POOLING AND SERVICING AGREEMENT
Relating to
CENTEX HOME EQUITY LOAN TRUST 2005-B
Among
CHEC FUNDING, LLC,
as Depositor
,
CENTEX HOME EQUITY COMPANY, LLC,
as
Seller,
HARWOOD STREET FUNDING II, LLC,
as
Conduit Seller,
CENTEX HOME EQUITY COMPANY, LLC,
as
Servicer,
and
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION,
as Trustee
Dated as of March 1, 2005
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION
2
Section 1.01.
Definitions.
2
Section 1.02.
Use of Words and Phrases.
38
Section 1.03.
Captions, Table of Contents.
39
Section 1.04.
Opinions.
39
ARTICLE II ESTABLISHMENT AND ORGANIZATION OF THE TRUST
40
Section 2.01.
Establishment of the Trust.
40
Section 2.02.
Office.
40
Section 2.03.
Purposes and Powers.
40
Section 2.04.
Appointment of the Trustee; Declaration of Trust.
40
Section 2.05.
Expenses of the Trust.
40
Section 2.06.
Ownership of the Trust.
40
Section 2.07.
Situs of the Trust.
41
Section 2.08.
Designation of Interests in REMICs.
41
Section 2.09.
Miscellaneous REMIC Provisions.
47
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
DEPOSITOR, THE SERVICER AND THE SELLERS; COVENANT OF SELLER
TO CONVEY HOME EQUITY LOANS
49
Section 3.01.
Representations and Warranties of the Depositor.
49
Section 3.02.
Representations and Warranties of the Servicer.
51
Section 3.03.
Representations and Warranties of the Sellers.
53
Section 3.04.
Covenants of Sellers to Take Certain Actions with Respect to the
Home
Equity Loans in Certain Situations.
56
Section 3.05.
Sale Treatment of the Home Equity Loans and Qualified
Replacement
Mortgages.
65
Section 3.06.
Acceptance by Trustee; Certain Substitutions of Home Equity
Loans;
Certification by Trustee.
70
Section 3.07.
High-Cost Home Loans.
72
Section 3.08.
Custodian.
72
Section 3.09.
Cooperation Procedures.
72
Section 3.10.
Payment of Taxes, Insurance and Other Charges.
73
ARTICLE IV ISSUANCE AND SALE OF CERTIFICATES
74
Section 4.01.
Issuance of Certificates.
74
Section 4.02.
Sale of Certificates.
74
ARTICLE V CERTIFICATES AND TRANSFER OF INTERESTS
75
Section 5.01.
Terms.
75
Section 5.02.
Forms.
75
Section 5.03.
Execution, Authentication and Delivery.
75
Section 5.04.
Registration and Transfer of Certificates.
76
Section 5.05.
Mutilated, Destroyed, Lost or Stolen Certificates.
78
Section 5.06.
Persons Deemed Owners.
79
Section 5.07.
Cancellation.
79
Section 5.08.
Limitation on Transfer of Ownership Rights.
79
Section 5.09.
Assignment of Rights.
81
ARTICLE VI COVENANTS
82
Section 6.01.
Distributions.
82
Section 6.02.
Money for Distributions to be Held in Trust; Withholding.
82
Section 6.03.
Protection of Trust Estate.
83
Section 6.04.
Performance of Obligations.
84
Section 6.05.
Negative Covenants.
84
Section 6.06.
No Other Powers.
85
Section 6.07.
Limitation of Suits.
85
Section 6.08.
Unconditional Rights of Owners to Receive Distributions.
85
Section 6.09.
Rights and Remedies Cumulative.
86
Section 6.10.
Delay or Omission Not Waiver.
86
Section 6.11.
Control by Owners.
86
Section 6.12.
Indemnification by CHEC.
86
ARTICLE VII ACCOUNTS, DISBURSEMENTS AND RELEASES
88
Section 7.01.
Collection of Money.
88
Section 7.02.
Establishment of Accounts.
88
Section 7.03.
Flow of Funds.
88
Section 7.04.
Supplemental Interest Reserve Fund; WAC Excess.
93
Section 7.05.
Investment of Accounts.
94
Section 7.06.
Payment of Trust Expenses.
95
Section 7.07.
Eligible Investments.
95
Section 7.08.
Accounting and Directions by Trustee.
97
Section 7.09.
Reports by Trustee to Owners.
98
Section 7.10.
Reports by Trustee.
101
Section 7.11.
Allocation of Losses.
102
Section 7.12.
Cap Agreement Reserve Fund.
102
ARTICLE VIII SERVICING AND ADMINISTRATION OF HOME EQUITY
LOANS
105
Section 8.01.
Servicer and Sub-Servicers.
105
Section 8.02.
Collection of Certain Home Equity Loan Payments.
106
Section 8.03.
Sub-Servicing Agreements Between Servicer and Sub-Servicers.
106
Section 8.04.
Successor Sub-Servicers.
107
Section 8.05.
Liability of Servicer; Indemnification.
107
Section 8.06.
No Contractual Relationship Between Sub-Servicer, Trustee or the
Owners.
108
Section 8.07.
Assumption or Termination of Sub-Servicing Agreement by
Trustee.
108
Section 8.08.
Principal and Interest Account.
108
Section 8.09.
Delinquency Advances and Servicing Advances.
110
Section 8.10.
Compensating Interest; Repurchase of Home Equity Loans.
111
Section 8.11.
Maintenance of Insurance.
112
Section 8.12.
Due-on-Sale Clauses; Assumption and Substitution Agreements.
113
Section 8.13.
Realization Upon Defaulted Home Equity Loans; Workout of Home
Equity
Loans.
114
Section 8.14.
Trustee to Cooperate; Release of Files.
115
Section 8.15.
Servicing Compensation.
116
Section 8.16.
Annual Statement as to Compliance.
116
Section 8.17.
Annual Independent Certified Public Accountants’ Reports.
117
Section 8.18.
Access to Certain Documentation and Information Regarding the
Home
Equity Loans.
117
Section 8.19.
Assignment of Agreement.
117
Section 8.20.
Removal of Servicer; Retention of Servicer; Resignation of
Servicer.
118
Section 8.21.
Inspections; Errors and Omissions Insurance.
122
Section 8.22.
Additional Servicing Responsibilities for Second Mortgage
Loans.
122
Section 8.23.
The Group II and Group III Home Equity Loans.
123
Section 8.24.
Merger, Conversion, Consolidation or Succession to Business of
Servicer.
123
Section 8.25.
Notices of Material Events.
123
Section 8.26.
Indemnification by the Servicer.
124
Section 8.27.
Reports on Foreclosure and Abandonment of Properties.
124
Section 8.28.
Reports to the Securities and Exchange Commission.
125
Section 8.29.
Advance Facility.
128
ARTICLE IX TERMINATION OF TRUST
131
Section 9.01.
Termination of Trust.
131
Section 9.02.
Termination Upon Option of the Owner of the Class X-IO
Certificates.
131
Section 9.03.
Disposition of Proceeds.
132
ARTICLE X THE TRUSTEE
133
Section 10.01.
Certain Duties and Responsibilities.
133
Section 10.02.
Removal of Trustee for Cause.
135
Section 10.03.
Certain Rights of the Trustee.
136
Section 10.04.
Not Responsible for Recitals or Issuance of Certificates.
138
Section 10.05.
May Hold Certificates.
138
Section 10.06.
Money Held in Trust.
139
Section 10.07.
Compensation and Reimbursement.
139
Section 10.08.
Corporate Trustee Required; Eligibility.
139
Section 10.09.
Resignation and Removal; Appointment of Successor.
140
Section 10.10.
Acceptance of Appointment by Successor Trustee.
141
Section 10.11.
Merger, Conversion, Consolidation or Succession to Business of
the
Trustee.
141
Section 10.12.
Reporting; Withholding.
142
Section 10.13.
Indemnification and Liability of the Trustee.
142
Section 10.14.
Appointment of Co-Trustee or Separate Trustee.
143
Section 10.15.
Appointment of Custodians.
144
ARTICLE XI MISCELLANEOUS
145
Section 11.01.
Compliance Certificates and Opinions.
145
Section 11.02.
Form of Documents Delivered to the Trustee.
145
Section 11.03.
Acts of Owners.
146
Section 11.04.
Notices, etc. to Trustee.
146
Section 11.05.
Notices and Reports to Owners; Waiver of Notices.
147
Section 11.06.
Rules by Trustee.
147
Section 11.07.
Successors and Assigns.
147
Section 11.08.
Severability.
148
Section 11.09.
Benefits of Agreement.
148
Section 11.10.
Legal Holidays.
148
Section 11.11.
Governing Law; Submission to Jurisdiction.
148
Section 11.12.
Counterparts.
149
Section 11.13.
Usury.
149
Section 11.14.
Amendment.
149
Section 11.15.
Paying Agent; Appointment and Acceptance of Duties.
150
Section 11.16.
REMIC Status.
151
Section 11.17.
Additional Limitation on Action and Imposition of Tax.
153
Section 11.18.
Appointment of Tax Matters Person.
153
Section 11.19.
Notices.
154
Section 11.20.
Rule 144A Information.
156
SCHEDULE I-A
SCHEDULE OF THE GROUP I HOME EQUITY LOANS
SCHEDULE I-B
SCHEDULE OF THE GROUP II HOME EQUITY LOANS
SCHEDULE I-C
SCHEDULE OF THE GROUP III HOME EQUITY LOANS
SCHEDULE I-D
[RESERVED]
SCHEDULE I-E
SELLER SCHEDULE OF HOME EQUITY LOANS
SCHEDULE I-F
CONDUIT SCHEDULE OF HOME EQUITY LOANS
SCHEDULE I-G
INVESTMENT INSTRUCTIONS TO TRUSTEE
EXHIBIT A-1
FORM OF CLASS AF-1 CERTIFICATE
EXHIBIT A-2
FORM OF CLASS AF-2 CERTIFICATE
EXHIBIT A-3
FORM OF CLASS AF-3 CERTIFICATE
EXHIBIT A-4
FORM OF CLASS AF-4 CERTIFICATE
EXHIBIT A-5
FORM OF CLASS AF-5 CERTIFICATE
EXHIBIT A-6
FORM OF CLASS AF-6 CERTIFICATE
EXHIBIT A-7
FORM OF CLASS AV-1 CERTIFICATE
EXHIBIT A-8
FORM OF CLASS AV-2 CERTIFICATE
EXHIBIT A-9
FORM OF CLASS AV-3 CERTIFICATE
EXHIBIT A-10
FORM OF CLASS AV-4 CERTIFICATE
EXHIBIT A-11
[RESERVED]
EXHIBIT A-12
FORM OF CLASS M-1 CERTIFICATE
EXHIBIT A-13
FORM OF CLASS M-2 CERTIFICATE
EXHIBIT A-14
FORM OF CLASS M-3 CERTIFICATE
EXHIBIT A-15
FORM OF CLASS M-4 CERTIFICATE
EXHIBIT A-16
FORM OF CLASS M-5 CERTIFICATE
EXHIBIT A-17
FORM OF CLASS M-6 CERTIFICATE
EXHIBIT A-18
FORM OF CLASS M-7 CERTIFICATE
EXHIBIT A-19
FORM OF CLASS B CERTIFICATE
EXHIBIT B
FORM OF CLASS X-IO CERTIFICATE
EXHIBIT C
FORM OF CLASS R CERTIFICATE
EXHIBIT D
FORM OF CERTIFICATE RE: HOME EQUITY LOANS PREPAID IN
FULL AFTER THE CUT-OFF DATE
EXHIBIT E-1
FORM OF TRUSTEE’S ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT E-2
FORM OF CUSTODIAN’S ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT E-3
FORM OF DELAYED DELIVERY CERTIFICATION
EXHIBIT F
FORM OF POOL CERTIFICATION
EXHIBIT G
FORM OF DELIVERY ORDER
EXHIBIT H
FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
EXHIBIT I-1
FORM OF CERTIFICATE REGARDING TRANSFER (ACCREDITED
INVESTOR)
EXHIBIT I-2
FORM OF CERTIFICATE OF TRANSFER (RULE 144A)
EXHIBIT J
HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
EXHIBIT K
[RESERVED]
EXHIBIT L
[RESERVED]
EXHIBIT M
FORM OF LETTER REGARDING REPORTING OBLIGATIONS
UNDER THE SECURITIES EXCHANGE ACT OF 1934
EXHIBIT N
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT O
FORM OF CERTIFICATION TO BE PROVIDED BY THE SERVICER
WITH FORM 10-K
EXHIBIT P
FORM OF CERTIFICATION TO BE PROVIDED TO DEPOSITOR BY
THE TRUSTEE
EXHIBIT Q
FORM OF CERTIFICATION TO BE PROVIDED TO DEPOSITOR
AND TRUSTEE BY SERVICER
EXHIBIT R
GROUP II CAP AGREEMENT AND NOVATION AGREEMENT
EXHIBIT S
GROUP III CAP AGREEMENT AND NOVATION AGREEMENT
POOLING AND SERVICING AGREEMENT, relating to
CENTEX HOME EQUITY LOAN TRUST 2005-B, dated as of March 1, 2005
by and among CHEC FUNDING, LLC, a Delaware limited liability
company, in its capacity as the depositor (the
“Depositor”), CENTEX HOME EQUITY COMPANY, LLC, a
Delaware limited liability company, formerly Centex Credit
Corporation, a Nevada corporation (“CHEC”) in its
capacities as the seller (in such capacity, the
“Seller”) and as the servicer (in such capacity, the
“Servicer”), HARWOOD STREET FUNDING II, LLC, a
Delaware limited liability company (the “Conduit
Seller”; together with the Seller, the
“Sellers”) and JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, a New York banking corporation, in its capacity as
the trustee (the “Trustee”).
WHEREAS, the Seller wishes to establish a trust
and three subtrusts and provide for the allocation and sale of
the beneficial interests therein and the maintenance and
distribution of the trust estate;
WHEREAS, the Seller and the Conduit Seller wish
to sell to the Depositor, the Depositor wishes to purchase from
the Seller and the Conduit Seller and to sell to the Trustee,
and the Trustee wishes to purchase, the Home Equity Loans;
WHEREAS, the Servicer has agreed to service the
Home Equity Loans, which constitute the principal assets of the
trust estate;
WHEREAS, all things necessary to make the
Certificates, when executed and authenticated by the Trustee,
valid instruments, and to make this Agreement a valid agreement,
in accordance with their and its terms, have been done; and
WHEREAS, JPMorgan Chase Bank, National
Association is willing to serve in the capacity of Trustee
hereunder.
NOW, THEREFORE, in consideration of the premises
and the mutual agreements herein contained, the Depositor, the
Seller, the Conduit Seller, the Servicer, and the Trustee hereby
agree as follows:
CONVEYANCE
The Seller with respect to the Seller Home
Equity Loans and the Conduit Seller with respect to the Conduit
Home Equity Loans each hereby bargains, sells, conveys, assigns
and transfers to the Depositor, in trust, without recourse and
for the exclusive benefit of the Owners of the Certificates, all
of its right, title and interest in and to (a) all principal
collected and interest due on the Home Equity Loans on and after
the Cut-Off Date and any and all other benefits accruing from
the Home Equity Loans which the Depositor is causing to be
delivered to the Custodian on behalf of the Trustee herewith,
together with the related Home Equity Loan documents and the
Depositor’s interest in any Property, and all payments
thereon and proceeds of the conversion, voluntary or
involuntary, of the foregoing, and (b) proceeds of all the
foregoing (including, but not by way of limitation, all proceeds
of any mortgage insurance, flood insurance, hazard insurance and
title insurance policy relating to the Home Equity Loans, cash
proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations
and receivables which at any time constitute all or part of or
are included in the proceeds of any of the foregoing) to pay the
Certificates as specified herein (the “Home Equity Loan
Assets”).
The Depositor, concurrently with the execution
and delivery hereof, hereby bargains, sells, conveys, assigns
and transfers to the Trustee for the benefit of the Owners of
the Certificates, without recourse, all the right, title and
interest of the Depositor in and to the Trust Estate.
The Trustee acknowledges such sale, accepts the
trusts hereunder in accordance with the provisions hereof and
agrees to perform the duties herein in accordance with the
provisions of the Operative Documents.
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01.
Definitions.
For all purposes of this Agreement, the
following terms shall have the meanings set forth below, unless
the context clearly indicates otherwise:
“Account”: Any account established
in accordance with Section 7.02 or 8.08 hereof.
“Adjusted Pool Net WAC”: With
respect to any Distribution Date, the weighted average (based on
the Loan Balances of the Home Equity Loans in each Group as of
the beginning of the related Remittance Period) of the Group I
Net WAC Cap, the Group II Net WAC Cap and the Group III Net WAC
Cap. For this purpose, with respect to applying this rate
to a Fixed Rate Certificate, the adjustment in clause (ii) of
each of the definitions of Group II Net WAC Cap and Group III
Net WAC Cap shall not apply and with respect to applying this
rate to the Class AV-1 Certificates, Class AV-2 Certificates,
Class AV-3 Certificates or Class AV-4 Certificates, the Group I
Net WAC Cap shall be multiplied by a fraction the numerator of
which is 30 and the denominator of which is the actual number of
days in the related Interest Period.
“Advance Facility”: As defined in
Section 8.29(a) hereof.
“Advancing Person”: As defined in
Section 8.29(a) hereof.
“Affiliate”: With respect to any
specified Person, any other Person controlling or controlled by
or under common control with such specified Person. For
the purposes of this definition, “control” when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise and the terms “controlling”
and “controlled” have meanings correlative to the
foregoing.
“Aggregate Principal Amount”: As to
any Distribution Date, the sum of the Basic Principal Amounts
for each Home Equity Loan Group.
“Agreement”: This Pooling and
Servicing Agreement, as it may be amended from time to time,
including the Exhibits and Schedules hereto.
“Applied Realized Loss Amounts”: As
to any Distribution Date, an amount equal to the excess, if any,
of (i) the aggregate of the Certificate Principal Balances of
the Offered Certificates, after giving effect to all
distributions on such Distribution Date over (ii) the Pool
Balance as of the last day of the related Remittance Period.
“Appraised Value”: The appraised
value of any Property based upon the appraisal made at the time
of the origination of the related Home Equity Loan, or, in the
case of a Home Equity Loan which is a purchase money mortgage,
the sales price of the Property, if such sales price is less
than such appraised value.
“ARM Principal Distribution Amount”:
With respect to any Distribution Date, the excess of
(i) the Senior Principal Distribution Amount for that
Distribution Date over (ii) the Group I Principal
Distribution Amount for that Distribution Date.
“Authorized Officer”: With respect
to any Person, any officer of such Person who is authorized to
act for such Person in matters relating to this Agreement, and
whose action is binding upon such Person; with respect to the
Depositor, the Sellers and the Servicer, initially including
those individuals whose names appear on the lists of Authorized
Officers delivered at the Closing; with respect to the Trustee,
any officer assigned to the Corporate Trust Office (or any
successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, Assistant Secretary or any other
officer of the Trustee customarily performing functions similar
to those performed by any of the above designated officers and
having direct responsibility for the administration of this
Agreement or any other officers of the Trustee to whom a matter
arising under this Agreement may be referred.
“Basic Principal Amount”: With
respect to the related Home Equity Loan Group and each
Distribution Date shall be the sum of (without duplication):
(a)
the principal portion of all scheduled monthly
payments on the Home Equity Loans related to the Home Equity
Loan Group actually received by the Servicer during the related
Remittance Period and any Prepayments on the Home Equity Loans
made on behalf of the obligors on Home Equity Loans in the
related Home Equity Loan Group actually received by the Servicer
during the related Remittance Period in each case to the extent
the amounts are received by the Trustee on or prior to the
Monthly Remittance Date;
(b)
the outstanding principal balance of each Home
Equity Loan in the related Home Equity Loan Group that was
purchased by the Seller or the Servicer on or prior to the
related Monthly Remittance Date in each case to the extent the
amounts are received by the Trustee on or prior to the Monthly
Remittance Date;
(c)
any Substitution Amounts relating to principal,
delivered by the Seller on the related Monthly Remittance Date
in connection with a substitution of a Home Equity Loan in the
related Home Equity Loan Group, in each case to the extent the
amounts are received by the Trustee on or prior to the Monthly
Remittance Date;
(d)
all Net Liquidation Proceeds and Recoveries
actually collected by or on behalf of the Servicer with respect
to the Home Equity Loans in the related Home Equity Loan Group
during the related Remittance Period (to the extent the Net
Liquidation Proceeds and Recoveries relate to principal) in each
case to the extent the amounts are received by the Trustee on or
prior to the Monthly Remittance Date; and
(e)
the principal portion of the proceeds received
by the Trustee with respect to the related Home Equity Loan
Group upon termination of the Trust.
“Business Day”: Any day other than a
Saturday, Sunday or a day on which commercial banking
institutions in New York, New York, Dallas, Texas, the city in
which the Corporate Trust Office is located or, with respect to
the obligations of the Custodian hereunder, the State of Texas
or any other state where the principal office of the Custodian
is located, are authorized or obligated by law or executive
order to be closed.
