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GS MORTGAGE SECURITIES CORP.,
Depositor,
wilshire credit corporation,
Servicer,
nc capital corporation,
Responsible Party,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
Co-Trustee
---------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
---------------------------------------------
GSAMP TRUST 2005-S1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-S1
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
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Section 1.01
Definitions.............................................................................4
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage
Loans...........................................................40
Section 2.02 Acceptance by the Trustee of the Mortgage
Loans........................................44
Section 2.03 Representations, Warranties and Covenants of the
Responsible Party and the Servicer....44
Section 2.04
[RESERVED].............................................................................47
Section 2.05 Execution and Delivery of
Certificates.................................................47
Section 2.06 REMIC
Matters..........................................................................47
Section 2.07 Representations and Warranties of the
Depositor........................................47
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage
Loans.....................................................49
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers..........................51
Section 3.03 Successor
Subservicers.................................................................52
Section 3.04 Liability of the
Servicer..............................................................52
Section 3.05 No Contractual Relationship between Subservicers
and the Trustee.......................52
Section 3.06 Assumption or Termination of Subservicing
Agreements by Trustee........................53
Section 3.07 Collection of Certain Mortgage Loan
Payments...........................................53
Section 3.08 Subservicing
Accounts..................................................................54
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts....................55
Section 3.10 Collection
Account.....................................................................56
Section 3.11 Withdrawals from the Collection
Account................................................57
Section 3.12 Investment of Funds in the Collection Account and
the Distribution Account.............59
Section 3.13 Maintenance of Hazard Insurance, Errors and
Omissions and Fidelity Coverage............60
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption
Agreements..............................61
Section 3.15 Realization upon Defaulted Mortgage
Loans..............................................62
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Section 3.16 Release of Mortgage
Files..............................................................66
Section 3.17 Title, Conservation and Disposition of REO
Property....................................67
Section 3.18
[RESERVED].............................................................................69
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans...........69
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee..69
Section 3.21 Servicing
Compensation.................................................................70
Section 3.22 Annual Statement as to
Compliance......................................................70
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.......71
Section 3.24 Trustee to Act as
Servicer.............................................................71
Section 3.25 Compensating
Interest..................................................................72
Section 3.26 Credit Reporting; Gramm-Leach-Bliley
Act...............................................72
Section 3.27 Excess Reserve Fund Account; Distribution
Account......................................72
Section 3.28 Optional Purchase of Delinquent Mortgage
Loans.........................................74
Section 3.29 Maintenance of Mortgage Pool Insurance
Policy..........................................74
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
Section 4.01
Advances...............................................................................75
Section 4.02 Priorities of
Distribution.............................................................76
Section 4.03 Monthly Statements to
Certificateholders...............................................79
Section 4.04 Certain Matters Relating to the Determination of
LIBOR.................................83
Section 4.05 Allocation of Applied Realized Loss
Amounts............................................83
Section 4.06 Distributions on the REMIC I Regular
Interests.........................................84
ARTICLE V
THE CERTIFICATES
Section 5.01 The
Certificates.......................................................................85
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of
Certificates...........................................................................86
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates......................................91
Section 5.04 Persons Deemed
Owners..................................................................92
Section 5.05 Access to List of Certificateholders' Names and
Addresses..............................92
Section 5.06 Maintenance of Office or
Agency........................................................92
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer...............................93
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Section 6.02 Merger or Consolidation of the Depositor or the
Servicer...............................93
Section 6.03 Limitation on Liability of the Depositor, the
Servicer and Others......................93
Section 6.04 Limitation on Resignation of the
Servicer..............................................94
Section 6.05 Additional Indemnification by the Servicer; Third
Party Claims.........................94
ARTICLE VII
DEFAULT
Section 7.01 Events of
Default......................................................................95
Section 7.02 Trustee to Act; Appointment of
Successor...............................................97
Section 7.03 Notification to
Certificateholders.....................................................99
ARTICLE VIII
CONCERNING THE TRUSTEE AND CO-TRUSTEE
Section 8.01 Duties of the
Trustee..................................................................99
Section 8.02 Certain Matters Affecting the
Trustee.................................................100
Section 8.03 Trustee Not Liable for Certificates or Mortgage
Loans.................................101
Section 8.04 Trustee May Own
Certificates..........................................................101
Section 8.05 Trustee's Fees and
Expenses...........................................................101
Section 8.06 Eligibility Requirements for the
Trustee..............................................102
Section 8.07 Resignation and Removal of the
Trustee................................................103
Section 8.08 Successor
Trustee.....................................................................103
Section 8.09 Merger or Consolidation of the
Trustee................................................104
Section 8.10 Appointment of Co-Trustee or Separate
Trustee.........................................104
Section 8.11 Tax
Matters...........................................................................105
Section 8.12 Periodic
Filings......................................................................108
Section 8.13 Tax Classification of the Excess Reserve Fund
Account.................................110
Section 8.14 Duties of the
Co-Trustee..............................................................110
Section 8.15 Co-Trustee's Fees and
Expenses........................................................112
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans........................113
Section 9.02 Final Distribution on the
Certificates................................................114
Section 9.03 Additional Termination
Requirements...................................................115
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment.............................................................................116
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Section 10.02 Recordation of Agreement;
Counterparts................................................118
Section 10.03 Governing
Law.........................................................................118
Section 10.04 Intention of
Parties..................................................................118
Section 10.05
Notices...............................................................................119
Section 10.06 Severability of
Provisions............................................................120
Section 10.07 Assignment; Sales; Advance
Facilities.................................................120
Section 10.08 Limitation on Rights of
Certificateholders............................................122
Section 10.09 Inspection and Audit
Rights...........................................................123
Section 10.10 Certificates Nonassessable and Fully
Paid.............................................123
Section 10.11 Third Party
Beneficiary...............................................................123
Section 10.12 Waiver of Jury
Trial..................................................................123
Section 10.13 Limitation of
Damages.................................................................124
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SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Schedule Representations and Warranties of Wilshire
Credit, as
Servicer
Schedule III Representations and Warranties of the Responsible
Party as to
the Individual Mortgage Loans
Schedule IV Representations and Warranties of the Responsible
Party
EXHIBITS
Exhibit A-1 Form of Class A, Class M and Class B
Certificates
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D-1 Form of Class X Certificate
Exhibit D-2 Form of Class X-1 Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of
Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I-1 Form of Rule 144A Letter
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Exhibit I-2 Form of Investment Letter (Non Rule 144A)
Exhibit J Form of Request for Release
Exhibit K Contents of Each Mortgage File
Exhibit L Charged Off Loan Data Report
Exhibit M Form of Certification to be provided with Form
10-K
Exhibit N Form of Trustee Certification to be provided to
Depositor
Exhibit O Form of Servicer Certification to be provided to
Depositor
Exhibit P Mortgage Pool Insurance Policy
Exhibit Q Form of Power of Attorney
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THIS POOLING AND SERVICING AGREEMENT, dated as of March 1,
2005, is among GS MORTGAGE SECURITIES CORP., a Delaware
corporation (the
"Depositor"), WILSHIRE CREDIT CORPORATION, a Nevada corporation
("Wilshire
Credit" or the "Servicer"), NC CAPITAL CORPORATION, a California
corporation
(the "Responsible Party"), DEUTSCHE BANK NATIONAL TRUST COMPANY,
a national
banking association, as trustee (the "Trustee") and WACHOVIA
BANK, NATIONAL
ASSOCIATION, a national banking association, as co-trustee (the
"Co-Trustee").
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates to
be
issued hereunder in multiple classes, which in the aggregate
will evidence the
entire beneficial ownership interest of the Trust Fund created
hereunder. The
Trust Fund will consist of a segregated pool of assets comprised
of the Mortgage
Loans and certain other related assets subject to this
Agreement.
REMIC I
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and
certain other
related assets subject to this Agreement (other than the
Prepayment Premiums and
the Excess Reserve Fund Account) as a REMIC for federal income
tax purposes, and
such segregated pool of assets will be designated as "REMIC I".
The Class R-1
Certificates will be the sole class of "residual interests" in
REMIC I for
purposes of the REMIC Provisions (as defined herein). The
following table
irrevocably sets forth the designation, the REMIC I Remittance
Rate, the initial
Uncertificated Balance and, for purposes of satisfying Treasury
regulation
Section 1.860G-1(a)(4)(iii), the "latest possible maturity date"
for each of the
REMIC I Regular Interests (as defined herein). None of the REMIC
I Regular
Interests will be certificated.
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REMIC I
REMITTANCE INITIAL LATEST POSSIBLE
DESIGNATION RATE UNCERTIFICATED BALANCE MATURITY DATE (1)
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I-LTAA Variable(2) $251,188,854.31 December 25, 2034
I-LTA Variable(2) $1,873,660.00 December 25, 2034
I-LTM1 Variable(2) $215,300.00 December 25, 2034
I-LTM2 Variable(2) $199,930.00 December 25, 2034
I-LTB1 Variable(2) $169,170.00 December 25, 2034
I-LTB2 Variable(2) $47,420.00 December 25, 2034
I-LTB3 Variable(2) $55,100.00 December 25, 2034
I-LTZZ Variable(2) $2,565,723.15 December 25, 2034
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(1) For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date immediately following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each REMIC
I
Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I
Remittance
Rate" herein.
REMIC II
As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of
assets will be
designated as "REMIC II." The Class R-2 Certificates will
evidence the sole
class of "residual interests" in REMIC II for purposes of the
REMIC Provisions.
The following table irrevocably sets forth the designation, the
Pass-Through
Rate, the initial aggregate Certificate Balance and, for
purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest
possible maturity
date" for the indicated Classes of Certificates. The Trust Fund
will also issue
the Class X-1 Certificates and the Class P Certificates, which
will not be
issued by any REMIC created hereunder.
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INITIAL AGGREGATE LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE CERTIFICATE BALANCE MATURITY DATE
(1)
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Class A Variable(2) $187,366,000.00 December 25, 2034
Class M-1 Variable(2) $21,530,000.00 December 25, 2034
Class M-2 Variable(2) $19,993,000.00 December 25, 2034
Class B-1 Variable(2) $16,917,000.00 December 25, 2034
Class B-2 Variable(2) $4,742,000.00 December 25, 2034
Class B-3 Variable(2) $5,510,000.00 December 25, 2034
Class X N/A(3) $257,157.46(3) December 25, 2034
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(1) For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date immediately following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each Class
of
Certificates.
(2) Calculated in accordance with the definition of
"Pass-Through Rate"
herein.
(3) The Class X Certificates will accrue interest at their
variable
Pass-Through Rate on the Notional Amount of the Class X
Certificates
outstanding from time to time which shall equal the
Uncertificated
Balance of the REMIC I Regular Interests. The Class X
Certificates will
not accrue interest on their Certificate Balance.
As of the Cut-off Date, the Mortgage Loans had an aggregate
Stated Principal Balance equal to approximately
$256,315,157.
The minimum denomination for each Class of Offered
Certificates will be $25,000 initial Certificate Balance with
integral multiples
of $1 in excess thereof. The minimum denomination for (a) the
Class R-1
Certificates and Class R-2 Certificates will be a 100%
Percentage Interest in
each such Class and (b) the Class P and Class X Certificates
will be a 1%
Percentage Interest in each such Class. The Class X-1
Certificates will be
issued as a single Certificate and will not have a Class
Certificate Balance.
It is expected that each Class of Certificates will receive
its final distribution of principal and interest on or prior to
the Final
Scheduled Distribution Date.
Set forth below are designations of Classes of Certificates
to
the categories used herein:
Book-Entry Certificates.....................All Classes of
Certificates other
than the Physical Certificates.
Class A Certificates .......................Class A
Certificates.
Class R Certificates .......................Class R-1
Certificates and Class R-2
Certificates.
Delay Certificates .........................The Fixed Rate
Certificates.
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ERISA-Restricted ...........................Certificates Class
R-1, Class R-2,
Class P, Class X and Class X-1
Certificates; any Certificate with a
rating below the lowest applicable
permitted rating under the
Underwriters' Exemption.
Fixed Rate Certificates ....................Class M-2, Class
B-1, Class B-2 and
Class B-3 Certificates.
LIBOR Certificates .........................The Class A
Certificates and Class
M-1 Certificates.
Non-Delay Certificates .....................LIBOR Certificates
and Class X
Certificates
Offered Certificates .......................All Classes of
Certificates other
than the Private Certificates.
Physical Certificates ......................Class P, Class X,
Class X-1, Class
R-1 and Class R-2 Certificates.
Private Certificates .......................Class P, Class X,
Class X-1, Class
R-1 and Class R-2 Certificates.
Rating Agencies ............................Fitch and
Moody's.
Regular ....................................Certificates All
Classes of
Certificates other than the Class P,
Class X-1, Class R-1 and Class R-2
Certificates.
Residual Certificates ......................Class R-1
Certificates and Class R-2
Certificates.
Subordinated Certificates ..................Class M-1, Class
M-2, Class B-1,
Class B-2 and Class B-3
Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. Whenever used in this Agreement,
the
following words and phrases, unless the context otherwise
requires, shall have
the following meanings:
Accepted Servicing Practices: (a) With respect to any
Mortgage
Loan, those mortgage servicing practices set forth in Section
3.01 of this
Agreement.
Account: Any of the Collection Account, the Distribution
Account, any Escrow Account or the Excess Reserve Fund Account.
Each Account
shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With
respect
to any Distribution Date for each Class of Offered Certificates,
the amount of
interest accrued during the related Interest Accrual Period at
the applicable
Pass-Through Rate on the related Class Certificate Balance
immediately prior to
such Distribution Date, as reduced by such Class's
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share of Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls
for the related Due Period allocated to such Class pursuant to
Section 4.02.
Adjusted Net Mortgage Interest Rate: As to each Mortgage
Loan
and at any time, the per annum rate equal to the Mortgage
Interest Rate less the
Expense Fee Rate.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described
in Section 10.07.
Advance Reimbursement Amounts: As defined in Section 10.07.
Advancing Person: The Person to whom the Servicer's rights
under this Agreement to be reimbursed for any P&I Advances
or Servicing Advances
have been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such
first Person. For
the purposes of this definition, "control" means the power to
direct the
management and policies of such Person, directly or indirectly,
whether through
the ownership of voting securities, by contract or otherwise;
and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
Amount Held for Future Distribution: As to the Certificates
on
any Distribution Date, the aggregate amount held in each
Collection Account at
the close of business on the related Remittance Date on account
of (i) Principal
Prepayments, Insurance Proceeds (including any proceeds under
the Mortgage Pool
Insurance Policy), Condemnation Proceeds, Net Recoveries and
Liquidation
Proceeds on the Mortgage Loans received after the end of the
related Prepayment
Period and (ii) all Scheduled Payments on the Mortgage Loans due
after the end
of the related Due Period.
Applied Realized Loss Amount: With respect to any
Distribution
Date, the amount, if any, by which the aggregate Class
Certificate Balance of
the Offered Certificates after distributions of principal on
such Distribution
Date exceeds the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the
value,
determined pursuant to the Underwriting Guidelines, of the
related Mortgaged
Property as of the origination of such Second Lien Mortgage
Loan; PROVIDED,
HOWEVER, that in the case of a refinanced Mortgage Loan, such
value is based
solely upon the appraisal made at the time of origination of
such refinanced
Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage,
notice
of transfer or equivalent instrument in recordable form (other
than the
assignee's name and recording
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information not yet returned from the recording office),
reflecting the sale of
the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and
the
Mortgage Loans to the extent received by the Trustee (x) the sum
of (i) all
scheduled installments of interest (net of the related Expense
Fees) and
principal due on the Due Date on such Mortgage Loans in the
related Due Period
and received on or prior to the related Determination Date,
together with any
P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance
Proceeds (including any proceeds under the Mortgage Pool
Insurance Policy) and
Liquidation Proceeds received during the related Prepayment
Period (in each
case, net of unreimbursed expenses incurred in connection with a
liquidation or
foreclosure and unreimbursed Advances, if any) and any Net
Recoveries received
during the related Prepayment Period; (iii) all partial or full
prepayments on
the Mortgage Loans received during the related Prepayment Period
together with
all Compensating Interest paid by the Servicer in connection
therewith
(excluding Prepayment Premiums and Prepayment Interest Excess);
(iv) all amounts
received with respect to such Distribution Date as the
Substitution Adjustment
Amount or Repurchase Price in respect of a Deleted Mortgage Loan
or a Mortgage
Loan repurchased by the Responsible Party as of such
Distribution Date; and (v)
the proceeds received with respect to the termination of the
Trust Fund pursuant
to clause (a) of Section 9.01, reduced by (y) all amounts in
reimbursement for
P&I Advances and Servicing Advances previously made with
respect to the Mortgage
Loans, and other amounts as to which the Servicer, the Depositor
or the Trustee
(or co-trustee) are entitled to be paid or reimbursed pursuant
to this
Agreement.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Principal
Remittance Amount
for such Distribution Date over (ii) the Excess
Overcollateralized Amount, if
any, for such Distribution Date.
Basis Risk Carry Forward Amount: With respect to the LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on
such
Distribution Date the Pass-Through Rate for any Class of LIBOR
Certificates is
based upon the WAC Cap, the excess of (i) the amount of interest
such Class of
Offered Certificates would otherwise be entitled to receive on
such Distribution
Date had the Pass-Through Rate not been subject to the WAC Cap,
over (ii) the
amount of interest payable on such Class of Certificates at the
WAC Cap, and (B)
the Basis Risk Carry Forward Amount for such Class of Offered
Certificates for
all previous Distribution Dates not previously paid, together
with interest
thereon at a rate equal to the applicable Pass-Through Rate for
such Class of
LIBOR Certificates for such Distribution Date (without giving
effect to the WAC
Cap).
Basis Risk Payment: For any Distribution Date, an amount
equal
to the lesser of (i) the aggregate Basis Risk Carry Forward
Amounts for such
Distribution Date and (ii) the Class X Distributable Amount
(prior to any
reduction for Basis Risk Payments).
Best's: Best's Key Rating Guide, as the same shall be
amended
from time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
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Business Day: Any day other than (i) Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions,
in (a) the States
of New York, Oregon and California, (b) the State in which the
Servicer's
servicing operations are located, or (c) the State in which the
Trustee's
operations are located, are authorized or obligated by law or
executive order to
be closed.
Certificate: Any one of the Certificates executed by the
Trustee in substantially the forms attached hereto as
exhibits.
Certificate Balance: With respect to any Class of
Certificates, other than the Class P, Class R-1 or Class R-2
Certificates, at
any date, the maximum dollar amount of principal to which the
Holder thereof is
then entitled hereunder, such amount being equal to the
Denomination thereof
minus all distributions of principal previously made with
respect thereto and in
the case of any Subordinated Certificates, and reduced by the
amount of any
Applied Realized Loss Amounts previously allocated to such Class
of Subordinated
Certificates; provided, however, that immediately following the
Distribution
Date on which a Subsequent Recovery is distributed, the Class
Certificate
Balances of any Class or Classes of Certificates that have been
previously
reduced by Applied Realized Loss Amounts will be increased, in
order of
seniority, by the amount of the Subsequent Recovery distributed
on such
Distribution Date (up to the amount of Applied Realized Loss
Amounts allocated
to such Class or Classes). The Class P, Class R-1 and Class R-2
Certificates
have no Certificate Balance. With respect to each Class X
Certificate as of any
date of determination, an amount equal to the Percentage
Interest evidenced by
such Certificate times the excess, if any, of (A) the then
aggregate
Uncertificated Balances of the REMIC I Regular Interests over
(B) the then
aggregate Class Certificate Balance of the Class A Certificates,
Class M
Certificates and Class B Certificates then outstanding. The
aggregate initial
Class Certificate Balance of each Class of Regular Certificates
is set forth in
the Preliminary Statement hereto.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry
Certificate.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the Certificate Register, except
that, solely for
the purpose of giving any consent pursuant to this Agreement,
any Certificate
registered in the name of the Depositor or any affiliate of the
Depositor shall
be deemed not to be Outstanding and the Percentage Interest
evidenced thereby
shall not be taken into account in determining whether the
requisite amount of
Percentage Interests necessary to effect such consent has been
obtained;
provided, however, that if any such Person (including the
Depositor) owns 100%
of the Percentage Interests evidenced by a Class of
Certificates, such
Certificates shall be deemed to be Outstanding for purposes of
any provision
hereof that requires the consent of the Holders of Certificates
of a particular
Class as a condition to the taking of any action hereunder. The
Trustee is
entitled to rely conclusively on a certification of the
Depositor or any
affiliate of the Depositor in determining which Certificates are
registered in
the name of an affiliate of the Depositor.
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Certification: As defined in Section 8.12(b).
Charged Off Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan for which coverage under the related
Mortgage Pool
Insurance Policy is not available that has not yet been
liquidated, giving rise
to a Realized Loss, on the date on which the related Servicer
determines,
pursuant to the procedures set forth in Section 3.15, that there
will be (i) no
Significant Net Recoveries with respect to such Mortgage Loan or
(ii) the
potential Net Recoveries are anticipated to be an amount,
determined by the
Servicer in its good faith judgment and in light of other
mitigating
circumstances, that is insufficient to warrant proceeding
through foreclosure or
other liquidation of the related Mortgaged Property.
Class: All Certificates bearing the same class designation
as
set forth in the Preliminary Statement.
Class A Certificates: As specified in the Preliminary
Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Class Certificate
Balance of the Class
A Certificates immediately prior to such Distribution Date over
(ii) the lesser
of (A) 35.20% of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date and (B) the excess, if any, of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution
Date over the
Overcollateralization Floor.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class
Certificate
Balance of the Class A Certificates (after taking into account
the distribution
of the Class A Principal Distribution Amount on such
Distribution Date), (B) the
Class Certificate Balance of the Class M-1 Certificates (after
taking
8
<PAGE>
into account the distribution of the Class M-1 Principal
Distribution Amount on
such Distribution Date), (C) the Class Certificate Balance of
the Class M-2
Certificates (after taking into account the distribution of the
Class M-2
Principal Distribution Amount on such Distribution Date) and (D)
the Class
Certificate Balance of the Class B-1 Certificates immediately
prior to such
Distribution Date, over (ii) the lesser of (A) the product of
(x) 80.80% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans for
such
Distribution Date, and (B) the excess, if any, of the aggregate
Stated Principal
Balance of the Mortgage Loans for such Distribution Date over
the
Overcollateralization Floor.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class
Certificate
Balances of the Class A Certificates (after taking into account
the distribution
of the Class A Principal Distribution Amount on such
Distribution Date), (B) the
Class Certificate Balance of the Class M-1 Certificates (after
taking into
account the distribution of the Class M-1 Principal Distribution
Amount on such
Distribution Date), (C) the Class Certificate Balance of the
Class M-2
Certificates (after taking into account the distribution of the
Class M-2
Principal Distribution Amount on such Distribution Date), (D)
the Class
Certificate Balance of the Class B-1 Certificates (after taking
into account the
distribution of the Class B-1 Principal Distribution Amount on
such Distribution
Date), and (E) the Class Certificate Balance of the Class B-2
Certificates
immediately prior to such Distribution Date, over (ii) the
lesser of (A) the
product of (x) 84.50% and (y) the aggregate Stated Principal
Balance of the
Mortgage Loans for such Distribution Date, and (B) the excess,
if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution
Date over the Overcollateralization Floor.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3."
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class
Certificate
Balance of the Class A Certificates (after taking into account
the distribution
of the Class A Principal Distribution Amount on such
Distribution Date), (B) the
Class Certificate Balance of the Class M-1 Certificates (after
taking into
account the distribution of the Class M-1 Principal Distribution
Amount on such
Distribution Date), (C) the Class Certificate Balance of the
Class M-2
Certificates (after taking into account the distribution of the
Class M-2
Principal Distribution Amount on such Distribution Date), (D)
the Class
Certificate Balance of the Class B-1 Certificates (after taking
into account the
distribution of the Class B-1 Principal Distribution Amount on
such Distribution
Date), (E) the Class Certificate Balance of the Class B-2
Certificates (after
taking into account the distribution of the Class B-2 Principal
Distribution
Amount on such Distribution Date), and (F) the Class Certificate
Balance of the
Class B-3 Certificates immediately prior to such Distribution
Date, over (ii)
the lesser of (A) the product of (x) 88.80% and (y) the
aggregate Stated
Principal Balances of the Mortgage Loans for such Distribution
Date, and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over the Overcollateralization
Floor.
Class Certificate Balance: With respect to any Class and as
to
any date of determination, the aggregate of the Certificate
Balances of all
Certificates of such Class as of such date.
Class M Certificates: The Class M-1 Certificates and Class
M-2
Certificates.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class
Certificate
Balance of the Class A Certificates (after taking into account
the distribution
of the Class A Principal Distribution Amount on such
Distribution Date), and (B)
the Class Certificate Balance of the Class M-1 Certificates
immediately prior to
such Distribution Date over (ii) the lesser of (A) the product
of (x) 52.00% and
(y) the aggregate Stated Principal Balance of the Mortgage Loans
for such
Distribution Date,
9
<PAGE>
and (B) the excess, if any, of the Stated Principal Balance of
the Mortgage
Loans for such Distribution Date over the Overcollateralization
Floor.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class
Certificate
Balance of the Class A Certificates (after taking into account
the distribution
of the Class A Principal Distribution Amount on such
Distribution Date), (B) the
Class Certificate Balance of the Class M-1 Certificates (after
taking into
account the distribution of the Class M-1 Principal Distribution
Amount on such
Distribution Date) and (C) the Class Certificate Balance of the
Class M-2
Certificates immediately prior to such Distribution Date over
(ii) the lesser of
(A) the product of (x) 67.60% and (y) the aggregate Stated
Principal Balance of
the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the
Stated Principal Balance of the Mortgage Loans for such
Distribution Date over
the Overcollateralization Floor.
