In the event (a) the environmental inspection report indicates
that the
Mortgaged Property is contaminated by hazardous or toxic
substances or wastes
and (b) the Depositor directs the Servicer to proceed with
foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall
be reimbursed
for all reasonable costs associated with such foreclosure or
acceptance of a
deed in lieu of foreclosure and any related environmental
clean-up costs, as
applicable, from the related Liquidation Proceeds, or if the
Liquidation
Proceeds are insufficient to fully reimburse the Servicer, the
Servicer shall be
entitled to be reimbursed from amounts in the Collection Account
pursuant to
Section 3.11. In the event the Depositor directs the Servicer
not to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure,
the Servicer
shall be reimbursed from general collections for all Servicing
Advances made
with respect to the related Mortgaged Property from the
Collection Account
pursuant to Section 3.11. Neither the Trustee nor
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<PAGE>
the Master Servicer shall be responsible for any direction given
by the
Depositor to the Servicer pursuant to this paragraph.
Section 3.16. Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the
Servicer of a notification that payment in full shall be
escrowed in a manner
customary for such purposes, the Servicer will, within five (5)
Business Days of
the payment in full, notify the Trustee or the Trust
Administrator, as
applicable, by a certification (which certification shall
include a statement to
the effect that all amounts received or to be received in
connection with such
payment which are required to be deposited in the Collection
Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing
Officer and shall
request delivery to it of the Custodial File by completing a
Request for Release
(in the form of Exhibit J or in an electronic format acceptable
to the Trust
Administrator). Upon receipt of such certification and Request
for Release, the
Trustee or Trust Administrator shall promptly release the
related Custodial File
to the Servicer within three (3) Business Days. No expenses
incurred in
connection with any instrument of satisfaction or deed of
reconveyance shall be
chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure
of any Mortgage Loan, including, for this purpose, collection
under any
Insurance Policy relating to the Mortgage Loans, the Trustee or
Trust
Administrator, as applicable, shall, upon request of the
Servicer and delivery
to the Trustee or Trust Administrator, as applicable, of a
Request for Release
(in the form of Exhibit J or in an electronic format acceptable
to the Trust
Administrator), release the related Custodial File to the
Servicer, and the
Trustee or Trust Administrator shall, at the direction of the
Servicer, execute
such documents provided to it as shall be necessary to the
prosecution of any
such proceedings and the Servicer shall retain the Mortgage File
in trust for
the benefit of the Trustee. Such Request for Release shall
obligate the Servicer
to return each and every document previously requested from the
Custodial File
to the Trustee or Trust Administrator, as applicable, when the
need therefor by
the Servicer no longer exists, unless the Mortgage Loan has been
liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been
de
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