“Cap Agreement”: The Group II Cap
Agreement or the Group III Cap Agreement, as applicable.
“Cap Agreement Proceeds”: As to any
Distribution Date and each Cap Agreement, an amount equal to the
lesser of (1) the amount of any payment received by the
Trustee on the applicable Cap Agreement for such date, and
(2) the product of (A) the excess, if any, of LIBOR
(subject to a maximum rate of 8.77038% per annum in the case of
the Group II Cap Agreement, and 8.73781% per annum in the case
of the Group III Cap Agreement), determined as provided in such
Cap Agreement, over the related Strike Rate for such
Distribution Date and Cap Agreement, (B) the applicable
Scheduled Notional Amount for such Distribution Date as
indicated in the applicable Cap Agreement and (C) a
fraction, the numerator of which is the actual number of days
elapsed from the previous Distribution Date to but excluding the
current Distribution Date (or, for the first Distribution Date,
the actual number of days elapsed from the Startup Day to but
excluding the first Distribution Date), and the denominator of
which is 360.
“Cap Agreement Reserve Fund”: The
Eligible Account established pursuant to Section 7.02(a) hereof
and maintained as described in Section 7.12.
“Cap Counterparty”: The Royal
Bank of Scotland plc.
“Carryover Certificate”: The Fixed
Rate Certificates and the Variable Rate Certificates.
“Certificate”: Any one of the
Offered Certificates, the Class X-IO Certificates or the Class R
Certificates, each representing the interests and the rights
described in this Agreement.
“Certificate Account”: The
segregated certificate account established in accordance with
Section 7.02(a) hereof and maintained at the Corporate Trust
Office entitled “JPMorgan Chase Bank, National
Association, as Trustee on behalf of the Owners of the Centex
Home Equity Loan Trust 2005-B, Centex Home Equity Loan
Asset-Backed Certificates.” The Certificate Account
shall be an Eligible Account.
“Certificate Group” or
“Group”: The Group I Certificates, the Group II
Certificates or the Group III Certificates, as the case may
be.
“Certificate Principal Balance”: As
of the Startup Day as to each of the following Classes of
Offered Certificates the principal balances thereof, as
follows:
|
Class AF-l
Certificates
|
-
|
$67,500,000
|
|
Class AF-2
Certificates
|
-
|
$16,000,000
|
|
Class AF-3
Certificates
|
-
|
$16,550,000
|
|
Class AF-4
Certificates
|
-
|
$37,500,000
|
|
Class AF-5
Certificates
|
-
|
$20,370,000
|
|
Class AF-6
Certificates
|
-
|
$16,000,000
|
|
Class AV-1
Certificates
|
-
|
$73,000,000
|
|
Class AV-2
Certificates
|
-
|
$338,000,000
|
|
Class AV-3
Certificates
|
-
|
$232,500,000
|
|
Class AV-4
Certificates
|
-
|
$9,080,000
|
|
Class M-1
Certificates
|
-
|
$35,000,000
|
|
Class M-2
Certificates
|
-
|
$33,000,000
|
|
Class M-3
Certificates
|
-
|
$20,500,000
|
|
Class M-4
Certificates
|
-
|
$18,500,000
|
|
Class M-5
Certificates
|
-
|
$16,000,000
|
|
Class M-6
Certificates
|
-
|
$18,000,000
|
|
Class M-7
Certificates
|
-
|
$15,000,000
|
|
Class B Certificates
|
-
|
$17,500,000
|
As of any time of determination after the
Startup Day, the Certificate Principal Balance of a Class of
Offered Certificates shall be the Certificate Principal Balance
of such Class as of the Startup Day less the aggregate of all
amounts actually distributed to such Class in reduction of such
Class’s Certificate Principal Balance pursuant to Section
7.03 hereof on all prior Distribution Dates and, in the case of
any Class of Subordinate Certificates, reduced by any Applied
Realized Loss Amounts and increased by any Recoveries allocated
to such Class on prior Distribution Dates.
The Class X-IO Certificates and the Class R
Certificates do not have a Certificate Principal Balance.
“Certificate Rate”: Any of the Class
AF-1 Certificate Rate, the Class AF-2 Certificate Rate, the
Class AF-3 Certificate Rate, the Class AF-4 Certificate Rate,
the Class AF-5 Certificate Rate, the Class AF-6 Certificate
Rate, the Class AV-1 Certificate Rate, the Class AV-2
Certificate Rate, the Class AV-3 Certificate Rate, the Class
AV-4 Certificate Rate, the Class M-1 Certificate Rate, the Class
M-2 Certificate Rate, the Class M-3 Certificate Rate, the Class
M-4 Certificate Rate, the Class M-5 Certificate Rate, the Class
M-6 Certificate Rate, the Class M-7 Certificate Rate or the
Class B Certificate Rate.
“CHEC”: Centex Home Equity Company,
LLC, a Delaware limited liability company.
“Class”: Any class of the Offered
Certificates or the Class X-IO Certificates or the Class R
Certificates.
“Class AF-1 Certificate”: Any one of
the Certificates designated on the face thereof as a Class AF-l
Certificate, substantially in the form annexed hereto as Exhibit
A-1 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a “regular
interest” in the Master REMIC created hereunder for
purposes of the REMIC Provisions.
“Class AF-1 Certificate Rate”: With
respect to any Distribution Date and the Class AF-1
Certificates, the lesser of (A) 4.0500% per annum (or
4.5500% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group I Net WAC Cap for the
Distribution Date.
“Class AF-2 Certificate”: Any one of
the Certificates designated on the face thereof as a Class AF-2
Certificate, substantially in the form annexed hereto as Exhibit
A-2 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a “regular
interest” in the Master REMIC created hereunder for
purposes of the REMIC Provisions.
“Class AF-2 Certificate Rate”: With
respect to any Distribution Date and the Class AF-2
Certificates, the lesser of (A) 4.2400% per annum (or
4.7400% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group I Net WAC Cap for the
Distribution Date.
“Class AF-3 Certificate”: Any one of
the Certificates designated on the face thereof as a Class AF-3
Certificate, substantially in the form annexed hereto as Exhibit
A-3 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a “regular
interest” in the Master REMIC created hereunder for
purposes of the REMIC Provisions.
“Class AF-3 Certificate Rate”: With
respect to any Distribution Date and the Class AF-3
Certificates, the lesser of (A) 4.4150% per annum (or
4.9150% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group I Net WAC Cap for the
Distribution Date.
“Class AF-4 Certificate”: Any one of
the Certificates designated on the face thereof as a Class AF-4
Certificate, substantially in the form annexed hereto as Exhibit
A-4 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a “regular
interest” in the Master REMIC created hereunder for
purposes of the REMIC Provisions.
“Class AF-4 Certificate Rate”: With
respect to any Distribution Date and the Class AF-4
Certificates, the lesser of (A) 4.8930% per annum (or
5.3930% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group I Net WAC Cap for the
Distribution Date.
“Class AF-5 Certificate”: Any one of
the Certificates designated on the face thereof as a Class AF-5
Certificate, substantially in the form annexed hereto as Exhibit
A-5 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a “regular
interest” in the Master REMIC created hereunder for
purposes of the REMIC Provisions.
“Class AF-5 Certificate Rate”: With
respect to any Distribution Date and the Class AF-5
Certificates, the lesser of (A) 5.3100% per annum (or
5.8100% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group I Net WAC Cap for the
Distribution Date.
“Class AF-6 Calculation Percentage”:
For any Distribution Date will be the fraction, expressed as a
percentage, the numerator of which is the Certificate Principal
Balance of the Class AF-6 Certificates, and the denominator of
which is the total of the Certificate Principal Balances of the
Group I Certificates, in each case before giving effect to any
distributions in reduction of the Certificate Principal Balances
of the Group I Certificates pursuant to Section 7.03 hereof.
“Class AF-6 Certificate”: Any one of
the Certificates designated on the face thereof as a Class AF-6
Certificate, substantially in the form annexed hereto as Exhibit
A-6 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a “regular
interest” in the Master REMIC created hereunder for
purposes of the REMIC Provisions.
“Class AF-6 Certificate Rate”: With
respect to any Distribution Date and the Class AF-6
Certificates, the lesser of (A) 4.8650% per annum (or
5.3650% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group I Net WAC Cap for the
Distribution Date.
“Class AF-6 Lockout Distribution
Amount”: For any Distribution Date will be an amount equal
to the product of (1) the applicable Class AF-6 Lockout
Percentage for that Distribution Date, (2) the Class AF-6
Calculation Percentage and (3) the Group I Principal
Distribution Amount for that Distribution Date. In no
event shall the Class AF-6 Lockout Distribution Amount exceed
the outstanding Certificate Principal Balance of the Class AF-6
Certificates or the Group I Principal Distribution Amount for
the Distribution Date.
“Class AF-6 Lockout Percentage”: For
each Distribution Date will be as follows:
|
Distribution Date
|
Lockout Percentage
|
|
April 2005
through March 2008
|
0%
|
|
April 2008
through March 2010
|
45%
|
|
April 2010
through March 2011
|
80%
|
|
April 2011
through March 2012
|
100%
|
|
April 2012
and thereafter
|
300%
|
“Class AV-1 Certificate”: Any
one of the Certificates designated on the face thereof as a
Class AV-1 Certificate, substantially in the form annexed hereto
as Exhibit A-7 authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein and
each evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class AV-1 Certificate Rate”: With
respect to any Distribution Date and the Class AV-1
Certificates, the lesser of (A) the sum of (1) LIBOR
and (2) 0.1550% per annum (or 0.3100% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Group II Net WAC Cap for the Distribution Date.
“Class AV-2 Certificate”: Any one of
the Certificates designated on the face thereof as a Class AV-2
Certificate, substantially in the form annexed hereto as Exhibit
A-8 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a “regular
interest” in the Master REMIC created hereunder for
purposes of the REMIC Provisions.
“Class AV-2 Certificate Rate”: With
respect to any Distribution Date and the Class AV-2
Certificates, the lesser of (A) the sum of (1) LIBOR
and (2) 0.0700% per annum (or 0.1400% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Group III Net WAC Cap for the Distribution
Date.
“Class AV-3 Certificate”: Any one of
the Certificates designated on the face thereof as a Class AV-3
Certificate, substantially in the form annexed hereto as Exhibit
A-9 authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and each evidencing
ownership of an interest designated as a “regular
interest” in the Master REMIC created hereunder for
purposes of the REMIC Provisions.
“Class AV-3 Certificate Rate”: With
respect to any Distribution Date and the Class AV-3
Certificates, the lesser of (A) the sum of (1) LIBOR
and (2) 0.1700% per annum (or 0.3400% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Group III Net WAC Cap for the Distribution
Date.
“Class AV-4 Certificate”: Any one of
the Certificates designated on the face thereof as a Class AV-4
Certificate, substantially in the form annexed hereto as Exhibit
A-10 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class AV-4 Certificate Rate”: With
respect to any Distribution Date and the Class AV-4
Certificates, the lesser of (A) the sum of (1) LIBOR
and (2) 0.3000% per annum (or 0.6000% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Group III Net WAC Cap for the Distribution
Date.
“Class B Certificate”: Any one
of the Certificates designated on the face thereof as a Class B
Certificate, substantially in the form annexed hereto as Exhibit
A-19 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class B Certificate Rate”: With
respect to any Distribution Date and the Class B Certificates,
the lesser of (A) the sum of (1) LIBOR and
(2) 1.3500% per annum (or 2.0250% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Subordinate Net WAC Cap for the Distribution
Date.
“Class B Principal Distribution
Amount”: As to any Distribution Date on or after the
Stepdown Date and so long as a Trigger Event is not in effect,
an amount equal to the excess of (1) the sum of
(A) the aggregate Certificate Principal Balance of the
Senior Certificates (after giving effect to the distribution of
the Senior Principal Distribution Amount on such Distribution
Date), (B) the Certificate Principal Balance of the
Class M-1 Certificates (after giving effect to the
distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Certificate Principal
Balance of the Class M-2 Certificates (after giving effect
to the distribution of the Class M-2 Principal Distribution
Amount on such Distribution Date), (D) the Certificate
Principal Balance of the Class M-3 Certificates (after
giving effect to the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date),
(E) the Certificate Principal Balance of the Class M-4
Certificates (after giving effect to the distribution of the
Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Certificate Principal Balance
of the Class M-5 Certificates (after giving effect to the
distribution of the Class M-5 Principal Distribution Amount
on such Distribution Date), (G) the Certificate Principal
Balance of the Class M-6 Certificates (after giving effect
to the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the Certificate
Principal Balance of the Class M-7 Certificates (after
giving effect to the distribution of the Class M-7
Principal Distribution Amount on such Distribution
Date) and (I) the Certificate Principal Balance of the
Class B Certificates immediately prior to such Distribution
Date, over (2) the lesser of (A) 93.10% of the Pool
Balance as of the last day of the related Remittance Period and
(B) the Pool Balance as of the last day of the related
Remittance Period minus the OC Floor; provided, however, that
after the Certificate Principal Balances of the Senior,
Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6 and Class M-7 Certificates
are reduced to zero, the Class B Principal Distribution
Amount for such Distribution Date will equal 100% of the
Principal Distribution Amount.
“Class Interest Carryover
Shortfall”: As to any Class of Offered Certificates and
any Distribution Date, an amount equal to the sum of (i) the
excess of the related Class Monthly Interest Amount for the
preceding Distribution Date and any outstanding Class Interest
Carryover Shortfall with respect to such Class on any preceding
Distribution Date, over the amount in respect of interest that
is actually distributed to the Owners of such Class on such
preceding Distribution Date plus (ii) one month's interest
on such excess, to the extent permitted by law, at the
Certificate Rate for such Class.
“Class M-1 Certificate”: Any one of
the Certificates designated on the face thereof as a Class M-1
Certificate, substantially in the form annexed hereto as Exhibit
A-12 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-1 Certificate Rate”: With
respect to any Distribution Date and the Class M-1 Certificates,
the lesser of (A) the sum of (1) LIBOR and
(2) 0.4000% per annum (or 0.6000% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Subordinate Net WAC Cap for the Distribution
Date.
“Class M-1 Principal Distribution
Amount”: As to any Distribution Date on or after the
Stepdown Date, (x) 100% of the Principal Distribution
Amount if the Certificate Principal Balance of each Class of
Senior Certificates has been reduced to zero and a Trigger Event
exists, or (y) if a Trigger Event is not in effect, the
excess of (1) the sum of (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after giving
effect to distributions of the Senior Principal Distribution
Amount for such Distribution Date) and (B) the Certificate
Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date over (2) the lesser of
(A) 65.40% of the Pool Balance as of the last day of the
related Remittance Period and (B) the Pool Balance as of
the last day of the related Remittance Period minus the OC
Floor.
“Class M-2 Certificate”: Any one of
the Certificates designated on the face thereof as a Class M-2
Certificate, substantially in the form annexed hereto as Exhibit
A-13 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-2 Certificate Rate”: With
respect to any Distribution Date and the Class M-2 Certificates,
the lesser of (A) the sum of (1) LIBOR and
(2) 0.4300% per annum (or 0.6450% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Subordinate Net WAC Cap for the Distribution
Date.
“Class M-2 Principal Distribution
Amount”: As to any Distribution Date on or after the
Stepdown Date, (x) 100% of the Principal Distribution
Amount if the aggregate Certificate Principal Balance of each of
the Senior and Class M-1 Certificates has been reduced to zero
and a Trigger Event exists, or (y) if a Trigger Event is
not in effect, the excess of (1) the sum of (A) the
aggregate Certificate Principal Balance of the Senior
Certificates (after giving effect to distributions of the Senior
Principal Distribution Amount for such Distribution Date),
(B) the Certificate Principal Balance of the Class M-1
Certificates (after giving effect to distribution of the Class
M-1 Principal Distribution Amount for such Distribution Date)
and (C) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over
(2) the lesser of (A) 72.00% of the Pool Balance as of
the last day of the related Remittance Period and (B) the
Pool Balance as of the last day of the related Remittance Period
minus the OC Floor.
“Class M-3 Certificate”: Any one of
the Certificates designated on the face thereof as a Class M-3
Certificate, substantially in the form annexed hereto as Exhibit
A-14 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-3 Certificate Rate”: With
respect to any Distribution Date and the Class M-3 Certificates,
the lesser of (A) the sum of (1) LIBOR and
(2) 0.4600% per annum (or 0.6900% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Subordinate Net WAC Cap for the Distribution
Date.
“Class M-3 Principal Distribution
Amount”: As to any Distribution Date on or after the
Stepdown Date, (x) 100% of the Principal Distribution
Amount if the aggregate Certificate Principal Balance of each of
the Senior, Class M-1 and Class M-2 Certificates has been
reduced to zero and a Trigger Event exists, or (y) if a
Trigger Event is not in effect, the excess of (1) the sum
of (A) the aggregate Certificate Principal Balance of the
Senior Certificates (after giving effect to distributions of the
Senior Principal Distribution Amount for such Distribution
Date), (B) the Certificate Principal Balance of the Class
M-1 Certificates (after giving effect to distribution of the
Class M-1 Principal Distribution Amount for such Distribution
Date), (C) the Certificate Principal Balance of the Class
M-2 Certificates (after giving effect to distribution of the
Class M-2 Principal Distribution Amount for such Distribution
Date) and (D) the Certificate Principal Balance of the
Class M-3 Certificates immediately prior to such Distribution
Date, over (2) the lesser of (A) 76.10% of the Pool
Balance as of the last day of the related Remittance Period and
(B) the Pool Balance as of the last day of the related
Remittance Period minus the OC Floor.
“Class M-4 Certificate”: Any one of
the Certificates designated on the face thereof as a Class M-4
Certificate, substantially in the form annexed hereto as Exhibit
A-15 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-4 Certificate Rate”: With
respect to any Distribution Date and the Class M-4 Certificates,
the lesser of (A) the sum of (1) LIBOR and
(2) 0.6400% per annum and (or 0.9600% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Subordinate Net WAC Cap for the Distribution
Date.
“Class M-4 Principal Distribution
Amount”: As to any Distribution Date on or after the
Stepdown Date, (x) 100% of the Principal Distribution
Amount if the aggregate Certificate Principal Balance of each of
the Senior, Class M-1, Class M-2 and Class M-3 Certificates has
been reduced to zero and a Trigger Event exists, or (y) if
a Trigger Event is not in effect, the excess of (1) the sum
of (A) the aggregate Certificate Principal Balance of the
Senior Certificates (after giving effect to distributions of the
Senior Principal Distribution Amount for such Distribution
Date), (B) the Certificate Principal Balance of the Class
M-1 Certificates (after giving effect to distribution of the
Class M-1 Principal Distribution Amount for such Distribution
Date), (C) the Certificate Principal Balance of the Class
M-2 Certificates (after giving effect to distribution of the
Class M-2 Principal Distribution Amount for such Distribution
Date), (D) the Certificate Principal Balance of the Class
M-3 Certificates (after giving effect to distribution of the
Class M-3 Principal Distribution Amount for such Distribution
Date) and (E) the Certificate Principal Balance of the
Class M-4 Certificates immediately prior to such Distribution
Date over (2) the lesser of (A) 79.80% of the Pool
Balance as of the last day of the related Remittance Period and
(B) the Pool Balance as of the last day of the related
Remittance Period minus the OC Floor.
“Class M-5 Certificate”: Any one of
the Certificates designated on the face thereof as a Class M-5
Certificate, substantially in the form annexed hereto as Exhibit
A-16 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-5 Certificate Rate”: With
respect to any Distribution Date and the Class M-5 Certificates,
the lesser of (A) the sum of (1) LIBOR and
(2) 0.6800% per annum (or 1.0200% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Subordinate Net WAC Cap for the Distribution
Date.
“Class M-5 Principal Distribution
Amount”: As to any Distribution Date on or after the
Stepdown Date, (x) 100% of the Principal Distribution
Amount if the aggregate Certificate Principal Balance of each of
the Senior, Class M-1, Class M-2, Class M-3 and Class M-4
Certificates has been reduced to zero and a Trigger Event
exists, or (y) if a Trigger Event is not in effect, the
excess of (1) the sum of (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after giving
effect to distributions of the Senior Principal Distribution
Amount for such Distribution Date), (B) the Certificate
Principal Balance of the Class M-1 Certificates (after giving
effect to distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Certificate
Principal Balance of the Class M-2 Certificates (after giving
effect to distribution of the Class M-2 Principal Distribution
Amount for such Distribution Date), (D) the Certificate
Principal Balance of the Class M-3 Certificates (after giving
effect to distribution of the Class M-3 Principal Distribution
Amount for such Distribution Date), (E) the Certificate
Principal Balance of the Class M-4 Certificates (after giving
effect to distribution of the Class M-4 Principal Distribution
Amount for such Distribution Date) and (F) the Certificate
Principal Balance of the Class M-5 Certificates immediately
prior to such Distribution Date over (2) the lesser of
(A) 83.00% of the Pool Balance as of the last day of the
related Remittance Period and (B) the Pool Balance as of
the last day of the related Remittance Period minus the OC
Floor.
