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EXECUTION COPY
POOLING AND SERVICING AGREEMENT
Relating to
NATIONSTAR HOME EQUITY LOAN TRUST
2007-B
Among
NATIONSTAR FUNDING LLC,
as Depositor,
NATIONSTAR MORTGAGE LLC,
as
Seller,
AUBURN FUNDING, LLC,
as Conduit Seller,
NATIONSTAR MORTGAGE LLC,
as
Servicer,
and
THE BANK OF NEW YORK
as Trustee
Dated as of April 1, 2007
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; RULES OF
CONSTRUCTION
2
Section 1.01.
Definitions.
2
Section 1.02.
Use of Words and Phrases.
41
Section 1.03.
Captions, Table of Contents.
41
Section 1.04.
Opinions.
41
ARTICLE II ESTABLISHMENT AND ORGANIZATION OF THE
TRUST
43
Section 2.01.
Establishment of the Trust.
43
Section 2.02.
Office.
43
Section 2.03.
Purposes and Powers.
43
Section 2.04.
Appointment of the Trustee; Declaration of Trust.
43
Section 2.05.
Expenses of the Trust.
43
Section 2.06.
Ownership of the Trust.
43
Section 2.07.
Situs of the Trust.
44
Section 2.08.
Designation of Interests in REMICs.
44
Section 2.09.
Miscellaneous REMIC Provisions.
59
Section 2.10.
Supplemental Interest Trust.
60
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE
DEPOSITOR, THE SERVICER AND THE SELLERS; COVENANT OF SELLER
TO
CONVEY HOME EQUITY LOANS
61
Section 3.01.
Representations and Warranties of the Depositor.
61
Section 3.02.
Representations and Warranties of the Servicer.
63
Section 3.03.
Representations and Warranties of the Sellers.
65
Section 3.04.
Covenants of Sellers to Take Certain Actions with Respect to the
Home
Equity Loans in Certain Situations.
68
Section 3.05.
Sale Treatment of the Home Equity Loans and Qualified
Replacement
Mortgages.
82
Section 3.06.
Acceptance by Trustee; Certain Substitutions of Home Equity
Loans;
Certification by Trustee.
86
Section 3.07.
High-Cost Home Loans.
88
Section 3.08.
Custodian.
88
Section 3.09.
Cooperation Procedures.
89
Section 3.10.
Payment of Taxes, Insurance and Other Charges.
89
ARTICLE IV ISSUANCE AND SALE OF
CERTIFICATES
90
Section 4.01.
Issuance of Certificates.
90
Section 4.02.
Sale of Certificates.
90
ARTICLE V CERTIFICATES AND TRANSFER OF
INTERESTS
91
Section 5.01.
Terms.
91
Section 5.02.
Forms.
91
Section 5.03.
Execution, Authentication and Delivery.
91
Section 5.04.
Registration and Transfer of Certificates.
92
Section 5.05.
Mutilated, Destroyed, Lost or Stolen Certificates.
94
Section 5.06.
Persons Deemed Owners.
95
Section 5.07.
Cancellation.
95
Section 5.08.
Limitation on Transfer of Ownership Rights.
95
Section 5.09.
Assignment of Rights.
97
ARTICLE VI COVENANTS
99
Section 6.01.
Distributions.
99
Section 6.02.
Money for Distributions to be Held in Trust; Withholding.
99
Section 6.03.
Protection of Trust Estate.
100
Section 6.04.
Performance of Obligations.
101
Section 6.05.
Negative Covenants.
101
Section 6.06.
No Other Powers.
102
Section 6.07.
Limitation of Suits.
102
Section 6.08.
Unconditional Rights of Owners to Receive Distributions.
102
Section 6.09.
Rights and Remedies Cumulative.
103
Section 6.10.
Delay or Omission Not Waiver.
103
Section 6.11.
Control by Owners.
103
Section 6.12.
Indemnification by Nationstar Mortgage.
103
ARTICLE VII ACCOUNTS, DISBURSEMENTS AND
RELEASES
105
Section 7.01.
Collection of Money.
105
Section 7.02.
Establishment of Accounts.
105
Section 7.03.
Flow of Funds.
105
Section 7.04.
Net WAC Cap Carryover Reserve Fund; WAC Excess.
110
Section 7.05.
Investment of Accounts.
110
Section 7.06.
Payment of Trust Expenses.
111
Section 7.07.
Eligible Investments.
111
Section 7.08.
Accounting and Directions by Trustee.
113
Section 7.09.
Reports by Trustee to Owners.
114
Section 7.10.
Reports by Trustee.
117
Section 7.11.
Allocation of Losses.
118
Section 7.12.
Swap Account.
118
Section 7.13.
Tax Treatment of Swap Payments and Swap Termination
Payments.
120
ARTICLE VIII SERVICING AND ADMINISTRATION OF HOME EQUITY
LOANS
122
Section 8.01.
Servicer and Sub-Servicers.
122
Section 8.02.
Collection of Certain Home Equity Loan Payments.
123
Section 8.03.
Sub-Servicing Agreements Between Servicer and Sub-Servicers.
124
Section 8.04.
Successor Sub-Servicers.
124
Section 8.05.
Liability of Servicer; Indemnification.
124
Section 8.06.
No Contractual Relationship Between Sub-Servicer, Trustee or the
Owners.
125
Section 8.07.
Assumption or Termination of Sub-Servicing Agreement by
Trustee.
125
Section 8.08.
Principal and Interest Account.
125
Section 8.09.
Delinquency Advances, Servicing Advances and Arrearages.
127
Section 8.10.
Compensating Interest; Repurchase of Home Equity Loans.
129
Section 8.11.
Maintenance of Insurance.
130
Section 8.12.
Due-on-Sale Clauses; Assumption and Substitution Agreements.
131
Section 8.13.
Realization Upon Defaulted Home Equity Loans; Workout of Home
Equity
Loans.
132
Section 8.14.
Trustee to Cooperate; Release of Files.
133
Section 8.15.
Servicing Compensation.
134
Section 8.16.
Annual Statement as to Compliance.
135
Section 8.17.
[Reserved].
135
Section 8.18.
Access to Certain Documentation and Information Regarding the
Home
Equity Loans.
135
Section 8.19.
Assignment of Agreement.
135
Section 8.20.
Removal of Servicer; Retention of Servicer; Resignation of
Servicer.
135
Section 8.21.
Inspections; Errors and Omissions Insurance.
140
Section 8.22.
Additional Servicing Responsibilities for Second Mortgage
Loans.
140
Section 8.23.
The Adjustable Rate Home Equity Loans.
140
Section 8.24.
Merger, Conversion, Consolidation or Succession to Business of
Servicer.
141
Section 8.25.
Notices of Material Events.
141
Section 8.26.
Indemnification by the Servicer.
142
Section 8.27.
Reports on Foreclosure and Abandonment of Properties.
142
Section 8.28.
[Reserved].
142
Section 8.29.
Advance Facility.
142
ARTICLE IX TERMINATION OF TRUST
146
Section 9.01.
Termination of Trust.
146
Section 9.02.
Termination Upon Option of the Servicer.
146
Section 9.03.
Disposition of Proceeds.
147
ARTICLE X THE TRUSTEE
148
Section 10.01.
Certain Duties and Responsibilities.
148
Section 10.02.
Removal of Trustee for Cause.
150
Section 10.03.
Certain Rights of the Trustee.
151
Section 10.04.
Not Responsible for Recitals or Issuance of Certificates.
153
Section 10.05.
May Hold Certificates.
153
Section 10.06.
Money Held in Trust.
154
Section 10.07.
Compensation and Reimbursement.
154
Section 10.08.
Corporate Trustee Required; Eligibility.
154
Section 10.09.
Resignation and Removal; Appointment of Successor.
155
Section 10.10.
Acceptance of Appointment by Successor Trustee.
156
Section 10.11.
Merger, Conversion, Consolidation or Succession to Business of
the
Trustee.
156
Section 10.12.
Reporting; Withholding.
157
Section 10.13.
Indemnification and Liability of the Trustee.
157
Section 10.14.
Appointment of Co-Trustee or Separate Trustee.
158
Section 10.15.
Appointment of Custodians.
159
ARTICLE XI MISCELLANEOUS
160
Section 11.01.
Compliance Certificates and Opinions.
160
Section 11.02.
Form of Documents Delivered to the Trustee.
160
Section 11.03.
Acts of Owners.
161
Section 11.04.
Notices, etc. to Trustee.
161
Section 11.05.
Notices and Reports to Owners; Waiver of Notices.
162
Section 11.06.
Rules by Trustee.
162
Section 11.07.
Successors and Assigns.
162
Section 11.08.
Severability.
163
Section 11.09.
Benefits of Agreement; Third-Party Beneficiaries.
163
Section 11.10.
Legal Holidays.
163
Section 11.11.
Governing Law; Submission to Jurisdiction.
163
Section 11.12.
Counterparts.
164
Section 11.13.
Usury.
164
Section 11.14.
Amendment.
164
Section 11.15.
Paying Agent; Appointment and Acceptance of Duties.
165
Section 11.16.
REMIC Status.
166
Section 11.17.
Additional Limitation on Action and Imposition of Tax.
168
Section 11.18.
Appointment of Tax Matters Person.
169
Section 11.19.
Notices.
169
Section 11.20.
Rule 144A Information.
171
ARTICLE XII EXCHANGE ACT REPORTING
172
Section 12.01.
Filing Obligations.
172
Section 12.02.
Form 10-D Filings.
172
Section 12.03.
Form 8-K Filings.
173
Section 12.04.
Form 10-K Filings.
173
Section 12.05.
Sarbanes-Oxley Certification.
174
Section 12.06.
Form 15 Filing.
175
Section 12.07.
Report on Assessment of Compliance and Attestation.
175
Section 12.08.
Use of Subservicers and Subcontractors.
176
Section 12.09.
Amendments.
177
SCHEDULE I-A
SCHEDULE OF THE GROUP 1 HOME EQUITY LOANS
SCHEDULE I-B
SCHEDULE OF THE GROUP 2 HOME EQUITY LOANS
SCHEDULE I-C
PREPAYMENT CHARGE SCHEDULE
SCHEDULE I-D
[RESERVED]
SCHEDULE I-E
SELLER SCHEDULE OF HOME EQUITY LOANS
SCHEDULE I-F
CONDUIT SCHEDULE OF HOME EQUITY LOANS
SCHEDULE I-G
INVESTMENT INSTRUCTIONS TO TRUSTEE
SCHEDULE I-H
SWAP AGREEMENT SCHEDULE OF NOTIONAL AMOUNTS
EXHIBIT A-1
FORM OF CLASS 1-AV-1 CERTIFICATE
EXHIBIT A-2
FORM OF CLASS 2-AV-1 CERTIFICATE
EXHIBIT A-3
FORM OF CLASS 2-AV-2 CERTIFICATE
EXHIBIT A-4
FORM OF CLASS 2-AV-3 CERTIFICATE
EXHIBIT A-5
FORM OF CLASS 2-AV-4 CERTIFICATE
EXHIBIT A-6
FORM OF CLASS M-1 CERTIFICATE
EXHIBIT A-7
FORM OF CLASS M-2 CERTIFICATE
EXHIBIT A-8
FORM OF CLASS M-3 CERTIFICATE
EXHIBIT A-9
FORM OF CLASS M-4 CERTIFICATE
EXHIBIT A-10
FORM OF CLASS M-5 CERTIFICATE
EXHIBIT A-11
FORM OF CLASS M-6 CERTIFICATE
EXHIBIT A-12
FORM OF CLASS M-7 CERTIFICATE
EXHIBIT A-13
FORM OF CLASS M-8 CERTIFICATE
EXHIBIT A-14
FORM OF CLASS M-9 CERTIFICATE
EXHIBIT B-1
FORM OF CLASS X-IO CERTIFICATE
EXHIBIT B-2
FORM OF CLASS P CERTIFICATE
EXHIBIT C
FORM OF CLASS R CERTIFICATE
EXHIBIT D
FORM OF CERTIFICATE RE: HOME EQUITY LOANS PREPAID IN FULL AFTER
THE CUT-OFF DATE
EXHIBIT E-1
FORM OF TRUSTEE’S ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT E-2
FORM OF CUSTODIAN’S ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT E-3
FORM OF DELAYED DELIVERY CERTIFICATION
EXHIBIT F
FORM OF POOL CERTIFICATION
EXHIBIT G
FORM OF DELIVERY ORDER
EXHIBIT H
FORM OF CLASS R TAX MATTERS TRANSFER CERTIFICATE
EXHIBIT I-1
FORM OF CERTIFICATE REGARDING TRANSFER (ACCREDITED INVESTOR)
EXHIBIT I-2
FORM OF CERTIFICATE OF TRANSFER (RULE 144A)
EXHIBIT J
HOME EQUITY LOANS WITH DOCUMENT EXCEPTIONS
EXHIBIT K
[RESERVED]
EXHIBIT L
[RESERVED]
EXHIBIT M
[RESERVED]
EXHIBIT N
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
EXHIBIT O
[RESERVED]
EXHIBIT P
[RESERVED]
EXHIBIT Q
[RESERVED]
EXHIBIT R
SWAP AGREEMENT
EXHIBIT S
[RESERVED]
EXHIBIT T-1
FORM OF PERFORMANCE CERTIFICATION (TRUSTEE)
EXHIBIT T-2
FORM OF PERFORMANCE CERTIFICATION (SUBSERVICER)
EXHIBIT U
FORM OF SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF
COMPLIANCE STATEMENT
EXHIBIT V
LIST OF ITEM 1119 PARTIES
EXHIBIT W
FORM OF SARBANES-OXLEY CERTIFICATION
POOLING AND SERVICING AGREEMENT, relating to NATIONSTAR HOME
EQUITY LOAN TRUST 2007-B, dated as of April 1, 2007 by and among
NATIONSTAR FUNDING LLC, a Delaware limited liability company, in
its capacity as the depositor (the "Depositor"), NATIONSTAR
MORTGAGE LLC, a Delaware limited liability company, ("Nationstar
Mortgage") in its capacities as a seller (in such capacity, the
"Seller") and as the servicer (in such capacity, the "Servicer"),
Auburn Funding, LLC, a Delaware limited liability company, in its
capacity as a seller (the "Conduit Seller"; and together with the
Seller, the "Sellers") and THE BANK OF NEW YORK, a New York banking
corporation, in its capacity as the trustee (the "Trustee").
WHEREAS, the Seller wishes to establish a trust and two
subtrusts and provide for the allocation and sale of the beneficial
interests therein and the maintenance and distribution of the trust
estate;
WHEREAS, the Seller and the Conduit Seller wish to sell to the
Depositor, the Depositor wishes to purchase from the Seller and the
Conduit Seller and to sell to the Trustee on behalf of the Trust,
and the Trustee wishes to purchase on behalf of the Trust, the Home
Equity Loans and all payments thereon, including all Prepayment
Charges;
WHEREAS, the Servicer has agreed to service the Home Equity
Loans, which constitute the principal assets of the trust
estate;
WHEREAS, all things necessary to make the Certificates, when
executed and authenticated by the Trustee, valid instruments, and
to make this Agreement a valid agreement, in accordance with their
and its terms, have been done; and
WHEREAS, The Bank of New York is willing to serve in the
capacity of Trustee hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Depositor, the Seller, the Conduit
Seller, the Servicer, and the Trustee hereby agree as follows:
CONVEYANCE
The Seller with respect to the Seller Home Equity Loans and the
Conduit Seller with respect to the Conduit Home Equity Loans each
hereby bargains, sells, conveys, assigns and transfers to the
Depositor, in trust, without recourse and for the exclusive benefit
of the Owners of the Certificates, all of its right, title and
interest in and to (a) all principal collected on the Home Equity
Loans on and after the Cut-Off Date and all interest due on the
Home Equity Loans after the Cut-Off Date, and any and all other
benefits accruing from the Home Equity Loans which the Depositor is
causing to be delivered to the Custodian on behalf of the Trustee
herewith, together with the related Home Equity Loan documents and
the Depositor’s interest in any Property, and all payments
thereon, including all Prepayment Charges, and proceeds of the
conversion, voluntary or involuntary, of the foregoing, and (b)
proceeds of all the foregoing (including, but not by way of
limitation, all proceeds of any mortgage insurance, flood
insurance, hazard insurance and title insurance policy relating to
the Home Equity Loans, cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, rights to payment of any and every kind, and
other forms of obligations and receivables which at any time
constitute all or part of or are included in the proceeds of any of
the foregoing) to pay the Certificates as specified herein (the
"Home Equity Loan Assets").
The Depositor, concurrently with the execution and delivery
hereof, hereby bargains, sells, conveys, assigns and transfers to
the Trustee for the benefit of the Owners of the Certificates,
without recourse, all the right, title and interest of the
Depositor in and to the Trust Estate.
The Trustee acknowledges such sale, accepts the trusts hereunder
in accordance with the provisions hereof and agrees to perform the
duties herein in accordance with the provisions of the Operative
Documents.
ARTICLE I
DEFINITIONS; RULES OF
CONSTRUCTION
Section
1.01.
Definitions.
For all purposes of this Agreement, the following terms shall
have the meanings set forth below, unless the context clearly
indicates otherwise:
"Account": Any account established in accordance with Section
7.02 or 8.08 hereof.
"Additional Designated Information": As defined in Section
12.02.
"Adjustable Rate Home Equity Loans": With respect to the
Home Equity Loans, the adjustable rate Home Equity Loans identified
as such in Schedule I-A or Schedule I-B hereto, including any
Qualified Replacement Mortgages delivered in replacement thereof.
With respect to the Conduit Home Equity Loans, the adjustable
rate Home Equity Loans listed in the Conduit Schedule of Home
Equity Loans that are also identified as such in Schedule I-A or
Schedule I-B hereto, and with respect to the Seller Home Equity
Loans, the adjustable rate Home Equity Loans listed in the Seller
Schedule of Home Equity Loans that are also identified as such in
Schedule I-A or Schedule I-B hereto.
"Advance Facility": As defined in Section 8.29(a) hereof.
"Advancing Person": As defined in Section 8.29(a) hereof.
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with
such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the
power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Aggregate Principal Amount": As to any Distribution Date, the
sum of the Basic Principal Amounts for each Home Equity Loan
Group.
"Agreement": This Pooling and Servicing Agreement, as it may be
amended from time to time, including the Exhibits and Schedules
hereto.
"Applied Realized Loss Amounts": As to any Distribution Date, an
amount equal to the excess, if any, of (i) the aggregate
Certificate Principal Balance of the Offered Certificates, after
giving effect to all distributions on such Distribution Date over
(ii) the Pool Balance as of the last day of the related Remittance
Period.
"Appraised Value": The appraised value of any Property based
upon the appraisal made at the time of the origination or an
updated appraisal made after the time of origination, but prior to
the Cut-off Date, of the related Home Equity Loan, or, in the case
of a Home Equity Loan which is a purchase money mortgage, the sales
price of the Property, if such sales price is less than such
appraised value.
"Arrearage": A Property Protection Arrearage and/or a
Delinquency Arrearage, as the context requires.
"Authorized Officer": With respect to any Person, any officer of
such Person who is authorized to act for such Person in matters
relating to this Agreement, and whose action is binding upon such
Person; with respect to the Depositor, the Sellers and the
Servicer, initially including those individuals whose names appear
on the lists of Authorized Officers delivered at the Closing; with
respect to the Trustee, any officer assigned to the Corporate Trust
Office (or any successor thereto), including any Vice President,
Assistant Vice President, Trust Officer, Assistant Secretary or any
other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers
and having direct responsibility for the administration of this
Agreement or any other officers of the Trustee to whom a matter
arising under this Agreement may be referred.
"Basic Principal Amount": With respect to each Home Equity Loan
Group and each Distribution Date shall be the sum of (without
duplication):
(a)
the principal portion of all scheduled monthly payments on the
Home Equity Loans related to the Home Equity Loan Group actually
received by the Servicer during the related Remittance Period and
any Prepayments on the Home Equity Loans made on behalf of the
obligors on Home Equity Loans in the related Home Equity Loan Group
actually received by the Servicer during the related Remittance
Period in each case to the extent the amounts are received by the
Trustee on or prior to the Monthly Remittance Date;
(b)
the outstanding principal balance of each Home Equity Loan in
the related Home Equity Loan Group that was purchased or
repurchased by the Seller or purchased by the Servicer on or prior
to the related Monthly Remittance Date in each case to the extent
the amounts are received by the Trustee on or prior to the Monthly
Remittance Date;
(c)
any Substitution Amounts relating to principal, delivered by the
Seller on the related Monthly Remittance Date in connection with a
substitution of a Home Equity Loan in the related Home Equity Loan
Group, in each case to the extent the amounts are received by the
Trustee on or prior to the Monthly Remittance Date;
(d)
all Net Liquidation Proceeds and Recoveries actually collected
by or on behalf of the Servicer with respect to the Home Equity
Loans in the related Home Equity Loan Group during the related
Remittance Period (to the extent the Net Liquidation Proceeds and
Recoveries relate to principal) in each case to the extent the
amounts are received by the Trustee on or prior to the Monthly
Remittance Date; and
(e)
the principal portion of the proceeds received by the Trustee
with respect to the related Home Equity Loan Group upon termination
of the Trust.
"Business Day": Any day other than a Saturday, Sunday or a day
on which commercial banking institutions in New York, New York,
Dallas, Texas, the city in which the Corporate Trust Office is
located or, with respect to the obligations of the Custodian
hereunder, the State of Texas or any other state where the
principal office of the Custodian is located, are authorized or
obligated by law or executive order to be closed.
"Certificate": Any one of the Offered Certificates, the Class
X-IO Certificates, the Class P Certificates or the Class R
Certificates, each representing the interests and the rights
described in this Agreement.
"Certificate Account": The segregated certificate account
established in accordance with Section 7.02(a) hereof and
maintained at the applicable Corporate Trust Office entitled "The
Bank of New York, as Trustee on behalf of the Owners of the
Nationstar Home Equity Loan Trust 2007-B, Nationstar Home Equity
Loan Asset-Backed Certificates." The Certificate Account
shall be an Eligible Account.
"Certificate Group" or "Group": The Group 1 Certificates or the
Group 2 Certificates, as the case may be.
"Certificate Principal Balance": As of the Startup Day as to
each of the following Classes of Offered Certificates and Class P
Certificates, the principal balances thereof, as follows:
|
Class 1-AV-1 Certificates
|
-
|
$234,882,000
|
|
Class 2-AV-1 Certificates
|
-
|
$180,239,000
|
|
Class 2-AV-2 Certificates
|
-
|
$108,700,000
|
|
Class 2-AV-3 Certificates
|
-
|
$43,708,000
|
|
Class 2-AV-4 Certificates
|
-
|
$59,907,000
|
|
Class M-1 Certificates
|
-
|
$39,399,000
|
|
Class M-2 Certificates
|
-
|
$38,559,000
|
|
Class M-3 Certificates
|
-
|
$14,670,000
|
|
Class M-4 Certificates
|
-
|
$18,861,000
|
|
Class M-5 Certificates
|
-
|
$10,059,000
|
|
Class M-6 Certificates
|
-
|
$10,478,000
|
|
Class M-7 Certificates
|
-
|
$9,640,000
|
|
Class M-8 Certificates
|
-
|
$9,640,000
|
|
Class M-9 Certificates
|
-
|
$12,155,000
|
|
Class P Certificates
|
-
|
$100
|
As of any time of determination after the Startup Day, the
Certificate Principal Balance of a Class of Offered Certificates
and the Class P Certificates shall be the Certificate Principal
Balance of such Class as of the Startup Day less the aggregate of
all amounts actually distributed to such Class in reduction of such
Class’s Certificate Principal Balance pursuant to Section
7.03 hereof on all prior Distribution Dates and, in the case of any
Class of Subordinate Certificates, reduced by any Applied Realized
Loss Amounts and increased by any Recoveries allocated to such
Class on prior Distribution Dates.
The Class X-IO Certificates and the Class R Certificates do not
have a Certificate Principal Balance.
"Certificate Rate": Any of the Class 1-AV-1 Certificate Rate,
Class 2-AV-1 Certificate Rate, the Class 2-AV-2 Certificate Rate,
the Class 2-AV-3 Certificate Rate, the Class 2-AV-4 Certificate
Rate, the Class M-1 Certificate Rate, the Class M-2 Certificate
Rate, the Class M-3 Certificate Rate, the Class M-4 Certificate
Rate, the Class M-5 Certificate Rate, the Class M-6 Certificate
Rate, the Class M-7 Certificate Rate, the Class M-8 Certificate
Rate or the Class M-9 Certificate Rate.
"Certification Parties": As defined in Section 12.05.
"Certifying Person": As defined in Section 12.05.
"Class": Any class of the Offered Certificates or the Class X-IO
Certificates, the Class P Certificates or the Class R
Certificates.
"Class 1-AV-1 Certificate": Any one of the Certificates
designated on the face thereof as a Class 1-AV-1 Certificate,
substantially in the form annexed hereto as Exhibit A-1
authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing ownership
of an interest designated as a "regular interest" in the Master
REMIC created hereunder for purposes of the REMIC Provisions.
"Class 1-AV-1 Certificate Rate": With respect to any
Distribution Date and the Class 1-AV-1 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.220% per annum
(or 0.440% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group 1 Net WAC Cap for the
Distribution Date.
"Class 2-AV-1 Certificate": Any one of the Certificates
designated on the face thereof as a Class 2-AV-1 Certificate,
substantially in the form annexed hereto as Exhibit A-2
authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing ownership
of an interest designated as a "regular interest" in the Master
REMIC created hereunder for purposes of the REMIC Provisions.
"Class 2-AV-1 Certificate Rate": With respect to any
Distribution Date and the Class 2-AV-1 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.120% per annum
(or 0.240% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group 2 Net WAC Cap for the
Distribution Date.
"Class 2-AV-2 Certificate": Any one of the Certificates
designated on the face thereof as a Class 2-AV-2 Certificate,
substantially in the form annexed hereto as Exhibit A-3
authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing ownership
of an interest designated as a "regular interest" in the Master
REMIC created hereunder for purposes of the REMIC Provisions.
"Class 2-AV-2 Certificate Rate": With respect to any
Distribution Date and the Class 2-AV-2 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.180% per annum
(or 0.360% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group 2 Net WAC Cap for the
Distribution Date.
"Class 2-AV-3 Certificate": Any one of the Certificates
designated on the face thereof as a Class 2-AV-3 Certificate,
substantially in the form annexed hereto as Exhibit A-4
authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing ownership
of an interest designated as a "regular interest" in the Master
REMIC created hereunder for purposes of the REMIC Provisions.
"Class 2-AV-3 Certificate Rate": With respect to any
Distribution Date and the Class 2-AV-3 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.250% per annum
(or 0.500% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Group 2 Net WAC Cap for the
Distribution Date.
"Class 2-AV-4 Certificate": Any one of the Certificates
designated on the face thereof as a Class 2-AV-4 Certificate,
substantially in the form annexed hereto as Exhibit A-5
authenticated and delivered by the Trustee, representing the right
to distributions as set forth herein and each evidencing ownership
of an interest designated as a "regular interest" in the Master
REMIC created hereunder for purposes of the REMIC Provisions.
"Class 2-AV-4 Certificate Rate": With respect to any
Distribution Date and the Class 2-AV-4 Certificates, the
lesser of (A) the sum of (1) LIBOR and (2) 0.320%
per annum (or 0.640% per annum for each Interest Period occurring
after the Clean-Up Call Date) and (B) the Group 2 Net WAC Cap
for the Distribution Date.
"Class Interest Carryover Shortfall": As to any Class of Offered
Certificates and any Distribution Date, an amount equal to the sum
of (i) the excess of the related Class Monthly Interest Amount for
the preceding Distribution Date and any outstanding Class Interest
Carryover Shortfall with respect to such Class on any preceding
Distribution Date, over the amount in respect of interest that is
actually distributed to the Owners of such Class on such preceding
Distribution Date plus (ii) one month’s interest on such
excess, to the extent permitted by law, at the Certificate Rate for
such Class.
"Class M-1 Certificate": Any one of the Certificates designated
on the face thereof as a Class M-1 Certificate, substantially in
the form annexed hereto as Exhibit A-6 authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein and each evidencing ownership of an interest
designated as a "regular interest" in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
"Class M-1 Certificate Rate": With respect to any Distribution
Date and the Class M-1 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.410% per annum
(or 0.615% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-1 Principal Distribution Amount": As to any
Distribution Date (a) prior to the Stepdown Date, the lesser of (i)
the remaining Principal Distribution Amount after the distribution
of the Senior Principal Distribution Amount and (ii) the
Certificate Principal Balance of the Class M-1 Certificates
immediately prior to the applicable Distribution Date and (b) on or
after the Stepdown Date, (x) 100% of the remaining Principal
Distribution Amount if the Certificate Principal Balance of each
Class of the Senior Certificates has been reduced to zero and a
Trigger Event exists, or (y) if a Trigger Event is not in
effect, the excess of (1) the sum of (A) the aggregate
Certificate Principal Balance of the Senior Certificates (after
giving effect to distributions of the Senior Principal Distribution
Amount for such Distribution Date) and (B) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior
to such Distribution Date over (2) the lesser of
(A) 59.10% of the Pool Balance as of the last day of the
related Remittance Period and (B) the Pool Balance as of the
last day of the related Remittance Period minus the OC Floor.
"Class M-2 Certificate": Any one of the Certificates designated
on the face thereof as a Class M-2 Certificate, substantially in
the form annexed hereto as Exhibit A-7 authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein and each evidencing ownership of an interest
designated as a "regular interest" in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
"Class M-2 Certificate Rate": With respect to any Distribution
Date and the Class M-2 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.470% per annum
(or 0.705% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-2 Principal Distribution Amount": As to any
Distribution Date (a) prior to the Stepdown Date, the lesser of (i)
the remaining Principal Distribution Amount after the distribution
of the Senior Principal Distribution Amount and Class M-1 Principal
Distribution Amount and (ii) the Certificate Principal Balance of
the Class M-2 Certificates immediately prior to the applicable
Distribution Date and (b) on or after the Stepdown Date,
(x) 100% of the remaining Principal Distribution Amount if the
Certificate Principal Balance of each of the Senior and Class M-1
Certificates has been reduced to zero and a Trigger Event exists,
or (y) if a Trigger Event is not in effect, the excess of
(1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to
distributions of the Senior Principal Distribution Amount for such
Distribution Date), (B) the Certificate Principal Balance of
the Class M-1 Certificates (after giving effect to distribution of
the Class M-1 Principal Distribution Amount for such Distribution
Date) and (C) the Certificate Principal Balance of the Class
M-2 Certificates immediately prior to such Distribution Date over
(2) the lesser of (A) 68.30% of the Pool Balance as of
the last day of the related Remittance Period and (B) the Pool
Balance as of the last day of the related Remittance Period minus
the OC Floor.
"Class M-3 Certificate": Any one of the Certificates designated
on the face thereof as a Class M-3 Certificate, substantially in
the form annexed hereto as Exhibit A-8 authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein and each evidencing ownership of an interest
designated as a "regular interest" in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
"Class M-3 Certificate Rate": With respect to any Distribution
Date and the Class M-3 Certificates, the lesser of (A) the sum
of (1) LIBOR and (2) 0.570% per annum (or 0.855% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (B) the Subordinate Net WAC Cap for the Distribution
Date.
"Class M-3 Principal Distribution Amount": As to any
Distribution Date (a) prior to the Stepdown Date, the lesser of (i)
the remaining Principal Distribution Amount after the distribution
of the Senior Principal Distribution Amount, Class M-1 Principal
Distribution Amount and Class M-2 Principal Distribution Amount and
(ii) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to the applicable Distribution Date
and (b) on or after the Stepdown Date, (x) 100% of the
remaining Principal Distribution Amount if the Certificate
Principal Balance of each of the Senior, Class M-1 and Class M-2
Certificates has been reduced to zero and a Trigger Event exists,
or (y) if a Trigger Event is not in effect, the excess of
(1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to
distributions of the Senior Principal Distribution Amount for such
Distribution Date), (B) the Certificate Principal Balance of
the Class M-1 Certificates (after giving effect to distribution of
the Class M-1 Principal Distribution Amount for such Distribution
Date), (C) the Certificate Principal Balance of the Class M-2
Certificates (after giving effect to distribution of the Class M-2
Principal Distribution Amount for such Distribution Date) and
(D) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to such Distribution Date over
(2) the lesser of (A) 71.80% of the Pool Balance as of
the last day of the related Remittance Period and (B) the Pool
Balance as of the last day of the related Remittance Period minus
the OC Floor.
"Class M-4 Certificate": Any one of the Certificates designated
on the face thereof as a Class M-4 Certificate, substantially in
the form annexed hereto as Exhibit A-9 authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein and each evidencing ownership of an interest
designated as a "regular interest" in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
"Class M-4 Certificate Rate": With respect to any Distribution
Date and the Class M-4 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 0.950% per annum
(or 1.425% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-4 Principal Distribution Amount": As to any
Distribution Date (a) prior to the Stepdown Date, the lesser of (i)
the remaining Principal Distribution Amount after the distribution
of the Senior Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution Amount and
Class M-3 Principal Distribution Amount and (ii) the Certificate
Principal Balance of the Class M-4 Certificates immediately prior
to the applicable Distribution Date and (b) on or after the
Stepdown Date, (x) 100% of the remaining Principal
Distribution Amount if the Certificate Principal Balance of each of
the Senior, Class M-1, Class M-2 and Class M-3 Certificates has
been reduced to zero and a Trigger Event exists, or (y) if a
Trigger Event is not in effect, the excess of (1) the sum of
(A) the aggregate Certificate Principal Balance of the Senior
Certificates (after giving effect to distributions of the Senior
Principal Distribution Amount for such Distribution Date),
(B) the Certificate Principal Balance of the Class M-1
Certificates (after giving effect to distribution of the Class M-1
Principal Distribution Amount for such Distribution Date),
(C) the Certificate Principal Balance of the Class M-2
Certificates (after giving effect to distribution of the Class M-2
Principal Distribution Amount for such Distribution Date),
(D) the Certificate Principal Balance of the Class M-3
Certificates (after giving effect to distribution of the Class M-3
Principal Distribution Amount for such Distribution Date) and
(E) the Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date over
(2) the lesser of (A) 76.30% of the Pool Balance as of
the last day of the related Remittance Period and (B) the Pool
Balance as of the last day of the related Remittance Period minus
the OC Floor.
"Class M-5 Certificate": Any one of the Certificates designated
on the face thereof as a Class M-5 Certificate, substantially in
the form annexed hereto as Exhibit A-10 authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein and each evidencing ownership of an interest
designated as a "regular interest" in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
"Class M-5 Certificate Rate": With respect to any Distribution
Date and the Class M-5 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 1.250% per annum
(or 1.875% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-5 Principal Distribution Amount": As to any
Distribution Date (a) prior to the Stepdown Date, the lesser of (i)
the remaining Principal Distribution Amount after the distribution
of the Senior Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution Amount, Class
M-3 Principal Distribution Amount and Class M-4 Principal
Distribution Amount and (ii) the Certificate Principal Balance of
the Class M-5 Certificates immediately prior to the applicable
Distribution Date and (b) on or after the Stepdown Date,
(x) 100% of the remaining Principal Distribution Amount if the
Certificate Principal Balance of each of the Senior, Class M-1,
Class M-2, Class M-3 and Class M-4 Certificates has been reduced to
zero and a Trigger Event exists, or (y) if a Trigger Event is
not in effect, the excess of (1) the sum of (A) the
aggregate Certificate Principal Balance of the Senior Certificates
(after giving effect to distributions of the Senior Principal
Distribution Amount for such Distribution Date), (B) the
Certificate Principal Balance of the Class M-1 Certificates (after
giving effect to distribution of the Class M-1 Principal
Distribution Amount for such Distribution Date), (C) the
Certificate Principal Balance of the Class M-2 Certificates (after
giving effect to distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), (D) the
Certificate Principal Balance of the Class M-3 Certificates (after
giving effect to distribution of the Class M-3 Principal
Distribution Amount for such Distribution Date), (E) the
Certificate Principal Balance of the Class M-4 Certificates (after
giving effect to distribution of the Class M-4 Principal
Distribution Amount for such Distribution Date) and (F) the
Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date over (2) the
lesser of (A) 78.70% of the Pool Balance as of the last day of the
related Remittance Period and (B) the Pool Balance as of the
last day of the related Remittance Period minus the OC Floor.
"Class M-6 Certificate": Any one of the Certificates designated
on the face thereof as a Class M-6 Certificate, substantially in
the form annexed hereto as Exhibit A-11 authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein and each evidencing ownership of an interest
designated as a "regular interest" in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
"Class M-6 Certificate Rate": With respect to any Distribution
Date and the Class M-6 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 1.600% per annum
(or 2.400% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-6 Principal Distribution Amount": As to any
Distribution Date (a) prior to the Stepdown Date, the lesser of (i)
the remaining Principal Distribution Amount after the distribution
of the Senior Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution Amount, Class
M-3 Principal Distribution Amount, Class M-4 Principal Distribution
Amount and Class M-5 Principal Distribution Amount and (ii) the
Certificate Principal Balance of the Class M-6 Certificates
immediately prior to the applicable Distribution Date and (b) on or
after the Stepdown Date, (x) 100% of the remaining Principal
Distribution Amount if the Certificate Principal Balance of each of
the Senior, Class M-1, Class M-2, Class M-3, Class M-4 and Class
M-5 Certificates has been reduced to zero and a Trigger Event
exists, or (y) if a Trigger Event is not in effect, the excess
of (1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to
distributions of the Senior Principal Distribution Amount for such
Distribution Date), (B) the Certificate Principal Balance of
the Class M-1 Certificates (after giving effect to
distribution of the Class M-1 Principal Distribution Amount for
such Distribution Date), (C) the Certificate Principal Balance
of the Class M-2 Certificates (after giving effect to
distribution of the Class M-2 Principal Distribution Amount for
such Distribution Date), (D) the Certificate Principal Balance
of the Class M-3 Certificates (after giving effect to
distribution of the Class M-3 Principal Distribution Amount for
such Distribution Date), (E) the Certificate Principal Balance
of the Class M-4 Certificates (after giving effect to
distribution of the Class M-4 Principal Distribution Amount for
such Distribution Date), (F) the Certificate Principal Balance
at the Class M-5 Certificates (after giving effect to
distribution of the Class M-5 Principal Distribution Amount for
such Distribution Date), and (G) the Certificate Principal
Balance of the Class M-6 Certificates immediately prior to
such Distribution Date over (2) the lesser of (A) 81.20%
of the Pool Balance as of the last day of the related Remittance
Period and (B) the Pool Balance as of the last day of the
related Remittance Period minus the OC Floor.