Class P Certificates: All Certificates bearing the class
designation of "Class P."
Class R Certificates: The Class R-1 Certificates and Class
R-2
Certificates.
Class R-1 Certificates: All Certificates bearing the
designation of "Class R-1" and representing the Residual
Interest in REMIC I.
Class R-2 Certificates: All Certificates bearing the
designation of "Class R-2" and representing the Residual
Interest in REMIC II.
Class X Certificates: All Certificates bearing the class
designation of "Class X."
Class X Distributable Amount: On any Distribution Date, (i)
as
a distribution in respect of interest, the amount of interest
that has accrued
on the Class X Interest and not applied as an Extra Principal
Distribution
Amount on such Distribution Date, plus any such accrued interest
remaining
undistributed from prior Distribution Dates, plus, without
duplication, (ii) as
a distribution in respect of principal, any portion of the
principal balance of
the Class X Interest which is distributable as an
Overcollateralization
Reduction Amount, minus (iii) any amounts paid as a Basis Risk
Payment.
Closing Date: April 7, 2005.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Collection Accounts: As defined in Section 3.10(a).
Combined Loan-to-Value Ratio or CLTV: As of the date of
origination and as to any Mortgage Loan, the ratio, expressed as
a percentage,
of (a) the sum of (i) the outstanding principal balance of the
Mortgage Loan as
of the date of origination and (ii) the outstanding
10
<PAGE>
principal balance as of the date of origination of any mortgage
loan or mortgage
loans that are senior or equal in priority to the Mortgage Loan
and which are
secured by the same Mortgaged Property to (b) the Appraised
Value.
Compensating Interest: For any Distribution Date, the lesser
of (a) the Prepayment Interest Shortfall, if any, for such
Distribution Date,
with respect to Principal Prepayments occurring during the
related Prepayment
Period and in the calendar month preceding such Distribution
Date, and (b)
one-half of the Servicing Fee payable to the Servicer for such
Distribution
Date.
Condemnation Proceeds: All awards or settlements in respect
of
a Mortgaged Property, whether permanent or temporary, partial or
entire, by
exercise of the power of eminent domain or condemnation, to the
extent not
required to be released to a Mortgagor in accordance with the
terms of the
related Mortgage Loan Documents.
Corporate Trust Office: The designated office of the Trustee
in the State of California at which at any particular time its
corporate trust
business with respect to this Agreement is administered, which
office at the
date of the execution of this Agreement is located at 1761 East
St. Andrew Place
Santa Ana, California 92705-4934, Attn: Trust
Administration-GS05X1, facsimile
no. (714) 247-6478 and which is the address to which notices to
and
correspondence with the Trustee should be directed.
Corresponding Certificate: With respect to each REMIC I
Regular Interest, as follows:
REMIC I Regular Interest Class
--------------------------------------------------
---------------
REMIC I Regular Interest I-LTA A
REMIC I Regular Interest I-LTM1 M-1
REMIC I Regular Interest I-LTM2 M-2
REMIC I Regular Interest I-LTB1 B-1
REMIC I Regular Interest I-LTB2 B-2
REMIC I Regular Interest I-LTB3 B-3
Co-Trustee: Wachovia Bank, National Association, and its
successor in interest, or any successor Co-Trustee appointed as
provided in this
Pooling and Servicing Agreement.
Cumulative Loss Event: With respect to any Distribution
Date,
a Cumulative Loss Event occurs if the Cumulative Loss Percentage
exceeds the
applicable percentage set forth below with respect to such
Distribution Date:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN LOSS PERCENTAGE
------------------------------ ---------------
<S> <C>
April 2008 through March 2009 8.000% of the Cut off Date Pool
Principal Balance
April 2009 through March 2010 12.000% of the Cut off Date Pool
Principal Balance
April 2010 through March 2011 15.000% of the Cut off Date Pool
Principal Balance
April 2011 and thereafter 16.500% of the Cut off Date Pool
Principal Balance
</TABLE>
11
<PAGE>
Cumulative Loss Percentage: As of any date of determination,
the percentage equivalent of a fraction, the numerator of which
is the aggregate
amount of Realized Losses on the Mortgage Loans for the period
from the Cut-off
Date to the date of determination and the denominator of which
is the Stated
Principal Balance of the Mortgage Loans as of the Cut-off
Date.
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (a) - (h) as listed
on Exhibit K
hereto.
Custodial File: With respect to each Mortgage Loan, any
Mortgage Loan Document which is delivered to the Trustee or
which at any time
comes into the possession of the Trustee.
Cut-off Date: March 1, 2005.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal Balance of all Mortgage Loans as of the Cut-off
Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on
the Cut-off Date
(after giving effect to payments of principal due on that date,
whether or not
received).
Data Tape Information: The information provided by the
Responsible Party as of the Cut-off Date to the Depositor
setting forth the
following information with respect to each Mortgage Loan: (1)
the Responsible
Party's Mortgage Loan identifying number; (2) the Mortgagor's
name; (3) the
street address of the Mortgaged Property including the city,
state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied, a second
home or investment property; (5) the number and type of
residential units
constituting the Mortgaged Property (i.e., a single family
residence, a 2-4
family residence, a unit in a condominium project or a unit in a
planned unit
development, manufactured housing); (6) the original months to
maturity or the
remaining months to maturity from the Cut-off Date, in any case
based on the
original amortization schedule and, if different, the maturity
expressed in the
same manner but based on the actual amortization schedule; (7)
the Combined
Loan-to-Value Ratio at origination; (8) the Mortgage Interest
Rate as of the
Cut-off Date; (9) the date on which the Scheduled Payment was
due on the
Mortgage Loan and, if such date is not consistent with the Due
Date currently in
effect, such Due Date; (10) the stated maturity date; (11) the
amount of the
Scheduled Payment as of the Cut-off Date; (12) the last payment
date on which a
Scheduled Payment was actually applied to pay interest and the
outstanding
principal balance; (13) the original principal amount of the
Mortgage Loan; (14)
the principal balance of the Mortgage Loan as of the close of
business on the
Cut-off Date, after deduction of payments of principal due and
collected on or
before the Cut-off Date; (15) the type of Mortgage Loan (i.e.,
fixed rate,
second lien); (16) a code indicating the purpose of the loan
(i.e., purchase,
rate and term refinance, equity take-out refinance); (17) a code
indicating the
documentation style (i.e., full documentation, limited
documentation or stated
income); (18) the loan credit classification (as described in
the Underwriting
Guidelines); (19) whether such Mortgage Loan provides for a
Prepayment Premium;
(20) the Prepayment Premium period of such Mortgage Loan, if
12
<PAGE>
applicable; (21) a description of the Prepayment Premium, if
applicable; (22)
the Mortgage Interest Rate as of origination; (23) the credit
risk score (FICO
score) at origination; (24) the date of origination; (25) a code
indicating
whether the Mortgage Loan has been modified; (26) the current
Combined
Loan-to-Value Ratio; (27) the Due Date for the first Scheduled
Payment; (28) the
original Scheduled Payment due; (29) with respect to the related
Mortgagor, the
debt-to-income ratio; (30) the Appraised Value of the Mortgaged
Property; (31)
the sales price of the Mortgaged Property if the Mortgage Loan
was originated in
connection with the purchase of the Mortgaged Property; (32) a
code indicating
whether a Mortgage Loan is or has been 30 days delinquent and
(33) the
outstanding principal balance of the related First Lien Mortgage
Loan. With
respect to the Mortgage Loans in the aggregate: (1) the number
of Mortgage
Loans; (2) the current aggregate outstanding principal balance
of the Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans;
and (4) the weighted average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding
under the United
States Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan which
became final and non appealable, except for such a reduction
resulting from a
Deficient Valuation or any reduction that results in a permanent
forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of
competent jurisdiction
in an amount less than the then outstanding principal balance of
the Mortgage
Loan, which valuation results from a proceeding initiated under
the United
States Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical Certificate and any Certificate issued in lieu of a
Book-Entry
Certificate pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary
Statement.
Deleted Mortgage Loan: As defined in Section 2.03(d).
Denomination: With respect to each Certificate, the amount
set
forth on the face thereof as the "Initial Certificate Balance of
this
Certificate" or the Percentage Interest appearing on the face
thereof.
Depositor: GS Mortgage Securities Corp., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE & Co., as the
registered Holder of
the Book-Entry Certificates. The Depository shall at all times
be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform
Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company, including the Trustee, that (a) is incorporated under
the laws of the
United States of America or any State thereof, (b) is subject to
supervision and
examination by federal or state banking authorities and
13
<PAGE>
(c) has outstanding unsecured commercial paper or other
short-term unsecured
debt obligations that are rated P-1 by Moody's, F1+ by Fitch and
A-1 by Standard
& Poor's, to the extent they are Rating Agencies
hereunder.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time
a Depository
effects book-entry transfers and pledges of securities deposited
with the
Depository.
Determination Date: With respect to any Distribution Date,
the
18th day of the calendar month in which such Distribution Date
occurs or, if
such day is not a Business Day, the immediately preceding
Business Day.
Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.27(b) in the
name of the
Trustee for the benefit of the Certificateholders and designated
"Deutsche Bank
National Trust Company in trust for registered holders of GSAMP
Trust 2005-S1
Mortgage Pass-Through Certificates, Series 2005-S1." Funds in
the Distribution
Account shall be held in trust for the Certificateholders for
the uses and
purposes set forth in this Agreement and may be invested in
Permitted
Investments.
Distribution Date: The 25th day of each calendar month after
the initial issuance of the Certificates or, if such day is not
a Business Day,
the next succeeding Business Day, commencing in April 2005.
Document Certification and Exception Report: The report
attached to Exhibit F hereto.
Due Date: The day of the month on which the Scheduled
Payment
is due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the
period
commencing on the second day of the calendar month preceding the
month in which
the Distribution Date occurs and ending on the first day of the
calendar month
in which the Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a
federal or state chartered depository institution or trust
company the
short-term unsecured debt obligations of which (or, in the case
of a depository
institution or trust company that is a subsidiary of a holding
company, the
short-term unsecured debt obligations of such holding company)
are rated "F-1"
by Fitch and "P-1" by Moody's (and a comparable rating if
another Rating Agency
is specified by the Depositor by written notice to the Servicer)
at the time any
amounts are held on deposit therein, (ii) a trust account or
accounts maintained
with a federal or state chartered depository institution or
trust company acting
in its fiduciary capacity or (iii) any other account acceptable
to each Rating
Agency. Eligible Accounts may bear interest, and may include, if
otherwise
qualified under this definition, accounts maintained with the
Trustee.
ERISA: The Employee Retirement Income Security Act of 1974,
as
amended.
14
<PAGE>
ERISA-Qualifying Underwriting: A best efforts or firm
commitment underwriting or private placement that meets the
requirements of
Prohibited Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg.
54487 (2002) (or
any successor thereto), or any substantially similar
administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the
Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b) of this
Agreement.
Event of Default: As defined in Section 7.01.
Excess Overcollateralized Amount: With respect to any
Distribution Date, the excess, if any, of (a) the
Overcollateralized Amount on
such Distribution Date over (b) the Specified Overcollateralized
Amount for such
Distribution Date.
Excess Reserve Fund Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Sections
3.27(a) in the name
of the Trustee for the benefit of the Regular Certificateholders
and designated
"Deutsche Bank National Trust Company in trust for registered
holders of GSAMP
Trust 2005-S1, Mortgage Pass-Through Certificates, Series
2005-S1." Funds in the
Excess Reserve Fund Account shall be held in trust for the
Regular
Certificateholders for the uses and purposes set forth in this
Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not
be invested.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate
equal to the sum of the Servicing Fee Rate and the Trustee Fee
Rate.
Expense Fees: As to each Mortgage Loan, the sum of the
Servicing Fee and the Trustee Fee.
Extra Principal Distribution Amount: As of any Distribution
Date, the lesser of (x) the related Total Monthly Excess Spread
for such
Distribution Date and (y) the related Overcollateralization
Deficiency for such
Distribution Date; provided, however, that on the Distribution
Date in April
2005, the amount determined pursuant to this clause (y) shall be
limited to the
principal portion of Realized Losses for that Distribution
Date.
Fair Value: The fair market value of all of the property of
the Trust, as agreed upon between the Servicer and a majority of
the Class R-1
Certificateholders; provided, however, that if the Servicer and
a majority of
the Class R-1 Certificateholders do not agree upon the fair
market value of all
the property of the Trust, then the Depositor shall solicit
competitive bids to
prospective purchasers that are recognized broker dealers. The
Fair Market Value
shall be the highest bid received by the Trustee from the closed
bids solicited
by the Depositor or its
15
<PAGE>
designee, provided that the Depositor shall certify to the
Trustee that it
received bids from no fewer than three prospective
purchasers.
Fannie Mae: The Federal National Mortgage Association and
its
successors in interest.
Fannie Mae Guides: The Fannie Mae Seller's Guide and the
Fannie Mae Servicer's Guide and all amendments or additions
thereto.
FDIC: The Federal Deposit Insurance Corporation, and its
successors in interest.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan (other than a Charged Off Loan) or any REO
Property (other than a
Mortgage Loan or REO Property purchased by the Responsible Party
as contemplated
by this Agreement), a determination made by the Servicer that
all Insurance
Proceeds (including any proceeds under the Mortgage Pool
Insurance Policy),
Condemnation Proceeds, Liquidation Proceeds and other payments
or recoveries
which the Servicer, in its reasonable good faith judgment,
expects to be finally
recoverable in respect thereof have been so recovered. The
Servicer shall
maintain records, prepared by a Servicing Officer, of each Final
Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of Certificates is the
Distribution Date
occurring in December 2034:
First Lien Mortgage Loan: With respect to each Mortgage
Loan,
any mortgage loan secured by a first lien Mortgage on the
related Mortgaged
Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch
is designated as a Rating Agency in the Preliminary Statement,
for purposes of
Section 10.05(b) the address for notices to Fitch shall be
Fitch, Inc., One
State Street Plaza, New York, New York 10004, Attention: MBS
Monitoring - GSAMP
Trust 2005-S1, or such other address as Fitch may hereafter
furnish to the
Depositor, the Servicer and the Trustee.
Forbearance: As defined in Section 3.07(a).
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and
existing under Title
III of the Emergency Home Finance Act of 1970, as amended, and
its successors in
interest.
Freddie Mac Guides: The Freddie Mac Seller's &
Servicer's
Guide and all amendments or additions thereto.
High Cost Mortgage Loan: A Mortgage Loan that is (a) covered
by the Home Ownership and Equity Protection Act of 1994, (b)
identified,
classified or characterized as "high cost," "threshold,"
"covered", or
"predatory" under any other applicable state, federal or local
law (or a
similarly identified, classified or characterized loan using
different
terminology under a law imposing heightened regulatory scrutiny
or additional
legal liability for residential mortgage
16
<PAGE>
loans having high interest rates, points and/or fees) or (c)
categorized as
"High Cost" or "Covered" pursuant to Appendix E of the Standard
& Poor's
Glossary.
Home Loan: A Mortgage Loan categorized as "Home Loan"
pursuant
to Appendix E of Standard & Poor's Glossary.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the
related
Mortgaged Property and any proceeds from the Mortgage Pool
Insurance Policy.
Interest Accrual Period: With respect to each Class of
Non-Delay Certificates and any Distribution Date, the period
commencing on the
preceding Distribution Date (or, for the initial Distribution
Date, the Closing
Date) and ending on the day preceding the current Distribution
Date, and with
respect to the Delay Certificates and the REMIC I Regular
Interests and any
Distribution Date, the calendar month preceding the month in
which such
Distribution Date occurs. For purposes of computing interest
accruals on each
Class of Non-Delay Certificates, each Interest Accrual Period
has the actual
number of days in such period and each year is assumed to have
360 days. For
purposes of computing interest accruals on each Class of Delay
Certificates,
each Interest Accrual Period has 30 days in such period and each
year is assumed
to have 360 days.
Interest Remittance Amount: With respect to any
Distribution,
that portion of Available Funds attributable to interest
relating to the
Mortgage Loans.
Investment Account: As defined in Section 3.12(a).
Late Collections: With respect to any Mortgage Loan and any
Due Period, all amounts received after the Remittance Date
immediately following
such Due Period, whether as late payments of Scheduled Payments
or as Insurance
Proceeds (including any proceeds under the Mortgage Pool
Insurance Policy),
Condemnation Proceeds, Liquidation Proceeds, Net Recoveries or
otherwise, which
represent late payments or collections of principal and/or
interest due (without
regard to any acceleration of payments under the related
Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously
recovered.
LIBOR: With respect to any Interest Accrual Period for the
LIBOR Certificates, the rate determined by the 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 shall 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
Trustee
17
<PAGE>
(after consultation with the Depositor), at approximately 11:00
a.m. (New York
City time) on such date for one-month U.S. dollar deposits of
leading European
banks.
LIBOR Certificates: As specified in the Preliminary
Statement.
LIBOR Determination Date: With respect to any Interest
Accrual
Period for the LIBOR Certificates, the second London Business
Day preceding the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property)
which was
liquidated in the calendar month preceding the month of such
Distribution Date
and as to which the Servicer has certified (in accordance with
this Agreement)
that it has made a Final Recovery Determination.
Liquidation Event: With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full;
(ii) a Final
Recovery Determination is made as to such Mortgage Loan; or
(iii) such Mortgage
Loan is removed from coverage under this Agreement by reason of
its being
purchased, sold, transferred or replaced pursuant to or as
contemplated by this
Agreement. With respect to any REO Property, either of the
following events: (i)
a Final Recovery Determination is made as to such REO Property;
or (ii) such REO
Property is removed from coverage under this Agreement by reason
of its being
purchased pursuant to this Agreement.
Liquidation Proceeds: The amounts, including Insurance
Proceeds (including any proceeds under the Mortgage Pool
Insurance Policy),
Condemnation Proceeds or those received following the
acquisition of REO
Property, received in connection with the liquidation of a
defaulted Mortgage
Loan, whether through a trustee's sale, foreclosure sale or
otherwise, including
any Subsequent Recoveries.
London Business Day: Any day on which dealings in deposits
of
United States dollars are transacted in the London interbank
market.
Majority Class X Certificateholder: The Holder or Holders of
a
majority of the Percentage Interests in the Class X
Certificates.
Marker Rate: With respect to the Class X Certificates and
any
Distribution Date, a per annum rate equal to two (2) times the
weighted average
of the REMIC I Remittance Rate for each of REMIC I Regular
Interest I-LTA, REMIC
I Regular I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular
Interest I-LTB3 and
REMIC I Regular Interest I-LTZZ, with the rate on each such
REMIC I Regular
Interest (other than REMIC I Regular Interest I-LTZZ) subject to
a cap equal to
the related Pass-Through Rate for the Corresponding Certificate
for the purpose
of this calculation for such Distribution Date and with the rate
on REMIC I
Regular Interest I-LTZZ subject to a cap of zero for the purpose
of this
calculation; provided however, each such cap for REMIC I Regular
Interest I-LTA
and REMIC I Regular Interest I-LTM1 shall be multiplied by a
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fraction the numerator of which is the actual number of days in
the related
Interest Accrual Period and the denominator of which is 30.
Maximum I-LTZZ Uncertificated Interest Deferral Amount: With
respect to any Distribution Date, the excess of (i) accrued
interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest
I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated
Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization
Amount, in each
case for such Distribution Date, over (ii) Uncertificated
Interest on REMIC I
Regular Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC I
Regular
Interest I-LTM2, REMIC I Regular Interest I-LTB1, REMIC I
Regular Interest
I-LTB2 and REMIC I Regular Interest I-LTB3 with the rate on each
such REMIC I
Regular Interest subject to a cap equal to the related
Pass-Through Rate for the
corresponding Certificate for the purpose of this calculation
for such
Distribution Date; provided however, each such cap for REMIC I
Regular Interest
I-LTA and REMIC I Regular Interest I-LTM1 shall be multiplied by
a fraction the
numerator of which is the actual number of days in the related
Interest Accrual
Period and the denominator of which is 30.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.03.
Moody's: Moody's Investors Service, Inc. If Moody's is
designated as a Rating Agency in the Preliminary Statement, for
purposes of
Section 10.05(b) the address for notices to Moody's shall be
Moody's Investors
Service, Inc., 99 Church Street, New York, New York 10007,
Attention:
Residential Mortgage Pass-Through Group, or such other address
as Moody's may
hereafter furnish to the Depositor, the Servicer and the
Trustee.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage
Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan contained in either the Servicing File or Custodial
File.
Mortgage Interest Rate: The annual rate of interest borne on
a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage Loan originally sold
and subject to
this Agreement being identified on the Mortgage Loan Schedule,
which Mortgage
Loan includes, without limitation, the Mortgage File, the
Custodial File, the
Servicing File, the Scheduled Payments, Principal Prepayments,
Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds (including
any proceeds
under the Mortgage Pool Insurance Policy), Net Recoveries, REO
Disposition
proceeds, Prepayment Premiums and all other rights, benefits,
proceeds and
obligations arising from or in connection with such Mortgage
Loan, excluding
replaced or repurchased Mortgage Loans.
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<PAGE>
Mortgage Loan Documents: The mortgage loan documents
pertaining to each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Schedule I, such schedule setting forth the following
information with
respect to each Mortgage Loan as of the Cut-off Date: (1) the
Responsible
Party's Mortgage Loan identifying number; (2) the Mortgagor's
name; (3) the
street address of the Mortgaged Property including the city,
state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied, a second
home or investment property; (5) the number and type of
residential units
constituting the Mortgaged Property (i.e., a single family
residence, a 2-4
family residence, a unit in a condominium project or a unit in a
planned unit
development, manufactured housing); (6) the original months to
maturity or the
remaining months to maturity from the Cut-off Date, in any case
based on the
original amortization schedule and, if different, the maturity
expressed in the
same manner but based on the actual amortization schedule; (7)
the Combined
Loan-to-Value Ratio, at origination; (8) the Mortgage Interest
Rate as of the
Cut-off Date; (9) the date on which the Scheduled Payment was
due on the
Mortgage Loan and, if such date is not consistent with the Due
Date currently in
effect, such Due Date; (10) the stated maturity date; (11) the
amount of the
Scheduled Payment as of the Cut-off Date; (12) the last payment
date on which a
Scheduled Payment was actually applied to pay interest and the
outstanding
principal balance; (13) the original principal amount of the
Mortgage Loan; (14)
the principal balance of the Mortgage Loan as of the close of
business on the
Cut-off Date, after deduction of payments of principal due and
collected on or
before the Cut-off Date; (15) the type of Mortgage Loan (i.e.,
fixed rate,
second lien); (16) a code indicating the purpose of the loan
(i.e., purchase,
rate and term refinance, equity take-out refinance); (17) a code
indicating the
documentation style (i.e., full, limited or stated income); (18)
the loan credit
classification (as described in the Underwriting Guidelines);
(19) whether such
Mortgage Loan provides for a Prepayment Premium; (20) the
Prepayment Premium
period of such Mortgage Loan, if applicable; (21) a description
of the
Prepayment Premium, if applicable; (22) the Mortgage Interest
Rate as of
origination; (23) the credit risk score (FICO score) at
origination; (24) the
date of origination; (25) a code indicating whether the Mortgage
Loan has been
modified; (26) the Due Date for the first Scheduled Payment;
(27) the original
Scheduled Payment due; (28) with respect to the related
Mortgagor, the
debt-to-income ratio; (29) the Appraised Value of the Mortgaged
Property; (30)
the sales price of the Mortgaged Property if the Mortgage Loan
was originated in
connection with the purchase of the Mortgaged Property; (31) a
code indicating
whether such Mortgage Loan is a Home Loan; (32) a code
indicating whether a
Mortgage Loan is or has been 30 days delinquent and (33) the
outstanding
principal balance of the related First Lien Mortgage Loan. With
respect to the
Mortgage Loans in the aggregate: (1) the number of Mortgage
Loans; (2) the
current aggregate outstanding principal balance of the Mortgage
Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans;
and (4) the
weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the
indebtedness
of a Mortgagor under a Mortgage Loan, including all riders
thereto.
Mortgage Pool Insurance Policy: The mortgage pool insurance
policy number R0140017 provided by the Mortgage Pool Insurer
having an initial
amount of coverage equal to
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<PAGE>
$8,971,030.51, and including any and all related endorsements, a
copy of which
is attached hereto as Exhibit P.
Mortgage Pool Insurance Trigger: With respect to any date of
determination, the satisfaction of the Deductible (as defined in
the Mortgage
Pool Insurance Policy), subject to the Maximum Aggregate
Liability (as defined
in the Mortgage Pool Insurance Policy).
Mortgage Pool Insurer: Radian Insurance Inc., or any
successor
thereto.
Mortgage Pool Insurer Fee: The one-time up-front amount
payable to the Mortgage Pool Insurer on or prior to the Closing
Date by the
Co-Trustee in order to obtain coverage provided under the
Mortgage Pool
Insurance Policy.
Mortgaged Property: The real property (or leasehold estate,
if
applicable) identified on the Mortgage Loan Schedule as securing
repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the
amount remaining for distribution pursuant to subsection
4.02(a)(iii) (before
giving effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution
Date,
the amount by which the sum of the Prepayment Interest
Shortfalls exceeds the
sum of the Compensating Interest payments made with respect to
such Distribution
Date.