“Class M-6 Certificate”: Any one of
the Certificates designated on the face thereof as a Class M-6
Certificate, substantially in the form annexed hereto as Exhibit
A-17 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-6 Certificate Rate”: With
respect to any Distribution Date and the Class M-6 Certificates,
the lesser of (A) the sum of (1) LIBOR and
(2) 0.7500% per annum (or 1.1250% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Subordinate Net WAC Cap for the Distribution
Date.
“Class M-6 Principal Distribution
Amount”: As to any Distribution Date on or after the
Stepdown Date, (x) 100% of the Principal Distribution
Amount if the aggregate Certificate Principal Balance of each of
the Senior, Class M-1, Class M-2, Class M-3, Class M-4 and Class
M-5 Certificates has been reduced to zero and a Trigger Event
exists, or (y) if a Trigger Event is not in effect, the
excess of (1) the sum of (A) the aggregate Certificate
Principal Balance of the Senior Certificates (after giving
effect to distributions of the Senior Principal Distribution
Amount for such Distribution Date), (B) the Certificate
Principal Balance of the Class M-1 Certificates (after giving
effect to distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Certificate
Principal Balance of the Class M-2 Certificates (after giving
effect to distribution of the Class M-2 Principal Distribution
Amount for such Distribution Date), (D) the Certificate
Principal Balance of the Class M-3 Certificates (after giving
effect to distribution of the Class M-3 Principal Distribution
Amount for such Distribution Date), (E) the Certificate
Principal Balance of the Class M-4 Certificates (after giving
effect to distribution of the Class M-4 Principal Distribution
Amount for such Distribution Date), (F) the Certificate
Principal Balance at the Class M-5 Certificates (after giving
effect to distribution of the Class M-5 Principal Distribution
Amount for such Distribution Date), and (G) the Certificate
Principal Balance of the Class M-6 Certificates immediately
prior to such Distribution Date over (2) the lesser of
(A) 86.60% of the Pool Balance as of the last day of the
related Remittance Period and (B) the Pool Balance as of
the last day of the related Remittance Period minus the OC
Floor.
“Class M-7 Certificate”: Any one of
the Certificates designated on the face thereof as a Class M-7
Certificate, substantially in the form annexed hereto as Exhibit
A-18 authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and each
evidencing ownership of an interest designated as a
“regular interest” in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
“Class M-7 Certificate Rate”: With
respect to any Distribution Date and the Class M-7 Certificates,
the lesser of (A) the sum of (1) LIBOR and
(2) 1.2000% per annum (or 1.8000% per annum for each
Interest Period occurring after the Clean-Up Call Date) and
(B) the Subordinate Net WAC Cap for the Distribution
Date.
“Class M-7 Principal Distribution
Amount”: As to any Distribution Date on or after the
Stepdown Date, (x) 100% of the Principal Distribution
Amount if the aggregate Certificate Principal Balance of each of
the Senior, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5 and Class M-6 Certificates has been reduced to zero and a
Trigger Event exists, or (y) if a Trigger Event is not in
effect, the excess of (1) the sum of (A) the aggregate
Certificate Principal Balance of the Senior Certificates (after
giving effect to distributions of the Senior Principal
Distribution Amount for such Distribution Date), (B) the
Certificate Principal Balance of the Class M-1 Certificates
(after giving effect to distribution of the Class M-1 Principal
Distribution Amount for such Distribution Date), (C) the
Certificate Principal Balance of the Class M-2 Certificates
(after giving effect to distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), (D) the
Certificate Principal Balance of the Class M-3 Certificates
(after giving effect to distribution of the Class M-3 Principal
Distribution Amount for such Distribution Date), (E) the
Certificate Principal Balance of the Class M-4 Certificates
(after giving effect to distribution of the Class M-4 Principal
Distribution Amount for such Distribution Date), (F) the
Certificate Principal Balance of the Class M-5 Certificates
(after giving effect to distribution of the Class M-5 Principal
Distribution Amount for such Distribution Date), (G) the
Certificate Principal Balance of the Class M-6 Certificates
(after giving effect to distribution of the Class M-6 Principal
Distribution Amount for such Distribution Date) and (H) the
Certificate Principal Balance of the Class M-7 Certificates
immediately prior to such Distribution Date over (2) the
lesser of (A) 89.60% of the Pool Balance as of the last day
of the related Remittance Period and (B) the Pool Balance
as of the last day of the related Remittance Period minus the OC
Floor.
“Class Monthly Interest Amount”:
With respect to each Class of Offered Certificates means, with
respect to any Distribution Date, the aggregate amount of
interest accrued during the related Interest Period at the
related Certificate Rate on the Certificate Principal Balance of
the Class of Offered Certificates.
“Class Principal Carryover
Shortfall”: As to any Class of Subordinate Certificates
and any Distribution Date, the excess, if any, of (i) the
sum of (x) the amount of the reduction in the Certificate
Principal Balance of that Class of Subordinate Certificates on
such Distribution Date as a result of the application of Applied
Realized Loss Amounts and (y) the amount of such reductions
on prior Distribution Dates over (ii) the sum of (x) the
amount distributed in respect of the Class Principal Carryover
Shortfall to such Class of Subordinate Certificates on prior
Distribution Dates and (y) the amount of any increases in the
Certificate Principal Balance of that Class of Subordinate
Certificates on such Distribution Date and any prior
Distribution Dates as a result of the application of Recoveries
to such Class as provided in Section 7.11(b) hereof.
“Class Principal Distribution
Amount”: The Senior Principal Distribution Amount, the
Class M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class
M-5 Principal Distribution Amount, the Class M-6 Principal
Distribution Amount, the Class M-7 Principal Distribution Amount
or the Class B Principal Distribution Amount, as the case may
be.
“Class R Certificate”: Any one of
the Certificates designated on the face thereof as a Class R
Certificate, substantially in the form annexed hereto as Exhibit
C, authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein. For the
purposes of the REMIC Provisions, the Class R Certificate shall
evidence (i) an interest designated as the LT-R Interest,
which is the “residual interest” in the Subsidiary
REMIC and (ii) an interest designated as the R-1 Interest,
which is the “residual interest” in the Master
REMIC. The Owner of the Class R Certificate shall be
entitled to separate such Certificate into its component LT-R
Interest and R-1 Interest parts, as further described in the
Class R Certificate attached hereto as Exhibit C.
“Class X-IO Certificate”: Any one of
the Certificates designated on the face thereof as a Class X-IO
Certificate, substantially in the form annexed hereto as Exhibit
B, authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein, and evidencing
ownership of an interest designated as a “regular
interest” in the Master REMIC created hereunder for the
purposes of the REMIC Provisions.
“Class X-IO Distribution Amount”:
With respect to any Distribution Date, the lesser of
(i) the aggregate funds, if any, remaining after the making
of all applications, transfers and disbursements described in
Sections 7.03(b)(A)(1) through 7.03(b)(D)(20) hereof and (ii)
the amount described in footnote (20) of Section 2.08(g) for the
current and for all prior Distribution Dates less amounts
distributed to the Class X-IO Certificates on prior Distribution
Dates pursuant to Sections 7.03(b)(D)(21) and (26).
“Clean-Up Call Date”: The first
Distribution Date following the last day of the Remittance
Period on which the Pool Balance has declined to 10% or less of
the Pool Balance as of the Cut-Off Date.
“Closing”: As defined in Section
4.02 hereof.
“Code”: The Internal Revenue Code of
1986, as amended.
“Commission”: The Securities and
Exchange Commission.
“Compensating Interest”: As defined
in Section 8.10(a) hereof.
“Conduit Home Equity Loans”: The
home equity loans listed on the Conduit Schedule of Home Equity
Loans.
“Conduit Schedule of Home Equity
Loans”: The Schedule of Home Equity Loans attached as
Schedule I-F hereto.
“Conduit Seller”: Harwood Street
Funding II, LLC, a Delaware limited liability company.
“Conduit Servicer”: CHEC in its
capacity as servicer with respect to the Conduit Warehousing
Facility.
“Conduit Warehousing Facility”: The
Amended and Restated Mortgage Loan Purchase and Servicing
Agreement dated November 26, 2003, among Harwood Street Funding
II, LLC, CHEC and Centex Corporation, as amended.
“Corporate Trust Office”: The
principal office of the Trustee at 4 New York Plaza, 6th Floor,
New York, New York 10004, Attention: Global Dept. Centex Home
Equity Loan Trust 2005-B (as of the Startup Day), or at such
other address as the Trustee may designate by notice to the
Depositor, the Seller, the Servicer and the Owners, or the
principal office of any successor Trustee hereunder.
“Coupon Rate”: The rate of interest
borne by each Note from time to time.
“Cram Down Loss”: With respect to a
Home Equity Loan, if a court of appropriate jurisdiction in an
insolvency proceeding shall have issued an order reducing the
Loan Balance of such Home Equity Loan, the amount of such
reduction. A “Cram Down Loss” shall be deemed
to have occurred on the date of issuance of such order.
“Cumulative Loss Trigger Event”:
With respect to any Distribution Date and the Home Equity Loans,
shall have occurred if the fraction, expressed as a percentage,
obtained by dividing (x) the aggregate amount of cumulative
Realized Losses incurred on the Home Equity Loans from the
Cut-Off Date through the last day of the related Remittance
Period (less the aggregate amount of Recoveries with respect to
the Home Equity Loans during such period) by (y) the aggregate
Loan Balance of the Home Equity Loans as of the Cut-Off Date,
exceeds the applicable percentage described below with respect
to such Distribution Date:
|
Distribution Date
|
Loss Percentage
|
|
April 2008 to March 2009:
|
3.75% for the first month, plus an additional 1/12th of 2.00% for
each month thereafter.
|
|
April 2009 to March 2010:
|
5.75% for the first month, plus an additional 1/12th of 1.75% for
each month thereafter.
|
|
April 2010 to March 2011:
|
7.50% for the first month, plus an additional 1/12th of 1.00% for
each month thereafter.
|
|
April 2011 and thereafter:
|
8.50%
|
“Custodial Agreement”: The Custodial
Agreement dated as of March 1, 2005 between the Custodian, the
Servicer and the Trustee.
“Custodian”: J.P. Morgan Trust
Company, National Association, as Custodian on behalf of the
Trustee pursuant to the Custodial Agreement and any successor
Custodian.
“Cut-Off Date”: The later of (i) the
opening of business on March 1, 2005 and (ii) the date of
origination with respect to a Home Equity Loan, but in no event
later than the Startup Day.
“Delayed Delivery Home Equity
Loans”: The Home Equity Loans for which all or a portion
of a related File is not delivered to the Trustee or the
Custodian on behalf of the Trustee on the Startup Day. The
number of Delayed Delivery Home Equity Loans shall not exceed
10% of the aggregate Loan Balance of the Home Equity Loans as of
the Cut-Off Date. To the extent that CHEC shall be in
possession of any Files with respect to any Delayed Delivery
Home Equity Loan, until delivery of such File to the Trustee or
the Custodian on behalf of the Trustee, as provided in Section
3.05, CHEC shall hold such files as Servicer hereunder, as agent
and in trust for the Trustee.
“Delinquency Advance”: As defined in
Section 8.09(a) hereof.
“Delinquency Event”: A Delinquency
Event shall have occurred and be continuing if, at any time, the
60+ Delinquency Percentage (Rolling Three Month) exceeds 38.25%
of the Senior Enhancement Percentage.
“Delinquent”: A Home Equity Loan is
“Delinquent” if any payment due thereon is not made
by the Mortgagor by the close of business on the related Due
Date. A Home Equity Loan is “30 days
Delinquent” if such payment has not been received by the
close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due,
or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due
on the 31st day of such month) then on the last day of such
immediately succeeding month. Similarly for “60 days
Delinquent,” “90 days Delinquent” and so
on.
“Delivery Order”: The delivery order
in the form set forth as Exhibit G hereto and delivered by the
Depositor to the Trustee on the Startup Day pursuant to Section
4.01 hereof.
“Depositor”: CHEC Funding, LLC, a
Delaware limited liability company, or any successor
thereto.
“Depository”: The Depository Trust
Company, 7 Hanover Square, New York, New York, 10004, and any
successor Depository.
“Designated Depository Institution”:
With respect to the Principal and Interest Account, a trust
account maintained by the trust department of a federal or state
chartered depository institution, acting in its fiduciary
capacity, having combined capital and surplus of at least
$100,000,000; provided, however, that if the Principal and
Interest Account is not maintained with the Trustee, (i) such
institution shall have a long-term debt rating of at least
“A” by Standard & Poor’s, “A2”
by Moody’s and, if rated by Fitch, “A” by
Fitch and (ii) the Servicer shall provide the Trustee with a
statement, which the Trustee will send to the Owners,
identifying the location and account information of the
Principal and Interest Account upon a change in the location of
such account.
“Direct Participant” or “DTC
Participant”: Any broker-dealer, bank or other financial
institution for which the Depository holds Offered Certificates
from time to time as a securities depository.
“Disqualified Organization”: The
meaning set forth from time to time in the definition thereof at
Section 860E(e)(5) of the Code (or any successor statute
thereto).
“Distribution Date”: Any date on
which the Trustee is required to make distributions to the
Owners, which shall be the 25th day of each month or if such day
is not a Business Day, the next Business Day thereafter,
commencing in the month following the Startup Day. The
first Distribution Date will be April 25, 2005.
“Due Date”: With respect to any Home
Equity Loan, the date on which the Monthly Payment with respect
to such Home Equity Loan is required to be paid pursuant to the
related Note exclusive of any days of grace.
“Eligible Account”: Either (A) a
segregated account or accounts maintained with an institution
whose deposits are insured by the FDIC, the unsecured and
uncollateralized debt obligations of which institution shall be
rated “AA” or higher by Standard & Poor’s
and, in the case of any institution other than JPMorgan Chase
Bank, National Association, “Aa2” or higher by
Moody’s and, if rated by Fitch, “AA” or higher
by Fitch, (in the case of its long-term obligations), and in the
highest short term rating category by each of Standard &
Poor’s, Moody’s and, if rated by Fitch, Fitch (in
the case of its short-term obligations), and which is (i) a
federal savings and loan association duly organized, validly
existing and in good standing under the federal banking laws,
(ii) an institution duly organized, validly existing and in good
standing under the applicable banking laws of any state, (iii) a
national banking association duly organized, validly existing
and in good standing under the federal banking laws, (iv) a
principal subsidiary of a bank holding company, or (v) approved
in writing by each of the Rating Agencies or (B) a segregated
trust account or accounts maintained with the Corporate Trust
Office of the Trustee, or the trust department of a federal or
state chartered depository institution acceptable to each Rating
Agency, having capital and surplus of not less than
$100,000,000, acting in its fiduciary capacity.
“Eligible Investments”: Those
investments so designated pursuant to Section 7.07 hereof.
“ERISA”: The Employee
Retirement Income Security Act of 1974, as amended.
“ERISA-Qualifying Underwriting”:
A best efforts or firm commitment underwriting or private
placement that meets the requirements of an Underwriter’s
Exemption.
“ERISA-Restricted Certificate”:
Any Class X-IO and Class R Certificate and any Certificate
with a rating below the lowest applicable rating permitted under
an Underwriter’s Exemption.
“Excess Interest”: As to any
Distribution Date, the amounts remaining after the application
of payments pursuant to clauses 1 through 11 of clause D of
Section 7.03(b).
“Excess Overcollateralization
Amount”: As to any Distribution Date, the lesser of (i)
the Aggregate Principal Amount for that Distribution Date and
(ii) the excess, if any, of (x) the Overcollateralization Amount
(assuming 100% of the Aggregate Principal Amount is distributed
on the Offered Certificates) over (y) the Required
Overcollateralization Amount.
“Exchange Act”: The Securities
Exchange Act of 1934, as amended.
“FDIC”: The Federal Deposit
Insurance Corporation, a corporate instrumentality of the United
States, or any successor thereto.
“FHLMC”: The Federal Home Loan
Mortgage Corporation, a corporate instrumentality of the United
States created pursuant to the Emergency Home Finance Act of
1970, as amended, or any successor thereof.
“File”: The documents delivered to
the Custodian on behalf of the Trustee pursuant to Section
3.05(b) hereof pertaining to a particular Home Equity Loan and
any additional documents required to be added to the File
pursuant to this Agreement.
“Final Certification”: As defined in
Section 3.06(c) hereof.
“Final Determination”: As defined in
Section 9.03(a) hereof.
“Final Recovery Determination”: With
respect to any defaulted Home Equity Loan or REO Property (other
than a Home Equity Loan purchased by the Seller, the Depositor
or the Servicer), a determination made by the Servicer that all
recoveries which the Servicer, in its reasonable business
judgment, expects to be finally recoverable in respect thereof
have been so recovered or that the Servicer believes in its
reasonable business judgment the cost of obtaining any
additional recoveries therefrom would exceed the amount of such
recoveries. The Servicer shall maintain records of each
Final Recovery Determination.
“Final Scheduled Distribution Date”:
As set out in Section 2.08(g) hereof with respect to each
Certificate.
“First Mortgage Loan”: A Home Equity
Loan which constitutes a first priority mortgage lien with
respect to any Property.
“Fitch”: Fitch, Inc. or any
successor thereto.
“Fixed Rate Certificates”: Any of
the Class AF-1 Certificates, Class AF-2 Certificates, Class AF-3
Certificates, Class AF-4 Certificates, Class AF-5 Certificates
and Class AF-6 Certificates.
“FNMA”: The Federal National
Mortgage Association, a federally-chartered and privately-owned
corporation existing under the Federal National Mortgage
Association Charter Act, as amended, or any successor
thereof.
“FNMA Guide”: FNMA’s Servicing
Guide, as the same may be amended by FNMA from time to time.
“Group Balance”: With respect to any
date and Home Equity Loan Group, the aggregate of the Loan
Balances of all Home Equity Loans of the related Home Equity
Loan Group as of such date.
“Group”: Any of Group I, Group II or
Group III, as applicable.
“Group I”: With respect to the Home
Equity Loans, the pool of Home Equity Loans identified in the
related Schedule of Home Equity Loans as having been assigned to
Group I in Schedule I-A hereto, including any Qualified
Replacement Mortgages delivered in replacement thereof.
Group I refers, with respect to the Conduit Home Equity
Loans, to the Home Equity Loans listed in the Conduit Schedule
of Home Equity Loans that are also assigned to Group I in
Schedule I-A hereto, and with respect to the Seller Home Equity
Loans, to the Home Equity Loans listed in the Seller Schedule of
Home Equity Loans that are also assigned to Group I in Schedule
I-A hereto. With respect to the Offered Certificates, the
related Class or Classes of Group I Certificates, as the context
requires.
“Group I Certificates”: The
Class AF-1 Certificates, Class AF-2 Certificates, Class AF-3
Certificates, Class AF-4 Certificates, Class AF-5 Certificates
and the Class AF-6 Certificates.
“Group I Monthly Remittance Amount”:
As of any Monthly Remittance Date, (A) the sum, without
duplication, of (i) all interest received (including any related
Delinquency Advances) during the related Remittance Period with
respect to the Home Equity Loans in Group I (net of the Group I
Servicing Fee), (ii) all Compensating Interest paid by the
Servicer on such Monthly Remittance Date with respect to Group
I, (iii) the portion of the Loan Purchase Price amounts, and
Substitution Amounts relating to interest on the Home Equity
Loans in Group I paid by CHEC or the Servicer on or prior to
such Monthly Remittance Date, (iv) the interest portion of
all Net Liquidation Proceeds actually collected by the Servicer
with respect to the Home Equity Loans in Group I during the
related Remittance Period, (v) the principal actually collected
by the Servicer with respect to Home Equity Loans in Group I
during the related Remittance Period, (vi) the outstanding
principal balance of each Home Equity Loan in Group I that was
purchased from the Trustee on or prior to such Monthly
Remittance Date, to the extent such outstanding principal
balance was actually deposited in the Principal and Interest
Account on or prior to such Monthly Remittance Date, (vii) any
Substitution Amounts relating to principal delivered by CHEC in
connection with a substitution of a Home Equity Loan in Group I,
to the extent such Substitution Amounts were actually deposited
in the Principal and Interest Account on or prior to such
Monthly Remittance Date, (viii) the principal portion of all Net
Liquidation Proceeds and Recoveries actually collected by the
Servicer with respect to Home Equity Loans in Group I during the
related Remittance Period and (ix) the amount of investment
losses required to be deposited pursuant to Section 8.08(b);
minus (B) any amounts netted from the foregoing or withdrawn
from the Principal and Interest Account by the Servicer as
permitted by this Agreement.
“Group I Net WAC Cap”: With respect
to any Distribution Date, and for any Class of Group I
Certificates, a rate per annum equal to the weighted average of
the Net Coupon Rates on the Group I Home Equity Loans as of the
beginning of the related Remittance Period.
“Group I Net WAC Cap Carryover”:
With respect to any Distribution Date, and for any Class of
Group I Certificates, the sum of (A) the excess of (1) the
amount of interest that such Class of Group I Certificates would
otherwise be entitled to receive on the Distribution Date had
the Certificate Rate for such Class been calculated at the
Certificate Rate for such Class and Distribution Date without
regard to the Group I Net WAC Cap over (2) the amount of
interest payable on such Class at the respective Certificate
Rate for such Class for the Distribution Date and (B) the excess
described in clause (A) for such Class for all previous
Distribution Dates (including any interest accrued on that
amount at the related Certificate Rate without regard to the
Group I Net WAC Cap) not previously paid to such Class.