"Class M-7 Certificate": Any one of the Certificates designated
on the face thereof as a Class M-7 Certificate, substantially in
the form annexed hereto as Exhibit A-12 authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein and each evidencing ownership of an interest
designated as a "regular interest" in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
"Class M-7 Certificate Rate": With respect to any Distribution
Date and the Class M-7 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 2.500% per annum
(or 3.750% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-7 Principal Distribution Amount": As to any
Distribution Date (a) prior to the Stepdown Date, the lesser of (i)
the remaining Principal Distribution Amount after the distribution
of the Senior Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution Amount, Class
M-3 Principal Distribution Amount, Class M-4 Principal Distribution
Amount, Class M-5 Principal Distribution Amount and Class M-6
Principal Distribution Amount and (ii) the Certificate Principal
Balance of the Class M-7 Certificates immediately prior to the
applicable Distribution Date and (b) on or after the Stepdown Date,
(x) 100% of the remaining Principal Distribution Amount if the
Certificate Principal Balance of each of the Senior, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6
Certificates has been reduced to zero and a Trigger Event exists,
or (y) if a Trigger Event is not in effect, the excess of
(1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to
distributions of the Senior Principal Distribution Amount for such
Distribution Date), (B) the Certificate Principal Balance of
the Class M-1 Certificates (after giving effect to
distribution of the Class M-1 Principal Distribution Amount for
such Distribution Date), (C) the Certificate Principal Balance
of the Class M-2 Certificates (after giving effect to
distribution of the Class M-2 Principal Distribution Amount for
such Distribution Date), (D) the Certificate Principal Balance
of the Class M-3 Certificates (after giving effect to distribution
of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Certificate Principal Balance of
the Class M-4 Certificates (after giving effect to distribution of
the Class M-4 Principal Distribution Amount for such Distribution
Date), (F) the Certificate Principal Balance of the Class M-5
Certificates (after giving effect to distribution of the Class M-5
Principal Distribution Amount for such Distribution Date),
(G) the Certificate Principal Balance of the Class M-6
Certificates (after giving effect to distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and
(H) the Certificate Principal Balance of the Class M-7
Certificates immediately prior to such Distribution Date over
(2) the lesser of (A) 83.50% of the Pool Balance as of
the last day of the related Remittance Period and (B) the Pool
Balance as of the last day of the related Remittance Period minus
the OC Floor.
"Class M-8 Certificate": Any one of the Certificates designated
on the face thereof as a Class M-8 Certificate, substantially in
the form annexed hereto as Exhibit A-13 authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein and each evidencing ownership of an interest
designated as a "regular interest" in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
"Class M-8 Certificate Rate": With respect to any Distribution
Date and the Class M-8 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 2.500% per annum
(or 3.750% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-8 Principal Distribution Amount": As to any
Distribution Date (a) prior to the Stepdown Date, the lesser of (i)
the remaining Principal Distribution Amount after the distribution
of the Senior Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution Amount, Class
M-3 Principal Distribution Amount, Class M-4 Principal Distribution
Amount, Class M-5 Principal Distribution Amount, Class M-6
Principal Distribution Amount and Class M-7 Principal Distribution
Amount and (ii) the Certificate Principal Balance of the Class M-8
Certificates immediately prior to the applicable Distribution Date
and (b) on or after the Stepdown Date, (x) 100% of the remaining
Principal Distribution Amount if the Certificate Principal Balance
each Class of Senior Certificates, the Class M-1 Certificates, the
Class M-2 Certificates, the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class M-6
Certificates and the Class M-7 Certificates has been reduced to
zero and a Trigger Event exists, or (y) if a Trigger Event is not
in effect, the excess of (1) the sum of (A) the aggregate
Certificate Principal Balance of the Senior Certificates (after
giving effect to the distribution of the Senior Principal
Distribution Amount on such Distribution Date), (B) the
Certificate Principal Balance of the Class M-1 Certificates
(after giving effect to the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date),
(C) the Certificate Principal Balance of the Class M-2
Certificates (after giving effect to the distribution of the
Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Certificate Principal Balance of the
Class M-3 Certificates (after giving effect to the
distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Certificate Principal Balance
of the Class M-4 Certificates (after giving effect to the
distribution of the Class M-4 Principal Distribution Amount on
such Distribution Date), (F) the Certificate Principal Balance
of the Class M-5 Certificates (after giving effect to the
distribution of the Class M-5 Principal Distribution Amount on
such Distribution Date), (G) the Certificate Principal Balance
of the Class M-6 Certificates (after giving effect to the
distribution of the Class M-6 Principal Distribution Amount on
such Distribution Date), (H) the Certificate Principal Balance
of the Class M-7 Certificates (after giving effect to the
distribution of the Class M-7 Principal Distribution Amount on
such Distribution Date) and (I) the Certificate Principal
Balance of the Class M-8 Certificates immediately prior to
such Distribution Date, over (2) the lesser of (A) 85.80%
of the Pool Balance as of the last day of the related Remittance
Period and (B) the Pool Balance as of the last day of the
related Remittance Period minus the OC Floor.
"Class M-9 Certificate": Any one of the Certificates designated
on the face thereof as a Class M-9 Certificate, substantially in
the form annexed hereto as Exhibit A-14 authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein and each evidencing ownership of an interest
designated as a "regular interest" in the Master REMIC created
hereunder for purposes of the REMIC Provisions.
"Class M-9 Certificate Rate": With respect to any Distribution
Date and the Class M-9 Certificates, the lesser of
(A) the sum of (1) LIBOR and (2) 2.500% per annum
(or 3.750% per annum for each Interest Period occurring after the
Clean-Up Call Date) and (B) the Subordinate Net WAC Cap for
the Distribution Date.
"Class M-9 Principal Distribution Amount": As to any
Distribution Date (a) prior to the Stepdown Date, the lesser of (i)
the remaining Principal Distribution Amount after the distribution
of the Senior Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution Amount, Class
M-3 Principal Distribution Amount, Class M-4 Principal Distribution
Amount, Class M-5 Principal Distribution Amount, Class M-6
Principal Distribution Amount, Class M-7 Principal Distribution
Amount and Class M-8 Principal Distribution Amount and (ii) the
Certificate Principal Balance of the Class M-9 Certificates
immediately prior to the applicable Distribution Date and (b)on or
after the Stepdown Date, (x) 100% of the remaining Principal
Distribution Amount if the Certificate Principal Balance each Class
of Senior Certificates, the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class M-6
Certificates, the Class M-7 Certificates and the Class M-8
Certificates has been reduced to zero and a Trigger Event exists,
or (y) if a Trigger Event is not in effect, the excess of
(1) the sum of (A) the aggregate Certificate Principal
Balance of the Senior Certificates (after giving effect to the
distribution of the Senior Principal Distribution Amount on such
Distribution Date), (B) the Certificate Principal Balance of
the Class M-1 Certificates (after giving effect to the
distribution of the Class M-1 Principal Distribution Amount on
such Distribution Date), (C) the Certificate Principal Balance
of the Class M-2 Certificates (after giving effect to the
distribution of the Class M-2 Principal Distribution Amount on
such Distribution Date), (D) the Certificate Principal Balance
of the Class M-3 Certificates (after giving effect to the
distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Certificate Principal Balance
of the Class M-4 Certificates (after giving effect to the
distribution of the Class M-4 Principal Distribution Amount on
such Distribution Date), (F) the Certificate Principal Balance
of the Class M-5 Certificates (after giving effect to the
distribution of the Class M-5 Principal Distribution Amount on
such Distribution Date), (G) the Certificate Principal Balance
of the Class M-6 Certificates (after giving effect to the
distribution of the Class M-6 Principal Distribution Amount on
such Distribution Date), (H) the Certificate Principal Balance
of the Class M-7 Certificates (after giving effect to the
distribution of the Class M-7 Principal Distribution Amount on
such Distribution Date), (I) the Certificate Principal Balance
of the Class M-8 Certificates (after giving effect to the
distribution of the Class M-8 Principal Distribution Amount on
such Distribution Date) and (J) the Certificate Principal
Balance of the Class M-9 Certificates immediately prior to such
Distribution Date, over (2) the lesser of (A) 88.70% of
the Pool Balance as of the last day of the related Remittance
Period and (B) the Pool Balance as of the last day of the
related Remittance Period minus the OC Floor.
"Class Monthly Interest Amount": With respect to each Class of
Offered Certificates means, with respect to any Distribution Date,
the aggregate amount of interest accrued during the related
Interest Period at the related Certificate Rate on the Certificate
Principal Balance of the Class of Offered Certificates.
"Class P Certificate": Any one of the Certificates designated on
the face thereof as a Class P Certificate, substantially in the
form annexed hereto as Exhibit B-2 authenticated and delivered by
the Trustee, representing the right to distributions as set forth
herein and each evidencing a percentage ownership of the Prepayment
Charges.
"Class Principal Carryover Shortfall": As to any Class of
Subordinate Certificates and any Distribution Date, the excess, if
any, of (i) the sum of (x) the amount of the reduction in
the Certificate Principal Balance of that Class of Subordinate
Certificates on such Distribution Date as a result of the
application of Applied Realized Loss Amounts for such Distribution
Date and (y) the amount of such reductions on prior
Distribution Dates over (ii) the sum of (x) the amount
distributed in respect of the Class Principal Carryover Shortfall
to such Class of Subordinate Certificates on prior Distribution
Dates and (y) the amount of any increases in the Certificate
Principal Balance of that Class of Subordinate Certificates on such
Distribution Date and any prior Distribution Dates as a result of
the application of Recoveries to such Class as provided in Section
7.11(b) hereof.
"Class Principal Distribution Amount": The Senior Principal
Distribution Amount, the Class M-1 Principal Distribution Amount,
the Class M-2 Principal Distribution Amount, the Class M-3
Principal Distribution Amount, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the Class M-6
Principal Distribution Amount, the Class M-7 Principal Distribution
Amount, the Class M-8 Principal Distribution Amount or the Class
M-9 Principal Distribution Amount, as the case may be.
"Class R Certificate": Any one of the Certificates designated on
the face thereof as a Class R Certificate, substantially in the
form annexed hereto as Exhibit C, authenticated and delivered by
the Trustee, representing the right to distributions as set forth
herein. For the purposes of the REMIC Provisions, the Class R
Certificate shall evidence (i) an interest designated as the
R-1 Interest, which is the "residual interest" in REMIC I, the R-2
Interest, which is the "residual interest" in REMIC II and
(ii) an interest designated as the R-3 Interest, which is the
"residual interest" in the Master REMIC. The Owner of the
Class R Certificate shall be entitled to separate such Certificate
into its component R-1 Interest, R-2 Interest and R-3 Interest
parts, as further described in the Class R Certificate attached
hereto as Exhibit C.
"Class X-IO Certificate": Any one of the Certificates designated
on the face thereof as a Class X-IO Certificate, substantially in
the form annexed hereto as Exhibit B-1, authenticated and delivered
by the Trustee, representing the right to distributions as set
forth herein, and evidencing ownership of an interest designated as
a "regular interest" in the Master REMIC created hereunder for the
purposes of the REMIC Provisions.
"Class X-IO Distribution Amount": With respect to any
Distribution Date, the lesser of (i) the aggregate funds, if
any, remaining after the making of all applications, transfers and
disbursements described in Section 7.03(b) clause A.1. through
7.03(b) clause C.14. hereof and (ii) the amount described in
footnote (16) of Section 2.08(g) for the current and for all prior
Distribution Dates less amounts treated as distributed to the Class
X-IO Certificates on prior Distribution Dates pursuant to Section
7.03(b)(C) clauses A.15 and A.20.
"Class X-IO Shortfall Amount": As defined in Section
7.12(e).
"Clean-Up Call Date": The first Distribution Date following the
last day of the Remittance Period on which the Pool Balance has
declined to 10% or less of the Pool Balance as of the Cut-Off
Date.
"Closing": As defined in Section 4.02 hereof.
"Code": The Internal Revenue Code of 1986, as amended.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 8.10(a)
hereof.
"Conduit Home Equity Loans": The home equity loans listed on the
Conduit Schedule of Home Equity Loans.
"Conduit Schedule of Home Equity Loans": The Schedule of Home
Equity Loans attached as Schedule I-F hereto.
"Conduit Seller": Auburn Funding, LLC, a Delaware limited
liability company.
"Conduit Servicer": Nationstar Mortgage in its capacity as
servicer with respect to the Conduit Warehousing Facility.
"Conduit Warehousing Facility": The Mortgage Loan Purchase and
Servicing Agreement dated January 5, 2007, among Auburn Funding,
LLC and Nationstar Mortgage, as amended.
"Corporate Trust Office": For all purposes other
than certificate transfers and final payments, the principal office
of the Trustee at 101 Barclay Street Floor 4W, New York, New York
10286, Attention: Structured Finance Services, Nationstar Home
Equity Loan Trust 2007-B. For purposes of certificate
transfers and final payment, at 2001 Bryan Street, 9 th
Floor, Dallas, Texas 75201, Attention: Structured Finance
Services, Nationstar Home Equity Loan Trust 2007-B (as of the
Startup Day), or at such other address as the Trustee may designate
by notice to the Depositor, the Seller, the Servicer and the
Owners, or the principal office of any successor Trustee
hereunder.
"Coupon Rate": The rate of interest borne by each Note from time
to time.
"Cram Down Loss": With respect to a Home Equity Loan, if a court
of appropriate jurisdiction in an insolvency proceeding shall have
issued an order reducing the Loan Balance of such Home Equity Loan,
the amount of such reduction. A "Cram Down Loss" shall be
deemed to have occurred on the date of issuance of such order.
"Cumulative Loss Trigger Event": With respect to any
Distribution Date and the Home Equity Loans, shall have occurred if
the fraction, expressed as a percentage, obtained by dividing (x)
the aggregate amount of cumulative Realized Losses incurred on the
Home Equity Loans from the Cut-Off Date through the last day of the
related Remittance Period (less the aggregate amount of Recoveries
during such period) by (y) the aggregate Loan Balance of the Home
Equity Loans as of the Cut-Off Date, exceeds the applicable
percentage described below with respect to such Distribution
Date:
|
Distribution Date
|
Loss Percentage
|
|
May 2009 to April 2010
|
1.75% for the first month, plus an additional 1/12 th
of 2.15% for each month thereafter.
|
|
May 2010 to April 2011
|
3.90% for the first month, plus an additional 1/12 th
of 2.30% for each month thereafter.
|
|
May 2011 to April 2012
|
6.20% for the first month, plus an additional 1/12 th
of 1.90% for each month thereafter.
|
|
May 2012 to April 2013
|
8.10% for the first month, plus an additional 1/12 th
of 1.10% for each month thereafter.
|
|
May 2013 to April 2014
|
9.20% for the first month, plus an additional 1/12 th
of 0.15% for each month thereafter.
|
|
May 2014 and thereafter
|
9.35%
|
"Custodial Agreement": The Custodial Agreement dated as of April
1, 2007 among the Custodian, the Servicer and the Trustee.
"Custodian": The Bank of New York Trust Company, National
Association, as Custodian on behalf of the Trustee pursuant to the
Custodial Agreement and any successor Custodian.
"Cut-Off Date": April 1, 2007.
"Delayed Delivery Home Equity Loans": The Home Equity Loans for
which all or a portion of a related File is not delivered to the
Trustee or the Custodian on behalf of the Trustee on the Startup
Day. The number of Delayed Delivery Home Equity Loans shall
not exceed 10% of the aggregate Loan Balance of the Home Equity
Loans as of the Cut-Off Date. To the extent that Nationstar
Mortgage shall be in possession of any Files with respect to any
Delayed Delivery Home Equity Loan, until delivery of such File to
the Trustee or the Custodian on behalf of the Trustee, as provided
in Section 3.05, Nationstar Mortgage shall hold such files as
Servicer hereunder, as agent and in trust for the Trustee.
"Delinquency Advance": As defined in Section 8.09(a) hereof.
"Delinquency Arrearage": With respect to any Home Equity Loan,
advances made prior to the Cut-off Date by Nationstar Mortgage, as
servicer, in respect of delinquent payments of interest, which
remain unreimbursed as of the Cut-off Date.
"Delinquency Event": A Delinquency Event shall have occurred and
be continuing if, at any time, the 60+ Delinquency Percentage
(Rolling Three Month) exceeds 31.81% of the Senior Enhancement
Percentage from the prior period.
"Delinquent": A Home Equity Loan is "Delinquent" if any payment
due thereon is not made by the Mortgagor by the close of business
on the related Due Date; provided, however, if a Home Equity Loan
has an Arrearage, such Home Equity Loan shall not be
"Delinquent" due to such Arrearage. A Home Equity Loan is "30
days Delinquent" if such payment has not been received by the close
of business on the corresponding day of the month immediately
succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a
31-day month in which a payment was due on the 31 st day
of such month) then on the last day of such immediately succeeding
month. Similarly for "60 days Delinquent," "90 days
Delinquent" and so on.
"Delivery Order": The delivery order in the form set forth as
Exhibit G hereto and delivered by the Depositor to the Trustee on
the Startup Day pursuant to Section 4.01 hereof.
"Depositor": Nationstar Funding LLC, a Delaware limited
liability company, or any successor thereto.
"Depository": The Depository Trust Company, 7 Hanover Square,
New York, New York, 10004, and any successor Depository.
"Designated Depository Institution": With respect to the
Principal and Interest Account, a trust account maintained by the
trust department of a federal or state chartered depository
institution, acting in its fiduciary capacity, having combined
capital and surplus of at least $100,000,000; provided, however,
that if the Principal and Interest Account is not maintained with
the Trustee, (i) such institution shall have a long-term debt
rating of at least "A" by Standard & Poor’s, "A2" by
Moody’s and, if rated by Fitch, "A" by Fitch and (ii) the
Servicer shall provide the Trustee with a statement, which the
Trustee will send to the Owners, identifying the location and
account information of the Principal and Interest Account upon a
change in the location of such account.
"Direct Participant" or "DTC Participant": Any broker-dealer,
bank or other financial institution for which the Depository holds
Offered Certificates from time to time as a securities
depository.
"Disqualified Organization": The meaning set forth from time to
time in the definition thereof at Section 860E(e)(5) of the Code
(or any successor statute thereto).
"Distribution Date": Any date on which the Trustee is required
to make distributions to the Owners, which shall be the 25
th day of each month or if such day is not a Business
Day, the next Business Day thereafter, commencing in the month
following the Startup Day.
"Downgrade Provisions": Provisions of the Swap Agreement which
are triggered if the short-term or long-term credit ratings of the
Swap Provider fall below certain levels specified in the Swap
Agreement.
"Due Date": With respect to any Home Equity Loan, the date on
which the Monthly Payment with respect to such Home Equity Loan is
required to be paid pursuant to the related Note exclusive of any
days of grace.
"EDGAR": The Commission’s Electronic Data Gathering,
Analysis and Retrieval system.
"Eligible Account": Either (A) a segregated account or accounts
maintained with an institution whose deposits are insured by the
FDIC, the unsecured and uncollateralized debt obligations of which
institution shall be rated "AA" or higher by Standard &
Poor’s and, in the case of any institution other than The
Bank of New York, "Aa2" or higher by Moody’s and, if rated by
Fitch, "AA" or higher by Fitch, (in the case of its long-term
obligations), and in the highest short term rating category by each
of Standard & Poor’s, Moody’s and, if rated by
Fitch, Fitch (in the case of its short-term obligations), and which
is (i) a federal savings and loan association duly organized,
validly existing and in good standing under the federal banking
laws, (ii) an institution duly organized, validly existing and in
good standing under the applicable banking laws of any state, (iii)
a national banking association duly organized, validly existing and
in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved in writing by
each of the Rating Agencies or (B) a segregated trust account or
accounts maintained with the Corporate Trust Office of the Trustee,
or the trust department of a federal or state chartered depository
institution acceptable to each Rating Agency, having capital and
surplus of not less than $100,000,000, acting in its fiduciary
capacity.
"Eligible Investments": Those investments so designated pursuant
to Section 7.07 hereof.
"ERISA": The Employee Retirement Income Security Act of
1974, as amended.
"ERISA-Qualifying Underwriting": A best efforts or firm
commitment underwriting or private placement that meets the
requirements of an Underwriter’s Exemption.
"ERISA-Restricted Certificate": Any Class M-8, Class M-9,
Class X-IO, Class P and Class R Certificate and any Certificate
with a rating below the lowest applicable rating permitted under an
Underwriter’s Exemption.
"ERISA-Restricted Swap Certificate": Any Offered
Certificate other than the Class M-8 and Class M-9
Certificates.
"Events of Default": Under the Swap Agreement (each a
"Swap Default"), among others, the following standard events of
default under the ISDA Master Agreement, as described in Sections
5(a)(i), 5(a)(vii) and 5(a)(viii) of the ISDA Master Agreement:
·
Failure to Pay or Deliver,
·
"Bankruptcy" (as amended in the Swap Agreement) and
·
"Merger without Assumption" (but only with respect to the Swap
Provider).
"Excess Interest": As to any Distribution Date, the amounts
remaining after the application of payments pursuant to Section
7.03(b) clauses A., B. and C.1. through C.12.
"Excess Overcollateralization Amount": As to any Distribution
Date, the lesser of (i) the Aggregate Principal Amount for that
Distribution Date and (ii) the excess, if any, of (x) the
Overcollateralization Amount (assuming 100% of the Aggregate
Principal Amount is distributed on the Senior and Subordinate
Certificates) over (y) the Required Overcollateralization
Amount.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Exchange Act Reports": Any reports on Form 10-D, Form 8-K and
Form 10-K required to be filed by the Depositor with respect to the
Trust Estate under the Exchange Act.
"FAS 140": The Statement of Financial Accounting Standards No.
140 issued by the Financial Accounting Standards Board, dated
September 2000.
"FDIC": The Federal Deposit Insurance Corporation, a corporate
instrumentality of the United States, or any successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created pursuant to the
Emergency Home Finance Act of 1970, as amended, or any successor
thereof.
"File": The documents delivered to the Custodian on behalf of
the Trustee pursuant to Section 3.05(b) hereof pertaining to a
particular Home Equity Loan and any additional documents required
to be added to the File pursuant to this Agreement.
"Final Certification": As defined in Section 3.06(c) hereof.
"Final Recovery Determination": With respect to any defaulted
Home Equity Loan or REO Property (other than a Home Equity Loan
purchased by the Seller, the Depositor or the Servicer), a
determination made by the Servicer that all recoveries which the
Servicer, in its reasonable business judgment, expects to be
finally recoverable in respect thereof have been so recovered or
that the Servicer believes in its reasonable business judgment the
cost of obtaining any additional recoveries therefrom would exceed
the amount of such recoveries. The Servicer shall maintain
records of each Final Recovery Determination.
"Final Scheduled Distribution Date": As set out in Section
2.08(g) hereof with respect to each Certificate.
"First Mortgage Loan": A Home Equity Loan which constitutes a
first priority mortgage lien with respect to any Property.
"Fitch": Fitch Ratings or any successor thereto.
"Fixed Rate Home Equity Loan": With respect to the Home
Equity Loans, the fixed rate Home Equity Loans identified as such
in Schedule I-A or Schedule I-B hereto, including any Qualified
Replacement Mortgages delivered in replacement thereof. With
respect to the Conduit Home Equity Loans, the fixed rate Home
Equity Loans listed in the Conduit Schedule of Home Equity Loans
that are also identified as such in Schedule I-A or Schedule I-B
hereto, and with respect to the Seller Home Equity Loans, the fixed
rate Home Equity Loans listed in the Seller Schedule of Home Equity
Loans that are also identified as such in Schedule I-A or Schedule
I-B hereto.
"Fixed Swap Payment": With respect to any Distribution
Date, an amount equal to the product of (i) 4.92%, (ii) the
lesser of (a) the related Scheduled Notional Amount (as set
forth on Schedule I-H hereto), and (b) (x) the aggregate
Certificate Principal Balance of the Offered Certificates (other
than the Class M-8 and Class M-9 Certificates) as of such
Distribution Date prior to giving effect to any payments on such
Distribution Date divided by (y) 100, (iii) a fraction, the
numerator of which is 30 and the denominator of which is 360 and
(iv) the related Payment Factor (as set forth on Schedule I-H
hereto).
"Floating Swap Payment": With respect to any Distribution
Date, a floating amount equal to the product of (i) LIBOR (as
determined pursuant to the Swap Agreement for such Distribution
Date), (ii) the lesser of (a) the related Scheduled
Notional Amount (as set forth on Schedule I-H hereto), and (b) (x)
the aggregate Certificate Principal Balance of the Offered
Certificates (other than the Class M-8 and Class M-9 Certificates)
as of such Distribution Date prior to giving effect to any payments
on such Distribution Date divided by (y) 100, (iii) a fraction, the
numerator of which is the actual number of days elapsed from and
including the previous Distribution Date to but excluding the
current Distribution Date and the denominator of which is 360 and
(iv) the related Payment Factor (as set forth on Schedule I-H
hereto).
"FNMA": The Federal National Mortgage Association, a
federally-chartered and privately-owned corporation existing under
the Federal National Mortgage Association Charter Act, as amended,
or any successor thereof.
"FNMA Guide": FNMA’s Servicing Guide, as the same may be
amended by FNMA from time to time.
"Form 10-D Disclosure Item": With respect to any Person,
any material litigation or governmental proceedings pending against
such Person, or against any of the Trust Estate, the Depositor, the
Trustee, the Servicer or any Subservicer that would have a
materially adverse effect on the Certificateholders, if such Person
has actual knowledge thereof.
"Form 10-K Disclosure Item": With respect to any Person,
(a) any Form 10-D Disclosure Item and (b) any
affiliations, or relationships entered into outside the ordinary
course of business, between such Person and any Item 1119
Party.
"Group Balance": With respect to any date and Home Equity Loan
Group, the aggregate of the Loan Balances of all Home Equity Loans
of the related Home Equity Loan Group as of such date.
"Group": Any of Group 1 or Group 2, as applicable.
"Group 1": With respect to the Home Equity Loans, the pool of
Home Equity Loans identified in Schedule I-A hereto, including any
Qualified Replacement Mortgages delivered in replacement thereof.
Group 1 refers, with respect to the Conduit Home Equity
Loans, to the Home Equity Loans listed in the Conduit Schedule of
Home Equity Loans that are also assigned to Group 1 in Schedule I-A
hereto, and with respect to the Seller Home Equity Loans, to the
Home Equity Loans listed in the Seller Schedule of Home Equity
Loans that are also assigned to Group 1 in Schedule I-A hereto.
With respect to the Offered Certificates, the Group 1
Certificates.
"Group 1 Allocation Percentage": With respect to any
Distribution Date, a fraction, expressed as a percentage, the
numerator of which is the Basic Principal Amount derived from the
Group 1 Home Equity Loans, and the denominator of which is the
Aggregate Principal Amount.
"Group 1 Certificates": The Class 1-AV-1 Certificates.
"Group 1 Monthly Remittance Amount": As of any Monthly
Remittance Date, (A) the sum, without duplication, of (i) all
interest received (other than interest received on or after the
Cut-off Date that accrued on the Group 1 Home Equity Loans during
March 2007) (including any related Delinquency Advances) during the
related Remittance Period with respect to the Home Equity Loans in
Group 1 (net of the Group 1 Servicing Fee), (ii) all Compensating
Interest paid by the Servicer on such Monthly Remittance Date with
respect to Group 1, (iii) the portion of the Loan Purchase Price
amounts, and Substitution Amounts relating to interest on the Home
Equity Loans in Group 1 paid by Nationstar Mortgage or the Servicer
on or prior to such Monthly Remittance Date, (iv) the interest
portion of all Net Liquidation Proceeds actually collected by the
Servicer with respect to the Home Equity Loans in Group 1 during
the related Remittance Period, (v) the principal actually collected
by the Servicer with respect to Home Equity Loans in Group 1 during
the related Remittance Period, (vi) the outstanding principal
balance of each Home Equity Loan in Group 1 that was purchased from
the Trustee on or prior to such Monthly Remittance Date, to the
extent such outstanding principal balance was actually deposited in
the Principal and Interest Account on or prior to such Monthly
Remittance Date, (vii) any Substitution Amounts relating to
principal delivered by Nationstar Mortgage in connection with a
substitution of a Home Equity Loan in Group 1, to the extent such
Substitution Amounts were actually deposited in the Principal and
Interest Account on or prior to such Monthly Remittance Date,
(viii) the principal portion of all Net Liquidation Proceeds and
Recoveries actually collected by the Servicer with respect to Home
Equity Loans in Group 1 during the related Remittance Period and
(ix) the amount of investment losses required to be deposited
pursuant to Section 8.08(b); minus (B) any amounts netted from the
foregoing or withdrawn from the Principal and Interest Account by
the Servicer as permitted by this Agreement.
"Group 1 Net WAC Cap": With respect to any Distribution Date,
and the Group 1 Certificates, a rate per annum equal to the product
of (i) the excess, if any, of (a) the weighted average of the Net
Coupon Rates on the Group 1 Home Equity Loans as of the beginning
of the related Remittance Period over (b) the Swap Expense Fee Rate
and (ii) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the related
interest period.
"Group 1 Net WAC Cap Carryover": With respect to any
Distribution Date, and the Group 1 Certificates, the sum of (A) the
excess of (1) the amount of interest that the Group 1 Certificates
would otherwise be entitled to receive on the Distribution Date had
the Certificate Rate for such Class been calculated at the
Certificate Rate for such Class and Distribution Date without
regard to the Group 1 Net WAC Cap over (2) the amount of interest
payable on such Class at the respective Certificate Rate for such
Class for the Distribution Date and (B) the excess described in
clause (A) for such Class for all previous Distribution Dates
(including any interest accrued on that amount at the related
Certificate Rate without regard to the Group 1 Net WAC Cap) not
previously paid to such Class.
"Group 1 Principal Distribution Amount": With respect to
(A) any Distribution Date prior to the Stepdown Date or during the
continuation of a Trigger Event, the product of (i) the Principal
Distribution Amount for that Distribution Date and (ii) the Group 1
Allocation Percentage and (B) any other Distribution Date, the
excess, if any, of (1) the aggregate Certificate Principal Balances
of the Group 1 Certificates immediately prior to that Distribution
Date over (i) the lesser of (a) 49.70% of the aggregate Loan
Balance of the Group 1 Home Equity Loans as of the last day of the
related Remittance Period and (b) the aggregate Loan Balance of the
Group 1 Home Equity Loans as of the last date of the related
Remittance Period minus 0.50% of the aggregate Loan Balance of the
Group 1 Home Equity Loans as of the Cut-Off Date.
"Group 1 REMIC Cap Carryover": With respect to any Distribution
Date, and for the Group 1 Certificates, the sum of (A) the excess
of (1) the amount of interest that the Group 1 Certificates is
entitled to receive on the Distribution Date (or, if greater, would
be entitled to receive on the Distribution Date had the Certificate
Rate for such Class been calculated at the Certificate Rate for
such Class and Distribution Date without regard to the Group 1 Net
WAC Cap) over (2) the amount of interest payable on the Master
REMIC Regular Certificate with a Class designation corresponding to
the Group 1 Certificates at the respective certificate interest
rate for such Master REMIC Regular Certificate for the Distribution
Date, as provided in Section 2.08 hereof, and (B) the excess
described in clause (A) for such Class for all previous
Distribution Dates (including any interest accrued on that amount
at the related Certificate Rate without regard to the Group 1 Net
WAC Cap) not previously paid to such Class.
"Group 2": With respect to the Home Equity Loans, the pool of
Home Equity Loans identified in Schedule I-B hereto, including any
Qualified Replacement Mortgages delivered in replacement thereof.
Group 2 refers, with respect to the Conduit Home Equity Loans, to
the Home Equity Loans listed in the Conduit Schedule of Home Equity
Loans that are also assigned to Group 2 in Schedule I-B hereto, and
with respect to the Seller Home Equity Loans, to the Home Equity
Loans listed in the Seller Schedule of Home Equity Loans that are
also assigned to Group 2 in Schedule I-B hereto. With respect to
the Offered Certificates, the related Class or Classes of Group 2
Certificates, as the context requires.
"Group 2 Allocation Percentage": With respect to any
Distribution Date, a fraction, expressed as a percentage, the
numerator of which is the Basic Principal Amount derived from the
Group 2 Home Equity Loans, and the denominator of which is the
Aggregate Principal Amount.
"Group 2 Certificates": The Class 2-AV-1, Class 2-AV-2, Class
2-AV-3 and Class 2-AV-4 Certificates.
"Group 2 Monthly Remittance Amount": As of any Monthly
Remittance Date, (A) the sum, without duplication, of (i) all
interest received (other than interest received on or after the
Cut-off Date relating to interest that accrued on the Group 2 Home
Equity Loans during March 2007) (including any related Delinquency
Advances) during the related Remittance Period with respect to the
Home Equity Loans in Group 2 (net of the Group 2 Servicing Fee),
(ii) all Compensating Interest paid by the Servicer on such Monthly
Remittance Date with respect to Group 2, (iii) the portion of the
Loan Purchase Price amounts and Substitution Amounts relating to
interest on the Home Equity Loans in Group 2 paid by Nationstar
Mortgage or the Servicer on or prior to such Monthly Remittance
Date, (iv) the interest portion of all Net Liquidation Proceeds
actually collected by the Servicer with respect to the Home Equity
Loans in Group 2 during the related Remittance Period, (v) the
principal actually collected by the Servicer with respect to Home
Equity Loans in Group 2 during the related Remittance Period, (vi)
the outstanding principal balance of each Home Equity Loan in Group
2 that was purchased from the Trustee on or prior to such Monthly
Remittance Date, to the extent such outstanding principal balance
was actually deposited in the Principal and Interest Account on or
prior to such Monthly Remittance Date, (vii) any Substitution
Amounts relating to principal delivered by Nationstar Mortgage in
connection with a substitution of a Home Equity Loan in Group 2, to
the extent such Substitution Amounts were actually deposited in the
Principal and Interest Account on or prior to such Monthly
Remittance Date, (viii) the principal portion of all Net
Liquidation Proceeds and Recoveries actually collected by the
Servicer with respect to Home Equity Loans in Group 2 during the
related Remittance Period and (ix) the amount of investment losses
required to be deposited pursuant to Section 8.08(b); minus (B) any
amounts netted from the foregoing or withdrawn from the Principal
and Interest Account by the Servicer as permitted by this
Agreement.
"Group 2 Net WAC Cap": With respect to any Distribution Date,
and for any Class of Group 2 Certificates, a rate per annum equal
to the product of (i) the excess, if any, of (a) the weighted
average of the Net Coupon Rates on the Group 2 Home Equity Loans as
of the beginning of the related Remittance Period over (b) the Swap
Expense Fee Rate and (ii) a fraction, the numerator of which is 30
and the denominator of which is the actual number of days in the
related interest period.
"Group 2 Net WAC Cap Carryover": With respect to any
Distribution Date and the Group 2 Certificates, the sum of (A) the
excess of (1) the amount of interest the related Class of Group 2
Certificates would otherwise be entitled to receive on the
Distribution Date had its Certificate Rate been calculated at the
Certificate Rate for such Class and Distribution Date without
regard to the Group 2 Net WAC Cap over (2) the amount of interest
payable on such Class at the Certificate Rate for such Class for
the Distribution Date and (B) the excess described in clause (A)
for such Class for all previous Distribution Dates (including any
interest accrued thereon at the related Certificate Rate without
regard to the Group 2 Net WAC Cap) not previously paid to such
Class.
"Group 2 Principal Distribution Amount": With respect to
(A) any Distribution Date prior to the Stepdown Date or during the
continuation of a Trigger Event, the product of (i) the Principal
Distribution Amount for that Distribution Date and (ii) the Group 2
Allocation Percentage and (B) any other Distribution Date, the
excess, if any, of (1) the aggregate Certificate Principal Balances
of the Group 2 Certificates immediately prior to that Distribution
Date over (i) the lesser of (a) 49.70% of the aggregate Loan
Balance of the Group 2 Home Equity Loans as of the last day of the
related Remittance Period and (b) the aggregate Loan Balance of the
Group 2 Home Equity Loans as of the last date of the related
Remittance Period minus 0.50% of the aggregate Loan Balance of the
Group 2 Home Equity Loans as of the Cut-Off Date.
"Group 2 REMIC Cap Carryover": With respect to any Distribution
Date, and for the Group 2 Certificates, the sum of (A) the excess
of (1) the amount of interest that the Group 2 Certificates is
entitled to receive on the Distribution Date (or, if greater, would
be entitled to receive on the Distribution Date had the Certificate
Rate for such Class been calculated at the Certificate Rate for
such Class and Distribution Date without regard to the Group 2 Net
WAC Cap) over (2) the amount of interest payable on the Master
REMIC Regular Certificate with a Class designation corresponding to
the Group 2 Certificates at the respective certificate interest
rate for such Master REMIC Regular Certificate for the Distribution
Date, as provided in Section 2.08 hereof, and (B) the excess
described in clause (A) for such Class for all previous
Distribution Dates (including any interest accrued on that amount
at the related Certificate Rate without regard to the Group 2 Net
WAC Cap) not previously paid to such Class.