Net Recovery: Any proceeds received by the Servicer on a
delinquent or Charged Off Loan (including any Liquidation
Proceeds received on a
Charged Off Loan), net of any Servicing Fee, ancillary income
and any other
related expenses.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise
backed by some or all of the Class X and Class P Certificates
that are rated by
one or more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
90+ Day Delinquent Mortgage Loan: Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of
the last day of
the prior Due Period, three months or more past due (without
giving effect to
any grace period), each Mortgage Loan in foreclosure, all REO
Property and each
Mortgage Loan for which the Mortgagor has filed for
bankruptcy.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Nonrecoverable P&I Advance: Any P&I Advance previously
made or
proposed to be made in respect of a Mortgage Loan or REO
Property that, in the
good faith business
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<PAGE>
judgment of the Servicer, will not or, in the case of a proposed
P&I Advance,
would not be ultimately recoverable from related late payments,
Insurance
Proceeds (including any proceeds under the Mortgage Pool
Insurance Policy),
Condemnation Proceeds or Liquidation Proceeds on such Mortgage
Loan or REO
Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously made or proposed to be made in respect of a Mortgage
Loan or REO
Property, which, in the good faith business judgment of the
Servicer, will not
or, in the case of a proposed Servicing Advance, would not, be
ultimately
recoverable from related Insurance Proceeds (including any
proceeds under the
Mortgage Pool Insurance Policy), Condemnation Proceeds,
Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided
pursuant to Section 9.02 to the effect that final distribution
on any of the
Certificates shall be made only upon presentation and surrender
thereof.
Notional Amount: With respect to the Class X Certificates
and
any Distribution Date, the Uncertificated Balance of the REMIC I
Regular
Interests for such Distribution Date. As of the Closing Date,
the Notional
Amount of the Class X Certificates is equal to
$256,315,157.46.
Notional Balance: With respect to the Class X Certificates
for
purposes solely of the face thereof, the aggregate Stated
Principal Balance of
the Mortgage Loans.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by an officer of
the Servicer with responsibility for the servicing of the
Mortgage Loans
required to be serviced by the Servicer and listed on a list
delivered to the
Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or a Subservicer, reasonably
acceptable to the
Trustee; provided, that any Opinion of Counsel relating to (a)
qualification of
either Trust REMIC as a REMIC or (b) compliance with the REMIC
Provisions, must
(unless otherwise stated in such Opinion of Counsel) be an
opinion of counsel
who (i) is in fact independent of the Servicer of the Mortgage
Loans, (ii) does
not have any material direct or indirect financial interest in
the Servicer of
the Mortgage Loans or in an affiliate of either and (iii) is not
connected with
the Servicer of the Mortgage Loans as an officer, employee,
director or person
performing similar functions.
Optional Termination Date: The date on which the Terminating
Entity, pursuant to Section 9.01, shall cause the Optional
Termination Date to
occur on any Distribution Date on which the aggregate Stated
Principal Balance
of the Mortgage Loans, as of the last day of the related Due
Period, is equal to
10% or less of the Cut off Date Pool Principal Balance.
OTS: Office of Thrift Supervision, and any successor
thereto.
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<PAGE>
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(i) Certificates theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by the
Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage
Loan
with a Stated Principal Balance greater than zero which was not
the subject of a
Principal Prepayment in Full prior to such Due Date and which
did not become a
Liquidated Mortgage Loan or Charged Off Loan prior to such Due
Date.
Overcollateralized Amount: As of any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of
the Mortgage
Loans for such Distribution Date over (b) the aggregate of the
Class Certificate
Balances of the Offered Certificates as of such Distribution
Date (after giving
effect to the payment of the Principal Remittance Amount on such
Certificates on
such Distribution Date).
Overcollateralization Deficiency: With respect to any
Distribution Date, the excess, if any, of (a) the Specified
Overcollateralized
Amount applicable to such Distribution Date over (b) the
Overcollateralized
Amount applicable to such Distribution Date.
Overcollateralization Floor: With respect to any
Distribution
Date, 0.50% of the aggregate Stated Principal Balance of the
Mortgage Loans as
of the Cut-off Date. Notwithstanding the foregoing, on and after
any
Distribution Date following the reduction of the aggregate Class
Certificate
Balance of the Class A Certificates, Class M Certificates and
Class B
Certificates to zero, the Overcollateralization Floor shall be
zero.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the
Excess
Overcollateralized Amount and (b) the Net Monthly Excess
Cashflow.
Ownership Interest: As to any Residual Certificate, any
ownership interest in such Certificate including any interest in
such
Certificate as the Holder thereof and any other interest
therein, whether direct
or indirect, legal or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property,
any
advance made by the Servicer in respect of any Remittance Date
representing the
aggregate of all payments of principal and interest, net of the
Servicing Fee,
that were due during the related Due Period on the Mortgage
Loans and that were
delinquent on the related Remittance Date, plus certain amounts
representing
assumed payments not covered by any current net income on the
Mortgaged
Properties acquired by foreclosure or deed in lieu of
foreclosure as determined
pursuant to Section 4.01.
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<PAGE>
Par Value: The sum of (i) 100% of the unpaid principal
balance
of each Mortgage Loan (other than in respect of REO Property)
plus accrued and
unpaid interest thereon at the applicable Mortgage Interest
Rate, and (ii) the
lesser of (x) the appraised value of any REO Property as
determined by the
higher of two appraisals completed by two independent appraisers
selected by the
Majority Class X Certificateholder, at the expense of the
Majority Class X
Certificateholder, plus accrued and unpaid interest on the
related Mortgage Loan
at the applicable Mortgage Interest Rates and (y) the unpaid
principal balance
of each Mortgage Loan related to any REO Property, in each case
plus accrued and
unpaid interest thereon at the applicable Mortgage Interest
Rate.
Pass-Through Margin: With respect to each Class of LIBOR
Certificates, the following percentages: Class A, 0.170%; and
Class M-1, 0.470%.
On the first Distribution Date after the Optional Termination
Date, the
Pass-Through Margins shall increase to: Class A, 0.340%; and
Class M-1, 0.705%.
Pass-Through Rate: With respect to the Class A Certificates
and the Class M-1 Certificates, a rate per annum equal to the
lesser of (i)
LIBOR plus the related Pass-Through Margin and (ii) the WAC
Cap.
With respect to the Class M-2 Certificates, Class B-1
Certificates, Class B-2 Certificates and Class B-3 Certificates,
a rate per
annum equal to (a) on or prior to the first possible Optional
Termination Date,
5.887%, 6.208%, 6.548% and 6.750%, respectively or (b) after the
first possible
Optional Termination Date, 6.387%, 6.708%, 7.048% and 7.250%,
respectively.
With respect to the Class X Certificates and any
Distribution
Date, a rate per annum equal to the percentage equivalent of a
fraction, the
numerator of which is the sum of the amounts calculated pursuant
to clauses (a)
through (h) below, and the denominator of which is the aggregate
Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular
Interest I-LTA,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I
Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2, REMIC
I Regular
Interest I-LTB3 and REMIC I Regular Interest I-LTZZ. For
purposes of calculating
the Pass-Through Rate for the Class X Certificates, the
numerator is equal to
the sum of the following components:
(a) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTAA minus the Marker Rate, applied to an amount
equal to
the Uncertificated Balance of REMIC I Regular Interest
I-LTAA;
(b) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTA minus the Marker Rate, applied to an amount equal
to the
Uncertificated Balance of REMIC I Regular Interest I-LTA;
(c) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTM1 minus the Marker Rate, applied to an amount
equal to
the Uncertificated Balance of REMIC I Regular Interest
I-LTM1;
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<PAGE>
(d) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTM2 minus the Marker Rate, applied to an amount
equal to
the Uncertificated Balance of REMIC I Regular Interest
I-LTM2;
(e) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTB1 minus the Marker Rate, applied to an amount
equal to
the Uncertificated Balance of REMIC I Regular Interest
I-LTB1;
(f) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTM3 minus the Marker Rate, applied to an amount
equal to
the Uncertificated Balance of REMIC I Regular Interest
I-LTM3;
(g) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTB2 minus the Marker Rate, applied to an amount
equal to
the Uncertificated Balance of REMIC I Regular Interest I-LTB2;
and
(h) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTZZ minus the Marker Rate, applied to an amount
equal to
the Uncertificated Balance of REMIC I Regular Interest
I-LTZZ.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made
on the related
Class, such percentage interest being set forth on the face
thereof or equal to
the percentage obtained by dividing the Denomination of such
Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Permitted Investments: Any one or more of the following
obligations or securities acquired at a purchase price of not
greater than par,
regardless of whether issued by the Servicer, the Trustee or any
of their
respective Affiliates:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by,
the United States
or any agency or instrumentality thereof, provided such
obligations are backed
by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit
of, or bankers' acceptances (which shall each have an original
maturity of not
more than 90 days and, in the case of bankers' acceptances,
shall in no event
have an original maturity of more than 365 days or a remaining
maturity of more
than 30 days) denominated in United States dollars and issued by
any Depository
Institution and rated P-1 by Moody's, F-1 by Fitch and A-1+ by
S&P (in each
case, to the extent they are designated as Rating Agencies in
the Preliminary
Statement);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting
as principal);
(iv) securities bearing interest or sold at a discount
that are issued by any corporation incorporated under the laws
of the United
States of America or any state thereof and that are rated by
each Rating Agency
that rates such securities in its highest long-term
unsecured
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<PAGE>
rating categories at the time of such investment or contractual
commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a
specified date not more than 30 days after the date of
acquisition thereof) that
is rated by each Rating Agency that rates such securities in its
highest
short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including money market
funds advised by the Depositor or the Trustee or an Affiliate
thereof, that have
been rated "Aaa" by Moody's, "AAAm" or "AAAm-G" by Standard
& Poor's and at
least "AA" by Fitch (in each case, to the extent they are
designated as Rating
Agencies in the Preliminary Statement); and
(vii) if previously confirmed in writing to the Trustee,
any other demand, money market or time deposit, or any other
obligation,
security or investment, as may be acceptable to the Rating
Agencies as a
permitted investment of funds backing "Aaa" or "AAA" rated
securities;
provided, however, that no instrument described hereunder shall
evidence either
the right to receive (a) only interest with respect to the
obligations
underlying such instrument or (b) both principal and interest
payments derived
from obligations underlying such instrument and the interest and
principal
payments with respect to such instrument provide a yield to
maturity at par
greater than 120% of the yield to maturity at par of the
underlying obligations.
For investments in the Distribution Account (except during the
Trustee Float
Period), only the obligations or securities (or instruments
which invest in the
obligations or securities) specified in clause (i) above shall
constitute
Permitted Investments.
Permitted Transferee: Any Person other than (i) the United
States, any State or political subdivision thereof, or any
agency or
instrumentality of any of the foregoing, (ii) a foreign
government,
international organization or any agency or instrumentality of
either of the
foregoing, (iii) an organization (except certain farmers'
cooperatives described
in Section 521 of the Code) which is exempt from tax imposed by
Chapter 1 of the
Code (including the tax imposed by Section 511 of the Code on
unrelated business
taxable income) on any excess inclusions (as defined in Section
860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural
electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the
Code, (v) a
Person that is not a U.S. Person or a U.S. Person with respect
to whom income
from a Residual Certificate is attributable to a foreign
permanent establishment
or fixed base (within the meaning of an applicable income tax
treaty) of such
Person or any other U.S. Person, (vi) an "electing large
partnership" within the
meaning of Section 775 of the Code and (vii) any other Person so
designated by
the Depositor based upon an Opinion of Counsel that the Transfer
of an Ownership
Interest in a Residual Certificate to such Person may cause
either Trust REMIC
to fail to qualify as a REMIC at any time that the Certificates
are outstanding.
The terms "United States," "State" and "international
organization" shall have
the meanings set forth in Section 7701 of the Code or successor
provisions. A
corporation will not be treated as an instrumentality of the
United States or of
any State or political subdivision thereof for these
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<PAGE>
purposes if all of its activities are subject to tax and, with
the exception of
the Freddie Mac, a majority of its board of directors is not
selected by such
government unit.
Person: Any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock
company, trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any Distribution Date,
the aggregate of the Stated Principal Balances of the Mortgage
Loans for such
Distribution Date that were Outstanding Mortgage Loans on the
Due Date in the
related Due Period.
Prepayment Interest Excess: With respect to any Remittance
Date, the sum of, for each Mortgage Loan that was, during the
portion of the
Prepayment Period occurring in the same month as such Remittance
Date, the
subject of a Principal Prepayment that was applied by the
Servicer to reduce the
outstanding principal balance of such Mortgage Loan, an amount
equal to the
product of (a) the Mortgage Interest Rate net of the Servicing
Fee Rate for such
Mortgage Loan, (b) the amount of the Principal Prepayment for
such Mortgage
Loan, (c) 1/360 and (d) the number of days commencing on the
first day of the
calendar month in which such Remittance Date occurs and ending
on the date on
which such Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any
Remittance
Date, the sum of, for each Mortgage Loan that was, during the
portion of the
related Prepayment Period occurring in the calendar month
preceding such
Remittance Date, the subject of a Principal Prepayment, an
amount equal to the
product of (a) the Mortgage Interest Rate net of the Servicing
Fee Rate for such
Mortgage Loan, (b) the amount of the Principal Prepayment for
such Mortgage
Loan, (c) 1/360 and (d) the number of days commencing on the
date on which such
Principal Prepayment was applied and ending on the last day of
the last day of
the related Prepayment Period.
Prepayment Period: With respect to any Distribution Date,
the
period beginning on the 15th day of the month preceding the
month in which such
Distribution Date occurs and ending on the 14th day of the month
in which such
Distribution Date occurs.
Prepayment Premium: Any prepayment premium or charge
collected
by the applicable Servicer with respect to a Mortgage Loan from
a Mortgagor in
connection with any voluntary Principal Prepayment pursuant to
the terms of the
related Mortgage Note.
Principal Distribution Amount: For any Distribution Date,
the
sum of (i) the Basic Principal Distribution Amount for such
Distribution Date
and (ii) on or after the Distribuiton Date in May 2005, the
Extra Principal
Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon
liquidation of a
Mortgage Loan) which is received in advance of its scheduled Due
Date, excluding
any Prepayment Premium and which is not
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<PAGE>
accompanied by an amount of interest representing scheduled
interest due on any
date or dates in any month or months subsequent to the month of
prepayment.
Principal Prepayment in Full: Any Principal Prepayment made
by
a Mortgagor of the entire principal balance of a Mortgage
Loan.
Principal Remittance Amount: With respect to any
Distribution
Date, the amount equal to the sum of the following amounts
(without duplication)
with respect to the related Due Period: (i) each scheduled
payment of principal
on a Mortgage Loan due during such Due Period and received by
the Servicer on or
prior to the related Determination Date or advanced by the
Servicer for the
related Remittance Date (ii) all Principal Prepayments received
during the
related Prepayment Period, (iii) all Liquidation Proceeds,
Condemnation
Proceeds, Net Recoveries and Insurance Proceeds (including any
proceeds under
the Mortgage Pool Insurance Policy) on the Mortgage Loans
allocable to principal
actually collected by the Servicer during the related Prepayment
Period, (iv)
the portion of the Repurchase Price allocable to principal with
respect to each
Deleted Mortgage Loan, the repurchase obligation for which arose
during the
related Prepayment Period, that was repurchased during the
period from the prior
Distribution Date through the Remittance Date for the current
Distribution Date,
(v) the portion of all Substitution Adjustment Amounts allocable
to principal
with respect to the substitutions of Mortgage Loans that occur
during the
calendar month in which such Distribution Date occurs, and (vi)
the allocable
portion of the proceeds received with respect to the termination
of the Trust
Fund pursuant to clause (a) of Section 9.01 (to the extent such
proceeds relate
to principal).
Privacy Laws: Title V of the Gramm-Leach-Bliley Act of 1999,
as amended, and all applicable regulations promulgated
thereunder.
Private Certificates: As specified in the Preliminary
Statement.
Prospectus Supplement: The Prospectus Supplement, dated
April
4, 2005, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreement: The Flow Mortgage Loan Purchase and
Warranties Agreement, dated as of August 25, 2004, between the
Purchaser and the
Responsible Party.
Purchaser: Goldman Sachs Mortgage Company, a New York
limited
partnership, and its successors in interest, as purchaser of the
Mortgage Loans
under the Purchase Agreement.
Radian Guidelines: The current 2nd lien servicing guidelines
of the Mortgage Pool Insurer and the Service Level Agreement
dated April 29,
2004 between the Mortgage Pool Insurer and the Servicer,
referred to in the
Mortgage Pool Insurance Policy.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no
longer in
existence, "Rating Agency" shall
28
<PAGE>
be such nationally recognized statistical rating organization,
or other
comparable Person, as is designated by the Depositor, notice of
which
designation shall be given to the Trustee. References herein to
a given rating
or rating category of a Rating Agency shall mean such rating
category without
giving effect to any modifiers. For purposes of Section
10.05(b), the addresses
for notices to each Rating Agency shall be the address specified
therefor in the
definition corresponding to the name of such Rating Agency, or
such other
address as either such Rating Agency may hereafter furnish to
the Depositor and
the Servicer.
Realized Losses: With respect to any date of determination
and
any Liquidated Mortgage Loan, the amount, if any, by which (a)
the unpaid
principal balance of such Liquidated Mortgage Loan together with
accrued and
unpaid interest thereon exceeds (b) the Liquidation Proceeds
(including any
proceeds under the Mortgage Pool Insurance Policy) with respect
thereto net of
the expenses incurred by the Servicer in connection with the
liquidation of such
Liquidated Mortgage Loan and net of the amount of unreimbursed
Servicing
Advances with respect to such Liquidated Mortgage Loan. Any
Charged Off Loan
will give rise to a Realized Loss (calculated as if clause (b)
of the previous
sentence is equal to zero) at the time it is charged off, as
described in
Section 3.15(c) hereof.
Record Date: With respect to any Distribution Date, the
close
of business on the last day of the related Interest Accrual
Period; provided,
however, that for any Certificate issued in definitive form, the
Record Date
shall be the close of business on the last Business Day of the
month preceding
the month in which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary
Statement.
Released Loan: Any Charged Off Loan that is released by
Wilshire Credit to the Class X-1 Certificateholder pursuant to
Section 3.15(d),
generally on the date that is six months after the date on which
Wilshire Credit
begins using Wilshire Special Servicing on such Charged Off
Loans. Any Released
Loan will no longer be an asset of any REMIC or the Trust
Fund.
Relief Act Interest Shortfall: With respect to any
Distribution Date and any Mortgage Loan, any reduction in the
amount of interest
or principal collectible on such Mortgage Loan for the most
recently ended Due
Period as a result of the application of the Servicemembers
Civil Relief Act, or
any similar state statutes.
REMIC: A "real estate mortgage investment conduit" within
the
meaning of Section 860D of the Code.
REMIC I: As specified in the Preliminary Statement.
REMIC I Interest Loss Allocation Amount: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the
aggregate
Stated Principal Balance of the Mortgage Loans and REO
Properties then
outstanding and (ii) the REMIC I Remittance Rate for REMIC I
Regular Interest
I-LTAA minus the Marker Rate, divided by (b) 12.
29
<PAGE>
REMIC I Overcollateralization Amount: With respect to any
date
of determination, (i) 1.00% of the aggregate Uncertificated
Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the
Uncertificated
Balances of REMIC I Regular Interest I-LTA, REMIC I Regular
Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTB1, REMIC I
Regular Interest I-LTB2 and REMIC I Regular Interest I-LTB3, in
each case as of
such date of determination.
REMIC I Principal Loss Allocation Amount: With respect to
any
Distribution Date, an amount equal to (a) the product of (i)
1.00% of the
aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the
aggregate of the Uncertificated Balances of REMIC I Regular
Interest I-LTA,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I
Regular Interest I-LTB1, REMIC I Regular Interest I-LTB2 and
REMIC I Regular
Interest I-LTB3 and the denominator of which is the aggregate of
the
Uncertificated Balances of REMIC I Regular Interest I-LTA, REMIC
I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest
I-LTB1, REMIC I Regular Interest I-LTB2, REMIC I Regular
Interest I-LTB3 and
REMIC I Regular Interest I-LTZZ.
REMIC I Regular Interest: Any of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue
interest at the related REMIC I Remittance Rate in effect from
time to time, and
shall be entitled to distributions of principal, subject to the
terms and
conditions hereof, in an aggregate amount equal to its initial
Uncertificated
Balance as set forth in the Preliminary Statement hereto. The
designations for
the respective REMIC I Regular Interests are set forth in the
Preliminary
Statement hereto.
REMIC I Regular Interest I-LTAA: One of the separate
non-certificated beneficial ownership interests in REMIC I
issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular
Interest I-LTAA
shall accrue interest at the related REMIC I Remittance Rate in
effect from time
to time, and shall be entitled to distributions of principal,
subject to the
terms and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest I-LTA: One of the separate
non-certificated beneficial ownership interests in REMIC I
issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular
Interest I-LTA
shall accrue interest at the related REMIC I Remittance Rate in
effect from time
to time, and shall be entitled to distributions of principal,
subject to the
terms and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest I-LTM1: One of the separate
non-certificated beneficial ownership interests in REMIC I
issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular
Interest I-LTM1
shall accrue interest at the related REMIC I Remittance Rate in
effect from time
to time, and shall be entitled to distributions of
principal,
30
<PAGE>
subject to the terms and conditions hereof, in an aggregate
amount equal to its
initial Uncertificated Balance as set forth in the Preliminary
Statement hereto.
REMIC I Regular Interest I-LTM2: One of the separate
non-certificated beneficial ownership interests in REMIC I
issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular
Interest I-LTM2
shall accrue interest at the related REMIC I Remittance Rate in
effect from time
to time, and shall be entitled to distributions of principal,
subject to the
terms and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest I-LTB1: One of the separate
non-certificated beneficial ownership interests in REMIC I
issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular
Interest I-LTB1
shall accrue interest at the related REMIC I Remittance Rate in
effect from time
to time, and shall be entitled to distributions of principal,
subject to the
terms and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest I-LTB2: One of the separate
non-certificated beneficial ownership interests in REMIC I
issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular
Interest I-LTB2
shall accrue interest at the related REMIC I Remittance Rate in
effect from time
to time, and shall be entitled to distributions of principal,
subject to the
terms and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest I-LTB3: One of the separate
non-certificated beneficial ownership interests in REMIC I
issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular
Interest I-LTB3
shall accrue interest at the related REMIC I Remittance Rate in
effect from time
to time, and shall be entitled to distributions of principal,
subject to the
terms and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Balance as set forth in the Preliminary Statement
hereto.
REMIC I Regular Interest I-LTZZ: One of the separate
non-certificated beneficial ownership interests in REMIC I
issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular
Interest I-LTZZ
shall accrue interest at the related REMIC I Remittance Rate in
effect from time
to time, and shall be entitled to distributions of principal,
subject to the
terms and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Balance as set forth in the Preliminary Statement
hereto.
REMIC I Remittance Rate: With respect to each REMIC I
Regular
Interest, a per annum rate equal to (i) the weighted average of
the Adjusted Net
Mortgage Interest Rates then in effect on the beginning of the
related Due
Period on the Mortgage Loans.
REMIC I Required Overcollateralization Amount: 1% of the
Overcollateralization Floor.
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<PAGE>
REMIC II: The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee,
for the benefit
of the REMIC II Certificateholders pursuant to Section 2.07, and
all amounts
deposited therein, with respect to which a separate REMIC
election is to be
made.
REMIC II Certificate: Any Regular Certificate or Class R-2
Certificate.
REMIC II Certificateholder: The Holder of any REMIC II
Certificate.
REMIC Opinion: As defined in Section 9.03.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which
appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and
related
provisions, and regulations promulgated thereunder, as the
foregoing may be in
effect from time to time as well as provisions of applicable
state laws.
Remittance Date: With respect to any Distribution Date, no
later than 1:00 PM, Central Time on the Business Day immediately
preceding such
Distribution Date.
REO Disposition: The final sale by the applicable Servicer
of
any REO Property.
REO Imputed Interest: As to any REO Property, for any
period,
an amount equivalent to interest (at the Mortgage Interest Rate
net of the
Servicing Fee Rate that would have been applicable to the
related Mortgage Loan
had it been outstanding) on the unpaid principal balance of the
Mortgage Loan as
of the date of acquisition thereof (as such balance is reduced
pursuant to
Section 3.15 by any income from the REO Property treated as a
recovery of
principal).
REO Property: A Mortgaged Property acquired by the Trust
Fund
through foreclosure or deed-in-lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
Reporting Date: The later of (i) the 18th day of each
calendar
month and (ii) two Business Days after the 15th day of each
month
Repurchase Price: With respect to any Mortgage Loan, an
amount
equal to the sum of (i) the unpaid principal balance of such
Mortgage Loan as of
the date of repurchase, (ii) interest on such unpaid principal
balance of such
Mortgage Loan at the Mortgage Interest Rate from the last date
through which
interest has been paid and distributed to the Trustee to the
date of repurchase,
(iii) all unreimbursed Servicing Advances and (iv) all expenses
incurred by the
Servicer, the Trust or the Trustee, as the case may be, in
respect of a breach
or defect, including, without limitation, expenses arising out
of the Servicer's
or Trustee's, as the case may be, enforcement of the Responsible
Party's
repurchase obligations, as applicable, to the extent not
included in clause
(iii), and (v) any costs and damages incurred by the Trust in
connection with
any violation by such Mortgage Loan of any predatory lending law
or abusive
lending law.
32
<PAGE>
Request for Release: The Request for Release submitted by
the
Servicer to the Trustee, substantially in the form of Exhibit
J.