“Group I Parity Amount”: With
respect to any Distribution Date, the greater of (i) zero and
(ii) the excess, if any, of (x) the aggregate Certificate
Principal Balance of the Group I Certificates immediately prior
to that Distribution Date over (y) the aggregate Loan Balance of
the Group I Home Equity Loans as of the last day of the related
Remittance Period.
“Group I Principal Distribution
Amount”: With respect to any Distribution Date, the lesser
of (A) the greatest of (1) the product of (x) the Senior
Principal Distribution Amount for that Distribution Date and (y)
a fraction, the numerator of which is the excess of (i) the
aggregate Loan Balance of the Group I Home Equity Loans as of
the first day of the related Remittance Period, over (ii) the
aggregate Loan Balance of the Group I Home Equity Loans as of
the last day of the related Remittance Period, and the
denominator of which is the excess of (i) the aggregate Loan
Balance of the Home Equity Loans as of the first day of the
related Remittance Period, over (ii) the aggregate Loan Balance
of the Home Equity Loans as of the last day of the related
Remittance Period, and (2) the Group I Parity Amount and (3) the
excess of (i) the Senior Principal Distribution Amount for that
Distribution Date over (ii) the aggregate of the Certificate
Principal Balances of the Class AV-1, Class AV-2, Class AV-3 and
Class AV-4 Certificates immediately prior to the applicable
Distribution Date and (B) the aggregate Certificate Principal
Balance of the Group I Certificates immediately prior to that
Distribution Date.
“Group I REMIC Cap Carryover”: With
respect to any Distribution Date, and for any Class of Group I
Certificates, the sum of (A) the excess of (1) the amount of
interest that such Class of Group I Certificates is entitled to
receive on the Distribution Date (or, if greater, would be
entitled to receive on the Distribution Date had the Certificate
Rate for such Class been calculated at the Certificate Rate for
such Class and Distribution Date without regard to the Group I
Net WAC Cap) over (2) the amount of interest payable on the
Master REMIC Regular Certificate with a Class designation
corresponding to such Class of Group I Certificates at the
respective certificate interest rate for such Master REMIC
Regular Certificate for the Distribution Date, as provided in
Section 2.08 hereof, and (B) the excess described in clause (A)
for such Class for all previous Distribution Dates (including
any interest accrued on that amount at the related Certificate
Rate without regard to the Group I Net WAC Cap) not previously
paid to such Class.
“Group II”: With respect to the Home
Equity Loans, the pool of Home Equity Loans identified in the
related Schedule of Home Equity Loans as having been assigned to
Group II in Schedule I-B hereto, including any Qualified
Replacement Mortgages delivered in replacement thereof. Group II
refers, with respect to the Conduit Home Equity Loans, to the
Home Equity Loans listed in the Conduit Schedule of Home Equity
Loans that are also assigned to Group II in Schedule I-B hereto,
and with respect to the Seller Home Equity Loans, to the Home
Equity Loans listed in the Seller Schedule of Home Equity Loans
that are also assigned to Group II in Schedule I-B hereto.
With respect to the Offered Certificates, the related
Class or Classes of Group II Certificates, as the context
requires.
“Group II Adjusted Cap Carryover”:
With respect to any Distribution Date and the Class AV-1
Certificates, an amount equal to the product of (A) the amount,
if any, received under the Group II Cap Agreement for such
Distribution Date and (B) a fraction, the numerator of which is
the outstanding Certificate Principal Balance of the Class AV-1
Certificates and the denominator of which is the aggregate Loan
Balance of the Group II Home Equity Loans, in each case as of
the first day of the related Remittance Period.
“Group II Cap Agreement”: The
interest rate cap agreement entered into with the Cap
Counterparty and attached hereto as Exhibit R.
“Group II Certificates”: The Class
AV-1 Certificates.
“Group II Monthly Remittance
Amount”: As of any Monthly Remittance Date, (A) the sum,
without duplication, of (i) all interest received (including any
related Delinquency Advances) during the related Remittance
Period with respect to the Home Equity Loans in Group II (net of
the Group II Servicing Fee), (ii) all Compensating Interest paid
by the Servicer on such Monthly Remittance Date with respect to
Group II, (iii) the portion of the Loan Purchase Price amounts
and Substitution Amounts relating to interest on the Home Equity
Loans in Group II paid by CHEC or the Servicer on or prior to
such Monthly Remittance Date, (iv) the interest portion of all
Net Liquidation Proceeds actually collected by the Servicer with
respect to the Home Equity Loans in Group II during the related
Remittance Period, (v) the principal actually collected by the
Servicer with respect to Home Equity Loans in Group II during
the related Remittance Period, (vi) the outstanding principal
balance of each Home Equity Loan in Group II that was purchased
from the Trustee on or prior to such Monthly Remittance Date, to
the extent such outstanding principal balance was actually
deposited in the Principal and Interest Account on or prior to
such Monthly Remittance Date, (vii) any Substitution Amounts
relating to principal delivered by CHEC in connection with a
substitution of a Home Equity Loan in Group II, to the extent
such Substitution Amounts were actually deposited in the
Principal and Interest Account on or prior to such Monthly
Remittance Date, (viii) the principal portion of all Net
Liquidation Proceeds and Recoveries actually collected by the
Servicer with respect to Home Equity Loans in Group II during
the related Remittance Period and (ix) the amount of investment
losses required to be deposited pursuant to Section 8.08(b);
minus (B) any amounts netted from the foregoing or withdrawn
from the Principal and Interest Account by the Servicer as
permitted by this Agreement.
“Group II Net WAC Cap”: With respect
to any Distribution Date, and for the Class AV-1 Certificates,
the rate per annum equal to the product of (i) the weighted
average of the Net Coupon Rates on the Group II Home Equity
Loans as of the beginning of the related Remittance Period and
(ii) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related
Interest Period.
“Group II Net WAC Cap Carryover”:
With respect to any Distribution Date and the Class AV-1
Certificates, the sum of (A) the excess of (1) the amount of
interest such Class would otherwise be entitled to receive on
the Distribution Date had its Certificate Rate been calculated
at the Certificate Rate for such Class and Distribution Date
without regard to the Group II Net WAC Cap over (2) the amount
of interest payable on such Class at the Certificate Rate for
such Class for the Distribution Date and (B) the excess
described in clause (A) for such Class for all previous
Distribution Dates (including any interest accrued thereon at
the related Certificate Rate without regard to the Group II Net
WAC Cap) not previously paid to such Class.
“Group II Principal Allocation
Percentage”: With respect to any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is
the Basic Principal Amount with respect to the Group II Home
Equity Loans and that Distribution Date, and the denominator of
which is the aggregate Basic Principal Amount with respect to
the Group II Home Equity Loans and the Group III Home Equity
Loans and that Distribution Date.
“Group II Principal Distribution
Amount”: With respect to any Distribution Date, the lesser
of (i) the greater of (A) the product of (1) the
Group II Principal Allocation Percentage for that Distribution
Date and (2) the ARM Principal Distribution Amount for that
Distribution Date and (B) the excess of (1) the ARM
Principal Distribution Amount for that Distribution Date over
(2) the aggregate of the Certificate Principal Balances of
the Class AV-2, Class AV-3 and Class AV-4 Certificates
immediately prior to that Distribution Date and (ii) the
Certificate Principal Balance of the Class AV-1 Certificates
immediately prior to that Distribution Date.
“Group II REMIC Cap Carryover”: With
respect to any Distribution Date, and for the Class AV-1
Certificates, the sum of (A) the excess of (1) the amount of
interest such Class is entitled to receive on the Distribution
Date (or, if greater, would be entitled to receive on the
Distribution Date had the Certificate Rate for such Class been
calculated at the Certificate Rate for such Class and
Distribution Date without regard to the Group II Net WAC Cap)
over (2) the amount of interest payable on the Master REMIC
Regular Certificate with a Class designation corresponding to
the Class AV-1 Certificates at the respective certificate
interest rate for such Master REMIC Regular Certificate for the
Distribution Date, as provided in Section 2.08 hereof, and (B)
the excess described in clause (A) for such Class for all
previous Distribution Dates (including any interest accrued
thereon at the related Certificate Rate without regard to the
Group II Net WAC Cap) not previously paid to such Class.
“Group III”: With respect to
the Home Equity Loans, the pool of Home Equity Loans identified
in the related Schedule of Home Equity Loans as having been
assigned to Group III in Schedule I-C hereto, including any
Qualified Replacement Mortgages delivered in replacement
thereof. Group III refers, with respect to the Conduit Home
Equity Loans, to the Home Equity Loans listed in the Conduit
Schedule of Home Equity Loans that are also assigned to Group
III in Schedule I-C hereto, and with respect to the Seller Home
Equity Loans, to the Home Equity Loans listed in the Seller
Schedule of Home Equity Loans that are also assigned to Group
III in Schedule I-C hereto. With respect to the Offered
Certificates, the related Class or Classes of Group III
Certificates, as the context requires.
“Group III Adjusted Cap
Carryover”: With respect to any Distribution Date and
Class of Group III Certificates, an amount equal to the product
of (A) the amount, if any, received under the Group III Cap
Agreement for such Distribution Date and (B) a fraction, the
numerator of which is the outstanding Certificate Principal
Balance of such class of Group III Certificates and the
denominator of which is the aggregate Loan Balance of the Group
III Home Equity Loans, in each case as of the first day of the
related Remittance Period.
“Group III Cap Agreement”: The
interest rate cap agreement entered into with the Cap
Counterparty and attached hereto as Exhibit S.
“Group III Certificates”: The Class
AV-2, Class AV-3 and Class AV-4 Certificates.
“Group III Monthly Remittance
Amount”: As of any Monthly Remittance Date, (A) the sum,
without duplication, of (i) all interest received (including any
related Delinquency Advances) during the related Remittance
Period with respect to the Home Equity Loans in Group III (net
of the Group III Servicing Fee), (ii) all Compensating Interest
paid by the Servicer on such Monthly Remittance Date with
respect to Group III, (iii) the portion of the Loan Purchase
Price amounts and Substitution Amounts relating to interest on
the Home Equity Loans in Group III paid by CHEC or the Servicer
on or prior to such Monthly Remittance Date, (iv) the interest
portion of all Net Liquidation Proceeds actually collected by
the Servicer with respect to the Home Equity Loans in Group III
during the related Remittance Period, (v) the principal actually
collected by the Servicer with respect to Home Equity Loans in
Group III during the related Remittance Period, (vi) the
outstanding principal balance of each Home Equity Loan in Group
III that was purchased from the Trustee on or prior to such
Monthly Remittance Date, to the extent such outstanding
principal balance was actually deposited in the Principal and
Interest Account on or prior to such Monthly Remittance Date,
(vii) any Substitution Amounts relating to principal delivered
by CHEC in connection with a substitution of a Home Equity Loan
in Group III, to the extent such Substitution Amounts were
actually deposited in the Principal and Interest Account on or
prior to such Monthly Remittance Date, (viii) the principal
portion of all Net Liquidation Proceeds and Recoveries actually
collected by the Servicer with respect to Home Equity Loans in
Group III during the related Remittance Period and (ix) the
amount of investment losses required to be deposited pursuant to
Section 8.08(b); minus (B) any amounts netted from the foregoing
or withdrawn from the Principal and Interest Account by the
Servicer as permitted by this Agreement.
“Group III Net WAC Cap”: With
respect to any Distribution Date, and each Class of Group III
Certificates, the rate per annum equal to the product of (i) the
weighted average of the Net Coupon Rates on the Group III Home
Equity Loans as of the beginning of the related Remittance
Period and (ii) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related
Interest Period.
“Group III Net WAC Cap Carryover”:
With respect to any Distribution Date and the related Class of
Group III Certificates, as applicable, the sum of (A) the excess
of (1) the amount of interest such Class of Group III
Certificates, as applicable, would otherwise be entitled to
receive on the Distribution Date had the Certificate Rate for
such Class been calculated at the Certificate Rate for such
Class and Distribution Date without regard to the Group III Net
WAC Cap over (2) the amount of interest payable on such Class at
the respective Certificate Rate for such Class for the
Distribution Date and (B) the excess described in clause (A) for
such Class for all previous Distribution Dates (including any
interest accrued thereon at the related Certificate Rate without
regard to the Group III Net WAC Cap) not previously paid to such
Class.
“Group III Principal Allocation
Percentage”: With respect to any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is
the Basic Principal Amount with respect to the Group III Home
Equity Loans and that Distribution Date, and the denominator of
which is the aggregate Basic Principal Amount with respect to
the Group II Home Equity Loans and the Group III Home Equity
Loans and that Distribution Date.
“Group III Principal Distribution
Amount”: With respect to any Distribution Date, the lesser
of (i) the greater of (A) the product of (1) the Group III
Principal Allocation Percentage for that Distribution Date and
(2) the ARM Principal Distribution Amount for that Distribution
Date and (B) the excess of (1) the ARM Principal Distribution
Amount for that Distribution Date over (2) the Certificate
Principal Balance of the Class AV-1 Certificates immediately
prior to that Distribution Date and (ii) the aggregate of the
Certificate Principal Balances of the Class AV-2, Class AV-3 and
Class AV-4 Certificates immediately prior to that Distribution
Date.
“Group III REMIC Cap Carryover”:
With respect to any Distribution Date, and for any Class of
Group III Certificates, the sum of (A) the excess of (1) the
amount of interest such Class of Group III Certificates is
entitled to receive on the Distribution Date (or, if greater,
would be entitled to receive on the Distribution Date had the
Certificate Rate for such Class been calculated at the
Certificate Rate for such Class and Distribution Date without
regard to the Group III Net WAC Cap) over (2) the amount of
interest payable on the Master REMIC Regular Certificate with a
Class designation corresponding to such Class of Group III
Certificates at the respective certificate interest rate for
such Master REMIC Regular Certificate for the Distribution Date,
as provided in Section 2.08 hereof, and (B) the excess described
in clause (A) for such Class for all previous Distribution Dates
(including any interest accrued thereon at the related
Certificate Rate without regard to the Group III Net WAC Cap)
not previously paid to such Class.
“Group Subordinate Amount”: With
respect to each Group and any Distribution Date, is the excess
of the aggregate Loan Balance of the related Group as of the
first day of the related Remittance Period, over the aggregate
Certificate Principal Balance of the Senior Certificates of such
Group immediately prior to such Distribution Date.
“Highest Lawful Rate”: As defined in
Section 11.13 hereof.
“Home Equity Loan Assets”: The
meaning set forth under the heading “CONVEYANCE”
herein.
“Home Equity Loan Group” or
“Group”: Group I, Group II or Group III, as the case
may be. References herein to the related Class of Offered
Certificates, when used with respect to a Home Equity Loan Group
or Group, shall mean (A) in the case of Group I, the related
Class of Group I Certificates, (B) in the case of Group II, the
Class AV-1 Certificates, (C) in the case of Group III, the
related Class of Group III Certificates.
“Home Equity Loans”: The Conduit
Home Equity Loans and/or the Seller Home Equity Loans, as
applicable, together with any Qualified Replacement Mortgages
substituted therefor in accordance with this Agreement, as from
time to time are held as a part of the Trust Estate. Where
applicable, the term “Home Equity Loan” includes (i)
the terms “First Mortgage Loan” and “Second
Mortgage Loan”, and (ii) any Home Equity Loan which is
Delinquent, relates to a foreclosure or relates to a Property
which is REO Property prior to such REO Property’s
disposition by the Trust. Any home equity loan which,
although intended by the parties hereto to have been, and which
purportedly was, transferred and assigned to the Trust by the
Depositor, in fact was not transferred and assigned to the Trust
for any reason whatsoever, including, without limitation, the
incorrectness of the statement set forth in Section 3.04(b)(x)
hereof with respect to such home equity loan, shall nevertheless
be considered a “Home Equity Loan” for all purposes
of this Agreement.
“Indirect Participant”: Any
financial institution for whom any Direct Participant holds an
interest in an Offered Certificate.
“Insurance Policy”: Any hazard,
flood, title or primary mortgage insurance policy relating to a
Home Equity Loan plus any amount remitted under Section 8.11
hereof.
“Interest Period”: With respect to
each Distribution Date and (i) the Fixed Rate Certificates, the
period from the first day of the calendar month preceding the
month of the Distribution Date through the last day of the
calendar month with interest accruing on the basis of a 360-day
year consisting of twelve 30-day months; and (ii) the Variable
Rate Certificates, the period from and including the preceding
Distribution Date (or the Startup Day in the case of the first
Distribution Date) to and including the day preceding the
related Distribution Date with interest accruing on the basis of
the actual number of days elapsed in the related Interest Period
and a year of 360 days.
“Latest Possible Maturity Date”: The
date determined as of the Cut-Off Date that is the first
Distribution Date following the third anniversary of the
scheduled maturity of the Home Equity Loan with the latest
scheduled maturity.
“LIBOR”: With respect to any
Interest Period for the Variable Rate Certificates, the rate
determined by the Trustee on the related LIBOR Determination
Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00
a.m. (London time) on such date; provided that if such rate does
not appear on Telerate Page 3750, the rate for such date will be
determined on the basis of the rates at which one-month U.S.
dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime
banks in the London interbank market. In such event, the
Trustee will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date
will be the arithmetic mean of the quotations (rounded upwards
if necessary to the nearest whole multiple of 1/16%). If
fewer than two quotations are provided as requested, the rate
for that date will be the arithmetic mean of the rates quoted by
major banks in New York City, selected by the Servicer, at
approximately 11:00 a.m. (New York City time) on such date for
one-month U.S. dollar loans to leading European banks.
“LIBOR Determination Date”: With
respect to any Interest Period for the Variable Rate
Certificates, the second London Business Day preceding the
commencement of such Interest Period.
“Liquidated Loan”: A Home Equity
Loan as to which a Final Recovery Determination has been
made.
“Liquidation Proceeds”: With respect
to any Liquidated Loan, all amounts (including the proceeds of
any Insurance Policy) recovered by the Servicer in connection
with such Liquidated Loan, whether through trustee’s sale,
foreclosure sale or otherwise.
“Loan Balance”: With respect to each
Home Equity Loan and as of any date of determination, the actual
outstanding principal balance thereof on the Cut-Off Date or
relevant Replacement Cut-Off Date with respect to a Qualified
Replacement Mortgage less any principal payments relating to
such Home Equity Loan included in previous Monthly Remittance
Amounts, provided, however, that the Loan Balance for any Home
Equity Loan that has become a Liquidated Loan shall be zero as
of the first day of the Remittance Period following the
Remittance Period in which such Home Equity Loan becomes a
Liquidated Loan, and at all times thereafter.
“Loan Purchase Price”: With respect
to any Home Equity Loan purchased from the Trust on or prior to
a Monthly Remittance Date pursuant to Section 3.04, 3.06(b) or
8.10(b) hereof, an amount equal to the outstanding principal
balance of such Home Equity Loan as of the date of purchase
(assuming that the Monthly Remittance Amount remitted by the
Servicer on such Monthly Remittance Date has already been
remitted), plus all accrued and unpaid interest on such Home
Equity Loan at the Coupon Rate to but not including the date of
such purchase together with (without duplication) the aggregate
amounts of (i) all unreimbursed Delinquency Advances and
Servicing Advances theretofore made with respect to such Home
Equity Loan, (ii) all Delinquency Advances which the Servicer
has theretofore failed to remit with respect to such Home Equity
Loan, (iii) all reimbursed Delinquency Advances and Servicing
Advances to the extent that reimbursement is not made from the
Mortgagor and (iv) any costs and damages incurred by the Trust
in connection with any violation by the Home Equity Loan of any
predatory or abusive lending law.
“Loan-to-Value Ratio”: As of any
particular date (i) with respect to any First Mortgage Loan, the
percentage obtained by dividing the Appraised Value into the
original principal balance of the Note relating to such First
Mortgage Loan and (ii) with respect to any Second Mortgage Loan,
the percentage obtained by dividing the Appraised Value as of
the date of origination of such Second Mortgage Loan into an
amount equal to the sum of (a) the remaining principal balance
of the Senior Lien relating to such Second Mortgage Loan as of
the date of origination of the related Second Mortgage Loan and
(b) the original principal balance of the Note relating to such
Second Mortgage Loan.
“London Business Day”: Any day on
which dealings in deposits of United States dollars are
transacted in the London interbank market.
“Manufactured Home”: A unit of
manufactured housing, including all accessions thereto, securing
the indebtedness of the Mortgagor under the related Home Equity
Loan treated as real estate under applicable state law.
“Master REMIC”: The segregated group
of assets consisting of the Subsidiary REMIC Regular Interests
(as defined in Section 2.08 hereof) and constituting a REMIC
created hereunder.
“Maximum Rate”: With respect to any
Home Equity Loan in Group II, means the maximum rate at which
interest may accrue on such Home Equity Loan.