"Group Subordinate Amount": With respect to each Group and any
Distribution Date, is the excess of the aggregate Loan Balance of
the related Group as of the first day of the related Remittance
Period, over the aggregate Certificate Principal Balance of the
Senior Certificates of such Group immediately prior to such
Distribution Date.
"Highest Lawful Rate": As defined in Section 11.13 hereof.
"Home Equity Loan Assets": The meaning set forth under the
heading "CONVEYANCE" herein.
"Home Equity Loan Group" or "Group": Group 1 or Group 2, as the
case may be. References herein to the related Class of
Offered Certificates, when used with respect to a Home Equity Loan
Group or Group, shall mean (A) in the case of Group 1, the Group 1
Certificates and (B) in the case of Group 2, the related Class of
Group 2 Certificates.
"Home Equity Loans": The Conduit Home Equity Loans and/or the
Seller Home Equity Loans, as applicable, together with any
Qualified Replacement Mortgages substituted therefor in accordance
with this Agreement, as from time to time are held as a part of the
Trust Estate. Where applicable, the term "Home Equity Loan"
includes (i) the terms "First Mortgage Loan" and "Second Mortgage
Loan", and (ii) any Home Equity Loan which is Delinquent, relates
to a foreclosure or relates to a Property which is REO Property
prior to such REO Property’s disposition by the Trust.
Any home equity loan which, although intended by the parties
hereto to have been, and which purportedly was, transferred and
assigned to the Trust by the Depositor, in fact was not transferred
and assigned to the Trust for any reason whatsoever, including,
without limitation, the incorrectness of the statement set forth in
Section 3.04(b)(1)(x) hereof with respect to such home equity loan,
shall nevertheless be considered a "Home Equity Loan" for all
purposes of this Agreement.
"Indirect Participant": Any financial institution for whom any
Direct Participant holds an interest in an Offered Certificate.
"Insurance Policy": Any hazard, flood, title or primary mortgage
insurance policy relating to a Home Equity Loan plus any amount
remitted under Section 8.11 hereof.
"Interest Period": With respect to each Distribution Date and
the Offered Certificates, the period from and including the
preceding Distribution Date (or the Startup Day in the case of the
first Distribution Date) to and including the day preceding the
related Distribution Date with interest accruing on the basis of
the actual number of days elapsed in the related Interest Period
and a year of 360 days.
"Item 1119 Party": The Depositor, the Sellers, the Servicer, the
Trustee, any Subservicer, any originator identified in the
Prospectus Supplement and any other material transaction party, as
identified in Exhibit V hereto, as updated pursuant to Section
12.04.
"Latest Possible Maturity Date": The date determined as of the
Cut-Off Date that is the first Distribution Date following the
third anniversary of the scheduled maturity of the Home Equity Loan
with the latest scheduled maturity.
"LIBOR": With respect to any Interest Period for the Offered
Certificates, the rate determined by the Trustee on the related
LIBOR Determination Date on the basis of the offered rate for
one-month U.S. dollar deposits as such rate appears on Telerate
Page 3750 as of 11:00 a.m. (London time) on such date; provided
that if such rate does not appear on Telerate Page 3750, the rate
for such date will be determined on the basis of the rates at which
one-month U.S. dollar deposits are offered by the Reference Banks
at approximately 11:00 a.m. (London time) on such date to prime
banks in the London interbank market. In such event, the
Trustee will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will
be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer
than two quotations are provided as requested, the rate for that
date will be the arithmetic mean of the rates quoted by major banks
in New York City, selected by the Servicer, at approximately 11:00
a.m. (New York City time) on such date for one-month U.S. dollar
loans to leading European banks.
"LIBOR Determination Date": With respect to any Interest Period
for the Offered Certificates, the second London Business Day
preceding the commencement of such Interest Period.
"Limited Exchange Act Reporting Obligations": The obligations of
the Servicer with respect to notice and information to be provided
to the Depositor under Article XII (except Section 12.07(a)(i) and
(ii)).
"Liquidated Loan": A Home Equity Loan as to which a Final
Recovery Determination has been made.
"Liquidation Proceeds": With respect to any Liquidated Loan, all
amounts (including the proceeds of any Insurance Policy) recovered
by the Servicer in connection with such Liquidated Loan, whether
through trustee’s sale, foreclosure sale or otherwise.
"Loan Balance": With respect to each Home Equity Loan and as of
any date of determination, the actual outstanding principal balance
thereof on the Cut-Off Date or relevant Replacement Cut-Off Date
with respect to a Qualified Replacement Mortgage less any principal
payments relating to such Home Equity Loan included in previous
Monthly Remittance Amounts, provided, however, that the Loan
Balance for any Home Equity Loan that has become a Liquidated Loan
shall be zero as of the first day of the Remittance Period
following the Remittance Period in which such Home Equity Loan
becomes a Liquidated Loan, and at all times thereafter.
"Loan Purchase Price": With respect to any Home Equity Loan
purchased from the Trust on or prior to a Monthly Remittance Date
pursuant to Section 3.04, 3.06(b) or 8.10(b) hereof, an amount
equal to the outstanding principal balance of such Home Equity Loan
as of the date of purchase (assuming that the Monthly Remittance
Amount remitted by the Servicer on such Monthly Remittance Date has
already been remitted), plus all accrued and unpaid interest on
such Home Equity Loan at the Coupon Rate to but not including the
date of such purchase together with (without duplication) the
aggregate amounts of (i) all unreimbursed Delinquency Advances and
Servicing Advances theretofore made with respect to such Home
Equity Loan, (ii) all Delinquency Advances which the Servicer
has theretofore failed to remit with respect to such Home Equity
Loan, (iii) all reimbursed Delinquency Advances and Servicing
Advances to the extent that reimbursement is not made from the
Mortgagor and (iv) any costs and damages incurred by the Trust in
connection with any violation by the Home Equity Loan of any
predatory or abusive lending law.
"Loan-to-Value Ratio": As of any particular date (i) with
respect to any First Mortgage Loan, the percentage obtained by
dividing the Appraised Value into the original principal balance of
the Note relating to such First Mortgage Loan and (ii) with respect
to any Second Mortgage Loan, the percentage obtained by dividing
the Appraised Value as of the date of origination of such Second
Mortgage Loan into an amount equal to the sum of (a) the remaining
principal balance of the Senior Lien relating to such Second
Mortgage Loan as of the date of origination of the related Second
Mortgage Loan and (b) the original principal balance of the Note
relating to such Second Mortgage Loan.
"London Business Day": Any day on which dealings in deposits of
United States dollars are transacted in the London interbank
market.
"Manufactured Home": A unit of manufactured housing, including
all accessions thereto, securing the indebtedness of the Mortgagor
under the related Home Equity Loan treated as real estate under
applicable state law.
"Master REMIC": The segregated group of assets consisting of the
REMIC II Regular Interests (as defined in Section 2.08 hereof) and
constituting a REMIC created hereunder.
"Maximum Rate": With respect to any Home Equity Loan, means the
maximum rate at which interest may accrue on such Home Equity
Loan.
"Monthly Payment": With respect to any Home Equity Loan and any
Remittance Period, the payment of principal, if any, and interest
due on the Due Date in such Remittance Period pursuant to the
related Note.
"Monthly Remittance Amount": The sum of the Group 1 Monthly
Remittance Amount and the Group 2 Monthly Remittance Amount.
"Monthly Remittance Date": The 18 th day of each
month, or if the 18 th day is not a Business Day, the
preceding Business Day.
"Moody’s": Moody’s Investors Service, Inc. or any
successor thereto.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on an estate in fee simple interest
in real property securing a Note.
"Mortgagor": Each obligor on a Note.
"Nationstar Mortgage": Nationstar Mortgage LLC, a Delaware
limited liability company.
"Net Coupon Rate": With respect to any Home Equity Loan, means a
rate per annum equal to the Coupon Rate of such Home Equity Loan
minus the sum of (i) the rate at which the Servicing Fee accrues
and (ii) the rate at which the Trustee Fee accrues (each expressed
as a per annum percentage of the aggregate Loan Balance of the Home
Equity Loans in the related Group).
"Net Liquidation Proceeds": As to any Liquidated Loan,
Liquidation Proceeds net of expenses incurred by the Servicer
(including unreimbursed Servicing Advances) in connection with the
liquidation of such Home Equity Loan, unreimbursed Delinquency
Advances relating to such Home Equity Loan and Arrearages relating
to such Home Equity Loan, if any. In no event shall Net
Liquidation Proceeds with respect to any Liquidated Loan be less
than zero.
"Net Subordination Deficiency" With respect to any
Distribution Date, the excess, if any, of (1) the Subordination
Deficiency for that Distribution Date over (2) the Excess Interest
for that Distribution Date.
"Net Swap Payment": In the case of payments made by the
Supplemental Interest Trust, the excess, if any, of (x) the Fixed
Swap Payment over (y) the Floating Swap Payment. In the case
of payments made by the Swap Provider, the excess, if any, of (x)
the Floating Swap Payment over (y) the Fixed Swap Payment. In
each case, the Net Swap Payment shall not be less than zero.
"Net WAC Cap": The Group 1 Net Rate Cap, the Group 2 Net
WAC Cap or the Subordinate Net WAC Cap, as applicable.
"Net WAC Cap Carryover": The Group 1 Net WAC Cap
Carryover, the Group 2 Net WAC Cap Carryover or the Subordinate Net
WAC Cap Carryover, as applicable.
"Net WAC Cap Carryover Reserve Fund": The Net WAC Cap Carryover
Reserve Fund established pursuant to Section 7.02(a) and maintained
as described in Section 7.04.
"Nonrecoverable Advance": With respect to any Home Equity Loan
for which a Final Recovery Determination has been made, means any
Delinquency Advance or Servicing Advance previously made and not
reimbursed from proceeds on the related Home Equity Loan which the
Servicer has determined, in good faith business judgment, as
evidenced by an Officer’s Certificate delivered to the
Trustee no later than the Business Day following such
determination, would not be ultimately recovered.
"Note": The note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Home Equity Loan.
"OC Floor": An amount equal to 0.50% of the Pool Balance as of
the Cut-Off Date.
"Offered Certificate": Any one of the Class 1-AV-1, Class
2-AV-1, Class 2-AV-2, Class 2-AV-3, Class 2-AV-4, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class
M-8 and Class M-9 Certificates.
"Officer’s Certificate": A certificate signed by any
Authorized Officer of any Person delivering such certificate and
delivered to the Trustee.
"Operative Documents": Collectively, this Agreement, the
Certificates and the Custodial Agreement.
"Opinion of Counsel": A written opinion of counsel acceptable,
in form and substance, to the Trustee and delivered to the Trustee
and the Rating Agencies.
"Original Aggregate Loan Balance": The sum of the Original Group
1 Loan Balance and the Original Group 2 Loan Balance.
"Original Group 1 Loan Balance": The aggregate Loan Balance of
all the Home Equity Loans in Group 1 as of the Cut-Off Date, which
is $313,804,064.59.
"Original Group 2 Loan Balance": The aggregate Loan Balance of
all the Home Equity Loans in Group 2 as of the Cut-Off Date, which
is $524,454,281.34.
"Outstanding": With respect to all Certificates of a Class, as
of any date of determination, all such Certificates theretofore
executed and delivered hereunder except:
(i)
Certificates theretofore canceled by the Registrar or delivered
to the Registrar for cancellation;
(ii)
Certificates or portions thereof for which full and final
payment of money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent in trust for the
Owners of such Certificates;
(iii)
Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to this
Agreement, unless proof satisfactory to the Trustee is presented
that any such Certificates are held by a bona fide purchaser;
(iv)
Certificates alleged to have been destroyed, lost or stolen for
which replacement Certificates have been issued as provided for in
Section 5.05 hereof; and
(v)
Certificates as to which the Trustee has made the final
distribution thereon, whether or not such Certificate is ever
returned to the Trustee.
"Overcollateralization Amount": With respect to any Distribution
Date, the excess, if any, of (1) the aggregate Loan Balance of the
Home Equity Loans as of the close of business on the last day of
the related Remittance Period over (2) the aggregate outstanding
Certificate Principal Balance of the Offered Certificates and the
Class P Certificates as of that Distribution Date (after taking
into account the payment of the Principal Distribution Amount on
that Distribution Date).
"Owner" or "Certificateholder": The Person in whose name a
Certificate is registered in the Register.
"Paying Agent": Initially, the Trustee, and thereafter, the
Trustee or any other Person that meets the eligibility standards
for the Paying Agent specified in Section 11.15 hereof and is
authorized by the Trustee and the Depositor to make payments on the
Certificates on behalf of the Trustee.
"Percentage Interest": With respect to any Offered Certificates
of any Class, a fraction, expressed as a decimal, the numerator of
which is the principal balance represented by such Offered
Certificate as of the Startup Day and the denominator of which is
the Certificate Principal Balance represented by all the Offered
Certificates of such Class as of the Startup Day. With
respect to the Class X-IO, Class P or Class R Certificates, the
portion of the Class evidenced thereby, expressed as a percentage,
as stated on the face of such Certificate, all of which shall total
100% with respect to the related Class.
"Performance Certification": As defined in Section 12.05.
"Person": Any individual, corporation, limited partnership,
limited liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pool Balance": With respect to any date, the aggregate of the
Loan Balance of all Home Equity Loans as of such date.
"Prepayment": Any payment of principal of a Home Equity Loan
which is received by the Servicer which is not a Scheduled
Principal Payment and which is not accompanied by an amount of
interest representing the full amount of scheduled interest due on
any Due Date in any month or months subsequent to the month of
prepayment, the portion of Substitution Amounts representing
principal, the portion of the Loan Purchase Price of any Home
Equity Loan purchased from the Trust pursuant to Section 3.04,
3.06(b) or 8.10(b) hereof representing principal and the proceeds
of any Insurance Policy which are to be applied as a payment of
principal on the related Home Equity Loan shall be deemed to be
Prepayments for all purposes of this Agreement.
"Prepayment Charge": With respect to any
Prepayment, any prepayment premium, penalty or charge payable by a
Mortgagor in connection with any Prepayment on a Home Equity Loan
pursuant to the terms of the related Note, as set forth on the
Prepayment Charge Schedule.
"Prepayment Charge Schedule": As of any date, the
list of Home Equity Loans providing for a Prepayment Charge
included in the Trust Fund on such date, attached hereto as
Schedule I-C (including the prepayment charge summary attached
thereto). The Prepayment Charge Schedule shall set forth the
following information with respect to each Prepayment Charge:
(i)
the Home Equity Loan identifying number;
(ii)
a code indicating whether the related Home Equity Loan is in
Group 1 or Group 2;
(iii)
a code indicating the type of Prepayment Charge;
(iv)
the date on which the first Monthly Payment was due on the
related Home Equity Loan;
(v)
the term of the related Prepayment Charge;
(vi)
the original Loan Balance of the related Home Equity Loan;
and
(vii)
the Loan Balance of the related Home Equity Loan as of the
Cut-Off Date.
"Preservation Expenses": Expenditures made by the Servicer in
connection with a foreclosed Home Equity Loan prior to the
liquidation thereof, including, without limitation, expenditures
for real estate property taxes, hazard insurance premiums, property
restoration or preservation.
"Principal and Interest Account": The principal and interest
account created by the Servicer pursuant to Section 8.08(a) hereof.
The Principal and Interest Account shall be an Eligible
Account.
"Principal Distribution Amount": As to any Distribution Date,
the lesser of (a) the aggregate Certificate Principal Balance of
the Offered Certificates immediately preceding such Distribution
Date and (b) the sum of (i) the Aggregate Principal Amount for such
Distribution Date minus the Excess Overcollateralization Amount, if
any, for such Distribution Date and (ii) the Subordination Increase
Amount, if any, for such Distribution Date.
"Prohibited Transaction": The meaning set forth from time to
time in the definition thereof at Section 860F(a)(2) of the Code
(or any successor statute thereto) and applicable to the Trust.
"Property": The underlying property securing a Home Equity Loan.
"Property Protection Arrearage": With respect to any Home Equity
Loan, all "out-of-pocket" costs and expenses incurred in the
performance of Nationstar Mortgage, as servicer, prior to the
Cut-off Date with respect to its servicing obligations, including,
but not limited to, (i) the cost of any enforcement or judicial
proceedings, (ii) advances made for the payment of taxes, amounts
due with respect to senior liens, and insurance premiums, and (iii)
expenses incurred in connection with protecting a junior lien and
or preserving the security of the related Home Equity Loan, to the
extent that any superior lienholder has accelerated or intends to
accelerate the obligations under a senior lien, or has declared or
intends to declare a default under the mortgage or the promissory
note secured thereby, or has filed or intends to file an election
to have the mortgaged property sold or foreclosed, in each case
which remain unreimbursed as of the Cut-off Date.
"Prospectus": The Depositor’s Prospectus dated April 3,
2007 constituting part of the Registration Statement.
"Prospectus Supplement": The Nationstar Home Equity Loan Trust
2007-B Prospectus Supplement dated April 4, 2007 to the
Prospectus.
"QSPE": A qualifying special purpose entity that meets the
requirements of FAS 140.
"Qualified Liquidation": The meaning set forth from time to time
in the definition thereof at Section 860F(a)(4) of the Code (or any
successor statute thereto) and applicable to the Trust.
"Qualified Mortgage": The meaning set forth from time to time in
the definition thereof at Section 860G(a)(3) of the Code (or any
successor statute thereto) and applicable to the Trust.
"Qualified Replacement Mortgage": A Home Equity Loan substituted
for another pursuant to Section 3.04, 3.05(b) or 3.06(b) hereof,
which (i) has a Coupon Rate at least equal to the Coupon Rate of
the Home Equity Loan being replaced, (ii) is secured by Property
that is of the same or better property type as, or is a single
family dwelling and the same or better occupancy status as, the
Property securing the Home Equity Loan being replaced or is a
primary residence, (iii) shall mature no later than the latest
Final Scheduled Distribution Date, (iv) has a Loan-to-Value Ratio
as of the Replacement Cut-Off Date no higher than the Loan-to-Value
Ratio of the replaced Home Equity Loan at such time, (v) shall be
of the same or higher credit quality classification (determined in
accordance with the Seller’s credit underwriting guidelines
set forth in the Seller’s underwriting manual) as the Home
Equity Loan which such Qualified Replacement Mortgage replaces,
(vi) shall be a First Mortgage Loan if the Home Equity Loan which
such Qualified Replacement Mortgage replaces was a First Mortgage
Loan and shall be a First Mortgage Loan or Second Mortgage Loan if
the Home Equity Loan which such Qualified Replacement Mortgage
replaces was a Second Mortgage Loan, (vii) has an outstanding
principal balance as of the related Replacement Cut-Off Date equal
to or less than the outstanding principal balance of the replaced
Home Equity Loan as of such Replacement Cut-Off Date,
(viii) shall not provide for a "balloon" payment if the
related Home Equity Loan did not provide for a "balloon" payment
(and if such related Home Equity Loan provided for a "balloon"
payment, such Qualified Replacement Mortgage shall have an original
maturity of not less than the original maturity of such related
Home Equity Loan), (ix) shall be a fixed rate Home Equity Loan if
the Home Equity Loan being replaced is a Fixed Rate Home Equity
Loan or an adjustable rate Home Equity Loan if the Home Equity Loan
being replaced is an Adjustable Rate Home Equity Loan, (x)
satisfies the criteria set forth from time to time in the
definition thereof at Section 860G(a)(4) of the Code (or any
successor statute thereto) and applicable to the Trust,
(xi) satisfies the representations and warranties set forth in
Section 3.04(b)(1) or (b)(2), as applicable, hereof, (xii) shall
not be 30 days or more Delinquent and (xiii) if such Home Equity
Loan being replaced is an Adjustable Rate Home Equity Loan, shall
adjust based on the same index as, have no lower margin than, have
the same interval between adjustment dates as and have a maximum
Coupon Rate no lower than, and a minimum Coupon Rate no lower than,
the Home Equity Loan being replaced.
"Rating Agencies": Collectively, Moody’s and Standard
& Poor’s.
"Realized Loss": As to any Liquidated Loan (or, in the case of a
Cram Down Loss, a Home Equity Loan that is not a Liquidated Loan),
the amount (not less than zero), if any, by which (A) the sum of
(x) the Loan Balance thereof as of the date of liquidation, (y) the
amount of accrued but unpaid interest thereon and (z) the amount of
any Cram Down Loss with respect thereto is in excess of (B) the Net
Liquidation Proceeds, if any, realized thereon.
"Record Date": With respect to (i) any Distribution Date and the
Class R and Class P Certificates, the last Business Day of the
calendar month immediately preceding the calendar month in which
such Distribution Date occurs and (ii) any Distribution Date and
each Class of Offered Certificates and the Class X-IO Certificates,
the Business Day immediately preceding such Distribution Date, or
if definitive Offered Certificates have been issued, the last
Business Day of the calendar month immediately preceding the
calendar month in which such Distribution Date occurs.
"Recoveries": With respect to any Liquidated Loan, an amount
received in respect of principal on that Liquidated Loan, which
amount has previously been allocated as an Applied Realized Loss
Amount to a Class or Classes of Subordinate Certificates, net of
reimbursable expenses due and owing to the Servicer.
"Reference Banks": Bankers Trust Company, Barclays Bank PLC, The
Bank of Tokyo and National Westminster Bank PLC, provided that if
any of the foregoing banks are not suitable to serve as a Reference
Bank, then any leading banks selected by Nationstar Mortgage which
are engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of
business in London, (ii) which are not Affiliates of the Seller,
(iii) whose quotations appear on Telerate Page 3750 on the relevant
LIBOR Determination Date and (iv) which have been designated
as such by the Seller.
"Register": The register maintained by the Registrar in
accordance with Section 5.04 hereof, in which the names of the
Owners are set forth.
"Registrar": The Trustee, acting in its capacity as Registrar
appointed pursuant to Section 5.04 hereof, or any duly appointed
and eligible successor thereto.
"Registration Statement": The Registration Statement filed by
the Depositor with the Commission (Registration Number 333-130642),
including all amendments thereto and including the Prospectus and
Prospectus Supplement relating to the Offered Certificates.
"Regulation AB": Subpart 229.1100 – Asset Backed
Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have
been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70
Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff
from time to time.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC I": The segregated group of assets consisting of all of
the assets of the Trust Estate other than the Net WAC Cap Carryover
Reserve Fund, the Supplemental Interest Trust, the Swap Agreement
and the REMIC interests issued by REMIC I, REMIC II and the Master
REMIC as defined in Section 2.08 hereof, and constituting a REMIC
created hereunder.
"REMIC II": The segregated group of assets consisting of all the
interests issued by REMIC I as defined in Section 2.08 hereof, and
constituting a REMIC created hereunder.
"REMIC Opinion": As defined in Section 3.04 hereof.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear
at Section 860A through 860G of subchapter M of chapter 1 of the
Code, and related provisions, and regulations and revenue rulings
promulgated thereunder, as the foregoing may be in effect from time
to time.
"Remittance Period": With respect to each Monthly Remittance
Date, the calendar month immediately preceding such Monthly
Remittance Date.
"REO Property": A Property acquired by the Servicer on behalf of
the Trust through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Home Equity Loan.
"Replacement Cut-Off Date": With respect to any Qualified
Replacement Mortgage, the opening of business of the first day of
the calendar month in which such Qualified Replacement Mortgage is
conveyed to the Trust.
"Reportable Event": Any event required to be reported on Form
8-K and, in any event, the following:
(a)
entry into a definitive agreement related to the Trust Estate,
the Certificates or the Home Equity Loans, or an amendment to a
Transaction Document, only if the Depositor is not a party to such
agreement (e.g., a servicing agreement with a servicer contemplated
by Item 1108(a)(3) of Regulation AB);
(b)
termination of a Transaction Document (other than by expiration
of the agreement on its stated termination date or as a result of
all parties completing their obligations under such agreement),
only if the Depositor is not a party to such agreement (e.g., a
servicing agreement with a servicer contemplated by Item 1108(a)(3)
of Regulation AB);
(c)
with respect to the Servicer only, if the Servicer becomes aware
of any bankruptcy or receivership with respect to the Sponsor, the
Depositor, the Servicer, any Subservicer, the Trustee, any
enhancement or support provider contemplated by Items 1114(b) or
1115 of Regulation AB, or any other material party contemplated by
Item 1101(d)(1) of Regulation AB;
(d)
with respect to the Trustee, the Servicer and the Depositor
only, the occurrence of an early amortization, performance trigger
other than those that are of the type disclosed on Form 10-D,
including an event of default of which an Authorized Officer has
actual knowledge under this Agreement;
(e)
the resignation, removal, replacement, substitution of the
Servicer, any Subservicer or the Trustee;
(f)
with respect to the Servicer only, if the Servicer becomes aware
that (i) any material enhancement or support specified in Item
1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation
AB that was previously applicable regarding one or more Classes of
the Certificates has terminated other than by expiration of the
contract on its stated termination date or as a result of all
parties completing their obligations under such agreement; (ii) any
material enhancement specified in Item 1114(a)(1) through (3) of
Regulation AB or Item 1115 of Regulation AB has been added with
respect to one or more classes of the Certificates; or (iii) any
existing material enhancement or support specified in Item
1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation
AB with respect to one or more Classes of the Certificates has been
materially amended or modified; and
(g)
with respect to the Trustee, the Servicer and the Depositor
only, a required distribution to Certificateholders is not made as
of the required Distribution Date under this Agreement.
"Reporting Subcontractor": With respect to the Servicer or the
Trustee, any Subcontractor determined by such Person pursuant to
Section 12.08(b) to be "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB. References
to a Reporting Subcontractor shall refer only to the Subcontractor
of such Person and shall not refer to Subcontractors generally.
"Representation Letter": Letters to, or agreements with, the
Depository to effectuate a book-entry system with respect to the
Offered Certificates registered in the Register under the nominee
name of the Depository.
"Required Overcollateralization Amount": As to any
Distribution Date (1) prior to the Stepdown Date, the product
of (x) 5.65%, and (y) the Original Aggregate Loan
Balance; and (2) on and after the Stepdown Date, the greater
of (i) the lesser of (x) the product of 5.65% and the
Pool Balance as of the Cut-Off Date, and (y) the product of
11.30% and the Pool Balance as of the end of the related Remittance
Period and (ii) the OC Floor; provided, however, that on each
Distribution Date during the continuance of a Trigger Event the
Required Overcollateralization Amount will equal the Required
Overcollateralization Amount in effect as of the Distribution Date
immediately preceding the date on which such Trigger Event first
occurred.
"Sarbanes-Oxley Certification": As defined in Section 12.05.
"Schedule of Home Equity Loans": Schedule I-A hereto, Schedule
I-B hereto, Schedule I-E or Schedule I-F hereto, as the context may
require.
"Scheduled Notional Amount": The amount set forth with
respect to each Distribution Date on Schedule I-H hereto.
"Scheduled Principal Payment": As of any date of calculation,
with respect to a Home Equity Loan, the then stated scheduled
monthly installment of principal payable thereunder which, if
timely paid, would result in the full amortization of principal
over the term thereof (or, in the case of a "balloon" Note, the
term to the nominal maturity date for amortization purposes,
without regard to the actual maturity date), without taking into
account any Prepayment made on such Home Equity Loan during the
then-current Remittance Period.
"Second Mortgage Loan": A Home Equity Loan which constitutes a
second priority mortgage lien with respect to the related Property.
"Securities Act": The Securities Act of 1933, as amended.
"Seller": Nationstar Mortgage LLC, a Delaware limited liability
company.
"Seller Home Equity Loans": The home equity loans listed on the
Seller Schedule of Home Equity Loans.
"Seller Schedule of Home Equity Loans": The Schedule of Home
Equity Loans attached as Schedule I-E hereto.
"Sellers": The Seller and the Conduit Seller.
"Senior Certificate": Any one of the Class 1-AV-1, Class 2-AV-1,
Class 2-AV-2, Class 2-AV-3 or Class 2-AV-4 Certificates.
"Senior Enhancement Percentage": As to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is
the sum of (i) the aggregate Certificate Principal Balance of the
Subordinate Certificates and (ii) the Overcollateralization Amount
(in each case, after taking into account the distribution of the
Principal Distribution Amount on that Distribution Date) and the
denominator of which is the Pool Balance as of the last day of the
related Remittance Period.
"Senior Lien": With respect to any Second Mortgage Loan, the
home equity loan relating to the corresponding Property having a
first priority lien.
"Senior Principal Distribution Amount": The sum of the Group 1
Principal Distribution Amount and the Group 2 Principal
Distribution Amount.
"Servicer": Nationstar Mortgage LLC, a Delaware limited
liability company, and its permitted successors and assigns.
"Servicer Termination Event": As defined in Section 8.20(a)
hereof.
"Servicing Advance": As defined in Section 8.09(b) and Section
8.13(a) hereof.
"Servicing Fee": With respect to any Home Equity Loan Group and
a Remittance Period, an amount retained by the Servicer as
compensation for servicing and administration duties relating to
the Home Equity Loans in such Home Equity Loan Group pursuant to
Section 8.15 hereof and equal to one month’s interest at
0.50% per annum of the then aggregate outstanding Loan Balance of
such Home Equity Loans as of the first day of each Remittance
Period payable on a monthly basis; provided, however, that if a
successor Servicer is appointed pursuant to Section 8.20 hereof,
the Servicing Fee shall be the amount as agreed upon by the Trustee
and the successor Servicer, and the per annum rate at which the
Servicing Fee is calculated shall not exceed 0.50% per annum.
"60-Day Delinquent Loan": With respect to any Remittance Period,
and without duplication, (i) all REO Properties as of the last day
of such Remittance Period, (ii) each Home Equity Loan with respect
to which any portion of a Monthly Payment is, as of the last day of
such Remittance Period 60 or more days Delinquent (without giving
effect to any grace period), (iii) each Home Equity Loan in
foreclosure as of the last day of such Remittance Period and
(iv) each Home Equity Loan described in clause (ii) that is
also in bankruptcy.
"60+ Delinquency Percentage (Rolling Three Month)": With respect
to any Distribution Date, the average of the percentage equivalents
of the fractions determined for each of the three immediately
preceding Remittance Periods (or such fewer number of Remittance
Periods since the Cut-Off Date, in the case of the first two
Distribution Dates) the numerator of each of which is equal to the
sum of (without duplication) the aggregate Loan Balance of 60-Day
Delinquent Loans for such Remittance Period, and the denominator of
which is the Loan Balance of all of the Home Equity Loans as of the
end of such Remittance Period.
"Standard & Poor’s": Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies, Inc. or
any successor thereto.
"Startup Day": April 19, 2007.
"Stepdown Date": The earlier to occur of (1) the Distribution
Date immediately following the Distribution Date on which the
aggregate Certificate Principal Balance of the Senior Certificates
is reduced to zero, and (2) the later to occur of (A) the
Distribution Date in May 2010, and (B) the first Distribution Date
on which the Senior Enhancement Percentage (after giving effect to
the distribution of the Aggregate Principal Amount on such
Distribution Date) is at least equal to 50.30%.
"Subcontractor": Any vendor, subcontractor or other Person that
is not responsible for the overall servicing (as "servicing" is
commonly understood by participants in the mortgage-backed
securities market) of Home Equity Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with
respect to Home Equity Loans under the direction or authority of
the Servicer or a Subservicer or the Trustee, as the case may
be.
"Subordinate Certificates": Any of the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 or
Class M-9 Certificates.
"Subordinate Net WAC Cap": With respect to any Distribution Date
and for each Class of Subordinate Certificates, the per annum rate
equal to the weighted average of (i) the Group 1 Net WAC Cap and
(ii) the Group 2 Net WAC Cap, weighted on the basis of the related
Group Subordinate Amount for such Distribution Date.
"Subordinate Net WAC Cap Carryover": With respect to any
Distribution Date, and for any Class of Subordinate Certificates,
the sum of (A) the excess of (1) the amount of interest that such
Class of Subordinate Certificates, as applicable, would otherwise
be entitled to receive on the Distribution Date had the Certificate
Rate for such Class been calculated at the Certificate Rate for
such Class and Distribution Date without regard to the Subordinate
Net WAC Cap over (2) the amount of interest payable on such Class
at the respective Certificate Rate for such Class for the
Distribution Date and (B) the excess described in clause (A) for
such Class for all previous Distribution Dates (including any
interest accrued on that amount at the related Certificate Rate
without regard to the Subordinate Net WAC Cap) not previously paid
to such Class.
"Subordinate REMIC Cap Carryover": With respect to any
Distribution Date, and for any Class of Subordinate Certificates,
the sum of (A) the excess of (1) the amount of interest such Class
of Subordinate Certificates is entitled to receive on the
Distribution Date (or, if greater, would be entitled to receive on
the Distribution Date had the Certificate Rate for such Class been
calculated at the Certificate Rate for such Class and Distribution
Date without regard to the Subordinate Net WAC Cap) over (2) the
amount of interest payable on the Master REMIC Regular Certificate
with a Class designation corresponding to such Class of Subordinate
Certificates at the respective certificate interest rate for such
Master REMIC Regular Certificate for the Distribution Date, as
provided in Section 2.08 hereof, and (B) the excess described in
clause (A) for such Class for all previous Distribution Dates
(including any interest accrued thereon at the related Certificate
Rate without regard to the Subordinate Net WAC Cap) not previously
paid to such Class.
"Subordination Deficiency": As to any Distribution Date, the
excess, if any, of (1) the Required Overcollateralization Amount
for such Distribution Date over (2) the Overcollateralization
Amount for such Distribution Date after giving effect to the
distribution of the Aggregate Principal Amount on such Distribution
Date.
"Subordination Increase Amount": As to any Distribution Date,
the lesser of (1) the Subordination Deficiency and (2) the Excess
Interest.
"Sub-Servicer": Any Person with whom the Servicer has entered
into a Sub-Servicing Agreement and who satisfies any requirements
set forth in Section 8.03 hereof in respect of the qualification of
a Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the
Servicer and any Sub-Servicer relating to servicing and/or
administration of certain Home Equity Loans as permitted by Section
8.03.
"Substitution Amount": With respect to the substitution of any
Qualified Replacement Mortgage for any Home Equity Loan, as of the
related Replacement Cut-Off Date, an amount equal to the excess, if
any, of the outstanding principal balance of such Home Equity Loan
over the outstanding principal balance of the Qualified Replacement
Mortgage, together with (without duplication) the aggregate amount
of (1) all unreimbursed Delinquency Advances and unreimbursed
Servicing Advances made, (2) all accrued and unpaid interest,
and (3) any costs and damages incurred by the Trust in
connection with any violation of any predatory or abusive lending
law, with respect to such Home Equity Loan.
"Supplemental Interest Trust": The trust established
pursuant to Section 2.10.
"Supplemental Interest Trustee": The Bank of New York, a New
York banking corporation, not in its individual capacity but solely
as Supplemental Interest Trustee under this Agreement, and any
successor hereunder.
"Swap Account": The segregated swap account established in
accordance with Section 7.02(a) hereof and maintained in accordance
with Section 7.12 hereof at the applicable Corporate Trust Office
of the Supplemental Interest Trustee entitled "The Bank of New
York, as Supplemental Interest Trustee on behalf of the Owners of
the Nationstar Home Equity Loan Trust 2007-B, Nationstar Home
Equity Loan Asset-Backed Certificates." The Swap Account
shall be an Eligible Account.
"Swap Agreement": The Swap Agreement entered into with the Swap
Provider and attached hereto as Exhibit R.
"Swap Default": An event of default under the Swap
Agreement.
"Swap Early Termination": The occurrence of an Early
Termination Date (as defined in the Swap Agreement) under the Swap
Agreement.
"Swap LIBOR": A per annum rate equal to the floating rate
payable by the Swap Provider under the Swap Agreement.
"Swap Provider": The Royal Bank of Scotland plc and any
successor thereto.
"Swap Provider Trigger Event": A Swap Termination Payment that
is triggered upon: (i) an event of default under the Swap
Agreement with respect to which the Swap Provider is the Defaulting
Party (as defined in the Swap Agreement), (ii) a Termination Event
under the Swap Agreement with respect to which the Swap Provider is
the sole Affected Party (as defined in the Swap Agreement) or (iii)
an "Additional Termination Event" (as defined in the Swap
Agreement) under the Swap Agreement with respect to which the Swap
Provider is the sole Affected Party.
"Swap Termination Payment": The amount, if any, owed by the
Supplemental Interest Trust or the Swap Provider upon a Swap Early
Termination.
"Swap Expense Fee Rate": With respect to each Distribution
Date, a per annum rate, equal to the product of (x) the sum of (i)
any Net Swap Payment owed to the Swap Provider for that
Distribution Date and (ii) any Swap Termination Payment for that
Distribution Date (other than any Swap Termination Payment
resulting from a Swap Provider Trigger Event) payable by the
Supplemental Interest Trust, and (y) 12 divided by the aggregate
Loan Balance of the Home Equity Loans as of the first day of the
related Remittance Period.
"Tangible Net Worth": Shall mean the difference between: (A) the
tangible assets of the Seller or Servicer, as applicable, and its
Affiliates calculated in accordance with generally accepted accounting
principles, as reduced by adequate reserves in each case where a
reserve is appropriate; and (B) all indebtedness, including
subordinated debt, of the Seller or Servicer, as applicable, and
its Affiliates; provided, however, that (i) intangible assets such
as patents, trademarks, trade names, copyrights, licenses, good
will, organization costs, advances or loans to, or receivables
from, directors, officers, employees or affiliates, prepaid assets,
amounts relating to covenants not to compete, pension assets,
deferred charges or treasury stock of any securities unless the
same are readily marketable in the United States of America or are
entitled to be used as a credit against federal income tax
liabilities, shall not be included in the calculation of (A) above,
(ii) securities included as tangible assets shall be valued at
their current market price or cost, whichever is lower and (iii)
any write-up in book value of any assets shall not be taken into
account.
"Tax Matters Person": The Person designated pursuant to Section
11.18 hereof to act as the Tax Matters Person under the Code (or
where the context requires, the Trustee acting as agent for the Tax
Matters Person).