Residual Certificates: As specified in the Preliminary
Statement.
Residual Interest: The sole class of "residual interests" in
a
REMIC within the meaning of Section 860G(a)(2) of the Code.
Responsible Officer: When used with respect to the Trustee,
any vice president, any assistant vice president, any assistant
secretary, any
assistant treasurer, any associate or any other officer of the
Trustee
customarily performing functions similar to those performed by
any of the above
designated officers who at such time shall be officers to whom,
with respect to
a particular matter, such matter is referred because of such
officer's knowledge
of and familiarity with the particular subject and who shall
have direct
responsibility for the administration of this Agreement.
Review Appraisal Value: As defined in the Underwriting
Guidelines.
Rule 144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a
Mortgage
Loan due on any Due Date allocable to principal and/or interest
on such Mortgage
Loan which, unless otherwise specified herein, shall give effect
to any related
Debt Service Reduction and any Deficient Valuation that affects
the amount of
the monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any
Distribution Date, the percentage obtained by dividing (x) the
sum of (i) the
aggregate Class Certificate Balance of the Subordinated
Certificates and (ii)
the Overcollateralized Amount (in each case after taking into
account the
distributions of the Principal Distribution Amount for such
Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such
Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 64.80%.
Servicer: Wilshire Credit.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred prior to, on, or after
the Cut-off Date
by the Servicer in the performance of its servicing obligations
in connection
with a default, delinquency or other unanticipated event,
including, but not
limited to, the cost of (i) the preservation, restoration,
inspection and
protection of a Mortgaged Property, (ii) any enforcement or
judicial
proceedings, including foreclosures and litigation, in respect
of a particular
Mortgage Loan, (iii) the management (including reasonable fees
in connection
therewith) and liquidation of any REO
33
<PAGE>
Property and (iv) the performance of its obligations under
Sections 3.01, 3.09,
3.13 and 3.15 (including the cost of obtaining any broker's
price opinion
pursuant thereto). Servicing Advances also include any
reasonable
"out-of-pocket" costs and expenses (including legal fees)
incurred by the
Servicer in connection with (v) executing and recording
instruments of
satisfaction, deeds of reconveyance or Assignments of Mortgage
in connection
with any satisfaction or foreclosures in respect of any Mortgage
Loan to the
extent not recovered from the Mortgagor or otherwise payable
under this
Agreement, (vi) obtaining or correcting any legal documentation
required to be
included in the Mortgage Files and necessary for the Servicer to
perform its
obligations under this Agreement and (vii) any third party tax,
insurance, and
flood tracking service, and flood certification fees incurred by
the Servicer,
whether incurred on a life of loan basis, monthly, or otherwise;
and costs
incurred by the Servicer in connection with correcting errors of
prior
servicers, including amortization adjustments, delinquent taxes,
penalties and
interest; custodian costs; and title research. The Servicer
shall not be
required to make any Nonrecoverable Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and any
Distribution Date, an amount equal to the product of (i)
one-twelfth of
Servicing Fee Rate and (ii) the applicable Stated Principal
Balance of such
Mortgage Loan as of the first day of the calendar month
preceding the month in
which such Distribution Date occurs. Such fee shall be payable
monthly, and
shall be pro rated for any portion of a month during which the
Mortgage Loan is
serviced by the Servicer under this Agreement. The Servicing Fee
is payable
solely from the interest portion (including recoveries with
respect to interest
from Liquidation Proceeds, Insurance Proceeds (including any
proceeds under the
Mortgage Pool Insurance Policy), Condemnation Proceeds and
proceeds received
with respect to REO Properties, to the extent permitted by
Section 3.11) of such
Scheduled Payment collected by the Servicer or as otherwise
provided under
Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan,
0.50%
per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of
all documents in
the Mortgage File which are not delivered to the Trustee in the
Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing Officer: Any officer of the Servicer involved in,
or
responsible for, the administration and servicing of the
Mortgage Loans whose
name and facsimile signature appear on a list of servicing
officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this
Agreement, as
such list may from time to time be amended.
Servicing Transfer Costs: All reasonable out-of-pocket costs
and expenses incurred by the Trustee in connection with the
transfer of
servicing from a terminated Servicer, including, without
limitation, any such
costs or expenses associated with the complete transfer of all
servicing data
and the completion, correction or manipulation of such servicing
data as may be
required by the Trustee to correct any errors or insufficiencies
in the
servicing data or otherwise to enable the Trustee (or any
successor Servicer
appointed pursuant to Section 7.02) to service the Mortgage
Loans properly and
effectively.
34
<PAGE>
Significant Net Recoveries: With respect to a defaulted
Mortgage Loan, a determination by the Servicer that either (A)
the potential Net
Recoveries are anticipated to be greater than or equal to the
sum of (i) the
total indebtedness of the First Lien Mortgage Loan on the
related Mortgaged
Property and (ii) $10,000 (after anticipated expenses and
attorneys' fees) or
(B) the related Mortgagor has shown a willingness and ability to
pay over the
previous six months.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of
the last day of
the prior Due Period, two months or more past due (without
giving effect to any
grace period), each Mortgage Loan in foreclosure, all REO
Property and each
Mortgage Loan for which the Mortgagor has filed for
bankruptcy.
Specified Overcollateralized Amount: Prior to the Stepdown
Date, an amount equal to 5.60% of the Cut-off Date Pool
Principal Balance. On
and after the Stepdown Date, an amount equal to 11.20% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution
Date, subject,
until the Class Certificate Balance of each Class of Offered
Certificates has
been reduced to zero, to a minimum amount equal to the
Overcollateralization
Floor; provided, however, that if, on any Distribution Date, a
Trigger Event has
occurred, the Specified Overcollateralized Amount shall not be
reduced to the
applicable percentage of the then current aggregate Stated
Principal Balance of
the Mortgage Loans until the Distribution Date on which a
Trigger Event is no
longer occurring.
Standard & Poor's: Standard & Poor's Ratings Services,
a
division of The McGraw-Hill Companies, Inc., and its successors
in interest. If
Standard & Poor's is designated as a Rating Agency in the
Preliminary Statement,
for purposes of Section 10.05(b) the address for notices to
Standard & Poor's
shall be Standard & Poor's, 55 Water Street, New York, New
York 10041,
Attention: Residential Mortgage Surveillance Group - GSAMP Trust
2005-S1, or
such other address as Standard & Poor's may hereafter
furnish to the Depositor,
the Servicer and the Trustee.
Standard & Poor's Glossary: Version 5.6 of the Standard
&
Poor's LEVELS(R)Glossary.
Start-up Day: As defined in Section 2.06.
Stated Principal Balance: As to each Mortgage Loan and as of
any date of determination, (i) the principal balance of the
Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on
or before such
date, minus (ii) all amounts previously remitted to the Trustee
with respect to
the related Mortgage Loan representing payments or recoveries of
principal
including advances in respect of scheduled payments of
principal. For purposes
of any Distribution Date, the Stated Principal Balance of any
Mortgage Loan will
give effect to any scheduled payments of principal received by
the Servicer on
or prior to the related Determination Date or advanced by the
Servicer for the
related Remittance Date and any unscheduled principal payments
and other
unscheduled principal collections received during the
35
<PAGE>
related Prepayment Period, and the Stated Principal Balance of
any Mortgage Loan
that has prepaid in full or has become a Liquidated Mortgage
Loan during the
related Prepayment Period shall be zero.
Stepdown Date: The earlier to occur of (a) the date on which
the Class Certificate Balance of the Class A Certificates has
been reduced to
zero, and (b) the later to occur of (i) the Distribution Date in
April 2008, and
(ii) the first Distribution Date on which the Senior Enhancement
Percentage is
greater than or equal to the Senior Specified Enhancement
Percentage.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subsequent Recoveries: Amounts received with respect to any
Liquidated Mortgage Loan after it has become a Liquidated
Mortgage Loan.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Responsible Party for a Deleted Mortgage Loan which must, on the
date of such
substitution, as confirmed in a Request for Release,
substantially in the form
of Exhibit J, (i) have a Stated Principal Balance, after
deduction of the
principal portion of the Scheduled Payment due in the month of
substitution, not
in excess of, and not more than 10% less than, the Stated
Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate
no lower than and
not more than 1% per annum higher than, that of the Deleted
Mortgage Loan; (iii)
have a CLTV no higher than that of the Deleted Mortgage Loan;
(iv) have a
remaining term to maturity no greater than (and not more than
one year less than
that of) the Deleted Mortgage Loan; and (v) comply with each
representation and
warranty set forth in Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(g).
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated
on the Bridge Telerate Service (or such other page as may
replace that page on
that service for displaying comparable rates or prices).
Terminating Entity: The Person that exercises a Terminating
Purchase pursuant to Section 9.01(a) hereof.
Terminating Purchase: The purchase of the Mortgage Loans and
all other property of the Trust Fund pursuant to Section 9.01(a)
hereof.
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<PAGE>
Termination Price: The price paid by the Terminating Entity
for the Mortgage Loans and all other property of the Trust Fund
pursuant to
Section 9.01(a) hereof.
30 Day Delinquency: The failure of the Mortgagor to make any
Scheduled Payment due under the Mortgage Note on or prior to the
date which is
30 days after such payment's Due Date.
Total Monthly Excess Spread: As to any Distribution Date, an
amount equal to the excess if any, of (i) the interest collected
on the Mortgage
Loans received by the Servicer on or prior to the related
Determination Date or
advanced by the Servicer for the related Remittance Date (net of
Expense Fees)
over (ii) the sum of amounts payable to the Offered Certificates
on such
Distribution Date pursuant to Section 4.02(a)(i).
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a
Trigger Event exists if (i) the quotient (expressed as a
percentage) of (1) the
rolling three month average of the aggregate unpaid principal
balance of 60+ Day
Delinquent Mortgage Loans, divided by (2) the aggregate unpaid
principal balance
of the Mortgage Loans as of the last day of the related Due
Period, equals or
exceeds 17.00% of the Senior Enhancement Percentage as of the
last day of the
prior Due Period or (ii) the quotient (expressed as a
percentage) of (x) the
aggregate amount of Realized Losses (as reduced by any Net
Recoveries received
on Charged Off Loans) incurred since the Cut-off Date through
the last day of
the related Prepayment Period divided by (y) the Cut-off Date
Pool Principal
Balance, exceeds the applicable percentages set forth below with
respect to such
Distribution Date:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN LOSS PERCENTAGE
------------------------------ ---------------
<S> <C>
April 2008 through March 2009 7.000% for the first month, plus
an additional
1/12th of 4.000% for each month thereafter (e.g.,
approximately 7.333% in May 2008)
April 2009 through March 2010 11.000% for the first month, plus
an additional
1/12th of 3.000% for each month thereafter (e.g.,
approximately 11.250% in May 2009)
April 2010 through March 2011 14.000% for the first month, plus
an additional
1/12th of 1.500% for each month thereafter (e.g.,
approximately 14.125% in May 2010)
April 2011 and thereafter 15.500%
</TABLE>
Trust: The express trust created hereunder in Section
2.01(c).
Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and
principal received on
or with respect thereto after the related Cut-off Date, other
than such amounts
which were due on the Mortgage Loans on or before the
37
<PAGE>
related Cut-off Date; (ii) the Collection Account, the Excess
Reserve Fund
Account, the Distribution Account, and all amounts deposited
therein pursuant to
the applicable provisions of this Agreement; (iii) property that
secured a
Mortgage Loan and has been acquired by foreclosure, deed-in-lieu
of foreclosure
or otherwise; (iv) the Mortgage Pool Insurance Policy and (v)
all proceeds of
the conversion, voluntary or involuntary, of any of the
foregoing.
Trust REMIC: Either REMIC I or REMIC II, as applicable.
Trustee: Deutsche Bank National Trust Company, and its
successors in interest and, if a successor trustee is appointed
hereunder, such
successor.
Trustee Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the related
Trustee Fee Rate on
the Stated Principal Balance of such Mortgage Loan as of the
preceding
Distribution Date (or as of the Closing Date in the case of the
first
Distribution Date) or, in the event of any payment of interest
which accompanies
a Principal Prepayment in Full made by the Mortgagor, interest
at the Trustee
Fee Rate on the Stated Principal Balance of such Mortgage Loan
for the period
covered by such payment of interest.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.01%
per annum.
Trustee Float Period: With respect to any Distribution Date
and the related amounts in the Distribution Account, the period
commencing on
the Business Day immediately preceding such Distribution Date
and ending on such
Distribution Date.
U.S. Person: (i) A citizen or resident of the United States;
(ii) a corporation (or entity treated as a corporation for tax
purposes) created
or organized in the United States or under the laws of the
United States or of
any State thereof, including, for this purpose, the District of
Columbia; (iii)
a partnership (or entity treated as a partnership for tax
purposes) organized in
the United States or under the laws of the United States or of
any state
thereof, including, for this purpose, the District of Columbia
(unless provided
otherwise by future Treasury regulations); (iv) an estate whose
income is
includible in gross income for United States income tax purposes
regardless of
its source; or (v) a trust, if a court within the United States
is able to
exercise primary supervision over the administration of the
trust and one or
more U.S. Persons have authority to control all substantial
decisions of the
trust. Notwithstanding the last clause of the preceding
sentence, to the extent
provided in Treasury regulations, certain trusts in existence on
August 20,
1996, and treated as U.S. Persons prior to such date, may elect
to continue to
be U.S. Persons.
Uncertificated Balance: The amount of the REMIC I Regular
Interests outstanding as of any date of determination. As of the
Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest
shall equal the
amount set forth in the Preliminary Statement hereto as its
initial
uncertificated balance. On each Distribution Date, the
Uncertificated Balance of
the REMIC I Regular Interest shall be reduced by all
distributions of principal
made on such REMIC I Regular Interest on such Distribution Date
pursuant to
Section 4.06 and, if and to the extent necessary and
appropriate, shall be
further reduced on such Distribution Date by Realized
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Losses as provided in Section 4.05 and the Uncertificated
Balance of REMIC I
Regular Interest I-LTZZ shall be increased by interest deferrals
as provided in
Section 4.06. The Uncertificated Balance of each REMIC I Regular
Interest shall
never be less than zero.
Uncertificated Interest: With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the
REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for
such
Distribution Date, accrued on the Uncertificated Balance thereof
immediately
prior to such Distribution Date. Uncertificated Interest in
respect of the REMIC
I Regular Interests shall accrue on the basis of a 360-day year
consisting of
twelve 30-day months. Uncertificated Interest with respect to
each Distribution
Date, as to any REMIC I Regular Interest, shall be reduced by an
amount equal to
the sum of (a) the aggregate Prepayment Interest Shortfall, if
any, for such
Distribution Date to the extent not covered by payments pursuant
to Section 3.25
of this Agreement and (b) the aggregate amount of any Relief Act
Interest
Shortfall, if any allocated, in each case, to such REMIC I
Regular Interest
pursuant to Section 4.02. In addition, Uncertificated Interest
with respect to
each Distribution Date, as to any Uncertificated REMIC Regular
Interest, shall
be reduced by Realized Losses, if any, allocated to such
Uncertificated REMIC
Regular Interest pursuant to Section 4.05.
Underwriters' Exemption: Any exemption listed in footnote 1
of, and amended by, Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines
attached
to the Purchase Agreement.
Unpaid Interest Amounts: As of any Distribution Date and any
Class of Certificates, the sum of (a) the portion of the Accrued
Certificate
Interest Distribution Amount from prior Distribution Dates
remaining unpaid
immediately prior to the current Distribution Date and (b)
interest on such
unpaid amount in clause (a) at the applicable Pass-Through Rate
(to the extent
permitted by applicable law).
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
Certificates, if any (such Voting Rights to be allocated among
the holders of
Certificates of each such Class in accordance with their
respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to
the Class P
Certificates, if any, and (c) the remaining Voting Rights shall
be allocated
among Holders of the remaining Classes of Certificates (other
than the Class
R-1, Class R-2 and Class X-1 Certificates) in proportion to the
Certificate
Balances of their respective Certificates on such date. The
Class R-1, Class R-2
and Class X-1 Certificates shall have no Voting Rights.
WAC Cap: With respect to the Mortgage Loans as of any
Distribution Date, a per annum rate equal to (i) the weighted
average of the
Adjusted Net Mortgage Interest Rates then in effect on the
beginning of the
related Due Period on the Mortgage Loans and (ii) with respect
to each Class of
LIBOR Certificates, multiplied by a fraction, the numerator of
which is 30 and
the denominator of which is the actual number of days in the
Interest Accrual
Period related to such
39
<PAGE>
Distribution Date. For federal income tax purposes, the
equivalent of the
foregoing shall be expressed as the weighted average of the
REMIC I Remittance
Rates on each REMIC I Regular Interest, weighted on the basis of
the
Uncertificated Balance of each such REMIC I Regular
Interest.
Wilshire Credit: Wilshire Credit Corporation, a Nevada
corporation, and its successors in interest.
Wilshire Special Servicing: With regard to any Charged Off
Loans, the servicing of such Charged Off Loans using specialized
collection
procedures (including foreclosure, if appropriate) to maximize
recoveries.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF MORTGAGE LOANS. (a) The
Depositor,
concurrently with the execution and delivery hereof, hereby
sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the
benefit of the
Certificateholders, without recourse, all the right, title and
interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf
of the Trust,
hereby accepts the Trust Fund. In addition, on the Closing Date,
the Co-Trustee
shall pay the Mortgage Pool Insurer Fee to the Mortgage Pool
Insurer, to the
extent of funds on deposit in the Distribution Account, and the
Depositor shall
cause the Mortgage Pool Insurer to deliver the Mortgage Pool
Insurance Policy to
the Co-Trustee.
(b) In connection with the transfer and assignment of
each Mortgage Loan, the Depositor has delivered or caused to be
delivered to the
Trustee for the benefit of the Certificateholders the following
documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note (except for up to 0.39% of
the Mortgage Notes for which there is a lost note affidavit and
a copy
of the Mortgage Note) bearing all intervening endorsements,
endorsed
"Pay to the order of _________, without recourse" and signed in
the
name of the last endorsee. To the extent that there is no room
on the
face of the Mortgage Notes for endorsements, the endorsement may
be
contained on an allonge unless the Trustee is advised by the
Responsible Party that state law does not so allow. If the
Mortgage
Loan was acquired by the Responsible Party in a merger, the
endorsement
must be by "[last endorsee], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated
by the
last endorsee while doing business under another name, the
endorsement
must be by "[last endorsee], formerly known as [previous
name]";
(ii) the original of any guarantee executed in connection
with the Mortgage Note;
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(iii) the original Mortgage with evidence of recording
thereon or a certified true copy of such Mortgage submitted
for
recording. If in connection with any Mortgage Loan, the
Responsible
Party, cannot deliver or cause to be delivered the original
Mortgage
with evidence of recording thereon on or prior to the Closing
Date
because of a delay caused by the public recording office where
such
Mortgage has been delivered for recordation or because such
Mortgage
has been lost or because such public recording office retains
the
original recorded Mortgage, the Responsible Party shall deliver
or
cause to be delivered to the Trustee, a photocopy of such
Mortgage,
together with (i) in the case of a delay caused by the public
recording
office, an officer's certificate of the Responsible Party (or
evidence
of certification on the face of such photocopy of such Mortgage)
or
certified by the title company, escrow agent, or closing
attorney
stating that such Mortgage has been dispatched to the
appropriate
public recording office for recordation and that the original
recorded
Mortgage or a copy of such Mortgage certified by such public
recording
office to be a true and complete copy of the original recorded
Mortgage
will be promptly delivered to the Trustee upon receipt thereof
by the
Responsible Party; or (ii) in the case of a Mortgage where a
public
recording office retains the original recorded Mortgage or in
the case
where a Mortgage is lost after recordation in a public
recording
office, a copy of such Mortgage certified by such public
recording
office to be a true and complete copy of the original
recorded
Mortgage;
(iv) the originals of all assumption, modification,
consolidation or extension agreements, (if provided), with
evidence of
recording thereon or a certified true copy of such agreement
submitted
for recording;
(v) the original Assignment of Mortgage for each Mortgage
Loan endorsed in blank and in recordable form;
(vi) the originals of all intervening assignments of
mortgage (if any) evidencing a complete chain of assignment from
the
applicable originator to the last endorsee with evidence of
recording
thereon, or if any such intervening assignment has not been
returned
from the applicable recording office or has been lost or if such
public
recording office retains the original recorded assignments of
mortgage,
the Responsible Party shall deliver or cause to be delivered to
the
Trustee, a photocopy of such intervening assignment, together
with (A)
in the case of a delay caused by the public recording office,
an
officer's certificate of the Responsible Party (or evidence
of
certification on the face of such photocopy of such
intervening
assignment of mortgage) or certified by the title company,
escrow
agent, or closing attorney stating that such intervening
assignment of
mortgage has been dispatched to the appropriate public recording
office
for recordation and that such original recorded intervening
assignment
of mortgage or a copy of such intervening assignment of
mortgage
certified by the appropriate public recording office to be a
true and
complete copy of the original recorded intervening assignment
of
mortgage will be promptly delivered to the Trustee upon receipt
thereof
by the Responsible Party; or (B) in the case of an
intervening
assignment where a public recording office retains the
original
recorded intervening assignment or in the case where an
intervening
assignment is lost after recordation in a public recording
office, a
copy of such intervening assignment certified by such public
41
<PAGE>
recording office to be a true and complete copy of the
original
recorded intervening assignment;
(vii) the original mortgagee policy of title insurance or,
in the event such original title policy is unavailable, a
certified
true copy of the related policy binder or commitment for
title
certified to be true and complete by the title insurance
company; and
(viii) a security agreement, chattel mortgage or equivalent
document executed in connection with the Mortgage (if
provided).
Each Mortgage Loan for which a Mortgage Note is missing
shall
be evidenced by a lost note affidavit as of the Closing Date. In
the event one
or more lost note affidavits are provided to cover multiple
missing Mortgage
Notes on the Closing Date, the Responsible Party shall deliver
to the Trustee
the applicable individual lost note affidavits within ten (10)
Business Days of
the Closing Date. If the Responsible Party fails to deliver the
required
individual lost note affidavits within the specified period of
time, the Trustee
shall notify the Responsible Party to take such remedial
actions, including,
without limitation, the repurchase by the Responsible Party
within 30 days of
the Closing Date.
The Responsible Party shall deliver to the Trustee the
applicable recorded document promptly upon receipt from the
respective recording
office but in no event later than 120 days from the Closing
Date.
From time to time, the Responsible Party shall forward, with
respect to the Mortgage Loans, to the Trustee additional
documents evidencing an
assumption, modification, consolidation or extension of a
Mortgage Loan approved
by the Responsible Party in accordance with the terms of this
Agreement. All
such mortgage documents held by the Trustee as to each Mortgage
Loan shall
constitute the "Custodial File."
On or prior to the Closing Date, the Responsible Party shall
deliver to the Trustee Assignments of Mortgages, in blank, for
each applicable
Mortgage Loan. The Responsible Party shall cause the Assignments
of Mortgage
with completed recording information to be provided to the
Servicer in a
reasonably acceptable manner. No later than thirty (30) Business
Days following
the later of the Closing Date and the date of receipt by the
Servicer of the
fully completed Assignments of Mortgages in recordable form, the
Servicer shall
promptly submit or cause to be submitted for recording, at the
expense of the
Responsible Party or the Depositor, at no expense to the Trust
Fund or the
Trustee in the appropriate public office for real property
records, each
Assignment of Mortgage referred to in Section 2.01(b)(v).
Notwithstanding the
foregoing, however, for administrative convenience and
facilitation of servicing
and to reduce closing costs, the Assignments of Mortgage shall
not be required
to be completed and submitted for recording with respect to any
Mortgage Loan if
the Trustee and each Rating Agency has received an opinion of
counsel,
satisfactory in form and substance to the Trustee and each
Rating Agency, to the
effect that the recordation of such Assignments of Mortgage in
any specific
jurisdiction is not necessary to protect the Trustee's interest
in the related
Mortgage Note. If the Assignment of Mortgage is to be recorded,
the Mortgage
shall be assigned by the Responsible Party at the Responsible
Party's or the
Depositor's expense to "Deutsche Bank National Trust
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<PAGE>
Company, as trustee under the Pooling and Servicing Agreement
dated as of March
1, 2005, GSAMP Trust 2005-S1." In the event that any such
assignment is lost or
returned unrecorded because of a defect therein, the Responsible
Party shall
promptly prepare a substitute assignment to cure such defect and
thereafter
cause each such assignment to be duly recorded at the expense of
the Responsible
Party or the Depositor.
On or prior to the Closing Date, the Depositor shall deliver
to the Trustee and the Servicer a copy of the Data Tape
Information in
electronic, machine readable medium in a form mutually
acceptable to the
Depositor, the Servicer and the Trustee. Within ten (10)
Business Days of the
Closing Date, the Depositor shall deliver a copy of the complete
Mortgage Loan
Schedule to the Trustee and the Servicer.
In the event that such original or copy of any document
submitted for recordation to the appropriate public recording
office is not so
delivered to the Trustee within 90 days following the Closing
Date, and in the
event that the Responsible Party does not cause such failure to
be cured within
30 days of discovery of receipt of written notification of such
failure from the
Depositor, the related Mortgage Loan shall, upon the request of
the Depositor,
be repurchased by the Responsible Party at the price and in the
manner specified
in Section 2.03. The foregoing repurchase obligation shall not
apply in the
event that the Responsible Party cannot deliver such original or
copy of any
document submitted for recordation to the appropriate public
recording office
within the specified period due to a delay caused by the
recording office in the
applicable jurisdiction; provided, that the Responsible Party
shall instead
deliver a recording receipt of such recording office or, if such
recording
receipt is not available, an officer's certificate of an officer
of the
Responsible Party confirming that such document has been
accepted for recording.