“Monthly Payment”: With respect to
any Home Equity Loan and any Remittance Period, the payment of
principal, if any, and interest due on the Due Date in such
Remittance Period pursuant to the related Note.
“Monthly Remittance Amount”: The sum
of the Group I Monthly Remittance Amount, the Group II Monthly
Remittance Amount and the Group III Monthly Remittance
Amount.
“Monthly Remittance Date”: The 18th
day of each month, or if the 18th day is not a Business Day, the
preceding Business Day.
“Moody’s”: Moody’s
Investors Service, Inc. or any successor thereto.
“Mortgage”: The mortgage, deed of
trust or other instrument creating a first or second lien on an
estate in fee simple interest in real property securing a
Note.
“Mortgagor”: Each obligor on a
Note.
“Net Coupon Rate”: With respect to
any Home Equity Loan in Group I, Group II or Group III, means a
rate per annum equal to the Coupon Rate of such Home Equity Loan
minus the sum of (i) the rate at which the Servicing Fee accrues
and (ii) the rate at which the Trustee Fee accrues (expressed as
a per annum percentage of the aggregate Loan Balance of the Home
Equity Loans in Group I, Group II or Group III, as
applicable).
“Net Liquidation Proceeds”: As to
any Liquidated Loan, Liquidation Proceeds net of expenses
incurred by the Servicer (including unreimbursed Servicing
Advances) in connection with the liquidation of such Home Equity
Loan and unreimbursed Delinquency Advances relating to such Home
Equity Loan. In no event shall Net Liquidation Proceeds
with respect to any Liquidated Loan be less than zero.
“Nonrecoverable Advance”: With
respect to any Home Equity Loan for which a Final Recovery
Determination has been made, means any Delinquency Advance or
Servicing Advance previously made and not reimbursed from
proceeds on the related Home Equity Loan or under Section
7.03(b) clause D.25 hereof which the Servicer has determined, in
good faith business judgment, as evidenced by an Officer’s
Certificate delivered to the Trustee no later than the Business
Day following such determination, would not be ultimately
recovered.
“Note”: The note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under
a Home Equity Loan.
“OC Floor”: An amount equal to 0.50%
of the Pool Balance as of the Cut-Off Date.
“Offered Certificate”: Any one of
the Class AF-1 Certificates, the Class AF-2 Certificates, the
Class AF-3 Certificates, the Class AF-4 Certificates, the Class
AF-5 Certificates, the Class AF-6 Certificates, the Class AV-1
Certificates, the Class AV-2 Certificates, the Class AV-3
Certificates, the Class AV-4 Certificates, the Class M-1
Certificates, the Class M-2 Certificates, the Class M-3
Certificates, the Class M-4 Certificates, the Class M-5
Certificates, the Class M-6 Certificates, the Class M-7
Certificates and the Class B Certificates.
“Officer’s Certificate”: A
certificate signed by any Authorized Officer of any Person
delivering such certificate and delivered to the Trustee.
“Operative Documents”: Collectively,
this Agreement, the Certificates and the Custodial
Agreement.
“Opinion of Counsel”: A written
opinion of counsel acceptable, in form and substance, to the
Trustee and delivered to the Trustee and the Rating
Agencies.
“Original Aggregate Loan Balance”:
The sum of the Original Group I Loan Balance, the Original Group
II Loan Balance and the Original Group III Loan Balance.
“Original Group I Loan Balance”: The
aggregate Loan Balance of all the Home Equity Loans in Group I
as of the Cut-Off Date, which is $174,056,605.00.
“Original Group II Loan Balance”:
The aggregate Loan Balance of all the Home Equity Loans in Group
II as of the Cut-Off Date, which is $92,409,475.55.
“Original Group III Loan Balance”:
The aggregate Loan Balance of all the Home Equity Loans in Group
III as of the Cut-Off Date, which is $733,693,407.21.
“Outstanding”: With respect to all
Certificates of a Class, as of any date of determination, all
such Certificates theretofore executed and delivered hereunder
except:
(i)
Certificates theretofore canceled by the
Registrar or delivered to the Registrar for cancellation;
(ii)
Certificates or portions thereof for which full
and final payment of money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent in
trust for the Owners of such Certificates;
(iii)
Certificates in exchange for or in lieu of which
other Certificates have been executed and delivered pursuant to
this Agreement, unless proof satisfactory to the Trustee is
presented that any such Certificates are held by a bona fide
purchaser;
(iv)
Certificates alleged to have been destroyed,
lost or stolen for which replacement Certificates have been
issued as provided for in Section 5.05 hereof; and
(v)
Certificates as to which the Trustee has made
the final distribution thereon, whether or not such Certificate
is ever returned to the Trustee.
“Overcollateralization Amount”: With
respect to any Distribution Date, the excess, if any, of (1) the
aggregate Loan Balance of the Home Equity Loans as of the close
of business on the last day of the preceding Remittance Period
over (2) the aggregate outstanding Certificate Principal
Balances of the Offered Certificates as of that Distribution
Date (after taking into account the payment of the Principal
Distribution Amount on that Distribution Date).
“Owner” or
“Certificateholder”: The Person in whose name a
Certificate is registered in the Register.
“Paying Agent”: Initially, the
Trustee, and thereafter, the Trustee or any other Person that
meets the eligibility standards for the Paying Agent specified
in Section 11.15 hereof and is authorized by the Trustee and the
Depositor to make payments on the Certificates on behalf of the
Trustee.
“Percentage Interest”: With respect
to any Offered Certificates of any Class, a fraction, expressed
as a decimal, the numerator of which is the principal balance
represented by such Offered Certificate as of the Startup Day
and the denominator of which is the Certificate Principal
Balance represented by all the Offered Certificates of such
Class as of the Startup Day. With respect to the Class
X-IO or Class R Certificates, the portion of the Class evidenced
thereby, expressed as a percentage, as stated on the face of
such Certificate, all of which shall total 100% with respect to
the related Class.
“Person”: Any individual,
corporation, limited partnership, limited liability company,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency
or political subdivision thereof.
“Pool Balance”: With respect to any
date, the aggregate of the Loan Balances of all Home Equity
Loans as of such date.
“Prepayment”: Any payment of
principal of a Home Equity Loan which is received by the
Servicer which is not a Scheduled Principal Payment and which is
not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or
months subsequent to the month of prepayment, the portion of
Substitution Amounts representing principal, the portion of the
Loan Purchase Price of any Home Equity Loan purchased from the
Trust pursuant to Section 3.04, 3.06(b) or 8.10(b) hereof
representing principal and the proceeds of any Insurance Policy
which are to be applied as a payment of principal on the related
Home Equity Loan shall be deemed to be Prepayments for all
purposes of this Agreement.
“Preservation Expenses”:
Expenditures made by the Servicer in connection with a
foreclosed Home Equity Loan prior to the liquidation thereof,
including, without limitation, expenditures for real estate
property taxes, hazard insurance premiums, property restoration
or preservation.
“Principal and Interest Account”:
The principal and interest account created by the Servicer
pursuant to Section 8.08(a) hereof. The Principal and
Interest Account shall be an Eligible Account.
“Principal Distribution Amount”: As
to any Distribution Date, the lesser of (a) the aggregate
Certificate Principal Balances of the Offered Certificates
immediately preceding such Distribution Date and (b) the sum of
(i) the Aggregate Principal Amount for such Distribution Date
minus the Excess Overcollateralization Amount, if any, for such
Distribution Date and (ii) the Subordination Increase Amount, if
any, for such Distribution Date.
“Prohibited Transaction”: The
meaning set forth from time to time in the definition thereof at
Section 860F(a)(2) of the Code (or any successor statute
thereto) and applicable to the Trust.
“Property”: The underlying property
securing a Home Equity Loan.
“Prospectus”: The Depositor’s
Prospectus dated March 22, 2005 constituting part of the
Registration Statement.
“Prospectus Supplement”: The Centex
Home Equity Loan Trust 2005-B Prospectus Supplement dated March
22, 2005 to the Prospectus.
“Qualified Liquidation”: The meaning
set forth from time to time in the definition thereof at Section
860F(a)(4) of the Code (or any successor statute thereto) and
applicable to the Trust.
“Qualified Mortgage”: The meaning
set forth from time to time in the definition thereof at Section
860G(a)(3) of the Code (or any successor statute thereto) and
applicable to the Trust.
“Qualified Replacement Mortgage”: A
Home Equity Loan substituted for another pursuant to Section
3.04, 3.05(b) or 3.06(b) hereof, which (i) has a Coupon Rate at
least equal to the Coupon Rate of the Home Equity Loan being
replaced, (ii) is secured by Property that is of the same or
better property type as, or is a single family dwelling and the
same or better occupancy status as, the Property securing the
Home Equity Loan being replaced or is a primary residence, (iii)
shall mature no later than the latest Final Scheduled
Distribution Date with respect to the related Home Equity Loan
Group, (iv) has a Loan-to-Value Ratio as of the Replacement
Cut-Off Date no higher than the Loan-to-Value Ratio of the
replaced Home Equity Loan at such time, (v) shall be of the same
or higher credit quality classification (determined in
accordance with the Seller’s credit underwriting
guidelines set forth in the Seller’s underwriting manual)
as the Home Equity Loan which such Qualified Replacement
Mortgage replaces, (vi) shall be a First Mortgage Loan if the
Home Equity Loan which such Qualified Replacement Mortgage
replaces was a First Mortgage Loan and shall be a First Mortgage
Loan or Second Mortgage Loan if the Home Equity Loan which such
Qualified Replacement Mortgage replaces was a Second Mortgage
Loan, (vii) has an outstanding principal balance as of the
related Replacement Cut-Off Date equal to or less than the
outstanding principal balance of the replaced Home Equity Loan
as of such Replacement Cut-Off Date, (viii) shall not provide
for a “balloon” payment if the related Home Equity
Loan did not provide for a “balloon” payment (and if
such related Home Equity Loan provided for a
“balloon” payment, such Qualified Replacement
Mortgage shall have an original maturity of not less than the
original maturity of such related Home Equity Loan), (ix) shall
be a fixed rate Home Equity Loan if the Home Equity Loan being
replaced is in Group I or an adjustable rate Home Equity Loan if
the Home Equity Loan being replaced is in Group II or Group III,
(x) satisfies the criteria set forth from time to time in the
definition thereof at Section 860G(a)(4) of the Code (or any
successor statute thereto) and applicable to the Trust, (xi)
satisfies the representations and warranties set forth in
Section 3.04(b) hereof, (xii) shall not be 30 days or more
Delinquent and (xiii) if such Home Equity Loan being replaced is
in Group II or Group III, shall adjust based on the same index
as, have no lower margin than, have the same interval between
adjustment dates as and have a maximum Coupon Rate no lower
than, and a minimum Coupon Rate no lower than, the Home Equity
Loan being replaced.
“Rating Agencies”: Collectively,
Moody’s, Fitch and Standard & Poor’s.
“Realized Loss”: As to any
Liquidated Loan (or, in the case of a Cram Down Loss, a Home
Equity Loan that is not a Liquidated Loan), the amount (not less
than zero), if any, by which (A) the sum of (x) the Loan Balance
thereof as of the date of liquidation, (y) the amount of accrued
but unpaid interest thereon and (z) the amount of any Cram Down
Loss with respect thereto is in excess of (B) the Net
Liquidation Proceeds, if any, realized thereon.
“Record Date”: With respect to (i)
any Distribution Date and each Class of Fixed Rate Certificates
and the Class R Certificates, the last Business Day of the
calendar month immediately preceding the calendar month in which
such Distribution Date occurs and (ii) any Distribution Date and
each Class of Variable Rate Certificates and the Class X-IO
Certificates, the Business Day immediately preceding such
Distribution Date, or if definitive Variable Rate Certificates
have been issued, the last Business Day of the calendar month
immediately preceding the calendar month in which such
Distribution Date occurs.
“Recoveries”: With respect to any
Liquidated Loan, an amount received in respect of principal on
that Liquidated Loan, which amount has previously been allocated
as an Applied Realized Loss Amount to a Class or Classes of
Subordinate Certificates, net of reimbursable expenses due and
owing to the Servicer.
“Reference Banks”: Bankers Trust
Company, Barclays Bank PLC, The Bank of Tokyo and National
Westminster Bank PLC, provided that if any of the foregoing
banks are not suitable to serve as a Reference Bank, then any
leading banks selected by CHEC which are engaged in transactions
in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, (ii) which
are not Affiliates of the Seller, (iii) whose quotations appear
on Telerate Page 3750 on the relevant LIBOR Determination Date
and (iv) which have been designated as such by the Seller.
“Register”: The register maintained
by the Registrar in accordance with Section 5.04 hereof, in
which the names of the Owners are set forth.
“Registrar”: The Trustee, acting in
its capacity as Registrar appointed pursuant to Section 5.04
hereof, or any duly appointed and eligible successor thereto.
“Registration Statement”: The
Registration Statement filed by the Depositor with the
Commission (Registration Number 333-105322), including all
amendments thereto and including the Prospectus and Prospectus
Supplement relating to the Offered Certificates.
“REMIC”: A “real estate
mortgage investment conduit” within the meaning of Section
860D of the Code.
“REMIC Opinion”: As defined in
Section 3.04 hereof.
“REMIC Provisions”: Provisions of
the federal income tax law relating to real estate mortgage
investment conduits, which appear at Section 860A through 860G
of subchapter M of chapter 1 of the Code, and related
provisions, and regulations and revenue rulings promulgated
thereunder, as the foregoing may be in effect from time to time.
“Remittance Period”: With respect to
each Monthly Remittance Date, the calendar month immediately
preceding such Monthly Remittance Date.
“REO Property”: A Property acquired
by the Servicer on behalf of the Trust through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Home
Equity Loan.
“Replacement Cut-Off Date”: With
respect to any Qualified Replacement Mortgage, the opening of
business of the first day of the calendar month in which such
Qualified Replacement Mortgage is conveyed to the Trust.
“Representation Letter”: Letters to,
or agreements with, the Depository to effectuate a book-entry
system with respect to the Offered Certificates registered in
the Register under the nominee name of the Depository.
“Required Overcollateralization
Amount”: As to any Distribution Date (1) prior to the
Stepdown Date, the product of (x) 3.45%, and (y) the
Pool Balance as of the Cut-Off Date; and (2) on and after
the Stepdown Date, the greater of (i) the lesser of
(x) the product of 3.45% and the Pool Balance as of the
Cut-Off Date, and (y) the product of 6.90% and the Pool
Balance as of the end of the related Remittance Period and
(ii) the OC Floor; provided, however, that on each
Distribution Date during the continuance of a Trigger Event the
Required Overcollateralization Amount will equal the Required
Overcollateralization Amount in effect as of the Distribution
Date immediately preceding the date on which such Trigger Event
first occurred.
“Schedule of Home Equity Loans”:
Schedule I-A hereto, Schedule I-B hereto, Schedule I-C hereto,
Schedule I-E hereto or Schedule I-F hereto, as the context may
require.
“Scheduled Notional Amount”:
As defined in the applicable Cap Agreement.
“Scheduled Principal Payment”: As of
any date of calculation, with respect to a Home Equity Loan, the
then stated scheduled monthly installment of principal payable
thereunder which, if timely paid, would result in the full
amortization of principal over the term thereof (or, in the case
of a “balloon” Note, the term to the nominal
maturity date for amortization purposes, without regard to the
actual maturity date), without taking into account any
Prepayment made on such Home Equity Loan during the then-current
Remittance Period.
“Second Mortgage Loan”: A Home
Equity Loan which constitutes a second priority mortgage lien
with respect to the related Property.
“Securities Act”: The Securities Act
of 1933, as amended.
“Seller”: Centex Home Equity
Company, LLC, a Delaware limited liability company.
“Seller Home Equity Loans”: The home
equity loans listed on the Seller Schedule of Home Equity
Loans.
“Seller Schedule of Home Equity
Loans”: The Schedule of Home Equity Loans attached as
Schedule I-E hereto.
“Sellers”: The Seller and the
Conduit Seller.
“Senior Certificate”: Any one of the
Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5,
Class AF-6, Class AV-1, Class AV-2, Class AV-3 or Class AV-4
Certificates.
“Senior Enhancement Percentage”: As
to any Distribution Date, the percentage equivalent of a
fraction, the numerator of which is the sum of (i) the aggregate
Certificate Principal Balances of the Subordinate Certificates
and (ii) the Overcollateralization Amount (in each case, after
taking into account the distribution of the Principal
Distribution Amount on that Distribution Date) and the
denominator of which is the Pool Balance as of the last day of
the related Remittance Period.
“Senior Lien”: With respect to any
Second Mortgage Loan, the home equity loan relating to the
corresponding Property having a first priority lien.
“Senior Principal Distribution
Amount”: With respect to (a) any Distribution Date
prior to the Stepdown Date or during the continuance of a
Trigger Event, the lesser of (i) 100% of the Principal
Distribution Amount and (ii) the aggregate Certificate
Principal Balances of the Senior Certificates immediately prior
to that Distribution Date, and (b) any other Distribution
Date, the lesser of (x) 100% of the Principal Distribution
Amount and (y) the excess, if any, of (i) the
aggregate Certificate Principal Balances of the Senior
Certificates immediately prior to that Distribution Date over
(ii) the lesser of (x) the product of 58.40% and the
Pool Balance as of the last day of the related Remittance Period
and (y) the Pool Balance as of the last day of the related
Remittance Period minus the OC Floor.
“Servicer”: Centex Home Equity
Company, LLC, a Delaware limited liability company, and its
permitted successors and assigns.
“Servicer Termination Event”: As
defined in Section 8.20(a) hereof.
“Servicing Advance”: As defined in
Section 8.09(b) and Section 8.13(a) hereof.
“Servicing Fee”: With respect to any
Home Equity Loan Group and a Remittance Period, an amount
retained by the Servicer as compensation for servicing and
administration duties relating to the Home Equity Loans in such
Home Equity Loan Group pursuant to Section 8.15 hereof and equal
to one month’s interest at 0.50% per annum of the then
aggregate outstanding Loan Balance of such Home Equity Loans as
of the first day of each Remittance Period payable on a monthly
basis; provided, however, that if a successor Servicer is
appointed pursuant to Section 8.20 hereof, the Servicing Fee
shall be the amount as agreed upon by the Trustee and the
successor Servicer, and the per annum rate at which the
Servicing Fee is calculated shall not exceed 0.50% per
annum.
“60-Day Delinquent Loan”: With
respect to any Remittance Period, and without duplication, (i)
all REO Properties as of the last day of such Remittance Period,
(ii) each Home Equity Loan with respect to which any portion of
a Monthly Payment is, as of the last day of such Remittance
Period 60 or more days Delinquent (without giving effect to any
grace period), (iii) each Home Equity Loan in foreclosure as of
the last day of such Remittance Period and (iv) each Home Equity
Loan described in clause (ii) that is also in bankruptcy.
“60+ Delinquency Percentage (Rolling Three
Month)”: With respect to any Distribution Date, the
average of the percentage equivalents of the fractions
determined for each of the three immediately preceding
Remittance Periods (or such fewer number of Remittance Periods
since the Cut-Off Date, in the case of the first two
Distribution Dates) the numerator of each of which is equal to
the sum of (without duplication) the aggregate Loan Balance of
60-Day Delinquent Loans for such Remittance Period, and the
denominator of which is the Loan Balance of all of the Home
Equity Loans as of the end of such Remittance Period.
“Standard & Poor’s”:
Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. or any successor thereto.
“Startup Day”: March 24, 2005.
“Stepdown Date”: The earlier to
occur of (1) the Distribution Date after which the aggregate
Certificate Principal Balance of the Senior Certificates is
reduced to zero, and (2) the later to occur of (A) the
Distribution Date in April 2008, and (B) the first Distribution
Date on which the Senior Enhancement Percentage (after giving
effect to the distribution of the Principal Distribution Amount
on such Distribution Date) is at least equal to 41.60%.
“Subordinate Adjusted Cap
Carryover”: With respect to any Distribution Date and
Class of the Subordinate Certificates, an amount equal to such
Class’ pro rata share (based on outstanding Certificate
Principal Balance) of the sum of (i) the product of (A) the
amount, if any, received under the Group II Cap Agreement and
(B) a fraction, the numerator of which is the Group Subordinate
Amount for Group II and the denominator of which is the
aggregate Loan Balance of the Group II Home Equity Loans, and
(ii) the product of (A) the amount, if any, received under the
Group III Cap Agreement and (B) a fraction, the numerator of
which is the Group Subordinate Amount for Group III and the
denominator of which is the aggregate Loan Balance of the Group
III Home Equity Loans, in each case as of the first day of the
related Remittance Period.
“Subordinate Certificates”: Any of
the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7 or Class B Certificates.
“Subordinate Net WAC Cap”: With
respect to any Distribution Date and for each Class of
Subordinate Certificates, the per annum rate equal to the
weighted average of (i) the product of (a) the Group I Net WAC
Cap and (b) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related
Interest Period, (ii) the Group II Net WAC Cap and (iii) the
Group III Net WAC Cap, weighted on the basis of the related
Group Subordinate Amount for such Distribution Date.