"Telerate Page 3750": The display designated as page "3750" on
the Bridge Telerate Service (or such other page as may replace page
3750 on that report for the purpose of displaying London interbank
offered rates of major banks).
"Termination Event": Under the Swap Agreement, the
following standard events under the ISDA Master Agreement:
·
"Illegality" (which generally relates to changes in law causing
it to become unlawful for either party to perform its obligations
under the Swap Agreement),
·
"Tax Event" (which generally relates to either party to the Swap
Agreement receiving a payment under the Swap Agreement from which
an amount has been deducted or withheld for or on account of taxes)
and
·
"Tax Event Upon Merger" (solely with respect to the Swap
Provider as merging party) (which generally relates to the Swap
Provider’s receiving a payment under the Swap Agreement from
which an amount has been deducted or withheld for or on account of
taxes resulting from a merger),
as described in Sections 5(b)(i), 5(b)(ii) and 5(b)(iii) of the
ISDA Master Agreement. In addition, there are "Additional
Termination Events" (as defined in the Swap Agreement) including if
this Agreement or other transaction documents are amended or
modified without the prior written consent of the Swap Provider
where written consent is required or if, pursuant to the terms of
Section 9.02 of this Agreement, the Servicer exercises its option
to purchase the Home Equity Loans. With respect to the Swap
Provider, an Additional Termination Event will occur if the Swap
Provider fails to comply with the Downgrade Provisions or if the
Swap Provider fails to comply with certain obligations with respect
to Regulation AB, as described in the Swap Agreement.
"Termination Price": Means, with respect to Sections 9.02 and
9.03 hereof, and on any date of determination thereof, an amount
equal to the greater of (A) the sum of (x) the aggregate
outstanding Loan Balance of the Home Equity Loans (other than those
described in clause (y) below), including accrued interest
thereon, as of such date and (y) in the case of any REO
Property and Home Equity Loans with respect to which foreclosure
proceedings have been initiated or are otherwise 120 days or more
Delinquent as of such date, the fair market value of such REO
Property and Home Equity Loans (disregarding accrued interest
thereon) and (B) the sum of (w) the aggregate
outstanding Certificate Principal Balance of the Offered
Certificates (other than any Class Principal Carryover Shortfalls),
(x) all accrued and unpaid interest on the Offered
Certificates (other than any Group 1 Net WAC Cap Carryover, Group 2
Net WAC Cap Carryover and Subordinate Net WAC Cap Carryover) ,
(y) the sum of the aggregate amount of any unreimbursed
Delinquency Advances, unreimbursed Servicing Advances, unreimbursed
Delinquency Advances which the Servicer has theretofore failed to
remit and (z) any Net Swap Payments or Swap Termination Payments
payable to any swap provider then remaining unpaid or which are due
to the exercise of such option.
"Transaction Documents": This Agreement, the Swap Agreement and
any other document or agreement entered into in connection with the
Trust Estate, the Certificates or the Home Equity Loans.
"Transition Expenses": Expenses incurred by the Trustee in
connection with the transfer of servicing upon the termination of
the Servicer for a Servicer Termination Event; provided that the
amount shall not exceed $50,000 for both Groups in the aggregate in
any one calendar year (and no more than $100,000 for both Groups in
the aggregate during the term of the Trust).
"Trigger Event": The existence of a Delinquency Event or
Cumulative Loss Trigger Event.
"Trust": Nationstar Home Equity Loan Trust 2007-B, the trust
created under this Agreement which shall be comprised of two
subtrusts: (i) one for Group 1 and any Trust assets allocable
to such Group 1 and (ii) one for Group 2 and any Trust assets
allocable to such Group 2.
"Trust Estate": (a) The Home Equity Loan Assets, (b) such
amounts as may be held by the Trustee in the Certificate Account
together with investment earnings on such amounts, (c) such
amounts as may be held by the Trustee in the Net WAC Cap Carryover
Reserve Fund together with investment earnings on such amounts, (d)
any amounts received by the Supplemental Interest Trustee on the
Swap Agreement and such amounts as may be held by the Supplemental
Interest Trustee in the Swap Account, excluding any investment
earnings on such amounts, (e) such amounts as may be held in the
name of the Trustee in the Principal and Interest Account, if any,
inclusive of investment earnings thereon, whether in the form of
cash, instruments, securities or other properties (including any
Eligible Investments held by the Servicer) and (f) the Prepayment
Charges.
"Trustee": The Bank of New York, a New York banking corporation,
not in its individual capacity but solely as Trustee under this
Agreement, and any successor hereunder.
"Trustee Fee": The fee payable monthly to the Trustee on each
Distribution Date in an amount equal to $500.00 for Group 1 and
$500.00 for Group 2, or if there is only one Home Equity Loan
Group, $1,000.00.
"Trustee Reimbursable Expenses": As of any Distribution Date,
the sum of (a) any Trustee Fee and Transition Expenses not paid
pursuant to Section 7.03(b) clauses A.1. and B.1. on such
Distribution Date and (b) any amounts owed to the Trustee pursuant
to Sections 2.05, 6.12, 7.06, 8.20(o), 10.07, 10.13 and 11.16(a)(v)
hereof, and, if the Trustee is acting as Custodian, any related
custodial fees (including all attorney fees and expenses).
"Underwriters": Greenwich Capital Markets, Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global
Markets Inc.
"Underwriter’s Exemption": Prohibited Transaction
Exemption 2007-5, 72 Fed. Reg. 13130 (2007), as amended (or any
successor thereto), or any substantially similar administrative
exemption granted by the U.S. Department of Labor.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any
date of determination, (a) 1% of all Voting Rights shall be
allocated to the Class X-IO Certificates (such Voting Rights to be
allocated among the Owners of Certificates of such Class in
accordance with their respective Percentage Interests), (b) 1% of
all Voting Rights shall be allocated to the Class P Certificates
(such Voting Rights to be allocated among the Owners of
Certificates of such Class in accordance with their respective
Percentage Interests), (c) 1% of all Voting Rights shall be
allocated to the Class R Certificates in the aggregate, or if
separate R-1 and R-3 Interests are issued, 1/2 to each such Class
of Interests (such Voting Rights to be allocated among the Owners
of Certificates of each such Class in accordance with their
respective Percentage Interests), and (d) the remaining Voting
Rights shall be allocated among Owners of the Classes of Offered
Certificates in proportion to the Certificate Principal Balances of
their respective Offered Certificates on such date.
"WAC Excess": The sum of (a) the Group 1 REMIC Cap
Carryover allocable to each of the Group 1 Certificates,
(b) the Group 2 REMIC Cap Carryover allocable to each of the
Group 2 Certificates, and (c) the Subordinate REMIC Cap
Carryover allocable to each of the Subordinate Certificates.
Section
1.02.
Use of Words and Phrases.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter" and other equivalent words refer to this Agreement as
a whole and not solely to the particular section of this Agreement
in which any such word is used. The definitions set forth in
Section 1.01 hereof include both the singular and the plural.
Whenever used in this Agreement, any pronoun shall be deemed
to include both singular and plural and to cover all genders.
Section
1.03.
Captions, Table of Contents.
The captions or headings in this Agreement and the Table of
Contents are for convenience only and in no way define, limit or
describe the scope and intent of any provisions of this Agreement.
Section
1.04.
Opinions.
Each opinion with respect to the validity, binding nature and
enforceability of documents or Certificates may be qualified to the
extent that the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and by general
principles of equity (whether considered in a proceeding or action
in equity or at law) and may state that no opinion is expressed on
the availability of the remedy of specific enforcement, injunctive
relief or any other equitable remedy. Any opinion required to
be furnished by any Person hereunder must be delivered by counsel
upon whose opinion the addressee of such opinion may reasonably
rely, and such opinion may state that it is given in reasonable
reliance upon an opinion of another, a copy of which must be
attached, concerning the laws of a foreign jurisdiction. Any
opinion delivered hereunder shall be addressed to the Rating
Agencies and the Trustee.
END OF ARTICLE I
ARTICLE
II
ESTABLISHMENT AND
ORGANIZATION OF THE TRUST
Section
2.01.
Establishment of the Trust.
The parties hereto do hereby create and establish, pursuant to
the laws of the State of New York and this Agreement, the
Trust, which, for convenience, shall be known as "Nationstar Home
Equity Loan Trust 2007-B" and which shall contain two
subtrusts.
Section
2.02.
Office.
The office of the Trust shall be in care of the Trustee,
addressed to The Bank of New York, at its applicable Corporate
Trust Office.
Section
2.03.
Purposes and Powers.
The purpose of the Trust is to engage in the following
activities and only such activities: (i) the issuance of the
Certificates and the acquiring, owning and holding of Home Equity
Loans and the Trust Estate (including the Swap Agreement) in
connection therewith; (ii) activities that are necessary, suitable
or convenient to accomplish the foregoing or are incidental thereto
or connected therewith, including the investment of moneys in
accordance with this Agreement; and (iii) such other activities as
may be required in connection with conservation of the Trust Estate
and distributions to the Owners in accordance with the provisions
of this Agreement; provided, however, that nothing contained herein
shall permit the Trustee to take any action which would adversely
affect the status of any REMIC created hereunder.
Section
2.04.
Appointment of the Trustee; Declaration of Trust.
The Depositor hereby appoints the Trustee as trustee of the
Trust effective as of the Startup Day, to have all the rights,
powers and duties set forth herein. The Trustee hereby
acknowledges and accepts such appointment, represents and warrants
its eligibility as of the Startup Day to serve as Trustee pursuant
to Section 10.08 hereof and declares that it will hold the Trust
Estate in trust upon and subject to the conditions set forth herein
for the benefit of the Owners.
Section
2.05.
Expenses of the Trust.
All expenses of the Trust, including (i) the fees and
reimbursable expenses of the Trustee in connection with the
performance of its duties hereunder and (ii) to the extent not set
forth herein, any other expenses of the Trustee that have been
reviewed and approved by the Seller, which review shall not be
required in connection with the enforcement of a remedy by the
Trustee resulting from a default under this Agreement, shall be
paid pursuant to Section 7.03(b).
Section
2.06.
Ownership of the Trust.
On the Startup Day the ownership interests in the Trust shall be
transferred as set forth in Section 4.02 hereof, such transfer to
be evidenced by sale of the Certificates as described therein.
Thereafter, transfer of any ownership interest shall be
governed by Sections 5.04 and 5.08 hereof.
Section
2.07.
Situs of the Trust.
It is the intention of the parties hereto that the Trust
constitute a trust under the laws of the State of New York.
The Trust will be created in the State of New York. The
Trust’s only office will be at the office of the Trustee as
set forth in Section 2.02 hereof.
Section
2.08.
Designation of Interests in REMICs.
(a)
As provided herein, the Trustee shall elect that the Trust
Estate (exclusive of the assets held in the Net WAC Cap
Carryover Reserve Fund and the Swap Account) be treated for federal
income tax purposes as comprising three real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, "REMIC
I," "REMIC II" and the "Master REMIC"). Each Certificate,
other than the Class R Certificates, represents ownership of a
regular interest in the Master REMIC for purposes of the REMIC
Provisions. Each Certificate, other than the Class X-IO,
Class R and Class P Certificates, also represents rights with
respect to payments to be made from the Net WAC Cap Carryover
Reserve Fund as further described in Section 7.04 of this Agreement
and from the Swap Account as further described in Section 7.12
of this Agreement. The Class X-IO Certificates also evidence
ownership of the assets held from time to time in the Net WAC Cap
Carryover Reserve Fund, as further described in Section 7.04
hereof. The Class R Certificate represents ownership of the
sole class of residual interest in each REMIC for purposes of the
REMIC Provisions.
(b)
The Master REMIC shall hold as its assets the several classes of
uncertificated REMIC II Interests, other than the R-2 Interest, and
each such REMIC II Interest (other than the R-2 Interest) is hereby
designated as a regular interest in REMIC II for purposes of the
REMIC Provisions. REMIC II shall hold as its assets the
several classes of uncertificated REMIC I Interests, other than the
R-1 Interest, and each such REMIC I Interest (other than the
R-1 Interest) is hereby designated as a regular interest in
REMIC I for purposes of the REMIC Provisions. REMIC I shall
hold as its assets the Home Equity Loans and all collections and
accounts related thereto, other than the Net WAC Cap Carryover
Reserve Fund and the Swap Account.
(c)
For purposes of the REMIC Provisions, the latest possible
maturity date for each regular interest in each REMIC created
hereby is the Latest Possible Maturity Date.
(d)
[Reserved].
(e)
REMIC I. The following table sets forth (or describes) the
class designation, interest rate, and initial principal balance for
each REMIC I Interest (each such Interest other than the R-1
Interest, a "REMIC I Regular Interest"):
REMIC I:
The following table sets forth the designations, principal
balances, and interest rates for each interest in REMIC I, each of
which (other than the R-1 interest) is hereby designated as a
regular interest in REMIC I (the "REMIC I Regular Interests"):
|
REMIC Interest
|
Initial Principal Balance of REMIC
Interest
|
Interest Rate
|
|
T1-A
|
(6)
|
(1)
|
|
T1-F1
|
$
5,634,127.36
|
(2)
|
|
T1-V1
|
$
5,634,127.36
|
(3)
|
|
T1-F2
|
$
6,590,695.59
|
(2)
|
|
T1-V2
|
$
6,590,695.59
|
(3)
|
|
T1-F3
|
$
7,536,067.99
|
(2)
|
|
T1-V3
|
$
7,536,067.99
|
(3)
|
|
T1-F4
|
$
8,462,727.90
|
(2)
|
|
T1-V4
|
$
8,462,727.90
|
(3)
|
|
T1-F5
|
$
9,362,756.11
|
(2)
|
|
T1-V5
|
$
9,362,756.11
|
(3)
|
|
T1-F6
|
$ 10,225,600.09
|
(2)
|
|
T1-V6
|
$ 10,225,600.09
|
(3)
|
|
T1-F7
|
$ 11,044,973.65
|
(2)
|
|
T1-V7
|
$ 11,044,973.65
|
(3)
|
|
T1-F8
|
$ 11,806,823.93
|
(2)
|
|
T1-V8
|
$ 11,806,823.93
|
(3)
|
|
T1-F9
|
$ 11,878,271.46
|
(2)
|
|
T1-V9
|
$ 11,878,271.46
|
(3)
|
|
T1-F10
|
$ 11,490,667.89
|
(2)
|
|
T1-V10
|
$ 11,490,667.89
|
(3)
|
|
T1-F11
|
$ 11,085,928.76
|
(2)
|
|
T1-V11
|
$ 11,085,928.76
|
(3)
|
|
T1-F12
|
$ 10,695,709.17
|
(2)
|
|
T1-V12
|
$ 10,695,709.17
|
(3)
|
|
T1-F13
|
$ 10,319,458.04
|
(2)
|
|
T1-V13
|
$ 10,319,458.04
|
(3)
|
|
T1-F14
|
$
9,956,663.97
|
(2)
|
|
T1-V14
|
$
9,956,663.97
|
(3)
|
|
T1-F15
|
$
9,606,841.45
|
(2)
|
|
T1-V15
|
$
9,606,841.45
|
(3)
|
|
T1-F16
|
$
9,283,683.40
|
(2)
|
|
T1-V16
|
$
9,283,683.40
|
(3)
|
|
T1-F17
|
$
8,956,745.21
|
(2)
|
|
T1-V17
|
$
8,956,745.21
|
(3)
|
|
T1-F18
|
$
8,673,309.48
|
(2)
|
|
T1-V18
|
$
8,673,309.48
|
(3)
|
|
T1-F19
|
$ 12,267,236.74
|
(2)
|
|
T1-V19
|
$ 12,267,236.74
|
(3)
|
|
T1-F20
|
$ 12,746,062.63
|
(2)
|
|
T1-V20
|
$ 12,746,062.63
|
(3)
|
|
T1-F21
|
$ 12,010,420.84
|
(2)
|
|
T1-V21
|
$ 12,010,420.84
|
(3)
|
|
T1-F22
|
$ 11,199,383.08
|
(2)
|
|
T1-V22
|
$ 11,199,383.08
|
(3)
|
|
T1-F23
|
$ 10,460,643.18
|
(2)
|
|
T1-V23
|
$ 10,460,643.18
|
(3)
|
|
T1-F24
|
$
9,756,837.11
|
(2)
|
|
T1-V24
|
$
9,756,837.11
|
(3)
|
|
T1-F25
|
$
6,740,162.15
|
(2)
|
|
T1-V25
|
$
6,740,162.15
|
(3)
|
|
T1-F26
|
$ 45,286,190.96
|
(2)
|
|
T1-V26
|
$ 45,286,190.96
|
(3)
|
|
T1-F27
|
$
2,528,068.80
|
(2)
|
|
T1-V27
|
$
2,528,068.80
|
(3)
|
|
T1-F28
|
$
2,454,744.67
|
(2)
|
|
T1-V28
|
$
2,454,744.67
|
(3)
|
|
T1-F29
|
$
2,501,897.69
|
(2)
|
|
T1-V29
|
$
2,501,897.69
|
(3)
|
|
T1-F30
|
$
2,309,795.58
|
(2)
|
|
T1-V30
|
$
2,309,795.58
|
(3)
|
|
T1-F31
|
$
2,340,082.94
|
(2)
|
|
T1-V31
|
$
2,340,082.94
|
(3)
|
|
T1-F32
|
$
3,395,832.97
|
(2)
|
|
T1-V32
|
$
3,395,832.97
|
(3)
|
|
T1-F33
|
$
3,090,953.84
|
(2)
|
|
T1-V33
|
$
3,090,953.84
|
(3)
|
|
T1-F34
|
$
2,324,932.22
|
(2)
|
|
T1-V34
|
$
2,324,932.22
|
(3)
|
|
T1-F35
|
$
1,894,272.26
|
(2)
|
|
T1-V35
|
$
1,894,272.26
|
(3)
|
|
T1-F36
|
$
1,840,340.47
|
(2)
|
|
T1-V36
|
$
1,840,340.47
|
(3)
|
|
T1-F37
|
$
1,787,932.79
|
(2)
|
|
T1-V37
|
$
1,787,932.79
|
(3)
|
|
T1-F38
|
$
1,736,970.16
|
(2)
|
|
T1-V38
|
$
1,736,970.16
|
(3)
|
|
T1-F39
|
$
1,687,485.11
|
(2)
|
|
T1-V39
|
$
1,687,485.11
|
(3)
|
|
T1-F40
|
$
1,639,399.20
|
(2)
|
|
T1-V40
|
$
1,639,399.20
|
(3)
|
|
T1-F41
|
$
1,592,673.11
|
(2)
|
|
T1-V41
|
$
1,592,673.11
|
(3)
|
|
T1-F42
|
$
1,547,268.62
|
(2)
|
|
T1-V42
|
$
1,547,268.62
|
(3)
|
|
T1-F43
|
$
1,503,148.54
|
(2)
|
|
T1-V43
|
$
1,503,148.54
|
(3)
|
|
T1-F44
|
$
1,460,276.79
|
(2)
|
|
T1-V44
|
$
1,460,276.79
|
(3)
|
|
T1-F45
|
$
1,418,527.79
|
(2)
|
|
T1-V45
|
$
1,418,527.79
|
(3)
|
|
T1-F46
|
$
1,378,052.38
|
(2)
|
|
T1-V46
|
$
1,378,052.38
|
(3)
|
|
T1-F47
|
$
1,338,722.73
|
(2)
|
|
T1-V47
|
$
1,338,722.73
|
(3)
|
|
T1-F48
|
$
1,300,506.61
|
(2)
|
|
T1-V48
|
$
1,300,506.61
|
(3)
|
|
T1-F49
|
$
1,263,372.67
|
(2)
|
|
T1-V49
|
$
1,263,372.67
|
(3)
|
|
T1-F50
|
$
1,227,290.46
|
(2)
|
|
T1-V50
|
$
1,227,290.46
|
(3)
|
|
T1-F51
|
$
1,192,200.21
|
(2)
|
|
T1-V51
|
$
1,192,200.21
|
(3)
|
|
T1-F52
|
$
1,157,787.89
|
(2)
|
|
T1-V52
|
$
1,157,787.89
|
(3)
|
|
T1-F53
|
$
1,124,703.83
|
(2)
|
|
T1-V53
|
$
1,124,703.83
|
(3)
|
|
T1-F54
|
$
1,092,341.88
|
(2)
|
|
T1-V54
|
$
1,092,341.88
|
(3)
|
|
T1-F55
|
$
1,060,806.02
|
(2)
|
|
T1-V55
|
$
1,060,806.02
|
(3)
|
|
T1-F56
|
$
1,030,480.96
|
(2)
|
|
T1-V56
|
$
1,030,480.96
|
(3)
|
|
T1-F57
|
$
1,032,491.97
|
(2)
|
|
T1-V57
|
$
1,032,491.97
|
(3)
|
|
T1-F58
|
$
985,447.88
|
(2)
|
|
T1-V58
|
$
985,447.88
|
(3)
|
|
T1-F59
|
$
942,754.47
|
(2)
|
|
T1-V59
|
$
942,754.47
|
(3)
|
|
T1-F60
|
$
915,797.61
|
(2)
|
|
T1-V60
|
$
915,797.61
|
(3)
|
|
T1-F61
|
$
889,604.73
|
(2)
|
|
T1-V61
|
$
889,604.73
|
(3)
|
|
T1-F62
|
$
864,154.30
|
(2)
|
|
T1-V62
|
$
864,154.30
|
(3)
|
|
T1-F63
|
$
839,425.44
|
(2)
|
|
T1-V63
|
$
839,425.44
|
(3)
|
|
T1-F64
|
$
815,397.82
|
(2)
|
|
T1-V64
|
$
815,397.82
|
(3)
|
|
T1-F65
|
$
792,051.69
|
(2)
|
|
T1-V65
|
$
792,051.69
|
(3)
|
|
T1-F66
|
$
769,367.86
|
(2)
|
|
T1-V66
|
$
769,367.86
|
(3)
|
|
T1-F67
|
$
747,327.68
|
(2)
|
|
T1-V67
|
$
747,327.68
|
(3)
|
|
T1-F68
|
$
725,913.02
|
(2)
|
|
T1-V68
|
$
725,913.02
|
(3)
|
|
T1-F69
|
$ 24,264,850.39
|
(2)
|
|
T1-V69
|
$ 24,264,850.39
|
(3)
|
|
T1-Arrearage
|
(5)
|
(5)
|
|
R-1
|
(4)
|
(4)
|
(1)
The interest rate with respect to any Distribution Date (and the
related Interest Period) for the T1-A Interest is a per annum rate
equal to the weighted average of the Net Coupon Rates of all the
Home Equity Loans as of the first day of the related Remittance
Period, weighted on their outstanding loan balances of such day and
adjusted to take into account any prepayments occurring after such
day that were distributed in the prior calendar month (the "REMIC
Net WAC Rate").
(2)
The interest rate with respect to any Distribution Date (and the
related Interest Period) for each of these interests is a per annum
rate equal to the lesser of (i) 9.84%, and (ii) the product of (a)
the REMIC Net WAC Rate and (b) 2.
(3)
For any Distribution Date (and the related Interest Period) the
interest rate for each of these Lower Tier Interests shall be the
excess, if any, of (i) the product of (a) the REMIC Net WAC Rate
and (b) 2, over (ii) 9.84%.
(4)
The R-I interest shall not have a principal balance and shall
not bear interest. The R-I interest is hereby designated as
the sole class of residual interest in REMIC I.
(5)
The T1-Arrearage interest shall not bear interest. The
T1-Arrearage interest shall have an Initial Principal Balance equal
to the aggregate Arrearage amount as of the Cut-off Date.
(6)
This interest shall have an initial principal balance equal to
the excess of the aggregate outstanding principal balance of the
Home Equity Loans as of the Cut-off Date over the aggregate initial
principal balance of each other interest in REMIC I.
On the Business Day prior to each Distribution Date, all
Realized Losses and all payments of principal shall be allocated in
the following order of priority:
(i)
First, to the T1-A interest until the outstanding principal
balance of such interest is reduced to the aggregate outstanding
principal balance of the Class M-8 and Class M-9 Certificates
taking into account distributions on such Distribution Date,
and
(ii)
Second, to the outstanding T1 interest with the lowest numerical
denomination until such interest is reduced to zero; provided that
in the case of T1 interests with the same numerical denomination,
principal shall be allocated equally between such interests.
On the Business Day prior to each Distribution Date, all
Prepayment Charges shall be allocated to the Class T1-V69 interest
and all amounts paid with respect to unreimbursed Arrearages shall
be allocated to the Class T1-Arrearage interest.
(f)
REMIC II:
The following table sets forth the designations, principal
balances, and interest rates for each interest in REMIC II, each of
which (other than the R-2 interest) is hereby designated as a
regular interest in REMIC II (the "REMIC II Regular
Interests"):
|
REMIC Interest
|
Initial Principal Balance of REMIC Interest
|
Interest Rate
|
Corresponding Class
of REMIC III Interest
|
|
T2-1-AV-1 (4)
|
(5)
|
(1)
|
1-AV-1
|
|
T2-2-AV-1 (4)
|
(5)
|
(1)
|
2-AV-1
|
|
T2-2-AV-2 (4)
|
(5)
|
(1)
|
2-AV-2
|
|
T2-2-AV-3 (4)
|
(5)
|
(1)
|
2-AV-3
|
|
T2-2-AV-4 (4)
|
(5)
|
(1)
|
2-AV-4
|
|
T2-M1 (4)
|
(5)
|
(1)
|
M-1
|
|
T2-M2 (4)
|
(5)
|
(1)
|
M-2
|
|
T2-M3 (4)
|
(5)
|
(1)
|
M-3
|
|
T2-M4 (4)
|
(5)
|
(1)
|
M-4
|
|
T2-M5 (4)
|
(5)
|
(1)
|
M-5
|
|
T2-M6 (4)
|
(5)
|
(1)
|
M-6
|
|
T2-M7 (4)
|
(5)
|
(1)
|
M-7
|
|
T2-M8 (4)
|
(5)
|
(1)
|
M-8
|
|
T2-M9 (4)
|
(5)
|
(1)
|
M-9
|
|
T2-Accrual Interest
|
(6)
|
(1)
|
N/A
|
|
T2-IO
|
(2)
|
(2)
|
N/A
|
|
T2-Arrearage
|
(7)
|
(7)
|
Arrearage
|
|
R-2
|
(3)
|
(3)
|
N/A
|
(1)
The interest rate for each of these interests (the "REMIC
Maximum Rate") with respect to any Distribution Date (and the
related Interest Period) is a per annum rate equal to the weighted
average of the interest rates on the REMIC I Regular Interests,
provided , however , that for any Distribution Date
on which the Class T2-IO Interest is entitled to a portion of the
interest accruals on a REMIC I interest having an "F" in its class
designation, as described in footnote two below, such weighted
average shall be computed by first subjecting the rate on such
REMIC I interest to a cap equal to the product of the interest rate
used to compute the Swap Counterparty Payment adjusted to reflect
the day count convention used for such interest rate ("Swap LIBOR")
for such Distribution Date and 2 (the "REMIC II Net WAC").
(2)
The Class T2-IO is an interest only class that does not have a
principal balance. For only those Distribution Dates listed
in the first column in the table below, the Class T2-IO shall be
entitled to interest accrued on the REMIC I interest listed in the
second column in the table below at a per annum rate equal to the
excess, if any, of (i) the interest rate for such REMIC I interest
for such Distribution Date over (ii) the product of Swap LIBOR for
such Distribution Date and 2.
|
Distribution
Dates
|
REMIC I Class
Designation
|
|
2
|
Class T1-F1 through
T1-F69
|
|
3
|
Class T1-F2 through
T1-F69
|
|
4
|
Class T1-F3 through
T1-F69
|
|
5
|
Class T1-F4 through
T1-F69
|
|
6
|
Class T1-F5 through
T1-F69
|
|
7
|
Class T1-F6 through
T1-F69
|
|
8
|
Class T1-F7 through
T1-F69
|
|
9
|
Class T1-F8 through
T1-F69
|
|
10
|
Class T1-F9 through
T1-F69
|
|
11
|
Class T1-F10 through
T1-F69
|
|
12
|
Class T1-F11 through
T1-F69
|
|
13
|
Class T1-F12 through
T1-F69
|
|
14
|
Class T1-F13 through
T1-F69
|
|
15
|
Class T1-F14 through
T1-F69
|
|
16
|
Class T1-F15 through
T1-F69
|
|
17
|
Class T1-F16 through
T1-F69
|
|
18
|
Class T1-F17 through
T1-F69
|
|
19
|
Class T1-F18 through
T1-F69
|
|
20
|
Class T1-F19 through
T1-F69
|
|
21
|
Class T1-F20 through
T1-F69
|
|
22
|
Class T1-F21 through
T1-F69
|
|
23
|
Class T1-F22 through
T1-F69
|
|
24
|
Class T1-F23 through
T1-F69
|
|
25
|
Class T1-F24 through
T1-F69
|
|
26
|
Class T1-F25 through
T1-F69
|
|
27
|
Class T1-F26 through
T1-F69
|
|
28
|
Class T1-F27 through
T1-F69
|
|
29
|
Class T1-F28 through
T1-F69
|
|
30
|
Class T1-F29 through
T1-F69
|
|
31
|
Class T1-F30 through
T1-F69
|
|
32
|
Class T1-F31 through
T1-F69
|
|
33
|
Class T1-F32 through
T1-F69
|
|
34
|
Class T1-F33 through
T1-F69
|
|
35
|
Class T1-F34 through
T1-F69
|
|
36
|
Class T1-F35 through
T1-F69
|
|
37
|
Class T1-F36 through
T1-F69
|
|
38
|
Class T1-F38 through
T1-F69
|
|
39
|
Class T1-F37 through
T1-F69
|
|
40
|
Class T1-F39 through
T1-F69
|
|
41
|
Class T1-F40 through
T1-F69
|
|
42
|
Class T1-F41 through
T1-F69
|
|
43
|
Class T1-F42 through
T1-F69
|
|
44
|
Class T1-F43 through
T1-F69
|
|
45
|
Class T1-F44 through
T1-F69
|
|
46
|
Class T1-F45 through
T1-F69
|
|
47
|
Class T1-F46 through
T1-F69
|
|
48
|
Class T1-F47 through
T1-F69
|
|
49
|
Class T1-F48 through
T1-F69
|
|
50
|
Class T1-F49 through
T1-F69
|
|
51
|
Class T1-F50 through
T1-F69
|
|
52
|
Class T1-F51 through
T1-F69
|
|
53
|
Class T1-F52 through
T1-F69
|
|
54
|
Class T1-F53 through
T1-F69
|
|
55
|
Class T1-F54 through
T1-F69
|
|
56
|
Class T1-F55 through
T1-F69
|
|
57
|
Class T1-F56 through
T1-F69
|
|
58
|
Class T1-F57 through
T1-F69
|
|
59
|
Class T1-F58 through
T1-F69
|
|
60
|
Class T1-F59 through
T1-F69
|
|
61
|
Class T1-F60 through
T1-F69
|
|
62
|
Class T1-F61 through
T1-F69
|
|
63
|
Class T1-F62 through
T1-F69
|
|
64
|
Class T1-F63 through
T1-F69
|
|
65
|
Class T1-F64 through
T1-F69
|
|
66
|
Class T1-F65 through
T1-F69
|
|
67
|
Class T1-F66 through
T1-F69
|
|
68
|
Class T1-F67 through
T1-F69
|
|
69
|
Class T1-F68 through
T1-F69
|
|
70
|
Class T1-F69
|
(3)
The R-2 interest shall not have a principal amount and shall not
bear interest. The R-2 interest is hereby designated as the
sole class of residual interest in REMIC II.
(4)
This interest is a REMIC II Accretion Directed Class.
(5)
This interest shall have an Initial Principal Balance equal to
one-half of the initial Class Principal Balance of its
Corresponding Class of Interests in the Master REMIC.
(6)
This interest shall have an Initial Principal Balance equal to
the excess of (i) the aggregate loan balance of the Home Equity
Loans over (ii) the aggregate Initial Class Principal Balance of
the REMIC II Accretion Directed Classes.
(7)
This interest shall not bear interest and have an Initial
Principal Balance equal to the Initial Principal Balance of the
T1-Arrearage interest.
On the Business Day prior to each Distribution Date, interest
shall be allocated with respect to the interests in REMIC II based
on the above-described interest rates, provided however ,
that interest that accrues on the T2-Accrual Interest shall be
deferred to the extent necessary to make the distributions of
principal described below. Any interest so deferred shall
itself bear interest at the interest rate for the T2-Accrual
Interest.
On the Business Day prior to each Distribution Date the
principal distributed on the REMIC interests (together with an
amount equal to the interest deferred on the T2-Accrual Interest
for such Distribution Date) shall be distributed, and Realized
Losses shall be allocated, among the interests in REMIC II in the
following order of priority:
(i)
First, to each interest in REMIC II having a Corresponding Class
in the Master REMIC until the outstanding principal amount of each
such interest equals one-half of the outstanding principal amount
of such Corresponding Class for such interest immediately after
such Distribution Date; and
(ii)
Second, to the T2-Accrual Interest, any remaining amounts.
On the Business Day prior to each Distribution Date, all
Prepayment Charges distributed to the T1-V69 interest shall be
distributed to the Class T2-Accrual Interest and all amounts paid
with respect to unreimbursed Arrearages to the T1-Arrearage
interest shall be distributed to the T2-Arrearage interest.
(g)
The Master REMIC. The Class 1-AV-1, Class 2-AV-1, Class
2-AV-2, Class 2-AV-3, Class 2-AV-4, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9 and Class X-IO Certificates are hereby designated as "regular
interests" with respect to the Master REMIC (the "Master REMIC
Regular Certificates") and the R-III Interest is hereby designated
as the single "residual interest" with respect to the Master REMIC.
The beneficial ownership interest in the Master REMIC created
hereunder shall be evidenced by the interests having the following
characteristics and terms:
|
Class Designation
|
Initial Certificate
Principal Balance
|
Certificate Interest Rate
|
Final Scheduled
Distribution Date
|
|
Class 1-AV-1
|
$234,882,000
|
(1)
|
May 2037
|
|
Class 2-AV-1
|
$180,239,000
|
(2)
|
May 2037
|
|
Class 2-AV-2
|
$108,700,000
|
(3)
|
May 2037
|
|
Class 2-AV-3
|
$43,708,000
|
(4)
|
May 2037
|
|
Class 2-AV-4
|
$59,907,000
|
(5)
|
May 2037
|
|
Class M-1
|
$39,399,000
|
(6)
|
May 2037
|
|
Class M-2
|
$38,559,000
|
(7)
|
May 2037
|
|
Class M-3
|
$14,670,000
|
(8)
|
May 2037
|
|
Class M-4
|
$18,861,000
|
(9)
|
May 2037
|
|
Class M-5
|
$10,059,000
|
(10)
|
May 2037
|
|
Class M-6
|
$10,478,000
|
(11)
|
May 2037
|
|
Class M-7
|
$9,640,000
|
(12)
|
May 2037
|
|
Class M-8
|
$9,640,000
|
(13)
|
May 2037
|
|
Class M-9
|
$12,155,000
|
(14)
|
May 2037
|
|
Class X-IO
|
(15)
|
(16)
|
May 2037
|
|
Class P
|
(17)
|
(17)
|
May 2037
|
|
Class R
|
(18)
|
(18)
|
May 2037
|
|
|
|
|
|
|
|
|
|
|
(1)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 0.220% per annum (or plus 0.440% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Group 1 Net WAC Cap. Any entitlement to
Group 1 Net WAC Rate Carryovers shall not be an obligation of any
REMIC created hereunder. For purposes of the REMIC Provisions, the
reference to "Group 1 Net WAC Cap" in the Certificate Rate shall be
deemed to be a reference to the REMIC II Net WAC; therefore, on any
Distribution Date on which the Certificate Rate for any Certificate
exceeds the REMIC II Net WAC Rate, interest accruals based on such
excess shall be treated as having been paid from the Net WAC Cap
Carryover Reserve Fund or the Swap Account, as applicable; on any
Distribution Date on which the Certificate Rate on a Class of
Certificates is based on the Group 1 Net WAC Cap, the amount of
interest that would have accrued on such Class of Certificates if
the REMIC II Net WAC Rate were substituted for the Group 1 Net WAC
Rate shall be treated as having been paid by the holder of such
Certificate to the Swap Account, all pursuant to and as further
provided in Section 7.12(e) hereof.
(2)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 0.120% per annum (or plus 0.240% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Group 2 Net WAC Cap. Any entitlement to
Group 2 Net WAC Rate Carryovers shall not be an obligation of any
REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Group 2 Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the Group 2
Net WAC Cap, the amount of interest that would have accrued on such
Class of Certificates if the REMIC II Net WAC Rate were substituted
for the Group 2 Net WAC Rate shall be treated as having been paid
by the holder of such Certificate to the Swap Account, all pursuant
to and as further provided in Section 7.12(e) hereof.
(3)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 0.180% per annum (or plus 0.360% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Group 2 Net WAC Cap. Any entitlement to
Group 2 Net WAC Rate Carryovers shall not be an obligation of any
REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Group 2 Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the Group 2
Net WAC Cap, the amount of interest that would have accrued on such
Class of Certificates if the REMIC II Net WAC Rate were substituted
for the Group 2 Net WAC Rate shall be treated as having been paid
by the holder of such Certificate to the Swap Account, all pursuant
to and as further provided in Section 7.12(e) hereof.
(4)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 0.250% per annum (or plus 0.500% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Group 2 Net WAC Cap. Any entitlement to
Group 2 Net WAC Rate Carryovers shall not be an obligation of any
REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Group 2 Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the Group 2
Net WAC Cap, the amount of interest that would have accrued on such
Class of Certificates if the REMIC II Net WAC Rate were substituted
for the Group 2 Net WAC Rate shall be treated as having been paid
by the holder of such Certificate to the Swap Account, all pursuant
to and as further provided in Section 7.12(e) hereof.