Notwithstanding anything to the contrary contained in this
Section 2.01, in those instances where the public recording
office retains or
loses the original Mortgage or assignment after it has been
recorded, the
obligations of the Resonsible Party shall be deemed to have been
satisfied upon
delivery by the Responsbile Party to the Trustee prior to the
Closing Date of a
copy of such Mortgage or assignment, as the case may be,
certified (such
certification to be an original thereof) by the public recording
office to be a
true and complete copy of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the
further provisions of this Agreement and the laws of the State
of New York, an
express trust (the "Trust") to be known, for convenience, as
"GSAMP Trust
2005-S1" and Deutsche Bank National Trust Company is hereby
appointed as Trustee
in accordance with the provisions of this Agreement. The parties
hereto
acknowledge and agree that it is the policy and intention of the
Trust to
acquire only Mortgage Loans meeting the requirements set forth
in this
Agreement, including without limitation, the representations and
warranties set
forth in paragraph (47) of Schedule IV to this Agreement.
(d) The Trust shall have the capacity, power and
authority, and the Trustee on behalf of the Trust is hereby
authorized, to
accept the sale, transfer, assignment, set over and conveyance
by the Depositor
to the Trust of all the right, title and interest of the
Depositor in and
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<PAGE>
to the Trust Fund (including, without limitation, the Mortgage
Loans and Fremont
Agreements) pursuant to Section 2.01(a).
Section 2.02 ACCEPTANCE BY THE TRUSTEE OF THE MORTGAGE
LOANS.
The Trustee acknowledges receipt of the documents identified in
the Initial
Certification in the form annexed hereto as Exhibit E, and
declares that it
holds and will hold such documents and the other documents
delivered to it
pursuant to Section 2.01, and that it holds or will hold such
other assets as
are included in the Trust Fund, in trust for the exclusive use
and benefit of
all present and future Certificateholders. The Trustee
acknowledges that it will
maintain possession of the related Mortgage Notes in the State
of California
unless otherwise permitted by the Rating Agencies.
Prior to and as a condition to the Closing, the Trustee
shall
deliver via facsimile (with original to follow the next Business
Day) to the
Depositor and the Servicer an Initial Certification prior to the
Closing Date,
or as the Depositor agrees to, on the Closing Date, certifying
receipt of a
Mortgage Note and Assignment of Mortgage for each Mortgage Loan
with any
exceptions thereon. The Trustee shall not be responsible to
verify the validity,
sufficiency or genuineness of any document in any Custodial
File.
On the Closing Date, the Trustee shall ascertain that all
documents required to be reviewed by it are in its possession,
and shall deliver
to the Depositor and the Servicer an Initial Certification, in
the form annexed
hereto as Exhibit E, and shall deliver to the Depositor and the
Servicer a
Document Certification and Exception Report, in the form annexed
hereto as
Exhibit F, within 90 days after the Closing Date to the effect
that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in
such certification
as an exception and not covered by such certification): (i) all
documents
required to be reviewed by it are in its possession; (ii) such
documents have
been reviewed by it and appear regular on their face and relate
to such Mortgage
Loan; (iii) based on its examination and only as to the
foregoing documents, the
information set forth in items (1), (2) and (13) of the Mortgage
Loan Schedule
and items (1), (2) and (13) of the Data Tape Information
respecting such
Mortgage Loan is correct; and (iv) each Mortgage Note has been
endorsed as
provided in Section 2.01 of this Agreement. The Trustee shall
not be responsible
to verify the validity, sufficiency or genuineness of any
document in any
Custodial File.
The Trustee shall retain possession and custody of each
Custodial File in accordance with and subject to the terms and
conditions set
forth herein. The Servicer shall promptly deliver to the
Trustee, upon the
execution or receipt thereof, the originals of such other
documents or
instruments constituting the Custodial File as come into the
possession of the
Servicer from time to time.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE
RESPONSIBLE PARTY AND THE SERVICER. (a) Wilshire Credit hereby
makes the
representations and warranties set forth in Schedule II hereto
to the Depositor
and the Trustee as of the Closing Date.
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<PAGE>
(b) The Responsible Party hereby makes the
representations and warranties set forth in Schedule III and
Schedule IV hereto,
to the Depositor, the Servicer and the Trustee.
(c) It is understood and agreed by the Servicer and the
Responsible Party that the representations and warranties set
forth in this
Section 2.03 shall survive the transfer of the Mortgage Loans by
the Depositor
to the Trustee, and shall inure to the benefit of the Depositor,
and the Trustee
notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or
Assignment of Mortgage or the examination or failure to examine
any Mortgage
File. Upon discovery by any of the Responsible Party, the
Depositor, the
Trustee, or the Servicer of a breach of any of the foregoing
representations and
warranties, the party discovering such breach shall give prompt
written notice
to the others.
(d) Within 30 days of the earlier of either discovery by
or notice to the Responsible Party that any Mortgage Loan does
not conform to
the requirements as determined in the Trustee's review of the
related Custodial
File or within 60 days of the earlier of either discovery by or
notice to the
Responsible Party of any breach of a representation or warranty
set forth in
Section 2.03(b) that materially and adversely affects the value
of any Mortgage
Loan or the interest of the Trustee or the Certificateholders
therein (without
taking into effect the Mortgage Pool Insurance Policy), the
Responsible Party
shall use its best efforts to cause to be remedied a material
defect in a
document constituting part of a Mortgage File or promptly to
cure such breach in
all material respects and, if such defect or breach cannot be
remedied, the
Responsible Party shall, (i) if such 30 or 60 day period, as
applicable, expires
prior to the second anniversary of the Closing Date, remove such
Mortgage Loan
(a "DELETED MORTGAGE LOAN") from the Trust Fund and substitute
in its place a
Substitute Mortgage Loan, in the manner and subject to the
conditions set forth
in this Section 2.03, or (ii) at the Depositor's option,
repurchase such
Mortgage Loan at the Repurchase Price; PROVIDED, HOWEVER, that
any such
substitution pursuant to clause (i) above shall not be effected
prior to the
delivery to the Trustee of the Opinion of Counsel required by
Section 2.04, if
any, and a Request for Release substantially in the form of
Exhibit J, and the
Mortgage File for any such Substitute Mortgage Loan. In the
event that a breach
shall involve any representation or warranty set forth in
Schedule IV, and such
breach cannot be cured within 60 days of the earlier of either
discovery by or
notice to the Responsible Party of such breach, all of the
Mortgage Loans shall,
at the Depositor's option, be repurchased by the Responsible
Party at the
Repurchase Price. Notwithstanding the foregoing, a breach which
causes a
Mortgage Loan not to constitute a "qualified mortgage" within
the meaning of
Section 860G(a)(3) of the Code will be deemed automatically to
materially and
adversely affect the value of such Mortgage Loan and the
interests of the
Trustee and Certificateholders in such Mortgage Loan. In
addition, in the event
the Servicer reasonably determines that there has been a breach
of the
representation and warranty set forth in clause (47) of Schedule
III with
respect to any Mortgage Loan, the Servicer's obligations with
regard to such
Mortgage Loan will be limited to the acceptance and processing
of payments made
thereunder.
(e) With respect to any Substitute Mortgage Loan or
Loans, the Responsible Party shall deliver to the Trustee for
the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related
assignment of
the Mortgage, and such other documents and agreements as are
required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned
as required by
Section 2.01. No substitution is permitted to be made in any
calendar month
after
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the Determination Date for such month. Scheduled Payments due
with respect to
Substitute Mortgage Loans in the Due Period of substitution
shall not be part of
the Trust Fund and will be retained by the Responsible Party on
the next
succeeding Distribution Date. For the Due Period of
substitution, distributions
to Certificateholders will include the Scheduled Payment due on
any Deleted
Mortgage Loan for such Due Period and thereafter the Responsible
Party shall be
entitled to retain all amounts received in respect of such
Deleted Mortgage
Loan.
(f) The Depositor shall, based on information provided by
the Responsible Party, amend the Mortgage Loan Schedule for the
benefit of the
Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the
substitution of the Substitute Mortgage Loan or Loans and the
Depositor shall
deliver the amended Mortgage Loan Schedule to the Servicer and
the Trustee. The
Depositor shall have no liability with respect to the
information provided by
the Responsible Party related to the Substitute Mortgage Loan.
Upon such
substitution, the Substitute Mortgage Loan or Loans shall be
subject to the
terms of this Agreement in all respects, and the Responsible
Party shall be
deemed to have made with respect to such Substitute Mortgage
Loan or Loans, as
of the date of substitution, the representations and warranties
made pursuant to
Section 2.03(b) with respect to such Mortgage Loan. Upon any
such substitution
and the deposit to the Collection Account of the amount required
to be deposited
therein in connection with such substitution as described in the
following
paragraph, the Trustee shall release the Mortgage File held for
the benefit of
the Certificateholders relating to such Deleted Mortgage Loan to
the Responsible
Party and shall execute and deliver at the Responsible Party's
direction such
instruments of transfer or assignment prepared by the
Responsible Party, in each
case without recourse, as shall be necessary to vest title in
the Responsible
Party, or its designee, the Trustee's interest in any Deleted
Mortgage Loan
substituted for pursuant to this Section 2.03.
(g) For any month in which the Responsible Party
substitutes one or more Substitute Mortgage Loans for one or
more Deleted
Mortgage Loans, the Depositor will determine the amount (if any)
by which the
aggregate unpaid principal balance of all such Substitute
Mortgage Loans as of
the date of substitution is less than the aggregate Stated
Principal Balance of
all such Deleted Mortgage Loans (after application of the
scheduled principal
portion of the Scheduled Payments due in the Due Period of
substitution). The
amount of such shortage (the "SUBSTITUTION ADJUSTMENT AMOUNT")
plus an amount
equal to the aggregate of any unreimbursed Advances and
Servicing Advances with
respect to such Deleted Mortgage Loans shall be deposited into
the Collection
Account by the Responsible Party on or before the next
Remittance Date.
(h) In addition to such repurchase obligation, the
Responsible Party shall indemnify the Depositor, any of its
Affiliates, the
Servicer, and the Trustee and hold such parties harmless against
any losses,
damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and
related costs, judgments, and other costs and expenses resulting
from any claim,
demand, defense or assertion based on or grounded upon, or
resulting from, a
breach by the Responsible Party of any of its representations
and warranties
contained in the Purchase Agreement or this Agreement.
(i) In the event that a Mortgage Loan shall have been
repurchased pursuant to this Agreement, the Repurchase Price
thereof shall be
deposited in the Collection Account by the
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Servicer pursuant to Section 3.10 on or before the next
Remittance Date and upon
such deposit of the Repurchase Price, and receipt of a Request
for Release in
the form of Exhibit J hereto, the Trustee shall release the
related Custodial
File held for the benefit of the Certificateholders to such
Person as directed
by the Servicer, and the Trustee shall execute and deliver at
such Person's
direction such instruments of transfer or assignment prepared by
such Person, in
each case without recourse, as shall be necessary to transfer
title from the
Trustee. It is understood and agreed that the obligation under
this Agreement of
any Person to cure, repurchase or replace any Mortgage Loan as
to which a breach
has occurred and is continuing, together with any related
indemnification
obligations, shall constitute the sole remedy against such
Persons respecting
such breach available to Certificateholders, the Depositor, the
Servicer or the
Trustee on their behalf.
The representations and warranties made pursuant to this
Section 2.03 shall survive delivery of the respective Custodial
Files to the
Trustee for the benefit of the Certificateholders.
Section 2.04 [RESERVED].
Section 2.05 EXECUTION AND DELIVERY OF CERTIFICATES. The
Trustee acknowledges the transfer and assignment to it of the
Trust Fund and,
concurrently with such transfer and assignment, has executed and
delivered to or
upon the order of the Depositor, the Certificates in authorized
denominations
evidencing directly or indirectly the entire ownership of the
Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights
referred to above
for the benefit of all present and future Holders of the
Certificates.
Section 2.06 REMIC MATTERS. The Preliminary Statement sets
forth the designations for federal income tax purposes of all
interests created
hereby. The "Start-up Day" for purposes of the REMIC Provisions
shall be the
Closing Date. The "latest possible maturity date" is the
Distribution Date in
December 2034, which is the Distribution Date following the
latest Mortgage Loan
maturity date.
Section 2.07 REPRESENTATIONS AND WARRANTIES OF THE
DEPOSITOR.
The Depositor hereby represents, warrants and covenants to the
Trustee, the
Servicer and the Responsible Party that as of the date of this
Agreement or as
of such date specifically provided herein:
(a) The Depositor is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware;
(b) The Depositor has the corporate power and authority
to convey the Mortgage Loans and to execute, deliver and
perform, and to enter
into and consummate the transactions contemplated by, this
Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, all requisite corporate
action having
been taken, and, assuming the due authorization, execution and
delivery hereof
by the Servicer, and the Trustee, constitutes or will constitute
the legal,
valid and binding agreement of the Depositor, enforceable
against the
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Depositor in accordance with its terms, except as such
enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar
laws relating to or affecting the rights of creditors generally,
and by general
equity principles (regardless of whether such enforcement is
considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental
authority or court
is required for the execution, delivery and performance of or
compliance by the
Depositor with this Agreement or the consummation by the
Depositor of any of the
transactions contemplated hereby, except as have been made on or
prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby or
thereby, or the
fulfillment of or compliance with the terms and conditions of
this Agreement,
(i) conflicts or will conflict with or results or will result in
a breach of, or
constitutes or will constitute a default or results or will
result in an
acceleration under (A) the charter or bylaws of the Depositor,
or (B) of any
term, condition or provision of any material indenture, deed of
trust, contract
or other agreement or instrument to which the Depositor or any
of its
subsidiaries is a party or by which it or any of its
subsidiaries is bound; (ii)
results or will result in a violation of any law, rule,
regulation, order,
judgment or decree applicable to the Depositor of any court or
governmental
authority having jurisdiction over the Depositor or its
subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or
encumbrance which
would have a material adverse effect upon the Mortgage Loans or
any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or
against or investigations of, the Depositor pending, or to the
knowledge of the
Depositor, threatened, before any court, administrative agency
or other
tribunal, and no notice of any such action, which, in the
Depositor's reasonable
judgment, might materially and adversely affect the performance
by the Depositor
of its obligations under this Agreement, or the validity or
enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any
order or decree of any court or any order, regulation or demand
of any federal,
state, municipal or governmental agency that may materially and
adversely affect
its performance hereunder; and
(h) Immediately prior to the transfer and assignment by
the Depositor to the Trustee on the Closing Date, the Depositor
had good title
to, and was the sole owner of each Mortgage Loan, free of any
interest of any
other Person, and the Depositor has transferred all right, title
and interest in
each Mortgage Loan to the Trustee. The transfer of each Mortgage
Note and each
Mortgage as and in the manner contemplated by this Agreement is
sufficient
either (i) fully to transfer to the Trustee, for the benefit of
the
Certificateholders, all right, title, and interest of the
Depositor thereto as
note holder and mortgagee or (ii) to grant to the Trustee, for
the benefit of
the Certificateholders, the security interest referred to in
Section 10.04, and
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It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.07 shall
survive delivery
of the respective Custodial Files to the Trustee or to a
custodian, as the case
may be, and shall inure to the benefit of the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 SERVICER TO SERVICE MORTGAGE LOANS. (a) For and
on behalf of the Certificateholders, the Servicer shall service
and administer
the Mortgage Loans in accordance with the terms of this
Agreement, in accordance
with the Radian Guidelines (to the extent such Radian Guidelines
are not
inconsistent with the terms of this Agreement) and in accordance
with the
respective Mortgage Loans and, to the extent consistent with
such terms, in
compliance with all applicable federal, state and local laws,
and in the same
manner in which it services and administers similar mortgage
loans for its own
portfolio, giving due consideration to customary and usual
standards of practice
of mortgage lenders and loan servicers administering similar
mortgage loans but
without regard to:
(i) any relationship that the Servicer, any Subservicer
or any Affiliate of the Servicer or any Subservicer may have
with the
related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by
the Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) the amount of the Servicer's or any Subservicer's
compensation for its services hereunder.
To the extent consistent with the foregoing, the Servicer
shall seek to maximize the timely and complete recovery of
principal and
interest on the related Mortgage Notes. Subject only to the
above-described
servicing standards and the terms of this Agreement and of the
respective
Mortgage Loans, the Servicer shall have full power and
authority, acting alone
or through Subservicers as provided in Section 3.02, to do or
cause to be done
any and all things in connection with such servicing and
administration which it
may deem necessary or desirable. Without limiting the generality
of the
foregoing, the Servicer in its own name or in the name of a
Subservicer is
hereby authorized and empowered by the Trustee when the Servicer
believes it
appropriate in its best judgment in accordance with Accepted
Servicing
Practices, to execute and deliver any and all instruments of
satisfaction or
cancellation, or of partial or full release or discharge, and
all other
comparable instruments, with respect to the related Mortgage
Loans and the
Mortgaged Properties and to institute foreclosure proceedings or
obtain a
deed-in-lieu of foreclosure so as to convert the ownership of
such properties,
and to hold or cause to be held title to such properties, on
behalf of the
Trustee and in the name of the Trust. The Servicer shall service
and administer
the Mortgage Loans in accordance with applicable state and
federal law
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and shall provide to the Mortgagors any reports required to be
provided to them
thereby. Subject to Section 3.16, the Trustee shall execute, at
the written
request of the Servicer, and furnish to the Servicer and any
Subservicer such
documents as are necessary or appropriate to enable the Servicer
or any
Subservicer to carry out their servicing and administrative
duties hereunder,
and the Trustee hereby grants to the Servicer, and this
Agreement shall
constitute, a power of attorney to carry out such duties
including a power of
attorney to take title to Mortgaged Properties after foreclosure
on behalf of
the Trustee and in the name of the Trust. At the request of the
Servicer, the
Trustee shall execute a reasonable number of powers of attorney
in the form
attached hereto as Exhibit Q in favor of the Servicer for the
purposes described
herein to the extent necessary or desirable to enable the
Servicer to perform
its duties hereunder. The Trustee shall not be liable for the
actions of the
Servicer or any Subservicers under such powers of attorney. If
the Servicer
receives any notice of suit, litigation or proceeding in the
name of Deutsche
Bank National Trust Company, then the Servicer shall promptly
forward a copy of
same to the Trustee unless the notice of said suit, litigation
or proceeding was
provided by the Trustee to the Servicer.
(b) Subject to Section 3.09(b), in accordance with the
standards of the preceding paragraph, the Servicer shall advance
or cause to be
advanced funds as necessary for the purpose of effecting the
timely payment of
taxes and assessments on the Mortgaged Properties (to the extent
the Servicer
has received reasonable timely notice that such taxes or
assessments have not
been paid by the related Mortgagor or the owner or the servicer
of the related
First Lien Mortgage Loan), which advances shall be Servicing
Advances
reimbursable in the first instance from related collections from
the Mortgagors
pursuant to Section 3.09(b), and further as provided in Section
3.11. Any cost
incurred by the Servicer or by Subservicers in effecting the
timely payment of
taxes and assessments on a Mortgaged Property shall not be added
to the unpaid
principal balance of the related Mortgage Loan, notwithstanding
that the terms
of such Mortgage Loan so permit. Notwithstanding anything in
this Agreement to
the contrary, however, the Servicer need not may make any future
advances with
respect to a Mortgage Loan if the Servicer makes a good faith
determination that
such advance would, if made, constitute a Nonrecoverable P&I
Advance or
Nonrecoverable Servicing Advance, as set forth in Section
4.01.
(c) The Servicer shall not (i) permit any modification
with respect to any Mortgage Loan that would change the Mortgage
Interest Rate,
reduce or increase the principal balance (except for reductions
resulting from
actual payments of principal) or change the final maturity date
on such Mortgage
Loan (except for (A) a reduction of interest or principal
payments resulting
from the application of the Servicemembers Civil Relief Act or
any similar state
statutes or (B) as provided in Section 3.07, if the Mortgagor is
in default with
respect to the Mortgage Loan or such default is, in the judgment
of the
Servicer, reasonably foreseeable) or (ii) permit any
modification, waiver or
amendment of any term of any Mortgage Loan that would both (A)
effect an
exchange or reissuance of such Mortgage Loan under Section 1001
of the Code (or
final, temporary or proposed Treasury regulations promulgated
thereunder) and
(B) cause either Trust REMIC to fail to qualify as a REMIC under
the Code or the
imposition of any tax on "prohibited transactions" or
"contributions after the
start-up day" under the REMIC Provisions, or (iii) except as
provided in Section
3.07(a), waive any Prepayment Premiums.
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(d) The Servicer may delegate its responsibilities under
this Agreement; PROVIDED, HOWEVER, that no such delegation shall
release the
Servicer from the responsibilities or liabilities arising under
this Agreement.
(e) If the Mortgage relating to a Mortgage Loan had a
related First Lien Mortgage Loan on the related Mortgaged
Property as of the
Cut-off Date, then the Servicer, in such capacity, may consent
to the
refinancing of the related First Lien Mortgage Loan, provided
that the such
refinancing is consistent with the Radian Guidelines or, if the
Mortgage Pool
Insurer has denied a claim with respect to the related Mortgage
Loan, the
following requirements are met:
(i) the resulting Combined Loan-to-Value Ratio of such
Mortgage Loan is no higher than the Combined Loan-to-Value Ratio
prior
to such refinancing;
(ii) the interest rate, or, in the case of an adjustable
rate related First Lien Mortgage Loan, the maximum interest
rate, for
the loan evidencing the refinanced senior lien is no more than
2.0%
higher than the interest rate or the maximum interest rate, as
the case
may be, on the existing First Lien Mortgage Loan immediately
prior to
the date of such refinancing; and
(iii) the loan evidencing the refinanced senior lien is not
subject to negative amortization.
Section 3.02 SUBSERVICING AGREEMENTS BETWEEN THE SERVICER
AND
SUBSERVICERS. (a) The Servicer may enter into subservicing
agreements with
subservicers (each, a "Subservicer"), for the servicing and
administration of
the Mortgage Loans ("Subservicing Agreements").
(b) Each Subservicer shall be (i) authorized to transact
business in the state or states in which the related Mortgaged
Properties it is
to service are situated, if and to the extent required by
applicable law to
enable the Subservicer to perform its obligations hereunder and
under the
Subservicing Agreement, (ii) an institution approved as a
mortgage loan
originator by the Federal Housing Administration or an
institution that has
deposit accounts insured by the FDIC and (iii) a Freddie Mac or
Fannie Mae
approved mortgage servicer. Each Subservicing Agreement must
impose on the
Subservicer requirements conforming to the provisions set forth
in Section 3.08
and provide for servicing of the Mortgage Loans consistent with
the terms of
this Agreement. The Servicer will examine each Subservicing
Agreement and will
be familiar with the terms thereof. The terms of any
Subservicing Agreement will
not be inconsistent with any of the provisions of this
Agreement. The Servicer
and the Subservicers may enter into and make amendments to the
Subservicing
Agreements or enter into different forms of Subservicing
Agreements; provided,
however, that any such amendments or different forms shall be
consistent with
and not violate the provisions of this Agreement, and that no
such amendment or
different form shall be made or entered into which could be
reasonably expected
to be materially adverse to the interests of the Trustee,
without the consent of
the Trustee. Any variation without the consent of the Trustee
from the
provisions set forth in Section 3.08 relating to insurance
or
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priority requirements of Subservicing Accounts, or credits and
charges to the
Subservicing Accounts or the timing and amount of remittances by
the
Subservicers to the Servicer, are conclusively deemed to be
inconsistent with
this Agreement and therefore prohibited. The Servicer shall
deliver to the
Trustee and the Depositor copies of all Subservicing Agreements,
and any
amendments or modifications thereof, promptly upon the
Servicer's execution and
delivery of such instruments.
(c) As part of its servicing activities hereunder, the
Servicer (except as otherwise provided in the last sentence of
this paragraph),
for the benefit of the Trustee, shall enforce the obligations of
each
Subservicer under the related Subservicing Agreement, including,
without
limitation, any obligation to make advances in respect of
delinquent payments as
required by a Subservicing Agreement. Such enforcement,
including, without
limitation, the legal prosecution of claims, termination of
Subservicing
Agreements, and the pursuit of other appropriate remedies, shall
be in such form
and carried out to such an extent and at such time as the
Servicer, in its good
faith business judgment, would require were it the owner of the
related Mortgage
Loans. The Servicer shall pay the costs of such enforcement at
its own expense,
and shall be reimbursed therefor only (i) from a general
recovery resulting from
such enforcement, to the extent, if any, that such recovery
exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a
specific recovery of
costs, expenses or attorneys' fees against the party against
whom such
enforcement is directed.
Section 3.03 SUCCESSOR SUBSERVICERS. The Servicer shall be
entitled to terminate any Subservicing Agreement and the rights
and obligations
of any Subservicer pursuant to any Subservicing Agreement in
accordance with the
terms and conditions of such Subservicing Agreement. In the
event of termination
of any Subservicer, all servicing obligations of such
Subservicer shall be
assumed simultaneously by the Servicer without any act or deed
on the part of
such Subservicer or the Servicer, and the Servicer either shall
service directly
the related Mortgage Loans or shall enter into a Subservicing
Agreement with a
successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that
such agreement may be immediately terminated by the Depositor or
the Trustee
without fee, in accordance with the terms of this Agreement, in
the event that
the Servicer shall, for any reason, no longer be the Servicer
(including
termination due to an Event of Default).