“Subordinate Net WAC Cap Carryover”:
With respect to any Distribution Date, and for any Class of
Subordinate Certificates, the sum of (A) the excess of (1) the
amount of interest that such Class of Subordinate Certificates,
as applicable, would otherwise be entitled to receive on the
Distribution Date had the Certificate Rate for such Class been
calculated at the Certificate Rate for such Class and
Distribution Date without regard to the Subordinate Net WAC Cap
over (2) the amount of interest payable on such Class at the
respective Certificate Rate for such Class for the Distribution
Date and (B) the excess described in clause (A) for such Class
for all previous Distribution Dates (including any interest
accrued on that amount at the related Certificate Rate without
regard to the Subordinate Net WAC Cap) not previously paid to
such Class.
“Subordinate REMIC Cap Carryover”:
With respect to any Distribution Date, and for any Class of
Subordinate Certificates, the sum of (A) the excess of (1) the
amount of interest such Class of Subordinate Certificates is
entitled to receive on the Distribution Date (or, if greater,
would be entitled to receive on the Distribution Date had the
Certificate Rate for such Class been calculated at the
Certificate Rate for such Class and Distribution Date without
regard to the Subordinate Net WAC Cap) over (2) the amount of
interest payable on the Master REMIC Regular Certificate with a
Class designation corresponding to such Class of Subordinate
Certificates at the respective certificate interest rate for
such Master REMIC Regular Certificate for the Distribution Date,
as provided in Section 2.08 hereof, and (B) the excess described
in clause (A) for such Class for all previous Distribution Dates
(including any interest accrued thereon at the related
Certificate Rate without regard to the Subordinate Net WAC Cap)
not previously paid to such Class.
“Subordination Deficiency”: As to
any Distribution Date, the excess, if any, of (1) the Required
Overcollateralization Amount for such Distribution Date over (2)
the Overcollateralization Amount for such Distribution Date
after giving effect to the distribution of the Aggregate
Principal Amount on such Distribution Date.
“Subordination Increase Amount”: As
to any Distribution Date, the lesser of (1) the Subordination
Deficiency and (2) the Excess Interest.
“Sub-Servicer”: Any Person with whom
the Servicer has entered into a Sub-Servicing Agreement and who
satisfies any requirements set forth in Section 8.03 hereof in
respect of the qualification of a Sub-Servicer.
“Sub-Servicing Agreement”: The
written contract between the Servicer and any Sub-Servicer
relating to servicing and/or administration of certain Home
Equity Loans as permitted by Section 8.03.
“Subsidiary REMIC”: The segregated
group of assets consisting of all of the assets of the Trust
Estate other than the Supplemental Interest Reserve Fund and the
REMIC interests issued by The Subsidiary REMIC and the Master
REMIC as defined in Section 2.08 hereof, and constituting a
REMIC created hereunder.
“Substitution Amount”: With respect
to the substitution of any Qualified Replacement Mortgage for
any Home Equity Loan, as of the related Replacement Cut-Off
Date, an amount equal to the excess, if any, of the outstanding
principal balance of such Home Equity Loan over the outstanding
principal balance of the Qualified Replacement Mortgage,
together with (without duplication) the aggregate amount of
(1) all unreimbursed Delinquency Advances and unreimbursed
Servicing Advances made, (2) all accrued and unpaid
interest, and (3) any costs and damages incurred by the
Trust in connection with any violation of any predatory or
abusive lending law, with respect to such Home Equity Loan.
“Supplemental Interest Reserve
Fund”: The Supplemental Interest Reserve Fund established
pursuant to Section 7.02(a) and maintained as described in
Section 7.04.
“Tangible Net Worth”: Shall mean the
difference between: (A) the tangible assets of the Seller or
Servicer, as applicable, and its Affiliates calculated in
accordance with generally accepted accounting principles, as
reduced by adequate reserves in each case where a reserve is
appropriate; and (B) all indebtedness, including subordinated
debt, of the Seller or Servicer, as applicable, and its
Affiliates; provided, however, that (i) intangible assets such
as patents, trademarks, trade names, copyrights, licenses, good
will, organization costs, advances or loans to, or receivables
from, directors, officers, employees or affiliates, prepaid
assets, amounts relating to covenants not to compete, pension
assets, deferred charges or treasury stock of any securities
unless the same are readily marketable in the United States of
America or are entitled to be used as a credit against federal
income tax liabilities, shall not be included in the calculation
of (A) above, (ii) securities included as tangible assets shall
be valued at their current market price or cost, whichever is
lower and (iii) any write-up in book value of any assets shall
not be taken into account.
“Tax Matters Person”: The Person
designated pursuant to Section 11.18 hereof to act as the Tax
Matters Person under the Code (or where the context requires,
the Trustee acting as agent for the Tax Matters Person).
“Telerate Page 3750”: The display
designated as page “3750” on the Bridge Telerate
Service (or such other page as may replace page 3750 on that
report for the purpose of displaying London interbank offered
rates of major banks).
“Termination Price”: Means, with
respect to Sections 9.02 and 9.03 hereof, and on any date of
determination thereof, an amount equal to the greater of
(A) the sum of (x) the aggregate outstanding Loan
Balance of the Home Equity Loans (other than those described in
clause (y) below), including accrued interest thereon, as
of such date and (y) in the case of any REO Property and
Home Equity Loans with respect to which foreclosure proceedings
have been initiated or are otherwise 120 days or more Delinquent
as of such date, the fair market value of such REO Property and
Home Equity Loans (disregarding accrued interest
thereon) and (B) the sum of (x) the aggregate
outstanding Certificate Principal Balance of the Offered
Certificates (other than any Class Principal Carryover
Shortfalls), (y) all accrued and unpaid interest on the
Offered Certificates (other than any Group I Net WAC Cap
Carryover, Group II Net WAC Cap Carryover, Group III Net WAC Cap
Carryover and Subordinate Net WAC Cap Carryover) and
(z) the sum of the aggregate amount of any unreimbursed
Delinquency Advances, unreimbursed Servicing Advances,
unreimbursed Compensating Interest and any Delinquency Advances
which the Servicer has theretofore failed to remit.
“Transition Expenses”: Expenses
incurred by the Trustee in connection with the transfer of
servicing upon the termination of the Servicer for a Servicer
Termination Event; provided that the amount shall not exceed
$50,000 for all Groups in any one calendar year (and no more
than $100,000 for all Groups in the aggregate during the term of
the Trust).
“Trigger Event”: The existence of a
Delinquency Event or Cumulative Loss Trigger Event.
“Trust”: Centex Home Equity Loan
Trust 2005-B, the trust created under this Agreement which shall
be comprised of three sub-trusts: (i) one for Group I and any
Trust assets allocable to such Group I, (ii) one for Group II
and any Trust assets allocable to such Group II and
(iii) one for Group III and any Trust assets allocable to
such Group III.
“Trust Estate”: (a) The Home Equity
Loan Assets, (b) such amounts as may be held by the Trustee in
the Certificate Account together with investment earnings on
such amounts, (c) such amounts as may be held by the Trustee in
the Supplemental Interest Reserve Fund together with investment
earnings on such amounts, (d) any Cap Agreement Proceeds
received by the Trustee on the Cap Agreements and such amounts
as may be held by the Trustee in the Cap Agreement Reserve Fund,
excluding any investment earnings on such amounts and (e) such
amounts as may be held in the name of the Trustee in the
Principal and Interest Account, if any, inclusive of investment
earnings thereon, whether in the form of cash, instruments,
securities or other properties (including any Eligible
Investments held by the Servicer).
“Trustee”: JPMorgan Chase Bank,
National Association, a New York banking corporation, not in its
individual capacity but solely as Trustee under this Agreement,
and any successor hereunder.
“Trustee Fee”: The fee payable
monthly to the Trustee on each Distribution Date in an amount
equal to $333.33 for Group I, $333.33 for Group II and $333.34
for Group III, or if there are only two Home Equity Loan Groups,
$500.00 for each Group, or if there is only one Home Equity Loan
Group, $1,000.00.
“Trustee Reimbursable Expenses”: As
of any Distribution Date, the sum of (a) any Trustee Fee and
Transition Expenses not paid pursuant to clauses A.1, B.1 or C.1
of Section 7.03(b) on such Distribution Date and (b) any amounts
owed to the Trustee pursuant to Sections 2.05, 6.12, 7.06,
8.20(o), 10.07, 10.13 and 11.16(a)(v) hereof, and, if the
Trustee is acting as Custodian, any related custodial fees
(including all attorney fees and expenses).
“Underwriters”: Greenwich
Capital Markets, Inc., Banc of America Securities LLC, Citigroup
Global Markets Inc. and Credit Suisse First Boston LLC.
“Underwriter’s Exemption”:
Prohibited Transaction Exemption 2002-41, 67 Fed. Reg.
54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the
U.S. Department of Labor.
“Variable Rate Certificates”: Any of
the Class AV-1 Certificates, Class AV-2 Certificates, Class AV-3
Certificates, Class AV-4 Certificates, Class M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates,
Class M-7 Certificates and Class B Certificates.
“Voting Rights”: The portion of the
voting rights of all of the Certificates which is allocated to
any Certificate. As of any date of determination,
(a) 1% of all Voting Rights shall be allocated to the Class
X-IO Certificates (such Voting Rights to be allocated among the
Owners of Certificates of such Class in accordance with their
respective Percentage Interests), (b) 1% of all Voting Rights
shall be allocated to the Class R Certificates in the aggregate,
or if separate LT-R and R-1 Interests are issued, 1/2 to each
such Class of Interests (such Voting Rights to be allocated
among the Owners of Certificates of each such Class in
accordance with their respective Percentage Interests), and (c)
the remaining Voting Rights shall be allocated among Owners of
the Classes of Offered Certificates in proportion to the
Certificate Principal Balances of their respective Offered
Certificates on such date.
“WAC Excess”: The sum of
(a) the Group I REMIC Cap Carryover allocable to each of
the Fixed Rate Certificates, (b) the Group II REMIC Cap
Carryover allocable to the Class AV-1 Certificates, (c) the
Group III REMIC Cap Carryover allocable to each of the Group III
Certificates and (d) the Subordinate REMIC Cap Carryover
allocable to each of the Subordinate Certificates.
Section 1.02.
Use of Words and Phrases.
“Herein,” “hereby,”
“hereunder,” “hereof,”
“hereinbefore,” “hereinafter” and other
equivalent words refer to this Agreement as a whole and not
solely to the particular section of this Agreement in which any
such word is used. The definitions set forth in Section
1.01 hereof include both the singular and the plural.
Whenever used in this Agreement, any pronoun shall be
deemed to include both singular and plural and to cover all
genders.
Section 1.03.
Captions, Table of Contents.
The captions or headings in this Agreement and
the Table of Contents are for convenience only and in no way
define, limit or describe the scope and intent of any provisions
of this Agreement.
Section 1.04.
Opinions.
Each opinion with respect to the validity,
binding nature and enforceability of documents or Certificates
may be qualified to the extent that the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally
and by general principles of equity (whether considered in a
proceeding or action in equity or at law) and may state that no
opinion is expressed on the availability of the remedy of
specific enforcement, injunctive relief or any other equitable
remedy. Any opinion required to be furnished by any Person
hereunder must be delivered by counsel upon whose opinion the
addressee of such opinion may reasonably rely, and such opinion
may state that it is given in reasonable reliance upon an
opinion of another, a copy of which must be attached, concerning
the laws of a foreign jurisdiction. Any opinion delivered
hereunder shall be addressed to the Rating Agencies and the
Trustee.
END OF ARTICLE I
ARTICLE II
ESTABLISHMENT AND ORGANIZATION OF THE TRUST
Section 2.01.
Establishment of the Trust.
The parties hereto do hereby create and
establish, pursuant to the laws of the State of New York
and this Agreement, the Trust, which, for convenience, shall be
known as “Centex Home Equity Loan Trust 2005-B” and
which shall contain three subtrusts.
Section 2.02.
Office.
The office of the Trust shall be in care of the
Trustee, addressed to JPMorgan Chase Bank, National Association,
at its Corporate Trust Office.
Section 2.03.
Purposes and Powers.
The purpose of the Trust is to engage in the
following activities and only such activities: (i) the issuance
of the Certificates and the acquiring, owning and holding of
Home Equity Loans and the Trust Estate (including the Cap
Agreements) in connection therewith; (ii) activities that are
necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith, including the
investment of moneys in accordance with this Agreement; and
(iii) such other activities as may be required in connection
with conservation of the Trust Estate and distributions to the
Owners; provided, however, that nothing contained herein shall
permit the Trustee to take any action which would adversely
affect the status of any REMIC created hereunder.
Section 2.04.
Appointment of the Trustee; Declaration of
Trust.
The Depositor hereby appoints the Trustee as
trustee of the Trust effective as of the Startup Day, to have
all the rights, powers and duties set forth herein. The
Trustee hereby acknowledges and accepts such appointment,
represents and warrants its eligibility as of the Startup Day to
serve as Trustee pursuant to Section 10.08 hereof and declares
that it will hold the Trust Estate in trust upon and subject to
the conditions set forth herein for the benefit of the Owners.
Section 2.05.
Expenses of the Trust.
All expenses of the Trust, including (i) the
fees and reimbursable expenses of the Trustee in connection with
the performance of its duties hereunder and (ii) to the extent
not set forth herein, any other expenses of the Trustee that
have been reviewed and approved by the Seller, which review
shall not be required in connection with the enforcement of a
remedy by the Trustee resulting from a default under this
Agreement, shall be paid pursuant to Section 7.03(b).
Section 2.06.
Ownership of the Trust.
On the Startup Day the ownership interests in
the Trust shall be transferred as set forth in Section 4.02
hereof, such transfer to be evidenced by sale of the
Certificates as described therein. Thereafter, transfer of
any ownership interest shall be governed by Sections 5.04 and
5.08 hereof.
Section 2.07.
Situs of the Trust.
It is the intention of the parties hereto that
the Trust constitute a trust under the laws of the State of New
York. The Trust will be created in the State of New York.
The Trust’s only office will be at the office of the
Trustee as set forth in Section 2.02 hereof.
Section 2.08.
Designation of Interests in REMICs.
(a)
As provided herein, the Trustee shall elect that
the Trust Estate (exclusive of the assets held in the
Supplemental Interest Reserve Fund and the Cap Agreement Reserve
Fund) be treated for federal income tax purposes as comprising
two real estate mortgage investment conduits (each a
“REMIC” or, in the alternative, the
“Subsidiary REMIC” and the “Master
REMIC”). Each Certificate, other than the Class R
Certificate, represents ownership of a regular interest in the
Master REMIC for purposes of the REMIC Provisions. Each
Certificate, other than the Class X-IO Certificates, also
represents rights with respect to payments to be made from the
Supplemental Interest Reserve Fund as further described in
Section 7.04 of this Agreement. The Class X-IO
Certificates also evidence ownership of the assets held from
time to time in the Supplemental Interest Reserve Fund, as
further described in Section 7.04 hereof. The Class R
Certificate represents ownership of the sole class of residual
interest in each of the Subsidiary REMIC, and the Master REMIC
for purposes of the REMIC Provisions.
(b)
The Master REMIC shall hold as its assets the
several classes of uncertificated Subsidiary REMIC Interests,
other than the LT-R Interest, and each such Subsidiary REMIC
Interest (other than the LT-R Interest) is hereby designated as
a regular interest in the Subsidiary REMIC for purposes of the
REMIC Provisions. The Subsidiary REMIC shall hold as its
assets the Home Equity Loans and all collections and accounts
related thereto, other than the Supplemental Interest Reserve
Fund and the Cap Agreement Reserve Fund.
(c)
For purposes of the REMIC Provisions, the latest
possible maturity date for each regular interest in each REMIC
created hereby is the Latest Possible Maturity Date.
(d)
[Reserved].
(e)
[Reserved].
(f)
Subsidiary REMIC. The following table sets
forth (or describes) the class designation, interest rate, and
initial principal balance for each Subsidiary REMIC Interest
(each such Interest other than the LT-R Interest, a
“Subsidiary REMIC Regular Interest”):
|
Interest
Designation
|
Interest
Rate
|
Initial
Principal
Balance
|
Corresponding Class
of Master REMIC
Certificates
|
|
LT-A1(1)
|
(2)
|
(6)
|
Class AF-1
|
|
LT-A2(1)
|
(2)
|
(6)
|
Class AF-2
|
|
LT-A3(1)
|
(2)
|
(6)
|
Class AF-3
|
|
LT-A4(1)
|
(2)
|
(6)
|
Class AF-4
|
|
LT-A5(1)
|
(2)
|
(6)
|
Class AF-5
|
|
LT-A6(1)
|
(2)
|
(6)
|
Class AF-6
|
|
LT-AV-1(1)
|
(2)
|
(6)
|
Class AV-1
|
|
LT-AV-2(1)
|
(2)
|
(6)
|
Class AV-2
|
|
LT-AV-3(1)
|
(2)
|
(6)
|
Class AV-3
|
|
LT-AV-4(1)
|
(2)
|
(6)
|
Class AV-4
|
|
LT-M-1(1)
|
(2)
|
(6)
|
Class M-1
|
|
LT-M-2(1)
|
(2)
|
(6)
|
Class M-2
|
|
LT-M-3(1)
|
(2)
|
(6)
|
Class M-3
|
|
LT-M-4(1)
|
(2)
|
(6)
|
Class M-4
|
|
LT-M-5(1)
|
(2)
|
(6)
|
Class M-5
|
|
LT-M-6(1)
|
(2)
|
(6)
|
Class M-6
|
|
LT-M-7(1)
|
(2)
|
(6)
|
Class M-7
|
|
LT-B(1)
|
(2)
|
(6)
|
Class B
|
|
LT-Grp IA
|
(3)
|
(7)
|
Not Applicable
|
|
LT-Grp IB
|
(3)
|
(7)
|
Not Applicable
|
|
LT-Grp IIA
|
(4)
|
(8)
|
Not Applicable
|
|
LT-Grp IIB
|
(4)
|
(8)
|
Not Applicable
|
|
LT-Grp IIIA
|
(5)
|
(9)
|
Not Applicable
|
|
LT-Grp IIIB
|
(5)
|
(9)
|
Not Applicable
|
|
LT-Excess
|
(2)
|
(10)
|
Not Applicable
|
|
LT-R
|
(11)
|
(11)
|
Not Applicable
|
(1)
The Subsidiary REMIC Accretion Directed
Interests.
(2)
The interest rate on this Interest shall be a
rate equal to the Adjusted Pool Net WAC, which rate can be
calculated as a rate equal to the weighted average of the Net
Coupon Rates on the Home Equity Loans.
(3)
The interest rate on this Interest shall be a
rate equal to the Group I Net WAC Cap, which rate can be
calculated as a rate equal to the weighted average of the Net
Coupon Rates on the Group I Home Equity Loans.
(4)
The interest rate on this Interest shall be a
rate equal to the Group II Net WAC Cap, which rate can be
calculated as a rate equal to the weighted average of the Net
Coupon Rates on the Group II Home Equity Loans.
(5)
The interest rate on this Interest shall be a
rate equal to the Group III Net WAC Cap, which rate can be
calculated as a rate equal to the weighted average of the Net
Coupon Rates on the Group III Home Equity Loans.
(6)
This Interest shall have an initial principal
balance equal to 25% of the initial principal balance of its
corresponding class in the Master REMIC. Principal
payments and Realized Losses from Group I Home Equity Loans
shall be paid (or allocated) to maintain the 25% ratio for the
Subsidiary REMIC Interests corresponding to the Master REMIC
Classes.
(7)
This Interest shall have an initial principal
balance equal to 25% of the aggregate of the principal balances
of each Group I Home Equity Loan as of the Cut-Off Date.
(8)
This Interest shall have an initial principal
balance equal to 25% of the aggregate of the principal balances
of each Group II Home Equity Loan as of the Cut-Off Date.
(9)
This Interest shall have an initial principal
balance equal to 25% of the aggregate of the principal balances
of each Group III Home Equity Loan as of the Cut-Off Date.
(10)
This Interest shall have an initial principal
balance equal to (i) the initial principal balances of the Home
Equity Loans as of the Cut-Off Date less (ii) an amount equal to
the sum of the initial principal balances of the Subsidiary
REMIC Interests, other than the LT-Excess Interest.
(11)
The LT-R Interest shall have no principal
balance and no interest rate and shall be entitled to only those
distributable assets, if any, remaining in the Subsidiary REMIC
on each Distribution Date after all amounts required to be
distributed to the remaining Subsidiary REMIC Interests and
applicable Trust expenses have been paid. It is expected
that there will not be any distributions on the LT-R
Interest.