(5)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 0.320% per annum (or plus 0.640% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Group 2 Net WAC Cap. Any entitlement to
Group 2 Net WAC Rate Carryovers shall not be an obligation of any
REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Group 2 Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the Group 2
Net WAC Cap, the amount of interest that would have accrued on such
Class of Certificates if the REMIC II Net WAC Rate were substituted
for the Group 2 Net WAC Rate shall be treated as having been paid
by the holder of such Certificate to the Swap Account, all pursuant
to and as further provided in Section 7.12(e) hereof.
(6)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 0.410% per annum (or plus 0.615% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Subordinate Net WAC Cap. Any entitlement to
Subordinate Net WAC Rate Carryovers shall not be an obligation of
any REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Subordinate Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the
Subordinate Net WAC Cap, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Subordinate Net WAC Rate shall be treated
as having been paid by the holder of such Certificate to the Swap
Account, all pursuant to and as further provided in Section 7.12(e)
hereof.
(7)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 0.470% per annum (or plus 0.705% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Subordinate Net WAC Cap. Any entitlement to
Subordinate Net WAC Rate Carryovers shall not be an obligation of
any REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Subordinate Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the
Subordinate Net WAC Cap, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Subordinate Net WAC Rate shall be treated
as having been paid by the holder of such Certificate to the Swap
Account, all pursuant to and as further provided in Section 7.12(e)
hereof.
(8)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 0.570% per annum (or plus 0.855% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Subordinate Net WAC Cap. Any entitlement to
Subordinate Net WAC Rate Carryovers shall not be an obligation of
any REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Subordinate Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the
Subordinate Net WAC Cap, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Subordinate Net WAC Rate shall be treated
as having been paid by the holder of such Certificate to the Swap
Account, all pursuant to and as further provided in Section 7.12(e)
hereof.
(9)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 0.950% per annum (or plus 1.425% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Subordinate Net WAC Cap. Any entitlement to
Subordinate Net WAC Rate Carryovers shall not be an obligation of
any REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Subordinate Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the
Subordinate Net WAC Cap, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Subordinate Net WAC Rate shall be treated
as having been paid by the holder of such Certificate to the Swap
Account, all pursuant to and as further provided in Section 7.12(e)
hereof.
(10)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 1.250% per annum (or plus 1.875% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Subordinate Net WAC Cap. Any entitlement to
Subordinate Net WAC Rate Carryovers shall not be an obligation of
any REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Subordinate Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the
Subordinate Net WAC Cap, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Subordinate Net WAC Rate shall be treated
as having been paid by the holder of such Certificate to the Swap
Account, all pursuant to and as further provided in Section 7.12(e)
hereof.
(11)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 1.600% per annum (or plus 2.400% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Subordinate Net WAC Cap. Any entitlement to
Subordinate Net WAC Rate Carryovers shall not be an obligation of
any REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Subordinate Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the
Subordinate Net WAC Cap, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Subordinate Net WAC Rate shall be treated
as having been paid by the holder of such Certificate to the Swap
Account, all pursuant to and as further provided in Section 7.12(e)
hereof.
(12)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 2.500% per annum (or plus 3.750% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Subordinate Net WAC Cap. Any entitlement to
Subordinate Net WAC Rate Carryovers shall not be an obligation of
any REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Subordinate Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the
Subordinate Net WAC Cap, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Subordinate Net WAC Rate shall be treated
as having been paid by the holder of such Certificate to the Swap
Account, all pursuant to and as further provided in Section 7.12(e)
hereof.
(13)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 2.500% per annum (or plus 3.750% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Subordinate Net WAC Cap. Any entitlement to
Subordinate Net WAC Rate Carryovers shall not be an obligation of
any REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Subordinate Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the
Subordinate Net WAC Cap, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Subordinate Net WAC Rate shall be treated
as having been paid by the holder of such Certificate to the Swap
Account, all pursuant to and as further provided in Section 7.12(e)
hereof.
(14)
For each Interest Period, this Class shall bear interest at the
lesser of (i) LIBOR plus 2.500% per annum (or plus 3.750% per
annum for each Interest Period occurring after the Clean-Up Call
Date) and (ii) the Subordinate Net WAC Cap. Any entitlement to
Subordinate Net WAC Rate Carryovers shall not be an obligation of
any REMIC created hereunder. For purposes of the REMIC
Provisions, the reference to "Subordinate Net WAC Cap" in the
Certificate Rate shall be deemed to be a reference to the REMIC II
Net WAC; therefore, on any Distribution Date on which the
Certificate Rate for any Certificate exceeds the REMIC II Net WAC
Rate, interest accruals based on such excess shall be treated as
having been paid from the Net WAC Cap Carryover Reserve Fund or the
Swap Account, as applicable; on any Distribution Date on which the
Certificate Rate on a Class of Certificates is based on the
Subordinate Net WAC Cap, the amount of interest that would have
accrued on such Class of Certificates if the REMIC II Net WAC Rate
were substituted for the Subordinate Net WAC Rate shall be treated
as having been paid by the holder of such Certificate to the Swap
Account, all pursuant to and as further provided in Section 7.12(e)
hereof.
(15)
The Class X-IO Certificate shall have an initial principal
balance equal to the excess of the principal balance of the Home
Equity Loans as of the Cut-Off Date over the sum of the initial
principal balances of the Certificates, other than the Class X-IO
and Class R Certificates. It shall not be entitled to
interest on its principal balance. The Class X-IO Certificate
shall also have an initial notional balance equal to the aggregate
of the principal balance of each Home Equity Loan as of the Cut-Off
Date and such notional balance for each Distribution Date shall
equal the aggregate principal balance of the Home Equity Loans as
of the beginning of the related Remittance Period.
(16)
The Class X-IO Certificates shall represent ownership of a
regular interest, which shall comprise two notional components.
For any Distribution Date, the Class X-IO Certificate shall
be entitled to receive interest on its notional balance at a per
annum rate equal to the excess of: (i) the REMIC II Net WAC Rate
over (ii) the weighted average interest rate of the REMIC II
Regular Interests (other than any interest-only or principal-only
regular interest) and the Class T2-Accrual Interest, where the
Class T2-Accrual Interest is subject to a cap equal to zero and
each remaining REMIC II Regular Interest is subject to a cap equal
to the Certificate Rate on its Corresponding Class, determined for
this purpose by substituting the REMIC II Net WAC Rate for the
applicable Net WAC Cap. The second notional component
represents the right to receive all distributions in respect of the
Class T2-IO Interest in REMIC II (the "Class T-I Interest")
In addition, the Class X-IO Certificates shall be entitled to
an amount, as principal, equal to the amount that the Original
Aggregate Loan Balance exceeds the aggregate Certificate Principal
Balance of the Offered Certificates and the Class P Certificates,
as of the Startup Date.
(17)
The Class P Certificates shall be entitled to the Prepayment
Charges. The Class P Certificates shall not be entitled to
any payments of interest.
(18)
The Class R Certificates represent ownership of the R-1, R-2 and
R-3 Interests. The Class R Certificates do not have either a
principal balance or an interest rate.
(h)
The foregoing REMIC structure is intended to cause all of the
cash from the Home Equity Loans to flow through to the Master REMIC
as cash flow on a REMIC regular interest, without creating any
shortfall—actual or potential (other than for credit losses)
to any REMIC regular interest. To the extent that the
structure is believed to diverge from such intention the Trustee
shall resolve ambiguities to accomplish such result and shall to
the extent necessary rectify any drafting errors or seek
clarification to the structure without Certificateholder approval
(but with guidance of counsel) to accomplish such intention.
Section
2.09.
Miscellaneous REMIC Provisions.
(a)
The Startup Day is hereby designated as the "startup day" of
each REMIC created hereunder within the meaning of Section
860G(a)(9) of the Code.
(b)
The Owner of the Tax Matters Person Residual Interest in each
REMIC created hereunder is hereby designated as "tax matters
person" as defined in the REMIC Provisions with respect to the
REMIC.
(c)
The Trust and each REMIC created hereunder shall, for federal
income tax purposes, maintain books on a calendar year basis and
report income on an accrual basis.
(d)
The Trustee shall cause each REMIC created hereunder to elect to
be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the
administration of the Trust shall be resolved in a manner that
preserves the validity of such election to be treated as a REMIC.
The Trustee shall report all expenses of the Trust Estate to
each REMIC created hereunder.
(e)
For all federal tax law purposes, amounts transferred by the
Trustee to the Owners of the Class R Certificates shall be treated
as distributions by each respective REMIC created hereunder.
(f)
The Trustee shall provide to the Internal Revenue Service and to
the person described in Section 860E(e)(3) and (6) of the Code the
information described in Treasury Regulation Section
1.860D-1(b)(5)(ii), or any successor regulation thereto with
respect to each REMIC created hereunder. Such information
will be provided in the manner described in Treasury Regulation
Section 1.860E-2(a)(5), or any successor regulation thereto.
(g)
The Master REMIC shall issue one regular interest in addition to
those designated in Section 2.08. Such interest shall be an
uncertificated, principal-only regular interest and shall be
entitled to receive all Arrearage amounts. The Servicer shall
be treated as the beneficial owner of such interest for federal
income tax purposes.
Section
2.10.
Supplemental Interest Trust.
A separate trust is hereby established (the "Supplemental
Interest Trust"), the corpus of which shall be held by the
Supplemental Interest Trustee, in trust, for the benefit of the
holders of the Offered Certificates.
END OF ARTICLE II
ARTICLE
III
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF
THE DEPOSITOR, THE SERVICER AND THE SELLERS;
COVENANT OF SELLER TO CONVEY HOME EQUITY
LOANS
Section
3.01.
Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the
Trustee that as of the Startup Day:
(a)
The Depositor is a limited liability company duly formed and
validly existing under the laws governing its creation and
existence, is not in violation of the laws of any state in which
any Property or the Depositor is located or doing business which
violation would materially and adversely affect the condition
(financial or other) or the operations of the Depositor or its
properties or the ability of the Trust to collect amounts due on
any Home Equity Loan and is in good standing in each jurisdiction
in which the nature of its business or the properties owned or
leased by it make such qualification necessary. The Depositor
has all requisite limited liability company power and authority to
own and operate its properties, to carry out its business as
presently conducted and as proposed to be conducted and to enter
into and discharge its obligations under this Agreement and the
other Operative Documents to which it is a party.
(b)
The execution and delivery of this Agreement and the other
Operative Documents to which it is a party by the Depositor and its
performance and compliance with the terms of this Agreement and the
other Operative Documents to which it is a party have been duly
authorized by all necessary limited liability company action on the
part of the Depositor and will not violate the Depositor’s
certificate of formation or amended and restated limited liability
company agreement or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default)
under, or result in a breach of, any material contract, agreement
or other instrument to which the Depositor is a party or by which
the Depositor is bound or violate any statute or any order, rule or
regulation of any court, governmental agency or body or other
tribunal having jurisdiction over the Depositor or any of its
properties.
(c)
This Agreement and the other Operative Documents to which the
Depositor is a party, assuming due authorization, execution and
delivery by the other parties hereto and thereto, each constitutes
a valid, legal and binding obligation of the Depositor, enforceable
against it in accordance with the terms hereof and thereof, except
as the enforcement hereof and thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and by general
principles of equity (whether considered in a proceeding or action
in equity or at law).
(d)
The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default
could materially and adversely affect the condition (financial or
other) or operations of the Depositor or its properties or the
consequences of which could materially and adversely affect its
performance hereunder and under the other Operative Documents to
which the Depositor is a party.
(e)
No litigation, proceeding or investigation is pending with
respect to which the Depositor has received service of process or,
to the best of the Depositor’s knowledge, threatened against
the Depositor which litigation, proceeding or investigation might
have consequences that would prohibit its entering into this
Agreement or any other Operative Documents to which it is a party
or that would materially and adversely affect the condition
(financial or otherwise) or operations of the Depositor or its
properties or might have consequences that would materially and
adversely affect the validity or enforceability of the Home Equity
Loans or the Depositor’s performance hereunder and under the
other Operative Documents to which the Depositor is a party.
(f)
The statements contained in the Registration Statement which
describe the Depositor or matters or activities for which the
Depositor is responsible in accordance with the Operative Documents
or which are attributed to the Depositor therein are true and
correct in all material respects, and the Registration Statement
does not contain any untrue statement of a material fact with
respect to the Depositor or omit to state a material fact required
to be stated therein or necessary in order to make the statements
contained therein with respect to the Depositor not misleading.
(g)
Immediately prior to the sale and assignment by the Depositor to
the Trustee on behalf of the Trust of each Home Equity Loan, the
Depositor had good title to each Home Equity Loan (insofar as such
title was conveyed to it by the Sellers) subject to no prior lien,
claim, participation interest, mortgage, security interest, pledge,
charge or other encumbrance or other interest of any nature (other
than liens which will be simultaneously released).
(h)
As of the Startup Day, the Depositor has transferred all right,
title and interest in the Home Equity Loans to the Trustee on
behalf of the Trust.
(i)
The Depositor has not transferred the Home Equity Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors.
(j)
All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may
be, by or from any federal, state or other governmental authority
or agency (other than any such actions, approvals, etc. under any
state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Depositor makes no such representation or
warranty), that are necessary or advisable in connection with the
purchase and sale of the Certificates and the execution and
delivery by the Depositor of the Operative Documents to which it is
a party, have been duly taken, given or obtained, as the case may
be, are in full force and effect on the date hereof, are not
subject to any pending proceedings or appeals (administrative,
judicial or otherwise) and either the time within which any appeal
therefrom may be taken or review thereof may be obtained has
expired or no review thereof may be obtained or appeal therefrom
taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and the other Operative
Documents on the part of the Depositor and the performance by the
Depositor of its obligations under this Agreement and such of the
other Operative Documents to which it is a party.
Section
3.02.
Representations and Warranties of the Servicer.
The Servicer hereby represents, warrants and covenants to the
Depositor, the Trustee and the Owners that as of the Startup
Day:
(a)
The Servicer is a limited liability company duly formed and
validly existing under the laws governing its creation and
existence, is in compliance with the laws of each state in which
any Property is located to the extent necessary to enable it to
perform its obligations hereunder and is in good standing in each
jurisdiction in which the nature of its business or the properties
owned or leased by it make such qualification necessary. The
Servicer has all requisite limited liability company power and
authority to own and operate its properties, to carry out its
business as presently conducted and as proposed to be conducted and
to enter into and discharge its obligations under this Agreement
and the other Operative Documents to which the Servicer is a party.
(b)
The execution and delivery of this Agreement and any other
Operative Document to which it is a party by the Servicer and its
performance and compliance with the terms hereof and thereof have
been duly authorized by all necessary limited liability company
action on the part of the Servicer and will not violate the
Servicer’s certificate of formation or limited liability
company agreement or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default)
under, or result in the breach of, any material contract, agreement
or other instrument to which the Servicer is a party or by which
the Servicer is bound or violate any statute or any order, rule or
regulation of any court, governmental agency or body or other
tribunal having jurisdiction over the Servicer or any of its
properties.
(c)
This Agreement and the other Operative Documents to which the
Servicer is a party, assuming due authorization, execution and
delivery by the other parties hereto and thereto, each constitutes
a valid, legal and binding obligation of the Servicer, enforceable
against it in accordance with the terms hereof and thereof, except
as the enforcement hereof and thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and by general
principles of equity (whether considered in a proceeding or action
in equity or at law).
(d)
The Servicer is not in default with respect to any order or
decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default
could materially and adversely affect the condition (financial or
otherwise) or operations of the Servicer or its properties or the
consequences of which could materially and adversely affect its
performance hereunder or under the other Operative Documents to
which the Servicer is a party.
(e)
No litigation, proceeding or investigation is pending with
respect to which the Servicer has received service of process or,
to the best of the Servicer’s knowledge, threatened against
the Servicer which litigation, proceeding or investigation might
have consequences that would prohibit its entering into this
Agreement or any other Operative Documents to which it is a party
or that would materially and adversely affect the condition
(financial or otherwise) or operations of the Servicer or its
properties or might have consequences that would materially and
adversely affect the validity or the enforceability of the Home
Equity Loans or the Servicer’s performance hereunder and
under the other Operative Documents to which the Servicer is a
party.
(f)
The statements contained in the Registration Statement which
describe the Servicer or matters or activities for which the
Servicer is responsible in accordance with the Operative Documents
or which are attributed to the Servicer therein are true and
correct in all material respects, and the Registration Statement
does not contain any untrue statement of a material fact with
respect to the Servicer or omit to state a material fact required
to be stated therein or necessary to make the statements contained
therein with respect to the Servicer not misleading.
(g)
The Servicing Fee is a "current (normal) servicing fee rate" as
that term is used in Statement of Financial Accounting Standards
No. 65 issued by the Financial Accounting Standards Board.
Neither the Servicer nor any Affiliate thereof will report on
any financial statements any part of the Servicing Fee as an
adjustment to the sales price of the Home Equity Loans.
(h)
All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may
be, by or from any federal, state or other governmental authority
or agency (other than any such actions, approvals, etc. under any
state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Servicer makes no such representation or
warranty), that are necessary or advisable in connection with the
execution and delivery by the Servicer of the Operative Documents
to which it is a party, have been duly taken, given or obtained, as
the case may be, are in full force and effect on the date hereof,
are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within
which any appeal therefrom may be taken or review thereof may be
obtained has expired or no review thereof may be obtained or appeal
therefrom taken, and are adequate to authorize the consummation of
the transactions contemplated by this Agreement and the other
Operative Documents on the part of the Servicer and the performance
by the Servicer of its obligations under this Agreement and such of
the other Operative Documents to which it is a party.
(i)
The collection practices used by the Servicer with respect to
the Home Equity Loans have been, in all material respects, legal,
proper, prudent and customary in the home equity mortgage servicing
business.
(j)
The transactions contemplated by this Agreement are in the
ordinary course of business of the Servicer.
(k)
The Servicer is not in default under any agreement involving
financial obligations or on any outstanding obligation, in any such
case which could materially adversely impact the financial
condition or operations of the Servicer or adversely impact the
Servicer’s performance of its obligations under the Operative
Documents.
(l)
There are no Sub-Servicers as of the Startup Day.
It is understood and agreed that the representations and
warranties set forth in this Section 3.02 shall survive delivery of
the Home Equity Loans to the Trustee.
Upon discovery by any of the Depositor, the Sellers, the
Servicer, the Custodian, any Sub-Servicer, any Owner or the Trustee
(each, for purposes of this paragraph, a party) of a breach of any
of the representations and warranties set forth in this Section
3.02 which materially and adversely affects the interests of the
Owners, the party discovering such breach shall give prompt written
notice to the other parties. As promptly as practicable, but
in any event within 60 days of its discovery or its receipt of
notice of breach, the Servicer shall cure such breach in all
material respects.
Section
3.03.
Representations and Warranties of the Sellers.
Each of the Seller and the Conduit Seller, as applicable, hereby
severally and not jointly represents, warrants and covenants to the
Depositor, the Trustee and the Owners that as of the Startup
Day:
(a)
In the case of the Seller and the Conduit Seller, that each is a
limited liability company, duly formed and validly existing under
the laws governing its creation and existence, neither the Seller
nor the Conduit Seller is in violation of the laws of any state in
which any Property or either the Seller or the Conduit Seller, as
applicable, is located or doing business which violation would
materially and adversely affect the condition (financial or
otherwise) or operations of the Seller or the Conduit Seller, as
applicable, or its properties or the ability of the Trust to
collect any amounts on any Home Equity Loan and each of the Seller
and the Conduit Seller is in good standing in each jurisdiction in
which the nature of its business or the properties owned or leased
by it make such qualification necessary. The Seller or the
Conduit Seller, as applicable, has all requisite limited liability
company power and authority to own and operate its properties, to
carry out its business as presently conducted and as proposed to be
conducted and to enter into and discharge its obligations under
this Agreement and the other Operative Documents to which it is a
party.
(b)
The execution and delivery of this Agreement and the other
Operative Documents to which the Seller or the Conduit Seller, as
applicable, is a party and its performance and compliance with the
terms of this Agreement and the other Operative Documents to which
it is a party have been duly authorized by all necessary limited
liability company action and will not violate its certificate of
formation or amended and restated limited liability company
agreement, or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, or
result in a breach of, any material contract, agreement or other
instrument to which it is a party or by which it is bound or
violate any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having jurisdiction
over it or any of its properties.
(c)
This Agreement and the other Operative Documents to which the
Seller or the Conduit Seller, as applicable, is a party, assuming
due authorization, execution and delivery by the other parties
hereto and thereto, each constitutes a valid, legal and binding
obligation of the Seller or the Conduit Seller, as applicable,
enforceable hereof and thereof against it in accordance with the
terms hereof and thereof, except as the enforcement hereof and
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors’ rights generally and by general principles of
equity (whether considered in a proceeding or action in equity or
at law).
(d)
Neither the Seller nor the Conduit Seller, as applicable, is in
default with respect to any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or
governmental agency, which default could materially and adversely
affect the condition (financial or other) or operations of the
Seller or the Conduit Seller, as applicable, or its properties or
the consequences of which could materially and adversely affect its
performance hereunder and under the other Operative Documents to
which it is a party.
(e)
No litigation, proceeding or investigation is pending with
respect to which the Seller or the Conduit Seller, as applicable,
has received service of process or, to the best of its knowledge,
threatened against it which litigation, proceeding or investigation
might have consequences that would prohibit its entering into this
Agreement or any other Operative Documents to which it is a party
or that would materially and adversely affect the condition
(financial or otherwise) or operations of the Seller or the Conduit
Seller, as applicable, or its properties or might have consequences
that would materially and adversely affect the validity or
enforceability of the Home Equity Loans or its performance
hereunder and under the other Operative Documents to which it is a
party.
(f)
The statements contained in the Registration Statement which
describe the Seller or the Conduit Seller, as applicable, or
matters or activities for which it is responsible in accordance
with the Operative Documents or which are attributed to it therein
are true and correct in all material respects, and the Registration
Statement does not contain any untrue statement of a material fact
with respect to the Seller or the Conduit Seller, as applicable, or
omit to state a material fact required to be stated therein or
necessary in order to make the statements contained therein with
respect to the Seller or the Conduit Seller, as applicable, not
misleading.
(g)
[Reserved].
(h)
All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may
be, by or from any federal, state or other governmental authority
or agency (other than any such actions, approvals, etc. under any
state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Seller or the Conduit Seller, as
applicable, makes no such representation or warranty), that are
necessary or advisable in connection with the purchase and sale of
the Certificates and the execution and delivery by the Seller or
the Conduit Seller, as applicable, of the Operative Documents to
which it is a party, have been duly taken, given or obtained, as
the case may be, are in full force and effect on the date hereof,
are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within
which any appeal therefrom may be taken or review thereof may be
obtained has expired or no review thereof may be obtained or appeal
therefrom taken, and are adequate to authorize the consummation of
the transactions contemplated by this Agreement and the other
Operative Documents on the part of the Seller or the Conduit
Seller, as applicable, and the performance by the Seller or the
Conduit Seller, as applicable, of its obligations under this
Agreement and such of the other Operative Documents to which it is
a party.
(i)
The origination practices used by the Seller with respect to the
Home Equity Loans have been, in all material respects, legal,
proper, prudent and customary in the home equity lending business.
All of the Home Equity Loans were originated by the Seller,
an Affiliate of the Seller or a broker for simultaneous assignment
to the Seller or were acquired by the Seller from correspondent
lenders and are underwritten to comply with the Seller’s
underwriting standards.
(j)
The transactions contemplated by this Agreement are in the
ordinary course of business of the Seller or the Conduit Seller, as
applicable.
(k)
The Trustee, the Seller and the Conduit Seller have no
obligation to register the Trust and the Trust has no obligation to
register as an investment company under the Investment Company Act
of 1940, as amended.
(l)
The Seller or the Conduit Seller, as applicable, is not
insolvent, nor will it be made insolvent by the transfer of the
Home Equity Loans, nor are the Seller or the Conduit Seller, as
applicable, aware of any pending insolvency.
(m)
The Seller or the Conduit Seller, as applicable, received fair
consideration and reasonably equivalent value in exchange for the
sale of the interests in the Home Equity Loans transferred by
it.
(n)
The Seller or the Conduit Seller, as applicable, did not sell
any interest in any Home Equity Loan with any intent to hinder,
delay or defraud any of its creditors.
(o)
No material adverse change affecting any security for the
Offered Certificates has occurred prior to delivery of and payment
for the Offered Certificates.
(p)
The Seller or the Conduit Seller, as applicable, is not in
default under any agreement involving financial obligations or on
any outstanding obligation, in any such case which would materially
adversely impact the financial condition or operations of the
Seller or the Conduit Seller, as applicable, or its obligations
under the Operative Documents.
(q)
[Reserved].
(r)
The sale, transfer, assignment and conveyance of Home Equity
Loans by the Seller or the Conduit Seller, as applicable, pursuant
to this Agreement is not subject to and will not result in any tax,
fee or governmental charge payable by the Seller or the Conduit
Seller, as applicable, the Depositor or the Trustee to any federal,
state or local government ("Transfer Taxes") other than Transfer
Taxes which have been or will be paid as due by the Seller or the
Conduit Seller, as applicable. The Seller or the Conduit
Seller, as applicable, shall pay any and all such Transfer
Taxes.
(s)
No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Seller or the
Conduit Seller, as applicable, contains any untrue statement of a
material fact or omits to state any material fact necessary to make
the certificate, statement or report not misleading.
It is understood and agreed that the representations and
warranties set forth in this Section 3.03 shall survive delivery of
the respective Home Equity Loans to the Trustee.
Section
3.04.
Covenants of Sellers to Take Certain Actions with Respect to the
Home Equity Loans in Certain Situations.
(a)
Upon the discovery by the Depositor, the Seller, the Conduit
Seller, the Servicer, any Sub-Servicer, any Owner, the Custodian or
the Trustee (each, for purposes of this paragraph, a party) that
the representations and warranties set forth in clause (b)(1) or
(b)(2) below were untrue in any material respect, without regard to
any limitation set forth therein concerning the knowledge of the
Seller or the Servicer as to the facts stated therein, as of the
Startup Day (or in the case of a Qualified Replacement Mortgage, as
of the respective Replacement Cut-Off Date), with the result that
the interests of the Owners in the related Home Equity Loan or
Prepayment Charge are, or may be, materially and adversely
affected, the party discovering such breach shall give prompt
written notice to the other parties. Notwithstanding the
foregoing, any breach of a representation or warranty set forth in
(b)(2) below shall be deemed to be untrue in a material respect.
Upon the earliest to occur of Nationstar Mortgage’s
discovery, its receipt of notice of breach from any one of the
other parties or such time as a situation resulting from an
existing statement which is untrue materially and adversely affects
the interests of the Owners, without regard to any limitation set
forth therein concerning the knowledge of Nationstar Mortgage as to
the facts stated therein, Nationstar Mortgage hereby covenants and
warrants that it shall promptly cure such breach in all material
respects or that it shall on or before the second Monthly
Remittance Date next succeeding such discovery, receipt of notice
or such time (i) substitute in lieu of each Home Equity Loan which
has given rise to the requirement for action by Nationstar Mortgage
a Qualified Replacement Mortgage and deliver the Substitution
Amount to the Servicer for deposit in the Principal and Interest
Account or (ii) purchase such Home Equity Loan from the Trust at a
purchase price equal to the Loan Purchase Price thereof, which
purchase price shall be delivered to the Servicer for deposit in
the Principal and Interest Account. It is understood and
agreed that the obligation of Nationstar Mortgage so to substitute
or purchase any Home Equity Loan as to which such a statement set
forth below in this Section 3.04 is untrue in any material respect
and has not been remedied shall constitute the sole remedy
respecting a discovery of any such statement which is untrue in any
material respect available to the Owners and the Trustee on behalf
of the Owners. Notwithstanding any provision of this
Agreement to the contrary, with respect to any Home Equity Loan
which is not in default or as to which no default is imminent, no
repurchase or substitution pursuant to Section 3.04 or 3.06 shall
be made unless Nationstar Mortgage obtains for the Trustee at its
expense an Opinion of Counsel experienced in federal income tax
matters to the effect that such a repurchase or substitution would
not constitute a Prohibited Transaction for the Trust or any REMIC
created hereunder or otherwise subject the Trust or any REMIC
created hereunder to tax and would not jeopardize the status of any
REMIC created hereunder as a REMIC (a "REMIC Opinion") addressed to
the Trustee and acceptable to the Trustee. Nationstar
Mortgage shall also deliver an Officer’s Certificate to the
Trustee concurrently with the delivery of a Qualified Replacement
Mortgage pursuant to Sections 3.04 and 3.06(b) stating that such
Home Equity Loan meets the requirements of the definition of a
Qualified Replacement Mortgage and that all other conditions to the
substitution thereof have been satisfied. Any Home Equity
Loan as to which repurchase or substitution was delayed pursuant to
this Section shall be repurchased or substituted for (subject to
compliance with Section 3.04 or 3.06(b), as the case may be) upon
the earlier of (a) the occurrence of a default or imminent default
with respect to such Home Equity Loan and (b) receipt by the
Trustee of a REMIC Opinion.
(b)
(1)
The Seller, with respect to the Seller Home Equity Loans, and
the Servicer, in consideration of its appointment hereunder, with
respect to the Conduit Home Equity Loans, and with respect to the
Home Equity Loans taken as a whole, hereby represent, warrant and
covenant to the Trustee, the Depositor, the Servicer and the Owners
that as of the Startup Day (or the Replacement Cut-Off Date, with
respect to a Qualified Replacement Mortgage):
(i)
The information with respect to each Home Equity Loan set forth
in the related Schedule of Home Equity Loans is true and correct in
all material respects as of the Cut-Off Date;
(ii)
Each of the Seller and the Conduit Seller has transferred good
and marketable title (without any implication of a ready market for
the sale thereof) to the Home Equity Loans (including the related
Notes) and other Home Equity Loan Assets, and upon receipt of each
Home Equity Loan and other Home Equity Loan Assets by the Trustee
(including the related Note), the Trust will have good and
marketable title (without any implication of a ready market for the
sale thereof) to such Home Equity Loan (including the related Note)
and other Home Equity Loan Assets, free and clear of any lien,
charge, mortgage, encumbrance or rights of others, except as
permitted under Section 3.04(b)(1)(ix) and except for liens that
will be simultaneously released. All the original or
certified documentation set forth in Section 3.05 (including all
material documents related thereto) with respect to each Home
Equity Loan has been delivered to the Custodian on behalf of the
Trustee on the Startup Day or as otherwise provided in Section
3.05. To the Seller’s or the Servicer’s best
knowledge, no such documentation contains any untrue statement of a
material fact or omits to state a material fact necessary to make
the statements contained therein not misleading;
(iii)
Each Home Equity Loan being transferred to the Trust is a
Qualified Mortgage and is a Mortgage;
(iv)
Each Property is a fee simple estate in a single parcel of real
property improved by a single family residential dwelling (except
1,086 Properties that are condominiums, townhouses, manufactured
housing, two- to four-family residential dwellings or PUDs), and no
more than 20.00% and 30.00%, respectively, of the aggregate Loan
Balance of the Home Equity Loans in Group 1 and Group 2 as of the
Cut-Off Date are secured by Properties that are Manufactured Homes,
each of which is considered to be real property under the
applicable local law;
(v)
As of the Cut-Off Date or Replacement Cut-Off Date, as
applicable, no Home Equity Loans has a Loan-to-Value Ratio in
excess of 100%;
(vi)
Each Home Equity Loan is being serviced by the Servicer in
accordance with the terms of this Agreement;
(vii)
The information set forth in the applicable part of the
Prepayment Charge Schedule relating to the existence of a
Prepayment Charge is complete, true and correct in all material
respects at the date or dates respecting which such information is
furnished and each Prepayment Charge is permissible and enforceable
in accordance with its terms upon the Mortgagor’s full and
voluntary principal prepayment under applicable law, except to the
extent that: (1) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors’ rights; (2) the
collectability thereof may be limited due to acceleration in
connection with a foreclosure or other involuntary prepayment; or
(3) subsequent changes in applicable law may limit or prohibit
enforceability thereof under applicable law;
(viii)
Each Note with respect to the Home Equity Loans will provide for
a schedule of substantially level and equal Monthly Payments (or
periodic rate adjustments in the case of the Adjustable Rate Home
Equity Loans), which are sufficient to amortize fully the principal
balance of such Note on or before its maturity date, except for (A)
78 Home Equity Loans, representing approximately 0.49% of the
aggregate Loan Balance of the Home Equity Loans as of the Cut-Off
Date, which may provide for a "balloon" payment due at the end of
the 15th year, 1,162 Home Equity Loans, representing approximately
37.52% of the aggregate Loan Balance of the Home Equity Loans as of
the Cut-Off Date, which may provide for a "balloon" payment due at
the end of the 30th year, and (B) any "interest only" Home Equity
Loans. 2 and 5 Home Equity Loans in Group 1 and Group 2,
respectively, representing 0.17% and 0.27% of the aggregate Group
Balance of the Home Equity Loans in Group 1 and Group 2,
respectively, are "interest only" Home Equity Loans, which provide
for payments of interest but not principal for the first 60 months,
in the case of Group 1, for the first 60 months, in the case of
Group 2, and thereafter payments of interest and principal on a
monthly basis. No Home Equity Loan is a graduated payment
loan;
(ix)
As of the Startup Day, each Mortgage is a valid and enforceable
first or second lien of record (or is in the process of being
recorded) on the Property subject in the case of any Second
Mortgage Loan only to a Senior Lien on such Property and subject in
all cases to the exceptions to title set forth in the title
insurance policy (or the binding commitment therefor) or
attorney’s opinion of title, with respect to the related Home
Equity Loan, which exceptions are generally acceptable to banking
institutions in connection with their regular mortgage lending
activities, and such other exceptions to which similar properties
are commonly subject and which do not individually, or in the
aggregate, materially and adversely affect the benefits of the
security intended to be provided by such Mortgage;
(x)
Immediately prior to the transfer and assignment of the Home
Equity Loans by the Seller or the Conduit Seller, as applicable, to
the Depositor and by the Depositor to the Trustee herein
contemplated, the Seller, the Conduit Seller and the Depositor, as
the case may be, each held good and marketable title (without any
implication of a ready market for the sale thereof) to, and was the
sole owner of, each Home Equity Loan (including the related Note)
conveyed by the Seller (or the Conduit Seller, as applicable)
subject to no liens, charges, mortgages, encumbrances or rights of
others except as set forth in clause (ix) or other liens which will
be released simultaneously with such transfer and assignment; and
immediately upon the transfer and assignment herein contemplated,
the Trustee will hold good and marketable title (without any
implication of a ready market for the sale thereof) to, and be the
sole owner of, each Home Equity Loan subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth in
paragraph (ix) or other liens which will be released simultaneously
with such transfer and assignment;
(xi)
As of the Cut-Off Date, 0.95% of the Home Equity Loans are
between 30 and 59 days Delinquent and none of the Home Equity
Loans is more than 59 days Delinquent;
(xii)
To the best knowledge of the Seller or the Servicer, as
applicable, there is no delinquent tax or assessment lien on any
Property, and each Property is free of substantial damage and is in
good repair (ordinary wear and tear excepted);
(xiii)
To the best knowledge of the Seller or the Servicer, as
applicable, there is no valid and enforceable right of offset,
claim, defense or counterclaim to any Note or Mortgage, including
the obligation of the related Mortgagor to pay the unpaid principal
of or interest on such Note, nor has any such claim, defense,
offset or counterclaim been asserted;
(xiv)
To the best knowledge of the Seller or the Servicer, as
applicable, there is no mechanics’ lien or claim for work,
labor or material affecting any Property which is or may be a lien
prior to, or equal with, the lien of the related Mortgage except
those which are insured against by any title insurance policy
referred to in paragraph (xvi) below;
(xv)
To the best knowledge of the Seller, each Home Equity Loan and
the prepayment penalty associated with the Home Equity Loan at the
time it was made complied in all material respects with applicable
local, state and federal laws and regulations, including, without
limitation, all applicable predatory and abusive lending laws, the
federal Truth-in-Lending Act (as amended by the Riegle Community
Development and Regulatory Improvement Act of 1994) and other
consumer protection, usury, equal credit opportunity, disclosure
and recording laws. None of the Home Equity Loans is subject
to the Home Ownership and Equity Protection Act of 1994. None
of the Home Equity Loans is a "high-cost" loan as defined by the
applicable predatory and abusive lending laws. No Home Equity
Loan is a High Cost Loan or Covered Loan, as applicable (as such
terms are defined in the then current Standard & Poor’s
LEVELS ® Glossary which is now Version 6.0 Revised,
Appendix E) and no Home Equity Loan originated on or after October
1, 2002 through March 6, 2003, if any, is governed by the Georgia
Fair Lending Act;
(xvi)
With respect to each Home Equity Loan either (a) if a title
insurance policy is not available in the applicable state, an
attorney’s opinion of title has been obtained but no title
policy has been obtained, (b) for certain of the Home Equity Loans
the original principal balance of which was equal to or less than
$40,000, a title report and indemnity has been obtained, or (c) a
lender’s title insurance policy (or a binding commitment
therefor), issued in standard American Land Title Association form
by a title insurance company authorized to transact business in the
state in which the related Property is situated, in an amount at
least equal to the original balance of such Home Equity Loan
together, in the case of a Second Mortgage Loan, with the
then-original principal amount of the mortgage note relating to the
Senior Lien, insuring the mortgagee’s interest under the
related Home Equity Loan as the holder of a valid first or second
mortgage lien of record on the real Property described in the
related Mortgage, as the case may be, subject only to exceptions of
the character referred to in paragraph (ix) above, was
effective on the date of the origination of such Home Equity Loan,
and, as of the Startup Day, such policy (or commitment) is valid
and thereafter (or upon issuance pursuant to the commitment) such
policy shall continue in full force and effect;
(xvii)
The improvements upon each Property are covered by a valid and
existing hazard insurance policy with a carrier generally
acceptable to the Servicer that provides for fire and extended
coverage representing coverage not less than the least of (A) the
outstanding principal balance of the related Home Equity Loan
(together, in the case of a Second Mortgage Loan, with the
outstanding principal balance of the Senior Lien), (B) the
minimum amount required to compensate for damage or loss on a
replacement cost basis or (C) the full insurable value of the
Property;
(xviii)
If any Property is in an area identified in the Federal Register
by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Property with a
carrier generally acceptable to the Servicer in an amount
representing coverage not less than the least of (A) the
outstanding principal balance of the related Home Equity Loan
(together, in the case of a Second Mortgage Loan, with the
outstanding principal balance of the Senior Lien), (B) the minimum
amount required to compensate for damage or loss on a replacement
cost basis or (C) the maximum amount of insurance that is available
under the Flood Disaster Protection Act of 1973;
(xix)
Each Mortgage and Note are the legal, valid and binding
obligation of the maker thereof and are enforceable in accordance
with their terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally
and by general principles of equity (whether considered in a
proceeding or action in equity or at law), and all parties to each
Home Equity Loan had full legal capacity to execute all documents
relating to such Home Equity Loan and convey the estate therein
purported to be conveyed;
(xx)
The Seller or the Servicer, as applicable, has caused and will
cause to be performed any and all acts required to be performed to
preserve the rights and remedies of the Trustee in any Insurance
Policies applicable to any Home Equity Loans delivered by the
Seller or the Conduit Seller, as applicable, including, without
limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of co-insured,
joint loss payee and mortgagee rights in favor of the Trustee;
(xxi)
As of the Cut-Off Date, no more than 0.58% of the aggregate Loan
Balance of the Home Equity Loans is secured by Properties located
within any single zip code area;
(xxii)
Each original Mortgage was recorded or is in the process of
being recorded, and all subsequent assignments of the original
Mortgage (other than unrecorded warehouse assignments which are
being simultaneously released in connection with the Closing) have
been delivered for recordation or have been recorded in the
appropriate jurisdictions wherein such recordation is necessary to
perfect the lien thereof as against creditors of or purchasers from
the Seller or the Conduit Seller, as applicable (or, subject to
Section 3.05 hereof, are in the process of being recorded); each
Mortgage and assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in
which the Property securing such Mortgage is located;
(xxiii)
The terms of each Note and each Mortgage have not been impaired,
waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the
interest of the Owners and which has been delivered to the Trustee.