Section 3.04 LIABILITY OF THE SERVICER. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement
relating to
agreements or arrangements between the Servicer and a
Subservicer or reference
to actions taken through a Subservicer or otherwise, the
Servicer shall remain
obligated and primarily liable to the Trustee for the servicing
and
administering of the Mortgage Loans in accordance with the
provisions of Section
3.01 without diminution of such obligation or liability by
virtue of such
Subservicing Agreements or arrangements or by virtue of
indemnification from the
Subservicer and to the same extent and under the same terms and
conditions as if
the Servicer alone were servicing and administering such
Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a
Subservicer for
indemnification of the Servicer by such Subservicer and nothing
contained in
this Agreement shall be deemed to limit or modify such
indemnification.
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Section 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN
SUBSERVICERS
AND THE TRUSTEE. Any Subservicing Agreement that may be entered
into and any
transactions or services relating to the Mortgage Loans
involving a Subservicer
in its capacity as such shall be deemed to be between the
Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer)
shall not be deemed
a party thereto and shall have no claims, rights, obligations,
duties or
liabilities with respect to the Subservicer except as set forth
in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to
any Subservicer,
irrespective of whether the Servicer's compensation pursuant to
this Agreement
is sufficient to pay such fees.
Section 3.06 ASSUMPTION OR TERMINATION OF SUBSERVICING
AGREEMENTS BY TRUSTEE. In the event the Servicer at any time
shall for any
reason no longer be the Servicer (including by reason of the
occurrence of an
Event of Default), the Trustee, or its designee, or the
successor Servicer if
the successor Servicer is not the Trustee, shall thereupon
assume all of the
rights and obligations of the Servicer under each Subservicing
Agreement that
the Servicer may have entered into, with copies thereof provided
to the Trustee
prior to the Trustee assuming such rights and obligations,
unless the Trustee
elects to terminate any Subservicing Agreement in accordance
with its terms as
provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the
successor servicer shall be deemed, subject to Section 3.03, to
have assumed all
of the Servicer's interest therein and to have replaced the
Servicer as a party
to each Subservicing Agreement to which the predecessor Servicer
was a party to
the same extent as if each Subservicing Agreement had been
assigned to the
assuming party, except that (i) the Servicer shall not thereby
be relieved of
any liability or obligations under any Subservicing Agreement
that arose before
it ceased to be the Servicer and (ii) none of the Depositor, the
Trustee, their
designees or any successor to the Servicer shall be deemed to
have assumed any
liability or obligation of the Servicer that arose before it
ceased to be the
Servicer.
The Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records
relating to
each Subservicing Agreement and the Mortgage Loans then being
serviced by it and
an accounting of amounts collected and held by or on behalf of
it, and otherwise
use its best efforts to effect the orderly and efficient
transfer of the
Subservicing Agreements to the assuming party.
Section 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.
(a)
The Servicer shall make reasonable efforts to collect all
payments called for
under the terms and provisions of the Mortgage Loans and shall,
to the extent
such procedures shall be consistent with this Agreement and the
terms and
provisions of any applicable insurance policies, follow such
collection
procedures as it would follow with respect to mortgage loans
comparable to the
Mortgage Loans and held for its own account. Consistent with the
foregoing and
Accepted Servicing Practices, the Servicer may (i) waive any
late payment charge
or, if applicable, any penalty interest, or (ii) extend the due
dates for the
Scheduled Payments due on a Mortgage Note for a period of not
greater than 180
days; provided, that any extension pursuant to clause (ii) above
shall not
affect the amortization schedule of any Mortgage Loan for
purposes of any
computation hereunder, except as provided below. In the event of
any such
arrangement pursuant to clause (ii) above, the Servicer shall
make timely
advances on such Mortgage Loan
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during such extension to the extent required by Section 4.01 and
in accordance
with the amortization schedule of such Mortgage Loan without
modification
thereof by reason of such arrangements, subject to Section
4.01(d) pursuant to
which the Servicer shall not be required to make any such
advances that are
Nonrecoverable P&I Advances. Notwithstanding the foregoing,
in the event that
any Mortgage Loan is in default or in the judgment of the
applicable Servicer,
such default is reasonably foreseeable, the Servicer, consistent
with the
standards set forth in Section 3.01, may also waive, modify or
vary any term of
such Mortgage Loan (including modifications that would change
the Mortgage
Interest Rate, forgive the payment of principal or interest,
extend the final
maturity date of such Mortgage Loan or waive, in whole or in
part, a Prepayment
Premium), accept payment from the related Mortgagor of an amount
less than the
Stated Principal Balance in final satisfaction of such Mortgage
Loan, or consent
to the postponement of strict compliance with any such term or
otherwise grant
indulgence to any Mortgagor (any and all such waivers,
modifications, variances,
forgiveness of principal or interest, postponements, or
indulgences collectively
referred to herein as "Forbearance"); provided, however, that
the Servicer's
approval of a modification of a Due Date shall not be considered
a modification
for purposes of this sentence; and provided, further, that the
final maturity
date of any Mortgage Loan may not be extended beyond the Final
Scheduled
Distribution Date for the Offered Certificates and no such
modification will be
granted without the prior consent of the Mortgage Pool Insurer
if so required in
the related Mortgage Pool Insurance Policy. The Servicer's
analysis supporting
any Forbearance and the conclusion that any Forbearance meets
the standards of
Section 3.01 shall be reflected in writing in the applicable
Servicing File or
on the Servicer's servicing records. In addition,
notwithstanding the foregoing,
the Servicer may also waive (or permit a Subservicer to waive),
in whole or in
part, a Prepayment Premium if such waiver would, in the
applicable Servicer's
judgment, maximize recoveries on the related Mortgage Loan or if
such Prepayment
Premium is (i) not permitted to be collected by applicable law,
or the
collection thereof or of a similar type of prepayment premium
would be
considered "predatory" or "illegal" pursuant to written guidance
published by
any applicable federal, state or local regulatory authority
having jurisdiction
over such matters or has been challenged by any such authority,
(ii) there is a
certified class action in which a similar type of prepayment
premium is being
challenged or (iii) the enforceability thereof is limited (1) by
bankruptcy,
insolvency, moratorium, receivership or other similar laws
relating to
creditor's rights or (2) due to acceleration in connection with
a foreclosure or
other involuntary payment. If a Prepayment Premium is waived
other than as
permitted in this Section 3.07(a), then the Servicer is required
to pay the
amount of such waived Prepayment Premium, for the benefit of the
Holders of the
Class P Certificates, by depositing such amount into the
Collection Account
together with and at the time that the amount prepaid on the
related Mortgage
Loan is required to be deposited into the Collection Account;
provided, however,
that the Servicer shall not have an obligation to pay the amount
of any
uncollected Prepayment Premium if the failure to collect such
amount is the
direct result of inaccurate or incomplete information on the
Mortgage Loan
Schedule in effect at such time.
(b) The Servicer shall give notice to the Trustee, each
Rating Agency and the Depositor of any proposed change of the
location of the
Collection Account within a reasonable period of time prior to
any change
thereof.
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Section 3.08 SUBSERVICING ACCOUNTS. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a
Subservicing Agreement,
the Subservicer will be required to establish and maintain one
or more accounts
(collectively, the "Subservicing Account"). The Subservicing
Account shall be an
Eligible Account and shall otherwise be acceptable to the
Servicer. The
Subservicer shall deposit in the clearing account (which account
must be an
Eligible Account) in which it customarily deposits payments and
collections on
mortgage loans in connection with its mortgage loan servicing
activities on a
daily basis, and in no event more than one Business Day after
the Subservicer's
receipt thereof, all proceeds of Mortgage Loans received by the
Subservicer less
its servicing compensation to the extent permitted by the
Subservicing
Agreement, and shall thereafter deposit such amounts in the
Subservicing
Account, in no event more than two Business Days after the
deposit of such funds
into the clearing account. The Subservicer shall thereafter
deposit such
proceeds in the Collection Account of the Servicer or remit such
proceeds to the
Servicer for deposit in the Collection Account not later than
two Business Days
after the deposit of such amounts in the Subservicing Account.
For purposes of
this Agreement, the Servicer shall be deemed to have received
payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR
ITEMS; ESCROW ACCOUNTS. To the extent the related Mortgage Loan
provides for
Escrow Payments, the Servicer shall establish and maintain, or
cause to be
established and maintained, one or more accounts (the "Escrow
Accounts"), which
shall be Eligible Accounts. The Servicer shall deposit in the
clearing account
(which account must be an Eligible Account) in which it
customarily deposits
payments and collections on mortgage loans in connection with
its mortgage loan
servicing activities on a daily basis, and in no event more than
one Business
Day after the Servicer's receipt thereof, all collections from
the Mortgagors
(or related advances from Subservicers) for the payment of
taxes, assessments,
hazard insurance premiums and comparable items for the account
of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans
and shall
thereafter deposit such Escrow Payments in the Escrow Accounts,
in no event more
than two Business Days after the deposit of such funds in the
clearing account,
for the purpose of effecting the payment of any such items as
required under the
terms of this Agreement. Withdrawals of amounts from an Escrow
Account may be
made only to (i) effect payment of taxes, assessments, fire and
hazard insurance
premiums, condominium charges and comparable items; (ii)
reimburse the Servicer
(or a Subservicer to the extent provided in the related
Subservicing Agreement)
out of related collections for any advances made pursuant to
Section 3.01 (with
respect to taxes and assessments) and Section 3.13 (with respect
to hazard
insurance); (iii) refund to Mortgagors any sums as may be
determined to be
overages; (iv) apply to the restoration or repair of the
Mortgaged Property in
accordance with the Section 3.13; (v) transfer to the Collection
Account and
application to reduce the principal balance of the Mortgage Loan
in accordance
with the terms of the related Mortgage and Mortgage Note; (vi)
pay interest to
the Servicer and, if required and as described below, to
Mortgagors on balances
in the Escrow Account; (vii) clear and terminate the Escrow
Account at the
termination of the Servicer's obligations and responsibilities
in respect of the
Mortgage Loans under this Agreement; or (viii) recover amounts
deposited in
error or for which amounts previously deposited are returned due
to a "not
sufficient funds" or other denial of payment by the related
Mortgagor's banking
institution. As part of its servicing duties, the Servicer or
Subservicers shall
pay to the Mortgagors interest on funds in Escrow Accounts, to
the extent
required by law
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and, to the extent that interest earned on funds in the Escrow
Accounts is
insufficient, to pay such interest from its or their own funds,
without any
reimbursement therefor. To the extent that a Mortgage does not
provide for
Escrow Payments and provided that the Servicer has had the later
of (i) five (5)
Business Days written notice prior to such time period and (ii)
thirty (30) days
after the Servicer began servicing such Mortgage Loan prior to
such time period,
the Servicer shall advance such taxes to avoid loss of the
Mortgaged Property
(provided that the Servicer has not determined that such
Servicing Advance would
be a Nonrecoverable Servicing Advance). The Servicer assumes
full responsibility
for the payment of all such bills within such time and shall
effect payments of
all such bills irrespective of the Mortgagor's faithful
performance in the
payment of same or the making of the Escrow Payments and shall
make advances
from its own funds to effect such payments; provided, however,
that such
advances are deemed to be Servicing Advances.
Section 3.10 COLLECTION ACCOUNT. (a) On behalf of the
Trustee,
the Servicer shall establish and maintain, or cause to be
established and
maintained, one or more segregated Eligible Accounts (each such
account or
accounts, a "Collection Account"), held in trust for the benefit
of the Trustee.
Funds in the Collection Account shall not be commingled with any
other funds of
the Servicer. On behalf of the Trustee, the Servicer shall
deposit or cause to
be deposited in the clearing account (which account must be an
Eligible Account)
in which it customarily deposits payments and collections on
mortgage loans in
connection with its mortgage loan servicing activities on a
daily basis, and in
no event more than one Business Day after the Servicer's receipt
thereof, and
shall thereafter deposit in the Collection Account, in no event
more than two
Business Days after the deposit of such funds into the clearing
account, as and
when received or as otherwise required hereunder, the following
payments and
collections received or made by it subsequent to the Cut-off
Date (other than in
respect of principal or interest on the related Mortgage Loans
due on or before
the Cut-off Date), or payments (other than Principal
Prepayments) received by it
on or prior to the related Cut-off Date but allocable to a Due
Period subsequent
thereto:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds (other than any proceeds under
the Mortgage Pool Insurance Policy) and Condemnation Proceeds
(to the
extent such Insurance Proceeds and Condemnation Proceeds are not
to be
applied to the restoration of the related Mortgaged Property
or
released to the related Mortgagor in accordance with the
express
requirements of law or in accordance with prudent and
customary
servicing practices), Net Recoveries and all Liquidation
Proceeds;
(iv) any amounts required to be deposited pursuant to
Section 3.12 in connection with any losses realized on
Permitted
Investments with respect to funds held in the Collection
Account;
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(v) any amounts required to be deposited by the Servicer
pursuant to the second paragraph of Section 3.13(a) in respect
of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with this Agreement; and
(vii) all Prepayment Premiums collected by the Servicer.
The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed
that, without
limiting the generality of the foregoing, any Prepayment
Interest Excess and
payments in the nature of late payment charges, NSF fees,
reconveyance fees,
assumption fees and other similar fees and charges need not be
deposited by the
Servicer in the Collection Account and shall, upon collection,
belong to the
Servicer as additional compensation for its servicing
activities. In the event
the Servicer shall deposit in the Collection Account any amount
not required to
be deposited therein, it may at any time withdraw such amount
from the
Collection Account, any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in
Permitted Investments in accordance with the provisions set
forth in Section
3.12. The Servicer shall give notice to the Trustee and the
Depositor of the
location of the Collection Account maintained by it when
established and prior
to any change thereof.
Section 3.11 WITHDRAWALS FROM THE COLLECTION ACCOUNT. (a)
The
Servicer shall, from time to time, make withdrawals from the
Collection Account
for any of the following purposes or as described in Section
4.01:
(i) on or prior to the Remittance Date, to remit to the
Trustee (A) the Trustee Fee with respect to such Distribution
Date and
(B) all Available Funds in respect of the related Distribution
Date
together with all amounts representing Prepayment Premiums from
the
Mortgage Loans received during the related Prepayment
Period;
(ii) to reimburse the Servicer for P&I Advances, but
only
to the extent of amounts received which represent Late
Collections (net
of the related Servicing Fees) of Scheduled Payments on Mortgage
Loans
with respect to which such P&I Advances were made in
accordance with
the provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (A) any unpaid
Servicing Fees (including such unpaid Servicing Fees as provided
in
Section 3.15) or (B) any unreimbursed Servicing Advances with
respect
to each Mortgage Loan serviced by the Servicer, but only to the
extent
of any Late Collections, Liquidation Proceeds, Condemnation
Proceeds,
Insurance Proceeds (including any proceeds under the Mortgage
Pool
Insurance Policy) or other amounts as may be collected by the
Servicer
from a Mortgagor, or otherwise received with respect to such
Mortgage
Loan (or the related REO Property);
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(iv) to pay to the Servicer as servicing compensation (in
addition to the Servicing Fee) on the Remittance Date any
interest or
investment income earned on funds deposited in the Collection
Account;
(v) to pay the Responsible Party or the Depositor, as
applicable, with respect to each Mortgage Loan that has
previously been
repurchased or replaced pursuant to this Agreement all amounts
received
thereon subsequent to the date of purchase or substitution, as
the case
may be;
(vi) to reimburse the Servicer for (A) any P&I Advance
or
Servicing Advance previously made which the Servicer has
determined to
be a Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance in
accordance with the provisions of Section 4.01 and (B) any
unpaid
Servicing Fees to the extent not recoverable from Liquidation
Proceeds,
Insurance Proceeds (including any proceeds under the Mortgage
Pool
Insurance Policy) or other amounts received with respect to the
related
Mortgage Loan under Section 3.11(a)(iii);
(vii) to pay, or to reimburse the Servicer for advances in
respect of, expenses incurred in connection with any Mortgage
Loan
serviced by the Servicer pursuant to Section 3.15;
(viii) to reimburse the Servicer, the Depositor or the
Trustee for expenses incurred by or reimbursable to the
Servicer, the
Depositor or the Trustee, as the case may be, pursuant to
Section 6.03,
Section 7.02 or Section 8.05;
(ix) to reimburse the Servicer or the Trustee, as the case
may be, for expenses reasonably incurred in respect of the
breach or
defect giving rise to the repurchase obligation under Section
2.03 of
this Agreement that were included in the Repurchase Price of
the
Mortgage Loan, including any expenses arising out of the
enforcement of
the repurchase obligation, to the extent not otherwise paid
pursuant to
the terms hereof;
(x) to withdraw any amounts deposited in the Collection
Account in error or for which amounts previously deposited are
returned
due to a "not sufficient funds" or other denial of payment by
the
related Mortgagor's banking institution;
(xi) to withdraw any amounts held in the Collection
Account and not required to be remitted to the Trustee on
the
Remittance Date occurring in the month in which such amounts
are
deposited into the Collection Account, to reimburse the Servicer
for
unreimbursed P&I Advances;
(xii) to invest funds in Permitted Investments in
accordance with Section 3.12;
(xiii) to pay itself any Prepayment Interest Excess (to the
extent deposited in the Collection Account by the Servicer);
and
(xiv) to clear and terminate the Collection Account upon
termination of this Agreement.
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To the extent that the Servicer does not timely make the
remittance referred to in clause (i) above, the Servicer shall
pay the Trustee
for the account of the Trustee interest on any amount not timely
remitted at the
prime rate, from and including the applicable Remittance Date to
but excluding
the date such remittance is actually made.
(b) the Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the
purpose of
justifying any withdrawal from the Collection Account, to the
extent held by or
on behalf of it, pursuant to subclauses (a)(ii), (iii), (iv),
(v), (vi), (vii),
(viii) and (ix) above. The Servicer shall provide written
notification to the
Depositor, on or prior to the next succeeding Remittance Date,
upon making any
withdrawals from the related Collection Account pursuant to
subclause (a)(vi)
above.
Section 3.12 INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT
AND
THE DISTRIBUTION ACCOUNT. (a) The Servicer may invest the funds
in the
Collection Account and the Trustee may invest funds in the
Distribution Account
during the Trustee Float Period, and shall (except during the
Trustee Float
Period), invest such funds in the Distribution Account at the
direction of the
Depositor (for purposes of this Section 3.12, each of the
Collection Account and
the Distribution Accounts are referred to as an "Investment
Account"), in one or
more Permitted Investments bearing interest or sold at a
discount, and maturing,
unless payable on demand, no later than the Business Day on
which such funds are
required to be withdrawn from such account pursuant to this
Agreement (except
for investments made at the Depositor's direction, which shall
mature no later
than the Business Day immediately preceding the date of required
withdrawal).
All such Permitted Investments shall be held to maturity, unless
payable on
demand. Any investment of funds in an Investment Account shall
be made in the
name of the Trustee. The Trustee shall be entitled to sole
possession (except
with respect to investment direction of funds held in the
related Account and
any income and gain realized thereon in any Account other than
the Distribution
Account during the Trustee Float Period) over each such
investment, and any
certificate or other instrument evidencing any such investment
shall be
delivered directly to the Trustee or its agent, together with
any document of
transfer necessary to transfer title to such investment to the
Trustee. In the
event amounts on deposit in an Investment Account are at any
time invested in a
Permitted Investment payable on demand, the Trustee may:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder that
such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter
on deposit in the Investment Account.
(b) All income and gain realized from the investment of
funds deposited in the Collection Account and Escrow Account
held by or on
behalf of the Servicer, shall be for the benefit of the Servicer
and shall be
subject to its withdrawal in the manner set forth in Section
3.11. Any other
benefit derived from the Collection Account and Escrow
Account
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associated with the receipt, disbursement and accumulation of
principal,
interest, taxes, hazard insurance, mortgage blanket insurance,
and like sources,
shall accrue to the benefit of the Servicer, except that the
Servicer shall not
realize any economic benefit from any forced charging of
services except as
permitted by applicable law. The Servicer shall deposit in the
Collection
Account and Escrow Account the amount of any loss of principal
incurred in
respect of any such Permitted Investment made with funds in such
accounts
immediately upon realization of such loss.
(c) All income and gain realized from the investment of
funds deposited in the Distribution Account held by the Trustee,
shall be for
the benefit of the Depositor (except for any income or gain
realized from the
investment of funds on deposit in the Distribution Account
during the Trustee
Float Period, which shall be for the benefit of the Trustee).
The Depositor
shall deposit in the Distribution Account (except with respect
to the Trustee
Float Period, in which case the Trustee shall deposit) the
amount of any loss of
principal incurred in respect of any such Permitted Investment
made with funds
in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this
Agreement, if any default occurs in the making of a payment due
under any
Permitted Investment, or if a default occurs in any other
performance required
under any Permitted Investment, the Trustee shall take such
action as may be
appropriate to enforce such payment or performance, including
the institution
and prosecution of appropriate proceedings.
(e) The Trustee or its Affiliates are permitted to
receive additional compensation that could be deemed to be in
the Trustee's
economic self-interest for (i) serving as investment adviser,
administrator,
shareholder, servicing agent, custodian or sub-custodian with
respect to certain
of the Permitted Investments, (ii) using Affiliates to effect
transactions in
certain Permitted Investments and (iii) effecting transactions
in certain
Permitted Investments.
(f) The Trustee shall not be liable for the amount of any
loss incurred with respect of any investment (except that during
the Trustee
Float Period, it will be responsible for reimbursing the Trust
for such loss) or
lack of investment of funds held in any Investment Account or
the Distribution
Account if made in accordance with this Section 3.12.
Section 3.13 MAINTENANCE OF HAZARD INSURANCE, ERRORS AND
OMISSIONS AND FIDELITY COVERAGE. (a) The Servicer shall obtain
and maintain a
blanket policy insuring against losses arising from fire and
hazards covered
under extended coverage on all of the Mortgage Loans, which
policy shall provide
coverage in an amount which is at least equal to the least of
(i) the
outstanding principal balance of such Mortgage Loan, (ii) the
amount necessary
to fully compensate for any damage or loss to the improvements
that are a part
of such property on a replacement cost basis, (iii) the maximum
insurable value
of the improvements which are a part of such Mortgaged Property,
and (iv) the
amount determined by applicable federal or state law, in each
case in an amount
not less than such amount as is necessary to avoid the
application of any
coinsurance clause contained in the related hazard insurance
policy. Any amounts
to be collected by the Servicer under any such policy (other
than amounts to be
applied to the restoration or repair of the property subject to
the related
Mortgage or amounts to be released to
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the Mortgagor in accordance with the procedures that the
Servicer would follow
in servicing loans held for its own account, subject to the
terms and conditions
of the related Mortgage and Mortgage Note) shall be deposited in
the Collection
Account, subject to withdrawal pursuant to Section 3.11.
In the event that such policy contains a deductible clause,
the Servicer shall, in the event that there shall not have been
maintained on
the related Mortgaged Property or REO Property a standard hazard
insurance
policy and there shall have been one or more losses which would
have been
covered by such policy, the Servicer shall deposit to the
Collection Account
from its own funds the amount above $1,500 that is not otherwise
payable under
the blanket policy because of such deductible clause. In
connection with its
activities as administrator and servicer of the Mortgage Loans,
the Servicer
agrees to prepare and present, on behalf of itself, the Trustee
claims under any
such blanket policy in a timely fashion in accordance with the
terms of such
policy.
(b) The Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors
and omissions
for failure in the performance of the Servicer's obligations
under this
Agreement, which policy or policies shall be in such form and
amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were
the purchaser of
the Mortgage Loans, unless the Servicer has obtained a waiver of
such
requirements from Fannie Mae or Freddie Mac. The Servicer shall
also maintain a
fidelity bond in the form and amount that would meet the
requirements of Fannie
Mae or Freddie Mac, unless the Servicer has obtained a waiver of
such
requirements from Fannie Mae or Freddie Mac. The Servicer shall
provide the
Trustee upon request with copies of insurance certificates for
any such
insurance policies and fidelity bond. The Servicer shall be
deemed to have
complied with this provision if an Affiliate of the Servicer has
such errors and
omissions and fidelity bond coverage and, by the terms of such
insurance policy
or fidelity bond, the coverage afforded thereunder extends to
the Servicer. The
Servicer shall provide the Trustee upon request with copies of
insurance
certificates indicating that any such errors and omissions
policy and fidelity
bond shall by its terms not be cancelable without thirty days'
prior written
notice to the Trustee.. The Servicer shall also cause each
Subservicer to
maintain a policy of insurance covering errors and omissions and
a fidelity bond
which would meet such requirements.
Section 3.14 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS. The Servicer will, to the extent it has knowledge of
any conveyance
or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not
the Mortgagor
remains or is to remain liable under the Mortgage Note and/or
the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage
Loan under the
"due-on-sale" clause, if any, applicable thereto; provided,
however, that the
Servicer shall not be required to take such action if, in its
sole business
judgment, the Servicer believes it is not in the best interests
of the Trust
Fund and shall not exercise any such rights if prohibited by law
from doing so.