On each Distribution Date, all principal
payments received (or advances) and any Realized Losses with
respect to the Home Equity Loans (plus accrued interest on the
LT-Excess Interest to the extent necessary) shall be allocated
and applied in reduction of the principal balances of the
Subsidiary REMIC Interests such that following such allocation
and distribution:
(i)
the principal balance of each of the Subsidiary
REMIC Accretion Directed Interests equal 25% of the principal
balance of its Corresponding Class of Master REMIC
Certificates;
(ii)
the principal balance of each of the LT-Grp IA
and LT-Grp IB Interests equals 25% of the aggregate of the
principal balances of the Group I Home Equity Loans as of the
beginning of the Remittance Period related to the next
Distribution Date;
(iii)
the principal balance of each of the LT-Grp IIA
and LT-Grp IIB Interests equals 25% of the aggregate of the
principal balances of the Group II Home Equity Loans as of the
beginning of the Remittance Period related to the next
Distribution Date; and
(iv)
the principal balance of the LT-Excess Interest
equals the excess of the aggregate of the principal balances of
the Home Equity Loans as of the opening of business on the first
Business Day of the Remittance Period related to the next
Distribution Date over the aggregate of the principal balances
of the remaining Subsidiary REMIC Interests as reduced on such
Distribution Date.
(g)
The Master REMIC. The Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class
AV-1, Class AV-2, Class AV-3, Class AV-4, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class B
and Class X-IO Certificates are hereby designated as
“regular interests” with respect to the Master REMIC
(the “Master REMIC Regular Certificates”) and the
R-1 Interest is hereby designated as the single “residual
interest” with respect to the Master REMIC.
The beneficial ownership interest in the Master
REMIC created hereunder shall be evidenced by the interests
having the following characteristics and terms:
|
Class Designation
|
Initial Certificate
Principal Balance
|
Certificate Interest Rate
|
Final Scheduled
Distribution Date
|
|
Class
AF-1
|
$67,500,000
|
(1)
|
August 2021
|
|
Class
AF-2
|
$16,000,000
|
(2)
|
August 2024
|
|
Class
AF-3
|
$16,550,000
|
(3)
|
June 2027
|
|
Class
AF-4
|
$37,500,000
|
(4)
|
March 2033
|
|
Class
AF-5
|
$20,370,000
|
(5)
|
March 2035
|
|
Class
AF-6
|
$16,000,000
|
(6)
|
March 2035
|
|
Class
AV-1
|
$73,000,000
|
(7)
|
November 2034
|
|
Class
AV-2
|
$338,000,000
|
(8)
|
January 2027
|
|
Class
AV-3
|
$232,500,000
|
(9)
|
March 2035
|
|
Class
AV-4
|
$9,080,000
|
(10)
|
March 2035
|
|
Class
M-1
|
$35,000,000
|
(12)
|
March 2035
|
|
Class
M-2
|
$33,000,000
|
(13)
|
March 2035
|
|
Class
M-3
|
$20,500,000
|
(14)
|
March 2035
|
|
Class
M-4
|
$18,500,000
|
(15)
|
March 2035
|
|
Class
M-5
|
$16,000,000
|
(16)
|
March 2035
|
|
Class
M-6
|
$18,000,000
|
(17)
|
March 2035
|
|
Class
M-7
|
$15,000,000
|
(18)
|
March 2035
|
|
Class B
|
$17,500,000
|
(19)
|
March 2035
|
|
Class
X-IO
|
(20)
|
(21)
|
N/A
|
|
Class
R-1
|
(22)
|
(23)
|
N/A
|
(1)
For each Interest Period, this Class shall bear
interest at the least of (i) 4.0500% per annum (or 4.5500% per
annum for each Interest Period occurring after the Clean-Up Call
Date), (ii) the Group I Net WAC Cap and (iii) the Adjusted Pool
Net WAC.
(2)
For each Interest Period, this Class shall bear
interest at the least of (i) 4.2400% per annum (or 4.7400% per
annum for each Interest Period occurring after the Clean-Up Call
Date), (ii) the Group I Net WAC Cap and (iii) the Adjusted Pool
Net WAC.
(3)
For each Interest Period, this Class shall bear
interest at the least of (i) 4.4150% per annum (or 4.9150% per
annum for each Interest Period occurring after the Clean-Up Call
Date), (ii) the Group I Net WAC Cap and (iii) the Adjusted Pool
Net WAC.
(4)
For each Interest Period, this Class shall bear
interest at the least of (i) 4.8930% per annum (or 5.3930% per
annum for each Interest Period after the Clean-up Call Date),
(ii) the Group I Net WAC Cap and (iii) the Adjusted Pool Net
WAC.
(5)
For each Interest Period, this Class shall bear
interest at the least of (i) 5.3100% per annum (or 5.8100% per
annum for each Interest Period after the Clean-up Call Date),
(ii) the Group I Net WAC Cap and (iii) the Adjusted Pool Net
WAC.
(6)
For each Interest Period, this Class shall bear
interest at the least of (i) 4.8650% per annum (or 5.3650% per
annum for each Interest Period occurring after Clean-Up Call
Date), (ii) the Group I Net WAC Cap and (iii) the Adjusted Pool
Net WAC.
(7)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.1550% per annum (or
LIBOR plus 0.3100% per annum for each Interest Period occurring
after the Clean-Up Call Date), (ii) the Group II Net WAC Cap and
(iii) the Adjusted Pool Net WAC.
(8)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.0700% per annum (or
LIBOR plus 0.1400% per annum for each Interest Period occurring
after the Clean-Up Call Date), (ii) the Group III Net WAC Cap
and (iii) the Adjusted Pool Net WAC.
(9)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.1700% per annum (or
LIBOR plus 0.3400% per annum for each Interest Period occurring
after the Clean-Up Call Date), (ii) the Group III Net WAC Cap
and (iii) the Adjusted Pool Net WAC.
(10)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.3000% per annum (or
LIBOR plus 0.6000% per annum for each Interest Period occurring
after the Clean-Up Call Date), (ii) the Group III Net WAC Cap
and (iii) the Adjusted Pool Net WAC.
(11)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.4000% per annum (or
LIBOR plus 0.6000% per annum for each Interest Period occurring
after the Clean-Up Call Date), (ii) the Group III Net WAC Cap
and (iii) the Adjusted Pool Net WAC.
(12)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.4300% per annum (or
LIBOR plus 0.6450% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(13)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.4600% per annum (or
LIBOR plus 0.6900% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(14)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.6400% per annum (or
LIBOR plus 0.9600% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(15)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.6800% per annum (or
LIBOR plus 1.0200% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(16)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 0.7500% per annum (or
LIBOR plus 1.1250% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (ii) the Adjusted Pool Net
WAC.
(17)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 1.2000% (or LIBOR plus
1.8000% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (ii) the Adjusted Pool Net WAC.
(18)
For each Interest Period, this Class shall bear
interest at the least of (i) LIBOR plus 1.3500% (or LIBOR plus
2.0250% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (ii) the Adjusted Pool Net WAC.
(19)
The Class X-IO Certificate shall have an initial
principal balance equal to the excess of the principal balance
of the Home Equity Loans as of the Cut-Off Date over the sum of
the initial principal balances of the Certificates, other than
the Class X-IO and Class R Certificates. It shall not be
entitled to interest on its principal balance. The Class
X-IO Certificate shall also have an initial notional balance
equal to the aggregate of the principal balance of each Home
Equity Loan as of the Cut-Off Date and such notional balance for
each Distribution Date shall equal the aggregate principal
balance of the Home Equity Loans as of the beginning of the
related Remittance Period.
(20)
The Class X-IO Certificate shall be entitled to
receive interest on its notional balance at a per annum rate
equal to the excess of (i) the weighted average of the interest
rates of the Subsidiary REMIC 2 Accretion Directed Interests,
and the LT-Grp IA, LT-Grp IB, LT-Grp IIA, LT-Grp IIB, LT-Grp
IIIA, LT-Grp IIIB, LT-Excess Interests, weighted on the
principal balance of each such Interest, over (ii) the product
of (x) two and (y) the weighted average of the interest rates of
the Subsidiary REMIC 2 Accretion Directed Interests and
LT-Excess Interest, weighted on the principal balance of each
such Interest, treating for purposes of this clause (y) the
interest rates of the LT-Excess Interest as capped at zero and
the interest rate of each of the remaining of such interests as
capped at the interest rate of its corresponding class in the
Master REMIC. In addition, the Class X-IO Certificates
shall be entitled to an amount, as principal, equal to the
amount that the Original Aggregate Loan Balance exceeds the
aggregate Certificate Principal Balance of the Offered
Certificates as of the Startup Date.
(21)
The Class R Certificates represent ownership of
the R-1 Interest and the LT-R Interest. The Class R
Certificates do not have either a principal balance or an
interest rate.
(h)
The foregoing REMIC structure is intended to
cause all of the cash from the Home Equity Loans to flow through
to the Master REMIC as cash flow on a REMIC regular interest,
without creating any shortfall—actual or potential (other
than for credit losses) to any REMIC regular interest. To
the extent that the structure is believed to diverge from such
intention the Trustee shall resolve ambiguities to accomplish
such result and shall to the extent necessary rectify any
drafting errors or seek clarification to the structure without
Certificateholder approval (but with guidance of counsel) to
accomplish such intention.
Section 2.09.
Miscellaneous REMIC Provisions.
(a)
The Startup Day is hereby designated as the
“startup day” of each REMIC created hereunder within
the meaning of Section 860G(a)(9) of the Code.
(b)
The Owner of the Tax Matters Person Residual
Interest in each REMIC created hereunder is hereby designated as
“tax matters person” as defined in the REMIC
Provisions with respect to the REMIC.
(c)
The Trust and each REMIC created hereunder
shall, for federal income tax purposes, maintain books on a
calendar year basis and report income on an accrual basis.
(d)
The Trustee shall cause each REMIC created
hereunder to elect to be treated as a REMIC under Section 860D
of the Code. Any inconsistencies or ambiguities in this
Agreement or in the administration of the Trust shall be
resolved in a manner that preserves the validity of such
election to be treated as a REMIC. The Trustee shall
report all expenses of the Trust Estate to each REMIC created
hereunder.
(e)
For all federal tax law purposes, amounts
transferred by the Trustee to the Owners of the Class R
Certificates shall be treated as distributions by each
respective REMIC created hereunder.
(f)
The Trustee shall provide to the Internal
Revenue Service and to the person described in Section
860E(e)(3) and (6) of the Code the information described in
Treasury Regulation Section 1.860D-1(b)(5)(ii), or any successor
regulation thereto with respect to each REMIC created hereunder.
Such information will be provided in the manner described
in Treasury Regulation Section 1.860E-2(a)(5), or any successor
regulation thereto.
END OF ARTICLE II
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE DEPOSITOR, THE SERVICER AND THE SELLERS;
COVENANT OF SELLER TO CONVEY HOME EQUITY LOANS
Section 3.01.
Representations and Warranties of the
Depositor.
The Depositor hereby represents, warrants and
covenants to the Trustee that as of the Startup Day:
(a)
The Depositor is a limited liability company
duly formed and validly existing under the laws governing its
creation and existence, is not in violation of the laws of any
state in which any Property or the Depositor is located or doing
business which violation would materially and adversely affect
the condition (financial or other) or the operations of the
Depositor or its properties or the ability of the Trust to
collect amounts due on any Home Equity Loan and is in good
standing in each jurisdiction in which the nature of its
business or the properties owned or leased by it make such
qualification necessary. The Depositor has all requisite
limited liability company power and authority to own and operate
its properties, to carry out its business as presently conducted
and as proposed to be conducted and to enter into and discharge
its obligations under this Agreement and the other Operative
Documents to which it is a party.
(b)
The execution and delivery of this Agreement and
the other Operative Documents to which it is a party by the
Depositor and its performance and compliance with the terms of
this Agreement and the other Operative Documents to which it is
a party have been duly authorized by all necessary limited
liability company action on the part of the Depositor and will
not violate the Depositor’s certificate of formation or
amended and restated limited liability company agreement or
constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in a
breach of, any material contract, agreement or other instrument
to which the Depositor is a party or by which the Depositor is
bound or violate any statute or any order, rule or regulation of
any court, governmental agency or body or other tribunal having
jurisdiction over the Depositor or any of its properties.
(c)
This Agreement and the other Operative Documents
to which the Depositor is a party, assuming due authorization,
execution and delivery by the other parties hereto and thereto,
each constitutes a valid, legal and binding obligation of the
Depositor, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement hereof and thereof
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors’ rights generally and by general principles of
equity (whether considered in a proceeding or action in equity
or at law).
(d)
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,
which default could materially and adversely affect the
condition (financial or other) or operations of the Depositor or
its properties or the consequences of which could materially and
adversely affect its performance hereunder and under the other
Operative Documents to which the Depositor is a party.
(e)
No litigation, proceeding or investigation is
pending with respect to which the Depositor has received service
of process or, to the best of the Depositor’s knowledge,
threatened against the Depositor which litigation, proceeding or
investigation might have consequences that would prohibit its
entering into this Agreement or any other Operative Documents to
which it is a party or that would materially and adversely
affect the condition (financial or otherwise) or operations of
the Depositor or its properties or might have consequences that
would materially and adversely affect the validity or
enforceability of the Home Equity Loans or the Depositor’s
performance hereunder and under the other Operative Documents to
which the Depositor is a party.
(f)
The statements contained in the Registration
Statement which describe the Depositor or matters or activities
for which the Depositor is responsible in accordance with the
Operative Documents or which are attributed to the Depositor
therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement of
a material fact with respect to the Depositor or omit to state a
material fact required to be stated therein or necessary in
order to make the statements contained therein with respect to
the Depositor not misleading.
(g)
Immediately prior to the sale and assignment by
the Depositor to the Trustee on behalf of the Trust of each Home
Equity Loan, the Depositor had good title to each Home Equity
Loan (insofar as such title was conveyed to it by the Sellers)
subject to no prior lien, claim, participation interest,
mortgage, security interest, pledge, charge or other encumbrance
or other interest of any nature (other than liens which will be
simultaneously released).
(h)
As of the Startup Day, the Depositor has
transferred all right, title and interest in the Home Equity
Loans to the Trustee on behalf of the Trust.
(i)
The Depositor has not transferred the Home
Equity Loans to the Trustee on behalf of the Trust with any
intent to hinder, delay or defraud any of its creditors.
(j)
All actions, approvals, consents, waivers,
exemptions, variances, franchises, orders, permits,
authorizations, rights and licenses required to be taken, given
or obtained, as the case may be, by or from any federal, state
or other governmental authority or agency (other than any such
actions, approvals, etc. under any state securities laws, real
estate syndication or “Blue Sky” statutes, as to
which the Depositor makes no such representation or warranty),
that are necessary or advisable in connection with the purchase
and sale of the Certificates and the execution and delivery by
the Depositor of the Operative Documents to which it is a party,
have been duly taken, given or obtained, as the case may be, are
in full force and effect on the date hereof, are not subject to
any pending proceedings or appeals (administrative, judicial or
otherwise) and either the time within which any appeal therefrom
may be taken or review thereof may be obtained has expired or no
review thereof may be obtained or appeal therefrom taken, and
are adequate to authorize the consummation of the transactions
contemplated by this Agreement and the other Operative Documents
on the part of the Depositor and the performance by the
Depositor of its obligations under this Agreement and such of
the other Operative Documents to which it is a party.
Section 3.02.
Representations and Warranties of the
Servicer.
The Servicer hereby represents, warrants and
covenants to the Depositor, the Trustee and the Owners that as
of the Startup Day:
(a)
The Servicer is a limited liability company duly
formed and validly existing under the laws governing its
creation and existence, is in compliance with the laws of each
state in which any Property is located to the extent necessary
to enable it to perform its obligations hereunder and is in good
standing in each jurisdiction in which the nature of its
business or the properties owned or leased by it make such
qualification necessary. The Servicer has all requisite
limited liability company power and authority to own and operate
its properties, to carry out its business as presently conducted
and as proposed to be conducted and to enter into and discharge
its obligations under this Agreement and the other Operative
Documents to which the Servicer is a party.
(b)
The execution and delivery of this Agreement and
any other Operative Document to which it is a party by the
Servicer and its performance and compliance with the terms
hereof and thereof have been duly authorized by all necessary
limited liability company action on the part of the Servicer and
will not violate the Servicer’s certificate of formation
or limited liability company agreement or constitute a default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any
material contract, agreement or other instrument to which the
Servicer is a party or by which the Servicer is bound or violate
any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having
jurisdiction over the Servicer or any of its properties.
(c)
This Agreement and the other Operative Documents
to which the Servicer is a party, assuming due authorization,
execution and delivery by the other parties hereto and thereto,
each constitutes a valid, legal and binding obligation of the
Servicer, enforceable against it in accordance with the terms
hereof and thereof, except as the enforcement hereof and thereof
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors’ rights generally and by general principles of
equity (whether considered in a proceeding or action in equity
or at law).
(d)
The Servicer 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,
which default could materially and adversely affect the
condition (financial or otherwise) or operations of the Servicer
or its properties or the consequences of which could materially
and adversely affect its performance hereunder or under the
other Operative Documents to which the Servicer is a party.
(e)
No litigation, proceeding or investigation is
pending with respect to which the Servicer has received service
of process or, to the best of the Servicer’s knowledge,
threatened against the Servicer which litigation, proceeding or
investigation might have consequences that would prohibit its
entering into this Agreement or any other Operative Documents to
which it is a party or that would materially and adversely
affect the condition (financial or otherwise) or operations of
the Servicer or its properties or might have consequences that
would materially and adversely affect the validity or the
enforceability of the Home Equity Loans or the Servicer’s
performance hereunder and under the other Operative Documents to
which the Servicer is a party.
(f)
The statements contained in the Registration
Statement which describe the Servicer or matters or activities
for which the Servicer is responsible in accordance with the
Operative Documents or which are attributed to the Servicer
therein are true and correct in all material respects, and the
Registration Statement does not contain any untrue statement of
a material fact with respect to the Servicer or omit to state a
material fact required to be stated therein or necessary to make
the statements contained therein with respect to the Servicer
not misleading.
(g)
The Servicing Fee is a “current (normal)
servicing fee rate” as that term is used in Statement of
Financial Accounting Standards No. 65 issued by the Financial
Accounting Standards Board. Neither the Servicer nor any
Affiliate thereof will report on any financial statements any
part of the Servicing Fee as an adjustment to the sales price of
the Home Equity Loans.
(h)
All actions, approvals, consents, waivers,
exemptions, variances, franchises, orders, permits,
authorizations, rights and licenses required to be taken, given
or obtained, as the case may be, by or from any federal, state
or other governmental authority or agency (other than any such
actions, approvals, etc. under any state securities laws, real
estate syndication or “Blue Sky” statutes, as to
which the Servicer makes no such representation or warranty),
that are necessary or advisable in connection with the execution
and delivery by the Servicer of the Operative Documents to which
it is a party, have been duly taken, given or obtained, as the
case may be, are in full force and effect on the date hereof,
are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time
within which any appeal therefrom may be taken or review thereof
may be obtained has expired or no review thereof may be obtained
or appeal therefrom taken, and are adequate to authorize the
consummation of the transactions contemplated by this Agreement
and the other Operative Documents on the part of the Servicer
and the performance by the Servicer of its obligations under
this Agreement and such of the other Operative Documents to
which it is a party.
(i)
The collection practices used by the Servicer
with respect to the Home Equity Loans have been, in all material
respects, legal, proper, prudent and customary in the home
equity mortgage servicing business.
(j)
The transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer.
(k)
The Servicer is not in default under any
agreement involving financial obligations or on any outstanding
obligation, in any such case which could materially adversely
impact the financial condition or operations of the Servicer or
adversely impact the Servicer’s performance of its
obligations under the Operative Documents.
(l)
There are no Sub-Servicers as of the Startup
Day.
It is understood and agreed that the
representations and warranties set forth in this Section 3.02
shall survive delivery of the Home Equity Loans to the Trustee.
Upon discovery by any of the Depositor, the
Seller, the Servicer, the Custodian, any Sub-Servicer, any Owner
or the Trustee (each, for purposes of this paragraph, a party)
of a breach of any of the representations and warranties set
forth in this Section 3.02 which materially and adversely
affects the interests of the Owners, the party discovering such
breach shall give prompt written notice to the other parties.
As promptly as practicable, but in any event within 60
days of its discovery or its receipt of notice of breach, the
Servicer shall cure such breach in all material respects.
Section 3.03.
Representations and Warranties of the
Sellers.
Each of the Seller and the Conduit Seller, as
applicable, hereby severally and not jointly represents,
warrants and covenants to the Depositor, the Trustee and the
Owners that as of the Startup Day:
(a)
In the case of the Seller and the Conduit
Seller, that each is a limited liability company, duly formed
and validly existing under the laws governing its creation and
existence, neither the Seller nor the Conduit Seller is in
violation of the laws of any state in which any Property or
either of the Seller or the Conduit Seller, as applicable, is
located or doing business which violation would materially and
adversely affect the condition (financial or otherwise) or
operations of the Seller or the Conduit Seller, as applicable,
or its properties or the ability of the Trust to collect any
amounts on any Home Equity Loan and each of the Seller and the
Conduit Seller is in good standing in each jurisdiction in which
the nature of its business or the properties owned or leased by
it make such qualification necessary. The Seller or the
Conduit Seller, as applicable, has all requisite limited
liability company power and authority to own and operate its
properties, to carry out its business as presently conducted and
as proposed to be conducted and to enter into and discharge its
obligations under this Agreement and the other Operative
Documents to which it is a party.