The substance of any such waiver, alteration or modification
is reflected on the related Schedule of Home Equity Loans;
(xxiv)
The proceeds of each Home Equity Loan have been fully disbursed,
and there is no obligation on the part of the mortgagee to make
future advances thereunder. Any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing or
recording such Home Equity Loans were paid and the Mortgagor is not
entitled to any refund of any amounts paid or due under the related
Note or Mortgage;
(xxv)
The related Note is not and has not been secured by any
collateral, pledged account or other security except the lien of
the corresponding Mortgage;
(xxvi)
No Home Equity Loan has a shared appreciation feature or other
contingent interest feature;
(xxvii)
Each Property is located in the state identified in the
respective Schedule of Home Equity Loans and consists of one or
more parcels of real property with a residential dwelling erected
thereon;
(xxviii)
Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Home Equity
Loan in the event the related Property is sold without the prior
consent of the mortgagee thereunder;
(xxix)
No Note permits or obligates the Servicer to make future
advances to the related Mortgagor at the option of the
Mortgagor;
(xxx)
To the best knowledge of the Seller or the Servicer, as
applicable, there is no proceeding pending or threatened for the
total or partial condemnation of any Property, nor is such a
proceeding currently occurring, and each Property is undamaged by
waste, fire, water, flood, earthquake, earth movement or other
casualty;
(xxxi)
All of the improvements which were included for the purposes of
determining the Appraised Value of any Property lie wholly within
the boundaries and building restriction lines of such Property, and
no improvements on adjoining properties encroach upon such
Property, and are stated in the title insurance policy and
affirmatively insured;
(xxxii)
To the best knowledge of the Seller or the Servicer, as
applicable, (A) no improvement located on or being part of any
Property is in violation of any applicable zoning law or regulation
and (B) all inspections, licenses and certificates required by
applicable law to be made or issued with respect to all occupied
portions of each Property and with respect to the use and occupancy
of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made by or obtained
from the appropriate authorities and such Property is lawfully
occupied under the applicable law;
(xxxiii)
With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable
by the Owners or the Trust to the trustee under the deed of trust,
except in connection with a trustee’s sale after default by
the related Mortgagor;
(xxxiv)
Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate
for the realization against the related Property of the benefits of
the security, including (A) in the case of a Mortgage designated as
a deed of trust, by trustee’s sale and (B) otherwise by
judicial foreclosure. There is no homestead or other
exemption other than any applicable Mortgagor redemption rights
available to the related Mortgagor which would materially interfere
with the right to sell the related Property at a trustee’s
sale or the right to foreclose the related Mortgage;
(xxxv)
To the best knowledge of the Seller or the Servicer, there is no
default, breach, violation or event of acceleration existing under
any Mortgage or the related Note and no event which, with the
passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach, violation or event
of acceleration; and none of the Servicer, the Seller, the Conduit
Seller nor the Conduit Servicer, as applicable, has waived any
default, breach, violation or event of acceleration or advanced
funds, directly or indirectly, for the payment of any amount
required under any Home Equity Loan;
(xxxvi)
No instrument of release or waiver has been executed in
connection with any Home Equity Loan, and no Mortgagor has been
released, in whole or in part, except in connection with an
assumption agreement which has been approved by the primary
mortgage guaranty insurer, if any, and which has been delivered to
the Trustee;
(xxxvii)
No Mortgagor of a Home Equity Loan is subject to a bankruptcy
proceeding;
(xxxviii)
Each Home Equity Loan was underwritten in accordance with or
reunderwritten to comply with the credit underwriting guidelines of
the Seller as set forth in the Seller’s Policies and
Procedures Manual, as in effect on the date of and such Manual
conforms in all material respects to the description thereof set
forth in the Registration Statement;
(xxxix)
Each Home Equity Loan was originated based upon a full
appraisal, which included an interior inspection of the subject
Property;
(xl)
The Home Equity Loans were not selected for inclusion in the
Trust on any basis intended to adversely affect the Trust;
(xli)
No more than 2.01% and 1.11% of the aggregate Loan Balance of
the Home Equity Loans in Group 1 and Group 2, respectively, as of
the Cut-Off Date, are secured by Properties that are non-owner
occupied Properties (i.e., investor-owned and vacation);
(xlii)
The Seller or the Servicer, as applicable, has no actual
knowledge that there exist any hazardous substances, hazardous
wastes or solid wastes, as such terms are defined in the
Comprehensive Environmental Response Compensation and Liability
Act, the Resource Conservation and Recovery Act of 1976, or other
federal, state or local environmental legislation, on any Property,
and to the best knowledge of the Seller and the Servicer, as
applicable, no violations of any local, state or federal
environmental law, rule or regulation exist with respect to any
Property;
(xliii)
The Seller (and, to the best knowledge of the Seller and the
Servicer, as applicable, the originator, if not the Seller) was
properly licensed or otherwise authorized, to the extent required
by applicable law, to originate or purchase each Home Equity Loan;
and the consummation of the transactions herein contemplated,
including, without limitation, the receipt of interest by the
Owners and the ownership of the Home Equity Loans by the Trustee as
trustee of the Trust will not involve the violation of such
laws;
(xliv)
With respect to each Property subject to a ground lease (i) the
current ground lessor has been identified and all ground rents
which have previously become due and owing have been paid; (ii) the
ground lease term extends, or is automatically renewable, for at
least five years beyond the maturity date of the related Home
Equity Loan; (iii) the ground lease has been duly executed and
recorded; (iv) the amount of the ground rent and any increases
therein are clearly identified in the lease and are for
predetermined amounts at predetermined times; (v) the ground rent
payment is included in the borrower’s monthly payment as an
expense item in determining the qualification of the borrower for
such Home Equity Loan; (vi) the Trust has the right to cure
defaults on the ground lease; and (vii) the terms and conditions of
the leasehold do not prevent the free and absolute marketability of
the Property. As of the Cut-Off Date, none of the Properties
related to the Home Equity Loans were subject to ground leases;
(xlv)
As of the Startup Day, with respect to any Second Mortgage Loan,
none of the Seller, the Servicer, the Conduit Seller nor the
Conduit Servicer, as applicable, has received a notice of default
of any Senior Lien secured by any Property which has not been cured
by a party other than the Seller;
(xlvi)
No Home Equity Loan is subject to a rate reduction pursuant to a
buydown program;
(xlvii)
[Reserved];
(xlviii)
The Coupon Rate on each Home Equity Loan is calculated on the
basis of a year of 360 days with twelve 30-day months;
(xlix)
Each Home Equity Loan was originated by the Seller, an Affiliate
of the Seller or a broker for simultaneous assignment to the Seller
or was acquired by the Seller from correspondent lenders and
reunderwritten to comply with the Seller’s underwriting
standards;
(l)
Neither the operation of any of the terms of each Note and each
Mortgage nor the exercise of any right thereunder will render
either the Note or the Mortgage unenforceable, in whole or in part,
nor subject it to any right of rescission, claim, set-off,
counterclaim or defense, including, without limitation, the defense
of usury;
(li)
Any adjustment to the Coupon Rate on an Adjustable Rate Home
Equity Loan has been legal, proper and in accordance with the terms
of the related Note;
(lii)
No Adjustable Rate Home Equity Loan is subject to negative
amortization;
(liii)
As of the Cut-Off Date, the FTC holder regulation provided in 16
C.F.R. Part 433 applies to none of the Home Equity Loans;
(liv)
[Reserved];
(lv)
[Reserved];
(lvi)
The rights with respect to each Home Equity Loan are assignable
by the Seller or the Conduit Seller, as applicable, without the
consent of any Person other than consents which will have been
obtained on or before the Startup Day;
(lvii)
The Seller or the Conduit Seller, as applicable, has duly
fulfilled all obligations to be fulfilled on the lender’s
part under or in connection with the origination, acquisition and
assignment of the Home Equity Loans and the related Mortgage and
Note, and has done nothing to impair the rights of the Trustee or
the Owners in payments with respect thereto;
(lviii)
To the Seller’s or the Servicer’s, as applicable,
knowledge, the documents, instruments and agreements submitted by
each Mortgagor for loan underwriting were not falsified and contain
no untrue statement of a material fact and do not omit to state a
material fact required to be stated therein or necessary to make
the information and statements contained therein not
misleading;
(lix)
No Home Equity Loan matures later than April 1, 2037;
(lx)
The first date on which the applicable Mortgagor must make a
payment on each Home Equity Loan is no later than April 2007;
(lxi)
With respect to each Home Equity Loan that is a Second Mortgage
Loan:
(1)
The related Senior Lien does not provide for negative
amortization.
(2)
None of the Servicer, the Seller, the Conduit Seller or the
Conduit Servicer as applicable, has received, or is aware of, a
notice of default of any Senior Lien which has not been cured.
(3)
To the best knowledge of the Seller or the Servicer, as
applicable, no funds provided to the Mortgagor from a Second
Mortgage Loan were concurrently used as a down payment for the
Senior Lien; and
(lxii)
To the Seller’s or the Servicer’s, as applicable,
knowledge, no material error, omission, misrepresentation, fraud or
similar occurrence with respect to a Home Equity Loan has
taken place on the part of the Seller or the Servicer, as
applicable, or on the part of any other person, including without
limitation the Mortgagor, any appraiser, or any other party
involved in the origination of the Home Equity Loan or in the
application of any insurance in relation to such Home Equity
Loan.
(b)(2)
The Seller, with respect to the Seller Home Equity Loans, and
the Servicer, in consideration of its appointment hereunder, with
respect to the Conduit Home Equity Loans, and with respect to the
Group 1 Home Equity Loans, hereby represent, warrant and covenant
to the Trustee, the Depositor, the Servicer and the Owners that as
of the Startup Day (or the Replacement Cut-Off Date, with respect
to a Qualified Replacement Mortgage):
(i)
Each Group 1 Home Equity Loan at the time it was made complied
in all material respects with applicable local, state, and federal
laws, including, but not limited to, all applicable predatory,
abusive and fair lending laws;
(ii)
No refinance or purchase money home equity loan in the Group 1
Home Equity Loans that is secured by the borrower’s principal
residence has an annual percentage rate (APR) or total points and
fees that exceed the thresholds set by the Home Ownership and
Equity Protection Act of 1994 and its implementing regulations,
including 12 CFR § 226.32(a)(1)(i) and (ii). This requirement
shall not apply to home equity lines of credit (HELOCs) but shall
apply to other second home equity loans;
(iii)
No Group 1 Home Equity Loan was originated on or after October
1, 2002 and before March 7, 2003, which is secured by property
located in the State of Georgia;
(iv)
No Group 1 Home Equity Loan is a "high cost home," "covered"
(excluding home loans defined as "covered home loans" in the New
Jersey Home Ownership Security Act of 2002 that were originated
between November 26, 2003 and July 7, 2004), "high risk home" or
"predatory" loan under any applicable state, federal or local law
(or similarly classified loan using different terminology under a
law imposing heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high interest
rates, points and/or fees);
(v)
No borrower obtained a prepaid single-premium credit-life,
credit disability, credit unemployment or credit property insurance
policy in connection with the origination of such Group 1 Home
Equity Loan;
(vi)
With respect to each Group 1 Home Equity Loan that contains a
provision permitting imposition of a Prepayment Charge:
(1)
And with respect to Group 1 Home Equity Loans secured by the
borrower’s principal residence, such Group 1 Home Equity Loan
provides some benefit to the borrower (e.g., a rate or fee
reduction) in exchange for accepting such Prepayment Charge;
(2)
Prior to the origination of the Group 1 Home Equity Loan, the
borrower was offered the option of obtaining a home equity loan
that did not require the payment of such a Prepayment Charge;
(3)
And with respect to Group 1 Home Equity Loans secured by the
borrower’s principal residence, the Prepayment Charge was
adequately disclosed to the borrower pursuant to applicable state
and federal law;
(4)
No such Group 1 Home Equity Loan originated on or after October
1, 2002 will provide for Prepayment Charges for a term in excess of
three years and any Group 1 Home Equity Loans originated prior to
such date will not provide for Prepayment Charges for a term in
excess of five years, unless such Group 1 Home Equity Loan was
modified to reduce the prepayment period to no more than three
years or five years, as applicable, from the date of the Note and
the borrower was notified in writing of such reduction in
prepayment period; and
(5)
Such Prepayment Charge shall not be imposed in any instance
where such Group 1 Home Equity Loan is accelerated or paid off in
connection with the workout of a delinquent mortgage or due to the
borrower’s default, notwithstanding that the terms of such
Group 1 Home Equity Loan or state or federal law might permit the
imposition of such penalty;
(vii)
The Servicer has fully furnished accurate and complete
information (i.e., favorable and unfavorable) on its borrower
credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the credit repositories), on a
monthly basis and in accordance with the Fair Credit Reporting Act
and its implementing regulations;
(viii)
The Servicer will fully furnish accurate and complete
information (i.e., favorable and unfavorable) on its borrower
credit files to Equifax, Experian, and Trans Union Credit
Information Company (three of the credit repositories), on a
monthly basis and in accordance with the Fair Credit Reporting Act
and its implementing regulations;
(ix)
The borrower was offered a product priced appropriately for the
highest credit quality grade for which the borrower qualified based
on an assessment of risk factors including credit and collateral
characteristics. If, at the time of application for the Group
1 Home Equity Loan, the borrower may have qualified for a
lower-cost credit product then offered by any mortgage lending
affiliate of Nationstar Mortgage LLC, Nationstar Mortgage LLC
referred the borrower’s application to such affiliate for
underwriting consideration;
(x)
The methodology used in underwriting the extension of credit for
such Group 1 Home Equity Loan did not rely solely on the extent of
the borrower’s equity in the Property as the principal
determining factor in approving such extension of credit. The
methodology employed related objective criteria such as the
borrower’s income, assets, and liabilities to the proposed
mortgage payment and, based on such methodology, the originator of
such Group 1 Home Equity Loan made a reasonable determination that
at the time of origination the borrower had the ability to make
timely payments on such Group 1 Home Equity Loan;
(xi)
No borrower of any such Group 1 Home Equity Loan that is secured
by the borrower’s principal residence was charged points and
fees in an amount greater than (a) $1,000 or (b) 5% of the
principal amount of such Group 1 Home Equity Loan, whichever is
greater. For purposes of this representation, "points and
fees" (x) include origination, underwriting, broker and
finder’s fees and charges that the lender imposed as a
condition of making such Group 1 Home Equity Loan, whether they are
paid to the lender or a third party; and (y) exclude bona
fide discount points, fees paid for actual services rendered in
connection with the origination of such Group 1 Home Equity Loan
(such as attorneys’ fees, notaries fees and fees paid for
property appraisals, credit reports, surveys, title examinations
and extracts, flood and tax certifications, and home inspections);
the cost of mortgage insurance or credit-risk price adjustments;
the costs of title, hazard, and flood insurance policies; state and
local transfer taxes or fees; escrow deposits for the future
payment of taxes and insurance premiums; and other miscellaneous
fees and charges, which miscellaneous fee and charges, in total, do
not exceed 0.25 percent of the amount of such Group 1 Home Equity
Loan;
(xii)
No such Group 1 Home Equity Loan that was originated on or after
October 31, 2004, is subject to mandatory arbitration except when
the terms of the arbitration also contain a waiver provision that
provides that in the event of a sale or transfer of such Group 1
Home Equity Loan or interest in such Group 1 Home Equity Loan to
Freddie Mac, the terms of the arbitration are null and void and
cannot be reinstated. Nationstar Mortgage LLC hereby
covenants that the Seller or Servicer of such Group 1 Home Equity
Loan, as applicable, will notify the borrower in writing within 60
days of the sale or transfer of such Group 1 Home Equity Loan to
Freddie Mac that the terms of the arbitration agreement will not be
invoked by Nationstar Mortgage LLC;
(xiii)
Each such Group 1 Home Equity Loan is exclusively secured by
single-family (1-4 unit) residential housing. None of the
Group 1 Home Equity Loans may be on multifamily, commercial,
industrial, agricultural or undeveloped property, or on any
property located anywhere except the continental United States,
Alaska, Hawaii, Puerto Rico, the Virgin Islands or Guam;
(xiv)
With respect to any Group 1 Home Equity Loan that is on
manufactured housing, upon the origination of each such Group 1
Home Equity Loan, the manufactured housing unit either (1) will be
the principal residence of the borrower or (2) will be classified
as real property under applicable state law;
(xv)
None of the Group 1 Home Equity Loans is on a condominium unit
that is part of a condominium development that operates as, or
holds itself out to be, a condominium hotel ("condotel"),
regardless of whether the unit itself is being used as a condotel
unit; and
(xvi)
(1) No First Mortgage Loan in Group 1 has an original
principal balance that exceeds the applicable Freddie Mac loan
limit set forth in the following table:
|
Number of
Units
|
Maximum Original Loan Amount
of
First Mortgage Loan
|
Maximum Original
Loan
Amount of
Second Mortgage Loan
|
|
|
Continental United States or
Puerto Rico
|
Alaska, Guam, Hawaii
or
Virgin Islands
|
Continental United States or
Puerto Rico
|
Alaska, Guam, Hawaii
or
Virgin Islands
|
|
1
|
$417,000
|
$625,500
|
$208,500
|
$312,750
|
|
2
|
$533,850
|
$800,775
|
$208,500
|
$312,750
|
|
3
|
$645,300
|
$967,950
|
$208,500
|
$312,750
|
|
4
|
$801,950
|
$1,202,925
|
$208,500
|
$312,750
|
(2) With respect to Second Mortgage Loans in Group 1,
(x)
The subordinate lien is on a one- to four-family residence that
is the principal residence of the borrower;
(y)
No such Second Mortgage Loan has an original principal balance
that exceeds one-half of the one-unit limitation for First
Mortgage Loans, i.e., $208,500 (Alaska, Guam, Hawaii or Virgin
Islands: $312,750), without regard to the number of units; and
(z)
The original principal balance of the First Mortgage Loan plus
the original principal balance of such Second Mortgage Loan
relating to the same Property does not exceed the applicable
Freddie Mac loan limit set forth in the table in clause (xvi)(1)
above.
(c)
In the event that any such repurchase pursuant to this Section
results in a prohibited transaction tax as specified in the REMIC
Opinion delivered pursuant to Section 3.04(a), the Trustee shall
immediately notify the Seller in writing thereof and the Seller
will, within 10 days of receiving notice thereof from the Trustee,
deposit the amount due from the Trust with the Trustee for the
payment thereof, including any interest and penalties, in
immediately available funds. In the event that any Qualified
Replacement Mortgage is delivered by the Seller to the Trust
pursuant to Section 3.04 or Section 3.06 hereof, the Seller shall
be obligated to take the actions described in Section 3.04(a) with
respect to such Qualified Replacement Mortgage upon the discovery
by any of the Depositor, the Owners, the Seller, the Conduit
Seller, the Servicer, any Sub-Servicer, the Custodian or the
Trustee that the statements set forth in subsection (b) above are
untrue in any material respect, without regard to any limitation
set forth therein concerning the knowledge of the Seller or the
Servicer as to facts stated therein, on the date such Qualified
Replacement Mortgage is conveyed to the Trust, such that the
interests of the Owners in the related Qualified Replacement
Mortgage are, or may be, materially and adversely affected;
provided, however, that for the purposes of this subsection (c) the
statements in subsection (b) above referring to items "as of the
Cut-Off Date" or "as of the Startup Day" shall be deemed to refer
to such items as of the Replacement Cut-Off Date or as of the date
such Qualified Replacement Mortgage is conveyed to the Trust,
respectively. Notwithstanding the fact that a representation
contained in subsection (b) above may be limited to the
Seller’s or the Servicer’s knowledge, such limitation
shall not relieve Nationstar Mortgage of its substitution or
repurchase obligation under this Section and Section 3.06 hereof.
(d)
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 3.04 shall survive delivery
of the respective Home Equity Loans (including Qualified
Replacement Mortgages) to the Trustee or the Custodian, on behalf
of the Trustee.
(e)
The Trustee shall have no duty to conduct any affirmative
investigation other than as specifically set forth in this
Agreement as to the occurrence of any condition requiring the
repurchase or substitution of any Home Equity Loan pursuant to this
Article III or the eligibility of any Home Equity Loan for the
purpose of this Agreement.
Section
3.05.
Sale Treatment of the Home Equity Loans and Qualified
Replacement Mortgages.
(a)
The transfer by the Seller and the Conduit Seller to the
Depositor and by the Depositor to the Trustee of the Home Equity
Loans set forth on the applicable Schedule of Home Equity Loans is
absolute and is intended by the Owners and all parties hereto to be
treated as a sale by the Seller, the Conduit Seller and the
Depositor for bankruptcy law purposes.
In the event that any such conveyance is deemed to be a loan,
the parties intend that each of the Seller and the Conduit Seller
shall be deemed to have granted to the Depositor and the Depositor
shall be deemed to have granted to the Trustee a security interest
in the Trust Estate, and that this Agreement shall constitute a
security agreement under applicable law.
(b)
In connection with the transfer and assignment of the Home
Equity Loans, Nationstar Mortgage agrees to:
(i)
deliver without recourse to the Custodian, on behalf of the
Trustee, on the Startup Day with respect to each Home Equity Loan
(except that, in the case of any Delayed Delivery Home Equity
Loans, such delivery may take place within twenty (20) days
following the Startup Day), (A) the original Note endorsed in blank
or to the order of the Trustee ("Pay to the order of The Bank of
New York, as Trustee for Nationstar Home Equity Loan Trust 2007-B,
without recourse") and signed by manual signature of the Seller or
the Conduit Seller, as applicable, or, if the original Note has
been lost or destroyed and not replaced, an original lost note
affidavit from the Seller, or the Conduit Seller, as applicable,
stating that the original Note was lost or destroyed, together with
a copy of the related Note, such lost note affidavits not to exceed
5% of the Pool Balance as of the Cut-Off Date; (B) either (1) if
the original title insurance policy is not available, the original
title insurance commitment or a copy thereof certified as a true
copy by the closing agent or Nationstar Mortgage, and when
available, the original title insurance policy or a copy certified
by the issuer of the title insurance policy, (2) if title insurance
is not available in the applicable state, the attorney’s
opinion of title, or (3) for a Home Equity Loan the original
principal balance of which was equal to or less than $40,000, a
title report and indemnity, (C) originals or copies of all
intervening assignments certified as true copies by the closing
agent or Nationstar Mortgage, showing a complete chain of title
from origination to the Seller or the Conduit Seller, if any,
including warehousing assignments, if recorded, (D) originals of
all assumption and modification agreements, if any, (E) either: (1)
the original Mortgage, with evidence of recording thereon (if such
original Mortgage has been returned to the Seller or the Conduit
Seller, as applicable, from the applicable recording office), or a
copy of the Mortgage certified as a true copy by the closing agent
or an Authorized Officer of Nationstar Mortgage, or (2) a copy of
the Mortgage certified by the public recording office in those
instances where the original recorded Mortgage has been lost and
(F) the original assignments of Mortgages (as described in clause
(b)(ii)) in recordable form and acceptable for recording in the
state or other jurisdiction where the Property is located;
(ii)
cause, within 60 days following the Startup Day with respect to
the Home Equity Loans, assignments of the Mortgages from the Seller
or the Conduit Seller, as applicable, to "The Bank of New York, as
Trustee of Nationstar Home Equity Loan Trust 2007-B under the
Pooling and Servicing Agreement dated as of April 1, 2007" to be
submitted for recording in the appropriate jurisdictions; provided,
further, that Nationstar Mortgage shall not be required to record
an assignment of a Mortgage if Nationstar Mortgage furnishes to the
Trustee, on or before the Startup Day, at Nationstar
Mortgage’s expense, an Opinion of Counsel with respect to the
relevant jurisdiction that such recording is not necessary to
perfect the Trustee’s interest in the related Home Equity
Loans (in form and substance reasonably satisfactory to the Trustee
and the Rating Agencies); provided further, however,
notwithstanding the delivery of any legal opinions, each assignment
of Mortgage shall be recorded by the Custodian on behalf of the
Trustee at the expense of Nationstar Mortgage upon the earliest to
occur of: (i) the occurrence of a Servicer Termination Event, (ii)
if the Seller is not the Servicer and with respect to any one
assignment of Mortgage, the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Mortgagor under the related
Mortgage, or (iii) the occurrence of a bankruptcy or insolvency
relating to the Seller or the Conduit Seller, as applicable;
(iii)
deliver the title insurance policy or title searches or reports,
the original Mortgages and such recorded assignments, together with
originals or duly certified copies of any and all prior assignments
(other than unrecorded warehouse assignments), to the Custodian, on
behalf of the Trustee, within 15 days of receipt thereof by
Nationstar Mortgage, but in any event, with respect to any Mortgage
as to which original recording information has been made available
to the Seller or the Conduit Seller, within one year after the
Startup Day; and
(iv)
furnish to the Trustee and the Rating Agencies, at Nationstar
Mortgage’s expense, an Opinion of Counsel with respect to the
sale and perfection of the Home Equity Loans delivered to the
Trust.
In connection with the transfer and assignment set forth in
clause (i) above, the Depositor has delivered or caused to be
delivered to the Custodian, on behalf of the Trustee, (or, in the
case of the Delayed Delivery Home Equity Loans, will deliver or
cause to be delivered to the Custodian, on behalf of the Trustee,
within twenty (20) days following the Startup Day) for the benefit
of the Certificateholders the documents or instruments set forth in
clause (i) above, with respect to each Home Equity Loan.
In instances where the original recorded Mortgage cannot be
delivered by Nationstar Mortgage to the Custodian on behalf of the
Trustee prior to or concurrently with the execution and delivery of
this Agreement due to a delay in connection with recording,
Nationstar Mortgage may in lieu of delivering such original
recorded Mortgage, deliver to the Custodian on behalf of the
Trustee a copy thereof, provided that Nationstar Mortgage certifies
that the original Mortgage has been delivered to a title insurance
company for recordation after receipt of its policy of title
insurance or binder therefor. In all such instances,
Nationstar Mortgage will deliver or cause to be delivered the
original recorded Mortgage to the Custodian on behalf of the
Trustee promptly upon receipt of the original recorded Mortgage but
in no event later than one year after the Startup Day.
Nationstar Mortgage hereby confirms to the Trustee that it has
made the appropriate entries in its general records to indicate
that such Home Equity Loans have been transferred to the Trustee
and constitute part of the Trust Estate in accordance with the
terms of the trust created hereunder.
Notwithstanding anything to the contrary contained in this
Section 3.05, in those instances where the public recording office
retains the original Mortgage, the assignment of a Mortgage or the
intervening assignments of the Mortgage after it has been recorded,
the Depositor and each of the Sellers shall be deemed to have
satisfied their obligations hereunder upon delivery to the
Custodian, on behalf of the Trustee, of a copy of such Mortgage,
such assignment or assignments of Mortgage certified by the public
recording office to be a true copy of the recorded original
thereof.
Notwithstanding anything to the contrary in this Section 3.05,
within twenty days after the Startup Day, the Seller shall either
(i) deliver to the Depositor, or at the Depositor’s
direction, to the Trustee or the Custodian, on behalf of the
Trustee, or other designee of the Depositor the File as required
pursuant to this Section 3.05 for each Delayed Delivery Home Equity
Loan or (ii) (A) substitute a Qualified Replacement Mortgage for
the Delayed Delivery Home Equity Loan or (B) repurchase the Delayed
Delivery Home Equity Loan, which substitution or repurchase shall
be accomplished in the manner and subject to the conditions set
forth in Section 3.06(b); provided, however, that if the Seller
fails to deliver a File for any Delayed Delivery Home Equity Loan
within the twenty-day period provided above, the Seller shall use
its best reasonable efforts to effect a substitution, rather than a
repurchase of, such Delayed Delivery Home Equity Loan and provided
further that the cure period provided for in Section 3.06(b) shall
not apply to the initial delivery of the File for such Delayed
Delivery Home Equity Loan, but rather the Seller shall have five
(5) Business Days to cure such failure to deliver. At the end of
such twenty-day period the Trustee shall send a Delayed Delivery
Certification for the Delayed Delivery Home Equity Loans delivered
during such twenty-day period in accordance with the provisions of
Section 3.06.
Not later than ten days following the end of the 60-day period
referred in clause (b)(ii) above, Nationstar Mortgage shall
deliver to the Custodian on behalf of the Trustee, with a copy to
the Trustee, a list of all Mortgages for which no Mortgage
assignment has yet been submitted for recording by Nationstar
Mortgage, which list shall state the reason why Nationstar Mortgage
has not yet submitted such Mortgage assignments for recording.
With respect to any Mortgage assignment disclosed on such
list as not yet submitted for recording for a reason other than a
lack of original recording information, the Custodian, on behalf of
the Trustee, shall make an immediate demand on Nationstar Mortgage
to prepare such Mortgage assignments. Thereafter, the
Custodian, on behalf of the Trustee, shall cooperate in executing
any documents submitted to the Custodian, on behalf of the Trustee
in connection with this provision. Following the expiration
of the 60-day period referred to in clause (b)(ii) above,
Nationstar Mortgage shall promptly prepare a Mortgage assignment
for any Mortgage for which original recording information is
subsequently received by Nationstar Mortgage, and shall promptly
deliver a copy of such Mortgage assignment to the Custodian, on
behalf of the Trustee. Nationstar Mortgage agrees that it
will follow its normal servicing procedures and attempt to obtain
the original recording information necessary to complete a Mortgage
assignment. In the event that Nationstar Mortgage is unable
to obtain such recording information with respect to any Mortgage
prior to the end of the 18 th calendar month following
the Startup Day and has not provided to the Custodian, on behalf of
the Trustee, a Mortgage assignment with evidence of recording
thereon relating to the assignment of such Mortgage to the Trustee,
the Custodian, on behalf of the Trustee shall notify Nationstar
Mortgage of its obligation to provide a completed assignment (with
evidence of recording thereon) on or before the end of the 20
th calendar month following the Startup Day. If no
such completed assignment (with evidence of recording thereon) is
provided before the end of such 20 th calendar month,
the related Home Equity Loan shall be deemed to have breached the
representation contained in clause (xxii) of Section
3.04(b)(1) hereof. The requirement to deliver a
completed assignment with evidence of recording thereon will be
deemed satisfied upon delivery of a copy of the completed
assignment certified by the applicable public recording office.
Copies of all Mortgage assignments received by the Custodian on
behalf of the Trustee shall be retained in the related File.
All recording required pursuant to this Section 3.05 shall be
accomplished at the expense of Nationstar Mortgage.
(c)
In the case of Home Equity Loans which have been prepaid in full
on or after the Cut-Off Date and prior to the Startup Day,
Nationstar Mortgage, in lieu of the foregoing, will deliver within
six (6) days after the Startup Day to the Trustee a certification
of an Authorized Officer in the form set forth in Exhibit D.
(d)
Nationstar Mortgage shall transfer, assign, set over and
otherwise convey, without recourse, to the Trustee all right, title
and interest of Nationstar Mortgage in and to any Qualified
Replacement Mortgage delivered to the Custodian, on behalf of the
Trustee on behalf of the Trust by Nationstar Mortgage pursuant to
Section 3.04 or 3.06 hereof and all its right, title and interest
to principal and interest due on such Qualified Replacement
Mortgage on and after the applicable Replacement Cut-Off Date;
provided, however, that Nationstar Mortgage shall reserve and
retain all right, title and interest in and to payments of
principal and interest due on such Qualified Replacement Mortgage
prior to the applicable Replacement Cut-Off Date.
(e)
As to each Home Equity Loan released from the Trust in
connection with a repurchase thereof or the conveyance of a
Qualified Replacement Mortgage therefor, the Trustee will transfer,
assign, set over and otherwise convey without recourse or
representation, on Nationstar Mortgage’s order, all of its
right, title and interest in and to such released Home Equity Loan
and all the Trust’s right, title and interest to principal
and interest due on such released Home Equity Loan after the
applicable repurchase date or Replacement Cut-Off Date, as the case
may be; provided, however, that the Trust shall reserve and or and
retain all right, title and interest in and to payments of
principal and interest due on such released Home Equity Loan prior
to such repurchase date or Replacement Cut-Off Date, as the case
may be.
(f)
In connection with any transfer and assignment of a Qualified
Replacement Mortgage to the Trustee on behalf of the Trust,
Nationstar Mortgage agrees to (i) deliver or cause to be delivered
without recourse to the Custodian, on behalf of the Trustee on the
date of delivery of such Qualified Replacement Mortgage the
original Note relating thereto, endorsed in blank or to the order
of the Trustee, (ii) cause promptly to be recorded an assignment in
the appropriate jurisdictions, (iii) deliver or cause to be
delivered the original Qualified Replacement Mortgage and such
recorded assignment, together with original or duly certified
copies of any and all prior assignments, to the Custodian, on
behalf of the Trustee within 15 days of receipt thereof by
Nationstar Mortgage (but in any event within 120 days after the
date of conveyance of such Qualified Replacement Mortgage) and (iv)
deliver the title insurance policy, or where no such policy is
required to be provided under Section 3.05(b)(i)(B), the other
evidence of title required in Section 3.05(b)(i)(B).
(g)
As to each Home Equity Loan released from the Trust in
connection with a repurchase or the conveyance of a Qualified
Replacement Mortgage, the Custodian, on behalf of the Trustee shall
deliver on the date of such repurchase or conveyance of such
Qualified Replacement Mortgage and on the order of Nationstar
Mortgage (i) the original Note relating thereto, endorsed, without
recourse or representation, in blank or to the order of Nationstar
Mortgage, (ii) the original Mortgage so released and all
assignments relating thereto and (iii) such other documents as
constituted the File with respect thereto.
(h)
If a Mortgage assignment is lost during the process of
recording, or is returned from the recorder’s office
unrecorded due to a defect therein, Nationstar Mortgage shall
prepare or cause to be prepared a substitute assignment or cure
such defect, as the case may be, and thereafter cause each such
assignment to be duly recorded.
Section
3.06.
Acceptance by Trustee; Certain Substitutions of Home Equity
Loans; Certification by Trustee.
(a)
The Trustee agrees to execute and deliver and the Trustee agrees
to cause the Custodian to execute and deliver on behalf of the
Trustee on the Startup Day an acknowledgment of receipt of the
items delivered by Nationstar Mortgage in the forms attached as
Exhibits E-1 and E-2 hereto, respectively, and declares through the
Custodian that it will hold such documents and any amendments,
replacements or supplements thereto, as well as any other assets
included in the definition of Trust Estate and delivered to the
Custodian, on behalf of the Trustee, as Trustee in trust upon and
subject to the conditions set forth herein for the benefit of the
Owners. At the end of the twenty (20) day period after the
Startup Day, the Custodian, on behalf of the Trustee, shall execute
and deliver to the Depositor, the Servicer and the Sellers a
Delayed Delivery Certification with respect to the Delayed Delivery
Home Equity Loans in the form attached as Exhibit E-3 hereto, with
any applicable exceptions noted thereon. The Trustee agrees,
for the benefit of the Owners, to cause the Custodian to review the
items delivered by Nationstar Mortgage pursuant to Section
3.05(b)(i) within 45 days after the Startup Day (or, with respect
to any document delivered after the Startup Day, within 45 days of
receipt and with respect to any Qualified Replacement Mortgage,
within 45 days after the assignment thereof) and to deliver to the
Depositor, the Seller, the Conduit Seller, the Servicer and the
Trustee a certification in the form attached hereto as Exhibit F (a
"Pool Certification") to the effect that, as to each Home Equity
Loan listed in the Schedule of Home Equity Loans (other than any
Home Equity Loan paid in full or any Home Equity Loan specifically
identified in such Pool Certification as not covered by such Pool
Certification), (i) all documents required to be delivered to it
pursuant to Section 3.05(b)(i) of this Agreement have been executed
and are in its possession and that the Notes have been endorsed as
set forth in Section 3.05(b)(i) hereof, (ii) such documents have
been reviewed by it and have not been mutilated, damaged or torn
and relate to such Home Equity Loan and (iii) based on its
examination and only as to the foregoing documents, the information
set forth on the Schedule of Home Equity Loans accurately reflects
the information set forth in the File, except as may be indicated
in an exception report in the form attached hereto as Exhibit J
("Exception Report"), such Exception Report to be provided
electronically concurrently with the delivery of the Pool
Certification to the e-mail addresses specified by the recipients.