If the Servicer reasonably believes it is unable under
applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set
forth in the
proviso to the preceding sentence apply, the Servicer will, with
the prior
written consent of the Mortgage Pool Insurer, enter into an
assumption and
modification agreement from or with the person to whom such
property has been
conveyed or is proposed to be conveyed, pursuant to which such
person
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becomes liable under the Mortgage Note, and, to the extent
permitted by
applicable state law, the Mortgagor remains liable thereon. The
Servicer is also
authorized to enter into a substitution of liability agreement
with such person,
pursuant to which the original Mortgagor is released from
liability and such
person is substituted as the Mortgagor and becomes liable under
the Mortgage
Note; provided, that no such substitution shall be effective
unless such person
satisfies the underwriting criteria of the Servicer and such
substitution is in
the best interest of the Certificateholders as determined by the
Servicer. In
connection with any assumption, modification or substitution,
the Servicer shall
apply such underwriting standards and follow such practices and
procedures as
shall be normal and usual in its general mortgage servicing
activities and as it
applies to other mortgage loans owned solely by it. The Servicer
shall not take
or enter into any assumption and modification agreement,
however, unless (to the
extent practicable in the circumstances) it shall have received
confirmation, in
writing, of the continued effectiveness of any applicable hazard
insurance
policy, or a new policy meeting the requirements of this Section
is obtained.
Any fee collected by the Servicer in respect of an assumption or
substitution of
liability agreement will be retained by the Servicer as
additional servicing
compensation. In connection with any such assumption, no
material term of the
Mortgage Note (including but not limited to the related Mortgage
Interest Rate
and the amount of the Scheduled Payment) may be amended or
modified, except as
otherwise required pursuant to the terms thereof or as otherwise
permitted by
this Agreement. The Servicer shall notify the Trustee that any
such
substitution, modification or assumption agreement has been
completed by
forwarding to the Trustee the executed original of such
substitution or
assumption agreement, which document shall be added to the
related Mortgage File
and shall, for all purposes, be considered a part of such
Mortgage File to the
same extent as all other documents and instruments constituting
a part thereof.
Notwithstanding the foregoing paragraph or any other
provision
of this Agreement, the Servicer shall not be deemed to be in
default, breach or
any other violation of its obligations hereunder by reason of
any assumption of
a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any
assumption which the Servicer may be restricted by law from
preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term
"assumption" is
deemed to also include a sale (of the Mortgaged Property)
subject to the
Mortgage that is not accompanied by an assumption or
substitution of liability
agreement.
Section 3.15 REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a)
The Servicer shall use its commercially reasonable efforts,
consistent with
Accepted Servicing Practices and the requirements under the
Mortgage Pool
Insurance Policy, to foreclose upon or otherwise comparably
convert (which may
include an acquisition of REO Property) the ownership of
properties securing
such of the Mortgage Loans as come into and continue in default
and as to which
no satisfactory arrangements can be made for collection of
delinquent payments
pursuant to Section 3.07, and which are not released from this
Agreement
pursuant to any other provision hereof. The Servicer shall use
reasonable
efforts to realize upon such defaulted Mortgage Loans if the
Servicer believes
there will be a Significant Net Recovery in such manner as will
maximize the
receipt of principal and interest by the Trustee, taking into
account, among
other things, the timing of foreclosure proceedings. The
foregoing is subject to
the provisions that, in any case in which a Mortgaged Property
shall have
suffered damage from an uninsured cause, the Servicer shall not
be required to
expend its own funds toward the restoration of such property
unless it
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shall determine in its sole discretion (i) that such restoration
will increase
the net proceeds of liquidation of the related Mortgage Loan to
the Trustee,
after reimbursement to itself for such expenses, and (ii) that
such expenses
will be recoverable by the Servicer through Insurance Proceeds
(including any
proceeds under the Mortgage Pool Insurance Policy), Condemnation
Proceeds or
Liquidation Proceeds from the related Mortgaged Property, as
contemplated in
Section 3.11. The Servicer shall be responsible for all other
costs and expenses
incurred by it in any such proceedings; provided, however, that
it shall be
entitled to reimbursement thereof from the related property, as
contemplated in
Section 3.11.
In the event that the related First Lien Mortgage Loan is
not
being serviced by the Servicer, the Servicer shall have no
liability for any
losses resulting from a foreclosure on a Mortgage Loan in
connection with the
foreclosure on the related First Lien Mortgage Loan where the
Servicer did not
receive notice or otherwise had no actual knowledge regarding
such foreclosure
on the related First Lien Mortgage Loan; provided, however, if
the Servicer is
either notified or has actual knowledge that any holder of a
First Lien Mortgage
Loan intends to accelerate the obligations secured by the First
Lien Mortgage
Loan, or that any such holder intends to declare a default under
the mortgage or
promissory note secured thereby, or has filed or intends to file
an election to
have the related Mortgaged Property sold or foreclosed, the
Servicer shall take,
on behalf of the Trust, whatever actions are necessary to
protect the interests
of the Trust in accordance with Accepted Servicing Practices and
the REMIC
Provisions if the Servicer believes there will be a Significant
Net Recovery.
The Servicer shall not be required to make a Servicing Advance
pursuant to
Section 4.01 with respect thereto except to the extent that it
determines in its
reasonable good faith judgment that such advance would be
recoverable from
Liquidation Proceeds on the related Mortgage Loan and in no
event in an amount
that is greater than the then outstanding principal balance of
the related
Mortgage Loan. The Servicer shall thereafter take such action as
is reasonably
necessary to recover any amount so advanced and to otherwise
reimburse itself as
a Servicing Advance from the Collection Account pursuant to
Section 3.11.
The proceeds of any Liquidation Event, as well as any
recovery
resulting from a partial collection of Insurance Proceeds,
Condemnation Proceeds
or Liquidation Proceeds, will be applied in the following order
of priority:
first, to reimburse the Servicer or any Subservicer for any
related unreimbursed
Servicing Advances, pursuant to Section 3.11 or 3.17; second, to
reimburse the
Servicer for any related unreimbursed P&I Advances, pursuant
to Section 3.11;
third, to accrued and unpaid interest on the Mortgage Loan, at
the Mortgage
Interest Rate, to the date of the liquidation, or to the Due
Date prior to the
Remittance Date on which such amounts are to be distributed if
not in connection
with a Liquidation Event; and fourth, as a recovery of principal
of the Mortgage
Loan. If the amount of the recovery so allocated to interest is
less than a full
recovery thereof, that amount will be allocated as follows:
first, to unpaid
Servicing Fees; and second, as interest at the Mortgage Interest
Rate (net of
the Servicing Fee Rate). The portion of the recovery so
allocated to unpaid
Servicing Fees shall be reimbursed to the Servicer or any
Subservicer pursuant
to Section 3.11 or 3.17.
The proceeds of any REO Disposition, as well as any income
from an REO Property, will be applied in the following order of
priority: first,
to reimburse the Servicer or any Subservicer for any related
unreimbursed
Servicing Advances, pursuant to Section 3.11 or 3.17;
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second, to unpaid principal on the REO Property (including the
principal portion
of any unreimbursed P&I Advances); and third, to accrued and
unpaid REO Imputed
Interest, at the Mortgage Interest Rate, to the date of the REO
Disposition
(including the interest portion of any unreimbursed P&I
Advances). If the amount
of the recovery so allocated to interest is less than a full
recovery thereof,
that amount will be allocated as follows: first, to unpaid
Servicing Fees; and
second, as interest at the Mortgage Interest Rate (net of the
Servicing Fee
Rate). The portion of the recovery so allocated to unpaid
Servicing Fees shall
be reimbursed to the Servicer or any Subservicer pursuant to
Section 3.11 or
3.17.
The portions of any recovery pursuant to the previous two
paragraphs so allocated to interest at the Mortgage Interest
Rate (net of the
Servicing Fee Rate) and to principal of the Mortgage Loan shall
be applied as
follows: first, to reimburse the Servicer or any Subservicer for
any related
unreimbursed Servicing Advances in accordance with Section 3.11
or 3.17, and
second, to the Trustee in accordance with the provisions of
Section 4.02,
subject to the last paragraph of Section 3.17 with respect to
certain excess
recoveries from an REO Disposition.
(b) Notwithstanding anything to the contrary contained in
this Agreement, with respect to any Mortgage Loan that is one
hundred twenty
(120) days delinquent, the Servicer shall obtain a broker's
price opinion with
respect to the related Mortgaged Property and shall use
reasonable efforts to
obtain a total indebtedness balance (including, but not limited
to, unpaid
principal, interest, escrows, taxes and expenses) for any
related First Lien
Mortgage Loan. The cost of obtaining any such broker's price
opinion shall be
reimbursable to the Servicer as a Servicing Advance pursuant to
Section
3.11(iii) or (vi). After obtaining the related broker's price
opinion, the
Servicer will determine whether any Significant Net Recovery is
possible through
foreclosure proceedings or other liquidation of the related
Mortgaged Property.
If the Servicer determines that (x) no Significant Net Recovery
is the
commercially reasonable outcome or (y) the potential Net
Recoveries are
anticipated to be an amount, determined by the Servicer in its
good faith
judgment and in light of other mitigating circumstances, that is
insufficient to
warrant proceeding through foreclosure or other liquidation of
the related
Mortgaged Property, it may, at its discretion, charge off such
delinquent
Mortgage Loan in accordance with subsections (c) and (d)
below.
(c) If the Servicer determines based on the broker's
price opinion obtained under paragraph (b) above and other
relevant
considerations that (x) no Significant Net Recovery is possible
through
foreclosure proceedings or other liquidation of the related
Mortgaged Property
or (y) the potential Net Recoveries are anticipated to be an
amount, determined
by the Servicer in its good faith judgment and in light of other
mitigating
circumstances, that is insufficient to warrant proceeding
through foreclosure or
other liquidation of the related Mortgaged Property, it will be
obligated to
charge off the related Mortgage Loan at the time such Mortgage
Loan becomes 210
days delinquent. Once a Mortgage Loan has been charged off, the
Servicer will
discontinue making P&I Advances, the Servicer will not be
entitled to any
additional servicing compensation (except as described in
subsection (d) of this
Section 3.15), the Charged Off Loan will give rise to a Realized
Loss, and the
Servicer will follow the procedures described in paragraph (d)
below. If the
Servicer determines that (x) a Significant Net Recovery is the
commercially
reasonable outcome through foreclosure proceedings or other
liquidation of the
Mortgaged Property and (y) the potential Net Recoveries are
anticipated to be
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an amount, determined by the Servicer in its good faith judgment
and in light of
other mitigating circumstances, that is sufficient to warrant
proceeding through
foreclosure or other liquidation of the related Mortgaged
Property, the Servicer
may continue to make P&I Advances or Servicing Advances on
the related Mortgage
Loan that has become 210 days delinquent.
(d) Any Charged Off Loan may continue to be serviced by
the Servicer for the Certificateholders using Wilshire Special
Servicing. The
Servicer will accrue, but not be entitled to any Servicing Fees
and
reimbursement of expenses in connection with such Charged Off
Loans, except to
the extent of funds available from the aggregate amount of
recoveries on all
Charged Off Loans. Such aggregate recovery amounts on Charged
Off Loans shall be
paid to the Servicer first, as reimbursement of any outstanding
and unpaid
expenses, and second, as any accrued and unpaid Servicing Fees.
The Servicer
will only be entitled to previously accrued Servicing Fees and
expenses on any
such Charged Off Loans. The Servicer will not be entitled to
receive any future
unaccrued Servicing Fees or expenses from collections on such
Charged Off Loans.
Any Charged Off Loan serviced by the Servicer using Wilshire
Special Servicing
shall be so serviced until the Release Date described below. Any
Net Recoveries
on such Charged Off Loans received prior to the Release Date
will be included in
Available Funds.
On the date (the "Release Date") which is no more than six
months after the date on which the Servicer begins servicing any
Charged Off
Loans using Wilshire Special Servicing, unless specific Net
Recoveries are
anticipated by the Servicer on a particular Charged Off Loan (in
which case the
Release Date will be delayed until all such specific anticipated
Net Recoveries
are received), such Charged Off Loan will be released from the
Trust Fund, will
no longer be an asset of any REMIC, and will be transferred to
the Class X-1
Certificateholders, without recourse, and thereafter (i) the
Class X-1
Certificateholder will be entitled to any amounts subsequently
received in
respect of any such Released Loans, (ii) the Class X-1
Certificateholder may
designate any servicer to service any such Released Loan and
(iii) the Class X-1
Certificateholder may sell any such Released Loan to a third
party.
Notwithstanding the previous sentence, if at any time after a
Mortgage Loan has
been Charged Off and prior to six months after the date on which
the Servicer
begins servicing such Charged Off Loan using Wilshire Special
Servicing, the
Servicer determines that the commercially reasonable outcome is
that there will
not be any Net Recoveries on such Charged Off Loan under any
circumstances, the
Servicer may release such Charged Off Loan to the Class X-1
Certificateholder in
accordance with the provisions set forth in the previous
sentence.
Notwithstanding the foregoing, the procedures described
above
in this subsection 3.15(d) relating to the treatment of Charged
Off Loans may be
modified at any time at the discretion of the Majority Class
X
Certificateholder, with the good faith agreement of the
Servicer; provided,
however, that in no event shall the Majority Class X
Certificateholder change
the fee structure relating to Charged Off Loans prior to the
Release Date in a
manner that would cause fees to be paid to the Servicer other
than from
recoveries on Charged Off Loans.
The Trustee shall, in order to allocate recoveries and
Realized Losses in accordance with Sections 4.02 and 4.05 hereof
with respect to
Charged Off Loans, review the information provided to the
Trustee by the
Servicer on each Reporting Date in a report in the form of
Exhibit L hereto,
which identifies the Charged Off Loans as of the related Due
Period that the
Servicer will continue to service until the related Release Date
using Wilshire
Special Servicing. The Trustee shall be entitled to rely,
without independent
verification, on the loan level data provided by the Servicer
that identifies
the recovery amounts and the outstanding and unpaid expenses on
any Charged Off
Loan in order to allocate such recoveries and Realized Losses in
accordance with
Sections 4.02 and 4.05.
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(e) Notwithstanding anything to the contrary contained
herein, in connection with a foreclosure or acceptance of a deed
in lieu of
foreclosure, in the event the Servicer has received actual
notice of, or has
actual knowledge of the presence of, hazardous or toxic
substances or wastes on
the related Mortgaged Property, or if the Depositor or the
Trustee otherwise
requests, the Servicer shall cause an environmental inspection
or review of such
Mortgaged Property to be conducted by a qualified inspector.
Upon completion of
the inspection, the Servicer shall promptly provide the Trustee
and the
Depositor, with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the
Servicer shall determine consistent with Accepted Servicing
Practices, to
proceed with respect to the Mortgaged Property. In the event (a)
the
environmental inspection report indicates that the Mortgaged
Property is
contaminated by hazardous or toxic substances or wastes and (b)
the Servicer
determines, consistent with Accepted Servicing Practices, to
proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the
Servicer shall
be reimbursed for all reasonable costs associated with such
foreclosure or
acceptance of a deed in lieu of foreclosure and any related
environmental
clean-up costs, as applicable, from the related Liquidation
Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse the
Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the
Collection
Account pursuant to Section 3.11. In the event the Servicer
determines not to
proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, the
Servicer shall be reimbursed from general collections for all
Servicing Advances
made with respect to the related Mortgaged Property from the
Collection Account
pursuant to Section 3.11. The Trustee shall not be responsible
for any
determination made by the Servicer pursuant to this paragraph or
otherwise.
Section 3.16 RELEASE OF MORTGAGE FILES. (a) Upon the payment
in full of any Mortgage Loan, or the receipt by the Servicer of
a notification
that payment in full shall be escrowed in a manner customary for
such purposes,
the Servicer will, within five (5) Business Days of the payment
in full, notify
the Trustee by a certification (which certification shall
include a statement to
the effect that all amounts received or to be received in
connection with such
payment which are required to be deposited in the Collection
Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing
Officer and shall
request delivery to it of the Custodial File by completing a
Request for
Release. Upon receipt of such certification and Request for
Release, the Trustee
shall promptly release the related Custodial File to the
Servicer within three
(3) Business Days. Any "out-of-pocket" expenses incurred in
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connection with any instrument of satisfaction or deed of
reconveyance shall be
reimbursable to the Servicer as a Servicing Advance.
(b) From time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, including, for
this purpose,
collection under any insurance policy relating to the Mortgage
Loans, the
Trustee shall, upon request of the Servicer and delivery to the
Trustee, of a
Request for Release, release the related Custodial File to the
Servicer, and the
Trustee shall, at the direction of the Servicer, execute such
documents provided
to it as shall be necessary to the prosecution of any such
proceedings and the
Servicer shall retain the Mortgage File in trust for the benefit
of the Trustee.
Such Request for Release shall obligate the Servicer to return
each and every
document previously requested from the Custodial File to the
Trustee when the
need therefor by the Servicer no longer exists, unless the
Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have
been deposited in the Collection Account or the Mortgage File or
such document
has been delivered to an attorney, or to a public trustee or
other public
official as required by law, for purposes of initiating or
pursuing legal action
or other proceedings for the foreclosure of the Mortgaged
Property either
judicially or non-judicially, and the Servicer has delivered to
the Trustee a
certificate of a Servicing Officer certifying as to the name and
address of the
Person to which such Mortgage File or such document was
delivered and the
purpose or purposes of such delivery. Upon receipt of a
certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated
and that all
amounts received or to be received in connection with such
liquidation that are
required to be deposited into the Collection Account have been
so deposited, or
that such Mortgage Loan has become an REO Property, a copy of
the Request for
Release shall be released by the Trustee to the Servicer or its
designee. Upon
receipt of a Request for Release under this Section 3.16, the
Trustee shall
deliver the related Custodial File to the requesting Servicer by
overnight
courier (at the applicable Servicer's expense, which expense
shall be
reimbursable as a Servicing Advance.
Upon written certification of a Servicing Officer, the
Trustee
shall execute and deliver to the Servicer copies of any court
pleadings,
requests for trustee's sale or other documents reasonably
necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property
or to any legal
action brought to obtain judgment against any Mortgagor on the
Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise
available at law
or in equity, or shall exercise and deliver to the Servicer a
power of attorney
sufficient to authorize the Servicer to execute such documents
on its behalf.
Each such certification shall include a request that such
pleadings or documents
be executed by the Trustee and a statement as to the reason such
documents or
pleadings are required and that the execution and delivery
thereof by the
Trustee will not invalidate or otherwise affect the lien of the
Mortgage, except
for the termination of such a lien upon completion of the
foreclosure or
trustee's sale.
Section 3.17 TITLE, CONSERVATION AND DISPOSITION OF REO
PROPERTY. (a) This Section shall apply only to REO Properties
acquired for the
account of the Trustee and shall not apply to any REO Property
relating to a
Mortgage Loan which was purchased or repurchased from the
Trustee pursuant to
any provision hereof. In the event that title to any such REO
Property is
acquired, the Servicer shall cause the deed or certificate of
sale to be issued
in the name of the Trustee, on behalf of the Certificateholders,
or the
Trustee's nominee.
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(b) The Servicer shall manage, conserve, protect and
operate each REO Property for the Trustee solely for the purpose
of its prompt
disposition and sale. The Servicer, either itself or through an
agent selected
by the Servicer, shall manage, conserve, protect and operate the
REO Property in
the same manner that it manages, conserves, protects and
operates other
foreclosed property for its own account, and in the same manner
that similar
property in the same locality as the REO Property is managed.
The Servicer shall
attempt to sell the same (and may temporarily rent the same for
a period not
greater than one year, except as otherwise provided below) on
such terms and
conditions as the Servicer deems to be in the best interest of
the Trustee. (c)
As described in paragraph (h) below, the Servicer shall use its
commercially
reasonable efforts to dispose of the REO Property as soon as
possible and shall
sell such REO Property in any event within three years after
title has been
taken to such REO Property, unless the Servicer determines, and
gives an
appropriate notice to the Trustee to such effect, that a longer
period is
necessary for the orderly liquidation of such REO Property. The
Trustee has no
obligation with respect to REO Dispositions.
(d) The Servicer shall segregate and hold all funds
collected and received in connection with the operation of any
REO Property
separate and apart from its own funds and general assets and
shall deposit such
funds in the Collection Account.
(e) The Servicer shall deposit net of reimbursement to
the Servicer for any related outstanding Servicing Advances and
unpaid Servicing
Fees provided in Section 3.11, or cause to be deposited, on a
daily basis in the
Collection Account all revenues received with respect to the
related REO
Property and shall withdraw therefrom funds necessary for the
proper operation,
management and maintenance of the REO Property.
(f) The Servicer, upon an REO Disposition, shall be
entitled to reimbursement for any related unreimbursed Servicing
Advances as
well as any unpaid Servicing Fees from proceeds received in
connection with the
REO Disposition, as further provided in Section 3.11.
(g) Any net proceeds from an REO Disposition which are in
excess of the unpaid principal balance of the related Mortgage
Loan plus all
unpaid REO Imputed Interest thereon through the date of the REO
Disposition
shall be retained by the Servicer as additional servicing
compensation.
(h) The Servicer shall use its commercially reasonable
efforts to sell, or cause the Subservicer to sell, in accordance
with Accepted
Servicing Practices, any REO Property as soon as possible, but
in no event later
than the conclusion of the third calendar year beginning after
the year of its
acquisition by the REMIC unless (i) the Servicer applies for an
extension of
such period from the Internal Revenue Service pursuant to the
REMIC Provisions
and Code Section 856(e)(3), in which event such REO Property
shall be sold
within the applicable extension period, or (ii) the Servicer
obtains for the
Trustee an Opinion of Counsel, addressed to the Depositor, the
Trustee and the
Servicer, to the effect that the holding by the Lower-Tier REMIC
of such REO
Property subsequent to such period will not result in the
imposition of
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taxes on "prohibited transactions" as defined in Section 860F of
the Code or
cause either Trust REMIC to fail to qualify as a REMIC under the
REMIC
Provisions or comparable provisions of relevant state laws at
any time. The
Servicer shall manage, conserve, protect and operate each REO
Property serviced
by the Servicer for the Trustee solely for the purpose of its
prompt disposition
and sale in a manner which does not cause such REO Property to
fail to qualify
as "foreclosure property" within the meaning of Section
860G(a)(8) or result in
the receipt by the Lower-Tier REMIC of any "income from
non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any
"net income from
foreclosure property" which is subject to taxation under Section
860G(a)(1) of
the Code. Pursuant to its efforts to sell such REO Property, the
Servicer shall
either itself or through an agent selected by the Servicer
protect and conserve
such REO Property in the same manner and to such extent as is
customary in the
locality where such REO Property is located and may, incident to
its
conservation and protection of the interests of the Trustee on
behalf of the
Certificateholders, rent the same, or any part thereof, as the
Servicer deems to
be in the best interest of the Trustee on behalf of the
Certificateholders for
the period prior to the sale of such REO Property; provided,
however, that any
rent received or accrued with respect to such REO Property
qualifies as "rents
from real property" as defined in Section 856(d) of the
Code.
Section 3.18 [RESERVED].
Section 3.19 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE MORTGAGE LOANS. The Servicer shall provide, or
cause the
applicable Subservicer to provide, to the Depositor, the
Trustee, the Mortgage
Pool Insurer, the OTS or the FDIC and the examiners and
supervisory agents
thereof, access to the documentation regarding the Mortgage
Loans in its
possession required by applicable regulations of the OTS. Such
access shall be
afforded without charge, but only upon reasonable and prior
written request and
during normal business hours at the offices of the Servicer.
Nothing in this
Section shall derogate from the obligation of any such party to
observe any
applicable law prohibiting disclosure of information regarding
the Mortgagors
and the failure of any such party to provide access as provided
in this Section
as a result of such obligation shall not constitute a breach of
this Section.
Nothing in this Section 3.19 shall require the Servicer to
collect, create, collate or otherwise generate any information
that it does not
generate in its usual course of business. The Servicer shall not
be required to
make copies of or to ship documents to any Person who is not a
party to this
Agreement, and then only if provisions have been made for the
reimbursement of
the costs thereof. The Servicer, however, may provide copies of
information
provided to the Trustee or Depositor to any party designated by
the Depositor.
Section 3.20 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
THE
SERVICER TO BE HELD FOR THE TRUSTEE. The Servicer shall account
fully to the
Trustee for any funds received by the Servicer or which
otherwise are collected
by the Servicer as Liquidation Proceeds, Condemnation Proceeds
or Insurance
Proceeds (including any proceeds under the Mortgage Pool
Insurance Policy) in
respect of any Mortgage Loan. All Mortgage Files and funds
collected or held by,
or under the control of, the Servicer in respect of any Mortgage
Loans, whether
from the collection of principal and interest payments or from
Liquidation
Proceeds, including, but not limited to, any funds on deposit in
the Collection
Account, shall be held by the Servicer for and
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on behalf of the Trustee and shall be and remain the sole and
exclusive property
of the Trustee, subject to the applicable provisions of this
Agreement. The
Servicer also agrees that it shall not create, incur or subject
any Mortgage
File or any funds that are deposited in the Collection Account,
the Distribution
Account or any Escrow Account, or any funds that otherwise are
or may become due
or payable to the Trustee for the benefit of the
Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of
attachment or other
encumbrance, or assert by legal action or otherwise any claim or
right of setoff
against any Mortgage File or any funds collected on, or in
connection with, a
Mortgage Loan, except, however, that the Servicer shall be
entitled to set off
against and deduct from any such funds any amounts that are
properly due and
payable to the Servicer under this Agreement.
Section 3.21 SERVICING COMPENSATION. (a) As compensation for
its activities hereunder, the Servicer shall, with respect to
each Mortgage
Loan, be entitled to retain from deposits to the Collection
Account and from
Liquidation Proceeds, Insurance Proceeds (including any proceeds
under the
Mortgage Pool Insurance Policy), and Condemnation Proceeds
related to such
Mortgage Loan, the Servicing Fee with respect to each Mortgage
Loan (less any
portion of such amounts retained by any Subservicer). In
addition, the Servicer
shall be entitled to recover unpaid Servicing Fees out of
related Late
Collections and as otherwise permitted in Section 3.11. The
right to receive the
Servicing Fee may not be transferred in whole or in part except
as provided in
Section 10.07 or in connection with the transfer of all of the
Servicer's
responsibilities and obligations under this Agreement; provided,
however, that
the Servicer may pay from the Servicing Fee any amounts due to a
Subservicer
pursuant to a Subservicing Agreement entered into under Section
3.02.