(b)
The execution and delivery of this Agreement and
the other Operative Documents to which the Seller or the Conduit
Seller, as applicable, is a party and its performance and
compliance with the terms of this Agreement and the other
Operative Documents to which it is a party have been duly
authorized by all necessary limited liability company action and
will not violate its certificate of formation or amended and
restated limited liability company agreement, or constitute a
default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in a breach
of, any material contract, agreement or other instrument to
which it is a party or by which it is bound or violate any
statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having
jurisdiction over it or any of its properties.
(c)
This Agreement and the other Operative Documents
to which the Seller or the Conduit Seller, as applicable, is a
party, assuming due authorization, execution and delivery by the
other parties hereto and thereto, each constitutes a valid,
legal and binding obligation of the Seller or the Conduit
Seller, as applicable, enforceable hereof and thereof against it
in accordance with the terms hereof and thereof, except as the
enforcement hereof and thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally and by
general principles of equity (whether considered in a proceeding
or action in equity or at law).
(d)
Neither the Seller nor the Conduit Seller, as
applicable, is 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, which default could
materially and adversely affect the condition (financial or
other) or operations of the Seller or the Conduit Seller, as
applicable, or its properties or the consequences of which could
materially and adversely affect its performance hereunder and
under the other Operative Documents to which it is a party.
(e)
No litigation, proceeding or investigation is
pending with respect to which the Seller or the Conduit Seller,
as applicable, has received service of process or, to the best
of its knowledge, threatened against it which litigation,
proceeding or investigation might have consequences that would
prohibit its entering into this Agreement or any other Operative
Documents to which it is a party or that would materially and
adversely affect the condition (financial or otherwise) or
operations of the Seller or the Conduit Seller, as applicable,
or its properties or might have consequences that would
materially and adversely affect the validity or enforceability
of the Home Equity Loans or its performance hereunder and under
the other Operative Documents to which it is a party.
(f)
The statements contained in the Registration
Statement which describe the Seller or the Conduit Seller, as
applicable, or matters or activities for which it is responsible
in accordance with the Operative Documents or which are
attributed to it therein are true and correct in all material
respects, and the Registration Statement does not contain any
untrue statement of a material fact with respect to the Seller
or the Conduit Seller, as applicable, or omit to state a
material fact required to be stated therein or necessary in
order to make the statements contained therein with respect to
the Seller or the Conduit Seller, as applicable, not
misleading.
(g)
[Reserved].
(h)
All actions, approvals, consents, waivers,
exemptions, variances, franchises, orders, permits,
authorizations, rights and licenses required to be taken, given
or obtained, as the case may be, by or from any federal, state
or other governmental authority or agency (other than any such
actions, approvals, etc. under any state securities laws, real
estate syndication or “Blue Sky” statutes, as to
which the Seller or the Conduit Seller, as applicable, makes no
such representation or warranty), that are necessary or
advisable in connection with the purchase and sale of the
Certificates and the execution and delivery by the Seller or the
Conduit Seller, as applicable, of the Operative Documents to
which it is a party, have been duly taken, given or obtained, as
the case may be, are in full force and effect on the date
hereof, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time
within which any appeal therefrom may be taken or review thereof
may be obtained has expired or no review thereof may be obtained
or appeal therefrom taken, and are adequate to authorize the
consummation of the transactions contemplated by this Agreement
and the other Operative Documents on the part of the Seller or
the Conduit Seller, as applicable, and the performance by the
Seller or the Conduit Seller, as applicable, of its obligations
under this Agreement and such of the other Operative Documents
to which it is a party.
(i)
The origination practices used by the Seller
with respect to the Home Equity Loans have been, in all material
respects, legal, proper, prudent and customary in the home
equity lending business. All of the Home Equity Loans were
originated by the Seller, an Affiliate of the Seller or a broker
for simultaneous assignment to the Seller or were acquired by
the Seller from correspondent lenders and reunderwritten to
comply with the Seller’s underwriting standards.
(j)
The transactions contemplated by this Agreement
are in the ordinary course of business of the Seller or the
Conduit Seller, as applicable.
(k)
The Trustee, the Seller and the Conduit Seller
have no obligation to register the Trust and the Trust has no
obligation to register as an investment company under the
Investment Company Act of 1940, as amended.
(l)
The Seller or the Conduit Seller, as applicable,
is not insolvent, nor will it be made insolvent by the transfer
of the Home Equity Loans, nor are the Seller or the Conduit
Seller, as applicable, aware of any pending insolvency.
(m)
The Seller or the Conduit Seller, as applicable,
received fair consideration and reasonably equivalent value in
exchange for the sale of the interests in the Home Equity Loans
transferred by it.
(n)
The Seller or the Conduit Seller, as applicable,
did not sell any interest in any Home Equity Loan with any
intent to hinder, delay or defraud any of its creditors.
(o)
No material adverse change affecting any
security for the Offered Certificates has occurred prior to
delivery of and payment for the Offered Certificates.
(p)
The Seller or the Conduit Seller, as applicable,
is not in default under any agreement involving financial
obligations or on any outstanding obligation, in any such case
which would materially adversely impact the financial condition
or operations of the Seller or the Conduit Seller, as
applicable, or its obligations under the Operative
Documents.
(q)
[Reserved].
(r)
The sale, transfer, assignment and conveyance of
Home Equity Loans by the Seller or the Conduit Seller, as
applicable, pursuant to this Agreement is not subject to and
will not result in any tax, fee or governmental charge payable
by the Seller or the Conduit Seller, as applicable, the
Depositor or the Trustee to any federal, state or local
government (“Transfer Taxes”) other than Transfer
Taxes which have been or will be paid as due by the Seller or
the Conduit Seller, as applicable. The Seller or the
Conduit Seller, as applicable, shall pay any and all such
Transfer Taxes.
(s)
No certificate of an officer, statement
furnished in writing or report delivered pursuant to the terms
hereof by the Seller or the Conduit Seller, as applicable,
contains any untrue statement of a material fact or omits to
state any material fact necessary to make the certificate,
statement or report not misleading.
It is understood and agreed that the
representations and warranties set forth in this Section 3.03
shall survive delivery of the respective Home Equity Loans to
the Trustee.
Section 3.04.
Covenants of Sellers to Take Certain Actions
with Respect to the Home Equity Loans in Certain Situations.
(a)
Upon the discovery by the Depositor, the Seller,
the Conduit Seller, the Servicer, any Sub-Servicer, any Owner,
the Custodian or the Trustee (each, for purposes of this
paragraph, a party) that the representations and warranties set
forth in clause (b) below were untrue in any material respect,
without regard to any limitation set forth therein concerning
the knowledge of the Seller or the Servicer as to the facts
stated therein, as of the Startup Day (or in the case of a
Qualified Replacement Mortgage, as of the respective Replacement
Cut-Off Date), with the result that the interests of the Owners
in the related Home Equity Loan are, or may be, materially and
adversely affected, the party discovering such breach shall give
prompt written notice to the other parties. Upon the
earliest to occur of CHEC’s discovery, its receipt of
notice of breach from any one of the other parties or such time
as a situation resulting from an existing statement which is
untrue materially and adversely affects the interests of the
Owners, without regard to any limitation set forth therein
concerning the knowledge of CHEC as to the facts stated therein,
CHEC hereby covenants and warrants that it shall promptly cure
such breach in all material respects or that it shall on or
before the second Monthly Remittance Date next succeeding such
discovery, receipt of notice or such time (i) substitute in lieu
of each Home Equity Loan which has given rise to the requirement
for action by CHEC a Qualified Replacement Mortgage and deliver
the Substitution Amount to the Servicer for deposit in the
Principal and Interest Account or (ii) purchase such Home Equity
Loan from the Trust at a purchase price equal to the Loan
Purchase Price thereof, which purchase price shall be delivered
to the Servicer for deposit in the Principal and Interest
Account. It is understood and agreed that the obligation
of CHEC so to substitute or purchase any Home Equity Loan as to
which such a statement set forth below in this Section 3.04 is
untrue in any material respect and has not been remedied shall
constitute the sole remedy respecting a discovery of any such
statement which is untrue in any material respect available to
the Owners and the Trustee on behalf of the Owners.
Notwithstanding any provision of this Agreement to the
contrary, with respect to any Home Equity Loan which is not in
default or as to which no default is imminent, no repurchase or
substitution pursuant to Section 3.04 or 3.06 shall be made
unless CHEC obtains for the Trustee at its expense an Opinion of
Counsel experienced in federal income tax matters to the effect
that such a repurchase or substitution would not constitute a
Prohibited Transaction for the Trust or any REMIC created
hereunder or otherwise subject the Trust or any REMIC created
hereunder to tax and would not jeopardize the status of any
REMIC created hereunder as a REMIC (a “REMIC
Opinion”) addressed to the Trustee and acceptable to the
Trustee. CHEC shall also deliver an Officer’s
Certificate to the Trustee concurrently with the delivery of a
Qualified Replacement Mortgage pursuant to Sections 3.04 and
3.06(b) stating that such Home Equity Loan meets the
requirements of the definition of a Qualified Replacement
Mortgage and that all other conditions to the substitution
thereof have been satisfied. Any Home Equity Loan as to
which repurchase or substitution was delayed pursuant to this
Section shall be repurchased or substituted for (subject to
compliance with Section 3.04 or 3.06(b), as the case may be)
upon the earlier of (a) the occurrence of a default or imminent
default with respect to such Home Equity Loan and (b) receipt by
the Trustee of a REMIC Opinion.
(b)
The Seller, with respect to the Seller Home
Equity Loans, and the Servicer, in consideration of its
appointment hereunder, with respect to the Conduit Home Equity
Loans, and with respect to the Home Equity Loans taken as a
whole or by Group, hereby represent, warrant and covenant to the
Trustee, the Depositor, the Servicer and the Owners that as of
the Startup Day (or the Replacement Cut-Off Date, with respect
to a Qualified Replacement Mortgage):
(i)
The information with respect to each Home Equity
Loan set forth in the related Schedule of Home Equity Loans is
true and correct in all material respects as of the Cut-Off
Date;
(ii)
Each of the Seller and the Conduit Seller has
transferred good and marketable title (without any implication
of a ready market for the sale thereof) to the Home Equity Loans
(including the related Notes) and other Home Equity Loan Assets,
and upon receipt of each Home Equity Loan and other Home Equity
Loan Assets by the Trustee (including the related Note), the
Trust will have good and marketable title (without any
implication of a ready market for the sale thereof) to such Home
Equity Loan (including the related Note) and other Home Equity
Loan Assets, free and clear of any lien, charge, mortgage,
encumbrance or rights of others, except as permitted under
Section 3.04(b)(ix) and except for liens that will be
simultaneously released. All the original or certified
documentation set forth in Section 3.05 (including all material
documents related thereto) with respect to each Home Equity Loan
has been delivered to the Custodian on behalf of the Trustee on
the Startup Day or as otherwise provided in Section 3.05.
To the Seller’s or the Servicer’s best
knowledge, no such documentation contains any untrue statement
of a material fact or omits to state a material fact necessary
to make the statements contained therein not misleading;
(iii)
Each Home Equity Loan being transferred to the
Trust is a Qualified Mortgage and is a Mortgage;
(iv)
Each Property is a fee simple estate in a single
parcel of real property improved by a single family residential
dwelling (except 1,227 Properties that are condominiums,
townhouses, manufactured housing, two- to four-family
residential dwellings or PUDs), and no more than 2.46%, 0.00%
and 2.24%, respectively, of the aggregate Loan Balance of the
Home Equity Loans in Group I, Group II and Group III as of the
Cut-Off Date are secured by Properties that are Manufactured
Homes, each of which is considered to be real property under the
applicable local law;
(v)
As of the Cut-Off Date or Replacement Cut-Off
Date, as applicable, no Home Equity Loan has a Loan-to-Value
Ratio in excess of 100%;
(vi)
Each Home Equity Loan is being serviced by the
Servicer in accordance with the terms of this Agreement;
(vii)
[Reserved];
(viii)
Each Note with respect to the Home Equity Loans
will provide for a schedule of substantially level and equal
Monthly Payments (or periodic rate adjustments in the case of
the Home Equity Loans in Group II and Group III), which are
sufficient to amortize fully the principal balance of such Note
on or before its maturity date, except for 12 Home Equity Loans,
representing approximately 0.51% of the aggregate Loan Balance
of the Home Equity Loans in Group I as of the Cut-Off Date,
which may provide for a “balloon” payment due at the
end of the 15th year, and no Home Equity Loan is a graduated
payment loan;
(ix)
As of the Startup Day, each Mortgage is a valid
and enforceable first or second lien of record (or is in the
process of being recorded) on the Property subject in the case
of any Second Mortgage Loan only to a Senior Lien on such
Property and subject in all cases to the exceptions to title set
forth in the title insurance policy (or the binding commitment
therefor) or attorney’s opinion of title, with respect to
the related Home Equity Loan, which exceptions are generally
acceptable to banking institutions in connection with their
regular mortgage lending activities, and such other exceptions
to which similar properties are commonly subject and which do
not individually, or in the aggregate, materially and adversely
affect the benefits of the security intended to be provided by
such Mortgage;
(x)
Immediately prior to the transfer and assignment
of the Home Equity Loans by the Seller or the Conduit Seller, as
applicable, to the Depositor and by the Depositor to the Trustee
herein contemplated, the Seller, the Conduit Seller and the
Depositor, as the case may be, each held good and marketable
title (without any implication of a ready market for the sale
thereof) to, and was the sole owner of, each Home Equity Loan
(including the related Note) conveyed by the Seller (or the
Conduit Seller, as applicable) subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth
in clause (ix) or other liens which will be released
simultaneously with such transfer and assignment; and
immediately upon the transfer and assignment herein
contemplated, the Trustee will hold good and marketable title
(without any implication of a ready market for the sale thereof)
to, and be the sole owner of, each Home Equity Loan subject to
no liens, charges, mortgages, encumbrances or rights of others
except as set forth in paragraph (ix) or other liens which will
be released simultaneously with such transfer and
assignment;
(xi)
As of the Cut-Off Date, 0.22% of the Home Equity
Loans are between 30 and 59 days Delinquent and none of the Home
Equity Loans is more than 59 days Delinquent;
(xii)
To the best knowledge of the Seller or the
Servicer, as applicable, there is no delinquent tax or
assessment lien on any Property, and each Property is free of
substantial damage and is in good repair (ordinary wear and tear
excepted);
(xiii)
To the best knowledge of the Seller or the
Servicer, as applicable, there is no valid and enforceable right
of offset, claim, defense or counterclaim to any Note or
Mortgage, including the obligation of the related Mortgagor to
pay the unpaid principal of or interest on such Note, nor has
any such claim, defense, offset or counterclaim been
asserted;
(xiv)
To the best knowledge of the Seller or the
Servicer, as applicable, there is no mechanics’ lien or
claim for work, labor or material affecting any Property which
is or may be a lien prior to, or equal with, the lien of the
related Mortgage except those which are insured against by any
title insurance policy referred to in paragraph (xvi) below;
(xv)
To the best knowledge of the Seller, each Home
Equity Loan at the time it was made complied in all material
respects with applicable local, state and federal laws and
regulations, including, without limitation, all applicable
predatory and abusive lending laws, the federal Truth-in-Lending
Act (as amended by the Riegle Community Development and
Regulatory Improvement Act of 1994) and other consumer
protection, usury, equal credit opportunity, disclosure and
recording laws. None of the Home Equity Loans is subject
to the Home Ownership and Equity Protection Act of 1994.
None of the Home Equity Loans is a “high-cost”
loan as defined by the applicable predatory and abusive lending
laws. No Home Equity Loan is a High Cost Loan or Covered
Loan, as applicable (as such terms are defined in the then
current Standard & Poor’s LEVELS® Glossary which
is now Version 5.6B Revised, Appendix E) and no Home Equity Loan
originated on or after October 1, 2002 through March 6, 2003, if
any, is governed by the Georgia Fair Lending Act;
(xvi)
With respect to each Home Equity Loan either (a)
if a title insurance policy is not available in the applicable
state, an attorney’s opinion of title has been obtained
but no title policy has been obtained, (b) for certain of the
Home Equity Loans the original principal balance of which was
equal to or less than $40,000, a title report and indemnity has
been obtained, or (c) a lender’s title insurance policy
(or a binding commitment therefor), issued in standard American
Land Title Association form by a title insurance company
authorized to transact business in the state in which the
related Property is situated, in an amount at least equal to the
original balance of such Home Equity Loan together, in the case
of a Second Mortgage Loan, with the then-original principal
amount of the mortgage note relating to the Senior Lien,
insuring the mortgagee’s interest under the related Home
Equity Loan as the holder of a valid first or second mortgage
lien of record on the real Property described in the related
Mortgage, as the case may be, subject only to exceptions of the
character referred to in paragraph (ix) above, was effective on
the date of the origination of such Home Equity Loan, and, as of
the Startup Day, such policy (or commitment) is valid and
thereafter (or upon issuance pursuant to the commitment) such
policy shall continue in full force and effect;
(xvii)
The improvements upon each Property are covered
by a valid and existing hazard insurance policy with a carrier
generally acceptable to the Servicer that provides for fire and
extended coverage representing coverage not less than the least
of (A) the outstanding principal balance of the related Home
Equity Loan (together, in the case of a Second Mortgage Loan,
with the outstanding principal balance of the Senior Lien), (B)
the minimum amount required to compensate for damage or loss on
a replacement cost basis or (C) the full insurable value of the
Property;
(xviii)
If any Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form
meeting the requirements of the current guidelines of the Flood
Insurance Administration is in effect with respect to such
Property with a carrier generally acceptable to the Servicer in
an amount representing coverage not less than the least of (A)
the outstanding principal balance of the related Home Equity
Loan (together, in the case of a Second Mortgage Loan, with the
outstanding principal balance of the Senior Lien), (B) the
minimum amount required to compensate for damage or loss on a
replacement cost basis or (C) the maximum amount of insurance
that is available under the Flood Disaster Protection Act of
1973;
(xix)
Each Mortgage and Note are the legal, valid and
binding obligation of the maker thereof and are enforceable in
accordance with their terms, except only as such enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of
equity (whether considered in a proceeding or action in equity
or at law), and all parties to each Home Equity Loan had full
legal capacity to execute all documents relating to such Home
Equity Loan and convey the estate therein purported to be
conveyed;
(xx)
The Seller or the Servicer, as applicable, has
caused and will cause to be performed any and all acts required
to be performed to preserve the rights and remedies of the
Trustee in any Insurance Policies applicable to any Home Equity
Loans delivered by the Seller or the Conduit Seller including,
without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments
of co-insured, joint loss payee and mortgagee rights in favor of
the Trustee;
(xxi)
As of the Cut-Off Date, no more than 0.51% of
the aggregate Loan Balance of the Home Equity Loans is secured
by Properties located within any single zip code area;
(xxii)
Each original Mortgage was recorded or is in the
process of being recorded, and all subsequent assignments of the
original Mortgage (other than unrecorded warehouse assignments
which are being simultaneously released in connection with the
Closing) have been delivered for recordation or have been
recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against
creditors of or purchasers from the Seller or the Conduit Seller
(or, subject to Section 3.05 hereof, are in the process of being
recorded); each Mortgage and assignment of Mortgage is in
recordable form and is acceptable for recording under the laws
of the jurisdiction in which the Property securing such Mortgage
is located;
(xxiii)
The terms of each Note and each Mortgage have
not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if
necessary, to protect the interest of the Owners and which has
been delivered to the Trustee. The substance of any such
waiver, alteration or modification is reflected on the related
Schedule of Home Equity Loans;
(xxiv)
The proceeds of each Home Equity Loan have been
fully disbursed, and there is no obligation on the part of the
mortgagee to make future advances thereunder. Any and all
requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and
expenses incurred in making or closing or recording such Home
Equity Loans were paid and the Mortgagor is not entitled to any
refund of any amounts paid or due under the related Note or
Mortgage;
(xxv)
The related Note is not and has not been secured
by any collateral, pledged account or other security except the
lien of the corresponding Mortgage;
(xxvi)
No Home Equity Loan has a shared appreciation
feature or other contingent interest feature;
(xxvii)
Each Property is located in the state identified
in the respective Schedule of Home Equity Loans and consists of
one or more parcels of real property with a residential dwelling
erected thereon;
(xxviii)
Each Mortgage contains a provision for the
acceleration of the payment of the unpaid principal balance of
the related Home Equity Loan in the event the related Property
is sold without the prior consent of the mortgagee
thereunder;
(xxix)
Any advances made after the date of origination
of a Home Equity Loan but prior to the Cut-Off Date have been
consolidated with the outstanding principal amount secured by
the related Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment
term reflected on the respective Schedule of Home Equity Loans.
The consolidated principal amount does not exceed the
original principal amount of the related Home Equity Loan.
No Note permits or obligates the Servicer to make future
advances to the related Mortgagor at the option of the
Mortgagor;
(xxx)
To the best knowledge of the Seller or the
Servicer, as applicable, there is no proceeding pending or
threatened for the total or partial condemnation of any
Property, nor is such a proceeding currently occurring, and
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