The Custodian, on behalf of the Trustee, shall have no
responsibility for reviewing any File except as expressly provided
in this subsection 3.06(a). Without limiting the effect of
the preceding sentence, in reviewing any File, the Custodian, on
behalf of the Trustee, shall have no responsibility for determining
whether any document is valid and binding, whether the text of any
assignment is in proper form (except to determine if the Trustee is
the assignee), whether any document has been recorded in accordance
with the requirements of any applicable jurisdiction or whether a
blanket assignment is permitted in any applicable jurisdiction, but
shall only be required to determine whether a document has been
executed, that it appears to be what it purports to be, and, where
applicable, that it purports to be recorded. The Custodian,
on behalf of the Trustee, shall be under no duty or obligation to
inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that
they are other than what they purport to be on their face, nor
shall the Custodian, on behalf of the Trustee, be under any duty to
determine independently whether there are any intervening
assignments or assumption or modification agreements with respect
to any Home Equity Loan.
(b)
If the Custodian, on behalf of the Trustee during such 45-day
period finds any document constituting a part of a File which is
not executed, has not been received, or is unrelated to the Home
Equity Loans identified in the Schedule of Home Equity Loans, or
that any Home Equity Loan does not conform to the description
thereof as set forth in the Schedule of Home Equity Loans, the
Custodian, on behalf of the Trustee shall promptly so notify the
Depositor, Nationstar Mortgage and the Owners. In performing
any such review, the Custodian, on behalf of the Trustee may
conclusively rely on Nationstar Mortgage as to the purported
genuineness of any such document and any signature thereon.
It is understood that the scope of the review of the items
delivered by Nationstar Mortgage pursuant to Section 3.05(b)(i) is
limited solely to confirming that the documents listed in Section
3.05(b)(i) have been executed and received, relate to the Files
identified in the Schedule of Home Equity Loans and conform to the
description thereof in the Schedule of Home Equity Loans.
Nationstar Mortgage agrees to use reasonable efforts to
remedy a material defect in a document constituting part of a File
of which it is so notified by the Custodian, on behalf of the
Trustee. If, however, within 90 days after such notice to it
respecting such defect Nationstar Mortgage has not remedied the
defect and the defect materially and adversely affects the interest
in the related Home Equity Loan of the Owners, Nationstar Mortgage
will (or will cause an Affiliate to) on the next succeeding Monthly
Remittance Date (i) substitute in lieu of such Home Equity Loan a
Qualified Replacement Mortgage and deliver the Substitution Amount
to the Servicer for deposit in the Principal and Interest Account
or (ii) purchase such Home Equity Loan at a purchase price equal to
the Loan Purchase Price thereof, which purchase price shall be
delivered to the Servicer for deposit in the Principal and Interest
Account. In connection with any proposed purchase or
substitution of a Home Equity Loan, Nationstar Mortgage shall cause
at its expense to be delivered to the Trustee an Opinion of Counsel
experienced in federal income tax matters stating whether or not
such a proposed purchase or substitution would constitute a
Prohibited Transaction for the Trust or would jeopardize the status
of any REMIC created hereunder as a REMIC, and Nationstar Mortgage
shall only be required to take either such action to the extent
such action would not constitute a Prohibited Transaction for the
Trust and would not jeopardize the status of such REMIC as a REMIC.
Any required purchase or substitution, if delayed by the
absence of such opinion, shall nonetheless occur upon the earlier
of (i) the occurrence of a default or imminent default with respect
to the Home Equity Loan or (ii) the delivery of such opinion.
(c)
In addition to the foregoing, the Custodian, on behalf of the
Trustee also agrees to make a review during the 12 th
month after the Startup Day indicating the current status of the
exceptions previously indicated on the Exception Report delivered
electronically concurrently with the Pool Certification in the form
attached hereto as Exhibit F (the "Final Certification") and, by
the end of the 12 th month after the Startup Day,
deliver electronically to the Depositor, the Conduit Seller, the
Seller, the Servicer and the Trustee (to the e-mail addresses
specified by the recipients) such Final Certification. After
delivery of the Final Certification, the Custodian, on behalf of
the Trustee and the Servicer shall provide electronically to the
Trustee (to the e-mail address specified by the Trustee) no less
frequently than monthly updated certifications indicating the then
current status of exceptions, until all such exceptions have been
eliminated.
Section
3.07.
High-Cost Home Loans.
It is agreed and understood by the Depositor and the Trustee
hereto that it is not intended that any Home Equity Loan be
included in the Trust that is (i) a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27,
2003, (ii) a "High-Cost Home Loan" as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004, (iii) a "High
Cost Home Mortgage Loan" as defined in the Massachusetts Regulatory
Home Loan Practices Act effective November 7, 2004 or (iv) a
"High-Cost Home Loan" as defined by the Indiana High Cost Home Loan
Law effective January 1, 2005.
Section
3.08.
Custodian.
Notwithstanding anything to the contrary in this Agreement, the
parties hereto acknowledge that the functions of the Trustee with
respect to the custody, acceptance, inspection and release of the
Files pursuant to Sections 3.05, 3.06, and 8.14 and the related
Pool Certification and Final Certification shall be performed by
the Custodian on the Trustee’s behalf pursuant to the
Custodial Agreement; provided, however, the Trustee shall remain
primarily liable for such obligations. The fees and expenses
of the Custodian will be paid by the Servicer.
If, pursuant to Section 4.12 of the Custodial Agreement, the
Custodian shall request written instructions from the Trustee, the
Trustee hereby agrees to promptly provide such instructions.
Section
3.09.
Cooperation Procedures.
(a)
The Seller, the Conduit Seller, the Depositor, the Servicer and
the Trustee covenant to provide each other with all data and
information required to be provided by them hereunder at the times
required hereunder, and additionally covenant reasonably to
cooperate with each other in providing any additional information
required to be obtained by any of them in connection with their
respective duties hereunder. Nationstar Mortgage shall, in
connection with the delivery of each Qualified Replacement Mortgage
to the Custodian, on behalf of the Trustee, provide the Trustee
with information set forth in the Schedule of Home Equity Loans
with respect to such Qualified Replacement Mortgage.
(b)
The Servicer shall maintain such accurate and complete accounts,
records and computer systems pertaining to each File as shall
enable it and the Trustee to comply with this Agreement. In
performing its recordkeeping duties the Servicer shall act in
accordance with the servicing standards set forth in this
Agreement. The Servicer shall conduct, or cause to be
conducted, periodic audits of its accounts, records and computer
systems as set forth in Sections 8.16 hereof. The Servicer
shall promptly report in writing to the Trustee any failure on its
part to maintain its accounts, records and computer systems herein
provided and promptly take appropriate action to remedy any such
failure.
(c)
Nationstar Mortgage further confirms to the Trustee that it has
caused the portions of the electronic ledger relating to the Home
Equity Loans to be clearly and unambiguously marked to indicate
that such Home Equity Loans have been sold, transferred, assigned
and conveyed through the Depositor to the Trustee and constitute
part of the Trust Estate in accordance with the terms of the trust
created hereunder.
Section
3.10.
Payment of Taxes, Insurance and Other Charges.
With respect to each Home Equity Loan, the Servicer shall
maintain accurate records reflecting fire and hazard insurance
coverage.
With respect to each Home Equity Loan as to which the Servicer
maintains escrow accounts, the Servicer shall maintain accurate
records reflecting the status of property taxes which are or may
become a lien upon the Property and the status of fire and hazard
insurance coverage and shall obtain, from time to time, all bills
for the payment of such charges (including renewal premiums) and
shall effect payment thereof prior to the applicable penalty or
termination date and at a time appropriate for securing maximum
discounts allowable, employing for such purpose deposits of the
Mortgagor in any escrow account which shall have been estimated and
accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. To the
extent that a Mortgage does not provide for escrow payments, the
Servicer shall, if it has received notice of a default or
deficiency, monitor such payments to determine if they are made by
the Mortgagor, and for this purpose the Servicer shall maintain a
third-party (which may be an Affiliate of the Servicer) tax
monitoring service.
END OF ARTICLE III
ARTICLE
IV
ISSUANCE AND SALE OF
CERTIFICATES
Section
4.01.
Issuance of Certificates.
On the Startup Day, upon the Trustee’s receipt from the
Depositor of an executed Delivery Order in the form set forth as
Exhibit G hereto, the Trustee shall authenticate and deliver the
Certificates on behalf of the Trust.
Section
4.02.
Sale of Certificates.
At 11:00 a.m. New York City time on the Startup Day, at the
offices of McKee Nelson LLP, One Battery Park Plaza, 34
th Floor, New York, New York 10004 (or at such other
location acceptable to the Seller), the Seller and the Conduit
Seller will sell and convey the Home Equity Loans and the money,
instruments and other property related thereto to the Depositor and
the Depositor will convey the Home Equity Loans and the money,
instruments and other property related thereto to the Trustee and
the Trustee will deliver (i) to the Underwriters (as designee of
the Depositor), the Offered Certificates (other than the Class M-8
and Class M-9 Certificates) with an aggregate Percentage Interest
in each Class equal to 100% registered in the name of Cede &
Co. or in such other names as the Underwriters shall direct,
against payment to the Depositor of the purchase price thereof by
wire transfer of immediately available funds to the Trustee as
designee of the Depositor and (ii) to the respective registered
owners thereof (as designees of the Depositor and the Seller), the
Class M-8 Certificates registered in the name of Cede & Co.,
the Class M-9 Certificates registered in the name of Cede &
Co., the Class R Certificates registered in the name of Nationstar
Residual LLC, the Class X-IO Certificates, registered in the name
of Nationstar Residual LLC, a Delaware limited liability company,
and the Class P Certificates, registered in the name of Nationstar
Residual LLC, a Delaware limited liability company (all such events
shall be referred to herein as the "Closing").
END OF ARTICLE IV
ARTICLE
V
CERTIFICATES AND
TRANSFER OF INTERESTS
Section
5.01.
Terms.
(a)
The Certificates are pass-through securities having the rights
described therein and herein. Notwithstanding references
herein or therein with respect to the Certificates as to
"principal" and "interest" thereof, no debt of any Person is
represented thereby, nor are the Certificates or the underlying
Notes guaranteed by any Person (except that the Notes may be
recourse to the Mortgagors thereof to the extent permitted by law
and the terms of the related Note). The Offered Certificates
are payable solely from payments received on or with respect to the
Home Equity Loans (net of the Servicing Fees and Trustee Fees),
from moneys in the Principal and Interest Account, except as
otherwise provided herein and from earnings on moneys and the
proceeds of property held as a part of the Trust Estate. Each
Certificate entitles the Owner thereof to receive monthly on each
Distribution Date, in order of priority of distributions with
respect to such Class of Certificates as set forth in Section 7.03,
a specified portion of such payments with respect to the Home
Equity Loans.
(b)
Each Owner is required, and hereby agrees, to return to the
Trustee, any Certificate prior to the Trustee making the final
distribution due thereon. Any such Certificate as to which
the Trustee has made the final distribution thereon shall be deemed
canceled and shall no longer be Outstanding for any purpose of this
Agreement.
Section
5.02.
Forms.
The Class 1-AV-1 Certificates, the Class 2-AV-1 Certificates,
the Class 2-AV-2 Certificates, the Class 2-AV-3 Certificates, the
Class 2-AV-4 Certificates, the Class M-1 Certificates, the Class
M-2 Certificates, the Class M-3 Certificates, the Class M-4
Certificates, the Class M-5 Certificates, the Class
M-6 Certificates, the Class M-7 Certificates, the Class M-8
Certificates, the Class M-9 Certificates, the Class
X-IO Certificates, the Class P Certificates and the Class R
Certificates shall be in substantially the forms set forth in
Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, A-9, A-10, A-11,
A-12, A-13, A-14, B-1, B-2 and C hereof, respectively.
Section
5.03.
Execution, Authentication and Delivery.
Each Certificate shall be executed on behalf of the Trust, by
the manual signature of one of the Trustee’s Authorized
Officers at the written direction of the Depositor. In
addition, each Certificate shall be authenticated by the manual
signature of one of the Trustee’s Authorized Officers at the
written direction of the Depositor.
Certificates bearing the manual signature of individuals who
were at any time the proper officers of the Trustee shall, upon
proper authentication by the Trustee, bind the Trust,
notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the execution and delivery of such
Certificates or did not hold such offices at the date of
authentication of such Certificates.
The initial Certificates shall be dated as of the Startup Day
and delivered at the Closing to the parties specified in Section
4.02 hereof. Subsequently issued Certificates will be dated
as of the issuance of the Certificate.
No Certificate shall be valid until executed and authenticated
as set forth above.
Section
5.04.
Registration and Transfer of Certificates.
(a)
The Trustee shall cause to be kept a register (the "Register")
in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of
Certificates and the registration of transfer of Certificates.
The Trustee is hereby initially appointed Registrar for the
purpose of registering Certificates and transfers of Certificates
as herein provided. The Depositor, the Owners and the Trustee
shall have the right to inspect the Register upon reasonable notice
during the Trustee’s normal hours and to obtain copies
thereof, and the Trustee shall have the right to rely upon a
certificate executed on behalf of the Registrar by an Authorized
Officer thereof as to the names and addresses of the Owners of the
Certificates and the principal amounts and numbers of such
Certificates.
If a Person other than the Trustee is appointed as Registrar by
the Owners of a majority of the aggregate Voting Rights represented
by the Certificates then Outstanding, such Owners shall give the
Trustee and the Owners prompt written notice of the appointment of
such Registrar and of the location, and any change in the location,
of the Register. In connection with any such appointment the
reasonable fees of the Registrar shall be paid, as expenses of the
Trust, pursuant to Section 7.06 hereof.
(b)
Subject to the provisions of Section 5.08 hereof, upon surrender
for registration of transfer of any Certificate at the office
designated as the location of the Register, upon the direction of
the Registrar, the Trustee shall execute, authenticate and deliver,
in the name of the designated transferee or transferees, one or
more new Certificates of a like Class and in the aggregate
outstanding principal amount or Percentage Interest of the
Certificate so surrendered.
(c)
At the option of any Owner, Certificates of any Class owned by
such Owner may be exchanged for other Certificates authorized of
like Class and tenor and a like aggregate outstanding principal
amount or Percentage Interest and bearing numbers not
contemporaneously outstanding, upon surrender of the Certificates
to be exchanged at the office designated as the location of the
Register. Whenever any Certificate is so surrendered for
exchange, upon the direction of the Registrar, the Trustee shall
execute, authenticate and deliver the Certificate or Certificates
which the Owner making the exchange is entitled to receive.
(d)
All Certificates issued upon any registration of transfer or
exchange of Certificates shall be valid evidence of the same
ownership interests in the Trust and entitled to the same benefits
under this Agreement as the Certificates surrendered upon such
registration of transfer or exchange.
(e)
Every Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the
Registrar duly executed by the Owner thereof or his attorney duly
authorized in writing.
(f)
No service charge shall be made to an Owner for any registration
of transfer or exchange of Certificates, but the Registrar or
Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with
any registration of transfer or exchange of Certificates; any other
expenses in connection with such transfer or exchange shall be an
expense of the Trust.
(g)
It is intended that the Offered Certificates be registered so as
to participate in a global book-entry system with the Depository,
as set forth herein. Each Class of Offered Certificates
shall, except as otherwise provided in Subsection (h), be initially
issued in the form of a single fully registered Offered Certificate
of such Class. Upon initial issuance, the ownership of each
such Offered Certificate shall be registered in the Register in the
name of Cede & Co., or any successor thereto, as nominee for
the Depository.
On the Startup Day, the Offered Certificates shall be issued in
denominations of $25,000 and integral multiples of $1,000 in excess
thereof.
The Depositor and the Trustee are hereby authorized to execute
and deliver the Representation Letter with the Depository in the
form provided to the Trustee by the Depositor.
With respect to the Offered Certificates registered in the
Register in the name of Cede & Co., as nominee of the
Depository, the Depositor, the Servicer, the Sellers and the
Trustee shall have no responsibility or obligation to Direct or
Indirect Participants or beneficial owners for which the Depository
holds Offered Certificates from time to time as a Depository.
Without limiting the immediately preceding sentence, the
Depositor, the Servicer, the Sellers and the Trustee shall have no
responsibility or obligation with respect to (i) the accuracy of
the records of the Depository, Cede & Co., or any Direct or
Indirect Participant with respect to the ownership interest in the
Offered Certificates, (ii) the delivery to any Direct or Indirect
Participant or any other Person, other than a registered Owner of
an Offered Certificate as shown in the Register, of any notice with
respect to the Offered Certificates or (iii) the payment to any
Direct or Indirect Participant or any other Person, other than a
registered Owner of an Offered Certificate as shown in the
Register, of any amount with respect to any distribution of
principal or interest on the Offered Certificates. No Person
other than a registered Owner of an Offered Certificate as shown in
the Register shall receive a certificate evidencing such Offered
Certificate.
Upon delivery by the Depository to the Trustee of written notice
to the effect that the Depository has determined to substitute a
new nominee in place of Cede & Co., and subject to the
provisions hereof with respect to the payment of interest by the
mailing of checks or drafts to the registered Owners of Offered
Certificates appearing as registered Owners in the registration
books maintained by the Trustee at the close of business on a
Record Date, the name "Cede & Co." in this Agreement shall
refer to such new nominee of the Depository.
(h)
In the event that (i) the Depository or the Depositor advises
the Trustee in writing that the Depository is no longer willing or
able to discharge properly its responsibilities as nominee and
depository with respect to the Offered Certificates and either of
Nationstar Mortgage or the Trustee is unable to locate a qualified
successor or (ii) the Depositor at its sole option elects to
terminate the book-entry system through the Depository or (iii)
after the occurrence of a Servicer Termination Event, the
beneficial owners of each Class of Offered Certificates
representing Percentage Interests aggregating not less than 51% of
such Class advises the Trustee and Depository through the Direct or
Indirect Participants in writing that the continuation of a
book-entry system through the Depository to the exclusion of
definitive, fully registered certificates (the "Definitive
Certificates") to Owners is no longer in the best interests of the
Owners, the Offered Certificates shall no longer be restricted to
being registered in the Register in the name of Cede & Co. (or
a successor nominee) as nominee of the Depository. In the
case of (i) and (ii) above, Nationstar Mortgage may determine that
the Offered Certificates shall be registered in the name of and
deposited with a successor depository operating a global book-entry
system, as may be acceptable to Nationstar Mortgage and at the
expense of Nationstar Mortgage, or such depository’s agent or
designee but, if Nationstar Mortgage does not select such
alternative global book-entry system and in the case of (iii)
above, the Offered Certificates may be registered in whatever name
or names registered Owners of Offered Certificates transferring
Offered Certificates shall designate, in accordance with the
provisions hereof.
(i)
Notwithstanding any other provision of this Agreement to the
contrary, so long as any Offered Certificate is registered in the
name of Cede & Co., as nominee of the Depository, all
distributions of principal or interest on such Offered Certificates
and all notices with respect to such Offered Certificates shall be
made and given, respectively, in the manner provided in the
Representation Letter.
Section
5.05.
Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee,
or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (ii) in the case
of any mutilated Certificate, such mutilated Certificate shall
first be surrendered to the Trustee, and in the case of any
destroyed, lost or stolen Certificate, there shall be first
delivered to the Trustee such security or indemnity as may be
reasonably required by it to hold the Trustee harmless (provided,
that with respect to an Owner which is an institutional investor, a
letter of indemnity furnished by it shall be sufficient for this
purpose), then, in the absence of written notice to the Trustee or
the Registrar that such Certificate has been acquired by a bona
fide purchaser, the Trustee shall execute on behalf of the Trust
and the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and aggregate
principal amount, bearing a number not contemporaneously
outstanding.
Upon the issuance of any new Certificate under this Section, the
Registrar or Trustee may require the payment from the transferor or
transferee of the related Certificate of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
relation thereto; any other expenses in connection with such
issuance shall be an expense of the Trust.
Every new Certificate issued pursuant to this Section in
exchange for or in lieu of any mutilated, destroyed, lost or stolen
Certificate shall constitute evidence of a substitute interest in
the Trust, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other
Certificates of the same Class duly issued hereunder and such
mutilated, destroyed, lost or stolen Certificate shall not be valid
for any purpose.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or
stolen Certificates.
Section
5.06.
Persons Deemed Owners.
Prior to due presentment for registration of transfer of any
Certificate, the Trustee and any agent of the Trustee may treat the
Person in whose name any Certificate is registered as the Owner of
such Certificate for the purpose of receiving distributions with
respect to such Certificate and for all other purposes whatsoever,
and neither the Trustee nor any agent of the Trustee shall be
affected by notice to the contrary.
Section
5.07.
Cancellation.
All Certificates surrendered for registration of transfer or
exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled
by it. No Certificate shall be authenticated in lieu of or in
exchange for any Certificate canceled as provided in this Section,
except as expressly permitted by this Agreement. All canceled
Certificates may be held by the Trustee in accordance with its
standard retention policy in effect from time to time.
Section
5.08.
Limitation on Transfer of Ownership Rights.
(a)
No sale or other transfer of record or beneficial ownership of a
Class R Certificate (whether pursuant to a purchase, a transfer
resulting from a default under a secured lending agreement or
otherwise) shall be made to a Disqualified Organization or an agent
of a Disqualified Organization. The transfer, sale or other
disposition of a Class R Certificate (whether pursuant to a
purchase, a transfer resulting from a default under a secured
lending agreement or otherwise) to a Disqualified Organization
shall be deemed to be of no legal force or effect whatsoever and
such transferee shall not be deemed to be an Owner for any purpose
hereunder, including, but not limited to, the receipt of
distributions on such Class R Certificate. Furthermore, in no
event shall the Trustee accept surrender for transfer, registration
of transfer, or register the transfer, of any Class R Certificate
nor authenticate and make available any new Class R Certificate
unless the Trustee has received an affidavit from the proposed
transferee in the form attached hereto as Exhibit H. Each
holder of a Class R Certificate by his acceptance thereof, shall be
deemed for all purposes to have consented to the provisions of this
Section 5.08(a).
(b)
No other sale or other transfer of record or beneficial
ownership of a Class X-IO, Class P or Class R Certificate shall be
made unless such transfer is exempt from the registration
requirements of the Securities Act, and any applicable state
securities laws or is made in accordance with said Securities Act
and laws. In the event of any such transfer: (i) in the case
of transfers for which an investment letter in the form of Exhibit
I-1 or I-2 is not provided by the transferee to the Trustee,
the Trustee or the Depositor shall require a written Opinion of
Counsel acceptable to and in form and substance satisfactory to the
Depositor and the Trustee to the effect that such transfer may be
made pursuant to an exemption, describing the applicable exemption
and the basis therefor, from said Securities Act or is being made
pursuant to said Securities Act, which Opinion of Counsel shall not
be an expense of the Depositor, the Trustee or the Trust Estate;
and (ii) in the case of transfers for which an investment letter in
the form of Exhibit I-1 or I-2 is provided, the investment letter
shall not be an expense of the Depositor, the Trustee or the Trust
Estate. The Owner of a Class X-IO, Class P or Class R
Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Depositor and the Sellers
against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state
laws.
(c)
(i)
No transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received from the transferee of such
ERISA-Restricted Certificate, in form and substance satisfactory to
the Trustee, either: (i) a representation letter (which may be
combined with the investment letter, in the form of Exhibit I-1 or
I-2, required by subsection (b) above), to the effect that
such transferee is not an employee benefit plan or other retirement
arrangement subject to Section 406 of ERISA or to Section 4975 of
the Code (collectively, a "Plan"), nor is acting for, on behalf or
with the assets of, any Plan to effect such transfer; (ii) and in
the case of a Class M-8 or Class M-9 Certificate, such certificate
has been the subject of an ERISA-Qualifying Underwriting,
(iii) if an ERISA-Restricted Certificate has been the subject
of an ERISA-Qualifying Underwriting (other than the Class M-8,
Class M-9 or Class R Certificates), a representation letter
that it is an insurance company that is purchasing the Certificate
with funds contained in an "insurance company general account" as
defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60 and the purchase and holding of the Certificate are
covered under Sections I and III of PTCE 95-60; or (iv) an
Opinion of Counsel, which shall not be at the expense of either the
Depositor, the Servicer, the Trustee or the Trust Estate, to the
effect that the purchase or holding of the ERISA-Restricted
Certificate will not result in any non-exempt prohibited
transaction under Section 406 of ERISA and/or Section 4975 of the
Code, and will not subject any of the above parties to any
obligation or liability in addition to those expressly undertaken
under this Agreement. Notwithstanding anything else to the
contrary herein, the representations required above with respect to
any Certificate that is in book-entry form shall be deemed to have
been made by the Owner of such Certificate by virtue of such
acquisition; any purported transfer of a Certificate to or on
behalf of any Plan without the delivery to the Trustee of an
Opinion of Counsel as described above shall be null and void and of
no effect.
(ii)
No transfer of an ERISA-Restricted Swap Certificate prior to the
termination of the Interest Rate Swap Agreement shall be made
unless the Trustee shall have received a representation letter from
the transferee of such Certificate, substantially in the form set
forth in Exhibits I-1 or I-2 to the effect that either (X) such
transferee is not a Plan nor is acting for, on behalf of, or with
the assets of any such Plan to effect such transfer or (Y) the
acquisition and holding of the ERISA-Restricted Swap Certificate
are eligible for exemptive relief under the statutory exemption for
nonfiduciary service providers under Section 408(b)(17) of ERISA
and Section 4975(d)(20) of the Code, Prohibited Transaction Class
Exemption ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or PTCE
96-23 or some other applicable exemption. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Swap Certificate on behalf of a Plan without the
delivery to the Trustee of a representation letter as described
above shall be void and of no effect. If the ERISA-Restricted
Swap Certificate is a Book-Entry Certificate, the transferee will
be deemed to have made a representation as provided in clause (X)
or (Y) of this paragraph, as applicable. If any
ERISA-Restricted Swap Certificate, or any interest therein, is
acquired or held in violation of the provisions of the preceding
paragraph, the next preceding permitted beneficial owner will be
treated as the beneficial owner of that Certificate, retroactive to
the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of an
ERISA-Restricted Swap Certificate, or interest therein, was
effected in violation of the provisions of the preceding paragraph
shall indemnify to the extent permitted by law and hold harmless
the Trustee, the Depositor, the Servicer or the Sellers from and
against any and all liabilities, claims, costs or expenses incurred
by such parties as a result of such acquisition or holding.
To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to
any Person for any registration of transfer of any ERISA-Restricted
Swap Certificate that is in fact not permitted by this Section
5.08(c)(ii) or for making any payments due on such Certificate to
the Owner thereof or taking any other action with respect to such
Owner under the provisions of this Agreement so long as the
transfer was registered by the Trustee in accordance with the
foregoing requirements.
(d)
[Reserved].
(e)
No sale or other transfer of any Class X-IO Certificates, Class
P Certificates or Class R Certificate may be made to the Depositor,
to any Person that was, at any time, an owner of a Home Equity
Loan, or to any Seller except in connection with (1) with respect
to the Depositor, the initial issuance of such Certificates by the
Trust to the Depositor and, with respect to Nationstar Mortgage and
the Conduit Seller, the payment in partial consideration for the
Home Equity Loans sold by the applicable Seller or in payment of
any deferred purchase price under the Conduit Warehousing Facility
by the Conduit Seller to Nationstar Mortgage on the Startup Day and
(2) the contemporaneous transfer of such Certificates to Nationstar
Residual LLC, a Delaware limited liability company, the Depositor
or any trust or corporation formed and wholly owned by the
Depositor or one if its affiliates.
(f)
Notwithstanding anything to the contrary contained in this
Section 5.08, the Class R Certificates, Class P Certificates and
Class X-IO Certificates may be transferred to Nationstar Residual
LLC, a Delaware limited liability company and wholly-owned
subsidiary of the Seller, the Depositor, any other Affiliate or
subsidiary of the Seller or the Depositor, or any trust formed and
wholly owned by the Depositor without regard to Sections 5.08(b),
(c) or (e) above.
Section
5.09.
Assignment of Rights.
Other than with respect to any Class R Certificates (unless the
Trustee shall have received a satisfactory Opinion of Counsel to
the effect that such action with respect to a Class R Certificate
will not have an adverse effect on the status of any REMIC created
hereunder as a "REMIC") an Owner may pledge, encumber, hypothecate
or assign all or any part of its right to receive distributions
hereunder, but such pledge, encumbrance, hypothecation or
assignment shall not constitute a transfer of an ownership interest
sufficient to render the transferee an Owner of the Trust without
compliance with the provisions of Section 5.04 and Section
5.08 hereof.
END OF ARTICLE V
ARTICLE
VI
COVENANTS
Section
6.01.
Distributions.
On each Distribution Date, the Trustee will withdraw amounts
from the Certificate Account, the Net WAC Cap Carryover Reserve
Fund and the Swap Account and make the distributions with respect
to the Certificates in accordance with the terms of the
Certificates and this Agreement. Such distributions shall be
made (i) in the case of the Offered Certificates registered in the
name of the Depository, by wire transfer to the Depository or (ii)
in each other case, by check or draft mailed on each Distribution
Date or, if requested by any Owner (other than the Depository) of
(A) an Offered Certificate having an original principal balance of
not less than $1,000,000 or (B) a Class X-IO, Class P or Class R
Certificate having a Percentage Interest of not less than 10% in
writing not later than one Business Day prior to the applicable
Record Date (which request does not have to be repeated unless it
has been withdrawn), to such Owner by wire transfer to an account
within the United States designated no later than five Business
Days prior to the related Record Date, in each case to each Owner
of record on the immediately preceding Record Date.
Section
6.02.
Money for Distributions to be Held in Trust; Withholding.
(a)
All payments of amounts due and payable with respect to any
Certificate that are to be made from amounts withdrawn from the
Certificate Account, the Net WAC Cap Carryover Reserve Fund or the
Swap Account shall be made by and on behalf of the Trustee or by a
Paying Agent, and no amounts so withdrawn from the Certificate
Account, the Net WAC Cap Carryover Reserve Fund or the Swap Account
for payments of Certificates shall be paid over to the Trustee
except as provided in this Section.
(b)
If Nationstar Mortgage has appointed a Paying Agent pursuant to
Section 11.15 hereof, the Trustee will, on the Business Day
immediately preceding each Distribution Date, deposit with such
Paying Agent in immediately available funds an aggregate sum
sufficient to pay the amounts then becoming due on the Certificates
(to the extent funds are then available for such purpose in the
Certificate Account for the Class to which such amounts are due)
such sum to be held in trust for the benefit of the Owners entitled
thereto.
(c)
Nationstar Mortgage may at any time direct any Paying Agent to
pay to the Trustee all sums held in trust by such Paying Agent,
such sums to be held by the Trustee upon the same trusts as those
upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall
be released from all further liability with respect to such
money.
(d)
Nationstar Mortgage shall require the Paying Agent, including
the Trustee on behalf of the Trust, to comply with all requirements
of the Code and applicable state and local law with respect to the
withholding from any distributions made by it to any Owner of any
applicable withholding taxes imposed thereon and with respect to
any applicable reporting requirements in connection therewith, and
the Trustee and Paying Agent agree to comply with such
requirements.
(e)
Any money held by the Trustee or a Paying Agent in trust for the
payment of any amount due with respect to any Offered Certificate
remaining unclaimed by the Owner of such Certificate for the period
then specified in the escheat laws of the State of New York after
such amount has become due and payable shall be discharged from
such trust and be paid, upon delivery to the Trustee of an Opinion
of Counsel that such payment is permitted by applicable law, to the
Depositor; and the Owner of such Offered Certificate shall
thereafter, as an unsecured general creditor, look only to the
Depositor for payment thereof (but only to the extent of the
amounts so paid to the Depositor) and all liability of the Trustee
or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Trustee or such Paying
Agent before being required to make any such payment, may at the
expense of the Trust cause to be published once, in the eastern
edition of The Wall Street Journal, notice that such money remains
unclaimed and that, after a date specified therein, which shall be
not fewer than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be paid to the
Depositor. The Trustee shall, at the written direction of
Nationstar Mortgage, also adopt and employ, at the expense of
Nationstar Mortgage, any other reasonable means of notification of
such payment (including but not limited to mailing notice of such
payment to Owners whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the
Registrar, the Trustee or any Paying Agent, at the last address of
record for each such Owner).
Section
6.03.
Protection of Trust Estate.
(a)
The Trustee will hold the Trust Estate in trust for the benefit
of the Owners and at the request of the Depositor, will from time
to time execute and deliver all such supplements and amendments
hereto pursuant to Section 11.14 hereof and all instruments of
further assurance and other instruments, and will take such other
action upon such request from the Depositor, to:
(i)
more effectively hold in trust all or any portion of the Trust
Estate;
(ii)
perfect, publish notice of, or protect the validity of any grant
made or to be made by this Agreement;
(iii)
enforce any of the Home Equity Loans; or
(iv)
preserve and defend title to the Trust Estate and the rights of
the Trustee, and the ownership interests of the Owners represented
thereby, in such Trust Estate against the claims of all Persons and
parties.
To the extent not covered by the indemnity or other security
contemplated by 10.01(e) and 10.01(g), the Trustee shall be
reimbursed for any costs or expenses associated with this section
pursuant to Section 7.03(b) clause C.19.
(b)
The Trustee shall have the power to enforce, and shall enforce
the obligations and rights of the other parties to this Agreement,
and of the Owners, by action, suit or proceeding at law or equity,
and shall also have the power to enjoin, by action or suit in
equity, any acts or occurrences which may be unlawful or in
violation of the rights of the Owners as such rights are set forth
in this Agreement; provided, however, that nothing in this Section
shall require any action by the Trustee unless the Trustee shall
first (i) have been furnished indemnity satisfactory to it and (ii)
when required by this Agreement, have been requested by the Owners
of a majority of the Voting Rights represented by the Certificates
then Outstanding.
(c)
The Trustee shall execute any instrument required pursuant to
this Section so long as such instrument does not conflict with this
Agreement or with the Trustee’s fiduciary duties, or
adversely affect its rights, indemnities and immunities
hereunder.
Section
6.04.
Performance of Obligations.
The Trustee will not take any action that would release any
Person from any of such Person’s covenants or obligations
under any instrument or document relating to the Certificates or
which would result in the amendment, hypothecation, subordination,
termination or discharge of, or impair the validity or
effectiveness of, any such instrument or document, except as
expressly provided in this Agreement or such other instrument or
document.
The Trustee may contract with other Persons to assist it in
performing its duties hereunder pursuant to Section 10.03(g);
provided, that the Trustee shall remain liable for the performance
of any such duties notwithstanding any such contractual
arrangement.
Section
6.05.
Negative Covenants.
The Trustee will not:
(i)
sell, transfer, exchange or otherwise dispose of any of the
Trust Estate except as expressly permitted by this Agreement;
(ii)
claim any credit on or make any deduction from the distributions
payable in respect of, the Certificates (other than amounts
properly withheld from such payments under the Code) or assert any
claim against any present or former Owner by reason of the payment
of any taxes levied or assessed upon any of the Trust Estate;
(iii)
incur, assume or guaranty, on behalf of the Trust, any
indebtedness of any Person except pursuant to this Agreement;
(iv)
dissolve or liquidate the Trust in whole or in part, except
pursuant to Article IX hereof; or (A) permit the validity or
effectiveness of this Agreement to be impaired, or permit any
Person to be released from any covenant or obligation with respect
to the Trust or to the Certificates under this Agreement, except as
may be expressly permitted hereby or (B) permit any lien, charge,
adverse claim, security interest, mortgage or other encumbrance to
be created on or extend to or otherwise arise upon or burden the
Trust Estate or any part thereof or any interest therein or the
proceeds thereof.
Section
6.06.
No Other Powers.
The Trustee will not permit the Trust to engage in any business
activity or transaction other than those activities permitted by
Section 2.03 hereof.
Section
6.07.
Limitation of Suits.
No Owner shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Agreement, or for the
appointment of a receiver or trustee of the Trust, or for any other
remedy with respect to an event of default hereunder, unless:
(1)
such Owner has previously given written notice to the Seller and
the Trustee of such Owner’s intention to institute such
proceeding;
(2)
the Owners of not less than 51% of the Voting Rights represented
by the Certificates then Outstanding shall have made written
request to the Trustee to institute such proceeding in its own name
as Trustee establishing the Trust;
(3)
such Owner or Owners have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4)
the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such
proceeding; and
(5)
no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Owners of a
majority of the Voting Rights represented by the Certificates then
Outstanding;
IT BEING UNDERSTOOD AND
INTENDED THAT NO ONE OR MORE OWNERS SHALL HAVE ANY RIGHT IN ANY
MANNER WHATEVER BY VIRTUE OF, OR BY AVAILING THEMSELVES OF, ANY
PROVISION OF THIS AGREEMENT TO AFFECT, DISTURB OR PREJUDICE THE
RIGHTS OF ANY OTHER OWNER OF THE SAME CLASS OR TO OBTAIN OR TO SEEK
TO OBTAIN PRIORITY OR PREFERENCE OVER ANY OTHER OWNER OF THE SAME
CLASS OR TO ENFORCE ANY RIGHT UNDER THIS AGREEMENT, EXCEPT IN THE
MANNER HEREIN PROVIDED AND FOR THE EQUAL AND RATABLE BENEFIT OF ALL
THE OWNERS OF THE SAME CLASS.