(b) Additional servicing compensation in the form of
Prepayment Interest Excess, proceeds described in Section
3.17(g), assumption or
modification fees, late payment charges, NSF fees, reconveyance
fees and other
similar fees and charges (other than Prepayment Premiums) shall
be retained by
the Servicer only to the extent such fees or charges are
received by the
Servicer. The Servicer shall also be entitled pursuant to
Section 3.09(b)(vi)
and Section 3.11(a)(iv) to withdraw from the Collection Account,
as additional
servicing compensation, interest or other income earned on
deposits therein.
(c) Except as otherwise provided in this Agreement, the
Servicer shall be required to pay all expenses incurred by it in
connection with
its servicing activities hereunder (including payment of
premiums for any
blanket policy insuring against hazard losses pursuant to
Section 3.13,
servicing compensation of the Subservicer to the extent not
retained by it and
the fees and expenses of independent accountants and any agents
appointed by the
Servicer), and shall not be entitled to reimbursement therefor
except as
specifically provided in Section 3.11.
Section 3.22 ANNUAL STATEMENT AS TO COMPLIANCE. The Servicer
will deliver or cause to be delivered to the Depositor, the
Rating Agencies, and
the Trustee on or before March 15th of each calendar year,
commencing in 2006,
an Officer's Certificate stating, as to each signatory thereof,
that (i) a
review of the activities of the Servicer during the preceding
calendar year and
of performance under this Agreement or a similar agreement has
been made under
such officers' supervision, and (ii) to the best of such
officers' knowledge,
based on such review, the Servicer has fulfilled all of its
obligations under
this Agreement throughout such
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year, or, if there has been a default in the fulfillment of any
such obligation,
specifying each such default known to such officers and the
nature and status
thereof. Promptly after receipt of such Officer's Certificate,
the Depositor
shall review such Officer's Certificate and, if applicable,
consult with the
Servicer as to the nature of any defaults by the Servicer in the
fulfillment of
any of the Servicer's obligations. The obligations of the
Servicer under this
Section apply to each Servicer that serviced during the
applicable period,
whether or not the Servicer is acting as a Servicer at the time
such Officer's
Certificate is required to be delivered.
Section 3.23 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS'
SERVICING
STATEMENT; FINANCIAL STATEMENTS. Not later than March 15th of
each calendar year
commencing in 2006, the Servicer, at its expense, shall cause a
nationally
recognized firm of independent certified public accountants to
furnish to the
Depositor, the Rating Agencies, and the Trustee a report stating
that (i) it has
obtained a letter of representation regarding certain matters
from the
management of the Servicer which includes an assertion that the
Servicer has
complied with certain minimum residential mortgage loan
servicing standards,
identified in the Uniform Single Attestation Program for
Mortgage Bankers
established by the Mortgage Bankers Association of America, with
respect to the
servicing of residential mortgage loans during the most recently
completed
calendar year and (ii) on the basis of an examination conducted
by such firm in
accordance with standards established by the American Institute
of Certified
Public Accountants, such representation is fairly stated in all
material
respects, subject to such exceptions and other qualifications
that may be
appropriate. In rendering its report such firm may rely, as to
matters relating
to the direct servicing of residential mortgage loans by
Subservicers, upon
comparable reports of firms of independent certified public
accountants rendered
on the basis of examinations conducted in accordance with the
same standards
(rendered within one year of such report) with respect to those
Subservicers.
Promptly after receipt of such report, the Depositor shall
review such report
and, if applicable, consult with the Servicer as to the nature
of any defaults
by the Servicer in the fulfillment of any of the Servicer's
obligations. The
obligations of the Servicer under this Section apply to each
Servicer that
serviced during the applicable period, whether or not the
Servicer is acting as
a Servicer at the time such report is required to be
delivered.
Section 3.24 TRUSTEE TO ACT AS SERVICER. (a) In the event
that
the Servicer shall for any reason no longer be the Servicer
hereunder (including
by reason of an Event of Default), the Trustee or its successor
shall, thereupon
assume all of the rights and obligations of the Servicer
hereunder arising
thereafter (except that the Trustee shall not be (i) liable for
losses of the
predecessor Servicer pursuant to Section 3.10 or any acts or
omissions of the
predecessor Servicer hereunder, (ii) obligated to make Advances
if it is
prohibited from doing so by applicable law, (iii) obligated to
effectuate
repurchases or substitutions of Mortgage Loans hereunder,
including but not
limited to repurchases or substitutions pursuant to Section
2.03, (iv)
responsible for expenses of the Servicer pursuant to Section
2.03 or (v) deemed
to have made any representations and warranties of the Servicer
hereunder). Any
such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the
Servicer shall contain a provision giving the successor Servicer
the option to
terminate such agreement in the event a successor Servicer is
appointed.
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(c) If the Servicer shall for any reason no longer be the
Servicer (including by reason of any Event of Default), the
Trustee (or any
other successor Servicer) may, at its option, succeed to any
rights and
obligations of the Servicer under any Subservicing Agreement in
accordance with
the terms thereof; provided, that the Trustee (or any other
successor Servicer)
shall not incur any liability or have any obligations in its
capacity as
successor Servicer under a Subservicing Agreement arising prior
to the date of
such succession unless it expressly elects to succeed to the
rights and
obligations of the Servicer thereunder; and the Servicer shall
not thereby be
relieved of any liability or obligations under the Subservicing
Agreement
arising prior to the date of such succession.
(d) The Servicer shall, upon request of the Trustee, but
at the expense of the Servicer, deliver to the assuming party
all documents and
records relating to each Subservicing Agreement (if any) to
which it is a party
and the Mortgage Loans then being serviced thereunder and an
accounting of
amounts collected and held by it and otherwise use its best
efforts to effect
the orderly and efficient transfer of such Subservicing
Agreement to the
assuming party.
Section 3.25 COMPENSATING INTEREST. The Servicer shall remit
to the Trustee on each Remittance Date an amount from its own
funds equal to
Compensating Interest payable by the Servicer for such
Remittance Date.
Section 3.26 CREDIT REPORTING; GRAMM-LEACH-BLILEY ACT. (a)
With respect to each Mortgage Loan, the Servicer shall fully
furnish, in
accordance with the Fair Credit Reporting Act and its
implementing regulations,
accurate and complete information (e.g., favorable and
unfavorable) on the
related Mortgagor credit files to the three national credit
repositories, on a
monthly basis.
(b) Each party shall comply with all applicable
provisions of the Privacy Laws relating to the Mortgage Loans,
the related
borrowers and any "nonpublic personal information" (as defined
in the Privacy
Laws) received by such party incidental to it being a party to
this Agreement,
including, maintaining adequate information security procedures
to protect such
nonpublic personal information. Without limitation, the Servicer
shall provide
all privacy notices required of the Servicer under the Privacy
Laws.
Section 3.27 EXCESS RESERVE FUND ACCOUNT; DISTRIBUTION
ACCOUNT. (a) The Trustee shall establish and maintain the Excess
Reserve Fund
Account, on behalf of the Class X Certificateholders, to receive
any Basis Risk
Payment and to pay to the LIBOR Certificateholders any Basis
Risk Carry Forward
Amounts.
On each Distribution Date on which there exists a Basis Risk
Carry Forward Amount on any Class of LIBOR Certificates, the
Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess
Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(H), the lesser of
the Class X
Distributable Amount (to the extent remaining after the
distributions specified
in Sections 4.02(a)(iii)(A)-(G)) and the aggregate Basis Risk
Carry Forward
Amount and (2) withdraw from the Excess Reserve Fund Account
amounts necessary
to pay to such Class or Classes of LIBOR Certificates the
applicable Basis Risk
Carry Forward Amounts. Such payments shall be allocated to those
Classes based
upon the amount of
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Basis Risk Carry Forward Amount owed to each such Class and
shall be paid in the
priority set forth in Sections 4.02(a)(iii)(I)-(J). In the event
that the Class
Certificate Balance of any Class of Certificates is reduced
because of Applied
Realized Loss Amounts, the applicable Certificateholders will
not be entitled to
receive Basis Risk Carry Forward Amounts on the written down
amounts on such
Distribution Date or any future Distribution Dates (except to
the extent such
Class Certificate Balance is increased as a result of any
Subsequent
Recoveries), even if funds are otherwise available for
distribution.
The Trustee shall account for the Excess Reserve Fund
Account
as an outside reserve fund within the meaning of Treasury
Regulations Section
1.860G-2(h) and not as an asset of either Trust REMIC created
pursuant to this
Agreement. The beneficial owners of the Excess Reserve Fund
Account are the
Class X Certificateholders. For all federal income tax purposes,
amounts
transferred by the Upper-Tier REMIC to the Excess Reserve Fund
Account shall be
treated as first distributed by the Trustee to the Class X
Certificateholders in
respect of the Class X Interest, and then contributed by the
Class X
Certificateholders to the Excess Reserve Fund Account.
Any Basis Risk Carry Forward Amounts paid by the Trustee to
the LIBOR Certificateholders shall be accounted for by the
Trustee as amounts
paid first to the Holders of the Class X Certificates and then
to the respective
Class or Classes of LIBOR Certificates. In addition, the Trustee
shall account
for the rights of Holders of each Class of LIBOR Certificates to
receive
payments of Basis Risk Carry Forward Amounts as rights in a
separate limited
recourse interest rate cap contract written by the Class X
Certificateholders in
favor of Holders of each such Class.
Notwithstanding any provision contained in this Agreement,
the
Trustee shall not be required to make any payments from the
Excess Reserve Fund
Account except as expressly set forth in this Section
3.27(a).
(b) The Trustee shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The
Trustee shall,
promptly upon receipt on the Business Day received, deposit in
the Distribution
Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the
Trustee pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to
Section 3.12(b) in connection with any losses on Permitted
Investments;
(iii) amounts received from the Mortgage Pool Insurer under
the Mortgage Pool Insurance Policy; and
(iv) any other amounts deposited hereunder which are
required to be deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not
required to be remitted, the Servicer may at any time direct the
Trustee in
writing to withdraw such amount from the
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Distribution Account, any provision herein to the contrary
notwithstanding. Such
direction may be accomplished by delivering notice to the
Trustee which
describes the amounts deposited in error in the Distribution
Account. All funds
deposited in the Distribution Account shall be held by the
Trustee in trust for
the Certificateholders until disbursed in accordance with this
Agreement or
withdrawn in accordance with Section 4.02.
(c) In order to comply with its duties under the USA
Patriot Act of 2001, the Trustee shall obtain and verify certain
information and
documentation from the other parties to this Agreement,
including, but not
limited to, each such party's name, address, and other
identifying information.
Section 3.28 OPTIONAL PURCHASE OF DELINQUENT MORTGAGE LOANS.
While the Mortgage Pool Insurance Trigger is in effect, the
Mortgage Pool
Insurance Company, in its sole discretion, shall have the
option, but shall not
be obligated, to purchase any 90+ Delinquent Mortgage Loans from
the Trust Fund
for which it has not paid a claim, regardless of whether a claim
has been
approved for such Mortgage Loan or a Realized Loss on such
Mortgage Loan has
been applied to the Deductible (as defined in the Mortgage Pool
Insurance
Policy), on a servicing-released basis. The purchase price for
any such Mortgage
Loan shall be 100% of the unpaid principal balance of such
Mortgage Loan (or, in
the case of a Mortgage Loan for which any Loss (as defined under
the Mortgage
Pool Insurance Policy) has been charged, the amount of such
Loss) plus other
than in the case of a Mortgage Loan for which a Loss under the
Mortgage Pool
Insurance Policy has been charged, accrued and unpaid interest
on the related
Mortgage Loan at the applicable Mortgage Interest Rate plus the
amount of any
unreimbursed Servicing Advances made by the Servicer. Any such
purchase shall
reduce the amount of available coverage under the Mortgage Pool
Insurance Policy
by the amount of such purchase price. If a Mortgage Pool
Insurance Trigger is
not in effect or, if a Mortgage Pool Insurance Trigger is in
effect and if the
Mortgage Pool Insurer does not exercise its option pursuant to
this Section with
respect to any Mortgage Loan, the Depositor, in its sole
discretion, shall have
the option, but shall not be obligated, to purchase any such 90+
Delinquent
Mortgage Loan from the Trust Fund. The purchase price for any
such Mortgage Loan
shall be 100% of the unpaid principal balance of such Mortgage
Loan plus accrued
and unpaid interest on the related Mortgage Loan at the
applicable Mortgage
Interest Rate, plus the amount of any unreimbursed Servicing
Advances made by
the Servicer. Upon receipt of such purchase price, the Servicer
shall provide to
the Trustee a Request for Release and the Trustee shall promptly
release to the
Mortgage Pool Insurance Company or the Depositor, as applicable,
the Mortgage
File relating to the Mortgage Loan being repurchased.
Section 3.29 MAINTENANCE OF MORTGAGE POOL INSURANCE POLICY.
The Servicer shall exercise its commercially reasonable efforts
to maintain and
keep the Mortgage Pool Insurance Policy in full force and effect
until (a) each
Mortgage Loan has been paid in full, liquidated or is no longer
an asset of the
Trust Fund or (b) the Certificates are no longer outstanding,
unless coverage
thereunder has been exhausted through payment of claims.
In connection with its activities as administrator and
servicer of the Mortgage Loans, the Servicer agrees to file, on
behalf of
itself, the Trustee, the Co-Trustee, the Depositor and the
Certificateholders
claims and provide notices and other information to the Mortgage
Pool
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Insurer in a timely fashion in accordance with the terms of the
Mortgage Pool
Insurance Policy and, in this regard, to take such action as
shall be necessary
to permit recovery under the Mortgage Pool Insurance Policy
respecting a
defaulted Mortgage Loan. The Servicer shall comply will all
applicable terms of
the Mortgage Pool Insurance Policy and the claims-filing
procedures of the
Mortgage Pool Insurer, to the extent necessary to avoid any
adjustments to
claims paid under the Mortgage Pool Insurance Policy.
In accordance with the terms of the Mortgage Pool Insurance
Policy, claims will be payable under the Mortgage Pool Insurance
Policy only to
the extent that the Mortgage Pool Insurance Trigger is in
effect. No later than
each Reporting Date, the Mortgage Pool Insurer will notify each
of the
Depositor, the Servicer, the Trustee and the Co-Trustee, in
writing, whether the
Mortgage Pool Insurance Trigger is in effect. The Mortgage Pool
Insurer will
determine whether to pay claims under the Mortgage Pool
Insurance Policy and
will pay such claims by remitting, by wire transfer in
immediately available
funds, the amount of such claims to the Co-Trustee, who will
forward such
amounts to the Trustee for deposit in the Distribution Account.
To the extent
the Mortgage Pool Insurer does not pay any claims while the
Servicer has been
notified in writing by the Mortgage Pool Insurer that the
Mortgage Pool
Insurance Trigger is satisfied, the Servicer shall notify the
Depositor, the
Mortgage Pool Insurer, the Trustee and the Co-Trustee of such
failure to pay.
The original amount of coverage under the Mortgage Pool
Insurance Policy will be
reduced over the life of the Certificates by the aggregate
dollar amount of
claims paid.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 ADVANCES. (a) The amount of P&I Advances to
be
made by the Servicer for any Remittance Date shall equal,
subject to Section
4.01(c), the sum of (i) the aggregate amount of Scheduled
Payments (with each
interest portion thereof net of the related Servicing Fee), due
during the Due
Period immediately preceding such Remittance Date in respect of
the Mortgage
Loans, which Scheduled Payments were not received as of the
close of business on
the related Determination Date, plus (ii) with respect to each
REO Property,
which REO Property was acquired during or prior to the related
Prepayment Period
and as to which such REO Property an REO Disposition did not
occur during the
related Prepayment Period, an amount equal to the excess, if
any, of the
Scheduled Payments (with REO Imputed Interest) that would have
been due on the
related Due Date in respect of the related Mortgage Loan, over
the net income
from such REO Property transferred to the Collection Account for
distribution on
such Remittance Date.
(b) On each Remittance Date, the Servicer shall remit in
immediately available funds to the Trustee an amount equal to
the aggregate
amount of P&I Advances, if any, to be made in respect of the
Mortgage Loans and
REO Properties for the related Remittance Date either (i) from
its own funds or
(ii) from the Collection Account, to the extent of funds held
therein for future
distribution (in which case, it will cause to be made an
appropriate entry in
the records of the Collection Account that Amounts Held for
Future Distribution
have been, as
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permitted by this Section 4.01, used by the Servicer in
discharge of any such
P&I Advance) or (iii) in the form of any combination of (i)
and (ii) aggregating
the total amount of P&I Advances to be made by the Servicer
with respect to the
Mortgage Loans and REO Properties. Any Amounts Held for Future
Distribution and
so used shall be appropriately reflected in the Servicer's
records and replaced
by the Servicer by deposit in the Collection Account on or
before any future
Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I
Advances is mandatory, notwithstanding any other provision of
this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or
REO Property,
shall continue until (i) to the extent coverage under the
Mortgage Pool
Insurance Policy is available, through a Final Recovery
Determination in
connection therewith or the removal thereof from coverage under
this Agreement,
except as otherwise provided in this Section, and (ii) if
coverage under the
Mortgage Pool Insurance Policy is not available, through the
time at which the
related Mortgage Loan becomes 120 days delinquent.
(d) Notwithstanding anything herein to the contrary, no
P&I Advance or Servicing Advance shall be required to be
made hereunder by the
Servicer if such P&I Advance or Servicing Advance would, if
made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance. The
determination by the Servicer that it has made a Nonrecoverable
P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I
Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I
Advance or a
Nonrecoverable Servicing Advance, respectively, shall be
evidenced by an
Officer's Certificate of the Servicer delivered to the Trustee.
In addition the
Servicer shall not be required to advance any Relief Act
Interest Shortfalls.
(e) Except as otherwise provided herein, the Servicer
shall be entitled to reimbursement pursuant to Section 3.11 for
Advances from
recoveries from the related Mortgagor or from all Liquidation
Proceeds and other
payments or recoveries (including Insurance Proceeds (including
any proceeds
under the Mortgage Pool Insurance Policy) and Condemnation
Proceeds) with
respect to the related Mortgage Loan.
Section 4.02 PRIORITIES OF DISTRIBUTION. (a) On each
Distribution Date, the Trustee shall make the disbursements and
transfers from
amounts then on deposit in the Distribution Account in the
following order of
priority and to the extent of the Available Funds remaining:
(i) to the holders of each Class of Offered Certificates
in the following order of priority:
(A) from the Interest Remittance Amount, to the
Class A Certificates, the Accrued Certificate Interest
Distribution Amount for such Class and Unpaid Interest
Amount
for such Class and such Distribution Date;
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(B) from any remaining Interest Remittance
Amounts, to the Class M-1 Certificates, the Accrued
Certificate Interest Distribution Amount for such Class;
(C) from any remaining Interest Remittance
Amounts, to the Class M-2 Certificates, the Accrued
Certificate Interest Distribution Amount for such Class;
(D) from any remaining Interest Remittance
Amounts, to the Class B-1 Certificates, the Accrued
Certificate Interest Distribution Amount for such Class;
(E) from any remaining Interest Remittance
Amounts, to the Class B-2 Certificates, the Accrued
Certificate Interest Distribution Amount for such Class; and
(F) from any remaining Interest Remittance
Amounts, to the Class B-3 Certificates, the Accrued
Certificate Interest Distribution Amount for such Class;
(ii) (A) on each Distribution Date (a) before the Stepdown
Date or (b) with respect to which a Trigger Event is in effect,
to the
holders of the related Class or Classes of Offered Certificates
then
entitled to distributions of principal as set forth below,
from
Available Funds remaining after making distributions pursuant to
clause
(i) above, an amount equal to the Principal Distribution Amount
in the
following order of priority:
(a) to the Class A Certificates, until
the Class Certificate Balance thereof is reduced to
zero; and
(b) sequentially to the Class M-1,
Class M-2, Class B-1, Class B-2 and Class B-3
Certificates, in that order, until the respective
Class Certificate Balances thereof are reduced to
zero;
(B) on each Distribution Date (a) on and after
the Stepdown Date and (b) as long as a Trigger Event is not
in
effect, to the holders of the related Class or Classes of
Offered Certificates then entitled to distribution of
principal, from Available Funds remaining after making
distributions pursuant to clause (i) above, an amount equal
to, the Principal Distribution Amount in the following
amounts
and order of priority:
(a) to the Class A Certificates, the
lesser of (x) the Principal Distribution Amount and
(y) the Class A Principal Distribution Amount, until
the Class Certificate Balance thereof is reduced to
zero;
(b) to the Class M-1 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed
to the Class A Certificates in clause (ii)(B)(a)
above and (y) the Class M-1 Principal Distribution
Amount, until the Class Certificate Balance thereof
has been reduced to zero;
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(c) to the Class M-2 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed
to the Class A Certificates in clause (ii)(B)(a)
above and to the Class M-1 Certificates in clause
(ii)(B)(b) above and (y) the Class M-2 Principal
Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(d) to the Class B-1 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed
to the Class A Certificates in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause
(ii)(B)(b) above and to the Class M-2 Certificates in
clause (ii)(B)(c) above and (y) the Class B-1
Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(e) to the Class B-2 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed
to the Class A Certificates in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in
clause (ii)(B)(c) above and to the Class B-1
Certificates in clause (ii)(B)(d) above and (y) the
Class B-2 Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced to
zero; and
(f) to the Class B-3 Certificates, the
lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed
to the Class A Certificates in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause
(ii)(B)(b) above, to the Class M-2 Certificates in
clause (ii)(B)(c) above, to the Class B-1
Certificates in clause (ii)(B)(d) above and to the
Class B-2 Certificates in clause (ii)(B)(e) above and
(y) the Class B-3 Principal Distribution Amount,
until the Class Certificate Balance thereof has been
reduced to zero;
(iii) any amount remaining after the distributions in
clauses (i) and (ii) above, plus as specifically indicated
below, from
amounts on deposit in the Excess Reserve Account, shall be
distributed
in the following order of priority beginning on the Distribution
Date
in May 2005:
(A) to the holders of the Class M-1
Certificates, any Unpaid Interest Amount for such Class;
(B) to the holders of the Class M-2
Certificates, any Unpaid Interest Amount for such Class;
(C) to the holders of the Class B-1
Certificates, any Unpaid Interest Amount for such Class;
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(D) to the holders of the Class B-2
Certificates, any Unpaid Interest Amount for such Class;
(E) to the holders of the Class B-3
Certificates, any Unpaid Interest Amount for such Class;
(F) to the Excess Reserve Fund Account, the
amount of any Basis Risk Payment for such Distribution Date;
(G) from funds on deposit in the Excess Reserve
Fund Account, an amount equal to any Basis Risk Carry
Forward
Amount with respect to the LIBOR Certificates for that
Distribution Date, first, to the Class A Certificates, and
second, to the Class M-1 Certificates, in each case up to
their respective unpaid remaining Basis Risk Carry Forward
Amounts;
(H) to the holders of the Class X Certificates,
the remainder of the Class X Distributable Amount not
distributed pursuant to Sections 4.02(a)(iii)(A)-(G); and
(I) to the holders of the Class R-1 Certificates
and Class R-2 Certificates, any remaining amount.
If on any Distribution Date, as a result of the foregoing
allocation rules, the Class A Certificates do not receive the
related Accrued
Certificate Interest Distribution Amount or the related Unpaid
Interest Amount,
if any, then that unpaid amount will be recoverable by the
holders of that
Class, with interest thereon, on future Distribution Dates, as
an Unpaid
Interest Amount, subject to the priorities described above. In
the event the
Class Certificate Balance of any Class of Certificates has been
reduced to zero,
that Class of Certificates shall no longer be entitled to
receive any related
unpaid Basis Risk Carry Forward Amounts except to the extent the
Class
Certificate Balance is increased as a result of any Subsequent
Recovery.
(b) On each Distribution Date, all amounts representing
Prepayment Premiums from the Mortgage Loans received during the
related
Prepayment Period shall be distributed by the Trustee to the
holders of the
Class P Certificates.
(c) On any Distribution Date, any Relief Act Interest
Shortfalls and Net Prepayment Interest Shortfalls for such
Distribution Date
will be allocated pro rata, as a reduction of the Accrued
Certificate Interest
Distribution Amounts for the Offered Certificates, based on the
amount of
interest to which such Classes would otherwise be entitled on
such Distribution
Date.
Section 4.03 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS. (a)
Not
later than each Distribution Date, the Trustee shall make
available to each
Certificateholder, the Servicer, the Depositor, the Mortgage
Pool Insurer and
each Rating Agency a statement setting forth with respect to the
related
distribution:
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(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments
and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid
Interest Amounts included in such distribution and any remaining
Unpaid
Interest Amounts after giving effect to such distribution, any
Basis
Risk Carry Forward Amount for such Distribution Date and the
amount of
all Basis Risk Carry Forward Amount covered by withdrawals from
the
Excess Reserve Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be
distributable
to such Holders if there were sufficient funds available
therefor, the
amount of the shortfall and the allocation thereof as between
principal
and interest, including any Basis Risk Carry Forward Amount not
covered
by amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of
Certificates after giving effect to the distribution of
principal on
such Distribution Date;
(v) the Pool Stated Principal Balance for the following
Distribution Date;
(vi) the amount of the
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