Section
6.08.
Unconditional Rights of Owners to Receive Distributions.
Notwithstanding any other provision in this Agreement, the Owner
of any Certificate shall have the right, which is absolute and
unconditional, to receive distributions to the extent provided
herein and therein with respect to such Certificate or to institute
suit for the enforcement of any such distribution, and such right
shall not be impaired without the consent of such Owner.
Section
6.09.
Rights and Remedies Cumulative.
Except as otherwise provided herein, no right or remedy herein
conferred upon or reserved to the Trustee or to the Owners is
intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or
otherwise. Except as otherwise provided herein, the assertion
or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section
6.10.
Delay or Omission Not Waiver.
No delay of the Trustee or any Owner of any Certificate to
exercise any right or remedy under this Agreement shall impair any
such right or remedy or constitute a waiver of such right or
remedy. Every right and remedy given by this Article VI or by
law to the Trustee or to the Owners may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by
the Owners, as the case may be.
Section
6.11.
Control by Owners.
The Owners of a majority of the Voting Rights represented by the
Certificates then Outstanding may direct the time, method and place
of conducting any proceeding for any remedy available to the
Trustee with respect to the Certificates or exercising any trust or
power conferred on the Trustee with respect to the Certificates or
the Trust Estate, including, but not limited to, those powers set
forth in Section 6.03 and Section 8.20 hereof, provided that:
(1)
such direction shall not be in conflict with any rule of law or
with this Agreement;
(2)
the Trustee shall have been provided with indemnity satisfactory
to it; and
(3)
the Trustee may take any other action deemed proper by the
Trustee, as the case may be, which is not inconsistent with such
direction; provided, however, that the Trustee need not take any
action which it determines might involve it in liability or may be
unjustly prejudicial to the Owners not so directing.
Section
6.12.
Indemnification by Nationstar Mortgage.
Nationstar Mortgage agrees to indemnify and hold the Trustee,
the Depositor and each Owner harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the
Trustee, the Depositor and any Owner sustain in any way related to
the failure of the Sellers to perform their duties in compliance
with the terms of this Agreement. Nationstar Mortgage shall
immediately notify the Trustee, the Depositor and each Owner if a
claim is made by a third party that any Seller has failed to
perform its obligations in compliance with the terms of this
Agreement, and Nationstar Mortgage shall assume (with the consent
of the Trustee) the defense of any such claim and pay all expenses
in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which
may be entered against the Depositor, the Servicer, the Sellers,
the Trustee and/or Owner in respect of such claim. The
Trustee shall, in accordance with instructions received from
Nationstar Mortgage, reimburse Nationstar Mortgage only from
amounts otherwise distributable on the Class X-IO, Class P and the
Class R Certificates for all amounts advanced by it pursuant to the
preceding sentence, except when a final nonappealable adjudication
determines that the claim relates directly to the failure of the
Sellers to perform their duties in compliance with the terms of
this Agreement. The provisions of this Section 6.12 shall
survive the termination of this Agreement, the resignation or
removal of the Trustee and the payment of the outstanding
Certificates.
END OF ARTICLE VI
ARTICLE
VII
ACCOUNTS,
DISBURSEMENTS AND RELEASES
Section
7.01.
Collection of Money.
Except as otherwise expressly provided herein, the Trustee shall
demand payment or delivery of all money and other property payable
to or receivable by the Trustee pursuant to this Agreement,
including all payments due on the Home Equity Loans in accordance
with the respective terms and conditions of such Home Equity Loans
and required to be paid over to the Trustee by the Servicer or by
any Sub-Servicer. The Trustee shall hold all such money and
property received by it as part of the Trust Estate and shall apply
it as provided in this Agreement.
Section
7.02.
Establishment of Accounts.
(a)
The Depositor shall cause the Certificate Account, the Net WAC
Cap Carryover Reserve Fund and the Swap Account to be established
on the Startup Day, and the Trustee shall maintain each of the
Certificate Account and the Net WAC Cap Carryover Reserve Fund at
the applicable Corporate Trust Office as an Eligible Account to be
held by the Trustee in the name of the Trust, in each case, on
behalf of the Owners of the Offered Certificates. The Swap
Account shall be maintained by the Supplemental Interest Trustee
pursuant to Section 7.12.
(b)
On each Monthly Remittance Date the Trustee shall determine
(subject to the terms of Section 10.03(j) hereof, based solely on
information provided to it electronically or in writing by the
Servicer) with respect to the immediately following Distribution
Date, the amounts that are expected to be on deposit in the
Certificate Account as of such Distribution Date.
Section
7.03.
Flow of Funds.
(a)
(i) The Trustee shall deposit in the Certificate Account without
duplication, upon receipt, with respect to Group 1, the proceeds of
any liquidation of the assets of the Trust insofar as such assets
relate to Group 1, all remittances made to the Trustee pursuant to
Sections 8.08(e), 8.09 and 8.10 with respect to Group 1 and the
Group 1 Monthly Remittance Amount remitted by the Servicer;
provided, that the Trustee then shall withdraw from the Certificate
Account, any Net Swap Payment or Swap Termination Payment owed to
the Swap Provider (other than any Swap Termination Payment owed to
the Swap Provider resulting from a Swap Provider Trigger Event) and
distribute such amount to the Supplemental Interest Trustee for
deposit in the Swap Account and distribution pursuant to Section
7.12.
(ii) The Trustee shall
deposit in the Certificate Account without duplication, upon
receipt, with respect to Group 2, the proceeds of any liquidation
of the assets of the Trust insofar as such assets relate to Group
2, all remittances made to the Trustee pursuant to Sections
8.08(e), 8.09 and 8.10 with respect to Group 2 and the Group 2
Monthly Remittance Amount remitted by the Servicer; provided, that
the Trustee then shall withdraw from the Certificate Account, any
Net Swap Payment or Swap Termination Payment owed to the Swap
Provider (other than any Swap Termination Payment owed to the Swap
Provider resulting from a Swap Provider Trigger Event) and
distribute such amount to the Supplemental Interest Trustee for
deposit in the Swap Account and distribution pursuant to Section
7.12.
(b)
On each Distribution Date, the Trustee shall make the following
allocations, disbursements and transfers (based solely on
information provided by the Servicer in writing), from amounts
deposited in the Certificate Account pursuant to subsection (a)
(other than any Prepayment Charges) in the following order of
priority, and each such allocation, transfer and disbursement shall
be treated as having occurred only after all preceding
allocations:
A.
With respect to amounts in the Certificate Account received with
respect to Group 1:
1.
To the Trustee, the Trustee Fee and any Transition Expenses for
Group 1.
2.
To the Group 1 Certificates, the Class Monthly Interest Amount
and any related Class Interest Carryover Shortfall for the
Distribution Date.
3.
The remaining amount pursuant to clause C. below.
B.
With respect to amounts in the Certificate Account received with
respect to Group 2:
1.
To the Trustee, the Trustee Fee and any Transition Expenses for
Group 2.
2.
Concurrently, to each Class of Group 2 Certificates, the related
Class Monthly Interest Amount and any related Class Interest
Carryover Shortfall for the Distribution Date, allocated among each
such Class of Group 2 Certificates on a pro rata basis based on
each Group 2 Certificate’s Class Monthly Interest Amount and
Class Interest Carryover Shortfall without priority among such
Group 2 Certificates.
3.
The remaining amount pursuant to clause C. below.
C.
With respect to any remaining amounts in the Certificate Account
received with respect to Group 1 and Group 2:
1.
Concurrently, to the Senior Certificates in both Certificate
Groups, the related Class Monthly Interest Amount and any related
Class Interest Carryover Shortfall to the extent not paid pursuant
to clauses A. and B. above on the applicable Distribution Date,
allocated among each such Class of Senior Certificates pro rata
based on the amount that would have been distributed to each such
Class in the absence of such shortfall.
2.
Sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates, in that order, the related Class Monthly Interest
Amount for the Distribution Date.
3.
To the Senior Certificates, an amount up to the Senior Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, concurrently
as follows:
(i)
Sequentially:
(a)
To the Group 1 Certificates, the Group 1 Principal Distribution
Amount until the Certificate Principal Balances of such
Certificates have been reduced to zero.
(b)
to the Group 1 Certificates, the remaining Group 2 Principal
Distribution Amount after distributions pursuant to clause
C.3.(ii)(a) below until the Certificate Principal Balances of such
Certificates have been reduced to zero.
(ii)
Sequentially:
(a)
To the Group 2 Certificates, the Group 2 Principal Distribution
Amount, sequentially, to the Class 2-AV-1, Class 2-AV-2, Class
2-AV-3 and Class 2-AV-4 Certificates, in that order, until the
respective Certificate Principal Balances of such Certificates have
been reduced to zero; provided, that notwithstanding anything to
the contrary in this Agreement, if on any Distribution Date, the
aggregate Certificate Principal Balance of the Subordinate
Certificates is equal to zero and the Overcollateralization Amount
is equal to zero, then the Group 2 Principal Distribution Amount
shall be distributed to the Group 2 Certificates, pro rata, based
on their respective Certificate Principal Balances.
(b)
To the Group 2 Certificates, the remaining Group 1 Principal
Distribution Amount after distributions pursuant to clause
C.3.(i)(a) above, sequentially to the Class 2-AV-1, Class 2-AV-2,
Class 2-AV-3 and Class 2-AV-4 Certificates, in that order, until
the respective Certificate Principal Balances of such Certificates
have been reduced to zero; provided, that notwithstanding the
foregoing order of priority, if on any Distribution Date, the
aggregate Certificate Principal Balance of the Subordinate
Certificates is equal to zero and the Overcollateralization Amount
is equal to zero, then the remaining Group 1 Principal Distribution
Amount after distributions pursuant to clause C.3.(i)(a) above
shall be distributed to the Group 2 Certificates, pro rata, based
on their respective Certificate Principal Balances.
4.
To the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, until the
Certificate Principal Balance thereof is reduced to zero.
5.
To the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, until the
Certificate Principal Balance thereof is reduced to zero.
6.
To the Class M-3 Certificates, the Class M-3 Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, until the
Certificate Principal Balance thereof is reduced to zero.
7.
To the Class M-4 Certificates, the Class M-4 Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, until the
Certificate Principal Balance thereof is reduced to zero.
8.
To the Class M-5 Certificates, the Class M-5 Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, until the
Certificate Principal Balance thereof is reduced to zero.
9.
To the Class M-6 Certificates, the Class M-6 Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, until the
Certificate Principal Balance thereof is reduced to zero.
10.
To the Class M-7 Certificates, the Class M-7 Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, until the
Certificate Principal Balance thereof is reduced to zero.
11.
To the Class M-8 Certificates, the Class M-8 Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, until the
Certificate Principal Balance thereof is reduced to zero.
12.
To the Class M-9 Certificates, the Class M-9 Principal
Distribution Amount for the Distribution Date, excluding any
Subordination Increase Amount included in that amount, until the
Certificate Principal Balance thereof is reduced to zero.
13.
To the Offered Certificates, the Subordination Increase Amount
for the applicable Distribution Date, allocated in the order of
priority set forth in clauses C.3. through C.12 above.
14.
Sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates, in that order, in each case, first (a) any related
Class Interest Carryover Shortfall and then (b) any related Class
Principal Carryover Shortfall.
15.
To the Net WAC Cap Carryover Reserve Fund, the lesser of (a) the
Class X-IO Distribution Amount and (b) the WAC Excess which amount
shall be accounted for as distributed to the Class X-IO
Certificates for U.S. federal income tax purposes.
16.
Concurrently, (i) to the Group 1 Certificates, the Group 1 Net
WAC Cap Carryover from and to the extent of funds on deposit in the
Net WAC Cap Carryover Reserve Fund with respect to Group 1 and (ii)
to the Group 2 Certificates, pro rata, the related Group 2 Net WAC
Cap Carryover from and to the extent of funds on deposit in the Net
WAC Cap Carryover Reserve Fund with respect to Group 2.
17.
Sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates, in that order, the related Subordinate Net WAC Cap
Carryover from and to the extent of funds on deposit in the Net WAC
Cap Carryover Reserve Fund.
18.
To the Supplemental Interest Trustee, for deposit in the Swap
Account, any Swap Termination Payments resulting from a Swap
Provider Trigger Event for payment pursuant to Section
7.12(viii).
19.
To the Trustee as reimbursement for all Trustee Reimbursable
Expenses incurred in connection with its duties and obligations
under the Agreement to the extent not paid as Trustee Fees or
Transition Expenses pursuant to clauses A.1. and B.1. above.
20.
To the Class X-IO Certificates, an amount equal to the Class
X-IO Distribution Amount less any amounts thereof applied pursuant
to clause C.15. above.
21.
To the Class R Certificates, the remainder.
(c)
Notwithstanding any of the foregoing provisions, the aggregate
amounts distributed on all Distribution Dates to the Owners of the
related Offered Certificates on account of principal pursuant to
Section 7.03(b) shall not exceed the original Certificate Principal
Balance of the related Offered Certificates.
The rights of the Owners to receive distributions from the
proceeds of the Trust Estate, and all ownership interests of the
Owners in such distributions, shall be as set forth in this
Agreement. In this regard, all rights of the Owners of the
Class X-IO and Class R Certificates to receive distributions in
respect of the Class X-IO and Class R Certificates shall be subject
and subordinate to the preferential rights of the holders of the
Offered Certificates to receive distributions thereon and the
ownership interests of such Owners in such distributions, as
described herein. In accordance with the foregoing, the
ownership interests of the Owners of the Class X-IO and Class R
Certificates in amounts deposited in the Accounts from time to time
shall not vest unless and until such amounts are distributed in
respect of the Class X-IO and Class R Certificates in accordance
with the terms of this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, the Owners of the
Class X-IO and Class R Certificates shall not be required to refund
any amount properly distributed on the Class X-IO and Class R
Certificates pursuant to this Section 7.03.
(d)
On each Distribution Date, the Trustee shall withdraw (subject
to the terms of Section 10.03(j) hereof, based solely on
information provided to it electronically or in writing by the
Servicer) an amount equal to any Prepayment Charges then on deposit
in the Certificate Account and shall distribute such amounts to the
Class P Certificates. On the first Distribution Date
following the expiration of the latest prepayment term with respect
to the related Home Equity Loans and if funds are available on such
date, the Class P Certificates shall be entitled to its outstanding
Certificate Principal Balance prior to any distributions pursuant
to Section 7.03(b)(22) on such Distribution Date.
Section
7.04.
Net WAC Cap Carryover Reserve Fund; WAC Excess.
(a)
On the Startup Day, the holders of the Class X-IO Certificates
will deposit, or cause to be deposited, into the Net WAC Cap
Carryover Reserve Fund, $10,000. On each Distribution Date as
to which there is WAC Excess to the extent not paid under
Section 7.12(b), the Trustee has been directed to, and shall
therefore, deposit into the Net WAC Cap Carryover Reserve Fund an
amount equal to the WAC Excess to the extent of the Class X-IO
Distribution Amount which is payable pursuant to Section 7.03(b)
clause C.16. and clause C.17. If no WAC Excess is payable on
a Distribution Date, the Trustee shall deposit into the Net WAC Cap
Carryover Reserve Fund on behalf of the Class X-IO
Certificateholders an amount such that when added to other amounts
already on deposit in the fund, the aggregate amount on deposit
therein is equal to $10,000. For federal and state income tax
purposes, the Class X-IO Certificateholders will be deemed to be
the owners of the Net WAC Cap Carryover Reserve Fund. Amounts
held in the Net WAC Cap Carryover Reserve Fund and not
distributable to the Offered Certificateholders on any Distribution
Date will be invested by the Trustee in investments designated by
the Class X-IO Certificateholders having maturities on or prior to
the next succeeding Distribution Date on which such amounts will be
distributable to the Offered Certificateholders. Upon the
termination of the Trust, or the payment in full of the Offered
Certificates, all amounts remaining on deposit in the Net WAC Cap
Carryover Reserve Fund will be released from the lien of the Trust
and distributed to the Class X-IO Certificateholders or their
designees. The Net WAC Cap Carryover Reserve Fund will be
part of the Trust but not part of any REMIC created hereunder and
any payments to the Offered Certificates of WAC Excess will not be
payments with respect to a "regular interest" in a REMIC within the
meaning of Code Section 860G(a)(1).
(b)
The Trustee shall treat the Net WAC Cap Carryover Reserve Fund
as an outside reserve fund within the meaning of Treasury
Regulation Section 1.860G-2(h) that is owned by the Class X-IO
Certificateholders and that is not an asset of any REMIC.
(c)
[Reserved].
(d)
Notwithstanding the priority and sources of payments set forth
in Section 7.03 hereof or otherwise, the Trustee shall account for
all distributions on the Certificates as set forth in this section.
In no event shall any payments provided for in this section
be treated as payments with respect to a "regular interest" in a
REMIC within the meaning of Code Section 860G(a)(1) and shall be
treated as an asset held separate and apart from any REMIC created
under this Agreement in accordance with Treasury regulation section
1.860G-2(i).
Section
7.05.
Investment of Accounts.
(a)
Consistent with any requirements of the Code, all or a portion
of any Account held by the Trustee or Supplemental Interest Trustee
for the benefit of the Owners may (i) remain uninvested or (ii) be
invested and reinvested by the Trustee or Supplemental Interest
Trustee, as applicable, as directed in writing by the Servicer in
the name of the Trustee or Supplemental Interest Trustee, as
applicable, for the benefit of the Owners in one or more Eligible
Investments bearing interest or sold at a discount. The bank
serving as Trustee or Supplemental Interest Trustee, as applicable,
or any Affiliate thereof may be the obligor on any investment which
otherwise qualifies as an Eligible Investment. No investment
in any Account shall mature later than the Business Day immediately
preceding the next Distribution Date. Amounts held in the
Certificate Account shall be invested in Eligible Investments,
which Eligible Investments shall mature no later than the Business
Day preceding the immediately following Distribution Date or, if
such Eligible Investments are an obligation of the Trustee or are
money market funds for which the Trustee or any Affiliate is the
manager or the adviser, such Eligible Investments shall mature no
later than the following Distribution Date.
(b)
If any amounts are needed for disbursement from any Account held
by the Trustee or Supplemental Interest Trustee, as applicable, and
sufficient uninvested funds are not available to make such
disbursement, the Trustee or Supplemental Interest Trustee, as
applicable, shall cause to be sold or otherwise converted to cash
as directed in writing by the Servicer a sufficient amount of the
investments in such Account. No investments will be
liquidated prior to maturity unless the proceeds thereof are needed
for disbursement.
(c)
All income or other gain from investment in the Certificate
Account held by the Trustee shall be withdrawn by the Trustee and
remitted to the Servicer (except with respect to all income or
other gain from investment earned on the Business Day immediately
preceding a Distribution Date, which amounts shall be retained by
the Trustee). Any investment losses on amounts held in the
Certificate Account shall, promptly upon realization of such loss,
be contributed by the Servicer to the Trustee for deposit in the
Certificate Account.
Section
7.06.
Payment of Trust Expenses.
(a)
With respect to the Certificate Account the Trustee shall
receive all income and other gains from investments as described in
Section 7.05(c).
(b)
The Seller shall pay directly on the Startup Day the reasonable
fees and expenses of counsel to the Trustee.
Section
7.07.
Eligible Investments.
The following are Eligible Investments:
(a)
direct general obligations of, or obligations fully and
unconditionally guaranteed as to the 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, FHLMC senior debt obligations, and
FNMA senior debt obligations, but excluding any of such securities
whose terms do not provide for payment of a fixed dollar amount
upon maturity or call for redemption;
(b)
Federal Housing Administration debentures;
(c)
FHLMC participation certificates which guaranty timely payment
of principal and interest and senior debt obligations;
(d)
Consolidated senior debt obligations of any Federal Home Loan
Banks;
(e)
FNMA mortgage-backed securities (other than stripped mortgage
securities) and senior debt obligations;
(f)
Federal funds, certificates of deposit, time deposits, and
bankers’ acceptances (having original maturities of not more
than 365 days) of any domestic bank, the short-term debt
obligations of which have been rated "A-1" by Standard &
Poor’s, "P-1" by Moody’s and, if rated by Fitch, "F1+"
by Fitch;
(g)
Deposits of any bank or savings and loan association (the
long-term deposit rating of which is "A2" or better by
Moody’s, "AA-" or better by Standard & Poor’s and,
if rated by Fitch, "AA-" or better by Fitch) which has combined
capital, surplus and undivided profits of at least $50,000,000
which deposits are insured by the FDIC and held up to the limits
insured by the FDIC;
(h)
Repurchase agreements collateralized by securities described in
clause (a), (c), or (e) above with any registered broker/dealer
subject to the Securities Investors Protection Corporation’s
jurisdiction and subject to applicable limits therein promulgated
by Securities Investors Protection Corporation or any commercial
bank, if such broker/dealer or bank has an uninsured, unsecured and
unguaranteed short-term or long term obligation rated "P-1" or
"Aa2", respectively, or better by Moody’s, "F-1+" or "AA",
respectively, or better by Standard & Poor’s, and, if
rated by Fitch, "F-1+" or "AA-", respectively, or better by Fitch
provided:
a.
A master repurchase agreement or specific written repurchase
agreement governs the transaction;
b.
The securities are held free and clear of any lien by the
Trustee or an independent third party acting solely as agent for
the Trustee, and such third party is (a) a Federal Reserve Bank or
(b) a bank which is a member of the FDIC and which has combined
capital, surplus and undivided profits of not less than
$125,000,000 or (c) a bank approved in writing for such purpose by
the Trustee, and the Trustee shall have received written
confirmation from such third party that it holds such securities,
free and clear of any lien, as agent for the Trustee;
c.
A perfected first security interest under the Uniform Commercial
Code, or book-entry procedures prescribed at 31 CFR 306.1 et seq.
or 31 CFR 350.0 et seq., in such securities is created for the
benefit of the Trustee;
d.
The repurchase agreement has a term of thirty days or less and
the Trustee will value the collateral securities no less frequently
than weekly marked-to-market at current market price plus interest
and will liquidate the collateral securities if any deficiency in
the required collateral percentage is not restored within two
business days of such valuation; and
e.
The fair market value of the collateral securities in relation
to the amount of the repurchase obligation, including principal and
interest, is equal to at least 106%.
(i)
Commercial paper (having original maturities of not more than
270 days) rated in the highest short-term rating categories of
Standard & Poor’s, Moody’s and, if rated by Fitch,
Fitch;
(j)
Any money market fund rated "AAAm" or "AAAm-G" by Standard &
Poor’s, "Aaa" by Moody’s and, if rated by Fitch, AA by
Fitch which funds are registered under the Investment Company Act
of 1940 and whose shares are registered under the Securities Act,
including any such fund that is managed by the Trustee or any
Affiliate of the Trustee or for which the Trustee or any of its
Affiliates acts as an adviser;
(k)
Any other investment permitted by each of the Rating Agencies
provided that such investments are not inconsistent with paragraph
35(c)(6) of FAS 140; and
(l)
Repurchase agreements provided the repurchase agreements are
properly accounted for as (a) a borrowing by the Trust and not (b)
as a purchase by the Trust and a subsequent sale by the Trust, all
in accordance with US generally accepted accounting principles.
PROVIDED THAT NO INSTRUMENT
DESCRIBED ABOVE 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 PROVIDED A YIELD
TO MATURITY AT PAR GREATER THAN 120% OF THE YIELD TO MATURITY AT
PAR OF THE UNDERLYING OBLIGATIONS; AND PROVIDED, FURTHER, THAT ALL
INSTRUMENTS DESCRIBED HEREUNDER SHALL MATURE AT PAR ON OR PRIOR TO
THE NEXT SUCCEEDING DISTRIBUTION DATE UNLESS OTHERWISE PROVIDED IN
THIS AGREEMENT AND THAT NO INSTRUMENT DESCRIBED HEREUNDER MAY BE
PURCHASED AT A PRICE GREATER THAN PAR IF SUCH INSTRUMENT MAY BE
PREPAID OR CALLED AT A PRICE LESS THAN ITS PURCHASE PRICE PRIOR TO
STATED MATURITY.
Section
7.08.
Accounting and Directions by Trustee.
By 12:00 noon New York time, on each Distribution Date (or such
earlier period as shall be agreed by the Seller and the Trustee),
the Trustee shall notify (subject to the terms of Section 10.03(j)
hereof, based solely on information provided to the Trustee by the
Servicer and upon which the Trustee may conclusively rely) the
Seller, the Depositor and each Owner, of the following information
with respect to such Distribution Date (which notification may be
given by facsimile, or by telephone promptly confirmed in writing
or may be satisfied by Section 7.10):
(1)
The aggregate amount on deposit in the Certificate Account as of
the related Monthly Remittance Date;
(2)
The Class Principal Distribution Amount, with respect to each
Class individually, and all Classes in the aggregate on such
Distribution Date;
(3)
The amount of any Excess Interest;
(4)
The application of the amounts described in clauses (1) and (3)
above to be made on such Distribution Date in accordance with
Section 7.03 hereof;
(5)
The Certificate Principal Balance of each Class, the aggregate
amount of the principal of each Class of the Offered Certificates
to be paid on such Distribution Date and the remaining Certificate
Principal Balance of each Class of Offered Certificates following
any such payment;
(6)
The amount, if any, of any Realized Losses for each Home Equity
Loan Group for the related Remittance Period and any Applied
Realized Loss Amounts and Recoveries with respect to the
Subordinate Certificates for the related Distribution Date; and
(7)
The amount of any Subordination Increase Amount, any Excess
Overcollateralization Amount and the Required Overcollateralization
Amount, in each case for the relevant Distribution Date.
Section
7.09.
Reports by Trustee to Owners.
(a)
On each Distribution Date the Trustee shall make available to
each Owner, the Underwriters, the Depositor, the Swap Provider,
Standard & Poor’s and Moody’s:
(i)
the amount of the distribution with respect to such
Owner’s Certificates (based on a Certificate in the original
principal amount of $1,000);
(ii)
the amount of such Owner’s distributions allocable to
principal, separately identifying the aggregate amount of any
Prepayments in full or other Prepayments or other recoveries of
principal included therein (based on a Certificate in the original
principal amount of $1,000) and any related Subordination Increase
Amount;
(iii)
the amount of such Owner’s distributions allocable to
interest (based on a Certificate in the original principal amount
of $1,000);
(iv)
any Class Interest Carryover Shortfall for any Class of Offered
Certificates for such Distribution Date;
(v)
any Class Principal Carryover Shortfall for any Class of
Subordinate Certificates for such Distribution Date;
(vi)
the principal amount of each Class of Offered Certificate which
will be Outstanding and the aggregate Loan Balance of each Group,
after giving effect to any payment of principal on such
Distribution Date;
(vii)
the Overcollateralization Amount and Required
Overcollateralization Amount, if any, remaining after giving effect
to all distributions and transfers on such Distribution Date;
(viii)
based upon information furnished by the Servicer, such
information as may be required by Section 6049(d)(7)(C) of the Code
and the regulations promulgated thereunder to assist the Owners in
computing their market discount;
(ix)
the total of any Substitution Amounts and any Loan Purchase
Price amounts included in such distribution with respect to each
Group;
(x)
the weighted average Coupon Rate of the Home Equity Loans;
(xi)
the amount of the Prepayment Charges remitted by the
Servicer;
(xii)
such other information as any Owner may reasonably request with
respect to Delinquent Home Equity Loans;
(xiii)
the weighted average gross margin of the Adjustable Rate Home
Equity Loans;
(xiv)
the largest Loan Balance outstanding in each Group;
(xv)
the Basic Principal Amount for each Group for such Distribution
Date;
(xvi)
the Group 1 Net WAC Cap Carryover, the Group 2 Net WAC Cap
Carryover and the Subordinate Net WAC Cap Carryover paid to the
Owners of each Class of Offered Certificates for such Distribution
Date and any Group 1 Net WAC Cap Carryover, Group 2 Net WAC Cap
Carryover and Subordinate Net WAC Cap Carryover remaining
unpaid;
(xvii)
the related Certificate Rate for each Class for the related
Distribution Date;
(xviii)
the Group 1 Net WAC Cap, the Group 2 Net WAC Cap and the
Subordinate Net WAC Cap for such Distribution Date; and
(xix)
the amount of any Applied Realized Loss Amounts applied with
respect to each Class of Subordinate Certificates;
(xx)
the occurrence of the Stepdown Date; and
(xxi)
with respect to the second Distribution Date, the number and
aggregate Loan Balance of any Delayed Delivery Home Equity Loans
not delivered within twenty days after the Startup Day.
In addition to the information listed above, not later than the
first Business Day immediately following the Distribution Date, the
Servicer shall provide to the Trustee for inclusion in each such
report any other information required by Form 10-D, including, but
not limited to, the information required by Item 1121 (17 C.F.R.
§ 229.1121) of Regulation AB.
The Servicer shall provide to the Trustee the information
described in Section 8.08(f) and in clause (b) below to enable the
Trustee to perform its reporting obligations under this Section,
and such obligations of the Trustee under this Section are
conditioned upon such information being received and the
information provided in clauses (ii), (ix) and (x) above shall be
based solely upon information contained in the monthly servicing
report provided by the Servicer to the Trustee pursuant to Section
8.08 hereof.
(b)
In addition, on each Distribution Date the Trustee will make
available to each Owner, the Underwriters, Standard &
Poor’s and Moody’s, together with the information
described in subsection (a) preceding, the following information
with respect to each Home Equity Loan Group and for all Groups in
the aggregate which is hereby required to be prepared by the
Servicer and furnished to the Trustee for such purpose on or prior
to the related Monthly Remittance Date:
(i)
the number and aggregate Loan Balance of Home Equity Loans (a)
30-59 days Delinquent, (b) 60-89 days Delinquent and (c) 90 or more
days Delinquent, as of the close of business on the last Business
Day of the calendar month immediately preceding the Distribution
Date, (d) the number and aggregate Loan Balance of all Home Equity
Loans as of such Distribution Date after giving effect to any
payment of principal on the last day of the Remittance Period
immediately preceding the Distribution Date and (e) the percentage
that each of the amounts represented by clauses (a), (b) and (c)
represent as a percentage of the respective amounts in clause
(d);
(ii)
the status and the number and dollar amounts of all Home Equity
Loans in foreclosure proceedings as of the close of business on the
last Business Day of the calendar month immediately preceding such
Distribution Date, separately stating, for this purpose, all Home
Equity Loans with respect to which foreclosure proceedings were
commenced in the immediately preceding calendar month;
(iii)
the number of Mortgagors and the Loan Balances of (a) the
related Home Equity Loans involved in bankruptcy proceedings as of
the close of business on the last Business Day of the calendar
month immediately preceding such Distribution Date and (b) Home
Equity Loans that are "balloon" loans;
(iv)
the existence of (and aggregate Loan Balance of the Home Equity
Loans relating to) any REO Properties, as of the close of business
on the last Business Day of the calendar month immediately
preceding the Distribution Date;
(v)
the book value of any REO Property as of the close of business
on the last Business Day of the calendar month immediately
preceding the Distribution Date;
(vi)
cumulative Realized Losses and Recoveries incurred on the Home
Equity Loans from the Cut-Off Date to and including the Remittance
Period immediately preceding the Distribution Date;
(vii)
the amount of Net Liquidation Proceeds realized on the Home
Equity Loans during the Remittance Period immediately preceding the
Distribution Date; and
(viii)
the 60+ Delinquency Percentage (Rolling Three Month) with
respect to such Distribution Date;
(ix)
for each Distribution Date beginning with the Distribution Date
in May 2010, the percentage obtained by dividing (a) the aggregate
amount of cumulative Realized Losses, minus the aggregate amount of
cumulative Recoveries incurred on the Home Equity Loans from the
Cut-Off Date through the last day of the related Remittance Period
by (b) the aggregate Loan Balance of the Home Equity Loans as of
the Cut-Off Date; and
(x)
whether the Trigger Event has occurred.
The Trustee shall forward such report (together with the
information described in (a) above) concurrently with each
distribution to the Certificateholders and the Rating Agencies
(which requirement may be satisfied by complying with Section
7.10).
(c)
The Trustee shall, on behalf of the Trust, cause to be filed
with the Commission any periodic reports required to be filed on
behalf of the Trust under the provisions of the Exchange Act, and
the rules and regulations of the Commission thereunder, including
as provided in Article XII. Upon the request of the Trustee,
each of the Seller, the Servicer and the Depositor shall cooperate
with the Trustee in the preparation of any such report and shall
provide to the Trustee in a timely manner all such information or
documentation as is in the possession of such Person and that the
Trustee may reasonably request in connection with the performance
of its duties and obligations under this Section.
The Trustee shall file with the Commission a Form 15 with
respect to the Trust as soon as practicable following the first
date on which the conditions to filing thereof have been satisfied.
Following the filing of such Form 15, the Trustee shall (i) notify
the Custodian and the Swap Provider of such filing and (ii) submit
a certificate addressed to an officer of the Depositor certifying
that all filings under the Exchange Act have been made and shall
attach a copy of acceptance slips for such filings.
Section
7.10.
Reports by Trustee.
(a)
The Trustee shall report to the Depositor, the Seller and each
Owner, with respect to the amount on deposit in the Certificate
Account (including the amount therein relating to each Group) and
the identity of the investments included therein, as the Depositor,
the Seller or any Owner may from time to time reasonably request.
Without limiting the generality of the foregoing, the Trustee
shall, at the reasonable request of the Depositor, the Seller or
any Owner, transmit promptly to the Depositor, the Seller and any
Owner copies of all accountings of receipts in respect of the Home
Equity Loans furnished to it by the Servicer and shall notify the
Seller if any Monthly Remittance Amount has not been received by
the Trustee when due.
(b)
The Trustee shall report to each Owner with respect to any
written notices it may from time to time receive which provide an
Authorized Officer with actual knowledge that any of the statements
set forth in Section 3.04(b) hereof are inaccurate.
(c)
The Trustee will make the report referred to in Section 7.08 and
7.09 herein (and, at its option, any additional files containing
the same information in an alternative format) available each month
to Certificateholders, other parties to this Agreement and the
Custodian via the Trustee’s internet website, which is
presently located at https://sfr.bankofny.com. Persons that
are unable to use the above website are entitled to have a paper
copy mailed to them via first Class mail by calling the Trustee at
(800) 332-4550. The Trustee shall have the right to change
the way the report referred to in Section 7.09 herein is
distributed in order to make such distribution more convenient
and/or more accessible to the above parties and to the
Certificateholders. The Trustee shall provide timely and
adequate notification to all above parties and to the
Certificateholders regarding any such change.
(d)
The Trustee shall notify the Swap Provider at least 5 Business
Days prior to each Distribution Date with respect to the Aggregate
Certificate Balance of the Offered Certificates as of the prior
Distribution Date after required distribution is made on such
Distribution Date.
Section
7.11.
Allocation of Losses.
(a)
On each Distribution Date, the Trustee shall determine the total
of the Applied Realized Loss Amounts for such Distribution Date.
The Applied Realized Loss Amount for any Distribution Date
shall be applied by reducing, on a dollar for dollar basis, the
Certificate Principal Balance of each Class of Subordinate
Certificates beginning with the Class of Subordinate Certificates
then outstanding with the lowest relative payment priority, in each
case until the respective Certificate Principal Balance thereof is
reduced to zero. Any Applied Realized Loss Amount allocated
to a Class of Subordinate Certificates shall be allocated among the
Subordinate Certificates of such Class in proportion to their
respective Percentage Interests.
(b)
With respect to any Class of Subordinate Certificates to which
an Applied Realized Loss Amount has been allocated (including any
such Class for which the related Certificate Principal Balance has
been reduced to zero), the Certificate Principal Balance of such
Class will be increased up to the amount of related Recoveries for
such Distribution Date, beginning with the Class of Subordinate
Certificates with the highest relative payment priority, up to the
amount of the lesser of (i) the Applied Realized Loss Amounts
previously allocated to reduce such Certificate Principal Balance
and (ii) the outstanding Class Principal Carryover Shortfall of
such Class. Any increase to the Certificate Principal Balance
of a Class of Subordinate Certificates shall be allocated among the
Subordinated Certificates of such Class in proportion to their
respective Percentage Interests.
Section
7.12.
Swap Account.
(a)
The Depositor hereby directs the Trustee, in its capacity as
Supplemental Interest Trustee to execute, deliver and perform its
obligations under the Swap Agreement on the Startup Date and
thereafter on behalf of the Supplemental Interest Trust, and to
establish the Swap Account pursuant to Section 7.02(a). The
Seller, the Depositor, the Servicer and the Certificateholders, by
their acceptance of such Certificates acknowledge and agree that
the Trustee shall execute, deliver and perform its obligations
under the Swap Agreement and shall do so solely in its capacity as
Supplemental Interest Trustee of the Supplemental Interest Trust
and not in its individual capacity. Promptly upon receipt,
the Supplemental Interest Trustee will deposit into the Swap
Account all funds received from the Trustee pursuant to Section
7.03(a) and Section 7.03(b) clause 20 and all funds received from
the Swap Provider under the Swap Agreement. Amounts on
deposit in the Swap Account shall be invested in accordance with
Section 7.05.
(b)
On each Distribution Date after the Startup Day but not beyond
the February 2013 Distribution Date, to the extent necessary,
following all distributions pursuant to Section 7.03(b), the
Supplemental Interest Trustee shall apply, all amounts, if any, on
deposit in the Swap Account (other than investment earnings on
funds held in the Swap Account, which shall be for the account of
the Servicer) in the following order of priority:
(i)
first, to the Swap Provider, any Net Swap Payment owed to the
Swap Provider pursuant to the Swap Agreement for such Distribution
Date and any Net Swap Payments owed to the Swap Provider remaining
unpaid from prior Distribution Dates;
(ii)
second, to the Swap Provider, any Swap Termination Payment owed
to the Swap Provider not resulting from a Swap Provider Trigger
Event pursuant to the Swap Agreement;
(iii)
third, to the Offered Certificates (other than the Class M-8 and
Class M-9 Certificates), t
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